sign uplog in
Want to go ad-free? Find out how, here.

We should see some solid sales activity over the next few months and look out for some big announcements from KiwiBuild and Kainga Ora, but those expecting another price boom may be disappointed

We should see some solid sales activity over the next few months and look out for some big announcements from KiwiBuild and Kainga Ora, but those expecting another price boom may be disappointed
Photo: Heavybluesman

The housing market is in buoyant mode as it heads into the peak summer selling season but those who are hoping this will bring a return of the boom in prices that was prevalent prior to 2017, will probably be disappointed.

The threat of a collapse in the housing market, which had weighed on buying decisions over the last couple of years, has retreated considerably and would now probably only be triggered by a major international financial crisis, the effects of which would be felt well beyond housing.

But in the absence of such a calamity, it’s business as usual.

One of the key features of the housing market last year was the low number of new listings coming to market, and this combined with a lift in buyer demand which followed the Reserve Bank’s cut to the OCR in August, pushed overall stock levels down and prices edged up.

But there may well be a surge in new listings as the 2020 selling season kicks off.

After a sustained period of low sales volumes and flat prices in many centres, it’s likely that potential vendors adopted a wait and see attitude to selling their properties after the cuts in mortgage interest rates that occurred last year.

And by the time they decided to sell, the market was heading to towards the Christmas/New Year break.

So getting their property on the market was probably at the top of the to-do list for many people as they returned from their holiday break.

If that’s the case and buyer demand remains strong, which it appears to be, there will likely be some fairly solid sales activity over the next few months.

However, it’s probably not the start of another boom.

The latest mortgage lending figures from the Reserve Bank show that the bulk of the growth in new lending has been to first home buyers and investors, while lending to existing home owners moving up the property ladder, or downsizing, has been almost flat.

That suggests demand is greatest at the lower to middle end of the market, where price affordability is much more of an issue for buyers.

Additionally the benefit of lower mortgage interest rates is probably already fully factored in to buyers’ decision making.

So rather than a steady upward swing in prices, we are more likely to see a pattern where they briefly rise when mortgage interest rates are cut and then flatten out.

And with further mortgage rate cuts far from certain, we are probably heading into the flattening out phase, particularly in Auckland.

So although vendors may well be selling into a more buoyant market this year, those with unrealistic price expectations may still be disappointed.

There could also be some major housing developments coming out of Kainga Ora/KiwiBuild later this year.

The Government has several major housing projects in the pipeline such as its proposed 3000-4000 home development on the Unitec site at Mt Albert in Auckland.

It has been in discussions with possible development partners for those projects, which could also act as a launchpad for new prefabricated production facilities, which have the potential to reduce construction costs and improve affordability.

But news on this front has been surprisingly sparse of late.

One possible explanation for this dearth of news is that the Government is keeping its powder dry until its Urban Development Bill is passed by Parliament, which is likely in a few months’ time.

The Bill will give Kainga Ora, the lead planning and oversight agency for these new housing projects, its legal powers to speed up the development process, which will come in handy for such large scale developments.

Once these are announced, KiwiBuild may also come into its own.

Although the scheme has been slow off the blocks, it does have two potential benefits.

Firstly, its underwrite facility can help developers get finance in situations where it might otherwise be difficult to obtain, assisting them to get projects off the ground.

And although KiwiBuild on its own probably only has a negligible impact on prices, it could be useful in situations where developers can produce homes that have a price advantage and where demand for those homes exceeds supply, by restricting availability of those homes to eligible first home buyers.

Both of those aspects of KiwiBuild could be useful in large scale projects like those being planned by Kainga Ora.

And provided the Urban Development Bill proceeds through Parliament as planned, the Government is likely to be announcing details of these new projects in the months leading up to this year’s general election, which it would no doubt find very handy indeed.

The comment stream on this story is now closed.

You can receive all of our property articles automatically by subscribing to our free email Property Newsletter. This will deliver all of our property-related articles, including auction results and interest rate updates, directly to your in-box 3-5 times a week. We don't share your details with third parties and you can unsubscribe at any time. To subscribe just click on this link, scroll down to "Property email newsletter" and enter your email address.

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.


