Harcourts' average selling prices are declining as the number of sales drops 18% at the country's largest real estate agency

Harcourts average selling price is now below where it was 12 months ago, suggesting capital gains are drying up.

The average selling price of homes sold throughout the country  by Harcourts, the country's largest real estate agency, was $577,595 in July, compared to $594,291 in July last year (-2.8%).

The biggest fall occurred in Christchurch, where July's average selling price was $488,079, down 6.5% compared to  the average price of $521,850 in July last year.

Harcourts' average selling price in Christchurch has now declined by more than $100,000 since it peaked at $588,362 in March.

In Auckland the average selling price was $1,009,090, up 1.2% compared to July last year and in Wellington, July's average of $457,354 was up 8% compared to a year earlier.

However the average price has been patchy in Wellington recently and July's average was well down from the peak of $499,543 achieved in May.

The downturn in prices was accompanied by an even bigger downturn in the number of sales.

Harcourts sold 1627 residential properties in July, down 18.1% compared to July last year with the biggest decline occurring in the South Island (excluding Christchurch) where sales were down 31.1%, followed by Auckland -19%, Central North Island --16.1%, Christchurch -10.4% and Wellington -8.2%.

Selling by auction appears to be particularly out of favour at the moment, with Harcourts conducting 40.6% fewer auctions in July than it did in July last year.

Harcourts chief executive Chris Kennedy said there could be no argument that the market had dropped back from the heights of 2015/2016.

"There are many reasons for an overall drop in sales," he said.

"Investment has fallen off due to the Inland Revenue Department's introduction of the bright line rule, the Reserve Bank's loan to value ratio restrictions, and foreign investors facing a more difficult task in transferring money out of their countries.

"Things have slowed, but that doesn't mean there is going to be a crash.

"Just an adjustment in sales levels, prices and expectations. "

And Kennedy saw a bright spot coming from the country's economic performance.

"The good news is, regardless of what happens during the election, our economy is thriving and business confidence is high.

"This is not going to change overnight," he said.

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171 Comments

This is probably the soft landing most people had hoped for. Now if it can be maintained further, with minor percentage drops yearly (3-5%) then it'll be ideal.

We have almost among the highest level on property investment relative to population in the world, but one of the lowest in R&D investment.

Yeah and don't we now rank 4 and 5 th most unaffordable city's in the world , Auckland and Tauranga now, lovely, I guess we don't love our kids

These are averages, not medians.

Why are some of the stats average(mean?) and this bit Median "In Auckland the median selling price was $1,009,090, up 1.2% compared to July last year and in Wellington"

Are they trying to hide something in the numbers or is this just bad reporting?

yes, muddled - some clarity on that would be useful.

Understanding that there is a difference between a mean and median should not an excuse to dismiss either as a measure of central tendency.

Well spotted. The error was ours. All prices referred to are averages. Thanks.

Thanks Greg,

Your frank/honest admission is to be commended.

You set a very good example. (A number of people who come here might learn from it.)

Looking at both the median and average is a basic departure point in any analytical process. If the median is higher than the average, it simply tells you the extent of skew in the distribution. Median prices are not necessarily an indicator of how much capital gains a property owner has made.

Yes TTP

Hows this for frank and honest. I love beer.

Greg Ninness - who works out the percentages in your articles?

It is interesting that they appear to switch between the two, depending on what figure best supports their opinion. Average is potentially more accurate though. Median can potentially be inaccurate when there are very few properties sold. Median however is used almost all the time for realestate statistics in NZ. So I am not sure why on this one, average is being used?

How would these figures compare to the median figures?

" capital gains are drying up." The perfect time to introduce a CGT? No tax to pay if there is no CG ! ( And, no. Losses don't get offset against income. It's cG t )

Capital losses to carry forward, no revenue for the Government just when they turn on the spending taps.

Sticking with no CGT produces no revenue with a far greater degree of certainty but zero incentive for behavioural change!

Sticking with no CGT produces no revenue with a far greater degree of certainty but zero incentive for behavioural change!

How do you know a CGT doesn't influence human behavior? It is well known that property and speculation and bubbles are driven by nudging theory through tax policy.

I completely agree. I think you might of missed the "no" on "no CGT"

Absence or existence of CGT influences behavior, not simply the absence of it. Human beings usually make decisions subjectively on a range of variables, of which tax benefits may be one.

Capital Losses don't necessarily Carry Forward! It's a cGt G for Gains. No L for losses. Capital Losses can and do vary across asset classes, and are what any legislation dictates. If it says "No losses can be carried forward on property" then no losses can be. It depends on what's enacted. But let's be generous and give current property owners, say, the two years of the current Bright Line Test to carry any losses forward for that time, then they are off the table. That could be interesting over the next 2 years!

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this should be good news for the whole nation.. ie, people buying houses are taking on less debt... the comments passed by the PM yesterday are the stupidest I have heard since mr Key stepped down

"Things have slowed, but that doesn't mean there is going to be a crash."
Phew, I was worried there that dropping sales and prices would be a precursor to a crash.
Lets hope the "adjustment" doesn't accelerate.

Depends on what the definition of a crash is? When a houses drop in value at all, that could be seen as a crash. So it all depends on how major the crash is.

So happy to read that "In Auckland the median selling price was $1,009,090, up 1.2% compared to July last year" - yay!

Are you happy that is has not gone negative yet? 1.2% is a lot less than you will be paying in mortgage on your interest only loans...

As I bought my properties pre-2007 the mortgage level is still low compared to historical 9% or 10%. One word to describe today: Happy.

...I think moneyphobe was questioning why you are happy with an investment that has made 1.2% (not adjusting for inflation) over a 1 year period.

Cue the logic of a property investor.

