A good start to summer trading at Barfoot & Thompson but high stock levels could be a worry

Property / news

Barfoot & Thompson's sales and selling prices both headed higher in November but the agency has a mountain of stock to deal with

3rd Dec 24, 10:43am by Greg Ninness

Barfoot & Thompson, Auckland's largest real estate agency, had a reasonably good month in November, with sales and selling prices both rising. But from a market perspective, both of those trends are likely to be overshadowed by the absolutely enormous mountain of properties for sale on the agency's books.

Barfoot & Thompson sold 1002 residential properties in November, up 3.4% compared to October and up 4.8% compared to November last year.

It was the first time the agency's sales had been above 1000 since March, usually the busiest month of the year, which bodes well for summer trading.

However, November's sales were still down by 35% compared to the peak of the last boom in November 2020, so there's a long way to go before the market gets back to those levels.

The agency's average selling price increased for the second month in a row to $1,132,795. That's up $2845 (0.3%) compared to October, but still down $53,025 (-4.5%) compared to November last year, and down by $145,852 (-11.4%) compared to the record high of $1,278,647 achieved December 2021.

The median selling price also increased for the second month in a row to $1,011,000. That's up $56,000 (5.9%) compared to October, but down $7000 (-0.7%) compared to November last year.

Inventory glut

While the above figures point to a reasonable start to the traditionally more buoyant summer trading season, from a market perspective they are overshadowed by the mountain of stock Barfoot's currently has for sale.

The agency had 5711 residential properties available for sale at the end of November. That's up 18% compared to November last year, and up 42% compared to the peak of the last boom in November 2020.

November's stock levels were the highest they have been in any month of the year since 2011 and the highest for the month of November since 2010.

That's a particular concern because the ongoing increase in stock levels occurred even though the number of new listings Barfoots received in the month of November (1782) was down by 24.5% compared to October, and down 3.2% compared to November last year.

That suggests buyers are ending 2024 in an extremely strong bargaining position, with plenty of homes to choose from.

"While November's strong trading has set the market up for an active summer's trading, high stock levels will likely contribute to price increases being constrained," Barfoot & Thompson Managing Director Peter Thompson said.

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Source: Barfoot and Thompson

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69 Comments

by M0ralHazard | 3rd Dec 24, 10:49am 1733176181

What are the sales and inventory numbers compared to normal pre-pandemic times? It doesn't seem much use to compare them to the peak of the boom?

by Toye | 3rd Dec 24, 10:57am 1733176662

Inventory for both sale and rent, particularly rent, is at historical highs.

by Retired-Poppy | 3rd Dec 24, 11:43am 1733179415

It's a growing glut of overpriced homes. Add a little insight plus some unemployment and business liquidations and come March-April next year, I think it's more likely than not prices will start sliding once again. In this market ones that tick most boxes have been selling, the rest have languished or got pulled then relisted. Buyers can afford to patiently pick and choose to attain their interpretation of best value.

by tothepoint | 3rd Dec 24, 3:27pm 1733192843

November was a reasonable month, "with sales and selling prices both rising".

People are well aware that housing market downswings don't last forever.

TTP

by HouseMouse | 3rd Dec 24, 10:53am 1733176381

Prices will be flat / ever so slightly rising until Spring 2025, when prices might start increasing a *little* bit more

by Toye | 3rd Dec 24, 10:56am 1733176566

Flat seasonal related noise.

Until inventory clears prices are not going anywhere.

by JimboJones | 3rd Dec 24, 11:03am 1733176999

According to one roof, a glut of supply is a good thing as it means venders are confident enough to put their house on the market! All news is good news for housing...

by Pragmatist | 3rd Dec 24, 11:08am 1733177324

According to the DGMs all news is bad news and house prices can only go down. Both are equally wrong.

by JimboJones | 3rd Dec 24, 11:09am 1733177370

Yep

by Retired-Poppy | 3rd Dec 24, 12:19pm 1733181590

Let us begin,

Prices up 7% in 2025

Prices up 7% next year

Prices up 7% before 2026

Prices up 7% by next election

End of therapy session 💊

by JimboJones | 3rd Dec 24, 1:29pm 1733185788

And before that:

2021: Housing market will crash next year

2020: Housing market will crash next year

2019: Housing market will crash next year

...

