Rising house prices have more than offset falling interest rates in 11 of 12 regions over the last six months - Home loan Affordability Reports

Rising house prices have more than offset falling interest rates in 11 of 12 regions over the last six months - Home loan Affordability Reports

By Greg Ninness

Rising property prices took the shine off falling interest rates in October, making home ownership less affordable for first home buyers in most parts of the country last month.

Interest.co.nz's latest Home Loan Affordability Reports show that the average of the two year fixed mortgage rates charged by the major banks declined to 4.47% in October, down from 4.51% in September.

Normally that would be good news for first home buyers, but in most parts of the country the decline in interest rates was more than offset by the rise in lower quartile house prices, making home ownership less affordable for first home buyers.

The Real Estate Institute of NZ's national lower quartile selling price increased from $380,000 in September to a record high of $390,000 in October, and rises were recorded in eight regions around the country (Northland, Auckland, Waikato, Hawkes Bay, Taranaki, Manawatu/Whanganui, Canterbury, and Otago.

Only three regions (Bay of Plenty, Nelson/Marlborough and Southland) recorded declines in October's lower quartile price compared to September, while it was unchanged in Wellington.

Five regions recorded record highs in the lower quartile price - Hawkes Bay, Taranaki , Manawatu/Whanganui, Canterbury and Otago, while Wellington's lower quartile price of $450,000 equalled September's record high. 

Home Loan Affordability Reports are available for each of the following regions and cities (click to view).
Northland Region
Whangarei District
Auckland Region
Rodney District
North Shore District
Waitakere District
Central Auckland District
Manukau District
Papakura District
Franklin District
Waikato Region
Hamilton District
Bay of Plenty Region
Tauranga District
Rotorua District
Hawke's Bay Region
Napier District
Hastings District
Gisborne District
Taranaki Region
New Plymouth District
Manawatu/Whanganui Region
Palmerston North District
Whanganui District
Wellington Region
Masterton District
Kapiti District
Porirua District
Hutt Valley District
Wellington City
Nelson/Marlborough Region
Nelson City
Canterbury Region
Christchurch District
Timaru District
Otago Region
Dunedin District
Queenstown-Lakes District
Southland Region
Invercargill District
All New Zealand

The net effect of the rise in the lower quartile price and drop in mortgage interest rates was that the mortgage payments on a lower quartile-priced home would have increased in eight regions (Northland, Auckland, Waikato, Hawkes Bay, Taranaki,Manawatu/Whanganui, Canterbury and Otago)  in October compared to September, and declined in four (Bay of Plenty, Wellington, Nelson/Marlborough and Southland).

That trend is even more evident over the last six months.

Although it has been a difficult winter for the housing market in many parts of the country, lower quartile prices were higher in October than they were in April in 11 of the REINZ's 12 price districts, with the rise in price being sufficient to more than offset the fall in mortgage interest rates and the growth incomes that occurred over the same period.

That meant home loan affordability for typical first home buyers has worsened over the last six months in 11 of 12 regions around the country.

The Bay of Plenty is the only region to have gone against the trend, with the region's lower quartile price declining from $430,000 in April to $420,000 in October, which combined with lower interest rates and slowly rising incomes has improved home loan affordability for typical first home buyers in the region.

But for aspiring first home buyers everywhere else, the latest figures make for glum reading.

They will be a disappointment to those who had hoped that the subdued winter housing market would lead to a fall in prices and improved affordability but they also have implications for borrowers generally.

There has been speculation that the Reserve Bank may consider easing back on the Loan-to-Valuation Ratio (LVR) restrictions that apply to new mortgage lending by banks.

But if the Reserve Bank believes that the taniwha of house price inflation is lurking just beneath the surface of an otherwise flat market, it may be reluctant to risk stirring it by adjusting the current LVR settings.

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Strange, I thought house prices had fallen off a cliff... Oh, that's right, they absolutely haven't.

I thought the RBNZ's latest financial stability report was due yesterday - very keen to see what they say about LVRs.

Not yet. Again, look to how things are playing out in Australia


BLSH - do you think it would be unacceptable for house prices to move towards an affordable level?

That is a desirable outcome which, in my view, will need to be achieved by building more affordable terraced houses and apartments, combined with incomes rising faster than inflation over time, not by hoping for a property market crash based on nothing more than emotion and whatever your inner monologue happens to think about the troubles that Australia and China may or may not be experiencing.


Our two biggest export markets are facing serious headwinds and BLSH has an unsubstantiated theory NZ will sale right on past them. For starters, look at what's happening to GDT. Do our Dairy Farmers not matter as long as we can sell houses to each other?

BLSH, step up to the plate and show us your facts. Who is our White Knight next time around? I very much doubt you knew in advance why NZ house prices would recover so spectacularly post GFC 2008. They were rather scary and uncertain times. Complacency often reins when the unseen cliff is nearest.

