Housing sales at 12 year low, REINZ median price down $115k in last 12 months

Property / news

Not a very merry Christmas for the real estate industry as sales sink to a 12 year low, prices tumble and inventory soars

13th Dec 22, 9:07am by Greg Ninness

The Real Estate Institute of New Zealand's latest figures paint a sorry picture of the state of the housing market, with sales numbers and selling prices both tumbling while inventory levels soar.

The REINZ recorded just 5525 residential sales in November, down 36% compared to November last year, and down 28% from the pre-Covid level in November 2019.

It was the lowest sales volumes for the month of November since 2010.

Prices were also well down, with the the REINZ's median price and House Price Index both declining in November.

The national median selling price dropped by another $10,000 in November to $810,000 (-1.2%) and is now down by $115,000 (-12.4%) since it peaked in November last year.

In Auckland the median selling price is down 18% from November last year, and in the rest of the country excluding Auckland it's down 7%.

Confirming the slide in prices the REINZ House Price Index, which takes into account changes in the mix of properties sold each month, declined 1.4% in November compared to October. It's now down 13.7% compared to the peak a year ago.

Against the background of low sales and falling prices, the number of homes on the market at the end of November was up a whopping 48% year-on-year.

Those figures mean it's no surprise that properties are taking longer to sell, with the median days to sell increasing by 12 days over the last 12 months to 41 days in November.

The interactive charts below show the monthly movements in the median prices, sales volumes and days to sell, in each region of the country.

"Buyers are again weighing up the likely impact on mortgage rates with current downward pressure on property prices," REINZ chief executive Jen Baird said.

"Those thinking of selling are again looking at the market and asking, is this the right time?"

The comment stream on this story is now closed.

Volumes sold - REINZ

Select chart tabs

Source: REINZ

Median price - REINZ

Select chart tabs

Source: REINZ

Days to sell - REINZ

Select chart tabs

Source: REINZ

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102 Comments

by Yvil | 13th Dec 22, 9:19am 1670876399

I hope you're impressed Nellbell ;-)

by titans1350 | 13th Dec 22, 9:41am 1670877693

haha kudos from me Yvil

by Nellbell | 13th Dec 22, 10:45am 1670881540

I am!

But now a little suspicious you are part of the RE industry - haha

by Yvil | 13th Dec 22, 11:12am 1670883165

I'm not working in the RE industry but I have been investing in commercial and residential RE for the last 25 years, this helps.

by IT GUY | 13th Dec 22, 9:28am 1670876881

Ouchy Ouch -18% in Auckland. But Lower Hutt at -24% is leading the race down.

So Auckland , medium price has fallen from $1,300,000 down to $1,065,000. -18.1% year-on-year. ($300 missing dollars must be rounding error or auctioneers not accepting $300 more....).

$235,000 per annum

$19,583 per month

$4,519 per week

$645 per day

$26.90 per hour

Average price in Auckland losing value faster then minimum wage could earn it, Not many work 24 hours a day or pay no tax...

by makechange | 13th Dec 22, 9:38am 1670877494

Ouch indeed. I know people in this position and the squeeze is on, with their banks' family home becoming a heavy burden on a young family for the mother to work multiple jobs with a 3 month old child.

I wonder when bankruptcy might be a better option?

by Miguel | 13th Dec 22, 1:12pm 1670890324

The big problem is that severe housing downturns take, on average, 6 years to play out. There is no guarantee this will be a severe housing correction, but If you look at where we are compared to other downturns, it looks increasingly likely prices have a lot further to fall.

https://imgur.com/a/OZ9ENSe 

by Slapheid | 13th Dec 22, 1:33pm 1670891587

Thankyou Miguel. I have been ganting for the latest update to this chart!

by 21Trillion | 13th Dec 22, 3:21pm 1670898089

Really handy graphic, thank you, where did you get it?

by OldSkoolEconomics | 13th Dec 22, 5:21pm 1670905315

And inflation is still raging in NZ. Employment still maxed - so interest rates have a way to go.

