Housing values are continuing to rise around the country although value increases are mostly modest with just a few hotspots left in a cooling market, according to Quotable Value (QV).
QV says the average value of all dwellings throughout New Zealand was $681,545 based on sales over the three months to the end of November, up 1.3% compared to three months earlier and up 3.5% compared to 12 months earlier.
However while property values are still rising overall, the rate of growth is declining, with the annual rate of growth dropping to 3.5% in November from 5.4% in October.
But there are still a few hotspots, with Invercargill, Dunedin, Whanganui, Palmerston North, Napier, Whangarei and several smaller towns and districts maintaining double digit value growth over the last 12 months, and stronger than average value growth in the last three months.
However the Auckland market was basically flat, with homes in the region having an average value of $1,050,647 in November, up just 0.1% over the last three months and up just 0.4% compared to 12 months ago.
And in some parts of Auckland such as Rodney, and Papakura, average values were slightly lower than they were three months ago.
Value growth was also pretty lacklustre in Christchurch, with the city's average value of $495,742 being up just 0.4% compared to 12 months earlier, and the average value of homes in the city's central and northern suburbs being 0.7% lower than 12 months earlier.
But value growth remains robust in the Wellington region, where dwellings had an average value of $685,387 in November, up 8.1% compared to a year earlier.
Throughout the Wellington region the average annual value increases ranged from 3.4% in Wellington City's western suburbs to 9.3% in Porirua. (See the table below for the full regional figures).
"New Zealand's more affordable main centres, particularly Dunedin and the wider Wellington region, continue to show a strong rate of growth in a cooling market," QV says in its November report.
"Dunedin, with a relatively affordable entry price coupled with attractive premium areas, continues to appeal to a variety of buyers, leading to strong quarterly value growth of 3.8%."
"At the same time, the top end of the market, those areas with average values above $1 million such as Queenstown-Lakes, are generally experiencing a cool down in market activity and growth, the report said."
"There is still plenty of activity taking place following the spring surge in activity although value growth is fairly modest overall," QV General Manager David Nagel says.
"The recently announced loosening of the LVR [loan-to-value ratio mortgage] restrictions should inject energy into the market although I wouldn't anticipate its impact will be overly significant," he says.
| QV House Price Index - November 2018 | |||
| Territorial authority | Average current value $ | 12 month change% | 3 month change % |
| Auckland Area | 1,050,647 | 0.4% | 0.1% |
| Wellington Area | 685,387 | 8.1% | 4.0% |
| Total New Zealand | 681,545 | 3.5% | 1.3% |
| Far North | 438,919 | 4.3% | 6.1% |
| Whangarei | 563,312 | 12.7% | 6.0% |
| Kaipara | 548,740 | 11.5% | 2.3% |
| Auckland - Rodney | 943,053 | 0.8% | -0.7% |
| Rodney - Hibiscus Coast | 921,316 | 0.6% | -1.3% |
| Rodney - North | 965,739 | 1.0% | -0.1% |
| Auckland - North Shore | 1,215,601 | 0.2% | 0.1% |
| North Shore - Coastal | 1,381,946 | 0.1% | -0.5% |
| North Shore - Onewa | 979,159 | 0.5% | 0.9% |
| North Shore - North Harbour | 1,194,331 | 0.3% | 0.9% |
| Auckland - Waitakere | 826,280 | 0.6% | 0.6% |
| Auckland - City | 1,239,592 | -0.2% | -0.1% |
| Auckland City - Central | 1,090,427 | 0.4% | 2.3% |
| Auckland_City - East | 1,558,780 | -0.7% | -1.0% |
