The REINZ's median house price smashed all records in many parts of the country last month

House prices rose strongly in March with new record median prices being set in Auckland, Waikato/Bay of Plenty, Wellington, Nelson/Marlborough, Canterbury/Westland and Central Otago/Lakes, according to the Real Estate Institute of NZ.

The REINZ's national median selling price was $495,000 last month, a new all time high and up 10% compared to February.

In Auckland, the median selling price hit a new all time high of $820,000 In March, up 9.3% compared to February and up 13.9% compared to March last year.

Within the Auckland region the biggest increase occurred within the central suburbs that used to fall within the boundaries of the former Auckland City Council, where the median jumped 16.7% for the month to $856,000.

The North Shore remains the country's most expensive district with a median selling price of $1 million in March, up 6.4% compared to February.

In Waitakere the median price rose 7.2% for the month to $732,500, in Manukau the median was up 2.7% for the month to $770,000 and in Rodney it was up 1.3% to $770,000.

There was an even bigger increase in the number of homes sold in Auckland, with 3230 selling throughout the region last month, up a whopping 66.8% compared to February although that was still down 12% compared to March last year.

Other parts of the country to post strong gains in prices last month were Hamilton up 7.5%, Tauranga up 3.6%, Mt Manganui/Papamoa up  5.4%, Gisborne up 9.4%, Levin up 8.5% and Queenstown up 4.2%.

Prices were a bit of a mixed bag in the Wellington region, with double digit gains for the month in its eastern and western districts, but falls in its central and southern suburbs, which saw the regional median price rise by 1.8% for the month. 

In Christchurch prices were largely flat, with the median up 1.1% for the month but perhaps more significantly, up just 1.1% compared to March last year.

Areas to post a drop in the median selling price last month were Rotorua -6.3%, Taupo -9.6%, Napier -2.3%, Hastings -2.3%, Palmerston North -3.4%, New Plymouth -15%, Hawera - 22.9%, Central Wellington -23.8%, Nelson -3.5%, Timaru -4%, Rangiora -4.6%, West Coast -7.8%,Dunedin -1.6%, and Invercargill -2.8% (see the interactive chart below for the median selling price movements in all regions).

REINZ chief executive Colleen Milne said there was a noticeable surge in sales of higher priced properties in March, especially in Auckland where the number of homes selling for more than $1 million accounted for 35% of sales last month.

"The data demonstrates a generally robust real estate market across New Zealand, with Auckland appearing to overcome the changes to tax and LVR's introduced towards the end of last year and anecdotal evidence of surging investor demand in a number of regional markets," the REINZ said in its March report.

RBNZ to pause for thought with the Auckland housing market back in the game?

In a First Impressions note on the REINZ figures Westpac chief economist Dominick Stephens said the strength of the housing market would be problematic for the Reserve Bank and may cause it to pause for thought about the pace and extent of further cuts to the OCR.

However in her Quickview newsletter on the figures, ASB economist Kim Mundy said although the Auckland housing market appeared to be "well and truly back in the game," the latest figures did not change her view that the Reserve Bank would cut the OCR by 25 basis points in June and August.

Labour's housing spokesperson Phil Twyford said the $70,000 increase in Auckland's median house price in a single month was one and half times the median income in Auckland.

"These figures show that despite the Government's new bright line test and tax information requirements for offshore speculators coming into effect last October, the housing market has rebounded and is as hot as ever," he said.

"National needs to take meaningful action to take the heat out of the Auckland market and restore the kiwi dream of home ownership.

"The Government must embark on a massive state-backed building programme to flood the market with affordable homes, ban offshore speculators from pushing prices beyond the reach of kiwi families and genuinely reform restrictive planning rules," he said.

To read the REINZ's full regional reports for March click on the following link:

PDF iconREINZ Residential Regional Commentary - March 2016.pdf

Median price - REINZ

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227 Comments

It is irrelevant whether I’m the same person as Zachary Smith or not. The truth is that if you live in the area, know exactly what’s happening in the auction rooms, and you see the sold signs left, right and centre before your own eyes, then you already knew even before this was published. If the RE agency stats aren’t good enough for you, here is the answer you’re looking for. The best time to sell is NOW and we’ll see what the gloom and doomsters have to say following this…

Its absolutely time to remove foreign buyers from the market .... they should be able to buy new-builds ONLY like in Australia .

Isn't it? That looks like a $25 billion investment into building new properties to me. Isn't that exactly what everyone is saying we need in NZ? The point is not to stop the investment, the point is to reduce competition for existing houses. If you increase housing stock at the same rate as you invest then there's no problem, problem is when money pours in but no new build happens!

Results published are as predicted. Pat on the back DGZ. I can almost feel the steam coming out of some people's ears due to you being proven correct.

Doublegz and I are seen as the same because we live in the same general area, are both RE agent hobbyists, have a financial interest in Central Auckland, work in technical fields and we are both proud and loyal Aucklanders. Because of these similarities we come across as the same in Internet comments although I think DGZ is more capitalist minded than me whereas I will argue about social issues more.

Bull trap. Dead cat bounce. Last of the desperates getting sucked in. Room for auckland to move higher severely limited any increase brings with it an increased risk of larger corrections when the music stops. Index will show different story as investors pour into regions so lots of low priced stock sold dragging medians down, opposite true in auckland

Life is STILL good in landlord land.

What's your current running after tax and expenses yield?

 

A house bought for $400,000 at a 5% yield does not result in a lower yield if the value of the house jumps to $800,000. The yield on investment is still 5%.

If the value of the house jumps to $800,000 with a potential 2.75% yield that would make the yield for someone who purchased at $400,000 5.5%. The yields being published only apply if you are buying today not if you bought last year (you know.... when the market was crashing...).

That logic defies the core principle of opportunity cost (i.e. if you sold it for $800,00 then invested it in another income earning asset, this should be the yield you are comparing it to)

By the same principle, people who bought a house for $30k 30 years ago and the rental on it is now at $30k a year, is their yield 100%?

The yield on current price is more relevant as far as I'm concerned. The price you paid is irrelevant to whether it's currently a good investment, and if you wouldn't buy at today's yield you should be considering selling (more so with shares than property, as selling is so easy and cheap). To think otherwise is a good example of the Endowment Effect.

Good point, except in that case you'd have to calculate yield as rental income and capital appreciation.

Not really. Capital appreciation happens across most investment types but isn't included in the gross yield calculation. I do like the 100% yield mentioned though.

I suggest Sadr's position is more accurate; calculating yield on the amount actually invested is based on $ realised. The guestimate of current value without actually selling the property requires crystal ball gazing and speculation. While some will argue stats can be used the only guarantee of actual value is a sale contract.

So you calculate your earnings per share based on the price you bought your shares for?

And so it should be. The RBNZ governor obediently took note of his master's diktat and it followed on from here to here.

The same wealth redistribution nonsense underpinned by the poorer end of town happened here as well.

It's now a matter of how long the statist goons in charge think they can get away with pulling future wealth into the pockets of the few today.

This could be the sign the RBNZ needed to act. I really hope they start clamping down on investors now for the sake of young people all over the country and to reduce the risk of a major crash. Happening around the world now. NZ should follow.

It's too late. We're about to become like Vancouver where a property just got sold for $1m above asking price.

It's about time we start blaming mum and dad investors. These increases are not pushed by overseas investors anymore..

Whoa, Whoa, Whoa - "Blame". That's rough mate. When you get next to nothing from bank interest, when the stock market returns are pathetic and risky what other choice do you have for retirement? I feel sorry for younger generations as their pay packets are basically what ours where in the 90's.

