Bayleys Real Estate had a busy week in the auction rooms, marketing 92 properties for sale in Auckland, Hamilton, Matamata, Bay of Plenty and Marlborough, with sales achieved on 36 of them, giving an overall sales clearance rate of 39%.
The Auckland auction rooms were the busiest with 57 properties marketed for auction and sales achieved on 23 of them, giving a clearance rate of 40%.
The highest sales rate was at the Tauranga auction, where 11 properties were offered and sales achieved on seven, giving a clearance rate of 64%.
At the Auckland auctions a good range of properties were on offer and the prices achieved on those that sold ranged from $630,000 for a three bedroom brick house with a basement garage at Pukekohe, to $5.45 million for a modern, five bedroom home on two levels in Remuera.
Details and photos of all the properties offered are available on our Residential Auction Results page.
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187 Comments
Yes it's a sad reality of the situation. But the RE's have to make a fast buck some how, is it still $500 per auction or has it increased in the last few years?
I would have suspected that some agents would actually include the auctions as part of their property marketing paid for by their bloated 4%+ commission rates.
Zachary, get real! For 60% of vendors the auction fees are a complete waste of money. Agents do what they do best with vendors expectations by first lifting then killing. By this stage the vendor is committed. Agents know full well the weak state of play out there.
Inventory of unsold homes is building. Those with a desire to sell will be watching this play out. They will be anxiously waiting for market strength to materialize before listing. It's quite some overhang.
You list examples of prime real estate like the dodgy farmer presenting a few prime bulls with the remaining ones left emaciated in the back paddock. Your carefully gleaned examples are NOT representative of the wider market, it's only a tiny % of it.
A small part of the campaign really and completely optional. I would definitely go to auction. You have marketing costs, staging and auction. If you want a good price you will need to spend the money. Not to worry though as you will get it all back.
The impression I get is that a lot of commenters believe a thousand dollars is a lot of money. It's like old fuddy-duddies thinking five dollars for a cup of coffee is outrageous.
Hi nymad,
That's pretty rich coming from you.
Folk here will remember you boasting last year that you built economic models as if you were an econometrician......... but subsequently confessed that you didn't know the difference between cyclical and structural factors impacting on Auckland's housing market.
Nymad - some of us have good memories.
TTP
If people speak direct from their paradigm they give themselves a false sense of security that they are talking the 'truth'. Problem is, is that one's paradigm is faulty, then they don't see clearly (they're working with the wrong data and the wrong ability to process the data to make sense of it) so what appears to be the truth to them is in fact incorrect.
But absolutely ZS - I'm sure you always speak the truth from the manner in which you see and process information relating to the Auckland property market.
Last I heard a vendor doesn’t go to auction with a gun at their head. 40% apparently found a mutually agreeable price point and the rest, at least at auction, didn’t. Obviously a reflection of where the market is at.
That’s the truth of the situation and no matter how many counterfactual conditionals are propositioned it is simply what it is. Fail to see what the argument is. I myself gave up using the inestimable skills of REAs many moons ago principally because the service they offer provides no value to me whatsoever. That goes with a great many service offerings that I freely have disavailed myself of. As far as I’m concerned my RE record, adjudged by my stringent self imposed metric, would rate me as the best buyer/seller on my behalf, out there.
RP you will understand this and where we are in the cycle. https://youtu.be/PHe0bXAIuk0
Fifteen suitable properties added to the auctions results page since I last did my report. The house that sold for 5.450M actually sold for 950k below 2017 RV. I thought that would really skew my figures but the other houses got fabulous results giving us the usual outcome.
27.235M in sales with a 2017 RV value of 26.315M and a 2014 RV value of 18.875M.
That's 3.4% above 2017 RV and 44% above 2014 RV
Ten sold above 2017 RV, one the same and four below.
If I take out the best and worst performer I get the following:
6.7% above 2017 RV and 48% above 2014 RV.
I think it’s a given though, most sellers expectations would be at least 2017 RV so of course a large portion of property that does sell will ultimately sell for above RV. Otherwise it doesn’t sell at all, a bit like the 60% of other houses.
You could have a 5% auction clearance rate and still be above RV across the board.
That's true but we have a 40% clearance rate with properties ranging from 482k to 5.45M. 50 properties recorded in the results page in the last week. I think successful auctions are more likely to be around or above the RV. Good locations with good presentation is the key. I guess things are moving back to these old real estate cliches.
Talk about Bayleys, here's what PM Jacinda just bought for almost $2M in Cambourne Road in sunny Sandringham - near Eden Park LOL!
According to QV, its mid-2017 rating valuation was near $1.8 million.
Homes.co.nz has it's estimated low/mid/high values at $1,695,000 / $1,795,000 / $1,895,000. Rent estimates between $940/week and $1,100 /week.
