ANZ's economists have adopted a slightly bearish tone in their latest Property Focus Report, now saying they are expecting a decline in house prices this year
They note that house prices rose 0.4% in October (after making a seasonal adjustment), which was "a touch weaker than we expected."
"It's not just house prices that were on the weaker side this month," the report says.
"The forward indicators of sales and new listings showed that there's perhaps some further softness to come.
"We have revised down our 2023 house price forecast and now expect house prices to fall 0.4% in 2023, versus a 0.2% rise previously.
"If momentum doesn't recover after the election-related dust has settled, our 2024 forecast is on thin ice for a downgrade too."
The report also notes that new residential listings are above year ago levels for the first time this year.
"All else equal, this extra supply will make it more difficult for house prices to rise meaningfully over the next few months, the report says.
"This lift in listings is on top of an already large stock of inventories, which needs to decline before meaningful rises in house prices are likely.
The report says it will take years for residential property prices to get back to the highs of the 2021 peak.
On the interest rate front ANZ says a weaker than expected labour market has prompted the bank's economists to soften their expectations around the Official Cash Rate (OCR). They no longer expect the Reserve Bank to increase the OCR next year.
"We don't expect much relief for mortgage holders in 2024 insofar as we expect the Reserve Bank to keep the OCR on hold all year," the report says.
ANZ is New Zealand's biggest residential mortgage lender with total loan exposure of more than $105 billion as of September 30.
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139 Comments
Noooooo-way! - this can't be happening! At this rate, Autumn 2024 is shaping up to be a downwards doozy ↘️
Lol.... they could have come to us for a precise view of the market :)
After all we are the realist...
You mean about your prediction of 10% interest rates by December Guaranteed and Higher for Longer. 🤣 you 🤡
Don't make a bigger fool of yourself.. you already have made a fool of yourself in the past.... prove that I claimed a 10% rate by December.. and rates are still high..you 🎑 / bigger 🤡
He claimed prices would drop 30 percent this year
Good on you DGM for admitting you were wrong about claiming "higher for longer", you were so proud of your acronym "HFL" and for your 10 % interest rates by X-mas. I knew you were a stand up guy who can admit when being wrong! 🤣🤣🤣
Please admit yourself at a psychiatric clinic..
This is literally an article about our biggest bank changing their forecast. If a commenter's forecast doesn't pan out, don't insult them, it was just their opinion at the time and I appreciate all the differing views. So thanks dgm for contributing your opinion, Yvil I do appreciate your opinion at times but let's tone down the personal attacks.
Yep, you're top guy, someone others can really rely upon for your honesty… NOT !
You used to be a decent person, what happened? Are you now Evil
Stop putting NOT at the end of statements. It makes you sound like Borat
As someone who only comes to this site for the comments, I'm now going to read every comment in Borat's voice. It should make it even more amusing to visit.
Okay Yvil, ya win the debate. Top man 😀
A tide of change is coming and that is what you fear
The earthquake is a coming, but you don't want to hear
You're just too blind to see
Have you seen the writing on the wall?
Have you seen that writing?
Can you see the riders on the storm?
Can you see them riding?
Can you see them riding, riding next to you?
Case in point : 88 Mitchell Street, Brooklyn, Wellington City - For Sale - realestate.co.nz Offers of $975k
Puchased 2010 for $615K.
Using the RBNZ inflation calculator for housing - $615k in 2010 is worth $1.4m in 2023 dollars.
So the owners of this home after spending about $400k to $500k in holding costs over that 13 year period are going to walk away with very little in the way of capital gains.
Remind me again why TTP always says housing can't lose over 10 years?
This crash is a big wakeup call for savvy investors - if they want to see real compounding returns on their money then the stock market is the place to invest. The longer this crash lasts the more housing will start to look like somewhere to live, rather than something to invest in.
"Remind me again why TTP always says housing can't lose over 10 years? "
Vested financial self interests are operating.
"what if people say that rates are too high and prices are dropping?"
Refer to the linked video at the 33 second mark
https://x.com/ManyBeenRinsed/status/1729136851825676345?s=20
Come on. You are showing an outlier. Go to homes.co.nz link from here on this property, browse down and look for nearby sales, and sort it based on recent date. There you'll find most of other house in this neighbourhood still got sold at higher-ish price. Its likely that this property has some issue with it (ie leaky home) or the seller just has to barge off soon.
Are you guessing?
Or have you done the math? If so, show it.
No need to be a math wiz. Just pair of eyes to follow the instructions I've just laid and see it for yourself. Cheers have a nice day
Can we give those 200,000 new arrivals residency to move things along a bit?
