Housing values are on track to have the flattest calendar year in more than a decade, despite a smidgen of growth occurring in November.
According to QV's latest House price Index, the average value of New Zealand homes was $908,173 at the end of November.
That was up 0.3% compared to the end of October, and was first increase in average value since April.
However, the average value is still down 0.7% compared to November last year, and down 14.6% compared to the market's peak just over three years ago.
"Time will tell whether or not we're finally witnessing the modest beginnings of the housing market's long awaited rebound, or whether this is just another small bump in what has been a remarkably bumpy road in recent years," QV Operations Manager James Wilson said.
"Interest rate reductions have certainly paved the way for a general lift in activity and market sentiment across much of the country."
"We're now seeing significantly more kiwis at open homes and in auction rooms, which has largely stemmed from what was, for the most part, a slow reduction in property values throughout winter."
"But with such a large supply of homes for sale, demand isn't yet converting into significant price pressure," Wilson said.
"We did see an overall increase in property values around the same time last year too, which petered out as interest rates, the increased cost of living, rising unemployment and slowing migration took hold," he added.
"These are still pretty major factors today and will also continue to play a pivotal role in hampering any significant home value growth as we move into 2025, even as mortgage rate relief finally sets in."
"Looking ahead, there's still very little to suggest that house prices will suddenly take off again any time soon, with supply far outweighing demand," said Wilson.
"There are still buyers waiting in the wings for economic conditions to improve and for interest rates to drop further."
"It looks like they may get their wish in 2025, but it could still be a while yet, and any growth in the meantime is expected to be moderate at best," Wilson said.
The chart below shows the latest regional movements in average dwelling values.
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141 Comments
Some people here think renting is the way to go and investing your money in other investments, it's like they are vested landlords. I believe that if you can afford a house, it is a great investment, I call it a compulsory savings scheme. In 10 years time your repayments will not have risen like rents and you will have the comfort of not having a landlord dictating your cost of living. I am a landlord but it makes me very happy when I see people move into their own home.
The property industry has maxed out their peddling of fear about rent increases and paying the landlords mortgage. They've maxed out all possible FOMO angles to get everyone to buy which is why house prices are so out of whack. Id rather have funds invested in stocks for the next five or so years than NZ property which will still be in a hungover state for a while yet. And the higher they remain the more Kiwis will leave which won't help.
Yup. Higher house prices and greater outward flow of skills will drive up demand for imports in the short run and constrain economic capacity at the same time. Such developments risk worsening our current account balance from the already pathetic levels.
At some point, the NZD could get seriously whacked by foreign investors and rating agencies.
As long as we are better than most of a bad bunch we will be fine.
The days of landlords dictating anything to their tenants are over now. Rents have been flat for a long time. Expenses like insurance and rates have not.
Anyone with a good tenant is going to think twice before raising the rent. There are plenty of other rentals out there. Good tenants, not so much.
We have got very good tenants in all of our rentals as we do a thorough check before accepting them.
No issues with raising rents when required and if the tenants do not want to pay the increase then they are free to choose somewhere else.
We are providing a service and running a business just like everyone else.
If you believe that landlords are always going i be accepting low returns in the future then you are sadly deluded.
No issues with raising rents when required and if the tenants do not want to pay the increase then they are free to choose somewhere else.
Sounds perfectly reasonable. As with any business decision however, you'd have to make sure that the extra juice is worth the squeeze. It's an awful lot of work performing all those "thorough checks" (or a lot of money paying someone else to do them for you), along with all the required advertising and viewings.
It may very well be a better business decision to leave the rent as is, which is what the data suggest most landlords are currently doing.
All the landlords that I know in ChCh have or are putting up rents appreciably.
Some maybe only $20 per week for long term tenants but on average approx. $50 per week.
You have to realise that the non deduction of part interest as a legitimate business expense has partly caused this and as well rates snd insurance have gone up.
Anyone that is prepared to accept the same rent is not running an efficient cost effective business.
All the landlords that I know in ChCh have or are putting up rents appreciably.
No they aren't.
All the ones that I know and ourselves are definitely raising rents!
Personally speaking we probably have not put ours up by as much as we couldve but then again we manage our and bought them at value prices.
Then you and all your mates are outliers.
Demand is good in Chch for good quality homes with decent space.
So what. Rents aren't rising. If it's true that you and all your mates are putting up rents then you are outliers and it doesn't reflect what the Christchurch rental market is actually doing.
