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

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#2563284 13-Sep-2020 15:47

quickymart:

https://www.stuff.co.nz/life-style/homed/300102928/wheres-that-housing-downturn-we-talked-about

What annoys me is that people were expecting house prices to fall immediately. But we are still very early on in this. Demand is still higher than demand, and people currently have cash that they are now hardly getting any interest in the banks on, that they need to sink into housing, as many don't seem to see any better alternatives, and a house can't just close down taking your savings with it. People also aren't taking overseas trips, and younger people are delaying their OE and buying houses instead with the interest rates so low. So it is almost the perfect storm for house price increases. Likewise all the NZers returning, some with lots of money, allows them to snap up the stock. The reserve bank also wants house prices to continue to rise, as it makes people feel richer, and they will then more likely spend money in the economy. So we should be seeing how it looks in another year, when subsidies end (if they do) and mortgage holidays end. I know someone in Texas, and their house prices are so cheap over there, as is their price of building, compared to NZ.

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#2563304 13-Sep-2020 18:36

mudguard: It's kind of a chicken and egg thing though isn't it? I work in finance, a friend of mine moved from Auckland to Tauranga and took a 50% pay cut!

Obviously most jobs are better than none, if only to keep your CV from having a hole.

I've noticed that Tauranga / Bay of Plenty median wages vs median house prices is bad, very bad, almost Auckland bad.

I've had several recruiters talking to me about jobs in the area, but once they told me the salary I told them not to proceed. They always say "but the quality of living is better."

If you can't afford the rent, much less buy a home, then quality of living is a moot point.

tdgeek

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#2563323 13-Sep-2020 19:43

mattwnz:

quickymart:

https://www.stuff.co.nz/life-style/homed/300102928/wheres-that-housing-downturn-we-talked-about

What annoys me is that people were expecting house prices to fall immediately. But we are still very early on in this. Demand is still higher than demand, and people currently have cash that they are now hardly getting any interest in the banks on, that they need to sink into housing, as many don't seem to see any better alternatives, and a house can't just close down taking your savings with it. People also aren't taking overseas trips, and younger people are delaying their OE and buying houses instead with the interest rates so low. So it is almost the perfect storm for house price increases. Likewise all the NZers returning, some with lots of money, allows them to snap up the stock. The reserve bank also wants house prices to continue to rise, as it makes people feel richer, and they will then more likely spend money in the economy. So we should be seeing how it looks in another year, when subsidies end (if they do) and mortgage holidays end. I know someone in Texas, and their house prices are so cheap over there, as is their price of building, compared to NZ.

You are way over thinking it, these factors dont just happen in seconds. As was the case before Covid there was excess demand and poor supply, that hasn't changed. There are many people who are non or low affected by the virus, they are active in the market. High demand and low supply hasn't changed a lot.

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#2563325 13-Sep-2020 19:58

tdgeek:

You are way over thinking it, these factors dont just happen in seconds. As was the case before Covid there was excess demand and poor supply, that hasn't changed. There are many people who are non or low affected by the virus, they are active in the market. High demand and low supply hasn't changed a lot.

High demand only sustained from artificially cheap money. Logic says it can't last forever.

mattwnz

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#2563347 13-Sep-2020 21:12

dafman:

tdgeek:

You are way over thinking it, these factors dont just happen in seconds. As was the case before Covid there was excess demand and poor supply, that hasn't changed. There are many people who are non or low affected by the virus, they are active in the market. High demand and low supply hasn't changed a lot.

High demand only sustained from artificially cheap money. Logic says it can't last forever.

The problem is they just keep printing it, and NZ has now got into the game. It doesn't seem banks are too worried about losing depositors who have term deposits.

tdgeek

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#2563397 14-Sep-2020 07:23

dafman:

tdgeek:

You are way over thinking it, these factors dont just happen in seconds. As was the case before Covid there was excess demand and poor supply, that hasn't changed. There are many people who are non or low affected by the virus, they are active in the market. High demand and low supply hasn't changed a lot.

High demand only sustained from artificially cheap money. Logic says it can't last forever.

Money was cheap a long way before Covid, as was high demand, or at least demand well exceeding supply

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#2566813 17-Sep-2020 13:30

Stuff: Coronavirus crisis shows our housing market is too big to fail

Bernard Hickey writes the Covid-19 crisis has again proven there’s one type of asset that New Zealanders know in their bones is too big and important to be allowed to crash: housing

Yet again, the housing market has outperformed all the understandably doomy and gloomy predictions of double-digit falls in the face of the worst economic crisis the world has seen since World War II.

Economists from various banks forecast house price deflation of 10-30 per cent during the worst of the lockdown in April and May, back when house sales volumes collapsed and unemployment was tipped to surge towards 15 per cent.

It seemed a sensible thing to say, given New Zealand’s housing market is the best performing in the western world in the last 30 years, relative to incomes, rents and after the effects of inflation are stripped out. Prices have quadrupled in real terms since 1980, and have tripled relative to incomes in the biggest cities.

