House prices were generally firmer in November but sales volumes were stronger in Auckland than the rest of the country, REINZ says

House prices were generally firmer in November but sales volumes were stronger in Auckland than the rest of the country, REINZ says

The residential property market looks like it will finish the year on a firmer note, with prices generally rising and sales more buoyant in Auckland.

However the total volume of homes sold in November, which is the most important indicator of the state of the market, was down 1.9% compared to November last year but up 4.3% compared to November 2017.

But the main exception to that was Auckland, where November's sales were up 8.7% compared to a year ago and up a whopping 19% compared to November 2017, the Real Estate Institute of New Zealand's November data shows (see the interactive graph below for the sales trends in all regions).

In the rest of the country sales were down 6.1% on November last year.

Prices were generally firmer with record median prices being recorded in Waikato, Bay of Plenty, Hawke's Bay, Taranaki, Wellington, Nelson, Marlborough, Canterbury and Southland.

Median prices were down compared to November last year in Northland and Tasman, while in Auckland the median price hit its second highest level ever in November at $885,000, just below the record high of $900,000 set in March 2017 (see the interactive graph below for the median prices trends in all regions).

Within the Auckland region price trends were mixed, with the median price setting a new record of $1,030,000, while Franklin was flat on $702,000 and on the North Shore the median was $985,000 - down 6.2% on November last year.

"The Auckland market has seen prcies increase for three months in a row, suggesting that we're now entering a new normal for the country's biggest real estate market," REINZ chief executive Bindi Norwell said.

"Increasing levels of confidence in the property market coupled with low interest rates and a lack of choice of new listings means that people are prepared to pay more for properties than they were a few months ago," she said.

Homes are also selling more quickly, with the median number of days it takes to sell a property dropping to 33 days in November from 35 days in November last year (see the interactive graph below for the full regional trends).

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Volumes sold - REINZ

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Median price - REINZ

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Days to sell - REINZ

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

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177 Comments

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12
up

"However the total volume of homes sold in November... is the most important indicator of the state of the market..."

I don't think that's right, Greg. Make sure to consult our local experts here before you say things like this. Total volume of homes sold is actually not an indicator of anything at all.

12
up

DGM forlorn. )-:

Their (false) hopes have been dashed away........

Merry Christmas everyone!

TTP

You can do better than that. At least use the right form of "their"!

With the reality of your very limited economic acumen dawning on you and left with absolutely nothing of substance to contribute, you resort to criticising grammar. And stewing after reading stats that prove their own world view to be woefully misinformed, no less than five of your angry DGM buddies have decided to upvote you. I hope that brings you a little bit of happiness. But just a little.

He just said I was sad, and then draw a sad face, and he got 11 upvotes.

Ttp moron

Name calling is a very effective method of communication.

Skudiv , Thats what he/she called alot of people the other day, just passing it back

Apparently abusive commentary isn't welcomed. But it seems to be tolerated...

It's very dull to read and I do wish it would stop.

You're guilty of it Frits and then you go act all innocent.

Hi TTP
Auckland median up 2.9% YOY; new record median for November; Auckland HPI up 2.1% month, 3 months 3.7%, 1 year 2.7% 5 years 6.5%.
Those FHB who purchased during the year will be well pleased. Drivers are still there to indicate that this firming in the market will continue. I wish them well.
For those potential FHB who are frustrated at getting a deposit together, I do feel for you.
TTP, as you indicated, only sad news for the DGM who were predicting a bubble burst (where are you Joe Wilkes among others?) and a bubble leak (where are you Retired Poppy?). The common thing about the majority of DGM predictions was that they were unsubstantiated and never considered the factors influencing the market.
2020? As the current drivers are still there (high immigration, housing shortage not being adequately met by new builds, low interest rates) I see the Auckland market continuing to firm - a 2 or 3% increase in prices over the year likely which the RBNZ will gladly live with for economic stability reasons, but any increase above that could see tightening of LVRs in general or specifically to Auckland. For the regions, I see slowing of what have been hot (belated compared to Auckland) rates of increase and as the price differential with Auckland closes the rate of increase in the regions will slow but still likely around the 2 or 3%.
Of course there is uncertainty; for example if any of the current drivers change (seemingly unlikely) then that would impact on the property market. The odds of a signifcant crash with blood in the streets (as still pushed by some) is unlikely. If so the issues around housing would be only one and possibly a smaller part of it - considerable job loses, collapse of businesses, etc would be part of it. I have always advocated that one needs to be prudent and pay down debt to lessen risks that are either widespread or personal.

Those FHB who purchased during the year will be well pleased

And that highlights part of the problem with bubble economics. They will feel "well pleased" because they will feel "richer". If, on the other hand, "prices are down", they will not feel so good and that might even impact how much they spend on their next consumption occasion. Given that NZ's economy is overwhelmingly based on how much people spend at the till (or how much debt they're able to swallow for that consumption), this impacts everyone. This is "the devil" of how debt-driven bubble economics work: changes in how people actually behave.

