The housing market ended the summer selling season on a soft note, with prices falling in most places and March sales volumes at their second lowest level in 13 years.
According to the Real Estate Institute of New Zealand, 6521 residential properties were sold in March.
That was the second lowest number for the month of March since 2011, behind March 2023, and was down by 36% compared to the peak of 10,151 sales in March 2021.
Prices were also weaker, with the REINZ's House Price Index (HPI) declining 1.2% nationally in March, with most of the main cities and districts posting declines.
The HPI was down 1.9% overall in the Auckland market, with the biggest decline of 3.1% occurring in Rodney on the region's northernmost reach, while Franklin in the south was the only Auckland district to post a gain for the month, at 1.8%.
Around the rest of the country the only major centres to post gains for March were Tauranga 0.1%, Hastings 0.2%, Napier 0.3%, Porirua 1.2%, Nelson 1.0% and Invercargill 0.8%, with the HPI for all other centres declining in March.
Additionally the HPI was lower in most North Island centres in March than it was at the end of last year, suggesting the decline in prices is becoming well established (see the table below for the regional figures).
The REINZ's HPI is considered the most reliable indicator of price movements in the market because it adjusts for differences in the mix of properties sold each month, while average and medians can be skewed by a shift in the balance of cheaper or more expensive properties sold.
The fact that prices slipped in most places during March is particularly significant because March is usually the busiest month of the year for residential property sales and signals the end of the busy summer selling season.
It is not unusual for prices to slip a bit as the market heads into the winter. But the early fall in prices this year could signal the start of a long cold winter for the residential property market.
A particular concern is the high level of stock available for sale as the market heads towards winter.
According to the REINZ, total inventory levels at the end of March were at their highest level since 2015.
The comment stream on this article is now closed.
REINZ House Price Index - March 2024
Volumes sold - REINZ
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96 Comments
1.9 percent is 22.8 percent decline annualized for Auckland and we haven't even gotten to the tough part yet with winter, job losses, cut down immigration and brightline change to filter through.
Where are ya spruikers?
Sucking up the lush 21.6% annualised gains in Franklin district I guess. FWIW I'm not a fan of this kind of metric extrapolation.
This weakness is entirely as expected by those with both eyes open. It's an awful revelation to the average one eyed Spruik. Opportunities are now opening up during 2024 for the FHB who waited and saved to ensure a more sustainable financial footing.
Indeed. When will the banks start to liquidate the stupidly in debt. Still surprised it hasn't started yet.
https://www.nzherald.co.nz/northern-advocate/news/whangarei-shops-closi…
It may not be long for these retail building owners. There again its non-indebted old money in Whangarei
Btw how are you going with your buy-up plans
Still looking on the res side but can wait for the rush to the exits after the flipper tax gets get rolled back mid year. Have closed a commercial deal for 25% off, and circling another one which only makes sense at at $1m less than owner paid two years ago. See how that goes.
The Brightline was never the "flipper tax" as flippers (a) have always paid tax on their profits regardless of how long they hold the property, and still will, and (b) no flipper holds a property for 2 years to just "beat the tax man". They need to be in, renovated, and out again in the shortest space of time before holding costs eat all their profits. The Brightline was introduced to avoid having to try to prove the "intention" test and make life easier for the IRD.
Yes, it was a replacement for honesty to try to address rampant tax evasion.
Perhaps the the intent and impact were exactly that due to owner dishonesty. We are talking about the speculators holding for up to the last 9 and a half years. Watch this space.
Down down down in ponzi town...
Tell him hes dreaming
Can I just ask, is there a comma between ... 1m less...
Good luck!
Thanks. Leveraged spec commercial with no income is indeed bailing out.
Retired Poppy.
