Barfoot and Thompson's January sales figures contain mixed messages with sales numbers and new listings both rising, but selling prices falling sharply.
The real estate agency, which is the biggest in the Auckland market, sold 504 residential properties in January, a considerable improvement (+17%) on January last year.
However January's sales volumes were still well below the long term average for the month, and were down 37% on January 2022 and down 54% on January 2021.
New listings were also up, with the agency receiving 1221 new listings in January, up by a third compared to January last year.
January's new listings were the second highest the agency has received in the month of January in the last 10 years.
That helped to push the total amount of residential stock the agency had available for sale at the end of January to 4618 properties, down just slightly (-3%) compared to January last year.
That means Barfoot is starting 2024 with the second highest number of properties available for sale in more than 10 years.
Prices headed in the opposite direction.
The average price of the residential properties the agency sold in January was $1,083,487, down by $97,812 (-8.3%) compared to December last year, and down by $195,160 (-15.3%) from its December 2021 peak.
The median selling price in January was $966,500, down by $73,500 (-7.1%) compared to December and down by $273,500 (-22.1%) from its November 2021 peak.
It is not unusual for median and average selling prices to dip at the start of the year but the size of this year's drop was a surprise.
The high level of stock on hand means potential buyers are starting the year with plenty to choose from and the weaker prices that were evident last month suggest they should be able to negotiate a good deal.
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164 Comments
Wow, that's a serious drop !
BTW,
Barfoot and Thompson's January sales figures contain mixed messages with sales numbers and new listings both rising, but selling prices falling sharply.
There's no "Mixed messages" with higher sales number, more listings, and falling prices. I have warned long ago, that dropping prices with higher sales volume is an indicator of real weakness, not dropping prices with few sales.
It’s almost like continued high prices combined with high interest rates is making mortgages severely unaffordable. Or something.
Time to break out the Tom Petty:
”I’m Freeeeeee! I’m Free Falling!!!!!”
Bumpy ride!
TTP
The rollercoaster teaser drop is now past us - the real bumpy ride down begins.
TTP is starting to feel the bumps.. (his head must hurt)
I've been calling the market patchy for quite a while, DGM, which is exactly what it is - despite the gains in the HPI.
My head is fine but, clearly, yours has a faulty memory.
TTP
You ridiculed me on the corelogic article yesterday for calling the market patchy. A doom and gloom merchant was what you called me if i recall. And now your claiming you have been calling the market patchy for quite a while??? Whatever credibility you had with me is now lost.
Just ignore him. He’s a fraudulent troll.
Don't you feel sorry for him... the side effects of one's head being bumped around...(the effects are quadrupled when there is extra space)
TTP you are full of the brown squishy stuff
DGM myself and others have called this thing from the top while you have puked your guts spriuking
You have no credibility less then bank economists.
That dip looks a lot like a bull trap
It has the right shape and duration. We'll see.
It is pretty obvious that the ultralow interest rates during covid were the main driver to the house price bubble. Now prices have crashed, but few in NZ wants to say the 'c' word. It is no wonder banks are so dovish, and want interest rates to fall again to get house prices rising again so they can lend more. There is still so much FOOP, despite hearing one property expert saying FOOP was over and FOMO was returning.
that little blue worm in the graph above looks like it's turned downwards ...
But Jacinda said she didn't want house prices to fall, so everyone predictably piled in with a gilt edge guarantee. Jenee got it.
https://www.nzherald.co.nz/nz/don-brash-prices-have-to-fall-but-politic…
Participants in a popularity contest avoid being the messenger of bad news that will jeopardise their chances of winning at the next popularity contest.
Tony A, One Roof and several spruikers here - not to mention bank economists - should really be ashamed of themselves.
Simply shameless.
Population up 180k in the last 12 months (arrivals minus departures 160k, plus natural increase 20k)
How many houses will be needed to house them? 60,000? (3 per house)
Supply/demand, prices are going to rise....
Yep they probably will. But not this year (or at least not much). Maybe from mid-late 2025.
The elephant in the room is how much they can afford to borrow. Who doesn't want to buy a three beddy.
Supply is shooting ever higher prices are heading down again as vendors become increasingly desperate.
But it isn't sustainable, because they also need to spend extra billions on infrastructure and services.
This is the supply of houses that was holding back for the election results
I think 4 per house is your base point, 2 couples or a typical family. About 50,000 dwellings consented the year prior. The question is how many were completed, and is immigration going to continue at this pace?
3 million people in NZ would like to own a Ferrari , surely prices must rise!
They won't stop. There are too many vested interests supporting them. Like Trump - a portion of the population will believe everything they say and that's all that matters.
Yep. I am under no illusion that they will stop!
Huge vested interests and $$$ at stake.
Boom. There’ll be some serious schadenfraude on this message board shortly.
Surely good news for the next generation, but I sincerely hope the real pain people are experiencing subsides soon.
I think the enjoyment many people take from this type of news is often forgetting the real mental health problems financial distress can cause people who are facing difficult times.
