Average residential property values continued to decline in September in spite of the arrival of spring, according to the latest figures from Quotable Value (QV)
According the QV House Price Index, the average value of New Zealand dwellings was $901,920 in September, down from $905,357 in August.
That's a decline of $3437 for the month, which means average property values were declining by the equivalent of almost $800 a week last month.
In the September quarter average values were down -1.6% nationally, with the biggest decline of -4.2% occurring in Napier.
In other main urban districts, Auckland's average value was down -1.7% for the quarter, Hamilton was down -1.2%, along with Tauranga -2.1%, Wellington -3,2% and Christchurch -0.8%.
The only major urban districts to post gains in average dwelling values in Q3 were Nelson City 0.6%, Queenstown-Lakes 1.0% and Invercargill 0.2% - see the table below for the full regional figures.
"Spring has sprung but green shoots of growth remain elusive," QV's latest housing value report said.
However, the rate at which values are declining has slowed, from -2.0% in the three months to August to -1.6% for the three months to September.
The rate of value decline also slowed in most main urban regions.
"There seems to be a spreading expectation that interest rates can only go one way, and so we're seeing more people at open homes, in auction rooms and browsing for property online," QV operations manager James Wilson said.
"And so it certainly seems like a general uplift in property values is now on the horizon.
"But despite growing confidence that we're through the worst of it, the conditions aren't yet conducive to growth," Wilson said.
"The cost of borrowing still remains relatively high, the cost of living is restrictive and there are significant worries about job security, especially in Wellington.
High levels of stock on the market were also having a dampening effect on prices, Wilson said.
"Generally speaking, those who are in a position to purchase still have a raft of different options to choose from right now, especially within the main centres.
"So there isn't so much pressure on prices currently, with more than enough houses for sale to meet the current level of demand."
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187 Comments
Ancient history including sales from way back in June.
The dawn has long since dawned lol 🥂
Good one Cote -
Coatings see Dawn's and Bottoms at every twisting and downwards turn.........
- Much like a blind man reading the tea leafs, in a blackened closet.
Disappointed he is, with every utterance, being found to be false.
The facts that spruikers ignore, is that this market needs mortgage rates below 3% - TO JUST SUSTAIN CURRENT OVERVALAUATIONS!
No market value valley, until 2026 to 2028. Another -15% to -25% to drop......
@ZNG hahah another cracking post
NZGecko I would not disagree that spruikers ignore some facts, conversely I would also say the same for DGMs.
The market got to its hights with 2.9% interest rates and positive vibes. Its come back a significant amount since then and there has been wage inflation.
I wouldn't disagree about there being some downside to go but I think -15% to 25% nominal drops from here are wishful thinking, rather than economic reality. Interest rates falling and the idea that a flat or down market (economy) will be "allowed" until 2028 is not something I would bet the house on so to speak, particularly if I was a home buyer waiting on the side lines.
I think its now close to the bottom and arguing about 5% or 6 months here or there is not the be all and end all for any person looking to buy a long term family home.
People in general would do far better just researching for more than 2 weekends of open homes, and buying quality and value in any market.
Ireland began dropping interest rates in 2008, and finished the rate easing cycle in 2010. Do you know when house prices finally began rising again?
2013. Thats FIVE YEARS into the rate cutting cycle before the housing market recovered.
https://tradingeconomics.com/ireland/housing-index
Exactly. It's incredible, but not surprising, that almost ALL the spruikers ignore the last 30 years of housing crashes, in countries (Ireland, Canada, USA) much wealthier than NZ.
We don't know when this housing crash will end, but in 2022 I fully expected the timeframe to return to the peak would be 5-10 years. Excluding any black swan events like another Covid19 issue, USA civil unrest or war in Iran and the middle east.
starrider .....you're forgetting - there will NEVER be a property crash in Nuzullin' cause we're duffrunt !
Aroha! We are sPeCiAL
K.W.,
I don't think that one is inflation adjusted? This one shows both.
Ireland (National) House Price Index
An even less pretty picture, ay?
I.e. in inflation adjusted terms ... property prices still haven't recovered !!!!
(I expect NZ to be no different, btw.)
Thanks. Not pretty at all.
Even in nominal terms it took 15 years for Irish housing prices to return to the previous high.
Except we are not in Ireland. That's like arguing that a banana is likely to turn red like the apple simply because they have somethong in common - they're both a fruit.
What similarities does Ireland share with NZ? Does their economy match ours?
Do they have similar social and economic issues facing the country?
What level of debt are they in as a country compared to NZ?
Are the wages comparable to the expenditure?
Does their government have a similar approach to ours? Bearing in mind we just excused an extreme left wing socialist government for a more centre left wing government.
Do they have a similar demand for housing?
Does it cost a similar amount to build? How's the pressure with obtaining finance for a mortgage? Does.it compare with our country? In the US for instance you can bump up or bump out a house for around 50k quite comfortably. Here 50k would get 3 walls and a door installed by the time the red tape of consent was done, and would take triple the timeframe to do it in.
Your not comparing apples with apples. This is the same argument the gender dysphoria group attempt to make when trying to confuse the mass there's no difference between men & woman.
You will likely find each Western country has their own set of rules, regulations and issues facing each country. How that impacts each country will be different depending on many different factors. To assume that it's a safe bet that house prices won't trend upwards again for at least 5 years because that's what happened in Ireland is at best completly nieve, but mostly, it's irrelevant. Why? Quite simply because we are not in Ireland. Many Labour supporters thought we were in N Korea for the last 6 years.
There is a simple overriding universal economic law that shows why some countries are more affordable, or not.
https://demographia.com/dhi.pdf
Every other variable is affected by it.
Old man shouts at clouds
Are there any reasons why NZ might be any faster or slower than Ireland's property debt shakeout?
I wonder if the Irish were/are as obsessed with property as New Zealanders seem to me to be? I hope it's just recency bias at work but I don't rule out property prices rising again if we get further rate cuts. Edit: Not suggesting the OCR won't be cut in future although my guess is they hold the rate tomorrow.
T- 24 hours hit me up tomorrow rate 0.75 drop tomorrow ?
Real estate creates revenue, so why wouldn't the Irish be obsessed with real estate like NZ. You seem to think it's an exclusive NZ only interest, when you'll likely find most western countries accross the board enjoy dabbling in property.
The OCR was cut last time, after they indicated they were cautious to cut not too quickly before inflation was brought back under control, Indicating the first many of cuts to come. The last OCR cut has yet to have any effect through the market and to people's pockets, and so there's no doubt in everybody's mind that another OCR cut Is imminent, and much needed. The only question is by how much will they cut it by.
Although a generous. 75% would be much needed, I am not confident they will cut this far this early. Given the last OCR cut was .25%, and we have two more reviews before Christmas, it is looking much more likely that the next two OCR reviews will see .25% cuts each, bringing the total to .50% before Christmas. If a .50% was to occur this time round, it would be a nice surprise.
NZGecko, much like sinking housing valuations, your posts just keep getting better and better!
Many a Specu-frog slowly getting boiled.
Only 1.4% are behind on their mortgage payments, and that would include owner-occupiers, so only a small percentage of investors are in trouble.
And, for the record, I love NZGeckos posts!
