QV's latest valuations are a mixed bag, with average values flat or down compared to a year ago in Auckland and Christchurch, but rising in most other places

Average residential property values fell over the last 12 months in Auckland and Christchurch but rose strongly in Wellington, according to the latest figures from Quotable Value (QV).

Nationally, the average value of all homes throughout the country was $664,698 in the three months to November, up 6.4% on the same period of last year.

But in the main urban areas average values were up just 3.8% for the year, suggesting most of the value growth occurred in provincial towns and rural areas.

In Auckland the average value of residential properties was $1,045,741, down 0.5% compared to 12 months earlier.

The biggest drop in Auckland values occurred in Waitakere -2.9%, Manukau -1.6%, and the North Shore -1.0%, while rises were recorded in Rodney +1.3%, Central Auckland +1.6%, Papakura +1.8% and Franklin +1.8%.

In Christchurch the average dwelling value was $493,899 in the three months to November, down 1.5% compared to the same period of last year.

All areas of Christchurch were affected, with the drop in average values ranging from -0.7% on Banks Peninsula to -2.5% in the Hills suburbs.

However Wellington recorded strong value growth throughout the region.

The average value of homes in the Wellington region was $621,289 in the three months to November, up 9.8% compared to the same period of last year.

The biggest gain was in Kapiti Coast +16.0%, followed by Upper Hutt +14.1%, Lower Hutt +13.5%, Porirua +13.0% and Wellington City +9.7%.

Average values were also up in most other provincial centres compared to a year ago, including Whangarei +9.4%, Hamilton +1.4%, Tauranga +3.3%, Napier +15.9%, New Plymouth +6.4%, Palmerston North +10.2%, Nelson +13.0%, Timaru +5.3%, Queenstown Lakes +10.5%, Dunedin +13.1% and Invercargill +8.0%.

Main Centre Overviews:

Auckland

Overall the Auckland market remains relatively flat with values holding or rising slightly in some areas and dropping in others, according to QV.

"There's been no significant change to the market dynamic since the change of government," QV Auckland senior consultant James Steele said.

"Values are holding in well located areas while they have dropped back in some areas further out of the city centre.

"An oversupply in some areas of Manukau is continuing to cause a decrease in prices, particularly in large new subdivisions which are above the median house price, while in parts of Waitakere values have also dropped back in some suburbs.

"However other tightly held areas, particularly in central Auckland are still doing well and seeing values still rising," he said.

Hamilton

"The market we observed over the past two years has subsided and a regular market is now evident," QV Hamilton registered valuer Andrew Jaques said.

"The expected spring rally has not yet eventuated.

"With slower listing and selling numbers it appears measures to slow investor activity are having the desired effect."

Tauranga

QV said average home values in Tauranga rose 3.3% in the last 12 months, but fell 1.0% over the last three months.

"The trend of a more stabilised market continues in the sub-$700,000 bracket, with many in the industry describing it as a more normalised market," QV Tauranga registered valuer David Hume said.

Wellington

"Listing numbers have increased over the past month providing buyers with a bit more choice, however supply is still tight and a seller's market prevails," QV Wellington senior consultant David Cornford said.

"Strong prices are being achieved and we are still seeing value growth in the market, however this is much more moderate compared to 2016.

"Market activity has picked up over November, however it remains subdued compared to the same time last year."

Christchurch

"First home buyers are still active in the market but the usual spring/summer upturn hasn't arrived at usual levels this year," QV Christchurch registered valuer Hamish Collins said.

"The LVR restrictions and banks' stricter lending criteria have definitely created a handbrake for investors and many are now selling poorly performing properties in search of higher yielding ones, in order to better meet banks' internal serviceability criteria."

Collins said more properties were being passed in at auctions and vendors are having to adjust their price expectations compared to what they might have asked for six months or a year ago.

Dunedin

"The first home buyers' market remains competitive with multi-offer scenarios still common, but there are reports of some large variances in both offers and/or conditions," QV Dunedin property consultant Aidan Young said.

"There is traditionally a flurry of activity before Christmas in the Dunedin market and this year is no exception - the market is currently seeing plenty of activity."

QV House Price Index - Three Months to November 2017

Territorial authority Average current value $ 12 month change % 3 month change %
Auckland Region           1,045,741 -0.5% 0.4%
Wellington Region               621,289 9.8% 2.6%
Main Urban Areas               779,380 3.8% 3.6%
Total New Zealand Nationwide               664,698 6.4% 3.6%
       
Far North 420,783 14.7% 1.8%
Whangarei 499,955 9.4% 0.5%
Kaipara 492,074 13.0% -4.3%
Auckland - Rodney 935,590 1.3% -1.1%
Rodney - Hibiscus Coast 916,063 2.4% -1.6%
Rodney - North 956,318 0.7% -0.6%
Auckland - North Shore 1,212,617 -1.0% 1.0%
North Shore - Coastal 1,380,575 -1.5% 0.5%
North Shore - Onewa 974,440 -1.0% 1.8%
North Shore - North Harbour 1,190,355 0.2% 0.9%
Auckland - Waitakere 821,105 -2.9% 0.6%
Auckland - City 1,241,504 1.6% 0.7%
Auckland City - Central 1,086,373 3.0% 0.2%
Auckland_City - East 1,570,354 3.3% 1.8%
Auckland City - South 1,094,265 -1.9% -0.6%
Auckland City - Islands 1,155,463 12.2% 3.5%
Auckland - Manukau 891,394 -1.6% -0.9%
Manukau - East 1,144,569 -2.0% -1.9%
Manukau - Central 687,444 -1.3% 0.7%
Manukau - North West 770,341 -0.3% -0.3%
Auckland - Papakura 692,175 1.8% 3.9%
Auckland - Franklin 659,650 1.8% 0.5%
Thames Coromandel 695,353 11.4% -2.9%
Hauraki 380,447 7.9% -3.9%
Waikato 459,759 7.7% 2.1%
Matamata Piako 428,838 11.4% -1.7%
Hamilton 544,050 1.4% -0.1%
Hamilton - North East 689,628 0.7% 0.4%
Hamilton - Central & North West 499,982 0.4% -0.8%
Hamilton - South East 491,410 0.5% -0.7%
Hamilton - South West 489,637 4.5% 1.0%
Waipa 532,650 13.1% 2.6%
Otorohanga 291,236 23.7% 3.7%
South Waikato 219,834 21.5% 3.3%
Waitomo 187,615 11.6% -4.8%
Taupo 458,530 12.9% 3.9%
Western BOP 626,120 5.9% 2.1%
Tauranga 687,310 3.3% -1.0%
Rotorua 409,832 9.9% 0.6%
Whakatane 415,545 13.7% 3.0%
Kawerau 192,821 21.6% 2.2%
Opotiki 276,447 11.8% -4.5%
Gisborne 290,745 9.0% -0.8%
Wairoa N/A N/A N/A
Hastings 442,876 18.0% 4.0%
Napier 473,589 15.9% 3.1%
Central Hawkes Bay 293,069 19.4% 2.1%
New Plymouth 431,996 6.4% 1.3%
Stratford 256,933 8.8% 5.3%
South Taranaki 207,107 2.8% 0.6%
Ruapehu 171,764 12.7% 1.5%
Whanganui 233,750 13.5% 1.6%
Rangitikei 192,385 23.2% 4.1%
Manawatu 327,182 16.7% 6.3%
Palmerston North 374,337 10.2% 3.2%
Tararua 187,187 13.6% 6.6%
Horowhenua 295,407 18.0% 3.4%
Kapiti Coast 538,431 16.0% 3.9%
Porirua 535,268 13.0% 2.6%
Upper Hutt 470,235 14.1% 4.0%
Hutt 524,285 13.5% 1.6%
Wellington 749,870 9.7% 3.4%
Wellington - Central & South 742,749 8.5% 2.5%
Wellington - East 800,674 8.4% 0.7%
Wellington - North 674,630 11.9% 5.3%
Wellington - West 877,461 9.0% 4.8%
Masterton 326,986 21.5% 5.0%
Carterton 362,452 16.9% 3.7%
South Wairarapa 437,125 25.0% 1.2%
Tasman 553,187 13.6% 2.8%
Nelson 553,052 13.0% 2.8%
Marlborough 447,194 8.7% 1.6%
Kaikoura 391,984 -1.2% -0.6%
Buller 179,500 -6.2% -3.6%
Grey 208,417 0.3% 0.1%
Westland 242,581 3.7% -0.4%
Hurunui 381,831 2.5% 2.7%
Waimakariri 439,936 2.3% 1.3%
Christchurch 493,899 -1.5% 0.2%
Christchurch - East 371,471 -1.9% 0.2%
Christchurch - Hills 660,947 -2.5% -0.2%
Christchurch - Central & North 585,656 -1.1% 1.0%
Christchurch - Southwest 470,420 -0.9% -0.6%
Christchurch - Banks Peninsula 514,183 -0.7% 1.1%
Selwyn 544,469 0.2% 0.1%
Ashburton 345,615 -1.5% -0.6%
Timaru 350,033 5.3% -1.0%
MacKenzie 494,980 24.5% 7.3%
Waimate 224,126 -0.5% 0.6%
Waitaki 282,113 11.5% -0.5%
Central Otago 467,868 19.1% 2.1%
Queenstown Lakes 1,105,213 10.5% 0.7%
Dunedin 386,326 13.1% 2.8%
Dunedin - Central & North 403,396 13.9% 2.9%
Dunedin - Peninsular & Coastal 355,106 16.1% 9.4%
Dunedin - South 368,133 13.2% 4.0%
Dunedin - Taieri 397,863 11.3% 0.3%
Clutha 200,210 7.7% -0.6%
Southland 270,290 19.9% 7.8%
Gore 218,929 8.2% 2.4%
Invercargill 251,884 8.0% 4.6%

QV house price index

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254 Comments

Nationally 6.4percent growth. Most areas Up, some strongly :)

Huge contradiction between REINZ and Q.V.

