By Greg Ninness
There are signs the slump in residential property sales volumes that has occurred over the last 18 months may be starting to bottom out.
Interest.co.nz’s latest quarterly analysis of residential property market activity shows that while sales are still running well below where they were 12 months ago, the rate of decline has slowed markedly.
In the 12 months to the end of March almost 73,000 residential properties were sold throughout the country, down almost 17% on the previous 12 months.
That trend was evident to a greater or lesser degree throughout the country, even in regions that were supposedly experiencing buoyant conditions such as Waikato, Bay of Plenty, Hawke's Bay, Manawatu and Wellington.
However the Auckland market was particularly hard hit, with sales in the region over the 12 months to the end of March down 24% compared to the previous 12 months.
However the rate of decline both nationally and in Auckland, has been steadily decreasing.
Nationally, the number of sales in the first quarter of this year was almost unchanged from the fourth quarter of last year, and was down just 2.9% compared to the first quarter of last year.
That was a big improvement from the second quarter of last year when sales were down 25% compared to the same quarter of 2016.
That trend is broadly evident throughout most of the country.
Even in Auckland the rate of decline has slowed substantially, with sales in the first quarter of this year down by 7.9% compared to the first quarter of last year.
That was also a big improvement on the second quarter of last year when sales were down 34% compared to a year earlier.
Those figures suggest the decline in sales that has been evident since late 2016 has probably bottomed out in much of the country and is close to bottoming out in Auckland.
But there is no sign of an upturn at this stage.
The market is still following seasonal trends and there are already signs that sales are declining again as the market heads into winter, so sales levels are likely to remain subdued over the next few months at least.
However even a stabilisation of sales at a lower level will be welcome news for the real estate industry, which has experienced a sharp drop in commission revenue as sales have declined.
Interest.co.nz estimates the real estate industry earned about $1.4 billion in gross residential sales commission in the 12 months to the end of March, which was down by $227 million (-14%) compared to the previous 12 months.
In the Auckland region the decline was even more savage, with the industry earning an estimated $565 million in gross commission from Auckland residential sales in the 12 months to March, down by almost $169 million (-23%) compared to the previous 12 months.
So although there is no sign of a return to the high life that the real estate industry was enjoying a couple of years ago, for now at least it appears that the haemorrhaging of commission revenue that occurred last year has been staunched, for the time being at least.
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100 Comments
So far the government measures to tackle the housing problem remain as planned moves. Ring-fencing,extension to bright-line test, ban on letting fees, foreign-buyer ban.None have actually crystallised into legislation.
And the Auckland 2017 rating valuations remain on paper.The actual rates payable on the steeply uprated valuations would only kick in later,perhaps July onwards.
So the slump now may be the market pausing with bated breadth, blood-letting staunched ,albeit temporarily.
What happens when the measures & rates actually kick-in? I am busy crystal ball gazing & the initial signs do not seem so good.
Ring fencing bill passed its third reading, and is awaiting the royal assent, which is really nothing more than a formality.
https://www.interest.co.nz/property/92868/tuesday-night-bill-which-will…
Edit: it has the royal assent as of 29/3/2018, it is now part of nz law. https://www.parliament.nz/en/pb/bills-and-laws/bills-proposed-laws/docu…
It might be passed but the reality of the impacts on cash flow for the specuvesters has yet to hit...and is a little ways off yet -
"If the rules are phased in, this would be done by reducing the proportion of losses that could be used to offset other income over a two or three year period, until no losses could be used to offset other income sources.
For example, if phased in over two years, 50 percent of residential investment losses could be used to offset other income in 2019–20, and no offsetting would be allowed in 2020–21"
Here is the issues paper... a must read for any ppty specuvester -
http://taxpolicy.ird.govt.nz/sites/default/files/2018-ip-ring-fencing-l…
Thank-you Coalition... 9 yrs overdue.
@Jaf rating valuation changes do not themselves cause rate bill changes, it is the relative change that causes a redistribution from one property to another. For the most part rating valuation impacts on costs are benign.
The bright-line test extension will disincentivize large scale house flipping, however thats not going to effect the larger body of multi property owners as they are investing over longer periods.
