The average value of all homes across New Zealand increased 7.6% over the last year, although values in Auckland have lagged the rest of the country.
According to property data company CoreLogic's House Price Index, the average value of all NZ homes was $743,678 in September, up 7.6% compared to September last year and up 0.8% compared to three months ago.
However it appears that value growth has been stronger in provincial and rural areas than it has been in the main centres.
Several provincial centres have recorded strong average value growth of 3% or more over the last three months, including Hamilton +3.2%, Rotorua +5.2%, Taupo +4.8%, New Plymouth +3.4% and Palmerston North +4.4%.
In some rural districts the growth in values has been even higher, led by Kaikoura +11.1%, Clutha +9.8% and Rangitikei +9.0%.
However across the country's main urban areas, the increase in average residential property values was just 0.3%.
Value growth was particularly weak in Auckland, where the average value declined by 0.4% between May and August, with the biggest decline occurring in North Harbour where it was down by 2.3%.
Auckland was the only main centre to record a decline in average values over the last three months, although value growth in other centres was relatively modest, with average values across the Wellington region up 1.7% while Wellington City recorded a rise of 1.3%.
In Christchurch average values were up 0.7% and in Dunedin there was no overall change compared to three months ago.
Unsurprisingly the biggest fall in average value over the last three months occurred in Queenstown-Lakes where it was down by 4.3%.
See the chart below for the average values in all districts and cities.
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| CoreLogic House Price Index | ||||
| September 2020 | ||||
| Territorial authority | Average current value | 12 month change% | 3 month change % | |
| Far North | 498,631 | 3.9% | 0.7% | |
| Whangarei | 589,688 | 8.6% | 1.7% | |
| Kaipara | 597,552 | 9.3% | 4.8% | |
| Auckland - Rodney | 985,539 | 4.7% | 0.3% | |
| Rodney - Hibiscus Coast | 957,785 | 3.6% | -0.1% | |
| Rodney - North | 1,012,482 | 5.4% | 0.6% | |
| Auckland - North Shore | 1,235,527 | 5.3% | -0.9% | |
| North Shore - Coastal | 1,415,620 | 4.8% | 0.0% | |
| North Shore - North Harbour | 1,180,927 | 5.1% | -2.3% | |
| North Shore - Onewa | 1,006,955 | 6.8% | -1.2% | |
| Auckland - Waitakere | 863,707 | 6.2% | 0.7% | |
| Auckland - City | 1,262,799 | 3.9% | -1.2% | |
| Auckland City - Central | 1,102,079 | 2.9% | -0.9% | |
| Auckland City - Islands | 1,163,305 | 5.3% | 0.5% | |
| Auckland City - South | 1,135,886 | 5.5% | -0.3% | |
| Auckland_City - East | 1,579,032 | 2.9% | -2.2% | |
| Auckland - Manukau | 945,550 | 6.7% | 0.6% | |
| Manukau - Central | 735,323 | 6.2% | 1.7% | |
| Manukau - East | 1,210,775 | 7.8% | 0.7% | |
| Manukau - North West | 822,617 | 6.3% | 0.1% | |
| Auckland - Papakura | 740,029 | 6.2% | 1.6% | |
| Auckland - Franklin | 711,065 | 5.9% | 2.2% | |
| Thames Coromandel | 836,259 | 9.3% | 3.4% | |
| Hauraki | 465,188 | 9.1% | 3.0% | |
| Waikato | 533,160 | 9.3% | -1.2% | |
| Matamata Piako | 528,028 | 7.6% | 4.5% | |
| Hamilton | 647,777 | 9.7% | 3.2% | |
| Hamilton - Central & North West | 608,988 | 12.4% | 3.7% | |
| Hamilton - North East | 787,131 | 6.9% | 2.6% | |
| Hamilton - South East | 601,129 | 10.1% | 2.4% | |
| Hamilton - South West | 580,378 | 9.9% | 3.3% | |
