NZ 1st homebuyers are ScReWeD...

[Crypto Crude]

minimoke-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

I get it...
Yes that was right... I was 11 months early on my call...
That still does not mean there were cap gains...

Housing is illiquid... we're not trading meat here mate...
Remember that the house has to increase in value more than 10% per year when interest rates are 10%... as the interest payments cancel out the return...
add in opportunity cost... ie the 30k deposit you would have had to invest elsewhere...

id say Buying into housing within the last 7 years has not been such a smart move right now, hence the delay in buying for the new cycle to take pace....

Buffs can buy in any cycle... first homebuyers cannot...
there is a major difference...

Im not being argumentitive for the sake of it...
Just how I see it...
wheres my mate mackdunk?
I miss my sparing partner... hehehehe...

.^sc

[minimoke]

Remember that the house has to increase in value more than 10% per year when interest rates are 10%... as the interest payments cancel out the return...

Hmm – not quite. If you want to try a detailed analysis you probably have to put the deposit interest rates against your equity and the mortgage interest rates against inflation. And then tweak them for either gross or net. Then tie in increased equity against reduced interest costs (which then have to be calculated at net, rather than gross interest rates) – and this is getting way too complicated for a Friday afternoon.

[duncan macgregor]

I get it...
Yes that was right... I was 11 months early on my call...
That still does not mean there were cap gains...

Housing is illiquid... we're not trading meat here mate...
Remember that the house has to increase in value more than 10% per year when interest rates are 10%... as the interest payments cancel out the return...
add in opportunity cost... ie the 30k deposit you would have had to invest elsewhere...

id say Buying into housing within the last 7 years has not been such a smart move right now, hence the delay in buying for the new cycle to take pace....

Buffs can buy in any cycle... first homebuyers cannot...
there is a major difference...

Im not being argumentitive for the sake of it...
Just how I see it...
wheres my mate mackdunk?
I miss my sparing partner... hehehehe...

.^sc

I think SHREWDY that you miss the whole point completely.
First of all lets look at what you did starting from the time you introduced this thread. You stuck most of your money on CUE and now have a paper loss of nearly 50%. Its not to bright to fall in love with anything without having an escape policy if it all turns to custard.
Your second mistake was missing the one opportunity to climb on the property ladder when the window of opportunity opened up with low deposits.
People in your position now cant buy a property simply because of high deposits with much stricter lending conditions. Its pointless saying what a smart move you made by not buying when you now cant buy in the first place. The world economies are all turning to custard, the share markets are crashing, banks being supported by gvts,infact i see the money system in danger of total collapse.
The only thing to hold in times like this is material assets like i told you in our little competition where i am kicking your ar*e. Dont trust money mate its only a promise to pay stampted on to a bit of paper. Macdunk

[Crypto Crude]

mackdunk-First of all lets look at what you did starting from the time you introduced this thread. You stuck most of your money on CUE and now have a paper loss of nearly 50%

What the?
Mate...
I started the thread how long ago, and how many months ago did I get into CUE... Ive done plenty of positive things over the last 2 years in shares...
In housing I would be guaranteed negatively geared... If ise in a full time job Id be reliant on my boss to keep me at work because Id GO BankKRUPT in a week without work as the bank would only be too happy to strip that 'bad boy' away from me...

So I showed an example before...
deposits arent too much of a difference when you look at the crashing value of the house... I have regigged the numbers from what Minimoke said....

which option would you prefer mate...

1)a 330k house... 9% fixed loan....10% deposit -> 33k deposit...

2)the same house when this is over for 200k....
fixed at 4% for a decade... with 25% deposit -> 50k deposit...

not a whole lot of difference between deposit rates.... eah dude...

what do others think mackdunk?...
which option is better?
option A or option B...

Mackdunk... please dont go anywhere....
As I said, I want to post some housing figures to show the finance behind the 'debt ridden' housing loans...
I thought you were my mate, why would a mate want me to go bankrupt?
I will post something over the next few weeks...

All you have to do is say you were wrong...
thats all...
dont debate yourself out of this....
You have fallen into 'the pit of doom' over the last 2 years, trying to hold up your argument...

you at least owe me a response when I supply some figures...
peace out... and have a great day...

.^sc

[The Great Gold Guru]

Interesting views on residential property investment. I got very nervous of the stock market in October 2007 ... a couple of months after the first hint of a sub-prime meltdown. Market sold off heavily in August07 ( I was 95% in Oz stocks ) and then rallied very sharply thru Sept and Oct. I sold 80% of my $600k share portfolio over those 8 weeks. The shares I sold I received approx $500k for in NZD. I worked out this morning that to buy the identical portfolio back on Monday would cost me $118,500 !!!. Three of the stock are no longer around as they have gone bust .... $170k saved there ... phew and four of the property stocks are now worth less than 10% of the value they had back then ... $130k saved there. Not a single stock is higher today than it was when I sold it ... even the gold stocks !!. The $500k went into 3 residential properties ... 1 in Dunedin and 2 in Blenheim. All three properties have been absolutely 100% rented from the day I bought them. The floating mortgage payments have fallen 35% and the rents are all up around 8% from the original levels. After costing me a few hundred $$ each month initially the portfolio is now cashflow positive. I will hold the properties indefinetely as I still see further downside from the equity markets. In a few months I hope to fix all the mortgages for 5 years at rates between 5.50% and 6% ....

