The rate at which house prices are falling has doubled over the last two months

Property / news

House prices are now falling significantly in all major centres

16th Jun 22, 10:10am by Greg Ninness

The decline in house prices is gathering pace, with the biggest falls over the last three months occurring in Auckland, Napier, Wellington and Dunedin.

According to the Real Estate Institute of New Zealand's House Price Index (HPI) for May, overall prices throughout the country declined 5.6% over the three months to the end of May.

That's up from a 3.5% decrease in prices over the three months to the end of April, and a 2.8% decrease over the three months to the end of March.

That means the rate at which house prices are declining has doubled over the last two months.

The REINZ's HPI is probably the best measure of price movements in the housing market, because it is based on sales as they become unconditional rather than as they settle, which makes it very up to date, and it takes into account differences in the type of properties sold each month.

So it less affected by changes in the composition of housing sales each month compared to other measures such as median or average prices, although these are also useful indicators.

May's HPI shows that prices declines are now a feature of the market throughout the country, with Queenstown-Lakes the only district to a show an increase in price over the last three months, although the increase was just 0.3%.

The biggest fall in prices has occurred in the Wellington region where declines over the last three months ranged from 9.2% in Upper Hutt to 11.3% in Wellington City, with the regional price index down 9.7%.

In the Auckland region the HPI was down 6.6% over the three months to May, and in Christchurch it was down 4.9%.

Prices in Wellington are now also significantly lower than they were at this time last year, while Auckland's upmarket central suburbs and Dunedin are also showing annual price falls.

The table below shows the change in the HPI in the main urban districts over one, three and 12 months to May.

The comment stream on this article is now closed.

REINZ House Price Index May 2022

You can have articles like this delivered directly to your inbox via our free Property Newsletter. We send it out 3-5 times a week with all of our property-related news, including auction results, interest rate movements and market commentary and analysis. To start receiving them, register here (it's free) and when approved you can select any of our free email newsletters.

We welcome your comments below. If you are not already registered, please register to comment

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

89 Comments

by Toye | 16th Jun 22, 10:16am 1655331372

The rate of decline is still gathering pace and we are already tracking much worse than any of the modern house market crashes that have often wiped out 50%+ of a typical house in those countries - see chart (credit Miguel):

https://imgur.com/a/QrRprSn

We are not special. I would no longer be suprised to see property values halve in the next year or two.

by Nzdan | 16th Jun 22, 10:41am 1655332873

Ireland fell nearly 70%. They were talking about a house price income ratio of 3.7 if house prices fell 60% in 2007 which if my math is correct their pre-crash ratios were around 9 - 10.

Secondly, with a 68% price decline from the peak, we estimate the price/income ratio stands at 2.8x (with a 60% price decline the ratio stands at 3.7x). This compares to a long-term average of 3.5x - 4.0x in the UK.

http://webcache.googleusercontent.com/search?q=cache:JjhKMPM2c7wJ:www.f…

by Chaosinflesh | 16th Jun 22, 10:42am 1655332958

Was just discussing this with my wife last night lol. At the rate it's going, we might be able to get a house purchase before we need to pay the NHS fees to emigrate to the UK next year...

So the question we are asking ourselves is, what's better for our children's future? A house in NZ, or moving to a country that has reasonable DTI already in place even if we can't buy straight off the plane?

As I've said before, if TOP don't get anywhere next year, we were planning on being off, but my wife's employer has warned of impending layoffs later this year, so we may be accelerating plans :P

by agnostium | 16th Jun 22, 11:50am 1655337039

"wife's employer has warned of impending layoffs later this year"

Any chance you could share industry?

by Chaosinflesh | 16th Jun 22, 12:18pm 1655338724

private education - very discretionary spending. to be fair, they're hopeful things will pick back up, but we don't see it happening given the ludicrous amount of money locked into rising housing costs.

by Esprit | 16th Jun 22, 11:51am 1655337111

Spoiler alert, TOP aren't getting anywhere next year so action your plans now.

