Housing demand calculation methodology

[Chris W]

Here's some food for thought -

A very commonly held belief is that population growth leads to increased demand for housing and hence leads to higher property prices. Population growth is very commonly cited as the reason for property prices continuing to rise and for property prices not falling by many property market commentators.

Auckland still has an increasing population and net migration, yet there is decreasing demand for housing? How can demand be decreasing in light of continued population growth? Why do you think that is? Are we missing something?

Quote from below article - With less demand, sellers are adjusting expectations and are more open to negotiation in order to get their property sold.


QV data shows New Zealand house prices falling



Property prices are falling, and those who have to sell or have problem properties are feeling the pain.
QV has released its latest House Price Index, which shows that nationwide residential property values fell 1.6 per cent over the three months to August.

In Auckland, prices were down 0.4 per cent in the quarter, in New Plymouth down 0.3 per cent, in Christchurch down 0.2 per cent and in Queenstown, down 1 per cent.
On an annual basis, prices are up 4.8 per cent on the same time a year ago. That annual rate is slowing - at the same time two years ago, the annual rate of growth was 14.6 per cent. In July this year, the annual rate was running at 5.2 per cent.


"Affordability constraints continue to change buyer behaviour. We're seeing an increase in demand for more affordable two-bedroom semi-detached units as well as apartments, particularly in our main centres. With population growth projected to continue to rise, I'd anticipate these types of properties will attract even more demand in future years, particularly in Auckland and Wellington City," said QV general manager David Nagel.

He said small provincial towns across the country were seeing strong growth and the southern part of the country, including Dunedin and Invercargill, was also increasing in price.
Overall, we're anticipating value growth to remain flat or steadily grow across most regions. The winter period has certainly taken the heat off the market and naturally, we'd expect the Spring period to inject new energy into the market.


"The market is currently experiencing polarising forces with key market drivers such as low interest rates, population growth and lack of supply, being countered by tightening credit conditions and a range of Government policy initiatives aimed at cooling the market."

"Spring is going to be a very interesting time for the residential property market as we see what unfolds when a few more buyers and sellers enter the market."

In Auckland, senior consultant James Steele said a drop in the number of investors in the market had opened space for first-home buyers.

We are continuing to see a high proportion of properties come to market as price by negotiation as opposed to auction. With less demand, sellers are adjusting expectations and are more open to negotiation in order to get their property sold. In general this has caused prices to soften with the biggest variation from the peak shown in properties which are poorly presented or have other issues.


The premiums paid before the latest round of loan-to-value restrictions were introduced were no longer seen, he said.

"As expected, we have seen minor fluctuations in price with some downward pressure through the winter months coming from those who needed to sell. At this stage, any larger downward pressure on property prices is likely to come from regulatory change or wider economic risks."

In Wellington, senior consultant David Cornford said rising rents were pushing buyers into the market. "Two-bedroom, semi-detached units are selling particularly well, as they provide a more affordable option for young professionals or families. New builds or one and two bedroom modern apartments is also proving popular for the same reasons."

Christchurch consultant Daryl Taggart said he expected activity to increase over the warmer months.

- Stuff

Source: https://www.stuff.co.nz/business/106...prices-falling

[eri]

"A very commonly held belief is that population growth leads to increased demand for housing

yes

and hence leads to higher property prices."

usually

but an awful lot of housing demand is based on WANT

not NEED

so when there are supply constraints

people can easily reduce their demand

likewiseprices can't keep going up

if there's no money spare...

it's all very well taking 'big picture' views of economic theory

but both levels of gov.

have many ways to crash the long terms dreams

of people who ignore short term events

[cube]

Increasing population will inevitably result in higher demand for housing, but it is not the only factor affecting prices.

Measures taken to cool investor's ardor for real estate, quite a few apartment complexes coming to completion adding to supply, high prices leading to a general 'stickiness' in the market are all having a dampening effect.

What I don't see is a massive supply of homes being built, and if net migration stays positive, pressure will continue to be on prices despite the govts. single-shot, short term policies.

[Chris W]

This is how effective demand for property gets impacted. (for definition of the difference between "effective demand" vs "underlying demand" see earlier in this thread. Most property commentators talk about underlying demand, yet it is effective demand that is key. Buyer confidence and price expectations influence effective demand)



When it comes to the rapidly cooling property market, I’m part of the problem.

