REINZ median price hit new highs in six regions, but not in Auckland

Property

REINZ data shows the housing market remained steady in November with sales volumes up slightly compared to a year ago

14th Dec 18, 9:47am by Greg Ninness

The Real Estate Institute of New Zealand's national median price for residential property hit a new record high in November, but Auckland's median was down compared to November last year.

The national median price was $575,000 in November, up from October's record of $562,000 and up 6.5% compared to November last year when it was $540,000.

However in the country's largest real estate market, Auckland, November's median of $867,000 was up slightly compared to October's $864,500, but down 1.5% compared to November last year.

The figures show that median prices are continuing to rise around much of the country, but have remained largely flat in Auckland since dropping back slightly from the record high of $900,000 set in March last year.

Six regions achieved record high median prices in November - Northland where the median was up 21.2% compared to November last year; Waikato +8%, Hawke's Bay +11.9%, Wellington +11.5%, Tasman +19.2% and Southland +3.8% (see the interactive charts below for the full regional prices).

The volume of properties sold was also slightly up compared to last year, with 7286 residential sales in November, up 2.6% compared to November last year.

In Auckland there was an even bigger increase in sales, with 2039 residential sales in November, up 3.9% compared to November last year.

For the rest of the country excluding Auckland, sales volumes were up 2.1% compared to a year ago (see the interactive charts below for the regional sales volumes trends).

Overall the figures suggest the market was reasonably steady in early summer trading, with sales volumes running slightly ahead of where they were at the same time last year, and prices either rising or flattening out across the country.

Median price - REINZ

Select chart tabs

Source: REINZ

Volumes sold - REINZ

Select chart tabs

Source: REINZ

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143 Comments

by bilbo | 14th Dec 18, 2:55pm 1544752547

Christchurch isn't looking good TM2. I just moved out of a chch rental which had no rent increases for 3 years, now they dropped the price 6%. The place was still empty when I went 'round to put out the rubbish bin. And the capital gains are nowhere. Oof that's gotta hurt especially with the ring fencing of rental losses on the way.

The two neighboring town houses were not exactly stunning either. One was up for sale (with a new lick of paint of course) after the tradesmen tenants moved out of chch. The other had high turn over of tenants. Across the street the slum lords had put in a new driveway. Places that have been land banked for years are actually selling up. And there are for lease signs on many many commercial retail and office buildings.

That's just what I see on the ground. The bank's overpaid stooges will still give you a bull*t hyped up valuation though. Solid as I reckon.

For lease navidad.

by tothepoint - d… | 14th Dec 18, 4:03pm 1544756618

The housing market remains steady - and orderly.

2018 has been a year of consolidation. Following the pronounced market upswing through 2014-16, we've witnessed a "soft landing" over the last couple of years. Activity levels have been relatively flat through 2017-18 but prices have held firm.

Notably, any "crash" or "crisis" has been avoided - and without too much difficulty. Prudent financial regulation (RBNZ) and a robust legal system have helped underpin today's stable market.

In all likelihood, the current situation will continue for another year or two - or longer. As I've stated before, I'm not expecting any significant increase in price levels until at least 2021.

Have a good weekend everyone - and enjoy the Christmas festivities.

TTP

by Mrs The Point | 14th Dec 18, 12:00pm 1544742034

Hi tothepoint,

Do you get sick of pasting the same thing every time? Because I get sick of scrolling past it.

MTP

by skudiv | 14th Dec 18, 12:02pm 1544742178

Well at least the housing crash is in full swing.

by Mrs The Point | 14th Dec 18, 12:20pm 1544743228

If you say so.

by BuyLowSellHigh | 14th Dec 18, 7:13pm 1544767981

Scroll past? Ha! You hang on TTP’s every word and diligently reply to 90% of his comments. Not to mention the fact that you chose your username in his honour. If TTP stopped posting, your life would lose all meaning and your online profile would soon fade away.

by tothepoint - d… | 14th Dec 18, 12:22pm 1544743357

Hi MTP,

Don't shoot the messenger!

I report "what is".

If you don't like hearing it, then tough luck for you.

TTP

by BadRobot | 14th Dec 18, 3:18pm 1544753939

"Don't shoot the messenger!" - why not , seems like the most sensible thing to do considering you say the same thing over and over and over again - bit like a stuck record (if you know what one of them is....)

How about adding something more intelligent to the conversation - may be difficult for you to do but do try.

by Laminar | 14th Dec 18, 6:32pm 1544765552

In fairness he has been the most accurate to date. Effectively calling the bottom and saying for a long time prices would be flat.

by BadRobot | 14th Dec 18, 9:34pm 1544776459

And a broken clock is right twice a day (assuming it's not a 24 hour clock). I and others have pointed out that the most likely future of house prices is stagnation unless there is an external event that we don't or can't control.

Auckland house prices have got to the point where they are "optimized " given interest rates, wages etc. Problem is that this makes an assumption that the inputs don't change ( and this is one of my reservations of using maths when it comes to economic's - using a hard science (maths / statistics) in what is essentially a soft science (economics) ).

The rest of NZ will follow - then stagnation.

by Carlos67 | 15th Dec 18, 12:35pm 1544830540

Yeah but the broken clock has not been right for the DGM's on this site for the last 10 years. Its time some of you posted up hard and fast dates for the "End of the World" for the property market or give it up, its getting boring. TTP may come across as a bit obnoxious but he has been bang on the money, some of you need to start taking notes.

by BadRobot | 16th Dec 18, 10:05am 1544907933

Only problem is Pointy doesn't make predictions per se. Generally his comments are backward looking with a vague reference to the future (i.e. no specifics). Pointy's first post from this article is typical

https://www.interest.co.nz/property/97399/sales-rates-ranged-33-54-bayl…

No real substance. Under Pointy's forecasting he has a third chance of being correct - up, same or down . It's not as if he is predicting next week's lotto numbers....

