Barfoot & Thompson said there was greater pressure for prices to fall in May than there had been for several years.
The pressure on prices is coming from big increases in the number of homes available for sale while actual sales numbers decline.
The real estate agency, which is by far the largest in the Auckland region, reported 886 residential property sales in May, up on the 664 reported in April but down 420, or 32%, on the 1306 in May last year.
It was the lowest number of sales in the month of May since 2010.
At the same time the total number of homes the agency has available for sale has been rising, with 4298 homes available for sale on Barfoot's books at the end of May compared to 4214 in April, and up a staggering 43% compared to the 3013 that it had on its books in May last year.
Last month Barfoot & Thompson had the most homes available for sale in the month of May since 2012.
"With a sound number of new listings, total listings at their highest for the past five years and low sales, there was greater pressure on prices to fall than has been experienced for some years," Barfoot & Thompson Managing Director Peter Thompson said.
However in spite of the pressure, prices remained relatively flat.
The average price of residential properties sold by the agency in May was $942,717, up from $917,079 in April, but below the record high of $968,570 achieved in March.
The median price was $846,000 in May, the second month in a row it has declined from the record high of $900,000 achieved in March.
Thompson said high end properties remained in high demand, with 38.5% of the properties the agency sold in May selling for more than $1 million, while just 4.5% sold for less than $500,000.
"For the first five months of this year sales numbers are down about a quarter on what they were for the the same period last year," Thompson said.
"The vendors who are achieving a sale are those who accept that prices are flat and are likely to remain that way until the September election is behind us," he said.
Barfoot Auckland
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Good morning ladies and gentlemen, this is the captain speaking, you may have noticed that we lost power to all engines about 3 minutes ago. You see we buy our fuel from offshore suppliers and we seem to have used all of today's ration on our ascent. But rest assured that while our speed is now 140 knots, we are still at 36,000ft and don't seem to be dropping! While most aircraft stall at or around this speed, we assure you flight AKL is different. We have an observable history of altitude gain, right back from 45 minutes ago when we took off. So sit back, relax, and enjoy the award winning service from the B&T crew.
This year has been a continuous stream of excuses as to why things are going well for Auckland property prices. People aren't waiting around to make a low offer they are instead just leaving the region. These are the potential buyers and they're walking out the door to live and buy elsewhere. Unfortunately they're taking their spending with them which is hardly going to help businesses.
There's still about $800m per month in mortgages being created for owner occupiers each month, and about $100m per month for residential property investors. The money supply isn't shrinking but your mileage may vary if you live/invest in Auckland. There's a general downturn in property projects in Auckland so there's going to be less contract work.
You're welcome.
Prices down = big renovations and new developments postponed or cancelled. Speculators take a loss and sell to owner occupiers. Cash is king again. This is an early Christmas for this '1071' NIMBY. Lets hope the tide going out doesn't reveal some sights at the Inner city beaches that can't be unseen.
You know who's going to cause the crash? B&T themselves.. think about it - if no one buys and no one sells, then we're at a stalemate. No one wins, but no one loses either.
Except B&T's sales agents are reliant on commissions. And if houses aren't selling, then they're not getting paid. Would it still be in their best interests to pump up the best prices (remember, Chinese money is gone) or try to meet the market to conclude a sale?
The next thing to look out for is how much houses are selling over/under their CV/RV as higher volume of sales for B&T might be good for them (transactions = commissions), but might not be as good for house prices.
"... think about it - if no one buys and no one sells, then we're at a stalemate." But that NEVER happens. Someone(s) is always forced to sell up, and when they do, no matter whether the rest of the property stock is sold or not, the banks will 'mark-to-market' when they look to extend/ advance new loans. One house sells in one street in one suburb, and the whole lot will be re-rated. It is exactly the same on the way up...but those forced to sell don't suffer the same fate.