We still have open door immigration with 70,000 or so net growth happening. The pressure on housing is still growing. The market might have reached market tolerance of what can be afforded but I think the bottom end of the market in regional NZ has a long way to go yet. You can still buy good quality 1950-60's houses for less than $300,000 in many regions and they are arguably better quality homes than anything built now.
Real estate sales go in cycles - so it's quite possible the current downturn (of 18 months duration) will end sometime soon.
An interesting observation about the current downturn is that prices have not changed dramatically - even in Auckland where prices increased by a very large amount during 2014-16.
In many cities and towns, house prices have actually continued to increase over the last 18 months.
Re Auckland, house prices have continued to increase in the inner city suburbs - where demand for good houses remains strong and listings scarce.
TTP
Whilst the article acknowledges decline in sales may be bottoming out both on an annual and last quarter, the effect of the general election last year does not seem to be taken into account. Without a dampening effect at the moment - such as an election - sales should be higher.
I suggest that the we may not have seen a bottoming out yet.
The market has a long way to go in terms of value (that house that cost four times my salary in 1982 is still 11 times the equivalent salary) and rental yields are still abysmal. To this also needs to added the outcomes of government policies.
At the most optimistic, a flat market for many years, but probably more downside to be seen based on consideration of factors rather than simply just relying on trends without considering the possibility of distorting factors.
Agreed. I find it hard to imagine Auckland prices rising strongly again anytime soon without significant wage growth or another significant reduction in interest rates. If interest rates rise at some point as they are expected to then it's hard to imagine people investing their money there when a bank deposit gives a higher yield at lower risk.
Because investors work on longer time frames they will look at term deposits and say, okay after a 0.5% rate hike this offers 4.5% less tax, so that is 3.015% net minus inflation, so lets say 1.015%. Well the yield on a property is slimier even before accounting for the average untaxed 3.5% net real growth.
Term deposit ~1.015% net real
Property ~4.515% net real
Yeah I dont think its lights out on property if there are mild rate hikes.
Why are you taxing your term deposit income and not your rental yield? If you're assuming leverage this will reduce the yield as mortgage rates are already higher than the ~3-4% average Auckland yield (https://www.interest.co.nz/saving/rental-yield-indicator, https://www.barfoot.co.nz/market-reports/2018/march/suburb-report). Maintenance and rates, letting fees if applicable etc. will further reduce the yield.
Agreed, property will perform better if prices rise above inflation (especially if geared), but assuming capital gains from today's start point and with rising interest rates is quite an assumption. Certainly they'll occur in the long run, but that doesn't mean you have to invest right now to capture them.
I'm sure in your hypothetical there will still be takers, but I would suggest that investing in that market at that time shows either bravery or a lack of imagination.
Hi tothepoint,
I am aghast to see you admitting that there has been a downturn of 18 months duration. There has been no such thing, this was merely an oscillation in the ever increasing house price curve. It is due to rocket off once more to infinity and beyond.
If you continue in this fashion, we shall have to start including you in the DGM department.
MTP
Hi MTP,
As you well know, there's never been any disagreement that sales volumes have weakened over the last 18 months or so.
The point is that house prices have been largely unaffected - with some localities still, in fact, recording significant price increases. These include the inner-city suburbs of Auckland and Wellington and numerous provincial towns and cities.
The DGM, of course, are dismayed that prices have not fallen in tandem with sales volumes. That's what's behind their frustration and anger - so overtly demonstrated by yourself.
TTP
Poor real estate agents. And most of them are on 3.5-4%! Imagine how sad they'll be when people wake up and realise half, or even quarter of that fee is totally reasonable. In the UK the average is 1.3% + VAT.
I just looked at B&Ts fees and they're very weighted to wards the cheap end which is the opposite of what the vendor wants.
Actually that is old data, these days the UK average estate agent fees are around 1.18%+VAT. Competition between estate agents is fierce and fundamentally there is not enough cake to go around.
That makes no sense. If there is a real estate agent involved in the deal they are hired and paid for by the vendor. It's just as easy for a buyer to find a "private sale" ad on trademe as it is for the seller to put the private sale ad there.. or on the fence, or on any number of investing forums.
