House prices continued to slide down from their recent peaks in most parts of the country in March.
According to the Real Estate Institute of NZ's House Price Index, which adjusts for differences in the mix of properties sold each month, prices across the entire country declined another 0.8% in March.
In Auckland prices declined by 0.7% in March and the rest of the country excluding Auckland prices were down 0.9% overall.
The biggest monthly decline was in Gisborne/Hawkes Bay (-4.0%) while five regions, Northland, Manawatu/Whanganui, Taranaki, Canterbury and Southland went against the national trend and posted price increases for the month.
However prices in all regions are now lower than they were three months previously, and prices in all all regions are well down from their previous peak.
Seven regions have recorded double-digit percentage price declines form their previous peak, with the biggest decline of -24.8% in the Wellington Region and the smallest decline of -6.0% in Southland (see the first table below for the full regional figures).
The REINZ's median price figures give an indication of how much prices have declined form their previous peaks in dollar terms, although it must be noted the House Price Index and median prices are calculated differently and are not a direct comparison.
The second table below shows when median prices peaked in each region, what the peak price was, and how much it had declined by March this year.
This shows that the first region where prices peaked was Wellington in October 2021, but it wasn't until November last year that they peaked on the West Coast..
In dollar terms, the median price declines from their peaks range from -$25,000 in Southland to -$299,400 in Auckland.
Median prices in 10 regions - Northland, Auckland, Waikato, Bay of Plenty, Hawke's Bay, Manawatu, Wellington, Nelson, Marlborough and Otago have declined by more than $100,000 compared to their previous peaks.
The comment stream on this story is now closed.
REINZ Regional House Price Index - March 2023
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106 Comments
Best time not to buy a house - Nov 2021 (From the cold hard data)
Best time to buy a house - Yesterday (From the Spruikers book of Gospel)
Didn't you make a lot of money buying and then selling property?
what idiot managed to lose money in real estate?
The person that bought your property?
Just saying that at certain phases of the property market, actually more often than not, spruikers were right. Especially so if one managed to sell at the time you did.
True that, he is down well over 1 mil and growing, at current rates prob down 1.25 as he has no building conscents. He may hold it and ride, or may sell once he gets conscent etc..... I cannot see him risking building in this environment, as he is new to the game.
He bought at an online auction without ever physically seeing the property...... during Level 3 lockdown.
As you know you need multiple bidders, having rank group pushing it along helped
You know what's the dead giveaway when you use other accounts ? I won't say which ones, one of which is banned already.
Your spelling 🤣
And I love it when you start talking to yourself but at least it saves you the embarrassment of a telling off for posting too much.
Still more ad-hominem and nil insight in your comments. Its like you're compensating for something by over-representing yourself with nothing of value. Just sayin.
edited.
You just dont get me. You say its ad hom then do it.
OTY
Constructive criticism is too hard to swallow - (I get you now)
‘actually more often than not, spruikers were right’
As was Talebs turkey. But the turkey, in its blissful ignorance, was completely unaware of what it did know. Thanksgiving came. It was no longer a turkey. It was lunch.
False analogy.
Most of the property buyers got fat and retired, living long and fulfilled lives, in the real world.
With Taleb's turkeys they all got butchered.
'False analogy.
Most of the property buyers got fat and retired, living long and fulfilled lives, in the real world.
With Taleb's turkeys they all got butchered.'
If the property spruikers on this site (and who I have met within society around NZ) are what you describe as 'living long and fulfilled lives, in the real world' then indeed we have our differences of opinion.
(many appear very fearful and afraid that they have received more than what they have produced/worked for and as a result have a false sense of achievement - while others suffer from a severe entitlement mentality - none of which result in a person who has lived a fulfilled life. Many are also terrified of what is happening to society and that their own children will never experience or have the same opportunity/stability that they have had. They are caught in a confused state of both fear and greed. Greed because that is what has worked for them. Fear because they know this strategy is unlikely to work for their children. Hardly fulfilling in my opinion).
Regardless of what you "imagine" it's still a completely faulty analogy.
'Regardless of what you "imagine" it's still a completely faulty analogy.'
You can argue that one with Taleb if you know better - OTY.
