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REINZ reports record low house sales in October on 'slow start to Spring'; Median price flat, but stratified index down 6.5% from peak

REINZ reports record low house sales in October on 'slow start to Spring'; Median price flat, but stratified index down 6.5% from peak
11th Nov 10, 10:22am by Bernard Hickey

By Bernard Hickey

The Real Estate Institute of New Zealand (REINZ) has reported 3,903 properties were sold in October, which was the lowest October total since REINZ records started in 1992.

The volumes were only slightly above the all-time record low for any month of 3,666 hit in January this year and were down 36% from October a year ago. Sales were also lower than the pit of the 2008 housing recession when 4,469 were sold in October 2009 and down from 4,323 reported in September this year.

ASB economist Chris Tennent-Brown said the result was disappointing and increased the risk that prices may fall more than the 3% ASB had forecast for this year. He pointed to growth in unsold inventory to 14.6 months as a sign it was a 'buyers market'.

JP Morgan economist Helen Kevans said demand for property had weakened significantly and she expected prices to continue falling through the year.

The national median house price was unchanged at NZ$350,000, but the stratified House Price Index, which removes the distortions from sales of more expensive or cheaper properties from month to month, fell 0.9% in October from September.

The House Price Index, which was built in consultation with the Reserve Bank, shows house prices are down 3.5% from a year ago and down 6.5% from their November peak.

“The usual spring influx of listings has been late this year but activity is picking up now and the November figures should be better,” says REINZ spokesman Peter Thompson.

”People planning to change houses appear to have held back on listing their current homes until they see what else is available and how the market is moving," Thompson said.

“Though volumes are down overall prices are remaining stable,” he said.

"Despite the present economic conditions, both prices and the level of activity in the real estate market are healthier now than they were in October 2008 when the median price fell back to NZ$335,000 and the days to sell were 47 compared with 41 in October this year. While some of those sales may have been delayed transactions it is good to see activity picking up again in such a badly affected area."

There were 119 properties sold for more than NZ$1 million plus, 451 between NZ$600,000 and NZ$999,999, 990 between NZ$400,000 and NZ$599,999 and 2,343 for under $400,000.

The median price fell 20% in Central Otago Lakes. The median fell 8% in central Auckland and volumes in Papakura more than halved from a year ago.

'Turnover very weak'

ASB economist Chris Tennent Brown said nationwide turnover was very weak and down 7.5% in seasonally-adjusted terms in October from September, making it the weakest monthly turnover since November 2008.

"Stripping out the volatile activity in Canterbury, nationwide turnover was down 10% in seasonally-adjusted terms," Tennent Brown said, adding the seasonally adjusted days to sell rose to 46 days from 45 days. This was significantly higher than the long-run average of 38 days, but below the average 50-57 days to sell recorded in 2008 when the housing market was at its weakest.

Prices in Auckland fell 3.7% in the month to be down 2.3% on year-ago levels, making it the first month since June 2009 in which Auckland has recorded annual price declines.

Wellington prices posted a 2% gain in the month, but are down 3.1% on year-ago levels. Christchurch prices posted a 2.8% gain in the month to be flat on year-ago levels. ·

"Today’s REINZ report shows the housing market is particularly weak as the housing market enters the typically busy spring period. Annual price declines are in line with our expectations at present, but the very low level of turnover, combined with the current level of inventory presents downside risks to our expectations of annual price declines of around 3%," Tennent-Brown said.

"Months of inventory has extended from 13.3 to 14.6 (seasonally-adjusted ex-Canterbury). With days to sell extending out further, the market remains tipped in favour of buyers at present," he said, adding it he did not expect the Reserve Bank to start increasing the Official Cash Rate again until March 10 next year.

'Property tax changes bite'

JP Morgan economist Helen Kevans said borrowing for housing was rising at its slowest pace in more than a decade.

"Demand for property has weakened significantly amid higher interest (the RBNZ hiked the OCR 25bp in June and July) and changes to the way property is taxed. The relatively new tax measures prevent property investors from offsetting their losses against income and other taxes, making investing in property less appealing than it was before," Kevans said.

"We suspect that house prices in New Zealand will continue to head lower, particularly given that New Zealanders have adopted a more cautious approach to spending," she said.

"Indeed, with households realigning their spending patterns and consolidating their balance sheets, which have historically been too leveraged to housing debt, property investors will be reluctant to re-enter the market," she said.

"Already, it is taking on average 41 days to sell a property in New Zealand, and in coming months it likely will take much longer. Further, given the backlog of unsold property sitting on the market, we expect that house prices will continue to trek lower throughout the remainder of the year."

Here is the regional commentary provided by REINZ below.

Northland

From $300,000 in September the Northland median price rose to $315,000 in October, 1.6 per cent up on the October 2009 median of $310,000.

The number of Northland residential property sales increased from 81 in September to 105 last month, but is still down on the 113 sold in October 2009.

In Whangarei County, the median price eased from $333,000 in September to $312,500 in October, and is down on the October 2009 median of $361,000. But sales increased from 8 residential properties in September to 12 in October, slightly up on the 11 in sold in October 2009. Sales in Whangarei City rose to 57 from 39 in September and 34 in August and were also slightly up on the 56 properties sold in October 2009.

The median price also increased from $281,050 in September to $311,667 last month and is up on the October 2009 median of $306,497.

Auckland

After climbing back to $450,000 in September, the Auckland median price rose again last month to $460,000, which is $5,000 and just over one per cent up on the median price in October a year ago.

But October’s total of 1,360 sales is down on the 1,690 recorded in September and the 2,072 sales recorded in October 2009.

The median sale price for a North Shore City home eased up from $530,000 in September to $531,000 in October, but is still down on the median of $545,000 in October 2009. Total sales were 272, down from 304 in September and the 409 sold in October 2009.

Sales in Waitakere City slid from 198 in September to 170 last month, less than two thirds the 297 properties sold in October 2009. The median price eased back from $380,000 in September to $375,000 last month, $15,000 below the median in October 2009.

The median price for an Auckland City house fell to $483,500 last month from $525,000 in September and October 2009.

At 478, sales were down on the 602 in September and the 681 in October 2009.

In Manukau City the median residential property price recovered from $420,000 in September to $462,500 in October, also an increase on the median of $431,750 a year ago. But the number of sales decreased to 267 from 362 in September and 372 in October 2009.

The Papakura District median price eased back from $350,000 in September to $314,500 in October and is also down on the October 2009 median of $332,500.

The 30 sales in Papakura in October was well down on the 55 sold in September and 70 in October 2009.

The median price for Metropolitan Auckland homes continued to rise from $455,000, in September and $450,000 in August to $465,000 in October which is also slightly up on the median price of $462,000 in the same month last year.

Sales of 1217 are down on the 1521 recorded in September and the 1829 in October 2009.

Sales in the Rodney District slid back to 81 from 90 in September, 92 in August and 98 in July and are down on the 121 sold in October 2009.

But from $447,500 in September the median price eased up to $449,000 which is also up on the October 2009 median of $440,000. The median price for a Franklin District home climbed to $370,000 from $363,500 in September and is up on the median of $347,500 in October 2009. But with just 27 houses sold in October, sales were down on September’s total of 44 and the 64 sold in October 2009.

In Thames/Coromandel monthly sales stayed steady at 35 but are still less than the 58 sold in October 2009. The median price recovered from $315,000 in September to $370,000 last month but is still well below the October 2009 median of $417,500.

The median price for an Outer Auckland home has risen to $420,000 from $400,000 in September, $393,500 in August and $415,000 in October 2009. But sales volume decreased to 143 from 169 in September and 243 in October 2009.

Waikato/Bay of Plenty/Gisborne

At $305,000 the Waikato/Bay of Plenty/Gisborne district median price has fallen from $314,324 in September and $323,000 in August and is nearly 7 per cent below the October 2009 median of $327,500.

Altogether 531 houses were sold in the district, down on the 570 in September and the 789 sold in October 2009. In Waikato Country 70 houses were sold compared to 78 in September and the 145 sales in October last year. At $284,000 the median price is up on the September figure of $273,500 and the October 2009 median of $260,000.

The median price for a Hamilton City house fell back from $344,500 in September to $330,000 last month and is also down on the October 2009 figure of $334,250.

Sales volume fell to 139 residential properties from 150 in September, 151 in August and 153 sold in July, and is also down on the 214 sold in October 2009.

In Western Bay of Plenty Country the median price rose from $359,000 in September to $390,000 in October and is up on the $358,000 median in October last year. Sales volumes eased back from 55 in September and October last year to 47 last month. The median price for a house in Mt Maunganui/Papamoa recovered to $400,000 from $377,000 in September but is still down on the October 2009 median of $422,500. At 59 sales were up on 54 in September and 47 in August but down on the 66 sold in October 2009.

In Tauranga the median price fell further to $314,000 from $328,000 in September and $353,500 in August and is well below the October 2009 median value of $395,000. Sales of residential properties remained steady at 74 compared to 77 in September and 78 in August, but were still well down on the October 2009 figure of 117.

Rotorua’s median price continued its fall from $231,500 in September and $285,000 in August to $223,100 in October, $31,900 down on the same month last year.

The sale of 54 properties is down on the 66 sold in September, and the 63 in October 2009. I

n Taupo the median price recovered to $333,000 from $298,000 in September but is down on the October 2009 median of $357,000. There were 27 sales in October the same as September but fewer than the 35 sales in October last year.

At $164,500 the median price for King Country residential properties is a big increase on $92,500 in September and the October 2009 median of $113,000. Sales also increased to 16 from 9 in September, 8 in August and 10 in October 2009.

The median price for a Gisborne City home recovered from $210,000 in September and $220,000 in August to $252,000 in October but is still below the October 2009 median of $270,000. At 20, the number of sales is down on the 26 in September, the 35 in August and the 42 in October 2009. After dropping to $185,000 in August the Eastern Bay of Plenty Country median price continued to recover to $286,000 in October from $246,000 in September but was still down on the October 2009 median of $299,000. There were 21 houses sold compared to 26 in September and 41 sold in October 2009.

