The large overhang of unsold properties is likely to create major weakness in the residential property market over winter.
Interest.co.nz measures the overhang by taking the total number of properties available for sale on property website realestate.co.nz at the end of each month, and deducting the number of sales reported by the Real Estate Institute of New Zealand (REINZ) the following month.
The difference is the overhang of unsold properties and it's currently casting a huge shadow over the market, and ominously, it's getting bigger.
At the end of March, realestate.co.nz had 33,245 residential properties for sale throughout the country, while the REINZ reported 5559 residential sales in April. That leaves an overhang of 27,686 unsold properties.
That's an increase of just over 12,000 properties since the beginning of the year, and and is up 21% on April last year.
It's the biggest overhang in nine years and could be even bigger by the end of this month.
With total stock increasing to 33,815 at the end of April, and sales showing their usual seasonal decline as we head towards winter, market conditions appear set to remain strongly in buyers' favour.
With so much stock to choose from, buyers can take their time finding the property that's right for them and when they do, bargain hard on price.
Price weakness is already showing up in the latest House Price Index figures from both the REINZ and QV.
As buyers' grip on the market strengthens over winter, it's likely prices will come under further pressure.
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149 Comments
I am still calling -10% by Xmas 24 from Xmas 23 levels.
Last night I had to take my daughter to soccer practice at long bay, I went up to the Torbay (I think) little shopping row, where there are two small bar and grills and an Indian. So its like 7pm on a Thursday, neither bar/grill had a single client, the Indian, which can probably seat 60-70 people had 2 people eating..... and I did not see anyone pickup takeaways in a 30 min period
I know its busier on a Friday/Saturday, but the only place doing any business was the small fish and chip shop. Oh and the bottle store ....
Its real bad out here, and I am hearing the same for out east Auckland as well.
Retail and Hospo are going to die before the OCR gets cut, their will be little left standing. Then the small standalone Commercial real estate values will be hit due to so many vacancies. I think this may be worse then the GFC where low rates possibly saved us, its smelling more like 1989/90 to me.
there are For Sale signs everywhere now.
Agreed IT Guy. I graduated from university in 2021 and I am the only one from my engineering cohort still in NZ. Not on holiday, moved for good. Why would any smart young person want to stay in NZ, there is no hope, just the worst public transport on the planet and paying rent to ya local Boomer who owns the whole street.
-SMG.
Which field of engineering are you in Scooter? I'm in mechanical. Seems to be a bit of work around but nothing like Aussie.
Doesn't seem to be a huge difference in pay but certainly more opportunities.
I was in civil but have since changed to the dark side (finance). All the best to you Clefton.
-SMG.
I find it kind of strange that, as in Oz yesterday, when announced that the unemployment rate had raised from 3.9% to 4.1% - thus putting the chances of an interest rate hike, to a cut. It would appear that being broke and unemployed is good for the economy.
Then I'm glad I am doing my bit for NZ
Here in Brisbane, we have a stack of kiwis sending in their job application in for few IT roles that we have going. The split is almost 30/30/40, NZ, India and Australian based applicants.
Are they based in Brisbane or planning to move?
Got 3 from Melbourne, one from Sydney and one from regional. At the moment, Brisbane is a bit of attraction for younger families wanting to escape Sydney and somewhat Melbourne. Still affordable housing, not so much apartments nowadays as they are getting pricey.
12 from NZ, mainly from Auckland and Wellington.
And Scooter what do you think has caused this. Do you think this has just been caused in the last six months bh this govt (this is the NZ economy) pr do you think it has been caused by successive govts trying to appease a minority while Uni students/slash school students try to tell the majority not to mine and use our resources like Aussie has done. Strange how those same protestors as soon as they get a degree head off to the biggest polluter per head of population who's economy is backed by digging coal out of the ground. Yet those young people cry climate change. Hypocrites
Were you trying to actually ask Scooter a question, or just push your opinion and argue a strawman?
Hint, we can see it's not the first one.
Thanks for your pateince Colin, just got back from a climate protest. I think the problem is all the boomers owning 10+ properties, renting the living daylight out of everyone, and doing absolutely nothing productive. A key word. Imagine if we had more companies doing R&D, creating exports other than dairy and logs (not that it's a bad thing, just shows the extent of what we actually do for the world).
-SMG.
