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New listings are up and average asking prices are on the rise but total housing stock available for sale remains tight

New listings are up and average asking prices are on the rise but total housing stock available for sale remains tight

There was a rebound in the number of homes being listed for sale in February as vendors took advantage of buoyant conditions to put their properties on the market.

New listings on property website Realestate.co.nz bounced back in February to where they were a year ago, after several months of low listing numbers.

The website received 10,541 new listings in February, almost unchanged from the 10,535 it received in February last year.

The recovery in new listings was particularly strong in Northland and Auckland where they were up 9.9% and 5.8% respectively compared to February 2019, although around the rest of the country listing numbers were more mixed (see chart below).

The lift in February listings was expected due to the stronger market conditions created by last year's drop in mortgage interest rates, with most potential vendors waiting until the after the New Year break to get their properties on the market.

Although new listings bounced up last month, the total amount of housing stock available for sale remains well down on where it was a year ago.

At the end of February Realestate.co.nz had 20,875 residential properties available for sale, down 22% compared to February last year, with stock levels down in all regions of the country (see chart below).

One of the reasons for the decline in stock levels that occurred last year was that much of the dead stock that had been sitting on the market for some time because vendors had unrealistic price expectations, was removed from the market.

That trend was particularly apparent in the middle to top end of the market, with the affordable end of the market being much stronger.

However asking prices were firmer in February, with the national average asking price hitting a new record high of $733,838 last month, and passing the $1 million mark in Auckland for the first time.

That suggests more vendors in the middle to top end of the market have decided the time is right to sell and some who took their properties off the market last year may have been encouraged by recent activity to relist their properties now.

 The latest figures bode well for this month with March usually being the busiest sales month of the year.

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88 Comments

Motivated overseas vendor wants it sold!!

x 100

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Created a multi tiered debt trap for your youth
Congratulations NZ
5 years since I left & sure was the best decision
Now your $ is virtually in free fall too

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What a time to be a banker dispensing mortgages and gearing up for "the season." One has to wonder what's being said and discussed internally.

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Greg says it all with, "..... the total amount of housing stock available for sale remains well down on where it was a year ago."

That suggests the upward pressure on selling prices will be sustained.

Some people here will lament not purchasing a house during 2016 - 2019, when the market was much less active. Right now there's fierce competition between FHBs and investors for a limited housing stock.

I have a hunch that many vendors will soon consider de-listing their homes. They won't want the public wandering through (e.g. during open homes etc) shedding the apocalypse killer-virus.

Enjoy autumn and winter!

TTP

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"That suggests the upward pressure on selling prices will be sustained."

That assumes that effective demand for housing is unchanged. In light of a recession, what do you think happens to effective demand for housing?

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"Some people here will lament not purchasing a house during 2016 - 2019, when the market was much less active. Right now there's fierce competition between FHBs and investors for a limited housing stock."

Yeah I'm one of them for sure, back in my mid 20's I though "hmmm maybe I should look at buying a house" But I thought against as I didn't have the deposit nor was it a priority at the time. now in my late 20's with no partner it is certainly feeling like I missed the boat and set back like 7 years or even 10! But it's all good, is what it is and the decision at the time is not something I'll beat myself up over.
I'll be keeping a slightly better eye out this time though.

Gallow

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Wash your hands well after shaking hands with the super smooth agent!

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And avoid touching your face.

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Can I touch his face though?

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Yes, but not with your hand.

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Wonder in recession - if it will only be housing market that will shine as many small to medium business are already feeling the pinch.

Stocks are falling like ninepins, interest on deposit is negligable, business are down and falling, overall sentiment/earnings is down.

Have to see with low interest rate and business sentiment falling (already Low) and recession on the horizon how many will go forward with low earning and with jobs at risk - despite low interest rate with their plan of housing speculation/development.

Interesting time ahead as interest rates are low but NOW even earning will be low.

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There's already signs the inner city Auckland rental market is being impacted by lack of Chinese students. Air b-n-b has to take a big hit from the drop in tourism. Add to that a few job losses and negative sentiment from people seeing their Kiwisaver balances take a big hit, how is the housing market going to shine?

