QV figures show average residential property values increased by 2.5% in the three months to January

QV figures show average residential property values increased by 2.5% in the three months to January
Average property values in Dunedin have increased by 20.8% over the 12 months to January. Photo Tony Hisgett https://www.flickr.com/photos/hisgett/31345358052/

Average residential property values are rising in almost every part of the country, according to the latest figures from Quotable Value.

The average value of all residential properties throughout the country was $714,747 in January, up 2.5% compared to three months earlier and up 4.4% compared to a year earlier, according to the QV House Price Index.

Average values rose in 92 of the 99 locations covered by the Index compared to three months ago, with the only locations to record declines being the Auckland districts of Coastal North Shore -0.6% and Franklin -0.3% and also Taupo -0.3%, Opotiki -4.5%, Carterton -2.0%, South Wairarapa -0.6% and Kaikoura -1.8%.

In the Auckland region, where the market has previously been subdued for some time, average values rose by 1.7% over the three months to January to $1,049,383.

In the Wellington region average values were up 3.6% over the same period to $756,076 and in Christchurch they were up 2.1% to $510,575.

Dunedin surpassed the other main centres by a substantial margin, with value growth 8.4% in the three months to January, taking the average value in the city to $527,101 which was up a  whopping 20.8% compared to a year previously.

The biggest increase in values over the three months to January was in the central North Island town of Kawerau where they increased by 18.8% to $345,572.

The area with the highest average values in the country is the eastern districts of within the boundaries of the former Auckland City Council, which includes such blue ribbon suburbs as St Heliers and Mission Bay and had an average value of $1,560,134 in January, up 2.0% compared to three months earlier.

Going against the trend, values appeared to be almost flat in Queenstown-Lakes, which had the third highest average property value in the country at $1,203, 136, up just 0.1% compared to three months earlier and also up just 0.1% compared to a year earlier.

The table below shows average values throughout the country at the end of January and how much they have changed over the previous three months and 12 months.

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QV House Price Index 
January 2020
Territorial authority Average current value $ 12 month change % 3 month change %
Auckland Region           1,049,383 0.3% 1.7%
Wellington Region               756,076 9.0% 3.6%
Main Urban Areas               818,955 3.4% 2.4%
       
