Barfoot & Thompson had one of its worst July's ever for sales, selling just 611 properties in the month, which was just under half (49%) the 1235 residential properties the rea; estate agency sold in July last year.
July is usually a quiet month for real estate sales but this month was exceptionally so, with Barfoot's sales last month the lowest they have been in the month of July for 22 years.
The average and median selling prices of properties sold by the agency are also continuing to fall.
Barfoot's average selling price was $1,122,575 in July, which was down $156,072 compared to its December 2021 peak of $1,278,647.
The median selling price was $1,110,000 in July, down $130,000 from its November 2021 peak of $1,240,000.
However the number of new listings the agency received was much closer to normal levels.
It received 1177 new residential listings in July, down by 13% compared to July last year, but still above the 1154 pre-pandemic listings received in July 2019.
Overall stock levels remain elevated, with Barfoots having 4567 residential properties available for sale at the end of July, up 64% compared to July 2021.
The combination of low sales levels, high stock levels and a steady supply of new listings will be good news for potential buyers, who could be spoiled for choice, while vendors won't be so happy.
"Prices are not falling at the same rate as declining sales numbers," Barfoot & Thompson Managing Director Peter Thompson said.
"The July sales data indicates that the Auckland market is gradually readjusting to a lower sales price point in a controlled manner rather than vendors reacting impulsively to slower sales," he said.
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I can hear Ashley Church & Nikki Conners screaming " it's all lies .... lies ! .... property goes up 7 % in NZ every year .... it doubles every decade ... always .... " ...
Ashley Church Jr will say something similar the ol' rat poison cycles. Fortunately the Anglosphere is not overweight in and leveraged heavily in digital assets. The markets cleansing themselves regularly is also a good thing.
Ashley is an expert on the past performance of the property market, he is about to learn that past performance is no guarantee of future returns. He ignored all of the leading indicators which have been evident since November 2021. They didn’t fit with his past experience. How can this man call himself an expert in property?
Reminds me of that old joke...
Q: what is an expert?
A: a drip under pressure.
I hope that Ashley has some bloody big mortgages. He has been acting like the Pied Piper of irresponsible debt. Hopefully he has been practicing what he preaches and will be feeling the pressure.
past performance is no guarantee of future returns
The irony is that this exact statement is required as a disclaimer in any financial advertising or advice given by investment advisors, but never property because it's different right?
I'm not sure he's an expert on anything, given what h wrote in a Oneroof column a few days ago:
Let me explain. Let’s say you were looking at a house that would have cost you $800,000 to purchase in January of this year when you could still get a mortgage at a one year fixed rate of around 2.25%. After paying a 20% deposit you’d have been left with a mortgage of $640,000 and monthly repayments of $2,878. If you bought that same house today it might have dropped in price by 5% to, say, $760,000. After paying a deposit of 20% you’d have a mortgage of $608,000. Assuming you fixed your interest rate for 2 years, at 5.39%, you’d have monthly repayments of around $3767. This means that, over a year, you’d be paying almost $11,000 more in interest – or almost $55,000 more over the next five years assuming rates didn’t go up any further. In other words, any gain you think you have made by waiting has been more than wiped out by higher interest rates.
If you’re in a position to buy now – buy now.
So much wrong with this it's hard to know where to start. First, his assumptions about how much more interest you'd be paying over the next five years are based on the differential between the interest rates on the 800k house and the 760k house remaining the same for that five year period, despite the fact he's stipulated the 800k house buyer took a one year interest rate. By year 2, you would still have most of the 800k mortgage to pay off and exactly the same interest rates as the person who bought the 760k house. Secondly, he's assumed that the potential FHBs have a 20% deposit in both cases. But if you had 160k (the deposit for an 800k house), but you instead waited and bought a house for 760k, you would still have 160k for the deposit - the money you had already saved for a deposit doesn't magically disappear because you waited and bought a cheaper house. Third, 5% drops are a bit of a joke. They've been substantially more than that already in the last 6 months.
Also it's quite obvious that interest rate increases have an immediate effect on all borrowing going forward, yet house prices are sticky on the way down and will take a fair while for rates changes to filter through. He's taken advantage of the disjointedness of the two metrics in order to continue to peddle the "FOMO" line.
Same applies to T Alexander. But he’s even worse, because he’s an economist.
I think the fact that Nikki's radio adds have gone into overdrive speaks louder than words.
