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Housing market heading for the stratosphere as prices and sales volumes rocket up

Housing market heading for the stratosphere as prices and sales volumes rocket up

The housing market was on fire in March, with the national median selling price increasing by $46,300 for the month, according to the Real Estate Institute of New Zealand (REINZ).

The median selling price rose from $780,000 in February to a new record of $826,300 in March. The $46,300 price rise in March followed on from a $50,000 price rise in February.

Over the last year the national median price has increased 24.3%. New price records were also set in 12 of the REINZ's 16 regions throughout the country.

The median selling price has risen at a slower pace in Auckland compared to the rest of NZ, rising by $20,000 from $1,100,000 in February to a new record of $1,120,000 in March. The annual increase in Auckland is now 18.5% compared to 23.6% for the rest of NZ excluding Auckland (the interactive chart below shows the median price trends for all regions).

The latest figures show that the national median selling price increased by $161,300 over the 12 months to the end of March, equivalent to $3102 per week, while in Auckland the median selling price increased by $175,000 over the same period, equivalent to $3354 per week.

However it wasn't just prices that were increasing at a scorching pace, sales volumes were also through the roof.

According to the REINZ, 9721 residential properties were sold in March, up 31.2% from March last year, although sales in March last year were affected by the Level 4 lockdown late in the month.

That was the highest number of March sales recorded in 14 years.

Sales in Auckland were even more buoyant, with 3872 properties sold in March, the highest number of sales ever recorded in the month of March and the second highest ever for any month of the year, exceeded only by May 2003 when 11281 houses were sold nationally, and 3912 in Auckland. (The second chart below shows the sales volume trends in all regions).

 

Median price - REINZ

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Volumes sold - REINZ

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283 Comments

53
up

So Wellington is up 31.2% in 12 months. Excuse my language, but that's pure [word removed by Editor] insanity.

24
up

Yep it's sucks. Jacinda will see prices go down in Auckland and announce success!! ignoring rest of NZ. Grunter doesn't know which way is up

11
up

It sucks if you're wanting to buy, it's great if you own

39
up

As someone that owns a single property with a good amount of equity and is thinking about upgrading, this is not great, it's setting me back. I would prefer a flat or falling market.

19
up

100% agree. Been looking to upgrade our 3br but the upgrade cost just keeps getting bigger. Almost certainly won't do it now.

10
up

Same here. Also can't buy without selling first which I don't want to risk given the trajectory of prices.

Same here - even though the price quoted that we would get for our existing home is ridiculous as well - given we are considering upsizing, it seems the prices above ours are even more ridiculous. Offered on one recently with an RV that was $30,000 more than our own RV (same suburb). So, I took the top of the range estimate for selling ours and added $30,000 to it in terms of my offer price on the other (assumption being that would reflect a like-on-like market price for each dwelling).

Didn't work - as the highest tender offered more - a couple of hundred thousand more! As that was our third attempt at upsizing, we've given up. The market is just too crazy. Sales do seem to be slowing around here, particularly in the higher end bracket but I'm just waiting and watching.

That's what I said, if you're looking to buy, which you all are, it sucks.

We're also owners, in which case you said it was great. Turns out they're not mutually exclusive.

More listings in palmy, but seem to be cheaper, prob rentals being listed, 500k plus for rentals bought for 200k 2 years ago.

Crazy yes.

Predictable, yes.

Peaked now, yes it has. Since 2012 - 2018 I've said buy buy palmy, its miss priced and too cheap.

Now it's over valued in some parts, but no where near as bad as smaller dying towns eg gizzy, Wanganui, all the other small areas that were cheap,
and ppl bought just on low price.... will be tough going owning rentals in these places if u paid anything more than 300k, big rates, big maintenance,
dodgy tenants in these areas

16
up

As another with a single property and some regard for younger generations of Kiwis aside from myself, this is also a pretty crap situation.

We need to address investor entitlement mentality infesting our legislative and executive areas that's driving this ridiculous wealth transfer.

please explain to me - if you are selling and buying in the same market, why should it matter ?

10
up

Only if you own multiple properties, no use to me whatsoever with just our own home. I guess the bank manager can sleep a little better at night though.

19
up

Yeah great if you own but there are wider society costs. More young will move to Australia and elsewhere and we'll need more immigrant workers to replace them. The birth rate will also keep falling.

The replacement theory is racist - don't let a Greenie hear you.

15
up

I didn't mean to imply anything about the individuals that come here. It's not exactly a success to have a country where young people feel they need to leave to get a roof over their head.

13
up

I was being tongue-in-cheek dude. I largely agree with you.

They are too busy on social media and Sharesies to take notice

This is old data.
On the Northshore Barfoot and Thompson Auctions today 7 Sold out of 38 if that's not a crash I don't what is.
The only way to understand the current market is to get into auction rooms Todays data is out of date tomorrow.
Considering 4 weeks ago there was about 80% selling at Auction.
Well done the red Team what great leadership at last.
Stop buying New Zealanders big opportunity coming for first home buyers.

Any idea how these recent figures equate to last year? I mean there must be some seasonality to it right?

28
up

Exactly and that’s 31.2% of an already massive figure..

24
up

Don't worry, National have stated they'll remove the recent tax measures aimed at constraining house prices.

National also plan to remove healthy home standards by lunchtime.

21
up

They also want to reintroduce foreign buyers.

29
up

Yes, National want more foreign buyers of pre-existing homes.

They are seriously off their meds.

26
up

They've lost my vote at the last election, perhaps permanently. They've been a mess for years and aren't getting any better. Not one single decent idea is being put forward, the only glimmer of anything is some of the fight shown by Bishop and Willis in needling the government in the house.

21
up

Same thoughts here - more immigrants - they have to be kidding. National are now well and truly out of touch.

16
up

They're clearly putting all their eggs in the basket of entitled boomer property investors. "Got mine, eff you lot."

As such they don't seem to offer anything for younger of future generations of New Zealanders. They're now just a party of would-be Gordon Gekkos.

Yeah they are going to be up against some pretty big demographic shifts in the future... which they may never recover from.

12
up

They are stuck in a time warp of policy that was a winning formula 10 years ago. It isn't anymore.
Continue on this path and they are consigned to a permanent role in opposition...

Don’t think we have had any government that has not been stuck in the mud of the past, except for the Lange/Douglas class of 1984.

.

..

Great, the new tax law is a stupid substitute for cap gains that will reduce building and slow the solution. The actual complaint should be how pathetic nat/labour is for not introducing a cap gains tax. And of course, the actual problem is supply. Build more houses, investors are not the problem, nor foreign buyers, they are both just symptoms of a supply problem.

They also want to flood the market with supply....

Great, lets keep going on that

That party is a nuthouse, hopefully will never get close to power again for the love of God.

If we measure by median, Wellington prices fell last month

Great news.

Strikes me as the tipping point of the madness. We are going to be famous for how badly this ends.

46
up

Can't wait to read more investor sob stories about how hard done by they are.