Hawkes Bay

In the Hawke’s Bay district the median price rose from $265,000 in September to $287,521 in October and is 5.7 per cent up the on the October 2009 median of $272,000. But the total number of houses sold fell from 159 in September to 126 last month also down on 225 a year ago. From $298,750 in September, the Napier City median price increased to $316,500, and is up on the median of $280,000 in the same month last year.

Sales totalled 52 houses, down on the 76 sold in September, and less than the 115 sold in September 2009. In Hastings City the median price is $285,000, up on the $262,000 recorded in September and $283,000 a year ago. Sales continued to slip from 66 in August and 63 in September to 53 last month, also a decrease on October 2009 sales of 70. After falling from $350,000 in August to $240,000 in September, the Hawkes Bay Country median price has jumped to $430,000, a significant increase on $340,750 in October 2009. There were 8 sales, compared to 6 in September and 12 in October 2009.

Manawatu/Wanganui

Across the Manawatu/Wanganui district the median price recovered from $216,500 in September to $232,950 in October, and is also 3.5 per cent up on the median of $225,000 in the same month last year. Sales at 156 are down on the 222 sold in September and the 297 sold in October 2009. At $288,750, the median sale price for residential properties in Palmerston North City is up on September’s $260,000 and the $254,000 recorded in October 2009.

Sales of 84 were down on the 87 recorded in September and 139 houses sold in October 2009. The median price in Wanganui City fell further to $168,000 from $180,000 in September and $215,000 in August, and is also down on the October 2009 median of $197,000. There were just 20 residential properties sold in October, down on the 45 sales in September, and the 62 in October 2009.

Taranaki

The Taranaki district median residential property price rose from $269,500 in September to $285,000 in October and is 3.6 per cent up on the $275,000 median in the same month last year. Across the district 112 houses were sold, down on the 132 in September and the 159 sales in October 2009. In the Taranaki Country area the median price eased from $199,000 in September to $197,000 last month (October 2009: $228,000). Sales totalled 16, up on 15 in September but half the 33 sold in October 2009. The median sale price for a New Plymouth City residential property rose to $315,000 in October from $300,000 in September, but is still down on the median of $322,500 a year ago. At 63 the number of sales was on a par with the 62 sold in September but down on the 88 sold in October 2009.

Wellington

The Wellington district median residential property price eased back to $390,336 in October from $398,500 in September, and $397,500 in August, and is nearly 6 per cent down on the October 2009 median of $415,000. Sales for the month eased up to 496 from 492 in September but are well down on the 757 sold in October 2009. In the Wairarapa, the median price fell from $270,000 in September to $222,500 last month, well down on the $251,500 median in October 2009. At 38 the number of houses sold is down on the 47 sales in both August and September and the 60 sold in October 2009.

The rise in the median price for Upper Hutt residential properties reversed from $361,000 in September to $342,500 in October, but is still up on the median of $333,000 for the same month in 2009. Sales of 32 residential properties were recorded in October, down on the 44 sold in September and the 63 in the same month last year. The Hutt Valley median fell last month to $353,500 from $376,000 in September and is down on the October 2009 median of $363,000. In October sales totalled 82, down on the 89 sold in September and the 143 sales in October 2009.

For a house in Otaki/Paekakariki the median price decreased to $329,000 from $345,000 in September and $355,000 in October 2009. But the number of sales eased up to 71 from 65 in September (October 2009: 105). From $390,000 in September, the median price in Pukerua Bay/Tawa slid back to $349,500 last month, and is down on the October 2009 median of $364,625. At 68 sales were slightly down on the 69 in September and the 78 in October 2009. The Central Wellington median price dropped back from $495,000 in September to $467,500 last month, well down on the October 2009 median of $510,950. The number of sales at 54 is up on the 35 residential properties sold in September but approximately half the 102 transactions in October 2009.

Nelson/Marlborough

Across the Nelson/Marlborough district the median price eased back to $320,000 from $330,000 in September and August and is the same as the October 2009 median. Residential property sales also fell back last month to 151 from 172 in September and are down on the 206 sales in October last year.

In Nelson City the median price increased to $345,000 from $331,000 in September and is also up on the October 2009 median of $315,000. But sales volume fell from 71 in September to 59 last month, also less than the 93 in October last year. In Marlborough the median price decreased from $312,500 in September to $262,000 last month (October 2009: $285,000). At 51, sales were up slightly on the 48 in September but down on the 59 in October last year.

Canterbury/Westland

From $297,500 in September the Canterbury/Westland district median price recovered to $315,000, the same as in August, and is 1.6 per cent up on last year’s October median of $310,000. At 533, sales are up on the 396 in September, but still well below the 980 in October 2009. The median price for a house in Christchurch City stayed steady at $338,000 for a second month. An improvement on the median of $335,000 in August, it is also up on the October 2009 median price of $330,000. Sales increased from just 237 in September to 343 last month but are down on the October 2009 median of 654.

The median price for a home in Rangiora fell from $317,000 in September to $260,000 last month (October 2009: $279,000), but sales volume increased to 25 properties from 19 in September (October 2009: 34). From $341,000 in September the median price in North Canterbury rose to $393,500 last month and is also up on the October 2009 median of $289,500. From 4 houses sold in September, sales increased to 14 last month, but are down on the October 2009 figure of 38.

The median price for a Canterbury Country home eased back from $415,000 in September to $377,500 last month, which is still above the median of $368,000 a year ago. Sales at 30 were up on the 20 properties sold in September but below the 43 in October 2009.

The median price of houses sold in Mid-Canterbury decreased from $248,000 in September to $233,000 last month, and is also down on the median of $254,000 in October last year. But the number of houses sold stayed the same at 25 in both September and October, though less than half the 55 sold in October 2009.

The median price in Timaru increased to $235,000 from $200,000 in September, but is still below the median of $239,500 in October 2009.

At 37, sales were up on the 35 properties sold in September but down on the 59 sold in October last year.

The median price for a house on the West Coast eased last month to $190,000 from $193,000 in September, but is up in the October 2009 median of $180,000. Sales eased back to 33 from the 37 residential properties sold in September (October 2009: 39).

Central Otago Lakes

Across the Central Otago Lakes district the median price dropped 17 per cent from $465,000 in September to $385,000 in October, well down on the median value of $483,000 a year ago. Sales are also down at 63 compared with 77 in September and the 86 sold in October last year.

From $515,000 in August the Queenstown median price fell to $482,500 in September and eased further to $477,500 last month, which is significantly below the October 2009 median of $555,000. Sales were also down at 32 properties compared with 46 in September and 45 in October 2009.

Otago

In the Otago district the median price increased from $230,000 in September to $245,000 last month, and is up nearly 4.3 per cent on the October 2009 median of $235,000. Across the region 180 dwellings sold last month, down on the 191 sales in September and 247 in October 2009.

The median price in Dunedin City increased from $242,000 in September to $259,500 in October, which is also an increase on the October 2009 median of $255,000. At 150, sales were up on September’s 147 but down on the October 2009 total of 181.

Southland

In Southland the median price continued to slide from $185,000 in September to $169,500 last month and was also 6.2 per cent below the October 2009 median of $180,750. Sales volumes fell from 141 in September to 90 last month, also down on 160 properties sold in October 2009.

In Invercargill the median price has fallen from $210,000 in August and $189,000 in September to $169,500 last month, which is also down on the October 2009 median of $186,000. At 68, sales are significantly less than the 106 sold in September and 113 in October 2009.

The median price for a house in Gore recovered slightly from $120,000 in September to $121,000 last month but is down on the median of $149,350 in October a year ago. Total sales were also down from 15 in September to 13 last month. (October 2009: 20).

House price index

Select chart tabs

Source: REINZ
Source: REINZ
Source: REINZ
Source: REINZ
Source: REINZ
Source: REINZ

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149 Comments

by  Crazy Horse  |  11th Nov 10, 10:35am 1289424928

The Great Mexican Stand-Off continues ..... only vendors coming on to the market that have to sell and buyers wanting a bargain and won't pay 2007 prices .... so no dice and number of sales down ...

 

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by  President of P…  |  11th Nov 10, 10:37am 1289425079

I'm going to call it... NOW is the time to buy... BUT always only if you can afford to..... start making hay the sun is about to shine....

President of Property

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by  Murray  |  11th Nov 10, 10:43am 1289425404

Good on ya POP! You've probably got more chance of being right than Bernard's current prediction of a $299,000 REINZ median price....

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by  steven  |  11th Nov 10, 8:30pm 1289460634

Then maybe $199,000 is closer.......

regards

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by  Murray  |  11th Nov 10, 10:51am 1289425897

No surprises here. Same same.

3 things to consider regarding volumes.

1. Canterbury volumes will be lower for a while for obvious reasons.

2. The REINZ has been stripped of it's powers and it is no longer a requirement for RE companies to file returns.

3. With sites like TradeMe it is much easier than it used to be to sell privately, and many are doing this. If you have to drop your price $20k, may as well cut out the agents commission!

 

Bernard, do QV report sales volumes? Their data always seems a few months out of date, but wouldn't they pick up the private sales?  Would be interesting to know total sales versus REINZ sales....

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by  steven  |  11th Nov 10, 8:28pm 1289460517

huh?

This is the selling season and its looking dire.....March looks a better bet......but it might not be 2011.....

regards

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by  Crazy Horse  |  11th Nov 10, 10:40am 1289425222

PoP .... why catch a falling knife ???

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by  Gummy Bear Hero  |  11th Nov 10, 10:50am 1289425810

'Cos you think that by catching a falling knife you may impress the other clowns in the circus ? ................ Or even get an approving nod from the ringmaster , wise old Uncle Ollie Newland !

