The property market came to a sudden halt this week as the real estate industry joined the rest of the country in lock-down mode.
Real estate is not considered an essential industry so agents and other property professionals and their support staff must self isolate like everyone else.
Open homes and auctions have been cancelled and agents can no longer hold face to face meetings with vendors or potential buyers or undertake property viewings.
Effectively this has brought the property market to a virtual halt, a situation that is likely to continue for as long as the lock-down remains in place.
Yesterday (March 25) Ray White City Apartments in Auckland's CBD conducted what may have been the last live residential property auction in the city before the official lock-down commenced at midnight.
It was a subdued affair with just three properties on offer and only two potential bidders turning up, however neither of them was prepared to bid and the only bids received were made over the telephone.
All three properties were passed in.
Ray White City Apartments director director Daniel Horrobin said the company had looked at the possibility of holding virtual auctions over the internet but decided against it.
His staff would continue working remotely from home to assist their clients but he expected actual sales to "come to a bit of a halt."
He said there could be a few instances where an apartment becomes available for sale in a building where another investor already owns other apartments and is keen to acquire more and would be happy to buy without physically entering the property.
New guidelines issued by the Real Estate Institute of New Zealand said owners and tenants would not be able to move into or out of properties during the lock-down period and the Auckland District Law Society had recommended that all settlements be deferred until after the lock-down is lifted.
The lock-down would also affect rental property managers, who are also required to self isolate.
Martin Dunn, the Chairman of Auckland real estate agency City Sales, which manages a substantial portfolio of rental properties on behalf of landlords, said the company's property managers were always on call 24/7 to deal with emergencies such as burst water pipes or loss of utilities at properties they manage and that would continue.
However under the new guidelines issued by the REINZ, property managers would not be able to undertake routine property inspections, conduct rental viewings when properties became available to rent or have face-to-face contact with tenants or landlords.
Urgent maintenance could still be carried out but routine maintenance should be deferred until after the lock-down ends, the guidelines said.
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174 Comments
The dynamics of listing and showing a house are a no go. Why you would try to sell during the quarantine window is is beyond me.
Don’t know but a sign went up down our street just 2 days ago!
Rental?
No, fairly desperately worded sign to sell.
Two properties went on to the market in our neighbourhood (Parklands, Napier) and both had the sold banner go up last week, within 10 days or so after the for sale sign had gone up. Surprised me that anything would sell so fast at this time, but what would I know?
I hope they drove a hard deal as market is about to drop 20 percent by May/June and then keep heading south. This lockdown is going to destroy tourism and many small businesses as they say 4 weeks but chance are it will go for over 12 months and what if they never make a vaccine then what do we do. USA/AUS know that shutting down will destroy everything so they have decided to do the hard thing but maybe right choice as this lockdown is going to affect many people in a very bad way as well.
"as they say 4 weeks but chance are it will go for over 12 months and what if they never make a vaccine then what do we do."
Yes what will you do. I will dump our portfolio and get whatever I can. Do you think I can find a buyer under a rock
USA and AUS are already sacrificing lives for their choices. I think lives are more important than the economy. There may be over a million dead in the US before this is over.
desperate sellers looking for a desperate buyers.
It’s more like… Unwilling sellers + flighty & frightened potential buyers + overvalued market + (huge debt mountain)^2 + imminent global depression + more unconventional monetary policy & ultra low interest rates = ? I’d really like to know the answer to that equation.
Sign went up next door yesterday!
I know of one guy who is over leveraged and realised it's all hitting the fan. Just put his Taupo AirBnB on sale...
We may soon see that there's no under supply of housing in NZ - it was just all either left empty, being used by short term workers, or used as an AirBnB. Not being available for use by young NZ citizens wanting to purchased an affordable home to raise a family.
There is an undersupply of affordable housing. The correct definition of which is approx. 3x median multiple.
Any other definition is pointless, as in if prices drop by 1/2 but no one can afford them, does that make them more or less affordable?
The 3x median has no significance in my opinion Dale.
With interest rates near 0 the median multiple can rise.
I think we're going to see a significant flood or listings this year and no many buyers - and supply/demand will look for equilibrium - price movement down.
Everyone is entitled to their opinion.
Interest rates have no bearing on median multiples when supply (relative to demand) is not restricted.
When supply can meet demand, waste in the form of non-valued added costs disappears from the system which allows median multiples of 3x to be achieved as this ratio is reflective of non-restrictive/competitive value-added supply.
So the question is, is demand going to decrease or increase relative to supply?
The clue in the median multiple as to its usefulness is the word, 'income.' Because without that you are not going to be able to buy a home to compare anything with.
