There was no relief from winter chills at the auctions monitored by interest.co.nz last week, with fewer properties on offer and the sales rate declining compared to the previous week.
Intrerest.co.nz monitored the auctions of 146 residential properties last week (27 August to 2 September), down from 163 the previous week.
Of those, just 37 were sold under the hammer, giving an overall sales rate of 25%, down from 28% the previous week.
If that wasn't the bottom for auction activity it must be very close to it.
A notable feature of recent results is the very low levels of auction activity in the Franklin and Papakura districts on Auckland's southern flanks, with the number of properties being auctioned in adjacent Waikato also at minimal levels.
Auckland and Canterbury remain the two main areas of auction activity, with an overall sales rate of 24% at the Auckland auctions monitored by interest.co.nz, while the Canterbury auctions had a sales rate of 36%.
The table below shows the district-by-district results, while details of the individual properties offered at all of the auctions monitored by interest.co.nz, including the selling prices of those that sold, are available on our Residential Auction Results page.
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185 Comments
Forgive my Facetious comment, but…. Where exactly is “All of Aotearoa” ?
You must be a racist... sarc lol
Did you hear how marama accused those who told her, PM included to remove the chocolate post that they are racists. What a bunch of clowns
Yes it seems he is. Well it's either that or just plain thick, so take your pick.
This pretending to 'not know what Aotearoa is' trope was stale a long time ago.
Maybe you need to get out a bit more, I know plumbing can be exhausting
Spending 10 hours a day in crawl spaces under houses removing wet wipes and corn from traps must be mind numbing.
You are obviously showing your ignorance of plumbers and their job
He's just returning ignorance serve.
Haha, there is plenty more to it than that my boy. I like to refer to that as “Character Building”. You should try it some time.
I think in this case it is Te Ika a Maui + Te Wai Pounamu but should also include Rakiura + Rekohu/Wharekauri.
Hope this helps.
Traditionally Aotearoa is just Te Ika a Maui. It's only a very recent concoction to make it mean anything more.
New Zealand is a far older (and better) name for the country.
Hope this helps.
Looks like the people are starting to get wind that the downturn in housing is with us. House prices are so over valued compared to incomes some places are dropping a $1000 per day crazy to buy while this is happening.
@DTRH, all normal as they went up by more than 1k a day over the past 2 years.
All normal??? Are you for real?
Why would anyone (who doesn't have the impending need) buy an asset that costs as much as a house in NZ does in this falling market? Things have been out of balance for so long and by all measures available are finally going to rectify themselves to some level of sanity.
Greedy speculative "people" (and sadly some FHB's) are going to be burnt - but it is far better for the long term health and psyche of NZ as a whole. Time to give cause for hesitation into the misplaced mentallity that homes should be an investment vehicle and a sure bet - instead of them being first and foremost shelter.
Agreed, there does need to be some rental properties for those that can't or don't want to buy themselves - but anyone with half a brain can see that shit is well out of control.
@amokk, settle down mate - just saying the correction is overdue and normal, we couldn’t expect rises of over 1k a day to last forever. Also, it’s people that try to time the bottom that never end up buying because they thinking “it’ll go lower” and keep complaining. The fact is - If you’re in a position to buy now, you’ll still be better off in 20 years if you buy now. If you base your decisions on todays or tomorrows news headlines - good luck.
Well. it will go lower, like a lot.
And anyways prices are still unaffordable for most.
"you’ll still be better off in 20 years if you buy now" <= this one is just your opinion
"If you base your decisions on todays or tomorrows news headlines" <= for many is not about deciding, talk to the banks. Buyers cannot offer what sellers expect, the game is over.
@iucenera you’re welcome to keep thinking that. Also that is not a an opinion, it’s a fact - looking back in time proves that. If you’re in a position to buy and keep renting, then that’s money gone forever. Not even experts can time the bottom. Also, incorrect - banks can will still let you borrow upto a certain amount. Obviously - That certain amount can get you a unit or apartment to start off with. But no, people expect a stand alone house with a yard as a first home. Therein lies a major issue with peoples mentality.
I am sorry but your logic is flawed. You can't prove anything by looking back in time. All that tells you is what happened in the past. You have to look at leading indicators to try to predict what may happen in the future. In any market things go up and down, therefore it is more than likely that prices will rise in the future and interest rates will fall, but over what timescale who knows.
As a side note - Poor old Nikki Connors of Propeller is sounding a bit desperate in her latest radio ads. Another follower of the past performance predicting future returns mantra.
"Also that is not a an opinion, it’s a fact - looking back in time proves that."
Incredible. Your logic makes it really difficult for me to not make a personal attack, but I'll refrain.
"But no, people expect a stand alone house with a yard as a first home. Therein lies a major issue with peoples mentality."
Haha, for many that's exactly what their parents had. Why should their children expect less? And it's what I was able to purchase as a FHB 20 years ago.
The mentality issue is believing that house prices to the moon makes everybody rich and there aren't going to be consequences.
When it takes more tokens to purchase the same goods and services everyone is fearful and upset with inflation but when it happens to homes everyone thinks it's wonderful. Therein lies a major issue with people's mentality.
@meh you can’t serious right? For expecting your kids to have what you had when they live in a totally different time with increased population etc. You’ve highlighted my point perfectly of how deluded people are today with their unrealistic expectations.
