Kiwis Get Another Mega Rate Cut, As Inflation Sits In Band!

Would you prefer to be living in New Zealand or Australia? The New Zealand story on monetary policy and home prices is a million miles away from the RBA’s approach of keeping rates lower, to protect jobs even if inflation remains above target.

Across the ditch the Reserve Bank’s approach of “no regrets”, took interest rates much higher, lifted unemployment and pulled home prices lower, and because of the more aggressive action appears to have left the land of the long white cloud better placed in the months ahead.

The New Zealand Monetary Policy Committee this week agreed to lower the Official Cash Rate by 50 basis points to 3.75 percent.

The RBNZ have been cutting for a while and and house prices haven’t been rising. The 40% run up in prices over the pandemic has been followed by the sharpest price crash in generations. Even so, price-to-income ratios remain elevated relative to historical experience, especially given the current interest rate settings. Whilst median home price to median household disposable income are coming down, we are still around 10 times in Auckland, and over 8 times nationally.

So standing back, the different path between the Central Banks of Australia and New Zealand really stand out. Which begs the question, is a shorter sharper shock, or a slow grind with no clear way out the better path? And should stronger controls on mortgage lending be imposed to keep home prices under control? Oh, yes and the elephant in the room, should migration be dialled back – as in New Zealand, where Stats NZ reported that 72,000 citizens left the country while just 24,900 arrived, and the overall net loss of citizens in 2024 is the largest in a calendar year – or should migration still be pushed hard, despite the rhetoric as in Australia? Frankly to me on so many fronts New Zealand seems in better if imperfect hands than Australia!

http://www.martinnorth.com/

Details of our one to one service are here: https://digitalfinanceanalytics.com/blog/dfa-one-to-one/

Go to the Walk The World Universe at https://walktheworld.com.au/

Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
Kiwis Get Another Mega Rate Cut, As Inflation Sits In Band!
Loading
/

Is The Kiwi Property Market On The Turn?

The Real Estate Institute of New Zealand’s (REINZ) House Price Index (HPI) reported a 16.7% decline nationally from the market peak reached in 2021. This has taken real inflation-adjusted house prices back to their pre-pandemic level at the start of 2020.

But in August the Reserve Bank of New Zealand cut the official cash rate by 0.25% and has signalled that significant further cuts would be made over the next 18 month. Business confidence took a leg up, bouncing to a net 51% positive from just 6% in response, banking on the end of the recession which has gripped the country.

Net Migration is also falling away rapidly, according to statistics New Zealand, and we are seeing more property coming on market with inventories up by 30% compared with last year, while sales volumes are down compared with last year and more property being subsequently withdrawn from market failing to find a buyer at their desired asking price.

So net net, it seems likely that as we go into spring and summer in New Zealand, demand might be higher thanks to lower rates but offset by lower migration, while supply is higher but transaction volumes are lower. Which begs the question, are we seeing the property market turning?

Well, the latest report, or should that be marketing document from the REINZ for August shows “signs of increased confidence, optimism and activity compared to the previous year. While the overall sales volume slightly declined, several regions reported notable increases in activity, and year-on-year listing numbers continue to rise”.

All up, its probably too soon to talk about an uptick in property values, but there may well be more property coming on to the market, and an uptick in sales to boot. Further rate cuts will help, and of course the loser regulations on investment property may also assist, but migration driven demand is falling.

Its probably way too early to declare victory, for now. REINZ Chief Executive Jen Baird said August provided a sense of confidence and positivity to the property market. I would remain more cautious. Auckland still seems to be more exposed while some South Island markets though smaller are more positive. And there is considerable uncertainty ahead.

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
Is The Kiwi Property Market On The Turn?
Loading
/

Is The Kiwi Property Market On The Turn?

The Real Estate Institute of New Zealand’s (REINZ) House Price Index (HPI) reported a 16.7% decline nationally from the market peak reached in 2021. This has taken real inflation-adjusted house prices back to their pre-pandemic level at the start of 2020.