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Here is the belief of property price bulls:

1) residential property prices double every 10 years
2) there is a current underlying shortage of housing in Auckland. In Auckland there is population growth, both organic population growth and inward migration
3) house prices only fell 10% during the GFC in 2008/2009

What do they not know that they don't know?

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NZX is crumbling. All because Jacinda was not prepared to secure the borders for fear of looking anti migrant to the outside world. Does this lady care about her own people atall? She is also close to forcing Australia to cancel the special category visa, taking a lifeline away for many kiwis. She has to go but National are a joke too?

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LOL are you for real? There is no country on the planet that could manage to stop the coronavirus spread (USA, Australia, all of Europe are now infected). But sure, Jacinda is mighty incompetent and careless for not doing a miracle that no other world leader managed to do.
Would your expectations be this high if it was Simon behind the wheel? Or DonKey?

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Just hope that this virus thing ends soon (Under control) or will be bloodbath (Current fall in Stock market between 10% to 15% in a week - unheard of may be just the begening if unchecked and continues).

Next target to be hit will be feel rich housing market . Though interest rates will fall - marginaly from already low rate but earning and income is and will fall drastically - offsetting the falling interest rate ithat we have seen in last few years and how many will be bold to speculate in recession.

Picture should be clear by end of march and if the world goes in recession than will be very bad for few time to come (If the stock market falls by 10% is a correction and if it normally falls below 20% is recession on average and currently Stock market is down by appx 12% to 15% ) .

Investors and/or speculators anyone in the current environment should wait and watch as this is unheard / unchartered territory (Not the usual buy on dips).

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The smart people could see the potential vulnerabilities. Here are the actions of one person likely in the know who sold down their exposure to real estate in Auckland - https://www.stuff.co.nz/life-style/homed/celebrity-homes/96673228/sir-j…

A potential signal that was missed by many ...

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What shut down Auckland airport altogether? are you for real?

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Some people just want to kick Jacinda in the guts whatever happens. Whether it's her fault or not, doesn't matter.

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How about people judging her on her achievements and leadership rather than the number of cuddles, bottle openers she passes in the Koru lounge and/or what she's wearing on the cover of Time? If they did they would see the worst PM in living memory.

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That is your opinion Ex Expat, you are entitled to it but you don't need to make it everyone elses. I judge her on her achievements and think she's done some great things for NZ in her time as leader and striving for a really ambitious future for ALL NZ'ers rather than the alternative we are served up (Selling houses to each other and milking as many cows as possible).

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@Ex Expat
If you are judging her by what benefits you can get with her as PM then she's performing poorly. But if you are judging her by what benefits your children and your children's children can live on in the future with her as PM then she's performing brilliantly.

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If you are guaranteed to have lives lost if you keep it open... why not close it? JA is responsible for protecting us. Is money more important than lives in this new NZ?

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In theory it is great but ion real life shutting down the border altogether? Next minutes complains will come in thick and fast that no one is buying all those houses..

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You cannot shut the borders indefinitely. This isn't something that is going to go away in 2 weeks, you'd need to shut the borders for a year, and chances are it'll still be there waiting when you reopen the borders anyway. This is a pandemic, you can't avoid it, the best you can do is try to slow the spread to a manageable rate.

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This is ridiculous. The virus was detected back in November. I'm sure closing down the airports 3 months after the first case would make a lot of sense. And for how long? A year? Lock down ship traffic too?

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You close the border to countries with uncontrolled viral outbreaks, its very simple. You quarantine aeroplanes from danger countries for testing. Begin construction of large temporary quartine facilities. Prepare old and sick people to self-isolate if it breaks out. Make sure information bulletins are distributed to old and sick people about how to stock for long isolation and prepare special delivery services to ensure deliveries of food and supplies to self-isolated people without infecting them.
We are simply behind the curve, and yes that's because of incompetence.

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If you were an 80 year old emphysema sufferer who will die if you catch the virus, I suspect that your opinion may be a bit different. Consider, if this was a deadly contagion that was guaranteed to kill 100% of the population would you close the borders then? I thought so, because it would affect you! Its a shame that people in NZ seem to only care about themselves and money nowadays. What happened to good old NZ values?

