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Quotable Value says in November report house values 'beginning to stablise' after falling 5.6% from Nov 07 peak

Posted in Property Updated
See video

By Bernard Hickey

Government owned valuer Quotable Value (QV) has released its November report into house values that it says shows they are beginning to stabilise, having fallen 5.6% from their November 2007 peak.

Values in the three months to November were up 0.3% from a year ago, but this is after a rebound in values through mid 2009. Prices had been easing through mid 2010, QV said.

"The rate of decline has slowed in recent months and it appears as if values are beginning to stabilise," QV said in the

Research director Jonno Ingerson said there continued to be a relatively low number of house sales and finding loans from banks remained difficult for some potential buyers.

"Not all parts of the market remain slow moving however, with QV Valuers in the main centres still seeing quality properties in established and traditional areas selling quickly and for good prices," Ingerson said.

"This is in contrast to the large number of properties that have now sat unsold for several months," he said.

While unrelated to the QV index, and a less reliable measure of value change, the average New Zealand sales price over the last three months has dropped to $397,805 from the $399,055 reported last month.

QV measures the value of 'like for like' properties in various areas and compares sales with similar houses to get an idea of where values are headed. This removes the distortions in median prices when houses in some areas and some price bands sell, while others don't.

The Real Estate Institute of New Zealand is expected to release its figures for November next Tuesday. REINZ releases detail on the number of properties sold and the median price of those properties sold, which can be skewed by the types of properties sold. It also releases a 'stratified' measure which strips out such distortions. REINZ figures are, however, more up to date than QV's figures, which are for the last three months and do not include the latest sales figures for November.

Auckland stabilising first

"There are signs that nationwide values are beginning to stabilise, with the strongest signs of this in the Auckland region where values have now been stable for several months," QV said. "Compared to the same time last year, values are now 1.8 percent higher, but most of this increase occurred between November 2009 and March this year. After falling slightly for a couple of months, values have been more or less stable since June."

Hamilton and Tauranga prices were flat from a year ago, but are still down around 11% from the peak.

Auckland's biggest real estate agency Barfoot and Thompson released sales figures last week showing it sold 668 properties in November, which was up 19.1% from October, but down 22.5% from November a year ago. It reported its average sale price of NZ$553,743 was up 5.7% from NZ$524,004 in October, but was basically flat (up 0.6%) from NZ$550,217 in November a year ago. See more detail here.

First National reported last week that someone 'appeared to have switched the light on' in the middle of November. First National said sales picked up in the second half of November as banks had loosened their lending criteria. See more detail here.

Realestate.co.nz reported surge of new listings in November. See more detail here.

Late in November several banks trimmed their fixed mortgage rates in an attempt to spark life into the market.

See the full QV report here.

See the regional details below.

Auckland

QV’s Residential Price Index for November shows that property values in the Auckland region have levelled out in the past few months, although have dropped by 1.0% since March this year. In contrast, values increased by 2.9% in the 4 months to March. Consequently, values now sit 1.8% above the same time last year, but 2.7% below the market peak of late 2007.

Glenda Whitehead of QV Valuations said; “Our registered valuers working in the field sense that values in the Auckland region have levelled, reflecting the stability in our statistics over the past few months. At present, this stability in values isn’t lifting activity, which remains uncharacteristically muted for this time of year. The recently reported boost in listings should however provide purchasers with a wider potential pool from which to purchase, which could lead to more turn-over”.

“We are currently valuing a number of properties in mid-to-upper price ranges, with owners upgrading, renovating and taking on larger building projects. This reinforces the trend that many homeowners are just content to stay put, focussing on improving their current circumstances, rather than moving altogether. Also worth noting is the number of first home buyers who are taking advantage of the Housing New Zealand Welcome Home Loan initiative, supported by some of the major banks. With low interest rates and more stock on the market from which to choose, some renters are being enticed into the market, as the buy versus rent equation tips more in favour of buying” Ms. Whitehead said.

“A number of our clients have indicated that they may consider listing in the New Year. However, we sense a lack of commitment to the selling process at this stage, with the wait-and-see attitude persevering. We also continue to hear reports of vendors with unrealistic expectations given the quality or position of their homes. On the other hand, high-quality properties are still attracting good interest and healthy sales prices. We have recently heard of investors on the North Shore looking to sell, with some doing so privately, perhaps to reduce their costs” Ms. Whitehead said.

