Which way will the property market go now?

[ynot]

I think Auckland will roll on pretty well. If immigrations stops for an extended period the regions will suffer. Rents will drop but only nominally but values could really fall in rural areas where they have exploded unreasonably.

If you document house price inflation since we kept records, property has doubled on average every 7.8 years including through the 2 wars and the depression. NZ is not that expensive in real terms. It is hyped as expensive in relation to wages and that's true but our actual values aren't high compared to many similar markets. This is what makes real estate so low risk. Safe as houses!

I wouldn't be so sure on that one. A price drop will be driven by unemployment and we are looking at a 15% + unemployment increase.

"Former [New Zealand] Treasury Secretary Allan Bollard has pointed out
that this shock is huge by contrast to previous economic crises. The Treasury is estimating a 30‐40
percent reduction in output and 10‐17 percent downturn in the economy as a whole, and at a speed that is unprecedented"

[kiora]

Is Auckland like London?
"for those who have built up mini (or in some cases not-so-mini) property portfolios that rely on a constant stream of guests churning through Airbnb apartments in Bath, Barcelona or Berlin, the prospect of weeks or months without guests spells financial disaster."
https://www.theguardian.com/technolo...-its-own-homes

[SBQ]

I wouldn't be so sure on that one. A price drop will be driven by unemployment and we are looking at a 15% + unemployment increase.

"Former [New Zealand] Treasury Secretary Allan Bollard has pointed out
that this shock is huge by contrast to previous economic crises. The Treasury is estimating a 30‐40
percent reduction in output and 10‐17 percent downturn in the economy as a whole, and at a speed that is unprecedented"

Certainly... i'm not seeing the fear on people's faces YET. When the lockdown is over, they will wonder why their boss has not called them back to work. Then the fear will really set in... 15% unemployment is unheard of in generations.

[JBmurc]

I think Auckland will roll on pretty well. If immigrations stops for an extended period the regions will suffer. Rents will drop but only nominally but values could really fall in rural areas where they have exploded unreasonably.

If you document house price inflation since we kept records, property has doubled on average every 7.8 years including through the 2 wars and the depression. NZ is not that expensive in real terms. It is hyped as expensive in relation to wages and that's true but our actual values aren't high compared to many similar markets. This is what makes real estate so low risk. Safe as houses!

Not this time ...kiwis ticked up during these low rates was cheaper than renting ..but now with many losing jobs, less hours +lower incomes you can't just walk away and look for cheap location etc ..this will be brutal

[SBQ]

Not this time ...kiwis ticked up during these low rates was cheaper than renting ..but now with many losing jobs, less hours +lower incomes you can't just walk away and look for cheap location etc ..this will be brutal

As I said before, i'm still talking to those in my circle that are clueless of the impact this virus would have on the economy. Too may enjoying Xbox at home... not a lot of productivity going on but they treat it as a 'holiday'. Well what if at the end of the holiday their job is not there? No one plans ahead, all going on 'hope' while watching the Ms Ardern speech of the day.

I can't say immigration would be that hot from now on. How will tourism come back to NZ if AirNZ says even after 5 years they will never get back their 'international routes' like they were few months ago?

There was a short moment back in February where I though to take my money and buy more NZ real estate. The inconvenience of owning more was what put me off and instead, exchanged the vast majority of my cash into USD and set it to my US broker. (I discussed this in another post); the process was not straight forward but hindsight.. WELL worth it - this week I hope to invest the remainder of the cash.

[iceman]

As I said before, i'm still talking to those in my circle that are clueless of the impact this virus would have on the economy. Too may enjoying Xbox at home... not a lot of productivity going on but they treat it as a 'holiday'. Well what if at the end of the holiday their job is not there? No one plans ahead, all going on 'hope' while watching the Ms Ardern speech of the day.

I can't say immigration would be that hot from now on. How will tourism come back to NZ if AirNZ says even after 5 years they will never get back their 'international routes' like they were few months ago?

There was a short moment back in February where I though to take my money and buy more NZ real estate. The inconvenience of owning more was what put me off and instead, exchanged the vast majority of my cash into USD and set it to my US broker. (I discussed this in another post); the process was not straight forward but hindsight.. WELL worth it - this week I hope to invest the remainder of the cash.

Slightly off topic but yesterday I spoke to two people working in tourism overseas. One has a whale watching business in the North Atlantic. Last year they (him and others) took our 108,000 customers. They are forecasting 7,000 this year, most of them already done.
The other one is a pilot in a port in the sub-antarctic where cruise vessels dock for Antarctic trips. They have been getting 110-140 cruise ships between Oct-Apr in recent years. Next season they expect "less than 10".
Both of the above examples are venture/outdoor type tourists, like majority that visits NZ is. This is the scale we are talking about. A complete collapse for potentially a long time to come.

[nztx]

Slightly off topic but yesterday I spoke to two people working in tourism overseas. One has a whale watching business in the North Atlantic. Last year they (him and others) took our 108,000 customers. They are forecasting 7,000 this year, most of them already done.
The other one is a pilot in a port in the sub-antarctic where cruise vessels dock for Antarctic trips. They have been getting 110-140 cruise ships between Oct-Apr in recent years. Next season they expect "less than 10".
Both of the above examples are venture/outdoor type tourists, like majority that visits NZ is. This is the scale we are talking about. A complete collapse for potentially a long time to come.

Agree with Iceman

Aside from those direct affects on businesses, tourist dollars tend to go round many times in the local communities as well - contributing to other direct & indirect local businesses & services, also paying the taxman clipping the ticket each step of the way..

Potential losses go considerably wider than just patronage of Travel, Tourism & Hospitality businesses - exponentally

How many businesses in Kaikoura will be relatively unscathed with what we have currently - look further to the service/supply chains to the affected businesses and the ones supplying those further back along the supply chain.

[Southern_Belle]

Not this time ...kiwis ticked up during these low rates was cheaper than renting ..but now with many losing jobs, less hours +lower incomes you can't just walk away and look for cheap location etc ..this will be brutal

also we are a nation of small business owners, many of whom are already signalling they will never re-open, particularly cafes, bars etc ...... I wonder how many of these businesses mortgaged the family home to get into and operate these businesses ... domino effect???

[ynot]

I think Auckland will roll on pretty well. If immigrations stops for an extended period the regions will suffer. Rents will drop but only nominally but values could really fall in rural areas where they have exploded unreasonably.

If you document house price inflation since we kept records, property has doubled on average every 7.8 years including through the 2 wars and the depression. NZ is not that expensive in real terms. It is hyped as expensive in relation to wages and that's true but our actual values aren't high compared to many similar markets. This is what makes real estate so low risk. Safe as houses!

Come on Dean, tell me I'm wrong. Sing me that old property can never go down tune again.

[Joshuatree]

Ho w about commercial property? Alot of people working at home now will stay there after this crisis is over. Office space will have to diminish. Ive spoken to people who have already had directives from head office about this. Maybe a bonus is folks working from home will be able to get tax deductions for their home office.