Our house prices are still too high, but I hope this slide eases soon for the sake of people doing it rough. Not the investors, they knew the risks and rolled the dice. I’m referring to the first home buyers who worked hard for a deposit and were unlucky enough to buy at the wrong time.
Well put, here here. One really feels for some FHBs who bought in the last 2 years and are in to negative equity. Perhaps more critically, loaded up to their eye balls in debt which is having to be refinanced. Egged on by the shameless pro-property media.
I have heard a few anecdotes that are pretty scary, of FHBs refinancing at higher rates. With low deposits and equity, we are talking about refinancing at circa 7.5%. One couple jumping from weekly payments of circa $900 to $1300, with a weekly household income of about $2300 and a young baby on the way.
Agree mate. I’ve heard some heart wrenching stories.
I have children who are currently at university who will graduate and hopefully find decent jobs with good pay. They have accrued savings from working crazy hours on part time jobs for many years. They will keep their hard earned savings and benefit from these price drops, because they are lucky enough to have not been born a couple of years earlier. Their lives are being made substantially easier at the expense of the poor young people who lost the birth year lottery.
I find it all really sad for the people who are now underwater. In Nz we can’t just mail the keys to the bank. We can’t just write off our loses! These young people will be ruined.
I think there is a glimmer of hope. If some of these FHBs can battle through the next 1-2 years. I think prices will lift again in 2025/2026, and mortgage rates are also likely to be significantly lower then.
Why should rates be significantly lower.. Remember the reserve banks sole mandate is to keep inflation low
Because the economy is going to tank and inflation will vanish with it.
And note I said 2025/2026
Inflation might even go -neg for a quarter or two as stock in inventories gets liquidated to pay the bills. ... Too much doom and gloom? If the RBNZ keeps the OCR where it is for too long (and I think they already have) then perhaps not.
Indeed
Just noticed 65inch TVs at the big red shed for $700 these same units were in excess of $1k in 2022
You might fit 200 - 250 of those in a 40' container. When shipping costs were running 12k over previous average for a single container in 2022.
That equates to $60 per unit on top of the price premium the supplier was able to get due to excess demand. Both of those factors have fully reversed now. But unfortunately we don't eat 65 inch TV;s.
The problem is that into retirement age, there will be real segregation between recent FHBs who through basically lucky timing will either have some level of comfort, or be way behind their peers.
How will house prices rising again help future generations. Unfortunately house prices have been to high for a long time, kicking the can down the road will not solve anything.
I would like interest rates to go down because people are hurting, however not at the cost of house prices going up. The best way to break this speculation on house prices is unfortunately for people to get burnt, otherwise people will continue to spend as much as they can on housing, because they believe its safe.
If you are in negative equity simply keep paying the loan and you will pay it of eventually. People including Investors and FHB where not complaining that they made money by simply owning a home, they should not be complaining that they lost money either.
Levels of entitlement to free wealth from property are stratospheric, having grown over the last couple of decades. It'll be interesting to watch what politicians with multi-million dollar personal portfolio conflicts of interest might scramble to do to try to perpetuate the status quo.
You talking as if they can ride out the bust, and then they make it back in the next boom, which is just a rinse and repeat of the Status quo.
The reality is, that this boom/bust is not sustainable and things have to change. And the best time to change it is at the bottom of a cycle.
In stabilizing the market, I would prefer to see the Govt. allow some tax relief for these people to get them through, which the money should be there by not having to pay out in other areas going forward like rental supplements as rents, and homeownership, become more affordable.
I recall an interesting monetary approach suggested by the Aussie New Liberal Party (if I remember correctly), that was an amount per person to be used to pay down housing debt and for those without houses to be bond investments. Something along those lines. Per person, not per property.
That would just feed back into the price of land and other restrictions and make everything at least that much more expensive with the next build cycle.
I'm talking about something different so we can manage the price down, rather than manage the price up like we have been doing.
Well, New Zealanders cant just mail the keys to the bank. But holders of a foreign passport can. Leave the house behind, the financed car in the airport long term parking lot, and all it will cost them is the price of a one way ticket back to their home country.
You sure about that?
Best advice you could give them is a good travel agency.
The real cause of pain and misery is the ridiculous price explosion of recent years. The current drop is just part of the process.
Negative equity is bad enough, but even worse they are paying much higher interest rates than they bargained for.
I still feel the RBNZ should enforce 5 year fixed terms for anyone with a low income buffer as part of their financial stability mandate. I fixed for 5 years when I was a FHB for exactly this possibility. After 5 years you are typically in a better situation to handle interest rate changes.
So go back to a planned economy?
Aren’t the banks suppose to manage the risk?
oh hang on… they are lending on loss making investment properties
what could go wrong will go wrong eventually, and here we are
Agree. It's a shame given how perverse our housing market is FHB aren't given access to 3% State Advances Corp mortgages, fixed for 10 years. Still doesn't help the fact a higher principal amount takes many more payrises to chip away at than a lower principal amount, but at least they'll be insulated from interest rate fluctuations from incompetence not of their doing.