“With values now undoubtedly much more stable than early this year, we may see confidence grow and as the months move on, more buying and selling activity. Although, with most people winding down for Christmas now, we don’t expect much to happen in this space until next year” Ms. Whitehead said.

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

The average sales price for the Auckland region in November was $526,659.

Hamilton

QV’s Residential Price Index for November shows that property values in Hamilton have held over the past 3 months.

Unlike most other major centres, Hamilton did not experience significant value recovery from mid to late 2009. Subsequently, values are now 1.6% below the same time last year, and 10.7% below the market peak of 2007.

Mr. Richard Allen of QV Valuations said; “November marks the third month of stability in our statistics, indicating that home values are beginning to level-off in Hamilton. However, sales are few and far between, leaving the market fickle and not robust by any means. Given the holiday season is on our doorstep, there seems little on the horizon which could motivate people to act and breathe life into Hamilton’s property market. Perhaps a warm summer and a fresh new year will make a difference, but at this stage we can’t foresee the drastic change in market dynamics needed to completely turn things around”.

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

The average sales price for Hamilton in November was $348,591.

Tauranga

QV’s Residential Price Index for November shows that property values in Tauranga have held over the past few months. Unlike most other major centres, Tauranga did not see significant value gains in 2009.

Subsequently, values are now 0.9% below the same time last year, and 11.4% below the market peak of late 2007.

Mr. Shayne Donovan-Grammer of QV Valuations said; “It has been difficult for the Tauranga market to gain any traction this year and the spring/summer flurry of activity hasn’t really eventuated so far. Sellers have resisted dropping their prices, although realistically priced and well presented homes have tended to sell more readily”.

“On a positive note, values have held better than predicted in 2010 and interest rates have remained steady. Tauranga, with its predicted population growth, is still one of best places in New Zealand to own property, but the market needs to be patient before it can expect another cycle of capital growth. Currently there are too many households with high debt levels, making it tough to either service mortgage repayments or sell, as debt is often higher than net property value. This is because of past lending ratios and a market that has come back 10% or more since the peak. For a lot of would-be buyers, it will take time to get back into balance before activity can resume” Mr. Donovan-Grammer said.

QV’s Residential Price Index is calculated using sales data from the 3 months leading up to the month being reported. It is not the same as the average sales price, which fluctuates in line with the mix of properties selling in upper or lower price brackets. The average sales price for Tauranga in November was $409,100.

Wellington

QV’s Residential Price Index for November shows that property values in the Wellington region have held over the month, after declining by 3.4% since March this year. In contrast, values increased by 1.9% in the 4 months to March.

Consequently, values now sit 1.6% below the same time last year, and 6.5% below the market peak of early 2008.

Mr. Kerry Buckeridge of QV Valuations said; “The usual spring flush, in terms of both sales and listings, appears to have only just materialised over the last couple of weeks. This is the first sign of stability in Wellington’s housing market, after a steady decline since early this year, where the market was characterised by few listings and a low number of sales. Good properties which have been well marketed are beginning to attract multiple offers, a sign of stabilising values. However, there is still strong buyer resistance to homes perceived as risky or poorly presented”.

“There are now more properties on the market than a month ago, most of which seem to be priced realistically. Some agents are commenting that the listings have arrived later in the year than usual. On the flip side of the coin there is concern that most buyers won’t be willing to act before Christmas and that many properties will remain unsold until early next year” Mr. Buckeridge said.

“In recent months some prospective purchasers have commented that they have had trouble finding properties which tick all their boxes amongst those listed. QV valuers in Wellington have noticed an increase in the number of people undertaking substantial additions and alterations to their homes. This seems to be a popular choice for those who failed to find a suitable type and location of property on the market. The recent increase in listings could well reverse this trend, although probably not until next year” Mr. Buckeridge said.

Christchurch

The significant slowdown in the number of sales, and the delays in the overall sales process in Christchurch following the earthquake mean that the QV residential price index cannot yet be used to measure the change in property values after the earthquake.

Melanie Swallow of QV Valuations said “the number of sales slowed considerably in the weeks immediately following the earthquake, but activity has begun to pick up again. Agents and mortgage brokers comment that it is still taking a longer to put deals together with additional requirements for engineers’ reports and delays getting LIM reports, but the level of activity is still very encouraging”.

“There has been a lift in the number of listings to market, which is what we would have expected to see in September if it had been a typical seasonal market without a magnitude 7.1 earthquake” Mrs Swallow said.