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by  Crazy Horse  |  11th Nov 10, 11:01am 1289426473

GBH, have you noticed the "circus" is getting smaller, with a few "clowns" departing the ring ... and as for our good buddy, Olly he has an absolute vested interest in property, so why would he say,  in a public arena,  anything at all that could be misconstrued as negative, regarding property.

We will have to give Olly, the Ringmaster of Property,  a catchphrase - "the show must go on" !

 

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by  Gummy Bear Hero  |  11th Nov 10, 11:29am 1289428197

Yes ! This clown gets the munny in the bank today , from his Gummy Mansion . Gone from the housing market , for a year or three .

Unlike Bernard though , I don't believe a " crash " will occur in NZ house prices . A lotta sideways crabbing , and a % point down here or there , seem to be more likely .

If you believe in the concept of " reversion to mean " , then property investors will spend several years watching ruefully as their balance sheets remain static , whereas other assets classes go on growing .

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by  Wolly  |  11th Nov 10, 10:58am 1289426312

Just got word two farm sales went through down south somewhere...50% below valuations...anyone else caught that?

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by  Bernard Hickey  |  11th Nov 10, 6:05pm 1289451959

Got any details on this? Anyone? Keen to follow up.

cheers

Bernard

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by  A Gullible Prat  |  11th Nov 10, 11:15am 1289427349

OK, I am going to buy lots of property right now! How can I lose? Property prices only ever go up! There's never been a better time to buy! Off to the bank I go! ... Oh dear, the bank declined my application.. They said they no longer wish to give mortgages to A Gullible Prat like me. This is surprising, because who else is willing to buy property these days? 

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by  Bernard Hickey  |  11th Nov 10, 6:07pm 1289452030

The key to any application to a bank is not to call yourself "A gullible prat"... ;)

cheers

Bernard

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by  Malarkey  |  11th Nov 10, 6:22pm 1289452928

Actually, I'd have thought it mandatory.

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by  Matt in Auck  |  11th Nov 10, 11:28am 1289428138

I called a 3-4% decline at the start of the year - we are down about 3.5% according to this report, pretty much spot on.

Expect further gradual falls in the first half of 2011, as investors stay out, first home buyers struggle to get finance, and higher end properties continue to discount moderately to heavily. The property party is well and truly over, there's unlikely to be a massive bust, just a gradual slide down in prices

what happened to house prices "Edging higher" after the tax changes? Or prices going up 24% by mid 2012???   

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by  Sqaure  |  11th Nov 10, 11:49am 1289429342

I hope you're right, Matt, as I'm looking to buy my first house in late 2011 or early 2012. I've been following discussion on interest.co.nz for the past few months, but there's so much conflicting information it is difficult to know what to believe..

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by  Rob of the North  |  11th Nov 10, 12:34pm 1289432044

Square...if you see a house you like, make an offer around 10% below their asking price ( to factor in future price drops) and see what their response is.

the main thing to remember is that the average kiwi lives in their house for 7 years, so even if you buy slightly high, over that time span things should even out .

most of the advice you get on here can be conflicting but the bottom line is that the housing boom is over and prices , like matt of auck. says, are just going to wallow around with the occasional hiccup for the next few years.

however, always remember... a house is a HOME  which is a place you feel good about and love to live in...the price is a seperate issue...so buy the house you love..and love the one you're with ?!

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by  Sqaure  |  11th Nov 10, 1:29pm 1289435341

Thanks Rob of the North, I appreciate the advice. Fluctuation I don't mind, as long as I don't find myself in negative equity!

I completely agree with a house being a home, which is why I'm pushing towards the buy rather than rent option.

I'll continue to lurk and learn here what I can..

Cheers,

Rob (of the South)

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by  steven  |  11th Nov 10, 8:33pm 1289460806

Indeed it is your home.....but you need to pay for it and save for retirement.....paying say $400k today and seeing it worth say $300k when you retire isnt going to be good news....

regards

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by  Rob of the North  |  11th Nov 10, 8:41pm 1289461262

that doesn't make sense?

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by  ex agent  |  11th Nov 10, 11:47am 1289429244

Jeepers it is worse than I thought it was going to be in November. You have to feel sorry for the hundreds of agents who are not getting any income at present on such low sale volumes. This country needs to start spending again and not just on houses otherwise our current economic problems are going to get worse. We can only have so many working and paying tax for those on benefits. Also we do not need people leaving for Australia like they are otherwise things will slow down even more.

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by  Wolly  |  11th Nov 10, 11:56am 1289429786

 "This country needs to start spending again and not just on houses otherwise our current economic problems are going to get worse".....right yeah...somebody quick go and borrow some money so we can spend again....doh

  "Also we do not need people leaving for Australia like they are otherwise things will slow down even more"..............oh and how do you stop the exodus?

 "We can only have so many working and paying tax for those on benefits.".....wow that's powerful stuff...so what do you suggest...cut the benefits....haaaaaaaaaaarrrhahaha

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by  ex agent  |  11th Nov 10, 12:24pm 1289431454

Wolly I generally agree with some of the things you say but on reading what you have just said I can see why people do not take you seriously. The country is currently in the poo economically and only some increased spending in all areas is going to improve things and stop the businesses closing down and people who work in them being laid off. What do you think will get us out of the current financial mess the country is in?

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by  Rob of the North  |  11th Nov 10, 12:36pm 1289432203

Actually, i have it on good authority that Wally?Wolly does not exist... and in truth is actually none other than Bernard " Darth Vader" Hickey using this pseudonym to keep us all stirred up and responsive?

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by  Bernard Hickey  |  11th Nov 10, 6:08pm 1289452136

The force is strong with this one...

 

;)

Bernard

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by  Bernard Hickey  |  11th Nov 10, 6:10pm 1289452200

Impressive. Most impressive. Obi-Wan has taught you well. You have controlled your fear. Now, release your anger. Only your hatred can destroy me

;)

Bernard

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by  Rob of the North  |  11th Nov 10, 6:52pm 1289454753

Time to send in Luke Filewalker, I think!

may the Sauce be with you, Darth Hickey ..a.k.a Wally/Wolly of Blenheimer..

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by  Nicholas Arrand  |  11th Nov 10, 12:40pm 1289432401

Working harder will get us out of this mess, ex-agent. Taking a defacto wage cut, doing the extra hours for the same wage, will get us out. It's productivity, not spending, that will get us out.

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by  steven  |  11th Nov 10, 8:46pm 1289461583

As an individual you would be insane to start spending right now....especially if its via debt....

Ive been looking at the salaries for my job....I can more easily get in AUS what I get here in NZD and probably add 10% as well...

regards

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by  DRJ  |  11th Nov 10, 12:26pm 1289431573

"You have to feel sorry for the hundreds of agents who are not getting any income at present on such low sale volumes"

Sorry for them? Nope - not many of my dealings with agents have been good ones.  There are probably exceptions to the rule (and I suspect and hope that the good agents are the ones making sales still).  But the majority will play both sides (buyer/seller) to the benefit of only themselves.

"Also we do not need people leaving for Australia like they are otherwise things will slow down even more."

I do agree with you on this one, but am unsure what the answer is.  the reality is that people need to look after their (or their families) best interests.

I work in NZ right now and earn less than half of what I last earnt in Australia - not taking into account exchange rates which would make it even more attractive there.  The only reason I am still here is my extended family, but my wife and I talk about heading back there frequently.

My advice, if you're a young professional, and can handle being away from friends and family, you'd be mad not to jump across the ditch for a few years, save yourself a decent deposit, and come back when you want to buy a house (if you want to).  The extra cash will make a huge difference to the length of your mortgage, and lets face it - prices aren't going up here any time soon.

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by  andyh  |  11th Nov 10, 12:01pm 1289430112

Real estate agents are being culled as we speak:

http://www.stuff.co.nz/business/money/4325905/Market-puts-the-squeeze-o…

 

I wondered why there had been a drop off in posts from the property spruiker brigade, clearly some at least no longer have an office to post from.........

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by  Wolly  |  11th Nov 10, 12:12pm 1289430721

It's the reverse spin cycle andyh...all about trying to prevent having to pay the higher fee to the authority that keeps them 'honest'..ha

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by  Gavin Jones  |  11th Nov 10, 12:09pm 1289430582

I think there are a few factors that many here don't tend to consider. There are a multitude of reasons that people choose to sell/buy a property. Family left home and house now to large, or family expanding and current house to small, some head to the retirement village lifestyle, perhaps a change of job requires a change of location, moving to a better school zone, changing countries just to name a few.

So houses will always be bought and sold. My personal opinion on the drop in volume of sales is that the "leaking homes" are a far bigger factor in regards volume than most understand. Like who would buy one? Prices will remain firm as I beleive we have lost about a decade of homes and there is still no sign of an increase in homes being built.

Therefore volumes are down and prices steady because it is harder to find a good property than it has ever been.

Also a house is reasonably easy investments to look after and as money devalues it will possibly still perform better than most other investments in the long haul. At least you are more in control than all those who left their money in the hands of others and lost 100%. In comparison a 30% drop in price is nothing!

Many I know now regret ever selling their Investment properties. They sadly now have no investment income and face a bleak future.

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by  David B  |  11th Nov 10, 12:57pm 1289433467

One of the dumbest things I ever did was to sell the very first home I ever brought when I was 22, after I had owned it for about 6 years and had moved to Auckland.  My father didn't want me to, and one thing my father was very good at was making money, lots of it. If I had held on to that property (and I could have done, I was under no pressure and had no strong reason to sell it other than I didn't live in that town any more) it's now worth a small fortune and the rents I could have collected would have paid for itself many times over, over the last 25 years! Of course when I brought it I had a tiny mortgage on it equal to only 19% of its purchase price. It would take under a year of rent to pay that off now!

 

But then I'm not a property investor, but the key to making any money out of property to me seems to be don't borrow too much and hold it for as long as possible.

