Why property prices in NZ are to high compared to other countries.

To high therefore who is creaming the building cost?. The biggest reason is compliance costs, which have gone right over the top. We used to at one stage talk over an unforseen minor problem over with the building inspector, and come up with a practical solution. Now its engineers reports for trivialities. The plans for simple houses now cost three times as much to produce than they did in the past simply because of over the top detail with more engineers reports on everything. Councils dont make decisions, then make property developers donate land, pay for road upgrades, new roads plus every thing alse they can think up. The greenies have got their foot in the door making us having to double glaze and insulate out of all proportion to a temperate climate. All very nice if you can afford it of course, so why not have us all drive a nice safe rolls instead of that jap import. The people in the end who pay for all this stupidity are the young couple that want a simple three bedroom home at a reasonable price. Macdunk

Also our wages are two low.

If we had higher wages, they would seem cheap.

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Originally Posted by CJ

Also our wages are two low.

If we had higher wages, they would seem cheap.

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If we increased wages then we'd have to increase the cost of housing, as labour is a major component of building costs. Unless we increase wages for everyone except those involved in the supply of goods and services to the building industry, and their suppliers, and their suppliers . . .

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Originally Posted by Serpie

If we increased wages then we'd have to increase the cost of housing, as labour is a major component of building costs. Unless we increase wages for everyone except those involved in the supply of goods and services to the building industry, and their suppliers, and their suppliers . . .

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Funnily enough labour comes a little cheaper than the cost of GST in the price of a house. All the materials and all the labour GST content is higher than what the trades people end up with. If you add the IRD content on trades people then the first defendent would be the Govt followed closely by the stupid council who seem obliged to make the process as expensive as they can. Macdunk

My last renovation was essentially a rebuild and had engineer reports coming out my ears. One of the first was the earth core samples that were being taken. Maybe 20 of them down to around 10m and I'm thinking WTF? Its not like an unknown subdivision - theres loads of houses built around here. Then theres the engineer reports on all the bracing and the untold Building Inspector visits.

The new part of my house came through the earthquake relatively unscathed - no cracks or subsidence. The old part of my house is the part that has slumped and cracked. My new plastic sewerage lines appear to have survived, its the old field tiles further down the line which are stuffed.

I'm now thinking I don't really care how expensive a house in NZ is relative to other parts of the world. If it stands up in an earthquake then thats a pretty good thing. If we have to pay a premium relative to London, or Toronto or New York so be it.

If Christchurch is severely unafordable (rated at 40 as seriously unafordable) then so be it. Perhaps the message is if you choose to live right on top of an active fault line you pay the price. I guess if the aftershocks get too much for me I could always sell up and move to Flint Michigan - looks like houses are affordable there. Shame theres no jobs though!.

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Originally Posted by duncan macgregor

The people in the end who pay for all this stupidity are the young couple that want a simple three bedroom home at a reasonable price. Macdunk

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Had a young couple around in the weekend - cousins actually. They bought an affordable house in an affordable area at a reasonable price. Their place survived the 7th Sept quake, not undamaged but liveable. Thats liveable if you consider doors didn't close in the jambs and you didn't want your chimney - but at least it was home. They didn't survive the boxing day quake. Their reasonably priced house is munted.

I'm betting councils look closely at their building regs and lift the compliance requirements and consequently the costs. It is with some irony that the local council moved into their flash new rate payer funded premises just before the quake - and that building didn't survive unscathed. The poor wee clip board carriers have to find a new home for a while.

Why is NZ Timber Dearer To Buy than the imported Australian equivalent

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Originally Posted by POSSUM THE CAT

Why is NZ Timber Dearer To Buy than the imported Australian equivalent

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I can answer that if you tell me first why I was buying Nz timber in Australia cheaper than I bought it in NZ. Saw files made in NZ sold an AUZ for one third of the NZ price. Macdunk

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Originally Posted by CJ

Also our wages are two low.

If we had higher wages, they would seem cheap.

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Houses would be more expensive as people would have more money to spend:), Look what happened when the oz government started given away 14k to new home buys, you guessed it houses sold for an extra 14k overnight

Houses have always been expensive ask anyone whos had to scrimp and save to get in on the bottom rung, admittedly abit more difficult at the moment due to the banks demanding at least 20% deposit

Mac Dunk we are being robbed on all NZ product NZ cheese far cheaper in AUS than here.

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Originally Posted by POSSUM THE CAT

Mac Dunk we are being robbed on all NZ product NZ cheese far cheaper in AUS than here.