Only 1.4% are behind
TronMVP, this is undoubtedly good news as historically it's been way higher. As you know, up to late 2021, a lot of equity had certainly built up in an unusually short space of time. Fast forward to today and picture banks working their hardest to avoid mortgagee sales by utilising options such as mortgage holidays, interest only or even term extensions - utilising this equity. It's also logical that as equity bleeds away alongside more entering distress, the reverse applies and more are captured in the zone of no wriggle room and therefore no option but to sell. On the ride down picture a snowball gathering in size.
As a way of mitigating downside scenarios, it's sound advice to urge todays FHB's to take the time to build large deposits and make lowball offers. With unemployment steadily rising and a still deteriorating geopolitical situation, I think there need be no hurry. For several reasons, its a true buyers market.
Saving a large deposit for today's prices only to be told by the banks and lendors that while it may have been enough for yesterday, it isn't enough for today. The last upward trend property prices in some areas were increasing by $2,500 per week, spanning a 10 year period. That's more than most people make per tax, let alone can save.
Even with a lower deposit, the repayments are still much the same as renting. If one can afford to rent an entire place, one is ready to afford the repayments on owner occupied with a lower deposit. There's no point being bitterly disappointed and disheartened with having saved 100s of thousands towards one's larger deposit, only to be told no by the lender. You make the figures work for you.
How do we know we are at the end of a buyer market? When prices start to rise again. By this time the chicken little property skeptics will still be disencouraging buying, instead saying "don't buy now, prices are rising too high, don't be in a hurry, just wait". See for them, their strategy is to wait for the opportune moment, but they do just that, wait. While everyone else around them sets themselves up with the security of a property, makes money, all the more they think they're smart by just waiting. Waiting isn't the same as investing or buying. Its never about timing the market, always about time in the market.
I doubt that very much so Gecko. Your over 100 years too late for "the big bubble burst" of 1920s. This is the largest decline in property prices some the 1980s, bigger still than the 08s GFC when priced fell just 6% on average in NZ and took just 18 months to recover, and still prices have only dropped by around 20% accross the country on average.
Another 25% drop is nothing more than wishful thinking from chicken little sky is falling skeptics, who wish to see their peers empires fall out of envy, so that they themselves can have an easier time to build theirs.
@GWGB - good comment - Thumbs up that
Ireland's boom resulted in lots and lots of new dwellings being built. The increase in supply kept prices down for years - to the point their prices still haven't recovered in real terms (see my post below). In that time, did builders all stop building? Nope. They didn't.
See where I'm going with those statements?
Personally I'm not expecting significantly lower prices, but according to the QV website data, the average house price in NZ went up 40% in around 1.5 years. Have we ever seen anything like that historically?
If you were to compare that chart on the QV website to a typical market cycle chart we are now past the 'return to normal' phase and heading down into the 'fear' phase where prices really start to collapse. Typically, the impact of higher interest rates hit hardest not long after rates are cut, so those two factors seem to be lining up for significantly more downside.
It's simple maths to see that there is at least a 20 to 25% of non-value added artificial restrictive underright in property valuations, that could be removed, without affecting the amenity value of the property.
Present govt. policies are trying to remove this restriction, and I think the banks can see that this might happen.
And the easiest way for all property investors to increase their yield is to realize that their properties have a lower value.
Only that June is not part of September quarter.
Brent crude jumped above $80 and wholesale rates are up sharply, suggesting that markets won't be pricing aggressive rate cuts.
It is in the economy's long term interest for RBNZ to bring rates to 3-4% and hold there for longer.
Have the "vested interest" spruikers et al ever considered, that if oil prices increase, with the middle east situation, interest rates worldwide may halt any more decreases ?
Yes - indeed. This is certainly an event out of left field that could easily have wide reaching downside consequences. As we know, these geopolitical tensions have been simmering for a while now and destined to explode at some point. Our economy is vulnerable and this is as welcome as a hole in the head.
100%. On the contrary, racking up more private debt owned by foreign capital markets to increase paper wealth is a sure shot way to make our economy more vulnerable to external shocks.
Yip US 10 year yield back above 4% now and the 2/10 yield is flat once more and could again go negative - just after going positive after some crazy period of around 700 days (the only comparison to this was the east up to 1929 market crash and subsequent depression).
All bets are off in my opinion - I have no idea if rates are heading to 0% as a result of a deflationary depression or 10% with stagflation - but something isn’t right - the 2/10 shouldn’t be heading towards negative territory again if we are on a path to recovery.
‘You can't make this up:
Bonds are falling like the "Fed pivot" is cancelled and the yield curve just turned NEGATIVE again.
The last time the yield curve was negative was the day of the Fed's 50 basis point interest rate cut.
What just happened to the "Fed pivot?"
The 10-year note yield is now up 40 basis points since the "Fed pivot" began on September 18th.
For the first time since August 8th, the 10-year note yield is above 4.0%.
Just days ago, markets were calling for 2 MORE 50 basis point cuts in 2024.
Talk about a turn of events.’
https://x.com/kobeissiletter/status/1843306086532788267?s=46&t=MUwQeKa7…
Everybody has a "vested interest" when it comes to housing, most particularly those that dont own one. If interest rates worldwide may hald more.decreases, how is this a good thing for tenants? Who can't save enough for the deposit. See it's all good and well being deluded into thinking property related issues only effect those who own, and out of nothing but pure envy and scorn wish every bit of hardship coming due to them for daring to achieve more than some others, but it's all of a sudden not quite so funny when one has a rather sobering realization that property woes tend to negatively effect those that dont own the most. We've seen this happen over the last 6 years under Labour. Yet you continue to advocate for further hardship to half the country that rent? How does "whipping thier master" help more.tenants into homes?
If interest rates stay high, guess where rents will go? I'll give you a hint, it's not down. Even if rents dont nesasarily decline when deflation, they certainly won't increase by the same margins theu have been over the last 6 years - up over 60%.
High interest rates impacts everybody, whether you own or rent,.whether you want them to or not.
All this is easy to solve ...
1. Accommodation supplement gone ....NZ can no longer afford this kind of "corporate welfare" and landlords will have to accept what the market can afford and get out of the taxpayers pocket. If you are running any other business, that's how it rolls.
2. Capital gains tax on all residential property except the one and only one family home - no exceptions
3. All immigrants have to reside in NZ (and NZ only) for at least 10 years, before being issued with an NZ passport, to stop using this country as a back door to Australia etc, then you get people that truly want to make a life in this country, not just using it as a "stepping stone" .
There you go - housing affordability solved for all of New Zealand ...what's not to like ?
While if you borrowed too much, without realising that interest rates could go up - not my problem and you should of financially educated yourself, before making such decisions.
2./ include the family home, no exceptions
3./ We could amend this but 10 years without leaving the country is a bit much. The current citizenship settings work out at only allowing to b outside New Zealand for 90 days in any 180 day period, so people have to plan their travel wisely as one day over is one day over - line in the sand. I semi-agree with the timeframe being extended given the large granting of permanent residency after lockdowns, however the travel rules are adequate.
@interesting1234 .....So you are saying to include the family home for CGT - wow ! I was thinking that it would encourage people to improve their own property and when they go to sell to buy another home, there wouldn't be a tax on any gains - as again the family home.
Yes, went a bit overboard on the 10 years without leaving the country - so yes, can still travel but NZ must be their primary place of residence
Yes CGT on all residential housing as it prevents distortions in the market by people using it as a loophole. Many would just move from home to home every few years flipping still as it would be too easy. People can therefore improve their homes for their own personal use if they wish, and it may add value by making it a more attractive home, however improving a home on the basis of seeing a hefty profit off of it would still be alive and well, the profit may just be a bit less than before. Even playing field for all.
