Barfoot and Thompson reports 998 properties sold in July, up 28% from year ago; Average price up 11.5% to record high NZ$591,444

i have 25 acres in nelson of sudividable approved land , not one offer in four years at qv.

so what does that tell you?

Presumably this doesn't mean I can crank up the value of my house by 11.5% when calculating my net worth. 

More sales,higher prices and best of all lots more commision.

Life couldn't be better.

Definitely not a bubble blown by artificially low interest rates, however, so sleep tight RBNZ ... New Zealand, land of the million dollar mouldy dog hut. 100% pure idiocy.

This is reminiscent of the Iraqi Information Minister in the 2003 Iraq war. “There are no American tanks in Baghdad!" when there were tanks rolling in the background.

“Prices are not spiralling up, there is no property boom!”

We all have to do our bit to prop up the Australian Banks. I feel honoured to work for them as do mots New Zealanders I am sure.

Vancouver,Seattle  and Sydney also have experienced crazy house prices, what is it about Anglo Saxon Pac Rim cities?

Wow - 11.5% in 12 months - That beats a taxed term deposit that nets you 3% at best! 

Anyone know what Barfoots average price was in July 2008 or July 2009 - suspect prices are 20% higher than mid recession - quite a different scenario to the 20% to 30% drop many were predicting a while back eh!

Great news lets hope the price just keeps escalating :)

If some one could explain the logic of why the western global economy is contracting due to over borrowing, yet property prices continue inceases?

Its quite confounding and would appreciate someones logical theory on the subject?

"Central Suburbs' (Ponsonby, Grey Lynn, Mt Eden, Epsom, Remuera and Parnell) average price was NZ$739,414, up 17.5% from July a year ago"

Perhaps an early friday glass of fizz is in order.

Boom! Not bad for winter :0 Roll on summer

Hypertiger

 The economic fundamentals in the NZ economy have not changed from a year ago , so this rush of activity in Auckland  is down to the same  three suspects ,namely 1) cheap money , 2) supply constraints (due to costs of subdivision resource applicationsetc) and 3) excess demand from renters turned buyers , immigrants and Christchurchers. 

Unless supply constraints are dealt with this problem will only get worse.

another sad but bleading obvious example that the OCR is a blunt tool ESPECIALLY when it does not include house prices in its measure of inflation - in this example its like swinging a baseball bat around a lounge full of fine china to kill a mosquito. Low rates is NOT helping our businesses, and neither is mass immigration and loose foreign investment rules. NZ is not for NZers any more - its for speculators, banks and foreigners.

What a farce!!

so more sad news for Auckland and its future (with the exception of speculators)

Even more insane house prices mean even less money for people to invest and / or spend in the local economy

Even more insane prices make it that much harder to attract / keep key workers in KEY areas of our society such as education and healthcare

Thanks to the National Govt for doing nothing and helping to ruin the country's future

(Note: Barfoots are reporting AVERAGE Prices, median house price increases are likely to be significantly less)

From Q+A Proffessor Paul Spoonly:

JESSICA – Are we growing as fast as we should?

PAUL – No, we’re not, but then all countries in the Western world are in decline, and we are what’s called premature ageing. So not only are we getting a lot more older people – that’s in size – but as a proportion of the population they’re growing because, of course, we’re seeing quite a few young people leave the country.

JESSICA – Let’s talk a little bit about that population spread. Why are so many people moving to Auckland?

PAUL – Well, Auckland – there’s an agglomeration effect, so the bigger Auckland becomes, there more attractive it becomes. It becomes more attractive economically, but it also becomes more attractive as a place to live. And so we’re seeing the sort of perimeters of New Zealand, the regions, beginning to flat-line, so they’re not growing, and we’re now beginning to see the first of regions beginning to decline.

JESSICA – How is Auckland growing compared with the rest of the world in terms of a city?

PAUL – Well, just to talk about New Zealand for a minute – natural growth, that’s the births over deaths, is still the most important factor in New Zealand’s growth. But in Auckland, our most important factor is immigration. So we are one of the major destination cities around the world, and you can see that in the make-up of Auckland – the number of people who have been born overseas.

JESSICA – Let’s talk about that immigration mix, particularly in a place like Auckland. 40% of the population is born overseas. What is that immigration growth looking like long term?

