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House prices continued to increase in most parts of the country in August but declined in New Plymouth, Palmerston North, Dunedin and Invercargill

House prices continued to increase in most parts of the country in August but declined in New Plymouth, Palmerston North, Dunedin and Invercargill

Residential property prices continued to increase in most parts of the country in August, although there was a decline in the rate at which prices increased, according to the Real Estate Institute of NZ's House Price Index (HPI).

It shows that across the entire country, house prices increased by 2% in August, but that was down from growth of 2.4% in July.

However there were significant regional variations, with price growth in Auckland declining from 3.3% in July to 2.3% in August, while across the rest of the country excluding Auckland, price growth was flat at 1.7% in both July and August.

The HPI adjusts for differences in the composition of sales each month, so is less affected by changes in the types of properties sold each month than median or average prices.

It shows that although overall price growth slowed in Auckland during August, the region was split in two, with districts in the north and west showing increasing price growth while the central and southern districts all showed slowing price growth (see the table below for the full district-by-district figures).

In other main centres the rate of price growth increased in August in Tauranga and Wellington, but declined in Hamilton, Christchurch and Dunedin.

There were only four cities where price growth turned negative in August, meaning overall prices would have declined compared to July, they were New Plymouth -2.7%, Palmerston North -0.5%, Dunedin -0.3% and Invercargill -1.7%.

However August's figures need to be treated with caution because of the substantial impact the Level 4 lockdown had on the market.

It could take a couple of months for the market to fully recover once lockdown restrictions are eased, which means it might be November before more reliable data is available to track market trends.

REINZ House Price Index
Monthly Percentage Change
    July 2021 August 2021
  New Zealand 2.4% 2.0%
  Rest of NZ excluding  Auckland    
  1.7% 1.7%
  Auckland Region 3.3% 2.3%
  Rodney 2.0% 2.9%
  North Shore 2.5% 3.4%
  Waitakere 2.5% 3.0%
  Central Auckland 3.5% 0.9%
  Manukau 4.2% 3.6%
  Papakura 6.0% 2.5%
  Franklin 4.1% 2.1%
       
  Whangarei 1.0% 2.5%
  Hamilton 2.4% 0.9%
  Tauranga 0.5% 3.4%
  Rotorua 2.4% 0.2%
  Hastings 0.9% 8.6%
  Napier 0.0% 1.5%
  New Plymouth 6.0% -2.7%
  Palmerston North  1.4% -0.5%
  Wellington Region 0.6% 1.7%
  Porirua 1.8% 5.1%
  Upper Hutt 1.1% 2.5%
  Lower Hutt -0.2% 4.0%
  Wellington City -0.1% 0.1%
       
  Nelson -0.3% 2.7%
  Christchurch 4.7% 2.6%
  Queenstown-Lakes 5.0% 0.9%
  Dunedin 2.4% -0.3%
  Invercargill 1.6% -1.7%
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62 Comments

Hey Mr. Robertson, does < 3% monthly increase count as "sustainable"? We good?

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17

Bugger, only made 100k last month. Imagine if it slowed to only 1% a month, that would be terrible 😂😂

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8

Another soft-landing in the making - just as we saw after the last upswing.

The market will pause/plateau and then gather pace again.

TTP

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6

Stop complaining. Do you expect me to share some of my gains with you. The problem I notice with such low listings / sales the price movements showing up across my portfolio are becoming very jerky and uneven. 

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2

The word was sarcasm... Look it up dick

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2

Good. Things slowing down a bit. That's what they want, right? 

Anyway, Aussie has the same problem with bubbles and the RBA isn't saying that it has anything to do with money printing and the banks. It's all about ' tax and social security policies'. Not their domain. Govt's problem. 

https://www.smh.com.au/politics/federal/rba-says-surging-house-prices-a… 

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2

And that 'ole scapegoat planning regulations.

