The number of first home buyers getting into a home of their own at the start of this year was at its lowest level since 2015.
According to the latest Reserve Bank figures, banks approved just 1166 mortgages for first home buyers in January, the lowest number in any month of the year since January 2015 (apart from April 2020 when housing market activity came to a standstill due to the Covid lockdown).
And as mortgage interest rates have been steadily rising, the amount being borrowed by first home buyers has been steadily decreasing.
In January this year the average value of the loans approved to first home buyers was $548,885. That's down by $46,513 (-7.8%) from its May 2022 peak of $595,398.
However almost a third of those loans approved in January this year were low equity loans to first first home buyers with less than a 20% deposit.
In January this year, 370 low equity mortgages were approved to first home buyers.
Although that is a low number, it made up 31.7% of all the mortgage approved to first home buyers in January.
That was the first time the low equity loans to first home buyers have gone above 30% of the total since November 2021, when house prices also hit their cyclical peak.
While rising interest rates have reduced the number of first home buyers getting into their own homes, they are also affecting the amount they are paying for them.
Interest.co.nz estimates the average amount paid for a home by first home buyers in January was $659,000. That's down by $58,300 (-8.1%) compared to the peak of $717,724 in April last year.
Although higher interest costs mean fewer aspiring first home buyers are getting into a home of their own, they are proving to be a more resilient part of the market than either investors or existing owner-occupiers.
Interest.co.nz estimates that first home buyers accounted for 42% of residential property sales in January this year, up from 34% at the market peak in November 2021.
However the low overall number of mortgages being approved to aspiring first home buyers suggests that home ownership likely remains an impossible dream for many.
The comment stream on this story is now closed.
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119 Comments
Less than 20 percent deposit and spend less overall. No need to pay due diligence costs upfront of an auction.
Conditions improving for FHB?
Time to buy?
House prices are falling fast (i get daily notifications of price drops from trademe). Who would buy something that is falling in value so quickly. When the repayments are rising.
FOMO is long gone. Houses are on the market for ages it feels... and by negotiation so no mad rush to buy or bid up. Rents are stable.
Lots of new houses being completed and also hanging on the market.
Parents wont lending for deposits while their own asset prices are down. And will be counselling kids to wait a couple of years til the market bottoms out.
OSE. "Who would buy something that is falling in value so quickly"
1166 FHB's according to the article:
"banks approved 1166 mortgages for first home buyers in January"
Took the train into Auckland city today. Unbelievable how many appartments and terraces have popped up along the rail corridor in the last 5 years. A lot looked brand new, maybe not even on the market yet.
Houseworks you naughty boy....
Absolutely! FHB's should all just throw caution to the wind and dive headfirst into the housing market with less than 20% deposit. Who needs a safety net anyway? Who cares if you're potentially getting ripped off, am I right? As for the conditions for first-home buyers improving, why wait to find out when you can jump in now and hope for the best? So, what are you waiting for? It's definitely time to buy! /sarc
More than 1100 joyous fhb disagree ... even in a slow holiday month
You are just so mischievous Houseworks. We have the MSM and nasty spruikers to thank for convincing FHB's now is a good time to buy. By every metric the outcome of all that FOMO-inducing vomit is just encouraging more lambs to the slaughter in what is largely shaping up to be a blood bath for anyone entering the ponzi this late in the piece. But hey you do you - I'm sure you have nothing but altruistic motives.
anyone entering the ponzi this late in the piece
Endless spruiker/naysayer debate aside, the question does beg that once the 'ponzi' has collapsed, what will remain in the ashes.
Will people still desire to own a house?
Or will renting be the better option for the next 50 years?
Have central banks ended money printing as we know it?
There's a lot of reading to do in the chicken bones.
What will remain is a generation or two of people who are very wary of getting into excessive debt, and jumping blindly into financial decisions. It will affect not only those who bought, but those who did not or could not buy. Like the silent generation that hid their cash under their mattress, the next will stay well away from debt and be very suspicious of banks.
The ones that get burned might learn that lesson. Most others will have short memories.
TTP, that you? No but seriously, why so much spruiking? It’s so predictable it’s boring.
