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

Forums › Home Workshop DIY › Real estate, post COVID-19 level 4 (since 2020)

1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | ... | 174

13684 posts

Uber Geek
+1 received by user: 10018

#2457479 8-Apr-2020 15:10

Handsomedan:

blackjack17:

Although in America if you take out $100,000 mortgage and your house value falls below this you can walk away and leave the house with the bank and not owe anything.

Under my understanding their mortgages are non-recourse debts.

https://en.wikipedia.org/wiki/Nonrecourse_debt

Isn't that just the "sub-prime mortgage" market?

No.

https://en.wikipedia.org/wiki/Subprime_lending

Handsomedan

7769 posts

Uber Geek
+1 received by user: 7402

ID Verified

Trusted

Subscriber

#2457482 8-Apr-2020 15:14

Fred99:

Handsomedan:

Isn't that just the "sub-prime mortgage" market?

No.

https://en.wikipedia.org/wiki/Subprime_lending

Thank you!

Handsome Dan Has Spoken.
Handsome Dan needs to stop adding three dots to every sentence...

Handsome Dan does not currently have a side hustle as the mascot for Yale

*Gladly accepting donations...

blackjack17

1713 posts

Uber Geek
+1 received by user: 865

#2457503 8-Apr-2020 15:35

It is known as an underwater mortgage

https://www.investopedia.com/articles/mortgages-real-estate/10/walk-away-mortgage-foreclosure.asp

https://www.huffpost.com/entry/mortgage-walk-away-what-happens-_b_993756

Electric kiwi signup credit Sharesies credit

kingdragonfly

11984 posts

Uber Geek
+1 received by user: 12867

Subscriber

#2457609 8-Apr-2020 17:17

blackjack17:
Under my understanding their mortgages are non-recourse debts.

https://en.wikipedia.org/wiki/Nonrecourse_debt

You are correct. Though I don't have any statistics, my feeling is often the US bank comes out ahead in a foreclosure.

Even if the prior home owner does technically come out ahead, no one likes the sheriff / bailiffs showing up, and getting thrown out of your home.

It's particularity nasty for family farmers, (getting to be a rare breed in the states.) Family farms usually been with a family for generations.

kingdragonfly

11984 posts

Uber Geek
+1 received by user: 12867

Subscriber

#2457922 9-Apr-2020 09:09

As mentioned, I think a number of Auckland apartments will be sold because they are no longer viable as AirBNB stays.

When you book on AirBNB, there are several filters. I chose

"Entire Place, have the whole place to yourself"

chose apartment.

AirBNB limits searches to 300 places, so I had to piece together this figure

Auckland area: 348

Not as many as I thought.

I saw what would happened if I booked 6 months from now, and the number reduced to 234. I thought this was interesting: I would have thought the number would increase, due to long term rentals.

I wonder what the number was before the lockdown.

Unrelated, but it's not unusual for hotel to sell their rooms as apartments, if they are struggling. I would expect a good number of hotel rooms to be converted into apartments six months from now. Just a hunch.

Boeingflyer

643 posts

Ultimate Geek
+1 received by user: 127

Trusted

#2458602 9-Apr-2020 18:17

If you have to mortgage your home, the bank has to take GST into account as well, so you will lose another 15%.

AliExpress

Shop now on AliExpress (affiliate link).

quickymart

14940 posts

Uber Geek
+1 received by user: 13952

ID Verified

#2460693 13-Apr-2020 17:39

https://www.stuff.co.nz/life-style/homed/residential/120987250/coronavirus-property-prices-likely-to-fall-but-by-how-much-is-the-big-unknown-experts-say

While an 8% drop would be welcome, I hasten to point out that back in 2008 (before the GFC), properties didn't cost nearly as much as they do now. Still, I wouldn't complain about a $500000 property priced at closer to $450000.

kingdragonfly

11984 posts

Uber Geek
+1 received by user: 12867

Subscriber

#2461223 14-Apr-2020 16:42

I'm trying to sell my home as soon as it's feasible.

I was planning on moving out, having a good clean, photographs done, and then put the house on market.

The first part, moving out, looks to be difficult. It may be I can't use a mover until we hit level 2.

I got this information from Summit Real Estate & Property Management, which may or may not be correct.

We're at level 4, and you all know the restriction on that. So here's there information on Level 3

"During alert level 3

Similarly, moves at level 3 can only occur in very exceptional circumstances. All parties must take extreme care.

Some guidance on specific scenarios as follows:

If parties need to sign a tenancy agreement, this should be done digitally.
If keys need to be transferred, then extreme care must be taken. Property managers are not classified as an essential service so they cannot go into offices to pick up keys during alert level 4. Transfer could therefore only occur if there are keys available to them at their homes.
And if tenants are moving then they would need to do so in a private vehicle with only members of their own household. They can’t hire a moving service during level 3."

More information here

https://www.tenancy.govt.nz/about-tenancy-services/news/advice-on-tenants-moving-properties-during-covid-19-lockdown/

wellygary

8810 posts

Uber Geek
+1 received by user: 5287

#2461239 14-Apr-2020 17:07

kingdragonfly: . They can’t hire a moving service during level 3."

