Potential adverse effects from coronavirus on NZ property market

[ynot]

Yes, high unemployment is the driver for mortgage defaults. If we get to 15% + as predicted house prices will fall.

[value_investor]

https://www.nzherald.co.nz/nz/news/a...ectid=12322474

And this is perhaps the first indication of how things will be. Unemployment peaked at 6.7% during the GFC which was quiet mild on global standards, but this is a bit different. I mean during the GFC, at least companies could still operate and trade.

I know quiet a few people who are very highly leveraged, with house prices as high as they were the loans taken out during the past few highs have been so high. There could be waves of houses going back onto the market as mortgagee sales..

[JBmurc]

https://www.nzherald.co.nz/nz/news/a...ectid=12322474

And this is perhaps the first indication of how things will be. Unemployment peaked at 6.7% during the GFC which was quiet mild on global standards, but this is a bit different. I mean during the GFC, at least companies could still operate and trade.

I know quiet a few people who are very highly leveraged, with house prices as high as they were the loans taken out during the past few highs have been so high. There could be waves of houses going back onto the market as mortgagee sales..

As I live close to Cromwell I'm going to be keeping a close eye on listing numbers in the local property markets ..Queenstown currently has 497 listings -but with many listings covering many hundreds of new apartments coming into a tourism collapse like NZ has never seen- I think it will rise to record levels in turn stopping the Neg+Auctions price hyperbole ... to a race to exit listings when the reality sets in we will see many more price advertising ...

Wanaka + Cromwell both will come under pressure as well ... IMHO. I think we will see 10-20% pull back in prices for good properties (freehold family homes in good locations) but see much larger falls in -Apartments/units/tiny family homes upwards to 50% etc

I have played Golf with many local RE agents over end 2019/20 and they have all seen a real slow-down in the sector ,,,, so COVID is hitting right when the market was getting weaker

[thebusinessman]

As I live close to Cromwell I'm going to be keeping a close eye on listing numbers in the local property markets ..Queenstown currently has 497 listings -but with many listings covering many hundreds of new apartments coming into a tourism collapse like NZ has never seen-

JBmurc - any ideas on the best place to watch that data? I'd love to see some historical data on listings, time to sell, sale price etc to compare to what's likely to come.

[fungus pudding]

As I live close to Cromwell I'm going to be keeping a close eye on listing numbers in the local property markets ..Queenstown currently has 497 listings -but with many listings covering many hundreds of new apartments coming into a tourism collapse like NZ has never seen- I think it will rise to record levels in turn stopping the Neg+Auctions price hyperbole ... to a race to exit listings when the reality sets in we will see many more price advertising ...

Wanaka + Cromwell both will come under pressure as well ... IMHO. I think we will see 10-20% pull back in prices for good properties (freehold family homes in good locations) but see much larger falls in -Apartments/units/tiny family homes upwards to 50% etc

I have played Golf with many local RE agents over end 2019/20 and they have all seen a real slow-down in the sector ,,,, so COVID is hitting right when the market was getting weaker

I can assure you there is huge interest from around my neck of the woods in the central Otago market, from bargain hunters of course. If I wasn't in a 'can't be bothered any more' mood I'd probably join them.

[Bjauck]

I can assure you there is huge interest from around my neck of the woods in the central Otago market, from bargain hunters of course. If I wasn't in a 'can't be bothered any more' mood I'd probably join them.

Bottom feeders have to be sure when the bottom has been reached though.

[fungus pudding]

Bottom feeders have to be sure when the bottom has been reached though.

That's a derogatory term, and a derogatory comment. Are those who pull out of bidding at an auction once they don't think the price represents a bargain, bottom feeders. Are those who rush into retail stores when they promote a big sale bottom feeders? With property would you prefer banks step in to sell the property rather than let the market find the price? Markets are stimulated by reduced prices - and vendors only accept prices if they want to i.e. if they find any alternative worse. Bargain hunters are a necessary part of commerce and keep the world turning, so no need to saddle them with an insulting handle.

[ynot]

So true. Anyone buying an asset at any price is a bottom reader. Otherwise why buy.
The only true Winners are bottom feeders. The rest are mugs.

[JBmurc]

I can assure you there is huge interest from around my neck of the woods in the central Otago market, from bargain hunters of course. If I wasn't in a 'can't be bothered any more' mood I'd probably join them.

Well there is going be a huge amount of supply I see just here in Cromwell region another 30x property listings last few weeks ..pain will really come on during winter IMHO could see a spike of forced sales ... during GFC I seen a few properties selling at auction 50% less than asking only months before

[Balance]

So true. Anyone buying an asset at any price is a bottom reader. Otherwise why buy.
The only true Winners are bottom feeders. The rest are mugs.

Garbage.

Winners are those who pay fair values for quality properties in excellent locations.