catwoman1974 wrote:

That's the joke of the century - crash in the property market

The shows still in full swing, the curtains are ready to drop but the crowds still applauding. Its only been 6 years since bottom of the last fall here. $310,000 to $220,000. A slower ride down for that one, next time?, we will see.

mkr_ahearn - 2021-03-13 12:13:00

REINZ chief executive Bindi Norwell said it was likely that February’s housing data would make difficult reading for all the renters and first home buyers who one day hoped to purchase a property.

“It’s highly likely that some of this uplift can be attributed to both investors and owner-occupiers looking to purchase ahead of the LVR [loan-to-value ratio] restrictions coming back into effect in March and the slight uplift in listings we’ve seen over the last couple of months.”

Alexander’s most recent joint survey with the Real Estate Institute revealed that agents were already seeing an easing in the rate at which new investors were entering the market.

While a net 15 per cent of agents reported seeing more investors, that figure was down from 31 per cent in February and a net 45 per cent in December. The peak was a net 59 per cent in November.

Alexander said this supported the view that reintroduction of the LVRs for investor borrowers was curtailing some property demand and starting to skew the market towards owner-occupiers.

But it was very early days yet, he said. “It would not be possible on the basis of these results to conclude that the housing markets around New Zealand are going to flatten out substantially in the near future.

“There is merely evidence of some frenzy washing away.”

Meanwhile, the most recent QV Quartile Index suggested that competition between investors and first-home buyers at the lower end of the market in Auckland and Wellington was waning.

Auckland home flipped for $755,000 profit in seven months

With a headline like this, who does not want to be a buyer of property?

Investors vs FHB
The older ones have the equity and the time.

Speaking at the 2021 New Zealand Economics Forum at Waikato University, Orr said easy money policies from central banks around the world had been a factor in the spike in share prices and the sharp rises in house prices as people made the most from low interest rates.

And what has the RBNZ done to house prices?

aklreels - 2021-03-15 09:29:00

aklreels wrote:

From the internet
"Economist Brian Easton says building more houses will not reduce house prices by much; house prices will boom until speculation based on leveraged borrowing is addressed"

LACK OF PROPERTIES FOR SALE IS PUTTING PRESSURE ON HOUSE PRICES & SPEEDING UP SALES
As the total pool of properties available for sale in New Zealand falls to record lows, this is continuing to put pressure on house prices, with the country seeing a new record median house price for the fourth month in a row according to the latest data from the Real Estate Institute of New Zealand (REINZ), source of the most complete and accurate real estate data in New Zealand.

Reserve Bank to reimpose LVRs for first home buyers, property investors from 1 March
Lending to property investors would be limited to no more than 5 percent with less than a 30 percent deposit, which would rise to 40 percent from May.

RBNZ deputy governor Geoff Bascand said there was evidence of speculation and growth in heavily indebted people, which would threaten financial stability if there was a sharp housing downturn.

The LVRs were suspended at the start of the pandemic to ease the pressure on banks.

"Since then, in part due to the success of the health and economic policy responses, we have witnessed a rapid acceleration in the housing market, with new records being set for the national median price, and new mortgage lending continuing at a strong pace," Bascand said.

"We are now concerned about the risk a sharp correction in the housing market poses for financial stability. There is evidence of a speculative dynamic emerging with many buyers becoming highly leveraged."

Off-site building manufacturer Concision and house building company Versatile Pukekohe have announced they recently built a four bedroom, two bathroom house, in just 10 weeks from start to finish.

The house was built from 43 prefabricated panels manufactured in Concision’s Rolleston factory over two days. They were then delivered to the Franklin site and installed in a single day.