Excellent article, which I think is right on the money.
As I've said several times in the last 6 months, things went mysteriously quiet on the Unitec site for no apparent reason. What you are saying makes sense.

for population centres, NZ's property price will reach a level where price to income ratio is around 15 to 20 while for popular provincial centres, the ratio would be 10 to 15.

If those number came to pass it would lead to one or more of the recently much debated tax base changes being voted in as a new tax target.

Tax alone will not fix it.

Looking at Singapore and Germany, their governments are doing multiple things to control property price.

However, NZ is different that
1. NZ is far lack of economic growth potentials than the above two countries so any government would not give up construction as a economic driver
2. Any government in NZ is incompetent in controlling property price and with deeply vested interests in not letting property price to crash

.. as its election year , Mr X .... does your political party have a policy on the NZ housing market ?

Own it.

That will be National! aka "the bow down to China party"

Economics is allegedly about "the efficiency of resource allocation". Rule 1 for that -unknown to economists- is to ensure bank credit creation is used for productive business investment & credit for asset purchases is avoided


The US imposed the Basel boom-bust regime on Europe to restrict productive investment, lower growth and kill German competition and productivity by wiping out its thousands of community banks. Now in the end game property bubble in Germany. Link

In Germany, only half of the population own their home, in centers such as Berlin it is a mere 10%, tendency falling due to increasing house prices.

Over half of all the outstanding bank loans to domestic households and enterprises are loans for house purchase. Furthermore, at 80%, real estate makes up the lion’s share of fixed assets in Germany. Prices in the German housing market continued to grow sharply last year at around 8%. The Bundesbank estimates that house prices in German towns and cities were overvalued by between 15% and 30% in 2018. Since prices began to surge in 2010, banks have issued more loans for house purchase.In some cases, this has been accompanied by looser lending standards. Link Page 9 PDF

You realise that would be the highest median multiple in the world apart from Hong Kong (at 20.8), right?! What would you expect to happen after that?
"NZ's property price will reach a level where price to income ratio is around 15 to 20 while for popular provincial centres, the ratio would be 10 to 15."

Without more apartment building it's probably inevitable. Other major cities have apartments, which help to lower median prices.

No they don't, as Voiceofreason says, Hong Kong, which is nearly all apartments, has the highest house price to income ratio in the world, by far.

You are confusing m2 size and pricing with the main driver of the median multiple ratio, which lack of supply relative to demand because of land use restrictions.

I’m sure you are joking but this violates the laws of math. Say the median income is around 100,000 in this future world, you are saying a person might have a property worth $2M. The deposit would be $400,000 which would be impossible to save.

Even at 1% interest rates on a 30 year mortgage that is $61,000 in repayments a year, over 60% of the wage. That doesn’t count maintenance or rates, etc.

Put interest rates to a measly 3% and it’s over $80,000 per year in repayments.

30 year mortgage? Lower for longer.. they weren't meaning the rates, they meant the term. 105yr mortgages ala Sweden. (and yes, I checked, the article date isn't april 1..)

Oh god. Have you done the math? I’m guessing extending the term provides diminishing returns. Also, most people only have 40 years in their working life.

The grandkids inherit the house.. and the mortgage.

Sounds like a stink deal for the grandkids.

If you increase people’s ability to take on debt then that inflates prices, there is no improvement in affordability.

Therefore, the best way to improve affordability is to constrain debt via debt to income ratios. Put a 1:5 ratio on in Auckland and it will bring prices into line.

I predict there will be quite a lot of rural land available for large scale development once the new nutrient run off restrictions force non viable farms and agriculture blocks to be idled. That should help the two entities mentioned in the article really get into their stride! It was much the same in the BOP post the PSA outbreak, huge acreage was opened up for development when kiwifruiters snapped up the national govts suprisingly generous compansation package and bailed out of growing. Not a bad deal huh, get a bail out from the taxpayer for a problem your own industry created then develop your old kiwifruit block for millions in profit...not to mention onselling your kiwifruit licence. Too bad nothing was done to upgrade the roading network for all the thousands of new houses that have sprung up since....

Tauranga / WBOP has been ruined by its poorly planned growth.

It seems none of our councils have learnt a thing from the sprawling mistake that is Auckland

Sprawl is a complex topic and has more benefits than you may assume.