Wait until later this week when the government provide a lot more guidance on what can and can;t be done at Level 3,

The rules being quoted were based on NZ being in Level 3 for 48 Hours, in a very fast transition to Level 4,

What happens in Level 3 on the way down, may be different than level 3 on the way up....

quickymart

14940 posts

Uber Geek
+1 received by user: 13952

ID Verified

#2475894 3-May-2020 16:24

https://www.oneroof.co.nz/news/37858

This is possibly good for a potential first home buyer (like me), but the downside is the repayments on the mortgage would be much higher than say if I had a 20% deposit, as I understand. So yes, I could get into a place but then the mortgage payments would be unreasonably steep.

Listings have dropped off in recent weeks, but not really surprising as it's not like an agent can show you through the property or even do an inspection themselves to take photos, etc.

I've seen ads for www.youown.co.nz - anyone know much about them/used their services? Basically they have a part ownership of the property, you supply a minimal amount (eg, 5%) and they supply the rest to take it up to 20%. The idea is eventually you buy them out of their portion and the property becomes yours (I believe that's how it works).

MileHighKiwi

782 posts

Ultimate Geek
+1 received by user: 581

ID Verified

Lifetime subscriber

#2475907 3-May-2020 16:58

The main banks and some economists have predicted drops between 5-10% but it could be much more. NAB, BNZ's parent bank, are predicting at least a 10% fall in Aussie and 30% worst case (20.9% this year & another 11.8% in 2021).

NZ could be in for a big fall, but the effects will be different throughout the country.

Interest.co.nz published a BNZ economic forecast today and they are predicting an oversupply of new homes. Basically net migration will drop to almost zero for a couple of years. We have gone from not building enough to having too many. They also think GDP will not get back to pre-Covid levels until mid 2023.

I would not be buying any time soon because we are probably 12-18 months away from the bottom of the curve.

For first home buyers, hunker down, save more and wait for the opportunities that will eventually arise. I was in the similar position in 2007/8 when we wanted to buy our first home. We waited and ended up buying a place in a mortgagee auction in 2009 for $80K less than the previous owners paid in late 2007.

If anyone is interested in the BNZ slide-pack, its here.

Mighty Ape

Shop now at Mighty Ape (affiliate link).

Technofreak

6656 posts

Uber Geek
+1 received by user: 3474

Trusted

#2475935 3-May-2020 17:49

wellygary:

kingdragonfly: . They can’t hire a moving service during level 3."

Wait until later this week when the government provide a lot more guidance on what can and can;t be done at Level 3,

The rules being quoted were based on NZ being in Level 3 for 48 Hours, in a very fast transition to Level 4,

What happens in Level 3 on the way down, may be different than level 3 on the way up....

It is different. More like level 3.9. compared to what level 3 was on the way to level 4.

Sony Xperia XA2 running Sailfish OS. https://sailfishos.org The true independent open source mobile OS
Samsung Galaxy Tab S6
Dell Inspiron 14z i5

quickymart

14940 posts

Uber Geek
+1 received by user: 13952

ID Verified

#2475941 3-May-2020 18:07

MileHighKiwi:

The main banks and some economists have predicted drops between 5-10% but it could be much more. NAB, BNZ's parent bank, are predicting at least a 10% fall in Aussie and 30% worst case (20.9% this year & another 11.8% in 2021).

NZ could be in for a big fall, but the effects will be different throughout the country.

Interest.co.nz published a BNZ economic forecast today and they are predicting an oversupply of new homes. Basically net migration will drop to almost zero for a couple of years. We have gone from not building enough to having too many. They also think GDP will not get back to pre-Covid levels until mid 2023.

I would not be buying any time soon because we are probably 12-18 months away from the bottom of the curve.

For first home buyers, hunker down, save more and wait for the opportunities that will eventually arise. I was in the similar position in 2007/8 when we wanted to buy our first home. We waited and ended up buying a place in a mortgagee auction in 2009 for $80K less than the previous owners paid in late 2007.

If anyone is interested in the BNZ slide-pack, its here.

https://www.oneroof.co.nz/news/why-kiwis-shouldnt-expect-a-house-price-crash-37856

https://www.stuff.co.nz/life-style/homed/residential/121364137/coronavirus-could-help-more-people-into-their-first-home-agent-says

https://thespinoff.co.nz/business/30-04-2020/the-winners-and-losers-of-nzs-post-lockdown-economy-and-how-the-losers-might-win-too/

I guess it all depends who you ask. Here we have perpetual commentator Ashley Church, who seems to think high house prices for eternity will be good for all (presumably he probably owns 10 investment properties and wants prices to stay high as long as humanly possible); on the other hand, we have some more realistic commentary from an agent's point of view; then The Spinoff looks at it all (under the Real Estate section).

alasta

6888 posts

Uber Geek
+1 received by user: 3362

Trusted

Subscriber

#2475946 3-May-2020 18:31

MileHighKiwi:

NZ could be in for a big fall, but the effects will be different throughout the country.

I think this is an important point that a lot of people are forgetting. The market in Queenstown, for example, could be decimated whereas there may be little change in Wellington where there are a lot of stable public service jobs.

dafman

4053 posts

Uber Geek
+1 received by user: 2651

Trusted

#2476165 4-May-2020 10:23

Just like the sharemarket, the massive rise in house values over recent years has been based on investor sentiment, not any rational underlying increase in economic value.

And sentiment-based investment decisions are subject to significant price swings when faced with a shock.

With a global recession (possibly depression) looming, I don't think it's realistic to expect house prices to hold up at anything like pre-Covid prices. The question is how much will they fall and how long will it be before there is any price recovery?

And for both those questions, it's just too early to call.

1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | ... | 174