What she may not appreciate is its not a matter of wanting to buy, its a matter of qualify for the funding. Also of note is the rebellion amongst the next generation of buyers (suckers). They are voting with their feet to Aussie for a better deal. Summary -More stock being built, more unsold stock, more listings, future buyer leaving NZ or staying at home, and debt heading ever upwards.
Is it time for popcorn, but with karmic hot-sauce...?
I used to have to change radio stations when her ads would come on. My body would start cringing at the sound of the property propaganda being spewed across society - especially when it was filled with half truths and assumptions with no regard to risk.
My Qv estimate has gone from 1250000 last year to 940000 today.20000 in the last week.
Just had a look at mine.
Was $775k at the peak, now at $685k. Paid $575k ~2.5 years ago, so not really too worried at all as have paid 50% off already and no intentions of moving any time soon (at least as long as another Dumbthoughts Jr doesn't show up).
I am impressed that my in laws seem to have managed to completely time the top of the property market, borrowing against their home to buy a so-so rental that needed a whole bunch of work done to come up to Healthy Homes standards and which is cashflow negative when rented. I'd say realistically if they tried to sell today, they'd be down $100k.
It would be depressing being a FHB who might have spent a year trying to save that $20,000 which in a week is gone, with no guarantee of returning in the near future - it could be 10 years or more away before prices go above the 2021 peak if our housing market follows the trend of other global housing markets that experience significant downturns.
My Qv estimate has gone from 1250000 last year to 940000 today.20000 in the last week.
You could always challenge the decision. What special powers do they have to determine the valuation anyway? Bunch of witch doctors if you ask me.
Lies, Lies and more lies..
Economic 101, house prices don't fail
We are certainly getting to the point where vested interests will no longer be able to muddy the waters by looking at YoY “price increases” to claim prices aren’t falling at record levels, but instead “house price growth is just slowing”
looking at results of the Roy Morgen survey it’s only very recently that more people think prices are falling than rising. Once it becomes apparent to everyone prices are falling we may enter a new phase of the correction
"Prices are not falling at the same rate as declining sales numbers," Barfoot & Thompson Managing Director Peter Thompson said"
Ha-ha-ha :) That's a new angle to mitigate the mangle!
so prices havnt fallen 50% from last year, great insight Mr Thompson!!!
"Prices are not falling at the same rate as declining sales numbers," Barfoot & Thompson Managing Director Peter Thompson said"
Peter is from the old school. An education in statistics and data analytics didn't get him where he was. Good to know there is still a place for salesmanship and a strong work ethic. Remember the ABCs -- Always Be Closing.
now how do you wrap this one in glitter?
Unseasonably high rainfall? Back to normal soon.
Spring will bring the usual "flood" of listings. This time with nowhere to go.
no need for new listings, they already have 7mths of inventory....
Doesn't matter if they need them. Still coming.
my dreams lie in tatters .... like glitter on the highway.....
I think Private Frazer best summed the housing market up....We're doomed !
Some are less doomed then others though DollarsandSense !
Miserable All Black performances affecting sentiment?
It wasn't that long ago we had auctioneers arrogantly telling prospective FHB's that they should cut back on the smashed avocado breakfasts so that they could participate in the outrageous bidding in the Auckland housing market.
Karma comes in many forms...
Panic stations in the avocado industry in Aussie. Massive glut and the kids are obviously not devouring them like they used to.
“Once you get round to that low price, $1 a piece, no one is making any money. A lot of growers are going backwards.”
I guess the mark-up is all the mashing.
https://www.theguardian.com/australia-news/2022/jun/24/get-smashing-avo…
lol -- i have avocado and toast for breakfast every day -- heart attack survivor --- thing is -- at $1 an avocado, and 20 cents for couple of bits of bread and a dash of worcestershire sauce or similar --- its a weeks breakfast for under $10 !
Never mind the popcorn -- sit and enjoy the crash with smashed avocado :)
Interesting perspective from looking at the vertical nature of average price growth yoy chart, is that we haven't even officially entered a recession and unemployment is still very low.
I do wonder what could happen if unemployment does start rising and it takes a longer than expected time for disinflation/deflation to show up.
Oddly, to support high house prices, people need to pray for deflation and rising unemployment. Without those factors, the central banks have no mandate to step in and drop interest rates....and yet in many house bubbles that have gone bust, deflation is one of that factors that has pushed house prices even further lower.
