Average House Price In Auckland Dives 7.50%

[67910241]

my wife totally agrees with your viewpoint

Apparently that has been a real problem in Queenstown for some years now. That's one of the drivers behind the lower cost housing estates planned for the Frankton area of Queenstown, out by the airport.

In NZ there are basically two housing markets:
- places where people live and work. These areas are price-wise more stable, as when there is an economic downturn most owner/occupiers just sit tight and wait. Most people do not have to sell, they might like to or hope to, but in the final analysis a price drop does not really affect them as they can just sit it out and wait years if necessary for the market to recover.
- resort/holiday home areas, where a sizeable percentage of the property owners are absent. These are second homes, and when times turn nasty these properties are usually the first of the family assets that are put on the market. Therefore these areas show much greater price volatility, soaring when the economy is booming and slumping when there is a downturn and almost everyone want to retrench. This, of course, makes things tougher for the small number of people who work in or retire to these areas.

I flew in to Pauanui on Waitangi day. A lot of houses seem to be on the market there, and the prices generally seem to be lower than my last visit. I wonder where that puts us in the economic cycle?

she thinks of it as two separate markets, too. And she believes that if the prices in Auck, Welly or Church go down by 10%, those in the holiday areas where "second", less than essential houses are located will go down a whole lot more, say by 25%, because every second house will be for sale there. Basically, the level of 10% down in main centres must have been caused by some economic hardship so the numerious holiday house owners feeling the pressure to sell somthing (due to unbearable total mortgage burden or loss of job or a combo) is much more likely to want to get rid of the unnecessary 500k Coromandel bach than the (not much more expensive) family home in Auckland. I am not 100% sure, although it does sound like common sense.

[Davo36]

she thinks of it as two separate markets, too. And she believes that if the prices in Auck, Welly or Church go down by 10%, those in the holiday areas where "second", less than essential houses are located will go down a whole lot more, say by 25%, because every second house will be for sale there. Basically, the level of 10% down in main centres must have been caused by some economic hardship so the numerious holiday house owners feeling the pressure to sell somthing (due to unbearable total mortgage burden or loss of job or a combo) is much more likely to want to get rid of the unnecessary 500k Coromandel bach than the (not much more expensive) family home in Auckland. I am not 100% sure, although it does sound like common sense.

Yeah that's exactly how I see it. People borrow up to the eyeballs, everything is hunky dory for a while but if a job is lost or ill health or anything else (banks get nervous and deman more money?) then it can all turn to custard.

And the very first thing to be sold is the bach. It's a total luxury and won't be used much if everyone's working all the hours they can to bring in cash to pay the mortgage(s). And so the price of these things drop.

Along with this you see a glut of porsches, boats and other luxury items being flicked off too. Should be a good time to buy these sorts of things shortly. They only ever go down in value.

David

[kiwi2]

Question for kieran

Hi Kieran,
I see you started this thread so hope you may check back here.
I have purchased your book "Grow Rich with the property Cycle"
it has stats up to 2003 shown very clearly on page 173 of
Property cycle peaks and troughs" . Can you please tell me where
I can view a similar graph with stats up to say 2007?
Thanks,
Grant.
PS Liked the book good read.

[kieran]

Thanks Grant,

Latest graphs were updated January 2008.

They are updated quarterly, using the latest data available, at http://www.hybridgroup.co.nz/MarketI...etInfluencers/

[OllyN]

Warning!

As Kieran is now openly associated with RM, all information he provides must now be treated as biased and thus viewed with extreme caution.

[Commercial Dan]

Agree, it will be used to sell apartments that are worthless.

[kieran]

... Or a bank might use it to sell mortgages or like happened TODAY real estate agents might thank me because they can use my information to condition vendors to consider realistic offers etc,etc,etc.

Its not my domain to control how others use my information, its my responsibilty to provide excellent research.

No my message is never biased nor tainted by any 'hidden agendas' nor anyones commercial pressure, never. That doesnt fit my value set.

Do you think my message today about the looming crash was really good for me or RM? Ahhh probably not so good. Sure maybe more people want my info but the biggest impact today is the effect on my own property portfolio. It impacts on my own wealth (in the form of property values falling...). So far my property values have probably fallen by 5% already anyway and are expected to fall more.

Im not attempting to control the cycle but just to report on it.

Just ask the property finders who have worked in my businesses over the years and they can tell you. There were times when they werent too happy about my message (thats an understatement!) when the market stalled several times during the boom and common belief was that the boom had ended or that a crash might be coming but that never resulted in any manipulation of the message.

My message is based on research and thats the way it will remain, no matter who chooses to use it for their own commercial advantage.

My property cycle commentary as a "white paper" is being taken up by others and in terms of the agreement, they have to distribute that commentary, its content cannot be altered by them.

Of course they may have their own opinions or commercial angle about my commentary but they are entitled to.

[kiwi2]

Hi Kieran,
Grant here again.
I tried the link you gave me to see the updated graph of
Property Cycle Peaks and Troughs from 2003 to 2008
but couldn't find it anywhere.
Do I have to pay to become a subscriber to your web site as well as buying the book?
Really not sure that is a fair go.
Can you clear this up for me please.
Thanks,
Grant.

[Badger]

... Or a bank might use it to sell mortgages or like happened TODAY real estate agents might thank me because they can use my information to condition vendors to consider realistic offers etc,etc,etc.

Its not my domain to control how others use my information, its my responsibilty to provide excellent research.

No my message is never biased nor tainted by any 'hidden agendas' nor anyones commercial pressure, never. That doesnt fit my value set.

Do you think my message today about the looming crash was really good for me or RM? Ahhh probably not so good. Sure maybe more people want my info but the biggest impact today is the effect on my own property portfolio. It impacts on my own wealth (in the form of property values falling...). So far my property values have probably fallen by 5% already anyway and are expected to fall more.

Im not attempting to control the cycle but just to report on it.

Just ask the property finders who have worked in my businesses over the years and they can tell you. There were times when they werent too happy about my message (thats an understatement!) when the market stalled several times during the boom and common belief was that the boom had ended or that a crash might be coming but that never resulted in any manipulation of the message.

My message is based on research and thats the way it will remain, no matter who chooses to use it for their own commercial advantage.

My property cycle commentary as a "white paper" is being taken up by others and in terms of the agreement, they have to distribute that commentary, its content cannot be altered by them.

Of course they may have their own opinions or commercial angle about my commentary but they are entitled to.

If I was you its probably a good idea for you to extend your research a bit further afield than just the property market in NZ. Other events are on the horizon which will be changing a great many things that today are taken for granted - or as entitlements.