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Spring boost to housing listings “clearly showed”, realestate.co.nz says
October 1st, 2009The spring impact on the housing market “clearly showed” as the number of new listings on property website realestate.co.nz jumped 19% in September from August, CEO Alistair Helm said. Asking prices were also up 6% from August.
“As the economy slowly recovers from the impact of the recession, it appears sellers are more confident that buyers will be active in the market and willing to engage at a market rate for their property,” Helm said.
“While we always expect an increase in both the number of listings and the price expectations during the spring/summer period, this relatively large jump on both figures is a strong indicator of improved health in the property market,” he said.
“The anticipated seasonal lift in new listings coming onto the market as measured by the website occurred in September at a level ahead of expectations.”
Realestate.co.nz lists over 90% of all listings marketed by real estate agents. There were 12,674 new listings on the site during September, 6% above September last year.
“The year on year growth of 6% represents the first month since April 2008 when inventory coming onto the market has been ahead of the prior year – such has been the subdued state of the market,” Helm said.
“A large component in this rise in listings can be attributable to 3 main north island centers – Auckland, Northland and Bay of Plenty – these accounted for 55% of the overall increase of 2,030 in new listings in the month,” he said.
“Coincidentally they were also areas showing strong rises in asking price expectation. This data supports the view that the property marketing is most active in the major metropolitan areas whereas the provincial parts of the country are yet to witness this pick up.”
“Accompanying this increase of new listings has been a rise in the asking price expectations – up 6% on the month of August and up 5% on the prior 3 month average. This spike now takes the asking price expectation back to within 2% of the peak of the market in late 2007.”
The truncated mean asking price for homes, apartments and lifestyle properties added in September was NZ$419,851. The mean price for homes rose 4.5% from August to NZ$405,168 in September.
Inventory levels, measured by weeks of stock of unsold properties, also rose nationally in September to 33.7 weeks stock of unsold properties from 32.6 weeks in August. “The level of inventory though is down 40% from the peak of the market back in February of this year when the level reached 57 weeks,” Helm said.
Tags: Alistair Helm, Apartments, House listings, House prices, house sales, realestate.co.nz
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October 1st, 2009 at 1:03 pm
I don’t claim to have a crystal ball and thus be able to guarantee which way the housing market will go. BUT as an educated chap I can see the error in the logic of people to ONLY see ‘positive signs’ in the NZ housing market; or Spin doctors for short.
e.g. House prices have recently been holding up and rising slightly because of the lack of supply.
However now with an increase in supply houses will THUS rise……..
Talk about heads I win, tails you loose……..
All circular arguments are necessarily wrong.
October 1st, 2009 at 1:13 pm
Kevin,
You got the point. When supply is low = prices move up. We heard and read about it last few months. But, when supply is up now, how could prices still escalate? Is this taught in any economics courses? Maybe Alex could share your views with us?
Perhaps, somebody could write a thesis on this ie. increase in supply = increase in prices. Who knows he/she may get nominated for Nobel price award. Cheers.
October 1st, 2009 at 1:18 pm
I love the Heralds headline – Listings and prices up- that is the sellers have increased what they want, not what houses are selling for.
October 1st, 2009 at 1:24 pm
No, no, no ! You don’t understand Kevin and Grandy! It’s all about “pent up demand”; buyers competing against each other to spend a quarter of a million dollars, plus, of borrowed money, to….well to… get in/keep in the game.
October 1st, 2009 at 1:48 pm
RBNZ mortgage approval rates are down again this week – below 2007 and 2008. Today I got a follow-up call from an agent that I met at an open home some weeks ago- I can only assume the buyers are starting to dry up and he is reduced to following up old leads. Apart from a few real estate hot spots it looks like things are going a bit quiet out there in real estate land.
October 1st, 2009 at 1:59 pm
Watcher, it is very quiet at the moment. Open Home will be a ghost town versy soon.
October 1st, 2009 at 2:12 pm
Anyone got a spare 200 million?? …I want to be the largest FARMER in New Zealand and you will get unprecedented Capital Gains.
Or alternatively A spare Billion for an investment company. I have an urge to invest for you and have my eye on a South Island bargain.
The returns will be spectacular.
And I will only draw a 5 million package.
Please form a queue. I can be contacted at any dole office.
Investment is easy as long as you use other peoples money. Ask any BANK.
