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  1. #1
    Join Date
    Aug 2003
    Posts
    7,610

    Default Is your LVR 70 percent or higher?

    I thought this might make for an interesting discussion given the recent quote by Glenn:
    Quote:
    Originally Posted by Glenn
    Having a 70% LVR will not save lots of people.
    It's easy to just look at the loans for the properties and ignore other loans that you may have that are also secured against your property assets (credit card, small business loans etc).

    What is your LVR when you add up all debt? Ours is 58% at the moment - okay I suppose.

    Cheers,

    Donna
    PropertyTalk Blog - property articles

    BusinessBlogs - the best business articles are found here



  2. #2
    Join Date
    Jun 2005
    Location
    auckland New Zealand
    Posts
    5,236

    Default

    More importantly is where those assets are. I have a 64% LVR in total with almost all of it in Auckland and Wellington. If I had that level in Invercargill, Wanganui and Tokoroa I'd be much more worried. It's teh provinces that are more prone to a hammering.

    I met a former IRD analyst last week who is now full time PI. He watches population trends very closely and said it is hard to find a provincial town that is not reducing in population. That would keep me awake at night.

  3. #3
    Join Date
    Nov 2005
    Posts
    3,286

    Default

    Quote Originally Posted by pooomba View Post
    More importantly is where those assets are. I have a 64% LVR in total with almost all of it in Auckland and Wellington. If I had that level in Invercargill, Wanganui and Tokoroa I'd be much more worried. It's teh provinces that are more prone to a hammering.

    I met a former IRD analyst last week who is now full time PI. He watches population trends very closely and said it is hard to find a provincial town that is not reducing in population. That would keep me awake at night.
    This is quite true I believe.

    If I were highly geared I would much rather be highly geared in Wellington or any large centre than in some out of the way place.

    However, I say that more from the position of needed to resell quickly, not from the position of finding tenants. I believe tenants will usually always be there, even in the wops, but not so buyers.

    I made an earlier post about there not being any buyers at all in a down market. Although slightly exaggerated for effect I still believe my comments made a valid point. I also believe that there is much greater danger of not selling in a small town than in a larger centre. I'd much rather be stuck with properties in Wellinton than in Eltham.

    xris

  4. #4
    Join Date
    Aug 2003
    Posts
    7,610

    Default

    Yeah good points - and probably better to focus on improving one's income - and ability to service the loans by means other than just increasing rents etc.

    Cheers,

    Donna
    PropertyTalk Blog - property articles

    BusinessBlogs - the best business articles are found here



  5. #5

    Default

    To all those naysayers

    1. Invercargill's population is rising.

    See> http://www.stats.govt.nz/NR/rdonlyre...argillCity.xls



    2. Prices continue to rise in Invercargill

    The montly median property property price has risen about from $118k in Octovber 2005 to $197k in July 2007. And yet, it is still some $70+k cheaper than Dunedin (the next most affordable city in NZ).

    See> http://www.reinz.co.nz/reportingapp/...rt&RFCODE=R100



    3. Southland's AWE is only 6.4% less than Auckland's, yet Auckland's property prices are 160% more expensive
    Do the math on that one, people.

    See> http://venture.southlandnz.com/sites...d%20Region.pdf (a Stats NZ publication, p. 21).

    See> https://www.qv.co.nz/onlinereports/propertyvaluemap.htm




    I don't know how it works in the NZ IRD, but I can tell you how it works when you advise the Australian Treasurer. You present facts.

    No facts = no credibility.

    M

  6. #6
    Join Date
    Oct 2004
    Location
    Invercargill
    Posts
    283

    Default

    Apparently provincial towns all look the same to you big city fellas. But Invercargill and Tokoroa in the same breath? That's a bit over-emo.

  7. #7
    Join Date
    Jun 2005
    Location
    auckland New Zealand
    Posts
    5,236

    Default

    500 people in 5 years wouldn't even cover the margin of error for Invercargill.

    Stay safe, stick to the population growth areas. Auckland/Hamilton/Wellington and Queenstown!!

    Small town investing is speculating at the moment.

  8. #8
    Join Date
    Oct 2004
    Location
    Invercargill
    Posts
    283

    Default

    Do you feel those towns are affordable for every investor? Or should they not be investing at all if they cannot afford to buy in one of those towns?

  9. #9
    Join Date
    Jun 2005
    Location
    auckland New Zealand
    Posts
    5,236

    Default

    Well I believe any investor can afford to invest in main centres. The question is how can they, not whether they can.
    You can still buy in Auckland for just over 200K. I'd rather own 1/2 of an Auckland house than a whole one in a small town over the next little while.
    Bear in mind also that as I speak publicly about investing I feel obligated to give "safe" advice. The fact is that some small towns may do very well. As Pitt points out look at Invercargill. But they are still more speculative and very prone to correction. So it would be foolish of me to recommend them to all and sundry. If you know how to research and do your homework you invest where ever you think the CG will be.

  10. #10
    Join Date
    Jun 2005
    Location
    auckland New Zealand
    Posts
    5,236

    Default

    You must follow the pop trends. This graph tells you where to NOT invest and where to put your money

    http://www.stats.govt.nz/store/2006/07/subnational-population-projections-01%28base%29-26update.htm


 

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