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Why is it you can buy garden furniture imported from overseas cheaper than I can buy the timber here to make it. The 15% GST tax on everything before you start that the poor potential home owner cant claim back Is one of the main reasons people cant afford their first home. Macdunk

My dad had a saying he often repeated, and I think it is relevent, "Whenever someone get something for nothing, someone
else gets nothing for something." In my opinion we have have too many that get too much for too little, right through the
economy from top to bottom.

Why is it you can buy garden furniture imported from overseas cheaper than I can buy the timber here to make it. The 15% GST tax on everything before you start that the poor potential home owner cant claim back Is one of the main reasons people cant afford their first home. Macdunk

Agree. My relatives imported door and window frames from the USA, and even accounting for GST it still worked out cheaper than here.

That said, IMHO there is no such thing as "affordable housing" -- it's a meaningless term that has been used by politicians trying to gain traction for years.

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Originally Posted by Capitalist

Agree. My relatives imported door and window frames from the USA, and even accounting for GST it still worked out cheaper than here.

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And that perhaps is part of the problem.

Say a NZ manufacturer has a $100,000 overhead regardless of output which is spread amongst 100 consumers. Your relatives act has put the price up for NZ buyers - the pool of NZ consumers has shrunk by One meaning the overhead now has to be spread amongst 99.

At some point 99 goes to 98 and then 97 and eventually the firm can no longer afford to invest in new technology or plant to make their product cheaper to produce.

The skilled staff, perhaps feeling nervous about their future, start to head offshore leaving the manufacturer even more vulnerable.

We forget we are a tiny wee nation at the bottom of the world. We imply do not have the population and demand to create the efficiencies in production that Australia or America can do.

We need to support local trades and manufacturers - if we don't they will shrivel and die. At some point an equilibrium between local and import will occur. But if we start complaining of a lack of local support or employment we won't have far to look to see the reason why.

arhghhhhhhhhh


I think Mini wants us back in the protected market days and Oldrider wants us run by the communists/Keith Locke arghhhhhhhh:scared:

No not at all. I'm all for an open market. I just wish people would look at consequences rather than just the "cheapest" deal. Where I can my money goes to locals - and I don't need a government to tell me to do that. When these aftershocks stop I'm going to give my door supplier a call and they'll be around to unjamb it. What chance do you reckon I've got if I had to call the States!

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Originally Posted by belgarion

Not so ... It means that the majority of public buy and own their own homes rather than the state having to provide them either by building them and renting them out at below market rates or by subsidising them indirectly one way or another. Its a basic tenant of Capitalism, Captialist ... :)

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The market decides what is 'affordable' or not, just plain supply and demand usually. THAT is capitalism folks :).

Ask yourself, affordable (or unafforable) to whom?

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Originally Posted by Capitalist

The market decides what is 'affordable' or not, just plain supply and demand usually. THAT is capitalism folks :).

Ask yourself, affordable (or unafforable) to whom?

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That is true, but why should people who only can afford to buy a jap Import be forced to buy a Rolls Royce. Thats where the building game gets it so wrong making houses so expensive that the poor hard working couple is forced to live in Mum and Dads garage. Take your pick out of this lot.
!, double glazing.
2,insulation fit for the antartic circle.
3, Engineers reports for simple little details that were common sense when building inspectors of the past made the decision.
4,plans that cost three times as much drawing common sense detail.
5,Developers donating bought land, and building roads at the whim of the council.
We have now reached the inevitable where people are forced to rent and the landlord stuck with the GST that the tenant ends up paying one way or the other. The GOVT dont want private landlords but want to control everything.
We are now destined to be a country where private home ownership will decline and the bludging of the GOVT will be the common trend in housing. Macdunk

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Originally Posted by duncan macgregor

That is true, but why should people who only can afford to buy a jap Import be forced to buy a Rolls Royce. Thats where the building game gets it so wrong making houses so expensive that the poor hard working couple is forced to live in Mum and Dads garage. Take your pick out of this lot.
!, double glazing.
2,insulation fit for the antartic circle.

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Well those depend on where you live.
Ive done both. Double glazing was a bit dearer than single but on a scale of things not too much. Strangely I was flogging old windows off on trade me and they were selling for a little less than single glazed new. So in the end didn't cost too much at all.

I also went for above spec insulation in walls and ceilings. Cost a bit more but I did the installation myself so saved a bit there.