It's also getting boring for Pointy to continually repeat the same comments over and over again - the arguments devolve into the same comments, then name calling and finally ad hominem attacks.

Just because people can 't give a date for the "End of the World" doesn't' mean it won't happen - only that is hasn't happened. You complain about the DGM's not making a prediction - how about the spruikers giving a date for the collapse of the share market - same logic ( and there is most likely a logic fallacy in there somewhere. How about an intelligent discussion.

by tothepoint - d… | 14th Dec 18, 8:45pm 1544773534

Hi BLSH,

That's an interesting point you raise about MTP.

I've often wondered about her.......

And, true, she does seem a bit obsessed with me.

TTP

by Nzdan | 14th Dec 18, 11:06pm 1544781988

Your wife is wondering why you haven't put underwear in the washing basket for the past 9 months.

by Pragmatist | 14th Dec 18, 10:21am 1544736081

"However in the country's largest real estate market, Auckland, November's median of $867,000 was up slightly compared to October's $864,500, but down 1.5% compared to November last year."

And the Auckland-wide HPI was -0.6% YoY, with sales volume up 3.9% YoY and median days to sell down 2 days.

Prices down, but volumes up..

Edit: to be fair, the auckland HPI graph is still basically moving horizontally since early-mid 2016. So prices overall going nowhere while (weak) inflation chews away at it in real terms as RP points out below. And volumes are up on last year, but still well below Nov 2012-2016 levels. A couple of RBNZ rate hikes next year should be interesting.

by PitU | 14th Dec 18, 10:09am 1544735385

The longer the price is 'stable', the stronger the next move will be either up or down. Not much reason for upside however brace yourself for a wild ride.

by Retired-Poppy | 14th Dec 18, 10:13am 1544735584

It's getting ever more challenging for the murky REINZ median dataset can hide the truth. Adjusted for inflation, this represents a -3% decline for Auckland. FBB, Sydney are to blame. The regions will soon follow.

by Ex Expat | 14th Dec 18, 10:19am 1544735983

Baghdad Bob would be proud of you. The Core Logic estimate for my home was 99.56% of the 2017 CV as at 9/12. Looks like a flat market to me.

by Retired-Poppy | 14th Dec 18, 3:21pm 1544754073

Ex Expat, I know you believe Kohimarama is Auckland's most important suburb but there are at least 50 others selling below 2017 CV here; https://www.stuff.co.nz/business/107694820/auckland-christchurch-proper…

edited typo

by Nzdan | 14th Dec 18, 10:28am 1544736500

He feels the need to prove himself to a bunch of strangers on the internet, maybe he doesn't get the attention he craves in real life?

by Retired-Poppy | 14th Dec 18, 10:35am 1544736905

ooooh - ouch! Feeling better now?

by Pragmatist | 14th Dec 18, 10:28am 1544736494

Yep, Flat and weak. Which way it goes next (and when its going to start going anywhere) remains to be seen, but I'm not seeing any real reason for the next move to be strongly upwards.
Plenty of reason for it to limp along sideways for a while, or maybe start moving down slowly - Rates hikes, Slowing immigration, Employment at saturation but with weak wage inflation so far.

And then there is always the black swan/external shock. US/global equity and bond markets are pretty shaky atm. Interesting times ahead.

by Nzdan | 14th Dec 18, 10:32am 1544736734

The property market is just taking a well earned nap. Just like hard working people, it too needs to sleep. It'll growl back to life in the New Year and before you know it average house prices in Auckland will be $1.2 million.

by Pragmatist | 14th Dec 18, 10:35am 1544736912

Or is going to wake up grumpy and snarly like me before my first covfefe of the day?

by Ocelot | 14th Dec 18, 10:53am 1544738024

Aucklanders don't make good enough wages to support mortgages for $1.2 million homes.

by Mrs The Point | 14th Dec 18, 12:01pm 1544742106

I agree, and that fact alone is enough to constrain a further increase in prices.

by Laminar | 14th Dec 18, 11:54am 1544741675

@Pragmatist median weekly income is up 4% for 2018 in NZ, how much more can you really expect?

by Pragmatist | 14th Dec 18, 12:17pm 1544743034

You're right, I thought it was lower. HES June Qtr total household income actually slightly higher than that even.

by Laminar | 14th Dec 18, 11:54am 1544741693

@Retired-Poppy in debt backed markets that is not how you calculate the change in value as a result of inflation. The correct approach is as below:

1,000,000 house
300,000 equity
700,000 debt

equity*0.97 = $291,000
debt*0.97 = 679,000

You lost 9,000 only, not 30,000, 21,000 of the loss is absorbed by the debt, that is 0.9%, not 3% as you imply.
People geared up 100% actually come out ahead interestingly.

You could add in opportunity cost but you cant apply a short term gain/loss calculation to a long term asset, the gain loss is only relevant in context to the investment horizon.
Remember if you sell a house to avoid a market downturn you need to pay tax on any gain so tax free capital gain style investments are always long term or else you are committing tax fraud.

by Pragmatist | 14th Dec 18, 12:20pm 1544743248

Not sure the bank is going to agree you only owe them $679,000 now on the interest only mortgage.

by Laminar | 14th Dec 18, 12:31pm 1544743900

@Pragmatist sell the house for 1,000,000 and you get 300,000 which is worth 291,000 in adjusted terms which is a 9k loss not a 30k loss. I show the adjusted debt total only for explanatory purposes and to show why those at 100% debt actually get ahead as inflation eats up the value of the debt. Basically you reduce the value of the debt because on average the debt is easier to repay, due to higher household incomes and higher rents.

by Pragmatist | 14th Dec 18, 12:35pm 1544744155

Okay, now i'm following. brb, I need coffee.

by tothepoint - d… | 14th Dec 18, 11:49am 1544741363

Note that rental yield (cashflow) is now climbing steadily through most of the country - as the housing shortage bites deeper.