Imagine if the general psyche was to get into building a business as the core wealth generator, outside of having a job. Instead, you are pushed (subconsciously) to property like it's the only option, much like you are pushed to getting a degree...
Seriously why does anyone sane want to risk their capital and get a company up and running these days. Its never been easy but now the odds are really stacked against them succeeding.
Did you see the disgusting case this week of the beekeeper ordered by bureaucrats to burn his hives under threat of heavy handed prosecution. There's no compensation or insurance available for the loss, you've just got to take one for the team. The bureaucrat interviewed about it cant understand what the fuss is about and denies they have power. From what I've heard its difficult enough to make money as an apiarist.
That’s the difference between business owners and title squatters.
Guts and mental fortitude.
I can tell you it isn’t the latter I have much respect for.
Ironically it's the latter that crow incessantly about how clever they think they are.
💯
Colin, you build homes and can then rent them if you wish, that is umpteen more times more respectable than simply leveraging an existing house to buy another and snowballing this to a portfolio of properties. Then again, I've no idea if you leveraged to build said houses, but at least you did the hard yards yourself to save money and contribute to supply. I understand scooters stance entirely, and the issue isn't just governments, it is that people are a products of the opportunities that they can take advantage of. Many snowballed portfolios of houses and are sitting pretty now, funded by renters and able to claim all sorts in tax relief from this as well. The youth wouldn't have a problem with it if it were still affordable for the average punter to afford a house as it was more so pre-2020. I don't dislike boomers as a generation, but those of said generation with the mentality that everyone can do the same things as they did in their life, still afford a house, while sitting on multiple properties spouting this attitude and mantra, are those that stir the generalisation and dislike.
Hi Scooter, 🛴
2021 is far to recent to draw conclusions.
Plenty of your University mates will return.
TTP
Doubt it.
-SMG.
Return to what? Half the overseas salary, double the interest cost and a Macca's small cheesburger combo at 8 bucks.
Great incentives - while dem Boomers finna be here a while sitting on their dilapidated heritage house nest egg earning tax free gains from the purchases they made in the 70's after being funded into education and getting milk delivered on their doorstep.
- Chubby P
I do miss the milk deliveries as a child (90's). Always seemed more personable to know the mailman or milk delivery folk.
"Plenty of your University mates will return"... LOL, NZ will soon to be new Waiting Room...
As an ex-Wellintonian and jaffa.. my recent trip back to NZ, just can't see the appeal as a resident, bloody expensive!
Yeah I'm not convinced CM. I've family in both Brisbane CBD and the burbs there and it ain't all that. In fact, the CBD based whanau holiday back in NZ (never Aus) and are planning to move back eventually. I get the appeal of moving but I also think many will eventually return.
Head in sand as usual
I would not bet medical care in the public system on that. Close friend has trained directly or indirectly over 80 specialists in the NZ medical system in their career. There are five still in NZ...
I read yesterday that graduate law students are now being paid $115k a year by top firms in Australia. Why would any top student want to study law in NZ - especially now that law schools are turning all the law subjects into Maori/Treaty ideologies that are completely useless to any NZ lawyer who wants to work outside of NZ.
$300 k for top grads in London, I shit you not... My daughter is 7th form, working after school in New world on min wage and was thinking about doing a gap year before Law at AKL.. now thinking may just go do law.
https://www.bbc.com/news/business-59949697
A professional recruitment firm says it is placing graduate lawyers at top firms on starting salaries as high as £150,000 amid a shortage of workers.
Alan Bannatyne, chief financial officer at Robert Walters, told the BBC people in many UK industries were quitting for better paid jobs amid soaring demand.
"15% is the minimum pay rise we're seeing, but some are increasing their salaries by up to 50%," he said.
"Unless something significant happens, 2022 should be even better for staff."
UK job vacancies have hit record levels since the economy reopened as employers scramble to meet demand.
This is a magic circle outlier, the UK is actually surprisingly low wage, you'd be surprised....
Definitely, I get paid significantly more here than I did in the UK.
Cost are about the same in Auckland as London. However the thing about the UK is I could do my job in any number of cities or towns with much lower cost of living, and most of which having equal or better infrastructure/entertainment as Auckland.
Over here I'm limited to being in Auckland/Wellington/Christchurch. With a heavy weighting towards Auckland.
