New Reserve Bank figures show the amount borrowed by investors for house purchases in May dropped by $1 billion compared with the same month a year ago

New Reserve Bank figures show the amount borrowed by investors for house purchases in May dropped by $1 billion compared with the same month a year ago

By David Hargreaves

Housing investors borrowed $1 billion less in May than they did in the same month a year ago, according to latest Reserve Bank figures.

During May, investors borrowed $1.49 billion, compared with just under $2.49 billion in May 2016, which is a whopping 40% drop.

Perhaps the 40% fall is somewhat symbolic, since 40% is the figure the Reserve Bank slapped on investors as needing for a deposit in a move announced last July.

So, the latest figures therefore indicate very much a 'before and after' comparison of borrowing patterns before the deposit rule was announced and what has happened since and the figures indicate that the RBNZ's measures continue to have an impact.

The other impact has been a revival in buying and borrowing interest by first home buyers.

The amount borrowed by FHBs in May was $849 million, which was actually up by 1.9% on the $833 million FHBs borrowed in May 2016.

The total borrowed by FHBs in May was the highest monthly total for that group so far this year.

The amount borrowed by FHBs represented just over 14% of the total amount of mortgage money borrowed in May. The 14% was also a high for the year so far for FHBs in terms of their share of total amount borrowed. Prior to the RBNZ's investor restrictions the FHB share was more often in the 11% range, or even lower.

One point of interest about the FHB figures is that they have seemingly risen without any greater leeway being shown by the banks regarding the 'speed limit' on borrowing at LVRs above 80%. While the total amount borrowed by FHBs rose in May compared with a year ago, the amount of high LVR money borrowed, at $221 million, was actually down on the $243 million advanced on high LVR loans a year ago.

The amount borrowed by owner occupiers in May, at $3.63 billion, was down 6.5% on the $3.881 billion borrowed by this group for the same month in 2016.

The overall amount borrowed in May, at $6.036 billion, was down some 17.2% on the $7.287 billion borrowed in May 2016.

Of course, $1 billion of the drop, or 80% of it, was due to the retreat of the investors.

These latest figures will again satisfy the RBNZ, which after initially being very reserved on whether the latest LVR restrictions would continue to work into the future, has more recently expressed confidence that the recent softening in house prices will continue. The RBNZ's now  projecting house price inflation in low single digit figures over the next couple of years.

The LVR restrictions of course have not been the only factor behind the market slowdown. Banks, under pressure because of falling amounts of deposits, have been moving to 'ration' credit and have been edging interest rates up.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment.

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12
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Yes & many investors will stay away in June, July, Aug, Sep & Oct as well

There will however likely be a few 'cheap' apartments for sale to investors in Sydney in those months!

...there is a massive oversupply of apartments in some areas of Australia...that is going to be problematic for values...there will be 25,500 apartment completions in Sydney this calendar year compared with 17,090 in Melbourne and 10,300 in Brisbane. "[The market] has got to come off ...

http://www.afr.com/real-estate/massive-apartment-oversupply-will-hit-val...

There's also no point kiwis buying any of the apartments given that we get treated as second class human beings over there. It looks like they'll have a massive oversupply problem in short order.

Yeah, but those renting in Auckland could soon be paying 50% less renting in Aussie. Which could create a quite large oversupply of accommodation in Auckland.

True, I looked a while back and saw a Melbourne 2 bedroom apartment with a carpark renting for $500 a week. Wasn't uncommon. That's an extra bedroom and carpark over renting in Auckland, plus higher salaries on average.

Does this mean that any price "correction" will disporportionately affect owner occupiers?

Not disproportionately, proportionately to residential property owned. Which if you go by the RBNZ household balance sheet kiwi assets are mostly residential property and not much else.

All depends on how much debt owner occupier is carrying. Purchased in the silliness in the last couple of years quite possibly. Purchased 5 or more years ago then probably not.

