Auction activity eased back at Barfoot & Thompson last week, with the agency's auctioneers handling 93 residential properties compared to 120 the previous week.
The sales rate was also a tad softer with sales achieved on 44 properties, giving an overall sales rate of 48% compared to 56% the previous week.
At the major auctions where at least a dozen properties were offered, the sales rates ranged from 41% at the Shortland Street auction on October 2, where most of the properties were from the more expensive central Auckland suburbs such as St Heliers, Epsom, Glendowie, Ellerslie and Grey Lynn, to 55% at the big Manukau auction. The North Shore auction was in the middle with a 50% sales rate.
Just under 9% of the properties didn't face the auctioneer's hammer, with four being sold prior to their auctions, while three had their auction dates postponed and one was withdrawn (see table below for the full results).
Details of the individual properties auctioned are available on our Residential Auction Results page.
The comment stream on this story is now closed.
| Barfoot & Thompson Residential Auction Results | |||||||||
| 30 September - 6 October 2019 | |||||||||
| Date | Venue | Sold | Sold Prior | Sold Post | Not Sold | Postponed | Withdrawn | Total | % Sold |
| 30 Sept - 6 Oct | On-site | 3 | 2 | 5 | 60% | ||||
| 1 October | Manukau | 12 | 9 | 1 | 22 | 55% | |||
| 1 October | Shortland St | 1 | 3 | 4 | 25% | ||||
| 2 October | Whangarei | 3 | 3 | 0 | |||||
| 2 October | Shortland St | 5 | 2 | 9 | 1 | 17 | 41% | ||
| 2 October | Pukekohe | 1 | 2 | 1 | 2 | 6 | 67% | ||
| 3 October | North Shore | 12 | 11 | 1 | 24 | 50% | |||
| 3 October | Shortland St | 5 | 2 | 7 | 71% | ||||
| 4 October | Shortland St | 1 | 3 | 1 | 5 | 20% | |||
| Total | All venues | 40 | 4 | 1 | 44 | 3 | 1 | 93 | 48% |
178 Comments
This may make the DGM happy.
Barfoot auction sales slump 34 percent week on week.
by printer8 | 1st Oct 19, 12:15pm
"Another swallow - while this and other data is not on their own indicators in a upswing in the Auckland market they are at least indicating a growing firmness. "
Hi Cowpat
Yes, you will note that I have posted on a number of occasions - such as the one you identify - that auction data in itself is not a firm indicator as it is largely influenced by what is the preferred marketing option depending on the state of the market, so raw auction data which only represents fraction of the sales is not an accurate reflection of the state of the market.
Can you tell me how many properties sold by deadline offers - after all they are a de facto auction, are currently gaining popularity, and not included here?
As I posted some time ago, I look to the REINZ data in both October and November for a more surety about where the market is.
@Printer8. Remember that most people are rational people and therefore wouldn’t see a more affordable housing market as doom and gloom. New Zealand already has one of the most unaffordable markets which for many is a gloomy environment. I don’t know why you persist with your attempt to define well meaning people negatively.
Right?
Most young couples unable to afford their own home -> Amazing, what a time to be alive! Let's make more money! MORE MORE MORE!
vs
A glint of hope that some day, some of those young couples might actually be able to buy a house -> DOOM AND GLOOM!
And some people are wondering why there's a mental health crisis...
DGM vs the Greedy And Sociopathic (GAS)
A lot of homes are owned by retired or soon to be retired people for whom their homes are their nest eggs. I wouldn't call them GAS for hoping to have a decent sale price to live off in their twilight years. The DGMers only see one solution to the current housing issues... a crash that will punish current home owners and benefit FHBs. That "us them mentality" and your belief that only through some peoples' suffering can other people benefit is what makes you all the DGMers.
I think we can find a wide enough gap between "decent price" and the current asking prices we're seeing that both sides can be satisfied.
That's nice of you GGP, how much of a drop in price is required until we reach "decent price" territory in your opinion?
That's a pretty complicated question. Let's work on it together.
Here's a good starting point. 10 years ago, at least some retirees sold their properties for around half of what they'd be getting now. Were they getting a decent price?
To me market = decent. However, I think your "decent price" concept is something different but you should know the answer as you made the claim.
It looked to me like you suggested "decent price" means something they can comfortably live off after they retire. Perhaps we are talking past each other, then, since I see no link between what you can live off during retirement and what the market price is at a given moment.
Obviously if the market price is higher now the seller will have more to live off. Whether that is a decent lifestyle or they can live comfortably on what they receive is a subjective question. However, you claim it is too high based on current prices. That's YOUR claim. My question is what would not be too high in your opinion?
I think you need to go back a couple of comments to when you were the one saying that a price drop is a punishment on retirees, who are relying on selling their properties at a "decent price" to fund their retirement. I understood that to be you saying that "decent" is about funding a comfortable retirement.
I think we can agree that comfort varies between individuals. What I suggest is that we start from the position where we assume, overall, retirees had comfortable retirements by selling their homes 10 years ago. Do you agree or disagree with that?
Disagree. You need to justify why a 50% drop in house prices is justified for that to be the starting point.
I don't think there needs to be a 50% price drop.
I find it surprising that everyone who retired 10 years ago had an uncomfortable retirement. I assume view that it was the same 10 years before that, too? Is the first generation of retirees that will be comfortable? Or are we not there yet even now?