by El Torso | 16th Jun 22, 1:06pm 1655341604

Surely people are going to consider other options than middle of the road National or Labour some day? All both of them seem to do is through money at symptoms of poverty instead of looking at how to grow the productive economy, particularly outside of the main centres.

by OldSkoolEconomics | 16th Jun 22, 1:20pm 1655342446

I agree with this - giving labour such a strong majority was a huge mistake as they have done whatever they wanted to

National would do the same. i think it will be about tactical voting for partners in a coalition with strong policies and the egos to hold government to account.

by morepork | 16th Jun 22, 3:07pm 1655348845

Nah, people think they want change, but really they want the same thing in a different colour

by lekkerbydiesee | 17th Jun 22, 10:11am 1655417478

spoiler alert - TOP aren't getting anywhere in the next election. yep, I reckon probably time to bail.

by Final Account | 16th Jun 22, 11:06am 1655334375

Are rates bills going to decrease????

by Sam B | 16th Jun 22, 11:08am 1655334495

Have council costs decreased?

by dumbthoughts | 16th Jun 22, 5:21pm 1655356861

Have councils ever made any attempt to cut costs?

by HouseMouse | 16th Jun 22, 7:41pm 1655365294

Many times. Quite recently, Auckland Council cut around 1500 roles

by RickStrauss | 17th Jun 22, 12:38pm 1655426280

Also the opposite. They've cut staff, but they're supporting NIMBYism that drives more sprawl they cannot then afford to maintain.

by Final Account | 17th Jun 22, 10:02am 1655416943

Sorry I wasn't clearer - the portion of your rates build up based on your property valuation should go down (but it won't).

I agree its VERY difficult for councils not to sign the invoices off of greasy consultants and contractors doing sweet FA, and bow down for the new shiny IT system and associated over priced license and technician costs that also deliver sweet FA. Also work from home programs that deliver sweet FA. Infrastructure consultants 20 years too late to the party, can't not pay them too can we because they've delivered results haven't they? Probably in the form of a new Audi or 3 in the driveway of most engineers lucky enough to contract to the council milky bosum. Don't get me started on planners.

If someone with any talent was granted full visibility across council costs then damn straight the costs would decrease. Their procurement model is broken.

by lekkerbydiesee | 17th Jun 22, 10:17am 1655417865

they should sack every council manager and start again. bloated bureaucracy delivering nothing except increased rates, taxes and red tape.

by Juzz | 17th Jun 22, 12:55pm 1655427316

RV won't need to come down, they're alot closer to fundamental value than asking prices.

by Nzdan | 16th Jun 22, 11:19am 1655335196

Hopefully insurance premiums drop.

by Rumpole | 16th Jun 22, 12:30pm 1655339440

Council rates will definitely decrease once christmas day falls on good friday.

by DTRH | 16th Jun 22, 11:17am 1655335062

Who will buy a house right now with price’s dropping $5000 a week in some places, rates and inflation are still climbing this will accelerate decline, a 50% drop is best case scenario.

by redcows1 | 16th Jun 22, 12:26pm 1655339168

Family just sold and bought. Same market, they got offered what they wanted and were able to offer at the low end for a house they'd been interested in for months.

Able to move to a place they wanted to be and lower their mortgage considerably.

Unusual maybe, but life goes on.

by Jamin | 16th Jun 22, 12:31pm 1655339498

50% drop? I would love to make a wager with you on that. What time line are you talking? 2 years.

People who are getting all hyped up and saying we are in for a Irish style collapse need for two things to happen.