Ive worked on those buildings, they are crap, in my opinion.
Sure if the average person walked in when finished they wouldnt know the differance, but if youve been in the building trade for a while you would see the things that put me off

nzshooter01 - 2021-03-16 12:44:00

nzshooter01 wrote:

Ive worked on those buildings, they are crap, in my opinion.
Sure if the average person walked in when finished they wouldnt know the differance, but if youve been in the building trade for a while you would see the things that put me off

Mate works on building sites in Auckland, for quite a while on a mix of private sales and Kiwibuild. Same conclusion as you wrt Kiwibuild quality. The difference not obvious unless you know what to look for. Not saying a problem necessarily. Just saying!

artemis - 2021-03-16 15:26:00

LeakyBuild

funkydunky - 2021-03-16 19:08:00

Snippets from the internet

The Green Party wants to see new measures introduced to bring down house prices and engineer a “soft landing” for the housing market, calling for restrictions on equity being used to buy additional properties.

The change would stop existing homeowners from using just the equity in their home to buy a second or third house – either for themselves or for another family member – and stymie anyone without a cash deposit.

The party is also calling for the “Bright Line Test” timeframe to be extended indefinitely – essentially creating a capital gains tax – meaning anyone selling a home that is not their main home would see a hefty tax bill.

The Green Party laid out its proposals for reining in the overheated housing market ahead of the Government’s announcement of its housing policy , which is expected next week and will likely be much more cautious.

The national median house price has increased by 23 per cent in the last year to sit at a record high of $780,000, according to latest Real Estate Institute data. The median price in Wellington and Auckland now exceeds $1m.

House prices, Prime Minister Jacinda Ardern said, cannot keep increasing at the rate they are.
When asked about the issue in the Beehive, Ardern insisted access to homes for first-home buyers was important, she had concerns about affordability, and that the Reserve Bank had the tools to impact the market.

The new owner of a townhouse in Northcote that featured on The Block NZ has been quoted $7500 for tiling fixes to make three of its four bathrooms useable.

The Auckland property, which was completed in 2017 on season six of the reality television series by twins Ali and Julia Heaney, has had one owner since then. It became a $1200 per week rental at the beginning of last year.

The man who bought the four-bedroom house at auction for $1.52 million last fortnight said a builder's report had identified the sealant in the family and guest bathrooms as a “significant defect” – but he didn’t realise the extent of the damage until he brought a tiler round.

aklreels - 2021-03-17 09:37:00

I'm not sure how they would police the 'drawing equity from their existing home' bit. What's to stop a bank from letting you draw down a couple of hundred grand to buy a 'yacht' only for the money to be used to buy a rental instead?

apollo11 - 2021-03-17 10:31:00

Let's just avoid addressing the actual problem some more.
Can the Government fix a problem of it's own making?
Will they reduce taxes and red tape that makes renting and building so expensive? Will HNZ stop buying existing FHB properties at full price?
Nope and no way, José.
Let's blame those mysterious never seen "speculators" and kick the can down the road some more.

Edited by pcle at 12:38 pm, Wed 17 Mar

pcle - 2021-03-17 12:37:00

apollo11 wrote:

I'm not sure how they would police the 'drawing equity from their existing home' bit. What's to stop a bank from letting you draw down a couple of hundred grand to buy a 'yacht' only for the money to be used to buy a rental instead?

You can't. A typical case of shortsightedness from the Greens

loose.unit8 - 2021-03-17 14:47:00

Richard Prebble - how to fix the housing crisis - https://www.nzherald.co.nz/business/richard-prebble-how-to-f
ix-the-housing-crisis/KQOKXF7OC2AFLQ6GX35DJ75ZKE/

loose.unit8 - 2021-03-17 14:50:00

Modern homes have a much shorter lifespan than many of their owners appreciate, construction law expert Tanya Wood says.

Wood says the construction scene is an "industry of disputes", based on cases she has dealt with in the courts about building materials and the way they were installed.

"When I commute to work and see all the new subdivisions on my way, I ask myself how many homeowners know they might be facing re-cladding and other replacements within 15 years.

A “palatial” award-winning Wellington house was demolished earlier this month after developing leaky building issues.

The house in the suburb of Northland, built in 2001, won the 2003 New Zealand Institute of Architects’ Supreme Award.

