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Big drop in Auckland's median house price pushed the national median down by $55,000 in September

Property / news
Big drop in Auckland's median house price pushed the national median down by $55,000 in September
House on cliff edge

There was a substantial decline in the national median house price in September, with the Auckland market leading the decline.

According to the Real Estate Institute of NZ the national median selling price declined by $55,000, from $850,000 in August to $795,000 in September (-6.5%).

The biggest decline was in Auckland where the median price dropped by $50,000, from $1,200,000 in August to $1,150,000 in September (-4.2%).

However, outside of Auckland most regions continued to post increases in their median selling prices, with the median for all regions except Auckland increasing by $20,000, from $700,000 in August to $720,000 in September (+2.9%).

Apart from Auckland the regions where the median price declined in September compared to August were Waikato -$5500, Taranaki -$30,000, Wellington -$15,000 and the West Coast -$13,000.

The median price was unchanged in Northland, and all other regions posted median price rises in September.

The overall market was obviously affected by lockdown restrictions, with 5385 residential sales recorded nationally, down 37.9% compared to September last year.

In Auckland, where the lockdown has been toughest, sales were down 55.3% compared to a year ago.

The interactive charts below show the monthly median price and sales volume trends for all regions.

The comment stream on this story is now closed.

Median price - REINZ

Select chart tabs

NZ total
Source: REINZ
Northland
Source: REINZ
Auckland
Source: REINZ
Waikato
Source: REINZ
Bay of Plenty
Source: REINZ
Gisborne
Source: REINZ
Hawke's Bay
Source: REINZ
Manawatu
Source: REINZ
Taranaki
Source: REINZ
Wellington
Source: REINZ
Tasman
Source: REINZ
Nelson
Source: REINZ
Marlborough
Source: REINZ
West Coast
Source: REINZ
Canterbury
Source: REINZ
Otago
Source: REINZ
Southland
Source: REINZ

Volumes sold - REINZ

Select chart tabs

NZ total
Source: REINZ
Northland
Source: REINZ
Auckland
Source: REINZ
Waikato
Source: REINZ
Bay of Plenty
Source: REINZ
Gisborne
Source: REINZ
Hawke's Bay
Source: REINZ
Manawatu
Source: REINZ
Taranaki
Source: REINZ
Wellington
Source: REINZ
Tasman
Source: REINZ
Nelson
Source: REINZ
Marlborough
Source: REINZ
West Coast
Source: REINZ
Canterbury
Source: REINZ
Otago
Source: REINZ
Southland
Source: REINZ

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98 Comments

Oh no, look at the photo, the house(s) is about fall down the cliff!

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5

Figuratively speaking, of course. But if that is so, then the greater concern, figuratively speaking, should be for the fate of those in the household at that moment.

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2

It's those at the base of the cliff I feel for.

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2

At the bottom of the (short) cliff is a trampoline, and under the house are rocket boosters 

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9

Inevitably last winter and Spring mania re sales would not repeat. Reversion to 2019 sales now baked in. Prices will flat line and fall more as global slowdown plus stagflation take hold and rates rise. Party over 

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9

Bit tough in lockdown Mike, as Auckland September sales lowest since Fred dated Betty. 

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4

Wait, Fred dated Betty before he married Wilma? Childhood...ruined...

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6

So far you have been great at calling the opposite of what actually happens Mike. People have been calling the end on the party for 10 years and the band is still playing. Its going to take interest rates rises for the prices to flatline or Evergrande to collapse. Both are entirely possible and highly likely but if neither happens and we come out of all lockdowns to level 1 by Christmas then the property market will go nuts again over summer.

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10

. Its going to take interest rates rises for the prices to flatline or Evergrande to collapse.

Really? I thought a nuclear holocaust and a return of the black plague could be present but the sentiment would still be positive. A hologram of Bindi Norwell talking about pent-up demand and Ashley Church nonsense being generated weekly by an algo.   