PS…anyone want to buy a million dollar house….
October 1st, 2009 at 2:23 pm
It is so amusing that each time some reports would claim that demand is higher and higher – attributing to low interest rate and increase net migration etc… It is just to common to read about such reports etc. but how would they quantify the demand side?
If one potential buyer were to visit 5 open homes, then there would be 5 records from the respective agents…. is that the kind of demand in perspective? Is there any concrete data to quantify the demand? Whereas, the supply side is quantify by the number of properties on sale; not for the demand side! Could anyone comment?
October 1st, 2009 at 3:05 pm
Sure win investment
Inelastic demand.
October 1st, 2009 at 3:16 pm
Isn’t inelastic demand when, no matter what the price asked, product volume demanded (sales) does not change? Too long away from 6th form economics, I guess !
October 1st, 2009 at 3:18 pm
What is all this mumbo-jumbo about “asking price expectations – up 6%” Anything is only worth what someone (the buyer) is prepared to pay for it so where is the talk about “buyer price expectations”. It looks like the RE brigade is making up new terms now. This is all just getting too bizarre for words.
October 1st, 2009 at 3:46 pm
Quick .. buy now while prices are still cheap !!!
Sorry, couldn’t help myself… ROFL
October 1st, 2009 at 4:00 pm
@ Kevin & Grandy, you need to read the article. Sam mentions it. They say “asking price expectations – up 6%”. This has nothing to do with supply and demand, nor does it reflect on the price of houses in any way either. It simply means that spring is here, so sellers think they can get a better price for their house. IF the demand is not there to support it, they will have to negotiate lower prices or hold onto the house.
Usually spring sees a rise in activity in the housing market as more sellers and buyers look at… well… selling and buying. What the article IS showing is that the usual spring boost in activity is starting. We will have to wait for another month or two before we see its effect.
Anyone else remember BH blabbering on, in a special housing report video, about how there was no sign of the spring boost. This was about a month ago, and at the time I mentioned that he was too early to be analyzing spring data (at the start of spring). ROFL he does like his graphs though.
October 1st, 2009 at 4:08 pm
Osty – surely by ‘activity’ you mean sales actually going through? I certainly wouldnt define activity as a simple increase in listings – example – most of 2008: listings climbed sharply, but actual sales fell significantly compared to previous years. You wouldn’t define 2008 as an ‘active’ year for the housing market would you?
The data on whether actual sales have climbed in response to the greater number of listings is not yet in. There may be an increase in sales to match the increase in listings or there may not………..
Indeed as others have pointed out, the jump in listings may actually mean that buyers are not there at these prices. We will have to wait and see………
As watcher has pointed out – so far there has been no increase in mortagages issued by the banks (in fact the reverse)
October 1st, 2009 at 4:16 pm
Wow, sellers asking for 6% higher? Buyers, could bid higher, then sell for another 6% more…. it still hasn’t reached 24%… so seems more upside to go…..isn’t that good investment call? Can’t stop thinking that potential buyers are all getting so rich and appears to have more than 6% pay rise!
October 1st, 2009 at 4:20 pm
andy – True, and this just reinforces the fact that an article like this has no meaning, and is just RE agent hype…
I’m sure usually sales going through activity will follow listing activity, but as you mention this may not actually happen if the demand is not there. Time will tell.
October 1st, 2009 at 4:49 pm
“True, and this just reinforces the fact that an article like this has no meaning, and is just RE agent”
The research has meaning; it’s simply how you interpret the data. In that respect, Alistair Helm is relatively objective, and I personally find him insightful. However, he’s still running a business and his clients are in the business of selling property, so you can hardly expect him to bite the hand that feeds him with unsubstantiated projections about a “difficult” spring season looming ahead.
October 1st, 2009 at 4:52 pm
Increase in SUPPLY = increase in PRICES.
Interesting scenario, interesting sellers.
Go for a Nobel award. Can’t help scratching my head!
October 1st, 2009 at 5:03 pm
@ Grandy, you still seem to be missing the point mate. Demand and ASKING prices have both risen due to other influences. Economics is not just about supply and demand. In this case, there are seasonal influences causing people to ask more (i.e. spring time). And on top of that, nothing is suggesting that there is a rise in actual sale prices. Read the article and comments again if you are still confused. LOL
October 1st, 2009 at 5:09 pm
@ Grandy, or maybe you just have nits? LOL jks.