11
up

DGM slowly coming to terms with the reality that house prices go up (not down) over time......

Please don’t laugh - this is a major breakthrough for the DGM.

TTP

27
up

Paid that fine yet, TTP?

The most recent one or the 2017 one for price fixing and collusion?

10
up

Hard to give anything he says much credibility ey

14
up

I think your DGM acronym relates more to landlords these days. Actually its probably WTCM - whine and toy chucking merchants.

Why do you spend your time making these comments? Do you even get paid for it?

35
up

I saw commentor in Croaking Cassandra announcing he will sell 2 of his 11 props, he phrased it like a threat to renters "I'm going to have to sell.. Look what you made me do" LOL

40
up

When property investors sell, the house disappears from existence. You know this, right?

Well the dice get rolled on the property entering the book a Bach / air bnb pool each time it is sold, so in a sense a portion disappear from the long term accomodation pool.

What happens is the rental which housed a family of 5 gets purchased by a FHBer couple, and due to the occupancy ratios of OO vs Rented accommodation, the family is lumped with the unfortunate decision of making their 3 children homeless.

Edited to emphasize the tongue in cheek

15
up

This might shock you but sometimes FHBers like to have families too.

Overall he is correct, on average rentals are more crowded than owner-occupiers and when you turn a rental into a first home it is sometimes to house only 1 bedrooms worth of renters into 3 bedrooms worth of a house. Build more houses.

The overcrowding rates are severely weighted by several impoverished areas in which rental stock is dominated by state ownership.
Whilst the point is correct for these communities (the state ain't getting rid of these houses anyway), by in large, the difference between the occupancy rates of the 90% of other rental stock would not be that different. Especially when controlling for housing type.

It's a fool's argument.

I think this BRANZ study from 2017 was mentioned on a previous article. The graph on p28 suggests there isn't a large difference in the number of occupants per bedroom of rental vs owner-occupied housing.

https://d39d3mj7qio96p.cloudfront.net/media/documents/ER22_The_New_Zeala...

but if renters become OO then that spreads the differtence

Most young couples I know are still living with one of their parents. Also those arriving from overseas are not renting anywhere either. Neither is someone who is leaving a relationship and buying a new home. Some are just sharing someone else's house. So many home buyers do not vacate a rental property. Only idiots would assume that all buyers are currently renters. I'm betting the majority of them are not. So over time, the ex-rental pool of houses will be soaked up by buyers who do not vacate a house anywhere.

Most couple you know are living with their parents? That is not indicative of the norm at all...

I have no idea of the numbers. But that was my experience as well. I was the odd one out that was still renting while having my house built. And it's still the case now, many people I know are either staying with family while looking for or building a home, or they are stuck renting with no family support or prospect of buying in this market.

I don't know how old you are, but my experience was the total opposite. I can't think of a single person I know who who moved from the family home into a house they had bought. Every single one of them moved from a rental.

I'm in my 30s and only relaying my own experience. The majority of people I know are stuck renting, unable to buy at all. From what I've seen, it's by far those with family support that have the best ability to buy. It was rare for me to see anyone else having no choice but to rent, while still being able to choose to buy a home of their own. None of the people I know that are having to rent, can afford to buy. And they are not careless with their finances at all. The people I know who have bought were not renting at the time. Most of them had rented in the past, but moved in with family to save money and remained there until they bought. They wouldn't have been able to otherwise.

Ahh. Yes.
Almost forgot about that old chestnut. The property investors association made an executive decision 30 years ago that occupancy rates for OO and rental dwellings cannot ever change. If the children have to be sacrificed to ensure these rates are maintained, so be it.

Correlation does not equal causation. The occupancy ratio is an observation, not a rule.

Recent evidence shows the number per dwelling is very similiar between renters and OO

Property investors: saints and quantum physicists rolled into one.

Yeah those 8 hours every day they put into their "business"

Yeah those 8 hours every day they put into their "business"

37
up

WOW.

Till January house price rose by 20% than in February by 10% in a month than again by 5% in one month and STILL MR ORR NEEDS MORE DATA TO BE CONVINCED TO STOP INTEREST ONLY LOAN.

Real Shame as it reflects how ruthless and shameless their attitude is towards FHB.

WILL THIS NOT ADD TO FOMO.

They worry that by controlling interest only loan, house growth may stop or fall a little but even if by their action, house price fall by 5% will be near February level and if it falls by 10% to 15% will be near January level but still will have 20% to 30% rise on annual basis.

WHEN NO INTENT MR ORR WILL ALWAYS FIND ONE EXCUSE OR OTHER TO DELAY AS HAVE ALREADY SEEN WHAT EACH MONTH DELAYS DOES TO BOOST THE PONZI / FHB MISERY.

18
up

The PM is on to it. How so? Why just the other day I noticed a house across the road sold for $zillions. My, my never ever say I am not on the ball. Wink,wink,nudge,nudge.

29
up

Yeah, I shook my head in disbelief that despite all the avenues that exist to tell the PM that house prices were going crazy, she had to see the house across the road sell to believe it

And she thinks it’s just a problem in Auckland! I live in Tauranga and have seen first hand the trauma in the auction rooms here

11
up

It was abysmal. Shows how ridiculously out of touch she is.
Chardonnay Socialist!!!

Doesn’t want to be in touch. Must have a gigantic too hard basket, and overflowing.

I shook everything in disbelief

35
up

Whinging on the internet isn't going to change anything.

Nothing is going to change until angry mobs are burning and looting.

The central bankers are going to continue devaluing your savings and your labour until they are completely worthless.

What are you going to do about it?

18
up

I think young people should leave - it might be their only hope as this could take a decade or more to sort out now. And if you’re in your 20s or 30s the better part of your life might be gone.

22
up

The only place most kiwis can go is Australia and the same unaccountable central banker cartel are performing the same grand larceny there.

I believe this is likely to end in a global fiat currency collapse. I cannot see how the bankers, who the citizenry entrusted with a mandate for "financial stability" manage to avoid the mother of all housing busts any other way.

There are still decent places at affordable prices though (excluding Sydney and Melbourne, of course). Perth and Adelaide for example. Especially if you're able to work remotely. I appreciate they too are rising in costs rapidly.

10
up

Yes they have the same factors in play but their income to house price ratio is better and generally things are cheaper over there. When I moved to Sydney I was able to save three times as much in the same job. My standard of living also greatly improved.

So yes, young people should move to Australia. Let's all help out the young and spread the word on this brilliant option.

I know people who are headed there because it's easier to find a decent block of land and more friendly councils that will allow them to put a tiny house on it that they can build to a high spec. Living more simply with land they can cultivate and everything designed to be as self-reliant as possible. Looking at where we are headed and the unwillingness of people to challenge this direction... It's very tempting to do something similar with enough land that can be shared with other people. Looking into doing anything like this here before I bought my standard house was a nightmare.

