House prices came off the boil in most parts of the country in April, according to the Real Estate Institute of New Zealand's House Price Index (HPI).
The HPI was developed in conjunction with the Reserve Bank. It takes into account the effect changes in the mix of properties sold each month have on prices, giving a better indication of overall price movements than either median or average selling prices.
It shows that price growth eased back considerably in April compared to March and declined in some regions.
Overall prices across NZ increased by just 0.6% in April, down from 2.7% price growth in March, while across the Auckland region prices decreased by 0.2% in April compared to an increase of 2.3% in March.
The decline in Auckland was led by the North Shore where prices declined by 0.9% in April compared to a rise of 3.8% in March.
Prices were also softer in Auckland's central suburbs where they declined by 0.7% in April compared to a rise of 0.7% in March, while prices in Rodney were flat in April compared to a rise of 3.8% in March.
However price growth was still a feature of the market in Waitakere, Manukau, Papakura and Franklin, although in all of those districts price growth was well down in April compared to March.
Across the rest of the country (excluding Auckland), price growth slowed to 1.2% in April compared to 3.0% in March.
Other areas to show price declines in April were Hamilton -1.8%, (+4.6% in March), Upper Hutt -2.3% (+1.9% in March) and Nelson -0.4% (+4.7% in March).
However four districts went against the trend and showed greater price growth in April than they did in March.
They were Hastings 4.1% (3.6% in March), Wellington City 3.3% (0.1% in March), Queenstown-Lakes 1.7% (0.7% in March) and Dunedin 0.5% (-0.4% in March).
The table below shows the REINZ's HPI for April in all main urban districts.
The HPI for March in available here.
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REINZ House Price Index April 2021
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51 Comments
And here's Parker predicting strong growth for another year.
So why don't they do something about it? Laissez-faire government policy adding to their declared crisis.
Crazy that a number of areas have had a 30% + rise in values. Actual insanity.....Porirua and Hastings at 40%+..wow! Have wages jumped 40% there to justify the increased debt loading that will be present there for the following decades to pay off these increased prices?
And don't we have a bunch of people living in motels in Rotorua - yet prices have gone up 20% there this last year. How do we get the people out of motels and into their own homes if prices rise at 20% per year?
No wages didn't rise 40% but interest rates declined by 75% !
Great - we can all just take out interest only loans then and never worry about paying back any of the debt!
Mortgage rates haven't gone down by 75%. 3.5% before covid to 2.25% now maybe. 35% fall in IO terms? If you think about debt serviceability on 30 yr P+I terms, you're going from something like 6.5% PA before to 5.25% PA now or about a 20% fall. In that sense, not too surprising to have seen ~25% price increases, since in the end many people didn't experience the income losses that were expected to be coming.
But, yeah, totally nuts. So exposed to interest rate rises.
This is true. Any uptick in rates which will certainly happen due to cyclicality will force an awful number of properties underwater.
Many investors are claiming the interest deductibility changes will put them underwater. An uptick in rates will exacerbate that.
Good. Kindling for the reset.
Yeah no need to do anything remotely productive or innovative. Just sit back and make huge tax free gains with the banks money.
Except if you're not on the ladder yet, in that case moving to Australia is the best option. It's the best life hack available.
Fantastic eh! So based on this logic, if/when inflation arrives, we can expect house prices to drop in equal quantity as the cycle reverses and interest rates rise? Interest rates go up from 2% to 3.5% so we will see house prices fall by 40% then....Or does this logic only work in one direction?
Yes it's an awkward moment we find ourselves in. If inflation goes up with wages static then yep the banks are going to be holding all that debt on assets that are 40% less valuable. Bankruptcy for many to start and bank failures shortly after?
IO
"a bunch of people living in motels in Rotorua . . . How do we get the people out of motels and into their own homes if prices rise at 20% per year?"
The reality is that the vast majority of that bunch of people are high social needs were never going to be buying their own homes whatever the price.
What we need is landlords to buy houses to provide rental accommodation . . . . oops silly me, the Government doesn't like landlords and is discouraging that.
That’s not true and a bit dramatic. Some changes Labour have made have been to bring a small amount of assistance to the next generations in buying a home. It’s important that people that work and contribute have a bit of hope or else we begin or have already created a pretty awful country where property investors devour hope and purpose in young people.
It's not that long ago Labour were slamming National for house prices climbing out of reach of FHB...in four years this has accelerated out of control in a lot of regions. If they are truly worried about helping them into their first homes simply allow them to buy with 0 or 5% deposits.
@IO. High social needs yes.
With sane house prices and cheap rents these folk (well most) would have been able to scrape by unassisted. And have some sort of job as well.
But no. We allowed a nuts population explosion, and pointless house/rent price explosion. Result, these people at the end of the shelf just got pushed off the end.
Worse, we have many still in work and housing, but barely hanging on.
With a right wing view I am anti welfare. So we must develop an economy where more of those with lesser capability can look after themselves. We don't do that currently.
I agree with your views but don't really see a plan in place to get there.
So far the government's efforts to reduce child poverty and homelessness has only been to increase the reliance of our vulnerable populations on welfare.
In the name of economic development, the government is still randomly picking certain low-value industries to offer taxpayer-funded subsidies, while pockets of high-value business showing real signs of excellence are still being neglected and sent offshore.
The LAST thing people with social issues need is greedy, cannibalistic landlords feeding off them. Only proper social housing, where profit does not figure is suitable for them.
Luckily most landlords are very nice people
Nice people do not screw others into the ground and take advantage of their situations. Nice people do not pocket the bulk of someone's earnings, making it impossible for them to adequately provide for their kids.