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The difference is closing the borders is guaranteed to kill many, but not guaranteed to stop the disease from getting here. Kill the economy and do you know how many people will die, some by their own hands, some of the effects of poverty.

https://www.youtube.com/watch?v=0k5aVLi_yhM

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Given current conditions, what other alternatives can an 80 year old emphysema sufferer and other people at risk do to reduce the risk of catching the virus?

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Quite a lot really. Wash their hands regularly, ensure they have sufficient support (family), have a bit of extra food/meds on hand. Goodness if they really wanted to they could self isolate now to (almost) guarantee their safety.

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Yes - shut down all airports, train stations and bus shelters.

We must protect public health at any cost.

TTP

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Force those empty houses to open up for those homeless and sick people. We must protect the public's health at all cost

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No no no, not at the cost of the sacred PROPERTY MARKET!

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Money is more important than life in NZ nowadays. The greed has gotten to a sickening level.

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"We must protect the public's health at all cost"

FYI, to protect the public health, where there were a large number of infections, there were reported incidences where the government locked people in their houses in China.

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"We must protect the property market at all costs!"

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Shut down the auction rooms?

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Yes the airport should have been shut to all but returning NZ Citizens trying to get home as of 2 weeks ago but now its to late mate. They should have shut the airport and then reviewed it weekly. Until there are signs that the spread has stopped it should have remained closed its a total no brainer. Shame however we are more concerned about the economic impact that we are about saving lives. Beating the virus is all about pushing out the time before you get the first case and therefore buy time for a vaccine to be developed.

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How would that stop the NZX crumbling?

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NZX only started crumbling when a case, from Iran, was announced.

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Really? Suggest you go look at the charts, it was crumbling well before friday of last week when the one (and so far only) contained NZ case was announced. NZX50 has been declining since the 21st. A week before the first case was announced.

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Yes, really, just looked at the charts, the biggest drop was after announcement that Coronavirus is in NZ. I suggest you look harder.

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Thats some high level confirmation bias going on there. The market starting dropping on Monday, the announcement was late afternoon Friday, about an hour before the market closed. In fact from 3pm to market close on Friday the market went UP about 0.5%, not down.

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NZ case announced late on Friday. We had a weekend in between. Lets see how today ends.

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You're pedalling very fast.. back pedalling that is.

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Its not quite over, but barring a late drop at the close, its doing better than Friday, and better than Wednesday last week. Your hypothesis is rejected.

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The only way to stop the NZX crumbling is that the NZ Stock Exchange is closed. (For example, did the NZX crumble on Saturday or Sunday?)

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The NZX is the trading place for money already invested. Aside from saving some portfolio revaluation shocks who cares?

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" Aside from saving some portfolio revaluation shocks who cares?"

A subtle financial linkage to the untrained eye:

1) The NZX price fall (and those in global stock markets) impacts portfolio values.
2) Including values of portfolios invested in Kiwisaver
3) Kiwisaver withdrawals are a source of funds for deposits for first home buyers to purchase owner occupier residential real estate.
4) First home buyers were 19% of the new lending by banks (so potentially 19% of buyers of residential real estate)

https://www.interest.co.nz/property/103826/new-residential-mortgage-len…

Question: What happens if first home buyers now don't have a sufficient deposit to buy a house?

At current house price levels, the pool of potentially active house buyers has just shrunk.

It is these types of financial linkages that many don't know that they don't know about.

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F b,

If you think falls in the NZ stockmarket have anything to do with the actions/inactions of our PM, then you are living in some parallel universe.

Basically, fear and greed still apply. As the markets rose, greed ruled and has now given way to fear. It has happened many times before and will certainly happen again.

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Steady. Its not a zombie apocalypse. If you have low/no debt and are gainfully employed in a fairly safe sector you will be fine. Will some overseas owners of empty homes be motivated to liquidate - quite likely. Will house prices in Awk be impacted - if a lot of overseas exiter's start to force the pace then of course they will. If you are farming lots of debt stay close to your banker as they can change the rules on your borrowing at will - yes that is in the banks agreement.

