Listings and asking prices on Realestate.co.nz drop in January despite warmer market; inventories also fall, suggesting sellers' market

Listings and asking prices on Realestate.co.nz drop in January despite warmer market; inventories also fall, suggesting sellers' market

By Bernard Hickey

Listings on Realestate.co.nz fell in January to their lowest levels in four years in Auckland, Christchurch and Wellington, but asking prices also fell despite falling inventories suggesting the housing market favours sellers rather than buyers.

The monthly report from Realestate.co.nz on its Unconditional blog shows new listings fell 2% to 8,542 in January from December and were up only 3% from a year ago, despite property sales rising at an annualised rate of around 20%.

Realestate.co.nz CEO Alistair Helm said supply was not keeping up with the pace of buyer demand. He pointed to record low levels of inventory.

“The last three months has seen just over 30,000 new listings come on the market, which is equal to the same time period last year, yet sales are up 22%," Helm said.

"With the three major cities leading the trend, the market has tightened even further in most regions across the country,” he said.

Auckland’s inventory fell to 23.6 weeks of sales, while Wellington’s fell to 21.6 and Christchurch's fell to 21.7. National inventory levels dropped to 36.4 weeks, which is down 25% on the same month last year, and below the long-term average of 41 weeks.

Realestate.co.nz reported the average asking price for homes fell 1% in seasonally adjusted terms to NZ$417,740.

"Sellers are not stretching price expectations of buyers as yet. As has been the trend for months now, sellers continue to have the upper hand in the market, but the market is still setting the price," Helm said.

ASB reaction

ASB Economist Christina Leung said the number of new listings fell 2.4% in January from December on a seasonally adjusted basis and followed a 7.4% fall the previous month.

Leung said the housing market remained very tight.

"There continue to be a decline in new listings in the key regions Canterbury and Auckland, pointing to continued tightness in these housing markets," she said.

"We expect the tightness in the housing market will underpin a continued modest recovery in house prices over the coming year."

(Updated with ASB comment)

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Olly Newland has been 100% right all along.
How much evidence do the nay-sayers and gloomsters need before they too admit that the market is simmering and will explode in an orgy of price rises and massive rent hikes in a very short time?
Olly predicted months ago that rents would rise pushed by investor disincentives (depreciation tax changes), record low building starts, leaky homes and the Christchurch disaster all mixed into a witches brew. 
Rents have risen up to 28% in the inner city areas already and Olly's prediction that rents will double is arriving even faster that thought possible.
Now with a tightening market it is only a short matter of time before the "Coming NZ Property Boom" ( the title of Olly's first book 1978) will be on our door step- again.  
 
 
 

Olly you are correct. The property market follows age-old cycles and we are gradually moving into the next phase which is the shortages.
Isn't it interesting how the doom and gloom merchants on this site are starting to go quiet.
Let's hear from you Nick A...Happy Renter...et al.
Where is this collapse in prices you all write about? 
 

Did you notice that the asking price in Nelson was down 15% from last month and 12% in Cental Otago / Lakes? Not that asking price or number of listings on one website are indicative of anything. It might mean that people prefer to list on TradeMe or that the speculators have now well and truly left the market.

Second year hol'd in Marlborough...house next door bought 4 years back for $500k best offer $360k, so its not on the market, its a rental, such a price isnt recorded in the stats as there was no sale...the one on the other side its now empty for months....Saw lots of for sale signs....this isnt an overall healthy/booming market me thinks.....sure its seems some areas are doing well or at least holding up....about to boom?...me thinks not...
regards

Simon P and Steven - are they the best you can find?????  Struggling a bit are we?  Olly wasn't right because he is a guru, he just follows what has happened historically - like we all should do.

Extrapolating past trends ad. infinitum. is not what we should do. That turkey on Thanksgiving Day never saw it coming.

Rents haven't gone up where I am.  Quite the contrary.  You get more house for your money than ever- nicer homes too.  If there were so many buyers around, why am I making this personal observation?  
The Christchurch earthquake was a great bump for real estate in...Australia, yet it is a drop in the bucket by the size of the problem there.  
Auckland?  An anomaly, or ecosystem, like Vancouver or Sydney.  Just like San Francisco, it too is not immune to painful events, where entire populations wake up and say "what have we gotten ourselves into?  What were we thinking?"  
http://greaterfool.ca
It's the madness of crowds and animal spirits.  We never learn.  