Just be happy. 1.2% is low but it is not too bad and much better than -1.2%.

1.2% gross of inflation is "not too bad"?

Again, another great example of the financial aptitude of property investors.

It's pretty obvious that it's another one of Double-GZ's lies like the one time he/she got caught out saying he/she owned a Mission Bay rental but the next day backtracked and said he/she just got carried away telling a story.

@nymad Berkshire Hathaway fell in value in 1999, but that goose of an investor Warren Buffet didn't sell, what an idiot!

My point was not whether to sell or buy.
My point was that DGZ isolated a one period return and stated that it is "not too bad". He then arbitrarily said it is better than -1.2%.

Surely being as smart as you think you are, Laminar, you should see how pointless this is.

My point was not whether to sell or buy.
My point was that DGZ isolated a one period return and stated that it is "not too bad". He then arbitrarily said it is better than -1.2%.

"Not too bad" is a subjective observation. It has no statistical anchor. For example, if you compared it with the past 10, 15, 20 years, you would probably find that statistically it could also be "not so good."

@ nymad Well imo he is having a laugh and very likely doesn't care if housing goes up or down in value. -1.2% wasn't arbitrary, it was a humerus use of the inverse yoy% change.
And im just commenting that 1.2% actually isnt too bad. Imagine if 2008 had been +1.2%, yeah not too bad.

Remind me...how many rental properties in Auckland did Warren Buffet buy?

Im not sure but probably quite a bit in the USA through REIT. Im not sure if he owns them but he also sells mobile homes and still related are his loan issuing businesses.

DGZ , Just give it time , as last July , then last aug, then last sep yoy figures start falling off the end the figures with get closer to month on month now, of course if things keep going down it'll be lower

We will have a pretty clear idea in March next year how much it has fallen. Until then its a bit tricky to be sure.

It has to be averaged over the life of the investment. As with the Stockmarket, some years you may get a massive correction, and even a 20 percent or more loss. No different with investing in your family home.

Zach you were blessed with timing. If only those entering the market today in Auckland could achieve the same. At least Auckland is not experiencing the same amount of pain as investors in Christchurch are currently undergoing.

As I bought my properties pre-2007 the mortgage level is still low compared to historical 9% or 10%.

2007, eh?

Hey Double-GZ, you dropped a 1.

Happy and humble, nice to see.

Ha! DubleD you say pre 2007 you bought your properties ?! You failed to take advantage of buying after the GFC !? You stay down there guy . You wouldn't last up here !

Hi DGZ,

Really - it's not surprising at all.

Auckland's phenomenal population growth combined with resource constraints impacting on new-builds, means that demand far exceeds supply for housing.

Houses close to the Auckland CBD are becoming increasingly sought-after - as people try to avoid Auckland's transport/traffic problems. People are happy to pay a sizeable premium for convenience.

So iI is somewhat surprising that they are near static, or dropping at all. Although the price is largely dictated on what people can afford to borrow.

Don't get too congratulatory spruikers Those with far greater qualifications state https://www.stuff.co.nz/business/95460601/shamubeel-eaqub-property-is-no...

Shared via the Google app

Sent from my iPad Citi

What about the average price though? This story is comparing the average, not median price changes.

This correction is about at bit more than you DGZ and luck to you for buying years ago and not tapping your house up, but there's others that these high prices and if they drop will effect differently, FHBers , people that brought over the last 2 years with little deposit , investors with large dept, overseas investors thinking if they should hold onto there investment, people have alsorts of decisions coming up for alsorts of reasons, to many these are worrying times, bull or bear, boom or bust, correction, call things whatever makes you happy but I'm sure 99% of people know what's going on, the end of a boom fired by overseas investors, and greed to extremely high levels, booms start for many reasons and because generally people have stayed quiet before the boom jump in like a wild bull, boom end generally to do with money and housing being unaffordable, then leaving largely FHBers looking for housing that is over priced, that generally why we then go to the bust stage for many years and why prices drop over that period, banks won't lend in a falling market unless the buyer has a good deposit pushing prices lower, because buyers are a lot less and mostly FHBers that pushes the market lower again, people that know corrections have good reason to be concerned ,NZ HAS BEEN HAVING BOOMS AND BUST FOR DECADES

O4 normal 99% of people probably have no clue whats going on and a majority of that 99% also probably dont care.
Just to note that its hard to see what will go so wrong for FHB and and people with low deposits. They need to lose their incomes, not be able to find another income AND have no insurance in order for it to get ugly.
People that know corrections arnt over extended and have nothing to fear. Its very rare to find an investor with his pants down.

Total number of listings in Auckland up 43 percent vs July 16. That's possibly a more important stat.

Yes that and sales being very much reduced -19% in Auckland. What people like DGZ don't seem to realise is that they're comparing YOY data. The fact that we're only slightly above demonstrates that sales are dropping rapidly that pushes down prices. Especially when listings are starting to pile up, which will get a lot worse in the Spring.

@CJ099 this is what I can expect:
1. Don’t panic – house prices aren’t going to collapse.
2. If you don’t need to move anytime soon - current market prices are largely meaningless to you.
3. If you do need to sell soon - try and time the sale of your home to coincide with the purchase of your next one.
The speed at which the market takes off again will be determined by decisions of the incoming Government, the Reserve Bank, Trading Banks, and Councils - with the following predictions:
• Changes to immigration targets won’t solve the housing crisis.
• The LVR restrictions will come off at some stage over the next 12 to 18 months.
• Bank Mortgage Lending restrictions are here for a while.
• Mortgage interest rates are still on the way up – but not as quickly.
http://www.scoop.co.nz/stories/BU1708/S00471/property-institute-tells-ho...

