ASB Housing Confidence Survey finds expectations in the housing market have improved sharply after a post-election slump, and Auckland house price expectations have hit a 12-month high

Confidence in the housing market has bounced back strongly after a post-election slump, with house price expectations in Auckland now at their highest in 12 months, according to the latest ASB Housing Confidence Survey.

ASB chief economist Nick Tuffley and senior economist Mark Smith said house price expectations- measured by whether people thought prices would rise or not in the next year - rebounded nationwide and for all of the broad regional areas.

Nationwide the house price expectations rose sharply from what was a six-and-a-half year trough hit in the last survey undertaken in January.

The economists saw the rebound from the election slump as a "significant jump".   

"The net balance of respondents expecting house prices to increase rose to 32%, back to where it was in the July 2017 survey, and well above October 2017 (+17%) and January 2018 (+16%) lulls."

A net 19% of respondents to the latest survey thought Auckland prices would rise, which is a 12 month-high, while price expectations were the most upbeat in the Rest of the South Island (+45%) and the Rest of the North Island (+43%).

Tuffley and Smith said despite some falls for fixed mortgage rates, respondents continued to expect interest rates to increase in the next 12 months (net 32%), fractionally up on last quarter, but not to the same extent as 12 months ago.

Most respondents still see it as a bad time to buy a house, but views are the least pessimistic in two years.

Canterbury respondents view it as the best time to buy since early 2011. 

"Normal service looked to be returning following post September 2017 General Election weakness, according to our latest ASB Housing Confidence Survey," they said.

Tuffley added though that it was worth remembering that the 32% net balance is still well below the +42% this time last year. 

"Stretched housing affordability and respondents’ uncertainty over the impact of the Government’s new housing policies suggest that we’re actually past the peak for house price increases.” 

And Christchurch remains the only region where the majority of respondents (a net 6 %) consider it a good time to buy. 

"In fact, the net balance for the region is the highest since early 2011, suggesting market conditions for buyers are the most favourable since the devastating February 2011 earthquake," Tuffley said.

In most other regions pessimists outnumber optimists, with 14% of respondents nationwide saying it’s a good time to buy, while 20% of nationwide respondents say it’s a bad time.

However, there are signs this pessimism is abating, with the net balance considerably less negative than it was a year ago (-17%).

“It’s the least negative net balance in two years and we believe it signals that although respondents are generally cautious on the outlook, there is slowly growing confidence that a soft landing for the housing market could be achieved,” Tuffley said.

Tuffley and Smith said It is too soon to tell if firming house price expectations will translate into observed house price increases, particularly with still considerable uncertainties over the impact of proposed government policy changes.

"What has remained evident, however, is that regional house price expectations from our survey have tended to reflect recently observed house price developments.

"Less upbeat house price expectations for Auckland and Canterbury are consistent with broadly flat observed house prices. Conversely, stronger house price expectations for the rest of the country are consistent with sizeable house price increases observed outside of the major urban areas." 

Housing confidence

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Source: ASB
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Source: ASB

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176 Comments

How many respondents were there? 50, 100, 2000, 10,000? Makes a big difference.

Clearly your perception hasn't changed but you're just one person. The survey confirms what seems obvious in Auckland and other areas which have been struggling .... the market isn't raging but prices are supported, imo it's still a good time to buy

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I’m just sceptical of a survey released by a party with vested interests. A propaganda piece to push their narratives and condition people.

I’m just sceptical of a survey released by a party with vested interests. A propaganda piece to push their narratives and condition people.

It doesn't make sense to design research so that the methodology is weak and the data biased. That doesn't mean that the bank can't attach its own narrative for delivery to the people; however to suggest that the banks don't have competent researchers is a stretch.

Well put JC. Unfortunately nzdan is a perenial sceptic who takes it too far

Well said Houseworks!

The survey confirms that the expectations for house price rises is 10% lower than it was last april...

Judging by todays Auction results it would appear that they forgot to ask any buyers in this survey.

I wonder we're most of those responders RE's trying to build up confidence in the market?

Do they have to? Zachary posts analysis after analysis of actual sales and the peanut gallery goes quiet. Yesterday, I mentioned a St Heliers property selling at $2.4 million for a 843m2 section. It sold at 106% of CV and will almost certainly be subdivided so they buyer sees demand to build 2 new houses with the section costs of $1.2 million. Sure it’s not the FHB market, but why aren’t people posting their sales analysis of that end of the market?

Less not forget the foreign buyer activity prior to the ban

Has the Foreign Buyers ban been enforce yet? I don't think so, the legislation Is there but it still hasn't been brought in to force.

Also there's nothing much that has been done to stop money laundering either. Perhaps a volcanic event such as what is happening in Hawaii is the only thing to detur overseas speculative investors.

After all Auckland is sat on over 50 volcanoes. ;)

The agenda is for it to be submitted before parliament on 21st June and if voted on, to be implemented by 4th aug, but I suspect it to be later in aug

Why would a foreigner buy an expensive development site if they expected other foreigners would be unable to buy the eventual new homes? I just heard from my son that there is a new bus link along Tamaki drive. Every 15 minutes 7 days a week until midnight. That sounds ominous as there may be intensification plans coming as well.