Auckland apartments .... DONT TOUCH ANYTHING LEASEHOLD ... EVER !!!!

Thought about buying an apartment in Stratis on Lighter Quay in 2002 ... was on the market for $925,000 back then ( we offered $780k but developer said NO WAY !! ... has sat empty for 7 years and just sold on Thursday at auction for $475,000 ... I estimated the ground rent and body corp over the last 7 years would be around $120k .... Total loss from asking price of .... $565,000.

Even freehold apartments such as Stamford Residences in Albert Street are not selling. Of 147 apartments built and completed about 9 months ago ... two years solid marketing , at last count they had sold ..... 2 .... !!!!!

[fungus pudding]

This may have been posted here before. Worth a look.


http://www.youtube.com/watch?v=kUldG...e=channel_page

[minimoke]

This may have been posted here before. Worth a look.


http://www.youtube.com/watch?v=kUldG...e=channel_page

The analogy is poor. Property values consistently trend upwards over time and I have yet to see a roller coaster do that.

As Shrewdy has correctly pointed out property is an illiquid asset so anyone in property does not get to experience the “roller coaster ride” pictured here. Its simple really: you buy and then either sell at a higher value, sell at the same value or sell at a lesser value. There’s only one start and one dip or rise. Not much a roller coaster there. Even if you are using property equity as leverage it’s a dull ride. You have equity and at some point you’ll use that equity for a bigger loan. There’s no roller coaster there either – just a commitment to meet your extra loan payments.

I’d liken it to a Christchurch tram ride. You get on at some point and trundle along observing interesting stuff (but not affected by it) and at some point you can either jump off at a really exciting place, or wait a bit longer and get off at a boring place – or you just take the trip and get off where you started. If you can afford the tram ticket you can afford to decide where you get off.

[Crypto Crude]

mini-
The analogy is poor. Property values consistently trend upwards over time and I have yet to see a roller coaster do that.

As Shrewdy has correctly pointed out property is an illiquid asset so anyone in property does not get to experience the “roller coaster ride” pictured here. Its simple really: you buy and then either sell at a higher value, sell at the same value or sell at a lesser value. There’s only one start and one dip or rise. Not much a roller coaster there. Even if you are using property equity as leverage it’s a dull ride. You have equity and at some point you’ll use that equity for a bigger loan. There’s no roller coaster there either – just a commitment to meet your extra loan payments.

I’d liken it to a Christchurch tram ride. You get on at some point and trundle along observing interesting stuff (but not affected by it) and at some point you can either jump off at a really exciting place, or wait a bit longer and get off at a boring place – or you just take the trip and get off where you started. If you can afford the tram ticket you can afford to decide where you get off.

Mini,
heres the point ive stressed the whole way along...
unless you are a long term investor who has lots of houses and who is prepared to ride this out, then you are devastated by short term movements...
you and mackdunk, and joe king, and a few others have never understood this...
its always been the same view... buy buy buy....
Fixed term rates in the highest echalon dont mean cook a hoot to mackdunk and never will, (because of his favourable long term position...
His long term buying price for rental rates, covers the interest and then some...
eg you buy a house for 40k, and then the house rises to 80k and rent rates increase, but you still have a 40k loan...
it was bloody brilliant for him and you lot when your mortgage requirements were 200 per week, and you were rolling in 400 per week rent payments...
...
It all changed... and that roller coaster is falling off the cliff, not a ledge...
the leverage was gone a decade ago... it will never be the same... ever...
..
as soon as you fess up and post that you were right but wrong...

IE big time wrong advice for a first homebuyer (or any buyer for a matter of fact) then the better.... mackdunk will never be man enough to admit that....
It could be time to troll the thread and bring up some quotes...
ive only mentioned the famous ones...
Man it ****s me off...

you long term big daddies dont understand, and ive pointed it out many many times... I just dont care.... whos right whos wrong...
whos making money whos losing money...
whos looking for excuses to back up their view.... who wanted us to not look for excuses... who will suit what ever view...
who has a clue... I dont know...
All I know is...
.....
....
...
..
.
Its time to get savaged...
holy schmollars that roller coaster had a savage run and now its time to pay for the last 7 years of housing market madness with a double whammy of credit crisis...
mackdunk picked the sharemarket to a capital T...
why did he then call it so totally wrong with housing.....

All I will say is he has a powerful ticker...


.^sc

[minimoke]

Mini,
heres the point ive stressed the whole way along...
unless you are a long term investor who has lots of houses and who is prepared to ride this out, then you are devastated by short term movements...

Shrewdy
And the point you keep missing is that first time buyers do not, generally buy with the idea that they are in property for the short term. They buy with an expectation of getting on the ladder and climbing it. And we should stop confusing first home ownership with owning rental properties – they are two quite different things. If you want to keep bringing rentals into you should start a thread with a different title.

[Crypto Crude]

hey mini...
Im not confused...
I used that example as they way mackdunk looks at the debate,
the way of the buff....

And the point you keep missing is that first time buyers do not, generally buy with the idea that they are in property for the short term

your absolutely right... they look at housing as a 30 year debt ridden life...
New Zealand way of living....
that is why I stipulated that through waiting through the boom, you can cut that mortgage from 30 years to 10 years until fully repaid.....

.^sc