Average housing values have increased by more than 25% over the last year in some rural districts

Average housing values have increased by more than 25% over the last year in some rural districts

The average value of all homes throughout the country has increased by $55,834 over the last 12 months.

That's an average increase of $1073.73 a week.

According to the CoreLogic House Price Index, the average value of all dwellings in this country increased from $697,204 in October last year to $753,038 in October this year, giving an annual increase of 8.0% in the average value.

The figures also suggest the rate at which property values are rising is also increasing.

Over the three months to October the national average dwelling value increased by 1.9%, up from 0.8% over the three months to September.

Of the four main centres the biggest increase in average values was in Dunedin, which had annual average value growth of 14.0%, followed by Wellington City 8.5%, Auckland 6.2% and Christchurch 5.2%.

The increase in average values tended to be greatest in smaller towns and rural districts where property prices are usually a lot cheaper than the main centres, with many of them recording double digit annual percentage growth.

The biggest increases in average values were in Gisborne, Ruapehu, Rangitikei, Horowhenua and Clutha, which all had annual increases of more than 25%.

The only district where the average value was lower in October than a year earlier was Queenstown-Lakes, where it dropped by 4.3% over the 12 months to October.

The table below gives the average value of dwellings in all districts throughput the country, and the change over three and 12 months.

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CoreLogic NZ House Price Index
October 2020
Territorial authority Average current value $ 3 month change  12 month change 
Far North 506,293 3.7% 7.9%
Whangarei 597,861 3.3% 9.6%
Kaipara 619,132 2.5% 11.3%
Auckland - Rodney 990,415 0.3% 5.9%
Rodney - Hibiscus Coast 960,350 -0.2% 5.3%
Rodney - North 1,019,069 0.7% 6.4%
Auckland - North Shore 1,251,886 0.9% 5.3%
North Shore - Coastal 1,437,877 2.1% 4.7%
North Shore - North Harbour 1,200,288 -0.7% 6.0%
North Shore - Onewa 1,014,533 0.3% 6.6%
Auckland - Waitakere 876,333 2.2% 7.8%
Auckland - City 1,286,740 2.1% 5.8%
Auckland City - Central 1,126,005 2.5% 5.2%
Auckland City - Islands 1,182,691 4.1% 7.0%
Auckland City - South 1,153,875 1.8% 6.8%
Auckland_City - East 1,613,502 2.0% 5.5%
Auckland - Manukau 953,970 0.9% 6.9%
Manukau - Central 744,793 2.2% 7.1%
Manukau - East 1,218,619 0.8% 7.2%
Manukau - North West 831,186 0.5% 6.8%
Auckland - Papakura 747,431 2.5% 6.3%
Auckland - Franklin 718,027 1.9% 6.4%
Thames Coromandel 855,348 5.7% 11.9%
Hauraki 458,388 0.0% 6.2%
Waikato 542,204 1.3% 10.2%
Matamata Piako 511,664 -2.9% 4.6%
Hamilton 649,035 2.2% 9.6%
Hamilton - Central & North West 596,766 0.8% 9.0%
Hamilton - North East 800,804 3.4% 8.4%
Hamilton - South East 604,874 1.9% 10.7%
Hamilton - South West 582,058 2.0% 10.3%
Waipa 662,899 2.5% 10.5%
South Waikato 306,858 -4.6% 16.5%
Taupo 599,416 4.8% 8.5%
Western BOP 724,607 3.6% 9.0%
Tauranga 803,447 1.2% 6.1%
Rotorua 547,771 2.0% 11.4%
Whakatane 530,066 0.7% 9.6%
Kawerau 307,147 6.1% 22.9%
Opotiki 392,378 7.1% 8.4%
Gisborne 475,128 8.8% 25.5%
Hastings 601,880 1.4% 11.3%
Napier 622,357 0.6% 10.9%
Central Hawkes Bay 420,231 -4.0% 8.7%
New Plymouth 533,239 3.8% 10.8%
Stratford 350,245 -0.1% 14.0%
South Taranaki 298,306 2.9% 16.5%
Ruapehu 276,018 -1.8% 25.9%
Whanganui 378,123 1.8% 18.5%
Rangitikei 317,364 0.8% 25.7%
Manawatu 487,127 3.6% 15.9%
Palmerston North 541,619 5.0% 15.3%
Tararua 304,610 2.3% 25.7%
Horowhenua 452,216 1.9% 16.5%
Kapiti Coast 692,450 2.6% 13.0%
Porirua 736,173 5.7% 17.2%
Upper Hutt 673,576 4.5% 15.6%
Lower Hutt 710,865 3.5% 13.3%
Wellington City 910,940 1.8% 8.5%
Wellington  City- Central & South 894,453 0.9% 7.4%
Wellington City- East 994,601 4.6% 9.8%
Wellington City- North 838,098 1.7% 9.2%
Wellington City - West 1,034,793 2.3% 9.0%
Masterton 467,147 5.0% 17.2%
Carterton 501,341 3.6% 9.2%
South Wairarapa 621,620 6.8% 13.7%
Tasman 653,057 1.1% 5.8%
Nelson 675,280 1.9% 6.7%
Marlborough 553,129 6.4% 12.8%
Buller 213,163 3.1% 3.6%
Grey 228,131 -6.4% 3.4%
Westland 280,200 -2.4% 8.6%
Hurunui 426,344 4.9% 8.0%
Waimakariri 477,727 2.7% 5.5%
Christchurch 526,062 1.3% 5.2%
Christchurch - Banks Peninsula 550,912 1.9% 4.0%
Christchurch - Central & North 613,533 0.8% 5.0%
Christchurch - East 398,218 1.5% 3.8%
Christchurch - Hills 724,210 2.2% 8.1%
Christchurch - Southwest 501,119 1.4% 5.4%
Selwyn 573,200 0.9% 2.9%
Ashburton 384,998 0.0% 6.5%
Timaru 394,160 0.6% 5.4%
MacKenzie 571,601 -4.3% 5.2%
Waimate 281,264 -0.7% 7.1%
Waitaki 379,272 5.0% 15.0%
Central Otago 600,830 1.7% 10.5%
Queenstown Lakes 1,150,718 -1.2% -4.3%
Dunedin 554,420 0.7% 14.0%
Dunedin - Central & North 565,506 0.3% 12.2%
Dunedin - Peninsular & Coastal 503,208 0.1% 12.0%
Dunedin - South 534,540 1.8% 15.4%
Dunedin - Taieri 580,225 0.3% 15.6%
Clutha 312,582 3.9% 28.5%
Southland 368,501 -2.4% 13.5%
Gore 291,610 0.3% 16.1%
Invercargill 362,380 0.1% 13.7%
       