But nah that's entitled thinking right there, handouts/welfare like that is for the weak.
100%. Anything to learn from this and help FHB’s who are being financially waterboarded.
Investors and those who are over-leveraged from speculation are a different kettle of fish IMO. They rolled the dice and unfortunately lost. I don’t wish them ill, but believe our support should/must fall in behind FHB’s who did nothing wrong
We managed to find $1.6 billion to bail out a bunch of grey haired investors in a finance company. That sort of money would give 16k stressed FHB $100k to put towards their mortgage. But that was in 2010, allowing for inflation add 40%. So 22k FHB could receive $100k to put towards their mortgage. $130 per week in mortgage interest relief.
Not necessarily suggesting we do that, but usual story we pull out all the stops for the old, crap all over the young, and wonder why there's so much animosity towards Boomers.
The RBNZ effectively managed to find $12 billion of taxpayers' money to bail out property during COVID too.
Add to that, $78 million of taxpayers' money to bail out commercial property in Hawkes Bay in recent times, $778 million of ratepayers' money to bail out wet Auckland properties, $2.5 billion of taxpayers' money to subsidise rental yields each year, more millions in price subsidies, hundreds of millions in taxpayer money to benefit emergency housing owners, taxpayers' money subsidising rates for infrastructure, taxpayers' money bailing out people who chose the wrong insurer in Canterbury etc.
When factoring in the subsidised and tax-advantaged ride we've been giving property - and not even counting failing to enforce taxation on people buying and selling for capital gains - property has been quite the state welfare scheme for older folk in NZ. Especially considering their elders left them affordable housing thanks to huge post-war efforts.
That first para is a really good point. All that money supporting SMEs effectively propped up property too
Fhb’ers did nothing wrong? ….except buy a house it turns out they can’t afford.
so just sell it and downsize.
the whole nation can’t be responsible for maintaining their living standards.
guess what…you can lose with property
You don’t comprehend the situation many young people and recent FHB’s are facing. If you owe more than your house is worth, you can’t just sell it. The bank will require you make your repayments and will not take on an unsecured creditor position for the residual balance.
Even if they could sell, where would they downsize to? Where would they live? The FHB’s I’m referring to aren’t buying waterfront in St Helliers. Downsizing isn’t an option if you’re already on the bottom rung of the ladder.
In terms of your comment about them buying a house they couldn’t afford… cost of living has taken a toll on everyone. Many people can’t afford what they were able to a couple of years ago. Many people are struggling to get by. This isn’t a hypothetical scenario, or a game. People are genuinely hurting. I am happy for you that cost of living pressures clearly haven’t impacted your world.
They bought a house they could afford until they were rug pulled with a 3 x increase in the cost of the mortgage, on a principal amount deemed and assessed to be "prudent" based on the banks own internal workings that apparently factor in long term mortgage rate fluctuations.
They could never afford it. They borrowed into a ponzi. But I agree the banks should be penalised for irresponsible lending.
How about
1. Allow any FHB to hand back the keys with no follow up. They lose their deposit but no further debt obligations.
2. Windfall tax on bank profits at 70%. Used to fund residential construction of state housing and joint equity scheme.
I think the loan document should include the test rate the bank has used to assess the lending, and that becomes the maximum interest rate the borrower can incur during the life of that mortgage with that bank.
But if this problem exists, then have banks been conservative in their lending, and making sure that FHBs can really afford to service that mortgage? The think is that they are wanting more of the restrictions removed, using Kmart purchases as a reason for people being denied a mortgage under the current rules. IMO the rules are there for good reason.
No they haven't been conservative and they haven't had to be conservative because unlike other businesses they actually have very little duty of care towards their customers. It's all about selling as big a mortgage as they can using today's interest rate, and any outfall (according to quite a few on here too) is all the FHB's fault for being greedy.
That would work out worse for FHBs in the long term, any subsidy/support to allow them to borrow more will result in higher prices which is exactly the problem. Restrict lending = prices come down. Make it easier to borrow more = prices go up.
Definitely agree that a reduction in house prices in real terms is beneficial for all. It gives the country a sustainable and positive future outlook while improving equality across the board
However, supporting FHB’s to ensure they don’t end up bankrupt and ruined will not drastically impact house prices, nor will it change lending credit criteria. It’s just offering a small percent of unfortunate people a lifeline so they can stay above water.
FHB’s were in no way responsible for the obscene (and unsustainable) price increases and shouldn’t be tarnished with the same broad brush strokes as those groups who are more culpable.
FHB’s were in no way responsible for the obscene (and unsustainable) price increases and shouldn’t be tarnished with the same broad brush strokes as those groups who are more culpable.
I disagree!
In 2021, the bank eagerly pre-approved what felt like an absolute shipload of money for my partner and I for buying a house. They proceeded to call us fortnightly, mercilessly echoing the urgency expressed by figures like Tony A, Ashley Church and even Jacinda. “Prices will only become more unaffordable!”, “Be quick!”, “Just buy anything now, then upgrade later”, etc.