With all the focus and attention on what housing is doing, it is easy to miss the point that sharemarkets may well get the speed wobbles.....in fact I'm thinking it will be almost a certainty that chaos in sharemarkets is inevitable........those FHB getting their kiwisaver out and putting it into a roof over their heads will likely have the most protection in the very probable coming carnage.

I'm dreading the potential fall out. It provides buying opportunities but I expect it will hurt as well. I'm just hoping that we don't get a momentum sell off from foreign investors, or debt deflationary effects where people will be forced to sell to either maintain debt servicing or to buy food.

That sell off from foreign investors is very likely to happen, as of September this year China is cracking down even further and now preventing its people from trying to pay their property deposits/mortgage on overseas investments. Many are now having to sell on their stake in a new development, or existing property or simply walk away at a loss.

Reuters article: China to bolster oversight of overseas transactions on Chinese bank cards
http://www.reuters.com/article/us-china-forex-banks-idUSKBN18T198

Good post CJ. Makes for very interesting reading. So am expecting a blip in the buying on the North Shore and Central Auckland apartments between now and then... then what? That's a serious question, not rhetorical. Exciting times...

Thanks Blue meanie. And yes it is very interesting times. Here's some of the latest casualties of China's capital flight clamp down, It's effecting not just the gateway cities but all over Asia.

Bloomberg News: The $100 Billion City Next to Singapore Has a Big China Problem
Beijing's capital controls are spooking some property buyers

https://www.bloomberg.com/news/features/2017-06-22/the-100-billion-city-...

My advice; Protect yourself as best you can and wait for the market to bottom out.

These Chinese restrictions, will reduce demand, but will also reduce supply as if they sell up will be unable to get back in at a future date. Many wealthy Chinese will be glad they got some money offshore before these increased restrictions, and would be unlikely to sell up as where do you put the money.

I wouldn't count on it, China will keep restricting, they've already pursued some foreign buyers who gamed the system (Liar loans) and forced them to sell to repay their loans.

The thing is that governments PM has already said that buyers should have been prepared for any downturn in the property market, and to make sure they can still service mortgages if interest rates rise etc. A property price plunge will mainly only affect those who purchased near the top of the market, or are using their home as a bank to build up other debt for living or luxuries eg overseas holidays . But if you are buying and selling in the same market, and buying a similar valued house, then it should have too much of an affect. Banks however may get stressed.

Rob, you bring up a couple of good points. The house as an ATM in particular. Most of my friends are NOT paying down debt, they are spending up large from paper gains on their homes and they are no different from their home owning friends and outwards exponentially. This is should be a big concern for the government in the event of a major down turn in the economy or a downturn in the housing market.

Ahhh, that would be why a certain Spa companies sales went from 17 - 23 M over the last year and swimming pool numbers reached 1700 new builds from a previous high of 1300 (in 2006) and my own related business has had 50% growth PA for the last two years
I was wondering where that money came from.... MAGIC !!

Firstly Great News TeamNZ won so convincingly
Secondly the screws are being turned as FED & other reserve banks start to increase rates albeit slowly the direction is up.
China continues clampdown on funds leaving the country
What could possibly go wrong ?

Are over seas investors not in this, do they not borrow money, is so are they hidden in the 1 billion dollars investors drop

The government never wanted to admit over seas investors played a big part in the Auckland madness, had to get the facts, I guess we'll never know now unless LVR were Easied back with little result, which I guess is what everybody thinks well happen if national has a say, stuff the FHB

The Chinese do things in mass , trademe house listing could be over 20000

Or it could be 30,000 or 40,000 - or, then again, it might only be 8,000.

Most people resist selling when the market is less active.

Where are Zach, DGZ and tothepoint to comment on this article? To argue that the market hasn't changed, that's it's just election, or spring, or Chinese New Year, or some other factor that negates the hard data?