I asked if conditions are improving and pointed out a few things that are pluses
You always seem angry and offended Albert despite buying your first home late 2021. Ah maybe that's because of
Did you actually read the article? Lowest number of mortgages to FHBs since 2015. The stats would tell otherwise. If stating you’re a sad spruiker makes me angry then so be it. If I bought in late 2021 wouldn’t it benefit me individually to be a sad individual and try and spruik the market like yourself? I’m more than happy house prices are dropping because unlike yourself I’m well aware that the social ramifications of the housing crisis far outweigh my individual financial benefit. I bought my dream home, we plan to live there for 30 plus years. In contrast it’s quite clear from your posts that you have a little too much skin in the property Ponzi game.
I bought my dream home, we plan to live there for 30 plus years
You refer to the property Ponzi, like you have just woken up to something going on behind your back
If you bought your dream house when you did in 2021 and you are still delighted with it, why can't you be happy for those who did the same last month when houses were on sale.
They will be over the moon. But when I say they are "joyous" it gets you rattled.
The Ponzi has been happening since the Clark government. When did I say I wasn’t happy about people buying their own home? If they are in a strong financial position to do so and it suits their current stage of life then go for it, that’s what we did. I’m more concerned with your constant attempts to spruik the market despite all the evidence highlighting the property market is in the doldrums and will continue to be for a long time yet given inflation has not subsided anywhere enough for interest rates to drop let alone stabilize. Maybe it’s time for you to liquidate those liabilities of yours
You may be in a flap however I think I am experienced and capitalised enough to not be
Enjoy your day, do you pinch yourself everyday to make sure your dream's not becoming a nightmare. Pity you decided to wait so long before jumping aboard
“Decided to wait…” your ignorance is blinding haha. Remember you are the one constantly spruiking ad nauseam on this site, it’s quite clear you’re the one drowning here. Right I’m off to go for a walk through the farm with my young family. Until your next sad post, signing out.
its quite clear you're the one drowning here
there is no need for you being a hypocrite buying your dream home at a skyhigh price and telling us how blissful it is. Then you act pious and community sprinted that it's your job to warn and forebode others against doing the same.
You get all anxsty that me or others would dare say otherwise. You say that its all a ponzi, and that you recognised that when Helen Clark was Prime Munster over 20 years ago. But you still bought into it.
As far as drowning goes, fortunately for us its a river of gold
Admin. Can we get a feature to block out selected members to avoid their unconstructive ramblings. Would be a great option...?
Albert2020 | 5th Mar 22, 9:52am
What are you his mother? BLs a big boy, if he wants to throw muck he has to expect some in return.
More than 1100 joyous fhb disagree ... even in a slow holiday month
1100 FHBs that haven't run their numbers or don't read interest.co.nz
http://www.theshapeofmoney.co.nz/general-resources/calculators/rent-ver…
Maybe Greg needs to update this with an article
https://www.interest.co.nz/property/rent-or-buy
Yes, owning your own home is desirable, it's just not always the best financial decision for your life stage
Buying now with at minumum a further 10%+ in falls to come will wipe out at least 5 years of principle repayments
Right now it's a no-brainer for a FHB to wait for the market to stabilise - where there will be a prolonged period of no capital gain, like every previous cycle
Be patient, keep your powder dry and your nest egg building in a term deposit
Ignore all the noise from vested property industry muppets
I don't believe buying a house in this country will ever be 'worth it'. It's been an absolute farce for almost 2 decades now. It will never improve.
It's all a rigged game.
I'm still working out whether it was better being a medieval serf, or a wage slave in the modern era. I'm still leaning pretty heavily towards the latter objectively, but the former subjectively.
Haha yeah.
Seen with some perspective (if one steps outside of the education-career-mortgage-family-pension process) the whole game is kind of funny and very predictable.
For us... we fight to see who can commit to the biggest debt and work longest and hardest to service it. Spend all before we pass except a small amount we are taxed on before passing down for our kids to put doen a deposit and continue the process.
For them.. work little, and see how many of us they can get to work hard to earn more money for them and then they get the money back through rent and mortgages etc.
Trick is to find a way off the treadmill and enjoy life whilst watching other play.
Its why i dont umderstand why a FHB would commit now when the market is falling. If they pay just $100k more than they would next year for the same house .. then they will prob work 3-10 years longer in their lifetime vs someone who buys next yr due to less ROI and to save to pay the larger principal and interest. Probability favors the drop too.
