Trademe listings have doubled here in southern waikato, prices have steadily dropped for 18 months

I failed to mention, not much selling. And its already cheap here , ie a good house and 5 - 10 acres and your asking price is 350k and dropping. In town, 160k.

For what its worth, given that I and many here don't rate bank economists, here is Westpac's take on the tax reforms on house prices:

"We estimate the tax reforms would reduce the value of housing by around 10%, with
most of the impact coming from the drop in the top income tax rate. This is not the
same as forecasting that prices will fall by 10%: as we saw in the 2007-08 downturn,
prices tend to be stickier on the downside, as most owners will avoid selling into a
falling market. Most of the hit would come through lower turnover, and flat prices for
a few years until incomes and rents catch up."

Flat prices for a few years means significant potential drops in real house values
sob sob

Interesting stats from Bernard. I'm not sure we can read too much into them though. The "desperate sellers" are not necessarily desperate, some of them might be, but I suspect its largely just a marketing technique which becomes more apparent in a harder seller's market like we have now

I just hope I am wrong in expecting the govt to flood the place with migrants from anywhere in a pre election effort to create a little action.

When I'm scanning property on TradeMe now , it is so easily obvious by the pricing as to which sellers are facing reality , and which ones are still dreaming .

AndrewJ, neighbour just listed. 6mil for 480 cow farm, hilly, summer dry, herringbone. Dreaming. Asking price is more than twice what it sold for in 2004 or 5. Another one 9mil (neighbour), asking price 3 times what it sold for in 2003 or 4. Been on market 2 years.
A whole lotta reality gotta flood the market sooner or later now that the farms have flooded it.
When is the question, when will the true position become obvious.
Like I said in different thread, wouldnt mind moving myself, but its just too crazy out there.

St. Nick : If someone was smart enough to amass the $ 4m. in the first instance , why would they suddenly suffer brain-fade and biff it all into a dairy farm ?

Maybe someone can enlighten me as to net profit from a hypothetical $4m. farm .

Thankyou Farmer Will : Clearly I have been in the city too long . I assumed that " profit " was a motivational factor somewhere in buying a seriously big farm .

I recall jumping into Lake Tekapo once , it was so cold , it shrunk the " man thing " to an embarrassingly small size . Egotesticle behaviour has not been an option since . ( the " man thing " did recover . But the memory of the incident lingers ........Brrrrrrr ! )

Ahh Rog, had a good lol moment, thanks. Remember these guys were making huge profits in capital gain. The game has changed though, significantly. And everyone is trying to figure... what next.
Also, 4 mil up until recently would only by a weeny dairy farm, the shrivelled cold lake tekapo sort.

Roger Thompson

Way too much information...

cheers
Bernard

Sorry Rog I am still laughing. My ex husband was an avid hunter, he used to regularly come home wet and frozen. I vividly remember the results. Yes I know Bernard, far too much information.

@ Farmer Will: this may be a cure for our expanding population issue: go hunting more often!

# buyerinchch Says:
February 15th, 2010 at 6:43 pm

sob sob for renters when rents catch up! What you going to do when you retire in 25years and pay 2k a week rent?

I'm really curious to understand the thought process behind "rents catching up". Rents vs household income has been a remarkably stable statistic as far back as the information can be found. $2k pw rent might happen, but it will be after a massive burst of inflation (its 7% growth pa - the most you'd expect based on "normal" wage growth (ie, wage growth in a 2-3% inflation environment) is 3-4% pa).

I agree with Sam, anyone who is truly desperate wouldn't still have a property for sale - they would sell at a price to get rid of it, even if it was less than they paid for it. I think it's all just marketing tactics, to lure buyers in and make them believe they're getting a bargain.

I'm not 100% sure of that, veedub.
We looked at a 'keen seller' in Orewa 12 months ago; young couples first property development; new build ( 'just needs your finishing touches', Right!) and didn't get the $1.25m they were after. Agent said they had 'gone floating' and would wait for the upturn. It's back on, this week! at offers over $1m. ( and in the rental columns for $750 p/w- that makes it about $600k in my book). So good luck all around.

Think John Key realises the sticky situation emerging in the property market.
If he had have implemented what BH and the like were advocating it would have had the effect of putting the whole economy into a very nasty tailspin. Thank goodness for his common sense, may be even Labour realises this too.

