House sales up strongly in February but not in Auckland, Tauranga or Hamilton

Property

Housing market a mixed bag in February with REINZ's sales rising strongly in many regions but subdued activity in Auckland, Tauranga, Hamilton and Queenstown

11th Mar 16, 1:24pm by Greg Ninness

The housing market rebounded strongly last month with 7291 homes throughout the country selling, up 5.7% on February last year and the highest number in the month of February for nine years, according to the Real Estate Institute of NZ.

The national median selling price was also up slightly at $450,000 compared to $448,000 in January and $430,000 in February last year.

However sales volumes remained light in the over-heated Auckland market, where just 1936 homes were sold in February, down 17.9% compared to February last year.

REINZ chief executive Colleen Milne said Auckland and Canterbury, which had been the main drivers of the real estate market over the last few years, were now playing second fiddle to other regions.

Sales growth was particularly strong in Napier +27.6% compared to February last year, Hastings +50%, New Plymouth +24.2%, Wellington +25.3%, Christchurch +11%, Timaru +32.6% and Invercargill +49.5%.

But surprisingly, sales were also sluggish in Hamilton, where they were down 1% compared to February last year, Tauranga up just 0.6%, Nelson up 1.1%, and Queenstown where they were down 27% compared to February last year.

Within the Auckland region, the biggest drop in sales numbers occurred in Manukau where sales were down 31.5% compared to February last year, followed by the central isthmus (within the boundaries of the former Auckland City Council) -22%, Waitakere -15.5%, Rodney -13.8% and North shore -5.1%.

There was also a mixed picture on prices within the Auckland region where the median price rose to $750,000 in February from $720,000 in January, but remained below its all time high of $771,000 set in September last year.

Within the Auckland region median prices dropped in Waitakere, Rodney and Outer Auckland (Pukekohe and Papakura) compared to January and rose in the central isthmus, North Shore and Manukau.

See the interactive chart below for REINZ median price movements in all regions and click on the link below to read the REINZ's full report for all regions.

Median price - REINZ

Select chart tabs

Source: REINZ

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129 Comments

by sferris | 11th Mar 16, 1:29pm 1457656198

Anyone got the strata index for Auckland?

by Zombie ponzi | 11th Mar 16, 2:06pm 1457658367

Looks like REINZ is providing the index in chart format now;

https://www.reinz.co.nz/Media/Default/Statistic%20Documents/Public%20HP…

by sadr001 | 11th Mar 16, 2:32pm 1457659970

Looks like a near vertical increase in the stratified index for Feb! It appears to have recovered all January's losses and then some! Based on previous years March usually outperforms February.....

by BadRobot | 11th Mar 16, 4:57pm 1457668620

Without more information you really can say anything - the devil is in the detail.

by David Chaston | 12th Mar 16, 6:55pm 1457762123

We have a very close version here.
http://www.interest.co.nz/charts/real-estate/house-price-index-reinz-rbnz2

by ngakonui gold | 11th Mar 16, 4:02pm 1457665364

Sluggish prices in Hamilton suggest that the rest of NZ has finally found out what the City Council and the road makers are doing with spare land.No they are not building on it they are putting another roundabout on it and putting in more traffic lights with 2 lanes that quickly converge into one.

by kraken | 11th Mar 16, 4:27pm 1457666823

...p-please elaborate.

by Carlos67 | 11th Mar 16, 4:37pm 1457667449

You need to draw a straight line between those peaks and dips and the picture is clear. I see everything is for Auction again in the Property Press. Don't be surprised if things have gone nuts in February and just keep on going in March...

by zorro15 | 11th Mar 16, 4:52pm 1457668379

Can anyone explain how they work their seasonally adjusted data. For Auckland it states that this fell 1%
during February?

by Machiavelli | 11th Mar 16, 4:58pm 1457668695

There are some investors that have been buying a lot out of Auckland in the expectation regional prices will play catch up. I am sure this news coming out will be music to their ears.

by BadRobot | 11th Mar 16, 5:14pm 1457669677

I suspect you are right - investors are turning to the provinces to look for their next purchase - the only concern I would have is that it may create a temporary blip before normal service resumes - and I still come back to the use of the property - if it a rental - what demand is there for rentals in the area - currently according to TradeMe there are 1803 properties up for rent in Christchurch, 3991 in Auckland, 46 in Ashburton and 38 in Timaru - where would you want to buy a rental.....

by Simon | 14th Mar 16, 11:26am 1457907988

Take number listings and divide by population of the region. Only way to get the supply demand imbalance.

P.n has a more severe shortage of houses than almost any other region, worse than 'greater auckland ' even. 160 for sale for 85k population (growing around 2k per year at present).

Outside auckland doesn't mean gore or some tiny town with my infrastructure or facilities. It means decent sized cities with multiple strings to bow that show consistent population growth over time.

Rotorua pop DECLINED during 2006-2013.

PN still grew in population. International students are flocking in.

Anything smaller say 40k and under likely to be risky.

Buy Hamilton 2 years ago, hawks bay 1 year ago, and P.N RIGHT NOW.

by bigblue | 11th Mar 16, 10:01pm 1457686864

Highly likely that the NZ median and Auckland median will reach new record highs in March. Mortgage approvals in first week of March well above same period last year. Auction rooms packed, percentage sold at auction well up on the Nov/Dec period and now a surprise OCR cut and the lowest mortgage rates in living memory.

by gordon | 12th Mar 16, 8:06am 1457723182

Try telling that to my niece who has still not sold her prime half acre property with harbour views. Four months now. No tenders received when initially put up for tender. I doubt she shares your dreams.

by bigblue | 12th Mar 16, 10:46am 1457732761

Half an acre in auckland with harbour views or is it in the Hokianga?

by SpaceX | 12th Mar 16, 8:16am 1457723770

Well that confirms it, Chinese buyers are back and with vengeance.
And John Key still isn't going to do anything.

by doublegz | 12th Mar 16, 9:20am 1457727623

The Return of The Chinese Jedi's

by SpaceX | 12th Mar 16, 11:36am 1457735791

The return of illegal/hot money.

by gordon | 12th Mar 16, 9:15am 1457727326

I can see why so many people want to live in Auckland after hearing about two people being shot and killed in another violent incident this morning. The wet weather, lack of public transport, traffic congestion, burglaries, robberies , drug and illegal weapons finds and murders really make me wonder why I am not living there myself. I am missing out on so much.

by doublegz | 12th Mar 16, 12:08pm 1457737698

You're not missing out so much, but you're missing out big time Gordon!! Look at your own comments, every single post is doom & gloom about Auckland...