At the start of this year I was looking to buy a house in Sydney, despite most likely having to sell a kidney and ownership rights of my first born to do so.

We’ve all been told for so long you need to be on that you need to get on that property ladder sooner or later, and as house prices continued to soar to unprecedented levels, I figured I had better opt for sooner.


But after a couple of months after I began my search, I got an email from a real estate agent telling me that the owner of a property I’d taken an interest in was willing to accept offers of $250,000 below the asking price.
“Sorry, do you mean $25,000?” I replied, assuming that was some sort of typo. Nope, it was spot on – they were willing to cop a quarter of a million-dollar loss.
That to me said they were panicking, and in turn, it made me panic that this was definitely not a good time to be getting in to the market.
And so I decided I was going to sit it out for a year or two and just see how far prices will fall.

Turns out I’m far from alone – clearance rates are now down significantly from the madness of a year or two ago, and the dip in property prices can so quickly become a crash when people like me lose confidence in the market.


The problem with these situations is that they can very quickly become self-fulfilling prophecies – that if everyone gets scared, no one ends up buying, and prices fall and fall until eventually people decide prices are so low that they’d be mad not to cash in.
There are numerous factors to blame here – banks tightening up lending restrictions, the end of many interest-only loans, an over-supply of apartments, and the simple fact that everyone probably got a bit carried away with our property boom in the last decade and created an over-inflated marketplace.
So we’re all the cause of the crash, but we’ll all eventually be the solution as well – once people decide there are bargains to be had, the market will roar back to life.


Source: https://www.9news.com.au/2018/09/16/...onomy-property

[Chris W]

How "effective demand" is impacted ...

"Well it seems 60 minutes has had an impact, 2 mates at work today have been scared out of buying and decided to wait. One just put an offer in Sydney and is retracting his offer and waiting. This after watching the show, I can't believe it's had that much of an influence on people I know, fear is real and starting."

Comment from a property chat forum after watching a story on the current events program 60 Minutes in Australia. This illustrates how confidence can fall from potential buyers due to changed price expectations. As a result "effective demand" is impacted, whilst "underlying demand" is relatively unchanged.

News stories in mainstream media can impact confidence in potential buyers, and hence impact "effective demand". Notice how the headlines of falling property prices in some cities in Australia have lead to a fall in the level of confidence already by potential buyers and this news story further fueled falling confidence and as the story reinforced the trend of recent price moves.

If this story had come out when property prices were still rapidly rising, and the mainstream media were reporting property prices continually rising (and resulting in buyer confidence being high), then this story might have been dismissed altogether and not had an impact at all on buyer confidence as this story would be at odds with the recent experience and evidence of rapidly rising prices.


Links to 60 Minutes story
Part 1: https://www.youtube.com/watch?v=smPR0s2W-Ck
Part 2: https://www.youtube.com/watch?v=BbFvwYVfwq0

[eri]

scary stuff

from a national broadcaster

from a couple of weeks ago

https://www.youtube.com/watch?v=0lrdxpKPocY

Consumers In Surprising Places Are Borrowing Like Crazy | Seeking ...
https://seekingalpha.com/.../4151600-consumers-surprising-places-borrowing-like-cra...
Feb 28, 2018 - The Money Bubble is inflating at different speeds in different places. ... household debt-including mortgages, credit cards and car loans-today than the U.S. ... In Switzerland, Australia, New Zealand and Canada, the household ...

Household Debt Sees Quiet Boom Across the Globe - WSJ
https://www.wsj.com/.../household-debt-sees-quiet-boom-across-the-globe-1518969601
Feb 18, 2018 - A decade after the global financial crisis, household debts are considered by ... In Switzerland, Australia, New Zealand and Canada, the household .... During the U.S. housing bubble, home prices nearly doubled from 2000 to ...

To Spot the Next Financial Crisis, Look Who Was Spared by the Last ...
https://www.wsj.com/.../to-spot-the-next-financial-crisis-look-who-was-spared-by-the-las...
Apr 26, 2018 - Countries that escaped the financial crisis have been going on borrowing ... had a catastrophe on the scale of Lehman when a housing bubble burst. ... Now Canada, Australia and Sweden, along with New Zealand and ..

Australia, Canada, Sweden Banks May Pose ... - Financial Tribune
https://financialtribune.com/.../aus...e-global-syste...
Feb 6, 2018 - While the five economies it dubbed the “CANNS” (Canada, Australia, New Zealand, Norway and Sweden) represented a modest portion of the ...