Far North 486,392 13.5% 3.7%
Whangarei 557,837 -0.6% 2.3%
Kaipara 556,641 -0.1% 0.1%
Auckland - Rodney 961,284 0.1% 2.8%
Rodney - Hibiscus Coast 942,612 1.0% 3.3%
Rodney - North 982,244 -0.5% 2.5%
Auckland - North Shore 1,196,276 -0.5% 0.6%
North Shore - Coastal 1,365,012 0.2% -0.6%
North Shore - Onewa 967,807 0.0% 1.6%
North Shore - North Harbour 1,157,803 -2.8% 2.3%
Auckland - Waitakere 828,124 1.1% 1.9%
Auckland - City 1,245,323 0.9% 2.4%
Auckland City - Central 1,092,126 0.9% 2.0%
Auckland_City - East 1,560,134 0.2% 2.0%
Auckland City - South 1,111,174 1.7% 2.8%
Auckland City - Islands 1,171,406 0.4% 5.9%
Auckland - Manukau 906,762 0.4% 1.6%
Manukau - East 1,163,189 1.4% 2.4%
Manukau - Central 700,599 -0.7% 0.7%
Manukau - North West 789,890 0.5% 1.5%
Auckland - Papakura 714,610 2.7% 1.6%
Auckland - Franklin 672,800 0.3% -0.3%
Thames Coromandel 785,649 5.3% 2.8%
Hauraki 435,867 3.1% 1.0%
Waikato 523,361 6.9% 6.3%
Matamata Piako 494,461 5.7% 1.1%
Hamilton 616,316 6.7% 4.1%
Hamilton - North East 763,452 5.5% 3.4%
Hamilton - Central & North West 563,034 5.7% 2.9%
Hamilton - South East 579,627 9.0% 6.1%
Hamilton - South West 550,389 7.2% 4.3%
Waipa 612,839 8.0% 2.2%
Otorohanga N/A N/A N/A
South Waikato 272,771 6.2% 3.5%
Waitomo 244,653 12.5% 6.8%
Taupo 550,567 7.4% -0.3%
Western BOP 687,864 5.7% 3.5%
Tauranga 769,958 6.6% 1.6%
Rotorua 500,263 12.4% 1.8%
Whakatane 504,352 8.9% 4.3%
Kawerau 296,962 21.5% 18.8%
Opotiki 345,572 0.6% -4.5%
Gisborne 407,007 25.7% 7.5%
Wairoa N/A N/A N/A
Hastings 561,107 11.2% 3.8%
Napier 582,582 8.2% 3.8%
Central Hawkes Bay 399,528 8.7% 3.4%
New Plymouth 497,632 8.6% 3.4%
Stratford 315,675 15.4% 2.7%
South Taranaki 265,015 11.8% 3.5%
Ruapehu 248,996 19.3% 13.5%
Whanganui 338,982 23.7% 6.2%
Rangitikei 276,961 28.0% 9.7%
Manawatu 448,698 22.5% 6.8%
Palmerston North 489,479 14.0% 4.2%
Tararua 260,715 15.8% 7.6%
Horowhenua 412,565 21.1% 6.2%
Kapiti Coast 640,791 10.2% 4.5%
Porirua 659,853 12.7% 5.0%
Upper Hutt 612,355 15.0% 5.1%
Hutt 651,038 14.1% 3.8%
Wellington 864,753 5.7% 3.0%
Wellington - Central & South 865,515 6.7% 4.0%
Wellington - East 919,207 5.0% 1.4%
Wellington - North 787,787 5.5% 2.6%
Wellington - West 985,238 5.5% 3.8%
Masterton 410,136 9.2% 2.9%
Carterton 449,586 8.0% -2.0%
South Wairarapa 543,382 6.4% -0.6%
Tasman 620,815 4.8% 0.5%
Nelson 650,331 6.6% 2.8%
Marlborough 506,255 7.0% 3.2%
Kaikoura 462,271 8.6% -1.8%
Buller 207,798 5.4% 1.0%
Grey 226,981 8.2% 2.9%
Westland 268,369 8.9% 4.0%
Hurunui 406,478 4.1% 2.9%
Waimakariri 457,729 2.1% 1.1%
Christchurch 510,575 2.7% 2.1%
Christchurch - East 388,353 3.1% 1.3%
Christchurch - Hills 703,901 4.2% 5.0%
Christchurch - Central & North 597,244 2.1% 2.2%
Christchurch - Southwest 482,900 2.1% 1.5%
Christchurch - Banks Peninsula 542,779 2.9% 2.5%
Selwyn 558,728 0.7% 0.3%
Ashburton 365,570 2.3% 1.1%
Timaru 383,948 5.3% 2.7%
MacKenzie 557,541 7.9% 2.6%
Waimate 288,786 18.5% 9.9%
Waitaki 341,785 10.4% 3.7%
Central Otago 569,817 11.5% 4.8%
Queenstown Lakes 1,203,136 0.1% 0.1%
Dunedin 527,101 20.8% 8.4%
Dunedin - Central & North 545,026 20.7% 8.1%
Dunedin - Peninsular & Coastal 488,049 22.9% 8.6%
Dunedin - South 504,716 22.1% 8.9%
Dunedin - Taieri 542,757 19.0% 8.2%
Clutha 269,768 25.3% 10.9%
Southland 346,390 17.9% 6.7%
Gore 262,059 9.2% 4.3%
Invercargill 326,946 14.2% 2.6%
       
Auckland Area           1,049,383 0.3% 1.7%
Wellington Area               756,076 9.0% 3.6%
Main Urban Areas               818,955 3.4% 2.4%
Total NZ               714,747 4.4% 2.5%

QV house price index

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118 Comments

18
up

Your brighter future.

Let's do this.

Same s***. Different day.

12
up

Jacinda sucked a few in with the “homes for all” promise. Some haven’t learned their lesson and continue to believe. Where’s RP?

Disappointing they didn't push the capital gains tax through but at least they put the foreign buyer ban in place. So no, not exactly the same S@#$, as the other S@#$# thought the problem was worthy of celebration while people slept in their cars.

Capital gains tax is purely an envy tax.
All it would do is push up prices more like it has in Oz.
Capital gains tax would not reduce prices as someone has to pay for it and yes it would be the buyer as asking prices would be increased.

32
up

You could call any tax an envy tax if that's the game you want to play?

I'm in the top income tax bracket so therefore the PAYE I have to pay is just an envy tax - all those people who can't get onto the top tax bracket are just jealous of the income that I can generate - why should I have to pay a higher rate than those people who can't generate the same income as me?

Paying PAYE at the top tax rate is just an envy tax.....

But if I don't pay for all of that PAYE, where will the government get all of its tax to pay out welfare for the tenants who are paying rent to you each week, so that you don't have to pay any tax on your rental property - but if you did have to pay capital gains tax on your property, that would only be because people envy you? Please....go and think about how ridiculous that argument is.

12
up

So much this!

Why not switch the tax system from income to capital. I assume The Man will be happy and not at all envious.