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3

Even Bindi couldn't stand the sound of her own bull**** anymore.  Left and been replaced by bad-taste eyeglasses woman.

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9

Hahaha if I see that stock image of eyeglasses woman staring back at me from Stuff one more time I'm buying a swag and heading for the hills for good.

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6

Most Aucklanders will be waiting for their deferred Council  Xmas present to set the benchmark for their property. Amusingly both the RBNZ and Auckland Council have technology difficulties  during Covid lockdowns . 

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2

The avg price in Auckland is what, 14x times the national avg household income?

That's astronomical by the standards of any country, any time period & personally, I don't see more than 2019 levels being sustainable in the long run.  Continued price increases need to come from either increasing debt, or general wage inflation.  Neither of which I think are sure things at present.

 

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12

There’s a lot of cashed up parents out there ready and willing to help there kids into a home 

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1

Get In quick in my opinion. Could well be a stampeed this summer. Few negative stories like this. Risings rates? Right now may be the best time in a while to sell.

Or not. Maybe we'll hit the moon instead 😂

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0

Shrewd investors will capitalise on perceived price weakness - cementing their position for the next market upswing.

Well located property remains a prime investment for the long term. (But you already know that.)

TTP

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6

I could hear your voice reading that, with the Property Brokers jingle playing jauntily in the background. A real flashback to about 10 years ago, thanks for the memories.

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14

What about shrewd renters like yourself TTP? Are they continuing the capitalise on rising rents...is that why you are renting?

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0

I'm a reluctant, long-term renter.

As everyone knows, renters underpin the success of property investors/landlords.

Learn from my mistakes...... Get a footing on the housing ladder.

TTP

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5

What happened to your investment portfolio? Evaporate?

It scares me that people believe you and give you upticks with comments like these that are clearly made to mislead.

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4

If any weakness starts occurring in prices, there's a place that fixes them.

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1

Agree on balance we are near the peak. (Unless Orr and his merry Fools give another Adrenalin Shot) 

See the blog from squirrel who would normally be spruiking the market.

https://www.squirrel.co.nz/blogs/housing-market/a-different-truth-about….

Maxed out Borrowers, Tighter LVR's, potential DTI's and 1 yr interest rates at 5% in 18 months (Tony Alexanders prediction) would suggest FOMO and current pricing froth may disappear.

To really reverse this market will probably take a Black Swan event

 

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1

The property plunge protection team is being deployed as we speak.

 

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16

There will be another report out shortly contradicting this one

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15

Just look at anything published on One Roof!  Every article is about how much something sold for... 

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2

if you look at one roof sales averages per suburb, it actually shows a bunch of suburbs in Auckland, where avg prices in Q3 are now close to 2019 levels.

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1

Just heard the news on a commercial radio station (with many realestate advertisers), they announced the year on year increase and ignored this drop. Classic.

 

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2

That trick is as old as the hills.

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2

Wasnt there a headline a couple of days ago about prices skyrocketing during lockdown? Can someone better versed in numberwang than me ELI5?

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4

Yeah, I saw that. Hard to mesh those 2 articles up.

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1

That was QV, whose values are based on sales during the previous three month period.

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4

See my other comment. This article is written based on the median price. The House Price index (which is more accurate) rose this month. But the select reporting on this website ensures negative headlines ...

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8

Yes.

And could have been distorted in Auckland by a proportionally greater number of off the plan transactions for cheaper townhouses, not reliant on open homes.  

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3

Personally Ive not explored in detail how that index is made. Or changed over time. I see comments like this but I don't take it at face value anymore than wider inflation measures.

I'm pretty simple. If I want an average house, in this suburb, what's it going to cost me.

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0

One uses Median and one uses averages. Averages (which is QV's method) can be distortionary. One high house sale can lift the entire average ie 9 houses sell for $1 Million and one house in the area sells for $2 million the average will show house prices are $1.1M even though only one house sold above that level,

The median however looks at what the 5th and 6th house (out of the 10) sold for - in this case that would be $1 million and more reflective of the market.

