House prices now sinking throughout the country with Auckland, Rotorua, Hastings and Wellington leading the way

As in ALL previous market downturns, those who don't sell will prosper in the next upswing.

TTP

Spelling corrected.

Famous last words!!!

Yeah, lets get rid of all landlords. Renting a home is to be outlawed. Houses are to be handed out to everyone as soon as they turn 18. 

If the govt had any brains they would be buying out any developer that goes under and cost price of land & materials only and keeping the builders on to finish the jobs. Then completed homes go into the state housing pool.

Builders have job security, developers get punished for over leveraging, govt gets cheap state housing. 

Doubt it - what period of history are you going to compare this to? 

Nobody has ever witnessed or been part of the situation we currently find ourselves in. 

Do you think that 7 houses Luxon will improve the housing situation for the majority or just the investors and landlords?

I'm not getting into a political debate but the other "potential government" would have done exactly the same thing. Don't blame Cindy and co. Aotearoa is just a piss ant on the global scale, we are just doing the same as all the other OECD countries. It wouldn't surprise me if Adrian Mole (orr) has a direct phone line to Captain Biden so that he can receive further instructions.

What are you then - spruiker because its in your best interest given you property investments and risk profile?

Thank you Fitz, Bali was very relaxing!

8 upvotes and nobody checked the math, it says a lot about the kwality of the comments section.   

FYI: It wouldn't be a 48% decrease, it would be worth 48.2% of what it was originally, so 51.8% decrease

Thanks to all the people's help, who really thought I was serious about a 200+% drop in a few years, LOL.

I was actually just exemplifying how silly IO's suggestion is to "annualise a monthly loss".  

Time To Panic.

Lots of staff on the books not bringing in sales. 

My son is at Vic Uni in Welly,a couple of years ago either a student allowance or AS(can't remember which) went up by $50,almost immediately, the going rate of rentals went up by $50..."thanks Mr Taxpayer,we'll take that thank you..."

Trying to compare assets that can be bought and sold near instantly and prices move quickly, with property, where transactions are considerably slower and costly you can't really call that "property has done better" this early.

We can clearly see that, while prices have fallen a relatively small amount, the backlog of unsold properties and falling sales rates signals that sellers expectations have not caught up with what the market is willing/able to pay.  It will take time for prices to adjust.

And then of course the issue of leverage makes the world of difference.  Those that have leveraged up, a 10% drop is price is far more significant than people who bought shares with their own money.

Before the CCFA some of the stuff the mortgage brokers got through was criminal.

I know of people on two full time minimum wages (circa 80k a year combined) who have almost a million in mortgage debt.

I have a bit of a hypothesis on this.



The reason the Key Government opened up kiwisaver for first home purchases, which isn't necessarily a bad idea for people under 30 who can recover their kiwisaver balance with regular contributions, was because younger people were otherwise struggling to save money in a bank account which earned very little and had no confidence in the stock market after the GFC. 

Alot of the Key Government's efforts in the realm of finance, including the partial privatisation of the Power Grid, were about creating confidence and general will to invest in the Market. Kiwisaver was a sort of forgotten about contribution which no one really cared about unless they were preparing to retire. The long term thinking was obviously to get young people interested in saving for retirement early by getting them to think about their Kiwisaver as a housing deposit nest egg.

I also largely do not think it drove the housing bubble, even if you were earning $140k and contributing 10%, you are still only putting away 14k per year in kiwisaver + employer contribution + government contribution. What is driving this, IMO, is people using the paper value of existing properties they own as collateral to purchase rental properties, particularly after 2019.

The real question is, not that they should be allowed to borrow that amount, but why do they need to borrow more than that?

The answer is that in jurisdictions with the right type of land use and housing policies, they don't have to borrow any more than that to buy exactly the same type of house in jurisdictions like NZ where we have the wrong type of land use and housing policies.

If your goal is to buy and own your own home, regardless of capital gains, you will need _some_ debt. While you have that debt, kiwisaver needs provide the same return as the interest rate you pay on your loan before it can be considered a viable investment.



For the FHB, kiwisaver is their money, a portion of their income - it's not tax payers money like super. You can argue that there is the employers contribution however it is somewhat redundant given the fact that many salaries give total rem, that is "including employer contribution" and if it were removed employers may use that money to provide more attractive salaries (real world low unemployment problems).



SO aside from $500 a year from the government, a FHB would be better off in the long term using all of their kiwisaver to purchase, then taking a 5-10 year kiwisaver holiday to reduce the loan principal instead, then kickstarting kiwisaver again when they have less debt, than to keep their kiwisaver investment and struggle with debt for a much longer period of time.



If the argument is that Kiwisaver has pushed prices up, then what would be the difference if the astute FHB had saved and invested the money instead?

My bad!

Didn't *everything* sell late last year? Peak madness for sure. 

2 beddy !! ...ideal for busy professionals they say..lol,tell em they are dreaming...

The deposit was the biggest hurdle.  That is true but will not be if inflation persists.  Then the biggest hurdle will be servicing the debt on the mortgage.

The challenge for people who's labour is not as valuable in $ terms as others has not been removed, merely shifted, so what he says in general terms is true.

Relax, getting too technical and analytical will blind you and will potentially missing out on the simple things. No offence to all the economists out there.

Price drop will not impact me as this is what we’ve been waiting for and expecting, we like to buy when there is “less competition”(during property down turn).

This is the internet and that was just an opinion, different people make different choices and this is what makes the market work.

Sincere congratulations.

If the Govt. set up the rules of a corrupt game, that due to your ignorance, you find you are good at, of course you are going to follow it.

It's a dysfunctional system that if deliberately perpetuated by the Govt. as they are appealing to the lost common denominator in all of us.

In this case, the egg (the Govt.) does come before the chicken (the voter).