Two important consideration. Talking to some friends over Christmas who have a similar situation. two heat pumps, large house in Christchurch. My winter power bill is $350. Theirs is $700. I'm toasty warm they aren't.

Can't see why you'd want to double glaze up north (noise perhaps?) or over insulate (heat perhaps) but MacD's point is quite valid. So many new homes are way over specced. If we want to keep up with the Jones then this is what we must expect.

There are many areas in NZ even in Auckland where you can buy a 3 bedroom 95 sq m modal house on a 750 sq m freehold section for $240,000 or so. There are vast suburbs full of such properties in Manukau, and whole cities worth in provincial NZ. I don't think that is over-priced at all. Analysing, that's $140,000 or so for the land and $100,000 or so for the improvements. On the house itself minus other improvements that's a rate of $950/sq m which is well below replacement cost. And no developer can produce a new section for $140,000 that's a fact as I am in this business. I can tell you that a developer in Manukau cannot provide a section for sale at less than $175,000 or so as the development cost is so high at +$80,000 or so. Council's massive development fees are a large part of the problem. Drainage levies alone are $15-20,000 per section then you have 6% reserve contributions say $10-11,000, waste-water network growth charge of $5,000 or so, new house development levy of $6,000 etc etc. as well as $6-10,000 consent fees, then engineer, surveyor, drainage, electrical, telecom etc etc etc.

At 6.5% interest rate that's $300/week, and on a 30 year mortgage that's $350/week, in both cases less than rent is for the same property in South Auckland.

My company has a few rentals in Manukau with numbers similar to the above, except better, eg rental $380/week, purchase price $210,000, a cash-flow annual return after rates, insurance, maintenance of 7.5% or so on a self-managed basis. All we need now is a bit of capital gain.

The rental market is getting tighter and tighter in Auckland too with rental growth of 5% pa these last 3 years.

Even here in Christchurch there are whole tracts of the city where $240,000 will buy you a solid average house on a full section, and add $100,000 for a significantly better area such as Burnside.

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Originally Posted by OldRider

My dad had a saying he often repeated, and I think it is relevent, "Whenever someone get something for nothing, someone
else gets nothing for something." In my opinion we have have too many that get too much for too little, right through the
economy from top to bottom.

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Agreed.

One thing that is also worth mentioning is the favourability of housing as an investment. Quite clearly investment properties are not treated as investments in the same way as equities are, and the resulting speculation drives up prices.Now I must admit I don't know the full details of the possible AMI rescue, but I believe it highlights this exact point.

What is going to happen to investment properties that are insured with AMI (lets assume that AMI can't pay out in the end)? Will the government end up bailing out these property investors? My guess is that they will be greeted with a smile and a fat cheque.

This would be a travesty, and would just cement the "no losers capitalism" ideology that has run rampant in this country.

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Originally Posted by rpcas

Agreed.

One thing that is also worth mentioning is the favourability of housing as an investment. Quite clearly investment properties are not treated as investments in the same way as equities are, and the resulting speculation drives up prices.Now I must admit I don't know the full details of the possible AMI rescue, but I believe it highlights this exact point.

What is going to happen to investment properties that are insured with AMI (lets assume that AMI can't pay out in the end)? Will the government end up bailing out these property investors? My guess is that they will be greeted with a smile and a fat cheque.

This would be a travesty, and would just cement the "no losers capitalism" ideology that has run rampant in this country.

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Property investors do not get any different treatment than any other investors, and never have done. There would be very few first world countries that would allow an established insurance company to fail in similar circumstances. If they did fail (and they probably won't) the big losers without govt. support would be the banks, as mortgagees - and the most undercapitalised bank in godzone is .....you guessed - Kiwibank, so the taxpayer might have to prop up the taxpayer. Heads you lose, tails, you don't win..

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Originally Posted by fungus pudding

There would be very few first world countries that would allow an established insurance company to fail in similar circumstances. If they did fail (and they probably won't) the big losers without govt. support would be the banks, as mortgagees - and the most undercapitalised bank in godzone is .....you guessed - Kiwibank, so the taxpayer might have to prop up the taxpayer. Heads you lose, tails, you don't win..

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Two wrongs don't make a right.

The fact that other countries bail out financial institutions is a testament to how corrupt and inequitable they are. Too big to fail? Not anymore - its now too BIGGER to fail. If you want to know why the the developed economies of the world are hurting, start by looking at the deregulation, bailouts, and the 'rigged game' that is the financial sector - AMI, SCF etc all included. Capitalism without losers is like catholicism without hell. Oh, and don't pretend it's not true - property investors are a protected breed here in New Zealand, and the special treatment they receive has far reaching consequences.

