Barfoot & Thompson's auction numbers remain on their winter lows

Property

Low auction numbers and an overall sales rate of 37% at Barfoot & Thompson's auctions last week

16th Jul 19, 9:46am by Greg Ninness

Auction numbers ticked along on their winter lows at Barfoot & Thompson last week, with the agency marketing 70 residential properties for auction compared to 72 the week before.

Of those, 26 had found new owners by the end of the auction process, giving a sales clearance rate of 37% compared to 39% the previous week.

Only three of the auctions offered 10 or more properties, of which the Manukau auction was the biggest with 19 properties but the sales rate was below the average at 29%.

There was a dozen properties at the Shortland St auctions on July 10, with most of them from central Auckland suburbs such as Kohimarama, St Heliers, Mt Eden and Grey Lynn and 50% were sold.

At the North Shore auction 15 properties were offered and the sales rate was 40% (see table below for the full breakdown of results.)

Details of the individual properties offered are available on our Residential Auction Results page.

The comment stream on this story is now closed.

Barfoot & Thompson Auction Results 8-14 July 2019
Date	Venue	Sold	Sold Post	Sold Prior	Not Sold	Withdrawn	Postponed	Total	% Sold
8-14 July	On-site		1		5		1	7	14%
9 July	Manukau	2	1	1	14		1	19	29%
9 July	Shortland St	1			2			3	33%
10 July	Whangarei	1		1		1		3	67%
10 July	Shortland St	3	1	2	5		1	12	50%
10 July	Pukekohe	2		1	3			6	50%
11 July	North Shore	6			7		2	15	40%
11 July	Shortland St			1	1			2	50%
12 July	Shortland St			2	1			3	67%
Total	All venues	15	3	8	38	1	5	70	37%

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84 Comments

by alittle | 16th Jul 19, 10:18am 1563229126

Now this LOW should be the new normal.

In Australia house price is down by 15% from peak of 2017 offically so may be more in many suburbs. One view is that house price in Australia will fall by 40% (Can argue but has and is already reaching halfway mark)

https://www.youtube.com/watch?v=uU2jwUihIcs

If the above is true - Should NZ be worried as all indication in NZ are also leading towards that downfall (Money Laundering and Foreign Speculation has stopped and based on ecenomy - house price are over streched - may be over streched is an understatement).

Debt Level : https://www.youtube.com/watch?v=uU2jwUihIcs

by tothepoint - d… | 16th Jul 19, 11:03am 1563231798

Hi alittle,

I think you're being a tad misleading........

Remember, New Zealand is not a city in Australia.

In fact, they're two different countries - with different economies and completely different drivers of their housing sectors.

With all due respect, scaremongering is not a particularly useful way of spending your leisure time.

TTP

by oreo | 16th Jul 19, 11:04am 1563231895

"completely different drivers of their housing sectors"
Really!?

by tothepoint - d… | 16th Jul 19, 3:14pm 1563246888

Hi oreo (and others),

"completely different drivers of their housing sectors"

Indeed.........

A shortage of dwellings is driving prices/rents up in NZ.

But a surplus of dwellings is driving prices/rents down in Australia.

Suggest you all go enrol for a course in elementary microeconomics.

TTP

by Toppertee | 16th Jul 19, 2:07pm 1563242839

Hi tothepoint,
I study the history of econmic crisis. You with find in the last 200 years no OCED country has ever had a large run up of private debt and assets without a major crash. Saddy it tends to crash about 70% of the peak.
You might like to had a read of Richard Vagues new book A Brief History of doom: Two hundred years of Financial Crises.
New Zealand does not have super powers that stop the laws of ecomics.

by tothepoint - d… | 16th Jul 19, 3:21pm 1563247311

Hi Toppertee,

You state: “I study the history of econmic crisis.”

Then it’s a pity that you haven’t learned to spell the word “economic” correctly.

Those people who really are scholars of economic history (and are literate as well) know that the past is not necessarily a good predictor of the future.

TTP

by Dgm | 16th Jul 19, 3:17pm 1563247036

wow TTP, if you went thru your post to count the number of spelling mistakes, it would be staggering!!!

by tothepoint - d… | 16th Jul 19, 5:42pm 1563255777

Hi DGM,

Always happy if people point out my spelling/grammar errors......

