"it will take 30 years to recover"

[Bob Kane]

Akld house rental prices at record high

http://tvnz.co.nz/business-news/akld...d-high-3687931

The price of renting in New Zealand's biggest city is at a record high and is not likely to change anytime soon.

Rental rates in Auckland have never been higher and Peter Thompson from Barfoot and Thompson said they have seen an increase in the average rent per week.

"It's most probably at an all time high of $405 per week."

We've been expecting this headline to appear this year.
House prices were never going down - rents had to go up.
I guess Hickey will now be calling on the govt to intervene in this rental housing shortage.

[Jumpin]

Just a quick question, have been reading through this thread the past couple of days.

When interest.co.nz says house prices are going down 30% odd does this mean the actual price or the nominal price which includes inflation. So by 2012 if what he says is true, will a 100k house be 70k worth or will it remain 100k but inflation will have increased 30-40% so it's theoretically cheaper?

I'm a bit confused on this one...

You've got to be careful when talking about inflation. Like anything else it comes in paches - so your statement: " will it remain 100k but inflation will have increased 30-40% so it's theoretically cheaper?" will only hold true if wages and salaries experience inflation. (and rent). If inflation only relates to council rates, insurance, fuel, food, clothes, consumer items, etc then your house will (probably) not hold it's value.

[ENP]

I have another quick question.

How do you know if it is the time to buy? If you can get a desired yield and desired % under the house valuation do you buy it in any market?

e.g. Do you look to buy property anytime or do you try to time the market like you would in share/stock investments?

There are so many conflicting views out there that I'm reading. Some people say it's the best time in 10 years to buy. Other say it's the worst time and prices are going down from here.

Do you listen to these people or just ignore them and stick to your criteria and buy in any market?

[unhinged]

ENP

It would come down to each individuals own level of comfort, what they can afford, what they currently owe, LVR, what you can afford to repay, what tax breaks you are currently getting etc etc etc. You will always have people that will talk the market up or down dependant on their own circumstances. At the end of the day you have to make up your own mind based upon the information available. I for one am looking to buy, but not in any hurry and waiting till I find the property the best suits my individual needs.

[ENP]

I for one am looking to buy, but not in any hurry and waiting till I find the property the best suits my individual needs.

So you buy irrespective of where you think the market is heading price wise as long as it meets your criteria?

[unhinged]

No, not correct, what the market is currently doing is part of the considerations, unfortunately I have yet to find anyone that has a relaible crystal ball that can foresee the future.

[ENP]

http://www.irvinehousingblog.com/wp-...psychology.jpg

[unhinged]

Thanks ENP, I hadn't seen that one before. But again it is only the opinion of one group of individuals and is not dissimilar to Keiran Trass's property cycle diagram. The problem is actually predicting exactly where in the cycle or irvine's graph are we currently sitting.

But if history is correct, even if the cycle hasn't bottomed and you purchasing for a long term view, then according to many experienced and published PI's it doesn't matter when you purchase, the sooner the better. Interest rates aren't going to get any lower. When I purchased my first house more than 20 years ago interest rates where falling from a high of 24%.

Additionally the cost of building is increasing and will increase further this year when GST goes up, current property values are less than replacement building cost and won't be very far off bottoming given the expected housing shortage that is being forecasted, property prices will start to increase again, but this may be a few years away yet and a slow increase. No one is going to make quick money like the years between 2002 and 2007. But again this is only my own personal opinion based on the information I have read.

[ENP]

Yea, thats the thing. It's everones "personal opinion" it's not exactly black and white is it?

Thanks for the responses unhinged. And happy investing!

[unhinged]

Thanks ENP, but you can't ignore the facts either, investing is a risk, and only you can decide on what level of risk you are comfortable with borrowing to invest. Good Luck.

[unhinged]

Yea, that's the thing. It's everyone's "personal opinion" it's not exactly black and white is it?

Thanks for the responses unhinged. And happy investing!

ENP - Olly Newland August column is very informative, I particularly like the last two sentences:

In summary I believe we are bumping along the bottom of the cycle and real improvement may take a while to happen -- but it will happen.
Take your courage in both hands so that in the future you will not look back and say "If only I had taken advantage of the market during the recession instead of hesitating!"

A quick web search should turn up the full article.

[mortgage broker]

I think the main thing most people will agree on is that, now is a much better time for buying then selling.

[speights boy]

I think the main thing most people will agree on is that, now is a much better time for buying then selling.

Not necessarily.

If the reason you are selling is because your debt level has become uncomfortable then now is a good time to sell.

The decision whether to buy is more & more being taken out of the purchaser's hands and is in the hands of the banks..see first comment.

Levels of personal debt will only increase in importance in the year to come.

SB

[Perry]

Probably linked to the increasing
number of unintended LLs, too.
.