I'm sure if we just handed out a few hundred k to everyone that would raise things up nicely.
Great idea realtors, we'll just print the money. What could possibly go wrong?
That's how the banks operate.
Lol muppets
Dumb or biased? Or both?
Surely they understand the cost of finance is the major barrier to a market upswing. And that cost won’t be STARTING to come down meaningfully until well in to 2024
Edit made 2.23pm added STARTING
Then in a few months unemployment will be creeping up, and plenty of people won't be feeling very secure in their jobs...definitely won't want to be leveraging up, and taking on new borrowings and plenty of immigrants ready to take jobs for less than resident kiwis..
Given inflation is still above the mandate, why do you believe interest rates will drop meaningfully in 2024?
Once elevated rates have started an economic contraction, the contraction will create a domino effect that causes further contraction. (e.g. A business that fails can cause its suppliers to fail.) Once this contraction is firmly established (as I believe it is now), inflation will fall on it's own.
Consequently, central banks must be extremely careful they do not keep rates higher than they need to as they'll overshoot, and then at the other end they'll need to lower rates below long term averages to restart economic activity. Such a yoyoing effect results in massively wasteful resource allocation.
Were the RBNZ to hold the OCR at 5.5% until the end of 2025, the total length of elevated rates would be over 18 months - much longer than they were ever required to in recent times - and the damage would be severe.
The RBNZ acted foolishly during covid - I don't expect them do so again.
Were the RBNZ to hold the OCR at 5.5% until the end of 2025, the total length of elevated rates would be over 18 months - much longer than they were ever required to in recent times - and the damage would be severe
I don't have an opinion on what you said, just leaving a link to the data if anyone wants to see how the OCR evolved since its March 1999 introduction
https://www.rbnz.govt.nz/monetary-policy/monetary-policy-decisions
Thanks for sharing. The point to note is that current ocr is not much above its lifetime average…not really high as many people with short memories seem to think. The chances of sustained big falls is lower than most think.
Precisely, however the point the RBNZ missed was that they should, with all of their knowledge and access to statistics, have started ticking up the OCR in 2020 after they foolishly flooded the country with money, as even a highschool economics student could tell the resulting inflationary impacts. Sadly they were too timid and left it too long, so the country got drunk on money and now are dealing with a long decline of a hangover.
Agreed, stopping the repeated injections of to much cheap cash, like any junkie starting withdrawal, is gonna be tough. Employment mandate to be removed from RBNZ mandate, and the new govt opening talking about exiting 1000s of govt drones. Having a good job is going to be paramount to financial security. All the meanwhile the tap on immigration is stuck on full open as well. Those that took the opportunity to bend their employers over a barrel in the last three years may find that they have elevated themselves to "first off" status....
re ... "The point to note is that current ocr is not much above its lifetime average"
Okay. You stick with your "lifetime average".
I'll stick with "recent times", which I defined elsewhere as 10-15 years.
You should also note that the RBNZ is predicting a return to "recent times" albeit they upped it by a small amount (0.25?) last MPS.
The trouble with your “recent times” preference is that you’ve entirely selected the GFC aftermath, which has not been historically typical at all…unprecedented in fact.
I don’t. I meant to say STARTING to drop meaningfully well into 2024. I have edited my original comment.
I expect at least 2 cuts in second half of 2024. And at least 2-3 cuts in ‘25
Of course it’s not just about the OCR, it’s also about wholesale rates.
Short term rates circa 6.25-6.5 by end of 24, and circa 5.25-5.5 by end of 25
I'm on the fence still, as we are around the historical average for the OCR and since they've overshot the hikes due to the delay in taking action, you may be right and they may drop and drop again and overshoot the drop once again, or they may only drop a couple of times and let it as is. The market is only influenced so much by the OCR as we have now seen. The swap rates say it all.
re ... "as we are around the historical average for the OCR..."
Okay. You stick with your "historical average".
I'll stick with "recent times", which I defined elsewhere as 10-15 years.
You should also note that the RBNZ is predicting a return to "recent times" albeit they upped it by a small amount (0.25?) last MPS.
@homerodent
on what basis and why do you feel the need to repeatedly make these "predictions"? Mostly proven to be incorrect.
You should change your non-de plume to "I reckon" It would better suit 😊
The inverted yield curve is unwinding, recession is looming (Check out Shanghai and China generally) people are angry globally (check out protests across Europe, S America) angry people blame those they perceive as responsible - history repeats. We are probably in a the gap period between an event and its consequences plus Christmas effect. The RBNZ will continue is unbroken track record of being wrong about everything - too little too late or too much too soon Orr will new Govt suggest he resigns to spend more time with family - hope.
