400%+ growth in 8 years? In Hamilton?

[SuperDad]

Hi all,

I read an article in my local paper (Waikato Times) that has left me scratching my head. Please bear with me while I relate the guts of the article.

The article related to the most expensive Housing NZ house in Hamilton, which apparently has a value of $616K. According to National Party housing spokesman Phil Heatley, the house would sell for more than its valuation. This was put in the context of an average sale price in Hamilton of $310K, with the expected comment that HNZ could house two families with the money they have tied up in the one property.

But what really blew me away were the following two claims:
1. The 3 bedroom house was purchased in 1998 for $132K.
2. The house is in Fairview Downs.

Now, an increase from $132K to $616K over 8 years is phenomenal. It is possible, however, that HNZ bought well below value back in 1998. But we are talking Fairview Downs! I spent the first 12 years of my life in this suburb, and then another few months there later in life when I shacked up with my wife. When my wife and I built our first home back in 1999, we briefly looked at Fairview Downs, which was just being opened up to development. It was a bit cheaper than the land out north (Flagstaff), but it was only Fairview Downs. So we built out north. I struggle to think of an example of any stand-alone dwelling in this suburb being worth anything close to $616K. The top price for any property in this suburb currently listed on RealEnz is $417K.

Help! This is doing my head in. Can anyone shed light on what is going on here?

Paul.

[Monkeyboy]

Bloody Politics

[SuperDad]

Yeah, one has to wonder how "in touch" the National Party housing spokesman is. I guess he's just taking a dig at the govt. when he claims that the property would sell for more than $616K - trying to make the point that the govt. is wasting taxpayer's money on high-price accomodation for beneficiaries.

[Monkeyboy]

There was a Campbell Live report on these high priced Akl state homes last week. Essentially the govt was saying they wont throw people out of their homes and the (G)Nats were saying that they are wasting money. Mind you some of these houses were sitting empty and could be sold. But then the govt is getting good capital gains and some here would say dont sell, always hold.

[whitt]

A while back I mentioned numbers can be distorted to show anything they want to present.

Take for example a dog suburb with goes through gentrification during a boom ( houses are all done up and suburb looks nice after-wards).
Prior to the works they may have been valued at 150K and several years later they are now valued at 500K.
At a glance the area appears to have had huge growth. But what is not able to be shown easily in numbers is that the owners of these do-up's had to spend 100K to bring them up to this standard. Now the growth rate is back inline.

In the example you showed the property may have been purchased below value initially and had a significant upgrade. Although now reading the original post I can't see HNZ doing a reno.

[SuperDad]

In the example you showed the property may have been purchased below value initially and had a significant upgrade.

This is what leaves me really scratching my head. Even if the house was purchased below value in 1998, and even if it had a major upgrade, it is still just a 3-bed house in an average suburb of Hamilton. A search of http://nz.helpsellmyproperty.net shows that the top sale price for any house in that suburb was $379K for a 4-bed house. Most in the suburb go in the 200s. So the $616K can't be based on comparable sales. Is the govt. trying to inflate the value of its housing stock through creative valuing? And if they are doing this, why? (To make the "assets" side of a balance sheet look better?)

[tricky]

Hi SuperDad,
Stop scratching your head.
Just ask National Party housing spokesman Phil Heatley to substantiate his claims.
It's probably all nonsense and you won't get a straight answer out of him.
I think you're more likely to know that market than he would.
tricky

[ActionMan]

Hnz

When I moved to Hamilton I saw this 3 bedroom house with separate garage and attic. Located at a major intersection Te Aroha and Peachgrove.

This was 18 months ago.

Overgrown grass etc... OK...Let's look for the owner and put in an offer...Housing NZ.

THis property is still vacant. This would not be the case if it was an investor. But there's a major problem in housing New Zealand cause there'll be other properties like this.

[ActionMan]

Hey SD

Maybe that's the most expensive HNZ property in the region and not this one.

http://www.dailypost.co.nz/localnews...condsubsection=

[SuperDad]

Oooohhh,

You shouldn't have pointd me to that article AM. Now my blood is starting to boil, after reading:

Rotorua beneficiaries advocate Paul Blair says low income families deserve to live in decent homes.

My family and I live in a "decent" 3-bed home, in a "decent" area, in Hamilton. But the value of our house would be just over half of the $616K state house down the road in Fairview Downs. To tell me that low income people "deserve" to live in such houses annoys me. What is the notion of desert in play here? The less you work, the more you deserve? Or the less tax you pay the more you deserve?

Don't get me wrong - I'm not moaning about the government. I'm moaning about the twits who think that beneficiaries somehow deserve more thanthose who get by without benefits.

Rant over.

Paul.

[GJB68]

There are state houses in the exclusive suburb of Orakei in Auckland here. In one example the house is worth $1.2m with views of the city and the tennants pay $70pw....