By Amanda Morrall
Asking prices on residential property slid nationally last month to $423,832 from an earlier high of $429,865, with an accompanying lull in new listings challenging notions the country is headed back into bubble territory.
Realestate.co.nz's monthly housing report for April said despite heated market conditions in specific parts of the country, mainly Auckland where the asking price jumped from $559,369 in March to $568,820 in April, the market appears to be in a rebalancing mode.
Listing volumes coming onto the market in April were on par with the same time last year with 10 of the 19 regions seeing a fall. The decline in new listings was marked in Gisborne, Central Otago and Queenstown where volumes were down -63% and -48% respectively. Listings in Coromandel, Central North Island and Nelson were also down 20% from where they stood last April.
That contrasts with a 25% increase in the volumes of new listings recorded in Marlborough, Northland, Hawkes Bay, West Coast and Taranaki.
The overall picture from a regional view of listings supported the view, from realestate.co.nz, that the market was rebalancing.
Realestate.co.nz CEO Alister Helm said the more muted numbers for April also put splashed cold water on the contention that the New Zealand housing market was headed back into bubble territory.
He said while property sales were strong for the latest month's data, for March they did not show a seasonally adjusted increase.
"This indicates that the market would appear not to be diving headlong into a property bubble, but rather is seeing a steady turnover and pragmatic buying and selling in the main.''
Helm said a pull back in asking prices nationally reinforced that view, even in the face of Auckland's unabating price creep. For the third time in eight months, the city hit a new record high asking price of $568,820 in April.
Despite an anticipated slow down over the next three months, realestate.co.nz is forecasting an increase in asking prices as "demand flows through to vendor expectations.''
"Clearly there are pockets of the market where there is not quite this degree of balance."
The inventory of unsold homes, which saw a four year low in March, eased slightly in April.
Housing inventory
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55 Comments
I'll keep my eyes out for something suitable for you MK. I imagine this is the sort of thing you would be after. Solid as, mate. http://uncyclopedia.wikia.com/wiki/File:Brick-shithouse.jpg
SK who would rent them off you if everyone owned at least 3 houses? It suits some people just to rent while they are in Auckland for a work contract for example. Or over from Australia for work on contract. Some people just don't want to own a house and they probably have more money than you will ever have. You have to respect that view. They do not want to think about maintenance or insurance or rates.
What exactly was the unintelligent part I wonder?
Probably any part that you disagree with.
An intelligent person would be open to all points of view.
An intelligent person does not stoop to basic name calling such as the use of the word 'moron'.
An intelligent person would not wish financial ruin on a country so that they do not have to read a few sentences that they disagree with on a website.
Cheers!
SK
ctnz you are wrong. SK is one of the best bloggers about property on interest.co.nz
His/her observations about the property market are accurate and intelligent. I am informed by what SK says about property investing and the market in New Zealand.
Clearly SK has investments in the market. This helps with his/her credibility. Unlike most others on this site who just talk about investments...and don't put their money where their mouth is.
You should withdraw your comments ctnz. Just because someone invests in an industry you don't like doesn't mean they are morons. I note you are urging a "GFC proper" on New Zealand...it's a pity you would wish financial harm on so many tens of thousands of people who would be caught up in such a scenario, not just property owners. Clearly you have little sympathy for your fellow New Zealanders ctnz. Your comment about desiring a "GFC proper" in New Zealand leads one to imagine you are a cruel person.
And, most importantly, SK clearly likes upsetting the likes of you and taking the p---s. All power to him/her for that.
Regards.
Actually there are many teachers, nurses, police etc who have secure jobs but are priced out of the housing market. A "GFC proper" would help them and future first time buyers immensely. Should I sympathize with them or wish for the status quo to continue so property investors can continue to enjoy their privileged position?
I would argue that in the long run a "GFC proper" in NZ would be the lesser evil.