[ Abuse removed. Ed ]

by gordon | 12th Mar 16, 10:19am 1457731153

It might be the biggest but certainly not the greatest. Spoke to a young guy this morning who has shifted to Auckland from Melbourne. I asked him how it was going. To my surprise he said he could not believe the traffic congestion there. I think he will be heading back to Melbourne soon. I think I am just saying what the rest of NZ outside of Auckland think. That Aucklanders think they are superior when in fact they are inferior as they chose to live in inferior conditions compared to a lot of other New Zealanders. That's why they are called Jafas by the rest of us.

by doublegz | 12th Mar 16, 10:47am 1457732847

Yes, Just Another Fabulous Aucklander, thank you for your compliment.

by kemistry | 12th Mar 16, 10:02am 1457730166

Such a narrow minded comment. Please go live in other larger cities around the world and then make an educated comment. While Auckland has its draw backs, you are extremity spoilt to live in such a great city and country. I am not a kiwi (yet) but having lived in other parts of the world, it really irritates me when people make remarks like this about NZ. Be proud of your country man, and you might start to find that not all things are doom and gloom .... enjoy the rest of your day.

by sharetrader | 12th Mar 16, 10:32am 1457731929

that's the difference between a born and bred kiwi and those that come here. we value our space, we don't want to live in a crowded concrete jungle, have to sit on top of others at beaches and parks, sit in bumper to bumper traffic or squash into peak hour trains,
I guess that why a lot are leaving Auckland for other parts of NZ where those things are still the norm

by kemistry | 12th Mar 16, 12:05pm 1457737559

Wow, just wow. .. when a european migrant has to stand up against kiwis, about NZ, in their own country, you know there is an identity crisis. I think you should probably direct some of your frustration at your fellow kiwis, who are selling up to foreign buyers and moving down the country or the investors who flip properties for profit, and not at the hard working immigrants who pay tax, contribute to the community and fill the skilled jobs that will go without, if we weren't here. All in all, I find the people of new Zealand very friendly, but unfortunately there are always a few rotten apples

by notaneconomist | 12th Mar 16, 12:56pm 1457740606

Maybe NZ does have an identity crisis.....any identity one may have had has been stripped from them.

We are not all one and the same people....we are not clones!! We need to celebrate our uniqueness but Government and other recent arrivals look at us in a way that strips all our humanness away......

I'm quite happy to have immigration.....I would prefer that there is an entry fee charged to get into NZ....because simply working and paying taxes over the life one has here is insufficient to cover the costs of the infrastructure that arrivals get to enjoy from the get-go.........this country started with nothing we are not far down the track from our pioneer days......so the contribution is often seen as completely distorted between old and new arrivals across time........so I guess that many people now feel that people who are coming from more evolved economies come here and get the benefits of those who have struggled since our settlement began....

by mvgsmf | 12th Mar 16, 1:41pm 1457743313

@ Kemistry - With the utmost of respect you are missing the point.

Born and Bred Aucklanders / NZ'ers do not compare NZ against Europe - and we don't need to.

We compare the quality of life in Auckland NOW, to the quality of life we USED to have living here and the deterioration relative to that. And when we see our loved ones and/or the next generation pushed out of their town of birth it stirs the emotions.

Your point about fellow kiwis flipping houses is valid and disappointing but the evidence for Auckland was that the crazy prices being paid for homes was from non-resident "overseas" speculators (hopefully the Ed wont find that inflammatory)

by Crow22Darkness | 12th Mar 16, 5:41pm 1457757696

Yet 650,000+ Kiwis live in Australia. 1 million Kiwis live overseas.

by mvgsmf | 12th Mar 16, 5:54pm 1457758467

I'm sure that's pretty accurate but have they ever managed to alter the housing market fundamentals of an entire city or small country yet as that's really the question?

by sharetrader | 12th Mar 16, 9:02pm 1457769739

How many of those are born kiwis against new kiwis? I was not surprised when aussie tightened up on "kiwis" moving over. they are now treated as second class even though employers love them as workers.
so why did Australia do it?
http://www.news.com.au/lifestyle/real-life/new-zealand-migration-to-aus…

by Crow22Darkness | 13th Mar 16, 12:10am 1457781034

Because it was costing the Australian Government $1 billion+ for Kiwis social services before 2001 compared to just $100 million for Australians in NZ. 650,000+ Kiwis live in Australia (15% of the NZ population). secondly NZ was a easy stepping stone to get into Australia which they could instantly access Australian welfare after they got NZ citizenship.

40,000-50,000 Kiwis moved to Australia annually during the mining boom. Australia has the highest foreign-born population in the developed world (28% of the Australian population) or 6.6 million people.

Australia should cut immigration by half with the population growth being faster than Indonesia. Australia went from 23 million to 24 million people in just 2 years & 9 months. Australia is expected to reach 25 million people by 2018. Australia grew by the population of NZ in just 12 years. that is why Australia is doing it.

by SpaceX | 12th Mar 16, 12:09pm 1457737784

[ Abuse deleted. Ed ]

by mvgsmf | 12th Mar 16, 12:13pm 1457738024

@Sharetrade and SpaceX - here, here and BRAVO!