Why did foreigners pour millions into the Auckland property market ?
Variety of reasons have been well stated
If you develope property of course you’re hoping to profit but there’s been many times the market has changed by the time the development is ready for sale. I really shouldn’t need to illuminate you on which properties
took an age to sell at the top end in the past.
Hawaiian themed mansion Paratai Drive Mark Hotchin estate Spencer on Byron Penthouse just a few at the “TopEnd”
Now I’m trying to find “affordable housing” in Martha’s Vineyard or Nantucket and looks like I’ll stay with my NS purchase

Because nothing is selling at that end of the market.

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Bulltrap.

Sales are super low and pricing pressure is generally down. If just the promise of change made the ponzi slow why would it speed up just before the promises become law?

#vested interest.

What, the banks profit from house prices rising, surely not?

Did the report examine whether house price expectations are a leading or lagging inicator I wonder? The suggestion is that it is a lagging indicator.

An early Spring?

The auction results page continues to show very stable sales results. I analyzed another 38 typical Auckland properties, excluding apartments, added since my last review.

Of the 38 sold 24 sold above 2017 RV.
44.146M in sales with 2017 RV of 43.280M and 2014 RV of 30.270M
2% above 2017 RV and 45.8% above 2014 RV

Some quite varying results with one property selling for 450k below RV and one selling for 380k over RV. It tends to average out.

Closer analysis of the one that sold well below RV, 45 Dexter Avenue in Mt Eden reveals it last sold for 925k in April 2006. Selling now for 2.1M reveals that it has gone up 127% which exceeds the average for Auckland during that time period. I think on average Auckland houses have gone up a little over 90% since 2007.

https://www.barfoot.co.nz/756266

#goodbuy is this house in New Lynn:

https://www.barfoot.co.nz/756714

RV of 860k and sold for 695k
Odd design, always hard to sell. What were the designers thinking?

The percentage selling above RV does tend to give one the impression that things are pretty healthy. Do-ups are still the best buys for FHBers as they always have been really.

I would hesitate to advise buyers to wait until a crash at this stage. I wouldn't want to take on that responsibility! If you need a house and you see one you can afford I say buy it. Especially if it is in a good location and a fairly regular sort of house easy to improve with cosmetic changes. Kitchens and bathrooms can be easily improved these days for minimal cost if you do it yourself. New carpet and paint can do wonders.

Really good analysis Zach. There are some areas that are still going up like Mt Eden, easy drive to city, very central and number of facilities close by. But areas like Blockhouse Bay, Mt Roskill, etc that have had big jumps last two years is starting to lose some of the gains over the last 2 years. The foriegn buyer effect is gone already, happened last year with China restrictions and govt change. Foreigners are buying some $5m plus properties for themselves but Mum and Dad foriegn investors are out, can't get money out of their country.

Yes the investors have lost a bit of equity in the suburbs while at the same time have reduced costs in mortgage interest rates.Rents are healthy too so they are probably not feeling any real pain. It's not so enticing as it was for new investors entering the game though.
I'd say you should have a good personal reason for buying that extra house in the burbs. Maybe a place for the kids, to retire to or provide a rental income in the future.

77 Owens Road, Epsom, Leafy Green.
RV $2,950,000
Sold $2,460,000
-17% on RV

It is a cross-lease property which means it wont fetch the premium price. I've noticed that the RV doesn't appear to distinguish between freehold and cross-lease. Cross-lease titles are knocking off 2-300k of value in the premium Central suburbs. But then they did cost less in the past too. You generally buy cross-lease if you cannot afford freehold.

Yes it's true. RV on cross leases are incorrect a lot of times as they allocate the whole land to one of the properties while the others sharing the land is lower.

That is not the case here as the other one on this title has an RV of $3,100,000

The other property is much larger and has more land share. I actually went to see 77 Owens as im always looking for opportunities and looked in pics. The property has an extremely steep long driveway and I didn't bother to go in. I'm surprised they even got $2.5m for it, sat on the market for a long time. Vendor probably wanted the CV price which was clearly wrong.

Wait a minute Dr Smith! So you are skewing your results by excluding all cross leases? Anything else we should know?

"Dr Smith" - That sounds awfully similar to a certain former Housing Minister...

Mind you, they do both share a penchant for alternative, selective, and poorly founded 'facts'.
Proof right here -
Dr Smith here is using but 38 properties with substantial geographic and economic distance and implying that his results hold pertinence to the full population.

I have asked him on several occasions to supply the variance of his estimates, to no avail.
Maybe he will listen to MTP seeing as he is so tight with TTP...?

He sure likes to point out the negative attributes of property sales that don't fit his narrative, while at the same time boasting about sales on triple grammar properties (i.e. 45 Dexter Ave in his earlier post on this article) as a clear indicator of the state of the market in Auckland.