"Based on the overseas experience discussed, it would appear that a modestly negative OCR could be implemented in New Zealand. The key consideration is how negative the OCR could go before different segments of the financial market begin to hold cash rather than negative yielding securities. At that point the transmission of further OCR reductions to the wider economy would be hampered"

BLSH, in this scenario, our export markets would be in serious trouble. Is this your White Knight? Interest rates are already near ground zero whilst at the height of a bubble. Cheap money has yielded less and less productivity with each passing cycle.

Show us your facts.

"Cheap money has yielded less and less productivity with each passing cycle." Evidence? And I mean actual evidence, not just your usual ramblings/opinion.

Are you questioning that the marginal product of capital isn't decreasing?

No. I asked for evidence that cheap money has yielded less and less productivity.

So you need proof that MPK is a concave function?

..Have you thought this question through?

Excuse me, quiet in the cheap seats please, don't derail the thread. I asked RP a question, and you're doing a rubbish job of answering it on his behalf. I'm familiar with the law of diminishing marginal returns, and that wasn't my question.

Cool. So you know that an additional unit of capital results in relatively less output, given the production function.

Tell me, what about this does not signal diminishing marginal returns?
"Cheap money has yielded less and less productivity with each passing cycle."

DMR is based on only one factor increasing and other factors remaining the same e.g. buying more seed to plant in a fixed plot of land, in such a case doubling the seed will not double the crop. However doubling the seed and land would.

If cheap money allows a growth in all factors of production (e.g. buy more seed AND more land) why would returns diminish?

I'll let you think about that one.
Something about finiteness.
PDK rambles on about it all the time.


[I'm trying to be more like you and make snide comments without answering a question.. Pretty easy so far]

That perfectly answers your question.
You cannot always double factors of production because there are finite constraints.

So your waffle about DMR was off topic, now your resorting to claiming humankind has reached peak production as we have run into input caps for every industry known to man.

I am definitely going to need evidence of this (i.e. i'm calling BS).

HeavyG and BLSH are perfect examples of Dunning-Kruger.

HeavyG, do you regret trying to teach a monkey how to use a calculator? Sometimes it’s more amusing to watch them pretend how to use one.

DMR when all factors of production are increased? Yes, good point nymad. The reserve bank’s latest round of loose monetary policy pushed New Zealand to the brink of the country’s finite resources? Sure nymad, very clever.

interest.co.nz should be paying me for fact checking these pseudo intellectuals.

You wouldn't make much money.

Well played sir.

Well played? Are you serious? nymad’s only points were own-goals.

Except where that additional plot of land is on the other side of the province to your production facility. Or the nearest suitable plot of land is only available for lease rather than sale. Your returns are diminished due to the added cost of transportation, or overheads.

OP by RP claimed "Cheap money has yielded less and less productivity with each passing cycle."

BLSH asked for evidence.

Nymad piped up with DMR.

I pointed out that doesn't fly as DMR assumes only increase in one factor of production.

Nymad changes goalposts to finite inputs.

I call BS that world is at peak production.

Nymad throws out toys and goes ad hominem,

You come in with some weird anecdotal fairy tale (why I cannot fathom).

AND none of this actually answered the original request to justify RP's claim that cheap money is less productive.

I always thought RP was a woman


BLSH, QE, (lower interest rates) has yielded less productivity here; https://www.ftadviser.com/investments/2018/03/06/bank-admits-qe-policy-h...

The key question is, what's happening to productivity and interest rates at a time when Central Banks are trying to offload these Trillions in securities? Has QE raised productivity worthy to be labeled as sustainable medium/long term? - NO.

Stop trying to create sideshows. Show us your facts that support a sustained and prosperous recovery post 2021 please.

Low interest rates leading to UK pension deficits leading to less investment in the British economy is a very niche and tenuous argument, but OK. Was expecting something more relevant to NZ. I forgot that Sydney is Auckland is Beijing is London.

I simply think that the bottom of the market will be about 2021/22 based on the timing of cycles to date. I've never used the words "sustained and prosperous recovery". I've just said that this is when I think prices will start to rise again.

BLSH, "Central bankers often bemoan the current state of low productivity and inflation. They should look at their own policies as the main culprit. As they should know better than anyone, there is no such thing as a free lunch, and artificially low interest rates are no exception"


BLSH, not only do you belong to class recovery 2021, you also belong to the club of "banks will never shift goal posts in uncertain times" What happens overseas is totally relevant to NZ.

Hi Crash-Crusader (aka Retired-Poppy),

Seriously, I'd keep my head down if I was you.

First Home Buyers are baying for your blood...... what with all that crook advice you've been handing out.

Shooting from the hip has sure got you in a lot of trouble.


