Auckland house sales volumes down 22% in May compared to a year ago, but around the rest of the country the drop was just 1.4%

Auckland house sales volumes down 22% in May compared to a year ago, but around the rest of the country the drop was just 1.4%

The Auckland housing market is on a weak footing as it heads into winter, with sales in the region hitting their lowest level for the month of May since 2010, according to the the latest data from the Real Estate Institute of NZ.

The REINZ recorded 1925 sales in Auckland in May, down 22% [corrected from 7.8% in the first version of this article] compared to 2462 sales in May last year.

Across the rest of the country the decline in sales was more modest, with May sales in all regions except Auckland down just 1.4% compared to May last year.

Price movements were also relatively modest.

In Auckland, the median price rose from $850,000 in April to $860,000 in May, and has remained within the range of $805,000 to $880,000 since April 2017 (see median price chart below).

The national median price was $578,000 in May, down for the second month in a row from the record high of $585,000 achieved in March.

Outside of Auckland the regions with the biggest declines in sales in May compared to May last year were West Coast -32.3% which was the lowest for the month of May in three years, Manawatu/Whanganui -13.1% and the lowest for the month of May in four years, and Canterbury -6.2% which was also the lowest for the month of May in four years.

However three regions recorded strong growth in sales in May compared to a year earlier - Tasman +19.7%, Taranaki +7.3% and Waikato +6.1%.

The number of homes being sold by auction is also declining.

The REINZ said auctions accounted for 10.4% of all sales throughout the country in May, down from 12.8% in May last year.

However in Auckland auctions accounted 18.2% of all sales in May, down from 20.7% in May last year.

The latest figures suggest buyers will have a stronger hand in negotiations over winter, because while sales volumes were down in May compared to a year ago, the total number of homes available for sale rose.

The REINZ said 25,895 residential properties were available for sale throughout the country in May, up 5.8% compared to a year ago.

The interactive charts below track the monthly median selling prices and sales volumes for all regions.

The comment stream on this story is now closed.

Median price - REINZ

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The 'NZ total' chart will be drawn here.
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NZ total
Source: REINZ
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Northland
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Auckland
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Waikato
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Bay of Plenty
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Gisborne
Source: REINZ
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Hawke's Bay
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Manawatu
Source: REINZ
The 'Taranaki' chart will be drawn here.
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Taranaki
Source: REINZ
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Wellington
Source: REINZ
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Tasman
Source: REINZ
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Nelson
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Marlborough
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West Coast
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Canterbury
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Otago
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Southland
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Volumes sold - REINZ

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NZ total
Source: REINZ
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Northland
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Auckland
Source: REINZ
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Waikato
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Bay of Plenty
Source: REINZ
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Gisborne
Source: REINZ
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Hawke's Bay
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Manawatu
Source: REINZ
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Taranaki
Source: REINZ
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Wellington
Source: REINZ
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Tasman
Source: REINZ
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Nelson
Source: REINZ
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Marlborough
Source: REINZ
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West Coast
Source: REINZ
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Canterbury
Source: REINZ
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Otago
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Southland
Source: REINZ

 

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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120 Comments

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Same news every month, less sales, prices steady

Same news every month; Yvil chooses the narrative that suits him best.

Not really, sales volume in NZ ARE DOWN, prices in NZ ARE STEADY, (actually slightly up). It's not narrative that suits me, it is what is happening in NZ, just read the REINZ report.

So, by implication variance in median is also up?
And when controlling for heterogeneous effects, prices are down?

That is the correct narrative.

Data says otherwise, the 3 month NZ HPI change is -0.8%, they certainly aren't up. Excluding Auckland they are flat for the quarter.
Auckland definitely heading down, Christchurch -1.1% for the quarter, Wellington (Region and city) both down for the quarter

Whangarei, Invergiggle, Hamilton and Palmerston north, Dunners are the ones with growth for the quarter..

Are HPI figures adjusted for seasonality? I always thought they weren't, so I'm hesitant to look at short term trends.

Good question, I don't know. Although seasonal adjustments are something I still find baffling, the idea is straightforward, but the results/mechanics are not. The Auckland Median YoY is +1.2%, but the seasonally adjusted median is up 0.9% YoY. So what are they actually adjusting for?

No. The HPI is not seasonally adjusted - best to interpret at the annual level.