I don't exclude cross leases properties however I have noticed that they are often the ones selling for below 2017 RV while freehold get above 2017 RV. They are balancing each other out in a way. Nymad is correct in that the title is factored into the value, I just noted that sometimes they appear to be given a value more in line with a freehold property when they shouldn't.

To be clear I use the Auckland normal sort of house system for my "analysis". Freehold or crosslease. I exclude obviously problematic homes like those with no CCC or proven to be leaky. Also new builds and subdivisions are usually excluded. New builds would make things look too rosy if the RV was on the demolished house. See how fair I am?

And, I didn't this time, but I usually stress that these figures are derived from very motivated buyers. That must be kept in mind.

Wrong.
Cross lease is definitely factored in the council valuation.

The premium that fee simple property is attracting is due to the redevelopment premium vis-a-vis cross leased property. This has obviously increased in magnitude since the AUP.

3 Irene Avenue, Mt Eden
RV $1.9m (2017)
Sold $3.05m this month
60% above CV, bought by family needing a home not foreigners :-)

Does the CV take into consideration that this is a Triple Grammar Zone property?

Of the 38 sold 24 sold above 2017 RV.

Basic analytics questions to as yourself:

1. How is your "population" defined? (Any stupid answers will show you don't understand the basics of analysis)

2. What is the margin of error of your rep sample (n=38) on the direction of house price values?

3. What does the RV benchmark tell you? Are you saying that a "construct" is the focal point for analysing house price movements? What are the limitations of this?

No one's interested in that highfalutin nonsense J.C.

Agreed Zach

FYI - using the RV as a benchmark is the standard approach in New Zealand.
See the SPAR procedure for more info.

It's not the approach that is the issue. Convergence is the issue here.

They’ll be fire & brimstone down on you Nymad doubting JC

Firstly, thanks for the data - I get too bored every time I start to load the data into spreadsheets.

I did load the first 30 of B&T sales and came out around 96% of RV. What I believe I saw in the data was that prices were higher for those with large land sites or potential for subdivision. This suggests that the new urban zones may not be accurately reflected in the RV's.

There is also a risk that the properties that are going to auction, or at least selling at auction, are the ones where the RV understates the values.

I think the QV figures are the best of a bad bunch in this space - although greatly lagged. I applaud EcoBird for at least putting a prediction on the site - although we should check what measure she is looking to use when July rolls around - REINZ; QV or B&T.

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This is why the foreign buyer ban is necessary, despite prices being high, they are exacerbating the crisis

This stopped last year. I don't think the legislation will have a major impact anymore. I do sympathise with your sentiment and I feel the same way. I have lost out on auctions to buyers on phone from China on numerous occasions. Our problem now is just demand and supply. We still have high level of immigration and building new houses is super expensive so supply is still stuffed.

Shows your lack of knowledge, keep up with what's going on.. it's being submitted to parliament on June 21st.

You're so confused mate

Haha thanks mate. I actually submitted promoting the ban. It's better for us to have it then not even though the horse is bolted, effect will be negligible now. I sent further emails to David Parker after they delayed the ban. Funnily he didn't reply to any of my emails. I feel his doing a "Eminem" Stan on me.

Maybe your email didn't make sense? No offense

Was very polite and professional, maybe that's why it didn't make sense. I forgot it was going to the Labour party, should have got my 9 year old to write it. Might have made more sense to them

So far you've proved that your IQ is well below par, hopefully your 9 year old is smarter than you

You forgot to say "no offense" like you did last time you send an offensive reply. Or just say "with all due respect", makes it better :-)

My apologies

I suspect most people realise now there isn't going to be a foreign buyer ban or a reduction in immigration so are getting in while the market is flat.

Shows your lack of knowledge, keep up with what's going on.. it's being submitted to parliament on June 21st.

The committee is reporting back to Parliament on the 21st June.

I cant see how they can get around the TPP clauses.

Watch the space. Don't rack that little brain

There's that rack word again, which retired-poppy thinks you should have spelt it wrack. Maybe he is rong!

Because you sound like a bong?

With that sort of brainless comment you are clearly a friend of retired poppy. I hope he isn't too depressed to find out the sky is not falling.

Dude look at the shit on your back before pointing at others.

Read your previous comment ,you dud

Stop talking shit the both of you. It is very childish!!

Mind your business Mr. Speak when you're spoken to

Houseworks, I had no idea of the impression I had made on you. It's been my pleasure. Rest assured, I will certainly seize upon the opportunity to talk some sense into you should it arise again in the future ;-) The importance of becoming a law abiding Landlord should never be underestimated! Remember this? "Sometimes don't even get my bonds lodged which I realise is a huge no no although I know I'm not alone in this transgression. It can be expensive if pinged touch wood"

It is so good calling you out from your troll hole and then watching you go about crossing swords hahah works everytime!

Houseworks, is this your only source of satisfaction? Getting even for some sad school years? Get some help....