Haha you crack me up. The comment wasn't about what I expect for my kids. You're the one that seems to be upset with what today's kids are expecting. Believing you know what they're expecting is a little arrogant.
It was the "norm" and therefore a perfectly reasonable expectation. What mentality is it that says "we had more for less but the next generation should expect less for more"?
You of course are applying the same logic that by looking back it's a reasonable expectation that house prices and property investment will continue to increase. It's been 20 years of abnormal treatment of houses as speculative assets rather than homes, shelter and security. Given current conditions and issues, many are waking up that this model is only serving a few and are calling for a change.
The rub of the matter is that you've followed a narrative and it's worked out for you. Good on you. That's excellent. But to come on here and spout envy and tall poppy rhetoric, that other's expectations are unreasonable and yours are best smacks of arrogance. Where do you think tall poppy originated from?
@meh the amount of anti investor sentiment on here is toxic, commenters on here are 90% anti and it’s evident they want to see people fail. So pointing out the obvious has further enraged people, but envy, hate etc is clearly The feeling I’ve been getting. No one’s had to balls to maybe spell it out before but I’ve def touched a few nerves doing so. There’s been a lot of personal attacks my way from the likes of independent _observer and Nzdan to name a few, which I’m laughing off but it supports the envy theory very much so. NZ is also full of tall poppy, that’s widely accepted. Like I said previously, maybe we should sit at home on the benefit with no intention of working and perhaps then we’ll be celebrated instead of investing long term whilst made to believe you’re doing something illegal.
Personal attacks? I complimented you on your wall of text "Batman" yesterday and in response you called me a Muppet. After that, you've been non-stop slinging insults left right and center over the past couple of days. Literally posting on here has been a full time job for you and now you're being a sook. Hilarious!
It's arguable this site is anti-investor, but it's most certainly anti-"Big Girl's Blouse" Investors.
@nzdan you and your mates on here may get away with subtle digs at others, but I can recognise them pretty easily, don’t play the saint. Perhaps I’ve been a bit blunt while speaking the truth but try not to take it personally mate. Besides, I’ve been posting for a day, you a lot longer - so maybe it’s your full time job. Another great attribute of yours is repeatedly twisting my words around trying to make something out of nothing, quite a skill you’ve got there. So stop trying to act like a nice guy now, you’re full of sh%t
You're clearly a Prima Donna, don't take it personally though it's just the Internet. Maybe turn the computer off for a couple of days and get some fresh air, life is far too short to get upset because strangers on the internet don't appreciate your "message of truth". Next you'll be trying to convince us the world is flat and there's a firmament.
Oh and don't make me tally up your post count for today LOL.
@nzdan says you, the guy who is on here daily commenting and has the time to count my comments and also hoping to see people fail. I couldn’t care less what people accept, just had to speak some sense amongst the DGms, sorry to burst your bubble. With all the time you spend on here daily, I do sincerely hope you have friends, family to talk to. You won’t see me commenting on here daily don’t worry - don’t want you to get your panties in a twist too much ;p
The problem is that you only recognise property investment as investment. There are many types of ways to skin a cat and its weird how someone who thinks they are in tune with investors cannot see that most people on here have investments just not property and I would say most own property, but most likely own their own house and maybe a bach. Just not investment property.
Most investments are long term not just property like start-ups, small business, interest earning bonds, shares the list goes on. The problem we have with property is that it has become unaffordable for future generations and our disposable cash is getting siphoned from overseas banks and not going back into the economy and helping NZ businesses. Lets hope for more investment in proper businesses I have an affinity for online businesses so that we can bring overseas money into NZ, reversing the flow of money to other countries. I also look forward to a long term trend of house prices moving to a DTI of 3 to 1. This may take a number of years of prices dropping but I have loads of popcorn. Just hope the over leveraged can handle house prices becoming more affordable for the general population. I don't remember property ever being this unaffordable so based on your logic of the past equals the future, then the future looks like affordable houses.
"Also, it’s people that try to time the bottom that never end up buying because they thinking “it’ll go lower” and keep complaining"
Bang on. IO
Real estate crashes take years to pan out. 20 years? Sure, but better to wait at least 2-3 years as we don't know how deep this will go nor how long it will last. There is nothing but headwinds locally and globally.
@dbbr consider how much you’d pay in rent over 3 years, circa 100k. That’s 100k that could have gone towards your own asset. Besides the most likely outcome is that the market will be further out of reach in 2-3 years.
You realise how much asset prices have already fallen in Wellington and Auckland right? 33k p/a is cheap.
@dbbr that is classic short term mentality. How much did they rise since 2018-19? I rest my case.
What case are you resting exactly? That you should buy now, now, really?
Are you going out and buying now? Well good luck with that.
@dbbr, the fact is - people only realise once it’s too late that they should have bought yesterday. It’s too “in the moment” right now. In my very uneducated guess, I feel like prices might be stabilising after going to a few open homes recently and looking at the most up to date data. I’m not advising anyone to buy today or predicting that this is the bottom. But if you’re in a position to buy, it’s always a good time in the long term. Think long term and don’t base your decisions on todays headlines. On a similar note, Warren Buffett never buys at the bottom and sells at the top, because even he can’t predict either.
He's saying that now is a good time to buy because they rose considerably in 2018-2019. That's hilarious.
It's like justifying the purchase of a 5 liter V8 today because petrol was $1.60 per liter 10 years ago.