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by  Nicholas Arrand  |  11th Nov 10, 1:04pm 1289433840

We all think that, David! But do you know why I sold my first house? I had to, to buy the next one. Until about 1990, you couldn't borrow more than the servicable amount of the loan; so you needed to sell A to buy B. I'll bet that your current house X is a lot better to live in than A ( which in effect is  where you money from it is)

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by  ex agent  |  11th Nov 10, 1:26pm 1289435171

David you are right.People should not borrow too much for property as it is not very easy to move if things go wrong as they are doing now. And we are currently in a steadily dropping by the month market because people did not follow the above rule and they borrowed too much for their rentals and flash homes and batches and now it has to be deleveraged. This will take years to sort out so just watch the market go either sideways or steadily down in value for a good number of years.

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by  SK  |  11th Nov 10, 12:19pm 1289431197

The medium price in Auckland rose $10,000 to $460,000 during October, while the number of days to sell was 36.

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by  pythagoras  |  11th Nov 10, 12:31pm 1289431884

It is indeed remarkable that the price of spiritual advice in Auckland is so high.

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by  Nicholas Arrand  |  11th Nov 10, 12:34pm 1289432055

That's a mean comment.

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by  DRJ  |  11th Nov 10, 12:32pm 1289431952

And yet the graph at the top of this page clearly shows a drop in the stratified price.  If the REINZ have been selling "steady growth" when its actually been flat, what do you think it means when they say it's a "slight drop".

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by  KiwiBloke  |  11th Nov 10, 12:28pm 1289431687

I am not sure how this data is calculated but is absolutely wrong. Properties in Auckland are selling like hotcakes and prices unheard of before. In other locations, owners are simply holding back properies, but have not dropped prices. Property still remains the most preferred investment vehicle foe New Zealanders.

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by  Gareth Vaughan  |  11th Nov 10, 12:31pm 1289431918

"Property still remains the most preferred investment vehicle foe New Zealanders."

Not according to the latest ASB survey - http://www.interest.co.nz/news/term-deposits-more-popular-investment-re…

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by  DRJ  |  11th Nov 10, 1:33pm 1289435636

lol - no, it isn't.  I have just watched friends (who bought at end of 07) sell a house in Auckland.

They spent $30k on modifications and renovations to bring it up to a standard they liked over the two and a half years, and 90% of the labour was done by them, so that $30k doesn't take into account the cost of the hundreds if not close to a thousand hours of weekend work they(he) put into it.  The husband is an excellent  tradesman and the quality of the work was exemplary.

They bought for around $490k, and thought that with all the work (it was a lot of work) it would be worth $570.  They walked away with about $520, after haggling the agents fees down. (everyone should be doing this in the market right now).

In effect, the price of their house stayed exactly the same as what it cost them, but when you consider the cost of the time they spent, and the fact that inflation isn't taken into account, they probably took a small loss, (I would say 10% is probably close to the mark).  Now in their situation, this isn't a problem,  they are successful people with good steady incomes who have bought again in the same market, and will be fine.

Just the reality of the situation, you win some, and lose some. But if you are thinking to enter the market now, I think you have a better chance of winning if you wait a bit longer.

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by  Bernard Hickey  |  11th Nov 10, 12:59pm 1289433573

FYI Updated with full regional detail from REINZ and comments from economists.

ASB economist Chris Tennent-Brown said the result was disappointing and increased the risk that prices may fall more than the 3% ASB had forecast for this year. He pointed to growth in unsold inventory to 14.6 months as a sign it was a 'buyers market'.

cheers

Bernard

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by  Alistair Helm  |  11th Nov 10, 1:26pm 1289435205

Bernard,

I am really not sure where ASB get their inventory data from. The October NZ Property Report cited 48.8 weeks which is 11.2 months of inventory of unsold homes. That number is based on the 3MMA sales up to an including September and based on inventory on realestate.co.nz at the end of October.

Extrapolating the latest data based on inventory of unsold houses on the market today at 54,150 and using the 3MMA for the period including October gives an inventory of 113.0 months.

Whatever way you cut the data the assessment by the ASB is right in that these levels are well above long term average making it clearly a buyers market.

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by  Bernard Hickey  |  11th Nov 10, 6:12pm 1289452367

Cheers Alistair. Good questions.

Bernard

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by  Rob of the North  |  11th Nov 10, 1:02pm 1289433744

Actually, the most interesting indicator is the huge drop in comments on this site when new RE stats are released!

6 months ago , as soon as RE info was posted on here , cleverly disguised as real estate " Porn" ....you-all fell upon it like rabid dogs and by the lunchtime there was usually over a 100 hits and rising fast.

now we have 28 measly posts so far and it's gone lunchtime... and all muttering listlessly over the same ole refrains...so my pick is everyone ,incl the interest.co.nz "lags" on here , are so over housing that it's nearly a dead issue.

like King Canute trying to control the tide everyone has come to the conclusion that we can't will the market up or down as there are so many conflicting forces at play..if you like the house , buy it and move on..then we can read about you in the next raft of daft stats!!!

amen

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by  Bernard Hickey  |  11th Nov 10, 6:16pm 1289452564

Rob of the North

You're right the comment numbers are lower than the 'glory' days of 400 comments plus a day. But I reckon the quality is much higher. Yours included.

'Never mind the width, feel the quality...'

Here's a good example of a high quality and high volume thread we're getting these days

http://www.interest.co.nz/news/opinion-nz-risks-being-stomped-elephants…

cheers

Bernard

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by  Rob of the North  |  11th Nov 10, 6:56pm 1289455004

Very clever throw to your own brilliant editorial , Darth Hickey, but you fool me not..you've been on the turps with the Mora Man..and you know what doctor said about that..hmmm?

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by  Bernard Hickey  |  11th Nov 10, 1:08pm 1289434127

FYI have added more economists' comment.

JP Morgan economist Helen Kevans said demand for property had weakened significantly and she expected prices to continue falling through the year.

cheers

Bernard

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by  KiwiBloke  |  11th Nov 10, 1:31pm 1289435515

I am not convinced. It is true that prices are not rising at the rate at which they were rising a few years back, but then the prices are not falling as well. I know of a few porperties in certain Auckland suburbs that sold for unbelievably high price within the past few weeks. Have you searched for a 2 bedroom unit in Epsom, Auckland or a decent sized property in Greenlane?  For the property prices to be at realistic levels, these need to drop by atleast  20-25%, and then we can say that property prices have "really" dropped. A drop of a couple of % is hardly a drop given that the property prices went up to unrealistic levels between 2002 and 2008. All articles around property should be supported by some specific examples mentioning dollar amount for which these were sold in 2007 and the price at which same properties or very similar properties have sold within the past few weeks.

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by  DRJ  |  11th Nov 10, 1:36pm 1289435764

see post above.

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by  KiwiBloke  |  11th Nov 10, 2:50pm 1289440227

I can give plenty of examples proving my point, a couple are  - a property in central Auckland sold for $960k a few weeks back - the same property sold for $860k in 2007. Another property (central Auckland, again) that sold for $790k in 2007, sold yesterday for $850k. The fact is that investors are prepared to pay top $$$ for the right property even now. Secondly, most investors who have invested in properties are not selling, but holding onto their properties which is leading to a siutation where the prices are holding up neither going up or down.

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by  ex agent  |  11th Nov 10, 2:57pm 1289440655

You sound so desperate Kiwibloke ,like you are so scared the antis are correct.  Of course they are as the train is gathering steam and even Auckland will succumb to the fact that more and more NZers by the day are off to Aussie or staying here and just being very careful with their spending and of course are avoiding new debt like the plague.

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by  Nicholas Arrand  |  11th Nov 10, 3:17pm 1289441845

You do realise, Kiwibloke, that just leaving the money in the bank, and compounding it at 5% ( and interest rates have been above that for most of the time) or just not paying interest on any loan of a leveraged property ( the holding costs are unlikely to meet to outgoings on a 2007 purchase) that the $860k property should be $995k to be neutral; and the $790K one $915k?

So property one is down.... $35k, plus selling and holding costs, and property two... $65k!

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by  Murray  |  11th Nov 10, 4:10pm 1289445000

C'mon Nicholas, who would put $860k cash in to either an investment property OR the bank?!!

More likely it was purchased with 80% finance ($690k) and $170k cash. Assuming a 5% rental yield would mean around $800/wk income whilst interest and outgoings would likely be around $1,000/wk.  So it needed topping up by maybe $10k per year. That still leaves a $70k profit after 3 years. On the $170k deposit, that's eqivalent to 12% per annum AFTER tax.

Not to mention that you could claim the $10k loss per year plus depreciation, and probably get a $5k to $10k annual tax refund...

This example seems more the exception than the rule though, I would say most places are still selling around 2006/2007 levels.

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by  Nicholas Arrand  |  11th Nov 10, 4:40pm 1289446814

Well, me for one! But it's a comparative excersise, Murray, as you know. Any investment has to be compared to the risk free rate of return ( the alternative us of funds) to see if it's 'worth while'. Then you have to add on the Risk Margin. And those sums from Kiwibloke illustrate why property doen't make sense at the moment. Oh, and did you include the interest sacrifice on the deposit in your sums?

And... $800 p.w. on $860, 000 ! Well I pay way,way less than that for a similar valued property in Auckland.

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by  Murray  |  11th Nov 10, 5:46pm 1289450761

No need to include 'interest sacrifice' - the $170k earnt 12% per annum AFTER tax versus $170k in the bank at 5% BEFORE tax.

$800/wk (a 4.8% yield) seems a reasonable assumption to me, but then I don't know Auckland. Personally I don't buy below about 9%, though a friend showed me some places in Sydney a couple of years back between 1% and 2% yields!

I think it is wrong to exclude the borrowing ability that property has - that is one of the biggest advantages it has over other assets.