Quite the opposite, it seems that there are statistics presented here that defy any explanation from a RE bear. Seems to me it is setting up for a big leg down as the fundamentals reconcile. The days of criminally using the system for an advantage by way of leverage against property are drawing to a close.

Yes there should be a special prison setup for anyone who has ever borrowed a dollar to buy a house. Good stuff.

Not at all SK, but certainly a very special prison for scum that wilfully and knowledgably manipulate the system to thier advantage. Look at your bahaviour buddy, it is just a scaled down version of the bankers that have created the global financial crunch.
One thing I understand very well is criminal behaviour. But then most criminals don't have a concience. The ones that do can be reformed, the ones that don't you might as well put down as they have nothing to contribute.
Have I had mortgages? Certainly but despite almost being conned into playing the game at one point, I did in the end refrain. Close call but my morals held in the end.

Get real Scarfie, go back to your occupying.   Maybe we should lock up all students borrowing from taxpayers to finance their studies as well?

Haha by those comments you only make a fool of yourself as you will read further down.
So presumably you think property investment is perfectly acceptable? But then you call yourself a hardworker. Hypocrite.

So presumably you think property investment is perfectly acceptable?
Only if it provides a decent return!

I think debtors prisons will make a come back......those that go bankrupt and are shown in court to have willfully and carelessly gambled, sure why not put them in jail.
regards

Privatised jail.  Lock 'em up for profit.

Ive read some comments that in the US thats actually not so far fetched.....ie there is a question that full prisons and the cheap labour then available is being exploited....
So the state is giving some employers cheap labour that destroys the need for jobs of honest ppl outside who simply cant compete.......
regards

I don't think it's far-fetched either.
As for the state giving employers cheap labour, that's already happening with the subsidised compulsory 'work experience' schemes.  Who needs Independent Family Cleaning Business Ltd when taxpayer-supplied slave labour is available?

.
 

All these phenomena are classic regulatory supply-distortion inflated urban land prices syndrome.
Bubble peaks are accompanied by still-rising prices and FALLING TURNOVER. Along with "holdout" owners of empty properties, commercial as well as housing, who refuse to lower their prices to what customers INCOMES can stand.
The longer the supply constraints are persisted in, the LOWER turnover rates fall to at ALL points in the property cycle. MOST of the "happening" is in PRICES. Britain is the classic example. Their economy is terminally stuffed by their land supply regulations since 1947.

mmmmmmmmmmmm so....could you just fill in the gaps...the bit about where all this extra cash to pay the higher rents/purchase prices is going to come from??   i suppose we could cut back on something else........woops..forgot..already done that...

EXACTLY, Rastus.
The spruikers might be right again temporarily. But property is a "COST" in the productive economy, therefore eventually inflated price property has to strangle the productive economy. And if it takes till then for prices to collapse, then the collapse will be a BIGGIE.
Median multiples are actually a very important "indicator". I say that no market can keep these above 6 forever, and I also say that the market HAS to come back to below at least 4, ONE DAY. Japan took 20 years. Ireland took 2.

Is that a beer bottle on Bernards desk?

L&P?
Bernard is missing on a great market potential, product placement.....
Hey Bernard if you take that up I'll want 5% cut for taht idea....
Or a coffee one day...........
;]
regards

Nice idea.
You're on.
Not quite a beer bottle. It's a bottle of Lemon Lime and Bitters. It was a hot day.
cheers
Bernard

"criminally using the system" ???  
What is he on about?  
We have a system.
It works even if it lumpy at times.
Is Scarfie looking forward to the re emergence of Communism, the collapse of Capitalism, or the New World order?
Maybe the coming of the Aliens from a far off galaxy? 
Or worse still another labour Government?
Let's hear from him .
Nothing like a few lunatic ideas to brighten up the day.
 
 
 
 

I love how being a property bear makes you a lunatic and being a bull makes you normal lol

Politics is the game of one man, or many men, imposing their will upon others. A fools game in my opinion, as is presuming to know the answer to the perfect system of governance.
 
What is clear is that our debt based money system is a fraudulent scheme executed by those that would also seek to exercise their will over others.
 