REINZ who uses median does tend to be a better measure of what most houses will sell for in an area,

 

 

 

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4

The average is more influenced by existing home owners trading higher and higher between each other (on paper), the median will be more influenced by FHBs in the real world, who need real money.

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6

Exactly, these existing home owners where if the average house price was $2 million it wouldn't make much IOTA of difference.  Which is where the potential flaw is with current house price inflation.  If it's driven predominately by existing home owners buying and selling to each other for ever increasing amounts, or leveraging equity to rentseek, then how sustainable is it?  

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3

Correct.

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0

This will be reason enough not to raise rates any further. Petrol at $3/l by the end of the year... we'll grind disposable income to a nubbin before allowing property to correct.

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16

Yep predicted $3 petrol by Christmas some months ago. Cannot be that far off that now for 98 in Auckland. Petrol never really went down when the cost per barrel was zero and they couldn't give it away, now its back over $80 and climbing. We are going to get smashed at the pumps.

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4

Lost track of pump prices when I brought an EV last year...

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4

I'd be back in an EV in a heartbeat if there was a suitable one available (rural, heavy towing required).

Snapshot of Hastings prices, yesterday:

Diesel $1.629

95 $2.609

Missed the 91 price, I don't use it.

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0

Suspect we are 2-3 years away from some real options in that space.

Lots of very cool (and very fast) EV SUVs and sedans now coming out.

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0

Yep, only another decade and that bad boy will have paid for itself*

*Minus depreciation

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3

Maybe 2 decades and 1 mil km's.

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1

But raising the OCR should strengthen NZ dollar, and help mediate the cost of fuel. 

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2

If we let inflation out of control, petrol at $3/l by the end of the year, we would lose lots of businesses, lots of people would lose their jobs. The housing market would face a more severe correction. 

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0

Yep that's a concept called stagflation - alot and I mean alot of talk about this in the international press at the moment. It's central banks worst nightmares and one of the reasons why the OCR rises - is to avoid stagflation occurring.

Requires a delicate balancing act. Read todays article on interest.co.nz - it covers off the wage/ price spiral which is usually a pre-indicator to stagflation.

https://www.interest.co.nz/opinion/112726/new-zealands-inflation-set-hi… 

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4
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0

and this was pre the latest OCR increase and new LVR rules for first home buyers. Could very well be by xmas a fear of paying too much start to hit the market -particularly as new supply starts to hit the market.

Lower Hutt could be a classic example of this - one of the biggest percentage increase regions in the last 12 months - attractive to investors and first home buyers, as of this morning 272 houses on Trade me- highest amount since 2016 - 35% of which are new builds. Interestingly median house price is like Auckland down 50K since August  

 

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2

Inevitable. 

 As soon as lockdown lifts the properties will be flooding onto the market.  If you are thinking of selling, get out before the stampede.

For those that think not, you should send you CV's to Evergrande.

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11

Don't know about that - as you have to buy/sell in the same market if a homeowner, given rental prices are completely out-of-whack as well.  It's a question of money-down-the-drain on rent; or stick it out where you are.

Perhaps we have seen the tail end of the buy-a-dumpster, bowl-it and build townhouses mania; e.g.,

https://www.stuff.co.nz/life-style/homed/housing-affordability/126331058/developers-pay-5145-million-for-centuryold-house-in-lower-hutt

I just can't figure who the market is for all the two-story, no section townhouses we're seeing around here. Two story is not a suitable downsizers for the elderly - so they must be aiming at FHB DINKY's..

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2

FHBs and investors.

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0

Lots of 1 bedroom townhouses being built in Lower Hutt (close to Taita) by Williams Corp and most of them are priced at 630K, so expect that to drag down REINZ stats.  Quite a distortion of the real value of homes in the area though.

