Oh happy days!  Noddyland is officially worthless.

These figures were expected by most people...not a big surprise

Auckland appears to be doing better than the rest of NZ

Where's Wally?

I dont get it-we are in the throes of  the deepest recession in decades and houses prices have risen across the country over the last 12 months. Which ever way you look at it there has been no big plunge in values as certain ( ahem!) people close to this site have forecast and the market could at worst be said to be "flat" . If these twiddly rises and drops are all we see then be content. When it comes to presenting balanced news it's seems that the lunatics are running the asylum.

And Paul Holmes says the economy has ground to a halt. All very anecdoctal, but he seems to have caught the mood...

"Suddenly, last weekend, I came to understand something of how bad things are with us. The figures released this week just confirm it. I don't know what to do about it but in the last six weeks the economy ground to a halt."

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10664400&ref=twitter

cheers

Bernard

andyyh: i dont "spruik" property to any body. I neither buy, sell or tell people to buy or sell. I give them the facts, do the research and let them make up their own minds which way they want to go. If they choose to buy I advise them on the best methods. If they wish to sell - like wise. Every client makes his or her mind up based on the actual facts and circumstances of each case and not based on hysterics, news media hype or third hand scuttlebut.

The only worthless thing here, is the toe rag who posted using my name at 6.44 and 6.52

you should be ashamed of yourself, olly, cause you're not really a bad bloke...but you know as well as anyone that you can bend some stats. to suit your pitch...and you are!

why you would want to lead the occasional fool into believing that in this current overall economic climate , that buying property is a good idea , is beyond me and fiscal common sense?

how do you spell "conscience"?

i heard the QV guy talking on the radio this morning about these figures and he said that there would be no bounceback in spring and they could only see clouds in the foreseeable future as the prop. slowly and peacefully slid down.

anyway, here's this morning NZHERALD's take on the subject

and olly...learn how to spell," Karma" maybe?

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10664635

and another anecdote...Jennian Homes said this morning that the new building starts were the worst in their living memory.

now, there's a plus stat. for Olly's supply and demand rave.

lotsa olly's and wally's on here, huh??

http://www.landlords.co.nz/read-article.php?article_id=3789

What these guys think: No big crash, wait and see, market flat, in the mean time rents going up.

Bernard, there is this thing called the seasonal adjustment factor that real economists use, and if you used it you'd see that house prices actually didn't fall over the last 3 months, and that prices are up on last year by quite a bit (sure due to a change in mix of higher prices selling, but the same argument applies to lower volumes with lower cheap houses selling).

BH and interest.co.nz - reporting facts with as much intregity as Fox News.

O.K TEAM..HERE'S TODAYS BREAKDOWN OF THE QV REPORT JUST IN!

it's a bit long but useful?

Monday 9 August 2010

Property values in the six main centres either flat-lined or declined in July, according to the latest figures from Quotable Value.

To view the regions quickly, use the links below:

Auckland
Hamilton
Tauranga
Wellington
Christchurch
Dunedin

Auckland
QV's Residential Price Index for July shows that property values in the Auckland region have continued to decrease, having now dropped by 0.8% since March this year. In contrast, values increased by 7.8% in the eight months to March.

Consequently, values now sit 6.9% above the same time last year, but 2.5% below the market peak of late 2007 as the graph below illustrates:

Glenda Whitehead of QV Valuations said: "In Auckland, participants in the market place remain cautious.  Since the beginning of this year, there has been neither an overall negative or positive sentiment, more a wait-and-see approach.  This has caused a lack of momentum, and as a consequence, values achieved at sale are easing. 

"Vendors wanting to sell need to make their properties and their asking prices attractive to potential buyers. Some feedback suggests people are still worried about job security and interest rates rises. Interestingly, those who presently own property are seeking advice about values, before making decisions to sell, hold, renovate or extend their homes. 

"Along with most market players' lack of urgency to act, banks appear to be sticking to their tougher lending criteria, including insisting on reasonable deposits or equity levels. This lack of availability of easy credit may also be contributing to the slower momentum felt since the start of this year," Whitehead said.