2023 is going to be a very tough time or some.

by Pragmatist | 13th Dec 22, 9:53am 1670878382

What are the rare and well done prices down by?

by IT GUY | 13th Dec 22, 10:05am 1670879118

The top quartile looses must be eye watering

by Whatwillhappen | 13th Dec 22, 10:19am 1670879956

The upper quartile (Queenstown springs to mind as the only area not to go down) is probably ok.

by DDDDebt | 13th Dec 22, 10:12am 1670879566

Nice summary IT Guy.

Are we another Ireland, Spain or every other country that has suffered a major house price 'correction/crash'?

Every month it looks more likely, as it now looks like buyers are starting to understand their risk.

When the levee breaks on the belief that house prices only go up, falls are always slow and steady in this way as vendors accept lower offers if they want to sell.

It's worth remembering, that Ireland halved their mortgage rates to try and stop the falls after one year of declines, and still they kept tumbling for another 3 years.

So you have to ask yourself when someone like Tony the Comb or Opes Partners makes precise predictions like 'there's only another 5% fall to come'... what's going to stop the falls Uncle Tony?

Where will the demand for risk/debt come from?

FHBs - It's far cheaper to rent, build a bigger nest egg with lower risk of capital loss or bankruptcy.

Residential investment doesn't stack up when you do the numbers. Prices are still to high.

Only owner occupiers will be in the market - and most unable to have bridging finance.

For what it's worth, I'm sticking with my original call that the market will capitulate sometime mid 2023 - meaning, mainstream media will except this is a crash and the coverage and blame game will really kick off. Just in time for some finger pointing towards an election.

I think we're at the end of the beginning, but I'm just a DGM'er that's lived through a few too many credit cycles.

by Nzdan | 13th Dec 22, 1:24pm 1670891043

The falls are far greater in our first 12 months than what Ireland saw, their prices fell 6% and 9% in Dublin for their first year.

I've read comments that we're not Ireland and that we're different. Factoring in the rate of our falls greatly exceed Ireland's, I wonder what is more likely:

The bottom is 30% - 40%
The bottom is 60% or more (like Ireland).

by Retired-Poppy | 13th Dec 22, 11:26am 1670884014

IT Guy, many thought the Housing ATM would never steal the money back!

Now that it is, times are once again tough and will get tougher still. Equity leaking away by the day.

by jimmyH | 13th Dec 22, 9:12am 1670875935

Thanks Greg. More good work,laying the bare Facts out in an informative and precise manner. Unfortunately,many uninformed fhb's will still make untimely buying decisions,and get financially slaughtered.

by Baywatch | 13th Dec 22, 9:16am 1670876208

Que mortgagee sales on the rise 2023. At least the banks will be ok... 😥

by Whatwillhappen | 13th Dec 22, 10:22am 1670880133

Cue. As in cueing a cassette tape.

by Baywatch | 13th Dec 22, 11:38am 1670884689

Rewind please?

by pigeonbox | 13th Dec 22, 11:52am 1670885536

No he's saying qué as in, ¡qué malo!

by bw | 13th Dec 22, 9:15am 1670876107

There's a disaster brewing here. One that was all so avoidable.

All we don't know is "Who is going to recipient?"

Current property owners or future ones?

I'm sure many of us saw John Key on TV this morning, and to me, that was a close as you can get to shouting a warning without scaring the horses.

by IT GUY | 13th Dec 22, 9:19am 1670876342

I missed that, cap you recap what he said?

by Baywatch | 13th Dec 22, 9:25am 1670876722

His take on inflation is due to Labour not opening up immigration..and so wages have gone up, causing inflation? He needs to get back on the golf course.

by Zen20 | 13th Dec 22, 9:34am 1670877242

Even his golf balls are golden!

by K.W. | 13th Dec 22, 10:03pm 1670922225

He may or may not be proven correct. Australia is definitely following the John Key modus operandi and have opened up to record levels of immigration. As a result, they currently do not have wage inflation like NZ has, and the RBA is forecasting a far lower terminal OCR than the RBNZ and a far slower pace of interest rate rises. If they pull it off, then Key (and Australia) will be proven right. If not, then they just get mad inflation, a crashing property market, a rental crisis, and reduced standard of living of citizens for nothing. Time will tell. If Key and Australia is right though, what happens to this country when everyone flees NZ for Australia?

