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My First Home Search So Far

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  • My First Home Search So Far

    Hi All,

    I started with my first home search journey from April this year. My wife and I both work in the Auckland CBD so central auckland was a our preferred area of search initially. But it didnt take us too long to be pushed in to outer suburbs. We finally came to a more desirable location for us in Papatoetoe.

    1) Our first home led us into a 2 bedroom brick and title in birdwood avenue listed with an asking price of 699K. This was a small 2 bedroom unit only, perhaps less than 100sqm. We loved the property right away, but 699K was too much of an asking price. The agent was a nice lady, she spoke to us in a very helpful manner and continued to explain that she was "helping first home buyers" so that they do not have to go through the nerve wrecking auction process. I will admit I was so in to her talk, she could have convinced me to buy if I had that kind of money initially. But coming back home, I did some research, and found out that the property was listed at auction just 1.5 months after this agent bought the property at auction. She bought it for 641K, and 1.5 months later she relisted it at 699K asking price. She sold that property successfully for 697K.

    2) Just 3 weeks ago, a property in st George street, which I was interested in again, sold at auction for 681K. This was a 2 bedroom brick and tile town house in st George street. This was again bought by the same trader who I met in (1). I walked away feeling sad, but determined that the next property I will put my mind and money at, I will definitely win at auction.

    With this passing time, I have accumulated more savings, and by this time my budget has increased. Just yesterday another property I was interested in, was up for auction. I had visited the property atleast 3-5 times to ensure my self that this was the one for me. This was a 3 bedroom brick and tile house on a cross lease again in st george street in papatoetoe. Knowing that the property (2) above sold for 681K for 2 bedrooms, I had all the numbers done and prepared myself for the worst scenario. It came down towards the end between me and another couple, and the other couple outbid me to secure the property. Atleast I thought they did, then along came the same trader (1 and 2), and outbid the other two couples. I left sad again, and in tears, but this time with disgust and hate for this trader. How can she profess to help 1st home buyers when she is the one who is killing first home buyers dreams. I understand that this an investment strategy, and she is doing a great job at it. But it's not fair on us first home buyers who wish to pursue dreams, and so many other things along with buying a property.

    The property (2) has been relisted on trademe with an asking price of 799K in the space of 3 short weeks (144a St George Street, Papatoetoe). She has not done anything in the property, just put her display furniture to enhance the appeal of the property. Nothing else.

    I dont think the immigrants are ruining the property market. No, its our own very local friendly neighbors, and there is absolutely nothing we can do to stop them for breaking other peoples dreams and ambitions.!

  • #2
    I think you are suffering from an auction problem rather than just competition. A trader only buys below value and then onsells. So you can simply pay more. The trader, who I happen to know, will have a fixed dollar amount that she will not go over. So if you keep running into her you just have to be willing to pay 1 dollar more than she is. They sell at a profit so her to price is never going to be retail.

    But a better strategy is to not look at auction properties at all focus on those being sold privately or with a list price. I recently bought a very nice 2 bed unit for 495K from a private seller. Had to buy it on the day it was listed but that is how you can get something with less competition. So don't blame Sue for a hot market, just work a bit smarter and you'll get there!

    Comment


    • #3
      I have lived in Papatoetoe for a number of years and still have close relations living there. I believe that I have a fairly good knowledge of the Papatoetoe real estate market. I personally feel that $799,000 asking price for a 2 bedroom townhouse is WAY TOO high in the current market and so I think it will take a long time for her to sell it. I don't know this trader, but I agree with you, she is probably not the sort of person she claimed to be in the first time you met her.

      Just Have faith in your search and maybe if you can't look for something decent in Papatoetoe, have you thought about areas like Alfriston and Conifer grove as they are both close to the motorway exits/entries, and in my view, more family friendly areas to live in. ( I am assuming your budget to maybe high $600s to mid $700s, you could get a decent 2-3 bedroom townhouse/house in the two areas I have mentioned above).

      Good luck with your search

      Comment


      • #4
        I agree Maple about the price but remember traders are just looking for a profit. An offer well below asking may get accepted.

        Comment


        • #5
          2 months isn't that long. Just keep looking, maybe consider a do up, look for listings with a list price and get it under contract early, you can always change your mind later.

          It's an industry with a lot of money floating around, so it's bound to be cut throat, you just gotta learn as you go.

          Comment


          • #6
            Remember also that the traders are taking a risk - that risk is they believe that with the right 'marketing' they can sell the property for a higher price than the current vendor. If they're wrong they may lose money on the deal.

            You only ever hear stories of the traders who buy for X then sell for Y (where Y>X)... the reality is there are many who can't move a property on and after holding costs etc they break even or lose money.

            However buying at $681k and back on market for $799k if this price is within reason means that the likelihood of losing money on this deal for this trader is slim.

            As B Y U said a lower offer might be accepted - In this example if they bid $681 with holding costs at 100% finance ~$2500/mo selling costs at 3% @$750k they will make $40k on this property (pre tax) - if you think it is worth $750k they will likely take it IF the consensus of those on this thread that $799k is above market is right.

            Comment


            • #7
              $700k+ for a 2 bed.....You could afford a good location in the shore with that money! Maybe Pamure or Mt Wellington. Why Papatoetoe?

              Comment


              • #8
                $700k gives a 2-bdrm unit in the end of Bucklands beach peninsula, right next to Howick gulf club and Musick point: top location in my opinion, also in macleans zone. That's 12A Clovelly road, sold for $708k on 16-May-2016: https://www.bayleys.co.nz/Listing/Au...-Beach/1750788

                Comment


                • #9
                  House hunting is hard, especially in this hot market. My workmate in Auckland was in a similar situation like yours. They just keep trying, and they eventually brought their first home after 6 months of searching. And they are loving their house now.

