Westpac economists say after a drop in the second half of this year house prices will next year slowly start returning to their 'pre-Covid-19 trajectory'

Westpac economists say after a drop in the second half of this year house prices will next year slowly start returning to their 'pre-Covid-19 trajectory'

Westpac economists have "pencilled in" a 7% fall in house prices in New Zealand over the second half of this year.

However, the slightly better news is they say, in their NZ Weekly Commentary, that prices will begin recovering next year.

The Westpac economists were the first to pick the fairly quick rise in house prices that was seen towards the end of last year and into this year.

Last year Westpac put itself out on a limb by predicting that New Zealand house price inflation would reach 7% in 2020. But its prediction of a sharp upturn in the market did come good.

And in some indication of how quickly the world has changed, the Westpac economists were as recently as last month seeing 10% house price inflation by the middle of the year.

But for the house market, it's clearly going to be a year of two halves - and how.

As the Westpac economists point out, New Zealand’s housing market "is currently frozen amid the lockdown".

"...But when house sales resume prices are likely to decline."

They say there is little reason to suppose that the long-run fundamental value of property has changed, "but short-term market realities certainly have".

"Job losses and business failures will put fewer people in a position to buy property, and other erstwhile buyers will be too nervous to act."

They say the plan to grant repayment holidays to mortgage borrowers affected by Covid-19 will limit forced selling.

"But there will still be some people whose circumstances require them to sell later this year.

"How far prices fall depends mainly on sentiment, which is hard to predict.

"For now we are pencilling in a 7% decline over the second half of 2020, based on the house price declines seen in past New Zealand recessions.

"Beyond 2020 we expect ultra-low interest rates and a recovering economy to slowly return house prices to their pre-Covid-19 trajectory, so we are forecasting house price inflation of 8% in 2021 and 12% 2022."

GDP to fall 14%

In terms of the economy at large, the Westpac economists' preliminary estimate is that New Zealand GDP will decline by 1% in the March quarter and 14% in the June quarter.

"As the lockdown is lifted there will be a large jump in economic activity as businesses reopen and as some catchup activity occurs (for example, haircuts and doctors’ visits will have been delayed). We are forecasting a 9.9% lift in GDP for Q3. Stats NZ may have trouble measuring these gyrations in activity, especially given the restrictions on their own staff, so even if the true swings in GDP are huge the reported numbers may be smaller.

"We estimate that annual GDP in 2020 will be 5.6% lower than 2019."

The economists say the impact on employment will be more moderate than the reduction in GDP.

"Most firms will hold onto their workers through the lockdown, although in industries where working arrangements are often more casual, such as hospitality, there could be more layoffs. However, the Government’s enormous wage subsidy scheme will limit the job losses.

207,000 jobs to be lost

"Overall, we estimate that around 207,000 jobs will be lost, equating to 7% of the workforce. This would push the unemployment rate to 9% (not all of the affected workers will become unemployed, some will exit the labour force altogether)."

The economists believe the recovery from this recession will be much faster than previous recessions, "because the impediment to economic activity is temporary."

"This will mean a more rapid decline in unemployment and rise in GDP than, for example, after the GFC. However, a full recovery in the economy will take years. Many firms will fold during the disrupted period, and it will take time for new entrepreneurs to take their place. Other firms will be saddled with debt, making it harder to expand. Consumers will also be cautious for some time, and will take time to recover from the shock of asset prices falling like they have."

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

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132 Comments

12
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Let the abuse begin

20
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7%. yeah right. Not even worth acknowledging such garbage from these morons.

Indeed, the slowdown is no surprise.......

But the speed of the recovery will surprise many here.

TTP

Grant Robertson's o/d limit may suggest otherwise. Given it's mostly to just help people keep their heads above water rather than pumping property prices. And once it's paid off, how conservatively will people be running their household budgets going forwards?

That relies entirely on the worlds ability to actually get the virus under control. New Zealand looks like we might have acted quickly and decisively enough to give us a good chance at effectively eradicating it locally, thus we may see a rebound to our domestic economy.