This is exactly the issue!

[ Casual racism removed. Ed ]

Well, at this rate it will be.

In the last 5 years the change has been mind-boggling - traffic has become mad every day of the week, I'm now a minority in my street and many of my close friends with good jobs and young families have chucked it in, sold up and left for the regions where the NZ where they can at least try and live the standard of life that NZ was renowned for.

If you want a stinking, large, concrete jungle then there are plenty of places on the globe you can find it but to turn this once fantastic city into it by allowing uncontrolled immigration and non-residents to buy property is nothing short of a crime of treason.

And before I get labelled as some hippy/commie - I'm 50, a lifelong National voter, relatively well off and high income but I cannot help but feel completely betrayed and sold out under this current regime - I'm embarrassed I didn't notice what was really happening sooner - we have sold out our children and the next generation to the highest shonky bidder. Shame on us all, once its gone WE never get it back.

Signed off one passionate and p!ssed off born and bred Aucklander. And if the rest of NZ thinks this wont eventually spread like a cancer you are kidding yourselves - WAKE UP PEOPLE! WE ARE LOSING OUR COUNTRY and VALUES all in the sake of patting yourself on the back because your house valuation has gone up?

[ The rest of this comment is also close to the line. You should be able to articulate the issue in a more civil, thoughtful way. It's an important issue. Angry lashing out is never helpful to being persuasive. ... Ed ]

by doublegz | 12th Mar 16, 11:17am 1457734653

Stop it you're starting to sound like Phil Twyford

by mvgsmf | 12th Mar 16, 12:14pm 1457738057

[ Abuse removed. Ed ]

by SpaceX | 12th Mar 16, 12:06pm 1457737607

[ Abuse deleted. Ed ]

by SpaceX | 12th Mar 16, 12:05pm 1457737517

Totally agree. But the cancer has already started spreading, actively encouraged by media such as this website.

Make me sick that people just don't care and won't vote these ----

The problem is no one young votes. I'm finished here. -----

And if people want racism? well I cannot think of a better way to encourage it than with inequality.

[This comment has been edited for wildly uncivil ranting, and casual racism. Ed ]

by bigbunny | 12th Mar 16, 12:20pm 1457738415

Ridiculous editing Ed. Edit that.

by mvgsmf | 12th Mar 16, 12:03pm 1457737387

@ Kemistry

But since you do not know the quality of life we used to enjoy before we were invaded by reckless amounts of immigration your opinion is lacking in any "comparative value"....fact.

[ Personal abuse removed. Ed ]

by Tui12 | 12th Mar 16, 12:01pm 1457737312

There is a huge amount of internal migration out of Auckland. Original Aucklanders are moving out and being replaced by mostly Chinese and Indians for a net gain. Keeps salaries and wages down and property prices high. Auckland quality of life has deteriorated and will only get worse.

[ Please be careful of casual racism. It will not be tolerated. Ed. ]

by doublegz | 12th Mar 16, 12:00pm 1457737234

[Abuse edited out. Ed]

All of the people who talk about the doom & gloom in Auckland here are envy about us and a bunch of sour grapes.

http://www.nzherald.co.nz/property/news/article.cfm?c_id=8&objectid=116…

by SpaceX | 12th Mar 16, 11:59am 1457737163

[ personal abuse removed. Ed ]

by KH | 12th Mar 16, 2:54pm 1457747645

Ed. Lets lokk at what Tui says on a factual basis.
a. Aucks moving out. Tick. Net NZ internal migration has been out of Auckland for many years.
b. Replacement from outsdide NZ. Tick. Population is going up and not coming from elsewher in NZ.
c. Certain groups predominate. Tick. I dare ot say who apparently.
d. Q of L deteriorating. Tick. A personal judgement but increasing population is the cause in my view.
f. Incomes kept down. Tick. Auckland does have lower incomes tha rest of NZ overall.

by doublegz | 12th Mar 16, 2:18pm 1457745520

Do not agree with (b) Replacement from outside NZ. I know a lot of people (especially Gen-X & Y) who are coming from other parts of NZ (noticeably from Christchurch due to the quake). There have been 2x Christchurch families buying up properties on my street since the new year 2016 and they are all quite big families with kids now attending either EGGS or ABGS. There are also many at work who moved here from Taranaki, Hawkes Bay and Nelson for work in the last 5 years, but most are renting.

by KH | 12th Mar 16, 3:12pm 1457748727

Lol doublegz. (A) Consider the word 'net'. Also I have posted the Stats NZ link on internal migration a number of times here. You have met somebody from Hawkes bay. Mmmh.

by doublegz | 12th Mar 16, 3:18pm 1457749087

Yes in fact my new neighbours have moved here last year from Havelock North in the Hawke's Bay region. I find that most people in Auckland are not from Auckland originally, but mostly from the regions - they moved here for work.

by gordon | 12th Mar 16, 3:32pm 1457749938

If they had ability and the right qualifications they could have stayed in the regions and done well. We were told during the week the average household in Taranaki has a higher income than those in Auckland. Official statistics. And their dollars go further. Less car running costs and smaller mortgage payments for a start. Go figure why shift to Auckland unless you need to.

by doublegz | 12th Mar 16, 5:49pm 1457758171

Funny you said that Gordon. Agree that those who have the ability can go where-ever they want, but there are a large group who have 'less ability' who had to come to Auckland to earn a living. The lady who sits next to me at work is from Taranaki, her parents are still there in Inglewood. They own a farm there. She is now happily settled on the North Shore in Auckland. Believe it or not, she actually told me she will never go back to the Naki. If anything she will move north but at present she is earning a living and happy in Auckland. I believe in my own experiences, what's happening around me, at work or around friend-circle, and the people I met and the stories they told me; and I am just sharing them here as I think they are relevant.

