It's probably just as well the Government decided not to introduce a capital gains tax because the latest data from Quotable Value (QV) shows property values declining in Auckland and value growth slowing in much of the rest of the country.
Which means that by the time a CGT might have been introduced there'd be a good chance there would be no capital gains to tax anyway.
According to QV the average residential property value in Auckland fell for the fifth month in a row to $1,033,583 in April, meaning the average value in the Auckland region is now 1.5% lower than it was in April last year.
And the decline is region wide, with average values down compared to a year ago in almost all major Auckland districts, with the only exceptions being Franklin on Auckland's southern boundary where the average value in April was unchanged compared to a year ago, and Manukau north west, where the average value was up 0.7% compared to as year ago. But even there values appear to have started declining with the average value down 0.3% over the last three months.
The areas with the biggest declines were North Harbour -5.7% and Coastal North Shore -3.3%.
However although the decline in values in Auckland appears to be widespread and sustained, it is a slow but steady decline rather than a hard and fast fall.
Around the rest of the country average property values are continuing to rise in most centres, however the rate at which they are rising is slowing in many places
For example the Whangarei, the average property value was $542,715 in April, which was up 5.0% compared to 12 months ago.
But that annual growth rate was down from 5.5% in March, 6.1% in February and 10.1% in January, suggesting a cooling market even though values are still ahead of where they were a year ago.
Other centres that are still showing growth in average values, but where the the annual growth rate was down in April compared to March, suggesting a slight cooling in the market, include Hastings, Napier, New Plymouth, Wellington region, Nelson, Queenstown Lakes and Dunedin.
In Christchurch the market is almost flat, with average values up 1.3% compared to a year ago, but up just 0.1% compared to three months ago.
And average values in April were down compared three months ago in Selwyn and Ashburton and unchanged in Hurunui and Waimakariri.
"New Zealand's annual rate of value growth dropped from 7.6% in April last year to 2.7% last month, while the key market of Auckland continues to see a reduction in value levels," QV said in its commentary on the figures.
The table below shows the average values for all main districts throughout the country and the changes compared to three months and six months earlier.
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| QV House Price Index April 2019 | |||
| Territorial authority | Average current value $ |
12 month change % |
3 month change % |
| Auckland region | 1,033,583 | -1.5% | -1.2% |
| Wellington region | 706,123 | 8.2% | 1.8% |
| Total New Zealand | 686,975 | 2.7% | 0.4% |
| Far North | 446,668 | 4.2% | 4.3% |
| Whangarei | 542,715 | 5.0% | -3.3% |
| Kaipara | 535,781 | 1.6% | -3.8% |
| Auckland - Rodney | 943,272 | -1.2% | -1.7% |
| Rodney - Hibiscus Coast | 916,977 | -1.9% | -1.7% |
| Rodney - North | 969,121 | -0.7% | -1.8% |
| Auckland - North Shore | 1,189,915 | -3.1% | -1.0% |
| North Shore - Coastal | 1,363,626 | -3.3% | 0.0% |
| North Shore - Onewa | 957,639 | -0.9% | -1.1% |
| North Shore - North Harbour | 1,144,335 | -5.7% | -3.9% |
| Auckland - Waitakere | 817,065 | -0.6% | -0.3% |
| Auckland - City | 1,216,153 | -1.3% | -1.4% |
| Auckland City - Central | 1,070,844 | -1.4% | -1.1% |
| Auckland_City - East | 1,534,300 | -0.9% | -1.5% |
| Auckland City - South | 1,075,932 | -1.4% | -1.5% |