To date, nobody has reported any errors.

Clearly, if you can’t spell accurately, you’re less likely to come over as credible/convincing. (Poor spelling is often seen as a sign of poor education.)

TTP

by Toppertee | 16th Jul 19, 4:49pm 1563252554

Thank you for picking up my spelling piss takes....sorry if it caused any offence or confusion.
Book is still worth a read, it's staggering the amount of crisis that have happened in the last 200 years.
Ask anyone about the great depression... Nearly all will state that it was the share market crash that caused it.
In fact 10 years earlier a massive run up in private debt fuelled in real estate caused the crash. The Market crash was a symptom not the root cause.
Same with the GFC, Japan, Europe, UK.....
Speculation on real estate.

Émile Zola’s novel L’Argent [Money], penned in serial form beginning in 1890, reflected on the decade with a searing indictment of “the evils of ‘speculation’ ” and showed that the path to financial crisis or, in his words, “the ways of the speculator, the promoter, the wrecker, the defaulter, the reptile journalist, and the victim, are much the same all the world over.”

House prices are directly linked to cheap credit and availability of credit.

It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.

by b21 | 16th Jul 19, 9:57pm 1563271027

TTP, this kind of fallacious argument is a perfect example of "argumentum ad hominem".

https://en.wikipedia.org/wiki/Ad_hominem

Scholars would tell you that this is normally used to avoid discussing the facts by attacking the person instead.

by CN | 16th Jul 19, 3:22pm 1563247377

Toppertee,

"New Zealand does not have super powers that stop the laws of economics"

Tothepoint places a high emphasis on economics 101 - "supply vs demand" and applied that to residential property. Since there is a reported housing shortage, that must mean that house prices will rise, (and not fall).

Tothepoint may not be aware or know the difference between:
1) underlying supply and underlying demand
2) effective supply and effective demand

This is very commonly confused by many who don't have a deeper knowledge of prices in free markets with respect to residential real estate. Here are some economists who also missed this point:
1) in New Zealand - https://www.interest.co.nz/property/97513/auckland-councils-chief-econo….
2) In Ireland - https://www.independent.ie/business/irish/there-is-no-property-bubble-t…
3) in Australia - https://www.smh.com.au/business/nsw-housing-shortage-at-unprecedented-l…

by theglc | 16th Jul 19, 10:00pm 1563271245

If there is soooooo much demand why are the sales volumes in Akld hitting record lows each month......

by CN | 17th Jul 19, 8:26am 1563308775

Effective demand has fallen dramatically from their peak levels, so that the residential property market in Auckland has moved from a seller's market to a buyer's market.

by mikekirk29 | 17th Jul 19, 8:08am 1563307697

There is a surplus of supply and more coming as cycle of building now out of whack. Plus buyers left or about a third of them. Hence prices will fall

by CN | 17th Jul 19, 8:26am 1563308809

Yes, effective demand has fallen dramatically from their peak levels, so that the residential property market in Auckland has moved from a seller's market to a buyer's market.

Meanwhile, underlying demand is still slowly growing.

by NorthernLights | 17th Jul 19, 1:24pm 1563326651

Nice explanation CN
Probably a waste of time on TTP though

by alittle | 16th Jul 19, 11:25am 1563233108

Agree that NZ is not a city in Australia but still ecenomy in NZ - is not immune to the rest of the world.

Also by it self the exessive that happened in NZ housing market (Supported by money laundering and foreign buyer) has taken a toll and now ecenomy is at play so NZ housing by itself is in a mess and when you see what is happening near us confirms the fear of what is yet to come.

by Voiceofreason | 16th Jul 19, 11:51am 1563234715

Are the OECD and Bloomberg Research also scaremongering in warning of a possible NZ property crash? (See my comment further down for links, or google it if they get deleted some some reason). It’s not scaremongering to warn of real risks based on data. If only there were more mainstream warnings before the GFC hit, rather than “it’s different this time”.

by RickStrauss | 16th Jul 19, 4:48pm 1563252508

Albeit according to research, connected housing markets.