The current citizenship settings work out at only allowing to b outside New Zealand for 90 days in any 180 day period
Unless you're Peter Thiel and you just pay National to give you citizenship without having to live in NZ at all, 12 days in the country and a nice donation to National and boom - citizenship.
Crazy Horse:
1. Remove the accom supp & see the emergancy social housing waiting list rise even further than the 548% in 6yrs under labour? Without this tenants that require this in to pay rent will have no other option. Removing the accom supp condemns many tenants to homelessness. This is a tenant subsidy, not a landlord one.
Plenty of tenants do not require this supplememt to pay rent, the ones that do would only be able to turn to the gov to house them, with the private sector then be known to only rent to elite tenants, who can pay rent without any gov financial assistance. To take away the accomodation supplement is to create further homelessness, further tenants from home ownership, yet you advocate for this?
Labour had 6yrs to remove this, they didnt, as they too also recognize this is needed in our country for tenants to pay rent so further records dont become homeless.
2. Taxing something further neither makes it more abundant nor cheaper. Basic business & economics 101. What you advocate for yet again is further envy taxes aimed at the haves, in an attempt to improve the have nots situation. We had 6 years of tampering, taxing, penalizing, restricting policies under Labour - the results was the fastest increase of poverty, homelessness, government wmergancy social housing wait list, property prices, rents, and crime in this countries history. We've already said no to continuing this trend approach when we voted them out last election.
A fair & non biased tax system would include the family home, as you said there are no exceptions. A fair & non biased tax system would also tax inheritance, kiwisaver, stocks, bonds, mutual funds, crypto, generational farms as well as family homes. After all, profit is profit, it is unbiased as to who makes it and how. Now a fair & non biased tax system would either tax all forms of profit, or none at all. Personally I'm in favour of the later. What you advocate for again is yet another biased tax system to replaced the current tax system you believe is biased again ones favour. That's like Ford advocating for a tax on Holden cars. Again, taxing ourselves to financial prosperity is a fools game, you've been decueved by the Labour socialist crowd.
3. I would partially change this to all immigrants would have to reside permanently in NZ for 10 years minimum before being able to purchase a house here. That keeps the wealthy foreigners from instant access & gives Nzrs more of a chance. If NZ really becomes their home, they won't mind waiting 10 years. It's our people first. Plenty of people get too distracted by whats going on in other countries. We have our own country with its own problems to sort first.
Your solution Crazy Horse is of course the typical socialist view, tax ourselves to financial prosperity, penalize all those who have more than the poor think they should have, all in the name of.equality - as long as we are all equally poor. None of this penalizing of course assists more tenants into homes, reduces the costs of a tenant, or causes more.to own homes. Your solution offers nothing more than what we've already had for the past 6 years under Labour. 75% who voted did not vote that back in a 3rd term. The country has spoken, and we've said no more of that. Incentivize, not penalize is the way to go.
GWGB ...... I can't stand what that Labourious party did to this country in it's 6 years - spending money like "lolly water" with no idea how to pay it back, so I'm way more of a free market libertarian, while if ANY business can't stand on its 2 feet WITHOUT govt subsidies etc - let it sink. Does no good for the productivity of this country, the lowest in the OECD anyway, while NZ is now a "basket case" economically, while Australia and the US are ahead.
1. Accommodation supplement - use that money for state housing if rents are "unaffordable" for certain folk ,while the tenant can work out between them and the particular housing authority what rent to pay, instead of it going to some landlord, which goes to the banksters in the end anyway. New Zealand has been living way beyond its means (along with so many other countries) While all other rents would "meet the market" and encourage people to save and aspire to owning their first home. While what makes me laugh, is these accommodation supplements are ALREADY a tax, and you're saying I want to increase taxes ?
2. CGT - Every other western country has a capital gains tax on investment property - give me 5 good reasons why NZ should be any different ? While I was only talking about ONE tax, so those other taxes have no relevance here. While I have already exempted the one family home.
3. Why restrict immigrants that intend to stay in the country indefinitely the ability to purchase a home ? I am talking about the ones where they come to NZ and say to themselves , "well, if it doesn't work out here, we'll just go to Aussie" because that's where we really wanted to go in the first place, but couldn't get in.
"Your solution Crazy Horse is of course the typical socialist view, tax ourselves to financial prosperity,".......as above, not a socialist at all, business is business and let the free market decide ...while my mantra is "IF A BUSINESS IS NOT MAKING A PROFIT, IT SHOULDN'T BE IN BUSINESS"
Crazy Horse:
1. If you are no supporter of Labour then you are fully aware that your suggestion to re direct the accomodation supplement towards "using that money for state housing if rents are unaffordable" unobtainable, and never going to happen by any government.
Labours own data shows the net no: of KO new builds since Oct 2017 is only 2601 houses. Labours actually demolished or sold 4,700 houses in the last 5yrs, contrary to their claims they would stop the "State house sell-off".
Labours bought 1,400 houses in the last 5yrs & added them to the State house stock. These arent new houses being built by the Labour, theyre private homes converted into state homes.
4,000 of Labours "10,000 new houses" are redirects, where community housing providers lease properties from private LLs, then house a social housing tenant using a gov subsidy, again these are not new builds. Labour was abysmally slow at building new social houses.
Considering National have only been governing for 10 months, we have yet to see their attempts at improving housing, we certainly know that Labours 6 years made it worse.
Re directing the accomodation supplement still does not help more tenants into homes of their own. Tenants still require to pay rent, they don't get a free ride, even with the government. Again, the tenants thay require this supplement to pay rent will be removed from the private sector on the basis on unable to afford. When they step out, another tenant who can pay will simply take their place. It's the tenants that require this supplement that are obviously government dependant on finances, and therefore highly unlikely to be able to save the required house deposit on their own merits, most particularly if further government supplements are removed. What you instead will accomplish is these people will become totally state dependant financially for life, never owning a property.
Considering 80% of all rentals are private landlords, and nearly half the country rent, landlords will have plenty of choice of tenants. Removing the accomodation supplement in the hopes it will "catch rhe greedy landlord" in a desperate bid for them to lower their rents, is foolish, and assuming that a majority of the countries renters require the accomodation supplement to pay rent. This is false. The private rental sector will remain for the most part unaffected, certainly the private landlords will. Want to reduce rents? This has to be justified. One does not advocate for the increasing of a landlords costs and risk to operate in a bid to punish them, whilst also then expecting rents to decline. This is not how business and economics works. Reduce a landlords expenditure, then one may have a justifiable reason to expect lower rents as a result. Higher costs to operate = higher rents. Get it yet?
2. There is already a CGT on property called the Brightline Tax. It was introduced by National in 2015, it's been around for nearly a decade now. Keep up. The fact that the time period stands at 2 years is irrelevant. Expecting an indefinite tax timeframe when being sold (and it would be at a large tax likely 39%), disinsentivizes people to sell. If peoples concerns are "greedy investor with hoards of property", then how is he incentivized to sell all these properties liquidating them to the market for a FHB is the tax penalty to do so is so high? When one has to sell, of course the additional tax will be considered, and simply tacked onto the price expectation, ensuring each owner gets the after tax amount they desire, again at the expence of the FHB, who of course would you paying significantly more for the property than they would habe elsewide paid. I fail to see how adding more tax system a commodity makes thay commodity cheaper or more abundant - again, this is how socialism works, not basic business & economics.
