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mattwnz
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  #2703013 6-May-2021 16:47
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tdgeek:

 

Question

 

Auckland saw average property values rise by another 2.4 percent in April - a yearly increase of 15.6 percent and an average value of nearly $1.25 million

 

How is this calculated? The average selling price in any given period of all homes sold?  What if sales volume is predominantly higher value homes, or lower value homes? 

 

 

 

 

I thought they use the median house price, and not 'average'. It interesting that stats can be cherry picked to suit a narrative by different media organisations.

 

 

 

I have noticed in the last few weeks more houses not selling by deadline sales, and even some where the BEO price has been dropped. So there does seem to be something going on. Maybe it is partly heading into winter, which means less genuine buyers looking to move.




mattwnz
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  #2703016 6-May-2021 16:55
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Batman:

 

nobody knows the future. remember these economists were saying house prices would crash 20-30% during level 4 lockdown. instead it went up 20-50% depending on region.

 

so supply is there. if there's demand someone will buy. supply doesn't mean anything without knowing the demand.

 

 

 

 

I recall they saying 15% drop. But that was when we didn't know how this virus was going to go, and how badly affected NZ would be. We could have ended up like India. We have been very lucky in a number of ways. I also remember them saying that builders may end up with no work, when the opposite has happened

 

Demand has been artificially inflated due to our record immigration numbers, and bringing in people when we don't have enough houses for those already here. Little planning or even analysis of what NZs population should even be. Although I understand the government are now getting someone to do this.  We are all therefore paying the price of this in some way. These house rices rises benefit very few in the long run. Maybe people feel better because their house has gone up in value, but they need to live somewhere, if if they move, thy need to pay a similar price, unless they downgrade or move town. But even small houses now are going for nearly as much as large ones, as many people want smaller houses, especially with an aging population. Many baby boomers are selling up their family home to downsize, but can be paying just as much for a small low maintenance house in a subdivision or village


tdgeek
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  #2703148 7-May-2021 07:56
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mattwnz:

 

 

 

I thought they use the median house price, and not 'average'. It interesting that stats can be cherry picked to suit a narrative by different media organisations.

 

 

 

I have noticed in the last few weeks more houses not selling by deadline sales, and even some where the BEO price has been dropped. So there does seem to be something going on. Maybe it is partly heading into winter, which means less genuine buyers looking to move.

 

 

Yeah, median or average the same point still applies. Lets say house prices are easing. But due to the current high values, there are not many lower end sales as FHB's are pretty much shut out. There are more sales of higher value properties as these are mainly owners changing houses. Those higher vale houses may be easing in price but the overall volume is skewed to the higher value houses so the median or average still rises. giving a false indication of the "actual" market. Similarly, if prices were rising but FHB were provided with new Govt measures then higher sales volume of lower value houses skew the median, making the median decrease, even though the prices are still increasing




Paul1977
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  #2703181 7-May-2021 09:15
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tdgeek:

 

Yeah, median or average the same point still applies. Lets say house prices are easing. But due to the current high values, there are not many lower end sales as FHB's are pretty much shut out. There are more sales of higher value properties as these are mainly owners changing houses. Those higher vale houses may be easing in price but the overall volume is skewed to the higher value houses so the median or average still rises. giving a false indication of the "actual" market. Similarly, if prices were rising but FHB were provided with new Govt measures then higher sales volume of lower value houses skew the median, making the median decrease, even though the prices are still increasing

 

 

Is that true though? I agree FHBs are largely shut out, but that's because they are being outbid on the lower end sales they are interested in. That doesn't mean fewer lower end sales, it just means different people are buying them.


tdgeek
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  #2703233 7-May-2021 10:11
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Paul1977:

 

tdgeek:

 

Yeah, median or average the same point still applies. Lets say house prices are easing. But due to the current high values, there are not many lower end sales as FHB's are pretty much shut out. There are more sales of higher value properties as these are mainly owners changing houses. Those higher vale houses may be easing in price but the overall volume is skewed to the higher value houses so the median or average still rises. giving a false indication of the "actual" market. Similarly, if prices were rising but FHB were provided with new Govt measures then higher sales volume of lower value houses skew the median, making the median decrease, even though the prices are still increasing

 

 

Is that true though? I agree FHBs are largely shut out, but that's because they are being outbid on the lower end sales they are interested in. That doesn't mean fewer lower end sales, it just means different people are buying them.

 

 

Yep, I get that. There will always be buyers of lower value homes for whatever reason. What I'm saying is, is that if the general mix of all sales volume skews, the so called average or median house price changes will be off


Paul1977
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  #2703285 7-May-2021 10:31
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tdgeek:

 

Yep, I get that. There will always be buyers of lower value homes for whatever reason. What I'm saying is, is that if the general mix of all sales volume skews, the so called average or median house price changes will be off

 

 

Agreed, what I meant was that I don't know that it is currently skewed towards more higher value sales. At least in Christchurch anyway.


tdgeek
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  #2703286 7-May-2021 10:39
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Paul1977:

 

tdgeek:

 

Yep, I get that. There will always be buyers of lower value homes for whatever reason. What I'm saying is, is that if the general mix of all sales volume skews, the so called average or median house price changes will be off

 

 

Agreed, what I meant was that I don't know that it is currently skewed towards more higher value sales. At least in Christchurch anyway.