Auckland Region 1,093,405 1.5% 6.0%
Main Urban Areas 859,484 1.8% 7.5%
Wellington Region 811,099 2.8% 11.1%
Total NZ 753,038 1.9% 8.0%

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133 Comments

In Auckland by much more and is in just last few months.

Is it just the beginning of another bull run ????

Supported by RBNZ as have promised to do anything and everything to maintain the rising house price - words of RBNZ.

So you're saying you have better data than CoreLogic?

Talking with contacts around the world in Antwerp Belgium, London and California over the last few days the house price explosion is happening in all these places including tight supply and crazy bidding up of property. If you have cash it makes sense to the degree the value of the cash is being vaporized by QE Money printing.
I don't agree with it but I may have to join in and buy a few Auckland houses (have been looking for a few weeks now) and just lock them and alarm them to diversify from the banks. No interest in being a landlord to residential tenants. But I have no interest in getting zero return for maximum risk with zero deposit guarantee. RBNZ and Orr are servicing that OBR chainsaw and are willing and ready to use it to support the debt fueled.

A stat I have also been following is rentals available in Wellington (excluding outer areas Porirua, Lower Hutt, Upper Hutt and Kapiti Coast and Wairarapa) there are 605 houses / apartments for rent. https://www.trademe.co.nz/a/property/residential/rent/wellington/wellington
I think the Wellington central and surrounding suburbs rental market has a problem

I have friends down there who cannot rent properties that are usually always rented. The lack of foreign students and lack of tourists for Air BnB looks to be impacting. Lots in the 605 have not been rented for 6 months. So it cant be all that great getting no rent for a year.....

605 is heaps. I am waiting for the new tsunami of rentals to open up in central Wellington as uni students finish up courses and move out of their boxes to fringe suburbs.

Hi Advisor,

You’ll be waiting a long time, my friend.

TTP

Yes also I think come March when the final mortgage holidays end some may have a problem.
It is spring into Summer but the amount of houses in Wellington that have come on in the last month is huge.
From a shortage to now 424 for sale in Wellington central and surrounding inner suburbs today. A lot are ex rentals.... https://www.trademe.co.nz/a/property/residential/sale/wellington/welling...
I believe trouble is brewing in Wellington central market. As speculator landlords geared up wont buy if you cant rent the houses.

There are very few places in New Zealand as popular to live in as the inner-city suburbs of Wellington.

Come late-January / February / March, long queues of people will be lining up outside dwellings that become available for rental.

