Latest survey by REINZ & Tony Alexander paints a glum picture of the spring real estate market

Property / news

Survey from the REINZ & economist Tony Alexander suggests real estate sales remained sluggish in October with buyers still cautious

4th Nov 22, 9:42am by Greg Ninness

Economist Tony Alexander

Anyone hoping for signs of a spring lift in housing market activity in the latest survey of real estate agents by the Real Estate Institute of New Zealand and economist Tony Alexander, will likely to disappointed.

The survey results suggests sales activity remained sluggish in October and buyers continue to be cautious.

Among the main points:

Auction activity is down. More agents reported seeing fewer people attending auctions in October than they did in September.
Open home viewing has stalled. There has been a small decline in perceptions of people showing up at open homes.
Prices are still falling. A strong majority of agents around the country report that prices are still going down, although the rate at which prices are declining may have slowed.
FOMO (Fear of missing out) has all but disappeared. "Turnover in the residential market this year has been and remains up to the willingness of vendors to accept the weaker conditions and meet the lower offers submitted by the fewer buyers now actively engaged in searching for a property," the survey's report says.
There are more first home buyers in the market. However the latest survey results suggest growth in their numbers is slowing.
Fewer investors are active in the market. Investors have decidedly stepped back from the market. However there is no mass exodus of investors form the market either. For the time being at least, they appear to be sitting on the sidelines.
There is minimal interest from overseas buyers. "People overseas lost interest in the New Zealand residential real estate market late in 2020 and remain disinterested," the survey's report says.
Requests for property appraisals are increasing. This suggests more people are thinking of selling, and appears to be the one aspect of the market that is experiencing a slight seasonal lift in activity.

The report suggests that hopes of future capital gains are no longer a strong motivation for buyers.

"There is no improving trend in expectations for price gains, and fewer agents now report that those investors seeking to buy are hopeful of getting a bargain," it says.

The comment stream on this story is now closed.

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.

155 Comments

by Yvil | 4th Nov 22, 9:48am 1667508507

The other day, Bernard Hickey wrote an article which basically said: "Don't worry, things will be OK" I thought "Oh no, the majority of the commenters are not going to like news saying things are not that bad". First comment says "the author of the article is wrong" and gets over 40 thumbs up… and most comments are really giving it to BH for saying things will be OK.

Why are so many commenters so desperate for bad news? No wonder their lives are miserable!

by Nzdan | 4th Nov 22, 9:48am 1667508503

Are falling house prices bad news? Depends on ones perspective. But if people are looking outside their own self interests, then falling house prices may be seen to be a good thing for any aspiring FHB going forward.

by Yvil | 4th Nov 22, 9:50am 1667508629

The article said most people will be able to deal with falling house prices, which is good news.

by Nifty1 | 4th Nov 22, 9:56am 1667508969

It's not good news for FHB - affordability for homes is decreasing, lending is more restrictive and if we go into recession job losses will increase... all while inflation and cost of living is making it more difficult to save.

People will jump back into the market when rates stop increasing/drop & FOMO is back. People are sheep & follow the herd...

by Nzdan | 4th Nov 22, 9:57am 1667509073

Of course it's good news for FHB. Home Loan affordability has never been the hurdle, it's being able to obtain a suitable deposit and not be outbid by leveraged investors. Smaller house price = smaller deposit required.

Are you suggesting the banks are just going to stop lending all together? Maybe they'll stop using equity as security for further loans and taking the landlords word for it that they'll always have a tenant in the property.

Be careful, you're starting to sound like a doom goblin there.

by Nifty1 | 4th Nov 22, 10:38am 1667511494

NzDan affordability is a massive issue right now? Go to the bank and what rates are they now testing you at 8%+? How are home loan payments looking now on current rates, how could this not affect affordability?

People misunderstanding this/ignoring this is extremely frustrating... quite demeaning to any aspiring FHB as well.

Please read this article:

Interest.co.nz's Home Loan Affordability Reports have been tracking the main measures of housing affordability for first home buyers on a month-by-month basis since 2004 and these clearly show that first home buyers are worse off now than they were three years ago.

And they are not just slightly worse off, their chances of buying a home of their own in September 2022 were substantially lower than they were in September 2019.

One of the biggest drivers of that change has been mortgage interest rates.

https://www.interest.co.nz/property/118099/position-aspiring-first-home…

by malamah | 4th Nov 22, 10:41am 1667511676

And so house prices rising again would make it all better...?

by Nifty1 | 4th Nov 22, 11:17am 1667513871

It's just a fact that while house prices are decreasing and home loan rates are increasing, it isn't helping FHBs...

by redcows1 | 4th Nov 22, 11:29am 1667514557

All depends how low prices go. Best case is they drop 80% from highs meaning only what was formerly a deposit is needed to buy and get rid of bank lending completely. Dead money anyway as far as the economy is concerned, banks can go back to lending on productive enterprises.

by Future | 4th Nov 22, 11:39am 1667515160

From The Scroll.

There will be many many examples here in NZ of Property that once sold for $1,000,000 Sell again at $200,000 or less. -80% Crash in Home Prices will be common. This will take time to play out.

by Harvey W | 4th Nov 22, 1:40pm 1667522440

Don't be silly Future

by OldSkoolEconomics | 4th Nov 22, 3:35pm 1667529325

For first home buyers they will see huge fluctuations in interest rates over the term of their loan. so what it is at the start isnt really a major, except starting high probably means in the future it will mostly be lower which is good.

As long as they can actually get a loan, (easier as deposits fall) then if the principal is only 500k instead of $1m then that is the best possible deal for them.

The interest component will fluctuate anyway. but being able to pay off the principal in half the term with cashflow as now, or the full term with tons of money each moneth for discretionery spending - will be better for them AND the productive economy.

Double win.