The vast majority of countries have acted too slowly or too indecisively ensuring the virus gets out of control, and it may take many months to get back to normal. So the global economy (and most pressing for us) sectors like toursim, are going to take a long time to return to previous levels.

We may get a rebound, but it won't be back to normal levels for a lot longer than many think.

15
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I would have thought that tourism will be limited to internal domestic tourism until such time as the NZ population has been vaccinated. That is not likely until spring 2021.

Re NZ: Describe to me the possible future scenario where lockdown is lifted, and after that, how cases are controlled in NZ short of mandatory vaccines.

If we have no people entering the country (that aren't quarantined), and the lock down works as intended, we may have effectively identified and isolated the cases locally.

I don't believe this is anything close to a sure thing, but by acting clearly and decisively we have given ourselves a decent shot at doing it.

Keep in mind it never spread as far as it did in most countries that went into lockdown.

We have a better shot than most
And everyday in lockdown we save a life on the roads

Road deaths are the price we pay for freedom.

TTP, First thing first.......let situation becomes normal with everything under control (seems distant future for now) before thinking about recovery as many will have to survive this downturn to be in a position of thinking about recovery.

What damages will be done before the recovery only time will tell.

For the record, as a reminder, here is a comment from 2 March 2020 (28 days ago), - remember property is a long term investment. Here's a thought - is TothePoint Tony Alexander?

From TothePoint:

"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."

by rastus | 30th Mar 20, 2:11pm
"7%. yeah right. Not even worth acknowledging such garbage from these morons"

Trying to prove me right about the abuse?

Hi Yvil, Let the truth begin........

Counter strong RE lobby that will on play to prove otherwise.

10
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What is it about their predictions and the number '7' - perhaps Westpac economists are fans of Cristiano Ronaldo (CR7)?

24
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When people are asked to pick a random number between 1-10, the number 7 is picked far more often than any other.
https://i.redd.it/w4gz0wzz1i821.png

I see 0 is selected as an option when asked for 1-10. Perhaps this is how banks operate?

17
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"we are forecasting house price inflation of 8% in 2021 and 12% 2022".

Brave new world. Same old inter generational issues in society.

17
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3 crows fly south, the lamb sh*ts at dawn, a red sky, scrotum rash. Signs are positive for the Wespac economists.

I thought they just went to the Buffalo Lodge and asked the Grand Poobah?

Any idea how much bank economists get paid? Think they've lost any workers yet? Think they've taken pay cuts yet?

Shouldn't take many smarts to look into a crystal ball and make some numbers up. One wonders what their standard deviations are on the figures they come up with given the variable nature of the inputs required for forecasting the next 12-24 month (unemployment anywhere between 5-30%...)

16
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They are assuming workers and businesses will return to BAU after the lockdown is lifted, like it's Christmas shutdown or Easter weekend.

They've glossed over the fact that international tourist arrivals will still be virtually zero for as long as the world sorts this shit out or comes up with a cure. Until we find a substitute for this $6b sector and the 14% workforce it hires, I fail to see a bright future.

Exactly. I dont' think economists are able to model the cascading impact of the virus lockdown inevitably spreading across most of the globe. Unless countries contain the initial spread it seems a full lockdown is the only option. The cumulative impact of this will create a feedback loop.

Tourism is unlikely to exist for 6+ months (probably more like 12). The immigration our economy has relied on to "boost" gdp won't be coming back while unemployment is up at around 10%.

I'd be more confident if so much of our economy wasn't built on unsustainable debt and "boosting" gdp by just increasing immigration.

Exactly.
Two major planks of the NZ economy - high immigration and rising house prices - have disintegrated.

Not forgetting tourism and hospo. Four planks.

And retail...

We're rapidly approaching Max Planck

They also haven't factored that any multinational companies that are struggling, and looking to cut costs, are likely to chop the operations in far flung, small economies with a weaker currency.

Of course it may go the other way, and they may shift more work to places with lower operating costs. But I think there will be a swell of nationalism after this and companies will look after their own first ( they may not want too, but public opinion may force them too).

Not much.

