REINZ's national median selling price down in September as sales volumes slump to lowest level in six years

The housing market has had a miserable start to spring with the volume of September sales at it lowest level in six years, according to the Real Estate Institute of New Zealand.

In Auckland September's sales were at their lowest level in nine years.

A total of 5428 residential properties were sold in September, down 26.2% compared to September last year.

The slump is sales was nationwide, with all 16 regions the REINZ measures recording a decline in sales compared to a year ago.

The biggest declines were in Tasman -37%, Southland -34%, Auckland -31.5% and Marlborough -27.4% (see the Volumes Sold chart below for the regional trends).

However prices have held up reasonably well in spite of the drop off in sales, suggesting the middle to upper end of the market is faring better than the middle to lower end.

But any price gains are modest and capital growth is restrained.

The national median selling price dropped $5,000 to $525,000 in September from $530,000 in August, and remains well below its peak of $542,500 set in March. It's just 1.2% above the median price in September last year.

In Auckland the median price increased from $840,000 in August to $845,000 in September, but also remained well below the March peak of $905,000 and below the September 2016 median of $850,000.

Effectively there have been no capital gains in the Auckland market over the last 12 months.

Around the country, September's median price was up compared to August's median in Northland, Auckland, Bay of Plenty, Gisborne, Taranaki, Wellington, Tasman, West Coast and Otago, and down compared to August in Hawke's Bay, Manawatu/Whanganui, Nelson, Marlborough, and Canterbury. The median was unchanged in Waikato (see the Median Price chart below for the regional trends).

"The soggy start to spring combined with the election effect has had a significant impact on the number of sales across the country," REINZ chief executive Bindi Norwell said.

"This is the lowest number of sales in eight months and the lowest number of sales in the month of September for six years."

Properties are also taking longer to sell, with the median number of days to sell across the country rising from 31 days to 34.

There has also been a significant decline in the number of properties being sold by auction.

There were 807 properties throughout the country sold by auction in September, down a whopping 54.5% compared to September last year.

In Auckland auction numbers were down 57%.

Looking ahead the prospects for the Auckland market look particularly grim for the start of the summer selling season, because the total number of properties listed for sale in the Auckland market (inventory) was up 14% in September compared to September last year, while the number of sales made in the region during the month was down 31.5% compared to a year ago.

Volumes sold - REINZ

Select chart tabs »
The 'NZ total' chart will be drawn here.
Loading...
NZ total
Source: REINZ
The 'Northland' chart will be drawn here.
Loading...
Northland
Source: REINZ
The 'Auckland' chart will be drawn here.
Loading...
Auckland
Source: REINZ
The 'Waikato' chart will be drawn here.
Loading...
Waikato
Source: REINZ
The 'Bay of Plenty' chart will be drawn here.
Loading...
Bay of Plenty
Source: REINZ
The 'Gisborne' chart will be drawn here.
Loading...
Gisborne
Source: REINZ
The 'Hawke's Bay' chart will be drawn here.
Loading...
Hawke's Bay
Source: REINZ
The 'Manawatu' chart will be drawn here.
Loading...
Manawatu
Source: REINZ
The 'Taranaki' chart will be drawn here.
Loading...
Taranaki
Source: REINZ
The 'Wellington' chart will be drawn here.
Loading...
Wellington
Source: REINZ
The 'Tasman' chart will be drawn here.
Loading...
Tasman
Source: REINZ
The 'Nelson' chart will be drawn here.
Loading...
Nelson
Source: REINZ
The 'Marlborough' chart will be drawn here.
Loading...
Marlborough
Source: REINZ
The 'West Coast' chart will be drawn here.
Loading...
West Coast
Source: REINZ
The 'Canterbury' chart will be drawn here.
Loading...
Canterbury
Source: REINZ
The 'Otago' chart will be drawn here.
Loading...
Otago
Source: REINZ
The 'Southland' chart will be drawn here.
Loading...
Southland
Source: REINZ

Median price - REINZ

Select chart tabs »
The 'NZ total' chart will be drawn here.
Loading...
NZ total
Source: REINZ
The 'Northland' chart will be drawn here.
Loading...
Northland
Source: REINZ
The 'Auckland' chart will be drawn here.
Loading...
Auckland
Source: REINZ
The 'Waikato' chart will be drawn here.
Loading...
Waikato
Source: REINZ
The 'Bay of Plenty' chart will be drawn here.
Loading...
Bay of Plenty
Source: REINZ
The 'Gisborne' chart will be drawn here.
Loading...
Gisborne
Source: REINZ
The 'Hawke's Bay' chart will be drawn here.
Loading...
Hawke's Bay
Source: REINZ
The 'Manawatu' chart will be drawn here.
Loading...
Manawatu
Source: REINZ
The 'Taranaki' chart will be drawn here.
Loading...
Taranaki
Source: REINZ
The 'Wellington' chart will be drawn here.
Loading...
Wellington
Source: REINZ
The 'Tasman' chart will be drawn here.
Loading...
Tasman
Source: REINZ
The 'Nelson' chart will be drawn here.
Loading...
Nelson
Source: REINZ
The 'Marlborough' chart will be drawn here.
Loading...
Marlborough
Source: REINZ
The 'West Coast' chart will be drawn here.
Loading...
West Coast
Source: REINZ
The 'Canterbury' chart will be drawn here.
Loading...
Canterbury
Source: REINZ
The 'Otago' chart will be drawn here.
Loading...
Otago
Source: REINZ
The 'Southland' chart will be drawn here.
Loading...
Southland
Source: REINZ

