NZ 1st homebuyers are ScReWeD...

[Mr_Market]

Here's something to think about. Let's get this thread back on topic.

Auckland market pips Big Apple
http://www.stuff.co.nz/3942865a13.html

The real cost of new homes in Auckland and Christchurch is higher than in New York, Dublin and London, even though a recent report into the steep costs of property around the world says otherwise.

The third annual Demographia International Housing Affordability Survey ranked Auckland's housing market only marginally behind cities like Los Angeles, Hawaii, central London, and New York, using figures which compared the median house price in locations around the world with median household income in those areas.

But when costly local mortgage lending rates are taken into account, the true cost of New Zealand homes is revealed.

Calculations show home-buyers in Auckland on a median income buying a median house on a 95% mortgage fixed for two years over 30 years would expect to pay 62% of their incomes on mortgage repayments each month.

That compares to 52% in New York, 57% in Vancouver, 46.5% in greater London and 33% in Ireland.

And the New Zealand situation could worsen. Reserve Bank governor Alan Bollard decided not to raise interest rates last week, but he threatened to do so later in the year if the housing market did not ease.

And it's not just Auckland - new home-buyers in Christchurch on the median income would now be paying 54% of their income out on mortgage repayments.

Wellingtonians, who are on average better educated and better paid than Aucklanders or Cantabrians, would fork out 49% of monthly income on the mortgage for a median home.

Hugh Pavletich, a Christchurch property developer and one of the authors of the Demographia survey, said the report probably understated the costliness of New Zealand homes because of the differences in the cost of borrowing here and overseas.

"Economists have been irresponsible in telling people that interest rates are low. In real terms they are anything but," he said.

Jeff Matthews, of financial planning firm Spicers Wealth Management, said the figures showed how stretched house prices had become as speculators buying multiple homes had driven the market skywards.

He said "hot" property areas like Gisborne had seen prices pushed up by speculators from other cities chasing higher yields than they could get in the already popular Auckland, Wellington and Christchurch markets.

Based on such figures, Matthews said New Zealand's property market looked overcooked and ready for a correction or stagnancy while wages caught up.

Many investors, however, remain convinced house prices do nothing but rise.

Matthews said that if a 7% annual house price growth was to continue, by 2026 the average house would be worth more than $1 million on household incomes of around $60,000, which was a highly implausible outcome.

But should buyers not in the market wait and gamble on prices to drop?

"It is a dangerous strategy," Matthews said, "and one people were advocating two years, ago. And look what happened."

Matthews recently sold his Remuera home and is renting while his new home is built. The yield on the house he is renting is probably 3% or less, but the proceeds of his house sale are gathering more than 7% interest.

Things might be bad on this side of the Tasman, but they are even worse in Australia. Sydney-siders looking to get into the market would expect to pay 70% of median household income in mortgage payments when buying the median home on a 95% mortgage.

[duncan macgregor]

Its pointless saying i own this sold that or whatever, people with closed minds on any subject are blinded to reality by their own stupidity. The only people that will gain anything from this discussion are the people with open minds who are normally the young.
The negative people on this thread are the people that have never done it themselves, so come out with all the what ifs. I am a builder that has built hundreds of houses for all sorts of people in NZ. Property has been very good to me, as an investment it cant be bettered. I taught my family property management set it up, showed them how. They now have properties that are easy to run, and might be mortgage free if they wished. Thats all we can do is to educate and set up your families future and let the what if people worry about down turns. I myself own very little property i placed most of it in a family trust a great number of years ago. Good on you JOE KING getting people on the property ladder, the country needs people like you. If there is a downturn in property it would suit me just fine. MACDUNK

[JoeKing]

quote:Originally posted by duncan macgregor

Its pointless saying i own this sold that or whatever, people with closed minds on any subject are blinded to reality by their own stupidity. The only people that will gain anything from this discussion are the people with open minds who are normally the young.
The negative people on this thread are the people that have never done it themselves, so come out with all the what ifs. .....
I myself own very little property i placed most of it in a family trust a great number of years ago. MACDUNK

Well said McDunk.
I am only too pleased to help anyone who wants to pick my brain, about anything from property investment to skinning possums.(Oh forgot to mention 2rd in world possum skinning champs 1977)
I have currently 9 people in a mentoring program, my fees are good. A "success pass" from each of them is all I require/demand. ie when each has surpassed their program goals by at least 50%. 100% success rate from 18 graduates so far!
FYI All our major assets too are in trusts or private Company entities for a number of reasons that posters on this thread would do well to learn about.
My time can be better spent coaching success people rather than argueing here.
Good luck Shrewdy I hope you and others like you make it and don't end up bitter disalusioned posters on forums like this. There are enough here already.
Cheers
JK
edit. For those hoping to make a million in the sharemarket, I would suggest have a good look at my share portfolio already posted. I have never believed in the "high risk high reward" theory, apart from the neooa options I would say the rest are NO! risk high reward. I will repost my portfolio in six months for comparison
Cheers
JK

[Mick100]

quote:Originally posted by JoeKing
[
edit. For those hoping to make a million in the sharemarket, I would suggest have a good look at my share portfolio already posted. I have never believed in the "high risk high reward" theory, apart from the neooa options I would say the rest are NO! risk high reward. I will repost my portfolio in six months for comparison
Cheers
JK

I hope your not mentoring anyone in sharemarket speculation JK
I'm vaugely familiar with most of those shares - do any of them have any earnings? I would describe that portfolio as being right on the outer edge of speculation. With a good dose of luck you may get your million with that lot - could just as easily be down by 50% in 6 months time though - who knows. Even the 20 somethings will recognise your portflio for what it is.
.