— large oversupply of housing ( seems unlikely)

— high unemployment ( could happen, but seems a long way off )

by Sam B | 16th Jun 22, 12:44pm 1655340248

Withdrawal of credit and higher interest rates are very important. Every month the amount that people can borrow is falling, even if their income is stable. Those who can afford to hold on to property and not sell into a falling market may choose to hold; but the market price is set by transactions that happen, not those that don't. Maybe the majority of property owners decide the current prices are fair, and refuse to sell for less; but in that case forced sales will decide the market price.

by Albert2020 | 16th Jun 22, 12:44pm 1655340250

not really, you just need reduced credit growth which is happening now and will continue for sometime it would seem

by DTRH | 16th Jun 22, 12:45pm 1655340337

At 12 x average wage couples income in Auckland for a 3 bedroom box on tiny piece of land. When families with average wages can afford the market will find a bottom so I would say around two years 50% too 60% drop in house prices and it will be touch and go if average wage family can purchase a house.

by lucenera | 16th Jun 22, 12:57pm 1655341033

you are in denial

maths is easy:

cost of money goes up 100% => quantity of money down 50%

peak of market you could borrow at 3% very soon you will need 7%

remove (maybe) 20% deposit for somebody, add an estimate for those happy peps in interest only and the game is easy.

50% down from November 2021 is not far fetched at all

NB: My previous estimate whas -37%, and I was laughed at for it, now I am being even more convinced that was a prudential number

by Independent_Observer | 16th Jun 22, 12:59pm 1655341178

Add in a sharemarket/bond market crash simultaneously (as we are seeing) and peoples kiwisavers will also get demolished....and there goes part of the deposit FHB's had previously.

by Nzdan | 16th Jun 22, 12:57pm 1655341020

With how far mortgage rates have already come, borrowing power is down 30%. That is, people need an additional 30% income to keep things in line. Unless you think people weren't borrowing to the maximum of what they could afford....

by Smudge02 | 16th Jun 22, 12:58pm 1655341107

People who are getting all hyped up

At least you didn't use the term "DGM". You don't see that much on this site anymore.........for very good reason!

by Jamin | 16th Jun 22, 1:35pm 1655343306

There have been a lot of replies to my comment saying there is no way house prices are going to fall 50%

So who is going to take my wager and go on record saying they will?

A similar wager didn’t work out well for Bernard Hickey during the GFC. But hey this time it’s different 😉

by Brutus Iscariot | 16th Jun 22, 1:53pm 1655344398

They will in real terms over a 2-3 year period, but not in nominal terms.

by mfd | 16th Jun 22, 2:39pm 1655347160

My predictive powers don't extend to such certainty I'm afraid - I prefer to think in probabilities and consider risk accordingly.

The risk of house prices falling to 50% of peak is definitely not zero - worse has happened in other countries and it's obviously a possibility here. We are not special. But it's certainly not guaranteed, and I'd suggest such a big fall is unlikely. Perhaps 10%, 20% chance?

It looks extremely likely the current momentum will take us to a 20% fall in prices from peak (we're half way there already afterall and interest rate rises keep coming). Perhaps a similar 10-20% chance that we escape this fate?

But hey, who knows? Just do your best to be in a situation where a 10-20% risk wouldn't wipe you out.

by Independent_Observer | 16th Jun 22, 2:43pm 1655347385

Do you already have a wager that property prices won't fall? (i.e. highly leveraged against property?)

And if so, is that wager not enough in itself?

by lucenera | 16th Jun 22, 2:47pm 1655347623

it depends...

what odds you offer?

you are excluding the possibility, so probably 1:100?

if that is the case let me know, I'll make a custom liquidity pool, you put the money and I buy the share.

by Sam B | 16th Jun 22, 2:50pm 1655347837

You're saying 'no way'. I think it's unlikely to be that much, but definitely possible.

If you're sure it's 'no way', would you offer me 5:1 odds? I'd take that.

by HouseMouse | 16th Jun 22, 3:17pm 1655349446

Yeah I don't think a 50% drop is credible. I rate it a 3-5% chance

A 25-30% drop certainly is quite likely At least a 50-60% chance.

by JamesM | 16th Jun 22, 9:40pm 1655372446

I'm with House Mouse. I reckon a 25-30% drop is the likely outcome. I personally think we are down 15% already.