by childofthesun | 12th Mar 16, 4:38pm 1457753892

Let me get this right. They moved FROM Havelock North TO Auckland? Are they insane?

by doublegz | 12th Mar 16, 4:57pm 1457755031

Yeah they sold up and moved to Auckland...50's couple, kids have flown the nest so they do whatever they want I guess. Nice neighbour though - very happy to have them.

by doublegz | 12th Mar 16, 2:33pm 1457746402

(a) Do not agree - from what I have observed, people are selling/cashing up but look in the same area for cheaper properties to do up. They have plenty of cash but not moving out of Auckland obviously we are the 3rd most livable city in the world.
(b) Do not agree as stated above.
(c) Auckland is a multi-cultural society and we all celebrate our differences here e.g. Lantern Festival, Diwali Festival, Pasifika etc. We are very grateful to live in this multi-cultural environment and appreciate each others' culture. We do not see our city predominated by any particular groups.
(d) With so many big projects happening in the Super City: CRL, SkyPath, Orakei Spine, 2nd Harbour Crossing, Penlink, Waterview Connection, Unitary Plan to name a few, Q of L can only improve and we all look forward to the outcomes.
(e) For some reason there is no (e)
(f) Incomes are high in Auckland compared to other NZ towns/regions. There is absolutely no evidence that Auckland incomes are lower than the rest of NZ, it's common sense.

by Crow22Darkness | 12th Mar 16, 6:04pm 1457759085

So? That is so discriminatory just to point out only Chinese & Indians as a problem. Original Aucklanders? Very sure that was the Maori when it was called Tāmaki Makaurau.

by bigblue | 12th Mar 16, 10:48am 1457732882

It is time to shut the door on the mass migration into Auckland and/or a rule change ie migrants must only buy new homes if coming to Auckland otherwise they must be located outside of the Auckland region.

by SpaceX | 12th Mar 16, 11:58am 1457737125

USA let in 700k migrants per year, we are letting in 110k. USA Pop. - 320m, NZ 4.6M

[ partly deleted. Keep uncivil comments off this thread. Ed ]

by Belle | 12th Mar 16, 1:24pm 1457742244

I thought we were more polite here at Interest. However I agree. Curses included. The bit about the media being absent !*☆○》!??

by Crow22Darkness | 12th Mar 16, 5:58pm 1457758694

Ironic. Yet USA has boosted its annual refugee quota to 75,000 compared to NZ with just 750 which hasn't changed for almost 30 years.

40,000-50,000 Kiwis were moving to Australia annually during the mining boom.

by Crow22Darkness | 12th Mar 16, 5:54pm 1457758481

Australia should do the same for people coming from NZ. You can't shut the door completely.

1. Expat Kiwis returning home from overseas with a diaspora of 1 million people.

2. NZ has treaties with several Pacific Island nations such as Samoa.

3. NZ is aging fast & low birth rates means the only solution to that is migration. Japan is now facing a severe crisis over its increasing elderly problem.

by David Chaston | 12th Mar 16, 11:57am 1457737056

The tone on this thread is getting childish. Please do not slag off each other; the comment facility here is to discuss the issue and related public policy. That can be done in a considered way. Comments that are anti-social, abusive, or with undertones of casual racism will be deleted. Repeat offenders will be banned.

We know it is an emotive issue. We are tolerant to a point, but our standards have been set and offenders who cannot maintain a civil conversation or add a point in a civil way will be removed.

There are plenty of other websites that will take all-comers. But that is not us.

by KH | 12th Mar 16, 1:19pm 1457741962

David. There is lots of racism sure, but please don't define any and all comment that discusses race or culture as that.

by mvgsmf | 12th Mar 16, 5:15pm 1457756156

@ KH - agreed - merely stating the facts that are backed up by publically released Govt Data on the country of origin of immigrants into NZ is not racist.

It is a fact.

To suggest otherwise by the Ed is a PC cleansing of the truth and denial - disappointing.

by doublegz | 12th Mar 16, 5:19pm 1457756390

I am disappointing @mvgsmf & @KH for not accepting their inappropriate previous comments that were cleaned up by Ed. We are all equal contributors to this forum and we should play within the rules.

by mvgsmf | 12th Mar 16, 5:55pm 1457758512

Yes we can't have free thinking against the masses. Looks like it's time for 're-education'.... Oh dear...hilarious!

by KH | 12th Mar 16, 7:10pm 1457763039

I think you just told a fib about me there Doublegz. Ed will know. Ed?
Now to the actual discussion. I am posting this today from rural Southern China. Today in town I saw many many thousand Chinese. (possibly a racist assumption - but probably safe to make). There were no Europeans at all other than my wife.
using the Doublegz standard of deduction (yes. it's unusual but dgz does it) one would conclude. a. There are no chinese people in Auckland. b. New Zealanders are flooding into China.

by childofthesun | 12th Mar 16, 7:25pm 1457763911

Lololol. Comment of the week :)

by SpaceX | 13th Mar 16, 11:21am 1457821314

It's racist if it doesn't continue the narrative that certain groups aren't the cause of the housing price boom.

by doublegz | 13th Mar 16, 11:27am 1457821631

Please stop this!

by johnkerikeri | 14th Mar 16, 11:03am 1457906604

I heartily endorse your enforcement of standards on this site.

There is often clever informed debate here that is as good as anything in the world.

This morning for example there is the debate on the relevance of the Irish experience in housing to Auckland's situation.

