NZ 1st homebuyers are ScReWeD...

[Crypto Crude]

Bonus bonds are an extremely good investment in the current climate...
infact a great investment...yes 'investment' mini....

mackdunk was hootering and hollaring about Housing being a safe investment in the current market, and I pointed out why would a brave soldier want to invest in a downwards sector/averaging down/falling prices guaranteed (pretty much)...
We were talking about a form of investment where you dont lose money...

And Bonus bonds look as good as they come as far as im concerned...

you dont have to be making money to be getting ahead right now...

.^sc

[minimoke]

Hummm.... I think its time to crunch some numbers and see what I come up with....
humm.... will go through a couple of examples next week....

.^sc

Don’t forget your 350k was 11 months before the peak in November 07 so you need to add in capital gain (the numbers are in this thread somewhere) to get a new value before you knock off 6% (today’s loss); 30% (Bernard Hickeys loss) and 40% (your loss)

[Crypto Crude]

minimoke-Don’t forget your 350k was 11 months before the peak in November 07 so you need to add in capital gain (the numbers are in this thread somewhere) to get a new value before you knock off 6% (today’s loss); 30% (Bernard Hickeys loss) and 40% (your loss)

what capital gain are you on about...?

.^sc

[minimoke]

what capital gain are you on about...?

.^sc

Ooops fallen asleep on this thread?? Go back to your original figure of $330k. Median then increased up until Nov 07 when it peaked at $352k. It would probably be better to anchor your model on the $330 as this was what you originally worked with and it ties to real estate data at the time. Introducing $350k and using this pre-peak just confuses things.

[Crypto Crude]

OH yes....
I see your point... 330k it should be...
but I still dont get what you are saying about capital gains...

the newbie would not have been in the market because prices were peaking out, about to slide...
and the buff, would not be selling to lock in the profits... they would have been buying... buying because 'it was never a better time to buy'...
so...
let alone profit taking to start with...

.^sc

[George]

I received 4 prizes in one draw of the early Bonds in the seventies,
a $500 and three of $10, then the odd $10 for a time. The odds are now
very much worse and I consider them a rip off, although one would have
been better off there over the last year than most other investments.
How about shares? The sharemarket turns before the economy and this
could be sometime this year, no-one rings a bell. Got me a few
TEL shares as they look like at some form of support, not on margin
though, that's too risky at the moment. Can't buy too much as need
funds for our mortgage, probably just as well.
George

[Jay]

Bonus Bonds have been a good "investment" for me.
Have been averaging around 15%pa return for the last 3-4 years.
Don't get too excited, have only a couple hundred dollars that were given to me when I was in my late teens early twenties - a "few" years ago!

[trackers]

Have you seen your banker lately?
I was talking with a ASB rep the other day and was told that a minimum deposit of 30% was now required on investment properties in most circumstances and 20% for general home ownership.That takes an awful lot of ordinary folk out of the equation.
As for your location, myself i stick clear of some of those suburbs you suggested...maybe take a look at Mt Wgtn or Panmure. From past visits..they did seem rather handy to the city, shopping & transport.

At the end of the day, all scaremongering aside, if you have a decent deposit, stable incomes, and a good credit rating you won't have a problem getting a reasonable mortgage...

[minimoke]

OH yes....
I see your point... 330k it should be...
but I still dont get what you are saying about capital gains...

Don’t forget that when you made your call the market hadn’t yet peaked. You were 11 months early. So while in Jan 07 some people were saying property was about to tank there was still 11 months of momentum to keep driving prices (and capital value) up. There was still another 6.6% increase over that time.

So if you’d bought your $330 house in Jan 07 it would have been worth $352 in Nov 07 but in Jan 09 it would be $325k or a 1.5% loss

[minimoke]

So if you’d bought your $330 house in Jan 07 it would have been worth $352 in Nov 07 but in Jan 09 it would be $325k or a 1.5% loss

Now if you had been one of 836,000 fixed rate mortgage borrowers your interest rate on a two year loan would have been 8.2%. If you were one of the 365,000 floating mortgage borrowers your rate would have been 9.5%. Obviously in Jan 09 your fixed term would have expired and you’d now be looking at 5.99% variable rate at Kiwibank. But do your models an the variable rate as this is your preffered option.


If you’d raised your 10% deposit your floating rate interest bill would have been $28,215. But now you are looking at paying $17,790. That’s a $10,425 nett cash saving.

There’s several ways you can look at that saving now. You could either pay it straight back into your mortgage and increase your equity levels and reduce your interest bill by another $600 a year. Or you can think that I now don’t need to be under pressure to earn that extra $15,000 per annum to pay the extra interest. So you could go to today’s Job Talk fest as and say “I’ll do a four day week”. Or you can think “I’m carrying a theoretical $5,000 loss in value but I’m $11,000 ($10,425 + $600) better off in the hand”