Nationwide residential property sales volumes well down in April but prices remained steady - REINZ data

Nationwide residential property sales volumes well down in April but prices remained steady - REINZ data

April was a quiet month for the real estate industry with the number of homes sold nationwide down 11.5% compared to April last year, the Real Estate Institute of New Zealand says.

It was the lowest number of homes sold in the month of April for five years.

Prices though were relatively static, with the national median price of $585,000 in April unchanged from March, but up 6.4% compared to April last year.

Sales were even weaker in the critical Auckland market where 1608 properties were sold in April, down 16.3% from April last year, and an 11 year low for the month of April.

For the rest of the country excluding Auckland, sales volumes were down 9.5% compared to April last year.

Other regions with significant declines in sales year-on-year were Bay of Plenty  down25.5%, which was a five year low for the month, Nelson down 16.7%, Marlborough  down 14% and Southland down 14%.

In the Wellington region sales were down 11.9%, in Canterbury sales were down 11.8%, and in Otago sales were down 11.5%. 

April is usually a slower month for the residential property market because it traditionally marks the end of the summer selling season but sales would have been particularly affected in April thsi year because the Easter, Anzac Day and school holiday breaks coincided within a single two week period during the month.

However even though sales were particularly low in Auckland, median prices in the region have remained largely flat for the last three years.

Apart from a brief spike to record high of $900,000 in March 2017, Auckland's median price has remained within a fairly tight band around $850,000 since August 2016 and the latest figures suggest they show no sign of spiking up again anytime soon.

However the REINZ's House Price Index (HPI) for Auckland, which adjusts for differences in the composition of sales, was down 4.4% compared to a year ago and is now at its lowest point in the last three years.

"This may be due to the fact that we've seen some cooling in the past few months across some areas of Auckland," REINZ chief executive Bindi Norwell said.

And although the HPI for the rest of New Zealand excluding Auckland was up 6.7% on an annual basis, it was down in 10 out of 12 regions in April compared to March.

The last time the HPI showed a similar monthly decline was December 2010.

"With sales volumes down in 13 out of 16 regions we are still hearing anecdotes from real estate agents around the country that vendors need to really understand the market they are selling in and understand the gap between what they want to achieve for their property and what buyers want to pay," Norwell said.

"While median prices might be strong in a region, this doesn't mean that all properties are going to be at that level, so some research into comparable properties selling in your neighbourhood goes a long way," she said.

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Volumes sold - REINZ

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Median price - REINZ

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Median house price growth

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132 Comments

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10
up

Auckland HPI -4.4% (YOY), -2.1% (MOM) ouch!
Auckland (MOM) decline appears to reveal a steepening. Regions favourites such as Tauranga, Hamilton, Rotorua, Whangarei and Napier are now showing month on month declines too. As expected, it now appears to be spreading nationwide.

https://www.reinz.co.nz/residential-property-data-gallery

In this instance, I chose to use HPI. Spruikers have often resorted to using this method of measuring true market trends.

"The level of inventory available for sale [in Auckland] currently sits at 29 weeks, eight weeks more than in April 2018."

Probably nothing.

You're so right - HPI is the true measure, it's buried in there.
Massive survivorship bias emerging in the stats too, given the low volumes.

Never fear cmat, the average KiwiSaver balance is $19,000 that will save the market!

I do hope all those young Kiwis that cashed out their Kiwisaver to buy in the last year or two make it through okay. Don't really want to see them wipe out the Kiwisaver to buy the house and then get wiped out by negative equity on the house if the price falls accelerate.

They should be fine, FHB will likely just sit tight. Problem spots will be people trying to engineer a retirement from downsizing and the few unlucky enough to lose a job while sitting on scant reserves.

Yes, that's a significant result. A bigger fall than I was expecting. Pragmatist called it though!
This marks 9 straight months of Auckland's HPI being down YoY.

My prediction of the last 2 years of Auckland prices dropping 5-10% might be close to the money.
I always caveated that by saying a global economic event would make the drop greater.

thats not really a caveat that needs to be stated lol,

Am I reading the data correct...over the 5 year period about 9-10% positive? That seems low.... or have I succumbed to exaggerated rhetoric over the years? Can someone elaborate on this a little further pse.

I believe the 5 year HPI data is in terms of annualised compound growth rate, so 9-10% is pretty stonking.

thanks mfd..i did suspect compounding was the reason. Makes more sense.

Take a look the Queenstown lake 5 year rate 16.2%!! .. then look across at the more recent numbers -1.9% for 1 month, -6.3% for 3 month, but somehow only -0.3% for the year. . will be interesting to see where that goes in the next year.

