Auckland House Prices

[Davo36]

Thanks for the extra information. I will recant somewhat on saying the Walmart store closure is the big domino fall. Part of the problem is the news item i read did not report that, nor the fact that the very vast majority of the stores closing were just the size of a $1/$2 shop dairy .

Newspapers are about sensationalism, I suggest you read all articles with an air of suspicion or skepticism, not just take them at face value.

[mrsaneperson]

Newspapers are about sensationalism, I suggest you read all articles with an air of suspicion or skepticism, not just take them at face value.

Thats not how it used to be so much, more a sign of the times we live in now where propaganda is rampant

[Bluecoat]

Vancouver Housing Market Implodes: Average Home Price Plunges 20% In 1 Month - "The Market Is Devastated"

http://www.zerohedge.com/news/2016-08-18/vancouver-housing-market-implodes-average-home-price-plunges-20-1-month-market-devas

[eri]

^

only 1 month's data after a new tax but

from that

If the bubble has indeed burst, things are about to get very ugly.

Eilers says that in the 1980 housing crash, prices dropped by 40 to 60% within a year

and took six years to recover

....

we blindly followed canada into the leaky homes saga

let's hope our bureaucrats have been learned how to protect US from that

not just themselves

[flyernzl]

A percentage is not necessarily related to dollars.

If 50K increases to 100K then that's a 100% increase.
Then if that 100K increases to 150K that's only a 50% increase.
But the increase - in dollars - is exactly the same each time.

So if you Auckland house goes from 1 mil to 1.3 mil, that only a 30% increase, but if your Hamilton house goes from 400K to 600K that a 50% increase and you think that's better than Auckland but the actual dollars are less.

[Kbkiwi]

A percentage is not necessarily related to dollars.

If 50K increases to 100K then that's a 100% increase.
Then if that 100K increases to 150K that's only a 50% increase.
But the increase - in dollars - is exactly the same each time.

So if you Auckland house goes from 1 mil to 1.3 mil, that only a 30% increase, but if your Hamilton house goes from 400K to 600K that a 50% increase and you think that's better than Auckland but the actual dollars are less.

I don't understand what your point is. If you can buy the $1 million Auckland property, then you can also buy $1 million in Hamilton property - in which case you would have a $500k gain in Hamilton vs only a $300k gain in Auckland (using your hypothetical % gain figures) - which is actually the opposite of your conclusion above about what is the "better" result in actual dollars.

[flyernzl]

My point is that when people say that the rate of price increases is dropping in Auckland, that does not necessarily mean that the dollar value of the price increases is dropping.

[Kbkiwi]

My point is that when people say that the rate of price increases is dropping in Auckland, that does not necessarily mean that the dollar value of the price increases is dropping.

You aren't making any sense. There's a reason why it's given as a %. A million dollars invested in Auckland is the same as $1 million dollars invested anywhere else, so it's nonsense to try and convert it to a specific dollar figure.

[Davo36]

Vancouver Housing Market Implodes: Average Home Price Plunges 20% In 1 Month - "The Market Is Devastated"

http://www.zerohedge.com/news/2016-0...h-market-devas

Well it will be interesting if it does actually implode. Reading the article, it looks like it's just kinda paused for a while. Not imploded like the headline says. All headlines are 50% BS these days aren't they?

But if it does, will be interesting because we've followed Vancouver in terms of planning for years now. The planners in Auckland constantly refer to it. It's their dream of how Auckland should be.

But also, if the Chinese exit Vancouver in a big rush, they might do the same here.

[sidinz]

You aren't making any sense. There's a reason why it's given as a %. A million dollars invested in Auckland is the same as $1 million dollars invested anywhere else, so it's nonsense to try and convert it to a specific dollar figure.

He's making perfect sense. The bigger the prices get, the steeper the price rises need to be to maintain the same growth percentage.
So 4% growth in April last year may actually be a smaller equity gain than a 3% gain this April.

[Wayne]

He's making perfect sense. The bigger the prices get, the steeper the price rises need to be to maintain the same growth percentage.
So 4% growth in April last year may actually be a smaller equity gain than a 3% gain this April.

It's just playing with numbers for the sake of it.

I worked out a long time ago that if I had $300k in property and it went up 10% I'd make $30k but if I had $3mil in property the same 10% would get me $300k - so?

[sidinz]

It's just playing with numbers for the sake of it.

I worked out a long time ago that if I had $300k in property and it went up 10% I'd make $30k but if I had $3mil in property the same 10% would get me $300k - so?

That's not what he's saying. Say last year your house was worth $800k and prices rose 10%. You've gained $80K in equity. To gain another $80k this year, prices only have to rise 9%. Same gain, smaller percentage.

[Wayne]

That's not what he's saying. Say last year your house was worth $800k and prices rose 10%. You've gained $80K in equity. To gain another $80k this year, prices only have to rise 9%. Same gain, smaller percentage.

Correct - so?

[mortgage broker]

The fact is that if you a buy a house in NZ, anywhere apart from Auckland, you will be buying not far from a 2008 price. That is pretty good value and surely appreciation is more likely. A depreciation would not take it much lower than the base price of 2008 so fairly safe I would have thought.

Looking around NZ a lot of prices of properties outside Auckland are still based on the yield(cashflow) it can attract. And with global sentiment turning towards chasing yields, a 30% increase in values in Hamilton and Tauranga seemed appropriate for the last 12 months.

[JBM]

The fact is that if you a buy a house in NZ, anywhere apart from Auckland, you will be buying not far from a 2008 price. That is pretty good value and surely appreciation is more likely. A depreciation would not take it much lower than the base price of 2008 so fairly safe I would have thought.

Looking around NZ a lot of prices of properties outside Auckland are still based on the yield(cashflow) it can attract. And with global sentiment turning towards chasing yields, a 30% increase in values in Hamilton and Tauranga seemed appropriate for the last 12 months.

Outside rural backwater townships ...and the likes of Invercargill-Dunedin etc I would be very surprised I you could buy many places around NZ near 08 prices

Certainly can't here in Central Otago / southern lakes etc