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by  Nicholas Arrand  |  11th Nov 10, 5:59pm 1289451573

We don't have all the numbers, Murray, as you say. But I'd be suprised if the cost were $1000 p.w. given that interest rates were, what 10%, in 2007.?I know I was getting 9%+ on depo. And I also guess the vendors paid tax at 30% on their earnings of $170k, declaring it as income, of course!

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by  Murray  |  11th Nov 10, 11:02pm 1289469778

No, we don't know the numbers regarding borrowings.

Your original comment, though, was comparing $860k cash in the bank to the $860k property had it been bought freehold.

You didn't account for rent from the property, tax refunds, or the fact that interest is taxable where capital gain might not be (depending on circumstances).

Interest is effectively rent paid for the use of someone else's money, just as rent is paid for the use of someone else's property.

Your $860k in the bank is your asset, and over 3 years it earnt $135k interest BEFORE tax. After 3 years your asset was still worth $860k.

If you'd had your $860k in that particular property, it would have earnt a similar income over 3 years but the asset is now worth $960k.

 If there had been no capital gain, THEN the returns would have been similar.

If the property was owner occupied, then there was no rental income, but whilst that might appear to make them worse off financially you would need to again compare that with someone who put the $860k in the bank and then rented a similar property next door - i.e. the interest earnt would simply pay the rent, so the returns are still similar. You could, of course, put the money in the bank and then live in a tent - but then we're not comparing apples with apples!

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by  DRJ  |  11th Nov 10, 3:27pm 1289442439

Was any work done on the properties in that time? What was the cost of the mortgages on those properties over the time? Agents fees on a $900k house sale? Changes to taxation laws must be making those sorts of margins dubious at best.  Remember that in 2006/2007 if you told someone your property went up in value by 5 - 10% over the last three years, they'd laugh at you, and tell you that theirs went up by 30%

The time for capital gains has passed.  I'm certain others have said this before - If it doesn't make financial sense on the day you buy it, it isn't likely to any time soon.

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by  Wolly  |  11th Nov 10, 1:38pm 1289435893

No argument Kiwibloke...check out the comments from the RBNZ on this site and you will see the reason why...the RBNZ and the govt have every intention of protecting the bubbles to save the banks, so they can go on flogging off the cheap hot credit to pork activity to make Noddyland a 'better place' with even more friggin debt than before......2 years now and Noddy is still one big fat property ponzi scheme running on BS and spin.

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by  Rob of the North  |  11th Nov 10, 4:43pm 1289447026

Jeez Wally..you're like broken record talking weird dribble on high rotate?

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by  andyh  |  11th Nov 10, 1:40pm 1289436002

Holy sauvignon blanc batman! The Marlborough RE market really is taking a knock (put Nelson/Marlborough into the search engine below and then drill down into Marlbough/Kaikoura:

http://apps.reinz.co.nz/reportingapp/default.aspx?RFOPTION=Report&RFCOD…

Backs up the QV data.

Horrid hot dry windy place in summer and horrid cold wet windy place in winter...........

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by  Wolly  |  11th Nov 10, 1:45pm 1289436313

To see a classic example of how the data is pure BS andyh, dig one step deeper and look at the sections data.......see what I mean!

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by  Alistair Helm  |  11th Nov 10, 1:44pm 1289436244

I think the number of sales for Canterbury is very interesting - 500 in October compares to just 359 in September in the aftermath of the quake. 

If you compare Oct 2010 with Oct 2008 (3,903 sales compares with 4,469) you find that the Canterbury performance which is 28% down on 2008 is not that bad, the national total comparing the months, 2 years apart was down 13% with Manawatu fairing much worse down 36% and Taranaki down 23%. 

It would appear that the sales activity in Canterbury could be said to be recovering steadily whereas there was a concern that the October could have been even worse than the September performance.

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by  RuruwithcapitalR  |  11th Nov 10, 3:19pm 1289441945

@Alister Helm: Lots of those October sales are those deferred settling from September because LIMs were impossible to get (thousands of files were dumped on the floor of the storage place in the earthquake and therefore couldn't be found until the mess was sorted out). So the figures aren't that interesting. Also the insurance companies weren't insuring for most of September, which meant that anyone using a mortgage to buy couldn't get insurance so therefore couldn't get the mortgage and couldn't settle.  So I don't see a recovery in those figures.

Post Christmas holidays will become more interesting because many, many people in Christchurch are unable to do anything; rent, sell, buy, or repair  because they are stuck in the red-tape nightmare of the "business as usual" city. 

Also see the excellent OpEd piece in yesterday's Press about the dire straits of small businesses. http://www.stuff.co.nz/the-press/opinion/perspective/4327699/Give-enterprises-lifeline/  That is telling for the property market because a lot of them have borrowed heavily on the house to stay afloat through the recession.

I believe there is an excellent case for taking Christchurch, even Canterbury, out of the national figures until the quake effects settle down. What is happening here is nothing to do with the property market but is a week-by-week, suburb-by-suburb response to an unusual and volatile situation. But I reckon if you are able to sift all the angles, there could be a lot of money to be made in Chch property over the long term. Though it would be easy to lose a lot too; and emotion rather than numbers will be the deciding factor in this city. 

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by  Gummy Bear Hero  |  11th Nov 10, 1:50pm 1289436607

Any data on the average selling price of Bay of Plenty kiwi-fruit orchards ?

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by  Wolly  |  11th Nov 10, 2:54pm 1289440480

So what grows best where you are Gummy?

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by  Gummy Bear Hero  |  11th Nov 10, 3:03pm 1289441031

Mangoes ! Across the bay on Guimaras Island is the county's mango research station . Next door to a prison . Just  down the road from the trappist monks , who make superb jams from guava and from manjo . An eclectic potpourri of " bedfellows " in that province !

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by  Gavin Jones  |  11th Nov 10, 2:10pm 1289437823

Wolly: You are correct bare land is currently at half the price it was three years ago, but that is normal in a recession. Falling Real Estate prices almost always indicate we are at the depth of the recession. The first sign of coming out of it is falling interest rates, then rising share prices, followed by rising commodity prices and so the signs go on. I'll leave you to work out where we are. And its been that way if you study trade cycles for at least the last 170 years.

Interestingly Rising Real estate prices traditionally occur just before the top of the next boom. However within real estate bare land is the first to fall but is also the first to recover. Great times to buy a section and build a new house as the new home builders are currently very competitive.

That’s why I never worry about a flat/declining market for 5 -7 years as good real estate will double on average every 10 years, just stay in for the long haul as they aren’t making any more of it!

Some will hate me for saying it, but this is a buyer’s market. Is it the depth of the recession? I don’t know but it is deep enough for me to buy with assurance that in 10 years time the properties should look ok. If its as bad as some are trying to make out and their predictions come to pass, then everything will have turned to custard so why worry?

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by  Wolly  |  11th Nov 10, 2:40pm 1289439625

Gavin..stop posting rubbish and take the time to go back ..follow that link to the data and dig down to get the 'section' detail for Marl/Kaikoura....then come back and tell us all what that has to say about real estate data.....go on...have a look!

 http://apps.reinz.co.nz/reportingapp/default.aspx?RFOPTION=Report&RFCODE=R100

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by  Gummy Bear Hero  |  11th Nov 10, 2:51pm 1289440270

Gavin : The " they aren't making any more of it " is a lame cliche , often trotted out by desperate real estate agents . That 2 dimensional thinking will  knee-cap your portfolio .

Many countries do reclaim land from the sea ( Holland , Singapore , Philippines , as examples ) .

And what if we don't need so much land in the future ? Urbanisation . High-rise living . Populations remaining static , or declining . Demographics pushing many elderly toward retirement homes , or into multi-generational homes with their relatives .

" They aren't making any more of it ! " ............... So incredibly idiotic , those words . Stick it on the lavatory wall next to that other little gem , " This time is different " .

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by  powerdownkiwi  |  11th Nov 10, 5:06pm 1289448415

You could stick on the inside of your coffin lid, GBH.

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by  Gummy Bear Hero  |  11th Nov 10, 5:35pm 1289450119

That is a particularly nasty thing to say !

I told the missus to let the dogs have a feed orf me Gummy carcasse , then to kick the bones into the fire . Not wasting any precious soil on the GBH corpse . [ the local dogs seem to have a taste for me ]

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by  powerdownkiwi  |  12th Nov 10, 10:13am 1289509991

Just pointing out that all things come to an end - and guessing when you might wake up to it!

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by  Bernard Hickey  |  11th Nov 10, 6:23pm 1289453027

Wolly

Friendly banter is good, but let's be nice to the new ones Luke

May the force be with you

cheers

Bernard

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by  Wolly  |  11th Nov 10, 7:03pm 1289455430

sorry.

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by  Matt in Auck  |  11th Nov 10, 2:32pm 1289439125

LOL - "Disappointing"??? for whom - the banks and the investors of course.

Its the opposite of disappointing for the hundreds of thousands of kiwis locked out of home ownership because of the silly ponzi scheme  

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by  Alistair Helm  |  11th Nov 10, 3:36pm 1289442960

Hugh,

In answer to your request for inventory data our NZ Property Report tracks inventory as a chart from January 2007 thru to October 2010 - details here: http://unconditional.co.nz/blog/nz-property-report-october-2010/

As for the major centres - we track these in our monthly Property Pulse fact sheets showing inventory by month since Jan 2007 - we produce one chart for the inventory for each of the 19 regions around NZ. http://unconditional.co.nz/blog/category/tv3-property-pulse/

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by  Alistair Helm  |  11th Nov 10, 3:52pm 1289443923

Lets try that again - here is the link to the monthly NZ Property report http://unconditional.co.nz/blog/nz-property-report-october-2010. It appears that the interest.co.nz website does not allow more than one hyperlink per comment!

Must speak to Bernard about that!