Number of sales down 11.5%, house values up 6.4%, so the trend continues. As long as there is no pressure to sell, vendors stay put if they can't achieve the price they want

And this is best seen in Auckland. Median prices remain flat.

10
up

Why quote median prices when you have the HPI?

HPI is down but median isn't.. what does that tell us? Amount Spent is still the same, they just get more house for their $$. Even better buying this time next year most likely.

I'm just quoting the article above, that's what we are commenting on. Read it

18
up

I'm just commenting on the actual report. Read it.

Thanks nomad, I have just read the actual report, here is the headline:

"Median house prices across New Zealand increased by 6.4% in April to a record equal $585,000, up from $550,000 in April 2018. Median price increases for New Zealand excluding Auckland were even stronger, increasing by 7.6% to a record $495,000 up from $460,000 in April last year, according to the latest data from the Real Estate Institute of New Zealand (REINZ), source of the most complete and accurate real estate data in New Zealand."

13
up

Interesting quote in that paper:

"Describing the REINZ HPI as ‘the gold standard’ in New Zealand house price analysis tools, Bindi Norwell, Chief Executive at REINZ"

So Bindi considers HPI the 'gold standard' but still only mentions median prices in her monthly report.
Says a lot about Bindi.

Even more interesting...

Last May (May 2018) when the median price in Auckland dropped $10k from $862k to $852, Bindi had this to say:

“Despite the year-on-year decrease, Auckland’s median price of $852,000 is actually up $2,000 on April 2018. Putting the year-on-year figure into perspective, the REINZ HPI for Auckland increased 0.6% year-on-year, highlighting that, despite a decrease in median price, the market is actually not in decline – it’s just a result of a decrease in $1 million plus properties year-on-year,”

On that same basis Bindi, the Auckland market *ACTUALLY IS* now in decline.
When median prices are down she deliberately caveats it with HPI, but when they're flat or up she remains silent.
Grade A spruiker

Yvil, why do you choose in this instance not to analyze the REINZ report in depth? Aren't you a fan of non-fiction horror?

Despite 2.5 years having past since the previous peak in the Auckland housing market (October 2016), prices continue to hold remarkably well.

The DGM continue to struggle with the reality that a sharp reduction in house sales volumes does NOT imply a concomitant fall in prices.

TTP

12
up

so the average supposed value of an Auckland house is approx $1m

In one year its dropped by 4.4% (HPI), so that's approx an average of $44,000, thats holding remarkably well is it?

Time to remove the blinkers......

Agent Tothepoint, your comment should read "the "DGM" are struggling to grasp that near half of that 4.4% loss happened in April alone" ;-)

Some people here have a very odd sense of perspective.......

Between March 2009 and June 2018, Auckland house prices increased by 93%. (Yes, you read that correctly.) [Source: NZ Listener, August 18, 2018].

The change in Auckland values since then has been miniscule. It pales into insignificance.

House owners know they are onto a good thing......

Unlike the DGM, you don't find house owners come here moaning and whinging.

TTP

14
up

"you don't find house owners come here moaning and whinging." - That's right. They are instead sitting at home after the failed auction, scratching their heads thinking what could've gone wrong.
I'm a wannabe FHB with decent sized savings. I could have bought a house for 600k last year (in Hobsonville perhaps?). I would have lost ~4.4% of my 120k deposit in a year, plus the ~4% interest on the 480k mortgage. That's $5,280 + $19,200 = $24,480 loss. Add rates and other fees associated with buying a house, and I'd have booked a loss bigger than my annual rent. IF I followed your advice. I'm not an idiot though.

Edit: correction, I would have lost 4.4% of 600k = $26,400, plus the $19,200, so $45,600 in total. Just last year! That's the equivalent of renting a house for $877 per week!

Plus you need to add in what the interest on the mortgage would have cost you. 500k x 5% = $25,000. Rates $4k. Maintenance $5k. Building depreciation $5k. And the $45k in property value lost last year. would have you down $84k approximately.

Bang on. For people who are leveraged up to their eyeballs, a 'minuscule' drop is amplified well beyond what the fall appears at face value.

That's an argument that the past performance is indicative of future results.

In fact, people are aware that house price growth has been very unusual across the last decade. And that people born earlier enough to benefit that have been incredibly lucky.

However, that is one factor in how they view the current state: are all the factors that drove that unusual growth still present? And do the signals in the market now resemble what they did during those years?

I fixed it for you:

2.5 years on Auckland house prices continue to fall and sales are in the toilet, no sign of recovery.

Hi Hardly,

You write: ".....Auckland house prices continue to fall and sales are in the toilet....."

It appears you've got yourself bogged down in doom and gloom.