| Waipa | 659,163 | 9.6% | 4.0% | |
| South Waikato | 315,944 | 22.0% | -0.3% | |
| Taupo | 598,355 | 11.0% | 4.8% | |
| Western BOP | 721,404 | 8.9% | 3.3% | |
| Tauranga | 795,182 | 6.4% | 0.1% | |
| Rotorua | 547,473 | 15.0% | 5.2% | |
| Whakatane | 531,165 | 9.8% | 2.0% | |
| Kawerau | 303,044 | 15.1% | 7.5% | |
| Opotiki | 373,196 | 5.2% | 4.3% | |
| Gisborne | 465,719 | 26.1% | 8.0% | |
| Hastings | 596,607 | 11.5% | 1.5% | |
| Napier | 620,046 | 12.1% | 0.9% | |
| Central Hawkes Bay | 436,358 | 12.9% | 3.0% | |
| New Plymouth | 526,168 | 10.2% | 3.4% | |
| Stratford | 356,366 | 21.2% | 6.3% | |
| South Taranaki | 290,287 | 14.7% | 1.4% | |
| Ruapehu | 272,214 | 23.6% | 4.9% | |
| Whanganui | 374,474 | 27.8% | 1.5% | |
| Rangitikei | 320,727 | 30.8% | 9.0% | |
| Manawatu | 481,485 | 18.0% | 3.0% | |
| Palmerston North | 531,002 | 15.2% | 4.4% | |
| Tararua | 292,769 | 22.1% | 0.3% | |
| Horowhenua | 448,012 | 17.0% | 2.2% | |
| Kapiti Coast | 688,424 | 12.3% | 2.8% | |
| Porirua | 710,763 | 16.2% | 2.8% | |
| Upper Hutt | 661,211 | 15.1% | 3.4% | |
| Hutt | 697,171 | 14.7% | 1.6% | |
| Wellington City | 899,358 | 8.7% | 1.3% | |
| Wellington - Central & South | 888,152 | 8.4% | 1.7% | |
| Wellington - East | 965,257 | 8.9% | 1.7% | |
| Wellington - North | 828,150 | 8.6% | 1.1% | |
| Wellington - West | 1,017,304 | 9.1% | 1.1% | |
| Masterton | 442,605 | 11.4% | 0.6% | |
| Carterton | 496,900 | 12.9% | 4.2% | |
| South Wairarapa | 607,813 | 13.0% | 5.0% | |
| Tasman | 647,455 | 6.4% | 2.0% | |
| Nelson | 665,798 | 5.8% | 0.7% | |
| Marlborough | 536,256 | 10.6% | 4.4% | |
| Kaikoura | 472,636 | 5.2% | 11.1% | |
| Buller | 208,221 | 4.1% | 0.2% | |
| Grey | 230,363 | 5.4% | 0.4% | |
| Westland | 275,655 | 4.3% | -2.5% | |
| Hurunui | 418,749 | 5.6% | 3.2% | |
| Waimakariri | 469,805 | 4.1% | 0.9% | |
| Christchurch | 522,057 | 5.0% | 0.7% | |
| Christchurch - Banks Peninsula | 552,939 | 6.6% | 2.6% | |
| Christchurch - Central & North | 609,761 | 4.8% | 0.4% | |
| Christchurch - East | 395,749 | 4.6% | 0.7% | |
| Christchurch - Hills | 709,894 | 4.9% | 0.0% | |
| Christchurch - Southwest | 497,464 | 5.0% | 1.1% | |
| Selwyn | 569,967 | 2.5% | 0.4% | |
| Ashburton | 386,672 | 7.8% | 1.7% | |
| Timaru | 394,170 | 6.1% | 0.7% | |
| MacKenzie | 582,217 | 12.6% | 2.7% | |
| Waimate | 279,480 | 5.6% | -2.7% | |
| Waitaki | 368,863 | 14.0% | 4.6% | |
| Central Otago | 596,900 | 11.6% | -0.4% | |
| Queenstown Lakes | 1,141,643 | -4.2% | -4.3% | |
| Dunedin | 547,429 | 15.6% | 0.0% | |
| Dunedin - Central & North | 553,792 | 13.6% | -0.9% | |
| Dunedin - Peninsular & Coastal | 500,103 | 15.4% | 1.3% | |
| Dunedin - South | 527,943 | 15.1% | 0.5% | |
| Dunedin - Taieri | 575,491 | 17.4% | -0.1% | |
| Clutha | 307,031 | 27.1% | 9.8% | |
| Southland | 359,070 | 13.5% | -3.2% | |
| Gore | 289,902 | 16.9% | 2.9% | |
| Invercargill | 360,338 | 14.7% | 1.2% | |
| Auckland Region | 1,078,326 | 5.0% | -0.4% | |
| NZ Main Urban Areas | 847,999 | 6.9% | 0.3% | |
| Wellington Region | 797,196 | 11.4% | 1.7% | |
| Total NZ | 743,678 | 7.6% | 0.8% | |
70 Comments
Well, that doesn't sound as rosy as the spruikers wanted us to believe. Springs looking downbeat too. If Corelogics saying its not great then it is really not great atall for them, but is for the poor and young. Great news, the cracks have just become visible and they will only get bigger from here. Don't believe the hype !
