Hopes the housing market would recover strongly this summer are starting to look shaky with the number of sales declining in October and the median price not budging from the previous month.
The Real Estate Institute of New Zealand (REINZ) recorded 5619 residential sales in October, down from 5762 (-2.5%) in September.
In Auckland, the country's largest housing market by far, October's sales were down 2.9% compared to September. In the rest of country excluding Auckland sales fell 2.2% for the month.
The dip in sales in October will be particularly concerning for those who had been hoping to see the so-called green shoots of recovery in October because the number of new listings received by REINZ members in October was up 22% compared to September. And the total number of properties available for sale increased by 9% between September and October.
Although October's sales were down compared to September, they were up 8.0% compared to October last year. However, they remained down 24.9% compared to October 2021 and down 38.8% compared to October 2020.
So while sales numbers may have lifted from the bottom, it was not by much.
The REINZ's national median sales price was $795,000 in October, unchanged from September and down 2.8% compared to October last year.
The REINZ House Price Index, which adjusts for changes in the mix of properties sold each month, was up 1.1% in October compared to September, but remained down by 2.5% compared to October last year when the market was at the bottom of the slump.
However REINZ Chief Executive Jen Baird believes the market is steadily improving.
"The increasing number of listings coming to market is showing a slow but marked improvement to the past year and a renewed confidence from vendors looking to sell with more certainty now the election is behind us," she said.
"While details of the new government are still being discussed amongst coalition partners, many vendors and buyers are showing confidence that it's a better time to sell now and a good time to buy."
"The signs are there for an improving market," Baird said.
The comment stream on this story is now closed.
Volumes sold - REINZ
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Median price - REINZ
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159 Comments
Can anyone explain the discrepancy between REINZ data and QV's? QV said two days ago median house price had risen 2.1% over the last three months. Who's correct?
.
Hi Baptist
The REINZ and QV measure different things.
QV measures average dwelling values, not selling prices. That's the average value of all the homes in NZ, not just the ones that have been sold. So it's a valuation tool. But its valuations are based on price data from properties that have been sold over the previous three months, which makes it a lagging indicator.
The REINZ records the prices of homes that have been sold unconditionally each month, and produces a median price from those sales. Because it is a monthly indicator and its prices are recorded when a sale become unconditional but has not necessarily settled, it is a leading indicator.
Hope this helps
Greg
Thats really helpful, thanks Greg.
Thanks Greg
You can't compare raw median price data with an index.
I use an index every time.
Use reinz HPI it's what the rbnz use and what should be reported here
You want to compare QV index with reinz Hpi (house price index).
Medians are poor as change in mix sold not taken into account.
You'll find the HPI date from Reinz in agreement with QV index data - most prices increasing in most regions 1-2$ a month and have been for last quarter
It does, Greg; appreciate you chipping in in the comments!
What could also help would be an article explaining all the market indices. Pretty sure there's QV, CoreLogic, REINZ, realestate.co.nz, TradeMe that you're tracking. And some are median, some are average, some are a proprietary algorithm weighing in the different dwelling mixes, some are asking prices. Some are last month, some last quarter, some 1 quarter ago
What would really help would be an article with a table disambiguating all that, stating who publishes what data and during which time window was it collected. Then link that article at the bottom of each monthly update article, like you do with the auctions page on Saturdays
Several things:
- QV is a trailing indicator - for a start it's measuring the last 3 months of change (not just the last month), and secondly it takes more time for sales to filter through in to the values. REINZ is strictly houses sold in the last month
- QV is, as far as I'm aware, using the mean, not the median (so prices rising for very expensive houses could skew the data upwards)
- They measure different things. QV is measuring the value of all houses, REINZ only measures the value of houses sold - these can be quite different, because houses sold in the last month are not necessarily a representative sample (e.g. more houses at the cheaper end could be selling at the moment for whatever reason, while expensive houses are shifting hands less often)
- QV will be using some sort of algorithms to determine their value (to apply it to houses which haven't been sold) rather than actual sales values like REINZ - this doesn't mean QV's methodology is invalid by any means, it's just measuring something different.
Just use reinz hpi and ignore the rest esp raw median changes they can go up or down heaps depending on mix that happened to sell that month
REINZ - non profit organisation, a code of practice for members. Similar to engineering NZ or NZNO
QV - "Our culture is driven by our customers"
REINZ could best be described as a trade association for the real estate industry.
QV is a State Owned Enterprise.
Based on REINZ HPI, prices are up 2.8% over the last 3 months, using median price it's 3.2%, neither are that different to QV, especially given how/what they measure are not the same.
QV's number is more accurate in my experience. and more up-to-date in terms of valuation than sites like Homes.co.nz. Homes.co.nz data is months behind market rates.
Market going no where fast with interest rates at 7.5% the banks controlling the Ponzi.
With WT pouring water on National Ponzi restart plan looking all good for the future.
A Ponzi is something you wake up to in the morning and you find its all gone. Typically you find your house is still here and if its mortgage free its just another day in paradise.
If you're not leveraged (ie no mortgage) you were missing out on the Ponzi.
That's just being near the top of the Ponzi..
Another definition for a Ponzi is when the people at the top make all the money.
Hello NZ, ANZ 2.5b Profit,BNZ 1.5b Profit,Westpac ?,BNZ ?
Come on guys smell the roses.
All you need is one of the cartel to go broke and its all gone it's happened before.
There's only one definition for a ponzi and you don't seem to grasp it.