The house you are interested in? What, is this Highlander? "There can be only one!" IF the buyer objects to dealing with an RE they simply look at all the private sale listings first. Not really sure why the buyer would care tho, they aren't paying the RE, they are buying the house.
Have the PC brigade knocked at your door yet for assuming that being called a girl is perjorative? Joan of Arc was roasted at 19, so a teenager. I wondered why Taxinda spent so much time at schools now it’s obvious that Labour are trying to find someone even younger than Chloe for the next PM. Think someone who has no backstory and can be the puppet to the crones currently pulling the strings
Nope in the UK The RE's will actually show you round a home on an individual basis. Open homes are frowned apone as being to exploitative of buyers.
Also all the marketing costs are include in that 1% commission rate and if they don't manage to sell your home within a timeframe you can walk away without paying a penny.
RE are far more regulated in the UK and less open to the blatant money laundering that's been rampant here. Pushing up Auckland's house prices over the last ten years.
not sure what you mean by 'less open to blatant money laundering' 'pushing up Aucklands house prices".
If an agent has some amazing power to push up house prices then I want them marketing my property. I think you will find its low interest rates and population pressure pushing up prices.
It's the practice of allow RE's to encourage residential property to be sold at auction, that allows overseas investors (And money launders) to asset strip and use Auckland as an equivalent of a Swiss bank account. Which is what they were doing over the last ten years. Hence the build up of much higher house prices in Auckland.
Thankfully Auckland's house prices has come off boil now since China drastically reduced their capital out flows. In the UK; virtually all property is sold with a price value, here take a look for yourself: http://www.rightmove.co.uk/
Basically my point was; NZ has allowed RE's to be unregulated which has very much helped to facilitate money laundering.
2.5% looks better, and includes all marketing - www.nzre.co.nz - a Hamilton Company...
I always laugh at clowns disrespecting real estate agents.
Its your own choice to use them.
There are even many options within the industry with a range of commissions.
You can even negotiate your commission with some agents.
My concern is the quality of the agent, a good one is worth gold. Thats where I do my research.
Let me know when that happens, I will best you and buy as many as my bank will let me. Then in 5 years sell them back at double. Too many people on sideline like me creates a big surge in price. If you are a homeowner you should sell now. If you in Auckland, I'll buy your property at 25% discount to CV now (ie 75%). According to your calc, you will make 25% as it will drop by 50%. Bet you not a home owner though as you believe this crap of house prices crashing. I will be happy with even a 10% drop. I have been monitoring this Auckland market for over 5 years, there is no downward movement and you can dream on and pay rent.
Let me know when that happens, I will best you and buy as many as my bank will let me. Then in 5 years sell them back at double. Too many people on sideline like me creates a big surge in price. If you are a homeowner you should sell now. If you in Auckland, I'll buy your property at 25% discount to CV now (ie 75%). According to your calc, you will make 25% as it will drop by 50%. Bet you not a home owner though as you believe this crap of house prices crashing. I will be happy with even a 10% drop. I have been monitoring this Auckland market for over 5 years, there is no downward movement and you can dream on and pay rent.
I feel sorry for Real Estate Agents who took their own advice, invested heavily in "Property', now cannot get the commissions they banked on to pay down their debt....
I know a couple who may have to work their entire lives to pay down the amounts they borrowed to keep the pot boiling.... Aw Didums.
Never used an Estate Agent in my life. No need, why compound yer debt problem by 4% ...people......
If you cannot sell it...it ain't worth having....in any market.....at 4% extra.....nonsensical....on a falling one.
and Buy the Way, it is the purchaser who pays the Agent, out of the goodness of their hearts, ably assisted by Banks who just luv.....their share of the loot...and the Mortgage Brokers, who just might go broke if it was not for Funny Money.
Returns on money.....Nah......Return to Money.Standards .......ain't got it...cannot spend it.
As it is Friday, I must point out this is not Funny.....
Money is serious.....especially, when u ain't got it......
You can go Mortgagee, even in these enlightened times....Leverage is great when prices rise.....is it not...why Interest Rates are and were forced down by our Dear Leaders, Dear Banks, Dear, oh dear...yet we are still one of the highest Interest rate bludgers in the Entire KNOWN UNIVERSE....that is why they sent a Rocket Ship and Telescope up to Search for more...Life...........to take over our debt.