If a free market is what you advocate for, then yiu don't need an abundance of heavy restrictive taxes to intervein with this. As you said, let the market decide without intervening. If rents are too high, tenants can chose not to pay them and instead go to the government for assistance to house them. Businesses exist to profit, removing the profit is to charitize the industry. Landlording is not a charity. One does not take out 100s of thousands in personal debt risk to buy a property to let someone else to live in who could wreck it and leave out of charitable reasons. Want to "fix" the housing crisis? Penalizing those who have, for the sake of those who haven't is a loosing strategy.
.
"Expecting an indefinite tax timeframe when being sold (and it would be at a large tax likely 39%), disinsentivizes people to sell. If peoples concerns are "greedy investor with hoards of property", then how is he incentivized to sell all these properties liquidating them to the market for a FHB is the tax penalty to do so is so high? "
Agree. Taxes on capital gains on residential estate for non owner occupier owners is a disincentive to sell and an incentive to continue to hold, thereby reducing the number of properties listed for sale in the existing house market for owner occupier buyers. So from a housing policy perspective it may not have the intended effect. From a tax policy perspective, with the objective of increasing government revenues, it may be effective and more stable source of tax revenue.
If governments prioritised owner occupier buyers over non owner occupier buyers in the existing house market, Singapore's current rates of stamp duty would lower the returns for non owner occupier buyers and make other investments more financially attractive. This would reduce competition in the existing house market for owner occupier buyers and might incentivise buying in the new build market, or other areas of investments. From a tax policy perspective, this may be raise insufficient tax revenues for future government finances.
"When one has to sell, of course the additional tax will be considered, and simply tacked onto the price expectation, ensuring each owner gets the after tax amount they desire"
Is that happening today with those buyers at the peak in 2021 who have seen the market valuation of their property fall over 20% and are now having to sell?
There is a difference between what price a vendor wants and what price offers a vendor actually gets. Time constrained sellers may have to accept the only offer that they get.
Hmmm, I have inquired on 3 different properties in the last couple of weeks and all are under contract. They were all properties that had been on the market for some time but suddenly they are selling. Seems to me that the market is warming up.
So 3 properties, versus nationwide statistics... that comment gave me my first laugh of the morning.
Some people really see what they want to see, instead of facts. Pray to the property gods and my wishes will come true.
Bet me to it!
@TJ I kind of believed the comment its all over the surveys that there are more buyers at open homes - why would that not be true?
@safeashouses I was reading the other week that immigration has drastically reduced. Funny thing...I was out walking at mission bay and there was loads of people. My conclusion is that the statistics must be wrong.
@TJ OK i guess there is some analogy there - was the sun shining after winter - that will congregate people at a beach. or is your analogy that in that suburb all homes could have offers on it?
In my personal experience, you are correct. The number of people at open homes I've attended has increased between 50% & 100%. (where there were previously 1 or 2 people, there are now 2 or 3 people)
Hmm mmmm, I went outside and it was raining.
Rampant floods must surely be on the way.........
So three house out of how many thousands for sale? And you don't know what price they sold for? Maybe they are suddenly selling because the prices dropped which would be consistent with the decline in average prices? Or then again maybe they didn't?
Better tell QV to revisit their numbers.
The ones I have hit under contract are reliant on sale of the purchasers home, some had been under contract for months. If thats warming up, Ive been doing it wrong.
"Under contract" aka subject to sale. I would be surprised if 1 of the three actually completed.
I have inquired on 3 different properties in the last couple of weeks and all are under contract
Evidence please ....
Also, how many did you enquire about that weren't under contract, a couple of thousand?
"Generally speaking, those who are in a position to purchase still have a raft of different options to choose from right now, especially within the main centres."
What a tragedy. People actually having time to consider carefully their likely biggest purchase.
The saddest part of this, is QV and the real estate industry see this as market failure.
Oh well, looks like we've passed through another market bottom. Onwards to the next one... And the one after that.
"What a tragedy. People actually having time to consider carefully their likely biggest purchase."
That's your interpretation, the article simply states that "those who are in a position to buy have a raft of different options", it doesn't put a value of good or bad on this factual observation.
Read his comment again, properly this time.
He said the industry makes buyers having options to choose from to be this horrible thing, not the article.
I have re-read his post "carefully". I see what you mean. In his next parapraph, he does say "QV and the real estate industry see this as market failure.". But my point still stands, this is his own interpretation.
Yes - my critique was of the person who made the quote in the original article with a touch of sarcasm, rather than the article itself.
The downward spiral continues..
Long live the spruikers... as their hearts must be pounding with anxiety...
AT HO I guess I am a spruiker - I must admit the situation is uncomfortable only because the hight has been very high and the whole economy is down which i feel part of - why do you think as a spruiker i have anxiety? If you do your sums right there is mitigated anxiety - the feeling I have at the moment is excitement for the future - soon interest rates will drop and my ROI will get better? Mine is a personal feeling not trying to spruik anyone into buying or not - keep renting or not - they sky is not falling chicken little -- I am in the game my man and I will either win or lose? to use your NAVIGATE term (i love it) if you a good sailor and the sea is rough you can survive - or random events can befall you much more than a price rise or fall in a house. As an investor the situation is not good - however its not a disaster and to stick with the sailing analogy - there could be bounty on the horizon.
Yes, it's a NZ et al thing based on the inherent high risk our land use policies cause for something as basic as building a house.
Basically, a developer says, "Should I do a development or go to the casino?" The risk and reward are about the same in the long run.
This risk profile attracts people who like to take risks, but as per their personality, they build unnecessary risk into projects if the adrenaline rush is not there.
Whereas, in jurisdictions where land use policies take out the speculative capital gains potential, the cost of speculative risk and the need for speculative personalities, then building houses is more rote, much like commercial development.
Could also be rocks in the horizon. You’ve gambled on calm seas with no rocks and with a ship that may have no life rafts (if nobody wants to buy your houses if you do decide to sell and limit losses).
Big call given how the global economy looks and the strange things that are happening to global yields.
@IO if you choose please stay in the safe harbour - do nothing and your return will be nothing - i chose not to stay in the harbour - just two different opinions - time will tell right? Not all risks pay off - however nothing ventured nothing gained. I made the call - you have to watch if I fail well I fail i cant blame anyone bar myself - Thanks for all your warnings - I have already made the first million - it was easy the second million seems a bit of a challange .
I go sailing when the forecast is for good sailing - you go sailing when the forecast marginal (at best). Then when it gets choppy you get scared and start crying out for help. I don’t.
Fair enough i am of the idea rough seas make better sailors - no one is crying - I am saying its tough not crying 1. getting fit is tough 2. climbing a mountain is tough 3. raiding kids are tough - 4. . investing is tough. As long as you find it worth while do what you must.
Each ‘the market has bottomed’ and the ‘RBNZ needs to cut rates immediately’ are the cries of the sailor watching his ship take on water in bad seas after going out when others said it was a good time to stay in port.
Don’t confuse investing with debt speculation.