However, my astute partner refused to borrow the amount of money the bank was throwing at us – thank goodness! Based on our calculations of what we could afford (which included leeway for unexpected events, e.g. interest rate rises), we couldn't buy anything even remotely suitable. We lost hope and continued raising our kids in rentals (one was a tiny, mouldy little hovel). We listened wide-eyed to the insane amounts other FHBs were borrowing.
I think short-sighted and reckless FHBs were a significant part of the problem by pushing up prices for everyone, including prudent FHBs like us. So, would it be fair to bail out those FHBs who got it wrong now that it all turned to custard?
But were they really ‘short sighted’ and ‘reckless’?
I mean they kind of were, but not many people are as switched on financially as some of us here.
And remember it wasn’t just the banks, Tony A etc egging them on. It would have been family, peers etc. All the people at the water cooler and the BBQs
Very good point, HM. If it weren't for my partner, I might have been in the same boat as those 'reckless and 'short-sighted' FHBs who bought.
I had some shaky moments with my partner, with me insisting that the financial experts (who could have more financial experience than Tony A?), bank risk managers, financial journalists of the Herald (and everyone in their comments section), experienced 'real' estate agents, etc., etc., and even the Prime Minister must have knowledge that we don't. And everyone else was saying this is how it works in NZ - take the leap or miss out.
My partner and I have professional careers, but in fields that have little or no overlap with Finance and Economics. (My partner does have an MBA that's never been useful for anything other than keeping our personal finances on track, actually.)
So yes, my post sounded way too judgemental - my apologies. I'll be sure to spoil and appreciate my partner a bit extra tonight.
And I'm also incredibly grateful for having found Interest.co.nz. The sound arguments of many of the 'DGMs' on here were absolutely invaluable.
Great stuff
Couldn't agree more and we were very much in the same boat as you at the time - right down to the kids in a mouldy old flat scenario. I wanted to jump in and not 'miss the boat' but my partner had more sense than that, plus the comments on here did help ground us too (opposed to the crazy articles on Stuff/One roof). We ended up not buying and high tailing it overseas to saner prices, and here we will stay until the situation improves.
The owners of Interest.co.za should be knighted for their contribution to society and the way they oppose the rubbish/criminal property articles on Herald/Stuff/Oneroof. Unfortunately, NZ is probably more likely to bestow that on the likes of Tony A.
Did you guys high tail it across the ditch to Australia? We've been giving that much consideration, but the kids are now happy and integrated into schools, friendship circles and after-school activities. We've got stable jobs in companies we like. Still, with residential property here such a disaster, it might be our best option to ditch this joint too. Good friends moved to Perth a year ago They're loving it and sending us lots of pics and encouragement to follow them there. We might join them next year should we still be 'homeless' in NZ.
Both of my children are in Aussie and I've encouraged them to stay, especially when the country was run by Comrade Ardern and her socialist 'yes men'.
In the final days of the Labour Gubbermint there were lots of calls for extortionate taxes, death duties - and capital gains taxes to punish those that dared make money on the sale of their house.
No mention of course what might happen if there was a catastrophic decline in the property market and the govt had to cough up billions in losses.
"I mean they kind of were, but not many people are as switched on financially as some of us here."
If people choose to remain uninformed about money, and personal finances, they will face the consequences of their choice to remain uninformed about money and personal finances.
I like how despite the bank eagerly wanting to lend you a shit tonne of money, it's the young FHB that didn't study macroeconomics and come on interest.co daily that were "short sighted and reckless".
Hmm. What of the banks that derive an income and do this on a daily basis with access to swathes of data, were they not short sighted and reckless?
Excellent point, Nzdan. See my response to HM above.
Do you think there's any hope of getting the banks to pay for the spilt milk (and blood) though, rather than bleeding any potential bailout money from taxpayers (including ones like my partner who made the right call)? I suppose not. Sigh.
No. A bailout of the banks won't wipe a cent off the debt of these FHB, it'll go towards ensuring Boomers term deposit and cheque account balances are kept safe and liquid. Cruel irony would be if any of these Boomers bank accounts contain funds derived from the very FHB buying their surplus properties at peak bubble.
I'm not thinking of a bank bailout, heavens no. I'm thinking whether there are ways to get the banks to cough up some of their ill-gotten profits and back into the pockets of people they should have never lent to!
The only way this could be enforced is if the Government introduced some heavy legislation that basically says:
"the bank will not hold mortgage debt for an owner occupier that is a) above x times their annual income at loan application and b) is interest bearing to above x% of their income at loan application. If in breach, the bank shall reduce the interest rate or reduce the principal amount to meet the above".
Simple...send money to offshore banks.
Some of the people who you call “reckless” and “short sighted” have lost their lifesaving.
Well done on not being in the same boat as them.
MY OPINION is that offering some humility, understanding and empathy towards those not as prudent as you were is just basic human decency.