Ha-ha-ha :) Ooooh, I'm paralyzed by fear. Since April 2017, Albany Heights – down 7.74%, Lynfield – down 6.86%, Albany Heights – down 7.74 %, Lynfield – down 6.86%, Pinehill – down 5.84%, Waitarua – down 5.54%, Golflands – down 5.53%, New Lynn – down 5.41%, Totara Heights – 5.34%, Flat Bush – down 5.26%, Sunnyhills – down 5.05%, Henderson Valley – down 4.92%, Pinehill – down 5.84%, Waiatarua – down 5.54%, Golflands – down 5.53%, New Lynn – down 5.41%, Totara Heights – 5.34%, Flat Bush – down 5.26%, Sunnyhills – down 5.05%, Henderson Valley – down 4.92%.

Hi Crash-Crusader,

In fact, I've just checked those figures and most are wrong!

Further, most are small non-descript localities that few people have even heard of.

In any case, you're at your old ploy of cherry-picking again.

What's new? (Time you came up with a new crusade - or, better still, something meaningful.)


A little evidence for our resident cherry picking Agent, Enjoy :)


"Auckland homes with CVs higher than $1 million have typically been selling for prices 1-to-4 per cent below their CV"


Hi Crash-Crusader,

Sorry - but your "evidence" doesn't support/validate your original post!

Advice to you: "when you're in a hole, stop digging".

You do owe first home buyers an apology.


The following apology is for FHB's. Sorry if you've been caught out by Agents such as TTP. In future, I suggest perform background checks. Patience is key, save hard as more reductions to come.

Right now, it's cheaper for you to rent than to own; https://www.interest.co.nz/property/rent-or-buy

With Barfoots posting success rates now in the 20s, I'd suggest the FBB is now pulling down the remaining areas. As an Agent, you are more accountable to FHB's ;-)

Did you know that 1/5th of homes were sold to foreign buyers? I'm betting you thought it was only 3/100.
; https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=120...

I will be keen to see how current terrace homes hold their value over the next six months. What I want is a 3 bed 2 bath 150sqm terrace home, but that doesn't exist in Auckland for under $900K. Build them en-masse, build them everywhere and watch the prices come down.

If we confiscate every rental home in NZ and offer them to FHB at $1 reserve auctions you will definitely get your 3 beddie in Auckland.

You can get a detached house in Pokeno for $650k, what are you waiting for?

Wow, a house in Pokeno should be worth no more that 300k.

I love the fairytale game, I say $24 and a bag of sherbert.

I'm going to go across the street and get you some orange sherbet.

I'll take your word for it. In which case I'm confused, shouldn't first home buyers be able to afford their own home and work in Auckland?

Dunno about that.....

Pokeno is up and coming these days.

Lots of potential....... "The Ponsonby of the South".....

Splendid climate.


The Manhattan of the Northern Waikato
Silicon Milk Hose Valley

Someone will be along shortly to remind me of the huge potential of Pokeno because it has a road leading in and out of it.

Gumboot stilettos.

Nah that road was 25 years ago. Today Pokeno does well by being the closest part of the country to spend-like-a-drunken-sailor-who-has-won-the-lottery-cashed-up-idiot Council of Auckland, without having to pick up the tab. For instance Auckland Council is spending rate payers money to create a new industrial park of 5000 jobs at Drury, 15 minutes from Pokeno. Auckland Council plans to more than double the size of Pukekohe, creating even more jobs for Pokeno. Pokeno gets job development spending for free and no fuel tax.

But there's a road. It has a lot of potential. Up and coming. The grass is green there. The atmosphere is a fantastic mix of oxygen and nitrogen which is great for breathing. Gravity there is a comfortable 1g. Invest now!

So we agree, a first home buyer could buy in Pokeno for circa $400k and use that road to get to and from work in Auckland. So, why all the Kiwibuild and first home buyers locked out drama?

So the answer to buying an affordable home for Aucklanders is in fact to buy in the Waikato region?

Why don't we just go the whole hog and put in checkpoints at the Bombays and shoot anyone under 65 trying to sneak in?

There are a few new builds like that in Mangere Bridge going for $765,000.

Not at 150sqm. 120sqm if you're lucky.

Hell, $750k for 100sqm is common these days.

They are listed as 153sqm.


Interesting; thanks for the link . Ignoring the garage counting as the floor area (you'd rather have the parking than not have it), this seems to indicate that the market understands that people aren't really interesting in really living in anything much smaller; this is basically the minimum that you should be getting for that price in Auckland. Tells me that a lot of new build developments have some reality checks on the horizon.

Can't see that place being 153m2. Must include the deck etc. Can't properly read the measurements but looks to be roughly 4.4 x 11 x 2 = 96.8m2. Am I missing something?

Looking at the plans on the re agents website they are almost readable. 5.6 x 13.7 x2 levels. Land is 165m².

Do you agree that markets are reflective of society and sentiment?

Thats right BLSH but the lemmings on this site are starting to gather on the clifftop. If they cannot talk the market down, perhaps jumping might work ?

Carlos67 - have you considered that the sentiment provided by commentators on this webiste could be reflective of society and that you may have missed a change? Or by holding a fixed position means that anything that doesn't fit with your paradigm = fake news?

Old man yells at cloud.