TTP

To The Point ...spot on ol' chap haw haw ... it is marvellous to see your eternal optimism in these matters ...our ilk always know the moolah will "float to the top" ....haven't the banking classes done so well in this past decade, which is well noted in quality Auckland real estate, namely in the more refined "leafy" suburbs, where top prices are and will always be achieved. We should all pat ourselves heartily on the back on how we have transferred this small nation's wealth and cash flow to our classes over this time period. In the midst of our successes, I am recommending a knighthood for your good self so watch this space and keep "flying the flag" ol' boy and I'll see you at the Northern Club for a Single Malt .....toodle pip for now.

Hi R-P,

Speaking of “non-fiction horror”, how are your term deposits going these days?

TTP

I know you addressed R-P, but here's how my term deposits are going: I made ~3.25% on the short term ones. That's pretty damn good compared to what people made who bought a house in Auckland last year. 3.25% up vs 4.4% (times LVR, plus mortgage interest) down, I'm not sure why you're advocating for the latter.

Ha-ha:) Agent Tothepoint, my term deposits are performing way better than my house value that's for sure (^_-)

Have you received your first commission cheque dated 2019 yet? Sales rates are tanking to post GFC levels. Its sure is an unfolding horror story.

You should also read Big Daddy's comment. He is the man with his finger on the pulse of the dying patient.

With rents climbing at the rate they are (especially in the main centres), it's understandable why First Home Buyers are clambering to get into homes of their own.....

Plus, who would want to deny themselves a lifetime of capital appreciation? You won't achieve such gains through bank deposits.

TTP

The analysis has been done right here on interest.co.nz, it's more cost effective to rent. Plus, the buying power of cash savings is increasing with falling house prices. Its a great time to be a patient saving renter cm first time buyer. One example of rising costs is home insurance (see Wellington)

Watch out for rising joblessness and resulting weakness in rents. Its such early days of this looming slump.

16
up

There will always be those who *need* to sell though.
- Retirement;
- Emigrating

They become the marginal price setters in the market because they simply cannot hold on for a particular price.
They have to take what is on offer.

Then when all those vendors who "stayed put" return to the market everyone will be pointing to comparable price data that they like even less than what they see now.

Good times ahead.

12
up

...like the Boomer demographic time bomb hiding in plain sight. A deadly combination if this softness were to last 8-10 more years.

12
up

Then add on those that are coming to the end of 5 years of interest only that cannot afford P+I payments.

Expect more housing issues as large numbers of boomers sell up to head into a retirement village. There could be 10-20 years of difficult times ahead.

20 years... luckily for you, no one will remember that call.

The memory loss will be that bad.

rofl, i liked that one,

What do you mean "the end of 5 years of interest only"? Yvil told me that his/her Interest Only periods are automatically renewed at the end of each period.

dp

Exactly this. You can stay put as long as you like, but if a couple of other sellers in your street have to deal at "market rates", due to migration or whatever, they then set the benchmark and the value of your most major asset, plummets.

It's time to pucker up!!

There will always be those who *need* to sell though.
- Retirement;
- Emigrating

Not To Forget thouse who bought in in last few years for fast money and do not have holding power...They are really doomed unless have deep pockets to take the loss.

17
up

Hi Yvil. The pressure comes when the reduced lending flows start impacting on the real economy, wages, bonuses, jobs.
With volumes of sales in the major market at an 11 year low, the reduced lending growth will soon start impacting the real economy and lead to the pressure you say isn’t yet evident.

JW, very much agreed, pressure could come from lower lending, if it was to happen in the future, just look at OZ lending down -17% you, no wonder their housing market struggles. But no such problems in NZ. You mention "reduced lending growth" (in NZ), this means that there is growth in lending (just less growth than previous years) unlike OZ where there is significant reduction of lending (-17%)

12
up

Actually Yvil, lending growth is still positive in australia growing at 4% year on year but the pace of lending growth has slowed. That’s all it takes for a housing downturn. It starts with lower sales volumes. My guess is that the C31 data will show new lending for April below 6.2% year on year probably somewhere in the high 5% band. That’s enough to keep the market trending down. House price rises need exponential increases in household debt.

Not according to Interest's 90 at 9 of today:

Quote: In Australia, just how much their lending market has changed was revealed in official data released about lending commitments. Total lending to households fell more than -17% in March 2019 from March 2018

Yvil, also from 90@9, " Part of it was covered by a +4% rise in lending to business in the year"

From the link below, you will have also noticed the strong lending NZ business when in recent times, personal lending to NZ households is weakening in contrast. Its true that in tough times, businesses rely more on their overdrafts to pay wages. Unfortunately and soon afterwards come the job losses.

https://www.rbnz.govt.nz/statistics/c5

"Inventory levels in the Auckland region increased 15% bringing total inventory to 29 weeks, up 11% year-on-year, giving buyers more options and in turn, increased confidence levels. New listings decreased -12.5% which could be a result of vendors waiting for confirmation on incoming legislation before making a decision to go to market. There was a fall of -16.3% in the number of properties sold year-on-year, showing that although there is a increase in new listings in March, that this has not resulted in an increase in purchases."

