Best September housing sales in 14 years, record median prices in nine regions

Best September housing sales in 14 years, record median prices in nine regions

The residential property market rocketed into boom mode in September, with the Real Estate Institute of NZ recording the strongest September sales in 14 years.

The REINZ said 8377 residential properties were sold in September, up 37% compared to September last year.

It was the highest number of properties sold in any month of the year since March 2017, even surpassing the number of sales in peak summer months such as February and March in 2018 and 2019.

The Auckland market was particularly busy with sales increasing from 1867 in September last year to 2861 in September this year, up 53%.

There was also strong growth in sales volumes in most other centres, with sales in Tasman hitting their highest level since records began, while Nelson had its best September in 17 years and Manawatu/Whanganui had its highest September sales in 14 years (see the first interactive chart below for the sales trends in all regions).

Prices were also firmer, with the national median price hitting a new record of $685,000 in September, up by $5000 from the previous record set in April.

Record median prices were set in nine regions in September - Auckland, Waikato, Bay of Plenty, Gisborne, Taranaki, Manawatu/Whanganui, Wellington, Canterbury and Otago, (see the second chart below for the price trends in all regions).

"Much of this activity is being driven by the extremely low rates at which people can borrow money, which is at its lowest levels since records began," REINZ chief executive Bindi Norwell said.

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Volumes sold - REINZ

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NZ total
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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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Median price - REINZ

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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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Marlborough
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Southland
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216 Comments

24
up

Falling Interest rates are literally pouring petrol on a fire. At the same time, the historical low stock is going to drive prices higher. For example, in Bayview in Auckland there typically was always around 25-30 houses for sale, the last 6 weeks there is only 8, everything is selling at auction and auctions being brought forward. Anyone thinking housing is going to fall is dreaming.

Lending standards & criteria has a far greater correlation on property prices than interest rates.

Theres a difference between cheap finance, and easy to obtain finance, and its that latter which I think people are taking for granted.

13
up

I played around with ASB's 'affordability calculator'. The numbers are insane. Not sure how close the calculator comes to what a couple might actually get pre-approval for, but even if the real number is 20% lower it's crazy.
A few examples:
Typical "young professional" couple, 100k+60k income -> "You may be able to borrow up to $1167k"
Couple, 70k+70k income -> borrow up to $1019k
Couple, 55k+55k -> borrow up to $779k
Mind you, the actual offer will probably be 100k-200k lower in reality, but to suggest that a young couple should borrow $1 million is still insane and irresponsible.

Exactly, banks are being completely irresponsible these days. They just see the shorter term risk in the feedback they may get from their shareholders by finance year end rather than the one they are passing to over leveraged home buyers that will surely be kicked by this rather soon than later.

If banks are being completely irresponsible then yes property prices will continue to rise.

You really don't understand how economy works if that's what you think.

Historical information suggests otherwise.

Loose lending standards/criteria = property prices increases, and vice versa.

You are ignoring great part of the recent history. Clue: GFC.

Enough of the patronising shit mate.

Facts please, not passive aggressive putdowns.

No need to use that kind of vocabulary.

Report it and see what happens

Bit rich, considering the nonsense you regularly post

Some of your best trolling so far.

CJ.. Fast forward to let's say 2026 when they still owe 800K+ and interest rates are say 8% or $6K monthly payment. Let's at least admit that's it is a reasonable possibility. If 6 years ago you would have said mortgage rates would be under 2% most would have laughed. Do we really know? Can we rule it out?

It's only a reasonable possibility if incomes are rising strongly. Then serviceability wouldn't be a problem anyway.
Have we ever had a 4x increase in interest rates within 6 years?

refactornz..Fair point but we have never had rates at anywhere near 2% till now either which changes everything. More importantly, let's look at your contention that interest rate fluctuations are tied to income changes. Since rates have constantly decreased (with a few very short term blips) since at least 1985 we should see numbers confirming the corresponding income drops since 1985. Call me blind but...
IMO it would be more accurate to say that the continuation of anything close to the stratospheric rise in NZ property over the last 40 years is only a reasonable possibility if incomes are rising extremely strongly at maybe 10%+PA, which I do not envision.

12
up

I think you will find they are metaphorically pouring petrol on a fire :-p

It's a bit hard to understand too though - immigration is close enough to zero, must all be pent up demand combined with government/reserve bank stupidity (LRH's to infinity, LVR removal, FHB's going crazy, government indicating it will do anything to prop up housing market etc etc).

If you are a recently arrived (pre-Covid) immigrant with a PhD rolling sushi at the mall for min wage, you can now move out of your rented four-to-a-room s-hole and borrow a mil.

With the population Ponzi on hold, would we then expect problems to show up in the rental market?

28
up

It's FOMO, combined with the Reserve Bank guaranteeing low rates forever.
It will cause a lot of problems down the line, but it's hard to say that FHBs are being stupid. It's a toss-up between "I might be locked out of the market forever" and "this mortgage will consume my entire paycheque for the rest of my working life".
I'm a potential FHB who's been tossing this up, and I'm leaning towards staying away for now. I don't think pay is going to rise; I don't think I can count on the value of a mortgage being reduced by inflation. Basically a Japan/Eurozone situation. And at current prices, the % of my income that would be required to service a mortgage would mean a profound sacrifice of lifestyle, for decades to come, as well as the illiquidity of a property whose value may fall. But it's not a straightforward decision when this may be the moment of permanent bifurcation between a property-owning class and the rest of the population.

14
up

Yip decades of (selfish?) decision making has made this a real shit sandwich for younger people. Not buy and be locked out of home ownership and experience the instability of renting while raising a family....buy and have the risk of being wiped out financially if the much needed debt/price reset comes.

Even indecision has a cost ?

Very good analysis Brisket, I've often used this type of analysis and often rented where/when suits.
With family and schools etc. there are often intangible emotive factors that come into play, like 3monthly rental inspections etc..
I think if you're handy with tools and there is some add-value potential its worth the plunge, but not necessarily always.
Good logical analysis though

Excellent analysis.

We bought in November last year.
One of the key reasons we didn't buy for so long was education. Quality of schooling was very important to us, and ultimately that meant renting in school zones where we couldn't afford to buy.
Our daughter goes to college next year, she has been at Baradene but luckily the school were ok with us moving out of zone for college.
If they weren't then I suspect we would still be renting within the Baradene zone.
It's all individual specific and I detest people who say in a binary way that you MUST buy or you MUSTN'T.
For us education drove our decisions, for others it won't.

"...at current prices, the % of my income that would be required to service a mortgage would mean a profound sacrifice of lifestyle, for decades to come..."

Except at current interest rates it's mostly cheaper to service a home loan than to rent. So perhaps you're comparing apples with oranges? (rented room vs mortgage on whole house)

While immigration is close enough to zero, so is emigration. Unless people leave or we build thousands of houses the shortage is still there.

