Post RSS Feed 
Podcast Feed
House asking prices fall 1.7% in December after 3 months of increases
January 1st, 2010Asking prices for property fell 1.7% on realestate.co.nz in December from November after three months of steady increases.
The full release from unconditional.co.nz is published below.
Property asking prices dipped in December ending a steady increase over the preceding three months. The figures were released today in the NZ Property Report, a monthly report of market activity compiled by Realestate.co.nz, the country’s most comprehensive property listing website. The latest issue, covering December, is published on www.unconditional.co.nz, the news and information website for New Zealand real estate.
Nationally the average asking price fell by 1.7% from $419,586 in November to $412,319 in December. However both Auckland and Christchurch experienced slightly larger falls of 2.4% and 2.5% respectively.
Alistair Helm, CEO of Realestate.co.nz says, “The December figures show a sense of caution in the market; limited supply has not seen an increase in asking price, vendors continue to be realistic, while buyers are doing their research before making offers.”
In addition, 2009 closed with a total of 135,416 new property listings having made it on to the market over the last 12 months, which is a fall of 17% from 2008 (163,488 new listings), and an even greater fall of 24% from 2007 (177,529 new listings).
“The fact that there have been two successive falls in the annual totals for new listings since that time would indicate that, as yet, there can be no claim that the market has made a full recovery. Any intimation of such should be treated with caution,” says Mr Helm.
Tags: House prices, Property Prices, REINZ
You may also like to read:
Loading ...
January 1st, 2010 at 11:09 pm
Everyones interest must be in canvas housing at the mo, not real estate or looking at the web.
Have a great New Years
January 1st, 2010 at 11:24 pm
If Wellington listings are anything to go by, houses are not exactly flying off the shelves at the minute, and there are a lot more to choose from since the beginning of December. Clearly this is the much-anticipated Summer listings boom; but, with the reality of rent vs home loan – ie that for a roughly like-for-like property, you pay double the $$$ for a home loan just as we hit the curve and watch the rates going through the roof in 2010, are the buyers that are essential to underpin this latest boom really out there???
Here’s to a wunnerful 2010 everybody.
January 1st, 2010 at 11:25 pm
The beginning of the 30% fall in prices? At least with next years interest rate rises, and potential changes in property tax, it should help bring prices down.
January 2nd, 2010 at 6:16 am
I’ve never seen “asking price” reported here before. It does makes sense for DEC if listings are lower and vendors want to close out the deal before Xmas/new years that they will drop the asking price. I know of one couple who got their dream house in the lead up to Xmas at a reduced rate 10% below CV as the vendors had to be in another town by early JAN to start work.
I’m more interested in the actual sales prices via REINZ (startified house index) or via QVs data
Martin Hawes in the Herald on the weekend (someone I respect as a commentator) did predict a flatter or lower 2010 in the property market…..sorry couldn’t find the link
January 2nd, 2010 at 7:47 am
No no no…there is no problem…Treasury research shows the Elephant of debt squashing Kiwi families is really a featherweight and not a problem…lift yourselves up out of the ooze and get back to borrowing and splurging…that’s the RBNZ message. January will see a return to even cheaper startup mortgages on offer with govt guarantees and wrapped in pure BS…you too can own a mcmansion and have extra rooms to pack away the stuff you just have to buy….so get out there and spend spend spend. That section priced at $45ooo in 2003 is only $245000 now, meaning YOU stand to become very very rich with the 20% gain certain to come in 2010.
January 2nd, 2010 at 8:25 am
You gotta love those ever hopeful batch owners in the Coromandel – asking prices up 9.2%.
January 2nd, 2010 at 8:33 am
Oh – and another interesting stat on Coromandel – they also have the highest level of inventory in the nation – 146 weeks worth! Really makes you think about the average IQ of the Queen Street brigade.
January 2nd, 2010 at 9:30 am
And did you here? A can of coke is going to drop to 50 cents over the next three years.
I guess there won’t be any monetary inflation after all. Yay!
/sarcasm
January 2nd, 2010 at 10:21 am
Hold on while this breast shaped rollercoaster ride heads back down!
January 2nd, 2010 at 10:58 am
Not if National have their way Jimmy…the South Seas Bubble must be saved no matter how many billions it takes in public debt …there will be pork for first home loans and pork for renting..pork for building and pork for rorting…who gives a shite what sort of time bomb it leaves for future families if National can hang on to power for two more terms. Think of the knighthoods…the superannuation payouts…the triple dipping prospect and the directorships…bugger the economy…it’s all about keeping that snout in the trough and telling Phil to f… off.
January 2nd, 2010 at 12:27 pm
Apparently, John S, coke has dropped in all the AngloSaxon countries of the world, except for Oz and NZ ! Admittedly, it’s all to do with our border controls ( capital and non-durable goods!?), but maybe your prediction is right! Perhaps there is a correlation between an addiction to debt and drugs. Better get Bernard to do a ’summer graph’ of it showing that ‘we are different’.