26
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Yvil

People ubuse because credit creation by banks is linked to housing. When banks purchase securities then house prices must rise and immigration and consumption. Why are rates at zero? Is the "free" market in charge of deciding the price of currency? People with no assets with money saved earned by work will see their currency debased as we go down. So yeah im angry because if house prices don't keep rising the economy collapses. If the price of beer collapses does the entire economy? How is letting banks control the quantity and allocation of currency allowed? Is that a free market? Sounds like central planning to me so in reality you are a socialist and not a capitalist.

Agree with everything you say above, so what are you going to do?

- 1) Complain about it forever and keep being angry and not get ahead in life?
- 2) Use what you know, and take action to look after your family?
- 3) Not complain neither participate in the "scheme" but dedicate your life to truely and selflessly change the whole system?

Most people are in category 1), I'm in category 2), if you're in category 3), you are truly a better person than I am

- 2) Use what you know, and take action to look after your family?

Are you trying to suggest that the ruling elite can plan and direct asset bubbles forever? What are the smoke signals you use to identify and validate this?

I'm not assuming anything, what I wrote is what I meant, no more, no less

You're in number 2 yet you've been complaining about the lockdown quite vigorously...
Practice what you preach, old man.

You don't know how old I am, I could be younger than you

Can we do 50/50 for 1) and 2)?

Sure : )

I'm 2. Because I've seen the thick skin and mental fortitude it would take to be number 3. And as much as I'd like to be number 3, it would just crush me mentally, emotionally and spiritually.

4) Hedge against aforementioned system's demise, do simple honest community based work. Come to interest.co.nz for the sheer entertainment value.

Would be good to see a few more older voters actually acknowledging the unjustness of transferring wealth from savers young and aged to protect speculators. In the way they talk, in the way they vote etc. Where are the folk actually showing some moral and philosophical consistency over the matter?

What you're saying makes sense in the same was as in a corrupt country one might say "Hey, it is what it is, but are you going to suffer under it or are you going to exploit it?"...or in receiving stolen goods, "They were going to steal them anyway, I'd be silly not to take advantage of a great deal!"

RS, Interest is a business website, it's motto is "helping you make financial decisions" it's not an ethics and morality site

Correct money is more important than erhics and morals for some.

I disagree as can use information to make money and invest without compromising on ethics and morality.

Plenty here debate morality when it comes to giving money to beneficiaries.

They just forget who the biggest beneficiaries of the last decade have been.

12
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Yvil

I'm number 2 i just wanted you to admit the system is rigged. I dont mock people like you however,sometimes imisunderstand your comments as if its a proper free market. Unfortunately making people wake up is impossible with corrupt media.

However since most young people are easily manipulated i seek comfort in learning to get ahead. I'm a 6th generation anglo kiwi who now has zero loyalty to nz or its people. UBI is on the way and full digital currency. I would advise people to become self sufficient and learn practical skills. A global governance structure is on the way.

I believe this virus is a god send to the banking and financial sectors who will be bailed out by central banks. The central bank global takeover is near and as long as we have kanoa lloyd telling us how racist we are nobody will see it coming.

That's a very confused comment, rigged system, misunderstanding my comments, corrupt media, 6th generation anglo kiwi, UBI, digital currency, self sufficiency, kana Lloyd, kitchen sink...

Indeed, it's unfortunately based on wealth transfer from the savers and workers to the asset owners, not on a free market. Predatory and morally corrupt models, really.

17
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How much can we trust Westpac predictions? In the last 3 months, they said: up 7%, up 10%, zero, down 7%...

courtjester
Obviously you haven't heard that over the three months we have had unforeseeable Covid-19 and a level 4 lock down. A reassessment is quite valid.
Your comment appease your smugness and ego? It has no other purpose otherwise.

17
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They said +10% when it was already pretty clear covid 19 was going to do plenty of damage.
I have said for at least 5-6 weeks that prices will drop 5-10% in Auckland. In some places it will be 20% or more.
Given their poor track record they would be better to talk of general price directions, with caveats attached.

14
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Printer8 with the personal attacks again... Should I even respond?
Unforeseeable lockdown? At that point China's already been in a lockdown for weeks. Yet the whole world pretended that it's just a mild flu... including our so called expert economists.