| Auckland City - South | 1,097,192 | 0.3% | -0.9% |
| Auckland City - Islands | 1,171,450 | 1.4% | -1.1% |
| Auckland - Manukau | 906,928 | 1.7% | 0.9% |
| Manukau - East | 1,159,206 | 1.3% | 0.9% |
| Manukau - Central | 706,492 | 2.8% | 0.9% |
| Manukau - North West | 783,961 | 1.8% | 0.8% |
| Auckland - Papakura | 698,825 | 1.0% | -0.6% |
| Auckland - Franklin | 671,732 | 1.8% | 0.4% |
| Thames Coromandel | 754,581 | 8.5% | 3.4% |
| Hauraki | 414,064 | 8.8% | 0.1% |
| Waikato | 484,170 | 5.3% | 1.7% |
| Matamata Piako | 457,680 | 6.7% | 1.9% |
| Hamilton | 565,859 | 4.0% | 1.2% |
| Hamilton - North East | 710,185 | 3.0% | -0.7% |
| Hamilton - Central & North West | 516,983 | 3.4% | 1.1% |
| Hamilton - South East | 519,924 | 5.8% | 2.3% |
| Hamilton - South West | 507,087 | 3.6% | 3.6% |
| Waipa | 560,253 | 5.2% | 1.0% |
| Otorohanga | 291,556 | 0.1% | 2.2% |
| South Waikato | 245,148 | 11.5% | 14.0% |
| Waitomo | 220,684 | 17.6% | -5.9% |
| Taupo | 491,830 | 7.3% | 2.8% |
| Western BOP | 640,530 | 2.3% | 0.9% |
| Tauranga | 713,859 | 3.9% | 1.2% |
| Rotorua | 438,371 | 7.0% | 1.3% |
| Whakatane | 462,144 | 11.2% | 8.3% |
| Kawerau | 241,919 | 25.5% | 18.5% |
| Opotiki | 299,005 | 8.2% | 9.9% |
| Gisborne | 323,702 | 11.3% | 1.5% |
| Wairoa | N/A | N/A | N/A |
| Hastings | 465,441 | 5.1% | 1.2% |
| Napier | 521,981 | 10.2% | 2.0% |
| Central Hawke's Bay | 350,506 | 19.6% | 0.9% |
| New Plymouth | 456,522 | 5.7% | 2.0% |
| Stratford | 271,000 | 5.5% | 1.6% |
| South Taranaki | 229,051 | 10.6% | 1.0% |
| Ruapehu | 200,797 | 16.9% | 2.9% |
| Whanganui | 276,113 | 18.1% | 8.4% |
| Rangitikei | 235,406 | 22.4% | 9.1% |
| Manawatu | 364,732 | 11.5% | 5.2% |
| Palmerston North | 419,089 | 12.0% | 5.1% |
| Tararua | 219,074 | 17.0% | 5.6% |
| Horowhenua | 333,973 | 13.1% | 3.4% |
| Kapiti Coast | 573,395 | 6.5% | 2.2% |
| Porirua | 585,048 | 9.3% | 4.6% |
| Upper Hutt | 511,670 | 8.8% | 2.4% |
| Hutt | 572,701 | 9.2% | 5.8% |
| Wellington | 805,442 | 7.4% | 3.5% |
| Wellington - Central & South | 802,787 | 8.1% | 3.4% |
| Wellington - East | 865,336 | 8.1% | 4.5% |
| Wellington - North | 734,740 | 8.9% | 3.6% |
| Wellington - West | 907,187 | 3.4% | 2.0% |
| Masterton | 362,981 | 11.0% | 1.9% |
| Carterton | 405,901 | 12.0% | 4.0% |
| South Wairarapa | 502,359 | 14.9% | 4.6% |
| Tasman | 585,913 | 5.9% | 0.1% |
| Nelson | 597,533 | 8.0% | 1.6% |
| Marlborough | 470,199 | 5.1% | 1.8% |
| Kaikoura | N/A | N/A | N/A |
| Buller | 191,998 | 7.0% | 5.6% |
| Grey | 211,220 | 1.3% | -3.0% |
| Westland | 249,666 | 2.9% | 2.5% |
| Hurunui | 382,320 | 0.1% | -1.6% |
| Waimakariri | 446,829 | 1.6% | 1.1% |
| Christchurch | 495,742 | 0.4% | 0.3% |
| Christchurch - East | 374,801 | 0.9% | 0.2% |
| Christchurch - Hills | 667,195 | 0.9% | -0.7% |
| Christchurch - Central & North | 581,463 | -0.7% | -0.2% |
| Christchurch - Southwest | 474,431 | 0.9% | 0.8% |
| Christchurch - Banks Peninsula | 527,157 | 2.5% | 2.8% |
| Selwyn | 551,641 | 1.3% | -0.3% |
| Ashburton | 354,752 | 2.6% | 1.4% |
| Timaru | 364,136 | 4.0% | 1.0% |
| MacKenzie | 539,001 | 8.9% | 8.7% |
| Waimate | 241,411 | 7.7% | -1.6% |
| Waitaki | 305,254 | 8.2% | 0.8% |
| Central Otago | 503,902 | 7.7% | 0.0% |
| Queenstown Lakes | 1,174,167 | 6.2% | 1.1% |
| Dunedin | 431,665 | 11.7% | 3.8% |
| Dunedin - Central & North | 452,174 | 12.1% | 3.0% |
| Dunedin - Peninsular & Coastal | 397,546 | 12.0% | 5.7% |
| Dunedin - South | 411,561 | 11.8% | 5.6% |
| Dunedin - Taieri | 442,954 | 11.3% | 2.6% |
| Clutha | 221,577 | 10.7% | 4.7% |
| Southland | 285,654 | 5.7% | 4.2% |
| Gore | 230,188 | 5.1% | 2.7% |
| Invercargill | 282,705 | 12.2% | 3.6% |
| Main Urban Areas | 790,957 | 2.4% | 1.0% |
No chart with that title exists.