The Auckland Median YoY is +1.2%, but the seasonally adjusted median is up 0.9% YoY. So what are they actually adjusting for?
The whole process will smooth out the series, so variance is higher in the headline median index which is probably the effect you are seeing.

Thanks Nymad, good to know.

'Same news every month, less sales, prices steady', that would be my summary of the situation for the last two years and im negative on house prices, i dont see whats so controversial about it.

Thanks Laminar, some commenters are so desperate to wish house prices tumbling

Planning to buy a home so I'm really only interested in HPI. Can someone share a link on where to get the most up-to-date HPI? No intention of getting into this market with prices heading south the way they're doing. Cheers

"Planning to buy a home... - No intention of getting into this market..."

Which is it?

Hi Nymad,

Yvil is exactly correct.......

Nobody who visits here regularly would doubt that.

TTP

12
up

With all due respect, there are very few days here when an Yvil comment is not corrected with facts.

Thanks nymad for stating "there are very few days here when an Yvil comment is not correct with facts" that's kind of you to recognise that my comments are mostly factual ; )

Yes, he phrased it poorly. I'm pretty sure "there are very few days here when a Yvil comment does not need to have factual inaccuracies highlighted and/or corrected by other posters" is more what nymad meant.

Sorry TTP but most who visit here would very much doubt I could ever be correct LOL

I'd say that's more of a reflection on you than anyone else..

Thank you nymad, for business I strive not be part of the herd, I would be terrified if I had 30 thumbs up on a comment, it would positively tell me I need to change my thinking

Excellent!
Everyone thumbs up Yvil's original comment.

I think I might look into how to write a chrome plugin. There are a couple of posters who's posts aren't worth the screen real-estate they occupy.

Seems you're equally clueless about screen real estate as you are about actual real estate.

Self-nomination accepted :)

I'd be interested in that plugin. Would be good to get rid of the repetition from the usual suspects.

Don't hold your breath, between an upcoming holiday, a couple of new projects at work, and a social life I won't have a lot of time to sink into it. And PC software is not my usual area of operations, so a bit of a learning curve. Might arrive with a xmas bow attached.

Yvil, this comment section is infested with envious and conspiratorial DGMs, and upvotes are just a measure of how well a comment conforms with their narrative. I wish there were downvotes, I'd take may average of -25 as a badge of honour.

You'd go down faster than the Sydney housing market.

Indeed, you can generally spot the poorest (very polite adjective) comment simply by the high number of thumbs up.

The only thing that gets more upvotes than comments explaining why the housing market is about to crash is comments moaning about immigrants.

Correct (and very sad), the most negative, whinging comments get the most thumbs up...

Nymad and his DGM cronies seem more disaffected than usual today.......

TTP

His word salad comes out when he gets frustrated

But surely he must be very intelligent to writes sentences like:
"by implication variance in median is also up? And when controlling for heterogeneous effects"

Classic nymad word salad. Hilarious.

He doesn't realise that sentences like this don't make one look intelligent. They make one look like they are trying to look intelligent.

12
up

Greg, how is a HPI fall of 3.3% in Auckland considered "flat"?

There is a clear trend emerging in Auckland's HPI graph (page 7 of the HPI report if you need help) and it isn't flat.

17
up

I understand why REINZ will avoid using the HPI in press releases if the Median is more flattering - they have a vested interest in showing prices rising. I don't understand why independent news organisations, that are supposed to a bit more data savvy, keep referencing the median figures instead of the more accurate HPI.

I think it is an endemic issue.
Even when I have been talking to REAs over the past few years in both a personal and professional capacity, it is evident they don't even know the difference between the two measures. I have a colleague who does training external financial training for REAs and his favorite question to ask a group is what the differences between Mean, Median, and constant quality indicies are. He says it is not often anyone knows what the REINZ/QV SPAR HPIs are and obviously even much less often that someone actually knows how they are estimated.

12
up

Despite the fact Bindi Norwell, REINZ CEO describes "the REINZ HPI as 'the gold standard' in New Zealand house price analysis tools" every month on page 3 of the REINZ HPI report.

... but then never mentions it in her monthly commentary.

10
up

Its just a way REINZ use their commentary to try and dictate the narrative. They know most media outlets will happily copy/paste their summary of the data, so they will happily cherry-pick data to suit their interests. So despite the HPI being a far better measure (which you can see, just looking at the graphs, as its much less volatile) they will largely ignore it from their commentary unless it paints the picture that suits their narrative.

