I think Auckland housing prices will continue to fall by 15%-25%

[bigotsbeware]

@kalenebari Immigration is coming to save the day, don’t worry

 

[pressfrancis]

@kalenebari To the OP; how confident are you of these predictions?

Like are you are going to put money where mouth is and sell now then buy back in 2023 when prices are down?

Don't disagree there is some drop to go, but I wouldn't be so confident about magnitude of the drop.I think supply of housing will tighten and demand increase on the back of immigration tap being turned back on.

All comes back to interest rates.

Most countries are dealing with the same issues and US there is some signs of inflation peaking

 

[runge12]

@pressfrancis Agree with you wholeheartedly about immigration, although the glacial speed at which INZ operate means things probably won’t ramp up fully until mid next year or so. One of our HR team spent 2 hours on hold yesterday to try sort a visa for an offshore candidate, and we are an accredited employer.

Not so sure about supply contracting just yet though. I’m amazed at the amount of new builds commencing around my area, houses being taken off in prep etc. I also think a few landlords will have one or two houses too many at these rates and will need to get rid of a couple.

 

[pressfrancis]

@runge12 Yeah if we were running a sweep stake I think bottom out towards end of 2023

 

[bones49]

@pressfrancis

Pretty confident in a further 15% drop.

Fast track residence is a two year work visa. They cant just hop off the boat and start buying lol....

and you're betting on that they cut interest rates as fast as they rose?

If banks are testing 9%+ theres no bid on housing. Pretty simple fact as we are a low wage economy and most people need mortgages to buy.

Huge levels of consents in 2022 so we could see max supply around mid to late next year.

 

[amelia97]

@pressfrancis

Like are you are going to put money where mouth is and sell now

It's too late

 

[resjudicata]

@kalenebari You have to apply some real world principles to the figures. If prices fall drastically, the market will crash and the whole economy will fail. The government and banks do not want that. It could, however if it does they might react and start implementing stimulants to stop the drop of house prices, perhaps to raise them a little.

EDIT: I know it's not something people want to hear, neither do I. But from what I have learned a housing market crash does not favour FHB or ones seeking to be one. It damages them the most.

 

[cr0011]

@resjudicata US Federal government did not want housing to collapse in 2008 either.

Many households are about to see their mortgage rate double or triple -
Just like the ARMs that set off the GFC in an environment of rising prices

 

[tinah1973]

@resjudicata

the market will crash

What market? Nothing is selling.

 

[kezia]

@resjudicata Why will the whole economy fail?

 

[resjudicata]

@kezia The explanation is always left out, it's just an empty threat that the thing they don't want will hurt everyone else too.

 

[resjudicata]

@kezia There would be a diverse impact on business and spending. I am not too well versed in economics but this article touches on it quite nicely. I am sure there is a much more accredited source of information online that would explain it better.

 

[baileyf14]

@resjudicata So hyperinflation is preferable for the economy than a needed housing correction. Hmmmm

 

[amelia97]

@resjudicata A recession does not = "the economy will fail".

NZ is long overdue for a bit of a correction

 

[kezia]

@resjudicata Lol “one roof” as your reference. Basically people will stop buying some boats and REAs will go back to doing something useful.

 

[gavenv]

@resjudicata Everybody seems to think that if X happens and will result in Y which is something really terrible, X cannot possibly happen.

The FED doesn't give a toss and we will move in the direction they do even if wheels start falling off.

 

[resjudicata]

@gavenv I see what you are saying, but I strongly disagree. It is in the banks and governments best interest to maintain the strongest position in our economy over a significant period of time.

 

[gavenv]

@resjudicata You have this impression that the banks and government can control this. They can't, period. RBNZ is doing its utmost and its failing to get inflation under control. Food inflation at 14 year high

Option A: Destroy the whole economy by letting inflation run away

Option B: Destroy the housing market and part of the economy by forcing a considerable recession through massive interest rate increases.

Take your pick. Orr is very much in B territory.

 

[resjudicata]

@gavenv Food inflation is a good example, however there are a few significant events that contribute towards that.

• One being that New Zealand is at the will of a duopoly between Foodstuffs and Progressive.
• The other being a international food crisis with droughts in China as an example, which has created inflation everywhere.

The government and banks regulate our economy by implementing either monetary or fiscal policies. Have a read here if you want to learn about it.

 

[gavenv]

@resjudicata The duopoly is a non factor as it was there when inflation was under control not to mention that food inflation is everywhere globally. No Foodstuffs or Progressive in the UK yet their inflation is similar.

The "international food crisis" as you call it is a factor but only a small part of it.

The real reasons are:

• Copious money printing during the pandemic and record low interest rates encouraging borrowing & spending.
• Supply Chain breakdown 2020 - 2022
• The War in Ukraine

All this results is in too much money for stuff that is not being produced/delivered, hence inflation.

And jfc please stop quoting Oneroof and Investopedia.