If it never pops can it still be called a bubble?

If it never pops can it still be called a bubble?

Not really. That is when you have an unbreakable bubble. There seems to be a consensus that NZ and Australia have discovered how to achieve this ( including a privileged banking system with the ability to lend into existence with as little capital as possible; laissez faire immigration policies; as many market distortions as you can stack). The only thing that can take down the unbreakable bubble is that what cannot be seen. Seems to be the case with most bubbles.

"Unbreakable bubble" sounds like an oxymoron to me.

Yea. 100% made up term right there.

A bubble is defined as the irrational expectation of future conditions. It is pretty much as you say; if this is the new normal, is the term bubble appropriate.

A bubble is defined as the irrational expectation of future conditions. It is pretty much as you say; if this is the new normal, is the term bubble appropriate.

How about the "unbreakable new normal"? It is correct to say that bubbles aren't really evident until after they "burst." For example, nobody really could see the end of the Japan bubble. Everyone thought that it was due to the unique nature of the Japanese economy and the culture. Another example, the bubbles leading up to the GFC in the U.S. were described as a "new normal", even by the great Alan Greenspan himself who was convinced that he had found the elixir for creating endless wealth (Greenspan did later admit he was wrong).

It is correct to say that bubbles aren't really evident until after they "burst."
Nope. Wrong. Empirically bubble detection doesn't rely on a 'burst'. It just relies on some fundamental explosiveness.
Sure, bubbles are easier to spot once they have burst. But there are still plenty of methods for identifying them before that point.

Not sure I agree. Your empiricism relies on assumptions. For example, if I were to define a "house price bubble" as say >1 standard deviation from a mean of long-term prices to income, then I could say NZ house prices are in a bubble. It doesn't mean I have empirically proven that a bubble exists. Like others have said, it could be "new normal" or a fundamental change in how prices behave.

Yea, but that's not how they are detected. The properties for which to identify explosive time series are a bit more complex than that.
Using an over simplification does not an argument make.

There is quite a big literature (all pretty much established and still spearheaded by a NZ econometrician) on this and the empirical approaches developed are now quite widely utilised as early alert tools for explosive asset behaviour.

So you're saying that bubbles cannot be measured against long-term central measures of tendency? Most explanations of bubbles after the fact tend to emphasize this.

Could you please point to the "official empirical bubble detection literature" for NZ? Would be really interested to see it.

No. I'm saying that based on the time series properties of asset prices, they can be identified prior to a 'burst'. And it's not based on arbitrary "one standard deviation from a long run mean" sort stuff.

Bubbles/asset price explosiveness literature is extensive. One google search of the topic with PCB Phillips will get you all the theory. IIRC there is work using explosiveness tests to identify house price bubbles for NZ too.

Great. Thanks. Will definitely look it up. BTW, my example of 1SD from the mean was not provided as a econometric solution to identifying bubbles.

More likely they will be sweating, if they are aware at all. The change in 'value' may filter through to their rates assessment and/or their insurance premium which may increase their costs and screw with their budgeting. Especially if they are doing it tight.

It will be the specuvestors who will be pleased.

Hi JC
You have a really basic misunderstanding.
If house prices go down is does one "not feel so good"? No!. I had a rental properties go down purchased in 2004 and based on RV in 2008 it had gone down 10%. It didn't make one iota of difference; same house, same rent income. I sold in 2016 for a substantial capital gain. Same for FHB, if price goes down same for FHB; same house same payments for mortgage and rates. What you don't seem to understand is that property (a home especially) is a long term investment. Similar to the share market and KiwiSaver growth funds, they are long term and short term fluctuations are expected but in the long term it doesn't mater.
However, why did I say that FHB will be pleased? Again really, really simple. They would have bought on a market lower than it is currently - i.e. they would have needed a bigger deposit and a bigger mortgage to buy the same house today. Surprising you don't understand that.
Your comment regarding impact on the wider economy, sorry, it just sounds like envy talk to me.

You have a really basic misunderstanding.

Nope. I am talking about the impacts of consumer spending in housing bubble scenarios and / or rising house prices. It "is" one of the most important pillars of the NZ and Aussie economies.

The Reserve Bank of Australia has a good paper on exactly what I'm saying.

https://www.rba.gov.au/publications/bulletin/2019/mar/wealth-and-consump...

Another illustration of the correlation between house price growth and luxury car sales. Lovely example of the wealth effect.

https://www.afr.com/policy/economy/luxury-cars-following-rising-house-pr...

I'm pretty sure the market is going to crash next year, probably around 30-40%. It's pretty much a certainty because prices are so high it's unbelievable, and I already sold my house at the peak (2008) and now I'm just waiting for the market to crash so I can buy it back again for a massive profit.

