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Record house prices were supported by strong sales volumes in August, the latest Real Estate Institute of New Zealand sales data shows

Record house prices were supported by strong sales volumes in August, the latest Real Estate Institute of New Zealand sales data shows

Record median house prices were achieved in eight regions including Auckland in August, according to the latest sales figures from the Real Estate Institute of New Zealand.

They were Northland, Auckland, Waikato, Manawatu/Whanganui, Taranaki, Canterbury, Otago and Southland.

However the national median price fell just short of setting a new record, rising for the third consecutive month to $675,000, just below the record of $680,000 set in April (see the interactive chart below for the full regional median prices and trends).

The REINZ's House Price Index, which adjusts for differences in the mix of properties sold each month and is considered a more reliable indicator of house price movements than medians, hit a record high in August, suggesting house prices overall have increased by 10% over the last 12 months.

Sales volumes were also strong, with 7652 residential properties sold throughout the country in August, up 24.8% compared to August last year and the highest volume of sales in the month of August for five years.

Sales were particularly buoyant in the country's largest housing market, with 2612 properties selling in Auckland in August, up 44% on August last year.

In the rest of New Zealand excluding Auckland, 4320 properties were sold, up 17% on August last year (see the second interactive chart below for the full regional sales volume trends).

"The housing market's recovery post-lockdown over the last few months has been astonishing and has certainly surpassed many predictions," REINZ Chief Executive Bindi Norwell said.

"Overall, there were 1520 more residential properties sold this August than last August, which equates to an additional 49 properties sold a day which is pretty incredible," she said.

The comment stream on this story is now closed.

Median price - REINZ

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NZ total
Source: REINZ
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Northland
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Auckland
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Waikato
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Bay of Plenty
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Gisborne
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Hawke's Bay
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Manawatu
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Taranaki
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Wellington
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Tasman
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Nelson
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Marlborough
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West Coast
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Canterbury
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Otago
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Southland
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Volumes sold - REINZ

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Northland
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Auckland
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Waikato
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Bay of Plenty
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Gisborne
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Hawke's Bay
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Manawatu
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Taranaki
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Wellington
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Tasman
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Nelson
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Marlborough
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West Coast
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Canterbury
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Otago
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Southland
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264 Comments

11
up

Ha, yeah na, all good
Swt as bro
Sorted

Auckland HPI reached an all time high of 3121.

Dude, you're contradicting the Mikes

HH
Auckland up 10.7% YOY, national 10%.

Yeah, pretty crazy.

I am richer (on paper) than I have ever been thanks to this pandemic and I will likely be even richer soon because my rentals are more than overdue an increase and with the house prices increasing so much most prospective FHB's will find themselves pushed out of the market, so there will be much more competition for rentals. This government is doing a great job under the circumstances.

19
up

No attack on you personally here. I live in Sydney and was looking at rentals in Auckland just out of curiousity. One thing that jumps out at me is how many of them are absolute pieces of shit. There is a huge gulf in standard when comparing the two cities like for like.

Good on the landlords that have modernised the internals, but for a lot of them, both externally and internally, its as though someone pressed the pause button in the 1970/80s.

Admittedly, some are not really the best but judging by the queues at the door when we advertise a vacant property they can't be all that bad.

Why would you think that a queue of people who haven't seen inside the property yet (and in a market where rentals are scarce) is any indication of what the property is like?

Shelter is a basic need. Like food.

Apex Andy, you're not Andrew King from NZ Property Investors Federation are you?

Yep , i lived in Oz for 20 years in most states ,came back in Nov19 ,now moving back to NSW in late Sep,comparing rent ,wages ,living costs and even buying property ,NZ makes no sense to me or those starting out ,NZ is a beautiful place ;but,if your income is decimated by high living costs you cant really enjoy yourself the way i did and most Kiwis in Oz.
Its a common remark kiwis make ,in NZ i lived from hand to mouth ,in Oz i lived a much better life and saved a lot more money.

I can relate 100%. Went overseas for 10 years. Came back to NZ and lasted 2 years. Im saving about 5x as much here as I was in NZ.

I concur. After returning from Oz to NZ some years ago am now plotting permanent return to Australia within next few years. Just too expensive to live in NZ.

Why do you need to increase rents - did you not budget properly for this year? What are your cost increases that need to be offset by your tenants?

Many sales have undisclosed sale prices these days, very likely due to lower than expected values. No wonder the HPI goes higher if just those with higher prices are taken into account.

I am not aware of sales data being held back from REINZ - do you have evidence?

Apart from the results from REINZ from this month which do not match what's really happening in the market, you may check by yourself all recent sales displayed on various websites, while in previous months numbers were made available right away many now are just shown as "sold".

11
up

Just to clarify and to stop some jumping to wrong conclusions - the image represents house prices taking off and not the much claimed bubble burst expected by many.

Thanks P8, there's a lot of clarification needed :)

9/11

it is pretty easy to get sizeable loans.

a bank agent just pre approved a big one for me over the phone while he is on annual leave.

That's terrific, what would you rather - freehold 100acres in Northland or freehold 1/4 acre near Akld or apartment in cbd
Its great to have options

Because of the boom, chances are value in mortgagee sale is higher than value of the loan. Simple!

With all due respect, Chairman Motor Moa, not so many months ago your were denouncing a real estate "boom" as being impossible this year........

You were telling us, emphatically, that the housing market was going to plunge following lockdown.

Would you kindly explain how you missed the mark so badly. (I assume you're a proponent of accountability.)

Thank you.

TTP

10
up

I'll explain for him: Welfare.

Have a fine day, Tim.

Nice pun.

Time To Pee.
I am explaining the possibility for them throwing money away at borrowers.. Never stated it's booming!
Should pay your fine yo!

Ironically we wouldn't be in this mess if we could build that kind of housing!

#OkletsSavethebears

10
up

Profoundly unpopular opinion for this site's readership - most people are happy that their net wealth is increasing and in times like this the wealth effect is good for the economy. And with interest rates so low, the interest.co.nz affordability report shows lower-quartile houses are affordable for a first home buyer couple.

The DGMs have been so wrong for so long that they really should be ignored. The housing market is not going to collapse or stagnate, and the answer lies in building more houses, not tax.

19
up

The Answer lies in many things - building more houses AND tax being but two.
But the biggest issue we have to address is - expectation.
The expectation that as individuals and as a Nation that we can 'get rich!' but not actually work to do it.
It's not a choice that most people have - it's a necessity. There is very little opportunity for New Zealanders to 'get ahead' without speculating on property prices because - we don't have viable alternative work for them to do to allow their 'day job' to provide a future for them.
So ever-rising property prices does two thing - (1) validates the proposition that property speculation is THE way to get ahead and (2) make the economic, work and social landscape even worse.
Something HAS to change, and at least we will have 3 years after this election to give us a run at it.

There's also the opportunity to speculate on the sharemarket, starting with as little as $1 according to the TV ads.