Happy Anzac Day by the way......what we fought for, ain't worth fighting over these days.....sad to say...
Freedom.is not having huge mortgages and debt....it is the opposite....
*and Buy the Way, it is the purchaser who pays the Agent, out of the goodness of their hearts, ably assisted by Banks who just luv.....their share of the loot...and the Mortgage Brokers, who just might go broke if it was not for Funny Money.*
Eh, are you telling me the buyers pay say $800k for the house and then get stuck with a $40k bill from the agent too.. ending up $840k out of pocket and the seller receives the full $800k price agreed on for the property? Not how I recall it.
Duh,..You should be a realist...not a pragmatist.
No the buyer pays the fees, included in the purchase price...each time the house sells a fee is added into the overall cost price, if a house sells for 800K, the vendor gets 40K less in you example, so ends up with 760K...plus Lawyers fees, etc, also come out of the sale......hence why I say Houses are compounded fee wise at 4%, on top of inflationary purchase, each time it sells.....
Though I must say...the Agent has to share his spoils with the Grand Theft Master.......who owns the Agencies.
(And would like you to have it Auctioned...at any price, plus advertising costs....ye-hah!...cannot lose...suckers)
Flipping Heck...no wonder Houses are a ridiculous price in NZ....compared to other minimal fees charged else where. It all adds up.
Great in the Ponzi Market, ...not so good, when the buck stops with the last buyer.....And you put your Life Savings into the Melting....Pot.
Also why it takes a couple to buy a House, or a specu-later...wanting some other dork to pay their way by renting......and the Taxpayers aiding and a-betting with some of these .....by giving some the Government the right to fraud-U-lent-lie donate your hard earned Tax Money to assist these Slick-thieves and vaga-bonds.
I will not mention Banks...who collude.
That is corruption at the highest level...and it includes many MP's who....BENEFIT......from your largesse.
That is if you pay taxes..legitimately.
That is why they own so many...rentals......A hand in the Till, untill the Penny drops...plus you AID....them...in the process.
Plus sending us...the Laundry Bill.......of course....Via Asian Countries.....plus others.
The Housing Market, should be free from sin and I say...sodem and gomorra....have we learnt nowt...YET.
Get rid of this den of thieves and their hands in yer pocket.......but as usual, you have to know the truth......of what is really going on....
As it is Friday I will end on a high note.........do not buy a House, buy a Home........it ain't an investment, they can be a Liar-bility....and we have had some of the best liars in Modern Monetary Policy.
Houses do go down in Value, ....Agents Lie, ........Politicians Plunder....Insurances.....well they cover themselves first...then maybe You.
Repairers do not fix anything, hence why I quake in my boots....7 years and waiting.....and shoddily done.
No thanks...
Poor Christchurch....
OH!...and Building costs....Builders drive huge Utes....where do they get the dosh from.....
Land Bwankers.....my pet hate....
Do not rate em highly....one and all.
Howdy Alter Ego. I don't think our military has ever fought for freedom. We seem to declare war and invade countries that have never heard of us. Our military history is the subjugation of the Maori people and helping the world powers Britain and USA. Our military was helping the Brits fight Adolf and some clown declared war on Japan. Since then we just help invade countries that haven't heard of us.
Not sure if the Japanese had heard of us either.
My ancestors may have been Killers, but not I...
My Father-in-law was a Spitfire Pilot, he is now dying, here in NZ.
Was British....no taste for war ...but at 18 was enlisted. Then emigrated.
Perhaps we might all be speaking Japanese, or German.....if he had not done his duty...
Sent by Churchill...venerated now.....by some.
I do agree...the war to end all wars.....Did not, but then, they never do....nor ever did.
Invaders will prey on the weak.....People make money out of Munitions....
All change, no change.
Very different world then wasn’t it. Just kids flying state of the art, equivalent of $ millions today, fighters & bombers. Brutal, blunt, beautiful too, deadly killing machines. No TV then to depict the true horrors. Just brass bands, propaganda and conscription. Hard to believe that today’s youth could be coraled as such and perform as such.Some professional soldiers no doubt, but not general conscription of any free society.
