Auckland housing market

[Corporate]

Just because the NZD is depreciating does not correlate with the housing crisis, the NZD is a lot more volatile...
Long term charts, house prices have been in an uptrend ever since... so however, you look at it, fundamentally and technically it is still in an uptrend...

Is that a uptrend in Auckland or the entire country?

[Valuegrowth]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11465066

Property Institute warns of 'apartment bubble' in Aucklandhttp://www.stuff.co.nz/business/68378529/the-auckland-housing-bubble-and-shades-of-1987

The Auckland housing bubble and shades of 1987Please note that I do not endorse or take responsibility for material in the above hyper-linked sites.

[Bjauck]

I think it bizarre of Len Brown and the Council in calling the transport levy a targeted rates levy. The same amount applies to a one bedroom downtown apartment, whose occupant rarely use a car or public transport and to a 5 bedroom lifestyle urban fringe property, whose multiple single occupant SUVs clog up the motorways morning and night. It is simply another addition to the regressive Uniform charge and will do nothing to ease congestion.

The more targeted way of raising money for transport AND helping to reduce the use of congested roads would have been the congestion charges, motorway tolls and Auckland petrol tax. Opinion polls had supported them but Central Government ignored Auckland opinion. So we got the blanket transport levy which will not discourage road use in the same way as truly targeted charges. Thereby making ever more expensive, disruptive and destructive roading plans even more necessary.

[Bjauck]

"Estimated mortgage repayments would now set the typical Auckland entry-level buyer back $821.83 a week, eating up 54 per cent of a couple's after-tax pay, according to the report. This is up from 45.8 per cent in May last year and 38.1 per cent in May 2013" http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11472652

With investors, foreigners and immigrants chasing the ""World Class" City's property looks like first home buyers will have to wait until they get an inheritance. If you are from a big and/or poor family, tough luck, because it does not look like the Government or "Super" City are going to co-operate and help take the heat out of the market.

With the freeing up of Chinese capital, a cheaper NZ dollar and lower interest rates, it looks like more heat will enter the Auckland market...

[NeverQuestion]

Yip,

And thanks to the LVR restrictions and Kiwisaver cap of $550,000 in Auckland there is no chance for kiwis on an average wage that come from a poor family of owning their own home in Auckland

Will be watching Parliament TV with interest this week.. I wonder what Nick Smiths definition of "Affordable Housing" is now

[Daytr]

Anyone got thoughts on what's going on with Chinese stock markets & if they continue to get smashed with a nice little kick from Greece how that could impact the Auckland property market?
It would be interesting to have a handle on the leverage of some of these Chinese buyers & if margin calls for stock positions could see a flood of house sales.

[NeverQuestion]

Interestingly the Chinese government removed the Margin call restrictions on stocks today (Emergency measures) in an attempt to prevent a crash...

Basically the brokers are no longer forced to call in the loans to Chinese investors on the stock market if their shares drop rapidly

They have also allowed investors to use their houses as security on loans used to purchase shares on the stock market

This hasn't worked today as the Shanghai Composite has again closed down 3.4%

[NeverQuestion]

http://money.cnn.com/2015/07/02/investing/china-stock-markets/

Fill in the blank: In recent weeks, China's stock markets have __________________.

A) Wiped out as much as $2 trillion of investors' wealth.
B) Swung by as much as 10% in a matter of hours.
C) Scared the living daylights out of millions of shareholders.
D) All of the above.






Yes, correct! The answer is "all of the above." China's stocks markets have been swinging wildly since the middle of last month. One minute shares are up 6%, the next they're down 5% and plunging into a bear market. The main Shanghai market (http://money.cnn.com/data/world_markets/se_composite/?iid=EL)lurched lower again Thursday, dropping 3.5%.

[Daytr]

Once the Chinese market settles & it will, it will be an opportunity.
Pity I can't trade it!
Probably a smart move by the Government to pull the margin call requirements as will help stop contagion i.e. having to sell other assets to fund margin calls. Most of these listed entities are State entity using the stock market to borrow money. So probably a free put there in that regard.

[Bjauck]

http://www.stuff.co.nz/business/money/70155168/labours-halfbaked-property-data-turns-chinese-buyers-into-scapegoats

It would not be racist to have a requirement that overseas buyers pay either a stamp duty when buying Auckland or NZ property, or be limited to investing in building new houses. Otherwise more Aucklanders will become tenants to foreign absentee landlords. Would that be a good thing? I cannot see why the NZ government finds it difficult to give preferential treatment for NZ residents in owning NZ residential housing.

[Aaron]

So what if it is Xenophobia. I reckon you should have to hold a NZ passport before you can own land in NZ. Maybe get some facts so it doesn't have to be a phobia but based on what is actually happening in NZ and get a govt that can decide on what is best for the people of NZ. Where is the money coming from. If Auckland house prices are being bid up by cheap foreign computer generated currency then real assets in NZ are being purchased with fiat currency from overseas which doesn't seem right to me. Maybe the Chinese investor quoted in the herald is right, that "we need to work harder" or as another option I would propose, maybe he can just f**k off back to China. Foreign investment is good for the country, maybe but foreign ownership of existing NZ assets, I'm not sure it is a benefit to the people of NZ. This is a link to an article regarding the benefits to NZ of foreign ownership of some of our countries assets. http://www.stuff.co.nz/business/opinion-analysis/8616100/Overseas-buyers-come-with-hidden-baggage

[Harvey Specter]

Yes, correct! The answer is "all of the above." China's stocks markets have been swinging wildly since the middle of last month. One minute shares are up 6%, the next they're down 5% and plunging into a bear market. The main Shanghai market (http://money.cnn.com/data/world_markets/se_composite/?iid=EL)lurched lower again Thursday, dropping 3.5%.no wonder they are buying our houses! ;)

[IAK]

A good start may be to collect some accurate data.

[Aaron]

Tony Alexander has jumped on the band wagon, which is surprising as he is one of the biggest real estate cheerleaders around.
http://www.stuff.co.nz/business/money/70181335/bnz-economist-tony-alexander-renews-call-to-ban-foreign-property-buyers
I think it is an important issue, regardless of which foreigners are doing the buying. Susan Devoy probably had to say something due to her role but looks like a bit of a moron if she can't distinguish between the issue of foreign ownership of NZ and race. I don't care if they are white and speak English. If they are foreigners do young NZers need to be competing against them to buy a house. I guess baby boomers will be fence sitting on this issue as they will see the foreigners as the best way to keep their house prices up as the next generation on NZers coming out of University will have a student loan to deal with before they even consider buying a house.

[Bjauck]

The scale of foreign involvement definitely needs to be more accurately quantified. However I think that Australian type requirements need to be introduced immediately.

The worry with so many unrestricted foreign buyers is that when a more enticing destination develops for their money, they could could dispose of their NZ investments as quickly as they bought them, causing major problems and destabilising the market for NZ residents.

[vorno]

The scale of foreign involvement definitely needs to be more accurately quantified...


Mate, go to a few auctions & open homes - you build up a picture of who is buying pretty quickly.
A thorough investigation would be good though, but then... how is the information stored/sort after?

[Bjauck]

Mate, go to a few auctions & open homes - you build up a picture of who is buying pretty quickly.
...

How so? How can you tell who is foreign?

[vorno]

How so? How can you tell who is foreign?

Mannerisms, language & simply talking to them. It is surprising - the amount of folk who don't speak English properly tends to indicate that they are not from here! One such example was a guy from Hong Kong, he had some language issues but we got talking - he was looking here for the good investment opportunity, since housing is extremely expensive in Hong Kong & the limitations here are few. I didn't ask if he was moving here though.

[Bjauck]

Mannerisms, language & simply talking to them. It is surprising - the amount of folk who don't speak English properly tends to indicate that they are not from here! One such example was a guy from Hong Kong, he had some language issues but we got talking - he was looking here for the good investment opportunity, since housing is extremely expensive in Hong Kong & the limitations here are few. I didn't ask if he was moving here though.
If speaking English "properly" is a sign of being foreign....then that would include most of us - depending on what you mean by properly. Perhaps it is just as well HM Queen Elizabeth II owns the most land in NZ then. My former neighbour was born in Hong Kong and spoke Cantonese with her family. She was pleased when she became a NZ citizen after being a permanent resident for some time. English is a second language for her. I don't think she could speak Maori.

[Jay]

So on that basis vorno Maori who do not speak English properly must be foreigner's as well then :p

Point is there is no way easy way to tell, just like the "research" that if they had a name like Wong or something they must be a non resident, same with O'briens, MacDonalds, etc etc ... hang on my name is French, I must be a foreigner as well, never mind that my sibling, my parents and one each of my grandparents were born and bred here.

[macduffy]

No, speaking properly is a sign of being a South Islander!

;)

[Bjauck]

My surname is French but that side of the family came to NZ generations ago - from Ireland. I wonder what the Labour Party would do with that one!

I still think that foreign (to be clear, foreigners resident overseas) buyers should be restricted to building new houses if they wish to buy property here).

[Aaron]

No, speaking properly is a sign of being a South Islander!

;)
North of Balclutha maybe, don't roll your R's do you Macduffy.

Anyway to me the issue isn't race it is the wholesale selling of NZ land to foreigners any foreigners. It just happens that currently they are mostly from Asia and yes a lot of racist kiwis would be more comfortable if it were Poms buying all our land keeping their house prices up but I think it doesn't matter where they are from don't let foreigners buy land or existing assets in NZ at the expense of our young people. Invest in NZ maybe, build new houses or businesses for sure. The only thing that makes the Chinese situation worse is that we don't have any reciprocal opportunity to buy land over there as far as I know.

I also appreciate that we are a country of immigrants but I like the fact that NZ doesn't have a huge population. Japan and the UK are the same land size as us but is their quality of life any better than ours. I don't know.

[vorno]

If speaking English "properly" is a sign of being foreign....then that would include most of us...


So on that basis vorno Maori who do not speak English properly must be foreigner's as well then :p


I've decided to simplify my post by saying: Go to open homes, go to auctions and you'll see what I'm talking about!

[Zaphod]

If New Zealanders are against foreign property buyers, then why do we sell to them in the first place? It seems that money in our own pockets trumps any moral indignation.

[Aaron]

If New Zealanders are against foreign property buyers, then why do we sell to them in the first place? It seems that money in our own pockets trumps any moral indignation.
For sure, it depends if you see unaffordable housing as a problem for the younger generation. If you own houses already it is the opposite of a problem. I don't think any NZer would turn their nose up at a higher offer from overseas. That is why you have a central govt deciding what is best for the country over what is best for the individual wanting to sell their house. Assuming Auckland's rising house prices are a problem, debate and action around supply has/is taken place and from what I read supply won't keep up therefore the next step is look at demand. Is there a way to curb demand. Restricting immigration and/or foreign ownership is one way. I would suggest that the States, China , Europe etc stop expanding the money supply so rapidly. They have got inflation and the speculators are doing well but is it good or is it destabilising time will tell.

[vorno]

If New Zealanders are against foreign property buyers, then why do we sell to them in the first place?..

As a rule its not a problem, however when the stats are as scew as they appear to be the simple fact remains - there are too many people with too much money pushing up the market. A different to way to look at it is simply the investor vs ownership numbers.

I'd prefer not having to move out of Auckland in order to afford a house, but that is looking increasingly unlikely.

[macduffy]

If New Zealanders are against foreign property buyers, then why do we sell to them in the first place? It seems that money in our own pockets trumps any moral indignation.

That's an interesting point. As a generalisation, NZers outside Auckland probably would want to see some monitoring of, and controlling of foreign property purchasers. Aucklanders who are not property owners, likewise. Auckland property owners, not so concerned with a good number cheering on the price rises and unrealised wealth increases that this ostensibly confers on them! So ........ it depends.

[macduffy]

If New Zealanders are against foreign property buyers, then why do we sell to them in the first place? It seems that money in our own pockets trumps any moral indignation.

That's an interesting point. As a generalisation, NZers outside Auckland probably would want to see some monitoring of, and controlling of foreign property purchasers. Aucklanders who are not property owners, likewise. Auckland property owners, not so concerned with a good number cheering on the price rises and unrealised wealth increases that this ostensibly confers on them! So ........ it depends.

[artemis]

That's an interesting point. As a generalisation, NZers outside Auckland probably would want to see some monitoring of, and controlling of foreign property purchasers. Aucklanders who are not property owners, likewise. Auckland property owners, not so concerned with a good number cheering on the price rises and unrealised wealth increases that this ostensibly confers on them! So ........ it depends.

I would have picked that the other way round. Certainly it seems to be Aucklanders who are railing against high prices which may - or may not, who knows - be caused by offshore buyers. Outside Auckland, not so much and in some places a fillip to prices might not be so unwelcome.

Auckland's rising population and housing supply imbalance means there are more voices raised against unaffordability. And a lot of media attention too, which might be giving the issue more airtime than it actually warrants.

[vorno]

There we go! http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11480663

[artemis]

There we go! http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11480663

I don't think that rental data takes account of people who rent from their family trust (and may or may not be settlors), or from their mum and dad. We have up to half a million trusts in NZ, nobody knows for sure but that number is from the Law Commission's recent reports on trusts. Many trusts will own the PPOR of the settlors.

People who rent from mum and dad - again how many is unknown - are often close to being owners, paying off the olds mortgage and eventually inheriting the house. So probably counted as renters and they are .... for now. But a long way frombeing your usual renters.

[Bjauck]

I don't think that rental data takes account of people who rent from their family trust (and may or may not be settlors), or from their mum and dad. We have up to half a million trusts in NZ, nobody knows for sure but that number is from the Law Commission's recent reports on trusts. Many trusts will own the PPOR of the settlors...
What the article did not refer to is that Auckland home ownership rates have dropped even faster than NZ-wide rates - as previously discussed on this thread. From memory the last census included questions on trusts and whether the home was owned by a family trust. Under NZ law if you (the settlor) have your house in a family trust, you can live in it (derive benefit from it) and retain as much de facto control over it as if it were not in trust, which makes a mockery of the traditional concept of a trust.


I would have picked that the other way round. Certainly it seems to be Aucklanders who are railing against high prices which may - or may not, who knows - be caused by offshore buyers. Outside Auckland, not so much and in some places a fillip to prices might not be so unwelcome.

Auckland's rising population and housing supply imbalance means there are more voices raised against unaffordability. And a lot of media attention too, which might be giving the issue more airtime than it actually warrants.

Even many existing Auckland home owners are being hurt by the rising Auckland prices for example if you want to sell and get a bigger property etc. Those who are benefiting the most are those who are trading down or moving away and, of course, investors who want as much untaxed capital gain as possible.


So it is a big issue, as many potential first home owners (those who do not have a wealthy family or family trust to help out) are priced out of their own home market. Many existing home owners are being priced out of trading into bigger homes as their circumstances change. All while domestic investors and non-resident foreign investors enjoy making money out of ever-increasing capital gains. It seems to be an us and them situation. Guess which side the government inaction favours.

[Aaron]

Much debate in the herald this morning. Although only an opinion piece Peter Calder was expressing what I am thinking. Although I am not angry. I noticed in amongst it all the articles mention of the scrapping of govt loans to home buyers or the capitalisation of family benefits to buy a house as well as large state house construction. We can't afford these things now but national super can't be means tested. What a lot of bull****. The greedy generation is happy to sell out to foreign buyers ahead of a younger generation. They are the ones young kiwis should be talking to, asking for a fair shake. 40 National MPs are property investors that might be why Steven Joyce doesn't seem too concerned about foreign buyers.

Anyway John Key is doing something useful unrelated to housing so wishing him all the best getting mutual recognition for imputation credits with Australia. Wouldn't that be wonderful.

[Beagle]

Anyone been online to have a look at their rates shock today ? Len Brown can't help himself can he ? Not only does he want to screw a poor unfortunate misguided women behind his wife's back he want's to do it too all Aucklanders !! Brown's ambition to create the world's most liveable city is such a pathetic and hollow ambition. No point in creating a really liveable city if nobody can afford to live in it is there !!
Remember it was this little "gentleman" that passed the whopping 9.9% rates increase by the slimiest of margins, his own vote.
Looks like after the base uniform annual charge which I think is about $375, you're up for about $267 per annum per $100,000 of capital value...so anyone with a $10m mansion in Epsom, Remuera or elsewhere is being "done" for just on $27,000...which by my way of thinking means effectively you don't own that property at all as you're paying about $520 per week to rent it off the council.

