Auction numbers passed 200 in Barfoot & Thompson's auction rooms last week and sales rate steady at 55%

Auction numbers passed 200 in Barfoot & Thompson's auction rooms last week and sales rate steady at 55%

Barfoot & Thompson's auction rooms are now in peak selling mode with the real estate agency handling 216 residential auction properties in the first week of March, up from 170 the previous week.

March is traditionally the busiest month of the year for the residential real estate industry and that also appears to be the case this year.

Of the 216 properties offered by auction last week,118 were sold, giving an overall clearance rate of 55%, almost unchanged from the last week of February when 170 properties were offered and 95 were sold, giving an overall clearance rate of 56%.

A notable feature of recent auctions has been the relatively high number of properties being sold prior to auction compared to recent months.

That occurs where a potential buyer is so keen on securing a property they are prepared to make a pre-auction offer at a sufficiently high price that the vendor does not believe they are likely to get a better price at auction and takes the "bird in the hand."

Last week 26 of Barfoot's auction sales were sold prior to auction, which was 22% of all auction sales.

At Barfoot's main auctions last week where at least a dozen properties were offered, the highest sales rate of 80% was at the Shortland Street auction on March 5, where most of the properties offered were from central suburbs such as Royal Oak, Greenlane and Mt Roskill, with a sprinkling from western suburbs such as Glendene and New Lynn.

The lowest sales rate of 44% was at the Shortland Street auction the following day, where most of the properties offered were from the western suburbs (see table below for the detailed breakdown).

Details of the individual properties offered and the results achieved are available on our Residential Auction Results page.

The comment stream on this story is now closed.

Barfoot & Thompson Residential Auction Results
2-8 March 2020
Date Venue Sold  Sold Post Sold Prior Not Sold Postponed Withdrawn Total % Sold
2-8 March On-site 8   3 6     17 65%
3 March Manukau 15   3 18   1 37 49%
3 March Shortland St 14   3 10     27 63%
4 March Shortland St 24   5 18 2 2 51 57%
4 March Pukekohe 1   1 5     7 29%
5 March North Shore 15   6 19 1 1 42 50%
5 March Kerikeri       1     1 0
5 March Shortland St 8   4 2 1   15 80%
5 March Waiuku       1     1 0
6 March Shortland St 7   1 8 1 1 18 44%
Total  All venues 92   26 88 5 5 216 55%

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121 Comments

14
up

Stay put and stay above water for a year.

Things will get worse before getting better.

But, it will get better eventually.

Agreed. Now is the time for patience. While the attraction of super cheap money is there, it merely serves to prop up assets, and banks can reset rates anytime at a whim. The debt you take on can only really be reset by bankruptcy. The yanks are lucky - they just send the key back to the bank and then buy the next door house at a cheaper price with a new mortgage.

Howdee Averageman, I wish the Yanks had it that good ! ...yes, you are right - you can throw the house keys on the bank managers table and walk out ...but you then have to "rebuild" your credit score, which could take 3- 5 years or more, to just apply for that mortgage. So the only way you can buy that "cheaper house" next door, is with cash or find a "hard money" lender at 9% and you wouldn't get the 100% either.

Except it actually very rare you can throw the keys on the bank managers desk and walk away.. the whole non-recourse mortgage thing is way way smaller than urban lore makes it seem. Only in a few states, for some mortgages, and if the bank is happy with a quickie resolution to the mortgage. If you miss on a couple of those criteria its almost always a full recourse mortgage just like it is here in NZ.

Used to be seven years of credit repair after a foreclosure (mortgagee sale) and three to five for a short sale (bank agrees to let you sell the home for less than the amount owed—after reams of cumbersome paperwork and stress).

There are a few states in the US that do not allow deficiency judgments (i.e. the bank won't come after you for the shortfall in your debt); I believe these are Arizona, California, Nevada and Florida—maybe a few others. It may have now changed. Interestingly these had very high numbers of repos over the GFC (go figure).

