warns the housing market could stall if listings of new properties for sale don't pick up

If the number of houses being listed for sale doesn't increase, the inevitable house price rises that follow will risk the market stalling with buying moving out of reach for many people, Alistair Helm CEO of is warning.'s latest monthly property report, for March, shows the stock of unsold houses on the market dropped to its lowest point since January 2008, with 46,411 unsold houses, apartments and lifestyle properties on the market at the end of March, down 619 from 47,030 at the end of February on a seasonally adjusted basis. Nationwide inventory - measured as the number of weeks of sales in seasonally adjusted terms - dropping to 32.4 weeks supply from 46.7 weeks a year ago. 

Helm says the next three months will be crucial given property sales traditionally remain strong through autumn.

"Without the ability of the market to be re-supplied with new listings the outcome could be further rises in asking price and sale price or more significantly a stalling of the market as buyers become wary of a market getting out of reach of the majority of buyers," says Helm.

New record high asking price

The report shows 13,265 new listings came to market in March, down 194, or 1%, from February's 13,459, but up 1,018, or 8% compared with March 2011. The seasonally adjusted mean national asking price rose NZ$3,300, or 1%, from February to a new record high of NZ$429,865.

Just three regions - Gisborne, Wairarapa and Otago - have inventory levels above the long-term average giving buyers the advantage, Helm says.

"Contrast this with the same view of the market 12 months ago and there was not one region where inventory was at or below the long-term average (of 41 weeks)."

He says the message coming from the property market is that buyers are out there, and keen to get into the market whether they be first time buyers, mid life stage buyers or investors.

"Their eagerness to buy matched to availability of attractive financial support is however not being met with a consistent and sufficient supply of new listings. This scenario continues to drive this sellers' market, where it is clear those homeowners who are putting their property on the market are expecting to see a higher sale price as flagged by this new record level of asking price in March," says Helm.

The "attractive financial support" comment comes with three of the big five banks - ASB, BNZ and Westpac - having recently been growing their home loans with loan to valuation ratios as high as 95%, something that has come under fire from ANZ CEO David Hisco.

New highs for asking prices in Canterbury & the Waikato

The market stalling warning from, the official website of the New Zealand real estate industry, comes with the latest sales figures from the Real Estate Institute of New Zealand showing 6,168 house sales in February, up 51% from January and up 37% from February 2011. It was the strongest February for sales since February 2008, when house prices peaked nationally.

Helm says features in March included new record high asking price expectations in Canterbury - topping the previous record set in February - and the Waikato, above the previous record set there in December 2007. The Canterbury price rose 2% to NZ$383,395, and the Waikato price 5% to NZ$380,315. See more on Canterbury in Alex Tarrant's story here.

In Auckland the mean asking price rose 1% to NZ$559,369, new listings fell 3% to 4,375 and inventory dropped 10% to just 21.7 weeks. According to government valuer Quotable Value, house values in Auckland are now above the previous (2007) market peak by 2.3%.

ASB economist Jane Turner's views

ASB Economist Jane Turner notes that although new property listings increased slightly in March, they remain very low. Based on ASB seasonally adjusted estimates, Auckland new listings remained broadly flat while Canterbury new listings ticked up.

"Nationwide total house listings (seasonally adjusted) continued to decline, despite the small increase in new listings," says Turner. "This suggests housing market activity remained firm over March, and demand continues to outstrip supply. The number of weeks of inventory (based of recent sales rates) measures supply relative to demand, and this also continued to fall over March."

She says the housing market has benefited from a small pick up in demand over recent months, with low interest rates and increasing household confidence contributing to the increase in activity.

"Nonetheless, the overall level of demand remains relatively subdued. Overall population growth remains weak as New Zealand continues to record net migration outflows and households are still somewhat wary about high debt levels," Turner says.

"However, very low supply of housing available for sale is placing pressure on the market, particularly in Auckland. The housing market is tipped in favour of sellers and has resulted in rising house prices over the past year. An increase in housing construction over the coming year, including rebuilding in Canterbury, should help alleviate some of the pressure on housing supply."

(Update adds comments from ASB's Jane Turner).

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Right now its cheaper to pay a mortgage than rent . (in other words its cheaper to rent from an Aussie Bank than a Kiwi Landlord ).
Naturally demand will go thru the roof , and now we are seeing houses at pre GFC boom prices, driven by a cocktail of cheap money and wholesale immigration from India and China boosting demand .
Beleive me , there will be unintended consequences.

