The average value of New Zealand homes continues to decline, dropping another $6,242 in May.
According to property data company CoreLogic, the average value of NZ homes was $922,414 at the end of May. That's down by $6,242 compared to the end of April.
That means the average value of New Zealand homes is declining by more than $200 a day.
The average value has now declined by $120,847 (-11.6%) since it peaked at $1,043,261 in March last year.
In the Auckland region the average dwelling value declined by $10,333 last month, from $1,314,546 at the end of April to $1,304,213 at the end of May. That's a decline of $333 a day.
The average value of dwellings in Auckland has now dropped by $216,128 since the national peak in March last year.
Around the country the biggest fall in average dwelling values has been in Rangitikei in the central North Island where it's down 19.1% for the year. The biggest gain has been in Hurunui north of Christchurch where the average value is up 7.6% for the year.
The table below shows the average dwelling values in all urban areas throughout NZ at the end of May, and their percentage change over three and 12 months.
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| CoreLogic NZ House Price Index | |||||
| May 2023 | |||||
| Territorial authority | Average current value | 3 month change % | 12 month change% | ||
| Far North | $697,711 | -1.70% | -3.90% | ||
| Whangarei | $746,942 | -4.20% | -11.50% | ||
| Kaipara | $838,457 | -2.70% | -7.60% | ||
| Auckland - All of Rodney | $1,242,873 | -4.40% | -12.40% | ||
| Rodney - Hibiscus Coast | $1,150,891 | -4.50% | -13.50% | ||
| Rodney - North | $1,318,953 | -4.30% | -11.90% | ||
| Auckland -All of North Shore | $1,435,369 | -3.90% | -12.40% | ||
| North Shore - Coastal | $1,648,415 | -3.70% | -12.70% | ||
| North Shore - North Harbour | $1,374,144 | -3.70% | -11.80% | ||
| North Shore - Onewa | $1,158,378 | -4.30% | -12.30% | ||
| Auckland - Waitakere | $1,012,076 | -3.70% | -14.60% | ||
| All of Auckland City | $1,556,173 | -0.10% | -8.00% | ||
| Auckland City - Central | $1,317,975 | -0.80% | -7.60% | ||
| Auckland City - Islands | $1,676,527 | 1.90% | -9.20% | ||
| Auckland City - South | $1,431,954 | -0.40% | -6.10% | ||
| Auckland_City - East | $1,910,450 | -0.20% | -9.60% | ||
| Auckland - All of Manukau | $1,134,778 | -3.80% | -14.50% | ||
| Manukau - Central | $876,658 | -3.10% | -16.00% | ||
| Manukau - East | $1,413,188 | -4.30% | -13.60% | ||
| Manukau - North West | $991,323 | -3.40% | -14.10% | ||
| Auckland - Papakura | $884,991 | -5.80% | -17.50% | ||
| Auckland - Franklin | $955,372 | 4.50% | -8.20% | ||
| Thames Coromandel | $1,147,218 | -2.50% | -3.60% | ||
| Hauraki | $651,260 | -2.80% | -5.00% | ||
| Waikato | $737,538 | -5.90% | -6.00% | ||
| Matamata Piako | $699,389 | -2.10% | -5.80% | ||
| All of Hamilton | $804,774 | -2.70% | -7.00% | ||
| Hamilton - Central & North West | $747,397 | -3.60% | -7.20% | ||
| Hamilton - North East | $998,077 | -1.70% | -7.40% | ||
| Hamilton - South East | $738,457 | -2.70% | -5.20% | ||
| Hamilton - South West | $714,594 | -3.60% | -9.10% | ||
| Waipa | $863,747 | -1.00% | -5.80% | ||
| Otorohanga | $529,132 | -6.30% | -0.30% | ||
| South Waikato | $431,013 | -7.00% | -10.00% | ||
| Waitomo | $392,206 | 4.10% | 1.50% | ||
| Taupo | $834,587 | -0.40% | -7.30% | ||
| Western BOP | $962,753 | -4.80% | -10.80% | ||
| Tauranga | $1,022,834 | -4.50% | -13.20% | ||
| Rotorua | $646,090 | -2.00% | -10.60% | ||
| Whakatane | $734,011 | 2.00% | -7.40% | ||
| Kawerau | $392,165 | -10.20% | -10.00% | ||
| Opotiki | $519,384 | -5.00% | -5.90% | ||
| Gisborne | $599,307 | -3.50% | -11.60% | ||
| Wairoa | $381,635 | -7.60% | -9.00% | ||
| Hastings | $772,453 | -2.40% | -11.10% | ||
| Napier | $755,369 | -4.30% | -14.10% | ||
| Central Hawkes Bay | $593,179 | 0.30% | -10.60% | ||
| New Plymouth | $699,037 | -4.00% | -6.90% | ||
| Stratford | $475,244 | -4.60% | -10.00% | ||
| South Taranaki | $441,107 | 0.40% | -3.30% | ||
| Ruapehu | $373,241 | -11.70% | -9.30% | ||
| Whanganui | $509,007 | 1.10% | -8.80% | ||
| Rangitikei | $406,639 | -8.40% | -19.10% | ||
| Manawatu | $605,178 | -0.60% | -10.70% | ||
| Palmerston North | $636,050 | -2.70% | -13.80% | ||
| Tararua | $410,062 | -3.40% | -15.70% | ||
| Horowhenua | $560,428 | -4.00% | -15.10% | ||
| Kapiti Coast | $806,694 | -4.90% | -17.30% | ||
| Porirua | $800,062 | -3.00% | -18.30% | ||
| Upper Hutt | $718,298 | -5.30% | -19.50% | ||
| Lower Hutt | $777,646 | -1.00% | -17.40% | ||
| All of Wellington City | $1,019,455 | -1.60% | -17.90% | ||
| Wellington City - Central & South | $965,863 | -0.60% | -18.50% | ||
| Wellington City- East | $1,135,238 | -2.30% | -16.50% | ||
| Wellington City - North | $970,098 | -2.40% | -17.60% | ||
| Wellington City - West | $1,147,284 | -0.50% | -19.10% | ||
| Masterton | $571,000 | -1.10% | -17.40% | ||
| Carterton | $621,699 | -6.70% | -15.00% | ||
| South Wairarapa | $802,215 | -7.50% | -12.70% | ||
| Tasman | $786,368 | -4.60% | -10.00% | ||
| Nelson | $792,439 | -2.40% | -8.30% | ||
| Marlborough | $679,306 | -5.30% | -9.10% | ||
| Kaikoura | $640,928 | -0.20% | -2.40% | ||
| Buller | $326,624 | -2.30% | 10.80% | ||
| Grey | $358,425 | 0.90% | 4.60% | ||
| Westland | $392,589 | -0.80% | 2.50% | ||
| Hurunui | $618,860 | 3.10% | 7.60% | ||
| Waimakariri | $700,030 | -0.80% | 1.10% | ||
| All of Christchurch | $730,114 | -2.20% | -4.30% | ||
| Christchurch - Banks Peninsula | $776,940 | -5.50% | -5.30% | ||
| Christchurch - Central & North | $830,495 | -2.50% | -4.90% | ||
| Christchurch - East | $572,042 | -2.70% | -1.80% | ||
| Christchurch - Hills | $1,032,681 | -1.30% | -1.10% | ||
| Christchurch - Southwest | $690,375 | -1.60% | -6.50% | ||
| Selwyn | $812,953 | -1.80% | -6.80% | ||
| Ashburton | $536,684 | 1.50% | 1.90% | ||
| Timaru | $510,166 | -2.50% | 0.10% | ||
| MacKenzie | $665,168 | -7.60% | -4.10% | ||
| Waimate | $434,194 | 1.70% | 3.60% | ||
| Waitaki | $478,458 | -0.30% | -3.40% | ||
| Central Otago | $778,642 | 0.70% | -0.50% | ||
| Queenstown Lakes | $1,726,364 | 3.50% | 1.90% | ||
| All of Dunedin | $620,248 | -2.10% | -10.30% | ||
| Dunedin - Central & North | $627,862 | -3.00% | -10.40% | ||
| Dunedin - Peninsular & Coastal | $587,713 | -2.50% | -14.90% | ||
| Dunedin - South | $587,071 | -0.90% | -11.10% | ||
| Dunedin - Taieri | $654,853 | -2.10% | -8.60% | ||
| Clutha | $391,747 | -0.50% | -3.50% | ||
| Southland | $481,451 | -0.10% | -1.50% | ||
| Gore | $384,633 | -9.30% | -0.70% | ||
| Invercargill | $446,894 | -3.90% | -5.90% | ||
| Auckland Region | $1,304,213 | -2.30% | -11.50% | ||
| Wellington Region | $895,833 | -1.90% | -18.00% | ||
| Main Urban Areas | $1,023,123 | -2.40% | -11.40% | ||
| All of Aorearoa | $922,414 | -2.30% | -10.20% | ||
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223 Comments
Having just listened to a pro property Talkback station through the night you would think that the good ol days of 3% mortgages and 30% price gains PA are just around the corner. The spruikers are out in force with "Property price declines have definitely bottomed out" and "The RBNZ has stated that there will be no more rate hikes so this is definitely the bottom".