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by  redheadonist  |  11th Nov 10, 3:07pm 1289441230

" "Also we do not need people leaving for Australia like they are otherwise things will slow down even more"..............oh and how do you stop the exodus? "

increasing the minimum wage, lowering the un-employment rate for those under 25, and a move away from user pays would be a good start.

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by  powerdownkiwi  |  11th Nov 10, 5:15pm 1289448919

An inability to learn is excusable.

A choice to remain ignorant is not.

I thought you were worried about land price, which is not 'affordable housing'.

I can still build for $400 a sq,m, including all services, if it's housing you're on about. Mass-produced, including labour and a margin, say $550.

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by  Gavin Jones  |  11th Nov 10, 3:28pm 1289442506

Wolly / Gummy Bear. Yes Wolly there will always be places that go against the trends. No argument there. I have operated mainly in the Auckland market and in strategic locations both commercially and residentially. All I know is that overall property has been very kind to me although a couple have slapped me around, caused by being in to much of a hurry and not doing the research.

Gummy Bear my point is, it is not a rapidly expanding commodity. You would be amazed how many times I have heard "this time it is different" funny thing is, over at least five boom/bust scenarios it never has been!

 

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by  Gummy Bear Hero  |  11th Nov 10, 4:01pm 1289444496

Gavin : By all means make wealth in the manner that is most connected to your skill set and personal interest . But don't be suckered in by plonkers wielding cliches to gild the lily . I didn't get where I am today , by using hackneyed comments enough to change it's spots from a sinking ship that wasn't built in a day .

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by  Gavin Jones  |  11th Nov 10, 4:13pm 1289445229

I agree Gummy Bear. But I also like trying to encourage younger ones to have a go. A lot of stuff spoken of here is absolute rubbish motivated by fear. That I object to. Rather lets learn from history and make wise decisions. There is one underlying factor that may change things up ahead and that is a Global currency. Many things happening today are setting the stage for that to happen.

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by  Gummy Bear Hero  |  11th Nov 10, 4:28pm 1289446089

Agree entirely that alot of stuff spoken of here is absolute rubbish motivated by fear . Hence my sobriquet for Bernard ( currently on RadioNational with Jim Mora ) is Chicken-Little Hickey . But being a realistic optimist has led me to become as popular as Winston Peter's jock-strap , around here . And whilst the gloomsters are wailing of financial armageddon to come , the Gummy one is still plodding along , merrily booking the profits !

Teach that to the young'uns , Gavin : Think for yourself  and accept personal responsibility for the consequences of your actions .

There would be few currency problems if governments and central bankers stopped farting around with attempting to manipulate  the free market .

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by  Wolly  |  11th Nov 10, 4:26pm 1289446019

I doubt you went and looked at that data Gavin...so here are it is for the last two months section average price marl/kai

 

Sep 2010 $150,000.00 9 213 -14.30 % $1,318,750 $60,156,236 2.19 % Oct 2010 $450,000.00 1 33 200.00 % $450,000 $74,098,132 0.61 %

As you can see...the sale of one 'section'....and the distortion from that....I can promise you there are no 'sections' in the urban area worth anywhere near that sum....it is a country plot of some size to sell for 450k...the whole series of data is a complete sham.

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by  Malarkey  |  11th Nov 10, 5:06pm 1289448403

Many are trying to encourage people to "have a go" with property, but it's because they're financially dependent upon people doing so.

And then there are those who have been crowing since 2003ish about how clever and successful they are for investing in property at the top of a property bubble which is now collapsing, and so are now determined to defend their ludicrous claims, no matter how ridiculous it continues to make them seem to everybody else.

Usually they are the same people in both cases.

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by  Wolly  |  11th Nov 10, 4:33pm 1289446409

The only useful thing that can come from the data is that for the month of October only one 'section' sold in the whole of Marlborough and Kaikoura....staggering indication of the collapse taking place. Sorry about the messy data...best to go back to the link and dig.

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by  Myview  |  11th Nov 10, 5:08pm 1289448516

Please excuse my gramma as im dyslexic and have a little trouble with my wording and i know there are plenty of pretty smart people who like to have a pick.
At what time does push become shove?
If you told a proerty owner 3 years ago they were going to lose 20-30% on there property/properties when they sold they would have spat. Now when needing to sell they blame the market or recession or the government or the Banks never there greed or poor judgement .
Does anyone think about buying smart ?close to reasonable infrastructure, work, schools, or do we move house every 2 years in hope of some capital gain or not, while paying a load of interest?Steps to nowhere idsay.
New Zealander on average are a bit challenged when it comes to investments always left wanting because we don't really want to buy what we can really afford ! but just look at who they have for mentors not a tall poppy in sight.
Sorry for the fumbling regards .

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by  Gummy Bear Hero  |  11th Nov 10, 5:24pm 1289449450

Welcome aboard , dude . No need to excuse your gramma ....... I'm sure that she is a lovely lady .

And your point is well made , about the irresponsibility of Bernard Hickey's prediction that house prices would fall 30 % . And they didn't ! Some people look up to Bernard , and not just because he's 6 ft 5" . And he failed them .

Excellent post , Myview

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by  Malarkey  |  11th Nov 10, 5:35pm 1289450147

We all knew house prices were going to fall because it's all they could do.

Was BH wrong to call 30%?

Maybe.

But they are still falling, and will continue to do so for some time yet, despite the statistical contortions of the RE sleaze.

Maybe 30% is too conservative.

BTW, not everyone who happens to agree with some or much of BH's financial viewpoint "looks up to him".

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by  Myview  |  11th Nov 10, 6:05pm 1289451943

Never met my grams or granfaza both dead before i turned up! Euro working class! Workers Did not live long.
I have a questions to the financially savvy , who post here, not quite sure which ones they are as yet !
Who in the last 5 years has helped , advised in a positive way any persons or person without financial reward. Not many I would guess. Easy to say what should have been done but do nothing to ensure it happens.

Investments for the future! they say. Make a good tui add yea right
Kiwi saver is what? no better than a poorly run investment company that will get swallowed up by the white collar thieves of the future. I too can say I have made a profit of let's say 7.5% sound great . 7.5% of nothing is still nothing Try and get that out when you need it or want it. Fees fees and more b.s

Who tells there kids that if they have nothing it's ok ?no one but they let it happen anyway , more pc b.s
Off to the doctors for some anti depressants required to make them feel that they did ok and you can't always be a winner ! Wrong they need to be told that's a Fail.

All the figures and percentages quoted are history can't change that, what we can change is the sh.t future
More ramblings ,have nothing better to do when looking after a terminally I'll father.

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by  Wolly  |  11th Nov 10, 7:11pm 1289455898

You are not alone in many ways Myview...none of us know any financially savvy characters...even Barry Obama.

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by  Gummy Bear Hero  |  11th Nov 10, 7:30pm 1289457058

Not even Bolly , Wolly ?

And Timmy too ! Did Barry carry work schemes too far in giving the barely living wheel-chair boy from South Park a new lark as Secretary of the Treasury ?

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by  Wolly  |  11th Nov 10, 7:34pm 1289457291

Off the thread but a link for Gummy.... http://www.marketoracle.co.uk/Article24162.html

 "... investors looking to gain in the long term should be prepared for a correction because of a perceived lull in Chinese demand.( for copper)"

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by  Gummy Bear Hero  |  11th Nov 10, 7:56pm 1289458578

Love the trend of the line for copper stock-piles ! Concluding from that, more up than down ahead for the price .

Meebee Bolly should start to stock-pile commodities , on NZ's behalf , instead of pissing around with the dollar . Wasn't Gordon Brown the UK Minister of Finance who bailed on England's gold stock , minutes before the gold boom began . Reckon Bolly can out-do that prat , Brown ?

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by  Wolly  |  11th Nov 10, 8:11pm 1289459488

It's so much a repeat of the mart conditions just before the GFC!  dangerous stuff Gummy.

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by  Myview  |  11th Nov 10, 8:07pm 1289459229

Ah the master himself.
Im honored!
Whats the water temp like down there? Any cod.
Or are you in the hills.

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by  Wolly  |  11th Nov 10, 8:14pm 1289459663

The Cod are all fished out.....best place for them is way down Fiordland. I'm in the hills....and they are drying up fast. The fire warnings will be lifted very soon is my guess.

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by  Myview  |  11th Nov 10, 8:40pm 1289461223

You think you will have rain? I say Not for at lease 5months would be my guess.
Then your Black Orpingtons and New Holland Blues will have to put there duck caps on and start sliding down those hills. Regards

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by  Ricardo  |  11th Nov 10, 6:14pm 1289452451

30% was a good prediction, it would have happended already if it wasn't for the Govt Guarantee...but I do have one prediction..John Key and his mates want a better performing sharemarket, think the bulging property marketing being replaced by a bulging burping sharemarket...so wait until this Financial Markets Authority is established and then JK will hit PI's with some capital gain taxes..that way the sheep will move over to the sharemarket and create those jobs..wait and see chaps

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by  Wolly  |  11th Nov 10, 7:23pm 1289456586

Nice thought Ricardo but the current policy is, protecting the banks and using the slow theft of value of the currency to work down the real cost of housing....3 to 5% pa and it will continue for at least the next 7 years at least. If the piigs and washington QE scam explode you can expect rates to shoot up and the blood to flow in the balance sheets. The RBNZ will be measuring the banks to see which ones will be first to go under (in secret).

Already the property values in rural and coastal Noddy have fallen between over 50% and at least 10%. It just depends on location. BH didn't count on the govt and RBNZ doing the ponzi two step for the banks.

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by  Matt in Auck  |  11th Nov 10, 7:30pm 1289457013

28/29 yr old was talking up the central auckland market a few days ago, I had reported it very sluggish indeed from my market intelligence plus attendance at a few auctions

I guess these stats - an 8% drop in one month for central Auckland - confirm my observations and analysis

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by  28_29 yr old  |  11th Nov 10, 7:56pm 1289458578

Hi MIA

this is actually what I said :

"I wouldn't be looking to buy a rental in the affluent areas of Remuera etc as these are priced at a premium (I'm sure there are investors in these areas) as you and every other young professional family wants to live there or nearby."