Sales in Auckland up 53% on last Sept
Huge discrepancy of NSC v poorer areas.
NSC sales doubled (534 cf 249 last Sept) whilst Papakura FELL 10% (122 v 135)
Looks like people want out of densely pop areas esp. Also, Chinese folk going back to China mostly reside in NSC.
12 m sales look on course to hit 24,500 in Auckland.
Listings on RE NZ per day for Auckland however, slowing.
They were at 241 a day on Sept 23rd and on Oct 9th this had dropped to 171 a day.
The mania may be abating somewhat, as pent up demand wave subsides a little.
Many properties continuing to sell well over CV
The RBNZ guidance and no LVR + low interest rates turbo-charged market continues.
Still seems to me that sales will not rise over 24,500 on a 12m basis in Auckland and that sales pcm will moderate to about 2100 by mid march, as economic weights begin to counter the inflationary factors.

Dont be coy ...
As an active RE operative and researcher in Silverdale operating on the Hibiscus Coast I would expect you to have an in-depth understanding of the area with particular regard to (a) who the sellers are and (b) who the buyers are, leading to an undertanding of the rotation into and out of the NSC. FHB's, downsizers, upsizers, old, young, investors, immigrants, emmigrants, returning NZer's

https://telosgroup.co.nz/team/mike-kirk/

What are you asking and saying and what is coy about my contributions?

Your comments are all about the volumes of houses in given time periods.
As an active RE agent you must know which groups the buying and selling pressures are coming from
Care to share?

Thought I had made that clear elsewhere. To repeat, sellers are selling in greater numbers because, since October 2019 they are more sure of getting a lot more than CV for their sale. Whereas form roughly early 2017 to October 2019 they were being told that they would get less than CV.
Stock in earlier period was artificially high because of aged listings that there were not enough buyers to soak up and low turnover. Now we have plenty of buyers and not enough stock because turnover is ballistic in Auckland at least.
Meanwhile driver of increased buyers are evident for all: abolition of LVR, record consenting, record low interest rates, QE, safe haven drive; pent up demand prev held in check by unaffordable maths re deposits and repayment equation.
Is that clear enough?

There is no reason why he shouldn't disclose that info ... we all are interested.

23
up

Tell us something new. RBNZ still not happy and wants to further boost housing prices and all in the name of helping FHB but is actually at the cost of FHB.

Real Shame. RBNZ and Government is rubbing salt to the wounds of FHB when they say are doing to help FHB - Shameless creatures.

stuart
RBNZ have absolutely no mandate to help FHB.
Their mandate is economic stability.
Proposed FLP later this year and possible OCR cuts from March next year will further reduce borrowing costs and drive up property prices. Recent removal of LVR has added fuel to the increases in the market and RBNZ's has recently stated its intention is not to reintroduce LVRs - "being counter productive" I think the term was that they used.
This is about improving existing homeowners perceived increase in wealth (lower mortgage payments and improved house value) to stimulate spending.
Those potential FHB are out in the cold here.
But you are not alone: boomers without a mortgage and relying on TD for retirement income are also hit.
Those homeowners in the 30-50 age group who bought 4 to 8 years ago with mortgages of 5 to 7% are the real winners.

Those homeowners in the 30-50 age group who bought 4 to 8 years ago with mortgages of 5 to 7% are the real winners.

All depends. If their h'hold income or business has been wiped out, it doesn't really matter what the cost of debt servicing is.

J.C.
How are you. You surprised by these results??? Bit negative there. :) :)
For those reading auction indicators this is what was expected.
What you need to appreciate is that statistics are great to confirm an event once it has happened. However, that is of no value in being able to read the signs as to market direction - and this is what was mooted but rubbished by you.

As to "h'hold income or business has been wiped out" most job losses have been in tourism and hospitality and these are typically low-paid and renters. Also interesting to see Queenstown data; the tourism based economy there was expected to be hardest hit there with numerous business failures - however, I see median prices up 4.8% past month and 8.2% past three months.

Bit negative there.

Well yes. If incomes and businesses are being wiped out, it is 'negative.' I do have empathy for people.

Property investment and residential banking/lending are the only business in the country J.C.!

Incomes and businesses are not being wiped out, streets are not littered with "for lease signs", restaurants, cafés, malls are all heaving with people, unemployment is not skyrocketing, wake up J.C. open your eyes and look for yourself rather than just blindly following the Covid mantra that all must be bad, see past the sensationalistic headlines from the news

20
up

So remind me why we need all this stimulus then?

Let's just take it all away if the premise is just sensationalism.

Because there was a significant risk that a government and central bank backed ponzi was about to collapse...

13
up

Well for once I agree with you cmat, I don't think we need all this stimulus at all, we needed the original wage subsidy at level 4 to keep people employed and in my opinion, that's it. The various stimuli have been far too many and in excess of what is needed, hence crazy house price rises

Well if you agree with me on that then we'd agree on most things now given it's, you know, the central theme of everything I've commented on for years.

We got him people.

shame you had to revert to a childish comment… lost me now

I enjoyed our short-lived friendship.

Don't worry Cmat. Long term relationships are well over rated. Personally I'm just another kiwi who eats, roots and leaves.

Yvil
I agree - I think RBNZ (who seem to be the most significant and seemingly sole driver) have over-cooked it.
There was a hint in the last I read of FLP by them not to “expect FLP the day after further detail to be released” as being a hint that will not be acted on necessarily as soon some expect. They have also commented as a reminder that future OCR cut will not be to March (as said last March) and I again take that as an indication that they may not be rushing to cut.
They have seemingly also indicated that the LVRs will not be introduced soon (being counter productive) but if the market continues as currently it would surprise me if they revisit that.
Bottom line for potential FHB currently sitting on the sidelines would seem that during Covid there is likely to be more upside likelihood for the market and more downside for interest rates. That will be as long as Covid affects the market which could be a year - anyone’s guess. Difficult decision time!!!!

I agree Yvil :-)

Yvil did you read / hear this week what the WHO has to say about lockdowns... complete and total 180 ... funny because you and others been saying that from day one I do believe. And so there would have been much much less debt and govt spending on artificial income support.

No, I missed that, interesting, so is the WHO now saying lockdowns were wrong or unnecessary ?

"We in the World Health Organisation do not advocate lockdowns as the primary means of control of this virus.

“The only time we believe a lockdown is justified is to buy you time to reorganise, regroup, rebalance your resources, protect your health workers who are exhausted, but by and large, we’d rather not do it.” (David Nabarro in an interview with UK paper The Spectator).
.

Wow, that organisation is a joke

Dr Nabarro, who is one of their doctors, has come out and dropped the bombshell with the obvious blessing of the whole WHO organization
WHO doctor backtracks on lockdowns, discourages them as 'primary control method' | MiNDFOOD
https://www.google.com/amp/s/www.mindfood.com/article/who-doctor-backtra...

Incomes and businesses are not being wiped out

So why is the govt paying for or subsidizing people's incomes and businesses? Why is it that h'holds don't have two sticks to rub together? If incomes and businesses weren't being wiped out, we would be self sufficient, not relying on the govt for income.

