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

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#2748901 23-Jul-2021 18:51

Fred99:

I get the feeling that the pandemic has resulted in a huge number of expat NZers coming home, employment stats seem to show that there's no shortage of jobs. It's boomtown everywhere.

I think thats the big outlier. Things change, things adapt, but that extra bonus you can't really suck up easily

dafman

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#2748909 23-Jul-2021 19:46

Signs that you are living in really weird and scary times.

The prospect of a .3% increase in mortgage rates is prime time news.

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#2749648 26-Jul-2021 08:25

https://www.stuff.co.nz/national/125815514/what-would-happen-if-we-all-stopped-talking-about-house-prices

Apparently house prices may stop rising if we all stopped talking about it.

mattwnz

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#2749955 26-Jul-2021 14:42

tdgeek:

I get the feeling that the pandemic has resulted in a huge number of expat NZers coming home, employment stats seem to show that there's no shortage of jobs. It's boomtown everywhere.

They may have come back temporarily, but I recall reading an article with stats showing they weren't a significant buyer of houses during covid. Many will , or will have moved back overseas as other countries get more vaccinated and return to some form of normality. I think we are also going to end up with another brain drain, as younger NZers have been locked out of the housing market, and have been let down badly over all this. There are better opportunities now overseas, including parts of Oz, which itself is overpriced. But NZ is one of the worst.

I also read that NZ MPs have benefited hugely from the 30%+ house price rises due to covid. Many earning more in tax free capital gains than they earn working. $50million dollars in capital gains for just 120 MPs, and not all of them own houses. From my rough calculations, that is $438,000 in just a year, on average for those 95% of MPs that own houses.

https://www.stuff.co.nz/national/politics/300357291/the-houses-of-parliament-mps-rack-up-millions-in-capital-gains-as-housing-affordability-crisis-worsens

mattwnz

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#2749957 26-Jul-2021 14:43

quickymart:

https://www.stuff.co.nz/national/125815514/what-would-happen-if-we-all-stopped-talking-about-house-prices

Apparently house prices may stop rising if we all stopped talking about it.

NZ never really stops talking about houses. It now NZs main economy. But the music has to stop at some point doesn't it?

heavenlywild

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#2749959 26-Jul-2021 14:55

Cost of land is going up, cost of people, cost of materials... the music may stop but it certainly won't be for long, if at all.

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heavenlywild

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#2749960 26-Jul-2021 14:56

People thought average 1m price would never happen, then it happened.

Don't be surprised if prices average 1.5m within 5 years, in Auckland.

GV27

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#2749961 26-Jul-2021 14:58

quickymart:

https://www.stuff.co.nz/national/125815514/what-would-happen-if-we-all-stopped-talking-about-house-prices

Apparently house prices may stop rising if we all stopped talking about it.

Ah. Should have known that after decades of various governments' inaction on key issues affecting land, building supplies or local body zoning and consenting that it was actually our fault this whole time.

tdgeek

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#2749964 26-Jul-2021 15:00

mattwnz:

quickymart:

https://www.stuff.co.nz/national/125815514/what-would-happen-if-we-all-stopped-talking-about-house-prices

Apparently house prices may stop rising if we all stopped talking about it.

NZ never really stops talking about houses. It now NZs main economy. But the music has to stop at some point doesn't it?

I read that about it being the biggest part of the economy, but that isn't 1.5 million houses x 40% profit, but cheekily the article didnt state what that GDP figure includes. It may include vases, for the home, etc.

The music will stop when FHB's stop buying, as too expensive, then sales will be just between existing homeowners. Prices would stabilise then once the demand and supply equalises

mattwnz

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#2750013 26-Jul-2021 16:17

This is quite a good video from a young person in Australia about the housing market over there and how 60% of people will now never own a house. I suspect it is worse in NZ.

https://www.youtube.com/watch?v=58CAescN0KE

mattwnz

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#2750016 26-Jul-2021 16:22

tdgeek:

mattwnz:

NZ never really stops talking about houses. It now NZs main economy. But the music has to stop at some point doesn't it?

I read that about it being the biggest part of the economy, but that isn't 1.5 million houses x 40% profit, but cheekily the article didnt state what that GDP figure includes. It may include vases, for the home, etc.

The music will stop when FHB's stop buying, as too expensive, then sales will be just between existing homeowners. Prices would stabilise then once the demand and supply equalises

Someone has to be buying into the market (first home buyers) as people exit it, otherwise it will become a buyers market. So if FHBs dry up, new buyers need to come from somewhere. Whether that will be from migration, or from investment vehicles such as banks. Or whether they will introduce longer mortgage terms, and more government subsidies. But all that does is push prices even higher . As interest rates rise, FHBs will to be able to pay as much, so sellers will have to readjust their price expectations. Wages are not increasing enough.

I was discussing housing with some older people, and they were saying how difficult it was to sell their houses in the 90's, and it wasn't uncommon for houses to be on the market for over 6 months. and just to get a buyer was a big thing.

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#2750018 26-Jul-2021 16:30

I remember those days! A relative used to do real estate and I'd tag along to some open homes with him. Sometimes he'd be there 2-3 hours and wouldn't see a soul.

I guess there were houses aplenty back then!

tdgeek

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#2750025 26-Jul-2021 16:49

mattwnz:

Someone has to be buying into the market (first home buyers) as people exit it, otherwise it will become a buyers market. So if FHBs dry up, new buyers need to come from somewhere.

Was meaning that houses are too expensive for FHB's so they don't buy. The houses we have that are owned by homeowners (obviously :-) ) will buy and sell between them. People move, upgrade, downgrade. Prices would stabilise once supply of sellers and supply of buyers equalised due to prices rising or falling to a point that its stable. All theoretical though.

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#2750104 26-Jul-2021 18:02

Prices are certainly at a point where they require a mental reset. We were thinking of buying another house to allow us to have a city side bolt hole and a shorter commute a few times a week. Even in the Hutt you're approaching $850k for something in a nice part like Trentham.

When we arrived 15 years ago or so, that would certainly have bought 2 houses there I am sure.

However, if you graph property prices over time in any Western economy, the only direction they go is up. You can increase supply to reduce the speed of increase. You can increase interest rates to slow the market. Nothing short of a resurgence of the Black Death wiping out 50% of the population again resulting in empty houses (whole villages simply disappeared in Britain - their names remain in records but there is nothing there but open fields now) would cause a significant long term downward trend I suspect.

mattwnz

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#2750107 26-Jul-2021 18:23

quickymart:

I remember those days! A relative used to do real estate and I'd tag along to some open homes with him. Sometimes he'd be there 2-3 hours and wouldn't see a soul.

I guess there were houses aplenty back then!

I went to an open home this weekend and there wasn't anyone there, and it didn't get any offers at the tender which closed a week ago. Almost new build, but a bit ugly and only 2 bedroom 1 bathroom and small section, and surrounded by rentals, but considering putting in an offer. An estate sale so hopefully they will accept a clean offer that isn't crazy, to get rid of it. But other open homes there were heaps of people, but some of those were do ups and new to the market, and many people were probably local being nosy. But many of these doo-ups are poorly done and can cover up problems.

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