Perhaps, Muzza. But what should we do? Keep throwing unproductive money at the sector, so that one day...errr...property prices will rise, and then...errr...everything is the same, but more expensive? One thing about economic imbalances: One day, one way or another, they balance. It's only a matter of time, cost and 'who pays'.

POP - I guess BH had been feeling a bit deflated (metaphorically and literally, it appears) because his eminently sensible predictions of a significant property crash in NZ had been stymied by the actions of the Reserve Bank (and other central banks overseas) in slashing interest rates to emergency levels to save the housing market.

However that particular gun has now run out of ammo - and it is the sovreign debt crisis (among other debt crises) that is starting to reverberate around the world which is going to force up interest rates whether the RBNZ like it or not. Debt is going to cost a whole lot more.

Ergo BH is now ready for round 2 - and this time there won't be a fairy godmother to save the housing (or should that be debt) market.

Andy...you speak to soon...yes there will be a fairy godmother..in the form of tens of thousands of wannabee a Kiwi migrants if the govt has any say in the matter and since they hand out the passports ! Throw in Key's mates in the wealthy club wanting to buy a passport for a bit of property and hey presto the market gets porked in time for the election. On the cards dear boy. Oldest govt trick in the game. Peasants fall for it every friggin time.

here's some actual Trademe stats. from my tracking over the last few weeks:

on Feb 4th listing numbers were:

AK 1632
Rodney 2081
Waitakeres 1947
North shore 2156
Hawkes Bay 1362

on Feb 15 th ( y/day)

AK 16716
Rodney 2135
waitak 2053
North Shore City 2227
H. Bay 1405

so you'll note quite large increase in 11 days, huh?

Rob , Figures are a bit out , The AK 16716 is for the auckland disctrict as a whole incl waitak , rodney and north sore

todays Auckland city listing is 3944 , out of those 1562 are houses , 1410 are appartments and 231 are sections

The largest listed stock by far is Manuaku city with 3640 listings of those 2738 are houses .

POP - is it confidence or desperation, selling before the big bust.
I looked at a couple of the houses and the agent said they will not sell below a set level because either that is what they paid for it or they have a mortgage at that value - non of them said because of the value was right.

I assume POP is talking his book (while secretely dumping as much of his portfolio as he can)?

Matt in Auck wouldn't it be better to buy a property (or any appreciating asset) with yield for 170k and use the yield to help pay off the mortgage quicker? Seems strange to borrow for something thats just going to sit there - unless you're speculating for a capital gain? ;-) Perhaps you feel that if the property doesn't earn anything then at least you are not considered a landlord even if the option is not very financially astute!

President of Property ...POP! I like that. Poetic somehow. Sry mate best wishes if you are heavily long property or anything else for that matter. In my view the way to be at the moment is in cash or short. The thing to absolutely NOT BE is leveraged in any way.

Wally...forget the migrants....I hear those cuckoos making a noise up on their cloud again !!!!
I've lost £150,000 GBP (NZ$ 320,000 at present rates) in 5 years by living in UK as well as the pound depreciating 50% against the NZ$ in the same time period. Until the GBP to NZ$ ratio swings 50% the other way, and NZ house prices drop AT LEAST 30%, Erits, and therefore a great many Europeans, and North Americans are totally unable to consider migrating in their wildest dreams. There are literally thousands of us Kiwis stuck in UK/Europe/USA unable to return. Any migrants would have to come from Asia, Russia, Brazil etc (BRIC economies).
So many Kiwis in their little bubble have been totally oblivious to the crash that has gone on in the rest of the world in terms of property values and exchange rates.
UK house prices crept down initially but then crashed around 30% in just 3 or 4 months but luckily have now recovered about half the drop.

As for returning to NZ...I've been watching the same 160 houses and sections in Gulf Harbour for about 2 years now...and they are all still there with desperation stamped all over them. The prices go down and down and still no buyers in 2 years !!!!
For example, apartments down from 365 to 250 (one did sell at 189), the cheapest houses started at 470 and are now down to 360 and still not selling !

Another 2 or 3 years of recovery in UK or US, and 2 or 3 years of declines in NZ....and maybe you'll see some immigrants.......

Those Erits I referred to are Brits ...but it wouldn't let me edit it....must be male....

