Almost half the properties sold at latest Barfoot & Thompson's auctions

Property

Prices ranged from under $500,000 to over $2.5m at Barfoot & Thompson's latest auctions

19th Sep 17, 6:03am by Greg Ninness

Barfoot & Thompson marketed 83 properties for sale by auction last week and achieved sales on 38 of them, giving an overall sales clearance rate of 46%.

At the main auctions sales rates ranged from 44% in Manukau, to 53% at the Shortland St auction on 13 September, with results ranging from zero sales to 100% sold at the minor auctions (see chart below).

The cheapest sale of the week was of a renovated, three bedroom, brick and tile house on a full section at Tuakau that went for $495,000. The most expensive was a four bedroom/three bathroom character home in Remuera that sold for $2.52 million.

The full results with the individual prices achieved on the properties that sold are available on our Residential Auction Results page.

If you are interested in commercial property, check out recent sales on our Commercial Property Sales page.

**Barfoot & Thompson Auction Results 11-17 September 2017**
Date	Location	Sold *	Not sold*	Total	% Sold
11-17 September	On site	3	1	4	75%
12 September	Manukau	4	5	9	44%
12 September	Shortland St, CBD.	3	-	3	100%
13 September	Mortgagee/High Court	1	1	2	50%
13 September	Shortland St, CBD.	9	8	17	53%
13 September	Pukekohe	3	1	4	75%
14 September	North Shore	10	18	28	46%
14 September	Shortland St, CBD.	2	3	5	40%
14 September	Kerikeri	0	3	3	Nil
15 September	Shortland St, CBD.	3	5	8	37%
Total	All venues	38	45	83	46%
*Sold includes properties sold under the hammer or by 5pm the following day. Not sold includes properties that remained unsold by 5pm the day after the auction, plus those that had their auction date postponed and those that were withdrawn from sale.

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91 Comments

by tothepoint - d… | 19th Sep 17, 7:32am 1505763137

Interesting that auction clearance rates in Auckland have lifted a bit recently.

I wouldn't have expected it - this side of the election.

Perhaps a bit more buyer confidence is returning to the market??

TTP

by Groen_mamba | 19th Sep 17, 7:42am 1505763744

More like realistic vendors

by tothepoint - d… | 19th Sep 17, 8:13am 1505765607

But prices remain high.

by Cowpat | 19th Sep 17, 8:17am 1505765864

And 10/28 expressed as a percentage becomes 46 percent.

by RickStrauss | 19th Sep 17, 8:45am 1505767556

Hmm..yeah

by Noncents | 19th Sep 17, 8:21am 1505766081

Watching the Block auction, I think I know why.

by Brock Landers | 19th Sep 17, 8:24am 1505766283

Let's hope things are set right on Saturday.

by RickStrauss | 19th Sep 17, 10:12am 1505772742

Relevant

by Noncents | 19th Sep 17, 10:27am 1505773641

How true. My favourite has been

https://www.stuff.co.nz/life-style/homed/decor/96965186/the-block-neighbours-say-homes-went-for-too-little

by meh | 19th Sep 17, 12:29pm 1505780996

And $300k over the street's average.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=119…

I can't get over the profit figures. Given the site was purchased for $1.9M these were extremely expensive to build.

by PointMade | 19th Sep 17, 12:46pm 1505781994

Agree with your comment TTP

by Didge | 19th Sep 17, 8:32am 1505766735

And time to remember that prior to the USA debacle that created the Global FC, the popular opinion was "houses never fall in price". Yet here we are again totally over invested in housing.

by Ex Expat | 19th Sep 17, 8:40am 1505767205

Haha, and you think this reservoir of experience is going to change that?

Jacinda Ardern – nil private sector experience. Worked in Parliament, UK Government and a US union. Did once demonstrate cookware at Farmers though.
Kelvin Davis – nil private sector experience. Worked as a teacher or for Ministry of Education.
Andrew Little – nil private sector experience. Worked in student politics then unions.
Grant Robertson – nil private sector experience. Worked in student politics then MFAT and Otago University
Phil Twyford – worked as a journalist for the Auckland Star and a promoter for Book Month so the first Labour MP to have some private sector experience. Otherwise worked for Oxfam, including as a lobbyist in DC for them.
Megan Woods – has been a copywriter for a private business, and did business development for a CRI.
Chris Hipkins – nil private sector experience – student politics, an Industry Training Organisation (Govt funded) and Parliament
Carmel Sepuloni – nil private sector experience – teaching, NGOs and university
David Clark – nil private sector experience – Treasury, church and Selwyn College

by Didge | 19th Sep 17, 8:43am 1505767427

It will be enormously larger forces than our political parties that will create a rebalancing of equities.