Basically, higher stock levels as a result of lower number of sales, in spite of reduced supply. Vendors going on the market really need to think about their choice of real estate agents, advertising and method of sale. Fully expect an exodus of (inept?) real estate agents and real-estate related industries like staging companies, photographers, landscapers etc.

Although they probably need to think more about their asking price.. the foreign money has left the building, now your buyers are locals on local wages/salaries. Doesn't really matter how flash the agent is if you're asking caviar prices for last weeks mouldy potato.

That sounds correct. Also, less of the flash agents overpromising and underdelivering.

Yep, the knock on effects will be having an impact elsewhere in the economy. The whole buy and flip trade is history so there are also gonna be less renovations, less tradie jobs, less new pools etc etc. Then less new car purchases, less restaurant spending and on it goes. Will take a while to wash through but should result in the whole economy being rebalanced away from property.

Yep, the knock on effects will be having an impact elsewhere in the economy. The whole buy and flip trade is history so there are also gonna be less renovations, less tradie jobs, less new pools etc etc. Then less new car purchases, less restaurant spending and on it goes. Will take a while to wash through but should result in the whole economy being rebalanced away from property. Getting off an addictive substance is never gonna be easy.

Pretty brutal results. There are going to be more sellers adjusting their expectations down on the back of the tide of news the market is weakening. Its going to be increasingly difficult to spin the stable market story if this continues.

Please read the article above, prices are up 6.4%, 3rd paragraph

11
up

Sadly, a correction can't happen too soon.

Tracey Martin was recently interviewed on Q+A;
https://www.tvnz.co.nz/one-news/new-zealand/government-and-teachers-lock...

This issue of AKL house prices came up with respect to proposed teacher pay rises - the present government offer is that within 24 months a current salary of $70K pa will rise to $80K pa. The interviewer points out that that $80K salary won't buy much in AKL.

For the rest of NZ, Auckland badly needs a massive house price correction in order to bring it back in line with medians elsewhere in the country, e.g.,

AKL median - $850,000
WGTN median - $615,000
HAWKES BAY median - $465,000
CANTERBURY median - $460,000

In other words, in this industrial dispute, the whole of NZ is being held up because of AKL house prices.

Teachers are doing a great job and they deserve better than what they're getting now, IMO the 15% pay increase offered is pretty good. Still it's not because teachers don't earn enough that house prices are going to drop in sympathy, that's wishful thinking. The housing issue in Auckland is a separate matter, dealt with by the government who is currently building 100'000 affordable homes and reducing immigration to 10-20'000 pa

11
up

"The housing issue in Auckland is a separate matter, dealt with by the government" - I agree with this. BUT the government you have in mind is the Chinese government. They have more effect on the house prices here than anything the local government could do.

Could you please explain how the Chinese government has more effect on house prices here? Are they setting NZ immigration laws?

Why do you pretend to be stupid?

Its been talked about plenty, on here and other news. Chinese govt stopped/severely restricted peoples ability to send money out of China. No busloads of Chinese People with suitcases (sometimes apparently literal) of cash looking to buy NZ/Canadian/US/Australian housing.

Problem is it's not a separate matter - as cost-of-living, particularly in AKL, is one of the reasons settlement is stalled. Same goes for hospital staff, police and other government workers. They are all doing a good job, and the pay would be more than sufficient, if houses prices were in line with government pay rates - as they were in the past, and are in our affordable housing markets.

Hi Yvil,

"Teachers are doing a great job....."

But clearly not the ones who taught Retired-Poppy, Chairman Moa and the various other delusional DGM who haplessly crawl here each day......

If I was one of those teachers, I'd feel that I failed in my life mission. Might as well have joined a circus.

TTP

Quite to the contrary. Those commenters show critical thinking ability that displays a good education.
Others here demonstrate poor critical thinking ability which demonstrates a poor education.

If anything, the regions will correct well before Auckland will.

Who wants to live in Rotorua

Come on sammnz, RotoVegas is the new Huntly, up and coming.

Not sure thats true.. The bigger centres lead on the way up, and on the way down. I think the regions will keep increasing for a few more months till the Auckland Exodus dries up a bit as Auckland prices start falling in a way that is noticeable to the average Joe.

