Barfoot & Thompson's sales volumes slumped in August, and its average and median selling prices were both lower than in August 2021.
Barfoots, which is the largest real estate agency in the Auckland market, sold just 578 residential properties in August, which was the lowest number of sales in the month of August since 2008 when 502 properties were sold.
August's sales were down 43% compared to August last year and were lower than any January since 2011, with January usually being the slowest month of the year for real estate sales.
The average selling price increased slightly in August, rising to $1,157,899 from $1,122,575 in July. But it was below where it was in June, and was $120,748 below its December 2021 peak of $1,278,647.
August was the second consecutive month that the average selling price was below where it was in the same month of last year.
August's median selling price of $1,111,000 was up $1000 from July, but down $36,500 compared to June. And it was down $129,000 from its November 2021 peak of $1,240,000.
However stock levels remain significantly elevated.
The agency received 1394 new listings in August, up 18% compared to July and up 11% compared to August last year. That was the highest number of new listings received in the month of August since 2016.
The high number of new listings combined with the low level of sales kept stock levels high, with Barfoots having 4637 homes available for sale at the end of August, up 78% compared to August last year.
That was the highest level of stock the agency has had for the month of August since 2011.
Barfoot & Thompson Managing Director Peter Thompson said prices were plateauing.
"The prices being paid in August are still below those being paid in August last year, but the average price was down only 2% and the median price down 1.7%.
"Given that there are buyers in the market, the combination of low sales numbers and stable prices indicates that vendors believe prices are bottoming out," he said.
The interactive charts below show Barfoot & Thompson's monthly sales and price trends.
The comment stream on this story is now closed.
Barfoot Auckland
Select chart tabs
- You can have articles like this delivered directly to your inbox via our free Property Newsletter. We send it out 3-5 times a week with all of our property-related news, including auction results, interest rate movements and market commentary and analysis. To start receiving them, register here (it's free) and when approved you can select any of our free email newsletters.
148 Comments
RE agents might to to have to do with a smaller budget.
The good news for agents is that Suzuki make very nice, cheap-to-run cars for the money ... and with a Jimny you can actually go offroad (as opposed to the leased Q7)
It's warm comfort to that Suzuki Jimny is often referred to as poorman Range Rover!
The Jimny is a much better car and will be worth more in 15 years.
Well they're going to have to start really working for their money, that's for sure. Anyone can sell into a hot market, but it's tough times like these that separate the real value-adding agents from the passive ticket clippers.
Exactly.
our neighbour is trying to sell and I told them their agent needed to do a much better job marketing their property. The advertisement made it sound like the townhouse is stock standard, and didn’t even mention 3-4 features that make it (and my own townhouse) significantly better than average.
It’s simply as if the agent still thinks we are in the boom times,
Show us the ad and let us decide. Blot out the address
Good agents used to normal trading conditions will know how to work thru this. Agents only familiar with the speculative listing model with no price and then playing king maker while dangling the price higher and higher in a market massively favoring the buyer will find the going very tough. And rightly so.
Good agents will still be making plenty during these time - If I was in a position forced to sell Ill make sure my hands was in good hands.
Isn't that we all wanted?
This trend will lead to more affordable house price for the first home buyers.
The fact that there will be 100+ comments on this article is incontrovertible scientific proof that homes are a one-way winning bet in NZ…… something… something… resilient!!
Am I doing this right?
TTP
Pretty close but you missed out the bit where all resident "Doom Goblins" will be proved wrong in mid 2023 then rounded up and incarcerated 😝
How are you going to pump your corrupt little ponzi scheme now, Mr Orr?
You are running out of sheeple who are able to pay a million dollars (of borrowed money) for the average Kiwi sh/tbox.
This crash will go down in history as among the biggest ever. All of these stupid, stupid years of ever increasing house prices, and ever increasing debt that the RBNZ called "wealth" are about to be violently unwound.
All of the RBNZ corruption, the K-shaped "recovery", the picking of winners, the enrichment of property owners at the expense of renters, the tilted playing field, the handouts and bailouts and ever increasing property market support... we are about to see where it all leads.
The corrupt system is imploding. Inflation is going to torch it all. Let it burn. 🔥
What I don't understand, was that in 2020 Orr was threatening the population with the line 'if house prices fall, we could be facing a depression, so creditors please get out there and lend, lend, lend to prevent the collapse!'.
But jump forward to 2022 and house prices are falling but Orr has gone silent. Do we not face a depression if house prices start falling?
Was he trying to fool us in 2020, or is he trying to fool us now with his silence?
"By their fruit you will know them."
I wouldn't believe a word he says, not then, not now. It is best to just filter his rhetoric out and focus on the data. We won't find truth, or useful information, in his rhetoric.
Exactly, no telling what Orr will do next. Let's not forget the Funding for Lending Program is still rolling.
Mr Orr will do exactly what Mr Powell wants. At the moment that's tighten.
I think the differences are that in 2020 the reason for the concern was a black swan pandemic that nobody was prepared for or had any idea what happens next.The other difference is the inflation that has been created 2 years later.
Mr Orr gets a pretty hard time from a lot of people who have 20/20 hindsight. I'm kind of surprised you are going down this route as well.
