Falls in house prices at the bottom of the market good news for first home buyers

Property / analysis

Lower house prices at the bottom of the market meant a significant improvement in affordability for first home buyers last month

23rd Feb 24, 9:30am by Greg Ninness

interest.co.nz
Home Loan Affordability Report
January 2024

There was some good news for aspiring first home buyers last month, with house prices at the bottom of the market and mortgage interest rates both declining, while wages continued rising.

Altogether that made getting into a home of their own significantly more affordable for typical first home buyers in most parts of the country.

According the Real Estate Institute of NZ, the national lower quartile selling price was $566,000 in January, down $20,000 compared to December last year.

The lower quartile price is the price point at which 25% of sales are below and 75% are above, representing the cheaper end of the market that is of most interest to first home buyers.

The regions where lower quartile prices declined in January compared to December were Auckland -$47,500, Waikato -$45,000, Taranaki -$45,000, Wellington Region -$50,000, Nelson/Marlborough -$27,500 and Canterbury -$10,000.

Four regions showed an increase in their lower quartile prices in January - Northland +$66,000, Bay of Plenty +$20,000, Hawke's Bay +$26,000 and Southland +$7000, while the lower quartile prices were unchanged in Manawatu/Whanganui and Otago.

Over the same period mortgage interest rates declined slightly, with the average of the two year fixed rates offered by the major banks slipping from $6.98% in December to 6.89% in January.

That combination of mostly lower prices and lower mortgage rates combined to reduce the mortgage payments on a home purchased at the national lower quartile price with a 10% deposit from $907 a week in December to $869 in January. That's a saving of $38 a week.

If the same property was purchased with a 20% deposit the mortgage payments would have reduced by $31 a week.

In Auckland, where prices are much higher, the mortgage payments on a lower quartile-priced home would have declined by $84 a week if it was purchased with a 10% deposit, or $68 a week if purchased with a 20% deposit.

And there is more good news for first home buyers with wages continuing to creep up.

Interest.co.nz estimates the median after-tax pay for couples aged 25-29, assuming both work full time, would have increased from $2048 a week in December to $2059 in January.

That combination of lower mortgage payments and rising wages meant a significant improvement in housing affordability in January.

The tables below give the main measures of affordability for typical first home buyers with either a 10% or 20% deposit, in all of the main urban regions throughout the country in January.

The comment stream on this article is now closed.

Home Loan Affordability
For Typical First Home Buyers with a 10% Deposit
for a home purchased at the REINZ's lower quartile selling price in each region/district
January 2024
Region	Amount required for a 10% deposit	Years to save a 10% Deposit	Mortgage required with a 10% deposit	Weekly payments on a 90% mortgage	Median weekly after-tax pay	Affordability: Mortgage payments as % of after-tax pay
Mortgage payments equivalent to more than 40% of after-tax pay are considered unaffordable
Northland	$56,500	3.0	$508,500	$868	$1,930	45.0%
Auckland	$77,250	3.8	$695,250	$1,186	$2,105	56.4%
Waikato	$58,000	2.9	$522,000	$891	$2,024	44.0%
Bay of Plenty	$65,500	3.4	$589,500	$1,006	$1,984	50.7%
Hawke's Bay	$57,500	3.0	$517,500	$883	$1,965	44.9%
Taranaki	$47,000	2.4	$423,000	$722	$1,964	36.7%
Manawatu/Whanganui	$42,500	2.2	$382,500	$653	$1,964	33.2%
Wellington Region	$60,000	2.8	$540,000	$921	$2,162	42.6%
Nelson/Marlborough	$57,000	2.9	$513,000	$875	$1,960	44.7%
Canterbury/Westland	$52,500	2.6	$472,500	$806	$2,024	39.8%
Otago	$48,500	2.5	$436,500	$745	$1,987	37.5%
Southland	$35,600	1.8	$320,400	$547	$2,065	26.5%
All of Aotearoa	$56,600	2.8	$509,400	$869	$2,059	42.2%

City/District
Whangarei	$56,500	2.8	$508,500	$868	$2,055	42.2%
Rodney	$89,500	4.4	$805,500	$1,375	$2,105	65.3%
Auckland North Shore	$88,750	4.3	$798,750	$1,363	$2,105	64.8%
Auckland Waitakere	$75,500	3.7	$679,500	$1,160	$2,105	55.1%
Auckland Central	$70,000	3.4	$630,000	$1,075	$2,105	51.1%
Auckland Manukau	$79,500	3.9	$715,500	$1,221	$2,105	58.0%
Papakura	$74,000	3.6	$666,000	$1,136	$2,105	54.0%
Franklin	$65,000	3.2	$585,000	$998	$2,105	47.4%
Hamilton	$62,800	3.2	$565,200	$964	$2,017	47.8%
Tauranga	$72,500	3.8	$652,500	$1,113	$1,959	56.8%
Rotorua	$52,800	2.7	$475,200	$811	$2,010	40.4%
Gisborne	$50,000	2.9	$450,000	$768	$1,770	43.4%
Napier	$60,500	3.1	$544,500	$929	$1,972	47.1%
Hastings	$53,000	2.8	$477,000	$814	$1,965	41.4%
New Plymouth	$55,000	2.9	$495,000	$845	$1,935	43.7%
Whanganui	$38,700	2.1	$348,300	$594	$1,823	32.6%
Palmerston North	$53,500	2.6	$481,500	$822	$2,047	40.1%
Wairarapa	$49,500	3.0	$445,500	$760	$1,678	45.3%
Kapiti Coast	$61,700	3.3	$555,300	$948	$1,927	49.2%
Porirua	$60,000	3.0	$540,000	$921	$2,049	45.0%
Wellington Hutt	$61,943	3.0	$557,484	$951	$2,103	45.2%
Wellington City	$61,000	2.5	$549,000	$937	$2,454	38.2%
Nelson	$57,000	2.9	$513,000	$875	$1,960	44.7%
Christchurch	$54,000	2.7	$486,000	$829	$2,016	41.1%
Timaru	$42,000	2.3	$378,000	$645	$1,852	34.8%
Queenstown	$97,000	5.0	$873,000	$1,490	$1,987	75.0%
Dunedin	$47,800	2.6	$430,200	$734	$1,864	39.4%
Invercargill	$39,000	2.0	$351,000	$599	$1,974	30.3%
Notes: Calculations based on buying a home at the REINZ's lower quartile selling price in each region/district. Mortgage interest rate used is the average of two year fixed rates offered by the major banks for a 30 year term, with a loading for a low equity loan. Weekly income is based on the combined, median rates of pay, after-tax, for couples aged 25-29, assuming both work full time. Years to save is based on saving 20% of after-tax pay each week into an interest bearing account,