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2

For anyone wondering how this can be correct, it is a result of selective reporting. The author of the article has gone out and picked the median house price to report on because it fell. The same release today talks about the House Price Index which has continued to increase. The House Price Index is a lot more reliable... Further details at https://www.reinz.co.nz/residential-property-data-gallery

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11

Got to love selective reporting, sounds like the fake inflation numbers as well. Very disappointing how we get treated like idiots. Do people actually believe everything they are told ? We have ended up being a nation of sheeple.

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3

I laugh again, lock down resulted in less of the high end hitting the market, and in general people listed as they needed to sell not wanted to. The result, low prices. Once we get out of lock down in 2028😂 it will rocket back up again

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6

With rising interest rates and rising covid deaths you could be quite off the mark.

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6

Surprise surprise Brock is back shouting from the sidelines wanting people invested in housing to fail.

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3

Hi Mr Frank,

If you are unable to handle being exposed to viewpoints that are more aligned with reality than your own, I would politely suggest getting off the internet.

 

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8

Didn't you say the grass is greener in other countries? 

If you have no faith in NZ then I might not be the one to leave.

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4

Faith - "strong belief in the doctrines of a religion, based on spiritual conviction rather than proof."

Who needs critical thinking and logical reasoning when you can have faith!

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8

Grasping at straws now Brock. Sorry you missed out on the hundreds of thousands by standing on the sidelines.

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3

You know nothing about me.  I don't really like clowns, so let's keep it that way.

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5

He is sounding a lot like someone who was previously banned. Can't keep away from here!

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4

I would rather have a fair and balanced market any day then "faith"

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3

Theres a difference between wanting people invested in housing to fail and wanting prices to come down from the current batshit crazy levels.

Who's to say that old mate isn't in the second group.

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6

Yea okay, jog on now. 

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1

Nothing to see here. Unless people were desperate to sell most would have not listed.

I agree with other comments here that the HPI is a better figure 

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8

So there were less listings and prices still went down.  Very interesting...

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0

You’re gonna get a lot more noise with a smaller data set 

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2

Not very interesting.  HPI went up.  Clearly the composition of sales was different.

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4

Was there meant to be a minus in front of the $30,000 figure for Taranaki? The NP market has been close to red-lining for a while now and I'm not convinced the fundamentals support these brave new levels.

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0

NZs debt loading and asset prices may be paraphrased from a certain band "Loaded like a freight train. Flyin' like an aeroplane". Staying with this context, let’s consider what might happen when the engines, money printing and loose bank lending, are shut off from the cockpit because the pilot (Govt) have no other choices left. None of the Government ministers have anywhere the real experience and time up that Captain Sullenberger did as a pilot when he performed his miracle landing.

Text books will be written about the last five years, and the next five years, to be issued to future students as a “how not to” manual.

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3

Articles lately = One minute - article with house on fire, next minute - article with a house falling off a cliff. Repeat the above daily...

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2

It's all about the maximising the page views and ad impressions.

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3

You don't need to know much or be accountable these days for having your thoughts published in the media.

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1

Doesn't seem to add up with what's actually happening in many places unless it's small townhouses selling at less than the average price that's affecting the average.

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1

This article included the OCR raise as one of the reasons, OCR wasnt even raised till this month, gotta laugh...

 

https://www.nzherald.co.nz/business/covid-19-coronavirus-lockdown-hits-…

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0

Hmm, RBNZ has been talking about raising OCR for quite a while, last time they didn't raise it was because of lockdown. But banks had already made moves. I don't see your critic about that article is valid.

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0

One thing that hasn't been mentioned is I think the banks are making small tweaks to their lending criteria that make it harder for borrowers. I guess they are ok with not writing much new business over the summer? Then again they might realise high house prices + their criteria are slowing down the number of transactions so will revisit it. 