Former owner Margot Neas, who commissioned the building from Parsonson Architects with her ex-husband, said the house was “spaghetti” by the time she sold it to a property developer late last year.

She said an invasive building test showed moisture had got into the timber framing, despite her spending $200,000 on remediation.

aklreels - 2021-03-18 16:37:00

House prices are buoyant, sellers can ask for their price. Only a few weeks ago, there were so few listings that I could not find anything. As if most are holding to sell at a higher price next month.
Has the frenzy of summer abated, or at least there are open homes that I can view now.
Auctions are usually in mid week, in a few heart wrenching minutes (or even seconds), its $50,000 above my budget.
Try price by negotiation, and its $200,000 above GV, some $50,000 above the price of a new build.
Will I buy a character house, a 1930s or so? Don't know anything about them. On the plus side, location and land vs old building needing TLC.
Or build sleeping pods in a gated community with shared living and cooking amenities.

aklreels - 2021-03-22 09:23:00

aklreels wrote:

House prices are buoyant, sellers can ask for their price. Only a few weeks ago, there were so few listings that I could not find anything. As if most are holding to sell at a higher price next month.
Has the frenzy of summer abated, or at least there are open homes that I can view now.
Auctions are usually in mid week, in a few heart wrenching minutes (or even seconds), its $50,000 above my budget.
Try price by negotiation, and its $200,000 above GV, some $50,000 above the price of a new build.
Will I buy a character house, a 1930s or so? Don't know anything about them. On the plus side, location and land vs old building needing TLC.
Or build sleeping pods in a gated community with shared living and cooking amenities.

They are building next door, house will cost between 1 and 1.3 million just to build. Size is around 200m2 on a flat section. So 5 to 6k per square meter. That's for a high quality, architecturally designed house though.

apollo11 - 2021-03-22 09:41:00

aklreels wrote:

....
Or build sleeping pods in a gated community with shared living and cooking amenities.

Not a bad idea, but if rented would either be classed as a boarding house or fall under the Residential Tenancies Act. Both with rules / costs / risks for Africa.

Not to worry, the taxpayer is going to build more and more subsidised housing as soon as they find a few builders that haven't yet worked out there is more money at the higher end. Or Australia,

leonhouses - 2021-03-22 10:11:00

aklreels wrote:

House prices are buoyant, sellers can ask for their price. Only a few weeks ago, there were so few listings that I could not find anything. As if most are holding to sell at a higher price next month.
Has the frenzy of summer abated, or at least there are open homes that I can view now.
Auctions are usually in mid week, in a few heart wrenching minutes (or even seconds), its $50,000 above my budget.
Try price by negotiation, and its $200,000 above GV, some $50,000 above the price of a new build.
Will I buy a character house, a 1930s or so? Don't know anything about them. On the plus side, location and land vs old building needing TLC.
Or build sleeping pods in a gated community with shared living and cooking amenities.

trust me, you never truly know how odd/difficult/weird people are until you have lived in a community with shared facilities/land

lakeview3 - 2021-03-22 10:36:00

apollo11 wrote:

They are building next door, house will cost between 1 and 1.3 million just to build. Size is around 200m2 on a flat section. So 5 to 6k per square meter. That's for a high quality, architecturally designed house though.

did you see post 61? It was an award winning architecturally designed house and they just demolished it.

lakeview3 - 2021-03-22 10:38:00

aklreels wrote:

House prices are buoyant, sellers can ask for their price. Only a few weeks ago, there were so few listings that I could not find anything. As if most are holding to sell at a higher price next month.
Has the frenzy of summer abated, or at least there are open homes that I can view now.
Auctions are usually in mid week, in a few heart wrenching minutes (or even seconds), its $50,000 above my budget.
Try price by negotiation, and its $200,000 above GV, some $50,000 above the price of a new build.
Will I buy a character house, a 1930s or so? Don't know anything about them. On the plus side, location and land vs old building needing TLC.
Or build sleeping pods in a gated community with shared living and cooking amenities.

anything pre 1970. After that it’s pot luck.

lakeview3 - 2021-03-22 10:39:00

leonhouses wrote:

Not a bad idea, but if rented would either be classed as a boarding house or fall under the Residential Tenancies Act. Both with rules / costs / risks for Africa.

