Auckland Housing Affordability

[Bobsyouruncle]

How could she provide proof of income from the overseas students before buying the property with which they would be staying?

I assume you're joking. You just start while you're renting.

[eri]

Wouldn't new developments still be covered by the 10% deposit rule for new builds? If anything don't the new rules actually encourage investors into new builds?

as always, socialist meddling in markets

creating even more restrictive laws to try and force people

into programs for perceived societal betterment

end up fighting the law of unintended consequences

at least that is my take-out from this story on bank financing

...

"New Zealand banks are looking to de-leverage their inner city apartment lending, with some banks telling CBRE they are looking to fund no more inner city developments."

Brookes says 8075 new apartments are in the pipeline for Auckland of which 4637 are under construction and 3438 are being actively marketed or have building consent.

"It does beg the question," he says, "as to how this pipeline - some of which is not funded - will get finance.

This is at a time when the council is pushing the development sector hard to create and deliver more projects."

He believes new and largely unreported LVR guidelines - which will see lending to investors at a maximum of 60 per cent - will also have an impact on apartment purchasers, some of whom are also investors.

"Settlement risk is being taken seriously by banks to the point where debt coverage of 120 per cent through fully-vetted pre-sales is the new normal.

This means some people who have purchased apartments off-the-plans in Auckland may struggle to settle," he says.

http://www.nzherald.co.nz/cbre/news/article.cfm?c_id=1504001&objectid=11699991

all of this uncertainty

is going to hinder sufficient housing getting built this decade

[Don't believe the Hype]

Although if someone were on $20 I would suggest they invest in themselves first and try to increase their earning potential because you want to pay principal also.

Nick ... Well done on recognizing the other side of this issue. People's income is a function of the value they provide to the business they work for. If you are unskilled offering a basic product or service then you can't expect to be highly paid but this advice is not just for low skilled... This advice holds for everyone, at any level of income.

Ultimately people have 2 choices in a commercial operation
1) start a business in your area of expertise taking on risk (of running your business) leveraging the labour of others to improve your income.

2) increase your skills to improve the value you offer your employer (or potential employer) this will provide increased return for the business you work for enabling the business to reward you with a higher income (hourly rate)


Example of 1) - in a simplified example if you work mowing lawns for a living you might earn $20/hr. If you establish a business and take on the risks (and equipment capital costs - additional lawn mower, trailer, rake and advertising costs) you could employ someone to mow lawns - you will then need to secure the work for your employee as well as pay them even if there is no work for them - if you can establish 80 hrs week of work you will earn your $20/hr and you can charge your employee oh out at $22/hr so you keep $2/hr - improving your income by 10% to $22/hr. Running a team of 10 lawn mowers doubles your income.

Example of 2) Labourer on a building site doing and completing their trade training to become qualified electrician/plumber/carpenter will improve hourly rate from $20/hr to well above that apply example 1 to that trade and you're even further ahead.


Im sure there will be many who think thes examples are over simplified and hard... But nothing worth doing/having is easy... It is possible.

[Kbkiwi]

I assume you're joking. You just start while you're renting.

Oh I see, she was a benefit cheat then?

[Perry]

More of the usual (financial literacy) tales, but merits being warmed over on a regular basis.

[Nick G]

More of the usual (financial literacy) tales, but merits being warmed over on a regular basis.

These days when people ask for book advice about investing I am starting to point them towards Marcus Aurelius Meditations. The stoic philosophy seems inline with that "quiet kiwi battler" philosophy we admire and it certainly sets you up for financial and investing success. For an easier introduction try The Obstacle Is The Way

It's important also to know the technical side of property investment, Lisa's book is good for that. I think that goes hand in hand with your inner self and also networking with other investors with shared values.

You can then learn the shiny stuff about who to wheel and deal but unless your base is strong you will always be at risk. Refer: The many gurus who got cleaned out taking their students with them.

[Nick G]

Ultimately people have 2 choices in a commercial operation
1) start a business in your area of expertise taking on risk (of running your business) leveraging the labour of others to improve your income.

2) increase your skills to improve the value you offer your employer (or potential employer) this will provide increased return for the business you work for enabling the business to reward you with a higher income (hourly rate)

Sales is a third option, although it is close to #1 since you are paid for what you deliver. Generally higher upside than #2 and not infrequently #1. The top earners in a many types of businesses should be in sales or sales management because otherwise nobody gets to eat.

[eri]

"Settlement risk is being taken seriously by banks to the point where debt coverage of 120 per cent through fully-vetted pre-sales is the new normal.

This means some people who have purchased apartments off-the-plans in Auckland may struggle to settle," he says.

http://www.nzherald.co.nz/cbre/news/...ectid=11699991

interesting ad on tm

$150,000 for the sale of the contract and existing deposit for a brand new North Facing apartment on the 6th floor of "The Rise" at the fantastic Union Green Development in Auckland CBD.

The apartment is due for completion in 2018 which means you get to secure it at todays prices but you don't have to worry about taking a mortgage out until 2018.

http://www.trademe.co.nz/property/residential-property-for-sale/auction-1150609699.htm

[Don't believe the Hype]

Sales is a third option, although it is close to #1 since you are paid for what you deliver. Generally higher upside than #2 and not infrequently #1. The top earners in a many types of businesses should be in sales or sales management because otherwise nobody gets to eat.[/COLOR]

You're right About sales Nick which is a hybrid of both points...

Sales can be a high earning profession as it is one of the easier ones to define the value the individual employee can offer to the business owner (point 2) and lends itself to the individual taking the risk (point 1) in the form of lower or even no base salary to chase a higher % of the revenue generated.

[eri]

"Settlement risk is being taken seriously by banks to the point where debt coverage of 120 per cent through fully-vetted pre-sales is the new normal.

This means some people who have purchased apartments off-the-plans in Auckland may struggle to settle," he says.

another?

Vendor's situation has changed, MUST SELL!

http://www.trademe.co.nz/property/residential-property-for-sale/auction-1152975373.htm

[Davo36]

Hmm interesting eri, but 2 doesn't make a trend... yet.

[Wayne]

At least we're top at something.
NZ housing affordability tops the IMFs affordability list.

http://www.stuff.co.nz/business/money/83750475/nz-tops-imfs-housing-unaffordability-list

[chrisgoh]

At least we're top at something.
NZ housing affordability tops the IMFs affordability list.
http://www.stuff.co.nz/business/mone...rdability-list

At least we are more affordable than HK, Sydney & Vancouver. Almost on par with Melbourne.

[BlueSky]

interesting ad on tm

$150,000 for the sale of the contract and existing deposit for a brand new North Facing apartment on the 6th floor of "The Rise" at the fantastic Union Green Development in Auckland CBD.

The apartment is due for completion in 2018 which means you get to secure it at todays prices but you don't have to worry about taking a mortgage out until 2018.

http://www.trademe.co.nz/property/re...1150609699.htm

The link is gone !

interesting times ahead for apartments- so many have been purchased off the plans , it will create a massive problems if things turn to custard and banks pull the plug on settlement
Everywhere you look they have sold up to 70% off the plans.

[chrisgoh]

Agree with Key, first home buyer should consider Apartment.

Refer to Vancouver, Sydney and other global cities, most first home buyers went for apartment. Work hard, save and build more equity before upgrade to houses for bigger family later. Consider small units or apartment again during retirement.