When yield is factored in (as required in any robust analysis) the overall return for Auckland home owners/investors remains positive - in the vast majority of cases.

TTP

by Miguel | 14th Dec 18, 1:49pm 1544748578

Where are you getting this data?

From what I can see rental yields are at incredibly low levels and look more or less flat.
https://www.rbnz.govt.nz/-/media/ReserveBank/Files/Financial%20stabilit…

And this is with historically low interest rates. What happens to those yields if rates rise?

by tothepoint - d… | 14th Dec 18, 12:25pm 1544743534

Hi Miguel,

Go look at recent data on rents in the main centres......

Rents are going through the roof! $$$$$$$$

All the more argument for buying a home of your own.

TTP

by Miguel | 14th Dec 18, 1:53pm 1544748826

Really? You ignore actual data from the RBNZ that I linked, that clearly shows historically poor rental yields (that look flat). And your counter argument is to vaguely refer to rent increases (which are NOT the same as rental yields increasing).

Every day you prove yourself to be more duplicitous.

by Laminar | 14th Dec 18, 6:49pm 1544766585

@Miguel the data you presented shows rental yields rising (largely due to Auckland it appears) and further you need to adjust for interest rates. Please see chart 4D for NZ bond yields and you will see it is an almost perfect match to chart 5C rental yields, that is not a chance event.
Look at chart 6B and you will realize households are not as stretched as you may think and have been roughly flat since 2005.

Nice chart pack, thanks for the link, ive saved it.

by theglc | 14th Dec 18, 1:45pm 1544748347

No evidence.... again!!!!

by dictator | 14th Dec 18, 1:48pm 1544748520

TTP why aren't you buying more rentals? You should be able to rapidly expand your portfolio with such high yields.

by Mrs The Point | 14th Dec 18, 12:08pm 1544742497

That is a completely false statement. Rental yields in Auckland don't even cover interest, yet alone rates and insurance.

by tothepoint - d… | 14th Dec 18, 3:24pm 1544754285

That's rubbish MTP.

With falling interest rates and rising rents, there are plenty of landlords doing very nicely indeed.

Wellington landlords are also making healthy profits right now. (There's a dire shortage of rental accommodation in the Capital.)

Sounds like you're sore at not being a part of the action......

TTP

by Retired-Poppy | 14th Dec 18, 3:40pm 1544755218

Agent TTP, once again you've been caught making stuff up and ignoring David Chastons in depth analysis. "On a national basis it is clearly less expensive to stay renting than to buy. But apart from Auckland and Queenstown, buying is still a practical option for most"

https://www.interest.co.nz/property/rent-or-buy

This is now the third time you've been caught spreading these lies.

by tothepoint - d… | 14th Dec 18, 3:42pm 1544755333

Hi R-P,

If there was any truth in that, why are FHB's clambering to get into their own homes?

As you know, FHB's wisely ignore everything you say.

TTP

by Retired-Poppy | 14th Dec 18, 3:49pm 1544755781

Agent TTP, you're on shaky ground accusing David Chaston of spreading fake news. Take it on the chin and confess that you cocked this one up.

by BadRobot | 14th Dec 18, 3:48pm 1544755713

Fake news maybe but no evidence for his claims definitely.

by tothepoint - d… | 14th Dec 18, 4:10pm 1544757024

Hi R-P,

Show me where I accused David Chaston of "spreading fake news".

TTP

by Mrs The Point | 14th Dec 18, 5:54pm 1544763263

Hi tothepoint,

First you talk about Auckland yields, then when you get called out for spreading fake news, you change your example to Wellington. At least get your story straight.

MTP

by tothepoint - d… | 14th Dec 18, 6:13pm 1544764398

Hi MTP,

As above, show me where I accused David Chaston of "spreading fake news".

TTP

by Mrs The Point | 14th Dec 18, 6:18pm 1544764680

Not sure what DC has to do with your flip flopping. Do tell?

by Trapped Millennial | 14th Dec 18, 9:52pm 1544777571

TTP not all fhb are clammering. There is a group of us on this site that are sitting on the sidelines. Just want to say tho that there is a massive pressure from everyone in my life to buy a house because I have a deposit. My parents. Family. Colleagues. Partners family. Strangers at bbqs. The whole country is addicted to housing. If you sit back and just watch it is actually frightening

by Nzdan | 14th Dec 18, 11:13pm 1544782402

Don't listen to TTP. When I first joined this site, TTP had a point. You might not have agreed with it, but you could concede that it's a different point of view. Sometimes I read TTP's posts and though, yeah that makes sense!

