Content supplied by realestate.co.nz
Real-time statistics from realestate.co.nz show that nationally, in December, the average asking price hit an all-time high while new listings dropped to the lowest level on record.
The latest figures show new listings are down 6.2 per cent in December compared with December 2016 – just 7,133 compared with 7,606 – and are at an all-time low. The average asking price hit $660,798 up 3.8 per cent from November 2017.
Total housing stock continues to build, up 9.3 per cent when compared with December 2016.
Auckland leads the charge
Auckland has painted an interesting picture over the summer break moving from a sellers’ market to a buyers’ market – the first time since February 2011.
Theoretically, if no new listings came onto the market in Auckland and all existing stock was sold, there would be no houses for sale in 24 weeks which has over taken the long-term average – making it a buyers’ market.
New listings are low (down 7.8 per cent to 1,908), however total stock (up 26.1 per cent to 8,497) and average asking prices (up 2.7 per cent) are heading in the other direction.
“This is the first time we have seen Auckland shift to a buyers’ market since February 2011. The average asking price is still increasing despite high levels of stock. Auckland saw new property valuations last year which may be leading vendors to expect more than the market wants to pay,” says Vanessa Taylor, spokesperson for realestate.co.nz.
While the average Auckland Council house valuation is now more than one million dollars, vendors and buyers need to remember this is an average, not necessarily a starting point,
“December is always a low month on the housing charts, so it will be interesting to see if these trends continue throughout 2018”, comments Vanessa Taylor.
Central Otago / Lakes knocks Auckland off top asking price hot spot
Nationally, the asking price moved up 3.8 per cent compared to the previous month, to $660,798. Central Otago/Lakes region matched the national movement to edge ahead of Auckland with an average asking price of $984,719. The last time we saw this region knock Auckland off the top spot was January 2016.
Areas which experienced the biggest asking price increases included Nelson & Bays (up 11.3 per cent to $618,712), Marlborough (up 10.0 per cent up to $479,288), West Coast (up 8.7 per cent to $265,396), Southland (up 6.3 per cent to $309,174) and Wairarapa (up 5.4 per cent to $429,488).
The biggest decreases in asking price were in the Central North Island (down 7.4 per cent to $403,648) and Gisborne (down 4.7 per cent to $287,928).
New listings slump
Overall new listings were down across the country with 13 of the 19 regions experiencing a drop.
Auckland contributed significantly, with only 1,908 new houses listed last month, down 7.8 per cent on the previous December’s 2,070. But the biggest fall was in the Wairarapa, down by 32.9 per cent to 98 year on year.
“Central Otago / Lakes region also showed a significant drop, with new house listings down 26.6 per cent to 212 properties. This would appear to have had some effect on the region’s climbing asking prices,” said Vanessa Taylor.
Another region with a significant new listings fall was Hawke’s Bay, down 21.7 per cent with only 220 new properties.
Total housing stock continues to build in the major centres
Auckland’s housing stock continued to rise in December, increasing by 26.1 per cent on December 2016 to 8,497. Other big increases were recorded by Wellington (up 21 per cent to 971) and Canterbury (up 18.6 per cent to 3,642).
“With Auckland leading the charge into a buyers’ market due to increasing stock levels, it will be interesting to watch if Wellington and Canterbury follow suit” says Vanessa.
Nationally, housing stock in December was lower than November but still up by 9.3 per cent on the December of 2016.
Housing inventory
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161 Comments
The streets of Kohi are largely deserted this time of year, except for random Russians, French and non Kohi resident Kiwis (they walk in family groups looking intently at houses as they go past) so it’s hardly prime time for selling real estate. It will be interesting to see what happens when the activity returns in the latter part of January. I suspect not much. Death and Divorce will lead to some turnover, but It doesn’t look like the start of a 60% drop, yet.
Aucklanders still keep migrating to the regions e.g. Hawke’s Bay, gaining a better property and banking several hundred thousand as well.
https://www.stuff.co.nz/life-style/homed/living/94598814/auckland-marke…
So some rebalancing between the Supercity and other NZ cities continues.
Towns are great Penguin, you should try it. Lots more cash in the pocket than those on the wage treadmill. Lots of entrepreneurs, lots of small innovative business ( esp farms and food) and interesting folk from all over the world.
But if you are better suited to Manuwera stick with it.
I moved to Hawkes Bay a year ago because I could not justify paying Auckland prices for a house. I could afford Auckland but rationalising that amount of money is something I just could not get my head around. Napier is very nice but honestly, a few things aside (great weather, no traffic jams and friendly people who remind me of Auckland a few decades ago), there's a lot I miss about Auckland. If I could have bought the sort of house I got in Napier for that price in Auckland, no way would I have come here. No point here other than to say while the regions have their pros such as much lower property prices, there are plenty of cons too.
I'm a city boy and I need intensity of activity, culture, civic activity and cuisine. I find regional NZ dead unspiring in these areas. Outside Auckland I could only see myself potentially living in my hometown of Wellington.
If you thrive on the outdoors then some regional centres probably have a lot to offer.
Each to one's own I say
City has nothing for me anymore, it was great when I was boozing and single, but now Im into my outdoor sports. Mountain Biking, Surfing, Kitesurfing, Fishing and all other sports my kids are into. Plus I love the community spirit, golf is 2 minutes walk and beach is 1 minute. Few beers on a friday after golf and a nice walk home, pick up the fish and chips, and look at the view of the beach.
Yeah I just spent 2 weeks back in Auckland and the first week was awesome, the second week I was breaking to get out of there! It was a good reminder of the reasons why I left in the first place. I can't compare apples to oranges. Auckland is awesome if you have money to spend and the regions can offer you the money to visit and live it up while you visit. Living in Auckland full-tme, even on a big double income with mortgage payments of thousands per month is such a drag. That city is reserved for our tourists now and not middle income New Zealanders. Keep it. My life now is completely different and I can contribute to our NZ economy. Cheap flights and only one hour away at short notice makes living back in the regions seem like good financial sense.