Check out some more credible figures.
https://www.interest.co.nz/property/91100/lower-house-prices-see-central...

It would appear that the "median price in central Auckland" value is not all that meaningful.

John Wheeler: Why did you not post your usual line ?

Auckland property has already crashed $200k ...
THE CRASH IS HERE !!!

lol, indeed ... where is the Crash?

Yvil, Eco bird, as you know, John Wheeler has posted several times 2018, the year of the crash. In my life experience it's those that laugh at such possibilities that are rendered by their own ignorance, completely unprepared when a crash occurs. The world is full of people right now who are just like you who have not had first hand experience of losing everything. This makes the world ripe for another crash.

I'm not laughing at John's prediction and neither should you.

I hope you are enjoying your retirement like I do ... your comments and some others are indeed laughable as they are baseless and predictions based on assumptions which defies logic and available information from the market .... you may have noticed by now that WE are not some jobless losers trolling all day on the net and swing around with every piece of news or stats , Well I hope you've noticed at least that !...
So while we differ in opinion and analysis from yourself or others , it doesn't mean that we are making things up or pushing the proverbial up hill.
BTW, we do not care less if prices are going up today and down tomorrow - Contrary to what you believe, property investors do not sell in a stagnant or falling markets.

I/we shall enjoy all the hilarious comments you and your mates put on here ...

enjoy your tea

Contrary to what you believe, property investors do not sell in a stagnant or falling markets.

Of course they don't (voluntarily, that is) as they'd be a bit stupid to participate in a stagnant or falling market - just as is the case for purchasers.

Stable prices based on realistic DTIs (be it for investors or homeowners) is the time to voluntarily enter the market and/or trade within it.

When those conditions aren't there - sit tight or hold.

Eco Bird, you're sounding worried? Whatever happens to the markets in the coming months or years is going to happen regardless of what views are expressed here. Its out of our control :)

Thanks for your kind input - even if it comes across as a little "cheep"

Average house prices dropped 20% in the US as a result of the GFC. The result was a disaster, and not just caused by house prices.

I'm expecting a financial event to occur in the next few years. I'm expecting to take a hit on my net assets but I'm prepared for it. One upside is that we are currently in a much better position than the US.

And in the high gain locations, they dropped 50% or more. The home I sold lost about half it's value...

He posted a link but ill quote for your convenience:

"Last month the lower quartile price in central Auckland declined to $595,000 from $656,500 in September, and is now down by more than $100,000 since it peaked at $695,699 in March.

One of the contributing factors for the price fall is likely to be the emerging weakness in the apartment market, which is dominated by investors.

However the median price in central Auckland has had an even bigger fall, dropping from its March peak of $1,050,000 to $850,000 in October, a decline of exactly $200,000, suggesting the weakness in the central Auckland suburbs is not confined to the apartment market."

Zachary - thanks for doing it for me.

2018 - The Crash is coming.

As I understand it, REINZ = actual selling prices, whereas QV is a modeled assumed house value across all stock where actual sales is just one of the inputs.

Both should be viewed together, perhaps the REINZ being a lead indicator (although listings are a little higher up the pecking order in terms of indicators). A flat decline in average modeled house value doesnt mean that's what it could sell for... it just means book 'value'. All the additional listings and reduced sales at reduced prices will eventually flow into that.

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10

Aucklanders fleeing to Masterton, Hawke’s Bay, Dunedin etc, bumping up prices 16% or so.

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10

We did just that 9 months ago. Lucky to have bought our place so cheap in a good location. Prices used to average 150 - 250k now it’s 250k plus.

Palmerston North is also great city to live in.

I much enjoy exploring it.

Very affordable housing. Highly recommended!

TTP

I’ve probably mentioned before, we bought in Masterton and often drive to Palmerston North for day trips. It’s a great place!

Mmmm not a big fan. Inland, soul-less, average climate, uncultured

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This pretty much accords with my "analysis" of recent auction sales and their relationship with latest RV estimations. I practically said this myself from the article:

Values are holding in well located areas while they have dropped back in some areas further out of the city centre
However other tightly held areas, particularly in central Auckland are still doing well and seeing values still rising

Almost all of Auckland has gone up in the last three months with only parts of the south declining slightly.

At this stage it would appear that the fevered rantings of John Wheeler, CJ099, Retired Poppy and Didge have been quite wide of the mark while readers would have to conclude that Eco Bird, DGZ, Ex Expat, TTP and my own insights have been remarkably accurate.

Zachary I did clearly point out that Auckland's price falls would mainly sink in mid to late next 2018. That because property crashes take on average two years to take effect. We all kow that the clock has been ticking since January this year from the start China's clamp down on capital flight.

Remember we're already starting to see the results of this in causing prices falling in central Auckland including the expensive areas, recently highlighted in the Herald from the latest sales figures.

So AKL property boomers like you are screwed, we can see that very clearly.
But you hang in there Zachary it's all part of the fun. :)

"So AKL property boomers like you are screwed"
how nice of you

My opinion is that the situation we are experiencing in regard to our current housing ponzi will lead to a very damaging correction and enormous damage to New Zealand's economy if it continues. Thus persisting in supporting our housing ponzi is either utterly selfish and unethical (if for greed) or foolish due to the very possible loss of equity in recently purchased property. Exactly how it will play out I do not profess to know but it surely cannot continue as it has. Obviously the stupidly high prices from Auckland sales are impacting on the regions. This effect will ease as Auckland prices continue to deflate. Time will tell folks but the ponzi has to end.

If that does occur I predict we'll see a sudden and strong swing in sentiment from own-two-feet capitalism to "the government should bail me out!"

Hi CJ099,

You keep moving the timing out for your much yearned for crash.

A while ago, you (and your mates) were insisting a crash would come in 2017......

Now you've moved it out to mid-to-late 2018......

No doubt in another few months you'll have postponed it until 2019.

Sorry, my friend, but moving the goalposts to suit your own agenda is not ethical - and certainly not convincing.

TTP

I've never been one for trying to predict a crash, what what exactly would be unethical about changing your predictions as more data becomes available? I'm always most suspicious of those who attempt to fit new data to their opinions than those who fit their opinions to new data.

Another desperate attempt from TTP to discredit. You're welcome to go back through my comments and point out where I said that it would be this year? I think you'll find that you're wrong about that. I've been very clear about the time frames. Mid to late 2018 it is.

Hi CJ099,

There's no need for me (or anyone else) to discredit you.

You do that yourself - compellingly.

TTP

I just relate what I see personally and what an agent I know tells me, after I’ve given it a sanity check. My interests are very narrow, Auckland’s Eastern Bays. I have no axe to grind except that I openly oppose this Government and it’s accidental Prime Minister, even while they personally enrich my family e.g. giving fee free University to a household with an income more than $250,000. Crazy.

Btw what happened to O4 Normal? He was posting of doom on a daily basis and has now ceased.

I'm assuming they left the country.

ExPatty
Why are you residing at the end of the world ?
I’m always fascinated by people who live in Auckland of all places & espouse elitism !
Hilarious!

I've done the third world, I've done international financial centres and I came home after it all to be close to family, with the best lifestyle I could imagine. Certainly better than anything I saw overseas for double the cost.

I know a number of expats who lost their high paying jobs in UK & flew home around 5 yrs back. They thought they’d never lose their jobs and suddenly these 40 something’s are flying home .
Auckland was wonderful but mass immigration at 1.5% of population a full 1% higher per capita than UK has just made Auckland not the best lifestyle anymore in my opinion
You neglect the fact major world financial centres pay higher remuneration that offsets housing in my opinion
Enjoy life my friend it’s very short

Did you also receive a free university education, yourself?

It's not too late to donate the equivalent in today's costs to the university or the IRD, in solidarity with capitalism ;)

No I didn't receive a free university education. I studied through the '90s so had to pay. The taxpayer has done well out of the 80% odd that they covered as my base income tax would cover four superannuitants.

Fair enough. You make a good case that funding education is a wise investment for a country.

(That said, we would probably both agree it's best to be targeted and potentially more than it has been in recent times.)

My study was very focused as I did it in my early 30s to enhance my earning potential. I paid my fees out of income and never incurred debt. I really struggle to understand why the Government has prioritised this huge spend to add so few new students at the margin. Anyone with half a brain should understand that education returns the individual investment many times over. There is no inherent need for the government to pay 100%.

Agree, it returns to the individual. That said, we don't demand parents pay for their children's primary or secondary education as we recognise it's better for everyone to have an educated population. Clearly there is a balance required, and we probably both agree it's neither 100% nor the situation the USA has gotten its young people into because of the greed of the elders.