Good stuff and those people will not bother to write if they are trolled.

by Cowpat | 12th Mar 16, 12:50pm 1457740237

By years end , Aucklands housing market will be fully exposed for what is has become . Anyone that trades commodities can see quite clearly that the market has been driven purely by reinforced sentiment, driven by historically low interest rates, interest only mortgages and an industry that believes in ever rising prices. My advice, and I am not Roger Kerr , if you have speculated, sell, homeowner with low equity sell ,if you believe that by selling you will never be able to reenter the market at a much lower price think again. If your renting in Auckland your current situation financially is far superior to those sitting on large Auckland mortgages. By the way when I reread Barfoots latest report (for which I am only interested in its churn rate ), I found it revealing that the number of sales lowest since 2011, what was not stated ( and given that they always quote new highs et al ) was that the number of new February listings was the highest for a February month since ever. Remember bulls and bears make money., additionally it will not be the low end of the Auckland that gets hit the hardest , and for those believing the latest story of offshore Chinese hot money coming to the rescue ask Fonterra how that is going.

by Cowpat | 12th Mar 16, 3:50pm 1457751039

Auckland sales accounted for only 26.5 percent of national sales in February. Historically running at 35 percent in February. Forget all the headlines, this is Ireland 2007. As Auckland sales fall, agents will suggest to hesitant sellers expecting higher prices to lower prices. Volume will matter more than price. ( During much of 2014 2015 outside December January February Auckland sales were 44 percent of total national sales). Graham Wheeler did not lower rates to help those currently with fixed debt ,nor over concerns of inflation expectations or indeed China or Australia they are indeed concerns, he cut rates in an attempt to squeeze another group onto the ladder or keep others upon it. Why would he even suggest that the rate be fully passed on. Remember the inflation expectations report responses are not the view of the RBNZ, what the RBNZ will be watching will be the volume of Auckland house sales as will be the banks. Keep an eye on the fx markets , once confidence is lost the RBNZ will not be able to cut further .Interestingly . The IMF put out a report on global housing end January, admittedly they are often behind the eight ball at least they are concerned .New Zealand is heading into a balance sheet recession, its all about to unfold and Aucklanders fully expect to see prices to continue rising. As above bulls and bears make money Jaffas get slaughtered. Any new listings.

by macbet | 14th Mar 16, 1:59pm 1457917153

This is Ireland 2007. And John Key is the Bertie Ahern of the South Pacific.

by Zachary Smith | 12th Mar 16, 5:07pm 1457755648

It will be interesting to see what happens if property price growth is seen to have stopped. This is probably an important element of a property investors drive to acquire more property. However it may be a mistake to view the entire Auckland region as one entity. There are a lot of dynamics at play in the property market and I think it is a bit more complicated than Cowpat suggests.
It may well dawn upon folk that significant property price increases are unlikely in certain areas. The reason for this may pimarily be lack of wage growth. There is a trend in the developed world for the the gap between low and high salaries to widen. For this reason I think the lower priced houses in the outer suburbs may see things stagnate rather than the more affluent inner suburbs. The million dollar plus homes are mostly owner occupied by families with high net income. These incomes are continuing to increase and interest rates are trending lower. That is a formula for house price growth. Inner suburbs are also well developed and have a good vibe and facilities. Inner Auckland is a rather nice place to live. Rents are likely to increase here.
Places where double income families like to buy, new developments of moderately expensive homes, are likely to increase but below 10%.
A rise in unemployment or wage stagnation is more likely to affect the poorer suburbs and the regions and affect rent yields also. Capital gain may be limited in those places in the future.
It would be wise to see what is happening in similar cities overseas.

by Cowpat | 12th Mar 16, 7:02pm 1457762564

Zach good luck with that outline. South City Dublin asking prices 5 bed homes Q4 2006 1.743M Euro. Asking price Q4 2013 580 Euro. Nice area , affluent, high income, low interest rates, good vibe too much debt. Still leafy area in spring.( also had a housing shortage apparently)

by Zachary Smith | 12th Mar 16, 7:38pm 1457764701

The Irish situation would appear to be quite a bit different to Auckland. In Ireland 12.6% of the workforce was in construction and the industry made up 7% of GDP. There was a serious over-supply of housing and unemployment was running at 11+% and rising. The P/E ratio in affluent suburbs was approaching 100 whereas in Auckland it is more like 30-35 without the above problems. Also quite a bit of corruption. It's all in the Wikipedia article on the subject:
https://en.wikipedia.org/wiki/Irish_property_bubble
Also before the celtic tiger nonsense the Irish economy was a bit rubbish for like..ever. The whole tiger thing was a bubble whereas Auckland has always been quality.

by steven | 12th Mar 16, 9:18pm 1457770739

Yes and no. Ireland as the gateway to a booming europe was going gang busters, it flopped as the EU flopped. Auckland's boom is based on what solid fundamental(s)? milk? flopped. So maybe property speculation? So where is this mystical "quality"?

by Zachary Smith | 13th Mar 16, 7:23am 1457806991

It must be more than just mystical although I will grant there is an element of that and that is not a bad thing.
NZ rates very highly as a place to do business:
Economic freedom #3
http://www.heritage.org/index/ranking
Best countries for business #2
http://www.forbes.com/best-countries-for-business/

And Auckland is the super-city of NZ. Get in while you still can.

by Cowpat | 12th Mar 16, 10:00pm 1457773241

Zac, if your going to use wiki , read it. 'many bank economists, media commentators, estate agents,property developers and business leaders went on record to state the property market was healthy.'Unemployment in Ireland from 2000- 2008 was between 3.8 and 4.5 percent. The unemployment started after the prices fell. You will find many properties in Auckland with PE ratios going close to 100. And truly if you believe that our Aussie banks are free from corruption you obviously have closed your eyes . Main drivers of Auckland regional GDP visit stats nz

by Zachary Smith | 13th Mar 16, 7:02am 1457805747

Dublin property prices have bounced back. The low figure you gave was for 2013, three years ago. The severe drop was the anomaly and an over-reaction.
You were cherry picking your figures. The construction work and unemployment percentages were extreme in Ireland. The properties in Auckland with a PE ratio of 100 are high end luxury homes not purchased as rentals.
I guess we will see. I have been right up until now - didn't want to rub it in your faces. Now you say we need to wait until the end of this year? If it hasn't happened by then will you change your view or push it out another year?