Younger people, in particular, love the vibe of Central Wellington. That ain’t about to change.

TTP

Focusing on data not unsubstantiated comments.
Where are the said young people now living?
Why are there 605 houses for rent now.
405 of the 605 available are for rent for over $500 per week.
The long cues didn't happen this year in January or February?
Based on the data it doesn't make sense what you are saying? Happy to be convinced based on data otherwise.

I'm not seeing a problem in the over $600 inner city with mine at this stage
Thanks for the heads up, will keep an eye on it
Dec/Jan/Feb is queue season in Wgtn alright

I was in a queue or two in Wellington in April during lockdown when I fully expected to have the luxury of choice. Recall it was about 600 vacancies then. Not many were habitable or appropriate. Slim pickings in the capital.

Sounds a bit strange you were in queues to view rental properties during the nationwide level 4 lockdown that started 25 March to end at 11:59 pm on 27 April?

20
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Stage one of Orr's mission accomplished. Now he can aim higher, perhaps he can inflate them by $100,000 over the next year and really hit those FHB where it hurts!

Nice work Adrian! Bring on more inequality.

11
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Best wealth transfer scheme ever. Thanks Adrian Orr! Long live welfare for investors!

10
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With such overpriced poorly built homes, why wouldn't you rush out to buy one.

It's the land - not the house

I never understood why though. NZ is 202/235 for population density.

There are many reasons but the one that stands out to me is infrastructure financing. Councils are often slow to make zoning changes as they also need to build or upgrade the housing infrastructure (roads, 3-waters, etc.) in these zones.
Our local bodies have to bear these big development costs upfront (capex) using or leveraging existing rates revenue. The cost of high population growth on councils is immediate while the revenue/recovery from having more ratepayers is spread over several years.

Would it be fair to assume that NZ's rural land prices are much higher than most countries, due to financial appeal of dairy etc? This would contribute to higher residential land prices through cost of new subdivisions, etc.

RA,"That's an average increase of $1073.73 a week"

That's why you'd rush to buy one

So greed.

duh, yes it's better making money than not

Regardless of the social issues this may cause, I see. Good for you!

Yvil: not good editing your message after we have replied to it.

Regrettably, it's a dog eat dog world.

Agree - and in such carnivorous circumstances, one soon learns it’s better to eat dog than be eaten by dog.

TTP

*cannibalistic circumstances

10
up

I think a human centipede is a better metaphor for the property market.

TTP will probably need to google that.

YouTube search 'South Park human centipede cuttlefish". Vulgar but apt as a metaphor.

'An eye for an eye makes the whole world blind'.

Eating puppies can't be much fun given you're such a big dog there TTP...surely?

Read my reply to bw below.

If you're truly concerned about inequality, take a couple of homeless to live in your house, also feel free to donate 90% of what you own to the hundreds of millions who have no shelter or go hungry. Until then be careful judging others and trying to claim the moral high ground.

If you are not, you could take a shotgun and kick everyone out of their homes by force, then sale their house for a profit and make fun of them.

If you think what I just said makes no sense, it is called reductio ad absurdum which is the same form of fallacy you just used.

My wife cooks for the homeless every Thursdays and I donate to 10 charities, go ahead, write some nonsense, reference a latin quote and feel morally superior

Its interesting how gaining wealth in a morally corrupt system that reduces the quality of life for many others doesn't bring satisfaction.

Respect on the charity work though Yvil (honestly).

Not sure I understand your post but one of the things I get a lot of satisfaction from is giving people jobs (employing them), especially because I was raised in a middle class family where my parents were (very good) employees but never considered taking the risk of starting their own business and even less of employing people. Yes I admit I'm very proud if that

This is great and I am sure this makes a difference, just note charity is nothing but a patch for the failures in our society from which housing has had a great role.

I think we're coming to an agreement here. I absolutely agree that investing in property in NZ is a favoured way to make money and its not being taxed properly. I also agree that the RBNZ, continually lowering interest rates fuels the RE market and does nothing for the businesses. I just think that my duty is to look after my family best I can and property surely achieves that. If you truly want to take the moral high ground, stop complaining on Interest and do something to change the system, I will absolutely admit you're a better person than me if instead of just complaining you dedicate your life to create a more equilatarian system

I will not talk about my personal life here so please do not make personal assumptions. If what I said makes you feel in a lower moral ground that was far from being my intention but it may have to do with the fact somehow you know there is something wrong which is a good sign.

Hi b21,

Thanks - I definitely don't want to hear about your personal life, b21.

But you ought to be capable of responding to the valid issues that Yvil has raised without getting personal.