Offering humility, understanding and empathy towards those FHBs is not nearly the same as helping to bail them out. By the way, are you gifting any money to these FHBs who are in trouble? Or are you simply hoping all taxpayers would be happy to chip in?
I also can't help but mention that many mortgage brokers had lots of 'useful tips' on how to present your mortgage application in, let's say, the best possible light. E.g. claiming a buddy wanted to rent a room in the house for $X per week. I know of home buyers who did themselves no favours by the amount of misrepresentation (lying is such an ugly word) they did on their applications.
enjoy the weekend
"I also can't help but mention that many mortgage brokers had lots of 'useful tips' on how to present your mortgage application in, let's say, the best possible light. E.g. claiming a buddy wanted to rent a room in the house for $X per week. I know of home buyers who did themselves no favours by the amount of misrepresentation (lying is such an ugly word) they did on their applications"
That would be mortgage fraud. Terms and conditions in mortgage contracts by banks address that issue. If detected by the lender, then the lender has contractual remedies. Remember that the borrower willingly signed and agreed to those contract terms.
"Some of the people who you call “reckless” and “short sighted” have lost their lifesaving"
Close relatives lost their owner occupied home previously and financially lost everything. They never fully recovered financially and stayed in social housing until they died. Their estate didn't have sufficient funds to cover the cost of their funerals and their adult children had to cover that cost. Hence my attempts to highlight the extremely elevated house price risks, so that owner occupier buyers could make a fully informed buying decision and avoid the same financial outcome.
Many other commenters on interest.co.nz highlighted the extremely elevated house price risks, so that owner occupiers could make a more fully informed decision on their biggest purchase rather than accept the one sided narrative of those with their vested financial self interests. Many with their vested financial self interests attempted to discredit the warnings by using negative labels and bullying tactics.
There were warnings by the RBNZ Governor in February 2021 of the house price risks.
Many have chosen to dismiss those warnings and buy. Many were oblivious to the house price risks and house price risk warnings - they did not know what they didn't know. Can’t really help those who choose to remain uninformed.
Unfortunately, as in numerous other house price bubbles in history, there will always be collateral damage.
A lifetime of good financial decisions can be entirely undone by one single decision.
Those who fail to learn the lessons of history are doomed to repeat them.
People are free to choose, however they are not free to choose the consequences of their choice.
Unfortunately none of us are psychic, but it's not that difficult to pick a bubble. Chicken Littles here saying that the real estate industry is doomed will be proven wrong, and while the industry isn't in great shape, there will certainly be areas that are going to outperform.
The trick is to find them.
"it's not that difficult to pick a bubble. "
This is what some commentators on interest.co.nz were saying at the peak. They may or may not have vested interests. The point is that these commenters are unable to see the impact of their advice at that time on those highly leveraged buyers in late 2021 - 2022.
Imagine an owner occupier taking their advice at the time, using ALL their life savings (incl Kiwisaver) and taking on large amounts of mortgage debt to purchase an owner occupier residential dwelling, who is now in cashflow stress, mental stress and could lose their owner occupied home in a mortgagee sale, and now face life changing financial circumstances which result in a deterioration of lifestyle at retirement. Many have experienced a significant loss in their equity deposit (some may even be in negative equity) and facing cashflow stress.
Names omitted intentionally (but these commenters are still active on interest.co.nz. 2 of these commenters have commented on this very article)
a) 9th Nov 21, 2:38pm
"I have always looked at this from the opposing direction - the risk in not owning a property? If you do not own a property you are short, not even square, but short"
b) 9th Nov 21, 5:52pm
"Or maybe right the opposite, don't hesitate, be brave and go for it, you'll be fine"
c) 23rd Nov 21, 8:52am
"It makes absolutely no sense for a couple like this to bank a capital gain now rather than wait two years and avoid 90k in taxes. The market is not going to crash 10% in the next two years."
d) 9th Nov 21, 2:38pm
"locally, I can not see anything in the near future that would decrease these current values."
e) 14th Oct 21, 11:25am
Shrewd investors will capitalise on perceived price weakness - cementing their position for the next market upswing.
Well located property remains a prime investment for the long term. (But you already know that.)
If these commenters did not have any vested financial self interest, then they didn't know what they didn't know. They didn't know about the extremely elevated house price risks.
I've dabbled in property for decades and got caught out when mortgage interest rates went to 23% many years ago. I took it on the chin and had to sell a property to stay solvent. C'est la vie. Live and learn.
I've purchased some bare land a few months ago in an area I know is going to boom, got a great discount and am just about to start building a new house. 6 years of socialism was enough to push anyone over the edge, but I bet on Labour getting thrown out and the economy picking up.
All these bearish, depressing comments here make me think I've hit the nail exactly on the head. Be a contrarian, buy in gloom, sell in boom.
Problem is going by the number of thumbs up on here, the doom has only just got started. When are you picking the "Boom" ? I don't think it has been that hard to pick the market bottom, but how long will the recovery actually take ? there has been years in the past where the market was flat.