Not really, Auckland is the one place in NZ I would not live in. I'll take that double income AND make mortgage payments in any other small or medium centre over Auckland. Who wants to die at 70 from the smog and instead of 90, and realise you've spent the equivalent of 10 years in traffic? You can't take your house with you DGZ, whether it's in Auckland or Invercargill
Don’t let the data get in the way of the story http://aqicn.org/map/new-zealand/#@g/-37.1044/174.8804/8z
Unless you buy big ticket items like Bentleys and Yachts, which is just stuff, what do you need more money for. Maybe cool holidays. As long as Im with my friends, have freedom and my kids are happy, I have everything. Money is just to pay the bills.Understanding this has made me more content and it made me stop chasing the cash to the detriment of a cool life. Thats the beauty about the outdoors, sports and a great community.
Ive did some soul searching a little while ago, and my best times were not when I had money, my best times are with good friends and my kids. Which is relatively free.
A little bit old that article but the bubble in Auckland has a pipe through to bubbles in the regions. If the gas in Auckland is escaping it could go down the pipe and inflate a regional bubble. I'm pretty sure Boomers are planning to sell out Auckland and escape to the regions if they are forced to raise funds for their retirement. It's like their backup plan. Don't want to do it although would do if yearly overseas holidays are in jeopardy.
My wife spoke to the gardener at Sage Rd, Kohimarama. The property sold in December for $2,850,000, the 2017 CV. Apparently the new owners are retirees who moved to Karaka from St Heliers and want to come back to the City for more activities. I wonder how many of those selling up for cash release subsequently regret it?
you bettya. Oldies need to move closer to bigger centres, not away. I have some 80+ year olds trying to get from Napier to Hastings each day ...because thats where the hospital is. Never mind specialist services...off to Wellington!
Some very worn out oldies hiking into Waikato Hosp from the Coromandel here. Once the novelty of fishing and drinking wear off....the shine goes.
The hospital in Hastings seems to fit the needs of most.
A lot of older people buy in Frimley or settle in one of the nearby retirement villages.
There are parts of Hawkes bay that have quite good rental returns, such as, renovated four bed villa in Waipukurau for $260k returning $300/week - not too shabby.
Won't suit everyone.
There is actually data on regional population growth - and Hawkes Bay doesn't feature with numbers that are very special. You can find the data here.
The highest growth region is Auckland +2.6%, followed by Northland, Waikato both at +2.4% and Otago at +2.3% pa. Hawkes Bay comes in at #10 of 16. Data is for year to June 2017. For three years to June 2016, Hawkes Bay is #11. (The big movers between the two periods are Northland, Marlbourough, and Gisborne.)
But the plain fact is Auckland is #1, and is attracting 42.5% of the country's population growth, even though it only has 34.6% of its total population.
There may be a rebalancing, but it is not away from "the Supercity".
I wonder whether the data on various areas population growth masks the fact that many young people leave their regional cities eg hamilton, Gisborne, Napier etc to Auckland, Wellington, Sydney etc, but a growing number of older NZers are leaving Auckland for regional cities whick backfills the youth loss?
Real estate companies seem to be reporting that trend, and anecdotal evidence seems to reflect a recent significant trend of Aucklanders moving to smaller cities.
I agree with MortgageBelt.
Whilst information is only anecdotal there are plenty of indications - not only from real estate agents - that there is a shift to the Hawkes Bay.
I live in the Hawkes Bay and I know first hand that more positions are being filled in schools and the hospital by people moving from Auckland and Wellington than historically has been the case.
Unfortunately Hawkes Bay doe not have a "university" to hold school leavers within the region, and as a consequence it has suffered a net population loss in the past. It would appear that this could have been turned around.
A retired neighbour of my mother-in-law has just bought a brand new house in Napier, sold in Auckland, now has huge nest egg in the difference/change. Is now spending well into the local economy, restaurants, vineyards, etc and can easily afford regular flights to/from Auckland to see grandkids. So a net boost to the regional economy, and a significant personal wealth boost.
I think there is sufficient anecdotal evidence to support the notion that there is some sort of exodus out of Auckland. Much of Auckland's population will be being pumped by immigration, much of that low skilled / low wealth.
I think these factors will have some impact on limitting future house price gains in Auckland
David Chaston,
There is some interesting data that is found in your link. One item that I found quite surprising is that Auckland has the highest percentage of "natural increase" (births - deaths per unit of population of any regional council area, by a relatively high margin over the second place region of Gisborne). Put another way, in the last year, about a third of the population growth in Auckland is due to the local causes, not immigration. The ratio of natural increase to immigration increase is actually highest in Auckland as well (excepting the two lowest immigration locations of Gisborne and Southland), suggesting that at least some of the issues facing Auckland regarding housing and infrastructure issues have local causes as a significant factor.
But, it is so easy to point the finger anywhere other than back to oneself so immigration gets vilified. Some of the immigration concern is indeed valid, as the growth rate is definitely unsustainable. The internal growth rate is also concerning...
The fact remains NZ imported 3X as many new migrants on a per capita of population basis than the UK where my countrymen & women vociferously complained.
My other hometown Auckland in many suburbs is akin to NYC minus the Spanish language & finer culture
Wellington has the best kiwi museum but it’s not the metropolitan museum but quaint like Wellington
Yes that’s the word for Wellington “Quaint” & Auckland a mishmash
Napier has splash planet or it did along with beautiful emerald ocean so the provinces do offer something in Kiwiland
Now I’m rambling like BW
Even less buyers to match even less listings. Without meaning to come across as doomsday, I see it as a market totally ripe for downside shock/s. Absent of a shock then in long term directionless drift. I think the chances of a financial shock from overseas is now incredibly high due to lofty valuations everywhere and increasing tolerance of cryptocurrencies.