PAUL – Well, the first thing is that 40% puts us right at the top. I mean, there aren’t many cities around the world that have 40% of their population born overseas. I mean, Toronto, Vancouver, but really Auckland’s right up the top there. Increasingly, if you look at the figures for the last year, we still attract people out of Britain, but we’re also seeing very large numbers coming out of India, and the growing population is the Filipino population. So we’re what’s called a super-diverse city, so we— immigration’s very important to the city’s growth, but it’s the diversity of that immigration population that’s really important, and it marks Auckland out. I mean, people tend to think of Los Angeles or London. In fact, Auckland’s more diverse than those cities.

JESSICA MUTCH INTERVIEWS PAUL SPOONLEY

Rod Oram:

Fast population growth over the past decade has strained infrastructure, boosted house prices and reduced the quality of life in the Auckland region.http://img.scoop.co.nz/media/pdfs/0705/RMA__Oram_Paper_May_2007.pdf

Savings Working Group:

http://www.stuff.co.nz/.../Government-policies-blamed-for-house-prices

PAUL – Well, firstly, it’s a doubling. So we’re at 600,000, so we’re seeing the over-65 double. I think the second thing which is really concerning is what’s called the dependency ratio, which is the ratio between those who are in the workforce and those who are dependent on the state in some way. And we’re seeing that decline. There’s a big bite out of the younger New Zealand age groups because they’re going. I mean, 150,000 New Zealanders have left this country since the start of the economic recession, and that’s a huge concern. So we need people to stay here, and we need people to be working here to support that dependency ratio.

...

Australian Productivity Commision:

THE case for higher immigration as a driver for economic growth is far from proven, as is the notion that more immigrants can counter the negative effects of population ageing, the Productivity Commission says. 

http://www.theaustralian.com.au/national-affairs/immigration/immigration-link-to-economic-growth-yet-to-be-proven-says-productivity-commission/story-fn9hm1gu-12261

A great sucking force can be felt around Australia, siphoning resources southwards, down the hungry throat of Melbourne. Australia makes, Melbourne takes.

''Melbourne is a parasite economy,'' says Bob Birrell, the doyen of immigration and population studies in Australia. ''Increasingly, the fiscal dividend from Australia's mineral boom is having to be distributed to Victoria to pay for the needs of Melbourne's population boom. That's why the Victorian Premier, John Brumby, is constantly having to go cap-in-hand to the federal government for assistance.''

http://http://www.smh.com.au/opinion/politics/the-yarra-monster-is-killing-us-20100822-13apt.html#ixzz22GnjXjDy

Reporting Superdiversity. The

Mass Media and Immigration

in New Zealand

Paul Spoonley & Andrew Butcher

Increasingly, after 1996, feature writers, columnists and editorial writers took a

much more positive view of immigration, including Asian immigration. Some were

from the communities concerned (Raybon Kan and Tapu Misa are two prominent

columnists) whilst elsewhere, editorials were dismissive of the anti-immigration

politics that had emerged in 1996. By the 2002 election, most of the major

newspapers had adopted an editorial position which was highly critical of such

politics. Moreover, all the major metropolitan newspapers ran features during 2002

(prior to the election) which sought to put immigration into context, which profiled

immigrants and presented their stories in a generally positive light (if there were

criticisms, they were often directed at the host population) and as a way of

personalising the communities concerned. The simplistic racial labels and generalisations

which had previously been common were largely absent although there were

some exceptions (see the article below on Maori concerns). For example, the

Dominion Post ran a series in September 2002 titled ‘‘The Immigration Debate’’ which

included the following:

16 September: ‘‘Why Maori fear being swamped’’, ‘‘National identity crises behind

rhetoric of fear’’ and ‘‘Welfare statistics shatter bludger myth’’;

17 September: ‘‘Looking for the magic number’’;

18 September: ‘‘Paradise postponed’’ and ‘‘The tough questions that won’t go away’’;

19 September: ‘‘Why the melting pot doesn’t work’’.

Despite the wording of some of the headlines, the articles were extensive, sympathetic

to immigrants, provided nuanced and detailed explanations of current immigration

trends and outcomes and offered a challenge to those who were sceptical or opposed

to immigration. The paper also included profiles of immigrant groups under the

heading ‘‘Ethnicity. Celebrating Cultural Diversity’’.