But in August the Reserve Bank of New Zealand cut the official cash rate by 0.25% and has signalled that significant further cuts would be made over the next 18 month. Business confidence took a leg up, bouncing to a net 51% positive from just 6% in response, banking on the end of the recession which has gripped the country.

Net Migration is also falling away rapidly, according to statistics New Zealand, and we are seeing more property coming on market with inventories up by 30% compared with last year, while sales volumes are down compared with last year and more property being subsequently withdrawn from market failing to find a buyer at their desired asking price.

So net net, it seems likely that as we go into spring and summer in New Zealand, demand might be higher thanks to lower rates but offset by lower migration, while supply is higher but transaction volumes are lower. Which begs the question, are we seeing the property market turning?

Well, the latest report, or should that be marketing document from the REINZ for August shows “signs of increased confidence, optimism and activity compared to the previous year. While the overall sales volume slightly declined, several regions reported notable increases in activity, and year-on-year listing numbers continue to rise”.

All up, its probably too soon to talk about an uptick in property values, but there may well be more property coming on to the market, and an uptick in sales to boot. Further rate cuts will help, and of course the loser regulations on investment property may also assist, but migration driven demand is falling.

Its probably way too early to declare victory, for now. REINZ Chief Executive Jen Baird said August provided a sense of confidence and positivity to the property market. I would remain more cautious. Auckland still seems to be more exposed while some South Island markets though smaller are more positive. And there is considerable uncertainty ahead.

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Kiwis See Average 16% Home Price Falls From Peak, But Hopium Ahead!

In this show we look at the latest property data from New Zealand, from the REINZ and CoreLogic.

The Real Estate Institute of New Zealand (REINZ) released its July 2024 data at the end of August. The national median price decreased by 2.2% year-on-year, from $770,000 to $753,000, and decreased by the same amount month-on-month. For New Zealand, excluding Auckland, the median price decreased 1.5% year-on-year from $680,000 to $670,000. Month-on-month, the median price also decreased by 1.5%.

But here is the REINZ spin. “In July, we saw an increase in sales across the country compared to last year and June 2024. As more listings hit the well-supplied market, buyers are slower to make decisions, extending the average Days to Sell. Despite ongoing economic challenges, early signs suggest potential improvement, indicating favourable conditions in the residential property landscape might be on the horizon,”

The value of New Zealand homes continued declining in August, according to property data company CoreLogic. The median value of NZ dwellings was $811,583 in August, down 0.5% from July. August was the sixth consecutive month the national median value has declined. It’s now down $31,000 since its summer peak in February, and is 16.8% lower than its all time high set in January 2022.

“This all adds up to likely further restraint on property values, although the potential impact of lower mortgage rates can’t be ignored.”

So, as listings rise of course this puts downward pressure on asking prices as prospective purchasers have more choice and negotiating power. The RBNZ rate cut will certainly help the market, especially if further cuts follow. But lower net migration, and the cold winds of recession will continue to haunt the market.

It is certainly worth considering the fate on Australian home prices in the light of what happened in New Zealand, as rate cuts and recession grind the market down. But the one sure thing, true in both markets is that Real Estate Industry Hopium remains fully intact!

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
Kiwis See Average 16% Home Price Falls From Peak, But Hopium Ahead!
Loading
/

Kiwis See Average 16% Home Price Falls From Peak, But Hopium Ahead!

In this show we look at the latest property data from New Zealand, from the REINZ and CoreLogic.

The Real Estate Institute of New Zealand (REINZ) released its July 2024 data at the end of August. The national median price decreased by 2.2% year-on-year, from $770,000 to $753,000, and decreased by the same amount month-on-month. For New Zealand, excluding Auckland, the median price decreased 1.5% year-on-year from $680,000 to $670,000. Month-on-month, the median price also decreased by 1.5%.