Its why i dont umderstand why a FHB would commit now when the market is falling. If they pay just $100k more than they would next year for the same house .. then they will prob work 3-10 years longer in their lifetime vs someone who buys next yr due to less ROI and to save to pay the larger principal and interest. Probability favors the drop too.
I suspect the FHBs that are buying now simply don't understand this - and banks and brokers are not incentivised to tell them to wait and save more
We are in a very rare market dynamic for NZ - we haven't had property prices falling like this for over 40 years, there is a national mentality that is being broken
It's going to take time for the stories of FHBs that sold at a loss to spread around the BBQ etc to really put them off buying
It's happening already for investors on their forums - I saw one where an investor was saying "i'd be rich and have my kid in private school if I hadn't bought a rental"
"It's going to take time for the stories of FHBs that sold at a loss to spread around the BBQ etc to really put them off buying"
Except that most dont advertise their loses, and those that do tend to minimise them.
To your landlord you are the gift that keeps giving. Trapped in a rental your whole life for the 60 years of adult life.
Over 15 years from age 65 you will spend more than 300k on a very average home with probably constant rent anxiety. Make sure you save heaps, you will need it. A one beddie at the back of a garden in Hamilton costs 400 plus per week. That is if any are available
Over 15 years from age 65 you will spend more than 300k on a very average home with probably constant rent anxiety. Make sure you save heaps, you will need it
No fears my little puppet friend. The ruling elite can simply create that rent money and all is good. Your loyalty will be appreciated though.
The bigger problem now is that it's unclear if the property ponzi can keep on delivering on the "income" (or should we say credit creation) that the muddle classes have relied upon and foregone savings for tomorrow by consuming today (who needs to worry when house prices double every 7-10 years?). However, when residential housing values are 4-5x GDP, you've got an issue (Japan only peaked at approx 3x and that was supposedly the bubble for tha ages). The vast majority are still in the denial stage.
No fears my little puppet friend. The ruling elite can simply create that rent money and all is good
Now you are being absolutely ridiculous
The AS is not simply creating rent money but is a distribution of taxes from others earnings. Even that has limits. There are commenters who are already totally opposed to such payments that say that the subsidy inflates rents. But you would have the ruling elite expand the payments. Stupid comment JC
The AS is not simply creating rent money but is a distribution of taxes from others earnings.
Taxes are not the mechanism by which govts can spend. Even today. And govt spending is essentially limitless, particularly with social credit which is primed in a digital age with the distributed ledger paradigm (and no, this does not relate to the mighty Bitcoin, even though it's a reason for its existence - as a counter to the madness). It's simple - govts can pay the cost of accommodation for all concerned while the obligation on the ledger accumulates. The renter dies. The debt is extinguished. Makes much sense when the renter is alive as they can spend all their disposable income into the economy. Win Win.
DP
QE like funding for lending, was aimed at maintaining the financial system. Thats over. You are obfuscating now, let's leave it there
In the interests of accuracy, check out this two beddie at the back of a garden in Hamilton for 500pw. Thats 26k of your net income every year for something produced on the cheap in a huntly factory probably, and craned in place. Put a couple of wheels on it and there's a mobile tiny home
I saw this listing you may be interested in: Chartwell, 2 bedrooms
https://www.trademe.co.nz/property/residential-property-to-rent/auction…
Stil better than losing $100k/year on an overpriced low-quality house.
Trapped in a rental your whole life
Haha nice try - no renter is ‘trapped' in a rental, that’s the benefit of renting - you can move at anytime after your first year fixed tenancy
However the landlord muppet that bought a block of flats in Thames is the one who is really trapped - no one wants to own them
Now the party is over for capital gains, you’re buying negative cashflow until property values fall enough that yields are higher than interest rates/cost of debt
With 40% deposit required and no interest deductibility that’s a long, long way away
Imagine your equity earning passively for you at 5%+ in the bank?
Add to that the anxiety of not knowing where interest rates will rise to, and the bank asking you to sell or add more equity to your portfolio
Depressing huh
Thames is a beautiful and central part of Aotearoa. Unlike the rest of Coromandel it did not get flooded out or cut off in any storms. A lot of people don't know that. Not sure if its shielded by the ranges but the weather floats over and then floods out places like tairua. Ask Yvil if he knows.