@homerodent
Oh, yee of little experience and knowledge.
17-21% mortgage interest charges didn’t slow the rampant growth of property prices during 1984-1987.
It's the cost of living, real incomes, wages, and a required market correction that is affecting realty values now.
The stupid 35-40% rise in prices over 20-21, due to money printing and 2% mortgage rates was always going to be corrected. It hasn’t been totally yet. A way to go.
The ratio of house prices to incomes was also much lower in the mid 80s, hence higher interest rates had less impact than they do now
pretty obvious
True HM, but the final para is bang on…
Yes correct, you are always better of with lower prices and higher interest rates because you can pay the debt down and your higher interest costs are inflated away with the corresponding income increases.
And then of course a change in Govt. Policy gave capital growth as well.
BUT the worst place to be is high prices with high interest rates.
Where we are now.
Values and income are also a function of each other. Values became way out of whack due to quantitive easing 😊
100K compared to 1 mill. I would take high interest any day at 100K. I was a little whipper snapper straight out of school working at NZ Steel on $45K. Crates were $10, no traffic in Auckland, houses less than 100K. Times were great. But now a six pack of beers is $20 bucks that's cans or small bottle and house prices are costing $1000 bucks a week, for new home buyers. Its like Governments both Labour and National got together and said how do we make life more miserable for people, lets increase immigration, increase inflation and house prices and see how lucky everyone feels. Maybe if we push hard enough, we can make people so poor, get crime so high and homeless so high, we can have people employing security and have gated communities.
Then you will get people who were born at the right time, pointing fingers at people and tell them they need to work harder and stop buying avocado.
And pretty much everyone is discounting that it is the cost AND AVAILABILITY of finance that matters.
If rates tank for the wrong reasons then the cost of finance drops - however banks stop lending and so availability of finance becomes the constraint.
Nope, not meaningfully until 2025…
oh well, it'll only get worse before it's getting any better.
Take an average $1 million property in Auckland with 20% deposit.
Borrowing $800k @ 7.5%, the interest-only payment is $60k per year, or about $1150 per week.
Or $1290 per week if you make it a 30 year loan.
Easy peasy. House prices can surely only go up!
need foreign buyers for sure.
good life in NZ is not for average NZers anymore.
"good life in NZ is not for average NZers anymore"....... and there is your problem right there ....Spot on xingmowang.
Exactly, and everyone seems to be certain that rates will fall significantly. They likely will, but I wouldn't be staking my financial future on the decisions of a committee that completely f%#ked up the direction of future rates just a couple years ago.
it will come down. the higher and longer rates stay, the fast and lower it will become when it does drop.
Which is fine, except that rates can stay higher and for longer than many people can keep their heads above water. So by the time rates come down they'll have drowned.
for longer than many people can keep their heads above water
interest rate will not come down unless enough people are sunk into water. of course, it does not mean rates will definitely come down when enough people sank. it'll be a true test to RBNZ. hopefully they won't make such mistake as they did during covid.
NZ is in the middle of a recession, but not an "official" recession. The OCR won't come down tomorrow because we haven't got inflation under control. In 3 months time, unemployment will be up, GDP stats will be shocking, and then Adrian Orr (or whoever) will need to drastically cut the OCR to save the economy, but it will be too little too late.
Something many people haven't realised, be it from denial or ignorance, is that life isn't fair and not everyone wins and gets a participation award. It seems cruel to the uninitiated and uneducated, but it is reality and it is coming whether people think it is fair or not.
I wonder if the Turkish agree...
I don’t see why it has to come down? We are back to longer term averages, and the baby boomer generation is retiring and starting to use their capital. They may demand a higher cost of capital which will have a larger effect on interest rates than what us mortgage holders want…
With mortgage cost raising 70% once refinancing many people will be under huge financial pressure 1 in 10 sell at a loss already,obviously people who purchased in last 3 year’s being hit bad as prices have dropped in some areas by 20% even people with small weekly mortgage payments of say $650 is now paying over $1000 which is manageable but if your weekly payment was a $1000 per week now it will cost $1700 getting harder to cover. Rates look likely to stay around this level for a long period and I think central bank have learnt a lesson and will not go back to low rates again or inflation will skyrocket. What will happen in New Zealand is people with mortgages will be paying more for longer and as people with financial difficulties have to sell the house prices will fall much quicker but I would think when average home cost is around 500k it will stabilise.
re ... "Rates look likely to stay around this level for a long period and I think central bank have learnt a lesson and will not go back to low rates again or inflation will skyrocket."