PM Jacinda Ardern and Clarke Gayford buy new Sandringham home
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=120…
Jacinda Ardern and Clarke Gayford buy new home for growing family
https://www.stuff.co.nz/life-style/homed/latest/101946100/jacinda-arder…
DGZ, your talking absolute rubbish. Are you now suggesting Jacinda and Clarke are in over their heads? How so? And how have you determined that they are renting out the old Pt Chev house?
I suggest one reason for moving would be security considerations.
The part I think you struggle with is how on earth a humble female Labour supporter from Morrinsville could possibly wind up owning a substantial property in Sandringham. OMG HOW CAN THIS HAPPEN!
LOL we're all one big family :-) Here's how it's done...
'Jokiness and blokiness': How Bridges is emulating John Key
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12004488
Actually being once the abode of an ex Prime minister should make it easier to rent and for a good price. A lot of people would pay a premium for that, especially as it is Jacinda.
Poor Russell Brown will miss out on inviting Clarke and the baby over for a Christmas barbecue:
https://thespinoff.co.nz/business/26-01-2018/whats-happening-in-the-pms…
Simon Bridges is just the National Party "Patsy" and will be rolled on poor results before the next election and his replacement will also fail to gain enough traction. The only suitable contender to compete with Cindy and is more like John Key, is Mark Mitchell and he knows this which is why he pulled out of the race. He is playing a "long game".
Currently,under 2 percent of Auckland housing stock is for sale.Conversely over 98 percent is not. With historically low interest rates,low and falling home ownership rates, positive migration and banks seemingly preparing to compete for market share,these simply are not drivers for a collapse in house prices.True sales have collapsed,Barfoots will confirm that on Monday, auction clearance rates have slumped,but the reality is that the current sales levels are still reasonable.What has changed ,is the advertising,real estate agencies and indeed their agents want sales,quick sales like the good ol times,auctions still provide that pathway.Any smart vendor currently has the agent captured when it comes to fees and should negotiate accordingly.
You are trying to tell me that 20% of the housing stock is sold each year - some how I don't think so. Try more like 5%.
EDIT : two links for the US and Aussie markets which would be similar to New Zealand.
https://www.rba.gov.au/publications/bulletin/2010/jun/1.html
https://www.nar.realtor/research-and-statistics/quick-real-estate-stati…
Why would you expect it to be materially different?
~31k transactions in Auckland region in 2016.
Infoshare doesn't break down dwellings by region. But, you can estimate dwellings roughly by stats nz figures of a mean occupant level of 3.0 and a population of 1.5mil.
So, again, we get the ~6.2% turnover figure.
Auckland's housing turnover is currently just below 4 percent, that is 25 years to clear all stock,everything else being equal .At points during 2003 and again 2015 turnover approached 10 percent. In Ireland at present, although prices have risen sharply,turnover is just over 2 percent. It's odd but in the Netherlands,US,Ireland And even Spain,home ownership rates had increased significantly as prices rose,in Auckland and New Zealand, home ownership rates have plunged.
Agreed Cowpat – although you didn’t mention the possible effect of change in supply, as in a substantial rise in newly built.
Though perhaps its omission is quite correct and it should be taken out of the equation – as Auckland’s likely-hood of supply match probably runs neck and neck with an under harbour crossing ever being completed.
Jacinda and Clarke are well-informed people.
That they're getting themselves well-established on the property ladder speaks volumes about the confidence they have in the Auckland housing market and the NZ economy.
Clearly, Jacinda and Clarke are not interested in the advice of the gloom and doom merchants here - who have been advising against buying property.
Face it all you losers: Jacinda and Clarke are NOT selling up and renting.
TTP
So TTP - given that John Key is financially more literate than Adern, and he was the former PM, and he's cashed up his mansion and reduced risk in the market by down-sizing, what sort of confidence does that give towards the Auckland housing market?
Or is the left-leaning, non financial background, Labour party leader and PM, more likely to have a better understanding of where the Auckland (and global) market is at?
In terms of assessing that situation, I wouldn't trust what John Key said in office about the market (it was his job to lie in order to maintain confidence), but I would watch what actions he is taking. His actions are to sell and take the cash. And given John Key's experience in making money, I've give him an 80% weighting in any decision I'd make assessing the market, if comparing his position and Aderns and trying to make a weighted based decision (based upon individuals knowledge and success in such markets) between two opposing positions (bull vs bear). From Aderns front she has no successful background in picking markets, John Key does. She appears to be an honest person but her decision to buy in the market is most likely to have a home to raise a child and nothing to do with making money. Therefore I'd be bearish on the property market based upon the actions of the past PM and current PM.
In terms of assessing that situation, I wouldn't trust what John Key said in office about the market (it was his job to lie in order to maintain confidence), but I would watch what actions he is taking.
JK has recently accepted a position on the board of ANZ. That suggests to me that he is more than confident about the status quo. JK is a disciple of the Anglo hegemony on monetarism. He built his career on it and made his fortune from it, so his recent professional moves seems to suggest that he has the utmost faith in bow Australia and NZ are positioned in 2018.