(and yet oddly your own behaviour shows me otherwise. I know that you're not the Turkey because you sold/or didn't buy more property before prices started falling (you've talked about this on here and convincing your wife it wasn't a good idea even though she disagreed) because deep down you knew there was something wrong about what happening in the property market - that thanksgiving might be coming - even you have acknowledged that in the past on this site. But many people are still in denial that property prices are falling or could fall further and that this could wipe out their rental portfolios.
With this, your own behaviour is evidence that the analogy has merit - are you conscious of your own opinions and behaviours and how they change over time, or do things just happen and you just change your views as they do? The turkey will argue it is impossible to know what 'might' happen - the non-turkey will change their behaviour before thanksgiving to avoid losing their head - and you changed your behaviour before what appears to be thanksgiving).
It never ceases to amaze me how people contradict their own views - as Taleb puts it - don't tell me what you think, show me what is in your portfolio. You Mr Smith used to be a property spruiker on here and then you have turned into a DGM. Why? Because you are not a turkey and knew that thanksgiving was coming. But there are still turkeys out there - gobbling away.....
No it is not
For an fhb, 20 or 40 years from now it won't matter
A bit like whether you bought in Oct 87 or Oct 90
Can we start taking bets on when we will see a median increase in Awkland. Or is it still too far off
That feels like something you tell someone who has already bought a house and is concerned about prices dropping in order to console them, rather than something you should tell anyone considering buying a house.
Potential FHBs who have spent the last year sitting on the sidelines have saved themselves up to hundreds of thousands of dollars, and could do so again by waiting a bit longer. That's not something that should be flippantly dismissed when it could have added a decade to their working career in order to pay off that extra debt.
5 out of 12 rose
HW2 Goodonya mate ! ....you just hit a nerve about Auckland property prices, as I was just "cold called" by a certain NZ property investment co. (who shall remain nameless) asking if I wish to invest with no deposit down etc and in that conversation, the term used was "Auckland property is armour plated" as there always someone to come along and “clean up the mess” This got me thinking, so I am now going to "jump ship" and come over to your side of the fence, as I now believe, despite inflation, low wages, high interest rates etc this is still enough $$$ lying around in term deposits, trust funds etc out there for property investments and it will get to a point where parties who have a 40%+ cash deposit will swoop in and buy, but good, solid properties in reasonable and above areas.
So the median Auckland property is currently $1,000,600 and my take that it will never fall below $900,000 for the rest of this year, up to 31 December, 2023.
High prices are just so “ingrained” in this town, I now just can’t see them coming down much further, while increased immigration and student numbers will only provide a further support mechanism.
So all of you out there, what’s your pick for the lowest median Auckland property price for this year ?
Sadly you are joking I feel. I still will print and frame your comment and place it on my wall for old time sake. I am joking as well.
HW2 ...I can see why you may have taken my comment in jest ...but for prices to fall further, it will just comes to a point where the vultures will come in on these lower values (especially with the low value of the NZD) ...anyway this market is so crazy, on so many levels anything can happen ...so let's see.
Vulture? At some point the risks of investment property ownership vs. risk free returns will entice people into the market. It shouldn't be through the continuation of perverse incentives (I fear National is going down that rabbit hole), but because it stacks up on a willing seller/buyer basis. Good property investment can also be values-based, if you think reduced returns are worth the social outcomes
But for us and our rentals... we're taking a bath now that capital gains have disappeared. And our worthy cause tenant has left us with a $29k repair bill.
Not sure whether any vulture would be interested in the current market, given the risk-free yields available elsewhere.
All the best
You are assuming in the next 20 to 40 years we will see house price rises like we did in the last 30 years. So houses will go from extremely unaffordable to extremely extremely unaffordable. Seems unlikely to me.
The next 20 to 40 years will see a tonne of inflation whether at 3 pct or 6pct. Prices of goods and services will double then double again and possibly again. Wages will be going up and up, but yes you're biased when it comes to house prices and rent prices
Quite a lot of house build 20 to 40 years ago are falling apart and many houses being built now will be rot boxes in 40 years time.
