{"id":31592,"date":"2021-04-06T09:17:08","date_gmt":"2021-04-05T21:17:08","guid":{"rendered":"https:\/\/propertynoise.co.nz\/au\/?p=31592"},"modified":"2024-03-01T20:46:16","modified_gmt":"2024-03-01T07:46:16","slug":"bubble-or-boom-why-ultra-low-interest-rates-mean-house-prices-may-never-bust-new-zealand","status":"publish","type":"post","link":"https:\/\/propertynoise.co.nz\/au\/bubble-or-boom-why-ultra-low-interest-rates-mean-house-prices-may-never-bust-new-zealand\/","title":{"rendered":"Bubble or boom? Why ultra-low interest rates mean house prices may never bust | NEW ZEALAND"},"content":{"rendered":"<p><strong>PHOTO: <span class=\"css-d73nb7\">Median house prices in New Zealand\u2019s capital city, Wellington, rose 27.7% in the 12 months to February.\u00a0<\/span>Photograph: Bloomberg<\/strong><\/p>\n<p>In this era of cheap money, what once might have looked like a housing bubble might just be the new normal<\/p>\n<p class=\"css-15t42va\">It\u2019s hard to disagree with the\u00a0<a href=\"https:\/\/propertynoise.co.nz\/au\/?s=New+Zealand&amp;submit=Search\">New Zealand<\/a>\u00a0government\u2019s recent assessment that the country\u2019s runaway housing market has moved from mere boom to a bubble that endangers the whole economy. Prices rose a staggering 23% over the past year, putting home ownership way beyond most people not already on the fabled ladder \u2013 younger, first-time buyers especially. If it walks like a bubble and talks like a bubble, then it must be a bubble, right?<\/p>\n<p class=\"css-15t42va\">The only problem is that bubbles might not be what they used to be. House prices are being steadily inflated in many other developed economies such as the US and UK. In Australia, prices rose 2.8% in March, the fastest monthly growth for 33 years. But governments are in no hurry to copy <a href=\"https:\/\/propertynoise.co.nz\/au\/?s=Jacinda+Ardern&amp;submit=Search\">Jacinda Ardern<\/a>\u2019s canary in the coalmine moment, as the renowned Soci\u00e9t\u00e9 G\u00e9n\u00e9rale economist and market sceptic Albert Edwards\u00a0has dubbed it, and instruct central banks to make\u00a0dampening prices part of monetary policy.<\/p>\n<p class=\"css-15t42va\">Quite the opposite, in fact, with the pandemic crisis seeing interest rates slashed last year to yet more all-time lows. The all-powerful US Federal Reserve sets the tone for other central banks and is telling financial markets that ultra-low interest rates\u00a0could be with us for years. Along with first-time buyer incentives and building grants, low borrowing costs look like ensuring that property prices will keep rising despite the coronavirus recession.<\/p>\n<figure id=\"588fb5b6-e0d6-40ad-8db5-f777c279a070\" class=\"css-1mfia18\">\n<div class=\"css-16cuuq6\" data-print-layout=\"hide\" data-link-name=\"rich-link-0 | 0\" data-component=\"rich-link\" data-name=\"\">\n<div class=\"css-s7oxzu\">\n<div class=\"css-ghyc83\"><\/div>\n<div><img decoding=\"async\" class=\"css-ducv57 lazyload\" data-src=\"https:\/\/i.guim.co.uk\/img\/media\/a4786d8813e235502dabc8b254619cecd3037b23\/0_0_4000_2399\/master\/4000.jpg?width=460&amp;quality=85&amp;auto=format&amp;fit=max&amp;s=3d0e7cc2db6c6039c1f21771c5e24003\" alt=\"\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" \/><\/div>\n<div class=\"css-upffb1\">\n<div class=\"css-m4qltb\">\n<div class=\"css-1gqsble\"><em><strong>New Zealand moves to rein in runaway housing market with billion dollar plan<\/strong><\/em><\/div>\n<\/div>\n<div class=\"css-9g571g\">\n<div class=\"css-dobi02\"><em><strong>Read more<\/strong><\/em><\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/figure>\n<p class=\"css-15t42va\">So while a bubble might be defined as a market where rising prices are not justified by the fundamentals, the era of cheap money ushered in by the global financial crisis<strong>\u00a0<\/strong>and sustained by Covid, has fundamentally changed those fundamentals. There is an expectation that authorities will do anything necessary to keep the party going.