Would it have been more comfortable if they had more money?
And how much money would they have to get for their house before it became too comfortable (in your opinion)?
Your the one setting the standard, I am happy for the market to apply and simply pointing out that calling retirees greedy sociopaths because they want to maximise their comfort is unfair. You appear to be saying too much comfort is also unfair, if that is your new measure when does a price offer too much comfort?
No. I am happy for them if they can get even more comfort than before. I never called anyone a greedy sociopath.
I am responding to you saying that lower prices are a *punishment* against them. I don't think it's a punishment to not get double what the previous set of retirees got.
HeavyG, how much of an increase over the price the owners purchased for would be required to reach "decent price" territory, in your opinion? I.e. how much extra money do they need before the needs of young Kiwis should also get a look in?
"only through some peoples' suffering can other people benefit" - All I want is house prices to increase at the same rate as wages. Do you think that would cause suffering to those retired people? If wages kept up with asset price inflation, those retirees could still live off rental yields instead of making a whole generation suffer.
Yes, if they needed more money to pay for their health, to have the things they enjoy e.g. to go on cruises and see places that they have never seen before and to leave something for their children and perhaps grandchildren. Why would you call people like that Greedy Sociopaths if the market is willing to pay and amount over a price indexed to wage inflation?
I didn't call anyone a greedy sociopath.
Read the post I was responding to.
Back in my day pensioners weren't off on trips around the world off the back of capital gains enjoyed at the expense of preceding and future generations.
The majority of home owners wouldn't be affected that badly by a 10-20% drop.
The point is, many self centred spruikers don't give a toss beyond their own wealth. If they don't acknowledge the need for a correction or crash, most of them similarly don't support a mass government house building program.
The image that comes to mind of many property investors (the ones who own 2 or more investment properties) is of filthy greedy pigs snortling and splashing around in the mud.
As a generalisation, non productive parasites.
Affordable are houses around 3 to 4 times median household income. We are at 9. Houses would have to at least half in value to be considered close to affordable. Do you not want housing to be affordable for young families, just like it was for those nearing retirement now?
Yeah but think about it, some retirees might only be able to take 3 international luxury cruises a year instead of 4. This is the true doom and gloom scenario here, not a whole generation of people where only 3% of them get to own their own home.
Oh, so the DGM are recognizing that there is unlikely to be a bubble burst and are now changing their DGM definition from that of a collapsing market to one that is firm and not in the interests of FHBs. Smile.
DGM have always referred to a bubble bursts, and yes I agree that a firming marketing is not good news for FHB - that is why I have been supportive of potential FHB being proactive over the past year. The DGM have countered with scaremongering and explicitly advising FHB to wait, wait, wait.
Can't have your cake and eat it too - you are nearly as bad as The Donald with your spin. :)
"Oh, so the DGM are recognizing that there is unlikely to be a bubble burst and are now changing their DGM definition from that of a collapsing market to one that is firm and not in the interests of FHBs."
No. I don't know where you got that from.
No.
The point is that for many young people the impossibility of buying in today's super unaffordable market is pretty gloomy. So the world view you hold is one of doom and gloom for many.
Maybe you could show some empathy and start thinking of people who are currently screwed by the market and the system.
I realise empathy is something that sociopaths lack.
Fritz, housing is still extremely affordable in NZ.
Forget the Auckland market, move if you can’t afford it.
Auckland is hugely overrated!
"Auckland is hugely overrated!" Yes I agree but that's what happen when you let foreign buyers asset strip!
Prospective FHB here, currently saving for a deposit.
I refuse to move away from Auckland. I am from Auckland, my family and my career are in Auckland, it would be a huge backwards step for me to move away.
I earn well above average and so does my partner, we have saved for years and will be able to afford a lower quartile home. If we can just afford a lower quartile home despite our high salaries, where are the rest of the properties going? That doesn't feel right to me, our classmates that earn less than us are being left behind. We just want somewhere to live with the security of home ownership.
Well done MW, I hope you find a wonderful home for your family
I think you may be (deliberately?) missing the point.
We're in the same boat. I've been looking for over a year and cannot find a decent house between around $1m in an area with a good school zone. Recently went to an auction that we finally felt we had a chance to win and and the house sold for $125k over the corelogic valuation we had to get done for the bank. So we're still without a home and $1800 poorer (valuation, inspection, solicitor fees). Buying a home seems impossible in Auckland.
These are common complaints about auctions...price gets overbid after prospective buyer has shelled out for DD. It is difficult across nz and probably set to get worse in coming days.
We should certainly adjust the rules to be more in line with other countries where there is greater responsibility on the seller to provide a more comprehensive information pack, for starters.
C'mon when or if the govt were to do that there would just be another minor issue and another and another. This generation seems soo mollycoddled they cant face reality of what is. Buyers should do their own due diligence now as always. Besides would buyers even accept a sellers interpretation of value or condition. And as I said earlier the problem of more buyers competing at auction is likely to get worse in coming days as the market improves.
This generation seems soo mollycoddled they cant face reality of what is.
Boomers? You're not wrong there!
No reason what's been done successfully overseas cannot be done here. Reasonable information disclosure is not onerous. Appreciate they're used to being mollycoddled with provision of affordable housing off the backs of previous generations, but putting information together in the form that's been done elsewhere is not too much for them, surely.