Stop it .... you're freaking me out
I assume that this is sarcasm ...
The surprise will not lie in the slowdown in market activity.......
It will lie in the velocity and magnitude of the bounce-back.
TTP
or lack there-of
You do realise that the effects of this will linger for years? Ie. If unemployment hits 15-20% in the next few months it's unlikely to get below 10% for quite awhile
Globally, 22 million people got laid off during the GFC, and the World Bank expected around 25 million job losses this time. If unemployment hits 15%-20%, we may get WW3.
Cannot help but agree. It has been our way when stuff comes to a standstill that we blow it all to bits, then start all over with "growth".
That's what Ray Dalio has been suggesting for a while now. Similar conditions to early 1930's that resulted in WW2. If financial outcomes cause further inequality and we have a rising power then who knows what's on the cards.
Tourism and probably immigration to at least some extent, are stuffed right now. If we are to eliminate this virus, we have to be in lock down until it can be declared at least somewhat manageable, if not gone, then everyone coming into the country will have to be quarantined, the same way that incoming live animals are, until a vaccine or effective treatment is available. Tourism could almost permanently beggared, as we come to terms with its negative effect on the planet.
TTP you are correct that surprise will not lie in the slowdown in market activity.......AS THAT IS EXPECTED
It will be if it rise (and not slow down)
A lot of lost jobs, means a lot of mortgages not getting paid.
The "Holiday" with interest, won't help a lot in the long term. Just delaying and compounding the pain.
So I understand why people want to sell, but the how is the issue.
Skype/zoom open homes?
If there is one activity that is not essential, it is the real estate "industry". I can hardly think of anything less essential than real estate agents.
Nail, meet hammer.
Yep, doing the lockdown under a bridge is fine. LOL
Best comment I have heard in months....
Truth & Real estate agents rarely co-exist !!!
Some will say it's sustaining the (false) economy, like tradies, paint manufacturing etc..
35, nope, 50!!! thumbs up so far, a record high I think, the dislike for RE agents is strong. In my view they're people, some are bad, some are good, just like in any other profession. One of my best friends is a RE agent, she's a great person and also an awesome agent.
Also it's sad that a post that is negative (puts down a profession) gets the most posts ever. Says a lot about most posters here. (yep I know, I have just made another 50 enemies on here, couldn't care less)
This is first and foremost an anti-property forum, kind of like the breitbart of property. Are there any other more balanced contributor forums around?
Or it could just be that property investment at the moment may not actually be a good investment - hence the anti property tone? Could be wrong but just making sure you're open to that possibility?
IO
You are right - in the “I might be wrong” statement. :)
It is great to have debate and for that there needs to be differing opinions. However, during the past six to ten months when there were indications of the Auckland market bottoming and rising there seemed to be numerous deep seated despondent anti-housing comments - e.g. property is just a Ponzi scheme and criticism (such as fear mongering) of FHB who have recently purchased. Such comments heavily outweighed those saying in favour of property.
In part I can see reason for this; there are many younger contributors (who this site seems weighted to) who are understandably angry and frustrated over affordability issues. As such there is seemingly an inclination to take their feelings out in their comments.
Note: The Convid-19 was not a known factor at the time so those comments made then are off-the table. While supporting FHB I regularly commented in buying to be prudent they should pay down the mortgage as quickly as possible - that has proved to be right although it could have applied to a lot of other risk factors.
Our housing market (and probably Aus and Canada) could well turn out to be a ponzi scheme. We will find out if/when credit creation no longer rises. Using equity in one home, to buy another - sounds like a ponzi to me. Last one in pays the bill (i.e. the FHB's the last 5 years).
Are you willing to admit you could be wrong? I am willing to do so - some humility from the property bulls (or does that not exist?)
Who is telling you to buy property now? Very few people are on here pushing property, to be honest the less crowded it is the better. I like it, but it doesn't suit everyone. One of consistent anti-property investor themes is that it is easy money, yet the Covid shut-down and market disruption shows there is risk with it like any investment.
"Who is telling you to buy property now?"
Not at this very moment, or today but here is a comment from 2 March 2020 (25 days ago), - remember property is a long term investment. Here is one amongst a few.
From TothePoint:
"Greg says it all with, "..... the total amount of housing stock available for sale remains well down on where it was a year ago."
That suggests the upward pressure on selling prices will be sustained.
Some people here will lament not purchasing a house during 2016 - 2019, when the market was much less active. Right now there's fierce competition between FHBs and investors for a limited housing stock."
Bollacks, property is the safest and best performing investment around if it is done correctly.