Money is fraudulent because it is not what it purports to represent. To use this fraudulent money and then leverage it even further by investing in property is the action of a criminal.
 
Whether it is wilful or ignorant on your behalf I don't know. But ignornace in this instance is no excuse because you are deep enough in this to know better. You are a regular here on the forums and there has been plenty of evidence presented here that are informative enough for you. Perhaps you lack the ability to fully understand the game you are playing? No excuse either.
 
The real estate market, backed by fiat money, is a ponzi scheme. Ponzi schemes are criminal.

Nothing like a few lunatic ideas to brighten up the day.
How about Olly's idea of "rents doubling in a couple of years". That's lunacy IMHO
And before you get too bullish about house prices, Olly ALSO said (for what its worth) that as sure as there will be another boom, there will be another bust.
 
 

Who will pay your rents if your tenants don't have a job?  

WINZ via tenant. 

Or if they can't get WINZ to pay, they enrol at the University and get StudyLink to pay everything for them.

Only in Auckland central, not everywhere else.. Let's not going over the top!

http://www.macrobusiness.com.au/2012/01/house-prices-resume-falls/
House prices down in OZ
Housing credit growth slows in OZ
Retail sales down also
Never ceases to amaze me that NZ is luckier than the lucky country!
Downturn will never happen here will it property bulls?
There are over 1000 properties for sale in our town, Pop 5,000

"There are over 1000 properties for sale in our town, Pop 5,000"  URL to back it up plse. Otherwise off the cuff comment like that will only make you look S T U P I D E R.. 
PS are you ex Agent?

Houses in hamilton between 280k and 310k moving along nicely.
above 310k a lot longer to move and above 420k not much movement at all.
JUST AN OPINION.

 

“We are, after all, a nation of accomplished spenders, slaves to advertising and status symbolism. The conspicuous fruits of our consumption shout out our aspirations and insecurities.”
Juliet Schor

 

Still waiting to here what the town is, prosperopink. The one with a population of 5000 and 1000 houses for sale. Bernard will probably do a story on it.  Unless its just a prosperoporkie.

No need to be rude, Mr Chairman.
Just go to "Trade me"property, Northland, Far North, Kerikeri. Actually its 1047 but a few are listed twice so I reduced it to 1000. No I'm afraid I couldn't bring myself to be an agent,
I'd rather scrub floors. 
 

There is undoubtably still action in Auckland, the question becomes whether Auckland prices will filter back out or the rest of the country will drag Auckland down. Actually there are bigger questions than that to be answered but we have to keep the property spruikers(criminals) amused.

The bigger they are the harder they fall - kind of like how the bottom fell spectacularly out of the beachfront / holiday home market.

 Northland, Far North, Kerikeri would be more than 5000 people...   it's a fairly large region!

Picky, picky. So the population in Keri Keri is closer to 6,000
 
http://en.wikipedia.org/wiki/Kerikeri
 
Still, a pretty lousy real eastate market one would have to say.

Nah not picky..
Just like people stating the facts rather than made up stuffs like a politician speech "over 1000 and population of 5000".  Combined Keri Keri, Northland and far North would be way over 6000!

Yeah but if you look at the TradeMe site - the listings are for Kerikeri only - as all the other centres in the far North/Northland have their own separate category headings.
I think you're psuh there Chairman - it's an excessively oversupplied market.  There are far fewer properties for sale in places like New Plymouth and Palmerston North - where the job opportunities are far, far greater than in Kerikeri - beautiful a place as it is.  Interestingly, had a look at the prices there and they are comparable to most provincial centres.. so unless industry comes to town, the market clearance rate will be dire.
Very sad as Northland is truly an inspiring environment.

That's amazing. There are only 2911 for sale in Auckland city - population 450,000 or so!
Obviously a buyers market in Kerikeri!!

