sign uplog in
Want to go ad-free? Find out how, here.

CoreLogic's House Price Index shows housing values are continuing to rise but the rate of increase has slowed

CoreLogic's House Price Index shows housing values are continuing to rise but the rate of increase has slowed

Average dwelling values around New Zealand continued to increase in March, although the rate of increase slowed slightly.

According to the CoreLogic House Price Index, the average national dwelling value was $845,491, based on sales over the three months to the end of March. That's up from $827,426 in February, based on sales over the three months to February.

However the three month increase dropped from 7.6% in February to 7.2% in March, suggesting the rate at which property values around the country are increasing has started to slow.

Over the 12 months to March, average residential dwelling values throughout NZ increased by 16.1%.

In the main centres, average values in the Auckland region increased by 6.7% over the three months to March to $1,219,183, in the Wellington region they were up 8.6% to $935,575, in Christchurch they rose 6.7% to $575,721 and in Dunedin it was up 6.6% to $620,990.

The most expensive district for housing in the country was Auckland's central-eastern district, which includes suburbs such as St Heliers and Mission Bay, where the average value was $1,807,348, up 7.9% over the three months to March (see the table below for the average values in all districts).

The least expensive district in the country was Buller where the average value was $239,447, up 5.4% over the three months to March.

CoreLogic's report on the data said the prolonged period of value increases experienced provided a compelling backdrop to the Government's recent housing announcements around the way investment property would be taxed.

"This has led to a discussion on whether the cost will be passed on to tenants, via rents and also whether the change will result in investors withdrawing from the market, which could worsen the state of the rental market," the report said.

"Previous analysis has shown that tenant income acts as an anchor to rent increases, with landlords often unable to pass on increased cost to their tenants.

"Low mortgage interest rates and the phased introduction of the interest deductibility removal will also lessen the immediate impact to current investors and therefore limit any major sell-off," it said.

CoreLogic's full House Price Index commentary for March is available here.  

The comment stream on this story is now closed.

  CoreLogic House Price Index
  Three Months to March 2021
  Territorial authority Average current value $ 3 month change % 12 month change %
   
  Far North 554,000 7.5% 14.1%
  Whangarei 672,999 7.3% 19.0%
  Kaipara 696,247 10.6% 20.1%
  Auckland - Rodney 1,112,460 6.9% 14.1%
  Rodney - Hibiscus Coast 1,087,878 7.7% 14.0%
  Rodney - North 1,136,977 6.4% 14.1%
  Auckland - North Shore 1,385,394 5.7% 12.4%
  North Shore - Coastal 1,587,624 5.8% 13.0%
  North Shore - North Harbour 1,305,033 4.2% 8.2%
  North Shore - Onewa 1,141,768 6.5% 14.9%
  Auckland - Waitakere 970,876 6.4% 15.5%
  Auckland - City 1,439,312 7.2% 14.5%
  Auckland City - Central 1,211,995 4.1% 10.4%
  Auckland City - Islands 1,389,444 13.8% 20.0%
  Auckland City - South 1,313,217 7.8% 16.3%
  Auckland_City - East 1,807,348 7.9% 14.9%
  Auckland - Manukau 1,071,928 6.6% 16.2%
  Manukau - Central 842,527 7.8% 18.1%
  Manukau - East 1,379,805 7.2% 16.7%
  Manukau - North West 925,293 5.7% 15.0%
  Auckland - Papakura 831,459 7.7% 16.2%
  Auckland - Franklin 791,665 7.0% 15.2%
  Thames Coromandel 952,003 10.0% 18.1%
  Hauraki 516,352 3.1% 12.6%
  Waikato 605,312 8.4% 16.4%
  Matamata Piako 570,204 5.5% 13.1%
  Hamilton 729,243 8.1% 17.0%
  Hamilton - Central & North West 681,784 10.3% 16.9%
  Hamilton - North East 891,643 6.7% 15.3%
  Hamilton - South East 673,957 8.2% 16.6%
  Hamilton - South West 660,227 7.7% 19.9%
  Waipa 729,557 7.9% 13.9%
  South Waikato 368,473 13.5% 23.5%
  Waitomo 282,149 2.2% 15.9%
  Taupo 657,149 6.3% 17.4%
  Western BOP 815,921 7.8% 16.2%
  Tauranga 897,586 2.4% 16.2%
  Rotorua 629,224 5.6% 22.1%
  Whakatane 609,329 14.7% 19.6%
  Kawerau 361,314 11.8% 19.6%
  Opotiki 410,852 12.4% 11.1%
  Gisborne 531,180 3.3% 21.4%
  Wairoa 335,712 35.9% 18.8%
  Hastings 718,941 12.3% 24.7%
  Napier 742,475 12.5% 24.0%
  Central Hawkes Bay 484,997 11.0% 20.4%
  New Plymouth 588,364 6.1% 16.3%
  Stratford 397,247 9.7% 23.0%
  South Taranaki 357,726 13.5% 33.1%
  Ruapehu 320,316 6.5% 29.2%
  Whanganui 461,470 10.8% 29.8%
  Rangitikei 387,808 10.3% 35.9%
  Manawatu 555,483 6.2% 20.8%
  Palmerston North 632,920 8.8% 25.5%
  Tararua 376,224 25.0% 36.4%
  Horowhenua 534,001 10.2% 23.7%
  Kapiti Coast 825,590 10.7% 25.5%
  Porirua 850,067 7.9% 24.4%
  Upper Hutt 788,679 11.5% 25.7%
  Lower Hutt 823,080 9.7% 21.9%
  Wellington City 1,046,576 7.8% 17.4%
  Wellington - Central & South 1,021,107 8.0% 15.7%
  Wellington - East 1,104,960 5.6% 15.9%
  Wellington - North 970,999 8.1% 18.7%
  Wellington - West 1,209,717 8.4% 19.5%
  Masterton 561,322 8.1% 31.0%
  Carterton 614,330 15.1% 27.1%
  South Wairarapa 733,934 5.7% 29.0%
  Tasman 716,591 4.7% 13.4%
  Nelson 738,924 5.9% 12.4%
  Marlborough 613,788 6.7% 19.5%
  Kaikoura 519,490 5.2% 11.7%
  Buller 239,447 5.4% 12.7%
  Grey 274,589 11.5% 18.3%
  Westland 318,729 10.8% 17.7%
  Hurunui 457,145 4.9% 11.3%
  Waimakariri 519,781 5.0% 12.6%
  Christchurch 575,721 6.7% 11.9%
  Christchurch - Banks Peninsula 609,483 5.7% 10.9%
  Christchurch - Central & North 670,393 6.4% 11.8%
  Christchurch - East 441,320 7.5% 12.7%
  Christchurch - Hills 788,627 5.1% 12.0%
  Christchurch - Southwest 546,785 7.2% 11.7%
  Selwyn 628,534 6.5% 11.5%
  Ashburton 420,745 7.3% 13.2%
  Timaru 425,095 4.4% 9.8%
  MacKenzie 616,371 7.6% 8.0%
  Waimate 324,519 11.7% 12.7%
  Waitaki 411,474 7.1% 22.4%
  Central Otago 626,346 5.7% 6.9%
  Queenstown Lakes 1,271,532 5.4% 5.0%
  Dunedin 620,990 6.6% 15.4%
  Dunedin - Central & North 644,033 8.0% 17.3%
  Dunedin - Peninsular & Coastal 565,795 7.7% 15.2%
  Dunedin - South 594,244 5.1% 13.5%
  Dunedin - Taieri 640,714 6.3% 14.3%
  Clutha 326,304 3.6% 23.3%
  Southland 390,567 8.9% 9.7%
  Gore 339,535 17.3% 23.9%
  Invercargill 413,825 9.0% 19.3%
         
  Auckland Region 1,219,183 6.7% 14.4%
  Main Urban Areas 963,527 6.9% 15.6%
  Wellington Region 935,575 8.6% 19.9%
  Total NZ 845,491 7.2% 16.1%

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

218 Comments

The date stamp on this article is appropriate

It's core logic anyway so it only includes finalised sales. Wait for the REINZ data for the real picture.