COVID was a great excuse - if you were following the bond markets in 2019, the global economy was going to crash in 2020, regardless of whether COVID showed up or not.
The bond markets have been, again this year indicating a crash is inbound. What is the excuse going to be this time? Another black swan?
But it did show up? If that was the back drop then that only helps the argument for him to have been concerned and therefore dropped rates?
I don't think he's looking for any excuses. He's indicating further rises and that inflation is the major concern. His recent comments after the trip overseas indicated he was most worried about being able to tame it, given the other things in play both demographically and with the war etc.
I'm not criticising here, I always enjoy reading your comments. I just feel it's really easy to criticise events from back then, but what I remember most is how uncertain everything was and I'm pleased I didn't have to make those calls myself.
The property market was already overheated, we've had a housing affordability/shortage issue since at least 2008 and economies choking on debt and asset bubbles since the GFC. When a pandemic that nobody is prepared for happens and global and local economies are reduced to core services and mass lockdowns and quarantines, what sane rational person thinks it's a great idea to blow the debt and asset bubbles bigger? A wait and see approach relying on actual data and the effects of govt fiscal policy should have been the intelligent response.
🤦♀️
We should blame the banks, who actually make the loans and drove up asset prices using their lending methods.
The Central bank is largely responding to market conditions, government and business pressure. It is not the one who set the laws, the taxes and conditions to drive the speculative mania.
Other Central Banks like Ireland or Singapore apply meaningful macroprudential lending constraints (LVR, and DTI) to prevent reckless lending by commercial banks. After 7 years of talking about it, the RBNZ is still only mucking around with the DTI idea. A responsible central bank would have had meaningful LVR and DTI limits in place over the last 5 years.
they were more interested in keeping the rock star economy moving along (feeding the Ponzi) with the bonus wealth effect.
But then Inflation caught them with their pants down...
Feeling a bit sorry for people trying to sell at the moment, and I know a few. It soon becomes obvious that a house isn't just a roof over your head as far as Kiwis are concerned. People base their entire lives around the assumption that houses will always increase in value, and it will be easy to sell up when you want (or need) to. Finding out that those assumptions might be false is very upsetting for a lot of people.
Diddums. After 40%+ gains in recent years, we are now expected to feel sorry for property owners? No.
What are renters expected to "base their entire lives around"? The joy of paying off some other prats mortgage? The satisfaction of being a serf? The warm glow of knowing that they are cannon fodder for a corrupt ponzi?
If people want to sell, they just need to drop the price until a buyer comes along. They have enjoyed huge price run ups in recent years... and if anyone gets greedy now and tries to hold out for yesterday's prices, then there will be a valuable lesson learnt.
What are renters expected to "base their entire lives around"?
Good question. It's almost like there must be more to life than just property.
It is upsetting when you find out you have been lied to. I suspect there may be a few banks of mum and dad hating the government even more now.
What did the government do? It is global inflation that is popping this bubble.
Some are still holding tight to the old saying that house price is double every 7-10 years!
House prices doubled in Ireland over the last 10 years. Just ignore the 70% fall that preceded it, and the fact that prices are still 10% away from returning to the 2007 peak.
The best investment strategy ever is to buy the bottom after a true crash.
If you reverse engineer this you realise it's patently ridiculous. Using $1,000,000 as a starting point in 2022 and using the upper end (10 year doubling), by 1862 you're down to $15 or its pound equivalent. Given 15 pounds in 1862 was about the average annual wage that's a 1:1 right there.
If you take $900,000 as your starting price and apply a doubling every 8.5 years, you're down to $13.70 in 1886.
Are median houses really going to be $3.5m in 2042? I certainly hope not.
Feedback from The Tron.
I've been to 5 auctions the past 6 weeks: 2 I was the only bidder, 3 we were 2 bidders. Placed the highest bid for all 5 (I was serious about buying, even though many here would argue it's probably not the best time, but I have personal reasons), they were ~15% below CV and all passed in (not even trying to further negociate). The only houses that sold recently in that area went for ~10% below CV. Most sellers think buyers are trying to take advantage of the situation and are still hoping for peak prices. Truth is buyers are taking mortgages to the max they're allowed to, but with rates going from 2.5% to 5% it has cut borrowing power by ~25%. Today on average 53% of houselholds income go on the mortgage compared to the long term average of 37%. Buyers have already walked more than halfway in sellers direction, now the latters have to do their part too.
"Plateauing" lol
As a long term observer of the comments on this site, it’s just funny reading most comments on here. 90% of people who comment on here are either a. Anti investors or b. Don’t own property. The negative talk and wishful thinking continues in a sellers and buyers market. Being a buyers market currently, its funny reading all the comments of “7% rates and 50% drops” to come by them. They’ve been wrong time and time again, you will literally learn nothing from reading these comments. The fact is - we are going through a correction as expected after an excellent period of growth. This is normal. The property market does also always slow down leading up to the elections. Watch how it will pick up again straight after the elections when sentiment changes and socialist labour are out. The other fact being - no government will want to run the property market into the ground as it is such a big part of the economy here. Period. So if they do, they will be risking their own position too besides the negativity will flow through the rest of the economy. Interest rates are also not high at the moment, they’re just back/heading back to normal levels. Immigration will pick up. About time someone sets the record straight and sorry to burst everyone’s bubble :p
Nice wall of text Batman.
