Two more banks cut their two year rates as the home loan market struggles to find the volumes it needs from a quiet housing market. Borrowers have the advantage

The mortgage market is stirring.

Low house sale volume is making this a tougher market for banks.

Today, two banks announced reductions in their key two-year fixed rates.

Kiwibank has reduced its two-year 'special' by -14 bps to 4.65%.

This is now a market-leading carded rate, lower that all its rivals (except the HSBC Premier rate) for that term.

Kiwibank 'specials' only require a "minimum 20% equity" to qualify, unlike some others who require you to take other products like cards or insurance.

The rate applies to Welcome Home Loan clients as well who meet that minimum equity. Otherwise all customers for a two year fixed rate will be charged 5.15%, itself a -14 bps reduction.

This new rate also applies to AMP Home Loan customers.

In addition, SBS Bank has announced a -6 bps reduction in its two-year fixed rate to 4.79%.

For both banks, each new rate will become effective on Monday, August 28, 2017.

Ten days ago, both ANZ and Westpac both reduced their two-year fixed rates.

Two year wholesale swap rates have essentially been flat over the past month. So all these recent reductions will involve margin tightening by banks to win or retain market share - in a thinning market.

The spring selling season in the housing market won't really start in earnest for three to five weeks yet and more banks will likely enter the fray then. But in between we have an election, which may be adding the the current dampening effect. A hung election result, potentially through to the Return of Writ day in mid October may extend this period of uncertainty if Winston Peters holds the balance of power at that time.

See all banks' carded, or advertised, home loan interest rates here.

Here is a snapshot of the fixed-term rates on offer from the key retail banks.

below 80% LVR 6 mths  1 yr  18 mth  2 yrs   3 yrs  4 yrs  5 yrs 
  % % % % % % %
4.99 4.55 5.15 4.75 5.59 5.89 6.09
ASB 4.95 4.45 4.70 4.79 5.09 5.59 5.79
5.35 4.59 5.05 4.79 5.09 5.89 6.09
Kiwibank 4.99 4.45   4.65 5.09 5.75 5.99
Westpac 5.25 4.59 5.15 4.79 5.09 5.89 5.59
               
4.80 4.59 4.75 4.79 5.09 5.55 5.75
HSBC 4.85 4.09 4.09 4.29 4.89 5.29 5.59
HSBC 4.99 4.59 4.85 4.79 5.25 5.49 5.85
4.85 4.55 4.75 4.79 4.99 5.65 5.79

In addition to the above table, BNZ has a fixed seven year rate which is 6.15%.

And TSB Bank still has a ten year fixed rate of 6.20%.

Update: An earlier version of the above table had the Co-operative Bank 2 year rate in error. It is corrected now at 4.79%.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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108 Comments

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Why are the rates so high? There are major banks out there that offer 4.29% and 4.39% for 2-year fixed but you have to go through a broker. Why are they not reported??

It is weird how you can haggle for lower rates like you are in some Cairo street bazaar. I guess it makes if fun although it tends to give the investor an advantage.

Quite right the banks have been making offers much lower than this. I'm guessing they're just trying to drum up business by adjusting rates.

Yes and you should always be prepared to shop around for better mortgage rate, play one bank off against the other to negotiate the rates down. This is quite a common practice in the UK, I think I shocked a few bank managers when pushed the banks here to give better rates.

Anybody got a ball park of cost of switching your mortgage to another bank, that is assuming there is no penalty for leaving your present bank so the costs would be mainly getting one mortgage discharged & another drawn up and registered which suppose would involve solicitors.

$1,000 for a straight forward change of bank e.g. mum and dad owner of 1 property change banks, this includes lawyers fees and costs e.g. discharging old mortgage and registering new one.

Hey Zachary, There's an auction at 3:00pm tomorrow at 15 Cotter Ave (DGZ). It's a good opportunity to gauge what the market is doing in our neck of the woods. I am thinking it will go for at least $2.8M and I'm expecting 5-6 groups of active bidders ^^ http://www.trademe.co.nz/Browse/Listing.aspx?id=1383688101

Yes DGZ, it would be interesting to go to this auction and check out the bidders and what the bidding goes like. I know a lot of readers are kind of bored with this news but nevertheless it does give some idea concerning the general health of the higher end market. Up until now there has been no trouble selling this type of home and I suspect it will sell tomorrow for very close to 3M.