Thank goodness there's some less than positive housing news. I was beginning to worry a dgm might drown some kittens in a sack otherwise.
Deep down in your heart you're cursing that it wasn't better news on the price..
Don't bang you're head too much
Couldn't really care less mate, it's not me on a permanent doom loop waiting for people to lose their shirts.
...and its not him who repeatedly alludes to the drowning of kittens on a housing related forum. Are you mentally healthy?
Haven't met a mentally healthy person yet.
Sorry to hear......
Normal is just and average, and everyone's got a bit of something.
Some way more than others though.
Unfortunately a few people will need to lose their shirts so we can cloth our kids adequately.
Not sure it's going to happen though.
The kids will wear the lost shirts?
Anytime people with assets have a hard time, people without assets have a worse time.
How so? A reset of asset prices would be worth some short term pain.
And yes, if we expect house price increases of 7%PA ad infinitum we are actively heading toward a situation where all the stock is owned by a wealthy elite. If we are ever to revert back to a situation where the average kiwi family can work hard and own the roof over their heads, there will be some casualties.
Because asset prices are usually tied into the overall health of an economies' performance. They'll fall, if the economy is, so most will be no better off. And when they economy picks up, asset prices will follow.
As it is, even though there's been some price retreating, affordability has also worsened for people, not improved. If we get a big fall in 2024, it'll coincide with lost jobs and reduced incomes.
Thinking there will be a house price crash where the average Joe comes out unharmed, or better off, is extremely wishful.
Nah, asset prices are no longer tied to the real economy and haven't been for a while. They've just become a product of the financial system. Why do you think central banks need to keep pumping liquidity in? It's all become an emotive and psychological FUBAR.
A "healthy" economy would continue to run because the real assets are the people and infrastructure that continue to exist no matter whether the numbers expand or contract on a billboard or computer screen. The fact that it doesn't just highlights major flaws that nobody wants to acknowledge. Instead we just keep doing the same thing over and over again expecting a different result, screaming this is the only way we know how, which is the same as saying we don't want to know better.
All I'm really doing is talking to the conditions we live under, and observing trends that happen. I can't think of a region where house prices have plummeted, stayed low, and the people in those areas are materially or psychologically better off - the inverse is true.
There's certainly ways to do life better that downplays capitalism. How you instigate that society wide though, in conjunction with what is already here, is another thing entirely. It won't come about just by a bit of natural encouragement.
I think the difference here in NZ is the single minded obsession with property investment and the cult like belief property is a no-lose bet. In order to break that mindset something major has to happen.
If a proper generational crash happens peoples behaviors will change and whilst my life may be worse, things may be slightly more equitable in the future. The alternative is a South Auckland townhouse selling for $4mil when the kids are my age..
Spot on Harlow. That’s the point that so many can’t (or won’t) grasp. Seems to be a mentality that as long as my house is increasing in value I’m getting richer, and screw anyone else. But they’re not really getting richer because they’ve still got the same house, and others have gone up too so no relative change apart from society becoming more polarised. The only ones actually making money out of rising market are the real estate agents and shareholders of Australian banks, neither of whom should be our major concern. Strangely, most articles appearing in media - including this one - source most of their information from real estate agents and economists at Australian owned banks……
If you couldn't really care less, have no vested interest, why make inane comments that add nothing to the conversation and keep it at the childish level. It's hard enough having adult conversations here, why be one of those guys?
Quality post as always. Debt Gathering Middlemen will be sad that the stats don't backup their dreams of prices exploding to the moon. The weight of debt is real, lets remember this is supposed to be the explosive part of the year with the spring rush.
Good on you Averageman, for realising that Pa1nter often has quality posts!
Yes - at times they match the quality of yours.......
I don't know why you all have to attack each other haha.
I enjoy and get something out of reading all your posts.
I find myself far more closely aligned with RP on most issues, but Yvil, painter and others still make intersting and insightful comments even if I strongly disagree with it...
See, I knew you could put a negative spin on things if you tried hard enough!
Every cloud has a dark grey lining.
Good point, Pa1inter.
Further, Retired-Poppy and other DGM should note that the journey to hell seldom goes in a straight line.
TTP
Speaking of hell, I'm sure price fixing is a sin TTP........isn't it?
https://comcom.govt.nz/news-and-media/media-releases/2017/property-brok…
TTP again speaks with forked tongue and with "conviction"
Glad you are aware of that and hope you are prepared too..there are some good quality helmets out there
Auckland median up 1.7% in a month -
Tauranga up 2.7%
The boom has begun.
If the national median sales price was flat, what regions went down to offset the rises in Auckland and Tauranga?
You can get the sales volumes and median prices for all regions from the interactive charts below the story.
Probably more of a mini boom to be honest, but chances are the falls are all over. You can try and argue the gains in real terms crap but prices don't need to shift much in percentage terms before the house is earning more than you are.
A very modest strengthening in the market.
According to One Roof FHBs are rushing to buy before Christmas because they are scared.
Spruikers are spreading fear.
Spring shoots looking like the snails have got in to them.
Reality is you're looking at around $2000/fortnight for mortgage repayments with a 20% deposit on the median house, there's only so many people who can afford that kind of expense especially with the cost of living biting at the moment. Even with such high immigration, rents are high enough to make the yields on investing in that make sense either.
FHB's are buying a record proportion of the properties so clearly their profile can meet the servicing cost. I am assuming that the typical FHB is a 30 something professional at the peak of their career, so we probably shouldn't compare house prices to average incomes as FHB's don't earn average incomes. my thoughts FWIW.
