The housing market got off to a booming start to the year in Auckland although sales in most other parts of the country were more subdued.
According to the Real Estate Institute of New Zealand, 1870 residential properties were sold in Auckland in January, up 37.6% compared to January last year.
It was the highest number of properties sold in the Auckland market in the month of January for 14 years.
In Manukau and on the North Shore, January's sales volumes were up more than 50%.
Six other regions also had higher sales in January compared to a year ago - Northland +3.8%, Waikato +2.8%, Gisborne +7.7%, Canterbury +6.4%, West Coast +54.1% and Southland +18.4% but the market was generally quieter around the rest of the country.
Wellington had the lowest number of sales for the month of January ever, Tasman was at a 21 year low, Hawke's Bay, Marlborough and Otago were all at 10 year lows, and Taranaki had its lowest January sales in six years.
REINZ chief executive Bindi Norwell attributed the low level of sales in several regions to a shortage of new listings late last year.
"Those regions with solid levels of new listings back in November and December are now benefiting from an uplift in sales volumes, whereas those with chronic low listings and total inventory shortages, such as Taranaki, Manawatu/Whanganui, and Wellington, are now starting to see this impacting the market," she said.
Selling prices dipped slightly, with January's national median price declining from $745,000 in December to $730,000 in January, although that was still up by 19.3% compared to January last year.
Auckland's median declined for the second month in a row from a record $1,030,000 in November to $1 million in January.
However four regions posted record median prices in January - Bay of Plenty, Hawke's Bay, Taranaki and Nelson.
The charts below show the sales volume and median price trends for all New Zealand regions.
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Volumes sold - REINZ
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Median price - REINZ
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89 Comments
Perspectives as ever, differ. Yes, January sales were 14 year high but
Dec-Jan each year sales dip: in 2015-16 by 27%
In 2019-20 by 27% (in Auckland)
In 2020-21 it was 46%.
That is LVR and declining inventory kicking in, as I predicted.
Also, some were v mocking at my mentioning February 18th as the turn for market.
Well, it is 16th today.
Prices and sales will continue to increase , MORE SLOWLY and sales will in a few months, go flat compared to a year ago, if only because we will be comparing to mania months of 2020 by time we reach May. Cycles have drops and rises of course. The mania is over. The recession has yet to come, later in the year.
Lack of stuff to sell is a bit of a problem. REINZ says January inventory fell to 10 weeks from 18 weeks last January . Yes that is mostly due to higher turnover but investors have bought most of what they wanted now and are being reined in a bit. Prices will rise but slower with each month.
Thanks Mike, like you perspective
Any break down on housing type or sections and how many are 'off the plan' sales?
Off the plan seems hard to gauge.
If one goes to TradeMe, there are off the plans advertised, but it's very much a minority.
However, I get the sense that a lot of them don't go on to TradeMe.
And you only need to advertise one of each type of off the plan build in a development, and when you get a lead let them choose from the different lots with the same 'product'.
Not looked yet but can do section sales from available info
V unhelpfully, REINZ does not breakdown for off plan
Also, REINZ figures are from agencies.
off plan are by developers?
Off the plan developers and sometimes RE agents too
It is only a niche market, but Waiheke Island ,( and following on from the G Barrier sale that Greg mentioned yesterday) currently has fewer than a 100 listings , a proportion of those being a newly developed block of lifestyle land listings. (Actually strip those out and there is likely more agents on the island ) I do not recall there ever being fewer listings, sections that once would not sell or sit for long periods , are now no longer available, homes for sale are few and commanding significant prices. Given the island has a substantial number of holiday homes, second homes for those that will be enjoying capital growth elsewhere and appreciated the government support, mortgage rates continuing to reset lower ,a changing demographic, and the 'work from home "mantra it would not be surprising that further significant price increases will squeeze that market higher. For the record I do have an interest
Notice that January sales in Auckland rose 36% in January.
In prev 4 months, it was over 50%
Wellington and other areas recording lows was , BINDI, nothing to do with prices being too high. Oh heaven forfend.
Predictably, the DGM show up - telling us that it's all doom and gloom in the housing market.
Privately, the DGM are hurting: wishing that they'd got into the housing market a couple of years ago - when prices really were cheap.
TTP
Seems to me that the real DGMs are the ones wishing for higher prices. At this point housing getting more unaffordable is just lowering quality of life for most of the country.