Here's The REINZ's full regional report for September:

PDF iconREINZ Monthly Property Report - September 2017.pdf

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

We welcome your comments below. If you are not already registered, please register to comment or click on the "Register" link below a comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current Comment policy is here.

174 Comments

up
17

Much more positive spin from the real estate charlatans over at the Herald.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=1193...

It's like a different reality...

up
16

The Herald is truly a joke these days.

Yep, it's amazing, neither this article nor the Herald lie, both just emphasize very different parts of the numbers

Duh! There was an election campaign running throughout September - surprised the results are this good.

Can you qualify that statement with housing stats from previous elections?

Auckland sales in elections:
2008 - 1361
2011 - 1876
2014 - 2242
2017 - 1591

So nearly back to the GFC levels of 2008

Elections in 2008 and 2011 were in November, 2002 in July.

Yes, but then you would need to seasonally adjust. I'm sure the people who trot out the "election effect" nonsense would have claimed at the time that it was affecting sales in the 5-8w prior to the election.

Kiwimm, I am agreeing absolutely with you. Any reason will be given out. Last month , it was because it was winter according to Bindi. Remember these are unconditional sales, and in many cases do not relate to 'sales' in September. October /November numbers , volume wise are worse, in part because auction sales have collapsed. Winston will be blamed next, then el nino,Bill, Boris, martians, Donald, wallflowers, qvs , housing shortages,avocados,demand being pent up, God. The list is endless,

No - because past elections have not been held in the first month of spring so not possible to compare. Due to the 40% LVR rule I would have thought that combined with the election would have seen a far worse result re sale volume

up
18

End of the day agents need turnover to feed themselves, and only the truth will set buyers free again. At some point agents/sellers/speculators are going to have acknowledge that what the averageman tax paying kiwi can/will pay is quite different to what overseas owners money laundering/parking money in NZ who generally dont work and pay tax in NZ, are prepared to pay.

Untill then its a standoff.

Averageman, the only thing with this stand off is the buyers are very few and simply can’t afford these prices nor can get the finance so they are out to prices drop and the sellers are a split bunch. The bunch that brought after 2012 say and probably payed to much. Some will hold to the next cycle and some could be forced to sell. The bunch that brought before 2012 will sell as time goes bye and probably will meet the market because they payed buggier all, people generally sell and for many reasons, and the market won’t need that many because theres stuff all buyers anyway .

The stand off between the banks and developers across the Tasman is getting pretty real right now. Our australian banks have had their wings clipped by APRA who are now dictating the new rules and most of the new apartment complexes can't get funding from the Australian Banks when foreigners and off-shore money is trying to purchase off the plan. Fun times ahead for our ozzy cousins and for those of us Kiwi's who have purchased in the past couple of years at premium prices.

Around 1,600 homes sold in Auckland and the price went up? Sounds pretty good considering the election. Quite different to the last election where I felt confident enough to vote Act/NZF to give National a bit of a fright because we all knew they would win.

Yes, and we still don't have a government yet...I guess everyone is waiting for today's big announcement.

Gee National must’ve really got your “ message” Zach voting NZ1st

up
10

Zach - Auckland price only went up because the 40% LVR has slammed the lower priced investment segment of the market. In the South and West Auckland area and on parts of the North Shore the market is worse than the 2008 - 2010 GFC period

REINZ index is stratified so adjusts for the mix of properties sold, including suburb, land size, house size, number of rooms etc. And is perceived to be the most accurate representation of what the market is doing.

What is being discussed here is the raw median value which does not take into account the mix of properties sold.

The stratified House Price Index (HPI) showed a decrease for auckland.

Did I miss the big announcement? Because last time I looked at the news, we still don't have a coalition government.

The 40% LVR rule has meant a massive drop in sales in the lower price brackets - if there were the usual number of lower value sales in the mix then the median and average would be well down on what is being reported today. The data right now is giving a false higher than it should be figure for median and average. Things are far worse than the data is indicating. expect that Oct and Nov will also be the worst volume since 2008.

"The data right now is giving a false higher than it should be figure"

I love it big blue. The data is what it is! Please let us know when the data is giving an accurate picture.

