Real estate, post COVID-19 level 4 (since 2020)

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#3155499 3-Nov-2023 15:58

tweake:
Handle9: Please quote me where I said there wasn’t a problem with housing prices.

Take your time. I’ll wait.

Handle9:

They could never afford it and access to credit was extremely difficult until the market reforms of the 80s and 90s.

Funnily enough building new houses is quite difficult when interest rates are at 20%. Put rampant inflation into the mix and its mess.

the old "it was worse in the 80's" therefore todays housing crisis doesn't exist. pretend the situation isn't happening just like pretending no one makes money off it. 🙄

You’re being totally disingenuous at this point. Where does what I posted say that house prices are not a problem?

You seem totally incapable of understanding any form of complexity in the housing market and just parrot the same old trope.

Handle9

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#3155500 3-Nov-2023 15:59

tweake:
johno1234:

And further, we can see from Australia that you can't tax a supply and demand problem into submission. The demand won't go away unless you get rid of people and it does nothing to address supply.

unless the demand is artificial. airbnb for eg.

How is Airbnb artificial demand? It’s short term accomodation but it’s still actual demand for accomodation.

tweake

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#3155547 3-Nov-2023 18:08

Handle9:

How is Airbnb artificial demand? It’s short term accomodation but it’s still actual demand for accomodation.

because its a house taken out off the market. its turned into a motel unit or a ghost house.

i'm not going to rub any ones nose in it, no point doing that. i dare say most people are the same way. your doing a good job illustrating my point about people and why the housing crisis will never be fixed (until it crashes and burns, and even its a maybe). it explains why no one is bothering, no major party has campaigned on fixing it and one campaigned to make it worse.

Handle9

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#3155551 3-Nov-2023 18:15

tweake:

Handle9:

How is Airbnb artificial demand? It’s short term accomodation but it’s still actual demand for accomodation.

because its a house taken out off the market. its turned into a motel unit or a ghost house.

i'm not going to rub any ones nose in it, no point doing that. i dare say most people are the same way. your doing a good job illustrating my point about people and why the housing crisis will never be fixed (until it crashes and burns, and even its a maybe). it explains why no one is bothering, no major party has campaigned on fixing it and one campaigned to make it worse.

So there is demand for accomodation and it's satisifed, it's not artificial demand. Expecting the world to stay the same forever is stupid, things change.

mattwnz

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#3155585 3-Nov-2023 18:47

mudguard:

Push interest rates higher. This would involve a change to the Reserve Bank's mandate, as it is really only there to keep a lid on inflation and employment, not house prices.

I think the most likely chance is that prices stay flat and we have to wait at least a generation or two for wages to catch up. Which shafts them.

Didn't they change this more recently so that they are also now required to look into house price sustainability? https://www.rbnz.govt.nz/monetary-policy/about-monetary-policy/the-role-of-house-prices-in-our-mandate

Yes I think that house prices will stay relatively flat when talking into account inflation. Although the narrative of the much of the MSM in NZ seems to be that house prices are going to rise again very soon and you could miss out. But much of their advertising comes from real estate and associated businesses, and both NZ and Australias economies are largely built around a housing market economy, so it is often talked up, and negative news is often underreported. This story yesterday says that house prices rose slightly in the last month. https://www.stuff.co.nz/business/property/300999532/downturn-over-heres-how-much-house-prices-really-fell But they appear to omit inflation, so the figures aren't adjusted for the inflation of 5.6% in the last 12 months , so IMO it looks like in real terms it is still a fall. So IMO it isn't accurate.

tweake

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#3156767 6-Nov-2023 20:17

how bad will it get ?

https://www.1news.co.nz/2023/11/05/average-auckland-house-deposit-may-reach-1m-by-2045-report/

"A report shared exclusively with 1News predicts the average Auckland house price deposit will be $1 million by 2045."

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quickymart

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#3156798 6-Nov-2023 22:13

Jesus, what a shambles. Unless you have rich parents or you're an investor, most people born today have got almost next to no chance of ever owning their own property if that figure is correct.

mattwnz

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#3156808 6-Nov-2023 22:48

tweake:
how bad will it get ?

https://www.1news.co.nz/2023/11/05/average-auckland-house-deposit-may-reach-1m-by-2045-report/

"A report shared exclusively with 1News predicts the average Auckland house price deposit will be $1 million by 2045."

I wonder if they are one driver of FOMO as I recall similar stories by them during 2020 and 2021 when house prices were increasing significantly each month, driven by the ultra low interest rates.

mattwnz

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#3156819 7-Nov-2023 01:17

quickymart:

Jesus, what a shambles. Unless you have rich parents or you're an investor, most people born today have got almost next to no chance of ever owning their own property if that figure is correct.