Loosen your seatbelts, everyone, and prepare for a soft-landing.

TTP

TTP...where have you been TTP? You have obviously been out of the country for a week or so and are not up with the play on the current situation. Go back and have a look at what happened last week and how critical market fundamentals have finally changed.

Recovering from his stressful court proceedings?

another pointless comment by Mr Tim Mourdaunt

least we forget

https://www.stuff.co.nz/business/91418098/property-brokers-manawatu-and-...

Did Tim have to sell his house to pay the fines. Is that why he’s suddenly claiming he is a lowly renter now?

dago, this from Corelogic.

"According to the HPI, which is the most complete and robust measure of property value change in the market, nationwide values increased by a further 2.2% in March, which takes the annual growth rate to 16.1%, the highest rate of growth since January 2006."

Yvil
Not often I disagree with you and agree with dago, but he has a point.
REINZ data is based on sales by REA going unconditional. CoreLogic data based on LINZ property transfer registrations which is usually some 6 to 8 weeks later.
So while their “March” data seems current it relates to property transactions entered some time ago.
REINZ data both for March and April will provide a better indication.
In the meantime try reading auction data indicators - although limited and with significance issues - for a feel of what is happening current real time.

21
up

Still Jacinda Arden and Mr Orr waiting to think in May on curtailing single biggest tool used by speculators to secure cheap and easy money to fund their speculation - Interest Only Loan.

Why the wait and for wait, to give window of opportunity to ramp up as much as, just as was allowed before reinroduction of LVR in March.

17
up

Why the wait - because they are fr*cken useless and should stick to soft toy bunny rescue missions and tweeting, and hand over the reins to people who give an actual damn.

17
up

Why wait? I don’t think he is waiting, I think he is not going to do it. He needs to protect his and his friends interests first and foremost. All that huffing and puffing about government not implementing measures was always a distraction for his lack of measures. I expect him to come up with some ridiculous reason for not doing it. If the intention was no interest only from 1st May then he would have announced it already. At the rate he is going, he is going to have an angry mob of protesters demanding his resignation.

16
up

demand his resignation...

Does he care as has made enough enough friends by supporting their interest ...so.....

18
up

Under section 40 of the Reserve Bank of New Zealand Act, the Governor is appointed for a five-year term by the Minister of Finance. He was appointed on the 27th March 2018. I can’t take another 2 years of his incompetence. I am so tempted to start a petition demanding his resignation.

I'm sure many here would join your petition. Maybe we can include a few cabinet ministers in the mix as well..

Unfortunately, all the central bankers are doing the same thing. If you take out Adrian Orr, he will be replaced by someone who will continue to make deliver policies from the same playbook. They are thinking as one and acting as one.

That should not stop us from demanding a change! It is well,overdue that a strong reminder is sent to political representatives. I f you dont do anything about it, everything continues as it has. Same with comments here. They are all very well but unless a sufficiently large enough number of people say enough, i am changing what i do regardless of anyone else, then nothing changes. No matther how many comments we post here.

Whether red or blue, they all have their fucken snouts in the trough.
Only a crash will sort this out, bring it on.
I detest what this country has become. A vile cesspool of self interest and greed.

Fritz I couldn’t agree more. The country stinks of greed and poverty. Such a polar divide of haves and the ever aspiring. The gap widening and widening. The haves feasting with the politicians with their over inflated salaries and the ever aspiring being taxed for every breath to keep feeding the greed of the haves.

We assume they don't want to spark a massive crash therefore it's probably sensible to wait for some data before throwing another spanner amongst the pigeons.

It seems the pigeons barely noticed the spanner and are bobbing their heads along as vigorously as ever. A jackhammer *might* cause a ruffle. Let's do this!

10
up

I think it's a bit early to notice. I'd tend to throw the kitchen sink at the problem too but know one asked me to ensure financial stability of the country. Personally I think the sooner we can get out of this housing investment mindset and into investing time and money in productive business the better.

Financial stability also called for clamping down on overheating market 9 months ago. They really cannot afford to wait. Prices are booming by 100k in under 500k for standard 3bdrm regions. Easy to see for self on Trademe or homes.co.nz recent sales vs current asking prices and quick sales. No watch and wait required here! A slowdown could take many months.. No sell off happening therefore demand still way outstripping supply. Not until cashflow are affected will sell off occur. Could be months or years away till market slows at this rate. Hello Hong Kong level DTIs

But hey, at least older investors will benefit and surely that's more important than the good of many generations of New Zealanders!

Free education, cheap housing, non-means-tested pension, and financialising the cheap housing they got to pump it to the moon! Gotta love enjoying the wealth of both preceding and succeeding generations!

clefton twain
Pray tell me sir what is the "productive business" you refer to? If you're referring to the sharemarket, call me old-fashioned, but I thought that the sharemarket was already over-priced. So what remains than can be invested in that can be called "productive business"?

Are you implying that houses are not currently overpriced?

the Joneses
I'm not implying anything. You're doing the implying.
I'm just asking a straight-forward question: where should we invest so our investments are "productive"?

Is it really a difficult question?

Surely most people can understand that export producing businesses that are not simply selling off assets produce more, more sustainably for the New Zealand economy than simply selling the same assets to each other for more and more debt. How is living off greater and greater debt rather than producing and selling something a productive way to live?

Exactly. By burdening everyone with debt it makes it that much harder to start a business and fund the capital investment required to compete with the big overseas players. Technology is removing labour from the required inputs so production that previously went to "best cost countries" (euph) can now be done in NZ. The main obstacle is the opportunity cost of high value land.

For me the barrier was high wage cost for low skilled labour and high taxes (business and personal). My brother once said NZ is great for those who don’t feel like being productive. Live somewhere else if you want to make money, you can always retire in NZ once your have done your dash.

I suspect we have different businesses models :)

Extensive automation requires a lot of Capex. It is generally prudent to do a proof of concept using labour before scaling via automation. How have you managed to skip the initial labour component?

"My brother once said NZ is great for those who don’t feel like being productive"

Exactly - so people farming it was.

I'd especially agree with dropping company taxes significantly, and replacing some of this with an LVT. Reward productive enterprise rather than monopolising of assets.

Labour gets so little of the pie compared to what capital receives at the moment.

Reply to Rick Strauss (1.33pm): who recommends investing in "exporting producing businesses".

So let's look at two of our "star" exporting businesses as at the close of today's sharemarket:

FPH (Fisher & Paykel Healthcare): Today's closing price per share= $31.73. Morningstar's recommendation: "Sell" and fair value of only $23.00. (Overpriced by $8.73.)

ATM (a2 Milk co): Today's closing price per share= $8.42. Share price 6 months ago= over $16.00. Loss of value in 6 months=over $7.58

So we should all invest in our "productive exporting industries"........Yeah, right !!!!

I'm an engineer so productive to me means machine tools and automation.

I think the mistake many people are making is the assumption that investors are the main problem.