by NZXY | 19th Sep 17, 9:02am 1505768524

How much experience has BE got? Well he has lying experience and receiving money that wasn't his experience. Oh but he's a farmer - really how long was he a farmer for? And he has a degree - but what did he major in?

by Ex Expat | 19th Sep 17, 9:06am 1505768793

For balance, here is what they wrote for the National bench

Bill English – farming when young (but on family farm, not his own)
Paula Bennett – worked as a recruitment consultant
Steven Joyce – set up his own company when almost a teenager and turned it into Mediaworks
Gerry Brownlee – carpenter
Simon Bridges – lawyer
Amy Adams – farmer and lawyer
Jonathan Coleman – General Practitioner and business consultant
Chris FInlayson – lawyer
Michael Woodhouse – private hospitals CEO

by RickStrauss | 19th Sep 17, 9:59am 1505771950

Should straighten out the bit about Bill English - it looks like it was within 2 years after uni, before entering his next 30 years in Treasury (2) then parliament. Bill is a consummate career politician.

Notable that the PM - who many here seem to like and trust as a leader of the country - is a career politician and policy wonk. Though apparently this is a special exception and dose not apply to other career politicians.

Paula Bennett, yes, mixed roles from social work, electorate secretary for McCully, and recruitment for a few years. And beneficiary, back when the support was enough to get on one's own two feet, get training, buy a house etc. on the taxpayer...then notable for her harsh cutting down of benefits made available to those following her. Wonder what inspired that?

Also, Gerry Brownlee was a school teacher for 12 years (trained as a carpenter, did a little) prior to his career in politics.

Worth a mention too, Todd Barclay: tobacco lobbyist and freelance surveillance specialist.

by RickStrauss | 19th Sep 17, 9:54am 1505771670

You forgot Jian Yang's experience - what about that? Very surprising omission of such a strong ~~Manchurian~~ Chinese candidate.

Some further interesting commentary on that today:

what of our media? Credit goes to Newsroom (and the Financial Times) for breaking the Jian Yang story. But what of our mainstream media? They seem to have given the story some initial coverage, but it has tailed off since then. I hope that is an incorrect interpretation, but a week out from an election it was striking that there was nothing at all about the story in the Dominion Post on Thursday or Friday, or – as far as I could see – in the Herald on Saturday.

And yet this is a story about a government MP, actively recruited by senior National Party figures to in some sense “represent” the Chinese community (identity politics rule, as Stephen Franks notes), who appears to have hidden – from the public at very least – his active membership in the Chinese Communist Party and his service in the Chinese intelligence services, and who appears to remain close to the Chinese Embassy.

At very least, there are allegations of SIS investigations – paralleling similar investigations around Chinese-born politicians in Canada and Australia. And there also seem to be suggestions of incomplete, or misleading, disclosures when Yang sought New Zealand residency and/or citizenship. It seems as though it should be a major ongoing story – with tough questions for the Prime Minister, the National Party, John Key, the Minister of Internal Affairs, and (for that matter) the leaders of other political parties.

As I noted the other day, perhaps he hid it from the National Party too, which would speak very poorly of their candidate vetting. Or he told them, and they didn’t care, (and perhaps even told him to keep his past quiet) which speaks even more poorly of them, their values, and their priorities. Either way, it should be unacceptable.

So it would have been regarded as quite inconceivable in the 1970s to have had a former serving KGB officer (whatever his specific role in that establishment) as a member of the New Zealand Parliament. If that person had grossly misrepresented their past, and continued to associate closely with the Soviet Embassy, the scandal would have been all the greater. It should be just as unacceptable today for a former serving member of the Chinese Communist Party, and the Chinese intelligence services, having consciously misrepresented his past and never denounced the system, to be in – and put forward again as a candidate for – our Parliament today.

[Source]

Imagine the cries of "Communist!" if this was a Labour MP in question. (I mean, they're already crying "communist" right now, and not in an ironic sense either...but imagine how much more.)

by Macawsley | 19th Sep 17, 9:50am 1505771425

"For balance, here is what they wrote for the National bench"

By 'they' you mean National's pollster and dirty politics principle.
David Farrar - hence the deliberate omission of Labour's qualified lawyers and reference to any business success. - you need to try harder Ex pat or check your sources.

by RickStrauss | 19th Sep 17, 9:24am 1505769878

Lest we forget John Key, a professional gambler of other people's money via forex.

by Ex Expat | 19th Sep 17, 9:35am 1505770500

You mean Sir John Key?

by keyo_ | 19th Sep 17, 12:00pm 1505779242

Sir Jiong Kee

by tothepoint - d… | 19th Sep 17, 9:07am 1505768830

Hi Ex Pat,

Agree - Labour is clearly wanting in terms of experience.

