The expected slowdown in property values may already be happening, according to one of Australasia's largest property data and valuation firms.
CoreLogic NZ says Quotable Value's House Price Index for February shows the late resurgence in housing values that occurred in Auckland after the election subsided in February, with a slight fall in average values.
At the same time average values in Wellington tracked sideways after showing sustained growth last year, while Tauranga was the only main centre to show continuing and sustained growth in property values.
CoreLogic's NZ's head of research Nick Goodall says the slowdown in property values expected this year may already be underway, but it doesn't appear that the drop will be very big.
"New Zealand's construction industry faces a major challenge in creating enough affordable stock at the speed required to keep up with our continually strong population growth," Goodall said.
"Net migration hasn't slowed much recently, with figures remaining near all-time highs.
"And of course the kicker is our still low interest rates.
"While banks have tightened their lending standards, low interest rates means borrowing higher sums to secure a desirable property is possible.
"All these things will continue to keep a stable foundation for property values," he said.
However he also warned that the market could be tilting in buyers' favour.
"As with anything, the devil is in the detail and in a changing market with weakening sales volumes, the power can start to shift to buyers as they become less anxious about getting onto the ladder and realise that waiting for the right property can pay off as savings climb faster than house values," he said.
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39 Comments
What a load of BS and reading the book from all sides ... lol
on one hand it is sliding on the other there is shortage and high demand ..
My personal experience with Corelogic lately was disastrous to say the least as their algorithms proved to be crap and off the mark by at least 10% .... they save themselves by noting that to get real value employ a registered valuer ....
http://www.nzherald.co.nz/property/news/article.cfm?c_id=8&objectid=120…
I only shoot people who fail to deliver on what they are claiming ... and my experience with them is very real...
here is another messenger for you to shoot down ..lol
http://www.nzherald.co.nz/property/news/article.cfm?c_id=8&objectid=120…
Can someone please explains QVs business model. Not that I am particularly complaining about this article but I have read some things from QV which did seem a bit “cheerleaderish” for the RE market. I suppose they are directly exposed to the health or otherwise of the market as they wouldn’t sell as much data in a downturn (probably) but am I missing something? I see they are owned by CoreLogic.
CoreLogic's predictions from April
"Our expectation remains that the latest lending restrictions will slow values for a few more months before things pick up again, probably after the election in September."
The reality is that CoreLogic spend too much time talking to real estate agents, and even use the same language. I believe an other investment adviser would be sued for the type of comments they have made. People are making decisions on their commentary - and their analysis is thin.
People are making decisions on their commentary - and their analysis is thin.
I very much doubt that. Most people wouldn't even bother to understand CoreLogic's methodology, let along use its data to make purchase decisions Furthermore, CoreLogic gives a muted forecast of the near future -- muted enough for it to be almost irrelevant. Most people are reliant are these prophetic visions. You can expect most people will be buying and selling property at present based on a hodgepodge of emotions, hopes, and dreams. When property transactions become a key media focus, a political concern, and a BBQ hot topic, it's probably time to tread with caution.
Do they really need to understand the methodology of the SPAR index (as simple as it is)?
I would argue that a huge amount of people base their purchasing decisions on the trend(s) exhibited by that index.
The RBNZ uses it in their models, as do the private banks. Even if the buyer isn't aware of it (and, I don't disagree about the hodgepodge), the trend of that index is being factored somewhere within the purchasing process.
Do they really need to understand the methodology of the SPAR index (as simple as it is)?
I guess that depends if it's a hedonic index or not (as in Australia). I don't know what the methodology is. DO you honestly think people refer to CoreLogic when they buy property? From the exec summaries? Just because it is the most complete data set there is and is used by RBNZ and banks, I cannot really see how it would be used by the average person in their decision process.
See my comment above, does Q.V. have a dog in this fight? I find the utterances of the RE industry on anything other than sales data to be useful only as a substitute for toilet tissue, but is Q.V. in the same boat?
They're fundamentally a data and analytics company. Property sales data can be used to forecast the future, depending on which model is applied. It would make sense for companies like CorelLogic to at least be interested in it.
As for the REI, even though their main business is hitting sales targets ("Anyone wanna see second prize? Second prize is a set of steak knives"), they probably intuitively understand the behavior and general mood of the sheeple more than most. I would never discredit what they say.