Not according to The Economist. Apparently house prices are 68% over-valued when compared to equivalent rental. House prices are 20% over-valued when compared to income affordability.

That means rents are undervalued.
Not that houses are overvalued.
Think about it.

LOL, think? I see no evidence you are....uh, no.....wierd, or no, deluded...So no matter what by your estimation we are not in a property bubble, its just that the renters are getting a cheap ride....the fact that renters couldnt pay is neither here nor your eyes.......they just need to pay more to justify paying that price you paid for the property. Not that you are making stupid business decisions due to greed....
This time its different....just keep repeating that.....
Or throw in Hugh P and his mates contention that there is no margin in developing because there is a limit of what punters can pay for a new house....and costs are so high there isnt enough margin to develop....
This time its different.......
Or that retail is paying commercial rates that are way over what is considered sensible....I think from memory it was 14~16% in NZ v 11% that is the norm elsewhere...mean while we watch the USA malls implode under debt as retail outlets give up.
You and Augusta should both be chanting at full volume by now, "this time its different".......

Tax isnt the problem, our tax is amongst the lowest in the OECD, so its something else, expensive energy.
Wealth is based on energy availability declaines so will our wealth/lifestyle.

Somehow I think all of your tenants would leave if you tried to increase their rent by 47% :-) Unlike the irrrational exurberance of the highly leveraged property market, rents tend to be governed by what people can afford to pay.

They'd probably 'accidentally' leave the bath running overnight, too.  People don't take kindly to being blatantly exploited and screwed over.
Damn, be a bugger to rent the place at a premium with mouldy floorboards and mushrooms growing out of the carpet.

I would hope no one would do that....thats sad.
I went through my home account spreadsheet, to look at the impact the current average rent would be ($500 going/gone to $550) I couldnt really do it....out of my leauge.  Yet bigdaddy etc think a fair return is $800.....I couldnt really even manage $500 a week....let alone $ the chances of the number of presently number homes rented out at $550 all making $800 is I think many ppl earn enough to pay $3200 a month in rent?  the average wage is about $45k?  makes no sense.

Most people wouldn't.  But if it was a case of one of the many greedy and unprofessional landlords out there gouging the tenants and openly gloating about it ... well, you couldn't blame them for at least thinking about trashing the place.  Arrogant owners who think they have all the power should think again.  They're not invulnerable to guerilla tactics.  The smarter ones will get their heads out of their arses and aim to retain good tenants/customers instead.

Indeed, ditto house prices.....entry level / first homes are at that price because that is the max ppl can afford....

Yes riots on the streets of Grey Lynn are imminent.

South Auckland is the place to watch....that's the Brixton or Auckland / NZ.  But Im sure you are not that dumb....

does he not know that buying a house is already out of reach for a large and getting larger portion of our community.

We need to get the message that Kiwis are not wanted in their own country and are being "encouraged" to leave to make room for bunch of new folks.  Perhaps an advertizing campaign might help, or an emmigration subsidy?

All the talk about housing, rents, affordability, multiples, MULs, MUDs, town planning, its the Baby Boomers fault. It's comparable to two frogs having a conversation in a boiling pot. They talk about everything other than why its getting hotter. Except it's a lot of frogs in a large cauldron that is slowly getting hotter. As Ngakonui Gold says: buying a house is already out of reach for a large and getting larger portion of our community.
Let me tell you two true stories. I have no animus in this so there is no bias. Just factual. You work out the parable.
Once knew a native Chicagoan, about 1980, (pre-1987) who, living in Chicago, witnessed two murders on the streets close to home. He decided then to pack up his family, leave his roots behind, and search for an idyllic, peaceful, tranquil place, as far away from the society that was evolving around him. He came to New Zealand. He was young and wealthy with approximately USD $6 million which translated into a lot of NZD at that time. He purchased a farm just north of Albany, possibly around Coatesville. The price of NZ housing and its affordability was not a consideration.
Think about that USD $6 million and what it's worth today and what it would be worth if it was still in the US and the comparative Capital Gain taxes betweeen the two jurisdictions.
Same person. A stock trading guy. Had some software that monitored share prices on a daily basis. He was watching a particular share which caught his attention. It was going up. So he bought some. Next day was up again. Bought some. Next day went up again, so he bought some more, and continued doing so for some weeks. Eventually he received a phone call from the Company Secretary wanting to know if he was mounting a take-over bid for the company. Why he asked? Well, apparently he was the only person buying.