Having said all that, I am well aware (personally) of many cases in the US of people dumping their homes and somehow magically ending up in another one up the road for half the price within a year. For example, if you have cash in the bank, you could let the bank foreclose and no skin off your nose; go and get another home and you're better off than repaying a loan three times the value of your home. Still not a great outcome to have your credit trashed, but in many cases, easier than doing a short sale.

For FHB's, getting better means the bubble popping. So for them things are not getting worse now, they are getting better now.

But unfortunately, because of the ridiculous spruiking and lending polices of the bwanksters, the process of getting better will crush a big part of the economy in the process.

If house prices collapse FHB will not have jobs to service debts anyway..

Housing is a pretty safe place to be at times of uncertainty - like now.

People still have to live somewhere - and there's a dire shortage of houses in NZ. Hopefully, the demand for housing won't be reduced by any mortality arising from covid-19.

Whatever, the housing market is destined to slow in the near-term. Covid-19 is a very serious matter which will have far-reaching effects - both for the economy and our social systems - as I've been emphasising here over the last few weeks.

TTP

TTP the dire housing shortage could change rapidly if this recession unfolds as predicted. It's would hit low paid jobs hardest, especially in hospitality. Which means, less work for immigrants, less demand for housing.

yep, the Irish houisng boom/bust springs to mind.

"as I've been emphasising here over the last few weeks."

Bugger off.
Don't try and claim you're Nostradamous and all awake to global macro risk now.

You've spent years discounting global macro risk as the bogeyman.

But on the other side of a recession they'd be better off from being saddled with less debt. As would consumption in the future, as folk are able (like recent generations were) to consume more after having paid off their houses. A crash would just flush out unreasonable prices and companies that are not viable in (what without central support would be) a free market.

Ponzi
Forget about FHB jobs.
The more pressing uncertainty for us here in the provinces is what is going to happen to the Auckland property market when Auckland City in put into quarantine as a containment strategy?

There will be no sales happening.. so you'll have no idea which way prices are heading for a few months.

Until next year comrade, year of the OX - right now, the rat/pest will be the ruler for this year. The Covid19 seems to target the countries with cold climate, with many elderly demographics, it's always there stay dormant/latent to strike every winter I believe, this RNA strands tend to evolve/adaptable quickly, can even transferred/hosted by our beloved pets, for awhile... then transmitted back - very cool rock star bugs !

Surprised activity is still rising as of last week (24% more houses sold than the previous week)

More listings ,more panic

Dogboy
More panic among those rushing in to purchase???? :)

I thought volumes didn't matter printer8?

Housing market is not he first to take hit in this situation but if it contunes story will be different in May/June.

For Comparison : Current Housing market = Stock market 3 weeks before : where everone was positive and still talking about boom despit negative indication as knew will get easy and cheap money.

If things do not get under control. one should not be surprised if Housing behave after 6 weeks the way stock market is behaving/reacting now.

In this environment it does not take long for sentiments to change .

Wait and Watch.

alittle
I agree.
Interesting as to what impact Convid-19 will have on the NZ housing market.
The current situation with the share market may or may not be reflected in the housing market. Many in the share market will be taking their considerable capital gains - even over the past year - and seeking a safe haven - that option is not possible if the house is your home.
Barfoot's auction results are the best early indicator barometer of changes in the market and currently sales successes are surprisingly stable.
Currently I am keeping an open mind.

Interesting indeed, Printer8. I'm quite glad I didn't buy that house I had an offer on last month now, despite the abuse you threw at me last week.

Funny how things turn out, isn't it?

No Bid-data
Comments still stand; a house to live in is called a home. It is about lifestyle.
Provided one can and continue to meet outgoings, short term falls are irrelevant.
Two aspects to your situation;
You have been hesitant to buy holding off since 2012 while house prices have near doubled (ouch) so a short term 10% drop is not particularly significant, and
You talk of buying in 2012 but I think I recall you saying your mortgage broker was talking about needing a letter from a (fictitious?) friend to say that he would be renting a room so over past 8 years home ownership doesn’t seem to be getting any closer and seemingly now stretching you.
Basic principle; trying to time the bottom of the market is a fool’s game. That has been expensive for you the past 8 years, and any short term fluctuation is meaningless.
Freedom of choice; you just keep paying off your landlord’s mortgage in the meantime.

