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20% deposit needed to buy a house from oct

20% deposit needed to buy a house from oct

Old Jan 21st 2014, 6:26 pm
  #181  
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Default Re: 20% deposit needed to buy a house from oct

Originally Posted by bourbon-biscuit
But most folk on here agree a 'living conversion' of about 2.5-3:1, not 2:1 as you suggest. What you get when you bring money over from the UK is pretty meaningless when it comes to actually undestanding the cost of stuff bought here on money you earn here compared to stuff bought there on money you earn there. A $475k house in NZ is roughly equivalent in price to a house in the UK costing £ 160-190k, imo.
So taking into account that the average price of a detached UK house is £330k
http://news.bbc.co.uk/2/shared/spl/h...tml/houses.stm
Then what would that equate to in NZ$ ?
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Old Jan 21st 2014, 6:44 pm
  #182  
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Default Re: 20% deposit needed to buy a house from oct

Originally Posted by Stormer999
So taking into account that the average price of a detached UK house is £330k
http://news.bbc.co.uk/2/shared/spl/h...tml/houses.stm
Then what would that equate to in NZ$ ?
To me thats 660K NZD (still less than Auckland).
However, look at the value of a semii (203K) I see that as 406K. Try getting a decent semi (like the semi's they have at home) for that here, it doesn't happen. Exactly the sort of property I am trying to buy as a first timer.

Look, we're splitting hairs really. Yes, within an hour of London is expensive, I would struggle to a point to get a house there in my budget (but have a better chance than Auckland). However, I can live in beautiful places elsewhere in the UK that offers a big range of jobs (in multiple cities) and houses are relatively cheap. At the same time, I don't need a whopping 20% deposit for that.
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Old Jan 28th 2014, 2:03 pm
  #183  
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Smile Re: 20% deposit needed to buy a house from oct

That said Auckland is starting to slow, having a disproportionately younger population than the rest of the country so would be adversely affected by the LVR restrictions. The fundamentals are pretty good though, supply is still constricted and the export economy has been strong.

The LVR measures will only buy temporary respite however by deferring demand on to some later date. The restrictions can’t go on indefinitely. Let’s see if RBNZ pushes up rates tomorrow or sits on its hands until March.
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Old Jan 29th 2014, 4:34 pm
  #184  
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Default Re: 20% deposit needed to buy a house from oct

Originally Posted by Charismatic
That said Auckland is starting to slow
Would have to disagree, here's the latest news:
http://www.stuff.co.nz/business/mone...trip-Melbourne
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Old Jan 29th 2014, 8:27 pm
  #185  
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Default Re: 20% deposit needed to buy a house from oct

Originally Posted by davros1984
Would have to disagree, here's the latest news:
http://www.stuff.co.nz/business/mone...trip-Melbourne
Auckland salaries outstrip Melbourne - desperately need these kind of headlines

Last edited by Assanah; Jan 29th 2014 at 8:35 pm.
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Old Jan 29th 2014, 9:29 pm
  #186  
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Default Re: 20% deposit needed to buy a house from oct

Originally Posted by Assanah
Auckland salaries outstrip Melbourne - desperately need these kind of headlines
Confused? Sarcasm? Article was about house prices, unless you're expecting or hoping to see one on salaries!
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Old Jan 30th 2014, 1:33 am
  #187  
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Default Re: 20% deposit needed to buy a house from oct

Originally Posted by davros1984
Confused? Sarcasm? Article was about house prices, unless you're expecting or hoping to see one on salaries!
I am aware of the real headline. Rising house prices are not a problem per se but rising house prices and stagnating salaries are.
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Old Jan 30th 2014, 2:45 am
  #188  
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Default Re: 20% deposit needed to buy a house from oct

Originally Posted by ajwuk
I think the most amazing thing to me is that people are prepared to pay such vast sums of money for what is in most cases a timber clad shed with a corrugated tin roof. Most of these houses will be gone in a hundred years. If wages were showing any sign of increasing then maybe that would balance things a little but that's not happening. Many people say they love New Zealand and will stay at whatever cost because of the scenery and laid back lifestyle. How can it be laidback when you are paying through the nose for a mortgage and having to work long hours to cover it?
Yup but
Unfortunately rising house prices seems to be a trend across the g20 western world
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Old Jan 30th 2014, 5:25 am
  #189  
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Default Re: 20% deposit needed to buy a house from oct

Tsunami of cheap money and banks that don't have to worry about risk because they are "too big to fail"?
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Old Mar 29th 2014, 3:10 pm
  #190  
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Smile Re: 20% deposit needed to buy a house from oct

Well, it looks like RBNZ will end it's LVR push in the near future.

In a way although it appears to have failed to control rising prices it was a valuable lesson for RBNZ that their role isn't just monitory policy and inflation targeting but also confronting societal issues that government won’t. To that end Statistics New Zealand have been asked to increase the amount of data being produced on a wide range of issues.

In the meantime however they still need to get ahead of the fast rising housing market and the longer they leave rate hikes the more difficult it will be to return to normality. In a way they probably covered that:
"... LVR restrictions weren't intended to be permanent. He [Grant Spencer] also said the LVR restrictions were worth up to 50 basis points of Official Cash Rate (OCR) hikes, and the Reserve Bank sees a case to coordinate its monetary and macro-prudential policies, such as LVR restrictions, when the effects of those policies overlap." Which suggests he may bump rates up and kill LVR at the same time.
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Old Mar 29th 2014, 11:38 pm
  #191  
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Default Re: 20% deposit needed to buy a house from oct

As much as the restrictions were a pain in the Ar*e for a lot of people I beleive they have actually worked in our favour.

