By Bernard Hickey
Auckland's largest real estate agency group Barfoot and Thompson has reported it handled the sale of 998 properties in July, up 28% from the same month a year ago.
This was up from 994 in June, which was the first time sales rose in July from June since 2005.
Barfoot said the average price for those sales rose to a record high NZ$591,444, which was up from NZ$589,251 in June and up 11.5% from NZ$530,191 in July a year ago.
"While Auckland residential property prices are increasing, they are not spiralling up," said Barfoot and Thompson Managing Director Peter Thompson.
"In the past three months the average price has increased by NZ$9000, an increase of less than 2%," Thompson said.
Thompson said sales were at the very top end of the scale for this time of the year.
"Although new listings were high (1295 properties in July), demand for property was also high, and it is creating a market where people are prepared to act decisively." Thompson said.
New listings in July were up 23.3 percent on those for July last year. Barfoot said it had 3,975 properties on its books, the lowest number at month end since late 2005.
"While attention often focuses on high values, 498 properties, or half of all homes sold in July, were valued at less than NZ$500,000 82 properties sold for more than NZ$1 million, compared to 50 in July last year," Thompson said.
Barfoots' full regional data breakdown shows the Central Suburbs' (Ponsonby, Grey Lynn, Mt Eden, Epsom, Remuera and Parnell) average price was NZ$739,414, up 17.5% from July a year ago. Sales there rose to 185 in July a from 146 in July a year ago.
Central Auckland (mostly apartments) sales almost doubled to 31 and the average price fell to NZ$348,642. Eastern Suburbs sales rose to 107 from 90 a year ago and the average price rose 25.9% to NZ$843,317.
North Shore average prices rose 9.4%, while Pakuranga/Howick prices rose 3.8%, South Auckland prices rose 24.8% and West Auckland prices rose 4.7%.
(Updated with more details, quotes, interactive chart below)
Barfoot Auckland
Select chart tabs
126 Comments
“Prices are not spiralling up, there is no property boom!”
@Zoltuger - as you note it is propaganda to deflect the embarrassment and lingering thought that the marauding hoardes recognise a form of theft and will tear their idyllic communities down just as they did in the Watts riots.
The pertinent point is noted in this excerpt from Bill Gross's latest Investment Outlook.
Yet the 6.6% real return belied a commonsensical flaw much like that of a chain letter or yes – a Ponzi scheme. If wealth or real GDP was only being created at an annual rate of 3.5% over the same period of time, then somehow stockholders must be skimming 3% off the top each and every year. If an economy’s GDP could only provide 3.5% more goods and services per year, then how could one segment (stockholders) so consistently profit at the expense of the others (lenders, laborers and government)? The commonsensical “illogic” of such an arrangement when carried forward another century to 2112 seems obvious as well. If stocks continue to appreciate at a 3% higher rate than the economy itself, then stockholders will command not only a disproportionate share of wealth but nearly all of the money in the world!
The stock market example above can be replaced by the REINZ strata 10 housing market in New Zealand - but the point is that labour's share of income has been diminishing for some time and the skimmed off wealth is re-directed to those believing they are entitled. JPM provides further proof
Wow - 11.5% in 12 months - That beats a taxed term deposit that nets you 3% at best!
Anyone know what Barfoots average price was in July 2008 or July 2009 - suspect prices are 20% higher than mid recession - quite a different scenario to the 20% to 30% drop many were predicting a while back eh!
Great news lets hope the price just keeps escalating :)
If some one could explain the logic of why the western global economy is contracting due to over borrowing, yet property prices continue inceases?
Its quite confounding and would appreciate someones logical theory on the subject?
2TB - it's a mental state known as cognitive dissonance.
When the music stops, bricks (well, maybe something with less inertia) and mortar are more tangible ways of safeguarding wealth, than the digitally-monitored variety.
The ponzi might continue if it's driven by cashed-up external bidders. It's in trouble if it's internal/mortgaged.
None of those mortgages get paid off in the current relativity situation, so either they default en masse (ugly) of someone instigates massive inflation.
On that point - it would be good to see an article that covers the arguments both for & against inflation and deflation. It appears us 'Bears' are expecting one or the other, so it would be worthwhile to know what the major contributing factors are for each side of the equation...
Maybe an article already exists but if not Bernard could jump into the ring swinging?
Quite a lot has been written.......
The Great Depression was a credit driven event, I think thats a good starting point as any of study.
The big thing is not to look at one simplistic aspect such as "printing causes inflation" without looking at the bigger picture. Keynesian economics talks about the zero bound or liquidity trap as to why printing causes no inflation, guess what for 4 years, no inflation...and indeed dis-inflation...This is because consumers, businesses and even govns are doing austerity, these factos so outweigh the printing done that I cant see any inflation.