When someone is not in the market - then talk is cheap .... CJ099 is still living with the hope that prices will come down if there is slow sale volume of too many offered for sale on the market ... He is biting his fingers, toes and everything in between for selling his investment properties too soon ....and with that logic has left his argument despite the numbers that have been published since March ...

Try to buy a quality house in Auckland today for March (peak) price - it is a challenge to find one !!

There wont be any let off in prices anytime soon ... the demand is increasing and not necessarily by immigrants alone .... Summer is around the corner ...and all Storms and Hurricanes will go away for another 3 years !!

....and those who are in the market seem to be getting hysterical about prices dropping and how salvation is just around the corner (and always just around the corner)

Face the reality prices are coming down. The demand was driven by speculation and a belief that prices would continue up. I will admit that the decline to date is smaller than I might have picked but the stock of houses for sale is rocketing - and may be understated by people who have taken their property off the market in the expectation that prices would rise again (echoed in your earlier comments hence your belief about a shortage of quality houses).

The difference between mean and median may explain some of the issues around the relatively static prices at the moment.

Waited until Chinese new year, then interest rates announcements and now summer and the election.

"Property will pick up again after the Chinese New Year." That can't be too far away.

Well they never did specify which year.

Actually DGZ and National Bird, I'm very glad that I sold at the peak of the market and I'm comfortably off. Even with my current Auckland home. I couldn't care if it goes up or down (Highly likely it will go down). It simply doesn't matter to me.

Those it does have an impact on is First Time Buyers, which the rest of us are trying to protect.
You can carry on ignoring all the facts but prices are heading south whether you like it or not. It's all far beyond our control, time to let the market settle down to an affordable value.

Unfortunately they dont care about first time buyers. They only care about themselves, and how many bottles of plonk they can drink with fancy labels, and whether people notice they have Louis Vuitton hand baggage.

LV - 1050 DGZ

I have some sympathy for them as beer prices are going up as well.

CJ099
Absolutely agree
I am concerned for all 1st home buyers & govt must address or face social disruption and destruction
Sadly people like Zach & DubleD do not exhibit fully evolved intellects and would rather waste time telling us here constantly how clever they have been.
The clever smart ones SOLD at or near PEAK and are living carefree lives not going to work each day like Zach & DubleD & dealing with invariable maintenance and life disruption rental property entails.
I ended up using property managers but these proved useless and I ended my long experiment with Auckland realty. Sold out to Chinese and live a sweet life.

I don't see how you are any different to me and DGZ. You are an old man who sold up. Which is what we intend to do when we are approaching our declining years too. Why can't we do what you have already done?

We haven't been telling people how clever we are either. It's just assumed from our upbeat comments that we are clever. All we have been doing, largely, is reporting the facts from our respective areas.
FHBs do want house prices to go up you know.

@NorthernLights: Well we've done our best to try to warn them. And yes I think FTB's are starting to realize that they need to hold off for more affordable prices. I've been watching these events unfold globally, check this article out:-

Financial Review article: House prices face China exodus risk, says former top US Federal Reserve economist
http://www.afr.com/real-estate/residential/house-prices-face-china-exodu...

Those who have knowledge, don't predict. Those who predict, don't have knowledge.

Lao Tzu

"Those who have knowledge don't predict"

What nonsense. I know that if you mix blue and yellow paint you get green paint. I can now predict what will happen when you mix these paints. Knowledge is largely used to make predictions.

You must be confused. If you already know the outcome, then you're not predicting. Mixing blue and yellow paint to give green is a KNOWN fact. That's why it's called "knowledge", because you already know the outcome.

How come scientists "predict" eclipses? You are confusing predicting with 'educated guess' possibly. With enough knowledge you can predict with reasonable certainty what is going to happen. Hence "Know your enemy" so you can predict what they are going to do and take counter measures. Nothing, except mathematics, is certain , even mixing paint.

What if the enemy is the self and you don't 'know thyself'?

Sun Tzu said,

If you know your enemies and know yourself, you will not be put at risk even in a hundred battles.
If you only know yourself, but not your opponent, you may win or may lose.
If you know neither yourself nor your enemy, you will always endanger yourself.

How many rentals do you think Sun Tzu would buy?

"Nothing, except mathematics, is certain , even mixing paint."

HAHAHAHAHAHAHAHAHAHA!!!

Did you just say that if you already KNOW that mixing blue and yellow paint gives green, but you're still not certain that green would come out? HAHAHAHA!!!

Like I'll give you 100 chances to mix equal amounts of blue and yellow, and you're not certain that you'll get green 100 times out of 100? Like you might get white?

Here's another quote for you then:

"Insanity: doing the same thing over and over again and expecting different results."

You say I'm the one who's confused? HAHAHAHAHAHA!!!

Incredibly ignorant response RichMulach. Scientists aren't 100% certain of anything and while 100 times out of 100 gives us confidence to put money on it there is never absolute certainty. Why is this so hard for you to grasp? Everything could just be some sort of illusion generated by a computer program. I think some guy once calculated that there was a 5000:1 chance that was the case.

Come on, man, it's obvious, knowledge gives us the power to predict.

Like knowledge that the earth is flat..? Or that it's the centre of the universe?

It's what you don't know that is the most important thing....

Mate, your ignorant "what nonsense" response to BadRobot is what sparked this. So if you can't take the heat then don't dish them out either.

And now you're talking about computer programs and illusions and asking me how I cannot grasp it? Do the things you type out make sense to you? You're off the rails, buddy. Best to admit you're wrong and just get off the internet, you're just embarrassing yourself.

What am I wrong about? That you can use what you know to make predictions? I'm wrong about that am I?

You're wrong for calling BadRobot's quote nonsense and for saying a known outcome (mixing blue and yellow gives green) is a prediction.

