Auction room activity stays down in second week of September. The spring real estate season hasn't started yet

Certainly...

44 out of the 230 homes offered, sold equal-to-or-above rating valuation.

Only 19% of the homes offered, sold equal-to-or-above rating valuation.

Doesn't look great.

TTP.  Learn to read the room.

If that's to hard then just read the upticks NZ Gecko, a realist, gets versus you.

Spruikers do more damage than realist DGMs

TTP if you are going to try and create a basic illusion with some simple statistics, you could at least try and make it difficult to see through.

Very politely, may I suggest that the doomy-gloomies read the article and the accompanying tabulation before putting their mouthes into overdrive.

Good heavens TTP. That's not a very robust data set. Just take a look at the sample sizes. Analysis 101. 

@NZGecko - fair enough about all the above 

1. what actual advice did TA give?  because i read all his articles and it is based on surveys he send out, he gives feedback on timestamps in the market he did not tell anyone to buy or sell.?

2. why do all young NZs be covered in cotton wool and be protected form the mean spruiker.

3. While you are slaying the terrible spruiker dragon and saving the fair hapless first home buyer maide pls give them some good advice and tell them there is a glut of properties and if they get a good deal maybe they should consider buying.....  if not keep renting and blaming everyone when prices goes up.

Anyway as i said i am in it and not getting out.  For me as a spruiker it is good if people rent.  DONT BUY.

@ NZ Gecko - hahah that is pretty good comment - Renting helps me out yes and I would argue it also help my tenants out - 

1. had two memorable moments as a landlord  the first was a welch and irish couple who thank me for the low rent they paid and suggested i put it up $50 when they moved out and build a house - TBH at the time about 9 years ago interest was manageable and tax deductible so it was easy to rent and build a relationship - now that Ardern really messed with it - it has become a business of watching every expense with a magnifiying glass and get top dollar when you can.

2, had a tennant move to Tauranga and when they moved back to AKL rented my house in Te Atatu.  

So yea Vampire maybe - good bloke definately......  i have never been a slumlord or spruiker I enjoyed the landlord side of things and i still get xmas cards - well I lie that dried up since i handed all my properties over to property managers.  I use to give all my tennants two weeks of free rent over Xmas - as i said those days are over and it has become impersonal.** tenants use to love the two weeks free over Xmas and it made me feel good to** most of the time if they moved in on a Wed for argument they dont have to pay rent till the Monday give them time to move in or if they want my place and times dont allow i have the house empty for 3  weeks while i wait for the right tenant - I would say most of the spruikers on here would have dont it..... however previous goverment turned people against each other - and i think you drinking that coolaid (blood ie vampire analogy)

The time when you could be a landlord and actually feel like a good person is gone - personally if I turned into a daywalker it was because of Robinson and Ardern 

Indeed, from a long-term perspective, property is a big winner, as its track-record highlights. On top of rental yield comes capital appreciation over time.

Alas, those obsessed/fixated with the short-term - with no understanding of property cycles - fail to recognise these salient principles.......

Not much hope for the discombobulated. 😟

TTP

For those that are unable to see the mathematics between the Peaker and the Buyer Today (BT). 

For owner occupier buyers: CAVEAT EMPTOR. Beware of those with their vested financial self interests.

1) Peaker

The median house price at the peak for Auckland was $1,300,000

With an 80% LVR, this is a mortgage of $1,040,000

The 20% equity is $260,000

2) Buyer Today ("BT") - Aug 2024

In 2021, the buyer who waited, deposited the same $260,000 equity into a bank deposit earning interest. Also BT would rent an equivalent house and have still saved money due to the rental being below the monthly P&I mortgage payments of Peaker - in 3 years the savings would have been about $20,000 annually. So a Buyer Today would have an amount of $340,233 to use as a deposit.

The current median house price for Auckland is around $950,000

Equity deposit of $340,233

The mortgage at this purchase price would be $609,767 (an LVR of 64%)

The Peaker has a mortgage which is higher by $430,233 (mortgage of $1,040,000 for Peaker vs $609,767 for BT). BT's mortgage is 41% lower than Peaker's mortgage.

Assuming BT, pays the same exact dollar amount each year that Peaker pays for their mortgage, as a result of that additional borrowing, Peaker is paying $1,232,229 more over the 30 years than BT (This is due to higher borrowing amount of $430,233, and total interest on this of $801,996 over 30 years). BT is mortgage free by the year 2037, whilst Peaker continues to pay their mortgage until 2051 (14 years later) - so after the year 2037, BT can save all that money that Peaker continues to pay on the P&I mortgage.

