The average value of New Zealand homes dropped below $1 million in August for the first time since November last year, according to the CoreLogic House Price Index (HPI).
CoreLogic's HPI, which tracks the value of all developed residential properties throughout NZ, shows the average value of homes was $991,674 in August, down by $51,587 (-4.9%) compared to its March peak of $1,043,261.
August was the fifth consecutive month the average dwelling value has declined, and was the first time it has been below $1 million since November 2021.
The table below shows the average dwelling values in all major urban areas throughout the country in August, and how much they have changed over the previous three and 12 months.
It shows values are now declining in most parts of the country, and even places such as Christchurch and Queenstown where the property market has been more resilient have now slipped into the red.
The steepest drops in value have been in Palmerston North, the Wellington Region and Dunedin, where average values are now lower than they were 12 months ago.
Not only are values falling, the rate at which they are falling is increasing.
CoreLogic said average values dropped 1.8% in August compared to a 0.9% fall in July.
"The three month fall in values of 3.5% is drifting closer to the depths of the Global Financial Crisis, when the rate of change bottomed out at [a fall of] 4.4% at the end of August 2008," the property data company said.
"Consumer sentiment can be a key influence on the market and with the evidence of market downturn clear in every corner of the country, the already smaller pool of would-be buyers, due to tighter, more expensive credit, are happy to bide their time in the falling market," CoreLogic NZ Head of Research Nick Goodall said.
The comment stream on this story is now closed.
| CoreLogic House Price Index | |||
| August 2022 | |||
| Territorial authority | Average current value | 3 month change % | 12 month change% |
| Far North | $713,713 | -1.7% | 16.4% |
| Whangarei | $813,533 | -3.6% | 11.3% |
| Kaipara | $899,518 | -0.9% | 12.4% |
| Auckland - Rodney | $1,387,073 | -2.2% | 12.6% |
| Rodney - Hibiscus Coast | $1,297,024 | -2.5% | 8.3% |
| Rodney - North | $1,464,612 | -2.1% | 15.9% |
| Auckland - North Shore | $1,559,308 | -4.9% | 4.2% |
| North Shore - Coastal | $1,785,486 | -5.4% | 4.4% |
| North Shore - North Harbour | $1,495,569 | -4.0% | 3.6% |
| North Shore - Onewa | $1,260,101 | -4.6% | 3.3% |
| Auckland - Waitakere | $1,118,746 | -5.5% | 3.5% |
| Auckland - City | $1,615,756 | -4.5% | 2.3% |
| Auckland City - Central | $1,350,482 | -5.3% | 1.2% |
| Auckland City - Islands | $1,773,894 | -4.0% | 9.7% |
| Auckland City - South | $1,472,786 | -3.5% | 2.5% |
| Auckland_City - East | $2,011,731 | -4.8% | 1.7% |
| Auckland - Manukau | $1,258,297 | -5.2% | 7.0% |
| Manukau - Central | $976,600 | -6.5% | 4.7% |
| Manukau - East | $1,549,606 | -5.3% | 3.1% |
| Manukau - North West | $1,106,385 | -4.2% | 9.0% |
| Auckland - Papakura | $1,046,556 | -2.4% | 12.9% |
| Auckland - Franklin | $1,006,668 | -3.3% | 13.4% |
| Thames Coromandel | $1,275,582 | 7.2% | 15.7% |
| Hauraki | $690,022 | 0.6% | 9.6% |
| Waikato | $807,324 | 2.9% | 19.2% |
| Matamata Piako | $747,740 | 0.7% | 16.4% |
| Hamilton | $863,481 | -0.3% | 10.3% |
| Hamilton - Central & North West | $808,197 | 0.3% | 10.5% |
| Hamilton - North East | $1,063,925 | -1.3% | 10.4% |
| Hamilton - South East | $802,076 | 3.0% | 10.9% |
| Hamilton - South West | $760,726 | -3.2% | 7.9% |
| Waipa | $894,723 | -2.4% | 9.6% |
| Otorohanga | $519,010 | -2.2% | 1.3% |
| South Waikato | $464,867 | -3.0% | 15.0% |
| Waitomo | $391,002 | 1.2% | 24.2% |
| Taupo | $876,308 | -2.7% | 11.5% |
| Western BOP | $1,042,010 | -3.5% | 15.2% |
| Tauranga | $1,139,355 | -3.3% | 11.6% |
| Rotorua | $700,802 | -3.0% | 8.8% |
