The average value of New Zealand homes gained $50,000 over the three months of the current Covid Delta outbreak and now sits at just over $1 million.
According to the latest House Price Index figures from Quotable Value, the average value of NZ dwellings increased from $952,078 at the end of July, just before the latest Covid outbreak forced the country into lockdowns, to $1,002,153 at the end of October.
That's an increase of $50,075, or 5.3%, over that three month period.
The biggest gain in property values occurred in an area that has supposedly been one of the worst affected economically by the latest outbreak, Queenstown-Lakes, where the average dwelling value increased by $137,397 over the last three months.
That was followed by Auckland +$75,219, Tauranga +$68,876 and Christchurch +$66,272.
The smallest increase was in Invercargill where the average residential property value increased by a comparatively modest $20,869 over the three months to October, followed by Marlborough +$22,703 and Dunedin +$25,749.
In percentage terms the biggest increase over the last three months was in Christchurch at 10%, followed by Queenstown-Lakes 9.6% and Tauranga 6.6%.
There are now four centres where the average dwelling value is over $1 million - Queenstown-Lakes $1,572,535, Auckland $1,427,896, Tauranga $1,114,616 and Wellington Region $1,068,669.
"There's certainly still buyers out there who are keen to commit to property transactions despite ongoing uncertainty around Covid-19 and the impacts this is likely to have on the economic recovery," QV General Manager David Nagel said.
"Credit availability continues to tighten as banks respond to Reserve Bank concerns around property market stability, particularly with interest rates on the rise.
"But a continued lack of supply has resulted in a resurgence in prices across all 16 metro locations we monitor," he said.
The chart below shows the average dwelling value in all main urban districts at the end of October and their percentage change over the previous three months.
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110 Comments
Crazy gains , wonder when it will end ? Still showing no sign of stopping average house 2 million here we come . This hyper inflation in house prices would have to be unprecedented as I recall maybe a Venezuela outcome .
Indeed, to what extent are houses rising vs. dollars falling? Houses may be up 30% or more in nzd, but getting cheaper every day in bitcoin. Are the biggest mortgage holders essentially shorting the nzd? Might be a solid bet.
Indeed, to what extent are houses rising vs. dollars falling?
NZD has not been falling against other currencies such as USD in the past 24 months, but the price of gold in NZD has increased approx 40% over the same time period. That being said, the purchasing power of NZD is likely to be going backwards. The main vehicle in by which money is 'created' in fiat economies like NZ and Australia in particular is through the issuance of mortgages. So the money supply is expanding and the purchasing power of NZD is weakening. Benefits accruing to landowners as that is the banks create the credit to bid up the price of land. The problem is that the sheeple think they've hit the pot of gold because house prices are off the richter.
IMO, the under-performance of gold is a little bit overstated as it appears to be holding its own in the face of rampant monetary destruction. The nation's savings are all concentrated in a single trade (much like China) while everything seems to be tumbling or on the verge of falling off a cliff economically.
In essence all mortgage holders are kind of shorting the nzd. Inflation is great long term if you have a mortgage and reduces it’s real value. If inflation is running at 5% then your 1 million dollar mortgage is getting 50 grand cheaper every year
Inflation is great long term if you have a mortgage and reduces it’s real value. If inflation is running at 5% then your 1 million dollar mortgage is getting 50 grand cheaper every year
Disagree. Yours is the 'accepted thinking'. While the cost of goods and services and money supply are both increasing, if income levels are not increasing, then your bubble is screwed. You still need a steady stream of marginal buyers.
Yeah I see this too often. People praising inflation as it erodes the value of your loan away. I think you‘ll find the higher the inflation, the higher the interest charged by the banks.
The amount of value eroded by inflation is made up by the interest charged over the same period.
Yeah I see this too often. People praising inflation as it erodes the value of your loan away. I think you‘ll find the higher the inflation, the higher the interest charged by the banks.