Plenty of heroes in My family as well Alter Ego.
My point is that we celebrate the memory of these brave men and women who our politicians sent to war and never once have they actually defended NZ.
The closest we have ever come to having a threat was the Japanese Who didn't actually have a beef with us. They were responding to USA's trade sanctions and British, French and Dutch colonization in Asia.
After we declared war on the Japanese we asked Churchill to send our troops home to defend NZ and he said no.
Our one chance to defend NZ against a country we declared war on that could actually attack us and the Brits had our military. Bugger!
So if you have a good look at our military history theres not much to be proud of.
We have helped Brits or USA invade Boers Africa, Turkey, Palestine, Libya, Tunisia, Malaysia, Korea, Vietnam, Afghanistan and Iraq.
A history of subjugation of our Maori people and then a whole bunch of other peoples.
I am ex NZ army and I don't celebrate Anzac day.
Its just propaganda glorifying bad deeds as we continue to be on the wrong side of history.
Agree, ie it is legal slavery and its hurting our economy as many pay huge rents and mortgages and dont have anything left to spend elsewhere. In 2008 I determined to get myself off a mortgage as fast as I could, but it took my almost 10 years to do so but boy does it feel good.
There is always a point where things cant get any worse!
I dont think this is it just yet for Auckland though!!
There is no demand for a lot of the overpriced crappers for sale.
This vendor hasnt wanted 2 houses since they listed almost 6 months ago, cant see their luck changing anytime soon, hope they dont have bridging finance.....
The vendor could easily sell that property if they *really* wanted to. Its Homes.co.nz estimate is 820K, yet they're asking 850K - and they bought it less than 6 years ago for just 428K. I suspect they're hanging out for a sucker prepared to pay over the odds. If the owner really wanted to sell it I am sure dropping the price to 750K would get some bites - and they'd still make a truckload of cash given what they paid for it.
Thanks for the article Greg.
I would be very interested if the number of sales is simply returning to "historical" levels after a spike of 2012?- 2016 or if it's dipped below? A graph of volumes sold for the last 12 years or more for both NZ and Auckland would answer that question. Can you please post one?
Thanks
Yvil, the graphs in this article should help you
https://www.interest.co.nz/property/93229/auckland-housing-sales-lowest…
Worst March in Akld since 2010
Thanks theglc, Awesome!
So, in Auckland, volumes have gone up from 2010 until 2015 and have come down since 2015 and they are now low, even looking back 20 years
NZ wide, volumes have gone up from 2010 until 2016 and have come down since and they are (for now) at roughly an average long-term level
I look at the data and see that volumes were very high in 94,96, 02 until 07, then kinda getting high in 2016, but noway near as high as the noughties period.
However, shouldn't the sale volumes also be adjusted against % increase in population? Wouldn't the "normal" sale volume rate be steadily increasing after a period of sustained net migration? What was the migration rates like in the 90's and noughties?
There's some quite noisy and seasonal monthly data here https://www.interest.co.nz/charts/real-estate/volumes-sold-reinz
Probably not far off average but of course transactions should be increasing with population growth. Interesting that the recent 'frenzy' didn't even come close to 2002-2007 in terms of volume.
Auckland data shows a very similar story although I suspect the population increase has been even higher there than in the country as a whole.
Property globally in real terms is not going anywhere over next decade. The cost of borrowing is going up due to rising US rates. Politicians know they can't allow property prices to go up as before due to the imbalances it has created in society.
It's yet to hit NZ so fix your mortgages sooner rather than later is my inclination.
Interest rates are based on expected (or actual inflation) or should be. Despite the lack of real inflation, the Fed keeps trying to put up its rate, this is simply too early and will I think backfire IMHO.
So the Q is how long and how much will the Fed keep trying to raise before it backpedals?
NZ Politicians also have no say in where our RBNZ puts the OCR. Sure if the banks do indeed put up rates they wont be hiding behind the skirts of the RB to do it. They will be exposed politically to considerable wrath, meanwhile our CPI is is a lacklustre 1.1%.