It blows my mind that this guy has mates. Seems like an absolute t0$$er.
Looks like the rents spiked up after National were elected last year and have remained stable ever since/slightly dropped from January to April this year.
Median weekly rent in Christchurch City, New Zealand
All residential property types, Jun 2014–Jun 2024, NZD per week - Provider: Tenancy Services
We are providing a service and running a business
I am naive in such matters, but I always wondered why a lot of those providing the service of accommodation get to finance their business at residential mortgage rates. Surely they should be paying a business loan?
Commercial property rates too, since they are generating an economic return from a property and should be able to pay more.
The loans are secured by residential property.
Businesses are a bigger risk and so the interest rates are higher.
If rates were higher then guess what?
Less landlords and less rental accommodation
If rates were higher then guess what?
Less landlords and less rental accommodation
If mortgage interest rates for non owner occupier buyers, there might also be:
1) higher rates of home ownership
2) lower house prices
3) fewer households requiring accommodation supplements
4) fewer households requiring social housing
5) fewer households requiring emergency housing
6) fewer people who are homeless
7) less government money spent on accommodation supplements, social housing, & more money available for the health system, education, emergency services, infrastructure projects, etc
8) less wealth disparity
9) more money invested in productive businesses
It would actually be the total opposite if landlords were paying higher interest rates just as rents have gone up with the higher rates over the past couple of years.
When I have purchased great property at under true market value, I always wonder where are these so called desperate first home buyers?
I often see the first home buyers competing against each other rather than against investors, which is good for us!
Never-ending house price rises will only lead to social destabilisation, more leaving for foreign shores and also never-ending rent increases to the point where it consumes so much of the masses income simply to have a roof over their heads that more drastic action need be taken at government level. History repeats itself and one only needs to look back at the history of landlording in the likes of England to see that it was through the removal of incentives for landlords that allowed the middle class to thrive and succeed, bringing a greater public benefit for all:
"Post-war Acts revolutionise lettings
Private landlords remained firmly in control right up until World War I, when it’s reported that 90% of the population rented their homes. The 20th century did bring about change, as those in power linked poor living conditions with poor health and wellbeing. The first Rent Act was passed during the First World War (1915) as a “temporary” means of preventing landlords from exploiting the increased wages of munitions workers.
The Housing and Town Planning Act in 1919 quickly followed, also known as the “Addison Act”. It ushered in the era of state-owned council housing and as a result, returns for private landlords diminished and many left the sector"
The loans are secured by residential property.
As are a lot of SME business loans...
I generally agree.
Then I am looking at my investments this year.
Equities = +46%
Funds = +30%
Crypto = +300% or so
Property = -0.7% (according to this article).
So you have to wonder whether there is something fundamentally broken in our property market going forward
Well some of us are happy with just the one house and saving $750 a week in rent. Probably best to factor that into the "investment". One of those on your list is not like the rest.
Well some of us are happy with just the one house and saving $750 a week in rent. Probably best to factor that into the "investment". One of those on your list is not like the rest.
Nick and Matt Mowbray didn't care about "saving $750 in rent" Z. They borrowed $20,000 and slept on a factory floor in China.
It's all about trade-offs.
Yes load up and gear up into the assets that are +30-300% pa and avoid the assets that are -0.7%.
what could go wrong....
Yes load up and gear up into the assets that are +30-300% pa and avoid the assets that are -0.7%.
All the on-chain evidence suggests that many who use leverage on the crypto markets are taking risk far beyond their ability to manage. There's only a few out there with the chops to do it properly. Even during the recent push through USD100K, people got wrecked on leveraged longs almost immediately. Sam Bankman-Fried was actually a very good crypto trader and he got wrecked. For most people, trying to emulate SBF is like a monkey trying to fly a plane.
However, even in the past month, there are large-cap coins that have returned 270%, even after dumping up to 20% in the past 24 hours. Realistically, if the sheeple think buying houses to live in is somehow a de facto investment that outperforms credit creation + premium, they have to first determine what the risk-free return is. They have no idea.
Everyone has their own logical blind spot IMO. Yours is believing that unregulated computer programs designed for gambling (crypto) is a sound financial investment.
I suspect you didn't read what our good JC wrote entirely correctly.
properties just a class of investment, like a share can go up and down, property prices can also go up and down.
and a golden rule in investment is, buy low and sell high. and the property prices are their lows....
Huttman, to be fair shares are not like properties at all!
A property will always have a value and be saleable.