Like regional house price hyper-inflation? or the strain on poorly maintained existing infrastructure?

Are you implying that these are advantages or disadvantages of sprawl?

I'm implying that the costs far outweigh the benefits

I don't know what the term 'far' in this context means, can you quantify that? Are you aware of the benefits?

I see we are now playing silly buggers. By far I mean the rising costs of living in areas such as Auckland vs the income earned is pushing people out to the regions, causing additional strain on infrastructure and asset/house inflation. Maybe just look up one of the numerous articles on interest referencing the rising DTI ratios of first home buyers. In my hometown, I am first hand seeing its effects but you'd probably dismiss my take on it

The rising cost of regional housing is linked to Auckland's reduced rate of sprawl. The cost of housing in Auckland is a significant factor driving Aucklanders to move to other locations and investors to buy up cheaper regional housing. If Auckland's housing was affordable then the pressure would come off the regions. Reducing the cost of land would reduce the cost of housing; the anti-sprawl policy has driven the cost of land higher.

Agreed, but lets keep importing lots of people (event though majority voted for less immigration), because we want this problem to be much worse. Or perhaps we want to make sure all the smug house/land owner types and the banks happy. Thanks god its election year.

I see what your saying. But at what point does the sprawl stop? If ever?

When people don't want to pay less and live further out with a yard and a dog and long commute.. or when the farmers are willing to pay more for land than (or not sell to) the developers.

Sprawl leads to traffic congestion and pollution, hardly a benefit in my view

Well said Yvil, congestion and pollution are not benefits. Spawl, however, has many more impacts than just impacting traffic and pollution. For example, sprawl is very flexible and tends to be tailored to both demand and the local area. It tends to reduce the cost of housing significantly, resulting in larger homes that people prefer to shoeboxes of inner-city living.
Even in terms of traffic; the denser you get the less transit time your city uses but its not a linear, halving the distance travelled does not halve the transit time.
Crime tends to be lower in the suburbs, standards of education higher and people tend to prefer living in suburbs to living in dense urban areas.
The pros may not outweigh the cons, depending on who you ask, but its not so simple as 'intensification good, spawl bad'.

Not too much wrong with Auckland.

Thousands enjoy living there - and they’re prepared to pay plenty for property.


We could alleviate some of the problem by going all china style on it and building a new compact capital city from scratch. Somewhere relatively geologically stable, above sea level threat, near major rail and road routes with room for an airport unlikely to be affected by fog or storm winds. Like between Bulls and Wanganui.

Drive thru many parts of outskirts of major chinese cities and see row after row of huge high rise residential buildings empty with no occupants. Major overbuild has occurred and presumably many developers gone bust as a result - altho China wont report that bit.

The Govt should not be in the business of facilitating companies to get finance, that fiasco has already cost us $270M for houses NO ONE WANTED !

The Govt should JUST be streamlining the resource management act, it has no place in underwriting companies.

You are right this is just about Politics and looking good for the election though, saying that is "very handy" is not saying how duplicitous that is.

... yeah ... but they blew $ 100 million on buying up guns no one was ever gonna use in anger , too ... so , what's a few hundred mill wasted here or there ...

It's only taxpayers money .... and there's an endless stream of that ..

Let's wrap everyone in cotton wool and cuddle them for their own safety mentality. Over it!

... does we need a hug Mr K ? ... we can't help with a house ... or reduce poverty ... or clean up water ... or slow immigration ... or halt the gangs ....

Butcha can have a big Taxcinda hug ... ♡♡♡ ... oooh ... feel the love ...

Hopefully everyone else is her misdirected cuddles at election time as well.

$ 100 million on buying up guns no one was ever gonna use in anger - really you know this how? It only takes 1 person and 50 people are dead...but you would rather we spent $26 million on a flag referundum? Your a joke ..

But they failed to go after the ones they knew had them illegally and most likely to use them illegally... the gangs. Been a few shootings recently by unlicensed owners

They are doing that as we speak - but obviously you no more than the police force?

Well i know not to leave the back door open with 11 unsecured firearms to steal?

These shootings would have happened regardless of the gun controls. The one in Napier was supposedly a Shotgun? Not a banned firearm.

