Sales rate at Barfoot & Thompson's auctions halves over the last two months as a surge of new listings gives buyers more choice

Time to unleash some more monetary policy support or demand side subsidies then?

That's a miserable result. The market has definitely well and truly turned.

The bottom has fallen out of this market, as expected.  I can’t understand why more people aren’t forecasting price drops?  The only explanation I can come up with is once bitten twice shy.  You’d have to be living under a rock not to see what’s coming. 

Oh, there is a place

A place in hell

Reserved

For auctioneers and their friends

We had a painter do a quote to redo an old small cottage. He wondered how long we were intending to keep the house before totally replacing it with something new. 20 to 40 years was my response.... as I know how difficult and expensive new builds are. Anyway hopefully by then I would either have retired or otherwise expired so that I wont have to worry. I doubt this nz housing scene will be fixed by then and am sure Interest.co will still be raging over every property update 

Do people still really think the OCR will rise above 1.5% if house prices are down at least 5-10% by mid 2022?

Listing numbers are highly misleading unless you look at what is for sale. Rising proportion are not built or even started yet. These are not going to auction either. Owner occupied sales are falling rapidly and proportion of listings that are owner occupied is static or falling on Hibiscus Coast

re nz figures show listings of houses and townhouses are identical on Hibiscus Coast as were a month ago and NSC only 1% higher. The summer surge did not happen and the tide has turned. Time to wake up

There is no reason to be happy for FHB, sales drop not asking price.

The asking price is still way strong and the seller seems to be ready to hold if the asking price is not met. A mass exodus is on the cards in the next few months but there is no indication of price reduction.

The 50 to 60% increase in last year will not go back, it's just wishful thinking. I know people will not like it but that's the truth.

This is Auckland, not regional cities. 

I guess if you want a market crash your always looking for reasons for a crash. IMO its not going to happen, its BAU into the New Year. It will take something epic to see a crash, not going to happen. Inflation is running hot, energy prices are increasing, wages will increase and the leading indicators are for price increases unless inflation can be controlled.

Firm predictions on house prices is a mug's game, better to look at scenarios and probabilities.

This is what I think for 2022:

Large price gains: 2.5% chance

Moderate price gains: 7.5% chance

Small price gains: 15% chance

Small price falls: 30% chance

Moderate price falls: 35% chance

Large price falls: 10%   

Small being 0-7.5%, moderate being 7.5% - 15%, large being 15% plus. 

Thames/coromandel median has increased 44.4 percent over last 12 months yeehaa. Just wait till auckland is released from its shackles and flooding the coromandel region over summer, some will have millions of dollars in their accounts looking for a place to put it.

When we transition from a building profit driven investors housing, to houses for people to live in do we go back to 2010 prices? does anyone know where the bottom is? do the massive cheap developments start dropping price of the properties when there is more choice? Will the economy collapse if the industry loses 30%- 50% when a lot of it is only on paper? Do we still need to build houses? it doesnt feel like it, but we were told it would take decades to correct the undersupply? Interest rates going up, immigration in negative territory, supply achieved, lending restrictions getting tighter, government that is making housing investment unattractive, The NZ Herald being run by One Roof? Barfoot sales rates decreasing every month, more properties being handed in at auction. Are prices still going to increase, not too sure now. The property market needs prices to continue increasing to be viable, but thats not practical. RE Agents making 2 billion in commission over the past 12months. Feels like a massive crash to me. 

Hello, Does anyone have or know where to find the breakdown of the type of properties passed in? Is development property being affected? Or is is the well used middle to low priced properties that are being passed in at auction. A lot of media hype to create sensationalism by grabbing onto a balloons tail and being carried with the wind. 

Slow down Sally. There are a lot of turns on this road. The first ones seem to be happening. But the journey is up & down, & no one is 100% sure on where it's heading. I like the % picks above. Kudos to those who have stuck their necks out. I've saved them for referencing this time next year. We're still not ''building'' the right houses for those that need them - the poor. Ms Woods is buying them, but not building them. No one wants to build them. No margin. Tough for FHB's. So, old stock in the wrong areas will turn into cheap stock unless maintained or upgraded. This is a slow process. Quality is King when buying today, especially location, as mentioned above. I would personally like to see the market settle & drift next year, & maybe into 2023. Risks ahead? There are many but I still think China property is the one to watch. If it goes, who knows.

