house prices
Mar 6th 2008, 3:02 pm
#16
Forum Regular
Joined: Dec 2007
Location: Bolton
Posts: 141
Re: house prices
*Some* UK equity is the key to a decent life here. For people starting from scratch NZ is a harsh place to begin, as harsh if not harsher than the UK. 1st time buyers on the 'median' wage haven't got a hope of getting on the property ladder without a big leg-up from the bank of mum & dad or a lotto win, and even then only with both them and their partner working full time. I now 100% see why there are so many Kiwi's in the UK!
I'm considered a 'professional' by NZ Immigration and I'm in recruitment, my wife is a primary teacher. We make well above the median household income here, yet even so it's not as easy to make it stretch as we had first hoped it would be. Then again, some of our property buying decisions could be construed as risky and we will either pay the penalty or reap the rewards in the years to come.
The main thing is that unless you have 100k ukp or more to convert to dollars and pay off a large slice of a property, you may well find a move to NZ leaves you with a bigger mortgage. Ok, you have a 'better' house, but what's the point if you are always at work?! We encourage people who ask to consider 'like-for-like' when looking at property out here, and compare a UK 3 bed house to a NZ 3 bedder etc. Only then do the advantages of UK equity buying NZ property shine through.
If you are expecting to leave your 1910, 3 bed terrace in the UK and use the equity to buy a 'nice' house here outright with the equity then you'll be disappointed. If you change focus to buying a 3 bed house here, of a similar floor size (say 100 square metres or so...?) then you'll be pleasantly surprised!
My bro and sis-in-law have just moved out here, and put an offer in on a beauty of a house, which was fortunately rejected as on reflection they realised it would take all of her income to fund the mortgage, where as in the UK it was only 2/3 of her income for the same.
It is SO easy to get carried away, but once that UK equity is gone, it's gone. Always tie that money up in an appreciating asset like a house and NOT in boats, big cars and all the toys whilst renting. Some people do, and when the money runs out it is NOT a pretty sight, for them or their families, when they realise that they are stuck here as they have no money to make the move back home/ elsewhere.
Play the game carefully, consider each move and don't get carried away and it is very possible to have a great time in NZ - and good luck to all of those here that have done it, or are in the process of trying
I'm considered a 'professional' by NZ Immigration and I'm in recruitment, my wife is a primary teacher. We make well above the median household income here, yet even so it's not as easy to make it stretch as we had first hoped it would be. Then again, some of our property buying decisions could be construed as risky and we will either pay the penalty or reap the rewards in the years to come.
The main thing is that unless you have 100k ukp or more to convert to dollars and pay off a large slice of a property, you may well find a move to NZ leaves you with a bigger mortgage. Ok, you have a 'better' house, but what's the point if you are always at work?! We encourage people who ask to consider 'like-for-like' when looking at property out here, and compare a UK 3 bed house to a NZ 3 bedder etc. Only then do the advantages of UK equity buying NZ property shine through.
If you are expecting to leave your 1910, 3 bed terrace in the UK and use the equity to buy a 'nice' house here outright with the equity then you'll be disappointed. If you change focus to buying a 3 bed house here, of a similar floor size (say 100 square metres or so...?) then you'll be pleasantly surprised!
My bro and sis-in-law have just moved out here, and put an offer in on a beauty of a house, which was fortunately rejected as on reflection they realised it would take all of her income to fund the mortgage, where as in the UK it was only 2/3 of her income for the same.
It is SO easy to get carried away, but once that UK equity is gone, it's gone. Always tie that money up in an appreciating asset like a house and NOT in boats, big cars and all the toys whilst renting. Some people do, and when the money runs out it is NOT a pretty sight, for them or their families, when they realise that they are stuck here as they have no money to make the move back home/ elsewhere.
Play the game carefully, consider each move and don't get carried away and it is very possible to have a great time in NZ - and good luck to all of those here that have done it, or are in the process of trying
sb
Mar 6th 2008, 10:10 pm
#17
NZ ways is best ways :0)
Joined: Oct 2006
Location: Christchurch, NZ
Posts: 1,109
Re: house prices
Regarding your question I'd say heavily question your motivation for the move. If it is because you want 'bigger house, less mortgage, AND an easier, more laid back life' then you will be disappointed as one will not come with the other in place.
If it's to have the same physical 'stuff', but in a different part of the world with a smaller mortgage, and more time to enjoy life, your kids and your past times, in a great outdoor playground then NZ is a great place.
