The sheer weight of housing stock for sale appears to be starting to push down prices, with vendors having to bite the bullet on price if they are wanting to achieve a sale.
Property website Realestate.co.nz reported having a whopping 33,984 residential properties available for sale at the end of November. That's up 21.3% compared to November last year, and was the most properties the website has had available for sale in any month of the year since April 2015.
That was achieved even though the number of properties newly listed in the month of November was down 3.8% compared to October, and down 3.9% compared to November last year.
This suggests properties are taking longer to sell.
With the market now leaning so heavily in buyers' favour, it's probably no surprise the weight of properties for sale is starting to push prices down.
The national average non-seasonally adjusted asking price of the properties for sale on Realestate.co.nz was $863,503 in November, down $29,854 (-3.3%) compared to October.
That slide in asking prices was almost nationwide, with only Gisborne, Manawatu/Whanganui and Wairarapa bucking the trend and posting gains for the month.
That at least suggests vendors may be becoming more realistic in their price expectations and are adjusting asking prices downwards in order to achieve a sale in an extremely competitive market.
Buyers on the other hand, continue to be spoiled for choice.
104 Comments
Fools are an integral part of the food chain it appears https://www.stuff.co.nz/home-property/360504662/pm-christopher-luxon-se…
Anecdotally seems the case. Landlord mate has just sold his last they all went quickly. Moderish homes, good areas and he does the full makeover - new carpets etc, whatever it needs he does it. So yeah good stuff moving, but I'd pick the unsold lower c##p will eventually drive everything down.
Your comment is straight from the mouth of Spruiker Extraordinaire Tony Alexander. REINZ are the real estate industry. They have a vested interest in spinning prices to look better than they are - and that is what they do. REINZ said prices are up to Oct. Core Logic says prices down to Oct. Core Logic are not independent either - but more independent than REINZ.
And your comment is straight from the mouth of someone with perhaps limited mental capacity. The HPI is a stat, and considered the most accurate stat for house values as it factors in market composition on types of housing rather than medians and averages. The stat in itself is independent of any bias around it and doesn’t lie. You’re welcome to pick different entities to look at housing reports that align with your feelings better but everyone knows the REINZ HPI is the superior tool to use.
Well asking prices provide a broader view of the total property market because they include the majority of the properties (the ones that didn’t sell). Factoring both asking prices and HPI can help you understand supply-side dynamics and seller expectations.
At Bunnings, do you just sell one tool to get all jobs done?
Seller expectations are whatever they think they can juice out of the buyer. Obviously people are selling for the highest price possible, so there’s really not much to understand here. This makes asking prices an utterly useless metric, you’re wasting your time looking at asking prices. For something as volatile as house prices, what gets sold is the only way to know it’s true value, and the most accurate way to determine the value of other similar items using that information is utilizing a method that factors in as many things as you can, to avoid skewing of data as much as possible.
“But widespread drops in asking prices often signal shifting market conditions”
and that information about “market conditions” is unable to be derived from the actual house price values themselves..? I think you need to verse yourself better on statistics then you may understand there’s no practical benefit to any other metrics other than cold hard figures mathematically derived, accounted for as many errors as possible.
Also what is with this vested interest/spruiker accusation for referring to the REINZ HPI? Earlier this year when the HPI was dropping monthly everyone unanimously agreed it was the gold standard for measuring house prices, but now because there’s a slight change in data all of a sudden people are spruikers for referring to it ? this site never fails to amuse me.
The problem isn’t the REINZ HPI - it’s that you’re telling people to completely ignore other data inputs while simultaneously admitting the HPI has its flaws.
Are you trying to understand future price direction, or are you only concerned with last month’s SOLD prices?
Is it because falling asking prices don’t align with your vested interests, or does it challenge your perceived reality of future price direction?
Yesterday prices were up in a story (B&T) and today they are down. Hard to predict anything with the data coming through. [Mypointis]
It's a pretty safe prediction that interest rates will continue falling ......
And that's what's whipping the DGM into a frenzy. (Just read their comments.)
TTP
Generally house prices rise quicker during inflation. There are two types of inflation affecting house prices: 1 price inflation 2 people inflation.
It seems both net immigration and prices are not rising, so it is unlikely house prices will rise quickly in the near to medium term.
Tim, you and the housing market share a lot in common. You have episodes of frothing, people often come away feeling disillusioned, you're rather top heavy and right now there are plenty off you. Also, you regard your services as essential but in reality, they're still grossly over priced.
Exactly. That's a lot of unsold stock. Over 4k in Canterbury, nearly 2k in Wellington - yikes!
Centrix reported very low levels of mortgage arrears yesterday. However, around 12% of the eligible population had fallen behind on their consumer credit repayments last month. Business liquidations are also at an all-time high with plenty more expected to come.
In this situation, cash is king!
If you own an ok house in a good school zone. Easy sale for a good price.
Else you are in for a wait and a low price.
Issue seems to be that there are fewer cashed up wealthy middle aged families and more low skilled poor peeps.
My pick is that in the near future the nicer communities will increasingly be gated and have security. The rest will be working for, and stealing from ..the wealthy. Lol
There's never been a better time to be a buyer & seller...
Vanessa Williams, spokesperson for realestate.co.nz, said it was “the perfect market.”
“After 18 years of tracking the property market, this is one of those rare moments where certainty and opportunity align, creating a true ‘Goldilocks’ market that benefits buyers and sellers.”
https://www.stuff.co.nz/home-property/360506754/falling-interest-rates-…
Property people clearly using an AI search along the lines of:
'Write me some sentences that talk up the market as being in perfect equilibrium with prices rising, while the reality is the opposite with dropping prices and rising stock levels'.