Note, not since 2011 has Auckland been a buyers market. This is a red flag if ever there was one. If the market is to revert to sellers market then the favourable conditions that drove the market to this pont need to return or prices need to adjust - and considerably. The much discussed housing shortage means nothing if the buyers are not confident to buy. Houses are in short supply on the way up - thats why prices rise!
Be interesting to see if late Jan/Feb brings a flood of fresh listings and confident buyers to match. I agree that if people don't have to sell they are more likely to hold on and wait. I can also see patience starting to run thinner for many, the longer this drags on. A lot of johnny speculators are not accustomed to weaker conditions and had visions of quick flicks and easy profits.
Do not be affaid of being labelled a doomsayer. History is replete with warnings that were ignored by far too many to their own severe detriment. In my lifetime we have extreme examples such as the holocaust and others. I note that the architects of the property ponzi like to use such terms.
Ex Expat, interesting you should say that because my late Aunt and Uncle who lived through the depression still made their own soap, grew their own veggies and made their own bread to their last days! We had great chats about times in the 1930s. My Aunt was one of the fortunate ones who as a school teacher was employed right through. She recalled the 10% pay cut she willingly accepted to stay employed! They never took on debt and their only house in Central Auckland was built with saved money. They lived happy and fulfilled lives and travelled the world :)
I agree entirely that it's best to prepare and not to dwell. My aim is, should something like that hit again is my household can continue running normally without interruptions.
There is much to be understood about the effects of extreme trauma in people's lives on their descendents. There are many, many people in the world suffering from the residual effects of what happened to fairly recent ancestors. I believe it is extremely noticeable in many groups of people around the world. It happens to individuals as well, but of course, it is not as noticeable to others, as it is when it appears in groups.
Retired-Poppy
The market is unlikely to "crash" unless another factor is brought to bear. Whilst specuvestors and heavily/ negatively leveraged investors can afford their mortgages, I think most will hold out. The belief in property investment is so strong, that they will clutch onto the hope that eventually, the property boom will return.
It won't occur to them, that they could be investing their capital elsewhere in a downturn or plateau and actually making a return on their investment during the period of time that the housing market is cooling/cooled. The lack of liquidity in the property markets is what puts me off. If you can time the market so that you have cash in a downturn, then sure, you could get yourself a solid investment, but timing markets is notoriously difficult and I suspect many an amateur investor in recent years will find they got their timings very wrong and have limited their long turn wealth capacity by joining the property cult late in the game.
Of course, there is always a chance that something will come along to change the scenery, and sour the economy and then those that held on to their property might feel even more bitter at their losses. The NZ housing market is precariously placed to weather an actual storm with household debt to income where it is, and such high proportions of investor and interest only mortgages.
Ok. Many Sellers will be very reluctant to sell a property for $1 million when they could have sold it for $1.15 million a year ago. But equally I am sure there be some who would accept $1 million where they may have got $1.07 million a year ago.
After all many sellers buy in the same market.
And if they bought the property for 500k 20 years ago, selling if for $ 1 million is still a big gain.
At some point people will adjust to a weaker market and market expectation will recalibrate
Subjectively, I feel the same as you as to what would define a buyers' markets. Don't really care what the media and Ashley Church's say. They tend to have less credibility than anyone as they communicate with conviction and they tacitly suggest that their rationale is biblical.
Our First Summer ... in our first home: A new home for Christmas for young Auckland family
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11952090
Midgetkiwi,
1) those that believe that property prices will continue to go up in the long term
2) those that buy for non financial reasons - security of owning
3) those that are unknowledgeable about asset valuation in markets
An accountant friend returned to NZ after living overseas for a number of years in 2016 and rented for a period of time. I warned him about potential price risks, yet he went ahead and bought in September 2017 as he wanted the security of owning his own home, and does not consider his home an investment. He is an accountant yet he does not know about different property market valuations. He is not a property market watcher, so he knows little about property market cycles.
Just the other day, another friend who is tertiary educated in the medical field, commented that property prices always rise. This is the belief that many common New Zealanders have, as they have only ever experienced property prices rise.
The normal stages in life - go to school, get a job, get married, buy a house, have children. Many are on this automatic treadmill of life. For most New Zealanders, home ownership represents peace of mind. Since most house valuations are done on a comparable transaction basis, that is the basis used to determine whether one is overpaying or not. They are unknowledgeable about the use of economic valuation metrics to assess extreme property market valuations, which happen very infrequently.
Auckland house prices will keep rising over the medium-term regardless as immigrants & international students, & younger NZ career seekers will increasingly see Auckland = NZ.
Older NZers and young business owners will keep moving out of Auckland to Tauranga, Hamilton, Napier etc
Umm are you forgetting that Labour are bring in the Foreign Buyers ban MortgageBelt. That excludes at least two of the buying groups that you've listed there; new immigrants & international students.
Bloomberg article: New Zealand Bans Foreign Home Buyers After Price Surge
https://www.bloomberg.com/news/articles/2017-10-31/new-zealand-to-slap-…
The ‘Ban’ will only have a relatively small effect. There are many methods of avoiding the foreign buying ban which Labour will not be able to police or stop.
International students will keep coming to NZ, especially as all Level 7 and above programmes are not affected. Sure, some PTE excesses will lower numbers at the lower-lever courses and some PTEs get closed down .
So really it’s business as usual - just a bit of dampening down.
The ‘Ban’ will only have a relatively small effect. There are many methods of avoiding the foreign buying ban which Labour will not be able to police or stop.
Would be good if you could actually support what you say, but you can't, therefore it's better not to say anything at all. The reality is that you don't know what effect it has has. Nor do you know the effect to which it has affected other people's (NZ buyers) decisions. That's why you have no idea about its effect.