122 Comments
Last QV update this side of xmas. December results still to play out which will be eagerly awaited. Thanx Greg
Average (and median) house prices continue to rise around New Zealand - as Greg summarises today.
Even Auckland - which witnessed whopping price increases through the 2014-16 market upswing - records an 0.4% increase in average house price over the past 12 months.
This evidence will come as upsetting/unnerving news to those people here who loudly proclaimed there would be a sizeable fall in median/average prices before the end of 2018......... (Read their excuses below!)
As predicted by seasoned observers, however, house prices have remained resilient.
TTP
Did you not see the car sales data yesterday? The lowest level in 18 months..There is a correlation with house prices....just a little delay that's all.
Aus August report - " New South Wales, where lower Sydney house prices are getting the most attention, saw total vehicle sales fall 9.6 per cent to 27,675 while Victoria was off 6.3 per cent to 24,921. The two most populous states dominate the market, followed by Queensland down 5.8 per cent to 17,467".
https://thenewdaily.com.au/money/finance-news/2018/08/03/car-sales-fall…
Ignore the signs at your peril.
It's gonna crash any minute now........................................... yep any minute now, just you wait - you'll see.
Hey, if the NZ housing market doesn't crash like one predicted then just talk about something else, Ireland is quite a popular one or Australia, car sales is a new one
Personally I track the bicycle market, and sales have been trending upward since June. I think John Key saw the importance of this key data point when he invented the cycle way.
Sydneys the truck, Auckland's just the complacent laden trailer.....
I don't know why you continue to have such faith in this country.
Face facts - it's an isolated island country where the economy is propped up by real estate speculation and mass migration of unskilled labour. Coupled with an expansive social welfare/pension state, it's a recipe for disaster.
The main thing charming about NZ was the temperate climate and varied landscape coupled with a low population density. The low population density is rapidly altering, you see it even in the provinces.
The trajectory is all down hill. Property specuvesting, tax hikes, an ever growing elderly population greedy for pensions, and menial workers with third world masters degrees are not going to set us right.
Nah the main charming thing about NZ is it's stable government, and civilised culture, which is also the main thing propping up the economy.
Nah the main charming thing about NZ is it's stable government, and civilised culture
First world countries with stable governments are very common, there's nothing special about NZ.
RP, would you be man enough to admit that you predicted a 5% fall in house values in Auckland by the end of this year and that you were wrong?
But some parts of Auckland have fallen by even more than 5%, therefore RP is 100% correct.
Yvil, I certainly predicted a 5% fall in Auckland house prices by December just like you predicted we are sliding towards another depression. Like BLSH comments, some areas have fallen by more. You're welcome to question my timeline as much as I can question yours. Look at what's already taken place in Sydney. More declines are coming here. My bias is supported by sound facts and has been consistent.
I asked you once where Auckland house prices would be by December 2019. You replied "lower than where they are today" When pressed for a percentage you became hostile and told me to "figure it out for myself".
Are you acknowledging that you got it wrong or do you stand by your prediction of a 5% drop by years end for Auckland?
Anyone looking to buy in Christchurch, nows a great time to buy but in 3 months time it’ll be even better!
Anytime is a great time to buy property in Christchurch, providing you are buying it right!
Buy under true market value and with upside!
Only legitimate and safe way to get ahead!
What are you trying to get ahead of? Your fellow New Zealanders?
Yes, why be ordinary?
Not sure if you're being sarcastic or not - if not, you're perhaps in the race to the bottom without realising it.
Nah mate, the easy way to get to the bottom is do nothing, I'm far to successful for that. I'm the cream of the crop, and the cream always rises to the top.