by HouseHunter | 17th Jul 19, 8:42am 1563309739

The grammar nazi needs to work on his/her use of ellipsis

https://www.writing-skills.com/five-annoying-ways-use-ellipsis
Three is the magic number
Some style guides recommend writing an ellipsis as three full stops: …
Some prefer three full stops with spaces between them: . . .
Whichever you use (we prefer three full stops without spaces, except on Twitter), all style guides agree that ellipses are three dots long. Not four, or two (and five is right out).

by house hunter | 16th Jul 19, 11:38am 1563233918

One difference between Aus and NZ is that Australian property owners who are non-residents and non-citizens pay crazy high land taxes (in NSW at least - it may differ state to state). Non-residents also get hammered by CGT when they sell too. I believe both of these changes were quite recent. They could be factors in the more rapid fall in the Sydney market compared to the Auckland market. While NZ has introduced the FBB, it hasn't done anything to encourage those FBs who got in before the ban to sell up.

by Mrs The Point | 16th Jul 19, 11:53am 1563234791

I like the sound of this, a non resident 2% annual land tax. Then we would see how committed some of these speculators are to contributing to this country.

by house hunter | 16th Jul 19, 12:24pm 1563236679

In NSW it's 1.6% above a threshold of about 700K: https://www.revenue.nsw.gov.au/taxes-duties-levies-royalties/land-tax

by Voiceofreason | 16th Jul 19, 12:19pm 1563236363

On the other hand, NZ has cancelled negative gearing, Australia hasn’t, and it’s a massive part of Australia’s “mum and dad” property investment.

by Yvil | 16th Jul 19, 10:10pm 1563271831

You cannot "cancel negative gearing" you probably mean ring fencing the losses from a property and not being able to offset them with other income?

by CN | 16th Jul 19, 5:09pm 1563253743

Summarising the 2 sides of the property price debate:

A) There are readers of interest.co.nz who believe that property prices in Auckland have a higher than normal risk of having large falls.

The reasons given for the higher probability of large price falls is based on 2 key points:
1) high house price valuations
2) high household debt levels

B) These are some reasons given in the mainstream media, property market commentators, property market promoters, bank lending promoters masking as bank economists, real estate agents, property market mentors & other sources as to why property prices in Auckland will not fall by much and that there is a low probability that property prices will fall dramatically:

1) during the GFC, house prices in Auckland fell only 7-10%
2) over the past 50 years, house prices in Auckland have averaged 7.2% per annum (or commonly referred to as house prices doubling every 10 years). This trend can be expected to continue into the future - https://youtu.be/Agp9xFWoBX4?t=172
3) there is a shortage of underlying housing in Auckland, so property prices won't fall by much - https://www.interest.co.nz/property/97513/auckland-councils-chief-econo…
4) there is a growing population which means that there will be more demand for houses - https://www.stuff.co.nz/business/106883553/house-prices-have-fallen-but…
5) we have inward immigration which means more demand for houses
6) Auckland is an attractive city with an attractive lifestyle - that makes it desirable and attracts foreigners to move to Auckland and hence raise the demand for houses
7) lower interest rates are supportive of rising house prices
8) lower interest rates make debt servicing easier for borrowers
9) Low interest rates were also forcing retirees and those nearing retirement to look for investments that would produce income, such as rental property. "Plans of the baby boomers to retire and live off a conservative yet well-yielding portfolio have evaporated with low interest rates," he said. "[They] are seeking assets and buying investment properties. They are also seeking assets they can hold and live off of for three decades in retirement rather than just 15 years given advances in health and medicines." - https://www.stuff.co.nz/business/84322204/all-predictions-of-an-aucklan…
10) we mustn't forget either the vested interests in ongoing stability. No government, central bank or trading bank with mortgage exposure wants materially lower house prices. Nor does an incumbent Beehive want falling house prices going into an election campaign https://www.stuff.co.nz/business/110499233/think-house-prices-are-going…
11) the economy is doing well, with low unemployment - https://www.stuff.co.nz/business/110499233/think-house-prices-are-going…
12) there has been insufficient construction of new builds to meet the housing shortage - https://www.stuff.co.nz/business/106883553/house-prices-have-fallen-but…
13) there are high construction costs to building a house. House prices cannot fall below their construction cost. - https://www.stuff.co.nz/business/106883553/house-prices-have-fallen-but…
14) people don't sell their houses at a loss - https://www.stuff.co.nz/business/106883553/house-prices-have-fallen-but…
15) continued inflation means that house prices will continue to rise in the future
16) The fact is, debt levels have barely changed from the beginning to the end of those 10 years, compared to GDP levels, compared to household assets, compared to household disposable incomes. And much more importantly, debt servicing is very much easier now, an item that is almost universally overlooked. We are not pushing out to unsustainable levels now, and even if they creep up a little, we are far from that point. https://www.interest.co.nz/opinion/95894/if-you-think-new-zealands-hous…