What annoys me about comments like this is that the vast majority of people hoping to buy houses now AREN'T people who could have feasibly bought a house a couple of years ago and decided to wait. They are people who have been saving hard for years, working their asses off in order to be in a position to be able to buy a house, who have been repeatedly kicked in the guts by massive price increase. Comments celebrating the so-called DGM getting a comeuppance ignores that it has come at the cost of people who have done everything right and worked hard but simply weren't in a position to buy a few years ago, through not fault of their own (most people cannot afford a house when they just get out of high school, or uni, or have just got their first job, or given the current situation, even when they've been saving 30% of their gross salary for 5 years).
There are a number of commenters on this site that derive pleasure from ridiculing the innocent victims of the housing catastrophie.
Some of them are even crooks convicted of crimes of dishonesty such as price fixing. They seem to lack the cognitive facilities to empathize or imagine themselves with the shoe on the other foot.
Perhaps they were dropped on their heads as babies, who knows?
There is one who likes to get is hook into people. I reckon he was spanked too much by his mother
Yes al123, but there were also ones here who had the funds but frustratingly and loudly took a one eyed perspective that the market was headed for collapse. The last two years or three was the perfect buyers market opportunity to get in. A few brave fhb got horrendously dumped on .... by DGM ... for daring to speak up and say they either had bought a house or were in the process of it. They were told things like they were going to regret their decisions and how they would be worse off. So not everyone is a victim of the market pricing, some actially did that to themselves.
FH..."Gotta know when to hold em, know when to fold em, know when to walk away, know when to run, never count your money, when you're sittin at the table". The Gambler of course. So unless you (or anybody else) has cashed out and is not still sittin at the table anything could happen and I wouldn't be gloating. I have seen gloating followed by tears countless times.
Yep no point gloating although a friend's ppty she sold made the ftont page news... wow random
FH... so she can now gloat (if she is that type). If you have not sold, your money is still on the table (or at risk) so you have not walked away a winner (yet??).
I was an NZ FHB in 2019 and I found all the comments on this site **from both sides** really helpful.
And I have nothing but sympathy for all the peeps out there who desperately want to own their own home and can't because of the nightmare that is the NZ housing market.
I don't know how anyone can claim bragging rights over predicting what would happen to the housing market over the last few years because Covid and the RBNZ, banking and government response has been completely unprecedented. Mortgage holidays, Funding for Lending, QE orgy, record low interest rates/talk of negative rates, government business loans, wage subsidies. Who'd have thought NZ would have had the second best world response to the pandemic and managed to mostly keep Covid at bay and maintain a comparatively healthy economy?
I would never in a million years have predicted it. No one knows how this is all going to impact economies (housing markets), governments and societies over the short to medium term, so no one should claim any smug points.
Are you hurting too? You have said you rent.
He's been caught lying here many times. Apparently his business practices aren't much better either...
So, we now have a situation where anyone not speaking or writing in the new normative narrative, is automatically a DGM.
Meanwhile the Pollyanna script is not questionable?
That is the one that regards all price gains as per se, good and also that such rises are linear and there is no cycle, including what cycles have - dips.
Go back and read what I actually wrote and try to refer to it, or the article above, in your remarks, rather than simply reverting to reacting so predictably to anything off your script
So, we now have a situation where anyone not speaking or writing in the new normative narrative, is automatically a DGM.
This is System 1 thinking at work MK. Everything is boiled down to emotive and intuitive reactions. It's the gasoline of trolling. It's also the basis for how the NZ media works.
V astute analysis
"Selling prices dipped slightly, with January's national median price declining from $745,000 in December to $730,000 in January"
Par for the course, I dont know what it is about January but I have also noted this before in previous years
Apparently all the rich people are away at their bach in Jan so less high end sales
And with no wifi yeah nah
Yeah right, Apparently in Jan all the rich people are away at their bach and after Jan come back for more houses. lol, do they change their houses every year?
wasnt saying it was my view, it was a comment from Mr Thompson from B&T earlier in the year
Yeah I acknowledged that, even Bindi Norwell said that. They are definitely bias in terms of reporting housing market data.
As flying High suggests, January pricing has basically set the floor for each year. You have to go back to 2004, where January prices were actually higher than the prior month of December.
Nice fact CP cheers
"best January in 14 years"
Depends on who you'd ask. A drop of 2.1% in nation-wide prices is definitely in the good track though.
Quite so.
And I couldn't help noticing a recent TradeMe listing, that came up on the general main page - "Re-listed due to failed Sale"
Hmmm....
Sales and sale increases are soft in Wellington city vs Greater Wellington - corelogic indicated prices were up 20K in lower and upper hutt in Jan vs just 10K in Wellington City.