January 2nd, 2010 at 2:09 pm
People pay to much attention to house prices,it’s business you have to watch that’s what put’s money in peoples pockets and pays the bills.I live in west auckland and I see for lease signs everywhere.No one should have any doubt that there is trouble coming down the track,thus far we have been shielded by massive deficit spending in the hope that the economy’s of the western world will get back to the level it was,but it is unrealistic because that was fuelled by the western world getting trillions of dollars into debt and is still getting more into debt.As a result taxes will go up,rates up,interest rates up,unemployment up.personel debt up,House prices will fall,standards of living will fall,Inflation or deflation ? So the only thing I’m doing is staying out of debt and paying all my bills but I know if I can’t do that then we are in real sh..!
January 2nd, 2010 at 2:57 pm
@Rob: Think it would take a severe jolt to drop 30% its not here (yet), we survived last year with maybe a 5% drop…I’d guess and say ppl are worried that the Govn will knobble the tax advantages, hence the small drop….so I’d supect what we are seeing is home buyers and not prospective landlords, or not the “amateurs” anyway, and not the ones looking for the tax loss…Id love to know the answer on that….
I posted a URL on P.Krugman’s concern that the US stimulus runs out around mid 2010…so maybe this year will be fairly quite….maybe its 2011 for the nasty’s to bite.
regards
January 2nd, 2010 at 3:01 pm
@Wally: There you go using oxymorons again “Treasury research”
;]
regards
January 2nd, 2010 at 3:25 pm
@colin: Agree, but to get ppl to change they need to experience [huge] losses, they think with property they cannot lose….hence why I anyway watch so closely.
“As a result,
1) taxes will go up – agree.
2) rates up – agree (thats a given)
3) interest rates up – um….not sure, Wally sees inflation, I see deflation and rock bottom OCR, medium term, longer then yes Im with Wally.
4) unemployment up – um, I think best case its staying where it is in NZ, as the Govn is spending on infrastructure…at least for 1~2 years, but I wouldnt be surprised at 10% in NZ and 14~16% in the USA within 12months, I think they are fragged…which in turn will hit us hard IMHO.
5) personel debt up – no, I think ppl will pay down.
6) House prices will fall – agree, or stagnate….it really depends on how scary things get…ppl dont see the cliff we might fall over yet.
7) Standards of living will fall – except for the top 1% everyone elses is, has and will fall, but my scary scenario shows us looking like cuba is today, because we wont have the energy.
http://www.youtube.com/watch?v=WzWV2Ok72JU
So the only thing I’m doing is staying out of debt and paying all my bills but I know if I can’t do that then we are in real sh..!
To right mate….my plan is to only have my mortgage owing by year end…and Im chewing at that. However if we see deflation or mild deflation with a negligable OCR some debt isnt a bad thing….if the borrowings are used productively…
regards
January 2nd, 2010 at 3:44 pm
The folks at ECRI have a theory of a series of small and short recessions over the next decade . But they don’t foresee a double dip recession , at least , not as deep as where we were . Their contention is that the business cycle is bigger than Washington’s power to control it . And that the cycle is heading upwards , regardless of Obama , or Helicopter Ben .
January 2nd, 2010 at 3:44 pm
http://www.youtube.com/watch?v=CCiHpPkp3pU&NR=1
Another piece….GDP fell 34%…
January 2nd, 2010 at 4:18 pm
Im out west Colin and agree large parts of HSN/HSN VallEY/Avondale without tenants. Any info out there on commercial property prices??
Saw this piece in the herald today, the bright and upcoming Gen X’s/Gen Ys from 10 years ago – an update on where they are at now
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10618099
All of them are either overseas or didnt want to take part in the followup story! Sorry state the 27-32yr olds in NZ. I bet if you asked them what they thought of house prices they would all moan and winge.
January 2nd, 2010 at 5:16 pm
This asking price report by realestate.co.nz is a bit of a joke – hardly any homes have asking prices these days – take this search example of Remuera homes http://tinyurl.com/ybt2u3e
Most say $Negotiation or POA so how does one quantify a reduction in asking prices?
If all the higher quality/more expensive homes have POA or $Neg or Auction and only the cheapies have asking prices then it is not surprising that asking prices have dropped.
The whole report seems pointless!
January 2nd, 2010 at 5:21 pm
$25,000,000 for this one seems a bit rich
http://www.realestate.co.nz/1221823
January 2nd, 2010 at 6:26 pm
@RT: RE: ECRI, URL please?
from here? http://www.ecri.org somewhere? (dont think its here)
or,
http://www.businesscycle.com ?
I’d like to see why they think “a series of small and short recessions over the next decade”
PK and others are worried about a second dip, it seems likely….the Q is how bad…a series of short recessions suggests no real decent recovery in between, or the chance for un-employment to drop.
“Their contention is that the business cycle is bigger than Washington’s power to control it . And that the cycle is heading upwards , regardless of Obama , or Helicopter Ben .”
The reason its heading upwards is because of Obama & Helicopter Ben, not inspite of, happy to go on record that on the face of it, I think they are wrong. ie the business cycle is heading upwards….I think its going to poop itself in the second half of 2010….Bollard should sit and wait til September IMHO.
Too many people ive read and listened to (that seem to have their heads screwed onto their shoulders right) seem to be saying the upward business cycle (well actually shares) is not going to last….a beloved Libertarian (of yours?) Peter Schiff, Jim Rogers right over to PKrugman seem to be saying the US is stuffed or at least going to be in the doldrums for at least a few years, probably decade(s). Anybody who isnt sayng that has struck me as very believable/reliable….
