A flood of new listings onto an already swamped housing market in October pushed the total stock of properties for sale up to a 10-year high.
Property sales website Realestate.co.nz received 11,572 new listings in October, up 21.4% compared to October last year.
That pushed the total stock of properties for sale on the website up to 32,339 at the end of October, the highest level it has been at that time of year since October 2014.
That means the stock of properties for sale is already around the numbers we would normally expect to see at the very peak of the summer selling season in March.
Unless there is a huge surge in sales over the next few weeks, the market could end up with a large stockpile of unsold properties when it all but closes down for the Christmas/New year break.
The high level of new listings suggests there's a substantial level of as yet unsatisfied demand from vendors wanting to sell their properties, but the growing stock level of homes for sale is tipping the market further in buyers' favour.
"While higher stock levels are typical as the spring selling season ramps up, these levels reflect trends we haven't seen since 2014 and 2015," Realestate.co.nz's latest monthly report said.
"All regions saw positive stock growth both month-on-month and year-on-year, with the majority showing double digit annual [percentage] increases," the report said.
The biggest year-on-year increases in stock were in Gisborne (+81.2%) and Wellington (+52.9%). See the chart below for the full regional figures.
Market conditions are further complicated by rising vendor price expectations.
The national average asking price on Realestate.co.nz has increased for three consecutive months, rising from $816,796 in July to $893,357 in October.
That could leave real estate agents potentially dealing with the twin difficulties of an overstocked market and vendors with unrealistic price expectations, in the lead up to Christmas.
However buyers will be happy because the market is moving even further in their favour.
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159 Comments
"The housing market is moving further in buyers' favour"
So from 'absolutely, financially crushing' to just 'still way over expensive' then?
When the market has finished its 'correction' - however long that takes - it might take some time until anyone wants to be a Buyer at all. They'll have witnessed in real-time what happened to recent Buyers; they bought and prices kept falling, and will not want to be one of them any time soon.
" the twin difficulties of an overstocked market and vendors with unrealistic price expectations" gets solved in only one way, if % rates do an about-face.
Agreed. I believe the housing market will go from the FOMO/Always goes up perspective to a money sink/poison asset class for half a decade after all of this is done before reverting to some sort of middle.
Hopefully. I might be able to afford a wooden tent in a small dying town in that case.
@ Toye - No one is saying or actually believed that property prices only ever go up. That's what the chicken little sky is falling property skeptics convince themselves that that's what property owners tell themselves.
The reality is property prices in NZ decline at a much faster rate than they rise. However, they rise for longer than they fall. This has been consistent for at least the last 40 years, there's no reason to expect "this time is different".
"a money sink/poison asset class for half a decade after all"
- This is already happening Toye, right here right now, it's unfolding before your very own eyes, & your missing it. Too busy accusing "vested interests" of spreading property hype to notice. The peak of prices was end of 2021. We are alrwady 3 years in, declining prices have slowed almost to a halt, & there is even speculation of a slight rising of prices. Last major decline in 08, prices started taking off again end of 2012, jusy 4 years later, & didnt start to decline again for 9 years.
"Reverting to some sort of middle". We are almost at that point now. If your still waiting for "the great money sink hole", youve already missed it. Keep up. Dont try time the market, its time in the market that makes the difference.
@ bw - Watcha talkin bout Willis?
All this scaremongering your doing are you really sure you advocate for getting more tenants into homes? Because it doesn't sound like it. Another doom & gloom peddler.
We've had the largest property price decreases accross the country in over 40 years, (you dont need to be a "spruiker with a sinister plan" to undsrstand this) as much as 20% in some areas. That's over 3x further price drops than the last GFC back in 08. The problem isn't "property prices haven't fallen all the way to the bottom", the problem is many people do not recognize the opportunities in front of them. Success isn't something that hits one in the face & drags them in, your waiting for something that'll never happen. Success is made, by what you decide to do with an opportunity.
And yet you can't see the opportunity to buy? Strange, I thought only landlords were apparantly the ones trying to disencourage tenants from owning so they could protect their "hoarded wealth", I didn't realize it was also self sabotaging tenants & sole home owners sabotaging their children's dream of ownership as well.
Your not one of these chicken little sky is falling property skeptics that's been waiting "for the bottom of the market" for decades by any chance? I'm guessing you missed your chance back in 08 too. Too busy trying to time the market.
So anotherwords it's never going to be "a good time to buy" according to you is it bw. Great way to keep the motivation for tenants alive eh. "Give up now, you'll never make it, prices aren't low enough, wait, like I did". Prices aren't going back to the 1920s mate. You dont need some fancy economics degree to state the obvious. Your 100 years too late for that. It is what it is, find a way to do the best you can with what you have in the current situation you find yourself.
I see this comment quite regularly about the 20% drop. You're leaving out the fact that property prices were up something like 50% in the 2-3 years prior to the top and that was on the back of a decade of record growth. When you look at the full picture, 20% is not as big of a drop as you're making it out to be. Combine that with still high interest rates comparatively and a weaker economy, expecting lower prices is, again, not as crazy as you seem to think. I'm not sure how much more downside there is given how long we've gone sideways but anyone who has advised not to buy within the last 3 years or so has been right up until this point.
@ FOTC - Your right, despite the largest drop in prices in 40 years, property still remain 70% higher than they were 7 years ago.
That being said, as I said before, property prices in NZ do not decline by as much as they rise, though they do decline at a much faster rate than they rise.
If your looking for property prices to be dropped by another 70% to bring prices back to 2016, when they were still considered unaffordable by some, you will be bitterly disappointed. The next big pants drop of property prices has just happened. You either recognize this opportunity & use it to your favour, or continue waiting as have many sky is falling skeptics waiting for the next big one, & miss out for another decade yet again.
"anyone who has advised not to buy within the last 3 years or so has been right up until this point."
If one is in a position to buy, this is the next perfect time to buy, as property prices are highly unlikely to decline by much more of a significant margin. Property declines have slowed almost to a halt. Read the writing on the wall. You ain't getting your hopeful 1920s property crash all over again.
"If your looking for property prices to be dropped by another 70% to bring prices back to 2016" Who made that claim?
"property prices in NZ do not decline by as much as they rise" Who said otherwise?
"Property declines have slowed almost to a halt" Property prices need to do more than just go sideways for now to be the next perfect time to buy.
@ FOTC - "When you look at the full picture, 20% is not as big of a drop as you're making it out to be."
You made the claim that you didn't feel that a 20% drop in property prices was that big of a deal. 40 years of data proves you wrong in this. You only make this claim, as property prices have risen over 94% in the last 6 years under the last governments administration.
So yes, compared with a 94% rise in prices, a 20% drop sounds minimal - until you understand the data that property prices in NZ have proven over 100 years, to not drop by as far as they increase. So your comparison to a 20% drop in prices being "not as big of a drop" is false. You are comparing the drop with the rise, which is like comparing apples with oranges. Instead, compare our most recent drop in prices with the last major drop in prices back in 08, & you will find our latest drop to be over 3x larger than that of our last financial recession. That's huge! A 20% drop in prices compared with over 100 years of property data makes this one of our largest property price declines in our history. Yet, you see it as meh "20% drop is not as big as you make it out to be". Your statement is false. I'll correct you, what you actually meant to say was "20% drop is not as big as you would like it to be". This is where I rightly assume that your looking for further major dropping of house prices. But you will be bitterly disappointed in your false hopes.