October 1st, 2009 at 5:09 pm
If I were to buy, then knowing the seasonal influences ie. Spring time is causing people to ask more, then I would rather not buy and just wait.
October 1st, 2009 at 5:22 pm
Funny that no one seems to talk about the 35-40% price fall anymore??
Anyone wants to jump out and make that call again? What are they/we trying to prove on here all day long really…?
A lot of the buyers are actually not New Zealanders, and those buyers won’t need whatever % pay rise, they are buying and will keep buying simply because they can. Those who can afford to buy will buy regardless of when, and those who can’t afford to buy will/can never buy or think of buying even when the time is good.
Houses are still very cheap in this country compare with others, fantastic value for money (land, view, lifestyle…foreigners loves here), kiwis have been living in their own small world with their don’t care attitude and don’t relise what’s going on.
And for those who are talking all the doom and gloom, numbers, theories just to try to pull people off buying homes/assets (but have been secretly buying themselves) should really stop.
Just keep waiting like one of my workmate does, he’s been waiting since 2002 and have just heard him nagging yesterday over the RE pages in the paper about the vendors are still asking too much for their houses….
October 1st, 2009 at 5:50 pm
“A lot of the buyers are actually not New Zealanders, and those buyers won’t need whatever % pay rise, they are buying and will keep buying simply because they can.”
You have to love these fantastical observations which always seem to taper with the reasoning “just because” (this one only being slightly more rigorous in its rationale and mythology).
October 1st, 2009 at 6:03 pm
I got a phone call today from a RE agent (they phone me on nearly a daily basis now – why do they need to do that if there are so many buyers out there?) asking if I’d found a house to buy yet. I said no, I hadn’t found anything suitable but I was still looking here and there and she commented that a lot of her potential buyers are saying the same thing. Again, you have to ask why that is. Could it be because the prices that vendors are asking are not realistic? The vendor hears that the property market has recovered so they list their homes, then the RE agent tells them that there are SOOOOO many buyers out there and set the price at ridiculous levels…..guess what – the house doesn’t sell. Some months later I’m getting RE agents that I haven’t seen in months ringing me up to tell me that “XYZ house I looked at is still for sale and that the vendors have found another property they wish to buy and are now more flexible on price”………..tough! I ain’t interested in their overpriced piece of crap. I have a big enough problem outlaying half a million dollars for an average house in an average suburb in Wellington, and I’m sure as hell not going to give it to some greedy home owner and RE agent that didn’t want to know me some months earlier.
October 1st, 2009 at 6:04 pm
Small Kev, house prices will never go down.. they only go up… immigration, shortages, sellers market, unemployment .. all make it so.
Tell your mate to buy now before its too late. Don’t listen to the doom and gloom, just pick out a house and buy it already !! In 25 years when the mortgage is paid off he’ll be a millionaire, he won’t have to lift a finger he’ll be so rich. Better yet buy a boat and a flash car and put it on the house while he’s at it..
She’ll be right mate…
October 1st, 2009 at 6:14 pm
Thank goodness for a housing story! I was begining to go crazy with madcow disease!
October 1st, 2009 at 6:20 pm
“And for those who are talking all the doom and gloom, numbers, theories just to try to pull people off buying homes/assets (but have been secretly buying themselves) should really stop.”
LOL!!! Im reading this in my “Paranoid Californian Hippy” voice.
October 1st, 2009 at 6:22 pm
veedub – I admire your perserverance in not giving up, but if I was you I’d move onto other things…:)
My time on this website is about 10% of what it was cos I just don’t really care anymore! All the RE speil just passes me by, I just think to myself “whatever” and crack open another beer
All I know is that the people at my office who talk up property are idiots and thats enough to convince me I am right not to touch it with a bargepole
October 1st, 2009 at 6:23 pm
Perhaps, got to buy buy buy now, otherwise may miss out …..? buy those with good seaviews etc. and wait for the prices to shoot up, then sell for big gains, otherwise may miss out? really really missed out?
Forget to mention that Tsunami could sweep away boats, cars and houses alike….
So, investments that could be seen and feel is still solid investments?
October 1st, 2009 at 6:28 pm
@small Kev
Most New Zealand houses are crap and overpriced by international comparison. I’ve had many friends laugh derisively when confronted with the reality of our housing stock.
You really ought to get out more.