Suspect there are only 2 real reasons for this
1. Wellington at just over 900K median price is getting too expensive vs the wages in the capital - which whilst the meidan wage is higher than auckland there is not the spread of wages seen in Auckland that drive top house prices (ie not many Wellingtonians earn 200K + and on the other side not a lot of full time workers earn <60K a year).
2. the proposed 17% increase in Wellington City rates is ensuring new home buyers dont overbid on property and/or may be detracting a few would be home buyers from upgrading and ending up with a big rates bill.
Yes. Looking at the median Wellington house I sold last year, its expected price is up by $150k on what I sold it for in May. It was overpriced then...
I think your first point is especially relevant.
I suspect that prices were pumped higher in 2020 by strong signals around where intensification will occur in Wellington.
I expect that when the Proposed District Plan is notified, with more definition around new zonings and rules, there will be another big uplift in Wellington central sales and prices
What is going to happen to the price of an old villa that can suddenly have a 6 story apartment block on it?
Exactly what happened in Auckland, land value increases as highest and best use has increased. From there, a small proportion get redeveloped.
That's right. Just look at happened in Auckland in 15/16 to see what will happen in Wellington in 21/22
Ikimpaul
CoreLogic’s data you refer to; do they. specifically refer to January only?
CoreLogic, data is for a three month period on sales registered with LINZ unlike REINZ which are for sales going unconditional in the previous month.
Also, you note that potential buyers aren’t “upgrading and ending up with a big rate bill”. Are you suggesting a 20% increase in a house’s value (RV) will lead to a 20% increase in rates?
I don't think that Ikimpaul is suggesting that an increase in an individual property's RV will increase the rates bill. He's suggesting that rates will go up when upsizing to a larger house with a larger RV. Then add the proposed 17% general rates increase on top of that and it might make some people think twice about upsizing.
Bit of both - if the average house price in the area goes up 100K between ratings valuations then the rates should stay the same but if a eager buyer pays 200K over the current RV - ie pays a premium on the average house increase then its likely the rates for that property will be higher as it will be valued as a more expensive property than its neighbours, ie current rates might be $4000 now - pay a premium and the rates may then jump to $4500 add on the 17% and all of a sudden your rates are $5300 - an extra $100 a month out of your budget.
Same thing happens when you upgrade your property - move from a house with rates of $4000 to a property with current rates of $5000 - then add the 17% and your rates are now $6000 per annum with the 17% increase.
I think the uncertainty may be making some buyers hesitate until the council decides on the final impact.
NSC stand out on sales because of people seeking lower density of pop and more space.
CV19 is showing its impact
I notice sales in Rodney are only 163 v 161 last January.
marked contrast to NSC
Wellington sales atrocious for fairly plain reason: wages too small for new medians.
has to happen
Look at NSC for selected January sales:
2016: 249
2019: 155
2020: 203
2021: 323
So, NSC is up 59% on last January 2020
Compared to Rodney which is up 1.2%
NSC pop density if about 3500 per km
With Blessing of Jacinda Arden and Guidance of Mr Orr not only January but like 2020 was the best year so will 2021........
Minimum 20% to 30% in 2020 and now prediction of another 20% to 30% than in 2022 and 2023 so average price should be 2.5 million before some fall in 2024 or 2025 as per experts.
Anyone and everyone who could borrow should stop all activities and go in for property as no where can one make so much and so fast money anywhere else and that too Tax free.
Remember with support and interest of PM, FM and Governor of reserve bank in seeing house price multiplying in weeks and months, hard to go wrong.
Your dreaming and comments like this annoy me because they are so unaligned to reality. There is zero chance of a $2.5M median house price in NZ by 2025- without enormous household wage increases. To start with to service a mortgage of $2M at current interest rates a household needs a $250K a year income, Current NZ household incomes are $102K.
Secondly a $2.5M median house price would require a 500K deposit - for the average first home buyer saving $2500 a month - this would represent 16 years of saving - again unless wages go up - young home buyers would not be able to get into the market for years.
Thirdly the mortgage repayments on $2M at 2.29% is $7600 a month - so investors would need to get rent of $1500+ a week to service the mortgage - and a renter would need a household income of $175000 a year to cover those sort of rent payments (and they would be paying 60% of their income in rent) Even if interest rates fell to 1.5% - thats still $7 000 a month on a $2M mortgage.
Lastly this would put NZ house prices at 800K (or 30%) above the worlds most expensive city of Hong Kong.
At zero interest rates the interest payable is zero. Nothing would surprise me. Remember, this is not about us, it is about the central bankers stealing from us. They will keep stealing until we all wake up.