17) in aggregate household debt servicing is low in New Zealand - currently at just under 8% of disposable income of households - https://www.rbnz.govt.nz/statistics/key-graphs/key-graph-household-debt
18) property market participants & commentators who have been correct in their predictions about recent property price trends have more credibility and hence their predictions of upward prices are believed by a wider audience (such as Ashley Church, Tony Alexander, Ron Hoy Fong, Matthew Gilligan, etc). - https://www.stuff.co.nz/business/84322204/all-predictions-of-an-aucklan…
19) previous warnings about a house price crash have been wrong - property prices have continued rising upward significantly since these warnings were given, so there is little reason to believe these warnings.(such as Bernard Hickey) - https://www.stuff.co.nz/business/84322204/all-predictions-of-an-aucklan…
20) its unlikely Auckland prices collapse. I think the main two reasons though are:a) Affordability has been this bad, and worse, in the past and it only resulted in about a 10% drop. b) The number of homes built over the last decade has been too low and will take some time to recover - https://www.interest.co.nz/property/100670/housing-market-continues-hib…

by CN | 16th Jul 19, 5:18pm 1563254321

FYI, some counterpoints against B) by Laminar in another thread

2) over the past 50 years, house prices in Auckland have averaged 7.2% per annum (or commonly referred to as house prices doubling every 10 years). This trend can be expected to continue into the future
Not really accurate, after adjusting out the inflation house prices grow only at 3.5% from 1986 until today. With 2% inflation that would then be 5.5%. The trend itself is questionable as interest rates have dropped a long way to generate even the tepid 5.5% pa. Looking back 50 years doesnt even make sense as the economy, taxes, currency where all wildly different.

7) lower interest rates are supportive of rising house prices
Thats not true, in fact the current low interest rates are not even supportive of current prices. You can check this by looking at affordability.

12) there has been insufficient construction of new builds to meet the housing shortage
I think there is some evidence that this may be turning the corner.

13) there are high construction costs to building a house. House prices cannot fall below their construction cost.
That is incorrect, house prices are primarily set by affordability, if for example we hit high unemployment rates it would be easy to push prices below the cost of replacement.

14) people don't sell their houses at a loss
They dont 'willingly'

15) continued inflation means that house prices will continue to rise in the future
Inflation is very low and in and of itself does not drive prices. Wages and interest costs combine to be the main driver of prices.

18) property market participants & commentators who have been correct in their predictions about recent property price trends have more credibility and hence their predictions of upward prices are believed by a wider audience.
Kinda a weird way to look at future price direction, i dont know but i doubt its got a great track record.

19) previous warnings about a house price crash have been wrong - property prices have continued rising upward significantly since these warnings were given, so there is little reason to believe these warnings.
Whilst true youd really want to understand why they where wrong as they may be right at the wrong time.

by CN | 16th Jul 19, 8:46pm 1563266795

The purpose of the above comment is to provide a comprehensive list of points given by each side of the property price discussion for all to consider the merit, & relevance, and as a record for historical reference. Also provided are counterpoints. It will be interesting to look back at these points in say 5 - 7 years, to see which were proven to be the case subsequently. And where the points proved to be incorrect, misleading or irrelevant.

by Yvil | 16th Jul 19, 10:14pm 1563272044

Well done CN for posting views from both sides!

by CN | 16th Jul 19, 5:20pm 1563254457

FYI, counterpoints against A)

1) high debt levels -
"But overall we are in a similar debt-level situation now as just before the GFC, but with debt servicing significantly easier". - https://www.interest.co.nz/opinion/95894/if-you-think-new-zealands-hous…

by CN | 16th Jul 19, 5:48pm 1563256091

Also note that the mainstream media, property market commentators, property market promoters, bank lending promoters masking as bank economists, real estate agents, property market mentors have their own vested financial interests in promoting property, and rising property prices.

