Housing sales dipped in September suggesting a slow start to spring

Property / news

Do the latest REINZ sales figures show green shoots appearing or a market that's bouncing along the bottom?

12th Oct 23, 9:00am by Greg Ninness

The housing market made a lacklustre start to spring with sales numbers dipping slightly in September.

According to the Real Estate Institute of New Zealand (REINZ), 5439 residential properties were sold throughout Aotearoa in September, down 3.5% compared to August.

Around the country, sales declined between August and September in 10 regions : Auckland -5.2%, Waikato -6.1%, Bay of Plenty -1.8%, Gisborne -11.4%, Hawke's Bay -2.3%, Taranaki -0.7%, Wellington -1.0%, West Coast -25.6%, Canterbury -8.5% and Otago -4.9%.

Four regions went against the trend and posted higher sales in September than they did in August: Northland +19.3%, Manawatu/Whanganui +3.4%, Nelson/Marlborough/Tasman +10.4% and Southland +5.5%.

However September's sales were up 5.1% compared to September last year, although sales in September last year were extremely low.

Apart from September last year, sales in September this year were the lowest they have been for the month since 2011, suggesting the market remains extremely sluggish heading into spring.

Prices increased slightly with the national median price coming in at $785,000 in September, up 2.3% compared to August but down 3.1% compared to September last year.

The REINZ House Price Index, which adjusts for differences in the composition of sales each month, was up 0.7% compared to August and down 3.3% compared to September last year (see table below for the full HPI figures).

It is not uncommon for there to be talk of a spring surge or of green shoots appearing in the market at this time of year.

But they also say a picture tells a thousand words.

The graph below shows the REINZ's monthly sales figures from September 2020 to September 2023, with a trend line included.

Does this show green shoots, or perhaps a market that's bouncing along the bottom?

We'll let our readers make up their own minds on that one.

The comment stream on this story is now closed.

REINZ House Price Index - September 2023

Volumes sold - REINZ

Select chart tabs

Source: REINZ

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116 Comments

by Yvil | 12th Oct 23, 9:01am 1697054510

And... let the games begin... lol

by TronMVP | 12th Oct 23, 9:06am 1697054784

Cue multiple comments from DGMs

by Retired-Poppy | 12th Oct 23, 9:18am 1697055505

Cue the pointless comments - as above. They've been biting at the bit.

by tothepoint | 12th Oct 23, 1:45pm 1697071512

Let's see what happens late-October - post election.......

TTP

by Retired-Poppy | 12th Oct 23, 2:37pm 1697074667

You'll be teleported back to year 2021?

You'll surely be missed....😜

by Iceman | 12th Oct 23, 9:57am 1697057858

“10% by Christmas” “FHBs are better to wait till the downturn is over” “ long way to go before increases” “50% crash” “dead cat bounce” “higher for longer”

Dreams are free.

by Retired-Poppy | 12th Oct 23, 10:32am 1697059925

You missed out "Suckers Market"

Like I commented below, on an inflation adjusted basis, house prices are indeed still falling.

If you were around in the eighties you will know how times such as these move very much in favour of the saving FHB - (TD's are the tool of choice) Only a fully fledged Spruiker would try and spread a FOMO mentality.

T H E R E I S N O H U R R Y!

by 1689 Baptist | 12th Oct 23, 10:35am 1697060140

I've heard you mention real falls in house prices several times RP, and I am struggling to see the relevance. The real amount of my mortgage DECREASES with inflation. Same as your Term deposit. That is why most mortgaged homeowners only care about changes in house prices in nominal terms - because that's what matters. Inflation is a good thing for leveraged asset owners, even if the interest rates to counter it are not.

by nicko252 | 12th Oct 23, 6:27pm 1697088471

That isn't relevant to the deposit, and deposits become cheaper in real terms if the nominal price stays the same in a time of high price/wage inflation.

by Iceman | 12th Oct 23, 10:53am 1697061219

Alright boomer, don’t get too triggered by my comments.

by rastus1 | 12th Oct 23, 2:47pm 1697075232

Grow up.

by HouseMouse | 12th Oct 23, 10:37am 1697060236

I actually agree that there is some ridiculously exaggerated commentary on possible downsides to the market. And that’s coming from me, a very bearish commenter.

by TronMVP | 12th Oct 23, 8:40pm 1697096407

Black and White and Frank S are still going hard on the exaggerated commentary!