Strange times indeed.
it seemed for a long while that central banks and governments could support house price growth with impunity.
But now they have gone too far and caused an inflationary runaway train, which means that must be tamed and house prices take the back seat for now.
That is what makes this time so different.
All Ponzis eventually become unsustainable and come to an undignified end... and here we are
... and here we are ... caught swimming naked , with our pants down ...
We've created a situation were millennials are utterly priced out of ever buying a home of their own ... where do they go from here ... what is their future ...
There future is in another country.........
Australia, the lucky country, is going to weather this period well, and so close.
"In 2021 a New Zealander earned $27.33 each hour while Australians earned $A36.00 (NZ$38.91)". 30% more for the same role.
https://www.stuff.co.nz/national/politics/128595633/transtasman-wage-ga…
https://www.stuff.co.nz/national/health/119608064/transtasman-salary-ga…
But sure, let's not pay our people more cause inflation lol.
The good news about paying people more is that the cost of goods and services is not 100% labour. Therefore those who receive pay increases might see an increase in what they pay for general goods, but only to the portion of the cost of goods that incurs labour. E.g. $100 item that's 30% labour, 70% materials. Minimum wage goes up 10%. The cost of goods has gone up $3, therefore a 3% increase.
The thing is most housing corrections have occurred in an environment of falling rates. Interest rates falling can soften the blow, but is no way guaranteed to stop or reverse price falls.
likewise I see a lot of claims prices won’t fall due to low unemployment and low mortgagee sales. But this ignores the fact that rising unemployment and distressed sales tends to lag price falls in a housing correction, rather than predicts them.
Mortgage rates were dropping in the US as their housing market tanked during the GFC.....loss aversion in regards to capital (i.e. house price) is a far more powerful factor than thinking 'great I'm going to save $50 a week because interest rates are dropping'.
People dismiss the human psychology factors far too much when it comes to asset bubbles - especially something like housing.
If house price falls become the common narrative within the New Zealand psyche, the RBNZ dropping interest rates may make very little different to prospective buyers in the market. They wait until they think prices have bottomed...and that may take a few years.
I do wonder what could happen if unemployment does start rising and it takes a longer than expected time for disinflation/deflation to show up.
It starts with a "D" and rhymes with "compression".
Dompression?
Dumbpression
Delusionpression
DarnOrrAndHisWealthEffectAndStupidPushingOfUnsustainableDebtpression
The countdown begins for July's HPI data.
Will they get to a point where they actively discourage listings. Agents on the ground wont want to be covering the work (for free) for listings that have little chance of selling.
... the days of the " deadline sale " are over ... houses now have prices included in the advertising ... ahhh ... a return to the good old days ...
They will want to pick up the listings from distressed sellers, that will happen when the job market eases and unemployment bumps up a bit.
Nope - they will just start pushing prices down - real estate agents get paid to sell houses - a drop in the sale prices has a marginal impact on their income but not selling property has a major impact
Agreed.
In a reverse way, they where part of the problem pumping up prices to the stratosphere. But as commissions continue to take more and more work, the only option to maintain velocity will be to pressure vendors. They will become part of the solution.
as it is they are already taking what, 30% hits to yearly earnings due to lower sales? Same for brokers & lawyers etc. How many here on this site could handle a sustained reduction of your yearly income by that amount?
All summer is going to do is bring on even more listings.
We want to buy another rental as well as upgrade for more room on our main residence, cash in the bank. But aint no way we buying until HPI looks like its hit the floor.
Yep - better to sell half as many houses at half the commission than no houses at full commission.
Some people we know listed their property over 5 months ago now, wanting top dollar. Hasn't been an agent or punter through the place for probably 3 months?
Refuse to budge but what they are failing to realise is that we are now at a point where that 'lucky buyer' is simply not there and the longer it sits there the more ridiculously over priced it looks.
Off topic but why has it been so many years since income tax brackets have been adjusted, especially with inflation running where it is?
Sneaky way for the government to increase its tax take after spending too much on the covid recovery.
Leave tax brackets where they are and put the real rate of interest at -5% and you can take back from people what you just gave them.
hey don't forget their generous 'cost of living payment...' 50c a week or whatever (per peasant). And the petrol tax rebate... 25c back on the many dollars of tax paid per litre...
lol, how they must laugh at us from their many baches/mansions.