by Cowpat | 13th Mar 16, 9:39am 1457815199

Zac, indeed Dublin property prices have bounced from 2014 to mid 2015. Dublin prices have trended sideways since new mortgage rules were introduced last year (mortgage/income). I did not cherry pick the figures , the figures quoted were for 5 bed homes (4 beds were just as bad) for one of the most sought after areas of Dublin, the website I used Daft i.e changed how it presented its data. Most recent data Dublin house prices are 34.4 percent below their 2007 peak Its now 2016. Auckland rental yields are lower than Dublin at peak. I will reiterate that unemployment in Dublin was below 4 percent during this time. Even Lotto has a time limit to cash in .Everyone in Dublin that owned property had a winning ticket in 2007. Bulls and bears win, pigs Jaffas and particularly people old enough to have watched Lost in Space will be minced.

by Zachary Smith | 13th Mar 16, 11:15am 1457820955

Your figures seem quite different from what i have read.
In any case bubble bursts seem much rarer than price inflation. The interesting thing with Ireland may be that it over corrected, not that it corrected.

by macbet | 14th Mar 16, 2:42pm 1457919762

Wait for what? Property prices have been falling for a few months if you look at reliable data like the REINZ stratified index. Last September was the peak. The peak to trough in Ireland actually took three years. It's well and truly started in Auckland, a market driven by investors who have suddenly disappeared. All the talk of spreading the boom to Tauranga is irrelevant. Auckland price decline isn't stopping just yet, maybe it will take 3 years to unwind. So unless the notional army of Chinese offshore investors turns up soon to rescue things the endgame is clear.

by Zachary Smith | 14th Mar 16, 8:55pm 1457942125

Wait for what?

Cowpat wrote, several comments above:

By years end , Aucklands housing market will be fully exposed for what is has become .

..implying that it hasn't been exposed yet, I guess, due to prices going up in February and sales still fairly hot.

by doublegz | 14th Mar 16, 8:55pm 1457942137

Zachary we are not the same person I hope :-P

by positivelywallstreet | 14th Mar 16, 9:04pm 1457942674

That would be my best laugh today.
Not that i want to be in the auckland market, its bad enough dealing with the cow cockies...

by doublegz | 14th Mar 16, 8:59pm 1457942384

Macbet, did you actually read the above article? "Auckland median price rose to $750,000 in February from $720,000 in January" *Ahem*

by ex agent | 14th Mar 16, 9:19pm 1457943552

Just means more higher priced houses than cheaper homes sold in February compared to January. The strata index data still went down. Auckland now down 10 per cent since October.

by doublegz | 14th Mar 16, 9:22pm 1457943746

Will go up in March..."SOLD" signs left right and centre at present...a very strong message when driving around. Also Central Property Press all "sold out" before last weekend *Ahem*

by ex agent | 14th Mar 16, 9:48pm 1457945335

Just spent the weekend in Wellington. Nothing for sale in central Wellington. Market is tight and vendors getting prices well above CV. Shows just how quick it goes up.Auckland shows how quick it goes down when astute investors sell and look elsewhere.

by skudiv | 12th Mar 16, 7:33pm 1457764431

Dead cat bounce!

by Zachary Smith | 12th Mar 16, 7:45pm 1457765127

You can't say that at every upward movement of the jagged graph. A dead cat would bounce only after a sustained drop in prices. A dead cat needs quite a fall in order to bounce.

by Vik | 12th Mar 16, 8:05pm 1457766344

Auckland has peaked about 5 months back or so. People rush in to Hamilton and Tauranga - good bump up - but the cycle of appreciation in those centres is short - the ones who got in very early profit while the next round of investors help the early ones reach their profit goals. Game over.
Next Auckland apartments - inner city and some new developments. Once that tops out - the standard growth rates of 3 to 5 % will comeback - which is not what the rock stars like unless we get a 20% drop - which might be nice ? Not sure how many will hold up ?

by Zachary Smith | 12th Mar 16, 8:25pm 1457767551

I would be happy with that scenario. Auckland property prices mean that even 3-5% can equate to a high dollar figure for the cautious property tycoon.

by bigbunny | 13th Mar 16, 6:22am 1457803367

I am very worried. All indications seem to be that something bad is going to happen. My husband and I are Aucklanders, but have been living in London for several years. We plan to return to Auckland in a year or so. There is no way we would put money in a New Zealand bank or buy property at the moment. I feel very sorry for 1st time buyers who felt pressured into buying property and have mortgaged themselves to the hilt.

by Belle | 13th Mar 16, 7:10am 1457806215

So Big Bunny is it the general feeling over there things are turning to custard or do you mean NZ is looking like shite from your perspective?

by bigbunny | 13th Mar 16, 9:05am 1457813130

Hello Belle. There is a feeling here that things are not good everywhere. There is not much discussion about NZ however. It is from what I have read that I think things are heading towards very bad in NZ. The Auckland housing market and levels of mortgage debt is one of the main worries. Regards, Jane.

by Belle | 13th Mar 16, 9:22am 1457814132

Thanks Bunny. Personally from NZ hinterland it was the dairy conversions of the last nearly 20 years that dragged the rural areas out of depression in the mid 80s to 90s. Seeing it was all based on debt I now wonder if thats where we head back to. Tourism and immigration and borrowing keeping NZ going for now. We all wonder where it will lead

by bigbunny | 13th Mar 16, 9:31am 1457814710

Hi Belle. Debt everywhere. I hope NZ can ride out what ever is coming. I am sure it will, it just may take a long time.