- Our prices are currently falling at a greater pace than Ireland did in their first year of their crash (they fell between 7% and 9%).
- Ireland went on to fall 70% and have only returned to be 90% of their 2007 peak.
- Their prices were nowhere near as cooked as ours.
Using the election cycle as a reasoning did make me laugh. I mean sure, that's always a talking point with the agent when putting in an offer.....
https://www.reinz.co.nz/Media/Default/Monthly%20Press%20Release%20Asset…
"Nice wall of text Batman" LOL!
Almost sprayed my monitor with coffee when I read that.
@nzdan nice one muppet, I must have struck a nerve. We’ve all heard the comparisons to Ireland before, it happens every time we have a due correction, and people like you jump up and down. You sound like someone who doesn’t own property so enjoy your 2 mins of false hope. I wouldn’t spend another minute of my life trying to justify myself to someone like you. Just going to say population growth and with the crazy increases we’ve had over the past few years, this was totally expected, (anyone with or without a vested interest would be smart enough to understand that) anyone who bought over the past few years will still be a lot better off. Property is a long term game, corrections are part of the game. But you do you, and talk to me in 18-36 months, cheers
No nerves struck here LOL. Sold my first home in December for nearly triple what I paid for it in 2017. I now own a beautiful well maintained 1920's 4 bedroom 2 bathroom property, 200sqm on 1/4 acre with Rimu flooring all throughout. 2 heat pumps, log fire, HRV, gas hot water, full new insulation, bathrooms recently renovated, central to everything.
Well actually, the bank owns about 50%. Maybe 55% going off the latest REINZ report.
Sure mate. We all believe you.
Having followed NZdan's story on here the last few years, this is true...
I'm only here to impress you Iceman. I did exceptionally well through luck of timing, wasn't any real hard work involved.
Bought an entry level home in a Wairarapa town for $200k from a distressed landlord, sold it 4 years later for $580k. Made for a decent chunk of a deposit into our dream home. It's okay if you're jealous.
@nzdan, 580k sounds like a lot of money for you. Good on you mate.
Well it is for a spring chicken like myself, all for living in their first home for 4 years. Didn't last long though, *whoomph* straight out the bank account into the seller's pocket who went to Australia.
Back to the point, to a certain degree I have a vested interest in prices not falling, a 70% fall like Ireland would put us and many others under water. But I also don't pretend it's out of the equation. No wishful thinking here, just critical thinking based on the numbers.
Iceman is yet another example of what confirmed my belief that NZ has a serious property market bubble on our hands. Those in the property investment environment are almost entirely ignorant about risk and diversification, and when something has become too good, for too long...they think that it is 'normal'. (they're being mislead by recency and confirmation bias, but they just don't know it yet). Then again, I met people like this in the US before they got severly burnt in 2008 - 2010 period and suddenly they were far more gun shy about how wonderful property investment was - they actually understood their was risk involved. Nz Property investors don't understand that here (yet).
And what has happened to our property market the last 30 years is anything but normal - if you look at property prices in real terms over the past 100+ years, the last 30 years are an abnormality, not the norm. Driving mortgage rates from 20% to 0% is an anomaly. Something we may never see again in our lifetime...and if you understand asset pricing (cash flow / discount rate), you understand the significance of that trend.
I had a friend who told me owning a few rentals changed her life. From struggling to get through life, suddenly life is wonderful and rosy just by owning property. What was happening was her net wealth was going up week after week, year after year. She never once questioned where that money was coming from or whether it would last.
I worry that for some people they don't think things through and just trust that if they're feeling happy they must be doing something right, in this case investing in property. Also if the reverse is true, if their net wealth goes down year after year, what will they be feeling then?
That is the problem with asset bubbles - it makes idiots think they are highly intelligent. Unless they burst at least and then they realise they didn't know anything at all.
Witnessed all of this first hand during and after the GFC in the USA.
@nzdan, I think even people that don’t have a vested interest don’t understand the wide ranging implications if there is a 70% drop, it will literally impact everyone in some manner. But again, that is a very unlikely scenario. Sadly it’s the people that wait for a 70% drop who always miss out on getting on the ladder and then complain. That sounds harsh, but you know it’s true.
I agree with this. But doesn't mean it can't happen. Lending is restricted to external factors that will play out over the next 12 - 24 months which NZ has absolutely no bearing on. There is a heavy resistance on upward affordability at the moment, pushing prices down. How this will play out is anybody's guess but I wouldn't rule anything out. Even that 70% is possible, regardless of the impact on the economy it may be the new path of least regrets. We've had our fun in the sun, it's time for sleep now.
How many properties do you own Iceman? And how much do you stand to lose if prices keep falling?
(I'm not envious by the way...before you try that line of attack).
@independent_observer Really none of anyone’s business. But own enough where there is a good profit from rental income. Don’t really stand to lose at this stage as no need to sell, but still tax free profits if I wanted to sell today. It’s a long term game!