October 1st, 2009 at 6:44 pm
The good old attitude, but sadly that can’t change a thing.
A pet is seeing itself as a human because it eats and lives with its owner, the owner provides food and a place for it to eat and to sleep, it eats whatever the owner feeds, but what it doesn’t know is that it has totally no control of anything. This contry has been like that for nearly two decades, its too late to even wake up to deal with it.
Face the fact, this country dosen’t even own itself…lets stop struggling no more.
oh…and people don’t always buy houses to make money. Because they like the house, the location, they like to built, their dream…..all kinds of reasons to buy a property, not just to buy and expect them to go up in price and make money, although many people do that.
October 1st, 2009 at 6:47 pm
aaaargh….i’m getting sicker by the day as i lie here bed-stricken with the dreaded FOMO disease…i must have a house..any house will do…debt?…whats’ that?…..aaaargh, the interest -free plasma TV from Hardly Normal ’s has just fallen on me to compound my FOMO.
actually, i don’t give a stuff about the current housing market as i know when the real global market cures my FOMO there’ll still be heaps of tragic, over-committed vendors clamouring for my cash…..ooow, but i love what this FOMO does to me in the middle of the night!
rock on elves!
October 1st, 2009 at 6:49 pm
the other Russell – absolutely! The quality of our housing stock is crap and houses are NOT cheap here compared to other countries. A few poms at work who arrived in the last 12 months, they are renting, they are quite shocked at the cost of housing here especially given its poor quality. It might have been a good deal here 5 years ago for poms but not any longer! Especially with the dollar at 45p!!!!
don’t believe the hype (unless you are stupid and gullible), house prices are going nowhere fast in the next few years!
time to crack open another beer
October 1st, 2009 at 6:54 pm
Ahhhh, cheers Matt! That Sauv Blanc tastes even better when my housing outgoings are only $390 a week……..here’s to us with nerves of steel
October 1st, 2009 at 6:55 pm
How do they decide house asking prices have increased when bugger all homes on the property websites actually have an asking price – they all seem to be PBN or Tender or Auction. I find it infuriating.
October 1st, 2009 at 6:55 pm
Veedub, if its any consolation I have been renting for just on a year now and I’m seriously enjoying the feeling of being debt free!! We rent a great house (when I say great, it does leak a bit but I don’t care, its not mine) close to the beach on Auckland’s North Shore, rent is dirt cheap from some poor mug leveraged up to the eyeballs in debt, negatively geared, secured over their family home, and probably praying to god that the bloody thing will go up in price, they both keep their jobs so they don’t loose everything. Meanwhile I’m about as chilled out and carefree as they come..
Some time again in the future we’ll buy .. but seriously I can’t see any hurry. I wanted to make sure that I didn’t fall behind financially while I was renting, so I did some research and found some great investments that well outpace housing.
Bottom line is that there are a lot of options out there. Don’t give up just start thinking outside the square. You might be surprised at the results.
October 1st, 2009 at 6:56 pm
Veedub – just forget about buying and enjoy life!
still waiting for your book “The Joys of Renting”
October 1st, 2009 at 7:26 pm
Matt S Since you don’t care so much about buying a house why not spend more money renting a higher standard house? PAYING MONEY to live in a house that leaks sounds just as sad. And a house that leaks isn’t a “great” house at all in my book. The landard is probably thinking the poor mug is trying so hard to save money for a house and is happy to pay to live in my dirt cheap leaky rental? Guess theres alway a balance?
A great house but it leaks. Or did you just make that up to suit your story?
We don’t want another property boom tomorrow, but people need to take action which suits them. Not to follow what everyone else are saying.
October 1st, 2009 at 7:30 pm
*
October 1st, 2009 at 7:34 pm
Shonky houses are MADE for on-selling.
It is the NZ way.
Invest in PROPERTY…Have I got a deal for you.
My Father-in-law was a builder. Until the 87 crash. Built one off homes for retiring farmers, until they couldn’t pay…
Then he retired. …early.
He deplored these shonky MCMANSION houses, said it would all end in tears when they started building for SIZE, but not quality, with even SHONKIER materials.
Guess what LEAKY homes and Apartments etc….are made of….and when they were built.
Ask a BLUE CHIP investor or any COUNCIL… They can tell you…
If you can sell em to an overseas investor even better…..except some of them are even poorer now, cos they overdosed on crap back home.