Property-wise same thing is still going on vis-a-vis James Cameron, Kimble DotCom just to name two. Price no object.

so Helm is implying that price rises may be self-limitted.
ie. limited listings push prices up, but then further gains are prevented as potential buyers can't / won't go any higher  

In which case the market does not stall - prices adjust to meet demand.

Even the sky isn't the limit for house prices in New Zealand ...... this market is going to infinity ........ and beyond .........
...... ummmm , just remind me though  , have youse guys had mega wage rises lately , to pay for this lot ?

You don't need a pay rise when you can load up on free money.

Take a leaf out of Julia Gillard's book , and create a super profits tax to milk the dairy industry ;  then biff the proceeds into first home owner  subsidies and " affordable housing " developments ........
....  what could possibly go wrong with that !

You're having a "mega wage rise" if you are a long-term property investor...rents are on the way up. 

Although 32.4 weeks supply is at the bottom of the curve this graph from Calculated Risk, which shows the months supply at years end in the USA since 1982 shows the whole US market had between 4 and 5 months supply for the years
1993, 1994, 1995, 1998, 1999, 2000, 201, 2002, 2003, 2004, 2005
The point being not an unheard of supply situation.

Come back Nicholas Arrand...lets be hearing from ya!
Site is gone - he must be busy at open homes.

I thought that guy I saw the other day was familiar :)

Word on the street is that x & y kiwi's are getting pi$$ed about being out bid by immigrants when trying to purchase property. And that boomers are hoping to cash up the big family home to wealthy immigrants achieving top dollar. All parties are allowed to but still leaves the fact the x & y's are getting angry. 
X & y's rent the baby boomers investment properties. (Good for baby boomers). Baby boomers get old and die and the immigrants hold the properties value. This in turn out prices the current x & y's and future generations of kiwi's from owing a house & shelves  them as renters for life.
Immigrants can only buy new builds (for the first 5 years in NZ). This increases the supply, activiates the building sector & in turn doesn't sky rocket the current stock (house) prices.
Negative consequences;
1. Baby boomers quite pi$$ed.
2. ..... 

And as the immigrants are the only ones that can afford the new builds you get lots more CHowicks

Moratorium on immigration for 12-24 months while we have a proper debate about how big a population we want/need and its implications for the ethnic make up of the country, the impact on our environment, property prices and the political/cultural ramifications. eg do many immigrants have more conservative views about law and order, individual rights, treaty obligations, environmental damage.

It seems just as likely that the immigrant buyers over-paid for the properties and that they take a hit when they can't find buyers themselves down the line. Also just to point out that the fact that some boomers can sell out doesn't mean that all or even the majority can.
Just because we might be irritated, that doesn't mean we are stupid. Frankly if you are thinking about the structure of the housing market, I think gen x & y should be allowed to propose the solution to their concerns, not to have such a hypothetical solution dictated to us.
Sincerely gen x.

Property prices relative to income in Auckland = London. London 20 times more people. All baby boomers know to invest in is properties. Thats why they will not let it go, and the banks won't let it go because they are making a lot of money off the back of mortgage borrowers. Property doesn't always go up guys, its a false premise that has made a lot of people broke. Nowadays to buy a good family home it would cost me half a million dollars, probably more. You baby boomers have basically made the ambitious people in your country, the people with the skills, money and hunger to do better, move on to another country. Which most of my friends are doing at the moment because there is no promise in NZ for younger people anymore.
It is baby boomer greed that has gutted our country. A house sold next to my friends house in an affluent suburb in Auckland. A week after it was sold, some nosy baby boomers actually walk down the driveway to have a nosy around, quiz my friend asking him how much it was sold for and does he think they will sub-divide etc. Seriously you had it tough back in the day, I understand that, but making it tougher for other people so that you can line your pockets is just shocking.
May you live in interesting times.
Rant over lol

X and Y are looking at a huge bubble that is set to burst, if they have no mortgage ie rent I cant see them being but happy, if they have a 95% mortgage they are stuffed.......
Maybe X and Y should consider working elsewhere for a few years earning better money and come back when the housing market here has imploded...though just where they will get jobs is an issue.

whilst they don't have the best forecasting record in the world here's westpact on house prices in the next few years for what it's worth:
But importantly we don’t expect rising house prices to persist.
Interest rates will not stay this low forever, and house prices in
New Zealand remain stretched relative to incomes. We’re
forecasting flat house prices in 2013 and a 1% fall in prices in
each of 2014 and 2015.

with 2% inflation...if they make 5%, its net 3%....after that, 6-8% loss in three years....I dont see a huge reason to run into the market buying, based on that.  Given Westapc and indeed banks are overly optimistic and neo-classical in outlook I just have to wonder what the real numbers will be.....