It makes me laugh that they say it like they are speaking for all of us and that all NZer's just want the property market to go back to how it was. What I don’t find amusing is the way in which so many are prepared to continue to throw others, including future generations, under the bus just so they can benefit.
All throughout human history, certain people have shown little hesitation in throwing others under the bus by profiting off others’ difficulties. I’ve read of accounts of famines for example, where opportunistic people have made fortunes speculating on the price of food rising when regulations or appropriate laws were not in place. It shows a rather hideous side of human nature really.
Much of our economic activity gets driven by regulation. It tells suppliers and producers were demand might be.
California power crises is a good modern example, given electricity is virtually a human right in most countries now.
It’s frankly disgusting .
One day someone needs to do a proper expose on it all, and the cynical role of the likes of NZ Herald on the whole thing
I would imagine that there would be no struggle in crowdfunding to get his done
I’ll contribute to the crowdfund
That’s scary, are you suggesting a NZME civil lawsuit - against their property propaganda channels - one roof, nzherald, TA etc etc.
Inability to show a statutory duty of care, inability to project a balanced view on property purchase risk, bad financial advice in a downturn etc etc.
Yep
Disclaimers are often used but I think the line is definitely pushed too far and a test case is probably needed to determine how much a disclosure can actually insulate the commentator from liabilities from bad financial advice.
If I said "Buy shares in xx company, it's guaranteed to double in value 2 years time" followed by a disclosure statement in small print that it's my opinion only and the reader should obtain independent financial advice etc and it's found out I own considerable shares in that company, I'd probably be up in front of the FMA in no time.
The issue for me is, regardless of disclaimers on individual pieces, the Herald has not been anywhere near balanced in the way it reports on housing. How often has there been skeptical article? I can’t recall a single one. Articles are almost completely dominated by authors with very pro-property positions. There might be the occasional article that is slightly bearish, but that’s as far as it goes.
"Buy shares in xx company, it's guaranteed to double in value 2 years time"
Isn't this basically Ashley Church for the NZ housing market with his double in 10 years nonsense he continues to spew? Even worse he claims past performance is absolutely an indicator of future performance.
It's not just the Granny Herald - it's endemic in MSM
Ashley Church March 2021:
But one property commentator is urging anyone thinking about taking the plunge to get in quick as he expects house prices in New Zealand to double between 2020 and around 2026 or 2027.
Ashley Church told 1 NEWS it would be "nonsense" if anyone had been advised to wait for a dip in prices.
"It's just the wrong thing to do," he said.
"The boom is here for a while."
https://www.1news.co.nz/2021/03/24/property-commentator-ashley-church-p…
He's on the telly, he must be an expert!
🎯🎯🎯🎯🎯🎯🎯🎯🎯🎯🎯🎯🎯🎯🎯
Expose of nz housing market...
Nearly everyday, here, we see so called experts, quoted in article's , contradict each other. Why?
"Everybody has a opinion and a paymaster "
" your data is traded every day by every corporate SLUT thanks to the WWW"
1. TA et al - says boom then bust monthly based on his baised data inputs and who is paying him.
2. ANZ/ banks - spin thier data points based on mortgages and fiscal data but never look at the simple supply demand model. Or what is happening in the streets of House sales land.
3. RB -. Have the most data to work with but are blinded by social guilt, courtesy of the government, ahead of fiscal care and responsibility. And that one tool!. What builder would go to work with just a skill saw!
4. REINZ - NEVER have a bad thing to say about their industries true market performance, just deception and lies. They have the data for every sale and use it to manipulate their customers And never share the full details with their real customers, " the home owners"
5. Homes.co and one roof - are controlled by the REAs and advertisers, who can manipulate the data and thus are influenced by dodgy dealings and a biased algorithm.
Q: how does the sale price ( your private info) get given( or sold) to homes/Trade me?, core logic, many other sites...??. Is it th REI, or the council, or trademe selling it. Whoever it is ...It's all " FUCKING DODGY!
"They are data farmers influencing the market with a manipulative algorithm " who audits the algorithm???
6. REAs - are in lala land profiting hugely from people's naivity ( why do people pay , marketing fee's that are used to market the agent?) They are continually being " wet bus ticket slapped " for hiding detail, wrong representation, selling to mates, etc and over hyping everything. Yet this private organizations poor record never see's any com com investigation.
##They are the controller of the info and data we see ( or dont see)in every type of media for every home the sell. They hide everything they see as negative( but we want to see) about every property and tell everybody the least they can about every property in order to protect their poor Systems and Processes and bottom line - S& Ps designed to mitigate any liability or social responsibilities that should hold them accountable.... but never does
7. Trade me - is the best holder of house sale info in NZ. It has every detail of every sale and withdrawal. Where does this info go and who is buying it?... yet they have zero opinion on the market. Why is that and who's arses are they protecting.
7.1- interest. Co. Example of inaccuracies..
They quoted above...
"The average value has now declined by $120,847 (-11.6%) since it peaked at $1,043,261 in March last year."
Yet.,,,
The peak was recorded as of November 21
8. The Gumment - BEHOLDER AND SLAVE TO THE BIG CORPORATE 3000+EMPLOYEE/ billionaire CLUB!. Yip you heard it here last!
Big organizations hold the Gumment to ransom with....
A.the Costant threat of Lay off's. Take the smelter. A big employer and international corporation and big polluter. Yet it can compromise the nations power supply and prices inorder to profit from and pollute NZ and for what . Cheap power! And 700 jobs.
B. Legal challenges. By he Billionaires club.and the trendy woke minorities
D. WWW dominance. Take Googles largest customer the NZ Government. Remember for every dollar Ardern spent on advertising , wuth a company she despised, she got in return data on very voter and what underpants they were wearing... her team of spin doctors loved that!
So the REINZ and REAs are spending big time in conjunction with TM etc and what do the get in return... Data Data Data... 'YOUR PERSONAL INFORMATION, YOUR PRIVACY, YOUR NEXT MOVE!
Your freedom to browse the web, at high data costs, is the reason your life is losing its freedom!.... and i haven't yet mentioned MSMs manipulative behaviour of the facts!
we are looking Guilty of taking the offer of free WWW and trusting it would keep us safe! And there is no way back to the true freedom we once had.
Now fuck off and check your bank account! And clear your cookies and data.
This is the last post from me. I'm grabbing my life back!
Bon voyage,
This is the last post from me. I'm grabbing my life back!
Looks very much like it wasn't your last post, you just wrote two more below!
Sudden realisation.... The tinfoil hats aren't to keep 5G out, its to keep this in!
🖕..
Just done it.... look above or below.
It's disgusting that the reserve bank with so much power over our property market has a goal of 'sustainable' property prices, fulling acknowledging to everyone this doesn't mean affordable prices that FHB can buy without wealthy parents.
So they are relaxing LVRs in order to sustain prices at unaffordable levels. And this is all ok with them and as a country we are accepting that this is ok, with many wanting to vote for the situation to get worse.
Vote for NACT if you want the RBNZ to 'stick to its knitting' and only focus on inflation. Labour gave them these extra goals.
Do you have any examples of people being thrown under buses?
Not saying that I agree with house values having bottomed out, but what's with "throwing people under the bus"? Do we no longer take responsibility for our own decisions? It seems when we make a decision, we're glad to reap the benefit if it turns out well, but we blame others if it turns out badly.
Their definition of throwing someone under a bus is someone taking a risk and purchasing a house and then renting it to someone who need accommodation. Why are these people here and not over at the NZ Socialist Party website?
Criticizing people here for wanting to make money is like handing out speeding tickets at they Indy 500!
Buying existing houses and renting them out isn’t supplying housing. Building new ones is. Rent-seeking behaviour is corrosive to the wider system and undermines the capitalistic system we live in.
If I bought all the the tickets to a concert and then started selling them on at a higher price would that be “providing” concert tickets?
And your delusional if you think people were buying houses to “provide” housing. They were in it for capital gains which is where the whole things become an unsustainable pyramid scheme. It used to be rental was purchased for a reliable and safe yield. But the fundamentals got thrown out the window and then we got to where we are now.
Yes we do need some rentals for those that chose to rent, but we don’t need that to be 50 percent of the market like it’s been trending towards. Society is better when people have buy in and stability. When they own their own homes so they have a stable place to live.
I never wrote they were doing it to "provide housing". They are doing it to build a portfolio, to create an income.
People want to rent and not buy.
They are doing it to build a portfolio, to create an income.
It wasn't about income in the later years, it was about untaxed capital gains. Yield was thrown out the window.
People want to rent and not buy.