House Mouse, you are sounding very reasonable today. Good on ya!

by starrider | 12th Oct 23, 3:17pm 1697077027

The 2008 housing market downturn lasted for about 5 years.

Median home price NZ Oct 2007 $422k

Median home price NZ Jan 2013 $430k

This market crash has a few years to go yet. OCR likely to increase before xmas. Higher for longer.

by Frank Sobotka | 12th Oct 23, 7:52pm 1697093577

10% this year, guaranteed!

by Black and White | 12th Oct 23, 9:06am 1697054809

Fantastic long may it continue.

Wait for the big dip to start from Monday with unusable Government.

I am still sticking with my 20% down to go yet.

by Yvil | 12th Oct 23, 9:16am 1697055370

"Fantastic long may it continue"

What is fantastic and should continue BnW ?

by Antz | 12th Oct 23, 9:19am 1697055565

House prices reverting to fair value?

by Yvil | 12th Oct 23, 9:26am 1697056003

How can house prices "revert to fair value" when they're rising? Did you bother reading the article ?

"Prices increased slightly with the national median price coming in at $785,000 in September, up 2.3%" "The REINZ House Price Index was up 0.7% compared to August"

by Antz | 12th Oct 23, 9:23am 1697055804

Trend line of the graph in the article?

by General Comment | 12th Oct 23, 9:25am 1697055910

I believe that's the sales trend line, not the price trend. That one looks more like a rollercoaster.

by Antz | 12th Oct 23, 9:27am 1697056067

Correct, but take the trendline on prices and on sales volumes over the last two years (not the last two months). That, I think, is the point of the article. And of B&W's initial comment.

by Yvil | 12th Oct 23, 9:25am 1697055951

Antz, the graph is about the number of sales, not the price...

by Antz | 12th Oct 23, 9:28am 1697056116

Correct, but take the trendline on prices and on sales volumes over the last two years (not the last two months). That, I think, is the point of the article. And of B&W's initial comment.

by Yvil | 12th Oct 23, 10:03am 1697058180

I'm pretty sure that's not the point of the article but just your extrapolation of it. The article quite simply means what it says, no more, no less!

by Antz | 12th Oct 23, 9:32am 1697056377

And Yvil, your quote is selective quoting par excellence. A classic case of seeing only what you want to see??

The full quote is:

Prices increased slightly with the national median price coming in at $785,000 in September, up 2.3% compared to August but down 3.1% compared to September last year.

The REINZ House Price Index, which adjusts for differences in the composition of sales each month, was up 0.7% compared to August and down 3.3% compared to September last year (see table below for the full HPI figures).

Have highlighted the bits you selectively omitted.

by Yvil | 12th Oct 23, 9:36am 1697056619

Antz, the REINZ report is a monthly report, so we all know, well most of us do, what has happened the previous 11 months. What's new is what happened in the September month, that's why REINZ call it "REINZ Monthly Property Report - September 2023".

Here is a link if you'd like to read it for yourself: https://www.reinz.co.nz/libraryviewer?ResourceID=612

by Black and White | 12th Oct 23, 3:13pm 1697076804

Think and work it out Yvil.

by 1689 Baptist | 12th Oct 23, 10:39am 1697060352

Why would low sales volumes lead to a price drop? Ask any economics student, when the supply curve moves to the left, prices go up.

by chubby_peterson | 12th Oct 23, 11:24am 1697063093

Just asked an economics student. He's doing NCEA. He said low sales volumes = lack of demand. Which means prices go down. Down means less. Both in nominal and inflation adjusted terms. That means smaller numbers. Like 1 is less than 6. 6 less than 8. And 8 less than 9.

by 1689 Baptist | 12th Oct 23, 12:39pm 1697067569

ok no need to get facetious. Lets keep the conversation robust.