<\/p>\n<p class=\"css-15t42va\">Damien Klassen, head of investments at Nucleus Wealth in Melbourne, believes that the distortion of the property market has further to go because there is more scope for interest rate cuts in western economies.<\/p>\n<p>READ MORE VIA <a href=\"https:\/\/www.theguardian.com\/money\/2021\/apr\/05\/bubble-or-boom-why-ultra-low-interest-rates-mean-house-prices-may-never-bust\">THE GUARDIAN<\/a><\/p>\n<h3 class=\"widget-title\"><span class=\"accent-typo\">PROPERTY NEWS AGGREGATION<\/span><\/h3>\n<div class=\"textwidget\">\n<div class=\"vk_ans\"><span data-dobid=\"hdw\">aggregation<\/span><\/div>\n<div class=\"vmod\">\n<div class=\"lr_dct_ent_ph\"><span class=\"lr_dct_ph\">a\u0261r\u026a\u02c8\u0261e\u026a\u0283(\u0259)n\/<\/span><span class=\"lr_dct_spkr lr_dct_spkr_off\" title=\"Listen\" data-ved=\"0ahUKEwj9uc3Tkr3XAhULtJQKHV5zA7cQlfQBCC0wAA\"><input height=\"14\" src=\"data:image\/png;base64,iVBORw0KGgoAAAANSUhEUgAAAA4AAAAOCAQAAAC1QeVaAAAAi0lEQVQokWNgQAYyQFzGsIJBnwED8DNcBpK+DM8YfjMUokqxMRxg+A9m8TJsBLLSEFKMDCuBAv\/hCncxfGWQhUn2gaVAktkMXkBSHmh0OwNU8D9csoHhO4MikN7BcAGb5H+GYiDdCTQYq2QubkkkY\/E6CLtXdiJ7BTMQMnAHXxFm6IICvhwY8AYQLgCw2U9d90B8BAAAAABJRU5ErkJggg==\" type=\"image\" width=\"14\" \/><\/span><\/div>\n<\/div>\n<p><a href=\"http:\/\/propertynoise.co.nz\/au\/\"><strong>Property News \u2013 Real Estate News. propertynoise.com.au<\/strong><\/a>\u2122 is about sharing all things real estate and property in<strong>\u00a0Australia<\/strong>\u00a0(and a bit of New Zealand and International too). Instead of viewing a multitude of news sites to find out the very latest property news \u2013 simply come here.\u00a0<strong>Each day, many times a day, every day<\/strong>\u00a0we update the site to ensure we have your property and real estate news in one handy place. All the real estate news and property news comes from a variety of property news sites whom do a superb job. We simply refer\/ link you to their sites and we make no claim to their material.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>PHOTO: Median house prices in New Zealand\u2019s capital city, Wellington,<span class=\"more-link\"><a href=\"https:\/\/propertynoise.co.nz\/au\/bubble-or-boom-why-ultra-low-interest-rates-mean-house-prices-may-never-bust-new-zealand\/\">Read More &rarr;<\/a><\/span><\/p>\n","protected":false},"author":1,"featured_media":31593,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"footnotes":""},"categories":[461747081],"tags":[478098519,478098535,478106669,478098861,478115129,478115316,478106988,478113996,478107712,478098873,478098579,478098510,478098514,478098511,478098705,478098533,478098509],"class_list":["entry","author-data123nz","post-31592","post","type-post","status-publish","format-standard","has-post-thumbnail","category-australian-property-real-estate-news","tag-home-ownership","tag-house-prices","tag-jacinda-ardern","tag-new-zealand","tag-new-zealand-government","tag-nz-housing-bubble","tag-nz-property","tag-nz-property-boom","tag-nz-real-estate","tag-property-investment","tag-property-market","tag-property-news","tag-propertynoise","tag-real-estate","tag-real-estate-agency","tag-real-estate-agent","tag-real-estate-news"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Bubble or boom? Why ultra-low interest rates mean house prices may never bust | NEW ZEALAND - Property News Australia<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/propertynoise.co.nz\/au\/bubble-or-boom-why-ultra-low-interest-rates-mean-house-prices-may-never-bust-new-zealand\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Bubble or boom? 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