And now the US$ and Pound are tanking…even with STIMULUS.
Still the Farmers are OK…..
And the IMMIGRANTS will pay…….well maybe not…with those devalued currencies….
or maybe the SPANISH should be approached
The North & South Island are awash with BARGAINS. Only a million apiece…for tat.
Have I got a deal for you…ONLY 5….maybe 6 %…
Sound familiar.
Ah Glory Days……Eh… Brucie.
October 1st, 2009 at 7:43 pm
The other Russell
If they have the money they don’t have to buy crap houses (looking at rich people New Zealanders or not), there are many good quality new houses built in good and new areas, holiday houses…etc.
Thing is those who can’t afford to buy those nice houses gets pushed down to the lower end and pay big money to rent crapy houses if you know what i m saying. People in this country are used to this, thats the way it goes, you either go up or you go down.
Crapy house can be rebuilt, but no one can build another New Zealand.
October 1st, 2009 at 7:43 pm
prices will now likely crab sideways with the now increasing supply of housing stock. the rises in prices the market has recently experienced will remain in place, that is until supply shortens again, and then, it will be very clear that property prices are going up and fast, as rents will be going up faster than you can say ‘ didn’t you see that coming’?
rents have to date been somewhat static over the last few years as all the accidental landlords increased rental stock, but those houses will sell off over the next wee while and it will become scary to rent again and it really will feel like you are paying off someone else’s mortgage for those that haven’t used this cheap rent time to build up their nest egg for future use.
therefore save every penny as you will need it either way…[rent or purchase]
October 1st, 2009 at 7:49 pm
It is not rocket science – the price of houses CANNOT keep increasing – unemployment is rising, credit is getting more expensive, the weekly grocery bill is increasing, no pay rises in sight….. – the freefall is imminent – immigration is not going to save us – BE PATIENT – .
October 1st, 2009 at 7:50 pm
Kev, if your mate is still keen to buy, he could buy this one.. its about $750k probably more.. totally worth every cent, will double in price in a few years.. tell him he better get in quick before all those immigrants push up the price, there’s virtually nothing else on the market to choose from. Big housing shortage !!!
Tell him we’d be happy to stay on as tenants and contribute just a fraction of his mortgage.. with 20% down he’d only need to borrow $600k. Interest rates are so low you almost don’t even need to worry about the repayments with a LAQC and all. Interest rates will never go up either… Did I say leak, I meant small damp area in downstairs corner study.. totally dry in summer though, no worries mate.
PoP didn’t see you there.. your right though they are going up FAST.. Like 6% fast .. wow that REALLY is fast.!!
October 1st, 2009 at 7:55 pm
Cath – exactly. Add to that list minimal or non-existent bonuses (which I know many people depended on in the boom years to keep up with their debts). Despite what the schemesters at the banks say, we are far from a booming recovery, things are going to be slow for a couple more years yet
Unfortunately so many have been brainwashed into this unsustainable high debt-ever expanding growth-boom times for ever mentality that they can’t see the woods for trees. They really can’t see that there has been a paradigm shift
I see it in so many company directors it is not funny
October 1st, 2009 at 7:56 pm
Hey MATT… I saw him first…
Kev, ask if they want to come to an OPEN HOME.
We have a rainbow feature in the lounge. and the bedrooms are all able to be let out ….even have their own showers….on rainy days.
I really must get a life…
Bye for now…
October 1st, 2009 at 7:58 pm
@ Small Kev
What’s your point?
October 1st, 2009 at 8:09 pm
Matt – “good things come to those who wait”. This madness will not last. NZ is becoming an increasingly expensive place to live. The banks are desparately trying to hold the RE market up otherwise their balance sheets will be destroyed – go to any mall at the moment and they are actively soliciting you for your business (be it debt or credit). If you want a decent standard of living in a nice area then renting is by far the better option – do not let yourself become a pawn in the game.
October 1st, 2009 at 8:25 pm
Matt S
If anyone was to buy the deal you metioned for investment purpose, he/she must do the numbers and calculations, not just as simple as 20% down. Because the number will not easily stack up with 20% down in todays enviroment for a deal like that, and sounds very risky, if you know what i m talking about or even know what your are talking about.
If a person really likes the property and has got the money to pay cash for it (and believe me alot of people can) what can anyone do about it?