by Chaosinflesh | 14th Dec 22, 6:40am 1670953256

They also have an astounding shortage of rentals, pushing rents up and keeping the [quote]vampire squid landlords[/quote] happy.

by bw | 13th Dec 22, 9:24am 1670876694

Roughly (or gently!) - Interest rates have further to rise. Property price have further to fall through 2023. ANZ is assessing new borrowers 'in the 8%'s, and 'things' are looking a bit fragile.

by kiwimm | 13th Dec 22, 9:49am 1670878165

Just tried ANZ's How Much Can I Borrow calculator and they will offer me a DTI of 5.9 and they calculate the payment based on 7.99%

Borrowing Calculator | How much can I borrow? | ANZ Store

by Slapheid | 13th Dec 22, 10:27am 1670880429

Yes, very similar result here. They are ‘offering’ me a DTI of 5.4, based on 20% deposit and a 30yr term (the algorithm doesn’t know I’m 51….)

The repayments at 7.99% represent 66% of my take home salary, which is obviously bonkers. I intend to purchase at a much more modest level in the next couple of years.....

by al123 | 13th Dec 22, 1:07pm 1670890062

That calculator is insane. I just plugged in my gross salary, and it told me I could afford a mortgage that would come to 56% of my gross pay, and leave me (an individual) slightly more than $300 a week net to cover all other costs aside from the mortgage. With that amount I could probably afford rates, insurance, food and power and basically nothing else.

by Carlos67 | 13th Dec 22, 1:29pm 1670891358

So not much has changed then ? Was the same for me in 2005, not a great paying job so just got in a flatmate paying $250 a week so that adds considerably to what you have left over each week.

by al123 | 13th Dec 22, 1:42pm 1670892127

You must have been living somewhere pretty flash to be charging a flatmate $250 in 2005! I was living in Central Wellington at the time and $150 got you a pretty nice room walking distance from town.

by Carlos67 | 13th Dec 22, 3:15pm 1670897715

Huge bedroom only 2 of us in the house and that's all inclusive, power, water, internet and you get your own bathroom. etc.

by HouseMouse | 13th Dec 22, 1:45pm 1670892314

I also got an absurd figure.

by MoaningMoa | 14th Dec 22, 2:03pm 1670979830

The Kiwibank calculator is a bit better, it at least asks a few more pertinent questions, like what are your outgoings, do you have student loans, etc.

by Nzdan | 13th Dec 22, 1:29pm 1670891357

And to think, 12 months ago they were stress testing at 5.8%. What complete and utter incompetence. Did they not know that interest rates can't stay low forever? Oh wait, apparently that's the borrowers problem and not the outfit actually conducting the stress test.

I wonder what the stress test rates would have actually been the interest rates on the loan documents were capped at the test rate? Maybe the banks would have been forced to lend a little less........Maybe interest rates would have been a little higher.

by Faivo | 14th Dec 22, 8:56am 1670961407

Just watched this interview on YouTube. Had to laugh at what John key thinks is "tragic". When he can't get a booking at a restaurant because they can't afford to pay staff enough to live. The fact you can't pay staff is tragic John. Not that you can't get your booking!

by Kohukohunui | 13th Dec 22, 9:25am 1670876735

When the figures aren't pretty, just lead with anecdotes:

REINZ October data: buyer interest increases, but not reflected in market activity

...

However, over the last couple of months, salespeople have observed an increase in enquiries and a noticeable increase in the number of first home buyers back in the market," Baird observes.

by King of the whiners | 13th Dec 22, 9:27am 1670876861

This is the key stat:

'Confirming the slide in prices the REINZ House Price Index, which takes into account changes in the mix of properties sold each month, declined 1.4% in November compared to October. It's now down 13.7% compared to the peak a year ago.'