Yet food and housing costs are much more affordable. NZ meat and dairy sold in the UK is cheaper and better quality then that sold in NZ.
Wage is always relative to living costs!
Please understand NZ is low wage which could be fine except the livings costs are exceptionally high.
Also your wage grows relative to years of experience & country of experience!
Saying a wage was higher after experience gained in the UK is nothing new as you would of course outstrip most who stayed in NZ without gaining that experience. Incidentally you took the place of those without that experience who stayed in NZ, many of whom would struggle to find similar jobs.
Should apply to the top Australian Universities - why waste time at Auckland? Kiwis are treated as domestic students fee wise, although you cant get student loans to pay them. But if you work part time you can fund them yourselves. I tell friends with kids now to make sure they have a college fund for their kids, like the Americans do, so they can afford for their kids to go overseas for University as NZ institutions are fast becoming a global laughing stock.
Can verify, I have a friend who moved to London in the last 18months and started on around 240k NZ. Had around 5 years experience practicing law in NZ prior after graduating.
Definitely try and guide her towards the gap year. The law job will always be waiting. Pay might be high, but they work you like an absolute dog in those London law firms.
The freedom of youth only comes around once though.
I’m the same and I graduated in 2009, most got jobs here and then moved in 3-5 years. We are lucky we bought a house in 2014. Crazy how during the election parties of both stripes talked about people moving to Aus and trying to keep them here but no one actively pushing policies to increase wages, improve the superannuation system and improve services
There was a difference - National's policies are clearly in favour of property investors. For anyone not yet in the market it was a strong signal to leave and that's what they seem to be doing.
This is not new... All engineering students know they face a choice: Leave NZ or Leave the engineering industry. Only a lucky 2% can find engineering jobs in NZ within 5 years, even those at postdoctoral level. Most will leave the industry. Some who have means can leave NZ.
The only graduates with job security and support in further training are those in the military, mostly the NZ Navy. Understandably places are limited and there are physical restrictions. Yet the irony is for their further training the NZ Navy also has them leave NZ to overseas training bases.
So slow clap NZ you successfully discouraged most health & STEM workforce and opted for expensive consultants who provide even poorer quality work considering most don't have the required training and review due to low national workforce. In the case of houses that is many not meeting standards with expensive failures and fraudulent signoffs, in the case of health that is severe surgical errors and lack of diagnostic services at GP & specialist levels for most conditions.
Overall the hit to NZ productivity is severe, errors and missed opportunities more likely, higher unnecessary death tolls and through this the drive to leave NZ increases even for those who left the engineering industry.
Likewise around my neck of the woods. There has been a lot of talk over recent years but this is different, it is impossible to not see how things have changed. City Center is dead quiet when normally you struggle to find a park, shops empty, cafes quiet, a lot of property for sale, cars for sale on side of road. Something is most certainly going down and it doesn’t feel good.
A colleague has put in a cheeky lowball offer on a Wellington property, 27% below the 2021 RV, and 'only' 33% higher than the 2017 sale price. It's been taken seriously, and is the only offer. He's pretty confident he'll get it. If he does, that would be a 32% drop on the 2022 estimated sale price, and the house would have sold in 1 month.
33% above 2017? Not what I'd call a cheeky lowball offer. ;-)
I'd call an offer based on a 3% per annum roi - about 22% above 2017 - a good offer.
But each property needs to be evaluated on its own merits.
Cheeky is in the mind of the offererererer. From the look it has been substantially renovated since 2017, and is in a sought-after area. Offer accepted, which will close a chain of sales. Realistic vendors and an excited first home buyer.
Nice to hear, I hope they get it and are very happy with their purchase.
That's not a low ball, many places are offered at 20% under CV in Welly, the CV's are just silly high.
CVs are solely for the allocation of rates. They are not a valuation.
The fact it’s had renovation work which is unlikely captures supports my point.
What do you think the "V" stands for in CV ?
People mix up the difference between Council Valuation and Commercial Valuation. One is for rating, and one is market trading reality driven by recent sales. Perhaps the term ConV and ComV should be used.
Mistaking one for the other is a con though.
The con in ConV is not an abbreviation for council. It is nonetheless appropriate.