Indeed, Printer8. But as I expressed in my post on Feb 28th, my concern about buying now is not about short-term fluctuations, it's about a looming GFC. Guess I wasn't that dumb, after all.

Eight years you have been holding off - your decision but just make sure apprehension/fear is not the factor that clouds your decision making as market movements over that period have been costly for you. There is always going to be some sort of risk.
Banks factor in one’s ability to withstand shock (in their vested interest) and I doubt that we will be seeing mortgagee sales in the short term. I have always said two things; short term fluctuations are not important and to pay down one’s mortgage as quickly as possible - even when interest rates are so low.

Thanks for your tips as always, P8. As I mentioned before, the reasons we didn't buy before were pragmatic; we had business interests to fund, we hadn't settled on a location, we weren't familiar with the NZ market, and we already owned properties overseas. It wasn't a fear-based decision, just circumstances. It wasn't until around 2018 that we had freed up capital from our business, and looking at today's market, I don't regret not buying then. I am aware that there is 'always going to be some sort of risk'. Having seen spectacular crashes, lost money, and made more, I don't worry overly about this. I do, however, in general aim to avoid buying right before a major decline, and there are numerous market indicators that that is where we are now in NZ. Wouldn't you agree?

You mentioned that you assumed I would be 'stretched' if I bought, because my mortgage broker had told us to get a letter off a fictitious lodger to increase the amount we could borrow. On a point of clarification, my broker asked how much we wanted to borrow and I said "as much as possible". He took it upon himself to fabricate our 'lodger' on that basis, without asking me. I don't support mortgage fraud. The amount he came back with was easily $200k more than we wanted, and way more than we need. I'm keen to get payments at a comfortable amount, and one measure I use is to assess whether the (fixed) weekly payment exceeds the current rentable value. As long as it doesn't, if the sh*t hits the fan, you're usually good to rent your home out for a while if you really have to—even if you have to move into a smaller rental yourself. Hate the idea of being in the red month on month on a rental investment.

By the way, the banks for whom I sold repos in the US also factored in buyer ability to withstand risk. Didn't work out all that great for them, remember.

Cheers Bid Data.
Wish you well for your future.

alittle and Printer 8: more important factors you haven't taken into account: The bank economists see the RBNZ reducing the OCR at least twice and possibly three times over the next few months. (I agree there will be no "knee-jerk" immediate reduction).
So, over the next few months what interest rates will be offered to depositors? 1% if you're very very lucky.
Also are you happy to put all your savings in the bank/s? Are you happy with the stability of each bank? Remember, it wasn't so long ago that we had to sell off BNZ in a fire sale to Aussie big banks enriching the likes of the bank-sale brokers Fay and Richwhite in the process. And our having to sell off the ASB under similar circumstances.
BUT ARE THE BIG AUSTRALIAN BANKS IN A POSITION TO BAIL US OUT AGAIN? I DON'T THINK SO! THEY WOULD JUST BE TAKING ON A MOUNTAIN OF DEBT; THEY WOULD JUST LET THEIR NZ BRANCHES SINK.
As a retiree I am happy to have about 3/8 of my investments in defensive shares (even if they dip now they'll be ok in the years ahead) and the 5/8 balance spread around 3 of the main banks in term deposits. I also have a mortgage free home in a leafy suburb and an empty unit in the periphery of a leafy suburb.
I look upon my property as my securest investment by far.

most auction programs are 4 weeks or more, corona virus was a mere whisper in the wind in the first week of Feb

Looks like the black swan hammered the shares but flown away from the houses. DGM cannot understand this result.

25
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Property lag will be about 2 months away, possibly earlier if what happened in Italy happens here.

