So Who's Buying Now?

[tpr2]

Hi all
I have just spent a few hours reading posts from various people and enjoying the great stories of success.

What I am wondering now is this. Is everybody sitting on their hands right now or are they getting into the great buys out there?

Personally I have been buying in Auckland CBD which for some reason most of the world hates....thats great it means lots of sellers and very few buyers.

I have also been buying down at the mount....lots and lots of properties on the market down there. At the moment we are actually looking for a new home down there.

My new wife and I spend every second weekend at the mount (Wednesday night to Sunday night) and Rebecca has decided she wants something a little mor spacious than my current pad.

I know that for most of the threads I have read the mount properties would not even get past the first bit of qualifying criteria for investors like david, roy and robyn (the yields are just terrible down there).

Anyway I would like to know what the guys who were buying in the great days of cashflow properties eveywhere what they are doing now....

cheers

Terry
www.nzpis.com

[spurner]

I was going to take a break for a while. But came across a very good deal which was 40% under value and can provide very large positive cashflow, so it was hard to say "No". It's unconditional now.

Although I have just discovered it is a little too good; it appears the vendor won't have enough money to pay back his second mortgage, let alone the third mortgage or REA fees! Hopefully it'll work out though.

Will also be looking for a house to buy when we return to NZ.

I'm still buying, there are great deals out there, as you have found.

Now and the next 6-12 months is when some people can get some very good deals, and make a lot of money from people currently in difficulty.

Happy Investing!

[Monid]

Well we are still sitting on our hands in regard to the NZ market ourselves, the yields still haven't come right, though they are getting better.

We are trying to buy a place to live in over here in the UK which is turning out to be more difficult than we anticipated, me being a foreigner is causing the banks to panic despite Simone being a proper British citizen.

Cheers
David

[Taurean]

By CBD do you mean apartments?

[ChaseP]

Hi tpr2

I am a typical investor, while the sun shone we made hay... that means that up until November 2007 we may have sold properties that had been held for a long time and were no longer needed, in preparation for the lean times ahead.

Now the lean times are here, we are out looking... Yields are definitely improving. I was offered a property yesterday that had an easily obtainable yield of 7% in quite a good area.

There are still plenty of folk buying, in fact, this is when property investors should be buying, the better the deal we can do now, the better the quality of accommodation we can offer to tenants, and thereby lift standards and improve the industry. There are colleagues out there who need a quick result. Those of us who can put down cash will be able to help them out so that they can live to ride another day! Many long term investors have been though tight times and had to offload property in a hurry. I've been there and done that! The great thing is to keep on keeping on.

It's a great industry, it rewards patient people, and having to downscale rapidly and make a loss is just one part of the overall picture, and nothing more than a blip, if you're determined.

Happy investing!

[tpr2]

Hi Taurean
Yes I mean apartments in the CBD.
They seem to be really good buying now (relative to my investments in oz).
And of course the mount is what it is...extremely expensive on the beach but pretty well priced once you get back from the beach by a street or two.

Of course yields down there are shocking so not good for people looking for Cashflow.

The ones I am getting in Auckland are around 10% at the moment.

cheers

Terry

[Badger]

Hi Taurean
Yes I mean apartments in the CBD.

Terry

CBD the possible future slums!

Stay away from those as resources become more scarce more people will be out of job

Growth economics is already begining to unravel and with that goes the current financial set up!

[tpr2]

Hi Badger

CBD ...the possible future slums????

I hardly think my 2.5 million dollar 308sqm apartment with 360 degree views to great barrier etc with a 1 minute walk to queen st will ever be a slum. If it is I think we should all celebrate that the poor have such great living conditions.

The beautiful thing about Auckland CBD is that it has had such a bashing for such a long time that the prices are depressed yet the fundamentals that underpin growth (population) and therefor demand are staring us right in the face.

A recent survey on population trends completed by one of the insurance companies shows that Auckland will reach a population of 2million people somewhere around 2050 give or take a few years.

The particularly scary statistic in that survey though was the fact one quarter of that population will live in the CBD.

Why is that scary?

Currently there are about 17,000 apartments in the CBD (I'm going on memory here and should probably check Kierans suburb watch for the exact figures) with about 23,000 people living in the CBD. So if the report from this insurance company is correct then over the next 40 years the population of the innner city is going to explode.

Already the developers have stopped building due to building restraints costs of construction etc and now the shift in direction regarding the property market.

So this leads to under supply and a large demand. This leads to increased rental returns and increased capital growth.

