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Will there be another property boom in the next 5 years?

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  • #16
    Cube, how much do you think investors drive the housing market, as opposed to first home buyers?

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    • #17
      Originally posted by LKSteve View Post
      Cube: I had a look at the RE section on trade-me's website yesterday & I am still stunned by the high prices of houses in New Zealand. Even after the recent adjustments the NZ market must still be among the most expensive in the world when compared to local average incomes. I just can't fathom it, the country is certainly no economic powerhouse. Maybe the market is anticipating a flood of cashed-up people moving to NZ from the UK, China etc. The average wage of working New Zealanders can not justify these prices. It's still bubble territory.
      I've covered this before:
      Household incomes have gone up 60% when house prices went up 100%.
      Another 25% increase in wages and we're back in sync.
      A couple of 5% pa wage increases and houses are affordable again (for those who thought they were unaffordable).
      Housing will remain flat, wages will go up and then we start the property cycle all over again.
      Does anyone think differently?

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      • #18
        Originally posted by One View Post
        Cube, how much do you think investors drive the housing market, as opposed to first home buyers?
        Can I answer?
        Investors drive the market down if anything.
        We're always offering lowball figures, 30% under value etc.
        If there were only investors in the market then it would have crashed years ago.
        The housing market is driven by home owners (both 1st home buyers and existing owners), not investors.

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        • #19
          Hmmm. In early 2007, my brother was looking for a starter house in Invercargill. Yields were still respectable down there. He certainly found himself competing with investors - an extra 10K didn't make too much difference to an investor, but did to him.

          So while the boom was still on its way up, (amateurish) investors were pushing prices up in In'gill. I don't know if they did the same in other cities - anyone else?

          Now, I suspect investors are part of what's driving prices down, as much as anything is managing to.

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          • #20
            Originally posted by Bob Kane View Post
            Can I answer?
            Investors drive the market down if anything.
            We're always offering lowball figures, 30% under value etc.
            If there were only investors in the market then it would have crashed years ago.
            The housing market is driven by home owners (both 1st home buyers and existing owners), not investors.
            Have you ever tried stand-up comedy bob? This one will have the average Joe trying to get into his first home laughing until he cries. Investors & those with 'investor' mentality are exactly what has driven the real estate market to the unfordable level it occupies. First home buyers, seeking affordable properties must compete with investors looking for properties that will yield a respectable return. Rental Property is clearly seen as a 'safe bet' by many ordinary Kiwi's looking for a secure home for their excess cash. ie: Kiwi investors
            And by the way, the market has crashed, just not in New Zealand or Australia (Yet)

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            • #21
              Please stop calling the hosuing market "unaffordable" because it's simply not true. It's an arbitrary and emotional tool you're using to try and sway people to your opinion. Unless you can provide some evidence for your assertion that NZ is "unaffordable" then please stop.

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              • #22
                Originally posted by ChrisD View Post
                Please stop calling the hosuing market "unaffordable" because it's simply not true. It's an arbitrary and emotional tool you're using to try and sway people to your opinion. Unless you can provide some evidence for your assertion that NZ is "unaffordable" then please stop.
                As a multiple of average earnings, the cost of an average NZ house is unaffordable. This is especially so for first home buyers who are without cash-piles generated by an earlier entry into a market which has risen very quickly. The alternative is to borrow heavily which some of us are uncomfortable with.

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                • #23
                  Originally posted by LKSteve
                  As a multiple of average earnings, the cost of an average NZ house is unaffordable
                  It depends on your definition of unaffordable. Property is not as affordable as it was as a multiple of income but low end properties are still selling, so the "unaffordable" label is mis-used. Are you still renting waiting for the market to drop 30%?
                  You can find me at: Energise Web Design

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                  • #24
                    People often talk about the unaffordability of the first time buyer buying the average house. I think we have to look at the changing standards of first time buyers. These days they expect to get on the property ladder halfway up. No wonder they find in unaffordable, ley should just concentrate at getting on the property level at the level they can afford. For many fist time buyers this does mean the bottom rung. I would bet that most of the property investers on here like myself started with their principle home being very basic.

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                    • #25
                      My first house was a 90sqm 1960 ex-state house I bought in 1998. Very basic. I started quite late at age 28. I doubt most of the Y generation would want something that "un-trendy".
                      You can find me at: Energise Web Design

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                      • #26
                        I wonder what the next bubble will be. Maybe gold.
                        Hamish Patel | ph: 09 625 4693 | mob: 021 625 693
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                        • #27
                          i'm picking tulip bulbs
                          have you defeated them?
                          your demons

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                          • #28
                            As a multiple of average earnings, the cost of an average NZ house is unaffordable.
                            Where does it say that First Home buyers are on average earnings or that they want to buy an average priced house.

                            Given that there must be a fair number of houses available that are below the average price, shouldn't first home buyers be looking at those.

                            I'm not saying that buying a first home is easy, but when was it ever?
                            DFTBA

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                            • #29
                              Investing in Property in NZ is very attractive right now...especially if you are living/working in Australia - a good rate of exchange, low property values and longer sales cycle - certainly an ideal time to be in the market.

                              Cheers,

                              Donna
                              SEARCH PropertyTalk, About PropertyTalk

                              BusinessBlogs - the best business articles are found here

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                              • #30
                                Originally posted by LKSteve View Post
                                As a multiple of average earnings, the cost of an average NZ house is unaffordable. This is especially so for first home buyers who are without cash-piles generated by an earlier entry into a market which has risen very quickly. The alternative is to borrow heavily which some of us are uncomfortable with.
                                My partner and I have just bought our first home. We're on average incomes, and had only a 10% deposit ($33k) and could afford an average property here in Tauranga. Your (again, arbritrary) label of "unaffordable" belies my direct first hand experience.

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