Property predictions prompt anger

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An article in this week’s Herald on Sunday, outlining Olly Newland’s claim that house prices will double in ten years, has prompted quite a lot of angry reaction.

Tuesday, July 31st 2012, 12:00AM 2 Comments

by The Landlord

The claim is supported by Auckland Property Investors Association president David Whitburn.

Readers were quick to jump on the article, saying the media is responsible for pushing up prices, that irresponsible reporting creates panic and that those making the claims are only trying to line their own pockets.

One respondent even said that Kiwi women, angry that all the country’s men have gone overseas to work because of high property prices, will shoot all of the country’s real estate agents.

I can’t see why articles like this prompt so much vitriol.

As Newland himself said, he’s made similar predictions several times over the past 50 years. Many times he's been proved correct, sometimes he hasn't.

Prices douibled last decade and to double again in ten years,  only have to rise by about 7 per cent a year. That seems more than achievable in Auckland at present, if not the rest of the country.

Many critics of the claims say it is impossible for Kiwis to service the kind of mortgages required on doubled house prices. But Newland says prices aren’t tied to income. Things such as immigration push them up, as well as the well-publicised housing shortage.

But while price rises are good news for investors, Newland is right that they aren’t good for the young people who are our next generation of taxpayers.

His suggestions of GST breaks or grants for first-time buyers, as in Australia, have merit.

It’s time we talked about house prices in a sensible way. Instead of pointing the finger at “greedy” baby boomers wanting top dollar for their investment properties, let’s discuss ways to get young people on to the property ladder.

Instead of desperately trying to keep prices low, let's focus on increasing our earnings. That way we can keep pace with these "foreigners" some seem so sure are responsible for our rising prices.

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