NB I think its likely we are going to have both, so the big thing is going to be the order. I see a Depression with severe deflation then eventual inflation but the latter is 5 to 10 years away. Now its possible that the retail lending rates could rocket of no one wants to lend to us in the very short term.....before deflation sets in...not sure how fast this can / will occur...
Others see [hyper-]inflation (only?).
Others see severe inflation followed by deflation...
Since I see no logic in the last two I wont try to explain why others see them as probable.
regards
Better placed, although slowing growth economies purchasing 2 Tooth Bora.
In Auckland, as in a lot of areas of Australasia, Chinese money is driving the prices paid and desired property aquired, displacing those who buy again in an area near to or similar in prestige paying a little less and having cash in pocket to pay down debt or not as th case may be.
Following that you have the panic and fear of missing out collective ,desperately trying to aquire a reasonable first home in a reasonable area.....often overextending themselves to do so.
The interest rates available to borrowers is also a significat driver, but rest assured those who are paying top dollar have the where with all to be less constrained by borrowing percentages.
It's not a free market though, or a level playing field. The Chinese investors are able to secure MUCH cheaper finance than their local counterparts, therefore there's artificial skews on that free market.
For the market to be completely free, everyone would have the flexibility to borrow internationally on the same terms, just like they have the freedom to spend internationally.
Furthermore, the government would have to cancel all forms of welfare and adopt flat-tax, meaning that the market is completely free and not skewed by external factors and gov't meddling.
Stop saying it's chinese money! Typical Winston factor (now sit Winston, roll over!)
Have you been to some of the auction in the Auckland inner suburbs, where most of the demand are? Bugger all chinese bidders.. mostly full blown blue/green eyes europeans.. When our house was listed, all the people that went thru' open home, none was chinese/asian and it was sold our house to a fellow kiwi..
OK, Howick and Pakuranga might be another story but it's expected...
Yes I have Chairman...yes I have. Further to that the level of the Barfoot source is high enough and in the know enough to make staements of that nature.
Nobody's claiming they are buying everything in sundry , just setting the benchmark for what is paid in desired areas for education and the like........that is a DRIVER.
Apolgies for shouting driver.......but no I'm not suggesting invasion at all by any means or winnie doctrine......I'm not a fan...baubles of power n all that.
No I was in Ponsonby area.
But have been looking after my parents home in Newmarket area which has been rented out in the last 15 yrs. They are thinking of selling and I have been back a number of times this year, attended quite few auctions in the area on my spare time.
CM,
It is not all Chinese money. It is however external money'that would otherwise not be contaminating the supply-demand equation.
Local demand which is supported by loose money is just reacting to the supply-demand position.
If the politicians even were able to understand the implications of unfettered external investment, then they do have to power to rebalance the market, both by restricting overseas ownership and by dampening the money supply.
IMHO if we had had tens of thousands less immigrants (of whatever ethnicity) the Auckland property market would be better balanced. If indeed Chinese money whether hot or of a low interest source were not allowed into the market, everybody would be better for it.
Consider this. China does not have an extradition agreement with New Zealand. By that, New Zealand is setting itself up as the Majorca of the South Pacific. Read the history of the hunt for Christopher Skase of Qintex Corporation fame who did a runner to Majorca. Consequently, New Zealand is a magnet for chinese hot-money. Particularly hot-money, not borrowed chinese money.
When the house next door to me is bought for $660k and then rented out for $480 p.w. no local investor would accept such a low return - possibly about $17k per year. After rates, insurance and maintenance provision the return is very low.
If I had $660k, I can get a return of $40.8k after tax in the local share market with potential for lowish volatility and very low cost to liquidate in a day.
There's quite a bit of foreign cashed up buying going on (some apparently think NZ is going to be best place to be with impending environmental doom). When Mr X of China gives Mr Kiwi a few million for his house there's not neccessarily any borrowing going on, but prices can increase.
Not what I implied ....bob....those entering the market as first homers (local) are the main borrowers.....I thought I was clear on it.......Prices increase simply because neighbor( b) wants now what you got for your house of equal state and status.....ad nauseum.
Apologies ...Bob.....although I think you will find your statement...So price increases don't neccessarily mean more borrowing....doesn't hold up as the norm, rather the exception.
Displacement of the few drives the prices in the less desired areas and so on...Case point, Mt Eden residents relocating in Mt Roskill after selling to Mr X are paid up and cash richer (slightly) those entering the market in Mt Roskill are now affected by the prices set by the displaced Mt Eden dwellers.
There's certainly a ripple effect. However http://www.interest.co.nz/charts/real-estate/mortgage-approvals - value approved tab - shows a drop over last month at the same time as Central Auckland increased in value.
So house prices are going up in flash areas while borrowing goes down. Looks like price increases don't neccessarily mean more borrowing to me?
Alrighty Bob.....borrowing reduces in Epsom while prices rise....