January 2nd, 2010 at 7:20 pm
steven your an optimist if you think US will poop itself in late 2010,I think the share market has moved to fast and is already become a bubble set to burst.
January 2nd, 2010 at 7:46 pm
steven,
Whether there is a double dip or not, unemployment is going to be a problem. Just heard from news toady, about 250 are out of work as a freight transport company went into liquidation. Did you hear about this report? Is this scary enough? How many jobs do we need to create in order to take care of the unemployment (about 6.5%) in NZ? Any idea from anyone?
January 2nd, 2010 at 8:11 pm
So now we are reporting asking prices ? !
Pointless exercise – somebody has too much time on their hands.
January 2nd, 2010 at 8:48 pm
steven : The second one , http://www.businesscycle.com . Hey , I don’t make this up , can’t be that clever on a Rangiora High School education . Just some salient points from the team at ECRI . And why do you think that you are cleverer more so than them ? ( not saying that you ain’t )
January 2nd, 2010 at 9:04 pm
Bank Manager- I’m glad that “$25mill” pad in Remuera has a butler’s pantry…… nothing ticks me off more than the thought that the butler’s grubby mitts are fondling my sugar bowl.
January 2nd, 2010 at 10:38 pm
Steven
Some things to consider
1/ NZ is almost energy self sufficent – We export coal and our domestic oil production meets 50% of our needs before Maari starts production, which will bring it up to around 80%.
2/ Food is the real shortage, and NZ is well placed to benefit.
3/ Part of the downturn in NZ was related to last years drought. This year looks like it will be a bumper season. The vacancies in small manufactures in West Ak (while a problem locally) is not what NZ rides on, NZ economy moves with the agricultural sector.
January 2nd, 2010 at 10:45 pm
and here i was heading back into the water after raiding the fridge…and voila…i log on and here’s where’s wally, roge tomcat and all the lags and few new ones grinding away.
satan never sleeps and nor does speculation about the future.
property will drop in price this year by about 13%, land tax will come in in May plus tax loopholes closed on property, unemployment and part-time will rise..yessirree, the perfect squall as predicted will culminate in 2010 and then v. gradually trawl out in the ensuing years.
anyone for a coke?
January 3rd, 2010 at 7:53 am
@RT: I didnt suggest you did….I wanted to read the entire piece, sometimes there are good links off such pieces that build a picture….put the work in context…these can sometimes be worth more than the original piece..
Thanks
@Grandy: Totally agree….with 1, 2 and 3. Almsot with 1, energy we are a bit short on transportable energy….70% of oil is petrol and diesel…farms need diesel…I read a piece suggesting that the best a UK farmer could do was reduce his deisel by 25%…NZ is more efficient here….
“Whether there is a double dip or not, unemployment is going to be a problem. ”
From what I have read NZ employers have actually tried to retain staff so they can bounce back after the recession, consider then if we stay like this or most likely get worse and stay there for two years. 6.5% is trivial…the USA is at leats 10.2% and that’s with them fiddling the numbers, the “real” numbers are more like 14~16%, twice ours…
regards
January 3rd, 2010 at 9:40 am
steven : I found a link to an 8 minute interview between Lakshman Achuthan (ECRI) and Joe Kernhan . Worth a looksie . ( 31 / 12 / 09 )
January 3rd, 2010 at 10:36 am
28 year old
What an interesting piece in the NZHerald on 5 young New Zealanders living overseas. Over 1 million New Zealand born people live overseas and 1 in 5 graduates live overseas, the highest rate in the OECD.
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10618099&pnum=0
Is this the future we want?
Do those who defend unaffordable house prices realise what they are defending? Do they really want New Zealand to become a nation of retiree landlords with immigrant tenants who watch their grand kids grow up by skype and facebook?
cheers
Bernard
January 3rd, 2010 at 10:49 am
Bernard : I have a brother living up in Whangarei . We are all in Canterbury . He may as well be in Oz , or elsewhere , for all that we see of him . And the effort to get there compares to that of a trip across the Tasman .
Do you have a geographical breakdown on where those million + Kiwis are living . At least 50 % in Oz , I’ll wager , London to a gummy-bear bag .
January 3rd, 2010 at 12:07 pm
steven
It seems inappropriate to compare unemployment rates with the US. We are of a different setting and different economy. My simple question is “how many jobs do we need to create in order to take care of the unemployment (about 6.5%) in NZ?” Do you have any idea?
January 3rd, 2010 at 12:29 pm
http://www.teara.govt.nz/en/kiwis-overseas/4
r/t– 460000–i agree re travel in nz–most of our families are in the south island+a couple in new plymouth—it,s more of a mission to get fron chch to n/p than brissie to chch + a lot more expensive
January 3rd, 2010 at 12:38 pm
Do those who defend unaffordable house prices realise what they are defending?
It’s the attraction of higher wages that drive many of our best overseas.
January 3rd, 2010 at 1:15 pm
I agree with your point BH, NZ is a small island and people on small islands travel. Look at Auckland…there are more Pacific Islanders living in Auckland than in the Pacific Islands itself (sorry can’t find a reference)
My point with the young NZers in the story was that none of the people ran their on businesses and there were no entrepreneurs etc. If they want to follow their dream overseas thats fine just don’t moan about not affording a house when you come back. Out of 50 Gen x/Yers that I know that have done their OE, none came back with any money, and 1/3 had debts on credit cards.