 

 

Yes, here in Chch the house averages are quite low compared to elsewhere, Im out West there are subdivisions galore

 

 


 
 
 

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Paul1977
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  #2703290 7-May-2021 10:53
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tdgeek:

 

Yes, here in Chch the house averages are quite low compared to elsewhere, Im out West there are subdivisions galore

 

 

They're everywhere, you can't turn a corner without seeing another one. I'm in Halswell, and can think of at least 7 new subdivisions where houses are currently being built in that one suburb alone.

 

And the sections all seem to be getting sold to building companies before independent buyers can even get a look in. Great for the building companies, not so much for the perspective buyer who would like to find a section and then pick the builder they want.


tdgeek
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  #2703293 7-May-2021 10:59
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Paul1977:

 

tdgeek:

 

Yes, here in Chch the house averages are quite low compared to elsewhere, Im out West there are subdivisions galore

 

 

They're everywhere, you can't turn a corner without seeing another one. I'm in Halswell, and can think of at least 7 new subdivisions where houses are currently being built in that one suburb alone.

 

And the sections all seem to be getting sold to building companies before independent buyers can even get a look in. Great for the building companies, not so much for the perspective buyer who would like to find a section and then pick the builder they want.

 

 

I'm in Aidanfield. There are a few in north suburbs as well, Preston Rd etc. I guess the build costs here compare well to the existing homes, so maybe better value


Fred99
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  #2703299 7-May-2021 11:12
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tdgeek:

 

Paul1977:

 

Agreed, what I meant was that I don't know that it is currently skewed towards more higher value sales. At least in Christchurch anyway.

 

 

Yes, here in Chch the house averages are quite low compared to elsewhere, Im out West there are subdivisions galore

 

 

I get lost in some of these subdivisions - particularly around Wigram.  There are plenty of developments in higher price brackets too - on the hills around Halswell, larger blocks on the flat around Lincoln etc.

 

Yet from what I can see, Chch population only just recovered to pre-quake level in about 2017/8, but perhaps that's distorted by strong growth in Waimakariri and Selwyn. 


Paul1977
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  #2703320 7-May-2021 11:53
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Fred99:

 

I get lost in some of these subdivisions - particularly around Wigram.  There are plenty of developments in higher price brackets too - on the hills around Halswell, larger blocks on the flat around Lincoln etc.

 

Yet from what I can see, Chch population only just recovered to pre-quake level in about 2017/8, but perhaps that's distorted by strong growth in Waimakariri and Selwyn. 

 

 

Those ones were a little expensive for me, and then the cost of building on a hill is a lot more as well. They are doing some nice houses up there, but I'd hate to think what the final build costs are. Still, if they can afford it good on them. I don't think we'll see too many FHBs up there!


quickymart
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  #2703323 7-May-2021 11:56
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That is awesome for Christchurch, but I wonder how hard such a system would be to replicate/copy in Wellington (very little flat land left to build on) or Auckland (um, lots of free land, I guess)?


Paul1977
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  #2703332 7-May-2021 12:07
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quickymart:

 

That is awesome for Christchurch, but I wonder how hard such a system would be to replicate/copy in Wellington (very little flat land left to build on) or Auckland (um, lots of free land, I guess)?

 

 

It seems like it should be good for Christchurch. You'd expect this would leave a lot of the existing housing stock for FHBs, but it doesn't really seem to be happening as they are still struggling to get the feet in the door. I honestly have no idea where all these people building houses are coming from.


mattwnz
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  #2703458 7-May-2021 15:59
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This video shows how the number of houses for sale in NZ has dropped significantly over the last year, as per trademe listings. I have been looking for these stats previously, but couldn't find them as they don't seem to be widely reported. https://youtu.be/-Yi1_IGZxRw?t=234 

 

It shows 32,000 houses for sale this time last year, now only 22,000 . That is 10,000 houses that are missing from the market.  This is really the problem in a nutshell, the supply being sold has dropped significantly. So limited supply on the market, creating  more demand per house, mixed with the emergency low interest rates, is pushing up prices

 

 

 

 


mattwnz
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  #2703460 7-May-2021 16:09
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Paul1977:

 

quickymart:

 

That is awesome for Christchurch, but I wonder how hard such a system would be to replicate/copy in Wellington (very little flat land left to build on) or Auckland (um, lots of free land, I guess)?

 

 

It seems like it should be good for Christchurch. You'd expect this would leave a lot of the existing housing stock for FHBs, but it doesn't really seem to be happening as they are still struggling to get the feet in the door. I honestly have no idea where all these people building houses are coming from.

 

 

I suspect that a lot of people who are building are not selling, but keeping the house to use as a rental. Otherwise many people would need to sell before building, but instead they are probably borrowing against their existing house to build.  I heard one expert say that they expect more FHBs to shift from buying new, to buying existing, and more investors to buy new, due to the governments changes.

 

If I was buying in Chch, I think I would buy new, as buying existing with something that could be eq damaged and hidden is a bitof a risk . Although I would avoid brick veneer. Plus new are more energy efficient with wall insulation and hopefully double glazing. The compromise is the area, as existing houses tend to be in nice tree lined areas with more space between houses. Some of the subdivisions are just a mass of highly compressed housings on tiny parcels of land. One developer told me that the land is where the money is, and not the building of houses on the land, and they can ask so much more for land over this last year due to house prices rising so much.  .


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