@nzdan mate I’m not sure what your level of understanding English is, but i didn’t say that. I said that in response to “how much asset prices have fallen in Auckland and Wellington” Just highlighting how people have such short memory and forgotten the massive increases we’ve had prior to that. Clown.
We all know what HAS happened. But we're talking about what IS happening. It's obvious you're taking comfort in talking about the exceptional gains of the past because you feel uncomfortable about the future, which is why you're raging and throwing around insults when people bring it up.
@nzdan, I can’t take you seriously. FYI I’m not taking comfort from anything, just relaxed and not focusing on getting caught up with what is happening on a daily basis and that’s what I keep saying on here. You can keep harping on about what is happening on a daily basis and spend your energy on that, that’s your life. The only person who appears to be raging is you, having taken exception to my harsh truth comments since yesterday.
"I know you are but what am I?".
What was it, 26 comments on that article yesterday? What's it going to be today? LOL. You're certainly getting "caught up" in the hype on Interest.co, trying to set the record straight with everyone and e-thugging anyone that doesn't agree with you.
"e-thugging" LOL
Ram raid of the comments section.
@nzdan LOL did you go back and count my comments? I’m flattered…the difference between you and me - Yesterday was basically the first time I’ve commented on anything here unlike a frequent person like yourself. The aim of my comments was to try provide context of where we are at the property cycle. That proved to be a bit challenging as I quickly realised that 90% of the commenters on here are basically DGms who think very short term, anti investors, love to see other people fail, tall poppy galore and get worked up about daily headlines. I stated facts, and harsh truths that most of you people don’t like hearing, which obviously got you and others triggered. The negativity is truly amazing. So yeah a fair bit of e-thugging as you say towards me I’d say. Enjoy your day mate.
I hope you get the help you need.
The help our property investor class need is a good dose of reality - which might be getting delivered a bit later than needed, but in time it will come.
The property investors I dealt with in the US after the GFC were a much nicer and with far more humility than those I dealt with prior to the crash over there. The arrogance and ignorance goes once one experiences financial pain and understands risk.
@independent_observer your eyes are so filled with envy for everyone to see, it’s embarrassing.
That does appear to be an industrial sized chip on your shoulder IO but I suspect you are reacting to IM's comments.
Investors such as myself are in business to provide a service, which we do, the circumstances of the business environment is fundamentally changed and changing so as business people we need to react to that.
For my businesses, these changes have meant changes to how we operate etc but for now they have had no real impact. Other, more leveraged investors will not be able to do anything other than sell when servicing becomes too much for them.
Investors such as myself are in business to provide a service
LOL! This line always cracks me up.
I sense you might find a lot of things amusing, quietly smiling to yourself with the occasional outburst as you rock back and forth.
I think many people can see the harm that the property "market" has caused in our society, and are hoping for some sort of change. The rate at which prices and rent have increased over the last 10 years has been astounding as I'm sure you're aware. I've got nothing out of the property market going either way - would rather not be involved. But I see a lot more doom and gloom if prices keep going up than if they "correct" a fair amount. And if for that view that makes me a DGM and "out to get investors", then so be it.
@Iceman ....reading your comments on here, and you are the major reason we should get rid of the accommodation supplement !
Taxpayers are sick and tired of the regime of Governments creating a market that "just can't fail" , while using taxpayer money, to help people who can not afford your so called "market rents".
I have had experience in the USA market with the GFC and went in and bought bank owned properties at a discount, with gross rental returns of 12 - 16% ....not the sh*tty 2-3% here !
Never looked back ....... so you can bleat on all you like just how "rock solid" this NZ property market is and you can "never lose" ...but until you have been on the ground in a property downturn, you just don't know, what you don't know.
I guarantee you, you would not be buying any property right now with prices falling....and still falling, so don't run around telling others to buy, just so your capital value of your property portfolio can stay "in tact" .
You should have a chat to TTP, also known as "Taking the Proverbial" - you would get on like a house on fire !! ....no pun intended.
@crazy horse do you know what the first 3 letters in assuming read? Don’t assume I am not looking to buy right now, there are a lot of bargains available if you’re not foolish enough to time the bottom.
Carry on with your "long term planning" mate .....sound as though you completely know everything there is to know, both now and in the future.... and "nothing at all" is going to upset your plans.....so goodonya !!
Wish you all the best of luck mate ....while enjoy the spoils of your wise investments over the years. But keep the taxpayer out of it.
ps - a "bargain" to me is when you can buy and renovate a property and still get at least a 10% return, so if I buy a property for $400k and put $100k to renovate, I would want to see a 10% return pa on capital spent of $500k, so $50k or $1,000pw rent over 50 weeks - doesn't exist, in Auckland anyway.
@crazy horse - I’m always learning mate. and always have much to learn. I just don’t stress/get caught up in daily happenings because there’s a million different things going on and can be twisted into a million different things. Yes taxpayers. Still irks me that our taxes are used to fund lifestyles of people that have no intention of ever working…
dbbr
Do you know that it is now harder to get a mortgage
If the price of a $1 million home fell by 200k to 800k you still need a deposit of 160k
The problem is that last year you could get a loan for $800k to fund the purchase. The difference is that this year the bank will not fund the purchase even if your income has gone up. They will offer you 60 percent of what they would last year, in this 480k, which is not enough to buy the home you want
I wonder who blinks first, the bank or the sweating vendor?