Alan Greenspan was touted as a a genius before everything blew up in his face. Even Greenspan himself was astounded that he was wrong and has never fully recovered from it. He never simply adhered to the status quo; he designed it.
It's quite possible that John Key has too much misguided faith.
Bertie Ahern:
In May 2010, Ahern said of the property-based tax incentives which aggravated the Irish economic collapse that "We probably should have closed those down a good bit earlier but there were always fierce pressures, there was endless pressures to keep them. There was endless pressures to extend them." He stated that the pressure to retain such incentives had come from developers, owners of sites, areas that did not have the developments, community councils, politicians and civic society.
Dishonest leaders lie when it's in their best interest in order to maintain power - even if it's not in the long term interests of the country they are serving.
I'd happily put John Key in that category. He enjoys money and power. So if I want to make money I'd watch what he's doing, not what he's saying - the two are likely opposing one another.
And a job at ANZ - well it's what he knows and understands and we all know that the banks are all care and no responsibility when push comes to shove in a downturn........just do a smiley wavey and walk away (and I'm sure he's getting paid quite nicely for his services).
Dishonest leaders lie when it's in their best interest in order to maintain power - even if it's not in the long term interests of the country they are serving.
I'm not convinced that JK is a lying megalomaniac. I think he actually believes that how he perceives the world is right and it is ultimately good for society as a whole. Read what I wrote above. I would say the same about Greenspan. He truly believed that what he was doing was right.
TTP, HUH? but you rent. That must make you a loser too because you first introduced yourself as someone aspiring to get onto the property ladder.
How do you qualify that renting is for losers. Winning Tenants are now sitting back with popcorn watching Landlords shoulder considerable equity erosion and other property related expenses. It's a fantastic time to be a frugal saver and watch deleveraging run its course - good times indeed!
TTP doesn’t “rent”. I really do think TTP is a sweet old man in a retirement home somewhere. While he no doubt genuinely thinks he in in Palmie, he could in fact be anywhere. And good on him for that. He posts from time to time, as he slips in and out of coherence due to his meds. He only posts when he reaches the apex of his meds induced discombobulation. He is also restricted by his 56k dial up modem. That’s all the staff will let him use. Bless.
TTP - my understanding is that he sold his mansion for $20million but retained a 650sq m slice (worth approx $5m)?
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=119…
Do you know for certain that he has purchased other properties in Auckland?
It would appear that he's shorting the Auckland property market - unless you know for certain that he's been buying up other properties recently that you'd lke to list for us? Which if that's the case - then I'd happily review my position.
Again, they are buying and selling in the same market. She also got an enormous payrise recently. Existing homeowners buy and sell amongst themselves and feel richer for it lol. Not much new blood coming into this market, especially since the banks are becoming more concerned with the possibility of rising interest rates in the US, which of course reduces the ability to lend higher amounts because asset prices traditionally start to fall when interest rates rise.
Jacinda and Clarke's activities in Sandringham seem destined to spark an upswing in the Auckland housing market.
It's hard to imagine a more public vote of confidence in the Auckland housing market.
Expect Auckland house prices to firm in the immediate future.
TTP
Another factless comment from TTP. "Listings in the inner city suburbs are scarce"
Mount Eden = 91
Mount Albert = 84
Herne Bay = 21
Green Lane = 20
Epsom = 147
Eden Terrace = 37
Auckland Central = 790
Newmarket = 60
Grey Lynn = 55
Grafton = 29
Remuera = 148
Parnell = 62
TTP, now do you get the picture? Before you complain, yes - all property types are included in these figures.
I do understand there is very limited accommodation available at Mount Eden prison. Is that what you were alluding to?
You get that TTP is a troll, right? If the editors had any concerns about the quality of the debate on this forum TTP would be gone by lunchtime. But it seems the eds are fine with obvious trolls on this site. So enjoy some banter and his deliberately ridiculous comments, but I wouldn’t spend any time in rebuttal. That’s 15 minutes of your life you won’t get back.
Sometimes i'm not sure if he's a troll. Trolls are usually funnier. I have never known any troll who sits on their keyboard desperate to jump on any property market related article as quickly as they can and just repeat the same thing OVER AND OVER AND OVER with the relentlessness of a humourless, automaton.
Hi R-P,
Again, you seek to mislead and deceive.
I said "house" listings, which excludes apartments and other types of dwelling!
As I said, there's a scarcity of house listings in the popular inner-city suburbs. It's dashed hard to find good ones.
Have a look, for instance, at Freemans Bay, which I looked at just before. Tell us how many houses are currently listed in sought-after Freemans Bay. Come on R-P, go find out and tell us. That's my challenge to you.
TTP
Concerning my post above, R-P seems to have gone into hiding!
There are just 7 (seven) houses listed in Freemans Bay. (Source: realestate.co.nz as at 5.00pm today.)