Buyers can always commission second builder reports if they wish, over and above the rest of the information that could be provided once and to all buyers.
Government could set up an approved list of service providers that have to adhere to a code of conduct and therefore not biased to the seller.
Mollycoddled? You think throwing away $1800 to attend an auction is trivial? Some people don't even earn that in 2 weeks!!!!
Gee I missed your comment yesterday Fritz being busy working (what you would call an unempathetic sociopath). My life is so much poorer for having missed your insightful comment. So today you could try working too, it takes your mind off personal worries
@ printer8: Sad REA's grasping at straws. Look, how much do we Investors have to spell out to you REA's that you are your own worst enemies! You simply can not lock out an entire generations of home owners through your own greed. The only reason why our property market has a pulse at the moment is due to mortgage rates rapidly dropping (That can only last for a short while). And the main reason why rates dropping is due to huge amounts of home owners/Landlords having to switch from Interest Only mortgages to repayment mortgages. If these rates didn't drop then yes you would be seeing a very large property crash (And we're not out of the woods yet).
"you REA's that you are your own worst enemies! You simply can not lock out an entire generations of home owners through your own greed"
Very weird comment, who are these RE agents? More importantly why would RE Agents "lock out an entire generations of home owners"? It makes no sense at all. I don't think you understand what a RE agent does at all
Haha yes I can imagine it. In a Deadline sale, a Real Estate sits down with the Vendor:
"Right, the best 2 unconditional offers we have are from Millenial First Home Buyers" and promptly tosses those into the bin.
"Now, we have an offer here from a lovely Gen-X Couple, unfortunately 5% - 6% lower than the first 2 offers conditional on bridging finance and subject to sale of their previous property. You should accept this offer".
Vendor: "B-b-but I want to look at the other 2 offe......
REA: "Listen to me, just take damn offer"
What's with the rebrand? Did B&T become a subsidiary of the University of Otago?
Another 0.75 cut needed!!!! Urgently
Not sure whether you are getting upvoted from the spruikers because they think you are serious, or from the dgm squad because they think you are being facetious...
DGM upvoter here. Upvoted because it's definitely sarcasm.
Upvoting myself, as it was definitely sarcasm. Unfortunately, the one that can easily become true story:(
The crash is here.
In the face of a crash, we're unlikely to have a full-blown market glut at the lower end of the market due to the still largely looming shortage of affordable homes.
Would debt serviceability be the only problem pushing more delinquent borrowers to list or do we see any other factors that could worsen the downslide?
I don't know about "worsening the downside" but the large population of retirees holding the old family homestead property might see the beginnings of a downturn as the last chance for some time to realise some capital for their lifestyle. So I'd agree we're not going to see a glut at the lower end, but a glut in the middle-market could create some margin compression.
Doesn't look like it is going to happen anytime soon, though. Prices seem to be remaining stubbornly high.
I suppose the retirees could just hold on to their properties, keep them from the market as they "don't need to sell right away".
Grey Power could take a leaf out of Roy Fong Nong's book and hold Retiree Property "Collusion" Seminars, where participants work with each other to drip feed the properties onto the market prioritized based on age/health/need.
There's definitely some of that going on. (The former, not the collusion bit!)
But we would have got $2m if we'd sold in 2017, now we can only get $1.7, outrageous! Let's take the house off the market and hope things improve before we actually need to sell.
No choice if you need care though.
Only a matter of time.
The distraction of world cup played a key role in the latest results and I expect the market will be subdued for the duration. We can expect a big lift after a successful final, so buyers should take advantage of this flat period and get in while they can.
(as stuff runs another article encouraging parents to give kids their inheritance early into housing)
Looks like those who were pushed over the top by the last interest rate drops have done the majority of their buying, now for the next downhill slide.
DEAD CAT BOUNCING, until it's time to be cremated
Go the Wild Cats
But, but school holidays and rain.
Am I right?
[Edit: Dang, just saw Rastus' post, I forgot Rugby World Cup - of course, #facepalm, how did I miss that one! Obviously rugby being on TV is going to influence your house purchasing decision making]
I also overheard two "portfolio investors" in our breakout area quote prospective buyers waiting until after the local body election results to make their move as a reason for the recent market slowdown. Love the optimism!
Ahhh local body elections too.
Of course - everyone is hanging on the massive difference between Goff & Tamihere.
That extra $100 rates increase p.a. would really swing your decision on buying a $2m house.
I'm so out of touch.
cmat, cynicism and irony won't make you better off
Yes 2019 is decidedly unique for both having school holidays, and rain -- that never happens, right?
I agree that the RWC excuse is an impressive new level of grasping at straws.
Surely nothing to do with nervousness of global events perhaps pricking the everything bubble. Little things like Brexit (19 days to go), Trade War (Trumps unchecked ego), German economy in decline (last flotation device in Europe), Saudi oil bombing, Hong Kong chaos and cash exit (seen bitcoin since March...?)
No no and no. Its the wet weather, its the local elections, its the RWC its, its.....anything but over inflated assets prices. But leverage away and load up on the cheap for ever debt.
Don't worry about any of that spurious nonsense, the property clock foretold this.
That clock stopped ticking a while back.. needs new batteries.
It's still right twice a day.
