• Login:
Welcome, Register Here
follow PropertyTalk on facebook follow PropertyTalk on twitter Newsletter follow PropertyTalk on LinkedIn follow PropertyTalk on facebook
Page 2 of 3 FirstFirst 1 2 3 LastLast
Results 11 to 20 of 22

Thread: Buy or bye!

  1. #11

    Default

    I'm perfectly happy to buy more. I'm aware I own a buyer's agency so take your custom grain of salt with that. I settled on a trade last week and am doing DD on two holds. The trick I see it is to do your cashflow projections at higher interest rates and vacancies (not bank-level high, but sensible) and be near employment... so the same rules as always.

    I think some areas will soften but since I had no intention of buying a rental in Queenstown, Nelson or the Coromandel, I'm not really paying attention to it, although the front page of the Herald will scream it to the heavens. Nor am I buying in the $3mil family home range in Auckland.

    Here is why I think prices will hold, if not rise in mid-level areas near jobs.

    .... Interest rates are at 2.7, sliding to 2.5 and possibly lower. If you rent a $600,000 home somewhere for $600 per week you pay $31,200 per year in rent. If you bought that today with NO deposit, your first year interest per my spreadsheet at 2.7%/30yrs is $15,825 and principal $13,236. So you save a couple of thousand, own the home and have paid off a chunk of your mortgage. Make that a 10% deposit and your interest is $14,242 and principal $11,913. You are spending $100pw LESS than when you were renting and are killing your mortgage by more than $10K pa.

    So everybody who had servicing, didn't have a 20% deposit, has a job and can swing a loan, perhaps with family help, should be out there right now trying to buy a house.

    Another reason is cashflow. I can lock in 2.99% for 5 years. An awful lot of property became cashflow positive or at least neutral because of that. Mine were already very profitable and now it's just nuts once the rates roll over. A bank isn't going to take a super-profitable rental off you and you're not going to sell it, heck it might be your main income for a spell :-)

    Next reason is survival... IF you can get onto the new rates and IF you haven't borrowed against the house for a failing business or a holiday home & boat combo, then (remembering that you can go on I/O and defer for 6 months altogether if you must), plain survival is a whole lot easier than going into the GFC... when rates were at 10% and banks had the mindset that the "right thing" to do with any customer in trouble was to clean them out and have a firesale of their assets.

    Look at it this way, nobody is going to choose a mortgagee sale over an expensive break fee and my point that paying principal and interest is now cheaper than renting for most people really matters.

    Last reason is returns. If you are a saver then your returns now are very bad. Property, even at 4-5% yields... (ugh) is more profitable than leaving your cash in the bank.

    Etcetera. My goal is to double my passive income this year. If it all goes wrong I'll move to Fiji and blame forces outside my control.
    Free online Property Investment Course from iFindProperty, a residential investment property agency.

  2. #12
    Join Date
    Jan 2014
    Posts
    1,035

    Default

    Quote Originally Posted by propertybuyingNZ View Post
    What is your opinion on Steven Goodie's take, that the property prices will not fall, actually the opposite?
    I am shopping for pre-approvals now, but not sure to jump in or wait. My gut tells me, its not over yet, actually the real mess has barely started yet.
    The thing is no one is really sure are they?? But by all accounts this crisis is sure to be worse that the GFC, what I do know is finance is becoming difficult if you are an investor as the mainstream banks are not that keen on lending to investors atm. That I am sure of.

    But it really makes no sense just saying house prices won't be affected by this, I agree the market will continue to rise, but will it rise in the next 6 months/a year? Cant see that happening with all bad news coming out daily.

    Then again what would I know.
    "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".

  3. #13
    Join Date
    Feb 2013
    Posts
    387

    Default

    agree lending is tough even more so for developers ..hence the likes of DU VAL and Williams corp offering 10%, I feel lot of apartment type developers will go up the wall.
    the advert reads
    "MASSIVE INTEREST IN THE DU VAL MORTGAGE FUND
    During times of uncertainty, it’s important to put 10x the amount of work you would usually invest into the business to build financial resilience. One of the ways we’re doing this is by building capital! We’ve only been advertising the Du Val Mortgage Fund for two weeks and our team have been absolutely inundated with enquiry.

    Why are so many investors enquiring?

    Impressive 8.5% fixed return p.a.
    Secured by registered mortgage (the same security we provide our banks)
    Tax-efficiency
    Peace of mind investing with a developer who has scale"

  4. #14

    Default

    Quote Originally Posted by Nick G View Post

    Etcetera. My goal is to double my passive income this year. If it all goes wrong I'll move to Fiji and blame forces outside my control.



    The whole post was long but well worth a read... especially for this last line!!

