New Zealand residential property values are now rising even in previously sluggish markets like Auckland and Christchurch

New Zealand residential property values are now rising even in previously sluggish markets like Auckland and Christchurch

Residential property values showed sustained growth throughout the country over spring, according to the latest figures from Quotable Value (QV).

According to the QV House Price Index, the average value of all dwellings throughout New Zealand was $704,072 for the three months to the end of November. That's up 2.2% compared to the three months ended August, and means average values across the entire country have risen 3.3% over the last 12 months.

Even values in Auckland, where the market was particularly sluggish over winter, are on the rise. The average value of all dwellings in the Auckland region was $1,038,477 over the three months to November, up 1.3% compared to the previous three months. But that's still down 1.2% compared to 12 months ago.

All districts within the Auckland region recorded positive value growth over the three months to November, ranging from 0.4% on the Hibiscus Coast to 2.5% on North Shore - Onewa.

In Wellington the average value of homes increased by 3% over the three months to November, in Christchurch it's up by 1.7%, while Dunedin's average value is up a whopping 8.6% for the three months ended November, and up 17.1% compared to 12 months ago.

The biggest increases in average values over the three months to November have tended to be in rural districts and smaller centres, led by Whanganui +12.1%, Ruapehu +11.8%, Peninsular & Coastal Dunedin +11.4% and Rangitikei +11.3%.

Just seven towns or districts went against the trend and recorded declines in average values in the three months to November - Whangarei -0.2%, Matamata Piako -0.4%, Western Bay of Plenty -0.1%, Kawerau -2.9%, Central Hawke's Bay -0.6%, Hurunui -0.1% and Waimate -3.7%.

The table below shows the average dwelling values in all districts and their percentage changes over three and 12 months.

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QV House Price Index
November 2019
Territorial authority Average* current value $ 12 month change % 3 month change %
Auckland Region           1,038,477 -1.2% 1.3%
Wellington Region               735,507 7.3% 3.0%
Main Urban Areas               807,024 2.0% 2.0%
Total NZ               704,072 3.3% 2.2%
Whangarei 543,998 -3.4% -0.2%
Kaipara 562,222 2.5% 2.4%
Auckland - Rodney 940,524 -0.3% 0.7%
Rodney - Hibiscus Coast 917,512 -0.4% 0.4%
Rodney - North 963,374 -0.2% 0.8%
Auckland - North Shore 1,195,196 -1.7% 1.9%
North Shore - Coastal 1,371,335 -0.8% 1.5%
North Shore - Onewa 961,191 -1.8% 2.5%
North Shore - North Harbour 1,151,422 -3.6% 2.0%
Auckland - Waitakere 816,228 -1.2% 0.5%
Auckland - City 1,230,995 -0.7% 1.6%
Auckland City - Central 1,079,467 -1.0% 1.9%
Auckland_City - East 1,548,858 -0.6% 1.3%
Auckland City - South 1,093,795 -0.3% 1.5%
Auckland City - Islands 1,151,060 -1.7% 1.3%
Auckland - Manukau 894,401 -1.4% 1.1%
Manukau - East 1,136,387 -2.0% 0.9%
Manukau - Central 698,924 -1.1% 2.2%
Manukau - North West 780,142 -0.5% 0.8%
Auckland - Papakura 705,974 1.0% 1.5%
Auckland - Franklin 674,713 0.4% 0.6%
Thames Coromandel 776,137 2.9% 1.9%
Hauraki 442,841 6.9% 1.8%
Waikato 500,203 3.3% 3.0%
Matamata Piako 490,916 7.3% -0.4%
Hamilton 596,912 5.5% 1.5%
Hamilton - North East 741,551 4.4% 1.1%
Hamilton - Central & North West 553,099 7.0% 2.2%
Hamilton - South East 549,406 5.7% 1.1%
Hamilton - South West 534,227 5.4% 1.8%
Waipa 602,994 7.6% 1.6%
Otorohanga 365,667 25.4% 2.6%
South Waikato 267,781 9.2% 3.9%
Waitomo 234,247 6.1% 4.7%
Taupo 550,273 11.9% 4.8%
Western BOP 668,227 4.3% -0.1%
Tauranga 760,560 6.5% 2.3%
Rotorua 493,138 12.5% 4.5%
Whakatane 498,375 7.8% 3.8%
Kawerau 254,709 5.3% -2.9%
Opotiki 334,427 11.8% 4.4%
Gisborne 393,475 21.6% 6.7%
Wairoa N/A N/A N/A
Hastings 555,471 19.3% 4.6%
Napier 575,066 10.2% 3.9%
Central Hawkes Bay 382,992 9.3% -0.6%
New Plymouth 489,583 7.2% 4.2%
Stratford 309,464 14.2% 6.0%
South Taranaki 263,282 14.9% 5.3%
Ruapehu 251,701 25.4% 11.8%
Whanganui 330,754 19.8% 12.1%
Rangitikei 266,998 13.4% 11.3%
Manawatu 431,787 18.4% 5.6%
Palmerston North 476,516 13.7% 4.7%
Tararua 256,099 16.9% 6.9%
Horowhenua 397,673 19.1% 5.4%
Kapiti Coast 628,659 9.6% 3.8%
Porirua 633,093 8.2% 2.1%
Upper Hutt 588,796 15.1% 3.8%
Hutt 628,290 9.7% 4.5%
Wellington City 847,555 5.2% 2.5%
Wellington - Central & South 843,301 5.0% 3.3%
Wellington - East 900,189 4.0% 3.1%
Wellington - North 774,929 5.5% 1.7%
Wellington - West 967,184 6.6% 2.2%
Masterton 403,048 11.0% 3.4%
Carterton 464,308 14.4% 6.4%
South Wairarapa 547,348 9.0% 2.1%
Tasman 620,097 5.8% 1.8%
Nelson 637,766 6.7% 1.6%
Marlborough 489,732 4.2% 1.4%
Kaikoura N/A N/A N/A
Buller 210,479 9.6% 3.7%
Grey 223,185 5.7% 1.8%
Westland 266,504 6.7% 5.9%
Hurunui 394,759 3.3% -0.1%
Waimakariri 453,150 1.4% 0.3%
Christchurch 504,952 1.9% 1.7%
Christchurch - East 381,839 1.9% 1.0%
Christchurch - Hills 688,156 3.1% 3.0%
Christchurch - Central & North 594,335 2.2% 2.0%
Christchurch - Southwest 477,497 0.6% 1.0%
Christchurch - Banks Peninsula 541,760 2.8% 5.8%
Selwyn 557,791 1.1% 0.3%
Ashburton 364,842 2.8% 2.9%
Timaru 376,095 3.3% 1.9%
MacKenzie 584,456 8.4% 9.4%
Waimate 269,085 11.5% -3.7%
Waitaki 341,137 11.8% 6.3%
Central Otago 554,303 10.0% 3.8%
Queenstown Lakes 1,207,868 2.9% 2.2%
Dunedin 505,461 17.1% 8.6%
Dunedin - Central & North 522,839 15.6% 9.1%
Dunedin - Peninsular & Coastal 470,351 18.3% 11.4%
Dunedin - South 479,695 16.6% 6.7%
Dunedin - Taieri 523,808 18.3% 8.1%
Clutha 247,219 11.6% 4.7%
Southland 339,529 18.9% 5.6%
Gore 255,989 11.2% 5.7%
Invercargill 337,284 19.3% 9.3%

*The average value of all developed residential properties in the area.