Basic tax administration is now framed as 'cutting taxes' by finance ministers who want the kudos for running surpluses, when all they're doing is collecting more taxes because of the inflation they literally require to exist through the RBNZ's policy settings.
Seriously. That's it. It's an evil right wing plot to cut taxes and slash public servants, until you see that polling says you should do it too, at which point it becomes something you are able to do because of your shrewd and careful management of the economy.
It's all a giant con.
In the UK they branded it as Brexit and blamed eastern EU types for all their post GFC problems.
Check out the increase in spending by the Government. They surely cant be adjusting income tax brackets because they need all the extra money for consultants and stuff - think how much these awesome projects coct: Kiwibuild, 3 waters, health reforms, skypath planning, benefits increases, cost of living payments to Kiwis overseas...
Govt spendng:
Growth in core government expenses, excluding COVID-19 relief money, averages 10 percent between 2018 and 2023.
In the upcoming year, expenses are projected to rise an eye-watering 13 percent.
Then there are all their extra staff (Labour always hires lots of bureaucrat to manage all their new rules and stuff), Jacidas commissions for everything...
Lol - and then we blame energy costs for rising inflation.....I think we are seeing inflation from multiple perspectives...at least government spending is something that we can control. War in Ukraine is something we cannot.
In my view we should be decreasing government spending, not increasing it.
If we are in a deflationary cycle again....sure lets look at it again....but with inflation rising the way it is...increasing government spending by 10% p.a. seems mad to me.
It is mad. I will try not to get too political here as I try to stay pretty impartial for the most part, but here is a quote from Ardern yesterday.
The Government is providing significant additional cost of living support as the ongoing war in Ukraine, issues with global supply chains, and COVID continues to drive up global inflation making it tough for New Zealanders right now.
There is no easy fix for the cost of living, as we cannot control global inflation, but we do see it as our job to provide targeted and meaningful support to help take the hard edges off for kiwis feeling the pressure through the worst of it.
All about the Ukraine war and global supply chains. All true, but lots omitted. Nothing about government spending, or trying to control inflation locally. Just more handouts wrapped in red packaging. I know it's been touted as comparatively small, and I know some people probably really need it, but it's like they are trying to spend their way out of inflation.
and I dont think we have reached peak stupid just yet... more to come from Cindy & Co
Robbo much prefers to give it back so he can appear to be our saviour
So as of yesterday NZ has another 2 million beneficiaries - plus another 20,000 or so who actually live in other countries although it appears that IRD doesn't actually know how many - maybe the team of 5 million is a bit overstated - inflated just like the housing ponzi
Don't you know by now? This country rewards property speculation, not salaried jobs...
..used to.
Now it rewards neither.
Don’t worry, if the Bats get back in they will tilt it back in favour of their property speculation mates (and themselves).
Here’s the problem. When the boomers were working and paying for their parents retirement, there were about 5-6 working boomers for every person on superannuation.
Now that’s heading to 2 workers for every retired person. So each taxpayer has to pay more superannuation than previous generations and all those retired people have higher health needs so each worker needs to pay for that.
This creates massively more fiscal pressure and a good way to meet that is not to lower taxes.
People think their taxes pay a bunch of bludges on the dole. Wrong, the biggest drain on taxes is superannuation and the spend goes up a massive amount ever year. The next biggest drain is health spending and that is primarily driven by older people.
But the boomers say, we paid for all this in our day. No you didn’t. You paid at 1:5, now you are asking people to pay at 1:2. The maths doesn’t work.
This is why we should have raised the age to 67 already. This why the Nats shouldn’t have cut contributions to the superfund during the biggest bull market in history. This is why KiwiSaver should be compulsory. But no New Zealanders and their politicians prefer to be in denial.
ironically immigration has helped a lot - we would be way more screwed without that.
Too right
Hey dont dis' the boomers, they invested every penny they could into property - to try to fund their own retirement.
A good point about immigration, there are plenty of negatives as well of course based on our simpleton policies but it is fair to say that growing our population of tax payers has smoothed out this problem somewhat.
Except for all the migrants that were allowed to bring their elderly parents in... and we haven't really solved the problem, just kicked the can a bit further down the road.
Does it get any dumber than that!
But again, like housing/capital gain tax, the country was/is being held ransom by the boomers as the most powerful demographic.
This is now changing as boomers die off and get replaced by millennials as the strongest demographic in society.