Depends on the area. Those with potential future development will be a pretty good bet, and on the outskirts of Auck would be a good start. Labour let lots of people into this country, and most will want to be in Auckland because that's where the action is.
I've bought land, the subdivision has sold out, and the one over the road has 2 lots left.
"it's not that difficult to pick a bubble. "
Every person has a different lived experience that influences their perspective. Not every person knows what you know. Not every person has had decades of experience buying real estate - especially not first home buyers where this is their first time purchase.
For the purposes of others that have had a very different lived experience, with different viewpoints and in different stage of life, what did you see that others didn't? What did you see that made you think that house prices were in a bubble?
There were a few clues.
Lots of enthusiasm, some of the rubbish that was selling surprised me, prices kept on going up, fuelled by low interest rates. I was looking at bare land at the time and remember everything was selling. The last place we sold we got $950k at auction more than the agent estimated which was very surprising indeed.
It rekindled memories of the 1980's stock market boom and bust when punters bought anything.
But how do savers get ahead?
Maybe there were many that were holding out hope that a change in government would somehow change the fundamentals of the housing market, deluded as that view may have been (a change of government means absolutely zero to what amount a mortgage payment is).
Reality now kicking in as people realize no one is coming to save them from an unaffordable mortgage, so might as well sell up to stop the bleeding.
It will change the fundamentals, just with a lag. If Labour were still in power they would be spending more on bureaucrats and empowering bureaucrats at all levels to get in the way, clog things up with extra paperwork and generally slow up processes. So the effect on the inflation rate would be to increase prices by increasing govt spending (putting more money into some people's pockets) and increasing rates, fees, rents and every other govt and local govt controlled part of the economy (taking more money out of some people's pockets). This would cause the Reserve Bank to hold off on interest rate cuts.
But we now have a National govt which is all about reducing govt spending and reducing bureaucratic interference with the working of the economy. So there will be a negative effect on spending in the economy due to reduced govt spending and a positive, downwards effect on the internal, structural portions of the inflation rate, albeit with a lag.
Countering this downwards effect on the inflation rate is immigration and Houthis in the Red Sea. Higher rents and higher oil prices. These increased prices no longer countered by wage increases. So we will be seeing increased stagnation and I would say a Reserve Bank that will act too slowly to counter the gathering disinflationary forces.
What I'm seeing is that things are pretty flat out there and our institutions are way too slow and conservative to head off what's coming. So they'll have to move fast in the second half of the year to avoid collapse. If they don't move fast then the pendulum will move a lot further the other way and interest rates will have to come come down very fast indeed. If they can't come down because the US interest rates are still buoyant then we have a real problem. Then it will really matter what type of govt we have - one that can turn on a dime or one that can't get out of it's own way.
What strange analysis? It like you started with the premise that it would be worse under Labour and then tried to construct an argument as to why. Weird.
"It will change the fundamentals, just with a lag. If Labour were still in power they would be spending more on bureaucrats and empowering bureaucrats at all levels to get in the way, clog things up with extra paperwork and generally slow up processes. So the effect on the inflation rate would be to increase prices by increasing govt spending (putting more money into some people's pockets) and increasing rates, fees, rents and every other govt and local govt controlled part of the economy (taking more money out of some people's pockets). This would cause the Reserve Bank to hold off on interest rate cuts"
OTOH, a lot of those people selling may have held for a significant amount of time - and it's all still tax-free profit baby!
It's interesting talking to friends/family invested in property - some of whom probably should but don't want to sell because they'll realize a loss from peak equity, rather than an actual loss.
They also genuinely believe that it can only go up, no matter how crazy prices are, so if they hold a bit longer they are guaranteed to get that "lost" equity back.
House down the road from us for sale, large flat corner lot ideal for development. 3 years ago a developer would have snapped it up for crazy money, now a developer probably wouldn't have to pay any more than a FHB. I wouldn't be surprised if they have "lost" 50% from peak.
"3 years ago a developer would have snapped it up for crazy money, now a developer probably wouldn't have to pay any more than a FHB. I wouldn't be surprised if they have "lost" 50% from peak"
That is how land prices fall for the next developer who purchased land at 50% lower price due to market conditions.
This might lead to lower total construction cost of the newly constructed dwelling (e.g 3 - 6 townhouses on one site where previously there was a single residential dwelling with a large back yard.)
How many of them have been buying and selling specifically for the purpose of making capital gains, too? That makes those gains taxable under NZ's Income Tax Act, yet we've seen rampant tax evasion in recent decades. A character issue.
If it's that easy why aren't you doing it? The alternative is a CGT, which in the current climate would see the govt. coughing up billions in losses.
All dem gains over the last 9 months
...aannnd its gone.
It's all already been spent on lattes, caravans and cruises.
People have been reading too much into monthly figures. The trend has been flat for a while now.