  5. #15

    Default

    Quote Originally Posted by BlueSky View Post
    agree lending is tough even more so for developers ..hence the likes of DU VAL and Williams corp offering 10%, I feel lot of apartment type developers will go up the wall.
    the advert reads
    "MASSIVE INTEREST IN THE DU VAL MORTGAGE FUND
    During times of uncertainty, it’s important to put 10x the amount of work you would usually invest into the business to build financial resilience. One of the ways we’re doing this is by building capital! We’ve only been advertising the Du Val Mortgage Fund for two weeks and our team have been absolutely inundated with enquiry.

    Why are so many investors enquiring?

    Impressive 8.5% fixed return p.a.
    Secured by registered mortgage (the same security we provide our banks)
    Tax-efficiency
    Peace of mind investing with a developer who has scale"
    Didn't the guy behind Du Val go broke in the GFC... an all in ego driven guy who plays big and takes risks with someone else's funds??

  6. #16
    Join Date
    Sep 2007
    Location
    Auckland
    Posts
    8,455

    Default

    Quote Originally Posted by Don't believe the Hype View Post
    Didn't the guy behind Du Val go broke in the GFC... an all in ego driven guy who plays big and takes risks with someone else's funds??
    Oh you doom and gloomer. /sarc off.

    I'll just leave this here: https://www.kenyonclarke.com/
    Squadly dinky do!

  7. #17

    Default

    Thanks Nick, always enjoy your posts!

    I was wondering, in about 5 months, from top of my head 20k mortgage holidays will expire, now, some of those folks will be in trouble financially, and if you have no income, then you can not get a new mortgage, does not matter how low the rates are.

    Generally, NZ property market is tiny, right now there are 500 properties for sale in Wellington, what is really nothing, lets say just a 100 ppl from that 20k is forced to sell their houses to cover mortgage, that would be 20% of the total house stock comes on the market for discount. Well, of course Steve and you guys (or us) potentially could snap them up, but we would also push the prices down, and that would have some effect.

    of course it is just speculation, but could very likely happen.

    from the other hand, I can imagine that the end of 2021 will produce good capital growth, generally more bullish on property for long term, that is for sure.

  8. #18
    Join Date
    Jan 2014
    Posts
    1,035

    Default

    Quote Originally Posted by propertybuyingNZ View Post
    Thanks Nick, always enjoy your posts!

    I was wondering, in about 5 months, from top of my head 20k mortgage holidays will expire, now, some of those folks will be in trouble financially, and if you have no income, then you can not get a new mortgage, does not matter how low the rates are.

    Generally, NZ property market is tiny, right now there are 500 properties for sale in Wellington, what is really nothing, lets say just a 100 ppl from that 20k is forced to sell their houses to cover mortgage, that would be 20% of the total house stock comes on the market for discount. Well, of course Steve and you guys (or us) potentially could snap them up, but we would also push the prices down, and that would have some effect.

    of course it is just speculation, but could very likely happen.

    from the other hand, I can imagine that the end of 2021 will produce good capital growth, generally more bullish on property for long term, that is for sure.
    And this is what I am thinking as well, no job, no mortgage. Its really that simple. The other thing to consider will be confidence, the media are drumming up all sorts of mixed messages atm and their is raft of so called economists saying all sorts of things, confusion reigns so all I can deduct from all of this is that I have no clue what is going to happen. So in light of all this I am actively trying to buy something now if the numbers stack up, although I know lending is tight atm and a lot of deals are falling over because of finance. Just happened to me this week, couldn't quite get enough of the loan that I needed. Interesting times indeed.
    "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".

  9. #19

    Default

    Quote Originally Posted by Davo36 View Post
    Oh you doom and gloomer. /sarc off.

    I'll just leave this here: https://www.kenyonclarke.com/

    Sorry for that dose of reality... in essence behind all the glossy photos and symbolism of success is a whole lot of risk... at least the risk is being rewarded with a return far beyond the risk free rate of return.

    The glossy brochures help take peoples mind off the risk as they kiss their cash goodbye


    As Nick said if it fails they can always head to Fiji and blame forces outside my control. With that in mind I'm predicting a boom in property in Fiji!!

  10. #20
    Join Date
    Sep 2007
    Location
    Auckland
    Posts
    8,455

    Default

    Quote Originally Posted by Don't believe the Hype View Post
    Sorry for that dose of reality... in essence behind all the glossy photos and symbolism of success is a whole lot of risk... at least the risk is being rewarded with a return far beyond the risk free rate of return.

    The glossy brochures help take peoples mind off the risk as they kiss their cash goodbye


    As Nick said if it fails they can always head to Fiji and blame forces outside my control. With that in mind I'm predicting a boom in property in Fiji!!
    Must be about time for another coup...
    Squadly dinky do!


 

Thread Information

Users Browsing this Thread

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

Posting Permissions

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