A report published by the Earthquake Commission on November 30th identifies the areas in Canterbury that have been affected by significant land damage. This shows that less than 5% of properties have significant land damage requiring remedial work.

The majority of properties in Canterbury have either no damage, or minor damage as a result of shaking. There have been very few sales in areas with significant land damage, as these properties generally require significant repair work. Almost all the sales since the earthquake are from areas that did not suffer land damage.

Values in Christchurch were gradually declining in the months prior to the earthquake. Values since then have increased again, and in October were 3.2% higher than the trend.

A full report of the change in the property market since the earthquake is available on the QV website.

Mrs Swallow said “agents report plenty of enquiry and a steady demand for quality housing in unaffected suburbs, which is exactly what we would expect to see. The market has had time to take stock of things and now we are seeing indication of some normal market activity beginning to emerge”.

“The local economy is slowly being stimulated by insurance and EQC payouts, bolstering the construction and property industry. This has helped kick start the property market as Canterbury puts itself back together, although delays in the process can be frustrating for people trying to move forward with their lives. On the bright side it will ensure a steady volume of work for some time for Canterbury trades people” Mrs Swallow said.

“Agents, mortgage brokers and bankers have made anecdotal comments that there is a ‘wait until the new year’ sentiment in the market. We expect to see a lift in activity in early summer. The amount of activity at present is a positive sign as the region looks forward to 2011” Mrs Swallow said.

Dunedin

QV’s Residential Price Index for November shows that property values in Dunedin have declined over the past month, and have decreased by 2.2% since March this year. In contrast, values increased by 1.0% in the 4 months to March.

Consequently, values now sit 1.2% below the same time last year, and 5.9% below the market peak of 2008.

Mr. Tim Gibson of QV Valuations said; “Dunedin’s housing market has showed some minor signs of improved activity, with increasing sales volumes and more interest within the market for the month of November. However, values continue to fluctuate, downwards in this case, evidence that the market is still quite fickle and undecided”.

“QV’s registered valuers have also noticed an increase in requests for valuation reports for finance purposes recently. While some of these are undoubtedly for refinancing purposes, our workload aligns to reports of increased attendance at open homes, alluding to activity on the rise. Time will tell if this trend continues, or merely a rush of pre-Christmas activity” Mr. Gibson said. “Fundamentally however, the property market is still jittery with fewer sales than normal at this time of year” Mr. Gibson said.

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

The average sales price for Dunedin in November was $268,265.  

Here is the full release from Quotable Value's November report below.

New Zealand property values are beginning to stabilise according to the QV residential property indices for November.

This time last year values were steadily increasing from a low in early 2009. This increase continued until March 2010, then values began to gradually decline.

As a result the gap between values this year and last year has closed further to 0.3 percent. The rate of decline has slowed in recent months and it appears as if values are beginning to stabilise. Values are now 5.6 percent below the market peak of late 2007.

“There continues to be a relatively low number of house sales, as has been the case for most of the year. Securing funding from banks remains difficult for some potential buyers, while others are taking their time over purchase decisions” said QV.co.nz Research Director, Jonno Ingerson.

“Not all parts of the market remain slow moving however, with QV Valuers in the main centres still seeing quality properties in established and traditional areas selling quickly and for good prices. This is in contrast to the large number of properties that have now sat unsold for several months” said Mr Ingerson.

“There has been an increase in the number of properties put on the market over the last few months, as is typical of this time of year. However with the low level of sales activity, this is increasing the stock of unsold property. We now expect that many buyers will delay any purchase decisions until the New Year” said Mr Ingerson.

While unrelated to the QV index, and a less reliable measure of value change, the average New Zealand sales price over the last three months has dropped to $397,805 from the $399,055 reported last month.

There are signs that nationwide values are beginning to stabilise, with the strongest signs of this in the Auckland region where values have now been stable for several months. Compared to the same time last year, values are now 1.8 percent higher, but most of this increase occurred between November 2009 and March this year. After falling slightly for a couple of months, values have been more or less stable since June.

Values in Hamilton and Tauranga have also stabilised in the last couple of months after slightly declining for most of the year. Hamilton is now 1.6 percent below the same time last year, and Tauranga 0.9 percent below. Compared to the other main centres, values in the Wellington area have dropped the most since March this year.

Values are now 1.6 percent below the same time last year although in the last month there are the first signs that values in Wellington are also stabilising. The property market in Canterbury is now beginning to recover well after some initial disruption following the September 4th earthquake. According to information in reports published by the Earthquake Commission less than 5% of the properties in Canterbury suffered major land damage.