Wasn't entirely my point. My point was that incomes are barely tracking CPI inflation. But are far behind monetary expansion, which is reflected in house prices (banks lending credit into existence). Marginal buyers are crucial for any property bubble.
Rampant increases in house prices across the country means that "fear of missing out" syndrome has become widespread among home buyers.
But if the panic continues, prices will surge higher.
The more buyers who are prepared to stand back from the market and give it a chance to cool, the better off all buyers will be.
TTP
That will only happen in aggregate when the supply of credit is restricted.
The bankers pull all the strings.
I think the availability and price of credit moves the prices more than constrained supply caused by pumping migration. The availability of credit is drying up (DTI) and the cost is increasing so all the strings are being pulled. What remains is FOMO and RE propaganda sites such as Homes, how long that last gasp will last is anyone's guess but I think we will see the market turn soon.
It's over team, interest rates have jumped, listings are up 20% in most areas and banks are restricting lending. You're seeing settlements from the last round at the bar at 2am.
Auckland is still going crazy, no evidence of a slowdown...
We hit the peak last month. Looking around at Central Auckland listings (where I am living and considering an upgrade) there is a huge amount of new listings and quality properties are starting to pass in at auction. NZ Herald trying their best to continue the FOMO but it is dissipating.
Passed in doesn't mean there is no demand. It means sellers want more than before. When buyers are cognisant of the situation they will understand this is the new normal and start pushing their budgets up.
I remember supply and demand from ECON101. At the moment demand has exceeded supply. With a dearth of new listings combined with buyers reducing their budgets as a result of sharp increase in interest rates, prices cannot continue to rise. I don't predict a crash, but people rushing out putting in silly pre auction offers or paying up for junk will be a thing of the past.
Talking to my conveyancing lawyer in auckland, they are busier than busy with settlements.
How much of those new listings are just pent up supply from owners not willing to list during lockdown? I would say a large portion of new listings are from owners now realizing that level 2 and 1 as we know it are no longer and that there’s therefore no point waiting to list any longer
I will be in front of the tv for once when the block nz auctions are broadcast over the weekend. Yes!
Maybe finished in Auckland after repeated lockdowns but if a fraction of those surveyed wanting to leave actually leave everywhere else might get one last lift.
On an even more positive note, a mate of mine reckons the lockdown/ gang/ 3 waters/ whatever else protests could get ugly and escalate into springbok tour type action from this weekend.
It is frustrating how long it takes to get the data on sale prices in Wellington. Prices are only just trickling in from early September, or prior. Two or more months delay just adds to the FOMO.
nah, I say there's still one little surge left over summer
Sorry to say you may be right here, as Auckland breaks free and hits the beach this summer all number of housing decisions will be made.
Property plays so much off sentiment, and there will be more buoyant sentiment as we hit summer and the restrictions ease off.
Also, people will be conscious that this will be the last chance before interest rates surge next year.
Also factor in that developers are now in the hunt en masse for development sites since the government's planning announcements. Those 600 square metre sites that might have sold for $1.5 mill will now sell for at least $2 mill. Even if this only accounts for 5-10% of transactions, it's still going to lift the median that little bit higher.
So one last run of the bull market, and prices to go 5-10% higher, before the lull and potential fall away from autumn 2022...
You seem to be a long way from the action Amigo. Listing are not up 20% anywhere we are watching. Suggest you upgrade from those cheap seats.
Epic failure by the RBNZ and Government. This will go down in the history books.
Yep head in the sand stuff..and they get paid to control this from happening. if they were in the private sector they would of been fired a long time ago, it seems incompetence is one of the criteria needed to be in government.
I don't think anyone has truly believed there is any intent in RBNZ, government and the Treasury to prevent this happening, nor has their been for the last decade or two. They seem to have believed the "wealth effect" claptrap and been happy to enable living large off debt others must pay.
Disgraceful.
Let's ask ourselves, "Why has this happened?"