In science, a prediction is a rigorous, often quantitative, statement, forecasting what would happen under specific conditions; for example, if an apple fell from a tree it would be attracted towards the center of the earth by gravity with a specified and constant acceleration. The scientific method is built on testing statements that are logical consequences of scientific theories. This is done through repeatable experiments or observational studies.

No, I'm not wrong, the paint thing is perfectly correct.

Whatever makes you feel better, buddy. Good for you.

You seem to misunderstand the difference between the hard and soft sciences. While the hard sciences (natural sciences - Physics, Chemistry, Biology, Astronomy, Geology, etc) generally can be repeated and predictable (such as your example of mixing paint - Chemistry - even then mixing paint can result spectrum of colour from a light yellow green to a dark blue green. Even mixing the same amounts of the same base colour may result in a slightly different shade of green ). The soft sciences ( social sciences - Psychology, Sociology, Political Science, etc...) are less predictable mainly due to the inability to accurately model what is happening - they have a simple model which describes some of what they think is happening but it may not be repeatable. The variables are too many, too complex and they frequently they do not understand how they interact. Then you add the temporal aspect - things in the social world change over time - attitudes / opinions etc - what was acceptable today may not be acceptable tomorrow - that adds a further variable to the mix.

Those with knowledge understand how much they don't know or another quote

"There are two types of forecasters; those who don't know and those who don't know they don't know"

J K Galbraith

https://www.economist.com/blogs/buttonwood/2012/01/economics-and-markets

EDIT - added Economist link

Those who have knowledge, don't predict. Those who predict, don't have knowledge.

Do you think, maybe, that something was lost in translation? I just don't think people would really take this advice seriously irl. He's probably talking about predictions concerning the metaphysical or something or warning about being too adamant about something too complex. We can still work out the rough odds and take a punt. The more accurate the odds are known to be the more likely one is to make money. Like the Bank's knowledge of BlackJack odds. I can generally predict that someone who plays BlackJack for too long will lose all his money however it is not certain but I would put money on it.

Also a colour blind person may see my paint mix as brown instead of green.

I guess Zachary has seen a few eclipses while working for the old Post & Telegraph repaiiring wires ! Ha!
Hilarious

So, NorhernLights you too believe scientists don't "predict" eclipses?
So, because I worked for P&T in 1978 for three months when I was eighteen it is somehow a stain on my character?
There really are some weird folk around these parts.

Hi CJ099,

You need to take into account that apartment sales have risen sharply in Auckland in recent months (relative to stand-alone house sales) - and the effect of this is to drive down the average selling price (for all residences).

This is no secret - with the data being robust and most commentators at pains to point it out.

I'm not sure why you choose to ignore this important factor. (You must surely know about it, as you visit here often enough.)

...and you seem to ignore my question of where are people going to get the money to buy these homes.

Hi BadRobot,

From the usual sources, including savings, sales of existing assets (e.g. property, shares), lending institutions, inheritances, syndicates, and increased labour earnings.

In fact, there are numerous sources: even lottery/gambling winnings (which, I'm told is not an insignificant source!)

You need to remember that houses are still selling - and will continue to sell.

But many of these are exceptions not the rule. As has been pointed out the main lending institutions are being very careful how much and to whom they lend. Most (but not all people) have to borrow to buy a house, generally from a bank. While houses continue to sell the more important question is at what price....

So, let's paint an overview then shall we....

Savings - declining, due to larger portion rent is relative to stagnant wages

Sales of existing assets - only helps movers, and that doesnt drive the price up, b/c buying and selling in same market

Lending institutions - are reining in credit, servicability tests limit debt size relative to income (which is at peaks)

Increased labour earnings - wages are pretty stagnant right now

That leaves waiting for someone to die, waiting to win big or waiting for someone else to enter a risky and complicated business arrangement with you.

FYI Houses aren't really selling - remember, lowest sales numbers for a July since like 2010!!!

Hi Mister B,

In fact, there are always people who have savings (and large amounts of discretionary income). There are those who are cashed up - including some wealthy immigrants.

There is the opportunity for many people to take a second job to supplement their labour earnings - as plenty have done in the past when saving for a house and will do in the future. (That's in addition to improving one's skills and, thus, potential earnings in one's primary job.)

Sale of an existing house one owns will pay for more than movers!

Plenty of lenders are still solvent - with funds to lend. (I was recently surprised how many lenders were happy to bankroll me - and I'm neither wealthy nor on a big income!)

And houses are selling. In fact, in some areas there's still a shortage and prices are holding - and in some cases actually increasing.

And, of course, there are those who do get inheritances, legacies etc.

Wow, way to miss all the points.

I am not saying there arent people with money. I am saying there are a heck of a lot less people with the kind of money and/or credit that drives up prices.

The irrefutable fact is that houses are massively less affordable than ever and this is starting to show on both inventory and sales.

Sale of an existing home and buying in the same market does generally not drive increase - unless one is trading down. Of course, it could drive up prices in the regions (as it has) when Aucklanders have been selling their overpriced hovels and getting better bang for their buck elsewhere.

I also wasnt referring to lenders being solvent. Of course they are solvent. Want to know how? By not lending to people at 10x their income. Lack of credit will affect house prices. Only someone ill informed would say otherwise.

Houses are not selling, as they were - hence the REINZ begging for restrictions to be lifted - sales as a percentage of stock must be at historic lows! Prices are not holding - they are decreasing. Don't just compare YoY, compare Year to Peak.

Quite right Mister B. And they won't be able to hide behind YOY figures for much longer. This is one reason why it takes two years to usually fully evaluate whether a property market is crashing. Because if it's been accelerating quickly and then declines, it's easy to make it look flat when you compair to higher percentage increase in the previous year.