Could you explain why you think "Rates look likely to stay around this level for a long period"?
In NZ, they are already resulting in economic contraction and this contraction can only go on so long. Past NZ history shows a year at elevated levels, (remember we are now six month into these raised levels), does enough to hobble inflation, and even when rates normalize, inflation continues to fall (as does economic activity) due to "friction", or momentum, if you like. NZ will be crippled, for no reason, if they are held at current levels for much longer.
With regards, "I think central bank have learnt a lesson and will not go back to low rates again", central banks are required to respond to inflation while ensuring financial stability. If inflation falls, they will lower rates, unless financial stability if threatened (which is unlikely simply by lowering rates, all other things being equal).
They are bound to keep inflation at a target or a range. If inflation falls below target or is at the bottom of a range and looking to fall lower, they will drop rates. They have to.
Historically rates are not high, lowing rates just created inflation, people and governments just borrowed to the hilt because it seemed like free money so assets price’s climbed people bought shares and just spent like party time was going to be with us for ever. What is left now just debt all over the world government debt and personal debt they had to raise rates otherwise inflation would destroy the USD, countries are stopping buying USD so they have to pay more interest on treasury’s so people will buy them. If they lower rates again that will be the end for USD maybe in a few years if GDP goes up and a large portion of debt is paid off they will come down slightly. But unfortunately rates at this level are the way it’s going to stay New Zealand just follows the narrative set by other countries.
The real concern for me the underperformance of GDP as the velocity of all this printed money accelerates.
Something either has to change or things will start to break real fast...
Couple of points:
re ... "Historically rates are not high"
In the NZ context, and if one goes back over 50 years, when non-economist Ministers of Finance controlled our monetary system, this is true. It is also true that these rates were consistently higher than other countries we compare ourselves too. And this is simply because lender didn't trust the stability of our finaccial system. And Muldoon proved them right.
Then enter the Reserve Bank of New Zealand Act 1989. Suddenly there was a promise of stability for lenders. Over time lender grew to trust the RBNZ and lent at lower rates. Our rates have been trending down ever since.
Ergo, using "historical rates" or "long run averages" paints a statistically unsound picture of the current state.
I use "recent times", being from about 2020 while removing one-off events like the lead up to the GFC where the RBNZ did exceptionally well to recognize the situation prior to the GFC and quashed too much dangerous borrowing (and foolish economic activity). When the GFC hit, the RBNZ had ammunition aplenty and responded appropriately.
re ... " rates at this level are the way it’s going to stay New Zealand just follows the narrative set by other countries."
You've noticed that rates on long bonds are falling both here and in many major markets, right? Nobody I know of in economic cycles in the USA or Australia is predicting anything but return to normality as far as rates are concerned. And, as I said above, my normality is quite different to yours.
The economic contraction is due to many living well beyond their means and expecting 2% forever.
Although the interwebs don't promote it, the simple life is actually pretty sweet. Consumerism is a waste of life.
the simple life is actually pretty sweet. Consumerism is a waste of life.
Amen brother. Those who can grow a good chunk of food, catch fish and hunt plus access the areas to do so readily are the winners in so many ways. Perhaps not in monetary terms, but in lifestyle, health and most importantly, fulfilment.
Isn't it ironic, now worried Spruikers are on here pushing for even more overseas arrivals to be granted residency and for our housing market to be opened to more foreign buyers!
Readers will recall earlier this year when Spruikers were quick as lightening to celebrate FHB's apparent dominance in this still overpriced housing market as they were providing some tepid support.
Spruikers need to for once in their lives set aside their inherent selfishness, celebrate further drops as they come so to allow even more FHB dominance.
You're going to get reprimanded by security (yvil) for using the word 'spruikers ' beyond his tolerance level
Sp - - - - - rs?
Vested financial self interests.
Refer to the linked video at the 33 second mark
"what if people say that rates are too high and prices are dropping?"
https://x.com/ManyBeenRinsed/status/1729136851825676345?s=20
How are we meant to take anything these muppets say seriously given how wrong their previous forecasts have been? Might as well consult a Magic 8-ball because they clearly have zero clue what's going on.
I mean, some things are obviously bloody hard to forecast. But house prices really aren’t right now.
They always are difficult to predict. Can you hold your hand on your heart and say house prices will not be higher this time next year? People would have done that when Covid hit.