Also confirming we do not own a block of flats or any property in Thames, I don't know if any blocks exist there.
"it did not get flooded out" Bullshit
"I don't believe buying a house in this country will ever be 'worth it"
If that's what you believe, then you will unfortunately never own your own house, maybe it's time to revisit your beliefs?
If that's what you believe, then you will unfortunately never own your own house, maybe it's time to revisit your beliefs?
The trolling's getting damn predictable Dr Y. Wondering if you and ol' HW are both sock puppets of the same same puppeteer. Uncanningly similar and coordinated.
It's unfortunate you see my post as "trolling" JC. My post is about psychology, what we believe, is most important for where we end up in life, and we can actually have control of things we believe. Too often, when we think we can't get something, be it a materialistic thing, a job, a partner etc... we end up rubbishing said thing, in order to make ourselves feel better. We then tell ourselves that we don't want what we originally actually wanted. This becomes our new belief. For example, if one believes he/she is not worthy of a good relationship, it will never happen. It's then time to revisit one's belief, in order to be able to have a good, healthy relationship.
I have no issues with trolling Dr Y. As long as it's clever and witty.
JC, you are one of the smartest commenters on Interest, so I'm really surprised that you completely miss the point of my post. Please re-read my post without prejudice that I'm "trolling".
I own a house and still agree with that statement. I love my house but it was a total ripoff.
So, if you agree with the statement "I don't believe buying a house in this country will ever be 'worth it", why don't you just sell your house? (honest question)
Found this article in today's Herald, Brock missed out buying Northland property
'Treated like vermin': Unvaxxed couple claim discrimination in house sale
https://www.nzherald.co.nz/nz/tribunal-throws-out-complaint-from-unvaxx…
It's not that they dont want to buy...its that banks are restricting access to debt in a falling market. Looks like a retreat from speculative leverage.
PS every remembers that leverage is bidirectional and crushes paper equity.
It looks like a protracted, almost global effort to nerf economies by central banks. And housing is directly affected.
But yes as you suggest the desire is still mostly there, what no one really can be sure of is what conditions will be, and for how long.
A retreat from speculative leverage would mean LVRs 60% or less, and debt-to-income less than 4.5.
The problem isn't the banks not willing to lend a reasonable amount, its the ridiculous prices that have to be paid. Never in NZ's history have house prices been so disjointed from HH income. The answer to this problem isn't "more debt".
A year ago, house prices were more disjointed from HH income.
However the low overall number of mortgages being approved to aspiring first home buyers suggests that home ownership likely remains an impossible dream for many.
In what way do these figures suggest "aspiring first home buyers" are missing out on their "dream" of home ownership, as opposed to just happily waiting on the sidelines saving themselves something on the order of $10k per month?
You'd have to assume people who were expecting to buy a house about now, for whatever reason at this stage of their lives, probably aren't 100% stoked about sitting on the sidelines for a fair while.
Not sure why you'd have to assume that. I'd be more tempted to assume that people are sitting there by choice.
I'm not assuming it for everyone, but some people have life priorities other than 'snapping a bargain', or 'not catching a falling knife'. The current environment won't have featured in everyone's plan making.
It pains me to say it but you're right, some people simply won't wait. The majority of people who own houses now are still in denial and think a reversal is coming any day now.... they tell potential FHB this and spook them into diving in. Prices have come down so those who are not financially savvy or are under pressure will fold to the spruiking because they perceive current prices to be a bargain.
As evidence, 0.02% of the population just bought their first home despite the fact they'll soon be very low on equity and possibly into negatives.
I'll be waiting for the bottom you can count on that!
You’ll be saying it’s just a dead cat bounce as the market turns around and come 2030 you’ll still be paying rent and gnashing your teeth at how unfair it is.
Surely this will be an unintentional surgical strike. Housing will be made cheaper, but all the jobs and industries kept afloat by the same financial mechanisms will be left intact.
I reckon the down turn will last longer and affect us way more than the housing price reductions. Its a domino effect that takes a long time to play out.
We are at the start of what will probably be 7 to 8 years of economic contraction and have barely started to notice the other impacts of whats happening. The economic downward curve tends to last as long as the upward one did (and we prolonged the upward one beyond anyones dreams due to covid).