You believe that the drop in quantity sold is because of a drop in demand. I would argue that it is because of a drop in supply (listings). That is the thrust in this article. Our hypothetical economics student knows that when the supply decreases, prices increase. We are beginning to see this in the HPI over the last three months. Albeit it is negligible because demand is elastic in the short term. Ask your NCEA friend what that means ;). Peace.

by chubby_peterson | 12th Oct 23, 11:56am 1697064990

Facetious? Me? Never. Sarcastic? Me? Yes.

According to the most fervent of property speculators - Spring is the season to be jolly. When unsuspecting property wannabees take heed of 'green shoots' and offer up their hundred year old dilapidated villas slapsticked with a lick of paint and staged with rinky dink furniture from the latest Nood sale. And so supply goes up, as we emerge like property bears from the hibernation of winter - this time funding salmon of a different type - the salmon shaded shirts of slimy RE agents across the country, feverishly tapping up Chat GPT to come up with a new catch line for their latest TradeMe advert.

by 1689 Baptist | 12th Oct 23, 12:16pm 1697066167

And yet, even with the spring air in our nostrils, listings (supply) is down around the country.

by interesting1234 | 13th Oct 23, 9:44am 1697143443

Vendors waiting on the election to 'save' them so they can rent instead of selling. Just wait until they realise they had their expectations too high and should have sold earlier, that is when we'll see the listings come hard and fast.

by Sluggy | 12th Oct 23, 11:57am 1697065041

supply decreases, prices increase

Only if demand is static/rising.

by 1689 Baptist | 12th Oct 23, 12:50pm 1697068217

Agree. And I think it is. High immigration. high mortgage approval rates etc. The drop in quantity sold is because of a drop in listings (supply) rather than demand. I think this is going to continue for the next year or so with housing stock not increasing in line with immigration. Time will tell if I'm right or not. happy to admit if i get my predictions wrong.

by K.W. | 12th Oct 23, 12:46pm 1697067964

Supply has decreased BECAUSE demand has decreased. The majority of home buyers already own a home. When they decide they want a new house they sell the old one. So if they decide they dont want a new house (or rather the bank says no we wont give you a new mortgage) they are then neither a buyer or seller. Unlike most products, the supply of housing is tied to the demand for housing by vitue of the buyer also being a seller in the same market.

by Zwifter | 12th Oct 23, 1:16pm 1697069765

Its a drop in listings. A huge number of people are waiting for the election result, that should be pretty obvious. I'm expecting a huge up tick in listings post election regardless of the results as people have waited months. If Labour had won the election there would have been even more listings. DGM's will be jumping with joy thinking its yet another market crash because everyone is trying to sell.

by interesting1234 | 13th Oct 23, 9:45am 1697143531

Also many failed listings and the vendors have decided to rent instead off carrying the cost of the mortgage for an empty house trying to sell it.

by scooter_mcgavin | 12th Oct 23, 11:47am 1697064472

Chubbs - thank you, makes sense to me (I studied cambridge).

We can also consider the upcoming BVPC (boomer vacuum price crash) - a phenomena where boomers will stop giving handouts to other useless generations (and rightfully so!) - the instant cutting of the embilical cord will crash prices, sending Gen Zers and their rabble back to renting my one of my second homes.

-SMG.

by Chaosinflesh | 12th Oct 23, 11:40am 1697064032

low supply and low sales are not the same thing

by 1689 Baptist | 12th Oct 23, 11:42am 1697064155

Agree. However in this case, the low sales volume (quantity sold) is a direct result from the drop in listings (decrease in supply) - not because of a decrease in demand.

by Chaosinflesh | 12th Oct 23, 12:39pm 1697067546

oh really? seems there's been a significant decrease in realizable demand - it's no good saying there are X amount of people who want to buy a house, when interest rates etc. mean only Y amount of people can buy a house.

only demand that can actually pay for the goods matters.

by 1689 Baptist | 12th Oct 23, 12:45pm 1697067927

I totally agree that for demand to be real there needs to be willingness AND ability. What I am not seeing is any tangible evidence that demand has decreased. It is listings, or supply, that has visibly decreased since the beginning of the year. Hence my assertion that this is putting upwards pressure on prices. Happy to admit if I get this wrong.

by HouseMouse | 12th Oct 23, 1:18pm 1697069909

Good points from both of you.