5% across the country as a whole probably.
Auckland is heading well into double figures again this year.

Helm would say there needs to be more listings.
Blatant self promotion.
Fully agree though, the volume is very weak considering the low rates.
We're on the road to nowhere.

A house here cost's about the same as a new car folks so head on over!

It looks a lot like the US in 2006.  Low interest rates and a dearth of sellers, followed by yet lower interest rates (now 3-4% on 30 year fixed) and a LOT of sellers.  Then baby boomers started retiring...and selling.  We all know how it played out/is playing out. 
Talking to real estate agents, the word is that the main thing that is selling is first time homes, not mansions.  Under $500K selling- to families.  I predict that this current lot of sales will spell the top for the market, follow by a lot of air leaving the balloon. 
If you have a look at Harry Dent's research, you will see that NZ is an anomaly.  The retiring baby boomer problem doesn't exist here till 2020.  Interestingly enough, according to his research, Australia should have already fallen off a cliff by now, just like the US, yet hasn't, though the cracks are beggining to show.  Methinks the prop is the mining and resources, same as Canada.  Perhaps the difference is, like NZ, Aussies only know to put their money in property.  In the US, they invest in stocks, and property is more of a distrac tion. 
The demographic charts are in this book- China falls off a cliff in 2015, and US continues its current path till 2022.  Most countries in the world are in Demgraphic contraction- like Japan since 1990- the buyers have left the market.  NZ is the exception until 2020, however, methinks that some year soon, boomers here will start thinking of "harvesting" or selling for cash, and buying interest bearing instruments to fund their retirements.
The real issue is that governments don't make a market.  People do.  Governments can only print money, or indebt it's people, making the problems worse.  Some speculate this is the real lie behind "demoncracy," because the debts never die, like when a king dies, the debts die with him.  With democracy, the debts get handed down.  Governments can only print money, punishing savers by weakening their spending power.  
Printing money only makes money worth less.  It does not force people to spend, at least at first.  It creates inflation, and rising prices in things like groceries and fuel, things we are see now.  If property kept up, we'd be paying 30% more- just like groceries and petrol.  This causes people to tighenen their wallets even more, at first, for a while, until hell breaks loose and then you have hyperinflation, as people wake-up to the notion that they had better spend their money, and get rid of it, while it still has purchasing power. 
Keynes called montary stimulus "pushing on a string"- you can put money in people's pockets, but you can't make them spend it.  The answer, from history, is to keep printing until they have no choice.  So yes, property might be better than owning paper, but your garden might be worth more than the "bricks and mortar."  Let's see how it plays out.  We will know soon enough.  Renting makes sense for now, but eventually it may make sense to get in as much debt as possible, knowing that money printing is "going to infinity".  Might be time to lock in those interest rates for a 5 year run.  My concern for us is that we won't print money as fast, and we might have a massive deflation, making our currency far more valueable than others, making our debts (like mortgages and rent) harder to pay. 
If you look at the German inflation (a book), there is a chart that explains it nicely- we shouldn't be worried so much about property, but rather food.  See chart for "expenditures of a 3 person household"
Scroll down to "the price of unvirtue"- the US dollar, at the time was tied to the price of gold
As the BRICS nations form their own monetary exhange union, methinks it be in anticipation of the end of the US dollar as a reserve currency, things could get interesting as our #1 and #2 customers are the US and China.  So where does that leave us?  Could get messy, indeed. 
Retirees buy smaller homes when they retire- sell the mansion, buy the beachfront condo

Keep renting, Happy Renter, and miss out on low interest rates & the ability to pay down your mortgage fast (last 3 years of low rates).  Keep saving hard into your retirement as you will need an extra 16k per year in retirement for your rent  (as opposed to those who are by then mortgage free). 
House prices in NZ are not going to crash as your own personal home is the only safe savings vehicle that is not taxed, debased or run by swindlers - sensible NZ-ers recognise that instinctively.

"sensible" "instinctively" LOL, utter rubbish, ppl should be using their logic, doing reearch and using their intelligence and not gut duh.....sounds like you are trying to justify to yourself your bet....and it is a bet...
Trouble is, housing isnt safe, its a bet with a small gain/loss (maybe) right now but potential for huge loss...,.....If house prices significantly drop, which I think is a certainty, you could end up wth $100k+ of debt if you buy today...or wait a few years....2, maybe 3 and see where we are at.  Its an asymetrical bet, ie house prices for first homes are stagnant...compared to the risk of drops it makes no sense....
Then of course you assume rents at current levels which are crazy + inflation adjustment....when house drop a lot so will the rent demands....for me I think we will see a 60%+ loss and rents will drop to reflect that.