People have to invest in something, in order to provide an income for when they retire. They cannot work until the day they drop dead, no matter the availability of work. Retiring at 65 when the average life expectancy is 85 means that those 20 years have to funded somehow. Unless you think that taxpayers should pay for everyone forever? Then taxes will have to go up as the population increases - especially with our huge immigration rate, it won't be long before all those immigrants we've imported will be drawing a pension as well.

People have to invest in something because one generation decided to be frivolous and not save enough for their retirement so they expect the succeeding generations to pay for it through lower wages, user pays tertiary education and house price inflation. Domino effect.

11
up

most people are happy that their net wealth is increasing and in times like this the wealth effect is good for the economy

This is exactly what the ruling elite wants. The more people that get out there and spend up on whatever (spa pools, holidays in QT, new cars), the better it will be for the economy.

It’s not helping the economy at all when money all goes to elite. How much percent of top earners we have in our country? Probably 5%-10%, are you expecting that these 5%-10% people to carry the whole economy while everyone else is getting poorer and poorer? That’s why wealth inequality creates so many issues for the economy and we need to keep stimulating it with low interest to keep it running. It’s not a good thing trust me, it’s just not showing yet. But what can we do now? New Zealand’s economy is already tied with its housing market. Lets just hope Governments and RBNZ have ways to keep it stimulated. Cause if we dont, it will be GFC and Japan economy crisis all over again.

Is this a big enough sample for you now JC?

Is this a big enough sample for you now JC?

For sure. Be good to see the medians alongside the average to understand the skew. Also, will be good to see the extent to which people start spending. If they don't, you might see house price trends moving in the opposite direction.

15
up

"most people are happy that their net wealth is increasing" - Most people? Are you sure about that? Or did you mean "most people in my circle of friends who all own their own houses and some own multiple rentals"?

Welcome to your new circle of friends, my friend.
You can now have a more positive future, ask away for free advice
Strongly recommend rich ppl advice over poor ppl advice, i.e Yvil vs ....... the other 80%

Hahahahaha nice one there mate. That advice being: buy 10 years ago?

Your cynicism and scepticism is keeping you in poverty
I recommend you preach to your kids to keep it in a healthy check
Education rules dude

23
up

So many assumptions, but what did I expect from an arrogant troll...
1. I'm not poor.
2. I don't have kids.
3. I have an MSc.

Was only assuming you had kids and was a bit a of a loser
But didn’t have a lot to go on to be fair
Besides a random degree, am still struggling
Feel free to fill me in....

One of the good tips in making successful investments is "Don't make assumptions"..

Yes, I believe thats correct Mao regarding investments.
As far as tenants, ppl, partners and humans in general I've been pretty successful sticking to my assumptions...
Best of luck to ya...:)

15
up

Are we in the stuff comments? Why the childish personal insults?

Yep, saw the mods getting onto Dumb and Brokes comments thank goodness
I think their $110pa is extraordinarily great value

15
up

You are the worst of the trolls at present - clearly intent on antagonizing and slinging personal insults at others. I am surprised that it is being allowed to continue.

Sounds a bit like Houseworks reborn...

Quite right, sans any enlightenment. Interesting that his calling another commenter a 'loser' and general love of abusive personal insults, is being given fairly free reign currently.

@MM. Personally, I prefer to socialise with old money types as the conversations are more worldly and considered as they don't seem to have the desperation to impress like you as they weren't born with deep seated insecurity. Their taste and language is more refined. You new money types just talk about your houses constantly, which I find quite dreary and vulgar, ... like your communication style.

Tend to agree with you here old chap :)

But can't help yourself.

I understand what you mean. Reading closely though, the op mentions it is people already with wealth. Most people with wealth are happy to see their assets increase in value. A pretty basic premise. Your point, that greed overrules empathy, won't ever be understood by the laughing minions. It falls lightly on them.

You may ignore reality as much as you want. That doesn't make you more right, just the opposite.

First of all, this being a report of the housing lobby, I would take it with quite a few pinches of salt. It is not taking into account those unreported sale prices which are quite common these days.

Secondly, it is all about unemployment and income, all bullish commentators on this site ignore this as if the economic context would not exist, which is completely absurd. I can only imagine they might be blind by the desire of higher returns, i.e. greed.

And lastly, this can never be good news, higher prices on a first necessity asset, even if they were for real, means more social and health issues. Any government with a minimum concern about their population should do something about this.

73
up

How tragic.
So my net worth has just gone up a couple of hundred grand for producing - absolutely nothing.
And if I sell-up, the next buyers will have to borrow even more than they did last month or plough even more of their disposable income into servicing their debt - as long as financing costs stay at historical lows.
And we celebrate this?
Again - tragic.

37
up

Agreed. I find this profoundly depressing, and we own our home so nominally benefit. Sorry future NZers.

It's the new Muldoonism. Run up debt massively off the back of productive folk to coddle and socially support a favourite sector.

I think that it’s a bit early to judge. We had nine years of neglect under National. Jacinda has only had three years to turn the ship around. I’m sure she has a plan, she just needs more time.

She's halfway through her time. Better get a move on

The new Muldoon seems to be a combination of Adrian Orr and Ardern / Robertson.

15
up

Three years and what do we have? Record levels of immigration. Record house prices. Record numbers of people on public housing waiting lists. Rising unemployment (even pre-Covid). Labour have managed to out-National the National party. If you are waiting for some kind of turnaround plan please dont hold your breath, or you will die from asphyxiation.

I can’t argue with those facts but I choose to focus on the positives that our current leadership brings to our fine country. I really miss the 1pm briefing. It was the highlight of my day.

Don't forget prices for fresh fruit and vegetables rising 19% in one year...

It will likely cause younger New Zealanders to pack up and leave once the covid crisis is over. Normal behaviour because of the high cost of living and the limited job opportunities here. Who wants to live at home with their parents until they are 30. Will be interesting to see some stats on how many younger returning Kiwi’s and older returning kiwi’s with families have jobs sorted. Are they winging it and relying on savings to see them through?

Let them leave and bring on more migrants from Asia!! Money money money~

Way to stoke nationalism and racism.

11
up

How so? That's exactly what our politicians have been doing for the past 2 decades?

Telling young NZers to piss off and be replaced by people from elsewhere won't encourage growth of nationalist response?

I think Double-GZ was being facetious.

Sorry, I misread your original comment. I actually agree that cheap imported labour has had a very detrimental effect on the next generation.

Wait, what? Who let DGZ out. He has been MIA for many months. Ever since his mum found out he was posting on here and spanked his bum. (I know it is weird).

16
up

We export highly qualified New Zealanders to countries overseas who pay higher wages and have lower taxes, while we replace them with low-skilled workers on low wages from the third world. Over time NZ falls further and further behind the developed countries that keep their talent at home and that achieve economic growth from productivity increases rather than increasing numbers of migrant labourers.

We have shitty wages.