CJ
Not a problem - you were calling bubble burst late last year when they were calling 7%. Prior to convid-19 they were right.

Their predictions were for the end of 2020. My latest prediction was -7% HPI in Auckland at the end of 2020.
Who do you think will be right?

CourtJester, there have been some events in the last 3 months, that no one could foresee that have changed things… rather dramatically, which legitimately warrant updating a forecast

So you think their call of a rise of 10% only 4-5 weeks ago was a good one?

I think that closing the borders and forcing everyone into a lockdown is a darn good reason to review projections

Fair comment, however I suspect you might agree that their 10% forecast was a poor one, even if it was pre-lockdown. It was pretty clear by then our economy would be whacked, if not whacked as much as what looks likely now with lockdown.

See my response to printer8 above.

Hi CourtRooster,

Like all economic forecasters, Westpac's forecasts are based on the best information available at the time the forecasting is carried out.

I thought you would have known that.......

TTP

Olly onion

Hi TTPee,

The purpose of forecasts is to give an idea of what's going to happen in the future. If this idea changes from very bullish to very bearish, and then back again a few weeks later, the forecast is absolutely pointless.

I thought you would have the intelligence to realise that.........

CourtJester

No CJ
You show your lack of understanding of what economic forecasting is all about.
It has never been considered an exact science nor one not prone to changing parameters.
If your's is the level of comment on this site it undermines its reputation and integrity.

A personal attack AGAIN. What did I ever do to you? Do I know you?
My original comment was a question about how much we can trust Westpac predictions. Despite responding to that question, you've been attacking me.
What does your comment do to the reputation and integrity of this site then?

There's no personal attack at all in P8's comment, unlike you calling me an "old man" above

"If your's is the level of comment on this site it undermines its reputation and integrity." vs "old man"
Sure...

Hi CourtTurkey,

In the real world, the unforeseen can happy quickly/dramatically - such as the advent of COVID-19. And forecasts will change to mirror this.

No point you - or any other ignoramus - making out anything else.

Now, go wash your socks.

TTP

Insults again? That just means you can't come up with anything intelligent to say.

TTP and Printer8 like to do a double act where they mock and insult people who disagree with their predetermined narrative. Enjoy the show. Next thing they'll tell you your balls have dried up, or something equally valid.

So a $1,000,000 property portfolio will increase to $1,124,928 and so on....

I think you're missing a "0" for a portfolio

Any predictions at this point don't have any significant data behind them. We haven't been in lockdown for a week yet.

Westpac loves to put a positive spin on it.

17
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Hilarious. They are all over the show. The models don't work, they are guessing. If they were wise they would avoid % predictions.

Yes Fritz, it is hilarious and you are correct that everyone know be it expert or a layman that downturn is inevitable and house price will fall but by what percentage no one knows for sure - it could be 5% or 10% or 20% or more but one thing is for sure that it will fall and they - so called experts by putting a number are trying to calm the market just like someone saying that corona virus situation will be under control by mid april - Human Psychology.

Anyone with no deep pockets should wait for now, be it stock market or house as we are witnessing what no one has seen before in this lifetime (Unlike any other down turn / recession).

I can lay my hands on some chicken entrails, and can't be that hard to make a ouija board.. can I call myself an econo-missed if I do?

I've seen Contagion 3 times. Can I call myself an epidemiologist like Rewi W does?

Agreed ,way to early to make predictions ,i think the dust needs to settle a little ;however, at this point im not feeling positive.

Nostradamus was right ...

Did we allow foreign buyers to come and purchase in 2008 while our dollar was weak I think so???
Last time I checked the world did not shutdown for 2008 GFC.
Ask most Kiwis what happened in 2008 and they will say it was a normal year.
I am picking at least 14 percent drop to start as banks have an interest in keeping market stable and 7 percent is what most banks would be happy with.
14 percent will start to eat profits up.
Did Westpac ask any people on the street how they feel about next 12 months or are they using GFC modeling because the is not a GFC event.

