Auckland Anatomy of a Housing Bubble

24 06 2013

All the elements of a bubble are evident, including:

  • Panic buying by first home buyers for fear of missing out;
  • Rampant investor speculation and “no money down, get rich” investment seminars;
  • Expectations that Auckland house prices will continue to rise, with claims of a further 30% upside to prices;
  • Easy credit mixed with land supply restrictions; and
  • Heavy buying from foreigners.

Watching this video reminds me of Australia in the early-2000s, when the likes of Henry Kaye were running investment seminars teaching buyers how to buy property off-the-plan without a deposit, and a spate of property flipping shows graced our TV sets.

I can’t see how this can end well for New Zealanders, who already hold a disproportionate amount of their wealth in housing (see below IMF charts), or their (our) banks.

Original: By Leith van Onselen




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