I couldn't care less if house values dropped 30%, as this would be accompanied by low interest rates, lower council rates. Mortgage debt is to be paid down regardless.

You may not, but many ppl with 95% mortgages would...a $300k house at 95% is a 15k deposit that is $ $85k neg cant sell it, if you lose your job, you cant move to another one in a different city.  At that point you are looking at possible do employers look at that? 

Exactly.  New Zealander's should familiarize themselves with the term "strategic default."  I think it's happening right now, but you won't hear about it in the news-yet.  And I agree, it's the size of the debt that matters, and even if you are paying a "low interest rate", isn't an investment supposed to pay you for carrying it?  If your line of logic is "well, I need a place to live" then you are being dishonest with yourself, because you rent cheaper than "own"  (plus insurance, plus rates, plus weekends spent doing maintenance, that matters).  The difference is still substantial, and your increase in property value must increase by that amount every year to justify paying the difference. 
Just because you are comfortable with the prices as high as they are does not mean that other families enjoy the same priviledge.  As they lose their homes, that adds to inventory, whether seen or unseen.  I believe there is a lot of inventory we are not be told about, or being reported, but we will know about it soon enough.  The "shadow inventory" is growing. 
If a person cannot sell his home because he can't sell it for what he owes, that home will go back to the bank, eventually.  It takes time to play out, but i think it is playing out exactly this way now. 
You also cannot dismiss the macro economy.  If the NZD keeps getting stronger, that spells deflation for us, and fewer NZD floating around our economy.  I'm seeing a lot of vacant commercial space these days, and businesses shutting, even those that have been around for a long time.  Where are the jobs going to be coming from? 

Individuals like ourselves are unlikely to solve/influence the macro-economic problems of our time.   There have always been major economic crashes, woes, etc etc  -  look at the last 120 years.  
Yes I agree with your  "well, I need a place to live" then you are being dishonest with yourself, because you rent cheaper than "own"  (plus insurance, plus rates, plus weekends spent doing maintenance, that matters)""  -  and I acknowledge the slightly higher overall costs of owning.    The weekend work of course can be strategically used for free improvements which enhances the value tax-free, something that renters cannot achieve in their spare time.
However, generally your rental property will be inferior in quality and location as your choice is thinner.
You still have not addressed your retirement  -  how will you keep paying the rent throughout your 65 to 87 year span?
Yes, if values crash then we can enjoy the 'underwater' experience.  But if you buy modestly then a little water therapy won't do you any harm - just keep paying your modest mortgage,  you've done the serviceability sums anyway.    OK -  you lose your job (as well as being underwater), well you still have to live somewhere while between jobs....
Let's face it  -  you're really not that happy paying your hard-earned money to the landlord are you?

Low council rates? these are going up at 4 to 5% per annum,  please explain.

Well, we'll see when your 60% crash comes...rates being calculated pàrtttly on value.
Re underwarter : if you have your job, did your sums on serviceability, intend to stay in your house for 7+ years, then your mortg payments are no worse than rent - prob lower

uh, Im 99% sure rates are based on what the council needs and then on a calculated on a progressive relative value (unlike the USA) So no, Im pretty sure even if we saw a 60% drop in house values, rates will still stay as they are....(or continue to climb at 4% annum) all else being equal.
The point Im mentioning neg equity is there is a risk factor, in 1992~94 I saw a lot of ppl in London lose their homes or end up in huge debt, 10k sterling minimum...if you need to move you could lose huge flexibity/liquidity, now sure some ppl might see 7 years as easy. For myself I have only had 2 jobs longer than 7 years in my entire life, most jobs in NZ have been < 4 years.  Ive also had to move alot to keep working.......

Been working for same org for 22.5 years! Various jobs within & picked up Masters & doctorate along the way... might get a real job one day.

Sounds like they own you.  When they say "jump" do you ask "how high?" 

Let's just say when you enjoy what you do, then you never really have to work another day of your life....   

