The biggest surge in rents over the last year came in Gisborne which is now one of the most expensive regions in which to rent a home

Yep August to October was a low point. The problem is most people cannot see or plan past tomorrow, this is really a problem with the next generation. I can partly understand it, house prices look so far out of reach that many of them just give up. The world is going to shit and they just live for today and don't even think about where they will be in 15 years time, I mean why bother its all just either getting blown to bits or Climate change is going to kill everyone. The problem is when in 15 years time when you find you are still renting and still waiting for Armageddon you finally realise you totally screwed up. 

And the number of properties being listed is beyond anything I've seen before.  Really weird given it's got to be one of the worst markets to sell into, particularly if you're not re-buying in the same market.

I am really interested in what QV is going to do on the revaluation of property values previously set in 2021 at the peak.  Perhaps many in those locales are listing because they anticipate their on-paper wealth being wiped out?

You certainly don't want to be over-leveraged if your current valuation is dated September 2021.

Retired-Poppy: Over all the years you've been posting here, you've never advised people to buy a house. For you, it's never the right time to buy. The housing market is always about to plummet. 

Unfortunately, anyone who's taken your advice/sentiment on board has missed out on large capital appreciation, along with a host of important non-financial (i.e. intangible) benefits. (The price of many houses have doubled [or more] since you started posting here.) Further, to add insult to injury, tenants have been exposed to hefty rent increases.

Notably, people who have bought houses are not a dissatisfied group. Despite the recent high interest rates, the evidence here (and everywhere) is that the vast majority of home owners (with or without a mortgage) do not regret their purchase decision........ Few of them, if any, aim to go back to renting from a landlord - or living back home with Mum and Dad.

TTP

50% more expensive to build in NZ than AU - economies of scale mainly and a boutique building market. Things no tweaks to certifying overseas materials will fix.

increase population is then added -> new builds needed -> if "too high cost to build for what can sell them for" they wont be built (happening now) -> housing shortage, surging rents, homelessness.

If you dont get it -  im starting to think a mass number of people never will (capacity not there to think critically?)

House prices will not continue to double every 10 years without massive salary increases or near zero OCR. The decade from 2021 to 2031 could see *real* home prices stagnate as per Ireland. 

Hence I worked on 3% house price inflation.  Could be 0% house price inflation, could be 5%.  But if rents and rates/insurance increase at 7% p.a. over 17 years, then one could safely assume that wages will also increase at least 3% p.a. and that house prices (supported by borrowing) would also similarly track 3% p.a. conservatively.

The last 30 odd years had several economic and demographic tailwinds that drove asset prices up, and none of these will be repeated in the next 30 years.

1.  Continuously falling interest rates making borrowing cheaper

2.  Women entering the workforce, turning what used to be single income households into double income households who could borrow more

3.  The Baby Boomer generation entering their prime earning and investing years, whose savings were directed to the housing market.

As they say "past performance is no guarantee of future results".  Especially when the tailwind of #3 is now a headwind as that generation enters their divestment of assets years, through dying, downsizing, or entering aged care.  It pays to remember the eldest of the BB generation is 79, the youngest 60 years old.

Be honesty mate it never pans out like this at the finish line. The typical renter ends up with zilch because the mortgage is a forced savings scheme and money in the bank just gets blown. I personally know a guy who 19 years ago should have bought the terraced house he was living in, he rented the same place the whole time and never moved anyway but he just doubled down on doing the wrong thing, finally got booted out a year or so ago because it got sold. Could have bought the place at the time or the identical one in the same complex for about $285K and still be living there rent free today.

Good points. 

• The renter's 7% savings calculation is gross, my calculation is a 5% net return (28% tax).
• I don't normally split interest from principal, but actually it makes sense.  But yes principal payments are part of the home owner's "investment".  The interest = rent, principal = equivalent of the renter's savings.  
• $300 per week is inline with my expenses on a $1m property (rates/insurance/maintenance) in Wairarapa, but will obviously vary.

