Good news Stories

**minimoke** · 11-05-2009, 08:48 AM

Our from QV today.
The decline in property values has improved for the first time since September 2007, suggesting the housing market freefall could soon be over.
Quotable Value monthly statistics showed national property values decreased 9.2 per cent in the year ending April 30 a slight improvement on the 9.3 per cent reported in March.
QV spokesman Blue Hancock said the April figure was because of a stabilisation in prices paid during the past few months.
Property values in the main centres had flattened, with figures for Wellington, Auckland, Hamilton, Christchurch and Dunedin all improving.

**The Great Gold Guru** · 11-05-2009, 11:52 AM

Listings on TradeMe keep falling ... 91,201 this morning , down about 600 from a week ago.

Nice rate cuts from ANZ National last week ... 1Yr fixed at 5.50% looks the go !!

**minimoke** · 11-05-2009, 12:30 PM

Originally Posted by The Great Gold Guru

Listings on TradeMe keep falling ... 91,201 this morning , down about 600 from a week ago.

Nice rate cuts from ANZ National last week ... 1Yr fixed at 5.50% looks the go !!

In the past 17 years EVERY April has recorded less sales than the month before. There is about a 15% average drop in April compared with teh previous March.

Seven out of these 17 years has seen a drop off in price from the previous month. It seems we have a very well established trend that sales at this time of year fall away - and we know this is often due to the winter settling of the market where people tend to stay indoors rather than go shopping.

We should expect to see the REINZ report sales down for April 09 to be down as well. If the doom gllom merchants are to be believed I reckon number of sales for April have to be down by at least 20% and price has to be down as well. If number of sales are down less than 15% and if values increase then I think that wil be a very clear pointer that some people have missed the boat - but lets see what comes out in the next few days.

**upside_umop** · 11-05-2009, 02:50 PM

Originally Posted by minimoke

Our from QV today.
The decline in property values has improved for the first time since September 2007, suggesting the housing market freefall could soon be over.
Quotable Value monthly statistics showed national property values decreased 9.2 per cent in the year ending April 30 a slight improvement on the 9.3 per cent reported in March.
QV spokesman Blue Hancock said the April figure was because of a stabilisation in prices paid during the past few months.
Property values in the main centres had flattened, with figures for Wellington, Auckland, Hamilton, Christchurch and Dunedin all improving.

Minimoke, I would have thought you wouldn't post this. Missing the boat? Nahh..lets take a closer look at those two figures stated.

9.3% over the year is 0.78 so circa ~0.80% per month, right?

So, for housing to have stabilized, this 9.3% per year would have to go to 9.3%-0.80%=8.5% to show any stabilization in prices.

Anything above 8.5% would indicate further month on month declines, and anything less would indicate month on month gains. Surely you can establish what has happened in this case!

9.2%>8.5% --> Housing market still not in good shape.

Try telling an average first home buyer who bought 16 months ago, that your sorry for advising them to buy, because they just lost another ~$2500 (0.80%*330,000) on their house this month, as well as around $40k in preceding months!

Not a good news story I'm afraid.

I will admit there are some good signs, however, most notably lack of supply side.

End of story is, house prices are still declining.

**fungus pudding** · 11-05-2009, 03:13 PM

Originally Posted by upside_umop

Minimoke, I would have thought you wouldn't post this. Missing the boat? Nahh..lets take a closer look at those two figures stated.

9.3% over the year is 0.78 so circa ~0.80% per month, right?

So, for housing to have stabilized, this 9.3% per year would have to go to 9.3%-0.80%=8.5% to show any stabilization in prices.

Anything above 8.5% would indicate further month on month declines, and anything less would indicate month on month gains. Surely you can establish what has happened in this case!

9.2%>8.5% --> Housing market still not in good shape.

Try telling an average first home buyer who bought 16 months ago, that your sorry for advising them to buy, because they just lost another ~$2500 (0.80%*330,000) on their house this month, as well as around $40k in preceding months!

Not a good news story I'm afraid.

I will admit there are some good signs, however, most notably lack of supply side.

End of story is, house prices are still declining.

They'll bob up and down a bit with the large interest rate reductions. But there is a day of reckoning with these low rates and I can't see Bollard holding them down as long as he indicated. If house prices show a real sign of recovery - he'll pull the pin. Apart from that even though mtge. costs are low, the buyer is still left with a debt that is right out of whack with average incomes. Always better to buy when interest rates are high. I'd rather pay 20% interest on a $200k loan, than 10% on a $400k loan. Remember it's affordability that determines the price - and when one goes down the other goes up. Medium to long term - housing should be seen as a roof over your head, but definitely not as an investment.

**minimoke** · 11-05-2009, 03:18 PM

Originally Posted by upside_umop

Not a good news story I'm afraid.

We’ve got Hickey and Morgan saying properties will drop by 30 – 40%. Surely its good news that QV reckon the decline in values has pretty much ceased. We’re in Christchurch – isn’t it good news that figures are improving! And Wellington and Auckland (the nations biggest city is also improving – that’s got to be good news. First home owners and investors are coming back to the market – nothing gloomy about that. We know values went up in January, February and March (that’s good news) so It will be interesting to see if April sees increases – we’ll know in a few days so those that bought earlier this year will be smiling. 16 months ago there were around 7,800 buyers., This year there has been around 20,000 happy buyers – that’s good news.

**upside_umop** · 11-05-2009, 03:46 PM

Originally Posted by minimoke

We’ve got Hickey and Morgan saying properties will drop by 30 – 40%. Surely its good news that QV reckon the decline in values has pretty much ceased. We’re in Christchurch – isn’t it good news that figures are improving! And Wellington and Auckland (the nations biggest city is also improving – that’s got to be good news. First home owners and investors are coming back to the market – nothing gloomy about that. We know values went up in January, February and March (that’s good news) so It will be interesting to see if April sees increases – we’ll know in a few days so those that bought earlier this year will be smiling. 16 months ago there were around 7,800 buyers., This year there has been around 20,000 happy buyers – that’s good news.

25% in real terms is my expectation. 30% isnt far off from that. We already have what? Must be greater than 15% in real terms now huh?

Declines ceased? I just showed you proof they havent!

It depends by what you mean improving? My house dropped in value last month, but by not as much as the month before. Is this good news? No, it restricts peoples ability to borrow more, as the underlying (house) isnt as much security as now.

Homeowners and investors are coming back to the market. Unfortunately, theres not enough cash in NZ savings to fund all this. The next marginal % of interest rates are coming from overseas. Imagine if we get a credit down grade. National is in between a rock and a hard place, dont want to cut services (reduce govt spending), but if they dont, then add another 100-150 basis points onto our cost of borrowing (quoting ireland here).

I dont know that they did go up in Jan, Feb, March. According to REINZ they did?...but i look at QV, so does the RBNZ, so do most economists. I'll have to check it out. According to QV they still declined in April, as shown in my last post.

Happy buyers is a bit of generalization. I bet there will be some regretting it!

There is still a lot of risks to the domestic economy, but also upside. Time will tell. I'm sitting tight (because I have to) but even if I had a job, I wouldnt be buying at this minute.

**minimoke** · 11-05-2009, 03:54 PM

Originally Posted by upside_umop

Declines ceased? I just showed you proof they havent!

Since this is the Good News thread I'd prefer not to get into a debate which introduces doom and gloom (though more than happy to debate on other threads) so lets just take a more positive view direct from QV" "Recent stabilisation of property values in many areas suggests that we may be near the bottom of the market."