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

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#3242399 29-May-2024 21:37

alasta:

I'm no property tycoon. I own one very small townhouse and have a small mortgage, so whether its value goes up or down is academic to me.

i wasn't trying to shade anyone, ones person actions are minor. however when combined with everyone else, it has become a huge problem.

quickymart

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#3245821 7-Jun-2024 21:02

https://thespinoff.co.nz/society/07-06-2024/disaster-houses-becoming-more-affordable-in-auckland

Houses becoming more affordable, in Auckland??? We live in hope 🤞

(Note: satire/sarcasm involved).

quickymart

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#3252019 22-Jun-2024 21:49

https://thespinoff.co.nz/politics/20-06-2024/bishops-house-price-comments-show-the-mood-is-shifting-will-we-see-actual-change

And this one isn't so satirical/sarcastic - Chris Bishop categorically says he would like to see house prices fall, and The Spinoff takes a look at his comments.

(BTW, as a possible/prospective first home buyer, a house priced at 5 times my income - as he mentions in the article - would actually be quite good!)

tweake

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#3252053 23-Jun-2024 10:49

quickymart:

https://thespinoff.co.nz/politics/20-06-2024/bishops-house-price-comments-show-the-mood-is-shifting-will-we-see-actual-change

And this one isn't so satirical/sarcastic - Chris Bishop categorically says he would like to see house prices fall, and The Spinoff takes a look at his comments.

(BTW, as a possible/prospective first home buyer, a house priced at 5 times my income - as he mentions in the article - would actually be quite good!)

for it to come down to 5 times the income, prices will almost need to halve. current house price to income ratio will start to get worse as labor market is rolling back from its boom. ie incomes are going back down or staying flat.

the good thing at the moment is with house prices declining a little bit is it puts people off the quick profiteering, so people are not ignoring the effects so much. as they have no interest in making money they are not concerned about lowering prices.

now would be a very good time to start fixing the housing market. however bishop will have to fight off his own party, all the national supporters and the real estate industry. so i expect it all to be smoke and mirrors and nothing will be done.

quickymart

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#3253121 25-Jun-2024 17:35

tweake:

for it to come down to 5 times the income, prices will almost need to halve.

Sounds good to me.

Oneroof also had an interesting story today about affordability and how it's going to get worse before it gets better:

https://www.oneroof.co.nz/news/works-hard-earns-good-money-still-cant-afford-a-home-is-housing-in-nz-screwed-45749

tweake

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#3253130 25-Jun-2024 18:01

quickymart:

tweake:

for it to come down to 5 times the income, prices will almost need to halve.

Sounds good to me.

Oneroof also had an interesting story today about affordability and how it's going to get worse before it gets better:

https://www.oneroof.co.nz/news/works-hard-earns-good-money-still-cant-afford-a-home-is-housing-in-nz-screwed-45749

pretty decent article which is odd for RE, maybe they are trying to keep a good image.

certainly big chances in society afoot. one they didn't mention is retirement. so many people have 30 year loans and average first home buyer is probably mid to late 30's. by the time you pay it off your about to retire. the problem with kiwisaver is many will have emptied it to buy the house to start with. that costs them huge amounts in the long run. a huge amount of people are going to end up cash poor going into retirement.

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quickymart

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#3253133 25-Jun-2024 18:17

This bit in particular stood out to me:

A couple of years ago, when older Kiwis kept inferring young people did not have it as tough as they’d had it, by saying a 7% mortgage rate did not sound like a lot compared to the 20% rate in 1987, Infometrics set out to investigate.

Analysis found affordability in 2022 was the worst for first-home buyers since 1957. Olsen says while it was true 1987 homeowners paid a much higher interest rate, the difference was they were servicing a much smaller house price.

Today’s homeowners pay substantially more of their average household income over the lifetime of a loan than previous groups because house prices relative to income are “so, so much higher”.

So yes, interest rates are lower now, for sure, but the actual house price (or amount of mortgage that needs to be repaid) is far, far higher.

Like I've said before, in my ideal world, a house would sit in the $300k-$450k range, with interest rates between 4%-7%. Not the $800k range with 7% interest. It's no wonder house prices are continuously described as being too high - unless you have rich parents, who can afford to buy anything these days?

tweake

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#3253142 25-Jun-2024 19:08

quickymart:

This bit in particular stood out to me:

A couple of years ago, when older Kiwis kept inferring young people did not have it as tough as they’d had it, by saying a 7% mortgage rate did not sound like a lot compared to the 20% rate in 1987, Infometrics set out to investigate.