You clearly have no idea about the Stockmarket and you are wrong on both counts. The returns on the NZmarket have been excellent in recent years and to say it is risky is just meaningless. A properly functioning Stockmarket is an important part of our country's economy. Our market offers investors good yields and long- term investors have done well from it and will continue to do so.

No way, Ive more than quadrupled my money on London and Auckland property over the last decade. Stocks are a mugs game..... and I work for a bank! Good luck going to a bank and getting a loan to "play" stocks when buying a house in a big city is a better ROI. It's a choice of constantly monitoring companies, hoping someone in that organisation doesn't commit fraud or do anything to go against your long or short. Just remember, you are dumb money - smart money knows whats happening in advance and at a moments notice. You could do all that or open and close a door for a leveraged profit. I know what Id do every time.

Your move RBNZ...

Require banks to hold more capital against housing loans / investor housing loans? Decrease the LVR on the speed limit from 80% to 70% given the increased likelihood of a drop in the housing market being over 20% of house values? Debt to income ratios? Ban interest only loans?

No matter what the RBNZ does though, it is really up to the government to fix it. The RBNZ can only have an impact when the person buying is borrowing from NZ.

I'd like to see at least one of: 1. stamp duty on investor house purchases, 2. a tax (or removal of benefit) on unoccupied houses (i.e. flat tax rate based on value of property (such as 3%) that can only be offset by tax on rental income), or 3. ring-fence losses on property to only offset revenue on property.

they had the chance to stamp on investor loans way back, when they looked at requiring the bank to have them in a different class , hold more capital, and higher LVR's but they backed down.
now they are reaping what they sow.
until someone takes away the advantages over investors to FHB this will continue.

The Australian parent banks are required (for some time now in Australia) to have the lowest interest rates for owner-occupiers (including FHB) and have a higher mortgage rate for anyone with more than one house. The RBNZ chose other fiddles which have proved ineffective - continuing to favour investors at the expense of a productive economy.

It is within the powers of the RBNZ to remedy much of this - and it could actually help protect banks from future insolvency as well as help New Zealanders who aren't currently able to profit from being on the housing ladder.

It's time for a pro-active RBNZ rather than a hands-off approach. They have encouraged the lowest residential mortgage rates in NZ's history which has encouraged investors at the expense of the wider good.

I didn't think it was the RBNZs remit to ensure houses are affordable for New Zealanders. You should expect your Government to step up to the plate here.

It's not, but the affordability of housing is driven by a significant increase in the price of houses, of which banks are largely exposed to. The higher the prices go, the more the banks are at risk of a large correction (given the 80% LVR limit doesn't change when house prices increase, even though the size of the downside risk increases), thus a larger risk to a financial stability of the banks and the country (the RBNZ's remit).

Have you tried getting a mortgage recently? They make you jump through hoops before you get the loan. These requirements are from the RBNZ. The risk comes from the chance of massive default. Something was learnt from the Subprime crisis of 07/08. 20% down is normal and always has been. Your logic is flawed.

And what happens when a mass of housing default occurs? Demand down = prices down.
Prices in the US / UK dropped about 40% on average in 07/08 crisis. With a 80% LVR, this 40% drop would result in a substantial loss in equity = loss for the banks.

It wont happen because there is no loose lending like in 2008. Didnt I just explain that?

Interest only lending in Oz not loose lending? By the way those banks also own most of Auckland property.

Why are you talking about Aussie? Its the NZ market we are talking about. Ill say it again, try getting an IO mortgage without a repayment vehicle and you will not get one. Have you even tried to get a loan? The NZ and Aussie sides of those banks are not funded from the same source. Each country has its own capital requirements.

Why is the answer more envy taxes? Dont we pay enough already? Im tired of hearing there are no taxes on property investment. When you sell the house its taxed as income (likely at 33%), any rental income profit is taxed so I dont see the problem.

All this fiddling with LVR hasn't worked and proposals for stamp duty CGT etc have been proven not to have worked in other countries. Cut immigration now - that is always a key factor in house price increases and ban offshore based foreign buyers from acquiring property here.

What do you base your assertion on that LVR's and CGT and Stamp Duty have been proven not to have worked in other countries?

Be assured that Stamp Duty in Australia is an absolute gold mine for the States, who pour that money into infrastructure

and

Anyone who has ever purchased an existing property and paid 5% stamp duty on the purchase will not be an eager seller for some time. They are taken right out of the market. If they purchase a $1 million property, and pay $50,000+ in stamp duty, it has cost them at least $1,060,000 minimum to get in, but the property is still only worth $1 million (at best) and if they sell immediately, agent fees plus holding costs will make sure they take a solid haircut. Risk is the haircut will take all of their equity. So they won't be a seller for some time. Human nature ensures that if and when they do sell their asking price will be at least $1,070,000. Wont accept less. In effect Stamp duty is both a retardant and an accelerant at the same time. Stamp Duty has the effect of making people take great care when buying a property coz they are going to be stuck there for some years

In Hong Kong and Singapore Stamp Duty Sales Taxes are 15% - a huge incentive to not sell in a hurry - locked-in syndrome

Stamp duty and CGT haven't worked in Oz - prices still increase. Your theory that stamp duty prevents people reselling quickly also indicates stamp duty further reduces supply which leads to even higher prices

Theory huh?

I was right there in the thick of it for 20 years, and no you can't deduce it reduces supply because people are dying or moving into retirement homes all the time. Plenty of supply. But new buyers get stuck for some time. And they stay stuck.

A land value tax is a much better approach than stamp duty. Transaction taxes reduce market liquidity.

Envy taxes are usually suggested by people that will never have to pay them. I used to live in HK where income tax was 15%. HK has consumption taxes, not income taxes. Salaries in NZ are so bad no one would be getting ahead by paying 6 months salary as tax to move home! You are not comparing apples with apples.

My understanding is LVR has reduced the amount of over-leveraged FHBs. Also CGT does indeed have a cooling effect not a stop effect when ppl think there is a greater fool to sell to.

Certainly agree there should be a 20%~50% cut to immigration.

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Of Emperors and clothes .. when on earth is our Government going to recognise this is a crisis, and acknowledge the reality ?

Almost every developed and or OECD country with this problem has taken steps to prick housing bubbles in the past year ( trust me ........google it ) . Canada , Singapore , the Bank of England .........to name a few

Our Government is either drunk or in a coma or fallen asleep at the wheel .

Its perverse, that right now , I could not afford to buy my home in Greenhithe with an 80% mortgage from a bank .... I don't earn enough, and I am a partner in a professional practice, so my income is not bad .

How crazy is that ?

One thing is for sure , when it all goes pop, John Key is out, and he has probably left any meaningful action too late already .

sorry to hear that, we have now turned into a country of haves and have nots.
those of us that were lucky to be born at the right time and buy are all fine. meanwhile those born a bit later that have a hell of time just getting on the ladder.
i was reading an article a while back how now we are headed towards a society where renters will out number owners we will start to see future governments inact a plethera of requlations as they have overseas,
things like rent controls, lease terms
or as in germany
Most tenancies are unlimited, which means that once the tenancy has begun, the landlord can only end it by evicting the tenant through the courts or giving at least three months' notice. This notice can be contested by the tenant, and will usually only be accepted where the landlord has a good reason for the notice being given

There are already more adults (over the age of 15) who rent not own in NZ. It is 57% in Auckland.

The public haven't cottoned onto this point because the commonly presented statistics looks at the number of houses that are owned vs rented. Unfortunately usually the media doesn't publish the statistics for the number of people who live in owner-occupied homes vs. rental accommodation.

Given declining homeownership rates it is inevitable that rental rights will eventually become a political issue.