Also it's easy to see why decade after decade it's just about impossible to stop a decline in property prices once they start, theres normally to many people simply tapped out and the market has to start fresh again with the only ones left being FHBers with very little money, so we end up with very few buyers with heaps of sellers so prices fall,

The answer is simple Badrobot - if you don't earn enough and you cannot save then you are NOT going to be able to buy the house that you want - ( try those in Te Kuiti) ... so you can drum as much as you like about affordability , income , etc .... it will not happen by sitting on your backside and crying wolf either ... lol

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Good grief you are a dreadful person, full of self righteous rubbish. "and it will not happen by sitting on your backside and crying wolf either" . Let them eat cake.

"if you don't earn enough and you cannot save then you are NOT going to be able to buy the house that you want" - so it is about affordability - most people only want somewhere to call home - not a palace. People comment that people should get off their backside - not everyone has the ability to up skill to get that higher paying job.(assuming those jobs exist). Even those who are well qualified - such as teachers are leaving Auckland because of the house prices.

I don't see any issue with 90% of the country upskilling so that they can earn a top 10% income. While we defy mathematics we might as well defy gravity at the same time.

I know that and I really feel sorry for them - some have been left behind whether it was their own short sightedness, complacency, or external forces - But my point was : It is what it is - we were feeling the same in 1997 - 1998 (basic jobs, with kids, and - no deposit) ... But got over it by learning how to do it and how the market works ... so disciplined saving and hardship payed off ...
were we lucky ?? as some here suggest that we were at the right time etc? ..NO Way ...
In the same 20 years we had many friends, who were at better paying jobs than us then, hardly own their own home Now and have to work way beyond retirement to pay that off ... we did that few years ago! - they have to live on Super after that - we dont. they complain that their kids are struggling to buy a house - I guess you get the picture.

Anyone can chose to put his head in the sand or defy gravity .. but ( sympathy and emotions aside) I think that there is too much demand , not enough supply, and a lot of money in the market at present to prevent any meaningful decline in house prices - some chose to disagree with this but that is my reading.

You were certainly fortunate to benefit from earlier supply of affordable housing fostered by governments throughout the 20th century. No point pretending it wasn't a factor in making houses more affordable in 1997 than now.

I don't think anyone has ever argued that people who worked and bought houses back then didn't work hard to do so. But the fact people had to work hard doesn't change at all the fact that houses were more affordable and the maths was different.

Yes you are right Eco Bird. You had timing and luck and cheap assets to buy on your side. Not so easy 20 years later. No wonder some of X and Y get so frustrated when people like yourself come on and skite about how well they have done, how hard they have worked and how clever they are and then put down those who have not done so well. What about those getting into the work force today in Auckland. Their parents are not in a position to help them with guarantees and the kids do not have the ability to get a well paid job. Do we just say you have to rent for life.

yeah, my fault mate !!... and I was thinking that my example could be of any use to Gen X,Y or Z ... silly me !! ..... Enjoy your Happiness and putting your mate UP ... !!

How would your example be of use to Gen Y or Z?
Did you have to buy a house at 10x median income?
Did you have to commit to a loan in excess of $800k?
Did your tax go up to subsidise super annuation for people with money and assets?

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Your example is of no use to anyone today EB as you bought when properties cost say 3 to 4 times income and now in Auckland they are 10 times income. When you and myself bought assets EB they were cheap and the cost of living was cheaper than today. You think you were clever. I believe you and I were lucky. I retired at 58. That does not necessarily make me any better off or happier than the guys and girls I left behind where I worked. Some of those who I left behind when I left work chose to travel a lot more than myself therefore they need to work a bit longer before they retire. But they have memories and experiences from their travelling which I do not have. Who has had the better life so far? I would venture to say they have. Just because you have more money than someone does not mean you are better than them and happier than them.

OMG, you completely miss the point ...Who said that I was better or happier ?? - what sort of nonsense is that ?? You seem to have jumped to the wrong conclusions ...

If anyone holds travel and spendings so sacred and close to their hearts then Go do it and don't worry about houses !! ... If they want to spend their money on leisure and Travel Then that is GREAT - have fun ... BUT do not blame the world for failing to wait for you until you are finished and Wake up !! .... If someone had his priorities distorted then that is NOT the fault of the Market !! Everyone decides what is best for themselves and what is more important for his life style !! ... so Enjoy

Gordon, I hope you have not been infected with the same viruses which Social Engineers have been spreading in our schools and society for many years :...Spend what you have, Socialize hard, you only live once so live a little, life is too short , travel see the world, Be Positive .. be happy and expect it all when you are done - she'll be alright ... !! The generation of want it ALL - NOW !! .... and if they Lose, it's someone else's fault or it's Bad luck, Bad timing, Bad Government, Must be the Boomers !! there will always be someone else to BLAME other than themselves.

This happened a couple of months ago: A young lady in her late 20s working her butt in a low wage job has saved 20,000 over the years ... she declared that she ( and her boyfriend) have decided to take all their leaves and travel to Europe for a month or so ... So, gave notice to landlord and put what they had in storage and off they went ... when asked if the 20K was going to be enough she said no but I have 10k on my Visa to use too - she was very happy to "spend" 30K on a month's trip and was last seen complaining about renting back a suitable place !! ...
Maybe it's me!, I probably have got my priorities twisted !!

Yes, I think we were clever mate, compared to our peers who were in the same boat at the same time and did not achieve as much - and some of us had to face 5 -7X income at the time - houses could look cheap compared with today but not for all of us at that time...and life was not cheaper at all - capital items are much cheaper now when you take inflation into account

So No mate , more money does NOT make us happier, good optimistic outlook on life and positive attitude Does ..getting your Ducks in a row DOES too. but more money makes us a bit more comfortable at old age and makes travelling then more enjoyable. I am sure you already knew that ...but you might disagree :)

enjoy your retirement buddy!

