Residential auction activity was reasonably buoyant in the last week of May as the market started building steam.
Interest.co.nz monitored 137 auctions around the country in the week of May 25-31, compared to just 79 the previous week.
But there is still some way to go until numbers get back up to where they were a year ago, with 210 auctions monitored in the final week of May last year.
However while the number of properties being offered at auction remains below where it was a year ago, the number of properties being sold at auction is higher, both in terms of percentages and absolute numbers.
Interest.co.nz recorded 82 sales at the auctions that were monitored in the week from 25-31 May this year, which gave an overall sales rate of 60%. That just pipped the 81 sales that were recorded in the week from May 27 to June 2 last year, which gave an overall sales rate of just 39%.
Prices also appear to be holding their own. Where interest.co.nz was able to match properties' selling prices with their rating valuations (RVs), exactly two thirds (67%) of the sales in the last week of May achieved prices that were higher than their RVs, 30% achieved prices below their RVs and 3% were the same as their RVs.
The latest figures suggest the market has at least remained steady since it emerged from lockdown, although the numbers do come with a caveat. There is still a backlog of unsatisfied demand that built up during lockdown and although the number of properties coming to market is rising week by week, it will likely take several more weeks before it has found its level.
So it will probably be next month before we get a clearer picture of where the market is sitting, and it may take several months before the full impact of the expected recession becomes apparent.
Details of the individual properties offered at the auctions monitored by interest.co.nz and the results achieved, are available on our Residential Auction Results page.
The comment stream on this story is now closed.
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125 Comments
The prices will "hold their own" whilst the government is propping up peoples wages. The whole economy at this point is fake. Reality will kick in soon enough!
Its true , Government is propping up the whole edifice
Banks are giving Mortgage payment "holidays "
This crisis will outlast both the Government's ability and willingness to keep paying ............and also the Banks willingness and ability to earn no interest income from their assets ( loans )
Boatman
Where are you coming from????
" . . . also the Banks willingness and ability to earn no interest income from their assets ( loans ). . . "
The current mortgage holidays are not indefinite, and recent data shows that the overwhelming majority of borrowers have reverted to interest only. For those not currently paying interest, the interest is simply accumulating and underwritten by the government. The banks will NOT earn no interest.
Banks still need cash flow.
I'm pretty sure that was his main point, the banks are currently earning interest on all the loans that are P&I and all the loans that are IntOnly.
But cash flow takes a hit temporarily when customers are on mortgage holidays.
Clearly, however Boatman is way off base, banks are earning plenty of interest. As to cash flow, that too is mostly intact. Its just drama for dramas sake. The banks are not in trouble.
Don't bet on the banks not being in trouble. They are already increasing their loss provisions; with unemployment probably around 6% by now, and the situation still continues to deteriorate.
The reserve banks job is try to instill confidence in the market for deposit holders and consumers, as without this liquidity dries up. Wait until unemployment gets to 15%; and it will. The States unemployment has risen by 40 million in the past eight weeks, and that aren't no easy fix.
NZ may come out of it earlier, but have the burden of massive private and public debt to contend with. This will have the effect of reduced spending for an extended period, as more goes on principal and interest debt repayment. Welcome to the new norm.
I'm gonna need evidence Mr Samaritian. The fact you referenced the USA indicates you are not making use of a balanced assessment. For example, you claim NZ will have the burden of 'massive... public debt', can you clarify what constitutes 'massive'?
The housing market is proving more resilient than many people here thought possible.
TTP
tothepoint, or Tim The Paster?
The same comment no matter the world's circumstances.
Hi RickStrauss,
Just a few months ago, there were heaps of people here saying that by winter the housing market would have fallen flat on its face - and there would be cheap houses galore for sale.
THAT HAS NOT HAPPENED.
Thus, my comment above is accurate.
TTP
You keep referring to it as a housing market when in reality it’s a government, central and retail bank backed ponzi.
If it were a free market, without distorting supports (mortgage holidays and wage subsidies), it would be a complete train wreck by now.
But I guess yes you’re correct...rightly or wrongly. Well done TTP
The housing market is not resilient but the RBNZ's attempt at keeping the facade going is.