I just went to the open home this afternoon. The house is presented meticulously and I am now thinking it will go for over $3M. The agent expects it to sell tomorrow - we will see ^^

Writing to yourself again Zac? You know what that's called, especially when you answer yourself! :) Wondering how many of these you own? - http://nzh.tw/11908663
Am betting the odds are pretty high. I saw the one you were renting in mission bay.

Blue meanie, my rental properties are better insulated and easier to heat than my own house. It's not unusual to see me wandering around the house in a woolen hat, sheepskin boots and a fleece jacket with two jumpers underneath in the depth of winter. Madness, I know, but I have always lived this way in Auckland, it's like part of my culture. I even boil jugs of water to do the washing up as the hot water runs out if more than two people have a shower in the morning. My tenant a few doors down has continuous gas heated hot water.
Dampness is always going to be a problem in the older houses of Auckland due to the weather conditions. I have to exit mould the walls twice a year but never seem to get sick. I didn't take a day off work for eight years until I crashed my motorbike.
DGZ and me are totally different people. He's a little more upmarket than me I suspect.

I see in that article you linked a statement about how landlords provide cost effective houses for rent that are cheaper than buying them. A pretty good service we provide I reckon.

I also see in that article comments from a single mum of 25 who says houses are too expensive in Invercargill yet a search on TraedMe reveals houses for less than 130K which would be about $100 a week in interest. It seems crazy to rent for $240 a week then doesn't it? Poor life choices that people make are not my problem.

You're awesome.

Wow, further searching in Invercargill reveals that you can buy houses for 75K. That's only $64 a week in interest. That lady could be investing $200 a week in her own home. The government should make it easier for people like this to buy a home while on a benefit. Most of the houses only need a bit of painting.

I am not 'writing' to myself blue meanie. Zachary and I are two individuals and we are not RE agents either. We live in different suburbs (Epsom & Remuera) but I believe both are within the boundary of Auckland Boys Grammar and Epsom Girls Grammar.

Blue Meanie, less than a month to find out if National can govern on its own as per your bet, I bet they won't have a clear majority back in January

Hey Double-GZ, and others that might be interested, I went to that auction. A lot of people there, mostly observers, however there were several bidders and some potential phone bidders. Eventually after some long, long negotiations the house sold for 2.922M with some spirited final bidding which is about 36% above CV. A pretty good result I'd say. It stuck for ages at 2.820M which I thought the vendor should sell at as that was 30% above CV, a fair price, but it just goes to show a bit of stubbornness fetched them an extra hundy. Whew, time for a beer after that!
This is the second "litmus test" auction attended - verdict = market is still warm.

You're a legend Zach! I was going to drive past later today to see if it is sold but now you've done the driving for me haha! A bit of stubbornness fetched them an extra hundy OMG!! What a fabulous sale in my neck of the woods....so so happy ^^ Thanks for the litmus test I am now quite at ease about the value of my own family home not that far from this property but on the Northern Slopes ^^ THANK YOU AGAIN ZACH *Phew*~

What a joyous occasion, another house sold to a foreigner! Accelerating the mass exodus of highly skilled labour, teachers, doctors, lawyers and engineers that are fleeing Auckland so they can have a chance of home ownership.

Well there are several reasons why mortgage rates are so high here, one major one is lack of competition. We've only a handful of banks and most of those are overseas lenders and consider us high risk hence the high mortgage rates. But the good news is they are reducing and are likely to stay that way for a good few years.

If you take a look at the mortgage rates from some where like the UK for instance you'll see that their rates are far lower and with far more options available.

And even HSBC is offering FTB's a 1.84% rate for a two year fixed in the UK. Now can you see why the Brits aren't that interested in moving to NZ.

https://www.moneysupermarket.com/mortgages/results/#?goal=1&property=170...

I'd rather not be a depositor in a world where mortgage rates are 1.84%. Let's not forget there are two sides to the coin.

As a net debt nation, local banks will always need to fight harder to attract local deposits, which are a requirement of bank registration and liquidity. That cost does need to get passed on.

In the last immigration figures I thought they said the number of immigrants from the U.K. up 50% over past year.
I have just got back from UK and people are certainly starting to question what the hell is going on over there after the recent election. The U.K. has to go through quite a bit of pain before they come out the other side. Might take anything from 2 to 10 years to do that. Very difficult to predict right now.

Definitely, if you're prepared to haggle, there's often a silver lining for the time and effort.

Same with deposit rates: I find I can often do better then the listed "rack" rates.

