NZ 1st homebuyers are ScReWeD...

[bung5]

Fungus Pudding What I am saying is people are asking QV and the buyers are not buying because the owners are dreaming about getting QV for their dilapidated houses. Those at realistic prices are selling some above QV. QV is not worth the paper it is written on. I did not say they were selling for $100000.00 below QV but that is all you would want to pay for them.

I agree with what you are saying. The best place to get a realistic price is the mortgagee sale..

[George]

This is what seems to be happening ie. quality, well-presented properties are selling. A few years ago crap would sell, we know because we couldn't find anything decent (early 2007) and this little 2 bedder needed a lot of work which I was able to do myself, now we love it and with flowers, gardens, trees, a great view, fairly private from neighbours, close to everything, we would be disappointed if it was valued below what we bought it for.

[POSSUM THE CAT]

HIDDENGEM you pays your money & takes your choice have a look at the 1991 property slump. Bought a nice house on the north shore of Auckland at what was owed onit plus a reduced land agents fee to allow the owners out without a debt burden. Paid $112000.00 rented it out for $250.00 per week so shop carefully

[HIDDENGEM]

Thanks POSUM THE CAT

[kelfy]

This is the first article of this thread which is written on 2007. I bought a unit at the end of 2006 which cost $300k. Now is year 2016 and the value of return is great. It wasn't ScReWeD ​at all.

New Zealand is at the beginning of a first homebuyers crisis...
lets assume NZ median house price is $330,000 .... and you pay a piddley deposit of $30,000
-also assume interest rates are 8%
-number of years to pay the loan off are 30 years
-loan amount is $300,000, after deposit is paid

you therefore get....
Year 1 2 3 4 5 6
Beginning principal bal 300,000 297,352 294,492 291,403 288,067 284,464
payment 26,648 26,648 26,648 26,648 26,648 26,648
interest component 24,000 23,788 23,559 23,312 23,045 22,757
principal component 2,648 2,860 3,089 3,336 3,603 3,891

-and so on, for 30 years
-in the first year you are paying $24,000 in interest only... wow... and only $2,648 is coming off the loan balance at the end of the first year...
-so, your house value has to increase 8% in the first year... (24,000/300000) just to break even and cancel out payment for interest only (8%)
-year 2 opening balance is year 1 beginning principal balance less principal component
and so on...
-so for 30 years you are paying $26,648 per year or $512 per week, every week.....
-total amount paid to the bank after 30 years is $799,440 ...[:0](26,648 * 30)
-the above example doesnot include the benefits of what you save in rent by having your own house

I have only ever been told to buy a house, by parents, friends, every single person I have gone to, to ask for advice has told me to buy a house... The housing success stories are all to common for people who are 5plus years older than me and beyond...

but yet, I look at the above loan amortization table... and cannot see a path...
I am 22, student, without a house (of course)... and cannot allow myself to be a 52yr old man, and have a house only... so I looked for another means... I spent two years just looking at shares, and the last 2 years playing high risk shares, with much success I add... I applied a simple strategy where I invested in high upside, low downside... trouble is finding a share with these characteristics... any way....
It is always a goal of mine to have a house... but It will have to be paid largely in cash...

Or I will need a combination of a few events happening...
-house price falls dramatically
-interest rates to drop, (not likely in the next year) but interest rates will drop in the medium term
-rental rates to increase dramatically, so house buying becomes more attractive
-wages to go up massively (yeah right)
-large govt incentives...

we are due for a housing fall... If you are a first time house buyer, dont be fooled into housing by others... let the numbers speak for themselves...the only way to make house buying attractive is large front end payment, or up weekly payments.up $500, yeah right...
any more than 15years spent to pay for a house is far toooooo long!...(for me)

at $500 per week for 6 weeks equals 3 thousand, a nice sized share parcel... we are going to be a generation of renting property, or inheritance... I want neither...

they say there are risks in buying a house... no theres not... theres no risk in doing what everyone else is doing, because at the end of the day everyone will be in the same boat... and either all better off, or all worse off... there aint no risk in that...
to get ahead in life you have to take risks....

I have heard that many property buffs are changing their views on apartments... I heard of apartments selling recently as low as 55k in auckland...
if you are pondering a first home, then all the best, wheather you buy a house or not, it will still be the largest decision you will ever have to make
Thank you for taking the time to reading the above...

[ari]

With all the land being released by Govt, why not take the land issue out of new build equasion and Govt lease the land to new home owners.

[G on]

Govt leasing would be modeled on maximising return on investment and would be like having a mortgage that would never end. Would only work if all land was owned by govt since Treaty where there was no other option, IMO. It would need a benevolent govt tho.

[fungus pudding]

With all the land being released by Govt, why not take the land issue out of new build equation and Govt lease the land to new home owners.

No benefit unless land lease is less than interest on capital required to purchase. Wouldn't make sense for either lessee or lessor in current economic environment. Besides the prime lender, usually a bank, will often view leasehold tenure as a less attractive security than freehold.

[Sgt Pepper]

No benefit unless land lease is less than interest on capital required to purchase. Wouldn't make sense for either lessee or lessor in current economic environment. Besides the prime lender, usually a bank, will often view leasehold tenure as a less attractive security than freehold.

Just thinking about the comparison to the most febrile property market in the world London. Significant chunks of prime residential real estate is and always has been leasehold. Doesn't seem to stop Barclays, HSBC from advancing mortgage finance to eager buyers.

[Bjauck]

Just thinking about the comparison to the most febrile property market in the world London. Significant chunks of prime residential real estate is and always has been leasehold. Doesn't seem to stop Barclays, HSBC from advancing mortgage finance to eager buyers.

DYOR but I think it depends on the terms of the lease and the differences between English and NZ law - frequecy of ground rent reviews, how they are calculated etc? I think some ground rents are at near peppercorn rates and other terms enable them to be treated a though the land were freehold.

I think St Johns and Cornwall Park ground rents in Auckland range from 5-7% of the land values fixed for about 7 to 21 years. So they are expensive, although less so towards the end of the period (depending on the intervening land price inflation.)