Dear boy, Vendors and banks are not sweating. Been 12 mortgage sales. Compare that to over 750 in 2008
Yet the fall so far is greater than that of 2008...? Not sure the point here. The stories are coming out and they aren't pretty unfortunately, not all vendors are mortgagees.
You have just scored an own goal exposing one reason exactly why house prices will undoubtably drop considerably. Well done housework’s.
I'm unsure what the argument is. Buying power has dropped by 40%, putting massive downward pressure on the market. So FHBs should have bought when the prices were... high....?
People simply can't pay the prices, there are forced sales coming out of the woodwork. Banks cracking down on over leveraged investors. Some FHB may be next.
What happens when forced sales hit a market which is effectively broke. Then what happens when news of those sales hit the headlines. It really doesn't look good - I'd say we're not going back to the highs of 2022 in the next 10 - 20years. Not compared to value of money, wages. Sure we'll hit $1m median price again, but that $1m won't be worth as much. Not even close.
Something something DGM, sure.
HW said on here the other day that he talked his kids into buying their first homes last year (i.e. at the peak of the market). Hence he's quite desperate now to prove that he isn't wrong and that there isn't a bad time to enter the market - even though his kids are regretting his/her advice now to buy when the see the bargains they could be buying if they waited.
Once you understand the situation, you understand the insanity of the comments.
(oh and HW has a property portfolio - so by prices falling its pain all round for him/her).
@independent_observer here we go, another day and more reasons for you to rejoice. His kids will still be better off in the long run as will his portfolio. What’s it to you anyway? You were so keen on finding out how many properties I own yesterday. Haven’t got anything better to focus your energy on besides other peoples portfolios? Quite a chap you are. Keep rejoicing in todays news with your short term mindset ;p
There's a saying 'don't tell me what you think, show me your portfolio'. Once you understand what somebody owns, there's no point asking them what they think. (Taleb)
So if you tell us how many rental properties you own, then there is no point trying to convince us why you think housing investment is a good idea - the reason is because you stand to profit from it being a good idea.
That is you are now a salesman for your own investment, but you may not be conscious of that.
@independent_observer, yep good luck with your personal journey on finding out what people on here own. I’d spend my time more productively.
By being a property investor during a housing affordability crisis - yes a highly respectable and ethical use of your time and effort!
@independent_observer, that comment sums out how ignorant you truly are. I’ll give you a much needed hint - Just imagine a country with no property investors or rental. Keep embarrassing yourself mate.
There will still be the same number of houses, just different names on the titles. Will probably consist of 70% home owners and 30% social housing tenants. Productivity will go through the roof.
@nzdan LOL yep all renters, students etc will magically have the urge and means to buy houses. Seems realistic.
I too remember earlier decades with far more affordable housing.
I did not talk them into it you half wit
I offered them a way out if they think they're over their heads
Which you also admitted that you can't afford - all good. As I say, once you understand the situation, then you understand the irrationality of the comments.
P8 was the same. Couldn't never understand why he was religiously trying to pump the market in 2021. It was after he admitted he was doing it so that his kids could sell out of their property portfolios last year. And once they were sold out of the market, he's disappeared from the site - he no longer needs to spruik the market because its no longer in his personal benefit to do so.
For your benefit, house prices falling is a terrifying prospect - hence the desperation to deny that there could be better buying opportunities in the future even though there is a high probability that there could be.
If that makes me a half wit in your view that is fine...but perhaps you don't fully understand your own motivating factors (and whether you are approaching the discussion without a severe dose of bias).
Not couldn't afford, have another property am doing due diligence.
Fyi we bought in 2020 and 2021 so want to make a trifecta. I am at the risk of provoking gingernut by telling you this
There's an Iceman Property Limited on the companies register. I wonder if it's any relation to poster Iceman on this website. Incorporated in 2020...if it is one and the same then no wonder he's on here trying to spruik, might have piled into the party too late.
Oh dear. Must suck to be the one at the bottom of the Ponzi piramid.
@nzdan mate don’t get too obsessed with me. I can confirm that is not actually me, I’ve been investing for a lot longer but jeez top bloke you are with a personal vendetta. You try playing the nice guy in your other comment, but really - you’re embarrassing yourself
I actually remember you saying you tried to talk them out of it.
Those who got into the market last year are going to be damaged by this, is a very substantial way, but if they ignored your advice what can you do?
We have a long way to go in this depreciating market, but we should remember the stupid pace of house price increases over the last couple of years.
The Avg price Jan 2020 was just $728,723, Jan 2022 it was $1,063,765 an increase of $13,960 each month over that period ($465 per day). If you have not bought in the last two years (I have) then you won't be very bothered until there is a much more significant drop.
On the plus side, you wouldn't already be in negative equity, and staring down the barrel of the biggest crash we have ever seen.
I can't believe you are suggesting someone should have purchased a $1 million home in hindsight of what has already taken place in a very short time.
This is such a selfish attitude, it's obscene.
Would you rather someone who doesnt want to be stuck in a rental for the rest of their life. When they could be mortgage free and paid off. Really dumb financial plan
Did I say that this hypothetical person should rent for the rest of their life? :D It's not a binary option.
Its because he talked both his kids into buying their first home last year! Hence the desperate attempts to save face and convince everyone there is no point trying to time the market.
Dumbass went to auctions in 2013 and thought prices were too high so he would wait...