Merrydaze...not sure that many think investors are the main problem but most certainly (correctly) recognize investors as a big part of the problem.

dago,

And who pray might that be? The Nats? I don't think so. Their MPs are knee deep in property and did nothing to curtail the market in 9 years.

14
up

Generally, for instance from contributors here, it is acknowledged that a dampener has been applied and this will realise a fall across the board for residential properties. That in turn will make more properties more viable for FHBs. Does this then mean that the supposed wealth of NZ & NZrs is now diminished given that this has been a deliberate policy the government and/or RBNZ to create “wealth” in this manner? Then you have to ask what is this wealth worth in real terms to NZ in that it is totally internal. That is you can’t uplift a property in Mt Eden or Edendale, at whatever value, and export it. So does that then explain why we need immigration so that we bring the market here? Bloody stupid money go round then if you ask me because in that case it’s no more than a bloody big internal combustion engine that needs people instead of petrol to run it and gas coming out the other end and it ain’t taking anything anywhere. ( ps that would make a good cartoon, ed)

10
up

When the house is on fire, dampner does not help and it is important first to douse the fire before rebuilding or taking next step.

Know few, who are now into buying and selling for fast money and is possible for them as are able to get interest only loan to fund their activities, without which most will not be able to indulge in flipping.

Agree with comments from many that Government and RBNZ should look into it as emergency unless they treat it as opportunity to speculate ( again emergency for whom and opportunity to many) .

Why is government and RBNZ getting cold feet to impliment DTI and stop Interest Only Loan or have IO loan in specific case only like loss of job or an event like the pandemic.....

Seems like they made their big long awaited announcement and it's making no difference apart from some investor bleating and putting up rents. In a few months results will show prices still booming and someone somehow will have to try to shake Grant Robertson awake and prise Jacinda away from her cheese balls and toy bunnies long enough to get her attention and start the announcement about announcnemts process again

stuart...removing interest only loans next month is the one thing they must do if they are serious about levelling the playing field for FHBs and trying to reduce the number of investors in the market. It also needs to be done to ensure TD holders are not being forced to absorb additional risk on behalf of irresponsible (interest only) borrowers. If interest only loans are banned next month we will be sure that the Govt is serious and not just posturing.

Next Month !

Next month will do announcement IF anf IF YES than date for another anonuncement will be announced unless he comes up with a reason, why not to do.

Smart $&@holes, they are but cannot full in today's time and stand exposed.

May have this wrong but forcing a switch to P & I mortgage would not significantly deter. Over the first five years or so with a P & I over ninety percent of, say even monthly, repayments are interest anyway? The point being if that borrower, speculator if you like, is hell bent on buying a property doing it under P & I will not make much difference overall, and at the end of the day the reduction in principal is returned anyway in the equity.

Yes, the front end of P&I mortgages are all Interest

Not with the such low interest rates that we currently have.

true, ran 500k 20 years at 7% & 3% and for the latter you will start biting significantly into principal after 8 years, being 5 years earlier than the former.

Try again at 2.2% and it will be even quicker!

With normal interest rates, yes. With current ultra low interest rates that is no longer true. A 30 year mortgage term would see monthly payments as much as double over IO.

This is why many people here have be pointing to IO as a major risk. If house prices start to fall, and banks stop offering IO terms, people will find themselves in a situation where their payments DOUBLE overnight. When around 40% of new lending to investors is on IO terms, that creates a systemic risk. When all is said and done I believe Adrian Orr will have a lot to answer for as I believe he has been beyond negligent in managing some of these risks.

Nah, you got it the other way round. The systemic risk is deflation not I/O loans. We're nowhere at peak as the fundamentals are still strong.

Do you want to expand on that?

Everyone is saying watch and wait. But it's becoming obvious from real time observations of sales prices increasing in areas that were just below the FHB Grant cap (sales only take 1 to 2 weeks) , these houses are being pushed from 400k to 500k. Demand is massive. Leverage from people selling this category to upgrade then be used to boost the higher price brackets. Bearing in mind interest rates are still low and supply just got lower. This watch and wait approach is totally inappropriate when so much info can be gleaned from current activity

Agreed this doesn’t look to be much of a brake at all. Recall a lot of opinion that removing depreciation tax allowances would be effective. It wasn’t. For a start property investors who don’t need finance will not be affected and for those that do finance remains cheap. In either case holding onto a rental for another five years unlikely to be all that awkward. So at this point the fundamentals are hardly upended and demand is still greater than supply.

3 months to March. Not March itself. 4% drop in the Month to March 20. .

https://www.oneroof.co.nz/news/lvrs-put-brakes-on-housing-market-as-pric...

Could we get a response on this comment from the author (Greg?) cause if I glance over his his article it appears misleading. It reads like March has continued to see price rises when the reality is they are already in retreat.

Yes we know back end of 21 was ridiculous. But the breaks are on now. Stop trying to heat things up!

The vested interest in nz MSM is 80% of this housing crises.

The way I understand, March could be in retreat 4% but if January and February have seen double digit increases then the 3 month index can still be up. Devil is in the detail.

Nzdan..good point and I seem to remember last time Core Logic posted figures like this they included the previous one month change. Is it telling that this is absent from their chart this time? Probably not? Core Logic need to clarify this.

Nzdan, March not in retreat, I've read the Corelogic report, values up in all regions, here's their main point for March:

"According to the HPI, which is the most complete and robust measure of property value change in the market, nationwide values increased by a further 2.2% in March, which takes the annual growth rate to 16.1%, the highest rate of growth since January 2006."

Interesting. Understand Corelogic HPI and Oneroof-Valocity HPI are 2 different things.

I have about as much faith in these indexes as I do in the indexes used by the rbnz to measure inflation. I'm not the one coding them of course, but Too much inflation coming up? No worries, little less from basket A, little more from basket B, green smiley face check! push print!

Median down in March. Simple avg to understand. and the rules only just changed. how much of the Jan and Feb sales were driven by investment FOMO? (oh the irony! Says any FHB).

To be fair, we should be all be thanking anyone who has taken on more debt over the last few months. Thanks to your patriotic duty our economy has been thriving in the misdt of a global meltdown.

Keep an eye on medians in April. Will be interesting to see if a trend develops.

12
up

Well, any rise from here on is too much, after officaly 20% rise plus 10% rise in just one month and now again.....all in just few months.

Government is trying to target existing investors by tax changes but doing nothing to contain future speculation. Situation demands interest rates to be low but if had serious concern and intent, could have acted on interest only loan to target speculators as are mostly responsible for fast rise as take high risk for fast money and thereby adding to FOMO - domino effect.

Jacinda Arden with her performance created a buzz in hope that the show will help them to hide behind the perfomance - not realizing that buzz was just to deter her by lobbyist from taking any future meaningfull action. All that crying and shouting by so called investors, experts, economist and media was also for effect, in response to her act.

Far too logical for pollies

Front page for the Wairoa Times.

Looks like supply may be constricted in the lead up to the election ( builds started now should get ccc in months just prior to the election ).

https://www.newshub.co.nz/home/politics/2021/03/spooked-investors-develo...

12
up

Supply yes but affordable ?

New builds are selling much higher and because of building restriction removed, old house with small sections also selling like Gold.

Government in trying to solve creates more problem and the reason is that intent is missing and only do things - minimum required to provide media byte while talking / to portray that are interested and trying but reality is miles away and only playing with time to fool average Kiwi.

Ain't no property investor complaining about these increases...