The two words did come from different sources—rack is thought to be from the Middle Dutch word recken, meaning “to stretch,” and wrack comes from the Middle English word for a shipwreck, wrak—and do retain different meanings. However, wrack has so often been used as a variant spelling of rack, especially when used in the phrases “(w)rack one’s brain” and “(w)racked with pain,” that many dictionaries now list it as a variant.
--Merriam Webster

Thanks sasha, but someone like housework(er) won't get it

As far as I know they already have, by repositioning residential property as "sensitive", has the TTP been ratified as yet anyway?

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We'll find out the truth with the next set of REINZ figures. Until then they can publish confidence (game) surveys all they want.

The 'powers that be' are most likely interested in a stable, slightly improving hosing market. A healthy economy would see confidence in house prices holding and going up at least slightly. Too hot is a concern but only because it makes the likelihood of a crash greater.

Locations that are in decline economically always have depressed house prices.

You want a populace of confident folk willing to invest and the prospect of not losing your money and in fact making a good investment is critical.

Something to consider. The 'steering committee' the 'deep state' the 'vested interests' whatever you like to call it, are probably on the side of the spruikers. From a purely self interested POV this is probably the side to be on. I hate to admit it really.

Zachary's comment about a healthy economy is correct (and thanks for all the Auckland house price information you provide, Zachary).

According to The Treasury forecasts – which do not differ greatly from those of any other reputable forecaster – the economy is in a sweet spot. Output is expected to grow at about 2.9 percent a year over the next four years and employment about 1.7% p.a. That means a productivity growth of 1.2% p.a.. The expectation is that real wages will rise slightly faster than productivity; inflation is expected to remain low (an average 1.8% p.a.). The country will still be borrowing overseas and the net international investment position (roughly net overseas debt) will rise from 54.7 percent in June 2018 to 57.0 percent. That may be disappointing but not dangerously so; the level in June 2017 was 57.3 percent.

So a steady-as-she-goes housing market across the foreseeable future is pretty much on the cards.

Those who anticipate (or yearn for) a sizeable dip in house prices are in for continuing disappointment.

TTP

but do you believe the stupid young analysts at the treasury with no real life experience ... :)

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I'm not seeing this in the market at the moment.

Heard anecdotal evidence from a RE, with a Chinese sounding surname. Banks with Chinese sounding names in NZ have stopped lending on income in China. This has left some buyers (with Chinese sounding surnames) in a right pickle (2 that I know of). The said banks were giving buyers (with Chinese sounding surnames) verbal oks to buy to a certain limit. Offers (unconditional) were made and when the buyers went to finalise the mortgage they were told NO, China income no longer accepted. Buyers now desperately trying to get finance before deal collapses.

Mrs TP that happened to us with our British income. Last year they were throwing money at us, this year the computer says no, even with a 35-40% LVR!

I know that the Big Four stopped lending on fake Chinese income/ foreign income last year (forging fake documents is a national pastime in China). The Chinese banks continued, picking up the slack. Seems even they are now concerned at the quality of the loans they have been making. I wonder how big of a problem these questionable loans may become in the future?

If you are following the world news, the Aussie Govt is already expressing their concerns on Mainland's interference in their own country and around the pacific especially. NZ at some points will follow suit and I would be hesitant to bet on any hope of large number of buyers returning to our market

I'm not seeing this in the market at the moment.

Taking on the trolls at their own game.

Expectations of course do not mean they will eventuate - could be false hope. However, I think what it means is that most people have looked at the government's plans and have concluded that not much is going to change in the short to medium term. Kiwibuild is a fizzer and and foreign home buying will have so many carve outs and exceptions that it will have little impact. Migration, while slowing, still means more and more dwellings are required in addition to the backlog we now have. As yet, I have to see much from this government that will mean more supply. If there is a correction in the housing market then it will probably relate to outside factors or just a natural cycle.

Given the seasonal nature of housing, did anyone else notice that yoy price rise expectation is actually down 10% compared to April 2017?

Peculiar headline.

"Majority still think it is a bad time to buy" would be more accurate.

Interesting. Since prices aren't going up, so now we have be happy with "expectations". Expectation is not reliable but hard real data is. would wait to see if prices are going up, which I doubt would happen in near future because of two reasons- 1) Bright line test now increased to 5 years. An investor/speculator who buys a property for capital gains has to wait for 5 years to get tax free gains. 2) End of negative gearing from 2020 which would dampen the demand a bit. On top of that, if foreign buyer ban is implemented, one can only imagine what would happen. Trust me, nothing lasts forever. It's smart to get out while you can and lock your gains. Cash up and be ready to scoop when market crashes.

House prices ARE still going up, about 11% pa according to latest REINZ data.

Interesting, the latest REINZ report I read said national median house prices had gone up 1.9% YoY. Down in Auckland.

I must be looking at a dud report?

Indeed, read it again, it's on this site

https://www.interest.co.nz/property/93678/median-auckland-house-price-ha...

"According to the Real Estate Institute of New Zealand, the country’s median house price fell $10,000 from March to April, to $550,000, yet was up $10,000 (+2%) from April last year."