Not to worry, the taxpayer is going to build more and more subsidised housing as soon as they find a few builders that haven't yet worked out there is more money at the higher end. Or Australia,

Cruise ships have their cabins built as external modules which are then slotted into place. Lots of cruise ships being scrapped right now, buy up a shipload of modules dirt cheap and chuck them under a roof lol.

apollo11 - 2021-03-22 10:41:00

"D-day for the Government's plan to fix housing, with few easy options"

aklreels - 2021-03-23 07:59:00

aklreels wrote:

"D-day for the Government's plan to fix housing, with few easy options"

What's the bet?
More taxes.
More bans.
More it's those mysterious speculators (who's seen one of those mystical beasts?).
Higher rents.
A lot more blah, blah, blah, ideology and virtue signaling.
But no response to the real problem of too much regulation and too much tax.

pcle - 2021-03-23 08:08:00

aklreels wrote:

"D-day for the Government's plan to fix housing, with few easy options"

wonder if they will extend Nationals capital gains tax on housing?

sparkychap - 2021-03-23 08:18:00

sparkychap wrote:

wonder if they will extend Nationals capital gains tax on housing?

It looks like tax deductibility will be going too which is a good thing.

cassina1 - 2021-03-23 09:10:00

Excellent! More tax for tenants to pay.
Rents going up.

pcle - 2021-03-23 09:13:00

pcle wrote:

Excellent! More tax for tenants to pay.
Rents going up.

It will be the government's responsibility to house those who are unable to afford to buy, more generations locked into dependency on the way.

apollo11 - 2021-03-23 10:42:00

"Housing crisis: $3.8b housing package unveiled; Speculators to be stung by bright-line test extension"

aklreels - 2021-03-23 10:55:00

'This is crazy' - landlords react
Andrew King, NZ Property Investors Federation president was taken aback by the Government decision to eliminate interest rate tax deductions, which investors can currently claim on properties.

aklreels - 2021-03-23 10:58:00

The plan contains a plethora of new initiatives:

• $3.8b for accelerating housing supply
• First Home Grant caps lifted, as well as higher house price caps
• Bright-line test doubled from 5 to 10 years
• Interest deductibility loopholes scrapped
• Govt to offer Kāinga Ora $2b loan to scale up land acquisition
• The Apprenticeship Boost scheme extended

aklreels - 2021-03-23 11:00:00

"The Government has taken a gutsy approach to tackling the housing crisis - the days of highly leveraged property investment are likely over, Greg Ninness says"

aklreels - 2021-03-23 11:10:00

So (coincidentally) all the houses at the bottom of the market have just this morning increased to whatever the increased cap is.

Edited by loose.unit8 at 11:18 am, Tue 23 Mar

loose.unit8 - 2021-03-23 11:18:00

"Deductions will not be allowed on properties bought after March 27 from October 1. The amount that can be claimed on properties bought earlier will be reduced to zero over a period of four years.

ANZ chief economist Sharon Zollner said that was a “massive” for the Government, because it was risking upsetting a large voting base.

NZ Property Investors Federation president Sharon Cullwick said she estimated that the deductibility change would mean an extra $6000 a year in tax for the owner of a $600,000 house. But as interest rates rose, that amount would increase.

aklreels - 2021-03-23 11:49:00

$6K / 52 weeks = $115pw+ increase in rent.
That'll be nice. Great to see tenants paying that much more tax.

Just remember - that big rent increase isn't going to the owner - it's just straight tax.

Edited by pcle at 12:01 pm, Tue 23 Mar

pcle - 2021-03-23 11:53:00

REINZ
"We understand what the government is trying to achieve by extending the bright-line test to 10 years, however, we don’t believe this will be a magic bullet in terms of solving New Zealand’s housing affordability issues and nor will it do anything to increase the supply of houses.

