People who listed a home for sale and fail to sell it in the early summer trade before Christmas, will have to make some difficult decisions over the Christmas break.
One of the more interesting figures to come out of the latest housing market sales data is the number of properties being withdrawn from sale.
Interest.co.nz's calculations show the number of properties being withdrawn from sale has declined steadily over the last six months, from 3981 in May to 2251 in November. The first graph below shows the monthly trend.
Taken in isolation, those figures might suggest the surplus supply of properties from vendors relative to demand from buyers which has plagued the market over the last few months, particularly in the critical Auckland market, may be starting to subside. If that is the case it would be good news for vendors.
But the fly in the ointment of that theory is the total stock of properties for sale at the end of each month has steadily increased over the last three months. Based on Realestate.co.nz figures, it's up from 29,579 in August to 33,984 in November.
The November figures are particularly telling, because stock levels continued to increase in November. That's even though new listings received in November declined compared to October, while November's sales were up 3.2% compared to October.
The explanation for those apparent contradictions lies in the withdrawal figures.
Stock has been increasing because more vendors have been leaving their properties languishing on the market when they don't sell, rather than biting the bullet on price to achieve a sale or removing them from the market if they don't.
That's not surprising at this time of year because next week the market will head into hibernation for the next month. So many vendors have decided to leave the property on the market for the time being and re-evaluate their options over the Christmas break.
Many are likely hoping another round of interest rate cuts in the New Year will stimulate buyer activity and deliver them a sale at the price they think they deserve.
However, there are a couple of things that could trip them up if that is their plan for next year.
The first is the flow through from any cuts to the Official Cash Rate to lower mortgage rates may not be as great as many are hoping for, limiting their impact on affordability.
And even if mortgage rate cuts are significant, banks are likely to remain very cautious in their lending criteria given the state of the economy.
The second is that anecdotal reports from real estate agencies suggest there is a very healthy supply of new listings building up, ready to come on to the market in the New Year.
So properties that have already been on the market for two or three months will be looking decidedly stale compared to all the fresh new stock.
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97 Comments
Desperation levels increasing.
Given time the dam will break.
As predictable as Night following Day.
Buy one get one free......
It's just like Briscoes. The RRPs are enormous but at some stage you need to clear the warehouse.
So many 2+ million dollar houses in AKL just sitting there.... viewing by appointment (i.e. no one was turning up at open homes).
33,984 listings in November, at NZ Average of 908k each = $30.86 Billion NZD worth of houses for sale.
more rural $1.5+mill stuff sitting around Waikato. Houses too big, lawns stupidly big, pool and tennis courts unused ...price too high.
Correct- add in price too high running costs too high mortge cost too high and vendor expectation too high - should I go on?
It will feel like a forest fire once it starts to go.
Don't worry. 'financial stability' and all that stuff - the RBNZ will step in to protects banks - oops - I meant banking system.
The family visited one of these for a swim the other day. $600 per month to run the mildly heated swimming pool...
cripes. Sold out 4 bedder, sep office, two lounge and swim pool home earlier in year. Power bill in our temp cottage is under $40 per week. Eye opening and has adjusted our thinking on what we buy for our next home.
Surely a solar water heating system is the way to go there...and I'm not even a greenie
I have a glycol based solar heating for water cylinder (450L and 58kL pool). works just fine pool sitting at 28C today any hotter and its not really enjoyable, the solar pump is only like 50w.... for 6 months of the year hot water is free. In fact we have to be careful as water can easily get to 80C for hot water.
Morons and their money, ay? Many of the solar heated pools I've been in over spring/summer/autumn are so damn overspected they're too hot !!! About the only time they have a good temperature is in the early morning.
Thats a human interface or Solar control issue. Get those right and you can regulate temp perfectly.
My house is small, old, unremarkable and I paid too much for it. I think I might live in it forever. Who needs these huge houses?
I went from a 150sq m to a 300sq m both exclude garage... you notice the difference with growing teenage family.
Yep, agree but just remember to downsize before they decide to stay forever!