The Lower house prices drop - short term we all feel some pain, but in the medium to long term everyone wins (oh yes except the blood sucking landlord who have been sucking all that cash up and hoarding it for the last 10 years).

So no DGM nonsense for me if prices are falling - in fact it would be awesome for me and the kids and most of their mates. Would be a much better life, more money better service.. etc. just a hit to the house price - which i dont see as wealth anyway, just a roof. And the flow on money eventually coming into the productive economy would lead to more monet for our productive tech business, likely more growth, better employees and more exports for nz in time. awesome.

by HouseMouse | 4th Nov 22, 3:59pm 1667530752

Agree. The key is whether they can afford. If they can 2023 will be a good time for FHBs to buy. In a couple years interest rates are likely to be lower again.

by Speedmax | 4th Nov 22, 5:32pm 1667536329

Spot on

by Carlos67 | 4th Nov 22, 3:50pm 1667530203

Its people posting stupid stuff like this that has had others sitting on the sidelines for the last 15 years waiting for a crash.

by Brock Landers | 4th Nov 22, 4:20pm 1667532018

The crash has arrived.

by Future | 4th Nov 22, 4:56pm 1667534218

But Carlos67, you also thought 7% Interest Rates This Year, Guaranteed was also stupid stuff. Prophecy Confirmed.

You also thought -30% Crash in Home Prices by December was also stupid. North shore is -28.6% already.

by Carlos67 | 4th Nov 22, 10:46pm 1667555174

Not correct I have been predicting 4.8% 1 year TD rates by Feb 23 for 6 months or more so that implies 7% mortgage rates and by the way we are still not there yet so its still a prediction and not guaranteed.. Not really interested in the North Shore, I left there a few years ago now and you cannot cherry pick you need to look at national house prices. Tauranga now selling at fractionally above the new RV so not 30% down.

by Future | 5th Nov 22, 9:11am 1667592672

If you dont think the banks are selling 7% Interest Rates this year then here is a link for you .

https://www.interest.co.nz/borrowing

We cannot discount the fact the North Shore has crashed by -28.6% already because Carlos67 is not interested, and no longer lives there.

A national average for a country is very misleading, it needs to be insular. North Shore has a population of over 200k. We are not talking about Edgecumbe .

10% Interest Rates Next Year, Guaranteed !

by Carlos67 | 5th Nov 22, 6:17pm 1667625440

Mate you are an idiot.

by redcows1 | 4th Nov 22, 5:25pm 1667535911

While I agree that in hindsight sitting on the sidelines for 15 years is wrong. I'm not sure what's stupid in believing the massive interest bill on housing debt is dead money for the economy or why it's stupid to believe that debt would have been better used in the productive economy.

Just because some have made huge tax free personal gains does not mean the direction the country took was a good one.

by Small Kev | 4th Nov 22, 1:20pm 1667521258

“Best case is they drop 80% from highs …”

If that happens people’s wages will disappear as well.

Prices are going up because people keep asking for better pay, better life, better everything, things won’t change until people change.

by OldSkoolEconomics | 4th Nov 22, 2:38pm 1667525896

It all ends in tears. The reserve bank is committed to wiping out those who are overleveraged - as they need the interest rate rises to start to affect the masses who are only mildly leveraged.

if the current OCR isnt doing it - then we will stioll be raising the ocr next summer.. by then its going to have done some serious damage to the few.

by Halfway To Paradise | 4th Nov 22, 7:55pm 1667544948

You need to come back to the real world

by malamah | 4th Nov 22, 2:10pm 1667524256

Can you think of a time in the last decade where there was a prolonged period of improving conditions for potential first home buyers in NZ?

If you can't, that's some indication of what an "orderly" reversal may entail.

by swapacrate | 5th Nov 22, 12:01am 1667559717

Rather pay 20% on 100k then 5% on a million

by Chaosinflesh | 4th Nov 22, 11:41am 1667515317

You should read some of IO's recent comments. Interest rates rising will have only one effect - prices drop - because people can afford roughly the same repayments as they could before.

All that's happening now is vendors holding out for prices they want, rather than what the market is offering. Sure, that makes it tough for everyone who wants to purchase with a mortgage (not just FHBs, btw), but only so long as vendors are able to hold out. Once they hit the point of needing to sell, they'll have to take what they'll get, and at that point it becomes much easier for FHBs. (I'd imagine the vultures are waiting for the FHBs to return en masse also).

It's now just a waiting game - if you already have the deposit, why would you rush out and buy - despite paying rent in the meantime, your deposit's purchasing power is increasing with every realised price drop, and current price drops are greater than the week's rent.

by Nifty1 | 4th Nov 22, 12:09pm 1667516940

So as a fhb when are you going to rush out and buy... when everybody else is because rates have dropped or stopped increasing?

by Chaosinflesh | 4th Nov 22, 12:48pm 1667519327

We have no intention of buying here. Unless there's a cataclysmic shift in political will to address the greed-driven mess this country has become, our children's future is elsewhere. Meanwhile, we're just working on getting our ducks lined up before we go.

But for others, I doubt you'll see a big 'rush'. People will buy houses when they can buy what they want - and that will be when they are comfortable with the price and repayments. Some of my FHB friends have already bought this year, and are happy with their purchases. Others are still waiting for further price falls, as they wouldn't be happy with the levels of debt/repayments. Now, these are childless couples on more than 300k, so it will be sometime before the average family can enter the market.

The other property market crashes played out over several years - and I see no reason why that won't be any different here. So few people are directly impacted by OCR increases that it's going to go higher, for longer, and house prices will eventually capitulate. Houses are so illiquid though, that it's unlikely to be an almighty 'crash', but rather a long whimpering subsidence. And just as prices were pushed up from the bottom and in the centres, and spread across the country like ripples in a pond, so the subsidence will be the reverse - the bottom will fall, the middle and top collapse on it, from the centres first then to the regions.