Here are some of their financial interests for your consideration:
1) main stream media - advertising by property related businesses
2) banks - more lending leads to more potential bank profits
3) property market mentors - attract fee paying students
4) real estate agents - rising property prices lead to rising commissions

Financial vested interests for highlighting the risk of a debt bubble, property price bubble are far fewer than above and to a much smaller group of people.

by Houseworks | 16th Jul 19, 9:19pm 1563268754

Hi CN
To post all those comments you must have a computer brain.
Unfortunately I think it has mal-functioned.

by CN | 16th Jul 19, 10:45pm 1563273906

Houseworks,

Thank you for your comment to the property price discussion. Feel free to add to the property price discussion with valid & relevant counterpoints. Ad hominem comments are not valid, or relevant counterpoints to the property price discussion. The quality of the property price discussion should be raised above making ad hominem comments.

by Glitzy | 16th Jul 19, 10:21am 1563229277

One mainland developer pulling out of Auckland. Presumably 46 Queens Street (now being sold on) as the project couldn't get enough traction with buyers.

With the volume of new apartments in the pipeline quite possible we will see more of this in the coming year or two.

by Dgm | 16th Jul 19, 10:58am 1563231498

And selling for less than bought

by Yvil | 16th Jul 19, 10:18pm 1563272331

What is selling for less than bought? If the developer pulls out it means the apartments are not getting built

by Glitzy | 16th Jul 19, 11:03pm 1563274991

Hi Yvil, the NZ herald was reporting the developers are now trying to sell the site for less than they paid for it.

by mikekirk29 | 16th Jul 19, 11:28am 1563233335

All good.... Auckland ap sales only down 47% in June. Keep on building

by RickStrauss | 16th Jul 19, 1:04pm 1563239058

Far better value apartments are common in Sydney and Melbourne, too.

by Chairman Moa | 16th Jul 19, 10:29am 1563229777

China latest GDP growth rate is now at 6.2%, the same level as at 2008 GFC, and heading towards the same low as Asian Crisis back in late 1990s. So if you are holding your breath for house price to raise, you may want to hold a bit longer.
Remember for China, 8-9% GDP is considered to be neutral, so at 6.2% is in negative region..

by Joe Wilkes | 16th Jul 19, 10:33am 1563230010

They can make GDP pretty much whatever they want it to be. Create more debt and use it to build pointless developments and empty cities. GDP will be whatever they target it at, whether the money is real or not is another question, but we seem to like selling our real assets and productive economy for made up paper.

by mfd | 16th Jul 19, 10:39am 1563230345

Also worth remembering that China's GDP is now nearly 3 times what it was in 2008 - 6.2% today is much, much larger than 6.2% a decade ago.

by Joe Wilkes | 16th Jul 19, 10:41am 1563230484

So is the level of private debt.

by Chairman Moa | 16th Jul 19, 10:43am 1563230618

GDP percentage is the growth rate, it's nothing to do with the size of total GDP.

by HeavyG | 16th Jul 19, 11:18am 1563232698

Wouldn't total GDP determine what the growth rate is?

E.g. Country 1 - GDP1 = $100 - GDP2 = $110 = 10% GDP growth
Country 2 - GDP1 = $50 - GDP2 = $60 = 20% GDP growth

Both Country 1 and 2 have same GDP increase of $10 but due to different size of total GDP the growth rate differs. I think the OP is pointing that out i.e. China may still be increasing GDP at the same total amount but the GDP growth rate is dropping due to the size of total GDP.

E.g. China1 GDP $100 - China2 GDP $110 (10% GDP growth) - China3 GDP $120 (9.1% GDP Growth) - China4 GDP $130 (7.7% GDP growth)

by mfd | 16th Jul 19, 12:03pm 1563235431

Yes, it is the growth rate. But if you multiply the growth rate by the GDP, you get the actual growth in dollar terms. The GDP is three times as large, so the actual amount of growth is three times as large.

by Voiceofreason | 16th Jul 19, 10:58am 1563231490

Oh look, Bloomberg & OECD research says New Zealand property market is at risk of crashing. However, don’t worry because local “expert” property vested interest says they don't understand the NZ situation, the “bigger picture”. NZ is diffrunt you see.