JC..i believe Singapore is exempt from the ban due to our free trade agreement....wealthy determined money will come in through that exemption imo....Andy Xei from SCMP some years ago whilst employed by Forbes lost his job for describing the Lee families management of the singaporean economy...he described Singapore as the laundering hub for profits from drug,sex,human trafficking and illegal logging etc...ive lived and worked there...anything is available for a price...
I support Labour’s foreign buying ban, & their push to control the quality of International student education in NZ.
I do know the strong demand to come and live in NZ via a range of channels, and I work closely with many of the associated industries. The demand to move to NZ, or to setup family homes for students, and the wealthy exit strategies are not going to be fully deterred by an official buying ban.
Can you supply any data showing a medium downturn in international students numbers, immigrants, and investors into NZ?
The previous 3% data was obviously inaccurate in including all the various means of purchase, so it will be difficult to judge the downturn as there is no accurate benchmark to start from.
The policies are already in place for 2018: limits on visas issued for subdegree programmes, removal of an automatic work visa after graduation, no part time work allowed while studying on subdegree.
http://www.labour.org.nz/immigration
Estimated 9-12000 reduction.
But unis , polys, schools, not really affected much unless they got dependant on lower level Diplomas.
It looks to me pretty easy to work on a student visa, unless these settings have changed?
https://www.immigration.govt.nz/new-zealand-visas/options/study/working…
Hardly “business as usual” you miss the point entirely
Sentiment has changed & this has been a Chinese speculation binge unheard of in Auckland ever before The aftermath merely awaits a catalyst to arrive that will result in value decline albeit inconsistently across Aucklands housing market.
I think the best suburbs will remain pretty safe in my opinion from any serious value erosion.
The Criminal Underworld Is Dropping Bitcoin for Another Currency
Bloomberg By Olga Kharif 2 January 2018
Privacy coins such as monero, designed to avoid tracking, have climbed faster over the past two months as law enforcers adopt software tools to monitor people using bitcoin. A slew of analytic firms such as Chainalysis are getting better at flagging digital hoards linked to crime or money laundering, alerting exchanges and preventing conversion into traditional cash.
NB: overseas law enforcers are able to track bitcoin blockchains while New Zealand Law enforcers cant even track conventional property transactions and who's doing the buying and their tax-paying bona-fides
second article down
https://www.bloomberg.com/news/articles/2018-01-02/criminal-underworld-…
I agree that people who don't need to, will not sell. What about all those new builds that are in various stages of completion? I know not a perfect search, but gives you an indication of what's available in just 1 area, Rodney:
https://www.trademe.co.nz/browse/categoryattributesearchresults.aspx?ci…
Yes I was surprised by that, maybe The National Party has been maligned and houses are actually really being built at a rate of knots.
I know, I know, they are not affordable houses that are being built, but I've never been convinced that matters; it's the total that matters as everyone can just shift along. It's the price of the secondhand, cold leaky chicken shacks that is the scandal, no one minds paying up for the good stuff if they can afford it.
Where is the link to the full article though? This is interest.co, not stuff, after all. Got to maintain the standards, it's a slippery slope.
Yes, yes, I know, my problem is why run the country as a financial speculation when we have a productive business base? Effectively we are gearing up as a country and living off capital, destroying our productive businesses in the process. You would not do that in your business, now would you?
The country is run on negative cash flow, by gearing up and spending the borrowed money, not by investing in new productive capacity to ensure greater future cash flows.
Yes, it is very scary. I think NZ would have to let the NZD devalue to take the strain. That is what happened last time to some extent. The RBNZ did a fine job in the crisis, although they were way too slow beforehand, just like this time. Interestingly the RBNZ have not put up interest rates here as yet and the NZ government debt trades at only slightly more than US govt debt. The RBNZ do seem to have finally woken up about the silly mortgage debt growth, after having a pleasant snooze and letting it hit 9.3% mind you. This time they seem to be putting the screws on investors, probably excessively, but house prices in Auckland may be coming down.
Ak council rates increases are having many uninvestigated effects.
Now we hear that the "targeted" wastewater rates will not be a flat sum. Again we hear that higher value properties will be charged more.
The most scandalous thing about the following article is that Goff and the Ak Council spin division are saying that this wastewater targeted rate will be Ok because the transport targeted rate is being removed.But wait a moment, I saw him use the same argument when justifying the new petrol tax. Just how many extra taxes can you sneak through on the false argument that they were always included in the transport targeted rate???
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11968527
Nevermind about the averages. Remuera will always be in the Top 3. Here's an update for you wannabe's: 5 out of 9 the priciest homes sold in 2017 are from my neck of the woods:
1. 17 Burwood Cres, Remuera sold for $18.5m.
2. 100 Lucerne Rd, Remuera sold for $14.6m.
3. 30 Orakei Rd, Remuera sold for $12.1m.
4. 244 Remuera Rd, Remuera sold for $8.8m.
5. 402/424 Remuera Rd, Remuera sold for $8.7m.
http://www.nzherald.co.nz/property/news/article.cfm?c_id=8&objectid=119…
Note - I suggest you target those lesser ranked suburbs like Pt Chev, Freemans Bay, Grey Lynn etc rather than Remmers LOL!!
Ha, 40+ years in Auckland and Remuera was and always will be a completely irrelevant location. Populated by arrogant self important prats based entirely on the price of houses. Move away from Auckland and it becomes an even less relevant location.
Looks like the 5 next greater fools were found in 2017.
Happy New Year DGZ. Hope you have a wonderful year spouting more of your Remuera property drivel. Maybe, although I highly doubt it, this could be your and many others year of awakening to see further than overpriced houses.
DGZ says a dream home is not overpriced as long as people are willing to put in an offer.