| Auckland City - Islands | 1,127,396 | -0.9% | -3.4% |
| Auckland - Manukau | 894,560 | -0.5% | -1.0% |
| Manukau - East | 1,134,082 | -1.6% | -1.2% |
| Manukau - Central | 696,245 | -0.1% | -1.3% |
| Manukau - North West | 783,214 | 0.7% | -0.3% |
| Auckland - Papakura | 695,181 | -0.9% | -0.1% |
| Auckland - Franklin | 671,078 | 0.0% | 0.1% |
| Thames Coromandel | 762,007 | 4.3% | 2.1% |
| Hauraki | 415,076 | 1.5% | -1.8% |
| Waikato | 488,457 | 1.9% | -0.2% |
| Matamata Piako | 481,559 | 7.4% | 2.9% |
| Hamilton | 585,579 | 5.1% | 1.4% |
| Hamilton - North East | 728,384 | 3.6% | 0.6% |
| Hamilton - Central & North West | 540,388 | 4.4% | 1.4% |
| Hamilton - South East | 543,134 | 7.3% | 2.1% |
| Hamilton - South West | 519,968 | 5.1% | 1.3% |
| Waipa | 575,762 | 6.7% | 1.5% |
| South Waikato | 256,807 | 14.3% | 0.0% |
| Waitomo | 228,409 | 10.1% | 5.0% |
| Taupo | 524,666 | 10.2% | 2.3% |
| Western BOP | 655,088 | 4.3% | 0.6% |
| Tauranga | 740,222 | 5.1% | 2.5% |
| Rotorua | 478,822 | 13.7% | 7.6% |
| Whakatane | 479,479 | 10.7% | 3.5% |
| Kawerau | 250,975 | 23.3% | 2.7% |
| Opotiki | 320,656 | 2.5% | -6.7% |
| Gisborne | 351,818 | 13.9% | 8.7% |
| Wairoa | 197,735 | 10.9% | -4.3% |
| Hastings | 510,811 | 11.8% | 1.2% |
| Napier | 555,700 | 10.6% | 3.2% |
| Central Hawkes Bay | 389,529 | 19.9% | 5.9% |
| New Plymouth | 464,386 | 3.8% | 1.3% |
| Stratford | 277,870 | 6.0% | 1.6% |
| South Taranaki | 240,012 | 8.2% | 1.2% |
| Ruapehu | 215,106 | 16.6% | 3.1% |
| Whanganui | 276,853 | 12.1% | 1.1% |
| Rangitikei | 229,987 | 14.4% | 6.3% |
| Manawatu | 380,325 | 12.9% | 3.9% |
| Palmerston North | 438,838 | 14.4% | 2.2% |
| Tararua | 230,915 | 20.1% | 2.6% |
| Horowhenua | 367,858 | 18.3% | 8.0% |
| Kapiti Coast | 595,835 | 7.3% | 2.5% |
| Porirua | 597,337 | 7.8% | 2.0% |
| Upper Hutt | 548,786 | 13.0% | 3.0% |
| Lower Hutt | 580,322 | 8.6% | 1.7% |
| Wellington City | 831,614 | 7.5% | 1.7% |
| Wellington - Central & South | 828,331 | 8.1% | 2.1% |
| Wellington - East | 887,278 | 6.9% | 1.4% |
| Wellington - North | 762,309 | 9.3% | 2.1% |
| Wellington - West | 937,112 | 4.2% | 0.3% |
| Masterton | 380,864 | 12.2% | 1.4% |
| Carterton | 434,387 | 12.3% | 4.4% |
| South Wairarapa | 511,664 | 8.0% | 0.2% |
| Tasman | 598,246 | 5.4% | 1.0% |
| Nelson | 621,408 | 8.7% | 1.9% |
| Marlborough | 480,112 | 3.7% | 1.5% |
| Kaikoura | 434,286 | -1.6% | 2.0% |
| Buller | 188,272 | 5.2% | -4.5% |
| Grey | 217,810 | 2.8% | 3.8% |
| Westland | 256,109 | 4.8% | 3.9% |
| Hurunui | 390,430 | 1.1% | 0.0% |
| Waimakariri | 448,320 | 1.5% | 0.0% |
| Christchurch | 498,105 | 1.3% | 0.1% |
| Christchurch - East | 376,548 | 2.4% | 0.0% |
| Christchurch - Hills | 689,160 | 4.6% | 2.0% |
| Christchurch - Central & North | 587,683 | 1.7% | 0.5% |
| Christchurch - Southwest | 471,500 | -0.8% | -0.3% |
| Christchurch - Banks Peninsula | 507,330 | 0.1% | -3.9% |
| Selwyn | 553,626 | 0.7% | -0.2% |
| Ashburton | 354,565 | 0.7% | -0.8% |
| Timaru | 372,099 | 4.7% | 2.0% |
| MacKenzie | 515,346 | 1.0% | -0.3% |
| Waimate | 245,555 | 3.3% | 0.7% |
| Waitaki | 321,028 | 5.6% | 3.7% |
| Central Otago | 516,062 | 5.5% | 1.0% |
| Queenstown Lakes | 1,194,045 | 3.3% | -0.6% |
| Dunedin | 457,530 | 13.0% | 4.9% |
| Dunedin - Central & North | 473,988 | 12.5% | 5.0% |
| Dunedin - Peninsular & Coastal | 411,862 | 10.6% | 3.7% |
| Dunedin - South | 444,017 | 15.4% | 7.4% |
| Dunedin - Taieri | 471,967 | 13.0% | 3.5% |
| Clutha | 231,284 | 9.0% | 7.4% |
| Southland | 314,303 | 11.3% | 7.0% |
| Gore | 232,525 | 4.4% | -3.1% |
| Invercargill | 294,328 | 11.5% | 2.8% |
| Main Urban Areas | 791,931 | 1.6% | 0.0% |
101 Comments
I wonder how many specuvesters have yet to factor in the end of negative gearing to fully appreciate what a dark place they are heading to?