All rather sobering.

Not much there, from which to put together a Cabinet.

by Ex Expat | 19th Sep 17, 9:23am 1505769799

It has the potential to be an economic CF of epic proportions. There will be little private sector goodwill to help out if they get caught in a death spiral of decreased tax take and increased budget deficits. Recession will sort out the realists from the theorists.

by RickStrauss | 19th Sep 17, 10:02am 1505772165

Let it not be forgotten that National have set up a likely recession/crash. We have the biggest property bubble we've ever had, the most out of kilter with local incomes ever...You'd be struggling to find any experienced economists not suggesting a major correction will come.

Sure, there will be some who will seek to blame it on their least favourite politicians...but that would be the case even if their favoured ones are in power at the time too. If National stays in power and a correction occurs we can be sure they'll seek to blame it on a government in power ten years ago - because that's what their track record of not taking responsibility suggests.

by Ex Expat | 19th Sep 17, 10:21am 1505773313

Great, so can agree that the next Government can absolutely be judged on its reaction to this likely recession/crash given it's so predictable?

by RickStrauss | 19th Sep 17, 12:09pm 1505779783

That would seem a reasonable thing to do. (And something that should have been done with National, given their campaigning on the housing crisis nine years ago, followed by nine years of denying any housing crisis exists.)

by Brock Landers | 19th Sep 17, 9:29am 1505770178

You figured out how to copy / paste David Farrar's flacid little hit piece from Kiwiblog. Well done, very clever, that puts you above the intelligence of most of their readers.

We haven't been hearing much about how National are going to stop making New Zealand a worse place with all these desperate negative attacks on Labour.

by RickStrauss | 19th Sep 17, 9:22am 1505769768

Heh..."Accept how bad things are because there's no one who can make it better. Don't even consider that anyone might do things differently - you can't trust them!"

by Laminar | 19th Sep 17, 2:18pm 1505787526

Given that most US home owners know that their homes declined in value both in 1980 and in 1990 and in both cases didnt go anywhere for years after, its laughable to claim that a majority think 'houses never fall in price'. A majority of US home owners probably do think that property generally rises in value over long periods of time because that has been their experience and they are aware of simple economic principles like scarcity.
The GFC was not caused by house prices alone, it was caused in large part by the collapse of inter bank lending following the failure of fraudulent securities.
The change in US house prices themselves was caused by an extended period of low interest rates combined with a lot of fraud, followed by a period of higher interest rates. You will note that prices in the USA largely recovered to their highs following further interest rate cuts.
This idea that their is a 'correct amount of investing' needs to be understood in context of interest rate expectations. Its not just housing that is 'over priced' globally, its everything and their is a reason for that, interest rates.
TL;DR
The 2006 US market is not sufficiently similar to the 2017 NZ market to draw conclusions about the NZ markets medium/long term performance.
The US GFC is complex and is not the result of house price changes alone.
NZ banking/lending practices and regulation are substantially different to US banking/lending practices and regulation.

by Retired-Poppy | 19th Sep 17, 8:37am 1505767072

Notice less going to auction? I suggest that only the very best properties that have a higher chance of clearing going to action. Clearance rates look a tad more presentable to the easily fooled. Volumes very low.....spring volumes are just around the corner and everyone has to sell eventually!

by Laminar | 19th Sep 17, 12:46pm 1505781969

Very unlikely as premium properties are not often sold in to soft markets. Quality is withdrawn, trash is dropped first.

by The best statu… | 19th Sep 17, 8:49am 1505767787

Taxinda has also had experience as a plumber, she installed a shitter in her house earlier this year.

On another note, she said the other day that the first vehicle she drove was a RED Massey Fergusson tractor, it was also the first thing she crashed. The second thing she will crash will be the NZ economy.

by puketepapa | 19th Sep 17, 9:31am 1505770283

how petty - not the kiwi way - is that the best you can do

by thenewguy | 19th Sep 17, 10:11am 1505772669

It's only natural to be afraid of losing the tax free status of perceived paper wealth by flipping a few houses, can smell the fear in the air.

by BigDaddy | 19th Sep 17, 9:05am 1505768707

Heading should have read 54% failure rate.

by CJ099 | 19th Sep 17, 9:44am 1505771099

I'm sure those that bought over the million mark and are highly leveraged are going to be kicking themselves in the next six months time when more people become fully aware of Auckland's property prices declining, which is strongly indicated by the latest auction results.

by O4 normal | 19th Sep 17, 10:14am 1505772843

Don't forget all the property's that were passed in will come back in time lower if they really want to sell. There always will be FHBers so cheaper property will sell if priced so they can afford it and get the money. The more expensive property has a big problem with the lack of demand big enough to hold prices up. That area could see 50% drops over the next few years. Slowly being eaten at

by Laminar | 19th Sep 17, 12:47pm 1505782062

You heard it here guys, Auckland's best properties going 50% off within 3 years.