FHBs should just move to Buller.

And do what exactly...did a trip down the west coast a few months ago and it was dying. Companies letting go of staff in large numbers. I guess you’d need to get a publicly funded job for security...council or school teacher.

Take it as an April fools joke...

Poe's Law.

¯\_(ツ)_/¯

clever!

.

I_O,

i was down there last week doing the West Coast Wilderness Bike Trail over 5 days. Fabulous weather, but my impression of Hokitika was that it looked frayed round the edges. However, there were lots of people on bikes and when we stayed in the hotel in Kumara, they told me that cyclists now account for 70/80% of their business. But how many of them will there be over winter? Punakaiki was very quiet.

Yeah Fox and Franz were dead - very cheap accommodation though! Its how I remember it as a child...in recent times you have to be careful crossing the road in those towns as its been so busy. This trip you could walk along it without a care in the world.

They should move out of NZ when they can. Brisbane, Adelaide and Perth are all nice cities and much more affordable than Auckland.

Unfortunately, the knee-jerk reactions by our government are already being exploited.

It certainly appears now that real estate agents are encouraging vendors to raise their prices from the 300's to the 400's. Already seen it happen on many new ad listings.

I can already see now that April's stats (when they come out in May) will be a pretty damning read. Many formerly cheap towns will probably push up another 20% and the median prices will go up even more.

Where can you even buy in the 300s? Gore???

Nice picture Greg. No need for words in the article after looking at it.

Last night Tony Alexander released his survey of investors. Yes, easy to slag off, but it is the voice of 3,700 investors and an early indication of sentiment other than MSM looking for picking stories for headlines.
Surprisingly 74% supported the Government’s announcement and in particular 80% supported the goal of supporting FHB.
The survey was only a week after the announcements so not surprising there was some strong reaction. He notes; “The results show that about 74% respondents plan raising rents more than they were planning, 32% plan not buying property they were considering buying, while 25% are considering selling what they have”.
The stages of reacting to change are reaction, consideration and then learning to adapt and live with it so we are likely to be in that first stage and reality may be different .
He also notes: “these are early days . . . and we should perhaps heed the lesson of the last big shock to the housing market exactly a year ago which produced an outcome vastly different from expectations at the time”.
Will be interesting to see how things do pan out regards both house prices and rents.

13
up

3,700 prudent, professional investors that provide value to their tenants were surveyed.

The bleating noise all over social media is from the slumlord cohort who have likely overleveraged on expecting capital gains.

Hi Printer8 - I like how Tony does these surveys to get a feel what peoples reactions are.
I've moved yesterday and raised my rents that had not moved for 4 years anyway.
If the Government think rent controls are the answer they will have lost control of the economy and take us back to the Muldoon era were regulation and taxation brought NZ to it's knees !

Shoreman..Tony's newsletters have a lot in common with those Watchtower booklets handed out by the J Dubs. And to think there are some who even actually pay for them. The number of subscribers he has is a reflection of how so many people like to hear what they want to hear. I guess at least we are not awakened at 9am on a Sunday morning with a copy of Tony's View being pushed in our face.
Did you know Tony was a DGM in the late 80s/ early 90s? Back then as a very young, ignorant, less confident property investor his DGM views used to concern me greatly as I was under the (false) impression that economists really were experts and knew what they were talking about. His pessimistic views nearly caused me to play safe and not go all in on property. However, I decided to place more faith in the market fundamentals than in "Tony's View" and took the opposite side to him. I was almost completely financially illiterate back then and it did concern me greatly that a person whom I considered an expert was taking the other side of a gamble ie choosing not to invest in property.
Now in 2021, I consider myself financially knowledgeable and am very confident in my risk analysis, largely based on results and extensive study. I have swapped places with Tony in that now he is all in on property and I have become a DGM based on the many market fundamentals that are there for all to see. The only other big change for me is that instead of worrying why Tony is taking the other side of the gamble is that I am now confident enough in my own abilities to (arrogantly) laugh at "Tony's View" and wonder if he really does believe some of the claptrap that he writes or he is just earning his salary, something I have not need to do since my 20s (35 years) due to being on the right side of financial gambles far more often that Tony. But like those Watchtower booklets (or any other religious rot) if Tony's View helps you feel good about things there is no harm (well not too much) in reading it. Just do yourself a favour and ask yourself why a good number of very the very best risk analysts (with excellent track records) such as Bob Jones and John Key are extremely worried about the future of the NZ property market.

That's rubbish Karl, T Alexander predicts prices to fall, so your whole argument of him being a bull is void. He provides the most in-depth analysis one can get in NZ about the state of Real Estate.

Yvil....Can you be a bit more specific about Tony's current predictions? My guess is he is predicting a smallish short-term decline and qualifying it with (spruiking) comments along the lines of but this will not be long-lasting and property will still be a great investment over the long term. Pretty close?
In depth analysis could be provided even by a monkey who was prepared to put in the time. It is the quality of the analysis that, importantly, includes the numerous factors absent from his analysis. The (in)accuracy of past predictions is also a telling fact. Around 1990 he said he would prefer to rent rather than buy, last year he predicted at least double digit (short term) drops. Three years ago he stated around 100 000 investment properties would be sold due to the (fair) implementation of ring fencing. I could go on and on. As I said, as with religion, if it gives you comfort to believe then go right ahead. Tony may be a bull but it is more likely that he is just saying what he needs to say to earn a buck. I am very glad that I do not have the need to prostitute myself in a similar manner.

He also provides special mortgage rates to all attendees in one of his conferences, sound financial advice if you ask me.

Yvil....FYI, Tony today. "none of the factors that could cause a severe correction are present".

All hail Lord Tony! God of Property!!!

J dubs have higher chance probability of bring right. And more chance of getting into heaven than you-know-who

dago...IMO they all have about the same chance; slim to none. FYI the JW religion is something new that was only made up about 150 years ago but has worked hard to become one of most toxic religions around. I suggest a google search on it. A victim of a peodo needs to have at least one witness before a complaint can be accepted. WTF.

We've been in the Muldoon Era for the last decade plus. Muldoon played favourites and subsidised and protected a favoured set of investors, farmers.

We've been subsidising and protecting a different set of investors this time around, but the Muldoonism's been there for them just the same. The market would look a lot different with a bit more freedom, price discovery, and less in welfare subsidies.

Careful P8, you should know Tony's research is for the subscribed reader only.

You can copy without permission from an original if it is for:

  • Criticism or review
  • Reporting current events

copyright exceptions

I agree though, be careful not to use subscriber only content

Yvil
TA’s “Premium View” is recipient only and labelled as such. His regular reports and survey results don’t carry that labelling so no issues there in sharing and he seems supportive of that for the publicity benefits.
JAO’s comment above indicates that referring to information related to current events is not breach of copyright so it seems fair on a couple of grounds.
Of the half dozen reports I have paid subscriptions to, I rate TAs second best for information and value.
First for information and value? Intrest.co.
That should keep everyone happy.

Yvil...Good point. It is akin to giving surveys to inmates and then using the data collected to draw conclusions as to the food, cell conditions etc inside a prison; something that, incidentally, Kelvin Davidson would probably advocate for.

Surprisingly 74% supported the Government’s announcement and in particular 80% supported the goal of supporting FHB.

So why, if the majority of investors support the governments initiatives, are the industry body spokespeople so loudly and widely criticising them? Why are all the voices that get amplified in the media scream that these changes are "bad"?

I'm not familiar with demographics of Tony Alexanders survey? Can anyone shed more light on why the reaction from the survey is at odds with the media narrative?

