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New Zealand - Prices Down 8% In One Month

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Articles in the papers and tv recently suggesting that house prices dropped a bit in almost every area last month. Sentiment still seems very high to me but affordability is even more stretched here than the UK. If prices crash here I will definitely come back when they bottom out and snap something up.

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Articles in the papers and tv recently suggesting that house prices dropped a bit in almost every area last month. Sentiment still seems very high to me but affordability is even more stretched here than the UK. If prices crash here I will definitely come back when they bottom out and snap something up.

Mmm dunno how conclusive this is. Gizzy is pretty small (30k people). They probably only sell 20 houses a month. Not a great sample size.

Anecdotally friends in NZ are getting worried about interest rate hikes (now 9% fixed and 10% floating).

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Mmm dunno how conclusive this is. Gizzy is pretty small (30k people). They probably only sell 20 houses a month. Not a great sample size.

Anecdotally friends in NZ are getting worried about interest rate hikes (now 9% fixed and 10% floating).

Luckily I convinced my mum not to MEW on her house and give money to my useless brother as I am sure he would have been reposessed by now on his very low income . She has stayed mortgage free on a $600k property and does not need the stress of a mortgage into retirement. It is really better to stay away from the money lenders in NZ at the moment. Things are worse than the UK, but have not crashed yet.

If you think shortage of supply is an issue in this bubble, it is not. NZ is the size of britain with 1/4 the population of london and they still manage to create a huge bubble. It is just pure speculation and easy credit pushing prices up, nothing else.

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Anecdotally friends in NZ are getting worried about interest rate hikes (now 9% fixed and 10% floating).

Yep, my brother lives in Auckland and he is feeling the pinch, after listening to a financial advisor who suggested it would be a bad move getting a fixed rate mortgage back in 2005!

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Yep, my brother lives in Auckland and he is feeling the pinch, after listening to a financial advisor who suggested it would be a bad move getting a fixed rate mortgage back in 2005!

My other brother did well, purely by luck, and bought a flat in Auckland in 2001. It has now trippled in value (due to it being in a run down area close to the city center that has now been regenerated beyond recognition since he bought). Also financial prudence and getting a good job ensured that he has nearly paid the mortgage off.

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My other brother did well, purely by luck, and bought a flat in Auckland in 2001. It has now trippled in value (due to it being in a run down area close to the city center that has now been regenerated beyond recognition since he bought). Also financial prudence and getting a good job ensured that he has nearly paid the mortgage off.

I hate him already :P

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Guest DissipatedYouthIsValuable
Bit of a rollercoaster in Gisborne - up 11% in a year and then down 8% in a month.

Sudden fall in house prices

Okay - possibly just an anomaly - given the suggestion of national trend in the other direction - though having run a few reports through REINZ estate agents association monthly prices do go up and down against a general up-trend.

Don't they still eat white people in Gisborne though?

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My other brother did well, purely by luck, and bought a flat in Auckland in 2001. It has now trippled in value (due to it being in a run down area close to the city center that has now been regenerated beyond recognition since he bought). Also financial prudence and getting a good job ensured that he has nearly paid the mortgage off.

Don't think I will mention that to my brother - wouldn't want to make him cry! (but then again...)

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If you enjoy surfing and long summers, Gisborne is a great spot to hang out for a while but it's a long drive to anywhere else and the roads are twisty, steep and narrow. Flights in and out are expensive unless you book weeks in advance.

We lived there between 2004-2006, renting a house at Wainui Beach, the poshest suburb, for a tiny fraction of what it would cost to buy - probably $600,000 to buy, but only $250 per week to rent. Local salaries are poor (the NZ national average is just $40K, and tax thresholds here are much lower than in Britain, making direct taxes greater). This caps the rent to sensible numbers, but house prices in NZ have been set by middle aged white guys with access to easy mortgages, courtesy of the Yen Carry trade (leading to banks in NZ lending at below base rate). Never mind the shoe-shine boy, but when 50 year old ex-hippy surfers are boasting about property portfolios between catching waves at Wainui, you know something is about to go horribly wrong. Then you see the SUVs that they turned up at the beach in, the boats and toys that they own, and you can see exactly why interest rates in NZ are highest in the developed world.

I'm not sure that a couple of local factors haven't been overlooked by that article on prices - not wanting to knock the Gisborne Herlad but you get better quality free newspapers in Britain. Gisborne recently suffered a severe drought and government help (a tax holiday on income from selling thirsty stock) as well as heavy rain both came too late to save the local rural economy, and that drives everything else. A second factor may be that a lot of sections were released for sale on the edge of town creating a supply glut. Or it may just be that the bubble was about to burst anyway because an equivalent situation in Britain would be Aberystwyth houses at London prices. We will know for sure in a month or two.

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But Auckland doesn't always go up ...

We bought a house on the Shore in 1987 for $295K. In 1999 we had to move for work reasons. We rented the house out: the rent didn't cover the mortgage, but it did cover our rent somewhere else, so that wasn't too bad. We had one tenant who did a runner (she turned out to be a well-known con-woman, did end up in prison, which was nice!). We tried to sell it in 2000 and again in 2001. Eventually, we got a buyer in September or October of 2001. $250K. We lost all our equity, and had to borrow money in order to pay the real estate agent. We didn't have much choice - we were living in Wellington, tenants weren't staying and the rent was still way below the mortgage.

About a month or two later, prices started rising again. I don't know what it would cost now, but it would be way, way beyond our means on a NZ salary (couldn't find anything comparable on realenz for under 500K!!!!!).

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FYI from the man on the ground in NZ

http://www.bloomberg.com/apps/news?pid=206...refer=australia

Auckland prices fell last month (the first time since I have been over here that it has happened.

http://www.nzherald.co.nz/category/62/stor...jectid=10446100

Bollard is a pretty determined guy who oly has one remit - keep inflation under control. Can you imagine King trying to deflate house prices?

http://www.stuff.co.nz/stuff/4101950a1861.html

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Cannot work out whether to laugh or cry. During my last 2-3 years in Aotearoa, the fear that someone wanted to eat me was getting greater (especially once I was involved in the anti-smacking campaign, LOL). I love the East Coast and BOP (lived in Kawerau for a while) but I'm not sure I could live there again.

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