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

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#2759713 13-Aug-2021 15:40

quickymart:
Not sure how realistic this is, but...

https://www.newshub.co.nz/home/money/2021/08/housing-market-forecast-to-peak-with-fall-in-prices-predicted.html

His guess, your guess and my guess are all as good as anyone else's. Basically no one really knows in this Post Covid world.

With materials and builders hard to come by, I predict another rise over summer before stabilising from autumn 2022.

Can't see prices falling in Auckland at least.

wellygary

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#2759717 13-Aug-2021 15:47

quickymart:

Not sure how realistic this is, but...

https://www.newshub.co.nz/home/money/2021/08/housing-market-forecast-to-peak-with-fall-in-prices-predicted.html

Prices fall when buyers are driven out of the market.. but the most price sensitive buyers are currently the FHB,

Having a situation of falling house prices that still locks out FHBs and still lets investors leverage existing assets is still gonna burn the Govt..

Handle9

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#2759718 13-Aug-2021 15:50

quickymart:

Not sure how realistic this is, but...

https://www.newshub.co.nz/home/money/2021/08/housing-market-forecast-to-peak-with-fall-in-prices-predicted.html

It's entirely possible, or they could keep increasing.

alavaliant

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#2759739 13-Aug-2021 16:13

I'll believe it when I see it. When I bought my house almost 15 years ago I had people telling me that I should wait because the market was too high and it was sure to go down anytime.... Since then rather than going down, it just keeps rising and rising....

Senecio

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#2759740 13-Aug-2021 16:18

When we immigrated to NZ and bought in Auckland in 2017 we were also told to wait as it was the top of the market. It kind of was as prices did stagnate during 2018 but look at what has happened since!

mattwnz

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#2759746 13-Aug-2021 16:34

Handle9:

quickymart:

Not sure how realistic this is, but...

https://www.newshub.co.nz/home/money/2021/08/housing-market-forecast-to-peak-with-fall-in-prices-predicted.html

It's entirely possible, or they could keep increasing.

IMO interest rate rises will be the gamechanger, but depends to what extent they occur . It looks like they will try to get them back up to pre covid levels by early next year due to inflation, unless we have more lockdowns.. The record drops are what has allowed prices to rise so much, as it allows people to borrow more, and people ahve been borrowing up to their limits , just to secure their shack. But when they rise, then there is going to be a squeeze for some. Then add in huge council rates rises in some cases, and other inflation, some people may struggle.

Already I have seen a lot of houses on the market not selling. These are more expensive, and some were purchased during covid, where the seller has speculated , rented it out and not put it back on the market for $200- 300k more than they paid, and more than the market will currently pay. So they could just keep it on the market until there is a desperate enough person out there who will buy. Then that sets a new bench market that causes other house prices to sell for similar amounts. It is entirely possible house prices could rise another 15% by this time next year. If we have another level 4 lockdown, that IMO is even more likely due to FOMO and interest rates probably dropping back again.

Be greedy when others are fearful, is a great quote that I am reminded of with the NZ housing market. There is certainly a lot of greed occurring IMO.

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mattwnz

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#2759748 13-Aug-2021 16:41

alavaliant: I'll believe it when I see it. When I bought my house almost 15 years ago I had people telling me that I should wait because the market was too high and it was sure to go down anytime.... Since then rather than going down, it just keeps rising and rising....

If we hadn't had covid, then who knows what may have happened. The NZ experts also said that house prices would drop 15% last year, when they were wrong.

House prices have dropped 5 times since 1990, so they can and do drop. It seems that people think that the government will not allow them to drop, and house prices are a ratchet that can never go down. At the moment the government only seem to want house price grow to slow down, and not rise as much. I haven't heard them say they want house prices to drop.

mattwnz

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#2759751 13-Aug-2021 16:57

House prices could drop 6% in 2022, and a further 3% in 2023. IMO it essentially means the market will stagnate. Anything that stops the FOMO is a good thing IMO.

Housing market forecast to peak, with fall in prices predicted (msn.com)

wellygary

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#2759753 13-Aug-2021 16:59

mattwnz:

alavaliant: I'll believe it when I see it. When I bought my house almost 15 years ago I had people telling me that I should wait because the market was too high and it was sure to go down anytime.... Since then rather than going down, it just keeps rising and rising....