Does this mean that when there are no offers on DGZ houses, they are overpriced or worthless? (pick one)
The wise would do well to take a ringside seat and witness fools shouldering the price of hype and its inevitable fallout. This is not about just sitting on the fence and doing nothing! Some here will argue that it's never the wrong time to buy your dream home. I think this advice is now outdated given the speculative element behind house buying, household debt levels and record low rental yields. I think given that for many its life's biggest purchase, timing is more important than it's ever been.
Once again we live in an age where there exists many suspiciously short roads to riches. Something that seems rare these days is patience. I think the cracks are now starting to show and will be a source of anxiety for some time to come. Where houses are concerned, the quick paper gains that have created much hype have largely disappeared.
Fundamentals do matter. You can be foolish with money when buying your dream home. NEVER let your emotions take over the process. A sense of self entitlement is a flawed starting point.
https://www.investopedia.com/articles/mortgage-real-estate/09/buy-house…
If it goes wrong, it ruins lives. Leafy suburbs are no exception.
Remuera and Epsom are now categorised as Asian Ethnoscapes
"A distinctive type of residential concentration for Asian migrants has been existing residential areas, notably the relatively expensive housing in eastern suburbs such as Epsom and Remuera"
http://www.asianz.org.nz/reports/report/asian-auckland-the-multiple-mea…
Nevertheless quite an interesting read that two other guys linked to. Strange in some ways that all Asians can be un-controversially lumped together as part of Asian 'ethnoscapes'. I was criticized for proposing this for Europeans apparently because Europeans are individualists or something.
This reminds me of the aborted attempt by some Auckland Uni students last year who were threatened with violence and told by Susan Devoy that she was "going to keep an eye on them" for daring to suggest that maybe a European Student club would be cool. I was even listening to the student radio station, BFM, late last year who were recounting the highlights of 2017 and those students were described as "dickheads".
What's good for the goose is good for the gander I would have thought.
I think people mistakenly believe, even insist, that migrants should go hard out to integrate. The truth is many migrants are expats, once a term reserved only for Brits living abroad, but now a legitimate description of any reasonably well off migrants. Most Chinese and Indians and others, well might as well write 'Asians' are expats and will never be really integrated. Their children may be a different matter however. I don't think it can be forced and the establishment of significant ethnic infrastructure in Auckland makes it even more unlikely.
P.S - just think back to the intensely pro China comments in these threads we have experienced lately. Obviously coming from expats and not refugees.
An observation - implicit in the article is the unstated conclusion that the Asian Diaspora have achieved majority status which poses the question is - who are the minority now?. When one is a member of a very small minority the best response is to assimilate as fast as possible and blend into the community and accept the local cultures and observe the local mores and laws of the majority.
As the minority becomes larger, and then transitions into the majority, the imperative to assimilate and adopt the kiwi culture diminishes or disappears.
So the question for DGZ is :- You have defended the majority case - now who are the minority?. Do they feel the odd-man out in their own surrounds?
two otherguys, the question I have is do the different Asian ethnoscapes have any real connection to each other? Would they behave as a bloc? The article starts off talking about ethnoscapes in the plural but then later often clumps them all together:
Most have high proportions of Asian populations.
A second distinctive type of residential concentration for Asian migrants has been...
Surveys of Asian migrants have shown that...
Another type of Asian migrant residential concentration are..
Finally, the CBD is a unique type of residential area with a large Asian population.
This may be giving you the impression of becoming a minority. But is that really the case? Do Indians, Chinese, Japanese, Filipinos and Koreans constitute a majority in the sense of a unified bloc?
That said I do feel part of a minority being a male Boomer (Boomers are largely WASPs). Mature White males have always been a minority group with a large amount of power and influence. Being a member of this group is really great, I love it, however with the emancipation of women we opened the door to becoming a minority in the power stakes. Arrayed against us now, it seems, are an alliance of women and practically everyone else, even the up and coming generations, ethnic groups and alternative lifestyle groups. There is a fair amount of potential hostility and resentment bubbling beneath the surface. Just ponder upon PocketAces comments or anti-Boomer rants. In a democratic society we will have to keep our wits about us. Do you get that impression?
The holders of power have always been a minority. Perhaps for a short time after the WW2, there was a general sense among common White males that they held the power however this period was very fleeting when you think about it.
Jan is usually a very low volume time. Most agents and lawyers are on holiday.
That said price levels in recent time were set by international money and copied by domestic specuvestors leveraging up. With them more or less out of the market, who is left to pay those prices? Suspect the popular talk at bbq's now is the real possibility of capital losses. Add to that immigration being put on the skids by Winston as his key election promise, can't see prices dropping by half, but financial gravity will be enforced by the banks over time.
Agree that businesses are relocating. at the very least they are relocating new hire and replacements elsewhere because prices are just to high, and younger hopefully cheaper people are just wanting to much money to work in Akl. Clear pressure seen and signalled in teachers, nurses and police for some time.
This is a very predictable and common picture for a housing market in transition from a hot market to something else.
There is a psychological sentiment battle occurring and that will take time to play out. Sellers who don't need to sell and who have not received conducive offers this spring/summer or indeed any offers at all, will withdraw from the market in hope of better prices down the line. Whereas sellers who absolutely have to sell, will remain on the market, and either refuse low ball offers for the time being, or accept them, which will eventually start showing up in the stats. But it won't be lovely desirable houses showing the decline in prices first, we could be many months away from that (if at all). In the recent hot market, even trashed properties were selling well, now they aren't, and this will be where we see the price declines.
Whether or not that will transpire to actual declines across the whole market is pure speculation. It may never happen. But it's foolish at this point to insist that it *couldn't* happen. House prices are declining in Sydney and market sentiment is nothing if not contagious eventually.
