Harcourts has 14% more homes for sale than it did this time last year but sales are down 19%. Situation even worse in Auckland

Harcourts has 14% more homes for sale than it did this time last year but sales are down 19%. Situation even worse in Auckland

The property market is cooling across most of the country, according to New Zealand's largest real estate agency.

"The reality is, the market has cooled and if you reject a good offer today you may not get the same opportunity again," Harcourts chief executive Chris Kennedy said in the company's market report for June.

Nationally, sales are down by 20% and there are almost 15% more residential properties available to buy across the country than there were last year, the report said.

In June last year Harcourts had a total of 5681 properties available for sale and sold 2156 during the month.

But in June this year the number of properties available for sale had increased to 6466, while the number of sales made during the month dropped to 1750.

However while prices have fallen back from recent highs they have remained relatively steady over the last few months.

Harcourts' average selling price peaked at $618,938 in March and has remained within a narrow band between $580,000 and $590,000 in the three months since.

In the Auckland market the trends have been even more dramatic with the number of Auckland properties available for sale in June up 52% compared to June last year, while the number of sales during the month was down 27%, with Harcourts selling 434 Auckland properties in June compared with 596 in June last year.

"It's the effect of a property market that is continuing to cool, following the frenetic growth we have experienced over the past several years," the report said.

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21
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As people come to the realisation that they cannot get the prices they may have 6 to 12 months ago then sellers with have to lower their price expectation. The other factor around 40% of properties are rentals in Auckland when the tide turns watch the investors run for the exit doors at once.

Any investor now is staying in the market, rents are going up, houses are getting harder to find, good to be to be a property investor right now, at least 10 to 20 applicants per Auckland villa these days for rental parties

10
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If there's a deleveraging because of a property collapse, the economy will sour as the money supply shrinks, and of the people who stay, they will have less money for rent. We built our bubble with loads of feedback loops in it. That's why bubbles pop.

16
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Rents are not going up in Auckland. This is evidenced by the trademe figures and the lodged bond summaries.

"Good to be a property investor right now". Really? I doubt it.

It will be good in about 6-12 months when all the so called "investors" have to sell up some properties to deleverage there negatively geared portfolios.

11
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Unfortunately keywest many are not investors...but johnny come latelys who have purchased any old shyyyt box as they we suckered in by the frenzy. I have no doubt that the likes of yourslef (?) knew what you were doing, purchased in rational times and kept your head screwed on.

Problem is, I believe your type are in the minority. The numbers that got involved in the madness will exceed you by a long shot....and drag NZ Inc down as a they tumble into the black hole of never ending debt.

Thanks Rastas I appreciate your positive comment and the only mistake I have ever made in property was selling my first one! Only if I can turn back the clock!

Hypothetical property crash starts now.

Keywest in 5 years time: 'my only mistake I have ever made in property was not selling my last one! If only I could turn the clock back to 2017!'

As a Long time and Long term accumulator of property I go by the saying there is never a better time to buy a property than today...

10
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HAHAHAHAHAHA!!!!

Does that same saying apply to FHB in the current Auckland market?

Might be a bit of an over-simplification...

One could also flip your saying on its head and it would quie possibly hold equal value. There is never a better time to sell a property in Auckland than today....

My anecdotal view of many FHB's is many of them fit into the lazy, scared, ignorant & arrogant bucket and end up sitting out of the market, I know many like this, as there is the other motivated group of FHB's who just STFU and get on with it, my advice to FHB's is to buy TODAY!

12
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My anecdotal view of many property speculators, is that they think they're somehow gifted and brilliant. The reality is that simply by virtue of being older, having benefited from low cost homes, they then deny others the same pathway by buying up slews of houses. They then try and encourage others to buy, to keep their own inflated ill-gotten gains afloat. In reality many of them are lazy, scared, ignorant and arrogant, they should STFU and do something productive, sell their portfolio TODAY!

If I sold where would my tenants live?

Sorry didn't realise your property portfolio magically disappeared if you didn't own it ;)

We are not all older coz some of us are Gen-X, and why should we STFU just because you disagree with what we have to say?

Your not going to get many votes from the crowd we have on this site in that bucket.

What a jumped up asshole

Sounds like an ad, yea right....... Just buy is about as useful as saying, just get a lot more money. FHB's aren't sitting on 200K deposits whilst renting.

In that case, time to start some remedial education. Then this book, and maybe some additional advanced reading such as this book.

And if stereotyping is really an enjoyable activity, I'd suggest this fun little tome, for some good, identifiable close-to-home feeling.

Said everyone ever burnt by property downturns.

And that is CORRECT Keywest never better time to buy than today ... but most critics don't get that until late !!! there wont be any crash and investors won't be running to sell because they know better and they are there for the long hall.
I am in the market looking for a gem in the pile of rubbish that is out there right now ... in fact, quality properties are not that abundant ....

If investors aren't running to sell, where are all the listings coming from? If they're in there for the "long hall" (presumed you meant long haul, but as an extremely gifted investor with the bigliest intellismarts, I presume I missed something) then why is so much lending on Interest only? True long term investors would look to pay off the principle as well, right.

Seriously eco bird, sometimes your comments are so cool-ade.

"Never a better time than now" - uncertainty around election, uncertainty around interest rates, rising stock, falling prices, rising interest rates. Seriously.

first sorry for the typo, finger problems..

there are more properties owned by individuals than investors .. people sell because there are divorces, deceased estates, separation, upsizing / down sizing, moving cities, changing jobs - made redundant, went broke, retiring ...etc, need more reasons to sell other than price? ... Investors Sell for very good reasons and Price is hardly one of these - you see if they need money they can just borrow against the asset - no need to sell ... Unless they are one of these noob investors who would chicken out when some other noobs claim that the sky is falling .... most real investors did not sell in 2008 when markets fell down by 10-15% and that lasted for about two years -- why sell and buy and pay RE commission twice?? that is 100k nowadays!! ( I know what you are thinking but you will inherently pay the RE com. when you buy , it is in the sell price!!)

Almost all investors will put most if not all of their loans on interest only and that is the name of the game ( hope I am not letting out a trade secret !!) ... They would not be interested in paying principle at all , why do that ? to borrow it again?? ... you see , it is a different mindset and approach to business, not to home ownership ... an investor doesn't care if his loans are $1m, $2M ...or $5M the more the merrier as long as he can borrow and invest /// and as long as he is comfortable in meeting his obligations - and risks, some of which will be restricted by the lenders.

With uncertainty comes opportunity,.... investors visualize the current and future value of a property be it in location, subdivision or future development and possible CG... things a normal home buyer does not often contemplate ( from a business perspective) maybe because he will never have that money to do that - Unlike most home owners , Most investors are unlikely to sell their investment property if they were made redundant or lost a job (unless he was silly enough to stretch himself too far or it took too long to cover his obligations) ...