Moral Of The Story: be very cautious of any post of Retired-Poppy (and Bobster and Independent_Observer).
TTP
What are you on about?
Freeman’s Bay is a tiny mixed residential and commercial area. The number of “houses” for sale is small as many of the residences there are apartments or townhouses. Many of them are on v small or shared sections. Freeman’s bay is not a typical residential area in Auckland, have you ever been there? I know, it is an awfully long way on the bus from New Plymouth, and I am not sure you could get there on your Gold Card. If you want to have a central Auckland house is it not “freemans bay or the boondocks”. If you looked within a 3 km or so radius from there you will cover Grey Lynn, Westmere, Ponsonby, Parnell. Push it out to 4 km or so you can cover point chev. with the exception of point chev these are all about 30mins walk from Freeman’s bay. In your mobility scooter, about 20 mins. And in all those areas, there are many “houses” for sale. And many (not all of them) are not selling at the vendors’ current prices. Sales are down, and inventory is rising. Some houses are have been on the market for a while and have been expresssly discounted with a fixed price (although this is more of an eastern suburbs thing).
So your example is complete nonsense. The “inner city suburbs” you seem to have in mind are not the principal residential areas nor areas which have the types of dwellings which the majority of people seem to want. If you broadened the search to “central suburbs” there are far far more houses for sale than what you would imply.
Note to TTP’s nurse: please halve his meds, as his obvious discombobulation is a cause of embarrassment. And switch off his 56k modem, he’s had enough for the day.
Hi Bobster,
Time you climbed out of your hole and visited the world.
There are heaps of houses in Freemans Bay - and always have been - including hundreds of old villas and numerous newer house and re-builds.
The reality is that seven (7) houses is a tiny percentage of the Freemans Bay housing stock.......
REASON: Freemans Bay has huge potential so house owners resist selling. Land value is the key. It's a similar story across all the inner city suburbs. Plenty of people would love to live there.
By the way, I've never been to New Plymouth so you're wrong on that count too. And neither do I have a Gold Card........ Not much hope for you, Bobster.
TTP
Ok, maybe you are in a rest home in Palmy North, i forget where. That made sense, because you didnt really seem to understand much about Auckland. But honestly, I have lived in isthmus Auckland all my life save for some time working overseas, and my description of Freeman’s bay is spot on. It is not a typical residential suburb, it is a small suburb which is getting more and more commercial. It does not reflect the volume or mix of housing generally in the central suburbs.
TTP, I was having dinner - lol!
in recent months you have said I mislead, deceive, I am dangerous, have a secret agenda of driving down house prices and even yearn for a price crash :)
So now that I have your attention, for dignity's sake, perform some basic research before you post comments.
Freemans Bay is not the only inner city suburb in Auckland - lol! Being that your domiciled in Palmerston North, does not excuse such ignorance. Is Google still your friend?
Best (you) leave the commenting about Auckland real estate to those who know best - Aucklanders :)
The moon is made from chalk and cheese so what?! He is entitled to his own opinion, so if he is a troll you're a BIGGER troll!
Freedom of speech gives him the right to troll, but trolling itself usually does not give any insight, except for perhaps the insecurities of the troll.
interest.co.nz throws up some interesting insights and thinking. Juvenile comments about property auctions are probably the least constructive content on this site.
lol, you guys are so funny, made my afternoon and warmed my beer ...I love it
Did I mention that 2107 CV has underpinned the current Auckland property house prices before ..? ... Oh i did..... didn't I? - Well thank you PM for proving that point to all the Crash Helosinatiors and doomesters .... and welcome to the Landlords club.
RP you better send a nice congratulation email - don't mention that you troll on this site everyday eh...?
TTP, you have made a very valid point, PM's new purchase is indeed a vote of confidence in the Auckland property market ( she must be saving hard to get the deposit for it though) ...
Wonder if negative gearing will be on their books this term then? :) .... maybe AL will be told to push it to next term ...lol
“On October 29, 1929 William C. Durant joined with members of the Rockefeller family and other financial giants to buy large quantities of stocks to demonstrate to the public their confidence in the market, but their efforts failed to stop the large decline in prices.”
Ok – bit of a leap I know.
That is how the biggest wealth transfer in history happened. Pump it and dump it. All the investors saw was that they needed to get in on the action and every man and his dog bought into it. They even borrowed to buy the shares. Sound familiar? Same game, different story line. Watch this:
https://youtu.be/PHe0bXAIuk0
Hi Eco Bird,
I've just taken your lead and skimmed through the entire thread.
The inescapable conclusion is that interest in the NZ housing market continues to run at a feverish level.
While sales volumes are currently lower then in the heady days of 2014-16, there remains an enthusiastic mass of people looking for a chance to get on the property ladder - or take the next step up.
Good luck to all.