If you don't want to haggle, using a (mortgage) broker can be a good option. But take your time to find who's a really good, professional person to engage. And then keep using the same person - and he/she should look after you well (which includes them being pro-active when they come across especially good rates).

I should add to the above, don't forget to haggle over the commission with real estate agents.

In a soft market (as at present) their incomes will be down, so they'll be pleased to get new listings - especially for relatively well-located, easy-to-sell properties.

And haggle over the advertising packages etc, as well. Just keep on haggling, progressively trimming back the dollars, until you're completely satisfied you've got the best deal. Further, don't let any agent lock you into a time period for the listing - make it clear that if they don't perform you'll cancel the contract with them. (They should be expected to work hard, competently and ethically for their commission.)

Alternatively, have a go at selling yourself. It's usually a bit more work - but not impossible. In fact, you might well end up selling to a neighbour - or someone living in the same suburb.

On the average Auckland house, you could save yourself $25,000 or so through not having to pay an agent commission.

Tothepoint.
Personally don't think it is great advice advising people to sell their homes themselves.
Yes some real estate agents are not that flash, but providing you choose one that is a good negotiator then the commission paid is normally returned to you in the price.
Private buyers normally price in the fact that you are saving commission and offer you less anyway.
Private sellers always state that they have saved so much by selling privately but I can tell you that they have generally undersold their property by not creating the comletition.

Fair enough points, The Man 2,

But selling yourself can be a good option if you know the market, think you have reasonable negotiation skills/experience, have the time available to meet with prospective buyers and are generally confident about yourself.

An advantage is that you're completely in control of the process yourself which, for me personally, is an important factor.

I hear of plenty of people who have been dissatisfied with their real estate agent. Thus, I wouldn't ignore other selling options. Certainly, we can't assume that all agents all good negotiators - or even ethical/law-abiding in their dealings. (The REAA does not go short of complaints.)

But if one has no business/property experience, then using a competent/honest agent may be the best solution, for sure.

I'm not sure about other parts of Auckland but in DGZ if you don't use a RE agent you probably stand to lose out 500k to over $1M on your property as you disconnect yourself from the international organisations such as Juwai and Hougarden.

Said like an RE.

RE's are interested in a quick sale. What do they care if they get even $200k more, when it takes them twice as long to do so.

Said like an RE.
That is because I am not a RE and I don't know how to pretend I am not an RE LOL. Everyone here knows that I have a Mon-Fri IT job in the city and I commute using PT on a daily basis.

Everyone here knows you say that.

Of course, some may assume that an IT department in an RE firm, is still, for want of a better category, an RE

Hang on minute DGZ , are you getting confused with your Zachary persona. Didn't he use to claim that he worked in IT until a number of us queried him on the subject and found that his knowledge of working in a technology company or even in a support role was totally obsolete so he couldn't possibly work in IT.

First time I've heard you mention that you also work in IT?? I thought you were either retired or a full time Landlord with all your rentals.

It would be good to have a section on this website where commenters bios could be referenced then we wouldn't have to repeat these comments over and over. Both DGZ and I are in IT. I come from a hardware background, originally working on typewriters in the pre computer age and just sort of evolved with the computers. Now I am a universal senior support engineer working on everything from someone's MacBook up to fibre attached storage arrays. Work on the whole spectrum of business hardware and OS deployment and maintenance and get support from product specialists when it gets too tricky. One week I will be building virtual servers and the next I maybe filling in for a desktop engineer in another company. It is very varied and good fun playing with computers for a living. I don't have much ambition to improve my skills as I am getting old but I am very valuable as I can be deployed in a number of roles.

As for real estate obviously DGZ, THE MAN 2, Yvil, myself and others have a keen interest. We want to see stability in the market and moderate capital gain.

I would actually like to comment about other things more but am on strict instructions to try and stay on the topic of housing and not be too controversial.

Hey Zachary, I have 2x sales to report. On Thursday 24/08 there were 2x Bayleys auctions in my neck of the woods and both sold under the hammer! I drove around yesterday and saw the sold signs, and quickly rang my contact to get the sold prices.
(1) 32 Orakei Rd - Sold $2,465,000 (CV $1,940,000)
https://www.bayleys.co.nz/1751204
(2) 260 Victoria Ave - Sold $4,500,000 (CV $3,700,000)
https://www.bayleys.co.nz/1751185

To be honest the market doesn't look all doom and gloom like what's reported by the likes of CJ099, RichMuhlak, NorthernLights etc. Good houses in good locations are still being snapped up like hot cakes even if they are multi-million pads.