by steven | 13th Mar 16, 9:51am 1457815882

Have you ever read up on the Great Depression? Then look at the debt mountian then and now.

by Smalltown | 13th Mar 16, 6:54pm 1457848454

In 1930 Oz farmers geared into wheat big time encouraged by the government of the day's "Grow More Wheat" campaign and a 4 shillings / bushel price. Two years later the price had collapsed a lot of these wheat growers were now swaggies and the depression was on big time. Does any of this sound familiar to anyone......?

by bigbunny | 13th Mar 16, 12:22pm 1457824953

When I refer to whatever is coming, I don't think there will be a depression. I think there could be a sharp correction in the Auckland housing market though and that this will adversely affect the economy,

by buzby | 14th Mar 16, 9:57am 1457902628

I am in the same position as you Bigbunny but am here. Money in UK. Very worried about buying but realise I need to at some point. The banks are giving out money willy nilly. A friend of mine told me he is going to buy an investment flat (for which he will supplement the rent that comes in even at current rates) just because the bank will lend him the money and won't in the future. That was his only rationale. When I said interest rates would go up one day he just laughed and said he had heard they are only going down. Forever?? It just reminds me of the UK in 2005 when people said the shortage would only ever end in prices rising. And then looked what happened. The atmosphere is the same here. It worries me that people here aren't worried when the rest of the world is.

by Cowpat | 14th Mar 16, 9:59am 1457902772

Buzby, if your worried about buying why contemplate. Cash not real estate will be far more important in New Zealand in the next decade. I would suggest buying USD / JPY and gold. The NZD will hit a cycle low of 37-40 USD, low interest rates will only support real estate for so long and New Zealand truly can only lower them so much. At some point we will have a deep recession. Truly why would you buy a 1-2 million Auckland property of compressed wood chip . In a decade you will buy an Auckland home for fewer NZD than today. Graham Wheeler and team appear very distressed.

by buzby | 14th Mar 16, 2:31pm 1457919081

It's the whole thing of wanting control over your own home, I guess. Keep waiting but property keeps getting more expensive.

by macbet | 14th Mar 16, 2:50pm 1457920210

I feel your pain! It's not getting more expensive, you're just getting spin and selective data fed to you. REINZ index has shown falls since October. This is spun as "prices have risen10% since last Feb" when it was 27% last September. I can't see anything other than a great unwind of property debt over the next few years - here and in Oz and every other city that has turned into an asset class for global wealthy.

I think the advice on gold and USD is good though. Holding Sterling is tricky with Brexit and the sense that it's all about to go pear shaped!

Give it three months and watch the numbers. The pain of owning a house falling in value is greater than the discomfort and insecurity of renting. It's a really tricky thing to balance. As a cold investment decision property in Auckland is for nutjobs right now. But in terms of human needs, we all need a place to cal our own. Shitty dilemma.

by Zachary Smith | 13th Mar 16, 2:15pm 1457831723

You can still buy small homes in Manuwera that can be rented out for less than the cost of the mortgage. Especially so if we see further reductions.
All my tenants could buy their own home somewhere else in Auckland using the rent they pay me. Of course it would be inconvenient for them but then you always have to pay for convenience.

by gordon | 13th Mar 16, 3:34pm 1457836481

What about saving the deposit? Could They do that?

by mvgsmf | 13th Mar 16, 4:01pm 1457838062

I think it's highly likely that dgz and Zachary Smith are the same person...either that or they work at the same Real Estate Office....

by Cowpat | 13th Mar 16, 4:43pm 1457840609

Mvgsmf, Doublegz is a barfoots agent or office worker, a quick scan of his postings reveals a remarkable ability to time and post on the release of any barfoot spruik

by doublegz | 13th Mar 16, 5:04pm 1457841845

Stop digging out my personal background. I have nothing to do with B&T although I always have respect for some of their agents in the DGZ area. I'm just a real estate junkie hehehe.

by Cowpat | 13th Mar 16, 5:07pm 1457842073

doublegz when you can read and reply within 90 seconds to a Barfoots posting ,something says different

by doublegz | 13th Mar 16, 5:41pm 1457844117

I know right. Sometimes I'm amazed by how fast I react to the monthly B&T release. Obviously I quite often thought about what I wanted to say beforehand and as soon as the stats are released I jump on top of it.

by Zachary Smith | 13th Mar 16, 6:52pm 1457848362

It's funny how people make these accusations without any evidence. I find it pays to avoid doing that unless you are really sure and have some good circumstantial evidence.

by puketepapa | 13th Mar 16, 6:59pm 1457848751

Either you type very fast, or, English is not your first language

by KH | 13th Mar 16, 8:09pm 1457852958

DGZ told a deliberate lie about me yesterday - and moved on quick in the usual silly fashion And today Zac/DGZ has cafefully avoided actually denying they are one and the same - but if she/he did, who would believe it - not me.
Lets get back to reasoned debate.

by Zachary Smith | 13th Mar 16, 5:14pm 1457842450

I think I'm more of a right wing nationalist than dgz. I agree with many posters here about some control on immigration for instance.

by Smalltown | 13th Mar 16, 6:45pm 1457847941

You know I thought there was something funny about their cheerleading so I looked into it as per a previous post.........

"Zach again - you sure you are an ex Brit? - I ran some of your postings thru some Graphology/Psyche software an ex spook mate gave me and it came back with the following:

....most likely NZ born, probably 1960/61. Probably from Auckland but spent some time in South Island as a child. Most likely University educated, probably worked in Finance, a lot of it overseas. Could have some unusual urges. Could be involved in politics.......

