Barfoot & Thompson's February sales were down 29% compared to a year ago

Housing sales were significantly softer at Auckland's largest real estate agency in February.

Barfoot & Thompson sold 474 residential properties in February, down 29% from the 665 the agency sold in February last year.

"Sales numbers in February at 474 were the lowest in a month since December 2008, which was at the high point of the Global Financial Crisis," Barfoot & Thompson Managing Director Peter Thompson said.

"The market is progressively hardening into a buyer's market, with a number of vendors preferring to take their property off the market when they cannot achieve their asking price," Thompson said.

Prices were also easier, with the median selling price dropping to $801,000 in February compared to $827,500 in January and $820,000 in February last year.

The average selling price was $918,496 in February, down from $927,181 in January and $919,454 in February last year.

The agency picked up 1563 new listings in February, down 10.5% compared to February last year and the lowest number of new listings the agency has received in the month of February since 2012.

However inventory levels have been almost unchanged for the last two years, with Barfoots having a total of 4660 residential properties available for sale at the end of February, compared to 4648 in February last year and 4546 in February 2017.

The lifestyle block market was also slowing.

"Potential buyers in the lifestyle and rural market are showing an increasing awareness of the effect increasing building costs are having on prices and are seeing existing properties as a good option compared to buying bare land and building a home," Thompson said.

The interactive charts below track the monthly movements in Barfoot & Thompson's monthly sales and average selling price, and the trend in annual price growth.

Barfoot Auckland

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280 Comments

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The lowest February sales since time began .

Nothing like the threat of a new tax (CGT) to throw a fragile market into chaos .

Another spectacular self induced shambles by this hopelessly inexperienced Government

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One of the Government's goals was affordable housing - if they can help to achieve this simply by talking about a tax then good on them.

If by their poor management they throw thousands into negative equity, well its just tough for them. Not the best way to run an economy, getting people into situations where they can't sell their negatively geared property to move jobs.

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@halfway ......... re negative equity in a falling market ............. cant say we were not warned of this likelihood .

The media and Polly's have been harping on this for ages

I agree we have been warned about it, it does not worry me. It is the first time buyers I'm concerned about. The government should not be promoting policies that make the likelihood of a falling market more likely.

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FHB deserve some sympathy... but I told some FHBs the risks 2 years ago and they still went and plowed in ahead because "otherwise I'll never get in".
Well, more fool them. Time to learn a harsh lesson in leverage.

"Investors" in negative equity? Z.E.R.O. sympathy.
They are, or *should* be, well aware of the risks.
They've driven up our markets and took on eye-watering levels of cross-collateralised debt with reckless disregard for prudence. Now it's time to pay the piper.

I'm no fan of Labour, but they can barely be blamed for a decade long global credit expansion coming to an end.

The phenomenon of slowing residential housing markets is happening around the world right now.
On the way up everyone was trying to convince us that we were no different to other world capitals (due to credit, but that was never mentioned)... now that same process is in reverse and oh, no it's all due to domestic factors and we're different anyway.

Right, OK. Sure.

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If you were foolish enough not to see this on the horizon then so be it. Throw the dice, accept the outcome.

Unfortunate, to be sure, but it opens up a lot more opportunities for the tens or hundreds of thousands who might be able to afford to buy a house at some point, where it was previously impossible. Prices in Auckland had got to a point where it's impossible to please everyone, if we're lucky we'll get the least bad situation of steady and perhaps gently falling prices.

Dreamon. This is the real world.

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Can't really blame that when we've have a bubble building for well over 5 years. Something is also going to pop a bubble, and it could be many things, just like in Australia, Canada, and Hong Kong.

This bubble started in 2002

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I agree is goes back that long, even further, but it has been very obvious for the past 5 or so. It's a shame more people didn't see it, especially those who can't afford go into negative equity, with big mortgages. There are a lot of people in Ireland still in negative equity, 10 years on from their crash.

A lot of people have made fortunes over this 17 year all the DGMers having been calling bubble.

At least you can finally say I told you so for the johnny come latelys who will get caught IF the pyramid collapses. But it would be a bit rich calling "I told you so" on the tens of thousands of buyers who have since cashed in big time.

HeavyG, I agree. Just because it's a bubble doesn't mean you can't ride it up. Timing is difficult though, especially the stock market, but for NZ property market 2015 was the year I thought it started to look very ominous, with the multi-year double digit gains before that, and then one that was over 20%! Waiting too long in a bubble, or getting in near the top and not recognising it's a bubble is where people really get stung.

Making money and knowing you are in a bubble are not mutually exclusive. I'd say you are more likely to make money if you realise the fact.

Kiwimm, Indeed, knowing when to get out is key (if you don’t want to ride it out for the long term). In Auckland over the past few years there have been many “rags to riches” media stories, of people with many investment properties, and looking closer, who are very highly leveraged. That’s an alarm bell signal for the top of the bubble. Been the same since tulip mania in the 1600s.

Yeah like those suckers who bought Apple stock in 1999 who lived to regret it even more than the dolts that bought Amazon at the time. Live by the bubble, die by the bubble.

Laminar, yeah I remember the Dotcom bubble very well (GenXer).Yes those that survived did very well, but it was better to buy them after the Dotcom bubble burst, in the trough afterwards. There was no hurry. The companies that survived the crash and thrived did very, very well. As for the pets.com and the literally hundreds of startups with high valuations and no income in 1999, not so much.

For every apple and amazon there were literally hundreds of failed shirt-tail riding stocks.

Who is to say Auckland is an Apple and not a Pixelon?

Wow, what an attitude - hopefully we don't see a housing collapse similar to Ireland or Spain (I don't think we will). But if it gets that bad and a huge portion of the population REALLY suffer (negative equity, massive damage to the economy, huge loss of jobs and all of the associated societal damage).

But as far as you are concerned its all good because you made a fortune?

For a lot of people they have been warning of a bubble not because they want to enrich themselves at all costs. But because they don't want to see the negative societal impacts that can come with the popping of a housing bubble.

My point is if you having been crying wolf for 17 years, is it any wonder no one listens. A lot of people are calling bubble because they want a bubble to justify 17 years of getting it wrong. The faux concern for those caught in the tail end of the bubble (if there is one) is laughable.

I have not sold any of the houses I have bought since 2002. Prices would have to fall by 70% before I started losing out on my purchases. I wouldn't have bought those houses if I had paid heed to the "bubble experts". The ones I feel sorry for are those that listened to the DGMers and missed the boat. How big a drop is required before those who missed out are in a better position then if they had bought over the last 17 years?

Furthermore, the bubble dance is a bit rich given the Government's targeting of house investment that has occurred since 2002 has impacted on housing values as well e.g. no depreciation on buildings, bright line test, FB ban, LVR restrictions and now ring fencing for rental losses and a proposed CGT.