Sorry Yvil but some areas ARE littered with lease sales: Orewa especially in my locale.
Malls are not heaving in Albany, they are about 15-20% lower than usual I would estimate.
Papakura sales are down 10% on last Sept. NSC massively up. Where do the more vulnerable to unemployment live?

Broadway in Newmarket and Queen Street and Albert street in the City centre. Littered with for lease signs.

20
up

Have you talked to anyone lately especially any one under 30. They're miserable. Depressed as their dreams of going on their OE has been squashed. Isolated and lonely due to having to work from their shitty flats. Depressed by the fact that someday owning a home house falls more and more out of their grasp. Anxious of the uncertainty that if even if they are able to get into the market their is a high possibility they may be out of employment. Frustrated that every time they turn on the TV or read the 'news' they are reminded of this.

13
up

Totally agree. Young people are being disproportionately whacked by all of this.

The life you ordered is out of stock ...

Its not an easy thing to reconcile yourself with

Maybe. But then this can happen to anyone at anytime.

As a late 40s divorcee, trying to buy a home for myself and two teens, I can attest to this.
Stick or twist? Every month the deposit is "worth" less

Agree Portland. We wonder why our depression and suicide stats are so bad wrt our young people. Yet would do our very best to make it as hard as possible for them to feel included in society and financially secure. All I can say is that if they revolt against the status quo, good for them.

Boomer parents tell them to go and get counseling, not realising its the broken environment that causes a significant amount of their anxiety, stress and depression. Why not fix the environment instead of fixing the person who is broken because of the environment? Its a bit like expecting a plant to grow and bloom in bad soil. It doesn't work. To be happy in times like these with what is going on, would to me, make a person a bit of a psychopath.

I agree the economy has been surprisingly resilient but I think you overstate it's resilience. The local mall near us has a number of vacant premises, the Auckland CBD is struggling, the Warehouse is cutting 600 jobs etc etc.

Further comment to above relating to job loses.
Just been on Herald site: Sad to see number of job loses in Queen Street McDonalds and Warehouse.
However these are generally (unfortunately) low paid and commonly renters rather than homeowners so - like many of the job loses unlikely to have minimal impact on housing market.
Yes, the sad reality is that under the current situation there are are currently losers and winners - a higher proportion of the lowly paid are going to be losers, but falling mortgage interest rates along with increasing house prices for those with job security and mortgages are "Covid winners".

Unemployment has a negative effect in the housing market, not just because it will affect your ability to get a new loan but because pushes rent prices down, which effectively reduces return on investment, making little sense to invest in housing with the current prices.

b21
Accommodation Supplements.

Do you rely on public welfare for making your investments profitable?

J.C. since you don't get it here's an example:
J Bloggs bought a house 8 years ago with a mortgage of $500k @ 7% interest so he had to pay $35'000 in interest pa (I'm leaving out principal to keep it simple)
Today J Bloggs renews his mortgaged of $500k (assuming he has paid back no principal) at 2.5% interest so he has to pay $12'500 in interest pa.
$35'000 - $12'500 = $22'500, J Bloggs is $22'500 pa better off today,
Maybe J Bloggs earns less today than 8 years ago, maybe he earns more, maybe he got a divorce maybe he got married, maybe, maybe, maybe… but there's no doubt he is better off with the lower interest rates

25
up

Yeah, and that's straight RBNZ sponsored theft of purchasing power from one generation to another.

Good for J Bloggs. What do you think the prospects will look like in 8 years time for J Bloggs JR buying a house now?

He'll make a killing by buying in the crash

Only if dad is willing to give him the money to buy.. the banks will be completely gunshy.

17
up

Blowing asset/debt bubbles isn't economic stability - quite the opposite. This is a bit like the policeman searching for the arsonist. Yet the policeman is the arsonist, so they never find the culprit but keep on searching for the cause - not realising they are the cause of their own problems.

There is just so, so much to unpack here.

If you want to talk about the RBNZ's mandate, where does "improving'[?!] existing homeowners *perceived*[?!]* increase in wealth" fall under the mandate of 'economic stability' (it's actually financial stability if we're being picky).

Yeah.
And further inflating a massive housing bubble doesn't sound like the promotion of financial stability to me....

printer8, RBNZ along with other reserve bank is doing dangeous experiment and only will know in future if its role in inflating the housing market with 5% deposit good or bad.

Inflating house price by 40% or 60% in a year from what seem already peak is the only way this pinzi ciuld be sustained but is it goid for the economy, will know in future.

If you look at history, globally, every housing market that has done what we've done and what is happening now has resulted in a crash. Anyone can show me evidence otherwise, but the only examples would be Australia which is in the same boat as us!

we're different.

coz attractive place to live and Auckland economic powerhouse or something.
so double every 7-10 years. that's the rule, just look at the graph.

alittle
The problem is RBNZ has two choices - do nothing and let the ship flounder or take action and try to save the ship.
I don't see them allowing prices inflating by 40 to 60% in a year. For RBNZ to allow that would risk economic instability due to a housing collapse and that would be counter to their current action.
If there was likelihood of extreme property price increases I think you will see delayed action regarding FLP later this year and possible OCR next year . . . and re-introduction of LVRs.
As I have previously posted, I think either that they have over-cooked things a little or the economy has been more resilient to Covid than expected. For this reason, don't be surprised if FLPs mooted for November are delayed a little as with OCR cut from March next year. Reading between the lines of RBNZ comments, I feel that there has already been a couple of comments of caution regarding this.

But we've already sen extreme property price increases! What the heck do you call the last 20 years! (before you say that's normal, it is not!)

"For RBNZ to allow that would risk economic instability due to a housing collapse and that would be counter to their current action."

LOL.

20
up

We who are lucky enough to be born at the right time and who own property are very fortunate. Those leaving school now and entering the work force or going to university have a very grim future in terms of buying just a first family home. Where are our politicians? Why is Labour sleepwalking back onto the treasury benches?

12
up

Wild how there's no documentaries on child poverty being released this election cycle or Nicky Hagar books about to drop. Can't imagine why that might be.

It's because National have had 3 leaders in less than 12 months. Simon Bridges rolled, Mueller resigned and simply no time left to write a tell all about Collins.

ZING....

comment of the day!

ex agent
Feel for the young school leavers but really nothing in this for now retired boomers.
Bank TD rates intended to return 4 to 5% now will be returning 1% are in future likely less. Can't buy bread and butter with that increase in value of home.
Look to those in the 30 to 50 age group: they are double whammy winners. NZ HPI shows that house purchased 5 years ago up 7.0% . . . . and more importantly that 5.3% mortgage rate 5 years ago is now going to be under 2% so not only seen increase in capital value but also likely $300 or $400 a fortnight better off in the hand.

Guess boomers will need to downsize and turn some of that capital into cash. Don't really feel sorry for them. Many of them own way too much house for what they need. Most of it appears to be ego driven - 'look at how rich I am in my big expensive house', but then complain they get no return on their TD's. Oh how tough life is!

They could start arguing that they want interest rates back up at 10% but take a 30% hit on the value of their property? Which would they prefer? Or as I understand it, from many conversations with them, they want their cake and eat it too.