"Taking Auckland out of the picture, house price growth throughout the rest of New Zealand remained strong. The median price increased by +6% over the year to $460,000"

Shoulda gone to specsavers...

Except where they aren't.. the Auckland train has run out of steam, the regions usually take a few months to realise the engine has stalled.

Confidence in the housing market has bounced back????
By whom? RE agents, vendors clinging on to the raised expectations on the elevated GV's ?

The figures of listings on Trade-Me, the auction clearance rates, attendance at open homes, Sold listings figures in RE agents' profile tell a different story etc

I went to a DGZ on site auction last week. 14 RE agents, 1 nosy neighbour and me, no buyers at all. Most uncomfortable event I have ever been to. Champers, San Pellegrino and Ferrero Rochers laid out on the dining table. The auctioneer pulled me aside to twist my arm into making a bid before the property was "opened to the market for all offers". Not sure how he could say that with a straight face. Of course I declined.

Yes and we've had some very desperate sounding RE's calling us up in Wellington too. This is the first time in 2 years that agents have ever called us to drum up buyer interest. A very notable change.

I have noticed 2BR or 3BR places are still in seriously hot demand for FHBs down here. My rental letterbox is constantly being bombarded with more and more aggressive pitches for my landlord to put the place on the market. I went to three open homes over the weekend, must have been at least 30 groups going through each. What I found hard to comprehend was that they were rolling up in giant SUVs, flash new UTEs, and one even in a porsche! Either this is Auckland money heading south, or low interest lending has become so ingrained in the psyche of my generation that the concept of risk simply doesn't exist.

pin2cone Well there are articles around about the Auckland exodus and some NZ property investors have certainly moved out of Auckland to find better yields or somewhere where their capital can meet the LVR.

Flash cars can be just as symptomatic of debt as it can be of actual wealth, let's not forget NZ has 168% household debt to income.

We're currently driving around in an old 90s banger (courtesy car) because our 4x4 is being repaired after a drunk driver crashed in to it. So if we pulled up at an open home, we'd likely be judged poorer than the chumps with their UTE on hire purchase.

I'm out of the market for other reasons but sorry I'm not expecting a crash, it simply is not going to happen and the Government know it while net immigration remains high. Even they are not stupid enough to see that so they keep the gates open..

Hi Carlos67,

That's a valid comment........

But it's not going to make you too popular here, I'm afraid.

Nonetheless, being forthright and to-the-point in blogs like this one is more satisfying than mere popularity - or that's what I find.

In any case, even in this blog most contributors have accepted now that there ain't going to be a crash.

TTP

No crash in Auckland just an adjustment due to the Chinese no longer buying and paying high prices like they did between 2014 and 2016.

Ten years from now the Auckland average property price trend line will likely show a minor upward blip during that period but otherwise just a continued upward slope as it has done since forever.

Indeed, I’m picking that in 10 years time the average in Auckland will be 20x income. You heard it here first

Agreed

Poe’s law, who would ever doubt it....

Agreed. The cancer is alive and kicking.

Lol 20x income. Auckland property doubles every 7 years. It will be 30x in 2027.

Poe’s law.....every day on this site, it is validated

Anyone seen the latest vid from Martin North (House of Cards). Pretty much time to drag the toaster into the bathtub. Not sure where this all this supposed optimism is coming from.

Yeah I saw that. I think Aussie looks like a slow motion car crash, a bubble of biblical proportions

Anyone seen the latest vid from Martin North (House of Cards). Pretty much time to drag the toaster into the bathtub. Not sure where this all this supposed optimism is coming from.

The optimism comes from the comms depts of the various financial organizations and govt leaders and depts. It's a never-ending performance of confidence tricks.

Of course it is a good time to buy property in Christchurch, as it always is.

People that live in Christchurch choose it because the standard of living is so high.

Property is still very underpriced but provides true value and isn’t going to get any cheaper.

Christchurch has turned a corner judging from the confidence figures. You won't need to keep pushing the train much longer TM as momentum will do the work.

Some analysts are suggesting that Christchurch, in particular, is in the trough of the housing cycle.

If so, it makes reasonable sense to buy there now. Apparently, first home buyers are very active in ChCh at the moment - and snapping up bargains........

TTP

Can you give us some links?

trying to get any facts or evidence from TTP is futile

Yes there are good no.s of first home buyers buying as it makes sense to own rather than renting, however a lot just don’t save enough for deposits.

Christchurch popularity will continue to grow despite the Chch expert Gordon booking on about the weather and shakes etc.

ChCh rebuild,has been very slow but momentum has picked up a bit and there are still opportunities if you are prepared to take them.

Try house+plot as follows:

Keep a hanky handy: keyboards and salty tears don't mix.

I wonder if the 75% who cant sell their home at auction, in Auckland would agree with the new found optimism???

That's not important, what's important is that the sales prices are averaging at or above 2017 CV. Even if it is an ever shrinking data set.

Back me up Zachary Smith!!!