And all this came about because the powers-that-be didn't respect the future, and treated it as a cheap place to pull credit from. This is philosophical, but for me, the future should be an expensive place to borrow from - because it doesn't belong to us-in-the-now.

by Slapheid | 4th Nov 22, 1:11pm 1667520666

Nailed it!! Thank you ChaosinFlesh

by Brock Landers | 4th Nov 22, 1:18pm 1667521123

✈️✅

by OldSkoolEconomics | 4th Nov 22, 3:40pm 1667529608

Awesome stuff ChaosinFlesh

This is philosophical, but for me, the future should be an expensive place to borrow from - because it doesn't belong to us-in-the-now.

best post in ages and not really philosophical - just a great way to spell out the facts we ignore.

Could probably apply the conceptto economics and the environment - that we should all be forced to pay more in advance for the environmental damage we cause to our kids planet today and their money we have spent.. now that would be a very interesting concept.

by Dale Smith | 4th Nov 22, 4:11pm 1667531515

With two variables there are always four options. And there is a lag effect within the options between the variables.

High house prices, low interest.
High house prices, high interest.
Low house prices, high interest.
Low house prices, low interest.

Before the cycle repeats in a dysfunctional market.

We are presently between #2 and #3. And on our way to #4.

A stable market always has lower house prices regardless of interest rates when compared to dysfunctional; markets like NZ.

So in Texas right now they are going through the same mental angst, and making the same comments as people on this site, but are doing it about house prices that are 3 to 4x median income.

I would sooner be happy or sad about interest rate rises and falls with housing costing 4x median income, rather than 10x median income.

by Speedmax | 4th Nov 22, 5:45pm 1667537100

Sorry but we are now only between #1 and #2….house prices are still ridiculously high, interest rates not yet high. There is much further to go in this long cycle

by Carinaz | 4th Nov 22, 1:33pm 1667522036

AGREE that it is good news for FHB.

Rise in interest rate could be offset against falling price and even if are paying little more it is better to have a mortage of $600000 than $800000

It could be win win situation for FHB, if price falls 30% Plus as than rise in interest will more likely offset the rising interest rate.

Let the interest rate go to 8% and price fall by 35%.

Anyone sheding crocodile tear for FHB.....beaware of them.

by malamah | 4th Nov 22, 2:27pm 1667525259

Yes, and that 20% 200k they needed for the 800k mortgage is now a 25% deposit and potentially closer to 220k.

Maybe their wage just jumped 9%.

Both scenarios will be on the same interest eventually, pick your poison. $580k @ 8% or just under $800k at 8%.

by Nzdan | 4th Nov 22, 4:27pm 1667532452

Watch what happens too when you put future payrises against the loan. An extra $100 per week off the principal on $580k vs $800k is a big difference, let alone any lump sum payments (bonuses etc).

by swapacrate | 6th Nov 22, 7:09am 1667671752

Not to mention less debt. 8% is a lot more palatable on 400k, then 3% on 1 mill. Not sure why these guys can't understand this, or they just willfully ignore. Then once prices drop chuck in DTI of 3 or 4, remove rampant immigration, remove overseas buyers, tax gains for investors, can't claim losses, and there won't be FOMO, just regular growth with wages. Anyway it's funny how some can spin this and sound concerned for FHB especially when houses are unaffordable.

by Zachary Smith | 4th Nov 22, 9:58am 1667509138

Most people will cope with having their left hand chopped off. This is good news!

by mfd | 4th Nov 22, 10:01am 1667509310

A nice sharp house price correction would be fantastic for the country and all future FHBs. Something big enough to shake us out of our collective delusions that mass property investment is the only path to riches, and that house prices rising faster than wages is somehow a good thing.

There is a lag between interest rates rising and house prices falling, so yes houses will be temporarily less affordable while we live within this lag.

by Small Kev | 4th Nov 22, 1:27pm 1667521649

“A nice sharp house price correction would be fantastic for the country”

A nice sharp house price correction will only benefit the rich and put everyone else in misery.

by mfd | 4th Nov 22, 1:42pm 1667522549

I strongly disagree. House prices falling most affects those who own > 1 house, and particularly those when housing is a large % of their assets. The main victims would be leveraged investors and those with pure property investment portfolios.

Those with no home are better off as they will find it easier to buy a house in the future if they want to.

Those with one home aren't necessarily affected by house prices falling. The fact that this crash is associated with rising interest rates does complicate things.

There would absolutely be misery for a year or two while the economy rebalanced away from the single-minded focus on housing but we would be better off in the long run. Currently we are dumping all the misery on those unable to afford their own home.

by ex socialist | 4th Nov 22, 4:04pm 1667531084

Unsure how you get there. I agree a price drop may impact a few recent purchasers, but shift our economy from thinking houses are a one way bet.

by Carinaz | 4th Nov 22, 1:36pm 1667522181

Yeah that will be the time to reset and see that politicians are never able to turn housing necessity into speculating stock but Alas.........no words to explain and even the words that are, could not be printed so best left for imagination.

by DTRH | 4th Nov 22, 1:38pm 1667522290

Rates will stop increasing at some point but it will be a long time before they start falling again, nifty 1 house price’s will continue to fall until people can afford to buy so we have long way down, try looking again in 2025.

by Speedmax | 4th Nov 22, 5:26pm 1667535990

A herd of sheep??

by Nifty1 | 4th Nov 22, 7:54pm 1667544847

Yeah haven't you heard...

by JCH | 5th Nov 22, 11:55am 1667602503

As a waiting FHB this is AMAZING news. We're just waiting for home prices to align with current market and interest rate realities.

While payments remain the same, and total mortgage approvals amounts will be lower. We no longer need to sign up to a life of debt many times the size of household income.

I see the real risk is mortgage size vs income, and paying that down in a lifetime.