Interesting because its possible, that in real terms (that is inflation adjusted terms), you may never experience the same capital wealth you possessed last year (in your life time). But that possibly doesn't make any sense to you - even though you understand property investment inside out.
Funny how we do things, and think we know exactly what we are doing, but in reality we have been fooled by randomness, recency and confirmation bias.
I'd say 90% of the property investors I met fit this criteria. The 10% that I know who understand macro economics and risk management sold down their portfolios last year.
@independent_observer LOL. You sound like someone who has a savings account. You must have a few million in there of tax free profits which wasn’t obtained from investments. I’m not sure what property investors you’ve been speaking to, but the end goal isn’t to sell until your retirement or there bouts. So the ones you know who sold appear to be “smart”
Well I have a savings account at the moment that is flush at present, mostly from the gains made from share, bond, and property investments from NZ, Aus, Japan, Europe and the US that have done tremendously well post GFC - through to last year.
The key is knowing when to be in the market and when to be out of it. And how be to be well diversified across asset classes and currencies.
But yeah I have no idea because I just have a savings account!
https://th.bing.com/th/id/OIP.lLmNgnfxQ2bgWJoiKFaP3wHaDf?pid=ImgDet&rs=1
Have you been watching the yield curve inversions around the world of late and the trouble that is likely ahead of us by observing the bond markets?
@independent_observer you say “The key is knowing when to be in the market and when to be out of it” So you’re a trader, not a long term investor, don’t get the two confused. I am in this for the next 30+ years. Todays news is a like a spec of dust. We don’t react on what the market is going to do today or in the next 6 months and try to time selling. Just proves my point and the frequent commenters on here on focus on “today and tomorrow”
Oddly we've had guys like CWBC and P8 on here bleating on with the same narrative, then they sell their investment properties and disappear. Perhaps they were the smart investors and iceman is the fool left holding the bad debt.
@independent_observer haha I’ve been through a few downsturns, no bad debt here. The fools are people like you who comment and rejoice on these posts/get excited and react to daily news during a minor correction. That’s the reason I never comment on here. As the old saying goes, you can’t convince an idiot that they are being idiotic. .#tallpoppy
The ones that sold are smart. Someone that sold a portfolio for 5 mil in Nov 21 is at least 750k better off than if they were trying to sell the same houses today. Money in the bank earning interest. Free to buy back in to the market if or when they feel the timing is right.
Or you could be like this guy https://www.stuff.co.nz/life-style/homed/real-estate/129785832/investor…
or these guys https://www.oneroof.co.nz/news/42158
That's why I think the current market just doesn't make sense to anyone wants to get into property rental business. Housing price is high, interest rate is high, renovation cost is high, yet rental yield hasn't been increased much...
Is your end goal to sell for profit or hold rental properties for cashlow into retirement?
Iceman Did you buy end of 2021 if so I understand why you are so upset most people on this site were warning people like yourself who were in the mindset of I can’t lose. Now the downturn has arrived and caught you with your pants down don’t start getting stroppy, call the people who’s B/s advice you took, I know one thing they would of been the ones selling everything late last year. This downturn is not going to be over quickly most people on here have see times of corrections but this one will surpass them all by a long way.
@DTRH, you couldn’t be more wrong with your assumptions. Haven’t bought since 2018 in Auckland, and the purchase in 2018 has a very healthy profit. It’s really the first home buyers that have been caught with their pants down after digging into their KiwiSaver and stretching themselves buying in the past couple of years. You’d know that though :p Again, the people who comment on here can’t stand the truth; hence take pleasure in rejoicing in such times.
Can't stand the truth. I would say most people on here completely understand the economic environment. Plus you made many assumptions. On their financial literacy and investment profile. Most of you who care about property as the only game in town, and belittle people you have not met, all seem to do the same thing and say same thing. You all say property will go up, and people who do not invest in property don't work hard, can't afford property and are not intelligent. While simultaneously telling everyone how great you are. I find property the lowest hanging fruit, if it works great, but for me I just want it affordable for future generations at hopefully DTI of 3 to 1. Highly unlikely but the way the market is moving who knows, be interesting how highly leverage people will fare. I have popcorn anyway to wait and see.
@swapacrate - another classic in selective reading. No one ever made any assumptions or passed judgement towards me in these comments yeah. I never actually said other people don’t work hard, just spoke about my journey. So make what you will of it. But if you look deeper, you’ll understand the level of jealousy/hate/ talk poppy syndrome/whatever you want to call it towards investors. It’s so common in NZ. The amount of people with short term mentality and thinking who do nothing with their lives (not necessarily people on here, but more generally speaking) and want to see others fail is another shocker. So go ahead and grab your popcorn mate, might be a boring ride for you (again). Oh yeah - I guess the Sydney, Melbourne and other worldwide markets are also going to “crash” tomorrow. Basically the world ends tomorrow mate.
The stupidity of debt bloat clearly still exceeds the buyers appetite. Nats have campaigned on turning around ponzi debt protection. Thats why most will not vote for them.
By the time election comes the economy wioll be munted..... out go Labour , anyone else will do.
If you are a long term observer of comments but not reading any of the articles on this site, I'm sorry but you have not spent your time wisely.