On a side note, if you want to think about the other reasons why NZ is in an economic hole (perhaps inescapable), look no further than government budget surpluses and the excessive property market. When I get time I may write a post and explain the link between these two factors, and explain how destructive they both really are.

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Originally Posted by rpcas

Two wrongs don't make a right.

The fact that other countries bail out financial institutions is a testament to how corrupt and inequitable they are. Too big to fail? Not anymore - its now too BIGGER to fail. If you want to know why the the developed economies of the world are hurting, start by looking at the deregulation, bailouts, and the 'rigged game' that is the financial sector - AMI, SCF etc all included. Capitalism without losers is like catholicism without hell. Oh, and don't pretend it's not true - property investors are a protected breed here in New Zealand, and the special treatment they receive has far reaching consequences.

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What special treatment do prop. investors receive? I'm puzzled.

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Originally Posted by fungus pudding

What special treatment do prop. investors receive? I'm puzzled.

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Think about the tax that company's and their shareholders pay, and then compare that to what property investors pay. (what they truly pay) :ohmy:

And there are a couple of other small things that irritate me... Terry Serepisos and David Henderson, the fact that there is no law stating 15% of more must be down to take out a mortgage (which would have prevented NZ's credit bubble), and so on.

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Originally Posted by rpcas

Think about the tax that company's and their shareholders pay, and then compare that to what property investors pay. (what they truly pay) :ohmy:

And there are a couple of other small things that irritate me... Terry Serepisos and David Henderson, the fact that there is no law stating 15% of more must be down to take out a mortgage (which would have prevented NZ's credit bubble), and so on.

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Companies and property investors both pay tax on their profits - no difference, except that a property investor (who is not a company) pays a higher rate. Furthermore, property is unique as an assett as depreciation can no longer be claimed. There doesn't need to be a law relating to borrowing. That's up to the mortgagee, and most will insist on at least 15% deposit, unless there is clear evidence that the loan repayments can be met. Commercial property requires equity of far more than 15%. I'm still looking for the advantage.

A Bank ( not sure which one ) is advertising on the idiot box 5% mortgages.

Here we go again... How can a person who can only scratch up 5% deposit pay in excess of $300 a week in interest.

This is just a way of keeping house prices high.

Thus the banks will not be left with mortgagee sales lower than what is owed.

Absolute madness..

I think you might find that the lending criteria will be a little bit tougher than last time.

The accomadation supplement benifit plays a big part in house prices. A typical example of taxpayer transferring wealth to the Landlord.

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Originally Posted by dragonz

The accomadation supplement benifit plays a big part in house prices. A typical example of taxpayer transferring wealth to the Landlord.

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More specifically to house vendors. As you point out it feeds straight into the market. Like all subsidies, it usually does more harm than good to the intended beneficiary.

There is still a lot of houses around that are cash flow positive.Areas like Papakura,Manurewa,Otahuhu.For investing- thats not a bad start and for owners its a start- then work your way up.Its not all doom and gloom!

Arguments for and against the benefits of property investment over others are never comparing like with like.
Where can the average investor gear up with 80%+ of other people's money to earn a potential profit?
Where can they hold their investment through a slump that wipes out much of their own equity other than with property?
Even if all other factors are equal the avergae property investor is protected by the lender through most problems because the lender (bank?) has an interest in holding prices up as a protection of its own equity.
Note that under the lending ratios that banks use to measure risk, property has a real edge over any other.

Yes I can use my built equity in property to invest in other assets but only after I have created that equity. Not only that but it is quite possible to outstrip the returns on property using similar gearing.

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Originally Posted by loofa

Arguments for and against the benefits of property investment over others are never comparing like with like.
Where can the average investor gear up with 80%+ of other people's money to earn a potential profit?
Where can they hold their investment through a slump that wipes out much of their own equity other than with property?
Even if all other factors are equal the avergae property investor is protected by the lender through most problems because the lender (bank?) has an interest in holding prices up as a protection of its own equity.
Note that under the lending ratios that banks use to measure risk, property has a real edge over any other.

Yes I can use my built equity in property to invest in other assets but only after I have created that equity. Not only that but it is quite possible to outstrip the returns on property using similar gearing.

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without losing substantially more than your original investment if things turn to custard ?