“Do those who defend unaffordable house prices realise what they are defending? Do they really want New Zealand to become a nation of retiree landlords with immigrant tenants who watch their grand kids grow up by skype and facebook?”
I’d would be asking why these 30 year old after 7-10 years in the work force haven’t got a deposit for a house. I know couples who are teachers ($100K combined per annum) who spend it up and can’t afford a deposit.
I reckon don’t blame the game, blame the players
Happy new year
January 3rd, 2010 at 2:03 pm
“I reckon don’t blame the game, blame the players.”
Well said.
January 3rd, 2010 at 2:06 pm
Who can blame the players if it is a rigged game ? Blame whoever set up the rules / or who currently presides over them .
January 3rd, 2010 at 2:42 pm
Roger – are you becoming a CASPer too:
http://www.interest.co.nz/ratesblog/index.php/2009/12/31/summer-chart-series-the-chart-that-shows-how-unbalanced-our-economy-is/comment-page-1/#comment-54192
“…. we have no natural jungle but frameworks we, via our leaders, put in place. These frameworks will naturally select the things that succeed in that framework. If we see things emerge, we do not like (property bubbles, excessive growth in the money supply, low productivity growth….) or would rather not have, better to turn our attention to the framework that encouraged that undesirable outcome.”
But maybe 28YO makes a good point too, or maybe they just liked that warm beer so much they couldn’t help themselves – I know how that feels.
January 3rd, 2010 at 3:14 pm
Maybe the answer is to have no taxes at all but the state gets to keep all the assets when you cark it!…oh…I forgot about the likelihood that the army would speed up the carking…it would be fun though…if they bumped off too many, the ones left wouldn’t be able to build any wealth…so it would sort of equalise wouldn’t it…a certain number would have to cark it every month to feed the pigs at the trough…and they too would know their day to cark it was approaching fast..hospital care could be by lotto draw…you get so many sets of numbers depending on the size of the wart or whatever….
January 3rd, 2010 at 3:26 pm
True, younger people today seem to demand more than what our parents would have happily lived without… Housing is applicable also.
I have quite a few friends who have worked overseas to return with reasonable deposites + a bit. They could purchase the house they want but this would usually be at a sacrifice to actually enjoying their time back in NZ due to masive mortgage outgoings.. Salaries here are low.
Justifying these high house prices isn’t rational but unfortunately factors contributing make them so. In auckland there is a lack of supply due to leaky builds and lack of turnover due to lack of job confidence. The tax system encourages over investment in rentals as so does the lack of alternate investments ie reduced confidence in the Sharemarket, finance companies. Immigants are also pushing up the prices.
The best measure of houses being over valued is the avg income to avg house sale prices. It’s currently over 5 but through out history is below 4.
Miles
January 3rd, 2010 at 3:37 pm
Nah Les : I’m not Chinese (C) , not American (A) , nor a Semi-conductor (S) Professional (P)…………..I love gummy bears , if that’s any good to you . But a ” CASP’er ” , sadly , no …………Warm beer , not hydrating on that are you ? Take RAY’s advice , and get a good single malt whisky intae ye , bonny lad . Och aye .
January 3rd, 2010 at 3:41 pm
Wally : If you have a rich relative in Yankee Doodle land , pray they die ( peacefully of course , we’re not totally uncouth ) in 2010 . ‘Cos in 2011 full death duty taxes are re-instated . ………… And we think we have it bad in Godzone . Praise the Gods ( Douglas / Richardson / Cullen / English ) that death duties have not been re-imposed here . Saints preserve us !
January 3rd, 2010 at 3:51 pm
That’ll keep plenty of tax lawyers busy RT. You can count of the socialists….them buggers know how to create soooo many useless unproductive ‘jobs’. I doubt the National rump would take long in drawing and quartering Bill if he so much as hints at death duties…almost as dangerous as means testing the pension.
January 3rd, 2010 at 3:54 pm
Bernard : Are you gonna set up a ” Predictions for 2010 ” post ? C’mon , let’s see what the crew and you prognosticate for the first year of the ‘Teenies . ……………. …..Excell yourself , go with a 40 % housing correction in Godzone ! Me , I’m forecasting Goldmoney Sacks (GS) to appreciate by 50 % this year , to reach $US 250 by year’s end . And to cheer Wally ( and myself ) , still bullish on copper / oil / and potash .
January 3rd, 2010 at 4:54 pm
Now why did someone have to ruin it by mentioning ale….
Fullers, Youngs, Batemans, pint glass… damn, you know how to ruin my day.
Back to the teapot.
January 3rd, 2010 at 5:34 pm
Watney’s Red Barrel . / . Guinness . /. Kilkenny . /. Greene King . / . Newcastle Brown ./. Marston’s ./. London Pride ./. St.Austell ./. John Smiths ,/, Theakstons ,/, Abbey…………You’re not wrong , KW John : We’re bloody lucky to have TUI instead of that lot……………………..Yeah , right !
January 3rd, 2010 at 9:54 pm
As part of generation x sitting out in north Canterbury tonight I could not afford this quality of life overseas. I appreciate it a great deal and constant travel overseas reminds and reinforces this fact to me. The world is close enough if you have the disposable income, the west coast U.S is only one nights sleep away…convenient as -)
However it is different story if you are a wage/salary slave in this country regardless of what generation you come from…unless you work in the medical profession or executive ranks!!