It stands for an algorithm that does not assess each property but takes the relative location and proportion of rates to be paid. You cannot have a CV without the C which means it solely assesses the council perceived value of the council services a property benefits from e.g. inner city, or more upmarket area with good high maintenance public spaces, leads to high rates, poorer areas with little services lower rates. They split it also on the perceived ability to pay as well as land areas (regardless of land type e.g. large high slope & difficult to stabilize can have more rates to be paid then a nearby flat section smaller that can be developed further). The differences between leasehold, crosslease, and freehold are also not considered adequately. Hence Auckland city apartments selling for 10-50times less then the CV values.
It is trivially easy to challenge CVs as they ARE NOT A VALUATION ON THE PROPERTY. You can present any real valuation and get more then 30% off the CV to effectively pay less rates. Paying less rates proportionally, which in areas not seeing new council development, would be a moral duty to enable fairness in rates systems.
The CV number is better for each person if they challenge it for a lower "council valuation" to reduce market distortion from those who think the CV is a valuation (instead of joke of misadvertising) and to reduce the rapid increasing rates rises that are used to cover lacking council services in other areas and new developments. The CVs values have to increase in a large part most often due to increasing council costs, splurging on wasteful inner city events and luxuries, relative to the increase in new ratepayers. However the CVs are proportionate. There will always be a number of people who want higher CVs as a status symbol so those who challenge the CVs will be able to pay less rates in comparison to the original rates they would have been charged.
Are you really trying to use a rating valuation as a basis for a willing buyer willing seller transacting? Really?
Many many houses go for 2 times CV, how do you explain that?
I never said that HJ, I just asked what does the "V" stands for ? I'm pretty sure it stands for "Valuation"
I would happily take 20% under CV for my Wellington house, because I've always thought the 2021 valuations were ridiculous.
For remuera suburbs and those surrounding, for a standalone, 3+ bed house, the typical sell is about 15% above 2017 CV. Rapidly heading to 10%.
excludes properties with significant renos since 2017
As above, looks to have had a new kitchen and bathroom, floor coverings since the last sale, so the vendors won't be getting much change from their renovations.
And therein lies the rub for many sellers ... Gotta be move-in ready to get a sale (or heavily discounted so it screams BARGAIN!)
I haven’t seen this at all- do you have examples?
Given Welly RVs were done at the peak of the market (Nov 2021) nearly everything there is selling well under RV - 30% under is not at all that unusual.. Hope he gets the property.
CVs & RVs are not a valuation on the property. The are not even a valuation on the area and suburb and those using them as a guide are even greater fools who cannot figure out why they keep increasing regardless of the actual sale prices. CVs and RVs can somewhat distort the market value because there are a great many fools. The NZ algorithms ensure the rates keep increasing disproportionately to the properties actual values and are really poor algorithms that have no understanding of developments on land, and no comprehension on topology either. They often tar properties in the same area with the same brush even though they can be vastly different. Other things that can affect value e.g. restrictions on future development (underground conditions) even though zoned in the area of higher development are not considered either.
For your own due diligence and that of your friend Get A Real Valuation By A Qualified Analyst
In your dreams IT Guy! hahaha...
You would have said that in Nov 21 as well, and look where we are now.... I am not sure you have as much credibility as I have re price prediction....
I think -10% is unlikely but certainly possible. I think at least -5% is very plausible.
I predicted flat through 2024. Currently I am about right but that could change through winter. IT Guy's prediction is more pessimistic but hardly outlandish Mendel.
Prediction is hard, if we see -8% I will claim a win.....
Johns up 10-15% is a serious outlier, there are many structural reasons why it cannot happen
I will be at the Long Bay Surf Club 4 to 5.30 today IT GUY - I will look out for you :)
I will be the tall chap with glass's chatting to a couple of other guys.
I live inland or I would buy you a beer, it was not that strip..... its the one up on the ridge before you drop down to the Torbay sailing club, what's that actually called?
I imagine that long bay area would have had a few souls at the bar last night....
Step away from the keyboard Paul.
Your first mistake was creating an account on here with your company's incorporated name.
Some people are stand up guys Time Lord and don't hide behind an anonymous moniker.
Torbay has been like that for years midweek they do all their business on Friday and Saturday nights, I used to live there for 15 years.
Agree. Same for hospo in Tauranga. Terrible. RBNZ running models showing sticky non tradables inflation? FFS better to take a drive around the country rather than using the decades of local council mismanagement dictate why they want to break the economy.
noticing the same thing - AKLD CBD last night was like a ghost-town - just a few ferals stumbling about
The falling cat died, and then bounced.......and then fell again.............