Yes definitely, just like a rubber band. Stretch it far enough and it will snap (and fling back to the eyes)
Or fling forwards. Do you know how rubber band snapping works?
Grumble grumble ponzi scheme grumble
Yeah. If the S&P 500 haas just had the greatest 50-day rally in history, we should be less concerned about renewed vigor and activity in housing.
The markets are all good.
I'm gonna start buying up all the Monopoly sets in the country. At this point Monopoly bank notes should be worth more than the real ones.
Green shoots appearing
Its mold.
Did you mean 'lovely victorian character, the handyman's dream'?
Green shoots my backside !
That's a bad curry, for sure.
Possibly weeds.. Roundup (aka recession) will put an end to it.
Looking at the latest auction results for Auckland and noticed that most were selling just on or below their 2017 RV value. Some making large price drops in the more upper price brackets. Example: 5A Waiata Avenue, Remuera, Auckland. Rating Value: $4,100,000 (July '17), Sold for: $3,800,000
To be fair, CV in the $2Mn+ range can be wildly inaccurate. I've seen several houses being sold in my area $1-1.5Mn below their CV last year.
CJ
CJ099 just likes to cherry pick.
Then here's some more cherries for you from 4th of June auction:-
1/359A Hillsborough Road, Hillsborough, Auckland Rating Value: $1,100,000 (July '17) Sold for: $800,000
1 Kearns Drive, Hobsonville, Auckland. Rating Value: $1,225,000 (July '17), Sold for: $1,255,000
81 Whytehead Crescent, St Heliers, Auckland. Rating Value: $1,725,000 (July '17), Sold for: $1,725,000
1/13 Pannill Place, Oteha, Auckland. Rating Value: $700,000 (July '17), Sold for: $685,000
11 Emlyn Place, Torbay, Auckland. Rating Value: $1,125,000 (July '17). Sold for: $1,100,000
989 East Coast Road, Long Bay, Auckland. Rating Value: $1,700,000 (July '17), Sold for: $1,610,000
20 Sidney Wallingford Way, Hobsonville, Auckland. Rating Value: $640,000 (July '17), Sold for: $555,000
813/5 Howe St, Freemans Bay, Auckland. Rating Value: $720,000 (July '17), Sold for: $626,000
Question ?
Who has bothered to read the 113 page Auckland Emergency budget ?
Its a hard read , and not well laid out thus making it difficult to rationalize , and it gives various scenarios, some of which are either optimistic or downright stupid .
I often wonder what tint colour the glasses of civil servants are ?
Clearly ATEED is an humungous waste of ratepayers money......... it always has been . You and I pay for it , including eye-watering executive salaries and SUV cars for those execs .
Why not shut the whole scam down right now , and let the tourism industry promote itself .
Watercare should fall directly under council instead of being a separate expensive beauracracy with its own heirachy and empire .
Auckland Transport is a disaster ...........in absolute terms, totally ineffectual and useless .......... . If we shut it down today and fired everyone in AT , it would make no difference to traffic or congestion in Auckland .
AT are the most hopeless bunch of lazy useless people we have in the entire country , outside of the prison system .
I havent read the budget only because you cant polish a turd. AC are out of control on their financial mismanagement.
I did however respond to the "public consultation" re their choice of 2.5% or 5% rates rise. 5% rise in economic armageddon ? How about a choice between 0% or a 2.5% reduction in their spend ?
If thousands of businesses are taking hard decisions why the f#~k cant the council get it through their pigsh#t thick brains that people dont want them to burn through our money at ever increasing velocity ?
You can't polish a turd, but you CAN roll it in glitter...
you'd need disposable gloves and that would be environmentally dysfunctional :)
https://www.treehugger.com/culture/manure-sculpture-nick-smith-in-the-s…
looks reasonably shiny to me..
So the council should sack a whole lot of people and cancel a whole lot of infrastructure investment to avoid economic armageddon? Seems back to front to me...
If the sackings started at the top, it would benefit the majority of the population.
Assuming those people don't do anything (unlikely) it could save us each a dollar or two a year.
To put it into perspective a 5% rates rise would cost our household $2.50 a week. That seems like a much better economic outcome than Council austerity, job loses, projects cancelled, etc.