2008: Housing market will crash next year

by Retired-Poppy | 3rd Dec 24, 1:50pm 1733187001

Disclaimer: On rare occasions, therapy is known to fall short of the desired outcome....

A house that's falling in value can still be enjoyed. When such episodes occur, falling house prices are a welcome and positive development to those looking to live in and not speculate on. Who really are the true DGM's here?

Spruiking froth off as if it is last chance value is just plain wrong...

by IT GUY | 3rd Dec 24, 11:25am 1733178314

According to OneWoof WW3 would destroy housing stock.... increasing prices of the remaining stock...

What are the clowns AC and TA doing apart from falling over then clown shoes and honking their hooter horns?

Will the latest 0.5% rate cut from the Reserve Bank have much impact on mortgage rates?

They will go down marginally (don’t get too optimistic) with very short-term fixed and floating rates falling the most. But from here the scope for declines in fixed mortgage rates for terms of three years and longer is not all that great. This is because of the reduced scope for lower inflation and interest rates offshore, and perhaps also because of the reduced expectations for growth in NZ productivity recently noted by Treasury.

Unlike the amateurs here, TA knows that 2 year and longer are defined by offshore rates and the rates of the currency swap structure.... because there is not enough term deposit to fund the NZ Lending onshore. Kudos for him to be so knowledgeable, or bricks for the normal clown spruikers on here, who have never spent a minute inside a bank treasury in there woeful spruiker lives.

By the way, having a really low OCR will only make this cost structure worse for 2y+

by EpsomArtsandCrafts | 3rd Dec 24, 11:08am 1733177325

OK so sales were 1002 and new listings were 1782 which means .....

(thank you Greg for the well constructed and written article)

by IT GUY | 3rd Dec 24, 11:21am 1733178088

Right now the only people more desperate for a sale, are people desperately trying to off load boats, which pay no rent but are probably on the mortgage.

I sold a boat for $60k about 10 years ago, vendor now asking $25k on trade me. Sails need refresh but hull improved and now a carbon prod. Sails where not that flash when I sold, but had just won a coastal classic division then.

Waiting to buy back the Glendowie site I sold at 505% off peak... its clearly timing the market winning over time in the market for the non clowns.

by BadRobot | 3rd Dec 24, 1:05pm 1733184325

You don't own anything, stuff owns you - especially boats.

by IT GUY | 3rd Dec 24, 2:48pm 1733190481

There is an old Chinese curse

May you own two boats.

by Toye | 3rd Dec 24, 11:50am 1733179812

...more houses for the stock sodden rental market!

by nktokyo | 3rd Dec 24, 12:20pm 1733181619

Excellent, I was looking for another thing to worry about.

by ThoughtsAndTorts | 3rd Dec 24, 1:32pm 1733185922

What surprises me about housing analysis is the lack of concern people who think prices will go up have about political blowback that could severely jeapordise investment gains.

From 1980-2020 because prices were reasonable compared to median incomes, it was easy to defend the housing market politically. A comfortable majority where in on the capital gains game and so had little need to worry about taxation changes that might harm their ability to realise those gains.

Today could not be more different. There are at least as many people unhappy with rising prices as happy with rising prices. And if prices DO continue to rise in real terms (i.e. become increasingly unaffordable for the median earner) then logically there will be more and more people who want prices to decline. And there are ready made well-known tools to shift gains in land value from private landowners to govt such as land/capital gains taxes.

I'm not going to try and predict what will happen with house rises but I am quite comfortable saying that as shelter/property is a core human need, if the median voter no longer has the ability to affordably access shelter, then that asset class will become highly politically vulnerable to legislation/taxation changes.