The views of commentators on this site are not reflective of society as a whole.The site is WAY out of balance and will probably only get worse as the minority here get bashed. I'm surprised some people bother posting here, they are suckers for punishment.

LOL is that seriously what you think people are doing? The market is not going to go up and down based on anyones ramblings here.

House prices have proven far more resilient than many contributors here ever dared believe.

In April 2017, I said that anyone who thought there was going to be a major downward correction in (Auckland) house prices should buy a rocking chair, dressing gown, pair of slippers and pipe - as they would be in for a very long wait.

I stand by this projection with confidence. Prices will fluctuate within a relatively narrow band in the foreseeable future - but the all-important structural factors (including demographic influences) will preclude any so-called "crash".

First Home Buyers - the sooner you get in the better. Make no mistake about it.

Finally, you only have to peruse blogs like this one to appreciate the vast level of interest and enthusiasm that NZers have for property. That's not about to change.


It would change if it takes a dump. Shares were very popular just pre 87. The fundamentals of Chase corporation and a 3 bedroom shitbox in mt roskill are surprisingly similar.

I have some Goldcorp shares at a very reasonable price if you are interested?

I bought some Jedi Corp while I was at school. Never did work out what they did, but it was a cool name.

House prices are crashing and will continue to crash, this is the point, and people need to understand it before they waste all their money on an asset that keeps on crashing. I get all my information from trusted commentators on interest.co.nz and house prices still have another 30% or more, to fall before they become affordable and people will start to buy them. They will then stay affordable, because that is how the property market works, according to the trusted coomentators on this website, who have spent a lifetime studying the property market!

Just what the market needs! Less buyers....

"average of the two year fixed mortgage rates charged by the major banks declined to 4.47% in October"
Wow, that seems so expensive now. BNZ at 3.99%!

The Reserve Bank will be well aware of the current plummeting of prices in Australia, and the predicament the RBA finds itself in with already very low interest rates. Definitely a wait and see situation at the moment.

Kiwi build is open to migrants with residency, we are binging in 60-70K of migrants each year and have been doing so for many years now. Kiwi build is not big enough to house all the migrant hordes piling in from the third world.

headline: Rising house prices have more than offset falling interest rates in 11 of 12 regions over the last six months - Home loan Affordability Reports

However...this article only reviews the bottom quartile of the market, no mention of the the other three quartiles, why?

Because the article is about affordability for first home buyers and the lower quartile price is the segment of the market that's most relevant to them. You can look at movements in median prices via our coverage of the REINZ's monthly sales stats - here's the one for October: https://www.interest.co.nz/property/96868/octobers-house-sales-volumes-155-versus-october-last-year-while-median-selling-price

or track them via our median price charts which are here: https://www.interest.co.nz/charts/real-estate/median-price-reinz

Unfortunately we don't have upper quartile price data.

Why no upper quartile price data?

That's been the methodology of these reports for a long time - lower quartile is probably most representative of the kind of house first home buyers are looking at. Look elsewhere if you want data on other quartiles.


Market has dropped 70% as predicted but the spruikers are cherry picking sale prices. Today bottom quartile prices, tomorrow sales between the 9th and 21st percentile, etc...

I believe it is because they have targeted the report at market entrants, 'how expensive is it to get on the ladder'.

Something from yesterday. https://www.rbnz.govt.nz/statistics/m13

FHB's would have been better protected if the RBNZ had kept the LVR limits to investors at 60% rather than raising them to 65%. If the RBNZ were serious about financial stability and social equity they would adopt serious measures, such as those in Singapore (see here)

Even better , up the LVR to 100% for specuvestors and require them to sacrifice their first born child. I'll bet that'll slow up investor buying.

They did sacrifice their first born child, and their second, third... well, they sacrificed their children's purchasing power and livelihood by turning property from somewhere you lived and raised a family into a speculator's paradise.

Go North young man

Any idea on the origins of that saying? American pioneers?

The Village People?

Yes, American pioneers, encouraging settlement in the frontiers.


"Rising house prices…" but...but…but… house prices are crashing, are they not RP, Nic, PP2F etc ???

They will be right eventually, as every market has it's ups and downs. But it's hard to call them oracle's when they have been saying it for years now.

Broken clocks that are right twice a day and blind squirrels that happen to find a nut.


Technically I shouldn't be adding new comments until I'm un-jinxed, but the DGMs would love that so I'm going to flout the rules.

I un-jinxed you straight away by repeating your name 3 times. Keep up the good fight.

Even a broken clock is right 2 times a day:)

It's not like the stock market, although people have been treating it as such. A property bust when it happens will take at least 2-3 years to play out when it starts, and property prices are not yet where they were in Ireland 10 years ago. What I see is the Auckland and Christchurch markets pretty much stalled, perhaps rising a very little in places, and other smaller places still rising.That does not mean there isn't going to be a crash.Affordability is the key factor. Property markets NEVER stay at the affordability ratios there are in Australia and New Zealand, and there's hardly ever (never?) a soft landing when they get this out of whack.