Interesting.
Realestate.co.nz shows 1,139 property listings for KeriKeri  http://www.realestate.co.nz/residential/search/suburbs/120
Trademe.co.nz shows 1,041 listings  http://www.trademe.co.nz/Browse/CategoryAttributeSearchResults.aspx?sear...
Census data shows around 3,000 dwellings in KeriKeri (assuming 20% growth from 2006 and same occupied/unoccupied rate as rest of Northland).
http://www.stats.govt.nz/Census/2006CensusHomePage/QuickStats/AboutAPlace/SnapShot.aspx?id=3500900&type=au&ParentID=1000001&expand=2000001&scrollLeft=0&scrollTop=219&ss=y
That suggests around 1 in 3 houses in Keri Keri are for sale.
Updated -  I've just seen Alistair's comment below saying just 556 properties are for sale. So that would mean around one in 6.
Northland certainly the hardest hit by the slump in coastal property.
cheers
Bernard
 

I'm looking in Wellington - Hutt area - and finding that the REs often mention that the seller purchased only a few years ago (i.e. at peak) and accepts they will take a loss "but not that much of a loss" - meaning in most cases the property is still in the mind of the REs, overpriced.  Lots of empty places for sale where homeowners, having moved on, are stuck between a rock and a hard place.  In many cases they decide (or go back to) the rental option - and the demand there is still good (for renters) but not great yeilds for the landlords at today's asking prices.
Also seeing what anecdotally seems a greater percentage of homes being sold for the first time in decades - and these are the hotly sought after properties.  Well maintained by one careful owner - great construction materials, established gardens, prime sections. Volume of those sorts can only increase greatly with our aging population.  My thought is still that its going to be good buying for families prepared to wait a few more years to get a solid home in a good location - outside of Auckland, that is!!!!.

Mate just got a rental in a (probably) good spot on the fringe of one of the best wgtn suburbs.....it had been empty months....I suspect it will catch the southerly badly.....but the deal seemed pretty good.
regards

I agree that only Central Auckland is going well. At a family reunion last weekend my brother in law told me his beachfron property on Waiheke Island is even down in value from a couple of years ago. Go to the provincial cities such as Hamilton and New Plymouth and you will see their values are steadily dropping. Maybe all NZ landlords out of Auckland Central should sell their investment homes and buy in Auckland Central. Then they might beat inflation every year and some.

You are wrong mate - look to Hamilton they have gone up and as before when the boom from Akl moves SOuth, they will go up even more.

Go Big Daddy !!
Get out there and snap up those "bargains" !
Put up those rents !
Pay an endless stream of mortgage interest payments to the banks
Keep the NZ property bubble alive !!
It's the only thing that is holding the economy together..... is it though ??
At the end of the day, the only winner will be the banks ..... and those that cashed out at the peak. 
However, the banks will be left holding the baby ... then the proverbial will really hit the fan.
Oh ! I can hear the cries of "it will never happen here" .... just read up on what it is like to live in Greece at the moment ... but you think "it's different here" ...
"Little Boy" there is no good rate of return on your investment in this market (central Auckland), unless you bought in at least 7 years ago .... I bought 19 years ago and nothing since then ... says it all.
 
 
 

I dont think the banks can win.....the bank employees selling the mortgages, sure they get their annual bonuses and move on if it dives.....those who cashed out, yep.....they need to be already out though IMHO....but then I thought that 18months ago.....so there might be many months of gurgling along yet....
Anyway when it all goes pear shaped that banks will be left holding huge property portfolios no one wants at that price...thats going to send them insolvent.....the Q is then who bails them out......If Bollard's living wills is in place, depositors in theory...mind you if the Govn isnt going to step in then the bank runs will kill the banks very fast....ppl (OAPs) will run....
Now not having bought for 19years seems a little excessive IMHO.
;]
....but after the crash lots of firesales.....then housing will be cheap to buy.....Im having difficulty in seeing anything else worth investing in.........
regards
 
 

In regard to properties for sale in Kerikeri I thought I would share the data we hold on realestate.co.nz.
At this time there are actually just 215 properties in Kerikeri for sale (exc sections) - this map feature on realestate.co.nz shows these by physical location (http://bit.ly/yjCiAw). There are more properties outside the town itself.
The search on our site for the suburb of Kerikeri shows 556 - this is due the suburb boundary of Kerikeri is wider than just the town (http://bit.ly/A4s7Jk) on Trade me the same search for properties (inc sections) shows 1,049 (http://bit.ly/xswkMY) with 491 sections (http://bit.ly/ypXgpb) - therefore Trade me shows 558 properties in the wider Kerikeri area.

