S#%ts going to hit the fan.

[chook]

It is very real now. It will be far worse in coming months. Was rental hunting after 8 years in hibernation. I have a portfolio with 18% GY and bank has approved 2millon to splash on rentals or flips.

I went to 3 open homes yesterday.
- 1st property : do- upper 800m2 in prime location CV 850k, no offers for 6months. Offered 350k on paper. Elderly women want to move in to care home.
- 2nd property : Holiday for my family and do Airbnb on the beach CV 1.1million offered 640k on paper. Marriage split
- 3rd Property : offer was too low for the RE agent asked me to f off... Investor in trouble

I am not in hurry to buy as I have waited 8 years. Just low balling around now to get back into the market.

If Liebour comes back to power we will be seeing 2015-2017 prices. National comes back it will stabilize around 2017-18 prices.

Bargains will come as distressed amateur investors and First home buyers will flood the market. FOMO created by RE agents, MAs, property gurus and Media has screwed so many people which they will never be able to recover.

Their loss/stupidity our gain.

With regards to the above offers and RE agents, it is their job to take any offer to the vendor under law, if they give you s#*t then say you will ring head office etc (even tho by now its not going anywhere)
I have been dealing with lots of idiot agents as well, they will be leaving the industry in droves as we speak so hopefully we are left with ones who actually want to make some money and sell some property. If they have any brains they will realise the buyer is now the most important person and to take all and any offer to the vendor..

[Bluecoat]

I would have to totally disagree.

2024 will be a terrible year to sell but a fantastic buyers market.

If you have read his books he has made some horrendous mistakes and had some mental issues along the way. Also you have to ask why someone at his age is still 'in the game' when many I know in a similar age bracket have made a stack of money and are enjoying life while still having a finger on the pulse and buying any deal cash.

One thing I will give him he is honest and puts it all out there.

Sometimes its the Ego or staying relevant or simply "still in the game" because you haven't reached the end game

Imagine, the 10 properties you have which bought several years ago would have being paid off and not having to subsidize most recent cash drain recent purchases.

Know someone who has recently become debt free 2 rentals, one $1.5M house, and $1M cash
I asked him what is he doing with $1M cash, he is "looking for opportunities in property and business but both not good in terms of returns/risk.
He is not buying on the hope that new incoming GOVT will reverse the changes but that the investment has to stand on its own merits (something along the lines of 12% yield)

[Beginner1]

For those recent purchasers in Auckland and Wellington, who borrowed 80% or more of the purchase price, many are already in negative equity.

The key question is can those recent purchasers continue to hold on.

I know a family who bought their first home in 2021 June for 1.1million with 10% deposit and they would be lucky to get 750k now in Wellington.
Their mortgage is going from $4331 @3.29% to potentially $6848 @6.69% per month. They may or may not be able to hold.
I recall the emotional stress when I lost the 10% deposit and being in negative equity from 2008-2014 post GFC on our first home. House was 290k and the value dropped to 250k for almost 5 years. It took 6years to recover the 5-10% drop.
Now we are in 30% drop from peak, possibly it may drop further 20-40% and will take 15-20years to recover.

Most first home buyers will hold ON but lot of amateur investors will be gone. If liebour stays most investors will be gone unless you have 12%+GY.

[Beginner1]

Lots of pain coming for those with high mortgages coming of low fixed rates, however some stock starting to move in Auckland as immigration increases and sellers start to meet the market. Also can’t see how much higher rates can go before killing everyone off!

OCR has to be increased as inflation is stuck at 7.2% even after latest increase. As per todays news "ANZ and ASB forecast inflation will remain stuck at 7.2%" Banks are not passing the full brunt of OCR increase as it will kill most off. They want to keep the ponzi going. Hence RB will have to increase the OCR and bank will have no other option than increasing rates which will eventually control inflation. Also increasing minimum wage will increase inflation further.

I am thinking OCR will go up to 6.5%+ with 1 year interest peaking 7.5%. Still historically pretty low but will be catastrophic for inflated house prices.

Shite happens when incompetent in power. I think immigration will cause higher rents but nothing can stop the collapse of house prices as immigrants wouldn't have the cash immediately.

[Chris W]

FOMO created by RE agents, MAs, property gurus and Media has screwed so many people which they will never be able to recover.

For those recent purchasers in Auckland and Wellington, who borrowed 80% or more of the purchase price, many are already in negative equity.

The key question is can those recent purchasers continue to hold on.

[Chris W]

Worthwhile putting these observations from Freezinghot from another thread into this thread:

1)
15-04-2023, 03:24 PM

Have a friend who owns a construction company tell us today 2 building companies which I cannot name haven't sold any new builds for months. Banks are also not lending on new developments unless they are 80% pre sold.

https://www.propertytalk.com/forum/forum/property-investment-forums/new-zealand/property-investment-nz/730600-how-international-market-forces-affect-nz-property/page24#post734362

2)
17-4-2023, 09:43 AM

Spoke to our plumber today who we use often, told us work is DEAD! 2nd person in 2 days who said work has stopped all crawling, my own business is slow atm. Rates having a huge effect this year!

https://www.propertytalk.com/forum/forum/property-investment-forums/new-zealand/property-investment-nz/730600-how-international-market-forces-affect-nz-property/page24#post734404

[Frezzinghot]

Auckland is somewhat sheltered from any major shocks, in a recession most move from the regions to look for work so competition for rental stock etc tend to increase. Why I love Auckland for holding stock.

[Frezzinghot]

It is very real now. It will be far worse in coming months. Was rental hunting after 8 years in hibernation. I have a portfolio with 18% GY and bank has approved 2millon to splash on rentals or flips.