Or maybe the old should be allowed to die?
Like why on earth am I supposed to pay for the retirement of boomers, then pay the unbelievable tax burden of their pensions and the unbelievable cost of medical care to keep them alive a little longer? Boomers wanted to drink the entire earth for themselves, they should hurry up and get into the grave.
The most privileged generation who were handed everything, who's fathers invested deeply in the society after the great depression and second world war, only to squander it. From the refusal of conscription, to the terrible shitlib politics and 'I got mine, fuck you' attitude on the economy, boomers deserve to be hated by all future generations to come. They refused to have enough children to cover the cost of their retirement and now burden us with their weight.
Best comment here today. Two thumbs up etc etc.
The biggest drain on the public purse is superannuation and health care for the elderly, just like it has been for the last 10 years and like it will be for 20 more years.
I see we now have the same tired old tropes from ACT about balanced budgets, lowering taxes & reducing red tape…. And how will this impact our aging infrastructure and health services? Do explain please, Mr Seymour.
Mr Seymour does want to increase the age at which you are entitled to a pension - and now not in 20 years
Also wanted to scrap the winter energy payments - many of which go to those who dont need them
As a boomer I support both policies -I dont expect my working children - or any others to provide for me or other retirees who can provide for themselves
Von Matternich - this comment is essentially 'The 4th Turning' Straus-Howe theory compressed into a few short sentences.
Even Strauss-Howe believed when they wrote their book back in that 1990's that boomers had the risk of becoming the most hated generation in recent history if they failed to act prudently.
Oddly it isn't their fault though for behaving the way they did - because their parents failed them (the greatest generation) by making everything too easy for them when they were young....free education, cheap housing, functional institutions, cooperative communities and social stability. Boomers then assumed these were normal aspects of humanity while they were growing up, not things that only occurred because of the sacrifices that were made by those above them - and have failed to make the same sacrifices themselves - hence the mess we now find ourselves in.
Or maybe the old should be allowed to die?
Like why on earth am I supposed to pay for the retirement of boomers, then pay the unbelievable tax burden of their pensions and the unbelievable cost of medical care to keep them alive a little longer? Boomers wanted to drink the entire earth for themselves, they should hurry up and get into the grave.
How much did all the Covid lockdowns, traffic lights, PPE and masks, etc. cost us? The main aim of all of that was to help boomers live longer. The percentage of kids, millennials, Gen Zers and even Gen Xers that would have died from Covid without all the Covid measures would probably have been very small compared to deaths in the boomer generation.
Don't get me wrong, it would have been a tragedy for many beloved grandparents and oldies to die prematurely.
But it is starting to bother me that we're putting so much debt on the tab for our children to pick up. Those months of interruption to their schooling will have a severe impact for years to come. In another ten or fifteen years, these kids will be the doctors, engineers, accountants, etc. of society. Did we count the cost of it all on their generation? Also, the tsunami of PPE, masks and discarded RATs, vaccine syringes, etc. is an environmental disaster that will be part of our legacy to our kids. I'm becoming very uncomfortable with it all. Our kids are paying a terrible price, but they don't realise it yet.
Don't know of one boomer that died of Covid-19 (here or the USA in the last 2 years), but know a lot of people sickened from the gene therapy experimental jab.
And then they've shrieked against any taxation of capital gains or free wealth transferred to land via policy. So we have working folk paying for most of everything while older speculators get free wealth transfers then also expect the younger working Kiwis - who've also been saddled with debt to enter the workforce so we could have tax cuts - to pay their pensions.
Yes and I find it funny when you talk to a boomer cruising around the country in their RV, drinking lattes at the cafe, before the afteroon bike ride on the $5,000 e-bike they just purchased, while collecting superannuation and rental income streams from millennials who can't afford a house......and telling the millennials they are a bunch of spoilt brats with bad attitudes and work ethics! If only you worked as hard as me, I mean if only the central bank dropped interest rates from 20% to 0% over the course of your working life...you to could be as well off as I am!
There has never been a greedier generation than the boomer one. I should know as I am one of them and I gave them professional advice when working.
C'mon change the lens, zoom out, positive re-frame etc ... the boomers also gave us the Internet, the Pill, LSD & Prog Rock - what else do ya kneed??!