Lol I bet you've been waiting decades for "the great bubble burst" haven't you FOTC. Whilst everyone else around them buys & sets themselves up for life. Your trying to time the market, rather than have time in the market. It's going to ultimately cost you far more.
Haha you literally quote my comment and then state I'm saying something different. I said it's not as big of a deal as YOU are making it out to be. That's not the same as saying it's not a big deal period. Of course a 20% drop is a major correction, but again, you can't just look at the correction without looking at previous price action to determine the likelihood of further downside. Did we have the same property boom leading up to the GFC in NZ? If not, then you wouldn't expect to see as big of a correction. That's just how markets work.
"You only make this claim, as property prices have risen over 94% in the last 6 years under the last governments administration." - No because I had no idea this was the case. My response is based on price action [alone] over the last 5-10 years, literally as I stated.
"Lol I bet you've been waiting decades for "the great bubble burst" haven't you FOTC" - I'm not old enough to have been in the property market for decades. Try more like 12 months. And I've never stated once that I think prices are going lower, I'm simply stating that I think it's much more of a possibility than you do.
Keep informing me of what I really mean and think though, eventually you may get something right!
@ FOTC - So you chimed in on a previous comment of mine, mentioning that the current house price decline isn't as big of a deal as I make it out to be, yeah?
So let me understand where your coming from
- if the largest property price decline in over 40 years is not a big enough incentive to consider buying if anyone was thinking of buying, then what more are you hoping or expecting that will happen?
Are you expecting or hoping for further large drops in prices? If so, based on what? Interest rates & test rates coming down will certainly help.
Are you waiting till you see no drops at all & possibly even a slight increase before admiting we have reached some sort of bottom to the declining house prices that we have experienced in recent years?
I'm interested to hear your take on this.
I am considering buying, I said in my previous comment I've been in the market for the last 12 months. All I'm saying is that it's not as simple as this is the biggest decrease in property prices we've seen in the last 40 years therefore now is the "next perfect" time to buy and there's no chance prices could go lower from here. There's much more to the equation than that.
My comments have nothing to do with my own personal situation as I'm fortunate enough to be on a decent enough salary that I can out save the market and reduce the size of my eventual mortgage. So there's no incentive for me to rush, especially when the market is going sideways. So far I've made the right call to wait and if the market does happen to go lower then I'd consider that a bonus rather than an expectation.
I'd also just add that the period right after rates are first cut are usually the most turbulent as it's my understanding that's typically why they begin to cut rates in the first place. So that's another reason why I'm not in a rush.
@ FOTC - Thanks for your insights. Now having understood where your coming from, I totally agree. It will be interesting to see where thing go from here. All the best with buying.
Not really. Tauranga still exactly 1200 listings yesterday, this is pretty much normal. Not sure where the numbers are coming from but Tauranga has been as high as 1300's.
Probably all those properties that were withdrawn in the previous months being relisted with new agents. No one is going to pay top dollar for a property that’s been on the market for months.
You're right. There is a lot of re-listing going on. Including 'withdrawn on Friday, re-listed with another agent on Monday' (not that such behavior affects the number of new listings though).
We could all write a list of the titles we see as they're quite repetitive XD
And those trying again. The neighbour, whose house languished for the first 6 months of this year with unrealistic price expectations, has just had a visit from a (different) REA. I wonder how much of the 52% increase YOY can be attributed to this sort of thing?
@ two_pair - "No one is going to pay top dollar for a property that’s been on the market for months."
Now there's someone that recognizes an opportunity to negotiate a better price.
More houses for sale and higher asking prices, that's going to be interesting...
Yes I found that point quite interesting.
Might be agents taking as many listing's as they can get and then trying to lower vendors expectations during the sales process.
I think that the median asking price when the mix of houses goes up - more larger homes coming to the market rather than a market dominated by new townhouses
Noisy rate cut expectations causing short term variance vs reality….
Stand back and let it dump before throwing your financial future on the bonfire FHB’s.
I’ve also noticed an increased occurrence of these agents trying their luck with auctions.
Morons.
@ Thats all folks - "Noisy rate cut expectations causing short term variance vs reality….Stand back and let it dump before throwing your financial future on the bonfire FHB’s."
12 years ago I brought my first home at 5.99% interest rate. 12 years later, 5.99% interest rates are still here, still exist.
Looks like we're pretty close to having found the rate cut expectation. First home buyers don't need to "let it dump" before considering a mortgage in mid 5s (which we appear to be heading towards). Waiting isn't the same as buying. If a first home buyer can't manage their "financial future" based on mid 5s interest rates, they probably aren't cut out to be home owners, not yet anyway.
Your personal situation is irrelevant, the data and direction doesn’t support a flattening or an increase, not even close.
I suggest you de-leverage until the pain is over.
The original term is “Get Woke Go Broke” btw
@ Thats All Folks -
"Although the property market remained relatively sluggish in October, the pace of decline has roughly halved in the past couple of months after an average fall of around -0.9% from May to August. CoreLogic NZ Chief Property Economist, Kelvin Davidson said that could be a sign of an approaching floor for property values. Rising sentiment may take some time to hit the ‘hard data’, but there’s a sense that the end could be in sight for the recent downturn.”
https://www.corelogic.co.nz/news-research/news/2024/slowing-rate-of-dec…
Where did you say you got your "data" from again? Because the actual data doesn't support your expectation of a continued rapid decrease, not even close.
I suggest you do a little more research & a little less sky is falling fear mongering for your own interests. If you are unable to read the writing on the wall that property prices will not get much cheaper than they are now, then for you the pain has only just begun.
Yes, and with US and EU inflation looking stickier maybe interest rate cuts won’t be as fast or far as many were expecting (hoping for)…
I am thoroughly confused - Why is everyone selling?
So they can move to Australia.
There was an interesting g article in the AFR showing how uneconomic it is to build there. They have exactly the same issues as us, they are just a we bit behind.
If you are a tradesman moving over there I would suspect it’s going to get really tough.
Their government is not taking them down the UK Tories path of austerity for everyone except their super rich mates who get the law changed in their favour. Anyone who has seen what happened under the Tories in the UK knows what to expect from Luxon's National.
@ agnostium - "...knows what to expect from Luxon's National."
We absolutely do, that's why they were voted in. Because we know what to expect from Ardern & Hipkins Labour, more failes election promises masked by unlimited smiles, kindness mantras & paying off the media 100million to not ask about their string of constant failures that plunged the entire country backwards by historic margins.
We had 2 terms of that over 6 years, that's plenty enough for most. The country voted no to more of the same. "Let's do this".
Unlike NZ, the Aussies have money, and are prepared to spend it. They are still short of builders over there, so plenty of work available. Especially on civil projects, and the upcoming Olympic preparations.