TTP

Sorry b21 but your reply is a cop out. I bare my life honestly and you judge me me for doing so. Then you reply you won't do the same.
That's your choice, fair enough but stop judging others while hiding your own life

-

You choose to publicly show a lack of solidarity so you must be open to critics. You are not the victim here but those which are pushed to low quality and overcrowded housing or even move to other regions.

Hi b21,

I suggest you take a cue from the time-honoured wisdom: "When you're in a hole; stop digging."

TTP

Not the same advice for the RBNZ though eh! Yet we almost made it all the way to China and they still be digging.

The money is not in owning property, its in selling it.

Definitely, definitely, definitely not, of all the properties I have sold over the last 25 years, not a single one is not worth considerably more today than when I sold it. The money is definitely in keeping the property, ad infinitum, not selling it

Have you had that conversation with anyone living in Japan over the same time period?

No, I live in NZ

Japan entered a period of deflation after their boom which ended late 1980's. Their central bank tried to create inflation but they couldn't. Much like what central banks are trying to do around the anglosphere/europe at the moment. Here's what happens to house prices when you can't create that inflation:

https://lh3.googleusercontent.com/proxy/H-JkRxfHXxI1d_dNZNceO23R7156_vPg...

So if you think central banks can save a market...that isn't necessarily a true statement.

I'm sure you're aware of all of the above, but perhaps it doesn't fit well with the confirmation and recency bias you have wrt the NZ housing market and RBNZ's abilities/limitations.

Princes of Yen (Richard Werner) is interesting if you haven't read or watched.

http://princesoftheyen.com/#watchthefilm

He doesn't know about the Japan experience. He might soon though

T'as oublié l'Irlande

At some point you had to sell those properties, which is exactly the point RealAgent has made. To buy in the same inflated market I must add.

Hi Real Agent,

Yet there are a mass of people who now regret having sold a property - but who did not quickly reinvest in another property.

As well as losing a bundle of money, they lose the feeling of achievement and, indeed, social status. That can be quite demoralising for them.

TTP

When this unwinds it's going to be slaughter.

There's absolutely no reason why it will unwind

Because interest rates will remain at zero until the end of human existence now?

Most likely Adrian Orr and the Reserve Bank will render young Kiwis' wages and old Kiwis' savings worthless before they allow house prices to fall. They seem to have already communicated that housing is the only subsidised and government protected investment in New Zealand - NOT a free market.

I don't understand why the government and central bank don't just buy all the houses in the country and control the supply, demand and price of them - which is what they appear to be doing but very badly. So we could just live in a total communist state, which is the direction we appear to be heading.

Is everyone ok with that?

But if the government subsidises everyone's housing not just those who got in cheap off the back of post-war generations there will be no Jones to take joy in getting ahead of off wealth transfers. Welfare for the wealthy is great; welfare for the poor is intolerable.

Perhaps we'll have land owning lords living in luxury with the remainder of society living in soviet/communist style box apartments which you get directed to when turn 18 or marry and move from the parents home (or box apartment). Two separate classes of people living in the same country. Elite rules for the land owners who happen to be the rulers/bureaucrats as well, and a slavery/communist living arrangement for the remainder.

Unless something gives, this could be the future of NZ.

No, Brock. Interest rates could well go negative.

TTP

Are you referring to real or nominal rates?

There is zero change of negative interest rates. Wont work unless you can restrict the cash supply. Good explanation here:
IMF: Cashing In: How to Make Negative Interest Rates Work
https://blogs.imf.org/2019/02/05/cashing-in-how-to-make-negative-interes...

11
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Here we have a global pandemic, global recession, tourism sector decimated, unemployment to go higher and yet we have a housing boom. Amazing, the learnings from this...Never! never-ever bet against the RBNZ.

It just blows your mind doesn't it.

It does, it shows how totally out of whack the economy is. Asset prices through the roof, wages low and will remain low as we live in a digital globalised world that supresses wage growth. House prices should have been included in CPI data, then we wouldn't be in this mess. People would then have more cash to spend in the real economy.

I'd disagree. The RBNZ took a wrong turn (bad policy) and kept on going (more bad policy) and they lack the ability to say "we got it wrong".

Absolutely correct Bugger and the RBNZ have made it quite clear they will not let the housing market fail, so the future is quite certain, for better or for worse, house prices are not going to crash.

'Bless your soul. do you really think the RBNZ is in control?'

https://www.youtube.com/watch?v=-N4jf6rtyuw

But does that make you Crazy? - Possibly.

Those people who bought a house during the last lull in the market (2017-2018) will be rubbing their hands together with glee!