Don't misrepresent me
I'm just a 'doom gloom merchant' so who really cares about misrepresentation right?
That speaks volumes IO. I think what you are saying is half in jest
@HW2 hahaha mate don’t bother with that clown independent_observer. He appears to be the most narrow minded misinformed person based on what he says on the comments section.
Maybe he is actually quite intelligent but those ones can be the stupidest dreamers. Self taught I suspect.
I suspect that IO's investment portfolio is doing better than the average. And imagine that it would be fairly well positioned for the current (fast changing) environment.
Just because someone does not invest heavily in property, that does not make them a "dreamer" or "anti investor". It may be that they simply choose more profitable or rational investments.
Do you know that it is now harder to get a mortgage
The problem is that last year you could get a loan for $800k to fund the purchase. The difference is that this year the bank will not fund the purchase even if your income has gone up. They will offer you 60 percent of what they would last year, in this 480k, which is not enough to buy the home you want
So you are saying that it is great to have a ton of debt that one can in retrospect not afford? In a scenario where the buyer thought they could afford the debt while interest rates and inflation were low?
How about rather waiting for the FOMO mania to calm down and for vendors to realise that those crazy prices no longer fly? Then you can buy the same house with a much smaller deposit and loan. Sounds like a win to me.
consider how much you’d pay in rent over 3 years, circa 100k. That’s 100k that could have gone towards your own asset.
Except it isn't. You are conveniently omitting rates, body corp (if exists), insurance, maintenance costs and the opportunity cost of ROI on the deposit money and surplus funds saved.
I built a spreadsheet calculator for this analysis some years back. Let's take some variables — $1m purchase price house, $200k deposit, 30 year mortgage @ 6%, annual rates and insurance of $5.5k and annual maintenance of $3k (which comes to $66k in annual ownership cashflow requirements for an annual equity gain of $27k — averaged over the life of the mortgage, of course) vs averaged annual rent of $30k and an after-tax investment return of 2% (an easy withdrawal notice saver) on the initial deposit savings plus surplus funds saved each year.
At 0% annual capital gain over the comparative timeframe you are $14k worse off per year owning vs renting and investing your deposit and surplus funds. If that house falls in value by 3% per year, you are $44k worse off per year owning. At a 5% value fall per year (which would be about a 12% decline of the purchase price over three years) you are $65k worse off per year owning — almost $200k over three years.
With these variables you need at least a 1.5% annual capital gain (which accumulates to about 4.6% over your three year time frame) to break even with owning vs renting. Let's say the house declines in value by 7% over the first year, crudely in line with bank projections. It has to gain 9% over the next two years to hit that break even point.
@braindrain mate you can come with all your fancy calculations, at the end of the day my portfolio has grown using the power of leverage and tripled. You’re not going to convince me or any long term investors I’d bet better off not investing. I admire the effort the antis will put in though haha
Yeah @BrainDrain Get out of town with your fancy maths!!
I'm going to keep doing things that worked in the past, in the hope that they will still work when the environment changes.........
F**k don't mention your portfolio value around here iceman... sarc
Even if in response to others dumbass misrepresentation. It sets a few of them going, and one in particular... actual fact
@HW2 bang on. What I’ve learnt from my short time here, the commenters are a bunch that get excited by daily headlines and don’t have a long term growth mindset. Probably just envious because they haven’t been able to achieve much so love to bang on others who have. Classic syndrome amongst them.
Your long term mindset might want to look at the long-term debt cycle and the circumstances that cause leverage to work the other way.
PS not envious, I am a long term investor (mostly not property) and will be retiring next year in my mid-40s.
Retire early die young :(
I am only retiring from working for money. I will continue to do any meaningful work I choose to but all my bills and spending will already be covered.
Brilliant post - I wish more FHBs understood this
I think you'll find that because the rental yield is lower than mortgage rates, that every cent of rent would only go to paying interest to the bank and you won't gain anything in this market by owning. In fact you're better off renting and putting any deposit into a TD. I wouldn't bet on housing being higher than now in 2-3 years.
On a 30 year mortgage most of what you are paying in the first 3 years is interest. In a market that is falling 20% per year you would be far better of financially if you rent until the dust settles. You won’t pick the bottom until it has passed. Most commentators didn’t pick the Nov peak until feb/March. But better to miss a small rise than lock in a huge loss. I bought in 2016 and would not be surprised if we get near or below those levels prior to recovery. Unless LOTR on Amazon leads to an influx of migrants!
Reserve Bank picked November 2021 peak via monetary policy statement and OCR forecast.
Did someone say "leading indicators"?
Yes, that's why I said most. Not all. For those following closely it was fairly obvious, but for the masses who look to the likes of Ashley Church and Mike Hoskin for advice, it wasn't picked up for at least 3 months.
Yes, I believe Japanese house owners are barely above water from (nominal) prices paid in 1990.
Meanwhile in Ireland it only took 15 years....
Residential Property Price Index in June 2022 has equalled its peak of the boom value of April 2007
https://www.cso.ie/en/releasesandpublications/ep/p-rppi/residentialprop…
If you’re in a position to buy now, you’ll still be better off in 20 years if you buy now
Tell that to the Japanese. Ireland also still has not overtaken its nominal peak of 2007 - looks even worse inflation-adjusted now.
I am pretty sure the spruikers would prefer you not mention this, they are in the angry denial phase at the moment.
It looks like Ireland's index is back to the peak of 2007.