With another year of falls looking nailed on we are looking at falls of 25-30% by this time next year. In anyone's language that's crash territory. A house rising 50% from $1million gets to $1.5m, but a $1.5m house only has to fall 33% to get back to a million.........in terms of absolute values it's faster on the way down......

by OldSkoolEconomics | 13th Dec 22, 5:23pm 1670905437

if we take nearly 8% annual inflation into the equation. The real fall is even higher than that.

by Toye | 13th Dec 22, 9:29am 1670876972

There is still time to become a bag holder, get in quick!

by Whatwillhappen | 13th Dec 22, 10:21am 1670880104

May the schadenfreude be with you, always.

by Adam B NZ | 13th Dec 22, 9:32am 1670877170

This party is just getting started, more downside to go. There are going to be a lot of opportunities on the horizon for cashed up investors and first home buyers. Patience will bring reward.

by Sluggy | 13th Dec 22, 12:59pm 1670889565

Is this what people actually think ? Why not try playing a different game, hopefully what we are about to experience brings a normality to owning a house, and makes housing as an investment as unattractive as shares were post the 87 crash.

by FCM | 13th Dec 22, 9:33am 1670877183

In outskirts of Canterbury and I am seeing a lot of new builds sitting on the market now, still priced at 1-1.2 million but looks like no one is buying. Presume the builder needs to sell for around the million mark to get anything out of it, but the amount of houses as they are completed, are getting more numerous. Can't see it getting better if rates continue rise next year and expectations from people are wait as they still need to drop 10-15% so why risk losing equity and buy later. Meanwhile the builders cashflow is drying up week by week.

by mfd | 13th Dec 22, 9:36am 1670877363

In my quiet street near the centre of Chch there have been three houses on ~1/4 acre sections bowled in the last month or two ready for townhouses to go in. I suspect the developers are not reading the tea leaves very well.

by K.W. | 13th Dec 22, 9:57pm 1670921850

The idea that a house on the outskirts of Christchurch was ever worth a million dollars is an example of how ridiculous the bubble got.

by mfd | 13th Dec 22, 9:33am 1670877198

Last month I wondered if we were seeing a change in trend of just a seasonal spring boost overlaid on a longer downward trend. Here's the answer I guess - no sign of hitting the bottom yet. You'd be brave to invest money at this point.

https://reinz.co.nz/Media/Default/Monthly%20Press%20Release%20Assets/Re…

by D581 | 13th Dec 22, 9:35am 1670877313

"The Real Estate Institute of New Zealand's latest figures paint a sorry picture of the state of the housing market"

Really? Come on. The language at play about housing in New Zealand is so ridiculously slanted to existing owners and investors who already have theirs.

The real sorry picture has been decades of skyrocketing prices and unaffordability for what previous generations took for granted - the security of a roof over their heads.

The whiplash of the market unwinding as quickly as it shot up post covid is not the ideal situation, but the miserly framing really contrasts with the glushing glee that was on display on the way up. I'd argue that run was even more devastating for your average FHB than the present situation (barring those that bought at the peak last year and will be about to refix onto some insane payments).

by Prickle | 13th Dec 22, 11:10am 1670883012

68pc of people in N Z own a house so there are a lot of people affect by this story state.

by sparrow | 13th Dec 22, 11:26am 1670884015

Not so ... 68% of people live in an owner occupied house, quite different.

by have no idea | 13th Dec 22, 1:01pm 1670889672

So if a landlord rents rooms to 4 other people but still lives in the house, or if a 30 year old still lives their parents house, that's considered, they all count towards the 68%

by Crazy Horse | 13th Dec 22, 9:49am 1670878155

Where are those wise and salient words from our good friend TTP to "calm the farm" in this particular time, with his infinite wisdom, coupled with his extensive experience in this industry ?

by kiwimm | 13th Dec 22, 9:58am 1670878709

Also waiting for HW2 to tell us that the falls are decreasing and increasing prices are just around the corner.

by IT GUY | 13th Dec 22, 10:35am 1670880936

Mirror mirror on the wall, did I bag the biggest bargains of them all?

by Retired-Poppy | 13th Dec 22, 10:54am 1670882042

Such "gallant" soldiers appear to be AWOL!

by kiwimm | 13th Dec 22, 3:08pm 1670897299

Perhaps they are on the phone to their agent desperately trying to sell while there is some equity left

by Waikatohome | 13th Dec 22, 9:58am 1670878715

Or Property guru Ashley Church. His incredible knowledge of the history of the NZ housing market not proving quite so useful now. Taleb was right all along, what a surprise.

by nguturoa | 13th Dec 22, 9:54am 1670878462

Just what i think..