Shhh... If you listen closely you can hear it ticking away in the background. Hang on, I hear something else as well... I think it's the sound of Pragmatist missing the boat.
Better to miss the boat than be sold down the river. :)
I hear a rapidly ticking sound..
It's DD's heartbeat , seeing his portfolio diminishing in value
Property is one hell of a drug - palpitations are an occasional side effect.
Why do you assume my portfolio is losing value? Are you aware that NZ property went up 2.9% over the past year? 8.3% over the last 5 years.
Very good. All aboard!
The Property Clock is infact an ornate Sundial located on the grounds of the Summerset Palmerston North where TTP resides.
Hi Nzdan,
What evidence do you have that TTP resides in the sprawling metropolis of Palmerston North?
Or, is this assertion just more of your BS - for which you're renowned?
TTP
Nzdan is renown for taking the piss.
When it comes to BS, you have little competition ttp.
Just an assumption. You sing Palmerston North’s praises regularly on here and they have a Summerset Village so I put 1 and 1 together.
Hi Nzdan,
1 + 1 does not equal 3
Back to elementary school for you.
TTP
Definitely nothing to do with inflated/overpriced asset prices - we’re diffrunt those things don’t matter here! (Said using best sarcasm voice).
Still no uplift in spring listings, in Auckland at least. Stock now close to 20% down on last year, and will be below 2017 soon if the listings don't arrive in short order. Quite a turnaround from the start of winter in that regard. And yet the market seems to have gone only from "ghost town" to "fairly quiet".
Lets be a little positive here; it will bounce back and buy now in CHCH (and drive out the undesirables)
You all go on about first home buyers being priced out of the market but from my point of view (mid thirties single mother, multiple property owner) I see so many people who could afford a property but lack the financial intelligence and willingness to scrimp for a while to get to a position to be able buy a property. I know so many people "on the bones of their asses" who in the next breath are telling me about the $200 outfit or the $500 kids birthday party they threw... You all should argue about how to get to the root of this issue - why kids are not being taught this basic stuff at school??!! I sure as hell am educating my kid to know about capital gains, investing and how to pay off a mortgage quickly and to use debt to your advantage.
It takes a lot of financial intelligence to obtain debt & buy property.
And everyone needs to be educated on the certainty of capital gains.
It takes intelligence to buy property that is undervalued and that is where the successful investor succeed.
Nothing wrong with debt at all providing it has bought an asset that is income producing.
Opportunities are always out there, be in!,
Sure, the trend is your friend AND buy the dip.
Am I right?
You must rely a lot on advisors to get it right, if in fact what you say is true.
Was that comment directed at me? Why must I rely on advisors? I have never had a conversation with an advisor to date. Would I like to? Sure, its always good to keep an open mind and continue learning. I had learnt how to save my deposit for my first house by knowing where my money was going. None of this is rocket science...
Your obviously very new, his reply was to The Man (boy)
You're*
And yes very new but have been reading the repetitive narrative for a while... Don't you all get bored of the same comments day in day out?
And yet YOU'RE here reading and commenting..
Speaks volumes..
Clearly I'm a glutton for punishment... Or hoping and waiting to see something inspirational come of this...
You don’t need a lot of intelligence to buy rubbish in Christchurch that no one else wants. That market has been crap for years. Now let’s talk about Dunedin where the smart people got into.
I swear this is exactly the same as that Richmastery sale pitch!
I guess it takes more intelligence to work out what is shxt advice and what is not..
It's great to see your point of view, well done on building up a property portfolio from scratch as a single mother.
You're right, the biggest problem facing aspiring First Home Buyers today is not record high house price to income multiples combined with record low term deposit rates making the down payment a considerable hurdle. It's the frivolousness of the $500 birthday parties, $200 outfits and $4.99 avocados.
You forgot the $20 avo on toast.
You have just validated my point!!! Knowing where your money is going is a HUGE problem for people... I have a friend that was complaining she had $60 left for food after spending $70 on a "special" shampoo ffs... Priorities are up the whack....
For SOME people. Probably says more about your circle of friends than anything else IMO.
Yes agreed, a lot of my friends are financially illiterate... A lot of NZ'ers are financially illiterate...
What's the point in moaning about the record high house prices and record term deposits? Where is that going to get anybody?? Why not focus on finding a solution to those problems, whether that is individually or nationally... It is the frivolousness nature of this generation, the share amount of plastic crap cluttering peoples lives and minds is the same thing that is emptying peoples wallets...
The solution is collectively refusing to participate in this market until sanity prevails.
Appears that this strategy is starting to work nicely...
"What's the point in moaning about the record high house prices and record term deposits?" - for starters, to make politicians care about such problems. It's not moaning, it's an actual crisis. Look at the numbers. Income to house price ratio. If nobody "moans" about it, politicians will just do whatever the business owners and property moguls want.
"Why not focus on finding a solution to those problems, whether that is individually or nationally" - one such solution is raising your voice about it. Letting other young people know that there is no universal law that "house prices always go up", to finally stop the FOMO and let the prices go back a to a level that's affordable to more than 5% of the population.
Hang on, you want to find a solution for record high house prices, but also want ever increasing untaxed capital gains ?