Residential Property Price Index in June 2022 has equalled its peak of the boom value of April 2007
https://www.cso.ie/en/releasesandpublications/ep/p-rppi/residentialprop…
"The national index has now reached the value of 163.6 points, which is equal to its highest level at the peak of the property boom in April 2007. Dublin residential property prices are 8.1% lower than their February 2007 peak, while residential property prices in the Rest of Ireland are 1.3% lower than their May 2007 peak"
Looks like prices are still lower though.
Nominal or inflation-adjusted?
"Normal" is a big word.
This is anyways a natural unavoidable completely predictable outcome.
This "normal" will keep going for a good while.
I am watching it with immense amusement
I have never seen such low amount of auction sales, iceman you fit in well with this picture it’s going to be cold and icy housing market for more than a couple of years anyone who got pulled into market through FOMO or thought emergency rates were going to stay forever will be paying huge mortgage debt for years and wishing they never believed the B/s hype from a group idiots who have no clue of the damage they do to families. Iceman it Sound like you are still getting played by them.
@DTRh, mate if you haven’t seen such low amounts of auction sales, you haven’t been around in Nz property long enough. So it’s rich that you’re calling others idiots on here.
I’m def not getting played by anyone, have been investing for a long time and have made good decisions which has seen me through corrections just fine. Each time there is a correction, the newbies or people that didn’t buy keep going back to “Ireland”. We hear this time and time again but it’s basically just noise.
Until it isn't.
Current negatives: high inflation, rapidly rising mortgage costs, removal of tax incentives, low immigration, falling currency, high input costs
Current positives: a belief that house prices only go up
A little more digging found this: Remember the last time house prices crashed 40%? - Greater Auckland
NZ's 1974 prices were not overtaken until 1996. How many boomers can wait 22 years before they sell? It was also the last time inflation rose quickly. Inflation Targeting in New Zealand: an experience in evolution - Reserve Bank of New Zealand - Te Pūtea Matua (rbnz.govt.nz)
@kiwimm you do realise that those are standard factors during corrections and they don’t last forever right? #short term mindset
I am thinking long term - 20+ years to be precise which is the length of time inflation stayed high after it last rose this quickly.
Iceman is the result you get when a central bank keeps bailing out an asset class - they assume they are a genius, when in reality someone else has given them a free ride all their lives.
And now that central bank is no longer in a position to give a free ride to them, its just that by conditioning, they can't see it yet as they expect the past to represent the future.
Talebs turkey comes to mind. Once you conditioning something one way, it always expects it to be that way. So when thanksgiving arrives, its a shock when one finds oneself being eaten....'how did that happen?!"
(but given the panic in his comments, I get the feeling deep down he's actually a bit concerned that this time it might really be different - and if you monitor the FB property investor pages, those on there are sensing it now as well).
@independent_observer, nice essay. Investors hear this talk all the time by everyone wishing the market would “crash” I know who ends up better off…
They clearly haven't benefited in humility and the development of good principles and character.
Think I'd rather be for the little guy, and be for financial and social stability, than oppressing the little guy ind creating more financial and social instability - and all of that just for ones own personal financial gain.
Are you sure you want to destroy your soul in order to become rich by this property investment craze? (I've met guys similar to you in person and it doesn't end well....often the wife and children disown the father because he's lost his mind with his complete obsession with property investment).
Iceman, you are not an 'investor'. You are a speculator, enabled by central banker's policies of low interest rates, that hiked asset and stock prices. Follow the 'Fed'.
@fossile lover your word must be law that I am a speculator. Good on you mate.
Lol! I'm actually just reading this book for this first time, and that is definitely spot on! They have been conditioned.
You have been played just don’t know it yet. You will disappear of this site soon once the penny drops, every day more bad news come in warning the likes of you forever seeing but never perceiving.
@DTRH that’s just wishful thinking. Most investors will continue to hold as there is no need to sell. Could sell (for profits) to consolidate portfolio and sit tight for the next few years too if wanted. So if you’re wishing for others to fail , perhaps take a good look at yourself :)
Can only sell if there's a buyer to purchase. (for profits) is not guaranteed, and may be adjusted significantly downwards over the next few years.
Of course, if you're sitting on very long term property, profits will be nominally greater, but every drop in the market drops the yield as a %pa over the lifetime of the investment. Some will make it out ahead, but as to whether they would've gotten better returns from investing in something productive instead, well, who knows? But they'll still think they're clever, simply because of the circumstances they enjoyed when they first purchased (which are likely to be considerably different than for those who came later).
@chaosinflesh “investing in something productive instead” You obviously understand Leverage really well “clever” guy ;p
And its clear you only understand one side of leverage and not the other - does that make you clever?
@independent_oberver, I see you are triggered by all my comments to everyone and must reply to my comments, let it go mate, don’t feel too sorry for yourself.
I don't feel much pity for myself, but more for grown men who have lost their minds to greed.
@independent_observer you don’t come across as sore sorry loser at all mate with your comments. Don’t confuse long term investors with greedy people. I feel like I’m speaking to a child.
Well, I hope so. I did do my Master's in econometrics for speculation.
But feel free to educate me as to how rent-seeking is a productive enterprise, and not a parasitical endeavour leeching the economy's lifeblood from the serfs for the engorgement of a few rentier's portfolios.