I wasn't talking up Remuera, just stating it's a popular area and reiterating other people's points that the Auckland market is different from the rest of NZ. Plus I'm talking rentals and you are looking for a family home. A big difference

As the ace predictor of house prices Matt, I vote you for getting the crystal ball award :) where do you see 2011. My prediction is that you will still be looking for a place in a year's time. As someone said last year:     " you've got paralysis by analysis"

There you go BH/Master Jedi I helped crack 100 comments

Where are you 'The Man"?

Regards

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by  ex agent  |  11th Nov 10, 8:29pm 1289460563

I suspect the Man if he in fact exists is under severe financial stress as he always went on about how many rentals he had in Christchurch and also that he was still buying up until just before the quake. He is living proof that property is not always guaranteed and that you should not put all your eggs in one basket or one location in fact. New Zealanders put too much faith in property and now are paying for that especially those who have too much debt involved in it which is the majority of investors by my reckoning and experience.

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by  Matt in Auck  |  11th Nov 10, 8:44pm 1289461443

LOL!

You may say I've got "paralysis by analysis" - probably true - but I'd rather know the facts and be well informed rather than rely on ponzi spruiker talk and make emotive decisions. If I hadn't been so analytical then I would have believed the dickhead spruikers who were trying to convince me I should buy back in 2007, with a 5% deposit, and because "prices always go up". A number of people were seriously saying to me in 2007 that prices would keep going up 10-15% per year. Fortunately I wasn't gullible. 

this may sound arrogant, and it probably is, but I have been consistently more accurate over the past 2 years in my predictions than the so-called experts. I put it down to working intensively in the development sector and meeting people day in day out who know the market inside out. Plus a lot of reading and knowledge of history (working in Japan helped, hearing first hand about bubble housing markets)

As I've said before, we'll see minor price reductions - anywhere between 2% to 4% - over the coming year. My view is that it will be quite a good time to buy over the next 12 months as an owner occupier (but not for investment), thats why I am keeping an eye open. Because so few investors are now in the market, I think First home buyers have a chance. That's great and how it should be.   

Do you disagree 28/29 year old? And if so, why?

 

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by  28_29 yr old  |  11th Nov 10, 9:49pm 1289465378

Hi Matt

Yes you sound like you've done your home work and research-good for you. At the end of the day we aren't too dissimilar. I also do my numbers and if they stack up I take the plunge.

The problem with your prediction for a good time to buy for 1st home buyer is one of credit/deposit. I don't know Auckland central but the median price is $530000, so a 20% deposit is >100K.For a bigger home 600-750K so up to $150K. I don't know anyone (apart from the baby boomers on interest.co.nz :) ) with that sought of deposit lying around. Sounds like you been saving like mad since 2007...good on you.

I agree with your prediction of 2-4% drop; but I add: followed by a 2-4% rise. It will fluctuate and bouce around a bit. There will be no 'boom' again for 5-10 years. But I would say after 2  years prices will SLOWLY creep up again as the economy recovers. But Matt, please look at the big picture. Over the life of a 15-20 year mortgage a few dips and troughs are small fries to the ultimate goal of mortgage free properties before I'm 50.

Keep up your posts I respect and enjoy your input.

And to all the other <30s out there don't be scared off buying, I know too many people who have pi$$ed up there 20's and have nothing but lame excuses and party memories to show for it. I got a modest house in 2006 paid it off by 2009 with hard work and a bit of risk.

Time for ex-agent to chirp in with his usual "you must rocks for brains" line now  :)

Regards

 

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by  LloydM1  |  12th Nov 10, 3:55am 1289487311

Interestingly the above has some similarity to myself, as perhaps I may look at buying should I return back to NZ sometime. Even with a healthy deposit what I object to is the artificial porking of the prices to save banks (and ultimately the NZ economy I guess). Why would you want to pay more than a house is worth by tens of thousands, and end up paying the bank huge amounts of interest over, as you say a 15-20 year period on a loan amount that could still be 500k? It simply makes no sense at all to me. The assumption that there will be housing price recovery to make your potential purchase decision more palatable, is understandable but clearly risky. Add in the variable of interest rates, and possible job insecurity, then a decision to accept to pay a price which amounts to a rip off becomes, in my opinion, madness. People have to make their own decision based on their circumstances, but for me, I just will not part with either my cash or take on debt until the prices are a genuine realistic level to me. If that never happens, then so be it. I’ll stay abroad and just keep saving away….investment tips welcome.

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by  Simon  |  12th Nov 10, 4:49am 1289490574

Smart man I like your way of thinking. Contrary to what most people in NZ will tell you, most really wealthy investors have property at a very small portion of there investment portfolio, and they constantly rebalance things to get best return on there dollar for current environment.

Assets are things that produce an income, you can value an asset based on how much income it brings in, that's why rental yeilds are in my opinion the best way to value property and decide where it should be or where equlibiums will pull towards with overshoots on either side.

Your best bet for investing is to look for assets that are undervalued in real terms, i.e in how much income they can bring in versus price. Price to earnings multipliers are used in stocks, which is basically the same as yeilds in property. You will only ever see P/E multipliers go way above normal levels for a stock when its expected its earning will increase dramatically in the future to catch up (mining companies are great for this). If this is the case examine the assumption/logic behind why earnings are expected to grow, and if it doesnt stack up steer clear.

For property, the price to earnings multiplier is still very high (low rental yeilds), yet rental growth is not expected to grow rapidly, so its a no brainer at present levels, steer clear. Unfortunately property is owned by non-investors/speculators also, who see values rise get excited/worried they will miss out, so try chase it, and we get bubbles. Like wise, when values fall they think if they buy a house its value will then head lower so people stop buying, which forces prices lower still etc i.e whats happening now. This is dangerous for house prices and it creates a feedback loop as powerfull on the way down for house prices as it was on the way up.

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by  LloydM1  |  12th Nov 10, 6:14am 1289495698

Simon, thanks for the reply. Actually I have been investing for a while in various capacities, however the only actual investment I have currently is a property in NZ. I sold out of equities and FX etc and currenty just have cash in banks, with some currency diversity. I should have elaborated my question to read " Investment tips appreciated in markets which are not rigged, and not difficult to get real information on, and then not too difficult to manage. Somewhat a toungue in cheek comment initially, but I am sure that there are some better uses of funds than having it sitting around in an Ozzie owned bank. Thanks again for the reply.

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by  Ptolemy  |  12th Nov 10, 11:18am 1289513937

For what its worth (i.e. investment advice on a blog) I would be investing in companies that are going to do well out of future inflation - especially commodity prodiucing companies. I have been investing small cap gold miners, oil producers, uranium, energy producers, lithium. Energy companies (or miners of energy commodities) will be solid if not spectacular performers over the next decade imo. There will be ups and downs though. Like you, I have a good chunk of my portfolio in cash at the moment. No property though.

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by  ex agent  |  12th Nov 10, 8:41am 1289504489

Others like me have been saying for a few months that you have to be a mug to be buying now especially for investment and especially if you are borrowing for investment. The analysts in the stuff.co.nz article on housing this morning are not beating around the bush. It is horrible for housing at present and it is going to continue into the new year at least. Renting and watching the prices come down is a very sensible option at present. When you eventually buy you will get more bang for your buck and you will borrow less.What is wrong with that.

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by  Matt in Auck  |  12th Nov 10, 9:24pm 1289550281

gee shucks thanks mate, you're not too bad for a property dude:)

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by  Simon  |  11th Nov 10, 7:37pm 1289457470

Why only go back to 2007 in your graphs? Nolong term trend over this unusual time period can be made sense of.  

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by  Alen1  |  11th Nov 10, 8:38pm 1289461089

Bernard, this stratified price index you are using I believe wasn’t used in 2007, otherwise price at the pick might have been lower? Point is, you don’t necessary compare apples with apples and prices are maybe at same levels as  on 2007 peak. Correct me if I am wrong. 

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by  Alen1  |  11th Nov 10, 8:45pm 1289461531

For those who can't recall:

"I’m sticking to that 30% price fall forecast because the global economic catastrophe of the last 6 months is only now starting to lap at our shores and banks will be forced by New Zealand’s foreign lenders to curb most new lending" ( BH  2009) 

Tsunami is coming

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by  Myview  |  11th Nov 10, 9:11pm 1289463091

Wait till we see the Tsunami of punters wanting to cash there worthless gold bonds in.
When I hear the shop assistant in a Kaeo 4 square talking about buying gold I get flash backs of Gold Corp but on a global scale.
Best find a comfortable spot high up to watch the fall out.
Water will be the next Gold but no ones worked that one out yet

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by  middleman1  |  11th Nov 10, 9:23pm 1289463817

Another reason to take ChCh out of the data - artificial one off demand over the next few years that will cushion the fall that would otherwise have occured:

living under dreadful conditions in a severly quake damaged house that will be a rebuild in two or three years time once they get to our place in the queue. Then the Insurance company works out how much the rebuild will cost . Next decision ? ............ right lets sit here patiently living in squalor until they get to us ... err , how about instead  ...........  hello friendly insurance company , what if I can find a pre owned house for the same or less than what you'd have spent on rebuilding mine ?. Guess what the insurer will think of that? ......... no hassle, pay them a cheque, close the file one less to worry about, or insist on grinding their way through the whole rebuild rigmarole. Difficult decision eh .

Take the money and buy somewhere else is what people will do if they can, even if it means a bit of a downgrade or borrow a bit more. They'd still have their old section which would have some value unless it had been seriously damaged.    