2003 was a good time to buy too. Newly arrived from the UK and I'm still living happily in the same North Shore property (although it sure needs plenty of repairs). On the other hand I read of another Pommie arrival that year who paid a little more for a better-looking house and it was a leaky home - about three years later with children ill from dangerous fungus in the woodwork he had the house demolished. Whatever his insurance certainly no one would want their experience of Auckland's booming house market. I wonder if they ever comment on this website?
Housing has been a good gamble for many of us but the losers are forgotten.
Don’t forget the war children,coming to a country near you.
Greg - would you be able to publish a one off table that showed the median price from 5 years ago in the same table? One would think that the regions that have gone up the most will also suffer the most..... but maybe not.
Thanks so Auckland has another 130k to get to 5 years ago.....
Waikato has a long way to get to 525k
Good title image - Snakes and Ladders
So Auckland median house prices 5 years ago were $870k….About where they’ll be in 12 months time
Will some of the regions catch up to Auckland’s and Wellington’s fall in prices. Probably not. But there is more losses of differing degrees to come everywhere. The cost of living is still rising in a scary way. Interest rates are yet to rise for many. Rates, insurance premiums, food and power increases are hitting people hard. I am aware of two start ups that have laid of nearly all their staff as it’s impossible to raise new equity. If you need to sell do it now if you can get an offer. Don’t buy your first home now as you will be borrowing money you won’t need to borrow in the future. Be patient. Buy when interest rates turn and inflation shows clear signs of stopping its current climb.
We are after new vehicles. One PHEV new and a little Toyota for daughters to learn to drive. Local Toyota guy told us he has seen a lot of people trading in 30-40k bigger cars and buying Corollas etc at 20k, says its the mortgage rate changes are biting and demand is high in cheaper cars. Lots of people recieving their insurance payouts also trading down in cost....
Hooray. I am glad you're going new and not some tradies worn out ranger
I intend to get some tradies almost brand new Ranger.... Cash buyer HW2.
Scarbro might have a few or Fleet lease may be getting some back.....
Plenty of time yet.....
But bizarrely the bars are still packed, restaurants are full. I fully think NZ is f##ked but how long this takes to play out is another thing. I wonder if the banks will just extend mortgages…..50 years, lifetime mortgages maybe just to reduce the payments.
You know the saying, Ignorance is bliss. Many, just like in 2020 when Covid his, will put their head in the sand until something forceably pulls it out
The 5 year annualised returns still look pretty good outside of Auckland and to a lesser extent Wellington. If the falls continue at this rate Auckland will be negative in 6-12 months. But it also shows those that have been in for some time will still have made a tidy profit.
Five years ago I moved back from Sydney and remember thinking how expensive NZ property market was then. Maybe if we had those values with today's incomes it would make some sense.
I agree, 4 years ago I moved back to NZ and decided prices in Auckland and Wellington were already far too expensive. Moved to Christchurch instead and saved maybe half a million off a comparable house in those places.
Prices still insanely high!
Can we have the gap to pre-pandemic prices reported as well? I think that's the most interesting benchmark because it's before the Reserve Bank decided to flood the economy with QE so provides our last known measure of when the economy was broadly in balance.
‘Broadly in balance’
Agree with the line of reasoning - but also laugh because the reason why we had the extreme fiscal and monetary response at the time was because the wheels were about to fall off (regardless of Covid - see the bond markets in 2019 predicting recession) - so in reality the global economy wasn’t in balance at all as you suggest above in early 2020 before all the stimulus. It was actually in very bad shape and right on the precipice of recession (ie it was very unstable then, but just even less stable now as we doubled down on the problems we we’re facing without experiencing the necessary pain required for the re-balancing required to bring about true stability/resilience).
Forecasting recessions is economists favourite hobby. I wouldn't take their calls seriously.
They weren’t forecasting a recession
I feel for any FHB in the last couple of years in negative equity, and reminded every time they log in to their banking app.
ANZ has the home value estimate on the same page as the mortgage balance, maybe they could go one step further and add a box showing $$ equity. Conditionally formatted to green for positive and red for negative. Develop a widget for Android and Apple so they can see it every time they swipe open their phone.
Why? Just to rub it in? What’s wrong with you?
Given the general response on here (and stuff.co.nz comments) is that "Borrowers should have known interest rates can't stay low forever", my suggestion is well aligned with the general consensus.