I, like you, have little time for the current RBNZ/Government policy that has produces this debacle. But many of the decision makers aren't stupid. Rather, they are scared stiff of the alternative.
John Key; a man with considerable financial markets acumen on all levels, was elected on a platform of reforming the housing market. Something scarred the daylights out of him when he 'got in', which saw him reneg on his election promises.
Jacinda Ardern, also elected to 'do something' about the housing market, but with far less financial nous than Key, was similarly frightened off (by the same bureaucratic advisors?).
And so, here we all are. Governed and Regulated by the Fearful, who hope that some sort of miracle will happen to make everything all right. Guess what? One isn't coming, and one day, someone will have the courage to act in our long-term interests.
"When all there is left is Hope, there is no hope"
Nice little summary. However, I don't believe anyone will have the courage. Thus the situation will just implode and the leaders and bankers will blame COVID.
That is the 'plan'.
Hi Rastus. You are correct, the question is when?
The explanation is political - not bureaucratic.
Cabinet will never vote to undertake major reforms that will result in their parties (usually plural in the MMP era) not being re-elected.
I like key however he was a fraud and not able to do any magic or pull rabbits so to speak. That was obvious to me when they had the gfc summit and the grand idea was adventure bike tracks. Go along some of them now even the popular ones and you will have to ride in between the weeds covering it.
Further proof of the damage this government has done to our dollar...
What are you talking about? The Kiwi is near all time highs against the A$ and the trade weighted index is currently 76 with a 40y average of 66 and 5y average of 73.8.
Do better.
Who can afford to accept NZD as a form of payment for work rendered, when it is so debased the unit cost of shelter is ~$1,000,000 and it takes a few $millions or more to save $10,000 p.a. at current deposit interest rates? Oh, I nearly forgot, financial repression is rabid with inflation last reported at 4.9%.
Indeed but our primary produce is still attracting good prices so there will support for that at least. More urgent is the combination of factors hitting the non-asset owning working class, their wages actually decreased 2.4% during the same period when you account for that CPI.
Basically even now house prices are rising appox $4000 per week and still...
Insanity
What's the average wage, 60k?
60K is annually and this is in three months :).
From March Last year to now think has gone up from $55000 to million.
60k normally would seem amazingly high, but these days it's a drop in the bucket.
We have got to the point now where people call a 1% lift over a month 'minimal'. Annualised that's still 12%, which is significant.
Its around $1150 before tax per week - I mean really : most are nowhere near that
Now experts, Orr's of NZ representing and supporting ponzi will again say that that data lags (as they say everytime) and market has started to cool though data like before suggests that that house prices are increasing even now despite many claiming that housing market is cooling.
Mr Orr will still have reason to wait and watch and Jacinda lucky that is able to hide behind covid19.
Covid will be all over bar the shouting by Easter -- be a BAU situation - 10 -20 deaths a week - under 1000 a year -- and significantly less than heart 8000 and cancer 9000 as a killer in NZ ---
Thats when National need to announce the new leader and thats when rising interest rates will really start hurting houseowners and landllords will pass it on to tenants as well -- and thats when Orr and Jacinda will really be under fire !
I hope you are right but fear you might be wrong. National still appear a fractious & disunited lot. Personal ambitions outweigh party loyalty and indeed, the good of the nation, that they are meant to represent. At the moment this penny dreadful government of ours is having its weaknesses and incompetence exposed. If, in the near future, National start up on a palace revolution they will just be giving them a free pass.
The problem for young Kiwis is National are even worse on housing. They just want to exempt the free money given to property from any tax, leaving young Kiwi workers to pay all the taxes.
Not to forget that this price rise was in lockdown and can understand what will happen from here on hoing into summer season.
And RBNZ says that it is not their doing......
Can understand them fibbing but bigger surprise is that they also get away with lies and manipulation, no one raising or pointing them out except maybe a one or two article in media.
I've always said that every other town in NZ is just an Auckland cluster%@$& awaiting to happen. And so it is happening. The same silly land-use rules that Auckland uses, so do most other NZ towns and regions.