I think some of the cause may be in your last sentence; sample size of TA's survey counter-MSM-narrative - 3k+; MSM-narrative sample size - reporter's long-on-debt short-on-experience mate and/or Mum.

Have you had a look at NZME on the companies office....

Maybe form your own opinion after doing so I’d suggest

You expecting everyone to have the same opinion?

I've been seeing a lot of houses that I have been following put straight up for rental. These aren't lower quartile houses either, more $1.3-1.5mil range. Seems everyone is just drawing down on any bank deposits, taking on a mortgage and dumping it into property regardless of the numbers.

Why not, as 1.3 million house with 20% deposit will require approx $500 to $550 per week by using Interest Only Loan .

Tool to add fuel to existing fire. And the way prices are going up in few months will give Capital Gain - fast and easy if can manage and that too risk free as both Mr Orr and Jacinda has made it clear that come what may they will not let the house price fall (Brainwash by vested biased Bureaucrats into believing that economy is one way street - up)

What do you expect when you print money (or if you prefer the more vogue name, Quantitative Easing). In an economic territory with its own currency, the value of everything (well almost) equals the total money (and I mean broad money including all debt) in circulation. Money Supply=goods and Services * Price+ capital assets* Price
Now, if you double the Money Supply, either the quantity of the goods and services and assets must increase to absorb it, their price must increase to bring a new equilibrium or a combination of both. In western world, people already max at consuming "goods and services" so it is unlikely that their quantity will increase. Even if there is additional demand for them a lot of goods are now manufactured by China who easily increase its production to meet the surge in demand. Thus the increase in consumption does not affect its price.
The only place the new printed money can realistically go to is into what cannot be imported: that would be property, shares etc.
In 60s and 70s, when protectionism was the norm, and there was no Asia to simply hoover up any demand, increase in money supply always increased the price of consumer goods (as their quantity was not going to increase due to monopoly of local suppliers). We are now having a similar phenomenon however it manifests itself in asset prices for reasons explained

In other words - houses aren't going up in value at all, fiat is going down.

This should be repeated ad nauseum so people understand that if you work for Fiat they are gutting your purchasing power for everything investable. Good news is vapes and Netflix is cheap. And the "vaccine" is free.

Mike...When $100M and $1.9B have the same effect eh.

I used to do a bit of drag racing back in my younger years, and the current (well, until 27/03...) market feels a lot like one run in particular. I had a blinding launch and was well out in front, it was one of those runs where everything just came together. Then near the top end the steering wheel went very wobbly, and what was exciting turned into an almost-literal brown trouser moment. Thankfully it held together long enough for me to bring it to a halt.

I'm firmly of the opinion our rental property in Wellington is only worth its 2018 RV, not the 50% greater value currently estimated by Property Value. It's reached the point where we're afraid to ever sell it in case I'm recalled to Wellington, or our children decide they want to live there, and we couldn't afford to buy back in. And I'm on a very solid income.

Perhaps even scarier is I just ran a "how much could you borrow" calculator at one of the major banks and it said they'd possibly lend me well over double the RV (on a single income, with multiple dependents). Utter madness, I'd be crying myself to sleep each night.

PS: ALWAYS triple-check your wheel nuts after changing wheels.

Most of the property value websites are......in short cannot be trusted.

If only they were accurate - they've been underestimating values vs sale prices in the area for years. It's horrifying.

I expect border reopening will normalise supply/demand and then we'll really see how high prices can go.

We are a long way from opening the borders and won't be going back to pre-COVID numbers.

do you think -- after vaccinations are done - 4 months- there will be no keeping the border closed and the pent up demand will rush in over the next few months -- we cant all be vaccinated - or have the option of vaccination and still keep the border closed no matter waht princess and the frog think --

Vaccinations are 95% effective, but not the silver bullet. There's no evidence it prevents transmission. What about a new strain???

So we open the borders, insist on everyone handing over their Pre-Departure tests printed on the same letter head as their university degrees and then we end up with a community outbreak. What happens?

We can't keep the borders closed indefinitely though. If vaccinations aren't good enough then what is?

Not closed. But severely bottlenecked due to ongoing isolation requirements.

severely bottlenecked cant hold indefinitely ...
businesses/govts/councils/producers rely on economies to scale

So we export valuable product, and we don't import tourists?

Opening the borders will not see things return to normal, especially with people coming and going from China, more particularly, Hong Kong, it is my guess the Chinese govt is not going to allow free travel to the extent they did before, as they tighten their totalitarian grip.

There are studies based in the UK (Scotland) and Israel, that are currently being peer reviewed, that seem to indicate that transmission is reduced. Quarantine measures where only ever going to offer a temporary reprieve, New Zealand will need to normalise its border arrangements.

"New Zealand will need to normalise its border arrangements". The thing is Squishy we live in the "new normal" now, things have changed. What was considered normal pre covid is now irrelevant.

Hard to say regarding opening. The latest info regarding the effectiveness of the Pfivser Vaccine on the South Africa varient is that it is "moderately less effective" whatever that means.
https://www.eurekalert.org/pub_releases/2021-03/aabu-pv032221.php

I think we are only one variant away from being in a position where we have to stay shut till 2023 due to a new variant which more or less defeats the pfiver vaccine. It will then take a year in a half to develop, manufacture & distribute this new vaccine for this new variant. Which gets us to mid 2023
Touch & go as to how it will play out.

I think a lot of young kiwis will be wanting to escape this bullshit when borders open.

Out of the frying pan into the fire.

Interest, maybe you should change your motto from:

"Helping readers make financial decisions"
to
"Helping readers complain and whinge"

best not live in a glasshouse then!

Do you frequent the FB property investor pages? It’s doom and gloom (and whinge) over there these days as well. Must just be all of society have turned into DGM whingers.

Average Kiwi and FHB are being screwed and raising concern for them is complaining and whinge.

If you are pointing that should do much more than complaining....take to road.....that time too, is not far away with the way political bosses are behaving.

Wait and Watch.

Wait and watch (and complain) is what all the would be FHBs are doing. 100% of the FHBs who bought have watched and acted. Maybe you want to consider the second option?

Don't wait, don't watch and now complain is all the recent investors are doing. 100% of the investors who bought have jumped in. Perhaps they want to reconsider their choices?

10
up

Do not insult FHB for if they are not able buy is not because they do not want But because they cannot afford to pull another $300000 in a year to top up and buy.

$18000 rise in a month...check with FHB, how big that amount is for them. Every rise is adding nail to the coffin of FHB.

Difference between not wanting to eat as dieting or for any number of reason AND unable to eat as cannot afford. Both not eating but their is a vast difference.

I do not want to insult genuine FHBs at all and I agree the situation is very tough for them. I welcome the latest move by the government to tilt the balance away from investors and towards FHB's. What I condemn on this site is the multitude of negative comments that complain and predict house price drops/crashes. These comments have been made for many years by ignorant people who should not give advice and they have costed the genuine FHB's who listened to them many $ 100'000s

10
up

So how do you think of somebody who is in their early 20's Yvil. What wise words do you have for them? They weren't in a position to buy before covid. And now they're going to be in an even worse position to buy. Yet none of this is their fault, nor the advice that they may have or may not have received by property bulls or bears has made any difference at all to them. The market has simply moved upwards beyond what they will be able to save for. It doesn't matter what anyone has said or done, the maths means that the outcome of the last 12 months has severely screwed a lot of people - mostly those in their 20's and 30's trying to pay down student loan debt, pay a darklords rising rent demands, and save a deposit (while thinking about how to get married and start a family).