LSD was discovered long before the boomers.
well three out of four aint bad
Most of the early prog rockers were wartime babies, not boomers.
they would have been ahead of their time
The oral contraceptive pill was first approved for use in the US in 1960. Unless the person who invented it was 15 at the time, it is highly unlikely they were a boomer. As for the internet, if you read about the history of that it was the generation before boomers who largely created it. I'll give you Tim Berners Lee for inventing the world wide web, he's squarely a boomer. As an aside, almost anytime anyone posts one of these lists of what boomers supposedly gave us, it almost without exception turns out that it was the generation before. Can anyone name any genuine boomer and genuinely good inventions or innovations, aside from the world wide web?
This boomer bashing reeks of jealousy
Most the boomers I know are hard working, resourceful people who dont live lavish lifestyles. They are people that knew how to, fix their own cars, paint their own house and had DIY in their veins. Most of them probably worked most their lives payed their taxes and did NOT over indebt themselves. They were useful!
Put that up again the younger generations, who want something for nothing, dont know how to do F-all themselves, leach of the government and dont want to take responsibility for their actions. Too busy having low self esteem, figuring what pronoun they want to us, buying $6 coffees each day and debating what a women is.
Sure the boomers were a lucky generation but theres an old saying, the harder you work the luckier you tend to be...
My parents were boomers and lived a simple, family based lifestyle where they sacrificed extravagance for the wellbeing of others.
The boomers and younger generation you describe are nothing like the people I know. Many boomers I know made pigs of themselves in the trough called property and the younger ones I know are virtually all professionals who have loans that are simply huge because their parents helped push up the price of housing to the detriment of their dependents. The boomers grandchildren are the biggest losers.
The reality is they put less into the kitty than they will take out and future generations will have to pay. It doesn’t matter how many cars you self repair and how many houses you paint, maths shows they consumed in an unsustainable way.
There's a difference between jealousy of people, and resentment of injustice. Being jealous of someone just because they have more than you is not nice. But being resentful of the injustice that arises when a group of people who benefit directly at your expense from systems designed explicitly to benefit them at the cost of ordinary hard working kiwis being able to live the kind of life that was the norm just 20-30 years ago (a house and a couple of kids by your 30s while earning decent wages in ordinary jobs like teaching, nursing, or the police) is perfectly justifiable. Particularly so when some of those same people who've benefited at your expense turn around and call you jealous entitled whingers for pointing out the injustice.
To put it simply, arranging things so that one group of people benefit hugely from economic arrangements like taxation and urban planning and interest rates and so on is unjust. Dismissing those who point that out by saying 'they are just jealous' is a mistake. It's like saying that the women who wanted the vote were 'just jealous' of the men who could vote, or that the peasants who revolted were 'just jealous' of the aristocracy.
Hey you're entitled to your opinion, even if it's completely nonfactual.
Its sad you feel that way Mr/Ms Independent ... at least you are not residing in your car like a lot of others. There are now 4 times as many since labour took office and since Jacinda made a play in 2017 to eliminate poverty. Thats not gone well.
Correlation is not causation.
Maybe Labour caused that.
Maybe the bubble and rent seeking caused that.
Maybe it was a combination of things.
Here are some stats:
• In the 17 years since 2006 the spend on NZ super has increased by 304% or 13.12B (was $6.41B).
• That is an increase of 6.77% per annum (compounding).
• if NZ super had increased by 3% per annum we would only be spending $10.6B saving a whopping $8.93B.
Imagine what $8.93B (per annum mind, significantly larger as a four year figure) in tax cuts looks like?
So when you ask why am I paying so much tax. The answer is because there are too many old people relative to young people and there is nothing we can do about it. And it’s going to get a lot worse before it gets better.
that would be nice.
The middle income squeeze is very real. Its a race to the bottom.
There will be NO Prosperity Gospel Preaching here Today ! Oh No - Not in this House there Won't. No Name It and Claim It from the Vested Interest Brigade - Be Gone I Say. Blab It and Grab It - You get behind me TTP !
Patience is a virtue . It takes Discipline , Grit, Faith and Wisdom to Wait Wait Wait.
Those That Wait Will Be Rewarded.
7% Interest Rates this year, Guaranteed. And when the first mainstream bank sells a 7% mortgage the Seal will be Broken on the First Scroll. And the Messenger will Read what the Prophet has written. This will be more hard to believe than 7% Interest Rates. But what has been written can NOT be stopped.