| Whakatane | $759,732 | -4.2% | 13.0% |
| Kawerau | $427,480 | -1.9% | 4.1% |
| Opotiki | $587,228 | 6.4% | 20.1% |
| Gisborne | $645,075 | -4.8% | 7.7% |
| Wairoa | $391,753 | -6.6% | 11.9% |
| Hastings | $852,784 | -1.9% | 4.7% |
| Napier | $827,311 | -5.9% | 0.0% |
| Central Hawkes Bay | $639,010 | -3.7% | 17.1% |
| New Plymouth | $731,108 | -2.6% | 11.5% |
| Stratford | $505,781 | -4.2% | 12.0% |
| South Taranaki | $455,148 | -0.2% | 15.3% |
| Ruapehu | $400,205 | -2.7% | 8.0% |
| Whanganui | $547,515 | -1.8% | 4.8% |
| Rangitikei | $488,507 | -2.8% | 8.2% |
| Manawatu | $646,616 | -4.6% | 2.9% |
| Palmerston North | $708,187 | -4.1% | -2.3% |
| Tararua | $455,083 | -6.4% | 1.2% |
| Horowhenua | $621,530 | -5.8% | 1.0% |
| Kapiti Coast | $930,363 | -4.7% | 1.2% |
| Porirua | $905,141 | -7.5% | -5.1% |
| Upper Hutt | $838,808 | -6.0% | -6.0% |
| Hutt | $879,612 | -6.6% | -6.4% |
| Wellington City | $1,140,045 | -8.2% | -4.6% |
| Wellington - Central & South | $1,090,982 | -8.0% | -3.2% |
| Wellington - East | $1,273,838 | -6.3% | -2.4% |
| Wellington - North | $1,074,236 | -8.7% | -5.2% |
| Wellington - West | $1,283,695 | -9.5% | -6.5% |
| Masterton | $649,132 | -6.1% | 2.8% |
| Carterton | $708,685 | -3.2% | 4.0% |
| South Wairarapa | $889,478 | -3.2% | 8.4% |
| Tasman | $839,851 | -3.9% | 5.9% |
| Nelson | $835,191 | -3.4% | 3.8% |
| Marlborough | $733,406 | -1.9% | 8.2% |
| Kaikoura | $662,814 | 0.9% | 9.8% |
| Buller | $314,420 | 6.6% | 13.9% |
| Grey | $347,274 | 1.3% | 4.9% |
| Westland | $385,880 | 0.7% | 11.5% |
| Hurunui | $619,979 | 7.8% | 24.6% |
| Waimakariri | $729,039 | 5.3% | 21.0% |
| Christchurch | $761,131 | -0.3% | 16.4% |
| Christchurch - Banks Peninsula | $819,818 | -0.1% | 16.9% |
| Christchurch - Central & North | $873,243 | 0.0% | 15.0% |
| Christchurch - East | $589,226 | 1.1% | 16.8% |
| Christchurch - Hills | $1,034,704 | -0.9% | 14.0% |
| Christchurch - Southwest | $727,335 | -1.5% | 17.6% |
| Selwyn | $858,838 | -1.5% | 19.4% |
| Ashburton | $531,816 | 0.9% | 18.0% |
| Timaru | $515,765 | 1.2% | 13.5% |
| MacKenzie | $757,548 | 9.2% | 20.4% |
| Waimate | $422,219 | 0.7% | 15.2% |
| Waitaki | $490,345 | -1.0% | 11.4% |
| Central Otago | $780,547 | -0.2% | 12.3% |
| Queenstown Lakes | $1,675,541 | -1.1% | 20.5% |
| Dunedin | $656,423 | -5.1% | -2.3% |
| Dunedin - Central & North | $671,290 | -4.2% | -2.9% |
| Dunedin - Peninsular & Coastal | $609,797 | -11.7% | -2.8% |
| Dunedin - South | $621,683 | -5.8% | -3.2% |
| Dunedin - Taieri | $689,721 | -3.8% | -1.0% |
| Clutha | $403,312 | -0.7% | 7.8% |
| Southland | $487,717 | -0.2% | 13.8% |
| Gore | $395,344 | 2.1% | 7.1% |
| Invercargill | $469,787 | -1.1% | 6.3% |
| Auckland Area | $1,405,656 | -4.6% | 5.1% |
| Wellington Area | $1,009,563 | -7.6% | -5.2% |
| Main Urban Areas | $1,104,446 | -4.3% | 3.7% |
| All of Aotearoa | $991,674 | -3.5% | 5.8% |
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152 Comments
Loft Sanding
Nominal house prices went up faster in 2021 (and 2020) than they’re coming down this year.
And judging by the level of interest in this blog, NZers continue to remain highly enthusiastic about house ownership…… Look at the lengthy list of comments below. 😁 This trusty “barometer” registers prodigious interest in houses. ✅
Housing remains a superior long-term investment. But you already knew that.
TTP
I suspect many are obsessed about house prices in the same way that Europeans are obsessed about gas prices.
I.e., it's a cost that is taking huge bites out of their quality of life and damaging their society. And, the beneficiaries tend to be the wealthy asset owners.
TTP is getting desperate!
the "soft landing" is gathering speed as the brick wall approaches...
9.8m p/s^2 . Aroha.
Haha.. nice one TK.
Remember the Jona Lewie song...
..."and you always find me talking property prices at parties".