The good news is all the property Bulls will be able to blame it on Winter or too much rain

Agreed, also the property bulls are ignoring the fact that more sellers are now meeting the market at more realistic prices. You can see this even in the auction results. Take a look at 30 Malvina Place, Bucklands Beach, Auckland for example. That property was flipped twice in 2019 according to council records. Since then it has made a significant drop from when it sold in September 2019 for $1,190,000. Sold March 2020 for $1,050,000. And its RV was $1,400,000 (in July '17).

Here's a few more: 19 Tainui Street, Torbay, Auckland. 2017 Rating Value: $940,000. Sold for: $650,000.

* 93 John Downs Drive, Browns Bay, Auckland. Rating Value: $1,200,000. Sold for: $1,100,000
So not that many selling significantly above the million mark.

Hi punching bag CJ099,

You're wasting your time trying to draw sweeping conclusions from quoting one-off, solitary examples.

Most people here aren't completely stupid: when there's a rat hanging around, they can smell it.

And by the way, prices are up significantly over the last year or so. But you already knew that - despite what you say.

TTP

We can certainly smell a rat TTP, that's for sure...

Ttp, You can name call all you like but it is you who are the punching bag. If house prices were up significantly in Auckland they would be beyond their 2017 stagnation levels, which they aren't. And it's a bit hypocritical of you to give any property investment advice when you Ttp don't even own your own home do you. :P

TTP didn't respond to my comment yesterday, that if he was a real estate agent or not, so what is it TTP ? ....... that's the reason I never take him seriously....bit of laugh really, as he reminds me of the older "know all" uncle, with that terrible mixture of both ignorance and arrogance, at the family BBQ, spouting on about investment properties and it's the ONLY game in town etc etc etc

Yes agreed CH, Especially when TTP resorts to being abusive, he's a bit sad really. We've never been able to get him to support his view point with any evidence. Either that or he is a Real Estate Agent and probably not a good one, since he seems to be confined to a corner in the office to troll property comment pages and spin them when he can, getting First Time Buyers in to huge amounts of debt.

Lets wait on the selling price, it's too early to conclude... Same thing as what's happening for share market. ShareMarket drops 4% today and it's because everyone is selling...

Yep too early but 2018-2019 experience might even give the most one-eyed DGM a clue ... houses are very resilient against any serious downturn thats for sure

Most of time houses are resilient but when financial crisis hit in 2008, they weren't looking that resilient, were they? This can be the time for another financial crisis...Hope that people who are buying off houses at high prices with a huge debt know what they are doing...

Yeah should be carefull.

One eyed dgm ,would still see more than a blinkered spruiker

Hi company of heroes,

Re shares, it's BS to say ".... everyone is selling...."

There are still plenty of people buying!

TTP

Yep, it was clearly a bull run on NYSE today.

ttp
Agreed - for every seller there must be a buyer; so currently as many buyers as sellers.
It is just that there is a bit more pressure on sellers at the moment.

Is that true? Just because im selling something does not mean somebody has to buy, especially with recession looming

TTP, CJ, Dogboy, you seem to have no idea how the share market works?

Yavil do you really think the share market is going to help you when tourism dries up due to the Coronavirus (Since you're a motel owner). Didn't you mention just recently that you were only able to stay afloat until the end of this month, other wise things were going to get a bit tight.

by CJ099 | 10th Mar 20, 1:58pm
Ttp, You can name call all you like..

How is you always calling me "Yavil" different?
Also I certainly never mentioned that I'm only "able to stay afloat until end of this month", simply because it's not true and we're doing very well. It's very low of you to make up things like that, it's actually defamatory

Yvil, when did i mention share market? Having a senior moment?

The thread you replied to was clearly about the share market

Exactly, we need to tell this vigorously, that..literally nothing, nothing on this planet can sway about the house prices in NZ. Buy.. buy buy.. I mean, really buy it now, why wait?.. way savings? that is really the dumb & false economy which being preached from Childhood silly schooling.
Get a loan, mortgage wisely to the tilt, low interest. C'mon guys, it's all over the shops now.. buy now, pay later - Orr & mates already advises so, they knew better about our economic strength - spend, spend, spend - only DGM fools into those savings crap, go get a loan from the Banks, those pretty sitting properties, won't sit there for long if you just keep on watching.. someone else smart will snap it, so? get smart!

