NZ 1st homebuyers are ScReWeD...

[minimoke]

Sections sold in Cromwell in 1995-1997 for between $10,000 - $15,000.

So whats changed?

Since the Clyde was commissioned in 1992 I guess they aren’t building huge great dams and flooding the town any more for a start. Places in Tekapo also went for a song once the canals were finished but you can’t get much for your money there now – except you might get some bargains in that odd airport development.

[upside_umop]

Thats also true....land settlements were done well before then anyway and there was an oversupply of sections (a lot of the 'new' Cromwell houses went on to Twizel).

Anybody know what national average prices were around then? This might be more representative.

I am of the opinion that land values will drop, but the immediate drop wont be large...it will be over time as inflation eats away at the nominal price. The RBNZ doesnt want its own financial crisis here in NZ.

Maybe we should run some friendly bets? SC is always keen, eh Shrewdy

[Crypto Crude]

How about we bet on if RBNZ cuts OCR on Thursday...
I bet you one hundred dollars that the OCR will be cut on Thursday, 5 to 1 odds...
how about that one upsee down?

Fixed termers, this could be the mother of all cuts... make sure you got a fresh pair of gruds handy.......... some are calling for a cut of 2% (unlikely)... could be .5-1% cut...

.^sc

[fungus pudding]

Now your getting nit picky. All i said was the bank failed them on finance because their valuer disagreed with the purchasing price. Im not even bothering to read after your first sentence because you obviously misinterpreted what I had said.

No. You said valuer went to the property and failed it because of a power line. The property was not worth what it had sold for (conditionally I presume). All of which is irrelevant. A purchaser cannot walk away from a contract which is subject to finance because of a low valuation. He can only avoid the contract if he can't raise finance. Nothing picky about that. It is the law.

[minimoke]

Fixed termers, this could be the mother of all cuts... make sure you got a fresh pair of gruds handy

You keep missing the point SC. Fixed termers aren’t worried about changes in the OCR they are locked in and that is just fine. They ride out the increase in rates the same way they’ll ride out the decreases. Its the people on the floating rates that are keen – they want to know what Christmas bonus they will be getting – and wondering if the floating is going to get below past but current fixed rates. Some of us have both a fixed and floating debt. As the rates come down I’ll be paying more off the floating debt – which is all part of the plan!

[minimoke]

The property was not worth what it had sold for (conditionally I presume).

If we are being picky – a property is worth exactly what it sold for. In this case it sounds like the bank wasn’t prepared to lend on their ratios at that sale value – it would no doubt have lent a lesser amount had they been asked.

[upside_umop]

If we are being picky – a property is worth exactly what it sold for. In this case it sounds like the bank wasn’t prepared to lend on their ratios at that sale value – it would no doubt have lent a lesser amount had they been asked.

Exactly....

[fungus pudding]

Exactly....

The important point is that many purchasers sign an offer conditional on finance, and treat it as an option that they can walk away from if the valuation is substantially lower than the asking price. They can't.

[upside_umop]

Yes they can.

Ask some agents how many deals in the last 12 months have fallen on finance and not gone through.

Maybe in 'law' they cannot walk away, but a provision in a contract is just that - a provision. And if its proviso is finance, and it has fallen through you cannot make them pay.

Most people if they had the money wouldn't be having the clause subject to finance.

First home buyers don't have the funds to be held liable to purchase.

Thats what this thread is about...first home buyers.

[minimoke]

Thats what this thread is about...first home buyers.

When SC started this thread banks weren’t so worried about complex sale / purchase agreements – they just wanted to know a person could repay the loan. So other doors are now closing for the first home buyer – banks want higher deposits, and they want proper valuations. First home owners are getting screwed – but not by a rising market!