Goldman Says Swedish, Kiwi Housing Markets Most at Risk of Bust ...
https://www.bloomberg.com/news/.../n...-at-risk-of-bu...
May 15, 2017 - The Swedish and New Zealand housing markets are the most at risk of a ... over-valued, followed by Canada, Sweden, Australia and Norway,”

[Bob Kane]

But after a couple of months after I began my search, I got an email from a real estate agent telling me that the owner of a property I’d taken an interest in was willing to accept offers of $250,000 below the asking price.
“Sorry, do you mean $25,000?” I replied, assuming that was some sort of typo. Nope, it was spot on – they were willing to cop a quarter of a million-dollar loss.
That to me said they were panicking, and in turn, it made me panic that this was definitely not a good time to be getting in to the market.
And so I decided I was going to sit it out for a year or two and just see how far prices will fall.

First home buyers usually panic after watching any tv show about the impending property crash.
Property investors usually smile on the inside.
Sharp investors can make a lot of money when there is widespread panic.

[Chris W]

First home buyers usually panic after watching any tv show about the impending property crash.

That is what many property market commentators overlook and miss when they talk about "underlying housing demand" - they assume that population growth means an increase in house demand in the market and this results in property price increases, and that continued population growth supports the assertion that property prices do not fall by much. With this perspective, housing demand (i.e the number of active interested buyers) is considered to be steady or growing and does not fluctuate much over time. This is the theoretical perspective that most economists and market commentators talk about. This is why their price forecasts and expectations can be incorrect, especially at key price turning points and at extreme prices and asset valuation levels. Furthermore, those with a vested financial interest in rising property prices (such as real estate agents, people employed by banks pretending to be economists who are really promoting bank mortgage lending, etc) give potential buyers (and potential borrowers) continued confidence to buy by reciting this rationale to expect continuing rising prices - this is how this interpretation of market demand becomes widespread to many people and hence frequently becomes misunderstood.

However, in the real world, when large numbers of potential buyers are scared and afraid to buy and hold off buying, that demand for housing is no longer there in the current market, and it does impact "effective housing demand" which impacts property prices. If the fall in demand from house buyers who are scared (and decide to hold off buying), more than offsets the increase in buyer demand from "sharp investors" (the phrase that Bob uses), then there is a net fall in effective demand for housing. If property supplied to the market for sale is unchanged (effective supply and not underlying supply), and the effective demand for houses falls, that is how property markets become a "buyers" market from a "sellers" market.

When the property market is a "buyer's market" as there are fewer interested active buyers in the market relative to the number of active property sellers in the market, "sharp investors" in property start making low ball offers below the current market price of recent transactions of comparable properties and some time pressured and impatient vendors accept those low ball offers and hence property prices fall. These low ball offers which are accepted by vendors now influence the new market price benchmark for future property transactions.

Many economists and market commentators don't make the connection between "underlying demand" and "effective demand", and hence don't recognise when a property market has turned from a "seller's market" to a "buyer's market". Consumer confidence is one important variable that can impact effective demand and turn the property market from a "sellers" market to a "buyers" market.

[Chris W]

US housing: what happened to the underlying demand?

The US housing crash rolls on, with the Case-Shiller house price index showing prices fell in 19 of the 20 city markets it surveys in February. According to the Case-Shiller index, US home prices are now down 3.3% from a year ago (see below chart) and have fallen by around one-third since the housing bubble burst in 2006.
However, the broader FHFA national index, which measures home prices across 50 US states, has shown lower levels of volatility. This is because the US housing bubble/bust has been confined mostly to a minority of cities, as illustrated by the below chart, which compares the narrower 10-city Case-Shiller Composite Index against the FHFA 50-state House Price Index (chart courtesy of Carpe Diem).

As you can see, the US housing bubble/bust has been most pervasive in the cities making up the Case-Shiller 10-city Composite Index, namely: Boston, Chicago, Denver, Las Vegas, LA, Miami, NYC, San Diego, San Francisco, and Washington D.C.. As a group, the remaining US markets have experienced smaller increases/decreases in prices.
Back in January, I explained how the extreme differences in price volatility between US cities/states was due predominantly to how these markets regulate land-use.