Bullshit. Where did you scoop this nonsense from? Do you think everybody was jumping over themselves to pay ever increasing amount to purchase house because they wanted to rent? As long as renting remains such a shit option in New Zealand people are going to want to buy. Why would anyone want to pay off someone else's mortgage? Yeah in other countries people chose to rent but they have much more developed rental markets and stronger legal protections that make it a better option.
Our whole system in New Zealand is built on people owning their own homes. Us destroying this over the last few year is whats making New Zealand a worse place to live.
Even if houses were half the price they are now there would be a significant number of people renting.
Remember people don't own things, things own them. Many are very happy to rent.
Yep. Know a few people who didn't (or don't) want to own a house. They are a liability, not for everyone.
Even in our most optimal house buying conditions, ownership rates struggled to crack 70%
Yes, nobody wants liability.
The liability of buying a house is currently the highest it has ever been.
Therefore less people, through choice or not, buy a house.
How many are actually "very" happy to rent? It's hardly a choice. it's either rent or be homeless. The vast majority would likely prefer to own their own home and have the stability that comes from that rather than having to rent for their entire lives living at the whims of landlords.
Quite a few actually. I bought my first house at 37 years of age, until then I rented. In that time I moved multiple cities, and multiple countries. I rented in areas that I could never afford to buy in (like Herne Bay in Auckland) and was very happy. I earned a six figure income and my savings were invested in the share market, instead of paying off a home. When I eventually did purchase a house, I could afford to pay cash for it. Not everyone wants to live and die locked in the same suburb, same city, same country, for life.
Cool works for you. Try enjoy renting if you're a couple earning $50k per year each working in a factory in Auckland? When one wage barely covers the rent, and the other wage barely covers the petrol, groceries, power etc.
If it doesn't make any sense, why is anyone doing that to themselves?
With all due respect, 50k is garbage - you’d be struggling to buy in Aussie too.
Ummmm I doubt anyone enjoys their financial status earning barely over minimum wage in our most expensive city. Either they're pulling their hair out over the mortgage bill and potentially losing the house or they're paying half their wages in rent.
Neither outcome is a gr8 time and you're being utterly sensationalist.
It depends on situation and long term goals. If I end up single anytime soon I'd rather rent than own, I prefer the flexibility when i'm not otherwise tied to a particular location. And not having my capital tied up in a house would be great too, I have ideas i would be able to invest in.
Just like buying shares then
So buying shares are different. Imagine buying shares (becoming an owner) in Woolworths Aus that owns out Countdowns. Food is a basic right just like shelter. Is Countdown in to make a profit or do they just want to give all the food away for a just cause
The house price’s are tumbling down, if it was the Indy 500 the picture would like more like a stock car crash, over leveraged would now be driving with one wheel and very little petrol. No speeding tickets needed.
Basically every first home buyer. Every young kiwi wanting to start a family is confronted with two profoundly shit choices, spend a fortune on rent and have zero stability, or spend an even larger fortune purchasing a house that seems to get more expensive every single year.
You can go on about personal responsibility all you like but the fact is renting in this country is shit, your kids will never have stability compared to owning your own home, the only option then is to buy but that’s been co-opted by greedy dickheads who have pushed the price up well beyond what’s affordable or even sensible.
And yeah, they could wait sure. But people actually don’t have an infinite amount of time to wait. For women in particular you only have a short amount of time when you can have kids if that’s what you want. And even if they don’t want kids renting is still pretty awful, all people really want is a roof over their heads and it was becoming exponentially more difficult every year so you can see why people were getting stressed out and overpaying during the peak.
People seem to strip out the human context, life isn’t all numbers and statistics and it’s a pretty reasonable desire to own your own shelter.
Yes wise leadership wouldn't have allowed this outcome to happen. Those who have been cheerleading for it I find lacking in ethics and principles.
Their own financial gain is more important than the financial and social stability of the nation as a whole.
And that is silly because if the nation becomes financially and socially unstable, their own wealth will be under threat as capitalism doesn't work under those conditions - property rights then become violated and the laws ignored as there is zero trust in the system that governs the people.
"Every young kiwi wanting to start a family is confronted with two profoundly shit choices, spend a fortune on rent and have zero stability, or spend an even larger fortune purchasing a house that seems to get more expensive every single year."
There are the non financial benefits of owning vs renting. Each person has their own priorities.
Regardless of whether financial considerations were a priority, there are also financial consequences to that choice.
Here was a message from the RBNZ in February 2021 when house prices were rising
https://www.stuff.co.nz/national/politics/300238808/reserve-bank-govern…
Due to rapidly rising prices, this message may have been ignored by many owner occupier buyers.
For those owner occupier buyers who purchased in 2020-2021, one of the potential consequences is that they will be unable to meet higher debt service payments and will be unable hold on. Some of those buyers will be under cashflow pressure and may now be in negative equity. If they are forced to sell then they may have lost their entire equity deposit which may have taken many years to save (and may still owe the bank money if the owner is in negative equity).
That is a potential consequence of their choice to buy that may not have been considered at the time of their decision making in 2020 - 2021.
Unfortunately this will cause mental stress for borrowers and their families, and unfortunately a few individuals will resort to self harm.
Did the non financial benefits of buying outweigh these subsequent financial consequences and subsequent mental stress of buying?
Most people think that the choice under all conditions is between:
1) rent vs
2) buy their own house
However under conditions of high house price risks, and record low interest rates, the choice becomes:
1) rent (and preserve savings which could be used as a deposit to buy a house) vs
2) buy their own house (and risk losing their deposit, risk losing their own house, and still owe the lender money after the house is sold)
FYI, here is an example of owner occupier collateral damage from falling house prices elsewhere around the world:
People seem to strip out the human context, life isn’t all numbers and statistics and it’s a pretty reasonable desire to own your own shelter.
And this is exactly what "some" simply cannot get their heads around. They, through whatever means, have their own house or houses and now simply see them as a means of creating wealth. We have taken the home out of housing, homes are the foundations of strong families, houses are not, homes form healthy neighbourhoods, houses do not and homes encourage cohesive and functioning communities.....houses do not. Any of the previous mentioned points ring a bell as to some serious social issues NZ currently faces???
Could a person feeling pressured to buy a 'house' simply to "get on the ladder" be seen as being "thrown under the bus" in a falling market, probably not. Could a young couple starting a family and desperately wanting the own their own 'home' be seen a being "thrown under the bus" because they 'want' to hear that now is a good time to buy, I would argue yes.
Lol @ greedy dickheads. Don’t sound sour at all….
I have a few rentals and I know a few people that have alot. They all agree with me. Most tenants decide to move not the landlord making them move as good business is to keep a (Good tenant) and very rare like very rare do you find a tenant that will stay in a house for more than 4 yrs. In 30 plus yrs of renting out property I have only had one stay longer. All my rentals are 10 percent less than market rent just like the other landlords I know. If you have a good tenant paying the rent you want to keep them cause it take time and money to keep turning over tenants. But if you have a bad tenant then that's an entirely different kettle of fish and there are alot of those as well.
I think E46 explained things far more elegantly than I could.
I might add though that the metaphor of people ‘being thrown under the bus’ is that society as a whole has subscribed to boom/bust economics re housing and many are worse off for it.
This is due in part to poor policy decisions.
Shelter is a fundamental human need, like food and water. That we ‘sapiens’ allowed a speculative bubble to mess with that human need is disgraceful.
I can opt out of buying tulips, but it’s a touch trickier opting out of buying a house, or renting in a bubbly market if I wish to provide adequate living conditions for my family.
Yes what people miss is that if an individual made $1,000,000 from the housing market in recent years, and sold near the top, they have only done so by indebting other members of our society with $1,000,000 of mortgages. That is how house prices keep rising, by ensuring even more mortgage debt is created.
And now that rates a rising, those people with the $1,000,000 of mortgage are getting shafted. So one party has gained significantly at the expense of another part of society.
So our housing market has become a model of debt enslavement. And those encouraing ever higher house prices are encouraging ever more debt burden for other people - which is fine if interest rates were to fall forever - but they don't. Rising rates will seriously hurt those who were encouraged to take on excessive debt relative to their incomes - but those who gained from rising house prices couldn't give a damn about that. Their own financial wealth is/was more important that how their gain might hurt others within society.
The highest margins in every major supermarket are in the fresh fruits and veggie section.
And no, it is NOT because because the goods are perishable and often get wasted.
Do you have anything other than opinion about your "waste" assertion?
Can you be clear as to what you mean?
My brother and his young family are being forced to sell their home they bought in 2021. 3 young children now dont have a solid home. They are looking for a rental in a country that quite frankly preys on the weak and needy and is happy to rent them absolute garbage.
There you go.
Bernard on HDP show last night predicting 10-20% house price gains next year once nats win election and investors pile back into market. No mention that their interest costs have doubled and 20-30% equity lost.
I long ago tired of Bernard. He’s gone from one extreme to the other.
Same here.