Yvil, BLSH, Sydney and Melbourne has an affordable housing crisis too. Are their prices crashing? In a few short years you can view what's happened in the rear vision mirror. Only then, using the same limited understanding, you can attach a label to it ;-)

Hi Yvil,

When the DGM talk of "house prices crashing" it's actually a corruption of the English language.......

Effectively, they try to invent new meanings for existing (well understood) words.


I wonder if the lower quartile average has increased because the shit properties are no longer selling?

They've been renvoated out of existence.


NZ homes are small, gross, rotten and rundown. Take renting for example; it's actually cheaper in the long-run to pay more for a semi-insulated rental than cover the extra heating cost elsewhere. NZ real estate to me is a joke. The media here are very sold out to the property lobby. As such I believe Kiwis are pretty brainwashed/deluded concerning valuations.

Australia boasts some of the largest properties in the world, an excellent climate, awesome wages, etc. Why get stuck in NZ if you're a FHB? Australia is currently taking it on the chin and dealing with their overpriced property - which is often both modern and brand new. NZ is NOT facing the FACT our property is overvalued, let alone the FACT our housing stock is in serious disrepair!

Catch the next plane out of here FHB, score yourself a lovely Australian home, job and lifestyle! NZ is becoming more of a hole by the day.

Zack you are right!!

I am staying with family in Warnnambool, Vic and you can buy a house and land package of 3 bdrs 2 bthrms 2 car garage, fixed price for 344.000.

Plenty of jobs going.

Kiwis can now access TAFE free like everyone else so the kids don't miss out.


Yes, but it is Warnnambool. That should explain it.

Nice place to visit, not sure about living there though, after week 3 i think i'd be comatose. My aunt did for years, now moved to Geelong for better work prospects.

I don't think you can compare the NZ housing market with Australia. NZ's market is more like Hawaii with Australia being like the US Mainland.

"NZ homes are small, gross, rotten and rundown" - you don't need to compare it even with AU ,unfortunately even bunch of third/second-world countries keep housing in better shape

Before you settle in Australia, don't forget the snakes, crocodiles and poisonous spiders ....... and that's just the ones operating in the CBD's of the big cities - before you head for the outback.


It's called a 'gym membership' and running around the park - no interest in the Aussie outback. I'll take my chances with crocodiles in the "CBD's of the big cities" LMFAO.

As for snakes and poisonous spiders - more Australians die via horse accidents each year.

How many Australians are stung by Real Estate Agents? https://www.stuff.co.nz/business/world/108166699/prestige-australian-rea...

While i do hope prices will go down we are a little different then the Aussie market if you look at Australias national crane index : https://www.zerohedge.com/news/2018-11-16/australias-national-crane-inde...

They really did funnel a large amount of new supply through a ever smaller pipe.

If the council keeps moving RV everytime by 40% to 60% - it sorts of creates a false expectation. In a way Council is responsible for the crisis or should come out with a declaration that RV has nothing to do with the value of the property.

Many properties are not worth even 20% below RV in today's market and in some property (This is rare) the valuation is much less than the true value and this RV is exploited by all real estate agents to sell the property unless the RV is low.

RV is exactly what it means: Rateable Value. A means of apportioning rates across the property tax base, and it is appealable. Sure, it's based on the market at the time of valuation (fewest possibilities for legal challenge) but what it is NOT is a pricing signal.

If you want a Universal Pricing Signal which moves the price floor on every property in an entire region, look no further than the 'Welcome Home Loan' or whatever it's called today. This had the instant effect of inflating values (which in many cases were some small fraction of the WH loan limit for the area).

Of course, no-one objected to this: they looked around the side of their now-massively-revalued shack, spotted the ATM newly bolted to the side, and commenced withdrawals. Instant gratification, long-term woe.

But then, we all is human - well allegedly - I'm 65% fish genes - and everyone was doing it. But now That party's over.....

You've been round here long enough to know that while in theory it's not a pricing signal, reality is a different beast. I don't think Auckland councils webserver crashed on the day they released the RVs from people just checking to see what the rates bill was going to be.


So I recently mentioned that I broke my mortgage down to 3.95% with no break fee. I have told many friend and colleagues, and so far, ten out of eleven were successful (albeilt with one only getting 3.99%). So the idea of mortgage rates now being at 4.47% would seem to be a myth. Heck, one person broke a 4.5% mortgage with two years to go!

Christchurch lower prices rising just as The Man has been saying!
The first home buyers know that ChCh is growing and need to be in now or they won’t be able to buy in 2 years time as prices are continuing to rise.
Still very undervalued so be in!

Mostly old, rundown dog boxes that have had an EQC paint job. Let the buyer beware - it's been musical chairs but with Certificates of Title for years down here.

Properties here aren't as mould ridden as the likes of Wellington, but hell, many are pushing 80+ years of age! Unless you're buying in elite suburbs like Fendalton, (which has earthquake damage anyway) the houses you look at to buy have likely never been property renovated.