Home Loan Affordability
For Typical First Home Buyers with a 20% Deposit
for a home purchased at the REINZ's lower quartile price in each region/district
January 2024
Mortgage payments equivalent to more than 40% of after-tax pay are considered unaffordable
Region	Amount required for a 20% deposit	Years to save a 20% deposit	Size of mortgage required with a 20% deposit	Weekly mortgage payments with a 20% deposit	Median weekly after-tax pay	Affordability: Mortgage payments as % of after-tax pay
Northland	113,000	5.8	$452,000	$686	$1,930	35.5%
Auckland	154,500	7.3	$618,000	$937	$2,105	44.5%
Waikato	116,000	5.7	$464,000	$704	$2,024	34.8%
Bay of Plenty	131,000	6.6	$524,000	$795	$1,984	40.1%
Hawke's Bay	115,000	5.8	$460,000	$698	$1,965	35.5%
Taranaki	94,000	4.7	$376,000	$570	$1,964	29.0%
Manawatu/Whanganui	85,000	4.3	$340,000	$516	$1,964	26.3%
Wellington Region	120,000	5.5	$480,000	$728	$2,162	33.7%
Nelson/Marlborough	114,000	5.8	$456,000	$692	$1,960	35.3%
Canterbury/Westland	105,000	5.1	$420,000	$637	$2,024	31.5%
Otago	97,000	4.9	$388,000	$589	$1,987	29.6%
Southland	71,200	3.4	$284,800	$432	$2,065	20.9%
All of Aotearoa	113,200	5.5	$452,800	$687	$2,059	33.4%

City/District
Whangarei	113,000	5.4	$452,000	$686	$2,055	33.4%
Rodney	179,000	8.5	$716,000	$1,086	$2,105	51.6%
Auckland North Shore	177,500	8.4	$710,000	$1,077	$2,105	51.2%
Auckland Waitakere	151,000	7.2	$604,000	$916	$2,105	43.5%
Auckland Central	140,000	6.6	$560,000	$849	$2,105	40.4%
Auckland Manukau	159,000	7.5	$636,000	$965	$2,105	45.8%
Papakura	148,000	7.0	$592,000	$898	$2,105	42.7%
Franklin	130,000	6.2	$520,000	$789	$2,105	37.5%
Hamilton	125,600	6.2	$502,400	$762	$2,017	37.8%
Tauranga	145,000	7.4	$580,000	$880	$1,959	44.9%
Rotorua	105,600	5.2	$422,400	$641	$2,010	31.9%
Gisborne	100,000	5.6	$400,000	$607	$1,770	34.3%
Napier	121,000	6.1	$484,000	$734	$1,972	37.2%
Hastings	106,000	5.4	$424,000	$643	$1,965	32.7%
New Plymouth	110,000	5.6	$440,000	$667	$1,935	34.5%
Whanganui	77,400	4.2	$309,600	$470	$1,823	25.8%
Palmerston North	107,000	5.2	$428,000	$649	$2,047	31.7%
Wairarapa	99,000	5.9	$396,000	$601	$1,678	35.8%
Kapiti Coast	123,400	6.4	$493,600	$749	$1,927	38.8%
Porirua	120,000	5.8	$480,000	$728	$2,049	35.5%
Wellington Hutt	123,885	5.9	$495,542	$752	$2,103	35.7%
Wellington City	122,000	5.0	$488,000	$740	$2,454	30.2%
Nelson	114,000	5.8	$456,000	$692	$1,960	35.3%
Christchurch	108,000	5.3	$432,000	$655	$2,016	32.5%
Timaru	84,000	4.5	$336,000	$510	$1,852	27.5%
Queenstown	194,000	9.8	$776,000	$1,177	$1,987	59.3%
Dunedin	95,600	5.2	$382,400	$580	$1,864	31.1%
Invercargill	78,000	3.9	$312,000	$473	$1,974	24.0%
Notes: Calculations based on buying a home at the REINZ's lower quartile selling prices in each region/district. Mortgage interest rate used is the average of the two year fixed rates offered by the major banks for a 30 year term. Weekly income is based on the combined, median rates of pay, after-tax, for couples aged 25-29, assuming both work full time. Years to save is based on saving 20% of after-tax pay each week into an interest bearing account.

•You can have articles like this delivered directly to your inbox via our free Property Newsletter. We send it out 3-5 times a week with all of our property-related news, including auction results, interest rate movements and market commentary and analysis. To start receiving them, register here (it's free) and when approved you can select any of our free email newsletters.

We welcome your comments below. If you are not already registered, please register to comment

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

128 Comments

by Dgm | 23rd Feb 24, 9:36am 1708634207

House prices overall will see a decrease over the next few years

by tothepoint | 23rd Feb 24, 9:57am 1708635431

Good to get a first home when they're more affordable......

When interest rates start tracking down, house prices will rise - as savvy people are aware.

TTP

by Te Kooti | 23rd Feb 24, 11:25am 1708640706

It doesn't look like interest rates are going to track down like the market was expecting.

There have to be a few owners/investors holding out for lower rates who are nearing the end of their ability to get by. There will also still be owners rolling off covid low fixed mortgages. Couple that with the expected supply due to bright-line changes and it's not nearly as rosy an outlook as I picked only 2 months ago.

by IT GUY | 23rd Feb 24, 11:36am 1708641366

Great to see that you are prepared to change your view depending on how you see things chance, many on here cannot....

The balance of probability is that sales will be low for the remainder of summer... stall big time in winter, and the spring is going to see 10% falls....

I still see another 20% to the bottom 10% this year and 10% next , only then will the affordability start to stack up

by Te Kooti | 23rd Feb 24, 11:48am 1708642089

Thanks, yes turnover is very, very low. So low it's hard to get a feel for what's happening. I inquired about a place in Queenstown, was told there were multiple bidders, second viewings etc etc. Two week later price cut by $200k and still on the market. I know what I'm doing, the carry is poor and people need to get on with their lives eventually. Just wait them out.

by WinHonourHelp | 23rd Feb 24, 11:58am 1708642738

Helped someone buy a house in Manawatu last month, first home. Multi-offer with 2 other offers. Sold over asking price, ours wasnt the highest offer but the best terms. Savvy agent who pitchs them just right. First homes selling fast here if priced right.

by Te Kooti | 23rd Feb 24, 12:22pm 1708644134

Interesting. There is an intersting dynamic between shortage of accom and pricing of rent/buy. For some buying makes sense if their personal circumstances require long term in a given location. Some just can't get the finance though.

by ChrisOfNoFame | 23rd Feb 24, 11:29am 1708640944

Sorry to drive a wedge into your pub-economics narrative but savvy people are also aware that Auckland House prices flatlined between 2016 and RBNZ inspired covid madness in 2020.

