Good time to but property or just wait?

[newbietrader]

I am thinking of buying a 2 bedroom unit property for myself. I'm based in Auckland. Should I wait ? When is the good time to start looking?

Thanks
Andrew

[lou]

Go for it.

[Blendy]

just go for it. We recently bought a 2 bedroom unit in auckland and there are not that many around, and when there are, good ones get snapped up at seemingly 'any' price. I was involved in some ridiculous outbidding pricing and was amazed at how much people were prepared to pay. Anyway, ended up with a nice place at a good price and was already tenanted so instant income.

I spent a lot of time comparing inner city apartments to suburban units - suburbs won - they are more reliable rentals and no body corp fees, plus you also get potential capital value gain on the land as well. Good luck with your hunt!

[newbietrader]

Thanks for your input.

Blendy, as for your 2 bedroom unit..what is the price you paid if you don't mind ?

thanks again

[Blendy]

under $350k

[AMR]

Go for it. Best time to start was really two years ago.

[Halebop]

All the pundits are saying that they'll be a property shortage in Auckland soon due to:

1. Auck Population growing at 20%(?) per year

Auckland would be adding 300,000 people this year at this rate, which clearly couldn't work. Projections have current growth at 1.6% per annum, falling to 0.7% per annum over the next 40 years. 1.6% is plenty, equating to roughly 24,000 net new bodies in the next year.

I'm not a fan of property but my girlfriend owns mortgage free residential investment properties here and overseas, concentrating on cash flow. Her furnished studio apartments here in Auckland are well located (She stays away from Hobson Street, ANZAC Avenue, Upper Queen Street). Occupancy has been a fraction off 100% over the last 3 years, she has slowly allowed herself to a bit under-rented but has still managed around 10% rental growth in 3 years and the ones she bought just post GFC - 2008 and 2009 - are showing an average 23% capital growth on valuation. Tenants are mostly 'first job' university graduates - both asian and european - in their early-mid 20's - reflecting the front end of the relative demographic bubbble of Gen Y. As a generalisation girls have proved more reliable than boys (Tidier, paying on time) but require a little more assistance early on (How do I get the oven working/dishwasher/washing machine/microwave clock working? etc) and are more likely to call if there is a problem (My girlfriend sees this as a benefit because she maintains the units to a higher standard than competitors which shows through in the occupancy). Net yields after all expenses at time of purchase have generally been around 8%. Most poignantly, my girlfriend treats it as a business and not a property investment. Active management and engagement with tenants appears to pay dividends (literally).

While people will continue to make money in property from 'special situations' - redevelopment, distressed vendors etc, for the most part yields are too awful to justify the sort of capital value increases seen in the past. I'm also suspicious that markets will force governments to increase interest rates at some point, and this may make cash flow for mortgaged investors unproductive.

Demographically two bedroom units in an urban market would be a good choice - for younger demographics it's what they can afford in order to get into the property market, some Baby Boomers will downsize to this sort of property in order to release capital for retirement and the older 'sausage block' units don't have the leaky building stigma.

[voltage]

I am thinking exactly the same but look at the cost now of a 2 bed unit close to city - prob at least $400000

[TEOTIAWKI]

You can get a good, low maintenance brick & tile unit on the city fringe (mt albert, onehunga, sandringham) where there is high rental demand for $350k and under. You might want to speak with a real estate salesperson, preferably one that deals with investment properties, and is willing to send a bit of time with a buyer.

[Pumice]

The Most Overpriced Housing Markets In The Developed World

http://www.businessinsider.com/the-m...ld-2012-2?op=1

Most OECD countries have experienced an inflating home price bubble from the first quarter of 2001 through the fourth quarter of 2006. But many have yet to see their bubbles burst.

Torsten Slok, chief international economist at Deutsche Bank Securities, has a new report examining global home prices.

Specifically, he looks at the relative valuation of housing markets as measured by price/rent and price/income and compares those ratios to historical long-run averages.

Slok argues that home prices in many countries in the developed world are still overvalued. Across the Euro area, home prices are still overvalued by 14 percent.

We ranked the countries by the average over- / under-valuation of home prices relative to rent and income.



NZ & Aus are ranked quite highly. of course if you own a house/rental you will probably disagree with this article and if you dont own, you will likely agree.
NZ house prices dont seem to be dropping, Aus houses certainly are.