Real estate, post COVID-19 level 4 (since 2020)

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#2878560 4-Mar-2022 06:49

I like this guy's way of thinking. He's putting first home buyers ahead of himself.

https://www.stuff.co.nz/life-style/homed/housing-affordability/127863811/mega-landlord-drops-property-price-100k-and-may-sell-at-a-loss-as-prices-fall

GV27

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#2878562 4-Mar-2022 06:58

quickymart:

I like this guy's way of thinking. He's putting first home buyers ahead of himself.

https://www.stuff.co.nz/life-style/homed/housing-affordability/127863811/mega-landlord-drops-property-price-100k-and-may-sell-at-a-loss-as-prices-fall

Still love how 'accepts he may make a loss' some huge concession when it comes to housing investment. I thought it was about the rental income the whole time and the capital gain was the incidental bit?

Or am I saying the quiet part loud again?

quickymart

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#2879989 6-Mar-2022 22:29

I've noticed prices dropping over the last month or so - one property that was $699k is now around $650k. Maybe the buyers aren't there anymore because they can't get the finance (as easily)?

quickymart

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#2880013 7-Mar-2022 07:06

https://www.stuff.co.nz/life-style/homed/real-estate/127773204/how-much-harder-is-it-to-buy-a-house-in-2022-than-in-2002

Interesting comparison between then (2002) and now (2022). Anyone who bought a property at the turn of the century able to comment? Was it really like this back then?

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#2880016 7-Mar-2022 07:23

quickymart:
https://www.stuff.co.nz/life-style/homed/real-estate/127773204/how-much-harder-is-it-to-buy-a-house-in-2022-than-in-2002

Interesting comparison between then (2002) and now (2022). Anyone who bought a property at the turn of the century able to comment? Was it really like this back then?

I’m not quite sure what you mean by “like this”?

We bought our first house in 2004. We paid $255k for a 3 bed, 89m2 dump on 454m2 in Blockhouse Bay. A family friend was the community constable at that stage and was happy as the gang pad on the road had gone by then.

We had a combined household income of around $80k with no dependents. I think we were paying around 7% interest and repayments $1500 a month.

The numbers are different but not much else has changed about the process. There were more listings by negotiation at that stage because the market was a bit slow but a year or two prior it seemed that everything was by negotiation.

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#2880065 7-Mar-2022 07:30

I should really add that not much has changed about the process then compared to when we bought our current house in 2017. I don’t really know about the CCCA nonsense. If it’s as stupid as the way the AML stuff is administered then it’ll be daft.

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quickymart

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#2880089 7-Mar-2022 08:37

Handle9:

I’m not quite sure what you mean by “like this”?

Lower prices (far lower) and I didn't realise interest rates were around 7% then (according to that article):

Interest rates were much higher. Economist Tony Alexander says that in early 2002 the one-year fixed rate ranged from 6.5 to 7.5 per cent, while the five-year fixed rate was between 7.5 and 8.5 per cent.

A 7% interest rate now with current prices would be quite difficult to manage for a number of people.

This part puzzles me though - she bought the place for $350,000 but said: "“My mortgage repayments were quite high though. They were $600 a week, and my mortgage rate was about 8 per cent.”

$1200 a fortnight on a mortgage? Were they maybe only over 20 years at that point? When did the 30 year thing come in?

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#2880096 7-Mar-2022 09:14

quickymart:

$1200 a fortnight on a mortgage? Were they maybe only over 20 years at that point? When did the 30 year thing come in?

Watch for this to become 35 years to maintain the veneer (read: charade) of affordability.

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#2880606 7-Mar-2022 18:58

quickymart:

Handle9:

I’m not quite sure what you mean by “like this”?

Lower prices (far lower) and I didn't realise interest rates were around 7% then (according to that article):

Interest rates were much higher. Economist Tony Alexander says that in early 2002 the one-year fixed rate ranged from 6.5 to 7.5 per cent, while the five-year fixed rate was between 7.5 and 8.5 per cent.

A 7% interest rate now with current prices would be quite difficult to manage for a number of people.

This part puzzles me though - she bought the place for $350,000 but said: "“My mortgage repayments were quite high though. They were $600 a week, and my mortgage rate was about 8 per cent.”

$1200 a fortnight on a mortgage? Were they maybe only over 20 years at that point? When did the 30 year thing come in?

350k @ 8.5% for 25 years with a 10% deposit (which was normal back then) would be around $1170 a fortnight.

Interest rates go up and down. Current rates are still very low. I've paid between 2% and 11% since 2004.

The reserve bank is forecasting the OCR to go to 3.25% by 2024 which would give retail rates of around 6% if the ~2.5% margin between the OCR and retail rates is maintained. That's not high by historic standards but will be world of pain for those with mega mortgages.

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#2880618 7-Mar-2022 19:30

Cashflow isn't the be all and end all of property ownership.

If interest rates increase, capital gains dry up and market rents remain unchanged then it won't be financially viable to own residential property regardless of how good your cashflow is. There could be some interesting times ahead.

quickymart

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#2881433 9-Mar-2022 07:32

https://www.stuff.co.nz/life-style/homed/real-estate/127987960/housing-market-correction-under-way-but-masked-by-last-years-price-increases

Let's see what happens.

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#2881434 9-Mar-2022 07:40

My mate is selling in ChCh. Wants top price although the agent a one percenter, said thats ok. First open home 4 went through. Second, didn't list the price, 1 went through. Last Sunday, dropped price 10k, no one went through

More new builds, more listings, higher interest, prospect that the higher interest you can just manage today will be more next renewal, and harder to get a mortgage

So, if prices are easing, thats a good thing, but fewer buyers can buy anyway

quickymart

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#2885861 14-Mar-2022 10:39

https://www.nzherald.co.nz/business/house-sale-volumes-prices-slide-real-estate-institute-predicts-further-easing/IQFOK6OOOS6K3CQVEXQOOJI5TI/

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#2888036 18-Mar-2022 10:17

My mortgage is up for renewal - what are everyone's current thoughts? My (crappy) understanding of the economy is that we're expected to be in for a long period of high interest rates, so I'm thinking I should fix it for as long as possible?

Current rates from my bank include 4.55% for 2 years, and 5.09% for 5 years.

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#2888046 18-Mar-2022 10:29

I would do 2 years.

Although 2 years is a long time and anything can change during this period.

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