They did so against the advice of the DGM - who fervently maintained that the housing market was on the brink of collapse...... What a monumental bungle!

TTP

Haha, yeah, and eff those younger Kiwis just coming out of university now! They need to realise it's all about wealth for older folk and accept the wealth transfer scheme.

Why should they? We voted for Jacinda. Isn’t she going to help us?

Mummy.

It is highly unlikely the people in charge that caused the current irrational boom, will do anything to stop it continuing. Unless they have a serious about turn, which looks increasingly unlikely, given they keep talking about "stability" etc. Stability in this case means skyrocketing house prices.

Please ignore GR's comments earlier in the year about using the crisis to reset inequality.

These comments are laughable now. But the press never presses then Government on this.
"Grant Robertson says we 'must not allow inequality to take hold in our recovery' as he outlines his vision for a 'reset' economy"
https://www.interest.co.nz/news/104552/grant-robertson-says-we-must-also...
Its all just jaw jaw.

What about Japan?

Here is the problem with Covid recession/recovery -it is driving another iteration of housing fuelled inequality. If you are a owner occupied household so on average at the higher end of income spectrum then thanks to the Reserve Bank your mortgage expenses have reduced and the value of your home has increased. Yet if you are a renting household so more likely at the lower end of the income spectrum your rents have probably increased/not decreased and the deposit required to get out of this rental trap has increased. Meaning for the rental household group their lifetime prospects are diminished.

It's pushing me to take my skills and my family to Australia as soon as is practical. Much better lifetime prospects.

Hi Brook,

What about the snakes - and all the used car salesmen?

TTP

11
up

I like snakes. It's the spiders that are the problem.

Better a used car salesman than a used house salesman.

But if you own your own home, unless that's your forever house or you plan to downside and flee to the regions, you're still buying and selling in the same market. All you've done is slightly reduced the amount you'd have to borrow to buy *the exact same house on the exact same bit of land*. If you want something different or better, you're now having to pay more for it. The actual subset of home owners this benefits is very small.

Home owners in the last year have benefited by significant falls in their mortgage interest payments -thanks to the Reserve Bank lowering the OCR in response to Covid. But because of the tight housing market - insufficient new housing supply - rents have gone up not down. So the life prospects of the home owner group has increased relative to the renting group.

Who is responsible for fixing this housing boom in the middle of a global pandemic mess and can NZ go 'hard and early' on the economic as well as the health response?
Luke Malpass from Stuff.co.nz provides the details;
"The rearrangement of the front bench signals a clear focus of the Government on the both the economic and health areas of the Covid-19 recovery. The economic rebuild in particular has been high on rhetoric to date: a definite direction of travel and broad brush strokes but thin on concrete details.
The finance ministers in the new Government are Robertson, Megan Woods and David Parker. Robertson will also become the new Minister of Infrastructure, formalising a role he had come to occupy prior to Covid-19 when he effectively took charge of the New Zealand Upgrade infrastructure and transport package. Woods is Minister for Housing, Energy and Resources as well as Science and Innovation. David Parker is Minster for Revenue, the Environment and the Attorney General. He is in charge of the extensive reforms to the Resource Management Act that Labour took to the election.
Between them the three ministers are in charge of the key levers, or choke points, on New Zealand’s economic development: finance, housing, infrastructure, the Resource Management Act and energy. How these ministers – and the policy areas they are in charge of – gel together will be crucial for the success or otherwise of the Government.
In this space they will be backed up by Stuart Nash the new Minister for Economic and Regional Development...
The other big appointment in this area is Michael Wood as Minister of Workplace Relations and Transport. He will be the minister in charge of significant unfinished business of the previous Government."

Grant Robertson on RNZ this morning clearly laying out that on - financial, infrastructure, housing and transport etc matters he is the leader of the team and he has overall oversight. So it is clear where the buck stops.
https://www.rnz.co.nz/national/programmes/morningreport/audio/2018771065...

Who gets stuck with the bill when it unwinds? I sure as hell don't feel under less stress than when I was renting. Like I say, the benefits to me are entirely academic, there is only additional burden if I need to move to a bigger house with a young family and in an unstable market. It's not more stress, but it's a different kind. The only people who are benefiting are the ones who are able to restructure to take on less debt, which gets increasingly harder.

Concur. Unless you can secure something before selling by the time you've sold even the cheaper downsizer has increased to almost the same level.

Yes exactly, if supply was allowed to equal demand, then the fall in interest rates would have very little, if any impact.

Those that have debt on their rental property have just received a reduction in service costs, and an increase in equity and rental income.

