Finally, some decent price drops (albeit from very high levels).

https://www.oneroof.co.nz/news/41594

https://www.oneroof.co.nz/news/41681

How low can prices go, and when is it expected to happen?

quickymart:

 

https://www.oneroof.co.nz/news/41681

 

How low can prices go, and when is it expected to happen?

 

Without reading his article, who knows?

High house prices caused by this and that

Increasing interest rates should stem increases as less demand

Outflows of Kiwis should stem demand

Building is up, but its blessed with component inflation.

Eventually once Covid (and its supply issues) and the war (with its inflationary impact) is over, and the outflow of Kiwis things will ease. 

When you are in a country where the population is less than half greater LA, you go with the flow, there is little we can mitigate here

https://www.newshub.co.nz/home/money/2022/06/expert-says-there-s-no-silver-bullet-to-solve-first-home-buyer-crisis-calls-on-need-for-commissioner.html

Would this work? I thin it's a good idea - anything to get people into their own home, but I diunno, what would a person in this sort of role do exactly? (serious question).

Having a look around the Dunedin market things look to be slightly dropping price wise. Before you were looking at at least 500k for anything around the place, there is the odd thing popping up in the 400s now, admittedly its probably not in the best area and will need work, but its a step on the ladder. 

Things are also taking longer to sell, a few houses on the market that have been on for a couple of months.

From my perspective of having a first home already and wanting to take the next step up, it's starting to look doable again. 

Indeed, ANZ thinks prices could drop by as much as 15% - admittedly from the very high levels gained during the pandemic.

https://www.stuff.co.nz/business/money/300646759/anz-increases-forecast-of-house-price-fall-predicts-drop-of-15

quickymart:

 

Indeed, ANZ thinks prices could drop by as much as 15% - admittedly from the very high levels gained during the pandemic.

 

https://www.stuff.co.nz/business/money/300646759/anz-increases-forecast-of-house-price-fall-predicts-drop-of-15

 

 

 

Didn't they start at 5%, then move to 10%. But very little is selling at the moment, and there will be some sellers who will desperately need to sell. But will that sale then be treated as a benchmark, which is what happened when new high prices were set. eg When a piece of land that was previously sold for 300k 3 years ago, sold for 500k about 1.5 years ago, then all similar pieces of land in the area rose to around that 500k, and some by more, and each sale from then on kept of setting new benchmarks. 

quickymart:

 

Indeed, ANZ thinks prices could drop by as much as 15% - admittedly from the very high levels gained during the pandemic.

 

https://www.stuff.co.nz/business/money/300646759/anz-increases-forecast-of-house-price-fall-predicts-drop-of-15

 

 

 

Yep

“Given the ridiculously high starting point for house prices, we’d say the correction to date has been relatively orderly.”

Is the key point. Are house prices falling? Not really, just easing back to a better normality. Assisted by increasing interest rates and increasing inflation, so the interest and inflation is reversing, so the house prices will do as well. But no doubt, media will report all this over time as a crash

tdgeek:

 

But no doubt, media will report all this over time as a crash

 

As they should. Maybe then we'll get some meaningful scrutiny of RBNZ's actions, like revoking LVRs for investors and leaving interest rates on the floor as long as they did. 

GV27:

 

As they should. Maybe then we'll get some meaningful scrutiny of RBNZ's actions, like revoking LVRs for investors and leaving interest rates on the floor as long as they did. 

 

Bit of hindsight there. Same could be said for most other countries in managing the pandemic and the fallout from that. And Ukraine which like the pandemic is a chief cause of global inflation, leaving higher interest rates and higher inflation pulling back the artificaal house prices

tdgeek:

 

Bit of hindsight there. Same could be said for most other countries in managing the pandemic and the fallout from that. And Ukraine which like the pandemic is a chief cause of global inflation, leaving higher interest rates and higher inflation pulling back the artificaal house prices

 

The pandemic didn't cause the inflation issue, the crappy responses from central banks did. 

In the NZ context, it isn't hindsight. The effects of removing LVRs for investors and leaving the OCR low for so long (remember when inflation was 'transitory'?) were widely derided at the time, and the effects were extremely predictable. If you check interest.co.nz, many people did in fact predict it, with no hindsight required. 

The Ukraine argument is a dead heron. The issues we have were unfolding before the first Russian tank rolled over the border. 

They simply got it wrong. 

GV27:

 

The pandemic didn't cause the inflation issue, the crappy responses from central banks did. 

 

In the NZ context, it isn't hindsight. The effects of removing LVRs for investors and leaving the OCR low for so long (remember when inflation was 'transitory'?) were widely derided at the time, and the effects were extremely predictable. If you check interest.co.nz, many people did in fact predict it, with no hindsight required. 

 

The Ukraine argument is a dead heron. The issues we have were unfolding before the first Russian tank rolled over the border. 

 

They simply got it wrong. 

 

All countries got it wrong?  No doubt IN HINDSIGHT, they would do it different next pandemic. Did interest.co.nz say what they would do re supporting the economy (which are wage earners who produce, and who consume) and businesses (who facilitate the production) and avoid QE which pushed interest rates down?

What (I bolded, no point discussing, you seem to disagree with everyone else on those two factors. Demand inflation, as production was low in lockdown and in restrictions, the goods were not there when consumers want to consume, prices rise. As far as restrictions are concerned the pandemic is over, but sick leave is very high, production affected. Ukraine caused the oil price spike, and everything you do or buy has a fuel component. Not only that diesel is the fuel of choice for commercial use, that's skyrocketed

https://www.stuff.co.nz/business/property/129395371/wealthy-aucklanders-halt-townhouses-not-in-keeping-with-their-front-yards

So much for adding intensive housing to work towards supply and demand equilibrium. Same thing is occurring down here in the Lincoln, Canterbury subdivision plan, not wanted as it spoils the character of the small town. NIMBY is a barrier to a lot of things these days

Zeon:

 

So the official cash rate could be nearing 4% by sometime next year. What happens if house mortgages reach 6-7%. People with their $1,000,000 mortgages are going to be paying $60,000-$70,000 in interest per year (including me with the 7 figure mortgage).... The ridiculous housing market had to catch up with us at some point...

 

Pretty glad I fixed for 3-years at 3.47% last October now....

 

I am guessing house prices would have to drop to compensate for the rise in the rates. So the ones most affected will likely be those who purchased in 2020-2022 and got mega mortgages. The crazy house price rise was in part fueled by the record low interest rates, and I hope we are not going to find out the hard way, that banks should have been far more conservative with their lending during that time. It seems some banks were only stress testing around the 5-6% mark when rates were at emergency low levels . I have already seen some people who purchased in the last 2 years, dropping their price to about what they paid for it back when they purchased it. Some sellers are getting desperate.