Shorting the housing market, nz style, is a risky manoeuver.... it doesnt work just ask CJ099

TTP - And where is that RP character gone ? Everything has gone the wrong way for him, house prices, Term Deposits ! LOL

Hi Shoreman
Talking of whereabouts; a more recent DGMer, mikekirk, where is he today? Just like Joe Wilkes, he is into great meaningful calculations (his specialty being sales volumes) and three months ago was stating quite that falling sales meant an imminent market crash of the Auckland market.

Come on, man, just scroll down a bit.

TTP, DGM has been very silent since the market predictably picked up, another one bites the dust?

Hi Yvil,

I'm told that the DGM are too busy with their pre-Christmas junk mail delivery rounds.

At least they're out working.......

TTP

Really... Calling people morons, and now assuming 'DGMs' are all poor people who need to do jobs that you no doubt find demeaning. Just shows what kind of person you are.

Well I guess signing off every comment with your username initials does scream entitlement

Yvil, after some people's constant bullying, name calling and constant condescending tone, you're surprised we're reluctant to comment? You guys did everything to discourage us from sharing our views. Now you suddenly miss us? Look at the way you and your buddies TTP and Houseworks talk to anyone who has different views than you. Reflect on your actions.

Definitely not missing you guys

Yes their false forecasts have been dashed on the rocks of argyle (aaargh guile that is)

I will save my merry christmases for a week or so TTP. It's been a good good year for house buyers.

I am forlorn, my hopes of owning my own home and having it paid off before retirement are being dashed away. Thanks for rubbing it in.

.

Auckland sales up. NZ sales down

Think how valuations are done ... based on price not volume ... all it takes is one or two sales to show a comparative. If its higher then your valuation is too.

I'll take HPI over volume, but each to their own.

HPI (prices) important to sellers and buyers who are 99% of us. Volumes important only to REA for commissions and job security.
Maybe those besotted with volumes and feeling gloomy are REAs?

The HPI is pretty reliant on volumes too, if you want to actually make any inference from it. Or don't you understand that, printer?
It's hard to have a nice, smooth, low volatility HPI when volumes are low.

.

No problem with it at all nymad.
Are you inferring that the current firming of the market is just a blip in poor data and that the market is on a downward spiral?

Not inferring anything.
My point was that in order to make inference, you need to satisfy some statistical assumptions - which becomes easier in sample size.

So when you say volumes don't matter, it is an exposition of your lack of statistics knowledge to even a 6th form level.

How good is life when the only thing you think there's to look forward to is an international recession?

Please have some empathy for the DGM........

TTP

Just curious; have you actually bought a house yet TTP or investment property?

TTP; can you actually, really imagine just how bad life is for some people that they'd welcome an international recession over the current environment? Your sarcasm and constant condescension is actually disgusting.

Some of his recent comments actually violate the rules here. But no ban, no deleted comments, no warning from the admins... Apparently only Joe Wilkes deserved that.

Come on, a lot of these commentators are quite wealthy.

Nothing is an indicator of anything, the only truth is personal experience and opinion.

Indeed GGP, quite right!

To put things into perspective there have been 10 better November months for sales volumes in AKLD this century, despite the massive population growth over that time. So still far from boom times.

Certainly the OCR cuts are doing the trick for now, lets see how long it lasts

There is a good chance a Global recession will be avoided for now. The optimism from this partial Trade deal along with Central banks now performing record levels of QE and Governments spending shitloads on infrastructure may just be enough to kick the can down the road a bit. I guess time will tell but I am far more optimistic on things in the short to medium term now unless we see the US Repo market crisis get worse, a hard Brexit occurs or a black swan event of some sorts pops off to impact the Global economy further. Expect to see higher levels in stocks and further life in the Auckland property market until the end of summer next year if there aren't any curve balls. 2020 elections may cool things from mid Winter onwards for a bit. NZ economy still one of the best economies in the world right now. Risks still remain but things are looking a bit better out there in the short term.

Adam, the lift in NZ house prices has nothing to do with international matters, it's all due to local factors

Not necessarily.

I never said it was although Global factors do play a part in it all.

Geez thats a long bow to draw

Look at all the corp bond defaults happening. expect a heap of downgrades to junk next year., which means a lot of pension funds and managed funds wont be able to invest in them any more.

The rolling repo market prop up by the Fed might have to become permanent.....

Sooner or later we are going to have to take our medicine

I agree but for now the recession is delayed. We are in for a huge downturn when this party comes to an end but it may be a while off yet as Central banks and Governments kick the can down the road.

Of course there will be a recession at some point. But the DGMs on this site, yourself included, imply it is imminent year after year based on nothing more than their hopes that it will happen, a refusal to learn from past trends, and a bizarre inclination to think that every bit of negative international news that they see on the internet applies more to NZ than the country that negative event actually occurred in. A bunch of blind squirrels that will one day randomly find a nut and then have the nerve to claim they were right all along.

