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The housing market was considerably slower in December compared to a year earlier

Property / news
The housing market was considerably slower in December compared to a year earlier
House on the edge of sharp drop
It's a long way down.

The housing market slowed significantly in December with the number of sales recorded by the Real Estate Institute of NZ down by 29% compared to December 2020, with selling prices also taking a dip.

The REINZ recorded 6755 sales throughout the country in December 2021, compared to 9573 sales in December 2020.

In the Auckland region sales were down  34% compared to December 2020 and in the rest of the country excluding Auckland sales were down by 27% compared to the December 2020.

Overall prices also dipped in December compared to November, with the national median selling price declining by $15,143, from $920,143 in November to $905,000 in December.

In Auckland the median selling price declined from $1.3 million in November to $1,290,000 in December and in the rest of the country excluding Auckland the median price dropped from $770,000 in November to $760,000 in December.

However record median prices were still set in seven regions: Northland, Bay of Plenty, Gisborne, Manawatu/Whanganui, Tasman, Nelson and Southland, while Wellington's median price equaled the record set in October last year.

The regions where prices declined in December compared to November were Auckland, Waikato, Hawke's Bay, Taranaki, West Coast, Canterbury and Otago.

(See the interactive charts below which track the monthly movements in median prices and sales volumes in all regions).

After a year of strong price growth, the national median selling price was up 21% for the year, increasing from $745,000 in December 2020 to $905,000 in December 2021.

Properties also took slightly longer to sell in December 2021 than they did in December 2020, with the median number of days it took to achieve an unconditional sale increasing by two, to 29 days.

REINZ Chief Executive Jen Baird said there were increasing signs of deceleration in annual price growth compared to previous months.

"While the market remains confident, the impact of rising interest rates, tighter lending criteria and changes to investor taxation restrictions are starting to shift dynamics," she said.

"In particular, the introduction of the Credit Contract and Consumer Finance Act on December 1 2021, which requires stricter scrutiny of borrowers' financial health, seems to have had an immediate effect.

"Feedback from several regions notes a falloff in buyer numbers, particularly first home buyers, as a result."

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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

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

Median house price growth

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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214 Comments

Here we go, start of the correction.

Note again the digs at the CCCFA.

Up
8

The CCCFA will be loosened up to a more workable form.  The banks are just demonstrating in real life to the govt for a couple months how unworkable this legislation is.  
House prices will just plateau in 2022 - which are still quite lucrative for sellers.  

Up
17

Government had three years of warnings new credit rules would shut out borrowers: https://www.nzherald.co.nz/nz/politics/government-had-three-years-of-wa…

"We welcome any investigation into the unintended consequences of the new lending rules. In our submissions on the CCCFA law change and new regulations we've set out our concerns all along the way. It turns out we were right," he said.

Why let David Clark touch anything!

 

Up
6

The credit rules are designed to shut out borrowers. Banks won't stop selling them the rope to hang themselves with, otherwise.

Up
19

How many people are being hung? I would guess almost all mortgagee sales are due to change of circumstances rather than banks lending to people who can't afford it, do we have any stats on this?

Regulation for the sake of it is never a good idea, they really need to make sure there is a problem before they regulate and in this case I really don't think there was. 

Up
7

It's a preventative measure, not a remedial one. Nobody is writing regulations because they think it might be fun.

Up
7

Preventing what? The banks were already required to check affordability for mortgage applicants, and as far as I know they have done a pretty good job.

"Nobody is writing regulations because they think it might be fun": I think in this case they did, they were trying to sort out loan sharks (a worthy cause) but as usual they couldn't help themselves and expanded the regulations into areas where it wasn't needed. 

Up
8

But it is needed.... that’s what we are seeing. People borrowing as much as they can get away with... and not enough headroom to allow for a significant rise in interest rates need to be protected from themselves.

 

Up
9

Banks already verify income and expenses, and banks already stress test at interest rates much higher than what they are currently. A few years ago there was tightening around income verification - boarder income, offshore income, etc - and the low default rates suggests that generally the banks were getting it right. There is arguably room for improvement to the way banks fund investors, particularly those who are leveraging equity and/or utilising interest-free loans (which I would add banks have been tightening too for some time) and compelling arguments for debt-to-income and other tools to control an exuberant property market, but the application of CCCFA to mortgage lending is unnecessary. In the medium term, I suspect it will just be a speedbump and many people will just tidy their expenses for 3 months, demonstrate they're prudent, and will be able to obtain loans thereafter.

Up
1

If you can't afford a loan its a fault of prices being too high not credit availability, if anything the rules needed to come sooner. Its no use looking at default rates now when the OCR is still at historic lows, inflation rates are telling us interest rates are going to climb much further we need all the headroom we can get allowing everyone stretching to borrow all they can when rates have only room to move up is beyond stupid. 

Up
5

Default rates were flat in the US up until 2007.  Did that mean there was no risky lending?  Until rate rises kick in, or prices fall, you don't see the stress in the system.

Up
2

The only difference is they're now personally required to put their money where their mouth is when they say the mortgages they're writing are affordable and prudent.

Why such a change in behaviour from them when personal responsibility becomes part of the picture? Were they banking on only others being affected if risky or imprudent lending was being engaged in?

Up
0

'unintended consequences' 

To the ignorant, everything they don't understand is an unintended consequence.

Up
9

New lending restrictions lock prospective homeowners out of the market - NZ Herald 15/1/22

"Credit reporting company Equifax separately found consumer credit demand plummeted by more than 30 per cent in the three months to December, while demand for home loans dropped by 35 per cent when compared to the same quarter in 2020.

Equifax New Zealand's managing director Angus Luffman said the plunge was predominantly caused by lockdowns.

"Extended lockdowns in Auckland have impacted demand leading to big declines across all major retail credit products," he said.

"The percentage falls are exacerbated by the huge volume of home loan enquiries recorded in the December 2020 quarter. Demand reached fever pitch during this period, so it's important to factor into the equation."

Maybe the credit tightening was happening already?

Up
1

The CCCFA is a red herring....banks were tightening lending well prior to the dec enactment of the CCCFA changes....understandably.

Why the concerted campaign against the Act however is of passing interest, who's driving it and why?

Up
4

A good question. For it to be relentlessly in the media, there's well funded pockets with good lobbyists and PR people pushing hard.

Up
4

Seems to be mortgage brokers primarily.  My guess is part of their "service" was helping applicants maximise their borrowing by helping them with their income and expense information.  Doesn't work if Banks have to actually verify that information.