And between 2016 and 2020 interest rates were actually falling.

Two graphs for the real savvy people ...

https://www.interest.co.nz/charts/interest-rates/fixed-mortgage-rates

https://www.interest.co.nz/charts/real-estate/median-price-reinz

by IT GUY | 23rd Feb 24, 11:38am 1708641509

Stats and damned lies as well..... Big sites big house kept going up, lots of chippy choppy crap was built then holding averages down, best to look on a suburb by suburb basis if you want to really be savvy... right now the best land you can buy will be subdividable with a rentable on it, from a stressed developer , no longer termed mortgagee in aussie now they talk DISTRESSED SALE

by RickStrauss | 23rd Feb 24, 2:54pm 1708653284

It really took a massive injection of taxpayer welfare via RBNZ stimulus handouts to power the market in the last couple of years. What, roughly $11-12 Billion of cost to taxpayers, to subsidise property...of course, now it's important we crack down on the poorest to make some savings! They're the real bludgers, not the subsidised wealthy!

by lockdowndays | 23rd Feb 24, 8:54pm 1708674879

Except this time will be different due to a little thing called DTI kicking in….

by Pa1nter | 24th Feb 24, 7:02am 1708711320

Yep, those on lower middle incomes will be excluded from ownership.

by 1689 Baptist | 23rd Feb 24, 11:39am 1708641581

Can you clarify your thoughts Dgm. Do you believe house prices will fall in real terms only or nominal terms as well?

by HouseMouse | 23rd Feb 24, 9:37am 1708634249

It’s nowhere near good news

by Hamish | 23rd Feb 24, 10:21am 1708636865

Yeh, is it good news for yet to be FHB or is it good news for recent FHB?

by Pa1nter | 23rd Feb 24, 11:01am 1708639272

Depends if the discount on the house exceeds a few years extra rent.

Then that gets taken away paying 7% interest.

by Averageman | 23rd Feb 24, 11:04am 1708639491

More affordable housing at the entry point, why is that a bad thing?

by Blackbeard | 23rd Feb 24, 11:24am 1708640682

It’s not affordable! Needs to drop another 20-30% then it’s just affordable, but still overpriced.

NZ property = ripoff (everyone knows it)

by HouseMouse | 23rd Feb 24, 11:49am 1708642187

Because it’s a tiny drop, it’s nowhere near affordable, and interest rates are punishingly high.

It beggars belief, for me, that this can be construed as ‘good news’ for FHB

by danicriss | 23rd Feb 24, 3:30pm 1708655459

interest rates are punishingly high

Interestingly, it's not the interest rates which are too high - they're rather in line with the long term trend. It's the prices which are insane

Normal percent times insane is high, hence interest is too high, but because of the other factor, not the rate

by pacifica | 23rd Feb 24, 3:12pm 1708654321

Because more than half the population have incomes below the median of two full time couples at median income. Kinda thought that was obvious but I guess they don't teach what a median is and they also don't teach how babies are made or how you are not automatically provided a partner and full time job.

by easymoney | 23rd Feb 24, 9:38am 1708634280

"BOTTOM OF THE MARKET" .. Well if you say so..

by IT GUY | 23rd Feb 24, 9:50am 1708635020

Stalled, Stagnant, Stuffed!

by HouseMouse | 23rd Feb 24, 2:50pm 1708653019

Screwed

by Kiwisaint | 23rd Feb 24, 9:52am 1708635174

...more falls to come I suspect, with interest rates higher for longer, house prices will be lower for longer.

by huttman | 23rd Feb 24, 10:03am 1708635828

is the number correct?

take wellington city for example, median weekly after tax take home pay is $2,454? so the median take home pay in wellington city is $127,608 a year? I find it hard to believe. even if this is household income, divided by two, it still means the median salary is a $84,000 before tax a year per person.

by General Comment | 23rd Feb 24, 10:13am 1708636435

Sounds about right to me. Not sure if it still holds but Wellington City has traditionally been the highest-paid area in NZ, and $84K isn't a huge salary these days.

by huttman | 23rd Feb 24, 10:20am 1708636825

You might be right, just checked Stats website, median salary national wide for men is $72,800, so 84K salary in wellington city sounds about right.

and yes, it seems people's income has jumped along with inflation.

by kiwikidsnz | 23rd Feb 24, 11:05am 1708639523

Wellington is higher because of the higher proportion of Govt/Public Service salaries

by JimboJones | 23rd Feb 24, 11:23am 1708640617

And because they have to pay you well to brave the weather

by Te Kooti | 23rd Feb 24, 1:10pm 1708647026

Sure, but houses are so much cheaper in Wellington with much better commutes.

I'd prefer to buy in Welly and add a second home in Coro or Qtown, than spend the same total amount on a dump in a souless suburb in Auckland. Who cares sbout the weather when your grinding at work, Welly is under-rated vs Auckland.

by JimboJones | 23rd Feb 24, 1:46pm 1708649201

It depends where you live in Auckland. I would never live anywhere other than the central Isthmus, we don't really have all the problems people associate with Auckland such as traffic.

by HouseMouse | 23rd Feb 24, 3:03pm 1708653818

I don’t think the commutes are that much better. I am a Wellingtonian and travel back there quite a bit, for family and work.

Sure the housing is a bit cheaper, but not that much.

I love my hometown but that’s more of a sentimental thing. The weather is lousy, a lot of homes don’t get much sun (or if they do, they get the wind), and there’s a real bureaucratic vibe to the place. Large chunks of the CBD look like they never left the ‘90s.

And don’t get me started on the ‘Cultural Capital’ crap. The food scene is overrated.

However….The waterfront is beautiful, and some great and highly accessible parks and reserves.

by Eschaton | 23rd Feb 24, 3:28pm 1708655329

Pretty good summary. Lived and frequent both.

Wellington climate & earthquake risk tips the balance for me. It should be a lot less expensive to buy/live there like it used to be pre 2010.

by Te Kooti | 23rd Feb 24, 4:07pm 1708657668

Auckland weather is not great either, windy and wet. Yes warmer, but I think it's close than it used to be.

Wellington has great diving and mountain biking on it's door step, you can walk to the CBD from a lot of places. Don't forget, we are comparing Mt Vic with papakura or Drury for relative pricing.