The shift in the representation of Asian immigrants after 2000 can be explained by

a number of factors. The first is the decline in Asian immigrants during and

immediately after the 199798 Asian economic downturn. There was a significant

economic impact as the demand for housing dropped, along with various consumer

goods (cars, household appliances). Economics reporters began to highlight these

negative impacts and to re-assess the implications for the New Zealand economy,

both in terms of domestic demand and international competitiveness. Something of a

turning point was achieved and a number of positive stories started to appear (e.g.

‘‘Asian Migrants The Myth and the Reality’’, New Zealand Herald, 29 October 1997).

Once the numbers of immigrants from Asia began to rise again after 2000, the

positive stories continued, especially in terms of what immigrants did for economic

growth. But this was accompanied by contributions from senior journalists,

//

The politicisation and problematisation of Asian migration was mirrored

in the print media. After 1997, and certainly since 2000, opinion and feature writers

adopted a very different approach, prompted in part by a major downturn in Asian

immigration and a greater appreciation of at least the economic benefits of

immigration but also as a result of a growing awareness amongst journalists that

they had a role to play in explaining (positively) the complex issues of immigration.*

There was a realisation, from both managers and the journalists concerned, that these

new migrants were an increasingly significant audience in their own right, underlined

by the decline in print sales and revenue.

.................

that would help explain why immigration doesn't feature in any media treatment of the curse of high house prices.

[there is also the ideology of the left: Green Party/Labour being inagreementt with National and other factors...]

Do you think this qualifies as significant to Mr Alan "wait and see what happens" Bollard. After this and his misses and failure to act numerous times in the last 10 years, he surely will go down as the most timid and/or incompetent RBNZ governor in history

Lots of posts here from the grumpy brigade who don't like house prices going up, proving my iron law of interest.co.nz that the more these posters complain about the housing market, the stronger the housing market is.

Looks like Infometrics property prediction of a couple of years ago is proving right. 

The only thing that will halt Auckland property now is a comprehensive land tax of 2-5%, a complete freeze on immigration or interest rates north of 10%. All of them could be applied regionally. Everything else is going to be ignored because of these publicised high capital gains. The animal spirits are being unleashed. Can't do much about supply in the short term but you could stop demand in its tracks tomorrow.

Land tax, freeze on immigration, interest rates over 10% are all in the 'pigs will fly' category.

If a 17.5% increase per annum is not prices spiralling upwards, I wonder what is?

Well Bernard won't put up the top ten...so here we are Yay it's Friday....

Hugh's magic bullet MUD financing

"With MUDs, the central issue for government creation – collective action – was in the developers’ hands. The Texas Constitution and statutes authorized oversight over developers creating MUD; 4 however, this framework provided selected incentives to both developers and city officials. MUDs were economic efficiency tools focused exclusively on enhancing the developer’s property, on one hand, and enhancing the city’s tax base through annexation, on the other hand. Thus, MUDs facilitated a synergy between land developers and city officials wherein developers had primacy over MUD creation. Tax increment financing, as spelled out in state parameters, changed the landscape for development. As noted below, it alters the relationship among political interests in the city (developers, the city, minorities, and neighborhoods). Furthermore, it changes the incentive structure for the city and developers. MUDs provided a central economic incentive to developers: utilize MUD bonds to finance improvements that legally absolved them of most financial responsibilities if their projects failed. For the city, MUD financing of unincorporated infrastructure created a lucrative tax base for the city to capture once developments were built out. Tax increment financing is used by city officials as an incentive for developers to focus on city projects to enhance the city’s tax base through redevelopment of blighted areas. This is no 4 Two amendments to the Texas Constitution in 1904 and 1917 are the legal antecedents of MUDs. The 1917 amendment established the legal framework to make districts extremely beneficial to private land developers. It gave landowners exclusive authority to create a taxing district to make land improvements by a simple majority vote of resident taxpayers. This principle is sound when applied to rural areas; however, the benefits are skewed when applied to urban developments. In the early stages of development, for example, the developer as the initial landowner can use publicly generate revenues through district debt financing to improve his land. His risks are minimized in relation to his benefits simply because he transfers the risks to the public entity, the district..  "

http://citation.allacademic.com/meta/p_mla_apa.../p136948-8.php

.............................

I have to wonder if a developer is raising finance for an Unable to Afford r Us Subdivision just what sort of services they will get. After all Chc isn't an oil industry hub nor do we have NASA.

Remember too Hugh is of the view that people are capital and more people equals more wealth so the Unable to Afford r Us will be competing with wealthy immigrants?