Unless one has a time machine, it is impossible to prove. How many experts were wrong about interest rates or house pries in the past 4 years, many. IMO it hinges on where interest rates are positioned. But the interest rate hikes (from the historic low emergency rates) caused house prices to crash in NZ from their highs, especially when you take into account inflation. Even if house prices had stayed static over the last 2 years, factoring in the high inflation they would have dropped quite a bit. IMO the lower rates just caused house prices to increase, and a higher deposit being needed. Whereas higher rates and lower house prices mean a lower deposit is required, which is better for first home buyers. IMO I think the really low rates have caused a lot of damage. FHBs over the last 2-3 years are likely going to be worse affected. Historically interest rates are still quite low, and I think around 8% would be a more neutral level for interest rates. But people in the property game are talking down interest rates in the future, and that interest rates could fall in the next few years. But each time I hear one say this, the time creeps out to further in the future. They really don't know and IMO it is all about trying to talk up the market to get people buying houses. There is rarely a really negative story published in NZ about buying and selling a house. But the 100k influx of people from overseas isn't going to help first home buyers, as it will just put more demand on the limited supply... during a housing crisis.

itey

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#3156833 7-Nov-2023 07:19

Very interesting times we live in,and I find the lack of action particularly troubling. I'm a mid 30s fully qualified gp after 10 years of university study (+ specialty study) and my young family are struggling to buy in Auckland. Many of my medical peers, and many of my young 20s patients have moved overseas. The loss of highly educated NZ'ers is highly troubling.
Me? We're renting for another year and then if we still cannot afford are off to AU, also.

quickymart

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#3156839 7-Nov-2023 08:13

mattwnz:

quickymart:

Jesus, what a shambles. Unless you have rich parents or you're an investor, most people born today have got almost next to no chance of ever owning their own property if that figure is correct.

Unless one has a time machine, it is impossible to prove. How many experts were wrong about interest rates or house pries in the past 4 years, many. IMO it hinges on where interest rates are positioned. But the interest rate hikes (from the historic low emergency rates) caused house prices to crash in NZ from their highs, especially when you take into account inflation. Even if house prices had stayed static over the last 2 years, factoring in the high inflation they would have dropped quite a bit. IMO the lower rates just caused house prices to increase, and a higher deposit being needed. Whereas higher rates and lower house prices mean a lower deposit is required, which is better for first home buyers. IMO I think the really low rates have caused a lot of damage. FHBs over the last 2-3 years are likely going to be worse affected. Historically interest rates are still quite low, and I think around 8% would be a more neutral level for interest rates. But people in the property game are talking down interest rates in the future, and that interest rates could fall in the next few years. But each time I hear one say this, the time creeps out to further in the future. They really don't know and IMO it is all about trying to talk up the market to get people buying houses. There is rarely a really negative story published in NZ about buying and selling a house. But the 100k influx of people from overseas isn't going to help first home buyers, as it will just put more demand on the limited supply... during a housing crisis.

I found a copy of the NZ Herald from 2002 the other day while doing some cleaning and the house prices were actually (what I would call) quite reasonable and affordable; a new 3-bedroom place in Manukau was something like $180,000. More recently there was an article in The Spinoff that said if house prices had followed the rate of inflation rather than whatever they've done in recent years, a typical Auckland house would cost something like $350,000 (I can't find the article now). While that's a fair amount of money, at least it's better than the $700-800,000 that most places typically go for these days - and would be quite manageable under one income.

Like the doctor's comment above me, it's ridiculous that two adults working fulltime have to scrimp and save so much just to buy a house, otherwise they'll jet off to Australia. There must be an easier way to do this that works for everyone, surely?

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quickymart

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#3156853 7-Nov-2023 09:03

Found them - this was the NZ Herald in March/April 2002, which isn't really that long ago in the grand scheme of things, when you think about it.

Of interest - I note for the house for removal in the third pic the prices aren't that different between then and now. So where did it all go so wrong? Were there just millions of vacant houses back at the turn of the century going for a song? Even adjusting these prices for today's inflation the properties for sale now are extremely overpriced. Why should someone be penalised because they didn't buy a house at the right time, ie, when prices were, well, normal?

wellygary

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#3156855 7-Nov-2023 09:04

tweake:

how bad will it get ?

https://www.1news.co.nz/2023/11/05/average-auckland-house-deposit-may-reach-1m-by-2045-report/

"A report shared exclusively with 1News predicts the average Auckland house price deposit will be $1 million by 2045."

"Aera founder Derek Handley told 1News: "The idea that you can, through your own hard work, save up 20% for an average-priced house is mathematically almost impossible"

Hmm, Derek Handley.... now I've heard that name before , and based on what I've seen I think we should take a big pinch of salt with a forecast from him,,

https://thespinoff.co.nz/business/29-08-2018/nz-tech-is-losing-it-over-the-idea-of-derek-handley-as-cto-of-new-zealand

"A well-credentialed CTO characterises Handley’s career thus: “He’s founded two ad agencies – he’s not a technologist as far as I can tell.”"

"“I feel a little bit sorry for Derek,” wrote one. “He has been a tireless self-promoter for so many years, and obviously really wants the job."

quickymart

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#3156867 7-Nov-2023 10:28

LOL! That reminded me of this... https://www.nzherald.co.nz/nz/steve-braunias-secret-diary-of-derek-handley/MMZFUXQTF25OIYH26JIINLOMLA/

mudguard

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#3157048 7-Nov-2023 16:03

quickymart:
Even adjusting these prices for today's inflation the properties for sale now are extremely overpriced. Why should someone be penalised because they didn't buy a house at the right time, ie, when prices were, well, normal?

Which inflation calculator did you use?
I tried the Reserve Bank's one and for $300,000 in 2002 it came back as $1,361,000 now

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