House sales declined in September but prices held their own, REINZ says

Here we go again...

Brace.......

Sales numbers dropping, stock increasing, days to sell rocketing up.

Enjoy the smallest of dead cats before the usual service of drops continues.

"Shiver me timbers" - adjusted for inflation this is not good for sellers. Job uncertainty dictates this is a great buyers market for some time to come. 

"Even though we are seeing another year-on-year decrease, this is in line with what we expect at this time of year, so the market is doing what we would expect, another sign of stability," she said

🤣🤣🤣🤣🤣🤣🤣🤣

Prices won’t spike just yet, but don’t get too comfortable. By the time the headlines shift, it’ll already be too late.

I went to a few open homes on the weekend and was surprised by the amount of interest in the properties. If vendors are willing to sell for 2019 prices they should have no problem selling at all!

@anyone - does anyone know how open homes are tracking in Palmerston north?

The only way I see that we can get the housing market back on track is to open investment in housing back up to foreigners, encourage mass immigration and allow interest rates to drop further thereby allowing those newly minted NZ'ers to take on jumbo mortgages.

This has been our "growth" model for the last few decades and it's been wonderfully successful in transferring wealth to the Luxons amongst us as well as turning green pasture into suburbs.

I've spent a lot of time looking at charts to try and assess when market lows are hit. Obviously its not that simple, but this does not look anything like a bottom to me. 

Wow looks like green shoots already up 1.8 in AKL. 

And for all the huffing and puffing done by the renters over the whole year AKL is down a massive -2%. 

No doubt Retired Poppy et al will keep spouting the same wisdom he has for the last decade on here “adjusted for inflation” pretty desperate stuff now. 

I said prices would bottom out in Spring. That was rubbished by one person in particular. Let’s see where we sit over the next couple of months.

Council delays release of Auckland property valuations until early next year

Auckland council delaying again for some reason...wonder why?

https://www.nzherald.co.nz/nz/council-delays-release-of-auckland-proper…

Drink some Kool Aid.  Half of all regions rising in price since July. All but Otago rising in last month. 2019 prices are the vibe.

Interesting choice of headline with the national median up 2.1% and HPI up 1%. 

So the market has already turned upwards. Price declines have already been wiped out in Tauranga its on the up. More rate cuts and summer on the way its going to be 3 to 4% gains for the year. Time to buy a house if you can find a remaining bargain, there has been a few down here if you were quick.

It’s pretty rough out there! Net 55% of manufacturers reported layoffs last quarter, the worst hit since records began back in 1961. In this balance sheet recession, with asset values dropping while debts stay high or climb, folks are really zeroing in on straightening out their finances in this uncertain job market.

Looks like we might see plenty of forced changes in ownership in the next year or two.

Beware the bull-trap. (hint: rises lag falling i-rates)

It's quite repulsive seeing all these ghouls popping out of the woodwork rubbing their greedy little mitts together about house price rises. They even have the audacity to mock others for their "doom and gloom" outlook and ridicule the renters they extract their profits from.

How myopic does one have to be to think that the inability for an average family to buy a house is a good thing?!

Was expecting house prices to keep sliding all the way into 2025. Not going to lie, this is not the data I was expecting. North shore up an eye-watering 2.8% MoM is quite a shocker.

Hmmm ... Three months of small prices rises = a trend reversal?

I think not. But hey - don't take my word for it. Bone up, people. It'll save you $10,000's (probably more).

Beginner's guide: Reversal: Definition, Example, and Trading Strategies

We've been actively looking to help some first-home buyers in Auckland.



We are finding a mixture of brand-new-town-house-style housing (terraced or shoulder-to-shoulder) and old-stock housing with similar pricing expectations. 



The new homes are priced above the limits of the LVR. The developers say they need to recover the cost of the build. Some are selling one and holding stock back as the market is dire.



The old homes need work. And there lies the rub. They are priced at the land value. At the required mortgage levels to buy (even with the slightly lower interest rate), there is no money left to renovate (or time as the couples are both working). 



So unless you're in the game of renovating, the stock is not attractive at the current price points. It's effectively a wealth transfer situation that most don't wish to undertake. (luckily the LVR is in place to stop the previous stupidity). Couples that sign up are committing to a lifetime of not only overpaying for potential land value but as much in interest again. 



Good houses will sell to those who have enough money or where the vendors have to meet the market. Those purchases (natural churn) sustain the market. 

So in effect, we have a waiting game.



Ironically while bringing interest rates down will alleviate the financial hardship for those who over-committed, it will also lengthen the waiting-out period for vendors that expect the current premium pricing.  Extending the stand-off.