These are bank economists. Their utterances are not to be taken seriously without consulting non-bank economists.
Non-bank economists have differing views as they're not publishing "informercials".
None of them are above bias. There are far more vested interests out side of banks.
Are you saying TA is not a respected independent commentator? The man conducts a poll of real estate agents and uses that to divine the housing market. Can’t see what’s wrong with that
Excellent point. Personally I think interest.do.nz, and media generally, should be giving far more prominence to the forecasts of non-(big 4)bank economists and far less to economists employed by those banks. Except TA of course!
Looking forward once again to those halcyon days of open homes, busting at the seams, with buyers frantically waving their bank pre-approved loans over their heads, trying to get in before auction day.
"Settle down" says the keenly dressed realtor. "Please form an orderly queue and register your interest in our forthcoming auction".
Auction day arrives - there are 5 serious bidders, all prepared to go well over the "now selling" price.
After calls in from overseas bidders, the auction is "now selling" and well underway ....
"Do I hear 2.1 million ?" says the Auctioneer with a hesitant tone, as if waiting for a further upward bid .. .
"2.2" yells the man wearing the cheese cutter cap in the back row ...
"2.25" a small lady's voice from the front, with impeccable taste in shoes.
"Come on, we can do even better, just look at the sea view and sun streaming in those bi-fold, double glazed doors!"
"2 million and 3 hundred" says a man with a sweaty brow, clutching a cell phone to his ear.
There are glances all over the room, is anyone going to bid further ?
...... to be continued.
Frank always wondered about those apparent overseas bidders on the phone to other agent, when foreign buyers were banned. Frank believes there may have been some skullduggery afoot there.
"as we expect the Reserve Bank to keep the OCR on hold all year"
I will eat my hat if the OCR hasn't changed by the end of 2024
OCR dropping by March
I think that's likely. But it should be dropping tomorrow!
The new govt is going to remove the "maximum employment" consideration from the RBNZ act. Thus turning the focus to control of inflation. With inflation still almost triple the 2% target level, signs are pointing to another increase unless we see inflation drop to below 4.5% at the next release.
Plenty of boomers continuing to spend up large with their massive wealth increase due to capital gains over the last 5 to 30 years.
But dont worry millenials, while you pay 30% to 40% income tax (plus GST) on every dollar in order to cover the costs of boomers healthcare and superannuation, not a cent of tax was paid by boomers on their billions and billions of capital gains from owning land, secondary dwellings and homes.
You could also add we shut down the country, causing an enormous amount of social problems, disrupted schooling, left folks to die alone without family and borrowed billions to save them from covid, when the death rates for those under 70 were absolutely negligible.
Agreed
OCR dropping by August
This is an article about a bank changing its mind. Again.
Ah, a headline to get the DGMs all twisted in their panties…..but 10% by Christmas guaranteed guys!
To set the record straight - the trend is still upwards in prices. It doesn’t normally go from a dip straight up m, before you desperate lot start celebrating.
Give it a rest mate, you’re stealing oxygen from the opinions that have actually delivered meaningful insight.
Fact is a number of commentators here have been pretty darn accurate since 2021 and will continue to be proven correct as we move into 2024.
Those opinions are anything but meaningful insight mate, they are nothing but short sighted and only reaction to “todays” headlines. And yet those people ridiculed anyone who maintained that this was a correction after the crazy post covid gains. These people need to be exposed for the constant nonsense they preach like 10% but Christmas/ dead cat bounce and all their idiotic ideologies.
Iceman, like it or not, commentators on here have probably saved many FHB’s multiple 6 figures since late 2021 and are continuing their great work rescuing what may have been a life debt laden servitude.
This will only add to their savings over the coming year(s).
Granted the environment we’re in, it’s never been easier to see the freight train hurtling towards us, but your last ditch efforts to salvage the unwitting doesn’t go unnoticed.
Nevertheless, it’s amusing to watch you try.
Big thanks to:
Brock Landers
Miguel
IT Guy
RP
Rastus
Dumbthoughts
Jfoe
J.C
HM
and many others!
As a FHB, these contributors have certainly had an impact on my decision making.
Congrats FHBtears, and long may it continue! 🍻
Mate, if you predict the same thing every day for the past decade, you’re bound to be right atleast once. So there you have it….On the other hand many have listened to the nonsense doom proclaimed by the DGms and have never bought thinking “prices will go down” Prices have essentially reset to covid levels, so everyone that didn’t buy before then thinking prices will come down are still worse off throwing money away renting.