Why generate income requiring PAYE when you can just buy shares and properties and live of the tax free capital gains?

Thunderous applause

TM2, having no capital gains tax does encourage speculation though. Imagine, selling profitable assets and paying no tax! At this point, people should probably be encourage not to sell. At least the short term flipping has largely ended.

11
up

Income tax is purely an envy tax that those who own land but aren't particularly good at business or are too lazy to work levy on higher achievers to fund society.

Cap gain tax is dead. Needs a sale to trigger it so crap cash-flow for the Govt. To replace income tax, so a land tax paid quarterly in advance would do the job.

Capital gains tax would be avoided by the wealthy - they'll find a way, and result in punishing the lower middle class home owners, forcing many out of their homes. There are better ways to fix this.

"Average values rose in 92 of the 99 locations" that's incredibly broad based

10
up

The DGM said (repeatedly) that house prices would fall dramatically by 2020.

Pity those who believed them. Notably, the DGM have disappeared in droves from this blog over the last few months. Doesn’t say much for accountability, does it?

Good riddance to the DGM. It will be good to return to some intelligent discussion here.

TTP

15
up

Is this your ego speaking there TTP - that post comes across as quite "I'm right, you're wrong".

Do you not value opposing views? It would be quite unintelligent to dismiss the views of others would it not? Would it not be the intelligent who respect the views of others as they may point out their own blind spots, lack of understanding or misjudgements?

This site is a great resource as you get to read the views of all of those who want to make a contribution - we should not be trying to remove the opinions of those we disagree with as it is from those who we are most likely to learn the most from.

FYC

TTP quite simply was right and the DGM's were wrong.

I mean, the mere fact that they call people who want the market to go down "DGM's" or Doom and Gloom Merchants should tell you all you need to know. They have theirs screw everyone else that isn't making massive capital gains for nothing.

10
up

TTP, you are a spruiker plan and simple. If you can’t see that this market is way overvalued in 2020, good luck to you and all who believe.

The confirmation bias is strong here - if you have the same conversation with someone where that has been a large housing bust they would be more open to a bad outcome (I was living/working in US during GFC). But the current generation of property owners have only had positive outcomes so don't seem to grasp that what is so good to them right now, could be so bad in 5 years time.

Exactly, once bitten twice as shy

We can disable the comments on this website Yvil, TTP and The Man have won and the rest of your contributions have been exposed as largely irrelevant. The social cost of high, and ever higher, house prices are for each of us and the ballot box. Very few of you were able to bifurcate market direction from your sense of social justice.

Te Kooti, you make a very interesting point; social justice vs actual facts. I'm aware I upset people with my post stating things as they are because many here comment on morals or ethics. This is a business website, its motto is "helping you make better financial decisions" it's not helping you make a better world. When I said back in September that house prices were going to reach a new all-time high in March 2020, I based my prediction on valuable facts I have learnt over many years, please note I did not say it was good or bad, right or wrong, but it is going to happen. Far too many commenters get things repeatedly wrong because they mix up what they think is right or fair (a subjective notion) or what should be with what actually is. I'm not here to make friends, I prefer my friends in front of me with a beer in their hand. So yes, I'm unapologetically factual as Interest (rates) is very much my business.

That is precisely the point I am making, the vast majority comment with their heart and not their head. My heart wants the Blues to win, my head bets against them every time!

Lots of messaging over the last 20 that pensions would vanish in time. The easy option for the unimagaintive has been to buy up houses and a lot have. Gonna take a tax change to correct the imbalance of income and having the security of your own roof over your head. If youth dont vote parties will continue status quo.

Not DGM (debt gathering mediary), being a proxy for bank profitability. But not the risk.

16
up

Who do we vote for? Literally no one wants to, or will, solve it.

After you have questioned the fantastic promises that are goimg to be trotted out then think again. These pollies say anything to get your vote and with no intention to live up to the expectations of even the most forgiving voters. Following politics they have a career waiting in dodgy sales.

Or chairing banks, perhaps.

Sir John Key was a banker before being a politician. Will Cindy go back to the Fish and Chip shop career?

Probably UN, in fairness haha

More diplomacy than gambling with other folks' money.

UN diplomacy tends to be gambling with other peoples lives.

Their motto: 'Let's hold committee meetings until they're All Dead...'

And trips to China..

18
up

Not ideal when you consider the average wage and the 'quality' of the average house.

A high capital and low productivity/wage economy, what will be the consequences?

But still much better than the CCP where that authoritarian regime has meant that the health authorities in Wuhan were so scared of the blame that might be attached to them by the top dogs of the CCP that they failed to issue a timely report that they were experiencing a plague-like viral problem, thus allowing a possible world-wide plague to develop rapidly.