Hopefully some good buying opportunities coming up, fingers crossed
housing crisis will never end in NZ, and it'll get worse over time because everyone has their hands in the cookie jar. Labour party is worse. they ran election on housing crisis but Jacinda doesn't want to do anything because she wants to win election. in fact, both parties are equally bad.
Watching the market closely and these numbers have been obvious to everyone who is not blind. We got this with record low interest rates and kiwisaver withdrawals, it is pretty obvious the bubble is over.
Thank you RBNZ and Labour. Bottle of wine on the way. Keep up the rhetoric about helping the poor Labour, they eat that up. Why work when my capital gains are earning more than I would? I don't necessarily think it's a fair system, but when in Rome.
In 16 of the 29 quarters leading up to June 2019, the median Sydney home earned more than the median full-time worker earned from wages.
In Australia, mortgage lending grew from just under 20 per cent of GDP in 1990 to more than 80 per cent today. By way of comparison, business lending climbed 35 per cent to 40 per cent.
https://www.abc.net.au/news/2020-08-18/house-prices-how-we-lost-control…
Meanwhile in Australia...
Tourist areas in Queensland, and outlying suburban areas in Melbourne such as Broady have the highest percentage of mortgage deferrals. Mortgage deferrals are available to be extended for another 4 months but banks are getting a little nervous and asking customers to come in and discuss their individual situation. An anonymous survey of 1000 people with a mortgage has found that almost half will continue with normal repayments, almost a third will switch to interest only, whilst 1 in 5 will ask to continue their deferral.
"Of these customers we found: 40 per cent overstated their income in their mortgage application; 15 per cent understated other debts; 67 per cent are on [wage subsidy] JobKeeper; 25 per cent are on [unemployment benefit] JobSeeker."
Incomes are higher and expenses are usually more favourable in Australia so I imagine things cannot be much rosier here in NZ.
Overstating income, to obtain a loan, and then being underemployed or unemployed is going to make repayments even more difficult.
UBS is suggesting a practice called "extend-and-pretend" could be the best option, essentially kicking the problem further down the road and hoping things improve.
In March, six-month repayment deferrals — also known as mortgage holidays or pausing — were taken up by more than one in 10 people with a home loan. Now most need to start repaying, and new data paints a murky picture of what will happen next.
Loans will have to be repaid eventually, and banks are not in the business of charity. All of these customers who are in stress will be asked to sell. Eventually the laws of supply and demand must come into play. Less buyers, equals lower prices all other things being equal. So far lower interest rates, mortgage holidays, the wage subsidy, and pent up demand have been keeping the market active.
What happens in Covid 19 reappears? The government as one of my Canadian ex-collegues said at the start “The Government can't keep on paying indefinitely". That's not how NZ or Canada operates.....
Me, I'm not so sure anymore. Might the current government extend their current rental housing supplement to mortgage holders? Maybe they could pay off lump sums of the principal for mortgage holders as a helicopter payment?
On a roll up here in the north ... 8.6/1.7 last 12/3 months respectively for fongarei
But check out the Kaipara ... wow
When the dope comes in we will be flying in every sense :))
Houses are currently going 10% to 30% above CV where as most houses earlier were going between 10% below CV to few percent above CV so in Manukau area of Auckland, house price is on fire and not just rise of few percentage.
May be this rise will reflect in next data.
The majority are not but they don't advertise these losses. Classic spruiking to generate FOMO. Prices are heading south in Auckland.
FOMO at peak but houses after lockdown specially now are going at premium and at a very high premium.