Also, I’m not trying to or need to salvage anything - the trend is already upwards albeit marginally. Your lot of rescuers have so far WRONGLY predicted 10% by Christmas and more hikes, in fact wholesale rates have actually dropped so I feel like it’s you trying to salvage something here. So if you think you’re a “rescuer” good luck with that title.
As far as I am aware only one or two commenters have promoted the ‘10% by Xmas’ concept.
I cannot recall any unequivocal guarantees they wouldn't...
They'll be a few now of course!
Convenient fishbowl memory.
It was only a month ago that ANZ's infomercials were predicting both house price rises AND an increased OCR. They have now walked back both.
Why?
ComCom needs to investigate this behavior as it is economic b.s. that house prices would rise while interests were going up while in the background the economy was contracting.
If ANZ is found to have been talking b.s. to enhance their own financial position, then not only should they be fined, they should also have to refund any and all excess interest collected while also making capital repayments against the loans of equivalent amounts of all people who got sucked in by the higher for longer b.s.
As most banks, with some notable exceptions, went along with the economic nonsense (based on no valid evidence or past behavior), once ANZ is pinged, the remaining banks should be gone after if they do not make similar apologies.
B-b-b-b-b-but I thought it was borrower beware. You know, when the banks dropped their test rates to 5.5% and lower in 2021 for example. Borrowers should have known interest rates couldn't stay low forever. It's not up to the banks to be prudent in their stress testing methods or to apply their wealth of knowledge and experience to prevent the further inflation of credit fueled asset bubbles.
It's the borrower who should have studied macroeconomics before taking out a loan.
The CCCFA says something along these lines (words from ComCom):
Lenders must exercise the care, diligence and skill of a responsible lender in all its dealings with borrowers and guarantors. This includes when advertising, before entering into a loan, and in all subsequent dealings relating to the loan or guarantee.
As many of the bank's economic utterances are nothing much more than "infomercials" then this conduct is advertising. And the CCCFA applies.
Thus it is seldom a case of "borrower beware". It is more a case of "bank beware" that they must show they have exercised care, diligence and skill at all times.
Everyone is entitled to believe banks are exercising their care, diligence and skill at all times. If you find out they haven't been - a case can be brought against them.
If the bank has tested people at 5.5%, put them on a 12 month fix, only to have the customer refix at rates over 6%, then it sounds like the bank may have failed to exercise care, diligence and skill of a responsible lender as per the CCCFA.
Sure, it's standard bank practice to test xx% above the OCR/carded rates, the only logical reason is to increase the number of dollars lent out. Since all borrowers should be subject to the same benchmark, what benefit to a borrower does a 5.5% vs 9.5% test rate provide? Why not test borrowers at 2.5%?
"B-b-b-b-b-but I thought it was borrower beware. "
Warnings were given by the RBNZ governor on the elevated house price risks.
1) Feb 2021: https://www.stuff.co.nz/national/politics/300238808/reserve-bank-govern…
2) March 2021: https://www.stuff.co.nz/business/124430525/adrian-orr-frets-over-soarin…
3) Nov 2021: https://www.rbnz.govt.nz/hub/publications/speech/2021/speech2021-11-02
4) Nov 2021: https://www.1news.co.nz/2021/11/24/first-home-buyers-encouraged-to-wait…
If borrowers chose to ignore those warnings, that is entirely their choice. Those borrowers who borrowed large amounts are free to choose, yet they are not free to choose the consequences of their choice.
People who borrowed large amounts at or near record low interest rates may now find themselves in cashflow stress and mental stress. There is only one person responsible for the borrower getting themselves into that situation and that is the person who voluntarily chose to sign their name on the mortgage contract and agree with the terms and conditions of that mortgage contract with their lender.
People are also free to chose to pay more for a quality fridge, or to do their research on the cheaper brands.
Yet if people choose to buy a cheap and nasty fridge, and it craps out in 13 months then the retailer is still on the hook.
The difference is we have a consumer guarantees act that prevents the customer from being out of pocket, the same doesn't apply to mortgage lending unfortunately. Banks will take this to their advantage.
"The difference is we have a consumer guarantees act that prevents the customer from being out of pocket, the same doesn't apply to mortgage lending unfortunately"
I understand that you want to see changes in existing laws, rules and regulations and are an advocate for such changes.
There are existing laws, rules and regulations currently in place. People can choose to act within those current parameters or choose to operate in a world in which they wish to see but is not current reality.
People can choose to challenge existing laws, rules and regulations to have them changed, but choosing to act under those desired rules which are not in force (and may never come into force), can lead to some consequences which may be undesirable.