https://www.newstalkzb.co.nz/on-air/mike-hosking-breakfast/audio/ashley…

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12…

by Chairman Moa | 16th Jul 19, 11:44am 1563234264

Yeah, trust Mike Hosking - he's the expert of everything!

by Voiceofreason | 16th Jul 19, 11:57am 1563235075

It’s not Hosking, it’s a OneRoof expert being quoted, saying the OECD and Bloomberg have got the NZ situation wrong.
“OneRoof property commentator Ashley Church believes there's no threat of a housing crash.”

by RickStrauss | 16th Jul 19, 12:21pm 1563236498

Ashley Church...what a familiar sounding name.

by Pragmatist | 16th Jul 19, 12:57pm 1563238675

A lot of our specuvestors worship at the church of Ashley..

by CN | 16th Jul 19, 2:51pm 1563245500

Some key points:

1) Ashley Church believes that property prices double every 10 years, based on the extrapolation of historical property prices for the last 40 years - refer https://www.youtube.com/watch?v=Agp9xFWoBX4
2) Ashley has a number of followers who believe he is credible as he has been correct about the last property cycle, and property prices
3) as he repeats this belief to his followers, they also believe this.
4) note that Ashley Church previously worked at the Property Institute of NZ, (https://propertyinstitute.nz/Category?Action=View&Category_id=44). We don't know if there are any potential conflicts of interest with his audience. Given his belief, it is very likely that he has a large portfolio of investment properties which were likely purchased many years ago, at much lower property prices.

There are a number of other property market commentators who believe that property prices double every 10 years, and they also have followers who believe this. Just saw another marketing video promoting this by Ron Hoy Fong. "After many years in the market, we can tell you that the property cycle in New Zealand goes around at least every 10 years. Another fun fact? Property prices in Auckland have had a tendency to double every 8-10 years."

As a result, this is a widely held belief by many property investors, who have taken on large amounts of debt to finance property purchases, using equity release / deposit recycling financing techniques (this is where the property investor takes on more debt due to the increases in property values of their investment property portfolio, to keep debt at maximum allowable LVR ratios. They use this new debt to use as a deposit for the purchase of another investment property purchase)

As a result of equity release / deposit recycling techniques, this has led to a positive property price feedback loop - higher property valuations, lead to more borrowing capacity, which leads to the ability to pay higher property prices, which leads to higher property valuations, etc. As property prices in Auckland (particularly houses) have reached high price points, property investors have moved into other geographical locations around NZ to continue to apply the equity release / deposit recycling techniques. For example, according to QV.co.nz, the average house price in the town of Kawerau has risen from $107,763 in June 2015 to $268,491 in June 2019 - that is an increase of 149% or 25.6% per annum in 4 years.

Two questions for thought about equity release / deposit recycling techniques:
1) what happens if the property valuations of their property portfolio stop rising (and the property investor is in negative cashflow)? - such as Auckland.
2) what happens if the property valuations of their investment property portfolio start falling (and the property investor is in negative cashflow)? - such as in some suburbs in Auckland

by Averageman | 17th Jul 19, 8:26am 1563308814

What happens...the house stacking system works in reverse and you pay all the costs.

by Milkyone | 16th Jul 19, 1:33pm 1563240798

Any analysis out of Oneroof has to be taken with an entire sack of salt.

The entire site is set up as an advertorial piece to encourage the idea that if you don't buy this very second, you will miss out forever...

by CourtJester | 16th Jul 19, 2:31pm 1563244275

Don't worry, there will be plenty of salt to go around when the market goes really sour.

by alittle | 16th Jul 19, 2:40pm 1563244831

“OneRoof property commentator Ashley Church believes there's no threat of a housing crash.”

this is not believing but HOPING or wishful thinking aloud.

by house hunter | 16th Jul 19, 11:08am 1563232087

A comment containing a link to an interview on an external site was deleted. That's a shame - it is great content and links like that are one of the main reasons I come to read these comments.

by Voiceofreason | 16th Jul 19, 12:00pm 1563235224

That’s a real shame, considering it’s encouraged above: “Any links to other news, data or research to shed more light on this?”
I missed that and would like to see it to decide myself if it’s relevant. Can you say in words without providing the link, so we can do a google search? Would that be acceptable to the moderator?