There is a good chance the Auckland RE market Is highly inelastic so small changes in supply/demand cause large changes in price. So even if the foreign investment was single digit from a % standpoint in the market the absence of it can cause large drops in price. The same phenomena was evident in the oil collapse of 2014 it was only an increase of supply of ~3% that caused a ~50-70% price drop. David et al. Have you done any work on the relative elasticity of the Auckland/NZ RE Market?
There's another detail hidden under the surface. Foreign buyers are roughly 3% at a guess. However, say you move from Tianjin, China, because you are sick of pollution or eating the giant black fish head as the local delicacy, you decide on New Zealand.
You have money but not enough to buy a house. You come up with a cunning plan to study at university for a year and then apply to become a resident, then you use your money as a deposit for a house and borrow from a local bank. This plan works well provided you can get enough money out of China. What percentage of Auckland sales were really local foreign buyers either moving here or sending their nephew/niece to become a resident?
There is another factor beyond the 'foreign buyer' - or non buyer as the case may be. One of the features of the bubble analogy, it that it is to an extent self supporting, but only takes a prick for it all to change.
The so called investor in Auckland has been able to justify getting into the business where there is no cash flow or sometimes negative cashflow - because the payoff was going to be capital gain.
When there is realisation there is no capital gain - suddenly - there is no reason to buy.
These 'investors' are going to stop buying - probably abruptly.
When you factor in a percentage of the market that's prepared to bid over all comers at auctions, that certainly would give local investors the confidence to buy, buy, buy and enjoy the fact property will always go up. But likewise, if that highly visible segment of the market disappears then it may look disconcertingly like the music is stopping and locals can't afford the prices without the prospect of magical capital gains. Who's going to buy a $700k Ranui palace for reasons other than short term capital gains, after all?
The average price for detached houses sold in Greater Vancouver reached a record of $1,830,956 in May, up 5 per cent from the same month in 2016 and just surpassing the previous high of $1,826,541 in January, 2016.
Condos and townhouses experienced a short lull before continuing on a tear, smashing former highs. The average price for condos sold in Greater Vancouver last month hit a record of $656,919, up 15.1 per cent from a year earlier, and the average price for townhouses jumped 7.4 per cent to a new high of $858,994.
https://www.theglobeandmail.com/real-estate/vancouver/vancouver-home-sa…
http://www.macleans.ca/economy/economicanalysis/chinese-real-estate-inv…
Read & Learn anyone who states the Chinese are only responsible for a mere 3% increase in Vancouver is extremely gullible to say the least. The foreign money poured in building more high rise condos than you would believe possible to build ! I Also same applies in Toronto & the Chinese moved into Alberta & also bought 1200 Hectares of land in Nova Scotia to build 2 big vacation resorts as well as numerous homes for their kids educational purposes.
As for Auckland it was the foreign money pouring in from China that started the bandwagon rolling on Aucklands North Shore and indeed I and many of my neighbours sold to Chinese. An entire van load arriving at my neighbours on site auction ! Of course they were the catalyst for the ponzi and then all the Zach & DubleDs borrowed up and added to it. The housing market was left unprotected by government until the horse had bolted and now the great deleveraging from immense levels of personal debt. It will be painful for many
There are 72,000 additional new people arriving in NZ every MONTH from overseas (ie. foreigners), about 50,000 of them looking to settle in Auckland which means buying or renting a place to live as soon as they step off the plane. There are 10,000 houses for sale in Auckland. So 50,000 into 10,000 goes ...? You do the math. It most definitely is a "distortive" amount of money in the property market. It seems that if a non-NZ gets a visa and a NZ bank loan, suddenly they are not "foreign" any more.
Yeah that's a weird one. My experience of RE agents in the UK is that they turn on prices quicker than anyone, because a nominal decrease in price makes very little difference to their over all pay packet. Much better for their profits to talk the seller into accepting lower offers and keep their inventory churning over than let the market stagnate. Zero commission for them in a stagnant market.