It hasn't fallen yet. People seem to forget we are still up 1-2% for the year. It might be a dead cat bounce but it is currently caught on a ledge. A gust of wind could dislodge it.
Yeah but that’s with low volume, and inflation still running pretty hot. We’re in an unrealised property crash.
There’s no reason for us to have 7+ median multiples. This was always going to happen.
Bank: Smile and wave boys, just smiiiiile and wayyyve
I've got a few mates who are keen to buy a house. Had to pull em aside and have a genuine word about the state of the market. They only read the spruiker crap put out by mainstream media and it was the first time they'd heard about the ever-widening crevace between buyer liquidity and sellers expectations. Feel like I've done my good deed of the day and hopefully contributing to the downward momentum.
Only going to see better and better deals if you can wait ~12 months.
-SMG.
Same. Talked a few work mates into avoiding peak stupidity over the last couple of years. Fortunately they listened.
Doing god's work brother. Amene.
- Chubby P
We should gain flybuy points for every little effort that contributes to derailing the toxic ponzi.
It seems Oneroof is picking locations that have gone up in the previous month using their own index. The strategy makes sense as there will always be a town that has good month. So they get to keep having stories about towns going up a lot in a month and they can ignore the overall market.
https://www.oneroof.co.nz/news/latest-news/hot-when-im-cold-dunedin-hou…
I always find it funny when they pick places affected by significant landslides, land risk zoning and flooding cutting off key connections as value for money while selling at extreme levels above the market values.
They might as well post articles also with inner city areas likely to be trashed by students and trashed in the literal sense of the littering and fly tipping that is a massive issue.
Or worse yet post areas in known high risk flood zones (high risk also in high water flooding). It amuses me these same RE sites post about areas with the same issues in Central South Island, Auckland, Wellington, Chch. Locals know the recent issues, lack of council maintenance etc. Yet poor investors do get caught and even poorer renters get screwed when things hit the fan. Even casual research has shown many issues in local news articles. When local news disappears (as it has been) we will have to resort to locals posting on SM about issues for local area research (which is slightly harder to do as the image & report location is not always very identifiable). Archival photos in long term storage, (e.g. libraries, museums, clubs etc) can show even more flooding, slope slipping & hazard history that is often not used in analysis, unrecorded, and forgotten or unknown by the last 3 generations.
Great work, I’ve talked a few down from the ledge so far.
And the others, well they think this is “buyers market” and have gone and leveraged to the eyeballs.
Didn't have the heart to point out the fact this was a dead cat bounce, now validated by the latest REINZ stats.
And so it began.
A new cycle of boomers...
Free Fallin....spec crowd racing for pepto 💊 💊 💊
is there blood on the street yet?
Wait till the mortgagees get going. 3 pages on TM so far.
Seems to be quite a few mortgagee sales that aren't being declared as mortgagee sales. You know, few pictures and only from the outside. They could also be embarrassed LLs too I guess.
Banks are leaning on people to move houses on, the full mortgagee sale is only happening if communication breaks down.... once you stop communicating with the bank they will force into mortgagee sale.
I think as we move into spring, the banks will force more into sales, a decent drop from here (10-15%) and buyers will start to emerge. A large forced sale in winter is a recipe for disaster. There are people like who would consider buying things if they dropped another 15% and mortgage rates came down. That would be 35-40% off peak for Auckland.
There are simply not many buyers at current ask levels, and current mortgage rates. to clear the market must move lower, this is not an opinion or prediction, its how markets with overhang clear.....
bad taste joke
-SMG
it's not a joke to me. I am waiting for the 'blood from the street'.
I think the big question is how long before it gets better? I suspect that those bank economists predicting 4%+ house price increases for 2024 are going to look laughable. Will 2025 be any better?
It's a good question.
One possibility is that once DTIs are firmly in place, the RBNZ slashes the OCR and the DTIs at the same time.
While the drop in interest rates would have a stimulatory effect; economy wide but also for house prices; slashing the DTI ratios would temper that effect on house prices.
Overall, house prices may not move much as buyers would find it hard to get bigger mortgages.
But there's a problem. Slashed DTI may have no effect on cashed up buyers, nor OO buyers with significant equity. And we shouldn't overlook the fact that reduced interest interest rates may stimulate the building sector back into life and supply ramps up again.