Could easily see TOP (or another party maybe even a reformed labour) having a massive gain in political popularity if they came out in support of the Treaty Principles Bill will simultaneously offering land taxes so that the profits from land ownership are shared throughout society. The lack of capital gains tax is in some way a plus here as it allows for land taxes to be argued for directly as an alternative. And even many business owners might be willing to accept that bargain of land taxes instead of capital gains taxes.

I'm calling it here, I think that compared to alternative investments (crypto in particular) housing will be a very poorly performing asset class over the next 40 years. Bitcoin is already comfortably the highest return asset of the last 15 years, and I see no reason crypto won't continue that trajectory going forward. The tailwinds behind it are immense and it avoids the headwinds property is facing as it is fractional, global, and not a core human need susceptible to emotional political arguments (i.e. sad stories about homeless families or people leaving NZ due to unaffordable housing.)

by CN - new | 3rd Dec 24, 1:56pm 1733187417

"if the median voter no longer has the ability to affordably access shelter, then that asset class will become highly politically vulnerable to legislation/taxation changes."

The previous government introduced policies to address housing affordability in the ownership market.

These were changed with the current government. The new policies introduced are aimed at reducing housing affordability in the rental market. The unintended consequence is increasing house prices in the ownership market as non owner occupier buyers are attracted back to the existing dwellings in the ownership market (competing with owner occupier buyers) and away from the new build ownership market, leaving developer's with unsold inventory which is priced above the comparable housing products available in the existing dwelling market.

by ThoughtsAndTorts | 3rd Dec 24, 2:46pm 1733190412

Housing investment decisions need to be thought about across decades, not 3 year terms.

Already we can see directionally how this conversation is changing. Then we have to think "will this situation get worse or better?" then extrapolate out from there.

Rising home prices (faster than real wage growth) will basically guarantee fewer and fewer owners overtime. But 1 person still equals 1 vote, so political influence isn't tied to property ownership.

Good investing requires considering alternative options and all potential risks. My main point is that home ownership as an investment vehicle is highly politically vulnerable in a way other asset classes aren't. And the higher prices rise the more the risk of a serious political response becomes. Labour are arguably already doing this and let's be honest, barely lost the election.

The worst thing for property investors in NZ would be the success of the Treaty Principles bill. Resolve that and suddenly ACT tanks and Labour no longer has a political anchor alienating huge swathes of the NZ voter base.

by CN - new | 3rd Dec 24, 3:31pm 1733193115

"Housing investment decisions need to be thought about across decades, not 3 year terms."

Do you mean "Housing policy decisions by governments (and policy makers) need to be thought about across decades, not 3 year terms."

by ThoughtsAndTorts | 3rd Dec 24, 3:53pm 1733194400

No, I'm talking about individuals buying houses. If you are taking on a 30 year mortgage (as an investor or assuming capital gains) you should have at least some mental model for what happens after those 30 years is up. Especially considering how much people leverage themselves to get a mortgage.

Government's are extremely mercurial, any reasonable read of history shows that. I'd like it if far-sighted governments were planning accordingly but in general it seems to be panicked responses to the current crisis are the norm.

Look at Victoria in Australia as one example. Many property investors here are in meltdown as rapid legislation changes have turned their investment far less attractive and often into a net loss. Certainly a loss when factoring in opportunity cost of other "riskier" investments.

by powerupkiwi | 3rd Dec 24, 4:32pm 1733196769

Either way, political risk seems underpriced. Even the govt we now have, which is led by what is (probably wrongly) seen as the pro owner/landlord party, has explicitly stated that they aim to bring prices down to 4-6x income. That’s a huge drop.

by Independent_Observer | 3rd Dec 24, 4:52pm 1733197953

Interesting comment - I came to the same conclusions about this time 10 years ago and it’s more or less played out that way. And as you say if house prices continue to rise faster than wages then the problems is just going to get worse in the future.

by John from Bunnings | 3rd Dec 24, 1:57pm 1733187422

Unfortunately the voter base won't change in composition for a while yet. 66% of Kiwi's own their own homes, life expectancy is increasing, and fertility rates are declining. It may seem like people unhappy about house prices rising are in the majority if you spend alot of your time online, but it couldn't be further from the truth.

by interesting1234 | 3rd Dec 24, 2:18pm 1733188734

66% don't own their own homes. Until the mortgage is discharged the bank effectively owns it. If we had less reliance on increasing house prices to be able to access credit, then we would be a more equitable society. What impact do we think this will have on banks if the average house did not increase in value for say 20 years? Would they need to consider a bigger push to business lending to get better profit margin on loans?

by The Man3 | 3rd Dec 24, 2:59pm 1733191191

What a poor way of looking at things?