Also this is context of higher average salarys in Welly.

by Eschaton | 23rd Feb 24, 4:59pm 1708660753

Auckland weather not good? Wow you must be hard to please. Its awesome by most measures, temperate and gentle. Why would you compare papkura and Mt Vic? Mt vic is more like Grey Lynn.

by Pa1nter | 23rd Feb 24, 5:39pm 1708663173

Auckland weather sucks

- humid

- rains almost every day

- summer starts a month or two late

Least it's not Hamilton or Invercargill I guess

by Zwifter | 23rd Feb 24, 6:23pm 1708665791

Humidity in Auckland is appalling if you are into fitness. I used to track it after every workout, 70 to 80% up there was "Normal". These days I see the humidity in the low 30's and probably in the 50's is normal. Intense cardio is so much better now.

by HouseMouse | 23rd Feb 24, 6:43pm 1708667037

It’s a pretty good climate. Not a fan of the winters but hey.

by Te Kooti | 23rd Feb 24, 7:40pm 1708670440

I said price wise. Grey Lyn is double Mt Vic.

by Nzdan | 23rd Feb 24, 4:03pm 1708657423

The Wairarapa Line is certainly having its fair share of issues. Fortunately I only travel in once a week at most, and don't need to be at the office at specific time.

by Greg Ninness | 23rd Feb 24, 11:32am 1708641165

Hi Huttman,

Wellington City traditionally has the highest wage rates in the country, higher even than Auckland's. I make no comment on whether they are providing value for money.

by Pragmatist | 23rd Feb 24, 11:43am 1708641807

I make no comment on whether they are providing value for money.

*Chortle*, thats the most loaded non comment i've seen for a while.

by refactornz | 23rd Feb 24, 2:27pm 1708651654

It's just due to the mix of jobs in Wellington. The data doesn't imply that Wellington workers are paid more than elsewhere for the same roles.

by Adam B NZ | 23rd Feb 24, 10:20am 1708636817

Are we at the bottom though? Maybe, maybe not? We have a lot of stock coming on to the market, interest rates are set to stay higher for longer, unemployment will likely tick upwards this year, China + Germany + Japan + UK + most of Euro in significant slowdowns or recessions, lots of global risks. All eyes on migration, will it stay at high levels? The market will be in for a bumpy ride at the very least. No major upswing on the horizon for 2024 that's for sure.

by kwbrn | 23rd Feb 24, 10:33am 1708637619

Interest rates are not high. 20% like we were paying in the 80's is what I would call high. We are approaching normal of around 8%.

by Adam B NZ | 23rd Feb 24, 10:47am 1708638463

Interest rates are high relative to the debt levels mortgage holders now have compared to the 80's. Mortgages were a lot lower in the 80's.

by kwbrn | 23rd Feb 24, 10:53am 1708638818

You mean debt to income. If the supply of money was like it was in the 80's then house prices would be much lower and the DTI lower.

I don't think many appreciate how hard it was to borrow many back then.

by Pa1nter | 23rd Feb 24, 11:03am 1708639436

The 80s were before central bank philosophy of 2%. So calculating an average or norm doesn't tell you much.

by kiwikidsnz | 23rd Feb 24, 11:07am 1708639678

"central bank philosophy" is a red herring & nothing to do with the comparison made in the previous comments

by Pa1nter | 23rd Feb 24, 12:03pm 1708642997

It's apt when anyone tries to claim what they think an interest rate should be, based on historic averages.

by kiwikidsnz | 23rd Feb 24, 6:16pm 1708665404

No one was claiming "what they think an interest rate should be", only what they were

by Pa1nter | 24th Feb 24, 6:59am 1708711198

We are approaching normal of around 8%.

People do it on here all the time.

by HouseMouse | 23rd Feb 24, 3:06pm 1708653965

Ok, boomer

by malamah | 23rd Feb 24, 3:37pm 1708655844

The deposit amount young people have to fork out relative to incomes is not far off what would have bought them a home outright in the early 80s, so reckons like these are irrelevant. The fact that the average income family could get a mortgage at all should tell you enough about the change in dynamics.

by Nzdan | 23rd Feb 24, 4:05pm 1708657500

It's interesting isn't it, how frivolous people were back then that they'd take out multiple mortgages at ridiculous interest rates when all they had to do was save a little harder. I mean, what was a term deposit paying those days 15%? Embarrassing.

by redheadonist | 26th Feb 24, 10:39am 1708897154

My NZPO savings account was earning 15% briefly, before it was split off into PostBank.

by Chaosinflesh | 23rd Feb 24, 11:22am 1708640537

Debt levels are high relative to the interest rates.

So many people have it backwards, because they drank the Kool-Aid of abnormally low interest rates.

by ex agent | 23rd Feb 24, 11:28am 1708640904

I bought my first home for $69k in 1984, debt less than 3 times income. Paid off in 3 years. Sold and bought in 1987 for $135k, debt close to 1 times income. Sold for $310k in 1996 and bought our current home for $490k with debt less than 1 times income. That home now around $3m. It was bloody easy for us boomers. Debt was never huge. Interest rates in the 20’s was only for months. The young ones today face far bigger financial obligations when buying their homes than we ever faced.

by IT GUY | 23rd Feb 24, 11:40am 1708641612

Same - Future performance should not be based on this experience.

by Nellbell | 23rd Feb 24, 1:57pm 1708649874

Yes I agree it was way easier, hopefully we get back to something near that some time in the future. From memory of the 1990s, $490,000 would have bought a pretty good property … the $3 million now is probably the problem, I think most expensive houses need to correct. May be in your case the value of developable land is inflating values of property with large sections? As a note I don’t know anyone from back then that had the ability to pay off property in a few years, most I know are still paying mortgages down now, perhaps from topping up over the years.

by ex agent | 24th Feb 24, 9:37am 1708720633

We lived off my salary for three years, saved my wife’s salary and paid off the first loan in three years. It was only $45k. No overseas trips during that time. Set us up for the life we have now. Our best asset. Our grandchildren

by Te Kooti | 23rd Feb 24, 3:16pm 1708654606

Never feel guilty ex agent, the movies and music they are making is trash, along with influencer culture - so this is their punisment

by RickStrauss | 23rd Feb 24, 4:45pm 1708659947

Heck, the US has even elected a president (and may even re-elect him) who was a perfect encapsulation of influencer culture.

by phalanax | 23rd Feb 24, 10:38am 1708637910

Oh I though they had introduced 50 year mortgages.....my bad......lol

by John Mendel | 23rd Feb 24, 3:48pm 1708656517

All this data is irrelevant, you know why?!

cause there's a clear separation between an apartment owner who's desperate to sell his property and an owner of a good house on the Shore with dozen of potential buyers who are interested to buy it, and don't mind to pay above the market value.