At last some figures and even pics for you. Remeber last year I said it will take me a year. Well 11 months ago. Here it is 11D Exeter St Waimate Sth Canturbury. Go to trade me and see it for RENT. So figures purchased 11B Exeter 18 mths ago for 328 000 on a quarter acre. Rented for 420 a week subdivided the section and built this on the back total cost 270 000 at moment inclededs everything but the legal cost of subdivision so total council contributions surveyor everything. So everything all up house in front plus new build comes in at 600 000. Rent income 960 a week. The new house values between 570 000 to 630 000 but let's say 500 000 still a good equity earner. Big point here NO MORTGAGE on this I don't need a mortgage if I am just going to cruise for the next year but because it's a new build (100% deduction) and I am looking for my next project to shift my caravan to and live at I will put a mortgage on it. Total debt to asset will be 35 percent at worst case scenario. So look at bedrooms (for the ignorant who called me a slum landlord) they are average as I don't will repeat I Don't want someone shifting in and over crowding the house (infrastructure). Notice the raised gardens which every house I have built (17 now) all have which no tenant has ever used to grow veggies in. Hence my wife maintains the gardens. Buy like you said you love the good old quarter acre well be like half of the home owners on the street (block) were this is 18 yep 18 houses I could do this to while half of them grow Ford Nissan and Holden veggies in them great for the kids to play around. And for the git that called me a locust can you provide a rental like this or would you perfer the old cold damp sh..holes that are out there. And finally for the ones that say high town etc Google Gary Rooney (not the footballer) he is investing large amounts of money into the ares. And can you make these kind of returns in Auckland. Have a great day
Good work. Be proud of what you've achieved, and don't worry about what anybody else thinks. That should hopefully make your posts a little more concise.
https://media1.tenor.com/m/Iccl_wfwIdwAAAAC/despicable-me-minions.gif
Now Colin, with ownership in focus, would you like to see houses become more affordable? For some, it's welcome news that house prices are falling.
RP houses are very affordable outside Auckland. Hence why I harp on about shifting out of Auckland. My step son who is a self employed electrical in Auckland cannot believe what the sparky down here makes. Yet my step son rents and old sh.t hole at 650 a week. Spend a couple of hours a day in traffic. Meanwhile the young sparky down here owns his own home has a nice Ford ranger 5 minutes to work within Waimate and goes fishing hunting most weekends. School leavers down here go to work at Studholme dairy factory or the two freezing works starting wage 70k a year approx can't get enough workers and both companies promote further Learning careers etc. Problem is most people especially Aucklanders. Most people buying and moving down here are from the north island. Finally why do people think they need to own a home. I have lived in a caravan the last 12 to 13 years and people can live very nicely in a modern self contained caravan yes mine is well over a 100k but for 50 to 60k you can get good ones. NZ should look to the states and look into those trailer parks. Yes I buy property to do what I have done here but that is utilizing my skills and doing what I know. If I was a share broker I would be on the share market. But my main point is. Is there is still very good money to be made in property no matter what happens in the future.
Biggest issue with caravans is council bylaws being a huge pain in the ass, although I imagine a lot of the smaller councils are probably less strict than some of the bigger ones.
Lived in Christchurch 10 yrs in caravan if self contained no issue. But my point is trailer parks. Quick and easy to set up if we had a housing shortage govt could make things move
NZ Dan can't be good at everything and as I don't waste tome on screens as that don't make me money
To be honest 90% of the commenters here, myself included, wouldn't have the skills and knowledge of how to build a house with their own two hands. Good on you adding to the supply! It's a lovely area down there with so much in nature to access nearby.
Nice result.
Would I be right in assuming that your own labor comes at $0 per hour? Not knowing how many hours you put in, it's not possible to calc how much you 'paid yourself'. But one thing is certain, your hourly rate wasn't reduced by the tax man. But if you sold, what then?