I'm not sure if he's part of the vested interest brigade pretending not to be, or if he's just somehow become so deeply cynical of the political economy around housing, but it seems he went well and truly all in on the "the powers that be will not let house prices fall" angle.
And here he is, in August of 2022 when we were well into the housing crash, still suggesting people "do whatever it takes to get a deposit and the biggest possible mortgage your bank will let you have to get on the ladder so you too can get the leveraged and tax-free capital gains". The fact that he prefaced it by saying it's not financial advice doesn't make it any less irresponsible in my eyes.
https://www.interest.co.nz/property/117184/bernard-hickey-argues-fallin…
Advice just as bad as what he dished out back in the day when he said prices would crash
I think it's the latter - he was so scarred by the stupidity of the last few years that he can't imagine the property sector not being bailed out. I used to agree with him, but changing times call for a little mental flexibility :)
There's a generational issue, I think. It seems to me that many economists of his generation - who have worked entirely in a low-rate, politically stable environment - just don't believe that inflation really is really real, and won't just disappear. If you raise the prospect that even a weak government will have to let property burn to save the currency, urgently, they'll point to whatever stat indicates that inflation might be cooling off.
Hickey lost all credibility for me when he started claiming that the government had essentially - and I quote - "underwritten" the housing market, based entirely on Ardern's comment that Kiwi "expect" the price of their biggest asset to keep rising.
Then when it looked like house prices were starting to fall, he wrote a big sob piece on The Kaka about how the government needs to step up and do what they promised, i.e. bail out property owners.
The naivety of this position is astounding, especially from someone who claims to be an economist. But his extremely loose interpretation of what Ardern actually said about property is almost a perfect mirror of what the media - and probably Hickey too, I don't know, I haven't read him in a while - are now claiming the RBNZ said about the OCR.
Ardern described what Kiwi expect, not what the government was intending to do. The RBNZ projected that they won't need to raise the OCR any further in order to meet their mandates, not that they wouldn't do so if required. In both cases people have interpreted these things to mean that house prices can only go up from here, and I suspect in both cases they'll be wrong.
Ardern described what Kiwi expect, not what the government was intending to do.
Not sure I agree Chebs. I think Princess Xindy was using a shotgun approach with this statement - being everything to everybody. "You lot get to keep your bubble but the young people get to join the bubble at cheap prices".
I really do believe it was that naive.
That's one of the required skills for being a politician, I think: being vague enough that everyone is able to interpret your comments to mean whatever they want to hear.
100% Chebbs.
I listened to that press conference after I read Jennae's headline and Jacinda did not in any way signal that the government did not want house prices to fall or that they would stop them falling.
I rate Jannae but this was irresponsible reporting more in line with Herald and Oneroof.
"The spruikers are out in force with "Property price declines have definitely bottomed out" and "The RBNZ has stated that there will be no more rate hikes so this is definitely the bottom".
There will ALWAYS be someone telling people that now is the best time to buy.
Why?
Because these people need to earn income to put food on the table to feed their families, pay for the roof over their heads (either rent or mortgage). More property transaction volume and transaction values financially benefit the following groups of people:
1) real estate agents
2) mortgage brokers
3) property mentors
4) property developers
There are others.
Positive spin leads to increased confidence to persuade people to buy.
Always remember the vested financial self interests involved.
Yes but there was a conscious choice made at government, central bank and commercial bank level to support this. Right back to the John Keys “ good problem to have” comment then Jacinda Aderns declaration that house price won’t go down; then central banks worldwide encouraged asset bubbles with low interest rates for over the last ten years; then commercial banks - post GFC we had a good long term business relationship with our bank, looking at further borrowing, our bank (BNZ) told us that they were now narrowing their lending and putting a much bigger emphasis on residential property - so no to further borrowing for us. I think they thought the risk profile for housing was lower, wonder if they will live to regret all those eggs in a single basket.
Monetary policy is not the tool to address macro-prudential risks (monetary policy tools are tools to address the RBNZ's inflation and employment remit)
The extreme house price risks were preventable back in 2016 when the then Finance Minister did not give the RBNZ the tools they requested to address macroprudential risks.
RBNZ's DTI plans hit by Government changes | interest.co.nz
If a debt to income ratio of 5 was imposed back in 2017, then a significant amount of lending would not have been made (and house prices would have been less likely to have reached their record levels, buyers would not have paid record high prices financed with high levels of debt).
Based on RBNZ data, the lending commitments made by banks in 2021, that were on a debt to income of 5 or above were NZ$58.8bn (about 59% of total lending commitments made in 2021). For the period of 2019-2022, total loan commitments on a debt to income of 5 or above totalled NZ$99.8bn (about 32% of the total loan commitments for that period)
https://www.rbnz.govt.nz/.../residential-mortgage-lending...
The higher the debt to income ratio for a borrower, then the higher the probability of default.
Now how many of these borrowers will experience significant cashflow stress, or default?
For some mortgages, the banks will allow some mortgage modification (such as extension of loan maturity date, or allow the borrower to go on interest only)
For other mortgages, the banks may require the borrower to sell the property. This will a key factor in determining the magnitude of house price falls.
Remember, that unemployment is currently low. What will happen when unemployment rises? How many more borrowers will be under cashflow stress?
"I think they thought the risk profile for housing was lower"
Under BIS, Basel 3 rules, the capital required for a < 80% LVR (aka LTV) mortgage secured by a house is low relative to capital charges on other bank assets.
Refer 20.82 & 20.84
https://www.bis.org/basel_framework/chapter/CRE/20.htm
"Jacinda Aderns declaration that house price won’t go down;"
She said no thing
So why exactly were you listening to a pro property talkback station?
Keep it coming. Got to get prices back to sustainable levels, still way to high.
Still takes over 50% of income to service mortgage at 80% LVR.
Fingers crossed for another 20% lower at least.
Yeah dream on.
Anyone else see this chart?
https://www.macrobusiness.com.au/2023/05/new-zealand-leads-global-house…
Why is it that only others outside of NZ are writing stories about how we are leading the falls?
It's as if our whole economy is vested in housing and everyone is too scared to confront what's happening and use the C word.
Instead we're getting a greenshoots, market turning narrative... it's all absolute BS
We're no1, we're no1, oh wait....
No. 1 in terms of falls.
No.1 in disgrowth
Why is it that only others outside of NZ are writing stories about how we are leading the falls?
Maccy B is the opinion that the normies love to use for confirmation bias. They've long been calling for the Aussie bubble (housing, iron ore) in particular to burst, but it's never happened. It's been for lack of a better word 'resilient'. One has to think that when the lucky country's luck runs out, it's not going to be pretty. Certain parts of Aussie like south of Perth, there was a big hit when the mining capital infrastructure period ended. Forget the name of the place but it's become a bit of a meth-ravaged place with a strong biker gang presence; disgruntled ex-FIFOs; unused jetskis; domestic violence; and falling house prices.
Enter much of rural Australia
Still in free fall and the vested reaching for anything to arrest the fall. Bigger picture... Inflation still roaring, NZ doller weaker making imports more expensive, future tax payers relocating thir tax to Aussie.Will Nationals promise to reinstate tax rinsing save the speculative, or just drive future tax payers offshore...?
Rates higher for longer. Negative leverage is gonna be very rough for some.
I think National’s policies of propping up the housing ponzi puts off a lot more voters than we generally suspect… surely people nationwide are aware of the societal damage that our insane housing market has been causing?!
The "good" news is that neither National or anyone else are capable of propping the housing market up. The next lot of lambs to the slaughter will be those who jump into the market with both feet after the election, thinking that a change of government means we're back to property prices doubling every 10 years.
This is what irks me the most, people either know and deliberately spruik, or are too stupid to realise that the election isn’t going to change inflation. (Meaningfully)
And if rates are cut, it will be because something has gone seriously wrong at which point housing declines will be the least of our problems.
Dont you worry Sonny Jim, nATIonAL wIlL sAvE uS!
I think the realisation for many once proud property investors, is the fact they are now becoming the bag holders is too much to take, especially when the idea some saver / renter may buy up their properties at a loss.
100%. The balance of power is potentially shifting away from Investors and back to FHB. Investors were outbidding FHB, it's clear to see based on RBNZ C31 numbers over the last 8 years. And particularly in 2021.
But now as you say, the investors are becoming bag holders with rising interest rates and reducing deductibility. Cannot afford to hold the properties as rent is insufficient, and FHB cannot borrow enough to support last year's prices. Uh-oh spaghetti-oh.
In a falling market, investors (unless they are sitting on a pile of cash) aren't in a position to buy as they are losing equity - not gaining equity (to use as their next deposit).
Like proper F&^ked
That's what I thought, however, I have seen on social media where renters are complaining about how landlords have to put rents up due to the deductibility changes. They actually think national getting in will curb rental price hikes. Of course, this is spurred on by the vested but the propaganda seems to be working.