Hows this for a great deal, I will give someone who can find a property that I like in Auckland, that is good value in a good area a $1000 finders fee if I end up buying said property. I have 150K deposit on a 40K income after tax. I challenge you SK to come up with something good.
So with 40k income you can borrow/service like $160K so that's 320k? Would you consider flatmate? You wanted an apartment right? What do you mean by a good suburb?
http://www.trademe.co.nz/property/residential/for-sale/auction-44395289…
is a 80sqm, presumably freehold?, Parnell pad in solid building with 40sqm garage. Rents at $580 so if you had a flattie paying $260 that's another 13K income a year so at 8.5% 18yr table mortgage you could borrow $246 + $150 deposit = 396K (that's a 38% deposit). Asking price is $395k. Does seem cheap - maybe because of railway? maybe they got an earthquake strengthening letter from council?
You'd might be better of with a house in a cheaper suburb which you can do up a bit. Avondale appeal?
Unortunately, 40k is a fairly mediocre wage/salary - you're probably better to upgrade your skills & qualifications and get your salary up to at least 60k before buying a property - unless you have a wife earning another 40k or so.
This illustrates the real underlying situation that in NZ it's not that house prices are so expensive, rather that able-bodied educated people are settling for low value, low wage jobs instead of working harder, getting positioned in a good career that stretches them, working on their postgrad quals, striving for excellence - thus gaining a better wage/salary or business income for their families. Then purchasing/servicing a house will become a lot easier.
How about a 2 bed in arch hill? Should be in 300's. Not a very nice location, but 100m from Ponsonby Road isn't bad? http://www.trademe.co.nz/property/residential/for-sale/auction-467807818.htm
Character 60sqm in city for $360k (no park mentioned though)? http://www.trademe.co.nz/property/residential/for-sale/auction-465655173.htm
http://www.trademe.co.nz/property/residential/for-sale/auction-348910885.htm looks rough and the photos make no sense, but on Mt Eden Rd opposite summit road - may be easy to do up.
I agree, but he said he wanted a flat. Some people do.
As much land as one can afford as close to town as possible. Freehold, freestanding, not monolithic, possibly near the train (but not too near), away from massed HCNZ homes with potential to improve is the best way to go. However everybody else thinks so too.
Muppet King: in the 300s you can get a starter home on a full section in a reasonable area:
Here's one on the North Shore in a quiet Glenfield street, 822m2 3 bdrm traditional 70s lockwood for $395k:
http://www.realestate.co.nz/1748146
Or try your luck with a mortgagee sale in Birkdale (possibly late 200s to low 300s):
http://www.realestate.co.nz/1763409
Or perhaps a freestanding 3 bed t/h (non leaky) in Avondale for $325k:
http://www.realestate.co.nz/1719986
If you're not opposed to outer areas of West Auckland perhaps a freestanding house in Ranui for $249 (of course in Papakura or Manurewa you would barely need a mortgage to buy a similar freestanding house):
http://www.realestate.co.nz/1754229
Or a very tidy modern house on nearly a quarter acre for $327k in Glen Eden (it's only actually about twice the distance from Queen St as Mt Albert!:
http://www.realestate.co.nz/1769742
There is actually masses of choice under $400k in reasonable outer suburbs and certainly some good value out West and in the better parts of Manukau.
Realistically to buy even a rough do-up house on a cross lease in a nice or up and coming inner (out as far as Onehunga) suburb you need $450-550,000 and to look very hard! Unless you are prepared to buy a leaky home and bear it (!) in which case $600k might even pick up a leaky in Parnell or Remuera!
So anyway if you have $150k deposit and are prepared to live in an outer suburb, you could potentially get a reasonable house at $300k in a reasonable suburb and with a $150k mortgage over 20 years you'd pay just $240pw which is the probably $150pw less than you'd pay in rent so you could actually afford to pay it off in about 9 and a half years!
