House prices were generally softer in July compared to June but sales volumes are holding up - REINZ

Median house prices cooled or remained flat in most parts of the country in July, according to the latest figures from the Real Estate Institute of NZ.

July's median selling prices were down compared to June in seven regions -  Auckland, Waikato, Gisborne, Manawatu-Whanganui, Wellington, Tasman  and Canterbury, but were up compared to June in six regions - Northland, Bay of Plenty, Taranaki, Marlborough, Nelson and West Coast, and unchanged in three - Hawkes Bay, Otago and Southland.

The national median price dropped from $560,000 in June to $550,000 in July.

The biggest price declines were in Wellington where the median dropped from $600,000 in June to $545,000 in July (-9.2%) while the biggest rise was in Nelson, where it leapt from $490,000 in June to $547,000 in July (+11.6%).

Prices remained stagnant in Auckland, where the median was $835,000, which is below where it was in June 2017 and June 2018, suggesting capital gains have been non-existent in the region for the last two years.

A similar situation exists in Canterbury where July's median of $428,500 was above the July 2017 median of $420,000 but still below the July 2016 median of $430,000.

Sales volumes held up reasonably well compared to last year, but remained well below where they were during the buying frenzy of 2012 to 2016.

There were 5661 sales in July compared to 5619 in July last year, a change of less than 1%.

The interactive charts below track the monthly median selling prices and sales volumes in all regions.

Homes are also taking longer to sell, with the national median number of days it takes to sell a property rising from 36 in July last year to 37 in July this year.

However in Auckland there was a big jump in the length of time it takes to sell a property, with the median days to sell increasing from 37 in July last year to 41 in July this year.

Median price - REINZ

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

Volumes sold - REINZ

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

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

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

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

129 Comments

Wow, so down in all of the large population bases where all of the jobs are.... interesting.

Auckland, Waikato, Wellington, Canterbury,

up
28

Many will bemoan price declines during a "housing shortage" while at the same time condemning increases to public sector & minimum wage rates. Can't have it both ways.

NZ houses are simply unaffordable.

Unaffordable to some. 5,661 buyers could afford to buy in July.

up
19

Ex Expat, the same reasoning once applied to Australian property. The Royal Commission inquiry into bank lending suddenly meant less could afford to buy.

How many of those 5,661 are buying and selling in the same market? Of course housing is affordable for those people.

Nzdan, you bought in Napier?

We bought in Masterton 13 months ago.

ok :)

Time to get out of Masterton Dan? Cash up rent for a while and watch how cheap Welly gets....Crunch is on it's way.

Well we're in a very good position at the moment so i'd rather just hunker down and watch the chaos unfold. We put a successful low ball offer on the property, just $15k above what the vendor paid in 2007. Our mortgage, rates, insurance combined is $80 per week less than the market rent in Masterton.

Very nice work Nzdan.

No need to sell then, sounds like a great deal and a good position to be in.

Masterton is actually going well at the moment - what street did you buy in?

I think we'll see in the coming months, just how many who bought could actually afford what they bought.

Interest rates are heading down though

maybe? maybe not?... and who will be able to get their hands on the funds that are available?

Riding a dead horse. Insights from the Dakota Indians with reference to the markets. (This post is for the Wellington Specuvestors)

The tribal wisdom of the Dakota Indians, passed on from generation to generation, says that when you discover that you are riding a dead horse, the best strategy is to dismount.

In modern economies, however, a whole range of far more advanced strategies are often employed, such as:

1. Buying a stronger whip. (more debt at cheaper terms)

2. Changing riders. (Find someone else from abroad who has more money than you do)

3. Threatening the horse with termination.

4. Appointing a committee to study the horse.

5. Visiting other sites to see how others ride dead horses. (Follow suit and keep lowering interest rates)

6. Lowering the standards so that dead horses can be included. (Lend the young 7 times multiple of income rather than 4)

7. Re-classifying the dead horse as “living, impaired”.

8. Hiring outside contractors to ride the dead horse.

9. Harnessing several dead horses together to increase the speed. (Leverage on a few buy to lets)

10. Attempting to mount multiple dead horses in hopes that one of them will spring to life. (Buy some more in the hope that profits may come from somewhere to off-set losses elsewhere)

11. Providing additional funding and/or training to increase the dead horse’s performance. (Interest Only debt)

12. Doing a productivity study to see if lighter riders would improve the dead horse’s performance. (30 years terms rather than 25 and interest only debt)

13. Declaring that as the dead horse does not have to be fed, it is less costly, carries lower overhead, and therefore contributes substantially more to the bottom line of the economy than do some other horses.

14. Re-writing the expected performance requirements for all horses.

15. Promoting the dead horse to a supervisory position.

16. Buy a car instead

i love the spiel all the news agencies are putting on this release.

No links to detailed data? I'm surprised by the Wellington data given the Government spending on working groups. Errant data?

BTW: Core logic just adjusted my 1071 home value up 1% to 101% of 2017 CV, likely based on recent sales..

Too lazy to type in REINZ.co.nz yourself?

I'm channelling my inner Millennial.

up
19

No, just being your usual old boomer *bleep* self.

Thanks. Just voted for your comment to help keep it above the support for RP's above.