Talk about rising to the top. Was clearing out a septic system the other day. I didn't notice any cream there, but there were a few floaters. Makes you think, perhaps sometimes the things that don't form or develop properly that rise to the top in horrid conditions.
Depends upon what you want to rise to the top of I guess, a sewage tank or a productive society.
The closer you are to the bottom, the denser you are.
Interestingly, psychological research suggests people would rather make less overall (having a lower quality of life) but more than their peers, than everyone making more. An unfortunate effect of money being too much a proxy for achievement or status or moral worth.
Likely part of the screeching at any suggestion of earned and unearned income being taxed equitably.
IO,
In minds of “like, really smart” people, the best way to get ahead is to pour all monies into non productive assets as that's the only way to get ahead.
Screw the rising tide of capitalism, thing.
Much better to pursue investments that lift the living standards of one person at the cost of others. That's the way of the "very stable genius.”
Housing is not a non productive asset at all!
Positively geared capital appreciating assets such as rental property is a surefire way of being financially stable.
Yes but you're caught up in your own paradigm where you don't see society and the economy as a whole. We can't all be landlords who rent out houses to each other - thats a zero sum game.
You're caught up in your own wee property bubble....excuse the pun.
Crazy how people would call a laundromat business a “productive asset”, but not a rental property. The rental property delivers a far more important service than a laundromat. It keeps the rain off the tenants while they sleep, for a start. With the exception of food, shelter is the probably the most important asset one can own. Ask Warren Buffet - he’ll confirm it is a productive asset.
So productive that everyone should own one and everyone should live in one?
No doubt that this is desirable in terms of social/humanitarian outcomes. But how you achieve it is the big question. The road to hell is paved with good intentions, and many well-meaning marxists on this site will have some pretty awful solutions in this regard.
Would you suggest some people live in a laundromat and own a rental property?
Well I've seen evidence that some have already achieved the former, when the washing machine broke down
Yes Dan, that’s exactly what I’m suggesting.
https://en.wikipedia.org/wiki/Productivity
For your perusal.
And to clear things up for you.
A laundromat is productive because it increases the productivity of those who use it. i.e. it allows a person to do more within a given amount of time.
A house is non productive because all it does is house someone. It has no direct stimulus on the productivity of the individual.
Essentially it doesn't matter if someone has 1 house or 10 houses, their level of output is unchanged.
Trying to get ahead so,you can be financially independent.
If you want to struggle thru life then don’t buy property, continue to rent!
Again I ask you - trying to get ahead of what? I don't think you quite get that as a society we are all in this together and that your actions have positive and negative consequences on other people/families in society. If one person decides to 'get ahead' of another person to become financially independent, but via means that screws over another person who then isn't financially independent and therefore needs support of the state (i.e. welfare) that to me is a zero sum game. Why would we allow it?
The richer you are the more tax you have to pay, and the more able you are to support others. The average person doesn't pay any tax. You probably don't, but are to dumb to realise how ironic your ideology is.
I thought property investment was the most tax efficient investment strategy? Negative gearing? No capital gains tax? People invested in propoerty to protect their capital so they could get wealthy by paying the least amount of tax possible. Or have I got that wrong? Why would so many peole get into property to get rich if they pay so much tax via that investment option? That woldn't be very smart...
Thanks for telling me I'm dumb - makes me feel great. Cheers have a great day.
QED
Yeah, nah.. the housing market is a bit shaky!
- "throughout New Zealand was . . . up 3.5% compared to 12 months earlier"
- "Auckland market was . . up just 0.4% compared to 12 months ago".
Where is the double digit growth that we have become so accustomed to over the past decade?????
Good to see the market at least holding up and some sense returning over the past three months which has been the important spring time market. However, it will be a long summer with a little bit of uncertainty but at least not seemingly all doom and gloom.
So these are predominantly sales pre FBB, and market flat. ..
Without that life support, pulse will start to lower till the last speculator decides they can't hold on any longer
Hi PP2F,
Note that the evidence to date shows the so-called FBB has had little, if any, impact on the housing market.
TTP
Thrill yourself with your fantasy
Are you implying that the QV index is based on the previous 3 months of sales? If so, then I agree that's potentially quite an important detail. Is the way the index is calculated documented somewhere?
Early next year will be very important as have seen good fall in asking and sell price in Aucklad in last one month. So next data should be much different.