Given NZ a small and open economy, It is not that property prices are becoming more affordable. IT is that NZ's productivity and therefore real wages increase cannot keep up with the rest of world.

What seen as a luxury by NZers may be seen as a bargain by the rest of world.

The great NZ house ponzi scheme continues...2020 will be a classic when the music stops.

The great DGM comments continues . . . . 2020 will be a classic when they finally stop.

Exactly: Casino economics as practised by the RBNZ. OCR nearly cut in half again in 2019 from 1.75% to 1.00%.

Not such a great Xmas gift for bank depositors - According to the Reserve Bank, the new capital requirements mean banks will need to contribute $12 of their shareholders' money for every $100 of lending up from $8 now, with depositors and creditors providing the rest. But as the head of the ECB recently sneered - "We Should Be Happier To Have A Job Than To Have Savings" But not too much GDP.

The majority of bank credit creation in the UK (same in NZ) is not even used for transactions that contribute to and are part of GDP, but instead is used for asset transactions. They are not part of GDP, since national income accountants require a ‘value added’ for inclusion in GDP, not just the shifting of ownership rights from one person to another. When bank credit for asset transactions rises, asset prices are driven up, because the loans do not transfer existing purchasing power, but instead constitute an increase in net purchasing power: money is being created and injected into asset markets. When a larger effective demand for assets is exerted, while in the short-term the amount of available assets is largely fixed, the price of assets must rise. Link

.

The point is, when a house increases in value, it is exactly value add and this is going to give a massive boost to GDP. I don't think Labor needs to worry about kiwibuild anymore, with the economy doing so well everyone will be able to afford a house at any price.

Skudiv: What you're talking about is an 'false economy' built on credit not a real economy built on actual earnings.

Do you want to explain how houses prices impact GDP and who told you this?

Really shows how tense these comments sections have become that people can't recognise the obvious sarcasm.

Really shows how tense these comments sections have become that people can't recognise the obvious sarcasm.

Sarcasm or the trolling?

Either way, he doesn't actually think that house prices impact GDP...

OK, so he or she might be trolling. What a surprise.

Yes that's a good point Audaxes. I will also be be interesting to see what impact the latest Westpac fiasco will have on regulations and how that will further impact banks profits. Article: Scandal-hit Westpac chairman admits bank was 'slow' to stop money laundering
https://www.9news.com.au/national/westpac-money-laundering-scandal-chair...

Frazz, the music hasn't stopped for the last 40 years and nothing is going to change

Blinkers on!

So Ireland and USA cant happen here. Who's more foolish the fool or the fool who follows him?

@ Frazz: Well mortgage interest rates won't be able to fall much further to prop up house prices, so when they do rise again there will be a very noticeable slow down in property sales. This is likely to happen sooner than we think due to the pressure that the Australian banks are under to clean up their act.

Recommended reading for believers and atheists in the interest rates/asset price dichotomy: https://ig.ft.com/repo-rate/.

What if your interest rates spikes by 8%? Will your asset price survive?

subscriber only content.

Ah, sorry. A quick Google on 'Repo Rate Spike' should do it for anyone interested in following the story. (i.e. theres an unpaywalled version of the FT article in organic search).

Somebloke, if interest rates were to spike by 8% many, many mortgage holders would lose their house, banks would go upside down a deep depression would follow. That is exactly why interest rates will NOT increase significantly (sure maybe +0.25%… +0.5%). Now what conclusion do come to from this, about asset prices?

I would conclude that asset prices are maintained at artificially high levels by interest rates held artificially low.

Indeed. And how long can this support be maintained? I don't think it is indefinite as Yvil assumes. Sooner or later things will revert to fundamental levels. The questions is when, and how fast.

That's where we "fundamentally" disagree

You're assuming that governments will always have the ability to underwrite private risk taking, and if you've based your career or current financial success purely on what has happened since around the turn of the century, that would be a fair assumption. However, governments fail regularly in keeping control of their economies, and careers do last more than a couple of decades. In mine, globally, I've witnessed first hand several major property market meltdowns, financial market crashes too numerous to mention, and mass self-delusion on an epic scale (I've made capital out of many of them, and continue to do so, so I don't have any sour grapes - the masser the delusion, the more I amass). I just think its good risk management to always question your own financial assumptions.

No mention of HPI in article? Quickly look in REINZ report (https://www.reinz.co.nz/Media/Default/Statistic%20Documents/2019/Residen...) says up 2.7% YoY for AKL? Or did I misread due to being in a hurry?

Yep, HPI for Auckland region finally went higher than its late 2016/early 2017 peak.

That's pretty crazy. Gotta wonder if a loophole in the FBB has been found.

Note that Singaporeans ARE exempted from the foreign buyers ban. The bulk of Singaporeans are Chinese by race, and one of the richest people, being the most competitive country in the world. As stated by another commentator, what is perceived as crazy house prices may be seen as "bargain" by people from other parts of the world. (Typo error corrected; "are NOT exempted" changed to "ARE exempted". I meant to say that Singaporeans are exempted and therefore able to buy properties in NZ).

