New Zealand real estate prices

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

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#3407035 24-Aug-2025 14:52

mudguard:

Handle9:

Don't apply facts. That would be a scam.

And to be clear, I'm not trying to diminish what is an increasingly more difficult goal, but I'd say 99% of people who buy houses, buy them to live in, not to flip.

It's probably not 99% but certainly for the vast majority of people the primary motivation is to have somewhere to live. Certainly the main reason people sell houses is because they are no longer suitable for their needs, not "profits."

ezbee

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#3407048 24-Aug-2025 15:48

We have seen in China what happens when Housing becomes a primary means of investment, and wealth generation/preservation for the many.

Empty concrete boxes in the sky that become traded value beyond any utility.

The ability to live in them, even their ability to stand up longer than a few trades so inital investors can get their 20% gains, immaterial.

It's less destructive to society if we just go back to Tulip Bulbs.

tweake

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#3407059 24-Aug-2025 17:03

mudguard:

re costs to ownership. It's not like buying an item for $1 and then selling it for $10 down the line. Looking at Westport in particular, if one bought a home twenty five years ago you'd be looking at:

i'm only talking gross profit here. difference between what you buy it for and sell it for, which is exactly what you see mentioned in the media. what costs a person has is entirely up to them which makes net profit impossible to tell.

tweake

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#3407063 24-Aug-2025 17:11

mudguard:

And to be clear, I'm not trying to diminish what is an increasingly more difficult goal, but I'd say 99% of people who buy houses, buy them to live in, not to flip.

well i disagree.

average length of home ownership is very short eg half that of usa. it got even shorter during the covid boom. just simple maths, when the average length of home ownership is down to 5 years, given there is plenty who have lived in the same house for 30-50 years, that means there is a HUGE amount of sub 5 year sales. thats flipping houses. its just so common here we don't call it flipping, its renovate to sell.

sorry but the stats say kiwis buy houses to make short term profit.

Handle9

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#3407064 24-Aug-2025 17:13

tweake:

mudguard:

And to be clear, I'm not trying to diminish what is an increasingly more difficult goal, but I'd say 99% of people who buy houses, buy them to live in, not to flip.

well i disagree.

average length of home ownership is very short eg half that of usa. it got even shorter during the covid boom. just simple maths, when the average length of home ownership is down to 5 years, given there is plenty who have lived in the same house for 30-50 years, that means there is a HUGE amount of sub 5 year sales. thats flipping houses. its just so common here we don't call it flipping, its renovate to sell.

sorry but the stats say kiwis buy houses to make short term profit.

Nah. You are interpreting statistics in a very superficial way to suit your narrative.

mudguard

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#3407080 24-Aug-2025 18:07

tweake:

mudguard:

re costs to ownership. It's not like buying an item for $1 and then selling it for $10 down the line. Looking at Westport in particular, if one bought a home twenty five years ago you'd be looking at:

i'm only talking gross profit here. difference between what you buy it for and sell it for, which is exactly what you see mentioned in the media. what costs a person has is entirely up to them which makes net profit impossible to tell.

Well in the Westport case, $255K profit. Let's all move to Westport!!

You can't really compare the US either. They have lost of land, almost unimaginable amounts.

Their mortgages are generally underwritten by the government.

Their interest rates are often for the term of the loan.

If you can't pay the mortgage, you can leave the keys on the bench and walk away. Bank can't chase you (not 100% on this anymore)

Can't really comment on the length of ownership but if you're circumstances change you might not have a choice but to sell and move. I look at my parents who worked almost for the same employer their whole lives. Longest I've managed is twelve years.

Do you think people can actually stay in one spot with careers likely to change multiple times?

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#3407085 24-Aug-2025 18:24

mudguard:

tweake:

i'm only talking gross profit here. difference between what you buy it for and sell it for, which is exactly what you see mentioned in the media. what costs a person has is entirely up to them which makes net profit impossible to tell.

Well in the Westport case, $255K profit. Let's all move to Westport!!

You can't really compare the US either. They have lost of land, almost unimaginable amounts.

Their mortgages are generally underwritten by the government.

Their interest rates are often for the term of the loan.

If you can't pay the mortgage, you can leave the keys on the bench and walk away. Bank can't chase you (not 100% on this anymore)

Even with all that the US and most of the developed world, has a serious housing affordability problem. Ironically enough New Zealand is going the other way at the moment, largely driven by excess supply and weakening demand.

tweake

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#3407101 24-Aug-2025 19:40

mudguard:

Well in the Westport case, $255K profit. Let's all move to Westport!!

You can't really compare the US either. They have lost of land, almost unimaginable amounts.

Their mortgages are generally underwritten by the government.

Their interest rates are often for the term of the loan.

If you can't pay the mortgage, you can leave the keys on the bench and walk away. Bank can't chase you (not 100% on this anymore)

Can't really comment on the length of ownership but if you're circumstances change you might not have a choice but to sell and move. I look at my parents who worked almost for the same employer their whole lives. Longest I've managed is twelve years.