It will be interesting to see what Auckland's four-yearly valuations show. They've been delayed for some reason.   I do hope they've tweaked the AI engine to not value all land in the same way. Properties grafted to sides of hills with no geoengineering might not be worth the same as the flat site down the road.



Also a final question. Why isn't it a requirement for property owners to provide the housing reports? Talking with several FHB aspirants they've made offers only to be let down due to wetness or problematic construction. That would go a long way to right-sizing value expectations

Surely this is just combination of prices unwinding due to more normal debt costs vs the stupidity of covid 2% debt, and increased concern around unemployment during recession. Those with low debt and secure income will yawn on keep on their way. Those leveraged to the eyeballs under historical tax avoidance gambling will be increasingly sweating.

Some will pick the swings and position well, some will not because when someone wins financially some one else is losing.

Popcorn.

The month on month sales comparison isn't accurate as every month the number of sales for previous months gets updated to account for sales received by REINZ AFTER the stats cut off date. 

For example the number of sales reported by REINZ when they released their August stats last month was 5685.  Once adjusted for "late" sales that increased to 6015 (in the chart above).

So the "significant decline" this month is comparing an incomplete September month to a complete August month.  The revision is typically in the 3-4% realm (last months was high in comparison) so I suspect that once next months data is released, the revised September number will be ~3-4% higher, and the "significant decline" will disappear.... 

No surprise that the Real Estate Institute who act for agents say the market is stabilised even when stock levels are through the roof. 

Then central Auckland agents continue with the quote lie to both vendors and buyers, then wonder why their properties don't sell

The national median days to sell increased by nine days to 49, and excluding Auckland, it rose to 50 days.

It's hardly a market poised for a rebound as some here are Spruiking. This looks like a new normal that's plagued by income insecurity. What an amazing opportunity for the next generation to get a foothold by amassing decent deposits (interest saving - risk mitigating) first. Why risk becoming cannon fodder?  

Houses are for living in and not speculating on. edit. 

Let's see how Gecko spins this into a tirade about how no one should pay more than 2015 CV

So If I read the HPI correctly all regions had an increase in the last 5 Years?

Anecdotal but been looking casually for the last year (FHB). I stopped as soon as the RBNZ started cutting. For me the current "optimistic" mood just means no chance of vendors or agents meeting my price range in the near future. The data this month seems consistent with that: those that are desperate to buy can pay a little more now that borrowing is cheaper, but there aren't many desperate buyers left,and meanwhile every other buyer has less chance of finding a deal that makes sense to them. I think the RE industry, if they had more brains, should be pretty concerned about where this is heading because imo it's likely to mean an extended period of low turnover with both sides feeling little urgency to engage, and perhaps a degree of trepidation about the risks of doing so. 

Just out, and why are we going to be any different?

"Household spending falls as Australians use cash to pay down debt....the only spending categories to rise in September were all essentials, indicating that increased take-home pay from tax cuts is largely being used to pay down debt and on staples, not spending on discretionary items"

We aren't. Lower mortgage rates are going to do the very thing that the economy is not designed for - have less Debt. Any additional disposable income is going to be used to lessen risk. And as Gross Debt falls, less will be applied to things like - buying property.

Why is this sort of thing happening today?

"Cash, a new car, three years of guaranteed rent, free furniture or a low-interest loan are being offered as incentives to buyers of new homes at the $210 million Wirihana estate in south Auckland."

Answer: So that the prices of the properties themselves don't have to be reduced to attract buyers. That's the last thing any vested interest wants to see - further price deterioration.

One move up doesn't equal a bull market/bottom nor does one move down equal a bear market/top. If I were to read this chart like any other asset, the market has been neutral/ranging this entire year. The high is $800k (previous support) and the low is $755k, close to previous resistance of $747k.



There's a slight bear case in that we've been putting in lower lows but I'd argue that bulls are in charge if we break through $800k and bears if we break $750k. However, while we continue to range between those levels it's basically a coin toss as to where we go from here, if going by the chart alone.



I think the fact that neither the bears nor the bulls have been in control this entire year reflects the ongoing bickering in this comment section. So based on this chart alone, until we see a clear move in either direction, I don't see an issue with FHB's biding their time and continuing to save to reduce the size of their eventual mortgage.

A big elephant in the room remains Auckland Council’s new development contributions policy. Hardly received any journalistic coverage. Developers with interests in a number of areas in Auckland are effectively saying it will be ‘game over’. 

Sure it’s not across all of Auckland but we are talking about a number of large areas. Met with one of the bigger developers today, they are worried. And they can’t appeal council’s decision. Only judicial review in the High Court possible, and that’s only on flawed process. High bar.

Gonna be a new headwind on supply over coming years 

Meanwhile Council and watercare have brought the development properties to a sudden  halt.  No building in RED zones due to lack of services Infrastructure,