Correct on hourly rate and yes if I sell wether in 1 yr 10 yrs 20yrs or a 100trs I will pay tax as NZ has a CGT as soon as you subdivide you are classed as a developer and are liable which I am more than happy to pay. But when I have done a project like this my plan is always to hold the new build a minumun 10yrs as it dosent need any thing done to it. So for all that work I put into it the next 10 yrs pays me back also the next 10 yrs will be the largest capital growth on this property. Hence why I can't understand people who develope or do this and then sell. I look at holding and providing a nice rental property to good tenants and pretty it all gets left to the dogs home to sort out and pay the tax
Were you to sell tomorrow, which would be greater: the PAYE tax if you'd have built the same for someone else, or the CGT?
(Like you, I've kept a few of the properties I've developed. Nice steady yields. Sometimes adding a mortgage to them can work out well - which looks like you could be doing at some stage.)
The CGT by far cost 270k sell minimum 500k CGT on 230k AR 28 percent. As I don't hide behind a trust or company
Colin - stop giving away the secrets that some of us use to our benefit. And ignore those who criticize your achievements! Be well!
While I agree with you totally I get fed up with alot of these very ignorant usually over qualified over paid office/civil servants that wouldn't know what a hard day's work is. And be moan people that can make good money with their hands and think out of the box. Yet would hate a full day in the mud and cold
In the last few weeks 6 or 7 houses have now gone on the market close to me. Looks like some cant wait any longer now and have to sell/move on. That retail news out of the US overnight again supports fading hopes of interest rate cuts this year. Some will have to now sell at 15 to 20% below the 2021 highs.
In Auckland they are already 20 percent below 2021 highs. Try closer to 40 percent by the end of the year. Some people are going to lose their shirts.
Yes where I am the houses that were 1.2 and 1.3 in 2021 have been selling for 980.
Where are they selling today relative to 2019/20 though?
"Where are they selling today relative to 2019/20 though?"
Closer by the day. Perhaps soon you'll have to move the goal posts to 2017/18 or earlier to redeem your gain.
I hope they fall more so I can buy more, you on the other hand RP will be miserable all day.
"I hope they fall more so I can buy more"
How could I be miserable when you provide such "cut n paste" Spruik speak as entertainment!
Thank you :)
They are probably selling at about 2019 prices. And many more soon to list when the brightline gets shifted.
Driving down gravatt rd & Gloucester roads in papamoa a couple of Sundays ago, open home signs for differnt properties scattered everywhere. No more than 100m apart for around 3km.
They are digging a pit 6 feet deep for themselves
We are back to Sep 2016 prices in Auckland in real terms (inflation Adjusted) already.
Comparison Median House prices Auckland
Sep 2016 Medium Price $850,000 plus 24% inflation since then equals $1,054,000 c.f. with current median price of $1,050,000.
Peak Nov 2021 Medium Price $1,300,000 c.f. with current median price of $1,050,000.
Effective reduction after allowing approx. 15% inflation since is -33.5% real reduction in house price in 30 months.
Those that are saying house prices never go down and timing does not matter have their heads in the clouds!!!!!!
Hoorah a person who takes account of inflation
Totally pointless as wages do not track inflation. Meanwhile back in the real world you have to find that extra $300K to buy the same house.
TM have released an update to show the total listings > 32k. So that cuts a minute out of my day.
45,200 right now, ~300 less than over the weekend. There's usually a drop off after the weekend then Tuesday and Thursday are the big listing days.
So given March is the big sell month, I wondered how many of these listings would be pulled from the market. However what's interesting is that listings have continued rising since the end of March. Slower pace than through summer, but still on the up ~4-500pw net increase.
Tony Alexanders real estate surveys are showing incredible weakness and this data shows its coming to fruition. Once job losses continue to accelerate (and a strong US economy that fails to weaken - which means no scope for RBNZ cuts) and record housing stock, its not painting a rosy picture for the next 6-9 months....
its not painting a rosy picture for the next 6-9 months....
It's all relative though isn't it, could be starting to look very rosy for some?
for counter cycle aware investors yes, but I think we are a small % of the population.... most newby PI really believe you just buy and hold and never sell.....
Its the entire
- Time in the Market vs
- Timing the Market
with todays fall it has destroyed the spruikers argument that the bottom was in Q4 2023.... its not its in the future.