Would love to know what kellsbells is smoking
I'm not saying just find a solution for record high house prices... You lot are so fixated on the falling sky you can't see out of the box. I'm saying find a solution to increase your wages, get creative with saving money, find other ways to get on the property ladder, ie rent in the area you want to live and buy a property out of zone that's affordable to you... Adapt to the current climate is what I'm saying... Maybe I am smoking the good shit!
Haha, keep smoking the same stuff. Why do most complain rather than do something you ask? Well I think you know the answer, it's a lot easier to complain than actually do something and then mock those who have done something and claim it's not envy
PS Dogboy, where did I state that I want ever increasing untaxed capital gains? I'm not entirely opposed to the CGT, I've always believed that property should be looked at as a long term investment. I believe in wealth equality and not trampling over other people to get ahead. I'm happy with the capital gains that I've made over the years and I'm also happy to be able to provide quality, warm, dry, insulated, affordable homes for people that need or choose to rent, to live in.
Oh ok the boomers weren't frivilous. Large numbers of them threw away money on booze, cigarettes and drugs in their youth.
Good to have your input Kellsbells.
Great to have someone else on here that tells it the way it is and not feeling sorry for ones self financial position.
Too many on Interest.co spend too much time feeling sorry for themselves and are jealous of people who have got off their butts and invested.
We have a large portfolio of property of all positively geared and where we own a lot more than what the Banks owns.
However, rather than say well done, many want to put CHRISTCHURCH down and say who wants to live in ChCh?
Reality is that ChCh is a great place to live for lifestyle and investment.
Thankyou, I'm not usually one for arguing pointlessly on the internet but the rhetoric on this site was getting to me haha. Christchurch is a lovely place to live as are so many other places outside of Auckland, unfortunately a lot of people seem to see Auckland as the be all and end all of NZ... Need more open mindedness.
Dp
BTW I live in a very low income, low decile, high poverty stricken suburb, I see it. I know people struggle, I'm not taking anything away from hardworking people who earn sweet FA but I've also seen the financial illiteracy that goes with it...
I think I like you Kellsbells, lol
Agree there are many that could modify their discretionary sending. Also100% agree that getting into the security of home ownership is one of the best things you can do for yourself, and you should absolutely sacrifice to achieve it. That said, investment (different to home ownership) should be about yield and not just speculative capital gain, which is unfortunately the main focus of many that attended a property investor seminar or three in the last twenty years.
The bubble of printed money that has flowed around the world, and when combined with successive NZ Govt s appalling foreign investment policies (especially for NZ tax payers) puts us in the position we have today of very high price to income rations. If the everything bubble globally deflates for any reason, NZ would not be immune - we are a dot of flotsam on the ocean of global finance. Any such global event would undoubted introduce the possibility of a capital loss, especially to the highly leveraged, which neither home owner, investor, or especially your banker, want. So to take the risk on bubbly prices or not...it is the individuals decision.
I'm personally still on the fence, but its certainly interesting watching the Aussie banks clear resistance to put more of their nuts (capital wise) on the line in little old NZ. Should we be worried... ?
^ Financial intelligence.
I think if any young couple are lucky/smart enough to A: be able to buy their own home and B: to be able to then secure an investment property, it should be looked at as a long term investment - again, something that should be taught. You are absolutely right about looking at yield and not just speculative capital gain but in the interests of keeping my post short, that part was left out. Property like everything in life is about finding the right balance...
And heck, all those avocados on toast!!!!
Two for $2.50 plus a loaf of bread - $5??? vs cafe version - $18??? x however many people you take out for brunch... Financial literacy...
You're assuming that most young people have brunches at cafés. I'm in my early 30s as most of my friends. Pretty much none of them do that more than once or twice a month.
There were periods in the last couple of years when the average house prices increased by more than a whole year's wage for most people. Financial literacy won't make up for that difference. Having to save 10% more than last year *just to keep up*(!!!), for 5-10 consecutive years? How's that gonna work?
It's not as simple as not going for brunch. And I'm not denying its harder now for people than it was a few years ago. But, there are a lot of stories like my parents who built their first house in the 80's, they had 3 mortgages at approx 18% interest at the time. Stayed with family, saved, scrimped and achieved their goal. Also an older Austrian couple who migrated to NZ in the 50's who brought their first property, shared a bedroom with their kids for a couple of years and rented out other rooms to get ahead. I'm not saying that these things are great for people to have to do but what people are going through now isn't that new... Home ownership has always been a struggle for some, people need to get creative...
"And I'm not denying its harder now for people than it was a few years ago." - Then what exactly is your argument about? It is orders of magnitude more difficult to buy a house now as it was 30 years ago (your stories are actually from 30-60+ years ago....). It takes on average 6 times longer to save up for a 20% deposit, than it did in the 80s. Servicing the mortgage costs the same (in proportion to income), despite interest rates being record high back then, and record low now.
My argument is that I know its difficult, I'm not denying that but there are ways and means to achieve it. Teaching people to get creative, push for higher wages, educate themselves, think of other ways to get on the property ladder if that's what this generation want to do.... I just don't see the point of wasting energy continuously pointing out how difficult it is... Change the narrative, teach the masses to be money smart. You can't expect things to get easier or rely on the government to take care of you. If it takes 6x longer to save a deposit, teach people to start saving earlier... Adapt.
Totally disagree. Pretending that it's as easy as cutting out the odd cafe brunch etc deflects the real issue. Which is that property in NZ and Auckland in particular is absurdly priced.