by Mrs The Point | 16th Jul 19, 12:12pm 1563235960

I didn't see it, but I'll take a guess that it was a link to DFA. They seem to have a hate on it here.

by Voiceofreason | 16th Jul 19, 12:31pm 1563237086

Ah right, pity, I’ve found the Joe Wilkes vids about the NZ situation on DFA to be valuable and very relevant to content on here. It is a dissenting view but very much based on up to date data, and a lot of previous experience. Dissenting views should be alllowed, this is not China.

by house hunter | 16th Jul 19, 12:13pm 1563236006

Big Buying from China

by Mrs The Point | 16th Jul 19, 12:16pm 1563236206

Wait, the Beeb is out of vogue here too?

by house hunter | 16th Jul 19, 7:15pm 1563261351

Maybe this link is OK? https://player.fm/series/business-daily-1301443/banning-foreign-home-bu…

by mikekirk29 | 16th Jul 19, 11:30am 1563233419

Yawn

by BacktoPerth | 16th Jul 19, 12:27pm 1563236847

No surprise... no one can afford houses in NZ. As Bloomberg and OECD pointed out, the unsustainable levels of property prices (highest in the World) may result in a crash. Why the low purchase rates... no one has coin to buy! Was laughed out the door of a mortgage broker ...my $80k per year in NZ, 2 years ago, only left a savings of $50 per week... "come back when you have a deposit of $100k" he said... no worries mate...see you in 2056!!!!

by Mrs The Point | 16th Jul 19, 12:38pm 1563237524

I am reasonably optimistic that things are going to improve for you. Around here some like to label that Doom And Gloom.

by Voiceofreason | 16th Jul 19, 12:51pm 1563238300

I’m optimistic that affordability will start to improve soon too. That’s not doom & gloom. Yes there will be much pain on the way down for sure, if highly leveraged, but a much needed correction will ultimately be healthy in the long run. The bubble needn’t have been this big but here we are.I’m keen to wait and buy (more) in NZ as it bottoms out. About 5 years is my current prediction for that. In the meantime, there are investment opportunities elsewhere in the world...

by BacktoPerth | 16th Jul 19, 1:24pm 1563240256

Thanks Mrs to the Point and Voiceofreason! Totally agree with you both... reason why I follow interest.co.nz is to follow up on NZ property news... in the hope that like what Ireland went through, so too will NZ's property prices- which will rectify to a sustainable level... in the meantime, will make some coin in Perth, ready for the 50% drop! Cant wait...

by house hunter | 16th Jul 19, 2:02pm 1563242576

50% seems a tad optimistic. I'm predicting 10%, and I'd say best case scenario is about 25%. In the meantime, enjoy Perth - great city.

by Voiceofreason | 16th Jul 19, 2:37pm 1563244637

It may or may not be that big of a bust, but sure there are certainly some extreme bargains at the bottom in any case, when hardly anyone is buying and there are many desperate or forced to sell. It can be cruel but that’s our capitalist boom and bust system. If you are going to Perth, there has been an average 20% drop across the whole market, but there’ll be quite a few price drops much greater than that.

by Mrs The Point | 16th Jul 19, 2:59pm 1563245963

You can pick up a bargain in Mandurah, but unfortunately the Meth capital of Oz. Some nice looking places by the canals.

by Chairman Moa | 16th Jul 19, 3:11pm 1563246679

Brisbane, after years of not going anywhere..
https://www.domain.com.au/news/brisbane-house-prices-set-to-rise-faster…

by Mrs The Point | 16th Jul 19, 3:24pm 1563247496

What sites do you use to look at property in Aus, Chairman? Anything like Homes.co?

by Chairman Moa | 16th Jul 19, 4:56pm 1563252964

The two main ones are Domain.com.au and RealEstate.com.au
domain has a very nice mobile app.
onthehouse.com.au will give you all sales history and other info

by Mrs The Point | 16th Jul 19, 5:41pm 1563255678

Thank you, Chairman.

by alittle | 16th Jul 19, 3:23pm 1563247424

Optimist for long term but for short Term is Doom and gloom ..part of any ecenomy cycle /Extremes.

For FHB very optimist provided they wait and buy sensibly in the current market, instead of rushing to buy the first available (Which was not happening earlier) as the earlier fear of missing out is so BIG (rightly as many did made money - enough to relax) that are not ready to take any chances / reasoning has failed.