.....which is the same for property.

And you cannot get out in the next five minutes..........or without a huge commission/legal cost

And you cannot "short" a rental property when the market does fall or protect your property portfolio by lending part of it to a sucker and buying it back cheaper at a later date.

I am not advocating shares v property but there are just as many property myths as there are about other investments.

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Originally Posted by loofa

.....which is the same for property.

And you cannot get out in the next five minutes..........or without a huge commission/legal cost

And you cannot "short" a rental property when the market does fall or protect your property portfolio by lending part of it to a sucker and buying it back cheaper at a later date.

I am not advocating shares v property but there are just as many property myths as there are about other investments.

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yes point taken Loofa, I suppose those who bought at the peak of the property boom and those who have inadvertantly bought leaking homes would know all about this!

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Originally Posted by robo

yes point taken Loofa, I suppose those who bought at the peak of the property boom and those who have inadvertantly bought leaking homes would know all about this!

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As would numerous investors who totally underestimated the cost of maintaining a domestic property.

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Originally Posted by fungus pudding

As would numerous investors who totally underestimated the cost of maintaining a domestic property.

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Us kiwi's just love investing funds into old worn out low yeilding rental properies

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Originally Posted by JBmurc

Us kiwi's just love investing funds into old worn out low yeilding rental properies

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I have two properties on the coast here in Hawkes Bay which were purchased about ten years ago for low 80's cash each and return 18500 each annually not exactly low yeild , both are valued at over triple this original cost and would be attainable in the current market.

Had to do a bit of painting myself over the years the odd plumber and electrician thingie now and then, otherwise mainance has been minimal.

I think what you are saying is this scenario is ancient history now and there are far better investments to be had , this is timely for me as I find my self scouring the property press looking for another addition at the moment :mellow:!!!

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Originally Posted by robo

I have two properties on the coast here in Hawkes Bay which were purchased about ten years ago for low 80's cash each and return 18500 each annually not exactly low yeild , both are valued at over triple this original cost and would be attainable in the current market.

Had to do a bit of painting myself over the years the odd plumber and electrician thingie now and then, otherwise mainance has been minimal.

I think what you are saying is this scenario is ancient history now and there are far better investments to be had , this is timely for me as I find my self scouring the property press looking for another addition at the moment :mellow:!!!

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yeah property was great buying but those days are over unless property prices crash unlikely or average incomes go much much higher ...

I had for few years a 4brd 1940's brick/roughcast new roof rental 15min walk to the Invercargill SIT use to get 300pw paid 145k sold it for 187k I see years later guys trying to get over 200k for it now also had a 14% yeild 8 block of flats overall stressful investments even with a property manager.

much rather run my own share portfolio which like the rentals has some of the banks money invested ..

everyone different though an I do hope once we've paid off are own home too buy a few debt free near new rentals for some passive income

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Originally Posted by JBmurc

yeah property was great buying but those days are over unless property prices crash unlikely or average incomes go much much higher ...

I had for few years a 4brd 1940's brick/roughcast new roof rental 15min walk to the Invercargill SIT use to get 300pw paid 145k sold it for 187k I see years later guys trying to get over 200k for it now also had a 14% yeild 8 block of flats overall stressful investments even with a property manager.

much rather run my own share portfolio which like the rentals has some of the banks money invested ..

everyone different though an I do hope once we've paid off are own home too buy a few debt free near new rentals for some passive income

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Still sticking to my theory that we will see a rise in property prices in the medium term as I believe emigration will be opened up majorly in nationals 2nd or 3rd term to jump the gun on all the other countries that have the same problem ( note to self , get more Ryman )

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Originally Posted by JBmurc

yeah property was great buying but those days are over unless property prices crash unlikely or average incomes go much much higher ...

I had for few years a 4brd 1940's brick/roughcast new roof rental 15min walk to the Invercargill SIT use to get 300pw paid 145k sold it for 187k I see years later guys trying to get over 200k for it now also had a 14% yeild 8 block of flats overall stressful investments even with a property manager.

much rather run my own share portfolio which like the rentals has some of the banks money invested ..

everyone different though an I do hope once we've paid off are own home too buy a few debt free near new rentals for some passive income

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Have a good hard look at commercial/industrial. It's tough to buy at present, but a dream to own and operate compared to residential.

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Originally Posted by fungus pudding

Have a good hard look at commercial/industrial. It's tough to buy at present, but a dream to own and operate compared to residential.