There are less boomers around today than there were 3 years ago

It feels like we're setting ourselves up for a Japanification.

We are there. This is the Japanification. Though it might look more like the persistent Eurozone stagnation post-'08.

IO
Most boomers are doing OK; mortgage-free homeownership should be a key part of a retirement plan. Investment returns just provide a bit of discretionary spending over and above superannuation so can cut back (although they currently aren't able to enjoy that planned overseas trip in retirement anyway).
You have seemed to be anti-home ownership; however, take a drive around your local council's social housing estate paying rent (albeit below market) to see depressing sight of boomers leading fairly pitiful quality of life for what should be their enjoyable sunset/twilight years.

Not anti home ownership at all. But I'm against government and central bank backed ponzi schemes. Especially when its stealing from the future, in order to protect the interests of today - and many of those living in today already have too much (multiple properties, average house price $700,000 insane! We need a price reset to resolve our problems, not further rises!).

And as I say, many boomers I know live in million dollar (4 bedroom...kids have left home) + properties but complain about the returns on their TD's. They can't have it both ways....lets put up interest rates to 10%, watch the housing market tank, then they can receive a good return on their savings.

Which way around do they want it as you can't have it both ways?

(and nice to see that you're developing your altruism for those less fortunate that yourself! Very impressive..)

12
up

p8,
Being against huge house prices is not being anti-home-ownership, a point you repeatedly seem to miss.
High prices *reduce* the number of people who can enjoy the security of home ownership.
I am against speculation in the housing market because it reduces the number of people who have that security.

brisket
House price inflation post GFC and especially currently is about economic stimulus - protecting jobs and businesses - and that comes at a cost to some. Those "some" includes potential FHB and those - such as relying on returns from cash.
Yes, it concerns me that homeownership for 25 to 35 year olds has fallen from 65% to 35% over the past 30 years. However, it is great to see that 150,000 FHB over past three years and that post-Covid RBNZ mortgage figures show that numbers are increasing.
What concerns me, is the scaremongering and usually unsubstantiated "bubble-burst", "wait for the market to bottom", and "poor me, poor me" comments on this site.
I don't have it in for any Kiwi including frustrated FHB - however, comments of those ilk need to be challenged.

SO basically its about protecting those who have lived beyond their means and taken negligent risks by kicking the can down the road and putting the burden on someone else.

Actually printer8 wrote: "... is about economic stimulus - protecting jobs and businesses..."

Right so creating more debt, which was the cause of the GFC, is the solution to the debt problem in order to protect jobs and businesses. And many of those businesses are using debt to fund share buy backs, then taking money from the government for wage subsidies, then laying off staff when it gets too hard. Makes sense...

All it appears to do is create asset bubbles.

Purchasing a large home to accommodate a family with teenagers and young adults is hardly "ego driven".

The boomers were first in line in the grand ponzi scheme (and set it up as well). Well played I say screw the young and infinity and beyond!

Three long years of neglect.

I guess that the housing issue is just something that no party in New Zealand can fix.

I will throw immigration issues in as well.

Almost as if they're related... but bringing up immigration immediately makes you a xenophobe

Disagree
There are two related issues
Housing
Immigration
Some prominent voices have argued for years that shortage of release of land is the main factor driving up house prices

Two questions for you
1. Does the slow release of new land and house builds drive immigration numbers, or
2. Does uncontrolled immigration have any impact on driving up "existing" house prices

Xing is correct

'Some prominent voices have argued for years that shortage of release of land is the main fctor in driving up house prices'

Agreed, there is a disconnect between central govt - pro-immigration and local govt - which tends to be compact cities + NIMBY dominated. End result is demand for more land and a lack of supply of it.

Does the slow release of new land and house builds drive immigration numbers?

No, I would think it would stifle it as prices rise and NZ becomes relatively less competitive as a migration destination as a result.

Does uncontrolled immigration have any impact on "existing" house prices?

Yes, demand curve shifts right, a higher quantity of houses is demanded at a higher price. Higher prices for both new and old housing.

There are a range of factors pushing supply down and demand up in NZ of which immigration is a primary demand driver, and an inability of our cities to expand at the rate required to meet population growth demands is a supply side driver. Many parts of New Zealand are experiencing extreme shortages simply because local councils didn't plan for the immigration they've received properly, and thus a shortage in a market heavy with government interference.

No - it can be fixed just that no party wants to fix the issue as the consequences for that party would be catastrophic. All parties have no clothes now.... they have no credibility.

Have mentioned earlier also that fall in interest rate has long been offseted by rising housing price and witnessing acute case of FOMO where FHB are borrowing in extreme to buy pigeon hole.

Hopefully government keeps on funding money to avoid any house price softening as even if it sorts by few percentage many FHB may end up with negative with removal of LVR. So now come what may this ponzi gas to keep going to avoid bloodbath on the street.

Instead we have the indirect bloodbath called homeless. But I guess they aren't as worth worrying about, much better to protect those FHB deposits. Money matters.

richard
Firstly, Look to RBNZ and not government.
Secondly, current actions and future of market is not sustainable and in time RBNZ will likely have to address this.
For current economic stability reasons while Covid is an issue for the economy, RBNZ intends house price inflation and has announced FLP to reduce leading costs for both households and businesses, OCR cut (negative rates are a possibility) is back on the cards from March next year, and RBNZ have indicated that reintroduction of LVRs would be counterproductive.
My view; they are over-cooking it a bit - but will tighten-up post-Covid but expect current market increase during Covid.
However, I am hoping for a RBNZ managed flattish market (with possibility of minor correction) for some time as housing affordability poses for both housing market and economic stability risks. Otherwise this current action and situation is for nothing.

Funny how this doesn't really seem to be an election issue! National are going down the "Labour will introduce new taxes" line that they ran last election (I think people are sick of that one!). Somehow Labour's absolute utter failure to sort out house prices is barely being mentioned.

It's eerily similar to the last government.
Key spoke strongly before being first elected about sorting out housing. Over time, he seemed to downplay it (what was a 'crisis' was no longer a 'crisis').
Same thing with Labour.
It seems once a party is in power they love inflating property prices!
And most of the NZ population have become incredibly self interested, so little is likely to change.

Can one safely say the RBNZ has bought the Labour government a win in this election?

Who will investigate this type of financial engineering undertaken by unelected officials to pick winners and losers in society?

I can no longer vote while this bias persists and is welcomed by most political party participants.

What's your logic for stating that the RBNZ has bought Labour another term Audaxes?

If house prices and the economy collapsed, people would want change and blame the current goverment.

Because Labour would be in a bit of trouble at the polls had house prices dropped substantially since COVID arrived.... thanks mainly to the RBNZ they haven't, in fact they are continuing their upwards trajectory.

Yes who regulates the regulators? Or do Central Banks have god like powers that mean they can do whatever they want without oversight or democratic process to control their behaviours/actions.