Building more homes
The best way to ensure more Australians have a safe and affordable place to call home is to boost housing supply. That's why National Cabinet has agreed to an ambitious new national target to build 1.2 million new homes over 5 years from 1 July 2024. And we're providing billions of dollars to help get there.
Through National Cabinet, states and territories committed to change planning laws to build more homes closer to where people want to live and work. It'll mean people can be closer to public transport and reliable services and connected to their friends and family.
The Government is making available a further $1 billion to states and territories to deliver new housing – including for connecting essential services such as water, power, sewerage and roads. This investment expands on the $500 million already committed through the Housing Support Program.
We've announced incentives to increase build-to-rent accommodation, and as part of the National Housing Accord, we'll also build an additional 10,000 affordable rental homes.
On top of this, our $10 billion Housing Australia Future Fund will build 30,000 affordable and social homes.
https://www.pm.gov.au/our-work/housing-australia-build-rent-buy
We just got a $3 billion a year tax cut, shouldn't we be spending that? Or would we have been better off with the government keeping that money and investing it into things like housing?
@ JimboJones - Well yeah,
If we took Nationals good idea poorly executed of the $3 billion extra a year tax cut, & we used the additional money to fund Labours good idea poorly executed build more 100,000 new homes for sale in just 10 years that no one was allowed to talk about or question them over the failure, we could be onto a real winner perhaps.
its like these politicans occasionally have a good half idea, but poorly executed means it never really gets off the ground.
The ferries were cancelled over a $1.8b cost blowout on the infrastructure upgrades. Essentially 6 months or so worth of these tax cuts.
@ Nzdan - So?
Core Crown Revenue between 2017 & 2023 rose 334% (never taxed us more), while Core Crown Expenses had gone up 596% (day to day expenses which do not build physical assets for the Crown), net Core Crown Debt had gone up 482% (borrowing).
Can't run your life like that but Labour are ran a country like that. The current government needed to stop the absolute wasteful spending of money from Labour first, which means making certain cut backs, before we can re assess the situation & try again. You expect National to keep spending like the monetary lolly scrambles of the last Labour government, where do you think all this additional money is going to come from? You can't run a country with unlimited smiles & kindness mantras while plunging the entire country further into debt. That's a smiling assassin.
Have a look at their migration numbers (they make ours look lightweight) and then have another look at those figures.
If you are a tradesman moving over there you will be highly sought after.....
https://www.afr.com/property/residential/construction-workers-should-be…
The chief executive of the country’s largest property company, Lendlease’s Tony Lombardo, says the government should significantly increase the share of immigrants who are construction workers if it is serious about building more than a million homes over the next five years, as business leaders urged a series of productivity reforms to boost supply.
Stockland chief executive Tarun Gupta said his company – a major residential developer – could not find enough builders in Western Australia, where productivity has also slipped. On average, it takes three extra months to build a house, and 6.5 extra months to build an apartment, than it did a decade ago, according to research released by the BCA.
“There are capacity constraints. Every time demands picks up, the industry can’t cope,” Mr Gupta said. “We need internships, getting skilled migrants in, and attracting back some workers who have left the sector.”
Alot of construction companies going to the wall over there as well
People constantly yearn to upgrade to better dwellings (in superior locations). And right now is no exception.
For instance, the wealthy remain ultra-keen to move into Ponsonby - 50 years after the gentrification of that suburb commenced. Indeed, snobbery plays a large role in the Auckland housing market - and real estate agents milk it for all it's worth.
Good luck to them - Ponsonby is still way beyond the price level which commoners like me can afford. Anyway, I've no interest in keeping up with the Joneses. I've no hesitation, however, in parking my 50-year-old Hillman Hunter outside their posh homes when I visit my barber. Disgusting, I know.
TTP
There is also a lot of new homes coming to the market - code of compliances are about 17,000 per annum in Auckland alone
That's all we do in NZ - buy and sell houses to each other. But this time, there seems to be no buyers. It's a rather large spanner in the works for the RE industry.
I noticed this week that my usual $12 glossy magazine that is regularly posted out to me by the real estate agent who sold my house to me has been replaced by one of those free local advertising magazines. Serious cutbacks are being made.
@ blackbeard - "But this time, there seems to be no buyers."
It's called a recession. The property market cycle swings in round abouts, & takes into account a decline in both prices & demand. Though in NZ this never lasts as long. 08s GFC was the last time this happened, within 4years of the decline prices were back up & running further than they fell. Buyers will eventually return. Relax.
A lot of vendors have been holding off for the past couple of years waiting for conditions to improve. Now that things are looking better they're all listing at once.
Perhaps. A mass rush to the exits does nothing for the supply and demand dynamics. But its all about speculative capital gain right...
@ Averageman -
A mass rush to the exists assumes a number of distress sales of those who have perhaps bitten off more than they can chew.
"But its all about speculative capital gain right..."
Having to rush to the exists to sell quickly during the largest property price decline in 40 years, thinking they're going to cash out with "speculative capital gains right". Wrong.
No one rushes to sell in a massive downturn in the hopes of a massive capital gains lottery payout. A work mate of mine has just sold their property for 60k below what they paid for it 3 years ago, as their situation has now changed & they are relocating.
People rush to the exists to sell quickly during a massive downturn not for the hopes of a capital gain payout, but either a distress sale, or their situation has changed. It is people who rush to the exists to sell in a massive upturn who are looking for speculative capital gains, as they rightly can. You buy low, you sell high. Is the objective anyway.
@ sointerested - "Now that things are looking better they're all listing at once. "
Things are looking better? Really? Largest property price decline in over 40 years, and that's "looking better"? What a terrible time to sell, unless one absolutely needs to sell, this would be considered a distress sale. It is however a fantastic time to buy if one is able to.
Pent up supply. Markets has been moving down for 3 years now. Many would-be sellers have waited and waited for market to improve and are now thinking it might, so they are listing. Problem is prices are still too high for fundamentals so sales are lower than listings and the growing glut is putting more downward pressure on prices. I think this trend will continue well into next year, with the only way out being another leg down for prices (or interest rates reduced further than inflation environment requires, leading to inflation and ocr bounce)
@ Speedmax - ..."or interest rates reduced further..."
Yup, that's coming end of this month & again in mid Feb next year with the OCR reviews, a majority are now expecting a drop of some sort, which in turn will help drop interest rates further. Not all the way down of course, being realistic about it, but enough to make a fairly sizable difference in people's financial position. Patience.
A flood of new listings onto an already swamped housing market in October pushed the total stock of properties for sale up to a 10-year high.
Given our rising job insecurity, a counter balance to clear this listings bloat of still overpriced homes doesn't look encouraging at all. It only points to prices trending further south.
There arent many reasons for prices to rise.
Young skilled peeps who will make good money are off to Australia coz it's cheaper to live and had far better public services/career prospects.
Immigrants can't afford prices to rent and buy.
Those who are staying are worried for jobs and income.
Then longer term:
- Declining fertility rate. Both here and the origins of many of our migrants.
- feral anti-immigrant sentiment, which will find its way into the platforms of the main parties
- A rising bi-partisan YIMBY movement (Chris Bishop/Phil Twyford types).