Our generation wont get the free capital gains the last ones got that is paying for everyone's retirement.

by tomjones_04 | 4th Nov 22, 10:01am 1667509290

Hi Yvil. Some peoples lives are miserable because they have to give the majority of what they earn to a landlord and saving money is difficult. What is happening currently is giving people hope. You can understand that right?

by Yvil | 4th Nov 22, 10:12am 1667509947

Absolutely, so why are so many upset when B Hickey says most people will be able to deal with the drop in house values?

by Brock Landers | 4th Nov 22, 10:16am 1667510208

Because Bernard has a track record of being wrong about everything.

So if he says it's going to be okay. It's not going to be okay.

Understand now?

by HouseMouse | 4th Nov 22, 10:24am 1667510651

And also because there were flaws in his rationale. Which of course links to a poor track record.

by stefanblaise | 4th Nov 22, 5:43pm 1667536999

Well, he was right at the wrong time to be fair. About 15 years wrong.

by malamah | 4th Nov 22, 10:44am 1667511895

Because it glosses over the fact that some people are not going to be ok. It's the "I'll be fine though!" attitude that riled people up.

We're in a mess that should have never been allowed to happen, people are seeing lower house prices as a way out of the mess for future generations. If house price rises kept going there would be no future for this country.

by GV 27 | 4th Nov 22, 12:13pm 1667517199

The stupid thing is if we'd been able to stop them at any point, and just have them level off, then wage inflation would have done the job of fixing affordability.

But because dreary idiots couldn't imagine a future without everyone somehow clipping the ticket on residential property gains, that never happened. Now we've blown past the point of sanity and instead of the people who bought at peak just not making a gain, they're facing life-ruining levels of debt they can't walk away from.

It will cost lives and livelihoods and the fact that some people get to put their feet up in an RV somewhere isn't going to count for much for the people effected by it.

by kpnuts | 4th Nov 22, 10:32am 1667511124

life is great -- but i am desperate for ACCURATE news and commentary -- -- as much as we need to do our own research -- part of that is reading articles from professionals in teh field and weighing it up --- Sadly neutral information is no longer available

by IT GUY | 4th Nov 22, 10:49am 1667512148

I have news for you from the trading desk...... News is yesterdays news, its already been traded... if you are disappointed in accurate forecasts then this is par for the course.... I would suggest listerning to older people who have been through real recessions (late 1980's/early 1990s).

Listern to rich people as long as their richness is not inherited or luck.... listern to people who form their own views AND TRADE those views...

IMHO dont listern to TA or Ashley or Bernard.... they have no credibility IMHO to many crazy calls.

For Example - BH - people will be ok

Clearly this is only somewhat true - most will be ok, some will not. As a trader or FTBer there may be opportunities arise from the some who are not ok... IMHO the bottom IS NOT IN it takes 12-24 months for credible bottoms to form in real estate, its super illiquid right now, it will need to be a functional market FOR SOME TIME to make sure that the clearance u see is not just premature purchasing....

Understand the environment you are playing in.... Robertson is spending like a drunken navvie going into his last election..... Orr is tightning like a sober sailor, knowing stormy weather is ahead.... National will say anything to get in, but as soon as in say on my look what they did (probably still saying it in 5 years... its worked for Labour)

Dont listern to friends who dont speculate (if you do) dont listern to auntie mable... seek out TRADERS who understand CYCLES

by malamah | 4th Nov 22, 10:51am 1667512289

I'm surprised TA and AC still get paid to be completely honest. All of their opinions have a shelf life of about 2-3 months, and this year has proven them wrong almost every time.

It's like they're trying to teach kids to surf, up until 2021 it's been all "just ride the wave in, just ride it in!", now they're washed up on shore trying to tell people to "Ride it in!" as the tide is going out.

There are worse fools for sure. Opes partners has been popping up with their podcast. Oh my word. "Get more debt, get more debt! That's how it works! The market will go up early 2023." they really have absolutely no clue, nobody does.

by dbbr | 4th Nov 22, 10:54am 1667512459

Their YT channel is pretty cringeworthy too.

by spacecadet | 4th Nov 22, 1:11pm 1667520703

"If you can't afford the repayments on your IP then borrow more money and use that (or as they put it 'the banks money') to pay the difference" - Opus "get more debt" Partners 2022. Interesting to see how that will age....

by malamah | 4th Nov 22, 2:04pm 1667523872

Makes you wonder if there's an angry mob coming.

The 2023 ram raiders will be Dennis and Jan from next door who leveraged up on negatively geared rentals during the peak then took on more debt to fund the old debt, and now realize they actually have to work for money and can't live off the back of next generation forever.

by spacecadet | 4th Nov 22, 2:33pm 1667525612

🤣

by al123 | 4th Nov 22, 10:32am 1667511142

Yvil, you're confusing disagreements about facts with attitude towards those facts. Whether Bernard Hickey is right or not about whether things will be OK is entirely independent from whether people 'like' that view or not, or what 'attitude' people have towards it. Someone saying 'he is wrong' and people giving a thumbs up to that are a bunch of people disagreeing with Hickey on the facts, not expressing an attitude towards those facts.

by Carinaz | 4th Nov 22, 1:42pm 1667522579

Bernard Hickey says that people will be fine when even the governor of rbnz does not know what will happen in future.

He should have said that till now most people are fine (As too much money in the system/saving) but cannot say the same about future.