Can’t expect all potential borrowers to have strong understanding of economics, but we can expect banks not to be mis-selling….which if proven should be strongly punished
.... completely agree it's a b s con job... hurting a generation of young people.
Much of our mainstream media are just mouthpieces for property spruikers. Always quick to spin any drop in prices as 'easing', or any increase as the market 'springing back to life'. The biased coverage just takes my breath away.
Pretty much all of them are heavily reliant on property advertising revenue, plus a decent chunk of readers who get off on property spruiking propaganda.
Yep. Just look at all the talk around "GREEN SHOOTS!" and "THE PROPERTY MARKET IS ON THE UP AGAIN!" all around spring time, where property usually gets a bounce. But the bounce appears to be like that of a shotput instead of the rubber ball they were hoping for. As always, the availability of credit dictates house prices.
The thing is how often are they right and how often are they wrong when these economists predict the future. . It seems flipping a coin could have been more accurate.
A good article would be to compare what various economists and banks have said in the past, and how it compares to what actually happened, and see how many of them are accurate..
Testing my green tick.
Apart from supporting this awesome informative platform, the resident Hall Monitor will also be pleasured ✅
😂
And a beautiful green tick it is Sir
More green ticks currently than green shoots LOL
NACT will bring housing market back to life !
They don't need to do a thing if they don't stop another 200,000 people a year coming here. How people on here think we can have that many people pouring in and not have house prices going up is beyond me. Rents will skyrocket to start with because they can change quicker than you can build a house and it just pushes up the whole market as investors get back in. The slightest hint from the RBNZ that the OCR is going to fall and its boom time again.
I’m lost for words….
If rates get cut in an any meaningful way, anytime soon, something has gone seriously wrong, there will be a boom, just not the one you’re hoping for.
Good grief.
Another 200,000 coming here on work permits expecting to gracefully land jobs in a contracting job market. Unemployed New Zealanders won't take issue with being drowned out by other applicants - no, not at all.
Reality check - Immigration will head down soon enough.
No they won't.
NPS-UD, MDRS, updated Unitary plans favoring high densities, etc. Supply will continue increase as it has done since 2016 in Auckland with their new Unitary plan.
If you doubt it ... Be the first to prove me wrong.
This comes as absolutely no surprise.... house prices are already far too high for where interest rates are. I'd expect them to be significantly lower than they are currently. We have a $380k mortgage and are paying close to $2400 a month in interest. Even that is insane. They need to drop another 20% at least.
Yep, house prices in relationship to the cost of money is ridiculous and is totally unrealistic.
Expect listing inventory to grow exponentially as owners want out in these tougher times.
There is huge pent-up supply just waiting…
They will Nats-Act-NZF only real economic plan is to import more peeps and cut taxes.. which results in increasing inflation and propping up house prices in the short term.
Trouble is that winston has ensured that the cash for nats tax cutsneeds to be coming from public services/ infrastructure budget cuts and cutting heads in govt govt too..
Result will be us petting more immigrants into a country with less and less spare (overpriced) houses and with worse public services and infrastructure... the outcome of which will be a public backlash to cut immigration and spend more of what we dont have on services etc (example solution is auckland council plan to charge for road usage to reduce peak hour congestion and get more from what we have now)
Its not exactly rocket science. Ultimately the true state of the economy will be laid bare and will have to be fixed by a natural reversion to its natural state..
That will all result in opportunity . Just not for tradies, real estate, developers, and bankers.. but for a new generation of productive export businesses.. there will just be a downturn for a few years whilst we work through it
60% of Aucklanders are born overseas - that stat kind of blew my mind. Also, no one has ever stopped to ask the public what role they see immigration playing in terms of our economy, population growth, etc. It's just foisted on us with no consultation. I don't live in Auckland but I grew up there, and whenever I go back to visit family I am shocked at how much it looks like another country. And before you all jump to shout how racist, is it racist to want to feel like you're in New Zealand when you're still in New Zealand!?!
Also immigration is experienced differently depending on what group you belong to. My family are facing insane upward pressure on rents and increasing competition. For a property investor it probably looks wonderful, more demand, more ability to rort.
Also, don't we have some kind of obligation to support our own young people to have families instead of just mindlessly importing more bodies? We have friends who are now not going to start a family because they need 2x big incomes to pay their massive mortgages (they bought in 2021 at the peak). The reason they bought then, because they wanted the stability to start a family. It's pretty tragic really.
I liked Stuart Nash as immigration minister, things made sense then.