- Public accepts that zero interest rate era is over for good
- entrenchment of WFH/remote work
Where does the money come from for another property bull run. It just isn’t there.
"Where does the money come from for another property bull run. It just isn’t there."
Yes it is. It is called immigration.
And because NZ is surrounded by water, that moderates our climate, NZ remains a good bolt hole - for those that can afford it.
"Yes it is. It is called immigration."
Only if those immigrants are cashed up....as far as I can see the overwhelming majority are in debt when they arrive, consequently all they can provide is (less than ) minimum wage (minus remittances)....looks like a net negative to me.
That dosnt mean they are of no use or any lesser but it is not an economic panacea.
We are all after all immigrants.
feral anti-immigrant sentiment
Yes. But that isn't the same as being anti-immigration is it.
One is directed towards the individuals recently arrived here. The other is about the effects of population growth on NZ (those already here) and also (for some of us) moral reasons about protecting them from modern day slavery (our society has shown time and time again it isn't able to do so) and not robbing other less 'well-off' nations of their skilled staff.
@ Powerupkiwi - "Where does the money come from for another property bull run. It just isn’t there."
Lol, bet many were thinking the same back in 08 too. & we had many of these issues facing the country back then too. Patience. Plenty of crystal balls floating around. If people want it bad enough they will find a way.
@ OldSkoolEconomics - "Young skilled peeps who will make good money are off to Australia coz it's cheaper to live and had far better public services/career prospects."
Fantastic! Less compitition in the NZ property market to look at buying a heavily discounted property. Good opportunity spotting OldSkoolEconomics.
Everybody to muster stations, I repeat, everybody to muster stations.
I’ve been banging this drum for a long time, but we don’t have a shortage of housing. We have a utilisation issue that improves when times get tough and as the elders sell larger homes.
This isn’t a blip, this is a shift that will take some time to work through.
Those holding under-utilised properties without the capital gain are starting to understand how expensive they are cashflow wise.
Demand isn't fixed, its affected by price. So as housing gets more unaffordable the "shortage" goes away. E.g.
- Dave who was looking to buy his first home moves back in with mum
- Young couple sticks with their mouldy 2 bed unit because they can't afford the next step
- Boomer Joe doesn't buy another bach
Anyone who talks about shortages doesn't really understand supply and demand.
The price / demand relationship is two-way too. Nothing predicts house price changes better than the volume of sales (for example).
Supply and demand around housing is very very complex. It’s not like toilet rolls during covid.
If it was toilet rolls you could say there was a shortage if you were unable to buy them for a reasonable price (e.g. cost to produce + a reasonable margin). But you can't produce land and existing land is heavily regulated, the price is dictated by supply and demand.
It isn’t really though. Maybe year to year, but not on a timescale that matters
@ JimboJones - You've cherry picked your examples to favour your narrative that shortages cannot exist. Try this for contrast:
Average occupany of a rental is 4.2 people. For a FHB it's 2.8.
For every rental property that leaves the market 1.4 people are looking for a new home in a pool that just shrunk.
Say 100 rentals are sold to owner occupiers; that's 280 new home-owners, which is great. But it's also 140 newly homeless tenants - not so great. Who do you then expect to house these people? Surely can't expect the gov to do so. They can't even look after the 28,000 families on the emergancy housing wait list.
Shortages exist even more so when people buy homes, as smaller nymber of people live together in ownership compared to a typical renting situation.
Census data from 2018 showed the occupancy of rentals and owner-occupied properties were almost identical – with an average of 2.7 and 2.8 people in an owner-occupied home and rental respectively.
https://www.stuff.co.nz/business/131589273/landlords-planning-to-quit-b…
Also consider there may be more and more each year for a while downsizing or popping off, freeing up larger homes and likely batches also.
Exactly. If we banned short term rentals everywhere (and instead incentivised hotels and motels to be built) the housing "shortage" would be solved overnight.
@ HughJorgan - "Those holding under-utilised properties without the capital gain are starting to understand how expensive they are cashflow wise."
"Someone is sitting in the shade today, because someone planted a tree a long time ago" - Warren Buffett.
As Warren brilliantly puts it, smart investors who buy for cashflow wise aren't looking at what cashflow returns it will make today, as your right, the current cashflow is pretty low. They're looking at what future cashflow returns it can make to help boost one's retirement cashflow.
Ones high paying fancy job won't save the day, despite what they teach at school. If one is the money machine, the money stops flowing the minute one stops working. If one stops earlier due to an injury or illness, there's nothing to fall back on.
Investing is all about delayed gratification - a short term sacrafice for a long term gain. Today the majority seek instantaneous gratification - hence your comment above, you cannot understand why someone would consider buying a property that is not instantaneously high yeilding in the immediate.
“the current cashflow is pretty low”…no it’s not, it’s pretty high and in the wrong direction for many investors. Why keep bleeding when you can wait for prices to come down or cashflow to turn positive? Or better still, invest in something that’s actually productive…
@ Speedmax - "Why keep bleeding when you can wait for prices to come down or cashflow to turn positive?"
Exactly why less investors are currently in the property market. Largest first home buyers market share in a long time. Quite simply because the cashflow just doesn't stack up currently with interest rates having been so high. Perfect opportunity for would be first home buyers as they don't have the "compitition against investors" excuse to lean back on. Will they take the opportunity, or squander it & blame everyone else for it as a scapegoating cop out? I think we already know the answer.
"Or better still, invest in something that’s actually productive…"
Where do you expect 80% of our renting population live while they save a min 20% deposit required & while they prove to banks theyre in a financial position to be pre approved to purchase a 1st home. The governments emergancy social housing waiting list? Up over 548% in just 6 years, with currently over 28,000 families waiting 5yr averages to be housed by government while they couch surf, tent, live in cars or crammed in motels? Not even tenants get a free ride towards ownership. They must pay their way like everyone else. An owner pays the bank a mortgage, just as a tenant is expected to pay the rent to someone else for having them housed in someone else's house. It's a high price to have to pay to expect that it is someone else's job to house them. This is business, not a charity.
Providing homes for those that fail to provide for themselves is the countries most productive, most essential business. Removing investors from the property market does not magically make a tenant financially viable for a mortgage, even if property prices tanked even further than they currently have. That's on the tenant, it's not a landlords job to financially assist a tenant into a home. The fact that you just do not like landlords or landlording is irrelivant. Facts over feelings Speedmax.
It that supposed to be parody? There's not a single fact in your overly long emotional diatribe..
It looks like you don't like what he's written, so rather than a reasoned argument back to him, you declare that he's got no facts and call it an "emotional diatribe"
@ 1harlow1 - your clearly not up to date with the property market are you. Re read again, plenty of facts in there to enlighten you.
Or better still, care to share some facts of your own? Or you good just sharing your short emotional diatribe?
we don’t have a shortage of housing. We have a utilisation issue
At points in time and in certain places we may have had a shortfall. Continued population growth has kept things 'tight' even though we have been building. However, as you rightly point out our utilisation is terrible.