Yep effectively flat over the past 4-5 months. So much for prices taking off again lol
Yesterday when there was an article about average prices up, many here were saying HPI is the only reliable source for prices. However today based off of this article they'll be all about these average sale prices and forget about the HPI... lol
Core logic bases statistics on settlment, meaning a 2-3 month lag in their data. That $4k push was from ~October last year.
It's certainly an interesting number based on up to date data, but a glance at the graph shows you it's a very noisy dataset and should be taken with a pinch of salt.
Yep - ignore the $ figures and focus on this part:
However January's sales volumes were still well below the long term average for the month, and were down 37% on January 2022 and down 54% on January 2021.
New listings were also up, with the agency receiving 1221 new listings in January, up by a third compared to January last year.
Thank god somebody said it.
Average price is back to what it was in July/Aug/Sept after a huge jump that lasted a couple of months.
Anybody know what distorted the prices in Nov/December?
Yep. Lots of false and irrational and misplaced hope off of that election result.
HPI is the better measure, but it’s stale compared to this fresh monthly data, which wont impact the HPI fully for months.
That sure is some recovery.
Housing market is on a downward spiral.. high rates and jobs ads down will dictate the outcome..
The high level of stock on hand means potential buyers are starting the year with plenty to choose from and the weaker prices that were evident last month suggest they should be able to negotiate a good deal.
If buyers got money to buy...But I don't think people actually realized how big the impact of Evergrande's bankruptcy in China is going to be on New Zealand's economy and property market.
All the foreign money is flowing into aussie..
Nz will start to feel the vacuum soon
And as usual, no mention of this data from Granny.
There was a half page article yesterday reporting the Corelogic data headlined "House prices on the rise in most suburbs nationwide".
Oh...poor Granny really does have dementia.
Where are these green shoots gone - or maybe they never existed in the first place? Quite a different environment to Australia, where the housing market is looking like going up again - which is unfortunate for the longer term health of the AU society and economy.
It would have been the same here if the foreign buyers ban was lifted
We know FHB share of purchase is at all-time highs. Also investors are net sellers. This means more properties selling at the cheaper end. Still, it's a large drop. HPI figures out in 2 weeks will be telling!
Market is performing entirely as I expected......↘️✅
Someone should write a book on all this nonsense. With a focus on showing up all the usual suspects. I am not bad with a pen, nearly had a book published once by a major publishing house, perhaps I should give it a go.
My personal favorite on here was "only window of opportunity to buy was August to October".
😂😂😂😂😂😂😂
Yep. Clown car that one.
I have visions of a clown car, HW2 driving with massive shoes and Nifty honking a horn on the other side, TTP selling tickets to the big top, and a bunch of tattooed hangers on, hanging around in the shadows..... and a tiny truck with two small elephants in it.....
Out in the carpark an ex bank economist sells snake oil
Its over Moby, nobody listens to techno.....
.
David should down load the entire comment section from the last 10 years and get AI to write about property based on that.
May well show the int.co readers picked it!
SOME of us NAILED IT!!!!!
we where larfed at by the "Its time in the market not timing the market crowd....." - all spruikers
Hey ChatGPT who on interest.co.nz picked the top?
Your not larfing anymore.......
"Someone should write a book on all this nonsense"
Yes, the lessons should be learned for the future, otherwise the lessons will be lost. I have been maintaining a personal blog monitoring the developments on the property bubble in NZ since 2017 to record how the housing bubble occurred in NZ.
I don't want to write a book, but happy to share some information from the last 7 years on how the events occurred.
Unfortunately that would only be half the story. There are many dots to join going back to at least 2000.
In the end a story of the housing bubble is really only a chapter if one were to accurately write the entire story of economics and capitalism over the same period.
It'd be a massive task to put into layman's terms so the general public could understand. It really is needed though because it would appear none of the experts are willing to learn the lessons.
You need to go back to 1990s when the fourth National government quietly changed the tax rules to advantage rentiers.
"You need to go back to 1990s when the fourth National government quietly changed the tax rules to advantage rentiers."
What tax rule changes in particular are you referring to?
Just wait until July when the Brightline is wound back, and all the stock purchased since 2020 is freed up for sale.
100% agree. Specuvestor's are focused on avoiding tax at all costs so from mid year listings will be enormous as brightline threshold drops. Hearing from friends in the industry that there is a good wave of listings coming in Feb.
Bring on financial gravity.
Question 1: Is it just high mortgage rates constraining the Akl market? Or are other factors involved?
Question 2: Where is the Akl price surge that everyone from the RBNZ on downwards were predicting with the (temporary) surge in immigration? Is just delayed? Or was it a pipe dream?
Question 3: Will rents rise, stagnate, or fall, from here?
Question 4: What effect will the NACTF policies have later in the year?
Question 5: If the RBNZ cuts earlier than August, say just 0.25%, will it have any effect?
1. Mainly.
2. Pipe dream of the vested interests. Has undoubtedly provided some limited support
3. probably rise a little.