Rotorua HPI index annual change: +9.7%, 5 year annualised change +13.6%.
Auckland HPI index annual change: -4.4%, 5 year annualised change +7.3%.

Looks like plenty want to live in Rotorua - it's Auckland that's correcting at the moment.

And Huntly HPI ?

Not sure which region that falls under, but all the regions are performing better than Auckland so it doesn't really matter. Auckland is the only area of the country where the HPI is falling to any real degree (Queenstown has just slipped into a -0.3% annual change and Whangarei -0.1% so I'm sure Auckland will have company soon)

I dont understand the interviewers point as most households have two incomes, so two teachers for example would be making 160k, which is heaps of money.
by what logic should aucklands price be related to the hawkes bay?

"by what logic should aucklands price be related to the hawkes bay?"
A lot of disillusioned Aucklanders leave the big city and move to the regions, and thus push up prices significantly.

that actually would mean Auckland prices drive prices in Hawkes bay, which would naturally be assumed, but it would not indicate hawkes bay prices significantly influence Auckland prices.

10 months inventory in Auckland (realestate.co.nz listings vs REINZ sales)

Didn't Westpac forecast that house price will be back up to 7%?

Yes, they are a full 0.6% off...

Have you heard of False Propoganda

Dad believed what the bank said
Get a mortgage buy a home
So dad took out a great big loan
For a while there we were chuffed
Now the market has collapsed
And we're absolutely stuffed

If one is staying in the house and can afford it and not planning to sell soon as is for them to stay, is still fine. Think of all those who were blinded by the greed and went beyond their means in last few years and still not booking the lose with the false hope of Maybe.............If have deep pockets to hold for couple of years, is still fine but if not should get out as soon as ..........and not be fooled by so called experts who predicts that house will price will rise by 7%.

Over here in (sunny) Brisbane, the Asian restaurant down the road from my work place used to host BIG groups of buyers from the mainland every Friday nights, easily 50-60 of them in each group. Nowadays, the group size is about 10 at most! Just sign of the time..

"However the REINZ's House Price Index (HPI) for Auckland, which adjusts for differences in the composition of sales, was down 4.4% compared to a year ago and is now at its lowest point in the last three years."

enough said!!!!!!!

Palmy:

"The days to sell trend has been improving over the past six months. The House Price Index has had the strongest increase over the past one, three and twelve months of all the regions."

Yep Palmy is defying logic in much the same way that Hobart did, for a while! Win small in Palmy whilst losing big on the leveraged family home in Auckland. Genius bit of pre retirement speculation, we’ll see how long that lasts.

Palmy North has been a great place to invest for some time now.

Those with a memory will know that I've been recommending the good areas of Palmy for a long time now......

Some have laughed at me - but no longer.

TTP
HINT: Go purchase a property in the (premium) suburb of Hokowhitu in Palmy - preferably with a good sized section that's subdivisable. It will prove a superb investment. (Developers have become very active in Palmy and that's likely to continue.)

Hokowhitu by the lake front where you can have your own algae bloom...
There is a famous book on Palmy, I think's called 'fifty shades of grey"

Hi Chairman Moa,

Sorry - but there's no lake in Palmy. (Perhaps you're confusing Palmy with Taupo or Queenstown??)

There's a small lagoon in Palmy - and the houses bordering it happen to boast the highest values across the whole of Palmy and, indeed, the Manawatu region.)

TTP
P.S. Would you kindly tell me the name of the publisher of "Fifty Shades of Grey". I'd like to get hold of a copy. Thanks, TTP.

TTP. you have committed a cardinal sin! People who lives around that 'green" lagoon often referred it as a lake. The term lake is a bit posher than a lagoon (full of ducks poo)!

If you want a copy of "Fifty Shades of Grey, you can get an offer for one at Highbury.

Hi Chairman Moa,

Calling that little lagoon a "lake" is a bit of a hyperbole......

But, then, you're no stranger to hyperbole.

TTP
P.S. Still waiting for you to tell me the publisher of "Fifty Shades of Grey"....... Or, is that another of your fabrications?

I've got nothing to add to this interchange, i'm just here for the LOLZ.

TTP I think your might prefer EL James newest offering "The Mister". It's basically an orgy of consumerism with a regressive- boomer-nostalgia-thon of nauseating tropes, gender power imbalances and cliche. You will love it.

Hi Gingerginja,

I know you possess strong literary appreciation - despite various flaws. (-;

Would you like to come along to my book club?

TTP
P.S. Still quietly celebrating your house purchase. You've more gumption than most others here......

TTP we are, everyone of us, flawed thank goodness. Perfection would be very dull!