Last time I heard 3 years ago the US student loan debt stood at $1Trillion
No prospect of ever being fully repaid
They do produce the worlds highest number of PHysical Ed Degrees
Such a success story

Ex Pat I think Rick was meaning to focus funding on those students who have academic ability to actually attend a university
Far toomuch of a scattergun approach has taken place partly because students don’t show up on unemployed
statistics so governments are happy to park non academic students into university course they’ll never finish.
Was your degree/s in IT ?
If so everything appears crystal clear

I was in the Financial Markets, then trained in Accountancy after the recession of the early '90s. I now consult to firms in financial difficulty.

Excellent Ex Expat
Pleased to communicate with you

Ecobird and/or TTP have gone on record saying house prices never drop? Despite them dropping? Very charitable definition of "remarkably accurate" you have there bud. It's way to early to call one way or the other.

In investment parlance, the risk downside is still currently outweighing reward upside.

Let's be clear though - that means that all the people that bought 12 month ago in Auckland with an expectation of gains have received what..... remember, an average stock value being flat despite many newbuilds of higher average value than reasonably poor 1950's stock coming online actually means the older stuff (aka investment properties often) are backwards.

Hi MisterB,

You write, "Ecobird and/or TTP have gone on record saying house prices never drop?"

I have NEVER said that. You are MISREPRESENTING me.

Most recently, I've been stating here that house prices will oscillate/fluctuate over the foreseeable future. This includes downward movements in price - obviously. Many people here will recall I've been saying that for quite some time now - it's nothing new.

TTP

Indeed - the figures show that property prices are holding well.

Even Auckland (where prices surged ahead of the rest of NZ during 2014-16) has shown only a very marginal drop - on average 0.5%. And, notably, house prices in its inner city suburbs have continued to climb.

Agree with Zachary (above) - the rantings of certain individuals have been misleading and deceptive.

TTP

"Agree with Zachary (above) - the rantings of certain individuals have been misleading and deceptive." Time will tell but be very careful regarding your spruiker rantings. If our housing market does collapse and bring down our economy, there will be many extremely desperate and angry individuals. I suggest that you and your ilk would be very wise to disappear from public view.

great we just need those flat Auckland house prices for another half century in order for 2% wage inflation to catch up to 2010 house price to income ratios.

A young couple may have seen the perfect house in Papakura three months ago but heeded the advice of the likes of Didge and Retired Poppy, both happily ensconced in their mortgage free homes, and held off buying only to see values rise in that area by about 20K. Or Wellington North, up by over 30K.

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The properties i've been looking at over the same period in Wellington have reduced in price $50k-$100k already so far, and suddenly RE agents are actually nice and pleasant to buyers again. Could be that those that held out on Papakura just need to wait a tad longer to find their discount. Markets don't tend to stay uneven really.

We can only really go on actual sales prices. The figures for Wellington show a rise in value for all areas over the last three months. While I highly value local, on the ground observations, I am a little dubious. Would be good to have some links to properties that you believe are 100k cheaper.

Zach, pretty much most of Wellington city property market is coming on at more reasonable prices IMO. I'm off to look at a section tomorrow morning that has been reduced by $50k after sitting on the market 2 months.

https://www.trademe.co.nz/property/residential/sections-for-sale/auction...

This one reduced since listing https://www.trademe.co.nz/property/residential-property-for-sale/auction...

And then another one on Sugarloaf that has a trademe estimate value of 1.2 million (beautiful house too), came on at 1.1, no takers, Dropped to 950k. No takers. Changed agents. Back on a 1.1, then dropped to 999k and now withdrawn again.
https://www.trademe.co.nz/property/insights/address/Wellington/Brooklyn/... (no current listing as recently withdrawn but not sold)

This flat has come on $100k below the RV. It needs earthquake strengthening but there wouldn't have been a discount last year
https://www.trademe.co.nz/property/residential-property-for-sale/auction...

All of these properties would have sold very quickly late 2016/early 2017. I have been watching the market like a hawk for 18 months. It has definitely turned in my experience but isn't crashing or falling off a cliff like some have said. Not to say that it won't but the market is certainly more pleasing to me, as a potential buyer atm. I wouldn't expect to see an overall drop in value across Wellington region for a good 3-4 months from what I am seeing now (if indeed a drop is going to happen). And personally, I don't think houses here were that overpriced to begin with. Wellington values flat lined for a long time since the GFC and only just recovered with some quick growth, so we're still tempted at current prices.

There are lots of ex-HMO properties coming on across Welly too. Some with sitting tenants.

GingerNinja
Please limit your responses to a few lines for the benefit of spruikers
Zachs “analysis” remember usually involves a sample size you can count on one or two hands max

Dear Spruikers
Of course the property market hasn’t “Crashed”
Yet sentiment has changed drastically from when I sold at near peak
This is fact
The Chinese aren’t arriving in a van with clipboards & translators to Auctions today I’ll bet.
Cashed up buyers aren’t about to buy Auckland property for an investment purposes today for the very reason they know there’s a good likelihood of a decline in prices
If you believe otherwise I have the Brooklyn Bridge for sale

Gingerninja, as a Wellingtonian born and bred, if warmth and sun is important to you in a home in Wellington, check Sugarloaf Hill very carefully. Stunning views yes, but afternoon sun, check, check and double check. Especially in the winter. All those hills in Wellington east facing are not good in the winter for warmth.

Have you thought about the Hutt Valley. Warmer and sunnier and probably cheaper than Wellington but commute to Wellington is somewhat of a pain! Good luck with your search.

Hey, as a Brit born and bred, I will be importing a top if the range gas eco boiler from the UK, along with my kitchen, bathroom and everything else I can get in a container and then paying through the nose to have it installed ;-) BUT nothing beats gas central heating.
We'll have double glazing, insulation in walls, ceiling and floor. We're currently on the other hill in Brooklyn, and whilst we have sun all the time and amazing views... it's still freezing in winter, simply because of the wind factor and lack of decent heating.

We don't have to commute as we run our own business, but we want walkable proximity to the the city for life style reasons. No interest in the Hutts at all, we have family there so are there regularly, but it's not our vibe and we don't want to feel every earthquake. In Brooklyn, up on the bedrock, we barely feel them.

Hi gingerninja,

I hear that the Wellington suburb of Brooklyn is a fantastic place to live. It's close to the CBD and gets great harbour views and sun - plus zoned for preferred schools (such as Wellington College). And, yes, it's considered a good risk in the event of earthquakes.

I imagine Brooklyn will become increasingly popular. I have friends who have lived there for years and they say they wouldn't move anywhere else in Wgtn.

So I'd say stay put!

TTP

TTP yup Brooklyn is a stellar suburb, with a great school, our youngest just started primary so high school is awhile away, but being in good catchments for later down the line is still an important factor.

We like Aro Valley but that has some bad land slips and is at higher risk in a quake. And we like Kelburn but again, it isn't up on the bedrock so feels the quakes more, doesn't quite have the views and isn't as good for young kids. Brooklyn is very much a family suburb, which is important for us at this stage.

It's becoming yuppy-fied for sure. Once the hang out for artists, academics and drop outs. Will become another bland gentrified suburb, for sure

Gentrified suburbs aren't bland! I'd like to see the whole of NZ gentrified.

The CEO of trademe lives in Brooklyn, and has done for some time, as does Andrew Little I think...but there are still plenty of academics and artists. Not quite as bohemian as Aro Valley maybe, but certainly not overtly gentrified.
Also (y)oung (U)rban (P)rofessional. Not so much. Yes there are younger adults but it's much more a family suburb than a childless yuppie one

Hi gingerninja,

I heard Andrew Little lives in Island Bay.

Island Bay is the superb that has that awful cycleway going through it. (Otherwise, Island Bay's a delightful suburb.)

I've seen the cycleway. It's unsightly and ruins the look of the beautiful, tree-lined Parade - one of Wellington's iconic streets. Plus it's unsafe for everyone.

How could the Wellington City Council be so stupid (and treacherous)?!

If Mayor JUSTIN LESTER doesn't get his act together, he's likely to be a CASUALTY in the next local body elections.

Lester is arrogant and has blatantly disregarded proper consultation processes.

TTP

Possibly, I did see him in the Island Bay cinema recently, people move. But at least, he lived in Brooklyn at one point.

I love Island Bay too.

We had a soft spot for Days Bay. Faces the setting sun and very nice in Winter. Not so much fun in Summer when the ferals descend en masse.

The first link is a back section on the non sunny side of brooklyn hill still looking for over 400k

The second one is a 90sqm house with 3 bedrooms.

The third i cant ascertain enough information from your link

The fourth is a flat that needs earthquake strengthening

What you posted might be the least compelling argument against the QV figures possible. Then in the same breath you mention that you are looking at buying property!!!

Life is about incentives and you are living in a fantasy land.

Whaaaat Fegus? I'm not arguing against the QV figures at all. I specifically have not done so!? Just that these properties have either reduced in value or come in below RV. Regardless of the issues with them (and I do mention that there are issues) they would still have sold quickly 10 months ago regardless. All I have said is that the market has cooled. I didn't say anything about the QV figures.
I am looking to buy yes, have been for awhile. Watching the market. Have always wanted to build, and if that opportunity comes up, it may happen.

I don't see any reason to be insulting.