If the market is still hot to trot why would investor borrowing be through the floor? That's a rhetorical question of course. There is never a "hot market" reason for rapidly decreasing investor activity.

My guess is that most investors (myself included) are waiting for the election dust to settle before further commitment.

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Before you go buying 'investment' properties with 3% yields, no possibility of material capital growth in short term and a good chance of prices falling?

Sounds like a great plan. Fill your boots.

In the past I would've agreed that the election is a large factor BUT how will the election in NZ influence the Australian banks or Chinese Govt - these are really the 2 forces behind the current cool off.

And they will do what THEY want irrespective of who's running this little place IMO....time will tell I guess.

This is interesting - being a stuff article I'll take with a grain of salt until some harder data presents but that area is Chinese Buyer Central....capital outflows restrictions biting??

https://www.stuff.co.nz/business/property/94154549/house-prices-dive-in-...

I totally agree with you on this. The only people I have heard spruiking the election excuse are my accountant, and people I know who are heavily exposed (indebted) in residential property in Ak.
I dont think it will make an iota of difference this election. However, once the poison chalice is handed over to the poor misguided fools at this election, they will surely be vilified at the next.

Commit yourself now DubleD✅

.

With all due respect, gingerninja, markets are fickle......

Only yesterday, NZ won the America's Cup. That might well give a boost to housing activity (and prices) in Auckland - and elsewhere.

Prices remain pretty stable across most of Auckland. The best informed commentators (such as the Reserve Bank) are talking about a slowdown in price increases - and not price decreases.

I expect those commentators will be correct.

If house prices in Auckland were to drop markedly, then people like me might be able to enter the market and purchase - but that's wishful thinking.......

Americas cup will boost housing activity......guessing you haven't traveled much?

Whilst I enjoyed the spectacle the reality is - NO ONE anywhere else on this globe apart from a few rich sailing types gives a flying boat about it apart from us.

It is one of the greatest marketing con-jobs of all time that it has any far reaching International status..

And there are still those licking their wounds from 2000 after being tucked into over-priced apartments downtown for the "Americas cup"

America's Cup will boost housing in AKL....sorry but that's hilarious

Hi mvgsmf,

You write: "America's Cup will boost housing in AKL....sorry but that's hilarious"

In fact, a property manager I know told me this afternoon that he's already fielding inquiries from abroad - on the back of the America's Cup victory.

Anyone who thinks the America's Cup won't give a boost to Auckland's economy (including housing) is delusional. It's already started.

By the way, I have travelled. But you don't need to travel far to know about this sort of thing.

I'm sure you're technically correct and there'll be a temporary boost to the economy, and presumably some infrastructure built if the cup is held in Auckland, which as I understand it isn't guaranteed yet. But do you seriously think that there'll be enough people wanting to buy a house for a single sports event to actually impact materially on the number of house sales in a city like Auckland? I'd be more interested in buying shares in tourism companies or Air NZ if I was looking to profit from the America's Cup.

"In fact, a property manager I know told me this afternoon that he's already fielding inquiries from abroad - on the back of the America's Cup victory."

To which I would respond: correlation does not imply causation.

And next time you consider getting advice from a property manager, on buying property, it would pay to put on a heavy dose of bulls*t repellent.

tothepoint, there is still no guarantee the Americas Cup will be contested in Auckland in four years time. Emirates might demand Emirates Team New Zealand pony up and set the event for Dubai. So until Grant Dalton has made the official announcement...

You want to put two houses on it that it won't be held in Auckland blue meanie?

nope... but I know people and they are still in discussion...

Emirates are a sponsor, as are Toyota and the ASB. The NZ government did not put up money so Emirates can host the event in the Middle East or Toyota in Japan. To say anything other than the event will be in NZ is completely ridiculous. This bulls**t logic, believing half-truths is endemic of those who find themselves on the wrong side of any market be it shares or property as there is always a reason to not invest, at the end of the day only optimists make money (not that I would invest in Auckland, Waikato, BOP or Queenstown property at present).

