NZ 1st homebuyers are ScReWeD...

[Crypto Crude]

Mackdunk,
I have not finished with your brain yet... ...I see you posting elsewhere!...
You say construction costs keep rising, BUT Whats happening to those costs this year? and more importantly RIGHT NOW?
And have you implemented Fruit loops into your diet as I suggested?...ITS a good source of fibre, so im told...

what are construction costs such as steel, wood, commodity prices going to do over the next year?
And with less projects on the offering, what are builders going to start doing to get projects?
Please come back...
Aerrhrhrhjjjjggghhhhh ititssss ssscccaarrryyyy iiiinnnn hheheheererereeeee..... where have my shades gone?...OH
just found em....

.^sc

[duncan macgregor]

SHREWDY, I will give you the low down on building costs from todays costings to the costings of say thirty years ago. Forty years ago i could cut on the site and construct a 3brm family home with a boy in six weeks from a simple plan and specifications without nail guns,and other expensive machinery. Today the plans and specifications are right down to the last tiny detail and get sent back time after time until they do. The plans consents and specifications take a huge part of the budget in comparrison. Yesteryear galvanised brackets were the norm unlike today where its stainless steel every thing. Todays house in comparison is much more expensive and time consuming to build even with all the modern equipment but no better than they were fifty years ago. You never heard of leaky homes in those days. the builders knew that untreated timber must breathe unlike today where the powers that be are a bunch of jumpted up idiots. To buy a house where costs are escalating is a wise decision at any stage in the market.
I hate to think how many times i argued with building inspectors about leaky homes long before it was a known problem. To buy a house under construction cost is a sound investment for the future at any stage in the cycle. If you are in the market never ever buy a spanish plaster type house unless it has an external air cavity to allow it to breathe otherwise its a leaky home. Watch out you dont miss the market you will never catch up. Macdunk

[Crypto Crude]

mackdunk,
thanks for post replying... It was not the answer I was looking for... It was not even close to the question that I asked...I read the first line "I will give you the low down on building costs from todays costings to the costings of say thirty years ago", and was thinking about not reading the rest....... Come on buddy... I dont give a cock a hoot about 30-40 years ago...30 years ago had nothing to do with the point im trying to make... You say construction costs only ever increase... Im saying you are wrong (over the next few years)...you surely know what construction costs are doing this year dont you?... you dont need me to spell it out for you... Do you?
You just cant admit it... You never give an inch on anything that remotely conflicts with your point of view...
Just admit it... I would have made the biggest mistake of you life had I bought at the beginning of this year when you said those famous words...

.^sc

[Crypto Crude]

here were the questions...

You say construction costs keep rising, BUT Whats happening to those costs this year? and more importantly RIGHT NOW?
what are construction costs such as steel, wood, commodity prices going to do over the next year?

.^sc

[duncan macgregor]

here were the questions...

You say construction costs keep rising, BUT Whats happening to those costs this year? and more importantly RIGHT NOW?
what are construction costs such as steel, wood, commodity prices going to do over the next year?

.^sc

Shrewdy let me simplify it for you. Construction costs regardless of material costs have gone right through the roof. Your builders are all leaving town the market is in a downtrend. The only people left selling in the market are the over extended or builders getting out the game. It all comes back to bite you on the bum. Trades people get paid twice as much in Australia. In 1967 I left NZ in a big downturn in the building game and got paid exactly three times as much in northwest Australia. I got back in 1972 and could name my own price in the NZ market. History repeats Shrewdy watch out you dont get to smart and miss the boat. The sharemarket is dogs tucker the best bet is picking up a real house bargain right now. If we have a real depression which looks highly likely the only thing worth having after your share market plummets is material assets. Macdunk

[ynot]

In a "real depression" would house prices not also go down in value?

[lakedaemonian]

Shrewdy let me simplify it for you. Construction costs regardless of material costs have gone right through the roof. Your builders are all leaving town the market is in a downtrend. The only people left selling in the market are the over extended or builders getting out the game. It all comes back to bite you on the bum. Trades people get paid twice as much in Australia. In 1967 I left NZ in a big downturn in the building game and got paid exactly three times as much in northwest Australia. I got back in 1972 and could name my own price in the NZ market. History repeats Shrewdy watch out you dont get to smart and miss the boat. The sharemarket is dogs tucker the best bet is picking up a real house bargain right now. If we have a real depression which looks highly likely the only thing worth having after your share market plummets is material assets. Macdunk

In a major deflationary or disinflationary event.....which we are conceivably in for the moment....anything requiring credit would be under pressure to drop in price according to my logic.

I do agree that critical "stuff" will hold it's value, or increase in value against paper currency once we've found bottom and inflation kicks in again.

But I think real estate re-inflating will be harder and slower than other tangible assets especially those that do not require credit.

Everyone needs a place to live, but I think a purchased home will not be viewed as much of an investment in the short-to-medium term.....I think we are a long way off from seeing residential property prices even begin to trend upwards.

In terms of capital gains, we could arguably be dead for YEARS until the dust settles.

Our old home isn't moving, even with a VERY sharp price oh well.......always a place to put up the in-laws

Funnily enough our last remaining commercial property is receiving CRAZY interest...two more offers due tomorrow and a meeting with one buyer's group........still silly low yields being offered in quality commercial......we realistically expect to be out of commercial completely in a month.

[George]

If I was a potential home buyer I would be nervous about the current situation.
But it would be vital to save AS IF one did have a huge mortgage, that is to
save the difference between the rent and what would be required to service a
typical mortgage plus insurances, maintenance etc. Do the hard yards involved in
house hunting and pick your spot - this could be some time away I feel.
Who is going to buy all those houses where the developers went bust, surely prices
must drop, possibly quite a lot and for some years to come.
However, our house which has a latest valuation of 315k is now 'valued' at 340k
according to QV. I can't believe that we could get that in today's market and
wonder if they serve any useful purpose as a valuer. It means our 20% deposit has
grown to 33% and by next June will be 42% but if the 'value' goes up even more
we could be down to 50% - fantastic, but perhaps unrealistic at the moment.
If values drop however, that equity instead would decrease to possibly 10-15%.
But as long term holders we can only pay down the mortgage as fast as possible
while enjoying the intangible benefits of home ownership.
The worst that can happen, apart from both losing jobs, is that we will look back
with the benefit of hindsight and see we paid too much and could have driven a
harder bargain.
George

[minimoke]

....... I can't believe that we could get that in today's market and wonder if they serve any useful purpose as a valuer....

The only thing you can use your QV valuation for is to get an assessment of your share of the rates your council wants to charge. My QV is 50% off current market value but I’m not complaining as it keeps my rates bill down.

[minimoke]

here were the questions...

You say construction costs keep rising, BUT Whats happening to those costs this year? and more importantly RIGHT NOW?
what are construction costs such as steel, wood, commodity prices going to do over the next year?

.^sc

For the March 2008 quarter the Producers Price Index (PPI) for inputs measuring the production cost for residential construction increased 5.1 percent, and labour costs (as measured by the labour cost index - salary and wage rates) increased 3.4 percent for building trade workers over the year.

Other statistics show that prices for the purchase of new housing increased 1.1 percent in the June 2008 quarter, following increases of 0.9 percent and 1.3 percent in the March 2008 and December 2007 quarters, respectively. 93 percent of respondents cited higher prices for construction components as a contributing factor to the increase.