55
up

Cleaners are out there scrubbing fecal matter off toilets for the same amount of money they got yesterday, meanwhile a house pulled in $46,300 in a month just for sitting on its foundations.
Welcome to the 'Inequality Effect' where central bankers and deer-in-headlights governments allow our social fabric to be torn to shreds & monetary debasement to go into overdrive. This is complete failure of government which is enabled by greed and ignorance.

So has bitcoin and Elon musk with market caps in Trillions, at least the house is employing trade workers (gardeners, plumbing, roof, electrician, joinery, builders for maintenance etc, rates, insurance

And therein lies part of the problem. New Zealand is a minnow globally and other central banks , significantly more important, have decided that interest rates need to be kept stimulatory and money needs to be thrown into the system. Although New Zealand is part of the team its only the bag carrier, when it comes to setting its own monetary policy. Personally I see New Zealand with a negative OCR within 12 months.

Maybe we need a 'nuclear free moment' when it comes to asserting our own sovereignty when it comes to monetary policy. To say we 'can do nothing' is crazy. We could at least do a tiny quarter percent rise - for starters - to take the wind out of the sails of this housing madness. Why should we disappear down the same toilet that the US is going down? They gave us a GFC, and now we have to follow them blindly into another abyss(?)

15
up

We could start by limiting immigration severely, we can't house our own so why add thousands more. Then look at why land and construction have become so expensive.

The thing they will never talk about is currency but a huge reason countries are matching the US is so their currencies don't appreciate. There is a silent currency war going on and it's why bitcoin is booming.

100% Brock nearly everyone that comments about house price increases has no clue as to why it happens , they just think its because investors are buying the properties. What people need to realise is this whole event has been created by the RBNZ and if you go back in NZ history you can see where it all started. As you stated people need to stop whinging on the internet and media because this decade is going to be the biggest asset increases in the worlds history and I can wait because im future proofing my family

House prices are rising because there are not enough houses. Once you don't have enough houses interest rates take the driver's seat, but the government was explicitly warned this could happen, they needed to manage those externalities as the RBNZ does not have the scope to do so. They twiddled their thumbs and now it's too late. Hilariously with their clumsy laws, they may force the RBNZ to cut further. Build more houses, spend lots on infrastructure and fund first home buyers into the apartment markets as owners or landlords, once there is enough supply, fund them into 2 or 3 bed high-density houses on main transit paths for light rail or whatever.

There are plenty of homes - some of which are empty or used as air b n bs ( several in my street).

Air bnb's dont seem like a winning proposition coming into a second winter with borders closed except for australia

Entire hotels are booked out for managed isolation. Overseas holidays are less of an option now than ever. Air bnbs appear to be going like hot cakes wherever/ whenever I try to book them.

Found out the hard way when booking a hotel to make sure it isn't also used for emergency housing - what looked OK on the website turned out to be a roach motel half full of people with no other options and zero incentive for the owners to renovate.

That is rubbish, just a convenient excuse pulled our by the RE industry and Govt, it is all to do with the RBNZ

China has millions of empty homes and ghost cities and still their bubble gets bigger

80-100m estimated, but they are still going up in value. In fact there are entire cities there which are ghost towns, with all services connected.

I biked through a couple when I was over there, it was rather eerie going down a 4 lane inner city highway and able to ride in any lane I wanted...

Yes, when money is super abundant and cheap it's very very hard for supply to keep up with insatiable demand

From what I see at home and work and play, younger people today seem very passive and apathetic, as s generalization

14
up

Is this the type of result / data that Mr Orr and Mr Robertson waiting for before taking action.

Now still do they want to wait for more - Why do they not follow the same theory of 'least regret' as mentioned below - when it comes to controlling the ever growing house price on a daily basis. Double standard - exposed them as they now stand naked with no where to hide though are thick skin $#@&

"It reiterated it was taking a “least regrets” approach and would keep monetary conditions loose (IE interest rates low and the supply of money high) until it could be confident its inflation and employment targets could be “sustainably” met."

Richard
These figures do not reflect the current state of the market post Government announcements. Orr would not be acting on this data as it does not reflect the impact of those announcements.

11
up

There will always be an excuse for inaction printer. You can't put out a forest fire with a thimble full of water btw. Maybe Orr believes in the tooth fairy as well.

If Mr Orr would have followed 'least regret' policy in controlling ever growing house price, may be this jump every month could have been controlled.

This reflects that he is enjoying the rise and not at all concerned and regretfully of the current ponzi so to cool down FOMO - It is important that they act now without further excuse even if house price growth slows or flatten in April - No excuse as for long they keep on extending the rope to support and promote one section of the society and when it comes to FHB, approach is wait and watch - Double standard should not be tolerated as it only reflects what their true agenda is.

Agree Richard.

Not trying to control is what is concerning as it reflects their true mindset.

16
up

Orr and a Robertson are anti Kiwi. They are keeping Chinese and Russian pals happy

10
up

Silly comment

You might find it silly out of sheer ignorance but we do have trade agreements with China and NZ govt does not want to rock that boat with China. So alot of property is purchased thru the OIO Overseas Investment Office by Chinese and a Russian investors. Sorry but pulling the racism card will never automatically get you or anyone what they want in international trade relations. "You can't say thst it's rascist" - nice try but no

I also heard he kicks puppies when he thinks no one is watching. Oh the humanity.

Whilst March was hot - looking at Barfoots Auction results April is decidedly colder. Tuesday and Wed this weeks clearance rates were quite poor with only 6 out of 19 houses sold at one auction and the clearance rate averaging less than 50% so far this week.

The key surprise was the number of houses that have been passed in with no offers made. Normally a house passed in, in a hot market usually means that the reserve is higher than the market is willing to pay, but no bids starts to indicate there are less buyers than there are houses.

Number of houses on the market in the last couple of weeks has also risen and some markets such as Wellington and Tauranga have their best stocks on the market in 6 months - which indicates supply is finally catching up with Demand.

ikimpaul
Agreed: as to current state of the market not to much to read into this report as Government announcements were not until 23 March so most sales going unconditional on which they are based predate that and agreements signed some four to eight weeks prior to that. Actual impact of those announcements will not really be known to June and even most likely July REINZ reports at earliest as contracts until that date will predate announcements.
In the interim, as you say auction data provides the best indicator (note use of “indicator”) and if I was a FHB I would be watching those interest.co reports with keen interest more so than the range of opinions being expressed.

I take it you have not attended an open home in Wellington

I have and in April the numbers are definitely down - gone from 50 or 60 people now to 10 to 20. Last week only 1 of the 4 houses for Auction in the Hutt Valley sold. More houses are now listing with a price rather than deadline sale and Lower hutt has the highest number of houses on the market (as of yesterday) since Sept 2020. Additionally Wellington was one of only 4 markets not to set a new REINZ median house price record in March - along with Bay of plenty, Nelson and Taranaki.

Good info

Yep, good info - my observations as well. Am waiting on the days to sell data release. Expect to see slowing.

Just further to this- this monring Barfoots North Shor auction - Just 3 out of 19 sold - giving a 15% clearance rate. Twelve were passed in with no bid recorded. So only 7 of the 19 houses attracted bids (35%) .