Email today from RE agent (Can argue that is cherry picking but reflection of how hot the housing market is and houses that are been sold in Auction going upto 30% above RV and this is in recession as RBNZ and government going all out to support mortagee / housing market being only economy in NZ)
TEAM...... BREAK NEW RECORD - Highest selling price for single level property in Northpark!
7 Uldale Pl, Northpark - Sold for $1,745,000 - under hammer on 29/09/2020
19 days to sell - $345 K above GV - multiple bidders
This result is just off the back of Team..... recent record of "Highest Selling Price in Northpark" - 12 Pajaro Pl, Northpark - $1,757,000 (Double storey)
I don't listen to RE Agents or unsolicited emails and letters they send me. RE Agents talking is usually verbal diarrhea. If I look at a property I prefer they don't speak. As RE Agents are overpaid for simply unlocking front doors and asking people to please take your shoes off. Time will tell but in GFC I was buying and one supposed top agent told me he had to sell his V8 Euro as he could not afford to fill it up....
Some areas have very houses for sale comparatively.
But if you believe your BS Agent better get in quick and buy houses before they DOUBLE IN PRICE by March 21 at this current growth rate.
If you were smarter or cleverer and had a better attitude you would be asking a lot of questions
Develop rapport with the agent, find out the vendors motivation - (divorce, kids cashing up deceased estate, not in a hurry but want x price)
Are there any defects you should know about- they must legally disclose this
What’s happening on this street, maybe a developer is about to knock those other 3 houses across the road down??
Do they have any properties they haven’t quite listed yet?
Lots more, but hopefully you get the idea hopefully...
Perhaps that's the reason I retired at age 42.....I don't invest in houses. I only live in them.
Perhaps if you were clever you would learn to ignore noise from others and make decisions based on your own assessments.
Perhaps if you were clever you would learn that RE agents are trying to get you to pay as much as possible.
Perhaps if you were clever you would have learned when a RE agents lips are moving they are generally lying.
MadMax
My understanding is that the agent only has to legally reveal a defect to the buyer if he (the agent) is aware of it; it could be the case that the vendor may not have revealed a defect to the agent. Therefore the prospective buyer ( or their pre-purchase inspector as the case may be ) should ask as many questions as they can and ask the agent to get answers, preferably in writing. But I suppose this rule only applies in a cold or tepid market; if many buyers are chasing a particular property ( a hot market ) then the agent can probably ignore any hard questioning by one buyer when there are many other potential buyers for the property who aren't asking probing questions.
Yep, that’s how I understand it too
Andy
" . . they (I presume you CoreLogic) don't advertise these losses . . . "
This shows a lack of understanding on your part - probably in a number of aspects.
Core Logic is not a real estate company/selling properties, rather they are valuers who collect data for QV which is data is used by users such as RBNZ and councils for RV purposes . . and most likely IRD.
Their data is based on properties registered with Land information NZ - the official Government body who maintain land titles. They don't "advertise" property sales.
Note that the data will be supplied by lawyers and NOT real estate agents so there is no vested interest to withhold or down play information. Note that for IRD tax purposes and anti-money laundering legislation, lawyers need to be transparent and supply all data - it is this data that IRD more than likely uses to determine information related to bright line test so need for accuracy.
Note that this data is based on registrations over the past three months, which given that this is after the sale has been completed by the lawyer and LINZ notified which can be up to six weeks or more after a sale going unconditional and a further month wen the sale and purchase agreement was signed. So go calculate . . . this is going to include some contracts signed during the height of the Covid lockdown.
So be very careful how you interpret this report . . . and in particular be careful you don't jump to baseless conclusions on poor understanding.
P8.. as I understand much of Core Logic's income stream relates directly to readership. If so, then although their data is correct, they have massive incentive to frame it over- positively as many of their disciples love reading about their ever increasing equity. One Roof seems to have modelled their business in a similar fashion, targeting ignorant, vulnerable Mom and Pop "investors." Borderline criminal.
Apex Andy . Good point. You were spot-on & you sure ruffled some feathers of property spruikers. If prices are a banger, then why are most sold prices not disclosed??? Look at homes.co.nz & also RE agents' profile of their sold houses. TBC, Price Withheld!!!!!Any sane reason for RE agents to be coy about revealing prices achieved.