I fully expect lazy copy/paste from The Herald and Stuff, but I had assumed Interest.co.nz would be a little more subjective and analyse and interpret the data as accurately as possible..... but I guess not.

I fully appreciate that they are intellectually dishonest.

I just like to highlight it.
Every month.

This is actually a good report for nzherald (I'm shocked!)

They don't just repeat the figures and they put REINZ's Gisborne spin right at the bottom with a big caveat based on the actual data.

Well Done!
(Obviously not Anne Gibson writing today)

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=122...

That was a really well written article by someone who actually understands the underlying data sets. Good find.

I googled the authors name, if i'm not mistaken she was the reporter I saw in one the RBNZ streamed media events giving and being given a hard time by Adrian Orr. Certainly not one to sit back and let things go by un-challenged if that is her usual MO.

Ah yes, I actually thought she got torn apart by Orr in that Q&A session.

Yes, no love lost between those two, whatever she's written before must have annoyed Orr.

Anybody got copies of the commentary from say 2015ish? does the HPI get a mention back then, or is it all medians?

Where does Greg state that "a HPI fall of 4.2% in Auckland considered "flat"?"
(edit, I see you have now changed a fall of 4.2% to a fall of 3.3%)

REINZ had their data wrong - they have corrected it.

OK, so "where does Greg state that "a HPI fall of 3,3% in Auckland considered "flat"?"

Greg states in the article:
"The Auckland housing market appears to be on a weak footing ... although prices are largely **flat**"

I'm challenging his statement.

HPI in Auckland was -3.3%.
HPI is "the gold standard" of price analysis.
-3.3% is not *flat*.

Happy?

Thanks for admitting that Greg did not make the statement that "a HPI fall of 3,3% in Auckland is considered "flat"

I'm not admitting anything semantics warrior.

He said "prices are largely flat".
They are not.
His statement is incorrect.

Greg came to his conclusion that prices were flat after stating "In Auckland, the median price rose from $850,000 in April to $860,000 in May", sound reasonable to me

It would be reasonable if that was the best/only data available.... But comparing the median for two isolated data-points is a horrible measure, due to inaccuracies of the median measure, and the small sample set of data. And yet the HPI exists and is a much better measure. It is far less volatile and provides are much more accurate picture of value of property.

So why ignore the most accurate "Gold standard" measure, and instead base your commentary on the change in median over 2 isolated data points? When did that because a "reasonable" way to interpret data?

We went through this with you when Barfoots released their data last week.

You conceded that HPI is the best measure.
We're all now talking about HPI.
Because it's the best measure.
Remember?

Do keep up.

Ahh. I remember that thread.
I love it when someone posts such a categorically wrong comment that they have to edit/delete it. Thanks Yvil.

Like your post above at 9:53 that said "there are very few days here when an Yvil comment is not correct with facts" and then you edited it to say "there are very few days here when an Yvil comment is not correctED with facts"

LOL

by nymad | 14th Jun 19, 9:53am

by Yvil | 14th Jun 19, 10:43am

Oh you mean the one that I edited before anyone replied?
Yea. 'Cause that matters.

Very different to your habit of deleting comments after someone specifically replies to them.

Off to SPQR now, have a nice afternoon : )

Ill happily go on the record to support -3.3% been 'largely' flat. Technically down and trend is down but in the world of corrections we are still in the 'largely flat' phase.

Agreed, if we get a correction rather than just a long drawn out slow decline/stagnation, then the 3.3% drop will be insignificant.

Hi Yvil,

Save me a seat at SPQR - see you shortly.

TTP

Regional 'investors' conference in Ponsonby.

Quelle surprise.

Sounds like your sort of place. It's where all the pretentious phoneys hang.

It is certainly the place to go and find some like-minded fellows. :p

Yes Fritz, I love SPQR, great food, good atmosphere, walking distance from home, you'll find me there at least once a week

I was walking in Ponsonby the other day. There's a car with your name on the plate. Wouldn't happen to be yours would it?

Hahaha, certainly fits the personality.

Thanks MTS

Hi Fritz,

Indeed, pretentious.

In fact, I park my Hillman Hunter right outside.

TTP

So a relatively strong month for Auckland in that the HPI didn't fall further in either absolute terms or as a YoY%. I guess we're just in a winter holding pattern now.

Nothing about that is "strong".