Big thing is the investment returns risk for the renter/upwards battle against inflation.  And yes the intrinsic benefits of stable home ownership, particularly with children.  

Killing the Host

The internet killed journalism, not the property market lol

It's deeply entrenched entitlement mentality all the way down...

I disagree with the landlord subsidy/accommodation supplement/whatever you want to call it (on a side note, wasn't there a National MP who was making some noise about it the other day?)

Let's say that the government wanted to do away with it - because ultimately it is a big waste of money that just inflates rents. 

How would you realistically turn off the tap. I know you are passionate about rental issues, so what would your approach be? 

For example, if the government said 'on X date we stop paying out the supplement' you'd have at least in the short/medium term a whole bunch of tenants who suddenly can't afford (or can't afford more than they probably can't afford now!) their rent. I'd imagine that rents would come down over time, as ultimately rents seem to be a function of what the market will sustain, for lack of a better term, but the immediate impact would be total chaos.

Opposition parties would go apoplectic, the media would have a field day, there'd be the potential for real unrest. 

Same goes with WFF (which has always struck me as a glorified business welfare scheme insomuch that it allows employers to underpay/not pay proper living wages, and the taxpayer picks up the bill - plus the whole issue of potentially winding up out of pocket if you do increase your income and lose the credits). 

These systems seem so entrenched that they can only ever be tinkered with!

Jacinda handed out a 45% increase to welfare benefits, to the point that the average family on a benefit now earns more than the median wage.  With all that extra money why cant parents spend $2 a day to send their kids to school with a marmite sandwich and an apple? 

Reputedly might not be accurate, but one reason for ghost houses in the past has been speculation for capital gains.

Because tenants are a pain in the ass and trash the place. If you are not desperate for the money you don't need to rent it out and you don't need the stress. It was bad enough getting a decent flatmate over the years, as soon as I financially no longer needed one the spare bedroom stayed empty.

If that figure is true, then let's find out who the owners of these 40k empty houses are.  Not suggesting we dox them, but it would be interesting to see how many are owned by offshore interests.  Money laundering comes to mind, park it in a property in NZ for a few years.  Chuck another $50k or so in an NZ bank account and set up a direct debit to cover the rates/landscaper until they're ready to release the "clean funds".  

"There's reputedly 40,000 empty houses in Auckland. If being a landlord's a such a lucrative business, why's there 40,000 empty houses?"





Relatives and friends who have their main residence outside of Auckland, also own a residential property in Auckland to stay when they visit Auckland.  The reason they come to Auckland is due to business interests, visit family.



Note that these people may live elsewhere within NZ or may live overseas.



Would be interested in knowing how many of the empty residential properties in Auckland fall into that category.



 

What we have had is past retires selling houses that they bought at 3x median income to present purchasers buying at 8 to 10x median income.

This has allowed those older homeowners to sell at inflated prices and take a huge amount of debt-free capital gains. 

But as time has gone on it is now 6x median income homeowners reselling to 10x median income purchasers, so their capital gains is less, hence they have less to retire on than earlier retirees.

This is unsustainable, and change had to happen at some time. The longer it's left the worse it will be.

The change will cause problems, but if we don't do it now, then we can wait until we get to our mentor's position: Councils in crisis: Town Hall debt levels staggering, MPs warn (bbc.com)

What property crash? My neighbour just sold for $300k above CV. 

starrider  property crash, where exactly? 

Having children went from being a community and family virtue to being a planet destroying vice. So why should these intensely resource consuming/carbon emitting children be particularly valued now?

They are looking at our births - record low - and the boomer generation about to start popping off in large numbers, and are making a logical move (to them). I'm not defending it, but I believe that's the reason.

By 'they' I assume you mean the ruling elite. They should be transparent of what they're doing and why. It's not difficult. Mad Albo in Australia has not been transparent and people on the lower socio-economic rungs are being sacrificed for his cunning plan. While luxury car sales are booming, there is unrest on the other side of the tracks. 

All the imported prices over which nobody in NZ has any control.