Was looking at 2018 Orewa sales yesterday, all selling below RV, from 1-15% down, median about -6%. From Reinz data North Shore median prices are down about 7% from 2016 peak.

Ecobird will not be happy!!!

Yes, this little cracker will leave a sour taste in Polly's mouth.

Nah birdy will just shift the goal posts to next July so he can't be wrong.

https://www.youtube.com/watch?v=4vuW6tQ0218

Edit - ops spelling

The Oozlum Bird will be flying around in ever decreasing circles looking for somewhere to hide his head.

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

Property prices to keep falling
BLSH may not be a happy chappy lad today, as he will realize he has not kept up to his name

Seasonal downturn or start of the fall down the slippery slope????

Looking at REINZ report, probably too early to call.

Auckland graphs of volumes sold, median sale prices, and days to sell pretty well flat-lining within current seasonal and statistical variation at the moment. Arguably some downward trend of 12MA median prices but no sign of collapse appears imminent.
Still a few drivers there - historically high immigration levels still, low interest rates. A couple of brakes though - affordability issues, KiwiBuild starting to come on stream, foreign buyer (how significant any way?) legislation imminent, lack of property investor activity, LVRs.

Only call at the moment; significant capital gains most unlikely in short term.

How much do you think Auckland median will fall and by when? I hope being so wrong for so long hasn’t knocked your confidence enough that you won’t make a prediction. Based on your 8 year track record, I’ll start getting very nervous if you start proclaiming property prices to rise.

Auckland continues to be flat (as it will be until 2021/22), but the rest of NZ still delivering capital gains. I think this will last a few months yet.

Did you know that the REINZ stratified index has Auckland prices up by 1.6%? The median has been affected, in part, by lower priced appartments and town houses coming online. The stratified index adjusts for factors such as this.

The HPI for New Zealand excluding Auckland increased 8.0% from July 2017 to a new record high of 2,589. The Auckland HPI increased 1.6% year-on-year to 2,883 – the same level as June 2018 - showing that despite the annual decrease in median price the market is still in a strong position.

BLSH
In answer to your question:
A couple of years ago I thought that the market was so over heated and with affordability and interest rate issues that a significant fall was likely. However, the Auckland market has tended to flat line, the interest rate outlook looks firm for the immediate future, and the market has held up remarkably well over the winter period, so unless there is a significant event a significant fall I feel is unlikely.
Of all concerned; it is Adrian Orr who has the ability to influence the market most and his outlook is for 2 to 3% although he sees other scenarios possible.
So, short answer to your question; unless there is a significant event, I see Auckland continuing to be be flat over the traditionally positive spring and summer season but any increase will be minor but a fall of 5% or so over the next 12 months (especially next winter) possible.
Given the outlook; for FHB looking to buying well and avoid loss of equity (i,e. buying below market value such as mortgagee sale, forced sale, marital separation, deceased estate etc) is likely to be as significant as what is happening to the market.
(Before anybody gets in; I am not a real estate agent talking up the market!)

Not an unreasonable assessment.

Unedited data from the report.
'The number of homes sold for less than $500,000
across New Zealand fell from 47.8% of the market
(2,687 properties) in July 2017 to 42.4% of the market
(2,402 properties) in July 2018'

So the volume of sales under $500k has fallen off a cliff last month compared to July 2017... And yet the medians everywhere have fallen heavily last month... Yes I know its a low volume market but we are still comparing year on year to July (which would have been similar winter conditions)

What does it mean? That the upper and middle markets are correcting at a rapid pace to still lower the overall median value when volumes at the lower end are so low.

Mr Hosking will be delighted to have sold out when he did! Wellington (with little stock) appears to be getting hammered - $55,000 fall in a month!

Only 1712 sales in Auckland

Thats the second worse number sold since 2010

Given that Auckland house prices peaked nearly two years ago - after a very strong upswing - it is noteworthy that there has been no significant downward price correction.

As has been stated before, the Auckland market has proven far more resilient than many here would have believed.

TTP

TTP

read my post or the report.. lower end volumes are significantly lower proportion of overall sales so the market is correcting heavily from the Top down.

Fair enough, Nic Johnson,

I edited my post when I re-read the data - and you and I "crossed in the post" at precisely 10.16am. (Happy to admit I was wrong in the first instance.)

But the Auckland result remains strong enough given the 2014-16 boom. Most house owners will be plenty happy with today's statistics.

TTP

Except for the thousands who bought in the boom (and probably on interest only) and are asking for top ups to renovate and realised they are now backwards in equity

Yeah factoring that in prices are circa 10% down

That is a positive spin. And not unreasonable. The median is relatively stable. So are the sales volumes.
But the leading indicators make pretty grim reading, particularly the number of days to sell. A four day increase (10%) seems quite large year on year. no?
Plus no capital gains for 2 years is going to be putting serious pressure on those on the margins. And generally trouble starts on the margins.......
But this seems relatively underwhelming if you are a bear.

Like rotting foundations.. it doesn't happen overnight, but if you aren't looking you get caught by surprise when the floor disappears from under you.

Agreed I'm bearish myself have been for a long time and have been wrong for along time.
That may well continue to.
But.....nothing about this stinkhole new normal economy makes any sense to me. And it you don't understand it, don't invest in it. So says the Oracle of Omaha.