"Of Emperors and clothes .. when on earth is our Government going to recognise this is a crisis, and acknowledge the reality ?"

We know when... when his polling tells him it's a problem politically, and judging by the latest polls there is an awful lot of people that seem to like the way this is all going. Whether this is pure greed or just utter ignorance is anyone's guess.

Not to mention this cancer spreading into the regions now and and a heep more people feeling like they're getting rich quick, sadly I wouldn't be surprised if his polling went higher.

The have's vote, the not's don't.

Politicians on both sides own rental investment properties - they have a vested interest in pushing up prices - wonder how many rental investments J Key owns?

You could afford Greenhithe if you didn't have an iPhone and cut back on the lattes. :)

I don't think the government is drunk or in a coma or asleep at the wheel. Rather, they are corrupt and complicit. This situation benefits the people that own our government.

This isn't a free market. They've rigged it to behave this way by:

1. Unlimited demand. Anyone anywhere can take part in the ponzi. Immigration has exploded without any attempt to control it by the Gov.
2. Limited supply. Land isn't being released for building. Stringent rules make building expensive. A building supply duopoly is protected.

I just hope they don't introduce a scheme as in the UK where they offer the FHB more cheap cash so they take on yet more debt at an early age.
They need to introduce a 10% stamp duty on overseas buyers and a 5% stamp duty on buyers of second homes.

You cannot discriminate between different types of buyers with variable interest rates ........ and besides at these prices it will make no difference whatsoever, as the FHB cannot even get to look inside the door .

Instead , foreign speculators should be taxed here in NZ as property traders and should be restricted to buying NEW BUILDS ONLY .

When things slow down that will come. Before that rates will need to be 2-2.5%. So give it 2-3 years. Sure as eggs that scheme will come. Govts dont like house crashes or lower property values.

If the number of RE Agent flyers in my letter box is anything to go by, then the supply side issues aren't going away any time soon, I must get five or six RE Agent flyers every week, whereas I never used to get many, and I'm now starting to get them from agents who aren't even in my area, some are even 15km from where I live. So I can only see the prices going up further over the next few months.

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The bigger it gets the further it will fall. No one should be pleased about that, property owners or otherwise, because people who have paid these absurd prices at a time the economy is roaring backward are gonna get stomped. And unfortunatley it will affect even those of us who are not leveraged to the eye balls...
The govt will do nothing, the horse has bolted and they too well that the economy will be a basket case when the dafaults gain momentum. Scarry times.

Rastas - the charts included show it never falls very much, certainly not in Auckland and if it does it quickly recovers

The graph is pretty much the same as the 'how easy it is to get Resource Consent for new dwellings in Auckland City' graph, but lagging a few months.

Not sure if anyone has noticed but it seems that the rental market maybe slowing down in AKL, starting to see a lot more properties listed to be let on Trademe for North shore as an example and are still sitting there.

Could it be that rents are just getting too high for the current new immigrants, given that property prices have increased too quickly?

Rising house prices are not a sign of a crisis in the housing market.

Rather, they are a sign off a healthy New Zealand economy, one producing jobs and good incomes. It's a sign that house buyers have confidence in the future.

House prices are not set by some 'evil' third-party authority, looking to make 'winners' and 'losers'. House prices are set by people, willing buyers and willing sellers in a free market. EVERYONE is doing what they want to. Mutual gains from voluntary exchange.

Rising house prices indicate a wealthy, well-performing economy, that people from other countries want to be a part of... hence immigration.

If you are bearish the housing market, you are bearish the New Zealand economy.

But that's not how it is working out is it. New Zealand is doing well in the world and will do so in the future. House prices reflect the good performance of the New Zealand economy.

And landlords play a valuable part in that good economy... like every other business activity does.

PS: Oh well... OK... I suppose I should acknowledge what many others think... that landlords are probably nicer people than most.

Thanks Mike for spreading the happy juices :-P
Do you think this is worth over $5m, around 25% over the CV?
http://www.trademe.co.nz/property/residential-property-for-sale/auction-...

DGZ - www.homes.co.nz estimates Arney Rd value at $5.1m

Whoa you are right! It's definitely going more than a few bananas lol!!

WOW can i have some of your happy juice,
plenty of parts of the NZ economy are struggling, especially our farmers must be nice to live in a bubble.
i expect the RB to lowere the OCR again because of it, not signs of a strong economy at all

Interesting. I'm based here in Vietnam at the moment and the economy has been humming for the past 15 years, even though there has been a slowdown from 2009-2015. House prices have gone ballistic, but are down at least 30-40% at the high end since 2011. Nevertheless, the Vietnamese economy is still doing well in terms of GDP growth. While that is expected for a developing country, I don't think that house prices are an indicator of the economy. Rather, I think that the ability of Vietnamese families to buy houses and improve their lifestyles is a better indicator of how well the economy is doing. Just because you can spend $1 million on a house on the North Shore of Auckland that cost $800,000 a few years ago is not necessarily an indicator of a well functioning and healthy economy.

It can't be a sign of an economy producing good incomes if the salary to house price ratio is at 8 or 9 times income.

Does your comment also apply to a pre-GFC environment where housing in the US was on the up and up? Everyone wanted to be a part of that, until no one could afford to be any more.

Plenty more Chinese money to come. Ron Fong Choy was right. It doesn't matter what Kiwis can or cant afford.

House prices are not set by some 'evil' third-party authority, looking to make 'winners' and 'losers'. House prices are set by people, willing buyers and willing sellers in a free market. EVERYONE is doing what they want to. Mutual gains from voluntary exchange.

Rising house prices indicate a wealthy, well-performing economy, that people from other countries want to be a part of... hence immigration.

Risk is defined as keeping those positive returns for more than just numbers on a long ago discarded custodial statement. You can generate all the positive return you want on the upside, but you better have a solid handle on risk of a downside that buries the returns wherever and whenever it may show up. An economy that never lives up to the hype set against rapidly rising prices is simply a highly increased probability of that. Read more

Detail the exit strategy?

Don't try and explain the obvious to the doomsters. Do you remember how they all got giddy late last year? Much pontificating about how we were all going to hell in a hand basket because the end was nigh.Graham Wheeler donned in shiny titanium armour had dealt a deadly blow whilst swooping down on his winged unicorn and declaring a 30% lvr across the Auckland shire. Oh we were all too be doomed. Not.

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Your Landlord - what a load of nonsense!

What underwrites all debt?

Rising house prices are actually a sign of a supply shortage - not some bollocks story about a healthy NZ economy!.....If your version was true about a healthy NZ economy then the Government would have no problems running a surplus, we would earn more than we spend, we would have lower numbers of people needing Government assistance packages and that includes the high number of bureaucrats, there would be a decrease in taxes, fees, levies, fines and other revenue gathering BS...this list could go on and on!!

To say that house prices are not set by some evil third-party authority when you have the plethora of red-tape BS to get through in order to subdivide/build is to completely deny the existence of the over-regulated industry that is housing in NZ.......then slap on further subsidies like WFF, accommodation supplements etc and the reality is that housing in NZ is one of the largest propped up industries in the country as it has no resemblance to FREE MARKET capitalism......some people might be making money out of the current situation....but if all the props and crutches were removed believe me the money will dry up fast for many.

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@notaneconomist ..... Best piece written all day !!

I get so sick and tired of these "clowns" telling us we have a "free market' and to get of our asses and "mortgage yourself to the eyeballs" !! The more I hear that, the more the Auckland market looks like a "Ponzi scheme" based on the "greater fool" theory.

And if it was such a "gangbusters" economy, why do we need a WFF and accommodation supplements anyway !!