It's probably a case of seller holding on to all the hyperbole about it being..... what have the excuses been so far?... Christmas... then it was Chinese New Years... then it was Easter... then it was winter.... now it's the election. Whilst sellers cling to the cognitive dissonance and lap up the belief that they just need to hold on for the conditions to improve, they may be very resistant to lower their prices. So it's a stale mate.
Some sellers will only be able to hold out for so long though and they will get a nasty surprise when they realise that all holding out has done is weaken their position, as come spring there will be even more inventory.
Exact same thing has happened in my suburb in Welly. Seller put on the market in March. It sat there for 3 months and now it's a mortgagee sale. If they had lowered that price after the first month, they may have sold, now the choice it out of their hands.
They'll be waking a tight rope - they have to tell the sellers they will get them a great price to get the listing, then convince them to be pragmatic in the face of tough market conditions and then convince the buyer that it's an exciting and dynamic market to encourage them to bid high/act fast. When you put it like that I almost feel sorry for them.
There's an element of schadenfreude but this is also a statement of fact. There was a court case recently where a RE agent claimed he was poor because of huge payments on his house (worth a few million). I've seen it many times before when people increase their debt payments to suit their current income.
No one seems to put money away for the rainy day anymore, or consider that their income may drop again.
This dude may have to give back his Aston
http://www.stuff.co.nz/national/crime/89800380/Million-dollar-real-esta… ... which in his argument means he cannot sell houses
LOL - reminds me a bit of this show;
Now the "RE experts" are telling the vendors to lower their prices...
http://www.stuff.co.nz/stuff-nation/93282453/the-herd-mentality-in-the-…
That article was very unusual. So unusual that I wondered at what the motivation might be for the author to write such a piece. Of course there would be self interest behind it. Always is.
The thing is: I think herd mentality is already at work manifest in the increased listings. Maybe he is saying that its still early days and the complete flood of listings has yet to hit. Scary.
i think all Nationals governments speculators should sue Mr Key, as he proclaimed so not long ago that AUCKLAND PROPERTY PRICES will never fall.. That only encouraged his speculative fans to go on a buying frenzy, hence pushing prices out of reach for the average kiwi..
Let's just take the counter-factual for a moment. Would you want your house price going down?," Key said.
"And what most Aucklanders say to me is 'I'd rather my house price went up, but I'd rather it went up a little more slowly than this'."
https://www.interest.co.nz/property/76953/pm-john-key-says-non-auckland…
Interesting article from 2012 reflecting on what happened to housing in the US. Aussie and NZ were relatively insulated from the carnage in housing overseas. Check the third graph down "Life-cycle of a Housing Market". http://www.zerohedge.com/news/guest-post-peak-housing-peak-fraud-peak-s…
Suspect we are now in phase 5 - crisis, which is immediately followed by decline.
The whole DGZ lolly scramble Zone thing is nuts. Both schools are already overloaded, with heaps more about to be stuffed in somehow from in zone apartment construction. Teachers cannot afford to live locally and are getting picked off easily by the private schools if they agree to assist in sports programs.
Why would someone pay a huge excess excess over and above what it would cost to send your kids to a better experience and education at a private high school? With any consideration of cost of capital that's hundreds of thousands of premium, NOT MILLIONS. There is a massive delta on what the Chinese and speculator money has been paying to be in the lolly scramble zone. How much of a delta will be highlighted by Winston slamming the door, I'm guessing $1-1.5m of delta, that's 10 kids worth...
If your house is not zoned for increased intensification under the new plan, i.e. its zoned for a single house, your ponzi value is... vapor.
Handling of the property crisis by Nation is just shameful.
The problem here is that you are trying to put forward fundamental reasons for house pricing. Those have been ignored in the DGZ mania.
Also the single house zoning is a larger problem as people have been building these densely packed 6-8 bedroom McMansions. A lot are being rented out so you end up with 6-8+ people living in them effectively making them a slum. If people think investing in slums is a capital growth market well good luck to them.
