Dannemora/Flat Bush and Upcoming Otara?

[Chris W]

Current market observations in Flatbush

"There are houses in Flatbush Ak reduced by 100k"
"I know a dev down there he has so much stock he cant get rid of. Also alot of suplus land in flat bush right now and its not selling."


It is interesting that the properties that the property developer has built are not selling - yet many property market commentators state that Auckland property prices will continue to be supported due to underlying demand for housing in Auckland still growing (due to population growth, inbound migration, demographics, Auckland is one of the three most liveable cities to live in so foreigners will move to Auckland, etc). Now why is it that properties are not selling given the positive demographics? That is due to most property market commentators talking about underlying housing demand, yet it is effective housing demand which determines prices - refer https://www.propertytalk.com/forum/showthread.php?42341-Housing-demand-calculation-methodology&p=431261#post431261

The fact that the properties are not selling, and that there are cuts in selling prices by vendors suggests a buyer's market. A quick search on trademe.co.nz shows a total of 657 properties currently listed for sale in Flat Bush. A quick search on QV.co.nz show 85 sales in the last 3 months in Flat Bush, so at that sales rate it would take 23 months to sell all of the listed inventory. For the developer to move their inventory, they may need to reduce their asking price. Of all the current Auckland property listings for sale of 12,625 on trademe.co.nz, the listings for sale in Flatbush represent 5% of all property listings for sale in Auckland. What is also particularly interesting is that in the former Manukau City Council region, there are a total of 2,368 properties listed for sale which means that the property listings for sale in Flat Bush represent 27.7% of the former Manukau City Council region property listings.

Also, here's a scenario for you to think about - what happens if the developer comes under financial pressure from the bank and has to repay the bank? They may have to cut their selling prices in order to raise cash to repay the bank ... That's how you can get a sudden increase in effective supply to the market (which can put downward pressure on prices) whilst according to official long term population projections by the Auckland council, there is a currently an underlying supply shortage of housing.

Using the underlying demand and underlying supply figures (as opposed to effective demand and effective supply) can easily lead to conclusions that property prices always increase, yet without regard to market forces, banks can exert financial pressure on highly leveraged borrowers.

[BigDreamer]

I have also noticed prices in Flat Bush reducing recently. My parents have been looking for a new home and were initially thinking of Flat Bush but quickly changed their mind when they visited the area.

I've noticed houses which were selling for ~$1.1-$1.2M to be listed closer to $1M if not in the high $900s.

[Frezzinghot]

Is this the start of the big sell off?

[mrsaneperson]

I have also noticed prices in Flat Bush reducing recently. My parents have been looking for a new home and were initially thinking of Flat Bush but quickly changed their mind when they visited the area.

I've noticed houses which were selling for ~$1.1-$1.2M to be listed closer to $1M if not in the high $900s.

Its a sought after area, high income bracket , mainly from what I've observed and is New Zealand's largest and most comprehensively planned new town. Auckland Council are right behind the development packages that are going on.
We are seeing a general lull in buying right now and as Flatbush is currently the largest development that is happening currently it will be evidenced more.

[Natetrade]

There's a good* part of Otara and a bad part of Otara (*relatively speaking).

The good parts of Otara have had very good price rises in the last few years. These would be Franklyne Road / Alexander Cres and surrounding (the north-west side of MIT), the part of Otara closer to Flat Bush / Clover Park (Dawson Road, further east the better), and the East Tamaki area (Johnstone Road / Antrim Cres / Tyrone Cres and around there). I've owned in Otara for the last two years and initially had some tenancy troubles but these have long been sorted. My current tenant is pretty good, has a job and hasn't missed a single rent payment in the last year. This part of town is still significantly cheaper than Papatoetoe and Otahuhu nearby.

Gary's map pretty much sums up what I think is the bad part of Otara. My general rule would be no duplex-type / townhouse-type state houses and no pylons / motorways / noisy roads. Single level state houses I would be ok with. This covers most of the old 'Narcotics Triangle' between East Tamaki Road, Preston Road, and SH1.

Investing wise at the moment, I would back Otara over Manurewa in terms of gentrification. Re-development is happening pretty quickly from the Flat Bush end.

Thanks AMP - just to clarity are you saying the "old narcotics triangle" (as you describe above) is good for property investment or not? Also, when you say that gentrification is occurring on the "Flat Bush end" are you talking about areas east of East Tamaki Road?

Thanks
Natetrade

[BlueSky]

As long as HNZ stays, old part of Flatbush and Otara don't have a future.

http://i853.photobucket.com/albums/ab99/biralo/Capture_zps1d913f7d.png

Home owners drive up house prices.

When you have HNZ occupying 50% or more of houses in an area, not many houses would be for sale.

Then you would say supply would be low, so that must be good for prices!

But if you are a home owner, and if you know there are lots of HNZ in the area, and the local school would not be very good (most novice parents believe better Decile = better school). So why would they want to buy a home in this area??

I think you may be wrong again Gary ?

https://www.trademe.co.nz/property/residential-property-for-sale/auction-1925380530.htm