Here's the full REINZ report. It shows all the regions, so you'll get your answer by scrolling through it. You just need to click the "Download" button.
I am assuming that the typical FHB is a 30 something professional at the peak of their career
Agree with the 30+ part.
Disagree with the peak of their career part. The peak is typically closer to early 50s, so those FHBs can still expect some income growth through promotions.
I'd be curious how much of that is due to people "waiting out" the declines for the last 12-18 months - you'd expect a bunch of people who were previously in no rush to be buying about now (I know a few myself), having seen the writing on the wall last year. Whether that high rate of FHB is sustained is the question that remains to be seen.
FHB's are buying a record proportion of the properties
They are only higher percentage proportionally due to the very low level of investors buying, therefore with low sales volumes, I would have to say the stats are a bit skewed on that one.
Pours a bit of water on calls that investors are the ones pushing up the market tho.
It's the same when they increase borrowing thresholds for FHB grants. Maximum allowances get raised $50-$100k, and hey presto, entry level houses rise by almost exactly that amount.
This is because the market has a crazy amount of externalities impacting price than any one area, it's just the human tendency to look for a Boogeyman rather than fully comprehend the complexities.
10 years ago it was foreign owners. They got squashed, and bugger me, prices still went up.
Not really.
The key determinant for prices and what people are paid and what they can afford. When i-rates are low, people can afford more and people (have I mentioned that kiwis are as dumb as dirt) max out what they can buy (afford) expecting big capital gains.
In NZ, with untaxed capital gains on business "investments" in property, the "investor" with significant existing equity, and income from a rental, will always be able to outbid FHB and owner occupiers. At this time they'd be dumb to do it without a really sound spreadsheet.
FHBs are typically going to outbid an investor for a property. Because as you've alluded to, investors are involving more maths in their decision making, and an FHB has emotion playing a far greater role in their choices.
No they are not. Emotions have jack shit to do with the maximum amount of credit you can access. Like Chris said, access to credit is the determinant of who outbids who.
And as I said, an investor is still engaging in a commercial undertaking. They're less driven by falling in love with a property, or obtaining one at any cost. They want to pay as little as possible.
The ability to pay more, isn't going to automatically have someone paying more.
What type of investor are we talking? "Mom and pop" with a ton of equity they can leverage, who think the property market is going to take off again from its temporary pause and they're going to make a killing in capital gains while the tenant services the holding costs?
If anything, the fact that someone else (the tenant) will carry the can for them might make the investor more emotionally driven than FHB. But we're speculating here. Depends on how seasoned they are I guess, but 75% of landlords have only 1 property and 0.1% have more than 10.
I'm thinking of someone that does it on a more than casual basis. Compared to someone having a flutter.
The typical First Home Buyer is a recent immigrant. NZ is still selling homes to foreigners, just not in the same we used to. Now we give them all Permanent Residency and unleash them on the housing market with along with a taxpayer funded mortgage guarantee or equity share.
https://www.oneroof.co.nz/news/first-home-loan-scheme-is-open-to-abuse-…
"The typical First Home Buyer is a recent immigrant."
Sorry. I stopped reading at that bit of nonsense. (You're hilarious, K.W.)
Not to sound like a paranoid DGM but is there any chance that REINZ figures are influenced/manipulated by agents choosing not to report sales that are below expectations? We sold our home in Auckland in April 2022 and it is still recorded as 'TBC' on Homes.co.nz. Will REINZ have that data even though Homes appears not to? I note another house we had an eye on which sold a few weeks ago (I expect much lower than the vendor was hoping for) is still recorded as 'TBC'. Maybe something for a journalist to look into?
I have noticed with local agents around Wellington that they are often very quick to make public sales data that are above expectations, and very slow (often more than the required 3 months) to do so with sales on the other end of the scale.
REINZ records all house sales when they become unconditional, so before settlement date. So in short, yes your house has been included in the March or April (whenver it became unconditional) report and no, RE agents cannot manipulate the REINZ data.
Does it include private sales? How would they even know, unless the lawyer passes on that info.
Membership of the REINZ is voluntary, so there will be some agents who are not members and won't send in their results. Those who are members and do send in their results can be tardy in doing so, which is why the REINZ data is constantly being revised.
Lawyers have a legal obligation to send details of a property's sale price to the relevant local authority post settlement, so that their valuation rolls can be updated. QV and other valuation agencies draw on this information to update their own databases.
Thanks for the clarification.
So does HPI also draw from relevant local authority data (includes all sales) or only the data that their members send in? If the latter there is still scope for inaccuracy and bias
Hi Yvil. Thanks for the answer. That doesn't answer my question though. Does anyone know if REINZ audits its members (agencies or individual agents?) to ensure that all sales data is provided in a timely manner?
I don't think anyone would pull figures from Homes to use, you can have TBC there forever or all sorts of other codes where the sale price is not disclosed or even withheld. Looks like Homes got estimates updated today, its still rising. If they are behind then there will be quite a bump before 2024.
Yeah, mine is up by $61,324.36. I'm off down to the ATM.
"We sold our home in Auckland in April 2022 and it is still recorded as 'TBC' on Homes.co.nz. "
It is now November 2023 - 19 months after the transaction date and the price is still recorded as TBC? Even if the transaction is not yet settled due to some deferred settlement date, the transaction price should be reported for market price transparency.