Analysis found affordability in 2022 was the worst for first-home buyers since 1957. Olsen says while it was true 1987 homeowners paid a much higher interest rate, the difference was they were servicing a much smaller house price.

Today’s homeowners pay substantially more of their average household income over the lifetime of a loan than previous groups because house prices relative to income are “so, so much higher”.

So yes, interest rates are lower now, for sure, but the actual house price (or amount of mortgage that needs to be repaid) is far, far higher.

Like I've said before, in my ideal world, a house would sit in the $300k-$450k range, with interest rates between 4%-7%. Not the $800k range with 7% interest. It's no wonder house prices are continuously described as being too high - unless you have rich parents, who can afford to buy anything these days?

to add to that is length of mortgage. not only does that increase the overall cost, but it effects retirement etc. the days of 10-20 year mortgages has gone.

the big thing with the 20% mortgage is the shock value. emotional response which has not been forgotten.

quickymart

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#3256494 5-Jul-2024 08:07

Conversely, now the government wants to "flood" the market with houses. Would be nice to some decent price drops as a result:

https://www.nzherald.co.nz/nz/house-prices-fall-as-government-plans-to-flood-the-market-the-front-page/MK2C424RFJDZFJXIGK4FXYJYZQ/

tweake

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#3256524 5-Jul-2024 09:20

quickymart:

Conversely, now the government wants to "flood" the market with houses. Would be nice to some decent price drops as a result:

https://www.nzherald.co.nz/nz/house-prices-fall-as-government-plans-to-flood-the-market-the-front-page/MK2C424RFJDZFJXIGK4FXYJYZQ/

they say "flood the market with houses" but all it is open up land. its up to people to build the houses, but of course why spend money on a house when sitting in your old one makes you money.

unfortunately they are not fixing all the other issues that go along with it. eg increasing sprawl can increase infrastructure cost, which councils will put on the developer, who will put it on the property cost, whose buyers will push it down the ladder and increase housing prices.

so really i expect stuff all to happen.

mudguard

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#3256532 5-Jul-2024 10:01

tweake:

they say "flood the market with houses" but all it is open up land. its up to people to build the houses, but of course why spend money on a house when sitting in your old one makes you money.

There are different financial requirements to building a house vs buying an existing one. That can put many off. I for one would be useless if I had to be involved in any way with a new build. Someone would present me with thirty kitchen sink options and I'd pick the first one just to be done with it.

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cddt

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#3256540 5-Jul-2024 10:27

quickymart:

Houses becoming more affordable, in Auckland??? We live in hope 🤞

(Note: satire/sarcasm involved).

Well, I bought one last year, so knowing my luck the price will definitely fall over the coming years!

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tweake

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#3256547 5-Jul-2024 10:36

mudguard:

There are different financial requirements to building a house vs buying an existing one. That can put many off. I for one would be useless if I had to be involved in any way with a new build. Someone would present me with thirty kitchen sink options and I'd pick the first one just to be done with it.

thats another interesting quirk of nz homes, most people expect a custom built house or a customized house. eg it may be off the plans but they want their colors, their kitchen sink, their tapware etc. that all adds to the price. but then again nz really doesn't do much in the way of mass production housing.

tweake

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#3256550 5-Jul-2024 10:43

cddt:

Well, I bought one last year, so knowing my luck the price will definitely fall over the coming years!

people get so bent out of shape about their house value falling. as long as the cost/situation fits you, then who cares what the value does. the only time it really matters is when you use that value to buy something else and thats typically another house. plus kiwis have short eyesight, values may go down today but it will go up in 10-20 years time. which is why people sit and wait. note the recent article showing many people pulling their house from the market, they are sitting and waiting for the price to go up to get their profit margin.

alasta

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#3256551 5-Jul-2024 10:44

tweake:

thats another interesting quirk of nz homes, most people expect a custom built house or a customized house. eg it may be off the plans but they want their colors, their kitchen sink, their tapware etc. that all adds to the price. but then again nz really doesn't do much in the way of mass production housing.

I bought my place off the plans and the developer gave us the choice of four colour palettes, but refused any other customisations. That seemed like a good compromise to keep the process efficient while still allowing some personalisation.

Having said that, some of my neighbours have smashed out cabinetry and fittings to replace them with their own preferred alternatives. It's probably not very efficient to have nearly new materials thrown away and replaced like that.

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