Buying in the Auckland market

[Micholas]

Hi guys,

I've been doing some homework over the last month or so on the North Shore, going to lots of open homes and auctions and have seen house after house sell under the hammer for what would appear to be very large amounts over valuation. 90% sold to asian buyers. The most recent being a 4 bedroom brick cube do-up in Northcote with illegal 2nd kitchen downstairs selling at auction for $980k.

Just wondering what others are seeing in Auckland. In the current climate has anyone had any luck purchasing below valuation or even AT valuation?

I have some equity I want to use, still yet to set my buying rules in stone, but after a few months of looking around I must admit my hopes are dwindling. I can see myself paying for a lot of valuations and getting outbid at a lot of auctions when the time comes to purchase. How are others faring? Keen to hear some recent war stories. Auction room war stories if you have them...

Cheers

[speights boy]

You won't beat foreign money.

Many do not care what price they pay.
They want their family money into a safe haven such as NZ; especially as we make it so easy to buy here.
Even at those prices it is cheap compared to many countries overseas.

No CGT, no stamp duty, no land tax, no restrictions on foreigners and a Government unwilling to admit it is a factor.

With the LVR restrictions and increasing interest rates here, they are laughing all the way to the auction room.

[Davo36]

Repeat after me "Those asian buyer ALL LIVE HERE, THERE IS NO EVIDENCE TO SUPPORT THE FACT THAT FOREIGN CHINESE BUYERS ARE PUSHING UP PRICES!"

Which is of course ridiculous, but it's what we are told to believe.

SB is right, they're all getting their money (much of it illegally earned) out of China while they still can. Canada, Britain, the US are all seeing the same thing.

The only question is how long this is going to continue for. 2 months? 20 years? Who knows.

[muppet]

Well Davo there are 1,300,000,000 Chinese.
And there is about 300,000,000 in the middle class.
Makes NZ look very, very small.

[Davo36]

Well Davo there are 1,300,000,000 Chinese.
And there is about 300,000,000 in the middle class.
Makes NZ look very, very small.

Oh absolutely, they can buy the whole place and not even blink. We're about the size of 1 small city over there.

But what is really 'unfair' about all of this is that the Chinese government gives subsidies to heaps of Chinese businesses. They then do well, take our manufacturing jobs, sell us the stuff they make and use the money to buy our land. Hate to sound xenophobic but that is what's happening.

[muppet]

And the politicians don't care or else they would be doing something about it
instead of gettiing big pay rises.

[Davo36]

Well China is keeping our economy going in these difficult times. We export heaps to them.

So this is the Faustian deal we have going. They buy our dairy products, and we sell them our houses.

[speights boy]

They buy our dairy products, and we sell them our houses.

Synlait $87.5 million takeover offer | Stuff.co.nz

Shareholders in Synlait Farms should accept an $87.5 million takeover offer for the dairy company launched by a giant Chinese corporate, according to a recommendation by independent directors.

That recommendation comes after Chinese company Shanghai Pengxin Group last month announced a takeover bid for Synlait Farms, in association with two of Synlait's founders, John Penno and Juliet Maclean.

[elguapo]

Synlait $87.5 million takeover offer | Stuff.co.nz

They have bought themselves quite a lot of debt with that.... the real price is over $200m.

[skid]

Whats so hard about making legislation that says you or your spouse have to be a NZ resident to buy here.
Even Thailand has rules to that effect.
Having said that,there is an interesting article by Tony Alexander that talks about how China(now our largest trading partner)will punish us economically for anything it doesnt like politically.
All that meat sitting over there on the docks waiting for some silly little paper some say was china giving us a little ''taste'' of that power.

[Bluekiwi]

Tony Alexander is very bright but too trusting.
I told him his research is flawed on this but he didnt believe me, he thinks all agents answer his questions and give truthful answers.
Sort of doesnt get the fact that the asian agents selling to asians dont speak english and couldnt even understand yet bother to answer his question.

I have been to a few auctions this year, last week saw a handful and very strong asian influence as usual.
However I note the asian bidders are getting louder and harsher in their yelling out of bids, hurts my ears
And they can take an eternity to bid
Allltogether not much fun.

Been beaten by an asian bidder.
But also lots of other strange accents.

If you want to beat them you have to be smarter.
Stay away from the bluechip area's they like and go out a bit further more fringe auckland.
Also, stay away from the central major auction rooms.

Look at the houses now coming on market that are set price, and be very very fast, within 1 to 2 days to buy.
Beat them with speed and local knowledge, get an agent or two on your side, and buy something before it gets listed.

I noticed a pair of asian girls, trash a kiwi family guy at auction a few months back, and then last week bash another asian group to win.
These look like professional buyers to me, they were very vicious and inscruitable at the same time.
Sometimes these bidders can be nasty, dont be afraid to give them dirty looks and the fingers now and then, intimidate and stand over them.

[eri]

be prepared to bash them back?

or is that not what you meant?

[donthatetheplayer]

Micholas, good on you for asking questions. I haven't been in the market to buy for a couple of months now so my experience isn't right up to date but here's what I noticed. Asians - yes they are out there. Don't be put off. I went to a few auctions where asians were outbid by whities. At one auction a smart little asian chap rocked up in his fur coat and croc skin shoes. You could tell he was milking it trying to scare people like you off. But he had his limit and a "kiwi" couple outbid him. I think he was a kiwi too just playing the rich asian card. Good on him.

On another note, and I don't like to give too much personal info out, but my wife is asian (shock horror). I'm a whitey. We certainly played the rich asian card when attending open homes and auctions. At auctions my wife dresses nicely and I defer to her before bidding lol. I can tell it definitely puts the sh*ts up some who assume she has access to funds from back home etc etc. I assure you she doesn't and all our money has been made right here in NZ.

I am sure there are foreign asian buyers in the market, plenty of them. But they wouldn't even make up 25% of prospective buyers, probably more like 5%. They aren't doing anything wrong, just playing along under the rules we set. Don't worry about them.

I think if you want to buy at the moment you need to think 6 months out. What will the property be worth in 6 months? If you can buy it today for less than that figure you have yourself a solid investment. Prices are rising at about 1% per month at present it seems. I don't know if they'll keep going at that rate. You need to make your own guesses anyway. When you buy be prepared that prices might drop the next day. You might have to wait until the next cycle to see gains (but personally I don't think you can really go wrong buying in Auckland at present). If you're like me and you sound like you are you need to buy and hold long term to do well in this game. Leave the "easy money" and timing the market to the pros. Bottom line, if you buy a property today and hold onto it for 10 or 20 years it will be worth a lot more then. If you can't afford to service any situations that could come up, maybe you shouldn't be taking the risk.

Good luck.

[sidinz]

Just wondering what others are seeing in Auckland. In the current climate has anyone had any luck purchasing below valuation or even AT valuation?
I can see myself paying for a lot of valuations and getting outbid at a lot of auctions when the time comes to purchase. How are others faring? Keen to hear some recent war stories. Auction room war stories if you have them...

Cheers

There was a piece in the Herald not long ago about homebuyers who were able to buy at their budget/pay a reasonable price when the house number was seen as unlucky to the Chinese.

I was also told by a real estate agent that the Chinese buyers hate to miss out on something seen as desirable. So if they hear of an auction being brought forward because of a pre-auction bid, they turn up in droves, scared they're going to miss out on a hot property.

So my advice would be to avoid all brought-forward auctions and target those with 'unlucky' numbers.

Good luck!

[eri]

that would be anything with a 4

or other bad feng shui