The data gives an accurate figure when it support's BigBlue's opinion. Lol

Indeed the House Price Index, which takes the different mix of low to high valued properties into account by comparing against the CV, shows that values in Auckland are down this month. Unfortunately, REINZ fail to tell us how far down they have gone

"The HPI also showed that all but three regions (Auckland, Taranaki & Canterbury) reached a new
high during September indicating strong value growth across most of the country. Regions with the
highest growth year-on-year include Gisborne/Hawke’s Bay (up 14.7% to 2,283), ManawatuWanganui
(up 12.8% to 2,409), Wellington (up 11.8% to 2,377) and Northland (up 11.7% to 2,575)."

OP is taking about sample selection bias, not constant quality bias.

REINZ data is not a sample, it's all the actual sales that occurred.

He's talking about this month vs last year having a greater proportion of higher speced houses, which presumably is your quality bias, not sample bias?

dtcarter...
You are wrong.
Sales transactions are definitely a sample of a population. The bias arises in the fact that clustered sales are likely occurring (spatial, categoric, etc), and that the revealed market price/appreciation is a function of transacted houses only. It doesn't account for non transacted, but listed properties.

OP states "if there were the usual number of lower value sales in the mix"
That is sample selection bias - i.e. the distributions of drawn samples aren't the same.
Constant quality is irrespective of this.

If you read the report you would see on page 2 under Key Data Summary the REINZ House Price Index has Auckland down 0.7% year on year. With national prices ex-Auckland up 7% year on year.

What's the monthly figure? The report is still not available. The link to the HPI report is broken https://reinz.co.nz/residential-property-data-gallery

Yes big blue and you need to ask yourself where was the money coming from for investors to buy out the middle to lower valued property. It’s not only to do with LVRS it also the money machine which is investors other investment property’s or there own homes going up $20000 a week and foreign buyers buying some to fuel it. Using your existing houses as atm machines. It’s all connected. And I’d say start from the more valued property fueling the lower stuff. Overseas investors and to much debt would have killed the bubble in the end by itself. The LVRs pushed it in top gear

up
12

With the exception of 2008, the lowest Auckland September sales ever.

up
11

Amazing it can be so bad considering we have massive net migration and super low interest rates eh!

And it’s been warm

Yeah because 2008 was 6 years ago, wait what┐┐

We've added a chart to the story now on this. Aside from 2008 these are the lowest Auckland sales volumes as far back as our records go.

And the OCR in September 2008 was 7.5 percent, and today

“Aside from 2008 these are the lowest Auckland sales volumes as far back as our records go” There must be some sort of mistake Gareth.? Zach & DD claim the Auckland property market is booming today

And with high immigration and low interest rates like bigblue said, amazing

'Tokoroa's housing market eaten up by property investors' - http://www.radionz.co.nz/audio/player?audio_id=2018617576

Beneficiaries will pay more in rent than it costs in servicing a mortgage in a place like Tokoroa so it makes sense.
60K for a two beddie:
https://www.trademe.co.nz/property/residential-property-for-sale/auction...

That's like $60 a week in mortgage.
A search of rental properties in Tokoroa reveals nothing in the two bedroom category and only a couple of proper houses.

up
10

Bet some of them wish they could Paula Bennett the situation and use a Housing Corp loan to buy a house and the benefit to pay it off. Don't think that's an option these days though.

Edited my comment above and yes that would be a great option for beneficiaries. They would be much better off materially and in other ways.

Agree - reckon the ownership aspect might be a real positive eh.

You can’t have beneficiaries owning property
A beneficiaries roll under National & it’s minions policy framework is to use taxpayer funded benefit money to subsidise the “investment property “ mortgages of spruikers who think they’re clever

Definitely a case of ladder-kicking by the National beneficiaries of yore, then.

Can't save a deposit without losing accommodation supplement long before there's enough to actually use as a deposit.

Banks don't lend to beneficiaries, especially those who have bad credit ratings and no long term savings record to prove they are responsible with money. Personally, I would never invest in a small town as a landlord, due to the fact that the unemployment rate is high and with poverty comes addiction issues and all of the social problems that arise from it.

up
11

So more of our tax dollars will go to landlords

Well it is still a small fraction of the amount that goes to do nothing monkey brains on the dole, too lazy to work and buy a house. Too stupid with money to pay bills on time hence a bad credit rating and no mortgage.

up
14

yep, better that we funnel all of that money away from spending which benefits the whole economy to pay mortgages to improve the wealth of the landlord and an Aussie bank.