Robert Shiller identified that as an incorrect statement in his book Irrational Exuberance. Real returns on property historically weren't that great. Might be a good read if you have some spare time the next 4 weeks?
"if it is done correctly" - that is the key
Most owner occupiers buy at market price or even above the true value. "Done correctly" to me, means buy at a HUGE discount to market price, and at low valuations.
It all comes down to paying a low price and at low valuations.
If owner occupiers pay too high a price (and valuation), that is when they can become potential collateral damage in a property frenzy.
For example, the median house price is currently $888,000 in Auckland.
Taking that same house:
1) Person 1 pays $2,000,000
2) Person 2 pays $888,000
3) Person 3 pays $444,000
Person 3 has the least price risk and a large margin of safety.
Person 1 has the most price risk and no margin of safety.
Margin of safety comes down to the price (and valuation) paid.
The price you pay determines your future return.
For the purposes of discussion of the property market in general in a city or town, the discussion assumes buyers are buying at the median house price for that area or the HPI for that city. So in Auckland, that number is currently $888,000 or the current HPI for Auckland.
IO, a bit rich to suggest that the anti property tone is because "at the moment may not actually be a good investment". The anti property, anti landlord posts have been on this site for many years
Correct - for the point identified in my post above. Good to see you've got a new supporter in Te Kooti.
IO, I'm not sure if you have worked me out yet. I have a portfolio of stuff, of which some is property. Of course there are other investment opportunities outside property. What I can say in my experience is there are features unique to property that make the risk/reward and gearing more attractive in the long-run. Everyone should do whatever suits their risk appetite and circumstances, it would never occur to me to lecture someone on what they should do.
Not yet - good stuff. In the long run - do you mean in your experience in NZ the last 30 years? Orr do you mean the long run - like the last 100 years across all countries/property markets?
Both really. Outside of a unicorn stock like Xero, property has cleaned up everything else. Not only that, the wealthiest people I know just kept it simple and stayed property. I'm not here to lecture you, or promote it - it is what it is.
Here's long term US history from Robert Shiller - inflation adjusted.
https://www.researchgate.net/figure/Figure-Four-Case---Shiller-index-Us…
Haha ok - I think we might be on different levels of thinking here. All the best.
The historical price chart for the past 25 years may certainly be very comforting for property investors, and as a result they may believe that property prices do not go down by much. There is a very real danger from extrapolating historical prices into the future.
FYI, during the "plateau" phase of 2008/2009, there were property investors who became casualties, and financially bankrupt due to high amounts of debt.
450% nominal return in 28 years. If you bought that $100k house with a 33% deposit, and it will have been fully paid off if rented out, your return is 1,700%, or 60% per annum. 28 years captures at least several downturns as well.
Te Kooti,
Imagine you are a first home buyer today in Auckland. What action should that person take today? That is what matters. (after all, they are unable to purchase at those historical prices today)
1) Would you be buying and paying the current market price? FYI, the current median house price in Auckland is $888,000 (as at February 2020)
2) what percentage return would you expect in the price of the property in Auckland say 10 years from today.?
Te Kooti: "This is first and foremost an anti-property forum"
A bit strange, Interest started as a site focussing on… well interest rates… for mortgages so yes, very much a property website.
Forum as in comments, not the editorial. Keep up Yvil!
Property investment, residential especially, should not really even be a thing, it is economic cannibalism imho
I'm moving towards the opinion that landlords should be treated like foreign buyers. They can only rent out new builds so that they add supply to the market, given that they argue the reason house prices have been going up is because we have a supply/demand imbalance. That way they can be part of the solution and not part of the problem. Any thoughts?
Check the UK out, sweeping reforms there. Investors pay an additional 3% stamp duty and cannot deduct interest or any depreciation from Income. Killed the private landlord market so everyone moved to corporate envelopes and scale.
Yes, that's how I see it going here too. Then like most things in this country we'll eventually end up with a duopoly who can hike prices as there's no competition - and people will moan about that too.
Yes, it encourages large corporate landlords and this reduces existing problems, but brings new ones.
I said a long time ago it should be that way, if you want to build a property portfolio, then do just that, build it.
PS and if that is the case, suitable buildings for long term tenancies (leases) can be built
which are quickly turned into slums by tenants who don't care about their upkeep.
Yvil,
Yes, they are just people, some very good, most pretty average. What they are NOT is a profession. They make money by charging a commission -a ludicrously high commission-and no profession does that.
You should also ask yourself why so many dislike agents.