TTP
Hi TTP ...
indeed my friend,
the fact that a rough average of about 40% auction clearance rate ( by several agencies) in the last 4-6 weeks indicates that the market is alive and kicking, buyers are out there and it is almost business as usual, and that sellers are well aware of the value of their homes hence not rushing to sell when they don't have to .... All those sitting on their hands waiting for prices to fall will be wondering when is that going to happen and counting how many good properties they let pass by. ... I expect higher sales volumes after Easter holidays as buyers would want to catch up on anything that is left on the market before listings disappear in winter and possible higher IRs kick in next year.
40% also means that there are capable buyer at the current prices and they are buying around the 2017 CVs -- every house has certain features and faults of course ...
People would / could be worried if sale volumes fell to say under 20% in auctions or If average prices were falling by more than 10 % ( in summer) .... but we are not there even after 5 months of Gov change ... au contraire, we see everyday that :
- consumer survey and REINZ predicts price appreciation by 2 -3 % pa in the next couple of years
- continuous shortfall in Supply and building consents while Demand is not letting off ... lol, no one talks about immigration any more !!
- there is no hope that Kiwibuilt will make any head-turning headlines in the near future ... Now Estimated only 8000 in the first 3 years ( what a joke) .... the only "Historic" achievement to date was building 155 NZH houses across NZ by June this year to house thousands on the waiting list.... Not sure if the Northcote project of building 300 HNZ homes announced by National last year is still on the cards or if that was stopped and will be claimed latter by Labour . ...
So by the time the doomsters pull their heads out of the sand it will already be 2020 and they might get depressed about how little has been accomplished after all this cheering, committees, and working groups' dust settles down.
Hopefully, the PM would have moved to here third home closer to DGZ in Remuera by then ... to secure her family's future.
It surprises me that people continue to attempt to shut down debate by hurling trolling accusations at people making perfectly reasonable comments. I wouldn't dream of doing such a thing.
The fact that the PM has recently bought a million dollar property in Point Chevalier and now a two million dollar property in Sandringham/Mt Eden is absolutely cause for cheer for those who own property in Auckland. It shows that the leader does have confidence in Auckland real estate and is realistic about the current value of homes here. She is one of "us" and owns a substantial stake in our neighbourhood. The same was true for Helen Clark.
I would even go as far as saying that she is aware of the importance of Auckland as a node in the global economy. Labour are less likely to do anything revolutionary and isolationist, at least in Auckland.
Zachary, TTP, DGZ, Eco Bird and other property spruikers. Clearly you are reading way too much into the PM and her partners recent purchase. You are completely deluded if you believe this heralds the coming of another wave of price gains. If only your huge mortgages would be inflated away that easily - you wish!
Did you stop and consider non materialistic people buy houses to live in as a home, raise families. Value gains/losses are of secondary consideration. Having lived in the one house for 21 years, its spot value doesn't concern me as our house is a memory filled home. Its living at its finest.
She's starting a family and her salary just tripled. So they might want a bigger and better home. So they bought one. That seems natural, I didn't read anything meaningful into that. It's not obvious to me she has therefore signed up to some Jonestown like cult of property. That some people here seem to therefore conclude this means she is therefore "one of us" and this is the ultimate mark of confidence in the property market that will push it to new heights seems pretty desperate and frankly a bit weird. That some people think this will have any impact on government policy is just totally desperate and weird. Wow.
She's young, unlike many of the spruikers here she actually has some valuable and marketable skills, she's assured of a good salary from here on, she wanted a family home and I really don't think she would be bothered if in the short or medium term the value of her new home went up or down.
Eh?! Err, no, she could justify and afford buying a bigger and better home so she did. She's having a family and she's got a much bigger salary. I don't think it's about her making a statement. Is that the way you think? That's weird....and sad If I was to have a guess, I could pretty comfortably state it's unlikely she is like you. With all due respect.
RP - not sure why you think that myself and others ( who share similar views) are materialistic or property spruikers ...?
What makes you think that we don't live in our memory filled homes for as many years like you did, or do now ?... I haven't changed mine for the last 18 years ..... Spot values does not concern us either , yet you think we should be shivering like a leaf everytime we hear a bad news ...well we don't ... So Why do you keep using this venum-oozing language and toxic spirit ?
I am certain that most people you mentioned have started like everyone else ( very few were born with a golden spoon in their mouth), they saw what the future might look like, asked around, listened to the wise, and observed how it is done, took proper advice and RISK ... after many years of hard work in the rat race , the results were well worth the sweat and sacrifice ...
So it's a race, some chose to relax and take it easy because the sun will always shine tomorrow , and some don't like to run at all -- others chose to run faster and harder .... Is that Wrong? ...Unfair?, or What?
But some would argue that these front runner have taken all the trophies and there is little left for us, well ...don't blame us ... blame the race organisers over the years both Labour and National ... if there were enough houses built over the last 20-30 years , we wouldn't be having this discussion today.
That said RP, why curse the ones who worked hard and call them every name under the sun indiscriminately? .. You don't know these people and yet you make every effort to demonise them ... I think that is more than unfair ... Don't you?