WTH? Have another beer boy and swing a punch at the first person who comes through the door. Just because you want something to be so, or really, really believe it to be true, doesn't make it true. Like it or not, the discussions are now taking place where the next Americas Cup will be contested. Dubai is just one of three places being discussed. If Auckland was a sure thing, I can assure you Dalton would have announced it when ETNZ won. Auckland could and probably will host it, but the discussions are still being had. And as you know, NZ could still "find itself on the wrong side of the market...!"

Dalton lives in Remuera. He will make sure the next Americas Cup venue to be in / near Remuera.

tothepoint: I'm sure NZ winning the America's Cup will be a drop in the ocean in regards to helping to boost Auckland's house prices. Or we could wait for the next Chinese New Year, some how I don't think that will have much effect either.

And if you really can't afford to buy a home in Auckland, then why oh why do you keep trying to talk up the market so much and not face the reality of what's actually happening? It just seem so illogical and counter productive to aiding you to purchase a home?

The Auckland market is clearly in decline, you only need to look at the auction results over the past six months to realize that.

CJ099 as usual you speak common sense
I had NS property when NZ held the cup & there was no increase in property value even though we could see
TeamNZ racing

tothepoint,

Auckland has a housing supply shortage, that sets Auckland apart from the rest of the world. Which means the only reason Auckland prices will ever fall is if people like you don't want to enter the market.

Just wondering when spruikers here will ever awaken from their delusions ?
There are more drivers than supply for actual use going on in the Auckland housing market this time around
OMG why waste time explaining to the deluded

1 Billion investor drop. Overseas money and specuvestors were having no impact. Yeah right. Tui of the decade.What a bleeping joke.

Suggest if your specuvestment can be intensified under the new plan you will probably be ok as development/intensification works forward. If it is in the single dwelling zones, then all you have at best is an overcrowded school zone and the weekly maintenance of a city lifestyle block, and a massive rates bill.

If Labour/Winston (no fan) get hands on the steering wheel I suggest that policies like, no overseas ownership, removal of income tax loss offsets, and real possibility of strengthening Res Tenancy act in favor of tenant will all have a pretty big impact. Anyone of those three will have an impact, if all three happen....So yes, election will be quite pivotal, how can it not?

Would also suggest that most specuvestors will not want the grief of res tenants, without the opportunity of those lovely free capital gains. Try spelling capital losses. If prices continues to slide back ,as it clearly is, expect the rush to the exit of listings to be come a torrent. As supply exceed demand prices will decline, and then the banks will start requesting more equity. Leverage is bi directional. Good...luck.

Those 3 will say there districts will hardly Change in value, yeah right, the district next door goes down half a million so buyer will say owell I'll pay half a million more to live 5 miles over, good luck ha, surely everyone including the great three think deep down it's just as fair to cheer the market down as cheer it up, there's always buyers and sellers and really is nz better off with fair priced housing or over the top, everything gets put under pressure,

I think there will be no panic. I still believe it's good time to buy. Many good properties in market. If you get 4% yield and 7%capital gain is good return.

I guess your stuck in the denial fase where actually the market has just moved on to the bull trap - back to 'normal'. Panic is just the next fase...

https://www.google.co.nz/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=...

Didn't trade me listing get very high in 2008 why'll people tryed to get out, stalemate come later for 3 to 4 years which didn't really matter to buyers because there's always someone who will sell , it all balances up in the end tho

If u buy over the next year your 7% might be -7% , and the national party are unlikely to get in without fair house prices peters and even if they did there pull to hold or lift house prices are over and they no it, , there could be a little short lift but how could it possibly make headway

75 NgaPuhi Road sold this week for 1.281 million. That's a massive four bedroom home in Remuera!!! sold below the lowest estimate provided by homes.co.nz. Someone's bailed out! I wouldn't be surprised if that house lost money.