Flattest crash I’ve ever seen
Keep watching..its like digging a sand channel to release a full lagoon, just need a small flow and watch it go.
The fundamentals - supply and demand - are the same in the housing market in Auckland. At the moment, for reasons that I have mentioned a number of times, supply is not keeping pace with demand. However, the exuberance has gone out of the market in Auckland and therefore the "fomo" bonus that sellers were getting has gone. How much that bonus is worth is unknown at this stage.
Yes keep building in Auckland - infrastructure can handle it? A friend who is a regular swimmer recently got sick due to the daily runoff entering the once grand harbor.
It was never grand mate.
Awklands dirtiest secret. Everyone ranted on on about how bad the Manakau was, but after a big rain its the Waitamata that's the big problem. Its on the beach, in the water, on the water. Council asleep at the....toilet.
Auckland is building a 45 minute $3billion tram to the airport and spending billions more to build interconnected exurban sprawl.
Auckland will keep on flushing it's crap straight into the Waitemata, because there is no more money left.
Watercare is already doing further investment.
https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12066277
Everyone's paying more because the previous government used high-volume immigration as a stand-in for more genuine economic growth.
Plenty of supply (inventory) Low demand (Not many buyers), hense the low sales volumes, low auction clearance rates, high inventory, high days to sell. There is currently more supply than demand. It would currently take 23 weeks to clear the inventory if no new homes were to come on the market
Don't confuse the housing shortage with the market supply and demand, although people need housing that doesn't correlate to more buyer demand despite what the media keeps telling you.
Don't confuse someone putting their house on the mkt, for a high price,and not selling.. as supply.
( over the yrs... I've known people who have had house on the mkt for 3 yrs before finally selling at their price )
The dynamic of the housing mkt is not the same as the banana mkt.
eg.. people live in houses.. Most of the time when they sell they rebuy. Most of the time , they are not compelled to sell... they have choice, they have time .. Total inventory does not reflect any of this ...( unless the inventory is an overhang of new , unoccupied houses )
I kinda disagree with ur last paragraph... and I also agree..
In my view, If there truly is a Housing shortage , then it will have an impact on supply/demand.... , which will manifest in its own way, over time...
eg... in a buyers mkt, it will help mitigate downward prices.
in a sellers mkt..... it will amplify upward prices..
The failure conditions of Auckland housing market are therefore pretty simple - will occur if/when people move away. Now unfortunately Auckland has had very poor construction rates compared to everywhere for about 10 years (thanks to Auckland Council). For the foreseeable future an Auckland building shortage is going to mean high rent/high cost. Thus future business investment is less likely to happen in Auckland. If/when there is a general upswing in business confidence in competing markets, job growth will occur elsewhere and people will be compelled to leave.
Therefore I think Auckland might survive with relatively flat housing prices through any impending economic difficulties, but fall quickly on its face in the subsequent recovery.
Sure, some sellers are in that situation. But I'm equally sure that many sellers in a different situation and are more motivated to sell. Do we have any reason to assume the ratio of non-urgent sellers to (somewhat) urgent sellers is any different now than in the past? If not, then total inventory is a pretty good indicator of supply.
The issue wasn't just the FOMO - it was the expectations of future capital gains. Now that has gone there is potential for significant down-side even without addressing the supply-demand imbalance.
The component that people keep missing is that as prices go up - demand goes down. Namely, kids stay at home longer, FHBers take in flat mates, students share bedrooms, granny down-sizes. Therefore at the current prices the shortfall is over stated.
Values dont mean squat if you cant get anyone to buy your property!!!
There are a truckload of properties that have been sitting on trade me for 6months+, I dont think those vendors will be popping champagne after reading this article.
Everyone knows CVs have for a while not been correlated to what a house is really worth. The fact that average CV in Auckland has been just over a million for quite a while seems artificial given the rest of numbers we've seen for a while and just gives the impression that someone doesn't want to go past the psychological 1M barrier that would make it to the headlines.
I think you will find that on average houses are selling between 3-8% above their 2017 CVs, maybe more. There is a fairly rough correlation that surprised even me how accurate it was. Of course individual cases can vary wildly.
"I think you will find that on average houses are selling between 3-8% above their 2017 CVs"
How did you come to that conclusion, is it based on published evidence?
I went on my own auction results calculations. Here is the QV analysis of all sales:
https://www.qv.co.nz/property-trends/residential-sales-prices
Appears to show Auckland as a big fat 0%
Hmmm.