In my humble opinion you would not be utilising your biggest asset correctly if you did not have your home mortgaged!

Borrowing money is the way that the financially savvy and wealthy do get to be wealthy!

Seriously if you have an unencumbered owner occupied home, you are losing out bigtime and do need financial advice as you clearly have not thought it out, as your equity is not bring utilised whatsoever!

by ThoughtsAndTorts | 3rd Dec 24, 3:06pm 1733191617

Borrowing money is the way that the financially savvy and wealthy do get to be wealthy!

Borrowing money AND investing that money well. And then we are right back to discussing what makes something a good or bad investment. If borrowing money via mortgage to buy more property, huge risks around legislation changes.

E.g. 1 investor owns 3 homes. Investor + partner = 2 votes. In 2 other investment homes, 2 couples live = 4 votes.

40 years of "you can't lose on property" is a bad foundation for assessing what the next 40 years will look like. I honestly admire the faith property investors have that come hell or high water, their capital gains potential will be protected.

by CN - new | 3rd Dec 24, 4:08pm 1733195289

"40 years of "you can't lose on property" is a bad foundation for assessing what the next 40 years will look like"

Many property investors are assuming this in respect of their house price growth assumptions. One commonly repeated mantra by property promoters is that house prices double every 10 years. They are willing to take on high levels of debt to finance their purchase of real estate. The house price growth assumptions may prove to be incorrect.

People are free to choose their house price growth assumptions however they are not free to choose the consequences of their choice.

by Weld | 3rd Dec 24, 5:18pm 1733199500

"40 years of "you can't lose on property" is a bad foundation for assessing what the next 40 years will look like"

Especially when the birthrate is plummeting, and the population is aging. Twenty-five years from now there may be very few 25-somethings waiting to get onto the property ladder.

by CN - new | 3rd Dec 24, 3:36pm 1733193379

In my humble opinion you would not be utilising your biggest asset correctly if you did not have your home mortgaged!

Borrowing money is the way that the financially savvy and wealthy do get to be wealthy!

Seriously if you have an unencumbered owner occupied home, you are losing out bigtime and do need financial advice as you clearly have not thought it out, as your equity is not bring utilised whatsoever!

There are 2 inherent key assumptions implicitly being made, either one of which could prove to be incorrect.

by CN - new | 3rd Dec 24, 8:57pm 1733212674

For those owner occupier buyers who are unable to see, the financial consequences of a Peaker and "Buyer Today".

1) Peaker

The median house price at the peak for Auckland was $1,300,000

With an 80% LVR, this is a mortgage of $1,040,000

The 20% equity is $260,000

2) Buyer Today ("BT") - Sept 2024

In 2021, the buyer who waited, deposited the same $260,000 equity into a bank deposit earning interest. Also BT would rent an equivalent house and have still saved money due to the rental being below the monthly P&I mortgage payments of Peaker - in 3 years the savings would have been about $20,000 annually. So a Buyer Today would have an amount of $340,233 to use as a deposit.

The current median house price for Auckland is around $950,000

Equity deposit of $340,233

The mortgage at this purchase price would be $609,767 (an LVR of 64%)

The Peaker has a mortgage which is higher by $430,233 (mortgage of $1,040,000 for Peaker vs $609,767 for BT). BT's mortgage is 41% lower than Peaker's mortgage.

Assuming BT, pays the same exact dollar amount each year that Peaker pays for their mortgage, as a result of that additional borrowing, Peaker is paying $1,232,229 more over the 30 years than BT (This is due to higher borrowing amount of $430,233, and total interest on this of $801,996 over 30 years). BT is mortgage free by the year 2037, whilst Peaker continues to pay their mortgage until 2051 (14 years later) - so after the year 2037, BT can save all that money that Peaker continues to pay on the P&I mortgage.