FHB should not be conned by fake news/views by vested interest as are most vulnerable. What they are feeling as a good price now, will be expensive in future / Hindsight as this not the end of correction but just the begining. Buy they should and move in to their own home but now when getting an opportunity should take the maximum out of it.

by Averageman | 17th Jul 19, 8:22am 1563308535

NZ is at the mercy of overseas finance policy. If status quo continues then no massive changes as the air slowly leaks out of the top end. If there is an overseas event and the cost of money changes then significant change will happen. Lets face it theres not a whole lot of rates cuts left.

There have been a lot that said JKExit, Royal Commision, Trump, Brexit would all never happen. So potentially what will Boris=hard brexit, more trade war, Deutsche bank wobbles (or failure), Trump 4 more years look like...?

by theglc | 17th Jul 19, 1:10pm 1563325803

Interesting that for the same week last year B&T sold a similar % being 36% however the managed to sell 38 properties.

So selling just 26 this year represents a drop in sales by auction of 31% yoy

https://www.interest.co.nz/property/94818/major-auctions-sales-rates-ra…

by Basil brush | 17th Jul 19, 1:25pm 1563326732

I've been trying to find data that informs the discussion on correlation and causation between house volumes and prices. There doesn't seem to be much around but I've found this study comlpeted by Massey University. Although completed with data up to 2004 and accounting for a regional variance in Wellington it concludes with a reasonable level of confidence that declining house volumes lead to lower prices. If we believe that to be true then I guess the question turns to, "by how much do we expect prices to decline?".

Link here: http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.488.8221&rep=r…

Cheers
BB

by Boatman | 17th Jul 19, 5:58pm 1563343095

Well we should look at The Taxation (Annual Rates for 2019–20, GST Offshore Supplier Registration, and Remedial Matters) Bill .

This will explain the subdued housing market .

Basically , this Government does not want the private sector to supply any houses to the market .

And they are going to live to regret this Bill

This piece of legislation has just kaiboshed all and every person who ever intended to buy a rental property , from doing so .

Quite simply , only a fool would subsidize a tenant , and some simply cannot afford to do so anyway .

The ringfencing of the offsetting of losses should have been phased in , rather than being introduced in one smack .

by CN | 17th Jul 19, 7:43pm 1563349380

Boatman,

"only a fool would subsidize a tenant , and some simply cannot afford to do so anyway "

By "subsidizing a tenant", I'm assuming you're referring to owners with investment properties that are loss making or negative cashflow.

Weren't most of these investment property buyers focused on gains in the property price when they purchased? In an environment of rising property prices in Auckland (such as 2009-2017), they were willing to incur tax losses for a time, until rents rose sufficiently to make the investment property cashflow neutral / positive or until they had made property price gains.

In an environment of flat to falling property prices in Auckland (2017 to 2019), and if property investors expect these property price trends to continue, they might be less willing to incur tax losses which are ring fenced. Those with large excess disposable incomes might choose to hold on. Those with little excess disposable income may look to sell perhaps.

What are your thoughts about those owning loss making property investments? For those with little excess disposable incomes, will the loss of tax benefits be sufficient motivation to sell?

by alittle | 17th Jul 19, 6:15pm 1563344143

Anyone who has doubts about Foreign money / buyers

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12…

Can anyone still deny.

by swapacrate | 17th Jul 19, 10:53pm 1563360812

Desperate, Fire Sale, Quick Sale.

Maybe they haven't heard there is only one way for property to go, TTP best you speak to them and show them the error of their ways.

by CN | 17th Jul 19, 11:40pm 1563363656

This is an example of how land costs can fall. When land speculators sell to over optimistic property developers who over pay for land based on over optimistic selling prices of the end product.

Then the developer gets into some financial difficulty, or unable to secure development financing and becomes desperate and sells the land at half price.

The next purchaser/ developer of the land has a lower cost of land, completes the project, then sells the finished product at a lower price than the current developer was trying to sell their planned product.

Reminds me of the large amount of land speculation in 2005/2006 in Ireland - refer https://www.google.com/url?sa=i&source=web&cd=&ved=2ahUKEwiF3qWU7rvjAhU…