As a taxpayer, I resent the use of my taxpayer $ going to tenants of overpriced rentals (compared to incomes) just to "top up" the landlords income so they can pay their mortgage interest !

Free Market ...my &*&*^$%$ !!!

Best idea would be to take away the WFF, as if a business can't afford to pay a living wage to it's employees, it shouldn't be in business !!

Scrap the accommodation supplement, then rentals would return to their "true" market value.

Even then, there are still many more factors at play, that this is not a "Free Market".

As a landlord I would love the accommodation supplement to be scrapped. There is nothing worse than having some unemployed bums move in next to my hardworking tenants. Next minute my tenants are complaining the beneficiaries are drinking all day and night and jumping over the fence and stealing from my tenants.

Without the accommodation supplement provided by NZ taxpayers (including me and my tenants) these scum could not afford to live in Auckland. Scrap the accommodation supplement and send them to Northland or Southland to fester and keep Auckland for the workers.

I couldn't agree more! I feel like those recieving accomodation supplements are also more likely to contaminate houses with meth!

Eeew you guys should use a Property Manager from a reputable firm like B&T where they do 3-monthly inspections. Peace of mind really.

Yes, I highly recommend property managers and B&T have been good for me. I don't have any tenants receiving supplements and deliberately buy houses in better areas in order to get better tenants even though yields are lower.
A lot of people under appreciate the brave Landlords who provide accommodation to those on benefits. I second the call to ban housing assistance in Auckland. Make all of Auckland DGZ!

OMG another similarity! I'm starting to think if we are brothers *shock*

I think it is just a case of great minds thinking alike.

You are seriously too naive to be allowed outside on your own.

....you do realise that income can be as high as $79K and you can be on accommodation supplement, and in work tax credits are avilable on $163k? $1.19 Billion paid in accomodation supps in 2013... much more than was paid in unemployment and way less than was paid to the National Superaunuitants ((10.2Bill 2013) . Its not just the unemployed ...its damnd nealry all of us drawing a benefit.... and mostly the boomers (many being over 65 and still working) who are sucking off the young..both via property, via nat super - and lets not forget the gold card. The unemployed 'bums' are a product of what our policys are sowing....

Your rental business would crumble if you wish came true....you as a landlord are a benficiary.

Tell that to the Dairy Farmer just South of Timaru who commissioned his $29M fully automated shed 12 months ago. Not sure if you would get a cup of tea or a smack in the head.

Has the feel of 2007 to me currently. My business income is declining at the moment, still doing well but in the first months of decline in over 4 years. I'm bearish.

Wheeler and Key. Twin helmsmen on the ship of fools.

They are good!

HAHAHAHAHA.

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It is terrible news for what is now known as generation rent. Bad for society that the imbalance is so great...and I am saying that from being on the right side of the fence.

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I know. Never voted for a left wing party before but the status quo is becoming untenable.

Key is asleep at the wheel, unwilling to offend his Chinese money donors by tightening the immigration tap for a while.

Wheeler is captive to international money trends, dovish influencers from other global central banks and hedge funds that are short the NZD.

An appalling cocktail.

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...the polls are so confusing...so many Nats I know have had it with Key. Weird results.

As long as house values keep rising, he will remain popular. Right wing voters only care about money.

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The problem is who is an acceptable alternative?

Labour have polarized themselves with the 3 years free university policy - that lost their chance of my vote.

New Zealand needs to up skill its work force desperately. As technology develops more people will be out out of work.

The government is doing nothing about this as well.

For every old school Nat that might have gone off Mr Key we have a fresh migrant who loves Mr Key

Not necessarily terrible for those who in generation rent who don't want to follow the traditional path set out for them by middle NZ. In fact, for many, it's probably a godsend.

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Piss off with that BS narrative. Most young people dream of having their own home instead of paying rent and making someone else richer. I'm finished with this country.

And maybe the country is finished with you.

So you have said before, many times here and on other forums... and yet here you still are...

The quicker you realise that stamping your feet and whining like a petulant child will get you nowhere, and you simply have to play the cards as they're dealt to you, the less disadvantaged you'll be.

You are in a far more privileged situation than many, living rent free at home with family. Time to swallow your pride and get on the ladder at the bottom rung rather than hoping that whinging will bring a 3 bedroom stand alone house middle-Auckland any closer to your budget.

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Mate come to melbourne. My partner and I were wanting to buy a house in AK and then I got offered a job here. It was hard packing up and leaving friends and family but we haven't looked back. We're setting up a good life here and with the salary I earn now we will be able to buy in a few years. NZ is dominated by selfishness & greed - don't fight it, just move on.

I'm not angry anymore, I'm working in a job market far superior to NZ, learning new skills and now I live in a truly international & liveable city, filled with friendly people.

NZ is good for holidays!!

was just reading how aussie are looking at putting fast trains from melbourne to canberra to sydney so they can grow some of the smaller centres.
people will be able to live in country towns and only take 1/2 hour to get to work sounds like a very good option

How is the market for accountants?

Anyone have access to the REINZ Stratified index?

Does any one know how cambridge fared?

Unfortunately there aren't separate figures for Cambridge, it is included in the Waikato Country figures, which were down 2.2% for the month, but up 20% year on year.

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There it is. No ... reason to live in this country anymore. it keeps ... getting harder and harder for first home buyers. So ... depressing. (Comment edited with swear words removed. Such language is not wanted here, Ed).

Living conditions are worse in most other countries, which is why the stampede to NZ has been increasing.

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....the swear words are a pretty good indicator of the shyyt and stress are young are being put through. Who the heck is advocating for them..we have Winstone looking after the grey power, Key and labour looking after staus quo...but no one letting the young get a voice.

I look at my age group and am discusted. Ive said it before, my dad fought and his school mates died to give the young that followed a decent go. What have we done...just voted ourselves more and more and to hell with the next generation. You young need to get a movement going...they need a Bernie Sanders.

I'd say Collin Craig represents those born in the 90s fairly well. I voted for him.

Please tell me you're joking

Well put. They do indeed. They need a Justice Party ;-)

.

Although I agree with forcing the banks to hold more capital against their mortgage books it isn't necessarily going to help generation rent. The overseas buying that is coming in is mainly cash (whether laundered money from offshore trusts etc. is a separate discussion!) and in my mind would have little affect on the prices and would mean it is even more difficult for generation rent to get on housing ladder.

The only way is to make overseas buyers pay a premium which means introducing a stamp duty for overseas buyers. Also more stringent anti-money laundering environment should be adopted.

or by BANNING them.

It's a race to the bottom economically, socially and environmentally, accompanied by gigantic property bubbles as other 'investments' generate little return or negative return. .

http://www.zerohedge.com/news/2016-04-11/average-german-bond-yield-crash...

Good Afternoon Chaps and Chapesses ....how are my fine little fellows doing down there in the "Land of the Green and the Grey" little ol' Ao-tea-roa ..... I see you are finally doing your bit for the "banking classes" and pumping through those mortgage approvals, creating all that "funny munny" our ilk justs loves ...oooooh tickety boo !! ....as it all comes back to moi ! .... one way or another !

Oh well, all is just fine and dandy here in my sprawling Kaanapali estate (with sea views don't you know) .....why I can even hear the rush of the waves, clambering their way up the golden sand beach, only to retreat once more, back to the sparkling ocean .....just like those beloved bank mortgage interest payments retreating back into moi's pocket !! haw haw double haw haw ...... toodle pip for now .