How many $Billions have been taken out of NZ by the Aussie banks ?
I think that’s an on going fiscal problem that requires addressing
Unless NZ decides to become another state of Australia and can really be forgotten like Tasmania

There will be a few more billions taken off the investor class by the Australian Banks by the time this housing ponzi is finished! hehe

Yes
More taxpayers money going through beneficiaries accounts into “investment “ property owners accounts then off to pay the mortgages from the Aussie owned banks and then over the ditch to the Australian parent banks goes the big fat profit$$ dividends.
Imagine if the beneficiaries lived in state houses and no $$$ left the country for Australia each year ?
It isn’t like NZ can’t grow timber and mill it
The current paradigm is wrong and is purely a mechanism for Australian banks benefit. They are beneficiaries of NZs poor policies. They are the pay day loan companies for societies that can’t manage to house their people efficiently using appropriate policy
Perhaps the Chinese can come down and build a few new cities as payback for taking in their escapees

Except that New Zealand no longer owns the forestry industry. Remember it got sold off years ago, which is also why our forestry workers have some of the highest risk of workplace deaths. They used to earn premium salaries a couple of decades ago. Now they earn minimum wage and the profits are shipped offshore to our foreign owners.

up
11

Morality is so over rated. It pretty much encompasses what is wrong with this country. Its all about making a buck, at someone else's expense.
Crush them.

Morality would certainly be over rated if it led to crushing the productive in favour of the unproductive. I assume by crush them you mean steal all their hard earned wealth?

Unproductive specuvestor vultures are the ones crushing the productive to the degree that essential workers cannot afford to live in Auckland and increasingly elsewhere.

My daughter keeps applying to work at McDonalds and keeps getting turned down so things can't be too bad. We had over 60 people apply for one position at my work the other day.

A lone example does not refute a trend.

up
10

Yeah, those are the immigrants we let into the country on a student visa to study to be a retail manager!

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11931923

Go Winnie!

up
10

You say "things can't be too bad" but then use two examples of what appears to be a high level of competition for jobs ( one of which would be called entry level at best) and with out details of the position at your work.you can't really make any conclusion. The high level of competition for jobs would imply that things are not good out "there".

EDIT

Exactly, and also make me suspicious of the low reported unemployment rate.

Zach you really are out of touch with current employment paradigm
McDonalds wants a new migrant who will do as they’re told not a daughter of the spruiker class who may
chuck in the job at any moment
Tell her to try elsewhere and don’t let her give up
It’s ultimately character building The knockbacks make you stronger.
I’m sure you know

Oh, for sure - people have been noting on here for months how employers are preferring to get cheap, imported labourers who cannot afford to complain, take leave etc.

I've just visited Brisbane and Cairns and every taxi I took had a young Indian driver. I queried each of them about how long they had been in the country, how they enjoyed it and if it was better than India. They all had pretty much the same story with life, social and material, being immeasurably better even with the competition from Uber. Same story when I took the taxi back from Auckland airport.

Absolutely. NZ will never have a problem attracting people from the third world. We might not get the PhDs like Silicon Valley does, but life is so bad in so many places that it'll always be easy to attract the volumes NZ needs - without needing to resort to rushing too much volume over and above what infrastructure can handle.

Get your daughter to approach the Hip Group (Kohi Cafe etc). Excellent employers paying above minimum wage and giving decent blocks of hours with weekly schedules. Longer hours available over Summer if last year is anything to go by.

Thanks for the advice. She is only sixteen and looking for part time work although I'm not sure how seriously as I pretty much provide everything she needs. I guess she is starting to feel a need to be more independent.

Maybe a little young for them at 16 as some of their operations handle alcohol. My son is 21 and has found them very good to work for while he does his Uni. It probably helps that we encourage him to say yes to every call for help when someone doesn’t show up for their shift. Being dependable and not being a snowflake are still good attributes.

Double-down

Your daughter is competing for a job with immigrants who will happily take what ever hourly rate they are given, just to stay employed in this country and gain permanent entry. This scheme has worked well for National by competing for offshore investment in NZ by promoting low salaries and a very competitive environment. Your daughter who can't get a job at MacDonalds is the end result.

Kid probably neglected to pay the Job Offer Fee.

up
12

Hard earned wealth being capital gains, rent collection and tax avoidance ? I guess if the last one lands you in jail its hard earned.

Productive is actually producing something. Like a real business with staff and stuff that benefits more than just the owner

The tall buildings in town used to be owned by productive producers, now they are owned by (overseas owned) money shufflers. So don't feel singled out. The whole of society now values shufflers rather than producers.

That's a pretty narrow view of the term "productive". Are you productive in your sense?
I would define productive as earning money and generally being a net positive person in society. A nurse, a policeman, a librarian, a burger flipper and so on are all productive members of society.

In the economic context it does have a specific meaning, however:

Productivity is a measure of how efficiently production inputs are being used within the economy to produce output. Growth in productivity is a key determinant in improving a nation’s long-term material standard of living.

And productivity in NZ has been going backward under National.