One would think that realisable demand has decreased, due to rising interest rates, but perhaps the high levels of immigration have meant demand is roughly static. Hence, with falling supply, slightly higher prices.

While many of the recent immigrants won’t be able to afford to buy, even if 5-10% of them can then that is enough to have some impact (when the number of immigrants is so high)

by tronic | 12th Oct 23, 6:27pm 1697088432

Wouldn't a house's median days on market to sell give an indication if the slowdown is supply or demand driven.

by ikimpaul | 12th Oct 23, 9:13am 1697055235

A lot of stock came onto the market this week in Wellington - listings on trade me have been hovering around the 1800 mark for the last couple of months - suddenly shot up to 1920 listings on Wed.

by 1689 Baptist | 12th Oct 23, 10:57am 1697061452

I think that is just seasonal noise. Listings always increase in spring. The charts show that listings have been decreasing since the start of this year.

by Yvil | 12th Oct 23, 9:20am 1697055629

I actually wonder why the number of sales is talked about so much ? Sure, if you're a RE agent, it's most important as fewer sales mean less commission. But for mr & mrs average buyer and seller, it has little relevance. Also there is no clear evidence, that fewer or more sales lead to higher or lower prices.

by Nzdan | 12th Oct 23, 10:28am 1697059697

It may signal to prospective first home buyers currently sitting on the sidelines that the market is quiet and they may have a better chance of securing a home.

by Yvil | 12th Oct 23, 2:39pm 1697074740

What you're talking about is stock levels Dan, but that's not the same as sales volume, I think many people don't understand the difference. Sure more stock for sale = more choice = better chance to get a deal, but that's different from number of sales.

by ex socialist | 12th Oct 23, 10:32am 1697059921

I read something about prices being related to supply and demand.

by Yvil | 12th Oct 23, 2:19pm 1697073578

Of course it does XS, but I was clearly talking about the volume - price relationship. So put your thinking cap on, and write a proper argument which connects supply and demand to low sales and then low prices, and which cannot be turned around. (i.e. low volume could be because of less buyers, but it could also be because of less vendors, or it could be a combination of both).

by Yvil | 12th Oct 23, 2:23pm 1697073830

My thinking is that, in a downtrend, higher volumes lead to lower prices. I would interpret this as vendors not being able to hold on anymorre, which has not happened yet, but it could happen in the future.

by RickStrauss | 13th Oct 23, 1:28pm 1697156913

Perhaps the relevance of small numbers of sales is that little can be told from them, because such a small sample size can give wrong impressions one way or other.

by the Joneses | 12th Oct 23, 10:35am 1697060115

The number of properties sold in a housing market reflects market activity, supply and demand dynamics, and price trends. A higher number of sales indicates a strong, competitive market with potential price increases. It can also signify consumer confidence. However, it should be analyzed alongside other factors like prices, inventory, and economic conditions for a complete market assessment.

- ChatGPT

by 1689 Baptist | 12th Oct 23, 10:45am 1697060700

I think chat GPT is wrong here. An decrease in quantity sold only means a decrease in price if demand drops (the demand curve moves to the left). In the case of NZ it is a situation where supply is dropping, leading to a decrease in quantity sold and (if demand is inelastic), an INCREASE in price.

by the Joneses | 12th Oct 23, 2:37pm 1697074678

If you check the house price index chart vs the volumes sold chart the low sales volumes match up with the low periods of price growth pretty well.

by K.W. | 12th Oct 23, 1:03pm 1697069039

There is a saying in the stock and bond markets "all market crashes are liquidity events". Liquidity is required for an efficient market, because illiquidity creates an inefficient market where price distortions occur. In other words, a market should have a sufficient number of transactions so that all buyers/sellers can easily enter or exit the market without creating a price issue.