"In actual fact, what it’s likely to lead to is residential property investors holding on to their properties for even longer in order to avoid paying tax, thereby further reducing the total pool of properties available in the market.

"We were surprised by the announcement around changes to interest deductions on residential property income as this will completely change the financial dynamics of investing in residential property. Currently you can use the interest deductions as a legitimate property cost, however, this will no longer be allowed from 1 October this year.

"In our view, people are likely to already be wary about investing in rental property given the changes to the RTA and the prior removal of ring fencing, however, this is likely to exacerbate concerns around investing in rental property and may see investors considering whether they can get better returns elsewhere.

"Many landlords are likely to increase their rent in the coming years as they look to offset the costs, thereby making rentals even more unaffordable than they are currently and making it even harder for renters to save a deposit for their own property. There is also a chance that a handful of unscrupulous landlords might look to even profit from the situation.

aklreels - 2021-03-23 14:16:00

But Sharon Zollner, ANZ’s chief economist, said the changes announced meant that might fall back to something “more normal” a bit more quickly than would otherwise be the case. “We’re unlikely to see house price falls on the back of this, although the risk of that has increased.”
Paul Conway, BNZ’s chief economist said “every little bit” would work to cool the housing market but this would not be sufficient to address the core problems.
Kiwibank chief economist Jarrod Kerr said the moves would take some heat out of the market. A slowdown in the second half of this year had already been expected due to the reintroduction of loan-to-value restrictions. “Today is another kick to investors.”
He said the deductibility change could mean a big bill for people with a large portfolio of investment properties, and could affect their ability to buy more. “It will definitely cool the market from an investor point of view. Will it cause house prices falls? I don’t think so with the housing shortage we still have in place.”
Infometrics economist Brad Olsen said the changes could help house price inflation slow to single digit percentages by the end of the year.

aklreels - 2021-03-23 17:51:00

aklreels wrote:

'This is crazy' - landlords react
Andrew King, NZ Property Investors Federation president was taken aback by the Government decision to eliminate interest rate tax deductions, which investors can currently claim on properties.

what’s crazy was them being allowed to do it in the first place.

lakeview3 - 2021-03-23 17:57:00

lakeview3 wrote:

what’s crazy was them being allowed to do it in the first place.

Why? Interest is a deductible expense for any other business.

wachael1 - 2021-03-23 17:59:00

National leader Judith Collins is accusing the Government of flat out lying to New Zealanders about the extension of the bright-line test.

"They have lied to New Zealanders – New Zealanders just can't trust what they are told by the Government," she told media this morning.

Labour’s plan is another cheap swipe at landlords. By removing interest deductions & doubling the brightline test, fewer houses will be built, fewer houses will be available for rent, rents will increase, & more kids will grow up in motels. Another Labour Fail.

However, Kiwibank chief economist Jarrod Kerr said the policy changes simply “tinkered at the edges”, and were not enough to address the systemic supply issues that have caused New Zealand’s house prices to soar beyond the reach of many.

“It was pretty disappointing to be honest. Some of the ideas are good, but the size is pathetic. It’s a drop in the bucket and it’s a leaky bucket at that.”

While Kerr said these new changes would indeed discourage property speculation, demand wasn’t the problem. It is already incredibly hard to speculate on property in New Zealand, he said.

Waikato University economics professor Frank Scrimgeour has slammed the Government's housing announcement, saying it doesn't address the fundamental issue which is driving house prices up: lack of supply.
Prof Scrimgeour said he expects the Government's ideas will only help a modest amount of Kiwis.

The New Zealand Property Investors Federation says the changes won't fix the housing market and will instead worsen the rental crisis.

Speaking to Newshub on Tuesday, federation chief executive Sharon Cullwick argued a large number of investors may now sell their rental properties.
"I'd say by two years there will be a higher rental crisis than what there is now, so there will be more people ending up going into emergency housing and they won't be able to build houses fast enough or those people."

aklreels - 2021-03-23 18:17:00

wachael1 wrote:

Why? Interest is a deductible expense for any other business.

most businesses actually provide a real service. A proper business is one that isn’t exploiting people in a less fortunate position, especially on something as fundamental as a roof over ones head.