Well said, Uncle Bulgaria. Chateau ChrisOfNoFame is much the same. And like how its owner dresses, as scruffy as hell. Function over form, ay? Pays dividends.
I just bought 120m2 house, it does have a 160m2 shed though. Balance is key.
people bitch when prices are high. people bitch when prices are low.
The removal of the landlord tax has bought them some time to hold a little longer.
But that's all it is..a timing issue. Won't stop the inevitable.
An indication of reality setting in.. just by pulling your property and hoping a hyped up shortage will push prices up...
Government books says it all.. economy is SICK..
They will need to make much deeper cutbacks at central and local gov of fluffy jobs, and focus on maintenance of existing infrastructure....
2025 will also see Trump come in and cut out all the crap Biden and Wokers where doing, you will see a global recession in 2025.
China is in no position to even save itself here, USA just needs to build some credibility regarding its debt, I see cuts coming not fiscal stimulus. Trumps tarriffs will act as a push to rehome some manufacturing.
Its all deglobalisation and rising rates
The ardern clown show created approx 18,000 additional bureacratic drongos - when will these be re assigned and how much will this save in money and improved outcomes??
I will add that to my 2025 trade recommendations
Short Drongos / Long BTC
The ardern clown show created approx 18,000 additional bureacratic drongos
A commentator here seems to think that Aotearoa bureaucrats are highly sought after globally. I have no idea where that idea stems from.
Well they gave her a golden Harvard parachute didn't they.
It is instructive to all readers of comments on this excellent forum that right-wing commentators comment most on anything related to residential housing investment.
Methinks there is a strong link between limited financial acumen and right-wing voting. It is almost a form of overt entitlement to riches based, not upon skill, but by the ability to to purchase a sub-returning asset while expecting the government to reward them for voting their way.
The correlation has resulted in the National Party to be known by another name: The Landlord Party.
@Chrisofnoname - you draw an incredible long bow - is voting National (right wing)?
I find it quite fascinating coming on here to read other peoples thought processes, you can tell by the way some people think that they will never make it in life. Attitude is everything.
Out the DGMs come out like cockroaches, a breather for them from their miserable lives to post their worthless comments on here.
You mad champ?
Don’t worry, at least you’re “on the property ladder”
Even if that game is now snakes and ladders 🙂
Why would I be mad?? All my rentals are cashflow positive, couldn’t care less. But that’s exactly the moronic comments by people none the wiser. You do you “champ”
It’s painfully obvious, you have extreme contempt for evidence based opinion that shoots down your self serving narrative.
Given the aggression, you do come across as nervous and anxious.
I suspect you are over-leveraged in some areas and the softening rental market is adding to the existing stress of the next leg down in house prices, just around the corner.
Maybe it’s time to learn a new path to wealth?
Iceman, you should come take a look at the 500k of horse truck I have parked in my truck shed....
You can be negative on property prices short term and still have made buckets from property.
You can make money right now, you just need more of it to make subdivision work.
What?? Refer my comment above, I’m good thanks.
Old man yells at cloud vibes
Careful Ice, you look like your in a flat spin. To much debt...?
So wrong, don’t forget what the three letters of the word assume read. Read my comment above
Lets assume I actually read your posts and leave it there. Merry Xmas.
He definitely has too much debt. It's why he comes on here in a huff and a puff, raging at people who say things he doesn't like to hear.
No dumbledorf, your assumptions like your comments are wild.
Careful now Iceman. Step away from the keyboard before you once again severely embarrass yourself.....
There he is, the resident empty vessel that makes the most noise on here on a daily basis.
Yup, Iceman's still embarrassed. You'll find it quite a challenge having to pay for self infliction come 01 March 25 - lol!
Try and enjoy your Christmas :)
You don't understand how return on capital works.
You know the one about stones in glass houses right?
What is "making it in life" by your reckons?
If you have to ask you are already stuffed.
So, based on your recent comments about ROI, can we conclude you're already stuffed?
lol - and all the one trick ponies who think they have a life
"Attitude is everything." - WTF! Seriously???
