New Zealand real estate prices

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Forums › Finance and wealth management › New Zealand real estate prices

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#3405678 19-Aug-2025 17:14

Earbanean:

mattwnz:

That is another reason why tying rates / services to property values is a poor way to do it IMO. IF you let your property get run down and you don't improve it, you can end up paying less in rates. Instead more uniform charging and more user pays. for example water charges are a good way to bill for water. It isn't hard these days to work out how many people live in a particular house, or city, and bill per person.

You're basically proposing a poll tax, ala Margaret Thatcher in the UK back in the day. It wasn't too popular. People seemed to think a Lord and his wife, living in a Mayfair mansion, maybe shouldn't pay a fraction of the rates or two families jammed into a squalid flat in Brixton.

Yup. He wants to transfer wealth from people with no assets to people with lots of assets.

Handle9

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#3405679 19-Aug-2025 17:18

mudguard:

mattwnz:

That is another reason why tying rates / services to property values is a poor way to do it IMO. IF you let your property get run down and you don't improve it, you can end up paying less in rates. Instead more uniform charging and more user pays. for example water charges are a good way to bill for water. It isn't hard these days to work out how many people live in a particular house, or city, and bill per person.

I'm not sure the council are assessing individual houses though. If your house is a bomb in a nice street I don't think your rates will reflect the condition.

It’s usually a robovaluation based on section size, number of bedrooms etc. The council aren’t running around knocking $20k off a houses value because Jim didn’t paint it this year.

Gordy7

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#3405685 19-Aug-2025 17:53

How is this for a slide?

3 BR house with integral double garage CV $440k

Quotable Value estimated market value.

28 July $520k

4 August $480k

18 August $425k

Just when I want to sell.

Gordy

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#3405710 19-Aug-2025 19:47

kingdragonfly:

The average Auckland house value has decreased by approximately 22.35% in 4 years.

very quickly before i crawl into bed,

averages don't mean a whole lot. recently a spin story was put out about how its good for first home buyers because the average house price is lower. however fhbers generally don't buy average priced houses, hence why its re spin. what really matters is the spread of prices. how wide is the bell curve. entry level homes, ie fhber homes, got pushed way up in price. why that matters? you need fhbers to buy houses to get the property ladder moving, better yet get them to overspend so you can make profit. the market is not going to move until fhbers either earn a LOT more income or entry level homes come way down in price.

but the beauty of the housing market is people can just sit and wait.

mattwnz

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#3405730 19-Aug-2025 22:49

Handle9:

Yup. He wants to transfer wealth from people with no assets to people with lots of assets.

No, and that is just your incorrect assumption The current system is unfair and doesn’t reflect the actual use of services. People who have decided to live in a new healthier home end up paying more in rates. Despite putting less load on the health system as a result of living in a healthier home. Councils have become bloated expensive entities. Even the government wants this to change by restricting rates rises. The current system benefits landlords who often have lower priced houses so pay less in rates, despite running a business . Some councils realise this and it’s why some now charge additional rates for things such as if it is used as an airbnb , or charge extra for extra toilets. Something has to change because the current system isn’t sustainable with the rises people are facing each year.

Handle9

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#3405731 19-Aug-2025 22:59

It’s not an assumption. It’s the actual impact that your proposed change would have.

Rates are a form of taxation and it’s entirely fair that wealthier people pay more than poor people.

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#3405749 20-Aug-2025 07:03

Handle9:

It’s not an assumption. It’s the actual impact that your proposed change would have.

Rates are a form of taxation and it’s entirely fair that wealthier people pay more than poor people.

So should expensive new cars pay a higher RUC rate than heavy old clunkers?

cddt

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#3405750 20-Aug-2025 07:11

kingdragonfly:

I don't want to get to exact, as he's already pretty grumpy.

I'd be too if I had the equivalent to a lotto win vanish.

But he hasn't had any money vanish, he had one house and now he still has one house. Denominated in the unit of account he actually has ("nice houses in Mt Albert") his balance was one and remains one.

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#3405753 20-Aug-2025 07:20

The problem I have with rates vs poll tax is accountability and the taxation without representation argument. Councils that can’t meet their budget can either reduce spending or just put up rates. Everyone can vote in the local body elections but only property owners pay the rates. Because voters are not the same as ratepayers Councils lack a signal to consider not building expensive vanity projects, rainbow illuminated toilet blocks, six figure bike racks etc. Yes I’m looking at you, Wellington City.
Why don’t rental agreements include a clause to identify the rates component of rent (and pass on increases) so the tenants have visibility of the actual impact rates have on them?

kingdragonfly

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#3405759 20-Aug-2025 08:23

cddt:
kingdragonfly:

I don't want to get to exact, as he's already pretty grumpy.