Here is a simple example: the average smart home buyer would never buy a late 1990 - 2003 property with fibre cement plastered cladding for so many reasons related to leaky home problems, loan restrictions by the banks and higher insurance etc ..they know that recladding will cost them around 200-250K down the road to get a proper CCC... and these properties are much cheaper because of that ( 200K cheaper than the B&T next door) - some smart investors would pick these houses ( which Neither FHBs nor Asian would touch them), rent them out, maintain them as it goes, and will reclad them after many years when they have appreciated in price ( investors buy with Land and location in mind .. not houses that are on them - they won't live in them !!!) ... it will cost a lot but they can do it and will restore the actual value of that property and then some ... they will make a handsome profit when sold - that is business ..no different from restoring an antique furniture ... So why would you pay principle when you have such projects on hand?? why pay when you don't have to ... and can put that money smartly to work ??

Property Investors are not silly, and yes they are there for the long haul .. never sell unless it is necessary ...

I hope that is a better-ade :)

Eco bird hear hear :)
Gordon; as an investor myself a 1% "drop" in median house prices is hardly devastating. There are loads of variables that drive this; mix being 1 variable i.e more 2 bedrooms selling at cheaper prices than a year ago. And as investors we know "prices dropping" 1) doesn't last and 2) is only real if we sell our investments for less than we paid for them. Otherwise it's just media hysteria and much ado about nothing.

Eco bird hear hear :)
Gordon; as an investor myself a 1% "drop" in median house prices is hardly devastating. There are loads of variables that drive this; mix being 1 variable i.e more 2 bedrooms selling at cheaper prices than a year ago. And as investors we know "prices dropping" 1) doesn't last and 2) is only real if we sell our investments for less than we paid for them. Otherwise it's just media hysteria and much ado about nothing.

1% drop so far...

Your maths is wrong and reading your comments, I don't think you have actually done anything you've written. I'm picking your in you early 30s, have only been investing in this amazing cycle and haven't seen a proper down turn yet.

Unlike some I don't think we're at the reckoning yet and its not going to be this year and probably not next year. I think Its going to be in 2 years when all the interest only "investors" come off these amazing low interest rate and get hit in the face with a 20% increase in interest costs.

Leverage is amazing, but it cuts both ways.

You are wrong my son !!

No I'm not

Yes you are so wrong Grendel!

Nope =)

And WOW I must have really cut close to the truth if other people are getting involved.

Chalk up another one for Greeennndddeeellllll!!!

Yet you still miss the fundamental unchangeable fact that if an asset is overpriced relative to its fundamentals -
which no one can argue against in Auckland - then now is most certainly NOT the best time to buy.

As evidenced in reported figures, investors are staying away from the market more than before. Only an idiot buys something at $x when just 5 months ago it was $x + 5% and in 5 months it will likely be $x - 5%.

In addition, I am pretty sure that most sales to "investors" are those with 1-3 properties, who are the most exposed to the downturn. That represents reasonably large downside risk.

If I want to have a great relationship with my partner I will listen to a couple who have been happily married for 25 years.
If I want to improve my tennis I will take lessons from a coach who has played himself for a long time
If I want to become a better cook I will listen to my wife who's been awesome in the kitchen for her whole life
Etc...etc...
EcoBird, PropertyMinx, Keywest & myself have invested in property for many, many years, others predicting the property apocalypse have read books. I know whose advice I would follow

Didn't you say that you were an Architect Yvil? How are the Auckland new builds selling these days?

Yes CJ099, I'm an Architect AND a property investor. Not sure why you want to know how the new builds are selling ? As an Architect, I have clients who own a piece of land and contact me to design them a house, so I don't "sell newbuilds"

Just asking a question and pointing out your now obvious vested interest in wanting to keep people buying property Yvil.

If house prices fall, that will very much effect peoples ability to borrow for new construction projects and that will ultimately effect your profits. :)

Well done, I would love to say what I feel about architects but would probably be banned from commenting here, suffice to say I believe they are probably responsible for half of the housing crisis the ones I have dealt with are the most narcissistic bunch of people I have ever had the displeasure of dealing with. Maybe not all of them and I have just been unlucky. I think a few builders probably feel the same way.

Whilst I respect your viewpoint trying to build, I have to say you do sound ignorant. Architects are the reason why we have houses to live in period. But I suppose building a nest and living in a tree is an option. Next we'll be hearing how doctors are pushing up our ACC taxes; what a bunch of tyrants those doctors are!!!

Ignorant implies I have no knowledge, unfortunately I have had a very unpleasant experience whereby an architect has caused me to lose in the region of $200K or more, which has left me with a bad taste in my mouth towards this profession. I did mention that hopefully all architects are not tarred with the same brush.

@property mix: Well I have to admit our medical professional aren't as badly incentivized as those in the US but check this out. All I can say is be very careful if your doctor offers you pain killers especially Opioids.

Even Trump recognizes that the US has a prescription drug problem and has hit crisis proportion in some states in the US and guess what folks, your doctor is quite happy to offer you opioids here too.

BBC radio article: America's Opioid Nightmare
http://www.bbc.co.uk/programmes/p0558ks6

BBC radio article: What's Killing White American Women?
http://www.bbc.co.uk/programmes/p03sxmyn

Yes very much agree with you 'Trying to build'. I've had similar experiences in the past with renovating properties and was staggered by how they like to inflate costs at whim or any excuse.

Mine was nearly $1 million over budget !!

Wow and Ouch, I feel you pain 'Trying to build'. I think I was done over by a couple of grand. But if you ever watch the UK Grand Design series Kevin always advise to double your budget but yes I very much agree with you that kiwi architects do tend to take advantage of the over inflated market.

The good news is that times are changing. ;)

I think you are being too kind, you would think that giving them free reign to design a house with a budget of $1.5 million for build costs alone they would manage to undertake this. I cannot comment further on this for reasons of upcoming litigation proceedings.

Your restraint in not burying him under the foundations is commendable.

Thank you, when everyone vilifies people like me, trapped between two ideologies it is very important that I/we [critical thinkers] hear some sort of support. I am hopeful we are able to make some small inroad but we are also human and need encouragement.

Trying to build; I'm sorry to read this. No one should go through such a nightmare. I hope you get a good outcome.

HOW ON EARTH ARE ARCHITECTS RESPONSIBLE FOR THE HOUSING CRISIS Tryingtobuild

Please explain ?

Just because you are an Architect and a Property investor doesn't mean you are good at either.

I have seen a lot of people do stuff that they are bad at for decades. Now I'm not saying your bad, just that doing something wrong for a long time doesn't make good. It just makes you more efficient at doing it wrong.

Nicely put Yvil

thanks Yvil, very well put .. hope we can be of benefit to others as accumulated experience counts ...

Hahahahaha! Half of the people commenting on here are investors. But Yvil only counts the Bulls as investors. Strange and dangerous why to draw the lines.

So you're saying that half of the commentators here are not investors. What qualifies them to comment on investing ? Why don't you join a website that deals with your own profession ?

Same thing that qualifies you to comment;

An email address

What you point at here for advice is HOW to invest not IF to invest.

So its not if I want a great relationship, its if I want a relationship at all.

back to investing. So you know how to invest in housing (apparently), what you faulty logic displayed in your reply clearly shows is an inability to know if its wise to invest or not.

Otherwise you make a classic mistake on reading the future as being just like the past.

But you can be my friend because ppl like you with both feet in the market up to your neck (if not eye balls) are just what Ive been counting on to give me time to finish minimalising my risk and damage of substantial loss in this ponzi scheme economy.