I am already a member of two book clubs so probably shouldn't commit to another one. Also, I live in Welly, so it might be a bit far a commute ;-). I would be very intrigued to meet yourself and other interest.co.nz regulars though.

I get the keys to the house on Friday! And yes, I am extremely excited! I think it will be 6 months till we move in and probably 18 months before the house is finished though. I'm knee deep in District Plans, Building regulations and meeting builders at the moment. Nonetheless, I spent 3 years looking and saving and to be able to find and buy the perfect house, it's quite the relief. Especially as we purchased so cheaply.

Hi Gingerninja,

Am chuffed with your response! Will definitely be thinking of you on Friday. Will crack open a bottle of top-shelf Champagne!

Certainly, my book club friends would accept you - warts, ginger hair and all. (-; We're focused on substance - not superficiality!

As it so happens, our book club may soon be establishing a syndicate at The Penthouse theatre in Brooklyn - which has a suitably intellectual ambience.

Would love to see you there.......

TTP
P.S. My genre-of-interest is medieval art and architecture.

Quite a charmer, TTP.

The Empire and The Penthouse are my two favourite cinema's. I wonder if I have bumped into you already and been blissfully unaware? ;-). You will be able to identify me by my height, ginger hair, snazzy attire and the glass of Babich Syrah in hand (this is the best wine available at The Penthouse, don't you think?).

I too love medieval art and architecture, I particularly love the use of symbolism in Medieval and Renaissance portraiture and alchemical and/or religious iconography. Yourself? I couldn't confine myself to just two genre's of interest but I have been lucky enough to spend most of my life living within walking distance to some medieval corkers including Warwick Castle, St Albans Abbey, Wells Cathedral and Glastonbury Abbey. Now I am an aspiring Kiwi, nature is my cathedral ;-)

Hi Gingerninja,

Thanks for continuing the dialogue......

Like you, I relish the older style theatres such as Wellington's Empire, Penthouse and Embassy. (Modern, glitzy theatres are hardly to my taste.) I expect we would share a similar penchant for (character) houses.

Pleased you enjoy Babich Reds. Indeed, the Syrah is excellent!

You express yourself wonderfully well, with regard to describing your interest in medieval art and architecture. Much admire your enthusiasm for words! I could easily become inebriated with the exuberance of your verbosity. Good on you! (-;

Shall certainly look out for you at our favourite theatres. Your hallmark height, ginger locks and stylish attire should make you instantly recognisable - in the all-to-often bland and monotonous world we live in.

Perhaps we should organise a get-together of contributors here at the Penthouse theatre on a Sunday evening soon. An open invitation to all interested bloggers?? (I'd be happy to travel to Wellington for the event.) What do you think, Gingerninja?

Salutations!

TTP

We forgot The Roxy, also spiffing, old Bean, what, what?

PS Verbosity is the use of too many words, which can be tedious. Are you chastising or flirting with me TTP, you Salty Dog?

***therearenowords***

I could imagine a tall, Babich drinking, medieval architecture loving, ginger damsel looking very stylish wearing some very funky glasses

Hi Gingerninja,

Yes - the Roxy is famous (Art Deco) but don't know much about it. Suggest you visit The Regent which is on Broadway, in Palmy North.

Probably was a little unkind using the word "verbosity". Sorry! "Rhetoric" would have been a gentler word - and more appropriate.

Thought you were trying to impress me with your command of the English language - and intellectual prowess. What a strong allure you created! (-;

Not sure if I'm a Salty Dog - nobody called me that before!

Are you a Cougar, by chance?

Alas, I don't have the know-how for flirting.

TTP

TTP, I can't remember but I think it might be John Cleese!

Hi Chairman Moa,

Who's the publisher? (John Cleese is a comedian; not a publisher.)

TTP

?

Clearly, Chairman Moa has experienced a brain fart.

TTP

I just think Chairman Moa is funny and maybe his humour gets lost in translation. You should try craft beer instead of champers TTP, or if you want a bit of true class, nothing like a big bottle of Lion Red.

Seconded on the Craft Beer/Ale. I have yet to find an NZ champagne that I really love, they are all too sweet for me. But the craft ale, is often much better than the UK ale. It hurts me to type that, because us Brits are pretty proud of our bitter, ales and porters. I lived for a bit a few houses down from the pub where CAMRA was founded and my Mum lived for awhile near St Peter's brewery. So i've tasted some of the best the UK has to offer but the Kiwis have the edge. First time I tasted The Garage Project stout I nearly wept .

Aaah gingerninja that's funny I have lived in UK for awhile will be returning home next year, but its over here I got the taste for it, I was back in NZ for 2 years and yes NZ is not doing to bad.