One thing we can ALL agree on, house prices are not going to go up this year. And, no one can predict housing market for 2021, I don't care who they are. My guess is only to say the fall in NZ will definitely be at least 5%, a very safe prediction.

Clearly Westpac thinks no one's been watching what's going on. I'll make a news story headline prediction
" Price falls in the property market means banks are now insolvent"

I think this article was supposed to be published on Wednesday.....

As the Westpac economists point out, New Zealand’s housing market "is currently frozen amid the lockdown"

Ah, that's why you are showing a cover image of a house half-buried in the snow, but that is actually quite a freeze, and will take some time to thaw out?

I initially thought it was because global warming had stopped.

Beautiful photo, makes me miss the Swiss alps

Man wish I had visited while i had the chance..

Zermatt is my favourite

12
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Westpac, a bank that has seen a 35 percent fall in its market cap just this month alone , has absolutely no way of adequately understanding or measuring its own market cap at present, will in all likelihood drop its dividend, shutter and never reopen multiple branches , be downgraded by dutiful ratings agencies , suggests New Zealand house prices should not only rebound but reach new highs by late 2021. That's a keeper.

Westpac, a bank that has seen a 35 percent fall in its market cap just this month alone

Actually, Westpac share price down approx 60% from peak to now. ANZ doing a little better but heading towards 60% too.

These banks are the drivers of the great Antipodean wealth miracle. You would think the investing world would have more faith in them.

What a ridiculous prediction to make, are WP trying to beat off some other bank making the same ridiculous prediction. Please wait a week or two , let the dust settle, here and overseas, and then give us some real, rather than hypothetical rubbish to read. We aren't that desperate for reading material yet!
Here's some humour from nine years ago, worth watching again, and again
https://www.youtube.com/watch?v=j2AvU2cfXRk

Thats a classic video

And incredibly, more relevant today than it was back then

Good video.

My prediction is that Westpac will make a "-10% by the end of the year" prediction next month.

My prediction is that Westpac will make a "-10% by the end of the year" prediction next month

I've seen forecasts from non-bank economists of up to 60% for Aussie houses. Even AMP's Shane Oliver is pointing at 20% as his ballpark. The founder of Corelogic (Rismark) is saying anywhere from -40% to +25%!

That would make houses ridiculously cheap, unless interest rates spike up.

Gee no way they dont like to use double figures mate. The shits going to hit the fan when we get the actual unemployment figures that are currently being hidden. At that point when it turns out to be 25% the house prices will fall off the cliff.

10
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With 20% of home owners in Queenstown relying on AirBnB to pay their mortgages and hundreds of new houses and apartments under construction I would say that place is in for a rough time.

But its always been a boom-bust town similar to the Gold Coast.

Yes there's going to be a lot of air b&b coming onto the domestic rental market even in Auckland. I personally know 2 people switching theirs to the private rental market now.

Yes and once they do they wont be quick to go back to it, slow and steady will seem like a better idea... then when the boarders open and tourists look how much an air BnB will cost them and there are only 20 very high priced ones to choose from, maybe that very expensive 24 hour flight plus very expensive air BnB accom....

hmmmm maybe spain for a week seems like a better idea.

If they are switching to regular unfurnished rentals, might be a good time to start looking for a few new things for the lounge.. old couch is about due for replacement.

Now I see why you chose that name...;-)

I guess the number of 7% came from the NZ total Median price trendline. The bottom line will be at around 600.000.

If landlords struggle to maintain positive rental yields I'd suggest house prices will decline more than 7%.

Mass unemployment has always been cited as a catalyst for decline. Chinese owners may also start selling NZ property in mass to free up capital.

Air B&B properties coming onto the market is also a catalyst for price declines. Landlords wanting to list after being burned by tenants unable to make rent is a concern.

I rent so price declines could be advantageous for me, though before I start rubbing my hands together .. I'd like to see the state of the economy both domestic and international.

Surely our terrorism and international education industries have/will take a mortal wound .. freeing up yet more properties.

TPP may be right that a recovery may happen quicker than we expect .. and we may look in amazement at how this mortal wound has healed.