I went to 3 open homes yesterday.
- 1st property : do- upper 800m2 in prime location CV 850k, no offers for 6months. Offered 350k on paper. Elderly women want to move in to care home.
- 2nd property : Holiday for my family and do Airbnb on the beach CV 1.1million offered 640k on paper. Marriage split
- 3rd Property : offer was too low for the RE agent asked me to f off... Investor in trouble

I am not in hurry to buy as I have waited 8 years. Just low balling around now to get back into the market.

If Liebour comes back to power we will be seeing 2015-2017 prices. National comes back it will stabilize around 2017-18 prices.

Bargains will come as distressed amateur investors and First home buyers will flood the market. FOMO created by RE agents, MAs, property gurus and Media has screwed so many people which they will never be able to recover.

Their loss/stupidity our gain.

Lots of pain coming for those with high mortgages coming of low fixed rates, however some stock starting to move in Auckland as immigration increases and sellers start to meet the market. Also can’t see how much higher rates can go before killing everyone off!

[Beginner1]

An agent I deal with sometimes was discussing the current market atm. She mentioned that currently it was not so much FHBs looking to buy but more current buyers looking to downsize. This group had bought in the last 2 yrs at the top of the market but can no longer handle the current interest rate hikes. She said they dont care if they lose 100k just so long as they don’t have to pay the new lending rates.

They are all looking to downsize from those lavish homes and into something more Manageable! These were buyers who thought it a good idea to buy a 1.5m home for there first purchase.

Fools…

It is very real now. It will be far worse in coming months. Was rental hunting after 8 years in hibernation. I have a portfolio with 18% GY and bank has approved 2millon to splash on rentals or flips.

I went to 3 open homes yesterday.
- 1st property : do- upper 800m2 in prime location CV 850k, no offers for 6months. Offered 350k on paper. Elderly women want to move in to care home.
- 2nd property : Holiday for my family and do Airbnb on the beach CV 1.1million offered 640k on paper. Marriage split
- 3rd Property : offer was too low for the RE agent asked me to f off... Investor in trouble

I am not in hurry to buy as I have waited 8 years. Just low balling around now to get back into the market.

If Liebour comes back to power we will be seeing 2015-2017 prices. National comes back it will stabilize around 2017-18 prices.

Bargains will come as distressed amateur investors and First home buyers will flood the market. FOMO created by RE agents, MAs, property gurus and Media has screwed so many people which they will never be able to recover.

Their loss/stupidity our gain.

[Chris W]

https://www.interest.co.nz/investing/120258/financial-markets-authority-issues-formal-warning-du-val-group-misleading

[donna]

^^ well observed - I’m a subscriber to wired magazine and they charged me $30 for the year then sent me a deal - get 12 months for $5.

It’s better to cancel at the end wait a couple of months then grab their new customer deal.

cheers

Donna

[flyernzl]

What really annoyed us though was BNZ locking us in at 6.3% and the recent news of them offering NHBs 4.99%. Hardly loyalty inspiring tactics.

Unlike residential landlords, who for some reason are expected to keep prices low for their long-term tenants, most large corporates offer a better price for new customers than for their existing long-term clients.

[donna]

^^ other discussions suggest we’re not out of the woods. We have the tourists and students are coming back - though not up the the numbers we’re used to. Lack of rentals and short term accommodation is hurting businesses esp. in tourism - needing them to find accommodation to get staff onboard.

Lack of supply and more demand will push up inflation and we know how Mr Orr deals with that. Banks being selective with the low interest rate at a loss to grab attractive customers with many years of repayments ahead of them suggests there’s some pain ahead as we batten down the hatches and prioritise spending on essentials only.

Just my 10 cents worth.

cheers

Donna

[OnTheMove]

Property cycle in recovery phase in 2024.

Donna do you think we are likely to see a bounce back that soon? My main concern is CH economy, luckily NZ had moved back toward the US some time ago, but CH is still a huge importer of our agriculture products and Tourists. The problems with aging workforce is more of a long term issue, but the zero covid policy and their well documented property market problems could well cause some serious problems for them (and the rest of us)

Our beachside Auck PPOR according to valuation sites has lost 27% already. No drama, bought it well below market at the time, but another 27% and SH could really hit the fan for us. Yet I look at Mangawhai Heads as it is a very similar area lifestyle wise with the ocean and views etc. Real estate listing prices there are vastly out of touch with Recessions and Inflation ie asking $1.5M with an RV of $1.05M. An anomaly but perhaps it takes properties not selling before small towns start to feel the impact of this great recession.

I remember early 2017 when Auck dropped -14% or there abouts, then it plateaued +- 5% up and down for 4 years. Yet nowhere else in the country took a hit, obviously investors buying up elsewhere (ie greater Wellington area and Dunedin) probably had something to do with that. Prior to this I had seen the rest of NZ move in line with Auck's prices, almost like a ripple effect.

What really annoyed us though was BNZ locking us in at 6.3% and the recent news of them offering NHBs 4.99%. Hardly loyalty inspiring tactics.

Whoever gets into NZ Govt next has to have a Finance Minister with serious credentials. It feels like all we have had since the last lot got lucky with a coalition in 2017 is spend and a failure to deliver on costly failed policies, with no concept for the ramifications of doing so. Surely NZ wont be duped by a "nice person" again, hopefully current polls will fall toward real world of what the very same Govt with the same policies has blundered over the last 6-7 years.

[donna]

^^ Kerr House Epsom was valued at 6.6m 2021 and so sold for 1 million less 2 years later. It’s low point was Nov 22 valued at 4.8m so there’s optimism we’re in recovery phase of the property cycle.

cheers

Donna