Orr has told the government to stop funding new projects from new money and reallocate budgets or raise taxes (or he will raise the ocr to pull mkney from the system as they spend more and blame them). Businesses wanting to borrow to expand or refinance debt will now find it harder to raise funds and more expensive to service the debt. As money is removed from the system in every area so there will be less revenue for those businesses who will have to contract...
It becomes a downwardloop... and it is very hard to stop now we have started it. Unlike the upward curve history confirms (regardless robertsons words about how great the economy looks) we have limited tools to ensure a soft landing.
Agreed OSE, the downturn, both economically and in the RE market will take much longer to play out than many think, great post!
I'm still picking the house price bottom as 2027 and nominal prices not getting back to previous levels until 2032. Inflation-adjusted gains will be far longer.
Quite the prediction, however, lacks evidence for someone who claims to be pragmatic.
Why do you think the market is going to suddenly turn?
Pragmatist's post is not about the market turning, it's about the fact that it's impossible to know when the market bottoms (except in hindsight of course)
Well, that's a fair statement, however, Yvil you were able to articulate that so much better.
Sure I don't expect to get to the very bottom best deal ever, we just have some ways to go and IMHO now is not a good time to buy.
I'm not paying rent so won't be gnashing my teeth in 2030. In all likelihood, I'll almost be mortgage free by then.
Very true Pa1nter!
Can confirm sidelines are just awful, especially with kids. its been nearly 12 months and we are well over it!.
I wonder how many refusals there are each month, which would indicate the level of buying demand.
It looks like banks are more confident about future house prices if they are allowing more borrowers to use low equity. Banks have to be fiscally responsible so couples with comfortable debt service ability
I guess while FHBs have an option to stay on the side lines , banks do not.
Loans must be written or the bonuses evaporate.
If you were a potential FHB it must be much nicer not suffering the FOMO.
Is our housing market where Japan's was in 1989? i.e. its still over 30% down on 1989 prices
A few years ago the government announced that it was going to help first time buyers. So completely predictable that the opposite would actually happen.
They sorta have, but what they havent done is address supply.
The Govt giving FHB extra funds to buy housing that was already ridiculously priced years ago, just pumped up prices more and more.......cat chasing it's tail, in full display!
This coupled with ponzi buying landlords......just pumped the balloon of major insanity pricing, to the moon.
Now.....HIGH AND HIGHER cost of funds is doing the heavy lifting to drop pricing of this life neçcesity down to earth......at a rate that is much faster than the Irish crash. Good.
When Auckland basic rat boxes are back to 400k.....about right from DTI and Yeild point of view.
Another 20 to 30% down and job done.
I think the market has another fifty percent to fall and this is going be a five year train ride to hell for many
choo choo
Ha! Just yesterday I was listening to an auctioneer say, "...take advantage of that freight train of capital gains to be had into the future". Property passed in with a bid 800k over the price paid by the vendor back in 2016.
Yeah. Just blatant spec greed. A few must sells will take place and announce where prices really are and what people in NZ can borrow now.
Many of us way back pointed to the inevitable result of "helping" was to increase prices. The way back being the introduction of grants and ability to use kiwisaver for home purchase. Totally senseless and counterproductive but swallowed whole by the media and general pop.
Welcome home grants that set price limits too low. Or withdrawal of your own kiwisaver funds is not "help" tsk
"Way back" Fhb used to get govt guaranteed 3 percent interest rate loans to build a house
And the capitisation of family benefit. The real control was exerted by the availability/restriction of loaned money so it was a completely different environment.
If you are trying to say that upwards pressure on prices did not exist then you are talking bollocks
I almost wrote bullocks which would be ironical for you
https://www.youtube.com/watch?v=50FHR7h3k8A&ab_channel=Newshub
If you start at 27:50 you'll hear exactly what the govt planned to do about our housing crisis.
I suspect that many FHBers are submitting “wasting everyone’s time” level offers …. Tick tock tick tock
run that clock down waste away it’s 1% a month
These totally stupid Govt grants, totally stupid "raiding your old age Kiwisaver funds", get every cent of squirreled cash and future debt, all fed into the totally nefarious Real Estate industry tactic of finding out how much cash/blood can be drawn from a Buyer:
1. How much money can be accessed/drained from every available corner of a buyers life, that is now, future and old age life funds.