Up
7

Rings pretty true. In years gone by the banks just wanted to tick a box to say they have your income and expenses, didn't seem like they even looked at the content.

Up
2

....So finally, steam is running out of ponzi but not to worry our PM and Orr will find ways to support and pump the ponzi.

Have trust on our dear PM and her knights.

Even stock market has crashed - though stock market index  does not indicate as is represented top few companies and they too are down but not aggressively as many growth stock which are down 40% to 80%.

Just like evident death can be delayed by ventilator so does fundamental in any economy.

Still long term investors, be it in housing or in stock market will have to wait and will come out strongly on the other side. It is over exposed speculators or mum n dad who in greed of fast and easy money over exposed will be hard hit unless are able to hold for long.

 

Up
11

Still long term investors, be it in housing or in stock market will have to wait and will come out strongly on the other side

How do you know? What if the markets go into a Japan-like decline? What makes you think everyone has to go back to what you percevie as "normal"?

Up
7

There is still plenty of room for downward valuation.

Up
13

Don't be quick!

Up
8

Or is this the 'big dip' and in 3 months when everyone's cleaned up their statements for CCCFA it will be mayhem again...

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5

I do wonder if it will change the seasonality of the housing market. Most people tend to spend more over Christmas/New Year/Summer, but maybe in Winter/Spring which have traditionally been weaker times for the housing market people's finances will look better if the banks are only looking at the preceding 3 months

Up
4

December is traditionally a slow month for RE.

Up
5

Be slow!

Be hesitant!

Be circumspect?

Up
5

A pause in the market is not a bad thing, when the borders reopen prices will increase again. NZ is a small place, global inflows will drastically exceed outflows at least for the first 12-18 months as people make decisions and get themselves organised. Year on year 5-10% increase better to buy now before competition heats things back up.

Up
6

We are more likely to see a huge brain drain.

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28

To have a brain drain, there must be brains to begin with!

Up
5

You should make the same joke about "white flight" next...

Up
4

Educated, skilled young people who can earn more in Australia and further abroad while paying less in living costs? Plenty of those...

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1

Which agency are you with?

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3

As one of the recent interest.co.nz articles pointed out, it will be a terrible temptation for NZ govt to use immigration to prop up NZ markets and GDP.  I'm pretty sure they will play that card while burbling about studying sustainable population growth.

Up
10

Yeah.

Although if they do sadly do that, can't see it happening till later this year at the earliest.

For this govt, Covid is the number one priority.

Up
3

Considering it’s the most expensive housing market in the world.. might put off the type of immigration NZ needs ie nurses

Up
7

People from developed countries who have money to spend would only move to NZ if the house prices and cost of living were lower and wages higher, therefore NZ is not desirable to them. People for poor countries with no money just want to escape to a country with the possibility of getting richer, therefore NZ will be desirable to them. NZ will get a rush of people who are easier to exploit, which the rich will happily welcome but NZ will not get cashed up people coming until things drastically change.

Up
9

There's plenty of wealthy people moving here, because they're wealthy, incomes and costs of living dont factor into their decision making so much, and if you think our property is expensive, try going to California.

Up
11

A few billionaires might be buying farms here for profit but they don't live here.

"If you think NZ property is expensive, try going to California".

My list of places with housing cheaper than NZ will be much bigger than your list of housing more expensive than NZ. 

Up
4

There's over 50 million millionaires on Earth. Many of whom have bought property in NZ that they live in.

There's many aspects to NZ that appeal to people outside of "how much can I earn there and how much are houses". 

And there's plenty of places cheaper than NZ, why wouldn't there be, we're a developed nation, and most of the world is relatively poorer. Areas in developed economies across the world with high demand have housing that's gotten expensive, just like NZ. If you are on a lower income, it's probably a good idea to not live in such places.

 

Up
2

There isn't plenty of places more unaffordable than NZ though.

http://www.demographia.com/dhi.pdf

In early 2021 the only cities worse than Auckland were Hong Kong, Hongcouver and Sydney.

It wouldn't suprise me if Auckland has overtaken Sydney by now.

Nothing to do with New Zealand being "developed" and other places not.

It's just a good old-fashioned braindead housing bubble.

 

Up
11

NZ isn't Auckland though. Auckland is one market in the economy.

Otherwise by that logic, Australia is less affordable because of Sydney, and you well know there's an abundance of cheap red dirt there other places.

Up
4

Australia is much more affordable despite Sydney.

New Zealand is full retard across the entire country.

Up
9

Yeah, there's an abundance of land there, the more there is of something, the less it's worth.

It will seem unaffordable across the board if you are on limited means, even more so if you have high expectations and standards. 

See if you can build x-ploited a sleepout at the new place.

Up
4

There is no shortage of land here either.  Just terrible land-use policies.

Can't build a sleep-out due to covenant restrictions, adding guest suite instead.

Up
2

Guest suite does sound in keeping for someone of your exceptional standards.

You and him can perch on your fence like a couple of seagulls from Finding Nemo and squawk "Orr, Orr"

Up
0

California is propped up big tech money.

lamb meat and milk powder doesn't have the same sort of return.

Up
2

And big tech are leaving California, as are many people for Texas, which has plenty of affordable housing despite historically high immigration, and low-interest rates.

It's all due to Govt. policy.

Up
2

People are moving to where housing is cheaper. Housing affordability is largely being restricted by deranged NIMBYs, as in cities in NZ.

Up
1

The typical home value of homes in California is $727,370. This value is seasonally adjusted and only includes the middle price tier of homes. California home values have gone up 20.3% over the past year.

So less than the average nz national price?

 

Up
1

The average salary in California is about $65,539.

Up
0

nzd usd?

Up
2

I have quite a few friends in California and some have bought their own houses in different parts of San Fransisco and Los Angeles. They are uniformly absolutely gobsmacked at New Zealand prices, especially Auckland and Wellington. (And their central city apartment prices are comparable to Auckland, nominal dollars).