Shares over the years have often had no value apart from toilet paper.
You have absolutely no control whatsoever over the value of your shares as there are so many other people that own your share which affects what happens to the price.
A house, you control and guaranteed income and an increasing value.
Nothing like a share at all!!
A property will always have a value and be saleable.
Nope.
Plenty of places were homes re given away for free as they are worthless. Plenty of places were they are unsaleable due to climate change impacts (flooding, coastal erosion). In NZ what is very true is that if you take a mortgage out to buy a home you owe the bank regardless of whether the house devalues to zero and there is no option to walk away.
Of course. That is what pragmatic investing is but instead you get the complete irrational opposite with everyone loading up on assets that have had high returns and selling out of those that have had low or negative returns.
"Some people here think renting is the way to go and investing your money in other investments..."
I am one of those people.
Have you ever heard the old adage that it is risky to have all your eggs in one basket?
For that is what buying a house is if you're funneling every spare cent into it.
Further, they often become a millstone around your neck making it hard to up sticks and head off to where the money is better.
Further, while funneling every spare cent into a mortgage, you've no time or interest, or money, to learn about other investments that generally outperform the 'compulsory savings scheme' that you call a mortgage.
My advice - never buy a house to live in without a substantial deposit and a mortgage that can be paid off inside 10 years.
Some people here think renting is the way to go and investing your money in other investments, it's like they are vested landlords.
If you have the deposit (~200k) for an average house in this country (~1M) then yes investing your money in other investments is the way to go. That 1M house you could buy is probably costing ~40k in rent per year. All you need is your 200k deposit to be invested and have a return of 20% after tax to cover the rent. Quite easy to do IMO, cryptos are the obvious winners and will continue to be (feel free to quote me on that).
yes good idea, go drop your 200K house deposit in to crypto. what has this site become?
You'd think if crypto is such a great investment why are these bros spilling their secret sauce? Could it be that its value is completely dependent on finding more and more bag holders?
You'd think if crypto is such a great investment why are these bros spilling their secret sauce? Could it be that its value is completely dependent on finding more and more bag holders?
You could use the same argument about gold. Its price will only increase as the primary "bag holders" (central banks) buy more of it.
But whether you like the idea or not, the Aotearoa Ponzi relies more on marginal buyers than gold. It's not some magical or natural phenomenon cooked up by a celestial being or a sorcerer.
Gold is a real commodity with actual uses, though I from my understanding the average stock market return is better at least over the last 20 years. Housing is a fundamental need for humans that should not have been financialised.
darn should have said last 10 years
Gold is a real commodity with actual uses, though I from my understanding the average stock market return is better at least over the last 20 years.
The SPX Total Return in USD terms v. in gold terms from January 1999 to now is as follows:
USD: +695%
Gold: -17%
So that would suggest your reckon is wonky.
The big players have been mucking around with commodity prices using derivatives and other tricks for years.
"Some people here think renting is the way to go and investing your money in other investments, it's like they are vested landlords. I believe that if you can afford a house, it is a great investment, I call it a compulsory savings scheme. In 10 years time your repayments will not have risen like rents and you will have the comfort of not having a landlord dictating your cost of living. "
Each person needs to do their own calculation to make a fully informed decision.
The purchase of a residential dwelling can represent 500 - 1000% of a owner occupier's net worth and entire lifetime savings. This single decision has life changing outcomes and will affect their entire future financial security.
Under some conditions it is better to buy and under other conditions it is better to rent.
The other key aspect here is that with a fixed nominal mortgage, the higher the inflation rate, the greater the average wage growth and thus the faster the repayment (in real terms).
Inflation wittles away your housing debt, versus driving up rental costs.
You also need to compare relative cost of ownership over very different timeframes:
a) 10-30 year term of mortgage, followed by free/secure accommodation in retirement (minus ongoing maintenance).
versus
b) Life-long rental costs ($40k/yr & growing x 60 years. With people living longer and longer past retirement age - that could be x 70 yrs.
For some time, solely on anticipation of falling interest rates, DGM's have been spreading fear that Aug-23, Oct-23, Aug 24 and now Dec-24 is the last chance to buy a house. Time has proven this to be a complete falsehood. Post 2021, I believe FHB's always had and still have time on their side to build bigger interest saving deposits before they commit. This way they are more likely to enjoy home ownership without it owning them. The market is still overpriced and is adjusting accordingly.