The sales at 12 year low but the prices of housing are still at all time highs and in the unrealistic range where buying is just stupidity.

I don't see value in borrowing so much money that it will take more than a life time to pay it back. Alas we only get one life to live and hopefully enjoy it if have enough left up enjoy with.

Probably I am not thinking in too much negative territory.

by balance | 13th Dec 22, 10:01am 1670878878

Where is Ashley???

by IT GUY | 13th Dec 22, 10:19am 1670879965

Church?

by Crazy Horse | 13th Dec 22, 10:44am 1670881489

.....now are going to see the "reverse" of the madness that was the Auckland real estate market up to 2021 .....and the banks will still win.......even though the BIS is owed $65,000,000,000,000 (TRILLION) ....the money was never "real" in the first place .....it was created using fractional reserve banking ...... lending out money the banks never had.....an "illusion" .......it all "beer & skittles" going up .....but now, to all those that have "taken the bait" and borrowed to the max .....I will leave you to fill in the blank .......

by Averageman | 13th Dec 22, 10:57am 1670882240

Time to FOOP your pants.

by J.C. | 13th Dec 22, 11:34am 1670884495

it was created using fractional reserve banking

Actually, Werner rejects the idea of fractional reserve banking. His idea is that banks create credit out of nothing.

https://sovereignmoney.site/werner-typology-of-banking-theories 

by Crazy Horse | 13th Dec 22, 12:07pm 1670886450

J.C. ...I know for the big 4 Aussie banks, they have to have some "equity" on their books for the regulators ....but whether it's money just created by a push of a key or a bank term deposit of $100,000 used for 10 loans of $100,000 ....it all ends up in a clusterf*ck, no matter which way you "slice and dice".

Anyway, as George Carlin always said ....."It's A BIG Club & You Ain't In It!" ...and btw just watch SBF get off scot free - his connections are the "Club"

by J.C. | 13th Dec 22, 12:47pm 1670888859

but whether it's money just created by a push of a key or a bank term deposit of $100,000 used for 10 loans of $100,000

This is why I wonder if FTX and SBF is all a big experiment to see how the sheeple react. In many ways, there are many similarities with how the 'real' financial and monetary systems operate.

by Crazy Horse | 13th Dec 22, 4:51pm 1670903474

Yep J.C. I reckon we are in for some very interesting times ...and you may of heard SBF was arrested in the Bahamas, while his Law professor parents will not be teaching next semester - obviously they realize there is quite a court case coming up ......"understatement"

You may be right - they will take SBF to the cleaners, markets will drop further, debts won't be paid .....and then here comes the "great reset" whatever that may look like ??? with the much talked about CBDC's .....and sadly freedoms will be lost, with CBDC's able to be programmed where they are spent.

I believe in "less Government in business" and let the market only, be the price decider and not the Govt. or the banks (esp. with houses !)

Anyway, this is "back end" of all the craziness that was the great NZ PPP "Property Ponzi Party" ! ....while the only good thing to come out of this is that the sheeple will now realize the "true value" of money and it always, in some form, has to be paid back.

So are you in the "Ripple Army" or not ? :)

by kiwiana02 | 13th Dec 22, 2:41pm 1670895680

Not just Werner - Bank of England also lol

by Greg-Hamilton | 13th Dec 22, 11:18pm 1670926680

The sources of bank money include households putting money in savings and other deposits at banks, but also banks borrowing from large investors, like pension funds, on international “wholesale” money markets.

https://i.stuff.co.nz/business/money/130570693/why-dont-fixed-term-inte…

by have no idea | 13th Dec 22, 10:30am 1670880653

Imo property will take a while to rebound.

Mainly because of this mantra over the last several decades that NZ house prices "only go up". That has in part caused the feeding frenzy in the housing market.

When the general population realises its not in fact an impenetrable investment and they start seeing people losing their homes, it will have a lasting effect on how people view housing.