A few days longer in a wet and cold July is not a disaster ... but a good excuse for Bears.

No capital gain? sure, but people do not bank CG every week or month not even once a year ... Houses are either for living or investing , they are anything but commodities or shares - you seem to treat them or think of them as such.

No CG means improves yields on rental properties and that has been outlined in more than one article here. Historically this is just normal.

Only simple minded people would move houses or sell investment if the market stagnated for a couple of years. They certainly lose matter what the apparent gains were.

I am pleased yet surprised to see a stable market in Auckland ( the big economic engine) with all the negative sentiments and low confidence surrounding us by this CoLs ... while some are happy with their wage adjustments and /or benefit rises, others are worried if they will have a job when min wage goes up again next year and they could lose half of their household income.

It will take a bit more for buyers to adjust and absorbe what is going around them in increased costs of living and uncertainty.

Never better time to buy FHBs and even Upgraders with Low IRs and stable markets.

2020 will be a very interesting and exciting year indeed.

How is that claim for July 2017 being the market bottom in Auckland holding up for you??? Time to recognize that there are lower lows happening.

Urm first of all the capital gain or loss does not affect your yield. The price you purchased at is what your yield will always be based on. The only thing that can improve your yield is if the rent increases. Unless you are trying to kid yourself.
I never said anyone banked capital gains. I simply said people aren't making them even in theory. If their investment plan was based around capital gains (which is what most property investors in NZ must be doing, given that yields are so poor) then it is significant for them that they are not making those gains. These investments are all heavily leveraged with poor yields. You need capital appreciation or the banks start getting very nervous.
Houses are exactly commodities just like everything else that has a price. Granted the factors that affect the price of a house are different to those that affect the price of wheat. However both are bought and sold in a market where prices are set by the buying and selling. A house is a commodity it is not a magical investment that is somehow special because you feel comfortable investing in it, or because you feel you understand it as an investment class. What you show there is the typical kiwi obsession with houses as an investment class, above all else. The obsession that is choking this country in debt and low productivity. Selling houses to each other doesn't really create any wealth. It just moves the numbers around.
And actually houses are just for living in. They have no other utility. You can't drive a house or sail one or eat one. I guess you could use them as storage units or convert them to offices, but then they aren't really houses anymore are they as houses by definition are where people live. People choose to invest in them as well so they are also investments.
Their have been many better times for FHBs. That is not to say that it might be better to invest now then last year or next year. But never better, is surely a bit of a stretch. Especially given the lengths that a FHB needs to go to to get on the ladder. View the market how ever you like the simple fact is it is very risky to leverage yourself to 70% of the value of a very illiquid asset, representing some 8 or 9 times your income simply because very few people can remember the last time the price of that asset took a tumble. That is not sound investment logic.

Hows your early spring going ......?????

Seems frosty from over here.

You might have to start doing open homes during work days in the hope of the postman stopping in for a look.....

Hi thegic.

If you read REINZ's commentary, it states for Auckland:

"Though we are seeing a slower market, which is typical for midwinter, there are EARLY SPRING SIGNS that this is changing." (page 9)

I suggest that you read the report before making comments here.

TTP

...and those "signs" may mean nothing. Sounds like someone grasping at straws.

Suddenly when the data doesn't agree with you its all about the REINZ spin doctors commentary. How things change eh?

When Realtor spin says slowing market... that's saying something.

market and price are not equivalent

And to those who think there are a shortage of houses in Auckland, well they are not exactly flying off the shelves

"However in Auckland there was a big jump in the length of time it takes to sell a property, with the median days to sell increasing from 37 in July last year to 41 in July this year"

It's 43 on a seasonally adjusted basis

Seasonally adjusted is code for we've $%^ed with the figures to make them look better. Just look at todays REINZ report. Akl median house price(unadjusted) -0.1% YoY, Seasonally Adjusted +0.2% YoY. Might just be me, but July last year was the same "season" as July this year.. So whatever adjustment they've made has nothing to do with seasons.

That one is a bit unusual... YoY numbers tend not to need seasonal adjustment excepting for the period around Easter due to the uncertainty of the timing of the holiday.

This has always confused me- Can anyone explain the discrepancy between yoy and yoy seasonally adjusted since they are the same season? cheers

https://youtu.be/dGx-cZsHo10?t=4m57s < watch for 30seconds, then you will understand seasonal adjustment ;)

up
13

Well...who is to buy them, at current prices? China has restricted its capital outflows lest its economy hollow out from the inside, and young Kiwis...it'll take them years to save deposits, and they have to hope for low interest rates to continue for a long time in order for the taking on of massive debt to not be a massive risk.

Things are not as accessible as they once were, when NZ society had prioritised making home ownership something Kiwis on average wages could get into.

up
13

Chinese buyers inflated the market and FHBs can’t afford to pay those 2016 prices. Houses will drop to meet the market and that’s happening now albeit slowly.

As for the regions I know loads of people (mainly retirees) who got out of Auckland when the going was good and have been buying a nice home and a couple of rentals in the regions. 2014 to 2016 was a once in a lifetime winfall.

up
11

There is no shortage. Rents have not moved anywhere near in line with capital appreciation. How can you have a shortage of something, when the cost to buy it goes up 70% but the cost to rent the same thing moves something like 20%.