DGM's have been spreading fear that Aug-23, Oct-23, Aug 24 and now Dec-24 is the last chance to buy a house. Time has proven this to be a complete falsehood.
Dec-24 is not over yet, so it cannot be complete falsehood, unless you have some device that allows you to see the future?
Rookie
RP thinks he is the all-seeing financial genius godfather to FHBs simply because he called a decline in house prices over last couple of years. It was obvious to all but the very ignorant what was going to happen especially as the Government and RBNZ announced actions to cool the market . . . but it really has gone to RP's head that he is a financial genius.
The guy gave poor advice to FHB over the period 2017, 18, 19 that they should be keeping TD rather than buying. Sadly, any mug who took his advice would currently find houses still 15% more expensive.
Despite what RBNZ and QV have to say, he has the arrogance to think he knows better that "The market is still overpriced and is adjusting accordingly."
Like cigarettes, the guy's comments need to come with a financial health warning.
Printer8, had they crashed post Nov-21, you would have posted "given the froth, it was an easy forecast to make"
Seemingly triggered, evidentially, like others here, you've certainly got an axe to grind and cannot seem to stop wildly swinging it. How about less emotion and more positive thought for the FHB's who have had and do have time on their side to make better educated choices.
Yes and if I listened to RP I’d still be renting in some shtty suburb but I’d have my TD’s charging ahead.
Sounds backwards. You can rent in a nice suburb for less than the mortgage payments at 20% equity for the same house in a shit one...
Good areas are mostly owner occupied that’s why they’re good areas. Rentals in top areas are not easy to find compared to cheaper areas.
That’s great your rent is cheaper at present but those paying mortgages now won’t have to find what ever the market rent will be in 20 years time.
Rent increases with time and inflation. Mortgage payments and Debt reduces with time and inflation.
It has been the RE industry and the landlording brigade who have considered themselves the financial geniuses.
Confusion between financial genius or suffering from confirmation/recency bias is difficult to differentiate sometimes during the frenzy. Only in hindsight can you tell.
You can tell, they can't XD Just like gambling, you only ever hear about the wins
If I had listened to RP I would be down $300K since the end of 2020.
I would be down over a mil. He only knows TDs like my parents. Their 200k in 2000 was only about 250k in 2020. Imagine if they had invested in a couple of houses, be 5 x as much at least.
It was obvious to all but the very ignorant what was going to happen especially as the Government and RBNZ announced actions to cool the market
Might have been obvious to you, but it didn't seem obvious to these commenters.
Reminder of what some commenters were saying on interest.co.nz.
Names omitted intentionally
a) 9th Nov 21, 2:38pm
"I have always looked at this from the opposing direction - the risk in not owning a property? If you do not own a property you are short, not even square, but short"
b) 9th Nov 21, 5:52pm
"Or maybe right the opposite, don't hesitate, be brave and go for it, you'll be fine"
c) 23rd Nov 21, 8:52am
"It makes absolutely no sense for a couple like this to bank a capital gain now rather than wait two years and avoid 90k in taxes. The market is not going to crash 10% in the next two years."
d) 9th Nov 21, 2:38pm
"locally, I can not see anything in the near future that would decrease these current values."
e) 14th Oct 21, 11:25am
Shrewd investors will capitalise on perceived price weakness - cementing their position for the next market upswing.
Well located property remains a prime investment for the long term. (But you already know that.)
f) 27th Aug 21, 10:22am
Better to have an "eye-watering amount of debt" at a young age - than an old age.
We can't blame younger people for seeking a foothold on the housing ladder. The sooner they do so, the better.
g) 5th Oct 21, 9:26pm
A market dip is a good time to buy...... adopting a "counter-cyclical" strategy.
Astute investors will be poised ready to pounce.
h) 11th Nov 21, 10:33am
Golly gosh, old chap, there seems no end to these bothersome price increases.
Better get in now - before it's too late!
i) 10th Nov 21, 7:41am
Auckland is still going crazy, no evidence of a slowdown...
Awesome post. I recognize the owners of most of these irresponsible posts. They're either still posting present day or have ditched old accounts and reincarnated with new.
27th Aug 21, 10:22am - Better to have an "eye-watering amount of debt" at a young age - than an old age.
The owner of this one is an infamous Property Broker.
Ohh shuttt upppp mate. Trigger happy on comments daily. Is this your full time job?
Things must be bad. Now they're turning on each other 😂🤣
Iceman has already declared he's "much smarter" not to have dialogue with me.