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3

Seeing that NZ is so good with property bubbles, perhaps we could send a delegation to China to deal with Evergrande. This is a big issue with global implications (even probably a few NZ properties might have to go under the hammer). This is a key trading partner and we all know 'you can't go wrong with bricks and mortar' so the Chinese really need a few tweaks to get things up and running again. It wouldn't have to be a big team: couple of bank CEOs; Geoff Bascand is now counting the days until retirement; and why not throw in Ashley Church to see if he can teach the Chinese about a bit of grassroots cheerleading and media tactics. 

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12

Why not send the powerhouse of NZ economy, our most valued frontline essential workers: our world class real estate agents and auctioneers!

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11

Sure. Crash course in Mandarin to get the non-native speakers up to scratch. How do you say 'sign on the dotted line' in Mandarin? 

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2

Many Auckland RE salespeople are native mandarin speakers so not a problem eh?

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10

Many. Not all. I think those agents would be the last to sign up for the delegation. They will know Evergrande. The non-Chinese agents (and Ashley Church) probably aren't aware of the who, what, why of Evergrande yet. 

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4

The Church of National

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0

This was always going to come. Chinas population will probably peak next year and they're still furiously building new developments. Some people already estimate that 22% of Chinas urban housing is unoccupied. They're building a gross oversupply, obviously developers won't be able to shift houses that no one wants to purchase.

Supply and demand dynamics actually matter. 

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3

And like Japan, hardly any immigration to stoke the demand fire.

China is in trouble.

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2

This was always going to come.

I see. Everyone in the suburbs of NZ could see this coming because it's 'all about supply and demand.'

Sounds like a bit of the ol' exceptionalism to me. 

 

 

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0

The demographic situation has been widely reported, even by state media in China. Even CCP are not only on board but looking for mileage from the situation and the oversupply was forecast last year.

Chinas economic panacea is building stuff including excess infrastructure and housing.

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2

OK got it. But Blind Freddy knows that China has an oversupply of housing and an ageing population. Still doesn't mean the price tag of an apartment in Beijing might set you back USD1.3 million (as sold by Evergrande). 

Have you been shorting the Chinese property sector?

 

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1

They need to borrow some of our immigration experts I am sure they could fix the real estate and population problem saving the chinese housing crisis should be no problem (sarcasm intended)

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3

Send a "Delegation" don't be silly lets just send the entire Labour government, it will be better for both countries !!! Labour knows how to pump the market better than a delegation of real estate agents it will be a win win lets do it !

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4

You cannot continue to defy gravity without pouring fuel in the engine and this govt is good to keep the supply tap on.

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5

As long as house price growth remains higher than wage growth I don't think RBNZ will be too worried too much. Obviously trying to ration people to only living on their incomes would be economically catastrophic so they'll do anything to avoid that scenario.

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7

Imagine being a worker diligently sacrificing and saving a few hundred dollars a week from their after tax salary towards one day affording decent home to raise their family, while the government and reserve bank cynically pump house prices a thousand dollars a day, month after month, year after year while the bought and paid for media (with your tax dollars) is saturated with gloating and celebration and real estate advertorials.

How does any sane person avoid developing a deep contempt for this country and the downright ****ing evil people that run it?

Who in their right mind thinks this is a healthy country to live and raise children in anymore?

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56

Why can I only upvote this once.

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17

I don't think much of western society could be considered to be in their 'right mind' or sane....especially over the period of the last 25-30 years (think build up to dotcom bubble through to now)...like other periods in history...before many on this forum were alive, where insanity reigns and it is only in the history books that people look back and say, 'how could they all be so stupid?'

It may well be that in 2040 or 2050, people will look back and say....how could people think that house prices could rise faster than wages over significant periods of time - where they blood crazy....well yes sir, they were/are.

There appears to be a correlation between the retirement of the G.I.'s and the boomer generation taking over management of society where seem to have lost our way - and in many respects I don't think we will find our path again until the boomers step aside and allow sanity to come back. That isn't a dig at that generation, just simply an observation that things haven't been going that well since they came to power nor do they appear to have the desire to create any solutions - but they are clinging to control.