                  I am sure you will get your home no doubt if you keep trying.

                  Good luck

                  James

                  Comment


                  • #10
                    We've got a 3 bed terraced house for 570k in Oteha earlier this year. Oteha is a nice area (nicer than Papatoetoe for sure) with a lot of smaller sized properties, and zoned for top schools such as Rangitoto College. I'm not saying you should buy Oteha, but if you consider unit title, and you're looking for your own comfort, maybe you can check terraced houses as well. There are a lot of recent re-clads with good material and quality, so they are way more comfortable than an old brick unit, yet cheaper. Those blocks with less unit numbers also charge very little BC, merely covering the insurance and maintenance. Ours is under 2k. People say terraced houses don't get CG, but I see they're terribly under valued. Those are warm and dry homes requiring minimum maintenance, very power efficient, and typically, renervated well. One day people will realize. Imagine after 30 years, how will a traditional brick unit look and how will you feel living there? Those recently re-clad terraced house are still quite livable and comfortable. The units? They are wet even now, because the old type of cray bricks suck water in the winter rain and you feel very cold in it even you insulated it. I'm not joking, I lived in one.

                    Comment


                    • #11
                      Originally posted by chigz_fj View Post

                      I dont think the immigrants are ruining the property market. No, its our own very local friendly neighbors, and there is absolutely nothing we can do to stop them for breaking other peoples dreams and ambitions.!
                      Jeez, my heart bleeds.
                      One thing you can do - offer a little bit more than the evil trader!

                      Comment


                      • #12
                        Lot of people in this thread say buy buy buy... I would take the cautious approach if I was you. I bought my first home in the 2007 peak when things are all up and up and I was just 22 and have never heard of financial crisis and property bust. Property prices dropped 15% the next year and stagnated for the next 7 years.

                        Believe it or not property market is fuelled by immigrants. I don't believe immigration is going to last after taking a leaf from BREXIT. Next government in this county is most likely to be not favoring mass immigration. I was following FTSE last night and property and bank sharers are having a free fall.

                        I pulled out of NZX and ASX last month and just holding into my 4 rentals returning 15% and free hold home at the moment. My Goal is save money sell lemons, keep the best recession proof properties. I will buy in the next bust. It is coming just a matter of time.

                        Comment


                        • #13
                          Beginner1 - I'm certainly not with the BUY BUY BUY crowd but i do want to understand how your portfolio is looking... you talk of 4 rentals returning 15% - not bad even when you did buy at the peak of the last market.

                          What is your current equity position on these properties given you bought at last peak and had to live through a decade of price growth stagnation... can you compare that to having your funds in the bank?

                          Trying to time the market is risky... i'm going to bet that even though you bought in 2007 you are in a strong equity position 9 yrs later - at some point say 2011 you probably thought things were bleak but with a long term hold investment vehicle - like property - the current value is not relevant unless you need to sell.. make sure you avoid the pitfalls that drive the urgent sale of your property and you can ride out the dips.

                          If you want to get in and out in 2 years like one other thread was about then i agree with you, but if you're in for the longer term and you can hold with higher borrowing costs and in a flat or declining market then you should be ok over the longer term... trying to time the market can be costly.

                          Comment


                          • #14
                            Agree..
                            I bought my first property in 2007 for $250k and it dropped to about $210k for 7 years and recovered to $350k now. Rent has changed from $370-$400 (2007 to 2016). Bought this with 5% deposit with interest rates fixed at 9% for 5 years. Obviously knew nothing about properties neither financial know how. Was reading PT since 2008 and pretty much learnt everything from here.
                            I bought my other properties in 2012/2013 for $970k (4 properties) which is worth around $1650k now. Our return is actually 10% as we have a mortgage of $750k with $78k rental return.


                            Originally posted by Don't believe the Hype View Post
                            Beginner1 - I'm certainly not with the BUY BUY BUY crowd but i do want to understand how your portfolio is looking... you talk of 4 rentals returning 15% - not bad even when you did buy at the peak of the last market.

                            What is your current equity position on these properties given you bought at last peak and had to live through a decade of price growth stagnation... can you compare that to having your funds in the bank?

                            Trying to time the market is risky... i'm going to bet that even though you bought in 2007 you are in a strong equity position 9 yrs later - at some point say 2011 you probably thought things were bleak but with a long term hold investment vehicle - like property - the current value is not relevant unless you need to sell.. make sure you avoid the pitfalls that drive the urgent sale of your property and you can ride out the dips.

                            If you want to get in and out in 2 years like one other thread was about then i agree with you, but if you're in for the longer term and you can hold with higher borrowing costs and in a flat or declining market then you should be ok over the longer term... trying to time the market can be costly.

                            Comment


                            • #15
                              Originally posted by Beginner1 View Post
                              Lot of people in this thread say buy buy buy... I would take the cautious approach if I was you. I bought my first home in the 2007 peak when things are all up and up and I was just 22 and have never heard of financial crisis and property bust. Property prices dropped 15% the next year and stagnated for the next 7 years.

                              Believe it or not property market is fuelled by immigrants. I don't believe immigration is going to last after taking a leaf from BREXIT. Next government in this county is most likely to be not favoring mass immigration. I was following FTSE last night and property and bank sharers are having a free fall.

                              I pulled out of NZX and ASX last month and just holding into my 4 rentals returning 15% and free hold home at the moment. My Goal is save money sell lemons, keep the best recession proof properties. I will buy in the next bust. It is coming just a matter of time.
                              Agree with this and is the main reason I am trying to get rid of my mortgage via trading, its not the time to be paying what the herd is paying.

                              FH
                              "DEBT BECOMES IRRELEVANT WITH INFLATION".

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