This is an easy one. You drop the interest rate. House prices are sensitive to both interest rates and income while rent is primarily sensitive to income.
There is a shortage, its mathematically supported and acknowledged by Stats NZ and MBIE, that shortage however was not the main factor for the price gain from 2009, interest rates where the main factor.

Exactly you lower the interest rate. But that has no effect on supply. It simply makes it easier for people to buy. It effects the price. More people can buy, demand increases price goes up.
This effect has nothing to do with the supply. House prices are not rising because of lack of supply and you just confirmed that in your first sentence by pointing out that it is the cost of money that allows the cost to buy this asset to move more quickly then the cost to rent it. It is not about supply of houses but supply of credit.
This does not imply a shortage in supply. It simply cannot be so and I don't really care what stats NZ and MBIE show mathematically. You can make math show you whatever you like. Logic dictates that there cannot be a shortage or the cost to rent would mirror the cost to own, in some co-ordinated fashion. If you can break that relationship with some argument that involves actual physical supply of house then fine. But supply of credit does not bread that relationship.
Please provide me with an argument that doesn't actually confirm what I am saying. That the cost of credit is what has caused all this, which is what you say in your first sentence.
Prices are moving the most in the most expensive areas, which by your logic must mean there is the biggest shortage of housing there. So where are all the homeless people living in cars in Remuera, or Kohimarama, or Mt Eden? Nowhere, they go and live somewhere else.......because there isn't a shortage of supply or at least not much of one and certainly not enough of one to justify the disjoint between renting and buying.
I understand that there are people living in cars and garages and living 10 to a 2 bedroom home in poorer areas.......but that is the point they can't afford to live anywhere it's not that there is no where to live.
Honestly if people could just think for themselves and not believe something because the herd shouts it from the roofs then we might actually be a in a position to try and fix the affordability crisis. Instead we have labour wanting to build 650k affordable homes.
NONE OF THIS MAKES SENSE. So it is fine for people to speak up and say that rather then just swallowing what some geek at stats New Zealand has found by running his favourite algo through some numbers.

Coincidentally Auckland has now dropped out of Top 10 Liveable Cities. Ya know what I mean now don't ya?
https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12106958

and made it to number two in the most over valued cities
https://www.oneroof.co.nz/news/35261/?ref=nzhhome

Amazing top 10
Australia and Canada contribute 3 each, Japan 2, leaving the remaining 2 .....

Prestigious result for 2 Commonwealth countries

Look at index values, not medians which go up and down due to changing mix of stock sold. Volumes sold, days to sell, and inventory levels are also important to watch.

Hi Simon

The percentage of sales under $500,000 as a proportion of the total sales has fall from 48% to 42%.. So for the overall median price to be falling still (in some places dramatically) there must be bog corrections taking place in the middle and upper market place. Bizarrely, the proportion of plus $1,000,000 sales has held at 13 % of the overall total, but values must be significantly lower to lower the overall median.. The market in the middle (where % of total is higher compared to last year) must also be witnessing collapsing values for the overall medians to be declining. Watch out for all the positive spin about how good a time it is for first time buyers, they are the only people able to prop up the house of cards by transferring value into 30 years of debt. Where will the floor be? and are there enough first time buyers (with the ability) that they can dupe into the market?

you are treating the median figure as a mean average. It's not it's the median, i.e. what the 50th percentile property sold for. It tells you very little about whats happening at the top or bottom end of the market.

A reduction in the number of sales below $500k as a percentage of the total sales and a falling median price means that the rest of the marker has to have fallen by quite a lot more to lower the median sales price..... That surely can't be that difficult to understand can it?

Exactly. Median in Auckland is down on 12 months ago, as more properties in the smaller affordable segment come to market, yet the HPI index shows prices are holding flat over the last month and 'up'
1.6% over 12 months.

up
11

FBB to go through the third reading today! !! Watch the fun once implemented. Let the game begin. ..

national were fighting hard last night to delay it, ironically some of their arguing supports it and this was when he was in power
ie Rt Hon DAVID CARTER (National):
As a person associated with agriculture—and I'm sure the Hon David Parker himself knows of many, many properties, farm properties in particular, which have been sold to an overseas investor, they have gone through the process to get overseas investment approval, they have made all sorts of promises about developing the property, spending more money planting this and that, employing more New Zealanders, and from my local knowledge very infrequently do the purchasers comply.

I can quote one or two examples—I won't, because I think it's the Minister's job to know these examples

another example
ANDREW BAYLY (National—Hunua): Thank you, Madam Chair—so many issues to talk about. I just want to respond on that issue around the forestry. Well, I don't really want to focus on that. The issue is why would you want a New Zealand industry that's already 72 percent owned by foreigners to be able to get bigger, 100 percent? I just do not understand that rationale. I don't think the Minister has properly addressed that issue in its totality.

https://www.parliament.nz/en/pb/hansard-debates/rhr/combined/HansDeb_201...

a national member admitting why they dont want this bill passed
STUART SMITH (National—Kaikōura):
Now, the stated purpose that's been bandied about quite frequently is to try and actually lower the house prices here in New Zealand. But, if I could use a forestry analogy, you're playing with fire doing this, because, effectively, you're trying to undertake microsurgery with a chainsaw. You're having a very large potential impact, and if you start to get the market going down, it's very difficult to stop it. Then we're end up with a whole lot of people—particularly in Auckland—with negative equity. Then we'll have—as Mr Bayly, my colleague, will not—quite concerned, and, in fact, we'd have Adrian
STUART SMITH: The homeowners are going to be in serious trouble, as you well know. Then we'll see a rush to the door and it will cause a further spiral downwards in house prices. Then we'll see the Reserve Bank Governor, Adrian Orr, wondering what to do. How useful were those stress tests that he has undertaken? I suspect not very when things start to go down at the rate that they will when you start taking such a really blunt instrument to try and deal with a market that you shouldn't be medalling in in the first place.