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yeah for sure esp if the buildings are modern

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Originally Posted by belgarion

Have you compared that to an investment in MFT over the same period? ... (I'll not mention Baidu as you'd puke!)

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I like shares as well belgarion !!! but I tell you property has been very easy for me and I dont really have a huge amount of experience with shares to date but am well pleased with my current placing in the 2011 NZX comp

Im thinking late 19th centry new zealand folk art returns owns most other investment classes lately

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Originally Posted by robo

I have two properties on the coast here in Hawkes Bay which were purchased about ten years ago for low 80's cash each and return 18500 each annually not exactly low yeild , both are valued at over triple this original cost and would be attainable in the current market.

Had to do a bit of painting myself over the years the odd plumber and electrician thingie now and then, otherwise mainance has been minimal.

I think what you are saying is this scenario is ancient history now and there are far better investments to be had , this is timely for me as I find my self scouring the property press looking for another addition at the moment :mellow:!!!

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Poor old behemoth BHP was at $6 in 1988 and is $45 today.
However it was very hard to gear BHP up in 1988 without the help of mortgaging your other property - your home in most cases
THAT is where the benefits of property help the investor -the mortgage liability does not go up with the gain.
BUT you can do the same with shares today
That is the type of logic I put forward in today's market.
No one expects property to appreciate much in the next few years. Other investments when luck or expertise comes into the equation can increase 10 fold in a quite short period.

I can't see NZ property going up much unless we have some major wage inflation(not likely or easy lending also unlikey)..but at the same time I don't think we'll see NZ property prices go down much at with low rates an increasing build costs...keeping a floor under the movement....so IMHO 2010-20 decade will be a zombie decade for NZ property of little movement

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Originally Posted by JBmurc

I can't see NZ property going up much unless we have some major wage inflation(not likely or easy lending also unlikey)..but at the same time I don't think we'll see NZ property prices go down much at with low rates an increasing build costs...keeping a floor under the movement....so IMHO 2010-20 decade will be a zombie decade for NZ property of little movement

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Property prices are now due for another price escalation due to the increased cost of about to be introduced earthquake standards on new buildings. The upgrading of older buildings to higher standards will also increase the end price. Engineers are about to have a field day, with councils passing the blame parcel on to them. New blocks of sections will have to have engineers drill reports so whoopee guys who ends up paying?. The younger generation on the flights out so lets turn the place in to a great retirement home for rich overseas migrants. Macdunk

Just got our new valuation for Henderson, down 5%, yet a similar house up the road sold last week for 330k unconditional 10% above new value and 5% above 2007. House I painted in Glen Eden has held its cv at 355k but sold recently for 385k, again about 10% over. Values were judged up to July so maybe last 3 months has seen a lot of buyer demand and willing to pay over the cv. I think well located and maintained houses with some features such as a view are selling but the rubbish isn't - unlike during the boom.

George go into Realestate Web Sites & see the number of properties that are being advertised below QV in the Henderson area

Hi Possum, most of the ones I looked at on trademe were for sale at 10% over the latest cv, and recent sales at over cv as well.
One not far from here is for sale at 260k, cv 290k, but it has rough tenants with a rotten bathroom floor etc. My read on things at this point is that a well maintained house in a good area etc. is holding or exceeding its cv. Won't know for sure till we sell which could be in 3 yrs or so. Would this be the first 3-4 yr period in Auckland's history when values have decreased - I see Rodney is worse off?

PS. A friend in Mt Albert his cv went from 360k to 390k yet he's in a poor area, ghetto music next door, his house is a mess, so there doesn't seem to be any rhyme or reason - perhaps his proximity to Maioro motorway entry is a factor.

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Originally Posted by George

Hi Possum, most of the ones I looked at on trademe were for sale at 10% over the latest cv, and recent sales at over cv as well.
One not far from here is for sale at 260k, cv 290k, but it has rough tenants with a rotten bathroom floor etc. My read on things at this point is that a well maintained house in a good area etc. is holding or exceeding its cv. Won't know for sure till we sell which could be in 3 yrs or so. Would this be the first 3-4 yr period in Auckland's history when values have decreased - I see Rodney is worse off?

PS. A friend in Mt Albert his cv went from 360k to 390k yet he's in a poor area, ghetto music next door, his house is a mess, so there doesn't seem to be any rhyme or reason - perhaps his proximity to Maioro motorway entry is a factor.

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Qv is not, and is not intended to be the market valuation.