This is why I advocate for a simple land value tax, to help improve utilisation of everything from bare land to apartment blocks. A small annual levy to make the holding cost higher and therefore prompt the owners to consider improving the utilisation. That may mean renting out an unrented property, selling it to someone or if it's vacant land building on it or selling to a developer.
Exactly. Anything that’s not being used gets taxed. Would get things moving and economy operating more efficiently, with better outcomes for most
There is always a surge of listings around this time. Add in the large pile of already unsold listings, and normal debt levels, extended recession, and future high earners exiting to Straya in near record numbers and... boom. The real question here is when do the banks start to shoot the over leveraged and strung out debt junkies as they continue to fail to service their debt obligations?
When will they actually do their job....
If the banks crack down on the over leveraged, people are going to start asking how borrowers got over leveraged in the first place. Sometimes its better to suck up the results of your bad behaviour then to admit you behaved badly.
Also this could trigger panic and contagion thereof
"If the banks crack down on the over leveraged, people are going to start asking how borrowers got over leveraged in the first place. "
Anyone who made any misrepresentations to their lender at time of loan application should read their loan contracts. There are clauses in those contracts that many people are unaware of and the consequences of those misrepresentations if detected by the lender.
And, let's not forget, that banks that accepted them are likewise on the hook.
You have far too much faith that the banks will actually operate legally and ethically CN 😂 I know many people who got a mate to sign a paper saying they’d be paying ____ amount board to help their friend get a mortgage over the line. There’s no recourse there as the person can transfer the money for a couple of weeks after settlement, then the mortgagee just gets cash out and hands it back to them with a box of beers to say thanks and bob’s your uncle.
" I know many people who got a mate to sign a paper saying they’d be paying ____ amount board to help their friend get a mortgage over the line. "
Yes, heard that this is prevalent behaviour. Wonder how systemic this is?
Which party to the contract breached the terms of the loan contract?
1) the lender?
2) the borrower?
3) the mortgage broker?
Did the commission incentivised earning mortgage broker suggest to the borrower to unknowingly and unwittingly commit mortgage fraud?
https://www.stuff.co.nz/national/crime/300782935/property-investor-gets…
@ CN - "Anyone who made any misrepresentations to their lender at time of loan application should read their loan contracts."
Its an intentions game. The banks would have to prove the intentions of the buyer were misrepresented. When peoples intentions can change reguarly, trying to prove people's real intentions or at least original intentions is almost all but impossible. It would be another rabbit hole that banks would be highly unlikely to go down, due to the very low ability to actually catch anyone out on their "changed intentions".
The same applies to those using Kiwisaver for a first home, the condition is one must intend on living in it for at least 6 months minimum. Once the money is drawn down the banks don't send people to your house over the 6 month period just to check if you actually live there - much like you suggest, it simply is just a waste of the ban time.
Good like being heard whistle blower.
"The real question here is when do the banks start to shoot the over leveraged and strung out debt junkies"
Shortly after savers are wrung dry?
@ Pagz - Most people's post covid savings are already wrung dry. Some people are even taking small loans out just to pay their power bills.
The real question here is when do the banks start to shoot the over leveraged and strung out debt junkies as they continue to fail to service their debt obligations? When will they actually do their job....
The banks are aware that there is a social licence aspect to the work they do. The position they are in is in a very sound position as it stands today and they are well positioned to help their customers.
~ Karen Silk
(Let's test the interest.co.nz commentary demographic with a meme...)
"Too soon, junior."
@ General comment - "Too soon, junior."
If I'd listened to the typical chicken little sky is falling property skeptics saying this 12 years ago when I brought my first property, because for them prices were too high compared to the 70s, I would've never had brought. Every generation has these neighsayers. For them, it's always "too soon", until it's not. They know best, after all, they've been waiting decades saying "too soon, too soon" while others all around them set themselves up for life with property.
Thank goodness I found a way to make it happen for myself, blocking out the neigh sayers along the way. For I am all the more richer for having ignored their pessimisim. Too much negativity today that one could be easily fooled to believe that actually no one wants any more people to buy a property than there currentlt are. Having been first a tenant, I know exactly what option I would chose everytime, even with temporary higher interest rates. We even have some people on here now justifying & advocating a renters for life lifestyle.
That's not you by any chance is it? Spreading the fear mongering that it's all gonna come a crashing down & yet somehow only owners will be negatively effected by what happens in the property market. Home ownership should absolutely be actively encouraged. The message should be "learn to do the very best that you can with what you have, given your current position." Not "too soon, get out while you still can". To what? Renting for life? No thanks. Not even renters are immune to negative effects in the real estate market. The last 6 years has never been a better example of this.
'Investors' selling up? Perhaps they've read my posts about when a well-designed CGT should start?
I suggested 1900. That would catch everyone.
And it'd start generating tax revenues immediately which would mean PAYE reductions immediately too.
Thank you UK Labour Party. ;-)
Not sure about it being the investors selling up. From the banks' data, investors are borrowing more for making house purchases. The ones selling up are likely to be Boomers moving into retirement villages.
The ones selling up are likely to be Boomers moving into retirement villages
Have you got a read worthy link to back this or is it nothing more than an assumption? If this be true then combined with Brightline jumpers it could be quite a wealth transfer in play being met with poor demand.
@ Chrisofnofame - I notice you've conveniantly changed your wording on the sly from "a fair & non biased CGT" to "a well designed CGT".
I see comrade Ardern has taught you well. When your narrative is found to be false & misleading, you simply change the wording to suit your narrative. Clever, but a number of people now see through it.
This silent admission of yours shows you know your advocating for "a well designed CGT" is merely just another envy tax, targeting people more financially fortunate than yourself. It is entitlement that drives your envious claims, as your socialist regime you have been trained to parrot teaches feelings now matter over facts.
Now, a true "fair & non biast" tax system would either tax all forms of profit, or no form at all. Why? Because unlike opinions, both profits & tax are not biased as to who makes profit & how. Sp a true "fair & non biased tax system" would actually capture & tax primary residence first homes, intergenerational family farms, kiwisaver, inheritance, stocks, bonds, mutual funds, crypto currency as well a investment properties.
But this is not what you advocate for. For you know deep down that the socialist mantra of taxing ourselves to financial prosperity to be wrong & deeply flawed. You instead advocate only to heavily tax those who you yarget as having more than yourself. Because that's not fair. Chris it is your entitlement that drives your thirst for a capital gains tax. So blinded by your envious rage, you have been unable to see that a capital gains tax on property already exists in this country called The Brightline Tax. Youve been told about it multiple times but fail to believe it as it doesn't fit your socialist mantra.
Goodness gracious. Are you drunk? Or just lonely? So many posts and so much drivel. And so much stuff you simply made up!
It takes a true narcissist to claim envy. It wreaks of self importance. It's like the self indulgent guy at the party that loves to brag about how much his house is worth. The words 'envy tax' are thrown around often by the person you generally most expect... I've seen them come and go on this website, often getting aggressive when challenged. Question: are tax brackets not an envy tax?
@ tomjones - "it takes a true narcissist to claim envy." Seriously? School age "first to smell it delt it" stuff?