Our net postive people in society as you so refer to can no longer afford to live and work in Auckland and carry out their services of policing, teaching, driving buses, flipping burgers and ticket clipping so to speak. So our productive members of Auckland's society are leaving our city in droves. How will Auckland deal with our children becoming taught by "Reserve Teachers", and having gangs pimping our children to make money on the side by pushing the alternative currency aka "Synthetics & Meth" without our Police having a real presense in our communties? Your landlord income will not provide you with the wealth income stream that you believe it will if we carry on down this track and bury our heads in the sand.

Poor progressives have a scarcity mindset, so if someone is getting ahead it must be at the expense of someone else, which is why poor progressives want to drag everyone down to their level.

It's not untrue though, but life is not fair.

Life is often unfair and difficult. It is certainly not a given and you shouldn't be taking it for granted. Keep moaning.

This making up of strawmen of what you think other people believe surely must run out of utility at some point. Examples rocked out usually seem about as valid as "right-leaning voters just want to put everyone in ovens because it's the most efficient way to deal with good for nothing bludgers".

To be fair Sluggy was going all commissar on us, calling for a crushing of the Kulaks for having the temerity to observe that there is a shortage of rentals and a surplus of cheap houses in Tokoroa.

Objection sustained.

Skudiv. You are obviously not a good student of human behaviour. An obvious problem which affects far too many of the masses in affluent countries is their all too obvious infatuation with the rich, especially those prominent in the media. I see no evidence at all that there is any popular desire among the proletariat to "drag everyone down to their level." Furthermore, the bulk of progressives are well educated professionals many of whom voted ToP. Furthermore, being poor does not preclude one being a clever progressive.

lol It sounds like you have a progressive debt about the size of your age level which would be rather large by the sound of your statement. Not everyone who comments against the status quo is poor and supports welfare. Some of us are very comfortable freehold home owners who don't give a toss about you debtors who are pretending to be successful while slaving away on your miserable no growth incomes over the past 9 years.

Pretty brave investment without a really solid yield and allowance for issues. Collecting rent there could be challenging. https://www.stuff.co.nz/national/crime/95316091/tokoroas-synthetics-plag...

Living the rock-star lifestyle. Not like me, gotta work the next three weekends. These are the people Sluggy wants to give my overtime money to.

We all wanna life the rockstar lifestyle, some just don't want to admit it

Not so. I suspect that most people primarily want financial and physical security. Indeed, being rich makes one a larger target of crime as can be seen in countries with mass poverty such as Mexico. Yet National and your specuvestor class are bringing such poverty levels to this country. If the disjunct between housing costs and workers pay continues to rise, then I surely would not wish to be a known specuvestor.

What's a specuvestor ?

Zach you truly are out of touch if you’re actually being paid “Overtime” for working a few weekends
Salaried employees don’t have that luxury
Heck even my dear old dad on a salary as manager received 0 extra for weekends etc and that was many decades ago
Sounds like you’ve scored yourself a cosy employment existence

Or he is stretching the truth again.

My employment contract was written in 1986 so it's pretty good. Think P&T contract. It's quite a shame that these benefits have reduced over the years for employees that have come later. Things should get better not worse for workers. The only real improvement in the last twenty years has been getting a day off in lieu for being on-call during a public holiday. Something I regularly qualify for.

Zach is in the IT game and they are being replaced by cheaper imports by the day.

Realtors feeling the pinch. Prices remain high as lack of listings. Banks and LVR restrictions will dampen demand and lead to price falls. Wait for the slow down in the economy and prices take a haircut. Reality will set in soon on an over priced market. Be wary of a top in the market.

up
12

Clearly this is the fault of Chinese New Year. Indeed people are living in cars and not buying until a Government is formed and the portfolios assigned. Yeah this type of gibberish has been long in the fantasy realm for the long time.

We're going to be better off with the current credit tightening instead of people taking out mortgages they'll never be able to repay.

The curious thing this week is that the local RE's are desperate for listings as there are few houses on the market. Why would I sell? I don't want to live in a car.

up
11

The government - whichever is formed - needs to seriously address rental laws now that home ownership is out of reach of so many. Unfortunately, I don't believe National will do so as it would disproportionately affect their voter base. But it's certainly necessary.

What surprises me is that most of you are surprised by this. The property market is looking great in the likes of Wellington. Looking forward to another great year.

The rental laws are fine as they are, any change will only make things tougher price wise for tenants.

up
10

The rental laws are fine as they are*

*for landlords. Tenants' mileage may vary.

I think most tenants are very happy, particularly transient ones. For families it would help if they could get long term leases if available, however most city renters are young people who move almost every year for all sorts of reasons regarding work, travel, annoying flatmates etc.

up
12

I'd agree with the idea that transient tenants are happy with the status quo. However, I think there are more of the family renters - and likely to be many more - who will value long-term stability now that National has eliminated the prospect of home ownership for so many. Unfortunately, they can't get that at the moment, and it costs them thousands every time a landlord decides they have to move on.