Up
3

RickStrauss .....your genuine comments will be ignored on this forum .....most Kiwi PI's haven't got a clue what NZD 1 million (USD 679,000) would get them in the USA ....I have just finished up 10 years of investing in MD townhomes (only 9 miles from the White House) ......here's an example of a really good area I know well   - Annapolis, MD  great little town on Chesapeake Bay  - historical and lots of boats ! 

https://www.zillow.com/homedetails/922-Chesterfield-Rd-Annapolis-MD-214… 

 

 

 

Up
2

Absolutely right. And then - if in CA - consider run of the mill IT salaries vs house prices, as folk I know are working with. A far better equation for them in Conchord, Sonoma, Oakland (nice parts, not stabby places) and LA. Let alone the folk I know working and homeowning outside CA - but the point was that CA even isn't so bad as Auckland and Wellington for most.  

That's a pretty nice place, especially compared to the same money in Auckland.

Up
1

Timmyboy. No agency mate but 30 plus years investing in shares, residential, commercial, and horticulture properties. I am currently selling a residential property so seeing the current market for what it is. Certainly not as buoyant as prior to 1 December '21 but still very active lots of interest, I suspect a sale is not to far away. A little less competition/pressure at the moment and a little more time, as the next 12-18 months plays out I am calling this a slight pause. Like always there will be those who see this as an opportunity and those who chose to sit and wait potentially missing the opportunity then bemoaning, "if only". I say opportunity because I'm picking 5-10% increase in prices. 

Up
4

Oh only 30 years, never seen a decent correction then. 

Up
7

 but 30 plus years investing in shares, residential, commercial, and horticulture properties.  

Well done MD

Up
1

30 years is a golden timeframe to have bought in cheap off the back of the increases in affordable housing thanks to the post-war decades' governments, then benefit from the free money of housing policy reversal and financialisation of housing. Benefiting from the wealth of both preceding and succeeding generations.

Up
1

The media almost everyday has a dig at the CCCFA.  Why would anyone in their right senses  hammer at a law that is for Responsible Lending. Obviously those who feed on the housing ponzii. Reckless lending an accelerant for  raging house prices.

Up
32

Almost all excessive regulation is bad no matter how well intended it may be. 

You can't apply simple formulas to this stuff as the CCCFA does, everyone's situation is different.

  • Is it responsible to deny someone a loan they can afford just because the CCCFA formula says no and force them into a life of renting?
  • Do we actually have a problem with mortgagee sales due to banks giving loans to people who cant afford it, or is it a solution to a problem that doesn't exist? 
  • Will it create even less financial literacy as the big brother government are protecting you? Will people assume they can afford any loan that the CCCFA formula says yes to regardless of their circumstances.
  • How much inequality will be cause by only giving the rich access to debt? Do we really want to live in a country where lower income people just have to rent forever and even if they try and get ahead the bank will say no. 
  • Is it reasonable for a bank to be probing into everything you do in your private life no matter how trivial

 

Up
9
  • Do we actually have a problem with mortgagee sales due to banks giving loans to people who cant afford it, or is it a solution to a problem that doesn't exist? 

It doesn't exist so long as you have a buoyant labour and housing market.

Up
3

Does the CCCFA actually protect against someone losing their job? That would actually seem like a better policy to me than checking how many lattes and avocados they buy each week. Maybe compulsory unemployment insurance (although it is hideously expensive)

Up
3

Have you had personal experience with CCCFA Jimbojones - you sound like you've been burned by it?

Up
2

Not at all, I don't need any debt, I'm past that stage. But I would have been seriously burned if it was a thing 10 years ago, we would be in a worse situation because of it.

I am basically against pointless regulation ruling everyone's lives. 

Up
7

It's protecting things from growing worse 

And needed. 

Up
4
  • Do we actually have a problem with mortgagee sales due to banks giving loans to people who cant afford it, or is it a solution to a problem that doesn't exist? 
  • Yes..no one can afford it at these multiples.. 
Up
2

You will have minimal mortgagee sales in a boom market.

The fun always comes in the following bust.

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11
  • No more or less responsible that a bank making the same decision
  • Mortgagee sales were basically flat in the US right up until 2007.  It didn't mean there wasn't risky borrowing going on.  Its only when rates rise or prices stop rising rapidly that risky borrowing is exposed.
  • Until the RBNZ stops providing an implicit guarantee to underwrite banks, its pointless talking about "big brother" protecting borrowers - taxpayers are on the hook whether we like it or not, so if they are taking the risk they have a right to ensure its done sensibly
  • If the CCCFA puts a dampener on prices will reduce inequality.  Especially when you consider what the status quo is right now.   
  • Do you think we should have no-doc loans like the US subprime?  If Banks aren't validating income and expenses, how can they assess a borrowers ability to repay a loan?
Up
6

You could always find a way to borrow more back in day,it just go out of hand people way out of depth these days if interest rates go up to 8% which is where it should be with inflation at 5%. So many people would be in deep trouble if rates do go up too 7-8% prices would crash quickly.

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2

The excuse will be that inflation is 100% about supply chain disruption and we'll "look through" and keep rates as low as we can.

(And in fairness there probably won't be prolonged inflation. Growth is dead without more and more debt.)

Up
1

You are 100% bang on.

Wait and see how now any news / data suggesting slow down of housing market will have on politicians and reserve bank.

Will  be shit scared and will go again with their policy of least regret as they cannot afford to let the ponzi stop.

Trust Jacinda and Orr as for housing market they can do what even.....

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8

The impacts of the CCCFA will be one of several excuses used this year by Orr to limit OCR raises.

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3

DTI will be thrown out because of it... perfect excuse.

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2

I will be extremely disillusioned if DTI isn't implemented - it's the perfect tool to hit the manic accumulation of properties by investors which is not something we need in our society. 

Sadly, you could be right. 

Up
11

Wonder why Mr Orr is hesitant to use DTI.

He has been asking for DTI as a toll since ages and definitely if he is requesting for it , must be requesting after doing the homework. So why the hesitant which is forcing him to use his delaying tactics, now that he has it.

DTI is to protect vulnerable buyers from over exposing by borrowing in extreme and is also easy to impliment and understand.

A QUESTION TO MR ORR if have reservation in using DTI, than why requested ( Maybe he was definite that no politician will give him the tool, so was caught off guard, when got it middle of last year)  and if this is not the right time to use, when house prices have literally doubled over short term than as per him when is the right time.

Another question, Is he being a politician or aspire to be , how they are allergic to the word Capital Gain Tax though may have one in different name. 

DTI will be a blessing in disguise for FHB for number of reason.

Up
8

I am unsure on what grounds that would be justified, even by Orr.

A minority of sub-prime borrowers not getting crippling amounts of debt extended to bid up over-inflated asset prices has a negligible impact on CPI inflation.