I have seen the movie - thought it was quite good. (Yes, Man)

Media Release
11 April 2012

Christchurch rental supply under huge pressure 
Tenants hunting for rental property in Christchurch will be finding it tough going at
present, with supply down 40 per cent compared to a year ago.
Brendon Skipper, head of Trade Me Property, said supply had started to contract as far
back as September 2010 and had never recovered. “When the first major earthquake struck,
we saw supply begin to come under pressure, and the February 2011 earthquake exacerbated
the shortage. Supply has continued to plummet, and the current level of rental inventory
for the city is the lowest we have seen for years.”
As expected, demand was extremely high in Christchurch too, with landlords fielding a
massive 42 per cent increase in the number of enquiries from potential tenants. “It is a
classic case of supply and demand, and is now flowing through to rent,” Mr Skipper said.
“We’ve seen the average asking rent go up 15 per cent in Christchurch, well ahead of the
national increase of 4 per cent.”
His advice for prospective tenants was to have all references, bonds and forms at the
ready, as landlords had the luxury of choosing tenants who were low maintenance and easy
to deal with. 
The national picture
Elsewhere, the rental picture is much tamer. Overall listing supply is down 7 per cent
across the country, with Wellington (down 12%) and Hamilton (down 9%) prominent. Supply
remains strong in the student cities of Palmerston North (up 13%) and Dunedin (up 17%),
and demand is steady.
Across New Zealand, the average asking rent was up by 4 per cent compared to a year ago,
underpinned by Christchurch but also reflecting a 7 per cent increase in central
Mr Skipper said although more listings were coming onto Trade Me Property, they were “not
sticking around” for long. “So far this year, about a quarter of all listings in
Auckland, Wellington and Christchurch were onsite for six days or less, which is great
for landlords but another indicator of that strong tenant demand.”
A prediction
Mr Skipper said there were signs that pressure in the rental market was pushing
prospective tenants to consider the option of buying a house. “Looking at our property
for sale activity, we can see demand from potential buyers has increased by 13 per cent
over the quarter, while sales inventory remains flat.”

Increasing Rents =  pressure on tenants  =  tenants become home-buyers =  house prices are maintained.   A kind of economic homeostasis.... 
Where is this House Price crash all the bloggers were ranting about for the last 3 or 4 years?   My RV just increased 5%.

Way to kick a people while their down, I bet you guys froth at the mouth when you hear about increased rents in Christchurch. Read the parable of the good samaritan, you'll probably come out a better person.

The crest of any boom is usually marked by increased hype from the spruikers and speculators as they become increasingly desperate to find someone else to sell their over-priced asset to. Hang in there happy renters, the correction wll come but it may take some time. 

Either way, homeowners win. If prices decline then they will be
accompanied by low interest rates. If prices increase then their equity increases.
I am trying to be the Good Samaritan, to help you to see through all the falsehood of the 'stay renting' heresy. So you can prosper as a humble home owner.

Homes are harder to buy now than they were in the great depression. Reason being it takes 2 incomes to live now instead of one. For this reason I will not buy until it makes absolute financial sense and when the world economy is not teetering on a knife's edge.

The world has always been teetering on the brink. We only continue our lives by a level of faith. Do we just down tools and wait for Armageddon? Why not buy a small modest cottage and pay down over 10 years while rates are so low?

Because it makes no sense to buy it for say $200k and find its worth $100k........that is a huge loss and highly illiquid.
Sure some ppl have and are lucky to have job security. Many do not or they have the illusion they do.....Ive seen 40s and 50 somethings lives devistated because they thought they were immune to the pain others were seeing....and found they were not.
The stability of the last 50 years has gone for ever...the next 50 will not be like the last.

Because by the time I'm finished paying back the loan I've paid double the asking price for it. You tell me where there is a "small, modest" cottage in Auckland for around $300K. Nowhere, because we have borrowed to the hilt against our future incomes with both parents working. Who looks after the kids? No wonder divorce rates are so high these days.

These days, a quarter of a million dollars will buy you a cheap townhouse in Auckland. 20 years ago $250K would have bought you something incredibly reasonable. Nowadays its just cheap junk, with very little value.

1.You gotta live somewhere all ya life
2. You gotta pay for accommodation
3. Unless you're saving the equivalent of principal repay + deposit catchup, you're gooing backwards
4. As long as we have immigration & reasonable economy, people will desire homes
5. Forget RVs, just focus on your 15 or 10 year endpoint - freeholdness
6. As you make improvements (low cost), on weekends, you get a taxfree caapital gain.
7. Its called positioning -

Muppet, 20 years ago 30cents would have bought you a latte. Times change, its not just real estate.