Prices rise includes asking prices on listed houses, not reflecting nor accepting they are sold at this point.
Borrowing in that area may indeed reduce because buyers are ( A ) cash rich (B) upgrading with considerable capital to inject (C) or idle as some 3mill+ properties are...awaiting buyers.
Borrowing in Blockhouse Bay to Sandringham say, increases because ( A)the volume turnover of property is greater and to a different demographic of incomes.
The view should not be a snapshot by month, but rather over a year to year.
Question...? if a property is listed at 1.2 million, bought a year ago at 985K ,unsold at this stage but likely to move quickly , ....Where did the increase in price come from if not from a current sold property of similar state and location.....?
Bob. A hypothetical for you. Imagine you WERE the original owner of that property in Botany with a QV of $800k and you have a mortgage of $200k. You have been aspiring to move to say Meadowbank or Remuera or Epsom, and you have had your eye on a property in each of those suburbs, all with asking prices of $1.2 million and QV's of (say) $1 million. Out of the blue, along comes someone who offers you $1.5 million for your house. You accept. Now what do you do. You now have the ability to migrate "upwards" and pay down your mortgage of $200k. Will you pay the asking price? Will you haggle them down to QV? or do you offer somewhere in-between, or do you lash out and offer to pay the $1.3 million, (what the heck) net cash you have of left from the sale of your house?
Nothing wrong with the argument. I brought up this original Botany deal and the buyer is in fact Asian and buying sight unseen and only on the recommendation of their agent here.
All I point out is that if we as local citizens were not in competition with external forces the market would be better for all of us.
Maybe the property in Botany would not command that price but neither would the prospective purchase in Remuera.
I also quoted that according to a UK source there is $120 billion ($120,000,000,000!) of hot money leaking out of China alone then there is India and others.
It is really time our inept politicians came into the world of the average NewZealander and crushed this speculation. By not only stopping it but also foircing re-sales only to others here who qualify, the rort would stop overnight. I also wonder if the IRD has the firepower to test the sources of income for these overseas resident owners.
Stehpen Hulme: It was an actual transaction reported by Basel Brush III last week. It was a Chinese Lady Real Estate Agent acting on behalf of a Chinese buyer who bought sight unseen. Anonymous phone bidder.
Diary this one. Love it. Gonna quote it ad-nauseum for the next year. BB3 if you are watching can you find your original post?
Yeah just like the modern impressionist art dealers - quietly over a period of time pick up examples of an overlooked genre - then bingo at one of the Southeby's or Christie's public auctions bid right through any recorded price level and more as an anonymous phone bidder, but enough placemen in the auction room.
Well not all prices are increasing, so yeah sure in some areas in others the reverse seems to be probable.
Anyway several reasons,
a) Look up Nero....fiddling.....ie the second gilded age, the rich have more and more money. So while many are losing their homes, the few can buy bigger....check out what happened to nero.
b) Also look up the "tulip mania".
c) Then if you feel really brave look up the 1920s and then the Great Depression.
regards
A single 54-year-old grandmother, who is sleeping in her car, says she never would have left Australia if she knew how tough life was back in her home country.
Gayle White is sleeping in her Ford stationwagon, parked in her daughter's driveway in Richmond, while she waits to move into a Nelson rental home.
"I have wished I never came back here, but I am here and I can't turn the clock back," she said.
Social agencies say more older, single women living alone in Nelson are struggling to find housing they can afford to rent.
"The cost of living in New Zealand is so much more than in Australia. In Australia, New Zealand butter is half the cost, milk is $1 a litre and bread is $1 a loaf."
Hypertiger
Once the net consumers have inflated the debt supply by the maximum potential amount the net producers can support...you have to dump the net consumers in favor of the net producers.
The supply/producers backs/support the demand/consumers...and if you can't supply the demand for yield...there is no yield.
Theres the yield you demand and in order to supply that demand you must supply the demand what it wants or needs in order to supply your demand for yield.
If the demand for power is greater than the supply of power...Whatever you are trying to sustain the existence of dies.
When maximum potential power is reached...the system begins to collapse.
Like the power trading system in India.
Unless you control or own your own supply...
So owning production/supply is better than owning demand/consumption when a trade system begins to collapse.
Like in the USA...The production of oil is close to 10 million barrels a day and consumption is 19 million.
Massive demand...Sure there will be price shocks...But production zones of the USA will recover quick...consumption zones will go bankrupt. http://forums.wallstreetexaminer.com/topic/1044844-zh-have-no-fear-you-…
Below rock-bottom
We may have thought in the last four years that the financial industry reached rock-bottom. But in the last couple of months we clearly heard knocking from below and it looks the financial industry will fall even further. http://gregpytel.blogspot.com/2012/07/below-rock-bottom.html
The economic fundamentals in the NZ economy have not changed from a year ago , so this rush of activity in Auckland is down to the same three suspects ,namely 1) cheap money , 2) supply constraints (due to costs of subdivision resource applicationsetc) and 3) excess demand from renters turned buyers , immigrants and Christchurchers.