Like i say, not everyone buy houses for money making reason. Different deals suit different people. Spent what you can afford but if you can’t then don’t make excuses and all the denial and blames just because you are angry with others and yourself.
Bring back the 20+% interest rate thats no worries bro, so everyone can just sit at home and live off their bank deposit, no one needs to work, entire country going down, dont think the goverment wants that again…
October 1st, 2009 at 8:31 pm
Right there with you Cath – your last sentence rings oh so true to me. If asking prices around me are anything to go by, the house I rent would go on the market for about $500,000 (whether they’d get that or not I don’t know but all I can go by is asking prices) – I pay $390 p/w – BARGAIN! Meantime, saving really hard and have starting having little punts here and there with shares and Forex. It’s rather fun too! And still those RE agents hound me – if there’s no answer at home they leave a message and then try my cell phone, asking me to reconsider my flat “no” to a property I viewed two months ago. Suckers……..greedy suckers at that.
October 1st, 2009 at 8:36 pm
Spidy sense
Point is people should not scare other people off buying houses, and shouldn’t push people into buying houses by telling them price is going to go up in the next minute.
And people need to act on what they can and should, and to be aware of whats really happening around, apart from just numbers, theories, unemployment…we’ve been fooled by these numbers over and over again.
October 1st, 2009 at 8:44 pm
Small Kev – people need to go to ANY foodbank around the country to get a feel for what is really happening – not the usual clientele in need.- shelves are empty…….. live within your means and prepare for increased interest rate rises – those mortgage holidays (joke – the only one who wins is the bank) wont last for ever.
October 1st, 2009 at 8:48 pm
I may sound smug, but my company directors and directors of companies that are clients etc. were saying late last year that the economy would get going again by March this year – I said no way, I can’t see it improving until late this year, and then it would only be slow improvements
you could say those guys late last year were optimistic – me, I would just call them deluded
the problem is, so many of these 50-something baby boomer fat cats are on so cushy deals, and are so used to the idea of a growing economy, that they just can’t contemplate the possiblity that we have entered an era of sub-optimal growth.
My pick – average growth over the next 3 years of around 1.5%
October 1st, 2009 at 8:49 pm
I agree Small Kev, but there’s WAAAAY too much FOMO out there and people tend to make irrational decisions (to varying degrees) when either greed or fear enter into the equation. It doesn’t help matters if said person is gullible and believes everything they read and hear in the media. Banks, RE agents etc stand to gain a lot out of hyping up the FOMO factor, BH on the other hand doesn’t stand to gain much at all by expressing his opposing opinion. It’s kinda common sense really.
October 1st, 2009 at 8:58 pm
@ Veedub
I sure wouldn’t want to waste my time and energy taxiing you around the country looking at houses whilst you made up your mind about anything – and there are RE out there that want to??? i thought all the useless agents would have gone to the wall by now with only the elite remaining – looks like there are still time wasters happy to drive around time wasters… looks like their mobile phone bill will be full of wasted conversations rather than the simple “are you really going to be buying a house today and are you mentally and financially prepared to do such a thing if we see it?”
Goodness gracious, you are a renter, tell the agents what you tell us all here and they will certainly stop pestering you.
October 1st, 2009 at 9:07 pm
I have told them POP – I’ve told them what my top dollar is and what I want but they insist on telling me about houses that are priced above that.
And they don’t taxi me anywhere, I do it myself!
Other scenario is I see a house listed with no asking price, price by negotiation but with the RV/CV mentioned. So if the RV/CV is slightly more than my top dollar, but the house looks OK otherwise I might go along to the Open Home to have a look and then if I still think the house is OK I’ll ask what sort of money the vendor is expecting and the RE agent ALWAYS says “xyz over the RV/CV” at which point I say “too rich for me” and leave. Then the phone calls start a couple of months later…..”oh, the vendor has found another property they want to buy, they’re more flexible now”….that kind of thing. What have I done so wrong? Pardon me if I don’t want to dole out half a million bucks at the drop of a hat!
October 1st, 2009 at 9:10 pm
Veedub – I think POP has a point – just tell them to bugger off, and stop looking at houses for sale! You seem fairly convinced that you are happy renting after all, aren’t you?