There are several meaningful and achievable policy approaches to address the issue. All it takes is a committed and comoetent government.
Applying all the perfect policy in the world wont do a thing if you dont teach financial literacy. Whether someone earns 50k or 150k they still won't be able to get ahead if they're not taught how...
Really liking this “tough love” thing you got going on.
Mate, that comment is a little on the chin...
Yeah I agree!
Good man!
Kellsbells, you are of course, 100% right, take care of your own life, do what it takes (educate yourself financially) to get ahead. Of course you will be successful with this mentality. It amazes me that most expect others to make it easier for them, like for example the government. Fritz, you're generally a smart guy, I'm really surprised you disagree with KB's post to take charge of your own life
If you can’t afford to buy in Auckland, then leave Auckland.
Very simple!
I am so pleased that this housing cycle has unearthed all these genius financial advisors and life coaches.
Financial salvation is only an approved mortgage and paper gains away.
In some cases this housing cycle has unearthed more than just genius financial advisors and life coaches, the like of TM2 as an oracle!
It also managed to awaken Tothepointradamus' supernatural abilities
You have 2 choices:
1) learn from others to get ahead in life
2) make fun of others and stay stuck where you are
Yvil - EXACTLY!!!
I learn from some, make fun of some, and also improve myself a little bit every day. What you see here is not all I do, every single day, 24/7.
Why not do both?
1. Learn from real intelligent investors (Buffett, modern portfolio theory etc) and get ahead; AND
2. Make fun of naive property investors who now think they can write a book because they only know one asset class and made money in one Central-Bank/Government sponsored super-cycle.
That's how I'm playing life, and it's working out for me.
Why not do both you ask? Because making fun of others and belittling them holds you back in life, because it makes you a nasty person, a person that other people don't want to associate with.
Chairman I appreciate that you think “The Man”as a genius financial advisor.
What I do know is that people can always improve their financial position by taking action.
By moaning and being jealous of people who have improved their lot by taking action will not achieve anything.
"It takes on average 6 times longer to save up for a 20% deposit, than it did in the 80s. Servicing the mortgage costs the same". Two inescapable points of fact.
Alternatively sub 35 demographic actually vote for govt policy changes in 12 months time...yes put your phone down and go to a polling station. https://www.top.org.nz/top1. This would drive a significant asset price reset and level the playing field. Yes there would be some losers - namely those holding lots of debt for capital gain which is simply diverting an entire generations saving into Aussie bank profits.
Who can’t save $25k including KiwiSaver for a deposit to buy their first home for a 10% deposit on a ownership flat in many areas?
If you need a bit more then talk to your parents about leveraging off their home?
It isn’t as difficult as you think, get advice from people who know about these things.
"I sure as hell am educating my kid to know about capital gains, investing and how to pay off a mortgage quickly and to use debt to your advantage." - Your kids are lucky to be in a position where they actually have any money left at the end of the month after paying rent, food, utilities, fuel, healthcare etc. You can't participate in capitalism if you have a low income (I'd say half of NZ is on such income). Everything is more expensive when you are poor.
100% agree! But why are these families waiting for a solution to land in their lap instead of looking for ways to change it for themselves? Where is the financial education? What about getting rid of consumerism? Pretty sure that is where a big chunk of peoples disposable income is going these days. My kid is lucky but the reason we have money at the end of the month is nothing to do with luck...
If people actually stop consuming, what we'll get is business closing down because of lagging sales, closely followed by increased unemployment. Encouraging everyone to save every penny is the last thing we want to do.
Why draw the line there, then? Why not tell them to not have children, instead of eating avos?
Good point.
Too many have kid after kid and then wonder why they can’t afford a home!
Best practice is to get on the property ladder and then when you are able to financially then have the kids.
Kellsbells, you won’t be too popular on Interest.co because you are talking too much sense.
Many just want to wallow in self pity together.
Honestly Kellsbells as a single mother, on a wage of $70,000 lets say unless your making way more, how would you save for a 1million dollar house in Auckland, paying Auckland rent. What would your numbers be. Even if you managed to save $100 a week, which is hard, thats 52 * 100 = $5,200 for 10% deposit that's $100,000/$5200 = 19 years. Then you have 900K of mortgage on top of that, sounds easy.
" Adapt to the current climate is what I'm saying"
That's funny, a lot of people adapt, but at 9 times income house prices, how do some adapt when average wage is 70,000K. Its not the people on here I think you need to worry about, but its the people who are getting their first jobs at this very low wage. The best option I can see is move overseas, but I don't want good NZers to leave.
Just because your doing something don't project, just thank yourself your being you. I'm doing things myself, but I don't expect other people to do the same, what I do expect is to have affordable housing for the whole of NZ, young and old. Three to four times income would be nice, in the UK couldn't get a loan unless the mortgage was only 3 times income, should be like that in NZ.
Yes it's hard but a first home should not be $1 Mill, more like $500k in Auckland, much less elsewhere, so you should halve your numbers and saving time
Edit: I was wrong on average wage.
Yes first house should be, but be better if its was less then 300K. In 2017, Statistics New Zealand reported New Zealanders were earning an average $50,000 in salaries and wages.