Housing markets where strict regulatory barriers are in place, such as urban growth boundaries, restrictive planning/zoning requirements, and minimum lot sizes, have been incapable of quickly and efficiently supplying low-cost housing. These supply constraints have ensured that increases (decreases) in housing demand have fed directly into higher (lower) prices instead of changes in new construction. The perceived land/housing shortages and rising prices during the upswing also encouraged speculative demand and ‘panic buying’ from first-time buyers, which assisted in driving home prices up even further. However, when the economy and sentiment soured in the wake of the financial crisis, causing housing demand to evapourate, prices collapsed in these supply-restricted markets.
By comparison, in housing markets with lighter-touch land-use regulations, low-cost housing was able to be built quickly and efficiently in response to rising demand. The rapid supply response prevented prices from rising dramatically, which also reduced speculative intent, since there was little prospect of achieving strong capital gains. And with house prices remaining relatively steady, ‘panic buying’ from first home buyers was less prevalent. Put simply, prices never rose as high or fell as far in the supply responsive markets.
To illustrate these points, consider the wild bubble/bust conditions experienced in markets identified by Demographia or the Brookings Institution as operating highly restrictive land use practices:
By contrast, markets adopting more liberal market-based approaches (‘more responsive land regulation’) have experienced lower levels of volatility and more moderate rises/falls in home values:
The findings are the same when the Case-Shiller city data is charted instead (click to view charts here and here).
Demand ain’t what it used to be:
An interesting feature of the US housing market was that the mainstream view at the height of the bubble was that prices were justified based on pervasive housing shortages and high levels of household formation (known as ‘underlying’ or ‘pent-up’ demand).
For example, California, which had experienced lower rates of home construction than Australia, was said to have a chronic housing shortage driven by continued high rates of household formation and inadequate construction.
And there are many other examples too, including:

• Neil Barsky, from Alson Capital Partners LLC, who made the following statements in the WSJ on 28 July, 2005 [my emphasis]:

“There is no housing bubble in this country. Our strong housing market is a function of myriad factors with real economic underpinnings: low interest rates, local job growth, the emotional attachment one has for one’s home, one’s view of one’s future earning- power, and parental contributions, all have done their part to contribute to rising home prices… What we do have is a serious housing shortage and housing affordability crisis.”

• James F. Smith, Director, Center for Business Forecasting, who in April 2005 argued that US housing demand would stay strong for years to come due to robust underlying demand [my emphasis]:

“There is no evidence of a housing “bubble” in the United States and housing demand should stay strong for years to come. Three major factors lead to this conclusion. First, the 77 million baby boomers are approaching the peak home ownership ages of 65-75 (over 83.0 percent versus a national average in 2004 of 69.0 percent). Second, immigrants, a growing share of the U.S. population, tend to buy houses ten years later than people born in the United States of the same income group and family size. Third, mortgage rates are not likely to go high enough (8.0 percent or more for 30-year fixed rate mortgages) to put a crimp in demand. Despite some areas of concern, overall homeowners’ equity is at record levels above $9 trillion. Delinquencies are still less than one percent of mortgages outstanding.”

• Samuel Lieber, President, Alpine Woods Capital Investors, who said in the WSJ on 12 April 2006 [my emphasis]:

“We don’t see a bubble. Historically, home prices just don’t go down nationwide unless we are in a significant recession… It’s employment that really counts. The underlying fundamentals of real estate are still very positive. Job creation and household formation drive housing.”

• Mark Vitner, Senior Economist, Wachovia said on 19 January 2006:

“Everybody is looking for evidence of a housing bubble…There is not a housing bubble. The supply had not kept up with demand.”

• And finally, who can forget this testimony from Ben Bernanke in 2005 [my emphasis]:

“House prices have risen by nearly 25 percent over the past two years. Although speculative activity has increased in some areas, at a national level these price increases largely reflect strong economic fundamentals, including robust growth in jobs and incomes, low mortgage rates, steady rates of household formation, and factors that limit the expansion of housing supply in some areas.”

Even as recently as June last year, another so-called property expert predicted that the USA would soon be experiencing another chronic housing shortage because it was “not building enough homes to keep up with potential demand”. According to James Gaines, a real estate economist with Texas A&M:

Just 672,000 new homes were started in April [2010], an annualized rate of less than half the long-term run rate needed to meet the nation’s natural population growth. So far, the shortfall has been masked by a weak economy that has put a damper on home buying. Once the job market rebounds, however, people will look to have their own homes again. This pent-up demand could get unleashed on unprepared markets, causing shortages and rising local prices.