Interesting to note the sharemarket is down 20%. My pick is it will drop another 5-10%.

So why not a bigger drop in house prices?

1. Because we still have a huge amount of cash in our economic system

2. Because a 50% drop would mean our entire economy would collapse

3. Because next year is an election year and Labour will do anything to prevent a catastrophic fall in house prices whilst they are trying to get reelected

by chebbo | 16th Jun 22, 10:14pm 1655374460

Point 2 isn't a reason it won't happen, unfortunately, and point 3 is irrelevant. Politicians aren't able to stop an asset price bubble bursting even if they wanted to.

by tuisbest | 16th Jun 22, 11:03pm 1655377407

I don't understand why a '50% crash' would cause the economy to collapse?

For one, I think people talking about a 50% crash means a 30% crash, so a crash taking us to the start of 2020. That wasn't that long ago? I feel bad for FHBs who are neck deep in debt, but people who bought before 2020 should generally be OK, right? Sure, the REAs and ticket clippers might have a hard time, but.. nevermind. Construction guys and gals would need to come up with new ideas or move to Oz. And businesses who borrowed against residential property could be feeling the pinch.

My partner and I (like many of our friends) are not in any of those affected sectors, so a 30% fall in horribly overvalued house prices hardly sounds like Armageddon to me. What am I missing?

by Small Kev | 16th Jun 22, 11:36pm 1655379407

“1. Because we still have a huge amount of cash in our economic system

2. Because a 50% drop would mean our entire economy would collapse

3. Because next year is an election year and Labour will do anything to prevent a catastrophic fall in house prices whilst they are trying to get reelected”

plus the approved and to be approved fast tracking visa, they’ve been trying to keep this quiet.

by denature | 17th Jun 22, 8:59am 1655413146

We do not have a huge amount of cash in our economic system.

We have a huge amount of liquidity.

They are not the same thing.

by lekkerbydiesee | 17th Jun 22, 10:23am 1655418233

- large oversupply - very possible - with emigration ramping up the way it is, this is a given. secondly, much land has been rezoned. Once they break the building material suppliers cartel, and supply will continue to fly.

- high unemployment - stand by - this is only a matter of time. The confidence has only really dipped this week, by spring unemployment will be ticking much higher than today. NZ employers are very cautious on new hires. They will rather overwork existing staff in most cases.

by RickStrauss | 17th Jun 22, 12:48pm 1655426922

I was just reading some 2007 Irish media coverage the other day. They were saying a crash couldn't happen because they had major supply shortage. Same rhetoric.

by Juzz | 17th Jun 22, 12:56pm 1655427386

Dont worry unemployment will rise rapidly

by user123 | 17th Jun 22, 6:20pm 1655446841

"— large oversupply of housing (seems unlikely)

— high unemployment (could happen, but seems a long way off )"

2 years of record house building and negative migration has gone a long way to balancing out the shortage.

Unemployment is a lagging indicator. By this time next year it will be climbing steadily as the developed world is likely in recession.

by IT GUY | 16th Jun 22, 11:44am 1655336641

In the past, and sure this recession may be different, a lot of the better houses that you actually want to buy as a Family come off the market. This leaves the leaky rubbish and the ex rentals as was the case in the GFC. I managed to pick up a divorce forced sale during the GFC and did well but it was pretty hard going.

Its been a long since NZ has sen falling values like this, especially how fast they are falling. It's always hard to trade something you don't normally see. The other issue is the cost of doing major renovations means that some of the worse off houses are almost land value only, yet owners see unicorns and rainbows. Going to be interesting for sure

by Sam B | 16th Jun 22, 12:38pm 1655339911

I think there'll be a big effect on the averages in Auckland, at least, from the collapse in demand for run-down larger suburban sections. They doubled/tripled in price pretty quickly as sites to demo and build townhouses on. There's a site on the corner of my street (Mt Albert) which has failed at auction and has been for sale for a few months now. It's a big, run-down old villa. Last year they probably would have got $2.5m for it as a development site. But if it's not going to be developed, there's a massive drop down to the kind of price point that a family can afford, and that price point continues to drop.