Is it time to grab popcorn..?

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"that is in the banks agreement" - When one of my colleagues bought a house about 2 years ago, I asked him a few simple questions about his mortgage (can the bank switch it to principal + interest, is there a penalty for paying more than required etc). He was just grinning like an idiot, laughing that he didn't read the agreement.
This is a fairly smart guy with an MSc in IT, taking out a loan 6-7 times his annual income. If someone with an above average IQ can be this stupid (or careless), just imagine how much thought the average person put into their mortgage...

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Having a higher than average IQ doesn't translate to having a better understanding of finances.

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The world economy has been teetering on the brink of recession ever since the GFC. The failure to let the excess of debt/zombie companies be flushed out of the system, by just encouraging more debt through artificially low rates, has built up massive systemic risks. It is not a question of "if" this will come back to bite us, but "when".

NZ avoided the worst of the GFC last time round due to our links to China. But the COVID-19 event might mean this time China may not be the saviour and may actually be hit the hardest.

It feels like a dangerous time to be highly leveraged, with huge debts. Unfortunately we have increasing number of first time buyers doing exactly that.

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Yeah.
Watched that Martin North video that someone posted a week or so ago about the Repos, that's seriously scary.
The coronavirus is just the start of it.

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When anyone looks at a household budget, I use the "F.I.R.E." principal - SLASH as much as you can:

F = Finance charges - credit card interest etc

I = Insurances - all insurances, of any kind

R.E. = Real Estate - reduce or eliminate your mortgage and/or rental payments.

The banks, insurance co's. RE co's and their hangers on etc just hate it !

And stop running around in circles, buying products you can't afford, to impress people who don't care !

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But...but the car dealers ...oh the humanity.

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And the poor boat dealers. They have had a good run selling lots of pricey boats to cashed up builders but their lives are about to get much harder. Lets hope they were clever and saved their recent profits. If not... god help them.

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Car dealers were reportedly a large number of those made unemployed during the GFC in 2008/2009.

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For car and boat dealers etc see ....... “stop running around in circles, buying products you can't afford, to impress people who don't care !”

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dp

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My wife and I yesterday looked at house to retire to next year on the Coromandel, while it ticks all the boxes I’m now thinking of sitting on the fence for the next 6 - 12 months. My thinking is that any heat in the market will be extinguished sooner rather than later. IMO A lack confidence in the current market by buyers must put downward pressure on prices.

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Be careful, we've already been told by our own expert spruikers that the recent realestate.co.nz data *clearly* suggest an upcoming upward pressure on house prices! The virus is just a blip!

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‘recent realestate.co.nz data *clearly* suggest an upcoming upward pressure on house prices! The virus is just a blip!’
Would make a good Tui ad - yeah right!

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If the virus ends up being the catalyst that crashes world stock markets (much more than last week), expect that to flow through to NZ's inflated property market - not immediately, but certainly. Central banks will do their best to prop things up. NZ property won't be a safe haven, at least not until there are plenty of bargains around again.

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Yeah.
Despite what some say, sharemarkets and housing markets are connected.
Some of the big housing crashes have been precipitated by stock market crashes.

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"Some of the big housing crashes have been precipitated by stock market crashes."

Some of the big housing crashes have also been the cause of bank recapitalisations ....

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"expect that to flow through to NZ's inflated property market - not immediately,"

Largely dependent upon how quickly businesses who are experiencing a reduction in revenues, cut costs - particularly staff. No job, no pay, and the household may be unable to pay mortgage. Most owner occupier household purchasers in Auckland in the past few years require the income of 2 income earners to support the mortgage payments - if one loses their job, the regular debt payments on the mortgage may now have become unaffordable.

Also a function of what the banks do with those in default - will they force mortgagee sales (more likely for high LVR mortgages), or will the banks give interest only loans to help struggling borrowers.