So. Your results considering the 100 or so properties that sell by auction each week are rather biased, huh.
Who would have thought..
I never would have. Still my figures are close! I was often trying to prove that the RVs were remarkably accurate on average.
More fool you, then.
"Still my figures are close!"
How can you possibly say that? You have no idea what the variance of the QV sample is. 8% could be a whole standard deviation away in which case the results are not at all close.
Well, the auction results calculations showed that the houses were often selling for around 3% above RV according to my notes. Successful auctions are likely to sell at a bit of a premium but I think within 3% of RV on average was close. Not sure why you would think they are not from a RE perspective.
I'm saying things like the sales prices are remarkably close to RV. Auctions reveal a little bit above RV consistently. Later QV stats show all sales to be spot on with RV. People claim I wasn't even close.
Okay.
So what you are saying is that a variance of 0.03 to 0.08 is acceptable on the QV ('true') index. I'm happy with that.
However, this means that you also cannot exclude (level of confidence is arbitrary in this context) the fact that true price appreciation is in fact in the range of -3% to -8%.
So, I really don't know what you are trying to argue here.
Statistically speaking your calculations just give as much weight to those arguments that state prices have dropped.
REINZ data backs you up. Auckland market prices (median) are 4.2% higher than when RVs were done in June 2017. nymad, no doubt about to chime in- “the median isn’t a perfect measure, therefore it is worthless!”
https://reinz.co.nz/Media/Default/Statistic%20Documents/2017/Residentia…
https://www.reinz.co.nz/Media/Default/Statistic%20Documents/2018/Reside…
Thanks BuyLowSellHigh!
That's cool BLSH.
But obviously you can't reject the hypothesis that there is zero price appreciation in the Auckland market over RV, based on median prices.
So, the point still stands.
ZS has no idea of the distribution of the index data, so has no way to address the comment that the true price appreciation has in fact been flat or negative.
Nobody claimed that the median data or sample of auction results are a perfect representation of what is going on. In fact, ZS's comments had plenty of disclaimers. You're just strawmanning.
Like if the weatherman said that the median daily high temp for November was 19 degrees and you get all incredulous and write him an angry letter saying "How can you possibly say that? You haven't told us what the variance is". Your hissy pissy letter wouldn't change the fact that the weather man was correct, the median high temp was in fact 19 degrees, and he didn't claim that the median was anything more than just the "middle number".
I love your analogy. Thanks. It shows you completely misunderstand the comment stream.
It further reinforces my point from the other day that you have a poor understanding of sample data and index comparison
Unlike temperatures which are comprehensively revealed by observational data, prices are based of arm length transactions only. Thus the weather sample data = population data; the moments are exactly the same. Only a fool would make the point of arguing about accuracy.
However, price estimates in the property market are revealed through the transacted properties only. Thus, there is no explicit assumption that sample data = population data. The assumptions we make for this are based on the CLT and they can't hold in the case of ZS's 100 a week sample.
ZS's point was that his estimates were remarkably accurate. Mine was that he couldn't possibly make that statement in any statistical sense.
Thanks again for another foolish comment, BLSH. No doubt you will reply with another banger comment.
ZS has access to the daily spot price with historical data for each and every house in the country. It's not something you're privy to so you'll just have to take the actual sales data and his word for it.
Because the RVs are effectively a benchmark!!!! I would imagine most vendors would sell at or above RV but choose not to sell at below RV, hence the RV statistic is going to be "remarkably accurate" when compared to sales stats.
I cannot cite any sources except for a bit of rational thought and logic.
Foul! We have standards around here, Rational thought and logic! pfft!, we'll have noone of that around here please.
There's a big difference between what houses are currently selling (which is how much one specific buyer thinks is worth) and how much they are really worth (which corresponds to the common perception). I am not talking about those crazy, needy or wealthy enough to buy something now but the majority's perception which are the ones that will rule market's direction long term.
https://www.oneroof.co.nz/news/35689/?ref=nzhhome
For each property type - apartments, houses and lifestyle property - values have either stalled or slipped in value. The median sales price for Auckland apartments has stalled in the last 12 months and now sits at $631,500 (up slightly from $630,000 last year) while houses dropped 2.79 percent to $890,000 and lifestyle properties 2.33 percent to $1,318,000
So, if I'm reading that right Akld house prices dropped 2.79% over the last year.....