The Auckland urban area has a population of 1,628,900
Population: 4,885,300 (Stats NZ 2017 estimate)
Auckland has 33% of the population, so 33% of NZ are living in an environment where house prices are on average 1 million whilst the median wage is $50,000, if that isn't a recipe for disaster then I don't know what is. Sure people could adapt or move, but that takes some adaption skills and a huge movement away from Auckland, which would probably impact the whole productivity of New Zealand, all to keep house prices high.
There is a huge disconnect between what first home should be and what is affordable for the average Kiwi. Maybe they should lay off the $70 shampoo I'm sure that will help. Not sure who would be buying $70 shampoo on 50K a year, and how they will afford a home that is 10* income $500,000. 1 mill is 20* income.
Hi Swapacrate,
I certainly agree it's hard to buy a house on the average wage and yes, it would be nice if most FHB could buy a house for $300k. I still do disagree with your figures though, because now, you're comparing average NZ wages with average Auckland house prices. Wages are higher in Auckland so it's only fair to compare average Auckland wage with lower quartile Auckland house prices or average NZ prices with lower quartile NZ prices
What are average wages in Auckland. Im not sure but wouldnt be much more then 70k
Also there are a lot of houses in Auckland for less than a million dollars... That's a bit unrealistic to expect a FHB to pay a million dollars for a home.
Houses under a million dollars are damp or haven't been upgraded in years. They'll require at least 100k in renovations. Sure you could find a house under a million but it would be in a very undesirable location.
Why assume I live in Auckland? I live in Wellington where I'm told that the property market is equally as tough but if Auckland is unaffordable for young first home buys you don't have to buy in Auckland... There are a lot of other places in this country to live that are more affordable.
"Just because your doing something don't project, just thank yourself your being you." - what am I doing? Learning? Why is that a bad thing to want that for others?
Auckland is New Zealand, its not about where you live. 1/3 of the population lives in Auckland they cant all move, its about jobs and opportunities. If they moved it probably be detrimental to New Zealand, maybe even to property prices.
Like I say, its not about you and what you have done its the reality that average income is 50k to 70k and houses are unaffordable this will not change anytime soon. How do you propose all these people learn and make more then 50k to 70k if you can come up with that solution then you have probably a better business then property.
And its not about less expensive shampoo.
I'm not only suggesting people move out of Auckland. There are so many ways to get on the property ladder without having to move out of Auckland. Buy a rental in another town, there are smaller towns with cheap houses with good yield. Hold on to that for a couple of years, while continuing to save for a deposit, while not being frivolous with money and then when ready leverage the equity + savings to buy a property in your location of choice. Even a 10k capital gain in a property plus rental income will help toward a bigger loan. Think outside the square, start an online business, work two jobs, do what it takes if you want it bad enough... There is no magic answer but if people take steps to educate themselves and use a combination of strategies and then use the resources available to them a lot more people would be homeowners. I know a 21 year old who just brought an oven from the customer he was installing a heat transfer system for, paid $100 for it, cleaned it up and listed it on Trademe, it sold for over $500. A $400 boost for a couple hours cleaning... Straight into the savings account. there are so many ways for people to make extra cash but a lot of people would rather waste their time moaning about how hard it is...
So is that your answer, that doesnt help New Zealand or anyone. Housing is unaffordable, its so far out of reach that selling lemonade on the side will not cut it for most people.
At 50k average house price of 500k is ten times income. Doing extra is not going to cut it. House prices need to come down, banks need to stop lending at such high multiples of income.
But they're more than likely not going to go down and the banks won't stop lending soooo.... What are you suggesting? House prices to fall so the FHB's that have brought all go into negative equity?
I just don't believe its that far out of reach. I have so many examples recently where people are buying houses, literally last week my tenants gave notice as they have just brought their first house. Only he is working, she stays home with their 3 kids and he wouldn't earn a huge whack, at a guess maybe 50k. Other friends of mine have 5 kids, she is on ACC and he works as a painter and last year they brought their first house... I talk to so many people like this who buy in affordable areas and make it work. "The words you speak become the house you live in" in other words keep telling yourself its unaffordable and it always will be...
While I have mocked you on this article as I don't fully agree with the way convey your message, I can relate to this comment.
I bought in Masterton 2 years ago, and commute into Wellington each day for work. I made the move from Christchurch with full support of my employer, took a gamble and it's paying off. Our mortgage is less than 10% of our gross household income and we've ridden the wave of house price inflation in the area over the past couple of years.
Not everyone has the same fortune or opportunities, when one is resigned to never owning a home then they might as well enjoy life with $500 birthday parties and $70 bottles of shampoo. I don't agree with looking down one's nose because others haven't made it work.
OMG Nzdan really? You think I'm looking down my nose because others haven't made it work? I'm all for others making it work, I'm educating my friends and family with the tricks I have learnt. I have coached friends through buying their first properties, I have lent friends and family thousands without expecting interest and allowed them to pay back when they can. Do I get frustrated when I hear people complain how broke they are in one breath and then in the next tell me about the ridiculous unnecessary purchase they have just made - ofcourse! If you have to stoop to petty comments to try to one up me, that says more about you than me my friend...
Yes I do think you're looking down your nose, and I think coming on here and making sweeping generalizations based on your small selection of anecdotes is a bit disrespectful to those (i know plenty of) who are hard working and aren't frivolous but don't have the luck or opportunities to go with it.
