NZ 1st homebuyers are ScReWeD...

[Yossarian]

Also, I love it how we (the young) always get generalised into the 'can't wait, must have' catergory. It's through the work of our elder generation from which this has been possible. Ie. Easy credit. Its also through the work of our elder generation which has lead to this housing bubble, and essentially passing on the debt to the younger generation of New Zealanders.

Totally agree. I also despise the way our generation is always characterised as flaky and spendthrift... note Pero's reference to lattes and wines. that really pisses me off.

[Sid]

So Shrewd Crude may have lost his opportunity. It looks like by the time he is ready to buy he’ll need to scrape up a larger cash deposit than envisaged at the start of this thread. The drop in property values won’t make up for this. A $300k house he might have needed a 10% / $30k deposit. If this house drops in value to $250k he’ll now need a 20% / $50k deposit. It might have been easier to ride out a $50k loss in property value than find an extra $20 in cold hard cash!

I think anyone would take finding an extra $20k of cash over a $50k loss anytime. If more buyers have to put down a decent deposit before buying, the more chance that house prices will continue to fall.

[Yossarian]

ASB is as of today restricting all home lending for new customers to a maximum of 80%.

Where did you get this info from? Very interesting.

If all banks go back to capping leverage at 80% this will take a large number of potential buyers out of the market all together. Surely that would have a further negative impact on prices.

[Tok3n]

Saving for 20% deposit isn't hard even with high house prices these days.

I think they should make it 30%..covers the potential fall

[CAM]

re ASB

http://www.nzherald.co.nz/business/n...ectid=10535536

[Crypto Crude]

Thanks for that Cam...

decision last week by GE Money Home loans to pull its 2 and 3 year fixed mortgages.

Humm... I wonder why....
Credit is going to get a whole lot cheaper...

minimoke-So Shrewd Crude may have lost his opportunity. It looks like by the time he is ready to buy he’ll need to scrape up a larger cash deposit than envisaged at the start of this thread. The drop in property values won’t make up for this. A $300k house he might have needed a 10% / $30k deposit. If this house drops in value to $250k he’ll now need a 20% / $50k deposit. It might have been easier to ride out a $50k loss in property value than find an extra $20 in cold hard cash!

Hey mini...
The only lost opportunity was buying any time after I started this thread... Theres still lost opportunity through going out and buying now...
Still a good year to go before urgency is required...
A larger deposit is neither here nor there for me...
Ive got my 30k, and I will be full time working next year so add 10k...
and then performance on the sharemarket.. At very worst under extreme circumstances my portfolio could go sideways... I doubt it....
DOW could fall through 8500 points...
Oil could hit 70 bucks... doesnt matter....

House prices are falling all through the Western World...
As Foreigners make up a part of our housing market---> when overseas prices fall, those foreigners would sell New Zealand Assets to buy cheaper ones overseas...
This will continue to put downward pressure on NZ homes, compounding to the current state of the NZ housing market...
The US market has been falling for years and we have only been falling for 9-10 months...
exciting times ahead for those that wait...
everything is on track mini... dont worry about me...
hey look... dow down 350... yeah harrrggghhhh...

.^sc

[duncan macgregor]

SHREWDY, The only thing you have to consider in a long term house investment is construction cost. Buy a house like i have recently done at below construction cost, and sleep easy. Construction costs seem to keep rising along with rents. The markets will crash, or inflation goes sky high, or we head into a depression, your house will always hold its value. The only thing worth anything in the end are essential material assets that are held long term. YOUGOTTAHAVEAHOMESHREWDY even a bird builds a nest before it starts a family. Money is a promise written on a bit of paper that can blow away in the wind. bricks and morter my good man are a much safer bet. Macdunk

[Dr_Who]

I agree with Mcdunky. Buy below construction cost in a good area. In a good area there will always be demand and it is easy to rent rent out. I am now looking and buying. Why? cos everyone says it is a bad time to buy and the fear factor will sell me good cheap property below construction cost.

Hey Mcdunk, how much will it cost to build a decent 3 bedroom house these days in Epsom, Remuera etc?

[Crypto Crude]

mackdunk-
1)SHREWDY, The only thing you have to consider in a long term house investment is construction cost.
2)Buy a house like i have recently done at below construction cost, and sleep easy.
3)Construction costs seem to keep rising along with rents.
4)The markets will crash, or inflation goes sky high, or we head into a depression, your house will always hold its value.
5)The only thing worth anything in the end are essential material assets that are held long term.
6)YOUGOTTAHAVEAHOMESHREWDY even a bird builds a nest before it starts a family.
7)Money is a promise written on a bit of paper that can blow away in the wind.
8)bricks and morter my good man are a much safer bet. Macdunk

1) The only thing I care about is current sentiment and where prices are headed over the next 3 years to time entry at the lowest price so I can hold for the long term...
2) I sleep very easy... yeah haarrrghhh... "buy an asset below future earnings and sleep easy"
3) refer number 1)... will input prices such as wood, brick, Steel and all that not fall in a recession? what have these prices been doing in the recession? are costs RIGHT NOW rising or falling?
4)Will that house hold its value? what about this year?
that inflation you are talking about is erroding away at your house value..
inflation pressures are falling...
5) refer 1) and 3)... ITS NOT ABOUT LONG TERM, ITS ABOUT CURRENT SENTIMENT... I suggest you add fruit loops and soy milk with your breakfast...
6) yes, and birds also regurgitate food to their young...
Ive explained this all before... Your $100.. (or what Im currently paying $80) per week goes down the drain.... YES.....BUT, its what you can do with the money you did not put into the house deposit, that you can use to work for you...
If you bought that house then the money you have goes into the deposit... So not only are your returns in housing currently getting erroded by falling prices, your returns are getting erroded by your opportunity cost, (and inflation)... its what you could do with that deposit had you not bought the house... For example... if your deposit is $30,000... and you can return 10% after tax per year... then you return $3000 dollar per year, or 60 bucks a week making renting subsidised by your returns...
rent is effectively free for me right? perhaps not in the last 2 months...
those high interest rates are a killer for the Fixed termers eah!
then theres all the other costs...
there will be a time to buy housing (for the average punter)... there will be time for the average punter to return in housing and the sharemarket... They both wont perform in either now...
7) true...
8) maybe so... but I can afford to take risks in an attempt to cut that loan term in half and evade the mid life crisis...

Mackdunk,
we face the same recession even though we are in different asset classes... Dont tell me that its good for housing and not good for shares...
Dont tell me that its good for you and not for me...
Housing has been dump trucked this year... The Sharemarket has been dump trucked this year... So you have performed this year in house, and So have I on the markets... AKK, WHN, LMPO, LMP, RPM biggie... all profitable... ...VPEO sideways for me....
losing on CUE, CTP, CTPOA, TEXO... last three are all small positions....
and then theres 07, 06...
CUE done well considering when I got in and how much the DOW and Oil has fallen since... down around 16% on that...
Yeah you can find special investments... I can too...
Gotta shoot... catch you up...

.^sc

[neopole]

i see that the tele had a 2005 re-run of location location location on again this morning.

is this to drive up the market, or a bit of nostelga about the hey days of speculation?