Bursting the Housing Bubble | The Jackal

19 Jun 2011

Bursting the Housing Bubble

The Sunday Star Times had an article by Gregg Ninness with the header “House buyers in the box seat,” in today's addition. Ninness cherry picked some “evidence” to support his claims that “there has never been a better time to buy a house.” 

However the only figures he provides are those showing that the median house price fell in some areas between April and May, totally ignoring many other factors that make his egregious lead in to the story completely ridiculous!

Greg Ninness' article is plainly a media beat up to promote the failing and stagnant housing market. It’s not a better time to buy a house in New Zealand if you’re a Kiwi, because the cost of living has increased and therefore the ability to service a mortgage has decreased. Amongst other factors, this makes the Sunday Star Times front page article a sick joke at our expense.

Ninness claims that the market is recovering because May showed an increase in unconditional contracts, but fails to mention that April on average has a turnover of dwellings down 15% on March. The increase is a seasonal one not attributed to speculators rescinding their capital investment or any notable nation wide reduction in house prices. REINZ also reported:
There was a decline in the net percent of respondents noting vendors requesting appraisals to a net 4% saying fewer were doing so than in March. Last month’s survey produced a net positive reading of 11% so if we put this result alongside the decline in auction success noted above it suggests auction clearance rates fell because buyers pulled back rather than that sellers raised reserve prices.
Less Of A Buyers Market - A net 4% of respondents say that they feel sellers are more motivated. This result is down from a net 15% in our survey last month and suggests that underlying the various movements in the previous indicators there is perceived to be a shift underway toward sellers starting to hold the upper hand – though the market is not at that point yet, as evidenced by the response above in the prices question.
So where the fuck did Ninness get his information from? One of the main factors for declining home ownership is the very low median yearly income rate for New Zealander's... We're effectively paid peanuts.

So far the average house price for 2011 is $429,249. Even with lower interest rates the average Kiwi can't afford to purchase the average house with a median income of only $27,508 per year. Kiwi's owning a slice of heaven has been declining because of low wages, speculation and increases in the cost of living, not to mention the Governments failure to remedy the negative situation at all.

QuickStats show home ownership has been progressively declining for over 20 years now. Home ownership was highest in the 1991 Census, at 73.8%. In 2006 the census showed a fall to 54.5%, which is a drop of 19% in 15 years.

Circumstances on average are worse for most Kiwi's with no let up in the squeeze put on peoples wallets. It's no wonder that National have chosen to delay the 2011 Census until 2013. In my opinion, the Christchurch earthquakes were used as a convenient excuse to hide the Governments failure.

Nothing has changed to stop the downward trend. Projecting this forward gives us a figure of 48.2% of New Zealander's owning and occupying their homes in 2011, but the pessimist in me says it's more likely to be closer to 30%.
So did Ninness even bother to read the latest REINZ report (PDF) at all? He's clearly in the denial phase, evidenced by his picking and choosing figures to come up with his grandiose claims. Such disinformation is the occupation of a hack, not a legitimate journalist.

The information presented by Ninness is not indicative of the current housing market, nor is it providing much journalistic integrity to a Newspaper that should be founded on factual information. Ninness' article pretty much says that a slave isn't carrying a tone of rocks because a pebble fell off the load. It's total rubbish!

I know our print media is slanted towards painting a rosy view, but when it blatantly lies to the public to promote a falsehood, questions need to be asked... like why have a third of vendors left the sector recently and why is the Sunday Star Times so blatantly misrepresenting the facts? The truth of the matter is that New Zealander’s aren’t buying houses because we can't afford to... So pull your fucking heads in Sunday Star Times.