However, who in the OECD has lower taxes? Australia. Nope. Canada. Nope. US. Nope. UK. Nope. Unless you head to Singapore or UAE, we have pretty low income taxes & zero wealth tax.

Agreed, I have recently finished a PhD in Machine Learning and since the cost of living in NZ is so high and wages so low compared to other first world countries, I will be moving overseas Jan 2021. I predict that it will take me so long to buy a house in NZ with rent being so high and houses increasing in price faster than I can save a deposit. The quality of life in NZ from a financial POV is very low I believe compared to elsewhere. But who knows what the future will bring.

Brisbane looks amazing value compared to Auckland.

Here goes $1.390 mil, this or a 2 leaky bedder in GreyLynn
https://www.realestate.com.au/property/24-queens-rd-clayfield-qld-4011

Nice.
Howz the economy going there at the mo Moa?

QLD we don't have any hard restriction except going across into NSW. Covid cases are low so finger crossed!
Still got my job, busy as ever. Getting hotter now.. going to the beach tomorrow!

Grey Lynn - where you have a decent 7 dollar coffee but when you come out you smell the urine, walk passed the homeless person in the storeway ... get a ticket for incorrect street parking, spend summer getting blinded eyes by the concrete glare. Close to car yards, and so close to K'Rd. It is close to the city mission, can walk there. Oh, and closer to entertainment - oh, but those are closed down because of covid. ... 1.3 million dollars? After paying that I might have enough for a coffee in a small cup at a nearby place. Or, on the other hand, I can get a simple job down the line, maybe South Island, contribute to kiwisaver, buy a beautiful big house, and still have 600k left over for travel - and if that ever meant travel to Auckland I could spend up large. Grey Lynn, or a place where can buy a decent coffee for 4 dollars, and can buy any homeless person a meal and a clean set of clothes and not walk passed with my head turned away and ears not listening to the rattle of the coin in the styrofoam cup. Oh, and a place where I could clean my house and paths with the waterblaster, would be nice.

It's amazing isn't when you compare. Affordable and well built (not leaky). I hope the world get's back to some normality one day. Australia has always given young New Zealanders a bit of hope, we have been lucky to have such easy access. I always felt more valued there than here which is sad.

Yeah same. I only came back to NZ for strong family reasons (assisting care of my mother). I don’t regret doing that, but I do miss the better quality of life in Australia, and in particular the lower cost of living and higher salary.

It's wooden dollars till you have the cold hard cash in your hands or do something with your new make believe equity.

And therein lies the trap. The Wealth Effect IS NOT GOOD for OUR economy
Tapping that newfound equity (by accessing new/more debt) doesn't do much for New Zealand, by and large.
It does wonders for the TV makers in South Korea or the tourist guides in Jordan or the car makers in Germany. But not us.
We are getting more into debt as a Nation, just the fund the lifestyles of other peoples.
Yes, 'they' come here to look at Milford Sounds, but on balance - we pay out far more than we get in.

It's good for the cafes, resturants, supermarkets, retailers, and local FMCG niche producers of food products.

What good about it?
Getting New Zealanders ever more into debt to buy a coffee at the local cafe?
Providing employment opportunities to produce goods that can be exported etc is good.
Just 'encouraging' us to take on more debt isn't - no matter where we spend it - IF we don't increase our output.

What good about it?

It keeps the cafes open. It keeps the cottage industries afloat. Money keeps flowing.

Look, I believe that credit-driven bubbles are a fool's paradise. Nevertheless, at least for now, there are some benefits.

In that case, why even use housing as an intermediary stage. The Reserve Bank can just keep pushing QE straight into cafes and cottage industries.

At present it's just a less widely distributed form of social welfare.

In that case, why even use housing as an intermediary stage. The Reserve Bank can just keep pushing QE straight into cafes and cottage industries.

No. The central bankers setting up direct payments to firms, small business, and h'holds is further along the curve. They're hoping it won't come to that.

Yes because the banks won’t like the central bankers paying Funds directly to the people/businesses that need it. As one pundit said this week “Jamie Dimon will be marching in the streets demanding the Fed pay out through the banks”. Think of all that lost banking revenue!

Is it good for the people who work in those places though? No, because home ownership just got further out of reach, and rent just got more expensive.

Surely if people are having to take on more debt they won’t be spending it in local cafes and buying nice to have “things“. We’ll likely be seeing more belt tightening. It’s simply creating an ever growing debt spiral.

At least some of us get it. More money into mortgages means less discretionary spending

But thats the thing, its not more (weekly/monthly income) money into mortgages, its just buying a bigger mortgage with the same amount of weekly money. 12ish months ago when rates were 3.39%, a monthly payment of $3100 got you a $700k mortgage, now at 2.55% that same payment will 'buy' you a 780k mortgage. So you get the same house for the same weekly payment, you just sign a bit of paper with a bigger number on it.. at least until interest rates go up.. then you get taken to the cleaners.

Not is is not, this is a common neoliberal fallacy to make commoners participant of the same interests as the wealthy.

We are not more wealthy because your house may get more more expensive for an eventual sale.

This is not cash, you cannot use it to go to a restaurant or buy your groceries. Even if you sell your house unless you are planning to retire or die soon you will need to buy another house, pay attention... in the same market.

The only ones that benefit from the so called wealth effect are those that speculate with housing, yet they control the media and impose the narrative in their own interest.

We are getting more into debt as a Nation..yep lead by our government. Monkey see Monkey do

I think it’s more of a central bank initiative rather than from one political party. If you look around the world there are many different political parties in office but their central banks are all following the US Federal Reserve. The central bankers are calling all the shots now. That’s why the help being offered is debt debt and more debt. People with large debt levels have less control over their lives when their personal circumstances suddenly change for the worse.

and in the meantime It’s cold hard debt at ever increasing levels

BW - you can always give the buyer a discount on your property if it makes you feel less guilty.

Doesn't this how capitalism work?

Increase prices are linked to interest rates lowering, that's it. We'd already (more or less) reached the collective household limit the at the last round of rate drops pre-covid & They can't keep dropping rates forever..

Plus to your point, when they drop rates like they have post-covid, it doesn't really mean I put more of my income into housing, the interest portion just decreases, and then we push the total back up to compensate. These recent increase in price is just the cheap & recently created money finding its way back into the economy. As intended. Short/medium term boost to keep us afloat whilst we sort the Covid mess out.

At some point we will need to wait for productivity to catch up. Hopefully once rates stop decreasing, we kind of settle into a long period of price stagnation, in line with general growth, rather than any dramatic falls. But there are wider issues at play globally, much more significant than the drop in the global bucket that is our local housing market.

Global warming, the decreasing efficiency with which we secure our increasing energy needs etc.

Don't get me wrong.. I'm a landowner and also like you find the current system a mess. But what you going to do? Humanity must grow. Growth needs more debt.

Spot on -nicely summarised.