Half an Auckland flat white per week. If landowners would just cut down on their smashed avo, sky telly and flat whites there'd be no questions of austerity.
Agree. Live within their existing means not lean on their ability to tax us. Mind you, it's a lefty council so taxing is their go to option.
There are 83 plus people in AC earning more than 200K salary. Their job is to write such document to a unreadable point!
they may be getting paid it, not sure earning is the right word
Well FOMO is a big factor and should wait till October/November to know the damage done by panedemic.
If by end of the year market is same as now than can assume that the market is one way street in NZ though have doubts.
Many articles, are aimed at giving the impression that we Kiwis are a debt-hungry bunch determined not to save and focussed instead on owning as much property as possible. The underlying theme behind the article and many others driving negative housing commentary is that gaining wealth through rising house prices is immoral and God will eventually strike down miscreants owning property with a collapse in prices. Those smart-alecs down the street will get their comeuppance.
Nicely said Tony Alexander
This Tony Alexander character is a bit of a one-trick pony in my opinion
Do you read his weekly "Tony's View"? Are you suggesting you have a better grasp on the NZ economy than him?
Not too hard to have a better grasp on economy than someone that is blind by his own interests.
Com'on, T Alexander has been head economist for BNZ for over 20 years, he is now an independent economist. Your comment is for no other reason than you not liking his views. Of course he is a far superior economist than you or me
You are talking about some guy that used to justify house prices because of things like toilets are now inside (unlike 30 years ago when we all lived in caves) and referred __everyone__ at a conference for a special rate at BNZ. He was clever enough to jump off the boat on time though.
So who do you listen to for economic news?
It’s Tony’s forecasts and he tends to be more bullish on property. Wonder how much of his earnings come through speaking at Property Association meetings and One Roof opinion pieces. Cameron Bagrie worked as the ANZ chief economist and both him and Gareth Kiernan have a much more pessimistic view of housing and the economy
C Bagrie is good too but he runs bespoke analysis. So who do you listen to for economic news?
I own an IP and hope to buy another in the next 3-5 years so I’m not anti property. I do think that Tony Alexander, Bindi Norwell and Peter Thompson all tend to be pro property because their livelihoods depend on it. Much of the market is driven by irrational sentiment. I think the info metrics economists and Cam Bagrie are impartial as they don’t have a direct interest in property
J.C.
You will also find it is also very easy to be a couch potato slagging of the All Blacks.
Sure but TA is no All Black. In fact his employer parted ways with him because his rhetoric didn't fit with the brand. Like I said. One-trick pony.
You are believer / follower of Tony Alexander... That says it all.
Hello, here we go ago again. The anonymous interest.co key board warriors slagging off again.
Taimaiakka0 you need to brush of that CV - you seem to have all the self confidence to be anything you want. You surely could fill the role of a bank chief economist and put them right . . . or how about RBNZ governor?
That says it all. :)
At this point any of us could fill the shoes of an RBNZ governor. Easy job, just push the 'lower rates' button every month or two.
CourtJester
Great comment. Sarcasm at its best.
Ahh, simplistic ignorance has much going for it.
Cheers :)
You really had to add an insult at the end, right? Makes you feel more comfortable about yourself.
We see similar carry on with regard to the opinions of experts in epidemiology and climate here on Interest, in recent times.
tamakkiki "You are believer / follower of Tony Alexander... That says it all."
Yes I think T Alexander has a great understanding of our economy, yet he has his feet firmly grounded. Who do you follow for economic advice?
Nicely said Tony Alexander...
Now can understand from where your views come from.
My view too is Wait and Watch specially in a situation where no one knows what is comming next and with world coming to a stop except money printing by governments, which too is more to protect themselves than economy.
More dangerous than before.
At the same time, agree that one should not wait for ever but having already waited for so long, no harm to FHB to wait for few months more as panademic which is a crisis for many may turn out to be an opportunity to them, if their jobs/ business are safe.
Finally it is your money - your wisdom - your risk - your decision which may affect your and your family's future OR is it by trying to convince other that market in NZ will not fall is actually thinking aloud and trying toconvince self - more than others.