What's concerning is when you have the same number of people and more living in tiny Zest apartments in central Auckland. Because this is going on right now. We're having this grand party off the back of immigrants who aren't getting a great overall deal.
I know a number of them and just last Saturday we were discussing some of their employment situations. One of them is being paid $10 an hour to work in a restaurant in Wynyard Quarter - yes, below minimum wage - but won't say anything because it might make his life a lot harder if he loses that job. Of course, there's no contract...and there was at least one person in the restaurant being paid under the table without a work visa. This is a reputable looking establishment run by an experienced restaurateur.
On such is our prosperity and lifestyle apparently built.
Or you have queues of people in Wellington hoping to rent a flat without turning it into a slum. I assume Bill English had just come down from a P smoking bender when he said that overcrowding and excessively high rents in Wellington are a problem of success.
I know a number of people working under the table and some that have been ripped off by their employer. It's pretty sad but it says a lot about how plenty of businesses are run in NZ. Tax dodges and employment violations. It's greed.
I rent in Welly and it's almost commonplace now to be paying upwards of $190 a week for one room. Hell, I saw a 50m2 2 bedroom apartment going for $600 a week. If you're a graduate and on $17 to $20 an hour, that's a third of your take home pay on rent. Then add power, internet, gas, petrol/bus money, parking fees, KiwiSaver and food and you're paying over $350 a week just to survive, let alone actually live.
RickStrauss, I doubt that story very much, NZ has very strong and employee-favorable employment laws, the simple fact of not having a contract can and will put the employer in a huge mess, owing the employee much money. If that is true, the employee can get free legal advice and take the employer down.
A big aspect of DGZ is education. It not only has good public schools but quite a few private schools as well. It's not the only thing but everything ties in together. Good schools, quality, established surroundings, lots of trees and parks, sensible, reliable, intelligent, hard working, high income, and tidy folk and so on.
This guy has been predicting this for many months now:
http://www.interest.co.nz/property/86739/only-newland-says-only-invest-…
Factories don't do the job of mechanics, and vice versa. The former is geared for consistent production of new stuff with no variation and is very suitable for robots. Mechanics take disparate, nuanced information from parts of complex systems in order to troubleshoot and repair them, within a budget. Not so suitable for a bot that currently can't convincingly pass a Turing test.
I reckon our composition of manufacturing, retail and residence in land use will not be changing drastically in the near future although the format of each may vary.
Well here is another reporting of the same piece of news, does it sound different?? or some of us just want doom and gloom all the time ...!! the info is the same but the presentation is balanced ...not biased !!
AUCKLAND AVERAGE HOUSE PRICE RISES 2.8% IN MAY FROM APRIL AS SALES, LISTINGS RISE
Tuesday 6th June 2017
Auckland's average house price rose in May from April, while sales and new listings jumped although they are still below the levels of May 2016, says realtor Barfoot & Thompson.
There were 886 sales in May, up from 664 sales in April, which was the lowest for that month since 2008, Barfoot said. Sales were down 32 percent compared with May last year. The average price rose to $942,717, up 2.8 percent from April and up 7.8 percent from May 2016.
Last month the Reserve Bank said it would seek feedback on adding debt-to-income limits to its suite of macroprudential tools while saying it didn't actually plan to use them anytime soon because there are signs existing measures are already helping to slow house price inflation, which was running at an annual 8 percent in May, down from 14 percent in October. The central bank attributed the slowdown to existing restraints including loan-to-valuation ratios which have been in place since 2013 and were tightened last year.
New listings rose 34 percent to 1,734 in May from but were down from 1,905 in May 2016, Barfoot said. Total listings were 2 percent higher at 4,298, a gain of about 43 percent from the same month last year.
"With a sound number of new listings, total listings at their highest for the past five years and low sales, there was greater pressure on prices to fall than has been experienced for some years," said Barfoot managing director Peter Thompson.
The surge in Auckland house prices has ensured an increasing number of sales for $1 million-plus. In May, 341 properties, or 38.5 percent of the total, sold for more than $1 million, while 58, or 6.5 percent, sold for more than $2 million.