Sue says, I was watching some CNBC thing on tele this morning. Debating what the worst crisis of 2010 would be. Bank regulation, sovereign debt or protectionism. Soverign debt won hands down. It made me doubt the recovery of the UK and Europe. All these guys spoke of much higher taxes, people having to downsize their lives and aspirations. The chinese dude made a lot of sense. It was pretty worrying and depressing stuff from such highly placed individuals. Probably wrong way to describe them, but you know what I mean.

Farmer Will - Used to be the other way round when we lived there.

Fine if your into pig hunting and growing wacky backy"¦ that's old skool. If you get that herbal stuffs growing in your back yard then you are really lucky.

These days tenants are into the real stuffs. The stuffs that could ruin your investmwent property

@ Sue and others..

So good to hear you and others saying that so many Kiwis just have their "head in the sand" when it comes to overseas matters, especially residential property!

Why these people think a downturn on property could NEVER happen here in little ol' NZ is just beyond belief. In fact this attitude is why NZ is in the KRAP ... so many 'self interested' groups of people, just looking after their "patch" and making sure their personal wants are not impeded or impinged on.

A classic example is these above groups thinking NZ has a list as long as your arm of migrants waiting to get in .... it may do, but these aren't the people with a million USD's in a briefcase, who are going to prop up these unstainable property prices. Also these migrants will realise that because this place is so "geared" to residential property, why come here start a business anyway.

So for anyone to keep expecting the same ol' capital gains to keep chugging along in the next few years has to be dreaming. In fact these people are so deluded, they even think there hasn't been a decrease in property !

The don't realise that if a property market is not realising capital gains, they are actually losing money....do they realise that over time, half your mortgage payment is interest to the bank !

i just got back from buying property in the usa.anyone who wants to make money on property should go there.florida has about the best beaches in the world.you can buy there for about 50k us. near new homes.youll haveto pay cash. but youll get tenants paying 200=300 a week.these homes are mortgagee .some have inground pools and sold 2 years ago for 250k.i paid 30k for a house in ny state worked on it for 4 weeks and had it appraised at 70k.rented to the university for 200a week.yanks can get loans at 4 percent.interest is tax deductable.on there own homes.8k given to first home buyers.landlords in nz nead to get out more.

Bullfrog said:

"Why these people think a downturn on property could NEVER happen here in little ol' NZ is just beyond belief. In fact this attitude is why NZ is in the KRAP "¦ so many 'self interested' groups of people, just looking after their "patch" and making sure their personal wants are not impeded or impinged on."

Excellent comment. I think NZers have become very self interested people, its very noticable after spending time overseas. Self absorbed and selfish in the extreme. And the NIMBY syndrome reigns supreme.

steveK / Sue - is there an obvious reason why you think land in Gulf Harbour is cheap? I agree that house prices might have dropped there due to the logical fear that much of the housing is a leaky housing timebomb, but sections?????

Matt in Auck

SteveK knows all about those sections from when he was hanging with Linda Twirly back in his hay day, don't you read your woman's weeklies from the 90's?

POP Do you meen Linda Turley? That would be a blast from the past.

I kept my distance but my business partner....

Rule no: 1 NEVER trust the write up on a property. "MUST SELL" etc is just a marketing ploy like any other. Does not necessarily imply 'desperation' at all

POP No sorry mate. I did have a business servicing the real estate industry for many years so I am familiar with all their marketing antics. Went to a few agency conferences and awards dinners too. Now they were an education!

By any measure, a house that costs 7.5 yr's earnings is overpriced. An environment where house prices continue to rise faster than inflation indicates a speculative bubble. Add in tax and capital gains advantages to owning property and you have institutionalised the culture. Real estate is no different than any other market bubble: eventually they burst.
To a large extent it has been real estate and the associated construction, finance, and home equity borrowing that has fueled the New Zealand economy since the Millenium, and which has accounted for most of the new jobs created since 2000. New Zealanders may have been a little early patting themselves on the back for coming through this recession. Rather, I think the recession has yet to strike us, the same way it has hammered nations further up the financial food chain. Truth, in the end, will tell.

"no criticism but, if the economy could be managed to grow, why would migration be politically unsustainable?"

Well for instance some of the projections have NZs population growing to almost 7 million in 50 years with high migration and birth rates. 3 million more than today. Do we really want this?
I certainly don't, NZ was a much nicer place when the population was only 3 million.
Because we can't grow our GDP any other way, we continue to import 1000s of people every year & the divide the national income pie into ever smaller amounts hence our terrible per capita GDP.