Been the singular thought of Kiwis since 1980.
"...and nothing else matters"
to quote another well-known verse.
Obession with Capital Gains, does not traslate into purchase decisions in a highly leveraged market, with restrictive interest rates and now recerssion. Average pay rates increasing by 8.5%pa in NZ, therefore OCR may need to go higher.
While I expect you to try and be positive TTP, anyone objectively looking at the market understands that price falls have to delecerate and pause before the bottom is in, not accelerate as per this real data point shows.......
Bahahahaha
Undoubtedly, housing remains a superior long-term investment
Bahahahaha
The downturn is just starting and already house market is seeing record losses. Rates and inflation climbing this time next year we will see another 20% off today’s prices.
The number of comments below is more likely to signify an increased demand for popcorn, than a cavalry to save the property market
I was thinking "hmm I've read this from TTP before", you're paraphrasing yourself? Getting close to spam here.
And the amount of times TTP will come back and edit his posts.....
Reality = https://www.interest.co.nz/property/117438/ominous-sign-spring-housing-…
Tim The Point = https://imgur.com/gallery/c4jt321
Popcorn, I have melted butter on mine and salt. Think popcorn is better investment, 2 years till bottom then a number of years with very low growth. You will need a lot of popcorn for the wait.
HODL
Price drops have been very modest so far but then so have RBNZs attempts at controlling inflation.
A drop of 11% within 8-9 months is hardly modest
People have been watching all these short, sharp crashes in stock markets, Bitcoin etc and have forgotten what a house market crash looks like.
This is what the start of a crash looks like. It's possible it won't fall much further, but this is entirely consistent with a large, traumatic crash.
Asking prices stopped falling a month ago, so unless the spring listing surge (caused by ppl wanting to sell pre xmas) floods the market with way more listings than can be shifted in Dec/Jan this seems like the bottom. Well, unless RBNZ signal more extreme measures which is highly possible since inflation is a runaway train now.
what have asking prices got to do with it?
spot the spruikers
I track the median asking price on TM. It seems to be a reliable predictor of house price changes in the following couple of months.
obviously not in the hutt
"Continuing to see large drops in listed prices with the average price reduction now close to $110K" ( ikimpaul)
Ill stick with my spruiker call
Only reliable if houses are selling - they are not. Asking prices are not meeting the market. Impossible to know what the difference is though.
There is a bit of a delay, in Nov 2021 there were 9k TM listings in Auckland. This rose to 12k before asking prices moved much. At that point they fell about 150k. But 4 weeks ago they stopped falling.
The number of daily trademe listings for auckland has dropped to levels two years ago. About 40 percent of daily tallies late last year. Lowish supply right now imo
ha .. that's cos sellers know buyers wont pay what they want (and why should they) - so sitting and waiting ... but would seem a very very long wait. should have sold 6-12 montsh ago - too late now .. ouch
You could probably say the same for those renters aged 40 or more... it is now 2 late to buy and they will likely be renting for life. A very unpleasant option for many.
Depends how long these 1-2% falls continue for and how much they have saved/invested elsewhere.
A borrower has a limited shelf life. Banks require shorter term loans for older borrowers and then the payments start to climb which makes servicing the loan impossible.
Ask a mortgage broker
Banks have no qualms about offering 30 year loans to people in their 40s, assuming they have a stable income and meet the servicing tests.
Bzzzt, Wrong. Kiwibank knocked us back to 26 years max term despite good household income, stable employment (10+ years for me). You're not getting a 30yr mortgage in your mid/late 40s.
Bzzzt, Wrong. I've done exactly that. Two different banks. No issues with 30 year mortgage.
How recently? Before the more draconian CCCFA revisions doesnt count They won't do it for people who are going to take a significant income drop when they retire if they are still going to be servicing a significant mortgage from their employment income. Which a typical 45yo fhb will be.
Try another bank. Policies around this differ. Many assume you can work beyond age 65
Are you trying to make everyone over 40 feel like shit or what. What is your point???? I know people over 60 who are getting $1million + mort gages, so don't try and say they can't. You are not the bank.
Its simply an attempt to scare people into thinking they have to buy now and not wait. i.e. to fuel FOMO in the hope that the value of his property portfolio starts going back up again.
He’s posting a LOT these days. I find his massive increase in posting interesting.
Yes reminds me of P8 a bit who has obviously seen the writing on the wall and disappeared (especially now that his children have sold out of the market and no long needs to talk it up for their financial benefit). But HW2 still has skin in the game so is holding the fort while its burning around him while most of his compatriots have abandoned ship - and is trying to convince the last of the stragglers that hey guys 'everything is fine, come join me'.
Nice discussions. Theres no reason for being miserable imo
My boys bought first homes last year. I am not concerned for them but obviously was concerned they could be getting anxious about their home values and debts. So told them that if they thought they were losing money I would buy their homes off of them for purchase price so that it had cost them nothing. Guess what, neither of them took me up, one has a 4 year fixed rate mortgage so their outgoings are the same, the other a one year fixed rate. I am glad neither accepted as I don't have a spare $1.5 million.