Audaxes
RBNZ is apolitical.
They have the same Act and required outcomes that they work to no matter who the government is.
As to winners and losers in society - those posting on this site seem to see only the current downside of RBNZ action.
Downside is housing affordability for potential FHB . . . . but there is an upside of economic stability to protecting jobs and businesses.
Pity that there is not greater recognition of the upside; but then that is not so obvious . . . and also more about personal frustrations of potential FHB.

As to winners and losers . . . . well there are plenty of this site who for the past three years who have been calling bubble burst and advise FHB to wait for market to bottom. To do so was their choice . . . so they need to live with the consequences of that decision. However, there were 80,000 mortgages (RBNZ) which is likely 150,000 FHB over the past three years who have bought as they thought differently.

but there is an upside of economic stability to protecting jobs and businesses.

Got any proof beyond abject central bank failures in Europe, Japan and US?

Graphic US evidence here and here
Japan Redistribution Doesn't Work
Source Link
All the proposed tool aims are embedded in current interest rate levels - further reductions in concert with Japanese and European policies have had absolutely no impact on their respective productive GDP growth. In fact the Bundesbank has noted residential real estate accounts for 80% of total fixed asset valuations in Germany - a country once noted for it's prodigious industrial output.

Apolitical in Party terms
But not in terms of who gains from their decision making.
However, government must takes full responsibility for failure to build cheap hosing for rent that families need, whilst continuing to our fuel on flames of inflating prices that mean FHB and those on below average wages are shut out of ownership

Just trying to wade through all the hyperbole. Why is it the 'best September housing sales in 14 years'?

Most houses sold in the month of September since September 2006. The interactive graph has the monthly sales figures and your can scroll back to September 2006 (approx 8,700 in Sept 2006 versus 8,300 in Sept 2020).

Most houses sold in the month of September since September 2006. The interactive graph has the monthly sales figures and your can scroll back to September 2006 (approx 8,700 in Sept 2006 versus 8,300 in Sept 2020).

So sales volume is <5% higher for a month between now and 14 years ago and it's a 'record.'

J.C.
This is not about statistics at all . . . this and your other posts are about you not wanting to accept reality of what is happening. :) :)

Do you accept the reality that what central banks is doing is potentially insane?

IO
What RBNZ is doing is about economic stability - protecting jobs and businesses - and that is not insanity.
However, like you I agree that this is not sustainable and in the post-Covid recovery housing affordability is going to need to be addressed for the same reason - economic stability. Hopefully RBNZ will act to manage the market as they are currently doing - otherwise a crash in the market will undo all the actions to date.

So removing LVR's and dropping interest rates on mortgage lending is about protecting jobs and businesses?

To me, the fiscal response protected jobs and businesses. The monetary response has been about protecting and growing asset prices. Its different (in my view).

Perhaps you should be thanking Grant Robertson and not Adrian Orr?

Yes because mortgage lending growth is what drives our economy.

Yes, if Valerie Adams throws even just 1 cm further than before, it constitutes a record

The "record" was a reference to the highest ever median prices in several regions. The highest September sales since 2006 is just a fact. I cannot understand why you are being so belligerent?

Record high prices is nothing exciting, probably almost every item you buy is at “record high prices”, it’s called inflation. And record number of sales is not that special either with population growth. I’m not denying that the housing market is taking off, but breaking records is nothing to get excited about.

Looking At Wellington City – it’s shot up again finally – phew! Was worried as it really hadn’t moved in a year and the regions were racing upwards...
Kapiti , South Wairarapa, and Upper and Lower Hutt all show highest median ever so media pump working wonders there.
Carterton – well down on peak from June
Masterton well down and has been flat for a year. (451k vs 474.7k in June)
Porirua is down sharply from last month and also it 807k peak from January.

Maybe people realised that they were paying almost as much in Porirua as the city so came closer in to avoid crime and get better schools etc.

Or there is just not enough volume available in Porirua... know quite a few people desperate for a new house in Aotea but there just aren't that many available right now.

Auckland median is $955k but in March 2017 it was $975k. How is this a record?

March 2017 was $900,000 according to the Median price - REINZ chart. where are you getting your figure from? Link please.

"Wait until the wage subsidy is over" they said "house prices will collapse then" they said

You must be kicking yourself that you got out prematurely mate...you said you thought house prices would drop hence why you sold. Care to own up to that faux pas?

Absolutely Albert, back in March I thought that with CV, winter & elections coming, house prices were much more likely to drop and very unlikely to rise. I was wrong! and yes I'd be happier if I still had my house and especially if I still had a big mortgage.

Who would have thought central banks would completely lose their minds huh and decide that current house price stability is more important than the future health of the economy. I underestimated how selfish we've become as a society. Lesson noted...

I am in the same boat Yvil. Now looking to dive back in because we are racing again so can't stay out too much longer and now have the added pain of the bank making me jump through hoops to get a loan even though I have a substantial deposit - prick bankers

Albert
At times you take your gain to ensure it.
While Yvil clearly hasn’t sold at the peak, from memory he posted that he made significant capital gain - with the uncertainty that existed, to walk away happy is the sign of someone astute, prudent, and content.
From what I understand the house was in Auckland and he is living elsewhere so not his home.

P8, I also saw it as a form of deleveraging (should it really go downhill) as I still own other properties

Wage subsidies ended on 1st Sept (meaning people still got their paychecks), mortgage deferrals are still on. Also, neither will have immediate effects. Most people can get by for a few months after losing their income. But I'm sure you know this and just wanted to troll a bit.

Jester!
I see that the Auckland HPI indicates that $1.5m house you have been turning down is up 2.4% last month ($36,000) and last year up 11.4% ($171,000). Ouch.
As for end of job subsidies; vast majority of these are expected to be in tourism, hospitality and retailing - all lowly paid renters and not homeowners.
Not to worry, you hang in there.
Cheers :) :)

You keep contradicting yourself... Last time you said FHB's shouldn't care about short-term price fluctuations. Make up your mind.

Jester
Obviously need to spell it out.
Not to be concerned about short term fluctuations once have a home . . . those who hold off waiting are simply going to get further behind.
Past year Auckland up 11% - short term fall of 5% irrelevant to FHB.
Pretty basic really: let me know if you need me to spell it out further . . . . but there again some times things are sadly a wasted effort.
Cheers. :)

How do you know we don't do a Japan from here? They've had falling house prices for 30 years now haven't they?

Imagine if someone buys and prices fall and they fall for 30 years. They say that silly bugger p8 told me that I was going to get further behind by holding off buying. Yet if I waited, I could have got my house for hundreds of thousands of dollars less!

You see whats happened in Perth the last 10 years?

You crystal balling again?

Very tough for the bargain hunters now unfortunately
With living wages and minimum wages pushing up this election cycle, as well as potential negative OCR and FLP it looks like there could be a bit more of these headlines for a while
FHB should try and find value-add properties(landscaping, painting, elbow grease work) and or longterm, like add minor dwelling unit, garage/workshop/sleepout
Fit inside Heartlands 1.99% criteria ideally...

Or a caravan in the backyard of their parents place....or a cardboard box...

That house rocketing into the sky, doesn't have landing wheels, it has to be a crash landing, only option.