. .. wrong again ... I was against the flag referendum ....
And I was against Taxcindas gun buy back .... most of the guns are still out there ...

... the one or two barking mad eccentrics who may use a gun in anger will still have them .... as per Hawkes Bay last weekend with two gangs squaring off .

So what's your point/solution (if you have one)?

Don't let foreigners, who were denied a firearms licence in Aus, had no credible character references and questionable extremist views get an NZ licence.

That is the question the police and Govt. have refused to answer.

How does a foreign national get permission to obtain a firearms license in NZ?

We would not have been allowed to do that in Aussie.

Most of the guns are still out there, because most of the guns are probably NOT semi automatic????

Excellent we are all in agreement then

Think you lost this one buddy

It's been totally ineffectual. You can't stop a lone motivated nutter who doesn't draw attention to themselves. Material online and a bit of effort makes it easy to build or modify relatively innocuous guns into mass-murder weapons - it's more than 100 year old technology. It is also straight forward to kill 10's or 100's using bombs built in a garage or heavy vehicles. All the gun legislation has done is turn 10's of thousands of normal kiwis into criminals that are pissed off at govt for no gain. The banned guns have all been hidden (sales of large plumbing endcaps to seal buried pipes skyrocketed last year)

ANZ now see no change to OCR thru 2020,having previously slated a May cut.
January PMI in contraction, importantly PSI lowest level since 2012. Go real estate.

If the real estate market takes off, could see a (shock, horror) rise in rates.

A commonly misunderstood situation.
Yes, rates are based on a property's RV. However, if all properties increase by 10%, that does not mean that all properties' rates increase by 10%.
In essence, what happens is that the council determine what their total rate income is, they look at the total capital value of all properties and determine a multiplier on which applied to all properties will produce the rate income. Note that this multiple changes annually as the councils complete their annual budget and set their rates.
Yes, every three years a new RV is determined for each property. Just because the RV goes up 10% it doesn't mean each property's rates are going to go up 10%. In this situation, if your property RV increases by only 7%, even though your RV has gone up, you may actually be paying less in rates despite the increase in a RV.
More important to consider in terms of your rate rises is the councils annual estimated budget - if that goes up 3% expect to pay 3% more rates.
So relax - if your RV goes up 10% you are not going to be paying 10% more in rates unless council increases its budget to that extent.

VOR probably means an increase in the OCR. But he's got that a bit wrong, the OCR is not determined by house prices, if house prices take off the RB is much more likely to increase the LVR's

No, he means rates. Its not the first time he's trotted out this theory of his.

Really? Still?

Maybe I owe VOR an apology, might have been another poster. The theory was that the council wants higher house prices so you feel rich, then they can sting you with extra rates increases because they are greedy. Or something like that.

Cheers Yvil
Yes I seem to have got that wrong (but not if Pragmatist is right) - a bit confusing when one simply mentions "rates".
Like you; I think that if house prices do start to take off without the economy doing likewise, rather than OCR increases I suspect that RBNZ would look to tightening up on LVRs. The recent OCR cuts were more about stimulating the wider economy (businesses being encouraged to borrow money and therefore expand) rather than simply stimulating house prices (although increasing house prices and perceived increase in wealth has a wider economic stimulus). The focus of the RBNZ is on the wider economic stability rather than a responsibility for the housing market (such as housing affordability) other than if the housing market presents economic stability risks. I can see the RBNZ comfortable with Auckland at 2 to 3 % growth, but get too high (e.g. Auckland 7 to 10%) then I think you will see RBNZ taking action on the LVRs. I see OCR stable during the year (as said by Westpac et al) and some possibility on LVR shifts but totally dependent on what the housing market does.

So are we seeing huge quantities of properties being sold at the top end of the market? I don't think so! That's where your blocker is in regards to limited property listings, there's no point in listing it if it's not going to sell. And the funny thing is that even if the Nats got in to power and lifted the Foreign Buyers Ban, we're unlikely to see a flood of overseas investors return to NZ if Trump remains in power with his punitive trade tariffs.

What has Labours Foreign buy ban got to do with Trump ?

