Raine & Horne Kumeu - Hobsonville Blog

Would someone blow the whistle!

It seems we have been waiting a long time for the Government and the Reserve Bank to work out who is blowing the whistle and getting the Auckland Property Market underway. 

Since December 2021 with the introduction of the CCCFA (responsible Lending Act, alias the fish and chip wrapper act), the loan to value restrictions, the loan to income restrictions and the debt ratio restriction, we often lament that it is a shear miracle that any mortgages pop out the end of the application pipeline. 

Over the past year we have seen the rhetoric change with Government repealing much of the CCFA and peeling some of the over-burden, however being careful not to add fuel to the inflationary run-away. Like-wise the Reserve Bank has been late to the party but almost like a stray cat, late to feed, Adrian Orr is making sure that home buyers and businesses understand it is time to get ready for investment.

But the whistle blowers are the banks, who have been sitting on massive profits over the last three years and have made, and still make attaining a mortgage or getting business finance laboured, drawn out, painful and expensive.  It is the banks that control the game, control the profits and access the risk.  However in saying this, risk is a mute point, purchasing in a recession stimulates growth and allows for capital gain and yields profit for individuals and businesses, and in turn the risk is significantly reduced. 

Over the last 12 months we have seen a continued sag in Auckland's property values, a buying community that is extremely timid, and is keen to look but reluctant to commit unless the lure of price reductions proves too great. 

Like many others in the Auckland, North West Real Estate Community, we are ready, we are waiting for the game to start, for goodness sake, someone blow that damn whistle.