Vendors with unsold properties will face some difficult decisions heading into winter

Agents seem to love these multi offer situations, whether real or imaginary. 

You think?

Exactly. Many will be itching to jump post 01-July for sure. Knowing this is a possibility, another cohort unaffected by Brightline will be listing to exit ahead of 01-July flood. Animal instincts on the ride down applies. 

Corelogic results show the overall house value has grown by 0.6% in NZ over the last 3 months. If this is Armageddon I'll take it.

I question his theory on 2.5% being the threshold for over supply/ under supply. The he has shows the vacancy rates bouncing between 2.3 and 2.8%. Surely such a small movement is statistically insignificant?

It’s good work, and I agree Auckland is a little oversupplied. A good thing!! It’s oversupplied because of all the new townhouses being finished, en masse. Despite high population growth.

It will be interesting in a year or two once supply has ground to halt. Yet, population growth will slow, perhaps significantly, which could minimise the degree of under supply.

Not yet.  Legislation to be put forward this month, with it coming into effect early 2025.  Only thing that has changed so far is the tax treatment (rules around interest deductibility from 1 April and the Brightline roll back from 1 July).

Zwifter, the news media have also reported on skyrocketing insurance, rates and resetting mortgage interest rates too and it's still cheaper to rent! Going forward, as jobless migrants head back home, less will come combining with native talent still heading to Australia. This will likely place downward pressure on rent prices in the near term.

Weren't you one of those on here pushing rampant inward migration as the primary catalyst in support of rising house prices? As predicted, nothing happened. Backward focused assumptions that migrants always bring with them untold wealth is foolish.  

Steps to prosper:

1. Kick tenants out in order to sell.
2. List for 6mo, can't sell, pull the listing.
3. Put house on rental market, can't rent, pull the listing.
4. Bulldoze and make bank.

This has been the message for at least a decade - so we have chosen harder.

Just saw a very nice house on a 700sqm section in a decent area drop their price by 9%. Been sitting on TradeMe a month or two already.

The once flowing tap of greater fools has slowed to a drip.

Case in point - https://www.realestate.co.nz/42396105/residential/sale/1209-puketitiri-…

This house is owned by the manager of a local real estate firm. Originally wanted $1.7m (dreaming) Now priced at $1.57m. Been on the market 8 months now. They scoffed at a cash offer from someone I know of $1.4m when first listed.

They purchased for $565k in 2010 and made no changes to this 1960s house. Yet they expect 3x what they paid. Market value is likely to be somewhere between $1.3m and $1.45m. The longer they wait the lower the price. Comparable $1.5m listings are far superior to this one.

Interesting to hear and see the gross yield clearance rate ticking up slowly, but still no party for anyone with high leverage and 6-7%+ loans such as fhbs

You're probably right. I can remember plenty of people asking for ~2% yield but couldnt remember seeing much actually selling at 2% in my area (not that I obsessed over that kind info), so wrote 3% to safe.

I invited someone with better records or access to stats to make a more informed comment.

Regardless, the takeaway is that yield in our area has risen mostly through land price drops rather than hefty rent increases

Not in the near term, that's my point. Yields are slowly aligning closer to interest rates, with a corresponding drop in land value. 

Last time I did the numbers for an environment of falling interest rates, gross yield followed interest rate changes with a lag of 12-16 months, and a discount of 1.4-1.8%. This had good correlation for the 10 years I looked at to December 2021.

now that we're in a rise-and-hold interest rates environment, the discount numbers are similar but the lag has been longer to reach those.

Interesting to see how the dynamics from factors other than interest rates are and will play out. Will vendors be willing and able to hold on, meet the market or join the rental market and top up a few hundred every week to keep their 'investment'?

Yep. Greed and expectation of tax free is a strong driver.

Hard agree. I can tell you that my similar situation with a 350K mortgage is already very testing. I almost never eat out and rarely eat meat at home (wife veggie). I cycle to work three times a week and I subscribe to just one streaming service. No gym membership and I can't recall the last item of new clothing I bought. My luxury is a $22 six pack each week and sometimes I forego it. Only one child has full time care. Sometimes I save a couple of hundred bucks, sometimes I can't. Tough out there.

Recovering house prices - lowering them to a point where society can function, and social cohesion exists. I like it.