Sounds like selling off all our land and assets to foreign ownership is the way to prosperity! A country of renters and workers, prosperous like never before!

What a (18th century) vision!

A country of renters and workers

Isn't that what Germany is? I have been reading and watching a few things from Germany indicating there is quite a large and growing number of working poor. These people rent but only just pay their bills so they have very little saved when they retire and the pension is less than their wages. Average wages are similar to NZ.

You mean being only renters and workers and lacking any ownership stake is not helping them? That...can't be right. It's the surefire way to prosperity.

And the Germans having had stable housing market for a couple of decades have also engineered a 'credit and immigration fuelled housing boom' since the GFC.. Whether they have been the subject of Chinese speculation to the same extent that we have is unlikely, because with a bigger population and more housing stock it would be more difficult for the speculators to pump them up to the same degree. But they have been pumped up as well.. The 'wealth effect' helping us Westerners all feel better so we buy the stuff that keeps the fires of industry fuelled and the smog hanging over the cities of China.

http://content.knightfrank.com/research/323/documents/en/prime-global-ci...

Without rising prices the banks need to continually reset their accumulated LVR holdings. .As prices fall , as they undoubtedly are already in Auckland and Canterbury and with national volumes stagnating , the banks will be caught in an interesting feedback loop, which will see further declines in price and volume. Needless to say for a large number of unsuspecting customers their ability to switch lender with ease or negotiating favourable terms with their existing lender is drawing to a close.

Indeed. The leverage up interest only junkies is already feeling the chill at banks as they rush to fix for as long as possible. Noise is that interest only extension will not be forthcoming just like Aussie has done already. Specuvestors face the real possibility getting hit with P&I loans (higher payments) as values decline and rents with it. What will happen in interest rates actually increase?

Negative leverage, like winter, is coming.

Banks do not mark to market existing stock. They are only required to update values when a change is made like a restructure or additional borrowing.

One remarkable statistic is Barfoots Auckland market share, which for the past two months has hovered around 50 percent

Ecobird!!!!! Where are you????????

sulking.

up
10

Thank god for some honest journalism. Read the Herald's version of this. 0.1% down in Auckland, booming in rest of country. What b......s. Guess who pays their bills...
Integrating that Sydney and London are showing similar trends, possibly Vancouver? All favoured locations for Overseas investors. Lot of negative equity coming our way. Governments need to govern, not nudge, nudge, wink, wink while a minority get richer on the back of foreign money laundering.

Wow !!! So houses no longer double every 10 years ????!!!!! Who would had thought???!! Lol ;)

lol, they do and they did in Auckland - check your math

You are from the past, we look to the future

So? Auckland is still a third rate Australasian city. House prices could drop 50% and it would still be career suicide for a FHB to buy here if you have access to Australia and Europe.

I remember a report during the cold war that looked at planned nuclear exchanges between Russia, the USA and its possible allies. If memory serves me correctly NZ rated no more than a single missile but its target was Auckland. There is a lesson here for mainland Chinese hoping for a safe bolt hole.

NZ is not targeted by any nuclear nations response plans. It is picked as one of the big 5 winners in an all out nuclear exchange.

Temporary winners... Once the radioactive dust settles how long would it be before somebody came down to steal our productive and only slightly radioactive land? Not like our Navy, army of Airforce could put up much of a fight.

Hmmm. Most regions' medians still up considerably year on year. This could just be seasonal, who knows. I'd like to see three consecutive monthly declines before I start jumping for joy.

Fake news..

Houses always go up..don't they.

Renters will confirm this.

Real Estate Agents will confirm this.

Real Estate Companies charge 4% for that privileged knowledge.

MP's know the score, they doubled up.

New Zealand is a stand out, hand up, rental market..

We have a land of milked and honey.

We is a Laundry Basket clothed and wff bred and buttered.

We have a land where all Capital Gains are Paramount....I have it on film, on line and on here.

Otherwise why would anyone buy a home...with excessive debt...leveraged and beyond our normal means..duh.!?

Funny that Greg conveniently compares July 18 to June 17 ( not July 17) just to show a decline, lol .cheap headline attention grabbing again Greg ?

I didn't read all the comments , but Great, steady as she goes ... No surprises there ... the Auckland market is very stable YoY and historically prices will start moving higher from here.

The good news is that the market is active and 5661 sales proves that life goes on despite the Doom and Gloom and all the other uncertainties this CoLs has delivered so far.

5661 wise folks bought in July, this number will rise as we get into Spring soon ... it is a good time to buy.