What is it exactly that you want? ..House prices to go down ? .. Affordable houses for all? Well, great .. A minority of NZers, including yourself, have proportionally elected 3 parties which share some common goals and housing was the flagship for change .... these parties have since ( six months ago) got into a coalition to run the country ( after being in hibernation for 9 years)....Game On !! .......
Please focus your efforts ( and channel your anger) on getting these Winners ( some are being paid over $200K a year) to do exactly what they promised to do ... lower house prices for everyone to afford, build 100,000 or 500,000 kiwibuilt and make everyone happy, kill homelessness and child poverty ...etc
Don't listen to us and don't expect us to do it for you - Go and Chase the heros who won the elections and are at the helm today, ... They have all the power and the money they need..... send them emails, knock on their doors ... if they can't do it, then don't blame us .... Afterall, we are just the hopeless unsympathetic property spruikers (as you say !!)
There is no honor in shooting the messenger, ... I hope you already knew that !
Auckland as a city is screwed. If I someone had the choice of earning 120K in Auckland or 60K elsewhere then they’d probably be better off elsewhere. Tauranga or Wellington, or Christchurch or anywhere but Auckland. The nice areas in Auckland which were typically owner occupied by doctors lawyers scientists and engineers have been swamped by Chinese investors. Look at the prices on Homes.co.nz. 2.1 million 3.5 million 2.5 million. These aren’t mansions.
And if it’s not Auckland that's screwed it’s an entire generation of would-be upper middle class educated kiwis that are screwed. If they choose to stay in Auckland renting into their 40’s and 50’s then they’ve already been subjected to a colossal wealth transfer. They’ll die poor renters and pass nothing on to their kids.
Those are the choices IMHO, a mass exodus of talent from Auckland, destruction of the upper middle class, or a rapid decline in house values to domestically sustainable levels.
I think we have to accept that Auckland is changing rapidly along with the other Global Cities. For more clarity we should perhaps refer to them as New Global Cities to differentiate them from the old classic Global Cities like London, New York and Paris. The New Global Cities are attracting quite a different type of immigrant than the Old Global Cities. These cities are viewed as the boom towns of the modern era where money can be made and a life can be made. Where a New World Western lifestyle can be attained.
It does mean massive change for the locals. Changes were happening anyway with the general abandonment of the old way of doing things. People are no longer getting married and having kids like they were. There are more people living alone or following alternative lifestyles. This will come at a cost. These people are not suited to the old Kiwi quarter acre section lifestyle. I expect to see more apartments being built to accommodate such folk. Working couples can still afford to buy houses in Auckland if they leave having kids to later and start their struggle to own a home sooner. There will be some effort made to house young families in State provided or subsidized housing but it wont have much influence on the price of normal houses - much like the Singapore situation.
So I don't think Auckland is screwed. People who want the benefits of the old days while pursing the lifestyles of the new days are just being unrealistic. Anyway as you alluded to in your comment fat pat there are alternatives in other parts of the country. We actually want people to leave and invigorate the provinces. Everything is going according to plan. It is very simple, adapt to Elysium or leave - both good choices.
I was out and about today and it seemed like the rest of Auckland was doing the same. Big groups having picnics in Okahu Bay, big groups in Mission Bay along with a beach volleyball tournament, waka rama competition In Kohimarama and kite surfers doing their thing, the restaurants were packed in St Heliers. A nice lunch in a French restaurant and a walk back to Kohi via the water front. Tomorrow it’s the Fun Run madness. If you believed these pages the sheeple should be Morose and ready to overthrow their boomer oppressors. The reality is that the place is buzzing with happy people from what I saw and I imagine few of them were Bays locals. I don’t think it’s so much Auckland house prices that are the problem, but more so the concentration of these types of jobs and these activities in Auckland that mean moving to places like Fielding is unattractive by comparison. If you don’t like Auckland, move out. It’s a free country.
My experience of Auckland back in the late ‘80s was that it was similar to LA in that I never seemed to meet people born there. It was a magnet for those on the search for something different to the rest of the country. I couldn’t afford to buy a house so Left. I returned when I could afford to live there, albeit close to 15 years had passed. Those of us old enough will remember the call for big city salary increments in the 1980s. It was shot down by the Unions who said all must get it. I feel empathy for a native Aucklander caught up in price rises, but for the rest this is Best solved by moving elsewhere. By doing so you may well create the change you want I.e. lower prices through less demand or higher wages to convince you to stay.
I remember my school days in Auckland in the late 80's. I often caught the bus to the city with school mates and loved hanging around Queen St but all the shops were shut by 5pm. Also have good memories of shopping at the big Oriental Markets by Quay St in downtown Auckland, pitty it's now long gone...
I hear far too often from people "escaping Auckland" or "getting out".
I simply don't accept that some of the changes you allude to regarding Auckland are pre-ordained or simply the natural order of things.