Where does education and critical thinking come in? (Oh. Right. You're selling religion & subservience. Shame on you.)
Thousands more sold in 2020-22 than long term average
To revert to mean thousands less must sell for 2 years or more.
So, rate cuts will not cause sale surge.
And cuts will be less than hoped for given USA cuts now being removed from promissory previously given.
I posted a couple of years ago that simply not enough property was available for sale in NZ, and calculated (based on time-to-sell vs length-of-ownership vs number of dwellings) that for our market to be healthy we should have approximately 100k houses on the market at any given point in time.
There is huge latent demand for property, but over the last 30 years the reduction in affordable properties for sale (e.g. the first home buyers who move on to their second property but hold the first for rent instead of selling it) both pushed property prices higher and reduced the number of readily-able purchasers. This is a bubble, and was always going to break one day when enough property holders decide it's time to cash out - and once the cashing-out starts it avalanches.
"There is huge latent demand for property, but over the last 30 years the reduction in affordable properties for sale (e.g. the first home buyers who move on to their second property but hold the first for rent instead of selling it) both pushed property prices higher and reduced the number of readily-able purchasers."
There are a number of non owner occupier residential property syndicates operating to combine their financial resources to increase their buying power (and borrowing power) to outbid owner occupier buyers in the existing residential real estate market. (Remember, non owner occupier buyers are able to borrow up to 7x DTI vs 6x DTI for an owner occupier buyer)
To maximise the cashflow from the non owner occupier residential property, it has got to the point where these non owner occupiers are:
1) renting out residential dwellings on a room by room basis (rather than the entire dwelling to one tenant such as a family) in order to maximise the cashflow
2) renting out on Airbnb / Book a bach - though some changes on the Airbnb platform may now have reduced revenues and made this less financially attractive than renting out in the long term rental market.
3) adding rooms to rent out
4) adding other dwellings on the property to rent out.
This is been the impact of re-introduction of interest deductibility for non owner occupiers in the EXISTING residential dwelling market. Some non owner occupier owners are willing to go into negative cashflow for the potential untaxed long term capital gains (i.e after 2 year brightline test which was reduced from 10 years)
The buying advantages of non owner occupiers over owner occupier buyers in the EXISTING residential real estate market:
1) 100% financed purchases of residential real estate (due to equity release / deposit recycling techniques)
2) interest only financing
3) interest deductibility
4) combined buying power of residential property buying syndicates
5) 7x DTI vs 6x DTI for an owner occupier buyer
Owner occupier buyers (especially first home buyers in Auckland without assistance from or access to the bank of mum and dad, and an inability to take on "boarders" or rent out a room on Airbnb) are unable to compete with those buying advantages given to non owner occupier buyers.
Here is a non owner occupier buyer engaging in mortgage fraud (enabled by their mortgage broker) to obtain financing to purchase another non owner occupied residential dwelling (and potentially outbid an owner occupier buyer).
https://fscl.org.nz/case-studies/the-non-existent-gift/
Mortgage brokers find "financing solutions" for their clients so that they get paid their commission.
People are buying now and they know exactly why.
House that is now 1M, will be 1.15M at the end of 2025
Well now you really have me convinced there.
What is your logic behind a 15% increase in the coming year? It is fundamental basis or hype + FOMO?
It certainly isn't based on a strong economy, strong jobs data and easy flowing credit.
its not logic, it came from where all ass clowns magic up things...
Spruiker School: Thinking within the box (ideally a house)
Don't see big gains myself, could be pretty flat for years, its happened before but what is guaranteed is that within a 10 year span it goes nuts at some point.
> guaranteed is that within a 10 year span it goes nuts at some point.
Doubt it. Start measuring price growth in gold or BTC terms instead of fiat and you'll see.
Zwifter: "but what is guaranteed is that within a 10 year span it goes nuts at some point."
So speaks a fool that has no idea how DTIs work. (Other readers, if you don't know how DTIs & LVRs work, for god's sake learn!)
Zwifter, are you just really old, mathematically challenged, or are you a real estate agent?