I am not being negative in this thread - for me NZ is working out very nicely so far, but I hate for people to arrive and then be instantly disappointed at what they can afford against what they wanted to afford. Good on you for asking the questions, getting the answers, and questioning your motives - overall it will mean that you will be making an informed - and possibly 100% correct decision. What that decision is? I'm afraid that one is up to you.
Good luck!
Apr 2nd 2008, 3:19 am
#18
Just Joined
Joined: Apr 2008
Posts: 25
Re: house prices
Hi Welshwales, we are in the same boat. We came to Auckland six months ago with £35k in the bank hoping to put a big deposit down and get somewhere NICE.
However our buying plans have been stalled for 2 reasons-
1. We are both self-employed and establishing a new client base, so the income stream is far from steady right now. But more importantly for you:
2. You have to appreciate the long term impact of the US sub prime / credit crunch on property prices in countries where house prices were already over inflated.
We are looking to buy on the Hibiscus Coast, where according to analysts the average house price is a whopping 40% over-inflated. That's not to say they are definitely going to suffer a 40% crash... but certainly they can't stay that high with the current stock market turmoil. Interest rates are changing, loans are harder to get, banks are folding. Its no longer as easy to take on debt now - for anyone. On a global scale, there is absolute turmoil in the markets. This will have its impact - even on your GBP-NZD currency exchange.
Besides that, people are being priced out of the market and that eventually FORCES prices back down. The only problem is, estate agents and sellers are in denial, so it will take time before these "market makers" react.
What I'm saying is, right now is only a good time to buy if you dont mind the value of your new house dropping - say by 10 or 20% - in the short term before it ultimately starts rising again. In 10 years time you could well have a capital gain. But in the short term, it makes sense to hold off and get a better bargain - ie get a better house for the same amount of money.
We calculated our annual rent to be roughly 5% of the price of a house. So if prices fall more than 5% per year - it'll be technically worth the wait. And funnily enough that has already happened in the last three months alone.
What the others here say is true, about the capital and nice salary. But I say: wait for the bargains to appear. Estate agents are in panic mode, making 10 sales a month instead of 30 in our area. Last week we dropped in on an open house- a real big place with gorgeous views - and we were the only ones who showed up the whole time. We wouldnt even consider buying right now in this financial climate. Every penny counts!!
Sit tight!
However our buying plans have been stalled for 2 reasons-
1. We are both self-employed and establishing a new client base, so the income stream is far from steady right now. But more importantly for you:
2. You have to appreciate the long term impact of the US sub prime / credit crunch on property prices in countries where house prices were already over inflated.
We are looking to buy on the Hibiscus Coast, where according to analysts the average house price is a whopping 40% over-inflated. That's not to say they are definitely going to suffer a 40% crash... but certainly they can't stay that high with the current stock market turmoil. Interest rates are changing, loans are harder to get, banks are folding. Its no longer as easy to take on debt now - for anyone. On a global scale, there is absolute turmoil in the markets. This will have its impact - even on your GBP-NZD currency exchange.
Besides that, people are being priced out of the market and that eventually FORCES prices back down. The only problem is, estate agents and sellers are in denial, so it will take time before these "market makers" react.
What I'm saying is, right now is only a good time to buy if you dont mind the value of your new house dropping - say by 10 or 20% - in the short term before it ultimately starts rising again. In 10 years time you could well have a capital gain. But in the short term, it makes sense to hold off and get a better bargain - ie get a better house for the same amount of money.
We calculated our annual rent to be roughly 5% of the price of a house. So if prices fall more than 5% per year - it'll be technically worth the wait. And funnily enough that has already happened in the last three months alone.
What the others here say is true, about the capital and nice salary. But I say: wait for the bargains to appear. Estate agents are in panic mode, making 10 sales a month instead of 30 in our area. Last week we dropped in on an open house- a real big place with gorgeous views - and we were the only ones who showed up the whole time. We wouldnt even consider buying right now in this financial climate. Every penny counts!!
Sit tight!
Apr 2nd 2008, 3:37 am
#19
Joined: Nov 2006
Posts: 2,225
Re: house prices
Well, what are your reasons for wanting to live in NZ and why do you feel you need to buy a house as opposed to renting one? the interest rates are too high at the moment.