Gingerninja, auctions in Wgtn I have been to are still strong. Even problematic properties are achieving good prices. Areas of market that are slow are earthquake prone buildings, sections (lack of builders and cost of construction), stand alone houses in student streets in Aro Valley. The apartment you have shown has an NBS less than 34%, is dated and is made of concrete, needs earthquake strengthening, would you be comfortable living in this property or letting it knowing it could pancake in an earthquake? The selection of properties you have shown appear to be turds ie rear sloping section, earthquake prone apartment, house with no off street parking. Regarding 12 Sugarloaf, there may very well be a problem if you do your due diligence. That it what I have found, if difficult to sell in this market and vendors discount there is a reason they want to shift it at a perceived to be low price.

MJA yeah there is a problem with sugarloaf, the subdivision can't be competed until the building of garage and parking which hasn't even begun yet. So the owners are looking to sell and take the deposit and then the buyer not be able to start building until end of 2018. A lot of people won't fancy that. However it might work for us. We are still going over the details.

And yes things are still selling well in Wellington but the market has changed (softer, higher inventory, increased ToM) from when I first starting tracking it 16 months ago.

Wellington is usually 12 months behind Auckland in terms of real estate movements

Gingerninja, thanks for that. I think the people may be a bit put off by the Todman Street cladding. Brick or weatherboard seem to command a higher price. The section looks interesting but the lawns look challenging!
I wonder if people from other nations are put off by hilly terrain. In many countries only the poor live in the hills.
The Brooklyn apartment is no doubt affected by the earthquake risk and true I'd say now any property a bit problematic will be hammered.
I saw this today which looked like an absolute bargain in Auckland:

https://www.barfoot.co.nz/607652

Sold for 470k. 3 bedroom, double internal garage on a full section.
However this:
Street view

Now is not a good time to sell a problematic property. But they could be bargains for those starting out. Is a pylon really bad for you?

gingerninja, you seem to be suggesting that your data for Wellington is more complete than QV's ?

"The average value of homes in the Wellington region was $621,289 in the three months to November, up 9.8% compared to the same period of last year."

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Yvil, Zachary and yes you too TTP, you've picked a poor time for Glory Hog behavior. QV data, whilst based on actual sales prices, is already months out of date by the time it's published. The market has deteriorated considerably since then.

Now....take a DEEP breath guys, today's auction clearance rates are dismal in particular, areas such as Papakura. It's a buyers market. Listings ARE trending skyward and buyers have retreated which means, wait for it....the whole market is retreating together with buyers confidence!

Smart sellers meet the buyers today, naive ones ignore the obvious warnings and gaze at the stars for guidance.

FHB's wait, an unusually long slump is coming and right now is very much at its early stages.

I agree it's turning into a buyer's market but you're not adressing that for gingerninja to say that prices in Wellington are going down is a bit rich when QV data shows a strong rise of 9.8% p.a.

Yvil,

I'm not disagreeing with the QV data. The houses that I am seeing reduced haven't sold so they aren't included in the QV data and they won't be until they actually sell. I'm talking about what is currently on the market, not what the market did over the last few months reflected in the sales values of QV. I saw some sellers get great prices over the last few months in Welly. As i've said, i've been watching like a hawk. And not at all surprised that QV data still looks to be up. But the market right now is not as hot as that anymore. Live listings are not selling quickly, there are less tenders, more prices listed, and IMO the prices listed, not looking as eye watering. And as I have shown in the few listings in my suburb currently, prices are coming on reduced after sitting on the market.

Hi R-P,

Your post above displays all the hallmarks of an enthusiastic buyer trying to talk down house prices.

Sorry, my friend, but no such luck for you.

TTP

TTP, - it's not my talk that will bring down house prices!

I want for nothing more, I am surrounded with all I need. Through the school of hard knocks I have learned how to manage my money. It appears obvious you are still knocking on doors.

How’s damp Palmy TTP ?

Hi Northern Lights,

Yet another gorgeous, sunny day in Palmerston North.

I enjoy Palmy! Come and join me. House bargains ahoy!

TTP

TTP, I'm waiting for a rainy day. I'm sick of having to water the vege garden myself. Been doing it for the past month. Everything is so dry!

Palmy isn't damp. Alot less rain than Auckland gets. Even the notorius wind has been missing over the past few years. Older houses are cold and newer houses and renovated ones are just the same as anywhere else in NZ.

Don’t any of the spruikers here see the paradigm has changed yet ?
The large numbers of Chinese speculation gone
The change to a Labour Greens NZ1st govt
The slump in the $NZ
The immigrant hoards stressing infrastructure & health services
The clogged roads with little funding
None of the spruikers choose to recognize things have changed
This isn’t 2015
None of the spruikers here would survive the year in NY RE
You’d all go broke with your hokey analysis

Auckland house prices crash 200k since March 2017. Tauranga falls 50k since March.. Slowly working its way down the country. https://www.interest.co.nz/property/91100/lower-house-prices-see-central...

"Auckland house prices crash 200k since March 2017"... Please provide your source, the link you provided does not support this.

I think the OP doesn't understand the difference between median and average.

See https://www.tripsavvy.com/median-vs-average-what-the-difference-2682237

"The expected [Hamilton] spring rally has not yet eventuated."
It won't with listings up 27% in the last 6 weeks.

Cannot agree. At least 7 bidders for this Hamilton property yesterday. Sold well over cv
https://trademe.co.nz/1463110241

Houseworks, with the sale of just one property, the entire Hamilton market is ablaze? - love it!

Haha. Also not dying in the doldrums

A developers delight!

Housework needs doing I suggest
A single auction does not make the market

Haha that is hardly a representation of the Hamilton market. Lugton's withdrew 3 or 4 properties before auction yesterday. Just 2 went to auction. 2 sold. I guess that's one way of getting 100% sale rate. Lugton's sold 9/22. Awaiting Harcourts results this afternoon.

..some of that 27% is seasonal. Trademe listings for the Tron up 18% on 12 months.

Trademe should not be used to compare Hamilton listings. 2 of the biggest agencies, Lugton's and Lodge list very few properties on TM. Realestate.co.nz has a much better market representation.

...of course is back of the hand stuff and I am well aware of the shortcomings.... it could vary based on movement to or from sites - but I suspect nothing significant in that regards has occurred in 13 months or so. However the biggest agencies may also suffer same....at some point punters will realise a private sale on trademe is an effect sale technique. So trademe listing go up..the big boys go down.

But more realistic than your 6 weeks worth...you've missed the seasonal moves.

Yes it is working its way down the country like Tauranga losing 50k since march. Hawkes Bay is also pilling up on old Listings according to Paul Whittiker from the biggest selling Real Esate Company , Property Brokers. Its got to be bad when even the RE AGENTS are saying things are not looking to flash.

With Auckland crashing 200k since March this year i guess that comes to about a $4,000 lose per week on average. It would be faster and easier to just go to the ATM and withdraw out $4,000 each Friday afternoon and then throw it into the nearest rubbish bin, LOL. Or of course you could buy a house off our favourite R.E agent Zachary Smith, TTP etc, and he will kindly do this for you !

Hi John Wheeler (the dealer),

What you say does not stand up to scrutiny.

Read the objective evidence above.

TTP

While I have no doubt that the odd person has paid 200k too much for a property in Auckland you cannot extrapolate this to conclude that all houses in Auckland have dropped 200k. That is just patent nonsense that everyone can see by reading these latest QV figures.

...But you do fundamentally the same thing when doing your 'analysis'.
Rules for one, and not the other.

ZS, for you
https://en.wikipedia.org/wiki/Asymptotic_theory_(statistics)
https://en.wikipedia.org/wiki/Convergence_of_random_variables

For TTP's comment above, claiming the figures are holding well. (and you too, ZS).
https://en.wikipedia.org/wiki/Sampling_bias

Nymad
Please don’t describe what Zach does as “analysis “
Ha!

It's analysis with quotation marks, always quotation marks. You could call it spot checking.

.

Buyers have:
Fear Of Buying Expensive (FOBE)
Sellers are:
Forever Understanding Current Knowledge Expectation Driven (F....D)

"First home buyers are still active in the market but the usual spring/summer upturn hasn't arrived at usual levels this year," QV Christchurch registered valuer Hamish Collins said."

Well of course prices are coming off the boil in Christchurch. Prices have been elevated ever since a once-in-a-lifetime earthquake destroyed the housing stock. There's still some way to go before values normalise in Christchurch.

Something Wellington has yet to 'enjoy'?

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What this says is that in Auckland you would have done better having your money in the bank over the last 12 months.

Still a holding pattern as sales are so low all the recent figures are a bit misleading.

The supposed $200K drop in Auckland Central would be mostly due to the offloading of apartments in a low sales volume environment effecting the median prices.

I expect that a lot of Central Auckland homes will hold up quite well as there are a lot of quality homes, close to the city and great schools and still a lot of people out there earning big money. Alternatively I expect that areas like Waitakere, North Shore and Manukau in the $550K - $1M range are due for a big hit as they are not affordable to the population that want to inhabit them and a lot of the stock are dumps.

There is nothing to support a surge in house prices in Auckland so I think over the next 6 months we will get a better idea of where this beast is headed

Yes agree with you and once foreign buyers are locked out, central Auckland will fall at a faster rate.