Btw. You have both denied engaging in ad hom when others accused you. Glad to see you are true to your word haha. HouseMouse I don't think I could out compete you for sheer number of postings
Apology if you feel like that, it is not intended as a slight
IO that is just devious. But you can't stop the clock ticking which Warren B stated during the GFC. And following that period there was a surge in pent up demand from the many who put off making a buying decision. For your info my property assets are still growing and being re-valued up. Totally straight up.
Good for you 🙂
HW2, I personally don’t understand the need to brag in a comments section, during a housing market crash and likely upcoming global recession, that my assets are going up.
What motivates that kind of thing? Is is ego? Need for validation? Is it fear being soothed in self denial and a comforting narrative?
You can’t you look at the data? The research? The patterns? Why ignore the wider picture in order to blow your own trumpet?
I don’t get it.
What's up gingerninja. I hope you are doing well along with your house reno. Just please read up the thread and see that I was responding to IOs totally stupid inference.
Anyway why is it bad to tell people that you are doong ok, that is not necessarily boasting. If someone makes a nasty comment it should be ok to respond and counter.
Thank you.
Or maybe waiting for the typical spring selling season in the hope that there are more buyers out looking. On my TradeMe "Lost" tab, just jotting up what's on the first page:
- 25 total properties
- 9 of those sold
- 15 withdrawn (and purged from searches, and the original RE website)
- 1 withdrawn and relisted (same agent)
So only a 36% sell rate from listings that I have been watching. 60% being removed from the market unsold Would suggest that people would rather *not* sell than reduce their asking price.
I have noticed a number of listings being dropped off trade me and realestate.co but still have the for sale signs at the front of the house.
Seems a bit silly to me... why would you do that
Perhaps listing every available property for sale in a publicly monitored site would cause concern when the growth in stock became evident.
HM2 you should get someone to help you use trademe property app as in Auckland still over 12000 for sale
RBNZ have signalled at least another 1% of interest rate rises to come, not sure if that counts as extreme but certainly it'll mean people find it harder to afford current house prices. I tend to think the price falls will follow the rates rises, with a lag of perhaps a few months. But hey, maybe NZs peculiar property mania will save the day.
Genuine question but how will your REITs be affected by that. Also note thatfixed rate mortgages are insulated
Good question, all being equal you'd expect it to bring down share prices in general, particularly REITs which are often somewhat leveraged. I am not expecting spectacular returns from my REITs in the short term, but they pay a nice yield and are trading at a generous discount so I'm happily averaging my way into them. They make up about 5-6% of my share portfolio at the moment so not massive exposure.
As an example, I can buy KPG on the NZX right now for about a dollar and this gives me about $1.45 of assets (if you trust their internal valuation), and about a 7% gross yield, paid quarterly now. They have significant developments underway and planned so I expect the yield to increase in the long run.
Why anyone would ignore this and buy residential property as an investment right now is beyond me.
Resi property has a proven record. What the housing market has declined over 8 months, the sharemarket can do in one day easy. That doesnt mean shares are a bad thing, just very fluctuating which is why I don't touch them. What is the biggest percentage of your portfolio right now. Would it be trucking companies. What is the best way to learn more about shares
Yes the share market can do big changes in one day because price discovery happens more or less immediately with 1000s of transaction happening in seconds for some stocks. This does not happen with housing as speculators sweat it out waiting for the next fool to arrive. The truth is masked as it requires transaction volume over a much longer time window to paint the picture.The standoff of today, less listings and less buyers, will continue until someone blinks first. Interesting strategy with interest rates climbing, and future taxpayers/buyer heading offshore.
Already receiving notices on mortgagee sales, so some Banks are starting to blink for the speculators.
Honestly, the best way to invest in shares is with a cheap index fund buying a chunk of all the largest public companies in the world. This will outperform the vast majority of people who think they can do better than the market, with the benefit of not actually taking any of your time beyond the couple of hours settings it up and maybe half an hour a year of maintenance. I'm a more active investor but only because I enjoy the process.
Biggest current holdings are Pharmazen, a Chch company on the unlisted market who have been expanding rapidly, and Woodside as I loaded up around the time of the first Covid lockdown and they've pretty much doubled since then. The latest half year dividend is about an 8% return on my purchase price.
Note in both cases they became big in my portfolio because they grew to that size rather than me making giant commitments to them, and no guarantees they will continue to perform.
For fixed mortgage rates the swap market has already taken into the extent and timing of future OCR rises announced by the RBNZ.
Aren't listings up 100% YOY or something stupid?
https://www.interest.co.nz/property/116341/average-asking-prices-trade-…
Sorry, only 50%, nothing to see here the bottom is in.
Yep stock on hand increased as sales dropped.