That was directed at you RP. Back up and jumping up and down like a little girl at literally every property related headline. What a champ.
I post hope to prospective FHB's and as a fare paying passenger, I will continue to do so. What do you contribute? God only knows why you persist in playing a fruitless game of whack-a-mole on those with differing views while repeatedly making a complete fool of yourself. What valuable insight have you ever offered up on here?
Learn to control yourself. If you're prepared to blurt to all and sundry that it's smarter not to communicate with me, then demonstrate some credibility and walk the talk. For starters this will reduce your posts by 3/4.
Things must be bad. Now they're turning on each other 😂🤣
You should withdraw your previous statement as it was an obvious mistake on your part.
I post hope to prospective FHB's and as a fare paying passenger, I will continue to do so.
Haha you can't be serious. If I was a prospective buyer and followed your comments here... I would of given up hope & turned into a life time renter waiting for a miracle to happen in the property market.
You would end up like this...https://streamable.com/l0zkm0
Look at RP - it’s cute that he think he’s doing FHBs a service, let’s all take a moment to commend this fool.
It’s quite remarkable that he is able to trigger you so easily. So who is the real fool? He that you are calling so, or he that acts like so.
I think he just needs someone to give him a hug 😭
Oh look RPs boyfriend IO to back him up. Read the replies to your comments RP - everyone has called your BS - you’re probably just salty because you’ve probably not achieved much in life. IO - no one is triggered except for you who bothered to butt in. If I were triggered I’d be replied to this muppets comments DAILY because that’s what he does daily.
"everyone"
Now this fella feels the need to infer he has an army. This same "army" is perfectly entitled to it's own unique realities.
Enjoy.
Yes was growing tired of the endless ranting between you two. But as you say I’ll but out or else I may risk being dragged into the madness. Hope your hatred of RPs comments doesn’t destroy your day/peace.
Ah, so there’s that admission or clarity on who was triggered. You and RP would make good mates.
Does “champ” need his tampon?
You are so angry that the market has changed for the foreseeable and you simply can’t stand it, you might need a software update as you seem to be malfunctioning from all that bag holding.
Unless we flood NZ with another immigration wave flat to decline is locked in. Add in the educated youth exiting west we are facing the possibility of less renters, especially less quality renters.
Good thing all the bank economists are predicting house growth next year then /s.
Unless we start importing another 75k persons from Phillipines (21k), China (24k) and India (27k) next year, I don't see how we can get any house price growth. Not sure how popular this would be given we've just lost 50k kiwis..
TimeToPlummet
There is one thing banks control however...the availability of credit (and where it is secured)....what they dont control is the desire/ability to source it.
If the expectation is inflation (in a particular segment) then the desire may be there (at certain levels), but if the expectation is zero or negative inflation then the desire will not be.
What are the 'growth' expectations and trajectories?
Housing is directly related to population....what control do the banks have on population?
To further complicate those dynamics....where else can wealth reside?
Yeah except they rely on funding from the wholesale market, so unless they want to seriously cut into their margins ( almost no desire to do so in the history of them exploiting kiwis - see nz govt ejecting 500mil to try bring about competition in the form of kiwibank ) then this isn't going to happen.
Share market +30-40% and crypo +200% are up huge currently so why put your money into 0.7% house growth. Wealth goes where growth is
at 70% of bank lending we have a property backed currency and banking system... used to be gold backed once
Wealth goes where it feels secure....growth is secondary.
Where is the most security?
Follow the lion of the herd - guess who just dumped 3 properties this year. Capital gains tax is on the horizon and housing isn't the free ride it's been for the past 20 years. We've seen in the last 3 years, its no certain thing. I'd say it's the most risky form of investment in current conditions. No chance we get 7% house price growth next year. 1-2% if immigration takes off - but who would want to come here when there's no jobs and unemployment is on track for 5% in the next read
You appear to be making a case against something unsaid.
As to the 3 properties, surely the point of interest is where that capital went? Is even within the same economy?
Lol so you reckon the PM sold 3 properties because he is worried about a capital gains tax??
Even if they brought a CGT in the future it wouldn't cost Luxon a cent.
Any CGT could not be charged on past capital gains so to think this is just ridiculous.
There are so many that think they are financial genius’s when they are just the opposite.
Yes the big gains in property for the average investor or landlord have passed but there is still some very good profitable opportunities around but then many are just not takers.
As for shares, you have no control over them and there us absolutely no doubt that there us going to be a major correction on the horizon.