I picked up my new house plans yesterday after waiting what seemed like a life time to get them. The  architect commented that a number of builders are starting to enquire about jobs that might be in the pipeline. Apparently a number of projects that had been promised for them have been put on ice. 

https://thekaka.substack.com/p/pm-ties-herself-in-a-housing-affordabili…

Response should be that I Jacinda Arden the PM of NZ do not want to see the thouse fall annually but if it moves up from $100 to $150 annualy and if it falls by 5% or 10% or even 15% to $135 is fine as still up annually and good to kill FOMO being reason for stupidity and not just supply or interest rates BUT .......

It has been proved beyond reasonable doubt that only economy in NZ is housing And no politician can even think of not supporting the ponzi specially now after creating the monster.

 I track the Lower Hutt housing market and the wellington market.

Lower hutt has as of today 416 listings (a 5 year high) and double this time last year. current sales are 40 listings a week - meaning there is 10.5 weeks SOH. Something listed today is likely to take until late Feb to sell - considering sales will be few over the last week of Dec and first week Jan.

Of the 425 listings - 189 have been on the market more than a month (45% of all listings).

Approx 50% - 204 of the listings have an advertised price. Some houses list with a price - most are adding a price when they fail to sell at auction or tender. Those with a price - approximately 30% have decreased that price since listing with a price - with the average price decrease been $47K. One house has dropped the price from $1.06M to 900K and is still yet to sell after 2 months on the market.

A buyers market is usually defined as

1. More houses than buyers- usually 2.75 months stock (11 weeks) is a definite buyers market - Lower hutt would be close on this.

2. Majority of houses list with a price and dont use auction or tender as there are not enough buyers to create competition.

3. The majority of houses listed have been on the market longer than 4 weeks

3. Sellers begin to increasingly decrease listing prices in order to sell their house quickly. 

All of the above factors were used to categorise Sydney's housing market decline in 2018-19. The total decline in that market was 12% from the mid 2017 peak.

The thing virtually economists miss regarding property busts, is the massive multiplier through the economy of the housing boom in net debtor nations.

Huge amounts of capital is borrowed offshore to purchase residential property, this cash is immediately injected into the economy as total mortgage debt increases. Some of this money is used to construct new houses, but a lot is used to purchase cars, jet-skis, swimming pools, boats etc. So during the boom years the economy lives beyond it's means via the spending of overseas capital. Like a household that has a net income of 100K per annum, borrowing 50K per annum for 3 years. For the 3 years they appear to be doing very well as they spend 150K per annum. But, after the 3 years the income reverts to 100K less interest payments (with or without capital payments) on 150K of debt. 

This is the crux of the issue. It would be different if the overseas capital was used to facilitate production, such as robotics, automation etc. But, a lot of the money if spent on in installing new bathrooms and kitchens with granite benchtops, in rental properties in low socio-economic areas that have been reno-ed during flips. 

So we have an economy that has a level of economic activity predicated on increasing mortgage debt levels provided from offshore sources. As soon as the level of mortgage debt growth slows the bust begins, even flat property prices is enough to trigger the start of the bust. Property related activities is 20% of NZ GDP, before the GFC it was about 10%. Of note the US figure before their GFC was 20%.

The % sold for the same weeks as article, year on year



2019   2020   2021

57%   62%     68%

52%   54%     67%

48%   59%     62%

45%   59%     62%

46%   60%     59%

49%   57%     50%

56%   58%     43%

49%   53%     34%

47%   56%     



For those suggesting that it is just a normal seasonal trend

Greg, I’d like you to consider seasonality in your analysis. Maybe at this time of the year near Christmas the clearance rate drops from the spring flush results of October? I don’t know the answer, but we do need to consider this.

It will be interesting seeing what happens in the New Year, bearing in mind as well that the new national intensification rules are now passed by Parliament and whether this will push up prices for property in areas deemed highly desirable by developers.

I think prices in Auckland will go flat maybe-5% drop,prices will stay the same if not grow by5% around the rest of the country, major towns and city's like Nelson etc, rising interest rates are the key factor here,,