It did sell for 20% above CV. Has an extremely steep shared driveway and no garage. Is three bedroom plus study and need of a major makeover. Not DGZ. Sales blurb says, "Opportunity knocks! Bring your builder". Again, do ups seem popular if the price is right.

People were paying not much less for units a few months ago. Probably only needs 100k spent on it to make it pretty nice and quite big by the looks of it. Face it the market has turned, whether it is temporary or permanent time will tell.

I think if a house needs 100k spent on it you can knock 200k or more off the price these days A lot of people cannot be bothered with doing a lot of work. You will get a decent price for a nicely presented house in a premium location. This house sold today for 1.825M which is 50% above CV:
http://www.trademe.co.nz/property/residential-property-for-sale/auction-...

@fatpat Ngapuhi Rd is not really the real 'Remuera' coz it is not DGZ. I'd consider it Meadowbank. I'm sorry but you've got to live here to know these things which I do. Also this is built on steep land so clearly it is a big no-no for many people.

Perhaps... Here's another example though in Remuera. Just a few letter boxes down the road, 116 Ngapuhi Road sold this week for 1.04 million. Thats a nice 2 bedroom polished wooden floors with garage. It also sold below the lowest estimate in homes.co.nz.

Another lemon on Ngapuhi Rd, one of the worse streets in Meadowbank. I am shock that it even went over $1m.

Pat is right, no more excuses DGZ. AKL is slipping time to baton down the hatches.

Interesting link thanks DGZ. But its the trickle of properties that sell at distressed prices that you need to watch out for, because that trickle can all too easily turn in to a flood. That's what we're trying to point out to you.

You don't want to get swept away by negative equity.

90% of my portfolio were bought pre-2009 and I don't think there is a chance of -ve equity. I am, however, still looking for a new investment in Puhoi/Warkworth area.

Well aren't you the lucky one. Unfortunately they'll be quite a few who weren't born at such an advantages time. I'm Gen X so have assets but have to work with them wisely, and therefore I have to invest wisely. Anyone born after GenX has really got their work cut out for them.

CJ099 You will do well because you unlike DubleD have a greater understanding
The circumstances you are living through now will not remain as the debt ridden become squeezed

Thank you NorthernLights, its good to see that people like yourself can clearly see what happening in the current market.

Id suggest sheep and beef. Thats the DMZ. Double Meat Zone.

I don't think we have been presented with a single genuine "distressed price" sale yet though. Keep them coming and we will analyse them.
* although it occurs to me that it might not be the "distressed" seller that has the greater potential to drive prices down. How about the seller who suddenly realises that 500K profit is still not too bad after five years rather than the 1M they were anticipating. I've come across a couple of people lately who have turned down offers as being insultingly low yet they were hundreds of thousands over what they originally paid a few years earlier. In one case over a million dollars more than they had paid a mere four years earlier.

Yawn, you do realize that we're only a few months in to the AKL overseas capital withdraw which has had a big impact on property sales, there's no doubt to that. Give it time Zachary, give it time.

So many words Zach for a P&T worker
I guess this provides a forum for fake wealth enhancement jargon lol

Only for three months in 1977! My foreman marched me to the office and helped me resign when I complained they were all a bit too working class for my tastes. But still, it was a good experience working with the common people.

LOL, Zachary from all the absurd and out dated views that you have posted (To the point of being temporarily banned from posting on this site), you are most certainly and have proved without a shadow of a doubt to be working class!

You were just lucky to be born at an advantageous time to afford property in Auckland, that's all!

And here's a distressed sale for you, been on the market for some time: http://www.trademe.co.nz/property/residential-property-for-sale/auction-...

CJ099, I like to think I'm in a class of my own although your comment does seem to cast aspersions at those that need to work for a living...tut-tut. True story by the way.
Anyway it's not so much a distressed sale as a distressed price I am interested in analyzing.