May you live in interesting times.
But maybe that significant equity, once it is realised by borrowing should be treated as income and taxed accordingly?
I'd not be in favor of a CGT that worked like that. I.e. no CGT if you're buying at or above the sale price of existing, but CGT on the difference if you're selling and buying something cheaper. To tax everyone on a sale would cause many to stay put and hog land. Even selling to buy cheaper might have that effect so perhaps CGT could be deferred somehow, maybe paid in annual instalments.
I've modelled many different ways of implementing a CGT. All have strengths and weaknesses. Ditto with countries that have implemented them. There's no perfect CGT tax model. Same with PAYE. But we already have that. CGT would be new and no one wants to pay 'more' tax even if the overall effect is neutral for most. The message that needs to be got across is the time aspect. I.e. better to have more cash in your hand while you're younger, it gives you far more choices on how you spend and invest.
My guess from talking to many LL boomers is that they see CGT as inevitable and selling before one is implemented is motivating many to sell or preparing to sell. (Me mum liquidated everything she 100% owns a few years back partly for that reason but mainly to distribute to her family.)
CGT works pretty well in Australia so I think we should just copy how they do it. They've already sorted out the details that work well enough and we wouldn't need to spend time, money, and debates creating our own.
In Australia any assets held before the date of the CGT announcement in 1985 were exempt. So selling in advance wasn't needed. Even if they said today is the cost valuation date, you wouldn't need to sell in advance. Back dating would be pretty rough if they did that.
But it is slowly getting better.
Prices are moving down and will in time return to a more sustainable income multiplier - that will be good for NZ.
If people get enough sick in their mouths, maybe they won't come back to the party ever... Housing might normalize to homes, and we will all live happily ever after.
Hans Christian Anderson
Policy lags work both ways. Even if the RBNZ slashed rates to zero today, it wouldn't be an instant fix. We've not even hit peak unemployment yet, and non-performing loans have increased by about 75% over a year. For commercial real estate, that figure is around 265%. We're looking at a balance sheet recession where everyone will be too busy sorting out their finances. Remember, the RBNZ's interest rate hike from 0.25% to 5.5% is unprecedented, a 2100% increase! With all the debt accumulated, a deflationary bust isn’t just a possibility, it is highly likely, and when it hits, it'll hit hard
To add some historical perspective, before the GFC, the RBNZ kept interest rates at their peak for a year, from July 2007 to June 2008. They began cutting rates in July 2008, aggressively reducing them from 8.25% in June 2008 to 2.5% by April 2009. But even with the aggressive cuts, the recession still hit hard, and the peak of housing non-performing loans stayed until June 2011. This shows even big moves on interest rates don’t always turn the economy around quickly
Concur. Methinks the RBNZ has got themselves (and all of NZ Inc.) in a real pickle with their actions during covid and post.
We could actually see a -negative OCR at the bottom of this cycle... We are assuming that our major trade partners will keep buying off us at current levels. It seems to me that China has a lot of problems to address, this will impact what Aussie and NZ sells to them. between Aussie and China, we could see serious trade issues. Our red meat industry may have structural issues here (ie too much debt). Tourism will be hit hard , as will international education sales and quite possibly milk (perhaps now is a good time for Fonterra to sell consumer brands).
I am starting to see the lack of liquidity on low end stuff like trademe, people will not do $1 res auctions anymore as there are not many bidders, its become a reserve based classifieds system. VW Gulfs have fallen a few k in asking price in just 12 months.
Everyone has something they are looking to sell, but not many are looking to buy anything.... Cars are something you really need in NZ, price action is telling.
The prices of used VWs have fallen into a Golf? ;)
You hit the nail on the head. ZIRP or NIRP is highly likely.
Looots of toys will be on sale!
Cars are a bubble as well.
Already seeing some interesting potential purchases coming up, e.g. a maxxed out late model Apple desktop with a complete monitor/accessory setup for thousands less than the new retail price - due to a business closure - and cars going for 15-20% less than what they would have been not too long ago (e.g. a 2010 Lexus LX570 for $45k when it would have been about a $60k vehicle until recently). Cars could be under particular pressure if you get the double whammy of the classic car bubble popping - especially for more mundane stuff that did become overvalued - and then general consumer spending pullback.