“Asking prices stopped falling a month ago”
My neighbour hasn't dropped his 'asking price' since the day it was listed, its still unsold 7 months later!
Tell him he's dreaming !
Wouldn’t waste my breath, plus it’s fun to watch.
That’s a drop of 15-16% in real terms, so far. Already worse than the GFC in NZ
You have to consider it in the context of spectacular and unnatural gains during 2021. Thus a drop of this magnitude is insignificant for most owners.
Significant for non owners then ?
Yes, let's consider it for just a moment. But we're still early on in this "journey", as the article states the following:
Not only are values falling, the rate at which they are falling is increasing.
Some of these 3 monthly falls exceed Ireland's falls in their first 12 months of their crash, and we're only 9 months past our peak. Anything is possible though? Maybe some "white swan" will come along and save the market from its free fall.
A blue swan in the form of a new government, or the hope of such having an effect mid-next year?
National supporters on Labour policies: “Labour are useless, they haven’t achieved anything, you can’t fix the housing market with taxes.”
National supporters on housing: “Can’t wait till National get back in so house prices go up again”
Just basic Entitlement Mentality
Also during 2021:
- 34,493 FHB borrowed $17.9 billion (average $550k)
- 37,736 Investors borrowed $18.6 billion (average $492k)
72k borrowers were on the other side of a transaction that resulted in these "spectacular and unnatural" gains.
... considering that house prices are 150 % above where they should be , a drop of 11 % is modest ...
Looking at Rodney and Waitakare, there are listings within my price range. And the third option is Hamilton. And, no, not a landlord.
Hamilton is a terrible, awful place... sarc
https://i.stuff.co.nz/business/money/300674229/in-defence-of-reserve-ba…
What hindsight is the gentlemen talking about as it was clear as early as November / December that reserve bank's governor policy of LEAST REGRET is a cover up.
Fed governor coined TRANSITORY INFLATION and our governor was quick to pick it up as it suited his narrative.
Referring rest of the world - if they jump from the cliff, should we too. Not to forget that USA and other countries have Big and Diversify Economy unlike NZ......where everything is housing speculation - only economy.
'Central bank best practice' yeah right
Be quick! 1.8% off. Next month it'll be 2% but be quick. Thank goodness sanity is prevailing.
Hi tinny pot tony
If prices are down 2 percent every month for the next 50 months that makes 100 percent right. 50 x 2 simple. You had better wait another 4 years and houses will be Frrreee! Don't forget to wave your tin pot
Pedant time: If prices reduce by 2% per month they will never be free, but will simply be worth less and less, down to a decreasing fraction of a cent.
Put 1,000,000 in a calculator, then remove 2%, and keep doing it until you get to zero, remembering each calculation is another month...then appreciate calculators run out of computational power well before they get to zero.
You can tell HW2 is a lifetime member of the shrinking club of Boomer Landlords 😝
Thank you ... I learnt something
Teacher: if you have one dollar and ask your mum for one dollar how much will you have?
Boy: one dollar
Teacher: you silly boy, you don't understand basic maths
Boy: I understand maths, you don't understand my mum
..... and here we go 🤡
It's a boomer joke that only boomers can understand... these days the mums just give the kids what they want. The mum running the gummint does the same.
Ageist, sexist ....voted
Don't forget to add stereo-typing lol.
The youngsters and not so youngsters do that all of the time to boomers. Boomer rant, ok boomer.
Looks like you're doing it to yourself.
Well howdy Rickshaw
I mentioned two negative labels, and you know in maths 2 negatives equal a positive don't they. So let's be positive! Btw I did not say that I am a B**mer though i might drive a B**mer
(1-0.02)^50: 36%
The irony of having to do this on a financial news website called 'interest': priceless
We shouldn't be surprised at all after witnessing the shonky maths peddled yesterday around the gst on management fees.
Wow maths is incredibly amazing. Seriously though, how long would it take to get to 10 percent remaining on a diminishing value basis.
Also ponder how good, percentage wise, an investment in an OYO flat bought in 1980 in Freeman's bay. Bought for peanuts now worth millyons. Then despised, now city chique
~114 months. Wait 40 years and you’d get one for the price of a flat white (in todays money anyway, who knows what a flat white will cost in 2062)
I can see why you were probably buying houses in 2020...
Yawn still on track for a correct prediction for Tauranga for the year. The gains were so epic they will not get all wiped out.
"Hah, I'll still have my handouts! I'll still have extra wealth the next generations will pay off! Haha!"
Tony Alexander: We’re now in the endgame for falling house prices
Be quick...
Be a quack
.. we're only at the end of the beginning for the fall in house prices ...
Truly a crash taking place in Palmy, ouch.
luckily for TTP he doesn’t own, time to buy TTP?
can’t be good for your business though, these tanking prices???
Wellington City -8.2% in only 3 months, wow!
This is just the settle sale data catching up with what's already happened. REINZ have wellington down -12.7% compared to last year, Corelogic only have it at -4.6%.