Well, more houses sold in April 2018 than in April 2017 so I am not too sure about that 'shrinking data set'. By any measure significant numbers of houses do sell each month.

More houses sold in March 2017 vs March 2018.

Does the increase in April 2018 on 2017 compensate for the decrease in the March YOY figure?

All sponsored garbage like this comes under the heading of "One Roof" and is salivated upon by the gullible few. Funny how a bank sponsored survey gets 80 plus comments yet the more insightful "Train Wreck" series of articles gets half that. ASB are just trying to keep the train on the tracks! Can't say I blame them considering what's inevitably at stake.

That “oneroof” website consolidating all the NZME property porn is self serving garbage

That's too funny!

Bobster, nicely said - ha-ha-ha :)

Now that things are heating up again we can discuss interesting details of buying and selling homes. What do people here think about pre-auction offers? Good idea or bad idea? Good for the buyer or good for the seller?
Have you ever noticed an advert where it states that no pre-auction offers will be considered? Noob seller or seasoned professional?

Pre auction offers are good for the seller if they choose to bring the auction forward, at least based on the last two I followed in Kohi. Both sold at auction to a buyer other than the person making the pre auction offer. The agent said it was common as people are attracted to houses that others show interest in.

Zachary, are you on heat? If Auckland property was heating up, I would see it happening with my own eyes. Keep it real dude!

Wow, where did that ZS comment come from? It really does represent an alternative reality to how I perceive things. Credit tightening, Aussie banks coming under pressure in Aussie, high level of inventory, rising worldwide interest rates, but it’s all still apparently onwards and upwards to a DTI of infinity? Don’t get it at all

Bobster, any ideas how the Oz bubble popping in spectacular fashion would impact NZ? Is there any historical correlation between the two markets?

We share a banking sector, their banks are our banks. I suppose if things went well south in the Australian property sector that would be a psychological shock here but I don’t think that counts for much. It’s about us sharing the commmon credit of their banks. If their bubble pops spectacularly that may really damage their banking system, and we would be the collateral damage

Yep.
Although we'd see lots of kiwis return and fewer leave which wouldn't help the demand/supply balance here

Why?

If Australian housing became affordable you'd see kiwis flooding over there rather than hang around in this miserable sh**hole.

Good question. Pre-owned auction works well to eliminate competition while others haven't seen or still doing due diligence. I'm not sure if it's that good for the seller as all you've done is stopped everyone getting to a position to bid. I have never bought pre-auction but I know a few people who picked up some good deals. Not an issue right now as according to this website blogs nothing is selling. :-)
In all honesty, it is a terrible time to sell. People are too scared to buy with all this anti-property sentiments around especially with this idiotic govt who are happy to bank roll developers, pay high build costs and punish landlords. I think if you can off hold selling for a year or 2, you will do much better than in today's market.

It certainly presents the seller with a conundrum. Generally a pre-auction offer would have to be a fairly aggressive one to be tempting so a buyer is unlikely to get a super bargain. I agree with Rex-Pat's suggestion that it gives other buyers confidence to bid reasonably knowing there are other buyers for the property out there but do those other buyers have time to get their act together?

It is still probably not a bad time to sell in a premium location. I was talking with an agent at an open home in the weekend about a possible rush of landlords offloading their rentals with the new rules coming in. He said that it takes about two years for the decision to become a no brainer.

If you had several properties and were slightly negatively geared it may only take selling one property to put it all back into being positively geared. Quite a few property owners may be in this position. Landlords don't have to give up all their properties to put themselves in a solid position.

Good for the seller, as at least they have someone interested in buying.

If it goes to auction theres a 75% chance it wont sell.

Buyers are better to wait around for the auction and when its passed in send in a low ball offer

ZS, as buyers we don't use pre auction offers and have been successful with auctions. As sellers we have only ever been offered a pre auction offer once out of at least a dozen auctions we have held so doesn't happen often in our experience.

Yawn.
In my opinion Auckland remains overrated and very overpriced for what it is.
Once a really nice and reasonably affordable city, over time turning into a place that is losing its sheen as it continues to get overcongested and overpriced. A real pity.
I think I finally lost Auckland when I had a couple of four hour return trips to Omaha over summer. Stuff that

True ... the Queen City was already showing itself to be bursting at the seams , and with a failing infrastructure , under the Clark / Cullen government ... before the Key / English regime completely stuffed it up by unleashing an unrestrained immigration policy ... flooding NZ , and Orc Land particularly , with hoards of unskilled Indian and Chinese youngsters ... in an effort to restrain wages growth ....

... neglected by Labour ... stuffed up by the Gnats ... and now the place has gone completely Goofy ...

I loved Auckland in the 90s. With foresight and planning it could have still grown and maintained liveability. Unfortunately there was very little foresight and planning. It's going downhill every year.