Do no think anyone can predict the future definitely not now (In USA when fed started to raise interest rate, it was that will go up by 1.9% than 3% and now is 4% so the expectation is will go up by 5%.......can anyone be absoultely sure that goal post will not be shifted again, if the situation does not get better).

by dbbr | 4th Nov 22, 10:33am 1667511182

That whole article basically read like a puff piece for the RBNZ.

by Carinaz | 4th Nov 22, 10:35am 1667511354

Any type of Ponzi's is bad, specially turnning one of the neccesity of life - housing into pyramid ponzi. Promotion and support comes from none other than head of state and head os Central bank therby sending wrong signal and entraping many .

by Eschaton | 4th Nov 22, 11:40am 1667515234

The entire monetary system is a ponzi.

by DDDDebt | 4th Nov 22, 11:03am 1667513003

Yvil - it might be because Bernard is now putting himself out there in MSM as an expert on what’s going to happen in the property market

https://www.newshub.co.nz/home/money/2022/11/expert-urges-homeowners-ar…

Note, how he gets called out by the panel for his earlier advice of only to fix for a year

by Whatwillhappen | 4th Nov 22, 12:21pm 1667517693

He's mostly right. The exceptions test the rule and that's where most arguments against BH are at. Most people didn't buy their first home for massive amounts a year ago. Most people who own (3/4?) bought more than 7 years ago when prices were sane (and 2 year fixed term interest rates were at ~5.15%).

So, most people will be ok unless they have affairs, don't value their relationship, lose their job or die. 1/4 of homeowners (if my estimate above is correct) is a significant minority though, don't get me wrong.

by Chaosinflesh | 4th Nov 22, 12:51pm 1667519463

Actually, those who die will be just fine [financially, at least].

by Averageman | 4th Nov 22, 12:41pm 1667518884

Not desperate for bad news at all. I am happy for reality to start to apply after years and years of Central Bank inflated fantasy. Also happy to see less noise from speculators banging on and on about how great they are for using that financial fantasy to take advantage of the rest of society.

If you cannot grasp that, then google "narcissistic personality disorder".

by Kiwi Tim | 4th Nov 22, 11:21pm 1667557301

Hi Yvil, have agreed with some of your posts in the past but need to speak up here. This is your view that you think people want bad news, I completely disagree. People are just sick and tired of lies and sugar coating in media articles so want to call it out. As I’ve mentioned many times, I have a heap of skin in the game but the facts tell me things are bad and soon may get really bad. Identifying this allowed me to make a range of decisions to become less stressed.

by Yvil | 5th Nov 22, 1:42pm 1667608932

Cheers Tim.

by Whakatiki27 | 4th Nov 22, 9:54am 1667508843

Don't worry, Tony and his team of spin doctors is working feverishly in the background to spruik this around. First up will be TTP in 3-2-1...

by Retired-Poppy | 4th Nov 22, 10:45am 1667511955

by tothepoint | 2nd Nov 22, 8:07am

"There’s a good chance that the housing market will find its footing - led by first-home buyers - sometime in the new year"

There's a good chance that come New Year we will be bombarded with another "Gem" from the Property Brokers book of friction.

RP (aka - Crash Crusader)

by Future | 4th Nov 22, 9:55am 1667508906

"There is no improving trend in expectations for price gains, and fewer agents now report that those investors seeking to buy are hopeful of getting a bargain," it says.

As The Prophet would always say -

There is NO Such thing as a Bargain in a Falling Market !!!

by IT GUY | 4th Nov 22, 10:52am 1667512363

Yes there is.... you just have to do your numbers find a distressed seller and hope no one else has the balls to make a slightly better offer, may take a lot of offers...

by Future | 4th Nov 22, 11:28am 1667514526

Wrong.

I suggest you get up early on Sunday Morning, have a shower, spruce up your hair a little, put on your Glad Rags and get off to your nearest Church.

Because St Landers of Cheaper Tomorrow has got a Message for You.

by Brock Landers | 4th Nov 22, 11:41am 1667515288

What seems like a bargain today will not seem like a bargain tomorrow.

by Retired-Poppy | 4th Nov 22, 12:36pm 1667518561

....because it will be a steal?

by IT GUY | 4th Nov 22, 3:10pm 1667527824

Often the best deals happen early in the crash... ever been to an auction and the first item of several simillar goes cheapest, suggest you get out more in real world YES mortgage sales are AUCTIONS, unless tenders, they are different just do a tonne of low balls,,,, LOW BALL EVERY MORTGAGEE tendor YOU NEVER KNOW

by dumbthoughts | 4th Nov 22, 3:13pm 1667528021

"Whoever is slow to purchase has great understanding, but he who is a hasty buyer exalts folly." Landers 14:29

by icome-iread-icomment | 4th Nov 22, 11:21pm 1667557287

Hail the Profit (oneroof pun). For the Profit knows all the answers....

by Yvil | 4th Nov 22, 9:56am 1667508998

T Alexander, who normally cops heaps of flak from commenters, should fare better than B Hickey did the other day for suggesting that most will be able to deal with house value falls, since TA's article above is saying all negative stuff about the housing market. This should keep the majority of commenters happy to see house owners lose value.

by Future | 4th Nov 22, 10:03am 1667509437

Even many homeowners would like to see prices come down. Its just the overleveraged with big egos that are panicking at the moment .

by fortunr | 4th Nov 22, 10:11am 1667509878

Correct. I am a homeowner and I am perfectly happy to see house prices coming down.

by Averageman | 4th Nov 22, 12:42pm 1667518968

Agreed.

by Cheetahlegs66 | 4th Nov 22, 5:25pm 1667535939

Ditto. And if they fall enough the option exists to trade up or buy a rental.

by HouseMouse | 4th Nov 22, 10:25am 1667510757

Exactly. I am very happy to see them falling and I own a home.

I would like to see my son having a chance of buying his own property that is more than a shoebox.

by Averageman | 4th Nov 22, 12:43pm 1667518987

Agreed.

by Retired-Poppy | 4th Nov 22, 3:27pm 1667528847

Agreed

by mfd | 4th Nov 22, 10:57am 1667512656

Quite right. The common narrative is that we do not exist, or that we have cognitive dissonance and believe price falls won't affect our houses.