C'mon now, your're not on a permanent vacation !! ....don't dilly dally around ...get cracking and get that income surging in, to pay that mortgage interest repayment, that's due this Friday and is hanging over your head like an anvil, held up by a piece of old string ..... all waiting to come crashing down on your pretty little head !! haw haw haw ........haw

Anyway time for a dip in the sapphire blue briny, I have better things to do that to chat away to your ilk ....and you need to get busy !! haw haw haw .....double haw haw

Good to see you still pop in from time to time old boy.

Not the news I wanted to see today. I'm still holding onto 3 jobs and have taken on a temporary 4th as of yesterday. I'm not even sure why I'm still doing it. I think it's hope but, we all know where hope gets us.
I'm writing more, again with the hope it might make a difference but actually it's more therapy now. It's hard when you can't talk to even your co-workers because they are also heavily invested landlords.
https://sinisterdisco.wordpress.com/
I know that the investors here are talking about it being a booming economy and the like but I can't help now worrying that this might end in disaster and if it does, what happens to the "measly" savings I have put away. I say measly but it's only a measly amount compared to what I actually need for a deposit. I cant help agree that these are scary times.

I knew this news was coming. Doesn't make it any less difficult to take on board though. Time to get out of NZ mate...we stand no chance. I've saved almost 70k in my bank, and for nothing. I'll just use it to start a new life somewhere else.

I can't. It's way more complex for me and I'm stuck. I'll wave a white flag as you leave x

Sad to feel your pain,

A close friend of mine is in a tough position too... got cleaned out in a divorce.

Now starting over at 47.......he and his new lady earn $200k between them but he's very reticent to take on $800k debt at his age and with the market soooo overheated.

He cant leave Auckland due to the kids and cant be too far away from his ex due to schools etc - he's screwed.

He's waking up at 3am wondering what the hell to do - borrow into the ground and pray the market doesn't change...either in values or interest rates....he wonders how much upside is left..does he not bother playing the game but then he's renting until he dies.

He's even thought of buying a very large Luxury RV when the time comes to retire as it will be less than a deposit on a house....this is what we've come to.

All he wants is a bl@@dy roof over his and his kids heads.

I'd love to hear what others would do in this scenario - feels like damned if he does...

Tough times for many many people for whom circumstances may have changed - the gleeful gloating of many on this site is a very sad reflection on what we have become.

I hope things work out for you ...hang in there.

The glee was only over the fact that our predictions proved true. I felt we had won a battle in our struggle against the doomsters who insisted that we were incurring great financial losses and not sleeping well at night. Things may well change as time marches on.

Typical response from the vested interests, dog eat dog and arnt we clever. Who cares about the collateral damage to family's forced to split apart and relationships under pressure. No protests...just a smile and wink and gold cards to boot.

And what about all you doomtards? How many people did you guys scare away from getting on the property ladder back in 2010? Good God man, they could have paid off at least 25% of their mortgage by now not too mention all the lost equity.

No mate, kiss my ar** - We warned lots of people that the boom wasnt over yet - I think we earned our right to gloat.

Its a large ar.***
So when is the median price too high? Should it hit million, 2 million?? When do you say enough!!
I can smell the greed on yours breath, and the sweaty fingers tapping the keyboards.
Never got into property, never will as its a ponzi scheme but I'm glad you guys love it. Stick to me gold and shares and productive en devours. Good luck to you all I say, its all going to end with a bang.
Just noticed that bloody flag is still up the top of the page...

'Doomtards' huh? Wow... Actually I own property and have a pretty decent income but don't revel in others misfortune or kid myself I was a genius. You sound like a pretty average human.

For someone who doesn't know the meaning of the word 'reticent' - I'm impressed that you have the ability to string a sentence together.

Zach. Be on the right side of history. My only advice to you.

I was in a similar position 6 years ago. I didnt buy a house, I came across an opportunity and started a business. We rent a house and a warehouse. Every dollar this place earns gets poured back into it, one day when growth levels off there will be some good additional outflows.
The reality is, there is more than one way to skin a cat, people are so hung up on housing !!

As a side note, banks seem to be softening a bit on business lending, maybe a quiet directive from above, who knows.

It sounds too risky for your friend to buy a house in Auckland. There are huge benefits to renting including not having to pay for unexpected expenses. Don't rent too much house and invest as much as possible.

In the past taking on a large mortgage wasn't such an issue as inflation would devalue the principle. Now there's officially no inflation (except in the property market). A mortgage is just a large debt at the moment.

@ mvgsmf: Move to the AKL West Cost you can still find nice property, safe area and in a commute distance to the CBD for under £700k

Starting over in another country is expensive. Trust me. Depending on where you go of course. But somewhere generic like Aus, UK, etc. You'll chew through that 70k before you know it. Airfares, temp accommodation, bond etc. Not to mention exchange rates.

There is no perfect solution. You have to weigh things up.
Ideas:
- Move to another town where houses are more affordable - probably cheaper than country relocation.
- Keep saving for another 5 years til the market turns. Of course you run the risk that 5 years of rent vs. price reduction on what you could buy today won't really balance itself out - you need to crunch some numbers.
- Move country but look at exchange rates and set up costs. Don't move somewhere thinking you'll find a job right away. Calculate how long you could live on your funds. It ain't easy.

SpaceX. Can you move to Nelson? I know ones family and job can mean no. That deposit would get you in. But........please beware. You would be entering into a ponzi scheme so irrational right now that I can't tell you its a good move.

Hate to say, I told you so . Mum is about to sell her Auckland rental which she bought in 1990, and it has gone up in value by 13 times the original purchase price - lets just say, it is a dump. Chinese people have bought many of the places around the rental...she does not want to sell to chinese but if she wants the money....

I think that would roughly equate with a doubling in price every seven years. Something that Auckland has done fairly consistently for a while although general inflation and wage growth has been much higher in the past.

Hey Zach, genuine question. Going by those calculations could I expect (just for example) that the average house in West Auckland currently worth 700,000, in 5 years time will be about 1 mill to 1.2 mill?

I think you'll find that it will reach $1.2m shorter than 5 years time. I'd say between 2-3 years. Here's a real life example I'm happy to share. I have a property in West Harbour that was worth around $750k 3 years ago and just last month I found myself rejecting an offer of $1.25m. It wasn't even in the market, a buyer's agent knocked on the door and presented the offer. I was and am still in shock.

Ooops, should have used Zachary's login...oh well, wouldn't make a difference I don't think :-P

Ha! Thank you. I appreciate it. Not sure how I will manage to save that $240,000 in 2-3 years time but good to know what I'm playing with here. Maybe I need a 5th job.

You won't need to, West Harbour isn't really a first-home area, and that's not really the first home market.

Still plenty of properties in Mangere / Otahuhu / Papakura / Manurewa / Ranui etc for circa 500k/600k. You'll only need to save around $60k for those since you'll be eligible for welcome home loans etc.

Copy that. I'm not eligible for welcome home either though. It will still have to be 20%

Also, if the prices will just about double (I'm assuming for those properties too) I'll need at least $200,000 as papakura, otahuhu (going by the logic above) will also almost double right?

It is possible that doublegz bought at a very good time because the increases are not even. Some even say that we are now playing a bit of catchup because of the slowdown that occurred as a result of the 2008 GFC.

Great logic, use historical performance to predict future performance - lets not look at the underlying drivers. Let me go look at what shares have gone up in the past few years and buy them!

It works with race horses. It is logical to back a winner.

Comparing the housing market to gambling? Probably an apt comparison at the moment.

And of course, racehorses never break a leg and have to be shot in the head.

60% of the population is Chinese in West Harbour now, it is good time for you to cash out

Ummm... (1) Maybe I don't need the cash? (2) You're assuming that I'm not Chinese?
Just hypothesis, nothing more.