Can you tell me if the transaction price been disclosed elsewhere such as QV.co.nz? I think QV.co.nz records the transaction price after settlement date so there is a potential time delay there with market price transparency.
If the transaction price has remained disclosed after a period of 19 months, how is that a fully transparent market where all participants have open access to that transaction price data? Especially where valuations in the residential property market are commonly undertaken via a most recent comparable transaction price method so transaction price being disclosed on or near the transaction date is important (rather than transaction price reported at settlement date which could be months later and market conditions and market prices may have changed).
Take an extreme scenario, all transaction prices on all residential property transactions are withheld and only disclosed 12 months after the transaction date (regardless of the settlement date) - how would valuers undertaking their valuations make their valuation assessment in light of outdated transaction price data? How would that impact bank lending? How would buyers and sellers know if they are transacting at or near the current market price based on the most recent comparable transaction price method? How would property traders assess their potential resale price after their renovation project is completed?
Keeping transaction price data undisclosed or disclosing data on an untimely basis would be the equivalent of transaction prices in the financial markets (e.g shares, bonds, etc) being undisclosed or disclosed on an untimely basis.
Just checked. The sale is not even recorded on QV.co.nz let alone marked as 'TBC'. Address: removed. We purchased in Sep 2019 and sold in April 2022.
FYI, the property is recorded as sold on April 2022 on Oneroof.co.nz with no transaction price
https://www.oneroof.co.nz/property/auckland/glen-eden/147a-glengarry-ro…
It has an abridged classification of "other", which is defined here - https://www.oneroof.co.nz/sales-type
Note the last line : OneRoof does not display transaction prices for sales classed as ‘Other’.
'Other' sale definition: The classification encompasses sales transactions with one or more of the following attributes:
• Sale of part of a property
• Multiple property sales under a single transaction.
• Leasehold sales
• Non-market sales:
• sales to family members or related parties including companies and trusts
• sales to adjoining owners
• sales with prices well below expectations when compared to local market sales
• OneRoof does not display transaction prices for sales classed as ‘Other’.
The sale did not fit the definition of "other". It was a standalone building on freehold title to an unrelated party returning from Australia. While it was slightly below the 'estimated value' it was about $100k under what the Homes estimate was at the time but definitely not "well below" expectations in the sense that the above definition anticipates.
I’m not taking a side here but would like to remind all commentators that these events can take a long time to play out. The GFC was not a day, it was years.
Sure, this time there have been billions injected, but the same occurred post GFC with cheap money… and SOME assets still tanked.
if you want to have an awards ceremony over who was right in 2023 then you probably need to wait until 2025.
Interestingly, according to the graph we never hit the highs of sales volume in the 2021-2022 peak as 2008 peak pre-GFC, and have not yet hit the lows either. time will tell if investors bail en masse as I still see mortgage interest rates climbing irrespective of the OCR decisions by years end and the question on everyone's mind is: When is the tipping point?
The tipping point is avoiding tax on the exit. As soon as the flipper tax is back to two years the flood gates will open. Assuming we get a Govt pre Xmas, all three parties agree to role this back, we have to wait for Parliament to reconvene and then drive the change thru. So March 2024 onwards...?
And there is a very real possibility that after March 2024 the landlords selling won't be selling to other landlords ... but to owner occupiers and property developers.
The net effect by OO, assuming they are renting already, would be zero. But not zero if they've been living with friends, parents, etc. And a full scale demo-and-build would remove the rental for up to 2 years with hopefully a net gain after that due to higher density. Even a refresh / makeover it'd be 3+ months - plus whatever period it sits in the market waiting to be sold.
So another "housing crisis" awaits?
With rents spiraling out of control?
Or will the NACT realize their policy wasn't that sound to start with and they refine when the bright line cuts in, or stage it by length of ownership?
If the prospective rollback of the brightline comes then there would be a likely drop in prices due to the flood of options coming onto the market. The question from there would be how much would be scooped up by OO vs how many would be by investors for the rental market, ergo how many rentals would be sucked off the market, thus increasing rental yield which would have flow on effects motivating investment in rentals once more and restarting some of the FOMO. I can't see a good ending either way unless there is less incentive for investors by means of keeping the bar on interest deductability and some form of CGT preventing flippers. Oh the mess we have gotten ourselves into.
Agree. We are in a mess.
My view is, like it or not, owning and operating one or more residential properties is a business. Thus, treating expenses, in this case the interest expense differently to any other business is inconsistent and creates an imbalance in the overall market.
Now an owner occupier would claim that they can't claim interest as an expense. True. But they need to understand that they're also not paying any expenses for accommodation as a result. Thus the economic benefit on average kind of balances out. (FHBs take note of the on average qualifier. Where such qualifiers are used, you can structure things to beat the average.)
But why is an investor buying rentals? On a year by year basis, especially in the first years, the numbers simply don't suggest the annual yield is actually worth it. I.e. there are far better investment options.
Of course, it's all for untaxed capital gain. But this comes with a massive cost to NZ Inc. Not only is the government starved of revenue but vast sums of capital are locked up for very long periods returning extremely low returns. Further, most of this capital is borrowed from overseas, and worse, those making profits lending it to us are predominantly overseas banks! (Have I mentioned that voting Kiwis aren't that bright?)
Taxing those capital gains seems like a very good idea. But at what rate? Like any new tax, set it low'ish so it's palatable and let governments tinker over time.
You'll note I didn't say "tax only the residential property investor". All capital gain on any residential property - including owner occupiers. Why? Taxing just one group of an asset class is wildly distortionary as the OOs will over capitalise, either by over-developing their property, but more likely by over-paying for their property when they purchase which just sucks up more capital for an extremely unproductive use.
