The world’s frothiest housing market is getting a reality check — and it may be a harbinger for the rest of the world. Once at the forefront of the pandemic property boom, New Zealand saw median home prices plunge 8% in June — after annual gains of nearly 30% in 2021 — and transactions plummet almost 40%. Economists think there’s more room to fall further, as much as 20% from the late 2021 peak.
“It’s not unreasonable to look to New Zealand as the canary in the coal mine,” said Sharon Zollner, ANZ Bank’s New Zealand chief economist. “Interest rates have been rising here for about a year now, which does put us well ahead of the pack. The themes we are seeing here are very similar to what’s happening in the US and Australia.”
I hate it when people act like falling house prices is a bad thing! Its bad for rich bastards, not for everyone else
Freda Utley,
Lemons for breakfast?
Yes, there are people that have made a fortune off housing but who can blame them? We have a fucked system set up for that very thing to happen. I know a guy that owns over 100 properties. His partner is in her 20’s and already owns multiple properties. A capital gains tax would have forced fairness into our housing market but vested interest put a stop to that.
Obviously not all people that own their own home are “rich bastards”. Most will be far from it. I feel very sorry for young families who finally purchased their own home in the last 18 months. They will have paid a high price for their home. Now we have increased cost of living and interest rates are rising. Their mortgage payment increases will be several hundred dollars more every month. If that’s not bad enough, they are now seeing the value of their home dropping which will result in them being in negative equity. That’s an awful situation for struggling families who likely took years to finally own their home.
Yes, usury is bad.
Well, duh!
Labour hosed the country with “free” money whilst destroying the economy.
Of course it was going to lead to explosive inflation, particularly in the are where people are used to storing their wealth.
Straight …..It’s now woketearoa….
NZ ain’t the canary it’s a norwegian blue
House prices in Auckland need to fall so the next generation have a fighting chance to get into housing
So they may just fall to the already ludicrous prices of early 2021…tragic!!
I would be surprised if they fell even that far, but yeah the prices are somewhat insane.
Good, the rich money grubbing barstards need a wake up call. Maybe us normal New Zealanders can afford a house now. I am all for house prices falling 95%.
looks like the overleveraged gamblers are going to lose their shirts…never mind there’s always the pokies
The fall from it’s peak will more than likely be around the 45-45% mark…maybe even more…and it will hang around there for quite some time ….years….not months.
The fundamentals are so far out of whack it not funny and it is going to take a long long time to equalize and sort it’s self out.
Statistics 101…Everything, eventually, regresses to the mean.
Physics 101……For every action, there is an equal and opposite reaction – Newton’s third law
It is impossible to get around those two laws with out having some serious downside carnage on the other side occur.
I am old enough to remember when property prices barely moved for 10 years or more. Nobody talked about. Nobody worried about it. People just lived in their houses no matter what the price was and got on with life.
The continuous obsession with house price rises over the past decade or more has been pure insanity.
I have no particular sympathy for people who have bought into the market the past 4 years or so. It’s caveat emptor.
The warning bells have been ringing loudly for a long time now. Everyone bar those living under a rock have known about it. That’s life !
Grant,
“I have no particular sympathy for people who have bought into the market the past 4 years or so. It’s caveat emptor”
Not everyone that has purchased a home is a wealthy investor. There are big numbers of young kiwi families that needed their own home. You can’t expect them to delay buying a home based on what may or may not happen at some point in the future. We all knew house prices were OTT for some time but I don’t accept what unfolded in the market from March 2021 was predictable. Almost every expert or alleged expert predicated house prices would drop by around 15% when Covid arrived hence the Reserve Bank Governor reintroducing the LVR’s. Instead house prices went up over the next 9 months by a staggering 25%+. If they could be so far out, how can we expect young families to be more “informed”?
As long as people have 3 or 4 or 5 kids who grow up to want a house one day, prices will never fall. They may trend down for a bit here and there, but they will not fall much. I know lots of young people that have or want 3 or 4 kids. There’s your problem. Nobody ever mentions it…like its taboo. stop having so many kids.
As long as Robo keeps his Middle Class Bazooka locked up. Or will he?
He and Orr did say when they broke it out the first time. If they needed to access another 100 Billion. Orr said to Robo, “YES WE CAN!”
So will they just for a laugh just before they both get sacked next year!
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