This is an interesting paragraph too
Overall sales volumes dropped four percent on the same period last year. While the total dollar value of all properties sold in the 12 months to August 2018 looks impressive - $21,248,538,151 - it is down 13 percent on the same period the year before.
Foreign buyer ban
Tighter loan approvals from banks at 7% loan servicing
Rising overseas interest rates
Unaffordability 5-9 x income
Ringfencing of losses
Additional healthy housing requirements for landlords
OZ property market down
Threat of CGT
Rising inventory
Low auction clearance rates
OOPS I forgot Kiwibuild, added now
AND NEW ZEALAND HOUSE PRICES ARE STILL NOT GOING DOWN
I read your comment as if it's a list of ingredients to bake a cake. And if you know how to bake, you know that combining all the ingredients together does not INSTANTLY make a cake. Of course you have to put it in an oven, wait a while, under the right pressure and heat, and voila - CAKE TIME!!!
If you were expecting instant results then I don't know what to tell you. But thank you for listing all these ingredients as it tells me that something's definitely cooking.
Many appear to want to have their cake and eat it too....I want to be wealthy from expensive houses but I also want to provide affordable housing for my children....no conflict of interests...
Can't see the problem, the kids will just inherit the parents houses when the parents die. It's called looking after your family
What about the kids where the parents don't own a house? And if the rentals that the parents own are leveraged and still owing debt - who pays that? Or do all your kids (let says you have 3), who themselves have 3 children go and live with you when you are retired, so that you have 17 people living in a house? Don't really see a problem either....
RichMuhlach - That will have to be the comment of the day, LOL. I think Yvil will be like the gingerbread man running down the road for his life !!!
And if you mix all that together without taking time to bake it, it will be a big soggy mess otherwise.
RM, Sorry you got confused, it's not "a list of ingredients to bake a cake", they are items that relate to the housing market in NZ, just like this article does. QV stands for Quotable Value, they put a rough value on each house in NZ.
this has a got to be the lamest comeback I've ever read on this site, it doesn't even deserve a witty response
Even the All Blacks will eventually lose.
Funny - Ireland....stable housing market as well?
Yes and what about the plague a few centuries ago, wasn't that awful?
It's a great point to make, and I find it amusing how many people still don't get it. They are living in a fantasy land.
Thanks skudiv
I mean, are you happy about it?
I think it's absolutely terrible for young New Zealanders, especially ones from lower income backgrounds. What kinds of people want to live in a place where housing is severly unaffordable when compared with salaries? The country will be made up of people who can't make it overseas, and foreigners who can't get visas overseas and have to settle for here. How some people spin that as a net positive for the country is beyond me.
It's absolutely unequivocally incredible. This housing market is Number 1.
House prices won't go down while people can still take out and afford to service the mortgages. The bulk of the market is people buying and selling in the same market, the average house price could be $100 million and it wouldn't make much difference to them unless they needed bridging finance.
Invercargill, Dunedin, Whanganui, Palmerston North, Napier & Whangarei
Is the real estate market propped up by gang pads?
Invercargill recently had the mongrel mob move in, not sure what the situation is in Dunedin or Napier, but the rest of those towns are crawling with criminal organisations.
Driving through Te Rapa last week 2 Head Hunter bikers were escorting a Porsche Panamera into The Base. #CashBuyer
Hi saving4AUhouse,
Please note that there is no major gang (or crime) problem in Palmerston North.
By and large, it's a very safe city - with much to recommend.
Police call-outs per head of population are very low.
TTP
Please note that there is no major gang (or crime) problem in Palmerston North.
I'm actually still subscribed to the Palmerston North neighbourhood support mailing list. Here are some highlights from the past week:
There have been reports of a few people trying to entice young girls into cars in Palmerston North.
Indecent exposure in parks in and around the Esplanade and river increases at this time of year. If you become a victim of this, try to get a description of their face and shoes.
There have been seventeen burglaries reported this past week.
Police call-outs per head of population are very low.
No one calls for most crimes because they won't come. Extremely understaffed, especially since they shut down the station in Feilding.
Hi saving4AUhouse,
Sorry - but what you say above proves nothing. (Any locality in NZ can point to occasional evidence of untoward/illegal activity.)
Despite PN having a proportionately high percentage of tertiary-level students, there's relatively little crime/violence.
It's very much a family-oriented provincial city with great educational and sports/recreation facilities - and one where families feel (and are) safe.