QV house price index

Select chart tabs »

The 'Index' chart will be drawn here.
Source: QV
The '% change year on year' chart will be drawn here.
Source: QV

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Orr to Bascand
"I think it's best we surprise the markets with a half percent interest rate cut even though they only expect quarter. The housing markets are on the verge of collapse."

Biggest blunder of the year award.

Did Orr...........Erred

What next will know tomorrow

A half-percentage-point interest rate cut when rates are 2% is equivalent to a 2-percentage-point interest rate cut when rates are 8%. It's all relative.

That's basically true, but the principal cost of owner-occupiers blunts that quite a bit. In your example 8% to 6% is about an 18% drop and 2% to 1.5% is only about 6%.
Your statement is very true for investors however, and that's one of the reasons interest rate cuts massacre homeownership rates.

Can you please explain how you get to your % numbers? Thanks

Its the change in payments on a 30y(?) P+I mortgage at those change in interest rates.


What's Principal and why should I pay it? Asking on behalf of Yvil.

Wasn't the principal the guy they sent you to for a caning back in the day? Seems like a few of our regulars didn't get enough..


There may be a bit more life to come back to the Auckland market but I believe it will be short lived and I still believe we are in for a correction when this party comes to an end. The Global economic situation continues to get worse and when buyers and consumers alike wake up to the economic reality unfolding around them the property market will be coming off the boil big time. Only in the next recession / financial crisis will we be able to see how well our Auckland market will hold up though. It will all depends on what unfolds globally and locally if we have a moderate correction or a crash.


The Auckland property market is long overdue for a cataclysmic correction, when it happens look out, there will be zombie real estate agents and specuvestors running rampant in the streets. Then finally all those people who chose not to buy into such an obvious bubble, will be proven right and get an Auckland house for 300k, while they laugh at everyone else who is going broke.

In such a case I imagine interest rates would fall even further. That sounds great - if Auckland fell to 300k I'd buy six rentals! Given the eye watering rents currently on offer that would give yields around the 7% mark.

Nobody in their right mind would still be building properties in Auckland in such a scenario. If construction and all related economic operations in Auckland recede to a fraction of their current levels, how many businesses around the city would remain afloat? When that happens, who would you let out your 6 rentals to? Would the tens of thousands of migrant workers on temporary visas servicing the building industry in Auckland city still be needed.

So you're implying that if you lose your job you don't need a roof over your head anymore?


His point is that you don't need a roof over your head in Auckland if you moved back to live in India.

you do, but you won't be paying $700/week for a three bedroom house in Auckland to yourself, because you won't have the income for it. You'll be sharing with another family, or crammed into a 2 bedroom unit with a fold out bed in the lounge because thats what you can afford Or you'll be in state housing.

I read an article sometime ago regarding the great depression in the late 20s and that's exactly what happen, people couldn't afford to rent their own apartments or homes and most moved in with relatives or other families to reduce their costs ,hence ,significantly reducing the demand for new homes and rentals .
It would also be interesting to know how many people who have immigrated to NZ are associated with the building / construction industry ,in Ireland they created significant demand for rentals and when the work dried up they returned to their respective countries.

Lol, you think rents wouldn't fall along with property prices?
For property prices to fall that much it'd be a serious economic meltdown.. unemployed people don't have oodles of dosh to give to landlords. (And the govt would ramp up state house building to the max to get out of paying accommodation supplements and provide stimulus at the same time)


Rents are like house prices. They never go down.
NZ Herald has felt the need to remind us of this with yet another story about price predictions for 20 years out.



I read this earlier today - what absolute rubbish! Wonder how many fools will start buying (more) houses based on articles like this they read in the Herald?

Why is it rubbish? Because it's too big for your mind? that's not a reason, just like people couldn't believe it when house prices reached $10'000, most people were too narrow minded to contemplate the possibility that house prices could reach $20'000 let alone go to the crazy, unimaginable price of $50'000

Hi Yvil - happy to accept that houses could be worth that price in 2040, if you agree with me that they could also be worth only $500,000 in the same time period. If we're simply throwing numbers around then both positive and negative results should be considered equally likely outcomes. Fair call?

IO, it's a fair call but the RE market doesn't care about "fair", it reacts to more & more people needing to live on the same area of land, to ever increasing regulations and improvements in building materials, to rising wages to build a house and to finance available to pay for the aforementioned


So given our population density in NZ - our houses must be exceptionally overpriced given the number of people we have living in this amount of land. Same area as UK/Japan and look at their populations and property prices. And what about Australia? No more room for housing there eh so that's why prices are so high.

Nothing to do with greed, excessive debt creation, NIMBYism and human emotion (speculation).

Infrastructure and residential planning are two other major causes

Let them, so long as the inevitable bailout specifically excludes non owner occupied properties i'm fine with it.

and 1.5mill for average house in Palmy - now you know they must be taking the piss and thats coming from me!

Growth: 244% between 2019 and 2039

That's only about a 4.3% growth rate? That would seem pretty reasonable.

For the record, the rate is actually about 6.5% which would be pretty hard to justify.

Sounds eerily like the noises the bitcoiners were making shortly before it lost half its value in the space of a week......

Agree with you Shamino. Much as it would be really great to buy at $300k sadly it isn't just going to happen.
Just skudiv having a wild outlandish envious rant.

Actually just a skudiv parody comment.

Yes I'm just pointing at the economic impossibility of such a scenario. Somebody would obviously be buying at 900k, or 800k etc well before then.

Dublin wasn't far off the scenario you describe. To say something is impossible.....