Anyone who has had the misfortune of trading on the NZX will understand the problem of illiquidity. Trying to get in or out of a stock on the NZX sets up huge price fluctuations.

by interesting1234 | 13th Oct 23, 10:10am 1697145052

Also there is no clear evidence, that fewer or more sales lead to higher or lower prices.

Would it not be reasonable to say that statistically the chances of having prices change [up or down] would be increased by means of volume, in that when one house sells at a higher or lower price than expected, this will influence prices in the same area etc therefore the higher the volume of sales, the more responsive the market in that area.

by Retired-Poppy | 12th Oct 23, 9:31am 1697056312

Like it or not, when adjusted for inflation, house prices are still falling.

by Dgm | 12th Oct 23, 9:44am 1697057069

Facts mate Facts..it's something people detest..

Let's not forget interest rates starting rising over the last month.. so that will show up in the next couple of months results

by 1689 Baptist | 12th Oct 23, 11:03am 1697061818

Like it or not, when adjusted for inflation, house prices are still falling

So is your term deposit...

by Retired-Poppy | 12th Oct 23, 11:49am 1697064579

I hope you're not telling hard saving FHB's this BS because this might well suggest you don't give a toss about the finances of the next generation of buyers and you're rallying against cash saving. Your mind seems way more pre-occupied about my TD's than it needs to be - it's not healthy. I'm already financially established.

Lets not teach the next generation of buyers to be fools.

by 1689 Baptist | 12th Oct 23, 12:01pm 1697065315

Hi RP, not trying to be argumentative or sell a generation up the creek. Wisdom in found in the counsel of many elders so I am offering my advice, as you are.

Depending on an aspiring homebuyer's situation, I would be more circumspect about recommending a term deposit as the way forward. The current rates are about 6.25% at best. Lets say 5% after tax. That is a real loss when adjusted with inflation. Also, they would need to take into account the $40k p.a. they would continue to lose in rent. This opportunity cost is often overlooked in the comment threads.

Owning rental properties is another debate entirely, but owning your own home as opposed to renting seems like a no brainer economically. I shifted from renting to living in my own place this year. In my case, the interest payments are about a 1/4 of what I was paying rent. that is only going to decrease each month as well.

by Retired-Poppy | 12th Oct 23, 12:22pm 1697066544

When an aspiring homeowner faces paying a net 8% in interest plus rates, insurance and maintenance costs, the bigger up front chunk of equity the first time buyer can obtain the better off they are.

This current FOMO is a race trumped up by fools with the sole purpose of drawing in more fools to keep a yesteryear dream alive. At the moment, its way cheaper to rent than own. At a net 8% PA, interest, that's a lot more dead money than temporary renting, the bank is your Landlord and you are merely a caretaker of the banks security.

by Retired-Poppy | 12th Oct 23, 12:21pm 1697066501

Renting vs Owning - BNZ chief economist estimates the average annual expense associated with buying the median NZ home currently exceeds the cost of renting by just over $38,000 a year"

https://www.interest.co.nz/personal-finance/124362/bnz-chief-economist-…

Even I didn't know it was that much!

by 1689 Baptist | 12th Oct 23, 12:33pm 1697067215

For me the sum of interest, rates, insurance, and general household maintenance is significantly less than the $40k in rent I was paying. Even when offsetting the interest i was earning by having my deposit sit in the bank. I am not sure how this BNZ economist came to his 38k figure. But I would encourage a prospective Homebuyer to do their own sums. They might not be the "average buyer" that he is referring to. I certainly don't fit his profile.

by Chaosinflesh | 12th Oct 23, 4:25pm 1697081104

If I, as a FTB, were to buy the house I currently rent, I'd be paying 190% (10% dep.) or 170% (20% dep.) of my rent on the mortgage alone, let alone rates, maintenance and insurances on top of that.