Vendors will have to adjust their expectations

32
up

As an investor I'd like to thank Prime Minister Ardern, Reserve Bank of New Zealand and New Zealand public for this spectacular result. Housing in New Zealand really is 'Corruption for Everybody' and not since colonial land grabs have we seen such benefits accrue so rapidly.

You forgot Grant Robertson

Treasury are just the NPCs of government.

https://en.m.wikipedia.org/wiki/Non-player_character

This had me spitting out my tea. Well done lol

It's funny because its true.

I don't disagree! I've been a gamer since childhood and genuinely lost some tea laughing at that lol

LoL - and there were some spectacular property booms and crashes in earlier times. NZ's early history was based on land grabs and speculative frenzies. Not a lot has changed apparently.

No wonder our politicians of a few decades ago got rid of the last of land tax to free up their opportunity for speculation.

11
up

Good. This will encourage the govt to stick with the interest policy change.

Hopefully it’s the data required to ban interest only loans

I do not see it happening as the script for announcement in the month of May is already written as correctly mentioned in one of the comment and will be Wait and Watch.

Even in April, if the growth stops, still action is required by Mr Orr seeing the rapid growth since last few months.

Pereception is very important in controlling the FOMO, which will be further boosted by todays announcement.

Perception is also important in politics so is extremely important for Jacinda Arden to speak with Mr Orr and sooner the better.

Dp

35
up

So just to confirm that you require a salary of $150k or more to live in NZ? Or become a dependent living in a motel...nice work NZ.

Or live like a true kiwi.. In the bush and eating huhu grubs (taste like cashew nuts)

Don't forget the savings you will need for the house deposit!

Reintroduction of LVR did not have any affect instead house price went up by $460000 - is this the hidden agenda of Robertson and Orr in delaying as every month that is delayed help in boosting housing price - now still do they want to wait for more.

RBNZ and Government delays taking action and every month someone is paying 5% to 10% extra and than jacinda and orr to protect those who paid that extra does not take action (PM does not want any fall) and again next month another % extra paid.....so the ponzi continues.

Mr Orr and Jacinda somewhere you have to say too much is too much and act.

Agreed. Every month of delayed action by Mr Orr, the worse things get. Perhaps he intends to keep his blinders on until his term is over?

Prices over 12m period in Auckland up 18% in March. In February it was 24%
Sales volume up 50% on last year, for residential only sales, which is what REINZ are publicising here, NOT total sales of all property.
Have also to take account of what march increase in sales is compared to - that is, last March.
And last March sales were truncated and delayed due to lockdown in the last week.
In linear terms, we would expect 25% of sales to have been lost that month and hence 25% extra this month, when there was no restriction.
Rate of price increase should continue to dissipate from here.
If we look at last time price rises were manic (2014-16 roughly) it declined from 24% up to 3% down, over an 18 month period. So, prices continued to go up, just more slowly as time went on. This is a logical direction for prices.
Bear in mind that the properties sold in March went OTM in late January and early February (esp those auctioned) SO, well before the interest debacle for investors announced 23rd March.

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All proposed solutions by the government and opposition parties amount to 'tinkering at the margins'. The Reserve Bank will not lift a finger, having shamefully sat on their hands yesterday. Orr has gone from a swaggering man of action to a ruddy-faced fence-sitter in just 3 short years. The Ponzi is actually sucking our economy into its black hole, the consequences of going all-in on 'print, borrow, and hope' amount to a very bleak future.

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Elections in New Zealand are basically just a referendum on house prices.

A non binding referendum

Adrian denies being Bernie's cousin, Graham denies being his brother and JA denies .
Fortunately the national bank Kiwibank goes all in to support first home buyers saving a deposit with 1.0 percent deposit rates. .
New Zealand adds or conjures 90 billion in wealth as RBNZ committee take path of least regerts and maintains "ongoing stimulatory monetary policy"

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If they are going to keep the OCR steady at 0.25, they just have to add other levers like remove IO loans and introduce DTI, cash only deposit for investors etc. it is just plain dumb and stupid not to have already done this and with QE on top, we are going bonkers

Will it help though? The main problem is that so many people have lots of money / retirement savings and nowhere to put it. IO/DTI etc will only exclude the "investors" that don't actually have any money, and they have already been taken out via tax changes.

Yes it will. Is it the only answer? No. This Ponzi is full blown so we need to attack it from as many angles as possible. Anything that helps damper non OO demand and increase supply needs to be done.

https://www.theguardian.com/business/grogonomics/2021/apr/15/yes-interes...

The article shows that low interest rates benefit those who took out loans 10 years ago, MORE than they benefit FHB. Also, that loans are now (in Australia) about 240k higher than they were in 2010.
And prices have risen 47% whilst male wages FT only up 26%

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How are all the new minted millionaires feeling?? I might go get a celebratory ford ranger against my house!!

Don't waste your money on a Ford Ranger, buy a car that will hold or appreciate in value.

Everything is already rapidly appreciating in fiat??

My advice, just don't buy a Ford, any Ford they are a POS. Cannot wait to get rid of the GF one, sick of working on it. Its full of dumb ideas they put into production. By the way I'm not a Holden guy, they are just as bad. The two of them race for the wooden spoon award.

Already have, a 65 Mustang fastback purchased last November.
We have serious problems incubating already in this country. High inflation in building materials and all metal products. The Gov and Reserve bank know that when they have to act by increasing interest rates due to upwards inflation pressure, there will be a meltdown due to high household debt levels.
Put your seat belt on and wait for the sh.t to hit the fan.

lol, why not :).

On another note I wonder what percentage of that spend would stay in NZ? GST (if not a business) perhaps plus 10% cost of sale? The rest will be split between Thailand (where they are made) and the US where the man lives. Other than the feel good effect we are still not able to push our productivity up because we do not produce anything and can only eat our primary produce not leverage it into other higher value goods. (beyond WMP and derivatives).

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We're so clever we send our logs offshore and buy back timber whilst our sawmills continue to close

Our friends at Carters closed two mills and promised they could pick up production in others. "Whoops, we were only joking" - Graham Hart.

Make sure to use your hard earned new equity to purchase an investment property to go along with the Ranger. It's the kiwi way! Well not for the younger generations of kiwis but I'm sure they would if they could.

You’ll need a boat to tow too

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How will these spectacular unearned gains encourage anyone to invest in our withering productive economy?
We have a two stream economy: the housing Ponzi is one, the other stream is an endless river of government 'support' going to the victims....who pass it on to their landlords.

Interesting historical joke: Bernie Madoff died yesterday
Same day they launched a ludicrous start up on NYSE called Coinage.
Priced at $350 a share it shot up to $480 in hours and then down again to $311
Dot com anyone?
Meanwhile State and CB guarantee of protecting eternally higher stocks and house prices drive risk behaviour ever higher and as Minsky so rightly identified, guaranteeing the next instability implosion due to over-reach.