I'll take the consequences of 'a high capital, low productivity/wage economy' any day!

20
up

Well this is terrible news for the country's long-term well-being. The youth will need a party to vote for, they're being absolutely shafted by Labour and National.

In all honesty, I think the younger generation will need to wait another 10 years before their voice will be heard. Boomers don't want to hear anything about policies that might make NZ a better place to raise families in the future - and they appear to be everywhere. Have you ever told a boomer that the value of their property portfolio might need to fall to benefit the next generation of Kiwi families? That new policies are required to remove distortions/behavior? NZ culture appears to be all about the Boomers and making sure all asset prices peak for their retirements.

Be interesting to see what the stats/demographics are - in terms of those of voting age who don't own property vs those of voting age that do own property.

Boomers children will be inheriting those properties. I can’t see them voting for any party promising to drop existing house prices.

What must suck for many is that a mainly Auckland issue has gone nationwide under the COL government. Homes for all indeed.

Fine for those with properties - what about those who don't have parents here? Say that thousands of people who have just immigrated? How do they benefit?

And what are we teaching our children? Don't worry about working hard - Mum and Dad are just going to leave us some expensive houses...relax...no need to learn how to work hard and get established.

I’ve told my children that they stand on the shoulders of the generations that went before them. Why shouldn’t they start working life with the knowledge that they don’t have to spend so much of their lives thinking about getting on the ladder? My message to them is go out and make your mark, probably overseas and know that your home will be sorted in time. If you can’t help your children then what is the point?

10
up

Sounds like and Isaac Newton quote - standing on the shoulders of giants.....but housing in NZ might be more like giants crushing the dreams and futures of their children for many.

I'm sure you mean well Expat for your family so respect your intentions - it just may not play out that well for a large proportion of NZers who may not receive any inheritance from their parents.

Affordable housing for when they are in their 20's and 30's might be a great way to help your children - that way they won't have a massive debt burden hanging over them their entire working life. Many in their 20's have given up hope if you go and talk to them. They don't think they'll ever be able to own a home so have already given up. Is this what you want for NZ?

So you've remortgaged to provide them with the deposit for their own homes? Or are you expecting them to wait till they are in their 40s and fifties before you actually drop dead to make true on your word?

They are only just starting out. I'm anticipating that they will need help between 8 & 14 years from now at which time my wife and I will be retired on Super. 16% of the equity in our current home would cover a 20% deposit each. We have an OD facility ready for such an eventuality so we don't have to ask the Bank. If we downsize we can bring forward their inheritance, in the form of a loan to each child (protect against possible divorce) to deleverage them. Based on current life expectancy they would get the lot when aged 45~51, less money in trust to educate grandchildren.

Bring on euthanasia, get rid of them if they won't hurry up and die ... you say that wont happen??

10
up

yeah, and not all boomers own homes, there are still plenty of poor ones.
But hey, why not just become a 21st century nation of haves and have-nots, inherited wealth and privilege....just like the Britain many of our ancestors were escaping in the 19th century...
Also, with lengthening life expectancies, people might have to wait a long time for inheritances. Also, there's no guarantee that those inheritances won't be significantly eroded by boomers wanting to live their final years to the fullest, or if they have health conditions.

I've heard plenty of people say they have no intention of leaving behind inheritances!!!!

"I've heard plenty of people say they have no intention of leaving behind inheritances."

Fritz, This is an urban myth. I've got many friends and acquaintances who like me are baby boomers and none
of them would not leave the bulk of their wealth to their children...that is their genetic children, not necessarily
non-genetic children (e.g. step children).
Besides, it would fly in the face of evolutionary theory which to thinking people with open minds says that for all of
life the main purpose is the propagation of their genes. This entails that parents will help their children in anyway they can.

There are always rare exceptions with the likes of multi-billionaire Warren Buffet who can afford to give the bulk of his wealth
away but still leave his children well off.

"Besides, it would fly in the face of evolutionary theory which to thinking people with open minds says that for all of
life the main purpose is the propagation of their genes. This entails that parents will help their children in anyway they can."

Sorry, you can't compare the higher thought processes of human to the basic evolutionary drives of the animal kingdom. If you want to try, I suggest you look at the portion of human society with the highest reproduction rates, and the outcomes for those families. They breed too many kids, the death rate is high, and their survivors also overbreed and lose more children, but their genes spread far a wide, just not a prosperous household.