The "slowdown" is not due to "elections" or the "gubernment". If you think that then you should actually spend more time studying finance and the markets.
Yes the interest rates are not high at the moment but they were sub 2% at one more last year? When banks are testing 8+% what do you think it does to the demand? In terms of pure borrowing power the demand has evaporated.
There might not be 50% drops but 30% is not out of the question.
Agreed. Its is simple math. Free money = supply shortage = higher prices/demand. Expensive money = demand shortage = lower prices/demand.
Just in the difference of carded mortgage rates alone we're down roughly 30% in borrowing power in 12 months.
- $800k @ 2.5% on a 30 year loan term = $720 per week
- $580k @ 5.0% on a 30 year loan term = $718 per week.
That's interesting.
It’s all cyclical mate, population growth will cause an increase in demand eventually. This is a well overdue correction after a crazy few years of growth, most fellow investors I know off understand it’s just a matter of holding on as with every correction. However, that might be a difficult for people who have recently bought or overleveraged. But employment is still strong. People on here get too caught up with just focusing on todays news, that’s the main issue.
@albinodog Ok smart guy. You sound highly educated - so if prices drop 30% do you realise that’s basically one and a bit years worth of gains wiped away? That’s a blip mate. Most investors like myself don’t even care as we don’t plan on selling and are up by a lot more than 30% aka 1 years worth of gains. “Shakes head”
How many properties do you own?
@independent_observer You’ve already asked this question on this post more than once and I’ve responded. But what’s it to you?
Its hard to have a rational view of something when one's mind is deluded by greed. So by establishing how much of something one owns, and whether they are long or short, you can tell where their bias falls.
You're all in on housing by the sound of it - so how is it possible for you to have a fair, balance and impartial view of what is unfolding? Especially if you have been brainwashed by the property investor association - which given the tone of your comments, it sounds like you're not thinking independently, but instead just repeating what has been preached to you by your property coach (or are you a property coach yourself?)
The used car salesman never tells you about how terrible the car is - but if they do, that is the salesman that you can trust.
@independent_observer brainwashed by greed LOL perhaps I should not have any intention of working and be on the benefit/ram raid my way to financial freedom. Then I shall be celebrated. Freakin tall poppy at its finest. Good ol’ NZ.
Unfortunately when this is all done and dusted the property investor association types will be looked upon with disdain - if not already.
And oddly those you try to insult, the beneficiaries and those at the bottom of society, are exactly the people the landlord class need to continue to oppress for their business model to be successful. Your success requires them to continue to remain poor because they are your tenants of your rental properties.
So you can insult your business customers if you wish (beneficiaries) - but its just not that professional. But then again, when has property investment in this country been a professional and ethical activity?
(and you really think people are envious of you? now that would require a big ego and perhaps a high degree of narcissism, but then again those are traits that I have found to be highly correlated with the property investor types - they honestly think they are superior to other people in society. And even stranger is that landlords are the biggest beneficiaries in the country when you look at the amount of monetary and fiscal policy in dollar terms that has been used to prop up their failing business model).
@independent_observer cry me a river mate. You keep waiting for this to be “done and dusted” I’ve never insulted anyone on here, the fact is I’ve worked hard and smart my whole life as an immigrant here, came with nothing and strived to be successful unlike others who choose to be on the benefit with no intention of working. Yes there is a good number of them. So yes, I am confident and proud of where I am today, nothing was handed to me, I went to a decile 2 school. I have fantastic relationships with my tenants, taken chances on people who were rejected by other landlords. It’s pretty obvious there is a lot of envious people on here but more so it’s tall poppy. This is very common in NZ. Like I said, to be celebrated today you have to be a ram raider or some other BS. You just have to read the comments by 90% of the people on here to know how badly they want people to fail. Enough said, there’s a reason you don’t find too many investors commenting on here. Also, there are people that never want to buy houses, we provide a roof over their heads. My success does not require anyone to remain poor, actually rented out a place to someone who was far better off than me. But nope, continue to look at us with disdain, there’s only one loser. Obviously caused a stir with a lot of you people today speaking some harsh truths that no one likes hear. I’ll let you get on with getting excited about the next headline tomorrow. Good luck.
Great post.
-30% is more than +30%
Oh dear, I hope you've owned property for a long time and not some recent specuvesting groupie.
Sadly all true Iceman, most house owners are pretty happy and don't bother to even read whats here, they are just getting on with life and paying off the mortgage. Its the same few on here having an envy rant and lets face it even if house prices dropped 50% they still wouldn't buy one. Usually a big stall of the market 6 to 8 months out from an election so its still a bit early for that yet but things will change very fast post election as we will have National and the summer months after that with Covid long gone and people will feel more upbeat. There is a limited window of time to get into the market now.
Certainly limited time Carlos, but that limited time is not a buyers problem.
No election is ever a foregone conclusion...
https://thedailyblog.co.nz/2022/09/06/new-roy-morgan-poll-labour-green-…
Exactly, there are lot of envious people on here, hence felt the need to say something. People can talk up the crash all they want, at the end of the day tenants are still paying off my mortgages and over the long term investing in property is widely considered to be the safest investment. I just love how people jump up and down trying to focus on the “crash” without looking at the long term picture. Small minded if you ask me.