Yes, one of a handful of sensible comments amongst a sea of greed, blinded by easy gains at the cost of others. Like some other responses, own my house so of course massive property increases will be of financial benefit, but will also come with a heavy societal and moral cost in the future. But hey we are all getting rich so it's ok right? Very disturbing, but in line with the modern way of thinking I guess, money money money.

17
up

The government that got in with a mandate to fix housing is about to get elected again.

10
up

That was part of the previous government's mandate too. It's patently clear that neither party is at all serious about properly addressing the issue. They are full of hot air. And for me Ardern is worse than Key because you could kind of think that affordable housing for the masses coming from him might be fake, but Ardern? She's a phoney.

At least Labour managed to slow down the housing market for a few years, if they had let it crash then there would have been uproar from the older voting population.

It only slowed down in Auckland. Elsewhere it took off.

True Queenstown also slowed down, well for a bit. Just depends on who's doing the buying. :)

Prices took off
Meanwhile 12 month sales are down in Wellington and NZ excl Auckland

But they haven't slowed it down.

It has literally just exploded within their recent term.

We bought a place just after the 2017 election for $500k. The same house with no real changes to it would now sell for $900k and that's in under 3 years. Great for us, terrible for anyone who hasn't bought.

Labour policies have literally made what was a gap before now a huge gaping chasm. Homelessness has increased. The state housing waiting list has totally exploded. All over NZ in regional towns there is huge demand for a handful of private rentals. Thanks to recent Labour legislation rents have now skyrocketed.

The people Labour claimed to want to help the most now stand to lose the most. The punters who voted - hopefully for Labour voted in vain.

I just cannot understand how anyone who voted Labour and believed their claims can now be shocked by the outcome of all their failed policies and lies.

I can sense your negativity on this subject. I stand with RickStrauss on this. We can’t let the facts sway our conviction to trust in Jacinda.

Trust in Jacinda.

Now that's a slogan!!

Good luck with that mate.

I can see you're not letting facts get in your way. See my post only a few easily read posts above yours, on the New Muldoonism.

People looking for better returns than TD in bank. My worry, is there'll be an over supply of rentals very soon.

Have a look at the number of people trying to get into NZ...

The number *actually* getting in is capped at 350/day. The number who want to come in doesn't matter.

Have a look at the number of people trying to get into NZ...

Yes. People jumping off fishing boats and being picked up all along the coastline.

Another way to look at it is that people are worried that their money in the bank is losing its value.

Btw, if there's an over supply of rentals, wouldn't that be a good thing? Depends which side of the fence you're on I guess.

Yes, hedging against the threat of neg OCR. Yes, good for tenants.

Bugger
"there'll be an over supply of rentals very soon"
A 10% rise in house prices does not create a single additional house or rental. Builders do that.

Yes not immediately, but demand for that investment class will drive more builds, in turn will drive more supply, more rentals. If immigration is off the cards (C-19) for the for seeable future, we could have an over supply issue soon.

Hope so, advertised a property to rent on Tuesday afternoon and had 50 inquiries within 1 hour. Have 30 viewings coming through this weekend. Had to take the add down Wednesday but still have people messaging me who screen shot the add begging for a viewing. Several applicants have already said they would pay more than the asking rent and asked if there could be a bidding process for the property. It's crazy out there at the moment.

Heavy G
That is what I am hearing also.
I have previously posted that here in HB considerable shortage of rentals and offers of higher rents - however, "rent bidding" has been legislated against so be careful not to mention it.
This shortage seems to be the case in many other regions. Which region are you?

Note: The Residential Tenancies Amendment Bill was passed 5 August 2020 and I think just waiting Royal Assent. “Rental bidding” will be banned, meaning landlords will have to stick to the rental price offered in an advertisment.

Rental is in West Auckland.

Bidding ban comes in Feb 2021.

See phase 2: https://www.tenancy.govt.nz/law-changes/

Thanks, HeavyG
Having to legislate a ban on "rent bidding" says something about the recognition of demand for rentals - and it is nothing to do about desperation of landlords. :)

That is not wholly true. While Landlords cannot solicit higher rent offers from tenants, there is no law stopping tenants from offering to pay a higher rent and the landlord accepting that offer. In fact, the Act expresssly states that Landlords are free to accept higher offers from tenants!
22G(2) Residential Tenancies Amendment Act - "Subsection (1) does not prohibit a prospective tenant or other person from offering to pay an amount that exceeds the stated amount of rent."
http://legislation.govt.nz/bill/government/2020/0218/latest/LMS298935.html

https://www.federalreserve.gov/monetarypolicy/bst_recenttrends.htm

the correlation looks getting higher, doesn't it?

The property sprukers are clearly winning, fools and their money, or in this case fools and the banks money. I wouldnt celebrate just yet.

Obviously the market is far stronger than most expected and rather than simply being exuberant (or highly embarrassed and p*ssed) it is worth considering the implications.
Firstly, clearly mortgage rates are down and expected to fall further fueling the market. That is advantaging FHB with secure jobs and income.
However, one also needs to appreciate that there is another group who are not negatively hit but rather advantaged by Covid - those with secure jobs and income and existing mortgages as they are seeing themselves far better of facing lesser mortgage payments. This is creating opportunity to to trade up and would explain as to why Mike was recently at a loss as to why Auckland properties $1.5m were selling well (not necessarily just Hong Kong money CJ099).
The other thing to consider is that the national HPI is up 10% YOY and Auckland up 10.7%. Rises of this magnitude clearly stimulate the economy as intended but it also raises concerns regarding economic stability - did RBNZ over-cook OCR cuts and QE? To me, a consequence is that the need for further OCR cuts by RBNZ in the short term may have lessened. So I wouldn't be necessarily too sure as to further OCR and mortgage cuts in early 2021.

11
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Yes printer, a key nail you are hitting on head is that most of those hit by CV19 and unemployment economic woes are not owners or prospective owners of property.
This can be seen to some degree in the fact that peripheral districts of Auckland have performed not in stellar terms, sales wise this month (see Papakura, Manukau, Franklin and to a lesser extend Rodney, compared to the average of 44% increase). People from whom RBNZ buys bonds of course, have a lot of cash and this will continue.
Short term, most are happy. But you know as I do, that this will lead to inflation, along with the shortages emerging in China re flooding and pork prices, plus harvest trouble in USA. Printing money causes inflation, it is simply when. And if inflation goes to 5-7%, what will central banks do to defend currencies? Can they then really NOT raise interest rates. We are in a cleft stick and cannot go back. No interest rate increases are possible as they would crash the real estate and stock market bubbles with massive feedback problems. This is what I see happening later in 2021 and more so as 2022-23 approaches. This printing and avoidance of reality is a mirage and it is a shame to see NZ, owing to its finance dominance, marching straight after the Fed and ECB and Japan.

Right on the mark Mike

Central banks seem intent on allowing inflation to increase and by some miracle keep interest rates down without crashing the currencies.

When this crisis is about QE that is spent is mostly replacing incomes and keeping the status quo (band aid) as opposed to bailouts I think we will find in the next 6 months to a year that even though bond holders have made a mint the govt spending wont have been stimulating in a growth perspective at which point we will see an ingrained recession.