Those sold below $500,000 made up 4.5 percent of the total, or 40 properties.
(BusinessDesk)
It's a misrepresentation of statistics. Up to you to choose to source information from one location with an optimistic view of the housing bubble collapse.
You may not want doom and gloom but that's what's going to be coming through in increasing volume. I recommend not looking at any news sites, facebook is far worse for having depressing effects, so maybe avoid both.
A drop in sales is the leading sign before significant price drops. These articles are about making excuses and maintaining confidence. No point panicking the herd.
What I find unusual is the obvious desperation that had appeared in a small number of the listings, and we're not even halfway through this year. I fear we don't realise the full extent of how much toxic or fraudulent debt is out there.
It comes back to the difference between 'average' and 'median' price. Go to the main article again, and it does state that the average price increased from April, but also that the median price fell for the second month in a row from March. Average prices are unreliable as they are skewed by even a small number of sales at the top end of the market.
'.. the presentation is balanced... not biased' you say? On the contrary your link is unbalanced because it does not present the median price decline.
In short yes they do like losing money. The tax write off is great, but they miss the point of investing is to make money, not lose it. There are more complex tax structures some will be taking advantage of but I doubt that the majority of them are, as there seems to be a lack of sophistication in the investing.
You also need to consider that the discussions that go on on this site are from the small number of people who are watching the markets and the underlying activities. The person on the street is oblivious to most of what's being discussed here, or are otherwise unaware of the risk they are exposed to.
The banks have all been predicting continuing house price inflation. Most property investors are in it for the long term. Housing wouldn't be the solid investment it is if investors sold up every time it looked like prices were falling (something that happens all the time). It is quite expensive to sell and has an impact on the tenants you may need to let go. We know if we all wanted to sell on a downturn it would crash the housing market - it's almost like we have a hive mind.
I'm really having a lot of trouble understanding why you and JohnKerKeri are having difficulty understanding this. It's ironic to me that you think it is stupidity. I suspect, this may be ascribing too much intelligence to your comments, that you want us to all go, "hey yeah this is stupidity!" and all try and sell at once so that the market does indeed crash.
Certainly suggests their long term play will then HAVE to be to import large numbers of buyers from overseas. Because it's all very well hoovering up property to get capital gains...but it still ultimately requires buyers who can afford to buy it off them once it's time to cash up.
Should also suggest that if it's open generational warfare, then young Kiwis will need to be thinking about how to balance wealth back away from the only net-drain-on-society Boomer generation, e.g. rebalancing some of the tax burden off income and onto land again.
You are all overlooking the biggest problem of all.
If property prices stagnate, or even fall, developers and builders will hesitate and stop building on spec.
Instead they will only build to firm order from cashed up home buyers/investors and the "affordable" homes will quietly disappear. In the past 12 months "hundreds" of building companies have gone broke, and there may be more coming.
http://www.stuff.co.nz/business/83522292/canterburys-bloody-problem-hun…
@ BigDaday -- most have no idea what property cycles and investment is about ... everyone have shut their ears and just crying for the sky to fall - well maybe it will or it wont - I am sure that most of these people have no skin in the game ...
The other thing that these people don't realise that long term landlords do not count their chickens every day or month -- they don't panic if their properties fall by 2%, 5%, even 10% (hardly anyone does valuation every year!! )... they are not in the market to sell - they are there to pick up a new opportunity - Most have seen their properties appreciate by more than 70% in the last 3 years ...so a small correction is neither here nor there for them ..
Landlords are not stupid to throw money away, they are in the business of making money in the long term while providing a vital service -
The tighter financial restraints are imposed on borrowing and building houses the more aggravated this issue will become ... and that ( with the current demand) will push prices upwards.... a strong break on housing price escalation will only happen if they fully shut down immigration for few years - that will rebalance the market -- But, Yet to see who has the balls to take such action !!