I don't like any of them. They're all addicted to low skilled migration to fuel our low productivity economy. It's the one thing that seems to have cross party consensus.
It’s actually a morbid form of self destruction.
Previous generations in bygone years came to NZ, propagated in this fertile land. Built communities and families. Then as time has gone on, through lack of foresight and intellect, they have unintentionally, implemented policy, rules, environments where their own offspring will not and can not breed in the toxic habitat that has been created. They therefore have imported foreign species that are well adapt to this habitat and will successfully propagate. Ultimately out-breeding and displacing the existing species.
In the matrix the first one says humans are like a virus destroying the earth.
Whilst noting the somewhat racial overtones to this, there are legitimate questions around scale of immigration now being asked in many countries. NZ doesn’t have the culture to have difficult conversations or debate these intelligently sadly.
One point to consider, many kiwis have their offspring overseas and return to Nz. 2 of my neighbours had kids overseas before returning home - those 5 kids are kiwi citizens and just as entitled to be here as you
More listings to offload, and interest rates remaining higher for longer. As the flipper tax gets rolled back with the new Govt, the number of listings will only increase. More listings, less buyers who can meet the banks lending requirements, its easy to see prices continue to soften as the tax bills of early 2024 start to bite. Foreign buyer bailout blocked by Winne P, and mas importing of new workers is only going to pad up rental income with ten deep to a 3 beddie. As longs as the banks continue to play extend and pretend on peoples outstanding debts, this charade will continue.
Cant help wonder which Bank will choose to start shooting the over leveraged first....?
Adding some context to the article. I am in the midst of settling on a property having rented 2 bed / 1 bath in AKL for the last 9 years. Family of 2 parents / 2 kids (one about to start uni).
The property (4 bed / 2 bath 200 sqm/ 400 sqm land, Mangere Bridge) I am purchasing was initially listed at $1.4+ mil as the neighbouring one sold for $1.5 mil in 2022.
This then dropped to $1.3 asking, then $1.226 mil.
I am buying it for $1.166 mil.
With my aging parents wishing to move in with us, and my child having grown up in a squished unit most of their teen years, I couldn't wait any longer - as they say circumstances dictate so.
The market is certainly stagnant in my eyes.
There is certainly movement when priced, right. Serviceability remains the barrier.
There are some suprising results (gobsmacked):
43B Golf Road, New Lynn/Titirangi - sold at auction for $1.505 mil
https://www.barfoot.co.nz/property/residential/waitakere-city/new-lynn/…
12A Links Road, New Lynn - sold at auction for $1.366 - a reno of paint, bath, carpeting from $945k back in June 2023
https://www.barfoot.co.nz/property/residential/waitakere-city/new-lynn/…
I still think I may have overpaid by $100k but given my circumstances and what is available, I saw value.
I've seen a few auctions go crazy recently, buyers paying 30% over RV in Christchurch, (1st homes and 4 bed two bath 1950s renos) well beyond vendors and agents expectations. See https://harcourts.net/nz/office/avonhead/listing/ah6296-22-westburn-terrace-ilam-canterbury Sold for $1,476,000 the other day. Makes 43B Golf Rd in New Lynn look like good value. Its a fickle market, depends on how many are after one property, and some getting passed in and becoming stagnant listings. Not a lot of buyers at the current interest rates, but hey you only need 2 bidders duking it out!
New Lynn. 1.3m. People really are stupid.
Chatting to a real estate agent in Auckland tonight and she reckons a huuge number of listings coming through early next year. So much so she almost shoed me out of the open home, obviously fairly sure of her wages... Interesting times.
When market condition change to be favourable to sell, there must be a lag of at least 3 months while owners prep their properties for sale or give notice to tenants..
This is a result of many people coming to realise the OCR isn't a full control lever for mortgage rates, and there are external factors outside of their control. They come to realise this, they weigh options, and decide to exit before things get worse if they can;t sustain the mortgage for the medium term. That or they want to offload now and try and retain some capital gain since purchasing and often use this to pay down another mortgage where it is manageable at the current interest levels, factoring in current and possibly higher interest rates in the near future. I have to laugh when seeing the property investors FB pages quibbling about if the market is picking up again and clutching to the thinnest shreds of hope, egging each other on etc.
Yep. When the flipper tax is dropped to 2 years the rush to the exits will be on!!!.
ANZ has to be one of the biggest flip-floppers. I have noticed quite a few spec home builders popping up and doing a lot more advertising. Not sure what to make of it https://www.subdividesimplified.co.nz/builders-auckland
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