So...just ignore the fact that young people today are saving at a higher rate than previous generations, and concentrate on pretending they're all spendthrifts again?

At some points, facts need to enter the discussion and the realities of past and present need to be considered.

Yes it is you National Bird and you're certainly twisted!

Time to get you're priorities right. Don't you even think how hard it is for your fictional children that are finding it such a challenge to get on the housing ladder?
Or do you simply don't care.

Eco Bird, when you came on this site I warned you about the envious people, who will try their best to cut you down. Watch out they don't drag you down, don't get involved in arguments, there is nothing for you to gain. Don't lower yourself to their level and focus on your own life/business

Yavil, You're just a crony who has a vested interest in keeping property prices up since you claim to be an architect.

You know that your income is on line if house prices plummet. Too bad about that.

I would hate to think how many on here and it's easy to see who, who only had $100k to $200 deposit 10 years ago and the Chinese have made them rich, but those who threw no fault of theres because of timing, to young, not enough deposit etc etc, missed out but shouldn't be upset, but talking about a perfectly natural thing that's happened for decades like a correction or boom bust, is negative, you can really tell who's worried here but what about I wonder, I could guess

I didn't name you in my comment CJ. Looks like you feel you belong to the commentators I described, from your angry reply

Envious of what. Ive been to incubators for start-ups, you see people like Rod Drury, Victoria Ransom for Wildfire, Sam Morgan Trade Me, Claudia Batten, Bill Buckley, Jeremy Moon, list goes on.

These people have made millions, they are great kiwis that have done really well. There is no eny, if anything I want to be like them. They also have a lot of time for kiwis.

I just want to understand if prices are going down, or if they are up. At the moment it looks down, Im hoping if they ever do move upwards its in line with wage growth and the normal kiwis wage. Not to much to ask you would think.

I didn't name you at all in my comment, swapacrate. To answer your question "envious of what", envious of others who they believe, have more.

Thanks Yvil, yes I know and I have identified these people long time ago - I get engaged sometimes to correct the facts which could be of some benefit to "these" envious sods ...
However I shall stick to that golden Old wisdom of avoiding arguing with Fools ...
it is like the other old wisdom : "Never try to teach a pig to sing, it wastes your time and annoys the pig !!..."
Got better things in life to do - cheer

"O wad some Power the giftie gie us, to see oursels as ithers see us!"

National Bird you have no wisdom, you're just an RE and we all know that you are simply too dump to recognize that the Auckland property market is in decline.
And the rest of your cronies like Yivl have vested interest in supporting you as I've already pointed out.
I'm looking forward to highlight how wrong you are in future as the market will continue to decline.

Eco bird , putta sock in it mate, the normal I have ,so everyone should be positive rubbish, pull ya head in

For the same 20 year period. The first few years were finishing uni. Then another 7 years eliminating the 9-10% interest rate on my student loan. A couple of years later all of my savings into a business. I only managed to afford a house 3 years ago when the price increases were just starting to go crazy.

Anyone getting close to retirement age should consider what it would be like to be 40 years younger with a $50k student loan and a qualification that's taken 3-5 years after high school that only gives a chance of getting a job in the first place.

Advantaged by having a job when unemployment rates were really high. Advantaged by not necessarily needing a tertiary qualification, and even with a qualification free education with generous student allowance, etc.

A full time teacher and a full time police officer with 2 kids can borrow $750,000 to $950,000 depending on how well they present themselves, that buys you a decent spot in Mt Wellington.

You'd be joking. They'd be nuts.

Let's assume our hypothetical couple are both 5 years into their careers.

The teacher will earn something like $56 550 (Source: https://education.govt.nz/school/running-a-school/employing-and-managing...)
The cop will be on something like $69,000, (based on step 5 of band G, although the police pay scale is byzantine to say the least.(Source:https://www.google.co.nz/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&cad=rj...)

Giving them a combined household gross income of $125,500. After tax and kiwisaver that'd be something like $90,000 a year. Say $3,400 a fortnight in the hand.

Fortnightly payments on a 30-year $750,000 loan at 4.50% are $1,753 = 52% of take home pay
Ditto for a $950,000 loan are $2,221 = 65% of take home pay.

What an idiotic comment Laminar. How many flatties would they need to help pay the astronomical minimum payments, 5? 10? 15?

Badrobot ,Don't worry mate your day will be here soon and in Auckland especially, some on here think being johnny on the spot in 2005 buying a house for $500k and sitting on there ass to now and there house goes to over $2 million is there doing and they worked hard, anyone who holds a house NOW will loss thousands, NO ONE deserves these prices, these people couldn't buy there own home at these prices if they had there 2005 money so why should they show off, PS go on trademe houses for sale, put in some areas you like and under that punch In mortgagee sales , then save it, go to your bank and get a pre approved loan, mortgagee sales are normally auctions, check this once a week, there's a lot of investors on interest only and heavily invested, someone will buy theses houses why not you

And also naive. The issues about price and affordability is that Auckland house prices have completely disconnected from economically viable rents. At current prices, teachers police can't afford to buy in Auckland no matter the raft of manufacturing and retail jobs that sustain the economy.

It is a bubble - get over this nonsense about future price increases and accept it will either slowly deflate or pop

Rent to value ratios are filtered through interest rates. So its only a bubble if interest rate can ever 'normalise'.

So choose a no-growth/stagnation future to protect property investors, you reckon?

You understand that if no one can buy the houses, the houses will not go up in value? An illiquid market is not a good place to be stuck. It's only worth what someone can and will pay for it.

Funny I can't see the 'sharp rise' in apartment sales figures anywhere and certainly not in the auction results. Have you got any proof of that 'Tothepoint'? Please send us the evidence of your claim.