ITS TIME FOR A RATES REVOLT !!!!!! Just stop paying them and claim its a breech of your human rights !!

[macduffy]

I'm finding it hard to muster much sympathy for anyone with a $10m mansion in Epsom, Remuera or elsewhere - but I take your point, Roger!

:ohmy:

[macduffy]

No, actually it's worse that that because in the current Auckland property market it won't be long before all your modest three bedroom homes are valued around $10m!

;)

[NeverQuestion]

I see this as another symptom of the Auckland Housing Crisis

Rates are now tied to the property evaluations which are climbing rapidly.

Not only are first home buyers such as myself pretty much locked out of the market (Prices are climbing $1000 a day and I don't have a job that pays that well)

But now honest hard working home owners are being forced to pay ever increasing rates for all the issues not directly related to them in the greater Auckland area

I don't see how that is fair especially since a house of only 100 sq meters is now close to 1 million in most suburbs of Auckland.

Which in my mind is a disproportionate rate for the average dwelling in Auckland

[Bjauck]

Yup...that $10m mansion in Remuera may may have seen an appreciation of $3m+ since the last 2007 house price peak all of which would be tax free should the owner wish to sell. If this were an investment, whether by a local or an off-shore investor, it would be tax free. If the house were an owner-occupied mansion, then the owner could trade "down" and put aside a difference that would have grown larger than if Auckland house price inflation had been more akin to the national average. Even with $27000 pa in rates, they have had a great investment with little to pay in taxes!

[artemis]

..... Rates are now tied to the property evaluations which are climbing rapidly.....

Yes and no. The real driver of rates is the council budget, which then gets spread across all rateable properties in the city.

Sounds to me like the council budget is the thing that's well out of proportion. The remedy is to vote out the spendthrift council and vote in councillors who will manage they city's budget.

[Bjauck]

No, actually it's worse that that because in the current Auckland property market it won't be long before all your modest three bedroom homes are valued around $10m!

;) Auckland owner-occupier ownership of housing would be about 30% then. However possibly, the next financial shock strikes / overseas investors turn their attentions elsewhere and the $10m mansion reverts to a more realistic $5m and the average $800,000 home becomes a more affordable $600,000.

Perhaps Auckland Super City will suffer a rates rebellion from the citizens in the old ACC areas that have seen greater capital appreciation and greater rates rises. Central government will disband the Super City and re-establish the old council areas including the old Otahuhu and Onehunga etc. citing Sydney as a successful overseas example :). However rates continue to rise as more "targeted levies" are introduced for infrastructure, global warming and etc.

[Beagle]

Yes I have little sympathy for those able to afford a $10m mansion either but a hard working professional with a nice home in XYZ suburb now theoretically worth $2m, (not really worth any more to them seeing as they don't want to move) is now facing being extorted, opps sorry rated, for circa $5,500 per annum. This is an absurd situation, heads must roll starting with the philandering weasel at the top.

[vorno]

Yes I have little sympathy for those able to afford a $10m mansion either but a hard working professional with a nice home in XYZ suburb now theoretically worth $2m, (not really worth any more to them seeing as they don't want to move) is now facing being extorted, opps sorry rated, for circa $5,500 per annum. This is an absurd situation, heads must roll starting with the philandering weasel at the top.

What else could be the solution though? Granted everyone hates the high rates increases, however how else can we cope? We're land-locked and all we can do is build further & further away from the city centre - we're facing mammoth infrastructure costs.

So, what could the alternative solution be? Impose an additional rego-fee? Toll everyone till the cows come home? What do you guys think the best alternative is?

[Jay]

Have not thought about this too much (as you will see) but has a study/costing ever being done on spreading the rates evenly across all residential properties. (Commercial different)
It still only costs $100 per year(no idea just a figure plucked out of the air) to pick up rubbish from a $400K house as it does a $5M one.
As you say roger not worth any more to you the owner if you have no plans to move or downgrade.

[winner69]

The actual $ rates bill in Auckland for most properties doesn't look too outrageous compared to Wellington

[gv1]

Yeah, I thought super city was created to reduce rates...when we have consultants based in UK and US etc...why the costs won't go up. When the Mayor entertaining mistress in the office, what else could be happening. Council hasn't stream lined many processes...there is so much wastage and repetition of work. I think an independent body of people should audit their books, systems and processes.

[stanace]

What I find interesting is that no one remarks on the following;
1 Interest rates overseas for borrowing are far lower than NZ, in fact in some places they are negative, which means that anyone overseas, not just China, or Asia, can borrow money to invest in NZ, at a cheaper rate than us.
2.I do not have the figures, but what percentage of New Zealanders own a property? And I mean own, mortgage free. I would think that would be quite a low number, although many have mortgages.
3. Which leads to point 3. People do not want to buy a home, most want to get on the property ladder. After all, if most people have not paid off their mortgage, and sell after about 7 years, (I think that is the average that a house is held for). then it is just an ongoing cycle which has been going on for years.
4. And for those older people who are making a fortune due to price increases, will their children not benefit, either when it is left to them, or immediately, when the bank will lend based on the increased value.

[Bjauck]

Yes I have little sympathy for those able to afford a $10m mansion either but a hard working professional with a nice home in XYZ suburb now theoretically worth $2m, (not really worth any more to them seeing as they don't want to move) is now facing being extorted, opps sorry rated, for circa $5,500 per annum. This is an absurd situation, heads must roll starting with the philandering weasel at the top.

Philanderer or Embezller, if they were the two choices for a mayor, I know which I would opt for. I did not have a relationship with that credit card should be a worse lie. Philandering is a problem between his wife and himself

[Bjauck]

What I find interesting is that no one remarks on the following;
1 Interest rates overseas for borrowing are far lower than NZ, in fact in some places they are negative, which means that anyone overseas, not just China, or Asia, can borrow money to invest in NZ, at a cheaper rate than us.
2.I do not have the figures, but what percentage of New Zealanders own a property? And I mean own, mortgage free. I would think that would be quite a low number, although many have mortgages.
3. Which leads to point 3. People do not want to buy a home, most want to get on the property ladder. After all, if most people have not paid off their mortgage, and sell after about 7 years, (I think that is the average that a house is held for). then it is just an ongoing cycle which has been going on for years.
4. And for those older people who are making a fortune due to price increases, will their children not benefit, either when it is left to them, or immediately, when the bank will lend based on the increased value.
re 1. People who advocate curbs on overseas investors do not single out those from China. The disparity in interest rates is one of the main reasons for the need for controls on off-shore buying of our homes. The Labour Party statistics and analysis are interesting to show that there could be significant demand for residential properties from a certain ethnic group (whether residents or not). Also interesting was that those with Pacifica names were under-represented in the house buying stats.

re 2. Many elderly have mortgage free homes. In fact for many it was their pension plan. Many younger Aucklanders won't be so lucky when they are old. There will be some younger Aucklanders who will be lucky enough to inherit a house, as long as it was not needed to pay the nursing home fees of the Landowner (see 4 below)

re 3. I think many actually want a home and hope it will also be a good investment. The property ladder and hoping to end up with a good debt free real estate investment has been around for yonks. It is the NZ way of saving for retirement rather than building up a portfolio of financial investments. You may well have to sell your final house if you need nursing home care.

re 4. Not good for grandma to go into to debt to support the family. Also see 3 Above. If you have wealthy old relatives with lots of real estate you may become a trust fund beneficiary and inherit a fortune and become part of the developing aristocracy based on inherited wealth.

[macduffy]

Concern over foreign buying of housing is increasing in Aussie too.

http://www.smh.com.au/business/markets/currencies/we-aint-seen-nothing-yet-chinese-foreign-investment-in-australian-property-tipped-to-surge-20150721-gigfaz

[Bjauck]

Concern over foreign buying of housing is increasing in Aussie too.

http://www.smh.com.au/business/markets/currencies/we-aint-seen-nothing-yet-chinese-foreign-investment-in-australian-property-tipped-to-surge-20150721-gigfaz

The Aussies are concerned yet they already have some restrictions on what residential property foreign investors can buy. NZ is asleep at the wheel.

[winner69]

OCR down and banks follow with mortgage rates ...and no doubt start fighting for every loan

That'll keep things bubbling along for even longer

[Bjauck]

Have not thought about this too much (as you will see) but has a study/costing ever being done on spreading the rates evenly across all residential properties. (Commercial different)
It still only costs $100 per year(no idea just a figure plucked out of the air) to pick up rubbish from a $400K house as it does a $5M one.
As you say roger not worth any more to you the owner if you have no plans to move or downgrade.

The amount of rubbish that a property would produce depends on how many people live at the address, the amount of recycing they do etc. So a one-bedroom place occupied by a greenie would not produce much trash. I agree rubbish collection should be on a user pays basis.

Charging rates evenly across all residential properties - if I understand you correctly that would mean charging a one-bedroom apartment or house the same as a multi-bedroom Remuera mansion? I am not sure that would be fair or user-pays. It would end up being a regressive tax with poor pensioners subsidising wealthy large families!

Auckland owner-occupied housing have provided their owners handsome tax-free capital returns over the years, with the benefit of ownership, namely accommodation, not having any imputed income tax levied. Why shouldn't those of us who have more valuable properties in highly sought after areas which have seen greater capital appreciation pay more in the way of rates. There is always HER. Renters have to find their rent out of tax-paid income. Rates are a small price to pay and already have uniform charge components regardless of the value of the property.

Some alternatives for local government funding:
1. A local sales tax - would hit the poor as they do not have much discretionary spending / cannot save.
2. Wealth tax (on each resident's wealth, both financial and real estate). those who complain about high rates, would be unlikely to like this option!
3. Poll tax - a uniform tax on each resident (either over the age of 5 or 18). Would hit the poor. Anyone remember the riots in Britain when they tried to introduce this type of tax?
4. A local income tax. The income-poor pensioner in an expensive house would like this one. However just imagine the objections to another income tax from high income earners. There would be another argument over whether it should be flat or progressive.

[Crackity]

Finance Minister Bill English this morning raised the spectre of Auckland house prices possibly dropping.

Surely some mistake! lol

[winner69]

Finance Minister Bill English this morning raised the spectre of Auckland house prices possibly dropping.

Surely some mistake! lol

Fell by $20,000 in July


https://www.reinz.co.nz/shadomx/apps/fms/fmsdownload.cfm?file_uuid=F0D243B8-7EA1-4DE5-AD9B-3204A7BA5483&siteName=reinz

[Crackity]

Fell by $20,000 in July


https://www.reinz.co.nz/shadomx/apps/fms/fmsdownload.cfm?file_uuid=F0D243B8-7EA1-4DE5-AD9B-3204A7BA5483&siteName=reinz


So from incredibly massively humongously overpriced to only massively humungously overpriced?

[skid]

Well,its looking like NZ property is now going to cost the Chinese more(since devaluation)--the knock on affect could effect house prices in other ways.(China housing bubble)
Rental prices are down in Auckland(I have found)---Im seeing the property market looking a bit vulnerable atm--If China has a crash in property-and Oz--you can bet you will see one here as well(housing shortage or not)--at best Im picking the market taking a breather(and Im a property owner)

I cant really think of an ideal place to park money atm

[NeverQuestion]

Skid,

I don't mean to alarm

But unfortunately the property market has crashed in China (earlier this year).

This happened about the time the construction industry in China ran out of new high rises to build (hence the massive slump in iron ore price that has hit AUS so hard)

At the time the Chinese government told investors to start investing in the stock market. Which has since crashed (mid July and has wiped out half the wealth of most Chinese millionares).

Tho some companies listed on the Chinese stock exchange were close to 400 times their worth and had not turned a profit in years.. it was pretty obvious a crash was going to happen..perhaps obvious to everyone but the Chinese

Now China is trying to kick start their exports again (which dropped 8% in the last year) by dropping the value of their currency. This took everyone by surprise... basically china has said it was moving away from exports to a domestic driven economy (This may mean a number of Chinese start selling foreign properties to pay back debt or for the return)

On top of all this..Now oil, gold, and milk prices are all crashing globally ..So yeah the world is in real bad shape.. all the traditional methods of wealth generation are failing and Europe is still panicking about the possibility of the Euro zone breaking up..

I think New Zealand will be ok tho. We are geared for exports and with the falling NZ dollar our economy will keep ticking over at about 3% growth so a property crash is unlikely.. but a cooling definitely if driven by foreign demand

(Young Aucklander desperate to get his first home)


Well,its looking like NZ property is now going to cost the Chinese more(since devaluation)--the knock on affect could effect house prices in other ways.(China housing bubble)
Rental prices are down in Auckland(I have found)---Im seeing the property market looking a bit vulnerable atm--If China has a crash in property-and Oz--you can bet you will see one here as well(housing shortage or not)--at best Im picking the market taking a breather(and Im a property owner)

I cant really think of an ideal place to park money atm

[skid]

Skid,

I don't mean to alarm

But unfortunately the property market has crashed in China (earlier this year).

This happened about the time the construction industry in China ran out of new high rises to build (hence the massive slump in iron ore price that has hit AUS so hard)

At the time the Chinese government told investors to start investing in the stock market. Which has since crashed (mid July and has wiped out half the wealth of most Chinese millionares).

Tho some companies listed on the Chinese stock exchange were close to 400 times their worth and had not turned a profit in years.. it was pretty obvious a crash was going to happen..perhaps obvious to everyone but the Chinese

Now China is trying to kick start their exports again (which dropped 8% in the last year) by dropping the value of their currency. This took everyone by surprise... basically china has said it was moving away from exports to a domestic driven economy (This may mean a number of Chinese start selling foreign properties to pay back debt or for the return)

On top of all this..Now oil, gold, and milk prices are all crashing globally ..So yeah the world is in real bad shape.. all the traditional methods of wealth generation are failing and Europe is still panicking about the possibility of the Euro zone breaking up..

I think New Zealand will be ok tho. We are geared for exports and with the falling NZ dollar our economy will keep ticking over at about 3% growth so a property crash is unlikely.. but a cooling definitely if driven by foreign demand

(Young Aucklander desperate to get his first home)

Interesting--A property owner thinking property is maybe going to correct and a hopeful first home buyer thinking it wont--Guess we are both hoping we are wrong:)

[Bjauck]

Skid,

I don't mean to alarm

But unfortunately the property market has crashed in China (earlier this year). ...


I think Chinese prices have fallen but not crashed. For one thing you need to have a 30% deposit to buy a property in China. Maybe we should have that here too - or higher - for investors. Interesting article from the FT "What next? A China housing crash?" http://www.ft.com/intl/cms/s/0/8d3c2752-3b54-11e5-bbd1-b37bc06f590c.html#axzz3iYIQDN00

I think there will be continued demand for NZ property by Chinese investors. Chinese capital controls are loosening, so any cooling in their economy and reduced purchasing power of their currency may be off-set by that. NZ also has a weak currency at the moment because of commodity price uncertainty. Plus, NZ will still be regarded as a safe haven for Chinese investors. I think NZ should still introduce Australian-style measures restricting foreign buyers to new properties.

[NeverQuestion]

30% deposit is only ever going to cut out more first time buyers.. good luck saving $135,000 for a modest $450,000 property (Average price in Auckland is 550,000 btw)

Plus your only targeting 1/3 of the market by doing this. Remember property investors can use capitol from their portfolio as security and foreigners will have access to cheaper credit

(I've given up on Auckland.. Making plans to move to Wellington early next year)

[noodles]

I'm calling it. I think Auckland house prices have ht their peak and we will not see these prices for at least another 5 years. I think the Dec 15 average price will be less that today's.
Reasons:
-Foreign investors needing IRD numbers
-LVR rules
-Change of sentiment. Even my most bullish banking friend reckons house prices will just level out now

[Crackity]

I'm calling it. I think Auckland house prices have ht their peak and we will not see these prices for at least another 5 years. I think the Dec 15 average price will be less that today's.
Reasons:
-Foreign investors needing IRD numbers
-LVR rules
-Change of sentiment. Even my most bullish banking friend reckons house prices will just level out now

i thought the same a year ago - so yes I agree with your sentiment Denis. Ring that bell.