That's the beauty of shares - you can see the market price one a minute-by-minute basis and buy and sell as soon as you like. With housing, you have to glean the feeling of the market from data which is delayed by weeks -> months. Do you think liquidity is a bad thing?

If it dumps it will start in the regions with the biggest economic distress, logging, tourism etc... Rotorua may not be a good bet right now.

If the drivers of price in those regions have been big debt city slickers, the feedback could be worse than a Jimi Hendrix solo.

21
up

It's a good chuckle this lot!
Watching the last drowning men clutch at straws.
If the last week hasn't given us a glimpse of the future, I don't know what will!

13
up

There are alot of people out there still oblivious to what is happening.

When it strikes here and people start dying and we see community transmission there will be a sudden awakening

Indeed.
Milk futures will tell where NZ is heading. Early days but watch this https://www.nzx.com/markets/nzx-dairy-derivatives/quotes/futures/WMP

Next GDT auction is on the 17th.

One of my big fears is for our older citizens in retirement villages. If CV gets a hold in one of these places the results could be quite devastating. Hope they are taking extraordinary precautions.

Having visited one over the weekend, I can tell you there was no extra measures being taken at all, unlike the business I work at which has sanitiser & wipes everywhere

@ theglc..... sad, but not surprised. After watching nano girls video explaining how CV is spread, wipes would not be something I would use. https://nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12314826

In the context of what's going on in the wider environment, the relevance of house auction sales could be interesting if the volume of sales were 3x-5x higher. Mind you, it's another indicator of an ominous unknown: the health and vitality of the NZ / Aust banking landscape.

"the health and vitality of the NZ / Aust banking landscape"

Indeed. I haven't seen any movement on the proposed (well, conceptualised) bank deposit protection since a vague statement was made almost a year ago. I imagine that there may be more than a few potential buyers considering the risk of sitting on their hands if the OBR has to be activated. If things head south maybe a quick flurry to get cash out of the bank and into something tangible, say, for instance Bricks and Mortar?

Of course most likely it will appear that all is well...until it's not.

I note last week’s buying frenzy in Kerikeri appears to have quickly stalled – back in the doldrums again.

I think we will need an corona virus outbreak in an auction room, a full lock-down in NZ or at least one of the big four banks in Australia or here requiring assistance before we see a slow down the housing market.
I was having a conversation involving a work colleague in his early twenties who's actively trying to buy a house. During this conversion about the corona virus he brought up that we are likely to have a recession. He's so indoctrinated (i think this is the appropriate word) by his (grand)parents that he can't process the effect of the recession on the housing market.

Unless people have been through market falls and recessions they have no idea how it will play out. It's been 12 years since the fall out of the GFC so there's a whole generation with no idea.

I'm glad if that young chap not into this recession 'DGM bullshites', he/she will surely can show to their parents generations as how to deal with this in the modern settings - Haven't you heard about online purchase/auctions? - These days, you just click the house you wanted on Trademe, click buy now.. voila! - your email will be flooded with links to: LIMs report, Lawyers, Accountant, builders reno, CV/GV/RV/SUV/STD etc. - Turners online auction for the cars, I mean - honestly, why risking even venturing out of the front door? - Heaps, of apps ready designed for use. Attending auction room, visiting property sites is just really an old fashioned way.. soon will be labeled as a dumb things to do.

It is Obvious now more listing will and should come to the market as economy is facing recession so anyone who wants to sell should do it fast before it hits the housing market badly....

If the economy situation continues the way it is - housing sector will not be immune.

Few weeks before everyone was talking about boom despite corona virus since december/January and today is bloodbath in stock market and still no end in sight of this bloodbath to stop. NOW all experts have reason and justification for this fall in stock market (Today dow jones went down by appox 2000 points and that is after already falling appox 4000 points in just last week of February).

