The number of homes sold last month was the lowest in September since 2011 but prices remained flat

All that pent up demand is going to chew through those listings in no time at all. If you are new here, you should know that doomers have been predicting a property crash since 2010, if not earlier. Being wrong just makes them scream louder ;)

The market remains flat...... but prices are holding.

What's new?

TTP

Just wait for 'a warm summer's evening'

https://www.youtube.com/watch?v=kn481KcjvMo

3-5 years Auckland went up, nothing else did - Now the balancing is happening where Auckland stays still while the regions catch up ; equilibrium restored.

While volumes were down around many parts of the
country, the reverse was true from a price perspective,
with 14 out of 16 regions experiencing an increase in
median prices when compared to September last year.
Of those 14 regions, 4 achieved record median prices
and 1 region equalled a previous record median:
• Gisborne: +26.9% to $342,500 (up $72,500 from
the same time last year)
• Nelson: +23.1% to $592,000 (up $111,000 from the
same time last year)
• Manawatu/Wanganui: +18.9% to $321,000 (up
$51,000 from the same time last year)
• Northland: +12.2% to $505,000 (up $55,000 from
the same time last year)
• Hawke’s Bay: +13.5% to $445,000 an equal record
with August 2018 (up $53,000 from the same time
last year).

The market's just in an itsy bitsy gully right now

I heard they're working on something like this:

https://www.youtube.com/watch?v=JOkQJm_UGM4

I love their logic that listings are a leading indicator of future sales. Someone needs to talk to them about the different between correlation and causation.

You have been consistent in your message for 8 years and 2 months. Remarkable persistence in the face of the actual market doing the opposite.

Help - if Expat's comment below is correct that you have been predicting a crash for 8 years and 2 months just imagine how much money you could have made if you had bought back then ????????

Well, the government are doing their best. Immigration is still at 60,000 plus per annum. Kiwibuild supports the high cost of building materials. All we need now is a special scheme to lend more to FHBs. That and combining Lotto into Kiwibuild.

Let me see, what else would help? I know, a tax break on mortgage interest for house buyers. A special grant for FHBs. A mortgage guarantee scheme so the banks can lend to infinity and sell the loan on to a government agency. A way of making student debt forgiveness part of Kiwibuild.

The trouble is, everything you do to help FHBs tends to capitalise into higher house prices, not lower ones. As you say, increased building, stopping net immigration, and getting rid of all subsidies would help bring house prices down, but we wouldn't like it.

I know right. What a bunch of bullshit.

Wonder if bindi and nzdan are the same person..

They try their best to be funny..

Economists predicted 9 of the last 2 recessions - Good luck if you're money is on another GFC happening anytime soon - once bitten twice shy; we are in a period that will be unusually long before another reset happens due to the GFC being the biggest event since the great depression - And even then housing, which was directly in firing line of GFC due to reliance on borrowed money, hardly fell in NZ during that time - And if you followed listing number back then they were in orders of 5x current listings - So a 10-20% increased in stock aint nothing and is more aligned with a flat, stable market from a price point of view

A lesson for all about how a bubble grows and what happens when it stops.......

Bill buys a 2 bed flat for $250k he puts $50k down and takes a mortgage of $200k at the beginning of the cycle.
4 years later Bill's flat is worth £300k he decides to move on up and takes the 100K he now has in equity(mortgage was interest only) and uses it to buy a 3 bed shed for $400K with a 300K mortgage (25% equity).
4 more years on and Bill's shed is somehow worth 500K (he's still earning the same money as before plus 2% per annum rises) but he now has 200K equity. Bill trades up and buys a house for 800K with a 600K mortgage. All is good in the world he has a great house and who cares that he'll never pay the loan back in his lifetime..... The banks feel secure they've got a 25% buffer.

Then the market changes... Bill's house goes down to 700K (not a lot) but his equity position is now 100K, back to where he was when he owned his apartment 8 years before..... Then Bill get's shitty with the whole situation, never has any cash to go out, wife is miserable too and then Bill makes the mistake of shagging a colleague from work..... Bill's on the market at a terrible time but life has to change he takes the 650k offer - removes his 50K equity but can't start again because his wife gets that in the settlement. Bill is back to zero.

Equity is a dangerous game to play if you keep magnifying your exposure.. What has happened in NZ and Aussie over the last 10 years is just a replay of the 2000's in the rest of the world. Mortgages are for life, not just for Christmas (in fact you get a shorter sentence if you murder someone).

There endeth the lesson.

Core Logic has my home value estimated at 98.67% of CV, as at 7/10. I'd happily see it and the economy drop from here if it means the COL are out in 2020.

Then what happens? A new gubmint will make your house price go up? Turn off talkback radio for a while. The Rotary Club could have been the ruling party in NZ since the GFC and your house price would still have gone up. Anything and everything has gone up. Not because of the gubmint, but many other factors, particularly the monetary ecosystem that enables it.

Ex Expat, being youre a paid up member of the National Party, is this one of their core wishes? If so, stick with your pack of sore losers. People come first, easy equity on a platter, last.