IO - the point you missing is that i did not start sailing yesterday - yes interest rates dropping will improve my ROR - however that's part of it, it can't always be plain sailing...... :) Stay in the port its the right place for you? We both agree. My balance between investing and speculating is OK. I can't thank you enough for standing there and flapping like a pigeon as long as you keep renting its OK with me. IF you buy a house its also OK with me. :)
The captain of the Manawanui also didn’t start sailing last week - and yet her ship is now on the bottom of the pacific. Experience counts for nothing is it gives false confirmation bias of your own abilities. ‘I’ve never had an incident at sea so I’m immune from future catastrophe’
You’ve made the assumption I’m renting.
If you sell your rentals to improve the supply of houses for FHBs to buy (helping to lower prices even further) and stop whinging about the need for the RBNZ to drop interest rates to save your portfolio, that is also ok by me :)
(See I can be patronising as well).
@IO make no assumptions i say if you rent that is OK if you buy that is OK, its all OK with me, if you have your own home it is OK with me (you are basically all good ) - yes the vessel sunk - I get it, random things can befall skilled sailors - there is a randomness to it all - my point is let people who like to invest invest as long as they doing it legally. its no skin of your nose. Also i have to do some work :) Also its T - minus 24 hours for the big announcement ppppppsssstttttt its going to be .75 you heard it here first
Yvil also celebrated on here about making a million in capital gains - good for you (and Yvil).
Just remember that your gains are the debts of a FHB now struggling in this market. I’m sure you and your million feel a great sympathy for them.
@IO I admire you using the ethical argument, its not true though more first home owners (source STATSNZ) own their own homes than in the history of NZ. - once again you standing and flapping like a pigeon and not going anywhere - for goodness sake man.
Yes well a number of those FHB are now in negative equity with big mortgages and in a deteriorating economy/jobs market.
A good news story? I guess so assuming they don’t lose the house (been there and watched that in the US during the GFC).
I like the pigeon analogy - can I use this in return to you each time you whinge about the need for the RBNZ to drop rates?
@IO is yes you ie pigeon fair enough you can call me a pigeon I dont really care, i am not winging about anything for goodness sake - now you are angry because first home buyers homes are worth less than they bought it for and they losing their jobs (before you were upset that first home buyers are locked out of the market) - its happening to all of us. hence a drop in OCR might be a good solution for everyone or maybe lobby that they should only reduce it for FHB - give me any scenario that will make you happy and we can move on.
We see houses fall back to historically affordable levels - around 4x household incomes (so around $500k average). Improving financial and social stability for the nation going forward in the decades to come.
Greedy fools stop buying up existing houses they don’t need to own and leave them on the market for FHBs to buy without the competition of property investors.
You know how things were before this weird property investment culture started brainwashing half the population somewhere in the early 2000’s. It’s a mind virus. The need to own things you don’t need but buy for personal financial gain while creating financial and social stability for the country as a whole (‘my personal greed for more than what I need is higher than the financial and social stability of the country as a whole’)
How many houses do you need to own and how many millions in capital gains do you need before you are happy? Obviously you’re not happy with just $1,000,000 as you’re willing to risk it all to make more millions. Give me a number that you would be happy with so we know just how greedy you are. Clearly you are unhappy with your current level of wealth and status quo. Tell us about the scenario that makes you happy… 10 rentals, 25 rentals, 100 rentals? $50,000,000 in untaxed capital gains? Where does it end? Is there an end to your need for more?
In a rapidly growing population there are more people doing everything. Stating that simply more people are doing something in a rapidly growing population must be proof of benefits from policy is faulty logic. You could start a trash fire in the main city and we still have a growing population so then claiming that it is beneficial because more people in NZ often those that migrate here, are buying houses is proof of the positive response would have the same logical flaws as your statement.
Don't kid yourself Independant Observer, every gain is another person's loss. Every job one takes is another opportunity lost for someone else. We are but consumers after all. Investors aren't the problem, it's the lack of personal financial accountability of those who refuse to do what's required of them that is.
One so easily forgets that FHBs have the choice to build, therefor adding to restricted supply. If building is such a great idea that people seemed convinced that investors should do it, why not FHbs as well? Why would FHBs want an older home that could require maintenance when they could build one instead to their liking?
If you are not renting, then I look forward to you also selling your home for well under what it's worth when the time comes, to help out a FHB to set the example. Face it, we are all out to consume, experience & enrich the lives of ourselves and our families. One need not own multiple properties or a property at all in order to do so. Telling people what they should and shouldn't do with their personal finances is more of a dictatorship style governing - not a labour supporter by any chance? The "noone is allowed to gain more than me" waffle sounds a lot like the last 6 years we've just had.
Since we are all throwing out random anecdotes I'll throw out one supporting the stats. Open homes are super quiet in Auckland, particularly for spring.
Christchurch here. Listings for upper range properties (>$700k-$2M) in my area are at normal levels. Listings for <$700k properties are approaching record levels. I am seeing a lot of discounting on new build townhouses as they fail to sell, and they are just piling up on the market. So its no suprise that the likes of Mathew Horncastle is aghast at the idea of the Govt paying developers to build even more of them.
If you cant sell what's already been built, why are we building more? The Govt should be funding the build of housing that people actually want to buy - like standalone family homes on decent sections, in places like Rolleston and Rangiora. I know how this will end - like the Labour Govt before it, NACTNZ will be forced to buy all those apartments and townhouses that nobody wants with taxpayer money they dont have.
Everything less than $700k is right in the wheelhouse of property investors. I am aware of the same issues in the Hawkes Bay, with landlords trying to offload worn out rental properties. I have come across many who tried to sell last year with zero offers and are planning to try again this spring/summer. The vast majority of these properties have 1970's kitchens and or very old cladding/roof systems that are in dire need of replacement.
Yes 100%. What you are highlighting is the basic universal economics of restrictive systems of any product.
EG if all we have access to for food was a limited supply of Bread (houses), then this lack would make the price difference between fresh bread (new houses) and stale bread (old houses) very little.
But once there was a plentiful supply then the price of stale bread falls further, not only in real terms but as a % difference between that and what people prefer if given a free market choice ie fresh bread.
Restrictive systems cause new products to be more expensive than they should be and provide an artificial lift in old product prices, all of which is unearnt.
Funding the houses people want to live in isn't feasible forever, and is the primary reason that Auckland is such a cluster for traffic. Christchurch has arable land that is more valuable for food production, south of Auckland the same. Eventually, like most overseas major cities, we must build up instead of out and create a vibrant CBD where people want to live, work, have offices etc. We also need to focus on public transport to make is easier and faster for people to get in and out of the CBD and around these cities, as we all know that more motorways and more cars is a band-aid fix that results in the same issues a decade down the line. Build the town houses, build high rise, with more people closer in the CBD living and working, the increased foot traffic will inspire innovation and new opportunities for people to start businesses there and make it a great place to be.
And in Kerikeri an open hpme last weekend and nil viewers - not one. Still the week before at least they had one - the next door neighbour dropped in....
Yesh it is Kerikeri, have you ever seen what constitutes housing & employment in most of Kerikeri. It was already a niche market before the major electrical outage, medical service failures and road & infrastructure failures.
@ Toye - Of course open homes in Auckland are currently super quiet, it's the most expensive place to live and buy in the entire country, during the largest cost of living crisis in over 20 years. The same statement could also be made of the super car industry also being really quiet with sales at the moment too. Both statements are technically correct, but in reality mean very little.