But there's one further problem - What about land bwankers? These are the scoundrels that create scarcity for their own gain, taxed or not. An annual LVT based on the opportunity cost associated with what the land could or should be used for would get them to shift so that the land can be used for higher productively purposes. Such a tax would also encourage far more 'urban renewal' projects that would enhance our cityscapes.
Have I mentioned that our appalling tax system drastically needs an overhaul? Why aren't we doing it? Is it because voting Kiwis are as dumb as dirt?
I’m not taking a side here but would like to remind all commentators that these events can take a long time to play out. The GFC was not a day, it was years.
I actually feel like the economic fallout from COVID is going to be something more like a 10 year cycle. But the short term aspects have been fairly predictable:
- supply side of things is going to push prices
- "emergency" interest rates won't stick around
- immigration will be pumped after years of shut borders
- everyone will get so sick of Labour, National will get in and reverse some of Labours property related policy
- the housing shortage will worsen
- the economy will shit itself and the state will throw lollies
My interest lies in the prospect of that the country will look like in approx 15-20years when we see the boomers knocking off and the resulting effects across this timeframe. We are already seeing many working longer than 65 (many be need as opposed to want), but also the larger scale retirement and loss of knowledge, skill and competence across the country. many opportunities in respect to gaining market share in many areas but also many opportunities in other areas such as retiree purchasing trends. Just look at the uptake of e-bikes.
Mmmm. Hard not to feel pessimistic on that one. I don't hold out a lot of hope for someone being able to service a carburetor in 20 years.
I can see a rather pronounced drop off in the quality of many factory fabricated building supplies (think aluminium windows, timber doors, etc), as older guys who were effectively artisans are leaving the workforce, to be replaced by someone inexperienced following instructions, who don't really care too much whether what they're doing is perfect. The way construction work gets done now is far less methodical, and pretty scatterbrained.
If I had to crystal ball NZ, I'd say governments are going to keep flooding more and more people into NZ this century, to both juice the economy, and because demand will be pretty high. As grim as it feels here, a lot of the worlds going to shit, and quicker than I felt 10 years ago.
Artisans in aluminium joinery. That’s a new one.
Yes I've been looking at this for the past few days in earnest. I feel like I'm missing something really obvious (apart from how as an older Millennial I'm stuck with my Boomer colleagues another 20 years because many won't be able to afford to retire). Plus the drastic impact on our healthcare system, which will completely implode under the weight of a huge number of elderly with multiple co-morbidities, not enough care homes, and people who refuse to move out of their 3br quarter acre section. At least they'll provide low wage local jobs like gardening and care-taking, I guess. I read last night we could have 3 generations in a rest home at one time! So retirement planning will become even more important.
We have that time though to prepare so really now is when HR teams and people leaders need to start working on succession planning for these workforces. I understand from other friends that anything specialist has good career opportunities due to this upcoming workforce change.
Yes the classic ageism which is alive and well out there for those seeking work in their 50's or older, especially anyone with a permanent injury or health condition many employers won't touch them. Seems to be many handyman roles around for those with practical skills for odd jobs here and there. The true key is that GenX, Millennials, and to some degree Gen Z have the responsibility to vote for and shape NZ for the future. Millennials are the last generation to understand what childhood was like before the instant gratification of broadband or fibre internet, without smartphones and when social interaction was far more normal and necessary than today. If we can't rely on the population to vote for anything other than the housing ponzi we currently seem to rely on to prop up our economy, how then on individual, local community, local govt, and ideally central govt levels do we make change to benefit others than ourselves. We all want everything to be high spec, and well functioning like some other parts of the world, but the current mantra of wanting it all but wanting someone else to make it happen for us, is the fatal flaw.
the number of new listings received by REINZ members in October was up 22% compared to September. And the total number of properties available for sale increased by 9% between September and October.
the listings in October will more likely become sale number in Nov, not October. and Sales on September is more likely listed in August.
A repost in case people missed it ... And the REINZ graphs are on this page so no need to navigate away to check what I'm saying ..
by ChrisOfNoFame | 14th Nov 23, 9:57am
It continues to amaze me that so many, are so focused, solely on prices.
Price is what a seller and a buyer agree to at a point in time. Nothing more. Without looking a volumes and understanding the aggregate supply and demand factors they tell you nothing when taken in isolation.
And yet, we see screeds and screeds on columns filled with "analysis" based almost solely on short term price movements with only passing references to factors affecting aggregate supply and demand - with the most common one being interest rates. (Interest rates are largely a demand side factor but has some bearing on short-to-medium term supply (1-5 years)).
But what of supply? What is happening there?
Once again, dwelling supply gets a passing mention (occasionally) but never any in-depth analysis that would affect the market - especially to the buyer's mistaken belief that dwelling price rises of 7.2% per year are assured.
Once again, I'm going to remind people of Auckland's flatline in prices following Auckland Council's Unitary Plan of 2016. Further, I'm going to remind people of the NPS-UD, the MDRS, and the fact that most Councils have now followed Auckland. Together, these policy changes, that enable far, far higher densities, are going to continue to have a massive effect on the supply of dwellings. Basically, supply will be far, far less constrained than it was prior to 2016 (and somewhat earlier for ChCh thanks to the earthquake).
Focus on price all you like. But you're being sucked in by spruikers.