Before you realize, prices will be at 2018 levels..
Two of my neighbors are off to aussie
New Zealand can never compete with Australia for standard of living. They are one massive mine and we grow a bit of grass.
Good reason not to hand out citizenship to migrants.
Even more clever, the Australian govt gets royalties for everything that comes out of the ground..... If you tried to replicate that in NZ for grass based production there would be tractors on the steps of parliament.
Don't they pay 15% gst on everything?
😁
But in NZ we don't tax capital so there are a lot of people enjoying an Australian standard of living here.
And we grow less and less grass because of the watermelons...
The two families who come to replace them will need accom
There is no crash in housing stats. We were told that young kiwis would be scampering for the exits and no immigrants would be arriving for sometime and there would be a void. Some anecdotal evidence suggests that. So the number of available rentals should be shooting up. News flash *** the rentals are not increasing... they are falling fast. I think it is good to take the headlines with a grain of salt and do a bit of research.
I'm waiting for the 2008 levels!
Worse than the GFC some are saying...lol , really....Tell me a house in blah blah is worth the values forwarded and I will respond by saying not so long ago many were struggling to get 200k in some of the lower value locales even 100k...Its gonna be hard to make the current values stick with the folk that have good memory recall....lol
The recent price drops many are moaning about are farcically insignificant particularly if you consider the rise in lending rates , I dont see much to howl at the moon about.
is it just me, or does it feel less anxious when seeing house prices actually dropped? how weird of me.
I like the formula Price = Cashflow/Interest rate. e.g. 25k annual rent/0.025 = $1m. But if the interest rate doubles then the price falls to 25k/0.05 = $500k. The resilience of the housing market in the face of recent interest rate rises suggests a significant underlying shortage.
or an indication of mortgage rates overcooked.
Hutt Valley Market Update 29th Aug
I had expected coming into the first week of Sept the number of listings to have risen – but the market is starting to look sluggish – just 11 listings this week to date (keep in mind 25 sell a week) and several are houses that have failed to sell relisting with a new agent.
Continuing to see large drops in listed prices with the average price reduction now close to $110K
The rental market is in rapid decline with the median rent falling from $600 a week to $580 and the lowest number/ percentage of houses listed for rent over $650 in over 18 months (since I started recording rental figures)
Overall a very sad state of affairs for sellers and investors and anybody who bought in the last 12 months.
thankyou for all the comments on the Perth Market last week - a simple comparison on what could happen if there was available land to build sufficient housing for the population
Current Market Listings
538 houses on the market- Down 7 on last week
.
Average number of houses sold each week 25. This is well down on last year where 40 houses were selling a week and at the peak in March 2021 50 houses a week were selling.
538 houses on the market with 25 a week selling means there is 21.5 weeks stock on the market.
House Price Reductions
289 houses have a listed price
68% of the houses listed with a price have reduced their price since listing
The average markdown has surged this week from 107K to it is now $109K (back in March the average reduction was 75K)
Of those that have listed prices (pool 289) -69 have reduced their prices by 100K
23 have reduced their prices by over 200K, 11 have reduced their prices by 300K and 2 now has reduced their price by 400K with the biggest reduction been 455K.
The data continues to show the majority of houses listed are under 900K. The Median house price for all 538 listings has fallen slightly to $795K this month.
Market Valuations
The latest QV valuations (valuations by QV which are updated every month and give an approximation of a houses value) have now dropped $200K since Jan for the Hutt.
Keep in mind new RV ratings for the Hutt Valley are due to be calculated in Sept and released in Nov. A number of people who bought in the last 12 months are going to find their house is worth a lot less than what they paid for it.
As for homes – some massive drops in the last round of updates released last week.
- Woburn (the hutts most expensive suburb) – average house price dropped 120K in value in July and is down 280K from $1.66M (in Feb 22) to $1.38M, this is a 3.8% drop YOY
- Petone – dropped 65K in value in June and is down $180K from $1.19M to $995K and as predicted a month ago has dropped below $1M this month. This is a 10% drop YOY.
- Wainuiomata (the huts cheapest suburb and attractive to investors and FHB’s) – dropped 50K in value in July and is down $140K from $870K in Feb to $715K. this is a 10% drop YOY
Houses sold vs houses removed
My records show 280 houses listed with a Price have sold YTD
I have records of a further 238 houses that have been removed from the market unsold YTD.
28 of those houses removed from the market have been listed on the rental market.
Length of time on the Market
- 391 houses have been on the market for over 30 days - 73% (last week it was 405)
- 313 houses have been on the market for over 60 days - 58% (last week it was 311)
- 215 houses have been on the market for over 90 days – 40% (last week was 215)
- 149 houses have been on the market for over 120 days - 28% (last week was 148)
- 97 of the houses have been on the market for over 150 days - 18%
- 58 of the houses have been on the market for over 180 days (6 months) – 11%
The number of houses on the market over 60 days is now over 58%. This has risen from 32% of houses in mid March (one in three), 1 in 3 houses have now been on the market more than 3 months , 1 in 4 have been on the market over 4 months and 1 in 10 have been on the market over 6 months.
