• Login:
Welcome, Register Here
follow PropertyTalk on facebook follow PropertyTalk on twitter Newsletter follow PropertyTalk on LinkedIn follow PropertyTalk on facebook
Page 1 of 5 1 2 3 ... LastLast
Results 1 to 10 of 44
  1. #1

    Default Thoughts on 2020 Housing Market.

    Whats everyones opinion on the housing market ATM? Media and agents are all talking about big rises this year? Scary stuff really as how much higher can NZRE go? Affordability is the real issue surely? I see sooo many subdivisions now with no construction going on so surely supply is not driving prices up, id say building costs are crippling the average Joe and I see nothing but pain coming
    for developers and tradies alike!

    Thoughts?

    FH
    "Remember, people will judge you by your actions,not your intentions.You may have a heart of gold -but so does a hard-boiled egg".

  2. #2
    Join Date
    Oct 2013
    Posts
    1,706

    Default

    Quote Originally Posted by Frezzinghot View Post
    Whats everyones opinion on the housing market ATM? Media and agents are all talking about big rises this year? Scary stuff really as how much higher can NZRE go? Affordability is the real issue surely? I see sooo many subdivisions now with no construction going on so surely supply is not driving prices up, id say building costs are crippling the average Joe and I see nothing but pain coming
    for developers and tradies alike!

    Thoughts?

    FH
    Affordability is little changed from ten years ago last I saw, isn't it? A $700k house back then you'd have borrowed $630k (90%) at 8% interest. Monthly payments $4,622. House is now worth $1.4M, you borrow $1.12M (80%) at 3.4% interest. Monthly payments $4,967 - that's only an increase of 7.5% over 10 years; well below inflation and average wage growth.

    Go back 20 years before that to the late 80s and you're only paying $175k for the house, but paying interest at 24% - your monthly payments are $3,152. Difference between that and $4,622 is 47%; for 20 years inflation 1990 to 2010 inflation was 56%, and presumably wage growth higher than that.

    I mean of course how people can save their deposit is another question entirely. But monthly affordability is arguably easier than it's been in a while. I absolutely see another cycle of increases coming soon.

    Soon we'll have the part-buy schemes with either NFP corporations or the government, where you only buy 25% of the house and rent the rest, slowly laddering up. That increases affordability... and thereby bumps house prices up.

    Eventually we'll see intergenerational mortgages; bumping out from 30 to 50 years; that drops the payments mentioned above from $4,967 to $3,885. That allows house prices to rise another 25-30% as people realise that they can afford more house.

    And then you have to consider that by international standards NZ houses are still cheap. Try buying a standalone house in London anywhere within an hour's walk to the CBD. I don't think they even exist, but if they do you're talking multi-million pounds.
    CLIENT LIST FULL - Waitlist Available: [email protected]
    AAT Accounting Services - Property Specialist - AATAccounting.co.nz
    Lower fees for investors, traders & real estate agents!

  3. #3
    Join Date
    Mar 2016
    Posts
    365

    Default

    I wouldn't waste time trying to predict or time the market, id buy what you can afford now..then your question will be answered in 2030.

  4. #4

    Default

    Quote Originally Posted by Anthonyacat View Post
    Affordability is little changed from ten years ago last I saw, isn't it? A $700k house back then you'd have borrowed $630k (90%) at 8% interest. Monthly payments $4,622. House is now worth $1.4M, you borrow $1.12M (80%) at 3.4% interest. Monthly payments $4,967 - that's only an increase of 7.5% over 10 years; well below inflation and average wage growth.

    Go back 20 years before that to the late 80s and you're only paying $175k for the house, but paying interest at 24% - your monthly payments are $3,152. Difference between that and $4,622 is 47%; for 20 years inflation 1990 to 2010 inflation was 56%, and presumably wage growth higher than that.

    I mean of course how people can save their deposit is another question entirely. But monthly affordability is arguably easier than it's been in a while. I absolutely see another cycle of increases coming soon.

    Soon we'll have the part-buy schemes with either NFP corporations or the government, where you only buy 25% of the house and rent the rest, slowly laddering up. That increases affordability... and thereby bumps house prices up.

    Eventually we'll see intergenerational mortgages; bumping out from 30 to 50 years; that drops the payments mentioned above from $4,967 to $3,885. That allows house prices to rise another 25-30% as people realise that they can afford more house.

    And then you have to consider that by international standards NZ houses are still cheap. Try buying a standalone house in London anywhere within an hour's walk to the CBD. I don't think they even exist, but if they do you're talking multi-million pounds.
    What about cost to build? How do you factor that in? 6 years ago, it cost us $1800 per SQM to build, I doubt you could get that price now, maybe $2500 per SQM is more realistic! Also our low wage growth also should be a factor, different story in Australia where their income is so much higher than ours.
    "Remember, people will judge you by your actions,not your intentions.You may have a heart of gold -but so does a hard-boiled egg".