Just do what every single other land lord is doing - increase the rents and pass the cost to the tenant.
You really think there is any capacity to pay more? I doubt it and any increases will just speed up a download spiral for the rest of the real economy. That's not go to save the specuvesters.
Hi Rastus
"You really think there is any capacity to pay more?"
Do you really think landlords have the capacity to sustain rents at current levels when yields remain at 4% (interest.co.nz), and that is less the increasing compliance costs, increasing rates, and increasing insurance, ring fencing losses, and with little prospect of capital gains to offset this.
If you are a renter; welcome to the real world.
I posted some months back; increasing rents will be the coming "housing affordability" issue.
P.S. Rent increases resulting in a "download (sic) spiral for the rest of the real economy" is not a landlord's primary concern.
You PS comment shows how ignorant you are to economics beyond the property ponzi. Good luck with the maths.
Hi Rastus
Careful who you are calling ignorant when it comes to economics. Surely a Masters in Economics is a little more than guessing the multichoice questions.
You just keep renting paying off the house for your landlord while having the misplaced hope that there is no rent increase.
Cheers :)
I have never said I rent. I am never disclosed or hinted at my net worth in any detail here (as far as I recall), but to put you right, I own.
I refrain from posting personal financial info, as people like yourself pass judgement based on such - a reflection of your weak personal values. Such is your ignorance.
Have a happy day.
Cheers
I am with Rastus on this one. If landlords could put up rentals they would. A common myth (read con-job) by property investor groups is that higher compliance costs result in higher rentals. The linkage as more complex than that. In reality many landlords were speculating on further capital gains, and will find prices falling.
Landlords I know have got below market rents which they can afford to keep low. There are other landlords who arent as well off and will increase rents where and when possible, not just when a tenant moves. We will be advertising a flat to rent soon
Houseworks, why do you have such a high turnover in your rental? Have you tried reducing your rent? Reading between the lines it appears a property manager is no longer part of the equation either. Are you cutting costs?
Is that your misjudged impression? Maybe we just have lots and lots of rentals
...and your business partner is Ron Fong.
He is twice the man you are
Ideally the government would also stop handouts to property investors in the form of the Accommodation Supplement, Working for Families and the First Home Buyers grant. Speculators should be able to stand on their own two feet without welfare subsidies.
Higher rents just modify renters behaviour. I'm on a good wicket, but I'm just going to keep flatting. Can rent a room for $200 a week all in even in central Auckland. I'd rent my own place but the rents are too high. There is elasticity in the demand.
The competitive advantage goes to the landlords who are positively geared and can maintain lower rents. I suspect they will be able to maintain long term renters while the overall turnover in renters will probably increase.
A lot of places rented in Akld are now overcrowded (you only have to look at the houses with 6-10 cars in the driveway and spilling onto the grass) you can expect this to intensify which of course increases the wear and tear and general deterioration of a rental property. Landlords who ignore this can find increasing maintenance costs.