2. Then put the Real Estate Agent scorpion pincer move (financial headlock) on the hapless FHB or any buyer.
3. Then the REA will vampire like, drain to the last drop, all and any funds (now and far future) of a hapless buyer to feed themselves their agency and then the vendor.
This unraveling of epic proportions, that has not been seen since the 1970's in NZ, is long overdue and welcolmed by most.
Totally agree.
And the tragedy for many is that they will have lost the most productive times of their lives to create a family, and the life that goes with it.
What hope is there for the country when FHBers are now well into their mid/late 30s before they commit that remaining lifetime of funds to just one asset, as you write? None. (NB: Just try having a stable family into the uncertainty of our rental market)
Until we fix this mess, expect the natural rate of population increase to plunge, and the gaps filled by a new crop of New Zealanders. Which just perpetuates the suicidal cycle.
The natural rate of population increase is already borked and even if houses were free it wouldn't fundamentally alter things.
Perhaps, but I'd like to give young people the opportunity to choose whether or not having a family is for them in a house they own.
Mind you, I'm not afraid of a decreasing population anyway, in fact it would be good in my opinion, we could choose which bureaucratic jobs to do without on the way down!
NZ gecko:
"stupid government grants"
"nefarious Real Estate industry"
"Real Estate Agent scorpion pincer move"
"the REA will vampire"
"the hapless FHB"
Well, at least you make it clear where your bias lies. LOL
Sorry if I have maligned you or your principal income stream?
Anyway, there is abundant work in the muck and slash clearing business, down on the North Is East Coast.
Good luck!
You have not "maligned" me at all (and no need to get nasty). I just thought it was funny how obvious you make it, that you hate real estate agents so much.
I never intend to be speak nasty, just honestly.
Im glad to see that you have turned the page, backpeddled, to the side that landlording in no longer the one way bet of every increasing returns, to nirvana, that many have told the masses to jump into for the last few decades.....aka like the AC and TA have and still do.
Some of the best RE agents that I know, are people.
A few of these people are good blokes/blokesess and some even tell the truth. Fair?
You missed shadow global banking interests.
Low balling to condition the sellers perhaps?
As a FHB with much more than 20% deposit. I am waiting.
Financially literate FHBs will be waiting.
You dont need to time the bottom perfectly. You just need to listen to uncle Orr's wise words.
There's no uptick until they pause rate hikes. Even when they pause we may very well be in a recession. No hurry.
Wise.
Higher rates held for some time = property values flatlining to a dropping bias imho. But owning your own home and living in it, has good benefits, I can attest.
No property uptick until cheap loans return. I have scanned the horizon and the cheap cash bobbing boat...... is nowhere in sight.
- Has it been sunk dead to the seabed, by a Ukrainian Neptune missile, much like the mighty and ever talked up, invincible, pride of the Russian fleet Moscova was? Possibly.
Can its holed and deflated carcass be refloated and reanimated? maybe in years to come.
For example, let's say someone needs to spend $600k on a house today to tick all their boxes. Assuming interest rates stay at the same rate for the entire term to make a comparison. If they can hold off and save say 10% later this year or early next year. Their mortgage would go from 25 years to 18 with the same payments.
Alternatively, their payments could be reduced allowing them a better lifestyle.
Not to mention they're not stuck for years in a house they can't sell because of lack of equity.
Until RBNZ indicates OCR is heading back down it just doesn't make any sense unless a particular seller is willing to drop their price significantly.
Sounds reasonable.
But the RBNZ could drop the OCR tomorrow, and the downward correction to the over bloated property prices we have today could continue.
How? The RBNZ changes the rules; the capital weightings, around what bank Debt can be used for.
All it has to do is stipulate that the banks it supervises - the Authorised banks - can't lend more than $X; being a far lesser amount than it is today, to the secondary residential housing sector. Given banks survive on making loans, they'll have to lend to another sector other than residential property once their cap has been reached (so building of homes will still be part of the landscape) to make their hefty profits and bonuses - which they will find a way to do.
It's less about how much Debt we have as a country, but what we use it for.
Banks are multinational you may well find that they make internak weighted decisions based on the most effecient use of balance sheet. I suggest apart from agriculture and housing not much else exists, major corps issue their own bonds.