4. Limited. Arguably change to the RBNZ’s mandate creates greater headwinds for the housing market. Tax changes will offer only minimal support
5. minimal. Perhaps a tiny bit of psychological support for the market
Question 4: Could go either way. Removing brightline could result in a lot of places on the market. Likewise if prices don't go up, people no longer have a reason to hold on for their National saviour, so could sell.
1. Definitely other factors too. Interest is secondary - it's the debt stupid (not you) and the inflated prices.
The next phase of the house price crash was so obvious and will continue until prices drop to a place where average wage families can afford to buy a home. Unfortunately many people believed the nonsense that house prices could only go up and rates couldn’t go above 3%. Many places have already seen 20% drop from highs and monthly mortgage payments have skyrocketed anyone over leveraged will be in huge financial difficulties as the crash accelerates.
Wow! That is quite a drop. I picked that we had seen the floor last year and would see static prices through 2024. I am not too proud to admit that I might have got this one wrong.
I can appreciate the humility here. Kudos.
As foretold, listings are heading to the moon and buyers are still restrained due to 9% stress testing
The 'dead cat bounce' has just been perfectly illustrated.
People may recall me saying that repeatedly around October / November. I got some stick from the usual spruikers. Turns out I was right once again.
Yes the economy will slow.. As for low inflation and interest rates.. I will believe that when I see it..
The trouble with the way we present the stats. it's hard to know whether an 'extreme' has become the new normal. for that reporting period;
So we have an Akl. CBD two bedroom apartment from $59,000
https://www.trademe.co.nz/a/property/residential/sale/auckland/auckland…
to new Dury 455m2 sections for $732,922 plus GST
Lot 536 Waipupuke Development, Drury, Papakura - For Sale - realestate.co.nz
Good luck to them getting anything more than 550-600k for that Drury property.
No need for any FOMO, there are 771 sections available.
I would love to see their development cost breakdown to see who is getting all the rentier money.
Yes that sounds like classic rentierism
Good question.
i saw sections available for $2000/m2 in drury
Drury was $400 a square meter for industrial in 2018
one hell of a markup…for extra pegs, and a water meter
https://www.cooperandco.co.nz/live-auctions/
Had reason to watch an auction @ Harcourts North Shore; Have a look at the past auctions on this link. A large proportion were passed in, many with only vendor bids before being passed in.At least Harcourts got there auction fees.
Jesus. Is it just me, or is their choice of a red sold price text colour over a blueish/gray frame very nauseating and hard to read?
There were no auctions in January, which is of course the weakest month of the year. Let's wait and see Feb and March. I bet that next month article would be, the house market has raised 100K
Sadly Greg this is click-bait reporting. A finer-grained assessment is required based on location and typology.
I fully expect Auckland's average sale prices to drop as investors rationalise their portfolios and a few people realise their price expectations are way too high. Obviously the demand-side impacts of higher interest rates and anti FOMO are also substantial drivers... but lets move our analysis of the RE market above the Tony Alexander's of this world eh?
So stiff upper lip Rhumline?
don’t mention it and it won’t be so bad??
Nah. Its real alright. I'm blubbering like many others over my paper losses. Its just that all this median/average price chat masks what's actually happening in the RE market. There are segments of the market very exposed but they are a minority. The vast bulk of owner-occupiers and investors will ride this out, or capitalise on unequal markets across Auckland and NZ.
We need to have a serious conversation in NZ about Negitive equity, its here now!
We are doomed Captain Mainwaring
Mr Ed - no one ever dies in banking or finance, not doomed just insolvent or broke.....
Wow. The comments here suggest 'capitulation'. Maybe the bottom is in. ;-)
Cheer up folks. This is just Auckland.
And Auckland, on REINZ pricing figures, was in a flatline before RBNZ inspired covid-madness while nowhere else was. We'll be back to that flatline soon.
There's always opportunity, even in a stagnant market, you've just got to find it. And you'll probably get rich if you have the balls to take the risk.
Opportunities galore, if you follow these simple, basic rules: Just avoid the flood plains, flood prone like the plague and offer 2016-18 prices.
Yep, the lifestyle subdivision I bought into 8 months ago has sold out and one over the road has 2 sections left. The fences are down on both sides of the main road not far from where I've bought as a new development gets underway.
There's a new subdivision about to go on the market where I live now with large lifestyle sections. The developer always makes a very nice job of his subdivisions. Reports are that there's been hundreds of expressions of interest.
It's smokin' hot.
subdivision is the way to riches, buying off them... not so much.
Depends on the local area and what's going to happen in the future. This is what's happening where I've bought....won't happen overnight though.
Close to a major shopping centre that's rapidly expanding
A Fletchers consortium want to build 1,800 houses.....currently deferred because the Council say insufficient infrastructure in place
Road widening planned through local township
Upgrade of a local intersection which is causing traffic jams
Road widening currently underway on local state highway
Massive retirement village approved in local township
Next to NZ's most expensive suburb
Between 2 major highways
2 new subdivisions currently underway a few hundred metres from local township
On the outskirts of NZ's biggest city
Local school being upgraded
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