Interesting times when it becomes a falling market, and clearly the worm has turned
summed up nicely.
You have hit the nail on the head. Overcrowding is a direct result of increased costs across the board.
The landlord can't afford to absorb the costs. So increases the rent.
The tenant can't afford to pay the rent. So increases the number of occupants.
Ask any student, OE traveller, or group booking an Air B&B. They all know that if they want to lower the individual costs, then they need to spread it across more people.
Regarding the maintenance costs, they usually just let the place go.
There has always been a pecking order in rentals.
Nice newly renovated place owner/occupied.
After a while it would be rented to a professional couple.
Then after some minor wear and tear to an older family
A bit more wear and tear, a young family.
More wear and tear, but a lick of paint and in come the young professionals
After a good life it ends up with domestic students (singles flat, then a couple is usually added, then it is all couples)
Then once it is destroyed, international students.
After that it is torn down and rebuilt by a wealthy older couple and the cycle repeats.
Sounds like London a few years back, great house parties though, before popping off to the pub and inviting everyone back. Party at Houseworks.
Yeehaa, go swapacrate. If we rented to thick as a brick local males or other tenants from hell who never grow up we would probably have those problems. But as it happens we seldom have any issues which makes for a peaceful nights sleep and a viable investment... Yeehaa
Just do what every single other land lord is doing - increase the rents and pass the cost to the tenant.
Garbage. Households run on income constraints. Increasing rents means less spent into the consumer economy, which means less economic activity. This ultimately feeds back into household incomes and the ability to pay higher rents. Think laterally.
People demand more pay and an increase in benefits which then pushes up prices and costs so people demand more again. Labour govts are great for property investors when they splash the (taxpayers) cash
Houseworks, you do know that there has been a sustained period of little to zero wage growth in New Zealand? How does one "demand more pay" from an employer if that employer knows there's probably no higher pay elsewhere? People on this forum sometimes forget what it's like in the real world. "I'd demand this" and "I'd just do that", but the reality is you can't just name your price to your employer, it doesn't work that way in most workplaces in New Zealand.
This slow (steady) decline increases the likelihood it will be a loooong decline. It could easily last 8-10 more years. This will test the patience of the highly leveraged. It will draw out more and more sellers against fewer more patient buyers (particularly in the top end). This is a new normal folks and for the rearview obsessed, a very unpleasant one. In the lower quartile, its sad that many first time buyers are so naive as to commit now rather than wait this out. They are being lectured to by unskilled one hit wonders. Much like an introduction to a pyramid scheme.
I note that Retired-Poppy (above) finally concedes there will be no crash.
The long crusade of “Crash Crusader” has finally drawn to a close.
TTP
Agent TTP, as you already know, I've always posted that, subject to there being no GFC2, this could easily last 8-10 more years. Either scenario, Auckland's overall median price decline could easily reach an overall 30-40%! Crash aside, I take it you can't come up with a solid counter argument to the 8-10 year downward adjustment forecast? That's certainly a change! You, BLSH and Houseworks are already on record as forecasting an "upswing" as soon as 2021!
Hi Retired Poppy
Next spring will be the telling time. We can expect a seasonal decline over the next four months or so, but September through to November will be the telling time as to the future of the market.
There is seemingly some acceptance now that rather than a sudden bubble burst/significant correction, we may be looking a a slowly leaking balloon. This is most likely over the winter period at least, while you predict this will last 8 to 10 years. A brave statement to forecast property trends so far out - I don't know of any commentators prepared to make predictions over such a term.
Bottom line, you have been advising FHB for some time to wait for the market to bottom out. But put thier lives on hold by waiting 8 to 10 years for this to happen???
P8, it's a shallow and grim assessment to suggest hard saving FHB have their life on hold by waiting patiently. They have a much brighter future by not bailing out the fleeing speculator. Anyway, the research has already been done by interest.co. It's presently cheaper to rent! https://www.interest.co.nz/property/rent-or-buy
Try and be more forward in your thinking. Best not encourage others to commit financial suicide in the great sea of over valuation. Anyway, only 3-1/2 hours flight away, prices have already declined by 15%. Average Sydney house about to go sub one million. Auckland's looking more vulnerable than ever.