It is interesting that the property price bulls are now complaining about media articles that are reporting expectations of property price falls, whilst those very same people were happy to accept media articles reporting expectations of property price increases.
Remember those articles reporting commentator's projections of property prices doubling every 10 years, there is a housing shortage so property prices are rising, etc?
1) https://www.stuff.co.nz/life-style/homed/119989487/heat-spreads-around-…
2) https://www.stuff.co.nz/life-style/homed/300025976/qv-delivers-stark-wa…
Hi CN do you regard me as a property price bull? So can you tell me where I have complained as you describe.... good luck
Yvil - If these people cannot see the value in Tony Alexander's column you know as I do they are blind.
If anyone on here took the time to listen to such a sensible commentary they would be wealthy people rather than angry people pissed off they have missed the boat.
I have followed Tony for 20 odd years along with other economists and if people chose not to follow him fair enough but they are missing out on valueable key info to make informed decisions.
I have just paid for his new indepth publication that starts soon.
If you don't wish to follow him or anyone else for that matter grow up and stop being keyboard bullies !
"The latest figures suggest the market has at least remained steady since it emerged from lockdown"
How do all the commenters reconcile this statement with them knowing for absolutely sure that the RE market is gong down, only question being "by how much will it crash?"
I think I know the answer, it's the same as it has been for the last 30 years… "just wait another 3 months… just wait…" It's been 360 months and we're still waiting
Mr Orrs arms are getting tired. He's been spinning those plates for a long time now. He has no energy left.
Yvil you may have some well wishers and supporters (admire u r new fond money) here, but actually u r nothing when compared to some wealthy people in NZ I know. Real wealthy Kiwis don’t tends to flaunt or show off like u, so zipppppp.....
Why do you say I am new found money?
Wasn't aware we had a global pandemic/economic lockdown prior to this event in the past 30 years.
Nor did we have a GFC before 2008 or bird flu before… or swine flu, HIV etc…
Are you seriously comparing this crisis to the GFC? This crisis makes the GFC look like a speed-bump... go and look at the comparative US jobless figures for some perspective.
Didn't prices drop after the GFC, though? And considering this is predicted to be worse than the GFC, it seems reasonable to think that prices will dip this time too.
Fair comment, yes prices dropped almost 10% from the top to the bottom after 2008 and yes it is absolutely reasonable to expect some price drop this time too. Prices are not dropping yet though, as many commenters "know" they are and dropping in the future is not the same as crashing
Right, but if the question is, is it reasonable to wait three months? then it seems the answer is obviously yes, given the information we do have.
On a slightly different topic, one thing I'm always baffled about is people who say things like 'it doesn't matter if prices drop, because they'll go back up again eventually.' It matters a lot to me if prices drop - because if they drop by say, 10%, then that means essentially I've spent $50k I didn't need to spend (and that's not even taking into account the interest on that 50K accross the lifetime of the loan). That's a lot of money.
Hi al, I suppose you never traded, theoretically you're right, if you can buy 10% cheaper you're better off. In the real world tough, you don't know if prices are going to go down 10% and when? and if they do, you may wait till they drop another 5%, except they could bounce 5% up, then you think "bummer I should have bought before, I'll wait till they get back down 5% again" and so on… forever… That's the reason why, for your house, if you can afford it, it's best to buy now (whenever now is), ride out the dip (if it happens) smile, enjoy your house, it will be worth considerably more than you bought it for in 10 years time
The view you're expressing seems to be yes, it matters, but you can't really do anything about it because none of us can really predict the future. I think that's right, up to a point. Except I'm in this situation: I have a place to live (with family - which is not practical long term, but is certainly doable for the next 6 months). I have a good deposit saved. So there's not a practical reason why I should rush. I could buy now, yes - but it's no skin off my nose to wait 3-6 months, it seems incredibly unlikely that prices will go up, and it seems quite likely that they will go down. So in my position, there seems to be no reason to believe its best to buy now.
There's a reason that the slippery slope argument is classed as a fallacy, and it seems to me like you're committing that fallacy above (there's no reason to believe that because someone chooses to wait a bit now, that means they'll just end up waiting for ever and ever).