Whereas if supply was allowed to meet demand, prices would have remained stable (increasing by only inflation), rental/rental income would have been stable for both tenant and landlord, and landlords would still be better off with reduced interest rates.

But Govt. policies have allowed the landlords to take everything.

Whom to blame this time?

Maybe its own incompetency?

Clearly whoever's is pulling the strings at the RBNZ. Protect the debt at all costs seems the focus.

10
up

Heh, awesome, I think I managed to save about $30k toward a first home in the same timeframe.
Tell me more about how FHBs just need to 'save hard' to get into the market.

While it's not a lot of comfort to you, please be informed that some of the elders of this nation are aware and not happy about the consequences of what is happening

It's totally unfair to aspiring FHB, I sympathise for your situation

Maybe you should just lay off the smashed avo and new iPhones, then you'll be able to afford a house

> giving an annual increase of 8.0% in the average value

So only slightly above-par, then, according to the received wisdom which promises us all a doubling in the value of our homes every 10 years.

Just to confirm that average household income dropped over the same period? And it requires wages to pay for houses, yet they are becoming more expensive?

Tbf there is total confusion around and between the price of a house and the cost of a mortgage and the affordability of housing.

To try and rationalise the absurdity of the situation, vested interest like to look at mortgage payment affordability at current interest rates and apply them over 30 years while assuming everyone either has or can immediately produce a deposit. That is instead of factoring in wage increases, time to save a deposit at these new low interest rates, costs of renting while attempting to save the deposit for said house, the risk of interest rate rises in periods of inflation/deflation over a 30 year mortgage term.

Want to see some twisted logic? Here it is!

Property Investors Federation's executive officer Sharon Cullwick argued while property investors may not be helping the housing supply problem, they aren't hindering it.
But she said first home buyers are when it comes to purchasing rentals off the market.
"If a first home buyer purchases a property that was a rental property, then you'll need another house to house the extra people living in that rental house."
"So every time a first home buyer buys a house....it actually makes the housing crisis worse," she said.

https://www.stuff.co.nz/life-style/homed/real-estate/300148266/house-hun...

bw, at what stage will you admit that your long standing advice to sell houses because they will "deflate" in value was wrong?

I don't think home owners should get cocky. I purchased recently and a possible crash is still in the back of my mind in 2021. The problem I think is now that its a boom again, any correction could just see it back down to where it is currently so who cares ? Its a calculated risk I am in a position to take and after all you need a place to live and you cannot put your whole life on hold waiting for a property crash, which by my calculation made after the RBNZ who is openly prepared to pump the market no matter what is heading to very low odds.

Based on previous market crashes (historically and all around the world) a common theme is that it (a crash) happens when people start believing that particular market is bullet proof.

Answer: If the 'new' Government fails to address the issue, NOW!, I'll unhappily write that "I was mistaken" - ok, wrong!
The irony being, as I've written all along, as a Nation we are all worse off with more debt rather than less, yet we think we are wealthier the higher property prices go without commensurate productivity rises ( wages rises in other words, born of a more efficient economy).
I don't just write, I actually do, and, as I've also written the secret to personal success, is being able to survive 'being wrong'.
Should I have chosen to Upgrade instead of Downgrade into one home in anticipation of what might happen? Could be! But if I am proven wrong ( in not that many weeks from here!) then because I don't have any net debt I actually will be a revaluation winner from being wrong. Just not as much as I could have been. What will I do with all the stored debt capacity that I've been running? Buy property? Nope. Repay it instead of applying it to a more efficient economy.
Time, and not much more of it, will tell!

Yvil..I sold a few Akld properties (totally out of choice) over 5 years ago and still feel it is fairly likely I will have the last laugh. If wage inflation remains low and median Akld sales price is 7 figures in 2025 I will admit I was a little overly cautious.

None of us ever think what we do is wrong, at least not right away. Otherwise we would not be able to sleep at night so we find the lamest and most stupid excuses that let us live with ourselves. This is a textbook case.

Wow Sharon. Or was that Karen.

Unfortunately due to all of the mad rules to be able to develop property we are now in a real hole with a dearth of properties available to buy creating a tight market for buyers. For all of those people who thought Labour would be a panacea and change the Country and it's housing market issues, they were fooled and will now realise that at the end of the day it comes back to basic economics, supply and demand. We simply cannot build enough properties to cater for everyone with ridiculous planning rules. No tax nor government intervention can change what is happening, only getting rid of red tape will have an effect.

Demand could be killed with the stroke of an LVR pen.

Imagine if we didn't have all these investors competing with FHB's to buy houses. It would appear that a massive amount of demand would disappear from the market overnight! Wow, supply and demand in balance.