The people concerned about prices for years have been trying to prevent the bubble getting worse, they had the solution to prevent the economic disasters. If it goes they'll be proved right, and people like you are responsible for encouraging its inflation.

And unless there is a spectacular crash people like you will be deservedly labelled chicken littles and those people who heeded your "sky is falling" narrative dumb smucks.

Now we know our roles let see how this plays out.

If the worst thing that happens to me is being labelled chicken little then that's something that I could handle. Many people are going to lose their shirts. None of us wanted that to happen, but people like me couldn't stop the greed train.

And those people who listened to you and did not buy when they could have and never will be able to now as the missed the "greed train", any sympathy for them?

By all means, ride it off the cliff HeavyG.

What ridiculously circular reasoning.

All the people that bought your advice that it isnt a bubble... who's fault is it they bought in 2015?

I don't give advice, unlike you DGM know it alls. Those who listened to the DGMers in 2012 and now have to pay twice as much for a house after paying rent for 7 years. A 50% crash is minimum for them to be in a similar position. You calling that big of a fall?

"Faux concern?" Jesus, what a prick. You clearly have never lived in a country while a housing bubble burst and seen the results.

In Australia its estimated 9% of households nationwide are already in negative equity. If prices fall another 10%+ percent its going to be horrible financial situation literally millions of families.

But the only thing you care about is "I bought in 2002 so I won't lose money". Fuck all those people who were stupid enough to be teenagers in 2002, right? .. They should have pulled themselves up by their bootstraps and got on the property ladder.

It’s a good point. We really haven’t seen it before in NZ and Oz in anyone’s lifetime, but ask people from Ireland. The human toll is devastating, with higher domestic violence and suicide rates (already high in NZ). We’ll need to take care of each other, not play the blame game and turn on each other. Crashes are brutal.

You're the one praying for a market crash. Probably hoping to swoop in like a vulture and pick up a cheap property. Buyers should have done their maths and ensured they could pay the mortgage. With rates as low as ever very few should default. That would really piss you DGMers off.

No one has been crying wolf about a global credit expansion, that has been particularly evident for the past 10 years. And they always, *always*, end in tears.

You may have thought you were smart "investing" in this market and look in the mirror amazed at your own brilliance.
But this has been nothing but a fool's paradise. It's always only been a matter ot time, it's just that Central Banks have gone to *any* length for years to keep the party going... but now the punch bowl is empty.

I've made some money but I'm completely out now.

Everyone thinks they're an expert but scratch the surface and 99% don't have a clue about the fundamental driver of prices - the money supply.

Nah, Auckland and Sydney are declining in unison because of a decision by the Chinese Communist Party.

According to this article median is down 2.3% and average 0.1% year on year, not quite the double digit decline of Sydney

According to this article, Auckland's median has dropped 11 percent since peaking in March 2017.

Was nice that the peak and current numbers are so perfectly rounded. (900,000 peak, 801,000 current). Hmmm, 1/9 is 11% decline by my memory. Of note is that it erases a previous 12.5% increase, so a decline % value may have somewhat more significance than a % increase value, particularly when it gets much in to the double digits. For example a 50% decline erases a 100% increase...

I would argue that allowing a speculative debt fuelled bubble to reach dangerous levels would be the "gross mismanagement". Failing to address supply issues, drastically increasing immigration, allowing rampant high LVR and Interest Only lending, and allowing taxation distortion that heavily favored property investment were all examples of "gross mismanagement".

I just think it's really sad that a basic human need, a place to call come, has been the centre of such a speculative frenzy.
But I don't really blame the speculators. It's the lawmakers that have allowed this to happen. Oh, the wonderful outcomes of neo-liberalism!

Yes, but March madness now, so all good.

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Nek Minnit, NZ following Straya. And they said this wasn't possible, we are diffrunt!

* diffrunt

Opps, sorry. corrected.

See what happens when you threaten people with a major new tax system , and apart from a bit of water separating us we are not that much diffrunt to Straya .

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See what happens when you let a big property bubble inflate and deny that's what it is, and then expect a soft landing.

@voiceofreason I cant argue with that remark the market had developed a momentum of its own and had become disconnected from reality

Ironic given that the people who really set the launch pad up and did nothing are now lecturing everyone else about how it's evil and they must be taxed for hopping onto their rocket.

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Dive, dive, dive.

... nah mate ... its all fake news ... don't believe a word of it ...

Keep buying , folks ..... buy buy buy ...

... ( pockets me capital gains free loot .... ) .... BYE !

Low auction clearance rates and low overall sales, prices still mostly moving sideways. Is the knife at the apex of its trajectory and about to fall, or are we going sideways for a while longer yet?

Yes, prices surprisingly resilient, somethings gotta give soon.

The housing shortage is still soaking up the decently priced "affordable" places.. for now. Soon we run out of those that can afford these "affordable" places and are not able/willing to wait for prices to fall. Only question now in my mind is do they manage to pull off a slow decline, or are people going to get burnt hard.

How long till LVR limits get wiped completely?

Probably not long. It won't help in the end.

If you end up in Australia's situation where prices are falling at a genuine 10%+ per annum, most banks won't take a 5-10% deposit anyway because they know that equity is less than a year from being gone.

Any idea what deposits banks are requiring over the ditch currently?

I only have a few anecdotes to go on. As recently as 3-4 months back they would look at 10% - but with a parental guarantee.

Mortgage arrears are ticking up as well.

It's a brave bank that lends irresponsibly knowing that prison sentences and class actions are very much on the cards in future.

So do we starting taking bets on some sort of housing corp loan scheme where the govt lends directly (you know, sorta like some of the schemes the boomers got)?

They will throw the kitchen sick at it, but will they succeed?

Our own Fannie and Freddie? Maybe big first home buyer bribes like Australia had?

I don't know. But I agree they will do anything they can (also like Australia). It's crazy but predictable.

Catch up with the play buddy - the “knife” you’re so scared of catching reached it’s apex in late 2016.

I ain't your buddy mate.

I ain’t your mate, sunshine.

Good, glad we cleared that up.

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Now, now, boys. Behave, ya don't want to be put on the no fly list with PP2F.

(ง'̀-'́)ง ╚(ಠ_ಠ)=┐

In a way you're right.

The knife people caught on the way up was debt.

Now those same people, who are a bit slow on the uptake, are just realising they got stabbed.

It's already falling in Auckland, but I'd say expect about -1% a month when it really gives. That's what's been happening in Sydney and Melbourne.

"The market is progressively hardening into a buyers’ market with a number of vendors preferring to take their property off the market when they cannot achieve their asking price."

This will not be popular with agents. A few marketing dollars but no commission. I'm sure agents will be "managing" vendors expectations harder than ever....they need sales volumes after all.