Actually I decided to enter that into ChatGPT and got:
"In a flawless demonstration of market equilibrium, we see prices climbing, signaling a thriving economy, even as stock levels climb higher, signaling an oversupply that's actually driving prices lower."
So the rule of supply and demand applies.
End of the day the banks are still restricting access to credit vs the bonus driven lolly scramble of the last ten years. Add in rising rate and insurance, and future tax payer continuing to vote west, it's no surprise.
Greed is great in a sellers market. In a buyers market it is just delusional.
Banks are clearly hawkish on rate cuts at this moment and don't share the same beliefs as many "property economists" who insist RBNZ will cut OCR to the floor to restart the Ponzi.
The US economy posted a record number of job openings, so the Fed rate cut path is also going to be gradual.
Do you think that sickly GDP growth and rising unemployment will be tolerated by the powers that be, especially when the CPI is well within target band (and most domestic inflation that does exist is not influenced by the OCR)?
As B. Clinton said ‘it’s about the economy, stupid’
This was literally an article yesterday saying the opposite:
The Reserve Bank's forecasts for the Official Cash Rate are "too high and too hawkish", according to Kiwibank's chief economist Jarrod Kerr.
Kerr says because of the the RBNZ's forecast OCR track there are not enough cuts being priced in by wholesale interest rate markets.
"We believe the RBNZ will be forced to lower their track (again), and deliver faster cuts," Kerr said.
https://www.interest.co.nz/economy/131057/kiwibank-chief-economist-jarr…
Much will depend on how long Auckland investors can tolerate poor yields / top ups . Not sure even bargain prices would be enough to tempt Auckland investors into expanding . Could be a very long wait for those magical offsetting CG's to surface...If Auckland does reflect the true face of RE in NZ the larger economy will have to significantly move up before anything remarkable happens to RE. The idea that cheap lending rates will fire up an RE frenzy appears somewhat far fetched given the dismal current economy. First home buyers need to be careful they dont end up getting sucker punched by those looking to dump their problems onto others... my 10 cents
The truth of this price 'adjustment' trend has not yet gone full mainstream. Most don't follow property closely and are oblivious.
The big drops will come when the masses believe houses will be cheaper tomorrow and decide to wait.
We haven't got to this point yet.
"The truth of this price 'adjustment' trend has not yet gone full mainstream. Most don't follow property closely and are oblivious. "
In Auckland, it will be interesting to watch the impact on house price growth expectations of the general public when the updated council valuations are released.
Labour will probably introduce one at the next election. It might even seem reasonable at the time. However, I can almost guarantee that any coalition agreement with the Greens and TPM will turn a reasonable CGT into a punitive wealth confiscation tax. What you think you are voting for will be very different from what they deliver.
I think removing interest deductibility was a better measure - at least in terms of effectiveness.
An even better measure would be to ban interest-only mortgages entirely. Though I can't imagine there's too many of those while future house prices gains are off the table and yields are low.
"An even better measure would be to ban interest-only mortgages entirely. Though I can't imagine there's too many of those while future house prices gains are off the table and yields are low."
Percentage of loans on interest only (Oct 2024)
1) owner occupiers: 7.4% ($20.4bn)
2) non owner occupiers: 33.5% ($30.9bn)
3) business: 37.6% ($46.8 bn) - some of this may have gone into non owner occupied residential property
Another case of mortgage fraud coming to light - borrower and mortgage adviser gaming the system. The borrower gets the finance to purchase the non owner occupied property and the mortgage broker gets their commission.
Borrower pursues claim against mortgage adviser when property deal incurs losses. If the property deal had been profitable it is likely that the claim by the borrower would not have been made.
The lender told the adviser it would approve the loan if the couple could show they had savings or cash of $100,000.
The couple told Financial Services Complaints Ltd (FSCL), an ombudsman service for financial services providers, that the adviser helped them to borrow $100,000 from another lender as a personal loan.
They said the adviser told them to get a family member to sign a gift certificate saying he would gift them $100,000.
They complained to FSCL that the adviser had come up with the "deception plan" and led them to believe it was not uncommon. But FSCL said the evidence showed that the adviser came up with the plan and knew the couple were borrowing the $100,000.
"Although the adviser said that he was not seeing emails in his inbox while he was overseas, it was clear he had seen some emails because he personally replied to them. This raised doubt about the adviser saying he had not seen emails about the $100,000 loan being for [the couple] not [the woman's father]."
"The adviser's staff clearly knew that [the couple] were simultaneously borrowing a further $100,000, and getting a gift certificate signed. The fact they did not raise this with the adviser suggested he knew about the deception plan."
But FSCL said the buyers were not "unsavvy" and they decided to continue with the plan knowing it was wrong.
"We also took into account that [they] must have deceived the third-party lender about the purpose of the $100,000 loan."
FSCL said it was fair that the couple and the adviser should bear half of the losses each.
It said the couple lost $164,000 including loss in the value of the investment property, less 15 percent to account for market forces outside the adviser's control, the interest they paid and the losses from the cost of buying and selling the property such as a builder's report and real estate agent fees.
https://www.rnz.co.nz/news/business/535422/mortgage-adviser-told-to-pay…
"Vendor in tears, crowds gasping in disbelief - the auction that just went on and on"
https://www.oneroof.co.nz/news/vendor-in-tears-crowds-gasping-in-disbel…
Seen it too many times before:
563 Borman Road, Flagstaff, Hamilton City - For Sale - realestate.co.nz
Sold for 305k over CV in 2022, been on the market for 6 months through 2 different agencies, would be hard to even get 100k under CV today or ~400k less than paid.
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