He who makes the claim, bears the burden of proof.
Chris makes the claim that our country requires "a well designed CGT", yet he simply cannot explain how he believes this would work. Chris is unable to explain how taxing those who have more make it cheaper for these people to sell, how taxing people who have more increases the supply, how taxing people who have more helps more tenants into homes.
This is because the correlation between his claim & the desired outcomes simply just does not exist. So I ask Chris to explain, but of course he cannot.
One can only bit assume that not only does Chris not know how tax works, or what he's actually talking about in general, but that Chris's claim does not actually stem from helping the country move forward & getting more tenants into homes, but Chris false claims stems from his own insecurities from those who have proven better Financials than himself. This by its very nature is the scorn of envy. Chris's intentions considering he is unable to explain his "well designed tax system" is clear is day - Chris wishes to penalize all those that he deems to have more than himself, because otherwise it's not fair. Chris doesn't want to have to do the work required to step up his own financial position, & so he expects to get there off the backs of those who are wealthier than himself.
Concluding that not only is Chris & his stayememt he cannot explain envious, but also stems directly from entitlement & laziness as well. He expects that others do the work for him, because it's just easier that way if "rich people" get taxed more, & somehow he receives the tax handout for doing so.
Now if you believe this is incorrect Tom, you may offer your own take? If the phrase "envy tax" triggers you, thats on you Tom. Your triggers are your responsibility. It isn't the worlds obligation to tip toe around you. The truth doesn't mind being questioned, a lie does not like to be challenged.
@ Chrisofnofame - It is your "well designed tax system" that is made up drivel. I'm calling you out on it, something your clearly not used to, just more people lapping up your drivel because your on a popular "tax the greedy landlord" bagging mantra yourve been trained to parrot.
You have failed to answer how your "Well designed tax system":
Makes it cheaper to sell
Gets more properties into supply
Helps more tenants into homes
This is because your "Well designed tax system" isn't about any of that at all. It is of course an envy tax of those who you deem to have more than you. You simply cannot explain it, so instead accuse others who question your logic as drivel. This is classic tall poppy syndrome you display Chris. Your tax system is not a system our country wishes to implement.
This is Wingman's latest reincarnation folks. Just like the last, this pseudonym will also get banned.
I was thinking exactly the same thing. Seems to be raging for having been banned.
He'll have to be careful not to mention the fact Riverhead prices have fallen significantly according to the latest stats.
Can we say "spring bull-trap" now?
33,000 properties for sale? That's about 3 - 5 months worth of sales (depending on how stupidly hot the housing market gets).
We've been running at about 6,000 sales per month for the last couple of years. Pre-Cvid we were running at 8,300 per month but we did have a spike during 2021. So, my rough guess is that we have latent demand of around 2,000 per month x 24 = 48,000.
Anyone better against the housing market is braver than me.
This is the dumbest take I've seen in a while.
Why not put your pride on the line then? What's the bet you want to make? What do you think house sales / prices will do over the next 6 months, and over the next 12?
I'd be interested in yours too Jfoe, you seem pretty neutral.
OCR drops, house sales increase, prices follow sales volumes with approx six months lag. It's been that way for nearly 40 years, what makes us think it will change? The only question is how much will prices increase by? I think 7% to 10% in nominal terms through 2025 is a reasonable estimate based on historic data and presumnig that RBNZ drop the OCR into the 2s by mid next year.
"presumnig that RBNZ drop the OCR into the 2s by mid next year. " It's 4.75% now. To get to 2.75% mid year will need 0.25% cuts over 8 cuts. OCRs in Nov24, Feb25, Apr25, May25, Jul25. That's 5 OCR calls so implies at least two 0.5% and the others at 0.33%. Perhaps one 0.75%, one at 0.5% and 3 at 0.25%, that's a tall order.
Fair challenge. However, with Govt spending forecast to be stupidly low, the economy will be on it's knees through 2024. So, if mortgage lending doesn't pick-up, RBNZ will end up dropping rates that hard. If mortgage lending does pick-up, then my forecasts come in sweet!
But RBNZ are trying to control inflation not mortgage lending. What if inflation is stickier than expected?
You dont see any reluctance to lend or any inability to borrow ?...while I agree about the past trend and cannot see where else the 'balance sheet expansion' will come from I dont see either the banks willing to throw caution to the wind nor (enough) borrowers being in a position to convince lenders otherwise.....remembering that there are other offshore options for that capital.
Middle class people buy houses. Let's look at a proxy for middle-class unemployment - 'white euro' unemployment. Where were we in June 24? Bang on 3%. Where were we in 2009? 3.4%. Recessions are increasingly experienced by renters and the precariously employed. IMHO the housing market will see growth well before the labour market does.
k, fair enough, though the middle class is being hollowed out. Understand your reasoning but remain unconvinced that sufficient are confident enough to continue the ponzi here...there appears a lot of headwinds to any capital growth in residential in NZ in the short/medium term and thats where the demand is created....if the 'middle class' dont get onboard then the weatlhy will also seek pastures greener.
Crap....I think you will be shown to be correct though not because of the 'middle class' or 'white euro unemployment' rates...but because the money has to go somewhere and housing is pretty much all we have.
On that, middle class Europeans are fleeing the country en masse. As evidenced by the 14% drop in the European birth rate this year. Those white, middle class, people of breeding age are your prime First/Second Home Buyer, and they are disappearing fast. The housing market is now reflecting that.
@ Jfoe - Well said & summed up.
It was more about 33,000 houses for sale being "3 - 5 months of stock". Really odd take.
I don't see house prices going anywhere except flat/down for at least 6 - 8 months.
Ah, right. RBNZ publish the number of sales every quarter. I'm not making stuff up. Here's the trend.
11,572 new listings oct. (versus 6k sales.)
Stagnant stock 32k (likely 5,000 more due to the developers only listing one unit when they have 20 to 100 to sell).
The market is currently adding an extra month of overhang inventory each and every month.
Doesn't matter what the fake "latent demand" is if vendors don't significantly drop their prices to meet buyers' affordability.
Rates up 20% across the country. Insurance up 40% the last 3 years. These unavoidable costs have significantly eaten into what people can afford.
I am no housing market cheer leader, but you're mocking tone will look stupid in 6 months time. Set a reminder.
"but you're mocking tone"
FYI, as an independent reader, in the above comment referred to, I didn't interpret any mocking tone. I merely read it at face value.
You may be independent, but your posts show you are not neutral.
The mocking tone was in the phrase "fake latent demand".
Like Jfoe said, we will see in 6 months time. However, this conversation will be long forgotten by then.
I can’t help but wonder if there is a chicken and egg thing here. Most sellers will also be buyers but few sellers will be wanting to make an offer on a property until they have an acceptable offer on their property. Hence the number of properties on the market keeps rising but few moving
We thought about putting our place on the market as an ‘upgrade’ looks potentially attainable for us. The problem is we would need a sharp price on the sale of our current place, and I struggle to see that happening right now. So we aren’t going to even try. We are relatively happy where we are anyway.