Over the past......6 months i guess, i've seen TTP's posts become more and more ramblings from someone with Dementia or something. I'm not trying to insult TTP but I think his/her message has become scrambled.

by JessB | 15th Dec 18, 4:01am 1544799674

Agree, we are FHB (in NZ) and we are certainly not gagging to get into bucket loads of debt. We are in Tauranga where prices have gone through the roof... we are all ready to buy but have been waiting and watching for a year or so. I’m fairly certain a downward turn is happening and I think March-June next year it will be obvious. Well for mine and my husbands sake I sure hope so haha or we have been waiting for no reason.

by Laminar | 14th Dec 18, 7:18pm 1544768307

@Mrs The Point, it is absurd to expect interest to completely cover costs but there is a huge supply of rentals that cover the interest costs with ease, here you go; https://www.trademe.co.nz/property/residential-property-for-sale/auctio…
or
https://www.trademe.co.nz/property/residential-property-for-sale/auctio…
or
https://www.trademe.co.nz/property/residential-property-for-sale/auctio…

by Mrs The Point | 14th Dec 18, 8:30pm 1544772609

Unfortunately interest is not your only cost. Looks like you have been the the same investment school as TTP and BHSL. Help yourself to those properties, they wouldn't make my portfolio.

by Sluggy | 14th Dec 18, 12:15pm 1544742958

So why would my friend be renting a house in central auckland, 3 bed, 800m2 section, for 780 a week after he just sold his house for close to 3m across the road.
Just a simply amazing return, at least 2%. The place I live in returns 2.35%. Why would anyone take the risk for that return... Please can I have your "robust analysis" of the above situations, and where all the people involved in this housing shortage are currently being kept, cold storage perhaps ?

by Retired-Poppy | 14th Dec 18, 3:57pm 1544756244

"An analyst research note from early 2006 put Dublin's gross yield in a number of booming suburbs between 1.4-3.2 per cent"

On the ride up there was also a shortage of housing in Ireland. Its a warning sign when Auckland's gross rental yields are just as ridiculous. Now we have a surplus of expensive homes, a shortage of affordable. Market forces will eventually win.

https://web.archive.org/web/20060820055524/http://www.davydirect.ie/oth…
and
https://www.abc.net.au/news/2018-10-08/how-much-is-australia-in-2018-li…

by Laminar | 14th Dec 18, 7:05pm 1544767549

@Sluggy Investors dont often target those sorts of properties these days. There are some rentals in those areas but most of them where bought a long time ago.

by Penfold | 14th Dec 18, 10:53am 1544738001

"In Auckland there was an even bigger increase in sales, with 2039 residential sales in November, up 3.9% compared to November last year."

It's interesting to drag the scale of the Volumes Sold graph for Auckland all the way over to the left. In November 1993 the total Auckland sales were 2504, in November 2018 the total Auckland sales were 2019. 20% less sales volume than 25 years ago in a city that is 30% larger than 25 years ago.

Probably a bit of pent up demand in 1993, after the 1989 to 1991 recession? As Nov 2018 is at least an increase in volumes over Nov 1992 (1523 sales)

by Better things to do | 14th Dec 18, 9:58am 1544734738

Am I missing something? "The national median price was $575,000 in November, up from October's record of $562,000 and up 6.5% compared to November last year when it was $880,000." So November 2017's median price was 880k?

by Greg Ninness | 14th Dec 18, 10:01am 1544734914

Thanks bttd. Fixed now :)

by Retired-Poppy | 14th Dec 18, 10:18am 1544735905

BLSH, Agent TTP, Shoreman and Houseworks, how much do you think Auckland house prices will fall by Dec 2019? Yvils already on record as volunteering they'll be lower, but refused to be drawn on a percentage. Step up, don't be afraid to make a forecast. Keep in mind that two of you already pre-labelled my missed -5% Auckland forecast as being a "crash forecast".

by BuyLowSellHigh | 14th Dec 18, 12:20pm 1544743252

Don't worry, I'll be making a prediction on this, along with various other things, when predictions are called for in a couple of weeks time.

by skudiv | 14th Dec 18, 12:24pm 1544743474

They will be up 7%, which is the long term average. It's interesting that the one thing you are expecting, is statistically a long shot and the least likely thing to happen. Fair enough to take a remote possibility as a risk into consideration, but to base your whole philosophy on the least likely reality, demonstrates a reasonable amount of insanity.

by BuyLowSellHigh | 14th Dec 18, 1:23pm 1544746987

Sarcasm, I assume?

by skudiv | 14th Dec 18, 7:34pm 1544769240

Poe's Law

by CourtJester | 14th Dec 18, 12:47pm 1544744869

I'm a newbie DGM and here's my official prediction:
Median house (sale) prices in Auckland will fall by 5% between Dec 2018 and Dec 2019.
I have to add that there's a huge uncertainty overseas (especially Aus and China) that could affect the market considerably - and those effects could only decrease house prices, not increase them.

by lonewolfnz | 14th Dec 18, 3:00pm 1544752836

My prediction. Auckland prices will increase by 4.5 % by Dec 2019 - caused by immigration continuing, interest rates continuing to fall, rents spiking due to the government's policies and kiwibuild failures and continuing issues with building / development constraints.

by Adam B NZ | 14th Dec 18, 5:27pm 1544761656

Not sure about that...

by Mrs The Point | 14th Dec 18, 8:49pm 1544773785

Just wait until he gives us his Crypto predictions!

by Fritz | 14th Dec 18, 5:08pm 1544760538

Good call, with good caveats.

by Laminar | 14th Dec 18, 7:08pm 1544767719

@CourtJester im not sure -5% qualifies you as a DGM lol, try increasing that by a magnitude and you can have a seat at the DGM table.

by mikekirk29 | 14th Dec 18, 4:38pm 1544758710

How much is median in Auckland already off the high? Quite a bit.
My forecast is that median in Auckland (bearing in mind all the apartments and sections dragging it down) will be $825k by end of 2019. That is 2.82% lower the today's median from REINZ for district of Auckland, which was $849k

by Houseworks | 15th Dec 18, 7:21am 1544811715

There is life outside Auckland (or as auto-corrects on my phone to Suckland). However I was in Auckland yesterday...making "hay"...I guess you have to know where and what are the best places.