It's unsurprisingly that November saw a pick up in sales as there was pent up post-election demand. Property markets all over the world slow during an election (especially when the outcome is uncertain), so that isn't especially newsworthy despite various news headlines (i'm particularly thinking REINZ who tried to suggest that the big jump in sales from Oct this year to Nov was symptomatic of the market recovering despite YoY sales having fallen Nov 16 vs Nov 17)
It's a very interesting market at the moment, and both the bears and the bulls are fascinated to see where this current transition will go. Could be a temporary stall, followed by a long plateau, could be a long slow gentle decline, could be a blood bath. However, what I think is extremely unlikely, is that the market will heat up again, any time soon. It will do again, obviously at some point, but it won't be in the near future. Home owners in Wellington waited nearly a decade to see much of any house price increases, so I don't see the recent surge in prices here as particularly frothy. However, if Auckland does have a major reset, it will eventually and undoubtedly effect the sentiment nationwide.
A swarm of investors, financed with interest-only loans and betting on prices continuing to rise is however exactly the kind of investment distortion that must be ended by interest rates being returned back towards normality....There are also deeper global trends at work. From the 19th to the mid-20th century, easy city sprawl and then car ownership saw real housing prices fall across most developed countries. But a reversal has accelerated since the 1990s, as a more innovation-driven economy has clustered around attractive places from California to London (and Australia's cities too) ramping up land prices.....Those things might strengthen the case for more efficient land taxes
http://www.afr.com/opinion/editorials/managing-the-great-housing-unwind…
Agree that the interest only leverage up its all good is a plague on normal owner occupiers. Personally I think the best thing the RB could do is ban interest only loan for the banks, and bring in DTI for residential investment properties. Loss fencing and extending flipper windo has been a good start but doesn't go far enough.
An interesting comment, it being New Year and all we thought back 50 years and decided a working couple could save a deposit and build a new house without capitalising the family benefit.
But that was a provincial city in the deep south.
Probably was never possible in Ackers.
Of course modern couples have so many other interests and rightly so, jetskies, global travel, cars, booze...restaurants..
55 years ago my parents bought a new build house by capitalising the family benefit. Brick and tile down south that recently sold for $270,000. 3 bedrooms, one bathroom. No garage. About 1,200 sq feet. Very basic.
Btw I recall being told in the tech period at school in the early ‘70s that wood had become too expensive to make the usual project. I wonder how much of the State House solidity is due to good materials being cheap at the time and therefore how realistic the affordable home policy is. My builder friend laughs at it.
Apparently the landlords are selling up, should be another factor supporting prices in 2018.
Just joking.
https://www.radionz.co.nz/news/national/347471/landlords-bail-on-rental…
Yeah right. "New Zealand’s parliamentarians have interests in 350 real properties, according to Parliament’s latest Register of Pecuniary Interests. This represents a shade under three properties per MP."
https://www.interest.co.nz/property/87597/new-zealands-mps-have-interes…
Why? As stated before, I own one property, my home, but I rented for many years and had no beef with my landlords. They provided a home, I paid my rent, then I moved on when it was no longer convenient. It was a financial arrangement and I saw it as reasonable. In all likelihood my landlords were National voters but so what?
The assertion that National politicians created the property boom to enrich themselves is laughable. Did the Left do that when Labour was in power? Did National manage to influence Australia and Canada to boom as well?
"The assertion that National politicians created the property boom to enrich themselves is laughable." Yes, the property boom did start under Labour but the following nine years of do-nothing National allowed the ponzi to become an acute danger to our entire economy. With so many snouts in the trough there was little insentive to act as shown so very clearly by National.
...as shown so very clearly by National and Labour. They are as bad as each other. The partisan pap doesn't stand up to scrutiny.
"Data from CoreLogic shows house prices grew 49 per cent from 1990 to 1999, under National-led governments.
Then, from 1999 to 2008, prices rose 113 per cent under the last Labour-led government.
Through the most recent government's term, there was 69 per cent growth in house prices nationwide."
https://www.stuff.co.nz/business/property/98475352/labour-governments-h…
My own take on the 99-08 jump is that it was largely Gubmint-induced, by the ludicrously mis-titled Welcome Home loan scheme, intended solely for battler FHB's.
This provided a universal, instant pricing signal for all house prices everywhere: the reasoning being - why sell any house, in any condition, anywhere, for less than the current WH loan amount?
If one added up the instant CG increment thus induced over entire regions, by the number of WH loans actually advanced, it would Shock and Astound. Call this the Good Intentions Paving Company Mark I.
And now, of course, we have ourselves the Good Intentions Paving Company Mark II.....
Indeed, and whilst we have to be careful with anecdotes they can be illustrative; my colleague (a guy in his mid 20's who has put everything into his rental property whilst still living at home) has now decided to sell up while he still can, assuming he can find a buyer. He was hoping to hold on for a long time but now the capital gains have dried up, the oven going khaput, having to install insulation and his tenants telling him they're moving out he's had to pump a lot of cash he can't afford into it this year alone. He says he'd be happy to break even at this stage.
Unexpected cashflow outlays can put financial strains on property investors and make them undertake financial reassessments, especially when capital gains seem to have stagnated and the property investor having bought in Auckland in the past few years where capital gains have been small.
With the new Healthy Homes bill, many part time property investors / landlords (i.e non professional property investors) will potentially have further outlays to meet minimum requirements. Some may not have the financial resources or financial flexibility to meet these requirements and may choose to sell.
I read that many property investors are non professional property investors (i.e have employment or business as their main source of income and the property investment is a secondary economic activity) - seventy-five per cent of rental properties are in the ownership of people who have two or fewer.