If current situation continues will be interesting to see Auction result in April and will than blam winter LOL.

Lets wait and see what happens with interest rates. 2.7% fixed one year by the end of the year. Every rental (even in Auckland) will be cash positive.

What makes you think interest rates will be that high by year's end?

The housing market in most locations in Nz will be just fine.
What this does signify is that property is a far safer investment than equities and stocks!!!
We continually get told to invest in the productive sector rather than the property market.
The thing is that the property market is the productive sector and as I have continually said, the share market is just blatant Gambling!
People invested in Shares are going to shed a lot more tears before this finishes!

Would you care to explain in what way 'the property market is the productive sector'? A serious question.

"Productive sector" meaning far too big of a sector for the NZ economy, which is dangerous when things turn to custard, as they inevitably will after this long credit binge and speculative pricing run.

It keeps the following professions busy:
Plumbers
Valuers
Painters
Flooring stores
Drapes stores
Appliance retailers
Real estate agents
Plumbing stores
Lawyers
Councils
Electricians
Bankers
Joiners
Photographers
Advertisers
and many more I can't think of right now

No, the property market keeps Valuers, real estate agents,bankers, crap photographers and lawyers busy.
The rest are kept busy by owners and by people living in houses.

Yeah, that's a trifle bizarre. Maybe it's an emotional reaction to people arguing for more business enterprise in NZ and less focus on plonking all money into selling residential property to each other for more and more money.

"ANZ economists suggest that our expensive housing is affecting the economy's productive potential"
https://www.interest.co.nz/property/94855/anz-economists-suggest-our-exp...

Rick, I know where you're coming from. But what other businesses should NZ take up that are more "productive"? It's hard to think of any other business that we could pour resources into to reap an increased "productivity". It's all very well listening to the ANZ economists rabbiting on but I notice that they don't make any concrete suggestions.
NZ has for years exploited, and is continually making advances in, agriculture (e.g. A2 Milk ). Agriculture 'brings home the bacon' for NZ. Nothing else approaches agriculture except tourism, but I would suggest that the larger our population the less attractive NZ will be as a tourist destination. Tourists want to see pristine scenic nature, not overcrowded cities, and polluted waterways and beaches.
The education industry for overseas students has been exploited massively by the immigration industry and it is debatable whether it could stand on its own feet without the immigration input.
Tech is a specialty that far bigger nations than ours have the luxury to scale up; and whenever a tech startup begins to make some progress here it brings in wealthy overseas investors or wholly or partly moves its operations overseas (think Zero). It certainly needs exceptionally highly skilled individuals which is why we have to import so many of them. Let's face it, average NZders don't have the natural ability to work in this industry. That's why we have to 'walk' so many of our young people through law school instead and enter them into "unproductive" legal employment.
Finally, because we have committed ourselves to a higher population, we need factitious industry like Real Estate and Housing (and all employment that goes with it) to employ everybody. Real Estate gives a large portion of our population who would otherwise not be capable of working in more skilled "productive" employment, the opportunity to earn a living and even perhaps become wealthy.

As per Yvils posting below.
Housing is what provides the most jobs in NZ without doubt!
If no one is buying or renovating or building the NZ economy is stuffed!
If a factory closes up which is supposedly productive it doesn’t really affect NZs economy at all!!!

12
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I sense a bit of fear coming from the usual property bulls. If things get really bad with the economy no asset class will be safe. One problem with houses is that they are harder to sell than some other asset classes. The word out in the market in general is that sell orders are coming out of China. Cash is needed to shore up businesses.

Yes you're right abut that Gordon, Yavil is still cling on to a false economy. When China sneezes the rest of the world catches a cold. And their property market has certainly frozen over. Article from the South China Morning Post: China’s hottest real estate market freezes over as February home sales plunge 80 per cent amid a dearth of transactions during coronavirus outbreak.
https://www.scmp.com/business/article/3064672/shenzhen-home-sales-declin...