And the astonishing thing for me is that our houses in NZ have been over priced for many years, not just since the covid frenzy. For further perspective, talking to people who immigrated here, I find they often have a very low opinion of the quality of our houses too, with the word ‘cold’ often coming up. ‘Over priced pieces of excrement’ would be a nice way to summarise their opinion and I generally agree thanks to spending time overseas.
I really struggle to find reasons why prices will not continue to drop for a while yet, but am open to being corrected.
They're only overpriced because people have an expectation that anything manufactured should be costed as if it's being done by indentured 3rd world labour.
If a Kiwi made your T-shirt, it'd probably be over a hundred bucks. More if the material was made here also.
Are you saying that the price of NZ housing today is fair and correct according to our average incomes?
Or perhaps that housing would be more expensive if we manufactured more stuff ourselves?
Am just trying to understand what point you’re trying to make 👍.
Im saying house construction is one of the only large manufacturing sectors left in NZ, and the cost of a house is somewhat relative to what it costs to build one - and it costs more to build stuff in NZ than most of the places the rest of our stuff comes from. It doesn't have to be fair and correct, it is what it is.
Thanks Pa1nter, yes that’s definitely worth taking into account. Our building labour costs do seem over inflated however and a significant part of that has little to do with our isolation, don’t you reckon? I think there’s room for costs to drop in a more competitive market.
We also have a shed load more land per population than lots of other places. Land costs in our cities far outstrips construction costs. So how do you account for land not being overpriced?
You've just answered your own question; the land isn't overpriced, it's priced depending on how many people you have competing for it.
Lands cheap in NZ where people don't want to live. Most just happen to want to live in a few concentrated areas, so it's more expensive.
Let's take Epsom. Leafy suburb, good schools - so in theory, that's where young families should buy. Except, they're competing with the people that already live there, and others who are further along in life so have more wealth to outcompete them
" it's priced depending on how many people you have competing for it."
That is how market prices work. Remember that market conditions do change:
1) Lots of buyers competing - fear of missing out, sellers market conditions
2) Very few or no buyers competing - buyer's market conditions
We have a lot of land but much of it is mountainous, coastal or prone to Earthquakes.
So does Japan who fit 20x more people in per km2 and has lower land prices.
Tokyo land price per square metre: ~$5000 NZD
Auckland land price per square metre: ~$1200 NZD
They also had a massive property bubble explosion that never returned, whereas we're still in a continuous boom-bust of property prices. And they have a bit higher property rates/taxes compared to Auckland, and they have much more usable land within Tokyo per sqm because their zoning laws are far more free than ours (you can build a 3 storey on a tiny, odd-shaped bit of land next to a bridge in a commercial area, for example).
Australia also has "lots of land" and the USA and so on, but what matters is "land in a good location", not "piece of dirt". There are cheap pieces of dirt in Northland, but people want to live as close as possible to jobs, hospitals, ports, motorways, trains, buses, schools, and so on. This drives the price up.
Per person housed the Japan land price is much better at ~250NZD.
What is the Japan land price in a city of similar population to Auckland (rather than the Tokyo area pop of 38m)?
Are you going to keep shifting the goalposts?
Sendai, metropolitan population 1.6million people, average land price $1470 NZD per square metre
Auckland, metropolitan population 1.7 million people, average land price $1200 NZD per square metre
Per person housed price is better in Japan because of their liberal zoning laws. In fact, land prices per square metre will be higher because the economic rent able to be extracted from a square metre is higher (more renters per square metre = better ROI, so prices are higher).
Japan has lots of land, too, but no one wants to live in rural areas; people want to live in cities, which makes land in cities valuable. Increasing the amount of buildable land doesn't really help, because people still prefer to live in Remuera than Drury. You can't increase the amount of land in Remuera (although you can increase the amount of people housed there, through liberalising zoning laws). In fact, Remuera would *increase* in land value if you liberalised zoning laws there, because the returns on the land would increase.
Japan is in population decline. There are rural areas in Japan suffering severe depopulation. NZ is determined to rapidly increase population. Predicted to be +2% growth this year. Pump that bubble!
They might seem over inflated, but they are what they are.
Some of its because of our high labour costs, relative to other markets.
You will see some pricing fall back in some areas as new residential building slows, but usually if someone can't turn a profit building, they'll just do less building.
Yes they are where they are and can fall a lot more. Your point was that because Labour costs were high, basically house prices were high because Labour costs and materials can't fall (I disagree but for the sake of argument will agree on this point).
There is no constraint on land costs falling other than what people are willing to pay. Given people have only been able to pay increasing prices because they have had access to easy credit which is now being removed it stands to reason that prices will fall to match what people are able to pay.
That’s a fair point, but the main issue has been land prices, and that will be where the falls are coming from. Land was and has been dramatically overpriced compared to incomes.
The issue is both. Even if land were free, you're still up for half a million bucks to generate a basic dwelling there.
Those basic dwellings are selling for $1m+ in Auckland so land price can fall a long way.
May be in Auckland, but the regions have had extreme increases that don’t relate land prices. I am really surprised at the price allocated to land as on CVs compared to houses in Auckland, maybe because of development potential. Down here in Wairarapa houses are still highly priced but the land values are low as a proportion $300,000 to $400,000 on CVs for lifestyle properties ( that’s 2020 CVs … but prices are edging back there). Houses started to rise sharply as building prices rose, then I think building prices rose in response to house price increases - local builders spent much more time discussing with us what houses had sold for than how we could most efficiently build a house. It’s all a big stagnant stalemate here at present.
300K to 400K is super expensive for somewhere like Wairarapa
At the same time the quality of housing components has dropped through the floor. Polystyrene, glue, MFD.... Try building a house out of the quality components considered standard decades ago, like actual timber.
Ah yes, the good old days of a solid house built of Rimu, Matai, Kauri, all the good wood that is hard to come by these days comparitivly.
A lot of these quality houses were bulldozed into a heap and landfilled in Chch. The fact good building materials are hard to come by now, is the human proclivity to extract resources until they disappear. These days its enshrined/disguised by economic doctrine. Law of substitution, or something. Swapping once abundant beautiful sawn timber, for outgassing plastic and glue, from the disappearing fossil resource. But we are all better of in this brave new world of substitution, apparently.
A lot of these quality houses were bulldozed into a heap and landfilled in Chch
This genuinely saddens me. I grew up in a house built in the late 1800s and added to in 1915. The place was cold but the wood was incredible with open fireplaces in every room. I'm currently looking out for people doing reno's on old houses, or demolitions to see if there's any good wood to grab and keep for a project. You can't harvest Kauri anymore and Rimu is scarce as hell. It was part of the land, and we built it into part of our society, so it is a matter of respect to the land that we maximise its' use and it's beauty as much as possible. Imagine how much better any houses built in the last 20 years would look with Rimu window frames, doorway trimmings, skirtings etc. Adds character and makes the home part of the land instead of an eyesore so much.
Currently living in a 185sqm 1925 4 bedroom 2 bathroom villa. Rimu floors, skirting throughout, french doors between dining and lounge with ornate leadlight glass.
Place originally built with 3 fire places (lounge, dining and kitchen) but only the lounge remains in use. Spent a couple of weekends knocking out the remnants of the kitchen fireplace that had been converted into a fridge cavity. 150mm thick concrete fireplace capping with 16mm rebar all throughout. Also ripped up a layer of turquoise tiles to reveal a layer of beige patterned vinyl flooring which covered the original Rimu in the kitchen.
Magic, just magic. Who knows what stories the house could tell in that wood
Found part of an old cigarette packet in the roof space from that era. The concrete footings for the piles used old Oil Cans for the formwork, in very good condition.
Knocked down part of a wall for kitchen renos, you can tell the builder was having a bad day when there's a tonne of bent over tacks from trying to nail the scrim to the sarking.
Nonsense look at the house prices in the US not in a major city like new york they are far lower and Americans earn more. Hell I was in New York and in the suburbs the houses where the same cost as mine. To just paint a house its upwards of $10,000 1 story. This isn't paying slave labor its extortion. I have seen show where they where saying they paid 80,000 for a house, you would be lucky to get a driveway for that in NZ.
We build slow and bad, recently looked up how long it took to build the empire state building and it was 13 months, now with all our new modern technology, CAD tools and whatever Queensgate Lower Hutt has just recently just been rebuilt from the 2017 quake. It seemed to take longer than that to just demolish the old part. What the hell is wrong with us.
It's an obsession and a problem. I was reading yesterday's comments... the word envy was being thrown around. I personally hate that word and it's a disgusting thing to say when we have such pronounced inequality. We should be talking about the industry from an investment point of view rather than gloating about previous wealth accumulation. At the moment... investing in property is not for the faint hearted. Green shoots and big rises from here is just laughable to me... we don't have anything to underpin that. Sharon Zoller for one is disappointing on that point, I thought she had a better analytical brain.
The fact you just mentioned property investment is not for the faint of heart shows you where the green shoots are.