Our monthly data of new listings comprises the number of properties added by a licensed agent in the month. Each listing is a new unique number and therefore if a property is withdrawn by agent A and then relisted by Agent B it is a new listing. The listings data is designed to reflect the dynamics of the market.
In calculating the inventory measured as "weeks of equivalent sales" we take the seasonally adjusted inventory of properties on the market at 31 Jan and divide it by the seasonally adjusted weekly rate of sale based on the REINZ sales data.

To respond to these comments:
 
It is important to make a distinction between two metrics - "days on the market" as related to property sales and "weeks of equivalent sales".
Days on the Market is a measure used by the REINZ when they publish property sales data. REINZ collect that data by individual reporting of property sales. Their methodology is best expalined by reviewing their website.
Weeks of equivalent sales is a measure developed by our company to represent the scale of inventory of property stock on the market factored by the current rate of sale. To make this calculation we use the REINZ monthly sales data.
 
In regard to relisting properties. Most listing by licensed real estate agents are for 90 day contracts. Our system does not allow multiple re-listing by the same agent during a listing period. We do treat a new listing by a different company of the same house in consecutive periods as a new listing. The quantum of this situation is in relative terms very small - less than 3%. We also feel that a measure of new listings should reflect the new presentation of an existing property.
 
As to the Christchurch question I would agree with you that it would be ideal to in some way factor in for the removal of the scale of property affected by the earthquake. However this is not simple - there is no simple menas to say that the earthquake removed 20% of available housing stock.
However as our model calculates inventory based on stock and rate of sale the fact is that the earthquake impacted oth sides of this equation so you could argue inherently our measure has already factored this in.

Coming back to the piece about Kerikeri...  There are a lot of properties for sale in and around Kerikeri, including Okaihau, Kaikohe etc etc etc.  Why?  Because the property prices there currently are excessive considering the incomes you can earn in those places.
 
However, that's not the "sole" reason.  Since the Mayor of the Far North went in there a few years ago - he loosened the rules around developments, sub-divisions etc in order that he could make it easier for himself...  There are a lot of properties from one particular sub-division just outside of Kerikeri still for sale...  Makes you wonder doesn't it.

there are two aspects to this data.
Firstly, yes where demand is reasonable a lack of listings should push prices up. But secondly, a lack of listings indicates a lack of confidence in the market, which counters the first aspect. 
how much is the lack of listings due to a lack of new housing hitting the market?

Exactly, if you follow "Dr HousingBubble" blog for a while, he is forever talking about "shadow inventory" in California. The people who know they will never get the PRICE they WISH for, so don't bother to even list. Or who DID list for 12 months and gave up. Or who are in default on their mortgages and the banks don't foreclose because the market is already bad enough.

I am glad a couple of you have seen what I see. Trouble is I put bear instead of bull in my comment near the top.

The trade me figures show 542 residential properties and 491 sections. There are also 775 lifestyle properties for sale in the Far North. From one who has been looking for over 18months,  this seems about right (as I said there are some double up listings.)  I have included the town and outlying areas as they come under the area "Kerikeri" on Trade me
Since we have been here since Sept I have seen 3 new houses being built. Maybe there are a few more but its very quiet.  It appears that the town enjoyed a housing boom with subsequent overdevelopment of sections. There are lots of vacant subdivisions.  All the attendant services, roofing, landscaping, granite benches must have done well during the boom but I don't know how they are doing now.  The building scene is very quiet.
 

Do you live in Kerikeri? I went up there a week ago to look at sections in Alderton Park. Nice subdivision with a rural outlook and all services selling between $75 and 105K (950-1500m2 approx) They have sold as low as $50k. Kerikeri must be one of the most prosperous parts of Northland and seems a very pleasant town yet there is a glut of property. What's going on? Is everyone moving for work or has there been a lot of absentee speculators?

PS I should have mentioned that a number of properties have been taken off the market and come up as rentals. Anecdotally, people can't bring themselves to take the hit and have been misled into thinking the market will pick up soon.

