Mr Good News here again

I continue my quest to put some reality checks on the property market and what is happening. This week seems to have been dominated by news which I would mainly catergorise as positive.

Yesterday we had some migration numbers. Now you may wonder what is the relevance. Simple – immigration flows and house prices are strongly correlated. When they are strong, house prices are up as these people need somewhere to live.

While the numbers weren’t mind-blowingly positive (a small inflow in December of 300 and 3,800 for the year) at least they were positive. One comment I read somewhere was that there was an expectation fewer people would leave New Zealand because of the credit crunch and the difficulty finding work in countries like the UK.

One could also argue the government’s changes to the RMA are good for the market. No doubt they are not negative. However, I have a view that the RMA isn’t a big deal for mum and dad property investors. Sure it is for the big guys and the developers, but for the average property owner? I don’t think so.

If I am wrong and you have stories about how the RMA has hurt your investments, I’d love to hear them.

The other positive news is the continuing fall in home loan rates. While some don’t think that is a driver of the market, investors I know see it as being a big plus.

While this week’s news has some goodness about it, I suspect the same won’t be said next week when the QV stats are released. My prediction is that you will see house prices continue to soften and the 12-month drop will be around the 10% mark for many places. But if the Barfoot numbers this week are an indicator, then we may see a slight firming in prices starting to appear.