"In Waitakere, activity is subdued, with sold signs scarce. Properties in lower value, less popular areas appear to be taking a long time to sell. However, in contrast, there is a lack of stock in popular pockets of the residential market on the North Shore, perhaps as potential vendors hold off hoping for a better time to sell. Auckland and Manukau cities show similar buyer and seller patterns to the North Shore," Whitehead said.

QV's Residential Price Index is calculated using sales data from the 3 months leading up to the month being reported. It is not the same as the average sales price, which fluctuates in line with the mix of properties selling in upper or lower price brackets. The average sales price for the Auckland region in July was $539,084.

Hamilton
QV's Residential Price Index for July shows that property values in Hamilton remain relatively stable.

Unlike most other major centres, Hamilton did not continue to experience significant value recovery from mid to late 2009. Subsequently, values are now 0.3% above the same time last year, but 8.7% below the market peak of 2007, as the graph below illustrates:

Richard Allen of QV Valuations said: "Residential property values have essentially flat-lined in Hamilton over the past year. Although experiencing a brief recovery from the low point in early 2009, Hamilton has not experienced the market recovery seen in other major centres to March this year.

"It appears that uncertainty in the economic recovery, coupled with the speculation that there will be another increase in interest rates, is continuing to dampen demand and stifle the residential market. This is evidenced by very low sales volumes in the city over the last few months."

QV's Residential Price Index is calculated using sales data from the three months leading up to the month being reported. It is not the same as the average sales price, which fluctuates in line with the mix of properties selling in upper or lower price brackets. The average sales price for the Hamilton region in July was $352,576.

Tauranga
QV's Residential Price Index for July shows that property values in Tauranga remain relatively stable.

Unlike most other major centres, Tauranga did not see significant value gains in 2009. Subsequently, values are now 0.5% above the same time last year, but 10% below the market peak of late 2007 as the graph below illustrates:

Shayne Donovan-Grammer of QV Valuations said: "Market activity in the Tauranga region is light at present. This is partly due to the season, but current economic conditions are also playing their part. With a reduction in demand, prices are gently easing, not significantly, but certainly enough to be noticeable.

"Some of the potential buyers have been held back to some degree by stricter lending criteria. There continues to be a lack of interest by investors as the current environment is against them with rising interest rates, no immediate prospect for capital appreciation and a lack of incentives and allowances.

"To put the last few years into perspective, from pre-boom to peak, property prices in Tauranga increased by an average of 54%. From the peak of the market to now the market has come back by about 10%. This reinforces that property is a medium to long term investment and can still be an attractive option if managed with this in mind," Donovan-Grammer said.

QV's Residential Price Index is calculated using sales data from the 3 months leading up to the month being reported. It is not the same as the average sales price, which fluctuates in line with the mix of properties selling in upper or lower price brackets. The average sales price for Tauranga in July was $415,971.

Wellington
QV's Residential Price Index for July shows that property values in the Wellington region have continued to decrease, having now dropped by 1.9% since March this year. In contrast, values increased by 5.2% in the eight months to March.

Consequently, values now sit 3.2% above the same time last year, but 5.0% below the market peak of early 2008 as the graph below illustrates:

Kerry Buckeridge of QV Valuations said: "The Wellington market is currently very slow.  As our latest statistics show, the trajectory of Wellington values over the last six months has been downward, and our gut feel on the ground supports this.

"There is little market activity from either buyers or sellers. Early in the year a flood of listings hit the market which resulted in supply outstripping demand. 

"Subsequently, some of this excess stock has moved, however, this does not appear to have bolstered the market in any way. Real Estate agents report both listing and sales activity to be rather slow," Buckeridge said.

"Sellers appear to be avoiding listing properties unless they really have to, while buyers are proving to be hard to motivate into action. Many potential purchasers watch the market for months before making a move, and when they do, they avoid properties which have negative characteristics. We are also hearing that banks are being very cautious. New home buyers in particular need a substantial deposit and a good banking history if they are to be approved for mortgage finance," Buckeridge said.

"As in any market, we are also hearing of isolated transactions apparently going against the broader trend. In such cases these properties achieve multiple offers and sell for good prices.  Inevitably these are properties with features enabling them to stand out from the crowd and hence spark the interest of buyers," he said.