[Bjauck]

30% deposit is only ever going to cut out more first time buyers..
I may not have made it clear, I wondered whether NZ should apply a 30% deposit rule for investors.

Basically, I think if you want to buy a holiday home or a property as an investment to rent out, you should have to provide a bigger deposit than someone buying their primary or only residence. In addition, I think there should be comprehensive restrictions on non-residents buying residential property.

[Valuegrowth]

We should see next stage of property cycle in the property market especially in overvalued Auckland housing market.

[NeverQuestion]

We should see next stage of property cycle in the property market especially in overvalued Auckland housing market.

A massive delay in increasing the housing supply is now leading to higher prices in the Auckland apartment space. - (Remember It took 15 months after the announcement to build a single house in the Auckland special housing areas )

Hence first home buyers are now fighting each other over anything in the 250K - 400K

With the OCR drop this situation is only going to get worse

My prediction for the next year is that we will see a massive jump in the average house price in Auckland due to the following

1. Home owners will continue to purchase more houses for their retirements plans (Cheaper loans leads to refinancing and more funds issued by banks for purchasing additional property)

2. First Home Buyers will see they can now get bigger loans for their low deposits which in turn leads to bidding wars that push the price higher.

3. More delays in Special housing areas as building companies start going under and the prices increase above and beyond affordable ( Building companies are struggling to keep the prices down and debt levels of these companies is becoming a concern )

4. Delays in building in and out of the special housing areas will make it more profitable for building companies (Slowing down production leads to bigger profits.. Do you honestly think they care about the shortage? If you do then you must also think National are trying everything they can to fix this issue )

[NeverQuestion]

Looks like it might be over already.
http://www.interest.co.nz/property/77892/fewer-chinese-faces-auctions-and-buyers-becoming-more-picky-we-head-towards-summer

You could be right actually

This was posted on the National Business review today

http://www.nbr.co.nz/article/property-talk-china-crackdown-could-affect-auckland-housing-market-nr-180007

So If this whole situation is being caused by an influx of money from China then it will be pretty obviously in a few months

Interestingly I went to a few Auctions this week... there was a lot of desperate people if body language is anything to go by.

We watched in disappointment at one house listed in the 400 K search range that had a reserve of 600 K... unsurprisingly no bids!

To make matters worse when the place didn't sell and the Auctioneer was pretty condescending about it... I feel sorry for those who's dreams had been crushed

[NeverQuestion]

You could be right actually

This was posted on the National Business review today

http://www.nbr.co.nz/article/property-talk-china-crackdown-could-affect-auckland-housing-market-nr-180007

So If this whole situation is being caused by an influx of money from China then it will be pretty obviously in a few months

Interestingly I went to a few Auctions this week... there was a lot of desperate people if body language is anything to go by.

We watched in disappointment at one house listed in the 400 K search range that had a reserve of 600 K... unsurprisingly no bids!

To make matters worse when the place didn't sell and the Auctioneer was pretty condescending about it... I feel sorry for those who's dreams had been crushed

Looks like this starting to become an issue across other Auctions too

http://www.nzherald.co.nz/property/news/article.cfm?c_id=8&objectid=11528636

[Bjauck]

...We watched in disappointment at one house listed in the 400 K search range that had a reserve of 600 K... unsurprisingly no bids!

To make matters worse when the place didn't sell and the Auctioneer was pretty condescending about it... I feel sorry for those who's dreams had been crushed Some years ago I missed out on a property despite placing the highest bid in a range that the real estate agent had assured me would be acceptable to the vendor and which was about 15% above the professional market valuation I had been naive to get prior to the auction. That house was sold over a year later so the vendors had basically been just "testing the water". One of the reasons why Auctions can be bad for both vendor and prospective purchaser. It is unethical for an agent, who should have an idea as to what price range the vendor wants for a property, to market the property in a price range that is too low for the vendors. It is a waste of time for prospective serious bidders who will need to undertake due diligence prior to bidding. Auctions should be reserved for the unusual or very expensive properties imo.

[macduffy]

An Australian development that may have relevance for NZ.

http://www.theage.com.au/business/intelligent-investor/proof-property-has-peaked--from-the-inside-20151014-gk8n3d.html

[winner69]

Might be some cheap units in this development
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11529885

[NeverQuestion]

Might be some cheap units in this development
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11529885

And yet they still market it as "low maintenance and high quality" ~ What a joke

[NeverQuestion]

Also, never heard of pouring concrete straight onto the ground like that!

The developers must be in such a hurry to take your money that they are cutting as many corners as possible!

I guess for $520,000 - $700,000 + dollars you shouldn't be expecting much!

[iceman]

http://www.nbr.co.nz/article/serious-fraud-office-investigates-large-scale-mortgage-fraud-auckland-b-180476

[Bjauck]

Also, never heard of pouring concrete straight onto the ground like that!

The developers must be in such a hurry to take your money that they are cutting as many corners as possible!

I guess for $520,000 - $700,000 + dollars you shouldn't be expecting much!

It is a sign of the times in Auckland when that price range is considered cheap for a new home. With the current inflated land prices, I guess some developers try to cut corners in the quality of building. Let's hope Auckland City use some of their large levies and fees to bolster their compliance checks.

[Valuegrowth]

I believe we are closer to next cycle in Auckland housing market.

[macduffy]

We're not the only country that's not building enough houses.

http://www.theguardian.com/business/2015/dec/06/housing-policy-help-to-buy-radical-solution

[JBmurc]

I believe we are closer to next cycle in Auckland housing market.

10yr cycle ? so 2017 be downturn

[NeverQuestion]

10yr cycle ? so 2017 be downturn

Sounds like Singapore and Australia are seeing a downturn in the property market

Could it be that a wave is heading our way :S

[fungus pudding]

Sounds like Singapore and Australia are seeing a downturn in the property market

Could it be that a wave is heading our way :S

It most certainly could be.

[Valuegrowth]

I believe Auckland and Sydney housing market will follow both AUD and NZD. We could expect massive fall in properly prices in overvalued markets such as Auckland and Sydney etc. Sooner than later, we should see end of property boom surprise to many. Chinese factor will push down property market further.

[NeverQuestion]

Just read this

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11571162

I don't mean to rant much but the following made me a little upset being locked out of the market



The optimist says he isn't worried by talk of a slump in property prices, saying that would only enable him to buy more places.
he says he'll be putting his rents up soon.
started buying property in June 2010 with a $200,000 wedding gift from his father.
He and his wife Cindy bought one place for as little as $173,000.
And he reckons that property investment is within everyone's reach.


Honestly good on him for making good investment decisions!

But I don't agree with property below $300,000 being snapped up by investors

We are in a housing crisis in Auckland.. Shouldn't we put restrictions on this as well??

[Aaron]

Just read this

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11571162

I don't mean to rant much but the following made me a little upset being locked out of the market



The optimist says he isn't worried by talk of a slump in property prices, saying that would only enable him to buy more places.
he says he'll be putting his rents up soon.
started buying property in June 2010 with a $200,000 wedding gift from his father.
He and his wife Cindy bought one place for as little as $173,000.
And he reckons that property investment is within everyone's reach.


Honestly good on him for making good investment decisions!

But I don't agree with property below $300,000 being snapped up by investors

We are in a housing crisis in Auckland.. Shouldn't we put restrictions on this as well??

He started with a $200,000 handout from his folks in 2010 and now has 11 properties. Gross rental $275k Asset Value $6.5mill (4.2% gross yield). I can't imagine his rental income would be providing him with enough cashflow to be purchasing this many properties. Obviously the 10-20% annual gain in prices over this time would have seen his equity grow but he must be pretty heavily leveraged. He could be taking a big risk with leverage so it is hard to begrudge him his success. No worries as long as interest rates stay low. He is only investing as per world central banks policy. Inflation will save him and he would have been much worse off leaving $200,000 in the bank.

[fungus pudding]

He started with a $200,000 handout from his folks in 2010 and now has 11 properties. Gross rental $275k Asset Value $6.5mill (4.2% gross yield). I can't imagine his rental income would be providing him with enough cashflow to be purchasing this many properties. Obviously the 10-20% annual gain in prices over this time would have seen his equity grow but he must be pretty heavily leveraged. He could be taking a big risk with leverage so it is hard to begrudge him his success. No worries as long as interest rates stay low. He is only investing as per world central banks policy. Inflation will save him and he would have been much worse off leaving $200,000 in the bank.

It's difficult to see how he could be making a profit if initial input was only $200,000. But even if his borrowings now are only around $3,500,000 he won't be showing a surplus. Not enough detail to know the full picture but certainly not as rosy as painted in the article I read.

[brend]

I get the feeling he purchased a few flat units.

Sure they will give a good rental income but poor capital gain.

[fungus pudding]

I get the feeling he purchased a few flat units.

Sure they will give a good rental income but poor capital gain.

Portfolio valuation of 6.5 million means average of $590,000. Assuming his purchase price was half that (started in 2010 so unlikely many will have doubled in value) he will have mortgage of 3.25 million which will not be showing a profit on 275,000 income. Looks like his rental income has been capitalised at 4% to produce 6.5 million over 275,000 income. There's something wrong with this story OR he has another substantial income source, OR he's heading for trouble. It's easy to buy loads of residential property, but keeping the whole thing running is far from easy without substantial cash input in initial years. There's plenty of burnt fingers from those who have grown too fast.

[Lewylewylewy]

Regarding the comment about property investment being within everyones grasp...

Because of my job, I am privileged to have access to a lot of NZ property data. Last month I pulled a report that told me that over a 3rd of people who own at least part of a house, own a share in more than one house. The number drops by 5-10% for each house you add to peoples portfolios. for example, 30% of people with an investment in a house will have an investment in more than 2 houses; 25% will have an investment in more than 3 houses... Etc.

Personally, I would argue that property investment is within everyone's grasp. I earn about what the average couple earn, and (despite paying more tax than the average couple) I am able to do property investment. It's a case of deciding to save money for a few years instead of spending it on fun things like nice cars and holidays, in order to save a deposit. You then wait a few years (saving or not) and leverage the debt to buy another. Done! It's not hard by the time you factor in Kiwi saver. compare this to when I lived in Englandistan, at age 26 I couldn't even afford to buy a house in a pretty bad area.

What I do think is hard (but not something people are concerned about), is building a reliable, decent retirement without investing in property in NZ.

That's why the NZ govt has to be very careful around curbing house prices with it's policies - they could do a lot of damage here.

[jmsnz]

The story is well documented and discussed over here http://www.propertytalk.com/forum/showthread.php?33980-My-Property-Investment-Journey-Gary-Lin for those that are interested.

[Aaron]

The story is well documented and discussed over here http://www.propertytalk.com/forum/showthread.php?33980-My-Property-Investment-Journey-Gary-Lin for those that are interested.
Thanks jmsnz it doesn't sound so glamorous when you look at his strategy. Good on him for his success, the only thing first home buyers could get upset at is that his Dad gave him the head start most others won't get. He is pouring his own money back into it. He is not really keeping first home buyers out of the market as I guess they would be looking at a minimum of three bedrooms. Amazing how little balanced information newspapers provide. I should cancel my herald subscription as I only really read it for entertainment and to make me worry about a lot of things that probably aren't all that bad once you know the full picture.

[ratkin]

http://video.cnbc.com/gallery/?video=3000480036

[fungus pudding]

http://video.cnbc.com/gallery/?video=3000480036

For those who think R.E. always goes up.

https://www.youtube.com/watch?v=kUldGc06S3U

https://www.youtube.com/watch?v=hqOn5XEm86A

[AppleCrumble]

... I should cancel my herald subscription as I only really read it for entertainment and to make me worry about a lot of things that probably aren't all that bad once you know the full picture.

You should try go without any news for a month, if not more.
Yoy might be amazed with the experience.
You also might be amazed what u pick up through osmosis.

[NeverQuestion]

So in the last few days things have gotten a little interesting

http://www.realestate.co.nz/residential/search/bedrooms_min/3/prices_max/400000/prices_min/300000/regions/35

If you look you will see a number of Auctions but most list a price or are listed as Negotiation

Not sure if I am reading too much into this but...

But this wasn't the case a few months ago... market turning? becoming a buyers market?

[AppleCrumble]

So in the last few days things have gotten a little interesting

http://www.realestate.co.nz/residential/search/bedrooms_min/3/prices_max/400000/prices_min/300000/regions/35

If you look you will see a number of Auctions but most list a price or are listed as Negotiation

Not sure if I am reading too much into this but...

But this wasn't the case a few months ago... market turning? becoming a buyers market?

What? There is 52 listings in auckland between 300-400k.is that a lot for that price? The area is very broad and don't know the areas too well, so couldn't comment.

[NeverQuestion]

What? There is 52 listings in auckland between 300-400k.is that a lot for that price? The area is very broad and don't know the areas too well, so couldn't comment.

If you look into them most are leasehold or have water damage

Also check the dates... anything in that range is normally gone in a few days

(Been searching for a few years now)

[Logen Ninefingers]

https://www.bloomberg.com/news/articles/2016-02-03/card-swiping-currency-dodgers-cut-off-by-china-s-insurance-curbs



Before the Chinese regulator stepped in this week with measures against the insurance industry aimed at curbing the country’s $1 trillion worth of capital outflows in 2015, hundreds of thousands of mainland Chinese had been flocking to Hong Kong to buy policies using their China-issued UnionPay credit or debit cards.

Using the cards enabled them to get around China’s controls that officially limit citizens from converting no more than $50,000 per year and sending it abroad. By swiping the cards at insurers such as AIA Group Ltd., Prudential Plc, and Manulife Financial Corp. in Hong Kong, mainland residents bought policies denominated in Hong Kong dollars and U.S. dollars -- averaging $50,000 but reaching as much as $1 million or more -- with the equivalent amount of yuan deducted from their bank accounts back home.

The money could then be cashed out and sent anywhere in the world as a clean source of funds from an insurance policy. Such policies, in addition to providing better health care, beneficiary payments and returns than those on the mainland, are also popular because they’re shielded from seizure in the event of bankruptcy in China or criminal proceedings, which have been intensifying under President Xi Jinping’s anti-corruption campaign. Thus, Hong Kong’s insurance policies have been turned into actual insurance for billions in Chinese cash.

[Valuegrowth]

Finally, it is time to avoid property in places such as Singapore, Hong Kong, Major cities in China, major cities in Australia which include Sydney and Auckland etc. I expect one of the biggest drops in property prices especially in Auckland and Sydney. Both Auckland and Sydney house prices are overvalued by more than 40%. They are more vulnerable now. No asset will go straight up continuously for number of years. Any further rise is property prices could lead to another crisis. Still some market players have not learnt lessons. They think this time is different. Some Japanese investors also thought like that in the past.

There are people they can get jobs in Auckland but they cannot afford to rent. Higher rent is slowing down the economic growth as well. Properly investments along with gold are two of the most unproductive investments in the world. These types of investment have bought different types of crisis such as credit crisis and banking crisis in the past. We are going to repeat that by thinking this time is different. Just like stocks and commodities there will be time everybody will try to dump properties in the market. History will repeat in a different manner. It is time to become big bear on Auckland housing market. Easy money will not last for ever.

http://www.stuff.co.nz/business/75945463/nz-tops-world-in-fitch-house-price-comparison

Kiwi house prices are the highest in the world compared to incomes, Fitch says

NZ tops world in Fitch house price comparison

My ideas are not a recommendation to either buy or sell any property, security, commodity or currency. Please do your own research prior to making any investment decisions.

[blackcap]

Finally, it is time to avoid property in places such as Singapore, Hong Kong, Major cities in China, major cities in Australia which include Sydney and Auckland etc. I expect one of the biggest drops in property prices especially in Auckland and Sydney. Both Auckland and Sydney house prices are overvalued by more than 40%. They are more vulnerable now. No asset will go straight up continuously for number of years. Any further rise is property prices could lead to another crisis. Still some market players have not learnt lessons. They think this time is different. Some Japanese investors also thought like that in the past.