Do you understand what "relatively" means? It's strong relative to the results we've seen in recent months.

OK, nothing is "relatively strong".

It's down.

LOL

Certainly not relatively strong for Auckland compared to oh the past 7 years or so, no. We can get carried away with looking at the week to week, or the month to month, but there is a clear down trend in the market. And looking at the recent trend across the Tasman (~8% down from the peak, nationally weighted), the NZ outlook is not looking strong.

Rofl, cmat says something perfectly coherent and yet still gets ripped up.

Relatively strong compared to Ireland or Spain on a bad day.

Not quite right, the Auckland HPI is up 0.5% for the month. Not that monthly changes mean a lot, its a bit too noisy.

I agree that we can't really draw much of a conclusion from just a single month, particularly at these low volumes. There's a decent chance this is just a small blip on the way down.

...... or it could be a small blip on the way up......

TTP

Look at the "My Sales" in the profile of RE agents.Increasing numbers of "Price Withheld" or withheld in a selective way. If the actual sales prices achieved were good,why be coy about publishing it???This is more indicative of the direction of the market rather then the figures trotted out by self-serving interests.

Joe Wilkes, see above, if Auctions resulted in 18% of all Auckland SALES, and clearance rates are in the high 20 to mid 30% range, there is no way 14% of LISTINGS are Auctions. 18% / 30% clearance rate = 60% Auctions must be around 50% of all listings.

Yeah, I found that piece of analysis strange too.

The majority of listings I see are still trying (mostly unsuccessfully) to sell via auction, at least initially.

Indeed, and some even try twice. Go to auction and fail to sell.. wait a week for any post auction offers, then dump that agent and try again with somebody new.

Hi Greg, this article has a strong Auckland flavour (including the headline), most people do not live in Auckland, could you please provide data about the rest of NZ or just all NZ ? Thanks (maybe this is on its way)

Hi Yvil, the median sales and sales volumes charts have now been added to the bottom of the story. These give the current and historical numbers for all regions. Just select the region you want to look at in the seach field above the graph and when it pops up, hover your cursor over the graph line for the actual figure for any particular month. The data to update these was late arriving from REINZ this morning, which is why they were late getting posted. The debate about median price v HPI is an interesting and valid one. We will continue to use median prices for the time being because it is a measure that is widely understood by our readers (although it wasn't that long ago that most didn't know the difference between median and average), and because our median data stretches back a long way, giving a much longer time comparison. As to my comment about Auckland prices being largely flat, if you look at the median price graph for Auckland, this shows that while there are monthly variations, as there always will be, the overall trend is indeed flat, and prices have largely fluctuated on either side of the $850,000 mark since September 2016.

 

 

Thanks for the response Greg. Do REINZ not provide historical data sets for HPI? They seem to have very long running data set for this measure they use in their monthly reports.

Over the past few years HPI shows less volatility than Median and removes skew of property type, which is why many readers prefer it. I'd recommend taking a look at this article where they have used a combination of HPI and median to explain the situation to readers. I feel its can offer a much more informative picture of trends.
https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=122...

I don't think it's a hard concept to understand, REINZ has HPI time series back to 1992, and dumbing-down should not pass as a reason for continually referencing an inferior measure - particularly when trying to cut through REINZ spin, which alternates between median & HPI as & when it suits them.

Example, from the October 2017 report:
“Looking at the REINZ House Price Index (HPI) for the legacy Auckland City it only decreased 0.8% year-on-year, whereas the median for the same period fell by 17%, highlighting that the drop in median price is not as dramatic as a first glance would suggest. This is because the HPI considers the mix and value of the property sold, not just the sales price,” points out Norwell.

REINZ are happy to quote and espouse HPI when it's positive and median is negative. But go quiet on it otherwise.

Awesome, thanks for your comprehensive reply Greg.

BTW, I was defending your statement that the Auckland market is flat, cmat is the one who is disagreeing

Things must be bad: REINZ not putting their regional summary report on website anymore:
https://www.reinz.co.nz/Media/Default/Statistic%20Documents/2019/Residen...

.

Go to the press release archives: https://www.reinz.co.nz/public-archive-2019
Then copy the link for "REINZ Monthly Property Report and Regional Commentary - May 2019".
Remove the .pdf from the end of the link (since it ends like .pdf.pdf)

Thanks for the link Courtjester

Since 1992 , some 27 years ago, only the year 2008 has seen fewer Auckland homes sold in the same 6 month period December-May. Mortgage rates have not been lower.