CJ, I think the banning of foreign ownership will not make a lot of difference. It's headline making stuff as it is easy to find a way round it and also will not include new builds which the foreign investors prefer to buy anyway.

Hi CJ099,

You wish.........

TTP

Hi CJ099,

Foreign buyers have not been locked out......

Unsurprisingly, they've invented ways around the regulations.

They're as keen as mustard about property investment in NZ........ and their preferred locality remains Auckland, followed by Wellington.

TTP

Nice to read a balanced comment

I see the RE acolytes/agents are up early in the comments section......trouble sleeping?

It's just one guy. Since houses aren't selling he has nothing better to do.

Do You know The saying about the early bird? ... it gets in there and gets the results

Second mouse gets the cheese though.

A rolling stone butters no parsnips.

Brock Landers, I agree and have been saying for awhile that yes it is only just one guy. He goes under many different user names and keeps adding more to vote with. I have noticed Zachary Smith got 12 votes today for a comment, thats a first. But when you think about it , it must take a lot of time to vote for himself in that way so he must choose carefully with his time which comments get priority eg The first comment of the day, or a desperate comment to change the overall mood that the market indeed is about to crash. Notice also how his most common fake user names eg TTP , Zachary Smith, Yvil are always right there to support each other ! Same R.E Agent desperately trying to manipulate the forum.

They're excited because it's only one sleep until Chinese New Year.

Yep things are going to get really interesting once the foreign buyers ban kicks in early next year.

By the way, We haven't had much news from the auction results lately. Oh yes silly me that's because there's not much selling at auction now.

Just let you know Chinese New Year is a little bit late this year, starts on 16 February 2018, till to 2 March, the Lantern Festival. Happy Chinese New Year everyone in advance!

Who are the R E agents in this comments section ?

ask that question looking at the mirror :)

Why do you imply that I'm a RE agent H O ?

just kidding mate, I didn't mean it

Auckland prices up 0.4% overy the quarter. It is all about location, location, location. Central better areas doing better.

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Nothing has changed, whole market heading down and this is just the beginning of one hell of a mess. There ya go, said my piece :)

No area is immune from what's about to happen.

Anyway, I thought by the time QV data was published its already three months out of date.

QV data presented in their report clearly includes data for November 2017. Hardly out-of-date but don't let that stop you repeating it.

Simo, nice try. The following is straight from the QV website;

If the sale has only occurred recently, we may not have received the sale yet. We receive sales information from the local council after settlement of the sale is complete. Settlement is usually 4-6 weeks after the agreement date. At that time the solicitor completes the sale notice and forwards this to the local council. The majority of sales will be in our system 6-8 weeks after the agreement date.

Okay, it's not exactly three months but it's still out of date by the time they publish - there is a lag.

https://www.qv.co.nz/help/FAQ

Its out of date in such that auction results published by the likes of Harcourts, Barfoot and Thompson and Bayleys are as real time as you can get. Auction clearance rates are currently disastrous. A surge in listings in recent weeks has turn real estate very much into a buyers market with a growing overhang of inventory. I believe this inventory will resume its growth path mid January 2018.

Hope this helps.

Hi RP,

Here is the link and the actual QV report is embedded in the article:

http://www.nzherald.co.nz/property/news/article.cfm?c_id=8&objectid=1195...

This clearly is their latest report.

All the reasons you mentioned in your last paragraph have been evident since around May-June 2017, this is the anecdotal evidence we are all aware of (30% auction clearance rates, volume of sales way down etc) but not hard data presented here today by QV on actual house price movements. You can argue the direction of the market prices either way depending on your preference, anecdotal evidence or hard data on prices being achieved on sales through to November 2017. I prefer the latter.

Simo, a link to a NZ Herald article?

I love this bit especially; "It appears the spring/summer upturn has finally arrived in the housing market," said QV national spokeswoman Andrea Rush.

If this were true then auction clearance rates would be soaring, inventory clearing fast and Barfoots would never have recorded their worst sales since 2010 - do you believe that?

No, the link was so you could open and read the embedded QV report in the article without having to read the journalist take on it it. You missed my point entirely.

We all need to be careful that we are not perceived as giving advice. Who knows what policy, world events etc will happen in the future. I see a world in 10 years time where we all earn 1 mil a year and houses are worth 10 mil (in Auckland - a lot less in Whanganui).

This is still one of my favourite articles from 2012 - http://www.nzherald.co.nz/property/news/article.cfm?c_id=8&objectid=1084...

And where did he re-buy? Wellington! Which given the text of this article was a good move.....

(Oh, and 10 years time? That will be into the teeth of the retiree cohort selling up, 17 years after is kicked off in 2011. Boomer cashing-in all over the place, just to get enough out of their 'investments' to live from. Jobs and wages crushed by technology and mass unemployment deflating the cost of ...everything. Ivanka Trump? Going for her second term!)

the downside is so MUCH harder to measure. Look at recent Auckland auction clearance rates - the figures in this post only give a picture about what is selling, not what is NOT selling. Most are NOT selling. That is the key here. Also the fewer houses that do sell, the smaller the sample for statistics. What if only 1 house sells in the month for more than it was worth a year ago, but the other 999 houses didn't sell at all, then the figures will look good price wise.

Chch holding up extremely well with the lower quartile homes going up.
Not rocket science due to the uncertainty with this new coalition.
At the end of the day a homes worth is what someone will pay for it!
Yu the property at a great price and you will always be well ahead!
Chch market is going to rise this coming year!

THE MAN 2, make sure you leave some carrots for the reindeer, cookies and milk for Santa :)

Some regional capitals have higher values than Christchurch. Not surprising really. The weather. The quakes. Lack of work opportunities. The isolation from where it is really happening in New Zealand. Hence its inability to grow its population and its dropping house prices and rents . And its empty commercial premises as reported of late. Should have bought houses in Dunedin and the Lakes.

You talk about weather and isolation and then suggest Dunedin and the lakes.... I don't often agree with TM2s views but he is correct in saying chch is heading in the right direction.

A lot of people earning big money in Auckland? Please. Auckland is a low salary city people move away from it to earn "big money" These multiples can not be supported on an Auckland income. There is often a surge before a long sustained correction and far more factors are pointing to that.

A lot of people do earn big money in Auckland

Yvil, a lot of people do earn big money in Auckland, yes true and they have big matching mortgages too.

The same can be said for any city - this is hardly in depth analysis.

It's good to see that we agree

And a lot of them are rubbish with money.. Dabbling with lending on Harmoney and people with a $11k/month income borrowing $40k @19% interest to update their furniture in a rental they've been in for 10 years.. crazy

Don't let the facts get in the way of your post https://www.stuff.co.nz/business/98016625/auckland-tops-income-table-as-.... Average household income in Auckland is over $120,000 according to this article and construction jobs are $90,000.

...And what is the relationship of the mean and median / distribution?
Over half of Auckland households earn under $100k p.a.

https://www.interest.co.nz/property/house-price-income-multiples

Not sure where those numbers came from. On the NZ.Stat site viewing household income for the Auckland region show the average at $2,111/week ($110k/year) and median at $1,778 ($92k/year)

This is income from wages and benefits only and does not include investment gains so maybe this accounts for the difference. Although, even with investment gains, the median figure is probably only $100k per year.

Median is the best indicator. This shows that 50% of households are earning less than this,

Every house can drop in value while still increasing the average sale price for a set period. If you have a much lesser proportion of sales in the lower quartile of a preceding average, then the new average price would surely go up?

Houses that are selling might still be "x" above RV, but that in itself is not indicative of current house price inflation. The unknown is what these houses would have sold for 6 or 12 months prior, which cannot easily be measured. For all we know "x" above RV now could have been "x+5%" above RV 6 months ago, and if that were the case we'd have a declining market. Taking into account my first paragraph, a declining market with stable or rising average sell prices.

I don't know why anyone is getting butt hurt about the QV data. All the info coming in is that mostly, the market is at a kind of stand off. More inventory, less sales, longer ToM etc. What the market does next will entirely depend on sentiment and whether it is buyers or sellers who capitulate this month, next month etc.

The houses currently sitting on the market and that are not selling, are the very ones that will ultimately lead to a drop in value showing up in Jan/Feb QV figures. If they even sell at all, or if they even sell at a reduction. Sellers maybe withdraw these properties and decide to hold out. It's only if sellers *need* to sell and have to capitulate that prices will take a hit. That is a definite possibility but it's not a certainty.

All you can truly say is that the market has changed and isn't as hot as it was. We can all make predictions as to what will happen next, but it will only actually be forecasting. As fun as that is, it's not worth being arse holes to each other about.

We personally, have been waiting to buy because the opportunity cost of doing so has been pretty minimal for us. Time will tell whether we lost or gained in that decision.

Time and again .... A catching Gloomy headline, contradicted by most of its substance - choozy numbers to satisfy the doomers ...I read this news a bit differently here:
http://www.sharechat.co.nz/article/8bcfeda6/nz-property-values-bounce-ba...

In such a turbulent year, The essential indicator or measure IMO is the rate of change in the last 3 months in each city or area - this is the present from actual sales numbers, not the past, Not volumes, not hopes .... and it is an indicator of a trend for the next 3 months ---
A comparison of YoY is only meaningful in a stable market where almost all factors are equal, not in a year full of spikes and interventions.