There are people they can get jobs in Auckland but they cannot afford to rent. Higher rent is slowing down the economic growth as well. Properly investments along with gold are two of the most unproductive investments in the world. These types of investment have bought different types of crisis such as credit crisis and banking crisis in the past. We are going to repeat that by thinking this time is different. Just like stocks and commodities there will be time everybody will try to dump properties in the market. History will repeat in a different manner. It is time to become big bear on Auckland housing market. Easy money will not last for ever.

http://www.stuff.co.nz/business/75945463/nz-tops-world-in-fitch-house-price-comparison

Kiwi house prices are the highest in the world compared to incomes, Fitch says

NZ tops world in Fitch house price comparison

My ideas are not a recommendation to either buy or sell any property, security, commodity or currency. Please do your own research prior to making any investment decisions.

The obvious question is then "how do I short the Auckland property market"? Does anyone or any institutions have any instruments like they do in the states with Securitised mortgages where that is possible here? Would love to be able to make a bet against Auckland housing but what would be the mechanics? (Aside from borrowing a mates house and selling it, promising that you will give him/her their house back at some time in the future :P)

[BIRMANBOY]

Market indicators are always so compelling but apparently someone forgot the common sense....why would houses prices go down when constant flow of new immigrants into Auckland and lack of housing offset "indicators"? As long as there are more buyers than sellers it isn't going to happen. Overseas investors may slow down but still far too many buyers in the market. I cannot see that changing and that is the major cause of high and rising prices. People buy overvalued things all the time...think about all the luxury brands out there...doesn't stop them buying either because they want them or need them. Also it doesn't make sense to compare Auckland to those other places. Building consents are much more onerous and time consuming in NZ than most other places.
Finally, it is time to avoid property in places such as Singapore, Hong Kong, Major cities in China, major cities in Australia which include Sydney and Auckland etc. I expect one of the biggest drops in property prices especially in Auckland and Sydney. Both Auckland and Sydney house prices are overvalued by more than 40%. They are more vulnerable now. No asset will go straight up continuously for number of years. Any further rise is property prices could lead to another crisis. Still some market players have not learnt lessons. They think this time is different. Some Japanese investors also thought like that in the past.

There are people they can get jobs in Auckland but they cannot afford to rent. Higher rent is slowing down the economic growth as well. Properly investments along with gold are two of the most unproductive investments in the world. These types of investment have bought different types of crisis such as credit crisis and banking crisis in the past. We are going to repeat that by thinking this time is different. Just like stocks and commodities there will be time everybody will try to dump properties in the market. History will repeat in a different manner. It is time to become big bear on Auckland housing market. Easy money will not last for ever.

http://www.stuff.co.nz/business/75945463/nz-tops-world-in-fitch-house-price-comparison

Kiwi house prices are the highest in the world compared to incomes, Fitch says

NZ tops world in Fitch house price comparison

My ideas are not a recommendation to either buy or sell any property, security, commodity or currency. Please do your own research prior to making any investment decisions.

[Valuegrowth]

So far Easy credit has supported many assets globally.

China’s stock market collapse is also causing wealth destruction. Hopefully we will not have another global crisis as a result of easy credit. It is better to have some sort of credit control in some countries to cool off their properly market.

As long as we see easy credit, government bailouts and demand from Chinese investors etc, there will be some support for Auckland housing market. However, those are temporarily solutions taken by global policy markets to prevent another great depression. China has a massive credit bubble. It is actually unsustainable and will eventually burst.

We are seeing end of commodity bubble and they are plummeting now. It will follow over valued property market next. The most dangerous bubbles are housing bubbles fuelled by credit booms. The least troublesome are equity bubbles that do not rely on debt. We are closer to another housing burst in overpriced hot property markets which include Auckland and Sydney. It is time to stay away from over valued assets and it is time to identify undervalued assets globally. This is time is not different. It will come in a different manner. New Zealand had some of the worst collapses such as housing market and stock market crash in 1987.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11573823

Auckland housing and the Wall Street blockbuster

http://m.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11578353

Fran O'Sullivan: Crackdown threat to property boom

http://www.scoop.co.nz/stories/BU1601/S00105/auckland-59-less-affordable-than-rest-of-new (http://www.scoop.co.nz/stories/BU1601/S00105/auckland-59-less-affordable-than-rest-of-new-zealand.htm)


Auckland 59% less affordable than rest of New Zealand






http://www.stuff.co.nz/business/68378529/The-Auckland-housing-bubble-and-shades-of-1987

The Auckland housing bubble and shades of 1987

My ideas are not a recommendation to either buy or sell any property, security, commodity or currency. Please do your own research prior to making any investment decisions.

[Lewylewylewy]

Average property price fell for the 2nd quarter in a row in Auckland. I'm not reading too much into it as there are lots of dips in the graph, but my gut tells me that it's levelling off a bit. Can't say where I got the data from, but it's 100% reliable.

[iceman]

Spoke to a real estate friend in Nelson over the weekend. He said the local market has gone gangbusters for last couple of months and big shortage of properties for sale. Said many buyers are investors from Auckland, both looking for rental properties and retirement properties.
SO the Auckland effect is now stretching to the South Island as well as BOP, Waikato and Northland !!

[JBmurc]

Southern lakes also really hit it's straps this year .....been a few properties down our street that have been on the market for 2-4yrs both just sold within weeks breaking new highs for the area ...pure madness for the lower 400k-1mill price range here for couple years now

looks very Bubble like ...so much leverage ..interest only loans ...negative geared investments ...the world is awash with Debt ...Growth outside Property near stagnate to crashing won't be long IMHO

Glad to be wiping 500k in debt next few weeks...and finally be living in a debt free house

[iceman]

JbMurch, you don't need to answer, but if you are wiping $500k in debt, where does money come from. Selling shares , bonds, rental property ?

[JBmurc]

JbMurch, you don't need to answer, but if you are wiping $500k in debt, where does money come from. Selling shares , bonds, rental property ?

Brought house round half the price we sold the current one basically ... ...will wipe the 500k debt leaving only 150k to go >>(which is invested in the ASX Market and should if all goes to plan pay itself off next couple of years)

[Kees]

Spoke to a real estate friend in Nelson over the weekend. He said the local market has gone gangbusters for last couple of months and big shortage of properties for sale. Said many buyers are investors from Auckland, both looking for rental properties and retirement properties.
SO the Auckland effect is now stretching to the South Island as well as BOP, Waikato and Northland !!

Same here in Picton and the Bays property selling really quick now compared to 6 month or even 12 month ago .
real-estate agent finding it hard to get listings good place for retirees .

[JBmurc]

The biggest contributors to New Zealand's gross external debt are the registered banks which now account for $117.9 billion, or 48 per cent, of the country's gross overseas borrowings.

The banks steadily increased their overseas borrowings from $55.2 billion in 2001 to a high of $139.4 billion in 2008. A high percentage of this foreign-sourced debt was on-lent to house purchasers. The banks had to borrow overseas because there were insufficient domestic deposits to meet the borrowing demands of house buyers.
...

Wonder how high it is now esp with NZD falling hard against the USD (aka the leader of last resort!)

[NeverQuestion]

An Interesting article this morning

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11615870

I tend to agree.. It is a little hard to believe that anyone in Parliament cares about sky rocketing prices in Auckland

Surely they are making a killing like the rest of those lucky enough to have property in Auckland

Personally hoping my shares pay-off just to get the deposit together to secure a property

[smpl]

Brought house round half the price we sold the current one basically ... ...will wipe the 500k debt leaving only 150k to go >>(which is invested in the ASX Market and should if all goes to plan pay itself off next couple of years)

It always amuses me to see that many New Zealanders don't know that there is a difference between 'brought' and 'bought'.

[voltage]

smpl, why the ASX? blue chip? or spec mining stock?

[smpl]

smpl, why the ASX? blue chip? or spec mining stock?

I don't understand your question.

[voltage]

I don't understand your question.

sorry smpl, reread the thread and the comment should have have been directed to JBmurc who is investing in the ASX to reduce debt.

[JBmurc]

It always amuses me to see that many New Zealanders don't know that there is a difference between 'brought' and 'bought'.

Yes never the best at me english ....have got better over the years ..just never applied myself at school ...think I only got school cert in metal tech ....started work after 6 form ....

.... still haven't done too bad for unqualified investor ...been busy interior painting our debt free central otago lakeside property .... paid for by investment returns

[voltage]

How do young new zealanders get into this market. I have a daughter who rents in mount eden but as you could imagine cannot afford to buy anything there. 2 bedroom units around $700000. So the strategy is to buy something for up to 500000, rent it, pay it off and then use this as a deposit to gain access to a property where she wants to live. So, looking for something that is hands off, as a vehicle that will keep up with capital gain in Auckland. Units in better areas is this where the focus should be?

[winner69]

How do young new zealanders get into this market. I have a daughter who rents in mount eden but as you could imagine cannot afford to buy anything there. 2 bedroom units around $700000. So the strategy is to buy something for up to 500000, rent it, pay it off and then use this as a deposit to gain access to a property where she wants to live. So, looking for something that is hands off, as a vehicle that will keep up with capital gain in Auckland. Units in better areas is this where the focus should be?

Be a good Dad - make up the difference so she can stay in mt eden - even if you become joint owners until she can afford to buy you out

[voltage]

thanks winner69, hope not to go that way, would a unit always be better than an apartment to start with. I feel a unit you have more control over, no body corp etc but lower yield

[trackers]

So far Easy credit has supported many assets globally.

China’s stock market collapse is also causing wealth destruction. Hopefully we will not have another global crisis as a result of easy credit. It is better to have some sort of credit control in some countries to cool off their properly market.

As long as we see easy credit, government bailouts and demand from Chinese investors etc, there will be some support for Auckland housing market. However, those are temporarily solutions taken by global policy markets to prevent another great depression. China has a massive credit bubble. It is actually unsustainable and will eventually burst.

We are seeing end of commodity bubble and they are plummeting now. It will follow over valued property market next. The most dangerous bubbles are housing bubbles fuelled by credit booms. The least troublesome are equity bubbles that do not rely on debt. We are closer to another housing burst in overpriced hot property markets which include Auckland and Sydney. It is time to stay away from over valued assets and it is time to identify undervalued assets globally. This is time is not different. It will come in a different manner. New Zealand had some of the worst collapses such as housing market and stock market crash in 1987.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11573823

Auckland housing and the Wall Street blockbuster

http://m.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11578353

Fran O'Sullivan: Crackdown threat to property boom

http://www.scoop.co.nz/stories/BU1601/S00105/auckland-59-less-affordable-than-rest-of-new (http://www.scoop.co.nz/stories/BU1601/S00105/auckland-59-less-affordable-than-rest-of-new-zealand.htm)


Auckland 59% less affordable than rest of New Zealand





http://www.stuff.co.nz/business/68378529/The-Auckland-housing-bubble-and-shades-of-1987

The Auckland housing bubble and shades of 1987

My ideas are not a recommendation to either buy or sell any property, security, commodity or currency. Please do your own research prior to making any investment decisions.


I agree with you.

yes there is demand. Demand from migration, and demand from low interest rates and easy credit. But 1 in 3 houses is going for 1mil - That's $50k per annum interest, and if they go up 10%, next year its $55k per annum interest and $60k the year after. That is what, 1.5x the average after tax take home pay?

You can only play pass the parcel for so long among investors before it gets out of reach, and all you need is a couple short interest rate rises and its all over - And lets face it, migrants and first home buyers won't save it, because they can't afford to play - This is now into the range of pure speculators

[Bjauck]

Herald editorial about housing costs in Auckland. Where and when will it all end?
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11627212
Brit settlers used to come here to increase their chances of owning real estate.

[NeverQuestion]

I see Graheme Wheeler is pleased with his LVR restrictions

"The existing loan-to-valuation ratio (LVR) restrictions “have substantially reduced the proportion of risky housing loans on bank balance sheets,” the central bank says."

He and his cronies must be sitting back and poping the champagne on what to them seems like a successful stratergy.. But what he has effectively done is make it that much harder for those who depend on the 10% loan deposit to make it into their first home..

Easy if your parents have a bit of cash saved up or locked away in a property... but if you happen to not be so privliaged then the goal is more unobtainable than ever.. with the introduction of the LVRs there was an addition of a hard limit of how many Home loans banks can issued to the public at 10% deposit.. so if your lucky enough to find that property and have the deposit for only 10%... you now have have a bit of a fight on your hands to secure the loan to make that happen... Lets knock out the bottom level of the property market! What a great idea!!!

It is the opinion of this citizen that we need to put a stop to massive investment in housing if your so worried about this sector! Not to allow people to continue to buy more and more investment properties and with less competition now you have effectively elminated first home buyers!

Source : http://www.nbr.co.nz/article/reserve-bank-says-risks-financial-stability-have-increased-jr-188812

[macduffy]

Isn't it curious that the govt won't take a first step by following Australia in restricting non-resident property investors to new developments? It hasn't been a "silver bullet" for Oz but it should give supply a boost and stop overseas investors from helping to inflate existing house prices. Naturally, real estate agents, mortgage loan brokers, property investors' organisations and property management companies will tell us that it wouldn't work, but the problem needs a multi-faceted approach if first home buyers are to have a chance of ever owning their own homes.

[fungus pudding]

Isn't it curious that the govt won't take a first step by following Australia in restricting non-resident property investors to new developments? It hasn't been a "silver bullet" for Oz but it should give supply a boost and stop overseas investors from helping to inflate existing house prices. Naturally, real estate agents, mortgage loan brokers, property investors' organisations and property management companies will tell us that it wouldn't work, but the problem needs a multi-faceted approach if first home buyers are to have a chance of ever owning their own homes.

The problem in NZ is the supply of land. Can you imagine the howls of protest if finding somewhere to build became a competition with foreign buyers? Anyone can get a house built, we're not short of materials - but it's where to put it. There's consequences to this sort of policy that the Brits discovered years ago and Australia is about to. That is developments and sub-divisions quickly become undesirable areas without resident owners in the mix. Having whole subdivisions snapped up by foreign investors would lead to tenant dominated areas - not a good thing. I can't think of one good thing restricting foreign buyers to build new would achieve. After all, wouldn't NZ'ers leap into new building if land was available?

[JBmurc]

Isn't it curious that the govt won't take a first step by following Australia in restricting non-resident property investors to new developments? It hasn't been a "silver bullet" for Oz but it should give supply a boost and stop overseas investors from helping to inflate existing house prices. Naturally, real estate agents, mortgage loan brokers, property investors' organisations and property management companies will tell us that it wouldn't work, but the problem needs a multi-faceted approach if first home buyers are to have a chance of ever owning their own homes.

Exactly had this be enacted years ago along with a strong Capital Gains tax structure 28% (IMHO even covering the family home if sold within 3yrs etc)... then instead of young and first home buyers being pushed out of the market by speculators ..those funds from esp overseas investors would have flooded into new developments

[Bjauck]

The problem in NZ is the supply of land. Can you imagine the howls of protest if finding somewhere to build became a competition with foreign buyers? Anyone can get a house built, we're not short of materials - but it's where to put it. There's consequences to this sort of policy that the Brits discovered years ago and Australia is about to. That is developments and sub-divisions quickly become undesirable areas without resident owners in the mix. Having whole subdivisions snapped up by foreign investors would lead to tenant dominated areas - not a good thing. I can't think of one good thing restricting foreign buyers to build new would achieve. After all, wouldn't NZ'ers leap into new building if land was available? It is too late - as it is, (relatively) cheap housing in South Auckland is increasingly being bought by investors, increasingly buying houses that would have been starter homes for first home buyers. There are already many areas increasingly dominated by tenanted houses. Unaffordable deposits for a first home in a (comparatively) cheap area are converting the younger residents into long-term tenants. For a start, the purchase of NZ residential land and housing should be restricted to NZ residents.

[JBmurc]

It is too late - as it is, (relatively) cheap housing in South Auckland is increasingly being bought by investors, increasingly buying houses that would have been starter homes for first home buyers. There are already many areas increasingly dominated by tenanted houses. Unaffordable deposits for a first home in a (comparatively) cheap area are converting the younger residents into long-term tenants. For a start, the purchase of NZ residential land and housing should be restricted to NZ residents.

well yes completely banning non residents from owning residential property ,, would be to the next level ...but I'm thinking there could be issues round the free trade deals etc...