It certainly isn't all doom and gloom DGZ. I am particularly interested in this house as it is an entry level standalone three bedroom in the DGZ which is more my area of interest.
http://www.trademe.co.nz/property/residential-property-for-sale/auction-...
Greenlane only has eight listing currently which is remarkably low.

OMG wow this looks really nice Zachary! I think it will go for around $2M or more if it had 2 bathrooms. I wouldn't call it entry level though I think it is more for a professional couple wanting to have a small family in a great school zone ^^

Keep telling yourself DGZ/Zachary when we get the next property report on Auckland's decline sales and prices.
Have you not noticed that the Auckland property listings are starting to pile up again on TradeMe.

It's sale volumes that keep prices high not one or two sales in an area. You'll start to understand this more as we move in to next year when you can't hide behind YOY data anymore.

Is it ethically OK for your contact at your firm Bayleys to release this info if it's not yet a matter of public record?

Add this to the accidental landlording information you released previously and you've probably either revealed your bio or your close relative.

My firm Bayleys? LOL you're a joke. Auction results are public information once the hammer is down. Talk about stoopidity.

Just a coincidence eh that both these are from Bayleys, as was the accidental landlord address you posted previously? I'll believe you while thousands wouldn't.

Nahhh... Still don't believe you Zachary/DGZ.

You truly have revealed yourselves to be an old time Boomer with to quote your comment Zachary; 'I come from a hardware background, originally working on typewriters in the pre computer age'! Typewriters!!! OMG that's hilarious!

Plus if you were working on Mac's then you would be mostly related to the graphics industry and I would find it very hard to believe that you work in the creative industries since it's so exceedingly small in Auckland.
Not to mention that if you did actually work in IT, you would understand why it's so vital to keep the cost of living down to let this the IT industry thrive. High cost of living is what kills the IT industry, haven't you heard of 'globalization'?

So you and DGZ wouldn't be crowing about how you want to keep prices up! Nice try though. :)

CJ099, I'm not sure why you think I would need to make up this elaborate story. I have only mentioned it to give some background as I think someone's history is most important when weighing up their opinions. I am very late Boomer. The typewriter story was interesting as I was able to observe the transformation of the simple manual typewriter and go along with it for the ride. I remember my Dad saying it wasn't a very good job but it turned out great. The manual became electric and then got a golfball. The first electronics had a daisy wheel, then a simple red display, changing to a LCD with multiple lines, then they attached a cathode ray tube, it transformed into a word processor with a separate printer to eventually be surpassed by the Personal Computer. I saw the arrival of the floppy disk. When I saw Windows 95 and the Internet I realised this was the future and only then studied to get some qualifications after spending a few years on mini-systems. My services are sold to other companies where I have to Google up how to fix Macs occasionally. It's hardly an unbelievable story but it was good timing on my part although a typewriter mechanic was very low pay when in my late teens and early twenties. Anyway, enough about me.

Nope still not convinced.

remember very clearly the first time I saw a new-fangled fax machine in action, in our shipping managers office. We stood there agog. Amazing tech changes thru our boomer working lives. But house still get bought and sold. People live their lives..

Thought you never sold The Boy. I presume you have sold some of your worst performers in Christchurch as prices continue to drop. I wonder when it will bottom out. It must be scary and frustrating when you see prices rising in other small towns like yours.

Hi everyone. My 2 year rate of 4.15% with Kiwibank expires on 14 Sept. Not sure whether to go with 1 or 2 year rate this time. I'm shopping around and hoping to get a really great 1 year rate perhaps. Currently kiwibank are 4.45% for 1 year and 4.65% for 2 years. What would you do?

Only a couple of months ago I got offered 4.19% for 1 year and 4.39% for 2 years with one of the major banks starting with 'A'. You really need to go through a reputable mortgage broker to help you.

Hey Brad, Well it's looking like rates will probably stay low for the next year or so, possibly longer. I've moved my remaining mortgage on to a one year fixed rate since I noticed the downward trend several months ago.

I think it's likely that you'll start to see rates drop to the low 4% sections in the next six months, though it's unlikely that they'll got lower than that due to the NZ's housing market being at high risk of declining at the moment. The banks do need to keep ticking over so they still want to encourage local borrowing but at sensible LVR rates.

Personally I would advise negotiating with your bank directly rather than going through a mortgage broker who will just take your money and run. You'll probably get a much better deal if you tell your bank that you're shopping for a better rate. I currently got offers in the very low 4% margins when I last negotiated a few months ago.