We are now driving a new Japanese car at 5000 revs. We do not know if it can go higher. 5000 could be the max but 6000 is possible, maybe. We don't know. But it defies logic to think it could go past 6000 without blowing up. With a house price to household income of 10 in Akld we are at 5000 revs.

Even on this chart, you can see the long term trend line that goes back 100 years (yes 100 years!) departs controlled flight around 2002. People seem to assume the rate of growth we've witnessed 2002-2020 is normal. Its not! Its very unusual! Like a massive anomaly!

If you apply the 100 year trends to NZ housing, its about 100% over priced now (i.e. a 50% fall would bring it back to its long term trend).

This is a 'new normal' of course that we're witnessing the last 18 years or so which can go on to infinitum! (yeah right!)

The whole 19th century (particularly post war) was an anomaly though. Prior to that there was almost no equality for the entirety of human history, wealth was almost always heavily concentrated, the middle class was tiny (generally consisting of a few merchants and clerics), the vast majority of people owned very little and certainly not houses! For most of recorded European history (the only places we have reasonable records for) the 700 years prior to the 19th century, the return on capital was extremely consistent and inflation/deflation was generally related only to bad weather/poor harvests, plague or extracting resources from conquered peoples/lands. So it all depends how long of a cycle you want to look at.

I don't see any particular value in looking at 1945-2002 and trying to claim that to be an example of normal, anymore than looking at 2002-2020. The post World War era had numerous incredibly unique factors. If history suggests anything it's that equality and 60+ % home ownership is the total utter anomaly. Poverty, debt bondage, serfdom, subsistence farming have been the unquestionable norm for most.

The same human nature that created a society of poverty, debt bondage, serfdom etc still exists. The only difference is that we had a weird era of easy access to cheap energy that propelled a huge technological revolution and cheaper still food production. However, that post-industrialisation cycle has had diminishing returns for some decades now. There are some countries still "developing" and maybe we will be able to eek out some more "growth" off their backs but eventually their populations will join the rest of the stagnated world.

The fact of the matter is, if we can't find the technological memes to maintain cheap food and goods production for our massive global populations then those who own land and the means of production are going to start becoming much more powerful again. It's happening already and this is a much bigger and more humanity-wide issue than the plight of the NZ FHB.

Yet another wonderful comment Ginga, can you please run for Prime Minister? I'll definitely vote for you!

The poor won't have the money to buy the expensive food so low cost producers will be vital. Young people with student debt and high house prices are putting off having children, that demographic shift has unknown outcomes. We can keep cheap food up for a long time yet, Brazil and Russia will see to that, those two countries plus Iran can keep China in food and energy. The high cost producers like us are the ones with issues.
I don't even pretend to have any idea what the future holds, whatever I think will almost certainly be wrong.

I haven't got clue either. I'm just saying to IO that we need to be careful at stating what is "normal" in terms of wealth, home ownership, poverty etc. We all suffer from recency bias and the post war era was no more "normal" than post millennium era. It might transpire that Western wealth, equality, improvements in health and life expectancy reached a peak last century and will continue slowly declining from here.

Ginger - great, I'll go and make sure my pitchfork is sharp. Anyone have a guillotine free for hire around the Dec time frame?

On a more serious note ginger - do you honestly think that we will regress that much, and given the availability of history/knowledge now, and the connectivity that oppressed people have via technology, that class structures will be allowed to strengthen once more? I find that very hard to believe. I can quickly google to see what happens at the end of any period of oppression and it usually involves the oppressor/s losing one's head. Hopefully we've evolved/transcended beyond that now, but if property owners believe otherwise, I guess history might (in the longer term) teach them some harsh lessons about how to best handle positions of privilege. They're not doing a very good job of that now. The depression/anxiety of the younger people in western society could turn into a different type of emotional manifestation in the future.

Ginger...exactly right. I feel this recency bias coupled with Akld's extraordinary property increases over the last 40 years is the main cause of so much delusion and blindness to risk on this site. Understandable when that is all they, and the people they see and speak to, have ever experienced but it can still be a little frustrating.

Ginger - Have you read the real estate section of 'Irrational Exuberance' by Robert Shiller? If not, its worth looking at - covers a lot of what you talk about above, including looking at asset price appreciation in real terms, going right back to 1870's (ish). It looks back further than Bretton Woods per your comment above.

So are you telling me that its okay then if we just pick up our pitchforks and storm the central bank then chop off Adrian Orrs head then do the same to our landlord/property owners? Is that what you're implying by saying the 20th century isn't represenative of how society is going to function into the future, but it will be more like the dark ages with serfs and property owning lords? If that is the case, lets start the revolution now shall we because that is the eventual outcome of that theory. Whose head shall we chop off first? The central banks that create the incentives, or the lords who think they have higher rights to life and liberty than the serfs? The equivalent modern serf has access to information and technology now and ability to form large coalitions/share information/thinking, so the ability of one class to oppress another is going to be very difficult to achieve if that is what you're suggesting.

I think you should pop in and have a little chat with your doctor

Haha nice troll. You have added a lot to the discussion. Thanks....

I take it you've read Robert Shillers books then? He has a nobel prize in asset pricing. Don't you buy assets like houses? You should read his books! Might be too many big words and graphs for you. Do you understand how capitalism started after the serfs revolted against lords? And that Kate is implying were heading back towards that way of structuring our society.

Perhaps read some more books before telling people they need to go to a Dr - perhaps you need to go to school?

IO, yeah i've read a couple of Shillers books and think he's bang on. I think psychology is a huge factor in economic behaviour. He doesn't discuss Evolutionary Psychology, but for me, that is also an area which will have much to teach about economic behaviour.

I'm not saying any of this is okay obviously but there have been several periods and civilisations that have peaked and then declined. Often after eras of sustained technological advances and associated globalisation of markets. Sometimes there are revolutions, but mostly the elites (with access to ample resources) manage to manipulate the masses sufficiently so that they don't revolt. And a very slow gradual decline is more akin to the frog boiling alive slowly. All the elites need to do is point at a scape goat, provide bread and circuses etc and we, the masses, dutifully buy what they are selling and look where they are pointing. Plato described this as one of the potential flaws in democracy but it happens with and without democracy. If people are literally starving and suffering yes, but the very slow decline of home ownership might not be enough to mobilise the pitch forks.

Every decade after WW2 there have been protest movements and civil disobedience of some kind, sometimes they achieve something, sometimes they don't. We all said that the internet would democratise information but the information is just manipulated and distorted. People choose what information they wish to believe according to tribal instincts. The Occupy Movement didn't bring down Wall Street, Trump didn't drain the swamp but everyone still believes wholeheartedly in their respective causes, and blaming each other whilst everything just gets progressively a bit shitter. That doesn't rule out pitch forks and Orr's severed head nailed to the Beehive but a lot of younger people seem quite focused on their meme-game and Tik-Tok views rather than revolution so i dunno.