I personally wouldn't have as much an issue if these overseas investors buy off the plan for a new unit / apartment,house available 6months-2yrs into the future(which most the time they will rent out) etc ....(that if sold for a profit would be taxed 28% etc ) I do also agree now on no land banking for overseas investors etc

why... well it's investment in growing our housing stock ....

[Bjauck]

well yes completely banning non residents from owning residential property ,, would be to the next level ...but I'm thinking there could be issues round the free trade deals etc..... If both NZ citizens and other citizens were subject to NZ residency requirements would there would be an FTA issue? After all citizens of FTA partner countries and NZ citizens would be subject to the same requirements. Do any of NZ's FTA partner countries have residential requirements on residential property ownership?

Answering my question: The Singapore Residential Property Act contains this restriction: For restricted property such as vacant land, landed properties such as bungalows, semi-detached and terrace houses, prior approval is still needed if foreigners wish to buy. Landed properties is a special class of residential property that Singaporeans aspire to own, and should remain restricted. Foreigners need to apply for approval from Singapore Land Authority before buying. Singapore also has stamp duties, with foreigners paying the highest rate of 15%, followed by those who own multiple properties, with those buying their only property paying no stamp duty.
http://www.singaporeexpats.com/guides-for-expats/procedure-for-purchase.htm

Singapore is one of NZ's closest partners and a Commonwealth country with whom we have an FTA. Like NZ, it has a small population (5.4m) compared with NZ's 4.4m. Like NZ, its people, looking to buy a home, can easily be outbid by foreigners deciding it is a good residential real estate market to invest in. The Singapore Residential Property Act also distinguishes between permanent residents and citizens, with citizens paying lower stamp duty rates than permanent residents who are not citizens. Presumably they wanted to give some small advantage in buying a home to those who are committed to the country as citizens.

[Aaron]

Loan to income ratios for bank lending? If getting a big deposit wasn't enough now you have to have a well paid job. I guess in a way you are saving the younger generation from worrying about home ownership (unless their parents can give them a leg up). I guess Australians with an average income 25% higher than NZ can invest in NZ if their own markets get too overheated. Any country with a GDP higher than NZs I suppose. Good one baby boomers and your national party, make NZ a nice place for wealthy foreigners and f**k the next generation of Kiwis unless Mum and Dad are already well off. Mind you it seems NZ is not alone in this hope there will never be another recession ever and inflation will take care of all our problems. All MPs on both sides of the house with their high home ownership rates must be rubbing their hands while the next generation gets screwed over. Mind you maybe it is time for the next generations to wake up and think about their future and make your voice heard at the polling booth at the next election.
Central bank easy money and low interest rates are designed to rob savers through inflation. They have rampant inflation in house prices but can't raise interest rates until the rest of the world does or else run the risk of destroying our export competitiveness. What's the solution... I don't know but trying to save speculators and rob savers with easy money and low interest rates doesn't seem right to me. The fact that negative interest rates are a reality is mind blowing. I guess as long as no one has savings it is a vote winner and I am an idiot for not joining in.

[mfd]

Loan to income ratios for bank lending? If getting a big deposit wasn't enough now you have to have a well paid job. I guess in a way you are saving the younger generation from worrying about home ownership (unless their parents can give them a leg up). I guess Australians with an average income 25% higher than NZ can invest in NZ if their own markets get too overheated. Any country with a GDP higher than NZs I suppose. Good one baby boomers and your national party, make NZ a nice place for wealthy foreigners and f**k the next generation of Kiwis unless Mum and Dad are already well off. All MPs on both sides of the house with their high home ownership rates must be rubbing their hands while the next generation gets screwed over. Mind you maybe it is time for the next generations to wake up and think about their future and make your voice heard at the polling booth at the next election.
Central bank easy money and low interest rates are designed to rob savers through inflation. They have rampant inflation in house prices but can't raise interest rates until the rest of the world does or else run the risk of destroying our export competitiveness. What's the solution... I don't know but trying to save speculators and rob savers with easy money and low interest rates doesn't seem right to me. The fact that negative interest rates are a reality is mind blowing. I guess as long as no one has savings it is a vote winner and I am an idiot for not joining in.

There was an interesting graph in the RBNZ financial stability report the other day showing the debt-to-income ratios (and proportion of interest only loans, which is scary enough on its own) for investors and owner-occupiers. Clearly investors will be harder hit by any new regulation, and if it has a genuine effect on house prices then it'll be fantastic for first home buyers. Investors who still are able to borrow should be somewhat more reluctant to invest once prices stabilize or start to fall. I agree it'd be good to see more regulation of foreign buyers, but I'm hopeful debt-to-income ratios will help.
8038

[Aaron]

Thanks for that mfd.
Took awhile to work out the other half of the graph but if I read it right just over 50% of borrowers have debt over 5 times their income. The home-owner occupiers on interest only loans are probably mostly bulls**t artists not wanting to pay tax when they sell. But to be fair with tax free capital gains over 10% annually I guess I am just upset I haven't joined in. I wouldn't be so upset if I was mortgaged to the hilt and held real assets rather than sitting in cash hoping the world central banks don't totally wipe me out before they allow some price deflation.

[Bjauck]

... But to be fair with tax free capital gains over 10% annually I guess I am just upset I haven't joined in. I wouldn't be so upset if I was mortgaged to the hilt and held real assets rather than sitting in cash hoping the world central banks don't totally wipe me out before they allow some price deflation. Yep...the rental property investor with negative gearing (with their losses being deducted from their other income) has been effectively subsidised. The government also pays accommodation supplements so that the tenant can afford the rent on investment properties! In addition the geared up property investor has been enjoying non-taxable capital appreciation. In the meantime the fixed interest investor is even taxed on the effect of inflation on their money! The Financial Service Council have interesting research - especially their Taxation and Savings Paper. http://fsc.org.nz/


Some fixed interest investors cannot afford to buy housing so they are denied the opportunity to enjoy the "tax efficiency" of rental property investment.

In addition, owner occupiers are effectively subsidised by renters as rent has to be paid out of taxed income whereas the imputed rental benefit derived from owner occupation is not taxed. As more renters (compared with owner occupiers) tend to be younger and/or poorer, from both an income and wealth point of view, that is another inter-generational and regressive effect of the current tax system. It all adds to real estate being a preferred asset class in NZ.

[fungus pudding]

Yep...the rental property investor with negative gearing (with their losses being deducted from their other income) has been effectively subsidised. The government also pays accommodation supplements so that the tenant can afford the rent on investment properties! In addition the geared up property investor has been enjoying non-taxable capital appreciation. In the meantime the fixed interest investor is even taxed on the effect of inflation on their money! The Financial Service Council have interesting research - especially their Taxation and Savings Paper. http://fsc.org.nz/


Some fixed interest investors cannot afford to buy housing so they are denied the opportunity to enjoy the "tax efficiency" of rental property investment.

In addition, owner occupiers are effectively subsidised by renters as rent has to be paid out of taxed income whereas the imputed rental benefit derived from owner occupation is not taxed. As more renters (compared with owner occupiers) tend to be younger and/or poorer, from both an income and wealth point of view, that is another inter-generational and regressive effect of the current tax system. It all adds to real estate being a preferred asset class in NZ.

Tax is always based on cumulative income. Real estate is no different in any way from other businesses or investments. And do not assume it provides automatic gains in value.
This roller coaster graph has been around for a while but it's a good reminder that it's not all beer and skittles.

https://www.youtube.com/watch?v=kUldGc06S3U

Look for the years as you ride.

[Bjauck]

Tax is always based on cumulative income. Real estate is no different in any way from other businesses or investments. Your marginal rate of income tax is certainly dependent on your total income. Like investments in real estate, investment in bonds and other financial arrangements are indeed taxed on their "income" but, for the fixed interest financial arrangement investment, income includes capital gain as well as interest! There are many tax consequence differences between investing in shares, fixed interest and real estate. The tax take as a percent of gains (capital and income) differs markedly between these asset classes.


And do not assume it provides automatic gains in value.
This roller coaster graph has been around for a while but it's a good reminder that it's not all beer and skittles.

https://www.youtube.com/watch?v=kUldGc06S3U

Look for the years as you ride. Of course, both shares and property have had their down times and periods of angst for investors. So indeed has fixed interest - the Credit crunch and NZ finance company woes are well known. Is today's money in the big Aussie bank as safe as it used to be, when so much is lent out on mortgage to people buying in the current highly priced housing market?

[NeverQuestion]

Your marginal rate of income tax is certainly dependent on your total income. Like investments in real estate, investment in bonds and other financial arrangements are indeed taxed on their "income" but, for the fixed interest financial arrangement investment, income includes capital gain as well as interest! There are many tax consequence differences between investing in shares, fixed interest and real estate. The tax take as a percent of gains (capital and income) differs markedly between these asset classes.

Of course, both shares and property have had their down times and periods of angst for investors. So indeed has fixed interest - the Credit crunch and NZ finance company woes are well known. Is today's money in the big Aussie bank as safe as it used to be, when so much is lent out on mortgage to people buying in the current highly priced housing market?

Could Brexit spell doom for the Auckland property market? With Trillions of dollars wiped off the world markets will overseas banks start pulling in loans with other banks causing our local banks to start asking for money back?

Or will this lead to further cuts and the next stop for the Auckland property market as 2 million, and the affordable price in Nick Smiths head being 1 million for first home buyers?

I'm sure the Government will say young New Zealanders need to stop asking for handouts.. but in reality I don't want a handout I just want it to be a fair chance to own a home.. I have 40 K ready to go but good luck finding a place in that range..

[Bjauck]

It is still an unknown at the moment. If Brexit causes international investors to pull in their horns, then maybe the international investors (the ones the government claims have little effect) will reduce their involvement in the market. UK-based Kiwis will have fewer NZ dollars to invest in NZ. So there could possibly be demand-side cooling as well.

[macduffy]

Surely it's not beyond the wit of a team of bright, young civil servants - all double-degrees these days - to devise a scheme to utilise some of this surplus state land to build modest, 3 bedroom homes, one livingroom, one bathroom, no en-suite or home theatre; cluster/cross-lease/ duplex or whatever utilises the land most efficiently. Sale restricted to first home occupants, sales embargoed for say 3 years, unless back to the state at original purchase price. Ask Rymans how it's done, if necessary!

[SCHUMACHER]

UK Based Kiwis are such a small percentage % that it wont affect NZ economy - even our exports are not that big however with GB leaving the EU we have more opportunity to negotiate and a chance to beefing up our exports (trade deals) to the UK as does the UK free from the constraints of the EU and their control on UK govt spendng, fishing and border control so as nigel Ferage says , the UK will be much better off leaving the EU and taking control back as an Independant sovereign country to have there own government and people within the UK make decisions that best affect the growth of the nation , much like NZ Australia etc ...

EU is a shambles and has not worked for most of those countries in the EU - just have to look at Greece / Portugal 300% debt to GDP (laughable) Spain also high debt to GDP ratios showing that the European Union spanningn 3 decades has not functioned as intended - the EU have done nothing but take money from these countries and to be fair i think its more a dictatorship than democracy - so effectively the UK have fought for freedom and democracy - here here !! i say jolly good show ol' chap lol Finally someone took on the "establishment " which was sucking them dry anyway - there is another discussion to be had around this and that is "Quantitative easing " money printing fiasco - thats what will inevitably happen for those countries in strife like Spain and Portugal - So its fair to say the Euro will continue to devalue as they turn on the money printing machines to try and stimulate the economy as times get tough

P.S there has been far too much scaremongering in the media around the world and the reality is that trade agreements wont disappear anyway as it would hurt the EU as much as GB even though GB can explore other wider and bigger markets :)

P.P.S Brexit cant and wont spell doom for NZ property market! the thing that is driving out property market are low interest rates and demand for NZ property -

ive always said for years that we are quite different than other countries in terms of property investment and its always been a safe bet for last 80 years to put money into property in this country - sure raising deposit requirements will slow it down for NZers but not for cashed up Asians, Indians, and europeans who have alot more riches than us !!

At worst we could enter a recession and a housing cooling or correction of say 10% which wouldnt hurt in the bigger scheme of things - right throughout property investment history in NZ we have seen cooling off periods and flattening of property prices but as always it will slowly move up over time - even a period where property stagnates for 10 years is ok with me

but for any of this to happen there would have to be rising interest rates and pressure on existing home owners with mortgages and job insecurity for that to happen IMO

[macduffy]

][/QUOTE]

Surely it's not beyond the wit of a team of bright, young civil servants - all double-degrees these days - to devise a scheme to utilise some of this surplus state land to build modest, 3 bedroom homes, one livingroom, one bathroom, no en-suite or home theatre; cluster/cross-lease/ duplex or whatever utilises the land most efficiently. Sale restricted to first home occupants, sales embargoed for say 3 years, unless back to the state at original purchase price. Ask Rymans how it's done, if necessary![/QUOTE]

Who, in the Labour party do I complain to for pinching my cunning plan to provide more housing for first time Auckland home buyers?

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11671740

[NeverQuestion]

]

Surely it's not beyond the wit of a team of bright, young civil servants - all double-degrees these days - to devise a scheme to utilise some of this surplus state land to build modest, 3 bedroom homes, one livingroom, one bathroom, no en-suite or home theatre; cluster/cross-lease/ duplex or whatever utilises the land most efficiently. Sale restricted to first home occupants, sales embargoed for say 3 years, unless back to the state at original purchase price. Ask Rymans how it's done, if necessary![/QUOTE]

Who, in the Labour party do I complain to for pinching my cunning plan to provide more housing for first time Auckland home buyers?

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11671740[/QUOTE]

Perhaps they should make it that First Home Buyers mean people who have lived in NZ for 3 years at least

At the moment you have people coming into NZ and getting residency because they have X amount in their bank account

Buying a house cheap and selling it for a massive profit because they are concided "First Home Buyer" by National

Also they need to build apartments 50m2 or over otherwise you can't get the loan without 50% deposit

[macduffy]

Here's an nteresting dissertation on the Australian housing market. Worth reading.
https://dpsi7pmz5b6vt.cloudfront.net/uploads/media/2799/Newgate_Capital_Partners_-_Analysis_of_the__Australian_Residential_Market_-_May_2016.pdf

[SCHUMACHER]

NZ property market is still in full swing as its a simple case of Supply verses demand and until this changes it will remain strong unless the government rstrict the immigrant numbers or make it so hard to buy a house ( cant see the latter happening, as it defies logic)

We need to build at a faster rate output to curb demand - simple i would have thought

[SCHUMACHER]

P.S I read an article somewhere where Americans are SERIOUSLY considering coming to live in NZ - quick shut the gates , ESPECIALLY if they are ex Wall Street Bankers LOL

[baller18]

U r def right, went to an auction yesterday in mount Eden, ghost house, sold for 1.55million. There were a lot of bidders, he not slowed down. Still has at least a year to go or whatever.

[JBmurc]

P.S I read an article somewhere where Americans are SERIOUSLY considering coming to live in NZ - quick shut the gates , ESPECIALLY if they are ex Wall Street Bankers LOL

And many NZ realtors are spending big in advertising to the Yanks ...along with many other's .....NZ is up for sale quick get it while its cheap

[NeverQuestion]

Talking with one of the Guys at work around the housing situation in Auckland.

He was saying that he is moving because the landlord is trying to sell up.

So he decided to go to the action and see how much it went for.

According to him the place didn't sell and alot of the other places didn't either.

Talking with one of the officals at the Auction room apparently sales are down 80%.

Ever since the new LVR was applied to investors a few weeks back :mellow:

[macduffy]

Auckland houses will still sell at "reasonable" prices. It sounds as though expectations have yet to adjust downwards - but they will!

[Mush]

Reserve bank this morning "House price inflation remains excessive, posing concerns for financial stability. There are indications that recent macro-prudential measures and tighter credit conditions in recent weeks are having a moderating influence."

Fundamentals don't mean anything when the credit taps are turned off.