The banks who dropped their test rates to the low 5%'s in 2021 only to find 12 months later the lowest card rate is above 6% are mere innocent parties in this whole affair.
I agree. If a bank is offering a loan over a 30 year term, shouldn't the test rate be the highest interest rate over the last 30 years?
I presume you're not interesting in borrowing? It's a little hard to tell a FHB they cant have the loan they need to buy a home even though the payments might be less than the rent they're paying because you service test at >12%. You'd also need complicated models on pay down speed and wage inflation for their specific sector.
The challenge is that the intent of the OCR is to encourage or discourage lending and deposits depending on cycle. We can argue all we want about the wisdom and efficacy of that, but that's the intent. So, requiring servicing tests based on previous interest rate peaks would render OCR pointless.
The other factor here is that paper equity losses are arguably irrelevant unless someone is unfortunate enough to be forced into a sale. Equity does not equal ability to repay.
Maybe if mortgages are tested at 12%, then the price of a house will fall to reflect what everyone, not just FHB, is eligible to borrow.
In other words, $700k at a test rate of 6% = $400k at a test rate of 12%. Nothing wrong with that?
You might ask: What about the price of a new build? A new build today is at least 10x the average household income, we managed fine with half that ratio. Does twice as much Labour go into a new build these days?
Or, it results in a larger landed gentry class.
Are you suggesting lower interest rates are needed to ensure that house prices are kept high enough to prevent cashed up buyers from accumulating as many houses with their money?
No, what I am suggesting is that the solution of using the highest interest rate in 30 years as a test rate, or of saying a bank can never charge higher than it's test rate, as you've previously suggested, will kill lending markets altogether, play in to the 'banks are all evil' narrative and mean only those with money will have anything.
What we're doing now is already doing a great job of creating a landed gentry class. See the plummeting rates of home ownership.
The already wealthy already have much greater access to credit, adding these limits would affect them much more than the little people financing a car at 17% pa
That's only under the assumption that everyone borrows at the absolute limit.
If the serviceability test was at say 12%, that caps what you can borrow. If OCR and rates today are at say 3% you may choose to borrow more (or less). It is risky to borrow at the limit of what you can afford, and why the RBNZ to bring in the LVR restrictions to save banks (and their clients) from making poor financial decisions.
In any case, the OCR maps more closely to floating rates, and there is already separation between the OCR and fixed rates, as you can see by the muted response of swap rates to the recent OCR increase, even though it was higher than forecast.
You're right about wage inflation, banks could have a model to lower older interest rates base on a perceived wage increase of say 3% pa. So for example a 12% rate 10 years ago could be deflated to ~9%
Yes there must be thousands (or tens of thousands of FHBs) who purchased around the peak in 2021-2022 at low LVRs who will now be deeply in negative equity with a higher probability (in my opinion) of this getting worse than better the next 12 months.
If the jobs market gets bad this year, don’t underestimate how stressful this is for people. As I warned about on here about this eventuality for a number of years after watching it first hand while living in the USA during the GFC.
It is why promoting for dangerously high house prices (relative to incomes) is a fools game/narrative.
An Auckland FHB in 2021 paying $800k @ 10% deposit ($720k mortgage at 30 year) now has a property worth roughly $620k and a mortgage of $690k.
Yes and if a buyer waited, their $80K deposit may now be $100-120K (as they save) so to buy the same house (at $620K) they would only need a $520-$500K mortgage for the same house - and if the property spruikers are correct and mortgage rates have peaked, could lock in a one year rate, then refix into lower rates next year and be miles ahead of those who rushed in an purchased during the 2020-2021 FOMO.
But as the spruikers say, the best time to buy is always yesterday.
Why not also remind people how much their Kiwi saver has fallen from peak while they are at it?
My Kiwisaver growth fund is down 9% from the peak. Doing pretty well relative to house prices, plus you get the advantage of dollar cost averaging meaning most of the funds that went in came nowhere near peak prices unlike a FHB that may have been unlucky to make their entire purchase at or near the market peak.
Have you factored in inflation to that 9%. Also don’t forget that in many cases shares are extremely overvalued compared to historical norms. Depending on what’s in your KiwiSaver, this could drop 60-90% in short notice.