The housing market is falling in NZ, I've seen a house similar to the one we sold in the same area but with 50% more land come on the market recently for $175,000 less than what we sold ours for.....and it has a pool.
The housing market is falling in NZ, I've seen a house similar to the one we sold in the same area but with 50% more land come on the market recently for $175,000 less than what we sold ours for.....and it has a pool.
Apr 2nd 2008, 10:52 am
#21
BE Enthusiast
Joined: Mar 2005
Posts: 613
Re: house prices
I'd agree with the above. Now is not the time to be buying property in NZ. There are lots of houses around here which are not selling and appear to have little interest in them. Others have been on the market for ages.
Apr 2nd 2008, 11:07 am
#22
Joined: Nov 2006
Posts: 2,225
Re: house prices
I wonder how many of us had bigger mortgages in NZ than we ever had in the UK? it will be good for new arrivals to hold off buying for a while, the quietest time of the year for property sales is fast approaching and prices probably have a way to fall yet.
Apr 2nd 2008, 12:04 pm
#23
you dewty owld maan!
Joined: Oct 2005
Location: is practically perfect in every way
Posts: 5,565
Re: house prices
you also need to think about local authority rates - up on the Hibiscus Coast the local rag is up in arms over 25 - 50% increases in rates this year ....... landlord sorts that for us and we got a $20 pw rise to cover it over the next 12 months........not too painful.
Just make sure you get a good place, preferably managed and by decent agents. Ours is pretty good and we have Kiwis looking after our home and paying the mortgage, etc back in Blighty.
Houses are moving slow and I'd agree that this is not the best time to buy property in NZ, probably better to leave the money in some other "investment" or bank account.
Apr 2nd 2008, 12:11 pm
#24
Joined: Nov 2006
Posts: 2,225
Re: house prices
It's a great time for saving money with interest rates being so high.
with interest rates being so high.
Apr 2nd 2008, 2:17 pm
#25
BE Enthusiast
Joined: Apr 2007
Location: Was East Sussex, Now Titirangi, Auckland.
Posts: 771
Re: house prices
So, are you saying that to have just bought this place for 100k less than asking price was fool hardy?
http://www.realestate.co.nz/730943
http://www.realestate.co.nz/730943
Apr 2nd 2008, 2:29 pm
#26
Joined: Nov 2006
Posts: 2,225
Re: house prices
I've no idea, did you get a regsitered valuation done beforehand?
The ad mentions the site is ready for development - are you going to sell off the house and build on the section? it looks like a lovely spot.
The ad mentions the site is ready for development - are you going to sell off the house and build on the section? it looks like a lovely spot.
Apr 2nd 2008, 2:44 pm
#27
BE Enthusiast
Joined: Apr 2007
Location: Was East Sussex, Now Titirangi, Auckland.
Posts: 771
Re: house prices
We'll be developing the house, adding floor to get a better view of the sea and to add more living space, so wont be selling off the house.
Thank you.
Was just wondering if it's as good a buy as we think. It's been in the same family for 17 years and only the original family before that we believe.
Apr 2nd 2008, 2:55 pm
#28
you dewty owld maan!
Joined: Oct 2005
Location: is practically perfect in every way
Posts: 5,565
Re: house prices
So, are you saying that to have just bought this place for 100k less than asking price was fool hardy?
http://www.realestate.co.nz/730943
http://www.realestate.co.nz/730943
you have to live somewhere and why not there ??? Its a pretty big section and as Nerine suggests maybe that had some influence on the asking price...?? I understand that sub-dividing out west can be expensive on the consents front.........
presumably you went there several times to look at the sun position and checked whether the bush made it prone to damp/cold - although the advert says sunny? - that sort of house is going to be pretty sensitive to ambient conditions I'd say - looks like the bach-style house we rented when we first arrived (in mid-summer)....{edit} its very likely from the photos that it is open to the north (ie sunny) as the sea is very likely to be on the south side in those parts....doh..doh
Last edited by lardyl; Apr 2nd 2008 at 3:00 pm.
Apr 2nd 2008, 2:56 pm
#29
you dewty owld maan!
Joined: Oct 2005
Location: is practically perfect in every way
Posts: 5,565
Re: house prices
the very best of luck!
Apr 2nd 2008, 2:57 pm
#30
you dewty owld maan!
Joined: Oct 2005
Location: is practically perfect in every way
Posts: 5,565
Re: house prices
looks like you'll need a ride-on mower too......