And who knows, maybe one day this government will lay off a thousand or bureaucrats (as they need to) down there in the capital then there will be plenty of bargains
I have to say too, that seeing those so unfortunate pictures of devastation in Samoa reinforced to me how silly it is paying such big money for an ultimately perishable piece of sticks
October 1st, 2009 at 9:10 pm
BTW, for those who still believe that rent is holding and will move up – then I thought you might have missed out on a recent report indicating that rent is actually dropping and not holding or moving up. Did anybody remember about a recent report (maybe 1-2 Sundays ago) that showed rent has actually dropped. So is renting better for now?
October 1st, 2009 at 9:14 pm
October 1st, 2009 at 9:15 pm
I just wanted to respond to the question raised by the Bank Manager in relation to how we could provide an asking price expectation when “bugger all homes on the property websites actually have an asking price”?
The fact is that around 60% of all listings coming onto the website of realestate.co.nz have a fixed price which is displayed on the listing. The majority of these are actually outside of the main cities where “no-price” marketing is more prevalent. Despite that all listings coming onto the website (12,674 in September) are required to provide a hidden price range which allows us to deliver search results on the website.
So for the 40% of the listings without a definitive price we use a mid point average. If however the range exceeds a “realistic” range parameter we reject the listing from the analysis.
To this filtered data set (we rejected 283 listings for this reason in Sep to come up with a total sample of 12,391) we undertake a 10% truncated mean calculation to arrive at the asking price for the month.
Alistair Helm
CEO Realestate.co.nz
October 1st, 2009 at 9:20 pm
I hear you Matt. I am pretty happy renting. I guess it’s just that by going out and looking occasionally it helps build a picture of what is actually happening out there (because I don’t believe everything I hear/read). We take a break from looking for weeks at a time, and I don’t return the RE agents calls when they ring and leave messages. So I’m not actively encouraging them. But yes, maybe it is time that I said “I’ve lost interest” or words to that effect and stop going to Open Homes.
How about you Matt – have you given up?
October 1st, 2009 at 9:24 pm
I don’t really like to use the word “given up” because it assumes I’m losing out on something (OK yes I am losing out on the honour of owning an overpriced piece of garbage in a less than average area with a massive debt) but yes, I guess so. At least for the mean time.
I DO hope to build one day, because I know I can design and build something good
for a similar price to an existing crappy house. Once my inheritance comes along in the next year or so then that might become a reality
October 1st, 2009 at 9:26 pm
Who’s gonna tell the bulls that the buyers from offshore aren’t coming to snap up their growing inventory at higher asking prices.
When the great post 9/11 surge started GB pounds were buying around $3.40, Kiwi was a bargain. The last 10 years the average rate has been $2.90, we are now a smidge over $2.20!
Seriously, who thinks we’re a bargain now?
October 1st, 2009 at 9:30 pm
Expat, you got a point. NZD is not likely to fall significantly in the near term. No authority is going to intervene, but would likely let the exporters take its own path to manage their currency sensitive business operations. Hence, there’s less and less comparative advantage when currencies/exchange rates are involved.
October 1st, 2009 at 9:44 pm
Don’t want to be a bore about this, but it is significant.
In GB Pounds NZ house prices have gone from £49,400 in Aug ‘01 to £157,000 last month.
The August average house price from England and Wales was £156,000, yep cheaper than ours… and they have cheaper mortgages and higher incomes.
October 1st, 2009 at 9:45 pm
How long till we see failure of the reclads in NZ?
http://www.scoop.co.nz/stories/AK0705/S00244.htm
October 1st, 2009 at 10:01 pm
supply up 19% in September from August but asking prices up 6% from August….
That’ll work.
October 1st, 2009 at 10:04 pm
So you couldn’t afford a capital E ‘expat’?
October 1st, 2009 at 10:06 pm
Expat, thats because the pound went down 10% against the NZD isn’t it?
October 1st, 2009 at 10:08 pm
Expat,
My house value declined so the bank manager wouldn’t extend the OD to upgrade the ‘e’
October 1st, 2009 at 10:13 pm
Wow, I’d never noticed that were two of you!
October 1st, 2009 at 10:23 pm
He stole me.
October 1st, 2009 at 10:32 pm
Another trend worth watching will be a significant decline in student rentals in the 2010 year. Government is seriously tightening up on tertiary funding with respect to enrolments – meaning no more over-enrolments as the students simply will not be funded.
And there are likely to be further funding cuts for institutions with poor qualification completion rates.