by Houseworks | 15th Dec 18, 9:32am 1544819551

"...how much do you think Auckland house prices will fall by Dec 2019"
Retired-poppy, first your preconceived biased mistake right there.
Second....blinkers to the rest of NZ. The figures show Hamilton/waikato 8 percent 2018 yoy median increase. Yes 8 percent. So everyday this year, while you have been saying "the regions will follow", waikato (and most non-auckland) house owners have been getting much richer through their properties.

by gingerninja | 14th Dec 18, 10:11am 1544735518

So Auckland median price $900k in March 2017 and $867k November 2018?

by BuyLowSellHigh | 14th Dec 18, 12:26pm 1544743590

Flat as a wonky pancake. Seasonal variation accounts for much of that difference. March 2018 was $880,000, which is likely to be very close to March 2019.

by skudiv | 14th Dec 18, 12:27pm 1544743670

Renting is a much better option because 100% of your rent goes toward a property investors mortgage and you don't have to worry about losing $33k in a bad year, you can just sit pretty in your rented house while you count the money you are making.

by CourtJester | 14th Dec 18, 1:05pm 1544745938

I can feel some sarcasm in your comment. What you forgot to add is that interest rate on your mortgage is basically the same as a renter giving money to the landlord - except you give it to the bank for their service.
Let's say you can rent an 800k home for 600 per week (pretty common on the North Shore).
Total rent p.a.: $31,200

Now let's buy the same house with a 20% deposit, at 4% interest rate.
Total interest paid p.a.: $25,600
Add the following costs of home ownership to the mix: rates, insurance and home repairs.

Plus the opportunity cost - you could put the same money ($160k) into a term deposit instead, at 4%-ish rate you would make $6,400 p.a. while renting.
So, which option is better financially? Only the long term capital gains will help you, if they are above the (term deposit rate / LVR) on average. Will that be the case? Only time will tell.

*Disclaimer: Despite my analysis, I will buy my first home in a year or two because of emotional reasons (I'm sick of moving every 3 years or so).

by lonewolfnz | 14th Dec 18, 3:04pm 1544753042

Now lets extrapolate forward 20 years. Who knows what the interest rate will be, but inflation by itself will likely have nearly halved the relative value of the debt. Rent could easily be double, if not triple. And hopefully said home owner would have repaid most of the debt anyway and will be living in rent-free home. Of course the renter might have been accumulating investments but the reality is people on a mortgage are often compelled to repay principal or at least become more aware of their debt position.

by tothepoint - d… | 14th Dec 18, 3:44pm 1544755468

Hi Gingerninja,

Have you any insights as to why house price have climbed so steeply in Wellington through 2018?

I'd like to learn more about the Wellington market.

TTP

by BadRobot | 14th Dec 18, 3:49pm 1544755787

A fool and their money.....

by Hardly | 14th Dec 18, 5:14pm 1544760842

Wellingtonians earn more than Aucklanders and yet at one point their house prices were close to 50% of Auckland prices. So the gap had to close. It’s probably largely driven by low interest rates and a little bit driven by Aucklanders either moving south for cheaper housing or investing south. I’m worried about the impact of ‘buy where you can afford and keep renting’ advice. I don’t think people realise how vulnerable places like Rotorua are. One thing I will say for Auckland is it will always have lots of people.

by Dogboy | 14th Dec 18, 5:18pm 1544761095

TTP, I would like to know why welly houses have risen also,
as 90% of the ones i have viewed need a match throwing at them!

by tothepoint - d… | 14th Dec 18, 5:54pm 1544763257

Hi Dogboy,

Yep - I hear there are lots of old hovels in the city suburbs that are ripe for demolition.

Generations of students and hippies have lived in them.

Apparently, the land values are so high, the owners won't sell them.

TTP

by Fritz | 14th Dec 18, 6:48pm 1544766539

Big boost in highly paid bureaucrats pushing paper

by gingerninja | 14th Dec 18, 7:29pm 1544768955

Hi TTP,

I think i've already answered this question before. Wellington property prices have been climbing pretty steeply since 2016, which coincided with property investors from Auckland looking for a better yield elsewhere but also becoming priced out of the Auckland market by the introduction of the 40% LVR. I think some priced out Auckland home buyers also moved to Welly. It's a phenomenon that has spread to many regions. Wellington is perhaps more desirable to investors because of the number of universities.

Prior to 2016 the Wellington market had pretty slow growth. May 2007 the median was $400k and in May 2015 it was still only $405k. 2 years later the May median was 525k and this May it was $578k.

People go on about Wellington not having space to expand but that is absolute nonsense. There is loads of land for Welly to grow in to and much better infrastructure than Auckland to accommodate population growth. I think Wellington will always do a better job of catching up with housing demand than Auckland and has a city council that is somewhat more efficient. So I doubt Wellington will ever suffer chronic housing shortages. The shortages will always be shorter term.

Wellingon's rapid catch up growth phase has already peaked and will continue to slow but I doubt there will be a correction, more likely it will stall for ages again.

Auckland is more likely to correct than Wellington. Although if there is a huge global recession brewing, all bets are off!

I am madly in love with Wellington still and so happy here. Quality of life is amazing, depends what you like of course, but for me, there is no where better!

by Fritz | 14th Dec 18, 8:16pm 1544771765

You are really overrating Wellington CC.
And please tell me where there is plenty of land in Wellington, because there isn't.

by Pragmatist | 14th Dec 18, 8:18pm 1544771927

"You are really overrating Wellington CC."