Since the earthquake there have been very few sales of houses in badly damaged areas, but properties with little or no damage are now beginning to attract good interest. The sales process is still taking longer than usual as buyers, banks, and insurance companies complete thorough checks on the properties before completing the sale.

The significant slowdown in the number of sales, and the delays in the overall sales process in Christchurch following the earthquake mean that the QV residential price index cannot yet be used to measure the change in property values after the earthquake. Preliminary results show that property values have bounced back after the earthquake with October 3.2% higher than the pre-earthquake trend.

Values in Dunedin have continued to be variable in recent months, but in general have been in gradual decline all year and are now 1.2 percent below the same time last year. Values remain above the same time last year in Wanganui (1.3 percent) and Nelson (1.9). Values are similar to last year in Rotorua (0.9), Hastings (0.6), Napier (0.9), New Plymouth (-0.6) and Queenstown Lakes (0.9). Values are below last year in Whangarei (-2.1 percent), Gisborne (-5.1), Palmerston North (-1.3) and Invercargill ( 1.7).

Updated with chart, details, regional reports link to full report.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment in the box on the right or click on the "'Register" link at the bottom of the comments.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current Comment policy is here.

56 Comments

This is

This is ridiculous…only 5.6% really? What about adjusting for inflation? A house that hasn’t moved in value for 3+ years has actually lost close to 9%!! You add in the negative 6% and you’re looking at a real tangible loss of over 15%!!

Really? If you had a property

Really? If you had a property investment say returning 7% net of expenses (unmortgaged) then over 3 years you'd have netted 15% after tax say, so less a 5.6% loss in capital you'd be up 9.4%. 

If you'd invested in cash (90 day bill rate) you'd have just over 10% after tax.

So it's not really the end of the world for property.  A respectable performance in the toughest of times demonstrates that good income producing property is always a good investment.

Is that  7% property based on

Is that  7% property based on purchase price or current market price, Chris_J? Do the sums still stack up at ROA as opposed to ROI?

NA, I'm just giving an

NA, I'm just giving an example. On purchase price from 10 years ago, few people would return less than 15%, many like myself would be getting much much more (nearly up to 100%PA  in one of my cases).

You will note my example was unmortgaged so it was obviously referring to a return on assets (in this case the same as a return on investment).  If someone was positively geared they may well have seen a far better return, someone negatively geared far worse.

Examples are fine, but trying to make property look bad over it's worst period of real performance in 60 years is easy - try making it look bad over any longer timeframe - property with income is the most sound investment and a far better earner overall than shares, bonds or cash.

And on that we appear to

And on that we appear to agree. What  ocurred in the property investment scene, made sense, up until about 6 years ago. To me, it doesn't , now. This is 'that bad time' you mention and hence not the reason to invest now. And those that anticitpated the market we are now in, arguably, are ahead of the curve, and not behind it? The difference between you and me is that you see the 'good times' returning. I do not, in my lifetime. I see a Nipponese malaise envloping the Western economies, lasting at least as long. If I am wrong, and I choose to re-enter the market, it will  simply cost me more. Many are going to lose everyting they have, if I am right.

PS: I'm glad that the EQC is getting on with things wih a bit of speed, down there. Good luck with getting it all sorted.

Well I guess if we all get in

Well I guess if we all get in the same room and agree that property will always increase in value, never mind that is a depreciating asset, but as long as we all agree that we will never have a negative equity position in our investment then it should all be fine!! We can keep buying and selling tulips…err... I mean property amongst ourselves into perpetuity!! So why stop at property…lets have the same agreement for say copper!! I have plenty of copper I can sell you!

You can sell Wolly the

You can sell Wolly the copper! He seems to like it.

But you miss my point property has income potential.  If I offered you a property returning a solid 20% return on the sale price (not ROI), would you buy it even if you thought prices were going to fall?

Well assuming the income is realistic and you aren't expecting the rents to fall, then there is no reason at all to not buy it!  The rents will make up any capital loss and when the market turns you will be more than ok.

But I fear that people like yourself will be so convinced that they will lose capital that they won't invest.  If you bought a machine to produce a product would you really expect the machine to appreciate in value?  Likewise capital appreciation is a sidebenefit of property not the sole goal, buy for the income and you will always win.

Of course you will say you can't buy a property at a 20% return unless you are in some small hick town - which is true, however there are always opportunities to create high returns in even top large city locations, which is what I aim to do.