Assuming same incomes, and same living costs (food, travel, etc except mortgage) , BT can save the total $1,232,229 in payments that Peaker is paying. If BT invests the annual P&I payments that Peaker continues to pay after the year 2037 at 4.0% p.a, then in 2051 this amount will grow to $1,401,500.

Remember that at the end of 30 years, the house price will be EXACTLY THE SAME for Peaker and BT.

BT will have more money available for retirement than Peaker. Conversely, Peaker will have less money than BT at retirement.

That single decision to buy in November 2021 would have cost $1,232,229 extra to buy the exact same house for Peaker compared to a Buyer Today.

Note the equity positions as at Sept 2024 also:

1) Peaker: NEGATIVE $90,000 (negative equity, assuming interest only - house price of $950,000 vs mortgage of $1,040,000) - a loss of over 130% of their initial equity (and likely life time of savings).

2) Buyer Today: $340,233

Owner occupier buyers: CAVEAT EMPTOR

This guy might not have realised it then, but being rejected from the bank was actually a blessing in disguise. Being rejected is better than getting approved to overpay for a house.

https://www.newshub.co.nz/home/money/2021/11/first-home-buyer-not-very-…;

Instead of being a "Peaker", he can be a "Buyer Today"

by The Man3 | 3rd Dec 24, 10:03pm 1733216582

CN, forget about quoting Auckland figures, we all know that it is not the typical market to be buying into

You can make money in the expensive cities, just like you can lose value if your timing is not right.

Why do you think Du Val and some other developers have not fared well in Auckland?

There are far better places to be investing into that is better

by CN - new | 3rd Dec 24, 11:37pm 1733222272

"forget about quoting Auckland figures, we all know that it is not the typical market to be buying into

You can make money in the expensive cities, just like you can lose value if your timing is not right."

Thank you for sharing your professional expertise and insight. Most people in NZ do not know this.

If "we all knew", then people would avoid becoming collateral damage in a property price bubble. That is clearly not the case.

Each person has a different lived experience and perspective. To assume "we all know" what you know assumes we are able to read your mind. I do not have that ability which is the reason for asking questions to understand what people mean.

The purpose for Peaker vs BT is to illustrate the impact of leverage on those buyers at the peak.

To all owner occupier buyers: CAVEAT EMPTOR.

by Yvil | 3rd Dec 24, 3:01pm 1733191270

"Until the mortgage is discharged the bank effectively owns it (the house)"

That's just rubbish, yet so often repeated. The title is under your name, and you can do whatever you want with the house, renovate it, sell it, rent it, etc… The lender holds an interest in the mortgaged house, but it doesn't own it.

by Nzdan | 3rd Dec 24, 4:15pm 1733195723

Yes, we knocked a hole in the wall between kitchen and dining, removed a bulk head etc. Didn't ask the bank for permission.

When we got our roof clad done, I don't recall the bank chipping in for their 40% share of the property.

by powerupkiwi | 3rd Dec 24, 4:47pm 1733197630

Whoosh. Nobody is saying they have literal legal ownership.

by Tui12 | 3rd Dec 24, 3:29pm 1733192942

No the bank does not the title. The title is owned by the mortgagee. How very confused you are.

by redcows1 | 3rd Dec 24, 2:34pm 1733189678

66% of houses are owner occupied. Only 50% of adults own homes.

by ThoughtsAndTorts | 3rd Dec 24, 3:01pm 1733191268

That 66% is the mean though. Something like 70+ for boomers, 45% for millennials etc.

And it's not a 1 to 1 for "owns home therefore doesn't want declines". I know many boomers who have shifted position on this because of seeing the impact it has had on their kids or kids friends.

Even if parents are able to help their kids into homes, the impact of watching all your friends leave has a bignimpact on decisions for many people. So they go with their friends and end up staying overseas.