[edit: removed snarky comment, i've felt bad about it all day, so my apologies]

by 1689 Baptist | 12th Oct 23, 2:39pm 1697074795

Does that include principal repayments? As that is not an expense it should be counted. Even so though, it sounds like your situation is quite different from my own so I will withhold giving specific advice. I had a 40% deposit so that might account for the difference in the cashflow calc. Just purchased so not looking to sell thanks.

by Chaosinflesh | 12th Oct 23, 4:36pm 1697081807

Yes, that is including principal. Which could be argued as forced savings, but the budget doesn't see it that way.

I'd say our situations could be very different - we will only buy if it makes financial sense for us, as our long-term (almost medium now!) plan is to emigrate to give our kids access to better universities, should they wish - so we're prioritizing liquidity.

That's a good chunk of equity on your purchase, nicely done. Yes, if we had 40% deposit it'd be only a 20% increase over our current rent - but on the other hand, that would buy a property elsewhere outright, so we'd still be unlikely to purchase the house we rent, and the mortgage comparison would be with the rent on those houses, which still wouldn't add up. (We're fully aware our current rental is a lifestyle choice).

by agnostium | 12th Oct 23, 1:24pm 1697070251

House next door just sold for $1.6M, rented at $620 a week. Some real life figures from the last month.

by starrider | 12th Oct 23, 3:05pm 1697076357

Wow. The cost to own that house, with 20% down, is roughly per month $8,252 mortgage + $416 rates + $330 insurance + $330 maintenance. Total cost to own per month $9,328.00. ($111,936 annually).

The cost to rent per month $2,686.67. (32,240.04 annually). Once you factor in the interest income of $17,280, after tax, from the same deposit amount ($320k). The cost to rent is actually $14,960 per year.

Almost $100k per year that the renter can put towards a deposit.

by agnostium | 12th Oct 23, 4:11pm 1697080287

Just do it

by 1689 Baptist | 12th Oct 23, 6:58pm 1697090330

Yep. The numbers just don't stack up with a 20% deposit. My rough calculations tell me that the crossover point where buying is better than renting is about 45% deposit for this house. This of course assumes that there is no income potential with the house. If you work from home part of the mortgage is a tax writeoff, boarders at $300pw per room etc.

by agnostium | 13th Oct 23, 10:54am 1697147662

It's a two bed unit. Second bedroom is box room, can barely fit double bed. My partner has just corrected me, rent is $640. Apologies.

by makechange | 12th Oct 23, 1:54pm 1697072086

You bought well. In Auckland the interest payments for the same house still dwarf the rental payments in many areas, even with a 20% deposit

by tothepoint | 12th Oct 23, 2:12pm 1697073175

It's fallacious to think housing investment is limited to capital price movements......

Equally, if not more important for many investors, is the return on investment derived from rental income. When rental return is factored into an assessment (as it should be) houses stack up pretty damned well - as the record over many years/decades illustrates.

This largely explains why houses have become a preferred form of investment. (Term deposits aren't in the same league, especially after tax considerations are factored in.)

TTP

by IT GUY | 12th Oct 23, 7:48pm 1697093303

Total BS TTP, the numbers do not stack up at ALL at the moment, in fact current leveraged owners must be shitting bricks......

by interesting1234 | 13th Oct 23, 10:19am 1697145542

It stacks up for those that already own more than one house outright and hence can use the equity towards another. They already have sufficient equity to capitalise, and the rich get richer. Not all are leveraged to the gills, there;ll be plenty out there who got a couple pre-2020 at lower mortgages who won't be as impacted by interest rates and will be cranking the rents as far as the market can bare, then others with 2 or more houses owned outright and shifting the after-tax profit from that into paying other houses off, thus lowering the impact of interest rate increases. 2020 was only 3 years ago, people have been in property investment for a long time before this. Sadly it is more likely those that took on large mortgages at the peak, be it FHB or those trading up that will face the biggest strain.

by Zwifter | 12th Oct 23, 11:08am 1697062097

Wrong. It all depends only on your personal financial situation. If the price of food and everything else is going up and your pay is not increasing then the house prices are going up for you. Its pure math and you don't seem to get it. Hell I was totally useless at accounting, couldn't even get the numbers in the right column (and there were only two) at school but its simply income vs expenses or outgoings and the bank very quickly does the math for you even if you are stupid.