Many "property investors" analyse the property market using a "property market fundamentals" framework and have come to a very different conclusion to those that analyse the property market using a "macroeconomic and credit fundamentals" framework.

Many that use the "property market fundamentals" framework believe that there is a shortage of housing,
1) due to population growth,
2) inward migration as
a) Auckland is a desirable place to live for foreigners
b) housing in Auckland is cheaper than other big international cities like London,

which will lead to pent-up demand and will result in ever rising property prices in Auckland.

In addition there is insufficient new supply coming on board to address the housing shortfall.

Meanwhile the cost of construction is rising, so it is seen to support ever rising property prices.

Future inflation is also expected to continue and this is a reason to expect ever rising property prices and very little price falls.

The small property price fall in the Global Financial Crisis in 2008 / 2009 in Auckland gives property investors confidence that property prices do not fall very much in nominal price terms. Historically, property prices in Auckland have not fallen very much in nominal price terms in over 50 years - on average property prices in Auckland have doubled every 10 years. Many property investors expect this historical rate of growth in property prices in Auckland to continue for many more years (some even decades), and have willingly bought properties using negative gearing in anticipation of future property price increases.

Many in this camp dismiss the naysayers. The naysayers have been claiming a fall in property prices since 2003, whilst property prices have continued to advance. So given that the naysayers have been wrong to date, they have been dismissed like the boy who cried wolf too many times.

That is their perspective. That is their rational thought process. It is a very compelling argument.

.... unless they also understand the macroeconomic and credit fundamentals framework, where a possible long term super cycle credit bubble can lead to a credit and liquidity crunch and the macro-economic circumstances of that scenario ....

The innocent victims will be owner-occupiers in Auckland who have used lots of leverage and bought in the last 2-3 years - they will be potential mortgage prisoners for a number of years or collateral damage who potentially lose their financial security as they are unable to hold on through the downturn until the economic recovery (and are forced to sell in a very weak market or in a mortgagee sale). These households could face significant financial, psychological and emotional stress.

Similar to the pain and agony of those owner occupier households in Ireland in 2008/2009, in the US in 2008/2009, in Spain in 2008/2009.

Caused by profit incentives for bank managements and a focus on asset backed lending (for residential real estate) by banks on ever rising property prices / valuations in Auckland, on the back of a belief that property prices do not fall by much ...

Trump?

Ourselves for being so pig ignorant.

Gubmint? TVNZ for dumping The Hosk?

Its always someone else fault... yeah right, clearly its the fault of borrowers suffering risk blindness.

No one put a gun to investors heads and said take the risk, interest only, no ones making any more etc. The leveraged have lorded their investment greatness when prices are on the lift, but if Australia is anything to go by leverage can work both ways. Banks will eventually look after number one. Aussie banks have started already, and last time I looked they owned most of the banks here.

On a bright side it could be a great time shortly to secure a very cheap ex RE Agents lease car, just like in the GFC.

National, for letting things get to the ridiculous situation in the first place.

The Papakura properties just don't worth the asking price. Simple. I am with you on that there has not been a significant level of interest in these properties. The cap price concept is fundamentally flawed for obvious reasons. If (and when) KB starts to build houses cheaper than private sector (instead of buying from them) and asks for a return on capital that is less than the PS, then KB will help to force the market prices down. Until then, it will be either a lottery (i.e. a below market price property unfairly given to a random FHB) or stupid (i.e. Papakura).

If there was no such political urgency to show some results, the first few years of KB should have been invested in increasing construction capacity and getting the building plans right. Starting with building few building complexes for HNZ to get some experience and a more realistic sense of issues.

That's pretty crazy - maybe not indicator of a crash but prices wont be heading higher until a lot of clearing of stock has been done - i.e a couple of years of positive buying can happen without increasing price just to clear the market.

Compared to PN that has 170 properties listed and selling 140 a month - not much more than a months worth of stock there with prices up 16% - this will continue while this sort of imbalance remains

Historical inventory levels can be found here - https://www.interest.co.nz/Charts/Real%20estate/Housing%20inventory

NJ - May I ask are you in the property market and if so for how long ?

We would love to, but only if we get the full perspective of longrun data. Unfortunatley, REINZ only release that in chart form, and data points only occassionally. The data is only available if we buy it from them (which we can't afford) and we would want to release the data items in a chart, which isn't permitted. We understand and respect the REINZ position, but there is little point in us reporting details about this very good index if we can't independently drill into and verify the perspectives.

"If your whole investment strategy is "invest in this asset that has been going up for a long time because it will always go up", you are not well-prepared."

This has happened in other assets where upward price momentum has attracted inexperienced investors fueled by greed and envy, only to leave a trail of financial destruction ...

1) tulips during the tulip bubble
2) shares during the South Sea bubble
3) shares circa 1929
4) internet shares circa 1999
5) bitcoin and other internet coin offerings
6) oil circa 2008

There are many many more ...