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    Legend minimoke's Avatar
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    Default Section Prices

    Anyone notice how silent the doom and gloom merchants are on Section Prices.
    Buyers have experienced month on month growth in value after they hit their lows in June 2008. So from a low of $165,000 we have now seen over 9% growth to $180,000 with more sales done than for a while.

    And that’s one more reason why property prices won’t fall back 30%!

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    They ain't making any more planet. But they are still making more people to fill it.

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    Quote Originally Posted by minimoke View Post
    Anyone notice how silent the doom and gloom merchants are on Section Prices.
    Buyers have experienced month on month growth in value after they hit their lows in June 2008. So from a low of $165,000 we have now seen over 9% growth to $180,000 with more sales done than for a while.

    And that’s one more reason why property prices won’t fall back 30%!

    No it's not. Land prices will fall a long way. There are hundreds of unsold sites around the country. Holiday towns ans coastal properties have dropped a huge amount in some regions. More to go. I have no idea which area you are talking about - but it's an exception.

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    As I said it before, the so called "experts" got it wrong during the boom and they will get it wrong this time round. I personally know a number of so called "experts" completely missed out on the property boom and now too scared to invest when the bubble have burst. Net, net these experts will never make any money.
    Having got ourselves into a debt-induced economic crisis, the only permanent way out is to reduce the debt – either directly by abolishing large slabs of it, or indirectly by inflating it away.

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    Quote Originally Posted by Dr_Who View Post
    As I said it before, the so called "experts" got it wrong during the boom and they will get it wrong this time round. I personally know a number of so called "experts" completely missed out on the property boom and now too scared to invest when the bubble have burst. Net, net these experts will never make any money.
    Do you really think think the bubble has burst? I don't. So far it's let off a bit of steam, but there's plenty more to come.

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    http://www.sra.co.nz/pdf/LandPrices.pdf

    Interesting article by economist Rodney DIckens on section prices.
    For clarity, nothing I say is advice....

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    Legend minimoke's Avatar
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    Quote Originally Posted by peat View Post
    http://www.sra.co.nz/pdf/LandPrices.pdf

    Interesting article by economist Rodney DIckens on section prices.
    I'm afraid the moment an economist start comparing the NZ property market with the NZ one I tend to turn off. I just can't see how you can draw any meaningfull comparrison between a tiny island nation at the bottom of the pacific with one of the worlds largest and most populated developed countries.

    I'm also not overly keen on trying ot compare housing with section affordability. Intersting as it may be htere are too many differnce to draw direct comparrisns - the main differnce being that with housing you can draw an income to help defray your costs. With a section you have zero income.

    And I'm not sure his argument that monopoly developers holding onto sections waiting for demand to recover is a valid measure. REINZ and QV use actual sales in their data - not sections which are bing held and open to sale.

    I'm more intersted in the growing number of section sales (like 615 this September compared with 244 last September with a higher median and average price this September compared with last).

    I'm trying to figure out where these sales are coming from. Locally there is no shortage of empty sections. Pegasus Town is doing nothing and there pretty much nothing happening at Delamain. These two places are probably at least two years behind schedule. Rolleston seems to be the only place where housing is still being built on the section. So I'm figuring the likes of Pegasus Town section owners must be flicking their land on - but prices seem to be increasing - which is at odds with supply and demand. $180,000 for 450sqm at Delemain (near the airport) doesn't look cheap to me.

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    Legend minimoke's Avatar
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    Quote Originally Posted by funguspudding View Post
    I have no idea which area you are talking about - but it's an exception.
    Actually it is all of New Zealand – so perhaps your examples are the isolated ones?
    Last edited by minimoke; 26-03-2009 at 08:12 AM.

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    Quote Originally Posted by minimoke View Post
    Actually it is all of New Zealand – so perhaps your examples are the isolated ones?

    It's hard to measure section prices. The test is will the same section sell now for the price it would have fetched a year ago. In all areas I am aware of the answer is 'nowhere near it'.

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    Quote Originally Posted by funguspudding View Post
    No it's not. Land prices will fall a long way. There are hundreds of unsold sites around the country. Holiday towns ans coastal properties have dropped a huge amount in some regions. More to go. I have no idea which area you are talking about - but it's an exception.
    Funguspudding there are thousands of sections either on market or not that are an overhang from the recent boom

    Where sections are located in core areas (by core i mean not locations where a high proportion of houses are holiday homes) the prices should be relatively steady - movement may have gone up as people consolidate there interests.

    Where most profit (and risk) is to be made are in the non core areas. Recently some mortgagee sales in secondary areas went for about half GV and not all sold. Although i wasn't there for this auction i was suprised at not only the value but lack of demand. Unfortunately GVs were undertaken near the peak in these locations and true value has retraced conservatively about 25%. So still a bargin but more for the longer term unless your buying to build your house.

    Also don't forget that Development Contributions may be payable depending on how the Council's policies apply - some don't charge til sites are developed.

    Bear

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