by Ex Expat | 19th Sep 17, 1:20pm 1505784023

To be fair, the weasel word, "could" was mentioned. Personally, I predict high-end property could boom as investment property is given a wide berth in favour of owner-occupied property.

by Laminar | 19th Sep 17, 1:52pm 1505785931

"The more expensive property" = high end Auckland real estate
"with the lack of demand big enough to hold prices up" = lack of demand will be the cause
"has a big problem" = demand is very low such that the move in prices will be large
"That area could see 50% drops over the next few years" = I predict it is reasonable to expect a 50% fall in prices over a 3 year period.

High end Auckland real estate, will see a large drop in value, caused by lack of demand, resulting in a 50% fall in prices over 3 years.

If he means otherwise then its the equivalent of saying Auckland could see prices drop to zero, its not impossible, we could be hit by an asteroid.

No sir, he is on the record calling for a 50% drop in prices, his is the glory or the shame.

by mja | 19th Sep 17, 3:55pm 1505793318

A lot of people living in could and if world, and hoping like hell they are right. Because it hurts to have got it wrong, when the muppets who knew less just bought and made these tax free gains, while they sat on their hands from 2012 to 2015 convinced property was overpriced. They are now sitting on the sidelines praying the market gods make them right, because there is nothing that makes you feel like more of a dick than having a theoretical argument that doesn't play out in the real world.

by Groen_mamba | 19th Sep 17, 3:46pm 1505792767

It's better to be wrong for +-3 years than be wrong for +20 years while trying to pay off that mortgage

by mja | 19th Sep 17, 3:56pm 1505793372

Unless you have been promulgating your view to family members and friends at BBQs etc, and the market does not correct. Then you really look like a knob, hence the praying for a market crash. On other side many people who were wrong and did not buy may never be able to re-enter the market. A family friend in a low income job, sold early 1990s as thought market was overvalued, frittered proceeds and has never again been able to afford to buy back in, essentially resigned to always renting and a crap retirement. Why?, because they thought they were smarter than the market. If the market does not correct more than 30%, many who could have bought 2 to 8 years previously may never now be able to own in their desired region ie greater Auckland.

by RickStrauss | 19th Sep 17, 4:05pm 1505793909

What about for young Kiwis born today?

It's not the job of young voters to keep voting for the growing of wealth for those born at the right time. I certainly will understand if they vote for policies to work to achieve affordable housing again - for people who need a home.

by mja | 19th Sep 17, 6:21pm 1505802119

For young NZers and those being born today, the world has moved on, it is what it is. They will need to consider apartments or townhouses, the days when non high earners could buy a house with a section in a good area of a major NZ city are likely gone forever. The population is increasing and NZ has moved from being a backwater to a desirable part of the world to live in. I'm not saying this is a good thing or not, it is what it is, and no amount of wishing for the past will change this. The people who should be p**sed off are those who listened to Eaqub, Hickey et al, and didn't buy about 5 years previously.

About 6 years ago a friend of mine in an average job in Wellington asked if he should buy a family home rather than renting, as he knows I have always done well with investments (we were both in our mid 30s). I said it would be a good move, and to buy in a good school zone, so he bought a 3 bdrm house on a full section in Karori Wellington for 445K. This was the one good call he had to make, that would impact the path of the rest of his life. He now has a house worth 700K owes less than 300K on it. He now has 2 young children, his wife does not need to work but can raise the kids while they are small. And his kids will go to decile 10 schools and his son can attend Wellington College. I have found that your financial position and general well being come down to 1 or 2 calls, and those who listened to the bears post GFC will likely bear the deleterious consequences of taking this advice.

by Ex Expat | 19th Sep 17, 6:14pm 1505801684

Well written. It's an unpalatable truth that many here can't accept and the outcome of this election won't change that.

by mja | 19th Sep 17, 6:29pm 1505802581

The bears always go back to this price to income ratio, this is now relatively redundant. As home ownership rate has fallen, property prices are now more tied to median net worth of property owning households, rather than strictly income. Property is now owned by those with a high net worth, so prices may be high but mortgages as a percentage of property value is lower. I'm semi retired and do some casual work, the median price in the area I live in is 15 x my income this does not mean I cannot afford my home, just means I have a high net worth. Many bears are missing the boat, using this outdated price to income ratio.

by Ex Expat | 19th Sep 17, 6:36pm 1505803002

My Vietnamese colleague told me that Ho Chi Minh has a multiple of 50x. It's all relative.

by RickStrauss | 19th Sep 17, 6:42pm 1505803374

It's a good point - we are heading more toward a Third World situation.

by Ex Expat | 19th Sep 17, 7:08pm 1505804932

Interesting spin, but no it reflects that income/price is not the dominant theme in that market.