Ergo, landlords are not nice people
Perhaps people should stop blaming the landlords and assess their own personal financial situation. Its really really simple, if you cannot afford to have kids then your don't have kids. Stop blaming others for your situation in life.
What is my situation, then?
Where do the future workers and tax payers come from?
Cruelty and madness wear a smile.
"What we need is landlords to buy houses to provide rental accommodation"
Given that home ownership rates are falling meaning that more landlords have been buying houses in proportion to other groups, and homelessness and accommodation supplements and emergency housing requirements are getting out of control in the same period....this is clearly a failing/failed paradigm..'landlords can fix the same problem they've helped in creating'.
We don't need landlords to buy houses...we need landlords to build houses so that supply increases and prices fall. If you can't see the difference, well its probably the Nz property investor association labotomy that's getting in the way of rational thought!
The skill set to be an accommodation provider (landlord) are completely different to those of a property developer. This is where the Govt is in la la land if they believe otherwise. I was astonished at the PM's naivety when she made that suggestion.
I'm sure a property developer has no issues finding a property manager, signing a tenancy agreement and collecting rent if they really felt the need.
"Accommodation providers" on the other hand will struggle with the concept of building new stock, because they don't actually provide anything. Much like Kiwibuild, they just take something that already exists and slap their name on it.
Accommodation providers provide homes for countless thousands of people. They are doing their bit to alleviate NZ's chronic accommodation shortage.
So Nzdan, what actions are you personally undertaking to alleviate homelessness?
Are they? Or are they out-bidding those seeking to accommodate themselves and then claiming to be the "saviours"? Buying an existing house to rent out does not make one iota of difference to homelessness. When you have 1 investor for every 1 FHB, that effectively doubles the demand factor for a unit of "accommodation" and prices go up as a result.
There is nothing that I can do to alleviate homelessness, I don't have the resources behind me. What a ridiculous question to ask.
RBNZ and Government have got the data to hide behind and not act.
Real Shame that families all over New Zealand are fighting to get a home and all thanks to favourite Queen along with RBNZ is all out to destroy the basic social fabric of the society by creating a great divide.
John Key may have started it but it is Jacinda Arden who is taking to a level never seen before - point of no return.
https://www.nzherald.co.nz/hawkes-bay-today/news/napier-house-prices-hi…
Started under Helen. Key just goosed it with petrol.
Yet inflation is sub 2%
No its not, true inflation is already double digits.
Anecdotally by some commenters.
You missed my sarcasm.
Hi Greg, Apt image for the housing crisis. Now just waiting for Jacinda or Orr to give a slight nudge and ......
Plight of average Kiwi - Now just waiting for the final kick....
Is Jacinda Arden wants to wipe poverty or is out to wipe FHB.
Of passing interest: The image is possibly of Bokor Hill Station in Cambodia - a former French summer settlement but now empty houses.
Nice weather we are having.
(Hope this is ok with you TK).
Oh, it's you again with the weather, let's talk about housing for a change ;)
If this cooling trend continues, some investors are going to kick themselves for being stubborn and not selling off properties sooner, all those swimming pools full of cash they could've had
One month in winter is not a trend.
It would be nice if they would publish Tasman District which has a higher population than Nelson city and is building three times the number of houses being built in Nelson city. In fact in the year to 31 March they are building more houses per 1000 than Auckland. Pretty hard to get an idea about what is happening anywhere in NZ when there is not much to choose from because so few people want to sell.
Everything is in a Cycle. Play of opposites will eventuate soon. Boom / Bust , Inflation / Deflation, Dark / Light and all these other things. There is nothing sustainable here. I would move out of the way if I were long any NZ urban property especially in Wellington and Auckland.
Its almost the evening, after such frightening news, why has Orr not dropped the OCR negative and removed all LVR's restrictions? What if the slumlord speculators lose $10? Surely he can pump them up another $300k per house. Thats his job isnt it? Kiwis expect it!
The article's headline isn't really consistent with the facts/stats. A 0.6% monthly increase represents a 7.2% annual increase. When you adjust for seasonality, a 0.6% monthly increase for April is even stronger given that traditionally April is a slower month. Worth looking at the actual REINZ website for unbiased reports: https://reinz.co.nz/press
The HPI is already seasonally adjusted.
I didn't know that, or maybe I did and forgot :-). Do you have a reference?
On a national basis it is clearly less expensive to stay renting than to buy. But apart for Auckland and Queenstown, buying is still a practical option for most.
The recent leveling off housing prices, even small falls in same markets, don’t really change the situation. But buying in anticipation of capital gains may not be wise any more. Housing may be returning to its primary purpose of ‘shelter’ rather than as an ‘investment’. And that may effect its positioning in retirement savings plan.
People need HOMES, houses are supposed to be homes. If you rent, you do not have a home with our crappy tenancy laws. Much change is needed in this country.
Mr Orr should not allow himself to be pressurised by lobbyist as their blackmailing tactics are nothing more than tantrums by spoilt kid unless Mr Orr himself has hidden vested interest and is a part of the group against whom, he is suppose to act by stopping interest only loan - Speculators.
https://www.stuff.co.nz/life-style/homed/real-estate/125026377/exodus-o…
Thank goodness Orr was thoughtful enough to reduce interest rates to help mortgage affordability for FHBs.
Bubble cycle. Bull trap is just before... freefall. Let's see it that's where we are at, or if artificial finance and printing can continue to stave of gravity.
Off the boil in the North Shore...? Check this 9 Tipau Street, Torbay - CV 990k, sold for 1.770mil. Crazy asf. Cross lease & garage unconsented.
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