And why would you buy an asset if you expect to be able to buy at a cheaper price in the future? Assuming that sentiment toward property will always be positive is not true. Trust me - I was living in the US during the GFC and watching the US property market tank.

I don't trust you, I never will nor should others. What about the moon? I hear properties are really cheap there

So you're now in the game of telling other people who they should trust because a persons opinion doesn't fit your confirmation bias? Prices in Dublin were probably quite cheap after the crash yes - and they could be if they crash in Auckland as well (I'm not saying this is going to happen, but we should at least consider that it is a possibility).

I was replying to your post where you say "trust me"

And if Elon Musks plans come together then we can start talking about property prices on the moon as well if you like?

Mars also?

Or Dublin?

"Yes I'm just pointing at the economic impossibility of such a scenario. Somebody would obviously be buying at 900k, or 800k etc well before then"

That assumes credit would extended to them to be able to buy.. or are you thinking people will be paying $800k in cash for investment properties.?

Clearly makes the assumption that people don't want their fingers and would jump at the oppotunity to catch a falling knife...truth...

Will those people who chose not to buy into an obvious bubble have jobs or a secure income to shell out even $300k for a house? 4 out of 5 pillars of Auckland's economy are highly-dependent on housing activity (construction, rental & real estate services, owner-occupier operations, financial services etc.). A cataclysmic correction in Auckland house prices, as you suggest, would push the region's economy into a deep recession.


Don't worry, no correction on the way, oneroof just told me average house prices in NZ will be $3m by 2040...

The Herald should now run a counter argument article to this and look at housing bubbles of the past and the outcome of these - giving readers a fair and balanced view of property markets.

They tried to, they couldn't find a crash in NZ in the last 40 years, when house prices were $10'000 and your granddad was saying that houses were way overpriced

How is your confirmation bias today? On a scale of 1 to 10 how strong do you think it might be with your comments?

Good to see you don't have a proper counter argument

Your replies are enough.

I saw that too and just about spat out my coffee........ a headline created from an anonymous RE agent... seriously a p!ss take

Last weekends Northshore auctions where I'm looking - sorry formatting has gone AWOL but -1.71% against 2017 CV

Similar suburb Sales Date Sell Price Nov 17 CV Delta $ Delta % on CV
Forrest Hill, 23a Sunnynook Road 1.12.19 $1,055,000.00 $1,175,000.00 -$120,000.00 -10.21%
Takapuna, 2/41 Francis Street 1.12.19 $1,137,000.00 $1,230,000.00 -$93,000.00 -7.56%
Campbells Bay, 20 Asbury Crescent 1.12.19 $1,855,000.00 $1,950,000.00 -$95,000.00 -4.87%
Milford, 2/38 East Coast Road 1.12.19 $1,461,000.00 $1,400,000.00 $61,000.00 4.36%
Hillcrest, 77a Ocean View Road 1.12.19 $1,385,000.00 $1,260,000.00 $125,000.00 9.92%
Birkdale, 34C Salisbury Road 1.12.19 $670,000.00 $690,000.00 -$20,000.00 -2.90%
Northcote, 66 Lake Road 1.12.19 $1,071,000.00 $970,000.00 $101,000.00 10.41%
Northcote, 2/47 James Evans Drive 1.12.19 $930,500.00 $1,050,000.00 -$119,500.00 -11.38%
TOTAL AGAINST CV $39,670,000.00 $40,360,000.00 -$690,000.00 -1.71%

Provided climate change hasn't caused the oceans to swallow NZ

Is this your subconscious hijacking your conscious skudiv?

so true

I tend to agree, but not many people will be laughing at everyone who is going broke. In the big correction scenario, it'll take the economy with it into deep recession, with high joblessness, and one or more banks may get into trouble needed bailout/bail-in. Nobody wants that, and the higher prices go now, the worse it will be when the bubble bursts. This is a big reason I've been looking to overseas investments lately. The outlook for NZ and Australia is really not looking good. You have to look beyond the the peak of this housing/credit bubble.

I've made a few investments in Europe and Japan recently after taking some profit from US to diversify a bit further. Yields are better there and some stocks of reputable comapanies with quite low P/E's.

NZ and US appear to be peak everything....AUS I'm not sure about - ASX200 hasn't bubbled like NZ and US. If you look peak to peak between GFC and now - ASX200 has only just returned to GFC levels....NZ and US are at multiples of GFC levels.

There was some speculation in a previous comments section about whether foreign buyers may be entering the NZ market via Singapore. For reference, here's the relevant exception in the FBB:

So such a buyer needs Singaporean permanent residency. I then looked at how hard it is to get Singaporean PR. The fastest way seems to be through their "Global Investor Programme":

According to one needs to invest 2.5m SGD (2.8m NZD) to be eligible for that program. I think I read somewhere that it takes about a year to get PR through this method. How long ago was our FBB introduced?

Housing market which was falling suddenly took U turn and started upward trend, surely something is at play and is not just low interest rate as interest rates were also low when it was falling. Nor summer time could be the reason as last year same time market was falling, if summer is the reason for trigger.

FHB are active but average FHB have limit that they can spend so are ruled out for the rise in million dollar house and investors in current ecenomy scenario where return through rent is not much nor any expectation of CG like earlier, could buy now and sell anytime for profit is missing so this sudden change does and should raise doubts as to who and what is fuelling the housing market.

Low interest rate are in itself indicator of how bad the ecenomy is and going forward also have concern so if the house price would have stabilized from falling over summer, could understand but sudden upward turn in demand and price should raise a question.

Hi richard
"upward turn in demand and price should raise a question"
I assume that you are talking of the Auckland market.
Could it be as simply that new listings are down and Auckland housing stock (properties for sale) is considerably (22%) down . . . . along with those other drivers - lower interest rates, continuing high immigration rates, improving rental yields and annocodatal information that investors are more active, the over 75,000 FHB over past three years, housing shortages etc - having an effect?
So no question really, and this market condition has been anticipated (and posted) for the past six months. Don't go looking for any conspiracy theory.

Hi Printer8

Have doubts if FHB could be the reason for sudden rush in million dollar properties in Auckland. At this junction sudden upturn so dramitcally is surprising and have doubts if it will be able to sustain.

FHB even if more than a million waiting to buy a house in Auckland, have budget constrain so despite wanting to buy expensive house will be unable. Wanting is different to affordability.

Again am surprised with this sudden such Strong up turn and may be surprised again if it continues from her on but have doubts.

Exactly Richard. FHBs who can afford $1 million plus is a small pool.