Despite the lack of real inflation, the Fed keeps trying to put up its rate, this is simply too early and will I think backfire
Then why u think US is increasing rates now? Political pressure? Some say any significant rate increase may backfire because of huge debt.
I have been asking questions. Pls don't mind ..just trying to learn Ur viewpoint
Only temporary drop, but found nothing at a discount in Auckland. There is seriously not enough properties and lots of demand. My advice is don't listen to Doom and Gloom merchants. They probably already have a nice house for their family. It's the basic need to have shelter. I'm sick of paying rent for years now because I read that prices will come down and didn't buy. Wish could sue those writers. Property in a good location with decent land will not ever come down and stay down long term. They are not creating any land in good locations around Auckland. I don't want to be on a motorway for hours a day. Simple supply and demand, Auckland is geographically tiny so no major correction coming - Dreamers
That's exactly what I'm doing. This is why we have rich and poor people, dude. Some seat on the sidelines waiting the world to end and some make ballsy calls a and get rich. Bricks and mortar is way to go. But I'm also happy that I will less competition as people think it's a bad time to invest. Clearly we can't all be thinking the same way, otherwise there is no winners and losers. My theory is simple, no more land being created, population still increasing and Auckland is a terrific City. Can only go one way long term.
Better off buying overseas, in real cities where they have better economy and better infrastructure . All that theories great, but who's going to buy it when average salary isn't going up, we have low class immigration. foreign buyers being banned, chinas stemmed the flow of money, interest rates will go up after years of quantitative easing.
If the average house is worth 800K who can afford that. Certainly not the average person.
Bricks and mortar is a way to go, but people need businesses to export goods, bring money from overseas in, we need to employ people, you cant have an economy that just gets rich off each other, it sounds like a pyramid game. The guys who get in early win, the ones that join later carry the can.
And you are 100% correct Chessmaster, well said and good luck ...
just forget about the DGM noise. Look for your Home and buy it this Winter if within your budget. Sould CGT be legislated in future then you will never be able to own a home.
One thing is now as sure as death and taxes, Rents will be driven higher like never seen before - this CoL s do not understand what "unintended consequences" means.
some will argue that renters are tapped out, Can't get blood out of stone , but blood will be on the streets if all these venomous rules took place ... they are blatantly saying they are chasings property investors ( sometimes called Speculators) out of the market.
Taxes from other incomes otherwise used to compensate for possible loses of running a residential investment business has to be recouped in Rent. This rule does nothing other than rearrange the cash flow and push losses into the future.
Watch the space, This CoLs and the IRD think they are smart and have covered all the loops in ring-fencing and taxing ( under the pretext of fairness and affordability) - Unfortunately, they will wake up one day to their short sightedness and to the amount of new homeless people asking for shelter let alone tax evasion issues they created themselves.
What they will gather from unpaid portions of salary / wage taxes will be paid many times more in AS and motels and buying houses from investors fleeing the market to house these homeless tenants --
We are likely to see a spiral of some investors winding up their business in the next year or so causing rental supply shortages which will push rents up .. and round and round we shall go, less supply , higher rents
No one is seriously addressing the Supply or the Demand factors, they are busy Taxing anything that moves - Using outdated rusty tools proven to only hurt its user. Just Tax and think later !
With such a hopeless CoL gov policy on housing, expect things to get much worse before getting any better.
"new homeless people asking for shelter "
First time I delved into your ramblings for awhile, still a struggle but they are still funny.
After record homelessness from National now that's a chuckle in itself. The problem with people like you, with hard core views of right or left, whatever one party does its all roses and whatever the other does its all rubbish. You guys never see the wood from the trees. Both sides have bad policies and both sides have good policies, its a matter of finding what is right for the whole country as a whole. Its a shame we cant get a consensus on what we want and work towards that, its always huge swings to right or left pendulum. At the moment we have obscene unaffordable houses that the average joe cant afford, we have record immigration, infrastructure issues that need billions to fix, record homelessness, tax rorts and the list goes on.
We need some type of solution to fix these, National had there chance and blew it. If house prices moved with inflation and immigration didn't sky rocket up, I would still be voting National.