Mortgage brokers don't take your money and run - it makes me think if you actually know the business. They offer free service and get paid commission by the banks when deals are done. I have used the same broker for over 10 years and we keep a very good relationship.

Actually they do DGZ at least from my experiences of Mortgage Brokers. I remember years back when I was in the UK and I went to recommend Mortgage Broker who charged a fee of £500, thankfully it was on the basis of if I could find a better rate that they would refund that fee.

So literally after speaking to the Brokers and then talking to my bank, I got a far better mortgage rate offer where the Broker had to refund the £500 fee to me. Now getting back that money took a lot of persistence on my part and many phone calls until I eventually had to talk to the Mortgage Brokers boss in order to get the fee refunded.

And lets face it there are so few banks and lending institutions here that it really doesn't take that much leg work to shop around. And the information on rates is so easy to get hold of then it was 10 years ago, so they've been out paced by technology an this little thing called the internet. So basically they're obsolete.

Plus the banks prefer it if you talk to them rather than having to pay any fees to Mortgage Brokers (The Brokers that are offering a free service that is, remember they have to make their money somehow).
Oh and the other reason why the Banks don't like dealing with Brokers is because they facilitate 'liar loan' so they are keen to get rid of them.

So the best advice is 'Cut out the middle man' if you want a better rate, negotiate with the banks directly.

If you think their advice is free, it makes me think you don't know the business.

Where do you think the commission (which is likely excessive) ultimately comes from?

If there was ever an industry that will cease to exist as technology improves...

Nothing is FREE and FHB's should not expect free handouts from any government because that is stealing.

Tangent much?

FHB handout is an investors subsidy, just as accommodation supplement is a landlords subsidy.

Investors shouldnt expect free handouts either (CGT exemption, income offsetting etc) but still get them

Say what? What about your FREE capital gains. You are stealing from the generations that follow. But that's all good aye!

CJ; you say "it's unlikely that they'll (interest rates) got lower than that due to the NZ's housing market being at high risk of declining"
That doesn' make sense. You're effectively saying house prices going down is a reason for the interest rates NOT to go lower. Doesn't make sense

Same thing happened in the UK during the GFC Yvil. I've posted a link in my earlier comments for you to see their current interest rates. Before the GFC the UK's mortgage rates use to be around the same rates ours are at now the high 4% to 6% rates.

As I mentioned, the Banks and the other lending institutions will want to keep the mortgage market ticking over and make it more accessible for First Time Buyers to obtain a home with slightly lower rates (Which is a much healthier market), much better than removing LVR restrictions and allowing them to get hopelessly in to too much debt causing a high risk for the banks.

Remember lowering interest rates helps to apply the breaks to a property crash and that's what the banks are currently doing, now does that make sense to you.

Lower interest rates aren't the answer ( yes, yes, yes. We know!).
Who's been into K-Mart recently? I went, for the first time today, to help out. Holy Mother of God! Their prices make Bunnings, Briscoes and The Warehouse look like shopping at Harrods! That....is what lower interest rates do. And as the latter mentioned retailers fight to retain market-share against K-Mart two things happen (1) Jobs get cut and (2) Wages get cut. (NB: No check-out staff at K-Mart. Fully automated) That is going to happen across the economic spectrum as lower priced debt; the building block of all prices/wages feeds through the economy.

Be careful fixing your mortgage currently, as rates are likely to fall over the next few months.
So stay floating for a few months if you're coming off a fixed rate.
There may be better bargains ahead as spring kicks off, the elections are over, & banks need to lend more.

Have you done the maths? Let's compare 12m fixed with floating, less some discounting... there's still a ~1% difference. So, let's say you wait "a few months" .. perhaps 4. So you'd need the rates to drop by 0.33% to make up for the delay. Is that worth it? There's a reasonable risk involved.

What's key is how sensitive to price movements a borrower is - is it better to have certainty? Splitting terms and differing maturing dates works for depositors and borrowers, by lowering exposure to change at any one point in time.

Splitting your mortgage is overrated, any benefits are diffused, and it's annoying/confusing to have multiple loans on one property.
High floating rates are corralling borrowers into mediocre fixed terms.
Yes, I agree floating is very expensive. Banks don't want you to have the option of moving.
The premium for 'certainty' for more than 2 years is also too high a price.

Are you a broker?

Brokers don't like loan splitting, because it lowers their chance of churn.

