In an ideal world, housing costs would be more predictable so that ordinary people can plan around them and get on with their lives. We purchased in the last few years and are not badly off, but could have done without the $100k haircut in our bank equity. Sure, doesn’t affect us too much, but makes renovations harder.
this post was submitted on 01 Aug 2026
33 points (100.0% liked)
Aotearoa / New Zealand
2205 readers
44 users here now
Kia ora and welcome to !newzealand, a place to share and discuss anything about Aotearoa in general
- For politics , please use !politics@lemmy.nz
- Shitposts, circlejerks, memes, and non-NZ topics belong in !offtopic@lemmy.nz
- If you need help using Lemmy.nz, go to !support@lemmy.nz
- NZ regional and special interest communities
Rules:
FAQ ~ NZ Community List ~ Join Matrix chatroom ~ Alternate frontends ~ Donate
Banner image by Bernard Spragg
Got an idea for next month's banner?
founded 3 years ago
MODERATORS
same in Australia, its all grim in 9 out of 10 articles in the news over here with a few % points down
Yay! Lower! Lower!
@Ilovethebomb It's not good news for everyone. Just for most people.
Anyone who owns property purely as an investment is being negatively impacted (and probably getting annoyed by the rest of us cheering that fact on). But also anyone who doesn't have enough equity in their home and bought before a large dip might face issues depending on the fine print in their home loan. (I could be wrong on that last - I'm making assumptions based on things happening in the US during the 2008 crash, and those consequences may not apply in our country.)
For the rest of us it's lower cost to buy, lower rates once we've bought, and a chance to point and laugh at anyone heavily invested in real estate. I doubt rents will drop, though.
Some of the reporting around investors etc says they're looking much more closely at what revenue the property can create, because it's not a given that the property will increase in value.
Which is how property should be viewed, the idea that prices only go up needs to change.
If someone bought a house they live in then it lost a lot of value, it's unlikely to significantly impact them except in some specific circumstances (which mostly revolve around them trying to sell).
Also a general drop in the market won't impact rates for the same reason that the housing market doubling in value doesn't double your rates. The council doesn't get income on the whim of the market, they decide how much money they want to spend first, then they apportion the cost to households based on the relative value of houses to each other. If everyone's house goes up or down in value on the same scale, it doesn't affect rates. You pay more or less based on the value of your house relative to others.
Because the council's expenses rise every year, rates will continue to rise even when house prices fall.
You're likely right on rents. Rents mostly only fall when there's an over supply of rentals available.
@Dave Good point - a general drop in the market won't cause much change to rates overall. That will still vary a bit due to the differences in the valuation changes by suburb, of course - if your valuation drops less than most parts of your region, your rates may even increase.
With regards to other effects on home owners, as I alluded there are potential issues that could arise if equity goes negative. This won't be a problem for most, especially given the typical deposits required by the banks for home loans, but if valuations drop enough it may come up.
if your valuation drops less than most parts of your region, your rates may even increase.
Since the cost of running a council is increasing significantly (it seems mostly due to catching up on a lack of infrastructure investment), it seems highly unlikely that rates will do down even if you valuation drops relative to others. You would be lucky to pay the same next year as you're paying this year given councils are putting rates up 7-15%!
With regards to other effects on home owners, as I alluded there are potential issues that could arise if equity goes negative.
As far as I'm aware, the effects of negative equity in NZ are generally going to be about your ability to borrow more money unless you're selling your house. You'll likely struggle to get another loan at a decent interest rate, but banks aren't in the business of selling your house after a big valuation drop while you're happily making mortgage payments.
@Dave Sure, I should have said "increase more as compared to the average ratepayer".
As to the effects of negative equity, you're likely right about the risk of foreclosure, but the difficulty of getting further loans at a reasonable rate is still a potentially significant downside, given how often unexpected expenses come up, especially early in home ownership when equity is most likely to be low.