"...start up on NYSE called Coinage."

It's on NASDAQ and it's called Coinbase.

The supply and demand cycles are now countercyclical to each other.

We have a really bad case of the supply and demand speed wobbles.

Think of it as super sensitive power steering in a SUV with real soft suspension, really heavy oversteer, and bald tires.

And a learner driver at the wheel.

Go baby go

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whoo hoo the Double Browns keep flowing..thanks Jacinda/Grant for keeping the party going.

That took me back, Double Browns on the river bank at Wangavegas, good memories!

The party is well, well into the "I don't feel so good let's call an Uber" phase I think.

And yes the Uber driver is GR or JA and they are driving the SUV is just described in the comment a couple above.

Sales were substantially below average (using 2008-20 as averaging period) in mid 2017 to September 2019.
Those folk who might have liked to sell then did not or often withdrew sales, because prices were not high enough relative to inflated figures that many had paid in 2014-15. Then prices started to increase rapidly in July 2020 onwards and those folk who were waiting for prices to rise, sold. This will go on for a while until that wave of sellers drops away and we revert to the mean. Similarly, price rises will choke off sales when rising at 24% pa.
These are cycles with dips and flat periods for sales and prices.
Again, the idea that price falls do not happen in NZ is erroneous. They do, for short periods, like in 2017-19 or 2008-11, in Auckland. Again, we only have figures back to 1992 from REINZ. But there are no cast iron guarantees in such cycles. A credit crunch could easily lead to substantial falls. At the moment few predict such a crunch or drop in confidence. But with current fiscal and monetary largesse risk being ramped up and the likelihood of a crunch rises.

Just do a short summary Mike, prices are heading for Saturn.

The March data doesn't capture the effects of the changes brought in. Anecdotes from the auctions is that there are no new investors and plenty getting passed in. This is the start of a market change. Vendors will need disappointment and lengthening median time to sell in order for prices to change (i.e. behaviour and attitudes then prices). I will wait for May's figures to decide if the trajectory is steep enough and more measures are needed.

Auckland sales Jan-March in 2013 were 7231
In 2021 it was 8697
20% rise.
Roughly that is what Auckland pop has gone up in that time too.
So, when making reference to "record" sales it does help if the scale is kept constant - ie relative to pop and also to housing stock. Latter is up about 15% in that 8 years also

Hi Greg, The image above in articles, says it all.

For the record, in the 3 years to November 2019, REINZ site shows median prices in Auckland rose 0.8% in the full 3 years. And that does NOT include inflation being deducted. So, that is, in real terms, prices FELL in that 3 year period.
In the 3 years to November 2015, median prices rose 44%
So current mania needs to be taken in context as peak of a wave that will dissipate as others have.

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Wise words.

But when the waves of the tsunami have already destroyed your village and killed your family does it matter that they will eventually disapate?

Orrs wife's motto is also wait and watch

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Anyone else see the documentary, A Living Hell: Apartment Disasters on Prime last night?

Our inability to build robust, weathertight multi-story residential structures is beyond comprehension. I really just don't get it. Even a Fletcher's recent build apartment complex in Stonefields has major design faults - remediation is expected to cost more than the original build.

The scale of the leaky apartment complexes nationwide is just mind-boggling. Many body corps are getting to the stage of selling whole unit titled complexes to 'developers'. Many owners of leaky unit titles are renting them until the buildings are eventually deemed structurally unsafe. If we have an accommodation problem now - just imagine the next 10 years while all these structures are condemned or demolished.

No wonder no one in government is talking - imagine the implications for the banks holding these mortgages. And of course, the unit title holders many of which did proper due diligence which 'turned up' nothing/no warning or red flags with regard to building integrity whatsoever.

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Amateurs everywhere. No accountability. Conspiracy of silence.
And owners carry the cost.
I notice Appeal Curt ruling did not help either.
Councils giving these dumps consents want lynching too

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Accountability in the wrong places.
If a developer cheaps out and builds rubbish, it's Council left holding the bag for not stopping them. It's stupider than it first appears -- like holding a cop more responsible than a criminal because they didn't do enough to stop them.
So Councils, wary after billion-dollar leaky home fiascos, have incentive to over-regulate, making all building more expensive (and they're not even that good at it, clearly).
Meanwhile, developers and builders can 'phoenix' as much as they like. Easy to make millions knowingly building absolute crap and it's impossible to hold them accountable.
My suggestion: minimal Council inspection regime, but a nominated person (developer/lead builder) held personally, legally, inescapably responsible for guaranteeing the integrity of the build for at least, say, 10 years. If the eaves start falling off, around come the bailiffs to take away the jetskis, regardless of how many companies they've burned through in that time.

The integrity of the build should be for its design-life, which for residential is I believe 50 years.

Yes please! Otherwise it falls on our rates and insurance premiums and the culprits just walk away.

Yes it really is quite amazing. Architect's should hang their heads at this, their profession really has been letting us down. Truly poor design work followed up by lowest cost building practices and finally not quality assured by any qualified persons in the certification process.

I have spent hundreds of thousands of dollars remedying issues, although I have been successful in recovering the sums from the city council guess why my rates are going up. Atrocious.

We recently offered on a likely leaky dwelling (although it had never had a claim lodged under the weathertightness scheme). We discounted their asking price by 23% in order to do the remediation on the four-story stand-alone house. And at that, we figured our remediation costs could well have been an underestimate - so we made the offer conditional on an investigation/report from a licensed building surveyor. Needless to say, they did not sign. Month or so down the track, someone else paid the full price.

This problem looks to be never-ending.

Although I appreciate it is cold comfort when you were looking to purchase the property you have almost certainly dodged a bullet there.

It's not just the money wasted to remedy, it is the time it is inhabitable, the stress of actually finding the finance for the works (certainly not from our fair weather friends in the Aus-bank cartel waaay to risky) and the stress of the legal process in recovering the funds.

Give yourself a high five for not going down a road I have been down and it was terrible experience.

Yes, we are not that fussed to have missed out - in fact as you suggest, we are probably relieved!

We factored in not being able to live in it for 8 months while the building was wrapped and the remediation done. We had both the purchase price and the remediation financed (cash) so no problem there - and we wouldn't have been making any kind of legal claim on anyone; we were just going to get it fixed. That's why our offer was conditional on a building surveyors report (not a building inspection, we'd already done that) - as we wanted to be sure on our estimates. My guess (and the guess of our builder) was that the building surveyor would have thought we'd have underestimated and of course then if that were the case, we'd have either lowered our price to compensate or just walked away from the offer.

I think it horrible for everyone who ends up with one of these leaky buildings unknowingly. We were going in wide eyes open... against the recommendation of our builder (hence he insisted we make the offer conditional on a professional building survey done). The building surveyor that appeared in the documentary last night kind of implied NZ is in a hopeless situation in this regard - and the true capital cost will be beyond anyone's imagination.