On the other hand, it's a tried and tested method of limiting risk. Not sure how it's confusing having multiple loan accounts? It seems pretty straight forward. It's not like there is a per unit cost. Each to their own of course. Most older people, perhaps such as yourself, prefer out of the box vanilla products. Hard to see that being the way of the future though.

The other downside of multiple splitting is that if you decide to sell your house or wish to seek a better deal with another bank - you can't get clear ( or is harder to time it) of one or more fixed miniloans, thus incurring break fees.

Gordon, no we aren't selling our rentals as great returns.
I do know a lot about real estate agents and systems etc.
Yes I once was an agent but don't need to now as the rental business is good.
Agents need to keep working whereas the rentals keep the income coming in.
The Chch market is still good and not a worry for us but if you get your jollies out of thinking about prices in Auckland and Chch dropping then I am pleased for u.

Gordon, no we aren't selling our rentals as great returns.
I do know a lot about real estate agents and systems etc.
Yes I once was an agent but don't need to now as the rental business is good.
Agents need to keep working whereas the rentals keep the income coming in.
The Chch market is still good and not a worry for us but if you get your jollies out of thinking about prices in Auckland and Chch dropping then I am pleased for u.

I always thought you were an agent. Explains it all. No education and therefore had to peddle property for a living. Explains why you do not understand equities also.

Very well educated Gordon.
Having good qualifications is good but working for a living everyday is very overrated and that is why property is my choice of occupation

Sounds very leech-like to me

A good landlord actually works quite hard.

There must be about three good landlords then?! Because all the landlords who comment on this site keep gloating about their laid back life...

the tenants do have an impact as well. A good landlord with a good tenant - that is almost as cushy an income as owning shares.

Now that is a win win and ever so rare.

Interest editors - it would be interesting to know how many 'professional' landlords there are in NZ. I.e. they rely on rent as their only source of income. Do you think these stats are available?

Would be interesting to see how many people there are out there who think 'working for a living everyday is very overrated' as you put it TM2.

Surprisingly it seems to be a lot of people with similar values to you who get outraged that the government gives welfare/benefit payments to those who also 'don't want to work for a living' (who are labelled as lazy, bludgers, waste of space) - almost certainly they can't afford a house so they will be tenants, paying rent to you and the darklord brethren who also 'don't want to work for a living'.....but of course, there's no hypocrisy to be seen here because of the rules of capitalism you are of higher moral order....

If you were well educated how come you are an agent?

Educated doesn't mean smart, and vice versa.

The bitterness is strong in this one

Recessions are not just inevitable, they are necessary to flush bad debt and marginal investments/projects from the system. The next recession--which I suggested yesterday has just begun--will be more than a business-cycle downturn; it will be a devastating meteor storm that destroys huge chunks of the economy while leaving other sectors virtually untouched. The dynamic that's about to play out is simple: wages for the bottom 95% have gone nowhere for 17 years, while costs have soared far above official inflation for everyone exposed to real-world costs.
We have filled the widening gap between stagnant household income, and rising expenses, with debt. This stop-gap works for a while, but eventually the cost of servicing debt consumes the entire budget, leaving little to nothing to save or invest. Absent savings and incentives for productive investment, productivity falters once productivity falters, wealth is no longer being generated or distributed widely. The jig is up: the returns on adding debt have diminished to zero, and the financialization games that were supposed to be temporary emergency measures are now permanent. When credit expansion stops, the effect is like a meteor storm: marginal borrowers and lenders crater, and every sector that depends on marginal borrowers and lenders for sales and profits also craters. Those sectors that are heavily in debt and dependent on marginal borrowers for sales implode once sales slump (CH Smith)

Just an opinion of course, and lets' hope it stays 'just an opinion'.

Gordon, I am not an agent anymore.
Had many years as one and enjoyed it immensely.
Great money for the number of hours put in, however you are only as good as your last sale and if you didn't work then you aren't paid.
Rental property business has now given us the financial freedom and time to enjoy life, which is what most people would want.
If you are prepared to put a bit of time in when buying right, and maintain your properties then the returns are very good

Gordon, I am not an agent anymore.
Had many years as one and enjoyed it immensely.
Great money for the number of hours put in, however you are only as good as your last sale and if you didn't work then you aren't paid.
Rental property business has now given us the financial freedom and time to enjoy life, which is what most people would want.
If you are prepared to put a bit of time in when buying right, and maintain your properties then the returns are very good

I always thought you were an agent as you always speak like one The Boy. I have always thought agentswere one of two categories. People with limited education who had to peddle houses for a living or people who failed in their chosen career and reverted to real estate to survive. Which one are you?