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27

I don't understand... I took a graph of house prices over time and fit a curve to it, extrapolating it 10 years into the future, which told me that my half million dollar weatherboard home in the suburbs of Hamilton would be worth $2.5 million before 2030. What happened?

Ah, driving forward with eyes fixed firmly on the rear view mirror.. Let us know how that works out. :)

You'll be lucky to get $250k for your weatherboard home in 2030.

so true.. but what will the patch of dirt under it be worth?

With global warming going at this rate, Hamilton will be too damn hot to live in 2030. I'd head south to Steward Island.

Arent you in sydney, how freakingly hot will that be?

Nah wouldn't live in Sydney even if they paid me in gold. I'm in bogan's Brisbane !
Got 10KW Solar on the roof.. I have aircond..I'm sweet!

.

a4AUh, you ask what happened? It's not 2030 yet, patience

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23

Boom Shacka Lacka

Barfoot's have not updated that cool house price chart that only shows house prices going up..

The first 10% of falls are always orderly.... Disorder turns up to the party a bit further down.

No that's the air nz and sky tv graphs you are watching

Assets prices are like Bankruptcy - decline slowly at first and then all of a sudden.

Sounds like you have had first hand experience of the harsh downside hahha

... yup .. bankruptcy and falling housing markets are alot like diarrhoea ...

First there's the ominous little bubbling and gurgling ... some belches and a pip or two of hot air ...you think , nah , I'm good , she'll be right , nothing to see here ... then the first little squirt ... oh oh ...

... after that the sudden uncontrollable WHOOOOOSH ... as you lose the lot ...

Nappies full of the brown stuff ... you're wiped out ...

TOO MUCH INFORMATION! Isnt there a diarrhoea pill to sort out that problem. Ditto for housing, the ocr

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"a number of vendors preferring to take their property off the market when they cannot achieve their asking price,"

Translation - "There's many embarrassed vendors wanting to part company with investments for which they once boasted. They'll only end up receiving less tomorrow"

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I've heard comments from vendors saying: "China needs to come back to the table" and "the banks need to loosen their lending standards again"

They're desperate for a greater fool. They were caught with the hot potato. They also want to encourage a bigger bubble? These people are the problem.

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Better to take the -10% from peak hit now, rather than -30% or more later. See some parts of western Sydney right now, and it's not finished yet.

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1. Prices are increasing - "Prices will rise forever"
2. Prices rises slow down - "temporary blip, will start increasing again soon"
3. Prices flatline - "just taking a break, ready to start on upwards in summer"
4. Prices start to drop - "will stay flat for a while"
5. Prices drop faster - "a small 10% fall then recovery"
6. Proces keep dropping - "umm, ahh"
7. Still dropping - "please buy my house, good time to buy you know"

Better for you to stick with shares kiwimm

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My impending early retirement agrees with you

I am pleased for you, are you going to shift to one of the regions

More like:
3. Prices flatline - "just taking a break, before following the “rule of thumb” whereby property values roughly double in Auckland every 10 to 12 years"

If I have one hope, just one hope, from this cycle is that we flush out charlatans like Ashley Church once and for all.
I can't believe anyone takes these reckons seriously - there is no way you could make such cavalier forecasts about any other asset class:

https://www.oneroof.co.nz/news/property-market-will-take-off-again-in-20...

"We know from experience that property values roughly double in Auckland every 10 to 12 years and, based on this “rule of thumb” I’m of the view that the next cycle will start in 2021/2022 and that, by 2026 or 2027 the median house price, in Auckland, could be around twice what it is now."

https://www.oneroof.co.nz/news/property-market-will-take-off-again-in-20...

"most of those regions which are still seeing growth follow Auckland into a general flattening period"

Meanwhile in regional cities ....

Retired poppy has a single for that but the song sales just arent happening

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It's no coincidence that house sales and house prices have dropped in the same month as the proposed Capital Gains Tax was announced.
Even if the tax is watered down, it will be too late.
The timing was dreadful, the effects predictable, and the consequences unstoppable.
The Big Slide has well and truly begun.

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...yup, the floor is now starting to give way. CGT or no CGT, it was coming anyway.

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Next we'll find out there wasn't actually a housing shortage, just an affordability issue. It always turns into a perfect storm in a crash.

@VOR of course you are correct , it was always an affordability issue , rather than a shortage of land to build houses

Lest we forget , we are the same size (roughly ) as the UK

We have under 5 million peeps

The UK has 65 million

There is no shortage of space here

Even the watered down CGT will have investement houses targeted and Investement properties can only escape CGT if the CGT is dropped in totality which is highly unlikely.

Yep talk of CGT is blame, the coincidences are 3 months ago the FFB, 2 months ago the anti money laundering, legislation lowering some rental yields, lower capital gains in Auckland and a now more obviously crashing Aussie housing market, which all have nothing to do with low sales.

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rubbish!

Its only been 2 weeks since the CGT working group released their recommendations on 21st Feb.

Its nonsense that that would have scared of all the buyers in the last week of the month.

@glc nonsense , which rock have you been hiding under since the 2017 election ?

CGT has always been a key policy of these clowns and jokers , even though they downplayed it during the 2017 election campaign

I can't see a noticeable change in the graph for November 2017.

We'll have none of that logic stuff in here thank you very much!

I disagree. The CGT will, if anything, put upward pressure on Auckland prices as rentvesters sell the provinces to become owner occupiers in Auckland thereby avoiding the CGT. What nobody talked about is the anti money laundering phase 2 on 1/1/2019 which further targets the price setting foreign buyer. Prices in Auckland have to fall a lot further before locals can afford to buy.

Not disagreeing about the CGT aspect.. its not the cause. But how many rentvesters are there out there? Wouldn't be enough to make much of an impact I would have thought.

Smart specuvestors bailing out of the regions as soon as they are free of the brightline test and quietly picking up stock in the main centres if the economy starts looking a bit limp would be more my call. (or just pocketing the gains and calling it quits for a while.)

Yes agreed, It's a good question regarding the number of rentvesters. I know about 20% of the people aged below 40 at my old workplace in Auckland were rentvesters (with properties in the provinces).

Interesting. Did they end up being rentvestors by accident, ie owned in the provinces then moved to Auckland (for work etc) and rented out the house instead of selling?

Well it's an unreliably small sample size - that 20% corresponds to 3 people and one of which is me. I believe they all purchased outside Auckland to get better value for money, ie more capital gain, and better rental yields with the x dollars the bank would give them. There must be a lot of people who became accidental landlords through inheritance.

That is exactly what happened to me - rentvested by accident and got out in the last 3 months.

@ Pat; Yes agreed, it is the AML Phase 2 regulations that have cause the upper price brackets to shift down recently.

I pointed this out to Zachary, that more expensive areas of AKL are going to find it a lot harder to make a sale with just hard working wage earners. They're try to kid themselves in to believing that the average salary in Auckland is $200k when it's actually less that $70k.