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Originally Posted by George

Hi Possum, most of the ones I looked at on trademe were for sale at 10% over the latest cv, and recent sales at over cv as well.
One not far from here is for sale at 260k, cv 290k, but it has rough tenants with a rotten bathroom floor etc. My read on things at this point is that a well maintained house in a good area etc. is holding or exceeding its cv. Won't know for sure till we sell which could be in 3 yrs or so. Would this be the first 3-4 yr period in Auckland's history when values have decreased - I see Rodney is worse off?

PS. A friend in Mt Albert his cv went from 360k to 390k yet he's in a poor area, ghetto music next door, his house is a mess, so there doesn't seem to be any rhyme or reason - perhaps his proximity to Maioro motorway entry is a factor.

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Qv is not, and is not intended to be the market valuation.

Quote:

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Originally Posted by fungus pudding

Qv is not, and is not intended to be the market valuation.

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I agree FP, another example, house in my street, old qv 420k, new qv 400k, sold last week at auction for 452k. Looked well maintained house and had a full section. With the other examples I quoted it seems that there are buyers in the Henderson and nearby areas pushing up prices since latest valuations were done.

Meanwhile ,our rental in Mt albert rerated at 890000 and taxed accordingly WTF Man do I hate being levied so some silly mayor wants a train to the airport!

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Originally Posted by skid

Meanwhile ,our rental in Mt albert rerated at 890000 and taxed accordingly WTF Man do I hate being levied so some silly mayor wants a train to the airport!

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Just wait till Goff and his crazy mates try charging your EQC levy according to your rateable value. :D

This article lends weight to the first post in this thread about rising compliance costs
http://www.nzherald.co.nz/nz/news/ar...ectid=10764310

The real problem Goerge is an industry controled and regulated by people with no practical no how, making all the decisions at a tremendous wasted cost to the customer at the end. Back in the fifties before leaky homes were invented, the building inspector was a practical man that made decisions with the builder about any minor problems that might show up. Now with resource consents at every turn along with engineers reports that cost a fortune the bastards want to charge $170 an hour to sit on their backsides looking over plans. Then we have people thinking the poor developer is the problem because of the rising cost of the end product. The ratio of developers going broke is much higher than most industries due to all this rubbish. Macdunk

My understanding of qv values is that they do not include value of chattels which can vary from nil to $50k.
Also some changes are not reflected - redecoration, new kitchen/bathroom can be above general in that type and age of house.
You pays your money......

The latest ridiculous cost that first home buyer will get lumbered with is having to scaffold the entire house in order to roof it. The house being built down the road is a single storey home on a dead flat site with a scaffolding cost of $2400. I said to the builder thank the lord i got out the game before this latest stupidity was forced on us. Not only is it expensive, but it is a great hindrunce to the poor roofer trying to negotiate past it.I Built hundreds of houses never used anything higher than trestles on a single storey building. The builder tells me new house prices will sky rocket with most of the builders fleeing the country. The difference in compliance cost including GST from yester year is making owning your first home unaffordable to most. I definately if I had my time over again would never even consider building new houses in NZ. Macdunk

Does this mean scaffold all round for the house for a re roof as well mcdunk

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Originally Posted by winner69

Does this mean scaffold all round for the house for a re roof as well mcdunk

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I would expect so but why not?, if its consistant stupidity. That would cost you nearly half again for a reroof in zincalume. Makes it twice as hard to do the job in the first place.
Macdunk

And next will be the painters for a repaint to do more than just the safety harnes

Quote:

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Originally Posted by duncan macgregor

The difference in compliance cost including GST from yester year is making owning your first home unaffordable to most.

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Not just new houses either.

About 4 years ago I looked at replaceing inrernal electric water cylinder with external gas model.

HWC $ 700
Plumbing $ 250
Compliance and consents $ 1245

Crazy

The biggest bludger in the housing market creating the unafordability of houses for the younger generation is the govt first, closely followed by the council. Lets face the reality of the price structure from fifty years ago before leaky homes was invented. In those days houses were encouraged to breathe treated timber didnt matter. Council costs were reasonable where inspectors could make decisions about minor matters along the way. Land developers did not have to buy and donate land to greedy councils in order to get a small subdivision underway.
Today the Govt in their wisdom changed the building code creating leaky homes, then did an about turn and went over board in the opposite direction, making huge unnecessery costs the other way.
Fifty years ago they did not have a 15% gst levy on labour, and materials, so that alone is a 15% rise in house prices. The council now wont make a decision about anything, and require engineer reports for even the very basic trivial matters. When you look at scaffolding costs added to the price of a basic house on the flat, the whole thing becomes a sick joke. I definately would not be a builder again in this country the whole thing is a laughable sick joke created by greedy incompetant people with no practical understanding of even the basics in building. Macdunk