After a month (or maybe more) many activities will adapt and find new ways of doing things. The 'new' ways or 'workarounds' will expose how unnecessary so many people involved in a process there are.
Jobs will go, never to return.
Expect massive reform (eg UBI) of the welfare system - well overdue but always avoided by govt.
Never waste a good crisis
I think there will also need to be a review on remuneration packages for higher management of corporates. How can companies pay so much to executives (who keep their jobs during times like this) while those generating the income for the company are the first to lose their jobs? Yet those higher executives have so much take home pay - yet there's nothing left to pay the staff in hard times? Its capitalism gone bad.
Hopefully there will be a minimum capital requirement for airlines imposed. Every crisis this industry is sucking hard on the govt teet.
Nah, it's simply capitalism. Trickle down economics.
House prices are going to moon now that so many people are free from the burden of employment and able to devote their entire existence to buying property.
- Bindi Norspruik
All I've ever wanted from the likes of Bindi is a fair and balance view of the property market. With statements like 'the property market looks strong but don't forget what happened in Ireland'.
When you look at why REINZ exists they are literally the worst people to ask for an opinion on the property market.
Id call her a lobbyist before a regulator.
Problem is nearly everyone that has the microphone has skin in the game. Be it Bindi, or any of the bank economists, or Ashley Church, Mike Hosking (although he now rents doesn't he...might be smarter than I thought).
Very difficult to get a fair assessment of where we are at when those with the loudest voices aren't giving fair, impartial advice. Bank economists should be working in the bank marketing department (if not already...)
What's that? I couldn't hear you over Mike Hoskings yabbering, did you say that it's very difficult to get a fair assessment of the property market from the share-owning commenters on interest.co.nz. Yes I agree entirely
But you have skin in the game right? So you are closed in your views like many who make comment on that market? (but please feel free to correct me). You wouldn't want to discuss the bad news about the property market - just the good right? Hence my point in the post above.
I had skin in the game with the share market, but would openly admit to that fact that it was very expensive and at risk of a significant falls.
Don't think I've ever heard a property investor admit that the value of housing in NZ could fall by significant amounts, say 50% - but it could.
Are you open or closed Houseworks? Or are you just the same as bindi and co?
Am I open or closed? Very open minded IO, to the point I have been complimented for it .... and my 20 millions skins agree. But everyone gets to choose for themselves what they perceive as truth, which is exactly my point... that you have a voice and you use it very loudly here on interest.co. If you think people cant hear you because of mike hosking et al, just maybe others have made their minds up for themselves and ignored your wrong advice
I'm glad you're open minded - so do you admit that house prices COULD fall by 50% (or more) in the next 12 months?
If not, I'd argue you are more in denial than being open minded - but that is purely my opinion and I don't care if you like it or. I don't say its the truth either, because it hasn't happened yet - I'm just into exploring possibilities and likely outcomes. And as I don't have a crystal ball I don't claim to push the 'truth' on others as I have no idea what will happen - just what COULD happen. There's a difference. Black Swans etc.
What's your point IO?
Many property bulls appear to be close minded - especially around the current risk level to that market and the possibility of quite significant falls in values. That clear?
I predict house volumes to be at record lows for April, lol, probably even mikekirk and I can agree on this one
Very nice, Yvil. Bloomin' Oracle of Delphi we have here in you :)
Thanks RS and it's free!!! (may as well start lockdown with a bit of humour)
And I predict that REINZ will manage to put a positive spin on it.
"Prepare for everything to go up up up after the lockdown! Property is the only bulletproof asset in these troubled times!"
Well, given how busy bunnings was yesterday, when the lockdown ends there are going to be some nicely renovated homes.. just remains to be seen if they hit the market.
Was the DIY trip really worth all the additional virus cases that were potentially just spread at the weekend by idiots doing non-essential shopping and cramming into DIY shops together?
If they kept it to themselves I'd call it evolution...
Bit like cruise boat passengers who boarded in February.
Darwin award contestants.
Who will be this years winner?
https://en.m.wikipedia.org/wiki/Darwin_Awards
In my case i went to build the desk i'll be using to work from home for the next 4 weeks.. so yeah, i like getting paid; and personally, if i caught coronavirus from it that works for me. I'm young and healthy enough that 99.5% chance I wont need serious medical treatment, and with 4 weeks of lockdown I won't be spreading it around except to my partner, who is also unlikely to need treatment. Getting it over and done with would be good.
It's about 80-85% avoiding hospitalisation. 99.5% is still being alive at the end of it.
Death rate in my age group in South Korea is 0.1%, And the case rate is also low. Old men, and those with existing medical conditions are the ones that are dropping like flies.