Yeah, agree. The natural environment with the harbour is nice, but the built environment is rubbish. It could have been a cute Edwardian cityscape but that’s mostly gone now. Many of the central suburbs are blighted with infill housing, ugly. Auckland represents a litany of missed opportunities, it really lost its way

Yeah exactly. The natural setting is one of Auckland's great joys, unfortunately it's been seriously spoilt by overpopulation, disease and pollution.

Phil Gooffy

That sounds pretty racist, Gummy Bear. I hope you and fritz don't live in Auckland as this is a multicultural City. Stay happy in your little towns away from Auckland.

Auckland was aleady very multicultural in the 90s. That's not the issue.
The issue is that the city has grown too quickly, especially given there has been such poor planning.
And before you throw that 'small town' crap around - I have lived in 3 cities over 5 million population. I like big cities. But I don't like mid sized cities that have got big city problems but lack the big city benefits.

Unfortunately I think Auckland is predestined to be overcrowded and overpriced. One of these days the Alpine Fault or one of those faults under Wellington will rupture and we'll get a whole lot more refugees flooding in

... unless one of those 29 dormant volcanoes under Orc Land City re-emerges and erupts , as Killer Whey Ho has in Hawaii ...

And then , Orc Land will be about as crowded and lively as Naseby is on a cold Wednesday night in mid winter ...

Wow, you really hate this city. You are a wishing a volcano on us, sad mate?? Let me guess, you are from Christchurch??

... steady on , sweet-heart ... Orc Land does sit atop 29 dormant volcanoes ... that is simply a scientific fact ... not a wish , we love the Queen City ... or at least , loved the old Orc Land before it got swamped by new arrivals ...

Secondly .... check with the Dept of Sadistics .... under the Gnats NZ was flooded with a huge wave of immigrants from China , India , & the Philippines ... another fact ... not racism .... and the vast majority of them settled in Orc Land ...

Which city do live in? Your comments are very much anti-Auckland and very racist. I can't see any statistic that calls them unskilled Chinese and Indian youngsters??? Play your Banjo and stay happy in your little town where you are all related to each other.

Try to keep out those unskilled Indian and Chinese out of your town, one of your sisters might break your perfect gene pool, sweet-heart.

Gummy is right. We've taken far too many unskilled immigrants who have offered little benefit to Auckland other than keeping wages down for employers

Typical, people start pulling the race card when facts are presented to stifle debate. Its a fact, that we have mass immigration.

Its also a fact Auckland has Volcanos.

If you cant read between the lines of Gummy Bears humour there is no hope for you.

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It's true. Auckland has become an overrated, overpriced third world dump. The place is also so mind bendingly dull that the only real pass time is making pathetic accusations of racism.

You can't view Auckland as a city in isolation anymore. Those days are long gone. It's now a node of Globalist culture, the dominant empire of the 21st century. Passing the time "making pathetic accusations of racism" is an important element of that. Just be thankful that we live far away from Airstrip One.

Indeed, as a globalist node I would certainly rank it right up there with Perth, Adelaide and Grimsby. Truly a world city.

I did not know that Grimsby was a multi-cultural gateway city, hosting multi-national corporate offices with international connections into an economic region.
Ah, I see you jest.
You need to get up to date with new paradigm. Global means worldwide, all over the planet, to the farthest reaches. Have you heard about the Internet and twin engined wide-bodied jets?

Seriously, you need to get out more and see a bit more of the world....you seem to be another one who thinks “this time is different” as Auckland has now joined the ranks of the Great Global Cities. Looked at a map lately? [cringe]

Bizarre, all the data supports my theory. Keep up or be left behind.

[double cringe]

I understand now why the 'powers that be' have embarked upon a population replacement program.

All i know is buying stuff from major multinational companies, it becomes very evident very quickly that the NZ market is mostly run out of Sydney or Melbourne, and parts are usually "in stock in our Melbourne warehouse, can get them here friday". Auckland may be NZs largest city, but for many companies its just a branch office of their Australian operation.

Yeah, Auckland is about as globally significant as Adelaide or Perth. Of somehat less global importance than Copenhagen. So I stand by my earlier statement. Arguments to the contrary seem to me a variation of the “this time is different” fallacy.

Totally agree. Auckland is a very insignificant city by global standards. On a par with Adelaide. But with a lower quality of life. And horrendously expensive.

... Adelaide has about 12 awesome beaches ... a functioning public transport system .... fantastic wineries in McLaren Vale & the Barossa Valley .... and the German town of Hahndorf , up in the hills ...

Orc Land has .... has .... ahhhhhhhh .... someone help me .... lost for ideas here .... um diddily dum .... Mayor Goofy !

Piha, Waiheke, had the Waitakere Ranges (now mostly closed due to Kauri Dieback), Maraetai, Devenport is nice on a good day. Eastern beach (brush up on your Cantonese first).

Better than bloody Palmy north where I am today.

Its a fact we have had mass immigration, but it doesn't mean we have to continue down this path. I'm all for a 5 year halt on immigration except those people with skills we really need. Wait till the infrastructure has caught up then allow immigrationto start again (at sane levels)

While this is a valid suggestion it is in the same category as "we should give a free house to every citizen". That is it's just not going to happen.

