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  1. #1541
    Senior Member upside_umop's Avatar
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    I think you'll find that according to QV, which as we know is the most valid approach, property prices fell 10% for the 3 month average to february year on year. We can also see from the RBNZ graph that property prices are in their deepest correction on the graph (surpassing 1991, 1998 and 2000 dips). The graph looks to be well on its way to -10% (only till 2008). As you can notice, RBNZ uses QV figures.



    RBNZ say another 10%, then add on inflation (5% last year) and thats already 25%. Then lets see the inflation over the next 3 years and whether housing keeps up - doubt it. There will be another 5%. 30% is easy to see...
    By the way - it's upside_down, not upside_umop

  2. #1542
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    Quote Originally Posted by upside_umop View Post
    I think you'll find that according to QV, which as we know is the most valid approach,
    QV is one approach – but I’m not sure it is the most valid – and in this graph it isn’t because new data is being introduced. We have gone from Shrewdys “Median” house price to QV’s “Average” house price and now this new “Value of Housing Stock”. Remembering also that QV changed their methodology of valuing housing stock in 2004 and they are into value/price rations. I think they gather the data from council rating valuations and I know my place is undervalued by at least $300k on value /price so how valid this data is I don’t know. All interesting statistics at a macro level – but distract from the original post which is about buying your own median valued home.

    Had I wanted to bring in new data I might want to suggest that back when Shrewdy first posted the average sale price from our data source was $392,724. In Feb 09 it is now $468,653. That’s a 19% INCREASE in value. But going on about how the market has improved isn’t necessarily helpful because we are using different data sets and any old data can be used to prove pretty much any old position.

  3. #1543
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    Quote Originally Posted by minimoke View Post
    QV is one approach – but I’m not sure it is the most valid –

    QV is not intended to be a market valuation. Its main use is setting rates, and while market information is taken into account, it's dangerous to accept it as market. The land prices are often near the mark but improvement values are all over the place. In addition they are generally desktop valuations, and maybe a drive past, but very seldom do they inspect properties.

  4. #1544
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    Quote Originally Posted by funguspudding View Post
    QV is not intended to be a market valuation. Its main use is setting rates, ......
    Exactly – reading the data ends up being a bit like reading the tea leaves at times and while REINZ data has its faults its still a pretty useful set. Take for example the February data – we can’t read much into one month in terms of a trend. But it does appear that a lot of properties that have been on the market a long time have sold. That these properties didn’t sell in earlier months will have skewed those months figures a bit. February is typically a buoyant month – but this February y was extremely buoyant compared with many previous Februarys. And people are spending money.

    The median is up; total no. of sales is highest in 12 months; total $ sales is highest in 12 months, average price is highest since forever. I could speculate that the days on market suggests buyers are vacuuming up the bargains that have been hanging around for too long and the big ticket properties are moving again– which may suggest the bottom has been reached.

  5. #1545
    Senior Member upside_umop's Avatar
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    Quote Originally Posted by minimoke View Post
    QV is one approach – but I’m not sure it is the most valid – and in this graph it isn’t because new data is being introduced. We have gone from Shrewdys “Median” house price to QV’s “Average” house price and now this new “Value of Housing Stock”. Remembering also that QV changed their methodology of valuing housing stock in 2004 and they are into value/price rations. I think they gather the data from council rating valuations and I know my place is undervalued by at least $300k on value /price so how valid this data is I don’t know. All interesting statistics at a macro level – but distract from the original post which is about buying your own median valued home.

    Had I wanted to bring in new data I might want to suggest that back when Shrewdy first posted the average sale price from our data source was $392,724. In Feb 09 it is now $468,653. That’s a 19% INCREASE in value. But going on about how the market has improved isn’t necessarily helpful because we are using different data sets and any old data can be used to prove pretty much any old position.
    Just because they changed their methodology, doesnt mean their statistics are out. All they have done, is reused their original data in a way that better reflects the housing market. So the graph you see above, actually contains means for the whole period, not a 'switch over' making it unaccurate. I do notice however, that the data prior to 2004 was using quarterly figures, thus why they give 3 month averages when reporting to the market about their statistics.

    I'm sorry, but you cant say that housing has gone up in value...gee you try to argue at anything even though your blatently wrong! Give it up! Financially we are much better off...you heard it from the man himself, 25% in real terms.
    Last edited by upside_umop; 13-03-2009 at 01:23 PM.
    By the way - it's upside_down, not upside_umop

  6. #1546
    Senior Member upside_umop's Avatar
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    Quote Originally Posted by minimoke View Post
    Exactly – reading the data ends up being a bit like reading the tea leaves at times and while REINZ data has its faults its still a pretty useful set. Take for example the February data – we can’t read much into one month in terms of a trend. But it does appear that a lot of properties that have been on the market a long time have sold. That these properties didn’t sell in earlier months will have skewed those months figures a bit. February is typically a buoyant month – but this February y was extremely buoyant compared with many previous Februarys. And people are spending money.