And you are of course ignoring all the species that will devour their own young if the environment is not providing adequate food... Most being reptiles.. so analogous to quite a few boomers really. :)

sorry Pragmatist, but evolution applies to all life species, large-brained or no-brained, microbes, plants, animals, fish......every living thing! Every living thing has a genome which can form a new combination in the next generation; for instance a child doesn't look exactly the same as his parents, he/she has a new genome consisting of his parents' genes intermixed in a new combination plus possibly throwback genes or mutated new genes. So evolution can select a new genome combination if it assists the individual adapt to his physical and social environment. Much like Einstein's famous physic's formula E=MC squared, evolution's formula is:
RANDOM VARIATION (of genes) followed by SELECTIVE RETENTION (of genes which assist the individual and thus the species adapt to his/her/its environment). What matters is how well the individual adapts to his/her environment (in our case a purportedly prosperous, democratic, relatively advanced, peaceable country) and so successfully pass on their genes to the next generation.
Historically, the poor have more children because, before the mid-twentieth century, the poor lost more children to inferior living conditions, lack of nutrition,illnesses, etc,etc. They had to have more children to ensure their genes were passed on. In every society it's generally the more intelligent segment that runs the show. They realize that too big a family will demand too much of their personal resources which are otherwise needed to succeed in society (i.e. gain power, status and wealth). And, because they are prosperous, and nowadays have easy access to the best in modern medicine, they realize that fewer children are required to ensure their genes are passed on.The segment you're referring to in our country has more children because providing child-rearing welfare is a relatively recent phenomenon, and they only recently were living in conditions where modern medicine wasn't accessible. If and when this segment becomes more prosperous and educated their family size should reduce.
( I realize that this explanation is simplistic but I hope it gives you a general idea.)

No, we now control our own survival, the whole survival of the fittest has gone out the window for the human race, and for species we farm.

By the time some of the children (the 'lucky' ones) stand to inherit anything they'll be in their 40's and 50's. Many will have to try and start families while being bled for rent. They will also have to endure the inherent instability of renting for much of their adult life.

That's right - paying interest on the massive mortgage for decades by the time Mum and Dad pass on the inheritance. The ownership class who try to paint themselves and being selfless and only supporting high house prices for the good of their children might need to think about this a bit.

The smart landlords from Christchurch who bought rentals in Dunedin will be very happy.

Gordon, I didn’t there were any smart landlords in Christchurch?
Challenge still on offer if you dare Gordon!
Personally wouldn’t want to own property in Dunedin, as we like to know who are the tenants in our properties and know that they are not going to be demolished with rough students.
Good luck to all investors who are providing accommodation to those that require it, whether it be ChCh Dunedin Auckland or where ever!
Gordon, I thought ChCh prices were going south?

The smart ones are those who have no rentals in poor old Christchurch and who had the intelligence and foresight to rent out houses to mums and dads in Dunedin. I note you own rentals in Christchurch and delight in having none in Dunedin. Your portfolio speaks volumes.

Values? What about sale price. That is real market value

You don't understand how QV works

Since you apparently know more than them, why don't you explain for those that "don't know" how exactly it works in relation to actual selling prices?

Sure Taubin. QV provides values of ALL houses to Councils, the CV (= captial value) you see on your rates. This is updated regularly and as such QV cannot wait for a house to be sold (which could take 10, 20, 30 years…) to set its value. That's why it makes no sense to comment about "the value of sales" on a QV article

Presumably the QV values are updated by feeding the latest sales results into their model.

Prices up and sales down even as stock increases.
That I DO understand and am concerned by.

Not surprising that this biggest 12 month property value drop is in Auckland North Shore at -2.8%. Also not surprising that the Central and East areas of Auckland are continuing to stagnate and make little gains despite all the new building that currently going on with smaller apartments. And biggest growth area in Auckland is more affordable areas in South and Waitakere, this is sure to continue.
Everywhere else in NZ is simply gaining in value though more available credit with the fall in mortgage rates, no other reason then that. Think what gains we could actually make if we supported real economies and stop propping up the Ponzi property scheme which only gets NZ in to more debt.

You're still either not reading the article you comment on or totally denying the data supplied.

"The area with the highest average values in the country is the eastern districts of within the boundaries of the former Auckland City Council, which includes such blue ribbon suburbs as St Heliers and Mission Bay and had an average value of $1,560,134 in January, up 2.0% compared to three months earlier."

+2% in three months, not exactly stagnating

Still clinging to you bubble aren't you Yavil, just hope it doesn't go pop!! And you still don't get it do you, short drops in mortgage rates are not going to save your property ponzi scheme, NZ needs wage growth and business support not more debt!

Hold on a minute, CJ099,

Yvil is being absolutely accurate.

The problem is that you're fudging things.

TTP

And as usual you are just full of hot air with nothing to support your comment Ttp, Show me the evidence of where the money is coming from then to support house price growth. Because I can show you plenty of indicators that there is only mortgage rate drops to support house prices.