Who has screwed them? Primarily the reserve bank - a state run entity.

Yvil doesn't give a shit. He's another parasite immigrant who has done jack for our economy. Far too many of them.
They have ruined our country.
Sorry , I am drunk and angry. But that doesn't mean I am wrong.
I am right.
And I will be censored.
Don't give a shit.

Honestly, I was almost about to ask if you were drunk and then I saw this comment. Lol!

Yvil...could you tell us what you think SHOULD happen with interest only loans and why please? Genuine question as I am interested in your thoughts.

He doesn't give a shit.
He's yet another self interested property parasite.

Dont be like Fritz. Whine and whinge, then label immigrants as parasitic. Im an immigrant, represented NZ in sport, pay more than 98% of private individuals in tax and take nothing from the state. Zero interaction with the judicial system. Country needs more like me and less whiners and deadbeats wanting handouts. Get a 2nd job, get ahead. Dont be like Fritz.

17
up

Thank you. As a wannabe FHB I get riled up by the likes of Yvil who blame us for not getting into the market.
I think they're either trolling, or don't understand what normal wages are for people who have to actually work (and pay rent).
It's the kind of 'let them eat cake' attitude that is going to surprise the entitled with the force of its backlash, if things don't start changing soon.

18
up

It shocks me the level of selfishness and ignorance that is prevailing here in little old NZ. Not the same place it was 20 or 30 years ago where their was a sense of community and care for others. Now everyone is walking all over each other out of fear and greed it would appear. Communities do exist, but in small pockets. Areas that have turned into rental accommodation are turning to shit as its very transient in nature and nobody cuts their lawns or does any gardening. The houses have become places to park capital and not for young families to own and have children in.

This is why even as the value of my property goes up I grieve for the impact on New Zealand society. I have read far too much of human history and spent too much time living in developing countries to see this having positive effects on our communities and society on the whole.

Its not on a very good trajectory. The 'k-shaped' recovery is a bad thing. Its only making the division worse. I've read a bit of history as well and we have the foundations in place for some type of anti-capitalist revolution. I don't think that is a good thing. Its not just NZ though, it would seem its a global thing. Countries aren't at war with each other, but they're fighting internal divisions.

The way I see it, there's been this ridiculous growth in asset prices uncorrelated with productivity or wages.
The holders of those assets are now 'entitled' to an ever-growing share of actual production/resources.
From the perspective of real resources, it *is* a zero-sum game. And by doing everything they can to stop asset prices from falling, central banks and governments have put their hand on the scales and decided that those who have got shall continue to get -- and as for those who can't 'get on the ladder', kill 'em all and let God sort 'em out. It might sound odd, but I think a reasonably large economic collapse is the only thing that can save our society at this point, by allowing something of a reset. And by 'society' I mean the NZ I grew up in a few scant decades ago, where people knew each other and homelessness was something that happened in America.

Not sure if you follow George Gammon but he's fund raising to put together a lawsuit against the Fed on this topic. Raised $62,000 so far in lawyers fees.

https://www.gofundme.com/f/sue-the-fed?utm_source=facebook&utm_medium=so...

IN times of plenty, its easy to be welcoming to outsiders...
In times of scarcity, people will revert to in groups

ham n eggs,

Sadly, you are all too correct. The veneer of civilisation is pretty thin.

And people wonder why there are so few Maori and Pasifika people becoming doctors, teachers etc. It is because they are those most traumatized by the way we have treated housing for the last 3-4 decades.
Take a bow, all you people farmers out there.

According to NZ Statistics, Maori home ownership was 48% in 2018

As an investor I can assure you it's not your fault. When you look at numerous systems used to inflate property prices, from tax incentives to excessively onerous zoning laws to immigration policy and treasury spending, the game has been rigged in our favour. Short of revolution I don't think that'll change any time soon however, New Zealand governments (any brand you want) are beholden to property owners.

I'm quite worried about the changes to the RMA, the zoning laws where removed I would expect house prices might half and it would be building that would boom. Let's hope government don't forget who swings votes in New Zealand. That would completely change the landscape of investment in New Zealand.

As another investor I think this latest move by the government will have an impact, adding a ban to interest only loans would double the impact. It is not before time and the only issue I have with it is the lack of consultation and due process.

I appreciate your second para may be in Jest but the RMA changes, if made in a similar "policy by proclamation" manner might indeed accelerate further price falls.

Perhaps we need to be careful we don't get too far out of step with other economies as our assets might reach the "fire-sale" level necessary for external funds to take the risk of our regulatory environment and we might all be renters!

Exactly Squishy, it is the crazy land prices that underpin the bubble, solve that and everything else falls into place. RMA reform is step 1 but also need to rezone enough land to meet demand for many years ahead and finally we need to break the cartel-like behavior that drip-feeds land into the market. The key here is either compulsory acquisition and development e.g. by Kainga Ora or increase the holding costs to incentivize the sale of land for development.

It's councils fault, their is a huge economic incentive to stop development as infrastructure costs money and government won't find these costs as would be typical in other countries. Consequently councils manage budgets by impeding development.

brisket, read my comment above at 10:15,

Do not even bother, there are a few real estate sector cheerleaders around whose sole purpose is to keep the ponzi scheme going as much as they can for mostly selfish interests. It is just a pity they do not get banned for all the ill advice they give.

Like they need any help with that ?

"Making financial decisions by click farming readers"

I'm currently renting, I'm happy that my landlord is providing me with a great place to live in!

11
up

That's the difference between choosing to rent and being forced to rent.

Sadly interest cannot "help Yvil understand basic accounting ratios"

At least 1/2 to 2/3 of that DTI debt is paying off a non-value-added component of the house, ie a cost that is only there because of monopoly rentier behaviour.

You are literally are paying a debt on a value that was artificially recreated, and does not exist as anything of value.

Finally someone says it. LGVs of Auckland property usually shows 80% land and 20% actual house. Guess which one has been manipulated through restricted supply. You're paying for it.

https://thekaka.substack.com/p/dawn-chorus-the-govt-was-right-to?token=e...

“The Prime Minister’s continued commitment to protecting the value of that asset should also provide confidence to current owners and future buyers.”

Real culprit for the housing ponzi is neither supply or may be not even speculators but the person assuring everyone that under her, price will never fall - such assurance can come from person interested in supporting and promoting housing ponzi OR either ignorant or stupid

OR any other options, do comment, please.

Specially if the assurance comes from the head of the country.

Other option : Smart as politicians should be to get full majority and nothing matters to them more than power.

Now both Mr Orr and Jacinda has two years to do what they want, how they......

The housing market is NZ's biggest welfare scheme by far, for the older and wealthier. A massive wealth transfer from following generations.

Seems like a lack of morals is actually the biggest problem and cause.

ie We are leveraging the crap out of the balance sheet to try and generate some jobs/income

It only means we are more indebted = more "wealthy"

Woo Hoo I can finally afford that new $1000 cellphone and off out for some smashed Avo for brunch on Saturday. Unfortunately I can see that society is now totally divided and while its great being on the "right side" its going to lead to serious issues for everyone long term.

Yes we're heading towards the US where social division reigns. Not republican vs democratic, or black vs white. But land owning vs non land owning. The outcome, based on history, is how well we work together to find inclusive solutions. If we don't do so in a cooperative manner, the rules will continue to change - like what we're seeing the government starting to implement. That might just be the first of many steps.

