NZ Property Market Q&A: House Prices UP, Townhouse Surge & OCR Predictions

Added: 2026-05-22

[00:00:00]I'd say no to tax increase. You're absolutely stupid for doing that. I'm not a big fan of apartments and townhouses as as you know anyways, yeah. And the prices have come back to to where it was back in the picture in Christchurch.

[00:00:16]Good morning, Nathan. Welcome back to Real Talk. Good morning.

[00:00:19]>> Before we get into today's questions, how are you doing and would you like to update on how the past month's been in terms of real estate in New Zealand for you? I've been good. Thank you very much. It's been It's been busy, yeah.

[00:00:31]Like it's been especially in the area that I I specialize in, which is Wilsons and in so on area.

[00:00:40]Um So so good good. The market has been good and and I feel like it's going to stay like this for a little while like we've spoken about in the past.

[00:00:52]Great. Let's get into it. We've got some great questions today.

[00:00:56]What are your thoughts on interest only versus principal amount for your properties? Mhm.

[00:01:02]That's a good good question. Interest only, I I my personally, I have interest only on most of my rentals and I let capital gain take care of take care of it. Mind you, I have bought properties a little while back, so my rent is easily covering the interest and more.

[00:01:23]>> [sighs and gasps] >> At the moment, if you put annual interest and your principal, it could probably get very very expensive. So, the way where the prices are and and and and and the rent is at and the interest rate is is is at, I suggest interest rate would be the only way really to to have a have make rent to profitable to be on to be honest and let the capital gain take care of like I have like I've done over the over the years. In your own personal property, I do suggest pay any extra money that come that you have towards your your principal ICs cuz I think you pay five up to 5% I think you're allowed to pay without having to pay any breakage fee.

[00:02:05]And and I was suggesting when the interest rate was low at 2% and and and and when the when interest rate was very low, I wanted I suggested to people to pay chunks at a time because interest rate was so low.

[00:02:18]But when interest rate is high like it is now, 4 and 1/2% will be probably hard to pay principal and interest. But I've been I've been always been a proponent of I've been always speaking about that if you've got extra cash, put it towards you towards your money.

[00:02:35]Otherwise, you can you can have an interest only so it doesn't break your back cuz I suggest and at the moment a lot of people are struggling. So, perhaps interest rate might be the only way you can survive.

[00:02:47]Mhm, interesting.

[00:02:49]And we have a four-bedroom house and we're thinking to relocate much closer to Lincoln. Should we wait for spring?

[00:02:57]That's a really good question. You know, a lot of people ask like you know, do we sell now or do we wait for spring? Some homes do look stunning in spring and and and you probably if you've got an old house and it's cold, you probably want to wait till a spring so the weather is a little bit warmer, right?

[00:03:11]But if you've got a new house um and it's nice and warm and the fire looks fantastic in the winter, I do suggest sell it sell it sell it sell it in the winter because there's a saying that sell in isolation and and and buy in competition. So, what do we what does that mean? It means that in winter, a lot of buyers a lot of sellers have been told to say wait till spring, right? This is a thing that people say like you know, we're going to go to the market in spring.

[00:03:37]So, I suggest change that go to the market in winter because buyers, if they've got the pre-approval you got they've got 3 months or 6 months for their pre-approval to run out. So, buyers don't get out of the market. The buyers still in the market. What happens is sellers don't go to the market, meaning there's going to be less properties competing against your property. So, I suggest you got a nice house, talk to your your your agent and prepare to go to the market over winter.

[00:04:03]If you've got a cold house and you you'll be rough selling it in summer, and maybe you got a stunning garden, maybe that's a different story. And that's a very minor It wouldn't be that many properties that wouldn't look good in in in in winter.

[00:04:17]In fact, a lot of buyers do say like, you know I'd rather look at a a house in winter to see how great it is, the ducted heating system, the underfloor heating system, or the fireplace to see how how warm it is in winter. So, it's it's to in summary, I wouldn't wait till till spring to go to the market.

[00:04:34]I'll go to the market sooner than later.

[00:04:36]Great.

[00:04:37]Now, someone's commented on the capital gains tax. Of course, the capital gains tax makes sense. It's only on the capital gains, not the original capital value. It's not different to income tax.