The numbers will work even better as time goes by because once surplus capacity in the building industry is soaked up by the ChCh disaster we'll have demand push inflation in building prices

Times this little story by a few thousand and it'd affect house price trends in the garden city       

     

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by  Myview  |  11th Nov 10, 9:36pm 1289464610

Take the money from who and buy what ,when they relies that the money that get won't buy them squat once they have to pay back the banks, that's real negative gearing for you , going backwards at a rate that only speeds up the further you go down the hole to china. Say hello to Australia as you go past.
Watch and see how they get done over and over.

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by  DC  |  12th Nov 10, 4:38am 1289489928

So house prices are going backwards due to a variety of reasons. Uncertainty, lending restrictions, tax....  What can NZ expect further? A slow and very gradual decline in property values I reckon! 

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by  amalgam  |  12th Nov 10, 6:28am 1289496503

As usual we see here the undercover real estate agents and mortgage brokers trying to defy reality and spin the facts into positive news for property, while, as Malarkey said, the amateur investor types who have been proudly talking up their choices desperately attempt to defend their choices now that they have turned to custard. Sad.

Property can be a good investment when the time is right, but slobberingly following the baaaing mob and buying grotesquely overpriced property via finance you cannot afford during an obvious bubble period is embarrassingly stupid. But at least have the nads to admit the error of your ways, instead of moronically trying to defend them.

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by  andyh  |  12th Nov 10, 6:48am 1289497735

Good old 'Summer of Misery' for the housing market headlines:

http://www.stuff.co.nz/business/industries/4336845/Housing-market-summe…

Least some of our journos are starting to twig.

Were is that spruiking dingbat Olly when you need him?

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by  powerdownkiwi  |  12th Nov 10, 8:02am 1289502177

It's Friday - he'll be along about three...

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by  BigDaddy  |  12th Nov 10, 7:37am 1289500677

Be patient little ones  

I am told that Olly's comming very shortly- and he will sort out all the disinformation that the whingers are labouring under as evident on this site.

By the way he is not a "spruiker". If you are going to use big words at least understand what they mean.

Olly does not sell or promote other peoples property.  It makes no differnce to him if sales or prices are up, down or sideways.

He is long past the amateur level of having a melt down every time there is a hiccup in the market..

He sees the current situation  as a huge opportunity which only come a few times in a lifetime.

.

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by  andyh  |  12th Nov 10, 7:55am 1289501749

 I will make you a deal - I won't use big words if you learn to spell.

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by  Murray  |  12th Nov 10, 10:01am 1289509264
by andyh | 12 Nov 10, 6:48am New

"Were is that spruiking dingbat Olly when you need him?"

;)

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by  Number 6  |  12th Nov 10, 8:41am 1289504474

Yes, BigDaddy. I'm on the edge of my seat, waiting to see what his advice is this this time! He was wrong in 2007, when he came out with the following. Why on earth would he be right now, with whatever he says?

Property developer Olly Newland, who gained and lost a fortune ..believes New Zealand is about to repeat the experience..."All around I see people repeating the mistakes of the '80s," he wrote .... "People seem simply not to want to learn...Once again ...the sharemarket, not to mention the property market, has become a gambling den – infested by hucksters and get-rich quick spruikers who want to part us from our money by selling false dreams and impossible promises."

http://www.stuff.co.nz/business/28013

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by  Muppet King  |  12th Nov 10, 9:14am 1289506441

Of course it matters to him! How is he supposed to make money if it is going down and nobody is interested in property? Do you think he would get more consultations if its going down. You are truly gullible, WAKE UP.

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by  Myview  |  12th Nov 10, 9:50am 1289508654

What I hope to see is the greedy land bankers who tie up any usable land in commercially viable locations and the councils who support there back room dealings as well as the bid 4 aussie banks need a poke in the eye with a broken broom handle or better be force to sell at market rates not set by the real estate agents!
Small businesses can't buy the land at the current pre so called recession prices and are forced to pay the rents that dont work for the average business model.
A huge re alignment is needed in the commercial as well as residential sector is what we will need before businesses who employ most people which are the small ones can get going again.
Just try and find somewhere to park a piece of machinery while you have a sleep and see what it costs!
Just what I see.

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by  PhilBest  |  12th Nov 10, 3:44pm 1289529889

The more people who wake up to what you said there, the better.

By the way, the famous DrHousingBubble blog points out that in California, the Real Estate market was siezed up volume wise for 2 years before the PRICE crash came - 30% in 1 year.

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by  bob  |  12th Nov 10, 10:02am 1289509336

BH writes above:

"Prices in Auckland fell 3.7% in the month to be down 2.3% on year-ago levels, making it the first month since June 2009 in which Auckland has recorded annual price declines."

The REINZ commentary above goes:

"After climbing back to $450,000 in September, the Auckland median price rose again last month to $460,000, which is $5,000 and just over one per cent up on the median price in October a year ago."

The REINZ website figures match the REINZ commentary - Oct 2009 $355k, Sept 2010 $450k, October 2010 $460k.

Just curious - how does a 2.2% increase become a 3.7% decrease?  I've tried manipulating the figures to do this but can't make it work.  How do you do it?

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by  Murray  |  12th Nov 10, 10:58am 1289512724

bob - BH is once again mixing up the REINZ stratified index with the REINZ median. I did point this out to him last month.

The stratified index for Auckland was:

Oct 2009 = $480,510

Sep 2010 = $487,800

Oct 2010 = $469,680

This is where the decreases are being quoted from. It's very convenient use of data!

Last months figure of $487,800 was up 2.7% for the month & up 2.4% for the year, but for some reason that didn't get quoted!.....

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by  Gummy Bear Hero  |  12th Nov 10, 3:50pm 1289530251

5 hours later , and still no rebuttal from Bernard . I reckon you got him bang-to-rights , Murray .

Well done !

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by  Alen1  |  13th Nov 10, 10:12am 1289596378

Still nothing.... Bernard?

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by  Lucky Basket  |  13th Nov 10, 10:32am 1289597563

Who'd want to be mortgaged to the hilt and dependent upon rental income in this market and economy?

You'd never sleep at night for knowing the agony to come. And you'd feel mighty silly thinking about all the times until recently you smugly dismissed people who weren't stupid enough to get themselves into the same situation.

Phew!

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by  Alen1  |  12th Nov 10, 6:30pm 1289539850

Yes, amazing how  people loose credibility, treachery RE agents, property spruikers  and other low lives  

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by  Chairman Moa  |  12th Nov 10, 11:16am 1289513799

interest.co.nz must be a subsidary of Fox News ltd - known for its selective news reporting.  Also I am surpsrise that it hasn't anything on the gold investment "PONZI" scheme.

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by  Alen1  |  12th Nov 10, 9:31pm 1289550719

They can learn a lot from BH when it comes to spinning data  

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by  President of P…  |  12th Nov 10, 11:04pm 1289556245

Ain't that the truth...

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by  BigDaddy  |  14th Nov 10, 11:07am 1289686021

There are those who do and there are those who don't  and just complain.

For all you lot who don't, eat your heart out:

 



A 1950s weatherboard home in the posh Auckland suburb of Remuera sold for $6.348m at auction this week, one of the biggest residential auction prices recorded.



Despite a depressed national real estate market, the auction room was packed with more than 100 people on Wednesday when the Portland Rd house and 8562sq m land went under the hammer.



Bidding started at $3.5m and increased by $100,000 then $50,000 lots. Two of the six bidders took part by phone, one calling from Singapore.



The single-storey four-bedroom home had been owned by the Caughey family for more than 50 years.



The sale was one of the highest prices at auction in the history of Bayleys, said spokesman Scott Cordes.





Read the rest of the article here: 

http://www.nzherald.co.nz/property/news/article.cfm?c_id=8&objectid=106…

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by  Nicholas Arrand  |  14th Nov 10, 11:18am 1289686735

And what would it have sold for 3 years ago, BigDaddy? $10 mio? Who knows, we can never prove a negative. But if that  recent apartment in Takapuna is any guide ( what was it? $12 mio knocked out at $3.5 mio) then this certainly is what the auctioneer in the article described as a 'depressed national real estate market'

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by  pwilkie  |  14th Nov 10, 2:52pm 1289699564

cv---6680000---sold for 6348000---332000 less = -5.5%--

http://www.bayleys.co.nz/4100999

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by  Matt in Auck  |  14th Nov 10, 6:46pm 1289713602

so that just shows up "big Daddy's" point as rather meaningless -  a one off expensive house price sale that actually goes for 5% less than CV

If there is ANY significance in this example it is that property is still down relative to peak, lots of properties going for 5-10% less than their 2008 CVs. A Mate just sold for 10% less than peak, he had to accept the price as they want to move to a different school zone

thanks for another example of property weakness Big Daddy!!!!! 

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by  Gummy Bear Hero  |  14th Nov 10, 12:25pm 1289690718

O.N.  - : " The pointy heads in Treasurey who advised Bill English to remove building depreciation from investment property in the 2010 Budget should be taken out and be given  regular beatings with leather straps for their stupidity as the flow-on effects come back to bite them ! "

Hear hear ! Not only has Goodman PT had a $ 100 million tax hit , Kiwi Income PT has been clobbered by $ 144 million . And even hotel chain Millennium Copthorne has a $ 20 million tax slug to chew on . Was it these guys you wanted to hammer , Mr English ?

The handful of properties that I've ever owned , all demonstrated an ability to depreciate ........... Rather quickly to boot . You really are a blithering fool , Bill . You fell into the same tar pit that Cullen did before ya , the effect of unforeseen consequences !

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by  Gummy Bear Hero  |  14th Nov 10, 2:06pm 1289696761

Hmmmm ! That was meant to be in the Ollie Newland thread . Geez   I'm a thicko , before my first gallon of shiraz , for the day .

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by  Wolly  |  14th Nov 10, 6:30pm 1289712657

But gee Gummy, depreciation is just another type of benefit....in this case going to business!

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