And we could see it in our history and how we undid it the first time around, but still allowed greed and historical ignorance to power the intergenerational wealth thefts visited upon our younger generations. Despicable lack of moral character demonstrated in what our leaders and their vocal votaries have perpetuated.

yes...if they are only smashing the avocados for practice...

"I'm rich, I tells ya, Rich!!!"

That's what these figures tell New Zealanders isn't it?
Mind you, when they go to celebrate this evening they will have to downgrade to a lesser grade of boxed Shiraz and put it on the buy-now-pay-later account to do so. All their other disposable income has gone into another consumption item (if that's what it really is, because its reflection in the CPI figure is only of passing note.)

Just imagine if we were all poor; our homes only worth $500k or make it $250k - like they were just 20 years ago.
What ever would we do with all that other income that has otherwise been allocated to property speculation?
A better quality bottle of red, for one!

A jug of scotch mist more likely. Drinking it, spending it, same result, nothing to be seen.

Thinking at a very macro level here - does anyone see any good outcomes from all this? For example, how over the next 20-50 years do we work together to bring society back to something resembling 'normal' - especially around the housing market?

Do we need flat prices for 30 years while wages rise and interest rates return to normal levels?

Or do we turn into some form of modern age serfdom and your status in society is determined by whom you are born to and therefore you right to land ownership? (the opposite of the modern day free market ideals and meritocracy).

Just interested to know as it seems we are at a cross roads where the future can be very bad (for a large segment of society - but very good for a small minority) by not working together towards socially inclusive outcomes, or we can work against each other a destroy the fabric of society that older generations (my parents and grandparents for example) worked very hard to create - most who would be shocked by how selfish and greedy, and lacking in empathy that our society has become.

Good outcomes? "Normal" aint ever coming back
You cant unleverage a Ponzi
its just blows

Ok - so what does the future look like to you if/when 'it just blows'. Who carry's the burden of the losses - the tax payer? And if so, under what system? Democracy?

see link posted below

There are no "losses"
the "wealth" is imaginary & arbitrary
its just physical laws imposing themselves on the arbitrary edifice we call the financial system

And no - democracy requires a Surplus & growth ...
those times are gone

15
up

If there isn't some reversal -- if the market refuses to normalise -- then the change will be political.
If a whole generation sees that the country has become a landed aristocracy, they no longer have a stake in 'normal'.
If you think Chloe Swarbrick is scary, wait and see what another five years of increasing inequality-based-on-property-ownership will bring. You can't lock people out of society and expect them to politely adhere to political norms that obtained during previous decades of egalitarianism. It will be less 'tinkering-with-capital-ratios' and more 'down-with-the-kulaks'.

Very much. We've seen it before in history, how people react to such theft of their wealth. A general decline in morals and community.

They might start by asking themselves "Why the **** are we being taxed to pay a non-means-tested pension to those who got our wealth?"

Well you are about to be very disappointed, perhaps your great grand children will be trivially compensated for this theft in, say, 100 years time?

Bit late for that, I'm already disappointed haha

"Do we need flat prices for 30 years while wages rise and interest rates return to normal levels?"

This might help explain why this cant happen

https://ourfiniteworld.com/2021/03/20/headed-for-a-collapsing-debt-bubble/

How do you know that we don't invent some other form of energy that we're not yet aware of? Clean energy.

Would this mean that this whole theory above is a false paradigm?

I mean we didn't know how to fly 120 years ago and now we're getting ready to put people on mars. Do you not have any trust in humanity's ability to learn, grow and adapt?

LOL
I think youve been watching the Jetsons

Mars - right good old Elon eh?
dont make me laugh
https://dothemath.ucsd.edu/2011/10/why-not-space/

"Before we get going on practical matters, let me share the results of a survey question I have posed to college students in my classes. Let’s see how you fare, imagining yourself to be in the same age bracket of 18–22:

Approximately how far have humans traveled from the surface of the Earth in your lifetime? [e.g., since 1980 or so]

a) 600 km (low Earth orbit, 0.1 times the Earth radius)
b) 6,000 km (about the radius of the Earth)
c) 36,000 km (geosynchronous orbit; about 6 Earth radii)
d) 385,000 km (about the distance to the Moon; 60 Earth radii)
e) beyond the Moon
I make the question visual, which you can do as well. Start with a standard Earth globe (12 inch or 30 cm diameter). The first answer is 0.6 inches (1.5 cm) from the surface, followed by 6 inches (15 cm), then a yard (meter), then 30 feet (9 m) for the Moon. Take a minute to picture this.
Out of a total of 109 students responding (one group in 2006, another in 2010), only 11% got the right answer: low Earth orbit.
...
"If we extend our solar system model using the standard-size Earth globe as our reference, the Moon is 30 ft (9 m) away, and is about the size of an apple. The sun is 2.2 miles (3.6 km) away. Mars is sometimes as close as 0.8 mi (1.3 km) and sometimes as far as 6 mi (10 km). Light travels at a sprinting speed of 16 m.p.h. (26 kph) in this scale, but an energetically feasible transfer orbit to Mars would take 8.5 months, effectively traveling slower than a snail."

Interesting though is that to have your level of thinking has required significant scientific development over the last 100 years. So how do you know that in 100 years from now humanity isn't at a completely new level of thinking based upon scientific break through?

Or do you have all the knowledge already and assume nobody in the future will have more information/intelligence/science than you do now?

Sigh
we are animals in overshoot
do you think they (whoever they are) are actually just biding time for when SHTF to come out with this "breakthrough" development that cleans up the mess?
Debt load (and the need for more Debt load) / Interest rates only going down / habitat loss / general environmental carnage says you're wrong
You just cant put 10,000 sheep on a quarter acre section and think your way to prime mutton

I agree with you on most of your point (over population, excessive debt, environmental damage)!

Other than the end of humanity in the near future - do you see anything positive?

the point most people miss is that its THE DEBT that is delivering your stuff to your supermarket ... to your mouth
Theres plenty who are expecting a debt collapse / "correction"
But they arent making the link to the repercussions of this
Economies to scale & supply chains dont do backwards or LESS without repercussions

It's physically impossible to 'create' energy (see thermodynamics).

PDK and co are right that the whole economy is built on physical structures, and that we've leveraged a period of energy abundance to expand and grow our population and infrastructure. If the energy surplus shrinks in the future (very likely given the huge contribution FFs make to total energy use) then it seems very implausible that our current material standards of living will be maintained. Money is merely a token representing value, you cannot put a five dollar note in your fuel tank once your cars out of petrol. Most people are fixated on the 'money side' of economies but completely oblivious to the physics behind economies (physical resources / energy are the key). Barring a revolutionary technological development that lets us harness more energy (slightly magical thinking to think this is a given), things are going to get worse for all of us as populations grow while the resource base doesn't.

I'm at the point now where I am figuring out where to get my energy from when this scenario comes around. I do like electromagnetic induction from rivers and ocean. Need basic basic technology, blast furnace, mortar/pestle, alembic, hand drill for this scenario. Vinegar and willow bark to acetylate the salicylic acid.

Saw a great water purifier built out of two glass bottles, mounted head to head on a 45° angle that works better than alot of energy active processes.

In saying all this, I wouldn't invest in electricity recently although one would think demand can only go up in non-DGM scenarios, mainly because I expect a lot of innovation in electrical efficency in the future.

These trends will likely play out slowly. I doubt it'll manifest as a rapid collapse. I personally imagine it'll just be a case of essentials costing more and more each year and people getting progressively poorer in real terms (already happening). At some point it'll probably turn to complete shit but that may not be for another 50-100 years (hopefully).