As I've previously pointed out, I'm mortgage free. When my children inherit my property they will have the equity as their stepping stone into another house, if they can't share the property they inherit. Their ability to buy will not be related to their pure income. This scenario will be carried out multiple times over the next 20 years as we boomers age and die. Good luck convincing them that they should give it al to the State and start from zero.

by RickStrauss | 19th Sep 17, 7:39pm 1505806771

It's not spin. It's simply noting that the current older generation received from previous generations with more social forethought, and have chosen not to pass on the wealth. Of course trying to do more of the same is heading further toward a Third World model, rather than NZ's history of being a social democracy. It's barely more than a desire to become a landed aristocracy.

Giving everything over? No one has suggested that. Besides, with lower prices your children could also get ahead on their own merit, too.

by PocketAces | 19th Sep 17, 6:54pm 1505804087

Explain to all again why the eff NZers should just accept that. I see no reason whatsoever, what we have now is people being for an economy instead of the other way around as it should be. Growth is not a magi bullet as is clearly and starkly obvious in this country.

by Ex Expat | 19th Sep 17, 7:10pm 1505805008

Because once you take away the investors and foreign buyers you will still find that you can't afford the type of property your parents had. Interest rates are low and building costs are high. Those wont change.

by PocketAces | 19th Sep 17, 8:11pm 1505808704

You only have to be able to afford something reasonable, we are not building that sort of thing any more. We need to again

by steven | 17th Oct 17, 10:42am 1508190170

I dont agree (partially), the only thing that has inflated NZ property beyond affordability is the present ponzi scheme in some cities.

Build costs, now that is an interesting point, are build costs so high because that is the price that can be charged? or is the cost so high because of the input costs (or what % mix). Then are the input costs high because of to few players in the market, and/or the huge debt being financed and that makes sense to minimalise tax?

I'd suggest that as an example of speculator effect, take oil's price in July 2008 at $148US, then the speculators ran away as the demand collapsed and the price dropped to $35US and now hovers around $50US. We can also throw in US shale oil as over-supplying the market. Now a 60% house price drop wouldnt seem so un-reasonable nor un-expected. If it does there will be a lot of blood on the floor and our 'rock star" economy and Govn finances will be in serious poo.

by RickStrauss | 19th Sep 17, 6:32pm 1505802754

This rests on a few assumptions, however - chief of which being that the current level of pricing reflects demand for homes rather than investor (domestic and foreign) demand. Which doesn't really align with rents. There have been plenty of analyses that describe well the role of policies that have enabled and encouraged this distortion.

On the contrary to your point that young Kiwis should simply accept things, they do have policy instruments that they can look to in order to remove distortions from the market and reconnect housing in some measure with local incomes and the ability of people who live in the country to afford a house.

These can include to remove those encouragements that fostered the distortion. They can include reducing immigration and limiting foreign purchases. They can also include policies that helped the homeowners on here to afford a house - i.e. NZ's historical policies that fostered supply both directly and indirectly, and resulted in the high home ownership rate. They can include rebalancing tax between land and incomes, rather than burdening incomes primarily.

There's plenty they can do to rebalance things, once they realise they can (and that they're being shafted a bit). No need for them to simply accept the current lot.

by mja | 19th Sep 17, 6:51pm 1505803876

See above comment, price to income is now relatively redundant. Property prices now more tied to median net worth of property owners. Most people buying property are not putting down a 10-20% deposit, most buyers especially in owner occupier suburbs are putting down large deposits or buying with cash. Before the 2000s NZers had relatively low net worths and the price to income ratio was a good guide, as most bought a house and then aimed to pay this off by their retirement. NZ has changed since then, luxury cars were relatively rare. This is again the world moving on, it is a symptom of inequality, most of those buying are using net worth rather than max mortgage. Max mortgage is at the margin, even many first home buyers will be children of high net worth individuals gifting large deposits.

The other assumption you are making is that the market is distorted, and that it needs fixing. Have you considered that this may be the way the world now works if you want to reside in a democratic, open western economy.

by Ex Expat | 19th Sep 17, 6:55pm 1505804105

The irony is that it's the 'selfish' boomers sacrificing spending to provide for their children. I would love to spend it all but I have an obligation to make sure my progeny are not locked out of the market. I have no faith in any politician to do my job for me.

by Kate | 19th Sep 17, 7:37pm 1505806641

Lower prices would be the best thing to ensure they were not locked out.

by Ex Expat | 19th Sep 17, 8:35pm 1505810125

Agreed, but I have little/no faith in Political parties that that will happen.

by RickStrauss | 19th Sep 17, 7:42pm 1505806972

This assumption re price to income vs. price to net worth misses the fact society has been there before. In fact, it's exactly what NZ moved on from via land tax. Perhaps the only thing surprising is how neatly one generation encapsulates the move from benefiting from NZ's social policies to hoarding and not passing on the same to the next.

