Feb 2022 Have house prices started falling? How far will they go?

[McDuck]

Have house prices started falling?

How far will they fall?

Will auctions become a thing of the past?

What immediate effect will this have on property investors?

What knock on effects will this have on serviceability and expansion?

What are the best strategies to make good use of lower house prices?

Thoughts?

[Engineer]

Auckland, I love this kind of market, lots of uncertainty, starting to get interesting.
High end of town seems to be holding up. Ripple effect still in play, prices might continue to rise ??
Developers starting to have second thoughts on projects, or wondering if they might be in trouble. Rising costs.
Interest rates going up putting the squeeze on budgets
This is new - CCCFA ridiculous government policy.
Removal of interest deductibility starting to kick in, hammering investors cashflow. Another dumb policy.
Rents seem to be going up in my experience by about 10 percent p.a. Official stats seem lower.
First home buyers traditionally pull back if they think prices will fall.
Another couple of years and thinking that there will be great buying opportunities.

[donna]

My thoughts…lack of supply of rentals will become a key challenge with borders opening. NZ is sure to look attractive to many in Europe esp. expats but where are they going to live? Plus NZ is not what it once was so disillusionment will set in and Aussie will be the real winner.

NZ may struggle to prove its open for business and competitive to keep locals, expats and offshore arrivals.

Huge change will be needed and results will take longer than 3 years so we could see saw between the two main parties getting nowhere fast.

[McDuck]

With every passing month the data seems to support falling house prices.

It will be interesting to talk to the "houses prices never fall" brigade in a few months.

But they will have magically disappeared in numbers having a direct proportion to the the size (if any) of the falls.

Winners will be people who sold at the peak, or to a developer, as they will now get a little more bang for their buck.

Thoughts?

[Chris W]

It will be interesting to talk to the "houses prices never fall" brigade in a few months.

But they will have magically disappeared in numbers having a direct proportion to the the size (if any) of the falls.

Thoughts?

Price action drives the narrative.

Already seeing it with one high profile property market commentator.

Same set of facts - inward immigration, and border opening but different house price prediction.

Previously it was used to rationalise continuing upward rising prices, now it is dismissed as irrelevant ...

[Monsterbishi]

With every passing month the data seems to support falling house prices.
It will be interesting to talk to the "houses prices never fall" brigade in a few months.
But they will have magically disappeared in numbers having a direct proportion to the the size (if any) of the falls.
Winners will be people who sold at the peak, or to a developer, as they will now get a little more bang for their buck.
Thoughts?

Prices are definitely dropping, but are the prices falling overall, or are certain types of property just falling down the ladder?

ie I've got a 80's vintage two story, two bedroom ex-state house in Sydenham, Christchurch that I bought in mid 2018 for $288k, has two off street carparks and a garage, plus about 100m2 of lawn/gardens.

conversely, over our back fence a developer is building six townhouses, two bedroom, one off street carpark, no garage, no garden for $650k each.

In one year, which will be worth more? - the new house

five years? - if the new houses are lucky, maybe dead even at this stage

ten years? - ex-state house takes the win.

[Chris W]

1) Anyone seeing an increase in supply of residential properties? in which geographical location?

2) Anyone seeing a decrease in demand for residential properties? in which geographical location?

[McDuck]

1) Anyone seeing an increase in supply of residential properties? in which geographical location?

2) Anyone seeing a decrease in demand for residential properties? in which geographical location?

Yes, Chris.
Everywhere I go in Auckland I see lots of new high density housing.
(So one house is removed and 6 "dwellings" built).
Same in Tauranga and up north too.
(Probably similar stories in every corner of our land).
But that's started to taper off a bit, and now its people moving their house forward and building two decent sized homes on the one bit of land.
Plus there's the boomers moving to the small towns, which have large new areas being developed.

Just go and have a look at the land next to the Hobsonville airbase if you want to be shocked.

Governor Hobson himself might be a bit sad to see paradise found, and then lost again.

Annoyingly, the dull minded bureaucrats behind all this are unaware of the tragic consequences of their actions.


Vogon by Douglas Adams.

[McDuck]

More numbers in.

Looks like we have a slight downturn in prices.

Which is a great thing for everyone .

Councils will have less excuse to hike rates,

people buying and selling houses will have less risk.

Those meager wages will pay off that lower priced house more quickly.

Young people will be more likely to save and work hard, without the feeling that the "stable place to grow a family" train is leaving the station without them.

Go NZ. Go a bright future.

[DaveW]

My thoughts.
Any drop in prices will be temporary, a blip in the continued doubling effect every 10 to 15 years.

[Frezzinghot]

With every passing month the data seems to support falling house prices.

It will be interesting to talk to the "houses prices never fall" brigade in a few months.

But they will have magically disappeared in numbers having a direct proportion to the the size (if any) of the falls.

Winners will be people who sold at the peak, or to a developer, as they will now get a little more bang for their buck.

Thoughts?

At the top end of town nothing changes, prices will still rise, (Double grammar zone, central auckland, leafy suburbs) its the poor areas who get hit the worst.

[chook]

With every passing month the data seems to support falling house prices.

It will be interesting to talk to the "houses prices never fall" brigade in a few months.

But they will have magically disappeared in numbers having a direct proportion to the the size (if any) of the falls.

Winners will be people who sold at the peak, or to a developer, as they will now get a little more bang for their buck.

Thoughts?

Its only just begun, for some that are upto their eyeballs in debt (lots) it will be impending carnage

[McDuck]

At the top end of town nothing changes, prices will still rise, (Double grammar zone, central auckland, leafy suburbs) its the poor areas who get hit the worst.

It's interesting what you say about the top end of town.
I agree, the very wealthy are mostly unaffected by economic turbulence. Having the spare resources to weather out any short term ( 5 years) dips.
Casting ones net back through centuries of historic events, it's important to note that some wealthy punters have been caught out, while over extended, and gone under, for a while at least.

[McDuck]

Its only just begun, for some that are up to their eyeballs in debt (lots) it will be impending carnage

I've got a couple of young relatives who dropped a wad of cash on housing recently.
But these dual income professional people (DUPPIES) (as we used to call them in the old days),
have such a good income stream, that much higher interest rates won't even make them break their stride.

Meandering .. remember YUPPIES, from the 80's ? Young Urban profession people?
Similar to these get rich quick Millennials the pepper the internet now.

What was the joke...
What's the difference between a yuppie and a pigeon?
A pigeon can still put a deposit on a new BMW.

[donna]

^^ ha ha.

Homes.co.nz has the line graph that is indicative of price moments. It will be interesting to see how it goes over the next 12 months.

We have the transmission gully opening late this month so that's going to be good for our area - Kapiti. Lots of Wellingtonians coming up on day trips and moving here too. I can not see house prices going down too much here. Plus with the CCCFA review - sales volumes will improve.

cheers,


Donna