Maybe it's just me. But when someone tells me to buy property, and that person has just personally sold their multi-million dollar property, I become very skeptical. Actions speak louder than words in my judgement. I may be wrong, but I choose to err on the side of caution and choose to listen to the adage "better to be safe than sorry"
Al, I like your reasonable approach and yes I agree, whilst no one can tell for sure where the housing market is going, chances are skewed towards down rather than up for at least the rest of 2020. Unlike what others say, I have nothing to gain by talking the market up or down. I agree, wait for now but make darn sure it doesnt become an ingrained attitude and don't listen to many on this site who have been proclaiming house price crashes for years because they'd like to buy a house at yesterdays prices. I sincerely wish you the best when the time is right for you
Good to see you can change your mind in response to evidence Yvil. 'Now is always the best time to buy!' Is pretty dangerous and irresponsible advice to be giving right now.
Yvil, are you claiming any of the government subsidies in your motel business? If so, might pay not to slag them..
Yes, I claimed employee subsidy (which I paid in full to each employee), April was terrible, getting better now.
How on earth do you make a connection between my comment on the Real Estate market and slagging the government ???
Poor tax payers propping up the already rich. What a fair country this is?
What an silly comment, I made it very clear I pay the full subsidy to my employees. Please think before you write
From your past comments
Balanced article by Greg N.
I understand it should be wait and watch as more chances of getting a beter deal going future than now. Also buying now more chance of equity / deposit being wiped out.
Prime Auckland/Wellington house prices will be flat to slightly higher by the end of the year;
1) So many are sitting on the sidelines willing and preying the market to go down
2) Recent sales have been very punchy (not CBD apartments, only an idiot touches them)
3) Kiwi's moving home
4) Record low interest rates
5) Equity markets have rebounded
It has the feel of a short market.
Sincere question - if this happens (flat or slightly higher prices), in the face of everything that's happened, what keeps NZs best and brightest youth here? Family, relative safety and the scenery? I just don't get why they wouldn't go somewhere with much higher pay and lower house prices (at least relative to income), and live somewhere exciting. It just seems all NZ offers is the promise of more debt.
Well if you think about it, most of the areas in the world that have or should I say had nice economies with good wages and affordable property, have been inundated with foreign speculative investors and money launders over the last decade or so that massively increased prices (Sounds familiar). I guess there's not much places left to run to these days but the grass will always look greener on the other side of the fence.
Saying that some countries that have got themselves in to a big property ponzi scheme, seem to want to bite the bullet and let prices fall to affordable wage earner levels. Canada is currently being more stringent on its mortgage lending. According to this recent article, Home buyers will need a higher credit score, there are new policies lower the maximum debt service ratio. And their increasing of hurdles for buyers, it’s to prevent default risk (and taxpayer liabilities) from climbing.
Better Dwelling article: Canada’s National Housing Agency Tightens Lending Ahead of Forecasted Price Declines.
https://betterdwelling.com/canadas-national-housing-agency-tightens-len…
That's part of the problem, Kiwi's do go abroad and do well and then come home cashed up. They come home because they want to be close to family and they realise that once you've done the travelling and moved to the family stage, NZ is hard to beat.
Not with all these water restrictions, crimes and traffic jams in Auckland,also if they have been oversea for many years. They could have already established their friends circles and family there. They might come back for retirement. But rather than this, once they went out, I dont see any points that they should come back now with all these high housing price, lacking of infrastructures.
I just came home from abroad, because my visa ended and I didnt want to pay 3k for a new one. All of my friends coming home due to c19 are the younger ones, jobs in hospo have ended, travel prospects have ended, want to go home to mum and dad. The older, more cashed up, friends of mine are sticking it out, realise that salaries are higher and prices cheaper where they are, they have job security, not to mention great friends and better social life.
I just came home from abroad, because my visa ended and I didnt want to pay 3k for a new one. All of my friends coming home due to c19 are the younger ones, jobs in hospo have ended, travel prospects have ended, want to go home to mum and dad. The older, more cashed up, friends of mine are sticking it out, realise that salaries are higher and prices cheaper where they are, they have job security, not to mention great friends and better social life.