Up
1

My understanding is the CCCFA is also taking significant heat out of the credit card and personal loan environment. This will have an impact of taking some heat out of the economy and inflationary pressures.

I imagine his narrative will go like this:

'Strong inflationary pressures persist in the NZ economy. However these pressures are easing, a product of a combination of the effects of the CCCFA, significantly rising retail interest rates and stretched housing affordability. Given this, the committee is taking a wait and see approach on future potential raises of the OCR. The majority of inflationary pressures that persist in the economy are supply side generated, which the OCR has little influence over.'

Up
1

Not exactly. From another perspective, less debt being issued by banks means people will have less debt, therefore, less people's income would be taken out by mortgage repayment when interest rates going up. Judging by the current market, people will likely either spend or save the money in bank depends on people's spending behaviour. However, the deposit rate is so low and can not catchup with the inflation rate. Guess where this money goes to then? if you know today's same item you want to buy gonna cost you 5% more next year and likely to be out of stock, what are you going to do?

Up
2

You will buy the item/s, and that is what I for example have been doing. But I have stocked up now and won't do much more of that. Who knows the trend in aggregate, but I suspect a fair bit of that has occured.

Plus if my mortgage was being renewed in the first half of this year, as many people's mortgages are, I would be starting to tighten my belt on discretionary spending. Equals deflationary effect.

Up
0

It really depends on people's spending behaviour, but people will likely to spend if they don't have a good saving habit and deposit rates are too low. That's why CCCFA's impact on inflationary pressures is unknown.

Plus if my mortgage was being renewed in the first half of this year, as many people's mortgages are, I would be starting to tighten my belt on discretionary spending. Equals deflationary effect.

I agree with you on this. That's why central banks need to raise interest rates to tackle inflation and deal with demand-pull inflation pressure. Two reasons:

1. Like what you said.

2. To put up deposit rate, so people intend to save more rather than spending, expanding and investing into assets.

Up
2

If you really want to protect people from themselves then I don't think mortgage debt is the thing to worry about. There are plenty of people that spend their pay cheque on smokes and alcohol and TVs and phones while their kids go hungry. Maybe every single purchase should be subject to government affordability checks? 

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14

In the ever increasing nanny state anything is possible!

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1

Vote them out and vote the opposition Granny State back in.

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1

Start with all the benefits, you think? That includes the pension for over 65s. Better check if they're squandering their benefit on wine.

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0

To me I just figured it's getting the media attention to add the the NZ housing narrative and to wind people up.

Life's all bad, the odds are against you, nanny state gone mad, and so on and so forth.

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2

Mainstream medias and ponzi are in full panic mode. I've never seen them so actively protesting a new rule like this. And they are still sugar coating their protests are for FHB, saying FHB would be the ones hurt most. For FHB, if they can't borrow to buy a house, life continues, they just need to save up more for it. But if they borrowed more than they can afford to pay back, when the crisis comes, they are gonna be broke. They lose their houses and still need to pay back the debt they owned. If no one can afford to buy houses, housing price will eventually come down. I think people are under FOMO and media's influences for too long, it clouds their judgement. 

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20

Nah, I think all nanny state regulations make headlines because people hate nanny states (with good reason), and this is as nanny state as they get. Who wants the government organising their personal finances "for their own good"

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5

Except it's not nanny state government control of personal finances. It is about person responsibility, something nanny state opposers should be all for.

It simply requires bankers to take personal responsibility for the accuracy and prudency of their behaviour and their lending. Put their money where their mouth is.

Who would've thought people would be so against personal responsibility?

Up
0

In jurisdictions that have stable housing markets and median income multiplies around 3 to 4, a 20% deposit is the norm, because 1) The banks want to see you have some real skin in the game, and 2) house prices are stable and you can't equality increase ie decrease your LVR risk on speculative housing inflation.

And relative to their median income, the deposit a homeowner in these jurisdictions has to come up with at this 20% is still less than half in real terms of what a NZer has to put down using a 10% deposit.

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3

Seems the REINZ is taking a new approach...Being honest about falling prices helps to encourage dithering vendors. This article so opposite to Stuffs optimism of this morning.

 

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0

Is this why there's an article every 5 minutes on other media outlets saying we need 10,000s of cafe staff?

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5

There's never a shortage of labour in a capitalist economy. Pay them and they will come.

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9

You do and will have shortage if people owning house realize that they they can use existing to speculate in housing market and make much more than they would in years.

Many have and why not when have blessing and assurance from almighty Orr and Jacinda

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1

Horribly unfair to expect business owners to pay higher wages to attract staff rather than being able to rely on cheap, exploitable labour though.

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0

Potential rock-and-hard-place moment for the government here.

Do you a) reopen the border to let more people into the country and stimulate housing demand (and also keep many employers happy by potentially driving down wages) or b) keep the border closed but risk the housing market having a big drop?

 

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4

I'd vote pop the zit before it gets any worse.

I mean FFS, they are called the 'Labour party' but seemingly exist to actually protect the wealthy, screw workers by driving down wages (promote mass immigration) and grow bank profits by supporting the increase in price of the most expensive asset that most people hope to buy (a home to live in).

Who actually represents the average person in NZ politically now? Nat-bour sure as hell don't.

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It's pretty obvious what is happening in the residential NZ property market.  Auckland always moves first (loosely following Australia)... and has approached and now surpassed it's peak in this current cycle.  Other fast followers like Waikato / Tauranga / Hawkes Bay and soon to be Wellington are going to quickly also surpass their peak and likely regress with Auckland in the short term.

The other group of areas (Nelson, Marlborough, Palmerston North, most of Canterbury) haven't had the meteoric gains as the first group and now look like great value relative to the rest of the country.  This group probably has a fair bit more gas left in the tank and I'd expect to continue to reasonable gains throughout the first 6-9 months of this year to "catch up".

Also as an aside, has anyone else been noticing the huge exoduses from the cities into regional New Zealand?  In this tight labour market, almost all big companies now have to have a remote / work from home policy and this is now enabling professionals and other desk-based work to be done from regional NZ. I personally have many friends who have made the move in the last 12 months all over regional NZ. I expect this migration pattern will continue for sometime, now that you can earn the same in a big city with better quality of life and less cost of living. 

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Yes it's an interesting trend. I am not sure if it will  be sustained though. Employers have to be extremely flexible in a tight labour market like we have now. Many employers still prefer some sort of relatively regular 'in office' presence.

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I don't think there has been a exodus to regional NZ.  People jumping on the property investment band wagon have been buying up second properties in these areas as they can't afford to buy something in the city they live in.  Very few people of working age are making a conscious decision to go to small town NZ. 

Sure people can work from home, but moving to the regions isn't a simple thing to do.  I for one couldn't leave Auckland due to family connections, friends and the general amenity of living in a larger city (I live near the city, so commuting isn't an issue for me).  I also can't imagine all the NZers returning from London, Singapore etc would be excited about moving to Palmy North!

If there is a dip, Auckland as a whole will be protected as that is where the jobs are and where immigrants want to settle.  It is NZ's only "international city".  Wellington is being held up by the swelling civil sector and as such shouldn't be immune to a drop unless there is a change in government. 

I think the regional areas with little prospect of employment will be the ones that are hit hard, furthermore there aren't the locals who have the earning power to pay the Auckland "investors" what they paid for their rot box rental in 2021. 

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There definitely has been an exodus.  I do a bit with recruitment and it's becoming a stock standard request by employees to be able to work from afar.  

Agree some people coming back to NZ from offshore would probably want to reside in Auckland but equally also some folk with big $$'s are looking to mix up their life and buy lifestyle properties and bigger lots on the outskirts of these cities.  

I also think there is a difference between "regional NZ" e.g Tokoroa and sub-cities like Napier, Dunedin etc.  There are increasing opportunities in these sub-cities which are where people are seem to be moving and working for the big corporates.  

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There are all sorts of different situations. eg There are some in Ak would have just bought an old house to be used as a bach or crib in a remote town. At what is now a far higher price than a few years ago. These prices seem like a bargain but where they are higher than the local population can afford, then these prices will drop. Sooner or later. So sure, they are a nice place to have a holiday but in the depths of winter when not in use and where there are other vacant houses nearby, vandalism/ squatting could be an issue.

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Yeah nah there's definitely a decent level of migration to regions by city dwellers, recent returnees to NZ, retirees, etc.

Strangely quite a few people don't want to live in Auckland anymore. Most will stay, but if even a couple of percent leave that's a big inflow for regions.

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To your last point, I moved from Wellington back to Hawkes Bay nearly 14 years ago, keeping my Wellington salary but buying a regional property. The difference was huge back then (about half the price) but the same like-for-like comparison is now about 3:2, if not higher. Out-of-town investors have bid properties in even the worst areas to unfathomable levels, and I'm seeing some prices that can surely only be paid by someone with no real understanding of the area.

The move to the regions still has price advantages, but it's not as great as it used to be. The lifestyle improvement remains though.

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"look like great value" I am not sure about that! You have to ask what you are buying in these places for $800k+, the house itself might be worth say $300k, should a section in a regional town with almost unlimited land be that much? 

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Zoning is the same everywhere. You can have lots of land, but if the councils aren't provisioning it for housing then there's still a scarcity.

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Zoning ain't the same everywhere.  One of the joys of 70+ TLA's is 70 odd District Plans, each with its own unique set of hoops to jump over, through or around.  Consultants dream....

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DIY Guy - yes still lots of movement from Auckland to regional cities like Napier & Gisborne, however the price differential is not as great as in the past.  So it’s more like sell in Auckland for 1.6 and buy in regions for 1.2.  
And the other benefits are the ease of lifestyle etc.  

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Re CCCFA - the banks are sitting back and telling the Govt “I told you so” as to how unworkable this legislation would be.   
And here it is in implementation and it’s an over the top disaster.   

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Pretty sure banks have been making plenty from the housing boom, probably much more than homebuyers have (if NZ has mortgage backed securities or equivalent, probably does). You think they'd be pedantic and maliciously compliant just to prove a point, costing themselves millions?

Nah I think it's just a convenient excuse this CCCFA thing came along at a similar time that inflation ramped up. I think inflation is the key to why banks have turned. They've done the maths regarding the RBNZ's planned rate rises and predicted a downturn, and tightened their lending.

This prediction of a downturn you might think is a self fulfilling prophecy, since their tightening itself caused the downturn. But it's just a trigger, in a market bubble there's always one eventually.

 

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The timing of the council RVs in Auckland is interesting, did they know this was coming hence delayed...

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Nope. The rates valuation date will not have changed. They are going to be well wrong when they are finally released. (Apart from their original errors which was the reason for one of the delays). But that is understood.

The factor I am very interested in is how much does my one go up compared to the average. ie Will my rate increase be above or blow average.

My situation is that I have a big section right next door to a recent 3 home build. The total sale price for the 3 was about $5.5m. But that involved about 40 truck loads of topsoil and clay being removed. And multiple 4m high retaining walls. So the construction cost will have been huge.

How will they value my place? Will they take next door and subtract a notional construction costs? I am not sure. The Council and its valuer won't know how much it cost the developer.

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I'm sensing an economic cul de sac for the Government.

Three economic pressure points are now in play. Surging inflation, Interest rate hikes in the US, and a housing cycle coming off its peak.

Orr can't serve all three  masters simultaneously - Inflation, balancing the currency strength for exporters and keeping a housing market artificially buoyant.

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Aren't the comments on this website- mostly- a treasure.

Hardly see any of this sort of insight from economists or the MSM.

 

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Housemouse - I wonder how many MPs, bank execs, & msm etc read the comments for a rough finger on the pulse of the investment/ex-career/finance/kiwi battlers demographic?! 

The media are closely tracking the property & investment groups on social media then blowing up various issues - so reporters don’t need to leave their desk for various articles.  

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I'm sure the RBNZ reads the comments.  I posted something a couple of months ago about wanting those guys off my payroll (as a tax payer), and look what has happened!  🤡

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Yes.  And groping at the end of the cul de sac they find salvation:  The Immigration Tunnel 

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Who need more immigration? We have the good upstanding citizens being forcibly returned from Oz.

PS. I would not disagree with Peter Dutton.

Disclaimer: I am not PC.

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Excellent start to the year.

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1.3M for an Auckland dog box. Surely there is more to life than bank slavery.

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There is plenty more to life than that.  But you are unlikely to find it in New Zealand.

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Personally Im waiting for the crash so I can buy a yacht for less than the current inflated prices. I really do not understand the obsession with housing. I think it gives people a great excuse to never do anything, because the mortgage etc etc.. take a risk !!

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Best advice ever Sluggy. I used to live in an apartment by the marina. The people that lived on their boats had a great life. 
The property market is so far gone for most young people without wealthy parents. Buy a boat and make life an adventure.. better option than the greed infested rent trap or the knee trembling mortgage IMHO 

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You can, just not in Auckland, Wellington or Queenstown.

Just have to be a bit sharper and work out your priorities. 

Actually wait, no it's terrible here, leave and don't come back, and tell everyone you know how awful the place is.

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...start of the decline my friend.

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By these "chucked together" in the middle of the night regulations, all that has happened is that its just made it harder for FHB's ! ....the banksters are always after business and residential mortgages (unfortunately for the NZ economy) are now their livelihood.  

They know house prices are way too expensive for FHB's and this could mean trouble down the road, if mortgages are kept being dealt out like "lolly water" ! 

They now have lost that share of the market (for now) ....but in the interim, the larger property investors will just come in and buy more stock, as they are the ones that the bank will lend to. 

But the banks don't care - they gummint will soon open the immigration floodgates, so there is your demand back for housing, while the employers will love it, as it's back to "cheap wages" again and if you don't like it, we have 25 others waiting in line,  who will do your job for $15k less !

What a complete clusterf**k this whole situation is..... 

 

 

 

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Well migration is two-way thing, there will be plenty of young kiwis heading to Aus. 

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Yes House Mouse ....that is a very valid point ! ......only makes the situation in NZ worse though 

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Not only young kiwis heading Australia.  
But also boomers who will move to Aus as it’s the only way they will see their kids and grandkids over the next 3 years.  
Kiwis can fly green to Australia with no quarantine.  And stay as long as they like.  

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mortgagebelt , wife and l are old boomers & will not be spending much time in nz.

all our kids/grandkids live overseas , l know nz is great , but some kiwis need to 

realize it can be great else where to.

we have a bolt hole in nz , all we need , rest of the world has opened , how long for nz..

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It's now impossible to make any plans regarding NZ for friends and family abroad. We have two close friends who sold up and left so they could attend weddings, run businesses. etc etc. We will become increasingly irrelevant.

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yes te kooti , the south island where we live is still a magical place mostly.

north island seems to be one big traffic jam with polluted rivers , still a few

nice spots..the days of clean green nz pretty much gone . 

we dont need any more citizens.....max 20k per year.

will any politition ever do the right thing for us kiwis.

Lot of damage done can it ever be repaired ?? financial to.

my overseas kids could never afford to live here now.

 

 

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Rest of the world hasn't opened.

In fact in Straya, you can't even travel to the western State.

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You can travel anywhere within Australia freely apart from WA.

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Yes, but around 80% of the world's countries have travel restrictions, and around a quarter of them have closed borders.

So for people to keep saying everyone else has moved on and free and breezy travel is everywhere but NZ is kidding themselves.

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No one said it was breezy but I have friends in Sydney whose family is free to join them from most of the developed world while in good old NZ my daughter cannot even quarantine from Sydney, let alone jump on a plane. The world has moved on while we have became timid and afraid of our own shadow.

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Our borders were going to be relaxed in mid Jan till the advent of Omicron. That'll eventually sweep though so we will return to liberalising borders shortly I would imagine.

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Unlikely, it will be delayed yet again to administer boosters to 85%+. In the meantime, some of our inbound industries (tourism, film, students) must be getting their @r5e5 handed to them.

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It'll take a while for those sectors to bounce back everywhere, straya included.

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NZs borders will be closed for another year or more. 

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I have immediate family in Sydney and South France. They all think we rediculous.

You really think labour's ever going to give us anything close to normal? When have we seen anything close to a long term strategy? Or anything they actually follow. Reds meant to be when the system is overwhelmed, all of a sudden boom we back down, with bugger all in hospital.

What's the end game?

They are just dancing from one press release to the next. 

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Already going.  Once niece gone to Sydney this week.  One nephew going to the UK in 2 months.  One niece went to London 6 months ago and unlikely to be coming back.  So 3 great young 20 something qualified kids in my family lost from Auckland and NZ within an 8 month period. 

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We've used policy to enrich ourselves off the younger generations ...it's no surprise more of them are leaving rather than enriching those who grasp for their wealth.

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Overall prices also dipped in December compared to November, with the national median selling price declining by $15,143, from $920,143 in November to $905,000 in December.

This is known as 'penny wise pound foolish.'

If you were to buy in January last year, you would had been up $175,143 by November. A price decline between November and December of $15,143 would mean your net returns for 2021 is still up $160,000!

Getting cold feet over a potential drop of 1.65% in any one month just to lose a net return of 21.48% overall is the core commandment in the DGM religion.

To make good money, all is required is a positive mindset from waking up on the right side of the bed and take in the breath of good vibes every morning.

That said, this month (January) which is traditionally the dip month for housing prices in NZ, don't miss it just to hate yourself when Summer arrives.

And yes, be quick, very quick- buy now and talk later.

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Nobody is getting cold feet over a 1.6% drop which has already happened. That would be like driving down the road looking in the rear view mirror. It's the potholes up ahead that people are looking out for.

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People have been looking out for potholes for as long as I remember, last year, the year before and for all recorded history.

Owners of precious cars never go anywhere longer than staying in the garage or showroom and drives on the road just to count potholes.

That's why in my opinion, DGM is a religion- followers hold on to their beliefs with their dear life in hope that one day they might be right.

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People have been looking out for potholes for as long as I remember

And the longer they go without seeing one, the more chance there is of one popping up.

It's not like everyone is either a raging property perma-bull or a DGM, there is a middle ground. It's perfectly arguable that now is the time to be cautious.

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Some of them potholes may be large enough to graze Coos in....

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Slumlord property flipper is sounding a bit nervous.

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More like the other way round Brock. The boat has sailed without you because you trusted your Timex. The next best thing is to cut your losses and buy another boat ticket rather than whining and throwing a tantrum at the dock for everyone to amuse.

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It's much cheaper and quicker to fly these days.  You'll only find coffin dodgers on the slow boat.

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Brock's the sad avocado eating stereotype you hoped wasn't real ☹️

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Hi s1mple.

Could you explain the "stereotype" just so that everybody understands what you are talking about?

Avacado really isn't my thing.  Tasteless green snot.

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This reads like something copy-pasted from a dog-coin pump-up thread. 🚀🚀🚀💎💎💎🙌

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That's quite a flattery.

I always think dog-coin peddler posts are far believable than 💩 limits to growth aneurysm 💩.

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Well you know what they say about a fool and their money...

Referencing Julian Simon would suggest you are going to get somewhat poorer.

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That stock image of the recent buyer contemplating suicide is a little brutal.

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No Brock, he's looking down at the renters.

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The renters frolicking in the lush countryside below?

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You can contrive whatever scenario you want for the photo. To insinuate a recent buyer may be suicidal is not only poor taste, but also not reflective of reality.

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It's a terribly despondent photo with that broken house behind and no railings or safety harness.  If he is a jumper the tribes will put a rahui on real estate and the market will be in big trouble!

Poor taste is exactly what I meant by 'Brutal'.  Those photos that insinuate that houses are rockets or float on balloons are also not reflective of reality though.  I hope you are on the phone to the stock-photo police as we speak!

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There is a long way to fall.

But I don't think it will happen this year.

This has years to play out.

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A bubble burst is quick with housing might take a little longer but not years the first big drop will around 30% then maybe 15-10% this will go on till average wage earners can get into market without being a hermit.

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Your prediction certainly seems more popular than mine.

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For me, probably the most significant headline from today's REINZ Property Report is:

LEVELS OF INVENTORY CONTINUE TO INCREASE

National inventory is up almost 30% YoY, with huge increases in Wellington (up 206%), Manawatu/Whanganui (up 133%), and Hawke's Bay (up 107%).

Whether this just an anomoly or the start of a trend remains to be seen, but inventory levels are a fairly reliable leading indicator of where prices are likely to be headed. It will be an interesting statistic to keep an eye on.

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I'm looking to upgrade in Central Auckland and my Trade Me Watchlist emails arrive each morning with plenty of new properties.  Usually nothing happened in the Auckland RE market until after anniversary weekend, but there are obviously plenty of sellers wanting to try and get the jump on the rest of the market and get 2021 prices....

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For those who expect a crash in the housing industry:

Expect at least 100,000 builders, hammer hands, and apprentices in building and associated trades, and workers in related industries to become unemployed.  

Expect hundreds, maybe thousands, of FHOs to undergo mortgagee sales as they lose their jobs in the building industry and/or try, in vain, to meet increased mortgage rates.  

Resulting in a large drop in consumer spending and an huge increase in benefit costs.

And with the 2023 election looming as the crash snowballs.

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Maybe. I would hope Labour will keep most of those 100,000 builders employed in state house building if they have any sense. 

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That is already the plan, and what is contributing to holding up the present housing boom.

The Govt. is trying to increase supply, on which any price they pay is by the bottomless pit which is the NZ taxpayer, and they never will sell and thus add resale supply to the market, which again holds up prices.

And while it will mean less FHB and more renters, the Govt. can subsidize the cost of the rental, ie yields don't matter.

Of course, all this is short-term thinking. Thinking that by doing the wrong thing more of, or quicker, they will solve the problem, rather than fixing the wrong thing which is restrictive land and consenting policies as the main culprits.

 

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If not there's heaps of fruit picking and cafe jobs available and even room four a few thousand dairy farmers. I read it on stuff, must be true.

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That sounds a lot like wishful thinking. The government don't have the competence to roll out a massive state house building programme.

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This would be best for society it would also bring down house and rent prices to a place where average wage earners could buy a place and still be able to live.

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You're not saying anything that is revelatory here. But to be honest, my intuition tells me that the more that the ruling elite double down on promoting or preserving the bubble, the worse it's going to be.

The bubble has been a terrible waste of resources: political, financial, capital, and human.   

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Are you insinuating the Government would never let this happen? I'm sure the past Governments of most countries that have suffered housing market crashes would have stopped them if they could - it isn't always in their power. 

If you're just pointing out what we could expect then yes, a crash would be destabilising. Perhaps the best thing the Government could do is ramp up state house building and infrastructure to soak up any growing slack in the industry, if it appears.  

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Not sure if that was in response to me. I'm not sure why people think the NZ ruling elite is so good and omnipotent. As far as I can see, they've been relying on the bubble for 20+ years. 

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Depends on how you define a crash. 50% 60% or 30%? Both you and I know that 30% drop only get the price back to 2021 market level. I am pretty sure most of house owners are still well off with their equity. I think the real DGM is the one trying to use market crash as scarecrow to scare people by their narratives, that house price can not fall.

I am not for housing market to crash but I don't see annual 10% - 20% housing price drop will cause much impact on our economy. People who cashed out during this period, can find other places to invest their money. It helps to rebuild a healthier economy. 

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A percentage drop below what most new FHB have as a deposit is indicating a large potential drop if they were forced to the market. but as long as they can afford the payments, and don't sell, then any negative equity that might be happening is hidden statistically from the market.

Even if they have a drop in income, they will take money from other luxuries (no holiday etc.) and/or necessities (education, health care, retirement savings, etc.) to feed the debt, especially if selling would still leave money owing. Again hiding the true loss from the housing stats.

People tend to hide their losses and openly celebrate the gains.

A 10% house stat. drop probably has another potential 10% underlying that, which only takes another minor factor (a straw to break the camel's back) for it to double down in quick time. 

 

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Engineering an asset bubble on top of on asset bubble was a really dumb move wasn't it?

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A clear tick down in HPI in the Northern cities - Auckland down 2.3% compared to November, Hamilton down 3%. Whole of NZ down 1%. Very interesting. Looks similar in the graphs to the downtick at the outbreak of Covid, but no emergency interest rates cuts look likely this time. 

https://www.reinz.co.nz/Media/Default/Statistic%20Documents/2021/Reside…

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What's occurring in Papakura? Down -6.7%, or 3x Auckland region average drop. Is there some statistical anomaly creeping into the HPI? More subdivisions?

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The HPI is intended to be like-for-like so I think in theory it should be unaffected by sales composition in a given month. I expect there's a bit of noise at the suburb level though, so I wouldn't read too much into one month's values. Maybe someone with local knowledge can come up with an explanation?

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Just a guess... developers have pulled back from paying huge money for potential development sites?  The B&T auctions in Dec told their own story, i.e. no buyers.

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That would be my pick too. Developers buying property of circa 600-800 square meters has been a big factor in places like Papakura.

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dp

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People must see the last two years interest rates have been at emergency levels and people have just spent like mad manly push up house prices in this country. Now inflation has arrived rates have to go back up,with inflation at 5% rates should be 7-8%.This is just the start anyone who has purchased house in last 3 year will easily see deposit gone and be in negative equity.