I'm buying this or next year as I want my own place but deliberately looking at properties without a "it'll go up trust" capital gains premium. Apartments etc. I don't trust that leveraging my arae off to buy land will allow me to actually realise that gain + crypto is so clearly a more dynamic and interesting investment area. Even most of the writers here still think the whole thing is a con lol even though Bitcoin is the best performing asset of the last 15 years bar none.

by The Man3 | 3rd Dec 24, 3:40pm 1733193629

Would love to know where these kids are leaving for overseas, where they think they can afford to buy a home chesper?

They are much less affordable in Oz and Europe in the cities!

Good luck to those that Believe they can

by ThoughtsAndTorts | 3rd Dec 24, 3:48pm 1733194119

They aren't leaving overseas for cheaper property, my point is that they are leaving for other reasons and then end up building thier lives elsewhere.

Who will be more attached to NZ, a person who can reasonably expect to buy a home by 25 or one who can buy a home at 35 with parental support? The intervening years between 18-35 is a lot of life to live and at least based on the people I know is when many have left NZ. Maybe not permanently but certainly for a good chunk of their lives (that their parents aren't getting back assuming they would like them around).

NZ already has a hard time keeping its young people in NZ, the fact property is so expensive relatively just makes it all the more difficult.

by Nzdan | 3rd Dec 24, 4:19pm 1733195967

I suspect many who leave are of the believe that it can't be any worse in Australia, but if it is they can always come back. A worthwhile gamble really, and after the effort/expense of moving over there it would have to be fairly dire for them to be forced to return.

Not to mention, many won't be figuring out the costs the moment they hop off the plane. Will have a job lined up, somewhere to live, all these initial costs will be known and will likely stack well in their favour.

by John from Bunnings | 3rd Dec 24, 4:06pm 1733195195

We will only see with time. I don’t doubt eventually at some point there could be something breaking, but I find people will be surprised at how much slack there is left for this to keep going. Perhaps one day we’ll see a TOP government, but I wouldn’t hold my breath.

by powerupkiwi | 3rd Dec 24, 4:41pm 1733197270

Median voter doesn’t really matter. YIMBYism is a powerful political movement, and it has penetrated both major parties. The policies of the current housing minister are basically identical to Phil Twyford’s. Except Bishop isn’t being marginalised by his own party, so he’s actually getting it done.

House prices are going to be flat or down for decades. The only question now is whether that growth is up, out, or both.

by The Man3 | 3rd Dec 24, 4:55pm 1733198138

Prices are increasing where I am living, that being Christchurch.

Still affordable for those prepared to work and money to be made without any doubt.

Those that continue to bleat on continuously without buying will always be without a home

by powerupkiwi | 3rd Dec 24, 5:40pm 1733200836

Where to start…

Barely rising in nominal terms. And not in real terms. And I’m talking long term. It’ll oscillate year-to-year.

“Affordable for those prepared prepared to work”. For those prepared to overpay?

The bogan bbq boomer housing narrative is over, mate. Making lifestyle concessions to buy a highly leveraged asset at the edge of your affordability doesn’t look smart or morally laudable anymore. it looks like spending 100k on a Toyota Corolla.

by The Man3 | 3rd Dec 24, 10:12pm 1733217143

“Barely riding in nominal terms”

The thing is many of the successful investors do not just buy to rent out and then wait for prices to rise.

They buy at unders with potential, do the work and improve and profits flow, and rinse and repeat.

At the end of the day not everyone has the ability to do this, as I have seen so many call themselves investors which is fair enough

by IT GUY | 3rd Dec 24, 10:38pm 1733218700

i do not understand either CHCH or riverhead which one is king here?

by Yvil | 3rd Dec 24, 2:25pm 1733189103

From the article:

"buyers are ending 2024 in an extremely strong bargaining position"

Yet

"sales and selling prices are both rising"

by powerupkiwi | 3rd Dec 24, 4:49pm 1733197799

Those things are logically compatible. Everyone knows there’s a large overhang of stock, sellers withdrawing from the market, and sellers waiting to list. We’re still in a latent property crash.