[Crypto Crude]

great article mr market...

quote:JoeKing
Senior Member
New Zealand
760 Posts
Posted - 29/01/2007 : 8:48:01 PM

Good luck Shrewdy I hope you and others like you make it and don't end up bitter disalusioned posters on forums like this. There are enough here already.

Don't you worry about weather I will make it... I will be just fine... I have no worrys...
As Mackdunk said, and it fits me like a glove.... I have an open mind to everything...
I am not bitter about nothing just that the timing to enter housing now is all wrong...
I am not a loser because I am not happy with 30yrs, $512, 799k....
I am a winner because I have addressed these problems, and have said this can't be the way I want to go forward... 52yr old man and all... If I cop flack then thats that...
If I get put in some category which I no that I don't fit, then so be it...

Joeking had a goal of turning 40K into 1mill in shares...
I have a goal of turnin a 30year loan into 10years.... through shares and a sideways or falling house market over the next two years...
Im currently only holding URA, NWE, AED...
(lost about 1k on UOGO, panic buy panic sell), I have learnt from that...
URA had an unexpected trading halt today... the other two have big announcements due...

The property buffs have been quick to address the historic performance of their property holdings, but they have dared not give us a view of what they think the market will do over the next two years... I addressed it one other time, and Macdunk commited to nothing...
I am interested in the next two years...
I cannot get the same returns in property that the buffs once got... eg the example on page 13 where I would need a 700% increase on my house in dollars terms to be equal with Joeking... (1st house return comparision)....
remember, because my house price is a way higher price, compounding has to work extra hard to get the same increases than that of 20 years ago...
I have a question.... can I possibly match some of your returns in property going forward?...
[8D]
.^sc

[Crypto Crude]

when I mentioned 30years to pay loan off, $512 payments per week, 799k in toal dollars paid....
these were some of the responses I got
-but but, its Other Peoples Money
-just find one reason why you can
-stop and listen, OPM !!!
-don't dwell on it taking 30years
-toughen up

its as if none of the three figures have any importance.... as if a house should blind all else and the figures dont come into any equation of costs vs benefits
the best one was don't dwell on it... 'yeah, don't worry about it mate, you will be just fine, now sc trust me on this one'...
I can find one reason to buy a house, infact I can find more than one reason to buy a house....i can find many....

but then I picture myself as a 52 year old man, with my one house, probably a wage earner because I cannot take risks and have to keep the 512 payments weekly coming, midlife crisis when im 30-40 when I want kids but can't afford them, because I need their rooms for the rent...

mackdunk, theres no way I could put the kids through uni if it was like this....
As many of you now know, I want more than a house at 52yrs...
I am prepared to take risks, I donot want to be tied down, I am not unsuccessful because I don't have a house... I am successful because I have not given up on the three figures and just how crummy they could make my life...
[8D]
.^sc

[The GrandMaster]

Well done SC, stick to your guns. The righteousness from some posters on this site can be overbearing at times.

Good luck

[JoeKing]

quote:Originally posted by Mick100
I hope your not mentoring anyone in sharemarket speculation JK
I'm vaugely familiar with most of those shares - do any of them have any earnings? I would describe that portfolio as being right on the outer edge of speculation. With a good dose of luck you may get your million with that lot - could just as easily be down by 50% in 6 months time though - who knows. Even the 20 somethings will recognise your portflio for what it is.

No Mick I am not mentoring in sharemarket speculation. I am mentoring in success! physical, emotional, financial, phsycological (sp), whatever.
Mick, re your last post. Honestly mate youve got me buggered for a reply!
I thought the reason why people invest was to make money.
I have shown you how I invested no money (of my own) in property to make a million plus$, you pick holes, and argue.
I have shown you how I invest no money (of my own) in the sharemarket to make a million $.. you say "With a good dose of luck you may get your million with that lot - could just as easily be down by 50% in 6 months time though - who knows."
Mick, I could well be down by 10,000% whats a few zeros? or conversly up 1,000% I DO NOT BELIEVE IN LUCK! Further more you say "Even the 20 somethings will recognise your portflio for what it is."
Well I ask you... what is it?? So far it is a portfolio that has evolved and gone from $40k to $450k in just over 2 years.. THATS WHAT IT IS! And I have openly posted its progress as well you know. C'mon that can't be all bad?
I have a broker friend that bombards me with books on share trading, systems, charting techniques, cycle annalysis..... hell what about some plain old common sense! Losers spend time on these threads spouting.."it cant be done". Winners are out doing it, I correspond with them every day.
Anyway we are way off subject, which is "NZ 1st homebuyers are ScReWeD..." and I will say again YES!
By their own inability to say YES I CAN!
Cheers
JK

[JoeKing]

quote:Originally posted by Shrewd Crude

I have a question.... can I possibly match some of your returns in property going forward?...
[8D]
.^sc

Shrewdy, the answer is YES!!!easily ... IF YOU! decide.

And to prove it, I am prepared to enter into a little experiment.
If you would be prepared to put up a small wager on this thread, proceeds to a worthy cause, I will bet you I can buy a home, with no money down, and have the house unencumbered within 5 years.
Now theres a challenge!
Cheers
JK

[trackers]

quote:Originally posted by JoeKing

quote:Originally posted by Shrewd Crude

I have a question.... can I possibly match some of your returns in property going forward?...
[8D]
.^sc

Shrewdy, the answer is YES!!!easily ... IF YOU! decide.

And to prove it, I am prepared to enter into a little experiment.
If you would be prepared to put up a small wager on this thread, proceeds to a worthy cause, I will bet you I can buy a home, with no money down, and have the house unencumbered within 5 years.
Now theres a challenge!
Cheers
JK

With a wrap? [:o)]