By the way, you could have done worse than trading your tulip bulb for a few houses in Bruges.

read comment below

read comment below

Chris J you are correct ,

Chris J you are correct , there is still a perverse incentive to invest in property , even after the wishy-washy tax changes .

The reasons we go back to property are :

There is no incentive to save , none whatsoever , its taxed to death and inflation erodes whats left after the IRD has taken its massive slice .

Regrettably , the NZX has a reputation as being an ungoverned  den  of thieves with no ethics, where the pals look after each other and the courts do not have the balls to prosecute malfeasance with strong prison terms as should have been the case in Feltex.

Investing on the ASX is subject o a much harsher tax regime for Kiwi's so we dont go there.

Govt. Bond yields are too low , so we leave it to the banks to invest in these for their capital adequacy requirements , but even for them , its dead money. 

We the NZ Public are left with the only alternative , buying shoddily built houses , gearing them  up and offsetting other income to reduce personal tax . 

And whatsmore , there are other benefits to buying investment property  that are not mentioned becasue they are a  bit sneaky . You can repair or repaint your primary residence and the Bach and your Mom's place and charge it to the rental property as 'maintenence' , You can deduct  a room at home as an 'office' for managing the rental property .  Its a rort and everyone is onto it. 

Troy ... you are right on the

Troy ... you are right on the money  ! 

An example (Auckland) ... if a property was worth $420K at the peak of the market (late 2007) with the 2.7% decline from the peak, it is now currently worth $408K

However 3 years have past since then and if we take a  5% compounding increase (which is minimal to what a property spruiker would have you beleive)  over that 3 years the property should be worth $486K

So the difference between $408K (todays value) and what it should be with a 5% pa increase $486 is a ............... 16% LOSS !

SK .... read and weep as the ASX has returned 20% in 12 months

BH..... just 14% to go and it will happen over time, as above

There seems to be a bit of

There seems to be a bit of cherry picking with the times here. I notice you are comparing the ASX this year versus houses since Nov 2007. I notice your not comparing ASX at Nov 2007 with housing at nov 2007.  Your also not comparing say housing since Mar 2009 till now which would probably show a postive growth (though not as good as the ASX this year although a leverage investor might still do better.)

It looks like a comparison with worst case housing to best case share market.

Granted shares are a lot easier to trade then houses so its easier to bail out when the slide is happening.

It looks to me like you have pre-choosen a view (the view been the housing market sucks as an investment) and then cherry picked specific pieces of data to present that view.

 

 

 

 

A very stable situation then

A very stable situation then Jonno...stable as she goes...should we all rush down to the nearest bank and borrow us some fresh hot cheap money and go on a splurge then?....it would help QV wouldn't it?....perhaps it might be safer to pay down the debts and leave the bank credit to fester.

Locally around Nelson I'm

Locally around Nelson I'm seeing the prices are stabilising for the best 5-10% of houses, but sales volumes are very low and the majority of average quality houses just aren't selling unless they drop prices 5-10% below what they were asking last summer.   Many have been for sale > 6 months and are just cycling through different agencies.

e.g.   Very nice house sold back in March for $700K and resold at auction a couple of weeks ago for $685K due owner lost job and had to transfer to Oz.

I expect prices will remain stable until next March again, then drop off again starting April as vendors try to sell before winter.

BTW ... retailers around here seem pretty stuffed, which I guess reflects a slow local economy.   nb.  Nelson GDP had lowest increase in the country over the last 12 months.

E.g.   We went to Smiths City, Noel Leeming, Powerstore, Harvey Norman over the weekend looking for new TV + lounge/dining suite and in every shop customers were outnumbered by staff ... often 2x more staff than customers.    

This seems very sad for retailers a couple of weeks before Xmas with lots of great specials like half of TVs selling for cost + 5%

Sellers are being very

Sellers are being very stubborn and holding on to places for more than a year is some cases. It also doesn’t help that banks are only drip feeding mortgagee sales ether. There is no fundamental economic reason for housing prices to rise but there are plenty of fundamental economic reasons for housing prices to fall another 10%.

QV figures will not include

QV figures will not include house sales that were agreed in November for which the new owners do not move in until December or perhaps early new year. QV are not aware of these sales until the conveyancers advise they have legally changed hands.

Therefore QV are somewhat out of date and any report that reflects what has really been happening in the last quarter of 2010 will not be indicated by QV until they report in the New Year.