It's as cheap as chips. Just don't waste your time looking in Epsom, Grey Lynn or St Heliers (or even Mt Albert) because there are lots of people on dual incomes who are much wealthier than you. (Note the average young professional couple would earn mid $150k plus as a household income pre tax - so for them $800k is nothing).
MK when buying you need to look at everything available in the price range. If you buy without having looked through or past 50 properties and researched ALL recent sales including sales data from over the last few years, then you are just buying blind and guessing.
If you are careful and know what you are looking at you can make more money than you can imagine!
Two rules: 1. Always buy freehold and detached (good cross leases are ok) - never buy apartments or flats unless they have something special AND are super good value. 2. Never buy anything with fibre cement plaster board - EVER! (unless it's land value only).
I looked at house on the weekend in Auck, a 3 bedroom townhouse going for about $725K, realtor tried to tell me it was a steal as the identical one was also sale but for $200K higher. Here's the kicker; both were leaky. "Just a few spots to fix up.'' I couldn't get out the door fast enough.
The wife and I had a look at a few in Point Chev on the weekend - conservatively going for 20%+ above the CV...
Wanted to arrange an appointment on one in Mount Eden as well - however the realtor's colleague had already put in an offer on it - so was out of the picture...
Leaky.. look but don't touch!
Other than that good ones are going like hot cakes! Sold our bungalow in 2 days, realtor has a wait list of buyers.. they gave me exactly what I hope for.. didn't even make the advertisng sign or the newspaper ad.
Bytheway, it's not Wood street!
Yes when I decided to sell (in Ponsonby), I had 3 possible scenarios:
X amount as "bugger it let's rent it again",
Y as "Ok I can live with that" and
Z as "yippeeee"...
I got the yippeeeee price and in 2 days.. so had to pay adverising costs for nothing.. I made the NZ Herald owner a tad richer!
Clearly you didn't realise that if you put it to auction you'd probably have got another 10% Chairman Moa.
An ordinary tidy villa in Punga St sold for over $1.12m last week when the agent and owner only expect mid $900s. One in Murdoch Rd Grey Lynn fetched $1.27m under the hammer when the initial expectation was $900s (a similar one went for $935 before Christmas) the vendors apparently didn't believe it would get to the million and were pretty stunned.
BTW Wood St sold pre auction too, for over $1.31m but was a total do-up really.
If you'd told me the address I probably could have giving you a better cash offer Chairman Moa! Anyone looking to sell freestanding character properties in quiet streets in the leafy inner Auckland prime suburbs let me know!
Chris_J,
Auction is gamble IMO. 22 Beaconfield was passed in at 1.2 mark I believe. I've been to Wood St, wouldn't call it a total do up.. just need new kitchen and a few minor tweak but that's my opinion..
Our (ex) house, we were happy at the price we got.
"If you'd told me the address I probably could have giving you a better cash offer Chairman Moa!" someone here said they would give wood street 800K.. so yeah right!
very sad if thats the case Esprit - NZ needs a serious reduction in immigration --> lets face it, affordable property would be one of the major reasons to stay in NZ if it was affordable. Instead teh approach is to pack in the immigrants with foreign cash and feed the illusion the economy is healthy. Countries should be run like FAMILY businesses, they need to be viable yes, but profit comes with the proviso that the business ultimately exists to benefit the family and if the family is getting marginalised by non family appointments you need a re think.
I had lunch with some friends on Sunday who were over our way looking at a couple of open homes because their bank (National) - unprompted - had offered to lend them more money. They said the bank manager had told them she had done 46 mortgages recently (can't remember the exact time period) compared with just 1 in the equivalent period of last year.
sounds like a deal to me, probably the big chinese building firm, all nice but be careful of anyone promising rent - it can be a great way to pump up the value. I would check them out if you think the numbers work.
if you do want instant equity in a property in hamilton I have one going for 20k under CV ($395k down to $375k first day on the market - priced to sell) at136 Hukanui road, I just listed it with Leah Gordon at Lodge. The ads should be up in a few days, just the temporary sign out the front at this stage.
i am relocating back to auckland so am selling up that ex-rental ($465p/w) plus my own personal home in Huntington - which will be for sale at the level of CV around $539k also with same agent
For the record, my new houe in Auckland has been secured at for 30k aboved CV
All money seems to be flowing to the banks via Auckland - it sure aint cheap...and it's not getting any cheaper...