Grossly over inflated for the returns and propped up solely off all the super funds and that is going to explode at some stage.
I would say he is not worried about his own position as per a CGT but what it would do to the overall housing market. ie it would make it harder for him to unload to another investor who would be hit with a CGT, Luxie has seen the writing on the wall
There is no writing on the wall. Who needs 7 houses ? Remember he is getting older and tenants are a nightmare. Time to cash in a few and just park the money and reduce the stress, he has years still to go as PM.
Yes he is worried about CGT and optics of owning so many houses.
If he's wanting to sell when a CGT is in, it's going to be harder to find a buyer. Common sense right there you genius TheMan3.
Shares are likely to boom again with Trump in power, case in point see his first term, sp500 hit record highs. Remember california is bigger than all but 4 COUNTRIES in the world. You dont dictate share price nor house prices in nz so your point is mute.
Super funds aren't going to explode. What a load of crap. If anything retirement funds are going to balloon once Kiwisaver eventually becomes similar to aussies setup, compulsory, higher % saved and the main driver of post retirement funding. Writing is on the wall for this, it costs $30 billion to fund the current non-means tested welfare that is super in nz.
This is coming from someone (me) who has just bought a IP settling on Friday this week. 7 figure mortgage rollover.
Lol you really think Luxon js worried about his financial position that he needs to sell?
The sharemarket will have a major crash as the prices being paid for the shares just does not equate with the profits being made.
The Traders do not give a toss as they make their money on all trades.
Watch this space.
Yes he is worried about CGT
Luxon has just under 5 years before he needs to worry about a capital gains tax.
Yep time to distribute his individual wealth amongst his family so that each individual in his family has a modest net worth, rather than currently his solo individual high net worth - which would be taxed at a higher rate once CGT comes in. It's like selling off your assets before your 65 to claim max benefits and retirement funding - IRD have clawed those right back to 10 year tests, so you have to offload nice and early. Combine with the optics of him being a greedy landlord, hes shifting his PR strat plan into motion. Just look at the polls, hes struggling, people dont resinate with him.
He's followed the same script as John Key. Something something penthouse in Parnell. Read through the comments on those articles and you'll find similar people saying JK wasn't doing anything to be worried about.. Last I heard the bloke who bought it sold it for a huge loss.
If you'd listen to Indepedent observer you'd pick up on his famous chain of thought, History Repeats Itself.
Yeah my view was he should have never had rentals prior to even running the last election as it was always going to backfire on him - hence my suggestion that his wealth be put into a blind trust to avoid any bias towards any particular investment class. Owning a lot of rentals during a housing affordability crisis is political suicide in my opinion and it surprised me that he got the backing he did during the election - but then again I think people just wanted to get rid of Labour at any cost as opposed to voting in Luxon/National based upon any real merit of improving things (and I’d regard myself a centrist or centre right these days).
Selling up his rental portfolio after getting elected politically upon more favourable terms for property investors (interest deductions) seems like a bizarre move - like he doesn’t care at all about the optics of it. But I guess he is actually that arrogant especially after the ‘im well off, I’m financially sorted’ comments. It’s not particularly likeable personality traits - and I don’t have any political bias in this. If Adern or any other PM did or said this my view would be the same.
So you would prefer the country be run by people who have had no financial business success whatsoever from Labour, Greens and TPM??
No wonder people dont get ahead financially, they lack common sense!
Yeah lets have the Lefty non successful people making decisions.
What is a NZ property worth in relation to global values?
.
Good to read a realistic commentary for once rather than spin
Might be 'good to read' but very, very, very few of these article address the primary source of our inflated house prices ...
... The expectation of future un-taxed capital gains !!!
How do I know this? I'm pretty much always looking for developable sites but I tell real estate agents I'm a land banker. They almost immediately truck out the line - which is total b.s. now - that 'property doubles every ten years' even if what we're looking at has absolutely zero chance of that ever happening.
Subdivision of larger blocks still has returns, as long as you can get the block at a decent starting price... not many have 5mil and the funding cost is high with delayed RC etc...
'property doubles every ten years'
The property promoters need to give buyers confidence to buy so that they can earn their commission.
This highly repeated narrative by those with their vested financial interests has led many to believe that buying housing is a one way bet and many were willing to bet 500 - 1000% of their entire lifetime of savings when house price risks were extremely elevated.
The market is still a dropper for a shopper eyeing a topper-upper flopper.