Yes, trends in Australia are worthy of note and falls in Melbourne and Sydney will create some apprehension and consequently some downward pressure particularly in the Auckland market.
However there are very significant differences between Australia and New Zealand situation.
- An important driver in the Auckland market is immigration - while Australia has a cap of 190,000 immigrants a year, our current levels of 60,000 are proportionally far higher and more concentrated seemingly to one city only.
- The New Zealand economy continues to seem to be fearing better than Australia's. and
- There seems to have been looser bank lending (especially interest only) lending in Australia in the past and this is likely to be coming back to haunt speculators there, and
- I think that the RBNZ is being effective and having a positive impact on ensuring a stable NZ housing market for economic stability reasons.
I think it more important that we do consider what is happening in Australia, but more-so look more closely at the NZ market and avoid fear mongering over events in Australia.
Of course, significant external events could well change all of this for the NZ market but one can't put everything on hold because of fear of the unknown.
I can sum up in few words for you, yep we are duffurent!
Did you cut an paste this from Tony Alexander's weekly newsletter?
Mining projects in Australia are starting to fire up again, with many contracts already signed and an uptake of local Australian labour already starting. There was a lot of Kiwis that brought their money back to NZ and bought a house before the boom, but there are also many skilled workers who are waiting to go back to Australia because the standard and cost of living is better in Australia. I have a close friend who runs an international removal company and he said a high number of Kiwis he moved home have gone back, or plan to go back, because NZ is too expensive. The highest number of people moving across the ditch have been going in an easterly direction for a couple of years, and this will change back to the west soon.
One other thing both NZ and Australia share that rarely gets mentioned is a sustained period of low wage growth. The mining boom in Australia let to a need for industries to raise wages to attract workers, as large numbers moved into the hi-vis workwear for better wages. Once they all got laid off and went home they have had to get whatever job is available and that has led to a stagnation in wage growth.
My point is that in both Australia and NZ, people can only afford so much in regards to house prices. In the past you could tighten your belt for a couple of years with the knowledge that you'll get a raise in a year or two, but that hasn't happened for a while, or any raises that do happen have been swallowed up by other things like higher fuel cost or higher electricity costs, especially in Australia.
People are maxed out, they can't afford any more. The market will have to meet whatever the buyer is willing to pay. The market won't crash without overseas instability, but it won't get better until people have more money in their pocket each week.
RP has a consistent history of wrong predictions, just look at his 2018 New Years predictions, far, far off the mark
Here's the cavalry :) Yvil, what was your state of mind when you posted this gloomy prediction?
by Yvil | 4th May 18, 1:36pm "So be brave and let the great depression happen, it's the purge the whole system needed. It's much better than the long slow downward spiral we're on now, which will still lead to a depression"
I'm hardly forecasting a depression. I certainly hope there isn't another one.
Go figure. When interest.co called for fresh predictions in New Year 2019, guess who was conveniently absent with theirs - Yvil, Agent Tothepoint and Houseworks. Speaks volumes!
Perhaps its fear of karma.
In the first 5 months of the Australian property price drops, commentators were suggesting that it would be a slow and steady deflation as well. Then look what happened. https://www.macrobusiness.com.au/wp-content/uploads/2019/04/Capture-283…
Agreed RP. It’s actually immoral that people without any real life experience are being manipulated and cajoled by those that are relying on the massive debt-for-equity swap to get them out of it. The press have not really helped in this, so voices like yours are invaluable to try and provide some attempt at balance. It is a ridiculous situation and right now it is incredibly risky for the young. There are a generation of people in many countries who will never recover from the one, simply made mistake of signing a mortgage agreement in an environment where credit availability was neither understood or regulated properly and suffered enormously when credit growth changed. Aussie household credit growth has now fallen to an annualised 4% year on year, so more price falls ahead over the ditch. Our household credit growth still grows at over 6% as more of our young are sacrificed.
Well done for your efforts RP
Joe, voices like yours are also invaluable in warning of the situation we are facing in NZ, after seeing similar in Europe over the past decade. Thanks for that, much appreciated, especially your vids.