  5. #5

    Default

    Quote Originally Posted by Anthonyacat View Post
    Eventually we'll see intergenerational mortgages; bumping out from 30 to 50 years; that drops the payments mentioned above from $4,967 to $3,885. That allows house prices to rise another 25-30% as people realise that they can afford more house.
    You see this is the catch, banks are wanting this rise to continue so that we are slaves to the mortgage! What i am trying to say is when will the sheep wake up and realise that we are being conned into this pyramid scheme, Im all for growth but to be honest this willingness to keep extending the mortgage term is just ludicrous, so by extending your mortgage 20years, you have absolutely no way of paying this off in your lifetime, why 50yrs, why not 100, 1000, why stop there? May as well rent as you will NEVER own the house.
    "Remember, people will judge you by your actions,not your intentions.You may have a heart of gold -but so does a hard-boiled egg".

  6. #6

    Default

    Quote Originally Posted by Anthonyacat View Post
    And then you have to consider that by international standards NZ houses are still cheap. Try buying a standalone house in London anywhere within an hour's walk to the CBD. I don't think they even exist, but if they do you're talking multi-million pounds.
    Its all relevant isn't it? I doubt the income levels in London are equal to Auckland! Also central Auckland is not cheap, Asian money has made sure of that, its a ripple effect, big money flows into Auckland central, good school zones etc (again asians) and old money gets pushed out to the suburbs, no longer can kiwis afford to live there.

    So for me affordability and immigration are the REAL issues, no longer can the born and bred kiwi compete with the increases brought on by foreign money.
    "Remember, people will judge you by your actions,not your intentions.You may have a heart of gold -but so does a hard-boiled egg".

  7. #7

    Default

    Quote Originally Posted by Jeffa View Post
    I wouldn't waste time trying to predict or time the market, id buy what you can afford now..then your question will be answered in 2030.
    Thats the difficulty atm, what I can afford is not very nice so trying to pick the time for me is crucial, of coarse I'm still looking but hey.
    "Remember, people will judge you by your actions,not your intentions.You may have a heart of gold -but so does a hard-boiled egg".

  8. #8
    Join Date
    Mar 2016
    Posts
    365

    Default

    By reading your comments mr or mrs freezing hot,it sounds like you don't want to buy a house..you just keep making excuses not too...that's fine..remember to pay my rent on Thursday. Have a full and wonderful life.

  9. #9
    Join Date
    Sep 2004
    Location
    Hastings
    Posts
    15,422

    Default

    A secondary question might be: what is the supply like, compared to availability?

    Both places to buy or to rent. And how does it differ from one part of NZ to another?

    Seasonal factors (mainly apples) seem to have put extreme pressure on rentals in the Napier / Hastings area.
    Want a great looking concrete swimming pool in Hawke's Bay? Designer Pools will do the job for you!

  10. #10
    Join Date
    Dec 2007
    Location
    napier
    Posts
    177

    Default

    Quote Originally Posted by Jeffa View Post
    I wouldn't waste time trying to predict or time the market, id buy what you can afford now..then your question will be answered in 2030.
    Very bad advice, now is NOT the time to be buying trust me!


 

Thread Information

Users Browsing this Thread

There are currently 1 users browsing this thread. (0 members and 1 guests)

Similar Threads

  1. 2020 Predictions
    By Perry in forum Property Investment (NZ)
    Replies: 368
    Last Post: 11-05-2020, 10:25 PM
  2. Ban On Single Use Plastic Politicians Sept 2020
    By Perry in forum General (NZ)
    Replies: 10
    Last Post: 11-02-2020, 06:16 AM
  3. Will OCR drop again next year Feb 2020?
    By Chelsea in forum Property Investment (NZ)
    Replies: 4
    Last Post: 09-12-2019, 08:07 AM
  4. Wanaka house prices for 2020?
    By jack2016 in forum Property Investment (NZ)
    Replies: 1
    Last Post: 15-09-2019, 12:02 PM
  5. Vietnamese Student First Time Renting in Dunedin, NZ (2020), Needs Advice
    By thangpham in forum Property Investment (NZ)
    Replies: 2
    Last Post: 12-09-2019, 06:04 PM
  6. Replies: 8
    Last Post: 23-09-2012, 10:08 PM
  7. New Zealanders want cigarettes banned by 2020
    By muppet in forum Coffee Lounge
    Replies: 25
    Last Post: 11-02-2010, 08:30 AM
  8. Replies: 0
    Last Post: 14-04-2009, 09:33 AM

Tags for this Thread

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •