December House Price Index suggests the housing market may finally be turning

Property / news

First signs of rain from the dark clouds gathering over the housing market

19th Jan 22, 9:32am by Greg Ninness

Perhaps no other downturn in the housing market has been as widely anticipated as the one which is supposed to occur this year.

Economists and commentators from almost every corner of the market have been telling us for some time that current house prices are unsustainably high and that rising interest rates, more restrictive mortgage lending rules, changes to the way residential investment property is taxed and the lack of inward migration coupled with a steady increase in the supply of new homes, will combine to cool the market and push prices down from their recent highs.

So when the Real Estate Institute of New Zealand's House Price Index (HPI) declined by 1% in December after a scorching run of monthly increases, did it mark the turning point of the market?

Certainly the decline was significant.

The graph below tracks the monthly changes in the HPI from April 2017 to December 2021.

It shows that from April 2017 to July 2020 the HPI posted relatively modest but steady growth, increasing by 12.3% over that 40 month period.

Then from August 2020, as the Reserve Bank started pushing mortgage interest rates down to extraordinarily low levels, house prices started rocketing up.

That saw the HPI increase by a staggering 51.4% over the 17 months from August 2020 to November 2021.

Considering that the HPI increased by 3.3% in October and 1.9% in November, the -1.0% decline in December could well have marked a significant turning point in the market.

The trouble is, one month's figures do not make a trend and December is not a very reliable month for picking changes in the market, because like January, it is affected by the Christmas/New Year break, when the market all but closes down for 3-4 weeks.

However there are three things that suggest that December's drop in prices was more than just a blip in the market.

Firstly, prices were particularly weak in the country's biggest market, Auckland, where they were down 2.3% for the month, compared to an increase of 3.1% in November.

As the tables below show, prices were weaker in all of Auckland's major urban districts except for Rodney and Franklin, which bookend the region at its Northern and southern boundaries.

The monthly decline in Papakura was a whopping 6.7%.

Additionally the number of districts showing a decline in the HPI is increasing.

In November, just seven of the 26 major urban districts in the REINZ's HPI summary showed a decline.

In December that number doubled to 14 and included the major centres of Auckland, Hamilton, Christchurch and Dunedin.

And finally, if a price correction was in the offing, you would expect it to be preceded by a significant downturn in sales numbers, and the number of residential properties sold in December 2021 was down by 29% compared to December 2020.

All of that suggests that December's HPI figures were more than just an aberration.

Although sales in January can be patchy, February/March is usually the busiest time of year for the real estate industry, so we shouldn't have to wait long to find out which way the market is headed.

Another month or two should do it.

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REINZ House Price Index - December 2021

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181 Comments

by Averageman | 19th Jan 22, 9:43am 1642538614

Reality is lots of headwinds slowly building for a while and have been masked by printing and debasement of currency. Investors with lots of equity will yawn and not blink. Specuators with the famy home leveraged to the hilt to provide the only equity for the debt have a very different challange.

by chebbo | 19th Jan 22, 9:48am 1642538925

Monetary debasement would benefit those with debt more than it does those with equity, but unfortunately for mortgage holders, that's not what's been happening. We haven't been "printing money" a la Zimbabwe or Weimar Germany. We've been monetising debt, which is a different beast altogether.

by LFCYNWA | 19th Jan 22, 8:18pm 1642576706

I really like this comment regarding monetising debt. For the last 12 years kiwis have made purchases, borrowed against paper gains and sat back on mountains of liabilities cloaked in leaky wooden homes. I have no issue with smart leverage, but seeing homelessness and poverty on an insane scale whilst people call themselves service providers for being landlords makes me vomit in my mouth.

Property is cyclical and you cannot game the cycle without causing a crash. We pumped a bubble and now it has popped.

by tothepoint | 19th Jan 22, 10:32am 1642541575

The housing market may well take a breather - after a lengthy buoyant period.

But don't expect a crash......

There remain plenty of people (in NZ and abroad) keen to purchase NZ real estate. And economic fundamentals remain solid.

TTP

PS My major focus this year will be on encouraging landlords to get their rental properties up to a reasonable standard. Far too many flats/houses are shockers.

by chebbo | 19th Jan 22, 10:46am 1642542406

economic fundamentals remain solid

I have no words.

by RickStrauss | 19th Jan 22, 11:34am 1642545274

Maybe he means support from investor politicians and central bankers? Economic fundamentals haven't been great without such central welfare and other support for a while now.

by HouseMouse | 19th Jan 22, 11:45am 1642545932

Low unemployment.

by Smudge02 | 19th Jan 22, 12:06pm 1642547216

😂. Ostrich + Sand comes to mind.

by taimaiakka0 | 19th Jan 22, 12:12pm 1642547579

Fundamental = RBNZ + Government = $$$$$$$$$$

by KBKIWI | 19th Jan 22, 12:17pm 1642547832

Well he is not wrong: high economic activity, high household savings and low unemployment means the economic fundamentals are very solid - that should be rather obvious.

However housing is a completely separate story, with prices far detached from any sort of logical reality. They make zero sense to buy as investments from a cashflow perspective (and will be even less attractive if capital gain growth stop), and for first home buyers the debt to income ratio is way beyond any sense unless buying a small apartment.

IMO a crash is HIGHLY LIKELY THIS YEAR - in fact I think it has already started,

by Zack Brando | 19th Jan 22, 1:01pm 1642550462

Usually what people say before Orr turns on the money printer and pipes it directly to the Retail Banks for mortgage lending.

So a 10% increase by the end of March?

by RickStrauss | 19th Jan 22, 1:37pm 1642552621

Property, New Zealand's biggest welfare scheme. For the wealthy.

by taimaiakka0 | 19th Jan 22, 1:06pm 1642550773

Almost all growth stocks are down 40% to 80% plus and bluechips 15% to 30% plus from ATH.

by tothepoint | 19th Jan 22, 1:31pm 1642552296

"IMO a crash is HIGHLY LIKELY THIS YEAR"

Famous last words.....

TTP

by Averageman | 19th Jan 22, 1:38pm 1642552689

Wow...we agree.IMO its been overdue for some time and only delayed by extreme action from RBNZ and FED.

by Harvey W | 19th Jan 22, 6:30pm 1642570249

There's a lot of talk like this- house prices don't relate to fundamentals- but really is it that far out? If it was then section plus new build would be a lot cheaper than buying an existing house....

by Pa1nter | 19th Jan 22, 6:44pm 1642571092

Depends on location and quality of house. 2500 bucks a square gets you a new house that meets code, but if you wanted to build a timber villa with a high stud you'd have to spend double or triple.

by doxiedog | 20th Jan 22, 8:04am 1642619081

So true, we had plans to build a replica villa on our section in Lincoln, Christchurch. It had a hefty price tag, we have since decided to sell the section ( under offer) as it seems cheaper to buy a new house or one a few years old.

more deadlines and prices lately so we are happy to get out and hopefully buy with cash

by mfd | 19th Jan 22, 7:04pm 1642572263

I don't think this is how it works. As house prices increase, section prices will increase. With your logic, house prices always relate to the 'fundamentals' of section prices + building a house.

If house prices fall, section prices will fall in unison.

by Yvil | 19th Jan 22, 12:31pm 1642548694

Chebbo: "I have no words"

Looks like you have at least 4

by HW2 | 19th Jan 22, 10:57am 1642543075

My major focus this year will be on encouraging landlords to get their rental properties up to a reasonable standard. Far too many flats/houses are shockers

Gummint already been doing that and failing by setting stupid standards where rules contradict. Resulting in houses staying empty and a loud outcry about ghost houses

by linklater01 | 19th Jan 22, 11:26am 1642544769

TTP,

"PS My major focus this year will be on encouraging landlords to get their rental properties up to a reasonable standard".

What an influential chap you must be. Speaking as a landlord, there is no excuse for landlords who have chosen to provide substandard housing and they should be hit hard where it hurts-in the pocket. Those who continue to drag their heels should face compulsory purchase orders with the price suitably discounted to reflect the work needing done to bring the property up to a reasonable standard.

by fortunr | 19th Jan 22, 2:42pm 1642556525

Economic fundamentals might be solid (and this could well be questioned - especially with regards to indicators such as inflation rate, private household debt levels and concentration on housing etc.), but the problem is that the current NZ housing bubble has reached levels that have gone well beyond any sensical relationship to such economic fundamentals.

If you wanted the housing in NZ to accurately reflect economic fundamentals such as income levels, then current house prices in NZ would have to be dramatically less of what they currently are, and no real estate agent speak can hide this very simple fact.

by Eschaton | 19th Jan 22, 3:33pm 1642559624

Multiple generations worth of wealth, productivity and plunder are tied up in property, not just 1, 2 or 3 people's current income.

by powerupkiwi | 20th Jan 22, 9:53am 1642625583

If that we’re true, we’d see mostly linear growth in property prices. It seems doubtful that homeowners have become dramatically more productive over the past two years. This argument also ignores capital replacement costs. Until we see multi-generational mortgages (which looks increasingly likely), your argument is very wrong. Prices do eventually track incomes.

by RickStrauss | 20th Jan 22, 2:39pm 1642642740

Multigenerational mortgages seem a symptom of government abandoning its people and governing instead on behalf of banks. The opposite of the post-war governments who built to make housing affordable for average Kiwis. Enabling this to happen would be morally reprehensible.

by napierboy | 19th Jan 22, 9:53pm 1642582388

Unemployment at record lows, GDP per capita rising fastest than it has for a long time, and that's despite what we thought was our big money earner (tourism) being shut off for 2 years, now in it's 3rd. Our debt to GDP ratio is one of the lowest in the OECD. You're right, our economic fundamentals is solid and New Zealand is a desirable place to live.

Government needs to go down hard on scum landlords. Everyone deserves a warm, dry home to live in, and landlords who think they are doing people a favour by offering, damp, cold and mouldy homes for sky-high rents and not spending any money on the property need to be forced out of the market.

Looking forward to the banks coming after the highly leveraged landlords as interest rates rise.

by Nifty1 | 19th Jan 22, 9:59pm 1642582776

Do you think $15billion dollars of wage subsidies over the last 2 years has anything to do with it, what's it going to look like now the payments have stopped and inflations here?

by Roy1 | 19th Jan 22, 10:41am 1642542075

If this type ofnews continues for next quarter than can confirm the fall - though all indicators are pointing towards downside but still as this time if and when it falls will burn many,specially those who entered recently under FOMO by overstreching. It has already started in stock market and is happening ( Many retailers who entered last year and saw windfall gain are in for surprise) :

https://thekaka.substack.com/p/dawn-chorus-house-prices-fall?token=eyJ1…

by jeremyr | 19th Jan 22, 12:56pm 1642550208

....and all of those people that thought that because their house was worth x more dollars and interest rates were low, then surely they could afford a new boat and a new car....now they will have already lost money on the boat, and the car, and will be paying more interest and have shrinking equity and a whole lot more debt. Plenty of people are going to be in this position.

by HouseMouse | 19th Jan 22, 3:45pm 1642560346

Yeah I'd never be comfortable with that approach myself, but many people have been doing it that's for sure, and from what I can tell banks have been quite encouraging of it.

I guess as long as property prices were going up - and almost no one believes they can go down meaningfully in NZ - then it was seen as a safe strategy.

Although to be fair most people doing it wouldn't have even thought about strategy - it was just a 'no brainer' and 'everyone does it' (Keeping up with the Jones')

by Jaf | 19th Jan 22, 9:58am 1642539522

House prices increase Steep. MSM spin goes on overdrive, forecasting even more spectacular rises. When market falters wither MSM predictions of house price decline? With muted breadth, play around with words, a negligible per cent. As if its taboo to even mention house price falls. If the staircase going Up is steep, is it not the same staircase one uses coming Down????

by Richardfromauckland | 19th Jan 22, 10:08am 1642540102

Feels more like an escalator than a staircase.

by MortgageBelt | 19th Jan 22, 9:57am 1642539423

If would-be house buyers can’t borrow the money then how can sales actually happen?

Even 4th time house buyers with 70% equity and good incomes cant qualify for loans. So vendors can’t sell under that scenario as they can’t rebuy.

by MisterB | 19th Jan 22, 10:41am 1642542064

Do you mean 30% equity? I'd be surprised if house buyers on good incomes with a 70% deposit wouldn't be able to buy unless they have existing expenses and commitments out of this world... the CCCFA simply requires lenders to see all expenses etc.

It's certainly a stink piece of legislation that seems to be having unintended consequences, but it seems that much of the complaining about it is often from those vested interest, like REA and especially brokers, who would see less commission from smaller loans. Smaller loans is a good thing. People should not be borrowing >6 times their income. The accepted benchmark is 4x.

by Solid_Granite | 19th Jan 22, 11:06am 1642543615

Well this is the growing issue. Honestly first home buyers couldn't afford to buy for years now Without stretching themselves financially. The solution has just been, well do it or you'll miss out.

Banks suddenly decide enough is enough.

This is why its important to recognize unsustainable price growth and nip it in the bud early on. Or you'll suddenly find yourself with a shock downturn that catches everyone by surprise.

It will always be a shock rather than a slowdown, because banks will determine their losses due to a slowdown and be much more reluctant to lend, exacerbating the slowdown.

If you ask me, NZ banks are due some kind of reform to stop them preying on money. Seems a conflict of interest.

by Kiwi Tim | 19th Jan 22, 11:22am 1642544565

How many more articles will it take before you realise its CCCFA legislation and not bank process/policy. Banks hate it, cost 10s of millions to implement new systems, more staff needed for longer processing times, less lending etc

by RickStrauss | 19th Jan 22, 11:38am 1642545508

It's certainly interesting that when "personal responsibility" (something folk usually purport to believe in) becomes part of the picture banks are more careful about what constitutes responsible lending based on income and expenses. Makes you wonder what they were doing before when any negative consequences could be left for others to bear.

Prices are too high because of monetary and other policy support for keeping prices high. It's not a bad thing if they come down .

Sellers can always sell their houses, they just have to ask more reasonable prices based on what banks determine from income and expenses looks like sensible lending.

by MortgageBelt | 19th Jan 22, 12:01pm 1642546897

Some sellers can’t sell now - as the bank won’t approve their existing sized or similar mortgage on a new security ( Eg potential new home).

So more and more vendors will sit tight for 6 months until they are confident enough to move.

by RickStrauss | 19th Jan 22, 12:07pm 1642547224

Sounds like the bank thinking that if personal responsibility is required some of their previous lending might not have been completely prudent, income and expenses considered. Maybe they were factoring in taxpayer and reserve bank as the backstop, rather than bank/personal responsibility.

by MortgageBelt | 19th Jan 22, 1:01pm 1642550473

That is a ridiculous comment especially in cases where,say, a couple in their 40s has been comfortably paying a modest mortgage for 10 years, then once they sell to move for various reasons they cannot maintain or secure new/revised similar borrowing precisely because of the banks implementation of the new CCCFA.

There are many examples of this occurring. It is not a pullback of risky or over-borrowing.

by RickStrauss | 19th Jan 22, 1:14pm 1642551278

All we have to go on is the banks own behaviour when charged with taking some personal responsibility, and anecdotes from parties in whose interest it is to have more loosely flowing credit and ever higher prices.

by MortgageBelt | 19th Jan 22, 1:34pm 1642552484

An expectation of a modest mortgage for a good/secure income household is not an expectation of ‘loose lending’.

by RickStrauss | 19th Jan 22, 1:38pm 1642552724

That's correct. Hard to imagine those have gotten the bank directors nervous about personal responsibility.

Maybe lower house prices are needed so NZers can have a modest mortgage for good/secure income households without requiring loose lending.

by MortgageBelt | 19th Jan 22, 2:47pm 1642556820

Let’s see what happens.

by RickStrauss | 19th Jan 22, 2:56pm 1642557391

I lean toward expecting the politicians to do the banks' bidding. At the end of the day property has become a welfare scheme for the wealthy not a market with risk and price discovery.

by Averageman | 19th Jan 22, 6:31pm 1642570262

Nats sure. If Lab protects the banks first against the interest of mid to low income NZ, it will be the biggest ideological sell out in NZ political history.

Watch this space....

by Nifty1 | 19th Jan 22, 7:11pm 1642572696

Labour's already done this...?

by Vivid | 19th Jan 22, 7:29pm 1642573775

Have you been watching for the last few years?

by Nifty1 | 19th Jan 22, 8:56pm 1642578984

Yeah I've seen house prices go to the moon locking out low to middle income earners... Why? Labour did nothing & RBNZ pumped the market full of cash benefiting asset owners...

Am I missing something?

by RickStrauss | 20th Jan 22, 1:25pm 1642638308

A fair few Labour MPs have property portfolios too, not just National. And the parties are now so close to each other as to in many ways be Natbour. (Also see Phil Goff turning into a NIMBY conservative mayor.)

by Brock Landers | 19th Jan 22, 12:34pm 1642548871

They can just rent instead. Nothing wrong with it apparently.

by napierboy | 19th Jan 22, 9:59pm 1642582752

It's no coincidence talk back radio is being flooded by stuff on the CCCFA. Banks have the vested interest and doing everything they can to embarrass the Government and force them to back down. The lady who spent "too much" at Kmart is just a pawn in the game.

by Te Kooti | 19th Jan 22, 10:01am 1642539709

Yes we are overdue a correction, but I'm not sure it will eventuate. I am looking and there really isn't much around at all in the area/property type I am looking at. Also lisitngs in the Auckland lifestyle hot spots (Coro and North East) are well below long term average. There are a lot of new build apartments/town houses listed however.

If you want to emigrate the border is open for business but there are thousands of Kiwi's trying to get back. Which means more pressure on housing whenever the border normalises.

by 8014 | 19th Jan 22, 10:11am 1642540316

If you want to emigrate the border is open for business but there are thousands of Kiwi's trying to get back. Which means more pressure on housing whenever the border normalises.

This scenario may have a chance of eventuating if the # of Kiwi's trying to get back > # of Kiwi's trying to get out. I'm not sure this is likely. There's better wages, schooling, weather, social care and health care only a short 2.5 hour flight to the west.

by Te Kooti | 19th Jan 22, 11:10am 1642543852

You can fly out tomorrow. As far as the bulk of Australia goes, I would argue that schooling isn't better and neither is the weather. Social care as a Kiwi in Australia, good luck. If you want to go, go. Stop b1tching and moaning about it and go.

by company of heroes | 19th Jan 22, 2:13pm 1642554814

People having attitudes like this is the reason why we got so many issues. When other people brought up issues, instead of listening to people, asking them to accept the current state or leave and not wanting any changes wont get us anywhere. It's just arrogance.

by Pa1nter | 19th Jan 22, 3:22pm 1642558955

There's a certain cost that comes with living in NZ. It's a small population stuck down the bottom of the earth. We're trying to have high end first world living conditions but lack economies of scale and higher taxation to provide it.

The whole thing is a compromise, so if your priorities are having much cheaper costs of living, or higher incomes, NZ is never going to compete with many other places. Hanging around and bemoaning the place won't get you anywhere, try it out somewhere else, it'll either float your boat, or it won't. Or work towards increasing your income and lowering your expenses.

by RickStrauss | 19th Jan 22, 4:00pm 1642561230

It's not bemoaning the distance or the ability to do productive work and sell to the world. We know NZ can do that.

People are bemoaning the centrally driven wealth transfers from wages savings to those with assets. Wealth transfers to the wealthy have been making NZ a worse place for young Kiwis. It's stupid policy we've run over the last couple of decades.

Much of the trouble young Kiwis are facing is because the older generations rely on saddling them with massive debt (so they can spend that wealth) only to then also garnish their wages for their universal benefit.

by Te Kooti | 19th Jan 22, 4:24pm 1642562688

FFS, get your head out of your a55 and actually take a look at the cost of living in Melbourne or Sydney, or even Brisbane and Perth. The exact same wealth transfer has happened there, in fact Australian interest rates are lower than NZ's. You want to live in a house in the Eastern Suburbs of Sydney - they start at $8m, apartments start at $3m (3br). Add another 7% stamp duty to that. You will spend $2m on a house 30km plus from the CBD with weather extremes and monster commute times. The wage gap just isn't as big as it's made out to be either.

by Essen | 19th Jan 22, 5:48pm 1642567733

Thank you for some facts. While there are definitely some better opportunities in Australia for some people and many people will move to be better off in Australia in the coming months, it's not always as simple as Australia > New Zealand and New Zealand is a terrible place to live. Life in Melbourne and Sydney can be tough. Until recently, Brisbane was good value but things have rocketed there too (wife is UQ alum and worked there before making a poor decision to marry me and return to NZ).

by Te Kooti | 19th Jan 22, 5:55pm 1642568118

There are many good reasons to travel & work abroad and for some there wll be career and earning advantages. I know many people who have done it and done well and the vast majority returned to NZ and have not regretted it.

by RickStrauss | 20th Jan 22, 1:30pm 1642638607

Well aware Aussie's pollies and their voters have been transferring wealth to themselves too. However, it's surprising you'd argue that the equation is as bad for Kiwis as here. I have multiple friends who live and work there, both renting and owning, and enjoying a better overall balance of wages vs. living and housing costs. And the rental equation is a key one at the younger ages, as lower rent and living costs are enabling them to build wealth more quickly than in Auckland or Wellington.

You may also need to withdraw your head from your posterior if you're unaware that this is a reality for many younger Kiwis.

by Pa1nter | 19th Jan 22, 5:18pm 1642565904

As has been said, there's nothing overly unique to NZ in this regard. It's just that overseas, you have more options of cheaper places to live. We have them in NZ, just most people don't want to move there.

by al123 | 19th Jan 22, 6:44pm 1642571098

The options are not like-for-like though. Say for example you want to live in a city of around 100k people, with a University and a hospital nearby. There are no options in NZ where you can realistically get a house for less than 500k. Even in other places overseas where housing prices have also gone through the roof there are plenty of small cities with those kind of amenities which are way more affordable.

by Lord Dowding | 19th Jan 22, 11:32am 1642545124

Oh yes the saving Nirvana that is Australia for all the people that have never lived and worked there.

by Jesse1 | 19th Jan 22, 11:45am 1642545920

One thing is certain about Australia I believe: If you are in your 20s or early 30s, go and save up at two or three times the speed you will here in the same job which is easily done even in Sydney. Over 5 or 10 years it makes a huge difference. Then come back if you want. It's what I did.

by dollar_bill | 19th Jan 22, 11:55am 1642546516

be a man not a kayway have a pess not a wayway

by HW2 | 19th Jan 22, 11:02am 1642543344

The current cost of building will keep existing houses elevated. Add in a little inflation and forever low interest rates, the desire of fhb will not wane but demand could soften as they might struggle to get the funds together.

by Sluggy | 19th Jan 22, 12:36pm 1642549001

I really do not buy that line. I trained as a QS in the early 90's, new homes were always more expensive than old dungers. The belief that an increase of 50c a metre for 4 x 2 will somehow increase the value of an existing house is absolute bollocks in my opinion.

Happy to have my mind changed with any actual evidence that proves otherwise.

by HW2 | 19th Jan 22, 2:22pm 1642555373

Tell me this.... if the price of large size blinkers increases by 50 cents, then are your extra large ones likely to increase as well.

by Pa1nter | 19th Jan 22, 3:11pm 1642558275

It's all about replacement costs and a house is a house is a house. Sure new ones might have AC, double glazing, what have you but those are just frills to something that has the basic function of housing someone from the elements.

Some people value new for newness sake though, for sure.

by mfd | 19th Jan 22, 4:46pm 1642563966

Well, I agree with you even if the general reception has been frosty. The evidence is pretty clear - there have been plenty of times and places where houses have sold for below replacement price, including in NZ (maybe not after the recent price explosion, but certainly a few years ago).

Even more than that - the majority of a 'used' house price these days consists of land value. Building costs haven't gone up by as much as house prices have - the balance is land price rises. This can obviously be reversed regardless of how much it costs to physically build a house.

The land price component is extremely obvious when you realise that it doesn't cost much more to build a house in Auckland than it does in Christchurch, and yet similar houses sell for twice as much. The difference is land cost, and this is not coupled to the rising building cost.

by Brock Landers | 19th Jan 22, 11:31am 1642545079

Thousands of kiwis trying to get back to visit family mostly. Not many are that keen to actually live here unless circumstances force it.

by powerupkiwi | 19th Jan 22, 11:34am 1642545267

There are thousands of kiwis trying to get back to visit family etc., not necessarily to live. It seems unlikely that someone who hasn’t been locked in the hermit kingdom and steeped in its property mania for the past two years would want to buy a here IMHO.

What’s more likely, is an exodus of the entry-level FHB demographic. The bottom of the market is going to fall out, and take the whole economy with it.

NZ is a low productivity country, with no major competitive industry, far from any major trade route. Our wages are low, and property prices will follow.

by Let me be Frank | 19th Jan 22, 6:45pm 1642571137

"The year ended October 2021 (compared with the year ended October 2020) provisional estimates were:

migrant arrivals: 46,300 (± 500), down 61 percent
migrant departures: 48,000 (± 500), down 24 percent
annual net migration loss: 1,700 (± 700), down from a net gain of 55,800 (± 30)."

https://www.stats.govt.nz/information-releases/international-migration-…

by Jesse1 | 20th Jan 22, 11:43am 1642632182

Looking at the daily customs data there have been over 5,000 more people leave than arrive this month and that's after a slow start. My prediction is that in a few months time stats NZ is going to report that we will have a net loss of over 10,000 migrants in the month of February. There will surely be a jump in visitors and migrants when MIQ is removed, but I think the migrant part is going to lower than people are expecting and the final net migration loss for the year will be quite substantial when that finally get reported early next year.

by mfd | 19th Jan 22, 10:05am 1642539902

A brief tale from overseas with some interesting comparisons. I'm selling a house in the UK, in a city roughly the size of Wellington. It's a 2 bed semi-detached solid brick house, reasonably well located, 300 square meter plot. Great for a FHB or young family.

First interesting comparison - the house will be marketed at the equivalent of $360k.

Second interesting comparison - I've had a few quotes from estate agents to sell the property, ranging from $2k to $3k equivalent all inclusive, fixed fee, no sale no fee.

Just a little taster of how a slightly more sane housing market is working at the moment.

by MortgageBelt | 19th Jan 22, 10:09am 1642540156

Interesting - compared to 25k to 35k to sell an average NZ house.

by HW2 | 19th Jan 22, 11:04am 1642543472

What is the rate of capital gains tax you will be charged

by mfd | 19th Jan 22, 11:11am 1642543883

Not much payable, perhaps a couple of k. Price is up from about $250k equivalent ten years ago, and the house was our primary residence for some of this - the gains are discounted based on how long we lived in it. Add in a couple of tax free allowances and the remainder is minimal.

by HW2 | 19th Jan 22, 2:37pm 1642556251

Based on a 100k capital gain 2k is obviously only 2 percent and sweet FA. Kiwis did not want a bar of the late sir michael cullen capital gains tax because he was proposing a 33 percent tax rate. That was never going to get buy in

by RickStrauss | 19th Jan 22, 2:58pm 1642557525

Seems reasonable to just apply the same tax rates to all income whether earned (productive work) or unearned (windfall). Graduated tax bands.

by mfd | 19th Jan 22, 3:09pm 1642558184

In this case, the majority of the 'windfall' comes from inflation. Some accounting for that would be reasonable (and pretty easy to calculate and subtract from the gain).

by HW2 | 19th Jan 22, 3:30pm 1642559400

RS That is the attitude that sunk CGT... you got what was deserved.

by RickStrauss | 20th Jan 22, 2:40pm 1642642838

I merely pointed out - as John Key did - that income from one source is the same as income from another.

All you're demonstrating is your own freeloading entitlement mentality. The bludger mentality that actually sunk CGT.

by HW2 | 19th Jan 22, 3:27pm 1642559251

by linklater01 | 19th Jan 22, 11:36am 1642545371

mfd,

When I sold our home in Glasgow in 2003, the agent's fee was 1% and you are paying less than that. It's been the most puzzling feature of life here that so many Kiwis are quite willing to pay the exorbitant fees charged by agents.

There are lots of agents, so competition should have driven these down, but to my knowledge, all the main players have very similar fee structures. An informal cartel perhaps?

by mfd | 19th Jan 22, 11:55am 1642546505

It's a mystery that people continue to pay so much. Here in Christchurch I have put an offer on a house sold by total realty who offer 1.25% commission, probably plus GST and maybe other fees. Still expensive in a UK context but significantly better than most. They were perfectly fine to deal with, very efficient and quick at selling, and we didn't get it despite our sealed bid being over asking price so they got some good offers together.

Not sure why people don't vote with their feet - perhaps they like funding real estate agents lifestyles?

I get the impression that the charge is so high because they achieve so few sales per agent, and spend half their time drumming up business. How do we get to a world where there are half as many agents selling twice as many properties each and charging half as much?

by Waikatohome | 19th Jan 22, 1:07pm 1642550839

In the UK agents are employed with a base salary + commission. The agency advertises not the individual agent. My brother in law got his real estate licence in Auckland. Commission only and had to pay his own advertising. Not even minimum wage is paid. If NZ agents don’t sell they don’t eat. No wonder there is some sharp practice and high fees.

by PineTreez | 19th Jan 22, 12:11pm 1642547505

Yes, I find their fees absolutely staggering.

There was more justification when it meant coordinating newsprint advertising week by week and there were newpapers, printers and distributors clipping the ticket, but now with online advertising doing a far better presentation for a tiny fraction of the cost, then prices to the agents must eventually start to move downwards.

I can't fathom the folk who migrate from one home to another each decade. They might fool themselves that they're upgrading or riding a wave of rising prices, but in reality they are throwing a handsome proportion of any price gains into the arms of the real estate folk, and it's total madness.

by Squishy | 19th Jan 22, 10:10am 1642540212

A softer landing will be engineered through via repeal of overbearing CCCFA regulation and reopening borders. Also RBNZ could skip a rate hike by directing attention away from rampant inflation and towards Omicron.

The music can't be allowed to stop given property is New Zealands economy.

by HouseMouse | 19th Jan 22, 10:31am 1642541507

Don't know about repeal, that would be very embarrassing for the govt.

by Jamin | 19th Jan 22, 10:32am 1642541522

Soft landing will be engineered by inflation. House prices stay the same, but the real value of the money being paid will be slowly less and less.

by taimaiakka0 | 19th Jan 22, 10:15am 1642540540

After a massive rally....some places are up by as much as 100% since the start of pandemic, so a fall of of 5% to 10% will be symbolic and may only help in cooling FOMO. In NZ Housing market will not crash (Even in 2008 had fallen by 10% to 15%) but may not rise again for next few years.

Only this time as the market was funded by cheap and easy money ( not to forget government generosity to even thos not effected by pandemic) as never seen before, may be this fall could be different than witnessed before in NZ.

Have noticed many of those old houses on 600 / 800 sqmt sections are not going as now mum n dad builders or new builders have become extinct, hard to find so not getting the price that vendors are expecting. This scenario is not only because of higher interest rate or getting hard to get finance but more because, now maths does not work with the asking price / risk to reward is not favourable and many matchboxes houses that have mushroomed all over are not to able find buyers easily not even at discounted prices.

So many who had overstreched and were in it for short term ( unable to sustain / hold for long) will break and may have domino effect but that will be a while, if it has to happen. Those will deep pockets are in rent to mortage situation may hold for long till the market turns again.

by Carinaz | 19th Jan 22, 10:31am 1642541512

Risk to Reward in a ponzi like situation justify paying any amount of premium on top of premium - do not mind paying 1.2 million for a million dollar house as know that will soon sale for 1.4 million and the person buying for 1.4million is buying to resell for 1.6million and so on....As long as the chain is in motion, it keeps moving higher and higher and the moment this stop like any PYRAMID SCHEME...it ......

Think, it is for this reason those old house with 600sqmt sections are not selling and also news or rumors now in market is that houses being built on this section are also not attracting much buyer and if those houses start selling at discount as possible as situation may arise where mum and dad builders are happy to sacrifice profit to avoid lose. It may set a chain reaction in motion.

by Jamin | 19th Jan 22, 10:42am 1642542156

Traditionally you can counter this argument by pointing out that we have an increasing population so the location of a house generally becomes more sort after over time as a city expands.

Also for the last 30 years we have lived through a period called the great moderation where interest rates have steadily fallen supporting rising prices.

both these points are not currently in play.

by brisket | 19th Jan 22, 10:38am 1642541936

Auckland is going to see a ton of unaffordable ‘affordable’ townhouses on the market over the coming year. Developers will be crying into their beer because FHBs can’t borrow 950k for a two-story townhouse in Flat Bush anymore. Yet there’s now so much equity available to long-time property owners that prices for genuinely desirable stuff will probably remain high. It’ll play havoc with the indices. I think we’ll see more of a two-speed market, with more divergence between what actual FHBs can afford and the high-end.

by Roy1 | 19th Jan 22, 10:47am 1642542428

Next to watchout when many of this developers start to give out house with whiteware / furniture.

Those will deep pockets may still survive but many who had diverted everything and are over leveraged should worry as for may those townhouse will be ready in next few months or years and if downturn gathers momentum will be finished unless they get out on time.

by Yvil | 19th Jan 22, 10:39am 1642541947

I predict a very significant increase in the housing stock for sale coming February and March

by rastus1 | 19th Jan 22, 11:49am 1642546173

That's a no brainer.

by Yvil | 19th Jan 22, 12:34pm 1642548897

OK, go ahead and make another prediction and see how it pans out (put a date on when your predicuion will happen).

by Pa1nter | 19th Jan 22, 3:17pm 1642558656

I predict in the middle of winter, the number of housing going on the market will decrease.

There, we've both just "predicted" annualised trends in real estate marketing.

by HouseMouse | 19th Jan 22, 3:37pm 1642559864

I assume Yvil means more than the usual seasonal lifts in February / March.

by Yvil | 19th Jan 22, 6:21pm 1642569695

Pa1nter, I was talking about the "stock for sale" you reply by talking about housing going on the market = listings, you might think it's the same metric, it isn't. Housing stock is determined by both, the number of listings and the number of sales. The reason why I predicted a significant lift in the housing stock for sale is that I see more houses coming onto the market AND fewer houses selling = more stock for sale.

by Pa1nter | 19th Jan 22, 6:46pm 1642571196

Given the tighter lending rules, then that's probably also a given.

by Yvil | 19th Jan 22, 6:50pm 1642571422

Glad you agree with me

by MortgageBelt | 19th Jan 22, 7:35pm 1642574123

Until many vendors give up, & withdraw their listing.

by rastus1 | 19th Jan 22, 5:19pm 1642565950

Another prediction? I just said it’s a no brainer. it’s down hill from here...

by Yvil | 19th Jan 22, 6:22pm 1642569755

So nothing of substance, just a vague opinion without any specifics or timeframe… weak

by printer8 | 19th Jan 22, 2:31pm 1642555905

rastus

re: "That's a no brainer."

Nothing is certain: Just from my library of how wrong one can be:

"by rastus | 21st Mar 20, 6:00pm

Shares just correct instantly, housing will follow like night follows day."

Have a great day. :)

by rastus1 | 19th Jan 22, 5:22pm 1642566134

In a free market it would have occurred. QE and a crooked bunch of bankers has bought some time....but so what. It’s happening now. I’m ready, are you?

by Caughtinthemiddle | 19th Jan 22, 10:40am 1642542005

The Fed will force Orr's hand and interest rate hikes will need to occur to prevent inflation on imported goods adding to the domestic inflationary pressures we already have. The size of the rises will be less significant than the fact the the RBNZ is putting inflation and currency in front of housing, at least for now. That will dry up what optimism remains that property is still a blue chip asset and we will see a correction as investors pivot in greater numbers to other asset classes. The next questions are how much, and how fast is this correction going to be allowed to happen before we see "stability" threatened and counter measures deployed?

by Yvil | 19th Jan 22, 10:48am 1642542535

A good article although:

Perhaps no other downturn in the housing market has been as widely anticipated as the one which is supposed to occur this year.

Could have been written at the beginning of 2019 when Covid arrived

by Zen20 | 19th Jan 22, 10:53am 1642542807

True - it is the much heralded events that never actually seem to eventuate, a la Evergrande. The true clusters happen before anyone has realised like the GFC.

by RickStrauss | 19th Jan 22, 11:42am 1642545759

Massive welfare wealth transfers from govt and reserve bank to the rescue again to keep prices up, you think?

by Yvil | 19th Jan 22, 12:39pm 1642549197

I think things are going to deteriorate by winter 2022, not just housing other economic data as well. When that happens, yes I expect the same RB and Government response as previously

by RickStrauss | 19th Jan 22, 1:21pm 1642551671

Which is a big part of the problem, really. The government and Reserve Bank turning housing into a welfare scheme for the haves helps drive FOMO, as young people recognise they're on the wrong side of farcical, morally decrepit wealth transfers.

Terrible governance in NZ over the last couple of decades.

by Sluggy | 19th Jan 22, 2:11pm 1642554668

So much business is propped up by the housing market, it is inevitable that when house prices begin to normalise the pain will hit the whole economy. Standard eggs in one basket outcome.

by HouseMouse | 19th Jan 22, 11:49am 1642546165

Good point.

by ngakonui gold | 19th Jan 22, 10:52am 1642542778

"""Dark clouds gathering" more like an off white fluffy cloud just popping in to say hello.

by JRSNZ | 19th Jan 22, 11:03am 1642543384

Imagine being a FHB in Papakura. You bought your first home in November. You somehow managed to scrape together a 20% deposit. Phew. You're on the ladder.

Your equity is now 13.3%.

by Brock Landers | 19th Jan 22, 11:18am 1642544300

Play stupid games, win stupid prizes.

by VTHO | 19th Jan 22, 12:07pm 1642547268

Is wanting a home for your family a stupid game? Some would argue not. If you buy and intend to live there for 20 years and can afford it, then best not to worry about prices and enjoy your family. Worrying about prices will do nothing but bring you stress and resentment. If it was a rental or to flip... well that is another story!

by Brock Landers | 19th Jan 22, 12:39pm 1642549150

Wanting a home for your family is not a stupid game at all.

Intending to live in Papakura for 20 years on the other hand...

by VTHO | 19th Jan 22, 2:41pm 1642556464

Touche Brock! lol..

by Miguel | 19th Jan 22, 12:44pm 1642549474

Seems pretty pathetic to have a go at people just wanting to buy their first home.

by Brock Landers | 19th Jan 22, 1:05pm 1642550700

These people are grown adults.

They should have well developed abilities to control their impulses and to assess risks.

The Auckland housing market is obviously a very stupid game right now.

by Albert2020 | 19th Jan 22, 1:11pm 1642551080

Brock you could have said that about the past decade

by Brock Landers | 19th Jan 22, 1:16pm 1642551415

No time in the past decade has even been close to the current level of stupidity.

by Albert2020 | 19th Jan 22, 1:21pm 1642551671

I would argue when COVID arrived on these shores there was far more pessimism regarding the housing market

by Brock Landers | 19th Jan 22, 2:10pm 1642554655

That's sentiment.

The numbers stacked up far better than they do now, however.

by RickStrauss | 19th Jan 22, 1:23pm 1642551818

Sure, but you'd have to excuse younger Kiwis for seeing that the government and Reserve Bank step in to prop up house prices at the drop of a hat and being on the wrong side of this causes a massive loss of wealth to them. That drives the FOMO, seeing their wages and savings become meaningless. They're stuck between a rock and a hard place, and they don't know how much more the government and Reserve Bank might pour into housing prices to keep them going up.

by Miguel | 19th Jan 22, 4:05pm 1642561547

Exactly. Labour, National and the RBNZ have shown they are willing to ignore the fact that the vast majority of people think prices are already too high, and may well be willing to continue to ignore inflation, increased financial risk and just keep propping up the bubble.

Brock, your lack of empathy for people in this situation makes me think you would have made a good landlord if you were born 20 years early.

by Brock Landers | 19th Jan 22, 6:42pm 1642570924

Nah mate. I empathise. I've been faced with the same dilemma.

I'm just voting with my feet instead of sticking around Jonestown to drink the Kool-Aid with the cult.

Buying a lousy townhouse in Auckland right now is a very risky thing to do.

by Solid_Granite | 19th Jan 22, 6:46pm 1642571192

I can't believe we're discussing the idea of "feeling sorry for homeowners" right now.

by Pa1nter | 19th Jan 22, 6:49pm 1642571394

The Aussie market will likely shit the bed at around the same time as the NZ one.

Your new place might be worth less than what you paid before it's even finished.

by Brock Landers | 19th Jan 22, 9:57pm 1642582649

Hi s1mple.

Who knows. It's unlikely the way that it's going in that region at the moment.

Doesn't really matter either way. It's a home to live in. Great climate, nice house, no debt. Freedom.

Maybe you can come do the painting for me.

by chebbo | 19th Jan 22, 11:45am 1642545942

And with a median house price of $1m in Papakura, that makes putting it into dollar terms easy.

Our hypothetical FHB just lost $67,000 in a month, or 1/3 of their deposit.

by Albert2020 | 19th Jan 22, 12:41pm 1642549279

Yes, shame on those FHBs that chose to purchase a house that they could afford to provide stability for their family....they should have just kept their house buying plans on hold for the crash that has been predicted every year for the past 5 years.. sarc

by ikimpaul | 19th Jan 22, 11:08am 1642543729

Having a bit of a chuckle looking at the housing market in the Hutt Valley. Currently 410 houses on the market - which at 40 houses sold a week is 10 weeks stock - the most stock in 5 years.

Most people listing are in La La Land still when it comes to the value of their house. A 3 an 1 in Alicetown listed last week for 1.275M - meanwhile in nearby Woburn (The hutts highest price suburb) a 3 and 2 is listed at the same price and thats been on the market 3 months, whilst in the next suburb in Petone - equivalent 3 and 1's (some with more land and floor SQM) are going for less than $1.1M.

Another house in Stokes Valley listed for 1.15M - 100K over its homes and QV valuation - meanwhile much nicer houses are currently listed at 100-200K below their QV and homes valuations and have been on the market 2-3 months.

Surely Real estate agents can clearly see the market, the equivalent stock and current prices - your just wasting yours and the sellers time listing in a slowing market at a ridiculous price

by Kate | 19th Jan 22, 11:59am 1642546767

Been watching the Hutt market as well. Seems rent prices might be coming down. And I agree on some of the asking prices - take this one;

https://www.realestate.co.nz/42086594/residential/sale/10-martha-lawson-lane-central-hutt

2 bed, two bath (row) townhouse on 123m2 land. Asking Over $1,145,000.

Purchased in 2019 for $850,000.

So many of these have sprouted up in the past two years, I fear a lot of these owners might have purchased a devaluing asset. And, as I mentioned, rent prices seem to be coming down.

by ikimpaul | 19th Jan 22, 12:20pm 1642548014

I saw this one too, interestingly its QV valuation is $1 410 000 - they think its a 3 and 1 and not a 2 and 2 - so this is a good example of an agent listing it more closely to what its worth, although given most of the 2 and 1's are selling at $600-750K in the valley and it was built before 2020 (so the "new build" tax laws dont apply) you would think it would be too pricey for a FHB and unlikely to be of interest to an investor who can pick from multiple developments at the moment.

by HouseMouse | 19th Jan 22, 12:23pm 1642548213

What does '3 and 1' mean? Three bedrooms and one carpark I assume?

by ikimpaul | 19th Jan 22, 12:30pm 1642548642

it means 3 bedrooms 1 bathroom

by HouseMouse | 19th Jan 22, 12:21pm 1642548087

It's certainly a significantly better than average quality of design and finish.

I assume that they feel they can get that kind of price given the potential to convert the study to a bedroom? Relates to the conversation I initiated the other day about my own townhouse and potentially adding another bedroom.

by ikimpaul | 19th Jan 22, 12:33pm 1642548836

true- i was thinking a downsizer who doesn't want a garden and house to maintain, wants to walk into the CBD - would probably pick it up. Sell their big house in neighbouring suburb Woburn for $1.6M and have plenty of change left over.

by Kate | 19th Jan 22, 1:00pm 1642550428

Can't see myself ever wanting to downsize to a section that's smaller than the house :-). And the Woburn house on a full (600-800m2) section would be worth over $2m in comparison! Plus, these common two story townhouse designs aren't the best for a retirement home as all the bedrooms are upstairs. But, yeah horses for courses. But to me, even half a million for a row house is way over the top. NZ market prices are in lala land (the one I live in included, of course!).

by streetwise | 19th Jan 22, 2:10pm 1642554628

You're right. From experience I would not recommend those over 50 years buying a two or multi-storey townhouse. Time flies and before you know it you are in your 60s and suddenly you feel yourself making mis-steps, and then you hit your 70s and you find climbing those stairs several times a day more of an effort. I'm in my mid-70s and fortunately have a one storey townhouse, but I have similarly aged friends who have multi-storied town houses and wish they didn't for the above reasons.

In fact, I would recommend that anybody wishing to by a property to see them through retirement should be looking at this matter from their 40s.

And, of course, nobody with young growing children should confine them to a puny townhouse with no space to play outdoors.

by RickStrauss | 19th Jan 22, 3:02pm 1642557740

Depends where those townhouses are (re parents with young children). I've seen good ones in places where the provision of shared and council green spaces provides the kids with a far better play environment than just a smaller backyard would. Not all, of course...

by Trude | 19th Jan 22, 4:52pm 1642564330

Totally agree with Kate and Streetwise multi-storied townhouses are dangerous as you age and make you lose your independence earlier. With young children you have to be so much more careful than in a single level home. Craziest I ever saw, was a three level town house in a nice Wellington area with kitchen and living room on the top level. Who wants to carry their groceries up three levels? Also not recommended for elderly pets.

by Brick in the machine | 19th Jan 22, 1:06pm 1642550790

When I was working for one of the big ones it was routine when trying offer new lending to customers who had previously gone through brokers that the broker had cut so many corners that even with more equity, and better income, this customer would never have got that same lending now 2-3 years later.

This CFFFA "credit crunch" is more a symptom of,

Banks choosing to trust broker applications
Brokers framing themselves as the "People's champion" by cutting corners for their customers and over extending credit
The whole industry having to little to no hindsighting
The Government not fully understanding what was happening in their own home

When the minister of finance is a lawyer first, the CEO of a bank a politician, the broker a cowboy, and the customer is to be sheared (with the odd skinning), it's no surprise that when a law with teeth (even baby teeth) get introduced everyone is doing their zip up and seen running from that sheep.

The real question is who gets sacrificed first for these years of over leveraging our children, will the Banks catch the Brokers, the Government catch the Banks, or the less likely (but much needed) we finally catch the Government?

by Kate | 19th Jan 22, 1:04pm 1642550669

Great post. Sounds like there has been a sort of kiwi-version of liar loans via brokers. When will we ever learn?

by Averageman | 19th Jan 22, 1:25pm 1642551922

Agreed. Very apt and humorous angle to you post. Adding in a bit more, sheep that have recently been absolutely well "fleeced" do not do well when the inevitable late winter storm hits. Many are lucky to be recycled into dog food.

by RickStrauss | 19th Jan 22, 1:27pm 1642552035

I do recall seeing and hearing some pretty sketchy advice from mainstream brokers when dealing with them and when viewing their posts in a private Facebook group. "Just don't tell them" in various ways, even up to the level of disclosure in a portfolio split across different banks. Which seems...interesting.

by pete johns | 19th Jan 22, 1:35pm 1642552536

Brick to much sense , cut it out , tax payer will be left holden the bag..

Jacinda will walk off into the sunset...later this year

Here's Robbo.

by Nifty1 | 19th Jan 22, 2:00pm 1642554005

A common one from brokers over the last couple of years "we'll just say you're going have 2 boarders paying x amount per week, that will increase how much you can borrow" They have been the masters at fudging applications...anything for the deal to work and to get that comission. I have no doubt they're coming up with new ways to work the system.

by Brick in the machine | 19th Jan 22, 2:04pm 1642554267

Nifty1 you are 1,000,000% correct here, I once went through one of the nation's "top brokers" to see how his lending methodology differed from the Banks.

People in my office now call him Weasel, and they were already fairly loose themselves.

by HouseMouse | 19th Jan 22, 3:04pm 1642557868

I wonder if some have been trying on an 'ethnicity angle'.

That is, multi-generational living is common in South Asian and East Asian households.

Brokers might argue that households will have boarders (relatives) from Asia staying with them, studying here.

So when Mr and Mrs Patel are looking to buy the 4 bedroom house with their one child, just put down that two cousins from India will stay in the 3rd and 4th bedrooms, netting say $400 extra.

by Brick in the machine | 20th Jan 22, 10:28am 1642627728

When providing lending one should always ask,

"How would you defend your acceptance of this lending application if it landed you in court?"

If your reason for extending Mr & Mrs Patel lending was because of an assumption based of ethnicity then you'd quickly be staring down the barrel of a fairly unpleasant court ruling.

The main job of a lender is to extend credit while mitigating risk and adhering to the law, assumptions don't fit well with those preogatives.

by Colin Nemo | 20th Jan 22, 10:28am 1642627728

Respectfully, the main objective of the bank is to push credit onto consumers and businesses and earn their interest (as their income) and play within the boundaries of the law.

If banks are able to use brokers to 'help' consumers take out loans and to 'own' their own homes, the bank has simply outsourced their sales teams and reduced their legal liability in the case of court proceedings made against by any consumer in the case of irresponsible lending or mortgage fraud.

The bank will simply argue that they had 'accredited' mortgage brokers on their panel and it was them that had to do reasonable checks on their income/s and character and due diligence on their loan applicant before submitting it to the bank's credit assessment team for approval.

Any mortgage fraud caught will be in the the hands of a mortgage broker or firm rather than a bank employee and the bank will would be absolved of such criminal allegations. The former will take the fall for the latter.

by DTRH | 19th Jan 22, 1:22pm 1642551775

The main reason house prices went up is interest rates we’re dropped too emergency levels now inflation is high around 5% interest rates raising and look like will go back to a normal level over next year, with inflation at 5% interest rates should be 7-8% also NZD tanking .huge amount people and investors over leveraged this is a perfect storm which will take down housing market. Some people on here still thinking it’s a small bump in the road. Wake up the banks know what’s going to happen most smart investors have already sold.

by RickStrauss | 19th Jan 22, 1:28pm 1642552106

Wonder how long the RBNZ can pontificate on and "look through" inflation to defer raising interest rates to achieve their inflation target.

by taimaiakka0 | 19th Jan 22, 1:23pm 1642551792

This expert talking on CNBC network, what if he is correct - possibility.

Check it out.

https://youtu.be/hNzD66X3ZHg

by rastus1 | 19th Jan 22, 1:45pm 1642553110

So many views.

A correction (beginning) then a melt up....followed by..

David Hunter on Twitter: "I continue to expect further correction before the stock market melt-up gets underway. My targets remain S&P to 4400-4500, DJIA 34,000-35,000 & Nasdaq 14,000-14,500. It is very possible we see the lower end of these ranges in the next week or two but it is certainly not a given." / Twitter

by RickStrauss | 19th Jan 22, 1:41pm 1642552919

First signs of rain from the dark clouds gathering over the housing market

You folk misworded "ray of sunlight gathering over the housing market", for younger Kiwis.

by Kate | 19th Jan 22, 9:33pm 1642581223

Yes indeed, it could very well be. Here's hoping. The Govt would need to follow the Helen Clark line about stepping to take over the loans of young families that find themselves underwater with a bank that's getting nervous. Foreclosure happened to so many young US buyers that went underwater during the GFC. And for many of those, their household incomes/circumstances hadn't changed - it was just that the value of the homes plummeted and banks got aggressive.

by Nifty1 | 19th Jan 22, 9:38pm 1642581516

What about property investors? Would it be fair for the government to step in for them too?

by RickStrauss | 20th Jan 22, 1:36pm 1642638995

Obviously not. On a financial website we should surely all agree that investments are about risk and reward. The government taking risk out of an investment (as they and the Reserve Bank have done in the last year) changes property from an investment into a welfare scheme.

by Brock Landers | 19th Jan 22, 9:53pm 1642582384

I can't wait for the government to use my tax dollars to bail out those who were less prudent.

I wonder what moral hazard is in Maori.

by Nifty1 | 19th Jan 22, 10:07pm 1642583276

How'd you feel if you moved city/country, away from family, to purchase your first home just to have a smaller mortgage and take less risk. You then see the government bail out FHBs in the city your from, who fought over each other at auctions and purchased homes with 10% deposits with zero regard to the future...

by Brock Landers | 19th Jan 22, 11:16pm 1642587403

This is what's going to happen.

by Kate | 19th Jan 22, 11:27pm 1642588042

Not a bail out - HC is talking about a taking over of the mortgage by a government entity. Effectively a transfer of risk from private to public.

Anyone who blames a FHB for buying during these crazy times must never have been a renter standing in line to get in to see a property behind 50 other hopefuls.

Get real. The world has moved on from 'in my day...'

The mean-spirited selfishness of some people never ceases to amaze me.

by Nifty1 | 20th Jan 22, 7:22am 1642616573

How is that not a bail out of banks and home buyers...?

by CWBW | 19th Jan 22, 2:03pm 1642554204

January is coming to an end.

There's still room for upward valuation.

by J0hno | 19th Jan 22, 3:21pm 1642558918

What is our economy made up of? If houses stop going up in nominal terms and people can't use them as cash machines then what level of reduction will there be of people buying rental houses, renovating and extending houses, decorating houses, plus boats and other purchases. If they let this happen (continue pulling back stimulus) then what's left? People don't seem to save up for this here. There's not much flowing in from overseas for tourism but I guess there's a few people making money from selling milk powder and logs. If that enough? High tech growing.. Maybe the struggle to attract talent/retain talent will get better if prices fall..i don't know how it works or what the main things keeping us going are.. . I'm hoping house price falls will force us to think of new ways for NZ economy to function Too bad we can't get into cannabis industry but there must be other ways.

by hum | 19th Jan 22, 3:54pm 1642560855

The first ones are moving.

REMINDER: Registrations closing soon to buy a home below market value!

This is your friendly reminder to register your interest to buy one of the six brand-new one-bedroom homes in The Aviary Apartments by Monday, 31 January.

The apartments are capped at $650,000, well below market value, and are built from high quality materials with low ongoing maintenance costs.

Here are some key details:

Priority will be given to first homebuyers who have a strong connection to Tāmaki, to help them get their foot on the property ladder
We require just a $5,000 deposit (however, your bank’s lending criteria will differ)
Each apartment comes with one car park

Visit our website to see if you’re eligible and to register your interest today. You won’t be locked into anything – it just lets us know you’re interested and helps us understand a bit more about you and your situation.

by Kate | 19th Jan 22, 9:36pm 1642581413

Sign of the times.

by Rob Reid | 20th Jan 22, 11:46am 1642632415

🤡

by Pomslumlord | 19th Jan 22, 4:29pm 1642562945

Great , I hope to pick up another bargain to add to my rental property portfolio

by Colmolo | 20th Jan 22, 11:40am 1642632023

House prices have risen over 50% in 18 months and when they drop by 1% for one month everyone starts panicking and saying the sky is falling. What kind of property cult is this place?