I had a real estate agent tell me the other day that I was going to get "buyers regret" because we weren't interested in buying a couple of properties that she had found for us. She had been nice as pie for a few months leading up to this. I suggested to her that I wasn't going to buy anything until we found a place that fitted our needs at the right price, and I told her we're more than happy to wait a few months for the right property because the longer we stay where we are the more money we can save. Basically she is getting upset because she is being made to work for her money.
One of those properties was worth about 830-850. There was one bidder at the auction. This young couple were bidding against the auctioneers vendor bids up to 850K. The agents then got them into the room and got them to sign for 900K. Why anyone would sign for 50K more than reserve after you've just bidded against nobody in the auction room astounded me. A young couple with an extra 50 grand on their mortgage for the next 30 years because of sales tactics.
Just oscillations guys.
Dunedin is doing exceptionally well.
Hi Nzdan,
In fact, landlords / property investors are doing very nicely, as rents continue to rise and interest rates continue to fall.
Not surprisingly, first home buyers are barrelling into the market - wisely ignoring the noises made by the DGM......
Have a good day!
TTP
You guys, sure "landlords / property investors are doing very nicely" right now in places that haven't seen much appreciation in quite a long time, as happened in Australia. But as the overall NZ market follows Auckland's deflating bubble, they are likely to get hit hard. Chasing capital gains and rising rents in regional places at the end of a bubble is not a great idea. Rents are rising and Interest rates are continuing to fall, but that's very unlikely be the situation over the medium to long term. Places such as Queenstown and Wanaka are different long term, as they are tourist hot spots and will be going forward, but they'll take a big hit as the bubble deflates as well. Cheap (compared to now) property in those places at some stage, not now, would be on my list.
Itsy bitsy little gully right now..
But Ted said that everything would get better after Chinese New Year, a couple of Chinese New Years ago. It looks like the peak was probably more like 2016. I will have to start going through the Trademe data again but I'm expecting larger losses being realised when houses have been owned short term to satisfy the bright line test.
People shouldn't worry about Auckland, instead they should just move to where the cost of living is cheaper.
I note that the Christchurch market has not declined over the last year, despite some saying that it has!
Reality is that Christchurch is a fantastic market to invest in!
Buy right, positive returns and future upside.
TM2, most commentators have no experience in property investment (why they comment is beyond me), they think that property investment is buying a house and then waiting for values to go up, lol.
What I've been seeing on the ground in Christchurch is there a lot of the older rentals have competition from new build or near new rentals. It's putting pressure on the amount that can be charged for rent.
No doubt there are plenty of opportunities in Christchurch now that the contractors have left and construction has tapered off. For many Christchurch would be a better option than Auckland.
Nah forget CHCH, buy Tokoroa, returns is almost 10-12% and guarantee by NZ Govt.
What does the return drop to after the annual meth regibbing?
Pfft. You guys.
You just need to read more of the Herald. They are premium enough to have a paywall, ya know.
https://www.nzherald.co.nz/property/news/article.cfm?c_id=8&objectid=12…
They must serve their masters!
I was expecting to see a paywall, but I guess that doesn't apply to sponsored articles paid for by RE agents.
Nah, don't worry.
You can be sure we will still have access to the latest property spruiking articles and Mike Hosking rants.
Would've been interesting if they were behind the paywall.. get to see who the really daft people are.. not only do they read that rubbish, but willing to pay for it.
Comparing Sydney to the whole of NZ, instead of Auckland. Nice one, Herald, I stopped reading after that.
Let's put it into perspective. If we extrapolate (that's what we do with property isn't it?) a 1.2% fall in Auckland in 3 months = 3.6% 4.71% in 12 months?
Continued 1.2% quarterly declines from a current start point of $1,033,583?
After 5 years, the average Auckland house price would be $811,865.
After 10 years, $637,709.
But property prices in Auckland cannot and will not go down for an extended period of time.
No, Dan.
The extrapolation of a price function in NZ property is strictly non negative.
May it be so.
That $637,709 is the rational price when you look at global equivalents.
NZ Dan, "If we extrapolate... a 1.2% fall in Auckland in 3 months = 3.6% in 12 months?"