Doing our goals/budget for this current year it is interesting to note our basic cost of living excluding mortgage has increased on average 7% over the past year i.e insurances, power etc. How do most people afford that kind of increase?
Somethings has got to give.
I’m lucky, to date I have the opportunity to increase my income to offset this relentless inflation I have seen across my working life. However like most things, it has its natural limit.
If I can’t keep up the pace… the trade off is savings for retirement, time to have another coke
And I’m one of the lucky ones!
And people talk about deflation, where is it….
January 4th, 2010 at 2:35 am
As one of 1 in 5 graduates who have been living overseas for a number of years and having very recently returned I’m amazed at how tough things are financially for the average person here – I guess that refers to those who bought houses after they’d risen so much in price and are on an average wage/salary or even a bit above average. It would definitely be easier for me to return to the UK to buy a 3 bedroomed property with a garden than buy one here. Admittedly the house wouldn’t be as big and may or may not have a garage and the garden may be smaller (not necessarily though), but it would also be double glazed with central gas heating – far cheaper to heat than in NZ. Now before you tell me to b***** off and go back to the UK then, NZ of course has things to offer that money can’t buy in many places elsewhere in the world, or I wouldn’t be back. But I can see how for many it really isn’t an option to come back and house prices surely have to be the largest cost. I’m thankful that I have no young family to support and have some savings, although I’m still only able to consider the lower end of the market. I am still shaking my head and doing sums at the prices of things in NZ and wondering how on earth people buy a house here now. It is cheaper in the UK to buy NZ lamb, milk, butter by a significant margin. A frozen leg of NZ lamb at our local supermarket was frequently 6.99 on special which in NZD right now is about $16. Please do tell me where I can buy it here for that price as I will go and do so. In the UK I could buy a liveable house for 3 times my salary, a decent one for 4 times and a very nice one for 5 times. In NZ I’m looking at 6 times my salary for the lower end of the market in Christchurch which isn’t one of the most expensive places to buy. I am stumped really by how people afford to buy a house here as things are now. An example was given above of two teachers on around $100 000 a year. After tax and ACC levy I think they’re left with around $75000 (happy to be corrected on that – had a brief look at IRD website). An average rent seems like about $350? (Again, I may be wrong on figures, and of course people may choose to live in a small cheaper place to save). So that’s $18 000 leaving $57 000. I won’t even try to guess at food, petrol, car costs, electricity, etc etc as I’m too out of touch with prices, but it doesn’t seem like there’s loads left to be saving for a deposit or to pay the extra that a mortgage would consume over renting. If they save $25000 a year then they have a respectable deposit for a house of around $350 000 after three years say (or do you need 20%?). The repayments then at 7% would be $471 per week plus extra costs of rates and house maintenance etc. I can totally see why people just don’t bother. It all seems really difficult, cheaper to rent and enjoy having some disposable income and living in a nice country. And spare a thought for single people trying to save for a deposit and pay off a house. Or what if one of the couple gets ill, made redundant or whatever. In the UK I could buy a house on my own. Plus through my job I was automatically eligible for 6 months full pay followed by six months half pay sick leave and 8 weeks annual leave a year. I guess my point is that although there are so many pluses in NZ the cost of housing is really diminishing the great things about life in NZ. Luckily there are lots of things we don’t need money to enjoy here, or not a lot of money, which I like much more in preference to the UK, but how can people survive?
End of ramble.
January 4th, 2010 at 6:55 am
Hi Kiwi
I congraulate you for coming back with some savings. I agree NZ is a great place to live and for me its the best place bring up my three kids
I agree with all your figures (I would even say factor in an interest rate of 8%) and speckles also made a good point about the constant increase in costs of living every year.
“In the UK I could buy a liveable house for 3 times my salary, a decent one for 4 times and a very nice one for 5 times”.
I don’t disagree that getting a house is hard….its the biggest asset that most people will own so it shouldnt be easy.
I bought my house in Auckland after working for four years paying off the student loan and saving hard. It is in an entry/working class level house in a typical west auckland suburb. Its an average house and I paid the median price at the time of $340K. I worked a second job part time and even had a boarder in. I didn’t eat out, I shopped at the cheapest plce (Pak n Save) and I didnt travel to Wellington/Queenstown etc for new years/parties etc. Basically I roughed it and got onto the property ladder
“I can totally see why people just don’t bother. It all seems really difficult, cheaper to rent and enjoy having some disposable income and living in a nice country.”
And at the end of the day it comes down to this sentence above. Where there is a will there is a way. Once you get on the ladder you continue the diciplined saving and pay down the mortgage and move up the ladder. It is hard and not easy (esp when your mates are pissing it up and have the flash cars and holidays) but taking action and working hard for 10 years will put you in a financial position far greater than your peers by the time your 35-40.
Hopefuly you can see the other side to the coin. For every young person buying a house there are 4-5 who say it’s too hard. You can do it. I bought in 2006 in boom times. I wasnt going to wait for prices to come down to 3-4 x the average wage before buying. If they did that tommorrow I would buy three houses.