And yet US home prices continue to fall and vacancies rise, despite negligible new home construction. So what happened to the strong underlying demand and so-called shortages that were supposed to underpin the US housing market?

Well, a recent Bloomberg interview with the creators of the Case-Shiller home price index, Karl Case and Robert Shiller, provides some answers.
First, despite continued population growth, the US is experiencing a decline in the number of households (i.e. a negative rate of household formation). As such, home vacancies continue to rise even though new home construction has ground to a halt. There are multiple possible reasons for the decline in households, including: rising unemployment; difficulty in obtaining finance (despite record low interest rates); and extremely low levels of confidence (in spite of high levels of housing affordability).
Second, US housing starts are currently running at 60-year lows, which is particularly problematic for the economy since new home starts (construction) has pulled the US out of the last 3 or 4 recessions. So unless there is a turn around in household formation and construction, the downturn is likely to persist for some time yet.
Finally, the government-sponsored Fannie Mae, Freddie Mac and the Federal Housing Administration are the key pillars supporting the US housing market at present. And if government support is wound back, then the home values could again fall precipitously.


‘Undersupply’ is not always a bullish indicator for home prices:

The key lesson from the US experience is that the argument that housing shortages arising from high levels of underlying (or ‘pent-up’) demand would prevent home prices from falling is inherently flawed. General economic conditions can deteriorate, causing unemployment to rise and the number of people per dwelling to increase as they group together to reduce their housing costs. Such actions can also turn a perceived housing shortage into a surplus.
The economic reality is that the demand for housing is highly changeable depending, largely, on the prevailing economic conditions. And when housing supply is unresponsive (‘inelastic’), these changes in demand feed directly into prices instead of new construction, making the housing market more volatile and prone to boom/bust cycles.
Once again, think about the US the next time an ‘expert’ claims that Australia’s so-called housing shortage would prevent house prices from falling here.

Source: https://www.macrobusiness.com.au/201...rlying-demand/

[Davo36]

Why are you posting an article from 2011?

[Bob Kane]

You'd be pretty brave to claim a shortage of houses will result in a drop in prices.

[Chris W]

Davo36

For Auckland, the commonly cited reason that house prices will continue to increase (and not fall by much) is due to pent-up underlying demand and that underlying demand for housing is increasing.

The article is an example of disproving this. In this case, underlying demand is very likely to have fallen as unemployment rising caused the number of people per dwelling to increase as they group together to reduce their housing costs - this lead to a decline in the number of households.

"The key lesson from the US experience is that the argument that housing shortages arising from high levels of underlying (or ‘pent-up’) demand would prevent home prices from falling is inherently flawed. General economic conditions can deteriorate, causing unemployment to rise and the number of people per dwelling to increase as they group together to reduce their housing costs. Such actions can also turn a perceived housing shortage into a surplus.

The economic reality is that the demand for housing is highly changeable depending, largely, on the prevailing economic conditions. And when housing supply is unresponsive (‘inelastic’), these changes in demand feed directly into prices instead of new construction, making the housing market more volatile and prone to boom/bust cycles."

Prior to the US bubble bursting these were the comments made where market commentators rationalised high property prices due to pent up underlying demand:

• Neil Barsky, from Alson Capital Partners LLC, who made the following statements in the WSJ on 28 July, 2005 [my emphasis]:

“There is no housing bubble in this country. Our strong housing market is a function of myriad factors with real economic underpinnings: low interest rates, local job growth, the emotional attachment one has for one’s home, one’s view of one’s future earning- power, and parental contributions, all have done their part to contribute to rising home prices… What we do have is a serious housing shortage and housing affordability crisis.”

• James F. Smith, Director, Center for Business Forecasting, who in April 2005 argued that US housing demand would stay strong for years to come due to robust underlying demand [my emphasis]:

“There is no evidence of a housing “bubble” in the United States and housing demand should stay strong for years to come. Three major factors lead to this conclusion. First, the 77 million baby boomers are approaching the peak home ownership ages of 65-75 (over 83.0 percent versus a national average in 2004 of 69.0 percent). Second, immigrants, a growing share of the U.S. population, tend to buy houses ten years later than people born in the United States of the same income group and family size. Third, mortgage rates are not likely to go high enough (8.0 percent or more for 30-year fixed rate mortgages) to put a crimp in demand. Despite some areas of concern, overall homeowners’ equity is at record levels above $9 trillion. Delinquencies are still less than one percent of mortgages outstanding.”

