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  #2482494 13-May-2020 08:44
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There has been a long term trend of declining interest rates over the last 30 years and that has been inflating all asset prices. It's one of the key reasons why there have been significant capital gains in both the housing and share markets in recent years.

 

I see BNZ economists are predicting a 12% decline in house prices which probably isn't a bad thing to take a bit of heat out of the market but, as I said in a previous post, it will vary a lot between regions. For those who want prices to go down by more than that, all I can say is be careful what you wish for.


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  #2484385 15-May-2020 12:32
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I hope this isn't interpreted as a dumb question, but I see ads here on Geekzone for new builds in Chch for just under $400,000. Why is a property in Auckland so much more expensive? Location? Land costs? Not enough houses?
It never used to be that way, I seem to remember in the 1990s and 2000s that the house prices between all the main centres were fairly similar - Auckland wasn't that much more expensive than most of the centres.


 
 
 
 


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  #2484726 16-May-2020 07:09
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quickymart:

 

I hope this isn't interpreted as a dumb question, but I see ads here on Geekzone for new builds in Chch for just under $400,000. Why is a property in Auckland so much more expensive? Location? Land costs? Not enough houses?
It never used to be that way, I seem to remember in the 1990s and 2000s that the house prices between all the main centres were fairly similar - Auckland wasn't that much more expensive than most of the centres.

 

 

"not enough" *land - land price high

 

not enough houses (builders have too much work) - building costs high

 

Chch - plenty of land, too many houses

 

 

 

* according to economists this is caused by the Resource Management Act 1991 preventing land from being developed





Involuntary autocorrect in operation on mobile device. Apologies in advance.


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  #2484737 16-May-2020 08:56
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Actually it was population here in ChCh. 

 

The quakes moved population to new suburbs created, other people selling their family homes of many years and down sizing to new modern homes built specifically for this market and then that leaves first home buyer to have a crack at those 1970s and 80s and in some cases 90s housing stock that is now surplus. 

 

As with any other city... population drives demand. Christchurch's demand got steriods after the quake but has now settled... still people are creating new sub divisions wherever they can, but its actually at a pace of what it was pre quake.  


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  #2484740 16-May-2020 09:24
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Yes "not enough" of something is driven by a big increase in population and lesser increase in supply and "too much" is caused by no/small increase in population and massive increase in supply





Involuntary autocorrect in operation on mobile device. Apologies in advance.


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  #2484807 16-May-2020 12:02
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I thought it might be something like that :( I guess I'm wishing for the impossible to hope a large number of houses would be built in Auckland quickly - I'm guessing probably in the hundreds of thousands would be required, as opposed to just a few hundred...enough to drop the prices to sane levels, anyway.


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  #2484815 16-May-2020 12:25
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What you're hoping for will never happen. Houses will be built to meet demand, no builder will go out there and build houses to exceed demand, thereby devaluing their portfolio of work.

 

Those who know better than I are predicting mid to high single digit declines across NZ. Different areas will be hit differently. Don't take this as financial advice as I'm not qualified to provide it but I expect Auckland to be on lower end of the spectrum as demand still remains high. 

 

To be honest what you're hoping for is a unicorn and the longer you put off buying the more it is likely to cost you.


 
 
 
 


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  #2484821 16-May-2020 12:55
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Janine Starks made some interesting points in her most recent article, published today:

 

- only 4% of the national housing stock turns over annually, which means 96% doesn’t change

 

- the hyped national average decline of 10-15% isn’t worth thinking about because economists, necessarily, work at a high-level and across the whole country

 

- these two factors mean the real-estate market is inherently slow moving anyway and therefore the market change on any individual property is likely to be less to do much less with the market, than due to the property itself.

 

interest rates are pretty low, this promotes demand. The government is pumping dollars into social housing, which will keep a lot of builders busy.

 

When it comes to buy or sell decisions, unless you are a professional investor in property I’d suggest it is better to do so for your own reasons rather than try and predict where the market will go due to macro-economic factors, given that the property market is so non-dynamic.

 

 





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  #2485468 18-May-2020 10:08
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Senecio:

 

What you're hoping for will never happen. Houses will be built to meet demand, no builder will go out there and build houses to exceed demand, thereby devaluing their portfolio of work.

 

Those who know better than I are predicting mid to high single digit declines across NZ. Different areas will be hit differently. Don't take this as financial advice as I'm not qualified to provide it but I expect Auckland to be on lower end of the spectrum as demand still remains high. 

 

To be honest what you're hoping for is a unicorn and the longer you put off buying the more it is likely to cost you.

 

 

But there is a housing shortage, isn't there? Otherwise why are there people in South Auckland living out of cars because they can't afford a property to rent, never mind buy? That (to me) sounds like not enough properties available for the demand.


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  #2485498 18-May-2020 11:08
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Yes, there always will be a housing shortage as demand drives supply.

 

 

 

Demand first, supply follows. But supply will never outstrip demand. That's in no one's interest.


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  #2485548 18-May-2020 12:52
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NZ, along with the rest of the world, is heading into a global depression. And despite wishful thinking, house prices aren't some magical aberration that will escape the downturn.

 

Expert predicts 'massive bankruptcies in two-year meltdown

 

 




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  #2485794 18-May-2020 17:51
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Just sold my home in Wellington.

It's a unit property, but in a good area. The body corporate is only $100/month.

QV was $485,000. I put it forward at $600,000 firm. I was expecting $580,000.

It went on sale last Friday, and will settle this Friday.

I had three offers
$610,000 cash non-conditional.
$611,000 conditional financing
$628,500 conditional LIM.

It's a 1970's home, so I decide to be conservative and take the cash non-conditional.

I am shocked at the one week from advertised to sell time.

I did go all out with staging, and a $1,800 cleaning and prep work before hand.

I got laid off in Wellington, and the jobs are few, and the competition is hot.

I got a job in New Plymouth, and renting a place for 6 months, at $390/week

I think now is the top of house prices in Wellington.

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  #2485911 18-May-2020 21:21
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Well done, I envy you. I wish I could pick up and move that easily - especially to somewhere a lot cheaper, but it's a bit hard when your kids are still in school and all their friends are there :(


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  #2486152 19-May-2020 11:21
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kingdragonfly: Just sold my home in Wellington.

I got a job in New Plymouth, and renting a place for 6 months, at $390/week

 

As a matter of interest, can you tell us, if not too personal, if you considered renting out your place to keep a foot on the property ladder in a main centre?


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  #2486173 19-May-2020 11:29
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quickymart:

 

But there is a housing shortage, isn't there? 

 

 

BNZ economists are predicting an oversupply of houses in the next 12-24 months, driven mostly be reduced immigration. When you add 70,000 people a year to your population, they need to live somewhere. When they stop coming, we don't need as many houses. We need to look at things regionally though because some areas like Queentown will be hit harder than Wellington for example. 


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