Rental Market
This week the rental market has 169 properties for rent (down 13 on last week) , this is the lowest number since mid April but up 66 on this time last year, – when just 103 houses were for rent.
The lower number of rentals is not translating into higher rental prices as the percentage of properties listed at $650 is down to 33%. This is the lowest percentage of houses over $650 since I started taking records at the beginning of 2021.
Median Rental price for the Hutt valley is $580 a week (this is a $20 fall from the previous $600 a week midpoint)
Average rental price reduction is $54 a week. The number of new build 10-15 listings has slowed in recent weeks but there are still some great rental prices in this space with a couple going for $600 a week for a 3 and 1 new build.
I wonder how much the reduction in rental prices has to do with all the new builds coming on the market being advertised at the rental price the buyers were promised when they bought them a year ago, but who now have to drop the rent because there are a million tiny dogboxes for rent and hardly anyone interested in living in them.
I can tell you that information - 15% of rental listings this year have been for new build properties (i classify a new build as a property built since end 2020)
Average listing price has been $715 - average reduction in listing price is $58 - so the average rental price for these listings is $657.
A number of new properties - which are 3 bedroom, 2 bathroom are currently listed for rent at $685. This time last year similar properties would have been renting for $750 to $800 a week.
I received something from Homes yesterday which indicated a drop over the last six months in Wellington of 38.2%! I have no idea how they calculated that or whether it's simply a misprint, since the falls for the 3 and 12 month periods were much smaller. Perhaps it's simply a drop in sales; it wasn't clear.
However, there is plenty of anecdotal evidence to suggest that price falls in the Wellington region are on the order of 25% or more, particularly out in the provinces.
Here's one, which Homes estimates is valued at $710k; sold a few days ago for $465k; and last sold in 2010 for $255k:
https://homes.co.nz/address/masterton/masterton/91-upper-plain-road/8aG…
cut and paste it please
I don't recall seeing that property listed. A quick google search doesn't bring up any recent agent listings, so could be an off market transaction? E.g. parents selling a property to their child for the 2020 RV?
Could be a private sale. They don't show up on Homes (I know, I tried when I sold privately).
A Wellington home recently sold for $870k after spending some time on the market (started as a deadline sale but was still unsold after the deadline). RV in Sept 2021 was $1,140,000 for a ~24% decrease.
https://homes.co.nz/address/wellington/karori/51-allington-road/o0ay4
Don't agents say the RVs aren't representative at all of the value? That RV was done right at the heart of the bubble. Many RVs are several years old. That house is very old and most of the value is in the land.
It still blows my mind that the average house price in NZ could have exceeded $1m.
... it blows my mind to compare that to the USA , $US 419 000 for the average home : ka-pow , NZ is right out of the ball park ... to infinity & beyond ... in a land which exports , ummm... milk powder !!!!
Why compare with USA, a country of almost continental size?
Well, that's right - our PM told us Kiwis have bigger "expectations".
Compare what you can buy in Australia for the same money and you will see how overpriced NZ is. Time for all the smart people to make that move and yes many are not labour voters. All the dumb labour voters will just watch grant Robertson and Megan woods eat all the pies at their expense and wonder why it's so expensive to live in this racist country
Jeremy Grantham doesn't think we've even started to see the real pain yet. Its ahead of us, not behind us. And our housing market appears to be positively correlated with the US share market (both speculative and rising/falling based upon interest rates/monetary policy decisions).
“My bet is that we’re going to have a fairly tough time of it economically and financially before this is washed through the system,” Grantham said. “What I don’t know is: does that get out of hand like it did in the ’30s? Is it pretty well contained as it was in 2000, or is it somewhere in the middle?”
Jeremy Grantham warns ‘super bubble’ in stocks has yet to burst (afr.com)
Well done Stalinda and Robbingson,
COL - up✓
Inflation - up✓
Fuel - up✓
Taxes - up✓
Murder rates - up✓
Ram raids - up✓
Suicides - up✓
Homeless - up✓
Construction prices - up
Our only asset we can rely on for retirement...
House value - DOWN X
Kiwsaver - DOWN X
What a Stella economy!... And you can't blame C19 for Arderns agenda!
If only housing speculation at the expense of future workers/taxpayer/enslaved renters had not become the ugly bloated balloon animal that it is today. Mass hopelessness was already well underway thanks to boomer greed, so a bit rich to start giving a crap about teenage suicide and crime stats now.
Boomer greed? WTF are you smoking Brah!...
Boomers hard F@$#ng work!!!
And who ends up with the boomers hard earned dosh ...
You and gen xyz aka useless!!!
Always the young obnoxious " save the "gay Maori whale" types that bag the boomers!.