Of course it will still be an NZ dream to own your own house. But I doubt residential housing will hold investor confidence like it previously did for a while. Especially for small time investors. I think public sentiment will take a while to recover if too many people get burnt.

That's just my psychological take on it. But who knows.

by Dale Smith | 13th Dec 22, 3:54pm 1670900047

Until we get back to a more reasonable house price to median income multiple then we are in trouble. The trick will be to bring prices down enough, and incomes up enough to lower that multiple. And then when they are down, adjust the system so they only ever increase in line with general inflation, ie no speculative behaviour.

Just like when prices went up, there are winners and losers, then as the prices fall so there are others, and unfortunately, some people will get it both ways.

But there is no economy in the world that has ever engineered a soft fall to a lower sustainable median multiple.

The best analogy I can think of for the NZ economic system is an old Dunedin student flat, that is too far gone to renovate, but the yield is great from all the students crammed into it. But when the time is forced upon the landlord to do something, he will have to bulldoze it and build new (but only just meeting NZ code which is the worst house you can legally build). The yields have peaked and are starting to fall and the bulldozer is now on its way.

by bste108 | 13th Dec 22, 10:48am 1670881731

Even more interesting than these latest REINZ stats is Tony Alexander's survey of agents showing that these latest rounds of hikes is having a major impact on the ground in real-time. The next few months of data in from REINZ will show further significant falls and we could easily be looking at Auckland being down ~25% from the peak by March.

https://static1.squarespace.com/static/5ce1fd700bf20400017d3a30/t/638d5…;

by Averageman | 13th Dec 22, 10:55am 1670882142

The tower of stupidity constructed in the last ten years was underpinned by ever cheaper debt and mass immigration. The foundations have been removed. Money now costs...well real money with more to come, and immigration is net negative. The thing that makes me laugh the most is commercial sellers still expecting transactions based on 4-5% yield.

You can get a better return with your money in the bank and a lot less risk.

Jenga time...

by ACB | 13th Dec 22, 11:36am 1670884608

Don't assume we're net negative immigration for long. Heaps of people from much less desirable places in the world than NZ will arrive here if we make it easy enough for them, which sounds like we are.

by Advisor | 13th Dec 22, 12:09pm 1670886599

Very aptly put. The government having to continually loosen migration policy after 2 years of planning is likely due to limited interest out there among genuinely skilled workers to move here.

Some of the most talented individuals I have worked with are from overseas, but the system favours economic refugees who can serve as labour feedstock in our farms and kitchens.

And it was not a case of “a few bad apples” but it was systemic: RSE workers being treated ‘like slaves’, Equal Employment Opportunity Commissioner says | Stuff.co.nz

by Inthecentre | 13th Dec 22, 1:30pm 1670891422

Yip, the floodgates are well open now.

Back to the old Student work visa scams and the like.

by K.W. | 13th Dec 22, 10:20pm 1670923249

Normally I would agree. But it appears that just about every Western nation is having a labour market crisis at the moment. So the question becomes "why move to NZ when I can move to Canada, Australia, UK, or USA?" What do we have to offer to people thats better than the alternative destination? Our wages are lower, our weather is worse, we are at the bottom of the world, our cost of living is sky high, and its now a racially divided country (and immigrants get lumped in with the colonialists in terms of access to education/healthcare/welfare etc).

Australia has thrown open the immigration gates, and it appears people are flocking there in droves. The number of international students enrolled is at a record high. The govt has processed 3.4M visas, with a promise to tackle the last 1M of visas sitting in the queue. They are prioritising the processing of Kiwi's pathway to residency visas. Rental vacancies there are 1%, rents are up 10% YoY and there is little wage inflation so the RBA is slowing down rate rises and lowering their terminal OCR forecasts.

If NZ can't compete on immigration and we keep losing people to Australia, our labour market remains tight, wage inflation goes through the roof, interest rate rises keep coming, the property market keeps crashing, and more people move to Australia ... and the cycle repeats.

by Advisor | 13th Dec 22, 11:52am 1670885520

Yes. New migrants on temporary visas aren't allowed to buy a house in NZ until they secure residence likely in a year or two. You'd also hope those on the green list eligible for residence are smart enough to comprehend the situation and not catch a falling knife.