Unless supply constraints are dealt with this problem will only get worse.
another sad but bleading obvious example that the OCR is a blunt tool ESPECIALLY when it does not include house prices in its measure of inflation - in this example its like swinging a baseball bat around a lounge full of fine china to kill a mosquito. Low rates is NOT helping our businesses, and neither is mass immigration and loose foreign investment rules. NZ is not for NZers any more - its for speculators, banks and foreigners.
What a farce!!
so more sad news for Auckland and its future (with the exception of speculators)
Even more insane house prices mean even less money for people to invest and / or spend in the local economy
Even more insane prices make it that much harder to attract / keep key workers in KEY areas of our society such as education and healthcare
Thanks to the National Govt for doing nothing and helping to ruin the country's future
(Note: Barfoots are reporting AVERAGE Prices, median house price increases are likely to be significantly less)
I take your point, but often the seller will just invest that in buying a bigger / better house.
You have to acknowledge that as buyers spend more and more of their net income on housing, they will have less money to invest / spend in the local economy.
One of the reasons Houston has such a vibrant retail, entertainment, dining and cultural scene is that people have plenty of discretionary income left over after housing costs
You mean they'll buy a bigger and better house with an even bigger mortgage. Thats the assumption, any proof of it? Seeing more people downspecing (like empty nesters) and reducing debt than people pumping up their mortgage. Mortagage borrowing is down according to the Interest.co.nz charts - even as Auckland houses have gotten more expensive.
- not quite true. There are 3 main transfers of wealth occuring here:
1) the profit on the lending is migrated to our ever profitable oseas banks
2) higher lending requires more money to be earned in the future for consumption now - that is stealing productivity from future generations
3) at the moment a wealth transfer is occuring from new households to those already established.
So NZ's housing farce is both economically stupid for NZ as a whole, unsustainable in the long run (but sadly it looks sustainable in the short run), and worst of all inequitable. I guess thats why John Key likes the status quo, he hails from an industry that thrives on all of this.
From Q+A Proffessor Paul Spoonly:
JESSICA – Are we growing as fast as we should?
PAUL – No, we’re not, but then all countries in the Western world are in decline, and we are what’s called premature ageing. So not only are we getting a lot more older people – that’s in size – but as a proportion of the population they’re growing because, of course, we’re seeing quite a few young people leave the country.
JESSICA – Let’s talk a little bit about that population spread. Why are so many people moving to Auckland?
PAUL – Well, Auckland – there’s an agglomeration effect, so the bigger Auckland becomes, there more attractive it becomes. It becomes more attractive economically, but it also becomes more attractive as a place to live. And so we’re seeing the sort of perimeters of New Zealand, the regions, beginning to flat-line, so they’re not growing, and we’re now beginning to see the first of regions beginning to decline.
JESSICA – How is Auckland growing compared with the rest of the world in terms of a city?
PAUL – Well, just to talk about New Zealand for a minute – natural growth, that’s the births over deaths, is still the most important factor in New Zealand’s growth. But in Auckland, our most important factor is immigration. So we are one of the major destination cities around the world, and you can see that in the make-up of Auckland – the number of people who have been born overseas.
JESSICA – Let’s talk about that immigration mix, particularly in a place like Auckland. 40% of the population is born overseas. What is that immigration growth looking like long term?
PAUL – Well, the first thing is that 40% puts us right at the top. I mean, there aren’t many cities around the world that have 40% of their population born overseas. I mean, Toronto, Vancouver, but really Auckland’s right up the top there. Increasingly, if you look at the figures for the last year, we still attract people out of Britain, but we’re also seeing very large numbers coming out of India, and the growing population is the Filipino population. So we’re what’s called a super-diverse city, so we— immigration’s very important to the city’s growth, but it’s the diversity of that immigration population that’s really important, and it marks Auckland out. I mean, people tend to think of Los Angeles or London. In fact, Auckland’s more diverse than those cities.
JESSICA MUTCH INTERVIEWS PAUL SPOONLEY
Rod Oram:
Fast population growth over the past decade has strained infrastructure, boosted house prices and reduced the quality of life in the Auckland region.http://img.scoop.co.nz/media/pdfs/0705/RMA__Oram_Paper_May_2007.pdf
Savings Working Group:
http://www.stuff.co.nz/.../Government-policies-blamed-for-house-prices
PAUL – Well, firstly, it’s a doubling. So we’re at 600,000, so we’re seeing the over-65 double. I think the second thing which is really concerning is what’s called the dependency ratio, which is the ratio between those who are in the workforce and those who are dependent on the state in some way. And we’re seeing that decline. There’s a big bite out of the younger New Zealand age groups because they’re going. I mean, 150,000 New Zealanders have left this country since the start of the economic recession, and that’s a huge concern. So we need people to stay here, and we need people to be working here to support that dependency ratio.