Lol, "envious people"? Sorry, I don't envy people that are forced to sell their houses in this down trend market due to not being able to service their mortage in this high interest rate environment. I expect anyone with brain wouldn't do it too. ;)
@company of heroes, mate, most investors aren’t forced to sell, rents just get increases to cover the expenses. Also the investors that are selling currently are just getting rid of 1 or 2 properties (for profit) in their portfolios and paying down the debt of the others in their portfolios. It’s likely first home buyers who bought recently that will struggle with servicing. I do feel for them. Also high interest rates? Mates these rates are still low, we’ve had rentals since rates were 8% so this is low, doesn’t affect us negatively one bit.
Yes and tenants have a bottomless supply of funds to pay the rent the landlord requests. This is not the middle ages. The serfs have Jetstar now.
Then why you worry about market going up or down if you are aiming for long term investment and rental yield? The only things you should worry about is the rental market and cash flow. You were lucky to get your rental property when the price was low! But it's a different market now, especially for people who want to get into house investment now. The current housing price, interest rate and rental yield just don't justify that property rental investment is a good investment to me.
@company of heroes, mate I’m not sure whether you are getting the gist of my comments. We couldn’t care less what todays news is on property prices. It’s all noise.Tenants pay off the mortgage eventually and you can bet your bottom dollar on the property being worth a lot more once paid off than when it was bought. You may think now is not a good time to get into property investment, suit yourself. You try timing the bottom of any market - the golden rule is to buy if you’re in a position to buy and hold onto it for as long as possible. Anything in the middle is noise. Simple concept. Again, everyone in here is focusing on today and tomorrow.
Worked for me. People over complicate things you just buy a house as soon as you can it's that simple. Glad I never discovered this site until AFTER paying of the mortgage or else listening to some of the clowns on here might have got me into the shit.
@carlos67, correct - as per my original comments, you will never learn anything from people commenting on here.
Problem with this is, particularly for investment property, the playing field is not level so there will always be envy, unfairness and market issues. Banks treat people differently, bank of mum and dad, inheritance, historical wrong doings, bad luck etc.
Lets be real, people farming takes virtually no skill unless you came from nothing and gathered the entire deposit on your own through paid work, and/or built a place from ground up specifically for the purpose of renting it out....perhaps other scenarios.
Not to mention impact of policy settings..ahem population etc
@eschaton, takes no skill, luck - sure, if it’s easy enough then everyone should be able to do it right? Classic things and the amount of whinging makes me laugh.
Tenants pay off the mortgage eventually and you can bet your bottom dollar on the property being worth a lot more once paid off than when it was bought.
Those stupid tenants. How could they be so dumb?
They are so dumb that they are almost like a lower form of human. All they are useful for is farming, really. But the cream rises to the top, and all the smart people in society will become landlords one day too (if they work hard enough).
/sarc
@Fitzgerald, you’re all class mate talking about tenants like that. I was simply stating a fact that tenants do actually pay off mortgages, did you not get the memo? It’s just a fact. You should focus your energy on supermarkets and gas stations who commit more daylight robbery mate. When I moved to Nz and rented, I paid rent too, theoretically paying off someone’s mortgage. The houses then also didn’t have heaters or any standards for that matter. You didn’t hear my cry about it on a comments section. Great tall poppy from you, must have touched a nerve of yours too if you don’t like hearing facts.
So landlords are the poppies, right? The high achieving segment of society that other, lower, segments of society are jealous of?
@fitzgerald, you keep saying things I never actually say. Perhaps you just don’t do well with the truth or have some insecurities. I wish you the best. But please, don’t embarrass yourself any more.
Your comment encapsulates everything that's wrong with this country. For you to win, someone has to lose. I wonder who could be losing.
... and in the late in the news; another shooting and ram raid. Link the dots.
@inthecentre maybe we should just do everything for the love of it and for charity yeah. Free housing, free gas, free groceries, free tradies etc. Great solution. Here’s another unpopular fact - there’s no incentive for some people to work and there’s too many people who enter the county on a free pass and not on merit, you can connect those dots. Yes. Truth, too many are afraid to say it as it is.
High interest rate environment? You forgot the 1980's! We got a long way to go yet.
@fossil lover. Expecting rates to go to 20%, you don’t sound like a speculator :p
You do realise that it’s interest rates that largely determine house price trends? People can “feel” good all they want. If they can’t get the finance for the house they want then they can’t buy it.
Iceman can bleat on about a new government and immigration etc but while rates move back to “normal” then don’t expect house prices to suddenly rise up during that period.
The last big price increase mania was driven by interest rate cuts and credit availability, all at a time with no immigration.
A lot of people will wish they could get on with their lives with out having to worry about house prices like we do today. But unfortunately greed has caused everyone now to participate in Iceman’s “game” whether they want to or not.
@snow I’m def not expecting prices to rise suddenly post elections. I am expecting prices to rise over a 30 year period. I was just stating the fact that the market generally runs out of steam leading up to the elections. But again, I don’t care what happens in the next month or year, I’ll say it again - it’s a long term thing. People love to selectively read what they want.