The odds are stacked well against young people who we want to be working and bringing their kids up well when you have the older people constantly screwing them over and moving the goalposts. I welcome any change that makes things better for younger people.

lakeview3 - 2021-03-23 19:13:00

lakeview3 wrote:

most businesses actually provide a real service. A proper business is one that isn’t exploiting people in a less fortunate position, especially on something as fundamental as a roof over ones head.

The odds are stacked well against young people who we want to be working and bringing their kids up well when you have the older people constantly screwing them over and moving the goalposts. I welcome any change that makes things better for younger people.

So your argument is that putting a roof over someone's head isn't a service?

loose.unit8 - 2021-03-23 19:32:00

lakeview3 wrote:

most businesses actually provide a real service. A proper business is one that isn’t exploiting people in a less fortunate position, especially on something as fundamental as a roof over ones head.

The odds are stacked well against young people who we want to be working and bringing their kids up well when you have the older people constantly screwing them over and moving the goalposts. I welcome any change that makes things better for younger people.

Putting their rents up massively will certainly help I'm sure.

pcle - 2021-03-23 19:38:00

House prices: First-home buyers big winners in housing sector shake-up
Labour takes its first big majority gambles on housing changes
House prices could fall 10 pct following decision to remove interest deductibility for investor properties - Westpac

aklreels - 2021-03-24 09:13:00

pcle wrote:

Let's just avoid addressing the actual problem some more.
Can the Government fix a problem of it's own making?
Will they reduce taxes and red tape that makes renting and building so expensive? Will HNZ stop buying existing FHB properties at full price?
Nope and no way, José.
Let's blame those mysterious never seen "speculators" and kick the can down the road some more.

If you reduce taxes etc ... wouldn't renters just put that towards higher rents? Why would an investor reduce their rent if they could get a higher rent.

rayonline_tm - 2021-03-24 09:55:00

Kick that can down the road..,,

pcle - 2021-03-24 10:37:00

pcle wrote:

Putting their rents up massively will certainly help I'm sure.

you really make me laugh, if you keep that mantra up, and that happens, the govt will be forced to implement means tested pension!

lakeview3 - 2021-03-24 11:57:00

lakeview3 wrote:

you really make me laugh, if you keep that mantra up, and that happens, the govt will be forced to implement means tested pension!

No just more rent controls. Which I wager are coming in next few years.

pcle - 2021-03-24 12:09:00

An Immigration New Zealand (INZ) operation focusing on the construction industry found the men during a visit to a construction site in Auckland yesterday.

They were found to have been unlawfully in the country for periods ranging from 17 months to more than three years.

Immigration New Zealand (INZ) said arrangements were being made for their deportation to China.

aklreels - 2021-03-24 12:23:00

Online auctions today
Barfoot and Thompson, looks like more "passed in" than before.

aklreels - 2021-03-24 13:27:00

This message was deleted.

puddleduck00 - 2021-03-24 14:24:00

puddleduck00 wrote:

I wouldn't call it a service, no. If you bought an existing house as a rental then you're performing a disservice.

The person building the landlord's equity is the one giving the service.

ROFL Yeah, right :P

Edited by loose.unit8 at 3:48 pm, Wed 24 Mar

loose.unit8 - 2021-03-24 15:48:00

pcle wrote:

No just more rent controls. Which I wager are coming in next few years.

To further discourage building of houses (to rent out)?

loose.unit8 - 2021-03-24 15:49:00

puddleduck00 wrote:

I wouldn't call it a service, no. If you bought an existing house as a rental then you're performing a disservice. The person building the landlord's equity is the one giving the service.

They could go on strike, withdraw their 'service'. Easy peasy, just give notice. Landlords will soon fold. (Or not.)

artemis - 2021-03-24 16:16:00