I am fully aware my house will be worth less if house prices return to sensible levels. I will still own exactly 1 house, with the same mortgage, and I intend to continue owning exactly 1 house. The current market price doesn't bother me.

by Zachary Smith | 4th Nov 22, 9:56am 1667509009

Requests for property appraisals are increasing.

I wonder if that is just because agents are working hard on the phone calling all their contacts. I've had two calls in the past week asking if I want an appraisal.

by wrightoff | 4th Nov 22, 10:17am 1667510246

...and if you were interested in selling you might say yes. If you weren't you probably would say no.

The statement stands.

by Whatwillhappen | 4th Nov 22, 12:25pm 1667517947

We got appraisals a few years out from when we actually wanted to sell. Free advice from an agent on what features buyers pay premiums for. We can't be the only ones.

The statement would stand better if it talked about conversion rates from appraisals to signed contracts. If these were increasing then you'd know something was up.

by IT GUY | 4th Nov 22, 10:51am 1667512275

People realising the peak is in and that the best time to sell is now vs next year ie falling prices

by swingtrader | 4th Nov 22, 12:21pm 1667517687

Wonder how much the bank is hoping to get back on this mortgagee sale? With a mere 8.5 bathrooms it's quite something!

https://www.trademe.co.nz/a/property/residential/sale/auckland/auckland-city/saint-marys-bay/listing/3815329268

by Poppyc | 4th Nov 22, 1:08pm 1667520506

that place has been on the market since the end of last year going through 3 or 4 agents. In the initial drumming up of interest they were trying to say it could go for >20m

by Befuddled | 4th Nov 22, 3:05pm 1667527541

I suspect there'll be a long queue of cashed up people, all ready snap that bargain up by paying whatever the cost.

by gingerninja | 4th Nov 22, 1:02pm 1667520131

Zachary, same, I’m getting loads of unwanted and unsolicited letters and emails from RE’s all of a sudden. They treated me like cattle when I was a buyer so I’m completely ignoring them. Their desperation is palpable however.

by HouseMouse | 4th Nov 22, 1:05pm 1667520332

I have had a few spruiking the market, along the lines of ‘it’s been a tough year but things are heating up!’

by Squishy | 4th Nov 22, 10:10am 1667509833

I'm very happy to see that rate normalisation is beginning to have the intended consequence. A house is not a magic money tree, it's a liability.

by Yvil | 4th Nov 22, 10:14am 1667510054

A house is a liability? So raising a family under a bridge is better?

by Zen20 | 4th Nov 22, 10:32am 1667511162

Well if you're a troll, then yes!

by Chaosinflesh | 4th Nov 22, 11:50am 1667515848

Yes, a house is a liability - houses cost to maintain.

The asset is the land it's sitting on.

by IT GUY | 4th Nov 22, 3:38pm 1667529493

bare land is a liability the house is and asset that pays for the LAND with its cashflow.... beginners

by HouseMouse | 4th Nov 22, 1:04pm 1667520249

Most properties aren’t liabilities but many are, including:

- leaky buildings (moderate numbers)

- leasehold apartments (small numbers)

- properties prone to natural hazards (moderate but growing numbers)

- properties next to large scale infrastructure projects eg. Motorway widening (small numbers)

by BadDragon | 4th Nov 22, 3:02pm 1667527349

definition time.

an asset is something which puts money in your pocket

a liability takes money from your pocket.

a house with a mortgage is the banks asset and your liability.

by taimaiakka0 | 4th Nov 22, 10:26am 1667510787

They are saying what they are saying as are forced as no more are able to manipulate and fib.

Also they admitting that us bad actually means is worse.

From now on such new will be common.

https://www.afr.com/property/residential/vendors-sell-for-large-losses-…

by Zachary Smith | 4th Nov 22, 10:32am 1667511157

Unfortunately it seems we are not allowed to discuss individual cases of houses selling at a loss. I just had a comment deleted linking to one possible example. I can see that could be sensitive however it is happening.

It is nothing new though. In years gone by it was expected that you would lose if you sold within a year or two of buying. Buyers usually paid a little too much. Only in recent times have rapid price rises been an expectation.

by malamah | 4th Nov 22, 11:06am 1667513185

Interested to know if posting links to sold houses is a breach of the terms of this site...? Admin?

by K.W. | 4th Nov 22, 2:45pm 1667526335

Watching one in Christchurch at the moment - sold in May 2021 for $681k, then resold in Mar 2022 for $776k (with no change in condition). Currently for sale again with an asking price of $745k. However, online valuation estimate is $650k-$700k. Its been on the market for a month now, no takers.

by Future | 4th Nov 22, 5:16pm 1667535415

That can't be right Zachary Smith. There has been many stuff.co.nz articles that have had loads of very specific examples of individual properties with their exact losses. And they were posted into the comment sections. Could it be something else ? I would hate to think this site is becoming like those Australian RE agents controlling what losses the public get to see.

by Nzdan | 4th Nov 22, 7:51pm 1667544710

Well that Kim commentator was giving weekly updates on the Wellington housing market, until one day their comments were deleted and I believe they instructed privately not to continue.