Yes, aware of that thanks. There was speculation in a previous comments section that somehow Hong Kong money was coming into NZ via Singapore. I noted that one could essentially "buy" Singaporean residency by investing about 2.8mNZD in Singapore. Btw that's cheaper than the analogous price of NZ residency which can be attained by investing 10m NZD here. It all seemed a bit far fetched at the time, but these latest prices also seem somewhat surreal. And we know there has been a recent spike of people coming into NZ via the 10m route, so maybe it's not so crazy to think something similar is happening in Singapore.

https://www.wsj.com/articles/western-cities-want-to-slow-flood-of-chines... (Paid so may not be able to read) : https://www.wsj.com › articles › western-cities-want-to-slow-flood-of-chines...
Jun 6, 2018 - In Vancouver, Chinese home buyers snapped up properties so fast in 2016 ... Officials imposed a 15% foreign-buyers tax, and Chinese buyers turned to ... in April, Bao Yingqi of B.Y. Realty, was, in fact, making a pitch for Montreal, .... made through companies or local proxies that obscure a buyer's identity.

TRUST / COMPANIES / LOCAL PROXY could be one way of beatingthe FBB

Interesting article published in 2018 : https://www.ft.com/content/5dca923a-1895-11e8-9c33-02f893d608c2

Lot of channels to send money - Parallel economy is very strong and not hard to find proxy when dealing in millions and hard to catch as whathappens with job offer letter to get PR - Big Scam.

I imagine a proxy is even harder to catch if the proxy is external to NZ, i.e. Australian or Singaporean. Presumably that makes it harder for NZ authorities to drill into.

"The Auckland market has seen prcies increase for three months in a row, suggesting that we're now entering a new normal for the country's biggest real estate market," REINZ chief executive Bindi Norwell said.

Hope he is correct for all FHB in Auckland specially, who are entering the market now by streching their budget. Though market is strong, no denial but based on their opinion many may be influnced to go beyond and buy FOMO, hopefully is not a propganda to maintain the same momentum in future - Maintaing the current price increase seems doubtfull as houses were already unaffordable and now with this rise of even few % will kill hope of FHB and in absence of foreign money, will be interesting to see who support million dollar house and for how long.

Wow. At the end of last year predictions were called for. Some commenters put specific numbers on their property price predictions. Who came closest? Looks to me like it was one of those scoundrel spruikers who shall remain nameless...

https://www.interest.co.nz/news/97512/will-current-prosperity-last-will-...

Wasn't Retired-Poppy | 31st Dec 18, 11:15am
By December, Auckland property prices come in at -6%, NZ overall -2%

RP come back and explain this or at least tell us your excuses

.... and here is your 2018 forecast RP
"by Retired-Poppy | Sun, 31/12/2017 - 09:37

Here's my predictions for 2018 .... Auckland property prices fall another -5% by December, nationwide -2%. Provinces following Auckland - down."

We can at least say that you're consistently wrong

Wasn't Trapped Millennial | 31st Dec 18, 8:24am

2019 prediction. Not positive reading by me. Might be a closet DGM.
*S&p 500 -32%
*Nzx 50 -24%
*NZ House prices yoy decline 6.7% starting April 2019.

Wasn't Hardly | 31st Dec 18, 8:51am

• Auckland house prices are down at least 5% on November 2019
• Interest rates rise in NZ (OCR and retail rates)

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Wasn't CJ099 | 31st Dec 18, 9:19am

Auckland's property prices will continue to slide especially in the upper price brackets
Immigration will probably decline gradually
Oh and I wouldn't be surprised to see a 'empty home tax' brought in for AKL
I think you'll still see it 15 to 20% lower than it was at it's peak in early 2017 for AKL,

Ahh sad Yavil spends all his days trolling, But have you forgotten so quickly that Auckland's house prices did drop and are still below the 2017 peak prices. You even admitted that yourself! :P
Hey and guess what, prices will drop again as soon as mortgage interest rates rise.

I think you misspelt "I admit I was wrong"

Wasn't The Insider | 31st Dec 18, 9:27am

By 2019 end:
1 year fixed interest rate 8%.
Most share markets around the world down 40%.
Some banks showing signs of going under.
Average house price down 20%

What was your 2019 prediction Yvil? You seem to have correctly called a few things during the year. Interested too see what you thought would happen? Cheers.

Wasn't Pragmatist | 31st Dec 18, 12:17pm

REINZ HPI for Auckland down 5% YoY,
REINZ HPI Nationwide basically flat YoY, due to the regions catching up somewhat to Auckland prices before starting their decline.
1 OCR rise next year, in the first half, then no more rises, but mortgages rates will be up 1% to 1.5% anyway.
S&P 500 down 10%, Nasdaq down 15%+

Thanks Yvil, those made me laugh

Hi Yvil / Due Diligence,

I laughed too!