Your equation does not necessarily hold water there Mortgage Belt....but I guess you were being flippant so no biggie....another outcome is= further mass migration to Aus.
 On the crash you refer to....inarguabley in certain areas and regions you are correct so little point in wishing you were not.
The maintenance of house prices is underpinned/ underwritten by a banking system too far in to get out coupled with Govt. policy to support  those who have overvalued ..over lent...over committed themselves to an industry now propped up on hot air and foreign buyers with deep pockets.
 While I'll concede to you...."the housing market"...has not taken the predicted pounding....i would not conceed that it has any real justisfication to have done so.
I will give an example if required . 

Real justification argument could be applied to the NZ$ (too high), price of a Google share, hotel accommodation, petrol price, groceries, electricity, broadband rates -- they're all overpriced cf to fundamentals, but .... markets not listening, doesntwant to hear you (still finding buyers!) As I walk to work, I'm amazed at the no of cars on the road - petrol still not a barrier for many.

In Auckland..areas such as Epsom the demograpics reflect immigration by Chinese Nationals to be the main factor in sales and indeed upward trend prices...those selling are going somewhere I take it ,and therefore form a new demographic pushing prices up or holding prices in other areas where they can freehhold with cash in their pocket.
 Are the real estate and Banking industry's new best freinds adding value to our economy..? Are they creating anything other than overinflated cost of housing.......if you cannot see that  the economy is stagnant while the cost of living is rising  aided by external forces....then you cannot see what the complaint is. 
While the fundemantals may have a role,....... that role will become converse as real inflation takes hold.
Internally the high dollar  is" just wallpaper on a stinking ediface." to quote  a chappie over at 90 at 9.

Our International student market provides a hefty income to the govt & unis - who then ay teacher / lecturer salaries.... benefit economically to nz.

I think to be fair M.B. you overstate their benefit to the economy in that regard.....but if your good with it then...I'll leave it at that.

It isnt ove runtil the fat lady sings......that isnt anytome soon...3 years odd.
besides that, to start with Chch Eq was an event you could not plan for in terms of saying next year we will need 2000 more plots ready for new homes as 2000 homes get unusual price spikes in Chch, or Auckalnd or Wellington brought on by un-usual events cannot be taken "seriously"....I find these interesting because I wonder how much of a job base there will be in Chch......I suspect Chch has taken a terminal hit that dont justify buying at inflated prices.....
In terms of drops medium/long term....apart from some select areas NZ wide prices have been static or dropping after inflation adjust for 3+ years.....and that includes the ChCh event....
Short term, NZ's un-employment has not climbed significantly, yet due to the GFC unlike the USA where its at least x2 ours....if not x2.5....but this isnt over yet...
The EU has held together so far, I sold my shares 21months ago so pickinga short term event is difficult....
Fundimentally we have,
1) The BBs retiring.....with the bills and expectations....they will have to sell down and a house is only worth what you can get for it.
2) Then there is the GFC which isnt over yet by a long way, in fact its just beginning.
3) Then there is Peak oil which will take huge money of of the system.
These all mean a lot less money and a lot less shrink our GDP house prices will drop....its just a Q of when and how far....10~25% for 3 to 6 years seems possible....
RV is a dubious measure at best IMHO.

