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Info on the NZ property market

Info on the NZ property market

Old Sep 27th 2003, 10:45 am
  #1  
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Default Info on the NZ property market

Thought these articles about the current housing boom in NZ may be of interest to everyone. They include a couple of case studies at both ends of the Auckland market, as well as up and coming areas in Auckland, and the housing boom in Nelson. :


Case study 2: $380,000 buys a foot on the property ladder

27.09.2003
By BERNARD ORSMAN
Looking for the average home in Auckland City? Here it is. A four-bedroom, nicely renovated villa with polished floors in Selwyn St, Onehunga. Not the best address in this up-and-coming suburb, but a pretty entry level pad all the same.

The new owners, an English couple with two young boys, paid $385,000 this month for the sunny house with a modern kitchen and two bathrooms on a cross-leased section. Rest of article: http://www.nzherald.co.nz/storydispl...ondsubsection=

and

Also http://www.nzherald.co.nz/storydispl...ondsubsection=

and

http://www.nzherald.co.nz/storydispl...ondsubsection=

and

http://www.nzherald.co.nz/storydispl...ondsubsection=


Very interesting - just hope the market slows before we get there!
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Old Sep 27th 2003, 10:56 am
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Default Re: Info on the NZ property market

Originally posted by jandjuk
Thought these articles about the current housing boom in NZ may be of interest to everyone. They include a couple of case studies at both ends of the Auckland market, as well as up and coming areas in Auckland, and the housing boom in Nelson. :


Case study 2: $380,000 buys a foot on the property ladder

27.09.2003
By BERNARD ORSMAN
Looking for the average home in Auckland City? Here it is. A four-bedroom, nicely renovated villa with polished floors in Selwyn St, Onehunga. Not the best address in this up-and-coming suburb, but a pretty entry level pad all the same.

The new owners, an English couple with two young boys, paid $385,000 this month for the sunny house with a modern kitchen and two bathrooms on a cross-leased section. Rest of article: http://www.nzherald.co.nz/storydispl...ondsubsection=

and

Also http://www.nzherald.co.nz/storydispl...ondsubsection=

and

http://www.nzherald.co.nz/storydispl...ondsubsection=

and

http://www.nzherald.co.nz/storydispl...ondsubsection=


Very interesting - just hope the market slows before we get there!
I know of a really nice house on 1/4 acre in Titirangi going cheap at $355,000 ....LOL


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Old Sep 30th 2003, 12:07 am
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Look before you leap with NZ property purchase. Certain areas (better parts of Chch, Nelson, Blenheim for starters S Island) look in full throttle bubble right now. Eg Nelson properties up 50% y-o-y. Not sustainable.

Nelson real estate agent told me they used to have 200 properties for sale on their books but now only have 30 (which he told me were generally disappointing - ie rubbish). Remember supply and demand?

All it takes is a fall back of 25% in property prices and a repositioning of the Kiwi dollar by 15% and you could be looking at big losses if you might convert back - or would have been better off waiting a bit.
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Old Sep 30th 2003, 8:41 am
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yes I'm praying for a crash around the end of 2004!
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Old Oct 1st 2003, 12:29 am
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But then local advice is saying that whilst the market may flatten, an outright slump is unlikely. There are definite property hotspots - Auckland, some parts of Wellington, some parts of Christchurch, Nelson and Marlborough, Queenstown Lakes, Martinborough. These are often linked to water views, access to wineries and overseas interest. The greater the number of immigrants and o/s investors who buy in these areas, the more sustainable the boom. And the further and further apart the market 'value' of property and its accessiblity to people who live their lives on Kiwi wages. There is also a belief that NZ property was undervalued in the first place in the international scheme of things and that some of the boom is a long overdue levelling. All know is that i have been offered a good job in Queenstown this week that i can't take as I know that I can't afford to buy even a modest place to live.
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Old Oct 1st 2003, 6:15 am
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Don,