The snakes here are obviously linked to RE sales...
not sure who's side the ladders are on
Hey lets come back in 10 years and discuss how house prices doubled.....again.
"Hey lets come back in 10 years and discuss how house prices doubled.....again."
People were saying that in November 2021. That would mean that in the year 2031 in November, the median house price in Auckland would need to reach $2,600,000.
From Nov 2024 REINZ median house price for Auckland of $1,038,000, this means a growth rate of 14.02% p.a for the next 7 years to reach the $2,600,000 price by Nov 2031.
If the REINZ median house price for Auckland of $1,038,000 for Nov 2024 is expected to double by the year 2034, then there are some implications of that that some people can see, which have a low probability of occurring.
Love your work!!!
The pyramid scheme promotors don't like facts - comparable to flat earthers really
So min wage to 100k, cup of coffee to $15.... You seem oblivious, or just don't care, that ponzi debt stacking has a huge inflation impact crushing the rest of society. Along with everything imported via Ali express, crushing retail and specialty shops, perhaps you can import fresh food and water as well.
Parasitic property mentality....all about me.
For those who are unable to see.
House price doubling every 10 years (i.e 7.2% p.a) from current house price levels in Auckland.
2024: $1,038,000 (Nov 2024 REINZ median house price for Auckland)
2034: $2,076,000
2044: $4,152,000
2054: $8,304,000
2064: $16,608,000
2074: $33,216,000
2084: $66,432,000
2094: $132,864,000
2104: $265,728,000
2114: $531,456,000
2124: $1,062,912,000 (i.e over one billion dollars)
Yes so what ? Your biggest assumption is that we will even make it to 2054. Try and look at the big picture.
"but what is guaranteed is that within a 10 year span it goes nuts at some point."
I wonder if residential property buyers in say 1994 (i.e. 3 years after peak house prices like the current situation in NZ) were thinking the same way in Japan?
I wonder how many years it took before those property owners began to lose their belief and confidence that house prices would continue to rise at the same rate as in the long term past?
https://fred.stlouisfed.org/series/QJPN628BIS
A recent interview with Ashley Church indicates he is questioning his previously commonly repeated mantra of house prices doubling every 10 years.
https://youtu.be/CWpflvEYhJE?t=496
Wow, don’t overwhelm us with too much information!
The great John Mendel has spoken so it must have some merit.
Turbulence ahead. Fasten your seatbelts.
Yeah. The Ukranians used a booby trapped electric scooter to kill a senior Russian general and his aide as he went to work early this morning. The Russians have accused western intel agencies in being complicit in the op. More escalations incoming.
who would be worried running past a parked electric lime scooter.....
first pagers now scooters.... damn be pints of beer soon,
got me worried
Yeah. I get this is new to you. But this tech has existed for 30+ years. And has been used without MSM ever reporting it.
NB I wasn't suggesting that exploding booby traps are new. Ernie Abbott in New Zealand was killed by one after all. I was suggesting that the assassination of a senior Russian general (who was in charge of Russia's Nuclear, Biological and Chemical defence troops btw) in Moscow during a war with NATO was escalatory.
There is no war with NATO, but you know that.
Westerners are funny. We can fund the soldiers who kill your troops. We can train the soldiers who kill your troops. We can arm the soldiers who kill your troops. We can provide intel to the soldiers who kill your troops. We can choose the targets, plan the ops and programme the long range missiles which kill your troops. We can help their spy services to set up boobytraps in your capital which kill your troops. But no siree, we aren't at war with you, not us. How stupid do you think Putin and his General Staff are?
All going to plan. Although I have no idea whose plan it was to depress Kiwi's favorite asset.
Thanks, Greg. Merry Christmas to you and yours.
The current market conditions for 2 BDRM townhouses in Christchurch. K.W highlighted this issue earlier.
Market price is currently -25% from Vendor's purchase price 2 years ago. Is this likely to be below a developer's current sales price for a newly completed comparable property?
