New Zealand real estate prices

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

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#3408803 30-Aug-2025 14:18

eracode:

tweake:

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

That’s simply incorrect.

In a previous life I worked in banking and know a bit about residential mortgage lending. Anyone doing what you claim would almost always borrow to do so. The number of borrowers buying to ‘flip’ is minuscule.

Apart from that, in personal experience in ~55 years as an adult, thinking about everyone I’ve known who has bought and sold houses, I’ve never known anyone to do this. People do buy houses to live in them.

There will be a small number of people who want to flip but not the number implied by your generalisation.

average home ownership was down to 5 years. thats flipping. i would still call the typical nz average of 7 years flipping.

mattwnz

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#3408804 30-Aug-2025 14:39

tweake:

cddt:

My parents have made it clear I should expect nothing when they die, I do not expect anything, and will not raise my children to expect anything either.

thats a major problem with nz, and it shows the attitude.

the big difference between the haves and have nots is generational wealth. using the wealth of the last generation to build your own and in turn pass that on so its built on. money makes money.

to many kiwis simply take from the next generation to fund their own lifestyle leaving nothing behind.

Intergenerational wealth, and leaving wealth to future generations of the family is seen an inspirational thing to do, at least in some countries like the US. There are some very big family owned global businesses that have been owned by families for over a century. In NZ it isn’t as much of a thing, but there are still some very old family owned businesses , including farms. Basically if you are born into the families, you are expected to live that lifestyle and work in the business. Also when someone is wealthy, the compound interest effect means that they get more and more wealthy.

mattwnz

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#3408805 30-Aug-2025 14:42

Senecio:

cddt:

My parents have made it clear I should expect nothing when they die, I do not expect anything, and will not raise my children to expect anything either.

I will be very dissapointed if my parents leave me anything. Sounds like they are listening as they are off on another cruise next week. I only ask that they don't leave me any bills!

IANAL But I understand their unpaid bills and debts would be taken out of their remaining estate and if they have nothing left, then that would be the end of it.

mudguard

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#3408806 30-Aug-2025 14:44

tweake:

average home ownership was down to 5 years. thats flipping. i would still call the typical nz average of 7 years flipping.

So what kind of profit is being made with a 5 year turnover, agent and lawyer fees each time it's being sold less the cost of servicing in the meantime? Less moving costs and so on.

It will be absolutely minimal.

tweake

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#3408813 30-Aug-2025 16:07

mudguard:

So what kind of profit is being made with a 5 year turnover, agent and lawyer fees each time it's being sold less the cost of servicing in the meantime? Less moving costs and so on.

It will be absolutely minimal.

no idea of net profits, but it must be enough that they keep doing it. but then again look at the increase in house prices, especially at the bottom end.

Handle9

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#3408815 30-Aug-2025 16:11

tweake:

mudguard:

So what kind of profit is being made with a 5 year turnover, agent and lawyer fees each time it's being sold less the cost of servicing in the meantime? Less moving costs and so on.

It will be absolutely minimal.

no idea of net profits, but it must be enough that they keep doing it. but then again look at the increase in house prices, especially at the bottom end.

So in summary. You are extrapolating an entire market model from a single data point. This market model is based on profit motive but you don’t have any idea on the net profit.

The vast majority of people on this thread don’t know anyone who changed houses for “profit” but know many who changed houses as their circumstances changed.

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mudguard

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#3408819 30-Aug-2025 16:22

tweake:

no idea of net profits, but it must be enough that they keep doing it. but then again look at the increase in house prices, especially at the bottom end.

But you have to consider that the seller has to then buy again in the same market. Unless they are consistently downsizing or moving towns which obviously isn't possible multiple times.

If you buy for $500k, sell five years later at $625k, where are you buying? With the requirement of two salaries to pay a mortgage, then the risk of redundancy or even a job change might mean a sale.

eracode

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#3408820 30-Aug-2025 16:37

Tweake:

average home ownership was down to 5 years. thats flipping. i would still call the typical nz average of 7 years flipping.

Flipping involves buying with the specific intention of reselling quickly, often after making value-adding improvements (renovations, repairs, or even just cosmetic work) - to realise a profit.

A generally accepted period for this is a few months or up to a year. Seven years is not even close to flipping - it’s people selling and buying homes for lifestyle or other reasons.

Sometimes I just sit and think. Other times I just sit.

tweake

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#3408875 30-Aug-2025 17:21

mudguard:

tweake:

no idea of net profits, but it must be enough that they keep doing it. but then again look at the increase in house prices, especially at the bottom end.

But you have to consider that the seller has to then buy again in the same market. Unless they are consistently downsizing or moving towns which obviously isn't possible multiple times.

If you buy for $500k, sell five years later at $625k, where are you buying? With the requirement of two salaries to pay a mortgage, then the risk of redundancy or even a job change might mean a sale.

this is where you play the RE game. its usually a move up the property ladder. move to a house you think will go up in value or you can do something to it to increase its value. buying in the same market is not really an issue, as long as the step is up. if there is no step up, you sit and wait until there is, but thats another conversation.

yes there is risks. especially if you over extend and can't sit and wait. but most of the time the risk is small. even the gfc was just a blip, prices bounced right back and continued like nothing had happened.

tweake

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#3408877 30-Aug-2025 17:29

eracode:

tweake:

average home ownership was down to 5 years. thats flipping. i would still call the typical nz average of 7 years flipping.