Too many of Auckland's problematic issues are the direct or indirect result of local and central government actions or inaction – not some uncontrollable mystical force of nature.
In my mind Auckland was a small city 50 or so years ago – it has now grown to be a slightly bigger, small city – and certainly not some global juggernaut as some may wish to think. Thus I don’t think we have to simply accept some of the issues or negatives that come with being a New York or London etc.
Your last paragraph “adapt to Elysium or leave” – really, I am berated for calling it nonsense?
Anyway Zachary, I apologise if my comment has disappointed you – it was late and so I fired off a quick response – hopefully the above fills in some of the gaps.
Champagne corks are popping left right and centre!! OMG
NZ top 2018 sale: Buyers from China snare Herberts' $25.5m Remuera mansion! http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=120…
They have done it - best news for Remmer residents in 2018 WOOHOO!
Expect Remuera house prices to go bananas this year - can't wait for the stats ^^
PocketAces, this property represents a piece of NZ architecture and heritage treasure! I don't know why you have to kill joy every time we have something nice to share.
The residence was designed by renowned architect Roy Binny from the arts and crafts architectural movement.
FYI Roy Keith Binney was a New Zealand architect and soldier. He was born in Auckland, Auckland, New Zealand on 13 April 1885.
Source https://teara.govt.nz/en/biographies/4b32/binney-roy-keith
I said nothing about whether I thought it was marvelous or hideous, all I suggested was that it is not representative of housing generally in this country. It offers nothing in the way of an indicator about the market in general.
FYI it is definitely not my style, not by a loooong shot, I'm a cabin in the bush by a stream kind of person
Auckland's $2M+ suburbs: Herne Bay, St Marys Bay, Remuera and Stanley Point. The SuperCity first saw four $2m+ suburbs in March last year, doubling the size of the exclusive club from two within just three months as prices continued to soar.
http://www.nzherald.co.nz/property/news/article.cfm?c_id=8&objectid=120…
"People are finally accepting New Zealand as a luxury destination, never before have there been so many $10m homes...with people looking for property [in this range]."
While the QV estimated median of Auckland's most valuable suburbs were only around the $2m+ mark, Boulgaris said many properties had capital valuations of $20m+ in the more exclusive corners of the city.
HO did you actually read the article?
Ollie Wall said of the man from the family who bought the Herbert's house: "He's in the online tech industry in China and they're a family with children of primary school age. They're going to live in New Zealand, send their kids to local schools. They're not just land banking. They are looking for a beautiful family home."
Yep its all roses.
Yep
https://www.stuff.co.nz/national/crime/99827184/summer-sees-homeless-he…
Just saw an article about homeless people in Taranaki. Had a nice little camp of improvised shelters set up, but the council tore it down. Didn't actually do anything useful to provide legal alternatives though, so the displaced will just have to salvage some more cardboard and plastic sheeting and re-build somewhere else, or die in a ditch somewhere.
In Tokyo, new detached "starter homes" are about USD300K (approx NZD414K). Based on Japanese lending benchmarks, that translates into a P+I monthly payment of USD850 (approx NZD1170).
https://www.curbed.com/2017/2/3/14496248/tokyo-real-estate-affordable-h…
Big difference between Tokyo and Auckland is that Japanese buy housing as a consumption good. There is no expectation that a home is a financial asset.
No country that has gone through a property bubble and thought that it represents "wealth building" has ever really succeeded. In simple terms, most bubbles pop. The bigger the bubble, the bigger the pop (if history is any indicator).
Economically successful economies such as Japan or Germany see property as a "place to live", not a financial asset. Houses exist to house people, so they can contribute to society and the economy.
We could learn a lot from Japan, including the attitude of housing as something non-permanent that you live in, and can replace quickly when necessary. We seismically-active archipelagoes are deluding ourselves if we think housing has a long lifespan, but only they seem to have realistically come to terms with it, even though that was partially forced on them by an absurd bubble. New Zealand would be in much better shape if we accepted that housing has a lifespan in the decades and priced it accordingly. If we're going to bring anyone in to build for us, could we please make it a Japanese company? They've already got the designs and skills in building for earthquake country.
Sure. However it's important to remember that Japan can be innovative and productive with housing because of their industrial capacity and prowess. Also, important to note that the there is not much difference between the cost of renting and buying (P+I) in Japan. The trade off between renting and buying is far less risky in Japan as opposed to bubble economies, which are primarily in the Anglosphere.
Some of us still realise that buying a house is a "consumption product". It consumes your future earning potential but eventually it protects you from market rents. It is a neccessary evil that needs to be paid off as quickly as possible. Maintenance and ongoing rates will ensure that you are still a slave to it as long as you own it. Therefore the home that you live in, is not an investment because it costs you money and does not earn you money.
I apologise for my sarcasm, you took the high road fair enough. Agreed, but I would say that there are, as I’m sure you are aware, difficulties in abstracting certain constituent parts from any actual or theoretical model and replicating them in other environments without causing other less desired effects.