It is hugely amusing to find and read the 'bank economists' (and RBNZ & Treasury predictions!) of house price increases made over a year ago. It's also worth reading the comments and seeing who was running counter to these predictions and so got it right.
hint 1: using google, append the search words with 'site:interest.co.nz'. This will return only interest.co.nz content. (This is the same as the search box in the top left corner on each page.)
hint 2: with the google search results, select 'tools', select the 'Any time' drop down list, select 'custom range', enter your range.
yes
There was a certain commentator on here saying for most of this year to buy before Xmas or you will have missed out for this cycle. Ie be quick..it’s FOMO time. Well it’s almost Xmas and prices are still flat with no sign of prices entering a period of sustained growth. Nobody has missed out. Plenty of houses for sale still with flat prices.
Given the yield curves are only just normalising, I think the economy is going to be in a tangle for at least the next 6-12 months with low profits, business failures, job losses, perhaps rising unemployment etc. Hardly the conditions for a booming property market. Unless the current government suddenly change their tune and do a 180 by doing a massive spending program to stimulate the economy, I think we’re going to be in a period of malaise - but if the government do start spending a lot, it risks inflation rising once more and the return of rising interest rates again..so no net positive for house price appreciation.
A flat market seems like a pretty good time to buy... or are going to wait for the next round of FOMO?
Who says FOMO is next? (those with vested interest keep saying FOMO is just around the corner again..in order to try and scare FHBs into a rushing into buying - for their own financial benefit). But there could be a return of FOOP (if the economy really deteriorates) or it could just be flat for years or even decades. FOMO is always just around the corner for those who desire continue capital gains for their own financial benefit.
Be careful not to be this guy https://streamable.com/l0zkm0
Surprised to see this in one woof today, Six reasons not to buy a house.
First anti house buying article i can recall from that site
https://www.oneroof.co.nz/news/six-reasons-you-shouldnt-buy-a-house-rig…
Imagine what it will do to the market when this narrative goes mainstream. We are not there yet.
The author also writes:
For me, I’ve decided it’s the right time to spend a lot of money on a property, even though not all data points scream “buy now”. You weigh up the good and the bad and then decide what’s right for you.
Words of wisdom from non-economist Mr Ed
Follows on from his 6 reasons for deciding to buy earlier. Given he is likely in a good financial situation it probably doesn't matter for him when he buys I suspect. These articles are also tagged as Advertisement, not to say they can't provide food for thought, but who knows, he may even live in a house he owns but is just spinning a story.
This is the house he ended up buying... https://www.barfoot.co.nz/property/residential/auckland-city/orakei/hou…
He explained his reasons in his podcast
which episode.
1903
Cheers will listen once kids are in bed tonight. Tidy house he got himself..
Rewarded the seller with a 6.5% gross annual rate of return. (Not sure what $$$ the seller put in from when it last sold in 2004 for $635k.)
https://www.barfoot.co.nz/property/residential/auckland-city/orakei/hou…
https://www.opespartners.co.nz/property-markets/auckland
Assuming that the dwelling remains relative unchanged (i.e no major redevelopment, etc) and given their forecast of 6.0% p.a for house prices in Auckland, he is expecting the house price in 2124 (100 years from today) to reach $759,018,760.
Thanks for that, dude has (had) some coin as well as a house now. The article may have been written in advance but it's easy to amend it to make it factually correct before publishing.
Auckland is the canary down the mine of the national real estate market. There was a small amount of growth last month. It's not big at all, but in the context of reversing a downward trend, it represents an interesting piece of data. The fact it coincides with a decrease in the lending rates cannot be ignored. The next few months of HPI data will show whether this is a change or a blip. I would like to see modest gains annually that become reliable and predictable (2-4%). No surges or slumps. Not enough to invest against, but it allows buyers to have confidence.
Clearly we already have house price growth so going forward the rate depends on the Feb OCR announcement. Basically the signals are its going down again, so if that actually happens and then holds then we will see moderate price growth in 2025
Spruikers are getting real desperate out there, bragging about a house making an $87k "profit" in 4 weeks, yet it's still sitting unsold on the market. So... where are the actual examples of homes being flipped for a profit?
https://youtu.be/dS5ZY0HzuIg?si=fD9FPoB8d3aP5KEU&t=157
https://homes.co.nz/address/huntly/huntly/18-meadows-lane/LgqYX
Good luck to anyone buying in Huntly East in a former subsidence area from the old coal mine
In sure I was told that house values were going to drop 10% this calendar year by one commentator, and 30% by another commentator.