At zero interest rates the repayments are still $5 600 on a $2 Million mortgage - again that means a $1250 a week rent to service the mortgage. Household incomes are just not that high.
Aside from the fact creating a negative interest rate means the government ends up incurring massive amounts of debt- it also means to raise the household income to the necessary levels of $150-175K (which would equate to a 12.5K -20K wage increase for every household every year over the next 4 years) that the government would incur even more debt to lift public servant wages (unless of course we like our nurses and teachers sleeping in cars). The inflationary results would devastate the country.
The concept is absurd and its not going to happen - and on the remote chance (.0000001%) it did people would leave NZ in droves and immigration would cease (people dont move to a country with record house prices) and then the lack of demand would drive house prices down anyway.
Not if you go Interest Only!
Do not underestimate the intent and power of PM and Governor of reserve bank as corona virus has given them the opportunity to play, with no questions ask.
Few years average people buying million dollar plus 2 bedroom unit in not so popular area was hard to imagine but Jacinda Arden with her magic under Corona virus achieved it.
Bigger the bubble gets more support will be provided by Mr Orr and Jacinda Arden as will be cornered by their doing and will have no choice but to do anything and everything to support the ponzi as the only way to avoid bloodbath on the street.
So chill and borrow as much as possible.
https://www.nzherald.co.nz/business/reinz-data-auckland-house-prices-dr…
okay then i'll bet you $1K right now I'm right and your wrong. If your right then I'll be earning $70K more a year in 4 years time and I'll be able to afford the $1K bet
well played sir/madam
If rental incomes had to pay the mortgage, price inflation would have stopped a while ago.
If prices were set by what normal FHBs can save as a deposit (sans gifts from parents, for those born into the right family), price inflation would have stopped long ago.
If the nominal value of NZ homes had to bear any relationship to what you get for the money elsewhere in the world, we wouldn't be here.
I'm all in. Bitcoin logic. Ashley and Bindi have been right about the inescapable rise of property for the last ten years, so I guess they will be forever. Why fight it? In the vulgar yet evocative vernacular of WSB: NZ can stay retarded longer than I can stay solvent.
Don't underestimate how useless princess tooth tooth and the fat controller are.
Or the level of degeneracy that Orr will happy go.
I interpreted the initial post as sarcasm and in a weird way your response highlights the absurdity of it all. I do wonder, unless we as a country have the kahunas to do something about it what you outline is a dead set certainty, is it not?
Is that you Grant Robertson?
July-Dec Auckland sales in 2020 were up 56.78% on 2019
In January the increase on January 2020 was 36%.
January 21 sales were however, up 29% on January 2016
Much as I’d love to believe that Wellington City has peaked, the truth is that for anything remotely half decent (probably under 20 properties for the whole city) the queues are out the door. I’m an active hunter and the frenzy is real. There is nothing to buy and nothing being built in Wellington. The city is in big trouble.
I've had the same experience. Based on how useless the WCC has become, I really do believe that the future of the 'city' is in the region. Kapati/Porirua and the Hutt councils actually seem to be able to get houses built. With more jobs moving to the Hutt valley and beyond I feel like the city is in for a slow decline while the region booms. Reversal of fortunes
Completely agree with you there.
She's going down. Hot off the granny herald.
https://www.nzherald.co.nz/business/reinz-data-auckland-house-prices-dr…
....Adrian, don't you delay those LVRs.
last 13 months, compared to same period a year earlier:
Auckland sales up 18.5%
Rodney up 33%
NSC up 38.5%
Wellington sales DOWN 7%
But isn’t that a function of lack of supply, rather than a lack of finance or demand? All the crap is on the market. There’s nothing left to buy because older locals all own 2 or 3 houses.
Don't read into these at all guys. I've been to multiple auction nights in Auckland and every single property sold so far above QV and Myvalocity it wasn't even funny (the last two Thursday nights). Trust me February sales will show ridiculous price rises - same with March. After that then it should slow but don't get your hopes up from this. Not buying or selling anything, just watching so just managing everyones expectations.
House prices to the moon!
Agreed. Investors who rushed to secure lending for 90 days before the LVR changes were adopted by banks back in Nov are drawing down in Jan/Feb and possibly even March if they get extensions. I expect from April/May 2021 for these numbers to flatten (not decrease). Looking at a flat housing market for a while especially given the current steepening of interest rate curves.
Exactly right this site is filled with dreamers trying to convince themselves that they are suddenly going to be able to buy stand alone 3 bedders at 600k again.
It’s only going up from here and apart from some possible short term adjustments there will be a far higher entry point in a few years time and you’ll still be stuck renting wishing you were part of the 60% that own.