As noted, there's no reason young Kiwis should simply accept your contention that housing must remain connected only to high net worth, especially given NZ's history of undoing just this sort of situation and making home ownership available to many.

There's no reason they should accept such selfishness as a new normal.

by Laminar | 19th Sep 17, 8:10pm 1505808609

Its scarcity Rick. Also housing is not tied to net worth, nor has it ever been tied to income, it is tied to affordability and always has been. Net worth helps stabilize prices but cant move them upwards, income can but only through the filter of interest rates, thus affordability drives the change in prices.
You can try to take the froth off with immigration controls but youl likely find surprising limitations on how hard you can realistically throttle that back.
You can build more, but not much more in the central locations. Scarcity and demand, the beauty, opportunities and appeal of NZ's main centers combined with hard working parents that taught their children to buy young and build wealth are squeezing the less financially literate kiwis out of the premium locations. There are homes waiting for them in the smaller towns or overseas in less desirable cities. Its not just boomers who own property, a lot of millennial's own Central Auckland property as well, the ones who didnt listen to Hicky and Eaqub. The ones who got on with saving and asking banks for loans, the ones who entered KiwiSaver, the ones who worked hard rather than asking why its so hard.
I do hope that there is some effort given to housing more Aucklanders but at the same time there is blame to be had by those who squandered that last decade of opportunity to buy and listened to wild claims of price to income ratio pseudo-econmics.
The quarter-acre is gone, the racism is mostly gone, the isolation is gone and cheap housing is gone. NZ aint what it use to be but my god what a beautiful and bountiful country to live in.

by RickStrauss | 20th Sep 17, 7:42am 1505850179

My point is simply that the current structural conditions that have created this situation need not necessarily stay the same. I do agree that the quarter acre lot has gone, but there is plenty of room for plenty of homes, albeit in a variety of shapes and sizes.

My point was merely that young Kiwis can choose to change the structural conditions that have created this situation, and there are various ways they can do that. It's up to them, over time. E.g. drop income taxes and increase tax on land instead.

It's good we have voices such as Gareth Morgan (for example) getting some of these ideas out there. At least it breaks up the narrative of "it is what it is and nothing can be done for young Kiwis and we must return to old models".

by mja | 19th Sep 17, 8:17pm 1505809043

Rick, it is not my contention that "housing must remain connected only to high net worth". I'am simply commenting on what I see in the real world and that is that property prices are not correlated to price to income ratios, this is a factor but net worth of property owners also needs to accounted for, as do prevailing low interest rates. I do not have an agenda I don't think this should or shouldn't happen, I observe ,evaluate, then invest where I think can benefit my family the most. In fact I will be voting labour, due to National propping up GDP with immigration. I have properties in Wellington, Labour will expand the public service, there will be more students in Wellington who will have an extra $50 per week. A change of government may temporarily hit property prices Wellington, but then demand and supply will do their work. I would be happy with a removal of negative gearing as I am positively geared and it will reduce competition for investment properties. As a long term investor a capital gains tax is not an issue.

So in summary I do not have an agenda, the world is what it is, and I adapt to look after my family.

by RickStrauss | 19th Sep 17, 9:22pm 1505812941

I did not mean to infer by "your contention" that you have an agenda, just to clarify.

I just disagree that the current structural conditions that have created this situation must or will necessarily stay the same. I do agree that the quarter acre lot has gone, absolutely, but there is plenty of room for plenty of homes, albeit in a variety of shapes and sizes. Intensification will be needed.

My point was merely that young Kiwis can choose to change the structural conditions that have created this situation, and there are various ways they can do that (including ones that encourage intensification). It's up to them, over time.

by Upside | 19th Sep 17, 10:32am 1505773921

Although it was an agent telling me recently and who knows what is gospel...they mentioned buyers are returning to pick up a deal as they expect things to lift after the election?

by CJ099 | 19th Sep 17, 12:13pm 1505780038

I very much doubt that any of the political parties could have enough influence even a magic wand to make off shore foreign buyers return to our market. It has been pure folly to allow our property market to become decoupled from wages in the first place.

You only need to look at what's happening in the other gateway cities to see how they've been impacted and how we're going to be effected in the near future.

Better Dwelling article: Over 6% of Toronto Real Estate Listings Were Bought Less Than 18 Months Ago
https://betterdwelling.com/city/toronto/6-toronto-real-estate-listings-…

by Yankiwi | 19th Sep 17, 1:43pm 1505785414

The paper linked at the bottom of the Toronto article you listed is far more pertinent and interesting:
https://www.nber.org/papers/w23740.pdf

A broadly accepted view contends that the 2007-09 financial crisis in the U.S. was caused by an expansion in the supply of credit to subprime borrowers during the 2001- 2006 credit boom, leading to the spike in defaults and foreclosures that sparked the crisis. We use a large administrative panel of credit file data to examine the evolution of household debt and defaults between 1999 and 2013. Our findings suggest an alternative narrative that challenges the large role of subprime credit in the crisis. We show that credit growth between 2001 and 2007 was concentrated in the prime segment, and debt to high risk borrowers was virtually constant for all debt categories during this period. The rise in mortgage defaults during the crisis was concentrated in the middle of the credit score distribution, and mostly attributable to real estate investors. We argue that previous analyses confounded life cycle debt demand of borrowers who were young at the start of the boom with an expansion in credit supply over that period.

by RickStrauss | 19th Sep 17, 1:44pm 1505785498

Interesting, thanks.

by Didge | 19th Sep 17, 2:50pm 1505789417

Indeed, VERY interesting.

by Laminar | 19th Sep 17, 2:16pm 1505787365

Its not the amount of subprime that matters. The reason everything exploded was subprime loans got bundled in to traditional MBS. These securities were rated as very safe by ratings agencies and as such many business and banks were secretly dramatically under-capitalized. When the 2007 sub prime component defaults rose to 22% and the prime default component rose to 5% the bonds were essentially worthless. The GFC was the result of fraud.

by Didge | 19th Sep 17, 2:51pm 1505789511

Of course. this is NZ we will not have fraud here.

by O4 normal | 19th Sep 17, 3:52pm 1505793141

It's the fraud in Chinese I would be more worried about. The money to buy these houses in Auckland came from a very unregulated Chinese banking system. It's the banks in China and the Chinese government at the end of the day that own all these houses. Just how much loss will they put up with. Keeping in mind they would know they need to be very careful not to start a stampede . This hole slow slowdown could turn pear shaped very fast and easy . I'd hate to think how these houses in Auckland are tired into the person in nz that did the buying for the overseas investor (money man) or owner and back to the source china and what is used to get the money. We do know the Chinese government isn't happy. Just where do the risks lie. Here or their. One things for sure tho. The houses the overseas investors brought are investments . At some stage they mighted

by NZXY | 19th Sep 17, 3:43pm 1505792580

But according to Chairmen Xi - one person can only take $50,000US out of China in one year. Unless you are a favoured official who wishes to purchase Sir Cheong Kee's Parnell mansion for 20 Mil.

by O4 normal | 19th Sep 17, 4:06pm 1505793989

Most of the big money was over the boom. Mainly up to last year around September. The Chinese are masters at getting around things and putting money together. Since the January restriction from the Chinese government things have pretty much ended and only getting harder. You can't compare the key house that's keys mates from very high up. Didn't someone comment on here today about key and his national changing the rules in 2011 letting overseas investors buy housing property that then started the boom. Key is every Chinese mate

by Yankiwi | 19th Sep 17, 3:10pm 1505790654

The MBS shenanigans were a symptom rather than cause. The cause was mortgage defaulting at a very large scale, with insufficient equity to make the loans good when the property defaults. A significant number of the defaults were from specuvestors that were caught on the wrong side of equity line, and ended up with negative total net worth due to the excessive usage of leverage. Hence, defaults at a large scale. The rather strong tone of some of the *investor* crowd on this site in regards to the possibility of removing negative gearing suggests that this is prevalent behavior here as well. I know of one person (the son of a friend) who owned as many as 25 houses about a dozen years ago... Well, owned is a somewhat strong term. His name was on the mortgages... for a while, he was a multi-millionaire, all due to the wonders of high leverage in an increasing market. Unfortunately, he didn't heed the obvious warnings, and lost it all, and then some when everyone else decided that it was time to lock in their profits and sell. It turns out that only the first few get to lock in profits... :) YMMV

by Didge | 19th Sep 17, 3:46pm 1505792780

This may show why the specuvestors that post here are reeking of fear that National will not be able to form a coalition.