G A L!
And to think, it's usually the boomers calling younger generations snowflakes...
I really think the use of 'greed' is overblown. The sheeple are behaving according to the incentives laid out for them by the ruling elite.
Most of those things you can't blame on labour. They are still getting my vote to try keep National out with their backward policies.
Yes. I vote not National, ACT or Greens.
Well then you are voting to support the backwardsifcation and lowbrowification if NZ .. .
Hope you haven't got kids?!... Cos voting labour and or Maori parties is a sure way of screwing their future, carrying on the " Stalinda culture of crime and poverty", and continuing on the path to racial division.
A vote for labour is a vote for image and "fluffy crap" ahead of substance, unity and progress
Good luck Do you know what a govt deficit is? Have a look 2017-2025 track record and forecast trends and figure out if your taxes need to go up to pay for it.
Fine with me :) I really wish they'd got the capital gain tax through. I lived in Australia for a long time where it's been normal for a long time and I find that NZers are extremely precious and entitled about it, like a bunch of toddlers.
You would be very naive to expect the economy to be in good shape after shutting the world down for two years.
Huh.. explain the many countries with low inflation like. Croatia, Japan, Denmark, Ireland, Sweden, Finland, Slovenia ...
The countries with bad inflation are the countries with idiot over spending leaders.
Covid has zero to do with it!. Stupid reactions to covid does!
- Croatia: 12.3% in July 2022
- Denmark: 8.7% in July 2022
- Ireland: 9.1% in July 2022
- Sweden: 8.5% in July 2022
- Finland: 7.8% in July 2022
- Slovenia: 11% in July 2022
But we will give you Japan, with their 2.6%.
https://worldpopulationreview.com/country-rankings/inflation-rate-by-co…
Where did you garnish those numbers?.
Are the annual?.. nope!
CPI?
WPI ?
PPI?..
Read the link and see what you think 🤔
I read the link. And saw NZ at 2.5%, and then noted the dates referenced were for the most part 2020, some 2019. Not exactly a solid source of information.
CPI. Monthly. I don't think people in Croatia particularly care that inflation was 3.8% in October 2021, when it's currently tracking 12.3%.
- https://tradingeconomics.com/croatia/inflation-cpi data sourced from Croatian Bureau of Statistics
- https://tradingeconomics.com/denmark/inflation-cpi data sourced from Statistics Denmark
- https://tradingeconomics.com/ireland/inflation-cpi data sourced from Central Statistics Office of Ireland
- tradingeconomics.com/sweden/inflation-cpi data sourced from Statistics Sweden
- https://tradingeconomics.com/finland/inflation-cpi data sourced from Statistics Finland
- https://tradingeconomics.com/slovenia/inflation-cpi data sourced from Statistical Office of the Republic of Slovenia
yep - I'm not a traditional Labour supporter but I'm going to vote for them next time to spite all the whingers and moaners.
She's following South Africa agenda, apartheid in reverse. Next steps are the great exodus from NZ. Not all labour govts are the same. This govt takes the cake and eats it too
She's following our cross party support of the UN Declaration on the Rights of Indigenous People.
20 APRIL 2010
National Govt to support UN rights declaration
The statement in support of the declaration:
- acknowledges that Maori hold a special status as tangata whenua, the indigenous people of New Zealand and have an interest in all policy and legislative matters;
https://www.beehive.govt.nz/release/national-govt-support-un-rights-dec…
Racist guy - spouting racist nonsense. Apartheid was a monstrous system and nz tentative efforts re treaty partnership and encourage speaking of te reo are absolutely the opposite of that horrendous system
I'm getting the sense that the lords are getting desperate and anger is seething out of their comments
Here's what the five stages of grief are, and how you can consider and process them in whichever order you experience them.
- Denial
- Anger
- Bargaining
- Depression
- Acceptance
People do have to refix off their 1~2 year rates, new lending has dropped off a cliff.
When the Fed actually pivots(not any time soon) is when I will actually consider making any offers on a property. Pain will continue and I revel in the joy of these comments.
Property speculator phases
- Enthusiasm
- Greed
- Delusion
- Denial
- Fear
- Capitulation
- Despair
Reckon we are between 4 and 5.
... I reckon the range is wider , between 3 & 5 ... Ashley Church is a classic 3 , deluded that we're in a mild blip , and that prices will resume growing next year , onwards to another " double every 7 years " ...
... some friends of my partner are " 5's "... seriously sweating over having paid too much ... and seeing the mortgage rates escalate ...
Hah, not doubt AC is a confirmed Lord of Speculation. Interesting TA latest release advises that Banks will not be discounting rates further due to deteriorating global economic outlook. He also indicated that global heads winds were not going away, making it harder to give the "its all ok signal".
Make of that what you will.
Is TA wearing eye mascara these days in his video updates?
good on you enjoying the moment. the devil of the market is not high or low, it's uncertainty. a tanking market is actually certainty.
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