Yes totally agree with you MisterB and Grendel. What Eco Bird hasn't bother to fully factor in is that the Auckland market has massively been over inflated by overseas investors in a relatively short period of time (Roughly over the last seven years or so) where wages haven't been able to keep up with prices.

Now that the top end Chinese buyers have gone effectively locked out of the overseas markets by their own government there's no one to keep up those over inflated prices. So the RE's like Eco Bird are desperately trying to convince investors and FTB's to buy in a falling market.

We all know that the Auckland market has much further to fall and the top end Chinese buyers are highly unlikely to return in the numbers and more importantly with access to large amounts of capital that we've seen in recent years. So it is best to wait for the market to bottom out and that could take up to two years.

article: China’s PBoC Announces An Army of Over 400,000 To Prevent Money Laundering
https://betterdwelling.com/chinas-pboc-announces-an-army-of-over-400000-...

I can see why you buy property and don't own real business. What you describe is gambling on an ever increasing asset price plain and simple. All the bullshit aside, that is a losers game.

The problem with Kiwi's is they buy and sell far too often, whats the average amount of time people here stay in property before selling ? 3 or 4 years ? I have seen all my neighbors properties change hands at least twice in 12 years. Also I think you forget that once on the ladder you are only selling because you want to buy another house, either up size or downsize so the core number of properties for sale or available doesn't really change. The population is increasing, thats a fact and everyone needs somewhere to live.

That does not make sense when prices are dropping in Auckland.

Hahaha. Late one morning in 1987 my secretary snuck into a meeting and stuck a notr under my nose saying the share portfolio had halved in value.
That could never happen in property - no -never - it couldn't could it? - no - of course not.

Well said keywest. Don't listen to IgnorantObserver he has never bought an investment property and he has zero experience.

But neither do you.

Wrong, very wrong, also you have no justification at all to make the above comment. This proves you just make things up

Guess we're both making things up then.

Keywest - if you havent yet sold your last one it will soon be to late !

Not on the North Shore. Trade me listings for rentals went from 280 (10/04) to 424 (10/07) in the last 3 months. A 51% increase!!!

Probably some of the ones who were in it for the easy capital gains and felt no need to rent are now having to look at renting their houses out too...interest-only or waiting for gains is less fun when the gains turn negative.

Just be a bit careful what you wish for, rents are sky high and you might end up having more tenants that you bargained for. Legally you can't just rock up to your property and check now many tenants are living in there or your tenants mightn't tell you how many.

Very true. In my little cul de sac I counted 18 cars for 4 houses.

Moa so true
In the 80s & 90s i experienced all sorts of tenants who would add extra tenants but as the contracts always had a maximum number in the agreement there was never an issue.
That was then but as you say this is now and today rents are astronomical & garages are now turned into lounges or extra bedrooms in even affluent areas.
Housing should not be allowed to be turned into a speculative financial trade. It is a necessity of life like food & water.
Fact is most of the NZ landlords income is subsidized by the taxpayer through benefit monies to house their tenants & indirectly by tenants receiving working for families extended to the middle class . Of course some landlords love to cry free market while collecting government handouts ! Breathtakingly !

If the law wasn't such an arse, you could build something reasonable to house more people in instead of a garage. The cost difference between a fully consented 2nd dwelling and a lined garage shouldn't be hundreds of thousands of dollars.

Rents follow property values, so rents are on there way down.

Toronto House Prices Crash 192k since April.
https://www.youtube.com/watch?v=hGL0ysImPCo&t=4s

Auckland, Albany House Prices Dive 13.5%
https://www.stuff.co.nz/business/property/94154549/house-prices-dive-in-...

The Crash is Coming.

Thanks for the links. How dare you compare Toronto to an international supercity like Auckland though ;P

Gee youaresuelynotserious you are seriously dumb
The 401 in Toronto is the busiest highway in ?? The entire Nth America
No not LA no not Boston No not New York
I live in NYC & prefer driving here than Torontos 401 thank you !
By way over US$1Trillion crosses the oh why waste my time educating a nutjob

... actually , I thought " areyouserious's " comment was hilarious ... saying that Orc Land is an international super city .... funny as ...

It's houses are priced as if it is in the middle of a thriving hi-tech economy ....

... instead of the reality , being the biggest village in a very poopy cow paddock ... 1300 miles south/south-west of Fiji ..

areyouserious - RNZ have been comparing Auckland to Toronto on there radio show for a long time, same factors increasing property prices, Chinese Foreign Money as one example. But since Toronto House Prices have been crashing since April RNZ have gone very quiet on this subject. No mainstream media wants to go there. The Crash Is Coming.

Are you serious ? your houses must be made of unobtanium.

Really ☺️

Is This Man Talking About Auckland ?
https://www.youtube.com/watch?v=zYVNpZVajAI

It looks like the late investors are already trying to squeeze through the exit doors.

10
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The pattern in Auckland is particularly relevant, and I believe that the stock of properties for sale relative to sales is the biggest indicator of where house prices will go. In the same context, the comments about the number of vendors taking their property off the market while they wait for better conditions is an insight about how slow vendors are to recognise the changing market.

On my comments on the REINZ figures I was challenged about my prediction of a 20% decline. However, that that would only put prices at around 2 years ago, and bring the ratio of average income to house prices to around 8:1. I believe it is a realistic estimate.

I think your figure of 20% is conservative. To return to the historic average income to price ratio of 4 requires prices to fall another 50% and that is what is scaring the s**t out the RBNZ and major lenders globally.

I think the long term average price to income in Auckland is 5 or so. But yes, it requires a 50% drop in prices to get to the long term average. And this is an average, it has been +/- that from time to time. And I agree, 20% drop sounds to me very underdone.

Well firstly let's agree that the multiples of 3-4 which apply in many countries are too low for Auckland, given NZ's preference for stand-alone and unique houses, high construction costs plus our relatively low incomes. I think the multiple of 5 may be appropriate, but in part provided by the production of more apartments and townhouses. The Auckland housing has a very large proportion of standalone houses compared to say Sydney.

It is interesting to see that Wellington prices rose quickly to the around 5 times income, and have then halted. I think this is the price level that allows new houses to be added to the market, given our building costs. Wellington real estate agents talk of at current prices purchasers opting for small new town houses over older villas.

My guess of 20% assumed that at about that level the market would stabilise, and then well paid first home buyers could start to reenter the market but there would be minimal property increases for a sustained period.

Imagine if the prices fall by 100%

am imaging the bliss right now... happy BM!

The typical property crash occurs with a surplus of new construction and lax lending, think NINJA loans in the US. Regarding NZ, a crash is unlikely to occur with a housing shortage, and an investor 60% LVR and a owner occupier 80% LVR. Auckland property will decline, probably max 10%, if you are looking for a US style crash it is not going to happen. Note the LVR restrictions could return to their previous settings with the stroke of a pen.

Australia is getting a surplus and NZ young people can move there quite easily.

So two real estate agency's have confirmed dropping prices to backup the Reinz and QV data. Will the Govt tell us this is a good problem to have or will they deny there is a problem?