Haha. Hey, we're talking a few prefab house plans, not adopting a whole culture. I would take wabisabi and carbon steel santoku knives, and skip anime and weird schoolgirl fetishes. Your mileage may vary. Unless somebody sneaks a mandatory suicide level quota into the contract. Note to NZ: Make sure we get a translator we can trust.
In terms of geology, climate and terrain we've got a lot in common, so if somebody with the population to have already done the heavy lifting on design and technology would be willing to share some of it with us, let's pursue that.
I haven't bothered to read the comments yet, but Ray Dalio is probably one of the most respected economists when describing how the "Economic Machine" works in cycles. I know at which part of the cycle we are in right now, can you figure it out? Definately worth a look at.
https://youtu.be/PHe0bXAIuk0
Hi Tainuibabe, i've watched that video a few times over the last few years but have a few questions.... How is NZ in the deleveraging cycle when debt is still growing? When did debt in NZ start decreasing and incomes start increasing for instance? Also, NZ is not printing money, which Ray would suggest is vital to a beautiful deleveraging. The cycles that Ray describes, whilst very true for many world economies are not necessarily easy to translate to NZ. NZ's productivity has been poor for decades, and all efforts to affect positive change there has yet to bear fruit. Income growth is still pretty flaccid, whilst debt growth is still pretty eye watering.
I can without doubt see that America, UK, Europe have been deleveraging, and maybe even managing to get the balance right on a few occasions over the last 10 years. The GFC would undoubtedly fit the profile for that long term debt cycle for much of the world, but NZ? Maybe i'm missing something but during the GFC I didn't think asset prices even went down, didn't they mostly just flatten for yonks before bloating rapidly again?
Please tell me how i'm wrong, because i'm still pretty new to NZ and its economy but has the deleveraging even started yet? (clearly it is likely to happen, but i just don't see that it has started yet).
The key point that you may be missing, which links NZ to this story, is that our Australian owned banks need to borrow money from the US because both Australian and NZ residents have poor savings history and are already up to their eyeballs in debt. We are becoming maxed out in Credit. The US Fed has started raising interest rates, which also means that the interest rate has increased when lending to our OZ and NZ banks and this is passed onto the consumer/debtor, which means higher mortgage payments. Our OZ banks have also had their credit ratings downgraded a few months ago, which amplifies the risk ration of their ability to repay the US banks, therefore they have been subjected to less credit, of which the on-flow effect means less credit for borrowers to purchase assets for people like you and I. This then affects asset prices as the banks can't lend out as much as the vendor is asking for etc.... It's cause and effect.
And more importantly, don't forget that we are part of the global economy, so what happens in the US affects us because the world still revolves around the Greenback, although that is changing rapidly and China has now managed to get it's own SDR currency which is challenging the Greenback as the worlds dominating currency.
Our National Government borrowed up to their eyeballs when the GFC hit, to stop a recession. They thought that it wouldn't last this long, so it gave people a false sense of security and when our RBNZ raised rates too quickly, they were forced to lower them very quickly and quite dramatically, which of course increased credit growth and raised asset prices like property into the stratosphere. NZ still needs to pay off this debt and it will come via future earning potential and rising taxes.
thank you for all this ... I might add that we also had 2 earthquakes which added to the burden of more borrowing in addition to the GFC saga....
So National Gov's policy to reduce the national debt faster in the next few years was a wise one with a balanced leverage between building infrastructure, tax cuts and paying debt ? ... Or would you disagree on that ?
So National Gov's policy to reduce the national debt faster in the next few years was a wise one with a balanced leverage between building infrastructure, tax cuts and paying debt ? ... Or would you disagree on that ?
Reducing public debt takes money from the private sector. Is it wise to take money from the private sector when income growth is flat and households are among the most indebted on the planet? In NZ and Australia, the sheeple are carrying the can.
Don’t forget the 1.5 billion per year that’s being withdrawn from the economy by tobacco excise, that’s coming straight out of lower socioeconomic spending. The cynical part of me thinks it’s a deliberate move surpress inflation, at the expense of rising poverty and inequality.
Also as new mortgage lending slows we may be heading into a deleveraging phase with billions of interest payments still being sucked out of the economy.
The only reason National could pursue their surplus was to embrace the greatest episode of capital flight in human history coming from China. The next 20 years will be dominated by the horrific consequences of Nationals policy which I outlined in my post above.
TainuiBabe i'm aware of all that and wouldn't disagree with you on any point that you have made. I just don't see that NZ has actually started deleveraging yet. At least, not to the extent that debt growth is slowing.
I suspect that it will happen soon, as you say, in relation to global debt costs.
Deleveraging is not part of the master pan. There is not even any talk of what level of private debt is possible without causing instability to the general economy (well not in NZ anyway). Debt deflation doesn't warrant talking about when your key ingredient in the magic pudding is debt growth.
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