@chaosinflesh you sound highly educated indeed. Perhaps you can tell me about A perfect Nz if no property investors or landlords. Wake up from your dream.
It wouldn't be perfect, but, house prices would be a lot lower and more people would be in their own homes.
Remove investors = reduce demand by ~30% (figure now out-of-date, that was a few years ago before Orr appeared). Prices would rise slowly, if they rose at all.
Remove landlords = people who can't afford to purchase their second, third, xth house without rental support, wouldn't. Reduced demand, again prices rise slowly if at all.
Landlords like to say they are providing a service by out-bidding FHBs and renting back to them. It is true there are some who prefer to rent. I don't know if I've ever seen any stats on how many are renting by choice vs no choice, but I'd bet that over time that has changed heavily towards no choice [I mean, the only other choice is homelessness].
As a side effect, the building costs wouldn't have risen so astronomically either, because they rose to match the finance people were getting, and just perhaps maybe we would've seen more investment in productive enterprises that make everyone's lives better.
I'm also willing to bet there would be far less disenfranchised and thus lower crime.
You're right, I'm dreaming. But dreams can become a reality (don't trust anything that can be legislated away) and a good first step would be the introduction of DTI and LVT.
Yep. The "desirable" tenants that most landlords want are:
- working
- in a stable relationship
- drug free and have their lives sorted
- able to make regular rent payments without fail.
In other words, they are exactly the kind of person who would be able to purchase their own home in a saner, less distorted property market.
Landlords who rent to that kind of "desirable" tenant absolutely are functioning as society-wrecking vampire squids, even if they don't realize it.
Society wrecking vampire squid
Quite a description. So what mad cap novels have you been reading
@Chaosinflesh sigh, that's a typical comment I would expect from a keyboard warrior who probably is not actively involved in the market. What was proved during the peak of the market after all the anti investor laws were put in, it was actually first home buyers competing with each other and driving up prices at the lower end. There were hardly any investors in the market FYI - but you carry on reading perhaps NZ herald articles and come up with your story.
lol comrade you are right on! We don't need this capital, central planning is the way forward!!
Just facts, housing market is falling, rates are climbing, inflation high and NZD tanking. Looks like the party is over and you and anyone who listen to you will have a large hangover for years. It’s ok to sit it out and watch portfolio lose value it’s probably to late now anyway smart investors sold end of last year. How did you miss the top will be costly mistake, if you are over leveraged go see a financial adviser as it sounds like you need professional advise.
@DTRH the same shit happens every cycle mate. Anyone with a long term growth mindset calls this “noise”
Iceman did you call a financial advisor as you seriously need someone to help you. If you can take HW2 with you as he is another person who needs advice on financial matters.
@DTRH, why would I need a financial advisor when I am likely set up for life? I do think you need help though…
Iceman With the information and comments you make I would be surprised if you own anything more than a Lego house even then you would forget to put in windows.
@DTRH. Perhaps I am the idiot who can afford to retire tomorrow. You keep commenting on here daily mate, as you were.
The photo does not represent nz properties, it looks like the back of China or bolsheviks. By and large nz property and climate is very attractive to foreigners and immigrants even if we cannot see what we have
Yes, that is true. NZ's vegetation is a lot greener. As for the condition of the house in the picture, most FHBs would have seen houses like that one in the past year or two.
Tui ad from tuisbest
If that wasn't the bottom for auction activity it must be very close to it.
I'm wondering why auction activity won't be able to fall further. But I guess this could be rock bottom - as in it could barely get worse than selling only 37 houses in 'All of Aotearoa' (...) via auction, which is practically the same as selling 'nothing' via auction.
Economic winter has arrived. The ants have been preparing all summer long, storing away supplies. The grasshoppers thought that the party would never end. Now what will they do?
in a fast falling market - put up an optimistic (bordering realistic) price and then negotiate. Otherwise you are wasting both parties time, money and hope ...
Just like the OCR, it hasn't hit its worse level, and I'd expect it stay at that level longer than early expectations forecast.
Why Some Cities May No Longer Be Viable
These longstanding economic foundations began shifting in the 1970s. Slums and manufacturing were deemed undesirable for environmental and aesthetic reasons, and globalization began chipping away at manufacturing within costly urban zones as production was shipped to lower-cost regions.
The other core dynamic of the past 40 years, financialization, replaced value-added trade and goods with value-added financial instruments and services. As globalization and financialization transitioned to hyper-globalization and hyper-financialization, cities became magnets for real estate speculation, global capital seeking a safe place to park money, healthcare and higher education. status-enhancing conspicuous consumption and entertainment, i.e. the good life of diverse cultural attractions, neighborhoods, venues, cafes, bars and nightlife, all of which are the foundation of global tourism, now the primary industry in many cities.
The shift to finance funded both the speculation and the consumption. Cities morphed from centers of value-added manufacturing and trade to financial transactions and the origination of financial instruments, developments which enabled and expanded a series of ever-larger speculative bubbles.
Cities have always been more expensive than the countryside, but hyper-financialization has boosted urban costs to the point that only the top 10% or 20% can own their own home and afford all the good things the city has to offer without family wealth or speculative gains banked by playing hyper-financialization games.
Sounds like Auckland!
Global Economic Winter, with no gas in Germany.....
Indeed. Read last week the top Google request in Germany was "firewood".
Maybe NZ should incentivise a whole lot of Germans to come down to NZ for their coldest part of winter.