Good question Northman, some will go live overseas
Prime Auckland/Wellington house prices will drop significantly by the end of the year;
1) Most are just renting looking at an un-affordable market until it hopefully cools down.
2) We cannot trust recent sale numbers are the effect of COVID-19 is still masked by an economy supported by subsidies.
3) Even some Kiwis are returning numbers do not make up for the drop in immigration numbers and students that did not come this year.
4) Interest rates are still high compared to many countries, and recent drops just reflect how hard it is for lenders to get one.
5) Equity markets have rebounded, as they always do when there's a market crash yet they tend to have more sustained falls after a while.
6) Incomes have not increased significantly.
7) A number of households are already in mortgage stress.
8) Foreign investors ban.
Stop listening to the housing lobby media, they keep repeating the same arguments in favour of their own interests, which have been exposed to be wrong quite a long time ago.
b21
Great to see a substantiated comment.
Although I don't agree with you, unlike most DGM bunnies they simply seem to have a lucky number (especially - 50%). So great you given the situation some considered opinion.
Respect to you.
Agree that AKL CBD apartments are high risk. Wellington may be more resilient.
Prices and sales will be little changed in May.
This is because all held up deals need to go through plus you will get extra sellers trying to get sold before shit hits the fan in July-Oct period. Meanwhile lots of folk will predictably say there is nothing to be concerned about. When wage subsidy drops away, we will see changes, down.
Agree with you mikekirk29.
With world economy in turmoil and government printing money like never before, to expect that housing market in NZ will be immune to all the destruction is being ignorant or stupid.
Low interest rate is the new norm for long time to come and the very fact that interest rates are so low suggest the dire situation, we all are in.
Can understand many have vested interest and wants house price and stocks to keep moving up BUT only if If wishes were horses, beggars would ride.
Due to the wage subsidies and mortgage holiday, I don't expect any significant changes before December.
Lowest mortgage interest rates in history, mortgage holiday, an income relief payment for job loss, a wage subsidy and a lack of supply means house prices, for now, are not going down and certainly not before the September election.
Ultra low interest on deposits and ultra low interest on mortgages will keep houses rolling over. NZ's addiction to debt and houses further disconnects incomes from house prices. House price correction will only happen in NZ once all options to keep house prices increasing or stable have been exhausted. We should see National even Labour talking about immigration soon!
Do you consider low interest a 25% of interest paid?
Well this is what you would pay on top of the principal for a loan at 2% p.a to pay in 30 years.
Let's put things into perspective.
That looks, very nearly, like free money to me?
How does a Government endorse immigration when unemployment will be at double digits? Can’t wait for Winston to start playing this drum heading into September
The 'stark evidence of a crash' continues to mount.
The tug of war over house prices.
Naturally those with heavy stakes in the market want/see up. Naturally those that see the economic impact of the economy, global, not just our nation, are calling prices down.
However, what about housing affordability, wasn't this supposed to be an aim of the govt? What about addressing the growing imbalance between the rich and the poor, addressing homelessness and poverty, weren't these all stated objectives of the govt?
How on earth are any of these to be addressed unless property prices come down?
A crises comes along, outside of anyones control, which should cause havoc with the economy. Yet, no, those in control of the fiat levers of commerce act with incredible speed, and do everything they can to "save" the economy, or put more simply, carry on with falsely inflating stocks and property. The rbnz, and by extension, the nz govt, have inadvertently shown their true colours. Whatever the cost.
What a joke.
The ideal standard to correct the imbalance is to boost wages and hold housing stable for long periods of time, pretty sure they will fail but hey, who knows, maybe we get lucky this time.
For every $100,000 you are paying only $50 per week in interest!
So for $500,000 borrowed you are only paying $250 per week interest.
Buy a reasonable first home for $400,000 with no deposit and interest payment is only $200 per week
Rates approx 40 per week max and insurance approx 25 per week so cost is $265 per week without principle payments if you want to pay or have to.
Rent achieved on a property like this would be around the $450 per week so you are netting roughly $185 per week give or take!
If you have 20 properties say, then you are grossing $200k less other expenses and that is if you are just starting out now.