- people with the means invest in rocky times, make some coin
- everyone else wants to follow suit
She’s smart but not that smart, and still exhibits from time to time all the usual flaws of an economist.
Yes HM. She's mostly very good. I think she gets influenced by the banking echo chamber perhaps ?
More likely she gets reminded who pays her.
That was my thought too. She's smart enough to keep her job.
And here I am feeling for the small breweries with the incoming tax hike by govt:
https://www.stuff.co.nz/business/132192469/heres-why-your-beer-and-wine-will-soon-cost-more
As if they didn't have enough struggles with CO2 shortages and having to set the price of a pint higher and higher to make any profit and grow. It seems home brew shops will indeed be heaving this year.
Most consumers just move to a cheaper category, ie trade 8 Wired for Boundry Road etc....
I was reading yesterday's comments... the word envy was being thrown around.
The word "envy" gets thrown around because some people's mental capacity hasn't developed beyond playground logic.
Remember when you'd tell your mate how ugly his new jumper was, and the reply would inevitability come back "you're just jealous!". Same logic.
Yeah... nah, dude. That's an ugly-arse jumper.
3 hundy a day buys a lot of beer. Be very slow
Wait a week save 2331 Who is paying that in rent? if you have 200k deposit that provides another $21 in interest a day now 2482 saving a week hard to see green shoots as houses fall 10k a month - I think we need to see stabilisation before celebration What a time to be alive
Most people work 8 hours a day , the house is falling $41 an hour, 8 hours a day , after tax..... EVERY DAY ie not just Mon-Fri
Stand well back from this SHITESHOW
Put another way - your house is losing the equivalent amount of money you would make after tax if you earnt $170k/year.
$333/day * 7days/week * 52weeks/year = $121,212/year
$170,000 earns $121,160 after tax and ACC (excluding Kiwisaver and student loans)
The figures look better than I thought they would. People need to remember that just because something is going down it will continue going that way at the same rate. Same for going up. Prices will find their level according to the circumstances.
All of Auckland City only 0.10% down for the last three months. Auckland City Central only down 0.8. Rate of decline is slowing.
Prices held up by properties in the islands like Great Barrier. One property sold there in the week for over 1.5M when QV estimated it to be 600k, CV 700k. Didn't look to have had any major improvements. What's going on in the islands? Auckland's local Queenstown?
Waiheke is the Hamptons of Auckland....
Or Martha's Vineyard?
Man of War vineyard.....
They look better because:
1 Corelogic uses average house prices. It distorts the figures
2 Hardly any sales. Those buying are likely to be cashed up and less price sensitive.
3 The islands attract a certain type of buyer who is willing to pay premium for exclusivity
I've learnt a lot from this site, including how to spot a spruiker
Well, spruikers are right most of the time. Your next lesson?
Your wife talk you into buying a rental or something recently ZS?
Suddenly you've gone from doomer to spruiker.
I must follow a noble path.
Good for you ZS - I wish you well in your journey towards nobility.
He is doing Gods Work
How is observing that the rate of decline has fallen, spruiking?
Indeed, my first comment was just facts!
The figures show the decline is slowing in Auckland City.
After a 2.9% RECORD MoM fall last month........ like who expected worse
The observation is across weeks of comments, not a specific comment.
ZS has gone from the world is ending to everyone buy a house. Why would one be like that unless they have a split personality disorder?
And knowing he has a wife who has been nagging him to buy a rental, perhaps that is exactly what he has done and now is on a path to promote other people to buy (for his own financial gain), without looking at the greater macro economic data (which is still very bad).
I can't see where he told everyone to buy a house, can you point that out to me?
I can't see where he is telling people to be cautious about buying a house given the risks present with current global and national economic data - can you point that out to me?
(see I can play this game as well)
:-)
Right, so he is a spruiker because he isn't telling everyone to be cautious about buying a house. If someone doesn't preface every comment on this website with a warning not to buy a house, they are now a spruiker?
Hopefully you can see how stupid and inane this game is.
And anyone who does caution about the risks is a 'doom gloom merchant'.
I hope you also see how stupid and inane this game is.
Yes, I agree that it is stupid and inane to fill the comment section of these articles with name calling. So how about you give it a rest? It's tiresome wading through pages of pathetic "spruiker" and "dgm" nonsense.
Sure as long as your treatment on both sides is fair and equitable then great given you want to police this. I have no problem with that - but I have no evidence to suggest that this will be true.
The question would become, do you prefer comments that are bullish on property over those that are pessimistic on property, and thus we have uncovered an unconscious bias in your thinking/rationality?
Honest question.
I prefer comments that pertain to the topic of the article. I don't care if they are bullish or bearish on any market, but I do prefer comments that discuss the reasoning behind a position. I have learned from bulls on this website, having never owned property myself they can occasionally give insights I am ignorant to.
I also have no interest in policing anything, merely stating that you are polluting the discussion with your incessant name calling. I will probably just leave this website if the quality of discussion declines any further. As for fair and equitable, I note your friend HouseMouse commented elsewhere with a qualified "now is a good time to buy" which is surely more egregious spruiking than merely discussing the rate of price declines, and you haven't called him a spruiker once - so perhaps get your own fair and equitable house in order first before demanding others do so.
If your argument using this line of logic is that CWBC, TTP, HW2 and others have been equally balanced about discussing both sides of the argument, good for you. Oddly HM thinks later this year could be a good time to buy - to which I agree with him. So I'm bullish about property but just not yet.
I hope property bulls continue to make dialogue on here but if they only want to see one side of the picture and ignore the negative economic data, I will continue to identify the opposing risks. And if they attack this position with the 'Doom Gloom' line of argument, it is my responsibility to counter this position and I expect you will be equally harsh on those commentators as you have just been with me.
Ok this is where I come in - you are rivalling Printer8 in misrepresenting what I say. That’s really low mate. Is it intentional misrepresentation to troll me or are you illiterate?
I did NOT say now is a good time to buy. I said now could be a good time to buy but only on the basis of making low ball offers and getting them accepted.
Big difference.
Gee there’s some really disingenuous people who comment here.
HouseMouse commented elsewhere with a qualified "now is a good time to buy"
Do you understand what the word "qualified" means when used in this sentence, HouseMouse? You'd want to be pretty confident you did before you throw around words like illiterate.
And it’s ’egregious spruiking’
lol
Pull your head in
more egregious spruiking than
We can add comparatives to the list of things HouseMouse doesn't understand.
1 Corelogic uses average house prices. It distorts the figures
It really doesn't. RBNZ uses the CoreLogic HPI in their M10 series, you can go get it yourself. Compare that series with the QV HPI and the REINZ HPI and the curves are basically identical. You just need to offset the REINZ HPI by 2 - 3 months as their data is based on unconditional dates rather than settlement dates.
I said last night that medians might stabilise while the HPI keeps falling. The same can be said of averages as per medians.
There has been very low activity above 1.5mil when that market finds price discovery and starts transacting you are likely to see a another step down of 10% in averages. Its already happened but so few are willing to transact
The only thing holding prices that high is the hot air blown by the Spruikers.
The dollar is falling rapidly, the unemployment situation is questionable at best, construction is slowing right down, lending is tightening, people are paying down their debts asap and tangible inflation is going up fast.
IMO the consensus among the spruikers is to price properties obscenely high, well above what they sell for and expect a price discounted by ~15-20% yet to still get a price from late 2020.
The reality is, no one is going to sell their properties for less than the ridiculous prices they imagine without having their backs broken with impossible mortgages.
IMO the consensus among the spruikers is to price properties obscenely high, well above what they sell for and expect a price discounted by ~15-20% yet to still get a price from late 2020.
The reality is, no one is going to sell their properties for less than the ridiculous prices they imagine without having their backs broken with impossible mortgages.
Spot on!
Aside from those with impossible mortgages, I've encountered the following recently who are also eager to sell and will meet the market:
- mortgage-free but distressed vendors (cash-poor and asset rich, not uncommon);
- developers who hold completed products who are either wanting to get out of the market completely or need the capital for the next development which is already well underway.
Meanwhile, I personally know people who are holding on switching to interest-only repayments, extending their loan terms, and/or pausing their Kiwisaver contribution. While it makes sense to have some logic back into the housing market, having pockets of people (with numbers increasing for the foreseeable future) experience financial distress should also be a concern for all of us - if only there was more foresight.
I think interest only is only a temporary solution by the lender for a period (e.g 12 months) to buy some time. Can anyone confirm?
What happens after the interest only period expires and the borrower is still under cashflow stress?
Unsure as per the term they can be IO. I believe it’s maximum of x years over the entire term.
As for cashflow after interest only, the term does not pause, only principal payments. So when the interest only period ends, they have the same principal to pay over a shortened term and thus payments must increase.