You’d best hope so Iceman or else we’d end up like Japan. I think a large part of the problem, on this site particularly is that there’s been a marked shift over the last few years with more “investors” getting in to the market but their motivations are different than maybe yours. (Faux investors that do it to “provide a home for people” when really they’re speculating for the capital gains). This has soured the perspective towards genuine investors that aren’t worried about house prices over the long term. You probably fit under this category, but your demeanour on here no doubt makes it easy to lump you in with the specuvestor.
I’d like to see prices reduce markedly for the good of society not out of spite/envy. A price drop would hurt me more than help me.
Lol Iceman, I found your comment is funny and there are many contradictions in it.
You said:
"They’ve been wrong time and time again, you will literally learn nothing from reading these comments." You will also learn nothing from these comments saying, "house price will never come down, you'd be dreaming if you want to buy it low" "interest rate will never go up" "Get on the ladder now or you will never own a house".... Maybe they have been "right" for 6 or 7 years. But now reality proved they were completely wrong, these sorts of comments should be completely disregarded.
"The fact is - we are going through a correction as expected after an excellent period of growth. This is normal." Lol, it's obviously normal now as that reality had been kicked in. But it's not normal if this being said this two years ago. If anyone said this, that person would be labeled as "DGM" he would be accused that he has been wrong time and time again, others will literally learn nothing from his comments. Lol I am using some of your words here...
"The other fact being - no government will want to run the property market into the ground as it is such a big part of the economy here. Period. So if they do, they will be risking their own position too besides the negativity will flow through the rest of the economy." It's not fact, it's more of your assumption / opinion. Obviously, no one wants property market to crash, but not wanting something happen doesn't mean it will not happen. Governments can tighten / loosen immigrating settings, but they cannot control people moving, if they find the lifestyle here is not meeting their expectation, they will leave. Yeah, we can open our border and get as much immigration as we want, but can we keep them? Do we have enough capacities to keep them? I don't think so with our current condition of infrastructure and current high crime rates.
Same argument different cycles. Still entertaining.
Iceman - I didn't realise posters here had uploaded their property portfolios for you to view?
I fair swag of us here own property and are not anti-investor - but are anti the balls-up of a property market which has been heavily influenced by bankers and politicians - just look at their rental portfolios and consider the term 'conflict of interest'
A period of 'debt' fueled growth, with government deficits and bank lending (money creation) leading the charge. Immigration will not pick up, people cannot afford to live here nor want to come to a lockdown, mask obsessed country. I like your optimism, so reminiscent of the Americans in early 2006. Property is consumption and does not drive an economy, productivity does. Time for this mega bubble to correct.
Ding was left speechless two weeks ago after carrying out a rental appraisal for a client who told him he was paying $5800 a month in mortgage repayments through a second-tier lender for a modest property in Glenfield.
https://www.oneroof.co.nz/news/42158
These are the dummies that are going to get really burnt and have to sell for whatever...
Lol, OneRoof delivering some DGM news…
Ironic, given they have been lead spruikers of the mania…
I guess at some point they have to capitulate on talking up purchasers, and move to talking down the vendors for transactions/commissions to happen
Lowest sales volume for an August dating back to 2008, hmmm what was going on back then...
Theglc it was thegfc
ha
Is there any point getting commentary from Peter when all he can do is shamefully try and sprinkle glitter over a giant turd that is the current nz housing market?
Not really what I would deem breaking news as it is no surprise. A sudden trend back the other way would now be more like “Breaking News”.
https://www.stuff.co.nz/business/money/300679492/property-investors-tol…
Banks starting to ask questions of speculation. As prices go lower and lower, show be the Equity will become more frequent. Banks will see that speculators don't have enough, sell some houses to balance it out. Net step when you still don't have enough is to sell some more. Interestingly this is the reverse of the struggling FHB'er trying to get enough equity to buy their own home while speculators pushed prices higher and higher.
House price’s are down but this is just start of downturn over next year we will see far bigger falls 2016 price’s next stop. if this downturn continues average wage couples will able to purchase easily thats assuming they still have jobs. The bubble of everything is popping around the world and in NZ house prices is in a huge bubble.
Yes I also estimate prices to drop to about 2016 levels.
It will be interesting to see where the bid forms, in % off peaks, once forced sellors arrieve with $1 reserves..... I predict for solid entry level houses 30% off, for developement sites maybe 50% off peak. Sort of 2017 levels??? At the moment the lack of liquidity is probably masking the true clearance levels for FTBs, its likely once the first wave of desperate buyers have cleared the market will fall another 10% before the more canny buyers pounce, of course in real estate you only have to find one fool, so larger sets of statistical data is more important then the "one" house down the road stories , which are somewhat useless and could be outliers....
"At the moment the lack of liquidity is probably masking the true clearance levels for FTBs"
Sorry but this is an rather absurd proposition, at any given momeny there will be "some" constraints on liquidity available for property purchases (even with 0% policy rate the bank margins to the mortgage rate will make a mortgage unavailable to some FTB).