I'd be too if I had the equivalent to a lotto win vanish.

But he hasn't had any money vanish, he had one house and now he still has one house. Denominated in the unit of account he actually has ("nice houses in Mt Albert") his balance was one and remains one.

When a house decreases in value, it 's not just a loss on paper. There is a real financial impact that comes with a lower valuation.

A lower valuation directly cuts into your equity, the difference between what you owe on the mortgage and what the property is worth. This reduces your overall net worth and can even erase equity entirely if the market falls far enough.

For homeowners close to being “underwater”, owing more than the house is worth, this has immediate implications for financial security. Also home equity is often used to secure refinancing, home equity loans, or lines of credit.

A homeowner with high equity has optionality: they can sell, refinance, or borrow against the property.

Even if it's just a loss on paper, people adjust their spending and investment habits based on perceived wealth. A decline in housing value impact is not just psychological.

There's always a chance of an unexpected need to sell: job loss, relocation, medical bills, divorce. A lower home valuation increases the risk that forces you to lock in the loss. That risk is present the moment the value falls, regardless of whether you plan to sell now.

In practical terms, the loss already exists. It just hasn’t been crystallized into a transaction yet.

ANglEAUT

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#3405788 20-Aug-2025 09:23

mattwnz: ... Even the government wants this to change by restricting rates rises. ...

IMO, the governmant is just trying to win more voters by saying they want to restrict rate rises.

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#3405804 20-Aug-2025 10:56

johno1234:

So should expensive new cars pay a higher RUC rate than heavy old clunkers?

Australia has a luxury car tax ... road user charge is road user charge.

you'd pay 33% tax on every dollar above 80-90k purchase price of the car.

sen8or

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#3405805 20-Aug-2025 10:57

kingdragonfly:

When a house decreases in value, it 's not just a loss on paper. There is a real financial impact that comes with a lower valuation.

A lower valuation directly cuts into your equity, the difference between what you owe on the mortgage and what the property is worth. This reduces your overall net worth and can even erase equity entirely if the market falls far enough.

For homeowners close to being “underwater”, owing more than the house is worth, this has immediate implications for financial security. Also home equity is often used to secure refinancing, home equity loans, or lines of credit.

A homeowner with high equity has optionality: they can sell, refinance, or borrow against the property.

Even if it's just a loss on paper, people adjust their spending and investment habits based on perceived wealth. A decline in housing value impact is not just psychological.

There's always a chance of an unexpected need to sell: job loss, relocation, medical bills, divorce. A lower home valuation increases the risk that forces you to lock in the loss. That risk is present the moment the value falls, regardless of whether you plan to sell now.

In practical terms, the loss already exists. It just hasn’t been crystallized into a transaction yet.

Technically not wrong, but doesn't take into account that people buying and selling in the same market are victims (or winners) of the same market conditions. A decline in one house price in a market fall is likely to be matched (more or less) by a decline in another house price, so whilst they may take a loss on selling their house, the house they are likely to buy is also cheaper than they might otherwise pay resulting in a net equal position (+/- depending on other factors).

Agree on the psychological effect on paper declines in values. As a vehicle retailer, we notice significant changes to buyers willingness to spend when they feel rich.

cddt

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#3405821 20-Aug-2025 11:43

kingdragonfly:

A lower valuation directly cuts into your equity, the difference between what you owe on the mortgage and what the property is worth. This reduces your overall net worth and can even erase equity entirely if the market falls far enough.

But the council's "valuation" has nothing to do with the valuation the bank uses to assess your equity. Any valuation, even the ones used by the banks (they outsource this), is an estimate. But everyone knows the council's valuation bears little relation to the price a home will actually sell for.

kingdragonfly:
For homeowners close to being “underwater”, owing more than the house is worth, this has immediate implications for financial security. Also home equity is often used to secure refinancing, home equity loans, or lines of credit.

I would imagine that someone with a $5m+ house isn't anywhere near close to being underwater.

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Handle9

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#3405859 20-Aug-2025 14:55

johno1234:

The problem I have with rates vs poll tax is accountability and the taxation without representation argument. Councils that can’t meet their budget can either reduce spending or just put up rates. Everyone can vote in the local body elections but only property owners pay the rates. Because voters are not the same as ratepayers Councils lack a signal to consider not building expensive vanity projects, rainbow illuminated toilet blocks, six figure bike racks etc. Yes I’m looking at you, Wellington City.
Why don’t rental agreements include a clause to identify the rates component of rent (and pass on increases) so the tenants have visibility of the actual impact rates have on them?

There is no taxation without representation argument with council. Everyone can vote for the council so there is near universal representation.

What you seem to have a problem with is representation without taxation.

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