Just as Auckland has a wannabe Walter Mitty complex when comparing itself to other international cities, most NZ towns and their elected and public representatives secretly want to be king of something bigger.
Even if that something bigger is turning their town unaffordable to a large portion of the people that live there.
(From Aussie. Is it any different here? No)
Criminals pumping nefarious earnings into the housing market could be contributing to high house prices across the country, locking people out of owning a home....Criminals are able to use family members or other third parties with no criminal record to buy property...in their name...."A $2 company and off you go, no one will know what's going on."
https://www.perthnow.com.au/politics/money-laundering-pumps-up-housing-…
Red herring to distract from the real criminals - like Mr orr & co.
I wouldn't underestimate this. I personally know of Colleagues that have brought for offshore Friends & Relatives. Goodness knows how the money flows, But there are many circumventing the offshore buyer rules. Is it money laundering in some cases highly likely.
However I have to agree the real criminal's are the Reserve Bank and a complicit government. Basically zero population growth since Covid began, we are building flat out. So still points to the impacts of QE and low interest rates.
The Finance Intelligence Group traces all money flows. It's al there and available if an investigation is required.
Yes. I have a colleague who's sister in-law (Chinese-American, NZ resident) is actively buying property for overseas parents, to get money 'somewhere safe'....
November 2020: PM Jacinda Ardern on house prices: 'It just cannot keep increasing at the rate that it is'
https://www.nzherald.co.nz/nz/pm-jacinda-ardern-on-house-prices-it-just…
LOL
'It just cannot keep increasing at the rate that it is'
Everyone jumped to conclusions and thought she meant price rises would slow. But it seems she really meant that it just cannot keep increasing at such a slow rate. A higher rate of price rises were required.
Haha LOL
She has certainly won this race prices have gone up faster on her watch than any others.
I wonder though if the young people of NZ really care anymore, is 800k any more realistic that a million or two for these folk as their wages continue to actually be decreased relative to inflation?
Highlights why property investment is always a winner long term... except these days you can earn hundreds of thousands within months.
Is this data taken from properties that have sold (i.e. gone unconditional) in the month, or properties that have settled? If the latter this data is on average two months old. I truly believe we've seen the peak.
You need to adjust your belief.
We have not peaked.
The prices are based on properties going unconditional, so the data isn't that old.
Aside from selling my home, is there a way I can short NZ property?
Nope. If your that confident of a market crash then sell your house and rent and wait for the crash. If history is anything to go by you will leave that rental in a box loaded into the back of a black hearse before that happens.
When the politicians, central bankers and Treasury advisors are all invested in property it's dangerous to bet against them. They certainly seem prepared to pull out all the stops any time to protect property.
Open a trading account and short a REIT heavily weighted in NZ property
Why do people always pretend to be surprised when house prices increase? New Zealand housing has been indomitable. I suspect they will get a tailwind with border reopening and the resumption of migration.
Hate to say it but property in NZ could break the $2m barrier in only a few years time. Immigration from troubled waters combined with climate change will result in NZ becoming a bolt hole. This is no longer about what the local serfs can afford, NZ house pricing will go international.
Hate to say it but property in NZ could break the $2m barrier in only a few years time. Immigration from troubled waters combined with climate change will result in NZ becoming a bolt hole. This is no longer about what the local serfs can afford, NZ house pricing will go international.
I see. The world's wealthy want nothing but to pay a king's ransom to live in suburban NZ. You may have been reading too much Granny Herald.
maybe not -- but they will certainly pay to live in semi rural, coastal and private locations -- which will have a knock on effect on prices in better suburban areas - and so on down the chain -
We have not really caught up with the demand despite 21 montsh of border closures -- and when they reopen there will be a huge influx of already granted visa applicants --
Only rising interest rates will save us at the moment
RBNZ already indicated they'd only raise by 25bps per meeting which is unlikely to scare the market this year.