Yes the upgrade (or downgrade) path seems scary. You either have to:
- Make conditional offers based on your place selling for a good price (this will significantly reduce your bargaining power)
- Buy and hope you can sell your place for something like what you want
- Sell first then hope you can still buy at a reasonable price
Just sell and crawl through the rental sewer pipe for 3 years that's what we did. Can see the light but hard to say how far away it is.
@ Pagz - "Just sell and crawl through the rental sewer pipe for 3 years"
And fritter away what little additional profit one makes selling in a down turned market, the largest down turned market in 40 years, in the 3 years renting, in the hopes to eventually buy in an upturned market if there's anything left at the end of it all?
Sounds legit.
I have an old mate that did just that back in 2020, saw the $$$ & thought to cash up, then wait for the opportune moment to buy again. They still rent to this day, & will never buy again. It's all gone. Their one chance at ownership & it was squandered.
In a soft market you definitely want to sell before you buy
I dunno HM. I reckon go for it. Your place gets pretty warm in the summer and we’ve got an hot one approaching. Seems to be something going on globally with temperatures.
@ Frank - "Seems to be something going on globally with temperatures."
1970s they told us another ice age was coming in 10 years time.
Crazy eh, how global temperatures can go from one extreme, the threat of all freezing up, to the complete opporsite extreme, the threat of all burning up, in just 50 years time. Especially considering the earth is billions of years old, & humans have occupied it for at least thousands of years.
Heck, at this rate, don't even bother buying a house. Renting, owning, won't matter if either extreme hits us in just 10 years time.
I'm adding more heat pumps to combat this 🙃 a bit backwards but only workable solution for my home
Add some solar panels to power them too
Any decent "Upgrade" requires hundreds of thousands extra thrown at it. If you own a Townhouse and want to "Upgrade" to something stand alone, its going to be very expensive unless you sell and move out of Auckland.
Yeah doesn't HM keep telling us the market is flooding with town houses... probably not the best time to sell then?
We traded up in March. The downturn made it possible in a hot market we would have got nowhere near this suburb. Now we have a house we won’t move from for at least 20 years. Far better to trade up now than when things have picked up again.
Rental demand is very low. Vendors will be forced to meet the market.
We are finding that our existing tenants generally are all tending to renew each year now.
Not hard to increase rent being received either, reason we putting up is due to Robertson’s stupid decision!
We do know other landlords that when they advertise get so many immigrants applying with no track record and therefore can be risky and dont want to go there.
"Not hard to increase rent being received either,"
Remember the political rhetoric of reintroducing interest deductibility for owner occupiers in the existing dwelling market?
Property owners would save about $800 million each year on tax, he said.
"That is money that will be divided between landlords and renters alike."
Checkpoint asked an expert how much property owners would save each week. The owner of a $750,000 property with a $500,000 mortgage could expect to see about an extra $160 a week, they said.
When presented with those figures, Seymour said he expected to see a "pretty even split" in how the saving was divided between landlord and tenant.
https://www.rnz.co.nz/news/national/511411/no-way-renters-will-benefit-…
TheMan have you put your rents down??
Why would we need to drop rents?
With the current value of our property now compared to what our return on that, the return is not that great.
That is why landlords deserve to make capital gain or they will bail out !
At the end of the day it is run as a business and needs to be profitable or why bother?
landlords deserve to make capital gain
Is that in addition to having rents topped up across the board via the accommodation supplement?
@ Murray - You assume that all tenants require the accomodation supplement in order to pay their rents.this is false.
The tenants that do require this benefit will have no choice but to move to the government's emergancy social housing waiting list as their only accomodation option remaining, alongside the other 28000 families waiting to be housed by government.
The suggestion to remove the accomodation supplement would negatively impact the tenants that require it to rent in the private sector far more than it would a landlord. Nearly half the country rents, landlords are not without tenant options. Especially when plenty of tenants do not rely on the accomodation supplement.
Nice try though to pitch a tenant benefit as a landlord one. Yes, tenants who require this benefit end up having this paid directly to the landlord, as it rightly should be. This essentially means thay the government pays for a tenants rent who cant pay for rent themselves. They pay they stay, like everyone else. They don't, they're out. Its as simple as that.
Hi GWGB,
You assume that all tenants require the accomodation supplement [AS] in order to pay their rents.this is false.
Actually, I don't assume that. My point is that those on low incomes (that qualify for the AS) effectively raise the total rent available to be paid by 2 billion (approx. AS paid each year) across the land.
I do assume that rents are set at what the market can pay - that amount is 2 billion more than it would have otherwise been at the macro level.
That's not the worst of it though. Because that 2 billion extra goes to the lowest income people, it means they can pay more for rent (it must be spent on rent - you don't get it if you aren't renting) it raises the 'rental floor' so that they have to pay say $600pw (in Auckland/Queesntown) to maximize their personal AS. That means everyone that doesn't qualify e.g. have over $16k savings has to pay these higher rents too in order to compete with those getting the AS.
In short, the AS as a policy has been a complete and utter disaster for rental affordability and absolutely is a landlord benefit (even to those landlords whose tenants do not receive the AS).
@ Murray - "Actually, I don't assume that. My point is that those on low incomes (that qualify for the AS) effectively raise the total rent available to be paid by 2 billion (approx. AS paid each year) across the land."
Then perhaps those that rely on government to pay their rent must realize that the private rental sector is out of their price range. No government wishes to remove this tenant benefit, as each government recognizes that they cannot house all those that cannot house themselves. The Accomodation supplement is just yet another silent admission that private landlords are an essential service, the most essential service this country has. Fornif it were solely up to each individual to house themselves, & not up to private landlords, or government, that nearly half the country would become homeless.
Thank you for confirming why this country absolutely requires to keep the Accomodation supplement going, for tenants sake. Those tenants that require this shouldn't be worried, after all it's free money direct from the government to pay their rent. Would be nice as a home owner if we also recieved such a generous government handout. Those tenants who recieve such a benefit should feel a sense of gratitude. Those tenants who do not recieve this benefit, they know exactly what they need to do in order to turn their situation around - do what's required to strive towards home ownership. It's hard, but it's always been hard, & it's certainly not impossible by any stretch.
This is the unfortunate consequences for not doing what is required to house ones self, it is a high price to pay someone else for life to house you.
The tenants that do require this benefit will have no choice but to move to the government's emergancy social housing
Possibly, but that assume the house they were in sit's empty, I think it's more likely to be rented out but at a lower rate 'all else being equal' because the pool of people that can afford to rent it has decreased.
The suggestion to remove the accomodation supplement would negatively impact the tenants that require it to rent in the private sector far more than it would a landlord
I think that is true and any change in this space would need to be carefully managed. EG halt immigration so that we have surplus supply of rentals to create the liquidity required for the drop asking rents. You could drop rents (via policy) and therefore reduce AS subsidies because as rents fall the AS entitlement would fall. Demand for rentals would also increase as rents decrease (become more affordable so some move out of home etc). Therefore, significant slack would be required under a proposal to reduce rents such as a poster here 'Kate' has suggested (her suggestion is otherwise good in my view) - but it could be done. Landlords would ultimately have a smaller total rent to share amongst themselves.