Not really. Couple comprising two mid-late 20s university grads earning ~100k a year would find it pretty easy to get into a $1+M property.

Not with $100k student loan owing

Approximately 5% of the NZ workforce earn over $100k p.a - that's across the entire workforce; all industries, 16-64, male/female.
Thus, a couple comprising two mid-late 20s university grads each earning $100k plus is quite a rarity indeed.

But hey, you can keep telling yourself nice little fairy-tales..

Also how many 20 somethings are ready to settle into that sort of commitment? Rightly not many

Not to mention that most of them will be paying back student loans of around $40k for a Kiwi student and $90k for overseas students. With that kind of debt to start off with it's not surprising that the young are struggling to buy a home.

Yes. I think people in well-paid jobs have a skewed idea of what is 'normal'. Averages are skewed by real high-earners. I don't know anyone in my cohort of highly-educated peers (late 20s, early 30s) who earns 100k. But then, they're teachers, tradies and artists rather than the finance industry types who are so important to our economy...

Lots of my fellow law graduates make well over 100k. They did it by moving to Australia, of course.

But as a proportion of the population that is a minority household.

$100k total, or $100k each? $100k each is a very high income, $100k total is going to take a huge deposit to get those numbers to work.
Best case is 2 x $50k incomes (less PAYE if both incomes equal). Take home pay is $765/week (each), mortgage payment on $800k at 3.39% (assumes 20% deposit) is 817/week, or 54% of take home pay. Thats really going to be pushing servicability criteria. And that assumes they have paid off student loans and saved a $200k deposit by then. Not impossible, but not "pretty easy" either. the vast majority in that situation would have been gifted the deposit, or fully supported at home while studying and no student loans taken out.

Hi richard
Maybe it is people trading up to buy that nice place before if goes up in price?????
With shuffles up the housing ladder, that is going to make lower priced properties available for FHB?
So no, like you, I don't think that FHB are buying $1m properties.

@ richard1965: Yes you're right and I think you'll find that "Something else is at play and is not just low interest rate", is due to dodgy money and facilitators such as certain Real Estate Agents ignoring the AML restrictions. And of course we know there's all that dodgy money foreign buying via the back door through Trust Funds that is still going on.

Yes, just keep pushing that conspiracy theory.
Don’t worry about a factual basis - just keep building on your wild baseless assumptions.

@P8: Ahh you're even funnier then usual. So are you saying that the information on our NZ Government website is wrong in your opinion? I think you'll find it is you that is wrong.

"Each year about $1.35 billion from the proceeds of fraud and illegal drugs is laundered through everyday New Zealand businesses". "Real estate agents are at risk of being exploited by criminals to launder money. They’re among several professions whose members may be affected by changes to the Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Act".

Please explain the so called back door through trust funds. Keep in mind that trusts are explicitly called out in the documentation and indeed the Act itself, for example:

Yeah, yeah it still doesn't mean that all of you REA's actually fully follow the AML guidelines.

"you REA's" LOL. Sorry to inform you CJ you are way off on that one.

So you're speculating that people invest in $2.5M in Singapore, wait a year to get PR, all with the ultimate intention to buy property in NZ? I suspect that people with the means and will to get PR in Singapore have many investment opportunities other than NZ property.

To be honest it seems like a bit of a stretch to me too. I saw the previous discussion, and thought I'd post some relevant facts here since they were lacking in the previous discussion.

RBNZ says that falling interest rate is a blunt knife......

Blunt knife has acted (Unintended cosequence) - Now will RBNZ act before house price flies off AGAIN - does RBNZ have any tool to control the housing ponzi (as if house prices were not already higher for FHB). Was reading the article and comments about how Procactive the current RBNZ governor is. If he can pull out a surprise to drop OCR by 0.5% instead of 0.25% to boost upwards surely can try and surprise tomorrow by some announcement to control the housing ponzi and help people specially FHB getting caught in big debt bubble Due to FOMO, who are bound to be worst hit in future, if this continues.


Stop importing people, we are on a hiding to nothing to try and even reach the number of builds where it will be just a keeping up exercise, nothing will change as long as we keep growing rapidly a population with fully formed adults needing houses as soon as their feet hit the ground. Two into one simply does not go.
Embark on (though already started) a massive state house build, accept there will be people who will need this sort of housing for most of their lives, if not all, unless something drastic happens with income to house prices ratios.
And STOP importing people!!!

It seems neither Labour or National are willing to reduce immigration.

Backbone of NZ ecenomy and is notjust National or Labour but even our friend Winston Peter (Who actually ask for votes on this issue)

Unfortunately its like playing poker and once you've gone all in there's no backing out.

Didn't you know that immigration is the backbone of the Auckland economy!


LOL, Ahh that one always makes me giggle. :) If anyone needs proof that high immigration actually reduces wages simple due to competition (Too many people for few jobs). You only need to look at the salary differences between main cities like Auckland and Wellington.
So here's Auckland Central average wages for the 30 to 34 year old bracket $1446 per week, where the median house prices in Feb was $1,000,000.
Now look at Wellington's higher salaries for the same bracket (30 to 34 year) $1693 per week and the median house prices in Feb was $765,000.So Wellington has higher wages then Auckland and lower house prices, so that explodes the rich immigrant theory.

Affordability report Auckland:
Affordability report Wellington:

Not talking about just rich immigrants, only talking about those that need houses, which is, of course, all of them. I do not think there is an argument that too many people for too few houses simply means homelessness and precarious situations. It has to change, and it will be impossible to change unless the inflow of people is severely stemmed.

Hi CJ099,

Still giggling....


Yes and I see you're still trying to gaslight everyone Ttp :P

Duh, 90% of economic growth is based on importing people. There is no way governments of any ilk could stop it or it would be political suicide.

They know just as almost every single one of us knows, it cannot carry on. I, for one, will be appreciative of a party or govt that explains both the up and down sides of cutting numbers drastically, then does it anyway. It has to happen regardless.

There is literally no way of stopping it. Labour and NZFirst campaigned on it and lied to our faces.

Game over for our country.

People have got to keep the pressure up, something will have to give eventually.

Yep to the point where we've given up on NZ and in the process of moving back to Europe. At least the business tax rate is much more competitive.