Most investors haven’t got $400k borrowed on Each of their rentals if they have had them a while maybe half of that, so you can double that gross figure!
And you think that prices are going to be dropping everywhere in NZ????????
TM2, the property game is a zero-sum game. Whatever you gained in profit from rental incomes, someone else loses out.
You can boast all day about how much money you get out of investing property, that handsome amount of money is someone's misery..
Sleep tight!
Chairman, that is a cop out saying that profit from renting is someone else’s misery!
Many landlords in Auckland have been subsidising their tenants accommodation for many years, and now that there is a profit in those ones in Auckland, you are saying that it is the tenants misery???
My point I have made should be pretty clear to yourself!
You can buy a home a lot cheaper than renting at the moment and yet all these gloomsters on here are saying that all property is going to be dropping by up to 50%!!!
For those that want to own property in NZ, there are any ways of doing this if only they asked people who can help them,
If they are not able to buy now or in the near future, then I would suggest that they probably never will!
What I do know is that property is pretty popular in ChCh at the moment with plenty of bidders at Auctions and many first home buyers out there.
Most people are not going to be selling with interest rates so low, unless they want to trade up or down or something bigger or smaller, rather than being squeezed
This idea that landlords have somehow been 'subsidizing' tenants is so ludicrous its actually offensive. Landlords who choose to buy a property knowing that the market rent is unlikely to cover their weekly costs aren't doing it out of the kindness of their hearts.
Ok, so it is alright for the property owner to be paying more interest per week, than the tenant is paying in rent?
But it is not right that the Tenant pays more rent than the property owner is paying in interest?
People that provide accommodation to people deserve any profit that they get from their investment or why would they bother and then there are going to be that many on the streets, as the government is not great at providing accommodation!!
Yes, its alright for the property owner to be paying more in interest than the tenant pays in rent. Why wouldn't it be? That is a circumstance a property owner can easily avoid if they choose to, by either not buying an investment property in the first place, waiting til they have a larger deposit before they go so, or selling the property they own.
Also, who said it is 'not right' that the tenant pays more than the property owner pays in interest? Not me.
You seem to be both missing the point and trying to make out that I said things which I did not say.
My point is that it is very affordable to own now in NZ!
The affordability report that comes out on here will certainly show that!!!!
Hi TM2, ok, so I see your point on the figures you lay out. I take it that the loan in this situation is interest only? Aren't interest only generally 5 year term?
So, what happens should the capital value begin going down?
Refinancing might not be an option.
Presumably the capital input was 30%+, so values would have to drop a long way.
I admire your certainty of view.
Chairman, how is the brisbane property market, slump or jump?
Flat but jump in inner city
Wow no covid cliff. Aussie doing well
So many of the comments here focus on those that want houses, but only if they can get them at prices well below Pre Covid levels. While the logic makes sense, is the market telling us something different?
I expected an economic apocalypse. I took cash out of the bank, invested in Kiwi Bonds ($335 per year after tax per $100,000 on deposit), and am well out of the money on my Gold in NZD terms. Meanwhile the Sharemarkets are up, there’s news that spending in NZ is not that much below normal and a house sold near me for more than $3.2m, on Tuesday. I can counter with all of the arguments over tourism, redundancies etc but I’m starting to wonder whether the smart money has beaten me yet again. If it has, some here will be waiting a long time to get someone’s granny’s elevated North facing detached house on an 800m2 section in Auckland for 3x salary.
Those days are gone Ex, so has retreating to gold in times of strife.
I'm currently enjoying some of my longer-term investments, one bottle of Bordeaux at a time. I also put some liquid assets into Kiwi Bonds, but you're doing better than me. When the market picks up (and if I'm sober) I'll look at property again, most likely in a place where 1 X property equals 2 X Auckland salaries .
It is not unwise to be buying hard assets now, as a hedge against massive money printing. Buy, hold and forget about all the doom and gloom merchants on here and especially the media commentators (click bait writers). None of the predictions have ever been accurate. Short term loses for some perhaps if their situation changes. But the ship will be steadied, they won't let it sink like all you seem to be hoping for.
Hopefully you are right. Who do you think are the ones who will steady the ship, and what do you think they will do?
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