By this I mean that:

We have had to restrict our searches to properties that we could legitimately afford as opposed to strething our budget to breaking point. Had there been no restrictions we would have a bigger mortgage with bigger repayments and less equity. Every major bank offered us way more than we needed on a 6% deposit back in 2012, whereas not one would offer us a $ without the full 20%this time around.

The house we have just purchased was one that would have been attractive to first times buyers and young families but the majority of them have been wiped of the market due to the LVR restrictions meaning we were in a better position to negotiate.

Based on the current purchase price we have 20% equity in our home. This would have been inconceivable for us only two years ago.

We also wont be in a dire straits in the interests rates do go up by 2-3% again because the LVR restriction has placed limits on our purchasing power - which in my view will be a good thing in the medium term.

We arrived here with nothing more than a backpack and a lonely planet 3 years ago so for us the crazy NZ property market has been very kind.

I would expect that if the restrictions are lifted people will be keen to jump on the ladder and this may in turn mean that there is more demand than there is supply amd we know where this leads.

Time will tell.
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Old Mar 30th 2014, 8:00 am
  #192  
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Default Re: 20% deposit needed to buy a house from oct

Concur, it was incredibly irresponsible for the banks to lend crazy sums of money to people who will struggle to meet the mortgage payments (like work colleague's of my partners that I mentioned earlier on this thread). Another interest rate hike will most likely mean that they cannot afford their mortgage repayments without major alterations in their life.

I am not necessarily sure that the flat-out 20% rule was correct, sure, enforce higher LVR's, but those genuine first-time buyers, help them out a little. They needed to restrict the number of investors in the first-time buyer property market.

Unfortunately, they still haven't introduced a proper CGT for landlords. In addition, I mentioned about my friend's house in Beach Haven - which he bought 9 months ago for $460,000, now up for sale at $590K. Anyway, he has made an offer on a 4-bed house in Brown's Bay (over $800,000) and has done this without a deposit. He has used the equity from his current house in Beach Haven to finance the new mortgage. That's what FTB in Auckland are up against. Hence we are out of here in less than 2 months.
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Old Mar 30th 2014, 10:00 pm
  #193  
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Default Re: 20% deposit needed to buy a house from oct

See, I can't afford to buy here in the UK. Even if I could get employment near where I live, the mortgage I could get would cover a shoe box. If we move out of Cornwall and go elsewhere, I might be able to get work, and house prices may be lower (they're not exactly huge here) but we (as a family) like the life in Cornwall, we can't get that elsewhere in the UK. I can get work in the home counties, but still won't be able to afford to buy a home. If we leave Cornwall we plan for it to be to go to NZ. I can get work there, it will pay way better than here and working conditions will also be way better than here. If at some point I can buy a house, great. If not, we continue to rent as we do in the UK but at least I have a well paid, permanent job and beautiful surroundings. That alone is a vast improvement on our life here, where I have to travel to the home counties during the school holidays to do bank work there (I'm a midwife)...
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Old Mar 30th 2014, 10:26 pm
  #194  
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Default Re: 20% deposit needed to buy a house from oct

I have a number of questions for you, but first know this - I am from Cornwall - Illogan, to be exact. There is nothing I want more than to return back to my "native" land. I can tell you that I have been to most corners of NZ and whilst many places have been breathtaking, I have not found anywhere that ticks the boxes that Cornwall does, maybe its because its home? But also... the history, the beaches, the views, the food.


When I went back to visit my family for 3 weeks in September 2012, I was just shocked at how quiet empty everywhere felt in Cornwall (i.e. traffic/cars, people, queues) compared to living in Auckland. It was the same with food and the prices of most things there - substantially cheaper with petrol being the obvious exception.

You can buy houses in Cornwall for around 100,000-110K GBP (or less if you're willing to consider less obvious places and in my view - larger than shoeboxes). http://www.zoopla.co.uk/for-sale/det...4224bc4fc873e7

With the government's help to buy and some bank societies, i.e. Yorkshire Building Society, you can still buy a house for 5% outside of the government's scheme, so with a 5K GBP deposit and 1K mortgage fee + solicitor fees - you can. http://www.ybs.co.uk/mortgages/95/in...g-cmp-1-221113

The bit that is tricky for me (like you?) is that there is a lack of skilled work there. My partner has been looking at agency work in Cornwall and Devon (good-ish pay) and there are loads of them.

I'm happy to chat more. I'm being tough with you, because coming here is a huge thing. Being from Cornwall, I believe I can understand what its like. FYI.. I am in IT and my partner is a nurse here. We return back to the UK end of May - no idea where we will be, but will figure it out.

Last edited by davros1984; Mar 30th 2014 at 10:41 pm.
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Old Mar 30th 2014, 10:42 pm
  #195  
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Default Re: 20% deposit needed to buy a house from oct

Really? £100,000? I've not seen any that cheap apart from specific areas. At the moment we rent in Redruth, but we've lived all over Cornwall since we arrived!

We are not from Cornwall originally. I have loved all over, and made big moves around the country several times (though not out of country yet ) I guess I don't have my proper roots laid anywhere, Cornwall is as close as it comes, and I've only been here since 2007. Also I have no family around, aside from my mum who is in a nursing home near Helston.

Oh, and I'm avoiding Auckland Hamilton is where I'm hoping to get employment, and we plan to live in Te Awamutu. But, like I said, I can't buy here in the UK so not being able to buy in NZ isn't going to make a whole lot of difference to our quality of life!

Oh, and this housing bubble (or not) the bubble is still going strong here in the UK, despite the economic crash.

ETA: Oh and what area of IT? I will PM you
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