• Samuel Lieber, President, Alpine Woods Capital Investors, who said in the WSJ on 12 April 2006 [my emphasis]:

“We don’t see a bubble. Historically, home prices just don’t go down nationwide unless we are in a significant recession… It’s employment that really counts. The underlying fundamentals of real estate are still very positive. Job creation and household formation drive housing.”

• Mark Vitner, Senior Economist, Wachovia said on 19 January 2006:

“Everybody is looking for evidence of a housing bubble…There is not a housing bubble. The supply had not kept up with demand.”

• And finally, who can forget this testimony from Ben Bernanke in 2005 [my emphasis]:

“House prices have risen by nearly 25 percent over the past two years. Although speculative activity has increased in some areas, at a national level these price increases largely reflect strong economic fundamentals, including robust growth in jobs and incomes, low mortgage rates, steady rates of household formation, and factors that limit the expansion of housing supply in some areas.”

And yet US home prices continue to fall and vacancies rise, despite negligible new home construction. So what happened to the strong underlying demand and so-called shortages that were supposed to underpin the US housing market?

Well, a recent Bloomberg interview with the creators of the Case-Shiller home price index, Karl Case and Robert Shiller, provides some answers.
First, despite continued population growth, the US is experiencing a decline in the number of households (i.e. a negative rate of household formation). As such, home vacancies continue to rise even though new home construction has ground to a halt. There are multiple possible reasons for the decline in households, including: rising unemployment; difficulty in obtaining finance (despite record low interest rates); and extremely low levels of confidence (in spite of high levels of housing affordability).

[Chris W]

You'd be pretty brave to claim a shortage of houses will result in a drop in prices.

The key lesson from the US experience is that the argument that housing shortages arising from high levels of underlying (or ‘pent-up’) demand would prevent home prices from falling is inherently flawed. General economic conditions can deteriorate, causing unemployment to rise and the number of people per dwelling to increase as they group together to reduce their housing costs. Such actions can also turn a perceived housing shortage into a surplus.

[Chris W]

So to summarise the US situation for some geographical locations

1) underlying demand for housing was falling due to
a) people moving to other areas for job opportunities (population reduction)
b) more people per dwelling

leading to fewer households in that geographical market

2) effective demand for housing was falling due to unemployment, inability to get finance, low confidence to buy from potential house buyers, etc


Having underlying demand for housing fall is quite unusual (from an unusually large economic downturn), whilst the drivers of effective demand are in line with the economic cycle.

It is effective demand for housing that impacts property prices and this can change the property market from a sellers market to a buyers market and vice versa.

When there is a fall in both underlying demand and effective demand, there is potential for large property price changes as the property market becomes a massive buyers market due to the significant reduction in competition due to fewer buyers that are active in the market.

[Chris W]

This is the viewpoint put forward by property market commentators, property market participants, property market promoters:

Auckland currently has favourable demographics:

1) the population is still growing as the birth rate exceeds the death rate,
2) we have inbound immigration,

This leads to an increase in underlying demand of housing. There is pent-up demand for housing.

Also the cost of construction has increased, and there are no signs of overbuilding.

It has been commonly cited by property market proponents that, Auckland is one of the top 3 livable cities in the world so foreigners will move to Auckland, and Auckland council has restricted land supply, thereby leading many property market proponents to conclude that there is strong underlying demand for housing, and they expect that property prices to continue rising. As a result, many property market proponents, participants and commentators expect prices to double in 10 years in line with property price movements over the last 50 years.


In NZ, there is currently an economic environment of low unemployment, a growing economy, and low interest rates.

So this environment is expected to lead to high underlying demand for housing, (and a reported housing shortage) in Auckland.

Food for thought - If there is such strong underlying demand and pent-up demand for housing then why do you think is this situation occurring?


https://www.propertytalk.com/forum/s...315#post436315

With such supposed strong underlying demand (and pent-up demand), and with over 105 properties currently listed for sale on trademe.co.nz, in a 5 month period, how can there have been ZERO transactions?

There is a world of difference between how the property market works as discussed by the property market promoters and how the property market works in practice.

The property market commentators have missed how a property market can turn from a sellers market to a buyers market.