Again, let the buyer beware because down here they don't do refunds! As Is, Where Is - NO quality guaranteed!

Zack, to be fair, you really haven’t got a clue!
When you know what you are talking about, you would be able to comment.
Most houses in ChCh would be in far better condition now than Auckland and Personally don’t own any anywhere near 80 years old.
No weatherboard homes, all permanent and solid and can stand up to any earthquakes we have had so far.

Don't know what city you live in THE MAN 2 - I live in Christchurch. I didn't say anything about Auckland properties. But two things are for sure; (1.) there are plenty of geriatric aged properties in Christchurch AND (2.) dog boxes that are a decade or two old.

Pretty sure I do have a clue and the immunity idol to boot - see you at the next elimination round, lol


Straight to the point Zack. Like your thinking

There is one really big assumption underlying these "affordability" reports.

That everyone entered the market as a first home buyer when they were ~25-27 years old... having saved 20% of their income for the first 5-6 years of their working life to amass the deposit required.

I think the proportion of 25-27 year olds capable of doing that would be <5%. The number that actually follow through would be a fraction of that.
When I was that age I was in the top 1% of earners for my age, there is no way I could have saved 20% of my income between rent, food and necessary bills.

All the remaining "affodability" analysis in these papers is totally realiant upon the Capital Gain that everyone must have embedded in properties they purchased at that age.

These reports are works of fiction.

Agreed Cmat. There's little flexibility in here for career setback, redundancies (which now attract no payouts), career changes etc. Unfortunately other constraints in life (having families) are on biological time frames, not economic ones; so in reality, there's a small window in which one can realistically make a massive dent in a deposit. It was less of an issue when rents were low, but that's all but evaporated now.

...messy breakups, murder most foul, life changing magic mushroom trips, swedish women, free diving, pranayama... they all affect the economic activities of daily living. In fact the allure of property seems to wane in their collective incandescence.

Sure a trip, but a bad one. more often at that age for the current working FHB gen it is student debt, loss of affordable long term rental housing, career plateaus forcing massive shifts, biological time limits on children (seriously a woman risks her's and the child's health significantly more waiting longer into the 3rd and 4th decade), poor medical health and medical support due to stretched health infrastructure, failed businesses & unpaid "volunteer" work required by employment, erosion of working conditions, etc. For that generation if they have a job with a single company for more than 3 years and can afford to save and pay for insurance they are doing well.

I think the reality for most 25-27 year olds is there's better things to spend their money on i.e. social life or the constant bombardment of new iphones and tv's on finance - the price of money is SO much lower than it used to be so saving is less of an incentive and borrowing improves an individual's quality of life - advertising is very sophisticated.

Televisions are going out of fashion.

Indeed Zack. There's more accurate information on You tube about New Zealand property than you will find on the TV.

Double whammy - interest rates make saving unattractive compared to spending relative to inflation, but also causes massive asset bubbles which in turn diminishes purchasing power and your ability to save towards meaningful goals like house deposits.

Thanks a bunch, boomers/Gen Xers.

No, do not lump us Gen Xers in with the Boomers! That's harsh. We identify with Millenials :)

Plus more and more financial investment scams to catch the unwary as the cost to set up and go fishing from a foreign country is ridiculously low. Unfortunately instead of access through trusted gate keepers and advisers literally any variety of scam can catch the unwary. Many earlier gens could rely just on safe savings accounts, but today they perform worse than inflation. So many are pushed into financial schemes, risk & contracts beyond what the NZ primary and secondary education has prepared them for, (definitely not a maths class related responsibility, contracts & legal closer and yet just as far from social studies lessons).

Today's b&t
Morning 3 out of 17
Afternoon 6 out of 22

With todays Barfoots 23% success rate, the winner of Pragmatists 19th Nov sweepstake is; https://www.interest.co.nz/news/96937/investors-turning-away-us-treasuri...


We have to wait 48 hours, I think, before the auction is over. I still have a chance to win.

Nope, was strictly under the hammer sales.

Well, that's just BS! And means nothing. I demand a recount!

Typical Dr Smith!

Were these the under the hammer sales? And not including 9 Burnley Terrace in the afternoon, since it was not on the schedule on Monday, and was added sometime and already marked as sold before the auction happened.
If so 9 sales is a tie .. I had 8 sales, and RP had 10.

Out of interest, what was the other withdrawn sale for the morning session? 2/57 symonds was one, but there were 19 on tthe page on Sunday.

the 6 sales included the Burnley terrace.. there was no price against it, just a sold sign.. will be interesting to understand why it was included in the auction list if it was sold prior?? to increase the sale rate from the 1s to 2s???

the morning sales was not up on the monitor, only on paper.. so not sure which one was withdrawan

Hah, so excluding burnley terrace that is 8 sales. I win!! Sorry R-P, you got out DGMed by me :P

Didn't vote - too pessimistic an exercise. Yikes, it must be painful to take to the podium these days.

136 Waimumu Road.. bought a year ago for 725.. sold now for 680... 45 plus agents fee at least 70 k loss

Sold for 6.5% above RV though.