Two of neighbours sold their houses recently 10% above what they paid in 2023

If you're looking for an apartment 20% off the market value, you may find some/many.

A good house/area with 5/10 off?! in your dreams

by Zwifter | 23rd Feb 24, 11:41am 1708641712

The market is getting distorted by the type of "Houses" that are being built now. In a road I used to live in the people are up in arms, a house has been demolished and they are building multiple 3 storey townhouses on the site. Like you pointed out, far more sophisticated data is now required to truly see what is happening in the market. You need to start looking at the amount of land the "House" is sitting on as this is such a large component of the overall price.

by CN - new | 23rd Feb 24, 12:37pm 1708645068

"Two of neighbours sold their houses recently 10% above what they paid in 2023"

The short ownership period (i.e at most 14 months) would suggest that they might be property traders. Property traders and owner occupier buyers are very different in:

1) their motivations (one is short term profit motivated) and

2) the prices that they are willing and can pay.

Commissions are 3%, financing costs at 7%. Did the sales proceeds cover all their costs (incl the renovation)?

by CN - new | 23rd Feb 24, 12:43pm 1708645416

Here's a recent comment from a property trader

"I made one sale this week. Purchased $1.3mil Jan 2022. Got it done at $1.1mil--loss on top of the $200k would be selling fees and the upgrades -painting etc that went into the sale. Today I will be presenting $1.2mil Unco versus a May 2021 Purchase at $1.4 mil. Likewise the further loss would be as above. I'm expecting it will only get worse over the winter. There was a November blip that change of Government would stop the fall-think Affordability will rule in the end."

by agnostium | 23rd Feb 24, 2:37pm 1708652224

Northshore house.

Bought 2021 for $1.2m, asking price $650.000.

https://www.trademe.co.nz/property/residential-property-for-sale/auctio…

by CN - new | 23rd Feb 24, 2:46pm 1708652771

"Bought 2021 for $1.2m"

Records here suggest that the last transaction was 1996 and price was $175,000.

https://www.qv.co.nz/property-search/property-details/266532/

Was there a contemporaneous purchase with deferred settlement by the buyer which wasn't completed / settled?

by Matt_B | 23rd Feb 24, 3:09pm 1708654187

Cross lease

Currently owned by different people.

by pacifica | 23rd Feb 24, 3:33pm 1708655592

Correction a gottage granny flat selling for 650k (yikes that is mental) next to the actual house (holding the 1.2mil valuation). Easy to see the confusion when they could not even be bothered to do a proper subdivison so the addresses are a mess in homes data

by CN - new | 23rd Feb 24, 5:27pm 1708662450

Here's the record for the other property

Purchased Oct 2021 for $1,232,500

https://www.qv.co.nz/property-search/property-details/266531/

So the owners are trying to sell the 1 BDRM granny flat on a cross lease basis, asking $649,000. Perhaps use the proceeds to reduce the mortgage debt on the initial purchase.

by Te Kooti | 23rd Feb 24, 3:15pm 1708654509

Renovate or detonate, nest or invest, I love NZ real estate agents.

Actually maybe I can help them with some te reo ???

by Flying high | 23rd Feb 24, 3:22pm 1708654922

Try and make it funny/catchy or don't bother :) kiwis will struggle

by HouseMouse | 23rd Feb 24, 3:17pm 1708654663

Homes estimate $1.05 million, lol

by pacifica | 23rd Feb 24, 3:28pm 1708655299

That is for the actual house, not the granny flat next to it being sold 650k with poor land rights.

by John Mendel | 23rd Feb 24, 3:25pm 1708655142

agnostium so buy it and make a 500K profit.

by pacifica | 23rd Feb 24, 3:30pm 1708655459

They wouldn't for the granny flat, but maybe if they tried to buy the whole house and land they might find it is obtainable for over 1mil now.

by pacifica | 23rd Feb 24, 3:48pm 1708656502

Er that was not the house that is selling, that is someone wanting to sell off the 1 bedroom gottage granny flat separate from the expensive house & land because it is past the point they can legally rent it and they are too cheap skate to do a proper subdivision (probably cant with the tiny scrap the gottage is on and limited options for separate drive entrance).

agnostium I can see how you can be confused, by not reading the information and looking at the pictures & address. After all garbage in garbage out (homes algorithm cannot handle these types of properties because it confuses the original section, house & land, and then has someone who claimed it, likely agent, add only the building dimensions of the gottage for the sale to tie in with their marketing, so the algorithm just fails hard) and this kind of property makes for a 'you have to read the info before posting' mistakes.

Like the folks who post that there are houses for sale for 50k only to post ads of houses for removal (that were only fit for demolition and the owners are cheap skates and cant be bothered to do it themselves).

by John Mendel | 23rd Feb 24, 4:01pm 1708657310

I think that those who can afford buying a house with land and buy apartment/townhouse instead are making a BIG mistake, cause over time the value of their property is exposed to a significant decrease, unlike homeowners with land.

by pacifica | 23rd Feb 24, 3:53pm 1708656832

True, like most leasehold apartments in the city, even without the remediation issues the leasehold & body corp costs can inflate to annual costs more then they paid for the original deposit. There is also huge risk and costs associated with maintenance. Such that even trying to get maintenance arranged on mixed lease, and adjoined properties is a nightmare in itself and scaffolding costs are a rort these days.

Just to do paint and surface checks on the second level of a townhouse are a nightmare. Add in dodgy internal gutters with leaking pipes and it is a kettle of fish you cant easily fix or even do maintenance checks on.

by agnostium | 23rd Feb 24, 4:39pm 1708659566

Sorry, I was trolling.

by Chairman Moa | 23rd Feb 24, 11:27am 1708640873

Hopefully the migration flow to Australia will slow down.

We have a new fellow kiwi couple moving in down the street, arriving from Tauranga. They are looking to buy and unit price in Brisbane is going nut!

by lockdowndays | 23rd Feb 24, 9:12pm 1708675937

Are you living there (Bris). How do the costs of homes there differ, are they comparable to say Wellington? Harder/easier for fFHB?

by JimboJones | 23rd Feb 24, 11:31am 1708641065

So even with big increases in interest rates, its only Auckland that is unaffordable once you've saved 20% deposit.