President of Property
SK I did use the word some and not the words " a lot". Are you saying that people are failures if they chose to rent even those who have a lot of capital and high incomes. There are people out there who love the flexibility of renting. If you want to move on you just give notice to your landlord and get on with it. What is the harm in that? Owning a house is actually quite expensive especially if you keep it maintained and up to date. It is even worse when you have another expense called "large rent payments to your landlord who is actually your bank."
the usually upbeat Tony A sounds very downbeat about NZ in his latest rant:
http://www.bnz.co.nz/static/www/docs/weekly-overview/w2012-04-26.pdf
whether such weaknesss translates into downwards pressure on house prices again remains to be seen. Thanks to ultra low OCR, and pathetic building rates (thanks mainly to planning policy) prices are being kept up
Its a new world - expect years of sluggishness and get ultra indebted at your peril!
Have a read of Hugh Hendry's outlook on China, I recommend reading the full report. These bank economists haven't a clue.
http://www.zerohedge.com/news/hugh-hendry-back-full-eclectica-letter
A customer of mine had to sell his sisters house in the St Lukes area, (this year)
Was a 15 year old house with "leaky house characteristics" To sell he got an engineers report which he gave to all the prospective buyers. I think he dropped the price to GV a bit as well but unsure as to how much.
There were no interested Kiwi buyers at all. All were from China or India.
The way everyone here goes on about how profitable it is to buy in Auckland it makes me wonder why you all weren't banging his door down to buy it
If the house is plasterboard built 1994 - 2005ish it is worth absolutely nothing more than land value.
The only people gullible enough to buy are foreigners.
Most owners don't realise this fact yet and still can't believe their homes are worthless but they will eventually realise!
There are numerous examples of homes being sold at near land value to immigrants or landlords happy to occupy or let the property for the time being. Most will eventually need demolished though. Few will be economic to repair (especially with the stigma a repair carries).
A customer of mine had to sell his sisters house in the St Lukes area, (this year)
Was a 15 year old house with "leaky house characteristics" To sell he got an engineers report which he gave to all the prospective buyers. I think he dropped the price to GV a bit as well but unsure as to how much.
There were no interested Kiwi buyers at all. All were from China or India.
The way everyone here goes on about how profitable it is to buy in Auckland it makes me wonder why you all weren't banging his door down to buy it
Ladies and Gents - I assume that you are all chained to Auckland because of your occupations? Time to consider changing gears for a better work/life balance.
I'm lucky enough to work from home - mainly for international clients - and moved out of Wellington about three years ago - as it became clear the my location did not have to be in the windy city anymore.
We are in the lower North Island now - and literally bought a "mansion" out here with 450m2 house and 8,500m2 of park like land for about half the price of the place in Roseneath. The closest town (5 minutes drive) has around 5,000 houses and 200-300K buys a 3-4 bedroom home and a 1/4 acre section.
Good lifestyle, great weather (no wind!), good food, and a much cheaper cost of living. eg Rates are just $1200 per year!!
While I can understand the frustration at high prices for centrally located housing in Auckland, and some desirable parts of Wellington and Chrischurch, it's clear that these suburbs are benefiting from a very tightly restricted market with significant population growth and not really reflective of life in the rest/majority of New Zealand.
Outside of these few places, houses are selling at (or below) replacement value in many towns, cities and surrounds now, and land prices are relatveily cheap when compared to OECD countries and the situation could hardly be described as a bubble.
Time to take stock of what is important and take a look further afield ? We are very glad that we did. ;-)
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