What you should be saying is that a Govt which simply changes policy overnight does is a loss in confidence for people to do business in NZ. Look at the no consultation Oil exploration ban, you think business doesn't take note and say why should we move or increase business in a place that we cannot plan 10 years out.

You're confusing the two; Here I'll spell it out more simply for you: If there were no limits on Foreign Buyers, buying property in NZ and Trump is still in power with his trade war against China through to next election, you will not see China's capital flight restrictions lifted. Now do you understand my comment relating to property and overseas investor?

So you're saying the FBB had no effect because of China's capital flight restrictions

For a bit of comparative food for thought, Australia is an obvious choice. Ex-RBA Governor Ian MacFarlane describes what he believes is the historical machinations of their bubble over the past 30-40 years. Interestingly, he believes that the bubble has reached the end of its tether in terms of serviceability and he also believes that most property investors would not make much more compared to leaving their money in the bank.

Nice to read balanced pieces :)
I think he's right, and both the DGMs and the A. Church's of this world will be wrong.

I recommend listening to the interview. I also think MacFarlane is quite possibly wrong as well in terms of how be perceives the future in terms of consumer and investor behavior.

This idiotic Government's declaration of all -out war on the providers of rental stock is having a terrible effect on rents in Wellington .

Investors have exited the market in droves over the past 2 years, and now rents in Wellington have reached an all-time high of over $ 600 per week .

Do nothing Cindy has a lot to answer for , with the little she has done, having caused more damage than anyone could have imagined

Stating it as "all out war" is a bit hyperbolic. They might have gone about it differently, but there was definitely a case for some "guidance" in improving the quality of rental stock.

Having said that, "This idiotic Government" is probably right on the money. Shame is...what alternative do we have...?

Ms Market having her Wicked Way with them Pore Rentaz. Any bets in how long whispers of Rent Control turn into Policy? That'll put the cat amongst the kereru....

Oh boo you resort to name calling. Regardless of your political persuasion she is our prime minister and her name is Jacinda.....or is name calling all you got?

To be fair, JK got his share of name calling too.
Personally, I think politicians are fair game whatever colour their stripes

Jonkey ... Tugger ... Jolly Kid .... were just 3 of the names John Key got called around here ... and frequently .... he was seldom given his real name ....

Only by you.. Just flicked though a bunch of pages from 2015 (after teh ponytail thing came to light) , didn't see a single personal pejorative directed at him. Every reference way either "Key" or "JK" if not his full name. I'm sure he was called those thing on occassion, but it was in no way the norm like "Cindy" and "Taxcinda" have become. In fact, JK wasn't really mentioned all that much at all.

So a quick search, and sure enough, a few results for "tugger" and Jolly Kid... all uttered by one GBH.

And what would you do Mr Boatman...CGT (nah) land tax (nah) .?

he wouldn't do anything! Hes' very happy for the gravy train to keep rolling along!
Stuff the wider consequences!


War on landlords is a rather hysterical description.

Do you have any data showing the total stock of rental properties has reduced? Or is that made up?

1. Love the picture!

2. sales volumes in Auckland have been pretty dismal for a couple of years, I dont see an increase in stock for sale making much of a difference.

3. Those taking advantage of the lower OCR will probably tapper off by end of March and that will coincide with the start of a chilly autumn for the Akld property market

Interesting to see that the new Demographia survey has Auckland at 8.6 times the median income for a median house (8th highest in the world), Tauranga at 9.3 (5th highest in the world), and NZ nationwide now at 7! Are you going to have any substantial commentary on this? If that's business as usual, it's getting pretty nuts at those levels. Let's actually talk seriously about the implications.

Hugh Pavletich ( Demographia co-author ) used to be a regular contributor here @ .... it would be awesome with a capital " O " if David Chaston could get Hugh to grace us with an article , or an interview ...

The wingnut audience at Kiwiblog gets very wound up if Hugh ever gives his 5 cents.

It's worth going on there just to see how worked up they get and if he sets new records for down ticks.

Yes, along with perhaps many others, I miss HughP's input. But concentrating on Demographia (which at least uses international measures for both numerator and denominator) is surely more rewarding than trying to convince a sequence of inept Gubmints of the Error of Their Ways, so I fully understand Hugh's current direction.

David C has dismissed, wrongly, the benefits of the median multiple.