[00:04:48]A fair progressive tax system must have a capital gains tax as well as an income tax. That's why most Kiwis will be voting Labour this year. What are your thoughts on this? Yeah, I think you know what? A tax thing is a fair tax is what I talk about, right? A fair tax is 10% right across the board.

[00:05:06]Not more, not less. The problem that I have with tax isn't the tax system, cuz yeah, we got to pay for the beautiful city that we live in, and we got to take make sure that how that those roads are clean, all that kind of stuff. The problem that I have the bureaucrats, the way they spend our money. So, more money is not going to fix this problem.

[00:05:26]Leave the tax where it is, but tighten up in the spending that these bureaucrats and these councils are are doing. So, so my problem isn't about with tax. I don't want to increase the tax to increase. There's no need to increase the tax. You can have a very successful, sustainable government or or country if the bureaucrats in the city in Wellington, they spend our money better than than than than they are at the moment. So, I I say no to tax increase. Absolutely stupid for doing that. Though I do also want to say that if you are voting for Labour just for tax purposes, there's never been a country that increased the tax and they've prospered. No, it always a country that charge less will the taxes are small, the government is small, the spending is less, the government spending is less, more power to the people. Those countries that actually thrive or prosper. So, you have you have you look you look look at it. Look at Europe where it's heading. Look at Australia is the government is destroying it. Look at what Labour did to to to to to our country here. So, what I say, no to too much involvement from the from the government. And the government that don't get involved like Argentina or the states now, they're prospering. So, the answer is less government interference, more power to the people. I'm an investor who is thinking to invest in one of the upcoming apartments near the 1 NZ stadium. They are two bedroom with one garage and I have other investment properties up north as well as around the country.

[00:07:03]Do you think it would be a good investment for an Airbnb in central location point of view?

[00:07:08]Two two bedrooms with a garage? I like that idea.

[00:07:13]What I suggest is that many options in the markets. You got to make sure you got to you got to negotiate the price and and and get it as low as possible you can. We saw the one bedroom place down here down just down road from from from us for a great price.

[00:07:32]It was 525, but it was different. It was it was garage downstairs, beautiful indoor and outdoor flow, one of a kind. Not not not many property properties like it. So, I'll be looking for something like that like that rather than a in a block of apartments if I was if I was to to invest in an apartment. I'm not a big fan of apartments and townhouses as as as you know anyways, yeah.

[00:07:57]Are people just still stuck on 2021 prices?

[00:08:01]Yeah, that's a good question. The prices have We had a big drop obviously since the peak and the prices have come back to to where it was back in the peak here in Christchurch. But, in Wellington and and and in Auckland, the price we had a they had a way bigger drop. So, their expectation might still be there. But, what I found over the years if a vendor property sold down the road last month for for 1.1 but a house down the road sold for 1.5 in the peak, the vendors that are selling houses now, they're comparing with the last month's prices not the 2021 2022 2022 prices.

[00:08:41]The prices I'm suggesting even if the prices were high, vendors expectation were high in 2022 2023 after the peak, it would have still it would have adjusted now. So, the to answer your questions, >> [snorts] >> no, the the the vendors expectation more realistic now.

[00:08:58]And also with I've written a book, The New Zealand House Price Insider. Look at that. It gives you all the inside about what the market has done, what the market is doing from We've gone back as since 2007 2008. So, it'll be very good book. I suggest if you haven't downloaded it, link is below. Get yourself get yourself a free copy.

[00:09:19]Is it better to buy an existing home or build new in 2026?

[00:09:24]It just depends. There's options a plenty.

[00:09:27]So, I suggest you look around.

[00:09:30]See what would what would suit you. While I'm selling some houses off market, if I went to the market with those properties, I'm potentially going to get a little a little bit more for it. So, look around, see what's available on market and off market, and then you can make your your your understand I know in the past we've seen that if you buy when the market's on a downturn like it is now, you buy an existing house, you actually um make money because you get you got to these these whole lot of options, and you can negotiate the pop a a bit the best possible price. And also, those people might have owned the property for a long time, so they would have had capital gain already, so they might they don't mind selling for a little bit less. Whereas a new builder building a house, down the road it cost him 1.3, of course not going to sell it for 1.3. Probably want to get $100,000 profit, right? So, I suggest because the market is clean on the market, talk to your local expert, talk to the builder, talk to developer, and make an educated educated decision. We are I still we still I've got options like everything. Brand new houses, older houses, and a lot of times these existing houses work better than than than brand brand new homes. So, that's my my thoughts, my suggestion on that. Fair enough.