“I’m appraising quite a few where people would have bought them two years ago for $800,000 and are now reselling for under $600,000.”
https://www.oneroof.co.nz/news/some-of-them-will-be-selling-at-a-loss-m…
You cannot loose with pooperty, and new builds had interest deductability back then vs everything now, but older has more development potential... its an easy game property investment.
but you can't lose until you sell it... no such thing as mark to market in Spruiker world.
So hold it until you die.
You won't ever loose. ... So let's not talk about opportunity cost ... No. We must never talk about that. /sarc
To be fair though, good investors would not have been buying these townhouses if they were after rental yields.
There is far better buying around.
Surprise surprise, one or no carparks - unpopular.
Meanwhile AT continues to completely munt neighbourhood traffic flow in my area.
Something is going to give.
Meanwhile AT continues to completely munt neighbourhood traffic flow in my area.
Meanwhile people driving in my neighbourhood completely munt traffic flow in my area.
Fixed that for you.
"Christchurch is strong"
https://youtu.be/G2Ob_458ctU?t=141
"I'm such an optimist"
https://youtu.be/G2Ob_458ctU?t=282
What happens if buyers choose to buy in the existing dwelling market (as they are cheaper than new build prices) rather than from developers / builders (and the impact on sales and cashflow to the developers and builders)?
Owner occupier buyers: CAVEAT EMPTOR
7% p.a house price growth expectation (i.e house price double every 10 years) and line of reasoning
Hard to feel sorry for developers, when its their greed that was responsible for building such horrible homes. If they had built a house designed for owner occupiers (full sized kitchen, storage, garage, backyard etc) they would not be in this position. But they built tiny dog kennels designed for people straight off a plane with nothing but a suitcase.
Meanwhile, they are still trying to convince gullible investors that the half dozen events to be held a year at the new Stadium will be enough to carry their AirBnB investment in a townhouse with no parking.
In one suburb alone, of 115 property listings for sale, 64 are new or near new townhouses. I have fresh popcorn.
Great timing following the recent article about increase sales volumes and all the DGMs talking about how many properties are being delisted.
by starrider | 17th Dec 24, 10:26am
The most dependable, consistent, stats through all of 2024 was record high new listings, record high listings and record high withdrawn listings
They are all waiting for top dollar because it is their property is their retirement plan and they expect the next generations to pay for their properties, pensions, pay rent to them and they also want free health care.
Well...this was the plan right? Everyone was whining about the ridiculous house prices so the then gov stopped all foreign investment ...house prices fall.(other factors involved of course)..more whining...always two sides of the coin, just depends what side you want to flip up.
The site was appraised at $1.2m prior to the Watercare constraints being introduced, but Findlay said she would now be lucky to get $900,000.
Not sure why Watercare is getting blamed for helping show the reality. Would people prefer Watercare hid this? The blame lays squarely with elected officials and voters over the last decades that have pursued NIMBY evidence-free land-use policies, and buried their head in the sand re:infrastructure spending in favour of kicking the can down the road and low rates.
I've been wondering about these "withdrawn" figures. I know for a fact some houses have sold unconditionally but then been "withdrawn" from realestate.co.nz & oneroof.co.nz.
I'm wondering if this is to delay the sale price getting out when they are sold considerably below RV in Auckland.
Skimming this comments thread, March can't some soon enough.
There are two other facts that are bedeviling the housing market which need to be considered.
From personal experience I have seen sales failing to materialise because some similar house in the vicinity is sold at a bargain basement price by vendors who don’t care what they get or who have owned their property for so long that a huge profit is inevitable.
This “down market” sale has a huge effect for many months as real agents will quote or note this fact and thus spoiling the hope of other vendors hoping to get something near market price …whatever that means at the moment.
My best advice, free of charge this time, is to recommend to frustrated vendors to take a good hard look at their properties, and renovate the kitchen, bathrooms or whatever to new standard specifications before going to market.
By doing this, their properties will have a much better chance of beating the competition and obtaining a better satisfactory price more quickly.
The cost can usually be covered if needs be, by a bank loan obtained by producing quotes and plans to show the bank before commencing any work.
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