Easiest way to put it is take $20 billion out of the economy along with consumption dropping is going to lead to deflation and wage decreases which will seep through to housing rices and rents.

Unless we get a vaccine soon our reliance on Tourism, students and exports will be exposed as our national debt to GDP gets to dangerous levels. To avoid turning into Argentina or Zimbabwae, the govt will have no option but to tighten the purse strings

I never said it was all Hong Kong money P8. What I did say is a lot of money it the top end of Auckland's housing market (In the multi million price bracket) is likely to still coming from Hong Kong. There's still a lot of unrest there, even with the new extradition laws and people are still likely to trying to find safe havens for their cash. Would you want to live in a country that does this to its people: Hong Kong: Police tackle 12-year-old to the ground in Hong Kong. https://www.bbc.com/news/av/world-asia-china-54065743

Cheers CJ099 :)

I guess those who are not hit by covid are much much higher than those hit so demand more than supply.

This is different era in economy suited to bororrow borrow and make profit supported by government and reserve bank.

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As Jenee pointed out clearly yesterday, gov and RBNZ do not want housing market (and by extension bank equity) to be deflating in middle of CV19 flap. They are achieving that objective. Clearly prices are rising and sales are rising, comparing June-August with last year. And annual sales look v much (in Auckland) as if they will exceed 2019 for the full year Jan-Dec. All of that is pure fact.

But of course there are lots of buts. Many readers on this site have stated that when the extend and pretend game of wage subsidy starts to abate (this month) things will begin to alter. However, at the top end there is patently a safe haven spate of buying going on. yes there is bracket creep due to price rises but get a load of this:

$2.3m and above: Auckland sale sin August up 308% (from 48 to 148)
$1.5m and above: up 142%
$1.2m - 1.5m: up 134%

However even $800-900k bracket sales up 60%
$650-800: down 8.2%

Auckland section sales up 100%
Apartments up 23.6% in Auckland City

I will cover 12m running sales totals and how much of lockdown sales loss has been made up in June-Aug, separately. But Spring likely to remain strong sales and listing wise.

For now, the "boom" applauders and the facts, have the stage.

OMFG, pls STFU
This was your cue...

Sorry Mike, I know you genuinely you mean well
Just wrong call this point in history IMHO

You are wasting your time here. go out and sell more houses.. Go my child!

I very rarely sell, more tend to buy, build and rent. Or buy, renovate and rent. Subdivide if poss, or build minor dwelling units.
My main aim is to house people(like Megan Woods, but a hell of a lot more effective)
Am diversified into forestry, cash and small-cap business's

But, enough about me.... what the hell are you doing???

TTP we all know that's you.

*Snort*
Your delusion does not improve your credibility
If you think TTP is an investor and I'm an investor, means there are only one investor in NZ, you should really only be commenting on stuff.co.nz
Or start working harder and investing wiser, and/or change your circle of friends

Tim Tim Tim we still know it's you. :)

Childish comment deleted - Ed.

names calling.. That's one tale telling sign!

Verb - also known as

Childish comment deleted - Ed.

Childish comment deleted - Ed.

Its fine. I already occupy a space in your head there big guy lol.

Childish comment deleted - Ed.

Good on you for making an effort on these forums though :)
Do appreciate alternative perspectives
Still wish you all the best, and am happy to mentor you :)

Childish comment deleted - Fred.

Childish comment deleted - Ginger.

You are all childish - Cindy

Nah see we know who you are and TTP, you also used to abuse people under that user id. See you haven't changed have. :)

Work hard and invest wisely and you won’t be as pathetic
No need for all the forensic analysis
Sorry for the hard call, couldn’t say it in real life to be fair
Also applies to me as much as any one
Best of luck :)

Best you should follow your own advice then Tim. Stick to the rules and less of dodgy bully boy tactics. :)

Bhuahahaha!! Bring on the 1M median house price in Auckland!! Dgz!~

'But, enough about me.... what the hell are you doing???"
I have done my dash, had accidentally owned a rental while we were in Australia, sold it. Only own my family home now and I am thinking about the children, the next generation. You can't have it all... I don't want to be the one that f**ed it all up for them!

Mate, you're behind the times.

The legacy we leave to the young generations doesn't matter a jot. It's all about what we can extract from them. We have to get on with mortgaging our children and grandchildren's future.

Makes sense, you've quit 'cos its a bit hard and just care about your own circle.
You're highly likely contributing to f**king up your kids with your attitude alone, even without the envy/hating
You should encourage them to embrace our beautiful scenery, environment and democracy and being able to own a bit of freehold(with a bit of hard work)

LOL.. WEM

WEM = We emulate Mao?

well, you are obviously in tuned with the younger generation..

More millennial, than Maoist for sure

anyhow it's Moa not Mao..

Missing the point as usual Mao

Lol, why are you so mad? Dont like people post detailed report here to change your narrative?;)

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Somewhere between 80 and 250K people unemployed. Lost foreign tourism contributing about 7 billion net to the current account deficit. Debt deleveraging appears to be in progress. Government hell bent on maintaining NZ closed thereby maximising the economic carnage into next year. But realestate is going gangbusters. What could go wrong.

fat pat
We talk about the disparity between rich and poor in this country.
There is also disparity as to how Covid is affecting people - some are losing and some are winning.
Many of the 80 to 250K unemployed that you mention who are negatively affected are low waged (e.g. hospitality and tourism) and non-home owning. Those advantaged by government and RBNZ actions tend to be higher paid, have job security and home-owners who are benefiting from lower mortgage rates.

I imagine this is some kind of system dynamics where we're seeing the beginnings of instability. Velocity of money dropping to new lows, Monetary and fiscal policy over reaction cold lead to runaway inflation. If it's caused by a loss of faith in currency then it will be impossible to stop.

Have you tried to contact anyone at Panuku lately- huge raft of unemployment over there with average salary @$200k. Airline pilots where captains are earning $250k again jobs are gone. It is not just the lower end at all.

Debt deleveraging appears to be in progress.

Wrong. But always up for a bit of evidence.

J.C.
Re: "But always up for a bit of evidence"
Are you now accepting that Auckland (HPI up 10.7% YOY ) that BT auction data as interpreted by many had a sound basis, and that possibly your view may have been clouded by a bias.

Hi J.C. I stand by my comment. I've been watching the RBNZ C5. Here are my little graphs.

Thank you, but I don't see any strong evidence of debt deleveraging in the data.

It's in the second derivative. Growth is slowing. That's all it takes to create a recession according to Steve Keen. That second derivative is pretty convincing to me. If you look when it bottomed out after the GFC it was 2009-2010 which corresponded to the best time to buy a house.

OK. Credit growth is key but it's still unclear the extend to which your data shows 'deleveraging', which would 0% to negative credit growth.