This is why Barfoot and REINZ figures are more up to date and reflect exactly what happened in the previous month. If Barfoot and REINZ figures show a lift in November then QV figures will pick up on this lift early next year.

REINZ figures will be out in a few days but are not as complete as they used to be as REINZ membership is no longer compulsory, so not all real estate agencies supply figures anymore. They may only have 80% of offices reporting these days compared with maybe 98% in the past.

The property market in central Auckland suburbs has been very strong during November - yesterday QV released a report with the NZ Herald showing prices up in the last 12 months to September for example in Grey Lynn up 10.2%, Remuera up 6.2%, Sandringham 9.7%, Westmere up 6.1%, Mt Eden up 9.2%, Ponsonby up 8.5%, Kingsland up 9%, Mt Albert up 5.3%.

If this was the 3 months to 30th November being reported the price increases would be even higher.

So what do you do if you are a buyer hoping to secure a property in a central Auckland suburb? Sit on your hands while prices continue to increase in the hope that there will be a major price crash?

Is there really any chance in central Auckland of a 20% or 30% house price crash? If so what will bring it about? More likely that prices will continue a steady increase.

Quite correct here -

Quite correct here - continuing positive figures from QV should be expected over the coming summer. For Auckland anyway.

Correction over.

Get off your hands.

How about ...." Look Bill. We

How about ...." Look Bill. We need to get the books back into the black. So we need to raise a couple of billion dollars just to stop the leakage. Where can we go to, to get the cash?"

" I know! John. What about a levy on our business sector? Not the struggling bit that we want to encourage to export, but that pot of wealth tied up in the property market. I mean, that's where all the foreign borrowings have gone. Let's go and 'encourage' them out..."

They don't need to do

They don't need to do anything for the nett tax take from investment property to increase. Most established professional high equity residential investors have just had their best year for yonks. Stable tenancies full of Happy Renters, NA's and MIA's, rising rents and low interest rates.

Only problem is it's really hard to find stock in good areas showing over 7%. Damn first homebuyers in there ramping up prices again.  Something should be done about it.

How about if they knock

How about if they knock negative gearing on the head? That should increase the net tax take? You know ~ Like Paul Keating did for a couple of years during "the recession (they) had to have".....

They probably will NA. Next

They probably will NA. Next year, taking effect from 1 April '12. But the pool of investors running at a loss has been shrinking by a couple of thousand a month for nearly 3 years and won't be slowing down any time soon. Getting rid of the over-leveraged riff-raff works in favour of those who have been in the game for decades. The ones who will snap up the well located bargains while all the so knowledgeable market timers here talk about "dead cat bounces" and endlessly post how "ya can't lose with property maaaate" followed by a gazzillion exclamation marks.

there is no activity. there

there is no activity. there is very little supply. therefore normal market dynamics are not in evidence. ramp up supply and prices will fall dramatically. 

Updated with regional detail.

Updated with regional detail. Hamilton and Tauranga struggling. Both still down around 11% from peak. Seems like Auckland and Wellington are stabilising. That's what happens when the banks start pumping the money in and households get a pay rise via the tax system. It goes straight back into values and debt rises.

Same old. Same old

cheers

Bernard

It also helps to increase the

It also helps to increase the potential pool of "suckers' if you lower the lending criteria too.

Meanwhile I am still waiting

Meanwhile I am still waiting for the property price to drop 30% according to St Hickey's prediction.  No no wait, not 30% but 15%...  but wait another revise, may be 5%... the truth is, who knows???

QV obviously don't understand

QV obviously don't understand the meaning of the word value.  Price is what you pay and value is what you receive.  There can be a large difference between the two, as Blue Chip investors will tell you.

This discussion always goes

This discussion always goes around in circles, if you cherry pick the negative factors you can predict doom and gloom, if you cherry pick the positive factors, you can predict all is well.

How many times does the obvious need to be staed, the reality is probably half-way between the outlooks of Ollie and Wolly.  End of story.

What do the latest QV figures

What do the latest QV figures really tell us about the future?

Just like looking at my currency graphs, the answer is "Absolutely nothing"

Property prices are sticky overall but not for individual properties. Reality bites slowly, inexorably and mostly with some pain or at least embarassment.

Elsewhere on this site there is comment on what could happen if China slows, Australia catches a cold and NZ ends up with pneumonia.

Right now, I still remind my property-less kids that paying rent while having 200k invested elsewhere or even in the bank is infinitely better than being saddled with a 400k mortgage.