This is the best house price report IMO, but the use of percentages skews reality. For example in Auckland (44.5% of income for a 20% deposit house) you have $1,168 a week left over, and in Gisborne (34.3% of income for a 20% deposit house) you have $1,163 a week. So you are actually better off in Auckland!

by Zwifter | 23rd Feb 24, 11:59am 1708642758

You are better off in Auckland until you have moved out of Auckland and at that point you realise you are better off anywhere else other than Auckland.

by agnostium | 23rd Feb 24, 2:39pm 1708652351

Sure. I guess that's why Auckland continues to be the most popular city in New Zealand. Jealousy will get you nowhere.

by sparrow | 23rd Feb 24, 3:12pm 1708654338

Internal migration has been negative for Auckland for quite a few years, without overseas migrants it would have a declining population.

by 1harlow1 | 23rd Feb 24, 3:45pm 1708656352

That's predominantly retirees moving out. If you are working age and not a farmer, Auckland is by far the best city to live in, it's not even debatable. If you don't need or want to live in a major urban centre, then it becomes a different discussion.

by Zwifter | 23rd Feb 24, 3:32pm 1708655556

Lived in Auckland for most of my life, over 40 years so I feel I'm in a position to judge it. Its totally gone down the toilet and although you could say that about anywhere in NZ really its just in Auckland they just keep pumping the flush button far more times than anywhere else.

by HouseMouse | 23rd Feb 24, 3:37pm 1708655854

There are still things I like here, and it’s the only city that has a halfway global vibe to it, but I tend to agree.

I thought it had a much nicer / better standard of living when I first came to the city for university in the mid 90s

It’s hard to think of anything that’s really improved. Perhaps the food culture a little bit, although that was already pretty good in the mid to late 90s

by JimboJones | 23rd Feb 24, 3:48pm 1708656517

From when I moved to Auckland 25 years ago:

The central city has improved a lot (except for all the CRL work which will be done soon). It used to be a real dive. No Viaduct / Wynyard quarter / Britomart.
Public transport. Last train used to be at 6 o'clock, no HOP card etc.
Eden park used to be crappy wooden stands.
Restaurants used to be crap
Our area used to be a dry area!
Lots more for kids these days, Auckland is a great city for kids.
Better motorways / Waterview which work well off peak (I never use them on peak).
There are some pretty good cycle paths that didn't used to exist

by HouseMouse | 23rd Feb 24, 4:04pm 1708657476

- central city improved? Yes and no. Maybe some of the streetscapes and the waterfront. The crime and safety is worse. Retail and cafe culture more generic and less interesting

- public transport, fair point

- Eden Park is a horrid concrete jungle

- There were lots of excellent Asian food places by the mid 90s, I can’t speak for find dining I was too poor then

- kids, yes and no. I think it’s worse in some respects, in terms of personal and transport safety

- motorways, yeah nah. Maybe the system

is better, but it’s much more congested

- I don’t really cycle

how about:

- beaches more crowded and harder to get to, water quality?

- cost of housing much much worse

by JimboJones | 23rd Feb 24, 4:12pm 1708657970

The beaches probably have better water quality now? Its just made more public?

Yes the cost of housing is much worse. It would be much better if Auckland was more crap!

Agree the crime and dodgy people is worse in the city. That seems to be everywhere though, I saw worse in Rotorua and Napier recently. I do hope National are harder on crime.

by pacifica | 23rd Feb 24, 4:24pm 1708658664

Sadly access to the beaches for families is worse. So the days of the easily accessible beach with the family is less that now with over development & more population but even worse weekend timetables and cut bus services to those stops (favouring the central routes over local connecting areas & local attractions to each suburb). Most the parking has been removed and sold with nothing to replace it so families travel to the beaches less. Unless you are wealthy enough for a 2+million home the beaches are not for you most the time.

With the over development in those areas with no funds going into improving the capacity of pipes for the higher load it is probably a good thing to skip the beaches. Sewage overflows happen more frequently but hey you get a website to see most the beaches are unswimmable for young kids and elderly now.

by RickStrauss | 23rd Feb 24, 4:49pm 1708660151

Not sure central Auckland is less safe than the 90s, actually. There was quite a lot of violence in central Auckland back then. I had multiple friends caught up in it. Strewth, Commerce Street and Fort Street were pretty dire.

by pacifica | 23rd Feb 24, 4:17pm 1708658244

Actually for most the people living there (aka over 90% outside of the CBD) Auckland is pretty crap. The public transport reach is actually worse (they cut the western line completely where over 10000 houses were put in on a one main road system, and pushed development outside of most bus routes so it is an hours drive even to a busstop), and the more money they pump into only the CBD only hastens the demise and degradation of most the city where the kids actually play and families actually live outside the CBD.

You go to the CBD for work but only if you have to and late nights there the vibe has changed with most the local music venues closed down, many of the great multicultural restaurants closed down and the Vileduct only being a place of street violence and bad djs. Even kroad has gone far downhill and the vibe is far more dangerous (family is no longer a good place to be). But hey they opened up a new strip joint to manipulate the wages of the workers even worse. Perhaps that is all that the vileduct & Britomart is, a cheap seedy strip joint that sucks up all the cash and has casual violence outside and causal abuse of women inside. Perhaps that's why you like it so much while most young families have left Auckland, many for overseas, no matter their previous cultural connection to the area.

But I am sure you will find another 20 or so migrants to fit into a single house that will take up all the below minimum wage jobs in the CBD and put up with the lack of accessible public transport outside the CBD and the lack of funds to spend at the Vileduct bars and bistros that serve oh so cliche food to drunken louts with bad taste. https://www.nzherald.co.nz/nz/vietnamese-migrants-sold-everything-to-pa…

by HouseMouse | 23rd Feb 24, 4:25pm 1708658734

Good points.

I thought the Auckland CBD was great in the mid 90s. High Street was buzzing with cool cafes and clubs. Good music stores and shops. Some good Asian eateries. K Road was edgy but fun. Some great Asian food courts

by Te Kooti | 23rd Feb 24, 7:48pm 1708670928

I disagree aside from the roads and water view tunnel.

auckland was a lot more fun back in the 80s 99s.

by Nellbell | 24th Feb 24, 9:41pm 1708764091

Agreed, Auckland was very cool in the 80s. Very artsie and lots of good nightlife….the start of dance clubs with edgie clubs popping up around town….. one was in Fort street I remember. Auckland seems pretty ordinary now but the waterfront is lovely for a visitor. I used to like lunch at the Soul bar but haven’t been there since before covid times.

by HouseMouse | 23rd Feb 24, 3:32pm 1708655556

It’s a fairly handy report, but it presents a rosier picture than reality, which I have pointed out before:

- Many young people, especially those on median incomes or higher, have student loans. This impacts on ability to save a deposit, as well as ability to service a mortgage

- In the bigger cities, lower quarter properties are usually townhouses or apartments. These often have not insignificant BC fees, again affecting ability to service

by 1harlow1 | 23rd Feb 24, 3:49pm 1708656593

Also I was always under the impression that the 40% of income line for affordable housing included all associated costs. So rent OR mortgage plus rates, maintenance and insurance.

by HouseMouse | 23rd Feb 24, 4:08pm 1708657693

Good point

by IT GUY | 23rd Feb 24, 11:42am 1708641727

For many in 2025 and 2026 any reduction in interest charges may well be eaton by rate increases and water bill increases... oh and insurance.... 1% on 500k is only 5k easy for those bills to go up big time for many.

by WestieAJ | 23rd Feb 24, 12:11pm 1708643473

"In Auckland, where prices are much higher, the mortgage payments on a lower quartile-priced home would have declined by $89 a week if it was purchased with a 10% deposit, or $68 a week if purchased with a 20% deposit"

Auckland 10% deposit for a lower quartile property 77K

Assuming you can get your hands on that deposit

695K is the mortgage you will need and it will be $1186 per week to service (mostly interest)

How much could you rent the same house for?

