House prices falling as vendors bite the bullet and meet the market heading into winter

Oh I was close for NZ, 1.3% down versus my 1.2%. But Auckland not as weak as I expected.

Regional NZ very weak

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Starting to resemble a Briscoes sale. 

Looks like those predictions of 10% down by Christmas for Auckland are looking increasingly likely..

Oh dear.

Prices holding up suprisingly well in the face of the RBNZ crushing NZ. Rate cuts will send prices firmly upwards again from the end of the year. 

Amazing how many people are completely unaware that prices are dropping. Once it becomes the msm narrative the buyers will evaporate.

Long way down yet.

The stupidity of covid is being unwound.

Harder & Higher for Longer baby.👶

Stagflation next stop.✋

What's the Luxy to do to help out the poor land lords..any ideas welcome.

for people who wished house prices drops, here is your time to celebrate. enjoy!

"The seasonally adjusted figure is an important indicator of the underlying market trends," REINZ Chief Executive Jen Baird said.

"With a continued flow of new options coming to market adding to a large level of stock, this does provide a lot of choice for buyers and a sense they can take their time to make decisions," she said.

The fact that REINZ need buyers to make a rushed decision like they are buying a toaster as opposed to their largest asset says a lot.

The fact buyers have more time to make considered decisions at the moment should be the norm and celebrated. If it means buyers are making considered sensible decisions for themselves long term. That has ultimately got to be good for them and for the country.

Of course the vested interests will always be pushing to keep the market in a state of an artificial supply crunch.

So if my house was 800K, now it's 770K 

Hahahaha...

Once the rate start going down, after the winter, I'll ask for 850K or even 870K and sell for 830K 

So much reporting on house prices, as if it's part of a thriving economy!

You non-starters are hilarious jizzing your panties over NZ HPI down 1% on the month. 

Auckland City median price up 18.5% year on year and 2.3% month on month!

As it stands, there appears to be a belief that falling interest rates will save the housing market (without exception) and that when this happens, prices will be on the rise. While I agree with this over the long term (ie over periods of decades) I don’t agree with it in the short term.

As I witnessed in the US during the GFC, falling rates were correlated with even faster price falls in housing. Once price falls become embedded in the psychology of society, it can take years to turn the sinking ship around. Falling rates are also linked to deflationary forces and rising unemployment - neither of which a positive contributors to asset price increases. 

 

My guess (a guess like everyone else’s opinion) is that we are more likely to see further price falls as the OCR is dropped, as we are to see either flat or rising house prices. 2020 during covid was an exception given that the government kept everyone in employment/bailed everyone out - but that isn’t possible at every recession - if that is done, then we don’t live in a capitalist society/economy - we may as well live under communist rule where the government chooses who (what businesses) lives and who dies and not the free market. If this is true, the price of housing will be irrelevant as the state controls the prices and will dictate who lives where and what you own. This isn’t a future I would like to see. 

To be fair many on this thread wanted house prices to drop and to be more affordable to FHB so they did not need to be so chained to debt that could strangle them when unexpected life events happen.

A slow drop is preferable to a very sudden large one so articles showing small decreases of 1-5% (often considered the levels of sampling errors), are actually to be celebrated. As they are around the level of sampling errors we cannot be sure the moves are significant or for the suitable kinds of properties for FHB families (e.g. a bunch of 1 bedroom apartments in the city dropping like a stone or mansions having high variation in sales prices are not unheard of compared to affordable housing suitable for families).

Ideally the more stringent tests on DTI will help prevent some of the worst investments.

But more market drops please. The country as a whole needs it as even with 3 incomes NZ housing is unaffordable.

.

I believe the worst is yet to come, we purchased a house in Hamilton in April 2022, and have recently listed it for sale as we are moving to another town for work, so far we have dropped the price roughly 10% from what we paid for it and there are only barely a few nibbles. Watch this space I reckon.

A big bounce in Rodney district this month against the flow (up 3.2%). Does any one have a hypothesis for why?

House prices up 2.3% over 1 year... I'm confused why DGM are getting so excited? 

I’m trying to better understand Rodney performance for the month and quarter and year. Why is sitting as an outlier from the crowd. Is it just as simple as people want to live in Rodney and will pay for the privilege, mix of sales probably screwed towards new houses or what. Any insight?

This market is total nonsense for buyers, as I am.