Saying they are better than Auckland council isn't setting a very high bar.

by gingerninja | 14th Dec 18, 9:08pm 1544774918

There is an ongoing development plan for the Miramar peninsula, it will happen at some point, Brooklyn and Ohiro Bay will expand until they meet, I have a friend who has many hectares landbanked up by the windmill and that is all being developed in time, there is room to expand out the back of Karori towards Makara, Churton Park, Newlands, Glenside and Grenada village have plenty of growth still, Wellington will expand till it meets Tawa and Newlands will expand till it meets the Hutts, and even then it will still be a more compact city than Auckland.

And i'm not highly rating Wellington council, but they are not the utter cluster f$#k that Auckland CC is and they have done a better job of facilitating population growth. Admittedly with a much less acute problem but Wellington CC are not utterly incompetent, that's about the extent of my compliment to them ;-) Island Bay cycle lane LOLZ aside.

by Nzdan | 14th Dec 18, 11:30pm 1544783414

I've had a bit to do with developments in Churton Park and Aotea Block (Porirua). We're currently supplying a Watermains upgrade in Khandallah, as well as a pretty big bulk watermain job for Aotea Block. There's plenty of planned infrastructure spend in Wellington Region over the next 10 years, so will be interesting to see what comes of that.

by Fritz | 15th Dec 18, 2:24pm 1544837048

I think you are underestimating the impact of slope on development feasibility in some of those locations.

by tothepoint - d… | 14th Dec 18, 8:38pm 1544773088

Hi Gingerninja,

Thanks for your thoughtful and well-considered response.

I don't know Wellington as much as I'd like to.

Most people I know who live there seem to really enjoy it - much the same as you report.

I know that city suburbs like Brooklyn and Kelburn are very sought-after. But expensive too, no doubt.

Apparently, Island Bay used to be very nice too - until the Wellington City Council wrecked the main street by constructing an ugly (and unsafe) cycleway. (I hear the locals are fuming.)

I was in Palmy North again recently - and stunned at the value-for-money housing given the easy-living and great education facilities - including Massey Uni.

Perhaps I should go for somewhere in-between - like Foxton or Shannon??

Have a good weekend - and thanks again for your response.

TTP

by gingerninja | 14th Dec 18, 9:26pm 1544775973

Hi TTP, the most expensive suburbs in Welly are Oriental Bay, Roseneath, Seatoun and Mount Victoria. Then Thorndon and Kelburn, somewhere after that Wadestown, Khandallah and Ngiao and then you get to Brooklyn. Brooklyn prices have definitely increased and it has become more popular, it's a lovely suburb and going through something of a "gentrification" i'd say. We loved living there but we had enough of the wind (it's the windiest place in Welly) and the hill.

I loved Martinborough and I hear Greytown is lovely. I don't really know Foxton. I'm a city girl, I like to be able to take a 20 min cab to an international airport, see concerts, bands and plays and enjoy the buzz of urban life. Lovely thing about Wellington is that you can be relatively near the city but home is somewhere pretty peaceful and idyllic.

by Fritz | 15th Dec 18, 7:44pm 1544856246

I was born and bred in Wellington. Good city but far too small for me. Poor climate too.

by andreas_od | 14th Dec 18, 10:23am 1544736219

Just checked previous REINZ report, it said
Auckland city Oct-18 median price 972k volume 637
today's report says :
Auckland city Oct-18 median price 959k volume 658

previous report link

https://www.reinz.co.nz/Media/Default/Statistic%20Documents/2018/Reside…

do they even check their own previous numbers before the release?? or those all numbers are out of thin air?

by andreas_od | 14th Dec 18, 10:22am 1544736130

the same error for Manukau City and Papakura District
Shame

by Nic Johnson | 14th Dec 18, 10:35am 1544736955

It’s a bit suspect. LINZ should have all the data for transfers and prices. Conveniently however, they palmed this over to STATS NZ in May 2018. I can’t seem to find a report on prices from them since....

To be fair i’d Love to see the raw data and we’ll work it out ourselves! REINZ data can’t be relied on to be correct from their last press release.

by andreas_od | 14th Dec 18, 1:11pm 1544746273

agree , raw data would be perfect , I would be able to automate it's processing and would be interesting to see the difference with REINZ report (which is "representing more than 14,000 real estate professionals nationwide" - https://www.reinz.co.nz/about ) who, I presume , are all interested in higher prices :) . Did not realize REINZ is non govt organization at first

by Nzdan | 14th Dec 18, 10:39am 1544737151

21 additional sales from October finally went unconditional, but because they were bought with Bitcoins this dragged the Median Price down.

by andreas_od | 14th Dec 18, 10:53am 1544738031

how do you know this? is bitcoin even legal for NZ transactions?. even if this is a joke, I thought bitcoin is lost market since recently and wonder who would accept payment for a house in bitcoins :) lol

by Nzdan | 14th Dec 18, 11:01am 1544738460

It's the risk taken when the Vendor signs a Sale and Purchase agreement priced in Bitcoins. Settlement date comes around and suddenly the coins are worth 48% less in $NZD terms.

by Pragmatist | 14th Dec 18, 11:11am 1544739069

They might want to offload those bitcoins pronto.. its back testing the US$32xx recent lows again..

by lonewolfnz | 14th Dec 18, 11:22am 1544739722

Not really, you would just say "price is $1m, btc accepted", and then on settlement calculate the exchange rate at that day. They should start valuing all houses in btc though - imagine the headlines, auckland property up 300% in a year!