1. The rates for the Canterbury Region are assessed at a base level. The concentration of Christchurch earthquake rebuild work is assessed to have a 10% to 20% additional price premium over the above value.

2. The 'rest of' North and South island regions are wide spread areas and values provided are assessed averages.

http://www.dbh.govt.nz/bofficials-estimated-building-costs#map1

Hey don't blame me...it was only a table...

Notice the chch premium...ie extra costs....

Now this has got to be a WTF story....let's ignore the chch 'premium' and say $1600 a sqm for a new box of Rhubarb with brick exterior and cheap as she goes...so our Kiwi peasants wanting a 200sqm box will have to fork out at least $320000....plus the land...wooopeeee

Suckers in chch will need another $64000!

Dunno where the DBH get these figures from, but builders always underestimate when applying for consents so that the fees cost less.

I doubt anyone can enter into a contract to build a new home of 145m2 for less than 2,000 plus GST in Auckland and with all the additional engineering requirements now needed when building in Christchurch the cost will probably be even higher.

So not gonna be too feasible building in ChCh at $290,000 plus GST for a 145m2 house plus GST, plus site works, driveway, fencing etc and the cost of the section on top.

Perhaps government needs to rebate the GST on all new homes constructed over the next 5 years in order to stimulate activity.

America's Future Is Taking Shape In The Suburbs

http://www.newgeography.com/content/002992-americas-future-is-taking-shape-in-the-suburbs

Density Is Not The Issue: The Urban Scaling Research

http://www.newgeography.com/content/002987-density-not-issue-the-urban-scaling-research

Listen to the Chatter: what happened while you were asleep. The quiet revolution gathers pace.

DEADLY EMBRACE

While Australia prepares to embrace Asia, in many ways the reverse has already happened in places such as Glen Waverley. What was once a white middle-class eastern suburb has transformed into a thriving hub of Chinese Melbourne

ELEGIBILITY

An Australian resident passport was needed for admission, and each of the 300 who filled the former bank was given a name tag and number, with a purchase limit of one unit each. ''I had 16 people to sign up the contracts and we couldn't sign the contracts fast enough

Points to note:

(a) prospective purchasers had to have an AU passport to get into the auction

(b) all apartments sold on the day

(c) only 2 buyers were caucasian

(d) all but 2 buyers were chinese

(e) all buyers paid well above the asking price

To those who see increasing the supply side of housing should read this article, digest it, and think again. It wont solve the availability of housing to young local first home owners. (in auckland) They won't get a look in.  As fast as they come on the market they're gone. If you didnt believe the widespread intensity before, believe it now. 

http://www.theage.com.au/victoria/most-liveable-chinese-think-so-20120804-23mno.html

11% of all houses sold in the US in march were to Chinese buyers.

(From Sunday Star Times)

non-US buyers accounted for $82.5 billion in residential property sales in the 12 months ended March 2012. Chinese purchasers made up 11%

But foreign buyers still make up a small part of all US sales, accounting for just 4.8% of the total dollar amount in the last year.

paste,s from icono,s link--chinese buyers approx .5 % of market  are they not???

Foreign buyers still make up a small part of all U.S. sales, accounting for just 4.8 percent of the total dollar amount in the last year. While in relative terms this represents an increase, the numbers will probably not spur a nationwide real estate recovery.

............................................

anyone got figures for NZ?....

Foreign buyers still make up a small part of all U.S. sales, accounting for just 4.8 percent of the total dollar amount in the last year. While in relative terms this represents an increase, the numbers will probably not spur a nationwide real estate recovery.

............................................

anyone got figures for NZ?....

I don't think it is foreign buyers fuelling nz..... its cheap money; rising rents and relative employment stability.

This place is in a block of 8 in Auckland's "hot" suburb of Onehunga.

http://www.trademe.co.nz/property/residential/for-sale/auction-504015312.htm



The 8 places  are all very similar and three years ago one went for $290,000. two years ago one went for $345,000 and this year one went for $430,000. This one is likely to go for late $400s and it's considered a bargain as there is nothing else in the area that is standalone for near that price. At this end of the market in suburbs like this demand is outstrippping supply massively.

First home owners are doing what it takes to get into the market and so anything that can be purchased for less than %500k is seen as a bargain.... which over the next few years will probably prove to be the case.

Wealthy migrants are not generally in the 500k or less bracket; which is where most of the sales are occurring..... we only read about the higher-price sales but its actually getting driven as much from the low end as the high, is my point.

.