To those who do not like my continually quoting sales numbers and ignoring prices:

The reason for this is that I see rising prices as the PROBLEM.
I see price rises as a problem because they have risen too much for a healthy market, since 2012 especially.
They need to revert to a healthy median rise of about 2.5% pa, not 45% in 5 years.
The median price in Auckland rose about 120% in 10 years from 2006 to 2016, since when its been flat.
Wages obviously did not rise 120% in 10 years.
So, buyer numbers fell and the % of Auckland households not renting (owner occupiers or mortgaged) continued to fall, shutting lots of people out from home buying. This I see as undesirable.
Large price increases are also not in REA interest as they reduce sales numbers and this increases the ratio of salespeople chasing fewer sales.
Finally, price being too high means investors able to leverage to buy have advantage, as in other asset classes reliant for expansion on cheap debt financing. This increases rate at which rich get richer as more houses are owned by a smaller segment of society and rented out. People renting out their houses want prices to rise, as this increases leverage they can borrow with. People who already own (the largest group of whom are over 65, in % terms) also like to feel secure in knowledge that the value of their home is going up, esp if they want to bail out of Auckland with a nice and totally un-earned equity pot for sunny climes elsewhere in NZ. This is also an unproductive avenue for wealth to be created in and does nothing for potentially employment providing business expansion which banks do little for because they see business lending as more of a risk with no collateral to seize if problems occur. So, there you have it, that is why prices are not my bag.

Mike, capital gain is not unearned income, just like share market rises!
If investors in Auckland are negatively geared why do you think people shouldn’t get some capital gain?
In Christchurch you get both, positive returns plus capital gain!

capital gain is not unearned income

"Unearned income" is just a term coined by Henry George.

Capital gains are a form of passive income some argue are unearned, though this is a great point of contention between all the various economic schools of thought.

Interesting you left out the Wikipedia supersecript "[citation needed]" when quoting that...

And, it is not of any contention that capital gain is not the product of labor or individual input. Thus why it is in fact universally referred to in the economics literature as such.

And the same people who desperately defend the right not to have their unearned income taxed (CGT), the Mark Richardsons of this world, tend to be VERY upset about the unearned income of beneficiaries. Sure, the dole ultimately comes from taxpayers; but your capital gains ultimately come from the pockets of renters or young families, how is that better?

Of course, Capital Gain is unearned income. And as with ALL income, it should be taxed. Personally, I reckon that tax should be on a Realised basis, but I'm not fussy if it's on an Accrual basis. And, yes, even the sacrosanct Family Home should be treated as such for taxation purposes.

Old fashioned me: earned means earned at work, for a wage or a salary.
Capital gain is more luck than work. Its extent is governed by degree of leverage and that is determined by capital base that bank is assessing borrower on. Thus, huge majority of capital gain on property that owner is not living in, is gained by about 35% of pop max.
Meanwhile median wages in Auckland are lousy and have not risen anywhere near as much as prices in last decade.

For once I agree with you mikekirk.
Since the early 80s there has been a distinct change in nz society resulting in greater inequity. Think highly inflated wages for a few, and poor wages for those at the bottom half of the ladder. That thinking apparent in Employment Contracts Act of the 90s. No CGT is another example. Could go on

You make it sound like a rite of passage.

"If investors in Auckland are negatively geared why do you think people shouldn’t get some capital gain?"

Or - If I borrow money I should rightly expect someone to give me some for free.

hi mikekirk
Your premise and methodology is faulted again.
For a start, in considering affordability you have focussed just on wages and over-looked factoring in the low interest rates.
Also start considering all the supply and demand factors.

Please answer a plain question:

WHY, if things are more affordable than in 2012 (much lower interest rate and lower % of average wages) have sales in Auckland fallen 32%?
Especially given that stock is up 6.5% and pop up about 200,000
You refer to supply and demand. This v much depends on statistical accuracy of what we are given by various compilers of stats, which as you know, is not of good quality recently in particular.
Lower interest rates, as I have pointed out repeatedly, have NOT succeeded in raising amount of property (not land, I refer to housing ) sold this year.
The sales in parts of Auckland have risen in last 2-3 months in comparison to 2018 but overall Auckland sales remain lower than in 2017 and in fact are running, over last 9 months, at a rate BELOW 2009.

Hi mikekirk
You clearly like numbers - nothing wrong with that.
However, it is just how you use them. A lot of your calculations are simplistic and based on very selected data and avoid the more complex nature of the market.
For example, a few weeks ago, I think you were predicting a crash in the Auckland market based on the decling number of sales from about 2017 onwards (and the current state of the market suggests that in the short term future the exact opposite may well be happening). Your calculations are not necessarily valid as you fail to consider factors such as LVRs, and tightening of the brightline test (two important factors) that were intended to slow - not crash - the market. So a slow down in sales is not surprising. For your calculations to be valid you need to factor in these and other influences which your calculations ignore. Simply, rather than a crash, data suggests that the turn over could be well due to simply returning to a pre-boom levels; i.e. less speculation and flipping and more to due to buying and selling due to necessity (such as job transfers) and the lack of new lisitngs and housing stock support the likelihood of this. Just because there are fewer sales, it is a prettty superficial assumption that decling sales means that we are heading towards a crash.
I note your comment that the number of sales have recently picked up but are still below 2009 - maybe, but what is the factor affecting this. Clearly people have recently (pst couple of years) been hesitant about trading up when the market was in some decline so it is not surprising that over much of this year are down on 2018 and 2009 - however, in the last two to three months there have been signs tha the market is firming so it is not surprising house sales are picking up in the more expesnive bracket as people regain confidence of what the market is doing. So don't get too excited that the rates are BELOW 2009 (your emphasis) means a crashing market - it is just currently likely a turning market.
Equally you are suggesting a crash as houses are over priced to wages. As I pointed out; you did not consider low interest rates in that calculation. We could take this further; maybe we are seeing social change in that there is going to be an increasing number of middle class permanently renting - after all if affordability is an issue then someone (landlords probably) are buying or retaining these houses. Home ownership of 80% is exceptionally high compared to many countries - especially European.
Are houses overpriced and a crash likely? It is possible, but to draw that conclusion one needs to consider the multitude of factors. For example, are interest rates likely to remain low for longer - possibly as NZ mortgage rates were only high (7% plus) from about the early seventies to 2010 prior to that they were around 3 to 4%, and during that period of higher interest rates NZ rates were considerably higher - and still slightly more so - than most countries including Australia. What effect will the the gloabl economic headwinds have - after all the GFC meant a simulus in equity (shares and houses) markets. As previously posted, with falling interest rates my wife (retred) reluctantly pulled money out of no hassle term deposits and bought a rental property - how many others similar to her will move (back) to property as the global winds hit, interest rates go down further.
I make these comments not as each being a definitive defensible statement - rather as examples of how the market is more complex than a singular simplistic calculation.