"Average values rose in 92 of the 99 locations covered by the Index compared to three months ago"

There you go CJ, although I'm pretty sure somehow you're going to dismiss this data

Still trying to distract away from poor sales in Auckland's exclusive and over priced suburbs aren't you Yavil. Shall I tell you how may properties sold at auction this January (According to this website): In Remuera it was the grand total of 1, in Parnell 0, Epsom 1, St Heliers 0, Newmarket 1, Freemans Bay 1, Mission Bay 0 and the list goes on to similar results for Auckland's exclusive suburbs. A far cry for the hay day (2016) where everything there was selling at auction only a few years ago.

"Average values rose in 92 of the 99 locations covered by the Index compared to three months ago"

LOL repeating your distraction info isn't helping is it Yavil. Have you run out of gas for your gas lighting. :P

Just trying to help you out since you clearly missed it the first time. Also name calling is a not so noble way to win an argument

Hardly name calling, I'm just pointing out that you like to distract everyone form the reality of the situation. What's wrong can't you handle the fact that Auckland's expensive suburbs are stagnating and not doing well in the auction sales results.

Really shakes up and distorts the ideas surrounding the words "value" and "wealth".

10
up

When you have to buy into the same market, its no benefit to those who already own, but only has the potential of making the future very difficult for younger generation NZers. Investors and bankers might be the only winners out of this (unless it crashes). Perhaps investor/landlords should be paying the social costs of this issue? Tax the hell out of them I say.

13
up

Ban using equity as a means of purchasing property.. make 'em save like the rest of us have to! Heh, could you imagine the brouhaha!

The ponzi wouldn't survive such a change.

So pin3cone, by your logic everyone has to save the full 100% to buy a house, mortgages can't exist anymore, have you thought that through? what brilliant idea, no more banks…

(just in case you don't realise it, when you put 20% down to buy a house and borrow 80%, that's using the equity of that house, which you want to ban)

I think they mean you need to hold the deposit in cash...

Pin3cone makes a very valid point, because I think he refers to a ban on using equity in one house to buy another (to raise the 20% equity).
This could be substantially achieved by requiring lower LVR limits (higher deposits) on investors and owner-occupiers.

LOL - Casino economics will never be outlawed by the authorities. The RBNZ must be proud that it's moneyless, expectations based monetary policy evokes some response, even if it revolves around bank financed leveraged trading of houses to each other, with no net increase of productive activity that can count towards GDP expansion for the masses welfare.

To rephrase then, to appease your endearing rhetoric we've all come to love: ban using equity from a separate property as a deposit for another property purchase. The buyer must have saved the standard 20% minimum deposit in cash, or less in those circumstances banks are able to grant loans at under 20% deposits, per property they wish to purchase.

So glad you love my "endearing rhetoric" pin3cone ; )

Good idea IO, how about a CGT? Vote for Labour, they'll get it done

10
up

Good idea. Some here are unable to admit Jacinda hasn’t and won’t ever deliver homes for all.

What bring Labour bashing into this? National could introduce a CGT - but will they? If our community and therefore our politics is about making the rich richer, and taxing the income of the working class, then we should be questioning the moral foundations of our society, not pointing blame at one single party.

National introduced the Brightline test...

A token 2 year brightline test, which Labour extended to a much more sane 5 years. (still with enough loopholes that its not exactly hard to circumvent if you don't mind telling the IRD a few lies)

Glad you acknowledge that National introduced the Brightline test which is the closest to a CGT

It really just clarified existing law, it was always taxable if you were trading in property, just that it relied on "intent", which of course everybody lied about to avoid paying tax.

Cap gain tax is too easy to twist, spin and avid. Its a dead duck. Asset/Land tax is the way, and make it enough to reduce income tax.

One problem with Land Tax is that it will inevitably be paid by renters. So rent continues to climb.

And if the revenue from the land tax is used to reduce income tax they are no worse off, and there is extra incentive to develop land, and an increased cost in holding land that isn't being used productively.

This is not sustainable. Those who think so are kidding themselves, but that’s what we do when markets become irrational.

I'm with you - the further this goes the less certain of what good outcomes there are for NZ long term. Are we going to be a repeat of say Japan? The lost decade/s ahead of us?

I’m sure our grandparents were saying the same decades ago. The headline numbers are only half the story. How about the debasement of the value of the dollar buying them? Auckland houses are losing real value.

by Voiceofreason | 5th Feb 20, 8:51am
This is not sustainable. Those who think so are kidding themselves, but that’s what we do when markets become irrational.

Did you write this 10 years ago?
Maybe you wrote it 20 years ago?
Or perhaps your dad wrote it 30 years ago?