My year has 12 months rather than 9 ; )
PS, by that logic you better rush in to buy in Gisborne, 8.7% in 3 months "extrapolates" into 34.8% gain per annum, what a killing lol
Ah yes my bad I was 1 row shy on the spreadsheet, it's 4.71%.
Nzdan, um, why? "property prices in Auckland cannot and will not go down for an extended period of time". That's a classic thing to say in a bubble. It may not be 10 years, but for 5 years or so, certainly they could. Prices have been dropping in Sydney at about 1% a month over the past year by the way.
A bit of Piet Mondrian in the photo of the house ; )
That would explain why it's "worth" a million dollars! (probably)
Just more bad news for the Auckland market going into winter.
I expect the declines to accelerate, Akld could be down 5-10% by the end of the year.
Bad news? This is great news, it gives hope to a lot of potential FHBs like me.
Some suburbs are already down 25%. I think a 5% total fall is very, very optimistic.
Parnell & Remuera sales by Bayleys for Jan, Feb & March
2018 148 sales avg price $1.73 M
2019 114 sales avg price $1.60 M = values down by 7.6%
Avg sale price to CV in 2019, exactly 1.0 (so same as CV)
No mention of the massive median price changes in some of our leafy suburbs.. even ‘The Herald’ broke ranks on that one last week, albeit they may have got a slap on the wrist from their masters afterwards. Median selling price is now over 30% down in Mount Albert. So no present need for a Capital Gains tax in Jacinda’s location. Go on Greg, cut loose and have some fun, there are some major news headlines out there, that are worth the time and effort of a good investigative journalist.
"Median selling price is now over 30% down in Mount Albert."
That is a useless metric. The only takeaway from that sensationalist article was the fact that sales numbers have fallen off a cliff. You can't compare medians/averages when quite clearly the distributions of sales between periods are substantially different.
Good on Greg for not wasting his time on covering those sort of headlines.
Also some of the results were laughable, Royal Oak down some large number, while adjoining Onehunga was rocketing up. There is no geographical barrier, nor significant zoning type difference in term of schools etc, so its laughable that two very similar areas went so far in different directions.
And if sale volumes have fallen off a cliff, nymad, what does that tell us? What's a house that doesn't sell actually worth? I think that the former Governor of the bank of England Mervyn King got it right when he said "House prices are a matter of opinion, debt is real." And the sales figures show that the underlying opinion is that houses are worth less than the owners think.
BTW Meryyn Kings book "The End of Alchemy" is a great read and I suggest everyone on this site should read it!
Does it have pictures :).
You make a good point that composition problems (how many apartments/townhouses/free standing-houses in each sample etc) make single-suburb figures hard to compare over time.
Matched pairs (where the same house has been sold again) and bigger samples (as in QV's figures above) are probably better ways to get a real feel for the trends.
How likely is it that the type of housing in areas like Remuera have changed dramatically overnight? Have hundreds of one bedroom dog boxes suddenly been built in the last few months and are now on the market, thus lowering the "median price"? Have huge numbers of family homes been converted into public housing bedsits? I highly doubt that the composition of housing in established suburbs is any different today than it was 6 or 12 months ago, or even several years ago. So if you believed that median prices went up in those areas, with the exact same type of housing selling, then you have to believe that they are going down with the exact same type of housing selling.
Low sales volumes really muddy the average and median.
Really the HPI is the best statistical data albeit a bit delayed
In saying that though the % of homes selling under RV is increasing fast in Akld which is a sign of what is happeing ATM
I would like to see this site do a deep dive into some of the data from these areas in Auckland hardest hit so far.
That comment clearly shows your bias, interested only in "the areas of Auckland hardest hit".
If you look long enough, you can probably find one house that sold for 50% less than it was previously bought for.
Hey, I'm not against reporting on areas that are doing the best either, but that's the usual bias that goes on in the media. And the hardest hit areas usually have the angle, "bargains to be found for FHBs in these areas" etc (along with ads for bank loans and RE agents).
What's interesting is the bursting of the Sydney and Melbourne markets started at the high end, so it's very relevant to the overall market situation.
Good point. NZ media tends to be very supportive of house prices staying high, and take a more positive approach than Australian media. As soon as it cooled in Sydney the media went hard at the data, which no doubt adds fuel to the downturn.