by Retired-Poppy | 12th Oct 23, 11:48am 1697064522

Zwifter, sorry to hear that your pay has not increased.....

by Zwifter | 12th Oct 23, 1:20pm 1697070014

Its increased through the roof, I'm like you I have a big TD. It went from paying 1% to paying 6% in 2 years. I got a 6 fold pay rise.

by Retired-Poppy | 12th Oct 23, 1:30pm 1697070638

I guess when you put it that way, you indeed got a six-fold rise :)

by Nzdan | 12th Oct 23, 1:19pm 1697069989

Median weekly and hourly pay increased by 7.1 and 6.6 per cent respectively in the year to the June 2023 quarter.

https://www.nzherald.co.nz/business/wage-growth-earnings-up-above-cost-…

by rastus1 | 12th Oct 23, 9:50am 1697057411

If you are buying or selling ignore the election and get on with it.

The outcome will make little difference, likely none.

by Yvil | 12th Oct 23, 10:01am 1697058119

"Just do it" This simple Nike slogan is gold, we too often fret and talk about things so much that we don't end up doing anything at all. "Just do it"

by agnostium | 12th Oct 23, 10:14am 1697058895

Just put your money in a term deposit rather than buy a house? Just do it?

by Iceman | 12th Oct 23, 11:59am 1697065149

The shittiest investment TDs. People forget that you pay tax on the return which ultimately is a very poor return.

by kwbrn | 12th Oct 23, 12:12pm 1697065951

TDs don't have council rates, need to be insured and maintained. Every ten to fifteen years need to be completely renovated.

by Iceman | 12th Oct 23, 1:11pm 1697069489

If you are small minded enough to think that TDs outperform property, good luck. But if I need to spell it out - TDs don’t return you 50-100% in 15 years too. TDs don’t give you leverage to borrow to invest in another property, business etc. Wake up.

facepalm.

by Zwifter | 12th Oct 23, 1:25pm 1697070340

While that is true once you have a mortgage free home that you live in and you are not trying to build an empire or are greedy, a TD is a great investment because its a regular return and it takes zero of your time to manage it and comes with very little risk so you can sleep at night and not even think about it. Once you are looking at 60, everything changes in your life and you stop thinking you are going to live forever so the priorities in your life flip upside down.

by 1689 Baptist | 12th Oct 23, 2:44pm 1697075062

"If you are not greedy, Term Deposits are a great investment." Zwifter, isn't that another way of saying they are a bad investment!?

by Retired-Poppy | 12th Oct 23, 3:06pm 1697076387

"it's wise for investors to be fearful when others are greedy and to be greedy only when others are fearful" - Warren Buffet

We've witnessed plenty of greed, hard saved money (Todays TD's) will go a lot further when the fear of others sets in.

Timely resets are a good thing. With fixed interest rollovers still in progress, we are only part way through the reset of peoples lofty expectations of house price appreciation over time.

by agnostium | 12th Oct 23, 1:26pm 1697070366

I'm not making an assessment on whether term deposits are a good investment just that the logo "just do it" could apply to any investment. Not sure why Yvil picks out housing?

by phalanax | 12th Oct 23, 10:48am 1697060917

The green shoots could be weeds .....Higher rates will sort them...lol . I understand the fierce and strong move to normalize the last few years high values but looking at some locations , can they stand.?

by DTRH | 12th Oct 23, 12:17pm 1697066223

Very slow for this time of the year and more supply coming, with rates staying around this level not many will be jumping into the market soon, price’s are still way above average wage couples affordability and a investor would be crazy to buy at this level.

by Chairman Moa | 12th Oct 23, 12:25pm 1697066757

House price in Gold Coat is having a massive jump, mass migration from Auckland, Tauranga and Wellington. There will be few basement bargains coming up.