Hi CJ099,

Go read the reports of QV, Core Logic and REINZ.

All the mainstream analysts have dealt with the issue: it is well documented.

Pleading ignorance won't get you anywhere on this occasion.

Hi Tothepoint, ... You and I have agreed to follow that Old Wise Advice ... but it seems that we both failed to discipline ourselves and get carried away in breaking the Rule ... :)
I am guilty as your are ...!

Yes, better to have people think you're a fool than open your keyboard and confirm it.

Hello Eco Bird,

Yes, indeed, my good friend....... thanks for that timely reminder!

There's absolutely no point in either of us arguing with fools.

That would be fantastic ttp. I would rather look at comments that help people rather than those that put them down and call them failures.

I've searched and searched and can't find anything. Not even from Barfoot. Happy to take a link. I genuinely havent heard of their being a spike in apartment sales.

MisterB all I've seen so far is an uptick in apartment auctions, which are only a tiny fraction of the total sales. Maybe there is some data available.

I looked at this a couple of months back and concluded, based off the data, that apartments had contributed about 15 percent of the decline in prices month on month (eg if the decline in median was 100k then 15k of this would be due to more apartment sales). So, yes, relative increase in apartment sales had some impact but it was in no way significant to what is really going on.

@tothepoint: Yes I have been checking all those sources and they very clearly state that Auckland's property prices are GOING DOWN!

Feel free to post us the evidence that states otherwise. Oh I forget, you never do that do you, Because your have NO eveidence that indicates that prices are going up and you love to get FTB in to as much debt as possible. Don't you 'Totothepoint'!

He couldn't ever find a link

It is largely people coming to the realisation that they don't want to risk overpaying, especially when all the experts have been saying how overvalued it is. Real estate agents should really be lowering the sellers expectations, as that is who they are working for, if they want to increase the churn. But then again, that could be seen as not acting in the best interests of the seller. The whole real estate system in NZ really needs an overhaul, so buyers and sellers are treated the same.

It is really hard to lower a seller's expectation, I imagine listing "buying" still goes on where one agent comes up with a suggested value much higher than others, stitches sellers up in an exclusive contract or an auction then grinds them down as time ticks by and the property does not sell. It can take a couple of years to really bottom out as more and more people realise they having been holding out for high prices in a falling market, hoping tomorrow it will turn the other way. All this while most are still paying interest on the mortgage. Watched the exact thing happen in 87

This is an article that gets on my nerves ... not sure if Greg does this kind of presentation on purpose ( as always) or he is just picking and choosing random bits to make the whole thing look confusing ...
So jumping between Average and Median price, Entire NZ and wherever has dropped to portray that there is a huge issue !! Well there doesnt seem to be - it is a slow market that's all !!...and Crap & Old is selling at what it should be sold at ( crap price)
Auckland and Wellington are still up on last year ...Crch has been going a bit cheaper and maybe steadying out .... the whole things sounds like a disgusting Cold winter soup with all sorts of mixed "vegetables" -- no real taste to it really !!

So really to claim that CG has evaporated is very rich!!

Greg just likes to dish out a "catchy" titles with little substance to match!! -- Well done

It is Winter, it is Cold ,,and it is ELECTION year ...

Why don't they just supply all the stats? Surely a news provider should just present the facts? or is this just verbatim from the Harcourts press release, no journalistic integrity needed.

The "old and crap" point has substance, but it's precisely that segment that made prices shoot up (in Auckland 'investor' hot spots in the south anyway)

The issue is, a vast majority of Auckland housing stock also falls into the 'crap and old' segment. Unless 1960s bungalows with kitchens the size of a water closet are the new black.

,

Go lower going forward... way over valued catch a falling knife.

Gordon, absolutely no pain whatsoever!
Prices of houses selling in Chch is irrelevant to me, except that I will be able to buy more at very good yields.
We do not sell anything as we are what you call INVESTORS and not speculators.
Returns averaging 10 per cent approx at the moment so why would we be feeling pain?
Reality is that the average is well down due to the many as is where is property sales still going through and the LVR restrictions and difficulty of many to get additional funding!
The prices were also increasing so it is. Good that they have flattened out as this is when the established investors do very well.

Good luck The Boy. The reality is that whatever you buy in Christchurch today will be worth less tomorrow as prices and rents continue to drop. Your constant talk about bargains to be had does not make sense at all especially if people are borrowing funds to assist with purchases. If anything now is the time to sell in order to lock in profits but we all know that would be too hard to do in Christchurch currently and it is expensive to sell a house. You really have timed it badly. You should listen to advice from seasoned investors but of course you already know everything about investing wisely.

The Man 2

Good comment - best I've read in a while!

Refreshing to have you here - among all the pessimists/losers from the left.

The reduction of debate to "win / lose, left / right" is one of the regressive outcomes that the internet has had on society. Lord of the Flies in digital.

Sure, anyone with a counter view to you or a genuine concern on housing affordability is a leftist pessimistic loser.

Hi Mister B,

I suggest you take heed of the time-honoured wisdom: "When you're in a hole, don't keep digging".

I would think that's an attempt at trolling, not a refutation of the degradation of debate. Trolling is another unfortunate outcome of the internet.

I merely put your implication into words. That's no hole.

Read and vote for your own self interest. That's democracy at work.

http://www.interest.co.nz/news/87488/election-2017-party-policies-tax
http://www.interest.co.nz/news/87057/election-2017-party-policies-housin...

Thirty seven days to go. Vote for the few (record bank profits and speculator debt), or vote for the many (every kiwi disappointed by Govt handling of housing/speculation).

Odds for parties to provide the prime minister at the next election: National 1.30; Labour 3.25; Green 51.00; NZ First 67.00 Looks like the many are voting for the few (your description).