Bill English will say it's a problem of success, and manage to alienate more voters.

Didn't Nick Smith recently take credit for the prices coming down, too?

In that case, investors will be able to thank Dr Smith for capital losses in place of expected capital gains.

That's right, and if they can control house prices, why didn't they start doing it 9 years ago when they said it was an issue then?

Maybe they were waiting to cause a crash?

Perhaps they have a lot of cash-rich friends who are waiting to pick up the pieces cheaply?

Must be that there are more 'have not's than 'haves' driving the polls? Best change tac there Bill, polls tell us expensive housing is no longer a good thing...

You're dreaming dictator! Bill and his cronies by a landslide!!!!! Am on a bet with yvil for a 6 pack, that the Nats take it all the way without Winnie.

moneyphobe, I thought the problem was rising prices, now you say the problem is declining prices ?

Dont think just follow what your are told.
and maybe read with more attention to detail..

:) well, dont just follow what you are told coz that can be wrong, so again: which one is the problem:: going up or coming down?? or is it we are supposed to moan both ways :) ??

Base on Yvils insist that you both have so much experience, I would have expected a better grasp of nuance and sarcasm.

Wonder what nick smiths insulation rules are going to do to the rental market - maybe the landlords will sell instead of hassle insulation installation, that will kick in 2019 or has kicked in with enforced tenancy lodgements? At the end of the day, more supply – less price.

Just as an aside, the ANZ has a Serious Saver account, though I don't think a lot of their customers are able to do any serious saving.

Serious saving is done by paying off your Mortgage faster. Its why I did not bother with Kiwisaver, the long term return on paying off your house faster equates to hundreds of thousands of dollars.

Is anyone privy to what the Master Builders Association is saying, is the demand for new housing dropping, there seems to be a lot of building companies advertising on Trademe, I don't seem to remember that being the case over the past few years.

lots of sections on the market developer can't get the loan to build and they can't sell after completion as buyers can't get to loan to buy. the economy will feel this very soon.

That is what I thought, the reason they can't get the loans is because the prices are too high, they can't afford to pay off the loans. It is not the banks at fault or the lack of land, it is the ridiculous cost to build. It also seems to me that vendors selling existing homes were basing their asking prices around new builds. If the new builds start to drop...

I have a builder in the family and he has told me that his employer only makes around $40K per house per new build after paying taxes and salaries, so yes they are on thin margins and it only takes one or two customers to default on their payments before a building company hits the wall. He has a backup plan for his next job if this happens to his employer.

16
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Simplistically, incomes are the primary driver of rent, rental yield is the primary driver of investment property prices. High migration with the absence of income growth is a signal of low quality migrants. Low quality migrants do not have enough capital to sustain long term capital growth, so the migration argument is void. All that happens is you have greater density of migrant living (and a distortion of perceived housing shortage). We are stuck in a Ponzi, a churning of new money with no growth from output (rent), which is not sustainable long term. Money and especially credit is finite, otherwise we could all go to the casino, bet on black and if we lost double the bet and repeat until success. There is no free money for all, there are always winners and losers. When the masses are doing it, things are out of balance and it usually means they are about to become a loser.

By your definition of Ponzi then every market in the world is a Ponzi scheme, as there are always early and late entrants, I think the use of Ponzi is a little over done on this website if you asked me

13
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There can never be too much Ponzi on this website!!!

But the Ponzi is definitely overcooked in Auckland. It's a bubble, has been for quite sometime, no doubt about it. Although, I guess we all get to form our own opinion on that and act accordingly.

16
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A Ponzi scheme generates returns for older investors through revenue paid by new investors, rather than from legitimate business activities. Think you missing the point, the growth experienced in Auckland has been "Ponzi" in nature because the revenue from rent has not kept up rather it is pumped up by new entrants. Some other markets are you right but not all, on average their returns and associated price are linked to their legitimate business activities, think dividend growth. The markets that are Ponzi in nature, i.e. high P/E ratio have to either experience high future earnings growth or they crash. Rents in Auckland can't have high future growth without a substantial increase of incomes (something that is improbable due to lack of resource growth or productivity), so this leaves the latter option being probable.

14
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Spot on. Most finance given to investors for probably 4-5 years now has been "ponzi" finance by definition, i.e. insufficient income to cover holding costs let alone pay down principle.

Forget getting side tracked by snazzy words like "ponzi" the key point in the above comment is " Simplistically, incomes are the primary driver of rent, rental yield is the primary driver of investment property prices. High migration with the absence of income growth is a signal of low quality migrants. Low quality migrants do not have enough capital to sustain long term capital growth, so the migration argument is void. All that happens is you have greater density of migrant living (and a distortion of perceived housing shortage)" Agree wholeheartedly and we also keep allowing ourselves to be fooled with migrant numbers convienently forgetting the low wage temp visa and student visa numbers all of whom have to live somewhere, buy a car to add to the road chaos, and work for min wage or less. Whoopy Doo NZ aren't we lucky.

17
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So the market has " cooled" has it ?

We it needs to be bloody well ice cold before anyone can afford it

11
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Agree 100%.
Two of my kids taking 1 step forward and 3 backwards in their quest for their own home.

Unless prices plunge significantly they'll probably have to leave Auckland.

Brighter future and all that.

In the Auckland market the trends have been even more dramatic with the number of Auckland properties available for sale in June up 52% compared to June last year, while the number of sales during the month was down 27%.

Same pattern is happening in the other gate way cities especially in ones that got a sudden surge of foreign investors like Toronto. Such is the folly of relying on overseas investors and allowing them to decouple our property prices from wages.

Article: Toronto Detached Real Estate Sees Inventory Soar 118%
https://betterdwelling.com/city/toronto/toronto-detached-real-estate-see...

Sales may have dropped off, but prices appear to be more or less static. My take on this is that anyone looking for a home, and who has the money, is not in a bad place to buy, as a low ball offer may be accepted. I am not so sure about buying property as an "investment" though. I did the maths a day or so ago on a property that looked promising (area and price etc). Ultimately I would have ended up subsidising a tenants' rent to the tune of $200+ a week, and if interest rates rose to 7%, would have found myself within spitting distance of economic disaster. Without the prospect of capital gains, the whole scenario was frightening. The possibly of declining prices would have just kept me up at night.

and in all probability the entire rent would be paid for by the NZ taxpayer

Why buy something now when you believe it will be cheaper in 12 months time? Why buy something now when you don't have to, you can rent it instead? We may be entering a classic debt deflation trap. I think this process has barely begun, better to wait.

Well its winter and traditionally markets take a dive in winter .

The difference now is that all the key metrics compared to last years winter have taken a dive... does not take much to scare the horses.

An election does 2 cent, an uncertain one especially !! the horses were ok last election and were not scared as the race result was predictable - not this time, well Not Yet !! the closer we get to September and if the polls start swaying either way , you will start seeing some action ( either way too) ... Property investment is not for the faint hearted, houses are not Shares and they really don't have a P/E as such ...its a different ball game.

" you will start seeing some action ( either way too) "
In your previous post in this thread you said there is no better time than now to buy ... and yet here, indicate a reason to wait.

