PHOTO: REAL ESTATE SIGNS IN AUCKLAND’S CENTRAL SUBURBS ON MARCH 3, 2015 (PHOTO BY FIONA GOODALL/GETTY IMAGES)
We needed a reasonable period of time to allow the recent surging wave of highly geared first home buyers to get financially comfortable. We didn’t get it, writes David Hargreaves of interest.co.nz.
You know, I was really beginning to think (as well as hope) that we might just get away with it.
By ‘it’ I mean the worrying rising tide of young New Zealanders borrowing smelling-salt-requiring sums of money to get themselves into first homes.
What was needed was time. We needed the economy to stay buoyant, employment levels to stay strong and the housing market to hold up. Then over the course of the next two or three years, the first home buyers (FHBs) could bed themselves in and see some equity built up in their homes.
It was looking good that we might get there. And then you-know-what came along.
What happens in the coming months in the housing market will not just, at all, be a story about first home buyers. That’s for sure. But as the buyers with generally the least equity in their homes, FHBs are at the frontline. So, I make no apologies for focusing on them here.
I’ve previously written of my very mixed feelings as I’ve, on a monthly basis, followed the surge of borrowing by the FHBs.
As we now know with the benefit of hindsight the first iteration of the Reserve Bank’s loan to value ratio (LVR) ‘speed limits’ imposed in 2013 disproportionately impacted first home buyers.
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