Good luck kiwi
regards
January 4th, 2010 at 7:29 am
why high house prices matter…
http://www.stuff.co.nz/business/personal-finance/3204095/More-families-face-debt-blowout
January 4th, 2010 at 7:54 am
Jeez Tagro…I just had to cut out this bit..”… the financial reality is of a perfect storm ahead: a significant rise in household debt, falling house prices, rising unemployment and a worsening savings rate”..
January 4th, 2010 at 8:01 am
and this from Treasury..”However, the Treasury said the increase in household debt – as a result of high incomes, lower taxes and unemployment, and cheaper credit – was not necessarily alarming. Debt allowed people to smooth out consumption over their working lives, with big-ticket borrowings for education and housing repaid when incomes rose”.. stupendous garbage but coming from deskbound salary bloated Treasury employees, quite what I expect!
Love that last bit of fluff..”repaid when incomes rose”!!!
But then they always have rising incomes at Treasury, don’t they!
January 4th, 2010 at 8:28 am
and in a similar vein…
http://www.guardian.co.uk/commentisfree/2010/jan/03/property-prices-house-building
yeah, wally, that treasury quote got me too.
January 4th, 2010 at 8:53 am
Begs the question doesn’t it….what the feck do we need Treasury for if all they can come up with is this level of garbage. Maybe Key is right to dismiss them all as fools. First govt dept to be chopped down to size in the new ‘age of the axe’.
Get rid of 50% of them and chop salaries by 50% for those left. Shift them into a prefab in Petone and sell off the vacant building.
January 4th, 2010 at 9:06 am
Gold news for Wally
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10618282
January 4th, 2010 at 9:17 am
It depends 28yo…I shall have all that extra worry of where to stash the mounting cash
January 4th, 2010 at 9:28 am
Kiwi….agree with everything you say. I returned to the UK 5 years ago selling a beautiful cliff top home I owned in Rodney district for $375K and buying in the UK for £187K with a massive mortgage. Now 5 years on, my ex property in NZ that I owned outright is worth $700K, the one I purchased in UK after rises and falls is worth exactly what I paid for it £187 K. I want to come back to NZ but after moving costs, fees, car etc I’d be left with just $NZ 150K to buy a house in North Auckland (fat chance) as I have poor health and cant get a mortgage or work. Even if you take all moving costs out of the equation, I have still lost a capital amount of almost half a million dollars in just 5 years by being back in UK. There won’t be any immigrants pushing up prices…not from the states, the UK or Europe anyway !! I think the tail end of people who could afford the move is coming through now. Across the board if you look at immigration websites for OZ and NZ, all poms etc are totally unable to afford houses in NZ and are having to leave houses in UK rented out for now to avoid making a bigger loss. The exchange rate has fallen from $3.63 to the GBP when I emigrated (2001), to just $2.20 now…thats not far off a 50% fall.
This imbalance between UK and NZ is unbeleivable when you look back at the last 30 years or so re house prices and exchange rates.
Unless NZ house prices fall at least 30 to 40% no immigrants will be able to buy and therefore they will stop coming. People like me and many others stuck in UK are unable to return to NZ until the balance gets back to the long term average, as well as the exchange rate returning to the long term average of closer to $3 to the GBP. This is unlikely to happen anytime soon with sterlings plunge.
I honestly beleive if Kiwis think house prices will remain as high as they are…then they are living in cloud cuckoo land. Thats what we thought in the UK in 1988….then prices fell 50% in a year or so. Then we all felt the same again just 2 years ago, then prices fell 30% in a few months. There will be few immirant buyers out there with such an imbalance while the $NZ remains high. Prices need to fall or stay stagnant for many years to return to equilibrium with the rest of the world (OZ excluded as poms can’t afford houses there either now).
Much as I want to come back to NZ, I can’t until I can afford a basic home and many other kiwis abroad are in the same position.
P.S stockmarkets great with the opps for UK investors tax free….I’m over 100% up since last March in Russia, BRIC funds, Latin America, commodities etc…….same for my pension fund which I self invest. However…I was kind of hoping to get back to NZ before 2030 !!!!!
January 4th, 2010 at 9:36 am
Interesting comment here from Ben B overnight…”However, if adequate reforms are not made, or if they are made but prove insufficient to prevent dangerous buildups of financial risks, we must remain open to using monetary policy as a supplementary tool,”..I wonder what he means by “dangerous buildups of financial risks”…would this be the price of gold by chance!…would the Fed shove up the cost of money if gold went to $2000 or wait until it passed $4000??..the mind boggles..the rising cost of money would destroy the last remnants of American private business..leading to the liars and crooks in Congress borrowing more trillions to prop up their house of horrors…leading to more QE and thence to gold going to $6000. Round and round the BS goes.
January 4th, 2010 at 9:51 am
A word to the wise Sue…had you been here, you may have rushed to buy one of those fantasy apartments in Auckland that promised so much and then poooof your entire investment would be gone…and remember since going to the UK you have had the pleasure of being able to swim in all that ‘culture’. You missed out on 4 years of comrade Helen telling you how to live your life. The best option is to maximise your chance to enjoy what Europe has to offer and stop worrying about what might have been. Buy a real touring bike and tent for the summer and peddle round France living on cheese and snails and stuff. The bubble of stupidity here in Noddyland will run out of govt pork soon and then the great collapse will gather pace because only the fumes from the BS down here are keeping the bubble in place.