Overlooking? I'm pretty sure most people are aware of that. There was an article posted last week about the low number of consents and that's pretty much because banks have tightened up lending. Less money available, less consents builders / developers can apply for. Hardly a surprise.
NZ has been super hesitant to adopt the concept of (cheap / sustainable) pre-fab housing. Like a monopoly selling us suckers way too expensive houses taking loads of time. Governments is protecting this slowdown. If it comes to housing crisis in combination with embracing pre-fab houses loads of builders -with their pimped Hilux's and boats- will have to trim down on their lavish lifestyle... We don't need more more resources, we need more smartness...
Prefab ? Please not. Yes you can build quality prefabs but the actual thing we get with prefab is crap housing, with limited life, and large lifetime costs. It's just continuing the Kiwi way.
Lets look at the German examples. The 400 year old big farmhouses substantially built and still providing quality value with internal updating. Or the factory manufactured prefabs ( see Grand designs ) which in their system are of great quality and provide manificent living.
Housing in particular proves the adage. "Cheap ain't cheap"
A friend of mine in Germany lives in an apartment building where the main structure is 1000 years old. Her bathroom window dates from the Renaissance.
In NZ, seismically active as we are, easily-replaceable prefab makes a lot of practical sense. Although, the new builds going up are hardly anything to be proud of in terms of quality or lifespan. Crappy prefab quality at a premium price, pretending to be better than they are, which is worst of all worlds.
If it was possible to get it past the bloody covenants and industry cartels, I'd be all over a German or Scandinavian prefab.
I've been in a couple of highly modular Japanese apartments. The bathroom and laundry is installed as one unit and gets replaced as one for future renovations. Easy, cheap, doesn't leak into the building structure and obvious gains in efficiency for building and maintenance.
What I dont get if house prices go up and up, lets say they do. Who can afford them. If DTIs are so high now, people have little to no disposable income, wage inflation is really low, we get unskilled immigration. Who can afford a home other then wealthy millionaires. How many of these are around, if we close up shop to foriegn investors.
If Average house in Auckland is $900K @ %10 deposit you need $90K. Will banks lend on 10%. How can people save $90K when they have no disposable income. It just doesnt make sense, if no one can afford to buy a house.
Very good point - the deposit is not the issue ... say a couple could save that overtime .. to afford serviceability they should be on around $150,000 gross pa to be able to borrow 980K for a house and pay about $5700 per month to service the debt over 30 years out of an after tax monthly income of about $9500 .... look at most bank online calculators for the latest maths ... However, a couple on $110K pa combined gross income with two kids can borrow up to $678K and pay about $4000 out of a net income of $7300 after tax - that falls in the affordable housing range ... but these need to save the 70K deposit soon enough to do that ...
My point is , You dont have to be a millionaire to afford these houses ... you need to have a good combined income and save a 10 % deposit to buy your first home.
Tough, but feasible ...
It is a big challenge for Single income people unless they are on such high incomes.
p.s. I was using ASB online calculator for the above @ an interest rate of 5.8%pa
I was on a little more then $110K and I can tell you it was a sh&t life, and we were paying rent of $2600 per month. So $4000 to $5000, no chance. Then to save money for a deposit absolutely less chance.
Living in Auckland. We couldnt do anything. We had one kid, now two and I couldnt even afford to see my friends for a quiet beer on a Friday. Coffee and cake a treat on Saturdays down at Kohimarama and St Heliers was even a struggle.
If this is suppose to be a great life and it can get worse because property prices increase and rentals increase then NZ and particularly Auckland is not the country and city for me, even though I love Auckland.
Im a contractor in UK now and earn more then in NZ and house prices here are more reasonable for me. So have a house here may buy a second in Wales for my welsh other half. I also have a start-up business that sucks me dry so will not be saving for a deposit anytime soon for Auckland.
Hard decisions will need to be made unfortunately. Aussie, UK or back to Waiuku. Auckland has reached la la land proportions, and if what you think could be right, its going to get worse.