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Don't worry investors Jacinda, Orr and Robertson will come to help soon and pump the market again.

Expect delay in interest rate rise and opening of the border to increase immigration rush soon.

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Jacinda Orr and Robertson will like a one arm dishwasher this is a world problem coming for a long time if US raise rates we have too or NZD will lose value and inflation will sky rocket. Just facts, 

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Listings are flying on Trademe at a rate of knots. 23'300 now and growing rapidly. Agents phones must be crazy busy. Only a matter of time before the desperate overleveraged start seriously cutting prices to avoid bankruptcy.

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Since I started commenting here over six years ago I have been reading comments like yours. Are you sure it's not just wishful thinking?

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Could be, but mortgage rates are back to 2019 levels and rising, LVR's even more strict than 2019 levels, CCCFA is hitting lending hard, nobody is moving to NZ, rental numbers are accelerating, lots of new builds built, lots of sellers rushing to the exit, the economy is in tatters, no more FOMO, Jacinda and Orr are happy for prices to go back. You tell me?

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Zachary Smith how did you get back from space ( did you bring Robby the robot with you ) a lot has happened inflation up interest rates up NZD tanking , house prices gone to level average wage earners can only dream of owing a house. The only way house prices are going in next few years is down as interest rates get back to where they should be. If you think otherwise you are wishful thinking and maybe should look at buying realestate on Mars.

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I just had a look to see when I signed up (almost 5 years ago) and there has been some seriously negative sentiment for a long time. There is definitely some justified criticism over that time about the housing market, but you're right there's also a lot of wishful thinking that never eventuates.

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Hahaha really,... People actually believe there is a slow down.... Haha gold

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I can see this in the market the the moment in Auckland. Vendors as still in delusion asking 2m for 1m CV hoping for a greater fool to pick it up after already a few month in the market.

 

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Hahaha I know, some people are calling it a slowdown when it is actually a reversal..... Haha Gold.

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That’s right Luke83 gold is where you should put money into,not house’s this is for living in with your family not a investment ( still a lot of greedy investors are going to get fingers burnt if have not sold yet )

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Someone should come up with an app like this for NZ so that we'll see less whining on the internet,

Real estate app enables retail investors to buy into property.

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Quite straightforward to buy into the REITs on the NZX - KPG, GMT, ARG etc. Or CDI for exposure to development. Or the retirement companies are almost a proxy for property. Not at all difficult to get property exposure without having to buy million dollar chunks of it. 

Of course the REITs are being knocked back by the increasing interest rates, which hasn't shown up in residential property prices. Yet.

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KPG is a wonderful loss maker for shareholders... since late 2019 the price has fallen 30 plus percent and not recovered to pre-pandemic levels. Listed companies price performance and viability as an investment cannot be compared to the success of residential real estate. My own waikato home we bought end of 2018 has doubled and perhaps tripled since 

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Yep, they got knocked pretty hard by Covid, presumably due to heavy exposure to malls and losing rent. Assets are still there and their growth plans have progressed - I'd happily bet that they will perform better than your Waikato home over the next few years. 

 

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Make that "homes" mfd as we have the right to build multiple houses on a big property. KPG has rural Drury land that they want to develop. But as always happens the profits get gobbled by promoters, and high construction costs. Case in point the big retail plaza extension at SylviaP and the office tower block there. The company did a good job and have fully leased with first class tenants paying premium rents but how much capital gain have you seen in your shareprice... Or higher earnings and dividends.... none! In fact less than none, both have retreated. But if you truly believe what you said about the next few years ahead, you will be doubling down on your current shareholding.

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You can already buy into the Smartshares property ETF through Sharesies. Nothing new here about getting exposure to property through app-based channels. 

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Bit of perspective from Canada:

If Canadian home prices fall 30% they would be back at the 2019 crisis levels the Liberals promised to solve.

Dropping another 30% on top of that puts it at the 2015-crisis levels the Liberals said they would solve.

Another 30% lower is where the Bank of Canada called it a bubble.

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Yep, obviously this is a kiwi site, but to think there's anything unique about what's happening to asset prices in NZ is kidding themselves.

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Here's what Trudeau's kiwi people-kind counterpart has to say about that...

https://www.reddit.com/r/newzealand/comments/owyn1t/flashback_2017_i_do…

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Here's what Trudeau's kiwi people-kind counterpart has to say about that...

She's such a fraud. Unfortunately Greta would be the same if she ever went into politics. 

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Total Fraud.

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I remember in that debate she also said that she believed lying wasn't necessary in politics and that she didn't lie or some other BS like that. At that point, I realised she was a fraud. But many people didn't. I'm not sure what's worse, Ardern or that a good chunk of New Zealand can't see through it.

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A big smile does make you blind 

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John Key 2.0

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Most of the discussion on this has focused on lending for mortgages, but is anyone seeing/hearing of impacts with regards to lending for other purchases e.g. cars?

I recently bought a new business vehicle, and the finance person who I was passed on to from the salesperson was very relieved to hear I was buying in a business name (I guess the same lending criteria don't apply?)

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Personal loans and CC applications are also tightening up - so not just mortgages.  

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Yes, and this will take some of the heat out of the economy and demand-side inflation, doing some of the RBNZ'S job...

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I am so looking forward to house prices falling , I would like to buy a few more rentals to add to my portfolio . To be honest , for  me as a migrant from UK , this country has been the best place to invest in residential property in the whole world, the returns have been spectacular .

My first rental which I bought 19 years ago ( when the GB Pound was 3 to 1 ) has seen rent go up from $190 per week to $800 per week in 2021 (over $400% )  in that time and the value has gone from $320, 000 to over $1,0 million .

The second and third properties I have bought and held for around 15 to 17 years have seen similar returns and my personal home in Devonport has gone from $760,000 to around $2,0 million in value.

My fourth property has not seen rental growth , but the value went up $70k in 2021 

Had I bought residential property back in the UK , I would have likely seen no capital growth or possibly a Capital Loss in some areas. 

What passive investment gives you that sort or return ?

Especially when the rents are Government guaranteed through the system of the accommodation supplement . 

The system is wonderful, I  put up the rent and  3 of my 4 tenants go off to WINZ and get an increase in the accommodation supplement , and hey presto , the Government pays the increase 

Magic !

 

 

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Oh absolutely, it's a real taxpayer-funded welfare scheme for "investors".

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