Adding class-5 drivers and nurses to the green list might be a good move to ease labour pressures in critical industries, but these workers don't earn enough to service large borrowings on [still] overpriced houses at high interest rates.

by Simon | 13th Dec 22, 11:54am 1670885690

Wonder what they are down in Auckland in terms of a basket of food. 30% plus?

Money losing value almost as fast as real estate.

Where does one store there wealth?

Open the immigration tap solves all the problems and lose the current arrogant Labour party who continually think in small isolated idealistic terms due to none having actually lived or worked in the real economy

by Fitzgerald | 13th Dec 22, 12:41pm 1670888514

Physical gold

by ex agent | 13th Dec 22, 12:09pm 1670886560

Just imagine what’s going to happen to house sales and prices when the OCR goes up 50/75 points in February. It has to get tougher to borrow so prices will have to continue to drop accordingly.

by starrider | 13th Dec 22, 12:13pm 1670886805

Housing bubble crash - TTP current status update:

1. Rising prices

2. FOMO

3. Euphoria

4. Denial

5. Disbelief

6. Panic

7. Bust

by Retired-Poppy | 13th Dec 22, 12:46pm 1670888786

There are not many comments one can repost month after month. This is quite the exception ✔️

Just when your indicator is heading south from the panic state, its time to buy😊

by IT GUY | 13th Dec 22, 12:51pm 1670889101

Assuming everyone goes on holiday, or staycation, until the end of January. Things now pause in number 5. Disbelief.

Whats the trigger to move to the Panic stage?

Individual rate resets on mortgages in the New Year?

Developers going into Liquidation over the next month?

Property in Vauxhall Road (cv 5.25mil) , Cheltenham Beach up tomorrow, its undergoing a renovation, its GUTTED IE you are buying a weatherproof shell, looks like someone may have run out of Moola, stunning views cannot be built out, be a very good test of the market as it looks to me like it may have to sell.

by estateagent | 13th Dec 22, 12:46pm 1670888799

Auckland City area down 22.7% compared with a year ago!

by ex socialist | 13th Dec 22, 2:43pm 1670895834

What is interesting about Auckand is that there is only now starting to show the decline. People comment on Wellington's fall but in fact Wellingtonian's accepted the declines and did deals at lower rates - so the stock of housing is 13 weeks of inventory - while in Auckland the actual declines weren't evident as people didn't sell which is why there is 28 weeks of inventory - and building.

by IT GUY | 13th Dec 22, 4:10pm 1670901048

Good point, thats going to show up in Feb/Mar/April.

Aucklanders get paid basically the same as Wellingtonians, while its arguable why Auckland is clearly a nicer place to live, our houses have way Higher prices thus worse DTI optics. Could this difference contract we could see real movement in AKL.

Comment partially deleted. Watch your spelling of Annus Horribilis if you intend to use the phrase. - GN

by ex socialist | 13th Dec 22, 10:09pm 1670922564

Actually Wellingtonian's get paid more. Auckland wages are low because a lot of industry is there that doesn't belong there. This is a function of the accommodation supplement.

by K.W. | 13th Dec 22, 10:28pm 1670923726

Wellingtonians get paid more because most of them work for Govt, either directly as civil servants or more likely as govt consultants, and Labour has an unlimited budget when it comes to funding working committees of consultants. Wellington house prices might be crashing faster as those consultants read the writing on the wall and start looking for new jobs in 2023 and downsizing their expenses.

by Carinaz | 13th Dec 22, 3:36pm 1670899003

Prices decline is clearly visible and is on path for meaningful correction (Correction is 20% Plus fall).

FHB, if like a house can opt, if available near around 30% down from peak or near pre pandemic value as many vendors will not sell but FHB only need one genuine vendor who has to sell.

1.2 Million house going for near around $900ks and in future may fall further but if get at a discount and like the house, why not.

