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Wanted to buy another IP, Everywhere is a bubble. Where to?

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  • Wanted to buy another IP, Everywhere is a bubble. Where to?

    Dunedin which is barely 100k people and doesnt have that much employment has had its prices increase insanely. One property sold for $600k in 2016, is now asking $1.5m, which clearly they wont get, but even if they get $1m it is nuts. It is 1hr 20 from Dunedin. You can buy plenty of homes in Auck for $1m with a view.

    Dunedin and New Plymouth were my plan but it looks like Im too late. Cant afford to buy into bubbles.

    Is there anywhere that has not been increased unsustainably? Anywhere I should consider outside these 2 areas?

    The advice Ive received a lot, never buy in cities less than 100k people and plenty of employment.

    Could Aucklands rising prices be due to the crazy prices around the country are making Auckland look better value? I had a house behind me, only a 2 bed shite box, but does the job as a rental, went for $620k. 800sqm.

  • #2
    My daughter is a student in Dunedin. She paid 150 pw for a room in a 5 bedroom flat. It was part of a huge complex that looked like an old concrete block motel. That is much more than she would have paid in Christchurch for a much nicer place.

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    • #3
      We need someone with access to Corelogic data.

      I suspect you'd do okay in Invercargill and parts of the West Coast.

      cheers,

      Donna
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      • #4
        Originally posted by donna View Post
        We need someone with access to Corelogic data.

        I suspect you'd do okay in Invercargill and parts of the West Coast.

        cheers,

        Donna
        Good calls. Dunedin is way over cooked. Yes it was nice when you could buy 6 bedders at $150 per room at 9% ROI. But at a 300% increase in 5 years, that ROI is no longer there imo

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        • #5
          So, you want to get into the market, and everyone else is deluded, but you are the only one who isn't?

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          • #6
            Originally posted by OnTheMove View Post
            The advice Ive received a lot, never buy in cities less than 100k people and plenty of employment.
            I bought in Whangarei (70,000 people) 6 years ago for 240k. It's now worth 1.2m. Or, to rephrase, I've made a million dollars ignoring such advice

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            • #7
              Originally posted by crashy View Post

              I bought in Whangarei (70,000 people) 6 years ago for 240k. It's now worth 1.2m. Or, to rephrase, I've made a million dollars ignoring such advice
              Thats great for you, happy you have made some market value gains . Keep things positive on here though, we all one family on the forum working together.

              Was not referring to capital gain speculation. Already own coastal Whangarei holiday rental.

              Speaking of Northland. I wish they had of gone ahead with the Auckland tunnel and train to north shore and eventually to Whangarei. Would spread the load a lot. They still talking the BOP one. But to me Whangarei has a lot to offer, more so now with Northland Rail going to revamp the old line to Kaitaia. Opens up the whole coast.. I also like Tutukaka coast. Things clearly can go south though. I remember some executive properties in Whitianga circa 2004 that lost 75% within months.

              That "rule" of thumb I got suggested years ago was for ROI cashflow, fairly obvious you need people with jobs to rent properties, avg Kiwi cannot afford $1m properties in areas without work. Even selling for capital gains often requires somebody cashed. So a sellers market is the only time to be able to actualise speculated market value to cash.

              Just isn't much ROI going on in a cooked market, but feel Donna is on to it.

              Have another coastal area in mind though that isn't too over cooked just yet, trying to access other funds for a go there for CG.

              Anyway, back on topic sniffing around Donna's suggestions currently.





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              • #8
                I'm picking Timaru. Prices are still low there compared to other places but definitely on the way up. There's a shortage of rental properties, so rents have been steadily rising, too. Rents may be lower than other centres, but the return is pretty good - you can still buy a really good IP for under $400k in a top area such as Highfield, and as a guide a $350k house will currently return $350 pw, a $375K house $375 pw etc. Employment figures are good - the port is booming, plus you've got Fonterra and Synlait, farming, considerable fishing industry - not to mention another year or more repairing hail storm damage. High chance of buying a property which has just been re-roofed!

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                • #9
                  Originally posted by OnTheMove View Post
                  Everywhere is a bubble

                  Can there be a bubble if there is a reported housing shortage?

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                  • #10
                    Originally posted by donna View Post
                    We need someone with access to Corelogic data.

                    I suspect you'd do okay in Invercargill and parts of the West Coast.

                    cheers,

                    Donna
                    What do you think will be the fallout for Invercargill property prices if Tiwai closes? 2k jobs lost for a population of 40k ish

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                    • #11
                      Originally posted by crashy View Post
                      So, you want to get into the market, and everyone else is deluded, but you are the only one who isn't?
                      So what do you mean, Crashy, is the bubble about to burst? Is this the time to wait it out, while everybody else is trying to buy?

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                      • #12
                        Originally posted by Chris W View Post


                        Can there be a bubble if there is a reported housing shortage?
                        Can there be a housing shortage if there is no immigration (borders closed)?

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                        • #13
                          Originally posted by OnTheMove View Post
                          You can buy plenty of homes in Auck for $1m with a view.
                          You'd be hard pressed to find anything close to the water for this.
                          "DEBT BECOMES IRRELEVANT WITH INFLATION".

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                          • #14
                            Originally posted by propertyfinder View Post

                            Can there be a housing shortage if there is no immigration (borders closed)?
                            Good point. With pretty much all kiwis home now. Labour now in charge. I think its largely investors inflating the market not a shortage.

                            Timaru is an interesting one. Has it had any gentrification, it use to be less desirable of the SI towns I had been lead to believe, but that is just hear say. I use to think NP was pretty rough, i revisited in 2013 and it was lovely, good lifestyle.

                            I could buy local, Ive seen homes without a view on the shore sell for basically the land ay $650k, a crappy 2 bedroom relocatable on 800sqm. Its more of a buy for land value gains and potential rent to offset some of the mortgage which at the moment due to low interest rates is fairly negligible (ie rents cover the interest rates for the most part)

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                            • #15
                              Nobody really answered the question. Anyway I am looking at Hamilton and Whanganui. Thoughts OP?

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