Is this the same as people (including me) saying "Don't worry, Trump will never get elected" Look how that turned out

Ha ha Naseby
I think the volcanic probability is much lower than earthquakes elsewhere?

... I've been trying to think of the perfectly safe spot in Kiwi land ... the one spot where nature can't possibly get at you .... where earthquakes , typhoons , tsunamis , forest fires , locusts , volcanos , Greenpeace collectors .... where these are totally absent ...

All I came up with is the parliamentary basement swimming pool deep into the bowels of the Beehive in Wellington ...

... everywhere else you're vulnerable , I guess ...

-

I never said it's under Wellington. I am born and bred Wellingtonian. If it goes then it could take a number of smaller south island centres out, as well as Christchurch.
Whether it's the alpine fault whacking the south island, or a fault under Wellington, or a big quake in Napier or Tauranga, Auckland will once again take people....and once again be totally unplanned for it

I miss Wellington. It's got most of Auckland's good points without Auckland's bad points.

It’s a really nice compact and funky city centre, I like it, best city in NZ for urban lifestyle. But the weather sucks

Weather is relative. Compared to the UK, the weather in Welly is amazing ;-) ;-)

But being a red head, I also complain bitterly if it's hot or humid so I may like the climate better than the average Brit too.

I am relocating to Hamilton due to change of employment , I am shocked to see the sudden surge in prices and buyer activity just in the last 8 weeks or so. Of course I have not done any systematic research but sold prices are much higher than they were late last year and early this year. Anecdotally the agents i met tell me that the buyers are mostly local. The section prices in North Hamilton have shot up about 100-150 K in one year. Strange that Auckland seems to be static but Hamilton and other regions are going up . ? explaination
I am confused now whether to buy swiftly or wait ? The Auckland disease seems to be spreading after killing its host !

That pretty much always happens. Auckland booms then the rest follow. Followed by Auckland stagnates then the rest follow.

I think one should be careful to assume safety or increasing asset values in real estate. New Zealand continues to be one of the most expensive housing market in the world. Look to other countries like Canada to see the consequences of overvalued prices and how quickly they can correct. We've come to far to fast and the norm is always , always to revert back to median.

... I wish that instead of borrowing $NZ 200 Billion from Australian banks , to purchase residential real estate , we had invested that munny into infrastructure ... the roads , tunnels , sports stadiums , transmission lines , bridges , poo treatment plants , yada dada doooo ...

Things we really need ; things that raise our standard of living , and improve our daily lives ....things that shorten our daily commute time ...

... as opposed to exorbitantly high house prices ... $ 200 billion buys a lot of pain for renters and other on-house owners , FHB's ... and indebts us to a bunch of crooked offshore financiers ...

This is the best comment I have read here for ages. Well done sir

That just makes to much sense.

Its better that on an individual level I can pat myself on the back, and say how cool I am. Who cares about the future of NZ, its all about me.

Damn, still waiting for the price to drop so can pick up some bargain to add to the portfolio....!!
Damn damn dammmmnn :(

I'd just like to get the last word in on this thread. I see Auckland beats Brisbane, Perth, Vancouver, Montreal and even Berlin in the Global City rankings.

https://en.wikipedia.org/wiki/Global_city

You may vehemently disagree with this but that is only because you are a bit of a dinosaur. It is an endearing trait to be so negative about one's own place, typically Kiwi. You think that Auckland is a steaming pile of faeces, I get that. Unfortunately your time is coming to an end. There is no place for you in the global network of cities except perhaps the museum or zoo.

New people are coming, people who are dynamic and exciting, hard working and above all positive. People who have faced hardship and oppression and realize that NZ is leading the way in the development of a 'brave new world'. People who have an affinity with the tanga te wheunua, who understand what freedom is, that human rights are universal. People who will thrive in the Global City.

People who will change our culture. People like Golriz Ghahraman, Green MP and former child refugee who is already beavering away on improving our laws so that no one's feelings can ever be hurt without severe consequences.

https://www.stuff.co.nz/business/innovation/104113652/europe-showing-nz-...

Just go to any public place in Auckland and look around you.
That old, self deprecating Kiwi, in the T shirt and gum boots, talking crap about everything, is not long for this world.

Nations are disappearing, patriotism is abhorred, what matters most is feelings and that everyone is positive in the Global network.

Zachary, latest 1071 sales data. In the four months to 30 April 2018, there were 190 sales totalling $331 million. Total CV was $335 million so the average price was 99% of 2017 CV.

Interesting. That's what I would expect with the data including all sales and not just auctions, sitting just below current CV. Actually a bit better than I expected.

Zachary Smith, you're our very own "One Roof" columnist - ha-ha-ha-ha :) Keep that dream alive!

• Glendowie 37 sales @ 104% CV
• St Heliers 70 sales @ 100% CV
• Kohimarama 42 sales @ 96% CV
• Mission Bay 14 sales @ 97% CV
• Orakei 27 sales @ 94% CV