I think the name of this site gives the game away as to the reason why.

Well, there's been lots and lots of talk on this issue on this website and beyond for many years.
Talk is cheap.

Fritz, "there's been lots and lots of talk on this issue..". There's a tendency to forget about it from time to time, especially after the stagnation in Auckland for a while, but it's still very high, and getting higher in the regions. It's too easy to just look around inside our bubble (or whatever you'd like to call it) and just compare values inside of it. It's a false economy. If the whole market is considered "severely unaffordable" compared to nearly all of the world, nothing is good value.

But again, talk is cheap.
The government get a hard time, and rightly so to a certain extent, but they are doing some good things. One of the best opportunities will be the Urban Development Authority. We really need the government to drive forward affordable housing developments.
In the absence of anything positive from the Nats, I might be inclined to give Labour another go. I think we'll be better able to judge them after two terms, and I haven't given up hope that they yet may do something good in terms of housing through the UDA.

Agree, how to fix it without trying to greedily drive the market even higher, or crashing it – a rare soft landing – is the most valuable talk and action at this point. Pretending it's business as usual is nuts.

That's why I think the government building affordable homes (for sale) is the best option. It will allow many more opportunities for FHBs to get a more affordable home, with likely limited impact on the market.
Best of both worlds.
That's what we all want isn't it?

As long as the building boom doesn't overshoot demand and crash the market, which is what I think might be starting to happen (the overdevelopment), in Auckland at least. There'll be a lot of developments coming to market over the next year or two. I think the high prices in markets have been due to a lot of speculation, and a lot of cheap credit (still available), not just a shortage in housing. We'll see.

Maybe but govt being govt any building is unlikely to flood the market

Yes, considering they haven't been building nearly as much as they'd like to. However, there are also a LOT of private developments in the consent pipeline as well, only some attempting the very affordable end of the market.

VOR, talk is cheap, why don't you build a couple of thousands townhouses to help the situation? Make sure they'll be "affordable" enough for average Joe. You'll be NZ's hero

That's the kiwi spirit Yvil. It shouldn't be hard building homes .... but it is

Yvil, you’re not listening. I think there’s enough being built, it’s just they are not affordable enough. With the economics of the market right now, it’s not possible to make them affordable enough (median 7 price to income ratio nationwide). There will be developers going out of business before/as prices drop, trying to make them affordable. It’s a very difficult situation we are in.

yes agree talk is cheap, but wrong action can be very expensive eg Kiwibuild.

Milldale is their V2. And they are advertising a 195m2 house on a 325m2 site, 32km from Auckland for an 'affordable' $990,000. PLUS an extra $1,000 levy per annum for the next thirty years on top of your rates.

They seem to have this economic theory that making things more expensive somehow makes them more affordable?

27 February 2009. Median NZ House Price $336,800. First Home Buyer is aged 30 and reads this, "Financial commentator Bernard Hickey, from, says prices will fall 30% by the end of 2009. He says properties that are difficult to sell or need to be sold in a hurry are already going for 15-20% less than their on-paper value. "The worst is yet to come. I think 2009 will be a horrible year for house prices because credit is drying up and the economy is going into an extended and deep depression."

September/October 2017. Jacinda Ardern promises houses for all. Median house price is $525,000. The potential FHB is now 38.

January 2020. Median house price is $629,000, up 20% since the Jacinda promise. The potential FHB is now 40.

If you believe the DGM, Jacinda is worth another shot. Meanwhile the most vociferous DGM have disappeared. There's one born every minute.

Agree and so called 'economist' Shamubeel Eaqub in 2012 "says he tells his friends not to waste their money buying houses. "But they don't listen to me."see

Lots of "experts" who don't understand the drivers of NZ property - high demand, low supply, ineffective alternative high taxed superannuation savings structure/disincentives, low wage high cost economy - leaving NZers with no option but to invest in property for any hope of future wealth and non-poverty retirement.

yeah that wasn't great advice was it
personally, I don't rate the guy, although his heart is in the right place

Lots of "experts" who don't understand the drivers of NZ property

Well Robert Shiller was summarily mocked by all and sundry. He was also pilloried for being "wrong" about bubbles, including property. I think the armchair brigade should be more circumspect.