But hey, it's a private website they're well within their rights to moderate what content is shared in the comments section.

by balance | 4th Nov 22, 10:34am 1667511267

It's not going back to Ponzi....so letting the housing market go out of control in the first place is the problem. Not the fact it is correcting itself. This correction will be very painful, but It is needed and a positive thing. Not positive if you're building tiny filing cabinet houses. The government was criticised for spiking the housing market during covid, now it's getting hammered for mortgage mayhem. Damned if they do and damned if they don't. The Herald will tell us how we are punishing FHB but the Herald is biased by the fact they are paid for advertising. I personally feel optimistic.......happy daze :)

by Dale Smith | 4th Nov 22, 4:22pm 1667532123

Exactly. There is no Ponzi in the world that has unwound itself without pain, and while some people will say this is not a Ponzi, it should also be noted that there is no housing bubble/crash in the world that has also unwound itself without pain.

by Grattaway | 4th Nov 22, 10:36am 1667511368

Housing markets when prices are falling are usually very sticky

Many dont want to accept that prices have fallen so sit tight

Its more emotional selling the place you live rather than other assets

If you have to refinance it will be at a higher cost so more incentive to delay - etc etc

However eventually people have to sell - died, divorced, new job new city/country etc etc. But this is a lagged effect

So I expect the falls to continue for a while yet - and now rental rates as well - both of which will be a good thing as people will be able to feed their families without needing $250/week pay increases

Maybe, finally some sanity returns - now which bubble will the speculators and gamblers inflate next - something to do with climate change is looking likely - forestry "investment" anyone? what about shares in a solar panel or windmill farm?

by Zachary Smith | 4th Nov 22, 10:38am 1667511537

Debt collection agencies and soup kitchens?

by BadDragon | 4th Nov 22, 3:07pm 1667527634

we need to lose the speculative bubble prices from 2020-21... but once that level is reached we may see an overshoot from there...

by IT GUY | 4th Nov 22, 10:55am 1667512521

Fewer investors are active in the market. Investors have decidedly stepped back from the market. However there is no mass exodus of investors form the market either. For the time being at least, they appear to be sitting on the sidelines.

things may turn decidedly worse if they re-enter... as SELLERS

by Chairman Moa | 4th Nov 22, 11:30am 1667514626

Actually Tony mentioned many years ago that he bought a holiday unit in the Gold Coast. If it's in good location, he would be laughing all the way to the bank now..Because of the internal mass migration from southern states, some units in GC have double and some triple in value!

He's no slough!

by IT GUY | 4th Nov 22, 3:29pm 1667528957

He said on Newstalk few weeks ago he only buys houses to live ion, never purchased one as an investment..... I think he likes the gold coast, prefer sunshine cost myself but whatever floats your boat

by Carinaz | 4th Nov 22, 11:55am 1667516126

There are more first home buyers in the market. However the latest survey results suggest growth in their numbers is slowing

Correct many FHB were and are in the market but difference between earlier and now : Earlier many were still under FOMO, who still bought, not at premium but paying decent price but slowly even that perecentage of FHB is drying up so will be wait and watch.

by gingerninja | 4th Nov 22, 12:16pm 1667517411

Yup, I have some friends, recent FHB. Nice couple, their parents helped them. Neither they or their parents had ANY CLUE that the property market was correcting. People commenting on interest, naturally, are seeking out economic news, but there are great many people who don’t even read the economic news on stuff/Nanny Herald, let alone seek out financial advice. News often spread around the BBQ or water cooler, so dependent on your interests and demographic, a great many people still will not have realised.

by HouseMouse | 4th Nov 22, 12:25pm 1667517907

Some people look at me like I am crazy when I point out to them that prices are around 20% down from peak in Auckland.

by IT GUY | 4th Nov 22, 3:31pm 1667529083

where they are lower now, just not reported yet

by NZGecko | 5th Nov 22, 8:35am 1667590510

Parts of my local West Auck are down over 25%.....as the local rent slavers realise that the jig is well and truly up, on hawking off accomodation and getting tax favours on old houses.

At even the 25% down market......the buyers today will need snorkels in 2023, as negative equity takes a bigger and bigger hold around the DEBT burdened throats.

by Nzdan | 4th Nov 22, 12:51pm 1667519470

And that is the very reason why the "People should know that interest rates couldn't stay low forever" throw away lines are BS. Everyone that comments on interest.co should know that interest rates couldn't stay low forever, but people who have taken out a mortgage and then got on with their lives (working, family, hobbies) might not read up on macroeconomics on a daily basis, and would be forgiven for believing the bank wouldn't give them a $500k loan at 2.5% if in 12 months time that would become 6%.

by gingerninja | 4th Nov 22, 1:13pm 1667520782

You’d think so Nzdan but we’ve seen plenty of members in the interest comments section over the last year insisting that the market would never correct, that interest rates would not go up beyond a certain point etc. The various biases and irrational thinking is endemic to humanity.

Someone commented just yesterday (seemed to be a property investor) that they would manage unless their mortgage went up to 8.5% at which point, they’d need to sell. The likelihood of 8.5% is actually pretty high and of course, by then, the market will have an even bigger glut of unsold properties and an even smaller number of potential buyers (or if there are potential buyers, their borrowing power would be significantly less, leading to even lower values). People are piss poor at assessing risk objectively.

The same mistakes are made in every market, every single time. It’s wild. Every crash, in every market I watch the pattern in stunned amazement at how reliable the pattern is. Those who have been through a few cycles, in a few markets tend to be more savvy. They learn from earlier mistakes. But with the NZ property market, there has been precious little reason to doubt the irrational narrative of the property cult.

by J.C. | 4th Nov 22, 12:33pm 1667518397

It could be worse. We could be China.

Prices for new homes in 70 Chinese cities fell by a worse-than-expected 1.3% year on year in August, according to official figures, reflecting a turbulent 12 months in which China’s housing sector has gone from an unstoppable driver of growth and prosperity to being the chief threat to the world’s powerhouse economy.

Nearly a third of all property loans are now classed as bad debts – 29.1%, up from 24.3% at the end of last year, according to research by Citigroup this week – with once safe state-owned property developers driving the increase.

https://www.theguardian.com/business/2022/sep/25/china-property-bubble-…

by IT GUY | 4th Nov 22, 3:37pm 1667529429

Imagine you live in China;

You purchased off plan and mortgage was issued, you now paying it.... or not.

Builder has not even built and is now in debt default, site barely has broken ground, no one is working there as no one is getting paid.....