I'm advocating for the removal of a subsidy; we did that for sheep farmers in the 1980's and it could be done for people farmers today.
@ Murray - "You could drop rents (via policy) and therefore reduce AS subsidies because as rents fall the AS entitlement would fall."
Why ever would rents drop? When rates, insurance, maintenance costs, property management fees all steadily increase year on year. This is a business, not a charity. Rents may be justified in some sort of drop, when the costs to a landlord to operate have also dropped significantly. Especially with interest rates having significantly risen in recent years, there's absolutely no justification what so ever of any rent drop, even without the accomodation supplement being supplied to tenants.
You drop the rents justifiably when the landlords costs to operate have dropped alongside it. This then means a lower rent can be offered & the landlord still receives a rental return after costs. But that's not what you nor many advocate on here. The very thought of considering that we may have to change tack from penalizing, restricting & taxing "the greedy landlord" in some ficticious witch hunt out of scorn & envy, to one that actually carefully considers the private landlords business instead, admitting that rents can be justified in dropping when costs to operate drop. Quite simply, don't increase a landlords cost to operate or their risk in which to operate in, set about reducing a landlords cost & risk instead, then one may have a justified case to advocate for lower rents.
Such a case does not exist, because to these people, the thought of punishing landlords, those that are seen to have more than themselves, is what drives them. Far more than the idea of what we could do to actually lower rents, that what we've tried over the past 6 years has had the opporsite desired effect, so time to change tack. For them, they'd rather pay a higher rent & to constantly have their landlord hassled, it's worth it for the serial complainers. Again, in the end, another silent admission that actually no one wants the Accomodation supplement removed, most especially tenants who current use it - for it is just one less excuse they'll have up their sleave for why ultimately they have failed to do what is required to get themselves into a home. It is not a landlords job to assist tenants with this.
Wouldnt know if any of our tenants get any sort of accommodation supplement.
What has that got to do with what we feel is a fair and reasonable rent for the accommodation thst we orovide?
If they can not afford it then they need to find something more within their budget, surely ?
@ Rampart - "Rental demand is very low."
That's a rather bold assumption given there's 28,000 families on the governments emergancy social housing wait list for accomodation needs.
What are you basing this on?
Based on this, your right about one thing - "Vedors will be forced to meet the market". Trending upwards when demand is high & supply is low.
Why rent a crappy old unit when Kainga Ora will give you a $1.7M brand new apartment for free? Who wouldnt want to be on the public housing waitlist? Even better, pump out a couple of extra kids, and you'll go straight to the top of the list. Set for life.
I wonder what the housing market will look like when unemployment gets to 6.5 or 7 percent, or even higher? There's plenty of reasons to sell a house, but it's much better to sell it yourself rather than getting in a position where the bank sells it for you.
"when"? That sounds like a pretty big "if" to me.
Unemployment predicted to be around 5.5% next year, interest rates predicted to lower only slightly from here. Business confidence low. If you're feeling the heat now, it isn't going to get any better any time soon.
And that higher unemployment print, 6% is a reasonable (unfortunate for many) estimate, that will lead to deeper rate cuts and might even awaken fiscal stimulus as well...which when combined will start to move things along, probably take another year or two of prodding to get to a place where job security is back and sentiment positive leading to a hotter economy (sorry, a rockstar economy) as this will all happen a bit too late to be able to be done subtly (hey, we've seen a strong patten of them overcooking sh*t in all directions), so money becomes cheap, lending becomes easy and the economy lights up, its pretty hard to think that won't lead to asset prices (ok, houses) rising consistently for a few years...probably a bit too aggressively at the tail end of all of this when folks realise they want to jump on board...then a year or two later it all goes tits up again...sound familiar 🚴🏻♂️...none of that is good, but it is hard to say it is super unlikely.
@ DitchSkipper - "If you're feeling the heat now, it isn't going to get any better any time soon."
Temporary pain for long term gain. The very basis of delayed gratification.
For every 1% interest rates reduces, reduces an average mortgage payment by around $100 a week. At the peak of our latest interest rates we were seeing around 7.5% interest rates. Compare that with now at around 6%, with further drops expected by most late this month & again in mid Feb. Currently that saves an average mortgage holder around $150 a week, not including the 2 further expected interest rates drops within the next 4 months.
This looks pretty convincing of a silver lining starting to rear its head and come to light.
This should also help business confidence in time as well, as many small businesses have uses capital from their primary homes in order to invest in a business. There's a direct correlation between a strong housing market & strong business confidence.
Local real estate agent sent in his monthly email that long term average for our area is 1500, and there's currently 1766. But he's not had a lot of stock to sell.
"Diving in to the 1,766 listings there are:
• 309 Townhouses for sale
• 203 Apartments for sale
• 155 bare land or sections for sale"
Its a flood of townhouses coming to market in my area (Chch). Consequently prices are dropping. 2 bedders are back in the $600k range, you can now buy a 3 bed for the same price as 2 bedders were advertised at a year ago. Developers are now competing with existing townhouses for investor buyers (because they are unliveable for anyone other than people living out of a suitcase), but the owners of 2-3 year old townhouses have a great deal more wriggle room to lower prices. All those that thought they were being clever by not providing parking, or only an open carpark, are now looking not so smart, as most of the older places were built with garages.
Its a flood of townhouses coming to market in my area (Chch). Consequently prices are dropping. 2 bedders are back in the $600k range, you can now buy a 3 bed for the same price as 2 bedders were advertised at a year ago. Developers are now competing with existing townhouses for investor buyers (because they are unliveable for anyone other than people living out of a suitcase), but the owners of 2-3 year old townhouses have a great deal more wriggle room to lower prices.
There is a widely held conventional belief that market prices of residential dwellings do not fall below their construction cost.
Here is one high profile commentator.
The cost of an existing house is going to be determined not just by the interplay of the number of buyers versus the number of sellers, but by how much it costs for the alternative – a new house.
Construction costs have risen strongly, and it is not just the costs for materials which are at fault.
Simply building more dwellings will not much change the cost of a dwelling compared with income unless land prices fall, materials costs decline, and the increased standards and rules introduced over the past few years are reversed. Land prices can fall but the retreats tend to be temporary. Materials costs are still creeping higher, according to the information I receive, and any watering down of construction standards and safety rules will only ever be minimal.
https://www.oneroof.co.nz/news/tony-alexander-why-nz-is-likely-to-see-f…
Many developers / builders focus on market price relative to construction cost due to profitability. However here is something that manufacturers may forget: buyers (i.e customers) don't care about the cost to manufacture a product or whether the manufacturer makes a profit from the product. Think about the last purchase of any product or service (home, car, car, motor home, holiday, dining experience, etc) - did you care about the cost to the manufacturer / service provider or their profitability in your purchase decision? What did the customer / buyer care about in theiir purchase decision?
One wonders how many of these new listings are from people who bought off the plans, having now settled but are losing $000s per month, and are being forced to sell before their cash buffers run out.
"One wonders how many of these new listings are from people who bought off the plans"
There is also those who purchased off the plans who were unable to get financing to settle at settlement date.
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