    The median is up; total no. of sales is highest in 12 months; total $ sales is highest in 12 months, average price is highest since forever. I could speculate that the days on market suggests buyers are vacuuming up the bargains that have been hanging around for too long and the big ticket properties are moving again– which may suggest the bottom has been reached.
    Doesnt RBNZ go off sales which arent settled? Ie what the real estate agent sends in?

    February was best 'written' sales on record for some offices, doesnt actually mean the sales went through. Bank financing etc.
    By the way - it's upside_down, not upside_umop

  7. #1547
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    Quote Originally Posted by upside_umop View Post
    I'm sorry, but you cant say that housing has gone up in value...gee you try to argue at anything even though your blatently wrong! Give it up! Financially we are much better off.
    Of course I can – but it depends on your starting point. If you reckon people have “lost” since the peak in 08 I’m inclined to agree. Lets not forget that at the “peak” there was 7,800 property sales, in Jan 09 there were only 3,700 so QV data is at risk of being skewed. It doesn’t matter too much though because if you overlay the QV data with REINZ data (be it average / means or whatever) the trends are pretty much the same. But this thread started in Jan 07 before the market peaked and there is little evidence to suggest a buyer then is worse off now.

    As for people being financially much better off I’m not sure how you could come to that conclusion unless they are in property, but excluding the twits that bought at the peak thinking property values increase in a linear fashion. Equity values are down, deposits rates are down, finance companies with individual’s loot have gone bust, and redundancies are up. Sure inflation is down a bit and tax cuts have given a bit back to peoples wallets. But who have made the biggest cash gains – it will be mortgage holders who have seen huge drops in their repayments – they will be significantly better off financially.

  8. #1548
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    Quote Originally Posted by upside_umop View Post
    Doesnt RBNZ go off sales which arent settled? Ie what the real estate agent sends in?

    February was best 'written' sales on record for some offices, doesnt actually mean the sales went through. Bank financing etc.
    Well that’s another can of worms.

    Yes REINZ use sale contracts – not settled sales. But the thing about value is that it is what a willing buyer and a willing seller can agree on. In most cases this is after the buyer has had a chance to walk through the property, compare it physically with others and perhaps even get a valuer in to check it out. So the contract is probably a much better measure of property value. Its implied in the contract that terms can be met – but whether or not we should try to extract meaning of failure to complete a contract to property value is difficult to say.

    If you want a value of property sales you have to refer to the actual contracts that are settled. I don’t think QV does this for some of their data. Indeed on their website they reckon a good way of valuing a property is to look at the Rating Valuation data. Well, that’s the biggest piece of bull**** I’ve read in a long time. Or they will look at local sales – not the value of an actual property but the value of sales of nearby properties. I bet you could just about count on one hand the number of properties a QV valuer walks through when it come to creating their national statistyics.

    With the REINZ data they have used the same methodology for years – so when their values indicated increase this would be on the back of agreed contracts not sales – so at least they are being consistent.

    As much as I would welcome an opportunity to bag real estate agents I’m not going to suggest there is some conspiracy amongst them that they are drawing up fictitious or dodgy contracts just to give the impression that there are a lot of sales. That not to say I wouldn’t put it past them – I wouldn’t be surprised if they did such fiddles when they were working out their “Gold Medal Real Estate Agent of the Month” awards.

  9. #1549
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    As long as the tenants are happy and paying the rent , does it really matter ?.

    "Buy and hold" property is talking about decades ... not months. This global crisis has been great for me and my 8 rentals ... interest bill for the next 12 months will be around $30,000 less than the last 12 months. Like getting another job , tax free ... great !!

  10. #1550
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    Quote Originally Posted by upside_umop View Post
    Doesnt RBNZ go off sales which arent settled? Ie what the real estate agent sends in?

    February was best 'written' sales on record for some offices, doesnt actually mean the sales went through. Bank financing etc.
    No. Agents file only their completed contracts. That is those that have become unconditional within the reporting period. Often settlement comes after the end date of report, and the very odd unconditional contract might not settle for various reasons, but that's rare, and hardly enough to screw the figures. REINZ statistics are the best available if you can get your hands on them. And by statistics, I mean just that, their sales figures for the district you are interested in; not the burble interpretation of them from some waffler from the institute.

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