Can take a couple of months for that information to go through the local councils systems and be finalised. Eventually those prices will be published, it is public domain information.
ShoreThing
Process - contract signed, 3 to 4 weeks property goes unconditional (data reported by REINZ), 6 weeks sale is completed, and information supplied to LINZ (i.e. "land registry office"), data published by Core Logic.
From my experience, from a time I have entered a contract for that sale to appear on CoreLogic/QV data base - and other databases such as TM's Property Insights - is three or four months.
Note that "councils" have no role in the sale and purchase process of properties including them being "finalised". A sale is "finalised" when lawyers notify LINZ and the title is registered.
It is my understanding that:
- Council will use LINZ title database for their (including rating and compliance) purposes as that is who is the registered legal owner of property.
- CoreLogic/QV (although possibly now not exclusively) will be contracted by councils to provide RV data. This is carried out by Core/Logic processing LINZ data and also their registered valuers doing spot checks on recently sold properties.
Understood. I was aware LINZ have no data on sale prices, only title information. Was unclear whether Councils got sales price data from QV or the other way around. Either way, the process takes time which Apex seems to be willfully ignoring.
Jaf
Don't get sucked in by Andy's lack of understanding - this data is nothing to do with REA not disclosing sale prices. It is data reported by lawyers to LINZ.
I really hope you are not believing this cherry-picked data from the mass media translates to a real trend, there's a considerable amount of stupid money getting into the market, just as a result of recently removed LVR restrictions, there is just as many borrowers and banks willing to borrow and lend on overpriced assets in these conditions.
So at 7.6% average, that's a bit under 10 years (rule of 72) to double yet again. Whee! We're Rich! (Wealth effect, in technical terms). Bolt that ATM back on the house and Spend, spend, spend. The nation is Depending on y'all.....
A decline of 0.4% in Auckland after the removal of LVR restrictions and massive drop in interest rates. A rise of just 0.3% across ALL major urban areas. Now just think how many houses are in these areas compared to a few outltier rural houses that have risen. Think about the spin they are trying to put on it. Hardly any new homes coming to market in spring. The market is looking very very weak. Be careful out there.
Andy
"Think about the spin they are trying to put on it. Hardly any new homes coming to market in spring"
There you go again . . . in ignorance jumping to baseless conclusions:
"They" who you seem to mean REA is putting a spin on it - this is based on data held by LINZ - a Government body - who have no vested in putting a "spin" on anything or advertising anything.
You talk about "spring" - this data is based on agreements signed up to five months ago and will be exclusively winter data.
Wellington east and western suburbs seem to have peaked in April/May (if you look on corelogic website)
Very few houses for sale there. For the whole Wellington region there is only approx. 350 houses over 850k looking on trade me. That's Wellington, Lower Hutt, Upper Hutt, Wairarapa and Kapiti Coast. Been looking down there for a while for a possible higher end property and houses over $2.5m struggle to sell. Low end moving faster but not many of these either.
Booming market you say?
https://www.trademe.co.nz/a/property/residential/sale/search?search_str…
"Reduced". Scrolling through the Auckland listings:
$745k for a 2brm unit in Henderson, $979k for a hideous town house in Flat Bush. Wouldn't say those vendors are in any way desperate.
Check Auckland house price or just check Auction result on the very same website as that may help many to come out of denial that house prices are touching all time high.
Boom like never seen before and we thought that 2014 to 2016 was boom time.
Understand the anxiety in many FHB but one Must remember that government is for people who have house and ready to borrow and speculate. Panademic could have helped FHB whose earning were not affected but instead of falling, house price went up and any benefit of falling interest rate has been wiped out by rising house price and the only way for FHB is to enter by taking more debt and spend a lifetime repaying and that too for a pigeon hole as not many FHB wil be able to afford in Auckland despite falling interest rate.
Only hope is some correction and one does not lose its earning be it job or business.
Andy
Yes . . there is a little bit of REA spin.
Advertise "reduced" just like Briscoes, Katmandu, and Farmers love to claim "sale". Nothing like a bit of spin even when the business is booming.
. . . and wow, 226 Trade Me properties including the term 'reduced" in your search, when there are 25,384 listing.
Well its a new tactic thats becoming very popular very quickly, I wonder why that would be?