[macduffy]

Reserve bank this morning "House price inflation remains excessive, posing concerns for financial stability. There are indications that recent macro-prudential measures and tighter credit conditions in recent weeks are having a moderating influence."

Fundamentals don't mean anything when the credit taps are turned off.

"Fundamentals" meaning what, in this context?

[Mush]

"Fundamentals" meaning what, in this context?

The underlying supply/demand in-balance in the market.

[Valuegrowth]

This time is not different. By 2019/20 we could see the next trend and real picture.

[Lewylewylewy]

Thing is, without the ability to borrow, people need more money to push up prices. Otherwise, sellers could push up prices if are disinclined to sell.

Since the LVR has increased, it's possible for prices to continue to rise (even with less sales occurring) if sellers don't believe there's going to be a drop.

Of course, there's speculation (described above) and market factors. I doubt that there are going to be any market factors causing a drop in house prices, as these would need to be things like recessions or a reduction in immigration.

To summarise the above, I think the only way that prices would drop is if the media caused fear of a drop (possibly by publishing results of a lack of sales). However, the thing to remember is that demand is still there due to immigration and lack of choice in terms of investments in NZ AND every time the LVR has been increased these past few years, sales have taken about a 3 month pause, then started up again. Obviously the higher the LVR goes, the less leverage bonus investors get, which is worth noting.

Personally, I'm expecting a pause, possibly with a bit of a drop, OR a pause then continue to increase.

[Lewylewylewy]

... Well, it looks like the property market has had it's pause and is starting up again :)

[winner69]

... Well, it looks like the property market has had it's pause and is starting up again :)


.....what's the news?

[NeverQuestion]

Talking with one of the Guys at work around the housing situation in Auckland.

He was saying that he is moving because the landlord is trying to sell up.

So he decided to go to the action and see how much it went for.

According to him the place didn't sell and alot of the other places didn't either.

Talking with one of the officials at the Auction room apparently sales are down 80%.

Ever since the new LVR was applied to investors a few weeks back :mellow:

Here is some evidence to back this one..but more like 50% It seems (people have a habit of exaggerating the truth a bit )

tbh there is a lot of anger and resentment among my fellow Millennials on this topic, so watch this space i guess...

http://www.nzherald.co.nz/property/news/article.cfm?c_id=8&objectid=11727694

[Mush]

REINZ data out this morning

http://www.interest.co.nz/property/84070/aucklands-housing-market-takes-breather-rest-country-buoyant

Auckland Median price drops
Auckland volumes down 23% pcp
Fresh record highs elsewhere in the country (Usually lags Auckland)
Also drop in sales numbers in Waikato/BOP (-22% pcp)
Adjusted median days to sell lifted for first time in 5 months

Looks like new LVRs are having an effect on investor demand, along with a general tightening of credit conditions.

[Lewylewylewy]

REINZ data out this morning

http://www.interest.co.nz/property/84070/aucklands-housing-market-takes-breather-rest-country-buoyant

Auckland Median price drops
Auckland volumes down 23% pcp
Fresh record highs elsewhere in the country (Usually lags Auckland)
Also drop in sales numbers in Waikato/BOP (-22% pcp)
Adjusted median days to sell lifted for first time in 5 months

Looks like new LVRs are having an effect on investor demand, along with a general tightening of credit conditions.

It did hault after the LVR change, but it looks like sales are starting up again :)

[NeverQuestion]

This guy is my hero http://www.nzherald.co.nz/property/news/video.cfm?c_id=8&gal_cid=8&gallery_id=168322

[Valuegrowth]

It is hard to spot a bull market top for any asset. The best example is Auckland housing market. It is still roaring despite being one of the most overvalued property markets in the world.

http://www.radionz.co.nz/news/business/321523/auckland-house-listings-up-13-percent

Auckland house listings up 13 percent

[Bjauck]

A generation more or less shut out of home ownership without wealthy family help?
PM John Key's legacy of doing too little too late?
http://www.nzherald.co.nz/personal-finance/news/article.cfm?c_id=12&objectid=11767878

[fungus pudding]

A generation more or less shut out of home ownership without wealthy family help?
PM John Key's legacy of doing too little too late?
http://www.nzherald.co.nz/personal-finance/news/article.cfm?c_id=12&objectid=11767878

The result of too many people wanting to live in the same street, suburb or city? a.k.a demand?

[Bjauck]

The result of too many people wanting to live in the same street, suburb or city? a.k.a demand? Yep...limited new supply and demand for property from owner-occupiers, local investors, returning Kiwis, migrants, foreign investors and a government (both the previous Labour and current National) saying for so long there is no problem or it is Council's responsibility. For a start, is it time to prioritise those who want to buy a house to live in and introduce stamp duties for other purchasers? Or is too late for that, as a bubble could be burst?

[artemis]

A generation more or less shut out of home ownership without wealthy family help?
PM John Key's legacy of doing too little too late?
http://www.nzherald.co.nz/personal-finance/news/article.cfm?c_id=12&objectid=11767878

Or Auckland Councils' legacy of restricting land availability? And developers going bust in the GFC didn't help.

That article quotes the average national price in November 2016 as $624,675 and Auckland average as $1,051,000. But the median prices were $520,000 and $852,000. So nationally half of all sales were less than $520,000 and in Auckland less than $852,000.

Still big numbers for Auckland but not nearly as bad as banging on about averages as the media does.

[Mitch]

Anyone else believe they can dampen the demand of houses in Auckland by pushing business's out of Auckland to other regions around the country? little costs and tax's everywhere making it hard for business's to sustain profits in Auckland. Seems as though they haven't really implemented this strategy.

[artemis]

Anyone else believe they can dampen the demand of houses in Auckland by pushing business's out of Auckland to other regions around the country? little costs and tax's everywhere making it hard for business's to sustain profits in Auckland. Seems as though they haven't really implemented this strategy.

Who is they?

[Mitch]

Who is they?

Government

[Mitch]

It is still a very narrow-minded view on the idea but still seems there has been no implementation of this strategy. anyone thoughts?

[artemis]

It is still a very narrow-minded view on the idea but still seems there has been no implementation of this strategy. anyone thoughts?

Businesses in a particular location that rely on staff and customers to turn up to that location, will make the obvious decision. Even if they get subsidies to move, why would they if another location doesn't work for them in terms of skills, staff and customers?

I see Xero is setting up a new location in Hawkes Bay - presumably a calculated business decision (though it will reduce Mr Drury's commute time).

And to add - I worked for a very large global tech company that cancelled all working from home. They had a very good reason, too.

[Mitch]

Businesses in a particular location that rely on staff and customers to turn up to that location, will make the obvious decision. Even if they get subsidies to move, why would they if another location doesn't work for them in terms of skills, staff and customers?

I see Xero is setting up a new location in Hawkes Bay - presumably a calculated business decision (though it will reduce Mr Drury's commute time).

And to add - I worked for a very large global tech company that cancelled all working from home. They had a very good reason, too.

Ah yes I agree, I believe this filtering idea is not directly aimed at business's already highly established in Auckland with staff, customers, etc. I guess if they slowly engaged a lot of costs everywhere it would make it harder for the business's already established in Auckland with higher costs of production but how it would help the market is by dampen the demand for new business's that are thinking about starting up in Auckland, this could slow the demand gradually and let the supply side catch up a bit. As I said before this is quite narrow minded and would not instantly fix the crisis but would certainly take pressure off the supply side which is been mainly focused on.

[Bjauck]

Another warning of the property price bubble that has been allowed to form: http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11837842

[Bjauck]

Auckland lower quartile housing is now severely unaffordable for a couple earning median incomes - even if they can save enough to be able to afford a deposit. Auckland has about a third of NZ's population. As most young Aucklanders (and others around the country) can no longer bank on using owner-occupied housing as their pension plan, is it time for the government to enable other investments to have the same tax advantages as owner-occupied housing?

"The problems that have been created in Auckland's housing market are now long-term and structural,"
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11845608

[JBmurc]

One in 4 Aussies in mortgage stress
Yahoo7 Finance 4 May 2017

Interest rates may be at all-time lows but the number of households in mortgage stress is rising sharply.

One in four (767,000) Australian households are currently experiencing mortgage stress with just over 30,000 in ‘severe’ stress, according to Digital Finance Analytics.

The mortgage stress figure for April marks a jump of almost 100,000 households compared to March..

Read more here; https://au.finance.yahoo.com/news/one-4-aussies-mortgage-stress-051713070.html

[stoploss]

One in 4 Aussies in mortgage stress
Yahoo7 Finance 4 May 2017

Interest rates may be at all-time lows but the number of households in mortgage stress is rising sharply.

One in four (767,000) Australian households are currently experiencing mortgage stress with just over 30,000 in ‘severe’ stress, according to Digital Finance Analytics.

The mortgage stress figure for April marks a jump of almost 100,000 households compared to March..

Read more here; https://au.finance.yahoo.com/news/one-4-aussies-mortgage-stress-051713070.html

I think that headline is a bit sensationalist , it is not 1 in 4 households, plenty of people rent, plenty mortgage free etc ...
Here are some more accurate figures.
http://www.abc.net.au/news/factcheck/2015-05-06/fact-file-housing-in-australia/6442650

[Bjauck]

I think that headline is a bit sensationalist , it is not 1 in 4 households, plenty of people rent, plenty mortgage free etc ...
Here are some more accurate figures.
http://www.abc.net.au/news/factcheck/2015-05-06/fact-file-housing-in-australia/6442650

A quarter is probably more sensationalist than it should have been as the writer should have qualified what she meant by a quarter.

From the Australian "Fact Check":

1. Home ownership rate have dropped from 70% in 1961 to 67% in 2011, which is six years ago. (I wonder what the ownership rate is in 2017.)
2. Australian prices were 3 times median household income in 1980. Now they are more than 6 times.
3. 67% of householders are owners.
4. There are 9,000,000 households in OZ. 33% of householders have home loan debt (3,000,000).
5. 75% of Australia's household debt is for housing; In 1990 47% was for housing.

The article refers to 767,000 households being under mortgage stress, which is about a quarter of the 3,000,000 households with mortgage debt. So the fact check does not contradict the article, provided the writer of the article was referring to a quarter of households with mortgage debt - although the reference to a quarter of households was not explicitly qualified.

In addition, the amount of mortgage debt and the high multiple of prices/income would make prices more susceptible, than in previous years, to either an increase in interest rates or pressure on incomes.

Interesting take-out from the Australian Fact Check is this quote about house price/income ratio: "Nationally that ratio has now passed six, or more than twice as much, and in places like Sydney it went above nine during the property boom of the early 2000s."

Auckland's ratio now surpasses ten!

[Bjauck]

Does the content in Fong's Tutoring video distributed to members of the Auckland Property Investors' Association really come as a surprise? Does the current state of the (Auckland) residential property market cast owner occupiers (and especially first home buyers) in the role of prey in a jungle of hunters?

ANZ pulls sponsorship of investor group that sent members offensive tutoring video
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11851578

[JBmurc]

A quarter is probably more sensationalist than it should have been as the writer should have qualified what she meant by a quarter.

From the Australian "Fact Check":

1. Home ownership rate have dropped from 70% in 1961 to 67% in 2011, which is six years ago. (I wonder what the ownership rate is in 2017.)
2. Australian prices were 3 times median household income in 1980. Now they are more than 6 times.
3. 67% of householders are owners.
4. There are 9,000,000 households in OZ. 33% of householders have home loan debt (3,000,000).
5. 75% of Australia's household debt is for housing; In 1990 47% was for housing.

The article refers to 767,000 households being under mortgage stress, which is about a quarter of the 3,000,000 households with mortgage debt. So the fact check does not contradict the article, provided the writer of the article was referring to a quarter of households with mortgage debt - although the reference to a quarter of households was not explicitly qualified.

In addition, the amount of mortgage debt and the high multiple of prices/income would make prices more susceptible, than in previous years, to either an increase in interest rates or pressure on incomes.

Interesting take-out from the Australian Fact Check is this quote about house price/income ratio: "Nationally that ratio has now passed six, or more than twice as much, and in places like Sydney it went above nine during the property boom of the early 2000s."

Auckland's ratio now surpasses ten!

Queenstown southern lakes was past 11 recent but could even be higher now .....

[Bjauck]

Queenstown southern lakes was past 11 recent but could even be higher now ..... Wealthy foreign buyers and investors have been active in Queenstown too. Another tough area for locals without wealthy parents just looking to buy a home to live in.

About 30% of NZ's population lives in Auckland; 30.8% in Auckland & Queenstown Southern Lakes combined. It is a big chunk of the country to have such grossly unaffordable housing.

Remuera-Eastern Bays may have a similar population to Queestown Southern Lakes (about 37,000?). Its multiple would be at about 17 (or more.)

[RRR]

https://www.nbr.co.nz/article/labour-confirms-move-against-negative-gearing-b-202935

I reckon this is the most dreaded news for a property investor who is invariably leveraged and use tax concessions for investing in residential property. This will go a long way in cooling the market I think, especially in Auckland. What is National going to do to counter Labour on this issue?

Good on you Labour party!

Interesting times...

[artemis]

What will National do to counter the ringfencing proposal?

My prediction - nothing. Why?

First, it will not happen in the next 3 years anyway. Labour will need NZ First to form a government absent a miracle, and I can't see Mr Peters agreeing to alienate a significant chunk of his current and potential supporters who are retired or planning their retirement.

Even if Labour has enough support in the House, there is some sort of 5 year lead in to the policy. Every bit of which will be needed to sort out the policy and its fiscal and rental availability impacts, pass the legislation, allow time for IRD to change systems and procedures, educate the public and their advisers. A lot can happen in that time frame - eg the housing market in Christchurch is now very different to a couple of years ago - not least changes in government.

Word on the street is that individual properties will be ringfenced, so if there are two properties, loss on one will not be able to offset profit on another. That is potentially quite complex changes to tax systems.

[macduffy]

Not Auckland, but London. The Guardian's Long Read is well worth a long read.

https://www.theguardian.com/society/2017/may/25/london-property-squeeze-affordable-housing

[Blackrose]

I am infuriated with the Auckland Housing Lottery. It is beyond a joke, and heart breaking absolute nonsense.

I'm unimpressed with the hot capital cash flows from the tier one mainland Chinese banks that routinely flout the $50,000 USD only rule and have elevated prices on par with Monaco and London. $900k+ for some shack in Henderson? No way.

I'm unimpressed with the housing stock - 80 year old villas with mold problems and expensive renovations, stupid McMansons with garish double garages out the front in Howick, leaking building issues that are still unresolved and ready to sting first home buyers.

I'm unimpressed with traffic snarls where ever you go, and the grit of road grime on your teeth as a result.

As accommodation becomes a fragmented and painful cluster boil of an investment... I turn to shares.
I've got a bit in Kiwi Super, a bit in a Australian fund I can't touch for another 20 odd years, I have a good chunk in term deposits as sneery as people are going to get with me for that one.

The truth is, financial advise in NZ is all around getting a rung on the property market, because property only goes "Up!" Banking managers, FMG insurance people seem to have their eyes on vacant, chanting "Property! Property! Property!" Like it was the answer to everything.

Truth is I don't have any confidence in this. Building standards are lax, and garish apartments seem to glut out K road and other areas in Parnell, and they could be high rise slums in a decade's time. The asking prices are all over the place too, off the plan apartment purchasing and property developers fall over taking unsecured deposits left right and center. Valuations could vary so much that asking prices that have been traditionally jammed at the 1.4 million mark seems horribly out of control when suddenly a new listing price of $900,000 is floated.

Free standing houses require trudging around open homes and dealing with realty.co.nz's f@#$cked web page.
Dealing with 50 something women that are on some mind numbing personality medication and botoxed forheads. IT IS BEYOND frustrating.

They get really greasy when you declare that you have a large deposit. But f#$ck me I can not get any traction on this issue.

If some one else could explain the great housing disconnect to me that would be lovely.

[peat]

my view is that NZ is still suffering from the massive hangover of the 1987 stock market crash where people got burned so badly that they will never go back. This reinforced and amplified the view that bricks and mortar is the only place to be etc etc....
That along with all the other 'incentives' that are built into our system eg tax losses reducing income tax (not now but was this way for a long time) , availability of leverage, etc etc I guess most people know all these distortions. which include massive immigration of both people and capital.