If we hadn't had covid, then who knows what may have happened. The NZ experts also said that house prices would drop 15% last year, when they were wrong.

COVID saw record low global interest rates along with huge amounts of fiscal stimulus..

NZ got $15B in wage subsidies alone, (that's 5% of GDP)

THE RBNZ printed $50 Billion in new debt (was going to be $100 B) that's another ~15% of GDP ...

and Govts are still spending like sailors on shore leave....

Its no wonder global asset prices are all at record highs, (stocks, commodities, housing etc)

mattwnz

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#2759755 13-Aug-2021 17:11

wellygary:

Its no wonder global asset prices are all at record highs, (stocks, commodities, housing etc)

And it has just increased the wealth divide between the rich and poor. It is going take years to unwind the potential damage. We are now at about 33% of NZ houses being rentals, up from 25% in the 90's. I suspect it will continue to increase as asset values increase.

tdgeek

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#2759766 13-Aug-2021 18:07

mattwnz:

House prices have dropped 5 times since 1990, so they can and do drop. It seems that people think that the government will not allow them to drop, and house prices are a ratchet that can never go down. At the moment the government only seem to want house price grow to slow down, and not rise as much. I haven't heard them say they want house prices to drop.

The issue there is stability. We own a what is now a 7 figure property. Its just a number. We can borrow heaps but the problem is you have to pay it back which is quite annoying.So its just a number right now. Im sure there are many that have equity which has risen so they borrow for a trip, a car or an upgrade. All of those things are good as they add to the economy. The pity right now is Covid inflation on building products and delays.A lot of this is artificial and a one off, but it still adds to the problem. What can you do? Wait till Covid is less an issue, i.e supplies are more stable, and things settle somewhat. Its like we are in the middle of WW2. Its abnormal, nothing will self correct till the war (with Covid ) stabilises.

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tdgeek

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#2759768 13-Aug-2021 18:13

wellygary:

COVID saw record low global interest rates along with huge amounts of fiscal stimulus..

NZ got $15B in wage subsidies alone, (that's 5% of GDP)

THE RBNZ printed $50 Billion in new debt (was going to be $100 B) that's another ~15% of GDP ...

and Govts are still spending like sailors on shore leave....

Its no wonder global asset prices are all at record highs, (stocks, commodities, housing etc)

Yep. Avoid all that QE, house prices would be low, as would the economy and jobs. Many in the poorhouse. Thats the opposite equation. House prices are lower, great. But many have no jobs and no security, so still no house. yes, is all theoretical. But many more people not with us also.

tdgeek

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#2759769 13-Aug-2021 18:16

mattwnz:

And it has just increased the wealth divide between the rich and poor. It is going take years to unwind the potential damage. We are now at about 33% of NZ houses being rentals, up from 25% in the 90's. I suspect it will continue to increase as asset values increase.

What do you prefer? No QE, no wage subsidies, mass unemployment, recession, and still no house as your broke. And all those deaths.

My point is there is no answer where we are all employed, and happy, and buying easy to afford houses in Covid. Its like the equation, A, B and C. Choose two

heavenlywild

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#2759781 13-Aug-2021 19:00

If you look at the house price median over the last 15 years or more, you will see a period of increases, then a period of stabilisation (note: flattening, no permanent dips), then another period of increases.

This is repeated over and over.

Covid has just helped prices increase much more steeply.

tdgeek

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#2759782 13-Aug-2021 19:09

heavenlywild:

If you look at the house price median over the last 15 years or more, you will see a period of increases, then a period of stabilisation (note: flattening, no permanent dips), then another period of increases.

This is repeated over and over.

Covid has just helped prices increase much more steeply.

Yep. Covid is an anomaly. It will pass, but not for a while. Interest rates will go back to normal but that will take time. Building supplies are short so they are higher priced now as well as causing delays. Check all this in one year at a very minimum. Maybe in three years things will stabilise. But wages and salaries will still lag as we live in a low wage economy and some businesses will use that to stem wages and salaries. So, don't hope for too much IMHO

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