Well this is the hard bit. Actually doing things the right way. To build good apartments, safe apartments, you will need competent people from bottom to top. And then you will need competent supervisors who ensure that corner cutting cheats, incompetent idiots etc are caught.
But governments, who are even less capable than their average citizens, who may in turn be less competent than their peers in other countries, always want an easy way out. Like price control mechanisms, tax, levies and duties etc. And governments are unaccountable, as they represent the tax payer, so holding them accountable is impractical. You can vote them out, but there will be no restorative response (hence full unaccountability really). And they are gone sooner than a dodgy building company announce its bankruptcy.
We need competent supervisors, that can be hold accountable for their performance.

It sure is unbelievable ! The fact that we have multi-level buildings that have proved successful over time shows that it can be done. Which brings us back to why this problem continues. (As I looked at Hobsonville on Google I could see buildings which had "leaky building" all over them

Kate - I watched it. What a clusterf***. Another building industry scandal. What is wrong with us that this type of thing keeps happening!

Yes, it is that! I think first and foremost, architects are responsible as many of the problems seem to be design and specification faults. Perhaps for multi-unit developments (and architecturally designed single homes), it is the architectural firm that should conduct the build inspections and sign-offs, right through the build process. Then the buck starts and stops with them.

Many architects place aesthetics over functionality.
This has caused issues, is causing issues and will continue to cause issues..

I have watched this progress when it was first brought to light in 1994, and we are now entering leaky home building 2 syndrome.

If you want to know what the mentality is like that allows this to happen, you only have to watch some of the Grenfell tower inquiries.

It all starts at the top.

It's certainly a moral problem.

Greed, and entitlement...the entitlement to take the profit for oneself, cut corners, dodge responsibility and leave the taxpayers to pick up the bill.

It's one big clusterf$%* as a subset of a humungous clusterf$%^ (the housing system)
Debacle.

Had been waiting for it to come out. How are we ever going to convince people to accept a real shift towards high density housing in our cities, when we can't build anything that anyone has any real confidence in? We can barely do a good job on single story dwellings. Just a quick look around at your average construction site... it's appalling. We would need a massive overhaul of the whole system, and that's not likely is it?

Here is the Prime Documentary "A living Hell"
https://www.primetv.co.nz/a-living-hell-apartment-disasters

Who in their right mind would buy an apartment
Who in their right mind would buy an apartment off the plans - with 3 year delivery

Apart from naming Fletchers and MBIE, there is an unwillingness to name the builders

Tulips in the winter of 1636–37 were better value (and less inflated) than the current housing stock in NZ

I feel your sentiment. However inflation is caused by money printing & the money supply is increasing at over 10% per year at the moment.
I expect that we will keep seeing sustained raises so long as the money supply increases at this rate.

lol

Auckland median price increase in 3 years to March 2020 was 5%
By September it was 12.5%
Now, in March 2021, it is 27%
For the 3 years to November 2019 it was 0.8%
Cyclical

The tax rules for residential property investment needed to be changed. But that would cause property values to fall. There was too much exposure for the banks based on the equity positions of too many owners. So prices first had to rise higher. Covid was the perfect excuse. Drop interest rates and drop LVR's. They knew we couldn't resist. Even in a global pandemic. A nod and a wink. You can't loose. Buy, buy, buy. Then out comes the needle. Insert carefully and hope it doesn't pop. Will the voters understand that the paper gains of the last 6 months are not theirs to keep? Probably not. Will this government and successive governments stay the course? Probably not

We're well past tinkering around the edges now AJ. I think we're more likely to see the destruction of fiat currency and significant changes in economics and politics over the coming decade or two.

It won't matter what a house is worth in fiat currency - it will be meaningless as its value of a store of wealth no longer means anything to people.

Interest.co.nz "Helping you make financial decisions"

It's pretty simple really; buy houses

Or cryptos, or kitten paintings, or shipping containers. Really just buy anything.

Do not under any circumstances hold onto cash money, unless with winter approaching you need to keep warm or think you could sell a cash paper-mache statue of the glorious leader.

Comment sponsored by B&T?

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Prime Minister Jacinda Arden are you too waiting for another house to be sold near you just like RBNZ governor Mr Orr is waiting before you pick up the phone and speak to Mr Orr as enough is enough and no more wait and watch.

If you need arguments to throw away resistance from Mr Orr and his like minded people, come to comment section in interest
co.nz :)

I am laughing all the way to the bank.
With well over 70% of all sales to non investors such as FHB and movers surely it is obvious the government is targeting and blaming the wrong people and reason for the increases.
Hello Hello is anyone home in Wellington.
Why not come out of your holes and talk to us.

Let's hope this cycle keeps repeating itself, month on month! It'll be a doozy to hear from those that lose when the cycle turns.

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I'm not sure if people are comprehending how seriously bad this is. We're destroying what we thought was 'good' and the future is now very uncertain. Finance and politics may not be the same now in 10 years time because we're heading down a very unsustainable path. High debt, social division and the destruction of the value of currency are extremely dangerous to political and economic stability.

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Have only heard about revolution....time to see one in future as history has proved that no change without revolution, only hope is not bloody.

Political system has run its course, what next as Mr Orr will say wait and watch.

Probably won't be a good time to be working in a real estate office, given the role of the industry in actively preventing and reasonable measures being taken to avert or address the crisis.

Exactly. I purchased more gold today.

But...my property portfolio returns? That's what matters! Not society!

Agree. The blinders are on nice and tight though. We're headed down this path come what may.

dp

To get the same return you would need to deposit $16,130,000.00 on a 1 year term at 1% p/a tax free!!!

Central bankers really have screwed this up. Although looking at Dalio's research it seems to be a natural trend in any fiat currency and we're showing all the signs of the end of a long debt cycle where the value of the fiat becomes meaningless. What usually happens next isn't very nice (for a decade or two).

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Ardern and Robertson should be hanging their heads in shame. Labour the party of the working class, sort out poverty ...etc. Yeah right.

Wait for it! Quick draw Jacinder will come up with a new law enact it with no consultation and blame all in sundry. Look in the mirror?
P.S Why is Mallard still there?

DTIs required!

Watching an auction today in Christchurch it looks like the market is still running red hot some of the prices paid are breathtaking

That's my feeling as well. Went to an auction yesterday to bid, and got blown out of the water. April numbers are going to be just nuts.

https://www.newshub.co.nz/home/money/2021/04/unsustainable-real-estate-i...

Now even the industry wants...so why not advise governmt or for a change lobby to stop Interest only loan and DTI.

RE industry will do no such thing as are crocodile tear and not to blamed as they are doing just what Jacinda, Robertson and likes of Orrs are doing....shredding crocodile tear with no intent.......

I'm watching 4 RE agency auctions today with over 50 places being sold, and its a safe bet to say that April is going to be even higher. Govt restrictions seem to have just brought out even more buyers than before, and bidding is nuts. Properties selling for really crazy prices now.

Ok ...So will wait and watch ....

Whatever the data, whatever the ground reality fortunately or unfortunately Mr Orr supported by Mr Robertson ins in WAIT N WATCH mode.