by Yvil | 3rd Dec 24, 5:12pm 1733199123

So, in your eyes, a "large overhang of stock" leads to more sales and hicher prices… Interesting opinion.

by powerupkiwi | 3rd Dec 24, 5:47pm 1733201276

Year-to-year, sure. We’re not talking about the market for produce here. People are still anchored on the boom times. Prices are sticky, and many sellers are withdrawing or waiting for a market recovery that’s been promised to them for years.

by Yvil | 3rd Dec 24, 8:28pm 1733210918

Nice, meaningless word salad, PUK.

by CN - new | 3rd Dec 24, 8:38pm 1733211531

"meaningless word salad"

If people disagree with the points being made, then refute the points with their own counterpoints - "play the ball, not the man"

If people don't understand, then they should seek clarification, rather than giving the comment a negative label which highlights the commenter's ignorance and lack of understanding.

The original comment referred to was clearly understood by those sufficiently informed.

by Murray Falconer | 3rd Dec 24, 11:46pm 1733222780

Agree.

Some have a tendency to miss the elephant in the room at every opportunity.

This particular elephant is wearing the "sales mix matters" pants.

One commentor much further up stated, quality that ticks the boxes is selling and rubbish isn't. Whether or not that is true doesn't matter. The point is that it would be one perfectly logical reason for higher prices not being at odds with higher inventory.

by safeashouses | 3rd Dec 24, 4:11pm 1733195474

Why are non spuikers spruiking so hard that it is all doom and gloom? Is that they are providing a public service to everyone not to lose money or are they hoping that they right as to make them feel better that they have not bought?

by powerupkiwi | 3rd Dec 24, 4:52pm 1733197968

What? Incoherent slop.

by TronMVP | 3rd Dec 24, 6:01pm 1733202093

It is pretty clear what he/she is saying

by CN - new | 3rd Dec 24, 8:23pm 1733210611

"Why are non spuikers spruiking so hard that it is all doom and gloom? "

Not doom and gloom, more CAVEAT EMPTOR.

1) Owner occupier buyers should be made aware that buying a residential dwelling using high leverage has financial risks and life changing consequences. They should be informed so that they make a fully informed purchase decision, rather than one solely based on the narrative of the repeated marketing efforts of those with vested financial self interests.

Purchasing residential real estate using high leverage is not a no or low risk purchase as many property promoters and those with their vested financial self interests would have buyers believe. Many buyers believe that a purchase of a residential is low risk due to the fact that in the buyer's lived experience, house prices have shown low price volatility and not fallen by much prior to 2021. There are conditions when buying is low risk, and there are conditions when buying is high risk - most people are unable to identify these conditions.

Remember that for most owner occupier buyers, the purchase of a residential dwelling is likely to be the largest purchase of the household and the purchase price could be 500 - 1000% of their entire net worth (and likely lifetime savings) and this single decision will likely determine the future financial security of the household.

Here are an examples of owner occupier collateral damage from falling house prices elsewhere around the world:

a) https://www.investorschronicle.co.uk/2012/09/20/your-money/property/ove…

b) https://youtu.be/iKPG_l1P7lk

c) https://youtu.be/ugBKnP2FKDM

d) https://youtu.be/fiCXsu_4BoA

Family members lost their entire future financial security leading to financial stress and mental stress. The family had to move into social housing with their children and the children were adversely impacted. The parents were unable to recover financially and lived in social housing for the remainder of their lives. When the parents died, there was insufficient funds in the estate to cover their funeral costs so the children had to pay. The adult children are frugal yet one who is almost aged 50 is still unable to purchase their first home due to unaffordable housing - they are renting and do not have access to the bank of mum and dad to purchase.

A family friend has been caught in 2 house price bubbles - one in Europe and another in Auckland. Due to the large mortgage which they took out to purchase a residential dwelling at the peak, they will need to work much longer and will be unable to retire at normal retirement age. The 2 purchase decisions changed their entire future financial security at retirement as they now have reduced amount of funds available for retirement.