The DGM all turned out to be crap forecasters. Well and truly!

Heaven help anybody who believed them.

TTP

There was a theme to all those phoney forecasts, the contributors were sucking from the same used WHINE bottle. Do you want to take a bet that the DGM crowd come up with another crazy bunch of forecasts this NY eve

Thanks Yvil

"…in Auckland the median price hit its second highest level ever in November at $885,000, just below the record high of $900,000 set in March 2017"

Could we see a record high in March 2020?

Not unless mortgage interest rates drop much further to continue to prop up the false economy. What would be interesting to see what happen to the housing market when interest rates rise. My guess property prices would slow down again.

Interest rate will not fall in years to come as this low interest rate are their to stay and the moment anyone tries to raise will be a disaster and economy will have recession that the world has never seen before. So this new low rates are the new norm now untill we test negative interest.

When rates turn negative, it can contribute to a sense that markets are stepping “through the looking glass”, as Scott Clemons, chief investment strategist for private wealth management at Brown Brothers Harriman, said recently. FT article: The downside of negative interest rates
https://www.ft.com/content/7efcedb4-ea25-11e9-85f4-d00e5018f061

If we're going into negative interest rates and giving away money on the taxpayer, may as well just build everyone houses. More of a useful handout.

Yvil - Yes I think we will and you called it !

Thanks Shoreman

Just an observation :

My office have about 20 people working who are originally from India and of 20 I know of 12 who have bought house with land to build another house on that and have paid a premium to get those houses and those who were not able to do by self have joing with friends to become builders. Were encouraging other in office also to enter so assume that this is the new craze in Indian community.

May be in other community also but if appox 60% of Indians in my office are doing am assuming that this will be the trend - Herd Behaviour.

I mentioned in a previous comment that we had a Deceased Estate to realise mid-year and I'd hoped for ( but not expected) a bounce to sell a difficult property into. Well, guess what nationality the buyers was!? ( they must work in your office!)
Here's the thing that gave me pause for thought at negotiation time. The buyers were getting their loan from their friend, also from 'your office' who was a loan officer with one of the Big 4. Could mean absolutely nothing. But if in the future I read something along the lines of "Loans given out to family and friends based on suspect valuations" it wouldn't surprise me! ( NB: Have a look at the ANZ "Get a Home Loan Advisor" ad on TV and look at who the lending office is, and who the advisor ( the young woman) is!)
https://www.macrobusiness.com.au/2019/09/indians-behind-melbournes-house...

So It confirm that is what is happening in Auckland market.

Last boom led by ...... and this one (If it takes off) by .......

Chinesse were and are already into this type of development and with deep pockets.

Like it or not but another boom is and has come. Bad news to FHB (Will be a distant dream specially in Auckland to own a decent house) and Good News to all home owners and speculators.

https://www.oneroof.co.nz/news/37062

Infact FHB should stop even dreaming for, if this boom kicks off as are wasting their time in Auckland unless are ready to pay premium and compromise with life for pigeon hole.

Also many who voted for Labour for CGT, now what and whom will they vote - any choice as et the end of the day everyone is same - POLITICANS be it JA or Sir JK.

The graph comparing HPI of Chch to Dunedin is unreal, both were at about 2'400 in 2017, now Chch is still at 2'400 (+-0%) and Dunedin is at 3'600 (an incredible +50% in 2 years)

I feel sorry for all the young people in Dunedin. They got caught in this insane frenzy and many lost their hope of ever owning a house.

I would not believe anything the REINZ says. They are full of self interest.
I say bring back John Key,
He knew how to inflate house prices by 25% per year to keep us investors and home owners happy!!

I can imagine National's future campaign slogan now: "Vote for us! We'll sell NZ off so fast, to any foreign power it will make your head spin!"

"Vote for Jacinda Ardern, like your favourite aunt, giving you a shoulder to cry on during emotional hardships. The most important thing for low-income voters. Nothing else matters, including the economy."

Interesting times, as always. REINZ commentary suggests that with fewer properties on sale there's been more competition for those available. Sounds like it's more prevalent in some areas of Auckland than others (Auckland City doing the best, Franklin the worst at -1.1% YoY).

Rolling twelve months, Auckland sales volume 1,252 down on November 2018 (total 21,546).

Any thoughts from folk as to why so few people are trying to sell in Auckland?

Not so sure if Auckland city is doing that well?? Auckland is still selling below the 2017 and some places they're still having to almost give away looking at the latest auction results. Example: 3E/100 Anzac Avenue, Auckland Central. recently sold for $180,000 July 2017 RV value $280,000

Be careful with those apartment values - may be leakers and/or leasehold. Auckland City values will be difficult to read over next couple of years as more and more low priced apartments come through each month in the REINZ data as sales finally settle. Has been a huge volume of apartments under construction that will complete and settle over the next 12 months. Apartments should be split out of the Auckland City data as a separate category. Even in Manukau many low value apartments now coming through the data which distorts the average/median prices.