Wow, it’s as if people saw the obvious coming a mile off while the spruiks played dumb with short term variance…..
Fire up the popcorn and get your 3D glasses ready, this one is gonna be bumpy!
I hope for the spruik faction they have some warm blankies for this crisp winter season.
Hopes and fears.
I hope the comments on this article won't degenerate into a spiteful "Spruiker vs DGM*" bitchfest. But I fear it will.
*Apologies to Dgm, not calling you out specifically.
The b****fest probably comes from insecurities and disappointments. People on both sides of the equation getting triggered
Boohoo, I have to blame someone for my lack, boohoooooo
Poor spruikers, must be like supporting The Crusaders......
Hay. Leave the baby Crusade team out of it.
Only if they beat the force....
Yep, it's exactly like the Crusaders, down now, but still the best performing of all time, by far!
Hahahah point taken
”Resilience” is a word that comes to mind
Those who continue to yearn for a “bursting bubble” will continue to be dismayed.
Today we have further evidence that whilst the housing market is cooling (as fully anticipated), it is showing true resilience in this softening economy and riding out the oscillations quite nicely.
The housing market is proving to be resilient enough through the current correction and it is set to deliver another soft-landing.
ChatTTP
Haha, very good.
TTP loves pushing these middle of the road phony takes of objectivity.
Nothing more than desperately trying to protect his purse.
ChatTTP 😂
Actually, resilience is real. In my suburb there are 20+ sections that have been advertised for more than a year. If sellers (can) hold long enough (possibly years) they will achieve their price (inflation catching up).
Many "rare", "urgent", "highly sought after" houses on the market for more than 6 months too.
"In my suburb there are 20+ sections that have been advertised for more than a year."
Is there one main seller of multiple sections? That could be the land developer who subdivided the farmland / undeveloped land into residential sections.
If that is the case, the selling price changes will be determined upon the financial resilience of the land developer.
During the GFC some land developers got into financial stress and sections were sold at large discounts to the original sale price by the land developer.
That's 4 main sellers, with 3 to 7 sections each.
Materials unlikely to drop, council contributions not going to, rates not going to. So to make it happen, land prices will have to.
The wise developers have already sold and not repurchased. They will wait until land drops to the point they can build affordable homes.
The market needs to be left to do its thing.
Aaaaaaaand REINZ website is down. Must be popular news.
The spruikers hacked it.. didn't want true info going out
Child
Yvil, the following is a little add-on for those who prefer a Rabbit Hole. For once in your life do yourself a favor and live by your own advice? I mean why prolong the suffering.....
by Anon_82 | 28th Mar 24, 9:41pm
You can mute/block people here if you want:
https://chromewebstore.google.com/detail/interestconz-commenter-bl/kbfa…
Don't feel guilty, we know it's you and your mob
Child II
Take a chill pill..house prices will empty your pocket over time
And when will the lies of Homes.co.nz and oneroof.co.nz actually show the truth.
At the bottom
Nah I mean the actual website is unavailable.
All of those "valuations" are simply data pumped through an algorithm, often have weird and wild fluctuations out of nowhere and can be manipulated by agents. Believing them is like using ChatGPT as your main source of news and information.
An RE selling can adjust they have no value
Homes.co.nz. Agent appraised. $200k up. 😂
Market means sales and prices
Sales are well down and relative to Auckland’s increase in stock are worse than they look
Prices are 20% below peak and bit more when inflation included. On sale massively up because sales so weak hence build up of unsold. No chance of a rate cut before Oct
So market will have no chance of pick up on sales or prices til Feb 25 at earliest.
No one should be surprised, unless they are blinded by their own greed. Big peak due to super cheap printed money, now transitioning to new normal cost of debt. Throw in a cooling economy and official recession the speculative bubble is deflating.
What will the new normal be...
I did dump some of our rentals over the last 2 years. Time to wait and buy again. Best Buy’s will be next 2-3 years.
