COMMENT

Wellington is short of houses, house prices are now rising, median asking price for the country is at a new record level, and listings are up.

Predictions of price growth range from 7 per cent to well into double digits. There is more than one suggestion that the reason Adrian Orr of the Reserve Bank didn't cut last week is because the house market appears to be off and running again.

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Money is cheap, it might get a little bit cheaper. But even if it doesn't, it certainly isn't going to get more expensive any time soon.

So what we have is a series of lessons, and the trick to lessons is, hopefully, we learn them.

Lesson number one, there was no bubble. There has never been a bubble. New Zealand's housing market is basically bulletproof.

Lesson number two, it would appear despite all the hype, rhetoric, and noise we are unable to build any more houses than we currently are. And although it is a lot of them, it is in certain parts clearly not enough. And as long as that continues, demand will outstrip supply and as a result prices will continue to rise.

Reserve Bank Governor Adrian Orr left its official cash rate (OCR) unchanged at 1 per cent last week. File photo / Mark Mitchell
Reserve Bank Governor Adrian Orr left its official cash rate (OCR) unchanged at 1 per cent last week. File photo / Mark Mitchell

Lesson number three, as a result of lesson number two. some people in some parts of the country will not be able to afford a house.

Lesson number four, this has actually always been the case. It's just that the politicians, many of whom have no idea about the housing market, seem to think owning property is a right, not an earned privilege, hence they say stuff and make promises that can never been met.

Lesson number five, if you can't afford a place in an area like Queenstown, Southland, as I was reading just the other day, is comparatively cheap and is offering excellent returns.

Lesson number six, the property you own doesn't have to be in the same place you live.

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Lesson number seven, no matter what people say about housing, investing and tax, the reality is this country has an ingrained love of, if not obsession with, property. That's why.

Lesson number eight, you should ignore all the overseas bollocks about bubbles, price to debt, or income to debt ratios. Yes, we don't earn a lot, and yes comparatively houses cost a lot, but we bleed for a mortgage. Housing is what we like, love, and what we want.

Ultimately, we will bleed for a mortgage because that is who we are. File photo / Chris Loufte
Ultimately, we will bleed for a mortgage because that is who we are. File photo / Chris Loufte

Lesson number nine, don't forget any of this stuff, because almost inexplicably every 10 years or so, if not every election cycle, we tend to go nuts, the politicians get involved, and the whole debate becomes a cluster. We have been going through it yet again since the last election.

The Government has solved nothing, and changed hardly anything. The market has done what the market always does, adapt to whatever is going on around it. But it always, always comes out the other side, comparatively untouched, untarnished, and off on a path of more growth.