So far, The Crash didn't happen and does not seem to be looming on the horizon ...may happen next winter or next year? who knows ... but we better be honest with ourselves than put the head in the sand.

I think The next 3 months will see the same trend. Quality houses will appreciate even more and rubbish home prices will deteriorate as a result - The wise buyers will take advantage of the low interest rates while they last and save some money.

Interesting times ahead.

If the houses at the bottom end of the market are not selling, then surely the averages will be weighted upwards? This isn't indicative of house price inflation but skewing of averages.

Must be plenty of cash buyers out there, because the mortgage stats paint a different picture:
> New mortgage lending is down $1.2 Billion from October 2015 ($5.8B) to October 2017 ($4.6B).
> Owner Occupier - $1.29B down to $0.91B same period
> Investor - $922 Million down to $506 Million same period

https://www.rbnz.govt.nz/statistics/c32

I think the mortgage lending stats and their projected trends are very important. If mortgage lending is not maintained at its current levels then house prices must fall. It’s mortgage lending which puffed up the prices in the first place.

Yes, but the RBNZ is signalling the further loosening of LVR limits. This will allow an increase in mortgage lending and consequent further puffery in house prices.Of course this is irresponsible, but the RBNZ will see any financial crisis as an "external shock": -their paradigm makes them incapable of seeing that it is their continued slack regulation of lending that will create a crisis.

Well, we should wait and see what kind of lever RB has with LVR limits. They may not have as much effect as people may think, as lenders will have their own LVR limits to apply.

What's also important to note is how it compounds the other way, that is we have less total money being lent despite house price growth so the overall pool of borrowers is much less.

Out of interest Eco Bird - how much more expensive do you think houses can get before our debt/income system/s can no longer support prices? There must be a rough limit somewhere that you would agree to and if its not now, when and what would it look like?

The view of some on this site is that such ratios are irrelevant and what matters is affordability of debt service. By reducing the costs of debt service via the OCR the RB can maintain house prices at whatever level is the function of incomes and debt service. If that means a level of 10x income, or 15x income, or 20x income, thus it will so be. They believe rational borrowers will be willing and able to borrow, and lenders will be willing and able to lend, 25 year debt at whatever multiple of income this produces. Whether or not such debt will remain affordable over that 25 year period is not a relevant concern. Neither will it be a relevant concern whether the value of the asset may fall in the near or distant future.

I think this is a fair summary. Laminar is squarely in this camp. I assume so is eco bird.

Which omits what will happen to savings and superannuation schemes etc., if such a ponzi continues.

Agreed, otherwise if no one wants to take that risk and have a mortgage phobia , then they have the choice of renting for life so they won't face any asset depreciation and pay less for housing the family and have a great lifestyle ( as rent is usually less than half the cost of ownership) ... if they chose.

There is a limit:
- 0% mortgage rates - impossible as the bank will not make any money.
- 100% or extremely low equity mortgages
- 100% of household income going to mortgage - this will never happen
- All mortgages being interest only
- leasehold land

Can anyone think of anything else

Like I have said on here before, the "tools" to make houses "affordable" will some day run out.

It most definitely is relevant. It seems 1st world countries are getting poorer by the day across the working and middle classes. As house prices outstrip incomes, every day there is less disposable income to spend elsewhere in the economy.

I have read around here people are spending up to 60-70% of household income on debt. To me this is pretty much the tipping point. Any family problem - loss of job, health etc could lead to disaster. At these levels there are some very exposed people.

At the end of the day, what have we REALLY gained from this?

At this point you'll see more current owners replicating what some on here already have: shrill calls for more wealthy people from overseas to come and buy the houses off them.

Why would you think that house prices are solely related to D/I ratio of "Some" people? and I assume you mean FHBs or young couples ....They are not the only buyers in the market .. and D/I ratio is only relevant to the price of the house someone can Afford !! - Not the upper quartile houses. You might be assuming that house prices should only be referenced to average wages of say a young couple.- and that is untrue!

The cheapest homes the Gov will be able to build will be in the $550 - $600k range ( Obviously in the main centres, and that will be a terrace house or apartment or similar small 2-3 bdrm dwelling)... if buyers cannot afford that ( next year) , then they have to wait and save to get there ... the rest of the country is not going to discount houses for this category of buyers as long as others are prepared to pay asking ( market) prices ... and that, I afraid, is the naked truth.

Again, houses are not commodities. every house value is what a buyer is prepared to pay for it, hence the Sale figures are the best of all indicators, not the unsold or unaffordable, or stock inventory .. etc ... generalization is a pitfall and must be avoided if we want to be objective about this matter!

House prices are almost stagnant at the moment and might well continue for some time - appreciation of 2 - 5% pa is normal in such markets and inline with inflation. House prices are essentially measured ( among other factors) by comparison with New Built homes of the same size ,quality, and similar area and as construction and land prices go up so will the houses in that area. All that has nothing to do with D/I.

The Fact that Auction clearance rates lately are between 30 and 50% is a healthy indication that the market is alive but slow - so there are still people out there who think it's a good time to buy now. They are taking their time because they are spoiled for choices ATM ...

I took the courtesy of reading your reply and now realise I won't get that 45seconds back....you didn't address what unaffordable housing would look like to you, and if not this, here, now, then what?...If we get to 20x average income, would that be the top of the affordability index to you? Or can we just keep creating more debt and trust that interest rates will never rise causing people to default on loans?

So how do you suggest we measure affordability across the market over time?

We Don't ... because there is no one size fit all at any given time - what is unaffordable to John today may become affordable next quarter.
Your Affordability is determined by your lender according to what you are currently worth ..., if you have enough deposit and the ability to service a certain loan, then that combination is the highest house price you can afford to buy !

The Yardstick that you might be looking for Does not exist and it is complicated because it does indeed depend on the individual and his risk profile .... Wish things were as simple as some here are able to compute.

some here want a simple DTI benchmark, well ...where? in what town ? which suburb? ... Are we going to determine DTI for every street?

What if we set DTI of say 5, does that mean all those who don't qualify have no chance of buying anywhere in the centres so should move to the regions?.....or that house price have to come down to that level so the majority could afford houses .... So what will be our reference income?? 60K, 80K, 120K , or 200K?

House prices are not going to follow DTI, It's the other way around !! but some still think that in THIS market if there aren't enough buyers then the market will eventually crash ( or has to come down to meet these buyers with low DTI) ,... Well think again, and note that we have been in this dilemma for the best part of 9 months now. the market didn't crash, supply is shorter than ever before and building of new houses is at capacity ... even the 10000 affordable homes are becoming questionable now !! anyone who wants to buy and happy to wait then for the crash, then Good for him..its up to the individual to decide !! just dont leave it too late when the houses appreciate and IR rise again!!

They have DTI in the UK a much larger market then NZ and a finacial powerhouse Worldwide, if its good enough for them, then a country the size of a city in some places it should be good enough.

Whatever spin you put on and there is a lot of spin, if the banks dont lend and people cannot afford then people just cannot buy. The only way I can see people affording a house with house price increases that you suggest is 30+ year mortgages. Lifetime debt, yee hah.

You seem to have macroeconomic blindness. The median multiple is a time tested metric which can track the market over time. Other useful metrics are price-to-rent (inverse of yield), household debt to GDP, housing costs to income %.

All of these are at record highs. Please tell me why this time is different.

Kiwiimm, certainly not the median/ average wage. Need to take the median/ average household income of the average owner occupier. As home ownership rate falls, property is becoming the bastion of high income earners, or those from families with wealth. What someone earns making coffee, or flipping burgers is irrelevant.

Also a lot of wealth has been made over the last 20 years, many home owners will be using said wealth to purchase, and will not be financing a standard 80% LVR mortgage.

In the extreme the median household income may become irrelevant if property ownership becomes concentrated within the moneyed class, and only high earners or successful entrepreneurs are able to achieve home ownership if they were not born into wealth. This may be the situation in 20-30 years with increasing robotics/ use of AI and degradation of the environment in other countries eg smog in Delhi cricket test the last week.

If you base this 3 months against the last, and worse want to extrapolate that out to the future, you must have been under a drainpipe for the last 6 months. Where's the seasonally adjusted numbers!!!

This website sure does like to endless bang on about houses to get those boomer clicks.

Meanwhile, bitcoin up another 22% today.

Wonder if the price of Bitcoin is also related to D/I ?? :)

Brock Landers. I know right? We just cashed in 90% of our bitcoins today. We invested a couple of hundred in late 2012, early 2013 in a few mining co-ops in the UK. I'm not going to boast about how much that is worth now, but it blows any housing investment anywhere (even Vancouver/Toronto/Beijing and certainly Auckland) out of the water many times over.

Nice work. If only I hadn't spent the ones I had back then...

Brock, yeah we sold a bunch years ago too, we would have been multi millionaires if we'd held. BUT, those mining co-ops, and that money we spent on mining equipment years ago, have still be producing bitcoins albeit slowly, and some of those co-ops forked into other crytocurrencies too so we are keeping those to see what they do.
We just did it for fun mainly. We never thought it would pay off like it has. We feel a bit like that scene in Forest Gump where he opens his letter from Apple.

It's crazy. I still have a bunch of altcoins I mined in 2014 sitting on some no-name exchange somewhere. I just can't remember the details. Oops.