by andreas_od | 14th Dec 18, 11:23am 1544739813

"when the Vendor signs a Sale and Purchase agreement priced in Bitcoins" is it actually legal to do in NZ?

by Pragmatist | 14th Dec 18, 11:28am 1544740128

Don't see why not, you could probably sell a house in tons of potatos if you so chose. Not sure the banks would be happy with that if there was a mortgage involved on either side of the transaction tho. And the tax man might not agree with your potato to NZD exchange rate for tax purposes.

by andreas_od | 14th Dec 18, 11:57am 1544741873

"Don't see why not" - you are answering your own question later in the same comment "And the tax man might not agree" . Because of the transaction transparency for tax purposes. especially with bitcoin, because you can at least eat potato and weigh it .Potato is real so for tax purposes selling house for potato is more transparent :) and the exchange rate PTTO/NZD is more stable and traceable than BTC/NZD

by Pragmatist | 14th Dec 18, 12:06pm 1544742402

But most residential property sales don't raise a tax liability. And for those that do, the taxman will quite happily set their own potato to NZD exchange rate and see you in court if you disagree with their number and refuse to pay in NZD what the taxman thinks you owe.

There are lots of good reasons why it would be far better to do it in NZD.. but ultimately I don't think there is anything legally stopping you from bartering a house for Potatoes if you are silly enough to do it.

by andreas_od | 14th Dec 18, 12:12pm 1544742734

"But most residential property sales don't raise a tax liability" - I'm pretty sure the right way to formulate this is "All residential property sales do raise a tax liability, however most of if is equal to 0% currently" this makes hell of a lot of a difference in terms of visibility for tax men

by andreas_od | 14th Dec 18, 12:22pm 1544743348

and , it would be still interesting to see some official proof of "but because they were bought with Bitcoins this dragged the Median Price down" as I suspect now you were not joking...

Sorry , that was not your comment , you have been just so supportive of that that I thought it was yours...

by Pragmatist | 14th Dec 18, 12:27pm 1544743650

nzdan was joking. But yeah, AFAIK, there is nothing stopping you from doing it.. except common sense.

by Nic Johnson | 14th Dec 18, 10:19am 1544735984

Does anyone know if LINZ produce house price stats?

by bilbo | 14th Dec 18, 11:02am 1544738527

That depends. Is your house an NZ tax resident and or holds a student visa?

by Cowpat | 14th Dec 18, 10:23am 1544736234

Since 1994 only four other years have seen lower November Auckland sales volumes, two of which were in a banking crisis, one immediately after an election . When adjusted for available stock, this months data is poor.. Given historically ultra low interest rates , 2019 sales volumes and pricing point only one way . If Australia truly gets the speed wobbles , why would you purchase an Auckland property now or in the near future ?

by Pragmatist | 14th Dec 18, 10:37am 1544737066

What was the auckland inventory figure? I went looking for it but missed in in the REINZ release.

by house hunter | 14th Dec 18, 3:53pm 1544756015

Interesting observation, thanks for posting that. Presumably adjusting for growth of population and number of houses would just make the point even more compelling.

by mikekirk29 | 14th Dec 18, 4:42pm 1544758923

Yes, well said. And it would be so nice to know what owner occupied % of stock IS now, rather than in 2013 which is all Stats NZ can cough up. Utterly pathetic. As 3 in 4 new stock seemed to be rented out, these cannot really be classed as "owned " as in lived in by owner. This HUGE element of non-information in Auckland and lack of detail of stats means we do not really know exactly what is going on. It is a lottery

by Cowpat | 14th Dec 18, 10:29am 1544736574

Auckland median prices approaching the longest decline from peak -ever.

by skudiv | 14th Dec 18, 12:30pm 1544743845

Good point, it's hardly the end of the world is it.

by BigDaddy | 14th Dec 18, 10:39am 1544737155

The Auckland flat line effect will slowly but surely feed into the regions when they too will reach a level where they become flat and weak. The rush to the regions (because that's what it is) has reached its peak and those expecting ever increasing prices outside of Auckland are in for a winter of discontent.

by Retired-Poppy | 14th Dec 18, 10:47am 1544737662

Well said!

by Crazy Horse | 14th Dec 18, 11:25am 1544739958

So true BD .....have a brother overseas who sold and cashed up in Auckland late 2015 (never wants back in the Auckland market at all) and lately has been looking at Tauranga/The Mount/Papamoa etc. I said to him "hold off" and don't jump into anything when you don't have to .... that cash is only going to get him a better property the longer he waits (in the medium term)....my advice anyway.

by Houseworks | 15th Dec 18, 7:59am 1544813946

Sorry to say, your brother sold too early...and is buying too late, although its never too late, but in his case it is.

by lonewolfnz | 14th Dec 18, 10:47am 1544737648

The Auckland figures become more interesting when you break it down by the old cities. We have Auckland city, moving up in median from 960k to 999k - up 4.2% (is that an ATH? I think even the average only just crept over $1m on QV figures) - also up 4.1% in a month but maybe that is seasonal. Northshore is interesting, up 4.1% in a month, but down 2.2% - now $1,064,000. South Auckland falling, and Rodney getting crushed (but I guess that one has a small amount of data to look at).

by Pragmatist | 14th Dec 18, 11:00am 1544738444

Bzzt. Ignore medians.