Even in 2008, for 5m period there were FEWER sales of residential properties. 3.8% fewer
Which might make it worst 5m period of sales in 27 years!
peak for sales by way, was 2003-4, when 56,000 sold in 12m. halcyon days....

And the population has not been higher. A graph corrected for population size would be interesting.

Forget Auckland, CHCH, Palmy North... Go East to Gisborne and you might even get a patch for free or if you don't mind a patchy neighbour

https://www.stuff.co.nz/business/113480719/gisborne-leads-national-house...

That's the tail of the boom/bubble wagging in the regions, same as it did in Australia. Chase those high regional capital gains at your investment peril. They'll likely get hit hard in the nationwide downturn.

Not going to be hit as hard as Auckland housing would be, the regions have for the most part enjoyed a more productive boom than Auckland. The regions of BOP and Waikato have built more per capita - which suggests their markets are more elastic - than Auckland. In a downturn the less elastic markets will be hit the worst.

This property market is one tough bubble - it ain't burst yet.
A little seasonal deflation there, but generally defying the predictions.
It may have a slight phsss... but no pop yet.

very apt sound for the market 'phsss', love it :-)

Flat-ulence

Median Price just not give the actual picture as know many, who are buying now and spending more than their earlier/original budget as getting more for their deposit/$$$ by extending slightly (Low interest also helps)

How much the damage will be is to watch out for.

Auckland housing sales for May at nine year low but prices holding up - REINZ

Wrong Headline. Should mention that Median is holding up as prices have and are falling.

So called experts believing that Median Price holding up = House Price not falling is a wrong conclusion.

Median may be (It is) same as house buyers and investors, if any left are getting more value for money in $800s and $900s and Million Plus range than in $600s and $700s (As price in higher ranges have gone down from peak anywhere between 10% to 20% and some may be more so more value to but those properties, if are able to afford. Low interest also supports them to stretch.

Above headline only goes to show that though the data is bad (Sale Volume down by 22%) and cannot hide (so have to say) but can give it a twist by saying that price holding up, which is a complete lie atleast in Auckland (Diding behind and twisting /manipulating data to suit vested interest).

Please bear in mind that REINZ is not citing TOTAL sales but only residential sales.
Total sales in May compared to last May are in fact down 37% and over 6m are down 24%. So the deterioration is accelerating. Sales above $2m were down 53.7% in May and above $1.5m, by 33%. From 600-800k the fall was only 12%. SO, plainly, the AML and OBB Acts have done for overseas flow of liquidity.

Yes the pressure is rising while prices are falling..... cant think what might happen from here.....

12
up

Amazing how default assumption (not delineated) by all commentators, is that prices being flat or going down is BAD and going up is good. FOR WHOM?

Good for using house as an ATM for owners?
Good for banks to lend more money and people to get more debt.
Good for economy spending on unproductive assets and avoiding dealing with inadequate pensions and rented housing stock?

A market is not a description of a price. Sellers and buyers are a market. Analyse that please

I agree with your sentiment mikekirk. More do than you realise.

Less sales, prices steady, inventory increasing.
The only fixed values out of those 3 are less sales and inventory increasing. The median sale price can be corrupted by people paying overs for a property, or getting an absolute bargain.
From my experience selling property after a long period of "less sales, prices steady" your house isn't worth as much as you think it is. Chances are what you think your property is worth is probably about 10% higher than the "best case" scenario you'll get from your chosen agent. Prices are holding because people are now getting better value for money, and with inventory increasing, they've got even more choice.
Auction rates are continuing to fall. Sales are continuing to fall. Inventory is increasing.
The long night has begun.

People should watch the inventory. If it continues to increase, and if the credit impluse into mortgages reduces (less borrowing per year), then we're going to have a fire sale.

Changed name again Nic Johnson?

No.

Since you are all so knowledgeable about property, I thought I'd ask - is there any issue to look out for with fibrous cement cladding?

Ask about Asbestos in the older stuff. Nightmare if you need to work with it for safety and expensive safety requirements.

The chart above for NZ median price shows an amazingly steady uptrend : )

https://i.stuff.co.nz/business/property/113453987/house-prices-nationwid...

Surprising article (btw I do not share their opinion)

Vested Interest / Paid News

Joke