Assuming same incomes, and same living costs (food, travel, etc except mortgage) , BT can save the total $1,232,229 in payments that Peaker is paying. If BT invests the annual P&I payments that Peaker continues to pay after the year 2037 at 4.0% p.a, then in 2051 this amount will grow to $1,401,500.

Remember that at the end of 30 years, the house price will be EXACTLY THE SAME for Peaker and BT.

BT will have more money available for retirement than Peaker. Conversely, Peaker will have less money than BT at retirement.

That single decision to buy in November 2021 would have cost $1,232,229 extra to buy the exact same house for Peaker compared to a Buyer Today.

CAVEAT EMPTOR

I believe it'll still be a while until interest rates drop enough to make demand higher than supply. Plus we're a bit far from seeing the stress on existing homeowners who bought at peak go away, and the easing of inflation will still take a bit longer to positively reflect on people's budgets. Still think it makes sense for FHB to thread lightly and see what happens 

If you have stable employment and the cash, and find a "forever" home or long term home, I agree. Anecdotally in Wellington, there's not a lot of sense in buying. I have number of FHB mates between 30-40, with a child or two. They have good deposits, but once you factor in rates, insurance, and loss of investment income from the deposit, buying is just too expensive for them to make a move on it.

Once they hit that 20% deposit, the investment options elsewhere are just too good to pass up. And the return offsets a significant part of their rent.

Consider that for 700/800pw you can rent a "$1m" home, buying the same property would be $15k in holding costs excluding mortgage, and fairly middle of the road $10-20k in lost earnings potential on a $200k deposit. So the true rent is $10-20k p/a? And interest costs if buying that same property are currently ~$48k? Where do interest rates need to drop to to hold prices steady? <3%?

So without capital gains, you're losing a significant amount of income, and earning potential on your cash, and retirement savings... FHBs are getting too old to start again in a 1br shoebox, especially if they already have one or two kids.

Most Millenials have just missed out, and it's just too bad. I don't think the nest egg will work in 30-40 years time.

Why not wait for lower rates and prices?

Yea who really knows - a 30 year cost comparison with assumed reinvested return on the deposit would be a very useful tool. Might consider making one, anyway see above for the immediate cost comparison I see some of my mates contemplating now.

"it would be interesting to see a 30 year cost comparison of a home owner compared to 30 years of renting"

I have done those calculations.

The key variables are:

1) house price growth 

2) mortgage interest rates

3) ownership cost growth - (i.e rates, insurance, naintenance)

4) rental price growth

5) investment returns for the renter

The calculations are only as good as the assumptions input. If the assumptions are wildly incorrect, then its a case of garbage in, garbage out. 

In the calculations I have seen by property investors, some assumptions have been wildly optimistic, which has led to a decision to buy using high levels of debt.

"When I hear people say investors are back in the market I struggle to comprehend that...the top-up required to cover costs would be brutal"

There are buying syndicates operating. I have heard of a group of up to 5 friends / family / co-investors combining their buying power to buy either in property trading or buying to rent out. This is how property investors are buying. The top up for each of the 5 is bearable (unless one or two people lose their income). In some cases, one of the co-investors may have a large cash deposit to invest or may have unleveraged equity that they can borrow against (e.g a house with low LVR).  This is how non owner occupier buyers are outbidding owner occupier buyers. 

Other than comments on here, and articles from the usual suspects, I'm not hearing anybody say it's a good time to buy. People in my social circles are more concerned about keeping their jobs. A number have left, and a few have lost their jobs.

I'm not sure when would be a good time to buy, if buying for investment - when the numbers make more sense. The idea of capital gains relies on taking advantage of favorable numbers then relying on those numbers being no better for the next buyer. If FHB, then if you find a nice secure forever home in a good location it may be worth paying a premium for it now if you can afford to.

Renting in Wellington seems like a much better option for established families. Given the average FHB age is mid 30s, those with one or two kids could get a nicer house for much less money close to school by renting. Obviously, good stable well paying jobs are important. Lower incomes now days just do it extremely tough, and no amount of overtime will fix that.

I think we're reaching a point where FHB won't lose whatever they chose to do. But that period won't last forever.