Hi Printer,

Appreciate the detail and trouble you have gone to in your analysis.
I will not go on to answer all your points.
However, please do see my reply to Yvil below re "crash" which I did not predict.
Also, house ownership in NZ is not 80% and certainly not in Auckland.
In 2013 (last feeble figures we have as census not rebased for Auckland yet) it was 64% in Auckland.
It will certainly be lower now.
Interest rates relative to inflation is different to what it was in 1970s and 1980s. That is real interest rate.
I am not predicting a crash, merely reversion to the mean, a very commonly accepted scenario in asset markets.
Prices do rise over long periods, but not linearly.
You also, in common with huge majority, think that interest rates will remain low.
Bond market bubble cannot last forever I am afraid.
Interest rates will rise because inflation will rise. Why will inflation rise: China price evaporating and its food prices and abysmal wheat harvest in USA together mean much higher prices next year.
Being accused of being over simplistic I find v amusing.

Hi mike
No problem - home ownership was up around 78% at the time you were talking about. I am well aware that it is now sadly 64% and falling.
Personally I would like to see it back up there but as I have previously posted - and this was my point - we seem unlikely to see home ownership up around there again in the forseeable future.
We are going to have an emeging renting middle class while interest rates remain low, house prices high on that (and other) reason, and the necessary deposit sadly beyond FHB; however, this doesn't mean a housing crash as you suggest, just a renting middle class.


It blows my mind that the organisations responsible for economic stability, themselves have created the instability (reserve banks with this crazy low interest rate experiment, blowing asset bubbles).

Whats wrong with a healthy recession to clean out unsustainable elements to our economy? What's healthy survives a recession, what isn't doesn't....we learn and we move foward in a more sustainable manner.

Instead we're kicking the can down the road and making the unsustainable sustainable in the short term, but causing a lot of long term pain....madness in my opinion....

Thats how the free market is intended to operate - survival of the fittest. Coupled with only necessary govt intervention to stamp out anti competitive behaviours and exploitative practices, that is in essence what capitalism should look like.

Yip it's a 'free market' that is being manipulated by interest rate controls....but will see how long that works out for I guess.

I can't wait for the boomers to start crying out for interest rate hikes so they getter better rates on their term deposits (after they sold their rentals to the next generation at peak this space).

Comparing type of sales and price between Sept 2018 and Sept 2019, for Auckland, I found following (see also my post this morning on LinkedIn):

Total residential sales: 1728 v 1727: Flat.
Apartment sales: 205 v 294 (- 30%)
Sales of property with 3 beds: +4.6%
Unit sales: +23%
Townhouse sales: +52%
4 bed sales: - 4%
5 beds or more: +15%

sales over $1.5m: - 20%
sales 650 - 800k: +8%
sales 800-1m: up 15%

Total overall sales: down 1.4%
Section sales up 1% and lifestyle blocks down 17%

This indicates that stuff that is cheaper and smaller (except apartments, which are mostly sold in central Auckland) are rising and bigger and dearer stuff is falling, overall, whilst total sales are flat.

September, also, was an improvement compared to previous 6m and 9m comparisons.

The cheap stuff selling is mainly in South Auckland and Papakura.

Apartment sales in Auckland in Sept 2017 were 251.
In 2019 it was 205.
An 18% fall.
Meanwhile lots more apartments being built.
Does this not imply over-supply?

By way, total Auckland sales in September 2017 were 2502 and in Sept 2019 it was: 2468.

So, I do not think I will get too excited by the hype re "firming market" and "uptrend"
Cheaper stuff is selling more, yes.
But biggest gainer, within the overall STATIC sales total, is that priced between $800-1m, which between Sept 17 and Sept 19, gained by 22% in sales total.
Townhouses were up 24% and units sold up 23%
Smaller and cheaper is getting built more and its selling more, with apartments suffering.
Probably because many of apartments sold in boom of 2014-16 were sold to students from abroad.
Notice in Barfoots report yesterday that they were v quiet about their awful stats on Auckland Central (20 v 90 last year)

Wow, there is a lot of anger in the comments and denial of this article saying values are going up. I'm not casting a judgement wether it's good or bad that values are going up but I'm acknowledging the fact that they are. To those who say house prices will go down at some stage, well they will, I agree, we might not be alive anymore though, it's totally pointless to make this kind of statement without putting a precise time frame on it. Look at the graph provided, house values increased more during 2002-2007 than 2012-2017. It's just the normal cycle and I think One Roof are very much on the money when they predict average house prices of around $3Mill in 2040. The fact that this number is too big for many to conceive is not a reason for it not to happen (just like many couldn't conceive house prices getting over $10'000 40 years ago. Also the fact that most won't be able to afford a house isn't a reason either, house ownership is sadly going to continue to be increasingly for the wealthy

In 2002-2007 sale went UP. In 2012-17 they went down. That is a bit of clue that in latter period the reason was that they were too expensive for a great number of people.
Forecasting more than 6 months ahead is a joke in price terms, in current world environment which bears on credit terms.

You're still replying about number of sales when my post was clearly about house values.

Also I did make a forecast back in September that house prices will reach all time high prices in March 2020 (so 6 months ahead), you replied they will be down. We shall see in April (for the March data)

Seems that for your benefit I must continue ad nauseam to restate what I ACTUALLY said which was:

House price median in Auckland will fall by end of 2021, by 25% from its high of $900k of March 2017, to $675k.

Please make a note.

It does NOT say , now or previously, that I forecast any "crash," or that they will be lower in March 2020.
I do expect and predict indeed, that over-supply will drive down prices in phase 5 of housing market down cycle.
This will be main driver of price direction in second half of 2020.

Mike it gets a bit boring and annoying having one's views misrepresented doesn't it

I did not say in my post above that you claimed house prices were going to crash next year, but yes you definitely, absolutely said they will decline from February 2020 and that's why I have been calling you out numerous time about the March figures. Be straight up and honest, don't change your narrative as time passes, have some integrity

Prices will drop from April 2020
Global causes and local causes

So you pushed it back from February 2020 to April 2020, not very honest

Show quote. And stop questioning my integrity

by mikekirk29 | 1st Nov 19, 8:16am
"same amount (number" of buyers?"
Sales were higher in September than last September.
Prices will go down, after February reveals no Spring or Summer "bounce"
By the way, "bounce" in my definition means "higher than year previous" not higher than winter.

I think if you read that more carefully, you'll realise it doesn't say what you think it says.

I agree I was merely citing Yvil's source to further the debate.

