PHOTO:THE-NELSON-MAIL Janine Starks: The best thing a first-time buyer can do is learn to read the local market and not compare it to the national averages.
OPINION: Unemployment and house prices. The evil pair of economic indicators with the power, the drive, the emotions of a nation.
They’re physically and psychologically contagious. They control our willingness to spend and our ability to make decisions.
Right now, buying and selling houses brings uncertainty for many people.
Do you risk it? Will we see a big downward swing in prices due to unemployment? Are the smart people going to wait in the wings for other people’s desperation and snap up a bargain?
Let’s put some perspective on it.
For the majority, any price movement is entirely irrelevant. In New Zealand, roughly 6000 to 7000 houses are sold each month. It equates to 75,000 houses a year. We have 1.85 million residential properties, so 4 per cent of the housing stock sells annually.
In normal economic conditions, 96 per cent of us sit around doing nothing with our homes. That’s why the housing market and the share market are the tortoise and the hare. Price movement is incredibly slow and sticky, because so few of us have any need to transact.
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