"houses are not Shares and they really don't have a P/E as such ...its a different ball game" -- which is the point, they should be, when viewed through fundamentals. Therein lies the whole problem.

Who said Wait ??!! read the post again please..

There is a problem of becoming too fundamentalist and theorists ignoring real life and what goes in it - the property investment trade has been here since the year dot and it works outside many fundamentals .. it is based on opportunities and calculated risks .... it is only profitable ( just like any other business) when calculated risks are taken based on informed decisions ... there is a lot of gut feeling in this depending on experience - No recipes , No pills, and no text books or a page for every case. No one cooks the dinner and plate it for you and it doesn't happen by reading economy and investment books either!!

Every market and industry has its rules and secrets of trade - it will be really naive to use one yardstick to measure one against another. I have successful investment in shares too so I know how that asset class is different. Buy low sell high doesn't apply on everything !!

To me , it is a good time to buy now ( but that is ME ) , and I am in the market looking for a gem or two for my kids FHBs - I know that nothing will change -- but that is my gut feeling and prediction and ready to put my money in the market again accordingly.

If anyone is in the market for a house and finds a property that suits him and his budget then buy it now ( if you can) ... that property might not be there next week , next month and you will start searching all over again when the rush happens. You have the opportunity to buy it at a discounted price now if you really know how to value the property. Once bought, never look back and never question its daily value !! unless when you sell it.

There is no "they should be" in the practical business world there is only "what is currently there ! " and how to deal with it or else an opportunity is lost - Ideals make good dinner conversation topics and makes you feel good, that's it.

Today is different from Yesterday and will be something else Tomorrow ... so seriously,
I' am not waiting for the cows to come home !

You said " the closer we get to September and if the polls start swaying either way , you will start seeing some action ( either way too)"

I did not say you SAID wait, I said you gave a good REASON to wait. Volatility in markets is a reason for rational investors to wait.

The mantra "there's never a better time to buy than now" show's clearly it's not about a rational investment decision as much as it is about gold fever.

MisterB, you did not like nor understand what I said in my last two posts re this subject and you are still counting $$s and cents in a a+b=c equation with pure common sense and logic .... But that is not how property investors think and act !! ...

Gold Fever? ... You bet it is ... Why do you think every man and his dog rushed to buy property in the last 3 years ?// money is made at such times when people are desperate and selling at lower prices because they think the market will further go down. Some idiots like to define Speculation as a dirty word ... well is it? why is it ok to buy shares when speculating that the market will rise? Most buyers in the last two years had at least 20% added value on their purchased property in Auckland, QueensTown, Hamilton and Tauranga. So were they wrong??

There could be plenty of reasons for a home buyer or FHB to wait ... fear of loss and of making the wrong decision is the first one, limited budget, peer / family influence and bad advice are just few. The biggest one is the illusion / hope that they will gain 5 or 10 % if they wait few months or years, exactly the opposite can also happen when similar people start buying again, then prices will go up and good properties will be gone - that is why I said if you find what you want, Buy it Now !!

In 2010, Bernard Hickey was advocating the same in a NZ Herald article titled: Why house prices will fall 15 per cent - this has since been removed:
http://www.nzherald.co.nz/personal-finance/news/article.cfm?c_id=12&obje...
but follower of this kind of advice have lost big time ...

When there is chaos there are opportunities and gems to be found.
Best time to Buy is when everyone else is Selling ... that is fundamental... right?
I rest my case...

BTW: opinions and thoughts above are my own personal reading and analysis of the market and shall never be taken as financial advice or recommendation. Do your own homework and seek some professional advice.

Er nope. I perfectly understood what you meant. I just posture that is the underlying issue in the market.

From the horses mouth you accept that "investors" are not thinking with common sense or logic. To be fair, you can only speak for yourself, but you did confirm it.

Let them eat cake eh.

Conversely, the best time to sell is when everyone else is buying....but very,very few people have the courage or foresight to do that. Most people buy ( any asset) and sit on it if the slightest hint of deterioration in price is suggested. It's those that 'took the hint' last November that had the courage to chance a buck on the way down that will likely do well from this new trend. What usually happens when prices deteriorate is people refuse to sell ( for all the reasons you list above - Property always goes up being the obvious one) and so far it has and if prices continue to slide, they end up trapped. Any leveraged acquisition has a break even point that is amplified in both directions and the horror of price falls is rarely considered. In a World where the market can stay irrational longer than many people can stay solvent, irrationality works in both directions.....

bang on.

I suspect the smart money has already left the table.

We know sales dip in winter but look at the comparison in Auckland in June this year compared to last year. Massively down

If its winter and property prices take a dive, and if the property prices take a dive because of a bubble popping then it must be like dive dive with a submarine and the property market is under water.

I will get my coat.

So where do you see rents going if prices halve like some of you are suggesting?

For Auckland, static or down. The will only be rent increases if there are income increases, which doesn't seem likely on any scale. If more houses come onto the market as rentals as they can't be sold that will put downward pressure on rents. If we get a serious recession that will impact incomes and also push rents down. As prices drop rental yields will return to more normal levels, yields are currently about 50% of their historic levels. As even the current high levels of immigration has had little impact on rents in Auckland I don't see immigration having a big impact on rents absent income increases.

Wow if love an Auckland rental or two at an 8 percent yield! !!

If interest rates are at (say) 6.5%, doesn't a yield of about 6-7% sound about right? You will would be covering debt service but getting no yield on equity assumed @ 20%? But even then, you get no net yield and are entirely dependant on capital gain. So it's hardly a bonanza.

Better to stick to 8 to 10 yields down the line.pay down debt and wait

You guys obviously have zero business acumen.

Sorry, which bit did u disagree wth, Mr Buffett?

8 - 10 % is crap considering the risk

Rents have been disconnected from property price in Auckland for a while. They are not under the same downward pressure.

Rents are surely set by the number of people queuing up at the door wanting to rent it ? while we have high immigration and have 20 people wanting your house to rent, why would the price come down ?

In short - static at worst and upwards at best. Rents have long since been disconnected from property prices in Auckland - and with a further increase in accommodation supplements and WFF payments - there is scope for increases.

Ultimately whilst the number of people wanting to buy/own their home or who are financially able to do so might fluctuate both up and down in large numbers - the number of people requiring a roof over their head is only going upwards - so pressure on rentals is increasing as increasing demand exceeds new builds.

The only way this wont be the case - is if a large number of the 25000-30000 empty properties are rented now that investors are not seeing strong capital gains every month.

I see rents continuing to increase. Rents are driven by incomes, accommodation scarcity and how many people you can compress into a space. Incomes are rising slowly, accommodation is scarce and in some cases more people are cramming into a property. Therefore, rents will go up. But property prices still need to drop to meet rents.

Are Winter & the Election the new Chinese New Year?

the market has cooled/turned/plateaued/stagnated whatever you want to call it, but it is still a game of hold em or fold em.

Some sellers are taking properties off the market (holding) and some are holding for a better price and very few are selling.

If all the sellers hold then that may hold the prices, but can you trust the other 10,000 Auckland sellers not to fold, because if and when they do the floodgates may open......

and the best that you can hope for is to die in your sleep ...