Yep but rates are moving up anyway.
There will undoubtedly be FOMO before Xmas - everyone knows significantly higher rates are on their way next year.
but they will certainly pay to live in semi rural, coastal and private locations -- which will have a knock on effect on prices in better suburban areas - and so on down the chain -
OK. Because 'you reckon'. Not going to fight this.
As I have said repeatedly a market consists of buyers and sellers with an agreed price funded in some cases by mortgages
Price rising 20% pa plus rate rises ensure the market changes. Meaning rising prices will slow and sales will drop. Sales in last 4 months in Auckland are well down on last year mania and are reverting to the 2010-19 mean. Coming recession with plummeting growth forecasts in China and USA ensure that market will be further declining. It is called the economic cycle which central banks have tried to eliminate by cutting rates for last 7 years and using QE. That game is over
Thats right, We are not in a market when peoples can buy real assets with borowed money that doesnt existe, you ultimatery get todays assets with prices that are actualy future expected prices. ( plus distorted prices from qe and supressed interest rates.)
So here we are with a disconected prices compare from todays economy
Can we all agree that it wasn’t the Chinese who were causing house prices to go up? Shame on the racists in Labour and NZ First.
You think that money still isn't finding a way to get into the country?
That's a lovely planet you live on.
Exactly. Having said that, while a factor, it probably has been exaggerated.
It's definitely the Chinese, there are tens of thousands of them in Auckland, still buying up large, developing new sites. Take a drive around so many building sites where it's 100% Chinese workers, every tradie that comes on site & the real estate guy, working 7 days a week, dawn till dusk when they can get away with it. Built & fitted out to Chinese tastes and on sold to Chinese through their networks.
Doing stuff like this, LOL
https://www.nzherald.co.nz/business/blocked-botch-up-new-hobsonville-po…
Clowns
BTW these developers talk a great game, which I don't buy at all.
They have owned an amazing, huge site in central New Lynn for many years, and have created masterplans with pretty pictures of thousands of apartments.
All they have delivered is a couple of hundred townhouses over the past few years.
Playing land banking games.
a good 4 wd will sort this problem ! but can it fit inside the garage is the question
Wasn’t really anything to do with being racist rather an accurate observation that the Chinese appeared to be cleaning up at Auctions.
I love the Chinese they’re a pleasure do do business with. Pure efficiency.
Our Chinese neighbours are lovely as well.
So, this is a great example of what I have been talking about for months - sites selling for crazy prices not based on their current zoning, but on what the zoning will become over the next year.
This kind of thing will be helping to support higher prices:. https://www.nzherald.co.nz/property/the-spinoff-non-subdividable-proper…
20 permanent visa migrants , Doctor, Engineers, Veterinarian, Developer and an Architect arrived in NZ 2017 and just recently left on July 2021, grateful for the 4 year TTC. I was one of the 20. More wanted to leave but covid caused a temporary change in plans. Only temporary. Rising house prices the culprit but more so the quality of the homes for the value was the overwhelming consensus view on our decision to leave. The media is consistent on reporting house price gains while government with central banks accelerate house appreciation. Yet they all deliberately fail to report the unspoken truth. Skilled people are leaving and many more are no longer thinking of coming. The government is crippling New Zealand for many years to come. The unspoken truth.
Yeah, covid and housing price will be the key factors make people leave New Zealand. And it's not about what we got ourselves into this mess that makes people want to leave but how. Lacking of medical resources and facilities plus housing supply shortages have been there for many years. Every year and every election there are talks around those issues. But nothing gets done, nothing get planned ahead. The governments never get ahead of these. It's the disappointments and losing confidence in those who are in power drives skilled people out of New Zealand.
The temperate climate in New Zealand means the quality of our homes can be lower, especially in Auckland.