Thanks for fishing out the quote NZDan, much appreciated

Yes, thank you.
Note it says "prices will go down after February" NOT in February.

House prices were too expensive for me as a FHB in 2006, they weren't too expensive for me in 2013, despite them being more expensive. The market will do what it will do. What it's unlikely to do is crash as the herd mentality of home owners tend to resist sharply falling prices. It may yet meander along at small percentage growths and falls for another decade or more, but it won't collapse.

Have you read any books by the likes of Robert Shiller and Nassim Taleb that explore herd behaviour/behavioural finance? Can you explain the herd mentality in other housing bubbles around the world where prices dropped sharply? Did home owners resist these prices falls with special powers?

"Denial" that house prices are going up. How can you deny it? See this image, which clearly shows how much prices have increased in Auckland over the last 12 months:

Yvil - My 2 cents worth I'm 62 and this is the start of the 6th cycle I have lived through.
At the age of 12 my folks paid $12,500 for a North Shore home 7 years old. By 1974 it had doubled everyone thought well that well never happen again.
By 1982 it had doubled again so in 1983 I bought my first house. That same house is worth 1.1mil.
Will it continue ? there is NO reason to doubt it so I'm staying in the market and from the low listing rates seems alot of people think the same.
Of course people will say wages are not keeping up but they haven't for 40 years !
Where's the money come from ?? The banks are great at creating it !

100% yet so few can see it. Maybe it's because many think "it's not fair" or "many can't afford it" but these are not real reasons

They are real reasons if they grow to affect a significant enough group of the population.

"I think its not fair" = Voters will demand something be done about it, and policy will change (if enough people agree its a huge distortion)
"Many can't afford it" = you can't spend what you don't have.. well, not for long anyway.

Now that we are effectively at zero interest rates to keep this shitshow on the road, its going to be "interesting" to see what happens when the next economic downturn comes along.

On subject of "upturn" in Auckland housing market:

Total sales January - September 2108 v 2019: 24,570 v 21, 848 (-11%)
Total sales April - October 2018 v 2019: 19,696 v 17,705 (-10.1%)
Total sales June - September 2018 v 2019: 10,547 v 10,101 (-4.2%)

So, last few months is less worse than the 9 month comparison. NOT better than 2018 in any comparison.
Less rhetoric and more facts would be nice from those claiming market "improvements"

Price rises are only an improvement for those WITH property, not those trying and hoping to get some.

Was keeping an eye on few houses in auction yesterday and noticed that houses that were asking too much above CV or even near CV in million or even 900s Plus range had no bidders or limited interest and now have come to market with asking near around CV - still no interest so most probably will go below CV.

The steam of positive sentiment that started two months back, it seems is fadding but now again most vendors are expecting are high price (Based on last 2 months sale) will be disapointed and will need time to come to terms - In RE Agents language - Meet the market.

Game on. Wait and watch. Intersting time ahead.

See no reason for the market to move up in current scenario but it went up in last 2 months - will it continue have doubts , so should be stable but again in this environemnt it will be either up or down (not Stable/Flat) so if not going up will be falling - Not Crashing but falling - soft landing, how it was before September.

This property was of interest to a family member. Had 10,000 views on Trademe before the listing expired last month - price dropped 10% over that time. Relisted back at the original asking price into the 'buoyant market' and after nearly 4,000 views this time; still nothing.
So yes. General interest and 'Asking Price" ( for what that's worth!) are fading. Where to from here? It depends on how 'keen' vendors get! ( My guess? They'll take $900k , 20% off)

Similarly a Family was interested in a house that was listed earlier having a CV of 960000 and was purchased in 2016 for 975000 and at that time when listed earlier was hoping to get million to come out without loss or minimmum loss (At that time would have sold at a loss - less than purchase price)

Listed again and with high expectation as the market is up but still the auction failed and now have lisited for 1068000 - hoping to use this window opportunity to come out without lose but have doubts :

So is the market really up or was and now is comming to terms, again.

Meanwhile, in Wellington houses are selling for 200K over 2018 RV

Idiot of the year award goes to Adrian Orr.

For enforcing capital requirements to the OZ banks?


and 1.5mill for average house in Palmy - now you know they must be taking the piss and thats coming from me!

Growth: 244% between 2019 and 2039

Lastly on the great acceleration in Auckland: time series

9 months Jan - Sept 2017 v 2019: - 1.7% for total sales
6 months April - Sept 2017 v 2019: + 1.9%
3 months July - Sept 2017 v 2019: + 2.1%

In absolute numerical terms, in last 3m sales are up 157 pcm compared to 2017.
In 6 months they are up 288 pcm
In 12 months they are down 43 pcm

Not spectacular, more of a slight improvement on 2017 (which was a bad year and also slowed by election)

The 2018 v 2019 series shows:

12 months: down 303 pcm or - 11%
6m series: down 247 pcm or - 8.7%
3m series: down 44 pcm or - 1.7%

October, according to REINZ, was virtually identical to October 2018 in sales terms.

Needs to be borne in mind that hosing stock is increasing each year, so % of total stock sold is in fact going down.

As listings are falling, perhaps we must now wait until next sales push (seasonally speaking) at end of January.

Why Auckland market is over-supplied and prices will fall to end of 2021:

Ownership figures for NZ in June 1999: 69%
2018: 58%

Much higher at age 60 of course, but no detailed figures for that to hand.

if anyone has them, I would much appreciate it?

How is it unearned income when landlords are spending their own time doing repairs and improvements to their property that they are not charging for?
Personally don’t give a rats if people think that it is unearned income, the fact is that if you are prepared to invest wisely and put in your own time, you will be rewarded and you can’t tell me that jealous property doom and gloom merchants wouldn’t want to own a property portfolio that has made them financially stable??

"Unearned income" isn't supposed to be an insult.

The Earned Income part could be considered the return that is gained from 'use' of the asset - ie: rent income. (At best, technically it's also Unearned Income, but let's assume that your tenant has a productive job, and so it's Second Order stuff!)
Capital Gains is unearned income because any landlord ( not you) could 'buy and sit and hold" - do absolutely nothing - and still realise a Gain. That's Income of the Unearned variety, and just as Earned Income is taxed - the rental stream in a rental property situation, ( even if it's offset by Negative Gearing!) so should ALL Capital Gains be taxed.
Improvements ( you doing the place up) is also Unearned Income. The bit that you use in your tax return ie: the cost of materials etc. might fit with Earned Income, but just because you CHOOSE not to charge yourself for your labour ( you could pay someone else to do the same thing?) doesn't mean that it magically turns Unearned Income into Earned Income.
If you want to make your own effort Earned Income you could pay yourself 'a wage' and declare that for Income Tax purposes - just as an employed tradesman would ( or should! 10/1 most stuff is done as 'cash jobs' - yet another use of the property market for illegal purposes), but the change in price of the asset remains - Unearned Income.