The saying "It's darkest before sunrise", or something to that effect, comes to mind. The catalyst to all of this has always been banks, even if it is overseas money. It has to come from somewhere.

The fallout from commodities price decreases are only now starting, and is evident across the globe.

Bank stocks have taken a beating, and bad debt levels are rising.

There's cracks everywhere, so do not look at Auckland housing in isolation. It is most definitely not business as usual, so do not lose hope. The end is closer than you might think.

Best advice...keep you're savings safe!

You've probably been saying this the last 10 years. I think you are quite wrongl, the chinese banks could buy the entire country of NZ 5000 times over. The combined value of aucklands entire housing stock is probably the difference between a low/high growth year for China. And, the chinese are not necessarily investing here for capital growth, rather, for safety.

China got their money by buying US debt when the US banks where too greedy and caused the GFC.

Now China's banks are getting greedy using US debt money to try and buy the world.

Guess what, no one's got money, its just debt being used to keep the dream alive as long as possible. Unfortunately the world's capacity to service that debt is running out!

So.. the debt levels grow at a faster pace than the repayment capacity.
How isn't this a chronic of an announced collapse?

It comes to my mind the game where everybody dances around chairs while the music is playing, but there are less chairs than people and some say "don't worry, we can keep dancing, and the more the merrier"

nope, you don't take into account effects of money printing globally.

So.. the debt levels grow at a faster pace than the repayment capacity.

Thats right... thou lower interest rates keep the wolves at bay.... for a while..so we borrow even more.

So one needs to try to understand the Nature of debt cycles ..and also when they become vulnerable to crises and collapse..
Then one can get a sense of when the Real Estate mkt and the Banking system is at risk.. ( in regards to debt ,deflation and the banking system)

In terms of understanding the credit cycles in an economy this is the best I've come across.

Ray Dalio gave us a gift in sharing his knowledge:
http://www.economicprinciples.org/

In terms of understanding when an economy is at risk of a financial crisis this is a great book and website.:
http://debt-economics.org/

( NZ still has a large capacity to borrow..... is still a very desirable destination for overseas Capital flows..... and the RBNZ still has the ability to influence credit growth... If they keep dropping the OCR they will also, probably, drive savers into other asset classes ...like real estate. )...
(I'm thinking that history will show that the RBNZ cutting the OCR was a wrong move, in regards to Real Estate and credit growth )

The musical chairs aint over yet..... and probably has a few yrs to go..

we live in debt infested world..!!!

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This sort of news is heartbreaking to many New Zealanders and especially the young. But here on interest.co the main theme is gloating.

Fine line between gloating and trolling

Things never stay the same long in such global economic uncertainties as is present. They (1% or what ever we like to call the corrupt these days) may of got away with 2008, but they won't be so lucky when the next one hits. NZ has two huge weaknesses that will end it eventually. Job security and lack of international competitiveness. As we drive up our overall costs of living (homes & land), business & production which is what bubbles do....so too will it be it's undoing.

NZ is just an economic oasis at the moment that in reality is just a mirage. As Europe, Asia and the US all economically falter you will see many from those places look for a safer location. NZ is not it. We are just the last resort of desperation for these people.

Just been reading a chunk of history: Edmund de Waal's account http://www.amazon.com/Hare-Amber-Eyes-Illustrated-Edition/dp/0374168288 of his family and their path through Russia, Paris, Vienna and Anschluss.....when Germany decided to have an 'All Your property is Belonga Us' moment......

Not saying history repeats, but, according to the punditocracy, it does Rhyme...

The property market will never become affordable until it runs out of steam and collapses under its own weight. To effectively steady the market you have to bring in controls over the whole market especially including the Mums and Dads selling their own homes for guaranteed tax free profits. There comes a point when the free market no longer functions properly and controls are required. Not a nice thought but it may be inevitable in the end.

I 've been reading these blogs for a few years now. What I'm noticing in the property blogs is that emotions are really heating up. Similar to the peak of the dairy boom with the arguments between dairy farmers and the clean river crowd. Dairy collapsed now you don't here as much about rivers. Just an observation.

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I am so in agreement with you KH. The whole thing is horrendous and the gloating is just nasty. Where is people's compassion? Kiwis behaving in a very un-kiwi way.

New Zealand seems to have become a dog eat dog world - especially Auckland. I think it has more to do with people's fear that the market will turn and they will be left high and dry than anything else - fear and greed.

I'm more interested in the 23% drop in Central Wellington. What happened there....

Also the drop in in rural New Zealand....

"Areas to post a drop in the median selling price last month were Rotorua -6.3%, Taupo -9.6%, Napier -2.3%, Hastings -2.3%, Palmerston North -3.4%, New Plymouth -15%, Hawera - 22.9%, Central Wellington -23.8%, Nelson -3.5%, Timaru -4%, Rangiora -4.6%, West Coast -7.8%,Dunedin -1.6%, and Invercargill -2.8%"

Christchurch is going nowhere - stagnating. Very interesting what is happening outside Auckland.

Have you been to central wellington? Total dump. All the action is in areas like Khandallah, Ngaio, Broadmeadows and Johnsonville. Young families trying to get a slice of suburbia. Khandallah is already unaffordable for most people. Ngaio almost there too.

Depends on whose stats you believe, QV (average price) or REINZ (median price)? According to QV, Rotorua house values up 13%.

http://m.nzherald.co.nz/rotorua-daily-post/news/article.cfm?c_id=1503438...

True - comparing apples with oranges.

Investors buying large numbers of cheap houses and apartments so medians drop.

Central welly? 80% INCREASE is sales. Most second hand apartments yielding 8% plus. A no brainer with 4% mortgages.

Qv uses indexes to account for changing mix of higher or lower cost houses that get sold. Qv index up 10% in most of those areas you mentioned as investors bid up prices of lower end

Not convinced that is the full story. REINZ numbers reflect sales that occurred during the previous month - whereas QV is a more complex "index" - this may not pick up turning points till some months after the event. Comparing apples with oranges.

Still curious about the figures.

If you want a full story how about actually looking at what sold relative to RV. That's what the index data does. Or use homes.Co.nz

Anything cheap outside of auckland is selling immediately, sales volumes are up a lot. This drags median down (order all sales lowest to highest median in middle, if over half sales are to investors median will be a very low number which just reflects the fact that very large volumes of the regions cheapest stock is selling).

http://i.stuff.co.nz/dominion-post/business/residential-property/7876321...

1 aucklander just bought 7 central welly apartments sight unseen. Median reflects investors buying up everything cheap. Watch as it turns double digit positive in next few months as this effect normalizes

I agree. This seems to be happening in Rotorua with sales surging.

http://www.nzherald.co.nz/rotorua-daily-post/news/article.cfm?c_id=15034...

OK the article you referenced says that median house priced increased 2.8% in Rotorua

"The figures also showed the median price for March was $270,000, up 2.8 per cent on March 2015."

yet your previous post in this thread says the QV index shows a 13% increase. This is purely down to different methodologies but makes me cautious of any comparison between the two different measures of house price change and even comparing two different data points within the same data set.

I guess the only true measure is comparing the sale price of the same house adjusting for any improvements and inflation (which is very difficult to do).

The index data comes closest to doing just that... hence why its really the only data that should be considered if 'price trends' are what you are looking for. Both QV and reinz do index data, but you have to pay for the reinz index data

A complete aside - the Tawa/Pukerua Bay area - well, I'd guess most sales would be in Porirua - the largish place in between the suburbs of Tawa and Pukerua Bay.. Can't REINZ spell Porirua?

FOMO and cheap cheap credit enticing people to gear themselves up to the eyeballs crazy times.