How much is that house likely to increase in value in the short term 1-2 years?

by agnostium | 23rd Feb 24, 2:41pm 1708652471

You can rent a $1.6M waterfront property on the shore for $650 a week.

by 1harlow1 | 23rd Feb 24, 3:38pm 1708655927

Under $600 a week.

Best case scenario 10% over next 2 years I think.

by Retired-Poppy | 23rd Feb 24, 12:30pm 1708644647

Entirely as expected.....

by Uncle Bulgaria | 23rd Feb 24, 12:46pm 1708645612

Multiple offers on a pretty small house in Berhampore, Wellington last month. Winner was over 1.3m. The difference? The place was actually of good standard with heating and decent windows. A weird rarity In Wellington.

by Kate | 23rd Feb 24, 1:22pm 1708647760

Did it have a garage(s) as well and no stairs to main house access?

These are two qualities we are struggling to find in Welly (granted we also want a nice outlook, i.e., a horizon or bush or sea etc.), that said though I also accept your point about double-glazed windows and (to a lesser degree) good/efficient heating sources. Thing about those things is that they can be remedied.

by CN - new | 23rd Feb 24, 2:24pm 1708651479

A reminder for owner occupier buyers - choose your scenario and act accordingly.

Which will the owner occupier regret most:

1) missing out on future potential gains in equity?

2) potential actual loss of their invested equity or even potential negative equity?

For owner occupiers, a reminder of the impact of leverage (it amplifies property price changes both on the up and down):

Scenarios of impact of leverage on equity, assuming an 80% LVR for owner occupier, for a recent $1,000,000 property purchase, $200,000 initial deposit, mortgage $800,000.

A) Scenario - property price rise:

1) property price rises 5% to 1,050,000, mortgage 800,000, equity 250,000, so 25% gain in equity value from 200,000.

2) property price rises 10% to 1,100,000, mortgage 800,000, equity 300,000, so 50% gain in equity value from 200,000.

3) property price rises 15% to 1,150,000, mortgage 800,000, equity 350,000, so 75% gain in equity value from 200,000.

4) property price rises 20% to 1,200,000, mortgage 800,000, equity 400,000, so 100% gain in equity value from 200,000.

5) property price rises 25% to 1,250,000, mortgage 800,000, equity 450,000, so 125% gain in equity value from 200,000.

6) property price rises 30% to 1,300,000, mortgage 800,000, equity 500,000, so 150% gain in equity value from 200,000.

7) property price rises 35% to 1,350,000, mortgage 800,000, equity 550,000, so 175% gain in equity value from 200,000.

property price rises 40% to 1,400,000, mortgage 800,000, equity 600,000, so 200% gain in equity value from 200,000.

9) property price rises 50% to 1,500,000, mortgage 800,000, equity 700,000, so 250% gain in equity value from 200,000.

10) property price rises 100% to 2,000,000, mortgage 800,000, equity 1,200,000, so 500% gain in equity value from 200,000. (i.e property price doubles every 10 years)

Remember, the owner occupier must be able to hold on under ALL economic environments (including any potential significant reduction in household income, higher mortgage interest rates).

B) Scenario - Property price falls:

1) property price falls 5% to 950,000, mortgage 800,000, equity 150,000, so 25% loss in equity value from 200,000.

2) property price falls 10% to 900,000, mortgage 800,000, equity 100,000, so 50% loss in equity value from 200,000.

3) property price falls 15% to 850,000, mortgage 800,000, equity 50,000, so 75% loss in equity value from 200,000.

4) property price falls 20% to 800,000, mortgage 800,000, equity is ZERO, so 100% loss in equity value from 200,000.

5) property price falls 25% to 750,000, mortgage 800,000, equity is NEGATIVE 50,000, so 125% loss in equity value from 200,000.

6) property price falls 30% to 700,000, mortgage 800,000, equity is NEGATIVE 100,000, so 150% loss in equity value from 200,000.

7) property price falls 35% to 650,000, mortgage 800,000, equity is NEGATIVE 150,000, so 175% loss in equity value from 200,000.

8) property price falls 40% to 600,000, mortgage 800,000, equity is NEGATIVE 200,000, so 200% loss in equity value from 200,000.

by refactornz | 23rd Feb 24, 5:46pm 1708663615

For OO there's more to it than just the financials though.

And there's a transactional cost of around 3 - 7% to sell and buy back later (REA comms, lawyers, LIM, building reports, movers, etc.)

by CN - new | 24th Feb 24, 12:52pm 1708732362

Owner occupier buyers should be aware of the numbers of properties being listed for sale is likely to increase later this year offering them more choice.

https://www.oneroof.co.nz/news/bright-line-rule-change-58-000-propertie…

by CN - new | 24th Feb 24, 5:09pm 1708747756

Inflation has been about 7% p.a. since Nov 2021. Did leveraged property keep up with inflation?

Here is what the property promoters with their vested financial self interests don't tell you and don't want people to know.

Here is an example of how a potential buyer was saved by their lender. This guy didn't realise it then, but being rejected excessive credit from the bank was actually a blessing in disguise. Being declined for a large mortgage was better than getting approved to buy a house when house price risks are extremely elevated.

Nov 2021 - https://www.newshub.co.nz/home/money/2021/11/first-home-buyer-not-very-…;

So what would have happened if this guy bought in Nov 2021? Let's take a look at what could have happened.

A) buying a house

Nov 2021

REINZ median house price in Auckland: 1,300,000

Mortgage at 80% LVR: 1,040,000

Equity: 260,000

Jan 2024

REINZ median house price in Auckland: 975,000 (-25.0%)

Mortgage: 1,040,000 (assumed to be interest only to illustrate impact on equity) - note that the LVR is now over 100%

Equity: NEGATIVE 65,000 (-125% of initial equity, negative equity position)

B) keeping money in bank, and continue saving for a house

Nov 2021

Time deposit: 260,000 (same as house purchase)

Jan 2024

Time deposit with interest (after tax of 33%): 271,000

Now that deposit can be used to buy a house at the current price. This results in a smaller mortgage (704,000 vs 1,040,000 if purchased in Nov 2021), reduced total interest payments over 30 years.