And that advice will not change anytime soon.

And that red sport car looks

And that red sport car looks so tempting with that cash... or a trip overseas. 

They both been there done

They both been there done that

Any more fancy ideas?

Basel, I've been trying to

Basel,

I've been trying to explain the 200k savings vs. 400K mortgage that to my parents but they don't get it. They can't understand why I don't want to return to NZ, look for a house, and get a nice tasty mortgage. For them, that's "living the dream" and it's OK because "everyone's in the same boat." Sometimes, Dad isn't always right.

Spot on BB3, Infinitely,

Spot on BB3,

Infinitely, infinitely better !

when will people learn about money?

Like I've said before, I'm

Like I've said before, I'm all about the Elliott Wave theory, and the graphs are showing this exact theory playing out. We have just passed the fake bull run, and its going to crash in 6-12 months.

You may well be right there

You may well be right there muppet....too dam risky to feed heaps into the market....if Beijing throws the switch the copper price will go plop...could be the end for Morgan Stanley.....

FYI from RayWhite on November

FYI from RayWhite on November sales.

The Ray White Group saw a slight rebound for property sales during November 2010.  While sales turnover was 23% down on November 2009, there was an increase of 9% on last month’s trading.

The Ray White Group completed 951 sales across New Zealand with an average sale price of $387,000, which was 1.3% lower than last month. In comparison to November 2009 the average sale price has increased by 2.8%.

http://www.raywhiteonline.co.nz/2010/12/01/november-results-show-small-increase/

Sorry Chris but you’re

Sorry Chris but you’re never going to convince me that a house is an appreciating asset.  You can crunch all the magic numbers you want but the entire math relies on the unsustainable next sucker to come down the street.  Historically houses never appreciated in value. The idea that a house can appreciate in value is a relatively new phenomenon that started in the mid 20thcentury.  

You also can’t convince me that somehow houses in Auckland are worth more than the same equivalent house in Honolulu Hawaii (excluding exchange rates)! Both markets have the same housing density per 10,000 residence yet Honolulu is somehow more affordable the Auckland.  Your telling me that more people are moving here and want to live here than in Hawaii!!?

Perhaps you would agree Troy

Perhaps you would agree Troy that houses can be a speculative asset!.....you have accept govt here is propping up property values in a desperate effort to prevent a rapid collapse....it is afterall the very reason families have little extra to spend and explains the retail downturn.

This policy support for the bubbles and the effort from the banks to drip feed the mortgagee backlog into the market...these are the reasons this recession is not going to end for a very long time...and points to the data releases mid 011 showing the muted economic activity is set in place...the 'new normal' as we know it.

The banks have the full support of Bollard in their role as bubble porkers...the covered bond loot is providing the banks with the mortgage bait to lure in enough fools to keep the bubbles intact, at least from a data release perspective.

It is now over to Kiwi families to do the job for the govt...they must pay down debt and avoid borrowing at all cost....the better they are able to do this and the longer they can continue, will be the catalist for some real change for the better.

Wolly, My point

Wolly,

My point exactly…someone with the gold is gaming the rules!

@Chris

 I said I was excluding the exchange rate. My point was that the affordability index is the same the prices (assuming parity) are the same...the inventory is the same. Yet Auckland is more expensive. Why? We have a negative immigration profile? There is no fundamental economic factor to prop this market up other than Boomers buying and selling second and third homes amongst themselves.

When was Hawaii affordable,

When was Hawaii affordable, the last time I looked a median standalone house cost about $US800k in Honolulu, with prices starting around $400k.  I don't think that is cheaper than Auckland!

Thats like a guy on my old

Thats like a guy on my old street, he is a real estate agent, absolute shyster, waiting for some chump to buy his unit, been on the market for more than 6 months, hes going to be waiting a long time.

Why shouldnt Auckland be

Why shouldnt Auckland be expensive?

It's an internationally desirable city with most of the countries employment opportunities.

'internationally desirable

'internationally desirable city' - sorry but interest from Chatham Island residents doesn't count.

'with most of the countries employment opportunities' - I'll give you this one, but only because Te Aroha meat works burnt down at the weekend.

Every year it's the same

Every year it's the same bunch.

Zurich/Geneva/Sydney/Vancouver/Auckland

Cities for the highest quality of life - apparently.

Could always go and live in Mogadishu/Baghdad, if you are not concerned about such things.