No one will buy at the price you purchased as no one believes it will ever get built, its just not possible to get out of paying a mortgage on "air"

by thinktank | 4th Nov 22, 12:37pm 1667518667

Mine went on the market today. Wish me luck!

by Mrs The Point | 4th Nov 22, 7:28pm 1667543318

Good Luck! Keep us posted.

by powerupkiwi | 4th Nov 22, 12:52pm 1667519532

Tony needs what the banks are gonna get (a haircut). I’ve had enough of this guy.

by J.C. | 4th Nov 22, 1:06pm 1667520410

If I were Tones, I'd go for the short all over.

by HouseMouse | 4th Nov 22, 1:43pm 1667522633

I could see him rocking a dodgy mullet

by Zen20 | 4th Nov 22, 2:01pm 1667523704

Ditto and then he wouldn't have to colour either

by Wiseguy | 4th Nov 22, 1:23pm 1667521406

The picture is going to become even more glum for the real state market

by nigelh | 4th Nov 22, 2:43pm 1667526186

According to RNZ who interviewed a New Plymouth real estate agent, this area is bucking the trend. About the least drop in house prices in NZ. Quoted realestate.co.nz data.

by Carlos67 | 4th Nov 22, 4:05pm 1667531107

Yeah but it was super cheap to begin with and less than half the price of Auckland. Hardly a surprise. Been there a few times but wouldn't want to live there.

by nigelh | 4th Nov 22, 8:26pm 1667546795

Not comparing with Akl. Its relative to the market in New Plymouth and in % terms better than most of NZ

by DTRH | 4th Nov 22, 3:07pm 1667527662

It’s Groundhog Day, The biggest housing bubble has exploded price’s will probably crash back to 2011 levels over next few years no point getting upset about the reset has to happen.

by IT GUY | 4th Nov 22, 3:45pm 1667529920

A 2011 level crash and we will have nationised all the trading banks... just saying.... 50% off just takes us to about 2016

by DTRH | 4th Nov 22, 4:26pm 1667532361

Average wage couple will be able to borrow maybe around $400k so the floor of this crash will around this level for 3 bedroom house

by NZGecko | 5th Nov 22, 10:34am 1667597662

Yes, once the crash crater to 40 or 50%....... The Govt will then bring in the 3.5 DTI law......property will then be anchored to a reasonable earnings level and appreciation within its bounds.

by Averageman | 6th Nov 22, 7:17am 1667672237

One can only hope that happens.

by Zachary Smith | 4th Nov 22, 3:56pm 1667530589

Some vendors are turning down very good offers at the auctions. Those hoping to pick up bargains currently will be frustrated. You would expect some discount for current conditions wouldn't you?

Auction in Auckland today saw all properties passed in and one withdrawn. Hopefully I am allowed to make this very general observation.

by Carlos67 | 4th Nov 22, 4:09pm 1667531364

How often do the vendors really, really have to sell ? I watched a few places down here get pulled after a few months and the owners are still living in them so many people move simply because they are bored. The auction is a sure fire way to find out who really wants to sell but I guess you cannot get picky if you want a bargain.

by DTRH | 4th Nov 22, 4:40pm 1667533244

Some people jumped into market over last couple of years on emergency level rates these mortgages will need refinancing quite soon so on a 800k mortgage was paying $750 per week now will be paying $1200 per week we will be seeing defaults soon as some people budgets were already pushed to limit’s. Carlos this is why stock levels are climbing very quickly, just it’s a tad to late as price’s are falling very quickly.

by Firstclass | 4th Nov 22, 5:43pm 1667537005

Let us all donate a small amount, so Tony can get a haircut.

by Caughtinthemiddle | 4th Nov 22, 6:01pm 1667538068

The FHB data distresses me. The overall number of properties purchased each month is on the decline. Fact. The amount on average that they cost is similarly on the decline. Fact.

But FHB's are now buying more houses compared to any other group. This distorts the data. They are buying less properties than before BUT the other groups are buying even LESS but let's not mention that. They are paying less too but shush. The headline is thrown up to suggest the Ponzi has taken a breath and a pulse is present.

Ruthless, cynical and unethical.

by Zachary Smith | 4th Nov 22, 6:36pm 1667540186

Except it's not actually a Ponzi so neither ruthless, cynical nor unethical.

by Caughtinthemiddle | 4th Nov 22, 8:37pm 1667547438

I expected better form you ZS.

Back up with data or queue up behind the or others like TTP that just want to blow.

by Zachary Smith | 5th Nov 22, 6:01am 1667581316

That houses exist in sufficient quantity and provide shelter and rental income is all I need to rebut the claim that it is Ponzi. Also that inflation is a real thing.

Last week at the auctions a one bedroom unit in St Heliers sold for 460k. An investor could buy this and rent it out and make similar money to a term deposit. The property is likely to keep pace with inflation which a term deposit will not do. After 20 years which will be the better investment, a term deposit or this property?

An investment in a Ponzi scheme would completely vanish as it was simply paid out to early investors as yield. The actual thing that was invested in didn't actually exist in quantity whilst houses do and houses remain sought after and viable.

by common cents | 5th Nov 22, 8:34am 1667590461

100% if these so called experts are idiots!.

They all review a few "favorite" stats and numbers then make a guess.

They all have differing data inputs and as such end up with different predictions

FFS, even the RB can't guess it right .

Commons sense sees .

Listings are uo because people want to cash up before they lose to much equity.

COL up

Inflation UP

Wages up and driving the aforementioned

Immigration down.

SHORTAGE OF WORKERS

Govt debt at record numbers AND WILL GROW AS THE ELECTION BRIBES COMMENCE!

Mortgages up

Mortgage stress up

Investments down except term deposits

BOB JONES LATEST ARTICLE PREDICTS 15% INFLATION BY NEXT YEAR END Bob is more accurate than most..