How international market forces affect NZ property

[Frezzinghot]

Was the appraisal to sell or rent?

Some analysts are suggesting house prices may fall from current levels in selected geographic markets due to high stock levels and cautious buyers. Longer term the trend is up.

Recent data shows rents are flattish in Auckland but going gang busters in some other geographic markets.

Sell, I was less than impressed but not selling at the appraisal price. Will probably wait till rates drop to have another look at it

[Frezzinghot]

I was with a friend today who owns a business in plumbing. He has a staff of over 60 people so fairly sizeable, he told me in his 35years in the industry he has never seen a year as bad as 2024 is shaping up to be.

Quite some scary insights and to think we are only 3 months in!

[Sanya]

I was with a friend today who owns a business in plumbing. He has a staff of over 60 people so fairly sizeable, he told me in his 35years in the industry he has never seen a year as bad as 2024 is shaping up to be.

Quite some scary insights and to think we are only 3 months in!

Was a high percentage of the plumbing business previously associated with new builds?

In contrast, I would assume plumbing repair work is steady for them?

[Frezzinghot]

Was a high percentage of the plumbing business previously associated with new builds?

In contrast, I would assume plumbing repair work is steady for them?

No the company has various businesses, diversified if you like, he knows when things are starting to look bad

[Jeffa]

When (if) Fed cuts

This will strengthen the kiwi and weaken the USD

This will lower the USD and your off shore investment’s value on the exchange rate

This is why higher risk higher returns become the investment of choice overseas, like Nasdaq 100 index Russel 2000 index , S&P500 ,Bitcoin etc

The low risk low return like bonds , USD , become less profitable after the exchange rate so forces investors (including KiwiSaver into higher risk returns to outperform the stronger exchange rate and inflation)

As everything being equal like a pendulum, the Kiwi dollar and other foreign currencies become stronger therefore this attracts investors back into the NZ share market (currently flat for 2 years) driving up the NZ sharemarket , which adds to investment into these companies which creates jobs and growth in the economy, obviously a strong Kiwi economy means higher house prices from higher wages

So the farmers and exporters who have been keeping the Kiwi economy afloat get pushed to the back of the line with little to no interest in their overpriced lamb chops, this will slowly happen as the Fed cuts, so Adrian Orr will be forced to cut once (if) Fed cuts rates to front run economic conditions, he would be mad to wait until mid 2025 after the fed cuts multiple times, We would likely be in a deep depression if he left it too late to cut

Current all time highs in the US share market are speculators and traders front running Fed cuts,so in theory when the Fed cuts the US sharemarkets could sell off 7 to 20% maybe more if fear kicks in !


Traders will take profits instead of waiting for the economy to catch up to lower interest rates causing a sell off in the market.

The market bottoms and the cycle repeats

King Jeffa still predicts house prices to double from there 2022 lows by 2030

There you go, now you don’t have to take out a 50k student loan for a 3 years in bachelor’s of commerce degree

Fk university is a load off crock

[chook]

Anybody see lamb prices at the grocery stores? It’s been a few years since it was this cheap

Lamb was sitting at a low $5.50 a kilogram on last week’s meat schedule compared with about $9/kg last season

Now imagine what’s going to happen to our farmers if the Fed cuts rates and the Kiwi dollar becomes more expensive

Fk the lamb chops, our economy is teetering on collapse

This is something a lot have been missing, but I see you picked it up K Jeffa, the farmers who have held our country together for the last few shaky years are now struggling. IF there is a drought (there is actually one in Marlborough and surrounds currently) in the next year or two we are F#*ked. One thing I notice tourism is pumping but for how long when people slowly run out of cash?

[chook]

1/Isis comes out of hiding looking like street beggars from K road

2/Princess Kate diagnosed with cancer along King Charles

3/Puff Daddy on the run being a pedo

4/Ship turns of its lights and collides directly into a bridge shutting down main support route

5/ Rich people and poor people in NZ arguing about a boat race and dolphins (wtf?)

6/…..?

6) Rachel & Rangi are back to together.. (Simon shot the gap)

[chook]

Sell, I was less than impressed but not selling at the appraisal price. Will probably wait till rates drop to have another look at it

Im betting it will be worth less FH

[Jeffa]

When will the US share markets take a dive - ie when will the bear end this year and what will cause it?

Is it safe to say it will be smooth sailing up until the election?