Death rate in Nz so far is zero. I remain skeptical.
Will be interesting to see where March prices land Yvil. I think it would be too early to see them hit by the virus, but I doubt they will be an all time high
This sort of concern is unworthy of anyone right now
Fritz, March prices will definitely be impacted by Covid-19, since the closing of borders on 15th March, RE died down. I also doubt they will be at all time highs and if that's the case, I'm prepared to admit my predictions back in September 2019 of all time high prices in March 2020 was wrong
Good man
Month 1, 8000 sales x 650000 x 3.5 percent =200 million non essential commission.
Well, it's essential to the REA's. As they'll soon find out.
Guess they'll need to sell one of the Audis....but will hang onto the Porsche Cayenne.
I just checked used Cayenne prices. Funny how time erodes the value of a premium car.
Cars like my 2004 1.3L Nissan March cost only $6000 less than 4.5L Cayennes with all the bling from the same year... Except the service of my car costs $300 per year on average.
I love Porsches, I had a Boxster when I was still young and not interested in saving for a house. But I wouldn't touch a Cayenne with a 10 foot pole.
Very envious and bitter sounding thread.
Seriously? The only bitter sounding comment here is yours.
Oh that's a grown up comment : "no it's yours" are you 3 years old?
Houses with good facilities for enduring periods of quarantine should increase in value. Look for places that have home entertainment rooms, tennis courts, heated swimming pools, helicopter pads, spacious grounds and separate self contained isolation quarters.
Anyone with a bunker or panic room is going to make bank.
Zach - increase in value, you taking the piss?
If a property can hold value in the next year that will be a win.
Mark Richardson on TV this morning trying to explain how landlords are the salt of the earth.
Vested interests getting rammed down our throat continuesly. All part of MSM pro RE, farming, National, China focus.
I used to quite like Richardson when he was on crowd goes wild. Becoming less bearable with age...moving rapidly into the stale, pale, male category (he may actually become the image of that genre).
Thank God we won't hear him again on cricket commentary, or will we?
He was always going on how the Virus was storm in a teacup. Been back peddling a lot lately and trying to appear worldly wise.
I am waiting for a You Tube segment to appear with all the wise self appointed PhD of everything saying how the virus is nothing.
Alan Jones in Oz was the worst but Hosking, Hawkesbury, Richardson and others all have a cross to bear.
Mark is hardly pale!,,
He is right though!
Landlords are needed and there is nothing surer the experienced positively geared landlords will remain.
Why would investors sell their investment property only if they have a job that isn’t now working!
That is the difference, property investment gives you that income if you do it right.
Poor investors will have problems just like poor business
Parasites often do well until the host sickens and dies
Richardson destroys any credibility the program has, Garner might be a bit of a windsock with his views but at least he does attempt a considered opinion. As opposed to Richardson who has overdosed on the right wing Koolaid!
More like a negative pressure rooms.
Zach, why not throw in a 9 hole private golf course?
Will all recent contracted sales be completed after lock down, or will purchasers with adequate legal clauses in place, reconsider, renegogiate or walk away
'force majeure'
Unforeseeable circumstances that prevent someone from fulfilling a contract.
Potential grounds to walk away. The Lawyers will be studying it up for sure.
Surely you'd be better to lose your deposit and just not settle. Walk away!
I do wonder if there will be some of that, esp if this goes on for much longer than 4 weeks.
Yeah I'm picking 6-8 weeks of lock down. I asked an agent about it last year, he said that had only happened once in his 30 odd years in the game, it's not going to be possible to draw down your mortgage with no income...
Other than long term sales settlements there would be no problem onyerbike
Unnatural , manipulation , deception , lies , free ride = UP UP UP UP........realistic , natural, adjustment, correction, bubble = DOWN DOWN DOWN
Listed Property funds have dived. Check out the share price falls of GMT, SPG, IPL and the like. If commercial has crashed can someone explain why residential is not close behind.
Unlisted, wait for the likes of the Oyster Prop fund update. The Oyster group has been written up by Interest in the past. If it hasn't halved then I would suggest they are using the same valuers that helped with the Hisco house bung for Cruella and her fellow shysters at ANZ.
The residential market, although weak, is likely be significantly more resilient than the commercial market.
Fritz, weak will likely be an big understatement. There will be many job losses, of people with big mortgages. The average mortgage size in NZ is huge, because what could go wrong?
Time will tell. Many people who own don't have mortgages, or only small ones, something like 30-40%. Sadly, the worst hit in terms of jobs will be low wage earners, the majority of whom don't own property.