Eco Bird, a year ago you were saying FHB's should buy yet, prices have fallen further. What do you think about the headline "Auckland's median prices lower than they were two years ago"?

Prices have only dropped by $1,000 over the year but even so i think probably what he meant was, 'hey FHB go out and get a good deal in this soft market'. I doubt that he meant, 'hey FHB go out and pay median prices'...

Laminar, your response is woefully simplistic.

I am so sad for you RP, even the woefully simplistic answers are too hard for you to understand nowadays ...

you were looking for blood on the floor and that ain't happening .. poor RP ! :)

The headline is designed for you RP and the ones hoping that the crash will eventuate by prayers or loud barking ..lol.

So Medium price lower by $1000 from $836k to $835K is a disaster? few lower sales in the >$1.2M+ and few more sales in the <500K will do that ...

You are really exposing you shallowness to all and sundry RP.

However, go out and celebrate today the bottom of 2018 ( while you can) with all the other bears ..

All your cheers will not increase supply or lower the demand on housing and these alone do not bring prices down ....

I bet you hate RBNZ predictions and calculations too...

Mark my words again, prices will only rise from here.

Eco Bird, you say "Mark my words again, prices will only rise from here"

...Mark my words, in a years time, you will repeat the same words ;-)

Only those who have a clue are in a position to provide a clue.

Perhaps one July birdy will be right.....

They must be the ones who said that the market will be at least 10% down ??? ...Or the ones who predicted a 20% crash ?

haha ... "Only those who have a clue are in a position to provide a clue". .. like yourself I suppose ... The old wise property Guru full of .... clues* :)

Because we ( the clueless dumb investors) haven't got any clue of what's happening ... we just have millions tied in useless investments and get bugger all in return compared to your First Class TD --- We should all sell while we can and join you in your misery so you can feel better about yourself and us !!

Please pray for us RP ... we need some fast effective redemption before it is all lost and we end up in a Home or a Hospital.

Where the f**k did that Single Malt gone ?

Wait, what?

a 2 year TD has returned a better yield than most rental properties in Auckland over the same time. Most who bought in 2016 will have had net return pretty close to zero... or quite probably negative, since they cry every time someone tries to take away their tax writeoffs.

Hi Eco Bird,

Note that the DGM are trying to make a mountain out of a mole-hill.

TTP

Hi TTP,

Simple things please Simple minds my friend, they are celebrating the bottom of 2018 .. lol

But at least they found a $1000 in Auckland to hang few comments on and purge out some steam, forgot that prices elsewhere are rocketing...

Nevermind , let them cheer up a bit while they can, it has really been a tough year for them and their mates at the CoLs were not very helpful either :) ... waiting impatiently for their next blunder.

House price fundamental are all pointing towards a gradual rise from here as there is no reason whatsoever for them to fall, it is only in the minds of the hopeful.

Watch carefully for an exodus of skilled professionals to Aussie though, that could affect housing demand in Auckland if the numbers were high.

"House price fundamental are all pointing towards a gradual rise from here as there is no reason whatsoever for them to fall"

Please elaborate on said fundamentals? Is it income? Is it affordability? Didn't you post the identical comment last July?.

No reason to fall? You mean other than being internationally recognised as the second most over-valued market? Didn't Melbourne and Sydney property owners say the same?

I get that you need to smash what you perceive as Doom and Gloomers.. but there are a number of pragmatic and economically savvy people seriously worried about the credit obsessed over-leveraged situation now present. That's not the same as wishing it to fall, but your minimal grasp of economics and statistics is a worry because that's how many "investors" think.

That was a feeble concession of defeat.

Oh well, I guess this July is the new low, so you will have to wait another year ........

defeat? lol, I am not in a battle to prove anything - besides 0.1% on a Median Price is hardly worth debating - while it is a good sign of stability versus deterioration ... few desperate sellers could have easily caused that

Defeat is for those who missed out on a property they liked last year and need to pay more for a similar one today, it is for those who claimed 10,15, and 20% drop in prices last year and now hiding under a rock !

No one can now deny that the Market is resilient ..... and it will get stronger with stable prices, lowe IRs, rising wages, stable immigration, slower new housing supply and higher demand , and So Far, strong economy.

You keep waiting for another year .. while We make fresh dough out of a stable market, life is good and ticking over nicely - we are working hard in a booming economic cycle to ensure a stable future for our Children and their kids.

We are pleased that the carnage was extremely limited given the poor quality and incompetence of the Noobs who took over the country during most of the last period and the damage they are causing by opening their traps and coming up with these bright ideas.

Prices will slowly rise from this bottom, those who ignore opportunities and listen to losers, clueless fools and some economists will miss out ... as they always do !

Sounds like you got a bit of bird flu there old chicken wing

Sure you were wrong this time, and given you think this is the bottom you'll have some more bad news to come.

Some of us have sold our investments and are cashed up and ready to pounce and Im happy to be in that boat right now as there is a lot of turmoil ahead.

As you see this as the bottom, why dont you go out and put you money where you mouth is and let us know how that goes, or are your feathers a little ruffled right now.....