...
Australian Productivity Commision:
THE case for higher immigration as a driver for economic growth is far from proven, as is the notion that more immigrants can counter the negative effects of population ageing, the Productivity Commission says.
A great sucking force can be felt around Australia, siphoning resources southwards, down the hungry throat of Melbourne. Australia makes, Melbourne takes.
''Melbourne is a parasite economy,'' says Bob Birrell, the doyen of immigration and population studies in Australia. ''Increasingly, the fiscal dividend from Australia's mineral boom is having to be distributed to Victoria to pay for the needs of Melbourne's population boom. That's why the Victorian Premier, John Brumby, is constantly having to go cap-in-hand to the federal government for assistance.''
Reporting Superdiversity. The
Mass Media and Immigration
in New Zealand
Paul Spoonley & Andrew Butcher
Increasingly, after 1996, feature writers, columnists and editorial writers took a
much more positive view of immigration, including Asian immigration. Some were
from the communities concerned (Raybon Kan and Tapu Misa are two prominent
columnists) whilst elsewhere, editorials were dismissive of the anti-immigration
politics that had emerged in 1996. By the 2002 election, most of the major
newspapers had adopted an editorial position which was highly critical of such
politics. Moreover, all the major metropolitan newspapers ran features during 2002
(prior to the election) which sought to put immigration into context, which profiled
immigrants and presented their stories in a generally positive light (if there were
criticisms, they were often directed at the host population) and as a way of
personalising the communities concerned. The simplistic racial labels and generalisations
which had previously been common were largely absent although there were
some exceptions (see the article below on Maori concerns). For example, the
Dominion Post ran a series in September 2002 titled ‘‘The Immigration Debate’’ which
included the following:
16 September: ‘‘Why Maori fear being swamped’’, ‘‘National identity crises behind
rhetoric of fear’’ and ‘‘Welfare statistics shatter bludger myth’’;
17 September: ‘‘Looking for the magic number’’;
18 September: ‘‘Paradise postponed’’ and ‘‘The tough questions that won’t go away’’;
19 September: ‘‘Why the melting pot doesn’t work’’.
Despite the wording of some of the headlines, the articles were extensive, sympathetic
to immigrants, provided nuanced and detailed explanations of current immigration
trends and outcomes and offered a challenge to those who were sceptical or opposed
to immigration. The paper also included profiles of immigrant groups under the
heading ‘‘Ethnicity. Celebrating Cultural Diversity’’.
The shift in the representation of Asian immigrants after 2000 can be explained by
a number of factors. The first is the decline in Asian immigrants during and
immediately after the 199798 Asian economic downturn. There was a significant
economic impact as the demand for housing dropped, along with various consumer
goods (cars, household appliances). Economics reporters began to highlight these
negative impacts and to re-assess the implications for the New Zealand economy,
both in terms of domestic demand and international competitiveness. Something of a
turning point was achieved and a number of positive stories started to appear (e.g.
‘‘Asian Migrants The Myth and the Reality’’, New Zealand Herald, 29 October 1997).
Once the numbers of immigrants from Asia began to rise again after 2000, the
positive stories continued, especially in terms of what immigrants did for economic
growth. But this was accompanied by contributions from senior journalists,
//
The politicisation and problematisation of Asian migration was mirrored
in the print media. After 1997, and certainly since 2000, opinion and feature writers
adopted a very different approach, prompted in part by a major downturn in Asian
immigration and a greater appreciation of at least the economic benefits of
immigration but also as a result of a growing awareness amongst journalists that
they had a role to play in explaining (positively) the complex issues of immigration.*
There was a realisation, from both managers and the journalists concerned, that these
new migrants were an increasingly significant audience in their own right, underlined
by the decline in print sales and revenue.
.................
that would help explain why immigration doesn't feature in any media treatment of the curse of high house prices.
[there is also the ideology of the left: Green Party/Labour being inagreementt with National and other factors...]
I'm all for a bit of diversity but the scale of New Zealand, in particular Auckland's immigration influx is astounding, and as the articles above point out pretty much uncontested for dubious economic reasons and because everyone is afraid of being labeled a xenophobe.
Imagine the Chinese or Indians allowing a sudden influx of Europeans on the same proportionate scale to their cities. 1m+ Europeans settling in Shanghai or Mumbai in a decade on top of their own internal population increase. I don't think so.
This is where the Greens very liberal refugee and immigration policy head butts its housing and environmental policies.
Well put Hugh.
What one can ascertain about the current Key lead government is they are not concerned about the people of NZ and the need for affordable housing; but protecting the minority who control most the wealth in NZ.