Do you think people can actually stay in one spot with careers likely to change multiple times?

well west coast has had the single biggest increase while almost every other part of nz is going down., so people with money are moving there.

with USA that makes your case worse. they have huge amounts of land that you can move anywhere, but they don't. but they also have a form of cgt. in particular you pay high rate of tax if you sell under 2 years.

about the employer, your not making your case well here. if you moved for work after 12 years, well thats double the average for change of house.

i used to be a tradie and did a fair bit of repeat business. customer would move ever few years. often it was just down the road, or across town. same job etc, they just climbed the ladder when they could. i don't have stats but at a guess i would say on average kiwis change houses more than they change jobs. it would be interesting to see the actual stats on it.

keep in mind we are talking averages, there has to be a lot of people changing houses a lot of times to bring the average down that much to offset those who only move one in 12 years etc.

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#3407103 24-Aug-2025 19:48

mudguard: 99% of people who buy houses, buy them to live in, not to flip.

You could say the same about marriage, but we know how that usually works out.

tweake

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#3407104 24-Aug-2025 19:52

Handle9:

Even with all that the US and most of the developed world, has a serious housing affordability problem. Ironically enough New Zealand is going the other way at the moment, largely driven by excess supply and weakening demand.

yes a bit but sort of no.

nz still has a serious affordability problem and house prices would still need to drop at least another 20% to even think of fixing that. but we have excess supply because almost no one is buying, because most of the money used for buying homes comes from the profit made from their house sale. not many are working to pay for their new home. most people are just sitting and waiting to get the price they want, which doesn't solve the issue even if there is cheap new homes being sold below cost. why buy a home that costs you money when sitting in your old one will make you money.

this is why "supply side fix" is completely laughable. its just pretending to fix a problem they don't want fixed.

also of interest is rentals, which follows housing. there is reportedly a very large number of houses up for rent at the moment but pricing has decreased very little.

home and rentals sit and wait untill demand makes people desperate enough to pay the price.

Handle9

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#3407109 24-Aug-2025 20:10

kingdragonfly:
mudguard: 99% of people who buy houses, buy them to live in, not to flip.

You could say the same about marriage, but we know how that usually works out.

Generally very well.

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#3407110 24-Aug-2025 20:13

tweake:

with USA that makes your case worse. they have huge amounts of land that you can move anywhere, but they don't. but they also have a form of cgt. in particular you pay high rate of tax if you sell under 2 years.

Nothing you’ve written here makes the cases worse, particularly in the US where massive amounts of housing stock has been acquired by private equity

mudguard

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#3407112 24-Aug-2025 20:23

tweake:

Even with all that the US and most of the developed world, has a the money used for buying homes comes from the profit made from their house sale. not many are working to pay for their new home. most people are just sitting and waiting to get the price they want, which doesn't solve the issue even if there is cheap new homes being sold below cost. why buy a home that costs you money when sitting in your old one will make you money.

How do people pay their mortgage while they wait for gains?

You realise that part of the "profit" will have been their original deposit at some point?

This has come up before. I have no desire to be involved in any kind of build process. Plus financing is different for Turn Key builds. It's not as straightforward as buying an existing house.

Someone buys for $500k, they need $100k of their own money.

Sit in it for a year. Sell somehow for $600k. Mortgage repayments for that year is $31,000. Less the agent fee. Less capital gains. Moving costs. Etc etc.

Scott3

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#3407122 24-Aug-2025 22:21

mudguard:

Handle9:

Don't apply facts. That would be a scam.

And to be clear, I'm not trying to diminish what is an increasingly more difficult goal, but I'd say 99% of people who buy houses, buy them to live in, not to flip.

We know from statistics that roughly 25% of house purchases are by mortgaged, multi-property owners.

https://www.rnz.co.nz/news/business/570706/return-of-the-smaller-scale-property-investor

These will be largely investors (perhaps there are the odd person who gets a bach or city pad for their one use, but there are also people who buy an investment property without a mortgage).

Then add in owner occupier property, where people justify paying a large amount as the house doubles as their retirement plan etc.

Handle9

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#3407123 25-Aug-2025 00:09

Scott3:

mudguard:

And to be clear, I'm not trying to diminish what is an increasingly more difficult goal, but I'd say 99% of people who buy houses, buy them to live in, not to flip.

We know from statistics that roughly 25% of house purchases are by mortgaged, multi-property owners.

https://www.rnz.co.nz/news/business/570706/return-of-the-smaller-scale-property-investor

These will be largely investors (perhaps there are the odd person who gets a bach or city pad for their one use, but there are also people who buy an investment property without a mortgage).

Then add in owner occupier property, where people justify paying a large amount as the house doubles as their retirement plan etc.

If it was all about house flipping those numbers would be much higher. Around 1 in 3 New Zealanders rent, which has slowly increased over many years, so across the market you would expect at least 1 in 3 buyers to be investors to keep rental stocks at the current level.

This suggests that buy and hold is the strategy pursued by investors rather than flipping. If it was all about profits investors would be all over house flipping.

The whole point here is that there is quite a lot of complexity to the housing market as opposed to a very simplistic view which gets parroted by one person.

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