QV's Residential Price Index is calculated using sales data from the three months leading up to the month being reported. It is not the same as the average sales price, which fluctuates in line with the mix of properties selling in upper or lower price brackets. The average sales price for the Wellington region in July was $457,472.

Christchurch
QV's Residential Price Index for July shows property values in Christchurch have continued to be stable. They have now been relatively steady since February, after increasing since early 2009.

Consequently, values now sit 4.6% above the same time last year, and 3.0% below the market peak of 2007 as the graph below illustrates:

Melanie Swallow of QV Valuations said: "House prices have remained fairly static in Christchurch for the past six months. The signs of a more traditional, seasonally influenced market are beginning to emerge, with what appears to have been a correction in the entry-level part of the market.

"The growth experienced from July 2009 to January 2010 was largely fuelled by pressure in the entry level part of the market being driven by a shortage of stock as vendors sat on their hands. In that period, some very good sale prices were achieved, particularly through the auction process. As more listings came to market this situation dissipated, which is seen in the beginning of the flat line in house values," she said.

"Anecdotal comments from agents and bankers are that properties are taking longer to sell, with no-price-marketing a common theme. There still appears to be some disparity between vendors and purchasers, with the reduction in asking prices being made by vendors still not enough to hook purchaser dollars. Some would-be purchasers also struggle to get finance," Swallow said.

"The upper end of the market is very static, with low sales volumes and depressed prices.  The cost to build a million dollar home is often outweighing its market value.  There are two drivers behind this. First, the amount of choice and variety available for sale in Canterbury in this segment of the market is limited, and second, softer demand means few purchasers are trading up. We expect this to improve, but not in the immediate future. The lifestyle sector also remains flat to date," Swallow said.

QV's Residential Price Index is calculated using sales data from the 3 months leading up to the month being reported. It is not the same as the average sales price, which fluctuates in line with the mix of properties selling in upper or lower price brackets. The average sales price for Christchurch in July was $365,304.

Dunedin
QV's Residential Price Index for July shows that property values in Dunedin have decreased, having now dropped by 1.1% since March this year. In contrast, values increased by 4.7% in the 8 months to March.

Consequently, values now sit 3.7% above the same time last year, but 3.9% below the market peak of 2008 as the graph below illustrates:

Tim Gibson of QV Valuations said: "The Dunedin property market has continued to slow in the month of July. Local real estate agents are also reporting a decrease in the activity of interested parties during recently held open homes within Dunedin city. This is typically for the lower to mid value bracket properties.

"Existing home owners are the most dominant player in the market at present, with a higher than usual number involved in transactions recently. A current over-supply of stock prevails in Dunedin, due to the low volume of active and potential purchasers. For those in a strong financial position, it can be been seen as a good time to upgrade due to greater bargaining power on the buyer side," Gibson said.

"There also appears to be a drop in interest shown by first home buyers. The reason for this can be put down to a wait-and-see approach, as well as some difficulty in raising the required finance to purchase. Some potential purchasers have no doubt been put off by pending interest rate increases," he said.

QV's Residential Price Index is calculated using sales data from the three months leading up to the month being reported. It is not the same as the average sales price, which fluctuates in line with the mix of properties selling in upper or lower price brackets. The average sales price for Dunedin in July was $273,719.

Auckland (A) #

8.6

9.9

625,267

- Auckland City (Central)

10.5

12.1

582,845

- Auckland City (East)

8.5

10.3

759,492

- Auckland City (South)

7.8

8.5

548,845

HI All I am living in Auckland Central. I am happy with the data above cut and pasted form the QV report.

""In Waitakere, activity is subdued, with sold signs scarce. Properties in lower value, less popular areas appear to be taking a long time to sell. However, in contrast, there is a lack of stock in popular pockets of the residential market on the North Shore, perhaps as potential vendors hold off hoping for a better time to sell. Auckland and Manukau cities show similar buyer and seller patterns to the North Shore," Whitehead said."

This is what I see, plenty of houses for sale on the North Shore but no one wanting to touch the bulk of them, which appear to be rentals, asking around $400k - $500k but no interest. 

However, when a half-decent family home comes on the market between the $500k - $700k there is excitement, they seem to be such a rarity.