Quote:

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Originally Posted by duncan macgregor

". . . Today the Govt in their wisdom changed the building code creating leaky homes, then did an about turn and went over board in the opposite direction, making huge unnecessery costs the other way. . . . . "

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Ummmmmmmm Duncan, wasn't it the builders who built the leaky homes ? Isn't the code meant to be a quality baseline not a quality cap ?

Nobody comes out of the leaky homes mess clean.

Sure New Zealand property prices are high:

because local government rations land creating an artificial scarcity,
because New Zealand is a high-cost economy without off-setting economies of scale,
because New Zealand doesn't produce enough (skilled) tradesmen,
because New Zealand is intent on exporting the tradesmen it does produce.

This mess took decades to create, and will take decades to sort it out.

Sad.

GTM3442 most builders told them they would leak but were told to build to the regulations

Quote:

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Originally Posted by GTM 3442

Ummmmmmmm Duncan, wasn't it the builders who built the leaky homes ? Isn't the code meant to be a quality baseline not a quality cap ?

Nobody comes out of the leaky homes mess clean.

Sure New Zealand property prices are high:

because local government rations land creating an artificial scarcity,
because New Zealand is a high-cost economy without off-setting economies of scale,
because New Zealand doesn't produce enough (skilled) tradesmen,
because New Zealand is intent on exporting the tradesmen it does produce.

This mess took decades to create, and will take decades to sort it out.

Sad.

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I refused to build the leaky home and was ridiculed as an out of date stupid bastard by your so called inspectors. Its not the builders fault he gets a plan, then has to stick to it right or wrong. He gets his work inspected by some incompetant who charges the earth, then signs it off if comes up to standard. Leaky home is an airtight exterior cladding with an airtight interior cladding thermos flask effect. The wind and rain blows against the wall on the outside creating air pressure much higher than the air pressure inside the wall. The wall then sucks water even up hill to equalize the pressure. The first leak might be where the plumber screws his downpipe to the wall. Builders regardless of how good cant stop that. Now the idiots realise the mistake in design and have over compensated with huge additional unnecessary materials when the only thing wrong was the wall was not allowed to breathe. I was taught all that as a first year apprentice in Scotland in the early fifties for petes sake thats why I never built a leaky home ever. In times gone bye before treated timber houses built then still stand simply because the walls were allowed to breathe and were encouraged to do so. Macdunk

Saw a comment by Olly Newland that he thought prices In Auckland were only half that in Paris, New York etc.
Adding to my posts of 2 yrs ago, some latest sales in my area of Henderson were
cv 300k, sale 417k
cv 330k, sale 510k
cv 265k, sale 367k (2brm)
A total do-up 2 brm in Glendene bought at auction for 441k, complete revamp, 3rd brm added, sold for 520k 2 mths later.
All these houses needed some work, they weren't flash, which raises a problem I have with many owners, who simply let their places go to crap, bank the capital gain and let some poor mug clean up the mess. This is an unsung cost to owning a home, which, added to all the other inflated costs mentioned in this thread, must keep some folks in continual hardship.
But, is renting a better alternative??

In quite a few cases the CV's are not realistic, 1. being a year or two or more out of date. 2. As you say george, they have been done up to a more or lesser degree distoring the CV value.
All the media focus on is "it was bought for X$ and sold for Y$ a 87% increase and 120% increase over the CV" and not mention the property has been renovated and how much was spent.
Yes still good profits being made, (does the IRD know?? probably not in a lot of cases) but not as much as the media make out
My thoughts anyway

If I am correct New Zealand has (especially in Auckland) one of the highest property prices in the world. Both commercial and residential rents are very high. New Zealanders spend more of their income on housing than any other developed country in the OECD as well. Even in Christchurch property prices have gone up. On the other hand property prices in Wellington are flat.

The constant obsesity by many to own residential rentals, govts silly tax breaks promote it, thus demand is high and prices follow. If govt only gave tax breaks to those building new homes for rentals it would free up used market for 1st home buyers, grow the building industry and housing stock. I am not really in favour of it but I can see a capital gains tax being applied to slow things down in the future