.....what's the news?
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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/n...ectid=11727694
REINZ data out this morning
http://www.interest.co.nz/property/8...ountry-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.
This guy is my hero http://www.nzherald.co.nz/property/n...lery_id=168322
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/busine...-up-13-percent
Auckland house listings up 13 percent
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-f...ectid=11767878
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?
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.
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.
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.
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.
Another warning of the property price bubble that has been allowed to form: http://www.nzherald.co.nz/nz/news/ar...ectid=11837842
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
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/on...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...tralia/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!
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/n...ectid=11851578
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.)
https://www.nbr.co.nz/article/labour...aring-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...
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.
Not Auckland, but London. The Guardian's Long Read is well worth a long read.
https://www.theguardian.com/society/...rdable-housing
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.
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.
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/ar...ectid=11877760
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:
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.
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"
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.
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-pol...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.
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/k...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/indu...-holidaymakers. I don't really know but I suspect that low interest rates and QE internationally are playing some part.
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/2017-0...entral-bankers
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?
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?
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.
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.Quote:
any other factors?
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.
1 Monaco $60,000 a sq metre
19 NZ Auckland $7000 a sq metre
World's most expensive cities | Global Property Guide
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!
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/g...ng-in-pictures
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.
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.
I am not sure about that. See above.Quote:
So my initial statement was that Auckland house prices were in bubble territory but it kinda looks like a deflating bust now....
Opinion piece in the NZHQuote:
...
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.
http://www.nzherald.co.nz/business/n...ectid=11880933
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!
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.
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 .....
Thought I'd ask the people who would know, https://www.stuff.co.nz/business/952...n-new-listings
What does this actually mean?
Will the remaining sellers start to decrease the asking price now?
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.
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.
Hamilton doesn't lag behind much at all we respond to aucklands market extremely quickly as Auckland is very active in our market here.
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.
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.
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
So this just in.
https://www.newsroom.co.nz/2017/08/1...r-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.
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..
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
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.Quote:
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 .......
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/housin...ades-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.
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...
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.
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...
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.
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.
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....
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)
The housing crisis (if there is actually one) won't be fixed until we treat houses as homes and not as stores of wealth
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.
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.
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/Lis...?id=1523153760
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
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
Great work peat ... property alway been a great way to accumulate wealth
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%.
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/112...ion-of-a-house