" The word out in the market in general is that sell orders are coming out of China. Cash is needed to shore up businesses."

Interesting. Can you elaborate further? What anecdotal stories are you hearing?

Have a chat to any agent you know in Auckland. Whether you get told the truth is in the lap of the gods though.

Real estate agents put their own spin on it - their financial incentives depend on it and their ability to get transactions completed.

"The thing is that the property market is the productive sector and as I have continually said, the share market is just blatant Gambling!"

What.
The.
Actual.

This sure is upside down day.

No, it wasn't just the foundations that got a bit scrambled in the chch earthquakes.. sometimes things in the attic got a bit scrambled too.

It could be part of the productive sector because of globalisation. That means we dont need to produce our own products and food. We can buy them from other countries or outsoucing our manufacturing to them. However once de-globalisation is happening (which is happening at the moment caused by trade wars, coronavirus), property market would be the least productive industry. If it's over speculated, then it needs a correction and could collapse. That's why government dont normally let property market run freely.

Anyone that was around in 87"will know that most property will take a hit - it takes a little longer to work through - property's illiquidity can give a false sense of security - initially

Heads up, chin up.. steady as she goes.. small ripple waves, will do nothing to the big giant cruise ships. Just make sure it's not being steered by clumsy captain.

Ironically the big giant cruise ships appear to be experiencing the most problems.

The big cruise ship aka The Petri Dish at sea..

"Lower interest rates are screaming lower asset prices - all of them!"

"Borrow as much as you can and don't spend it!
Off-Set it and wait to spend your $1 borrowed today buying the same assets for 50c tomorrow"

It's still not too late....but it nearly is....Banks...are going to stop lending as Bad Debt and Default overwhelms their books.

"Lower interest rates are screaming lower asset prices - all of them!"

I don't get that, I'm not saying asset prices cannot drop but you're implying the cause for lower asset prices is lower interest rates.
bw, why would lower interest rates lead to lower asset prices?

bw, I'd like your reply please, (no sarcasm, no arguing), I'm open to your logic

16
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This is going to be bad. The stock market is in a position to react instantly, the housing market will be a month or two behind it. You have your head in the sand not to see this one coming now. 2020 is going to be the year that eclipses the last GFC. The majority of people on here still cannot get their heads around this. All it takes now is an explosion in case numbers in NZ and its the big reset in the housing market. The only question now is how much is it going to fall ??

I agree, it will flow to the the housing market, and hit the construction sector hard. It might take longer than a month of two. Also, let's not forget the big banks. If one of them gets into trouble, watch out.

Carlos, it could be bad indeed, or a vaccine could be discovered next week and everything will be back to normal in a month. Nobody knows

11
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They will have to go through the hoops to get a vaccine approved. It will take at least a year if not longer. We don’t want a short term fix that kills the patient a year down the track. So I wouldn’t hold my breath that a vaccine is going to save us.

The only way a vaccine get released next week is there already was one made at the same time as the virus. Otherwise its trials and testing as indicated. Perhaps the trials can be done on bats to speed it up?

What people don't realize is even if a vaccine was found tomorrow it takes 12 to 18 months to get it into volume production after all the trials. This would be AFTER the virus has done its damage and most likely this will come back in a second wave that is worse than the first. Guess where all this type of stuff goes into volume production like with antibiotics ? Yep you guessed it China. Guess who is going to get the vaccine first ?

3 stages of trials for any drug release take years... unless they find something already on the market that is proved safe and is proven to work for this strain

When a vaccine is found, it will be fast tracked and not subject to the usual delays because of the severity of CV, it's then a question of being able to manufacture it quickly enough. It will not take 1 year for a vaccine to be available

Would you like to take the first test dose?

No signs of panic or big impact from corona at this stage. Given sharemarket volatility, property *may* hold its own, being seen as a safer investment, and especially if the OCR is cut further.
The market will probably only crash if there are widespread job losses beyond that likely in lower paying retail and hospitality jobs.