Roll up, roll up! Watch the paper millionaires deflate before your very eyes!!

In the mean time we have existing owner occupiers playing musical chairs with houses where prices are of little consequence. 2 existing owner occupiers with identical properties could in theory swap houses, pay each other 20% over CV, the sales get registered as that but no money exchanges hands.

yep - Martin North had an interesting interview with an Irish economist who claimed peak to trough losses in Ireland were between 50 and 70% over 7 years. The jig is really up when buyers believe prices will be lower next year. I don't think we're even at that stage yet

BigDaddy, "It's no coincidence that house sales and house prices have dropped in the same month as the proposed Capital Gains Tax was announced"

I thought you knew property BD, the CGT was announced mid February, it takes much, much longer than 2 weeks to prepare a house for sale, list it, show it to buyers over several weekends, sell it and then finally settle (=getting paid for it). Sadly, no doubt you will get plenty of thumbs up for your comment...

"Potential buyers in the lifestyle and rural market are showing an increasing awareness of the effect increasing building costs are having on prices and are seeing existing properties as a good option compared to buying bare land and building a home," Thompson said.
In other words, the value of existing homes is stable to increasing whilst the cost of building a home, including rampant council charges, continues to rise. Rather blows all arguments out of the water. Fhb and renters still have an uncertain future.

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and this is Houseworks, reporting to you from Mars...

Seriously now, no region of this great country of ours will escape whats coming. Going by the latest lending to groups by percentage, property from an investment perspective has lost its allure. Only the naive and blind are buying in this market with expectations of quick gains.

Smart investors are already out, the remaining are just possums (like yourself), caught in the headlights, praying for a quick traditional turnaround.

Reporting from beautiful regional nz, making money and idyllic life

Ha-ha-ha :)

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

“The chances of anything coming from mars are a million to one” he said
“The chances of anything coming from mars are a million to one – but still they come!”

Retired poppy I win again and you lose hahaha

"hey boys and girls, look at me, I'm winning, look at how far I'm ahead" - THUD!

Better to be a winner than a whiner

From my perspective, being a whiner is good as long as you dine at the same time. Why are you obsessing over the spot price of one Hamilton based property? Wouldn't it be great to afford to set time aside, sit back and relax?

When you realize greed isn't good, life will truly become great.

Are we surprised !

Wait and Watch !

Well you are on to it ......... no we are not surprised at all .

The sales prices of Auckland houses had become disconnected from reality , and have remained so .

What we may be missing is that prices of "secondhand" houses has increased in unison with the costs of new builds ( construction and land costs ) , so its going to be interesting to wee where it all ends

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After a loooong plateau the price direction has been decided upon... Falling off the cliff... Seat belts fastened?

As have always been saying and many knows that by Aprill the direction the market is taking will be confirmed and all indication are that it is going Down and yes that final push is still awated off the cliff.

Saw news yesterday that was mentioning that Sydney market down by appox 20 %.

NZ market though down is still holding at a certain low level but the question is for how long. If the current resistance fall, it will be very bad.

PitU, at the bottom of the article there's a graph with the option to see "average and median values" look the graph, you can also scroll at the bottom to go back in time

Yes, thanks, that's at I've gone by. The median value... The (upward) trend was broken a couple of years ago, now trend reversal has taken place and its breaking down to the downside.

Interesting stuff. Anyone want to predict how much Auckland's February HPI will be down YoY once the REINZ figures are released in a week or so? January was down about 2.1%. My guess is 3.5%.

given 50% of our gdp is based on property in some form it doesn't take a rocket scientist to figure out that we are heading for recession. transformational economy my arse.

... and cow sap and Chinese tourists... (who bought a few rentals while here...)

As long at it takes the COL and Taxinda out, I'd happily see a halving in values. Blessed are the financial conservatives for they shall survive.

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Will it though? All evidence points to National's mismanagement of housing (and Aunty Helen's before hand, but that will have been forgotten about) - sure a few might be fooled by a National narrative that says otherwise, but enough to win a no-mates election?

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I can't take anyone seriously that calls her "Taxinda" it's childish and petty. At least use peoples correct names. If you had a real criticism that stood against anything you wouldn't need to lower yourself to name calling. It goes the other way too when people call Simon "Soimon" or similar.

I haven't enough respect for either her or the old cockroach to use their given names. Roll on 2020 and we can hopefully get a government chosen by the voters, not a secret group of NZF members.

Amen to that.

It's not all bad in Auckland according to OneRoof:

https://www.oneroof.co.nz/news/36040?ref=nzhhome

But there are still pockets of growth in the city. Lifestyle beach spot Omaha drew 11 percent to just under $1.5 million. Apart from rises in Auckland city centre (up 7 percent to $458,000 reflects better quality apartment builds) and double grammar zone Epsom (up 6 percent to nearly $1.8 million ) the growth is further and further out of town, as buyers look for affordability or brand new shiny subdivisions: Manukau and Wellsford up 6 percent growth (to $499,000 and $560,000), Whenuapai, Oteha and Gulf Harbour.

I trust HPI more than median sales prices and HPI paints a different picture.

There are still articles springing up in Australia about the "Suburbs beating the downturn!" when the general consensus is 20% peak to trough falls.

If you take a small enough sample size you can find data to support almost any hypothesis.

Omaha - according to literary genius Bridges - Is the "kiwi way of life". Bloody cheap life at 1.5m.

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"However inventory levels have been almost unchanged for the last two years..."
Honestly, I don't think I quite believe that, from what I'm seeing on the streets. Anyone else? Something's not quite right with those numbers.There's considerably more than usual on the market right now, and it's hanging around longer, especially in areas with a lot of rentals.

I think they are specifically referring to Barfoot’s situation in that quote.

However, the overall rise in Auckland inventory levels is a reality – mentioned in several previous articles on this site.

Yes, I think Barfoot is relatively transparent with its numbers. I know that it has become difficult to even get accurate, up to date numbers in Australia. A sure sign things are getting really nasty.

There's 14060 Auckland house up for grabs on the Chinese version of realestate https://nz.hougarden.com/house-search/type_residential_region_e5-a5-a5-e...

Which I found interesting.

Much of that inventory overhang in the market is rubbish .

For example :-

1) Sections so steep they are only suitable only for mountain goats
2) Or so wet they are only suitable for eel farming
3) Houses so derelict only suitable for rats , and the yard looks more like a scrap metal merchant than a home
4) Or so leaky they resemble a collander more than a dwelling
5) or so close to a motorway that if a truck passes in the night you think its in the bedroom
6) or houses that are so overpriced that not even the slackest Bank Manager would pass a Mortgage over it
7) or properties 100's of Kms from Auckland offered at Auckland prices , and being advertised as "just a few hours from Auckland "

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You've described 85% of most homes in NZ.