It's not a new tactic, and it's not any more popular than it has been over the last at least 5 years.
It is, I have been watching the numbers very closely.
Andy
"Well its a new tactic thats becoming very popular very quickly, I wonder why that would be?"
A simple marketing technique when the market is strong - which it is currently.
Nothing like a frustrated buyer who has missed out on some properties and alarmed at increasing house prices in thinking that they have finally got something at a "reduced price".
Same sales technique which makes Briscoes, Katamandu, Farmers, Mountain Warehouse, Noel Leemings, Harvey Norman, SpecSavers. . . . successful retailers.
Do you really think Briscoes are always having 50% off because they are desperate????
Do you really believe Warehouse advertising slogan "Where everyone gets a bargain"?????
P8, you know nobody is falling for this don't you?
It seems you’re falling for it, that’s why lots of ppl are spelling it out for you
I know one example where it worked recently. There was a place I was interested in that passed in below cv at auction. The vendor then put a list price 12% higher than than the highest bid. I think they ended up selling for 3% discount off their list to someone that thinks they got a good deal after the agent put some catchy must sell descriptive lines in...
Looking at all the listings on Trademe over the last few months, average asking prices are now higher than they were a month ago. Also the method of listing is changing - much fewer Asking Price $x or Enquiries Over $x, now For Sale by Auctions are increasingly back in vogue. Indicates to me that sellers are more confident of getting a good result on their sales.
ShoreThing
Agreed . . . the increase in both the number of properties going to auction (with added vendor costs) and open pricing are sales methods preferred by REA in a market that is rising.
Attended a Gisborne auction supporting a family member a couple of weeks ago who was buying. One of the hottest markets (up 26% 12 months and 8% past 3 months) - there auctions are accounting for approximately 50% of sales.
You adding to your portfolio?
It’s annoying isn’t it. It’s like the REAs are acting like marketers and doing the Briscoes thing
“big discounts here”, “marked down price”
“price reduced”, “urgent sale”
Hard to believe they’re acting like marketers, and marketing as if it’s their job almost even.
It’s just totally crazy
Edit: Sarcasm on
MadMax
Cheers . . . but sadly your sarcasm will most likely go over the top of the heads of some of the naive here.
Thanks Greg for putting the negative stats in red. It does make the data easier to interpret at a quick glance. Fact is a few regions are in red. Beg of a trend down? Even the ANZ economists are saying "wobbles may start to come through" https://www.rnz.co.nz/national/programmes/businessnews/audio/2018766189…
Strange, is this a surrogate for the QV data? I know we missed QV last month, so wondering what is happening here.
QV is CoreLogic.
lonewolf
My understanding is that CoreLogic is an Australian property data and analytical company (and includes registered valuers) who have either bought into or taken over QV who were the privatised company out of the old NZ Government (land) Valuation Department.
Somebody may want to add or clarify that.
Important point - something Andy doesn't understand - they are not real estate agents.
Thanks - that would explain the month gap I suppose
Is there someone who can provide information or clarify the following.
Councils usually update their RV information every three years.
I note that Auckland RVs would have bene due this year but have not been updated.
Here in the HB, Napier was also seemingly due to updated in September this year but hasn't whereas Hastings was updated last year.
Is this because of Covid and has been delayed due to the early uncertainties of property values?
Note: I did post early March when then uncertainty of the property market and the possibility of a significant correction that it would lead to confusion/dissent if there was and rates were charged on inflated property values.
Rang NCC property/rate - they say they will be updating with QV are expected to send out notice in November for September data.
Is it just me or does this feel like the final rush before the pop? We can't seriously think that with lowering employment and the greatest economic shock in decades is going to grow house prices sustainably... or can it? With prices here stratospheric compared to wages compared to other similar western countries, it feel like we are in for a shock.
blobbles
RBNZ has clearly stated that their proposed FLP (Funding for Lending Programme) is intended to reduce "household lending costs" (i.e. mortgage rates). It has been suggested by bank economists - who should be in the know - that this may happen as early as November. The RBNZ has stated that they are going to hold the current OCR rate until March 2021 in line with their statement in March this year that they would be holding it until then.