No doubt about that. But at some stage any banking organisation will ask itself" Do we want to be here?" and given the profitability of the offshoots of the foreign banks in NZ, the answer is undoubtedly, yes.
I've mentioned before that at the start of each tax each year I used to gather the members of the Tax Committee together, and we'd always start with the somewhat rhetorical question "How much tax should we pay this year?!" We figured 10% over CPI seemed to be reasonable. It could have been reduced to nil, as any multinational knows it can. A couple of structured deal with the Tokyo Office, who had a different tax year to us, and problem solved. But if we wanted to keep doing business locally, we had to make an effort.
The same will likely apply to any capital weightings that are currently internally applied, that could be made universal to any NZ based operation.
Surely most here would advise FHBs to hold off buying if they are able to. My prediction is that prices will return to a little above 2014 RV levels. I bought a house in West Auckland for 630k which was around halfway between its 2014 RV and its 2017 RV. It's likely to return to that value or maybe that's just my wishful thinking. It all depends on interest rates really.
It could well go lower when you consider the much harsher reality for landlords and tax. I wouldn't be totally surprised if it went as low as the 400s.for a time.
Even if property prices stabilise from here (they won’t). The damage is done. Landlords are arguing on FB groups, most of them are panicking. The shine has gone. Leave the industry to the FHB’s and allow it to find a natural floor. A DTI will be required to prevent future greed from investors, but for the most part, happy days.
The bubble is between the denial and fear stages. Next's comes capitulation and despair. It's been a golden run for the speculative, but an inability to exit takes the shine off as the golden gleam becomes more like lead. Overweight by debt and increasingly worth less and less...
Popcorn.
please share facebook prop owners bitching porn
Good for you to enjoy "bitching porn", each to their own, lol.
There's something super perverse about the people on here who detest property investment expending time and energy engaging in property investment forums.
It'd be like an atheist hopping on evangelical Christian discussion boards.
I'd just ignore it. Much like the PIs posts mocking people that couldnt enter the market because of the stupid prices, and tax rinsing etc.
Maybe, if they were trolling a tenants' forum or HNZ message board.
Great analogy again Pa1nter, you're in fine form this beautiful morning !
Toxic positivity on display again.
Toxic positivity ? That's weird. How about amazing, happy, positivity ? Would you rather be miserable and negative ???
It is a beautiful day and I'm happy to enjoy it, I don't see anything toxic in that.
Well said Pa1nter, great analogy!
Nooooo!!!!.…. This can't be right!!!
Bindy of the REINZ has said for the last 12,11,10,9,....1 month said it a stable market, reached its bottom, and we've seen the worst!
How could they be wrong 😎😎😎
FOHO: Fear Of Holding On. When people know there is downside risk but can't let go so get dragged under.
Classic phrases:
"In the long run..."
"It's only a paper loss..."
"Interest rates have to come down eventually."
Interesting psychology, isn't it. I have a mate who rents, and owns a house in another city. I was interested to find out why he doesn't sell, given he views housing as a ponzi and it has overreached and will continue dropping. I pushed him until he stated clearly why he doesn't try to sell. I thought it would be a combo of things like he might go back there, and it's a hassle to sell. But in the end it was the fear that he's wrong and prices will soon bounce back.
He has more courage than me.
Expecting "price withheld" to become more popular. Being sales data is public info, how long can sales price (lack theroff) be withheld?
When investment properties are being liquidated for below 2019 purchase price. Then the bright line rules become irrelevant. Over leveraged investors need get out while they can. Owner occupiers need to try and hold on as long as they can. Eventually the 2% inflation target will go in the memory hole and 4% will be acceptable. 4% is the target. It has always been the target. How else will the enormous debt be inflated away?
There is a new meme in there. How about; inflation targets double every RBNZ governor term.
There are 200,000 foreign migrants with recently acquired permanent residency thanks to Labour who gifted PR to whoever happened to be lucky enough to simply be in the country at the time, who now qualify as "First Home Buyers". Last year they made up 18% of all sales in Auckland. So what we are seeing is a demand bulge due to the visa changes. What happens when that group is tapped out?
https://www.interest.co.nz/property/119456/migrants-accounted-11-home-p…
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