Theres bugger all to do in

Theres bugger all to do in Auckland by international standards, because its not a super-city. NEW YORK is a super-city, Auckland has a million something people, so what, I see no justification for the high land prices.

Auckland is a gigantic cow

Auckland is a gigantic cow town!

If you like cookie cutter suburbs then Auckland is the place for you. It's as boring as a wet weekend and almost all of the shops still close around 5 pm and you can't get a pizza after 11 pm. Of course Aucklanders claim that's because of all the dangerous 'gangstas' roaming the streets, armed with uzis and bazookas --- but it's really because Auckland is bloody boring and in a coma.

It always makes me laugh hearing people try to compare Auckland alongside the likes of NYC or LA or London or Paris! lol!!!

And it's a bit of a stretch to say Auck has "a million people"! Only if you include half of the rest of the north island!

It's like London claiming that Paris and Berlin are outer suburbs.

Spent a bit of time in Geneva

Spent a bit of time in Geneva a few years ago, the similarity with Auckland was staggering. Heaps of Jake the Muss types, Holdens, P labs in every hood...it was Auckland az bro!

Aukland is a dump SK, there

Aukland is a dump SK, there is nothing internationally desirebale about it. The waitemata harbour is the only feature. I am Auckland born & bred and I have watched my city be turned into the dump it is over the past 20 years. I feel ashamed, and I assure you that Auckland is already losing the immigration war for mobile workforce to much more desireable cities which are genuinely world class.

Is this a  recovery in house

Is this a  recovery in house prices ????

Ever heard of a DEAD CAT BOUNCE ?

Google it 

They tend to " splat " ,

They tend to " splat " , rather than bounce . The belly bursts open and the innards squirt out  .............. Bing a dead cat into Mum's old chest freezer overnight .......... You get a better bounce effect once they're fully frozen .............. ummmmmmmmmmm , so I believe ........ I must have Googled it .............Yup !

My sister accidentally ran

My sister accidentally ran over the family cat with the family station wagon. It it bounced an flipped for over half an hour till it died. Nasty stuff. But apparently it achieved some altitude on the bounces before smacking down onto the concrete again. Unspeakable horror for the children to watch. But one can wonder if there is an economic similarity there.

Thing is miggle...you should

Thing is miggle...you should not have alllowed the cat to have the station wagon....but that would have been some car crash to witness...half an hour to kill a station wagon ...jeez.

I wonder if a ratio measure

I wonder if a ratio measure showing number of house sales - to - number on the market would be a more telling metric? Here in Auckland, and relative to 2009, we seem to have a crash in sales numbers, but to the naked eye it appears more houses on the market than ever.  A ratio of one would indicate a sellers market and impending sales rises.  A ratio of, say, 0.5 a buyers market, and towards zero being nobodies market (i,e., you get nothing if you sell and you're stupid if you buy).

I just wonder what the ratio is here in Auckland, and what it can tell us about the year to come? Seems to me a lot of houses not selling, and yet these reports overemphasise the number that are.

Is this a case of sensible

Is this a case of sensible people selling up thinking it's all going to go backwards and uneducated buyers paying too much?

Yes.

Yes.

Other reasons to continue

Other reasons to continue investing in property:

1. It doesnt suddenly vanish - like so many other "savings" in finance companies etc

2. I t doesnt suddenly  "vanish" when something odd happens in the share market

3. There are more people in the world ( & in NZ) every year - but only the same amount of 

    land.

4. It will appreciate over time - no matter what happens over the next few years.

5. You can drive by & look at it !!

Cheers!

It can in a sense 'vanish' if

It can in a sense 'vanish' if you dealt with - for example a Bluechip lawyer - off the plans etc.

Or another example - if it was leaky and now worth the land only.

 

I would like to invest my

I would like to invest my money in something but I don't know what. I don't want to invest in property. I'm leaning towards the easy option of term deposits. The reason I don't want to invest in property is what I hear from friends. Out of all of my friends 3 of them have investment properties, 2 are topping up the mortgage and have lost money in capital gains as they bought in late boom times... the other was purchased in 2000 and has done well in capital gains but are seeing these slowly eroded and has also had night mare tenants.

Another note; So the property investors pay the banks interest, and for someone like me who is looking at term deposits they are making money on top of what I receive in interest. So the banks win. What is best for NZ? Buying shares in companies so they can expand. I don't want to do that as that's too risky with what's happened over recent times. So banks 1. NZ nil. Is NZ going to hit a downward spiral?