Zachary its a mortgagee of course it's a distressed sale, and it's a mortgagee in a fairly expensive part of Auckland and they're starting to become more frequent.

Plus by the way, I don't think you have room for the middle or working classes in you idealistic views (Your Auckland Elysium), so tut tut to you.

CJ099 it's not a very typical example though and we have no price. The real proof will be a typical house for the suburb selling at an obviously low distressed price.

There's another one in Saint Johns, though again I suppose you'll say it's not a distressed sale even though it's mortgagee. So what in your definition represents a 'proof' of a low distressed sale? Because when your bank repossess a home and pressures a sale to get it's money back, that's a distressed sale in most people books!

It's all about the "price" it gets, what it actually sells for, that I am interested in. Even during hot markets there are distressed sales due to personal circumstances like a messy divorce, job loss, business failure and so on. I'm not trying to be difficult here I'm just interested in the actual prices properties get. Preferably not one of the very few that are mortgagee sales. Maybe something sitting on the market with a low price tag. This is why I study auction results.

I have a vision of circling vultures

Sorry Zachary but I disagree. It's only been quite recently that morgagees have reappeared on the market in any consist numbers especially for Auckland. In fact I rember people commenting on how there were no morgagees early last year but now they are frequently appearing even in the expensive areas since the market turned with China's capital out flow restrictions enforced at the beginning of this year.

A mortgagee is ultimately a distressed sale. The fact that they are there is not a one off. Stop trying to sweep the facts under the rug.

Not one of the "worse" streets DubleD it's Not one of the worst streets
Don't worry though
You obviously have a fabulous financial ability lol

Wow, considering the same house would have probably sold for a similar amount in mt roskill a few months ago, the market must have seriously turned.

Fat pat , one of many I would say, then stalemate, normally I wouldn't think house prices would fall back very far before this stalemate thing starts. There's always someone who'll sell and fhb won't put of buying for long, where I am in 2008 over the next 4 years houses dropped approximately $50000 but had gone up 150k to 200k from 2002 to 2008, lve seen a bit of this but this Auckland and the rest of nz thing now has me a bit worried, not so much the rest of nz all tho there will be pain, a lot of money came from Auckland but Auckland itself, I just don't know, it went up far to fast and far to much, mad loans, interest only, useing houses again at stupid levels as ATM , over seas investors that could leave in mass, low interest rates which are no help but I guess they won't go up hopefully, they probably heaps more , I would not be surprised at all if the hole country over the next 2 to 4 years didn't do a reset to 2015 prices, and yes little old Americans cup , ok a few visitors might like what they see but really, the size of Auckland, won't ever move the needle

I don't think that many people would mind living at a address one over from Remuera, there are plenty of great properties and if they end up dropping in price by a lot so will the rest close by, maybe a sea views on a special road mighted drop in % so much because of being very few and rear but the masses, nobody misses out

The real Remuera is all about DGZ i.e. ABGS and EGGS. You're either in the zone or out of zone. If it makes you feel better to be one street over and out of zone then you don't know what class is all about. However, there are a few exceptions and they are Lucerne Rd, Martin Ave, Kenny Rd and Darwin Lane. They're still DGZ as in "Double Glamour Zone" lol

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" you don't know what class is all about. "

I would suggest you dont know what class is all about, and it has nothing to do with money or being in the grammar zone.

I know swapacrate I am just saying okay...

LOL public school and "class".

Here's one that sold this afternoon:
5 Dempsey Street, Remuera
- Online hits: 5904
- Open home inspections: 51
- Buyers registered from other Barfoot agents: 10
- Number of buyers in the auction room: 5
- CV (July 2014) $1,100,000
- Sale Price $1,600,000
https://www.barfoot.co.nz/598046

not so long ago house prices were getting almost double the 2014 CV

Double the trouble.

How do you know the number of online hits and the number of inspections and the number of buyers in the room if you were at work

The RE agent sent me the stats coz I attended the open home.