"No signs of panic or big impact from corona at this stage. "
Property sales in China fell by 90%.

Not only that but Property Developers in China are having to slash prices on new builds and they're grappling with a cash-flow crisis and mounting debts as the viral outbreak threatens to derail China’s vital property market.
Here's the latest evidence from SCMP: https://www.scmp.com/business/china-business/article/3050930/china-everg...

DJIA is currently 30% off its peak. Looks like a crash to me.
USA 10 year was 2% at beginning of year. Yesterday it hit 0.5%
The bond market implosion is going to make equities look like a tea party and most folks have no comprehension at all of what bond market does: it provides credit for everyone else's indulgences and failures.
The oil price crash is going to crash USA fracking. That industry has debt out of this world: $200b plus in junk bonds that are going south as we read.
Virus led to oil break up, led to energy market crash and then credit crash.
Alos, Putin and turkey have decided to stick it to USA, Suadi Arabia and EU
Notice Putin had his agreement with Erdogan and then NEXT DAY he crashes oil agreement. Er, this is a smart cookie.
Bye Mr Trump, Putin has jettisoned his buddy

In these uncertain times, the value of a property may be a matter of opinion; but debt is real.

Importanis : If solution is found soon it will bad but will come out of it but if not than heading for a disastor.

Great post. Debt is indeed for ever, hence the name mort-gage "untill death"

Auctions are still lower than the last decade and some people have to move for schools and work, marriage separation (always a lot over xmas). Add in peak house season is this really a big surprise?

@TTP "Housing is a pretty safe place to be at times of uncertainty - like now".. That reminded me about the Titanic. The conductor was telling the orchestra to play on while the ship was leaning on one side..

Will all please wake up: confidence drives an economy and the housing market.
At present NZ has 5 cases.
In a month no doubt it will be a lot more
Fear will drive the market, not FOMO.
The market will crash (sales that is) in April.
May will be 30% lower than normal in my view.
NZ seems to think it is immune from the world
Both metaphorically and literally, we are about to see that this is not so.

It's not beyond the realms of possibility that NZ avoids the worst of the virus. If that happens I imagine it'll make NZ an even more desirable place to emigrate to, or to establish a bolthole in.

Au contraire. If the virus is seasonal, we are just heading into our winter months as the rest of world is getting a reprieve with the northern summer.

New Zealand might be hit hardest.

Debt is key driver of economy.
Taking it on requires confidence
That quality is about to evaporate.
If and when people are quarantined, then they cannot service their debts.
Defaults will hence rise.
Also, banks are going to get smashed by drop in value of equity and their loan book will deteriorate, as well as all the bets they have been making on the high yield junk.
So, when RBNZ cuts rates, banks will NOT pass it on.

it will be FONGO once again..

"So, when RBNZ cuts rates, banks will NOT pass it on". Yep which also means no drop in mortgage rates if anything they could go up!

I imagine there will be all sorts of threats going on behind the scenes to ensure banks pass on the full cut. Seemed to work in Aus, and we've got pretty much the same banks here.

My prediction for this year was HPI down 7% in Auckland. I might have to revisit that and change it to 15%...
Immigration is gonna be hit *hard* by the quarantines and fear of flying.
There's a record number of new houses in the pipeline.
Many Chinese investors are gonna have to pull out and sell off assets to cover losses at home.
Many mortgagees are gonna lose their jobs.
Banks will be hesitant to give out loans to the average Joe.
I feel sorry for the people who listened to the spruikers and bought a house in Auckland in the past 3-4 years.

One benefit of buying in the regions a couple of years back, is should SHTF and we both lose our jobs (wife's a teacher so *shrug*) we will be able to continue paying the mortgage (P&I + Rates + Insurance) fairly comfortably on the jobseeker benefit.

Depends on what you call regions? Northland has bizarrely shifted their prices up to Auckland levels with their recent RV updates and no economy to support those prices. They now all think they're millionaires but the harsh reality will kick in fairly soon.

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