I am of the view that it will take a similar crash in property as what we saw to the stockmarket in 1987 before this view changes. It is just too entrenched in our psyche now.

We will see (are seeing) a massive massive boom that will go way beyond any rational level and only when that crashes will there be the necessary destruction of hopes and dreams so as to force the pendulum to swing back the other way.

[Bjauck]

Residents seeking a house to live in should be prioritised and non-residents seeking an investment should pay stamp duty or be restricted to building new houses. Otherwise people who work in the city will be increasingly excluded from owning a house here. For example:
Cost of Auckland living forces police officer to quit
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11877760

[macduffy]

I suppose that if we wait long enough, Auckland workers won't be able to afford to live in the city, services will degrade, other centres/cities will become more attractive to business/commerce, Auckland values will decline - and the cycle will start again. For those who live long enough!

:mellow:

[artemis]

Residents seeking a house to live in should be prioritised and non-residents seeking an investment should pay stamp duty or be restricted to building new houses. Otherwise people who work in the city will be increasingly excluded from owning a house here. For example:
Cost of Auckland living forces police officer to quit
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11877760

That police officer story is quite strange. Police are pretty well paid, but being a student not so much.

[winner69]

Hmmmm
http://www.interest.co.nz/opinion/88337/alex-tarrant-says-we-must-cut-cost-supplying-houses-and-must-feed-through-lower-house

[Bjauck]

That police officer story is quite strange. Police are pretty well paid, but being a student not so much. LOL. Auckland Police may be "well paid" or paid enough to be able to save a deposit and get a mortgage for a house 300+ Ks out of Auckland. He sees his only long term hope, to be able to buy even just a basic modest home in his home town of Auckland, is to go back to study to be a highly paid accountant or management consultant (b.com).

Let's hope Accountants and real estate agents are good at keeping armed gangs under control....and good at nursing and teaching for that matter too.

[Blackrose]

Thanks for letting me rant on here about the housing market. Cheers.

In other news, the big 4 NZ banks, ANZ, Westpac, BNZ and ASB all got Moodies down gradings this week. I'm sure that will have no effect on the business as per usual of lending huge mortgages to buy over priced Auckland Housing stock.

To quote a Tui Add - "Yeah right"

[Tweak]

Residents seeking a house to live in should be prioritised and non-residents seeking an investment should pay stamp duty or be restricted to building new houses. Otherwise people who work in the city will be increasingly excluded from owning a house here. For example:
Cost of Auckland living forces police officer to quit
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11877760

Pretty sure that he can move to another city and still get paid the same. Yeah sure he may be away from family and friends, but life happens. I think his letter i a bit of a cop out (just going by his letter). I earn around the same as him and through a fairly stable budget I am definitely not living paycheck to paycheck (live in Auckland) and saving (investing) for my future.

I also believe the government needs an accommodation supplement for the police depending on the location where they work, like what the NZDF is about to roll out in July. Auckland needs to retain there police force and the cost of living in Auckland isn't getting cheaper.

Disc: don't own a house...and with the market, not looking... unless mortgage rates sky rocket forcing people to default on their mortgages losing their homes and flooding the markets with houses.

[Aaron]

If some one else could explain the great housing disconnect to me that would be lovely.
If by disconnect you mean the disconnect between the price and what you actually get. I would suggest you have been fooled by central banks and inflation. Although it doesn't translate well below is a copy and paste from the nz reserve banks own inflation calculator.

Housing
that cost $100,000.00
in quarter 4 of 2012
would have cost
$146,890.16
in quarter 4 of 2016
Total percentage change
46.9%
Number of years difference
4.00
Compound average annual rate
10.1%
Decline in purchasing power
31.9%
Index value for 2012 quarter 4 is
1586.9
Index value for 2016 quarter 4 is
2331.0

So over the last four years your deposit has lost 31.9% housing purchasing power. Although if you owned a house you would be quite happy with this.
So what is the reserve bank doing about this situation http://www.rbnz.govt.nz/monetary-policy/official-cash-rate-decisions
Well today they did sweet FA and will probably continue on that path because all other developed nations are following the same playbook.
For comparison I show below wage price inflation.

Wages
of $100,000.00
in quarter 4 of 2012
would have been
$110,210.57
in quarter 4 of 2016
Total percentage change
10.2%
Number of years difference
4.00
Compound average annual rate
2.5%
Decline in purchasing power
9.3%
Index value for 2012 quarter 4 is
25.2
Index value for 2016 quarter 4 is
27.7

I see a disconnect between a 9.3% and a 31.9% decline in purchasing power.

[Aaron]

I guess the next question is what is causing the house price inflation. The underlying cause of inflation is usually that too much money is available to purchase too few goods and services, or that demand in the economy is outpacing supply. House hold debt has only risen about 21% over that period but not sure where RBNZ gets its stats http://www.rbnz.govt.nz/statistics/key-graphs/key-graph-household-debt Also I don't understand M3 money supply so can't see if this has grown over the same period.
Possibly immigration is a small part of the problem from a demand perspective. http://www.stuff.co.nz/business/industries/93958297/no-sign-of-nz-becoming-less-popular-for-migrants-or-holidaymakers. I don't really know but I suspect that low interest rates and QE internationally are playing some part.

[Aaron]

I know I shouldn't stray from mainstream commentators but I have a confirmation bias so need to look to the fringes to find it. Albert Edwards has been wrong for a long time but in case your like me and angry at central banks and central bankers.
http://www.zerohedge.com/news/2017-06-22/albert-edwards-citizens-will-soon-turn-their-rage-towards-central-bankers

[Bjauck]

I guess the next question is what is causing the house price inflation. The underlying cause of inflation is usually that too much money is available to purchase too few goods and services, or that demand in the economy is outpacing supply. ....

House price inflation...perhaps boosted by:
1. Recent low interest rates allow servicing of bigger mortgages.
2. Financial market and security bias towards lending for real estate rather than for business.
3. Taxation system bias towards investments with capital appreciation and negative gearing capability rather than income production.
4. Small stock exchange (possible because of tax system and poorly developed superannuation scheme which would have invested in NZ companies) which would allow investment diversifcation
5. Housing market open to overseas investors, who can bring in overseas money which competes with NZ residents relying on NZ money.
6. Limited land in the places where people want to live.
7. RMA
8. Small market for building product suppliers.

any other factors?

[Bjauck]

Pretty sure that he can move to another city and still get paid the same. Yeah sure he may be away from family and friends, but life happens. I think his letter i a bit of a cop out (just going by his letter). I earn around the same as him and through a fairly stable budget I am definitely not living paycheck to paycheck (live in Auckland) and saving (investing) for my future.

I also believe the government needs an accommodation supplement for the police depending on the location where they work, like what the NZDF is about to roll out in July. Auckland needs to retain there police force and the cost of living in Auckland isn't getting cheaper.

Disc: don't own a house...and with the market, not looking... unless mortgage rates sky rocket forcing people to default on their mortgages losing their homes and flooding the markets with houses.

He could move to another city but then that begs the question...Auckland still needs to attract police who can afford accommodation in Auckland, and raise families and settle in Auckland.

Why should Auckland-raised police feel obliged to move away from Auckland to be able to afford to buy a house? I don't think people in good careers should have to become involuntary "exiles" just to be able to afford to buy a house. That is a sign of a broken residential housing market.

Is the cost of housing and accommodation in Auckland making recruiting staff difficult?

[Blackrose]

Hi hi, yes I'd add the not so subtle recommendations that potential first home buyers crack open their kiwi saver and use that as a deposit on a home.

I can't say annnything wrong with that one don't worry about retirement naaaah....

Aaron - pretty much what you said. I've been "Bubble girl" for the last couple of years reading from ZH, and your excellent analysis not with standing, mine was a much simpler one.

Are Auckland's house prices extremely unaffordable by any metric you want to use? -
Yes. 950K to 1.4 million for a house is not sustainable.
Has mortgage fraud been going up? Yes a google search reveals plenty of bad behavior fueled by an over priced market.
Is it because of hot money from Asia top tier cities and lax regulation? - it doesn't help.

We are at low interest rates now as RBNZ has done FA with them leaving them at 1.75% even though the US Federal Reserve has hiked rates and wants to hike again, even during the crazy reign of the orange one, and as the big 4 banks on orders from their Australian masters have upped their rates.... how can bubble house prices in Auckland not be affected?

So far no one else can really give me an answer on that one.

[macduffy]

any other factors?

How about the obvious one of supply not being able to keep up with the influx of population to Auckland. Record immigration being just one sub-factor of that.

[artemis]

....... .. Are Auckland's house prices extremely unaffordable by any metric you want to use? - Yes. 950K to 1.4 million for a house is not sustainable. .....

Well how about using the median price metric? $865k based on REINZ actual sales in May.

By that metric half of all sales were under that price last month.

Of course they might not be a 3 bedroom standalone house with garage but plenty of people step onto a low rung of the property ladder, pay down principal as fast as poss, upskill for better income and trade up in a few years.

'Twas ever thus.

[Joshuatree]

1 Monaco $60,000 a sq metre
19 NZ Auckland $7000 a sq metre
World's most expensive cities | Global Property Guide (https://www.google.co.nz/url?sa=t&rct=j&q=&esrc=s&source=web&cd=5&ved=0ahUKEwiBxJTfm9PUAhUIwLwKHaQGA4UQFgg2MAQ&url=https%3A%2F%2Fwww.globalpropertyguide.com%2Fmo st-expensive-cities&usg=AFQjCNFcb2mNROZHkxxiG4L6yFv_VdNjcQ)

[Bjauck]

Well how about using the median price metric? $865k based on REINZ actual sales in May.

By that metric half of all sales were under that price last month.

Of course they might not be a 3 bedroom standalone house with garage but plenty of people step onto a low rung of the property ladder, pay down principal as fast as poss, upskill for better income and trade up in a few years.

'Twas ever thus.
Affordability is sometimes calculated taking the median price of the lowest quartile of residences. Studies have shown Auckland is grossly affordable. Raising a deposit from after tax income for even a $650K dwelling would takes some saving even with a frugal lifestyle. Denying yourself latte and crushed avocado and feta lunches would not make a material difference!

[Bjauck]

1 Monaco $60,000 a sq metre
19 NZ Auckland $7000 a sq metre
World's most expensive cities | Global Property Guide (https://www.google.co.nz/url?sa=t&rct=j&q=&esrc=s&source=web&cd=5&ved=0ahUKEwiBxJTfm9PUAhUIwLwKHaQGA4UQFgg2MAQ&url=https%3A%2F%2Fwww.globalpropertyguide.com%2Fmo st-expensive-cities&usg=AFQjCNFcb2mNROZHkxxiG4L6yFv_VdNjcQ)

NZ income/pp $38k
Monaco's $164k

What percentage of Monaco's workforce commute in from Italy and France each day?
What percentage of Auckland's workforce commute in from Hamilton and Tauranga each day?

[macduffy]

Affordability is sometimes calculated taking the median price of the lowest quartile of residences. Studies have shown Auckland is grossly affordable. Raising a deposit from after tax income for even a $650K dwelling would takes some saving even with a frugal lifestyle. Denying yourself latte and crushed avocado and feta lunches would not make a material difference!

I guess we should read this as: "grossly unaffordable."

[Bjauck]

I guess we should read this as: "grossly unaffordable."Thanks Macduffy....if only it did not need correcting! However with current policy and investment settings, accommodation costs and land values are destined to continue to comprise such a large part of NZers income and wealth.

[Valuegrowth]

There are most expensive cities in Asia and Africa as well.

https://face2faceafrica.com/article/luanda-expensive-2

What Makes Luanda Most Expensive City in the World?

https://www.theguardian.com/cities/gallery/2017/jan/23/10-most-unaffordable-cities-housing-in-pictures

[Blackrose]

Wooh, what happened to Auckland with the whole million dollar price tag stuff we all got told about just a few months ago?
$865k, now.
So my initial statement was that Auckland house prices were in bubble territory but it kinda looks like a deflating bust now.... Nah I think Auckland's house prices are going to go down a lot more when you have more motivated sellers trying to get out from under large mortgages.

After Auckland's leaky building fiasco, (literally I have a family member that wrote the book on that) and the ongoing cheap building materials being everywhere I'd have no faith in off plan apartment purchasing. My $0.02 of course!! I'm not everyone.

[Bjauck]

Wooh, what happened to Auckland with the whole million dollar price tag stuff we all got told about just a few months ago?
$865k, now. Depends - are you comparing median price with average price? Average price is a fair bit higher than median. Also, median prices can vary month to month depending on mix of expensive v. cheap houses sold during the month.


So my initial statement was that Auckland house prices were in bubble territory but it kinda looks like a deflating bust now....I am not sure about that. See above.


...
After Auckland's leaky building fiasco, (literally I have a family member that wrote the book on that) and the ongoing cheap building materials being everywhere I'd have no faith in off plan apartment purchasing. My $0.02 of course!! I'm not everyone. Opinion piece in the NZH
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11880933

[Bjauck]

There are most expensive cities in Asia and Africa as well.

https://face2faceafrica.com/article/luanda-expensive-2

What Makes Luanda Most Expensive City in the World? You missed an important qualifier. The most expensive city for ex-patriates. "The rising demand for luxurious housing in Luanda against a limited supply of it has seen the cost of housing rise steadily over the past decade."

I am betting there are broad swathes of Luanda where the burgeoning ex-patriate oil executive population would not live. Luanda, Angola, is recovering from a civil war - unlike Auckland!

[Blackrose]

I am chicken little. I think the sky is falling, and the Auckland's housing market is going down too.
But eh! If your that confident that it's not go ahead.

[JBmurc]

Reading the NZ Property mag put some of the hottest Auckland Suburb ....the highest 2.7mill average for 3bed the lowest in country -Bluff in southland 3brd- 130k average .....

[SirPrize]

Thought I'd ask the people who would know, https://www.stuff.co.nz/business/95284167/realestateconz-reports-record-fall-in-new-listings

What does this actually mean?

Will the remaining sellers start to decrease the asking price now?

[Topagent]

I'm personally a realestate agent, my take on the article and what's actually happening in the market place is a lot different than the media reports. First in response to the article quite simply you may see a small surge back up with prices as the buyers are now once again outweighing the sellers. I'm in hamilton and we are consistently having multiple offers on properties and auctions are still being brought forward. The houses sold at auction day has decreased but the number sold hasn't ( many selling only a few days after auction.) in our office meetings we are seeing a large number of buyers unable to find options. I'm busier than most agents (number two in the city for my brand) so there will be many saying it's slow and hard but these agents are new and haven't been in this type of market before. Some sellers are waiting to sell until after elections as there is always a slow down market wise historically which then takes off again from January.

[winner69]

Thought I'd ask the people who would know, https://www.stuff.co.nz/business/95284167/realestateconz-reports-record-fall-in-new-listings

What does this actually mean?


Will the remaining sellers start to decrease the asking price now?

Don't forget the housing market as outlined by the media is not the property market in reality

[Bjauck]

...I'm in hamilton and we are consistently having multiple offers on properties and auctions are still being brought forward. The houses sold at auction day has decreased but the number sold hasn't ( many selling only a few days after auction.) in our office meetings we are seeing a large number of buyers unable to find options. Mayby Hamilton is at the position Auckland was a couple of years ago. I increasingly hear of Aucklanders, moving up to 150 km North and South just to buy a home without huge mortgages and clogged up neighbourhoods. Previous Auckland booms have seen a subsequent booom (although not to the same extent) elsewhere.

[Topagent]

Hamilton doesn't lag behind much at all we respond to aucklands market extremely quickly as Auckland is very active in our market here.

[Joshuatree]

Is that good tactic topagent re forcing an auction forward?. My friend put his best offer on a house and the auction was brought forward.It had only been listed a short while so hardly anyone else got to look at it.Only one other contender who pulled out because s/he didn't have enough time to do due diligence. So my friend scored the house quickly without any comp but i guess he may wonder if he paid to much. But he'd been looking and bidding a few months previously and was fatigued and running out of time to buy and shift his business into the basement.