January 4th, 2010 at 10:17 am
@28YO, You post -6.55am :
“I wasnt going to wait for prices to come down to 3-4 x the average wage before buying. If they did that tommorrow I would buy three houses.”
Just as a matter of interest, if house prices do fall , say,30%, I assume that the equity you have in your established stock will be diminished, and not be available as further collateral for those “three more houses” that you would buy. In fact, your lender is more likely to look at scaling back their lending to you, rather than advancing you more to leverage?
January 4th, 2010 at 10:37 am
http://www.guardian.co.uk/business/2010/jan/03/credit-crunch-iceland-ireland-greece-dubai-spain
“The bubble of stupidity here in Noddyland will run out of govt pork soon and then the great collapse will gather pace because only the fumes from the BS down here are keeping the bubble in place.” – Wally
The only difference between Australasia and the five countries in the link above is the damn the torpedoes attitude of the big four. They have a govt guarantee on both sides of the Tasman and their executives and the politicians, from Rudd and Key downwards, know that as soon as mortgage lending slows dramatically or stops, they and the two economies will go into freefall like Iceland and Ireland. Sorry guys, in this case time will not be a healer. Trying to fixing a huge debt problem with more debt will be fatal.
January 4th, 2010 at 8:36 pm
Sue – looks like you should have stayed here – it’s Godzone!
28 yr old – good onya mate, I take it you have no Playstation. SKY TV, iphone or ipod, big screen TV or flash car!
Kiwi – if things were so good in the UK you should have come back with more money? I guess they can’t pay that well when you get 8 weeks a year leave.
Wally – time will tell but if the GFC couldn’t kill the NZ houisng market will anything?
2010 should be a vintage year for the average sensible NZ resident. Work hard, don’t waste money on crap you don’t need, pay off debt and reap the rewards of a recovering economy. It’s all good.
January 5th, 2010 at 3:07 am
Hi Nic Arrand
good point, but if prices do fall to a median of 3-4 x avg wage (150-200K) I have sufficient equity (total LVR of 51% currently) in my properties and a sufficient deposit sitting in the share market to draw on to easily purchase three properties. The other point is if properties dropped by 30%, rents would rise (so the westpac, motu and treasury reports say) and good properties in Auckland would become cash flow positive (value would return). If the big crash did come in 2010 I will be quietly picking and choosing property that I’m after while I’m sure this site will be busy with the Bears saying we told you so to the minority Bulls
Bank Manager-yes correct, always driven a crappy Toyota and no toys or extras.Plenty of time to travel when I retire at 50. London will still be there to sight see.
Regards
January 5th, 2010 at 6:46 am
Good on you 28_yr_old.
January 5th, 2010 at 7:32 am
Housing predictions for 2010
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10618377
Matt in Akld here is a quote from your mate Tony Alexander:
“These numbers sound about right to us and probably also to the many people who took advantage of the buyers’ market earlier this year to get their first home or increase their investment exposure.”
January 5th, 2010 at 7:40 am
28 yr old – here is more from that item:
BNZ chief economist Tony Alexander is taking an optimistic approach.
He noted the Reserve Bank predicting firm house price gains over the next few years and average house prices rising by 8.5 per cent over 2010 and 5 per cent over 2011.
“If you are still waiting for house prices to collapse 40 per cent best go to one of those islands expected to be swamped as sea levels rise.” Alexander also rejoiced in getting his house price outlook right for 2009. “We forecast house prices would decline on average 10-15 per cent. They fell at worst 11 per cent.
“Second, rather than say we then expected house prices to rise (people were just too sensitive towards such positive talk) we invited people to read between the lines from our comment that if one wanted to make a canny purchase in the housing market then one should get it done before the middle of [last] year.
“Since January 2009 average house prices around NZ have risen 9.4 per cent and by some measures are back to where they were late in 2007.”
January 5th, 2010 at 9:35 am
28_yr_old- ever looked at chances of dying before 50? climate change eroding the monetary system that you endevour to be a slave to for 30+ years? Atleast buy a playstation as a hedge ffs…
January 5th, 2010 at 10:02 am
Thanks Macca
but i like to surf and enjoy the real world not cyberspace
global warming means I don’t need a wetsuit in spring
January 5th, 2010 at 2:23 pm
having just recently returned from the uk i have cofirmed all my beliefs prior to leaving .. kiwis are getting shafted.. you have one problem here and that is your wages are shockingly low .. the lowest in the western world and it is the most expensive place to live in the western world .. i know ive lived in most western countries and i could save in everyone of them apart from britain whwere i just got by breaking even… but here for three years and i am going down to the tune of about 60 bucks a week .. seriously some may argue but they are going on stats not reality.. kiwi mentions the exchange rate conversion of one of his/her examples. but we dont earn 2.4 times what they earn over there so that is so daft but yet such a common mistake .. i dont know why its so hard over here ?rates, cost of living acc are always on the increase by ludicrious amounts and now a land tax just makes me want to move and move i will very soon …
January 5th, 2010 at 2:37 pm
Viscious circle, Pedro. Wages up=higher input prices=higher selling prices=less competative exports=less sales=less jobs…etc.
We mathematically need LOWER wages to make the reverse of that flow diagram work for us. That would bring non productive assets back into line in a hurry, and return our export industry to competativeness. As others have posted on this site, one way or another, it’s going to be a lower standard of living for those of us remaining here, in the years ahead. Hence the reason that those like you, with choice, you are off….