If the 4th turning is upon us, that explains the social strains we are seeing and we won't find clarity and progress until the boomer cohort realise they are doing more damage than good by pushing an agenda that is clearly not working.

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9

Nothing else in western society comes close to the level of stupidity in New Zealand (Canada gets an honourable mention).

How can Jacinda justify Grant Robertson keeping his portfolio when his actions or lack thereof for the past four years have completely buggered the place.

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10

Well I hate to point this out Brock but prior to the last election if you were here and counted the upticks on political issues about 80% of the people on here were strong Labour supporters. My how times have changed with you now getting 33 upticks for sticking it to Labour. So people voting for Labour didn't get what they voted for. Personally I'm not surprised, I could tell it was all hollow from the get go and never voted for Jacinda.

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4

I gave them and their manifesto of lies the benefit of the doubt in 2017.

I will never, ever be fooled by them again.

 

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3

Me too.

My gut feeling was cynical on Ardern, but I came round to her.

But not at last election.

I won't vote for Labour ever again, unless they have a stellar crew on offer.  Unlikely, but you never know.

I like the dude from the Wairarapa. No nonsense, good bloke.

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1

You should support the party that has free abortions for cats

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1

Who? Unfortunately most kiwis given the majority voted for National and Labour both of whom won’t change the status quo. TOP were the only party I saw trying to make a real change re property. 

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9

TOP's change was only marginally less stupid than the situation we're in now. 

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0

Could you please elaborate how a change in tax strategy that creates a simple and very difficult to avoid tax model, that also targets debt speculation, reduces systemic banking system failure risk and promotes v.s. punishing productive work can be seen as "stupid"?

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5

I didn't like the sound of TOP's Land Tax. It only taxed equity in a property, thereby seemingly penalising people who pay off their mortgage. Perhaps I'm overlooking something but it seems like this policy actually encourages debt, and surely has an obvious loophole or two. When I looked at their FAQ I wasn't convinced that they had fully thought through the implications.  Maybe they just need to do a better sales job, or maybe they need to dial things back a little to appeal to more people.

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2

Don’t have to imagine. Great comment

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2

I just ran the numbers and according to the above my house earned significantly more in the last 2 months than I did through all my combined income streams for the whole of last year (very good salary, shares, interest etc). Instead of feeling clever and rich I feel...I dunno, kind of ill.

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2

House price after rising 32% in a year if still rising 2% to 3% per month - What is government and RBNZ doing.

They follow data and it shows that house prices are still running high and the pace may not be $100000 per month as in February but still $24000  per month - still media supports goes government and RBNZ instead of highlighting the stupidity - corruption at best, including headline of this article by Greg Ninness - shouldn't he be highlighting that .........

Only Jenee T makes some sense (Maybe she does not have number of houses and have vested interest or may be she genuinely is true to her profession and wants to highlight).

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13

2*12 = 24, 3*12 = 36.

If increases are still running at 24-36% a year thats not much of a slowdown.

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0

The crazy thing from here is that we can't even allow house prices to rise at the rate of inflation going forward - because of the difference now between the price of houses vs incomes.

A 2% increase on a $850,000 home (i.e. inflation) is $17,000 growth p.a.

A 2% increase on the average (after tax) household income of $85,000 is $1,700.

So even at a 'sustainable growth rate' for housing, i.e. at the rate of target inflation at 2%, the numbers don't stack up. Houses are going up in price 10x wages each year if they both grow at the rate of inflation - i.e. no 'real' growth.

Its completely bonkers.

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12

"A 2% increase on a $850,000 home (i.e. inflation) is $17,000 growth p.a."

IO you are raising concern with 2% growth per annum and here it is 2% per month and still no one raising concern and playing up to government and RBNZ- This is corruption - media included as they are suppose to be fourth pillar of democracy instead are part of corruption.