If you want to know who is selling stuff, if they don't mention the supply side effects of the 2016 UP, NPS-UD and MDRS then they're selling stuff, and the 'article' becomes nothing more than an infomercial. (interest.co.nz excluded obviously as they're a news aggregator providing a constant stream of what's pushing the market.)
As my son used to say when he was young, "So long, suckers". :-)
And I'll remind that supply for buyers is not just new builds - it includes sales for any reason. More houses coming to market from wherever = more supply for same number of buyers = lower prices to get the bid.
Cool Chris, so you reckon next time someone wants to buy a house, instead of asking "how much is it?" they should ask "how many sold in the area?"
Yes? You'd always look at recent sales in the area wouldn't you? If there are none, throws some doubt on how the price is being set.
As anticipated, expensive money, increased council rates, insurance premiums and other fixed cost of living pressures in general appear to be acting as a significant hand brake to house prices. Autumn 2024 will certainly be telling as to the delayed effect of mortgage stress, elevated unemployment. I believe there is potential for further on-trend downside.
FHB's need not hurry - no need for FOMO. Suggest continue to build up savings for a bigger chunk of equity up front. Less dead money in interest need be paid!
Good advice for now.
But better advice published here (perhaps by me?) would have been to buy a cheap inner city apartment a year ago and then hammer the mortgage with overpayments. Two of my younger employees and a relative did this, and they're laughing now. A capital gain and good yield if they keep the apts and rent them. Unsurprisingly, to me at least, the three didn't think they'd live in the apts for long - being apts - but have now taken to apt life and think it's awesome.
Great to hear. In all fairness we need more people adapting to apartment living as the inner cities will only grow in this regard
Would you want to live in an apartment down town Auckland? Fancy an emergency housing neighbour or being mugged by a homeless person on your grocery trip...
There's many reasons I've never lived in Auckland and still don't intend to, but from years in the capital and overseas I appreciate the benefits of apartment living. If rents and housing were more affordable across the board you may see less of the homelessness we currently see. Just look at the number of homeless that has increased since Lockdown 2020 and the crazy housing increases leading to the selling off of swathes off rentals nationwide.
Not everyone wants to be in their mid-late 30s when they enter the market. In fact it's getting harder and harder to get a 30 year mortgage at the age of 40 even.
Take your time
Hurry up
The choice is yours (don't be late)
Yeah, I've also seen that same movie "Old". On an island they grow old in just 24-hours.
Wasn't his best.
Less people will be able to afford a house in 2024 though, from the looks of it.
Retired Poppy keeps acting like FHBs have got all the time in the world with idyllic conditions to save... what he doesn't realize are many of them are living in shitty flats trying to put savings together whilst battling rent increases, cost of living etc... on top of this, if his HFL preaching is correct with job losses... it's only going to get harder to get finance. But he keeps insisting they sit on the sidelines while he sits happy in his mortgage free property which he bought in 1997 watching his Term Deposit accumulate...
Yeah I find his opinion on housing really bizarre when obviously his buying a house lead to a successful outcome. Usually you promote something that has worked for you, its pretty hard not to especially when you see mates that have always said "Houses are too expensive" and so never got into the market and they are now 55 and totally screwed.
"Yeah I find his opinion on housing really bizarre when obviously his buying a house lead to a successful outcome"
Some readers on interest.co.nz can see that Retired Poppy can see things in the New Zealand housing market that most other New Zealanders are unable to see.
If people are unable to see what Retired Poppy can see, those that are open minded might want to understand what Retired Poppy can see. I don't know Retired Poppy but based on their comments, I don't believe they have any vested financial self interest.
"Usually you promote something that has worked for you,"
What has worked for you has worked due to the market conditions at that time, and most people are unaware of the market conditions and circumstances that made it work - there is a misattribution of causation by most people. Market conditions and circumstances change and may not work in the future - this is something that very few people are aware of.
"its pretty hard not to especially when you see mates that have always said "Houses are too expensive" and so never got into the market and they are now 55 and totally screwed."
Most people in New Zealand forget that residential real estate in New Zealand is not the only asset class available for investment for retirement. A close relative who is nearing retirement has never owned their residential accommodation and always lived in rented accommodation, has several million dollars in the bank available for retirement.
There are many ways to skin a cat, for sure.
But most people at 65 that dont own a home, don't have much to fall back on, and likely have to work till their body gives out.
Terrifying thought for sure reaching 65 in a rental. Maybe I had a bad run in my 20's, but nothing worse than packing your things every 1 - 2 years on a whim while having to find somewhere else to live. Let alone doing it at 65 when you may have accumulated 3 x as much belongings and 3 x as much ailments.
Might be okay if you have a landlord in it for the long haul, but never guaranteed.
Plenty of oldies sleeping in cars. The luckier ones, a caravan.
Maybe there will be more impetus to change tenancy laws to enable more stability, rather than the current push to make tenancy more unstable.
"Maybe there will be more impetus to change tenancy laws to enable more stability"
That was the policy of the current outgoing government. This is what happens in many countries in Europe.
They might be changed with the incoming government.
I wonder if that'll generate more or less rental properties.
As it is, landlords have moved towards shorter term renting to avoid the potential of owning a bad tenant.
In Europe many professional people are lifelong renters by choice, because supportive tenancy laws give then decent stability and enables them to invest in more productive assets. Changing laws to give landlords more power undermines this and potentially the quality of available tenants.