Feels like something out of 9th century fuedal socioty, but this time the lords are running around in the latest Range Rover to there mansions. The peasents continue to plough their feilds then cast away once unproductive.
hehehe, you are expecting me to bite? or Stephen H.?
Im not so sure I have argued on his obsession with inflation? So far Ive supported keeping the OCR where it is and even sending it lower to bugger the carry trade...
I certianly dont agree with wtf's contention that an explosion in house prices in a limited area of Auckland is reason to raise the OCR.....everything else is at best enemic....
For me there is an asymetrical outcome,
a) Ignore this and maybe see a little inflation, core is 1% ish so if it goes to 2 or 3% no bigge, then action can be taken.
b) raising the OCR right now assists in popping the bubble and we send our economy into a recession as other sectors buckle. If that happens its no easy task to fix....
So on the one side a minor problem that is fixable v on the other serious that may not be.....
I sometimes wonder if the likes of wtf with a von-mises political outlook wants a crash as an excuse to slash and burn, crazy if so IMHO, becareful what you wish for as they say.
regards
Didn't suggest raising them nationally. Don't Bollard's prudential measures allow him to impose regional or local imposts like variable LVR's or mortgage rates?
Real inflation if you pay rent or rates, use electricity or gas, pay school fees, eat meat, is far higher than 1%. Even wine is rising as the glut ends :( I only buy a TV or computer once in a blue moon. I just think Auckland now, mainly because of property, is too expensive for anyone earning less than about $70,000
Not an Austrian. I like Keen's big reset/universal jubilee idea myself.
A model? hehehehe
I just thought it was a line of bollocks to be fed to the masses when they suffered from cognitive dissonance. That is, their experience of finding it harder to survive is put down to "non-core inflation", but, as "core inflation" is ok (because it's had the wazoo manipulated out of it), then, you know, the likes of Bolly don't have to do anything.
Lots of posts here from the grumpy brigade who don't like house prices going up, proving my iron law of interest.co.nz that the more these posters complain about the housing market, the stronger the housing market is.
Looks like Infometrics property prediction of a couple of years ago is proving right.
Your Landlord...enjoy your moment in the sun....as it undeniabley shines on P.I.'s in metro areas, but don't forget to leave the table laughing.......
It (property) is what it is....and I cannot argue against facts, nor can Bernard,
But I hope your O'K with us moralising it a bit from the struggling young N.Z.ers point of view.
Enjoy the Fizz..! have one for me and shout Ole!
The only thing that will halt Auckland property now is a comprehensive land tax of 2-5%, a complete freeze on immigration or interest rates north of 10%. All of them could be applied regionally. Everything else is going to be ignored because of these publicised high capital gains. The animal spirits are being unleashed. Can't do much about supply in the short term but you could stop demand in its tracks tomorrow.
Well Bernard won't put up the top ten...so here we are Yay it's Friday....
You gotta love those Queenslanders......... Bluey goes to an outdoor show and wins a tinnie. He brought it home and his wife looks at him and says, "What you gonna do with that. There’s no water deep enough to float a boat within 160 Klms of here." He says, "I won it and I'm gonna keep it." His brother came over to visit several days later. He sees the wife and asks where his brother is. She says, "He's out there in his tinnie", pointing to the paddock behind the house. The brother heads out behind the house and sees his brother in the middle of a paddock sitting in the tinnie with a fishing rod in his hand ..... He yells out to him, "What are you doing?" His brother replies, "I'm fishing. What the hell does it look like I'm a doing?" His brother yells, "It's people like you that give people from Queensland a bad name, making everybody think we're stupid. If I could swim, I'd come out there and kick your arse!" Happiness!!!
Hugh's magic bullet MUD financing
"With MUDs, the central issue for government creation – collective action – was in the developers’ hands. The Texas Constitution and statutes authorized oversight over developers creating MUD; 4 however, this framework provided selected incentives to both developers and city officials. MUDs were economic efficiency tools focused exclusively on enhancing the developer’s property, on one hand, and enhancing the city’s tax base through annexation, on the other hand. Thus, MUDs facilitated a synergy between land developers and city officials wherein developers had primacy over MUD creation. Tax increment financing, as spelled out in state parameters, changed the landscape for development. As noted below, it alters the relationship among political interests in the city (developers, the city, minorities, and neighborhoods). Furthermore, it changes the incentive structure for the city and developers. MUDs provided a central economic incentive to developers: utilize MUD bonds to finance improvements that legally absolved them of most financial responsibilities if their projects failed. For the city, MUD financing of unincorporated infrastructure created a lucrative tax base for the city to capture once developments were built out. Tax increment financing is used by city officials as an incentive for developers to focus on city projects to enhance the city’s tax base through redevelopment of blighted areas. This is no 4 Two amendments to the Texas Constitution in 1904 and 1917 are the legal antecedents of MUDs. The 1917 amendment established the legal framework to make districts extremely beneficial to private land developers. It gave landowners exclusive authority to create a taxing district to make land improvements by a simple majority vote of resident taxpayers. This principle is sound when applied to rural areas; however, the benefits are skewed when applied to urban developments. In the early stages of development, for example, the developer as the initial landowner can use publicly generate revenues through district debt financing to improve his land. His risks are minimized in relation to his benefits simply because he transfers the risks to the public entity, the district.. "
http://citation.allacademic.com/meta/p_mla_apa.../p136948-8.php
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I have to wonder if a developer is raising finance for an Unable to Afford r Us Subdivision just what sort of services they will get. After all Chc isn't an oil industry hub nor do we have NASA.