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Press release by NZ Bankers Association:

”Potential measures to assist bank customers include:
- Reducing or suspending principal payments on loans and temporarily moving to interest-only repayments
- Helping with restructuring business loans
- Consolidating loans to help make repayments more manageable
- Providing access to short-term funding
- Referring individual customers to budgeting services.

https://www.nzba.org.nz/2020/02/27/coronavirus-affected-customers-urged…

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Meanwhile gold has resumed it’s march north as predicted. Sooner or later it’ll go parabolic - probably sooner IMO

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I ##dy hope so! It was my hedge against this scenario and hasn't been doing as planned!

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Never in a straight line, but I agree gold should continue to do well, as it has over the past year.

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Gold has tanked over the last few days

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..hardly tanked. But it gets manipulated to hell (mostly downward). Keeping it down via manipulation may not be possible long term. We will see, but factor in the printing press and or declining US dollar and it has a very big potential upside. Might be wrong..but that's my play/choice.

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An increase in listings is NOT a positive sign, its a sign of people quickly trying to bail out at the market peak and before the possibility that the Coronavirus totally destroys the stock market and our economy and your job is on the line.

What I'm more interested in is how fast this sudden inventory increase starts actually selling. If the buyers dry up and the stock keeps climbing through the roof is that still a positive sign ?

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Yeah, again, are some of the increased listings Chinese owners trying to offload? Only speculating, but someone out there strongly connected to the market might have some ideas.

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Does anyone have the Realestate.co.nz property report for February, it doesn't seem to be on their website?
Thanks

Edit: latest full report now available on RE.co.nz

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Webmaster got Corona

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One? Hopefully a whole box, and a couple of limes.

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26.6% YoY increase in asking price for Wairarapa. Must be all the new builds starting to come live, plenty more on the way. Potential for overshoot.

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As an active Agent on Hibiscus Coast responsible for stats recording for my Firm I can assure you that listings are NOT back to Feb 2019 levels. They remain 35% lower. As do those for Rodney as a whole. They ceased rising and started FALLING again, about 5 days ago. The listings in Auckland are also crawling up.
Retreat of listing has come about 5 weeks earlier than normal.
By the way, I have the Auckland figures for March 1st 2019 for all listings = 13,990.
Today it is 10,383: a 29% drop. So, new listings may be what they were a year ago, TOTAL listings are not.
In Rodney, house and townhouse total listings are 33.73% lower than a year ago.
Orewa, Millwater, Silverdale ,Red Beach, Stanmore Bay, Manly and Gulf Harbour total a year ago was: 567
Today it is 364, or down on a year ago by 35.8%.
Orewa is 74 today (excl duplications) and was 125 a year ago: 40% down.
Stanmore Bay is 41% down.
Red Beach is 58% lower.
The real hit from the virus will be when inventory is hit, in about 5 weeks from now.
Funny, that will coincide with my forecast that sales and prices will start falling in April.
Where are you Yvil??

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Thoughts on why listings are down? I would have thought the over leveraged would be getting out.

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No panic selling I don't think and not likely for 3-4 months at least, and then minimal numbers.
Lots of old listings were cleared out by huge rise in sales in December and a lot also withdrew because were not getting offers they wanted from buyers.
Market is currently driven by extra debt for FHB and investors, not existing owners.
As we get more and more townhouse and unit sales (reflecting consent priorities) median price will stall and then fall.
Sales in Auckland will be 5-10% lower this year than in 2019.
Has to be borne in mind in all this the STOCK of housing has been rising about 12,000 pa for 4 years.
SO, should expect more sales.
Yet in 2019 fewer were sold than in 2009.

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That's interesting Mike. I thought I'd noticed a bit of a flurry in the area the last week or two, although prior to that it was feeling a bit dry. I do wonder if the article is correct though: is the decline in total listing driven by dead wood (overpriced and unsaleable) being pulled? I see some decent homes out here out the moment but the overall prices still make buying feel borderline.

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Yippee y’all even higher housing prices
Creating a livable city for the ultra debt burdened
Kiwi quarter acre paradise lost
You’ve destroyed your lifestyle forever Auckland
Good riddance

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I love Auckland, I think it's wonderful city to live in

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Not surprising, everyone wants out and better now that the cat is bouncing than when it is dead.

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