Yes of course some business owners and some white collar workers will lose their shirts too, and it's from there that we will see impacts.
For those it will be interesting to see what happens. Fire sales of investment properties, to help save their own home?
It will be very interesting to see what happens to the Auckland CBD apartment market. A crash there? Largely occupied by foreign students, visitors (Air B and B), or people on work visas in low wage work...
Never underestimate the influence the marginal buyer has on the market. It's been the FHB's and investors entering the market for the first time that has pushed values up to these highs - not Mums and Dad's moving within the market (unless they've been taking on significantly more debt).
Like the keen marginal buyers for 116M Michaels Ave Ellerslie which sold for 1073K at auction this past week. Homes.co gave it a value below 900 but it deserved a better price, I didnt realise it deserved a MUCH better price
Because money has been cheapened by central banks in a "new normal".
Which then has turned out to be a terrible idea when the hard times have struck. They were left with little real ammunition. Irresponsible nurturing of bubbles.
Correct Houseworks - completely agree with you. The marginal buyer influences the market in both directions. Just depends if the market is fueled by optimism about the future or pessimism. That COULD be the last optimistic buyer about the future for a while. Time will tell.
How do you see yourself IO .. optimist or pessi
.
Leading indicators would be the big rest home operators RYM and SUM on NZX. They have been tanking recently, you will note that as soon as the government said they were going to have 6 month loan repayment holidays for everyone, their prices jumped back up.
The smart money is betting that the government is going to endlessly prop up the housing market... and they might be right.
US and Australia as well - will be some great buying on the commercial property front when this is all over...assuming businesses find their feet again.
Was browsing through the various US exchange traded funds for real estate yesterday on the NYSE and ASX. They're all getting absolutely smashed.
Not sure why you'd want to invest in residential property after this is over if NZ property values don't fall by about 50%. Commercial property would be a far superior option. You'd be a fool to buy it. (standing by for highly emotional responses..)
Residential are not so bad. Most tenants have some form of guarantee income (especially self employed and public servants). Expect more lollies and safety nets to avoid a collapse. Mortgage rates to fall further. Tenants stuck in one place for a while.
Commercial rents through are horrific. Most will have tenants unable to pay or threatening to leave. I think the whole work from home thing, will mean many tenants never return. And this comes at a time when multiple new skyscrapers and building projects will flood the market at the worst possible time.
If it turns to custard then businesses won't be able to pay their commercial leases. At that point they will release employees. At that point those employees who may also be residential tenants will be earning nothing, or whatever the government can afford to pay them. What they have available to pay in rent will be minimal, so residential rents will have to reduce to meet whatever money is left over after people have purchased food and paid for electricity. If this falls significantly, I don't see the yields rising on residential property, so prices will also fall significantly. Its all related/interdependent. The commercial market is just the leading indicator, much like the stock market.
Either that or the new model after this is over is that workers don't actually 'go to work' anymore. Everyone works from home. Commercial market share might reduce substantially - who knows.
Smalltown, why would a drop in listed property funds have anything to do with the valuation of unlisted commercial property. That has nothing to do with it. Quality of building, location, quality of tenant, and term of lease are the main basis for commercial valuations, if/when any of those factors change you will see a change in valuation. Oyster update due end of March early April? So far to early for any of those factors to have been factored in just yet so I expect this time around you may be disappointed, unlisted property is NOT the sharemarket.
ps what's with all the resentment towards Oyster? I suspect you have your own agenda? Oyster has an AA rating independently audited by Fundsource, maybe you should read the report.
Market on hold is good or would have definitely slipped. Even now will slip but may be on a tolerable level but at the same time possibility of deep fall cannot be ruled out when the entire world has come to a halt.
After this full stop - world over if the situation still continues beyond than it will be crash all over and nothing will be immune irrespective of the amount of money being thrown by fed and government world over.
If wound is spreading and unable to cure have to cut that part if possible but when the virus hits Internal organs and on life support machine (Fed/Government), which we are at the moment, can only pray and be positive.
Best advise. Stayi ndoor and hold tight even with your investment as this may not be the end of the trouble time. Cash and also now Health will be King for some time to come as will only know the damage that has been done by corona tusnami after it has passed and any predection by so called economist and experts is just a guess work to run their kitchen.
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Why Did Hundreds Of CEOs Resign Just Before The World Started Going Absolutely Crazy?
In the months prior to the most ferocious stock market crash in history and the eruption of the biggest public health crisis of our generation, we witnessed the biggest exodus of corporate CEOs that we have ever seen. , Corporate insiders also sold off billions of dollars worth of shares in their own companies just before the stock market imploded. In life, timing can be everything, and sometimes people simply get lucky. But it does seem odd that so many among the corporate elite would be so exceedingly “lucky” all at the same time.