The super car industry caters to less than 1% of New Zealand's population. The Auckland housing market caters to approx 30% of New Zealand's population, more than the entire population of the South Island. For someone who was complaining above about not comparing apples with apples you sure seem to struggle yourself. Are apples woke?
Er no that is wrong, nearly a third of NZs population live in Auckland but most already own houses or don't intend to live there long. What you are doing is conflating house buyers with people living there and making the exceptionally idiotic mathematical flaw of including babies, children, those who are living in retirement/hospital level care, those who intend to leave the city/country, etc frankly most the population of Auckland who never intend to buy houses in the next few years and are not currently looking.
Less people around with 1mil+ mortgage preapprovals for a 1960s 3 bedroom home or a newer property likely to leak or have dodgy body corp or management co issues in the near future. Can't think why there are not as many people with oddles of high mortgage preapprovals except oh wait the events of the last 3 years are very very telling.
https://www.oneroof.co.nz/news/riverside-home-plagued-by-lowball-offers…
So this article supports my theory that build costs dont put a floor under house prices. Build cost of 1.3m, sold for just over 1m. This will become more and more common as banks are still testing at 9%... ouch for this particular vendor. A near 300k hair cut. It looks like the Waikato version of Riverhead too.
Simple, don't pay over a 3X or 4XDTI.
Housing affordability solved and speculators torched.
Both problems solved.
Love the phrase ' speculators torched '.. hopefully their loved ones will have a fire extinguisher close by
Lovely.
There is some angry people on this site. It is disappointing that the moderators don't do a bit more about some comments that are posted.
You can hardly ban QV, Barfoot's and REINZ just because their stats clearly show that average prices etc are falling.
They must be good stats you cheered them all the way up.
Narrative driven dismissal of QV average is one thing, then the QV HPI? Lets then try the much respected REINZ HPI. It's a reasonable assumption it will also show a decline.
There is no escaping reality, new depths are being plumbed - much like Spruiker behavior.
Why? QV CoreLogic both lag the market by 2 months due to their reliance on settled sales, but REINZ has already shown a flattening of declines in July and Aug, so I wouldn't be surprised to see a small increase in the Sept numbers as rate cuts have spurred some market activity.
Narrative driven dismissal of QV average is one thing, then the QV HPI?
I shoul also add that the QV HPI is the same as the QV Average house value. The latter is calculated and then turned into the former. But they are the same. And note these are average values, not sales prices.
Funny that - people can’t afford houses to raise children in and to have some financial and social stability - other peoples children are leaving the country with their grandchildren for the same reasons - and then you are surprised that some people are angry bout this? Did you just wake up to the damage that housing bubbles like this do to the well being of people in society? You do realise there are other people in this country with needs and desires other than people that own property portfolios right?
Their bankers will need a high capacity financial firehose, at the ready.....
@HO my goodness man - you should have a look at yourself - in any walk of life if you feel that what people find legally worth while to persue should be torched - I might suggest - if you on the resentful path it will be painful.
The comment before that said they also took a haircut.
I think you will find both 'torched' and 'haircut' are figurative, not literal.
Just as the word, 'safeashouses' is.
@DS I totally agree it is figurative - if it was literal you will survive a haircut - however one is a bit more figurative than the other . That i have to break this into child like steps for you is difficult
1. Haircut - we can all survive - not painful and it means a small discomfort
2. Torched - painful death / disfigurement / someting you do to someone you perceive is a demon or Witch. something you chase away and reject./Burn
Not sure I had a few haircuts as a child that I never thought I’d recover from.
Even now if I look at the photographs I’m not sure if I really have yet!
Housing Speculators should feel the pain of their stupid financial actions (yes torching - ofcourse financially) and it must be remembered for a long time. This is so their stupid actions are not repeated, to the detriment of NZs national interest. Shutting out FHBs, which seem to be ok with some, is just bad.
@NZGECKO - as per stats NZ more people are owning their own homes than ever before - first home buyers have ample choice at the moment - as far as i understand - I believe FOOP is stopping them now - honestly can take a horse to the water.....
Yes rising interest rates the last few years has helped more FHBs into the market and more investors left the market.
Perhaps we should start hiking rates again to continue that trend.
Exactly.
Those who have the actual business acumen will be rewarded doing REAL business, not title squatting.
Not everyone is cut out for it and being an employee is ok too, but much of our braindead populace would be lost without the Ponzi and that is starting to dawn on many of them. Not everyone can succeed in an efficient market.
And some like yourself learn to invest in markets, but that requires thought, the level of which most wouldn’t dare engage with…
Those who can do more with less are the ones who deserve to win.
"Perhaps we should start hiking rates again to continue that trend. "
Yeah. Lets do that. Sheesh. The NZ economy is NOT the housing market.
That’s just stuff of dreams. I challenge you to name a major city in Aus or NZ when DTIs are 3-4x income.
Was*
We’re not at the bottom yet “champ”
Can’t even take some of you lot seriously with your crystal balls.
They have two tiny crystal ones.
that need magnifying gem assessors glasses to see clearly.
And yet here you are day in day out spruiking regardless of the data that comes out. Anyone would say you have an ulterior motive...
"So this article supports my theory that build costs dont put a floor under house prices"
Many people believe that house prices can't fall below construction cost - this was a reason given by property promoters as to why house prices in the existing house market won’t fall or crash.
1. Rising construction costs
The more it costs to build a new house the greater the incentive for people to keep searching amongst listings of existing properties and the greater their willingness to raise their bid price.
https://ndhadeliver.natlib.govt.nz/delivery/DeliveryManagerServlet?dps_…
I'm sorry, but as soon as I realised it was written by Tony Alexander, I treated as a comedy script. He's a sell out, and a snake oil salesman. This article belongs in the digital trash bin, along with everything else he has ever written.
His 'sources of house price support' reasons were pretty weak and optimistic compared with sources of declines.
Most owners don't look at 'what would the rebuild cost be today', but "what did I pay for it in 1997, and what can I sell it for today?"
And that's the looming issue. There's a mass of historically owned stuff on the books at below current replacement costs that will still yield the owners a profit if they sell today, or if they sell tomorrow, even as prices keep falling. And as the property owning cohort ages, that's going to be all that matters - "How much can I sell it to fund my lifestyle and who can afford to pay that?"
The big elephant in the room is "who can afford to pay that"
1. Record exodus of highly educated or hard-working young kiwis across the ditch or off to the UK.
2. Massive influx of minimum wage/low skill workers (thanks Labour/Greens and National) with marginal skillsets.
Things will continue to get magnitudes worse, until the govt shifts its policies to supporting families with kids. And actively incentivising non-working people, between the ages of 15 to 25, to not have kids.
Yep, a friend of mine just announced they are off over the ditch next year. Most of the friend group left the capital and there's a grim mood there currently, so off to greater opportunity and the likelihood they can actually afford to pay of some principal of their house bought at the wrong time in NZ. Nobody wants to weather the storm when there's better pay, more upbeat cities and a better ability to make a future without sacrificing a few years of your life by staying here.
I was working as a QS in the late 80's, I can concur that new builds have always been more expensive than existing. The narrative around this new build price providing a floor for existing housing is a load of codswallop, nurtured by those that are looking to justify their house whispering narrative.
Just another spruiker's trick to keep the ponzi going ....