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9

I think his point is that even if housing inflation was only 2% per annum, the $ value increase in house prices way exceeds wage growth.

Ie. 17k way exceeds 1k, say

And then if that happens for a couple of years it compounds

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3

IO you are also forgetting that those wages are being captured by unadjusted income taxes which collect more as wages increase to cover inflation, i.e. house goes up, your wages go up by nowhere near as much, you pay more tax as if your living costs have remained the same even though your wages went up by nowhere near the rate of inflation.

It really is a mug's game, being a wage earner in this country. We've nuked our middle-class and we're importing people to paper over the cracks, as long as they'll work for less than we charge them in rent. We're basically moving from social democracy to feudalism and charging Kiwis a pretty penny for the privilege. 

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8

it will be in the 1pm presser -- we have slowed house price growth by more than any other country in the world so rejoice that this month you only need to find an extra $5000 deposit and $20,000 extra on your mortgages  all you essential workers 

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3

I just read an Ashley Church article. I get confused by his 'high house prices are good for the economy' and his strong stance on anti landlord bashing. I'm sure he got where he is off the back of some good writing but in my humble opinion there is one of two things going on here:

1. He doesn't get it.

2. He really doesn't get it.

How can a giant debt bubble and young people unable to get on the property ladder be a 'good thing'.

I was reading that the Toronto property market is up 12.6% and they are describing it at 'crisis point'.

They should pick up the NZ herald for a real Crisis!

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10

How can a giant debt bubble and young people unable to get on the property ladder be a 'good thing'

It's been pretty good for him and his target audience, hasn't it? He "doesn't get it" because he doesn't want to. He's a one trick pony and makes millions every year off that one trick. Why would he ever say that his trick isn't really that cool?

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10

I used to read him for a laugh. Now I totally ignore him.

He is an unashamed property spruiker.

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10

Failed Nat party electoral candidate and self-professed property commentator. What do you expect ?

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0

Ask anyone if they received a 2% pay rise every month over the last 12 months, they'll probably laugh and tell you they didn't receive a 2% pay rise FOR the last 12 months.  

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7

Or longer. Many jobs wouldn't have recieved a pay rise in years.

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2

Do the math, even a 2% rise on your salary every month doesn't anywhere near cover it......unless of course you earn a million dollars a year !!! 

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0

You only pay the 2% increase on the house once, you earn the 2% extra income every year.

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3

Its maths

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0

Are we meant to relate to a "slowing of the rate of increase" as a good thing? 

I am "slowing my rate of alcohol consumption increases down". The fact I am drinking more than last month and 30% more than a year ago is not a good thing! 

 

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8

Local liquor shop owner says it's fine as long as it's a sustainable growth.

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5

The general public must still be drinking heavily and I would say its mainly the Koolaide because there are still no riots on the streets. 

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1

.

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1

That was very articulate.

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2

To the point?

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3

Growth may be slowing but it sure as heck isn't slow.

It's almost like somebody wants the word "slow" to appear in as many property headlines as possible to convince us that everything is just dandy.

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4

Read it. Fine. But you don't have to believe it. 

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0

I read NZ  Herald daily, I am disgusted with daily news of capital gains people are making and it is being glorified, adding fuel to fire , I don’t see any editorial that gives any balanced views on the dangers of this for society , the societal impact will be devastating and will change the fabric of society over and above the damage that is evident now

i own my house so it is not case of sour grapes , I also know wider public will pay for the social consequences in more than one shape and forms

I voted for labour despite being very high earner for greater civic good but I am utterly disappointed 

increasing benefits and accommodation supplements simply transfer to wealth the leeches called Landlords in NZ

it’s no rocket science to get some big international construction companies to build cost effective massive housing rather than paying billions to motels or giving hand outs

there appears to be no hope , National did the same and labour has upped the Ante

i feel sorry for next generation 

 

 

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1

" I read NZ Herald daily "

Why ?

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0