Yep you're right. If your glass was half full, and you forget about consumer and business loans, then housing acceleration is still positive. Bear in mind that's with an absolute herculean effort by the central bank and govt, unprecedented lowering of interest rates with known adverse consequences for the future. We've got loan deferrals and all sorts of wage subsidies in place. I think it's too early to say anything definitive. Overall credit impulse is definitely negative at the moment though. The music hasn't stopped yet but I don't want to be standing up right now.

I worry too, i see a risk of us going the way of Argentina. To get wages up and production ,we would have to deal with some monsters in the wardrobe, the monopolies the supermarkets the building industry the high taxes the welfare state, the high debt, inefficient councils, the RMA, take your pick.

I lost a friend last night and today I talked to a friend, he told me NZ mental health is third world, how much further will we slide?

I'm sorry about your friend. Likewise I hope we don't go the way of Argentina. I'm a bit worried about the NZD going down.

Sorry to hear, Brother.

the greens could become the balance of power and bring in a CG tax as part of the coalition agreement and they will use information like this to get it over the line.
labour will say its not on us but part of the agreement for partnership

The RBA's vehicle of choice to put new money into the economy is property.

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this is a disaster for all the people on low wages or who are renting. It's a tragedy in the making right in front of our eyes.
In the future our children will sit with eyes wide open as we tell the crazy stories of the NZ housing market and the bust that lasted for decades, wiping out a generations wealth.

Money should come from growing things, making things, or mining things, not artificial, politically motivated low interest rates, lowest for 5000 years, what could possibly go wrong?

We prefer the Greek solution of more debt and living beyond our means, off the wealth of others.

AJ..
My own view is that it is a story of gross Monetary system mismanagement. House prices and farm prices have simply reflected that. The levels of Monetary inflation over the last 40 yrs has been profound.

At the same time there has been an agenda to suppress wage level inflation.
Reserve Bank has always warned of readiness to respond to wage inflation and on the political side, we have had the deregulation of the Labour mkt.
Throw in the the whole work visa industry , where employers and special interest groups can lobby Govt and be able to "import" the labour they want .
(At the moment Agricultural Contractors are lobbying to be able to get their seasonal workers over here... I'm betting they will get what they want.)
How can wage rates rise much when there is such a large pool supply of labour..?

The whole Globalisation paradigm , which has been embraced by both labour and National has become a wealth arbitrage.
Wealth , in the form of immigration and FDi becomes the price maker for assets and imported labour plus the pressures of low labour cost exporters like China having a deflationary bow wave like pressure on wage rates .
The love of globalisation has also lead to commonsense being pushed aside.
Why do we keep imposing costs ( eg. labours renewable policy ) on our exporters and yet allow countries that ignore the environment to openly export to NZ. ?
In the name of "fair trade" , ..." level playing field".... should we not be imposing tariffs ( for want of a better word) on imported goods that reflect NZs policies..., for example, environmental policies...

In a Macro view, all of this has lead us to where we are... Its not just socalled greedy "speculators" that have brought us to our current place.

As much as one can argue about House price inflation being caused by a taxation issue, one might also argue that it is NZ wages have lagged badly behind, which has helped cause unaffordability issues.
My own view is that house prices are largely a function of Monetary inflation and immigration. ( John Key said as much in 2017.... that GDP growth under his watch was largely a function of immigration + credit growth )

The real estate bust isn't going to happen just yet.... My view is that Govt and Central Banks are going to totally wreck the monetary system, with money printing and deficit spending and ultra low interest rates....
MMTs' time has come....

Taxing housing will solve nothing... It will just help impoverish another class of people.. in my view.
Imagine a wealth tax on a farm..?? I'm guessing that would be a nail in the coffin for a few farmers..?

oops... I just wanted to say I agree with what u said... I ended up spieling !

I'd be interested to see how much we are killing the ability of young farmers to form the backbone of NZ's primary sectors in the next 50-100 years. Must've been a massive decline in farm ownership among the young thanks to these idiotic pretenses of economic policy.

I guess it doesn't matter, eh. What's important is not the strength of NZ's farming sector but the inflation of residential property portfolios.

we now have the super farmer, the large corporate with easy access to funding I see them as almost unstoppable. Most if not all the decent sized farms sold around here in the last year have been sold to corporate type farmers.

I would like to hear the Reserve Bank of New Zealand and the government tell us why this is good for New Zealand and as a legacy for those who follow.

Certainly interesting times. I'm thinking we are exposed to external shocks, debt is making us vulnerable. Problem with taxing houses, if it's on unearned income it assumes the owners have the income to pay it. Same with farming, taxes should be fairer but most of us have not had a hand in these crazy valuations, even a low tax of %1 could be for many very difficult to pay.
The high land values are also making farm succession almost impossible for chosen child. Many of my friends are facing very difficult choices with children, when the farm is worth $8m but only pays a decent wage for the owner. We have a problem with a neighbour selling sections, 440k for less than 2 hectares. By the time they put a decent house on it's going to be a million dollar investment.

We paid 620k for 250 acres with house and cottage in yr 2000. We will either have to sell and move or subdivide to give our 5 children enough to buy an overinflated house. It's the problem of living south of Havelock North.

I don't know where the money is supposed to come from for MMT, looks like a ponzi to me. We have from my figuring over about 130k of debt per head ,private and State and I don't think that includes council debt and PPE debt. Auckland council wants to borrow some crazy like 22 billion, it's almost like MMT has arrived already for the chosen.

Have you checked NZ imports? NZ imports cars, fuel, aircraft, computers, chemicals etc. Which one of these is sourced or produced in NZ? which one of these would make economic sense to be made or sourced in NZ?
NZ biggest problems are competing in Europe and US who protect competition by subsidies, regulation and tariffs. Not with cheap labor, polluting countries.
Are you talking about labor intensive manufacturing jobs? like what? textile? electric small goods? white-ware stuff?
NZ has benefited from globalization. Do not make a mistake to attack it. Globalization helped NZ to recover from the dead end of 70s and 80s where the lucrative market of the UK was gone. As a resource poor country, who has to import a lot of stuff (other than food) for a modern life style, NZ have benefited a lot from globalization.

Is it wrong, when people have to take on more debt to purchase an overvalued home. Working harder for longer to pay back debt shortens ones life expectancy by 9 years. https://shorturl.at/eEHZ2

https://worlddebtclocks.com/newzealand ........money printer goes brrrrrrrrrrrrrr..............

that's only govt debt, you have missed the monster in the corner that is private debt.

You can add it all up here
https://www.rbnz.govt.nz/statistics/c5

@Andrewj .....So the Government debt is currently $120,154,000,000 approx. + Private Debt $782,172,000,000 approx = Total Debt $902,326,000,000

So for Jacinda's team of 5,000,000 thats $180,465 per person ..........so how will we ever pay this off !! .....The answer is "we won't" ....which leads to the next question "What will happen next ??? " .........however, I know one thing absolutely for sure, is that high house prices won't help one iota !!

