In my street, there are 19 houses on the even numbered side of the street and ten houses on the odd numbered side of the street.

Since I moved here in Nov 2009, 15 houses on the even side and five on the odd side have sold. So that's 20 out of 28 (excluding my house which would otherwise make 29 houses) houses sold.

One or two have sold more than once. The real estate people must be very happy.

DarthKermit:

 

I realise that. RV is just the current value the council works off. Any house is only worth as much as someone's prepared to pay for it.

 

I keep an eye on my street house sales out of interest's sake. This 460 grand house is in immaculate condition and has a few other features that I can see would have appealed to the buyer.

 

Just four houses away from this house, another sold for an even $400,000 in March 2019. This was only 10 grand above the RV and it was a four bedroom house. Go figure. :)

 

Yeah, so many variables. Such as the wife who loves the kitchen and bathroom = sold.

It appears house prices are continuing to head upwards again, and even Auckland prices seem to be heading up again. I am guessing many people want this to continue because even at 5% growth per year on an average house, say worth $750k , is like earning an extra 40k per year tax free, if it is your own home that you live in. So  it makes people feel wealthier. But makes entering the housing market more and more difficult. BUt I do wonder how it is sustainable long term, as the way  house prices have been able to rise this much and still be 'affordable',  is due to internet rates continuing to drop lower and lower. Whether they will keep doing that to try and sustain the status quo, as it seems they want houses prices  to continue to rise. Even though in terms of the wage to house price ratio, NZ prices are some of the most expensive.

DaveB:

 

I get the same question from my daughter and her partner, and I do feel for them.

 

The only advice I can give them is to give up the brand new iPhone or Galaxy every year, stop eating takeaways or going out for a meal every other night, stop buying branded clothing, stop buying convenience lunches, stop spending money on so many PlayStation or Xbox games. That's the things they can change immediately to save a lot of money in one year. I expect at least $8,000 each year, possibly more.

 

Next they could budget their shopping bill, possibly saving $1 - 200 a month. After all, they don't need that cat and dog that they have. Let's not consider the vet bills or food bills for those animals. They don't drink much nor smoke, so that's good. Neither does my daughter and her partner!

 

Oh yeah. Get rid of Netflix, Sky, Amazon and all the other crud companies chasing our dollars. They don't need Spotify, unlimited Spark Data or some such other techie must have. Nor do they need to continually upload some boring narrative pictorial about what they are eating each day to facebook or some such other stupid social media for those of us who do not give a rats arse. They might just find it a little cheaper and substantially more fun to enjoy each others company 24/7.

 

Don't get me wrong. I know it is tough, but I have them and my young son covered with a couple of rental properties that I was fortunate to acquire outside of the main centers. It wont make them rich, but it may give them a start a little later. They do not know about these, because if they did, I am concerned that they may just have an expectation that things will fall their way. 

 

We are in the 2000's. It is indeed harder than ever to get ahead. The only way to do it is really consider what is REALLY important each month with your limited disposable $$$'s, sacrifice a LOT for 4 to 5 years then lay down your nest. 

 

LeatheryHawkeye:

 

We have been doing this for 4 years. Sacrificed schooling, trying to cycle to work, eating leftovers, cancelling sky, living in a 2 bed as a family. etc, etc. Saving for a deposit. An example of the hopelessness. The House price we are renting has increased 53%.
So if we had been saving 10% we would need $89k 4 years ago. Today with the house prices and new LVR of 20% we need $273k.
Sacrificing to the point of mental health deterioration has netted around an additional $24k. Only we actually need another 184k.
What now?

 

I think it's at this point that you simply decide to rent, enjoy life and move onto a different perspective of what YOUR normal is. 

There seem to be a lot of baby boomers buying rental type properties at the moment. Partly due to low interest rates, and people moving their money out of banks, so they can get income during their retirement off their money. So good luck to FHBs having to compete with these new landlords

tdgeek:

 

 

 

That right, but if you look back, interest rates pre and post GFC did not change a lot. I checked that last week. 9% sounds too much based on what I read, it covered the major banks. 

 

Prices wont change a lot in a GFC, as NZ as last time are very insulated, our banks are not exposed as other countries are. Plus Kiwi's will say, hey my house is wirth 800k, I'm not selling less than that and so on. I don't see a GFC forcing a big sell out by the masses. 

 

If repayments on a house goes from 3k-ish to almost 7k (3% to 9% interest rate), do you think that will impact peoples ability to service their mortgage?