@Property king ....... "the rental laws are fine ...." that's all well and good, but when are you landlords going to stop "fleecing the NZ taxpayer" with the accommodation supplement, as you know goes directly into the landlords pocket .....if NZ employers can't pay their employees a decent wage/salary, why should the average tax payer have to prop your rents up ? ......let the true "market" decide and put that taxpayer money into R&D etc to development and nurture high skilled jobs and "real" growth ......not line some baby boomers pocket !

OK, then why don’t all us flat owners who are sick of the public negativity, turn our flats back into houses and sell them. That way we can rid ourselves of this nonsense. It would mean someone like myself kicking out some 30 tenants in Mt Victoria-Wellington and selling the houses to rich families totaling a maximum of 10-15 people. Then, you’d have those 30 renters unable to live next to Courtenay Place because of all of these half-wits making up so many rules it all becomes unbearable.

Drama queen, who said sell it. Just stop moaning when someone comments on how unfair investment rental are tax wise. You know it’s true. A rental is a business that should be treated the same as any other business

Correct, at the moment ALL other business entities have tax advantages over property investment. How many more times do I need to point this out, there are NO TAX ADVANTAGES at all that property investment has over any other business entity.

It is amazing how ignorant people are.

Labour’ Grant Robertson clarified what I have said above and stated in an interview that property investment has no tax advantages whatsoever over any other business entity.

WAKE UP!

FWIW, a fresh purchase from the Auckland fringe that may not be in the data yet. He is a builder, so says their purchase price is less than what you could build it for. Purchase price $950K. Value of the land $450K, he says you couldn't build for under $600k. so I guess that means the value of the land is really now $350K.

At the moment there is no pressure on builders to sharpen their pencils at all, so this build cost will include all the builders paying off their new 4WDs and making a handsome profit as well.
But in future when things slow down, expect this $600 grand build cost to drop.

Here's how I visualize it - think of it like trying to repair a rusty bell. The high value properties represent the outer appearance, while the low value ones represent the inside. Currently, it SEEMS like the bell is looking nice and shiny (prices are still holding up) with a new splash of paint (only high value properties selling) but the inside is all rusted and eroding (lower value properties not selling). So while the bell looks nice, the sound is clanky.

Of course the idiots would praise the bell's outer appearance, conveniently ignoring the actual sound it's making (warning, perhaps?)

So given enough time, unless realistic measures are done to actually repair the inside of the bell first, then we might just see the whole thing erode. Then you'll see the cracks and it will fall over completely. Obviously something we DON'T want to happen. I'd rather repair it now than let it break down completely.

Look at the Auckland trend since 2015 - a clear downtrend with every month lower than the previous year's. How can this be spun to a positive?

Ask Anne Gibson of the New Zealand Herald / Daily Mail. http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=1193...

The NZ Herald is the "champion" of Auckland property spruiking .....and Anne Gibson is their champion spruiker ....... mmmmmmm advertising, that's how papers make their money .....and the NZ Herald does not want to lose any of that ! ....what a ridiculous situation "force feeding" the public this crap .....they should just put a disclaimer on their articles and write - "ADVERTORIAL FOR THE NZ REAL ESTATE INDUSTRY"

There is not 1 figure which is wrong in the Herald. They just focus on the positive numbers and you prefer this article because it fcuses on the negative numbers

Depends if the market actually is negative it would mean the herald is hiding the truth. People do need to make serious decisions that matter to there family on what they read

If you go back 30 years you can see three (3 for monkey brains) very obvious cycles. In the long term though even buying at the highs has paid off over time. I guess this time is different.

This time it may be very different. Certainly attempts to increase inflation in so called wealthy economies are failing and it is evident that few if any understand why this is so.

Yup, it's different, never before have we been subject to foreigners prepared to pay OTT money for housing in order to have somewhere/thing solid to park their wealth. Very different.

I for one am looking forward to the next RE excuse. My bet is on CNY as it will cover the whole of summer selling season so they can concentrate on finding that 2nd job.

Soggy, slump, slow down, taking a breather, ease off, subdued, sluggish, cooling period yadda yadda ya.

@Zachary rumour has it that the Auckland re-valuation average value is 43% over the 2014 CV's. Watch this space!

Might we see selling BELOW CV as the norm after November?

Crikey! When does it come out, does anyone know?

I got it from a Facebook post by Homes.co.nz
Notifications will be sent out to all home owners in the first week of Nov.

You can claim your home on Homes.co.nz and they will email you when the new CV comes out. 43% sounds a bit over the top since 2014. It might be worth citing the bears on this site and seeing if I can drop it by 30% and get a lower rates bill ;)

Then there just were" three little agents sitting on a wall "

For those who do not intend to sell, they will be wanting the CV to be as low as possible (with respect to the average) so our rates are as low as possible. The date of this CV is July I think, so that is before there was any real sign of house prices dropping. So those who live in houses in expensive suburbs may not face the full force of Goffs rates increases.