I think there were a rare confluence of post-Imperial, post-Industrial, post-World War trauma that led the West to try and create equality for a few decades there. While those who remembered the war lived, while there was the will and resolve from those with power and influence. But I think that was an anomaly rather than the norm. Communication technology doesn't prevent inequality or corruption. Or else it wouldn't be everywhere. Equality is actually a very difficult thing to achieve because it's not necessarily in our nature to create it (Evolutionary Psychology explains this very well), I would argue that concepts like equality and humanitarianism are constructs and like other beliefs, wax and wane in status and influence. We are also very faddy about exactly who we believe is worthy of equality. Currently, there are huge divisions growing in the narratives of most western nations. The pandemic has not brought people together, it has amplified partisanship.

So I don't know what will happen but I certainly don't think there is sufficient evidence to believe that wealth equality and 60%+ home ownership is the human norm and somehow we will always build societies that create those conditions or else revolt.

Also revolutions are often quite horrific and don't achieve equality anyway. Dictatorships appear to be the most common outcome.

Appreciate the considered (and well worded response..). It always makes me wonder how and why societies/empires fall. But I guess we might get to see first hand over the coming decades. I read Dalio's most recent update the other day on the rise of China and fall of America, including the history of the other world powers the last 3-400 years. It looks like this century (and perhaps next) could well be China's. I'm not sure if this is what the average western person wants, but when you look at the way we are not working together (in all reality we are either consciously or unconsciously working against one another) in countries like America and here - I guess we will get what we deserve. There is no shared vision of who we are or what we are going to become (if you know, please tell us - hopefully not a land of rich property owners and serfs/tenants - that sounds like hell to me). The CCP appear to do so however. Perhaps that is the difference.

This bears repeating as I have said it over and over: The CCP win because they think and plan LONG term. They expect to be in power forever, so have 5/10/20/50/100 year plans. In addition, they have a weird form of meritocracy (hierarchical democracy), which helps the best people float to the top. So they have really good people executing long term plans. The public/civil service in China is nigh indistinguishable from the CCP, most are members, if you want to be promoted, you join the CCP and do well.

The West now has populists and corrupt partisans running short term plans to allow them to only get into power for the next round of elections. This is obvious here, in the US/UK/Australia etc, hell even India. They are basically corrupt, cooperating with the elite business communities to do their bidding while distracting the voting public with sideshows and lies. This is nowhere more obvious this week than in Australia with their horrific redacted budget catering mainly to large resource companies under a cloud of secrecy. This political ineptitude weakens the institutions that form the government, infecting civil/public service organisations with weak and ineffectual sycophants. The only people that win in this scenario are the big business operators, who also have long term plans. Hence most Western democracies are turning into plutocracies, run mainly by corporations who could not care one whit for social issues.

The contrast of the two should tell you who will win eventually, it's not going to be pretty for us when it comes home to roost. We could steer a better path, but our dumbed down citizens are so unaware of most of the issues, they only want to see house prices increasing to feel "richer".

Thanks blobbles - interesting thoughts. Will be interesting to see our (western) response when we realise that we're no longer the ruling power. What interests me most, is what will our response be if we're able to organise ourselves to see what is happening what have the desire to do something about it.

What happened in 2002?
Effect of China joining WTO
What happened in 2014-15: China realising huge capital flow after changing rules (which they stamped on in first half of 2017 when sales fell)
The 2004-05 and 2014-15 sale speaks will not be repeated.
This boomlet is domestically engineered and premature as not based on demographic shift.
It will peter out between Feb and March

It's not just NZ:

30/09/2020 - UK house prices rise at fastest rate since 2016, says Nationwide
https://www.theguardian.com/money/2020/sep/30/uk-house-prices-rise-at-fa...

15/09/2020 - Average Canadian house price soared 18% in past year, CREA says
https://www.cbc.ca/news/business/crea-house-price-1.5724433

18/08/2020 - (US) Housing market is still going strong and propping up the economy
https://edition.cnn.com/2020/08/18/investing/housing-market-economy-home...

10/10/2020 - Germany's house price rises continue to accelerate
https://www.globalpropertyguide.com/news-germanys-house-price-rises-cont...

19/09/2020 - Property prices continue to rise in Sweden despite the pandemic
https://www.thelocal.se/20200819/property-prices-continue-to-rise-in-swe...

On a desert island far far away , there is no food or water. Chief orr steps forward.. "I have the answer! we will eat the poor!"

Lol this country is stuffed.

The sad reality is that the majority of the population will be celebrating this...

Not the majority - a large minority - unfortunately they all vote.

...following April & May sales that were the worst by a wide margin in the past 25+ years. I'm sure that's unrelated though.

All under the skilled eye of Grant Robertson.

These nice strong gains, gives him the psychological crutch to drive on through with the Wealth Tax.

With cracking gains like this, how can anyone say no to a Wealth Tax?

No comment on the 2nd wave today Henry..or comms?

Meanwhile, in Perth, where the impacts of Covid are relatively benign and where there is an economy being supported by iron ore prices, up to 1/3 of properties are selling at a a loss (up to 50% of units). All this despite the cost of debt being removed. Just like in lil ol' Nu Zillun.

https://www.watoday.com.au/national/western-australia/perth-property-inv...

Yip I spent time in Perth before the GFC and their property market was very active/buoyant then. Looks like it peaked and has never really recovered...10+ years on and it may only get worse. So much for house prices only going in one direction.

Maybe it is land space. So much more available area?

Lots of space in America (and Spain) - didn't stop their property markets from forming a bubble and bursting.

The mining boom was pretty big in the 2000's in Perth and there were Kiwi's everywhere. Was the place to be. Now its not. Could be like Auckland in 10 years time. Everyone wants to be there now, then in 10 years time, people don't want to be.

Have a family member who purchased in Perth about 5 years ago - regrets that decision now as head could buy a much nicer house for a lot less money if he waited.

Looking at the REINZ report a bit closer we can notice a few interesting points:
- Asking price in NZ is lower than in August by 7.3% but up 11.5% on Sept 2019 (Auckland up 2.2% on Aug & up 9.5% on Sept 19)
- Stock levels (number of houses for sale) are down in all regions except Central Otago. Incredibly, despite a massive increase of new listings of +34.4% over Sept 19 in Auckland, stock levels are down 7.5%

Dear Greg,

please consider another perspective. Look at NSC sales: up 114% on last Sept
Meanwhile Papakura down 10%, Gisborne flat. Why?
12m running sales show Auckland up 13% on sales volume in 12m to end of Sept, cf 12 m earlier.
Auckland 12m series running now at 24,788 cf 21,885 in last 12m block preceding it.
For NZ excluding Auckland, picture is VERY different: 55,046 last year and only 52,827 this year.
NZ as a whole sales volume on same terms is up 1%
For NZ excl Auckland it is DOWN 4%.

Not exactly what REINZ presented is it?
Auckland investors going ballistic is not full picture of NZ property market.

Sales trend has not yet broken out of its 64 month trend and listings are falling.
The current mania is slowly abating.
Prices will continue to rise for a few. months but sales will not be so dramatic.
Auckland is not in same mania as 2015 and its sales are 20% lower than then.

