Property on the rocks

[Bling_Bling]

The fact that everyone talking about properties, even the our cleaner and the local taxi driver tells me it is time to cash up. Thanks for coming.

[Jess9]

I was reading the other day that maybe the RB won't raise interest rates as by doing so they widen the % gap between NZ and AUS, maintening or increasing the flow of AUS investment into the NZ housing market(attracted by the better yield)and perversly increasing liquidity, and against there desired objective. Sort of makes sense when you think it through.

Mind you with net migration increasing again...

but it must be the end of the boom or nearly there surely?? Investers may have equity but as banks re weight away from residential sooner rather than later, cashflow and equity criteria will tighten - forced sales??

Jus hope I still qualify to borrow and buy ; )

[spector]

I agree with BB on this one. If there's one thing I've learnt in my life it's the great NZ sheep mentality.... everyone has jumped into property because everyone else was and sure as eggs everyone will jump out when they see others doing it. My prediction is June next year.

[tricha]

Crash and Burn!

Just been back to NZ for 10 days, for family things.

Also looked at property in the Coromandel, 4 real estate shops and nothing selling!

Went to Mangahiwai Heads,( spelling might be wrong) same deal, ten shops in the town, 4 Realestate, nothing selling.

The Impression I have got is every town in NZ has an average of 3 subdivisions for sale, no sale!

Interest rates all went up last week, 9.5 % floating rate.

Example - $200,000 mortgage @ 9.5% = $19,000 interest, plus rates, plus insurance, plus maintenace.

Get the picture, Crash and Burn, my money stays in the scary market.

Cheers Tricha

[spector]

It's spelt Mangawhai. Shame on your name.

[Bling_Bling]

Looking at the propery press is amazes me the number of properties that are over $1 million + for sale. IS it me or have the avergae wage in NZ gone up to $1M?? HAHAHA... time for break in the property market, time for a kit kat?

[tricha]

Time for break in the property market - u r onto it Bling_Bling.

It's going to break all right!

A good indication will be the employment market. There could be a lot of un-employed real estate agents coming on stream soon.

Especially at Mangahiwai Heads.

[Bel]

quote:Originally posted by duncan macgregor


the price of the house will increase faster than you can save anyway. This gives you the chance to refinance, with some real money for business, or if you are not up to that, a reverse mortgage for your old age. Most people that i know have only a mortgage free property as their main asset, and are so thankfull for having the brain to buy their first house. All my property dealings increased in value more than the interest rates on money borrowed, with rent paid a bonus. Dont be a silly [:o)] buy your first home. macdunk

I have to say i disagree with you Duncan. I'm certainly saving far more renting right now than a house would appreciate. I've run the figures countless times and it doesnt add up. (it's not like i don't want to own my first home, quite the opposite.)

$400,000 house, $100,000 deposit equates to $2500 every month in interest repayments for the first year. Thats basically my entire income after bills are paid.

+$40,000 in capital gains. (though to access this money i would have to pay thousands to realestate agents)
-$30,000 interest (first year remember)
-$16,000 inflation
-$3000 rates
-$1000 insurance
-$5,000 maintenance (low? high?)

Equals a loss of of $15,000 (very rough figure)

This is versus:
$100,000 invested in the bank at %7.5 (my ROI in the sharemarket for last year was %156 but thats no idicator for this year)
+$5000 after tax
+$20000 savings per year after yearly rent of $10,000 is paid.
-$4000 inflation.

So you can see why i choose to rent cheaply which allows me to be able to save and invest money in the sharemarket rather than dump all my savings into a home and not be able to even add to that savings ammount.

One day I will own a home but my dream now is to do it without a mortgage. Tis alright to dream isnt it?

[tricha]

One more interest rise and I'd say the property market is screwed would be fair comment

House price median eases in January - REINZ
Email this storyPrint this story 12:55PM Friday February 16, 2007

Real Estate
Your Views: Auckland house prices
Fake furniture - tick. Fake family - ticket to court
The national median price for property eased in January to $327,000 from $330,000 the month before, the Real Estate Institute of New Zealand (REINZ) says.

The fall came as the median dropped in the largest market, Auckland, and the fourth largest market, Wellington, while being unchanged in the third largest, Canterbury/Westland.

And while the median fell, the 7566 sales last month were well up on the 6360 in January in 2006. The days to sell median was 38, the same as January last year.

In Auckland the median price fell to $415,000 in January, from $422,500 in December. In Wellington it dropped to $351,868 from $365,000, and in Canterbury/Westland stayed the same at $290,000.

In the second largest market, Waikato/Bay of Plenty, the median increased to $307,875 from $300,000.

National growth for the year was 9 per cent, from $300,000 to $327,000, with the fastest growing region being Southland, which rose 25.6 per cent from $124,250 in January 2006 to $156,000 this January.


Next fastest growing region was Manawatu/Wanganui up 19.4 per cent from $180,000 to $215,000, while Taranaki was third with a rise of 18.5 per cent from $230,000 to $272,500.

REINZ national president Murray Cleland said the trend was a continuation of that seen in 2006.

The growth rate in house prices for major metropolitan areas was slowing after growing dramatically between 2003 and 2005, while the smaller provinces and their cities caught up.

January tended to be a fragmented month and it was not uncommon to see the median price dip a little, Mr Cleland said.

Median price changes in other regions from December to January were:

*Northland, from $290,500 in December to $305,000 in January
*Hawke's Bay, $255,000 to $280,000
*Manawatu/Wanganui unchanged at $215,000
*Taranaki, $270,000 to $272,500
*Nelson/Marlborough, $320,000 to $307,000
*Central Otago Lakes, $422,500 to $432,200
*Otago, $229,000 to $221,750
*Southland, $150,000 to $156,000.

- NZPA

[roddy]

Tricha i think perhaps you are getting a little carried away,our real estate market is far from screwed only those who have leapt headlong into a highly
leveraged position or who are negatinely geared will have any problem,so long as mr average can meet his mortgage and doesnt have to sell,then i dont forsee any problem,sure the market might come back a bit and yes some equity might be lost,and the number of spec houses will slow,others as Mcd
would call this good shopping!

cheers roddy