Many recent highly leveraged buyers of 2021 may have lost a significant portion of their life savings which was used to purchase their owner occupier residential dwelling. Some may be in negative equity, many may also be facing mental stress. These households will now be on a very different financial path. Some may now need emergency housing, social housing, or accommodation supplements.

Financial stress can also lead to mental stress for the entire family, and unfortunately some will choose to self harm, and impacting the surrounding family and friends. Over the past 2 years, I have heard of 6 suicides and unfortunately I expect to hear of more. These vulnerable people could be your relatives, friends, colleagues or members of your community.

2) with unaffordable housing, there are adverse unintended long term social consequences to society and financial consequences to governments. One of the unintended social consequences is high disparity in wealth inequality between asset owners and non asset owners. There are many others such as more households

- experience homelessness, separation of families, sleeping on streets, cars, etc

- require emergency housing,

- require social housing and strain on government resources

- require accommodation supplements and higher accommodation supplements, consuming more of government's limited resources

- delay of having children

- increased rates of poverty leading to increased crime - and the long term social consequences of that as these people may become a hinderance to society rather than a productive member of society, as well as reduced levels of safety for the general public

- departure from New Zealand and relocating elsewhere where the quality of life is improved and affordable

3) there are many vested self interests in promoting the purchase of property with high leverage (and these may be not in the best interests of the buyer)

There is no envy of other property owners as is the commonly repeated narrative of those with their vested financial selfish interest attempting to discredit, negatively label, and name calling of those with who are able to see the house price risks. Many of those people who are able to see the house price risks are able to purchase residential real estate on a cash basis (i.e mortgage free) - they are more concerned about the broader impact on society and the residents of NZ as a community, and not motivated by vested financial self interests. For most people in NZ, their motto is "it's all about me", for others in NZ, the motto is "it's all about we"

Those who fail to learn the lessons of history are doomed to repeat them.

People are free to choose however, people are not free to choose the consequences of their choice.

CAVEAT EMPTOR.

by The Man3 | 3rd Dec 24, 5:33pm 1733200395

I have bought many many properties unconditionally sight unseen, and not once have I made a mistake buying them.

Risk is only involved if you do not know what you are doing or havent got the advice from the experienced successful people in property.

One of the reasons people go through life and do not obtain financial success is because they always have reasons why they shouldnt do something rather than why they should.

Those that do well in life generally are those that make decisions without hesitation.

by CN - new | 3rd Dec 24, 5:43pm 1733201030

"I have bought many many properties unconditionally sight unseen, and not once have I made a mistake buying them."

As you are a property expert and property industry specialist, it would be expected that you know how to "buy well".

Most of the population in NZ are not property experts or property industry specialists. Many are essential workers - health professionals, emergency professionals, police, food distribution workers. Most of the population in NZ do not know how to "buy well"

In fact, if the entire population of NZ became property industry specialists, then the opportunities that you get would face considerable bidding competition, and bid prices up and then make it entirely unprofitable for you. Under those circumstances, people might complain that there are a lack of opportunities (like the situation that property developers in some parts of Auckland are currently facing).

by ThoughtsAndTorts | 3rd Dec 24, 5:35pm 1733200512

I'm addicted to arguing with strangers online.

by TronMVP | 3rd Dec 24, 6:01pm 1733202114

Best comment all day

by Chaosinflesh | 3rd Dec 24, 7:35pm 1733207742

I'm addicted to reading strangers argue online, then chipping in my 2c like it's worth something...

In other news, off the back of this article, just checked and my heavily-indebted ex-landlords sold their rental last month. Price TBC, but homes estimate has dropped a million from peak to below their 2015 purchase price.

by CN - new | 3rd Dec 24, 8:06pm 1733209615

"Price TBC, but homes estimate has dropped a million from peak to below their 2015 purchase price."

They sold it below their 2015 purchase price (i.e. the price of 9 years ago).

1) Were the sellers cashflow stressed or under time pressure to sell?

2) What is the address of the property?

by Mr Ed | 4th Dec 24, 6:14am 1733246096

Oats up 20% . Neigh