George, you have to be congratulated to pay back that much that quickly!! The challenge now will be to continue on with that, in a perhaps slightly more relaxed manner.......
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George, you have to be congratulated to pay back that much that quickly!! The challenge now will be to continue on with that, in a perhaps slightly more relaxed manner.......
The drivle you come out with . How can property prices sustain 10% growth for another 30 years. You think wages will increase so much to support mortgage payements on an average house price of 6million in 30 years??
If wages grew at 4% per annum then the averave wage would be about 150k per year in 30 years, so 40 times the average wage to buy an average house...
You are blinded by your past success. House prices will most likley be stagnant for years.
You can keep raving on about house prices being good buying under the construction cost but you fail to factor in that the land value underneath can drop. Unless of course you are assuming the land has no value in which case property has a long way to fall before it reaches that scenario.
Well property has increased at about 8% for the past 30 years, so on that note your average house will cost about $3,000,000 in another 30 years. However 30 years ago the majority of homes bought were paid for by one wage earner, this has now changed, so that is why the prices can continue to rise, because they are "affordable".
More drivle... they can't continue to rise when we are at a point of two incomes stuggling to afford the house with 30 year loans .
You can't even justify 3 million doller average house in 30 years.
http://smh.domain.com.au/tsunami-to-...911-1k413.html
Starting in Europe, the downturn will spread to the US, China and eventually Australia, he said.
At the centre of the coming debt crisis is real estate, the forecaster says.
"People in places like Sydney or Tokyo or Miami say, 'Hey, real estate can never go down here, we're a great place, everyone wants to move here, there's not much land for development', and what I say is that is exactly the kind of place that bubbles," Mr Dent said.
"Outside Hong Kong and Shanghai, Australia is the most expensive real estate market in the world compared to income."
Mr Dent said Australia's house prices would return to late 1990s or early 2000 levels.
Driving all these changes is simple demographics, specifically the peak of the baby boomers' spending, Mr Dent said.
"We predicted this (current) downturn in the US 20 years ago," he said.
"We said that in 2007 the peak number of baby boomers will reach their peak spending. They would have bought all their homes and then they will start saving for retirement ... and that you are going to see this downturn."
The drop-off in spending will affect everyone, even mighty China, Mr Dent said.
To survive the incoming "economic tsunami", Mr Dent said investors should sell their excess real estate and buy up assets in US dollars.
"Gold and silver are going to crash, they're a bubble," he said.
"Once we write down all these crazy debts, we are going to destroy a lot of dollars that were created in the boom and that makes the (US) dollar a lot more valuable."
Mr Dent is in Australia to promote his book, The Great Crash Ahead - How to Prosper in the Debt Crisis of 2010-2012, and will be speaking at the Secure the Future conference in Sydney and Brisbane in October.
I don't think most are predecting the end of the world belgarion more so a correction which is healhty and normal in any market. A 20 -30% drop would not be out of ordinary and has happenend plenty of times in the past and everthing is pointing to one. If not a drop will be the equilvent of one by the way of flat prices and inflation doing the same thing over some years.
Of course it could go anyway but this is my arm rest chair opinion :P .... only the people with property portfolios disagree ;)
I'm not against property investment but will not invest at the top of the cycle.
http://en.wikipedia.org/wiki/United_...housing_bubble
http://www.marketoracle.co.uk/Article9297.html
Just a quick google around the world.
NZ house prices also stayed flat between 96 and 2001
For the same reasons you have rebutted my point most of your argument is flawed. Getting a bit side tracked on the US housing market which is for a separate thread anyway. I'm not to sure where they are going but the point is it did crash and statistics can be misleading because in many areas houses were down below 40%. It may well bounce back up but the point is there was the opportunity to buy houses a lot cheaper.
The property market in Wellington city is already under a lot of selling pressure with the probability of 150 houses coming up for mortgagee sale shortly with the collapse of a property "investor"/developer here. (I’m not sure if he should have the honour of even been called an investor with his business plan). That will be the start and knock on effect of when these over leveraged investors start to lose a bit more equity they are going to need to sell some to pay back some debt as most are not cash flow positive and subsiding their "investment" with their wage.
Re property rising by 8% a year. Using our modest 2 bdrm villa in Henderson as an example, the cv in 2004 was 235,000. In 2007 just after we bought it was 315,000, altho I had to do it up a lot and had the cv raised to 325k which is about an 8% rise per yr from 04.
But an 8% rise to this year will mean our property will be valued about 435,000????? I don't see any similar houses selling for anywhere near that. At best we may hold our value from 07 but that would mean (I think) that it's the first period in Auckland's history without a reasonable percentage rise in values, bearing in mind that Waitakere has had a 4 yr wait since last valuation.
QV’s Residential Price Index for August shows that property values in the Wellington region are 2.4% lower than the same time last year. Values in the region continue to decrease.
where have property prices gone the last 5 years?? shrewd crude was right. Was better to save more and wait.....
But, also according to QV, parts of Auckland were above their maximum 2007 values with Waitakere just 0.3% below. Our September valuation was 345k which was 30k higher than when we bought so be interesting to see what the new valuations next month will show.
Bung, I don't know if we are better off but we can't be worse off. We now have about 200k equity after 4 years - doubt if we could have saved that amount, but even if we had, we perhaps would now have more choices rather than cheaper prices.
George I live in Waitakere & look at Real Estate out of curiosity. QV Valutions in Waitakere are done by dreamers. Places with QV of between $350000 & $380000 and most of them need $100000 spent on them to bring them up to the standard needed for the Valuation. In some cases a realistic valuation. Would be land value less the cost of removing the mess of a building that is on it.
Bung, 20% or 60k deposit and initial fortnight payments of $1000 but with a max of 1800, this was to be about a 16 yr term.
But with a tailored home loan we were able to pay a lump sum of 5% a yr or 12500, which we have been able to do. We also upped the payments each yr and are now up to 2000 a fortnight. It helped that we each had a gradual increase in income over the period so were able to increase payments as required. Don't forget we are many thousands down compared to fixing for a shorter period than the initial 5 years.
Fungus Pudding they are mostly not selling as vendors are dreaming about getting QV but house need huge amount of money spent on them to bring them up to the standard they should be in. Some are so bad it would be cheaper to demolish & start again than renovate. I am not a carpenter but the faults are so glaring. Than an EX Motor Mechanic can pick it up. SAW some Ex blue Chip rentals about a year old up for mortgagee auction even these needed over $50000.00 spent on them at retail prices to bring them up to standard
Qv looks at what has been happening in the market, not at what will happen. So if, as you say, properties all have quotable values of $100,000 more than market value, or more than they are selling for, the next qv will reflect that. But your comments seem to be a huge generalisation. The qv will generally reflect somewhere close to the figure the property will sell for. Not what the property will sell for minus cost of deferred maintenance.
Fungus Pudding these same houses have been on the market at least six times in the last 2.5 years & they still think they will get close to QV. Nice Houses selling at around QV gives all the rubbish of the same size 7 locality a totally erroneous QV because they do not even look at the houses. If you go to look at house the real estate agent hands you a copy of the QV. I have even had a registered valuer. Value A property that I had a beneficial interest at $100000.00 over its worth because he did not do the required research of the building. I even asked the Public Trustee to ask the inept valuer to refund his exorbitant fee. As in my opinion he should not be allowed to value a matchbox. So a lot of the blame attaches to the Real Estate agents that in trying to get listing give Vendors an unrealistic idea that they will get close to QV. I can even go back over 35 years when in a provincial area where houses in Maori State & Private housing in mixed blocks were given exorbitant GVs as they were in those days as apolitical expediancy.