Why are you so bitter gordon ?
And why do you talk so much about other people's business ?
Would it not be wiser to look after your own affairs instead ?

Gordon's main objection to THE MAN 2 is his moniker I believe. It's kind of funny as I am sure no one else really objects. As far as I can see THE MAN 2 has only ever tried to be helpful. Unfortunately success stories are interpreted as gloating here on interest.co.nz. I think it is part of the Kiwi personality, you know, Tall Poppy Syndrome.
That said gordon is part of our community and we love him dearly for all his foibles.

Yvil I assume you are also an agent like The Boy and Zach/ DGZ. Which category are you in? No qualifications or you failed in your chosen career?

Gordon, none of us is a RE agent. FYI I have a Bachelor as well as a Master both obtained from NZ universities and I don't think I have failed in my chosen career. I am quite happy to get up every morning and catch the train to work in the city and my work keeps me challenged and motivated. Yes my salary is not your 200k per annum but nonetheless I am on six-digit pay-package. Also I am not just about Auckland and DGZ, coz I like the countryside and I spend a good 4-6 a year travelling in the South Island especially to the West Coast, Central Otago and Queenstown Lakes. Please don't just accuse others as agents when you don't agree with them.

Oh come off DGZ, we all know that you and Zachary are the same person which makes it very difficult to believe anything else about what you say. You certainly keep pushing the housing market like an RE, so when it constantly quacks like a duck it's a duck!

Zach I am trying to believe you but I cannot. When someone is as obsessed as you are about RE you can only be an agent. Good try.

Why is it so bad to be an RE Agent? I would be one if I had to. I would welcome the input of any agents out there. We are just amateur freelance reporters from our respective areas. I value the comments from Narabeen Boy from the Waikato, THE MAN 2 from CHCH and Simon from PN.

Of course you value their comments DGZ as they are all agents like yourself.

Exactly right. I am struggling to understand why RE agents are being targeted in such a negative way. I'd definitely admit it if I were a RE agent but I simply am not!

Zach you are being targeted as the only people who respect agents are fellow agents. Look at all the recent reported cases where agents ripped off vendors and they would only be the tip of the iceberg. Where there are substantial commissions involved in a transaction there will always be greed. Human nature.

Maybe gordon secretly wants to be a Real Estate agent but he can't quite make it? Or maybe he used to be a RE agent but he failed ?

Honestly DGZ look at it this way; If RE's are not involved with corruption then why is it that the Governments (Not just here but across the world) are having to take steps to regulate Real Estate Agents in trying to prevent money laundering?

Even here in NZ it was RE's who complained and asked the regulation to be delayed until next year. Hence why you're still seeing some sales in the more expensive parts of Auckland.

But it's not just that as Gordan has already pointed out, RE quite often hit the headlines with dodgy dealings, house flipping, fleecing little old ladies etc... This is why RE's are so despised.

Well ok if you put it like that then no wonder they draw so many attacks from people who comment here. Still, it has nothing to do with me coz I personally don't give a damn about what people think of them. My main interest remains to be how to hold on to my properties that I bought between 10 and 20 years ago. The oldest rental that I paid $250k for in postcode 1071 in the 90's may now be worth $1.2M but I believe in 10 years time it will be over $2M...and that's where I'm coming from.

Real Estate agents are a bit like used car dealers in that regard. The industry can attract the disreputable looking for easy money. When you see the successful ones driving around in their nice Porsches I can see how it would tempt some people to try and emulate it and when it doesn't work out so great they may do something dodgy.
I'm in much the same boat as DGZ. I believe property will go up in value in Auckland. Also I was once a humble and lowly paid typewriter mechanic and I don't really see why I should support throwing away my gains gathered over decades.

Hard working New Zealanders are not the ATM for the Labour Party!!

Famous misquote. 90% of lawyers give the rest a bad name. Same applies RE agents.

Unfortunately excitement over house prices sends the associated debate towards the bottom of the toilet bowl. Nevertheless, I would say that there is a strong correlation between house price bubbles and a high incidence of banter / trolling. In the event of property crashes, the incidence of hyperbole and sock puppets is likely to drop off dramatically.