I don't see your point in showing sales that are happening now, there's average and above average houses in all areas but it's not about now it's about what happens over the next say 4 years, look what the prices were like in your area 2 or 3 years ago when Remuera was still Remuera, the school were still the same, ok if a house has had heaps spent on it ok but no one will miss out of this correction, and it could be scary for a lot of reason if you have read the facts

DGZ buying in 2009 means nothing, how much did u leverage up and where are they, did your paper ATM get that fat boat car etc , when property starts going under water other good property can turn to shit real fast and very hard to climb out of when all of a sudden you can't sell anything, of course you aren't like this ?

Ask me in about 25 years time when I am about to retire to see how far deep they are under water then lol.

The fact that it will take you 25 years, pretty much answered the question.

The real investors are there for the long haul. Even if the house prices go up 200% I will still be holding on till when I retire in 25 years time.

You will not sell and take a 200% profit ?
DubleD you don't understand markets

Hopefully you get to keep them but don't make out any market or area is that great and bullet proof when you don't look at the big picture and facts, people can get hurt when they had the sense up to now to wait and see, really

So DGZ seeing you are such a great investor I take it you are retiring no later then 65 , you said 25 years time , so that's 40, you brought 90% of your property pre 2009, that's 8 years ago, so were you younger than 32 when you brought 90% of the property you have now, that's sounds pretty good, you weren't one of the many that leveraged up mum and dads house haha

DGZ has gone from owning one 2 bed rental in St Heliers to being a property baron . LOL Nothing more than a Barfoots spruiker. How many homes have Barfoots sold at auction in June .

Maybe we could work out what the baron has, 90% and 10% he said , if you had 4 houses, no that wouldn't work that would be 75 and 25, manybe he's telling us he's got 10 houses, yes that must be it, I don't know lol, personal I'm 57 and never sell good but I'm so tight I seem to buy on lows, but commercial is my thing now, gst , paying out goings , no p problems , leases, must be a great area tho

National government may not agree but the fact is that Chinese had a major role in the current housing ponzi. They do not mind paying 10% or 30% more as long as they are able to take the money out of China (if caught in China will be in problem) and the best way to park is in property so did not mind 10% or 30% more than the actual value as their prorities were different.

The result was that NZ housing market particularly Auckland changed drastically.

Now, besides having difficulty to send money out of China the other reason is that they too have realized that house price are beyond and now paying 10% to 30% more will actually be 20% to 60% as a result risk is too high and more probability of going down than up.

Time for the market to catch up. Even if it does not fall drastically will be flat for next few years.

The Chinese are still there....you just need to look closer and at areas that aren't as obvious. The Chinese with real money (not the wannabes driving around in new range rovers etc, I am talking numbers so big you cant get your head around it....10's of billions in just profit) are still here, but are doing this by stealth. They have plans that are decades in the making. One day (in the next 50 years) Auckland will be a satellite town of Beijing. So although house prices might be softening in Auckland, long term Auckland will keep cranking up and the demographic will continue to change.

Agree. NZ is such a small country that they can buy it number of times.

It is very well on the way of becoming their colony - process has started.

It's a good thing if you enjoy living in a multi-cultural society and prepare to accept others with different culture and background.

I think what you meant to say was, its a good thing if you are in a position to enrich yourself from such a takeover.

"Auckland will be a satellite town of Beijing" - Is Beijing a multi-cultural city?

Yes, very much so.

The Chinese are savvy, long-term investors.

They have favoured Auckland for good reason and they won't be selling up.

This is what I suspect too tothepoint. They wont be selling up. The lucky ones have already got in.

Yeah...disagree

This is one of the biggest myths that gets perpetuated IMO.

They've only had capitalism and freedom of movement back for 20 years and are classic herd animals with a new toy (money) and they pile into every new hot investment trend together - hardly savvy......

https://www.forbes.com/sites/jnylander/2015/04/21/crazy-facts-about-chin...