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2

I've heard this - plus I've also heard its getting hard to get bridging loans at the moment, borrowers need to be within LVR requirements on the bridging loan and banks are refusing to value the house "been sold" at more than the QV valuation.

Friends got caught on this- the real estate agent told then they would get $1.25M on their house but the bank would only lend the bridge based on a sale of $1.1 - which was the QV valuation. They couldn't then make the bridge work and had to pull out on their offer.

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4

There's new changes to law coming in which makes banks require more info from a customer. In particular verifying expenses etc...

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1

This is propaganda/false narrative.

Kiwi still believe take as much as you can from banks & invest in property, seller expectation is increasing on weekly basis.

This is kind of a roulette where current Govt. is guarantying 100% win, homelessness for many & inflation is what this govt has delivered.   

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2

Headline should be:

AUCKLAND HPI BEATS 4,000 FOR FIRST TIME EVER DESPITE LOCKDOWN

or

NZ HOUSE PRICE INDEX GROWS 2% IN SINGLE MONTH

or

WE ARE LOOKING AT ANOTHER YEAR OF 25% HOUSE PRICE GROWTH INSANITY

or just

HOUSING CONTINUES TO BE THE REAL CRISIS IN NZ

 

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7

The headline to this article is technically correct but misleading.

The overall reduction of $55,000 simply reflects that there were a  lot less Auckland houses sold (55%) because of the lockdown. With Auckland prices being higher than elsewhere, this inevitably caused  the median to drop. 

A more accurate headline would have been 'Auckland median prices decline but continue to rise in most other parts of NZ'.

KeithW

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9

Why bother to focus on median when the REINZ HPI is published at the same time?  And with market conditions changing due to lockdown, median seems even less reliable than usual.

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3

Any index will be based on a specific metric such as median or mean. 
Right now, any national index will be problematic. 
KeithW

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4

Care to explain how you think the REINZ HPI is problematic?

Obviously everything has its challenges but I trust something that accounts for composition of sales more than a straight median, particularly now.

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0

Any index will be based on a specific metric such as median or mean. 
Right now, any national index will be problematic. 

Keith, you're one person who will know that looking at both the mean and median (sample size and variance) is how things should be done.  

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0

If mean and median is all you know, you might have disappointed your high school teacher.

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1

Yes the headline is indeed misleading as exemplified by the figures:

Auckland median down $50'000

NZ ex Akl median up $20'000

Yet all of NZ median down $55'000 which seems mathematically illogical until one understands the median and the effect of much fewer (expensive) Auckland houses selling.

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2

Earth-shattering headline-bannered "Breaking News"! 

Of course this may scare everyone playing the "pass the parcel" house-flip game for profit (rather than accommodation), but it also says a lot about how slanted our economy must really be.

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2

When capital gains turn into capital losses why be a landlord? 

As sales pressure then builds the downward slide will get steeper. 

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3

Here are some more balanced numbers using the HPI

                     Jul   % change   Aug   % change   Sep

All of NZ     3937      +1.9      4012       +1.9       4088

NZ ex Akl   3969      +1.6      4033       +2.9       4149

Auckland    3897      +2.3      3985       +0.6       4009

In conclusion, Auckland prices have slowed to almost no gain since lockdowns, the rest of the country's are still going up strongly

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3

Nope.  Check the graphs.  Wellington prices are trending down, while volume is trending up.  Early days but it is a trend.

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2

The report says Auckland is up 0.9% month on month.  I agree that your figures show 0.6%, and I too recorded 3985 from last month.  Probably what happened is that there were some late adjustments to last months figures.  That sort of thing seems to be fairly common.

One thing to note is that Auckland City HPI is actually down 1.9% since August.  It'll be interesting to keep an eye on that.

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0

The regions outside Auckland is supporting the market and prices.

This is what a healthy property market should be, self-sustaining.

Can't wait for Auckland to come back online.

Be quick!

 

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1