The clearance level with the current constraints on mortgage lending is as "true" as that a year ago. Different people will have different views on what they consider to be a clearance level they are happy with but just because the level at the moment isn't what they desire doesn't make it false.
liquidity
/lɪˈkwɪdɪti/
noun
FINANCE
-
the availability of liquid assets to a market or company.
"the banks closed, causing serious liquidity problems for smaller companies"
-
liquid assets; cash.
"a firm may be unable to pay unless it has spare liquidity"
-
a high volume of activity in a market.
-
Clearly not someone who works in Markets, let me simplify it, its a non functional market there are lots of sellors but no buyers at these price levels, true bids may be below but may move away from market action to make good on further falls... its like an FX market but in SLOW MOTION
You’ve probably seen this already but it’s a good recap I think, and for me, I reckon we got plenty of fall left in our housing market.
Financial Times Animation
I live in Northland and prices here are still stupid high, however we now have more than 5 houses to choose from and slowly prices are retreating. I don’t care if my CV halves, more the better, then maybe my kids can return and afford to buy here one day. 50 plus sections just approved up the road, asking $400k for 500sqm +/-. About 230k more than they need to be, or go back 7 years you’d be lucky to get 150k. Beside a nice 24hr timber mill though, what more could you ask!
I thought HouseWorks was saying stock levels were low?
If you know agents socially they say there are just no Buyers active right now....
Given that there are buyers in the market, the combination of low sales numbers and stable prices indicates that vendors believe prices are bottoming out," he said.
Low sales numbers = low numbers of vendors meeting market expectations. Nice attempt at spin though.
"stable prices" -> what, one month a trend makes? Prices are sticky going down - just wait till the next round of interest deductibility removal and those yet to re-fix find out how much it is going to cost.
Will be interesting to see if immigration picks up though, since we need excess tenants to push rents up to support increasing landlord costs... assuming we have the jobs for them.
Barfoot like to think that they are the market but they are one player with a falling market share
Meanwhile rental stock levels continue to decline fast. Leading sign of increased residential sales activity
So this data, lending data softening and 5 months of consecutive HPI data that emphatically demonstrates a real time decline is wrong. You’re seeing this as green shoots?
Ahem history deals with the past and not the future, I was referring to the current tally of rental listings. So really you are just trying to twist what I wrote
I love this from oneroof.
"When house prices reached a certain point, he also expected to see more investors return to the market on the assumption that a new Government would be elected next year and would reverse the interest deductibility rules."
For all you FHB's you know who to vote for if want to pay more for you first home.
Everybody who buys a house Join's into a market where price rises naturally over a ten year period.
When governments interfere they either ruin it for buyers or for sellers.
This government is cutting off the "home owner" hand that feeds it...
The last 10 years economic growth and prosperity was built from property values growing!
Kill that and the FHBs will be well and truly rooted!
Orr is just a puppet of Arderns and Robertsons socialist agenda manipulation.
Any person who defends or supports Arderns politics is guilty of " the common kiwis fiscal demise".
Most hard working kiwi's rely on thier property/ biggest asset gaining value for retirement, especially since successive Labour Govts have systematically removed every other means of investing for retirement... Except kiwi saver, ( and right now you'd wish your money was in a term deposit @4+% ) but give that another year or two and see where you are at!
And anybody who uses the "Covid excuse" for Arderns miss spending/management of billions of your $$$ on her Stalinist/ racist agenda has no thought for the countries or it's young people's future. (Debt, Taxes, Crime, health, education, . . .)
Bullshit.
There’s nothing remotely socialist about fuelling massive increases in inequality.
Labour are a very strange mix of centralists and neoliberals.
You say "There’s nothing remotely socialist about fuelling massive increases in inequality"
I say " that's the thing - they don't want to fuel inequality, but are so stupid , that they have.
Stalin would be proud if Ardern wasn't so stupid!
haha
You might have a point.
I'm with HM. Common cents, we have reached the point now that house prices are so out of kilter with incomes that we have priced out our own population. It's just delusional to defend that on any level.
Income are only out of kilter with house prices for the poorly educated, bludging, lazy few!.…. Yip these are the losers that Arderns Social welfare system has created.
This current mob of FHBs are lucky they aren't paying 28%interest on their mortgage!
Bloody whingers...
All Stalinda has done is devalue the house values and put the current FHBs in a negative " mortgages🔥sale" equity position... Nice one
Sarc?
If not, I retract my praise for you.
I think he's come off the meds too soon.
First bit yip. second bit nope
Landlords are the biggest bludgers out there.
Useless, lazy vampire squids. The whole concept of getting rich off your tenants work is just repulsive.
They are all about to lose a ton of money. Watch those house prices COLLAPSE!
Angry property investors ahoy!
Iceman has joined the angry and worried spruikers club here comprising Little Kev, HouseWorks and maybe one or two others.
What about me Fritz, HeadWinds2 ie doubled. Don't leave me off the list, though I wouldn't mind if you could re-phrase the first bit
Wow, up early!
I can smell the fear, HouseWorks.
And I can understand the denial. After all, like an adherent to a cult religion, you bought into the bullshit that prices could never fall significantly.
you need to follow the lead of reformed Spruiker Yvil, and see the errors of your ways!!!!
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.