Yeah, as I said earlier take your blinkers off. The last buyer lost 70 k. And you like a kid with a lolly. ." But it sold over rv)"

Btw, when is the last time a decent looking 3 bed house on waimumu road sold for 640?

So blindly comparing with rv is just dumb

No, you're dumb.

Currently we can match this fairly rare example of loss, if indeed it really is a loss, with many examples of gains. Also, during the slow down cycle of the housing market, if you sell a house within a year or two of buying it you are not going to make anything and are likely to lose. This is how it has been for most of the time I have been observing the market here in Auckland.

Guess you haven't looked in the mirror for sometime, you will see what dumb looks like

Seriously, why on earth would anyone pay $680k for that property in Massey, let alone $725k last year.
Can not see any value in that box!
You could own a brand new over 200m2 executive home in a new subdivision in ChCh where living standards are superior!!

That's how dumb people are. . Including the market

Cos they went to a seminar and got brainwashed by "it always goes up", "let your tax pay it off", "interest rates will never go up" etc. Or they brought in some questionable cash and have cleaned it via this transaction. India had and still has a significant, and i underline significant, cash tax avoiding economy. The Indian Govt has tried to eliminate cash, and the result was a lot of it has been exported in suitcases to various places including NZ. Before the mods delete this post, that is a direct quote from and young Indian friend whos family and friends have done exactly that. And then there is the Chinese...

Laundered money. Still a 100% gain. Couldn’t be more blatant.

If these low clearance rates continue then it's putting downwards pressure on the prices, so it a good thing. And it seems to be happening. Two of the properties that weren't sold at last week's auction I attended were put on the market with a price and have already dropped their asking prices. One from 1.17m to 1.07m, the other from 995 to 945. And that's a week after they failed at auction. Will be interesting to see where they are in the first week of December.

what are the addresses of those ?


Whoops, that'll teach me for replying before my first coffee and without the data in front of me. It was from 1.995m to 1.950m. But whats a million bucks between friends.

And https://www.barfoot.co.nz/765396 went from $699k after the auction to $675k now.

And https://www.barfoot.co.nz/765500, has RV and homes.co estimate of ~810k, asking $639k. And isn't that the famed DGZ?

There is another one barfoot that failed at auction last week, had a price of 799 for 3 days now at 775..

Tirimoana road. Te atatu

Another at Manhattan heights, glendene was low 8s now 799

yeah, i'm sure there are plenty if you go trawling. Those examples were all from the one days worth of auctions.


I am sorry to hear that you didn't vote. It may sound pompous,but I think that it's part of our civic duty to vote,however much we dislike many of the alternatives on offer. Democracy is pretty hardy,but not indestructible.
If more young people had voted,we wouldn't have Trump.

Oh no, we would have crooked Hillary

Pragmatist, I admit defeat ;-) Next time, I will aim much lower.


How can there be a housing shortage when the fertility of NZ women is less than 2 or has been 2 and has been so for the last 20 years?
loading up on people breeding like rabbits from the third world has left kiwis homeless and impoverished because they pay to much for their houses due to a government inflicted housing shortage. The money they pay for their homes comes from foreign owned banks which results is massive banking profits that leave NZ and the result of that is Kiwis have little disposable income and have become a poor nation of people with a poor standard of living, some kiwis don't even live in a house these days, they live in station wagons because NZ now has the highest homeless rate in the OECD..

While i agree immigration has been at cultural identity changing levels, the 4 main NZ banks are just subsidaries of Aussie banks. Accordingly a mortgage or banking with them has the same impact (profits overseas).

Immigration and the change it has wrought in such a short time is the real issue. Many are happy to live in 50 sqm appartments, or multiple familys stacked to a house as they are from very high density environments. Simply the traditional kiwi way of life has been forced to change or move elsewhere. So 500k kiwis, mainly young and educated, are now in Australia. We have replaced them with mainly chinese and indian immigrants. Some are great. Some should be returned to sender.

I personally think we need more working people here, but the speed and scale that it has happened is wrong and gives perspecitive on Maori comment regarding european invasion jn the late 1800s.

If you double the population you have to double the amount of housing, water supply infrastructure, electricity supply?
These people did not bring over another Wairakei Geothermal power station, Manapouri power station and all the hydro that NZ currently uses. They didn't bring over more houses, they didn't even bring over another new Fisher and Paykel with high paying export revenue generating jobs based on technology they invented to pay for all the infrastructure they require. They took existing houses from Kiwis, the existing electricity infrastructure and water supply infrastructure and the existing jobs driving down wages. NZ has a housing crisis because of poor immigration policies. In the USA Trump is sending the Military down to stop the people caravans, while in NZ our government has abandoned NZ born and bred citizens to create a housing shortage and future electricity and water shortages.

Our biggest export revenue generator was Home Ownership but Labour snuffed that one out with the Foreign Buyer Ban.

