Genesis

FYI. NZ now has an OCR of 3%. This translates to 6% on the high street or thereabouts for mortgages. The housing market is very, very stressed at present with a huge glut of homes on the market. Prices are continuing to drop and some pundits have mooted there is another 10-15% to drop. That is really good news for folk wanting to buy where NZ has been historically one of the most expensive places to buy a house/shed in relation to wages. For those about to arrive it may be prudent to wait for a wee while to let the prices drop further. NZ interest rates are tipped to keep rising by the way. Bad news for the mortgage payments. Swings and roundabouts eh?

danjones1

but house price only go up, dont they?

Genesis

Like shares houses go up and down in value. Over a 20 year period you will in nearly all cases make money on a house for sure. That is the long term. BUT this is about what is happening now. It is not wise to buy shares that are on a downward trend. Same re houses unless of course you have found a honey and you can afford it. If not you may as well wait until they have hit the bottom of the trough. Especially if said houses/shares are overvalued as they are now.

Having said all that a house is what you are prepared to pay for it. I was told by a number of neighbours I paid too much for my NZ house back in 2005. That may well be the case re market values. Little do they know I would have paid another 25% for it as it was well within our budget and was what I saw as a 'dream home' and would have paid a lot more for it. By contrast I thought it was 'silly cheap'.

theduke

Toon_Nut

I almost choked on my bowl of cornflakes when I read that this morning!

Mate, I'll bet all the UK's negative equity on that comment right now. It's exactly like Genesis said; long term I think it would be very very difficult not to make money in any housing Market anywhere in the world. Where a lot of people go wrong is after say 5,6 or 7 years they see this "cash" tied up in their house, it's their's, they've payed for it and now they want it back, right now. So the inevitable re-mortgage comes into play and they take out of the house some of what they gained over the years, all well n good if your investing it in the property itself, no good if it's for a holiday in the sun twice a year and a newer car.

As my dear old Grandad used to say, "F'IN HELL, GERMANS - THOUSANDS OF THE BASTARDS!!!", he was in the trenches in WW1 you see!

His second favourite saying was "Borrowing to invest is the road to success, borrowing to spend is the road to the end". Wise words old man, and did I listen? Did I shite!!

Dewb09

squarepants

Houses in the bracket we were looking at $380 - $440 have fallen by about $30,000 since November - some more some less.

That's not a scientific study mind - just browsing Trademe/estate agents and property mags and seeing what has come into our price range.

We're also viewing houses on a regular basis and the quality of what's within our range has also improved.

There are lots of houses on the market here which have been up for sale for well over a year. Sometimes they take them off and re-list them with different photos so it's not obvious it's the same property.

Renting is by far the best advice we've been given and it's saved us a lot of money. Although interest rates are set to rise, so is debt and more people are using credit cards to pay bills here than before (according to the news) so given our experience in the UK - it can only mean that house prices will drop further.

In the same news report re the credit card debt, the pundit also said that the recession was now hitting the upper middle classes in a way it hadn't before. The ones who though they could ride it out, so there will be less disposable income in the economy. Perhaps this is reflected in the high number of houses $550,000 + going to auction.

Wilester

Ive been following property on the main 2 NZ property sites (You know who they are) and it looks very much like a buyers market if i was in the position to i would be looking way out of my price range and making some outrageously low offers on lots of properties that they have listed

chocolate cake

House prices generally do go up over a longer term, but I'd agree prices have come down. I'd think there's still room for them to come down further, still historically high against the norm relative to incomes, and interest rates rising again.

If you're already in the house market and not looking to get out, it makes little difference which way prices move, as if price of your existing house moves up, so does it's replacement and vice versa.

For those yet to enter bthe NZ house market though, IMHO I don't they rushing in.

Am Loolah

Unfortunately we bought our house when we arrived, at the peak of the market mid-2007. I am now in the sad position of looking at having to sell it as we have split up. My guesstimate is we will lose approximately $100,000.

If we do get a sale I will rent after that for many reasons, but the ones relevant to this discussion are that I think prices may drop a little further, I need to be in a different school zone for the start of the school year in 2012 and I can't really afford to tie my limited funds up in property until I have a better idea of what my income is likely to stabilise at being self-employed.

I am kind of over the whole house ownership pressure since moving here to be honest. I see nothing wrong with going into rented, be it long-term, and not having the maintenance expenditure etc. Sure there's always the "money down the drain" thought and also the unexpected, if the landlord wants possession back. But for me personally coming out of a separation etc it seems a better personal option.

Toon_Nut

Just out of interest, what's usually included in the weekly/monthly rent?

Are utility bills etc etc on top of the advertised rent?

Am Loolah

Yes along with water rates usually. The only thing a tenant doesn't pay is the rates, Landlord pays them. Although, as I say, water varies from District council as sometimes water is costed in to the rates. There's also the upkeep of the lawns and gardens usually paid for by the tenants on top of the rent, but again this varies.

whitesand

Genesis, interesting points you make about houses. We've rented many a 'dream home' here which turned out to be a nightmare. Glad we could simply walk away with three weeks notice! Houses in NZ can be deceptive and all that glitters etc., etc. Folks need to view the property market with a great deal of cynicism, something in short supply here. Remember, real estate is one of the major industries and with that comes lots of hype. I love reading all the descriptions in the weekend For Sale sections of the newspapers. Pure fantasy!

Perry Groves

Good news for us maybe, as we will be looking in Wellington area

Genesis

There is a lot to be said for renting. We really wanted to rent to start off but could not find a rental big enough for a full 40 foot container!!! Renting means someone else has to maintain your property. There is little or no gain at present to be had in capital growth and that may well be the case for some time. We have invested loads of money in this house and we too have made little if any capital growth in 5 years. So whilst we live in a very warm, dry and cosy house it has robbed us of a huge amount of cash..a rental won't do that!! We did it for the long term and who knows in 40 years the double glazing and central heating etc may have paid for it self!!!!!