First home buyers push house prices up

[Bob Kane]

Here we go:

http://www.stuff.co.nz/business/money/82356054/full-house-for-auction-as-panic-buyers-look-to-snap-up-homes

Bidding started at the rateable value of $350,000, caught its breath at $420,0000, before it surged up to $510,000. The hammer dropped at $516,000.
It was over in minutes.
In the last stage of the auction, as the bidding flew up in $1000 amounts, a pregnant woman sat with her head in her hands, her lips moving seemingly in prayer.
She was one half of a couple who became the new owners.
They did not wish to be named, but said they were Wellington renters, and this was their first home.

Dumb-arse reporters and economists keep saying that investors are pushing up house prices but as this example clearly shows, it's the first home buyers who are causing the property boom to surge ahead.
We need a surtax on first home buyers to rein in their speculative actions!
Also, first home buyers should pay larger deposits.

[Aston]

Well done!

I am so pleased that a first home buyer managed to purchase this property and keep another good house out of the hands of greedy investors.

[RHarris]

So one story in a paper of possibly some first home buyers bidding on a house is proof they are the reason for increasing house prices? Nevermind stats saying in some areas 80% sell to investors and landbankers.

[Kbkiwi]

Here we go:

http://www.stuff.co.nz/business/money/82356054/full-house-for-auction-as-panic-buyers-look-to-snap-up-homes

Dumb-arse reporters and economists keep saying that investors are pushing up house prices but as this example clearly shows, it's the first home buyers who are causing the property boom to surge ahead.
We need a surtax on first home buyers to rein in their speculative actions!
Also, first home buyers should pay larger deposits.

Oh so you think there weren't any investors in the 26 registered bidders pushing up the auction price for the eventual winner who happened to be a first home buyer?

[PC]

Housing NZ have been pushing prices up. Going for the cheaper properties and paying the highest price.
Why is a government department in the market?

[Don't believe the Hype]

look at the photos of the house... Clearly targeting first home buyers... Property might rent for $600/wk tops this represents 6% gross yield - low for the area so investors may have been involved but won't go that high.

[Bob Kane]

So one story in a paper of possibly some first home buyers bidding on a house is proof they are the reason for increasing house prices? Nevermind stats saying in some areas 80% sell to investors and landbankers.

Sure does.
First home buyers always outbid the investors who only buy bargains.
This example is clear proof of that.
Not that I needed proof.

[Bob Kane]

Oh so you think there weren't any investors in the 26 registered bidders pushing up the auction price for the eventual winner who happened to be a first home buyer?

Oh boy.
Of course there would have been investors looking at it - they are the ones who pulled out when the price hit 400k.
From there on, it was first home buyers going crazy.
Desperate buyers are causing the prices to go up.
The investor who sold it has done very well, don't you think?

[Don't believe the Hype]

Not sure how well the investor did on this one really...

Paid $370k in 2011 so I think they overpaid... I didn't inspect the property but based on the pics I'd think they spend min $50k more likely $80k on it... With selling costs of around $15k and holding costs 5 yrs at 5% on $300k being $75k the property likely owed them $510k to $540k

i think this at best broke even...

If they lived in the property while they renovated it they could say they saved 5yrs rent at $400/wk so saved $100k

[Bobsyouruncle]

It's 101 that FHB's raise prices. I am working a deal with a friend in Palmy. FHB's happy to pay 180K for houses we would have sold for 150K. In a low interest rate environment keeping prices down is pretty much impossible.

[Aston]

It's 101 that FHB's raise prices. I am working a deal with a friend in Palmy. FHB's happy to pay 180K for houses we would have sold for 150K. In a low interest rate environment keeping prices down is pretty much impossible.

What a total load of bollocks. The first home buyer wouldn't even get a look at the house at 150K. They would have no option but to pay 180K.

If first home buyers really want to buy a home in this environment, where over one third of buyers are investors, they have no option but to pay over the odds for their first home.

It's a real shame for you greedy investors out there because it is now becoming a bit more difficult for you to purchase your 10th or maybe your 20th property... at the expense of the first home buyer.

[jimO]

im selling a house to my son who is a first home buyer, i reckon i could have got 30k more on the open market

[Bobsyouruncle]

You're not even making any sense Aston. We advertised without a specific price, all offers from FHB's are 30K over what we would sell for. Nothing to do with greed, if they had offered 150 we would have taken it.
As i said it's basic that FHB's would drive prices up.

[Anthonyacat]

True property investors will only pay what they think the property is worth based on the numbers.

Home buyers (first, and subsequent) pay based on emotion, and will spend whatever they can afford to get the house they want.

Speculators are buying hoping to sell for more to the next speculator or home buyer for more.

Its the latter two categories pushing prices up. The investors just provide support to prevent prices dropping below a reasonable baseline.

[Aston]

True property investors will only pay what they think the property is worth based on the numbers.

Home buyers (first, and subsequent) pay based on emotion, and will spend whatever they can afford to get the house they want.

Speculators are buying hoping to sell for more to the next speculator or home buyer for more.

Its the latter two categories pushing prices up. The investors just provide support to prevent prices dropping below a reasonable baseline.

Aaah O.K. I get it now.

The greedy investors and speculators are actually doing the first home buyers a favour... Yeah right.