'If the global housing boom is finally running out of steam, how far will prices fall? Analysts at Capital Economics, a consultancy, forecast modest drops of 5-10% in America and Britain. In these countries, homeowners are less likely to be forced to sell by rising mortgage costs since fixed-rate loans are common. In Australia and Sweden, the analysts reckon prices could slip by 15%. With higher levels of household debt, and thus more exposure to rate rises, Canada and New Zealand are most vulnerable—prices in these countries could fall by 20%.'
https://www.economist.com/finance-and-economics/2022/08/01/the-global-h…
I still think China is the really interesting housing market to watch. It makes up such a huge portion of GDP growth, but it’s also critical source of revenue for local governments.
such a large portion of household wealth is tied up in speculative housing (something like 2/3 of homes are purchased as 2nd, 3rd property instead of being bought to live in). The funding model of upfront payments to developers before the project starts, and many of these developers are experiencing debt crises, is really dangerous
It’s such a huge powder keg
I agree. The scale of the speculation over there has come into focus as builders start to fail, driving very larges groups of owners opting to boycott their mortgages. Mortgages they paid up to three years in advance of completion. They are refusing to pay the loan they took out for the house that has not, and in all likleyhood never, be delivered. One the face of it, this seems quite reasonable.
This in turn is causing the banks to be unable to service their debt commitments. Depositors are then lining up to withdraw their funds, but are being told they cannot. This is causing angry depositors and police and mil assets to be deployed. Then add in a dose of CCP media suppression.
What could go wrong...?
Fully agree. I'm keeping an eager eye on what's going on in China and it's not looking pretty. For years that's been a bigger ponzi scheme than NZ, but the cracks are really starting to show now and I doubt the authorities will be able to "pretend and extend" for much longer. Our market could be down 20-25% by the end of this year, then we roll into next year as the Chinese housing market implodes. However this pans out, it's going to be a wild ride over the next 18-24 months.
The collapse of the China house market is exposing the lack of legal recourse and rights that a capitalist system actually needs to protect investors.... The CCP must know it will ALL come tumbling down, in NZ its simple legal rights say if you don't pay, then the bank will mortgagee sell, even if bank now NZ owned due to collapse....... GMint cannot let big 4 ever stop providing services as that eftpos card is needed for every day to day payment you make, there is no cash, its all ones and zeros on a disk pack in a lights out data centre....... perhaps the cost of living payment is just a sign of helicopter money to come.....
'If the global housing boom is finally running out of steam, how far will prices fall?
What we do know is that it makes the Japanese bubble look rather insignificant in comparsion.
I wonder how much the reported arrears in car loan payments is connected to the rapid decline in agents' commissions?
Now is the time to look out for a cheap used luxury car.
My sister-in-law's partner works for a luxury car dealer. All their customers (for the time he's worked there) were property developers. The sales staff have been switched from 3/4 minimum wage + commission to minimum wage + commission -> and he say's they're pretty much all looking for new jobs. Hasn't sold a car in weeks.
My flatmate worked at Honda Newmarket during the GFC. They sold 2 cars that year (according to him). But their workshop was going gangbusters as people chose to service rather than buy/lease new. Now might be a good time to own a service centre...
I am so surprised.
Crypto collapse caused the market to be flooded with Rolex
What are we going to be flooded with?
1kg blocks of tasty cheese.
You will find that most are high quality faked Rolexes!
PS. Impossible to tell these days, my watch repairer said it's taking 2-3 hours to tell fake from real these days.
Harder to fake vintage Rolex
Prices are falling.. Oh that is just great, cities like Palmerston North doesn't need another valid reason!
Turangi is safe at 650k ask for s shitebox
Do real estate companies have a process of relisting their stock online every month?
This house in Hamilton has been on the market (big sign out front, etc) since February, if not earlier. However, when you check the agent's site it says listed yesterday.
https://www.realestate.co.nz/42206011/residential/sale/99-clyde-street-…
Crafty agent! For that very reason you can probably adjust down the number of new listings in the article maybe there was not 1100 odd but 550 approx
The resi property owners here should think themselves lucky to be down 150k. My farm is down a million bucks from its peak, there is no bright side to that.
You should get Yvil in to cut down some native trees. Million dollars, easy peasy.
If you sell 10% from the peak of an almighty wave, and wait a few years there is a lot of bright side, early on in margin trading FX I learnt that the first stop loss is the cheapest, after that they get more expensive......
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