Lord Dowding.. You may be right but finance-based predictions are never as certain as you make out. Less certainty and more questioning. Your prediction may not be wrong but your level of certainty is. I believe almost anything could happen in the NZ market this decade.
If I were you, I would question why others (like me) are choosing not to buy a handful of rentals, when I could do so without bank assistance tomorrow. I think it was Buffet that said you always want to think about why someone else might be on the opposite side as you and what they might see (or even know) that you don't. I don't know but neither do you, which makes statements like "it's only going up from here" a little silly and naive.
Jacinda "Shhhh we're only allowed to talk about Covid & Vaccines now. Ignore all other issues."
On the plus side, if they make some moves to tackle the problem and it smashes the market - they can blame covid for the crash.
I mean realistically she has no other alternative but to ignore the issue. She crashes the market, it will crash the construction industry having a serious ripple effect on the wider economy. She tries to justify high prices she comes across as a hypocrite & will hemorrhage votes to the greens.
Best just to focus on Covid & vaccines.
I’d love a reporter to drop in a question about housing at the 1pm press conference or post cabinet stand up
Yes, that'd be great! A simple "Are you able to give any update on the housing crisis?" would do it.
You'd see Jacinda make her biggest frown yet. Security would be called in immediately and the reporter would need never be seen again lol
HPI for Auckland is down 0.3% from the previous month, i.e. basically flat. It's the 2nd highest HPI ever recorded for Auckland, so the market hasn't crashed yet!
Selling prices dipped slightly, with January's national median price declining from $745,000 in December to $730,000 in January, although that was still up by 19.3% compared to January last year.
How many hopeful NZ house buyers could save the appropriate LVR deposit for the most recent annual capital value increase, ~$118,100, at the ANZ "Serious Saver" interest rate set at 0.2% ?
Let's be kind and say a 20% deposit around $23,619. This value of savings demands a capital deposit of ~$11.81 million at the above noted annual interest rate.
The moneyless RBNZ FLP trick is certainly achieving it's declared aim of lower interest rates at the expense of the asset deficient majority.
You're showing your age Audaxes. Do you really expect Gen Y/Z to have all their money in an ANZ "Serious Saver" account?
Tap my grave when you are in receipt of bitcoin for work and commodities rendered to others and it's value is no longer referenced in fiat currency denominations.
Furthermore, my point is that fiat currencies are debased to the point of being worthless. I came to that conclusion when I was 45, back in 1998, and have never been in receipt of an earned dollar since.
In respect of interest rates the RBNZ FLP scheme has set a benchmark 3 year wholesale money market interest rate based off OCR, currently set at 0.25%. Retail investors can hardly expect better, other than some derisory bank credit risk bump.
Mike
Re all your posts and data, you may be correct that there are possibly the first signs of a cooling of the market.
Looking through the full report there seemed to be mixed regional results but that is at least some movement away from a hot market through out the country late last year.
Hi printer,
thanks for that. yes, I agree it is only tentative signs of less steam at present!
Need more data next month really , to see if any real differential off the July-Dec mania is setting in or not
If the 17% rates increase in Wellington does go through when would it be likely to take effect?
Great to see people here using figures to satisfy their own lines but please read the report,I usually enjoy Gregs precis of the market but suspect he too is bowing to public pressure.
The areas with low sales in January basically have nothing to sell as a home to live in,not because its slowing down.
They are new builds not completed,sections or under contract.
People aren`t moving as they don`t know where to go next,its only death,divorce or deployment moving as per Aucklanders heading for the regions.
28.1% pa price increase in Coromandel and 29.1% pa price increase in Timaru :-)
There is still room for upward valuation.
Bindi is right on the lack of inventory tapering enthusiasm. What is needed is an attractive price to attract a attractive house- potential sellers of attractive properties won't consider selling if the market aren't ready to pay.
Can't wait for another event to trigger NZ QE II this year or next.
FHBs should be on the phone with agents now and put in your best offer, those attending auctions should be aggressive to stand out from the crowd. It's already costing you $500/day in capital gains and it might as well be close to a $1,000/day next year. The longer you wait, the poorer you'll become.
Except you forget that the future price increases you refer to are already included in the purchase price - multiple times. It's a bit of a chicken-egg problem.
The limit at the moment is set by credit availability. The minimum price is the upper limit of what the average FHB can borrow. Everything sells for 1 million+.
A median priced house is now only 10.91973486 bitcoin and falling.
Https://brr.nz
Shoulda' bought a bitcoin wallet to live in...
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