Stocks are all time high. Hopefully lot of idiots will learn a lesson the hard way.
"I did dump some of our rentals over the last 2 years."
Trying to understand your decision making framework / line of thinking that caused you to decide to sell some of your rentals. What was your line of reasoning / thought process?
Since we have a massive Trade Deficit and budget deficit, the economy is in a quite a bad shape thanks to wasteful spending by last government. We simply borrow money to keep up. This can’t sustain and house prices won’t keep up. I was projecting 40 % price drop and we are half way there at 20%.
I wanted to lock in some of the gains by selling so if opportunity arises to buy again at bargains I would be able to do so.
I am still calling -10% by xmas
It’s already down 20% another 10% as you said and over next 3-4 years will be close to 40%.
Warren Buffett once said that it's wise for investors “to be fearful when others are greedy and to be greedy only when others are fearful”
We have not seen wholesale capitulation yet... its coming as listings have sky rocketed up... a necessary event for wholesale capitulation
He also said
Don't try to catch a falling knife
Very optimistic, TTP is that you?
Then I'll put a house under the tree.
Nz ponzi housing market the new Hotspot for the world's steepest slippery slide
Will the market capitulate through winter? Why, Yes, I think it will. [evil grin]
But price falls are unlikely to be large as the RBNZ will need to come riding to the rescue because price stability and financial stability must also be maintained and that simply won't be possible with the RBNZ driving NZ Inc. into a deeper recession.
Will prices recover fast? Unlikely. The RBNZ will not get carried away allowing a stimulatory OCR without also ratcheting up LVRs, DTIs, etc. Further, there is plenty of brown fields land available in most of our cities now thanks to re-zoning in the past 6-8 years and supply will start to ramp as the OCR comes down. So I expect a flatline (when adjusted for inflation) for many years.
Its hard to model capitulation as its non linear, however the RBNZ do have the ability to drop the OCR (with expected hits to NZD) but ever since QE , its unwise to believe that central bankers don't have powerful tools to impact where the base is, IMHO its -10% this year and -10% next year , by then the RBNZ will not want to see further price drops on average.
the 20% drop will start to match with the DTI ideas
Will this flow through to new house prices?
I havent costed a house build for a few years but am still stunned by what they want for them today
For those that thinks this is positive, remember that houses need to sell to be included in this. There are a ton of houses pulling up unsold.
At some point many sellers will need to adjust their expectations.
At some point many sellers will need to adjust their expectations.
Some vendors have expectations of 2021 prices and unwilling to "meet the market".
"Sometimes owners who needed to sell their house before they could buy felt they were losing money if they could not achieve the prices that were being gained back in 2021, he said.
That might be the difference of getting $10m in 2021 and only $6.5m in today’s market.
“So you get this log jam where they want to buy in today’s value but they don’t want to sell because it’s like their nest eggs and they can’t get income."
https://www.oneroof.co.nz/news/apartment-frustration-wealthy-downsizers…
This does not help our construction sector either. You’d be a mug to build a new house when you will be able to buy one far cheaper.
And developers will likewise be able buy underutilized land cheaper too. Plenty of big developable sections with one worn out house sitting on it in Auckland. Developers who don't need expensive finance will continue building and making a living.
To be honest it is not that bad. Sales for 2024 are only 10% behind sales in March 2019.
How much is any increase in the average/median price being affected by the huge number of new build completions happening, where owners are being forced to settle on the house at 2021/2022 peak prices?
House prices are not realistic so even a decline of 5% wouldn't change much.
People who can't buy a house, will not be able to do so in the future as well.
Once mortgage rates start to decline, we will see a big jump in house prices (probably end 2024 early 2025)
Good houses are still sold above CV
Where’s Wingman when you need him?…he’s done what other RE agents have done, gone into deep hibernation - leaving FHBs to pickup their financially batted lives, in which the NZ Realestate industry has proudly inflicted on them.
Data seems very regionally patchy with the low sales volume.
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