Well the Government could intervene by turning the immigration tap off for about, I don't know, maybe 3 years , that should do the trick then we should have no supply issues.
I'm amazed that immigration is never talked about by the Government, why, are they too scared they step on god knows whose toes. I don't know anyone who actively wants more people here except the Government for whatever reason. The whole situation baffles me. I would much rather we had a referendum on immigration than bloody weed.

Or if we didn't have investors competing with FHB's to buy the same house (and its the investors 5th, 10th, 20th...property).

I say that investors should only be given new debt for new builds if they want to invest in residential property. See what happens to the market then.

Get them to solve the problem they've helped create - but of course they don't want to solve the problem as its in their financial best interest to make it worse (its their dirty little secret).

I hear ya IO. I like the idea of only new debt for new builds. Not sure how well that would go down though. I guess there are a number of things that could be done around the investor scenario. They just seem to bleat the loudest so the Government listens. As I said above, the whole situation baffles me when it doesn't really seem that hard to fix. Look at all the great ideas people put forward here. No one who needs to listen is I guess.

Read Shiller's book 'Irrational Exuberance' or 'Animal Spirits' and you realise people aren't rational when they work in groups or deal with money. I'm not that baffled, people just become collectively stupid at the same time and you end up with things like the NZ property market.

So simple. Turn off immigration for 3 years, except for teachers and other educators that can train NZers to do the jobs we don’t know how to do. Turn off investing in property as well. Start making more building materials here and reduce the hoops one has to go through to build a house. Free up some land to build on. Hopefully we have more builders being trained up now. Stimulate economy by upgrading infrastructure and build for the future. How about a network of charging stations up and down the country? Make a deal with EV manufacturer to get bulk EV cars here. Way better use of money than putting it in to housing assets...

Njay.. you made a typo. I think you meant 30 years not 3 years.

Yesterday Monday 2/11 280 dwellings newly listed for rent in greater Auckland area on Trademe. Is that normal?
Are investors missing the tenant piece of the property Ponzi puzzle?

I agree. I’ve noticed that rent in Wellington for a room has dropped and there are more options available.

So the property market is going gangbusters and finally most posters finally recognise this (some dismissed the early auction indicators).
What is now of importance to both FHB and investors is where - with substantive reasoning - is it going to be heading in the short and medium futures.
My view - some further upside and then - possibly for some time - flattening with even some downside.
My rationale:
Current rates of increases are unsustainable - pretty basic really.
In the short term (probably until Christmas at least depending on RBNZ and NZ Covid) the market will be carried forward by the current momentum as every man and his dog now know the market is hot and this aided by FOMO.
I see RBNZ being a little more conservative regards FLP and OCR cut rhetoric as the NZ economy is going better than expected, and reading between the lines, Robertson’s fanfare meeting with RBNZ is clearly about somewhat cooling the market for economic stability risks and social (homeownership) reasons.
I feel likely that RBNZ will be mentioning LVRs a little more and we could well see these if the market continues as currently.
As to the influence of Covid, we seemingly have effective systems in place and while there is still risk of an uncontrolled outbreak this seems less likely. Covid is going to be an ongoing international issue with little likelihood of control until well after a vaccine is widely available. However the NZ economy with largely closed borders has adapted fairly well. Yes, international tourism has been hit but domestic tourism has taken up some of the slack. (I’m currently spending three weeks in the top of the South Is kayaking in the Sounds, walking the Abel Tasman and Nelson Lakes - most operators are seemingly somewhat affected but positive without having to offer bargain basement deals.
So the current Covid economic situation is the new norm - unemployment may be up but still well, well below 10%. There will be some businesses that will go under but they will have been questionable anyway or have failed to adapt.
So housing market largely dependent on RBNZ action and if FLP this year and OCR cuts next year are not needed in terms of housing and if acted upon these will be with reintroduction of LVRs.
Likelihood of a collapse in the market - RBNZ will be acting to prevent this or all actions over past 8 months wasted.
So the implications for FHB - they need to remember it is firstly about a home. Longer term I think there may be some flatness or minor fall but these are irrelevant provided one has job and income security and it appears that banks aren’t risking lending if this is not the case. While overseas travel is not a current temptation I would be putting off those unnecessary home renovations and new car and be prudent in paying down the mortgage as much as possible - banks will be more understanding if the unexpected does occur.
For investors, well it has always been about yield in the short to medium terms and nothing has changed. Longer term there is likely to be some capital gain but nothing like the past decade for sometime- and capital gain was all simply about a windfall when selling. With the current housing shortage I don’t see an oversupply of rentals other than some niche markets - foreign students and overseas hospitality workers - and any increase in unemployed are still going to need accommodation albeit with an accommodation supplement.
Given the current situation- that’s my thoughts.