I initially got a taste for it in Leeds at a bar called further north in Chapel Allerton, I'm a bit of a bargain hunter for my beer and the further north bar had a large range of beers and they would have a lot of local beers, the beer of the week was always a local beer and was on special. The local beer was great and it gave me a taste for different ales, and trying new beers. Been converted since.

Here are a few examples from Auckland's nice suburbs-

32 Liverpool street, CV: 2.275 mil, asking price: 1.55 mil
20 Chelmsford Ave, CV: 1.775 mil; asking: 1.575 mil

and there are many more.
this one takes the cake-
8 simkin ave, CV: 1 mil; asking 1.245 mil. (this house sold for 1.15 mil in March 2017 and CV in July 2017 was 1 mil)
cheers.

It comes down to vendor expectations and needs. Some vendor's expectations are based on very different market conditions.

Some observations:
1) 32 Liverpool St: asking price is 68.4% of 2017 CV
2) 20 Chelmsford Ave: asking price is 88.7% of 2017 CV
3) 8 Simkin Ave: asking price is 124.5% of 2017 CV

It looks like the owner of 8 Simkin Ave, are trying to breakeven on their purchase price of 1.15mn when they bought in March 2017.

Let's look at their possible circumstances:

Purchase price: $1,150,000
For an non owner occupier the max LVR in March 2017 was 60%.
Deposit: 40% - $460,000
Mortgage 60%: $690,000

If they are unable to hold on to the property and need to sell, they might get a sale price of 88.7% of CV of $1,000,000 - so $887,324
(The 88.7% of CV is based on the 20 Chelmsford Av property asking price.)

So assuming an interest only mortgage :
Sale price: $887,324 (which is 23% below their purchase price in March 2017)
Sale & Mkt costs: $26,620 (3% of sale price)
Net sales proceeds: $860,704
Less mortgage outstanding: $690,000

Equity value: $170,704.

So their initial equity deposit of $460,000 has now become $170,704 - a drop of 63% in just over 2 years

If they used a lower initial equity deposit, and higher LVR mortgage to finance the property purchase (due to equity release / deposit recycling financing techniques), the percentage loss would be greater.

The key question is: Is the owner is able to hold on? or do they need to sell?

I doubt they'll settle for 88% of CV. And also, they are already making a huge loss. One look at the ad (https://rickycave.raywhite.co.nz/auckland-city/st-johns/2082258/) and the nice shiny new kitchen and bathroom and you know they pumped a chunk of capital into the place. If they get asking they are taking a bath (at least they have a shiny new bath to take it in..)

Edit: looks like I was wrong the renovation was done before the current owners bought, so breakeven might indeed be the goal.

Wrong!!! Simkin ave is asking $1,195,000.. you must've blinked and they dropped the price $50k :P

you've looked at the 2017 listing ;-)
if you scroll further down it says Sold - 01.04.2017

Negative.. the 2017 listing was https://rwremuera.co.nz/auckland/st-johns/8-simkin-ave-10838729/, and the price was $1,190,000
Current listing is https://rwremuera.co.nz/auckland/st-johns/8-simkin-avenue-rmu26572/ and the price is now $1,195,000. RE.co.nz still has the old price, need to click thru to the agents own website till it catches up :)

Ah ok, this didn't come up in my search. Well, good luck to the vendor :-)

FamilyGuy, what are these examples of? The asking prices look about right. You can't expect to make a profit if you bought in 2017 and breaking even with sales commission would be a good result. Liverpool and Chelmsford would still achieve a good return for the vendors even if they sell for around 1.4M.

I had a Bayleys agent telling me how the market isn't as bad as the media were making out (Media DGM? News to me!) cause they had sold a property at auction for $200k above GV in Glendowie.

I was like, oh yeah, what about the other Glendowie ones that you at Bayleys sold recently:
- 6 Kesteven Ave, Glendowie sold for $1.48m in Feb 2019, CV of $2.1m ($620k or 29.5% below CV)
- 22 Karaka Park Place, Glendowie, sat on the market for over 200 days and sold for $1.625m this month ($150k or 8.5% below CV)

Then there's:
- 141 Riddell Road, Glendowie March 2019 ($635k below CV, or 21.6%)
- 6 Esperance Road, Glendowie March 2019 ($400k below, or 21.6%)
- 16A Pembroke Cres, Glendowie March 2019 ($200k below, 13.3%)
- 84A Riddell Road, Glendowie February 2019 ($200k below, or 17.9%)

According to CoreLogic there have only been 15 sales in Glendowie thus far in 2019. 11 below CV.
One booked a 26.8% premium but was "comprehensively renovated". Other 3 were single digit premiums.
Days to sell averaged 76 days compared to 22 days for the 3 months Oct-18 to Dec-19.
They are getting smashed.