This is joke right? Or perhaps a fine example of why kiwi's accept substandard homes for elevated prices. As a developer I would thank, however, in good conscience and best practice I would prefer to warn you in the face of substandard building codes. We could not build this way and since there is no desire to change at the highest level, we decided to leave. We are not in the business of placing families and children in harms way for margin. I don't know why I'm even responding to this comment.....perhaps because I'm in between meetings...Perhaps you should google New Zealand homes Damp cold and moldy. Well known around the world for your fine quality and more so for such an accepting peoples to place their families in homes without adequate heating, insulation or modern building codes.
Inadequacies in quality can be easily mitigated by the purchase of an extra pullover, woolen hat and thick socks and opening a window occasionally. Kiwis have traditionally had poor quality housing stock but it didn't stop us from climbing Everest first, splitting the atom and making a significant contribution to Allied victory in the Battle of Britain.
So because of a bunch of things that all happened either much more than, or nearly, 50 years ago, you think that we shouldn't worry about damp and mouldy houses in 2021? Just to make sure I understand your argument...
HOORAY Zachary for some common bloody sense. In the north from tauranga and above at least. I had to tell my tenant worker not to dry his clothes on the clothes horse in the lounge (umm dumb) and to use the clothesline outside or under the covered verandah. His question to me what is a clothesline? Umm dumber!
None of that is required with a central ducted heat pump run 24/7. T shirt year round.
Where did you go from NZ?
Great job Adrian Orr, you're really reining those house prices in aren't you.
You can start doing your job that you're paid to do any time now.
As an aspiring FHB in Auckland, this is very depressing.. Even with myself and my partner earning a decent wage, it is impossible to keep up..
I'll say it (again).
Mobilise the renting community and organise rolling rent strikes. This will create a risk in being a property investor - it is the removal of risk by mr orr and WFF that enables the continual uplift in prices.
This is one fast way to get evicted and blacklisted
I did see someone suggesting renters click as many real estate ads as possible, every day. The click through costs really add up if enough are doing it. A technological protest, as it were.
Not because prices are the RE industry's fault, but because "a problem shared is a problem solved".
If you don't have commitments keeping you here just go to Australia, even renting in Sydney you'll end up with a lot more savings than if you stay here. It's what I did and I highly recommend it. It's a much more fun city with better weather than Auckland too.
Awesome city until you have young ones the it’s just bloody awful. Unless you can afford to continue to live inner city or on the beaches it quickly becomes the epitome of a rat race. I did 8 years there.
Yes that's really what I meant by commitments here. You wouldn't normally take a family there unless you were loaded or going for a really high paying job. I did 7 years and saved a lot while renting in Bondi. Other parts of Australia the equation makes more sense family to have a family than here (though not Byron either).
Council CVs coming out in December.
We bought end of last year. Our current homes value is $275k more than we paid you couldn’t make this sht up. Insane.
Alot people going to feel rich when they come out. May feel poorer if rates increase though...
Rates would be going up even if values were the same they are calculated on your share of the bill which is ever increasing.
From Auckland Council website, clearly property value and the % of increase in value has an impact on your rates paid:
Any rates increase is determined by your property value increase compared with the average increase across the Auckland region.
If your property has increased by more than the average, you may pay more than the average 3.5 per cent rates increase for the 2022/2023 year.
We do not need the extra but oh well
We do not need the extra but oh well
DP sorry... much like my property value increasing in doubles lolz
Just spent a few sun-soaked days in Godzones new city of the sun - New Plymouth. I can tell you Summer Madness is going into overdrive. Kool & The Gang at the Bowl of Brooklands?
Fantastic news for some, terrible news for others. Everything has already been said over the last 12 months. The 3 main causes in chronological order- immigration, CGT fail, RBNZ interest rates. Personally even though my house is now 1.3, a sad day for NZ and what we used to have.
Yes I agree. The value doesn’t matter for us either as we only have one property but I’m just glad we bought when we did otherwise we’d have a pretty diluted deposit right now.
10 % in chch that heading straight to a good 40% yoy. yet rbnz wait and see inflation 4.9 ocr 0.5 nothing to see here
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