There might be a need to do the 'claim your home' thing coz the Council website will be crashed between 4:00am and 7:00am on the day of announcement due to everyone rushing to view their paper wealth just like in 2014 LOL!

And 'paper wealth' is the operative term.

Wow I can't believe that you're so keen to pay for over valued rates with your massively over valued central Auckland properties DGZ. There's only one thing more ludicrous than that, and that's paying for over valued rates when property prices are in decline and will be until the bottom out to affordable levels. What a joke!

I guess that last laugh the Nats have had is on you DGZ/Zachary!

I can think of something funnier and that's someone who doesn't understand that rates don't go up when the CVs all go up.

The funny part is that you're still paying for much higher rates based off your ridiculously over inflated property price and yes the rates do increase. I've looked at the rates values in relation to property CV value.

I think the point he is making is that an individual properties rates only go up the CV has increased more than the average for the city.

If you use QV data then there's a minimum of 4.1% increase (1.6% + 2.5%) for Central east Auckland

https://www.qv.co.nz/property-trends/residential-house-values

Only thing that matters is how your CV compares to the average in Auckland. Under the current system everyone's house value could double overnight and nobody would pay a cent more rates (other than the blanket increase council puts on every year regardless of any external phenomena).

The ones it'll sting are people in places like Hobsonville, Beach Haven, Mangere Bridge, Meadowbank, Glen Innes, Point England etc whose areas have all gone up far more than the median increase over the past few years due to gentrification and/or development.

Why all that anger CJ ?

My comments was about humor not anger? I think you're confused again Yvil as you often are. :)

@Double-GZ ....yeah, all well and good but watch your rates bill go up as well.

Must be expected. Go to QV and select the year to compare. Auck up 40% + since 2014.

https://www.qv.co.nz/property-trends/residential-house-values

OUCH! That means a massively hiked up rates bill in a falling house prices market. Been there done that. City Councils are always happy to find an excuse to raise rates and take your hard earned dollars off you while pretending not to notice that the markets have changed. They weild far too much power!

No, it doesn't mean a massively hiked up rates bill. This has been explained so many times.

Actually I think you'll find that it does. Go check out how much those in say Epsom pay in rates for a 4 bed in comparison to those in say Papakura.

Here’s an example for you: 4 bed property in Artillery Drive, Papakura, Auckland CV of $495,000 pays Rates this year 2017/2018 = $1,905

4 bed Belvedere Street, Epsom, Auckland. CV $2,450,000 pays Rates this year 2017/2018 = $7,100

Proportionately the more expensive property is getting a better deal but then they won’t remain paper millionaires for long.

https://www.aucklandcouncil.govt.nz/property-rates-valuations/Pages/find...

Yeah they’ll pay high rates for the hole 3 year term why’ll the house goes down but you can get your house revalued at your own cost and they might change it but lots of people seem to think a cv specially a high cv means something but really they are worthless, most of the time out of date and simply wrong and only value a house on a general way, section size , house size, beds, baths, roof type and walls, and general area. Pretty basic, if you had a shitty low grade rentals it would make it look good I guess. Worst house on the best street with a high CV haha

On your rates bill isn’t there 2 areas of the rates that are calculated x the land value from the current CV land value

I totally agree that over time house prices always go up. That seems to be one of the main planks of the argument to always purchase no matter what. But I think we will find that over the long term prices pretty well hover slightly above inflation. All commodities eventually go up. It's whether you are willing and able to ride out a big fall in price and/or the years needed for inflation adjustment to catch up.

Not so, a price for each new house can rise for x number of years but all of them eventually start to deteriorate. Obviously some properties have maintained sale prices due to the increased value of the land they stand on. A land tax would change this situation to some degree. Those specuvestors that bought what would be do ups to a home owner might be quite disadvantaged in the coming markets.

Tell that to someone in Japan who bought 20 years ago

Hah. Just for those of you who think I was being an apologist for buy at any price. I am not. In fact there will need to be a major correction to bring down prices to long term average. And without a major inflation rise it could take many years of flat prices for the long term average to be met. Not good news for.those buying blindly.

I see there has been a significant lift in the number of Auckland listings on Trademe this week, from 9500-9900. It'll be interesting to see how prices hold up now that there is an increase in supply with people attempting to offload houses prior to the summer break.

It would be interesting to know which suburbs are seeing the increased listings as Kohimarama is seeing fewer listings. As of this morning there were 16, of which I'd count 11 as live. There are 2,970 dwellings in that area.

Do you think the reason for fewer listings in Kohimarama is because a lot of this land is zoned leasehold and the rents have increased dramatically? Not many buyers are interested in leasehold land when all the value is in land and not the dwelling with "deferred maintenance".

Given immediate post-boom era and an election just 3 weeks ago, the house market is holding up remarkably well.