by kiwiana02 | 16th Jun 22, 1:13pm 1655341983

Sam B - also with the recent law changes, many more properties will be open for intensive development in the main cities, which will drive down the premium for development sections.

by Sam B | 16th Jun 22, 1:23pm 1655342600

Yeah. I think the planning change opened up a window for property owners to cash in, but those who didn't move fast enough won't reap that reward, at least not until the next boom (if there is one). Developers were impatient and willing to bid up any old section, but as you say there's actually a huge amount of choice for them if they're not in a hurry.

by morepork | 16th Jun 22, 3:11pm 1655349106

Yeah I agree, with property prices falling overall, and building costs still increasing there is a mighty squeeze in land values going on

by Ahuhyeah | 16th Jun 22, 5:30pm 1655357452

Something a collegue ordered 8 months ago ago arrived today with a 40% increase in cost.

by user123 | 17th Jun 22, 6:24pm 1655447081

I've heard of a developer who has a cleared site with all consents issued for building that he's trying to sell. The site owes him $2.9 and he's been on the phones offering it to others at $1.5. There is going to be immense amounts of pain felt out there as this beast gathers pace.

by Whatwillhappen | 16th Jun 22, 1:55pm 1655344558

This leaves the leaky rubbish and the ex rentals as was the case in the GFC

The market for lemons game in action

by tim52 | 16th Jun 22, 11:59am 1655337569

Prices are still very good "investors". Your still only down about 10% from the peak. I don't think there will be a stronger signal that we are past peak for a generation. The FED just increased rates and our GDP declined.

"If you must panic, panic early. Be scared when you can, not when you have to." Will you be panicking if we get to 8-10% interest?

by Smudge02 | 16th Jun 22, 12:33pm 1655339628

The NZ housing market is becoming like Briscoes. Only a mug pays the full advertised price for anything, just wait a few weeks and there will be a 50% off sale.

by gnx | 16th Jun 22, 2:07pm 1655345272

I’m interested in what the second order effects are going to be. I suspect a lot of construction finance is going to be in real trouble.Second tier financiers were offering first mortgage security and an investment return of 7.5%.May well be a repeat of the finance company collapse. Plenty of people got lured into this because term deposit returns were crap…and I wouldn’t be surprised if the big boys like Craig’s and Jarden have got greedy/desperate and placed investors moolah there too under the disguise of alternative investments.

by denature | 17th Jun 22, 9:04am 1655413452

And what about the banks? It's hard to see any evidence that too big to fail got fixed.

ANZ was the last one that was even pretending to be a bank for business. Over a year ago we got told that the ANZ business office in Auckland was being closed down, we would be serviced by a telephone in Wellington and our former business account manager was being moved to mortgages.

As real estate is out primary "industry" here, we will have a real estate style crash. That means trouble for banks.

But I'm sure they have been increasing their reserves and are completely prepared for this situation.

by taimaiakka0 | 16th Jun 22, 1:55pm 1655344525

The process has just started and has a long way to go.

Vendors are dropping prices now (which was not earlier) but that drop is from their peak high price (which they would ideally wanted to sell, if the ponzi contiued) , not the actual fall as should have been. So still a while to go before one see any meaningfull correction.

by gnx | 16th Jun 22, 2:15pm 1655345723

It’s going to be fascinating and a bit frightening to see the banks position on all of this.

Is a twenty percent deposit really going to be enough when houses a dropping at 3% or more a month??

I can see investors being told they need a fifty percent deposit, P&I only and fifteen year terms….

One thing for sure is that we are going to have to start talking about what a house with only $600 in rent and whole lot of outgoings is really worth. And it ain’t going to be pretty.

by IT GUY | 16th Jun 22, 2:38pm 1655347087

And you will be stress tested at 7.65%.... And require a valuation report

it will be interesting to see where the buyers of distressed property will come from.