by IT GUY | 12th Oct 23, 7:43pm 1697093022

Some truth in this

by stefanblaise | 12th Oct 23, 12:50pm 1697068256

I'll tell you what's wrong with it, my lad. It's dead, that's what's wrong with it.

by 1689 Baptist | 12th Oct 23, 3:01pm 1697076068

It's not dead its pinin for the fjords!

by riffraff | 12th Oct 23, 4:28pm 1697081287

It's just tired following a prolonged sqwark

by Mountie | 12th Oct 23, 1:27pm 1697070471

Just been watching the start of Eves Auctions today (live stream started at 1pm). Simply, cannot believe the ridiculous vendor bidding by the auctioneer and people are bidding against him...good grief.

by makechange | 12th Oct 23, 1:57pm 1697072277

In what situations would bidding against the vendor be a useful tactic?

by Zwifter | 12th Oct 23, 5:17pm 1697084267

Because that's what I did. Basically you have a "Value" in your head as to what you will pay and the vendor simply is moving it to the reserve price. If you want it and don't want to dick about and prepared to pay that then bid until its sold. I will be honest here however in that Trade Me property had a major flaw that's since been fixed so I actually knew the reserve price going into the auction. All the other buyers pulled out with $50K to go but I was prepared to pay the asking price.

by 1689 Baptist | 12th Oct 23, 7:16pm 1697091395

What a shocking glitch. I. Surprised there hasn't been legal action against TM or the agencies for allowing it to happen.

I went to an auction a few months back and the vendor only gave the reserve price verbally to the auctioneer 10min before the auction. I thought it was strange at the time. But having heard your story it sounds wise.

by makechange | 13th Oct 23, 9:25pm 1697185527

Thanks for explanation. So vendor bids in auction provide price certainty for seller and potentially exclusivity from the unconditional requirement for auctions for the bidder so they won't have to compete against conditional offers if the auction passes in.

Seems like quite a narrow set of circumstances for when this tactic would be sensible

by huttman | 12th Oct 23, 1:39pm 1697071157

what it says is that, the buyers have been pushed to their bottom line, and the buyers find it even harder to buy due to lending limitation. Other words, buyers f**ed, sellers f**ed too.

by Yvil | 12th Oct 23, 2:11pm 1697073083

I disagree, when the buyers can't buy no more and the sellers can't hold on anymore, prices drop hard. This may still happen in the future, but it's not happening now.

by huttman | 12th Oct 23, 2:16pm 1697073385

assumes people in a position must sell, and move to a cave after sold.

by Yvil | 12th Oct 23, 2:34pm 1697074450

or they could move to a cheaper house, which, if done on a large scale, leads to the potential price drops I talked about.

by HouseMouse | 12th Oct 23, 7:04pm 1697090656

Yvil, out of interest, would you consider to buy an investment property over the next few years? And what would lead you to doing so?

only 2-3 years ago you were a bit of a property spruiker, but you have become pretty bearish

by Yvil | 12th Oct 23, 8:13pm 1697094787

I wouldn't consider buying an IP now, it doesn't make sense cashflow wise, in a few years if things change and I can find a bargain I can add value to, maybe. Yes, I've become bearish about 2 years ago because interest rates started rising, supply started to catch up with demand, the brightline test was extended to 10 years, interest was no longer deductible from income for taxes, cost of renos went through the roof, healthy homes standards required more expenses... These are a lot of headwinds happening at the same time, enough to change my view from investing in propery is lucrative, to not being a good investment anymore. Cheers.

by HouseMouse | 12th Oct 23, 8:54pm 1697097245

Thanks, good response.

Interesting that there’s many who still see it as a good investment, right now

by IT GUY | 12th Oct 23, 7:41pm 1697092914

Oh Dear, How Sad, Never Mind......

by FHBtears | 13th Oct 23, 10:54am 1697147647

As a FHB I find all of these reports really difficult to get a read on, and often conflicting.

For example, whilst this piece on Interest ran, RNZ also posted this: https://www.rnz.co.nz/news/business/499973/house-prices-stabilising-increased-sales-in-september-reinz-says

What's the best/most trustworthy source that should be used in your opinion(s)?