1 still thinks he's not far off the 10% drop.
not in Chch, Rookie.
Forget the Auckland market, it is overpriced and has been for years
Don't worry, they'll adjust by inflation, no, not the fiddled CPI inflation the "real" inflation (IOW: pull a measure out of their a**) and voila, there it is.
Or they will create stories that the OCR is going to drop again early next year and that is guaranteed to kick start house price appreciation again..(just as they have been saying all year and yet prices are still flat!)
Or they will create stories that the OCR is going to drop again early next year
Thats almost certain, even the RBNZ forecasts show it...would take a fairly sizeable event to cancel the Feb OCR cut.
You’ve completely missed the point.
So your point would be what exactly ? The "Crash" is going to continue ? Clearly the drops have ceased and with another cut in Feb there is only one way house prices are going from here. The gains may not be huge next year, who cares if its only 2 to 4 %.
What crash are you taking about? House prices are flat.
You mean the bit where you tried to make it about so called spruikers instead of the DGMs that the thread was about. nah, didn't miss it, just ignored it.
Exactly - as you admit, your view is 100% biased and only considered one side of the market narrative. It’s like trying to describe a coin but saying it only has heads and no tails. It isn’t a complete view as it completely ignores one full side of the story.
Pot, kettle, black.
The difference (that you completely miss because you’re lost in confirmation bias) is that I’ll openly admit that property bulls could be right in their predictions (they honestly could be).
But you will never admit that a group you childishly label as ‘DGMs’ could be right.
So I admit that both sides could be right on their predictions but you will never do so - and yet you accuse me of being biased with ‘pot, kettle, black’. And yet I admit that both sides could be correct, or they could be wrong.
Pot, kettle, black is just like calling people Doom Gloom Merchants that expose your one sided/unbalanced position.
Really? interesting, I can't recall having ever said that prices can only go up. I have repeatedly said i think they're going sideways from here for a while
that a group you childishly label as ‘DGMs’
Ah, and if we change that word to spruikers its suddenly not childish? Again., pot kettle black. As an engineer I love standards, ain't nothing better than a double standard right IO?
Both terms are childish and I refuse to use them - see my posts saying exactly this over the past 12 months. It’s just the ratio of use of the term DGM to spruiker on this site is about 5 to 1 hence why I despise this term more..because it is used far more.
Check the comments section and count them up - sometimes it’s 10 to 1 or 20 to 1.
So i decide to do a quick check of your claim..
i googled REINZ hpi Site:interest.co.nz from the last year.
First few results:
https://www.interest.co.nz/property/130751/housing-market-warms-over-sp…
spruiker: 2, dgm:5
https://www.interest.co.nz/property/129705/inventory-30-year-year-augus…
spruiker: 2 dgm: Phrase not found
https://www.interest.co.nz/property/130236/house-sales-declined-septemb…
spruiker:1 dgm:2
https://www.interest.co.nz/property/130254/more-3000-residential-proper…
Nil all.
https://www.interest.co.nz/property/128703/housing-sales-crashed-gfc-le…
spruiker:8 dgm:2
Total: 13 instances of spruiker, and 9 of dgm.
hmmm, thats a long way from 10 to 1, and in the other direction, your credibility isn't doing so well on this one.
Prices were also forecast to rise by 10% this year by a variety of forecasts and commentators. Goes to show there is no point putting any weight on any such specific predictions.
The only person who is right and is truely believable is the person who admits they don’t know what is going to happen (but that requires removing beyond the ego). But humans can’t tolerant uncertainty such as this - it is too uncomfortable for the typical persons mental fragilities to tolerate so instead they need to create a story to believe in to eliminate this discomfort (eg prices up/down 10% next year) - and almost certainly the story they create is that which best suits their own financial gain in the short term as opposed to that which might be best for society/country as a whole in the long run (ie a view beyond the ego/self interest).
"There are still buyers waiting in the wings for economic conditions to improve and for interest rates to drop further."
There are still buyers in the wings waiting for the housing crash to full play out before they consider buying. Fixed that for him
waiting for the housing crash to full play out before they consider buying
Yea, there are always people who think fantasies can become reality.
Housing investors going fine in Hamilton, Hastings and Invercargill. Bit of an implosion around Roto Vegas though.
Some great points here about housing and other investments. The market’s definitely tricky right now! I came across this breakdown of what’s happening in the property market—worth a look: https://www.opespartners.co.nz/property-market.
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