Let's do a vote... 👍👍👍👍👍👍
Who thinks the "white noise" of the few that post "to often" the same reconstituted Garbage over and over are taking away from the quality of the comments?
These dudes ( ITGuy, NZDan, House mouse, HW2. .. and the rest.... You know who you are) Just make the comments section to hard to navigate and we all end up not reading half the good comments due to not having enough hours in the day.
if you want to send a message to these "over zealous " comments feck wits and get a 2 post per topic " house" rule going, just up tick this comment.
No doubt this comment will be buried by these fWs and no doubt they will whinge and bag me ...
STOP THE NOISE!
But I say quality and diversity over quantity and repeated garbage.
Up tick / 👍 now and save time and sanity!
I have up ticked.
I'm more irritated by people who spell too as to (and lose as loose).
You are right in that comments can be a bit repetitive. Everyone should try and make their comments informative.
Conscents
Diary Flat
Better commenters like gbh, pa1nter and yvil are welcome to post frequently. Editors recommend 10 comments per article
These median figures above have added a bit of tingle in the air. It feels like not being so much out on a limb.
Oh, the ones that agree with your narrative?
If I were to find comments irritating, it would be from commentators who cannot keep their posts concise. Having to click "read more" all the time to see the full message.
Also when they have double line spaces between paragraphs, that's quite annoying too.
W
Thank You
...and you're as your. Sigh.
Add independent-observer to that list please shaft. I've recently joined a sharemarket forum and he is on there filling the pages as well
I rarely read his misguided comments. And others can do the same if they don't like a particular poster, me included.
Did you give shaft's post a little "thumbs up" too? Shaft is going to be the catalyst for change on the interest.co comments section, just you wait.
Just like when they used the monikers "richard1965" and "alittle" and "stuart786786" and "taimaiakka0".
"Wait and watch".
Most end with a number... gulp
Its a good place to visit and linger when home with the flu.
‘Add independent-observer to that list please shaft. I've recently joined a sharemarket forum and he is on there filling the pages as well’
Great to see you’re broadening your horizons HW2 and learning about the sharemarket (which oddly you used to criticise people for investing and argued ‘you can’t lose with property’).
But in the words of Bob Dylan, that poster you refer to well…. ‘It ain’t me, babe’
Yes I read the above as its a reply
You've often said you are on other forums incl shares.
We need a community notes feature on interest.co.nz comments section to clear up fact from fiction.
I haven't been on sharechat or whatever site you are referring to for a few years. Actually, I don't think I've ever made a comment on that site in its history but might be wrong! Certainly not in the last few years. I have read their articles, but not made comments.
So if there is another Independent_Observer there doing gods work and annoying you there HW2, you might need to take that argument to that individual because as I say - 'it ain't me, baby'.
Perhaps I've got an impersonator?
I did not say IO. I did some detective work to find out
by HW2 | 19th Apr 23, 1:02pm 1681866172
I did not say IO. I did some detective work to find out
Scary - sounds like big brother is watching! Are we living in 1984 and you work for the ministry of truth? Are you trying to scare me?
BW
While we are at it, can we ban the overused pejoratives “spruiker”, “ponzi” “the comb”,”greedy landlord”, “dumb FHB” “sheeple”etc
10 votes
Using this line of logic then DGM, doom golblin, doom merchant also should be outlawed.
"The Comb" always gives me a chuckle. Can we leave that one?
You get my uptick if your comments are included Shaft 🙃
🙄
[ Childish comment removed. Stop it. Ed ]
Good flaming grief. Knock this off
by Shaft | 19th Apr 23, 2:42pm
I knew it was Hemi and he would go full retard.......
Can't help himself
Remind me, who died and made you king of the comments section?
Seems a little weird, dude.
ASB yesterday "The potential recession could be deeper and more prolonged than previously thought, with the economy forecast to contract at levels last seen during the global financial crisis (GFC)."
They have masses of data on their customers. They can see what is coming in and what is going out in fine detail. Most people are using electronic payment methods for everything. many people are fully banked with ASB. Mortgage, transaction account, credit cards, revolving credit, personal loans, business banking.
They can probably run very sophisticated modelling to see how many of their account holders will be in a negative cashflow situation if this happens or that happens and extrapolate that to the entire economy.