The property speculator class has been rescued big time by the exodus of people from ChCh. Things would be a lot worse for them if it wasn't for this.
As many as 1 in 100 properties in many neighbourhoods have been empty for years.
There are large numbers of young people who simply can't even think about buying houses because the prices are too high. This is a similar situation to that in China, where there are millions of slum dwellers, AND millions of empty apartments. The empty apartments are all owned by "greater suckers", the earlier racketeers have taken their slice of the action, which is the factor that makes the apartments too expensive for the slum dwellers unless the "greater suckers" take a haircut.
Apartments would literally be cheaper in Houston because there is no slice of the action taken by well placed racketeers. The slum dwellers would be living in the apartments. The same applies to NZ's housing market on a slightly different scale - many young people would be owners of houses if the vendors were not all "greater suckers" asking too much for the income levels of the population base.

mist42nz;
A basic economic principle from way back, since Smith and Ricardo, has been that the price of land is a variable of the income produced from it.
This is why the price of urban land goes up roughly as fast as urban incomes. There is centuries of evidence for this.
When the historic connection has been broken like it has been, start looking for distortions in the market, and rackets in "rent seeking" and wealth transfers. There will ALWAYS be interference by government involved somewhere. No-one in the private sector has the power.
In China it is corrupt CCP officials. In India it is corrupt officials, period. In NZ and many parts of the 1st world, it is "urban planners".

I just went to an auction. None met reserve. The highest bid on one house was $78,000. I don't see a seller's market where I live.

wow $78000, where? Eketahuna?

Rotorua. Rental was supposedly $190 p.w, currently vacant but new tenants supposedly confirmed. That would have been a good yield but good tenants are hard to find. House actually looked OK from the photos.
My point is that out here in the provinces there is a crash going on with a huge disconnect between buyers' and sellers' expectations. The commentary of realestate.co.nz, QV, et. al. do not apply to large parts of NZ.

didn't realise Rotorua can be that cheap!

Rotorua is lovely!!! 
Roughly one hour to Taupo, one to Tauranga, one to Whakatane and one and a half to Hamilton.  Gotta be one of the best places in NZ to own a boat!!! 
And as for wages - well the teachers, nurses/drs, accountants, planners, DOC workers etc. pretty much get paid the same rates there as anywhere in the country.
The real question for me is - why would anyone in these professions choose to live in Auckland? :-)
 

Mmmmmmmm not sure about rotorua being "lovely " but each to their own.
I think a lot of professionals could find a job in smaller cities, but the concern often is the lack of other options if they lose their job or dislike it. Also, the type and scope of work can be far less challenging / exciting in smaller places (I am thinking more here about jobs in architecture, engineering etc)

In the land of the long white wind, Rotorua is the least windy place in the country:-P Has to be something goind for it other than rotton eggs. How about the free thermal pools, if you know where to find them.

I had no trouble recruiting internationally for a particular type of professional to work in Rotorua.  The fact that it is 'an hour from anywhere' creates a sense of collegiality among professionals.  Wonderful place to raise a family - lakes, mountain biking trails among the best there is just 5mins ride from the CBD and some very good schools. Good hunting close by as well.  I prefer Rotorua to Hamilton any day.
 
But as mentioned above - each to their own. :-)

Interestingly,in  the other area I have been following, Golden Bay South Island, the inventory
is now 165 whereas it has been at 130(ish) since about Dec 2007 till Aug 2011,
Jus sayin.!!  so no need to stand on your chair Mr Chairman and shout, OK? 
 
 

Not shouting at all, the truth will come in  three months time when my house will be up on the block.  If it sells, I will leave to the other shore and NZ will be taken good care by mother China!

The property market is like Australian economy - 2 speed. Auckland and the rest.
Houses in Nelson/Cent Otago are falling as there is no industry there to sustain high pricing. Tourism is low dollar value to employees who cannot afford housing and Nelson region is slipping down because of things like wine industry falling in value.
I am enjoying capital gain in my house in Auckland it appears. Yee ha!!!!!

more like "Central Auckland" and the rest
herald continues its spruiking momentum:
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10782769
 

Central urban areas are always the last to fall in price.
This is because as prices fall, more people can afford to relocate closer to CBDs and other nodes. So this relocation process props up the prices at those nodes and speeds the fall nearer fringes.
The urban planners claim victory at this point. Pity they had to total the economy to get the desired result.