Yep, i think the stock level for auckland on Realestate.co.nz didn't actually rise over the last week, sales/delistings are keeping up with new listings.

I'm seeing Sold signs popping up everywhere around the One Tree Hill area. Indian Summer surge, maybe?

I'm seeing signs that have been there since before Christmas, and some being taken off the market.

One Tree Hill area - gotta be real careful around there - leaseholds to the Cornwall Park Board.

For the thousandth time, we have the doomie gloomies excited about impending doom. Have you not learnt your lesson the other 999 times? For a change maybe hold off on the celebration until there is some actual doom for you to wallow in? At this point most here have predicted 20 of the last 0 economic catastrophes.

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Thats just ad hominem mate. Whats your view at this point in time on the property market?

Lets focus on whats right or wrong, not who is right or wrong.

@Buylowsellhigh .............. methinks this time is somewhat different .

There is a new tax that WILL be introduced in some form or other that will make investment in housing rental stock so unattractive that it will be like rats off a sinking ship .

Problem for Government is Newtons Third Law of motion is likely to kick in ............ tax those supplying rental stock and in the absence of new houses to rent, the cost of rentals will go up

If you are a rationale price setter you are already charging the maximum the market will bear. If your costs go up your decision isn’t whether to raise rents, it’s whether to exit. The only way rents go up significantly is if you see costs rise leading to exits, leading to reduced rental supply, leading to rental increases. But if that chain happens house prices will have fallen first.

Exactly. And landlords exiting the market doesn't reduce the total supply of housing ... they will just have to sell to a FHB who can't afford to pay inflated prices.

So a whole bunch of want to be owners will be able to pick up the houses that these "investors" are selling at good prices? And the serious investors will also be able to buy more stock at good prices, meaning better yield at the same rents, And CGT doesn't matter to them, because no sale = no CGT. The serious investors are going to keep on HODL.

@Pragmatist ........... good points raised , the market needs a "correction" and this may be the start of it

I don't think that there is certainty a new tax WILL be introduced in some form or another. With Winston playing his hand, anything introduced before the election will be very watered down. Perhaps even just an extension of the brightline test to 10 years, if anything at all. And IF anything is introduced before 2020 it may well cost Labour the election, in which case National will repeal the legislation before it comes into force.

I absolutely agree with you about Newtons Third Law of motion though. Between Healthy Homes, ring-fencing, letting fees and CGT uncertainty, I think we are seeing the calm before the storm in terms of rents.

He's one of those must always be right people.

For the record, this is the gloomiest outlook in 10 years, so some gloom is to be expected. I would go as far to say that we are in a net gloom period.

BLSH, False, I've been optimistic about constant rises in the NZ market, even though it has been bubble-like for years, up until mid 2015. Over 20% a year gain in Auckland after double digit years before that was the signal for me. I thought Sydney night have turned sooner (about 2012), but it just kept on going into the stratosphere. Now it's going to give a lot of it back, possibly back to 2008-10 levels.

Didn’t you get the memo, this is the doom.

Oh, that's a relief. I was under the impression that doom would be a bit more serious than essentially flat prices in Auckland and price growth nationally.

I'll stick the note to your back window so you can see it with your rear view mirror

Rear view mirrors are installed in cars for a reason. It pays to use them from time to time and ignoring yours completely is ill advised.

Agreed but trying to drive only using it tends to be a bit crashy (pun intended).

BLSH - of all the forward housing indicators, which are pointing to this ending well?

What do you mean by “end well”? If you give me a specific prediction or statement I’ve made that you disagree with (I’ve made plenty), I’ll give you a specific defence of it.

I am giving you the chance to define this. I'm interested, based on current metrics (rather than historic), how you see prices going.

This Year? Flat in Auckland (2.5% either side of 0). RBNZ has given a strong indication that interest rates are going to stay low. Some even predicting a cut. Construction not making a significant dent in the housing deficit. Immigration, while falling, still high. Recent easing of LVR. Bottom of current cycle in 2021/22. I've said all this ad nauseam previously. Happy?

What do you think regarding falling average/median/HPI prices, high inventory, lengthening days to sell, GDP growth slowing, high consents, falling investor buying $/%? Do any of these signal a falling price?

Not enough to cause the crash that so many here are hoping for. The market is cyclical (heads explode - you're only looking in your rear view mirror!!!), and has been slowing after a very strong upward phase that peaked in late 2016. By how much are you predicting prices to fall this year in Auckland?

Predictions are a mug's game. I prefer to assess risks. The risk of a fall in the next year is currently larger than the upside risk and the gap has widened each successive month this year.

It is exceedingly difficult to time the market, which is why it is never a bad time to buy property if you are in it for the long run. Despite my username, my view is that the property game is about buying and holding, not buying and selling. That said, this is an anonymous internet forum with nothing on the line, so I'm surprised you don't have it in you to throw a prediction out there.

I'm expecting the bottom of the current cycle in 2021/22, so I don't disagree that the risk of a fall in the next year is greater than the upside risk. Unlikely to see substantive fall this year, and less likely to see substantive rise. Given that I'm not going to be selling, I care more about interest rates and rents to be honest.

BLSH, I would say now is a very bad time to buy NZ property, compared to 3-5 years from now. That’s my prediction. I’m saying at least 30% lower than the peak, perhaps much more in many places.

As someone who doesn’t own ( and would like too), I would love there to be a 30% drop, however....one needs to be careful of what one wishes for. What would it do to the economy and employment?
Prices might become a lot more affordable, but if a lot of people are out of work...
Also I just don’t see a 30% drop happening. 10%, maybe 15%, yes.
I think overall a 15% drop then steadiness would be the best outcome.

Good on you for putting your views out there, but you have a tenuous grasp on reality.

During the last GFC prices fell 10%. If there is another GFC we can expect similar year on year. But only if there is another crisis. And even then, a recovery is likely within two years. We are most likely in for a flat market in Auckland, fluctuating within a narrow band until 2021/22, when I expect prices to start to rise again. The worst property shock NZ has ever experienced was in 1975 when our economy was devastated by the UK joining the common market, combined with an oil crisis. This is as close to economic armageddon as NZ could face. Prices fell 38% in real terms over about five years, but nominally prices actually steadily increased. Your 30% drop would need to be brought about by an economic catastrophe for NZ. Despite some global risks, there is very little evidence for this being on the horizon.

Now is a good time to buy a first home as you are in an excellent position to negotiate a good deal, there is plenty of choice, and NZ’s economy is doing fine. A FHB that gets into the market now will be sitting on a very healthy capital gain in 10 years time.

The fewer FHBs that read this conspirorial DGM infested comment section the better.

FYI, during the GFC in 2009, the median sale price in Auckland for Barfoot and Thompson fell 12.9% from its peak to its bottom.