At the moment everything is guess work. I don't think we'll have a clear picture till the end of the year.

Listings will happen, as savvy, yet perhaps overleveraged owners will list soon .. hoping to find a greater fool to save them from themselves.

"our terrorism and international education" - Freudian slip there...Tourism, maybe.

Oh just auto-correct doing its thing. I really could benefit from more proofreading.

That's a beaut auto-correct, leave it as it is. lol

I think tourism (as has been pushed in NZ - high volume, low value) could well be regarded as economic terrorism. Sadly I fear when this is all over we'll go back to a tourism, export(rort?) education, migration and housing inflation fueled ponzi economy - I hope otherwise but vested interests must be delivered to.

18 April significant date for NZ economy re China.

If the vested interest agencies and experts are forced to forcast price fall of 7% - rest assured that going forward in best scenario price will be 10% to 20% below CV - like it was between November 2018 to August 2019 period (some will still go at CV or near around).

Worst case scenario as we are in and entering unchartered territory will be a fall between 15% to 35% depending how long the current situation last and how bad it gets going future.

Best case scenario is, if corona virus is bought under control (not stopped but if have found a solution and are able to contain it) by mid April to end April and worst case scenario if the current situation extends till next month - May.

All FHB who have been actively looking for house earlier and if had seen any open house should expect a call or email from RE Agent to put in a conditional offer and take advantage of lockdown (Creating fear of FOMO in buyers) as RE Agents are fully aware that whatever little chance they have of selling at vendors expectation or near around CV (as was high earlier) will be now or as soon as lock down is over by creating FOMO as going forward every knows market will be down for sometime to come.

Buyers specially FHB should be beware and be patience to take advantage of the opportunity in future if their personal situation has not changed.

A pretty frank assessment from Bagrie here:

https://www.stuff.co.nz/business/120678367/govt-needs-a-plan-to-get-its-...

There's no way of putting it than there are likely to be some difficult decisions to be made and not everyone is going to be happy with them.

He doesn't address a key thing, which is the need for more tax revenue.
Also, I don't *get* the obsession with infrastructure projects. They take a long time to get momentum. Things like building much more housing and better hospitals have less lead time and have more direct impacts on peoples' lives.

All hands to the pump, keep inflating!! Bank Economists- the definition of conflicted....

Remember that GDP decline and all is just estimate which will change as time progresses as no one means No One knows and all are guessing as have to run the show.

Richard what is your view on what will happen with Chinese buyers?

The economists believe the recovery from this recession will be much faster than previous recessions, "because the impediment to economic activity is temporary."

V shaped recovery?

https://youtu.be/jL2DH-nKBeA?t=3

yeah the impediment is temporary but the damage will be long lasting. Businesses will disappear and never return. And our debt is soaring and will need to be addressed.
After a little spending spree or two, consumers will be cautious.

Heard a story about a business where they told their staff, to start looking for jobs after the lockdown. The business owners are closing the business.

I imagine many retail businesses where there are fixed costs, and revenues don't return fully, then the owners are going to have a cashflow drain with little visibility when the business will become cashflow positive. Better to conserve the cash and shut the business down than to continue with an unknown period of cash drain.

Some examples I can think of:
1) travel agent with a retail store,
2) souvenir store in Queenstown
3) restaurants in Queenstown

Hi CN, First let the economist predict when the corona virus situation will be under control world over before predcting recovery.

No one can predict anything - economist included unless and until current crisis is solved. So........may be economist trying to give some sort of comfort by being positive- human psychology.

"So........may be economist trying to give some sort of comfort by being positive- human psychology."

Fair enough. Provide some hope for the general population, and prevent widespread panic. But should that be the job of an economist? Is that what people want from an economist? Don't know the answer to that.

"No one can predict anything - economist included unless and until current crisis is solved."

I understand that economists in their jobs need to provide specific forecasts. However people can make their own long term general predictions.
For example,
1) will the coronavirus get contained - very likely.
2) When? - no idea - this is unpredictable.

Agree that pandemic will be contained sometime in future but...

