The following article provides some interesting reading especially as a real estate investor.
The great deals that are appearing are not being snapped up due to people not wanting to borrow and in some case not being able to borrow.
This is exactly what I predicted 4 months ago on a thread at property talk.
The bargains will appear but no one will be able to take advantage of them because of the tightening in lending criteria.
Quote:
Average house price falls for a second month
Monday 8 December 2008
http://www.landlords.co.nz/read-article.php?article_id=3366
The average New Zealand house price fell 6.8% in November from a year earlier, the second monthly slide of that magnitude, as the weakened economy sapped people’s appetite to take on mortgage debt.
Banks have tightened their lending criteria in the wake of the credit crisis and that may be reducing the benefits of lower borrowing costs, said Blue Hancock, a spokesman for QV Valuations. “While interest rates continue to fall, sharply tighter lending criteria may be dampening any immediate impact on the property market,” he said.
The average New Zealand sale price fell to $375,408 last month, from $379,290 in October, QV Valuations said in a statement. House values are now at about their March 2007 levels. Reserve Bank Governor Alan Bollard yesterday cut the official cash rate 150 basis points to 5%, prompting trading banks to reduce their floating and short-term fixed rate mortgages.
Property values in the Auckland region fell 7.4%, with an average sale price of $494,136. In Hamilton, property values fell 8.5% and the average price eased back to $345,785. Tauranga values fell 8.4% and the average sale price fell to $430,464.
In Wellington, values fell by 6%, the smallest decline of any region. The average house price slipped to $411,922. Christchurch property values declined 7.4% to $355,828 and in Dunedin, the decline in value was 7.6% and the average price rose slightly to $258,671.
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