NZ 1st homebuyers are ScReWeD...

[lakedaemonian]

The thing to remember when you say 10000 workers lost their jobs is that they either get out the trade or go overseas. A very large proportion of that number is lost to the industry never to return. when the market turns which it always does, this will inflate house prices at a much greater rate than ever before.
With all the lack of knowledge in the industry by the rule makers inflating new building costs added to this home ownership will be confined to the rich. I can see a major crisis looming with unaffordable rents and house prises resulting in a great exodus overseas by our young people who will be replaced by rich migrants. Macdunk

I would disagree.......

I'm already seeing signs(with my eyes from my perspective so it doesn't mean I'm right) of softening rents in my area.....largely due to homes going unsold and now available to rent.

Available rentals property numbers are growing rapidly in my suburb.....in recent years there have been practically zero as most were rented before being listed.

Same goes for commercial.....in Christchurch along high profile areas like Moorehouse Avenue it was extremely rare to see a For Sale or For Lease sign until deep into 2007.....now it's a completely different story.

In my opinion, I think you are off the mark(at least in regards to Christchurch, but I think across the nation on average) and that your take is overly optimistic.

I think there will be a LOT of money made via incredibly shrewd buying in the next few years, but the profits will not be able to be realized for quite a few years....and I think the building industry is going to be further culled from the indications I'm seeing.

With few exceptions, I believe new construction in the current environment would be madness.

[minimoke]

I would disagree.......
With few exceptions, I believe new construction in the current environment would be madness.

Though interestingly Foodstuffs, Ngai Tahu and some Singaporeans are about to embark on a 20 year project building another 2500 homes in Christchurch when we already have Pegasus town (1800 homes) under way and plans for Wigram (2200 homes). And at a time when REINZ report 950 sections sold in the previous year for the whole of Canterbury and Westland.

[lakedaemonian]

Though interestingly Foodstuffs, Ngai Tahu and some Singaporeans are about to embark on a 20 year project building another 2500 homes in Christchurch when we already have Pegasus town (1800 homes) under way and plans for Wigram (2200 homes). And at a time when REINZ report 950 sections sold in the previous year for the whole of Canterbury and Westland.

It's a strange one eh?!

I have a mate/customer who did extremely well selling much of the property being developed for Pegagsus Town Village, and I have a planned/booked business event with Wigram facilities that may be impacted by the Ngai Tahu residential development.

I simple cannot fathom how these very large developments are going to be sold profitably in the short-to-medium term.

LONG term I think it will pan out......but even with Christchurch Women's Hospital pumping out babies in overdrive I just don't see the demand for such large amounts of new inventory when the net import of new property buyers has swung so low again.

It doesn't add up to me....far, far too much new inventory in the short-to-medium term.

[minimoke]

I simple cannot fathom how these very large developments are going to be sold profitably in the short-to-medium term.

Likewise – buts there’s more than one or two mugs out there. Pegasus town might sound flash but iits got a bitingly cold easterly and how many diggers are still stuck in the sand out there. As for “Marshlands” – to future buyers – theres a clue in the name!

[Jessie]

I note that Golden Homes are offering to build a new house for less than $800/m2. Given the glut of sections available, I should be able to buy a section and build a nice 200m2 house for not much more than $300K here in Rotorua. Or am I missing something? I know spec houses of this size have recently been selling here for $500K-$600K and more. Are house prices going to fall as quickly as oil prices seem to be falling - perhaps they were both artificial bubbles. Some commentators have been warning for a long time of the potential for a huge fall in property prices - eg http://sra.co.nz/pdf/housinghell.pdf. If this happens, the consequences for highly mortgaged owners and for the NZ banking system which carries this $100b+ debt could be pretty awful.

[Dr_Who]

You gotto be crazy to pay $600k for Rotorua unless it is water front.

[Jessie]

You gotto be crazy to pay $600k for Rotorua unless it is water front.

There must be some crazy people then because houses have been selling in Rotorua for $500, $600, $700K without a glimmer of a waterfront.

[Crypto Crude]

First homebuyers screwed, in one year Plus turning shrewd

My examples are for first homebuyers...
other market participants will not fit into this category.... EG, traders, fixed interest rate holders, buffs, long term holders, renovators, big cats developers, long term investors, developers, king pins in operation, multi home owner_______ etc etc etc....
(mack-a-dad-unk-)... this means you.... you big fish in a small pond......

Ok... Today I went out for lunch with my great mate... Last year near the peak he was on the brink of buying... 'I forced him out'... today he told me he bought... at first ise outraged... rampaging... lost for words... not happy... the story he told started to unfold much better than what it was even 6 months ago (when he wanted to buy)...
his circumstances were not all about money etc... family etc...
Ok... house- went for auction at 300k, 3 accepting bidders... all fell through on finance... after that, then went through on market at 270k on open home...My buddy put bid in at 230k... came back at 240k...then 233k... "sell".... I went around and seen the house and saw what potential this house held...
not good area in Christchurch... shirley.... surrounded by state owned... best house in two blocks... 3 bedroom, two double rooms... garden, newish kitchen... 300 per week for 30 years (to pay house off in that time (including interest).... rent (otherwise) half that plus two rooms rent... so perhaps my buddy scored...
Im convinced he will go floating on my advice... I will free carry him if im wrong, its just not possible (with one more rate cut this year)...
....
So, from one year onwards, first homebuyers (in particular) will become screwed turning shrewd as predicted because the market topped out, and in some circumstances houses are being sold on a forward basis of slashed prices of 10% already being factored in... ie... the sellers save the wait, while reinvesting their money at the current deposit rate and making money while market is in limbo... so factoring in further cuts in housing prices as a given with a shot of making money back through reinvestment.... (smart move)... My dad made the same tough call... valued 610k... sold 500k flat... thats almost 50k (b4 tax) next year while market likely continues to fall, or at major major major best market goes sideways....

My buddy will be worse off in the near term... much better off in the long term, perhaps indifferent if all the dots can fall into place... IE renting both rooms, interest rates continue to fall, suburb already sold down and factoring in further slashes (not like that of guns and roses) ....
I hope he is still prepared for prices to fall much further...
In general I have been learning much about shocks in the market impacting on interest rates, output of the economy, LM, and IS curves (its a given bar nothing) I will bet on it if a buff is prepared to take it up.....
EG, sell it to the grandma (off current info) type stuff...
info does change... so if you are that sure (buff) lock it in now...
next year (with further rate cuts, which are a given), it will be a great time to buy...
Minimoke reckons Im A talker... reckons I will stand by and watch the rebound... reckons all sorts............... you watch buddy...
first home, looking for 3.... and those that cant do teach, right?
With a name like that you should become maximoke...
haha... all in good notion.... good luck to all, no matter how trigger happy you are... bang bang... when are you first homebuyers going to pull the trigger????
I hope not for at least another year...!
Re-address the situation in 6 months, perhaps things will change then...?
hummm.....
bang bang...
when?

.^sc

[minimoke]

..not good area in Christchurch... shirley.... surrounded by state owned... best house in two blocks.

Well, there’s the first two rules of real estate broken!

[minimoke]

Minimoke reckons Im A talker... reckons I will stand by and watch the rebound... reckons all sorts.... first home, looking for 3.

SC – looks like we still haven’t gotten the distinction sorted yet. You can only own one home at a time – the rest are “investment “ properties. Both two quite different things!