...here's an EXTRACT fresh in this morning from ASB economist Nick Tuffley from their overall housing report...READ ON :

A number of influences are expected to constrain the housing market over the next couple of years. As previously mentioned, the announcement in the May Budget of the removal of the ability to claim depreciation on buildings will reduce rental investment demand.

In addition, mortgage rates are expected to gradually rise over the year. Already, there are signs that growing awareness that interest rates will increase is weighing on housing demand. Meanwhile, the relatively stronger Australian labour market has encouraged NZ workers to move across the Tasman. This increase in departures to Australia has meant slowing net migration, which will weigh on housing demand over the coming year. -10-50510152025Apr-93Apr-97Apr-01Apr-05Apr-09Source: REINZ,NZ MEDIAN HOUSE PRICE (stratified, annual change 3mma)%1.01.52.02.5Jan-01Jan-03Jan-05Jan-07Jan-09912151821Source: : Barfoot Thompson, Realestate.co.nz AucklandNEW HOUSING LISTINGS(thousands, seasonally adjusted)

Nationwide (rhs)

Correction in house price to income ratio will occur largely through growth in incomes.

To the extent that house prices are already high relative to incomes and rents, we expect some correction in these ratios, but mainly via growth in incomes and rents. There are clear signs that households are collectively ‘deleveraging’, with household debt falling relative to incomes. This reflects the fact that households are now seeking to spend within their means.

Partly offsetting these effects are some factors which are supportive for house prices. We expect a recovery in employment and wage growth, which will give more households the means to buy their first home or to trade up. Meanwhile, supply of housing is expected to remain low. This reflects both the current low number of new listings on the market and the fact that there will only be a modest level of housing construction over the coming years.

The balance of these factors points to the housing market remaining soft over the next couple of years, both in terms of the pace of sales turnover and house price growth. However, there are few signs that there will be an oversupply of new housing over the next couple of years.

In summary,



Housing confidence was broadly unchanged over the three months to July.



Expectations for further gains in house prices have fallen across the regions, with the decline particularly evident in Auckland.



Recent data show signs of continued slowing in housing market momentum, as expectations of rising interest rates weigh on housing demand. Nonetheless, house prices remain resilient as potential sellers hold off putting their houses on the market.



Beyond 2010, we expect weak house price growth, although population growth will provide some support. Net migration will be a key influence on housing demand over the coming years.

NZ Housing Confidence

6 August 2010

4

For more …

ASB commentary on housing and home loan rates.

Commentary on the housing market and on home loan rates go

FYI I have updated this article above with detail from the ASB Housing Confidence Survey and the Terralink Mortgagee sales.

Many thanks Rob of the North for those details.

cheers

Bernard
 

While values have declined according to the QV index, the average sales price increased slightly from $404,715 to $407,191.

So, sale prices actually increased? What am I missing here? Bernard, is this one of your spins again?

I was surprised when I did a quick calculation of the difference between renting and owning at the current interest rates.  It didn't actually seem that much more expensive to own then to rent.

The interest payments on a $400k house at 6% are $461 per week. Add rates and essential maintenence and you are looking at say $500 per week.  To rent the same house you would probably be paying about $400 per week. So a 25% premium to own.  Not really as unaffordable as everyone says. 

HEY WALLY PUT YOUR HEARING AID IN AND STOP YELLING

or is that just so you can see

and not all is bad, only where speculators dipped their toes in too deep. the rest of the crowd are homeowners and PI's, and they will be just dandy, without any need to talk it up or down...

 Sales price increased $404,715 to $407,191 !

Bernard, you are setting new standards here, your misleading titles are becoming very common now.

Whoever does not read atricle will  think house prices are falling, which is obviously not a case.

North Shore is still going strong.  I was at an auction yesterday and this house in Milford with GV $460K  (last sale price $457K in 2007) was passed in at $465K.   The house sold later that day for $528K.  

Is that the REAL Ollie Newland commenting up there, or someone doing a spoof of Ollie?

If property prices CAN rise in real terms indefinitely, then there is nothing inherently illogical about ANY Ponzi scheme. Sorry, Ollie, in the real world, all such money for nothing schemes have to come to an end somewhere along the line.