"The problem with people like you, with hard core views of right or left, "
LOL, you ramble well yourself... people like me? I have no hard core views on either side - I am a person who calls it as it is without political makeup -
I hate fools, noobs, and idiots on both sides when they destroy the economy and the country by pushing radical changes down our throat and I do not make any apologies for that.
Some of us are fed up with the BS that is thrown around insulting our intelligence.
This Rambling, as you call it, is a realistic and practical view of someone who has skin in the game and has his finger on the pulse - Not some comfortable passtime commentator who doesn't know shit from clay and calls for the ideological stability of the world and other PC BS.
As I said , this will not hurt the property investors at all, they know how to deal with headwinds -- it will hurt the same people this CoL are supposedly helping and protecting from the "villains" - Another unintended consequence is creating an enemy to cover their own incompetence and dig deeper in the hole they are in!
The Blaming game is over and useless - anyone uses that as an excuse for current failure is dishonest or a disconnected illusionist with an agenda.
You make some good points about unintended consequences about some of the government's policies.
The policies will only be effective if Kiwibuild is a major success.
The reason being that the various tax changes are likely to disincentivise rental investment. The support for many newly built townhouses and apartments will be pulled away, and yes rental supply may dwindle.
However, with a successful Kiwibuild scheme many of the people who would have been stuck in a rental rut will be owning.
"However, with a successful Kiwibuild scheme many of the people who would have been stuck in a rental rut will be owning. "
I wouldn't be so sure really. I would use the word Few instead of Many ... Some Current apartment renters could end up buying "Affordable Shoe boxes " kiwi build will provide in few years if we are lucky, but the majority of rentals are units and houses accomodating families with kids and pets ...just a small number of terrace houses and attached units were introduced in the market in recent years.
But you are correct, these regulations are way ahead of time and they should have waited until the market was balanced in S&D again after kiwibuild has seen the light.
As I mentioned here before, there are 450,000 private rental properties housing over a million people ... and thousands are needed every year to address growth. Take away just 1% out and you will add at least 10,000 people to the homeless list of HNZ.
I have advertised a unit for rent on tradeMe two days ago @ top end market rent.
So far, in less than 48 hours there are 39 watchers and over 700 hits , 10 viewing and application seekers and we are just starting the weekend ! .... the market is tight, demand is high and it will become worse.
Don't listen to other people on here, its simple if you have a decent job and can afford the mortgage repayments then buy a house. It helps if your a bit of a handyman and are prepared to do everything in terms of maintenance yourself. I suspect many people that rent do so because they are useless using anything other than a keyboard. Never regretted buying, its one of the few ways to really get ahead in this country because you don't have to rely on other idiots, your in total control of your house..
"Sit on the sideline and the dream goes further and further away every year."
Nail head. That's our youth and our future FUBAR'd.
Unless their is a correction where house prices are affordable for the average buyer NZ is knackered for our future. We are a nation of debt with diminishing productive industries. Not a way to grow our country.
That's our youth and our future FUBAR'd
There are more opportunities to make wealth now than ever before. Such an attitude is going to to do you no good at all. There is also no such collective as "our youth" in the global multi-cult.
Anyway an advert above claims new house and land packages in Melbourne starting at 435k.
FUBAR'd here? Move somewhere else. We're not living in a medieval village.
Have had properties in the past and made loads of money. Still have few properties overseas with some profits and rest (big chunk) been sitting in low rate deposits. Lost money on shares, commodities and everything else that was not property, haha. Been renting for 3 years thinking Auckland will drop, forgot the fundamentals of investing by reading/listening to idiots and socialists.
I tend to agree with your overall point, although I think Auckland is nicer than you make out.
Auckland is a nice mid size city in a small country in the South Pacific, with a good-ish climate, and moderate opportunity.
Sydney is a great, large, world class city in a mid sized country with a great climate and large opportunity.
Each to their own I guess. I think Sydney is magnificent, a brilliant blend of urbanity, culture, amazing natural setting and climate (sure it gets very hot from time to time, but mostly the summers are great, and very mild rest of the year). I've always found Sydney people great too.
Someone (sorry cant recall who) posted these brilliant youtube videos by Martin North https://www.youtube.com/watch?v=CpsaGy-SlA4&t=684s. He doesn't paint a rosy picture for the property market that's for sure.
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