Flipping involves buying with the specific intention of reselling quickly, often after making value-adding improvements (renovations, repairs, or even just cosmetic work) - to realise a profit.

A generally accepted period for this is a few months or up to a year. Seven years is not even close to flipping - it’s people selling and buying homes for lifestyle or other reasons.

thats where i disagree. remember that its a seven year AVERAGE. so there is LOTS of people who sell far sooner than that (as other people have owned the same house for 40-50 years).

also what happened in the covid boom when there was lots more profit and soaring house prices, the average dropped to around 5 years. its not just "people moving for lifestyle reasons".

mudguard

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#3408884 30-Aug-2025 18:20

tweake:

this is where you play the RE game. its usually a move up the property ladder. move to a house you think will go up in value or you can do something to it to increase its value. buying in the same market is not really an issue, as long as the step is up. if there is no step up, you sit and wait until there is, but thats another conversation.

I don't think it's really that economical. Here's some back of envelope maths.

Year One buy house 25 year term

$500,000 with $100,000 deposit assuming conservative interest rate of 6% (should really use 8%)

$400,000 loan

After five years sell for

$625,000.

Loan repayments total $126,000

$264,497 equity.

Buy for $781,250 (no point getting something similar)

$516,753 loan over 20 year term

After ten years sell for

$976,562

Loan repayments total $218,428

$536,340 equity

And so on. And that's assuming a 25% increase every five years.

Not including any other costs, insurances, agent fees, moving, lawyer fees.

I'd argue this is probably what a few kiwis do. Move up, owe more, equity increases until they get to the point where they still have a big mortgage but sell and clear it and downsize to another town. Never actually realising the gain until the end.

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eracode

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#3408906 31-Aug-2025 01:54

Tweake:

eracode:

Tweake:

average home ownership was down to 5 years. thats flipping. i would still call the typical nz average of 7 years flipping.

Flipping involves buying with the specific intention of reselling quickly, often after making value-adding improvements (renovations, repairs, or even just cosmetic work) - to realise a profit.

A generally accepted period for this is a few months or up to a year. Seven years is not even close to flipping - it’s people selling and buying homes for lifestyle or other reasons.

thats where i disagree. remember that its a seven year AVERAGE. so there is LOTS of people who sell far sooner than that (as other people have owned the same house for 40-50 years).

In effect you said ‘seven years is flipping’.

It’s demonstrably not - and when you get called out on that, you start talking about shorter periods.

Even with some shorter periods implied by the average duration, the number of sales that would be within the ‘less than a year’ associated with flipping, would be tiny. And certainly nowhere near enough to fit with your sweeping generalisation that (quote) “kiwis buy houses to make short term profit”.

As an indication, assume that the duration of home ownership is normally distributed around a mean (average) of seven years and with 99% confidence limits of zero and, say, 15 years.

The portion of the duration curve that falls between zero and one year - i.e. the period associated with flipping - is approximately 1.5%.

This would mean that about 1.5% of houses are resold within the first year of purchase. Not all of these sales are necessarily flipping ‘for profit’ - some sales will be for other reasons like a deceased estate or a marital breakup. The number of actual flips may well be close to (or less than) 1% - it’s far from common.

Time to get off your hobby horse.

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LookingUp

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#3410392 2-Sep-2025 10:54

From the early 2000's my wife and I grew a small portfolio of rental properties. Over the last few years we've sold them all off, as the financial returns just aren't as good anymore, a couple of problem tenants soured us on the idea, and we're (currently at least) doing a lot better on the stock market. We never really made money out of the rent (you'd be lucky to get 3-5% capital value p.a.), but certainly did ok with capital gains, which was the ONLY thing that made the investment worthwhile beyond a "feel good" for providing affordable social housing.

The point of my post is this - the last house we sold, we sold directly to a developer. We got good money for it because they'd bought the house next door, and the economics of building units across two sections are way better than what can be achieved with a single section. The sale had zero commission, and only a couple of grand for legal. A WINNER.

If we were to go back into rentals (which I can't see at the moment) it would be with an eye to snapping up properties that will be potential development opportunities beyond the bright-line test. Where we are in Christchurch there is plenty of opportunity for this in older suburbs that are undergoing renewal. It would be kind of like Monopoly - try to get at least a couple in a row, and then seek a buyer for the package. Unless going big-time it's not worth developing the properties oneself, as capital gains on that are taxed regardless, it's not a job for the faint hearted, and you're betting on future resale that may or may not be there.

JayADee

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#3410417 2-Sep-2025 13:58

We’re looking around for a place to downsize to after over 20 years in ours.

It’s so far been hard to find anything that suits us. Looking for a small (90-100m2) but tidy freehold 2-3 bedrooms with preferably the ol’ quarter acre section, carport and shed/garage that gets decent sun. Don’t mind a little tidy up needed but nothing structural. Very hard to find something that ticks all that.

Seems to be less competition around so you can take a little more time to look. I suppose that’s one good thing.

I really like my house so we’re not moving unless we find one we like a lot.

cddt

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#3410476 2-Sep-2025 15:38

JayADee:

Looking for a small (90-100m2) but tidy freehold 2-3 bedrooms with preferably the ol’ quarter acre section, carport and shed/garage that gets decent sun. Don’t mind a little tidy up needed but nothing structural.

Sounds exactly like our first home which we sold a couple of years ago.

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