The number of interest only loans that, if there are no future capital gains and rents are static while rates rise, will surely start to get really boring for the owners....if they all sell up, could that be the tipping point?

People will hold with interest only loans until the bank decides otherwise. I'm expecting that it will be those that end up in difficulty that will be forced to exit. Climbing interest rates risk causing a widespread issue.

Of those that I know who have purchased additional rentals have used the equity in their family home - so question how far drops go before the banks start getting a bit uncomfortable...

I suspect the banks have been uncomfortable for a few months. The lack of mortgagee sales in Auckland compared to the current listings is telling.

Sounds like a dangerous game.
If I had an investment property I would personally sell right now regardless of the game the rest of you think you're playing (actually I would have sold a while back)

This is what I would do, markets not moving up. Interest rates only have one way to go. Sell now and wait for a bargain, or sell now and wait. But definitely not buy.

Glad I sold 2 years ago, not quite the peak but the timing was good. The situation now is hold and wait out the 2 year dip. The deciding factor is what happens to interest rates, if they hold steady then the housing market is just going to follow the usual cycle of taking a dip then recovering the losses. Any sharp rises in the rates are going to hurt if you didn't factor in the rates getting back to 6 to 7%.

It's 'time in the market' not 'timing the market'
Can you not see how much your speculative attitude has cost you already, or are you blinded by your ideology?

Whereas previous price pull-backs have been fairly short-lived due to one-off events (bright-line etc.) this is a wholesale change in market sentiment. In spite of the excuses such as "it's winter" or "wait until after the election" there is no longer any denying that the market has fundamentally changed. Even the cheerleaders have changed their tune.

Unlike sharemarkets, property markets crash in slow motion. This is the rolling top and we are now over the brow. New Zealander's have an extraordinary belief in property as an investment which together with hot overseas funds has driven this market to stratospheric heights.

The overseas funds have dried up, banks are becoming increasingly nervous, yields at record lows, price/income ratios record high, wage inflation tepid, global interest rates and financial risks rising etc. etc.

We have seen before what happens when NZ'ers fall out of love with an asset class. Could it be property this time?

Please note that there is still very good economy and people are in the position to pay high rents. All the rentals (and majority of the properties on mortgages are rentals) are easy to rent.

The moment the economy slows down - it may be that people will loose some jobs, will seek alternative accomodation. The moment that happens and the rental is empty - it will be a blood bath. Everyone knows it so this is why the immigration is 'ON' to keep the demand for rentals high. they will not turn immigration down as that would cause problems for rentals, investors and the banks...

In my view - there will be a problem, big problem sooner or later.

Yes. Auckland is in trouble, even though many people don't realise it.
In my daily work I see a lot of the gravity shifting from Auckland, to Hamilton / Tauranga.

Ultimately, I think there will be an adjustment. Fewer young people will move to Auckland, more will go to Hamilton, Tauranga, Rotorua. We'll see a big downturn in low skilled migration to Auckland. Higher birth rates will continue in the Polynesian demograhic, but disproportionately that will affect Housing NZ not the private market. Many ageing boomers will shift out. Less Chinese money coming in.

I'm not predicting a total collapse in Auckland prices and rentals. I am predicting a significant drop away then flattening.

I have been seeing the same trend, Fritz, RE business operations shifting regions.

Like you I don't envisage a total collapse, but the adjustment is going to be significant. I'd say at least all the supernormal gain from the past 4 or so years will be wiped out over the next 10.
However...
God help us if the Australian market collapses, dairy prices drop or tourism declines substantially. If that times in with this, it will be a bloodbath.

Ultimately though until New Zealand governments stop selling the idea to blissfully unaware constituents that we can get rich by selling things to ourselves, we'll always be in a predicament not to different from what we have now.

I'd say at least all the supernormal gain from the past 4 or so years will be wiped out
Nymad you have no idea what you're talking about. I imagine you could be in your late 20s early 30s to make such a short sighted comnent

Prices have been increasing because banks have been prepared to lend larger and larger amounts to investors, often on an interest only basis. Interest only loans are purely a device to increase leverage. While there will be a required level of equity, that equity is calculated not as a cash contribution but by reference to equity in other property owned by the investor (which is itself increasing as a result of the increased levels of lending). This lending has now produced household debt of 180% (?) of household income. That's unheard of in NZ. If the banks were unwilling or unable to lend at that level house prices will drop, that is a certainty. It seems to me we are now at the point where the banks are no longer willing to carry this type of risk, and credit is tightening and will continue to tighten. Plus interest rates will increase. If we went back to 2013 prices (30% drop at least) prices would still be well above the long term average for both incomes and yields, and would still be severely unaffordable. So it is entirely possible prices could go back 4 years, in fact I think it is probable they will fall by at least 30% in the next few years.

The lesson the banks appear to have learnt from the 2008 meltdown, is that you don't lend massive amounts to people on low incomes, as they can't afford to make repayments. So instead what they've done is lend to people with equity (realistically average credit), so they get themselves in massive debt, which they also can't afford, it's exactly the same product, rebranded, repositioned and remarketed. We will see exactly the same outcome.

"We will see exactly the same outcome."
The last thing we need from anyone is to curse the economy (and the country). You have your choices of political parties come election time but please don't be so confident that the economy is going to crash. No one will know until it actually happens.

Toronto House Prices Crash 192k in 3 months.
https://www.youtube.com/watch?v=hGL0ysImPCo&t=4s

Auckland, Albany House Prices Dive 13.5%
https://www.stuff.co.nz/business/property/94154549/house-prices-dive-in-...

The Crash Is Coming.

Data shows that whereas households aged 55 years and over had debt-to-income ratios less than 50 per cent as recently as 2002, today this number is converging on 100 per cent.....This is being exacerbated by the popularity of "interest-only" lending with the banking regulator revealing that 40 per cent of all home loans now have no principal repayments....Many retirees will arrive in their late 60s and 70s with debt-servicing obligations for years to come.....One clear solution to deleveraging debt and making housing more affordable is removing the potent influence of excessively cheap money....(this will) provide borrowers with incentives to reduce their debt-to-income ratios, and liberate cash and annuities as realistic options for the elderly.

http://www.afr.com/opinion/why-high-house-prices-will-hurt-in-retirement...

Very soon stalemate will come I'm not selling I'm not buying, but it doesn't matter what people say the market isn't made up of only the people who brought houses over the last 3 years, probably a small % , over time someone always sells and there'll be a lot more people in Auckland and nz that payed miles less than the 2007 prices and even 2010 prices, the future house prices aren't all about only the last 2 years of market people, also if I had a ghost house that was going down in value I'd sell and there's a good chance renters will buy them and there's a good chance also the owners of these ghost houses or houses payed 30 to 50 % less than there price now, BUT FOR HOW LONG WILL THEY WAIT AND DUMP, but I don't think rental rates will drop that much, the need is just far far to high, I'm not saying that because I'm a landlord, I am but commercial buildings, I do have one rental house but I'd never sell it and rented to family for $250

Ps I strongly think nz house prices will hopefully SLOWLY slide back to 2007 prices mainly over 2 to 4 years, because that's the last nz high of affordable prices, OF COURSE if the numbers of under water investors and overseas investors get to scared and Exit to fast and wouldn't blame them , all bets are off,

I don't see that as a possibility.
I think the relative affordability measure might converge to that point, but definitely not prices. To hope for that is just unrealistic.

I didn't say I hope, I said hopefully slowly

Time to look for the next speculative amazingness. Personal plates ? Phone Cards ? hmmmmmmm lets have a share party !!!

'Green' energy.

Would a drop of 30% get us to the 2007 price highs? , Maybe the rest of nz , auckland maybe not

NZ Top 20 Suburbs Based On Median Home Value & Annual Growth.
1 Herne Bay $2,498,300.00 (8.00%)
2 St Marys Bay $2,239,100.00 (7.00%)
3 Remuera $2,053,500.00 (7.00%)
4 Stanley Point $1,929,850.00 (2.00%)
5 Campbells Bay $1,871,450.00 (4.00%)
6 Epsom $1,843,200.00 (2.00%)
7 Ponsonby $1,799,350.00 (7.00%)
8 Westmere $1,796,900.00 (3.00%)
9 Orakei $1,781,300.00 (5.00%)
10 Mission Bay $1,771,900.00 (4.00%)
11 Kohimarama $1,732,900.00 (6.00%)
12 St Heliers $1,703,450.00 (5.00%)
13 Takapuna $1,666,550.00 (5.00%)
14 Parnell $1,663,750.00 (9.00%)
15 Devonport $1,654,950.00 (0.00%)
16 Castor Bay $1,642,950.00 (2.00%)
17 Glendowie $1,630,600.00 (3.00%)
18 Mellons Bay $1,623,800.00 (5.00%)
19 Narrow Neck $1,513,050.00 (0.00%)
20 Murrays Bay $1,490,000.00 (2.00%)
Source = QV.co.nz

your point, other than gloating?

... that Orc Land is our greatest soap factory , on account that it has more bubbles than any other spot in our nation ...

Agh! To all the green eyed leftie sideline commentators; welcome to the real world. Up down round & round; if you have skin in the game well done and keep growing your nest egg. If you don't, jump off the tall poppy bang wagon because you'll still be whinging in your 80s, pulling the 9-5 because you can't afford to retire and the government groaning under the weight of an aging population has opted out of paying you pensions. Investors; property, shares, gold whatever... well done.

And all the people who did jump in and put their family home and future retirement at risk because they "invested" in Auckland property at the peak, and the rent doesn't cover the interest....

What do you say to them?

It's not wrong to be worried for the whole impact on the economy of an overstretched and over-debted generation.

Um I'm not sure I'd say much to them to be honest. Everyone has a choice in life and buying on FOMO probably not the smartest way to risk you & your family's future? But should the rest of us need to pick up the pieces? I mean let's face it if I had no experience in running a restaurant for example & I failed miserably, would it be reasonable to feel like everyone else should come to my rescue? But if you bought, can afford it then perhaps sit it out. Check the long term property growth graphs; always trends up

Creepy viewpoint there propertyminx. Instead you should be aware the damage extended to folk who had no intention to be 'investors' at all. Thought about first home buyers ? Screwed both ways - as property went up then as it went down.

No that's perfect KH first home buyers or home owners who are investors by default are not in it to make a quick buck so... no harm no foul?

Astounding lack of concern for others.

No harm no foul if FHBs have to pay inflated prices and commit to lifetime of massive debt? Of course, as a property investor you don't want them to buy, do you?

If you pump up the price so no one without equity in the same market can buy, then you make the value of your asset appear better because you reckon you can pump up rents too... and so the cycle goes.

I'm sorry if i have caused you offence MisterB. Let me caveat my view. I am in the age group of the first home buyers only I worked my butt off and scraped together the 10% needed to buy my first property (which was a dive by the way). Renovated and leveraged and so forth. Some luck in my jobs has helped but I work as hard as anyone and I just saved my money early rather than spend it in nightclubs or whatever. I feel for FHB in AKL today of course I do but I also acknowledge a lot of them turn their noses up to the 3 beddie in Papakura for $500k or buy outside of AKL just to get on the ladder. Like with most of us, we all started with a dive & worked up.

Good on you Propertyminx, ideal example of what smart young people should do ...unlike others who think they are owed a refund for their properties which slightly slid lower in price in a perceived market price ... and cry like babies !... blaming everyone else for their unsubstantiated problem !!!

who's asked for a refund?

Is it ideal or smart for a person to struggle to get 20% (not 10% now) deposit on an entry level $750k loan (how does one save $150k while still in 20's on median pay) to still be stuck with a $600k loan - interest on which is $580 p/w (more than median rent) ... and then, because the market has corrected to fundamentals, their $750k house is now worth $600k and they find themselves with no equity ... and the bank can call in the loan.

Smart.

Not offended, just identifying the root cause of a property bubble. Happens everywhere. Greed always drives bubbles and anyone that thinks otherwise is naive or un-read.

A quick glance at trademe quickly identifies that the 3 beddie in Papakura for $500k doesnt exist anymore. Although, with a correction, it may well do again. Since that's about the fundamental worth.

I'm with you propertyminx but your in the minority on this site, your just going to get shot down in flames or called weird coming out with statements like this. Subsequent generations have a whole different way of thinking, I see it everyday because I have a connection to it. Apparently its all about having a "Dream" these days rather than having a goal, the problem here is we now have a generation of "Dreamers" rather than a generation of "Goal scorers".

Correct, Some ( not all) in this generation has been educated and influenced to have High expectations, ready made meals, milk and honey, for minimum hard work, start with 60K wage ... a generation who thinks that working 40 hours a week is excessive and too much work, and house prices should stay still where they are for years until they can finally decide to scramble some deposit together and buy one of choice ...or expect the state to hand one to them on a plate for next to nothing -- because it is their RIGHT !!
and everyone else who passed them in the queue are senseless, ill considerate and selfish !!

I am Not bashing these people - but it is useful to put the finger on the wound sometime and call it how it is in a hope to rectify it and a wakeup call -

That's not the point.

The point is that when a median wage cannot afford a low quartile home, then there are down stream repercussions. Where will the teachers, service industries, retail operators, etc all live? Too bad if they want to own eh... they must be lazy for not being able to.

I tend to agree Echo bird. There are houses available to buy but it's not in Ponsonby so not to the 30 somethings taste. Ok maybe extreme but you get my point. MisterB do we then have a wage issue in NZ rather than a property issue? Back in 2010 house prices were cheap based on other international cities perhaps AKL has just caught up albeit in a really short amount of time.

Where are the $500k houses in Auckland then propertyminx?

Median Auckland HH income is somewhere around $90k ... so by most affordability and servicing calcs, reasonable loan would be ~$400k...

We have a wage issue, yes, but given wages and housing are intrinsically connected, which one, one balance of probability, is more likely to correct - the cost of housing, or wages?

Median HH income would need to lift from $90k to $130k to attain the same affordability... so how does a 44% wage increase come without mass lay-offs, tax increases etc.

Many economists point to the property obsession as a contributing factor to wage suppression.

Well Trademe says there are 445 $500-$500k properties in AKL....

1) Filter to 2 bedroom or more = 230
2) Filter to 3 bedroom = 110
3) Most of these are not advertised with a price and many that are have ones > 500k, but trademe and.or the seller wants them to appear in the filter.

Filter yellow with pink polka dots, = 0

Your on the wrong website, we're talking about property.

Also not so sure that in 2010 prices were cheap (be interested in a source for this)

But here's a real warning sign:
http://www.imf.org/external/research/housing/

NZ tops the list with increase in price v income - 137% of where is was in 2010 .... worst on the list.

This site needs more stereotyping of young people. There's simply not enough!

And most disappointing no reference has been made to smashed avocado!

I tend to agree Echo bird. There are houses available to buy but it's not in Ponsonby so not to the 30 somethings taste. Ok maybe extreme but you get my point. MisterB do we then have a wage issue in NZ rather than a property issue? Back in 2010 house prices were cheap based on other international cities perhaps AKL has just caught up albeit in a really short amount of time.

Well said propertyminx but you will make many enemies on this site, suggesting we are responsible for our own fate. Most prefer to blame... the government... the rules, others, you & I, the time when they were born...

I'm a right-wing voter and a debt-free homeowner with savings and nowhere near retirement, and the Auckland housing market has changed significantly. Your theory doesn't wash with me. I am far from envious of all the debt that my fellow Auckland friends have taken on in what appears now to be a sinking market. I feel sick for my friends who rode the speculative bubble and are also facing rising job insecurities. Auckland has changed for the worse, sadly.

Auckland is becoming a shit heap. Even the pleasures of going to its great beaches are losing their luster as getting to them becomes like a rush hour commute

The beaches are pretty 'shitty' too ... Also the amount of rubbish stuck in the mangroves festering away is criminal - it's not the freedom campers we have to worry about, it's us

So property is the only way to make money? Hmmm interesting.

Property was the only way to make serious money because the wages in NZ are SHIT. There have been plenty of weeks over the last few years that my house was making more money than me. Both of my parents only got where they are today through smart property decisions.

Wages are that way precisely because NZers are obsessed with chucking capital into inflated property markets and not into productive assets.

:) Ok mate , with that specific comment you proved that know nothing about this subject and just looking for excuses , moaning about wages, and repeating what others are saying without thinking about it ... all the best

Ok, right o then.

I am not moaning about wages per se - actually one of your property investor buddies said there was a wages problem. I was pointing to the fact the 2 are linked and either one can correct, odds on that it will be property prices.

But, for the record, I'd prefer wage growth - after all, which is the better path to GDP growth?

Inject $ into a real business that creates jobs and grows the economy in a real way v. transferring largely the same housing stock among ourselves to falsely inflate GDP?

You're right, every world economy is built off the back of housing inflation? Wait, what?

Now I now from your comment that the Eco in your name refers to ecology and not economics.

Trends up all right, say 1960 to now, but we had 6 corrections because we seem to always take things to far, 67, 75, 87, 96 , 08 and now one of the largest , each 6 times taking earnings to house prices higher, this time using overseas investors to push it threw the roof, and usually every time the correction lasting 4 years, but it's ok people are aware of these normal market reactions

Double-GZ ,Thanks for all the backward looking figures , you must have gone to a lot of trouble to put together, you do know the saying , moving up the gravy train, the guy sells his house for 500k and move up to 700k and so on , or maybe the people buying in your 1% don't need the rest of us, I guess they left school and went out brought a $2 million property

You are welcome.

The main reason there has been a downturn in sales is because of the restrictions on borrowing, that is why they were brought in to do what has happened now, if the people cannot access money how can they buy real estate? Property always keeps increasing look 10 years back and another 10 years back , when they take the restrictions off up they will go again.

I dont understand that, if property prices increase so much and people cant afford it, and banks are not lending. Who are buying the houses?

Great question. The answer is.... no one, and prices collapse

"Who are buying the houses ?" ....the people that are not wasting time on this site and just getting on with life and who are in a financial position to buy a house. If I was in a relationship and not single and younger and we were both on the average wage or better I would still be in the market to buy a house.

How do I math?

Property does always increase in $ terms over the long run. But the Value generally stays tied to wage inflation

No

Yes

Lucky we have people holding greed back then, houses at 10 million each might piss the young off, maybe 20% owners and 80% renters is the way to go,

The start of a boom and start of a correction is usually restrictions, of course it is , but why

Rental yield over current property prices hasmeant returns have not made sense for a while now. With increasing yield on other asset classes such as TDs, and capital gains on property no longer a likelihood, it seems like a good time to sell up investment property and put money elsewhere for a while. We still have a housing shortage but it seems unlikely to push rents much higher in short term due to constrained incomes. People's experiences now that you get queues to see a property but if you try and ask for 50 more you get nothing but bad quality tenants applying?

This forum is either so interesting new members are drawn to it weekly or the ability of existing members to respawn multiple times is making it a joke. Note to the moderators that it's time to start logging IP addresses or lose credibility. I'll create a few new memberships and see how strong the moderation actually is.

More comments means more page views means more ad revenue. That's ok Ex Expat, it is pretty easy to see who are the trolls and who have multiple accounts. Can easily tell by their poor grammar and bad attitudes.

er no. We get between 100 and 300 comments per day from about 50-75 commenters. That makes zero difference to ad revenues - it is far too small to make any difference. (Think of it like this, Google AdSence returns $4 per 1000 page impressions. 300 comments generates $1.20 in ad revenue.*) We get 50-60,000 pages read each day. Comments and commenters are irrelevant as a revenue source. We keep comments here because it is useful for some readers, and so long as commenters stay civil, it is a place to discuss the news. It is increasingly unique as many others have turned comments off completely.

We also post-moderate, allowing conversation. Basically we are trusting our readers to participate in sensible, reasoned discussion. Our moderation is there, but light-handed. And as a number of commenters can attest, our first apporach to moderation is to contact any offender offline to explain why their comment is not acceptable.

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* Fortunately, we don't rely on banner ads for our revenues. But the issue is the core of why traditional media is suffering. And why it is driven to shamelessly chase clicks.

I know but I like talking to myself, but the worrying part is I get a reply.

Wow imagine how cold the housing market will be if National are not re elected. And with the current polling results being published it is not an impossibility. Why the heck are people still buying in a falling Auckland market. A fool and his money are easily parted as they say.

Are you talking to yourself again gordon?

Far from it Zach. The data currently coming out of Auckland shows an escalating downward trend in values. Whereas I am diversified you are stuck in an investment sector that has increasing fear coming into it. You should sell something and lock in your current gains, if you have any.

Ridiculous. Why should I sell something and lock in my current gains? That's not what I am looking for right now even if I can sell up for a few millions in my pocket. Not everyone thinks like you.

No probs Zach. Let's see where Auckland ends up.

gordon I found an article I commented on in 2012 when the house prices were still low ;-)
http://www.interest.co.nz/property/59222/reinz-reports-softer-april-sale...

thanks for that, .... That was a nice catch :) soooo, people seem to have very short memories then !!

Actually that was me. I hadn't commented in a while and changed my handle because Zach started posting as DGZ up there.

Comical to read a headline where the situation is "worse" in Auckland. I tend to think it's better for the average house buyer.