But here is the REINZ spin. “In July, we saw an increase in sales across the country compared to last year and June 2024. As more listings hit the well-supplied market, buyers are slower to make decisions, extending the average Days to Sell. Despite ongoing economic challenges, early signs suggest potential improvement, indicating favourable conditions in the residential property landscape might be on the horizon,”

The value of New Zealand homes continued declining in August, according to property data company CoreLogic. The median value of NZ dwellings was $811,583 in August, down 0.5% from July. August was the sixth consecutive month the national median value has declined. It’s now down $31,000 since its summer peak in February, and is 16.8% lower than its all time high set in January 2022.

“This all adds up to likely further restraint on property values, although the potential impact of lower mortgage rates can’t be ignored.”

So, as listings rise of course this puts downward pressure on asking prices as prospective purchasers have more choice and negotiating power. The RBNZ rate cut will certainly help the market, especially if further cuts follow. But lower net migration, and the cold winds of recession will continue to haunt the market.

It is certainly worth considering the fate on Australian home prices in the light of what happened in New Zealand, as rate cuts and recession grind the market down. But the one sure thing, true in both markets is that Real Estate Industry Hopium remains fully intact!

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

The Chilly Economic Winds Hits Kiwi Property Market!

Latest data from REINZ shows further momentum falls across property sales and prices in New Zealand, as the higher rates continue to squeeze households and dampen the markets. Prices are now 16% below past peaks.

https://www.reinz.co.nz/Web/Web/News/News-Articles/Market-updates/REINZ-June-2024-data-property-market-a-little-chilly-amid-economic-challenges.aspx

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
The Chilly Economic Winds Hits Kiwi Property Market!
Loading
/

Kiwi Home Prices Continue To Drift Lower…

Data from CoreLogic shows the “dead cat bounce” in New Zealand home prices, driven by the higher for longer interest rates, and significant pressure to refinance,

Recent changes from 1st July will not have much impact on the market, while the Reserve Bank won’t be cutting rates for some time. Demand will remain weak, as migration starts to turn negative.

Therefore expect more downside to prices, especially in areas of Auckland and Wellington!

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
Kiwi Home Prices Continue To Drift Lower...
Loading
/

Kiwi Home Prices Continue To Drift Lower…

Data from CoreLogic shows the “dead cat bounce” in New Zealand home prices, driven by the higher for longer interest rates, and significant pressure to refinance,

Recent changes from 1st July will not have much impact on the market, while the Reserve Bank won’t be cutting rates for some time. Demand will remain weak, as migration starts to turn negative.

Therefore expect more downside to prices, especially in areas of Auckland and Wellington!

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

More Kiwis Are Selling For A Loss!

Recent property purchasers in New Zealand are more likely now to sell at a loss, according to property data company CoreLogic’s latest Pain and Gain Report.

The report found 7.4% of the residential properties sold across the entire country in the September quarter were sold for less than their owners paid for them. But in Auckland, where 11.3% of sales fetched prices below what owners had paid for them. Those least likely to make a loss were in Christchurch where the loss making rate was just 4.7% of total sales.

The proportion of loss making sales has increased rapidly since the beginning of 2021 and is now at its highest point since 2015.

The median size of the loss on properties sold for less than their purchase price was $45,000. However that would likely balloon out to $70,000 or more once selling expenses such as agent’s fees and legal expenses are added.

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/

Digital Finance Analytics (DFA) Blog
Digital Finance Analytics (DFA) Blog
More Kiwis Are Selling For A Loss!
Loading
/

More Kiwis Are Selling For A Loss!

Recent property purchasers in New Zealand are more likely now to sell at a loss, according to property data company CoreLogic’s latest Pain and Gain Report.

The report found 7.4% of the residential properties sold across the entire country in the September quarter were sold for less than their owners paid for them. But in Auckland, where 11.3% of sales fetched prices below what owners had paid for them. Those least likely to make a loss were in Christchurch where the loss making rate was just 4.7% of total sales.

The proportion of loss making sales has increased rapidly since the beginning of 2021 and is now at its highest point since 2015.

The median size of the loss on properties sold for less than their purchase price was $45,000. However that would likely balloon out to $70,000 or more once selling expenses such as agent’s fees and legal expenses are added.

http://www.martinnorth.com/

Go to the Walk The World Universe at https://walktheworld.com.au/