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So, I've read through a great deal of the comments here and I will now state some facts that should be obvious to both sides of this argument.....if we wish to call it that.

First fact: Only rising interest rates reflect strong economic growth in the standard models. So are they rising? No, they are not, thus the economic imbalances are real and present. Growth was always reflected in inflation.

Second fact: NZ's property market would go belly up if it were not for unmitigated migration and non residents ability to buy here.

3rd fact: Foreign investors have way more cash than the average wage/salary earning natives and they can and are going to push our house & property prices to the stratosphere. This is because in their countries (let's take the U.S for one example ) what is the return on cash deposits? 0.1% maybe? Other nations just as low, so having their money sitting in a bank makes no sense when they can get better returns from just entering the NZ bonanza sale. And make no mistake NZ is up for sale.

Where will this end? well, I see anyone born and working here becoming slum tenants in their own country which is turning into the playground and safe haven for the worlds more affluent citizens. The RBNZ will not act, the government will not act as like the polls show many feel they are getting wealthy. It will take an absolute disaster for any real changes to occur in mindset especially. Too big too fail is now the economic model they drive

@ Justice, I agree with you but Kiwis will eventually speak out and the ones sat at home who feel more wealthy at the moment will soon and are feeling pretty sick when their children and forced to leave NZ or are pressuring them to downsize.

Also NZ will no longer be able to attract skilled quality migrants as the NZD is too high to for business investment, along with sky high property/ rent prices.
These factors will trigger a collapse - I've seen it happen before! And everyone knows that it simply isn't sustainable.

Yeah, CJ, I'm not saying there won't be a correction, what I am saying is I believe things will need to get a great deal worse before we see some light at the end of this tunnel.

Don't forget the bailouts. We had a global collapse and they fudged it with bailouts. Now that remedy we know will be short lived and has only made the next one even worse. I have stated before I believe around 2018 will be that time frame. Alot can happen in two economic years under these very warped conditions.
There is massive pain and anguish out there I know. I see it, I hear it, and I feel it. But I don't see that currently being focused into a new Political identity with any real force.

I hear what you say Justice but even those who have seen a 6 figure rise(on paper) on their properties over the last month are saying this is total madness and what are the Govt up to and why are they can't they not see what everyone else can see going on around them on a daily basis?

Penguin, They (RBNZ, Government) and governments around the world know EXACTLY what is happening. But .......Banks rule the world at present so they will not go against that until the public on mass grab pitchforks and go looking for them personally for doing nothing. That may occur after the GFC 2.0, as it sure as hell never happened in 2008 did it.

It is madness, total madness. BTW, probably the finest example of NZ's madness was making a banker for one of the world's most corrupt banks our PM!
I remember returning to NZ for a holiday prior to JK's register on the public radar, he did a revealing 60mins interview (in bare feet to portrait he was 'one of us' ) at that time. I watched and thought..."my god, if NZ elects that dickhead we are in big trouble" . Rest is history eh

The coming election will become a poll on Immigration and foreign ownership. You reap what you sow.

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We will wonder in a few years time how did we let Key do "this" to our country - the "this" is allowing so many tens of, if not hundreds of thousands of foreigners to flood into NZ when we really did not need them.

"this cancer"?

If only that were true.

Lov'in all the comments... thanks for the entertainment everyone.

Why would you need to set up a foreign trust as a tax haven when all you need to do is buy houses in Auckland?

So your freshly washed foreign cash can be used to buy these houses without your actual name being put on anything that the NZ government let alone their own countries government can trace .

With the Auckland house price graph at the top of this article if you place a ruler or paper edge from Mar-02 to Mar-07 you will see it is quite a straight line and that straight line would continue to just below where we are today. It is quite a consistent rise from 02 to 16 with the sagging effect of 2008 GFC clearly visible and now we have caught up. Not the type of 'correction' people were expecting. I predict next month will drop a bit in the usual jagged line manner of these types of graphs.

Back in the early nineties I bought a 10 acre lifestyle block for 190K which I sold six years later for 370K however I don't recall much fuss being made of this rate of price rise at that time. I wonder if people are using house price rises in Auckland to express their disquiet at high immigration levels more than anything. It is quite noticeable that the more traditional Kiwi is being replaced by the new Kiwi, at least in Auckland. After all there are affordable places in the rest of New Zealand and rampant house price inflation is not exactly a new phenomenon for Auckland. I also think new Kiwis found out about historic house price inflation and realised fairly quickly that this would be a good thing to get in on. In this respect they have embraced JAFA culture.

palmy houses for 70k in 90s now 300k, which % wise is comparable to auckland (although thanks to last few years now lagging a fair bit, it will catch up over next few years though we are seeing it already everywhere outside of auckland) .

Thing is, 300k still seems cheap, esp when anyone with kiwisaver has the 30k required for deposit. As oppose to 800k for the same thing in auckland. 450k, no worries, only 45k and 200k mortgage each for a couple.

It's not immigrants that bother many of us - they tend to be younger folk just trying to find a better life. What bothers me is the young family with baby and toddler trying to get into the market and being out
bid by the older Kiwi who already owns several properties. I pray that the tax rules here will change to encourage a one family one house situation. It's beyond crazy in this city and rapidly becoming a bad place to live for many.

I know seven new Kiwi families that have rental properties.

Buzby - if you wanna see who makes up the bulk of the buyers in the Auckland market head down to Barfoots auction rooms tomorrow and then let us know who you think is predominantly buying the houses.

I have no doubt there are new immigrants buying one home to live in but also overseas and domestic investors who own several. For me it's not about ethnicity it's about laws or tax rules that encourage or limit everyone to one house per family or individual which is now the case in UK, France etc

Not sure what will happen in NZ but talking to a relative in Alberta Canada today who told me that since 2014 100,000 people have lost their jobs and real estate is falling over. To a certain extent the rest of Canada relies on Alberta's wealth, or at least they did. So nothing in this world is certain. http://www.theglobeandmail.com/real-estate/the-market/alberta-housing-ma...

In that article it states: Prices will drop the most for condos, the board predicted, falling 4.2 per cent, thanks to what it said were “near-record” levels of new condos and apartments under construction. Many will end up in an already oversaturated rental market
A bit different to Auckland currently.

Also I see still, "There's gold in them thar hills":

...buyers flocked to detached houses in less expensive neighbourhoods, pushing up prices in the Northern and Eastern parts of the city.
Falling home prices in Alberta come even as Canada’s housing market recorded a strong year in 2015, with overall home prices rising 6.9 per cent, driven by soaring prices in Toronto and Vancouver.

This is the thing, the gold is isolated in certain areas, just like in the old days.

Have you ever been to Vancouver or Toronto Zach? I have many times, in fact going back again this year. If you have ever been there you will know that there is a big correlation between those two cities and Auckland i.e. People from a certain country buying up most of the real estate there. In fact in many of the suburbs of these two cities you will not see a single street sign in English, and the wording is not in French either.

It is illegal not to have English street signs...it's over the top. You must be having too much Gin & Tonic.

Sun is not over the yard arm yet DGZ, probably is illegal but all I can say is what I saw at the time officer. I'm depressed now after reading and hearing about the medium price in Auckland. desperately worried about the future for my grandchildren. But then one Cld say that maybe the world has always been this way and it's just that more info is out there. Think I will have to find a happier website to follow and leave you all to your envy and greed.

House price inflation is like a modern day gold rush. Certain cities are the choicest gold mining towns, Sydney, Melbourne, Vancouver, Auckland..
A crucial difference being that everyone who tries in these places strikes gold.
The sensible question may not be how do we stop this but rather where can we find the next gold mining town? What are the crucial tell-tale signs that point toward a rich vein? Which town will become the next luxury item?
It will be the cities with a scarcity of housing and a growing population of high income households.