I know a couple who have listed their property for over double what they paid for it in 2019. Not because they think it's worth that (they think it's only worth maybe another 200k), but because they're hoping someone will make a 'discounted' offer that will still allow them to pay off the mortgage and buy another property elsewhere for cash. They're also not entertaining any conditional offers - cash buyers only need to apply.
Just pure greed.
Vendor's can choose to list their property at any price they choose.
Whether anyone will choose to buy at a discount to that price is a different question.
The vendor may find that they don’t get any interested potential buyers at their price point as potential buyers can see that they can get more for the same price elsewhere in the property market.
If there is no interest by potential buyers after a long period of time, then the vendor has 2 options:
1) take the property off the market
2) lower their expectations of sale price
Many are in the same situation trying it on. I bet they'll still somehow be surprised when the only offers they get are below what they paid in 2019
It's a great time to buy, there's lot of pain out there and it's likely to get worse. Property prices must be getting very close to the bottom.
Wingman, how do you reconcile "there's a lot of pain out there and it's likely to get worse " with its a great time to buy and we are near the bottom?
Obviously you don't buy at the top as many are currently finding out and having to sell. The bottom must be close and that's time to scout around.
No one knows where the exact bottom will be, but it must be near.
Why must the bottom be close?
I thought this in the USA when their property bubble burst, and every time I thought it was close to the bottom it continued to drop.
Yield curves are still inverted so are signaling that our financial future is going to be worse than the recent past. The price drops we have had so far have been quite orderly and what might come next could be quite disorderly as we enter recession and debt defaults begin/companies fold, people lose jobs etc.
It’s potentially a good time to buy, for sure, as I have said many times. But only on the basis of low ball offers.
So understanding the psychology of markets and people's loss aversion heuristics, they will read you comment and not buy - they will wait.
Their thinking will be 'if it is going to get worse, why would I buy now if there will be more distressed sellers in the future so I should be able to buy a house even cheaper'.
Because no one knows 'exactly' where the bottom will be, except in retrospect. But it's close.
There is a possibility it is close. Not 'it is close'. For you to say with 100% certainty I know that you are making this up (probably for personal financial vested interest) because nobody can predict the future with 100% certainty.
There is also possibility that it isn't close at all.
I wouldn't risk a deposit on it yet. But I perhaps would later this year or early 2024 depending upon how the next 6 months play out as economies likely (but not certainly) fall into recession.
First, 'close' needs to be defined. Is it 6 months? A year? More (can't be defined as close, right)?
Then, I don't see how we could be close to the bottom by using simple mathematics: at current rates people can only borrow ~40% less than 2 years ago. Sure some has been compensated by wage growth but still far from covering the gap.
To me the bottom will be when the average price equals what buyers can borrow on average.
"It's close" - interest rates say otherwise. 2.5% to 6.5% is a 38% reduction in affordability, over 30 years. Prices haven't fallen 38% yet, so there's more to come.
Prices don't need to fall 38% because incomes are also up strongly over that time. But you already knew that.
Yep it's close alright. Close to falling off a cliff.
It is a great time to meet the market....which is lower.
I know of only three 'great times to buy':
1. When the rental yield after all taxation and expenses and inflation is greater than my target ROI.
2. When the interest on my mortgage payments are about what I'd pay in rent (with some adjustments because this is a complicated one)
3. When I can enhance the value of a property to achieve either 1 above or on-sell, less a risk premium, to achieve my target ROI
To be frank ... there's precious little around that meets any of the above. Ergo - I don't consider it a good time to buy at all.
When you say: "Property prices must be getting very close to the bottom" - I'm reminded that most residential property crashes last for years and there's no sudden and/or large rise when they end.
Core logic data is pretty laggy and non stratified. The REINZ data shows Auckland down 22.9% and NZ as a whole 17% from peak in the April report. Whenever the bottom does come Core Logic will be showing declines for another 2-3 months.
Globally yield curves are indicating that a recession is coming. US money supply has contracted for the first time since the great recession.
I think it could be very wise to wait until we come out the other side of whatever is coming recession wise, before you get too bullish on property prices. But once we are on the other side of that, then yeah I think property will be a good buying option for FHBs.
Yield curves are the mosts inverted they have been in 40 years and it has been nearly 100 years since money supply contracted in the US (as the global reserve currency) so whatever comes next may not just be your normal business cycle and risks being a very bad time to have a large amount of debt relative to your income.
Risk = high in my opinion for the next 6 - 12 months.
I've just purchased a property, I shaved 20% off the asking price. That's good enough for me. On the other side of the election, it could be completely different.
"I've just purchased a property"
So yes of course now the bottom is close because you just purchased. But no bias or vested interest in your opinion in what could happen next of course based upon the global marcoeconomic data we have.
Bit like HW2 on here spruiking the last couple of years because his children purchased properties near the top in 2021. All of his bullish property remarks were to try and prevent price falls in order to protect his childrens financial position (while ignoring all of the economic data that opposed this position). And yet they could be in negative equity now - just as people who buy with 10% deposits could be in 12 months time.
You could be right that this is the bottom - but your cheerleading of it is probably primarily based upon your desire for it to be so because you just purchased, and not because the economic data suggests that it could be (see global yield curves and try discounting the future cash flows on an investment property as present and see what the numbers suggest).
I don't rely on the 'experts', they're invariably wrong. My own instinct will do.
by wingman | 1st Jun 23, 11:29am 1685575778
I don't rely on the 'experts', they're invariably wrong. My own instinct will do.
Ok so you're winging it, and I'm basing my views on global economic data and historical trends based upon that data (yield curves, money supply, debt to income, recession risk, discounting future cash flows).
But your view is definitely right because it is based upon instinct that is vested in your own financial interest.
"I've just purchased a property"
The only people I know who are currently bullish on property are the people who have just purchased (what a surprise!). This is how a ponzi works. You buy into it, and then promote it to other people so that you can make money.
So the views are based upon vested financial interest, and not on economic data or trends.
'House prices have bottomed because I've just purchased - but ignore the yield curves and contracting money supply in the US and the inflation data, and the higher interest rates, and our nations account deficit etc'.
You watch the yield curves and and contracting money supply. One of my neighbours is a banker and his specialty is dealing with defaulting mortgages. A very interesting guy to discuss property with.
As I said before, the bottom will only be apparent in retrospect.
"One of my neighbours is a banker and his specialty is dealing with defaulting mortgages. A very interesting guy to discuss property with"
Yes and a used car salesman will also tell you about all of the benefits of the cars in his lot but very few of the problems and faults.
Be careful with bankers wingman. They are never going to openly disagree with the company party line (which is to extend as much mortgage debt as possible).
I cannot believe he said “the bottom is close” with a swift follow up stating he’d just bought a property.
That’s one of the best own goals I’ve ever witnessed in these threads 😂
Then he would be telling you that delinquencies are rising (core logic also reports this), forced sales are generally lagged by 6-12 months from first missed payment.
Lol ... "the bottom will only be apparent in retrospect".
truism:
- a statement that is obviously true and says nothing new or interesting.
- a proposition that states nothing beyond what is implied by any of its terms.
Calling property a 'Ponzi scheme' is stretching it a bit. A Ponzi scheme is where prices go up and suckers keep buying in, but property has been declining. Property isn't a non-existent enterprise, and the land I have purchased is close to a township very close to Auckland where a huge retirement village has been approved. Should be a winner, I'll be surprised if it isn't.
Worth a punt.
Property is not a ponzi but the prices paid were as you note even a tulip has a fair price
"Worth a punt"
Ok not a ponzi but just gambling with leveraged debt. Not sure if either is better than the other.
I'm not gambling with leveraged debt, I'll be paying cash for it. There's also a huge number of houses planned for the area. It's gonna be a winner.
Well done paying cash!
You have turned your cash into an asset (land/property) and its price is determined by the amount of leveraged debt there is in the system (whole market).
So you may claim you are not playing with leveraged debt by paying cash - but that is what our housing market is. You have swapped cash for an asset that is valued based upon the quantity of levergaged debt in the market.
If that reduces you lose money. So you have taken a punt by changing from cash to a debt based leveraged asset.
I've purchased an asset that everyone needs, a piece of land, whether owned, leased or rented. The development that will occur nearby makes it a bet worth taking. I'm not in the habit of analysing things to the nth degree. Right next door to the most expensive real estate in Auckland. Coatesville.
I'm not sure Riverhead is a great investment location at all, commuter traffic is a nightmare at the best of times. And no real sign of how that gets fixed. Great place for retirement villages. Good luck though.
Road widening is already in the pipeline for Riverhead. Is there any place in Auckland where the traffic isn't a nightmare? There's lots more housing development to happen in Riverhead, a conglomerate involving Fletchers.
There are places in Auckland where you can avoid traffic because you can use public transport or walk and cycle.
More road widening will make the traffic worse not better.
Who wants to walk, cycle, use public transport or live in the city with all its crime and homeless? Riverhead has quick access to SH16 North,the North Shore or the ferry to Auck city at Hobsonville.