Harcourts chief executive Chris Kennedy said there could be no argument that the market had dropped back from the heights of 2015/2016.

"There are many reasons for an overall drop in sales," he said.

"Investment has fallen off due to the Inland Revenue Department's introduction of the bright line rule, the Reserve Bank's loan to value ratio restrictions, and foreign investors facing a more difficult task in transferring money out of their countries.

What an interesting world we live in, when a real estate agent is more honest on foreign buyers than politicians are. It's usually a close-run thing which is more dishonest...but it seems to have tipped over now.

RE figure heads have become the modern day town crier. Have been for quite some time.

Hi J.C.

I understand how you feel!

But, frankly, I don't think too many people waste time listening to real estate agents. All they are is salespeople - nothing more.

Personally, I regard them as generators of "white noise". It would be better if they stuck to their knitting of selling houses and, beyond that, kept their mouths shut.

However, the quality of statistics produced by the REINZ does seem to be improving. I don't ignore all of its output these days.

It's not how I feel; it's the reality. A substantial chunk of Fairfax's revenue is driven by the infatuation with house prices and the relative importance it has on the NZ economy. No different to Australia. And no different to other countries who have experienced house price bubbles.

Do you want to share your understanding of how REINZ statistics have improved? Any statistics starts with data sets. Has the quality of the data sets improved? In what way?

I understand there have been improvements with data collection/collation.

Hopefully, the published statistics are capturing all sales.

Certainly, the reports are better presented now - easier to make sense of.

So in other words, "you heard" but you have no idea "how" so you "hope." Fair enough. Life is full of information gaps.

My advice was from a well-informed statistician - so a reasonable source.

As I'm not a qualified statistician, that's the best I can offer.

But I do find the REINZ reports better presented (as a non-statistician) and I can now make more sense of them.

Agree - information gaps are everywhere.

That's absolute rot! You NEVER provide any statistics or even any evidence 'tothepoint'! We all know what you are.

Hi CJ099

Really?

Just recently, it was me who highlighted the statistical issue re the recent spike in sales volumes of apartments c/f stand-alone houses in Auckland - and the consequential impact on the (reduced) average price for all residential properties. (Plus, I quoted the actual figures.)

It was me that emphasised the importance of making this type of adjustment in a rigorous analysis - to avoid the spurious statements that a number of people here have been making.

CJ099 - you come across as someone who's a lot more full of himself than sure of himself.

And your angry/anxious manner raises a further red flag.......

No you haven't, you've never produced any statistical evidence what's so ever! You are just a liar and we all know it!

I dare you to provide some evidence that property prices are going up! Go on. We all know you can't. :)

You know I'll keep pressuring you on this and I'll never let go!

Let go CJ, for your own good

Are you threatening me Yvil. Can you clarify your comment? Because if you're trying to intimidate me it's not working.

I am a experienced statistician and toopointy's comments are read with many grains of salt.The analysis is usually flawed .Flags of many hues are raised when toopointy writes. I am not the only one to notice including the author of this article.

Never once met an intelligent Real Estate Agent. They were always the guys that dropped out of Grammar to go to the likes of Senior College and Selwyn. " The market always goes up, get in now" no financial or investment aptitude whatsoever

That's harsh

Yes I totally agree with you Tui12 Its blatantly obviously how a number of RE' s are constantly patrol this site desperately trying to convince people to buy and invest in a falling market.

They also can't stand it when we try to present a reasonable discussion with evidence of how and why there are prolonged changes in the market that show its decline. To them the market always has to go up otherwise their profits go down.

People don't understand the main part of supply and demand, if a city changes the demand and the value of that demand it has a massive result, overseas investors, look around the world, you take it away things will going back the way they were because the normal supply and demand hasn't changed, basically put housing in say 4 price brackets, $1 million, 1.5, 2 and 3, the people in these houses wouldn't have normally afforded them, the prices were pushed up from a outside force and greed and stupidity from banks, what happens next, in all these price brackets there will be miles more people try to sell over time with very few people buying and afford to buy, market goes down, YES there will be your doctors, police, teacher, and brain surgeons but no where near enough , it's also the gravy train affect, I sell my house for heaps, I buy 4 rentals, I sell for heaps and buy in Hamilton Tauranga etc, its all gone now, and can't possibly start again unless u bring back what started it in the first place, sorry guys it back to normal and sorry with pain

People still wanting to come to Auckland to live from other countries. Demand is high for that. They need houses. Demand will still be there. Look at immigration numbers. Facts not opinion. The RE cycle has it that prices will flatten or even go slightly negative over the next 3 yrs and then they will grow again. Government doesnt want stagnation so will push more money into the economy. Whereas before the Chch earthquakes did this through the insurance dollars flowing into the economy, this time they might have to increase borrowings or just create more money thereby devaluing the NZ dollar and driving prices upwards.

People ARE coming from other countries, the numbers are mind boggling, but they ARENT the ones with the money so they work and need loans the same as the locals here, they're FHB earning little money, why do you think there's 20 people in a house with 10 cars out front, they can't even afford the rent

M3 money was $85 billion in 1985 ...In 2017 it is over $300 billion..
We live in the world of ..... "monopoly Money "

Governments have tryed throwing money at people at the end of booms every say 10 years for decades, and still the market corrects over generally 3 to 7 years, in booms FHBers are forgotten about then in a bust they are God , the save ya , This time is specially worrying unlike other booms and bust because of the share scale of it and the new low interest rates idea, lifting interest rates slows a boom so people DONT go to far and helps a bust by dropping them, we haven't got that luxury, although I'm not for lifting interest rates because of the damage it does elsewhere, LVR AND DTI are a better idea but at the beginning of a boom, but greed puts a end to that idea