I've got some powder dry, but then the problem becomes threefold:
- If I wait longer, it will probably be even cheaper.
- Am I going to need that cash for something else (e.g. if my income comes under pressure or my wife loses her job)?
- If times are tough and the economy less buoyant, I'm going to think longer and harder about potential purchases
You’re absolutely right! That mindset where everyone thinks "If I wait longer, it will probably be even cheaper," coupled with worries like needing cash for emergencies (like a job loss), really fuels that vicious cycle of deflation. It's like a self-fulfilling prophecy. Everyone hesitates to spend, which leads to prices dropping further, and then people wait even more. It’s a tough cycle to break because it feeds on itself
Yeah and when the problem is debt what good is a -OCR... it's like the dealer injecting the already OD customer... or will the banks pay us to take on more debt?
And if our belief in so called debt/business cycles is totally flawed this may not be a "normal" cycle... but TPTB will keep trying to make it so... for the benefit of whom?
it's like the dealer injecting the already OD customer... or will the banks pay us to take on more debt?
The govt and banks seem super keen to keep dosing the housing market, despite the slowly diminishing returns (shrug)
A -negative OCR was nonsense when the RBNZ suggested it during covid and it remains a nonsense now.
aggressively reducing them from 8.25% in June 2008 to 2.5% by April 2009. But even with the aggressive cuts, the recession still hit hard, and the peak of housing non-performing loans stayed until June 2011
And those with equity already scuppered up more and more properties, exacerbating the wealth divide yet again, however prices were still reasonable then compared to the madness today.
And the RBNZ completely fecked it by reducing rates so drastically to .25% with no data or evidence. They were completely incompetent as economists to take into account govt. fiscal spending.
This is just a quick pause before the next jump in 2025.
House prices are unrealistic and people who can't afford buying a property, a -5% or even -10% change, won't make any difference, they will continue paying rent of $700, $800 weekly and by the end of the day, stay without nothing and continue to finance the rich people.
The population grows but the area remains the same, or even smaller due to floods, hazards etc..
The real question is do we want our children to stay in NZ paying tax here raising the next generation. Our grandchildren. Or do we want an endless wave of replacement from all corners of Asia...?
Real estate agents are pests. Every now and again you need a cull.
True. Their arrogance of self greatness know no end.
"Be quick"
TTP probably
I'm advertising a professional financial services job with a 90k salary. 0 applicants. If things are that bad, where are the candidates?
Applying for $150k jobs in Australia. $90k would be entry level, graduate salary stuff over there.
What, all of them?
The rest are probably hanging around in their current jobs hoping for a fat redundancy payout before applying for jobs in Australia.
I'm currently in Australia, staying with a friend who recently changed jobs. She got a $75k pay rise by moving firms Now on $240k a year, works for the ANZ.
I just hired a new sales person, 95k and a car, phone etc.. You want quality, you got to pay the piper.
lol, that 5k made all the difference.
What area of sales?
A part time job?
90k is nowhere near high enough to attract candidates, let alone quality ones. Not in NZ, and especially not in Aus
Yeah, I don't know anyone with a finance qualification willing to work for that.
I dunno. Lots of older, semi-retired and/or retired people would.
Buy they'd like shorter hours (and that may be all they need as many would do the job quickly). Many a 10-4? And many of the older people I know have a work ethic that would mean they'd be happy to put a few extra hours when there's extra work.
I'm semi-retired and I've worked for less just to stay fit, both physically and mentally. Usually for friends' businesses and on a temping basis or short cover. But my hours have always been short, typically 10-2, or 9:30 to 2:30. One business had me working from 6am to 12:30pm when another oldie would take over and do 12:30pm to 6pm to cover the day. Worked well.
Cant wait for July as all the 2020/21 buyers exit to lock in their tax free gains and relieve themselves of their cashflow drain.
Remember people selling houses inside the bright line only pay tax on capital gains, so those who are expecting to get less than they paid at the peak may have already listed. The big surge may not happen, cause it already has.
Peak prices was early 2022, so many will still have some gains if they bought in late 2019, 2020 or early 2021. It also depends on the area - while Auckland and Wellington have dropped, places like Christchurch are still hovering around peak prices. In my suburb, they are currently setting new price records well above CVs
Yeah, you’re probably right. I may have used a bit much logic in thinking those in question may have reasoned that they might be better to take a bit of a hit on price before the market drops any more and pay a wee bit of tax to minimize the net loss. Most are probably unaware what the market is doing after listening to their fellow optimists on msm and think that are still going to realize a significant net gain, even those who bought at the peak.