I highly doubt we'll invent a way out of these general trends but it is a slim possibility.

Looking at the interviews with Vaclav Smil (degrowth) the future he describes - i.e. a viable one for the many not just a version of the Elysium movie - has much in common with life in NZ in the 1950s. Older folk I know who grew up then say it wasn't a bad life and they didn't feel poor...even though they couldn't go and buy lots of cheap stuff for their house or take a quick car trip to anywhere on any given day.

You have to look deeper IO, there is no "Next 50 years" to worry about. I have being saying for the last 10 years the world will be stuffed by 2050 but it turns out that its more like 2030 now. Going by the World3 graph the shit is going to hit the fan and there is pretty much nothing you can do about it because as a collective unit the human species is brain dead when it comes to creating a sustainable planet. My advice is to enjoy it while it lasts, fortunately I will be shuffling off just in time if it is 2050.

Ok you get the gold medal for DGM post of the day Carlos. I might need to go for a long walk after reading that!

IO your last paragraph largely says what is required. But it's likelihood is very low.

It is genuine democratic socialism, where Government really does understand the words of Abraham Lincoln that "Government is for the people, of the people and by the people." That the dreaded socialism comes back to ensure that the benefits of society reach all layers of people. As today is the day that the increased minimum wage is introduced and acknowledging the debate on welfare benefits, I have to say that our Government needs to take action to ensure jobs are created all across regional NZ as well as the big cities that provide security and decent living standards. That benefits support only those who genuinely need it and the others are in work (note the first sentence, that there are jobs for them). That companies and jobs are not exportable, that the costs of living, especially rent/home ownership are affordable without taxpayer support. that a target of national resilience is set as a desirable outcome.

Chances? Has hell frozen over yet?

"I have to say that our Government needs to take action to ensure jobs are created all across regional NZ as well as the big cities that provide security and decent living standards..."

You can't legislate in Prosperity.
You might legislate in some form of "socialism"... but regardless no one is going to willingly embrace the massive fall in living standards thats coming

You could write good copy for RNZ (our left leaning to the point of comedy government news agency) with that emotive plea (I admit hearing the Hindenburg quote in my head on finishing your last para).

We have most certainly have had a woeful regulatory environment in regards to housing, supply not dealt with and unfairness in the leverage of capital for further capital gains. The price driver of immigration was much accelerated by reducing the cost of credit to very close to zero.

I hold that the change announced by the government to disallow interest charges as a business expense on housing investment will have a useful impact as long as immigration is not re-started and supply not further constrained. If these changes do not work to bring down the price of housing the removal of interest only loans will have another significant impact. I think the combination of these changes would essentially remove investors from acquiring existing property and this should surely lower the price of that stock? New builds on the other hands will only be sold to investors as the regulations so far do not cover that area.

Just an opinion

Good outcomes are the construction industry is booming without an end in sight. Aside from that ???

There is no "good" outcome from here. We have built a massive debt based ponzi to reap short term benefits (wealth effect "boosting" the economy) while creating a long term problem (excess debt dragging on the economy). Anyone who doesn't believe this just has their head in the sand. It plays out one of three ways:

1/ Somehow the government manages to "flatline" prices. This will simply result in a whole generation having to take on colossal debts that will drag on economic growth for decades. Young New Zealanders will be saddled with a large debts and poor growth

2/ We let the bubble keep building unchecked until some outside force (recession, financial crisis, natural disaster) pops the bubble in an un-controlled fashion. We get a huge economic crash

3/ We manage down prices in an orderly fashion with some form of protection for Owner Occupiers to ensure an entire generation of FHB are not financially wiped out. This will ensure we start from a lower debt level, rebalance capital away from non-productive assets and hopefully allow for medium to long to growth.

None of these are pain free. But successive years of short term thinking from governments and regulators have created a problem that could take decades to solve.

I think you missed out on direct capital injection- prices maintain trajectory, no correction needed.

I personally think the answer will be importing more people with more money.

Political refugees (Hong Kong?), climate refugees (the ones who can afford to come) etc. But yes, the cost is ultimately worn by the younger generations who have lost much through this...

But the real issue is they were told what would happen and what to do to prevent it, and never did anything. Then when they tried to do something it was all on their own mad ideology with no evidence to support it.

They have almost left it too late, and are still NOT addressing the fundamental problem.

Where we are at present, if there is no capital growth and no ability for any expense deductibles, etc. and rents are to be held at present levels, then prices would have to 1/2 to get the required ROI.

DP

DP

On 23rd March Trademe had 21604 results for search of - All of NZ, all Property types, price Any to 10milllion. Today 1 April same search shows 21122 results. Supply shrank since announcemnt. Word in the steet in greater Wgtn area is Mom and pop investor activity a bit scared off but is only small factor, most demand from FHB, upgraders and big fat-cat investors on hunt for land to develop.

I think the Wellington equivalent of the Unitary Plan is confirmed shortly. That will trigger an absolute frenzy of activity as some houses are being rezoned from single use to 6 story apartments.

Thanks

interesting views on this - i keep an eye on the Lower hutt sale and rental market- some observations.

2 x $1 Million dollar houses were removed from the market yesterday unsold- one has gone to rent instead. The rental one had a reasonable price on it - asking about 200K over RV the other was $500 K over RV.

2 houses that were put on the market for rent a couple weeks ago have both lifted their asking rent price in the last week- a sign they are pre-empting rent increases as interest deductibility is removed.

aside from that a small home in Petone had about 40 people view it lastsunday which indicates the market is still quite hot

Correction to my last post- both houses that were on the market for sale and withdrawn are up for rent now. Indicating that people who are moving are choosing to rent rather than sell if they cant get the price they want

So did Auckland house prices go up or down under their Unitary Plan?

14
up

Aotearoa - land of the long white mortgage

For those interested in the full Corelogic article:

https://www.corelogic.co.nz/news/government-announcement-dominates-marke...

Looks like lots of people missed the train.

Luckily for them, the trains destination is economic hell, so everyone is along for the ride regardless if you purchased a ticket or not...Yipee!

It's better to be in the train with captain Orr than to be walking around naked.

Depends upon your morals and principles at the end of the day. Getting rich at the expense of others and the financial stability of the country is hardly the path to becoming a good, decent human being. And ultimately for a good society to develop, that is what we individually need to aspire to be...good, decent people who look out for one another - not turn your neighbours house into a rental.

Anyone watch the auction in Bruce Mason today. It is very depressing :(, mostly passed in

Could be a sign of things to come. Once we filter through the pent up demand.

Barfoots Central City rooms seemed to do okay yesterday:

https://www.barfoot.co.nz/auctions-live/latest-results

11 Selwyn Ave Glen Eden only sold slightly over its RV

If OZ beat NZ by sending out the unwanted there, then at least? NZ can claim the winner for their artificial economic stimulus, NZ housing prices clearly beaten OZ (also increase now) in term of magnitude (outside MelB & Perth) - Just don't ask JA about her ideal DTI ratio for FHB in NZ, don't ask RBNZ as to why instead of reduction of LVR, it took 12months removal before re-instated, also don't ask why NZ QEs have to outpaced UK, US, OZ, Canada, almost all of EU countries in comparison to country size of everything. Glad OZ able to exploit this Kiwi below average understanding what wealth is all about.

From The guardian 5/3/2021: "Bubble or boom? Why ultra low interest rates mean house prices may never bust"