Everyone talks landlord/ inversters...
There has been a lot of discussion in the past of Jaffers cashing up and moving to places like Rotorua, Taupo, Coro, Matamata.
Having sold at Auckland around top of the peak..and brought in these places while still rising..
Now if baby boomer retirees.. no doubt the anti BB crowd will be anti them...yet they are are a lot of of young families doing the same. Looking around our new area having cashed up mid last yr, there are far more families, young , and around pre/ young teenage that have done so.
I note same. My question is what will these people do in the provinces once the ponzi housing workload comes to an end. These provincial cities died due to lack of work. The 'new' work has been created by their arrival. The work will go out like the tide as the credit dries up......
https://www.brisbanetimes.com.au/business/the-economy/millionaires-are-…
Basically buy now and you can make quick bucks, soon will be spread across the ditch.
Yes but NZ accent is more sexy and appealing than the aussie twang. Which probably helps to explain a few things .... :)
Kiwi accent rated 'sexiest' in the world:
https://www.nzherald.co.nz/lifestyle/news/article.cfm?c_id=6&objectid=1…
Millionaires.. , so that means they have a net worth that can almost buy a house in decent suburb in Sydney?
Let me give you all some real world insights. Just bought a new build in Auckland from a cash strapped builder for $100k below asking, which was already below CV.
The decline is gaining momentum!!
The formal terminology we use to describe that is: ouch.
From the GFC I had builders tell me about their experiences. The pressure from the banks to complete the build and sell is intense. How people feel about this is the same as those who are hounded by debt collectors.
Question: how did it have a relevant CV/RV if it was a new build? I thought they only got updated every 4 years?
Bingo!
They key word there is "updated." Councils will do a new valuation on a new build when it is completed in order to set the rates on it. It will then be updated with all the other properties in the same area as part the regular 3 year cycle.
Okay, so the data on homes.co.nz is a bit hit and miss then. Several new builds that are on the market and when you look on homes its obvious the RV they have is only for the section, or in some cases it looks like the the RV is for the old house and section pre-subdivision. Or possibly council just being as fast and efficient as they are renown for.
may i ask which area?
What area? We tried an offer 100k below but seller came back with a counter offer 100k higher than what the agent indicated. Listing says "desperate vendor wants to sell" and building on the 3rd property has stopped due to lack of funds - guess he wasn't that desperate.
In contrast to buying, you can't borrow for rent, which puts a ceiling on rent increases, which is partly why rents have trailed house price rises by a long way. Fine when you're getting the capital gains, but when prices are stagnating or falling on a highly leveraged house rent hikes are like flogging a dead horse.
A good point that's often missed by those who think renters will be able to prop up the market.
If you can't afford rent, you get more flatmates. Or move back in with your parents. Or live in a Honda Odyssey parked up in a reserve. The bank won't lend you money for the rent. Not even if you tell them "my landlord really needs it!"
There is elasticity in demand, it's just elasticity with unpleasant social consequences.
What are gross yields running at currently for rentals? 4%? How many landlords would say no to gross yields of 8%? Surely all they need to do is double the rent and voila 8% gross.
Its officially a Crash. Just moving myself into position to catch a falling knife in my mouth. If you never hear from me again it ended really, really, really badly. Love Carl.
Carlos67
From memory, you sold your place a few of years ago
Just out of interest,
1) what is the current indicated valuation on homes.co.nz on that property you previously owned and
2) what has been the percentage change since you sold?
3) over what time period has that price fallen?
I not prepared to answer that here. There were very special circumstances. Sufficient to say it was Monoclad, and even though it was not a leaky home you pretty much cannot give them away these days. The banks will no longer lend on Monoclad homes, so there goes a massive percentage of your buyers straight away. That combined with the falling market I would have taken a huge hit.
Sounds like a lot of gobbledegook to say landlords will put up rents to cover increased cost !!! Aren't they already gouging the maximum they can get? Unless of course the landlord is a charity with noble intentions to provide a home at rates subsidised from their own pocket. Wonder whether it would be good idea to nominate them for knighthood!!
It would be a very good idea - sir Landlord at your service sir
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