While some investors lightened up last year, many are donkey deep and will be in no position to add. Take out investors and its a 40%

drop back to the FTB bid..... Man this could get exceedingly ugly quickly.

Half built houses of failed developers will go for record low. You can see why the bank shares are off so far since xmas.

by chch | 16th Jun 22, 2:10pm 1655345411

The auction today chch, 19 of 24 passed in

by gimmeshelter | 17th Jun 22, 9:28pm 1655458114

I thought Chch might have a soft landing, but maybe not...

by Independent_Observer | 17th Jun 22, 1:28pm 1655429307

I haven't been tracking numbers, but there have been a lot of new homes being listed on a daily basis on trademe there (Chch). Many with asking prices as well.

by Chaosinflesh | 17th Jun 22, 2:18pm 1655432296

I've been tracking TradeMe total listings since late feb (but didn't keep a spreadsheet).

I noted during March a general trend of approx 50-70 new listings per business day (it was somewhat hard to keep track of, because numbers were increasing every minute, but around 7-8pm a whole lot would drop off (I'm guessing those were the listings that had hit their renewal time).

Now we're at just over 34,000 listings in Property for Sale (including relocatables), vs 32,000 back then. So 2,000 new listings (~6% increase) in 3 months...

The really noticeable increases have been Bay of Plenty, Manawatu and Christchurch - though you can see far better details about that elsewhere.

I do wish TradeMe separated relocatables from property though - an old, tiny, relocatable etc. is not really property, it's an item.

by IT GUY | 16th Jun 22, 2:17pm 1655345876

WGTN is on fire!

by taimaiakka0 | 16th Jun 22, 2:22pm 1655346143

https://www.newshub.co.nz/home/money/2022/06/economist-says-falling-ave…

Correct that even with current house price fall, we are still, just where we were last year in November and is not something Big.

Big will be wehn we see data of next to next quarter (end of year) as it just needed a catalyst to speed, which has begun.

by taimaiakka0 | 16th Jun 22, 2:30pm 1655346614

Economist Tony Alexander...Sorry Independent Economist Tony Alexander is changing its tune. Even at the peak of Ponzi was after demand and supply justification but now :

"Those people who were most gripped by FOMO, the fear of missing out, towards the middle of last year or the latter part of 2021, who have bought at the top of the market and are now seeing themselves with the house price falling," Alexander told Newshub Late.

Now people who bought as per him middle of last year are seeing the drop in house price...........wait another six months and his tone will be ......... people who bought in end of 2020 will be feeling the pinch....

As the process has just begun and in any ponzi set up it is eather up Up UP or ..........no room for logic and flattening of price - characteristics of ponzi

by IT GUY | 16th Jun 22, 2:43pm 1655347400

They are in the POOP

Pissed Off Over Paid

by HouseMouse | 16th Jun 22, 3:13pm 1655349227

Wow, -11% in Wellington over three months, we are entering property crash territory.

by IT GUY | 16th Jun 22, 3:32pm 1655350375

Wellington landings are known for being bumpy.......

in other news

Ashley Church: Could a National Government fix the housing market?

Me:Its not broken you plonker.......

by Independent_Observer | 16th Jun 22, 3:58pm 1655351929

Yes there will be low LVR FHB's in the Hutt Valley now in negative equity....they just may not know it yet.

by IT GUY | 16th Jun 22, 4:16pm 1655353017

I used to laugh when WGTN friends would tell me their houses would one day be worth same money as Auckland.... they might one day at 500k average

by loveyourwork | 16th Jun 22, 10:26pm 1655375175

One of my goods mates bought in September in Petone - off the plans 2 bdr townhouse, 125 sq LAND for 810k - FHB. told me he got a good deal. He was planning on moving out of Wellington in 2 years, reckoned he was going to make a nice profit. At the time I made him a $50 wager he wouldn't get his money back - I like my chances.