That's not a good story to tell though!

When signing up your next listing, you don't run through all that, you just say "we sold one for $200k over CV".

That's some close look at the Eastern Bays. You thinking about selling or buying? What do you reckon that market will turn out to be?

Land Ponzi running out of foreign buyer income and AML means cannot hide source either.
PEST factors mean no escape from proper 2007-08 crash this time.
25% minimum drop in median crest to trough.
No recovery prior to 2023 in prices - ie no rise in Auckland which all rest follow with delayed reaction.

Christchurch market still as steady as ever, and still represents good value for owner occupiers and investors.
Average price still be skewed by the “As is Where is” property being still being sold.
Christchurch in particular is becoming more popular as people see the benefits of living here, and business starting up.
Investors that are well established will be doing particularly well.
Great to see first home buyers looking at the moment!

The school holidays combined with Anzac/Easter effectively made April feel like a Christmas/New Year type shut down - Auckland was deserted, so no wonder volumes were down. Suspect that there will be a recovery of sorts off the back of the OCR cut, record low interest rates and the fact the CGT is now completely off the table.

Very wishful thinking.

But keep crossing those fingers.

Er, are you an Estate Agent?
If so, please see facts and argument below.

If you look at the raw figures on REINZ website you will see that sales in Auckland are 32% lower than in April 18. This was case in March also.
Buyers now imparting self-fulfilling prophecy of negative expectation.
They feel prices will fall further, and await this.
Owner occupier % of sales falling is because they would rather put a renovation on property or a kit house for offsping. I see this walking round suburbs of Hibiscus Coast.
When media go on about FHB market there are never any stats offered on how many of this group there are.
In which case, how are we to know how many "affordable" houses are needed?
Really, should we be encouraging young people, esp in Auckland, to take n $500,000 mortgage that (esp with student debt too) will not be repaid when they are 65? Yes, friends, payments of interest are low but no inflation means? It easy no erosion of debt, so MORE payment to bank over time. And more time.
Finally, "investors". Who are they? No one knows, because good old NZ does not keep figures (unlike Aus, who keep them quarterly, by demographic too)
What we do know is that investors are not borrowing like they did.
Also, foreign investors have taken a hit from OBB and AML.
So, sales rose pre OBB in Hibiscus Coast, in 8m, by 45% compared to previous year.
Then, "unexpectedly" (Ha) the sales excepting Red Beach (off plan section sales) decide to reverse directly after 22.10.18. What a shock eh? Just happens that October 18 was only month in last 9 months in which sales exceeded the average sales of the same 9m in 2007-08. In Orewa, last 5m sales are down 57% on same 5m in previous year. Why? because in previous year, it was all land sales and now the Chinese cannot buy the land unless it is off the plan. So they buy Red Beach instead. Ponzi is alive and well. The lower the ratio of land sales and offered on the market, compared to residential sales in any suburb, the more it is hit when speculative money leaves the scene. This applied in 2007 and 2011 and again in 2018-19. reality is that great majority of folk in Auckland could not afford houses over $850,000, if waged. So, foreign money did. Now the tide is going out and we see the "market" has no swimmers on. See my column on ratio of sections to residential, on LinkedIn

Bang on Mike, good comments.

Well put Mike.

Cant wait till property is affordible again, so maybe I can return one day. Couldnt come up with a deposit on such low wages. Now Im making so much more in Perth, and costs over here are significantly less (went grocery shopping for my family of 5- $160 at ALDI supermarket- cost me the equivalent of $370 in NZ. Gas fill up for my small car- $55...) I am so much less stressed here than I ever was in NZ. Very sad to say, but its the truth.

Cant wait till property is affordible again, so maybe I can return one day. Couldnt come up with a deposit on such low wages. Now Im making so much more in Perth, and costs over here are significantly less (went grocery shopping for my family of 5- $160 at ALDI supermarket- cost me the equivalent of $370 in NZ. Gas fill up for my small car- $55...) I am so much less stressed here than I ever was in NZ. Very sad to say, but its the truth.

Property in Auckland is never going to be affordable again, they are running out of space to build houses on while net immigration is set at current levels. Personally I'm glad to be out of the North Shore, the Auckland lifestyle is really beginning to be complete shit. What is killing it is the traffic and the generally extremely aggressive Auckland drivers now. Starting to see why others around the country hate Aucklander's. The fact its so competitive here just trying to keep you head above water with everyone in debt up to the eyeballs is resulting in unbelievable levels of stress.