In stable truly free markets that have only valued added costs, cost (including margin) does equal value, because if it didn't then why develop/build anything?
In more boom and bust markets, like NZ, then at times, costs will be greater than value when the market crashes, with super profits needed in the boom times to give an overall positive margin over time. This is in itself more risky than stable markets, so the prices will always be higher on average than stable markets.
But build costs are not the real issue in NZ. The land price is. This is many multiples more than it should be due to restrictive land use policies.
The present fall in prices has not affected landbanking prices at all - Yet.
On the potential of this alone, there is approx. another 20 to 25% fall in house prices that could happen without affecting the amenity value of property.
The property market in Taupiri is absolutely unhinged. Somehow agents are trying to market it as a prime location despite the fact it is basically a rat run between the low socio-economic areas of Huntly and Ngaruawahia, and further away from employment than both of those options.
At the $1million + price point you could have a very nice 4 bedroom house in a good part of Hamilton, or in Morrinsville, Te Kauwhata or Pokeno depending where you need to work. Your car is much less likely to be stolen in any of the other towns I mention.
Sounds like a 'spec build'. I.e. a builder, in this case also the owner, believing prices would just keep going up.
'Spec builds' like this are notorious for overpaying in building costs, ergo I question the 'cost to build' at $1.3m. So read on ...
Homes suggests the land was purchased in 2021(peak silly) for $452k. That suggests the remainder of the 1.3m was build cost - 848k. Homes says it's 224sqm. So roughly $3,800 per sqm. So yes, maybe they did overpay ... But not by much. Nice place though. The new owners will do okay ... if they have a couple of, or more, EVs. ;-)
@ Tom Jones - Lol and the previous government wanted more investors to build homes, when the numbers for both re sale and rental yield just don't stack up. Government can't build the required housing, they failed to produce the 100,000 ghost homes, the numbers on building new doesn't stack up for investors, so that leaves pretty much FHBs building. Perhaps instead of penalizing investors on a ficticious witch hunt for a distraction, we should instead be incentivizing FHBs to build.
It has been reported that banks are stressing at 9% despite the downward trend in interest rates.
If this is true, then this would suggest that this high-stress test point is saying they still see either or a combo of the possibility of house prices falling further, weak demand despite falling rates, a sluggish economy for some time, and of course, their own stress testing ruling out some potential buyers.
The lower % rates go, the higher the risk for the lenders - as we've just seen. Because when rate inevitable rise, for whatever unforeseen reason, stress comes to the bad & Doubtful Debts' ledgers, as those who 'borrowed all they could, low' run into trouble.
9% seems about right in that context.
There's absolutely no reason why a stress test rate should change when interest rates fall, other than to enable the banks to lend more dollars to the same quantity of houses.
Maybe the stress test rate should be on the loan document as the ceiling interest rate for the duration of the loan term. Gives the banks some incentive to properly assess, rather than to try push the envelope and have naive borrowers bear the brunt of the bank's willingness to lend. They are meant to be the subject matter experts after all, hence they derive a profit.
There's absolutely no reason why a stress test rate should change when interest rates fall
That would imply that the test rates also shouldn't change when interest rate rise.
I think it's reasonable for them to both rise and fall as long as there's a sufficient buffer between current/expected rates and the test rate.
Perhaps it should be based upon the average mortgage rate of the past 100 years.
But those who want a continuous stream of tax free capital gains would likely hate this idea. (Ie how would we lend far too much to peole so house prices keep rising if we used a historically average mortgage rate to stress test mortgages?)
We should judge everything on the past 100 years then, mortality rates at birth, car safety ratings..... see how stupid your comment sounds now?
Bdogg - I’ve unfortunately had to add you to my list of known fools on this site.
Stress testing at historically average interest rates might solve our boom/bust housing market.
Besides, I don’t know what that value is (do you?) and yet you’ve got all triggered that it must be going to be be something bad! It might be less than current stress test rates!
If you think something fundamental like the value of money is the same as birth rates and car safety ratings (which can be modified/improved with technology) then good for you. Technological developments don’t stop interest rates from rising and falling (monetary and fiscal policies do al of which are prone to human error over time).
It’s only unfortunate for you, I’ve never been more pleased. If anyone is quoting 100yr averages on systems that are constantly changing. Then they are a moron.
The time value of money and it’s concepts are fundamental principles that do not change with time! They will forever be true (like gravity and the speed of light and the laws of physics).
Your position is like arguing oh hey we’ve got this great new technology and invented watches with better batteries so time now passes faster than it did 50 years ago - we think the batteries will be even better in 10 years from now at which point days will no longer be 24hrs long but now only 23hrs! Amazing eh!
Interest rates/time value of money concepts never change! Just like the number of minutes in a day does not change even though I can now see the time on my iPhone digitally- which I certainly couldn’t do a child growing up.
Interest rates fluctuate over time not based upon technological developments but on shifting tides of monetary and fiscal policy.
In your world, where is the correlation between technological develops in ‘systems’ (what do you mean by systems?) and interest rate settings? Interest rates went up for 30 years from 1950-1980 while technology improved, then they fell for 40 years while technology improved even more! So what ‘systems’ are you referring to bdogg that influence interest rates?
That is a hell of a lot of words to say not much. But to answer your question, regulatory systems, that span all markets, affect lending.
For some reason you think that time value of money is exempt from human intervention, when it is created and can be manipulated by humans. Unbelievable
Basing your mention of 100 years, perhaps base the judgement of the human race on it's behaviour and actions since the discovery and mass adoption of fossil fuels. The difference in living standards is night and day.
Have you ever viewed interest rate values over the past 100 years (or 1000)?
We were burning fossil fuels in the 1940s and interest rates were close to 0…we were burning fossil fuels in the 1980’s and interest rates were 20%….we were burning interest rates in 2020 and internet rates were 0% again.
So what is your point - burning fossil fuels improves living standards but has nothing to do with interest rate stability? Burning fossil fuels is actually a cause (if not the greatest) of interest rate instability. So 100% the opposite of your point (if I understand it correctly - that burning fissile fuels drives interest rate stability?)
The banks should be free to set the test rates how they see fit, but I don't think they share enough of the pain if they get it wrong. Would the banks have dropped their test rates to below 6% if they knew that would be the upper limit of what they could charge for the full loan term?
Their risk is that the loan doesn't get paid back. However that journey first involves the borrower forgoing other expenses, potentially extending the loan term, going interest only or on a mortgage holiday.
What pain would the bank incur? Well they sell the house for a loss, and the borrower is still liable for all remaining debt.
Yip the incentives are perverse - they dropped them as low as possible in 2020 in order to maximise the quantity of mortgage debt they could sell - based upon the reliable history of the central bank bailing them out if they got it wrong.
Fair point. But like I said, if the test rates are going to mean something, put it on the loan document as an interest rate ceiling.
Will this result in higher test rates? Most likely. But since the housing market is effectively driven by mortgage lending, all borrowers will be subject to the same stress test changes and prices will adjust to reflect.
Well they did get caught out in late 2021 with some of the banks testing at mid 5's, before scrambling to bring the test rates back up to 9%. Not sure how many borrowers had their initial application tested at 5.5% only to refix 12 months later with a rate starting with a 6.
Banks stress testing at 9% will serve their requirements to stay within DTI limits.
I.e. don't expect this to change much as interest rates fall.
I'm calling bottom
..is bottom answering your call? I suspect bottom won't pick up.