Earlier this year (Jan/Feb), an army of contributors here were maintaining that Auckland house prices would fall through the floor by winter 2017........
We're now in June, so have reached winter. Yet, Auckland house prices show no such fall.
The latest I read is that wholesale interest rates are dropping - which will further sustain house prices.
I wish you guys had been accurate in your predictions - because, if so, I'd have been able to buy Auckland property at rock-bottom prices by now....... But, far more importantly, so would first home buyers and older people wanting to own their own homes.
To be honest, I expect we'll all be waiting forever.
Really? Wow, my memory must be hazy because I don't recall anyone saying prices would go to the floor by winter. If anything, I recall it was mostly Ted Stanton commenting on Jan/Feb giving us excuses as to what would make house prices skyrocket again. Where is he now? (Hint: banned)
If the property value decline follows other declines, it will be the death of a thousand little cuts. Look at the decline that happened in Ireland, someone recently posted a link to a property site in Ireland that captured the change in sentiment and then the change in price with rspect to time for the decline of a decade ago. That downturn took at least four years to complete, and averaged on the order of 1% per month. That gradual and consistent decline is quite demoralizing, especially for the naysayers that keep trying to catch the falling knives. Of course, without them, the price would decline much more rapidly, so their contributions are appreciated.
Past performance is no guarantee of future performance... take that for what it is worth.
Found the link...
https://www.daft.ie/report/marc-coleman
I very much recommend reading this, and the "House Price" entries following this one for a few years. There are good data especially in later postings, and the comments on each post are rather interesting. Some of them remind me of various posters here on this site. There are the requisite pollyannas, naysayers, and the clearly clueless... If the result wasn't so damaging for so many, it would have been funny to read with the benefit of hindsight.
If you go to the above link, search for the comment from Brian Walsh. Extra credit for aligning his view with the appropriate poster(s) on this site.
Another poster of interest on this link is "PAUL,property economics student(yr3)", he has a couple wonderfully sophomoric posts with just the right amount of data to fool the foolish.
@tothepoint: Property crashes don't happen over night as I've mentioned this fact on numorus occasions, during the UK 2008 crash it played out over two years (Well at least for those in Surrey).
Lest look at the facts; We all know that property prices are falling in Auckland. We know that they are likely to contine to fall since the top end Chinese investors are gone for the foreseeable future.
And since the auction results are rather bad most sellers are being advised by you RE' s to wait until after the election for Spring when they've reassured Sellers that everything will be hunky door and they can sell their mouldy hobble for a few million.
I'm very worries for the FTB' s who are being caught in this mess.
except west auckland which has dropped its average by $50k in 12 months
https://www.barfoot.co.nz/market-reports/2017/may/residential-sales-rep…
And Rodney, and Franklin and Auckland Central..... all DOWN from Barfoot's same report.
From Real Estate Institute of NZ sales data for April shows lower quartile selling prices declined in seven regions in April compared to March
On the North Shore 24 suburbs dropped in value compared to 14 that posted gains.
The biggest falls occurred in Auckland where the lower quartile price in the Central Auckland suburbs fell from $772,400 in March to $721,500 in April.
On the North Shore it dropped from $821,700 to $767,900, and in South Auckland it fell from $694,500 to $675,300. In West Auckland it dropped from $680,300 to $657,800.
Across the entire Auckland region the lower quartile selling price was $700,800, which means it has now fallen back to below where it was at the start of the summer selling season in October last year when it was $710,400.
"On Auckland’s North Shore the lower quartile price is now the lowest it has been since April last year, and in West Auckland it is the lowest it has been since March last year.
Also Auckland Median price DOWN from $900k in March to $846k in May....that's over $50k, or 2 years of mortgage repayments saved by buying 2 months later...hardly chump change and that's in a couple of months!
That's a downward trend in anyone's eyes, especially going into winter...?
I sold my place a year ago and am looking to buy a new house on the North Shore....quite happy to wait this out.......as long as it takes.