TTP
Sorry - but what you say above proves nothing.
A bit like everything you say then.
Onwards and sidewards.
Were still in the annual spring/summer boom remember. Kinda feels like 2008 (denial), just before 2009 (fear) which is followed by capitulation. While accepting that Lehman was a clear trigger, the US stock market is in a downward trajectory by itself without that trigger. Will history reflect that Trump and or his trade war was the trigger?
Everytime I look at our house price index I can't help but think that house prices could well fall by 50%. The price growth 2000 onward looks completely irrational/unsustainable - even considering all of the supporting factos (interest rates, demographics etc).
The saying that a property is only worth what a buyer is willing to pay is not true. A property is worth what the bank is willing to loan the buyer.
Between 2012 and 2016 the banks were willing to loan a lot which resulted in buyers being able to pay a lot and subsequently house prices inflated.
Great point, it is good to not to forget that how much a given asset is worth is not how much one single person with very specific circumstances would be willing to pay for it but how much the majority thinks that asset is actually worth. All figures that are usually published refer to the former, it'd be of great interest to see figures of housing value perception across the NZ population.
Its worth what the buyer is willing to pay.. and can raise funds for. Without either half of the equation there is no sale.
OK then. Given all this, if you were a first-time buyer would you buy now in Auckland?
Not a madly expensive grammar-zone place, just a standard suburban home close to CV.
It's easy to talk about a correction or whatever but supply is still waaay behind demand. There could be a recession, but they last a few years whereas mortgages are 20-30. Prices are flat but high. Would you rather be paying rent and getting no equity or actually get in the market?
OK then. Given all this, if you were a first-time buyer would you buy now in Auckland?
Not a madly expensive grammar-zone place, just a standard suburban home close to CV.
Why would any professional who values their career buy in Auckland, over Melbourne (a much larger city with higher wages)?
No one has been able to answer this properly for me, just some lame jokes about spiders and australians being dicks, etc.
A coworker of mine would like to leave but he's divorced and if he did he'd never see his kids.
Biggest reason for most is family & friends. And fear of the unknown would be the other factor. Some people are too scared to make the jump.
My answer would be to go check how much interest you'd be paying to the bank for a 30 year mortgage on 500K (or choose your number) at 5% interest and you'll see you'd end up paying twice as much as you borrowed.
To counter this, say you're paying rent at $600 per week. multiply that by 30 years and you get $936,000, and that's not even factoring in rent increases.
That $$466k in interest doesn't look so bad when you own the house at the end of it.
People often overlook property as a store of wealth. When you hit retirement you can sell up your mortgage free home and go renting with a good amount of cash. Try that after a life time of renting.
Depends on the numbers. A $600/week rental in Auckland (anywhere that isn't a shithole suburb) is typically worth close to a million dollars. The difference between the rent and the mortgage payments + insurance rates, maintainance etc over 30years put into investments returning a few percent after tax adds up quite a lot too.
Which make more financial sense all depends how much capital gain there is going to be on the house over the years vs investment returns. Right now in Auckland renting makes sense. It won't stay that way for ever, but the next few years until rent increases outstrip the extra costs of owning (insurance, rates, maintenance and lack of capital gains. Of course there are non-financial reasons why buying might be better for many.
That’s true. In our case buying in the Wairarapa our mortgage rates and insurance combined are 15 - 20% less than what you can rent the equivalent property around the road for. We did buy well though.
Leading with "hotspots such as Invercargill, Dunedin, Whanganui, Palmerston North, Napier & Whangarei" is a bit like media in Australia saying how great Hobart is doing great while the much bigger markets of Melbourne and Sydney are tanking. Not saying Auckland is tanking yet, but a lot of people seem to need a constant reality check about how out of whack this market is in world terms. I just will not be sustained. The average price in Los Angeles is $US698K, which is getting expensive again. In NZ, banks are still lending at really high price to income ratios, and the RBNZ has just loosened restrictions a bit! RBNZ all but admitted they now have to keep the market propped up (with first home buyers), or it risks doing serious damage to the economy. Unsustainable to say the least.
This is correct the only reason why the crash hasn't gotten underway is that RBNZ has intervened in the market. RBA and the banks are in a different position and prices will keep falling where the prices went completely crazy. At this point it would be safe to say Australia is in a worse position that New Zealand. We still have risks to financial stability, and one of those risks is the Australian banks.
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.