..or if you want to see a Government go really crazy, have a look at the USA debt clock !! .....https://www.usdebtclock.org/

that's so much worse than I thought, makes me very sad.

Private debt is ~$480b, I think. Crazy Horse might’ve done some double counting? Still nuts though.

but you have to add council debt etc

Correct Andrewj .......the whole lot is in there !

Government debt is taken on, on a longer timeline than us mere mortals correct?

Good, as our economic "growth" is based on asset price inflation I suppose this could be interpreted positively.

Good, as our economic "growth" is based on asset price inflation I suppose this could be interpreted positively.

Correct. Their will also be a few moments of optimism in the boardrooms of the banks here and in Sydney.

Hallelujah!!

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AUCKLAND MEDIAN PRICE UP 5% COMPARED TO MARCH 2017!!!!!! GIGANTIC BOOM $$$ EVERYONE GOT SO RICH!!!! DGM'S DEVASTATED!
Sorry guys, 5% after 3 and a half years doesn't really warrant all the hype, does it?

So what! Better than -5%.

For whom?

The only generations who matter?

Comparing March with July but also, after inflation the rise is less than NIL, re median.
However, in last 4m median for a 4 bed size 200-275m in Auckland has risen 10% which is pretty remarkable.

Fair enough, I compared it to the previous peak (when it was also "great time to buy! buy now or get left behind!").
Indeed the past few months have been very interesting, money most likely flowing in from overseas.

Wgtn city up 2% YoY - come on Welly!

Move over Judith, Jacinda just got my vote. I was going to just buy another rental, now I might just buy a boat too. I love NZ.

Welcome to the Jacinda team. Let’s keep moving.

Let's keep moving. Moving what, the goal posts?

Let's keep moving aimlessly

All you can do now is laugh as if you try to rationalise this you just realise how mad we've all gone. To infinity and beyond with no long term ramifications....(yeah right!)

If we examine the collapse of the Soviet Union we can trace the eventual collapse to the sudden psychological shift from an assumption of permanence; that universal belief that life was unchanging and so everything was forever.
This psychological state was replaced by a shocked awareness that what was unimaginable, "impossible" was not only entirely possible, it was happening in real-time. This change in consciousness arose in individuals in differing ways and velocities, but eventually, everyone accepted that some adaptation was now necessary.

(CH Smith)
Judging from many of the comments above - many of us know that 'change is coming'.
Be prepared.
The worst that will then happen to you is your words will look foolish in hindsight.
The worst that will happen to those who can't see what's coming will be far worse.
Life is about risk and reward; looking at the odds of circumstancial change and if in doubt, hedging your bets.

Yep, no matter what you think about the housing market, it's always worth examining the best and the worst possible outcomes. Even if prices go up 10% every year from now on, my savings increase much faster than the deposit needed. The "buy now or get left behind" bullshit doesn't apply to me unless Auckland house prices increase 25% YoY. Which one is more likely? A 5-10% fall, or a 25% increase? The reality will most likely be inbetween these two, and thus pretty much irrelevant in my case.
As for the masses... yeah, many people are already so far behind with no chance of ever catching up, thus price increases are already irrelevant to them. They're also irrelevant to the average family who lives in the same house for a decade or two and doesn't own rentals.
The only people getting shafted here are the ones who have to really stretch themselves to scrape together a deposit - so most first home buyers.

Same happened in Europe in the late 19th century. And the debasing of currency severely affected morality.

Theft from young workers and old pensioners to prop up speculators will have consequences for NZ society.

Like much else, it v much depends on what you compare to what.
For example, 12 month sales to end of August are up 8.9% in Auckland compared to prev 12m (23,735 v 21,780)
Auckland lost 1984 sales in April and May compared to 2019.
In June-August it has made up 1759 of those, or 88%.
In Manukau City it has made up 92%
In NSC 97%

In Sept 2012 - August 2013 Auckland had 30,579 sales.
Since then we have added about 200k people and 13.5% more stock, yet we have 22.3% fewer sales.
That does not matter if all you care about is price.

Unfortunately, printing lots of money and not increasing productivity is inflationary and inflation means higher interest rates or a cratering currency and more inflation due to price of imports rising. So, we can party for now but the shit comes sooner rather than later.

Yeah somehow I am richer without knowing it. But seriously, why NZers are so upset with housing as an investment? Just look at share for the last 10 years as an alternative investment :)

PRICES in Auckland and HPI

Let's compare:

HPI in August 2016 was 2898 and median was $854k
HPI now in August 2020 is 3121 and median is $950k

So, as most prefer HPI, it is up 7.7% in the last 4 years
Median is up $96k or 11.25%

Key question is: does HPI has inflation deducted from it?

If we reasonably assume inflation for last 4 years was about 2%, that should be deducted.
If you deduct 8% from the HPI increase the increase disappears.
If you deduct 8% from the median increase it shrinks to only 3.25%

I don't care what houses are worth, but I really care about debt.

Disgraceful.

Does housing market need support by government ?

Low interest rate, removal of restriction - LVR, mortagee defferal.........till middle of next year.....what is government and reserve bank upto.

17
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Adrian Orr: "Hey Ardren, you got any matches?"
Jacinda Arden: "Sure thing Adrian, we've got to keep this thing moving"
Adrian Orr: "Sweet, I'm gonna pour some more petrol on this sucker"
Me, first home buyer, having voted labour in. "M0th3rfu#@kers!"

I feel your pain. We held out for as long as we could but it became apparent Kiwibuild was going to die a spectacular death so we had to jump and bought something a year ago. In the space of four months I've gone from stressing about losing the house to having made a sizable-but-unrealised paper gain. I have no idea what the hell is going on anymore.

14
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We've been hard on the hunt for the last 6 months, I've gone from rubbing my hands together in glee thinking COVID was gonna bring it all down to scrambling to get in before we miss out. All the while knowing that we could be buying at the top of one of the biggest property bubbles of all time. It's maddening

Terrifying too. Keep doing your homework. There's mortgage ballots and affordable house ballots that will give you significantly more value and flexibility over repayments if you need it than retail mortgage products - provided you're lucky enough to win one. We missed out on about a dozen before we caved and bought the rental we were in.

Good comment Matt, is def v tough times to make good decisions
Best of luck :)

Just been speaking with my race horse owner neighbour. He said that this pandemic has allowed him to upgrade to a bigger launch. Who would have thought in March that everything was going to turn out this way. I had Jacinda all wrong, she has done NZ proud.

The team of 5,000,000 can be rightly proud of Jacinda’s crisis management. We are healthy, safe and most are wealthier.

I'm not so sure that most of us are - I can't find the statistics, but I'm pretty sure I read somewhere that more than 50% of New Zealanders live in rented accommodation. It's around 35% of households, but because rental households tend to have higher occupancy than owner occupier (think of all those boomers rattling around in 3-4 bedroom homes) the actual numbers of people living in rented accommodation is a lot higher.

"""""most"""""

The BOOM!!! before the KBOOM!!!