But hey it's cool, agree to disagree but some humility would be nice.
Seriously if you saw where I live, where i come from and the community I live in you would see there is no looking down my nose at anybody. How is it that me suggesting a couple of different ways to get people on the property ladder suddenly me having no humility? Because of observations I've made of ways that people could improve their situations? How is that disrespecting people that genuinely can't get ahead? You've completely misinterpreted what I've said.
NZ Dan, get off you high horse, Kellsbells is not looking down onto anyone, she's simply trying to help others.
KellsBells, I have tried helping others as well, it is only seen as trying to be superior, looking down onto others, people are too angry and stuck in their ways to even consider that a comment could be beneficial, it's very sad, it's also a good reason why so many stay stuck where they are, they are totally unwilling to listen to others for their own betterment
Also - well done on your calculated risk!
Kellsbells all your examples are anecdotes, while I love a good anecdote as much as the next person, it doesnt solve the problem of unaffordable for the next generation. Not everyone is in the same circumstances hence averages over a whole population.
Yes I do think prices should come down, if they go up whats the problem with down or stagnate. Houses are for living in, if its a home you can wait 15 years for the next rise if there is one for capital gains.
I think interest rates will eventually rise, their is only so far they can drop, and sooner or later, people may take their deposits out of banks looking for greener pastures whilst overseas bonds may increase.
Recession could be in the wind, business confidence is down, but yes house prices should drop, as Spock said the needs of the many out weigh the needs of the few. If its a house and you can afford it you will be fine.
I want people to start businesses and export overseas, this is a lot more beneficial then buying up houses, imagine if everyone had 3 houses, thats 12 million houses, not sure thats great for you and NZ. If everyone could afford houses you might not have tenants. Building business and export our goods is a better way for NZ, not unaffordable housing with prices driven up by the few.
There needs to be a combination of all these things to make housing more affordable but surely it all starts with education. Educating kids to make wise choices, how to invest in themselves, to take risks starting businesses, how to save for their futures, understanding consumerism - the pros and cons, understanding marketing tactics so people don't waste thousands buying the latest gadgets that they simply can't afford, understanding hire purchase and credit card debt, learning about loan sharks, learning to about property, share-market, kiwi-saver investing. There is no magic pill, one size fits all answer to this property problem and there is also no universal rule that says it should be easy and life should be fair but I think if more people understood its a combination of things and took a range of different approaches to resolve the issues it would change the mindset that property is unaffordable...
The property market isn't nearly as tough in Wellington as in Auckland. This very website you are currently on publishes a monthly report on home affordability. Have a look at the most recent ones for Auckland and Wellington: https://www.interest.co.nz/property/home-loan-affordability
The short story is that the median wage is a bit higher in Wellington while lower quartile property is a lot cheaper.
Moving out of Auckland isn't actually bad advice on its own, I agree with that.
Looking at that report for Auckland -
take home pay FHB - Aug 19 $1,684.67
Average Wkly mortgage repayment FHB $613.35
Can these first home buyers not survive on $1071.32 P/W after paying their mortgage? I Would have thought that is quite decent?
Those reports make a number of heroic assumptions.
How many 25-29 year olds do you know that have saved $77k in their own right?
I knew two couples when I was that age who *might* have saved that much - both investment bankers.
Others had *just* paid off their student loans by the time they were 30.
I'd suggest most won't have much more than their Kiwisaver.
The report doesn't comment on how hard it is to get a deposit, which is fair since that's probably too variable, especially since some people have rich parents. It's about mortgage serviceability and it's still useful for that.
I'm in that age group. For what it's worth, of the people around my age I know, only me and one other have that much saved up. The other has parents in China that bought two houses in his name, so probably doesn't really count. So yes in that sense the report is not that useful.
If both parents are working then you are looking at up to $600 per week for child care (if under 3) for 2 children. When my second child goes to day care we'll be paying $500 (1 under 3). Then what about transportation, water, phones, electricity, internet, insurance, health care, general living expenses, FOOD, swimming lessons (these are basics, no entertainment, outings or takeaways)? Furthermore, I'd love to know where one could get a mortgage for $600. Maybe if you live in Pukekohe and then have additional transportation costs.
You are dreaming if you think it should be 3 or 4 times your income.
I would be buying up everything as the returns would be phenomenal.
Houses are still very affordable in most parts of NZ.
Go overseas and you will see that we are still very very affordable
I am overseas and it is 3 times income with Halifax, in London Surrey.
In parts of NZ, ha Taihape maybe, yet 1/3 are impacted by unaffordable in Auckland and in other parts. People need jobs to survive, countries need people to work to survive. At least 1.6 million are impacted. Not to mention other parts. Your only response is move.
Obviously banking is more responsible here.
Get real, NZ housing is incredibly un-affordable. looking at this on this side of the Tasman
https://www.domain.com.au/project/3645/anise-at-bridgeman-downs-bridgem…
This town house is listed for around 500K, what can you get for this in Auckland, Wellington or Christchurch? May be 1br apartment in Auckland, a damp unit in Wellington or a 2br unit in Phillipstown, Aranui of Christchurch amongst the P lab or skinheads neighbour!
How much did you pay for your first property, out of interest?
The actual data that we've seen posted here on Interest in the past suggests younger generations today are actually saving at quite a high rate.
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