Nothing left to say any more...

Never fear, Labour has the answers for the depressed anxious children they are disenfranchising with their housing inaction https://i.stuff.co.nz/national/health/124844399/government-to-expand-sch...

Yep, total ambulance at the bottom of the cliff stuff because they don't have the intelligence/courage/ability to push back against the RE lobby, who are pushing the people who voted for them off the top.

Yvil and I and a select few others should be formally recognised as sages of Interest. If only you had listened to us 3 or 4 years ago when the likes of Retired Poppy and sundry other near-do-wells were calling for lower prices. All that was required was an open mind rather than demonstrating the Dunning Kruger effect.

Now all we have is endless complaining and moving to Oz.

To infinity and beyond eh TK! But didn't Yvil sell because he thought prices were going to fall?

Price rises should slow in theory, but even post the announcement there have been some very punchy sales achieved in prime locations. $5m for a Whangamata waterfront knockdown, $2.6m for an average villa in central Wellington etc etc Where does it end? It makes London look cheap.

Social division and financial/political instability/collapse if history is correct.

Which has taken longer than just this last year or so to build to what we have now.

Yvil sold his inner auckland shack and lost out on 25% capital gains.

I might, if you didn't persist with the fantasy that there are apparently hordes of people out there who a. were in a position to buy a house 3 or 4 years ago and b. didn't, because of what some random anonymous commenters were saying on a comment forum.

And what of those who are coming out of university and entering the workforce now?

There is no longer a social contract between those who own homes an those who do not.

Hard to say Te Kooti, as it all depends on your circumstances if a buyer entering the market. We bought our current home 3 years ago (March 2018) at a price that I thought quite OTT at the time. But we had sold our house - this one was perfectly located - and we were 'living' on our son's sofa at the time. We were cash buyers - so affordability/mortgage didn't come into it.

Thing is, based on household income, we bought at a price a bit over a 5:1 ratio at that time and based on the current 'market' price, we'd be talking an 8.5:1 ratio. How ridiculous is that? To my mind prices were already too high in 2018.

In 2015, My son (same street, same suburb, roughly similar section/house size) bought his place (the one with the sofa we were camping on in 2018) at a 3:1 ratio (based on only one income).

Anyone that thinks prices won't return to the levels they were just 5 years ago, is taking a gamble to my mind. But then, paying rent is worse. Something is gonna break - the result will either be massive house/rent price drops or more folks living in cars, tents, garages, containers and the like.

Agree Kate but when greed and ego at play, no logic works.

Of course anything is possible, but returning to 2016 values seems very unlikely. It seems NZ was hit by the perfect storm for higher prices - and there are serious failings in our ability to build affordable accom of a decent standard. The fact our prices are so extreme is as much a sign of our own ineptitude as NZ being a desirable place in a pandemic - nothing to be proud of.

Why unlikely? We're only talking about a return to affordability - not dirt cheap prices in comparison to incomes.

Think about it - unaffordable prices cannot be sustained. Neither can unaffordable rents.

If only we all had a deposit 10 years ago... ridiculous comment mate.

.

If nobody was to buy or sell a house in the next 4 months what happens to the currency supply?

Housing prices are unsustainable & are overvalued. This has led to over-confidence & overspending. This won't take long to reverse when interest rates start rising. The NZ economy is likely to suffer because of the large amount of debt it has taken on & a relatively small productive sector to repay it.

The government set the rules for the Reserve Bank with a focus on maximising employment & keeping CPI between 1 & 3%. Meanwhile asset price inflation has been ignored.

NZ is now ignoring global inflation pressures & it will only be a matter of time before NZ's heavy investment in residential property will have a hard landing from an increase in interest rates.

A lack of supply of skilled labour & materials will result in a significant period of stagflation.

Interest rates need to increase & money supply decrease so that asset price inflation can be reigned in.

In my opinion NZ's productive sector will be too small to counter a failing housing market & GDP will take years to recover.

Interest rates are not going to rise, A Orr made that very clear., I'm not saying this is right but it is so, Orr even said he would still contemplate a negative OCR if needed. It is foolish betting against the Reserve Bank.

Agree that Mr Orr by himself will do nothing nor the government otherwise when know that interest rates will be low or even negative any sane person, if interested in controlling housing ponzi will go after speculative demand but not orr nor jacinda.

'Interest rates are not going to rise'

What time frame are you setting to that Yvil?

1 year, 5 years, 10 years, 20 years?

What I mean is that I believe there has been structural change in the Interest rates in NZ, many expect interest rates to return where they were maybe 10 years ago because of the cyclical nature but I think it has structurally changed and low interest rates are here to stay for the foreseeable future. Of course no one knows for sure where interest rates will be in 10 or 20 years

Good insights, Tony.

Anyone attend the auction in Bruce Mason today? It was depressing, good time for FHB to grab a bargain.

Depressing in what way?

If we scroll back the chart for the median price in NZ all the way back to Jan 1992 it shows it being at $105'000. If we double it every 10 years, so double it three times to get to Jan 2022, we get to $840'000, the median price now in March 2021 is at $826'000. It looks like house prices in NZ do double every 10 years, even though many think it's impossible

Who said it's impossible? I know I didn't.
What I and others have said is just because they have doubled in the recent past doesn't mean they will in the future.
I would be totally shocked if they were double their current prices in 10 years time. One of the main reasons for that is that we have nearly exhausted the stimulus provided by repeated cuts to the OCR over the past 10 years.

Another comment sponsored by B&T? Put some disclaimers mate.

Grow up b21

So you don't deny?

Still a childish comment

Just answer the question if you still have some credibility, should not be that hard. Are your comments sponsored?

If you look over a 30 year time frame yes, but extend it to 50 and not so much. Factor in inflation and it doesn't look so rosy

I look at it as far back as the graph above allows me to

You look as far as it supports your narrative plus the graph you are looking at does not represent performance in specific areas and can be misleading, low credit environment has supported growing prices but historically this is not normal, you always choose to leave the part of the facts that are most convenient.

Nope, as I wrote above, I look back as far as the chart above allows me to. What do you not understand about this sentence?

But that is a very simple way of looking at it. Is it by design that they have doubled every 10 years?. Factors like record low interest rates have caused this. If interest rates were still at the same levels they were 10 years ago, then the house prices would likely not be as anywhere near as high as they are now. But it can't be sustainable long term to double every 10 years in the future, because where is that extra wealth coming from to create that extra house value. Printed money? Wages certainly aren't doubling every 10 years, and what someone can afford to pay in rent is a percentage of wages. The only reason people can afford to service these a large mortgages when wages haven't increased, is because interest rates have dropped. Increasing the term of mortgages could allow house prices to rise even more, as banks will want to continue lending more and more. We may see more 30 or 40 year mortgages, especially if / when the super age increases, which will likely occur if National get back in, as that was their policy which they passed before getting voted out.

How long will it take the government to realise its not investors pushing up prices ?

It depends on how far the closest mirror is.