Great post ExExpat!!!

Why is it that govts of both persuasions introduce incentives when they want more R & D or more exports yet when they want more houses for first home buyers and renters they clobber private housing development/investment with ring fencing, brightlines, non-deductibility of depn on buildings etc - then expects more houses and more rentals to magically materialise. All they achieve is reduced supply and higher prices. These policies are designed to make the social engineers feel like 'things are being done' but in reality doesn't help towards the stated objective. The majority of NZers, including politicians, all own a house or two and nothing will be done to undermine the value of those houses (thankfully). Only the private sector can deliver the housing numbers required to meet the current undersupplied need but in the presence of current penalties and disincentives it wont happen. In addition, NZ's draconian super savings schemes' TTE tax (thanks to Don Brash's advice to Lange's govt) approach cripples citizens' ability to save enough for retirement thus forcing people to invest in property as the only way to save a meaningful sum for retirement. Our system is entirely out of step with Canada, Australia, USA and UK where capital gains are taxed to varying degrees, but super savings schemes are exempt under their EET super tax systems (which we also had until above mentioned Lange govt) and not taxed until withdrawal upon retirement.

The fuel guage thats been propelling the real estate market started the year at 1%.. how long does 1% keep this thing airborne before the engines start coughing and spluttering?

NZ has had 15-20% mortgage rates in the past and that didn't cause prices to decline. Those rates only get to that level because of high inflation which also pushes house prices higher. See my comments elsewhere above to understand the drivers of NZ property prices. Its not interest rates in isolation.

And at those times wage inflation was also high, ~13%pa when mortgages were >15%.. so the relativity between wages and house prices was fairly constant. Now we have weak wage growth, but high house price growth. Lowering of interest rates are the main (but not only) reason that house prices have been going up beyond what incomes have.

Pretty sound assessment.
Stuff selling above CV in Auckland recently (esp in Dec) was above $1.3m
Stuff selling at CV or below is stuff $700-900k, as noted in Red Beach and Stanmore Bay recently.
Suggests that FHB are stretched to max and not offering what vendors think it's worth.
Auckland City, NSC saw big sales rises above $1.5m valuation. Many sold well over CV.

This is unlikely to last for same reason as when people splurge one month then next few months are quieter.
Sales in Auckland in 2019 were 5% lower than 2018. prices marginally up.
Still think a world recession is coming in second half of year and that Auckland market will flatten re sales and prices, after March with prices falling marginally in 2020, after March.

Also thing few are addressing is apartment glut. keep building them and yet sales are well down and over 50% lower than in 2015.

No one seems to want to answer following question: if overseas buyers in Auckland were only 3% of buyers pre ban, then why have section sales dropped 50% and apartment sales 35%, since? When residential sales only fell 5% in Auckland in 2019.

@ mikekirk29 .....agree on a recession later this year ....stock markets around the world are in a true bubble ie Dow Jones and its record highs - all pumped up by "printed munny" ...high levels of world wide debt that will never be paid back....the higher all this goes the "bigger the mess"'s starting to remind me of a certain time in 1929 ...I wouldn't even be worried about house prices, just debt levels the "never to fail" banks will haul their money back in, just as quickly as they dished it out.

That 3% "overseas buyers" was just a total "red herring" from the Nats to keep it all rolling along .....

Crazy Horse - agree 100% and can forsee that stock market will fall badly anytime between mid 2020 to early 2021.

Understand that today everything is so good that no one can imagine that party will end but it is at such moment when the hurrican will hit - low interest rate and free supply of money has delayed the inevitable but has run its course and are now sitting on ticking time bomb.

Sticking to the disaster forecast! You say "falling marginally" above and earlier you talked of 35 percent losses :) starting end of march :))

Never get it right do you?
I said $670 median by end of 2021. Plenty will be on fan by then. Also in comment above I said Auckland prices rose in 2019 marginally. Not that they. Will do so in 2020

"Never get it right do you?" What specifically are you referring to Mike that I did not get right? The date for your Prediction to be complete or for it to commence ... Or was it the magnitude of the fall? 20 percent or is it 35 percent who knows and who cares whichever it is, does it really matter, you have a snowball's chance in hell. Sayonara Mike.

Not very high.