If you double the population you have to double the amount of housing, water supply infrastructure, electricity supply?
These people did not bring over another Wairakei Geothermal power station, Manapouri power station and all the hydro that NZ currently uses. They didn't bring over more houses, they didn't even bring over another new Fisher and Paykel with high paying export revenue generating jobs based on technology they invented to pay for all the infrastructure they require. They took existing houses from Kiwis, the existing electricity infrastructure and water supply infrastructure and the existing jobs driving down wages. NZ has a housing crisis because of poor immigration policies. In the USA Trump is sending the Military down to stop the people caravans, while in NZ our government has abandoned NZ born and bred citizens to create a housing shortage and future electricity and water shortages.

The irony is that the buyer support has come from the first home buyers themselves, rather than investors.

Too right Epic.

Partner and I ticked the 8% Kiwisaver contribution box years ago on average salaries. Funds; one conservative, one growth. Fast forward to now, and behold! Apparently we are fantastic 'savers' alongside every one else our age, and prices increase in lockstep.

With the foreign marginal buyer now removed, all the government has to do now is remove Kiwisaver withdrawals. We would then find the true market value of these asbestos ridden, lead contaminated, mould infested rotboxes, and howls of indignation from people who actually have to save. But that is a lesson NZ needs, as shown by our poor savings rate comparative to other OECD nations.

Wont happen though.

Retired Poppy - Keep up the good work, you deserve credit for your fight for the truth ! I love to see how desperate the real estate industry is getting (TTP). They have gone into overdrive because they can see the Avalanche is about to fall like our Australian neighbours . We can smell there fear. Just remember R.P. that every time Agent TTP comes at you with his desperate spin we all see you diligently dissect him peace by peace with facts and figures . We are the Truth and Reality Merchants !!! (TRM).

Tag team of RP & Nic. Calling the paid spruikers out!

39 Hawera Road, Kohimarama Nice house, very nice house. CV 1.7 Million. Lowest sale price estimate on homes.co.nz = 1.61 million. Actual sale price = 1.485 million.

And a few houses down and across the road at number 56 which failed to sell at the same auction. RV $2.25m, Homes Estimate $2.08-$2.34m. Asking? $1.89m.


Zachary boy will think you'll are cracked to quote these factual cases. .

Built in the 1950s. No sales data. Site value based on m2 which likely can’t be used as pie slice section and not a favoured area in the suburb. There’s no mystery why it isn’t selling anywhere near CV. You would have to demolish the house and then redevelop, but into what? Prime prices are paid for 800m2 easily subdivisable sections that can have $2.5m houses built on 400m2 sections with North facing aspects. I don’t think Zachary would be fazed in the slightest.

Indeed Ex Expat, it looks like a costly demolition and that section shape is extraordinary. If it was a nice, flat, rectangle it would get a lot more.

Both the Hawera examples are hardly executive homes!

But they’re good examples to cherry pick if you want to push a narrative.

First home buyers do not despair, and wait! ANZ Bank now sees prices in Sydney and Melbourne falling 15% to 20% peak-to-trough. https://www.businessinsider.com.au/australia-property-downturn-rba-cash-...

I think the top of the market was about September 2016. Back then upper quartile houses in Auckland were selling above CV. Take 39 Hawera mentioned above. In Sep 2016 that probably would have fetched 1.8 million so it's a 17.5% fall to today's price. That house is depreciating by about 160K per year. Question is where is the domestic market price floor? because no many people can pony up with a deposit for a 1.5 million house.

All supposition. In parts, Hawera is a below average street in Kohi. #39 looks like cross lease title with an old house and the only sales history is 2011 with a S13 (non arms length - probably inter generational). The CV value is in the land, which is likely unrealistic given the title type and unattractive site. In other words we have no idea what it would have sold for in 2016. One we can comment on when/if it sells is 72 Melanesia. That last sold in 2016 for $2.1m and is getting little interest at $2.39m. It is a constrictive zoning and Has a southerly aspect. For your theory to be correct that will have to sell for $1.733m, a loss of $367,000.

39 Hawera is definitely a cross lease according to QV. Last sold in 2011 for 683k. If it got more than 1.4M then that is a great price. No sign of depreciation there! That is top dollar to date.

People need to remember that cross lease reduces the price around 500k in the best areas. However this doesn't reduce the RV. So if not a cross lease it may well have got 1.8M+.

"However this doesn't reduce the RV"
How so, ZS?
It seems crazy that the council would ignore that in their assigned valuation.
In theory your rates could be the same, but not the RV.

Perhaps I should have written, doesn't reduce the RV as much as you would think. I have noticed in my area cross-leases tend to sell well below RV and freehold above RV.

I ran into this personally where I had a cross-lease house with an RV of 2.2M however it's true market value was only 1.5M. I did manage to challenge it and get it reduced to 1.8M. The thing is, if you joined the other half of the cross lease and sold it as one freehold parcel, the land value would have been close to 4M.

NZ houses too expensive? Try a condo unit in Singapore instead: