“Serious” investors nosing back into property market

[muppet]

“Serious” investors nosing back into property market
By Mitchell Hall
Monday July 28 2008 - 11:30am

Softening prices are prompting investors back into the property market, according to First National Real Estate New Zealand.

First National General Manager John Stewart said their June survey showed investor inquiry was the highest in three months.

"Mum and Dad investors may have lost confidence but serious property investors are definitely back 'sniffing around' in increasing numbers, buying selected properties which, in most cases, they are subsidising on a weekly basis, although only to a minimal extent.

"Investors are the first ones to leave the market and the first to return, so this level of enquiry is an encouraging sign."

However, the middle of the housing market, especially the many houses under five years old in a relatively new subdivision shows no signs of reawakening soon, said Mr Stewart.

"There is a burgeoning concern that the middle family market of relatively new homes of mushroom colour or brick with tile roof, will be even more affected by the property slowdown due to the sheer weight of numbers on the market.

"For example, in one Christchurch subdivision, there have recently been more than a dozen very similar houses for sale and within $30,000 difference in price. Which one, if any, will sell? The person with a desperate need to get out.

The nationwide survey of the network's members also showed sales of properties priced below $250,000 made up to 95% of some office’s sales.

http://www.nbr.co.nz/article/serious...y-market-33432

[k1w1]

relatively new homes of mushroom colour or brick with tile roof

ALBANY!!!!

[robbyp.]

"according to First National Real Estate"

That says it all. Only real estate agents would say that. I wouldn't trust what any real estate agent says.

[[email protected]]

They are quite right though. There is an army or pre-approved investors out there coming back into the market. I spoke to a broker from Christchurch yesterday who had his biggest month in July for a year and in Auckland people were flocking through open homes in the middle of a storm.
The top end is the scary bit I reckon. I went to look at a property yesterday someone wanted to swap. Valuation 9 months ago 1.6 mil. Worth 1.2 tops currently. Newish subdivision all with 1.5 mil plus homes and half of them are on the market.

Investor market in Auckland neutral cashflow is around again so why not buy when it costs nothing to hold??

[k1w1]

Neutral cf aren't that common just yet.

Why? Because I don't believe we're at the bottom of the market yet.

[robbyp.]

I don't think that is the case in Wellington, although property prices havn't dropped much here yet. P{roperties here aren't selling, and people are just withdrawing them from the market. The property press has also reduced to about 1/3 the size it once was. With property prices tipped to drop 30%, I think people would be mad to invest in property at the moment. You get better returns at the moment in an online call account. Bernard Hickey doesn't see property reaching 2007 levels for another 10 years, which doesn't look good for property investment.

[[email protected]]

I'm getting them in my in-box nearly everyday.
Yesterdays
310K but $595 rent
$317 buy $625 rent
2.4 million buy 240,000 plus OPEX and GST income

Why wait to pick the absolute bottom. If you do then you'll be buying on the way up so you'll pay the same as if you bought now anyway. I'd rather buy the odd plum without time pressure now than try and buy a whole lot of property in a very short time frame. It's the gearing that makes buying now an issue IMHO. So if it costs you nothing to hold, buy it now.

If the recovery is rapid, which is likely, you will only have a small window to buy cheap if you sit on your hands till the magic "bottom".

[k1w1]

I'd be interested to know the suburb the 1st two are in, and whether they are standalone houses, units, or whatever. If it's not Auckland, forget it. I don't know other areas well enough.

[robbyp.]

I can't see how recovery could be rapid in todays market, and I think we are years away from the true bottom of the property crash. With any boom you will always get a crash.
The NZ economy is in a poor state, and with raising unemployment, more people defaulting on their mortgages, finance companies folding, property being terribly over priced and unaffordable property prices can only go one way at the moment. Over 100 years property prices will only rise in line with inflation.

[Tucker]

Had 6 groups through in three days for one of my properties I am selling, all cashed up or with pre-approval. A couple had been looking for six months for the right home.

[[email protected]]

All in Auckland.

[[email protected]]

I can't see how recovery could be rapid in todays market, and I think we are years away from the true bottom of the property crash. With any boom you will always get a crash.
The NZ economy is in a poor state, and with raising unemployment, more people defaulting on their mortgages, finance companies folding, property being terribly over priced and unaffordable property prices can only go one way at the moment. Over 100 years property prices will only rise in line with inflation.

Interest rates trending down, dollar down, building consents down, selling property below replacement. It's hard to see how the recovery can't be anything but breath taking, (unless Labour get back in that is, then we are all off to live in Oz).

[k1w1]

Yeah, what part and what style of property?

Sorry mate, but I call bullshit. You don't get that sort of rental on 2-3 bedders, and there aren't many areas of Auckland where you get 4-5 bedders for low 300's. And if there were any areas in Auckland where you could, the tenant wouldn't pay that rent. We're talking arse end of Ranui here, in a falling down doss-house.

[[email protected]]

Don't worry K1W1, you keep telling me they don't exist, I'll keep buying them. You are missing my point which is that these deals are becoming common in Auckland. I can find them in most suburbs, you do have to look for them of course.

[k1w1]

No, I'm genuinely interested. There are no deals that I can find like that online, for one.

I hear this often on this forum - "you have to look for them". Where?

You could get defensive, or you could help me out and tell me how/where they're found.

So what suburb are they in? If you don't want to tell me that, tell me what part of Auckland - north, east, west, south, central?

I'm not missing your point. You're saying their common. I'm saying they're not, but I'm open for correction. Prove me wrong.