State of the Market (Your Opinion)

[Hec]

Hi People
Dont get on here much but am out there at the coal face daily searching for property, attending auctions, purchasing when a good deal is found etc.
Am in the Tauranga, Mt, Papamoa, TePuke areas. Full time investor.
The market here (my opinion) is slowing for sure with many properties on the market for 2months or longer. Still plenty of unrealistic vendors(surely not being mislead by agents...!) yet some are now seeing the reality. Tauranga ticking over slightly better than Papamoa which is not far off dead. Agents are saying its the winter.
Properties 500k and above are hardly moving and i have seen some large price drops in the 600 - 800k range and being passed in at auction 100 - 200k below reserve.
Are there others out there that can describe their area's. Be it somewhere in NZ or International.
Kind regards to you all
Hec

[martyparty]

Re: State of the Market (Your Opinion)

Hi People
Dont get on here much but am out there at the coal face daily searching for property, attending auctions, purchasing when a good deal is found etc.

Things seem to have picked up recently in Wellingtown. With the tragic bombings in London, people are starting to remember what a fantastic and safe place New Zealand is!

[Julian]

Martyparty,
Great to see that the Wellington sales data is so up-to-the-minute, considering the bombings only happened last Thursday. The Poms must have packed their gear up quickly on Thursday, jumped on a plane on Friday which would have got here on Saturday. Hell, they must have gone on a huge property buying spree yesterday!
Julian

[Dean@Massiveaction]

Lots of bargains appearing iN Auckland. Unrealistic vendors starting to come to the party. I've got more high yield opportunities than deposits at the moment. And it's only going to get better!!

[Chemill]

Things are sitting on the market for quite some time in Christchurch. Some unrealistic pricing, but also a whole lot of price reductions appearing.

I didn't notice any poms at the open homes on the weekend so they must not have filtered down here just yet.

Chemill

[kieran]

Classic Signs of the Times!!!

The Property Cycle is so unbelievably consistent that it is no surprise we are seeing clear evidence of the slump starting to bite...

My property sourcers seem to be finding it easier to locate decent property deals (especially over the last 4 weeks). Our mortgage broking business has also found that financing is becoming more difficult for many investors and the banks are getting more fussy on the business they choose to write.

It's easy to blame winter and yes we traditionally see softer sales at this time but I think the market is in much worse shape than most are prepared to admit.

I also suspect that before too long there will be a 'wholesale' realisation in NZ that our property market is in decline.

So expect the media to grab onto this message soon and start indicating that the property investment world will come to an end shortly.Ironically this will most likely fuel the market as 'investors' enter the market expecting bargains but if too many enter the market they will actually temporarily bouy the market but that will not lead to a recovery.

In my studies of the property cycle it is apparent that the slump should last several more years yet. Hence I expect matters to get worse in the next few years.

At the risk of being repetitive I re-affirm the opinion I have been making public since last year when a property crash was bandied about in the media. There are STILL no clear signs of a certain 'crash' in the main centres but the 'niche' markets of Ak CBD apartments, coastal and small towns look poised to suffer a genuine crash... Just for the record I prescribe to the USA FDIC definition of a 'crash or bust' which is a 15% decrease in values within a 5 year period.

[Glenn]

I went house hunting in Nelson with a client last week. We looked at one two bedroom town house. Rent $200 but could be $210. It had been listed at $220,000 in January and now it has just been dropped to an asking price of $160,000. If say it was sold at $150,000 the gross rate of return would be 7.2%. Now these clients of mine used to own their own home but relationships and other things ment that the market left them high and dry. So they are keen to get back into the market by initially buying a rental then later on moving up to a home to live in themselves.
So does anyone have an opinion for these nice mature couple.
Are they doing the right thing or should they wait?

[Dean@Massiveaction]

I don't know Nelson but I wouldn't recommend it as an investment unless you had long term income to burn. It just doesn't stack up.

[martyparty]

Martyparty,
Great to see that the Wellington sales data is so up-to-the-minute, considering the bombings only happened last Thursday. The Poms must have packed their gear up quickly on Thursday, jumped on a plane on Friday which would have got here on Saturday. Hell, they must have gone on a huge property buying spree yesterday!
Julian

LOL! You had better buy now Julian!

I can only report that I am getting a LOT more interest in my Wellington property since the bombings. I think a lot of expats are going want to come home sooner, and those considering their OE will put them off.

Same thing happened around 9-11. It's not a matter of exagerration - just simple economics of supply and demand.

It is also sad that many NZ resident kiwis take for granted their superior and protected lifestyles in NZ - there ain't much in London except for the money and career - and maybe the atmosphere. The hot chicks, sun, clean air and all the best that life are found right here!

[drelly]

The market is still overheated up here. Still plenty of agents trying to sell "great investment opportunities" at a 5% gross return!

[martyparty]

The market is still overheated up here. Still plenty of agents trying to sell "great investment opportunities" at a 5% gross return!

LOL! Not necessarilly a bad thing in light of the tax free capital gains that are possible. That property would probably create on paper LAQC tax losses that would improve the investors tax position after depreciation is accounted for - could work well if the investor was in the top tax bracket.

The property might also look cool - nothing impresses hot chicks more than knowing you own some cool real estate around town.

Shows the importance of taking a global view - assessing all sides of a transaction, not just a percentage.

[muppet]

Hi Guys

Went to two open homes in Napier last weekend.

One in the same street as one of our rentals - wanted $219k and only on leasehold land at $2k per year.

The other in Marewa/Maraenui area, a four bedroom wanted $240k. The section could be subdivided. However on one in their right mind would have bought in this street 4yrs ago.

Tokoroa still overheated.

Regards

[Chemill]

I only invest to impress chicks. In fact I carry all my title certificates into all the night clubs at the weekend, to show the girls, bouncers and bar staff. I don't really care that my money is being sucked into the vortex called 'investment property' - but hey, at least I get a tax break right?

yours sarcastically

Chemill

[martyparty]

I only invest to impress chicks. In fact I carry all my title certificates into all the night clubs at the weekend, to show the girls, bouncers and bar staff.

Hehehe! Even nerds have to invest in property you know.

[muppet]

Hi Chemill

You said:

I only invest to impress chicks

What type of car do you drive?

Regards