A sea of red for the housing market. Bigger and faster falls than GFC. Wellington down 20%, Auckland down 15%.

A

andro

New member
Article out today.

https://www.interest.co.nz/property...l-main-urban-districts-according-latest-reinz

This graph showing NZ housing drops compared to other major housing crashes.

https://imgur.com/Ln6xCot

A sea of red. Theres nowhere now that isn't falling fast according to REINZ latest HPI report.

https://www.reinz.co.nz/residential-property-data-gallery

Theres no end in sight for the declines now with RBNZ OCR rate rise yesterday and US CPI data out this morning at new record high of 9.1% meaning the US Fed is almost going to have to raise large this month. Bank of Canada raised this morning 1% to 2.5% OCR. Putting upward pressure on interest rates around the world.

HPI from peak

District Peaked Months Ago Fall from Peak

Auckland City 13-Dec-21 7 -15.7%

Christchurch 14-Mar-22 4 -4.2%

Hamilton 13-Dec-21 7 -7.2%

Manukau City 13-Dec-21 7 -15.4%

North Shore City 13-Dec-21 7 -9.7%

Rodney 14-Mar-22 4 -5.4%

Waitakere City 13-Dec-21 7 -13.4%

Wellington City 11-Nov-21 8 -20.1%

*Above thanks to ShoreThing on interest.co.nz

Advice for buyers - Know that you are not alone with your pre-approvals, nearly everyone has had lending reduced by 30 - 50%. Most people are now only being approved with a 20% deposit and around 500k in lending. Plug into any mortgage calculator last years typical 2.5% rate vs current 5.5% - 6.5% and thats what people can generally afford and where the market will have to meet. Please do not overextend. I have seen plenty of posts now on here of people overextending and lending being pulled back and not expecting rates to rise. Don't overpay.
 
@andro Wellington needed this price drop, and I'm a home owner saying this.

I want my family, friends and children to be able to afford a home in this country.

The boomer dream is over.
 
@dartmanii Theres also a bit of a hidden story in the Wellington stats. Upper Hutt and Kapiti prices have held - basically 0% change yoy while the 'city' is down over 12%

Could be a trend that relates to people overpaying in the 'city' for that short commute distance? How valuable is that if you can work from home 2-3 days a week?
 
@bozotheclown I’ve noticed it in Kapiti. Wellington looking “cheap” in comparison.

I imagine it’s a combination of real price difference as post-TG and COVID Kapiti is looking a lot nicer, and more owner-occupied housing on the one hand; and market lag where we just haven’t quite caught up with our drop. Lots of houses languishing on the market here.
 
@hanna123 I think the multi decade mindset on expensive wellington sell up then retire to kapiti coast where you could get more land/house is still in the minds of many people, now with wellington doing what its doing where you can get a 3 bedroom near welly CBD same price as down pram beach many will move back toward wellington as its a long commute and less jobs on the coast. They just haven't realised the market changes yet.

Also driving around Kapiti there are so many for sale signs now on every street.
 
@andro Hmmm. I remember a house for sale recently where one condition of sale was that the vendor’s father be able to stay on as a tenant until he passed away rent-free or something like that - maybe it was this one?
 
@bozotheclown Upper Hutt median may have held, but it's worth noting that there's been new developments which are settling as they are completed which sustains the median price. Existing properties have definitely declined a significant amount, just like Lower Hutt / Wellington.
 
@frbasil4602 I guess the question then is about relative drops. Was there a premium that people were playing to live close to work? Will that change with wfh becoming normalised? Antidotally I know a few people selling in affluent city burbs like churton park & kandallah to buy in waikanae
 
@hanna123 Lucky! Feel like that could have been a once in a lifetime opportunity when kapiti was cheap. It’s not untill you live there you notice the weather difference with the city, hotter and less windy!
 
@bozotheclown We can comfortably grow avocados and oranges. I mean it’s still not Bay of Plenty weather but much nicer, and small town feel with big city convenience as they say
 
@frbasil4602 In Wellington city I imagine some settlements will be starting to fall through on houses bought off the plans. Surely a bank today isn't going to approve the risky mortgage that they suggested when interest rates were 50% lower and prices 25% higher.

Seems like something that could put even more downward pressure on houses.
 
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