Auckland median moved up.. but HPI for Auckland city is only +0.3% YoY, so quite likely it was just a lack of sales of cheap apartments and units and more high end sales of standalone houses in the mix (due to FBB?)

by mikekirk29 | 14th Dec 18, 4:43pm 1544759028

Rodney median is falling because of all the sections and lots they have listed. Look at RE NZ.
70%of stock over 3 months old is not in fat a dwelling, but a "lot" or a section.
Price of these tends to be under $400k

by Pragmatist | 14th Dec 18, 4:54pm 1544759673

As above, look at the HPI instead, Rodney still down 1.8% YoY, so yeah, the property mix might be dropping the median down (do they include sections in the residential data?.. not really residential until you build a residence on it.) but overall still down a bit.

by printer8 | 14th Dec 18, 11:42am 1544740957

Looks like 2018 is going to pass without serious correction either in Auckland or the regional markets. The regions' run is most likely to end once price differentials with Auckland close.
The outlook appears to be a degree of relative stability devoid of significant capital gains for investors. The tweaking of LVRs by RBNZ effective 1 January, continuing historically low interest rates likely for the next year or more, and continuing historically high rates of immigration provide some support.
Add to this that RBNZ have their finger on the LVR and OCR buttons if there is any significant change in the market (+ve or -ve) which is sufficient to have consequences for the wider economy.

Interestingly, when Twyford (although not a fan of his) was questioned in Question Time yesterday regarding the potential for capital loses on KiiwBuilds, his answer was that Treasury, RBNZ and the government do not see the likelihood of a downturn in the market. Putting Twyford aside - if RBNZ and Treasury are of that opinion, then one would add quite some weight to their being some stability in the market. (Early this year, Orr stated that he saw 2 to 3% medium term growth in the market)

by BuyLowSellHigh | 14th Dec 18, 12:14pm 1544742855

Steady as she goes. In-line with what I predicted last month. "Nov 2017 was a bit of a peak, so maybe slightly down, but basically flat as a slightly wonky pancake."

https://www.interest.co.nz/property/97038/auction-sales-rate-slightly-l…

by saving4AUhouse | 14th Dec 18, 3:49pm 1544755754

So what does a cold, draughty uninsulated house cost in a town with no jobs cost now? $200k? $300k?

I remember one post here told me to just buy such a place, have kids ASAP, then go on the dole and get everyone else to pay my mortgage. I mean it feels like that's what the state wants me to do.

by Nzdan | 14th Dec 18, 4:39pm 1544758794

We bought a well insulated property in a town with no jobs. Some mornings. before my 2 hour commute, I feel like handing in my notice and going on the dole. I might do that in a few years time when I've hammered the mortgage down a bit more. An early pension.

by saving4AUhouse | 14th Dec 18, 5:22pm 1544761374

2 hour commute one way? That's rough.

I'm sure your house has increased in value a lot, but your salary hasn't kept up.

by Nzdan | 14th Dec 18, 6:13pm 1544764388

My salary has gone up a considerable amount over the past few years, perks of having a decent employer. My mortgage is a third of what you’d have in AKl or Wellington, half a Chch mortgage. Commute is a fixed cost of $90 per week.

by skudiv | 14th Dec 18, 7:38pm 1544769528

Sounds like a desirable location.

by Nzdan | 14th Dec 18, 8:05pm 1544771143

Plenty of undesirables live here.

by JB | 16th Dec 18, 3:58pm 1544929081

Travel totals 5 x 4 hr / day = 20 hours / week. Say 80 km/hr average so 1600 km / week.

To cost only $ 90 / week that's ~ 5.6 cents / km !

Sorry - Just not credible.

by Nzdan | 17th Dec 18, 6:09am 1544980181

Month train pass = $352.50. I live a 5 minute stroll from the station and work is right over the road at the other end.

by Pragmatist | 14th Dec 18, 6:03pm 1544763781

Yeah, i wasn't serious with that post. Last thing we want is a bunch of mini-Saving4Auhouses running around ;)

by saving4AUhouse | 15th Dec 18, 10:24am 1544822688

Australia went ahead and killed my gimmick with their new encryption law. Maybe I am stuck here :(

by John2 | 14th Dec 18, 10:42pm 1544780572

People forget a market change doesn't happen overnight. Most folks are sick of the same old news so expect something a little more dramatic.
So no, no crashes overnight. It takes years for the peak and so will it take years to come down.

In between I wouldn't rule out a :dead cat bounce" So FOMO will be punished again.

by Andrewj | 14th Dec 18, 7:19pm 1544768367

https://pbs.twimg.com/media/DuVXALOUUAADrZ5.jpg

by MortgageBelt | 16th Dec 18, 5:27pm 1544934463

Aucklanders are cashing up and moving to provincial cities driving up house prices there.
Provincial city home owners are selling up and moving to cheaper small towns within commuting distance of provincial cities.
Everyone’s going ‘country’ - who wants to live in large central cities ‘something like a circus or a sewer’ Lou Reed
It’s a win-win with all parties lowering debt and boosting savings.
Now, who’s buying Auckland houses then?

by Voiceofreason | 15th Dec 18, 11:59am 1544828355

It won't last. Auckland will likely fall hard like (other bubbles) Sydney, Melbourne, Vancouver, Hong Kong. Provincial places will follow, as they have in the past. Quite a few people are chasing high capital gains to regional areas but will pull out when that stops. It's not going to be pretty. Way too early to say it's a soft landing.

by South_Island_Simon | 15th Dec 18, 11:23am 1544826229

If you want to see what's coming for NZ you need to look out the windscreen not the rear view mirror. What's happening everywhere is reduced liquidity. Its brutally obvious now. That means higher real rates. Nominal rates can stay the same as prices and incomes drop giving higher real rates or nominal rates can increase as prices and incomes rise. The second option is better but much harder to achieve (in a globalised world) than the first which now appears to be underway.