by O4 normal | 19th Sep 17, 4:43pm 1505796227

Didge. Don't forget something very important. The housing market has dropped from massive highs. There's LVRS. Overseas investors stopped at the Chinese government end. Massive dept. and massive unaffordability. And the housing market has started dropping. Capital gains have end for overseas investors and locals. All this has happened with national in. Don't you think if they could have stopped all this to help getting in they would have. Plus even if they did get in more then likely it'll be with peters who hates people buying nz property. About the only thing that might happen if national got in over house prices is maybe a 3 month grace period with maybe a few more sales but theres no reason why we don't get a repeat of 2009 to 2012 but worse because of how fast and high we went and what the overseas investor does is still the elephant in the room. Off course bill English could send his buddy key to Chinese to ask nicely to get there people to start investing billions back in nz and don't tell the other countries crashing, haha

by Laminar | 19th Sep 17, 8:15pm 1505808950

I dont think ive seen any speculates posting here? I see two camps, investors and professionals on one side, and the sky is falling price to income ratio sorts on the other.

by Yankiwi | 19th Sep 17, 8:46pm 1505810766

Based on my net worth, I would place my "camp" in the professional investor side. The last home I sold had an almost 200% capital gain. BTW, this sale had zero loans against the property. I place my viewpoint in the latter category of your two camps. Amusingly, I was in the sky is falling category when I sold in the US back in 2006. You may wish to reference home prices at that location with respect to time for that location. I very much understand the mentality of the invested speculators both now and back in 2005, and have done the "Don Quixote" thing in the past to very good effect. You?

by Laminar | 20th Sep 17, 4:17pm 1505881054

In 2007 I was trading currency and gold so i was very pleased. You can actually see my blog postings from that time calling a major correction event. An important difference between me and others though is in 2010 I made a series of postings explaining a US default and/or further deterioration was off the cards for a long time to come.
My views in NZ in 2008 claimed there would be a modest correction in property but that a 50% drop was off the cards.
If you are making money largely on your home then no, you are not really an investor in the sense of a 'professional investor'. However ill tip my hat to your avoidance of the very obvious US crash and give you points for noting it in 2006 at which time it was a little less obvious.

by Laminar | 19th Sep 17, 8:36pm 1505810197

@Yankiwi Well I cant personally understand why negative gearing should be allowed to roll in to income tax but I dont think its a major factor. It mitigates 1/3 of the annual loss which isnt usually a great sum. I expect negative gearing will be phased out though yes, like the previous labor govt proposed, over 5 years?
In terms of the GFC, mort defaults alone would not have caused such a problem. The defaults caused the failure of the fraudulent MBS, so in that sense they were the trigger, but the inter-bank lending failure was a result of mis-rated MBS getting marked to market and shredding capital.
What makes the GFC special was the mis-rated bonds, not high house prices or the drop in value.

by Yankiwi | 19th Sep 17, 8:49pm 1505810987

If only the MBS were "marked to market". That was my expectation at the time. Silly me. I was far too altruistic,and had expected the market to be realistic. It took a long time for the market to face reality...

by Laminar | 20th Sep 17, 4:14pm 1505880858

Im not completely sure what you mean but the MBS holdings were required to mark to market:
'Former Federal Deposit Insurance Corporation Chair William Isaac placed much of the blame for the subprime mortgage crisis on the Securities and Exchange Commission and its fair-value accounting rules, especially the requirement for banks to mark their assets to market, particularly mortgage-backed securities (MBS). A review found little evidence that fair-value accounting had caused or exacerbated the crisis.'
The rule change in 2009 allowing more flexibility in avoiding mark to market was appalling and I suppose thats what you are referring to.

by Didge | 19th Sep 17, 3:18pm 1505791108

Here God him/herself is warning us about 23 September if National are elected.
http://www.nzherald.co.nz/world/news/article.cfm?c_id=2&objectid=119240…

by bw | 19th Sep 17, 3:30pm 1505791839

" He's not saying the world will end Saturday. Instead, he claims that day leads to a series of catastrophic events that will happen over the course of weeks. "The world as we know it is ending," he said, "A major part of the world will not be the same the beginning of October."

by SimonP | 19th Sep 17, 3:40pm 1505792454

If it's the Rapture, moral god-fearing folks will be ascending to heaven. This won't affect too many politicians but Christians might want to vote early if they want their vote to count.

by NZXY | 19th Sep 17, 3:38pm 1505792301

the definition of Conservative is resistance to change. I guess the dinosaurs were the ultimate conservatives . . .

by Laminar | 19th Sep 17, 8:22pm 1505809347

Dinosaurs ruled the earth for 150 million years and evolved continuously during that period, hominids have been around for 2 million. Is the definition of liberal a person with a poor education?

by swapacrate | 20th Sep 17, 8:17pm 1505895431

"Is the definition of liberal a person with a poor education"

Well you can call me whatever you want. If having empathy for unfortunate people and people who do not have the same advanatges for whatever reason, education, timing, intellect, determination, luck. Then thats the type of person I am. I want people to be the same as me, or to do better.

I think training, networks, mentors are a great way to go. Instead of being selfish I would like to share the wealth and payback. So if thats a poor intellectual reason then tar me with that brush.