Brock!? Oh no! Don't you have that awesome encrypted password file somewhere that you stored all those deets?

I know the credentials. I just can't remember the name of the exchange.

It started with M? It probably doesn't even exist anymore. It wasn't a life changing amount :)

If it's MTGOX that turned out to be a ponzi and collapsed completely when they manipulated the price to above $800. Any assets have been seized by the authorities in Japan.

Haha. It wasn't Gox! I know people who lost dozens of bitcoins there. I can't even imagine how they feel about it today.

Yeah lot's of the exchanges have disappeared. Or evolved in to something else.

Hi gingerninja,

People who gamble on bitcoins are perfectly entitled to do so.

But it's a substantially different activity from long-term property investment - which is much lower risk.

TTP

How so?
In that most people ignore the fundamentals of investment when investing in property?
Risk of one asset class is only a factor when your portfolio is constituted of just that asset.

Fundamentally the elements shouldn't be at all different if you are going for the same long term approach:
Select your horizon.
Select your investment tool.
CAPM.
Identify the desired volatility of your profile.

How is that different between Bitcoin and property?

TTP!?!?!??! you don't know anything about bitcoin. And we took ZERO risk as aforementioned. We spent £150-200 GBP on mining equipment in 2012 and 2013. We just cashed in to the value of half a million. I think you'll find that was the best investment you have ever heard of. Do you think that £150 GBP spent on housing made anyone half a million in 5 years?!?!? hahaha. It was a mixture of pure luck and some level of geekery. There was almost no effort involved at all, we mostly did it for fun and because we had a hunch cryptocurrencies might take off in the QE mess after the GFC. No tenants, no maintenance, no hassle nadda, we just joined some mining co-ops and let it do its thing. If we had held on to the early bitcoins we had made, we'd be multimillionaires cashing in today.

NZ-ers are tunnel visioned about property investment. It's almost the only investment class discussed. I hate having an investment property and can't wait to get rid of it when the time is right (which will be the optimal time financially)... it used to be our home, so we're your typical accidental landlords. However, we will never invest in property going forward. It's an epic hassle and doesn't give anywhere near the returns of shares, or recently bitcoin.

Must have been agonizing making the call to cash out all that in one go. This could still run a while...

I threw in a bit nearer the start of this year and its up about 6x now so far. Of course, it's all a fiction until you cash out.

We have left 20k in Bitcoin, plus some in Bitcoin Gold and some in Bitcoin cash (which is currently not doing great anyway) but we didn't agonise for long cashing out. We've done amazingly and you know the saying.... never look a gift horse in the mouth! The recent growth has been vertical. And it's just worth too much to us to leave it and risk losing what we have.

We have cash savings also and now have enough money to build a house, so feeling very excited mostly. We will likely get building late 2018 into 2019, so if the construction industry is struggling then, we'll be helping our local industry.... in addition to not adding to the housing crisis but building rather than buying an existing house. So all in all. We feel pretty good ;-)

That's great. I'm really happy for you.

I remember people saying the same thing about property in the US prior to the collapse. Safe as houses.

There are ways to make good money from property but I rarely see them discussed here.

With that response, I think the shoe shine boy has been left speechless! Congratulations on your windfall gingerninja :)

We spent £150-200 GBP on mining equipment in 2012 and 2013. We just cashed in to the value of half a million. I think you'll find that was the best investment you have ever heard of. Do you think that £150 GBP spent on housing made anyone half a million in 5 years?!?!?

Well good for you, even if your description does sound like the success stories that you often find on websites trying to sell the get-rich dream. Unfortunately, the money tree carrot is all that most aspire to these days, whether that be Bitcoin or the promise of Chinese buying their home for a King's ransom. I suspect for most, this is driven mainly by hope and not necessarily a reflection of reality.

J.C. yup, it reads like a click bait story, i totally concur. On the other hand you will note, that despite having skin in the game with bitcoin, you will never have heard me spruiking it in the year or more than I have been commenting in this site. I have mentioned that I prefer other investments to housing, but never encouraged anyone to invest in bitcoin. And i'm only mentioning it now, because we've just cashed out.

As a young family, we never ever planned our finances in anticipation of any of our "riskier" investments paying off like this, we have just plodded along, mostly just planning our future on good budgeting and working hard at our IT company. Bitcoin, as I have said above, has been total fluke luck, plus maybe a little bit of geek savvy. However, even other safer non-property related investments still provide better and less risky, less hassle returns than housing for us, so occasionally, I like to remind people on here than housing isn't the only game in town.

, I like to remind people on here than housing isn't the only game in town.

Hence the current interest in cryptocurrencies among people who probably have no real understanding what they're about. For the vast majority, they're throwing the dice at the future. Is there anything wrong with that? I don't think so. Mind you, what we know about the level of savings held by homeowners, property investors, and non-property owners is that the vast majority barely have two sticks to rub together. I haven't seen any data for NZ, but 70% of Australians have <6 months of their income at hand (approx <50% have less than 3 months of income at hand). For the vast majority, cryptocurrencies are probably beyond their reach for the time being.

I agree. And we wouldn't have got into cryptos at any point over the past 6 months ourselves, as n00bs. For the same reason that we didn't buy into the property market in NZ anytime over the past year or so. I am greatly averse to bubbles!

.

Personally I wouldn’t put all my money in properties as they’re lack of liquidity.

At today's prices, most don't have a choice to put "all their money" into property because prices are the highest relative to income that they've ever been. Therefore, the punters are not just consuming shelter; they're using housing as an investment instrument. However, here is the crux: What if they consume and believe that their consumption is actually saving? But what if it's not? What happens after 5, 10, 20 years and they find out that they have consumed but they haven't actually saved anything?

If you consider scenarios from the above proposition, speculating on crytocurrency is maybe not as bad as it appears.

“For the vast majority, cryptocurrencies are probably beyond their reach for the time being” + “speculating on crytocurrency is maybe not as bad as it appears.” = 自相矛盾!

Well what do you know? Are you of the belief that property rises in value perpetually more than the sheeple can earn? If so, is that belief based on anything tangible besides "I don't think.....quite confident....might not realise a fact....we will be happy"?

Do you ever consider that your subjective feelings are possibly wrong?

夏虫不可语冰.... 另外不要总是用引号去反驳别人的观点,这是非常冒犯的。你不尊重别人,也不会得到别人的尊重。请你以后在这个论坛上改掉这种坏习惯。

Ok gingerninja,

Am happy to learn from you.

TTP

Try living inside your bitcoin, nymad

I can live inside my car - is that an investment?

Still sold for close to 44% above 2014 RV though.

That may be true but it doesn't mean much when you're the one left standing as the music stops

Zachary, a more accurate reflection of sentiment is that 2/60 Wallace road sold 10% below its 2017 CV.

True, although I am on the record for advising that paying 50-100% above 2014 RV for an average place in South Auckland was foolhardy. Especially so if only holding for a short time. I have always assumed one would lose money if needing to sell within two years of buying. If I was the seller I would have expected this sort of loss. Most of us "trolls" anticipate holding property for at least seven years or more. This is why many of us have held onto existing property when upgrading. By effectively selling our own properties to ourselves we get the best possible price and no commission to pay either. This mitigates that first year, almost guaranteed, loss.

Zachary, Huh? its funny you should say that because I suspect that it's the Boomers in leafy suburbs with new found paper equity that were behind the buying in the outer suburbs. "ädd another renter or two to my portfolio"

No area will be spared the effects of the coming slump. A stampede to deleverage and be rid of bad debt - its coming.

Its Irresistible only to the foolhardy the buying houses in other areas by using one's paper equity as security.

That's why the brightline test won't matter to some property investors .... Especially when the banks start reviewing loans when the interest only term expires. Some will be forced to go onto P&I which could turn the property from positive cashflow to negative cashflow. Then the property price is below the price you paid for it ... so you have a combination of negative cashflow, ringfencing of investment property losses & a capital loss. If a property investor now expects property prices to fall further, better to minimise that loss that wait for a bigger one later - after all while you're waiting for property prices to recover, it is still negative cashflow and a strain on the household finances ...

OUCH! I have to say if I was staring down the barrel of fortnightly mortgage payments that exceeded my income plus static or declining prices I'd cut my losses too.

Unspectacular report about property and trolls and sock puppets jump into action upsetting the usual contributors.

Human behavior is often quite predictable, particularly when the content is related to their perception of themselves.

If I had a sock puppet account I would have him ask me questions which I would then answer or a parody of a gloomer. It upsets me that you imagine I would be so un-creative.
The report maybe somewhat unspectacular but that simply confirms what the "trolls" have been saying is happening right now, deduced from personal observation and analysis of very recent sales. The others have been suggesting things are crashing, collapsing, in free fall, falling off a cliff, but things remain kind of unspectacular.

Oh, trolls are always on the money. That's an ubiquitous trait. They usually know more about climate change than everyone else and even organizations such as NASA. Their analytics understanding might see them fail high school exams, but on the internet, they're analytics masters.

I don't think you're a sock puppet Zachary. I don't even think you're a spruiker particularly. Although some people on here seem to act like that. And others are just very bullish whilst others are bearish which isn't spruiking necessarily.