You say "..All it takes is a fall back of 25% in property prices and a repositioning of the Kiwi dollar by 15% and you could be looking at big losses if you might convert back .." Do you think that this is likely?
Firstly - loss of 25% in property prices, all of the indicators at the moment point to a still rising property market. Low (by NZ standards) interest rates, attractiveness of NZ at the moment to foreigners and the influx of kiwi ex-pats and immigrants with plenty of wedge.
Secondly - repositioning of the kiwi dollar by 15%, although the more likely of the two scenarios is still unlikely. The low interest rates I spoke of earlier are at least a couple of percent higher than any other stable economies. This makes the kiwi dollar an attractive proposition for investors when worldwide stock markets are behaving so unpredictably. Therefore many analysts are predicting that the kiwi dollar will remain strong for the medium term (12 months) at least.
Add to the argument the fact that property in NZ has been undervalued for years, in world terms and I believe what we are seeing is a long overdue repositioning.
Very few people in NZ are predicting fall in house prices, many are predicting rises, though we may now be over the worst/best of it and some are predicting that the house prices will remain stable.
The price rises seen are unsustainable, but expect double digit growth for the next 12 months at least in the more attractive areas and probably double that for sea front properties.
I have seen first hand the property boom in Auckland as I have been trying to buy for the last 3 months and by waiting for the right house I have seen prices rise by approx. 20%. This is not an exaggeration, I was looking at $300k for a property and the same properties are now going for $350k.
So you may lose out by taking the plunge, but you may also lose out by not, so what do we do???? who knows
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Old Oct 4th 2003, 8:39 am
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Originally posted by Bladesman
Don,

You say "..All it takes is a fall back of 25% in property prices and a repositioning of the Kiwi dollar by 15% and you could be looking at big losses if you might convert back .." Do you think that this is likely?
Firstly - loss of 25% in property prices, all of the indicators at the moment point to a still rising property market. Low (by NZ standards) interest rates, attractiveness of NZ at the moment to foreigners and the influx of kiwi ex-pats and immigrants with plenty of wedge.
Secondly - repositioning of the kiwi dollar by 15%, although the more likely of the two scenarios is still unlikely. The low interest rates I spoke of earlier are at least a couple of percent higher than any other stable economies. This makes the kiwi dollar an attractive proposition for investors when worldwide stock markets are behaving so unpredictably. Therefore many analysts are predicting that the kiwi dollar will remain strong for the medium term (12 months) at least.
Add to the argument the fact that property in NZ has been undervalued for years, in world terms and I believe what we are seeing is a long overdue repositioning.
Very few people in NZ are predicting fall in house prices, many are predicting rises, though we may now be over the worst/best of it and some are predicting that the house prices will remain stable.
The price rises seen are unsustainable, but expect double digit growth for the next 12 months at least in the more attractive areas and probably double that for sea front properties.
I have seen first hand the property boom in Auckland as I have been trying to buy for the last 3 months and by waiting for the right house I have seen prices rise by approx. 20%. This is not an exaggeration, I was looking at $300k for a property and the same properties are now going for $350k.
So you may lose out by taking the plunge, but you may also lose out by not, so what do we do???? who knows
Your points are valid, of course. Another 40,000 migrants next year, all wanting somewhere to live, and there certainly won't be a big slump. NZ economy doesn't look likely to go tits up, just slow a bit. I reckon the Kiwi dollar is most likely to be repositioned (as you say) - but 15% lower against the USD might not mean 15% lower against the GBP or Euro. Everybody here is v bullish about house prices but there are huge mutterings by exporters about the dollar's rise and even huger mutterings by the cheeky honkeys about the number of migrants. Govts get re-elected on their economic performance but there's a lot more in the election pot than homeowners feeling richer (in most cases by a measely hundred thou or so which is hardly going to change somebody's life.)

The old advice about feeling confident about property purchase if you like the place and think it's appropriate value and won't need to sell for a few years - holds good. But anybody wanting to make capital gains or just preserve the value of the house/asset they have bought now needs to be more careful than 2 years ago. Time perspective could be key.
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