You should not take financial advice from a known conspiracy theorist

but

Wait for Fed to cut and begin dollar cost averaging in as the Kiwi dollar appreciates meaning you can buy more of the US sharemarkets

or

Buy the NZX while it’s low now it will go higher once RBNZ cuts over the next few years

[Jeffa]

Yeah be interesting what Adrian Orr has to say this week, he’s got a couple of interviews with RNZ and the herald about the economy he will be mindful of what he has to say

Im picking he will mention the Feds dovish tone, markets pricing in rate cuts in Europe, how this will effect the kiwi dollar and economy moving forward

Watch the kiwi, if he’s dovish it will fall which could stagnate falling inflation, if he’s maintaining no rate cuts until 2025 it will rise which will obviously hurt our exports and economy further,so he will keep much of his forecast to himself (and his 1% club mates)

"Aggregate demand is slowing, core inflation and pressures are coming off, and inflation expectations are coming back, so we hope that we can see low and stable inflation on the horizon again and that would mean more normalised interest rates on the horizon."

https://www.rnz.co.nz/news/business/512875/lower-interest-rates-getting-closer-reserve-bank-governor-adrian-orr

[Jeffa]

"Aggregate demand is slowing, core inflation and pressures are coming off, and inflation expectations are coming back, so we hope that we can see low and stable inflation on the horizon again and that would mean more normalised interest rates on the horizon."



https://www.rnz.co.nz/news/business/...nor-adrian-orr

Yep Adrian Orr definitely made an effort to send the kiwi lower this morning, it may be to little to late if US PCE inflation data comes in lower on Friday currency speculators will dump the dollar and buy the Kiwi getting in ahead of any rate cuts by the Fed

[Jeffa]

Im betting it will be worth less FH

ANZ:

Inflation expectations were unchanged at 4.5%, while expected house
price inflation fell from 4.1% to 3.4%. This series has no predictive
power for house prices, but is a lens on the “wealth effect” on spending.

[Chris W]

King Jeffa still predicts house prices to double from there 2022 lows by 2030

Jeffa,

That reminds me of what you wrote back in June 2022.

Negative interest rates land on asset prices tripling house prices by decades end.

Asset price inflation will be the only way to keep ahead of the debt.

Retail Banks now have systems in place for this scenario

That's my bull case, my base case is double.

For the record, June 2022 house prices:

1) REINZ median house price - Auckland: $1,156,000
2) REINZ median house price - Wellington: $848,000
3) REINZ median house price - nationwide: $850,000

Thought it was worthwhile to put some target prices out there, rather than a constantly moving target without target prices.

So based on the June 2022 prices, for your information, here are the target prices for your predictions by 1 Jan 2030

A) Based on base case - double:

1) REINZ median house price - Auckland: $2,312,000
2) REINZ median house price - Wellington: $1,696,000
3) REINZ median house price - nationwide: $1,700,000

B) Based on bull case - triple:

1) REINZ median house price - Auckland: $3,468,000
2) REINZ median house price - Wellington: $2,544,000
3) REINZ median house price - nationwide: $2,550,000

[Jeffa]

ANZ:

Inflation expectations were unchanged at 4.5%, while expected house
price inflation fell from 4.1% to 3.4%. This series has no predictive
power for house prices, but is a lens on the “wealth effect” on spending.

The Adrian Orr backstop just stepped into the chat room

[Jeffa]

Jeffa,

That reminds me of what you wrote back in June 2022.





For the record, June 2022 house prices:

1) REINZ median house price - Auckland: $1,156,000
2) REINZ median house price - Wellington: $848,000
3) REINZ median house price - nationwide: $850,000

Thought it was worthwhile to put some target prices out there, rather than a constantly moving target without target prices.

So based on the June 2022 prices, for your information, here are the target prices for your predictions by 1 Jan 2030

A) Based on base case - double:

1) REINZ median house price - Auckland: $2,312,000
2) REINZ median house price - Wellington: $1,696,000
3) REINZ median house price - nationwide: $1,700,000

B) Based on bull case - triple:

1) REINZ median house price - Auckland: $3,468,000
2) REINZ median house price - Wellington: $2,544,000
3) REINZ median house price - nationwide: $2,550,000

This is just silly

Find the lowest price point of the current cycle , each region moves differently for Auckland it’s not June 2022 It’s 7 months later then double it which should be 1.86million,

Your price point of 2.3mill for Auckland by 2030 is closer to a bull case scenario