Other potential cashflow strains for non professional property investors:
1) interest only mortgages turning into P&I mortgages at the end of the interest only period. Many are attempting to refinance with non bank lenders, or other smaller banks who have small market shares
2) loss of employment which may mean inability to meet mortgage payments for those on negatively geared properties
3) higher interest rates on mortgages
Even experienced investors can get caught out. I read that a knowledgeable investor with a portfolio of properties bought a property in Central Auckland at a cheap price and high yield. After owning the property for a few months, the property owner was informed that unit owners had to pay for remedial work due to the property being leaky, potentially costing many tens of thousands of dollars - an unexpected significant cash outlay.
Each non professional property investor has their own set of financial circumstances, and depending on their level of financial flexibility, each will have a different financial capacity to absorb unexpected changes in those financial circumstances. Those property investors who lack financial flexibility and are unprepared for an adverse change in cashflow scenarios (i.e heavily indebted relative to their income levels) could get caught out and face unexpected financial pressure.
Intrigue
Total housing stock continues to build, up 9.3% compared to December 2016
Article (Press Release?) is dated 3 January 2018, 1 working day into the New Year and realestate.co.nz magically produces these figures. Where do they get them from. How do they get them. Do they have an exclusive subscriber pipeline into LINZ. Completion data has to come from councils first doesnt it?
Here's an article for The Man 2: Christchurch's languishing property values make it a tough city to leave https://www.stuff.co.nz/business/opinion-analysis/100307980/christchurc…
Double-GZ yes I had read it.
Figures make for good reading for professional investors in Christchurch.
When you have plenty of investments purchased well and giving on average approx. 10per cent returns and you own far more than the Bank you are sitting in a comfortable position.
Reality is that I wouldn’t want to be living in any other city in NZ for lifestyle and rental income.
Seriously how investors can possibly be making a serious income thru rents inAuckland now is hard to beleive.
Auckland prices are ridiculous for what you get and that is why I will always promote Chch where it is still affordable and the opportunities are still around if you care to look.
Now is the time to be buying in Chch as it is only going to increase I. Value.
Watch this space!
,
Quote from stuff
"Most of the CBD is in an awful state! We just finished visiting Christchurch for the first time in 10 years. I had been expecting to see a substantially new city, but would have forgiven an occasional rebuild in progress. - Instead we were shocked to find a disorganised utter mess, with empty damaged buildings still cordoned-off and many streets closed or impassable!! Though it was interesting from a historical point-of-view, it was nevertheless very depressing to realise that our country is simply too poor to rebuild it's second city! I feel soo sad for Christchurch. There was a time when I would have moved there, but not any more!!! I wonder what has happened to the population numbers(?) from visitor
That Christchurch analysis is spot on from our point of view. We visited family down there just before Christmas and were appaled at the state of the place. Maybe the locals have got used to it and don't see it as non-residents do, but a trip past Ballantynes and the roads thereabouts, says it all....It's still a mess, and many years away from wherever they hope it will be.
We personally took a lot of insurance money out of Christchurch as the Government got in the way of private property rights...happy now to have it out of Auckland :-)
The CBD is also a lot smaller as a many new builds are a more efficient use of a space than the old buildings they replaced,. In addition, a lot of business that were in the city are still locked into lease for another three years on the outskirts...had to sign ten year lease etc.
A untold story is that a lot of people financially lost businesses as business interruptions claims often are not successful.
Lastly a lot of head offices see no need to return to the CBD, they have moved on from old world thinking.
The CBD for all of the above will be a lot smaller as a consequence. That still does not dictate the vibrancy of a city.
Visitors are shocked as they have no clue the scale or consequences of a disaster on this scale. They have no real clue of how this city is now more spread out and now not based around a CBD. For me it still a great quality of life, then again I working internationally and the edge and roughness to this city is more something now out of the USA than NZ.
When it comes to property investment it what price you buy in and many are still doing well here..naturally in relative terms it has fallen behind Auckland and Wellington..still they have their own adjustments to play out as well for different reasons...just give it time.
.. a lot of people financially lost businesses as business interruptions claims often are not successful.
Therein lies a tale.
Folks who are Shocked, Shocked (Captain Renault?) about the state of the Old CBD are missing the local knowledge and the history of the quake sequences. A by no means complete list:
- Businesses were locked out of the Old CBD for months, and as Speckles quite rightly notes, this led, quelle surprise, to a chain of failures as owners were unable to retrieve inventory, records, plant or equipment. It would have been possible to 'mine into' dodgy buildings to do this, had authorities been less stupid, and some smart guys immediately signed themselves onto demolition crews with precisely that retrieval in mind. But most owners did or could not.
- The 'Precincts' idea - block-size spatial areas devoted to one purpose - Health, Justice, Innovation, yada yada, has proved a massive failure for three reasons:
- It's hard enough to build and lease a single building on a modest plot. Trying to do that on massive floor plates on huge land areas is nigh-on impossible.
- It took so long to aggregate titles to produce the Precincts that some - Health, Innovation - just went elsewhere. Health is now centred around Bealey Ave, Innovation is a fizzer, and the only successful Precinct in its original conception is Justice, which of course is funded by the person you can spot in any mirror.
- Ground conditions are patchy but uniformly shocking. Justice building cost Fletchers a cool $100 milly in over-runs, and the engineering plus remediation required for foundations alone is so expensive just to get a stable platform, that rents, always subject to ECON101, have to be way higher than suburban or other centre averages, to afford to start digging.
- Other TLA's have proven themselves far more adept at soaking up the residential and commercial munny that flowed from insurance coffers. IZone at Rolleston (Selwyn DC), a plethora of residential subdivisions in outlying but perfectly commutable areas, and the business opportunities that come with greenfield development, have, quite simply, eaten Christchurch City's lunch.