REINZ median house price in Auckland: 975,000

Equity 271,000

Mortgage : 704,000 (LVR of 72.2%)

So from an equity perspective, keeping money on time deposit at the bank was a far better outcome than buying a house in November 2021.

by CN - new | 24th Feb 24, 5:10pm 1708747816

This is something most people do not realise. The property promoters with their vested financial self interests won't tell you this.

Peaker vs Buyer Today

How does this compare with a Peaker and a Buyer Today (BT) in NZ?

1) Peaker

The median house price at the peak for Auckland was $1,300,000

With an 80% LVR, this is a mortgage of $1,040,000

The 20% equity is $260,000

2) Buyer Today ("BT")

The current median house price for Auckland is $975,000

For a buyer who waited, and used the same $260,000 equity used above, the mortgage at this price would be $715,000 (an LVR of 73%)

The Peaker has a mortgage which is higher by $325,000 (mortgage of $1,040,000 for Peaker vs $715,000 for BT)

As a result of that additional borrowing, at a 6.8% mortgage interest rates over 30 years, Peaker is paying $770,000 more over the 30 years than BT (30 years x $25,667).

Assuming same incomes, and same living costs (food, travel, etc except mortgage), BT can save the $770,000 in payments that Peaker is paying.

The annual payment on the additional mortgage of $325,000 is $25,667 per year.

1) Peaker pays $25,667 more per year than BT.

2) BT instead saves that same $25,667 per year. At a deposit interest rate of 5.8% (after 33% tax is 3.9% p.a). Saving $25,667 per year and earning 3.9% per year in net interest after tax for 30 years comes to a total of $1,415,685.

$1,415,685 - this is money that BT has available for retirement after 30 years that Peaker will not have.

Remember that at the end of 30 years, the house price will be exactly the same for Peaker and BT.

BT will have more money available for retirement than Peaker.

by pacifica | 23rd Feb 24, 3:17pm 1708654633

more than half the population have household incomes below a couple of two full time median wage incomes. When over 65% of willing FHB are not in the category used for affordability metric advertising to MPs and public that is not a good thing to start with

by JimboJones | 23rd Feb 24, 3:53pm 1708656809

Its a good point. My parents bought a reasonable home off one full time income, probably less than average.

by pacifica | 23rd Feb 24, 4:43pm 1708659819

Family did too about the same gen although for them it was all mostly 1 below median part time income for homes around 65k (except one who brought a lifestyle farm block, now considered close to the city in silverdale area... millwater needs to be called a money pit). One of the properties sold again just recently for 1.8mil... earning about 56k a year... which is more than the median income (after tax) now... and most the other properties they brought around the same price have sold for above 2mil... Fk NZ is Fked.

That lifestyle block still only has 3 homes on it, lots of good land, sheep, bush & forestry, private waterway that is easy maintenance and current value is now above 10mil. The driveway sucks a bit though in one spot where they decided to leave it metal.

by Property Leader | 23rd Feb 24, 3:17pm 1708654623

Flip flop articles like this have to be taken with a grain of salt. Across the road from me in a sea side suburb of Tasman a 4 bedroom house sold within a few days of listing $1,000,000 more than Homes. Co valuation.

One of my cheapest investments in Nelson has according to Homes. Co been increasing at about $5000 per week over the last quarter. Generally across the whole region property prices and rents are increasing since the change of government.

by FHBtears | 23rd Feb 24, 7:23pm 1708669413

Anecdotal evidence should be taken with an even larger or perhaps several large grains of salt.

by Dale Smith | 23rd Feb 24, 3:27pm 1708655229

I've mentioned this before, but what is now important is to understand what it could mean long-term for pricing going forward.

There are always cycles in supply and demand, but in more stable less restrictive markets, these cycles affect the price very little. That is because the supply line in the cycle lies almost on top of the demand line (supply equals demand) no matter what the demand is within the cycle. Developers don't under or over-build. The price stays the same except for a gentle general inflation-adjusted rise.

Remember the days when from 'think to finish' building a house was 6 months? However as NZ changed land use policies to be more restrictive, the cycle took a lot longer. Now that is 12, 16 18 months or more.

Then because of these restrictions, it is far easier for that same supply and demand cycle, even with the same volumes, to get out of sync with each other to the point where they become countercyclical. At certain times this gives a relative excess of demand for the supply, and at other times a relative excess of supply for the demand.

There are lots of combinations and permutations to this, but the present effect is, as demand buttons off, supply that has been lagging behind is now catching up, and giving us an oversupply.

While for some this is good news, all it really is is the reverse side of a bad coin.

We have had our boom, now our bust.

But if we want to change to a more stable system, now is the time to do it at the bottom of a cycle. As they say. never let a good crisis go to waste.

Now is the time for Govt. to implement policies, not to allow a repeat of the cycle with another housing boom, but to stop what in effect becomes a dead cat bounce, so that prices remain stable at this lower level, housing is in real terms more affordable, and income growth continues to make it even more so.

This would start to solve many of the other inequalities that exist in the system, giving more disposable income back into everyone's pocket to pay for the solutions themselves, without needing Govt. subsidies.

We wait and hope.

by RickStrauss | 23rd Feb 24, 4:50pm 1708660224

What are the chances? The PM alone has $20 million plus reasons not to implement such policies.

by Dale Smith | 23rd Feb 24, 7:07pm 1708668457

Running with that logic that would include most politicians and all homeowners.

And if that is the logic, then it would mean with the increases we have had over the last few years, Labour are the most culpable if them all.

But if he looks at his whole portfolio then he knows both him, and the country, will be better of if that happens.

by John Mendel | 23rd Feb 24, 3:45pm 1708656328

by DTRH | 23rd Feb 24, 5:15pm 1708661753

Unaffordable In Auckland all red, just wait 24 months once the next phase of crash slows down should be another 20% to 30% down after the already 20% lost from highs..

by youngdumbandfullofit | 24th Feb 24, 6:26am 1708709161

May I present to you a fine home, a fine fine home due to the outstanding quality of NZ homes this lower quartile dream can be yours for a mere 56.4% of your take home pay. You may ask how lucky you are to come across such a property, well believe us you are very very lucky. Would you prefer destitution, or the most moral bankrupt life choice of all, renting?! No come now, come quick! Before it's over 70% of your take home!