NZ 1st homebuyers are ScReWeD...

[cantab]

quote:Originally posted by rmbbrave

I think you've got it the wrong way around Cantab.

It is more likely property prices will fall to match the rents.

rmbbrave, I disagree. Existing house prices look reasonable value compared with the land value and replacement cost to re-build the house. Also the immigrants will keep coming in. I note the government has increased the quota for next year.

[cantab]

quote:Originally posted by Steve

quote:Originally posted by cantab

When I'm old I will want to live walking distance from the Post Office, bank...

Cantab, it appears that you are not going to be embracing the electronic age that has email and a cashless monetary system!

Steve, you couldn't get much more embracing than us however there will always be the odd time.

[Halebop]

A historical perspective...

[Steve]

With the discussion on rent growth vs house price growth etc, what would be the equlibrium house price growth rate if rent growth is 4%?

Would it be a linear relationship with other things being equal?

Rents rise by about 4pc a year
A Massey University survey of rents shows median house rents nationally up 3.8 per cent to $270 a week in the 12 months to November. The rise was slightly higher than general inflation of 3.5 per cent.

[trackers]

quote:Originally posted by Shrewd Crude

I see your point macdunk...other peoples money or not... it dont matter.. us newbies are priced out of the market, so it doesnt matter where the money came from....
My point is that 1st homebuyers are screwed...(usually the younger ones)
My deposit for a house has gone all into shares... I can afford a deposit, but I cannot afford 15, 20, plus years... or in my example 30 years...

hey Rmb... u raised a good point.... and that is that we are less likely to get 100% capital growth from property than ever before..

our property market is run by foreigners that buy up our houses, push up prices, and yet the new generation coming through are screwed on like 11, 12,13 dollars an hour...
what good can you do with $400 after tax per week... and $512 weekly loan payments is too large even with two flatmates...
so house prices have been rising through more wealthier internationals..who consider our property cheap... cheap for them expensive for us... expensive for us unless you are already on the property wave of course....
Government raised minimum wage last year and in April this year, and propose again next year... this is a clear signal... lower paid jobs are at the lower aged end of the market...
and the youth need all the help they can get if property is their life long debt ridden goal

Hello Shrewd Crude,

I gotta laugh at the irony of it all.. I'm 24 at the mo, bought my house a little over a year ago, just before i turned 23... Same age as you.

The mortgage sucks, I don't feel the repayments really so im lucky, but to see the mortgage only having gone down a few thousand over a year or so is disheartening...

But the thing is... A year ago people were spelling out the doom and gloom, just as badly as they are now... Prices were going up crazy and it was unsustainable! But the 230k house I bought in Chch is now worth just a touch under 300k, so while i missed out picking up a 150k odd house by 9months to a year by succombing to the uncertainty of it all and waiting it out, least I didn't wait and have to pay 300k! If I sold out now I'd get my 2k odd I paid in principal, plus $70,000 (odd) in cold hard cash.

Moral of the story, next year you may have to pay 350k...or 400k... who knows? If you can get in, get in... imo

[trackers]

quote:Originally posted by Shrewd Crude

I might be egyptian macdunk.... I may want to take everything with me to the afterlife..haha []...
does anyone agree with my summation???, because there aint no way that even at 450 after tax plus two flatmates say 100 a pop each equals 650 less weekly loan payments of 512 equals $138 to survive on...

maybe foodee, you could do it real hard for a few years... get your pay rise and then just, use that extra cash to live on... take the 30year loan, and breeze through until your 52 without kids, because you need their rooms for the dough... []...lol

Yes I have a plan macdunk, it aint nuffin to do with property, the cream at the top dont spend 20plus years to gain a 300,000 investment... so nor shall I... and even if your investment doubles... you are still paying $799,000 in total over 30 years...

my argument has nothing to do with the outlook on property... it is to do with the first homebuyers outlook on their life long debt ridden goal...

I've never seen so many double negatives in my life but anyhoo...

SC, in ChCh and in many parts you can still get a reasonable house for $250,000 (3beds)

$250k minus $20k deposit = $230k
@ 8% over 30yrs = $780 / fortnight or $390 a week. 2 flatty's in at 100 a week each and you're copped with $190...Easy

[Dazza]

chch.....

cheap land..

try auckland pls.. be4 u speak lol

[Crypto Crude]

Trackers... I have to take a risk and assume house prices are going to fall... Im going to sit this one out... I can't justify a purchase at the moment...
all the signs are pointing to a slowdown... Then maybe I will have an opportunity after a slowdown... I will plood along, build up my deposit, through share portfolio growth...if house prices fall say 10%, interest rates fall within a few years, then I'm looking at a 10 year loan... rather than the full monty at 30yrs...
I want a family so the two flatmates situation could only be seen as a temporary thing...
If house prices continue to rise, then thats ok too... there are other paths, and I dont think im just limited to housing...
I will continue to focus on shares over the next few years... and only look to property if it becomes more in my favour...

[SEC]

SC, Daz etc (all you 20-something wannabe property owners):

Yes you can analyse to death the merits of owner occupier property on a spreadsheet etc but at the end of the day intangible influences may well have the final say - the GF/fiance/wife/family, not to mention other intangibles such as the feelgood factor of being on the property ladder, knowing you are not paying dead money rent, satisfying your (or your partner's) creative influences when it comes to renovations, no landlord to kick you out when he decides to sell the property etc etc (these intangibles I've learnt the hard way!!).

I would save that s/sheet analysis for any investment property you may choose to buy. At the moment one would be nuts to buy investment property in NZ or Aus compared to other asset classes such as shares (unless you are extremely well informed on the likes of mortgagee sales). That is why I've sold all my NZ properties over the past two years (and drawn most of the equity prior to reinvest in the ASX). Gross rents typically less than 5% in NZ (and even less in Australia), rental PE ratios at bubble levels, negative cashflow for years, it doesn't auger well for property investment at the moment...

SEC

[The GrandMaster]

quote:Originally posted by SEC
not to mention other intangibles such as the feelgood factor of being on the property ladder, knowing you are not paying dead money rent, satisfying your (or your partner's) creative influences when it comes to renovations, no landlord to kick you out when he decides to sell the property etc etc

or any alternative view could be....

the feelgood factor of having the freedom to move about without being to tied to bricks and mortar, knowing you are not paying dead money in interest, satisfying ALL your interests by not being stuck in your home all weekend painting the hallway, no painful real estate agent to deal with when you want to move on etc etc

TGM
Disc: a very happy renter