Well .. happy to hear that the market got rid of few noob investors or dare I say speculators like yourself ... So is that why you are talking the market down and getting nervous with any Bad news about price rise ??? haha

Shite, I hope your mate RP doesnt read your comment .. you are the Nation's enemy No.1 ... An opportunistic specuvestor who pushed FHBs out of the market and now hiding in the wings to commit the same crimes again - By your own admission, you are exactly the one who PT wishes to hang on a pole in Aotea Square !!!

But hey, good on you for cashing up ..wish you well. ... wait a few years you might buy the same properties for a bit less than you sold them for ...( don't forget what you paid your RE agent for doing that if didn't sell privately, and the commision inbedded in your next purchase price when you buy anew - hope you make enough in interest to cover these eh !!).

I have put my money where my mouth is and did not and will not sell - simply because I don't need to and that is Not why we bought them in the first place -

these properties belong to my offsprings now, after it helped us making our dough - I use them to make good money elsewhere - I also watch their value and Yield grow year after year until I pass them over to them in tiptop shape.

Some here, maybe yourself included, treat property as shares or commodity items to trade in or make a quick buck ... maybe because it is the only significant asset you have/had and only know one way of utilising it to make a return. Well there are few ways to skin a cat and selling is just a simple one not necessarily the best or the smartest !

Remember this, everything comes and goes in your lifetime, B&M remains where it is, appreciates in value, and becomes more and more difficult to acquire, that's why it is called Real Estate.

Good Luck

Youre a fool if you think anyone in this site can talk prices up or down.

Happy to say that even though I have "invested" in property it was not speculation but good decisions based on good information.

I have the freedom to purchase when the opportunity presents itself, but there is no way that will be in present conditions. There is a lot of air to come out of the balloon yet.

Thanks for the wishes of good luck, although I prefer to take luck out of the equation

You like alot on this site are relying on wishful thinking, the weather maps says cloudy with a few thunderstorms but you only see sunshine.

Spotting the sunshine in any storm is how you make money, its an art not guessworks !!

1.15m houses owned outright or on a mortgage. 5661 sales as a % of owned stock?

Sales volume are holding may be because many foreign buyers are rushing to buy before the ban is imposed.

Had a perception that government will delay the foreign ban but it seems is passing the law today ( https://www.parliament.nz/resource/enNZ/OrderPaper_20180815/38a34e95bbb7... ) and many individual / lobbying group did try hard to stop it (Though were able to dilute it).

Please check both the below news/weblink to draw your own conclusion

https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12107170

Reason is obvious, they all are worried that they may not be able to double the money (Nearly) in 3 years time.

https://www.stuff.co.nz/life-style/homed/celebrity-homes/106260203/remue...

Government should try to have policies in place to control the demand as well as to increase the supply.

Agree that foreign buyer is not the only reason but is a significant factor (Talk to any real estate agent in private ) or why else will many be upset.

up
12

Hoskin's whats the issue. Remember it only 3% so impact should be minor to nothing. Gotta say he almost sounds like a leveraged speculator.

Even if it is true that foreign buyers do not have major impact on real estate in NZ, I still dont understand why they should be allowed to buy any property they want? The rule should be that they cannot. Specially land. It is just crazy to sell your land to non residents.

Completely agree, was being sarc towards Mike and lying National party.

Mike Hosking will be feeling quite smug realising a $4.1m profit on his house in less than 3 years! Maybe he sneaked in just in the knick of time and sold to a foreign buyer?

Investors are better off now than they were a year ago in most places in NZ.
In Chch prices are stable as, our rents haven’t dropped and our interest rates have dropped approx 20%.
The thing is that it is only the coalition Govt. Of nillersthat has affected the demand for housing which is going to backfire bigtime on them!
What is happening with KiwiBuild at the moment???

Can somebody get theman2 a handkerchief

Number Of DaysTo Sell is just one load of crap.

Given that many properties get flipped over different agents,agencies or even discreetly "RESET" by the listing agent to avoid stigma of stale listing!!!

I would not read too much into this bullshit.

Will be interesting to see if Wellington fall away is sustained

I wonder why it should be any surprise that housing prices cannot continue to grow at the crazy pace they did between 2013/14 to 2016/17 (it is interesting to me that while the most recent increase in property values is definitely crazy, it is almost half the increase in 2003-2007 period!). When you go that fast, you will run out of fuel pretty soon. It will probably take between 3-6 years for any new momentum to build up. In this period, if you are optimistic you may expect prices to remain flat or grow with inflation (this has almost never happened), probably a more realistic view is that prices will fall down from their peak values in 2016/2017 wiping off some of the capital gains made during that time, but not more than 1/3 of it. A pessimistic view is probably that there will be a serious crash in the market (which means house prices revert back to their 2009 levels or worse), this has only happened once in 1970s where after a crazy jump in housing values, the prices reduced to their starting point coming 1980s. The fact is that housing prices have been increasing since 1965 at a higher rate than inflation. The question is do we expect this to change in the nest 5-10 years? i.e. no up swing is expected within the next 10 years?

Duplicated

Dumb data & dumb interpretations. The weakness with using the median to do aggregate price analysis is that it completely ignores changing market composition. If say a whole lot more cheaper apartments come onto the market, the median will likely be lowered, despite zero impact on the value of other housing stock (which may in fact have continued to increase in value). Yet to see any evidence of declines in the mid range or top tier properties.