We have Uncle Bulgaria, TronMVP and Zwifter on the board as calling the bottom.
Don’t worry, I’ll give you your roses if we look back and you are correct.
I don’t think we are there yet, but each to their own in the crapshoot that is for forecasting.
I have no real skin in the game. Brickbats or flowers, I'll take my reward.
I'm calling the bottom. You will get the confirmation tomorrow at 2pm. There is an outside chance of a 75bps cut, if this happens watch the market turn on a dime.
I'm picking that the market won't 'turn on a dime.'
The banks will not agree and even if in their exuberance and competition between banks they wanted to, the DTI's will help keep them in check.
The fast track projects are the first step in qualifying what needs to happen to the whole market to restore what was once normal speed to the market.
The Govt. whole policy approach is so supply can meet demand in developer real time.
The drop in rates that has already happened has not resulted in house price increases.
The goal is for an increase in volume (supply) to meet demand, but not prices.
If prices were to go up faster than the rate of inflation, then Govt. will just 'fast track,' other policies sitting in the wings to negate that.
In jurisdictions with the right policies, they have low interest rates, supply equals demand at whatever rate that might be, AND house prices at 3 to 4 x median income multiple.
Like we used to.
2020 has deluded people.
@Zwifter - great comment and you nodded towards my .75 prediction (love your work)
I called the bottom for November
Okay, HouseMouse is on the board too. Anyone else?
Zwifters going for gold and picking the exact day!
Already called it a month ago, you have until Christmas to buy in the current low. There is a 4 month window to buy.
Rick Mayall is dead unfortunately :( what a show though.
NZ Customs passenger stats for Jan-Aug show net 82000 more departures than arrivals.
Everyone here now is living somewhere. The third world has worked out that borrowing from a loan shark at 20% to buy your way into New Zealand does not have a great ROI right now.
Amongst this years arrivals are thousands of unemployed or underemployed experienced foreign trained nurses that no one can afford to employ. Because if they are employed as nurses they will be working for the government or a government funded entity that will need to give them fair market wages and conditions and will not be able to exploit them. So if they are employed now it is in other unskilled jobs where exploitation is deemed acceptable.
On top of that,. New Zealand will graduate 1000 new nurses this year from our own training institutions.
another reason govt reluctant to build more capacity in health (hospitals) is because the running cost are massive - professionals don't come cheap.
It's mainly because the boomer generation was not interested in paying tax for their future health care. They did not want to pay for new hospitals or health professionals, rather they wanted to protect their wealth from any type of tax, especially in the form of capitals gains (created off the back of the younger generations having to borrow more and more to afford a basic place to live).
The people who should be footing the bill, for the health system and deferred council infrastructure maintenance, is anyone over the age of 50 with a net worth over $1 million.
Why ? I'm approaching 50 and have multiple of these millions you speak of. I also intend to earn several more of these before I retire. I pay my own health costs thanks, via my insurance policy I have for that purpose. Why exactly is it my responsibility to pay for all this stuff now ? I already paid my taxes...
No. You pay some of your own health costs via insurance. The state subsidises the rest. When you are injured ACC covers the costs ahead of your insurer. When you visit the GP it is state funded. If you have an acute health issue like a heart attack you will be admitted into the public health system and be treated at the cost of the state. Your insurer steps in when the health care you need is discretionary or non urgent or too expensive for the state to justify covering. I.E, the latest and greatest cancer drugs.
So, you are talking about the stuff that I do not use as I keep fit and healthy ? Yes, I get I already paid for that via my taxes, or are you saying taxes don't actually go to pay for that. What actually are you saying then, everyone else should get it for free except the highest tax payers that contribute the most ?
So we don't have 83 Billion in government debt then? Because everyone pays enough tax to cover what the government spends.
Your talking about money printed/borrowed (mostly) by incompetents in the last six years to fund failure. That is not a problem for the wealthy, it's a problem for everyone. This is why we are cutting the public service. There are 15000 additional people there delivering nothing. So, before we talk about people paying more, we need to cut out the dead wood and then see what we are left with afterwards. After cutting the waste we might just have a nice surplus so start paying stuff back with.
You. "I'm approaching 50 and have multiple of these millions you speak of."
Did you acquire any of those millions in the past 6 years? Where do you think that money ultimately came from?
Clue. See above
Overseas actually. So the answer to your question is no. I did not invest in the property market here, or gain some government contract where all I had to do was collect the money and fail. Nothing like that. Were they acquired in the last six years, again, no. It is the result of steady investment over the last 30 years.
Well done then. We don't need your taxes anyway. Maybe you should consider a new user name. Perhaps aboveaveragejoe.
Assume your not coming back to NZ before age 60 so you won't get your super.
hahah funny comment
I live in New Zealand. I have always have. It is possible to invest in things that are not in this country you know. In fact, they are best investments by far. Don't worry, I am looking forward to taking my super entitlement.
I am looking forward to taking my super entitlement
Correction: your benefit
I knew that would trigger someone. In any case, I'll take it. Don't care what you call it really if it makes you feel better.
Newsflash, if you're 50 and have millions you will not be getting your super benefit. The rules will have been changed by the time you retire and it will be means tested. Sorry. On the plus side you're very rich and it will not matter.
No, the rules have not been changed, and are unlikely too, at least not in that time frame. That you can be sure of. That few hundred dollars a week of universal entitlement. Excellent.
I don't see it changing anytime soon either. Huge voting block heading for retirement, Turkeys don't vote for Christmas.
but they get slaughtered anyways.... no one give turkeys a vote or a second thought, much like discarded Spruikers... (failed property developers).
no one
…and there are many failed property developers around at the moment… many don’t k ie they have failed yet. That will be for next year, and the year after.
No trigger at all pops, simply correcting an incorrect statement :-)
Depends if you voted left or right. Keep in mind the party that always campaigns on lower taxes.
My experience of many boomers is that they generally thought they worked hard when in fact they didn’t, they certainly hate paying tax especially any taxes that would tax capital gain, they want top roads, government super and hospitals but don’t want to contribute anything near a fair share towards them even when pocketing huge capital gains and they don’t want to pay for rest home costs even though they have millions. For the record I am a boomer. My children and their children all live in NZ. Many boomers do not enjoy that luxury as their children have left NZ to try and get ahead.
The obsessive fixation with the 'bottom' is beyond me.
(... get you minds out of the gutter!)
Market & trading literature is awash with statistical analysis and facts about when the best time is following a collapse.
I really encourage people to find them and read them thoroughly.
Perhaps then we'd have less foolish talk that only serves to prop up the Ponzi while ensuring 'investors' dilute their potential returns by either buying to high and/or waiting a very, very long time before they see any of what they prize ... untaxed capital gains.
Had an email on the weekend from my old RE agent, whom we bought from her and gave our house to sell way back (bloody good commision she made on it too for two days work).
Anyhow, she said "Let's catch up for dinner somewhere nice in Ponsonby when you are on your next trip back home to Auckland". chances are she's trying to sell me something and almost guarantee that the dinner bill will be on me!!
Or...maybe she just felt some genuine connection with you both as human beings and is actually hoping to just catch up. Not all of them have talons and green saliva.
@pB - great comment it seems whoever dont agree with you are the enemy - nice one
🤣🤣🤣🤣🤣🤣
“Oops, i forgot my wallet”
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