More and more of people's incomes are being eaten up by housing costs, we're going to reach debt saturation at some point. Who knows when though? I don't think house prices (or rent) can continue to rise faster than incomes indefinitely, do you disagree?

Did people who owned shares in the late 1920's and 1980's gloat and present themselves as untouchable as the current generation of NZ landlord/investors?

Yvil, no, I bought in Auckland in 2011 (still have, own outright), and Sydney in 2007 (sold during the subsequent boom). There will be other good buying opportunities ahead in various places. Now is not one of them.

VOR
I tend to agree with you that rapid house price rises - at least well over the rate of inflation - are not sustainable and there is an important implication here for FHB.
I have been labelled one of the "spruikers" over the past year as I have suggested to FHB that the signals were that the Auckland market was bottoming and there would be no imminent market crash; these comments were just that, the reality of market signals and implications for FHB.
Now that this has come to pass, where to the future?
I agree that any significant increase in house prices in Auckland above 3% - and the continuing current high rates in the regions - are not sustainable and pose increasing risk to the housing market and consequently to the wider economy.
It is for economic stability reasons in the housing market with its wider implications, that I hope that the RBNZ look to controlling the housing market through increasing LVRs for both investors and homeowners and FHB may get tied up in this.
So what are the current implications for FHB? Three factors to consider:
1. It would seem that there is unlikely to be an imminent market crash and there is likely to be upside to house prices - to suggest so is counter to current data and what respected commentators are saying.
2. If prices do increase rapidly will the RBNZ take action? Well that was the whole purpose of introducing LVRs back in 2013 during the last boom. Commentators are suggesting that there is likely more upside risk for this.
3. It would seem that mortgage rates are likely to remain relatively low (although there may be some slight increase) in the foreseeable future and given the current global economic headwinds there is likely to be some further minor cuts.
So the outlook for FHB is the likelihood of increasing house prices and relatively low and stable mortgage rates.
However, an increase in prices of 4% or more could see RBNZ raising LVRs. While this may give potential FHB some assurance regarding house prices, the very big biggie is the risk of an increase in LVRs.
From what I am reading of FHB issues, the more significant issue regarding affordability is not so much mortgage servicing but rather the deposit requirements.
So, if it is hard to get a deposit together now, with some increase in house prices and possible increase in LVRs, then it is not going to get any easier.
The message for potential FHB is very clear; complacency is likely to cost dearly.

Printer8, you are 100% on the money, great analysis. Shame most people are too filled with anger to view your post as anything else than "spruking"

So nice to see all you darlings supporting each other so faithfully every time

Very sarcastic indeed, we are not the ones upvoting each other with double digit thumbs up out of sheer pack mentality and ignorance

Agree. This year I am expecting protests... if nothing is done.... revolution won't be far away. If the poor can't eat, they eat the rich.

It would be great to see the NZ public start to become politically aware. The public under this lot appear to say "how far" when told to bend over and the politicians take this as agreement.

You would have be fairly gutted as an Aucklander incessantly bombarded hourly with real estate advertising, facts and figures indices and seasonally adjusted numbers from every corner of the media, during an historic period of low mortgage rates, rampant migration, an apparent and every growing housing shortage to know that for the past three years the "average" home owning Aucklander has so woefully under performed almost everyone else, on any investment metric .

Cowpat
Your comment show a woeful ignorance. Are you talking selectively and gleefully since 2017???
If you consider the house you live in an investment (I don't - I consider it a home), then it is a long term investment.
Even the past year - while Auckland house prices may have only increased a 2%, due to leveraging on a 20% mortgage that is a tax free increase in equity of 10%. Not bad for what is considered a fairly secure investment.
If you had read and understood a recent interest.co report you will have found that house prices have risen every decade for the past six by more than inflation and for three of these six in excess of 40%.
I find it hard that Auckland property owners who have seen 50% tax free capital gains on a property (likely an increase in 200% on their equity) since 2010 will scoff at your narrow perception.

My question would be is how long can these circumstances and outcomes be preserved. The argument that they represent some kind of organic order (because the past rhymes with the future) is not compelling (even though the general population seems to believe the past represents the future). Now lets assume the biblical-like prophecy 'house prices double every 7-10 years' is actually some kind of natual law and will happen like spring follows winter. What are the externalities of this? What mechanisms will exist for younger generations to partake in the NZ wealth building merry go-round? Or will they be resigned to sitting in a corner to eat their porridge?

So many questions. So few answers.

Personally, I think a 'day of reckoning' will make many wish the bubble had never have happened. History will say that that the eventuality of this is inevitable, even if the Ashley Churches and Mike Hoskings may say otherwise.