Anything other than stratified index comparisons are a complete waste of time.

REINZ is a cheer leader for higher prices, which wreck sales that REA commissions rely on.
No-one seems to be joining dots after Interest co nz analysis earlier this week showing renters 11% worse off in disposable income terms over 12 months. That means raising deposit harder, esp as rents rising 4 times faster than average earnings and also renters (FHB esp) do not earn "average" earnings. Also, Interest and its readers (not all) seem to focus too much on cost of money and not QUANTITY of money and its velocity, and latter is falling. It peaked at 9% 2.5 years ago and is now 6%. that signals falling GDP growth and did so over a year ago. All small retail outlets and furnisher businesses suffer as housing credit growth (i.e. mortgages) contract for even grow less fast. Chinese, USA,Japan and EU are all either doing QT or planning to shortly. The 10 year free money jaunt is over. The cycle of foreign exchange flows into NZ is what over-maps the peaks in its Auckland market which is 42% of NZ sales. It peaked in 2002-3 and 2013-14. It is not coming back. China has been brewing WTO rules and being essentially un-capitalist for 17 years and now Trump is not having it. NZ is highly dependent on Chinese economic health and also has just succeeded in weakening its currency due to loose talk from RBNZ staff. That means higher import costs and lower disposable income for consumers, esp re petrol costs. Labour wants a non FIRE economy but has a pea shooter to achieve transition. GDP will be down to 2% pa by next April. Overseas buyer ban will hit high end sales in Auckland especially. Attack on negative gearing and other cost additions for landlords will not help increase purchasing by potential landlords and developers are facing problems with load rollovers. All of this means no recovery in housing prices next year. rest of NZ prices are rising and sales are falling. Owner occupation will be under 48% in next census for Auckland. FHB hope of mortgage lenders is a mirage as they are last saps to catch a falling knife as the major players leave the table early and wait for pickings after the fall, just like stocks.

Hi All, so I've been reading the comments on these articles over the past 6 months and I would be the first to admit that I don't understand half of what is being said. Here is my story... We live in Napier and have managed to save a decent deposit, but were caught completely off guard by the sudden increase in house prices since mid 2016. What caused the demand is open for debate. Mostly we saw older couples or families starting a new business in Hawkes Bay cashing up in Auckland, moving down to Napier and buying decent homes of $400,000 upwards cash. And then everybody jumped on the band wagon. Suddenly ALL houses were selling for $150,000 to $200,000 over the 2014 GVs. We could not get into the market, as a $250,000 house suddenly sold for $350,000 to $400,000. So we kept on falling behind on the amount we needed to have for a deposit. The goal posts kept moving.
Throughout 2016 and 2017 house prices kept increasing at an alarming rate. September 2017 GVs were adjusted based on sales between 2014 and 2017 and homes across the board in Hawkes Bay saw their GVs jump by $200,000. Now we're stuck in a situation where home owners were "given" $200,000 capital growth and people don't even finish renovations before sticking their homes on the market, as the increase in GV will guarantee them more profit than completing the renovations can, so why bother with the hard work? We are looking at complete hovels which would have sold for far, far less had the GVs not been adjusted to reflect what was happening in the market, since vendors are still expecting to get $100-$150k over the 2017 GVs for their homes. When you challenge an estate agent and ask them whether they are seriously marketing a dump at such an over-inflated price, they shrug their shoulders and say, "it is what the market demands". And human nature is such that we are getting more and more filled with angst, as we simply can't get a foot on the ladder. A $250,000 house was just within our grasp, but now that same house - without a single bit of improvement carried out - is considered to sell $100k over the 2017 GVs, which were adjusted by $200k. So that same $250,000 hovel can't be bought for anything less than $550k. And we've seen this happen over and over and over again. And the biggest tool of destruction out there - next to real estate agents - is the homes.co.nz website tool. If homes.co.nz says a house will sell for $100k over the current GV, then that is what buyers believe they need to offer, as vendors feel they have every right to get such an amount for their property.
Worst of all is the fact that our rent has gone up to reflect that home owners took equity from their existing homes and bought a second or third rental property, and what we are paying in rent now could have gone toward paying for our own home, had we been able to actually get into the market.
Please, in English a simple, middle income full-time working mother and wife can understand: what would you do? We have cut our expenses to the absolute bone. We are getting poorer by the day and we can clearly see that the "value" of our money (salaries which had not seen an increase in many years) is about half of what it was about 10 years ago. I can do roughly half of what I was able to do with the same amount of money 10 years ago, if that makes sense.
So please, all the clever people out there: what would you do? Would you buy an overpriced house now and hope the value will increase over the next 10 years, or would you sit back and hope for... for what? It's not like house prices will ever go down to pre-2014 levels. And it's not like GVs will ever be adjusted down to what it was in 2014. And the biggest joke of all is "new houses" to be built to meet demand. How must I afford a new house? Or is the idea that the person living in the overvalued hovel will sell at a crazy price and go buy a new house? But in the meantime I can't even afford that overvalued house he's flogging. I am a middle class Kiwi getting poorer, while I see older NEW ZEALANDERS getting richer. None of them Chinese, as far as I've been able to determine.
So, okay, go for it. Give me your best advice. Thanks in advance.