We do have tradesmen that we use, however all of the other maintenance etc. things that we do we don’t get paid for.
No I don’t charge for my labour as I would only pay tax on it anyway

It is obvious you don't understand what 'capital gain' actually refers to.
What you are talking about is maintenance and value add. Both of which should be taxed.

No I don’t charge for my labour as I would only pay tax on it anyway
Sounds ominously like a tax avoidance scheme to me. If only all laborers could access the same privilege.

You what?
Tax avoidance, what are you smoking?
I do repairs or maintenance myself and you think I should be paying tax?
You have seriously lost the plot!
I haven’t charged myself for doing the work.
If Someone does the gardening on their own home do they pay tax???
I don’t have to pay someone for something I can do myself!

But your argument is there is no such thing as unearned income and that you do all the repairs and maintainence yourself. Annnnd you don't want any capital gains taxed..
Thus, you are reaping the reward of no tax on your labour - Something a normal electrician or similar can not benefit from.

By all means keep yelling at that wall, though. It listens.

You sounds like an angry man - did you have an argument with your "model" wife before typing this reply?

Nope, he walked headfirst into a chch pothole! Just kidding.

Chairman, not angry at all.
Very contented, just need to it the record straight

It's fun and games until The President says "no more buying and bring the money home"


2012 - 2017: av Auckland household income up 28%
2012 - 2017: Auckland house prices up 78%

Years to pay mortgage off for median price house:

2012: 10.8 years
2017: 15.9 years.

Proportion of income spent on housing: 2012: 17.8%
2017: 17.6%

So, mostly it is affordable but takes 6 years longer to pay.
Lots more interest for the bank.

Attached document stacked with data.

2012 - 2017: av Auckland household income up 28%
2012 - 2017: Auckland house prices up 78%

Years to pay mortgage off for median price house:

2012: 10.8 years
2017: 15.9 years.

Proportion of income spent on housing: 2012: 17.8%
2017: 17.6%

So, mostly it is affordable but takes 6 years longer to pay.
Lots more interest for the bank.
Owner occupation in Auckland in 2013 was 61.5% and in 2017 was 59.5%

All data from Beehive stocktake of NZ Housing, which I am having difficulty attaching!

This is just a mere bull trap created by the OCR cut

Major world economies are on the brink and when (not if) it all come tumbling down, investors will go to safe havens, super funds will be forced out of bond markets as they turn to junk, liquidity will dry up, off shore funding will get expensive looking for premium returns for the new risk. Jobs will be lost. Interest rates will rise. Defaults and mortgagee sales will become common place. House prices will crash!!!

Sounds pretty dire, but I cant see how it will be avoided!

Is it really that bad?
Nations seem to find ways to muddle through.
I'm not saying there isn't some pain coming. However history suggests that governments will pull out all stops to minimise damage.

However history suggests that governments will pull out all stops to minimise damage.

That is exactly what is happeing globally now. The Japanese govt has also "pulled out all stops" and is "muddling through". The Nikkei has never recovered and the property bubble never returned.

Yep but they are muddling along ok

Great comment Fritz!
For theglc's comment to have any value, he needs to tell us WHEN things will head south, we could still have increasing asset prices for 10 years so saying their value will go down some time is utterly useless

When China and world stock markets have their debt implosion in late 2020 and it lasts til 2023 and asset prices drop like a stone. Or perhaps you think that world debt to GDP ratio over 300% is sustainable and healthy and risk free

Or perhaps you think that world debt to GDP ratio over 300% is sustainable and healthy and risk free

Jerome Powell says it's not sustainable (in the U.S. context) while at the same time he can't see any bubbles. Go figure.

Well you only need to look at what the Fed is doing in the Repo markets to control pricing. China is pulling similar strings over there.

There are many corporations living on debt in the"hope" one day they will turn a profit and need to reissue bonds to stay afloat, if we make it through 2020 without a massive economic event it will be a miracle.

Lots of Corp debt coming due next year and expect a lot to be downgraded to junk.

If you think governments can hold if off for another 3 years you probably still believe in the easter bunny

Yes UK muddled through but national debt rose by over 100% as government bailed out banks. Plus 7 years austerity in which those who had nothing to do with what caused GFC took the consequences

Yep, thats what i'm counting on. The fundamentals are, well, mental.. but the PTB will (keep on) pulling out all the stops to engineer a soft landing/bail-out rather than a crash when the SHTF. I can deal with property values going sideways or slowly down (1% a year?) after we buy, but a complete meltdown in the first few years after we buy would wipe us out.

The bulls are too optimistic and the bears are too pessimistic.
Some tough times will arrive in the next 2-3 years, I am sure of that, and house prices will fall, potentially by 20%. But all stops will be pulled just as they were in the USA during the GFC

Why would a meltdown wipe you out? If you don't sell, which you shouldn't be planning to do anyway, it makes no difference even if the property value falls to a dollar. Just wait it out for a few years and then enjoy the upward phase of the cycle. Far from a "wipeout", for those few years of recession you'd actually be enjoying lower interest rates than you would've otherwise. Just be sure not to lose your job.

So the banks will turn a blind eye to home owners sitting in negative equity? Give them a free pass for a while? Just keep paying your mortgage it'll be fine? Good to know thanks!

Tell Pragmatist, he thinks he'll be "wiped out". By the way, banks will let smart people pay interest only too. You've learned two things today.

Sure, when the cheap credit fuelled bubble ends, credit will still be cheap and handed out like candy at Halloween. Can I interest you in this bridge sir, only one careful owner, premium location in the bay, think of the possibilities... :)

The fundamentals are crazy for sure, but that's partly because we're looking at them in terms of the median multiplier. But maybe it helps to understand things by considering the growing wealth inequality. This excellent video describes the US situation and I suspect something similar is happening in NZ:

The key point being that as wealth becomes more imbalanced the median income (and median wealth) becomes smaller relative to total wealth. So maybe the house prices aren't the only problem here. Maybe not even the main problem.

All about cheap money. Fix the debt based speculation by bringing in the capital tax and not taxing income. Check TOP out.

TOP's extremist tax policy would send productivity through the floor, cripple the economy and cause capital flight like never seen before