I suspect many are still expecting to get a lot more than they actually will in this market.
hence waiting
Yeah, I was going to say that. Lots of people still "think" they are sitting on fat gains, and are waiting to sell tax free. Unfortunately those paper gains may turn into actual losses once they meet the market.
More listings for sale likely, triggered by tax changes on capital gains.
It’s started.
Auction on 1 July 2024.
First Brightline auction 2024
https://www.trademe.co.nz/property/residential-property-for-sale/auctio…
LOL. Somehow I don't think there would have been much tax to pay.
(Last Sold on 18 Sep 2020 for $747,000 according to www.propertyvalue.co.nz)
Perhaps mortgage stress from mortgage rate renewal?
Mortgage rates in Sept 2020 were 2.82% (3 year) - 3.13% (4 year)
I have noticed a few more lowish bids at the B&T auctions. Some buyers are out there angling for a good price but not getting tempted to pay any higher. A vendor accepted a lowish pre-auction offer and at the auction it got no further bids.
Just had an associate sell on the 1st offer they got. Was on their 3rd house (traded up over the years) and it was going fine until a whoopsie happened and they will not be able to work due to another wee one on the way. Had to sell and move in with the rents or would have later been forced to sell as a mortgagee. It was a lowball offer, but I think give it another 6mohts to a year and the price will drop to what they got anyway.
The OCR is about to go into freefall, I hope to many people didn't take the banks long term fix bait..
Why? RB was pretty clear that they’d let us go into recession. Job’s not done.
RB, specifically Orr is known to bullsh*t...
Oh the job is done…I’d almost say they have done the job outstandingly well…next 6-12 months will show how well they have done 😂
I just can’t see it. Cheap money has created the headache, why do it again?
Current rates are far closer to neutral than high.
A good friend of mine just bought his first home in Hunua for about $750k that has a CV of $1.125m, that's pretty much exactly 1/3 down. Pretty severe buyers market for sure. Very few people have the money to play the game with the cost of debt right now.
"has a CV of $1.125m" the fact you even mention the CV means you had no understanding of the property actual value & market value and instead rely on the fairy tale number picked out of failing council management. It could have a real market value of 650k yet you placed your argument and basis on the fraudulent CV number. If it is not a brand new build on good land it will likely be close to 30%+ less then the council CV. Depending on the age of the build and materials you could be looking at near 40-50% less (in NZ ironically some much older buildings can have higher values due to severe quality and failure issues in newer ones). Some properties would then also be less depending on the land conditions & restrictions. So yeah Never Assume CV Is A Value. Please do due diligence and get trained analyst reports first. Even a casual building review often reveals massive discrepancies. You can also gauge the actual market value based on assessment of over 100 comparable properties & sale dates in the area. You can train in property valuation analysis & building valuations but rarely do people do that actual work. Instead many are relying on RE agents values (massive fraud) or CV (completely unrelated to the property itself).
I’m dumbfounded that on this website you are having to point this out. Yvil looking to argue for CV as well really makes me wonder who is on here.
ass clowns
I assume it's this place. Last sold in 2018 for $787k.
So prior CV or there abouts. Really shows the stupidity of lowering the ocr to far and holding low for to long.
Is it is interesting that most people see a strong Aussie economy as supplementary to the NZ housing market. I.e. when Aussie is a attractive, the NZ house prices.go down. That may be true in the past but for.many NZ region, a strong Aussie economy is complementary to the NZ housing market. I.e. When the Aussie.market is strong the NZ house prices.go up. Queenstown is a good example. There is a huge amount of reparations from Australia to NZ these days.
by 1689 Baptist | 18th May 24, 9:02am
Is it is interesting that most people see a strong Aussie economy as supplementary to the NZ housing market. I.e. when Aussie is a attractive, the NZ house prices.go down. That may be true in the past but for.many NZ region, a strong Aussie economy is complementary to the NZ housing market. I.e. When the Aussie.market is strong the NZ house prices.go up. Queenstown is a good example. There is a huge amount of reparations from Australia to NZ these days.
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Is this reparations, for the economic war, that the Australians have clearly won?
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