It's not just apartments that can slip in price, even at auction. Here's another example: 11 Walmsley Road, St Heliers, Auckland City. Rating Value (July '17) $1,400,000, sold for $1,270,000.

Reluctance by many to sell in Auckland when there is nothing much available to buy as an alternative and highly competitive. Not easy to get a short term rental either when you have kids, cats and dogs and the rental market is tight with tens of thousands of temporary work visa migrants arriving in Auckland. So sellers are staying put and hoping for fresh listings in Feb/Mar/Apr - but that hope may be forlorn. Auckland potential sellers have the feeling that the market is about to take off so why sell when you could get much more later. Meanwhile Auckland investors sitting back and enjoying interest rates that have dropped massively and rents that have increased massively. Those home owners that may have been struggling with the mortgage are now sweet with 1 year rates of around 3.39% or if they plan to stay put for a while they can be pretty comfortable with a 3 year fixed rate of 3.84%. Many feel that as the election gets closer and with a strong belief that National will be back in with house price boosting immigration policies that there is no rush to sell. Auckland has been flat from 2016 until about mid 2019 so a boom run was always just around the corner.

I've noticed many of the same houses from earlier in the year now being relisted for sale, looking like they didn't sell earlier. Seems like (and the auction prices vs. RV give this impression too) that there's competition for the few houses that are very nice and in very nice locations, whereas more typical stock has not seen the same competitive demand. Albeit maybe with lower volumes offered and lower volumes in recent times FHBs may have faced competition with each other too.

Mike Kirk?.. Hello Mike?… we can't hear you… are we loosing you, Mike? Joe? Will you be re-born soon?

Let it go
Let it roll right off your shoulder..

Hi Chairman Motor Moa,

That's a rather cutting remark, old chap.

TTP

merry xmas to you too.. !

Not able to analyse much today as computer being repaired. However plainly sales and prices rising in Auckland

The part of your computer that registers price has been broken for quite some time now. Please ask the technician to sort that part first.

Lame. Price obsession is held by those with plenty.

The RBNZ couldn't help throwing more petrol on the fire. What a pack of utter c****.

Orrsome for speculators!

Trying to save cash strapped farmers.

Boomers exiting Awk for sunny regions. Cheap cash helping speed investors.

Interesting to hear Greg saying volumes are most important indicator of the market.

12
up

Gosh, this forum has become a cesspool of vitriol. Some of you are behaving like bullies at kindergarten. Grow up!

Christchurch is the sleeping giant, and about to be woken up.
The Canterbury median is very misleading as it should just be Christchurch seem it is easily the second largest city in NZ by population.
It is also skewed by the many “AsIs Where is” properties that continue to be sold in good numbers.
The median has risen in Canterbury again but bear in mind that Christchurch is going to be the growth city for years to come as people head south from Auckland.

Third. And shrinking...Wellington, for some unknown reason, is 2nd and growing. Those who left Christchurch after the 'quake, and have re-established elsewhere aren't going back ( why would they?). Eventually, those who've 'held on' will also leave. ( like our son and his family- they're looking 'selling up' and moving to Australia. Sure, just one family, but he's spent all of his adult life there)
https://en.wikipedia.org/wiki/List_of_cities_in_New_Zealand

Bollocks, Christchurch is more populous than Wellington itself.
You can’t include people that live an hour and a half away from Wellington as being part of Wellington, or we can include people that live in Ashburton to Timaru as being part of Christchurch!!!!
Christchurch is growing quicker than Wellington as well.

You'll have to ask the residents of Ashburton or Timaru if they want to see their house values plummet as a result of being included as part of Christchurch.

Exactly. It's garbage which is why I never comment on house prices on this website anymore. It's toxic, and boring.

And some people(?) here wonder why the so called DGM's aren't that active. Whenever we comment something (or even if we don't) we get called morons, assumed to be poor and miserable, talked to like 5 year olds.
There are quite a few people here who think everyone is a miserable, malicious, blubbering idiot who expresses an inch of doubt that the housing bubble will keep going forever. What's worse is that they feel the need to resort to personal attacks instead of discussing the matter at hand.
I'm happy to talk to people who believe in the Property Clock and the infinite bubble, as long as they don't talk to me in a condescending tone.

It's been like this for a long time. An internet bully circlejerk. Not worth wasting time on.

Check out the balance sheet of The Federal Reserve, the answers are all there!

https://www.federalreserve.gov/monetarypolicy/bst_recenttrends.htm

Sad truth is, printing money through institutions will only widen the wealth gap. Debt is doomed to go higher, interest rates lower, vicious cycle...

UBI is the rescue!