Printer8,

If you think that a home price increase of 2% results in an equity increase of 10% on a "20% mortgage" (should be 80% mortgage or 20% equity if one wants to be factual), then you are rather confused. That is only true if one can borrow at zero percent, and has zero insurance and maintenance expenses.

Consider reality for a moment. Assume a $1M home (makes for easy to understand numbers). A 2% increase in home price results in a $20k increase in home value. A $800k mortgage has a carrying cost of ~$28k, assuming a 3.5% mortgage. In Auckland, this home will require rates on the order of $4-6k, insurance another $4k, and maintenance another $5k (WAG #s). Tell me again how the equity increased by 10% when expenses exceeded the capital gains by a significant amount??? Even if the rates, insurance and maintenance costs were zero the leveraged speculator lost money in the past year.

I will note that someone that invested in the nzx50 has had far larger returns over the past decade as compared to owning property. Housing has been, and continues to be, a poor investment when compared to other choices. One should buy a house to own a home to live in, not as an investment choice. That said, I have done market timing several times for buying and selling my personal home over the last couple of decades to optimize my personal wealth. After owning a home for two decades (fully paid for with zero mortgage), I sold and was a renter for a decade as it was cheaper to rent than to own for the locations that we were at. I felt badly for my landlords as I made more on my term deposits than my landlords made via my rent payment, even before accounting for rates, insurance, maintenance, etc. Yes, I returned to home ownership four years ago, as the scales tilted to being better to be an owner than renter in our location (Hawkes Bay).

Wondering what is happening to Virus news.

Eevry days, since last few days the number infected and deats are going up by 10% PLUS as per chart below but still the news is in background.

Is the Virus being controlled and no more fear over it (With TravelBan everyday - does not seem so as never before in near past have seen such measures) or is it that all media houses have been asked to underplay.

https://www.worldometers.info/coronavirus/

According to the BBC the virus has infected more than 20,000 people worldwide, leading to at least 427 deaths. And that's not to mention the ones dying from neglect who aren't even infected with the virus. https://www.bbc.com/news/world-asia-china-51379088

Only way to stop this absurdity is to cut the immigration. One thing Labour said it would do but hasn't really done so. The ponzi scheme continues.....

"Your lips move but I cant here what you are saying" - Roger Waters / Dave Gilmour

It's very simple. Cut immigration and GDP heads to the bottom of the toilet. It doesn't matter who's in control.

There are so many factors to consider in this conversation that it's hard to see the wood for the trees. Consider a) There are infinitely more people wanting to live in NZ than there are people who already live here. We could double the population in a couple of years from global demand, no trouble. We might have to ship them in as well as fly them in, but make no mistake, the queue to get in is a very long one. NB: I'm not saying this is a great idea, but if we wanted to have a population of 10 million there'd be no shortage of applicants. Consider b) The inability of our current working population to continue to afford a roof over their heads, assuming house prices continue to rise. This is already an issue as we know. These two opposite & opposing dynamics will continue to affect the issue at hand (home). Consider c) Because there's a shortage of quality human beings breeding we are forced to immigrate workers to help pay the promised pensions. This is also the case in every civilised nation on the planet. We are now belatedly learning what the true price of contraception really is. Meantime, the globe's great unwashed continue to breed uncontrollably & because we're so good at keeping the peace (mostly) there is nothing to control this absolutely massive increase in the human population of planet Earth. So, how does this effect our house prices? Best guess: I think the greater influence will be the continuing of immigration & the increasing of our house prices, relative peace being kept. It gives those living in shitty countries, and there is no shortage of those, the chance to better themselves in our small but civilized nation(s) as well as filling a hole within our own culture. Addendum: A financial crash is also another option, as times of greed will always create bubbles & we know what happens to bubbles, don't we? This, in fact, might be the best option in many ways, with the benefit of hindsight, who knows? There's just the small matter of getting through the crap & the rubble first.

I have always considered that higher immigration numbers will eventually benefit all as we start to see economies of scale. There are so many companies that won't even come here because of the small population. We definitely need some supermarkets to come in to break the duopoly we currently have.

Yeah, every cloud has a silver lining. Might be easier for us to go live in India or Phillipines if economies of scale are what makes a place nice to live.

It's pretty hard to go back from having a full country if we change our minds later..

There are certainly pros as well as cons.
Wage suppression from high immigration also helps keep a lid on things like dining out

According to "Scale" by Geoffrey West (fascinating book by the way), as city populations increase and population density increase, so to does the productivity and GDP per capita, and patents published per capita. This is because of a synergy of ideas and resources being brought together. Negative social attributes like crime and drug use also increases on a per capita basis. It seems that in NZ we got the bad but not the good.