To quote Raoul Pal from Real Vision Finance on the subject of CEO mass exodus “They sorta Knew”. It was the end of the cycle.
"Shutter" each of a pair of hinged panels fixed inside or outside a window that can be closed for security or privacy or to keep out the light
Seems like it is open season on REAA today.
I will just say, briefly, that not all estate agents are arseholes.
We don't despise the agents... we despise what this profession has represented for the past few years.
And the idiotic government policies which have turned it into a speculative casino based on fake money which has torn down a generations chance at home ownership. All through lax policy and a system geared to make asset holders more and more wealthy by burning the dreams of the young and trying to placate them with "work harder and stop eating avocado on toast".
Lots of folks talking about "when this is all over"
1. We do not know how long this will take and we do not know what "over" means. This is all definitional.
2. we do not know how. much economic damage it will do and for how long
3. we do not know what depth of depression we will have
4. we do not know what extent the financial and bond market carnage will be.
In short, talking about "when" it is 'Over" is drivel.
As is speculation as to what will happen to the housing market.
The priority subject should be: how do we stop ICU beds being over-run.
Mr Trump, Mr Johnson and Bolsonaro and Putin think (or rather do not "think") that economy has to come ahead of a few boring figures on deaths, mostly of unproductive pensioners.
We cannot have the rigged system of debt being disturbed too much can we?
2020's the new 1930's?
According to TradeMe the number of mortgagees listed in NZ at the moment is 12, That's more than likely to increase in a few months.
For some reason that is not a good indicator. I did the same search about a fortnight ago and it was 31. Go figure.
There are still people who think everything will be back to normal in a month. Pre-crash share prices, house prices bouncing up, all will be business as usual in 4 weeks... Based on what? I think many so called 'experts' who managed to make some money during the absolute boom of the past few years now think they're exceptionally good investors. In reality, the were just idiots who managed to be in the right place at the right time. Even a chimpanzee could've made money in the US stock market in the last 5 years.
I personally think there's an entire generation who believe they are exceptionally good investors - especially around property. But in reality we've just had falling interest rates since the 1980's causing interest payments to fall and asset prices to rise.
IO, you clearly are a very rich person going by all of your wisdom and thoughts.
Yes things are a battle for many but I can guarantee that the bounce back is going to be big for the housing market if Banks are prepared to open up their vaults!
There will always be people that will battle but there will also be people that will do very nicely when things get back to normal, just like ChCh after the shAkes.
There have been many that have become multimillionaires since and housing is a basic requirement for us all.
Prices in ChCh are going to hold up as first home buyers will be few and far between for awhile despite them wanting to buy.
Interesting times but by you and Bec talking the doom and gloom without thinking is just blatant stupidity
"Prices in ChCh are going to hold up as first home buyers will be few and far between for awhile" - What? I don't understand your logic.
I would have thought when first home buyers are few and far between that would help stall the market as you need them keep the market going. Often those who are selling their first home are selling it to first home buyers.
Thanks TM2 - I read a lot and explore past events that are similar to current events to see what likely outcomes are.
FHB made up 18 percent of last years purchasers and overpaid to top it off.
Take out 18 percent of purchasers plus more supply now coming to market and what do you think will happen when someone has a dozen properties to choose from they will drive a hard deal.
It will be the opposite of last 10 years nothing strange about this as it is the market and remember this will be longterm as this lockdown looks very long term (12 months plus) think about tourism.
Correct IO. I recall the old post that suggested a "fez wearing monkey" could have made money in the last twenty years of the NZ property market, and it is probably true. That said there are also a lot of punters who brought shares in the dot com bust and GFC dips that have done equally well. Timing is as always...everything.
The difference is of course with real estate, it's a place to live so as you mature into adults, you look to "nest" and buy a house.
So in terms of "timing" with the real estate market, it is all about when you were born. Hence the class division along almost the same lines as age divisions.
Agree - I just think this could be the end of this cycle. Falling interest rates for the last 30+ years. When interest rates regulate - which they will - look back at the history of rates. Property prices can't go higher. If they do the only input that can push them higher is by significant wage increases, that will only happen if we improve productivity, but our real GDP per person in NZ has been dropping right? And now we're facing a significant recession or even depression if this isn't managed well.
I lived in the US through the GFC and witnessed first hand the effects when a property market goes bad. There appears to be very little awareness of what that is like in NZ by investors/FHBs. A 10% drop for them is the end of the world. Not sure what will happen if it falls by 50-60%.