A colleague recently bought a house that failed in Auction. After failed auction were encouraging any offer over 1.1 Million (Before Auction were looking over 1.150 Million Plus as similar houses had sold last year for 1.2 Milllion plus). Than early this month was changed from negotiation above 1.1 Million to asking 1.019Million and finally sold for $950K. In future similar house could go for $900k or in $800ks (in 2023) but this colleague was happy to get at pre pandemic level and move on as was comfortable.

by Wrong John | 13th Dec 22, 3:37pm 1670899061

At this rate we might be able to afford to go back & live in Auckland - this time next year.

by Wiseguy | 13th Dec 22, 5:05pm 1670904358

Property prices drop 50% as inflation and recession take full swing

by Squishy | 13th Dec 22, 5:12pm 1670904743

Clearly the reverse wealth effect isn't occuring fast enough yet to really slow consumer spending. Until it does rates are virtually a one way bet.

by Chairman Moa | 13th Dec 22, 6:34pm 1670909657

For those wanting to move across the ditch. This is Tasmania, Launceston.

https://www.realestate.com.au/property-house-tas-west+launceston-141083840?sourcePage=rea:p4ep:property-details&sourceElement=avm-currently-advertised-view-listing

In 2020 and 2021, Tasmania was the darling of all property investors, it captured the highest capital gain in Australia and highest rental yield. But this year, it's slowing down quite a bit!

by beau | 14th Dec 22, 9:38am 1670963929

Nice 'brick' home. On face value alone, that is totally reasonable, and am sure many here would like to see the NZ market in a similar situation.

by mikekirk29 | 14th Dec 22, 1:00am 1670932809

Auckland drop about half of what it will be in total.

I said on here in 2021 that market will drop 35% top to bottom. Consensus was about 10-15%.

by Caughtinthemiddle | 14th Dec 22, 9:54am 1670964853

I need to buy a modest residential property in Auckland City for work as I live in the Waikato. I have been waiting patiently and studying the data. In the city HPI data shows a 20.9% drop from peak. I think it will decline another 10-15% (opinion only). At the current rate of decline that will take 5-7 months so I see this happening in June / July next year. The election will begin to alter behaviour at about that time too. If National / Act look likely then the market may start to anticipate some sympathetic legislation change and this will also help to level out the decline. My 2c of guesswork.

by ChrisOfNoFame | 14th Dec 22, 11:02am 1670968977

Anyone else notice Auckland's house price growth flatlined between 2016 and the start of COVID? Didn't happen in other places. The reason? Methinks the Auckland Unitary Plan of 2016 facilitated the building of many more dwellings on existing land.

The relevance today is that central government forced all other Councils to implement one of Auckland's more dense zones - Mixed Housing Urban - throughout the entire country via the MDRS. And add to that the NPS/UD forces all major city Councils to implement 6+ stories in metro zones and walkable catchments.

That's a massive potential supply of "new" land for dwellings.

Methinks those who believe there will be a return to house price growth once interest rates come down a bit will be sadly mistaken. A rough running of the numbers suggests house price growth (capital gains) will be insignificant for 10-20 at least and perhaps even longer.

Funny thing tho ... You don't hear banks, nor property perma-bulls, even mention this fact. Be careful out there people.

by yeahnah | 14th Dec 22, 5:38pm 1670992735

A change of government that will open the immigration floodgates and bring back negative gearing on residential housing will change that graph.

There's a lot of people emigrating due to the cost of living, crime rate, forced acculturation and racial division too. Fix that lot and we have a chance to maintain our first world status.

by Happy Cynic | 15th Dec 22, 1:45pm 1671065100

Quite sad that there are people that think a change of government will change NZs inexorable slide. NZs issues didn't just appear in the last few years, they have been 30 + years in the making. Most of NZs social issues can be blamed on housing and how out of control Natbour let things get.

Housing will still be too expensive relative to incomes this time next year - my advice for anyone, especially the young - leave. NZ is a beautiful country but a pretty average place to live.

I think NZ will be in a much worse position socially and economically in 5 years than it is today. Can't see any governments making the difficult decisions that need to be made.

This property market collapse could be the best hope NZ has got for getting its economy on track - but I think central government are probably too small minded to get it and will provide some sort of welfare to prop the market up.

by yeahnah | 15th Dec 22, 2:02pm 1671066158

Didn't say it would make NZ better. But a change of govt policies will support house prices.