Deadline sales actually linger several weeks past the due date, due to lack of offers, or single offers. Agents try to push me making offers only hours before the deadline, like you could make such a big decision in such short time... But I don't rush and magically the dealine doesn't matter at all anymore.

Negotiations? I threw a few offers I deemed realistic based on the REINZ figures, most often I'm the only potential buyer, still it's impossible to get anywhere with sellers, they want to meet 80% their way. Of all those properties over the last 3 months, only 1 sold (my back up offer was 30K more than what is actually sold for, but I was conditional of course), others have been either withdrawn or put for rent (at stratospheric prices, probably to fully cover the mortgage if sellers have bought an other property).

Advertised prices? Well, at or above end of 2021 CV...

FYI - My watch list in Dunedin properties today has multiple asking price drops of 5-10% of current market value. This is a daily occurrence now. Houses on watch list is growing longer - not much selling. If these properties sell, at these reduce listed prices, then the next 3 months days of HPI could be more than the last 3 month 3.8% drop. 

"Recognizing downturns and being brave with purchasing is key to not buying in euphoria and having your financials stacked against you"

https://www.wwfp.net/resources/the-economic-comparison-of-owning-or-ren…

When in situations where owning is dearer than renting and house prices are steadily falling, for now, the sun is beginning to shine for euphoria averse saver. I think the above is excellent advice! 

154 comments already. Some commentators joyful, some in denial as always. One thing is for sure. Prices are going to drop for some time yet. Too much weight from listings increasing. Gravity is hard to overcome. Buyers need to buy very very well as they are clutching a falling knife.

This worries me .Pressure is on to reverse the foreign buyer ban , i can see the govt caving

https://www.oneroof.co.nz/news/million-dollar-agents-urge-rethink-of-fo…

Can we all finally agree that the market is crashing? 

Every time we refer to this as the market crashing we get a justification for why it isn't. Surely the excuses have run out ...

When the crash trajectory started a couple of years ago it wasn't crashing because the house prices hadn't dropped 20% in real terms, even though it was clear that was the trajectory

Then when they did actually drop 20% in real terms it wasn't a crash because they hadn't yet fallen 20% in nominal terms 

Then when they had actually fallen 20% in nominal terms it wasn't crashing because we'd reached the bottom so couldn't be crashing

Now it's clear prices have fallen 20% in nominal terms (much more in real terms) and they are still heading down. 

The market is crashing ... What's the next excuse? 

Shock property tax rise hits landlords, holiday homes

John KehoeEconomics editor

Landlords, holiday homes and businesses in NSW will be hit by a $1.5 billion increase in land taxes, which the real estate industry warns could cost owners thousands of dollars a year and be passed on to renters.

NSW becomes the third state Labor government to target multiple property owners with higher taxes, following a bigger land tax increase in Victoria and a tax hike attempt in Queensland that was abandoned.

New Zealand's problem is that buying a rental property is viewed as a typical kiwi's superannuation scheme. But, this can't work for everyone, it's unsustainable. My brother-in-law just permanently moved back to Christchurch so that his wife could be near her family when they have kids. He is 34 and withdrew $120,000 from his superannuation in Australia. That's not unusual. Typical balances are in the hundreds of thousands. Compare that to kiwisaver, in 2022 the average balance was $27k in New Zealand and $147k in Australia. For someone near retirement aged 60 to 65 - the average male balance is $400k AUD. Those figures are just jaw dropping. Add to that, the incredibly disadvantageous tax settings relative to Australia - where contributions are a compulsory 10%, you can choose to salary sacrifice some additional income which goes into your superannuation untaxed, and has an EET model - Exempt, exempt, taxed (which means over time you end up with a much bigger balance, as you get compounding interest over time). In NZ, we have a stupid TTE system - leading to overall smaller balances. Oh, and John Key made employer kiwisaver contributions taxable. He honestly was so against kiwisaver, or the idea that someone should save for retirement using a savings scheme other than property investment. 

House prices will collapse further - the first replacements for dairy products will hit the market next year and diary products are half NZs GDP, if you take Dairy products out of the export mix - NZ goes from 60% of Australia's GDP per capita to 30%.  It leads to the situation of economic refugees from NZ pouring across the border into Australia which leads to the situation of Australia closing its borders.  The impact on house prices - well salaries in NZ aren't going to fall but if GDP per capita drops this much relative to Australia then the dollar has to fall.  This is all bad for inflation and the impact will be a high OCR for years to come.