Slight tangent, but I wonder if the authorities are keeping an eye on the fully furnished rental properties flooding the market and tallying them up against those listed as commercial rates payers... AirBnB was never part of the sharing economy (unlike couchsurfing) and its impact on the long term rental market was anecdotally clear, but I think we're about to get an even louder wake up call.
Completely agree.It is an interesting reflection that Air BnB (and similar) has facilitated specuvestor's swapping tenant types with motels owners. That being those generally welfare dependent now in motels, with higher value short term tenants now in houses. Technology disruption, it is no suprise that there is a push for them to swap rating models as well.
Oupsy, Greg forgot as I have repeated statements on this site and anticipated by NZ RE based economy long before the lockdown. Bindi also agreed with me stating, 'that all in place' nowadays.. for the online transactions, not much different than shopping online. The physical outing is now largely irrelevant, the online buying & selling of RE is currently on-going, taking place actively even as we're into the first day of lockdown. So? hit that 'buy now' button, or else you'll miss the gravy train. This industry is a sure bet, as Allstars in every level of governments, the Banking industry, 'independent central bank', local body councils were all gear up to cushion the impact of worldwide business suspension due to Covids - This effect shall not reach NZ shore, so we do not just anticipate this by lockdown - we already deployed all those financial moves to bubble wrap the RE industry.
Hope the RE Agents are also eligible for the wage subsidy.
Apparently yes they are
Mike, has your boss applied, or are you no longer an agent?
Yeah, but if the revenue dries up don’t know how much help it will be
more details release today
no rent increases for six months
can not terminate if non paid for 60 days now
can only terminate for damage, assault on landlord, and anti social behavior
and the TT will review all terminations
Thought anti social behaviour was the point of a lock down (sarc)
Out of interest, just to better understand property bulls thinking, what is your take on the Japanese housing market and the concept that this could be the top of the NZ market (i.e. there may not be any capital gains for decades)?
https://www.researchgate.net/figure/Japan-House-Price-Index-1993-2018_f…
Prices in NZ double every 10 years. It’s an inviolable doctrine of The Church.
Japan has lots of lessons for NZ. BUT....very different countries and societies.
Assuming NZ's population grows steadily, then that is a major difference that will underpin demand.
My own view is that we'll catch a bit of the 'Japanese disease', but only a bit. Prices may be 30-50% (maximum) higher in 10 years than they are now.
But certainly not 100% (double) as per The Church.
Read that families in central Tokyo were paying house price to income ratios which reached 13x.
Today, on 26 March, 2020 alone, + ~1000 listings on homes. Co . Nz
Anyone in stock market should take advantage of relief rally and sell book to profit or loss as will get another opportunity to buy low.
Housing market has not yet even started the process as will be hit 2 or 4 months into recession or from world crashing.
Repeating : Housing market is today Where Stock market was about a month before AND housing market will be in a month where stock market is today.
If anyone has a doubt is a...........living in fool's paradise.
It is very clear so everyone should be carefull as cash is king besides health in today's time.
Wait and watch as opportunities will come in near future to buy stock as well as house BUT not Now.
Wait n Watch.
Well Stu? you forgot to factoring this for NZ RE industries: Every govt apparatus, local govt./councils, PM & ministers, central bank, bwankers/banks, line of Dames upon Sirs, line upon line of CEOs, managers, opposition parties, etc. etc. are All invested heavily into RE. - Greed/Capitalism at it's best, when facing downturn will always employed Socialism in the name of 'Neo-Liberalism stability' - aka future loan borrowing/Tax payers/bail out - honestly, matey .. think about it in silent lucid mindfulness,.. even when the whole world forces into the same vortex oblivion - Those in that upper echelon actually will act 'sub-consciously, we called self preservation', no one liked to die as a hero, everyone like to live.. as a hero - Watch it play in slomo, the OCRs, Banks interest, Mortgage holiday, rate hike froze, rent froze (tui ads), loan subsidy (for whom?), hardship handout (where it goes?), QEs, delay/abandon deposits guarantee, delay/abandon Bank CAR, lowering CAR liquidity, LVR removal, FHB lowering level, waves upon waves of migrations based on capital assurances to launder it within RE etc..all bound to happen, all stars always aligned in little planet NZ for golden RE industries.. the next to happen in around 2022? is the obvious.. OBR.
I think someone was asking about online auctions a few days ago, anyone interested RW Glenfield are running online auctions today https://rwglenfield.co.nz/upcoming-auctions
Which is slightly mind boggling to me that anyone would want to buy in this economic climate.
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