I.E. They are not talking out of their ass. They know more than the RBNZ or Treasury.
Don't think it takes sophisticated modelling it just needs the raw data condensed into an Excel spread sheet. There will be a tipping point after which things go exponentially bad for mortgage holders. Its pretty clear we are already at that point because banks are not increasing rates inline with OCR rises because they know that the majority of holders are now fully maxed out. Its not rocket science, They can see all your credits and debits and your wages going in every month and the know exactly when you mortgage is going to roll over to higher rates. When a certain percentage at the bottom of that sheet fall into the "Distressed" group the banks have to put the brakes on.
I'm on offset, so it's like floating rate. The pain hits me little and often! :D
Westie, while banks have the ability to run a ruler over your single account as you apply for a top up etc, they simply do not have the scale of AI tech to do this across the entire book. Xero can actually provide more real time insight on the business economy as most entires are categorised. Many people or couples multi-bank so its hard to see a full picture. Arrears in mortgage payments, or late credit card payments is one of the best indicators of stress they have.
Negitive equity is not a direct indicator of credit stress.
Westpac famously argued in Aussie that customers could give up their Wagyu Beef and Shiraz to meet mortgage payments, who are they to judge or try and prioritise their clients spending habits.
Job loss is going to be way more impacting IMHO, especially construction, most tradies I know own a house, ranger/s and fishing boat.
ASB have a "track my spending" feature where you can categorise your own income and expense transactions account by account. Sold to you as a free budgeting tool. But you are providing them with detailed data at the same time. A few thousand customers doing that would provide enough data to feed the model. Not perfect. But miles better than anything the government or RBNZ could come up with.
Analysing data like that isn't that simple. Some examples:
1. Do you have more than one bank?
2. Does the bank know you are married or in a de facto relationship?
3. Does the bank know whether the partner has a job and how much it pays? Can they back to work?
4. Is your 'joint account' held at another bank?
5. Do you have more than one job with monies coming in as cash or going to another bank?
6. Do you have stockbroking account not with the bank?
7. Do you have boarders that pay in cash? Are you renting the driveway Monday to Friday for cash?
8. Do you have a collection worth a lot of money but purchased for little?
9. Have you inherited items of substantial value?
10. Do you barter rather than use money?
11. Do you have a side hustle, e.g. doing up cars, houses, etc.? but don't handle the money stuff?
12. Should you get into difficulty, do you have wealthy relatives or cashed up parents that can advance loans or inheritances?
13. What assets that the bank is unaware of can you sell? Ditto your partner.
14. Can you pick up more and better works easily? I.e. your bank may not know you are only working part time.
Using the data they have banks have, as you suggest, tried to get this 365 degree picture of their customers. They get it 90% or more right less than 10% of the cases and even hitting 50% right in 50% of cases is nigh impossible. If a bank ever pretends they're better than this they're almost certainly lying or being misled by their BI/IT teams.
You have no obligation to provide the bank with anything more than they need to know. The IRD however is a completely different story!
You are wiser as a credit team to focus on those with low equity or who have just missed a payment, as many people manage to find the wagyu and shiraz money to just make payments in time.
Got to fall a lot more to make sense in buying a house in NZ.
Section price almost double or triple compared with pre Covid in Queenstown I don’t see much reduced price
Still wish that REINZ stopped lumping Nelson, Tasman, Marlborough, and West coast together, even Nelson/Tasman. Thanks Interest.co.nz for making things clearer :-)
The tenor of comments really has descended towards the gutter. With very little if anything seemingly done about it.
I will certainly only be a sporadic visitor / commenter.
And hey nonny nonny, there was rejoicing in the streets. For twas a wonderful day.
I would think it would be very hard to make yourself pull back HM... I can only imagine the time you spend on here in an average day. Maybe cold turkey would be the way to do it...
What a loss!
As it's about the relative difference between income and house prices, then this metric is the one to watch as well.
https://www.interest.co.nz/property/house-price-income-multiples
The last two lines show different planets, only one hour & forty minutes drive from each other.
Queenstown-Lakes Median price 1,370,000 Median HH income $77,494 Median Multiple 17.68
Invercargill Median price 430,000 Median HH income $95,535 Median Multiple 4.50
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