Got to admit its getting increasing hard to call a spoon a tool with a sharp-edged, typically rectangular, metal blade and a long handle, used for digging or cutting earth, sand, turf commonly referred to by a great many other people in a spoon-market downturn as a spade
Everyone can see its a slowdown, if core logic are saying there is a downturn, this is quite significant as usually everyone involved in the RE industry doesn't want to be blamed for talking down the market.
The Auckland market has come off the boil and is flat as pancake, with large inventories not able to sell. Trade me at over 12300 now and over 13300 in realestate.co.nz og which over 6200 have prices displayed. 2 years ago displayed prices were as rare as hens teeth.
Its coming.....
Seriously though, everything that everyone says about the market has no statistical or historical significance. The thing that surprises me about the property market, is the lack of deep thinking of all the players involved. I've thought about it for four or five thousand hours last year, and there isn't a single person that has said anything even remotely accurate about how and why the property market does what it does. It really shocked me as to how little thought goes into it, even the RBNZ doesn't understand it.
Yep - I got it - the market goes up, it goes down, it stabilisers, goes up, has downturn, goes up, up, sideways, down, up again - see, understanding the property market is extremely difficult and requires great knowledge and secret research - Nationwide Roadshow Get Rich Property Seminars coming to a town near you soon, don't miss out, reserve your place now, just a meagre investment of $1,500 plus Gst per person to secure your families future security, your loved ones lives - an opportunity not to be missed......
Interesting comments on the role of Deposit Power in the Aus market. Or rather, their ex role. Their business model sounded quite funky, shame they went bust....oh dear
Misleading article title: this guy put his opinion on the article title rather than the fact and information in its article content. If you are a true journalist, please provide the fact, do not try to mislead audience. I see his few articles about interest rate prediction in last few years, he has been never correct. Do not waste your time to read his nonsense stuff.
As stated by any "real estate agent and vested interest party" near you - "Auckland residential property is a sure fire winner - values must still keep rising, with every man and his dog wanting to live in Auckland (why, I ask you ?) a shortage of good properties (ones that aren't crappily built and overpriced) and the real "kicker" - interest rates will and cannot ever rise (do you RE agents/vested interest parties think the Fed is thinking about the Auckland property market and saying to themselves "we can't raise interest rates, as this will force the prices of Auckland houses down" ???) .....when your livelihood depends on a "positive market" are you going to say anything else ..... hope you good folk out there can cover your mortgage repayments when interest rates do rise ? ....and please do not listen to any party who has a "vested interest" in any sort of market.....including Auckland real estate.
yesterday was this bit of news ( from stat NZ info) : "New Zealand's construction pipeline has been underpinned by a shortage of housing, primarily in Auckland, which is expected to peak in 2020 with some $20 billion of residential work predicted."
http://www.sharechat.co.nz/article/8ab52e64/nz-industrial-accommodation…
Today a new nail in the coffin:
http://www.sharechat.co.nz/article/2b7ad087/severe-worker-shortage-coul…
The writing's on the wall, a bit difficult to read for those who have their heads in the sand.
Four reasons NZ needs rich foreigners: Sir Eion Edgar.
Sir Eion Edgar told Parliament's Finance and Expenditure Select Committee that the foreign buyer ban would "be detrimental to New Zealand's international reputation and greatly restrict overseas parties contributing to the benefit of New Zealand".
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=120…
Nonsense article. NZ does not need charity. We have the power to make as much money as want.....and then some.....by law. Furthermore, a wealthy Japanese spending $100 mio on making a beautiful resort (that doesn't actually make money anyway) is irrelevant to the sheeple looking for hand outs.
Thats exactly it.
Lets create our own Unicorns, billion dollar businesses, build an ecosystem where all NZers help each other out. theicehouse is hopeless, they expect money, take percentage and are hands off. How does this help.
We need cheap development from the government for technological businesses if not free, and mentors that help, the government should facillitate this, instead of ploughing money into house supplements. Government can take an equity stake and provide the right support to make sure business succeeds.
Train young kiwis how to develop and build internet businesses or software that is scalable. Help businesses out that want to go global. Internet and technology is a great leveller since we live on arse end of the world.
One wonders the motivations of people who conflate the ownership of land with any and all foreign investment. China itself demonstrates that ownership of land is not a prerequisite for productive investment by foreign companies. So why attempt to confuse the two? Just silly.
Zachary, will this be over the CV of $1.77M?
https://www.trademe.co.nz/property/residential-property-for-sale/auctio…?
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