You are like a blind man feeling an elephant.  Which part are you feeling?  Just because your little area of the univierse seems fine doesn't mean it will stay that way, or it is the same for everyone else.  Yes, armageddon, of one sort or another, is just around the corner, usually.  However, there are, in fact, some very ominous things going on in and between countries with their money and debts...and it affects our ability to get mortgages. 
Your so-called "equity" is totally depndent on people getting mortgages at low interest.  Interest rates gave already dropped 30%.  That is the ONLY reason that property prices haven't gone down more than they have.  That and the earthquake, reducing housing  inventory. 
Are you betting on more earthquakes?  That banks will continue to lend ad infinatum?  Can continue to find suckers to throw their lives into neverending debt?  Good luck with that. 
Here's another quiz, if you think you are so smart:
What do you truly think is the more likely of the 2 to happen, when PRICED IN REAL MONEY (ie:gold.  For mortgage belt, who is obviously a believer in real estate, "gold" is a yellow metal that has a known history of being used as money for thousands of years, is portable, convertable, and accepted in most countries of the world- but most importantly, adjusts in value when money gets printed)
Which of the 2 is more likely to happen, when priced in gold?:
--house prices go up 25% ?
--house prices go down 25%?
Do you really think we will have repeated destruction of property, like we had in Christchurch?  Are you going to bank on repeated catastrophes to reduce housing inventory?  Do you really think that the squeeze on available property will go on forever?  Good luck. 
The same thing happened after hurricane Katrina in 2005, all surrounding property prices exploded, then crashed a couple years later. 
A corrollary to this question is "how much money will the government continue to print to 'solve' our money problems?  How many billions was it last year?  $18,000,000,000?  What about those countries that lend to NZ?  
Your name suggests you know a bit about mortgages, mortgagebelt.  Why don't you elucidate for us just how NZ banks get their mortgage money from the international markets, and then share with us how we will be so well insulated from a Euro currency crisis?  Will a bank in europe continue to invest in our mortgages?  Well?  
Or does the tooth fairy also set mortgage rates? Give out manna of everlasting mortgage debt for any and all takers who can fog a mirror?  Eh, mortgagebelt? 
Did you even look at the chart for the German inflation, that I gave in my earlier post?... to see what happens when money printing continues?  I bet you didn't, because you don't eat, apparently, but rather fondle your house, which you also lovingly refer to as "your investment." 
If you've worked for someone your whole career, then obviously you haven't swung your axe in the real business world, running your own show, instead choosing the relative safety of a "job."  There are times when what worked it the past doesn't work any more, and how are you so sure that now isn't one of those times?  Or have you deluded youself into believing that the world owes you a living?  If it all changes will your answer be to get more schooling?  Did you even learn anything from your degrees?  Or do you take comfort thinking you are somehow smarter than everybody else?  Well, sorry to say it, but you're not!    As they say -PhD  -"Piled high and Deep" 
That's why I bet against property- when everyone calls something "absolute truth", like "bricks and mortar" it is usually time to start betting against the crowd, moving away from it.  Think back to 1987.  Everybody thought stocks were the place to be.  It ended in tears.  Same for property, given time.  All prices revert to the mean, even if defined in terms of purchasing power. 
Obviously you haven't thought about what it is like to have a million dollar house....when a million dollars buys you a loaf of bread.  And it wouldn't be the first time it's happened.   Would you win in that situation?  If your response is, "well, I didn't lose any money" to which I should simply stop, because I'm arguing with a fool, and it's a pointless exercise.   
Good luck following the cult of Ollie, unless this is another Ollie under yet a different name, or should we call you "Big Daddy?"  I think I'll sit this one out. 

And do what?  Wait for the end of the world?  Polish your Gold?  Ring your landlord for permission to plant an apple tree? Plan more hiding places for your investments? 
If your end scenario takes place, there will be no hiding place for anyone - renters, owners, business owners, salaried, so don't worry about it. Enjoy your life one day at a time.

typical short term thinking.  This is why you, and probably most people, are so unprepared if what I am seeing even plays out half as bad as a worst case scenario.  At least we live in a food exporting country.  That matters. 

People are still eating out at restaurants on a monday night - shock horror - and ordering off the wine list - when it's not even a special occasion!

Ha ha, don't they know that the global collapse iss on their doorstep. They should be at hhome rasing chooks.

With respect M.B....some of your thoughts on the matter are worthy of note no need to resort to puerile tends to deflate any value you added.

Ok, humour (admittedly poor) contravenes policy... along with any advocacy for home ownership. You're not our IT Manager by any chance?

Now ya see ...! M.B. that's funny.!.....No i'm not , but I'll bet he's a riot at the Friday night shit shoot in the

Nothing wrong with home the right situation....however right now when I see a x2 overvalue with some serious downward pressures then there is a risk that there will be severe long as ppl are aware of the probability.

There is certainly no intention to spruik here, just trying to give a bit of balance to the constant theme on this site of an impending real estate crash. This has been talked about for 3 years now and all that has happended is property prices have stablisised and in some regions strengthened. I dont think real estate is cheap in NZ, but the current conditions seem to indicate that we will see a continued recovery as opposed to a crash. Thats how I see it anyway.

You should be an economist.  I hear they are hiring at the Lehman brothers.  You and mortgage belt can have cubicles next to one another.

Euro to collapse by June starting with Greece, then domino.  Technically, the default has already happened, with the whole "a default is not really a default" fiasco that jsut happened, and Greek bonds took a 70% haircut.  Many believe, myself included, that they will cut loose and go back to the drachma.  Where will your mortgage funding coming from then?  Isn't the majority of mortgage lending a result of overseas funding?  Aren't most of our banks Australian?  Did they, or did they not, just get yet another ratings cut?   That spells a number of things for people who are paying attention.