Remember too Hugh is of the view that people are capital and more people equals more wealth so the Unable to Afford r Us will be competing with wealthy immigrants?
In Houston the rules governing the installation or reconstruc- tion of local streets are fairly straightforward and essentially put the decision-making burden on nongovernmental actors . Thus, DPW officials assume that persons who want street improve- ments can get them, and those who do not have improved streets must not want them .33 www.angelfire.com/.../Fisher-Urban%20Policy%20in%20Houston.pd...
Region Building type Small house*
145 m2
$ Large house*
202 m2
$ Light commercial
414 m2
$ Commercial
896 m2
$ Retirement home
394 m2
$ 1 1,788 1,628 1,308 1,431 2,079 2 1,770 1,611 1,292 1,426 2,059 3 1,790 1,629 1,318 1,443 2,080 4 1,767 1,607 1,291 1,424 2,052 5 1,778 1,618 1,301 1,432 2,067 6 1,763 1,605 1,287 1,423 2,050 Notes:
1. The rates for the Canterbury Region are assessed at a base level. The concentration of Christchurch earthquake rebuild work is assessed to have a 10% to 20% additional price premium over the above value.
2. The 'rest of' North and South island regions are wide spread areas and values provided are assessed averages.
http://www.dbh.govt.nz/bofficials-estimated-building-costs#map1
Hey don't blame me...it was only a table...
Notice the chch premium...ie extra costs....
Now this has got to be a WTF story....let's ignore the chch 'premium' and say $1600 a sqm for a new box of Rhubarb with brick exterior and cheap as she goes...so our Kiwi peasants wanting a 200sqm box will have to fork out at least $320000....plus the land...wooopeeee
Suckers in chch will need another $64000!
Dunno where the DBH get these figures from, but builders always underestimate when applying for consents so that the fees cost less.
I doubt anyone can enter into a contract to build a new home of 145m2 for less than 2,000 plus GST in Auckland and with all the additional engineering requirements now needed when building in Christchurch the cost will probably be even higher.
So not gonna be too feasible building in ChCh at $290,000 plus GST for a 145m2 house plus GST, plus site works, driveway, fencing etc and the cost of the section on top.
Perhaps government needs to rebate the GST on all new homes constructed over the next 5 years in order to stimulate activity.
I tried to wake English up to his own gst madness but what a waste of effort. Now we have the scaffolding tax slapped on top plus gst. Costs keep rising. Demand keeps declining.
We are more likely to see gst raised again to 17.5 just to kill off the sector once and for all.
I have built for $1150sqm gst thieving incl....but managed it myself from day one...not a process to be undertaken by Joe Peasant.
Young Kiwi should be helped to recognise that the playing field is tilted steeply against them. They need to learn that renting can free them from parasites and employment failure...the German peasants learned this long ago.
As for building in chch...madness.
Yes soon we shall be living with warrant of fitness for houses just as in pommyland where the madness started...an annual bill for sure...you can't live in it without the warrant...$20000 fine....the usual garbage....fees for councils for sure...
Followed by 'orders to renovate'...issued by council inspectors...out to cement in place their job...and rake in fat fees for councils..$20000 fines for not complying....
Think of the jobs created....thousands of warrant officers and thousands of renovation inspectors.....
America's Future Is Taking Shape In The Suburbs
http://www.newgeography.com/content/002992-americas-future-is-taking-shape-in-the-suburbs
The suburbs are dead, RIP. I'd suggest getting over your political blinkers and look at the pardgm shift that is scare and expensive energy. Sure suburbs have been expanding for 10, 20 years based on cheap energy which is no longer the case....ergo looking at the past to predict the future is no guaratee it is going to be like that when you ignore why it was possible....
regards
Apparently cheap energy is not the problem - there's already enough proven fossil fuel reserves available to end civilisation 5x over or something
http://www.rollingstone.com/politics/news/global-warmings-terrifying-new-math-20120719?page=5
Density Is Not The Issue: The Urban Scaling Research
http://www.newgeography.com/content/002987-density-not-issue-the-urban-scaling-research
Yes, maybe.... I listened to this on TED, talks purely about population as being the biggest factor...the rest didnt matter much.
http://www.ted.com/talks/geoffrey_west_the_surprising_math_of_cities_an…
In fact you really need to look at this TED talk, then you see this author's work or contention is in the opposite to West's.