The hard truth there is that landlords then become ultra picky and will only ever take the perfect tenant. Many landlords, such as one I had years back who had swathes of properties, understand that there is a general level of wear and tear in properties and it isn't worth fixating over smaller things, they fix it on the tenancy ending and get new ones in. Historically I've found it is more likely to be the landlords with 1 or 2 IP's who are ultra protective about their properties or the property managers are. The unrealistic expectation that a property will have absolutely no wear and tear across the course of a tenancy leads to being more selective on tenants. Not discounting that there are genuinely some humans out there who are animals and act as a wrecking ball.
"But most people at 65 that dont own a home, don't have much to fall back on, and likely have to work till their body gives out."
At the extreme, elderly people who are unable to work and have insufficient assets may need to go to social housing.
Some other close relatives were in that category. Ironically, they got into that financial situation as they owned real estate and they owned their owner occupied residential real estate. They never financially recovered and when they died, they didn't have sufficient funds in their estate to pay for their own funerals - their 3 children had to cover those costs.
Yeah, we can find exceptions all day long. I like playing better averages.
Many of us aren't very disciplined, so someone who hasn't managed to acquire a house (which becomes forced savings), probably isn't setting aside nearly enough to see them out.
"Many of us aren't very disciplined, so someone who hasn't managed to acquire a house (which becomes forced savings), probably isn't setting aside nearly enough to see them out."
For most households, their main source of retirement savings is their owner occupied residence. Under most market conditions it makes sense to buy. Most people in NZ believed that owner occupier buyers should buy under ALL market conditions.
However under the market conditions of 2020 - 2022, many of these average owner occupier buyers who used high amounts of leverage to finance their purchase during that period, many have put themselves in a financially vulnerable position and may come under cashflow stress and mental stress. How many will be unable to hold on? If they are unable to hold on, this may result in a loss of their entire lifetime of savings used as a deposit to buy or in some instances, the borrower is in negative equity and still has an outstanding amount owing to their lender.
Market conditions will change and at some stage, it will make financial sense to buy rather than rent.
Anyone that thinks a market will always be healthy is kidding themselves.
For many it's bad timing, and others should know that you don't get a full crop every year.
"Anyone that thinks a market will always be healthy is kidding themselves."
Can you explain further on what you mean when a market is "healthy"?
People aren't losing their shirts left right and centre?
"People aren't losing their shirts left right and centre?"
In the period 2020 - 2022 - very few people were losing their shirts in the property market. Unemployment was at record lows as the government supported the economy during COVID. Banks were allowing mortgage payment deferrals for up to 12 months post COVID, and mortgage interest rates went to record lows. It was a big boom and party time. Now the party has ended. As they say, the bigger the party, the bigger the hangover.
For most households, their main source of retirement savings is their owner occupied residence.
And if one truly thinks about it, it's a very weird situation to have created, and it has only been created over the last 2 decades. It's highly illogical and irrational really.
It's pretty logical, you'll always need somewhere to stay, and in the absence of savings, you can downsize it to free up funds.
You have to also remember a lot of boomers distrust other forms of investment, because of the share crash in the 80s, and various schemes going bust.
Nifty1, who gets all fired up over the words "retired, old, Boomer, Mortgage free and term deposits!
If anything, your comments speak more about you.
We got ahead in life by receiving interest and doing our best to avoid paying it. It's all about discipline and patience - these are essentials you and a few others clearly can't relate to.
It's high time you stopped spreading fear. There is no hurry to buy.
They're not really "essentials". Well, discipline helps. I was 10 years younger than you buying a first house (and in a much more expensive market also), and was able to move onto other things sooner. Kids are pretty much flown the nest, and my "we'll wait a bit longer" mates are still changing shitty nappies.
They were essentials for us and it worked. I'm not for a moment suggesting FHB's save up the entire amount like we did! Given the prevailing conditions, I see ample time to save and take ownership of a bigger chunk of equity up front. Some on here are twisting this around to be wrong when it clearly is not.
Those who post that time is running out to buy are spreading fear for their own selfish vested ends and nothing more.
My perspective is life's pretty short and your window to secure a home even shorter.
Since you bought your place, the opportunity to save 100% of the purchase price has been heavily dampened by increasing purchase costs. Even if someone could save say, $40k a year, by the time they've saved enough for what a house costs today, they'll likely need to save the same amount again.
Your advice is far less reliable than it was 30 years ago.
My advice will mean all sorts of things to different people. If there is a pressing hurry to make the biggest purchase of ones life then it's an ill time to buy based on ill conceived reasons.
Renters can enjoy financial and emotional freedom too. Some on here seem to think renters either are already, or destined to be poor. Many interest payers are finding the same thing right now.
Enjoy life and the freedoms it has to offer. Don't throw it away simply because a Spruiker says this is your last chance to buy.
It's effectively worthless to most people in this day and age.
Oh, another edit.
It's not a "last chance to buy" deal, it's that for the most part, getting into life and securing a house (if that's a wish of someone) is mostly better done sooner than later. Very rarely does it get easier as time goes on.
Plenty of dudes your age and older are now learning that the hard way. And more likely from my generation, and probably the one after more so again.
It sounds like RP has found someone else to argue with since I don't reply to his posts anymore, as I can no longer see them. Good luck to you Pa1nter ! Just don't waste too much of your time, he always wants to have the last word!
As Joe Walsh once said, "you can't argue with a sick mind".
Ha-ha :) Do you regard "Joe Walsh" as mentally healthy?
You've made my afternoon with that one!
No, but he's way more enjoyable to listen to, and at least has an ounce of self awareness.