Wait on - surely not......"

by Zachary Smith | 13th Mar 16, 6:55pm 1457848525

I actually voted NZ First/Act for idealogical/strategic reasons, being in the Epsom electorate. I deliberately didn't want to support Key although I liked his approach to the Syrian refugee thing later.

by SpaceX | 13th Mar 16, 7:40pm 1457851205

Key's approach to the Syrian refugree situation is the only thing I have agreed with him on in a long time.

by Zachary Smith | 13th Mar 16, 5:40pm 1457844005

To Gordon - I recall it always being difficult to get the deposit. A couple with both being on the average salary should be able to save an entire income if they are willing to do without luxuries. This is what we did - I remember renting a B&W TV and a pork chop was a rare luxury. Should only take two to three years to get the deposit together for that two bedroom place in Manurewa or Ranui. I would be all for young couples getting special help if they have young children but such a scheme would be mercilessly taken advantage of by new arrivals when it should be reserved for Kiwis born here - IMHO.

Try telling that to my niece who has still not sold her prime half acre property with harbour views.
Does the property now have a price tag? I think a property needs to be very special if putting up for tender. I never look at such offers myself - sounds too hoity-toity and just a waste of my time.

by SpaceX | 13th Mar 16, 7:38pm 1457851082

What? you are telling me there are people who can't just get 200k from their parents for a deposit?

by mvgsmf | 14th Mar 16, 7:52am 1457895166

@SpaceX...nailed it again.

Yes, nothing like telling our young they have to pay exorbitant rent to the person you then need to compete at auction against for FHB....and that person has many many monies from mum and dad gifted to them. Oh and that deposit is also getting 15% larger every year - its like chasing a train leaving the station.

The playing field is completely distorted by making our citizens compete against this - (Ed, is that ok? now that we have to dance around the truth)

by doublegz | 14th Mar 16, 8:05am 1457895944

Thanks for not mentioning a particular race/ethnic group like you always do. This will help reduce unpleasant consequences in our multicultural society.

by mvgsmf | 14th Mar 16, 9:10am 1457899856

@doublegz

Trust me - with the utmost of respect that means absolutely nothing to me.

And it's beyond absurd that in a robust discussion about the future of our country that the FACTS according to our very own Government's Dept of Statistics Country of origin immigration data (which are published on this very site) are not allowed to be raised according to the Editor of this publication.

Government Data from the Dept of Statistics is not hysterical baseless ranting - it is FACT, however uncomfortable that may make some feel.

To deny this is nothing more than censorship.

by gordon | 14th Mar 16, 8:11am 1457896299

If I recall correctly the young man who obtained his first home with the help of a large gift from his parents spends a large part of each day on the computer playing games. Says it all really.

by Zachary Smith | 14th Mar 16, 11:08am 1457906911

There may also be a significant cultural influence going on in NZ now. I remember in the old days children were expected to stand on their own two feet as soon as leaving home and the sooner the better. From talking to members of the Chinese and Indian communities I have gathered that they are very focused on their children's success often buying homes with a view to giving them to their children, paying private tuition fees, sending kids to private schools or doing everything they can to get into good school zones. There is often a sense of total sacrifice to get the kids setup. BTW the wealthy have always done this. By utilizing the resources available in NZ this attitude gives their next generation a significant edge over the more traditional Kiwi counterparts. It will be very interesting to see what the future holds for the demographics of Auckland.
I can almost see it becoming divided up into ethnic zones of wildly varying affluence. If the old Kiwi baby boomers all die or head away from Auckland and never had many kids and those kids often went abroad then there could definitely be a visible ethnic replacement of Auckland going on. Anecdotally this has been happening in my street over the last decade with owner occupied homes and rental properties.

by Sluggy | 14th Mar 16, 12:45pm 1457912726

This has already happened, Ponsonby, Grey Lynn, Westmere, Western Springs, Kingsland - used to be owned predominantly by Pacific Islanders, who moved - South and West, taking the life and vitality of those suburbs with them.
Interestingly I heard a story the other day where a friends Father's Lawyer in the early 70's tried to talk him out of buying in Ponsonby - Mangere was a lovely new development and thats where he should live. He bought in Ponsonby...

by sharetrader | 14th Mar 16, 7:55pm 1457938521

he also failed as an invester in share markets, hes own words too hard, so reverted to investing in property and followed ron hoys system of buy, do up get a new valuation, take out the capital and keep buying.
thats works on an increasing market and when yield is good not so on a market where yield is not good or the market goes backwards for a while.
he was lucky in timing, so in conculsion i would say he made it more through luck (getting in at the beginning of one our biggest booms) than expertise and will be interesting to see his story in ten years to see how he transitions to lower growth and lower yields

by sharetrader | 14th Mar 16, 7:58pm 1457938709

interesting more seasoned PI's have called him out on his strategy as hes has been counting GC as income
So your income isn't $1100 per week per property then is it?

Counting capital gains as income generated by the property is a tad...disingenuous. At this stage the capital gains is not income is it- sure to may have worked out to be an increase of $660 per week over the past year but lets say for arguments sake that values dropped by the same amount so you'd be "losing" $220 per property a week- $440- $660, would you still be claiming your income generated including your capital loss? I would doubt it. I think you'd be better talking about the ACTUAL income being generated per week from the properties so others wanting to emulate you can see how precarious your strategy could be if things go west- you have obviously bought at a good time and have seen considerable gains in the past 3-5 years but I would not be encouraging (not that I am saying that you are) anyone new to investing to follow your strategy now.

by positivelywallstreet | 14th Mar 16, 4:27pm 1457926060

Alright,
The world is going to hell in a handcart.
Buy property debt free.
World war 2 demonstrated that our legacy of property law stretching back hundreds of years will give you a chance of your descendants having a claim long after your property has been confiscated or sold under duress which is likely.
Showing sign of having stashed loot and you will face the crowds.
Now that is really depressing, must be Monday.

by positivelywallstreet | 14th Mar 16, 4:27pm 1457926063