Most places don’t regularly take up to an hour and half to commute to and from the city, with limited public transport. We’re starting to see a push back on wfh, but it’s a lovely area if you don’t need to commute.
"Most places don't take an hour and a half to commute?"
Tell that to South Aucklanders and those going over the Harbour Bridge.
riverhead will probably pay off for you
I'd say there's a pretty good chance, since it's right next door to what's become the most expensive residential real estate in NZ. Independent Observer will still be working on his mathematical formulae and probabilities when this is complete.........
https://www.nzherald.co.nz/business/nzs-biggest-builder-wins-consent-to…
Don't worry about Independent Observer, it's very sad how he has to tear down other people who have the courage to do something in their life. He actually doesn't do it on purpose, (he's probably not even aware of it). He truly thinks he is "neutral" (aka his moniker) and he believes he is equal to god to judge everyone else, and tell them what they're doing right or wrong!
If you're using cash then what is the opportunity cost?
https://en.wikipedia.org/wiki/Opportunity_cost
One opportunity - an extremely safe and conservative one - would be to put the money into a high interest account and wait for the bottom.
High interest means high risk. Ask those that got wiped out in the GFC.
1st ppty? How?
Or you buy into it as a family home with no desire to purchase further properties, live in it for many many years raising children (or not), making memories and maybe you get your money back, maybe you don't. You may not get capital gains, or by then you may be taxed to hell on it, but you still buy back into the same market you sell into most of the time, and life goes on day by day, sunrise to sunset until the day you kick the bucket and think back on all the ways you gave back to society through your time, your job (hopefully), your children, and leave this plane of existence for one where you see your family once again and laugh about how silly humans are about accumulating wealth and selling houses to each other.
Well just about to offer on a property -- and hopefully get it -- but not bullish at all -- feel the market has a way to drop yet -- but its ideal size location potential meets my needs - - can afford the repayments with ease and not a lot of remotely comparable options - so will low ball a little but secure regardless -
Sadly though you are right far too many commentators here -- and in the media are vested interest only -- Granny Herald being the worst of all -
Good luck :-)
Yawn ....
In normal times - prices decline a little or flatline over winter. *This isn't normal times - we're witnessing a major market correction event.
Someone wake me up when it's springtime.
Ain't nada goin' to change until then.
This made me laugh out loud ...
https://news.realestate.co.nz/blog/new-zealand-property-market-may-2023
Near the top there's a graph of National House prices and someone drew a trend line in grey.
Classic con job. They'd never do that for Auckland as house prices flatlined between 2016 and 2020 all thanks to Auckland's new Unitary plan that allowed much higher densities per sqm.
Don't believe me? Use this charting tool from interest.co.nz ... (To find again: Menu at top, Charts, Real Estate, REINZ median price)
https://www.interest.co.nz/charts/real-estate/median-price-reinz
3 bed townhouses are being sold in Auckland with little more 100sqm of land and some are even less. The MDRS may have an uncertain future but Auckland's 2016 Unitary Plan will just keep on giving.
So just to put the REINZ's con job into perspective ... the flatline between 2016 and 2020 has a price about $850k. Auckland's current is about $1.25m.
So in Auckland we need to fall another $400k to get back to pre-covid.
Probably won't be $400k due to inflation ... Maybe $300k or maybe $250k ... But this doesn't detract from the fact that buying now would seem to be huge risk.
I also note that they didn't put a trend line on the OCR data in the chart.
Or add something like the US 10 year treasury yield and show how at the macroeconomic level, the whole world just shifted out of a 40 year trend of falling interest rates - that has been very beneficial to asset prices (future discounted cash flows).
Is that 40 year trend broken? Doesn't look like it to me. Looks more like a bump along the way ... And far too early to call a reversal.
Even going flat is going to be a problem for asset prices from here. For asset prices to go up, discount rates for those associated cash flows must keep reducing (e.g. how we've had 40 year bull markets in bonds and property...and shares...).
Interesting is that yield is now 2x what it was in 2012 and 7x what it was 3 years ago.
To me, I think we are now moving into a period that is similar from the 1940's to the 1980s where rates are flat or climbing but of course there will be ups and downs along the way.
Are we going back to 0% rates - I don't think so now that the inflation genie is out of the bottle.
Using asking price as an indicator is misleading. At the moment a widening gap between asking price and actual selling price.
🎯🎯🎯🎯🎯🎯🎯🎯🎯🎯🎯🎯🎯🎯🎯
Expose of nz housing market...
Nearly everyday, here, we see so called experts, quoted in article's , contradict each other. Why?
"Everybody has a opinion and a paymaster "
" your data is traded every day by every corporate SLUT thanks to the WWW"
1. TA et al - says boom then bust monthly based on his baised data inputs and who is paying him.
2. ANZ/ banks - spin thier data points based on mortgages and fiscal data but never look at the simple supply demand model. Or what is happening in the streets of House sales land.
3. RB -. Have the most data to work with but are blinded by social guilt, courtesy of the government, ahead of fiscal care and responsibility. And that one tool!. What builder would go to work with just a skill saw!
4. REINZ - NEVER have a bad thing to say about their industries true market performance, just deception and lies. They have the data for every sale and use it to manipulate their customers And never share the full details with their real customers, " the home owners"
5. Homes.co and one roof - are controlled by the REAs and advertisers, who can manipulate the data and thus are influenced by dodgy dealings and a biased algorithm.
Q: how does the sale price ( your private info) get given( or sold) to homes/Trade me?, core logic, many other sites...??. Is it th REI, or the council, or trademe selling it. Whoever it is ...It's all " FUCKING DODGY!
"They are data farmers influencing the market with a manipulative algorithm " who audits the algorithm???
6. REAs - are in lala land profiting hugely from people's naivity ( why do people pay , marketing fee's that are used to market the agent?) They are continually being " wet bus ticket slapped " for hiding detail, wrong representation, selling to mates, etc and over hyping everything. Yet this private organizations poor record never see's any com com investigation.
##They are the controller of the info and data we see ( or dont see)in every type of media for every home the sell. They hide everything they see as negative( but we want to see) about every property and tell everybody the least they can about every property in order to protect their poor Systems and Processes and bottom line - S& Ps designed to mitigate any liability or social responsibilities that should hold them accountable.... but never does
7. Trade me - is the best holder of house sale info in NZ. It has every detail of every sale and withdrawal. Where does this info go and who is buying it?... yet they have zero opinion on the market. Why is that and who's arses are they protecting.
7.1- interest. Co. Example of inaccuracies..
They quoted above...
"The average value has now declined by $120,847 (-11.6%) since it peaked at $1,043,261 in March last year."
Yet.,,,
The peak was recorded as of November 21
8. The Gumment - BEHOLDER AND SLAVE TO THE BIG CORPORATE 3000+EMPLOYEE/ billionaire CLUB!. Yip you heard it here last!
Big organizations hold the Gumment to ransom with....
A.the Costant threat of Lay off's. Take the smelter. A big employer and international corporation and big polluter. Yet it can compromise the nations power supply and prices inorder to profit from and pollute NZ and for what . Cheap power! And 700 jobs.
B. Legal challenges. By he Billionaires club.and the trendy woke minorities
D. WWW dominance. Take Googles largest customer the NZ Government. Remember for every dollar Ardern spent on advertising , wuth a company she despised, she got in return data on very voter and what underpants they were wearing... her team of spin doctors loved that!
So the REINZ and REAs are spending big time in conjunction with TM etc and what do the get in return... Data Data Data... 'YOUR PERSONAL INFORMATION, YOUR PRIVACY, YOUR NEXT MOVE!
Your freedom to browse the web, at high data costs, is the reason your life is losing its freedom!.... and i haven't yet mentioned MSMs manipulative behaviour of the facts!
we are looking Guilty of taking the offer of free WWW and trusting it would keep us safe! And there is no way back to the true freedom we once had.
Now fuck off and check your bank account! And clear your cookies and data.
This is the last post from me. I'm grabbing my life back!
Bon voyage,
Just the usual rants on here I see. All good news for home owners really, valuations now below the RV so I guess when these get revised next its a rates drop for everyone right ?
Thats not how rates work. If I am assuming correctly, how it works is that council sets a budget, and then that budget funded by dividing the cost between different households depending on their respective RV value's.
In cases where property values have fluctuated, some areas may experience a relative decrease in property values compared to other parts of the region. As a result, households in these areas may see a reduction in their rates. Conversely, areas where property values have increased more significantly may see higher rates for households.
Correct. as seen by the story concerning the 8% rates rise in Christchurch. While no property has seen a reduction, since the rates now include a number of new items, the properties in the east especially have seen their rates rise the most, as their proportion by RV of the overall cost has increased.
So why exactly were you listening to a pro property talkback station??
Comedy value?
Hmm. Down 4.9% for the year. Still up 21% since I bought January 2021. Yeah. Not worried at all. Not even close to 80% LVR, let alone negative equity.
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