It's effectively worthless to most people in this day and age.
As we know RP's position in life and financially stable position, we can appreciate the lens he sees things through. This doesn't make it invalid in particular, just a view as a product of the conditions he had to work with which were highly favourable in comparison to today. Hindsight is always the wisest disciple, but never forward thinking.
My perspective is life's pretty short and your window to secure a home even shorter.
Since you bought your place, the opportunity to save 100% of the purchase price has been heavily dampened by increasing purchase costs. Even if someone could save say, $40k a year, by the time they've saved enough for what a house costs today, they'll likely need to save the same amount again.
Your advice is far less reliable than it was 30 years ago. You didn't even follow your own advice and buy in a down market.
Nifty1 gets fired up on bullshit advice that is provided in the comments section from unqualified people...
If you're so sure I'm wrong, what's got you so fired up? Don't worry about it mate :)
Makes no sense mate... have a think and do another edit
Translated - "success makes no sense unless I have it handed to me on a platter" ???????
Patience and discipline Nifty1, patience and discipline. ....
You've lost the plot for the day RP, cup of tea and a lie down time...
The same shitty flat will cost about 20k extra per year to buy right now. Every extra month of savings will reduce that, there's very little to lose at the moment in waiting and everything to gain. Might be a different story in 6-months.
Not sure what you mean on the job losses, if you think that's on the cards then its far better to not be buried in debt..
Come as you are - Nirvana. Great song but miles away from context.
Why would you want a 30 year mortgage at 40? At 30 even.
Do you remember when BNZ used the Bittersweet Symphony tune in their TV ads?
"Tryin to make ends meet, you're a slave to the money then you die"
You don't want your mortgage payments to consume as much of your income, or you want to borrow a certain amount that necessitates that sort of term.
You can just as easily ask why someone wants to work till they're 65. Why not 40, or never.
"FHB's need not hurry - no need for FOMO"
Cause of FOMO by first home buyers from the Oneroof article - changed house price expectations
- Gray said many first-home buyers had started looking prior to the election because they had anticipated a change in government that would encourage investors to return.
- They were well aware that investors might re-enter the market under National’s well-publicised policies around the bright-line test and reinstating interest deductibility – that would make owning an investment property easier – and wanted to buy before they returned, he said.
- “First-home buyers, they read newspapers and OneRoof. They don’t have to be geniuses to work out that it’s not long until they will be in competition with investors, and they don’t need to spend much time with a real estate agent to realise they haven’t been dealing with many investors up until this point.”
Also due to property promoters forecasting house price increases in the next year. There is one high profile commentator saying that prices will increase 5-10%. Also with headlines "Why Kiwis shouldn’t bet against a rapid rise in house prices"
From 14 Sept 2023:
What factors will contribute to house prices, after rising 5% this calendar year, rising 10% or so next and 15% or so over 2025?
1. High net inward migration boosting population growth.
2. Falling construction of new dwellings until a turnaround probably in 2025.
3. Falling mortgage interest rates through 2024 and 2025.
4. Rising rents
5. Falling listings contributing to rising FOMO and falling FOOP (fear of over-paying).
6. Rising tourism taking accommodation back to short-term holiday rentals like Airbnb.
7. Rising foreign student numbers boosting rental demand, especially in Auckland CBD.
8. Relaxation of investor tax rules if there is a change in government.
HPI has risen for three months straight. How many months it takes for Retired Poppy to stop advising FHBs to wait is anyone's guess.
As usual/predicted no mention of these flat prices in the MSM.
I've seen two articles today, one NZ Herald and one Stuff about the REINZ October report, I won't link to them, but a couple of quotes:
NZ Herald
The median national house price fell a seasonally adjusted 2.8 percent from a year ago and was down just under 1 percent from September, to $795,000.
Stuff
“Although Real Estate Institute data is showing a steadying ship this month, we should not discount the impact for those coming off high interest rates, the pressure of the cost of living, and the impact on the market post-election. Keep a close eye on the next three months of data as the new coalition Government’s policies land, migration flows remain high leading to pressure on both the residential sales and rentals market, the weather turns warmer and we watch global factors play out.”
ok, thanks.
Quietest October for house sales since 2011, when nothing was selling in christchurch due the earthquakes. Even covid-affected years were busier than this.
ooff given the very ordinary average Auckland house I hope it comes back down to $600K area
What exactly is this "recovery" that everyone appears to be praying for? Will it boost the money flowing, needed in the real economy? What does it achieve big picture wise? What is it the patient is recovering from? Is it the drug overdose victim well enough to inject again? Is it the diabetes patient well enough to consume more sugar? Or is it the drug supplier well enough to keep pimping?
Whom does it really serve? Why is it we don't have the same fervour over the food, clothing, water, air etc markets, you know, the other basic necessities one needs?
An independent observer, a highly intelligent ET species could quite rightly view it all as an element of madness, a pathology.
There's a fairly decent relationship between values reversing and overall economic decline.
How can you jump to a market improvement.?
All my economic knowledge is when you increase supply 22 percent without changes to demand prices fall.
with banks still increasing rates, collation talks likely to supress tax cuts and initiate reduction in spending short term demand is not going to increase.
Is Tax deductibility of interest still on the cards as this will be a trigger for investors .
Recently went to Les Miserables in Orewa, (fantastic performance a sell out I believe) my daughter at the interval asked what happens next.... to which I replied "they all die on the baracades......" to me the market feels like the interval.... who dares wins, or dies.....
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