Handsomedan:

 

LeatheryHawkeye:

 

We have been doing this for 4 years. Sacrificed schooling, trying to cycle to work, eating leftovers, cancelling sky, living in a 2 bed as a family. etc, etc. Saving for a deposit. An example of the hopelessness. The House price we are renting has increased 53%.
So if we had been saving 10% we would need $89k 4 years ago. Today with the house prices and new LVR of 20% we need $273k.
Sacrificing to the point of mental health deterioration has netted around an additional $24k. Only we actually need another 184k.
What now?

 

 

I think it's at this point that you simply decide to rent, enjoy life and move onto a different perspective of what YOUR normal is. 

 

Well probably is the new reality. Sad really. But my point being, sacrificing doesn't outperform the market.

Handsomedan:

 

LeatheryHawkeye:

 

We have been doing this for 4 years. Sacrificed schooling, trying to cycle to work, eating leftovers, cancelling sky, living in a 2 bed as a family. etc, etc. Saving for a deposit. An example of the hopelessness. The House price we are renting has increased 53%.
So if we had been saving 10% we would need $89k 4 years ago. Today with the house prices and new LVR of 20% we need $273k.
Sacrificing to the point of mental health deterioration has netted around an additional $24k. Only we actually need another 184k.
What now?

 

 

I think it's at this point that you simply decide to rent, enjoy life and move onto a different perspective of what YOUR normal is. 

 

oh and the new new zealand normal is destitute retirees because they didn't buy before 2011.
What a country

LeatheryHawkeye:

 

 

 

Well probably is the new reality. Sad really. But my point being, sacrificing doesn't outperform the market.

 

there's something really wrong with the new zealand house prices.

this lady built this "house" with a "very expensive heating system" for $35000 Euro

I thought this was supposed to be a pseudo-solution...

https://www.bunnings.co.nz/trade/trade-services/clever-living-co

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12231402

tdgeek:

 

That right, but if you look back, interest rates pre and post GFC did not change a lot. I checked that last week. 9% sounds too much based on what I read, it covered the major banks. 

 

Prices wont change a lot in a GFC, as NZ as last time are very insulated, our banks are not exposed as other countries are. Plus Kiwi's will say, hey my house is wirth 800k, I'm not selling less than that and so on. I don't see a GFC forcing a big sell out by the masses. 

 

Firstly, as far as I am aware our bank are pretty heavily exposed to another GFC. They are still reliant on offshore funding for not inconsiderable chunks of their balance sheets, and if the New York money parkets lock up like they did in 2008 then they will have the same issue.

I wouldn't be so sure prices can't fall:

• Most property investors work on the numbers and not sentiment, and buyers only bid what they can afford. If interest rates shot up then investors who started haemorrhaging cash would take the loss and sell (if they are highly leveraged then their bank may not give them a choice in the matter).
• While owner-occupiers may not *want* to sell at a loss, if they could no longer service the mortgage, then they might not have a choice either. Anecdotally, a fair proportion of buyers are near the limit of the mortgage they can afford, and I suspect that even a 2-3% interest rate rise would have numbers of them in financial distress.
• A rise in rates would mean that potential buyers would not be able to afford to borrow/bid as much, and if banks restricted lending because of another GFC then they may not be as willing to loan money to buyers who can afford to service the loan

So I pretty much guarantee there would be a hit to the market in a if interest rates shot up and/or banks severely cut back on lending.

JimmyH:

 

 

 

Firstly, as far as I am aware our bank are pretty heavily exposed to another GFC. They are still reliant on offshore funding for not inconsiderable chunks of their balance sheets, and if the New York money parkets lock up like they did in 2008 then they will have the same issue.

 

I wouldn't be so sure prices can't fall:

 

• Most property investors work on the numbers and not sentiment, and buyers only bid what they can afford. If interest rates shot up then investors who started haemorrhaging cash would take the loss and sell (if they are highly leveraged then their bank may not give them a choice in the matter).
• While owner-occupiers may not *want* to sell at a loss, if they could no longer service the mortgage, then they might not have a choice either. Anecdotally, a fair proportion of buyers are near the limit of the mortgage they can afford, and I suspect that even a 2-3% interest rate rise would have numbers of them in financial distress.
• A rise in rates would mean that potential buyers would not be able to afford to borrow/bid as much, and if banks restricted lending because of another GFC then they may not be as willing to loan money to buyers who can afford to service the loan

So I pretty much guarantee there would be a hit to the market in a if interest rates shot up and/or banks severely cut back on lending.

 

Im not aware that the banks exposure has changed materially since the GFC. maybe it has. Our exposure then wa smuch less than many countries

Interest rates would decrease to promote activity, already talk of that

Investors dont affect the prices, they bargain hunt to maximise yield and profit

If rates do rise and if unemploymet grew, banks dont want to foreclose, they would give options, Interest only, mortgage holiday, term increase.

House prices wise, hard to say, its so different now to normal market conditions.