Same website and one experts forecast that house price will fall by only 7 %

And another experts saying nothing will be normal for next 3 to 4 years as below :

https://www.interest.co.nz/business/104322/bnzs-head-research-stephen-to...

Conclusion = No one knows what future holds and everyone is coming up with their own theory as have to though may no idea as have to justify of being an expert.

Do 10 different prediction and hopefully one will fit and can claim fame for the same.

Once you can refix at say, 2.5% - hold on for dear life and don't let go.

What's 7% drop? We've had more than 200% capital gains in the last few years tax free! I would buy more houses any day!

CWBW, few can still buy but many may not be able to, even if they wish to in the aftermath of Corona Virus.

Many still do not understand the seriousness of the situation- world has come to a standstill and no one knows what future holds but still thinking that will get up one day and everything will be over.

Being positive is good but not stupid eg. Donald Trump saying that everything will be back to normal by Easter - you decide is it being positive or stupid.

Flip-flop, as part of cartel being forced to provide the holiday loan payment. They have to say so, as being paid by their employers. What is still unsure as the wave of taking turn of worldwide lock-down, vaccines are still at best another 2 years, major disruptions on the share markets, sudden downturn of massive unemployment worldwide, those that still trying to pay for their mortgages, worked in Airline industries, hotel/tourism/hospitality industries, Now here's my analogy - those worldwide bailout are using a phantom numbers, borrowed from each others. Imagine Noah's Ark leaking, some part of the boat sinking for sure, but just being plug-in in a hurry using.. phantom plasters, the flock just have to rely from comfort words of Messiah, just have to rely on faith for now. Scary eh? - or flying inside one of those Boeing 737max after all officials assurances that it is safe to fly on it, it's a brand new for a goodness sake, 2021 NZ housing? whoosh..↑ and away? here's a flaw on that theory.. bring it to 'pre-Covid-19' forecast means? nothing happened in 2020 to the whole world economy... let's just write off the 2020, it's just a bad dream.. really. Tui ads, Yea Right.

This link, is just side by side article.. amusing to digest;
https://www.interest.co.nz/business/104322/bnzs-head-research-stephen-to...

What a waste of time anyone making predictions of what percentage house prices will drop!
Are we talking these drops by 7% all over NZ or Auckland or in average?
Some areas will take a hit, others will hold up just fine.
The major is going to be the people relying on KiwiSaver for their deposit, as their balances will have been decimated and buying will be put on hold for a year or two.
Everyone has been affected to differing levels, as long as we come out the other side is all that matters
What worries me is what this virus from China has done to the worlds economy.
Doesn’t bear thinking about what terrorists could do!

This time it will not be that some areas are going to take hit and some will hold up but All areas will take a hit and only the percentage of fall may differ.

One thing will be common that in current situation when world is falling apart - housing market cannot be immune and may witness a meaningfull fall.

Many experts and agencies with vested interest when they say that fall in house price will not be much and short live are being like President of USA who said that everything will be back to normal by easter - in reality it is the begining......

Gave same analogy eaier also as best suits in current situation to describe the difference being positive or stupid...

Time to pause and take all precaution to protect Finance / Investments of what will be left after the carnage and be safe. Stay Indoor.

They have not been decimated The Boy. I have a modest sized Kiwisaver account with Milford Management. It is an agressive account and it has lost less than 5%. You always exaggerate when you push your particular barrow. Residential real estate in New Zealand is going to drop in value. It is just a matter of how much. No one is going to escape the current situation scot free. And then there will be an increase in direct and indirect taxes to help the recovery which is going to be massive. I heard from my brother in law in Auckland this morning that a practice has laid off a doctor as even they are noticing a reduced income. Now that is saying something.

BNZ and some other banking institutions have forecasted at least 4-5 years before things will be back to normal, so 7% drop may be on the lighter side. Besides, no one can predict where this virus is heading next, it could take few boomers on its way out and that's another factor.

Prices will zoom!...all houses have been upgraded to built in prisons...as good as adding a deck or new kitchen!...sorry i was channeling being a real estate agent...shudder.

I saw a great quote the other day:

Economists have successfully predicted 9 out of the last 2 recessions!