By most measures, our houses are insanely and impossibly inflated, just waiting for a mere scratch to burst the bubble and send prices 30 to 50 per cent lower. That’s what happens in ‘normal’ markets where supply and demand respond to prices to achieve something sensible.
...

mattwnz

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#2566891 17-Sep-2020 15:13

This is a positive story...not

House prices could halve in 'very severe scenario' where unemployment hit 17.7%

https://www.stuff.co.nz/business/122796046/house-prices-could-halve-in-very-severe-scenario-where-unemployment-hit-177

wellygary

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#2566898 17-Sep-2020 15:22

mattwnz:

This is a positive story...not

House prices could halve in 'very severe scenario' where unemployment hit 17.7%

https://www.stuff.co.nz/business/122796046/house-prices-could-halve-in-very-severe-scenario-where-unemployment-hit-177

17% unemployment is pretty much depression territory...

Based on the "scenarios" that Treasury put forward in the depths of the L4 lockdown, to get to 17% unemployment you need the country ( over a year) to have L4 for 3 months and then L3 for 3 months..(could be a yo-yo type situation) ..

Its highly unlikely,

The RBNZ is printing the kitchen sink, the question is are banks prepared to lend to anyone other than homeowners....

(mind you a large number of NZ small businesses start by leveraging off a home loan as its the cheapest form of credit...)

mattwnz

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#2566910 17-Sep-2020 15:46

wellygary:

mattwnz:

This is a positive story...not

House prices could halve in 'very severe scenario' where unemployment hit 17.7%

https://www.stuff.co.nz/business/122796046/house-prices-could-halve-in-very-severe-scenario-where-unemployment-hit-177

17% unemployment is pretty much depression territory...

Based on the "scenarios" that Treasury put forward in the depths of the L4 lockdown, to get to 17% unemployment you need the country ( over a year) to have L4 for 3 months and then L3 for 3 months..(could be a yo-yo type situation) ..

Its highly unlikely,

The RBNZ is printing the kitchen sink, the question is are banks prepared to lend to anyone other than homeowners....

(mind you a large number of NZ small businesses start by leveraging off a home loan as its the cheapest form of credit...)

Yes it is unlikely, but they obviously need to plan in case.

Financial experts have been warning for many years of the problems with house prices going so high vs wages. But kiwis felt rich with houses prices rising, meaning they also spent money in the economy, and is what the reserve bank wanted too. The system seems to need house prices to steadily increase. So it does appear to be too big to fail. Money printing is never good, but seems most countries are doing it. Who are we paying all this money back to, that we are borrowing? . I don't think kiwis really understand what is going on, most of huge news this week is over giving rugby players an exemption to quarantining, and the economic effects of not hosting the championship. But that is chump change vs the risk and the cost that other businesses have lost.

Victoria has shown that lockdowns can be enforced for a long time to get the virus under control, if it is left too long, and that could easily have been Auckland. I think it is a bit dangerous for the NZ economy that we have allowed Auckland to get so large, and be such a big part of the economy, when we could have spread that growth amongst other cities, with the correct policies and incentives.

tdgeek

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#2567079 17-Sep-2020 18:01

mattwnz:

This is a positive story...not

House prices could halve in 'very severe scenario' where unemployment hit 17.7%

https://www.stuff.co.nz/business/122796046/house-prices-could-halve-in-very-severe-scenario-where-unemployment-hit-177

Yeah read that, agree its NOT. Journo's that push their article based on worst case are just seeking clicks. The spend on the virus was less than forecast, as is unemployment, as are most metrics. Back then it was a guess. Yes, things may go backwards, but enough people are less affected financially to allow the lack of housing to remain as the dominant factor. Those that fall to the sword will be helped, its not Ameirca here, you won't drive round and see nice houses with 4 foot grass and broken windows.

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tdgeek

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#2567082 17-Sep-2020 18:07

mattwnz:

Yes it is unlikely, but they obviously need to plan in case.

Financial experts have been warning for many years of the problems with house prices going so high vs wages. But kiwis felt rich with houses prices rising, meaning they also spent money in the economy, and is what the reserve bank wanted too. The system seems to need house prices to steadily increase. So it does appear to be too big to fail. Money printing is never good, but seems most countries are doing it. Who are we paying all this money back to, that we are borrowing? . I don't think kiwis really understand what is going on, most of huge news this week is over giving rugby players an exemption to quarantining, and the economic effects of not hosting the championship. But that is chump change vs the risk and the cost that other businesses have lost.

Victoria has shown that lockdowns can be enforced for a long time to get the virus under control, if it is left too long, and that could easily have been Auckland. I think it is a bit dangerous for the NZ economy that we have allowed Auckland to get so large, and be such a big part of the economy, when we could have spread that growth amongst other cities, with the correct policies and incentives.

Thats quite negative, AKL is not Victoria. AKL has had 3 days with no CT, its been short compared to Victoria, and the lack of compliance in AKL has been noteworthy, but the premise of elimination still works.

Trust the process, the score will look after itself.

kingdragonfly

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#2572298 22-Sep-2020 18:27

Stuff: 100 bids and sells for $2.29 million

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#2572432 22-Sep-2020 21:57

Bargain! That’ll be knocked over and replaced with a block of flats in no time.

kingdragonfly

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#2572788 23-Sep-2020 14:10

Google map of that 2.3 million dollar home, on a non-descript street, Waratah Street, Birkenhead, Auckland

It has the ute parked in the driveway. The seller has done the equivalent of winning the lotto.

https://www.google.com/maps/@-36.806824,174.7266407,3a,75y,90t/data=!3m6!1e1!3m4!1sdxpxPDzzkF3g7Cl_SCaI4A!2e0!7i16384!8i8192

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