[Topagent]

Every situation is different and alot of it depends on the appraisal we did before marketing also the level of inquiry ect. In some cases we recieve a pre offer but have huge interest and the vendor will wait in other cases we may have little traction and the offer is at a good level that the owner is happy to sell. Here in Hamilton our firm brings it forward so bidding starts at the accepted level. I've had many auctions end up selling to someone other than the original bidder.

[winner69]

Funny as REINZ blaming the LVR rules in making life hard for them .....incomes down big time I reckon

[JBmurc]

Funny as REINZ blaming the LVR rules in making life hard for them .....incomes down big time I reckon

Of course REINZ poor kiwis not being able to tick themselves to the eyeballs.... (less sales less FAT commissions) ...If REINZ had their way it would be 95% LVR ...

Always laugh at the many emails I receive from local R.E agents ...(which you get hammered with if you dare ask a Question online on a property they have listed next you're email bombed )

I love the likes of Invercargill where Property is flat and isn't even reached the same prices it had back at its peak in the 2000's ....then you get R.E talking utter BS like -http://www.stuff.co.nz/national/92427656/southland-property-market-starved-for-listings

yet go to RE nz and Invercargill has about the same amount of listings as dunedin a city more than twice the size ...friends in Invers have taken their fully renovated home asking only 230k off the market after 6 months of nil interest sounds like the same right across the city ....got a few on my watchlist I was looking at as investments etc ....still there

[Blackrose]

So this just in.
https://www.newsroom.co.nz/2017/08/15/42763/comment-bill-english-just-lit-the-fuse-for-another-boom

BEnglish wants to do away with macro prudential controls such as the LVR and no to a DTI. Well colour me impressed with the RE industry. You really know how to keep people in generation rent in their place don't you? Some top notch lobbing there you army of property flipping crooks. I can almost see a hand puppet with a Bailey's blazer up BEnglish's back side playing him like the muppet he is.

When not if - when this all goes tits up, as over extended over priced housing hits the wall in the next few years we can point to this moment when RBNZ Wheeler washed his hands took the golden parachute said "Thanks gents - no one listened to me on LVRs or DTIs - so I'm off to take some snooze in Rarotonga, and call it retirement."

So the housing bubble will continue to scream on until... the interest rate hike and market forces will kill it.

[Bjauck]

Immigration gives the appearance of a good economy (desptite productivity stagnation) and booming house prices pleases the National Party support base. As for the mushrooming property debt, when the next move for interest rates is probably upwards...is that a problem for another day?

I would have thought that the first sign of flattening property market should be relief and not result in trying to encourage even more housing debt. The fact that first home buyers find it difficult to enter the market is the result of years of inaction from the government. Yet, the Reserve Bank is being scape-goated?

[NeverQuestion]

Immigration gives the appearance of a good economy (desptite productivity stagnation) and booming house prices pleases the National Party support base. As for the mushrooming property debt, when the next move for interest rates is probably upwards...is that a problem for another day?

I would have thought that the first sign of flattening property market should be relief and not result in trying to encourage even more housing debt. The fact that first home buyers find it difficult to enter the market is the result of years of inaction from the government. Yet, the Reserve Bank is being scape-goated?

None of this should be surprising.. National are looking after their rich-listing mates which means doing as much as possible to keep business ticking over and not addressing real social issues. Seems like the answer in 2008 was to open the doors to more Immigrants. But the unintended consequence was to pump up the housing market and place huge demand on infrastructure in our biggest city. Given any real option would mean hurting the wealthy, negative geared supporters with major investment in property. National turned to Nick Smith to deflect blame and look busy with no real results...

Honestly National pend to care about middle and low income New Zealand but its all an act. And helping First Home Buyers into a 650K Loan with 10% deposite in a world primed to raise interest rates is a really really terrible idea.

Hence the Reserve Bank of New Zealand Stepped in to to protect investors and First Home Buyers for over extending themselves and getting themselfs into real hardship in the coming years..

[Joshuatree]

Guys you've described that better then I've been attempting to on the political threads, thank you. Feel free to put them there and if you don't get around it is it acceptable for me to? no prob if not cheers JT

[macduffy]

Hence the Reserve Bank of New Zealand Stepped in to to protect investors and First Home Buyers for over extending themselves and getting themselfs into real hardship in the coming years..

Not quite. The RBNZ don't have any mandate to protect investors - first home buyers? maybe - but they do have a function in ensuring a sound financial system. That's their objective in applying lending restrictions.

[stoploss]

None of this should be surprising.. National are looking after their rich-listing mates which means doing as much as possible to keep business ticking over and not addressing real social issues. Seems like the answer in 2008 was to open the doors to more Immigrants. But the unintended consequence was to pump up the housing market and place huge demand on infrastructure in our biggest city. Given any real option would mean hurting the wealthy, negative geared supporters with major investment in property. National turned to Nick Smith to deflect blame and look busy with no real results...

Honestly National pend to care about middle and low income New Zealand but its all an act. And helping First Home Buyers into a 650K Loan with 10% deposite in a world primed to raise interest rates is a really really terrible idea.

Hence the Reserve Bank of New Zealand Stepped in to to protect investors and First Home Buyers for over extending themselves and getting themselfs into real hardship in the coming years..

I think the RBNZ stepped in to protect the banks from the banks , to avoid a GFC like crisis/run on the banks here in the event of a property collapse .
Maybe have a read of "The bank that broke the bank " a good story around Westpac after the 1987 sharemarket crash , some good KP stories in there as well when he took 10 % of the company and tried to clean it up , sack masses of staff .......

[Bjauck]

Not quite. The RBNZ don't have any mandate to protect investors - first home buyers? maybe - but they do have a function in ensuring a sound financial system. That's their objective in applying lending restrictions. I think it is beneficial to have the experts of an independent central Bank protecting the financial system.

That's especially handy in an election year when the inexpert politicians and Parties would like to introduce (risky) policies in order to please and appeal to those neglected parts of the electorate that have been hurt by the current political and economic environment (first home buyers in this case.)

I agree with Mr Morgan...The housing train wreck has been decades in the making and both Labour and National can take the credit for that😮
https://www.nbr.co.nz/opinion/housing-train-wreck-decades-making-gm

[winner69]

I think it is beneficial to have the experts of an independent central Bank protecting the financial system.

That's especially handy in an election year when the inexpert politicians and Parties would like to introduce (risky) policies in order to please and appeal to those neglected parts of the electorate that have been hurt by the current political and economic environment (first home buyers in this case.)

I agree with Mr Morgan...The housing train wreck has been decades in the making and both Labour and National can take the credit for that😮
https://www.nbr.co.nz/opinion/housing-train-wreck-decades-making-gm

For decades we have had negtive net migration and we have had posituve net migration (sometimes quite high) ....we have had building booms and building busts .....we have had high interest rates and we have had low interest rates ......


.......but we always seem to have a housing crisis and homeless people

Sometimes you wonder that is how the world actually works ....and housing crisis is just a term used by academics / commentators because in theory that's what we should be having.

[Bjauck]

For decades we have had negtive net migration and we have had posituve net migration (sometimes quite high) ....we have had building booms and building busts .....we have had high interest rates and we have had low interest rates ......


.......but we always seem to have a housing crisis and homeless people

Sometimes you wonder that is how the world actually works ....and housing crisis is just a term used by academics / commentators because in theory that's what we should be having. True there have always been cyrcles. However...

When the multiples of household income needed to get into a lower quartile house are as high as today, it means that raising a deposit has never been so difficult! Also, Back in the day, a household often just had the one income. Now, a second parent has to earn a decent income too - just to afford the house that could be bought with one income - back in yesteryear. The kids end up being brought up by strangers for much of the time. So those figures speak for themselves. The disparity in after tax incomes and wealth is growing.

I have not seen the figures for the number of occupants per average fourth quartile dwelling - but I would not be surprised if it has been growing over the years. I wonder how many garages are being used for housing people in Auckland...

[macduffy]

Quite right, Bj. And it's not just the "one income" bit that's changed.There's been a huge shift in the definition of "family" - housing policy needs to take account of this, somehow. Governments and society generally are a long way from solutions to this problem.

[winner69]

Interesting

http://www.sra.co.nz/pdf/HousingFallacyAug17.pdf


I make no comment

[artemis]

Quite right, Bj. And it's not just the "one income" bit that's changed.There's been a huge shift in the definition of "family" - housing policy needs to take account of this, somehow. Governments and society generally are a long way from solutions to this problem.

What sort of changes were you thinking of? Census stats on household composition have not changed much since the 2001 census.

Most households are one family, but nearly a quarter are one person (thus one income) households.

[Bjauck]

Interesting

http://www.sra.co.nz/pdf/HousingFallacyAug17.pdf


I make no comment

What I have taken from your link to the "Housing Fallacy" pdf...is that the increase in cost of purchasing land and building has far outstripped the increase in incomes. Consequently the number of houses being built is in equilibrium to what we can afford. As the population is increasing that means that the number of occupants per dewelling in recent years has increased. Ergo, for the poorest people in Auckland, the consequence of this state of affairs is that there is overcrowding and a deterioration in well-being. Exactly what has been widely reported...

[artemis]

..... As the population is increasing that means that the number of occupants per dewelling in recent years has increased. Ergo, for the poorest people in Auckland, the consequence of this state of affairs is that there is overcrowding and a deterioration in well-being. Exactly what has been widely reported...

Occupants per dwelling have increased? Not according to the last census, though it may change in next year's census.

According to Stats:

Most households consist of one or two people
Households with one or two usual residents made up over half of New Zealand households, at 57.0 percent. Households with three or four usual residents were not as common, at 16.4 percent and 15.2 percent, respectively. Households with six or more usual residents made up just 4.5 percent of households. There was little change since 2001.

[Bjauck]

What sort of changes were you thinking of? Census stats on household composition have not changed much since the 2001 census.

Most households are one family, but nearly a quarter are one person (thus one income) households.

Many of those one person households I imagine are older widows/windowers many of whom have owned property for many years, perhaps mortgage free now. An asset rich, cash and income poor situation for many perhaps.

It would be interesting to see stats on the cheapest quartile of the property market. I imagine that is where you may see many overcrowded poor households plus the poorer pensioners. Many of the single person widowed household are likely to be in the traditional Kiwi single dwelling section property, that was often the kiwi norm decades ago. Also the smart retirement village units would have lots of single person households. These days our dear leaders have been telling young couples to buy a sardine tin apartment as that is what their policies have helped produce as the affordable option.

[Bjauck]

Occupants per dwelling have increased? Not according to the last census, though it may change in next year's census.

According to Stats:

Most households consist of one or two people
Households with one or two usual residents made up over half of New Zealand households, at 57.0 percent. Households with three or four usual residents were not as common, at 16.4 percent and 15.2 percent, respectively. Households with six or more usual residents made up just 4.5 percent of households. There was little change since 2001. Is that NZ wide not just for Auckland?
An increase in single older people living alone? What about the poorest quartile of households and properties. I would be interested how that compares with the change in number of occupants per dwelling for the top quartile of house values. I would not be surprised to see an increasing divergence as wealth levels widen....

[cyclist]

In the linked pdf from W69...look at the graph "Number of People Per Private Dwelling" since May 2008 it has been increasing. Of course that could mask what has been happening in the poorest households...the number of occupants per dwelling could have been increasing at an even higher rate in those households. in addition of course the situation has been been more exaggerated in Auckland than with national figures.

Aging population will also help to keep the averages down (more elderly = more one or two people households). It is what is happening at the margins that is important, and I suspect you are right Bjauck.

[Bjauck]

Occupants per dwelling have increased? Not according to the last census, though it may change in next year's census. ....

In the linked pdf from W69...look at the graph "Number of People Per Private Dwelling" since May 2008 it has been increasing. Of course that could mask what has been happening in the poorest households...the number of occupants per dwelling could have been increasing at an even higher rate in those households. in addition of course the situation has been more exaggerated in Auckland than with national figures.

From the pdf...."In light of all the factors that determine the level of building, including new housing costs, what has been built largely reflects demand. This isn't the same thing as saying there aren't lots of people living in unsatisfactory housing conditions." (my emphasis)

[winner69]

The housing crisis (if there is actually one) won't be fixed until we treat houses as homes and not as stores of wealth

[Zaphod]

The housing crisis (if there is actually one) won't be fixed until we treat houses as homes and not as stores of wealth

Unfortunately that concept would be antithetical to the beliefs of western society. At this point, I can't see it changing.

[peat]

I'm calling a top in the Auckland property market and currently have my apartment up for sale
I've owned it a long time so I'm not really a trader, but at this point I want the money.
I will of course have to live somewhere so I will move to the country and semi-retire.

[Joshuatree]

if your apartment is in that golden most desired central circle in which there is more water than land i cant see much happening to prices, demand/desire will always exceed supply.

[peat]

it certainly is JT,
in case anyone wants to view my little world and consider an investment or a lifestyle living here is the advert.

https://www.trademe.co.nz/Browse/Listing.aspx?id=1523153760

[winner69]

it certainly is JT,
in case anyone wants to view my little world and consider an investment or a lifestyle living here is the advert.

https://www.trademe.co.nz/Browse/Listing.aspx?id=1523153760

Nice

Jeez $700k for 56sqm ... must be a bubble of sorts

Mind you the car park alone is worth heaps I'm told

The country will look so spacious eh

Good luck ....hope you get $800k

[peat]

Nice

Jeez $700k
.hope you get $800k

Inflation IS rife! lol

[peat]

it certainly is JT,
in case anyone wants to view my little world and consider an investment or a lifestyle living here is the advert.

https://www.trademe.co.nz/Browse/Listing.aspx?id=1523153760

looks like a deal will be cut tomorrow - very exciting!

[peat]

looks like a deal will be cut tomorrow - very exciting!
nervously waiting for it to go unconditional.... why did there have to be a stockmarket correction right now.

[Joshuatree]

Great location Peat, hope you got more through auction. First thing i would do is make the bed a swing down one. Where to next?Good luck

[peat]

Where to next?Good luck

I have a conditional agreement on a house in Whanganui.
I'm still waiting for my sale to be confirmed. Kinda nervous about it given the state of the financial markets.

[peat]

I'm still waiting for my sale to be confirmed. Kinda nervous about it given the state of the financial markets.
My sale has now gone unconditional. 4 weeks all up. (Oh and another couple until settlement). Not bad liquidity for property.

Now I just want to make this perfectly clear that I have never been a property speculator. But as a person in NZ I have simply recognised the importance of tenure.
And so back in 2001 when I tried to rent for a while, after selling a Kingsland villa, it wasnt three months till the landlord wanted me to let viewers through the property. I was livid about that and said no, I am moving out thank you as I am not living in a property on the market - no quiet enjoyment!
So I bought my current apartment
16 years later the price has tripled and I can bank half a million gross profit (untaxed of course). So given I put a hundred K into the venture that would approximately equal a five bagger.
I just couldnt resist and now the deal is done.

And because I am moving to a completely different property market I get to keep half the spoils.
Thanks Auckland

[JBmurc]

Great work peat ... property alway been a great way to accumulate wealth

[NeverQuestion]

looks like a deal will be cut tomorrow - very exciting!

Can I ask how much you paid for it and what year if you remember?

[iceman]

Can I ask how much you paid for it and what year if you remember?

Pretty much answers that in post 494. Well done Peat

[NeverQuestion]

Pretty much answers that in post 494. Well done Peat

Thanks! Must be going blind!

[value_investor]

Interesting to see banks already lowering rates in anticipation of the reserve bank reducing rates in the future, its not something you see everyday. I remember the times when rates would go down and banks wouldn't move their rate down the full .25% and get criticised for it. Pretty sure the move down is pre-emptive because the Auckland market has gone soft and needs more blood injected into it. The last REINZ market report showing the least amount of sales for March since 2008 and median prices down 2.7%.

[Bjauck]

Quiet enjoyment of your home?
A reminder for all those families and others priced out of home ownership by investors?
Why being a tenant in NZ is not a secure and stable alternative to home ownership.
https://www.stuff.co.nz/business/112304591/landlord-must-pay-renter-compo-for-surprise-backyard-construction-of-a-house