Currently the median sales price for Barfoot and Thompson in Auckland has fallen 11.0% from its peak. The current environment is that there is still a growing economy, low unemployment, low interest rates, and no global financial crisis. The current median sales price drop from the peak in Auckland is near the GFC levels and the current economic conditions are much better than those experienced during the GFC.

Agree

For you looking at historical trends seems to amount to "Past gains predict future returns".

A rational person would look at markets that have undergone a similar price appreciation (Sydney, Melbourne, Ireland, Spain, US, UK) and what inevitably happens.

Sellers will just sit it out unless they are put under financial strain. Kiwi's move house far too much and for no good reason in this country anyway. The days of house flipping for big gains are over. Still not really seeing the negatives as yet.

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Problem is, a big chunk of the NZ economy and sentiment is fueled by the property churn. Without lots of sales, a lot of industries will suffer, which will have wider economic repercussions.

this is true, next we will see an uptick in liquidations, kitchen refurb places, wardrobe supplies etc All this ticks along on turnover

Also the "wealth effect" of people feeling spendy because they have rapidly increasing home values and the unshakeable belief that this will only ever continue.

Us kiwis are world expert in talking ourselves into a hole :) just saying

The reason is speculation, but those days are over, perhaps for as much as a decade.

Sorry, but got nothing to do with CGT, as it won’t come in!
There are several things that have slowed down the buying in Auckland!
Christchurchmarket is still very stable and will remain so!
The ring fencing of losses is probably the biggest negative, followed by the Banks conservative lending policy at the moment due to Auckland prices being too high!
The Capital Gains Tax is not coming in but even if it did, it isn’t till 2021 and is only on future gains!
This CGT will only increase prices and will only hurt first home buyers as the well heeled established investors will do just fine!
Personally I will begin to trade property, and there will be a lot to made I guarantee!,
Interesting times ahead, and more and more pressure on the so-called government who can not take a trick!

@The man 2 ............ its a bit like Donald Trumps wall .

CGT may never happen , but its enough to scare the market and send a message that property investors ARE NOT WELCOME

Donald Trumps rhetoric cause illegal immigration to fall by as much as 70% ...........Just the threat of the wall and the message it carried was enough to cause illegal immigration to fall .

Would anyone in their right mind buy an investment property with the threat of a new tax hanging over them like the sword of Damocles ?

The other points you raise are interesting .Chch is a special case , the Population has dropped and there is am over-supply of land ( Unlike Auckland )

As to hurting the well-heeled , this never happens in the real world .

Firslty , many of the so -called well heeled wont sell the assets which are often unencumbered ,

and secondly , their structures are often tax effiicient , and they use the debt bearing capacity of exiting assets to acquire more assets when asset prices fall

"Would anyone in their right mind buy an investment property with the threat of a new tax hanging over them like the sword of Damocles"

This is the problem. The reliance on capital gains in the rental business model

That's exactly my point about windfall gains on an earlier thread. Anyone buying an investment property right now is not doing so on the basis of capital gain which can NEVER be guaranteed. Even when the market has risen a bit, people say its the top of the market, dont buy now. So you ALWAYS have to swim against the tide of others opinion and make your own choice and why should investors face that risk and then have to cough up HUGE percentages when all that happened was a windfall gain? The only reliable return is the rental.

Why you screaming Man2? You so restless

I thought he was typing

Christchurch is stable because it’s the cheapest market in New Zealand. Have Palmy and Dunedin passed it yet?

Don’t get me wrong I think this is great. Being cheap and stable confers great competitive advantage but let’s not pretend it’s a speculators paradise.

@ THE MAN 2, the problem with CHCH is Timaru is just down the road.
As it stands, Timaru is like the armpit of NZ/South Island (or whatever they will call S.Island next)

A lot of great things come from Timaru, not the least our sports person of the year, Tom Walsh

BLSH - Its different this time.

Why is it different this time?

And to you, why is it the same?

You’d best ask the individual that made such a claim.

Because I would like your opinion

Glad you're hanging on my every word.

It's good to listen to opposing views then re-assess the situation

A good approach, but I don’t have a position, other than that the course of cycle is likely to be the same, but the drivers are likely to be different.

Was just reading a book the other day by a fellow who shorted Fannie Mae and Freddie Mac then made a big loss when the market stayed bubbly. A short while later the crash happened. Point being, the market may be irrational and may be turning, but it can be slow up to a point.

@Rickstrauss , just shows that predicting the market is way harder than one can imagine , and timing it is even harder.

We all know that Auckland property is disconnected from reality
We all know there is some kind of correction coming
We all know that the Government is not going to allow you to write off losses against other income in the future .
We all know that the tax treatment of the gains is going to change in some way shape or form

We just dont know when , and you can run out of money while waiting for the event to get to the sweet spot

Due to humans and their risk models underestimating tail risks, you can make more money out of downturns than you loose in upturns. See Nassim Taleb's work for reference.

In other words: the fall is always worse than expected and harder to predict than you think

Good points, Boatie.

Other things that feed into it:

1. Those who are younger and expected to be the ones taking on the big debts on these properties would be perfectly fine waiting to see what happens as long as properties are going down in price.

2. Many of the same will be those who will have internationally desirable skillsets should there be a recession in NZ. Ireland's reversal in immigration following their housing implosion illustrates that too.

Yeah its better to be Lucky then Good in Markets

And so it starts....

Nothing like a shake up in the housing market to get the chattering classes going ............. 100 comments in very quick time

With Sydney down 13% and falling fast it feels like its really got legs this time.

Sydney schmydney. Auckland will be perfectly justified being more expensive than Sydney. Auckland has beaches, an Anglo-saxon background, and high living costs that add appeal.

and a good reliable supply of meth!

And the stupidly leveraged in debt reaching for their Pepto bottle.

*holds mirror in front of the man with at least half a dozen posts on this page*

Here, this might help you wipe that superior look off your face while you are down here with the chattering classes

At present, you are leading the post count in comparison to Boatman. Got a mirror handy? :)

It is not myself whom has been referring to the peons making posts in this comment section as "the chattering classes".. now back in your cage ya mutt. :)

It is only yourself that has used the word "peons"... As to the chattering classes, there are a few folk that post frequently on this site that may fit that description!

I see that went straight over your head. *shrug*

Ignore pragmatist he must have been having another "discussion" with his landlord as to why his rent increased again

That time of month again? Or just tetchy because you were banking on capital gains and now you're feeling a bit exposed with so much leverage?

Try again dude you missed by a country mile

As did you. You want to take potshots, expect the same back.

Indeed, including Boatman himself.. that was the point.