Who knows when though? I don't have a crystal ball but my buying phillosphy has always been to buy in centres with forseeable population growth (my investments are 4 properties in Mount Maunganui all 4 houses, 3 in the gold coast, 1 350sqm house on 900sqm land and 2x2 bedroom apartments on the broadwater, 2 x 3 bedroom houses in gladstone, 4 auckland cbd apartments ranging from the penthouse, 2 very nice 2 bedroom apartments with carparks and a 1 bedroom apartment, plus 1 house on the lake at karapiro) which is why I like cities that are constantly growing.

I agree with you that there are parts of the Auckland CBD that may end up being slums however I actually think that in the not too distant future you will see investors starting to consolidate some of these shoeboxes and turn them into large, very spacious homes because it will be cheaper than buying something new from a developer.

cheers

Terry

https://www.diyloans.co.nz

[LFCNZ]

tpr2, just curious, what areas of the CBD do you see as good and what areas do you see as bad?

[SuperDad]

Probably not much population growth at Karapiro.

[gav&ros]

God is good.

seems like now is a great time to buy. returns are ok although rent returns have fallen in the last 3 months as sellers rent there houses after taking them of the market. bought two more houses last week, and am happy with them both. God is good.

[Davo36]

tpr2, How are you paying for these properties? What I mean is, if the cashflow returns are so low, how are you holding on to them and buying more?

Do you have lots of equity? Or are you deferring interest payements i.e. running cashflow negative?

Just interested to understand how on earth you could make a $2.5 million penthouse pay!!??

David

[Badger]

Hi Badger

CBD ...the possible future slums????

I hardly think my 2.5 million dollar 308sqm apartment with 360 degree views to great barrier etc with a 1 minute walk to queen st will ever be a slum. If it is I think we should all celebrate that the poor have such great living conditions.

The beautiful thing about Auckland CBD is that it has had such a bashing for such a long time that the prices are depressed yet the fundamentals that underpin growth (population) and therefor demand are staring us right in the face.

A recent survey on population trends completed by one of the insurance companies shows that Auckland will reach a population of 2million people somewhere around 2050 give or take a few years.

The particularly scary statistic in that survey though was the fact one quarter of that population will live in the CBD.

Why is that scary?


cheers

Terry
www.diyloans.co.nz

What exactly are you basing all those numbers and projections on?

Under pin growth...mmm... sorry but GROWTH is over!

As things fall by the way side and jobs start to dissapear oil heads to $200pb with a sharp increases in food and all other related things so many take for granted as entitlements...being cramed in a small area with thousands of people isnt for me...2 million well under the current resource constraints that under pin what ya basing assumptions on I some how doubt that! Mayby for a DEBTORS camp? So ya all can finish building roads by hand that most will never really drive on?



Your 2.5 million apartment with 360 degree views is only worth that if you have a buyer with cash on the other side of the deal. Untill then its fictional money....

[SmallBrain]

Badger

It is all about timing. I know you are a gold bug and peak oiler, but people who bought gold in the early 80's and held on to it, they still have not broken even in real term even now. Likewise, if tpr2 only paid 1 million 5 yrs ago for the 2.5 million apartment, he still has a winner even if the price drops by half. Compare to other areas, quality CBD apartments are better bets than many average suburb houses in the future even without population growth.

Obviously, for people who only entered the housing market during the peak in 2006/2007, then all bets are off, just like people who bought gold in the early 80's.

Btw, unless there is going to be a die off (I hope you're not in that camp of peak oilers), people still need places to live. So providing the timing is right, quality properties are just as good an inflation hedge as gold if not better given the +ve CF potential. Again, the key is timing!

[Badger]

Hi SMALLBRAIN

Na mate im not really a peak oiler or a greeny and or affiliated to any group think. I just read the numbers and the numbers tell me many things...

Im a indivdual private investor who trades some times.

There three main approaches in the investment world in my opinion

Investor
trader
speculator

regarding the above post

Correct its all about timing! If conditions changed well id be selling my gold silver but for the moment and the way current conditions are not just yet. Thats investing!10 -20 years horizon

I sold a investment property last year in April by paying attention to the markets im involved in it was time to go...That was a 20 year investment but it became a possible trade around 2005!

Trading gold options long and short every month well thats just speculation with risk and short time frames!

Quite right I agree property is a safe haven I still retain 1 property in my portfolio its the safest of all I dont need 10 houses. Helps if its free hold! Which it is.

Investment properties to me are all about passive income! Not top ups and holding a job to pay off the "Debt till death" or as the french say MORGAGE!