Many contributors here had predicted that the winter of 2017 was going to be a "winter of discontent" for the property market. They foresaw a major correction in property prices - and talked of a "crash"............. Well, it hasn't happened.

There are, in fact, parts of both Wellington and Auckland where house prices are still on the rise.

Personally, I'd much rather have money invested in well-located property than in the bank, or in managed funds.

Yes although unfortunately they are all a bit inter-related.

TTP actually, most commentators said that an influx in listings in spring would eventually trigger price drops. And some commentators have said it would take several years for prices to drop.

Exactly right, Gingerninja. I don't ever recall anyone saying Winter 2017 was when the crash would happen, let alone "many contributors".

I really don't understand why TTP keeps saying this.

ttp is rather good at straw man arguments.... my expectation is on the order of 1% per month decline, over at least two years and possibly more. This is in line with other price deflation rates.

Yes you're completely correct Gingerninja. We've explained to the RE' s multiple times how long it takes for a property crash or server price correction to take effect. It can take roughly around two years depending on the circumstances. It's really obvious that the RE' s are panicking and desperate to get people to spend even if it puts them under huge financial risk.

They can't seem to work out that residents particularly for Auckland simply haven't got a few million to wildly spend on property. The market simply has to bottom out and that's going to take a while. :)

Awklanders are rich, they can always borrow against the house,already over rated, rental owners will be paid by Taxpayers Nation and Nationally approved...means....this means Awklanders will be sucked dry by their employees...in more ways than one.

A National crime scene, but never seen...by the suckers who voted for the "one Labour intensive City" plus one National rip-orf merchants running our unfair Labour run, major city and our Nationally Fare Land.

Who would have em....Not I. but then, what a joke NZ is...and it ain't even Friday, when it may be an NZFIRST DAY, of instant...regret.

Nuffin changes, all got their hands in the Till...Double Dipping as fast as they can. "There are none so blind as those who cannot see"...some call em Public Servants...I call em...."Thieves, in High Places".

You write somewhat like the infamous Ted Stanton.

Jesus! I would be pretty angry about this if I ws still an Auckland rate payer! That is just taking the piss! Thankfully I am no longer being bled dry by the Auckland Corporate City Council!

To summarise: much fewer sales = hurt for the Agents
Values roughly even = no hurt for owners/ investors

Well if prices are not likely to increase in the next few years then there's not much incentive for people to take the risk of building. Times must be hard for you Yvil.

1) why would times be hard for me ?
2) why do you care ?

Why such anger Yvil? :p But joking aside, you have claimed to be an Architect before and one of the first things to be effected as funding dries up is new building projects.

It's true that most people would be very reluctant to start a new builds in a property down turn. And Auckland's property decline has only just started to sink.

Prices remaining even is rather bad for Auckland based specuvestors, as their rate of return would be barely above zero percent. Term deposits are doing far better than auckland property in the past year. From what I read, property values in Auckland are not even but trending downward, so some of the more vulnerable highly leveraged "investors" will be looking at serious decisions shortly as equity slowly evaporates.

The good news is people are starting to realize the Auckland market is dropping, so they're much more prepared to negotiate a realistic price.

My friends a builder and hes started to throw a few speculators out there, to see if he gets a bite. Hes not concerned if people says no. Just moves on to next one.

Not yet. Look to Australia's stats recently and be prepared with Plan B, C and D because they are in a world of hurt right now and only a 0.5% increase in interest rates will put 1 in 3 homeowners into mortgage distress. As it is right now, 1 in 4 are already showing signs of distress. If this becomes widespread, their banks are also our banks and those of us with high leverage or interest only loans could see our banks becoming more aggressive with our "term loan agreements".

The graph is still going one way if you draw a straight line through it. Despite everything there was no crash. Expect a bit of a lul then off it goes again. CV's will be very interesting indeed, expecting in the $800's this time around.

There is no potential for further increases - as we are already internationally on the 'edge of the envelope'. What will be interesting is that all the sales in 2018 will be below CV's - highlighting to everyone that property goes down in value also.

Carlos67, Yeah $800,s this time round and probably $500,s the next, I had a house once and still have it that did 3 cvs like this , $333000 then $285000 then $435000 and I’m totally expecting the next RV to go to around $350000. This house is in a area that did RV last year. RVs or CVS in Auckland are a total wast of time . Would you sell your house today on 2014 CVs . In 2 years from now would any fool pay yo the 2017 CVS value. I think not, they get advice from friends and RE and largely check out places like trademe

Just hold long term, 2020 all prices will start to rise again just as they have since Adam was a boy. Its just the real estate cycle-wake up people!

TainuiBabe, what do mean that you are a freehold home owner?
I am a freehold home owner therefore with all our rentals, going on your statement and yet I have mortgages over them!!!
Freehold,is a state of tenure rather than the fact that you have no mortgage on your own home.