The big screws are going on in the tertiary education sector – so if you own student-type rental accommodation it would be advisable to re-think holding onto those properties now. Don’t wait til next year and get caught wondering where all the students are! My guess is that first-year enrolments are likely to suffer the greatest decline, as the institutions can’t turf out their 2nd and 3rd year over-enrolments.
October 1st, 2009 at 10:48 pm
An Irish poster got me looking again at Ireland’s property market. He thought we looked just like Ireland 18 months ago. I know there are differences but there are also a lot of similarities, and most of the differences favour Ireland, like higher incomes and being part of the EEC. I still for the life of me can’t understand why Australia and NZ continue to defy gravity, except for the desperate need of the banks to keep the whole bubble going so they don’t implode like the Irish banks are currently doing. What I also don’t understand is why in a global financial system with incestuous bank ownership, the Aussie banks have been able to keep lending so freely.
http://money.ninemsn.com.au/article.aspx?id=864209
http://www.irisheconomy.ie/Crisis/KellyCrisis.pdf
http://www.timesonline.co.uk/tol/system/topicRoot/Irish_property_price_guide_2009/
October 2nd, 2009 at 5:24 am
I remember the pyramid schemes of the 80’s – terrible things – lots of losers – the last ones to jump in lost the most. If you do not have willing/able participants continually ‘jumping in’ then the whole thing topples. Fast forward to 2010……. hmmmmm…….. the cost of living is increasing, wages are static – if not decreasing in some sectors, people are fed up with being overstretched and having no decent standard of living, the immigrants are no longer tripling their money on entry. The ‘willing/able’ to participate just might not happen.
October 2nd, 2009 at 8:32 am
An very successful, prominent person in NZ (yes, he’s still rich) told me once “It’s never the right time to buy or sell a house”. So if you find a right house that fits your need and budget – go for it…
October 2nd, 2009 at 9:44 am
“Ginger” – that is such a cliche it is not funny!!!!! Its true to an extent, but also much abused…..
October 2nd, 2009 at 10:06 am
Agree with Ginger completely. Prices to crab as per POP, but for 10 years +.
On the rent v buying, I have reasonable income, good deposit, live in Nelson. Could buy an absolute shiteheap, paying $500 a week interest.
Currently rent a mansion with 240 degree views overlooking Tasman Bay, it has to be seen to be believed.
$480 all up, no rates, no home insurance, no building costs etc.
No brainer for me.
If you want to know how prices in NZ compare to the world, jump on ebay. I can buy a horse ranch in Montana, but can’t afford a house in South Auckland.
October 2nd, 2009 at 10:13 am
An investment in a house must be weighed like any other investment. Any fool can buy under certain conditions……………….and many have.
As we in NZ have no control over our budgets these days, being at the mercy of the rest of the WORLD, crooks & Polies driving it into oblivion..(No different in my view)…, banks floundering trying to keep it all afloat, etc, I would certainly think twice.
Paying an over inflated price with a view to a Capital Gain may be a little fraught in the short term.
A little due diligence and a crystal ball may save you heartache in the long term.
No free lunches….any more.
Unless you are a POLIE…or a CROOK or a BANKER.
October 2nd, 2009 at 1:49 pm
Our incentive to “invest’ in a home was to get to a point where our cost to own were less then our costs to rent. At the moment our costs are around $200 per week (interest plus rates) for a 3 bed 2 bath 700m2 property. Sure there are some opportunity costs, but the security owning our own home gives us is worth it.
October 2nd, 2009 at 2:18 pm
“Our incentive to “invest’ in a home was to get to a point where our cost to own were less then our costs to rent. At the moment our costs are around $200 per week (interest plus rates) for a 3 bed 2 bath 700m2 property. Sure there are some opportunity costs, but the security owning our own home gives us is worth it.”
And the principal is not a “cost”? One would think that should be the core consideration, but I guess I live in a separate universe.
Anyway, the idea of rent being more expensive than the repayments on a home is not really that outrageous. In any normal business, the cost of your capital and value add should be less than your income. The value of your business and any “capital gain” is reflected in the business’ ability to generate a profit.
The property circus is largely to blame for its own stupidity. Property ownership (particularly residential property) is not really a business or even about a “roof over your head.” It’s more about collectivism and central planning that aims to distort and manipulate the market to con people into believing they are wealthier. Just don’t kid yourself that it’s an expression of capitalism and business smarts.