Is it wrong, when people have to take on more debt to purchase an overvalued home. Working harder for longer to pay back debt shortens ones life expectancy by 9 years. https://shorturl.at/eEHZ2

Be Kind mate.

11
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This is crazy. The economy is literally on debt-fueled life support. We are losing more people overall than we are gaining. 2500 in last month alone. Everyone with a vested interest and a megaphone or microphone is doing their very best to scare the living bejesus out of anyone that could possibly somehow afford a home but does not yet own one. Meanwhile, the smart money is quietly unloading rentals at top of the market prices to suckers who believe the hype. This government is in a covid corner. Do you believe they can just keep borrowing for the next 12-24 months to suspend reality?

Of course they can keep borrowing (printing). They are in an MMT environment but just don't realise it yet. No government will remove the life support now or it will all turn to custard and nobody wants to be in power when that happens. So that $100b being printed will turn into $150b... $200b...$500b. Doesn't matter, so says MMT. We can all be rich by printing our own currency, none of us have to work. Wait... scratch that... those that do work now have to be taxed more... those that buy houses, no tax!

Only solution long term when it all turns to custard will be mass debt jubilee, written off by the state.

Fiat Currencies and Fiat Cars are very similar. Over-engineered and extremely unreliable and when they do break down it is a financially painful experience.

12 month sales, compared to prev 12 months, smooth out bumps and also show differentials clearly
Auckland 12m sales are up 9.3% to end of August
Wellington sales are down 7.5% on same basis
Albany Ward sales are up 20%
Waitakere City up 13%
NSC up 10.6%
Papakura up 16%
Manukau City up 6.1%
NZ excl Auckland sales are down 6%

So, some parts of Auckland are going ballistic and some are not.
Wellington and NZ excl Auckland, sales are down on prev 12m
And it needs to be kept in mind that sales in 12m to end of August 2019 were slower than normal, so the following 12 months is flattered (the prev period contained AML and OBB)

Housing market last year (2019) had shot up in October / November (Market was down from October 2018 to September/October 2019) and now the market has again shot up after lockdown, so the gap / growth on comparison will be higher between September/October (market was down) last year to Sept/October in current year.

Will get better idea of the jump between November last year to November current year. Price jump if still higher / same as now than the market would have jumped more than 20% from 2019 lows. Also affect of end of wage subsidy and other stimulus will be evident by than though actually will be clear by end of the year or early next year but may get some indication.

I would genuinely be interested in knowing how much of this is down to investor activity. Can any of our resident investors enlighten us, from their own activity or that of friends/ acquaintances.
I get the feeling that a lot of investors with multiple properties are plowing in. They have security of income with existing rentals, and so are largely immune to loss of work income.
They kind of live in a parallel universe that’s not affected by the virus.
I also suspect there is a fair bit of FOMO for FHBs at play too.

Yes you're correct, I know many investors and with rates so low, tenant demand and rents so high it's a gravy train. But only for those with pre approvals. The other thing is new planning rules means instead of just doing 2 houses on your section now you can do about 8 townhouses without providing carparks. So yes that's the investor view from those I know about.

Are they mostly Chinese? Only people I know expect people live in tiny spaces are Chinese people.

As an investor, I’m pretty nervous with the bubble thing.
Long term interest rates look stable however, and NZ Inc. should be ok hopefully....
Def very risky, but where there’s risk, there’s reward. And where there’s risk is reward.
Very important to stay hedged, and def no time to be gung-ho
Very important to be able to add value to your investment, rather than be passive with it.
Very tough times ahead I believe IMHO

Well that was unexpected, and quite alarming, as it doesn't appear to make any sense. Interest rate is clearly king when it comes to fuelling the market (which we already knew, but this makes it very explicit). The low rates have shot up the values like adrenaline to the heart. Nothing else really matters, not covid, not employment, not the death of our largest export earner, tourism....

It also seems as if a large portion of people aren't worried about the economy tanking, or, they would rather be in a home they own if it does (you can't get a new loan if you're unemployed, and if your rent is same as your loan payments, it doesn't matter - as long as you can still pay).

I'm still perplexed by how this can be happening with all these people on mortgage holidays, and quite concerned that there's a real head-in-the-sand thing going on. Possibly we will see a different story when the long-awaited restructures happen as the govt. removes life support. My employer has over 6,000 staff and a restructure will be happening within the next two months. I don't think this scenario is very unusual.

Who knows what will happen once that goes down. Strange times.

I have given up guessing. I think there is a bit of head in the sand going on, and I think our economy will deteriorate in the next 6 months. I know very few people whose business is thriving, about a third are about where they normally are, about a third are about 10-25% down, and about a third are 25-50% down. I know a couple of guys, quite successful, whose businesses have been badly hit, they seem down and I really worry about their mental health.

Well put Fritz
Think that’s a pretty good summary
Tough times ahead for sure imho
Best of luck to all :)

11
up

Have to feel for all the FHB's out there, particularly those in Auckland who have been saving hard for a 150k plus deposit seeing that 750-800k house a year ago rocket in value and will now more than likely be paying 900k plus for the equivalent.

RBNZ and this government, the apparent saviour of the young and disadvantaged, should be ashamed of themselves.

National Party = Housing Crisis is a good crisis

Now

Labour party = Housing Crisis is a good crisis

Result

FHB screwed by polticans of all breed.

Now : Think whom to vote. May be Green.

Anecdotal, I know, but suggestive of Hong Kong money at play:

https://www.oneroof.co.nz/news/38389

National and Labour had their chance and did nothing; time to give the Greens a go?

Definitely. Flawed party, but less flawed than the others!
At least their policies are there or thereabouts.
Labour are hugely disappointing. I should go with my gut, I always thought Ardern was a flake, then I got swayed by her.

What we can deduce from these past two years is that:

1. the foreign buyer ban only slowed the upward trajectory of house prices, it hasn't pulled prices back towards a reasonable level compared to local wages

2. the very high propensity of investors in residential property to leverage existing property to fund new purchases has under pinned demand

3. The lack of taxation of residential housing investments and the lack of alternative investment choices means residential property continues to be an investment of choice

4. Given the high level of investment in residential property, prices are being driven not by higher rents but by falls in long term interest rates (the yield curve collapse).

5. House prices will only fall if:

a) rents are pressured by Ue or negative wage growth or
b) there are upward moves in the yield curve
or
c) liquidity in bank lending against property reduces

In other words expect more of the same unless/until we see a significant downturn in the real economy.

Two words. Housing Crisis.

The amount of debt people now need to get into buy a house in New Zealand is madness. I thought Labour were going to fix the housing crisis.

I am surprised that National hasn't taken the government to task on the housing crisis, and on the Kiwibuild failure. But they didn't even admit there was a housing crisis until they were voted out.

Maybe time to vote Green

Vote Green, if you care about equity and the environment.

FOMO market.....and a tidalwave of DCMs about to land

What is a DCM? I see it everywhere on this site. Also a TOP?

Days to the General Election: 19
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