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I think we are getting a fair old consensus around housing and what might be happening post the Grant Robertson revolution of early 2021.
Commentary seems to suggest investors are stepping back with a wait and see attitude.
But sadly, also the first home buyer is disappearing as well.
The stats don’t back it up yet: records are still being shattered all over the place.
And here’s the real warning: places like Britain and Australia, who have the various taxes and so called constraints that Grant thinks will work, are booming ahead anyway.
Thus indicating, as we have said all along, governments don’t regulate the housing market; the housing market regulates the housing market.
The Reserve Bank weighed in last week with another of their monetary policy statements, they still think things are too frothy and issued the warning that more restrictions could well be on their way.
There are a couple of things to come out of all this:
One, the fact first timers are out is a classic example of why the government doesn’t get it.
The reason they were “in” was FOMO - fear of missing out.
Now, all that’s happened is they’ve been spooked by the changes. Some will be under the delusion that prices are dropping, which they won’t be.
What they do run the risk of is tighter regulation from Adrian at the bank, and before they know it, they are never going to have the deposit or the wages to support a tilt at a house.
Two, you might have noticed a number of banks last week reported their results, and although we are not out of the woods, the profitability is back.
And yet again, the banks are proving, despite Adrian’s tut tutting, that they actually know what they are doing, and therefore should be left alone to lend to whoever they see fit to borrow some money and launch into the housing market.
The real danger here is you have a couple of power-mad sticky beaks.
Grant, who can’t get his hands on the controls fast enough, and Adrian who loves to tell fellow bankers what to do and when to do it.
Between the two of them, they’re helping next to no one.
There is no point in ridding the market of investors, because people need rentals; always have, always will.
And there is no point in freaking out first timers because by the time they’ve worked out Grant and Adrian are control freaks, it’ll be too late.
Overall, my guess is the increases we’ve seen will cool, but you’ll still be seeing price growth, why? Because money is dirt cheap.
We love houses, we love to spend, and the new builds aren’t being built fast enough to meet demand.
None of this is complex; it’s just that some may well miss out because of a couple of blokes in Wellington never quite got their heads around the difference between theory and reality.
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