Median multiples have gone a lot higher than they have in NZ, in California, and now in Australia. California is an example that everyone SHOULD have learned from. Give our Nats some credit, they have not intervened like the Rudd mob did to "assist" first home buyers. If I remember rightly, this was a $20,000 handout that immediately drove property prices up by $100,000, leaving the first home buyer suckers $80,000 worse off. The Aussies property Ponzi will have to end somewhere too.

We should count our blessings if our "top of bubble" was "only" around a median multiple of 6. The bust will not be as messy as it could have been. Imagine Clark and Cullen throwing subsidy money at first home buyers for the last 20 months, as THEIR "fix" of the problem, and thank God for small mercies.

Ollie, if you want to know about some people who made BIIIIIIG bucks out of the property suckers in the USA, read everything you can find about John Paulson, Steve Eisman, and Kyle Bass. Read Michael Lewis' book, "The Big Short". If there is some way to "short" anything to do with property in Sydney particularly, Australasian John Paulsons will be busily doing it right now. NZ is small beer comparatively. Vancouver would be another good target for the international speculator.

Patrick, "....Its good to be part of the "few people" who can actually recognise a bubble. On ya, good people of interest.co.nz....." Read this Kiwiblog thread from December 2008: http://www.kiwiblog.co.nz/2008/12/ocr_drops_15.html That was before I discovered that interest.co.nz had a blog component to it.......

 Suggestion:  instead of property bears we start use term property losers. Judging by comments here most of them are in fact people who missed out and can't get over it.

The problem is many people purchased houses due to the favourable tax benefits. HOwever you should never buy an investment based on that, as tax conditions change, like they have now, and will probably be changed again in the next budget. On average  NZ houses are very poorly built and insulated, so are way overvalued, especially based on our low wages. Really it is just a case of a bubble that needs to burst. A lot of people may get burnt, but that is the risk of greed and lock of spreading the risk across the investent groups.

Anonymous at 3.08p.m. You are kidding? What you are doing is actually helping every property investor in this country. What you are doing is keeping tenants renting and not buying their first house which is just fine.

Your financial inadequacies are showing.

Anon at 3.28p.m. I am amazed that you know my financial circumstances so well.

I am not subsidising my tenants whatsoever and if I were to sell any of my properties today I would achieve substantially more than I have paid for them, although it is not my intention to do so.

Banks are still prepared to lend to me so I can't be too bad a risk.

Why would I be selling it is a very good time to buy if you can.

You're welcome!  :)

Kate's point this afternoon re:Welington property was very well made. I'm trying to convince my stubborn parents in welli to sell now before it is too late. I think house prices in Welli will be down at least 10% in 2 years. Civil servants are going to get caned there, and property is arguably even more overpriced there than it is in Auckland

Quotable Value says:   While values have declined according to the QV index, the average sales price increased slightly from $404,715 to $407,191. This increase in average price is due relatively fewer lower value properties selling over recent months. QV said the index was a more reliable measure of value change as it is not based on average sales prices and is not affected by which parts of the market are more or less active.

Terralink Managing Director Mike Donald said there has been a significant change in the type of property owners who are being forced to sell. “Not only is there an increase in the number of mortgagee sales of properties owned by individuals rather than companies or mulitple owners, but more and more of those individuals are losing their only property – and more than likely it’s their family home," Donald said.

These two quotes emphasise the major problem with any discussion about house prices.

None of us really can know what we are talking about. Simply because we are being fed figures that are unrealistic. Certainly they are figures. After all they are statistics. But they do not mean much and should not be quoted except to point out their unreliability for any useful purpose. Averages / totals can go up while values go down. Terralink shows how the makeup of the market counts a lot. But that does not come out to any significant degree in the overall statistics.

I notice that neither QV nor RE focus on stratified results for localities. I believe that lower priced properties in Auckland dropped 30% some year or two ago and that higher priced properties are now being fed into the market. The figures in total are meaningless. But if the figures are being artificially held up now because of the reporting methods, then a big drop could happen when the higher price properties run out being all sold.  That is not because there is a big drop. It is because the figures are useless. Likely the run out of higher priced properties may take some 12 to 24 months. Then the market will return to a normal spread. Then a major drop in the QV index will show up. But it will all be old history but we did not know it. Moral. Don’t trust the figures.