This is simply the reversal of the process I have described before, that the inflated prices earlier, result in unnaturally increased density FURTHER AWAY from the CBD and urban nodes - because that is where the price of land is "least unaffordable". This is "unintended consequence numero uno" from Urban Growth Containment. This is what I have studied in depth. Urban growth constraint planning is a failure differing from the totally planned Communist economy only in the SCALE of its failure. It is every bit as much illustrative of "unintended consequences" - Hayek must be hooting with laughter up in economist valhalla.
It does NOT IMPROVE jobs-housing balance, it DESTROYS it. This is because it forces the base price of urban land up so much, that "location" premiums (eg for homes near the CBD) make efficiently located property UNAFFORDABLE TO MORE PEOPLE.
Look at any city in NZ or Aussie or Britain; or Portland, Oregon, or LA. Look at the relentless ABOVE average density development and infill going on in the locations FURTHEST from the city centre.
Look at the graph on Page 12 in THIS paper:
http://alain-bertaud.com/images/AB_The%20Costs%20of%20Utopia_BJM4b.pdf
See what has happened to “where most people live” in Portland since they established an Urban Growth Boundary? Add to this, an increased incidence of "leapfrog" commutes from affordable rural areas way beyond the urban fringe.
This finding is supported by further academic literature by Patrick Troy, Jan Breuckner, and Anthony Downs.
Is the average commute to work in Wellington, NZ, pop 350,000, shorter in time than in Houston, pop. 4,200,000? The amount of preening and self congratulation that goes on among our sneering anti-car elites is classic "emperors new clothes" stuff.
As I was saying above, when the inevitable housing crash comes, suddenly efficient locations are affordable again; households that can, re-do their sums and move closer to work and amenities. Then the "planners" claim victory and claim that the collapse in prices has affected the fringes the most, therefore that proves fringe development is bad and should be prohibited even more.......!
Academic papers have found again and again that urban growth boundaries are 20 to 60 times more costly to an economy than petrol taxes or mileage charges that would have had the same impact on peoples location decisions. Utopian planners who are mostly Green religionists have not a single clue about economics, otherwise they would advocate land taxes and mileage charges, and leave urban growth boundaries completely off the agenda.
IF they want to achieve the changes in urban form that they THINK their grand plans would (viz the recent Akl idiocy) then they need to sell the public on nationalisation of property, compulsory acquisition, suspension of property rights, suspension of NIMBY rights, etc. Nothing else will actually do anything TOWARDS the alleged objectives except inflate urban land prices and deliver capital gains to some proportion of the population.
Do we have an existential crisis justifying interference in real estate markets or not? It makes one deeply suspicious of the real motives for all this planning. It did not surprise me at all to read recently, a 1974 magazine article about the Rockefeller family funding the promoters of urban growth containment way back then. Clearly the Rockefellers could see which side their bread was buttered on, being substantial investors in CBD property all over the world. And the Green activists they have been funding are too economically illiterate for it to even occur to them that they are nothing more than useful idiots to "BIG moneyed interests".

A mate sold in Titurangi about a year ago ..house went really fast. He built up in kerikeri, a nice brick and tile on an acre.The builder said things were dire,in fact the quietest it has ever been.If it wasn't for his house he'd be out of business now.
  Anecdotaly it's Christchurch people that are buying up this way, I've been noticing sold signs on houses around the 200k in the far north, have been on the market for a few years..the ones that are priced over that seem to sit,untill they are removed from the listings or get their price reduced.Mabey people think that its the bottom of the market.and or, the baby Boomers moving out of stressville?

Go the the REINZ site and look at the median from January 2011 to December 2011. December was less than Januarys. Then factor in inflation and you are going backwards 3 to 4 %. That is going backwards in my world.

Go the the REINZ site and look at the median from January 2011 to December 2011. December was less than Januarys. Then factor in inflation and you are going backwards 3 to 4 %. That is going backwards in my world.

FYI a question a reader Lance Wiggs to Alistair Helm:
What percentage of realestate.co.nz listings actually have an asking price? How do listings numbers compare vs Trade Me?
And here's Alistair's answer:

1. The short answer is that all listings on realestate.co.nz have an asking price - it is a mandated field in the data feed. The data set for the NZ Property Report is the complete number of all listings (houses, lifestyle property, apartments, units and townhouses) that are added to our site in the month. The asking price is calculated by taking all the listings and using one of the following from each listing (the display price (c. 60% of all listings) / the single search price for a listing that is an auction / tender / negotiation or POA (14% of all listings)  / the mid point of a search range for a listing that is an auction / tender / negotiation or POA (26% of all listings)).