[00:10:45]And are New Zealand house prices going up or down right now?

[00:10:50]Yes, stabilizing. We We've done videos in the past and talked about like, you know, this for the next year or two it's going to be stabilizing. And and when since National come comes to the market, the market obviously is more it's it's it's better now. The affordability is better, which is which is fantastic. You don't want off The prices of properties 2 to 4% year on year is a great healthy growth. You don't want it higher than that. So, with the National government power, it's it's working. If you average it out even after the the big 20% growth that we had over 2021-2022, even if you average that out, it's about 6.1% per percent growth. So, for the next few years, I don't want it to be honest, I don't want the prices to increase because it gets out of hand and you don't want our new generation, our new first home buyers not to be able to buy houses because if you can't buy houses, then what do you do? You You you move out of the country, right? You go You go elsewhere. What do you call it? The the brain drain, right? So, at at at the moment, I think the the market is at a at a good place and I think these we're not going to have growth, massive growth anyways, for for a little while, which I'm fond of. I like that.

[00:12:05]Right.

[00:12:06]And what do you think would make house prices rise again?

[00:12:11]We've spoken about that the crazy rate drops or printing a whole lot of money, right? So, there's a demand pull pull inflation, supply um push inflation or printing off printing off money, right?

[00:12:23]So, all those three things that increase in it should should increases, right?

[00:12:28]So, my thing would be is like if they drop the interest rate too low, that would get the market market going. If they don't allow the supply to catch to to to to be in line with demand, and we've spoken about the five variables we always speak about. Those all needs to be keep kept in check. And watch my video for prediction of 2026 out there.

[00:12:49]We did a prediction there and I talk about each one of them and where it needs to be to be at a good healthy level, the real estate or the economy in a in a in a country. So, >> [snorts] >> Fair enough.

[00:13:04]Now, I am planning to sell, but I want to buy first. Can I buy without selling?

[00:13:09]Yes, when the market is a little bit slower, like it is now, you do have the option to be able to buy without selling your home. So, you can make an offer subject to sale.

[00:13:19]But what I What I like What I talk to my clients is, "Hey, you can get real good buys if you are cashed up." For example, we sold a house, we had an offer of 1.7 million.

[00:13:31]And the other offer was cash at 1.635.

[00:13:34]Our owners sold at 1.635 because they already made an offer buying something else.

[00:13:39]So, you can save 75,000 if you were cashed up. But, some people say, "Oh, I've got kids and I've got dogs and da da da da." I appreciate that, but maybe you can buy a find a rental in in in in in a place for a little while. I know it's not easy to move from one house to another house, but if you're saving 75,000, I'll be doing >> [laughter] >> I'll definitely be doing that.

[00:13:59]Right.

[00:14:00]Now, lastly, the OCR is expected to announce next week. Do you have any thoughts on that?

[00:14:06]I think they're doing they're doing good job where it is. The The OCR, I think last time it stayed unchanged. I would like to keep it where it is because it's everything is everything is in line and and and the the market is pretty healthy. So, I would like to keep it as is for the next couple of couple of years. So, what happened with you like I said, the leverage that that the government or Reserve Bank play with is the interest rate. If you drop the interest rate, the OCR too low, people would tend to spend money, right? So, but if you drop it higher if you go higher, it's people don't invest too much. They're more careful about investing or or buying luxuries or whatever it may be, right? So, when there's demand, the prices increase. I don't want the price to increase. I want the price to stay where it is stable.

[00:14:58]And but the income increase, right? If the income increase, the affordability becomes better, right? So, that's what my my decision I think it should stay where it where it is and I feel like they will they will have it stay where it is because this I feel like this government they they think they're more logical about making decision rather than being emotional, which is stupid way to run a government in my opinion.