NZ 1st homebuyers are ScReWeD...

[minimoke]

Looks like Bernard Hickey view isn't too negative

I don't count real estate agent views as anything but the usual BS.

Bernard Hickey is a Journalist – his responsibility ought to be reporting the news – not trying to create it. But I guess if you are trying to sell advertising anything goes.

As for real estate agent views, that’s a given - so many of them haven’t a clue how to even market a property yet the media look for their views on the economic climate. A paper will obviously stoop as low as it needs to so it can fill a few more column centimetres.

[Dr_Who]

I don't count real estate agent views as anything but the usual BS.

Amen

When are we gonna seen changes to the realty sector? The sooner the better.

[upside_umop]

NZ property is nothing like the US property market.

True to a certain extent...

To compare it is totally wrong. I have been looking at both markets and there is clear differences. This was highlighted in an article I posted a few pages back. US property investors have no recourse on the property and can walk away without the fear of the bank coming after them.

To compare it is not totally wrong. Economic factors are the main correlation which determine asset prices. That and monetary policy. And from those two a whole heap of factors are dictated...ie unemployment, immigration which as we know has been very low as of late.

Policy has an effect, too. So your right, walking away from your house in the US will add to the adverse effect they experience.

But the financial crisis that we are in now, was caused from the US subprime crisis. That crisis has frozen money etc you know what its done. What does that do to a small, open economy? You see the effects now:

*The NZD has depreciated immensely - Not good for when we need external borrowing. Investors are risk reward orientated. We rely on investors a lot to fund our short fall. The NZD has been very volatile. Risk is defined as volatile. Risk means more reward. More reward means greater interest rates. Combine this with a frozen credit market and you get the picture.

*Commodity prices have fallen through the floor. NZ is a commodity country. Dairy, lamb, beef etc. A little bit of oil. This just makes us more vunerable in such conditions. Again, more risk for the external investor...more reward...higher rates.

As other posters have pointed out, different states in the US of A have different policy with regard to walking out of your home and sending the bank your keys. Maybe you could find out how many states have that policy? The US of A has things over the NZ economy too. How about a large, diversified, internally focused, GDP (or GNP as the slightly different, but equivalent form) base?

Our property market is more similar to the Aussie property market. NZers will always love properties. This will never change, especially with the lack of protection for the average investors in the equities market and recent finance market. The average "investment advisors" out there are from car sales and insurance back ground with no knowledge of finance or business.

Similar to Ozzy market...hmm. Similar economic policy. Our economy has been in recession for the whole year and is expected to be dipping in and out of it for the next year according to most economists. Bollard thinks its over, but also backed himself up by saying 'statistical' probabilities could prove we were/werent in recession. Even given this, its obvious our economy is weaker than the Australian economy and we will suffer more. Our house prices have already fallen on average (median) by around 10%. The Australian is according to your article only 3%.

Your article also states many differences between the NZ market and the AUS market.

*Supply of houses - Rents have been rising in AUS but falling in NZ?

*Negative equity. More so in NZ because houses are already 10% down on average and more down for the lower end first home buyers. Combine that with 100-110% mortgages and it affects the ability of home owners to buy 'second' properties immensely.

*Unemployment. They're not expecting high unemployment in AUS but they are here in NZ...around 6% - about the same as US of A?

*Less skilled people losing their jobs....AUD do very well at attracting skilled labour, no offence but NZ gets international students and gives them residency for getting jobs in clothing store and corner shops.

There is heaps of differences in all markets, as well between NZ and USA and AUS. But there are strikingly similar factors too. Time will tell I guess.

Housing heads for a soft landing

http://business.smh.com.au/business/...f0.html?page=1

Here goes a NZ article with a little about the NZ market at the bottom. Still falling next year.

http://www.stuff.co.nz/4782392a13.html

'Not expecting a recovery until 2010 for houses....'

Sounds like we're on the button SC

[Dr_Who]

No point going round and round in this threat.

I am putting my money where my mouth is and have been active buying again in the property market. I am in it for the long haul. I guess time will tell.

[upside_umop]

Fair enough, but as we have said, for first home buyers timing is everything.

Just out of interest, how many properties are you looking to buy?

You must be paying more for your houses now than what you sold them for in 2005?

[Dr_Who]

Fair enough, but as we have said, for first home buyers timing is everything.

Just out of interest, how many properties are you looking to buy?

You must be paying more for your houses now than what you sold them for in 2005?

Interestingly, if you keep your eyes and ears open you can get some very good price properties with desperate sellers. You have bargaining power when you give them cash unconditional contract. Take it or leave it is my negotiation strategy. If you can get a property at bargain basement prices, who cares where the market goes, cos average prices mean **** when you can get it at good bargain prices.

Abit like buying a new Sony 42 inch flat screen Full HD TV at auction for $1500 when it is retailing for $2500.

[Financially dependant]

Interestingly, if you keep your eyes and ears open you can get some very good price properties with desperate sellers. You have bargaining power when you give them cash unconditional contract. Take it or leave it is my negotiation strategy. If you can get a property at bargain basement prices, who cares where the market goes, cos average prices mean **** when you can get it at good bargain prices.

Abit like buying a new Sony 42 inch flat screen Full HD TV at auction for $1500 when it is retailing for $2500.

So are you saying you are buying at 40% discount to advertised prices?

[fungus pudding]

So are you saying you are buying at 40% discount to advertised prices?

Advertised prices are irrelevant. It's discount to market value that matters. The best buy I have ever seen was purchased at full advertised price.

[Financially dependant]

Advertised prices are irrelevant. It's discount to market value that matters. The best buy I have ever seen was purchased at full advertised price.

OK, I will reword..

Dr Who, are you saying you are buying properties at 40% discount to market value?

[George]

Well, I was wrong about being able to fix at the lower rate for no cost.
Rang BNZ today and the cost would be about $3,300 to refix for 6 months
at 6.49% compared to 8.3 now for another 3.6 years.
This would save us about 2000 over the 6 months but with no guarantee of
what the rates would be then.
Were told a good idea is to simply add that amount to the mortgage.
We are considering our options, certainly looks as if rates can
go much lower in the new year.
Anyway, no regrets about fixing, it gave us certainty.
George