Interesting that soo many people on here fed on anything negative around Property and seem to think that the downturn in prices has not occured before ?? It's a market it always over-shoots at the top and equally at the bottom. It is a market it has ups and downs, we are past the peak and the market will be slow/dropping/stable over the next 2.5 - 3 years LOOK at history. Clearly the happiest people on this site probably are the one's who have missed the boat and not had the 90% increase, those that have and are in it for the longterm are not concerned about a drop it is expected to happen this way. Over the next few years marginal owners will be weeded out and that will allow opportunities for others to get in at more realistic prices. It's a cycle look at history and learn from it. Think about the market like other markets, look at the cycle of dairy products or kiwi fruit agree with it or not but the world is full of cycles ! People will say it's all different this time, Key's fault immigration etc but losers look for excuses others look for opportunities. 40 years ago houses were over priced and the world was going to the dogs. Things were never easy never will be so grow up and see NZ for the right reasons, if anyone thinks NZ is a bad tough place go travel and live in many other countries and learn there is no easy place, or leave and take your doomsdayer view of the world with you. We are in a sweet spot economically the 70's and 80's were shit. The Government of the day have had the toughest 8 years in our recent history, recession, GFC, 2nd largest city destroyed by Earthquake, finance company sector collapes and here we are on the other side a healthy economy with options and choices.It's like the old saying is the glass half full or empty ?? I say half full and the first half was delicious.
Sounds like an Amway pitch. "All you need is positive thinking and freeing yourself from limitations and you'll make massive money. There's never been opportunity like this."
On a factual basis, NZ achieved a very high rate of home ownership by the early 1990s in part because of the efforts and policies of previous governments, including government build activity, cheap Housing Corp loans, land tax etc. It's turning away from this effort to encourage home ownership toward making it all about investment that has seen the home ownership rate plunging for following generations.
I'm not arguing against having a positive outlook and making the most of opportunities, but we do also need to recognise the roll policies, incentives etc. have on realities.
Hi Shoreman,
Worthy post - you're right on the money!
Correct: there are many contributors here who are fixated with a property crash and aim to "talk down the market" as much as they possibly can - especially Auckland. (What they need to learn is that, despite their own self-importance, the market is actually bigger than they are.)
Further, they don't (or can't) understand that short-term fluctuations are part-and-parcel of all healthy markets and are to be expected. It is reasonable/realistic for prices to be pegged back after a lengthy upswing in values. But that doesn't mean that prices will collapse and the market implode.
As well, they lack appreciation of the fact that success in property investment really necessitates a long-term focus - and consideration of the structural (as well as cyclical) changes that occur over time.
All Im doing is looking at indicators, we all understand in the long term, but why buy a place for 1 mill when you can get it for 900K to 800K, and reduce your debt and increase your disposable income, by being patient. If property goes in cycles then lets wait for the bottom and then buy.
At the moment indicators are pointing south, and this without interest rate rises, now lets get Winston in and see how far they can still go.
Most of the people here echo your sentiments, swapacrate. It's pretty obvious why tothepoint and Double GZ are being very negative and condescending to those who are woke to the downward trend of the Auckland Property Market - it's bad for business because they're RE Agents.
They have a vested interest in talking up the market and can now only focus on the long term outlook of property even though it absolutely makes no sense to buy in a falling market when, like you said, you can get the same house for 100k or 200k cheaper. Only a RE Agent would be so ever convinced that NOW is the time to buy as their livelihood dependend on it.
Message to all First Time Buyers; Do Not Buy Now! The Auckland property market is falling that very evident. You will come across a lot of Real Estate Agents on this site who will try to convince new property owners that it's just a short term change in the market that we're experiencing and there is nothing to worry about.
Don't believe them weigh up what is happening for yourself otherwise you could get stuck in the Negative Equity Trap! All the Real Estate Agents care about is their commission money and nothing else, they do not care if you loose your home later down the track.
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