This also probably applies to Countries, so NZ with 4 million v OZ at 22?million makes it all but impossible for NZ to match anyone else.
Same with Auckland v Sydney, 4 times the population? would seem to suggest 15% more GDP / pay easily that simply cannot be made up. Although I think Wellington V Auckland would make an interesting comparison as wages in Wgtn are higher at least in IT. comes down to networks maybe....
What I do note is that the writer seems to have possibly "expanded" on the base work with an opinon I cant see backed up with depth. So he appears to have taken the original work and subjucated it to the output he wants.....which is dubious.....oh looks where the author comes from.....In fact West seems pretty adament that its population....and planning or not doesnt matter....
The interesting bit is of course they are more effective as they grow based on being able to get the inputs mainly energy (in all its forms) into them. So in effect they have always sucked from around themselves except for the last 100 odd years they have had huge external inputs....oil....
What happens when the oil age ends? Cities cannot survive, GDP cannot survive, innovation will slow, wages drop etc etc........it would be intersting to see/hear West's comments on this...
regards
Listen to the Chatter: what happened while you were asleep. The quiet revolution gathers pace.
DEADLY EMBRACE
While Australia prepares to embrace Asia, in many ways the reverse has already happened in places such as Glen Waverley. What was once a white middle-class eastern suburb has transformed into a thriving hub of Chinese Melbourne
ELEGIBILITY
An Australian resident passport was needed for admission, and each of the 300 who filled the former bank was given a name tag and number, with a purchase limit of one unit each. ''I had 16 people to sign up the contracts and we couldn't sign the contracts fast enough
Points to note:
(a) prospective purchasers had to have an AU passport to get into the auction
(b) all apartments sold on the day
(c) only 2 buyers were caucasian
(d) all but 2 buyers were chinese
(e) all buyers paid well above the asking price
To those who see increasing the supply side of housing should read this article, digest it, and think again. It wont solve the availability of housing to young local first home owners. (in auckland) They won't get a look in. As fast as they come on the market they're gone. If you didnt believe the widespread intensity before, believe it now.
http://www.theage.com.au/victoria/most-liveable-chinese-think-so-20120804-23mno.html
It wiil inevitably lead to problems or the disappearance of Anglo-Saxon residents. I suggest many will just die off from malnutrition as their traditional forms of employment get swallowed up. I just cannot foresee the State having the resources to feed the unemployed while the elite and their entitled servants extend their demands that labour receives a diminishing share of the GDP pie. Corporates and their owners just don't pay enough taxes.
While people comment here about the flood of hot-money sloshing around the world seeking a home or an opportunity, it gets no traction because it is invisible, and while it's invisible, no one gets concerned until it becomes visible. As Bernard commented on Fridays Top-10, there's a flood of money pouring out of china. Basel Brush said it's about $120 billion. You commented it's money laundering (agreed). The article above simply puts a face to it, making it visible and tangible. With cause and effect. One of the effects is our society is being re-engineered for us.
ALL cash. No debt. No mortgage.
They are increasingly rich, hungry for the good things this country has to offer, buying high-end homes, paying huge amounts of cash up front to get them without going into debt.
non-US buyers accounted for $82.5 billion in residential property sales in the 12 months ended March 2012. Chinese purchasers made up 11%
But foreign buyers still make up a small part of all US sales, accounting for just 4.8% of the total dollar amount in the last year.
paste,s from icono,s link--chinese buyers approx .5 % of market are they not???
Foreign buyers still make up a small part of all U.S. sales, accounting for just 4.8 percent of the total dollar amount in the last year. While in relative terms this represents an increase, the numbers will probably not spur a nationwide real estate recovery.
............................................
anyone got figures for NZ?....
Foreign buyers still make up a small part of all U.S. sales, accounting for just 4.8 percent of the total dollar amount in the last year. While in relative terms this represents an increase, the numbers will probably not spur a nationwide real estate recovery.
............................................
anyone got figures for NZ?....
I don't think it is foreign buyers fuelling nz..... its cheap money; rising rents and relative employment stability.
This place is in a block of 8 in Auckland's "hot" suburb of Onehunga.
http://www.trademe.co.nz/property/residential/for-sale/auction-504015312.htm
The 8 places are all very similar and three years ago one went for $290,000. two years ago one went for $345,000 and this year one went for $430,000. This one is likely to go for late $400s and it's considered a bargain as there is nothing else in the area that is standalone for near that price. At this end of the market in suburbs like this demand is outstrippping supply massively.
First home owners are doing what it takes to get into the market and so anything that can be purchased for less than %500k is seen as a bargain.... which over the next few years will probably prove to be the case.
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