- The immediate answer for businesses that wished to survive was to relocate. This coincided with a wave of land developments due not to quakes but to reconsideration of space requirements (e.g. Riccarton Raceway). This provided business parks and high-end plots, all outside the Old CBD. None of the new office tenants is in any hurry to relocate back into the Old CBD, because most have found that the 'doughnut city' - a ring of businesses around the Old CBD - actually suits themselves, their customers, and their staff extremely well. So the Old CBD is gonna struggle to attract anything but hospo, high-end retail, and consultancies firmly attached to the Gubmint Teat.
- The earthquake sequence was handled so badly in business survival terms by authorities that there is considerable animus out there, about exposing businesses again to either the Old CBD, the City Council, or in general, to any development which appears to have the cold dead hands of Gubmint anywhere near it. This animus will take a generation to diffuse.
Most moderate towns/cities provide the same basic lifestyle elements apart from their unique geography. Only the true larger international cities have a clear different in the arts, entertainment, cultural and creative options.
My answer would be timing and the efficient use of it, aside from people making a place for most, the key reason we are based in Christchurch is time and less hassle to access to those lifestyle things that matters to us. Which are all over NZ and internationally. Even with a central Auckland property we find it crazy to get anywhere when in Auckland. We also have international interests so that it really narrowed it down to two cities that fly further than Australia with any efficient options.
The Boy always amuses me as to how he deflects any negative news about his beloved Christchurch by blaming the government of the day or talking about how much worse Auckland landlords are off compared to Christchurch landlords. The reality is he has put his eggs in the wrong basket. Auckland landlords do not need a decent return on capital as they have made huge capital gains over a significant period of time. Christchurch has gone backwards price wise and is now 17 in New Zealand, even behind values in Porirua and the Hutt Valley. That says it all really and the rents are reducing making it a double whammy. What do you expect for a Land Agent. They are not known for their education and ability and that is why they resort to peddling houses to make a living.
Gordon, your perogative to think and say what you want on here!
Yes, the rebuild has been slower than ChCh residents would have liked, but the reality is that there are many areas that have brand new buildings up and the CBD is starting to take shape.
From the younger ones that I speak to are very excited about the future of Chch, but you will say differently as you want to always talk the negative, wouldn’t matter what!
Stay where you are zgordon as you will do because you are so rigid in your thinking!
Anyway, i hope you have a better 2018than 2017!!
... there is a valuable lesson from the Chch rebuild : when the government steps in and assists with the funding of the infrastructure ... the houses get built ... and at almost affordable prices ...
Whereas in Orc Land ... old Goofy and his council cobbers can't stump up the necessary dosh for the infrastructure of greenfield projects .... ergo , not much gets built ... prices roar to a $ Million plus for fairly average old bungalows ...
... the Garden City is the place to be , folks !
Welcome to Christchurch the fiefdom of Wilson Parking Predator Zone
http://www.stuff.co.nz/business/94833811/Wilson-Parking-and-the-million…
Thanks The Boy. I had a wonderful 2017. I had my best holiday ever in Europe and ended that holiday on safari in South Africa with my wife and children and partners. My shares had a fantastic return including A2 Milk which I started buying early last year. You will knock that particular move but it is a company with no debt, increasing sales from the sale of the protein it produces and at least $120 million in the bank. Man you have missed out on so much increase in value by having no shares and only owning Christchurch homes . Unlike you I am diversified. I hope you have a better year than the poor year you just had. In saying that I am afraid the writing is on the wall for certain classes of assets and from where I am looking you have too much of the wrong class in the wrong town. Oh to be courageous and to be able to think outside the square. I have not bought any but you should have bought Bitcoin to make up for the poor performance of your rentals and they rents they receive.
Reading Kiwi news this morning I see a few upbeat stories about property.:
Our First Summer ... in our first home: A new home for Christmas for young Auckland family
Auckland Council Valuations Now Updated
On the up: Marlborough house prices continue to gather steam
"Petrol prices soar to a three-year high".
From the UK this morning, but our property market has mirrored theirs, so soaring petrol prices in Kiwiland will be an 'upbeat' thing as well?
Rising prices - of anything - that are not matched by productivity ( as indicated by wage rises) are NEVER something to be 'upbeat' about.
There's always a trade-off if not - the most obvious being a fall in the Standard of Living, as our Australian cousins have now realised...
https://www.9news.com.au/national/2018/01/05/18/49/australia-s-standard…
Highly-leveraged property investors 'are starting to come undone'
http://www.afr.com/real-estate/residential/highlyleveraged-investors-li…
"Birch's company, (who claims to make over $500,000 a year after expenses from the rent he receives from his 200 investment properties,) secured its loan with MKM Capital * a week after a Brisbane District ruled that another Birch company HLG One Holdings pay Permanent Mortgages over $565,000 and granted the lender possession of his investment property at Paradise Point.'
(* MKM Capital calls itself "the tricky loan specialist". "We aim to help good borrowers who find themselves in bad situations," its website says. Among its specialities are loans for borrowers with "unlimited arrears & defaults".)
If you were a lender to this guy, (and the account manager responsible for managing the account) and read this news in the newspaper, you might want to review your exposure to this borrower. If your bank's exposure was too large, then you might want to make a call to him to make a collateral call.
Links to articles -
http://www.afr.com/real-estate/residential/nathan-birch-sued-over-gold-…
http://www.afr.com/real-estate/residential/highlyleveraged-investors-li…
Depending on how he structured his business, he could be potentially subject to cross default clauses and personal guarantees on his other mortgages. This could potentially put further pressure on him to sell further.
Certainly looks like property listings are building up in the expensive areas not much selling in Parnell and Remuera.
Guess a quite a few more will be listed in central Auckland after the recent flooding. I wouldn't recommend buying anywhere a sea level near to the ocean.
https://www.stuff.co.nz/auckland/100341892/flooding-closes-roads-inunda…
Beware of the "Bull Trap". https://youtu.be/xNiodFHNZqc
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