Whether one likes the RBNZ actions or not - the reality is that they are trying to maintain some increase in house prices (although I personally think that they have over-cooked it a little) as it is well known that increase in house prices mean homeowners have a perceived increase in wealth and spend - therefore simulating the economy as intended. No different to the Government providing wage subsidies.
So, we live in though times but both Government and RBNZ are endeavouring to maintain employment and house prices.
As to house prices - while I see RBNZ trying to maintain current values they may at worst be accepting of some slight correction.
How long can RBNZ and Government maintain this - well just as the future of both Covid and a vaccine are uncertain, then so too is that.
Post-Covid I see a long period of muted house price inflation as RBNZ try to address a disconnect between incomes and house prices, just as Government is going to have to look to reduce the deficit.
In the meantime, just as those employed and businesses with subsidies are being maintained at a cost, so to are homeowners.
Those potential FHB prepared to sit on the sideline are seemingly loosing at least in the short term (year or so).
Agree printer8.
Yes, all this is obvious. But eventually reality catches up, my point is that this feels like "the last hurrah", a final splurge before it all goes pear shaped. The actions you have talked about will make the coming crisis dramatically worse, not better. There is also an aspect of absolute lies coming from both the government and the RB - GR claiming he will use this crisis to reset inequality, when most of inequality is linked to house ownership and how out of reach it is for new entrants and is increasingly so. His actions of pumping up house prices are in direct opposition to his statements on inequality.
At the same time Orr's blathering that he is ensuring financial stability by doing things like dramatically lowering interest rates over the previous years (pre COVID), which left little room to move when a real crisis hit. Then just when we need financial stability, he removes LVR's, which were specifically there to ensure financial stability. It's clear he is doing nothing of the sort, what he is saying he is doing is in direct opposition to his actions. Whether he believes it or not, the truth is plain to see. His real job appears to be to simply push up house prices.
It is the calm before the storm. If the RBNZ and banks are confident that the economy is in such a good shape and will be for the foreseeable future, then why are they removing all these barriers that stopped house price rises in the last few years? Why remove LVRs and decrease interest rates? They're doing all this to catch / break the fall that they know is coming. It's like putting a trampoline to catch the people jumping from buildings, but no one's jumped yet so the kids are using it as a playground now.
That's the thing with bubbles, you never know whether it's about to pop or just keep on rising another decade. You'll only know after it's popped.
People quickly forget financial crisises. How many NZers lost money in the finance company failures over a decade ago?. Or how many people lost money in the 87 NZ sharemarket crash?
It indeed is, this is the exact same behavior of stupid money which you could see right before the housing crash of 2008.
But Ashley Church was preaching about how prices would double in the next 10 years on his One Roof pod cast propaganda last week. I guess that could happen... if real (inflation adjusted) wages increase by 60%+ over a corresponding period. Income to house price ratios of over 10 will move us into a 1975 to 1980 type landscape where adjusted, real prices dropped 38% nationally, more in Akld. 1970 to 75 has many similarities to 2015-20.
At a rate of 7.6% annual growth prices will more than double in 10 years, so AC was right for the first year of the decade at least.
and if we were back in 1974 Ashley would be preaching from the same hymn book. What happened in the 70s is there for anyone who wants to look
The HPI only goes back as far as December 1989, comparing that value to December 2019 gives us a CAGR of 5.94%. At that rate, house price will "only" rise 78% per decade, so I guess Ashley isn't far off.
Think you mean have only rather than will only. As you point out since 1989 there has been massive increases in property growth, especially in Akld. But with Akld income to price ratio already at 10 you would need to be extremely optimistic and IMO almost financially illiterate to think it is likely to continue. Many economists and other so called experts are publically positive (Tony, Bindi, Ashley etc) but I would question whether they truly believe what they are saying.
Good luck sustaining such growth without nothing to keep the prices at these levels, while AC has very little understanding of how economy works in my opinion he makes a very good lobby spokesperson.
This is occurring all over the world due to the lockdowns and all the money printing that is being done and the low interest rates. This money is going into assets like stocks and houses. But what happens when they stop printing money? They have to let it all crash eventually, they are just kicking the can down the road into the future.
We have to learn from history.
I reckon they have learned - just don't stop printing and she'll be right.
kind of agree. Could see them propping it all up for, maybe, a few more years. They are very determined to do so and do wield some pretty big sticks
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