This has been coming for a while. The reality is probably worse if the amount of agents exiting Real Estate bailing out is anything to go by. I must say its been surprising how blind the Bulls are in the face of steadily growing headwinds in the speculators paradise. Lets look st the stuff the Bulls said would never happen Brexit, Trump, Nat Exit, ring fencing change, China money for ever, building WOF. The only thing that has been consistently right was interest rates staying low, and the ACC continuing to be tards.

Banks interest only and low rates are the last foundation remaining in the speculators paradise. If that changes buckle up.

Thanks for the average and median price charts!

When a 150sqm houses costs about $375k to construct (a budget level building at $2,500 psm) without considering land and council fees etc, then surely there is something as a bottom value for house prices. There is no indication that labour and material will get any cheaper.
What is a bottom value for NZ property? is there such a thing? I know the formula for affordability (generally defined as a multiple of average household income) but surely there must be a measure of feasibility of building new houses (i.e. the land price, material, labour, profit margins etc) and any discussion about housing market need to consider both simultaneously?

The five stages of a housing bubble are; euphoria, doubt, denial, disillusion, realism.

In our largest city, buyers are having doubts, vendors are in denial. Any guessing as to where both will be in say a years time?????

In your house?

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Creep.

Yvil, does editing your comment to read "house" instead of "bedroom" make it less creepy does it? For the sake of those around you in the real world, let's hope it was a one off (yet embarrassing) typo.

Doesn’t Yvil own some dodgy motels in Timaru or something?

See my comment below. I think the Mexican stand off will continue, but more people will begrudgingly accept 5-10% lower.
I think this will place a floor on the decline.

I was looking to see what's available in the property market. I saw one property with a valuation of $1.1m and asking for $880k, with some vendor finance possible. We're not seeing widespread mortgagee sales (nor do the banks want them on a large scale) but there is a new element of desperation to sell emerging.

People can only demand a high price until reality sets in.

Boatman, ChCh population is growing as well as its popularity!
ChCh is not a cheap market but a very affordable one, with opportunities to buy very well if you know what you are doing!
It is the negative gearing ringfencing, plus the healthy homes requirements and tighter Bank lending that has slowed the market in many places!
CGT is a total yawn and not worth talking about as this Govt. Has made no decisisions and won’t havecto either as they are going to be voted out!
Prices are going to increase if it was ever introduced and will suit seasoned investors no end!
Bring it on Labour, you are clueless!,

You're responding in the wrong place grandpa

Over here we still get CHCH people coming over for long term.
In fact we have two new staffs from CHCH working in my office since beginning of the year. The feedback I get from them is just lukewarm...

Judging by the length of this column and the rate at which hits are accumulating (170+ posts in less than 5 hours) on a Monday when people should have their heads down at work, there's still a mighty lot of interest in the Auckland housing market......

What's new?

TTP

I know you havnt been around for a while, but maybe try reading the article and you might learn something new

Lowest sales volume since the GFC
Median down
Average down

It's a bit harsh calling the average down when - 0.1% down, don't you think so?

Average is down a bit more than 5% from peak, and 3.4% in the first two months of the year. Where is this 0.1% decrease you speak of?

this has been building since the last year or two of the last National government. Theres been a lot of tightening up, especially from Chinese money moving into the property market (laundering, illegal funds expropriated from China etc) it was an enormous volume of cash set in motion for such a small countrt and it has taken some time to dissapate into the system. The bubble is definitely deflating...don't get caught!

Exactly. As per my comment below, the weakening started well before the change of government.

To be fair though, the property bears are just sour because they haven’t been invested in a housing market that has done very well!
Most property investors will just ride it out and continue to provide shelter to those that don’t buy for a variety of reasons!
It is what it is, as they say!
There are always winners and there are always losers, it is which one that you choose to be in is the deciding factor!

Remember people only crows loudly when they are in the winning streak, and disappeared altogether when they are on the losing side. In any (risky) investment, you'll win some and lose some!

Chairman, property investing done correctly will always be a winning streak!
Positively geared and bought right is a winning formula!
Not talking about speculating!

Things have been ever so slowly weakening for the last two years, well before the government changed. Extension of bright line test, FBB, anti-money laundering and talk of a CGT are just slightly accelerating this weakening.
Property prices in Auckland are still way too high, it's hard too see which fools will pay the asking prices.

FHBs - most can't afford the prices...
Investors - stricter lending, returns usually poor, less guarantee of big gains, a CGT likely, new tenancy requirements and costs....
Downsizers - yes, if they can sell their home

In terms of the latter, how will this affect retirement villages? My 78 year old father is looking to sell his house in Wellington in May/June, and then move in to a 2 bedroom retirement apartment. But he has told me if he doesn't get his bottom line price (about 10% below the CV of $1.3 million) he'll simply stay in his property. He's still reasonably healthy. Must be a few people like him around.

I guess this kind of behaviour might hinder the potential decline in prices. As long as people don't HAVE to move, they can just withdraw from the market.

There will probably be people like my dad who can live with a sale 5-10% below CV, which might result in an ongoing Mexican stand off, and mean a a price decline floor of 5-10% eventuates.

Time will tell.

Yes – I’ve been wondering about the retirement village phenomena.

A large amount of supply about to come on – with pricing expectations that may be hard to fulfill.

These things seem to be priced and move to the market value of traditional large comfortable baby boomer homes – going forward this could be problematic for the Rymans of the world – who up until now have done quite nicely from the boom/bubble.

Could also be problematic for those expecting a sizeable inheritance from the existing residents when they’ve gone.

Meanwhile how many retirement homes/apartments are coming on the market around the country?

Quick look at Ryman’s 5 year chart.

Share price peaked around August last year around $14 – now around $11.

This has been a darling for years – primarily based on non-taxable capital gains?

The chart looks a little ominous.

Saw the following posted in January on Linkedin.

http://iforce.co.nz/i/sm3ozy5w.g53.png

Retirement Villages:
Ryman Healthcare - 39 Projects totaling $899 Million
Summerset Management - 37 Projects totaling $741 Million
Metlifecare Auckland - 25 Projects totaling $679 Million
Oceania Group - 18 Projects totaling $381 Million
Arvida Group - 14 Projects totaling $321 Million

I've been following this for a while - it all screams to me "look out".

I think your withdrawal from the market scenario is exactly what has been happening for the last 12 months - people have been refusing to sell rather than taking a lower price and that has been underpinning the listless sideway drift we have seen in prices.

But I think that changes as soon as we see an attitudinal shift to the question - will house prices go down? If people begin to accept house prices could go down then your father's gamble to ride out the market becomes much riskier. What if prices are lower in 3 years? Can he put off going into a retirement apartment indefinitely? Once people begin to think I'd rather take the 10% loss today for the sale because I think it will be worse in 6 months or a year then that's when the real correction starts. And I think it is beginning to look like we're at that point.

1 Government steps on the gas, encourages a) people and b) capital to pour in from overseas and c) holds interest rates too low.