It is not JUST investors, but they have been mainly benefiting from the lower interest rates and since they can still use their own equity instead of a cash deposit they will keep doing so until the government changes this.

Yes, but there is nothing illegal or immoral in doing so. Investing in property in NZ makes total sense financially!

It's the Gov that set the market rules that's led to an imbalance.

There's nothing illegal, the morality of it can be controversial, when in order to make a profit you need to take from those that are not as lucky as you are that's a form of usury, in the not very distant past this was considered sin, and still is in many countries.

Wasn't it by design, so the government then didn't have to provide as much state housing and accommodation? But there is now a huge imbalance, likely caused by the interest rates continually dropping, and huge increases in migration into NZ causing huge demand for housing.

The 40% deposit rule for investors worked last time, 2016, so not sure why that wasn't given a chance to work this time before introducing the latest tax grab.
The reason prices were rising was the ease of cheap credit, slack lending, ultra low rates. In other words the money markets are heavily rigged world wide to keep the system going. Houses are not suddenly worth more, rather the dollar is losing its purchasing power. Rising house market and share markets are just the symptom.

Perhaps, for new ones entering the market. But investors who purchased decades ago have had a very good run, and many must now have so much equity in their investment houses, that they can now make a killing.

It is like the market is a naughty child and intentionally increasing more and more after the government makes changes, doing exactly opposite what the experts say it is supposed to do. Perhaps if the government does nothing, like they have for the last 20 years, it won't rise as much? Not likely. NZ risks some major inflation problems, and possibly stagflation.

These numbers are mostly reflecting the market's behavior BEFORE the changes took place.

Oh, do you really believe the changes will affect the market significantly?

I was renting a studio in Singapore not so while ago. Modest condo, nice neighbourhood but not central. To buy one is roughly NZD800,000.

If you want to buy and this is the first property you'd pay $18.6k in stamp duty and would require a 25% deposit.
If that's your second - you'd pay $114.6k in stamp duty. Think about it, it would take 5-6 years of rental income + locked in deposit in the bank just to pay back the stamp duty!
And if you're a foreigner, you'd need to find $178.6k to cover stamp duty!

No wonder the cost of the properties in the hood where I lived in 2014 is the same as today.

What stops the current lot to do the same if they really care?

Update, you can try it yourself here: https://www.moneysmart.sg/home-loan/stamp-duty-calculator

They may seem a bit draconian at times, but Singapore does a lot of very sensible things.

Desperate FHB vs Emotional FHB in the auction room.

They don’t work numbers, they just max out all they have to get what they want.

FOMO at peak and unless FOMO exist, the ponzi will continue in one form or the other.

Have seen people crying in auction and all blames goes to Jacinda Arden.

Important for government and RBNZ to act as fear of house price fall is only thing that can change the sentiment and not statement like from Jacinda Arden and deputy governor of RBNZ that we will not allow the house price to fall.

Also reluctance on part of government and RBNZ does not help as send positive message to speculators and negative to FHB. For now should stop Interest Only Loan to send strong message to speculators.

FOO may occur? Fear of overpaying. Any FHB should be fearful of the amounts they are paying, as they may not get the same levels of capital gain in the future with various changes. They have to also realize that their first home is a place to live, not an investment.

The 40% deposit rule for investors worked last time, 2016, so not sure why that wasn't given a chance to work this time before introducing the latest tax grab.
The reason prices were rising was the ease of cheap credit, slack lending, ultra low rates. In other words the money markets are heavily rigged world wide to keep the system going. Houses are not suddenly worth more, rather the dollar is losing its purchasing power. Rising house market and share markets are just the symptom.

'The reason prices were rising was the ease of cheap credit, slack lending, ultra low rates'

By stopping interest only loan, could have atleast tried to control speculative demand, specially in low rates environment.

Is it slack lending? Banks don't appear to care too much about how much the price of a house has risen over a short period, and the risks of it dropping in value. They seem to be more about making sure someone can service the loan, even if the interest rates increase. How would you suggest banks should be lending? I remember in the 80's banks seemed a lot more cautious, and bank managers had to visit the house and check it all out, and it was apparently a lot more difficult to get a mortgage, even though the interest rates where relatively high.

Nope this can't be true as Mike Kirk said prices had peaked at the start of February!!!!

Great news for those of us who bought while the DGMs were too busy moaning.

Those commenters who encouraged not to buy have serious blood on their hands- very sad indeed!

People here need to think for themselves, opinions are very entrenched. Buying a house is a serious commitment its not just about the financial ability to repay the mortgage its a total mindset and priority exercise. I don't think I would have done it myself but at the time I had a partner that was motivated to buy and when we split I made the decision to buy her out and hold. Turned out to be one of the best decisions I have ever made.

Well done Carlos! We all make our own lives

Love your comments Yvil, you always have an interesting/insightful take on matters.

How about starting a GiveLittle page to buy a whole street where the Prime Minister lives to draw a little bit of attention?
How many houses are there? ;)

She'd love it (with a frown of course), it'd further push up the value of hers & Gayfords house...

I always find it interesting to have a look at what's happening in Vancouver: https://dailyhive.com/vancouver/real-estate-cooling-measures
Because from the start of this whole housing crisis it seems to me that Auckland follows Vancouver then the rest of NZ follows Auckland. And that's going to be the case going down too, I think, as they have similar problems to us.

Interesting article. The bit that stands out is that they can no longer blame foreigners (we banned foreign buyers in NZ) nor investors, (we just hit investors with taxes) but the cause is (how dare they say it…) standard local people driving the prices up into stratosphere. It's the same in NZ but we don't dare point the finger at ourselves, just imagine that, next we could get measures put in place against ourselves to cool the market. No, no, tax others not me.

Hear the comments and agree that safest thing is to sit tight if you own but still need to upgrade but even worse for first home buyers. The housing market is absolutely Orrful for these folks. Can't work out just what is the biggest driver of it is; Adrian Orr's cheap money or the ~165,000 (and counting) returning MIQ immigrants who all need to be housed but are bringing overseas accumulated assets with them to afford property in a crazy market. Anyway, just watch the pain (and the RBNZ angst) when inflation to its true extent is finally acknowledged and interest rates (the RBNZ's blunt tool of choice) have to start going up again.

"~165,000 (and counting) returning MIQ immigrants" ???

Sorry, 130,600 have been through MIQ up to 10th April. But surely at least 80% of these would have been returnees otherwise why go through 2 weeks of isolation and have to pay the costs for this if you are going to leave again. My point is that returning Kiwis must be adding to an already stretched housing demand.

I don’t really care what my capital value is doing. I care about my mortgage repayments which are far less than I’d be paying in rent and are set to stay that way a long time.

If you are renting you have been absolutely shafted by this government campaigning on a pipe dream of houses for all like they’re going to save you. Prices still going up and rents going up. If you weren’t close to being able to buy before you have zero chance now.

"I care about my mortgage repayments which are far less than I’d be paying in rent"
Spot on LD!