Sad truth is, printing money through institutions will only widen the wealth gap. Debt is doomed to go higher, interest rates lower, vicious cycl

Yes, and part of the "sad truth" is the unintended consequences. This is really the unknown factor. Not really sure that most people understand that with these kind of monetary experiments.

Unknown or inconvenient really? Wall Street has much more lobbying power and probably knowledge what’s gonna happen, in the end “most people” doesn’t matter....

There’s too much bickering about market predictions in these comments. If the market is rising again (and still rising in increasingly expensive regional areas compared to income) from current elevated levels, with more and more credit being pumped in, perhaps people should be talking intelligently about what that is doing to the market and economy, instead of insulting each other.

Bravo. I'm interested in what it's doing to the consumer sectors of the economy as manufacturers resort to price discounting and promotions to meet incremental sales. If Australia is any indicator, it's damn tough out there.

You are correct. House market is gaining momentum again and from now, where as it is House in Auckland were beyond FHB.

No one is able to pin point the reason - Low interest rates many commented (even experts) but even earlier interest rates were low and now another.2% or .4% low and this0.2 or 0.4% should not be the reason for this jump (Law of diminishing return) same demand/Supply which has not changed overnight and foreign money is not at play or is it ?

" Foreign money is not at play or is it ?" Yeah of course it is and probably always will be just depends on how dodgy that money is? Doesn't matter how much regulation they bring to control dodgy money, they'll find other ways of gleefully help facilitate it in to our property market so they and make a quick buck. You might want to read this article and scroll down to the section on REA's. North and South article: Taking us to the cleaners.
https://www.noted.co.nz/money/money-property/taking-us-to-the-cleaners

One more reason a land tax is useful. Social services can be availed of without paying local income tax, but land taxes cannot be avoided in such ways.

It is a shame but hard reality.

Everyone knew but as that was / is the backbone of NZ economy kept quite and also all decession maker/politicians/ media / many so called experts - all had had vested interest so.....even now whatever little or more has been done is because of international pressure.

As far as housing market is concerned - data or no data everyone knew / knows that housing boom in NZ was fuelled primary by Chinesse offshore money. Any one who is not ready to accept is for have vested interest and is a liar ....be it politicians who were running the country at that time. NATIONAL PARTY POLICY : DENIAL / LIE / MANIPULATE.

To be honest Labour too is no different as once in power will do the same be it JK or JA.

Labour though introduced FBB but happened as was fresh from the victory, if had to decide now would have done a U turn as they have done on CGT and Immigration.

Richard you forgot that world over including NZ, most politicians are thick skinned. Though they know that everyone knows but still who cares.

People do care, particularly the young who have been pushed out of the market. Boomers can't last that long, and they are already out numbered by younger generations.

We have a beautiful piece of paradise down here at the bottom of the globe. I think this alone is enough to keep house prices elevated with all the doom and gloom in the world at the moment. I write this as I ride the Wellington to Wairarapa rail commuter service that winds itself through the Hutt Valley, over the Rimutakas and through the scenic rural landscape of the Wairarapa plains.

Have a great weekend all.

A beautiful piece of paradise where the majority of local young people have lost the hope of ever owning their own home.

Young people's hopes and dreams.....unintended consequences

Unintended? Perhaps.
Ignored? Absolutely.

You can buy places in Christchurch for under 300K. Here is a quite nice two bedroom unit for 259K:

https://www.trademe.co.nz/property/residential-property-for-sale/auction...

Would make a good first home or investment property. Currently rented for $285 a week. If you had 60K deposit the interest costs would only be $130 a week. Numerous places like this in Christchurch with some even cheaper. Ideal first home that you could hold onto and rent out when you move up to a larger place.

Linwood / Aranui are great neighborhoods too, very easy to source meth I hear.

I am sure the majority of people living in those neighborhoods are fine citizens.

Something is undeniably odd about Linwood. Always felt weird walking through there. Not unsafe, just odd.

Zachary, you are correct about being able to buy under $300k in ChCh.
Not everyone’s personal choice for location but cheaper than paying rent, and a place to start climbing up for financial security.
With a bit of titivation the rent could easily be increased.
Not sure why the doom and gloom merchants want to knock Christchurch when they are complaining about the very high prices In Auckland.
What I do know is that Linwood and Aranui in Christchurch are lower socio economic areas but they would be a helluva lot better areas than many in Auckland,

CJ - While it is difficult to achieve home ownership it always has been and always will be. FHB have a good percentage of the market as they have over the last 3 years. To say 'majority of local young people have lost the hope of ever owning their own home' is ridiculous and with that attitude your gauranteed not to achieve it.
This is a great place with unlimited opportunity and an amazing future, grasp it or forever miss out.
You are responsible for your own outcome no one else.
Seasons Greetings.

Yeah, that's a good point Shoreman. The current FHB activity in the market disproves the notion that all hope is lost for young people buying their first homes. By making such ridiculous statements they are encouraging young people to keep renting.

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