January 5th, 2010 at 3:56 pm
Bank Manager… or any one else
Please can someone explain:
Why are increasing house prices a good thing!
From my naive point of view there can only be one sensible way this works:
i.e. We encourage high immigration, targeting countries wealthier than ourselves, and rip them of with our poor quality, over priced housing stock.
Anything else is just ripping off the country, supporting excessive bank lending and estate agency.
No insult intended to those who own “investment” property, but I cannot see how it helps anyone to have inflated house prices.
It just extends the time you have to rent from the bank.
Is there a high social status that accompanies being a landlord?
January 5th, 2010 at 4:30 pm
I’m not sure about status, KW; but being a landlord certainly has unfoseen risks! And if you haven’t bothered to insure the property, then perhaps the Christchurch City Council will reimbrse you for your loss.
http://www.stuff.co.nz/the-press/news/christchurch/3205269/House-of-horrors-landlords-face-ruin-after-arson
January 5th, 2010 at 4:53 pm
Can someone on this blog PLEASE tell me what good are high residential property prices to the NZ economy in general ?
5 salient separate points would be sufficient, while personal reasons are not to be taken into account, thank you.
My macroeconomics 110 tells me that new or expanding export led business is a much better idea ….or do I just have my head in the sand …..
January 5th, 2010 at 5:01 pm
28 year old – I’m not sure where house prices will go in 2009, probably somewhere between -5% and +5%, but who really knows
Alexander’s prediction wasn’t quite as clever as he makes out. If you follow his predictions way back at first he predicted flatness, then when prices started to go down he predicted 5-10% drops, then as they went down some more he predicted 10-15%. So really he didn’t predict anything. Its like his prediction for net migration in 2008 – 15,000- 30,000 : a range so wide its laughable!!!
Most economists have a dire record of predictions which is why I pay them very little attention.
What I am more interested in to be honest is the housing bubble in China, and what its popping may mean for China and the rest of the world. It sounds like it has blown out of all proportion there, there hasn’t be a bubble in history that hasn’t been followed by a crash
January 5th, 2010 at 6:31 pm
Thanks Bullfrog,
But I think I posted into an elite group of ‘canny’ property investors.
Thanks to Sue and Kiwi for an ‘outside’ point of view.
@Nicholas, agreed, “The house was not insured on Saturday”…. I smell a story here.
January 5th, 2010 at 6:44 pm
I take those tales with a grain of salt Matt. The population over there is growing and young. The migration to the east is very real. Now a Dubai bubble I can go along with. Ditto one here and across the ditch. I suspect much of the bubble noise on China is coming from people out to cause a drop on which they have placed some shorts. Old Goldman trick. China man, he not silly and have 3000 years of experience.
January 6th, 2010 at 6:48 am
Nicolas ,you can have it which ever way you want high wages high cost of living. low wages low cost of living. but low wages and high and ever increasing cost of living which is very different fom just high cost of living cause you can never plan for it is daft. people are sinking and if the country does not wake up there will be no one here . doctors are soon to be leaving even faster and tradesman science research, teachers and any one with a skill will have to move.There is no choice. how far or bad does it have to get before those in power wake up … ..once they gone alot harder to get them back..
January 6th, 2010 at 8:45 am
Pedro
I’m not sure anybody cares…. somehow we have got used to our population leaving.
The 6 month OE seems to have changed to full scale emigration, and the hope that eventually the emigre will return with a family (‘Good for the kids’).
The population has not grown much in the last 25 years.
I think we just have to accept that there are better places to live.
January 12th, 2010 at 12:55 am
I’m sorry to hear your situation Sue. I sold up a nice house in Christchurch, NZ in 2001 which financially wasn’t a great move, but I gained a lot in other respects from my time overseas and didn’t have the stress of being an absentee landlord. I didn’t buy in the Uk as I didn’t intend to be there so long, but as it happens I’m very glad I didn’t as in my area of the UK they dropped easily 30% and still no properties moving. I also have a slight disability which restricts my working ability to 32 hours per week and may mean I can’t work until I’m 65 and I’d definitely say look very carefully in to health costs here and factor that cost in to a move if at some time in the future it was possible for you. Just one of my medications is $50 a week here with nothing else as a possible substitute and I would be very ill and unable to work without it.
Bank Manager – you’re right, my salary wasn’t amazing in the UK, although it was substantially better than in NZ – I had a significant amount left over at the end of the month to both save for a house and also to enjoy my 8 weeks leave leave travelling where as here in NZ despite being a graduate with 14 years experience in my field I can’t see how I will have a lot left over after I pay the bills here and I am by no means extravagant.
Good for you 28yo. I did a similar thing when I first bought property. With 3 kids owning a house is a great thing.
I would be pretty surprised if we don’t see a price correction. NZ is a great place to live but you do have to have at least some money left over after paying the bills ?? And I don’t really see how NZ is different to any of the other countries that have had such big price drops on property. There will always be those with a vested interest in claiming there will be more rises (real estate agents, managers of banks) and those who want to believe that prices will drop (people who actually can’t buy a house despite savings and a moderate level of income). Surely though when the “average” person can’t afford to buy, incomes to house price ratios are at an all time high, and people can rent for significantly less than they can buy then somethings gotta give?