Yes, those who get in early make a fortune as there are enough pack animals behind them to boost their gains but I for one wont be betting the farm on the fortunes of a newly capitalist country, with an enormous shadow banking ponzi and a closed government where no one really knows what is on the books....isn't it amazing how they hit their projected growth numbers EVERY SINGLE TIME?

They favour Auckland because we allow them to use our country as a bolt hole for hot money....sadly.

Once China turns we'll all wish we'd never sold ourselves out to them....I'm old enough to remember when Japan was gonna take over the world for ever..

Hi mvgsmf,

You state: "I'm old enough to remember when Japan was gonna take over the world for ever.."

With all due respect, the Chinese have been here much longer than you have.

And I daresay that have a great deal more experience in property investment.

Nice side-step.....no actual rebuttal?

Please explain what your description of the term multi-cultural is.

https://en.wikipedia.org/wiki/Demographics_of_Beijing

DGZ hasn't assimilated yet - multi-cultural - ha

You will be assimilated. Resistance is futile. You must comply.

DGZ's gentle touch of "The Little Red Book"

I think most people can differentiate between "multiculturalism is great" and "more foreign buyers will make house prices go up :) ".

No one is against Multi-Cultural society and are proud of it.

This is the main problem whenever anyone tries to have valid discussion and if it comes to immigration or foreign buyers - people with vested interest goes to extreme and try to change it to racism or as if anyone is against and not rational.

Many people for the fear of not being understand in the right way may not say but when the time comes for vote will vote differently.

This year though the polls may predict differently but be prepared to be upset specially if you are national supporter.

Many will understand what am trying to say.

A nice fantasy, but the history of New Zealand is of a native warrior population that fought the crown to a stalemate, which forced the crown to use other devious means to suppress them. Maori continue to fight, if within the system for now. Don't expect Maori to be embracing of a new imperial want to be.

China will never get control of the sea lanes anyway, we will remain a US satellite even if the appearance is otherwise for now.

I don't think fighting the Crown to a stalemate is true. The Crown achieved victory at minimal expense which is why it looked like a hard struggle but the British would generally only commit just enough resources to do the job which is why they occasionally spectacularly failed in the odd battle. They used alliances with Maori tribes and tactics that enabled a foe to flee by providing escape routes as a cost saving measure.

New Zealand was once once described by a notable historian as the Prussia of the South Pacific and was highly militaristic, evidenced by their unnecessary higher than average casualty figures in the world wars. A result of an over eagerness for warfare. They were even not too fussed about the British executing shell shocked soldiers that's how based they were. We were a tiny country but had an air force and a fleet of warships and a formidable reputation. It was the European New Zealanders alongside loyal Maori battalions that had the real reputation of a warrior nation.

The Crown and Sovereignty of the country is another conversation - ask around...maybe even look at https://en.wikipedia.org/wiki/Declaration_of_the_Independence_of_New_Zea...
President of Property

Maori = $$$$ = :)

Yep lot of Maori driving BMW, Range Rovers and Bentleys around Parnell and Remers.

Stop being a racist.

I know you are not being too serious Double-GZ but I don't think swapacrate is being racist. He is just observing
a general statistical thing concerning an ethnic group.You should be allowed to mention race/ethnic group in a general way to make a point. Otherwise an ethnic designation becomes rather meaningless. If you took it to extremes you wouldn't be able to say anything whatsoever, good or bad or indifferent. Some have called racism the crime of noticing.

dp

Auckland seems to have exhausted its land price capital gains, which means it is now merely a low growth and high cost city. The council is committed to building a massive amount of sprawl space so we will gets lots of congestion and the city will be acquiring a large amount of debt to do so.

Who wants to invest in a nil capital gain, high cost, low growth, congested, high debt loaded city?

Not everyone that has made capital gains is spending it all on boats and holidays.my circle of friends are all paying down debt