We haven't seen the property market correct itself yet, so the LVRs that came into place this week are yet to kick in obviously.
There are more coming in May, all part of the mad scramble to somehow do what no one else has managed, gerrymander a market that, by in large, sorts itself out.
If you want to seriously affect prices, you open land up. They haven't, and they won't.
And the reality is most investors who seem to be the major target of the opprobrium are in fact just mums and dads with one house. That statistics last week showed us this, only six percent of players appear to have a handful of properties. So target investors all you want, boost LVRs, extend the bright-line test, but it will have a marginal affect at most.
We can build more houses. The New Zealand Initiative say we need about another 30,000 on top of the 40,000 we are already building. And in that latter number is the clue, we are building flat out, we don’t have the labour to build more, we don’t have the supplies, and that’s before you get to costs which are rising.
Westpac suggest house price rises this year of 17 percent. They're right. Whether it's 16, 17, 14 or 19 percent, prices are only going one way.
What will slow things is when money gets harder to afford, and/or prices get to a level of insanity. At that point the market will stall, in some areas possibly fall a bit.
But history is all you need to be able to see and tell this story. We have been here before, we have been here before a number of times. This current burst is a big one, but it's not unprecedented. Even though the times that drive it are.
The ones I feel most sorry for are the first timers. The deposit required now is absurd, but there in lies the trouble.
Because we don’t learn from history, because we are driven by this mad conviction that a bursting bubble is but days away, we don’t let first timers in the way we should. Given the money is at two percent, it's the deposit that kills you, not the mortgage.
Make the mortgage smaller, make it five percent. Make it like Britain, Britain gets it. They’ve got the same issues we do, Australia has the same issues we do, the States has the same issues we do, property all over the closed world is in demand.
But five percent, beats 20 percent. Why don’t we get that? Because we are paranoid. Jaw boning the market and targeting the wrong people will get us where it got us previously, nowhere.
It's only doom and gloom if you’ve got the wrong mindset, and think failed polices are the answer.