As a potential FHB I did a lot of DD (partly due to this website - thanks) and decided I wasn't going to be buying into the FOMO in the last two years or so (not always easy). Whilst I want to see the speculators wrecked from this - I do feel bad for some such as my mate who unfortunately isn't the most financially astute..

by Juzz | 17th Jun 22, 12:51pm 1655427093

Many of them may struggle to make payments when refixing with interest rising sharply and no end in sight imho

by Brock Landers | 16th Jun 22, 5:03pm 1655355831

Be quick!

by HouseMouse | 16th Jun 22, 7:43pm 1655365417

CWBW is / was in Wellington. Wonder what he thinks. Wellington prices are collapsing!

by kazadi | 16th Jun 22, 9:25pm 1655371546

Lets not forget that Paul Volker had to raise interest rates to 20% to correct a 13% inflation level.

We are half way there with the inflation and Adrian Mole (Orr) hasn't yet developed the required testicular providence to make the necessary change.

If any of you fellas lived through this, you know what it was like.

by Tee | 17th Jun 22, 6:55am 1655405712

Just saw an ad for a house in Hikurangi. $100,000 price cut, now $429,000. Full section with double garage.

by NZGecko | 17th Jun 22, 7:11am 1655406679

When the asking is $199,000 and above an 8% yield it would be reasonable value.......its comming.

by NZGecko | 17th Jun 22, 7:10am 1655406645

We are in a situation akin to the deciminating Irish housing crash of 10 years ago.......except we have higher and bigger bubble!

by Averageman | 17th Jun 22, 10:19am 1655417994

Is financial pressure building..?

Got telemarketed last night. The calling company was pimping the same story as Propeller Property. "Use a rental to pay off your mortgage".

Had a good laugh. Suggested they call sellers and talk them into accepting reality.

by Appreciate | 17th Jun 22, 10:07am 1655417273

You’re all so dramatic. We’ll see wage growth, helping people manage higher mortgage costs.

yes there will be decreases, but 50%? Tell ‘‘em he’s dreaming

by Averageman | 17th Jun 22, 10:28am 1655418539

Mass wage growth has one of two outcomes. For those that dont manage it well, it equals bankruptcy. For those that do manage it, its more petrol on the inflation fire fuels the wage and price spiral.

Summary it's a choice between burning down every member of economy (espcially retired or beneficiaries), or just burning the risk taking over leveraged and late to market debt holders. A much smaller group.

If a left wing govt that chooses to bail out bank shareholders and debt speculators over the general population, it would be the biggest political sell out in NZ history.

Gonna be interesting to see what happens...

by nznew | 17th Jun 22, 11:41am 1655422873

Any suggestions, we bought last year new build, got the new build rate which is floating and now stands at 3.5% and is valid until end of 2024, I was told that there will be a ~2.75% discount off the variable rate no matter how much it goes up, should I now fix or wait until end of 2024 ?

Cheers

by Juzz | 17th Jun 22, 12:47pm 1655426842

I seem to recall during the pre election leaders debate Jacinda said the Labour party had no plans to control house price inflation. We were already in a bubble then and now we've debased our currency through printing and stimulus driving artificial values even further. It has popped now and the retail market is left holding the bag.

by Zachary Smith | 17th Jun 22, 2:23pm 1655432636

This four bedroom home in Torbay, Auckland sold for 850k yesterday at B&T auction:

https://www.barfoot.co.nz/property/residential/north-shore-city/torbay/…

by tuisbest | 17th Jun 22, 3:55pm 1655438141

Wow, thanks for sharing.

And did this place in Golflands with a 2021 RV of $1.4M just sell for $1.02M? https://www.oneroof.co.nz/estimate/2-98-frank-nobilo-drive-golflands-manukau-city-auckland-1267089

by tuisbest | 17th Jun 22, 4:02pm 1655438523

P.S. That price is 27% under last year's CV and 36% under the QV of 1.6M. Looked like a relatively nice place too.