Yeah, ever visited the west coast Zach?

The west coast of the South Island?

Miners were attracted from the Central Otago Gold Rush, and from Victoria, Australia where the Victorian gold rush had nearly finished and by the end of 1864 there were an estimated 1800 prospectors on the West Coast, with many in the Hokitika area. Hokitika was in 1866 the most populous settlement in New Zealand with a population of more than 25,000, and boasted more than 100 pubs.

This article from the UK is well written and quite relevant to the NZ situation.

http://www.theguardian.com/commentisfree/2016/apr/12/house-prices-money-...

agree wholeheartedly with this article, especially this line, if they were included house inflation around the world we would not be in a ZIRP era
"the Bank has seen fit not to include house prices in its measures of inflation"

How can we get Key and Wheeler to read that Guardian article ?

The article puts it perfectly as per below :
The standard solution is: “we need to build more”, (National Response) but this is not a simple supply-and-demand issue. Between 1997 and 2007 the housing stock grew by 10%, but the population only grew by 5%. If house prices were a function of supply and demand, they should have fallen slightly over this period. They didn’t. They rose by more than 300%.

The cause of house price rises is the unrestrained supply of something else: money. Mortgage lending over the same period went up by 370%, thinktank Positive Money’s research shows. It was newly created debt that pushed up prices in a decade of extraordinarily loose lending, which gave birth to a national obsession. Houses were no longer places to live, but financial assets. Property owners became immensely wealthy without actually doing anything. And this great, unearned wealth saw the rise of a new rentier class: the buy-to-let landlord.

Stamp Duty on Investors and Foreign Buyers
Loan to Income Ratios
Remove/Reduce Investor Tax advantages
Help to buy for FHB
Tax developers for land that they sit on while waiting for prices to go up.

My guess is that National don't want prices dropping under their watch. More voters are still home owners than not. Eventually at the rate things are changing this will not be the case.

Excellent post, you are onto it. Its the banks that drive it. As auckland sales volumes fall (even with prices seemingly resiliant) banks need to lend more outside of auckland to meet internal targets. Hence they push the debt onto the regions. They sell mortgages and are very good at it. And its not the landlords that JK is keeping happy, it the banks. Stop property investors, you hurt the banks. And frankly, 7% yielding regions are a good place to put your $ in the current global environment where zero and negative returns are the norm.

sorry and this part from the article also :

When you have runaway inflation such as this, the Bank of England has a responsibility to quash it, usually by putting up interest rates. But – and here is the great sleight of hand – the Bank has seen fit not to include house prices in its measures of inflation. So, throughout the 90s and 00s, they could then “prove” inflation was low or moderate and interest rates meandered lower. Meanwhile, more and more mortgages were issued, and so more and more money was created, and it pushed up prices. The government didn’t mind.

Homeowners vote and homeowners were happy – they were getting rich.

The fraud persists today. The Bank of England says inflation is 0.3%. Really?
With house prices up by 10% last year?

Beautiful !

If National introduced similar measures against buy to let landlords to those recently introduced in the UK I would consider voting for them. 44% purchasers last month were investors and only 21% FHB. Needs to change.

The additional stamp duty and taxation changes are a nice start.

But the UK government is also doing everything they can to prop up the market and avoid a correction in London. 40% "help to sell" subsidies for new builds, a.k.a vendor welfare.

True. This is the kind of Tory attitude in Parliament the British people are contending with: http://www.bbc.com/news/uk-politics-36017175

These free market economics are destroying this country for ordinary Kiwis. The Government needs to step in and put a stop to it - but then they are the biggest proponents of it, ergo no hope for the ordinary kiwi.

New Zealand used to be a society based on equality and fairness. As the wealth gap grows, the growth industry could be personal security, in a country with a system based around interest rate apartheid.

NZ is fast becoming a feudal society it would seem. Really self destructive stuff

Sharpen the pitch forks...

Under the Crimes Act 1961 it's specifically forbidden to keep serfs.

Better keep an eye out for sneaky middle-of-the-night amendments.

Anyone else find it strange no mention of this report in MSM?

Yes. I did notice that.

buy buy buy! do not hesitate

Should be: "buy buy buy! do not miss out".

Haha!!!! This is EXACTLY what my workmate said to me today as I shook my head at the front page of the Nz herald this morning.
You know what? I'm off to get a Takeaway, been living off beans in a tin for months because some bright spark told me that cutting my food bill id be able to save and be closer to buying a house...WHATEVER. Hope they continue to have fun throwing stones form their ivory tower. I'd swear but I'd like to stick around and watch this get worse. For everyone.

What's on the front page of the Herald today?
There's a new listing in Portland Road today...see you at the open homes?
https://youtu.be/-C65KzCEScM

Um is this a sign of things to come? Having a good laugh at our expense? Is anyone else disgusted by this?

This is kind of tough to call Hardworker. My first thought was to elbow doublegz in the ribs but then you want to stick around and see things get worse for everyone? I want to see Auckland really prosper and things get better for everyone who works hard. So I think if you are going to comment like this you need to be tough.
I started out commenting here by pointing out why Auckland was becoming a super-city and why I thought it would become even more so and got a lot of abuse and negativity. It is the nature of the Internet I am afraid and you just have to roll with the punches.

I have no idea what's on the front page of the Herald today as I don't do hard-copy. I thought you might do your usual open homes in the weekend so just pointed out a listing I saw today that's all. So what is it that was printed on the front page?

Kardashians again??

That's funny, lol :)

Hardworker said he shook his head at the front page of the Nz herald this morning. At least now I know he is not a Kardashian fan.

Hardworker is a young lady so we need to dial down our autism a little.

Zach, I'm sorry I'm tired and angry and frustrated and worried about my future. Of course I don't want thing to get worse for everyone but hope is killing me. 2008 killed my Dad, he took his own life. I never understood the pressure he was under but clearly he passed on the same work ethic he had to me. It's just that neither of us knew/know what to do when the tide turns in the wider world, clearly.
I want to ignore doublegz but I'm human. Humans react when someone is deliberately antagonistic and cowardly behind a keyboard. I don't really know what else to say.

I think if you work hard and try and be a little bit richer each week you cannot go too far wrong. I still put in huge hours at work, sometimes working right through the night or entire weekends. It sounds a little trite but you don't want to worry too much about the future. Some Zen dude said, If you miss the present moment, you miss your appointment with life . There is lots to make life worth living. Just the thought of a beer makes me happy or the fact that the Internet exists. I often think to myself that as long as I have the Internet all be well although I always was bookish. Sad I know.

It's tough for a lot of people. I know many people that are earning little and struggling, or earning good dual income but they've got kids and mortgage. One thing that Mr Money Moustache said is "a millionaire is made $10 at a time". It's not the trying to be a millionaire but any savings you can manage will leave you better off.

Kiwis are obsessed with houses, for many understandable reasons. What they aren't obsessed with is investing (a house is a type of investment but that's not the point). There are people out there making a lot of money from non-housing investments and they make in many cases enough to live off including paying rent. You can make good money from investments and it can be uncorrelated to New Zealand housing.

Focus on investing. Some people will always rent and others might turn their investments into a deposit. for a house. The problem with turning investments into a house is that it's a set back on your annual income, maybe buying a house is a bad idea. There's more than one way to look at this. If you think about people that have bought a house only to have a landslide that needs a $120k retaining wall build (something a building inspector told me recently) then you might just be better off not owning.

WOW almost 230 comments .... must be a record !

If nothing else its clear that the topic is really a BIG THING among Kiwis and we should be concerned rather that blase'