I'm also inclined to agree that recent property news has not yet signified a spectacular crash. Although that doesn't negate the possibility that a spectacular crash is in the early stages or indeed we are just entering a softer market phase with a long period of stagnation. I dont personally think the fundamentals for the boom to continue and I can't see that occurring unless wages and the economy take off and/Or somehow overseas investors find a way and return with a vengeance.

RBNZ is pushing back ... Interesting time ahead folks
RBNZ SAYS SOME DECISION-MAKING 'EVOLUTION' MAY BE NEEDED, WANTS TO KEEP HOLD OF RBNZ ACT
http://www.sharechat.co.nz/article/f74f44df/rbnz-says-some-decision-maki...

Important enough for LARGE CAPS. Thanks.

Caps lock = Cruise control for cool ;-)

Sorry didn't mean to shout (caps) , I just copied and pasted the headline from the article so didnt pay too much attention ...:)

FatFreddy, what on earth could you not agree with?

Seriously, “The Man” knows what he is talking about so please advise me what you could possibly disagree with!

I have advised several friends on Real Estate matters and are now extremely more financially better off than they were!

I can teach anyone how to become financially stable if they are prepared to listen, and that is what this site is meant to be for isn’t it?

TM2, people ready to listen & learn ??? Not on this rightous forum, they'd much rather be right and poor than open-minded and wealthy

Why are right people classed as poor and why are open minded people classed as wealthy?

Yvil this is a terrible comment. I expect better from you.

Hi gingerninja,

"Age and treachery will overcome youth and skill."

TTP (-;

Seems you ask... your views on politics, LVRs, how much value landlords add to society, etc. But I agree with your view on chch.

FatFreddy everything I have said is correct .
Nothing incorrect with what I have said

Sure. Everything I have said is correct also.

Rental gross yields down to 1.5 - 1.7% in Epsom, Mt Eden, Remuera, Herne Bay. Other leafy areas not far behind. These are the places that will drop the most in the coming slump, just as what happened after the 87 crash. Its ridiculous to have yields at levels lower than that of the safest of NZ investments - Kiwi bonds.

Rental yields do matter as much as household income to price multiples. Fundamentals are only rubbished by those who are obsessed with property as being the safest of investments, not to mention the highly leveraged.

https://www.qv.co.nz/property-trends/rental-analysis

Yep, those yield numbers are pretty shocking. That’s GROSS yield. Less than the risk free rate of return. Wow.

NZ investment property yields are the new definition of the risk free rate of return - not government bonds..you've got it all back to front.

Haha, nice one, I laughed out loud. Nearly spat my wine across the room

Gross rental yields in Auckland are what could be referred to as return free risk.

That’s a joke, right? You’re scaring me

Bobster,

Let's take a look at the inner suburbs where gross rental yields are less than 2%. Mt Eden, where the gross rental yield is 1.7%. If you allow for 5% p.a growth in rentals for 10 years (which is pretty optimistic given wage growth), then use a gross rental yield equivalent to the current NZ 10 yr govt bond of 2.77% to capitalise the rental, that gets you to a property price in 10 years of $1.4mn - the same price as today. The net yield after costs is probably 1.0% p.a before tax.

If you were to capitalise rentals today at the NZ govt 10 yr bond rate, then property prices could fall 37%.

So very little upside return for a potentially large property price drop ...

The other thing is that in areas of Auckland where property investors a prevalent - say South Auckland, inner city apartments - if many of these become financially strained at the same time and sell at the same time to raise cash, there will be a rush to get out quickly before the other property investors so potentially putting downward pressure on property prices.

Oh I get it now, spot the deliberate mistake, v drole

IO, youve got to be kidding, Aucklands rental yields are the new benchmark of risk free return? - yeah good one! More like the new benchmark of modern day folly.

I prefer to approach it as if houses in leafy suburbs are the new tulips. But then the easy response is “they can’t be like tulips, because you can’t live in a tulip! And anyway, nz is not in the Netherlands, so there”. And you can’t argue with that, can you

I like your logic there Bobster :)

Ah, the new normal has arrived. We are officially screwed.

Ha! $120k household income in AKL is considered big money! Wow. That is about an average individual white collar income in Sydney! That AKL figure is still a huge average price to income multiple so this will come right back as will SYD. It is utterly ridiculous that a standard bungalow in Sandringham can command the same price as a Surry Hills Terrace. There is a huge market distortion there.

By the way have a look at 11 Ward Terrace, Sandringham, Auckland they paid $1.775M in Sep last year. Latest RV anyone?

Where else should they move in NZ to get more? Where can I live in Sydney within 500m of the beach and 7km of the CBD for less than AUD 2,000,000? How much stamp duty will I pay to buy that house?

https://homes.co.nz/app/address/auckland/sandringham/11-ward-terrace/DgWnv

Homes estimate is currently $1,615,000 (Dec 2017).

I have seen better capital gain than that.

The only thing I can find comparable in Surrey Hills - https://www.domain.com.au/30-high-holborn-street-surry-hills-nsw-2010-20...

2.14 mil NZD + 100k stamp duty
Terraced
100m2 land

To be fair, Surrey Hills is more like Ponsonby than Kohimarama, but it does show there are no bargains across the ditch. How much would it hurt paying that stamp duty?

Average household income in Sydney = $109k AUD or $120k NZD http://www.censusdata.abs.gov.au/census_services/getproduct/census/2016/...

Average Auckland household income = $120k NZD https://www.stuff.co.nz/business/98016625/auckland-tops-income-table-as-...

You can get a much cheaper and better house in Auckland than Sydney and earn the same money. Maybe Auckland house prices have some room to grow

There may be a real possibility of an interest shock for most people on the mortgage after Christmas. Good for those in interests earning investments than properties. Most multi property owners I know can't weather even a 1 percent rise. This will coincide with a general inflation of goods and services in NZ making disposable income akin like those from third world countries for many once an oppotunistic property investor.

Or interest rates could drop. https://www.interest.co.nz/bonds/91231/reserve-bank-acting-governor-says...

RB is concerned with bank stability. I just cant seem them raising rates into a declining RE market unless inflation takes off and we all get big pay rises.

It can rise when the cost of borrowing hits banks' bottom line hard or that the banks wants to minimise exposure in a speculative market in the long term. What RBNZ wants and how banks actually implement their wishesmight roll out in a way common folks may not fully foresee. Remember that there is a huge share of non-bank lenders aka. "sub-prime" institutions that holds mortgages in the market and are not under the purview or jurisdiction of RBNZ.

Stagflation might be a common vocabulary going forward.

Agree that interest rate falls next year could spark another round of house price increases.

That's quite a worry.

TTP

TTP, doing a little research would reveal the real story behind the RBNZ concerns. For the RBNZ to consider lowering interest rates when headlines read global recovery, it raises a big red flag - DEFLATION. The big "D" ranks as their number one concern. Easier to bang inflation on the head by raising interest rates but deflation once it sets in, is near impossible to solve - ( note japan)

As you know, there exists an unusually high risk of a global shock from either normalization of overseas bank wholesale funding, rationing of bank lending, bitcoin or even an stock market crash. You name it, red flags everywhere!

Don't stay awake at night worrying about another round of house price increases - it's not going to happen. The odds a very much stacked the opposite way. I personally can see times approaching of much lower mortgage rates, banks playing hard to get and a long and deep slump.

Prepare now. We are one more shock away from full blown deflation. A time when people are in no hurry to purchase big ticket items knowing they'll be even cheaper tomorrow.

Wellington prices up... translation...getting ready for all those new jobs in Government.

Kane02 nah, the housing bubble took ages to reach Wellington, prices in Welly had been flat and unexciting since the GFC, they only just really took off really in the last 2 years, so we could argue that they had some catching up to do anyway. Welly is noway near as unaffordable on DTI's as Auckland, and has been booming for a much shorter time period. The chill is catching down here, but if there is a crash...i don't think it will be as dramatic as Auckland has the potential to be.

after the gfc national cut government jobs and put caps in place. no demand equates to flat prices. wellington is only just catching up.

Not trying to be insulting, But you are either intentionally being misleading or are not very good at reading trends on the ground. I would say the first due to the nature of your purchasing position.

I'm sorry but I don't understand what you are trying to say. Could you please say something less obtuse.

Not trying to be insulting, But you are either intentionally being misleading or are not very good at reading trends on the ground. I would say the first due to the nature of your purchasing position.

A lot of enthusiastic banter indeed – but unless something dramatic unfolds probably no further meaningful indication of future direction until February or so next year.
Some possible good news during the lull though, it could well be an above average summer for those that relish outdoor or ocean-side type pursuits – enjoy!
To business - longer term I do wonder if a large slice of this market is sadly being priced to perfection – i.e. simply no room for error. I could well be wrong, but I do see this “no room for error” scenario being gently but surely challenged.
So moving forward, I believe market forces may exert an even stronger influence in the coming months – but just where and to what extent?
Bearing in mind as always, it’s ultimately just a market – with no given rights to any particular outcome.

Up down flat.....yawn. Pic your strategy and back it. No doubt that printed money and slack lending has created asset bubbles all over the world. PE rations to the moon and has anyone noticed the crazy prices of old Porsches just as an example. Such things could never affect housing in little old NZ.

The true state of our housing situation as a result of National's utter ineptitude. This report is straight from the horse's mouth.
http://www.newshub.co.nz/home/politics/2017/12/national-s-housing-timebo...