 

We then undertake a truncated mean calculation to remove the top 10% and bottom 10% of all listings by price.

 

2. Realestate.co.nz currently has 1,040 subscribing offices representing 96% of all licensed offices. This results in a current inventory of 55,417 listings across these categories. At the same time Trade Me features 60,097 listings across the same categories. Of the total of Trade me listings approximately 7,200 are private listings which means that Trade Me features 52,800 listings from licensed agents.

 

Regards

Alistair

Given the large number of 'price by neg and auction tender etc' properties - the asking price in these stats is in fact:
the 'price at which the agent wants buyers to search for' rather than 'actual asking price.'
Which is usually lower due to the practice of buyer baiting.
Is it an actual dollar figure or a range?

I would reiterate that curreently 60% of all new listings are properties that have a display price, of the remaining 40%; 14% have a single search price (not displayed to the public) with the remaining 26% having a price range to aid searching (not displayed to the public).
Over the 5 years of compiling this data these ratios have hardly changed so the data remains credible for asking price.
It is useful to note that Auctions are a very Auckland centric selling method - at the peak back in November 20% of all new listings in Auckland were for Auctions - in the same month nationally Auctions represented less than 4% of all new listings

Appreciate that info.
 
SK

Went to a Barfoot and Thompson auction on the North Shore of Auckland this morning with a friend. Home and Granny with a GV of $590,000 sold for $721,000. with about a dozen bidders! Looks like the market is very strong to me. Like it or not we have passed the bottom of the "housing recession" and it will now continue to rise (possibly slowly) for at least the next three years, prior to flattening a little. That's my opinion and I've been around a few of these cycles in my lifetime.

Bit a free advertising...well done GJ...now tell about the auctions that failed...and the ones where vendors lost heaps...don't you hold back now you hear...

ooooooh you're not suggesting GJ is a B&T stooge are you?

What's a 'stooge'...I'll look it up.....oh it's Slang for A stool pigeon...err what's a stool?..."nursey, what's a stool?"

yeah and GV is a fairly meaningless yardstick anyway

Interest rates hit a new low in America today- 3.87% for a fixed mortgage for 30 years!  It's like getting paid to "own" a house!  
here's a couple of thoughts for ya:
Ya can't sell if your mortgage is higher than what you can sell it for, and still pay the agent- how many of those are not on the market, that would if they could?
interest rates have fallen since the crisis began- from 9% to 6%, yet still no sustained rally- only flat, at best, going down slowly
 
no meaningful, sustained improvement will happen until money is put to work into productive things, not sticking them into inanimate objects like houses, that produce nothing, but suck wages to support- especially interest

That 3.87% 30 mortgage rate is totally irrelevant. The only folk who qualify for those loans would be near the top 5% of income earners. For the average American Joe-in-the-street rates are pretty similar to here. Agree about investing in productive companies though. We had some idiot on here back when gold was USD1900oz spruiking the shiny stuff as if it was more useful than sliced bread. Can't remember the name, something like Crappy Tenter. 

While not being up on how Americans get their mortgages these days, I thought it was very common at one stage for ordainary ppl to get a 25 years or so fixed term?  has this changed?
regards
 
 

The floor in house prices is not the level at which first home owners find it affordable, it's the level at which investors find property to give a decent rental return. After all, a home owner only has enough capital to buy one house, so once they've purchased, their speding power is now zero. They need to save more, or pay down mortage to increase equity, or significant price rises before they can buy again.
I think what we're seeing in Auckland is the effect of migration from ChCh, and afforablility has improved to the point at which first time buyers can step in again. I don't think there will be a runaway market nor a crash in Auckland. The rest of NZ is still in the doldrums. Auckland will always be somewhat of a 'bubble' as it's a very desirable place to live.

I thought some people have already predicted this to happen. While demand for new houses is rising, there seems to be a lack of sellers and perhaps the low building consent granted has added to that. This is an important trend to keep watch of, because property prices are bound to fluctuate in response to news like this. Property investors would love to take note of information like this.
Derek

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