Hilarious REINZ quoting Sept sales as highest since 2006.
Failing to mention that annual sales in 2006 were a TAD higher?
In Auckland in full year 2006 for example they were 32,893
Current 12m trend for Auckland is 24,788. Inconvenient that eh?
Average pcm sales in Auckland for 2003-07 were 2872 pcm.
Meanwhile, in 2015-20 (69 months) they were 2083.
So pcm sales in last 5.75 years were in fact 27% lower than in 2003-07.
With all that increase in stock and people. Quite an achievement.
What you see is what they want you to see.

As you should expect, media tricks on an audience that usually behaves like a sponge and is incapable of thinking independently.

Wow. More or less nil immigration, but record low rates, and its continuing to go mental. More lays offs. Coming (warehouse announced today), Labour sleep walking back in, with most partners calling a future wealth/land tax.

Something dosent add up. Agents I talk to agree but are making hay while the sun shines. I would as well. The only period in history that is remotely like this is the roaring 30s, just before....

Perhaps immigration as a factor has been overblown.
Perhaps by far the biggest factor is easy access to cheap debt. There's more than enough investors/ speculators in this country with insatiable appetite for property to keep the ponzi going...
It's no coincidence that the market has lifted again with lowest ever Ocr and relaxation of loan to value ratios.

I think it is blindingly obvious - and has been so all along.

I guess the housing market is making a leap of faith over the Covid-19 cliff. Two possible scenarios;
1. successfully made to the other side and continue to grow at this stupid rate, or
2. miss the other side of the cliff and crash to the bottom.
Time will tell next year.

11
up

3. Adrian Orr throws the market a parachute. A parachute made of the skin of young people.

Nice comment, gave me a laugh. Shame about my skin though.

REINZ says best Sept sales since 2006.
In Sept 2006 sales in NZ were 8737. In 2020 it was 8377. So it was not a record.
In Auckland in Sept 2006 sales were 2964 and today it was 2861.

For those struggling to understand sales increase (114% in NSC for example) imagine that for sales you have to have sellers. Why are so many selling? Because they expect to get a good price.
From mid 2017 to October 2019 they did not feel that way, so did not put house on market.
That is the providers. As to the buyers, we all know what is feeding that

REINZ said nothing about the extraordinary rise in sales in NSC (114% YoY)
Density of pop and Chinese exodus home I would say.
Plus, lots of investors buying stuff up.
Meanwhile why are sales falling in Papakura? Er.....

Auckland prices are crazy. Question: Why is anyone still buying here?

Because **THIS IS YOUR CHANCE! DON'T MISS OUT! GET ON THE LADDER NOW! PRICES ONLY GO UP!**

PRICES ONLY GO UP!** They will now as RBNZ has come out in open to bat for it and RBNZ can go to any extreme as they have a fat cheque book to issue and distribute money as have capacity to print infinite amount of money out of thin air.

Now, No two doubts about market not going up as is fueled by reserve bank and not based on fundamental.

It would be possible to buy a place in Manurewa for 550k. If you had a 20% deposit of 110k then the mortgage would be 440k which would be around $400 a week for interest and principal for a 30 year term. Get a couple of flat mates in and get them to pay your mortgage!

Auckland sales increase for Sept (all prices): 53% compared to Sept 19
By price bracket:

$2m + = 303% (252 v 83)
$1.5m - 2m: = 252% (293 v 116)
$1m - 1.5m = 80% (771 v 428)
800k - 1m = 28% (589 v 459)
650 - 800k = 11% (468 v 422)

Not much for FHB there? Beware of averages

FHB need to be looking in the $800k+ range, have needed to for a while if you want a House (not a unit or apartment) in Auckland, ie north of Takanini or south of Torbay.

For our price focussed folk:
Auckland median in march 2017 was $900k
Sept 2020 it is $955k.
Up 6.1% in 3.5 years
Gives you rise of 1.69% pa.
Inflation is more than that.

More than low interest rate (already setoff of by rising house price) it is removal of LVR for investors that helped in pushing FOMO to a level : 'Either now or will be Never' and it is this fear that has triggered buying anything anywhere at any price.

Euphoria is at peak and need one catalyst to change the sentiment and in this uncertain period, probability of that catalyst is high (Only thing that may delay is more money and stimulus, which I think will come to cover their own undoing/expirement).

Thats just orwellian double speak for 'there is a bubble'
Poor logic mike...

What ru on about
It is not a bubble and neither have I ref to market as such
It is a State sponsored Ponzi however, utterly dep on repeated doses of int rate cuts and LVR holidays

Potential FHBuyers are not going to be feeling too good about this housing boom as they walk into the polling booth, promises, promises last time around.

Most of them will vote Green in that case, or TOP. Neither of those options are going to result in anything other than a continuation of a Labour (+ Greens?) govt.

They will generally still walk in and vote Red/Red as Labour saved our lives. No one with a house is thinking housing needs and poverty.

...and what a beautiful spring day at Te Rapa......and the winner of the 6th race is the exciting mare and hot favourite "Houses never Drop" owned by NZ's No. 1 property spruiker, Ashley Church, followed closely in second by a neck, in a sprint finish to the line by "Interest rates down forever" the previous Wellington Cup winner owned by Adrian Orr ....and running in a late surge for third, the powerful Australian bred 4yo "The bank always win" ...... but what a disappointment with a second to last place "Sensible House Prices" owned & trained by Mr & Mrs J Doe of Te Awamutu clearly not in the running today against this field, but with such great form in his last 5 starts with a 11321, we can only hope for a much better form at his next start at Ellerslie next Saturday....

Can I ride bucking Bindi at Ellerslie next Saturday, please?

The standard of discourse in the comments section of property articles around here is much higher while a certain someone is in exile.

Even if it is still incredibly repetitive

Repetitive as Government and reserve bank is repetitively screwing FHB on a daily basis.

Well if you think the housing market is crazy - shares especially tech are in madness mode.

Clearly there are population and housing issues that are
a) being glossed over, or simply ignored as not being 'real' issues
b) not being addressed as there is zero incentive to do so

None of the politicians want to tackle these issues meaningfully as it means major structural changes to
- Immigration policies
- Finance policies (financing limits, taxes (capital gains/ deductables), foreign cash)
- Housing policies (HNZ Rental subsidies due to selling stock of low cost housing to investors?
- Long term Infrastructure plan directly aligned to immigration policy

I was living in Japan in 1987. Everyone there thought their economy would never fail and their house prices which were astronomical would never go back. Well thirty years later and they still are not back where they were then.

Be interested to get your thoughts on NZ experiencing a lost decade or two like Japan. Did they have the same type of euphoria around property investing then as we do now?

So what is going to happen when inflation starts to rise? Normally interest rates rise to prevent this. But are the RB going to do this. Is rent included in inflation figures? Real world inflation, including housing, seems like it is going up a lot recently.

This will simply drive another qualified youth generation to Aussie. Thanks RBNZ. Next govt will have no option but to tax land and wealth. The boomers can pay for themselves.