It would be good to have some concrete proof of the use of "sock puppets". Examples of hyperbole would also be useful. As far as I can tell the hysteria is on the side of those trying to burst the so called bubble through endless doomsterism. They are the ones resorting to hyperbole with their talk of inevitable 60% drops in prices, armies of money launderers, and imminent collapse of foreign finance or the Chinese government demanding all money return to China. A good example would be CJ099's assertion above, Have you not noticed that the Auckland property listings are starting to pile up again on TradeMe. A quick check reveals the figure to be 9,634 which is lower than last week and pretty much the same for the last two or three months.
Meanwhile good folk like DGZ and myself are trudging the streets, going to the heart of the action, taking notes and reporting back with what we observe. Also presenting good theories as to why things are the way they are.

A lot of these people have their blinkers on and are ungrateful of our research, but they need to know what's going on out there! I'll give you a tip, even KFC sells houses haha ^^ http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=1191...

Haha, that's hilarious. Good on that couple for going along with the fun. We really need to try our best to ensure that lovely couple have made a sound financial decision and their home will retain its value. Those trying to bring about a crash need to be more responsible.

It would be good to have some concrete proof of the use of "sock puppets".

I think there is no conclusive evidence of the existence of trolls, sock puppets, and hyperbole related to debate about property bubbles. People can say almost anything in a media saturated world. Richard Dawkins points out there is no evidence that the flying spaghetti monster doesn't exist. If people believe in something, then it is real to them. Those people are not necessarily trolls or sock puppets.

Similarly, there is no evidence that human activity-induced climate change exists. However, that doesn't necessarily mean that trolls and sock puppets don't get involved in the discussion. Actually, the internet is swarming with them, even if their arguments are largely meaningless in an empirical context.

So, just to confirm - attending 2 auctions in your own neighbourhood is a statistically relevant data set to make a statement that "the market is warm"

More statistically relevant than say B&T having published results that show sales at the lowest level for a July in 7 years and highest # of stock in 5?

MisterB, we did refer to the two auctions as "litmus tests" which would infer a small sample size.

Any test which produces a decisive result by measuring a single indicator.

By that argument, I could attend the other auctions that didnt sell and/or observe the long standing for sale signs in East Auckland and, according to that litmus test, could say the market is dead.

Litmus tests are good for, well, litmus, but not for Property analysis, which requires stratified data, aggregates and trending observations. Otherwise, what is is good for? Absolutely nothing.

I received a FB message from a local RE agent claiming 70% clearance at auction last week. Based on the above I decided to verify it. I hate to spoil someone's story by adding facts but he confirmed that last Wednesday, BT sold 7 of 9 properties in Central Bays and can't get enough stock. I remonstrated him on his maths as that 's 77.7777%

He added, "don't believe what you read in the media".

Really, when I look at https://www.barfoot.co.nz/sell/latest-auction-results

There were 3 auctions, which cleared 6/9 ; 5/9 & 0/3 = aggregate 11/21.

You also may need to look at a longer time series....

Gordon get the chip off your shoulder as it is clear that you are over the top with your negativity towards most people who invest in property.
Agents on the whole do a good job or people wouldn't be using them.
Not everyone who is a failure becomes an agent have you been one ?

I agree. REAs are admirable in their own right. If they cannot perform and make sales, they don't get paid. However, simply selling real estate for a living doesn't make you a prophet or seer about the future direction of house prices.

A good REA should be able to give sound advice about how to present a house for sale. For us it seems like common sense however I was astonished to learn that some people have no idea what their houses are worth so probably have no idea what is the best way to market their house either. An REA convinced me to stage a house I was selling. I was reluctant to as I am a bit of a cheapskate but I took their advice in the end and I must say it transformed the house and probably made me an extra 30K. If I was an REA I would just sit down with the vendor and show him the homes.co.nz estimates for starters. Then I would advise him to present the house as best as possible. If it was staged I would advise auction and then move on to negotiation if that failed. If it was tenanted or being lived in himself I would probably go for sale by negotiation. The REA should work with the vendor to get the highest price in the current market and utilize all the resources of his agency. A lot of people would need help with this.
Also an REA with many years experience should be able to give pointers about up and coming areas and so on. Although I don't think anyone regards them as seers or prophets.

Yes, they're not seers or prophets, but if they appear knowledgeable, they can influence others. That is what makes some people better salespeople than others. In bubble conditions, a REA;s spiel can enchant those who lack the ability to think critically. They are the same people who only have sketchy ideas and understanding about how most people can only base their visions on what they want to believe, not supernatural powers or even predictive ability.