You could be a bank economist.

You'll be mad or have large vested interest to stop this feel good prudent economic measures surely. By all calcs, the RBNZ should go early and hard into negative OCR for sure, the LVR should never see another daylight here in NZ - they're really just envious curbing way of investors activity, something that we really need right now, they're an independent housing providers, as clearly govt are all shy away from. Therefore, the only best assurances right now is for RBNZ announcing the earlier sign of more QEs/LSAP, backup by detailed but more funds backup within FLPs scheme. Imagine our two plane jet engine, one side about to stall, well? do you toned down the other clearly healthy engine? simple, NOPE, use it to the max!

First comment from me in some time. I see there are still people who don’t think NZ housing is in a bubble, even with prices going up in a recession. Good luck with that.

Username checks out.

This is simply not large & quick enough, in absence of govt. intervention/regulatory measures.. the best RBNZ should do right now? is to stay the course BUT with more massive, shock & awe stimulus packages. More printing money, more helicopter money, more wage subsidy/continual by govt. (with RBNZ hand out numbers), RBNZ must go quickly into double digits negative OCR, quadruple formal announcement of QEs/LSAP then FLPs, and with all this? It shall give more Kiwis assurances into their future prospect to live here in NZ, we're in the lead role here worldwide. We shall not loose focus, the more, quick, large stimulus are needed. We are running hot envy of others, even more now by the Australians. Kia Kaha Kiwis, march on!

Are you legitimately dumb enough to believe what you've just written or is this and all your other comments in the same vein just some attempt at trolling?

You failed the sarcasm comprehension test

The Homes.co new valuations are out today. As usual the general trend is upward but not everywhere in home town Nelson / Tasman is equal. One block of flats in Tahunanui went up 9% in one month to $905000 but a house and income central Richmond actually dropped a little bit. As a generalization rentals are bringing in gross of 5% but there are still huge variations across the town and from one end of the street to the other. My foreign contacts even as far away as Russia are experiencing the same thing. The world might be mad but we are not stupid.

What goes up, must come down. Seems like most kiwis are becoming relaxed about the housing market and truly believing it is bulletproof . That is exactly when it will crash when you least expect it . Don’t think it’s not possible. Why else does RBNZ and government do everything they can to help housing market? They know it’s at risk of crashing . No matter what they do, eventually it will catch up. Think about all the first home buyers that took on huge debts, what happens when one of them can’t work? They are so maxed in debt that there’s no room for leeway . Think about mortgage holidays ending in March, government getting rid of RMA, new properties being built by record numbers, no immigration due to boarder closures , unemployment that will go up, who knows what tax greens will request to replace wealth tax , Winston is not there anymore to stop it this time. So much could happen also eventually the younger generation will not put up with this, they will demand change

It just goes quiet. Some of the names here, you never hear from again. All that debate, all the words and wisdoms and boasts recede into the past as new immediate realities take precedent.

Latest vid on DFA site:
https://youtu.be/vyxcuLCNwsE

At 14.10 Edwin mentions his Chinese speaking colleagues are seeing NZ Chinese property investors chatter indicating they are pulling out of NZ and looking at SYD because have had strong growth in value but NZ not expected to recover as well as Oz - looking for home and land type properties, a lot heading to Blue Mountains for houses around $500k. Wanting to move before Xmas so settled before more possible lockdowns.
Edwin says "To get Chinese investors to sell their properties is very hard." (so they have given some serious thought to this move).

Buy to let has many more lending rules in the UK - We need this, 25% deposit, income needs to be 30% greater than mortgage repayments (io) and 18% CGT. NZ does often follow UK financial regs.... https://www.moneyadviceservice.org.uk/en/articles/buy-to-let-mortgages#:....

I'm surprised with the recent voting number for Cannabis Sativa, imagine the profit from it, but alas like Alcohol, Nicotine, & Gambling, this addiction to frontal lobe good feel are all subject for taxation. So? even kids can see what else left out there in the profit taking market with little regulation or taxation and carry massive herd risk to the point that any governance will have to bail out should be the very unlikely event of emergency happening.

New Zealand’s economy is doomed.

I have heard a number of times now, people in their thirties saying they will never buy a house - it is beyond their reach now. Although even years ago it seemed impossible to save any money from low wages, there wasn't this expression about never going to (be able to) own a house or even simple box that one can live in. This is a new submission ... it's a worry.