It was posted the other day that it is cheaper for someone in the UK to spend three months holidaying in Portugal over winter than paying the energy bills. Average (not high, average) yearly energy bill in the UK is $7,000.
Economic refugees? They might be seen in the same light as those from Africa. The clock turns!
Activity is bound to pick-up, as mortgagee sales are mainly vià auction
I think mortgagee sales will be a different kettle of fish in this new environment. What better location for an all-in protest?
An advertisement at the bottom of this interest.co article made me chuckle.
Landlords, are you ready to retire?
Find out more, Angela Webb, Bayleys.
A real estate boom is like a gold rush, a moth to a flame for the high eq low iq types who want to make a lot of money fast. Well, the day of reckoning is here. Best case scenario 25% of agents leave the industry and it could be as high as 50%. You can add to that all the peripheral industry's like lawyers, conveyancers etc etc.
I'm sure the Interest community will join together to wish them well.
Hmmm, not so sure about 'High EQ'....
From someone who dealt with AW, she is pretty slippery and underhanded. Youve been looking to buy in chch, what is up with the munawatu
Nah I haven't been looking at all. Maybe my wife was? We're from Christchurch and one of her relatives (who currently rents) was up last weekend from Christchurch, so maybe they've tainted my cookies.
Per REINZ circa 4,700 properties sold in NZ in July. Apparently per this article 37 sold at auction in the WB 27 August.
I think we all have gotten the point re the crash in auction activity. Unless something dramatic changes, it seems a waste of time writing about auctions or auction results.
Auction this morning:
https://www.barfoot.co.nz/property/residential/auckland-city/meadowbank…
QV estimate 560k Homes.co estimate 650 - 680k
CV 600k
Sold 402.5k
#2 sold 18 months ago for 540k
33% below CV, any reason for that? Otherwise, that's pretty bleak.
1 bed, 1 bathroom, 1 carport with 5 immediate neighbours in meadowbank? Still overpriced at ~400k.
It's a gross yield of about 5% for a Landlord.
Don't mention that to Fritz/HouseMouse or he will get extra snappy
Lol
Any reason for that?
Hmmmmm.....market is tanking????
Agreed, this is a great buy! $500/wk rental, assuming a 300k mortgage that is $500 a month in the hand to spend on rates etc.
Why assume a mortgage though?
Simply for the base case, of course they may have none at all but that would not be the norm.
It's irrelevant if there is a mortgage or not when considering gross yield. Quite a few people may have been tempted to purchase this property for cash.
However a common scenario would be a cash deposit of 100k and a 300k mortgage. Then fingers crossed that interest rates go down, rents go up and property values rise over the next 10-20 years.
A stable market in all respects is the best I think. Steady as she goes, pay off the mortgage, whether investor or owner occupier. Be freehold before retirement and provide a stable environment for children and family.
The ideal at least :)
It’s been great entertainment reading our new Spruiker Iceman, and old hand HouseWorks, getting so worked up into a tiz.
I suspect this Spruiker tag team are really quite worried.
oh well, could be a good lesson on its way for them about the perils of human greed.
I agree! What an entertaining bun fight this turned into.
Here's what I'm taking away from it all"
Boomer Property Investor: "I'm so rich and so smart. Way more savvy than today's stupid young'uns."
Also Boomer Property Investor: "Now don't confuse me with some fancy maths." (Or any maths, for that matter..)
Also Boomer Property Investor: <Insert any spectacularly preposterous argument here.>
(My apologies to any smart and savvy boomers and property investors who do not fit this stereotype. I know you're out there, but your peers who commented here didn't help your image in today's race to the bottom.)
I hope you can find what you are looking for TB. For what it is worth, money isn't everything, but having the basics in life is far more important than a big bank balance. If you have a big bank balance and high net worth it is necessary to know how to handle it right. Make money work for you and not the other way around. When the next generation comes along it's our job to show them the right way to do things
Hmm so the country is in crisis and many can’t afford the basics. Investors and speculators have taken advantage of poor policy and planning to “get ahead” but have really just pushed many below the poverty line.
Let me ask, hypothetical question, would you sell at break even if it meant future working class NZers could move out of their car and into a home? Or are you in it to profit off of them once they can afford rent?
Not looking for “I provide a service!” or “if I sell there’s one less property!” drivel.
If selling helped rental and price affordability for NZ families and you could help at no cost, only a forgoing gains, would you?
I know you are looking to broaden your portfolio, but when you say the basics in life matter more than what’s in your bank, does that not apply to everybody? Do we really need to suck so much money out of the economy only to clip the ticket and send the rest to the bank? Then celebrate unrealistic capital gains as if we don’t know it’s putting the next generation in financial ruin?
”Best time to buy is now, you should have bought yesterday!” is gaslighting bs afaik. Anybody actually listening to this advice will get dragged down with the ship.
I recommend you take a wide angle view instead of a close up with your zoom lens malamah. Tell us about yourself
There’s your answer I guess. What a shame.
You are boring. I guess that's the answer
I hope we have another Housing related article today so we can start it all over again. This Iceman fella must have literally spent the whole day from 9 am to 6 pm refreshing this page to seek out new comments to bash. A midget in person and a mountain on the internet.
Hahah... I'm pretty sure he was thumbs-upping himself too. Double meaning intended.
Fritz/HouseMouse
There was many contributors today on both sides, all added something to the discussion. And good entertainment
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