2 Some time later, house prices start rising. Well paid lawyers in Auckland borrow lots. Low interest rates transfer money from people of modest means in the regions in order the subsidise their borrowing. Government think they are very clever. Auckland house owners think they are very clever. Lawyers think they are especially clever.

3 House prices rise dramatically, not everybody happy as wealth has been transferred arbitrarily and they sense that. Real estate agents think they are very clever and sophisticated.

4 Government constricts credit flow or puts up interest rates and increases taxes and regulations on property owners. Some time later, house prices start declining, house owners not happy.

5 Government panics as jobs start disappearing, cuts interest rates, opens credit taps wide. Says "Nobody saw it coming". No one very happy.

Seen this movie before. Government policy follows house prices, but with a lag.

What a great result from ideology of running everything like a business.

And like a business, the CEO can skip off to the next gig once the game is looking like it's up.

And now for the reality check: Article: Australian property prices hit by plunging Chinese investment.
Yes and the Ozzy's aren't the only ones hit but at least they're honest about it.
https://www.straitstimes.com/asia/australianz/australian-property-prices...

From your article, "the Chinese created the market"

Now, in their absence they've created a different kind of market.

Nah, money still to be made according to TM2..

pity it's subscription only, looks a good read.
I've said a few times on this website, there is precedence for Asian money being retracted and causing a bust.
I think that happened with Japanese money and property in Queensland, late 80s/early 90s?

As I can't read the article (without subscribing), is the issue in Aus only less Chinese money buying property? Or is it also (more significantly) Chinese money selling down property?

Interesting 1993 paper on Japanese (and kiwi!) buying on the Gold Coast in the 80s. I guess the key in terms of whether history repeats is the extent to which Chinese buyers sell up when things turn to custard there.
In the Gold Coast case the Japanese sold up to get funds back to Japan.

https://www.erdkunde.uni-bonn.de/archive/1993/the-gold-coast-australia-s...

China has come looking for all the money that has been illegally taken out of the country and used to buy real estate.
https://www.abc.net.au/news/2019-02-18/chinas-attempts-to-reclaim-money-...

China has come looking for all the money that has been illegally taken out of the country and used to buy real estate.
https://www.abc.net.au/news/2019-02-18/chinas-attempts-to-reclaim-money-...

I watched that episode of 4 Corners on YouTube last week.... very interesting

Wow, so many comments on this post. It's clearly struck a nerve. Strap yourselves in, it looks like it might be a bumpy ride from here...

Don't you worry

The Boatman contributed nearly 25% of all posts on this article - he is quite rabid against Labour's CGT
Count them

National did a TWG back in 2010 and recommended a CGT (Boatie was here in 2010)

Boatman was totally silent on that occasion - not a peep

His response then compared to his response now tells you he is political - not informative

Need to ask how much he is being paid to stooge his campaign

At present, Boatman has 13 posts...Voiceofreason has 17 posts, Pragmatist has 20 posts. None of these have achieved double digit percentage considering the total is over 250 comments at present. (Fair disclosure, I'll have 5 posts including this one...).

yep there's a few peeps here who are so rabidly opposed to Labour and so rabidly for Nats, it's as if they've been hired by the Nats. They are just not thinking rationally at all.
Personally I don't define myself as left, or right. I've voted for 5 or 6 different parties in my life. Some of my views are leftist, some are rightist. That's why I like the notion of the current government, at least in theory, because some of NZ First's policies appeal to me (eg. stance on immigration), as do some of Labour's (KB, CGT, FBB) and the Green's.
That's the beauty of MMP, in my opinion. Or at least the 'potential' beauty.

Auckland and Christchurch have been the worst performing housing markets in New Zealand for some time now and there is more to come for both of them. Any investor in either market with a touch of common sense will take some of their portfolio off the table now before they both get worse. Even The Boy is selling one of his dumps in Christchurch. He is admitting defeat. Wonders never cease.

He’s only had one offer so far, from the NZ Fire Service.

My favourite city is up 11 places

Gordon, stop trolling!
ChCh market is providing great returns for investors!
Yes we have a property under offer which is not a dump, just not an area we normally invest in!
If it makes you feel better that you think I am admitting defeat then enjoy!
Offer still on the table but you wont take it up Gordon, because it will break you!

People writing on here seem to refer to a cycle beginning in 2002. If so, it had a downturn in 2007-11 when, peak to trough the SALES fell and PRICES fell. Prices in Auckland fell 12% peak to trough. BT median price in March 2017 was $900K in Auckland. yesterday, for February, they said it was $801k. I expect it to go to $670k by trough of this cycle, which commenced in March 2009 (bottom of DJIA.) Prices generally (in Auckland) drop only after sales have fallen 3 years running. That will be about in October 2019 yet prices are already falling. prices are falling for a number of reasons:

1. Too much stock that is over-priced and not in right place
2. China withdrawing international flow of capital that drove up prices in 2013-16.
3. Agents talking vendors down as market will not stand the prices vendor thinks it is worth
4. Credit withdrawal due to Aussie banks being castigated and caught out.
5. Consumer credit growth slipping
6. Overall credit impulse slipping primarily due to China economy dropping fast in last 3-4 months

Market in terms of sales numbers in Auckland will continue down until October and then hold. Prices will fall 25% peak to trough (median) which takes them to 675k in Auckland by end of 2020.

If Aussie banks get into trouble from class actions like one against Westpac, and lose 20% of their equity, things could be worse.

And in many suburbs across Auckland sales to foreign offshore buyers (mostly Asian) before the ban kicked in were in the 25% to 35% region. Will be many Barfoots salespeople pulling out of real estate sales game and heading back to China.

Peter Thompson says "“While sales figures for unconditional sales year-to-date are modest, in the last two weeks of February we sold more than 250 properties each week on a signed off basis (unconditional and conditional) which was 47.3 percent higher than in the first two weeks. It underlines that the pipeline of potential sales is beginning to build."

So it is not as bad as it looks.

Auction clearance rate picked up a bit too, low 30% range overall for B&T (Auckland) last week I believe.

Barfoots peak price was $900,000 in March 2017 and is down to $801,000 in February 2019
https://www.barfoot.co.nz/market-reports/2019/february/residential-sales...

FYI, during the GFC in 2009, the median sale price in Auckland for Barfoot and Thompson fell 12.9% from its peak to its bottom.

Currently the median sales price for Barfoot and Thompson in Auckland has fallen 11.0% from its peak. The current environment is that there is still a growing economy, low unemployment, low interest rates, and no global financial crisis. The current median sales price drop from the peak in Auckland is near the GFC levels and the current economic conditions are much better than those experienced during the GFC

Core Logic value on my home marginally up since 24/2/19 at 94.78%. Now 95.22% of 2017 CV as at 3/3/19.