Housing prices....

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#1640350 25-Sep-2016 20:32

MikeAqua:

tdgeek:

Pretty much agree. Shares are a lot like houses. They will appreciate over time, so ignore the bear and bull markets. When house prices are flat, i.e. not rising, shares and term deposits are good, as typically interest rates are higher.

Shares collectivity grow (slowly in NZ) over time. A single stock can rapidly collapse and never rebound. Plenty of once great companies have gone to the wall. Plenty of people lost almost everything in 1987 and in the GFC.

Shares are OK if you have the skills to manage a portfolio. Most people don't. I certainly don't and I really have no interest in learning.

So many shares are based on intangible assets that can vanish overnight. Companies with significant market capitalisation that own very little in the way of real assets. BS and jelly beans.

My Kiwisaver is my investment in shares and everything else I don't understand how to trade. I only have that because it gets me contributions from employers and govt.

Shares are a whole different ballgame, worth of a thread. Simplistically, buy shares in a progressive and growing company and you will do well. Quite possibly a large % gain in 6 months. More likely an above market gain over 2,3, 5 years. They grow, you grow.

Fred99

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#1640411 25-Sep-2016 22:37

MikeAqua:

A decrease in property value does not force a sale. It doesn't effect your ability to service the debt.

As long as the debt is serviced, the bank don't care

Those statements are both true.

Problem is that the cause of the decrease in property price is very likely to be something which also affects your income and ability to service the debt - and then the banks will care.

Just because what many independent economists have been saying will happen hasn't yet - doesn't mean it won't.

mattwnz

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#1640431 25-Sep-2016 23:42

tdgeek:

mattwnz:

surfisup1000:

I feel for my kids, their future is bleaker than mine.

I don't see how they will ever afford the 2 million plus it will cost to own a house in Auckland when they get older.

If wages kept up with house price growth we'd have an average salary of 500k a year.

I bought my first house easy. If anything , i think my generation were able to fritter away money and still afford a house, the latest younger generation of house buying age have to live with their parents, shack up with a partner, or get into multi-generational loan type deals.

The important question to me, is when will interest rates rise.

That is one of the byproducts for wanting to grow our population so much and quickly. But I get the impression that government are doing this as a way to make the economy look far better than it actually is.I do fear for the next generation, that we are going to have a shortage of resources for healthcare and education, as well as huge infrastructure costs are going to be needed. There will be housing, but it will be higher density townhouse and apartment living. If people don't want that, they should vote out political parties that are for such policies. Personally I think we are heading down a track where we are changing what make NZ such a special place to live in. We have some really cheap and nasty developments being built. We are also destroying our environment, which is our number 1 resource.

Im not aware of any party gong down that track. If they did, fine, Ill still buy my large house and large section. How great is NZ? Its remote, thats a good thing. We have scenery, so does everyone else, if not better. But being small and remote is what I like. If we grow our population we will always be insignificant, which to me is great.

Every now and then we beat Oz in cricket, every 8 minutes we beat them in rugger, whats not to like?? :-)

Just read some of Bernard Hickeys articles, or some of them over at interest.co.nz which cover this. If you want to live in Auckland (not on the outskirts), you don't have the option to buy a large section and house, that dream is pretty much over for your average kiwi. Unless you are making huge amounts money.

dickytim

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#1640449 26-Sep-2016 06:14

mattwnz:

Just read some of Bernard Hickeys articles, or some of them over at interest.co.nz which cover this. If you want to live in Auckland (not on the outskirts), you don't have the option to buy a large section and house, that dream is pretty much over for your average kiwi. Unless you are making huge amounts money.

Where in the world is it a reality for a first home buyer to buy in a major city?

Yes house prices are too high for the average punter but NZer's need to check their heads and not expect to have a house 5 min from work as their first home, they need to get real and start in Pokeno, or further out and commute.

UHD

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#1640532 26-Sep-2016 11:10

mattwnz: Just read some of Bernard Hickeys articles, or some of them over at interest.co.nz which cover this. If you want to live in Auckland (not on the outskirts), you don't have the option to buy a large section and house, that dream is pretty much over for your average kiwi. Unless you are making huge amounts money.

Surely you see the nonsense in your statement? Expecting a large, affordable family section near the centre of Auckland is just a bit ridiculous and the same is true for almost any large city on Earth.

thinus

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#1640561 26-Sep-2016 11:40

dickytim:

mattwnz:

Just read some of Bernard Hickeys articles, or some of them over at interest.co.nz which cover this. If you want to live in Auckland (not on the outskirts), you don't have the option to buy a large section and house, that dream is pretty much over for your average kiwi. Unless you are making huge amounts money.

Where in the world is it a reality for a first home buyer to buy in a major city?

Yes house prices are too high for the average punter but NZer's need to check their heads and not expect to have a house 5 min from work as their first home, they need to get real and start in Pokeno, or further out and commute.

Houses were a lot more affordable in Auckland 10 years ago. Even 5 or 6 years ago when you could still buy a 3 bedroom house for <500K with a 5% deposit. Those same houses are now 900K+ while inflation was very low.

PhantomNVD

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#1640565 26-Sep-2016 11:47

dickytim:
mattwnz:

Just read some of Bernard Hickeys articles, or some of them over at interest.co.nz which cover this. If you want to live in Auckland (not on the outskirts), you don't have the option to buy a large section and house, that dream is pretty much over for your average kiwi. Unless you are making huge amounts money.

Where in the world is it a reality for a first home buyer to buy in a major city?

Yes house prices are too high for the average punter but NZer's need to check their heads and not expect to have a house 5 min from work as their first home, they need to get real and start in Pokeno, or further out and commute.

But the commute cost (if not using a company car) would make another $120-150 dollars per week be unavailable to service that Morgage either... where living closer with a higher Morgage might give you an extra 2 (or more on bad traffic days) hours of free time... and your Morgage will either shrink faster or enable you to buy bigger and gain more over time.

Petrol and time are both real expenses when commuting an hour in from Pokeno each day!

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dickytim

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#1640573 26-Sep-2016 12:01

That is just a reality for most countries in the world including our own.

BTW the $120 - 150 a week is a little high, unless you are running a big V8 like I did from there.

Take a look at Melbourne, Sydney etc. and see what a first home buyer can afford close to the city.

NzBeagle

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#1640578 26-Sep-2016 12:08

PhantomNVD: But the commute cost (if not using a company car) would make another $120-150 dollars per week be unavailable to service that Morgage either... where living closer with a higher Morgage might give you an extra 2 (or more on bad traffic days) hours of free time... and your Morgage will either shrink faster or enable you to buy bigger and gain more over time.

Petrol and time are both real expenses when commuting an hour in from Pokeno each day!

I 100% agree time and petrol are an expense that people don't consider, add in maintenance and depreciation. Most comparable cities you have viable solutions with public transport, i'm not sure there is an option out of Pokeno yet? I'd be more inclined to look at Pukekohe, while the trains aren't always ideal, this seems much more practical given the way the southern motorway has gone. Still - what is your own time worth to you?

$120 - $150 seems quite high, but I guess based on the vehicles you see on the road - bigger than necessary - then this is not unrealistic.

If living in the city, I'd consider apartment options, but many aren't built for long termers IMO.

dickytim

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#1640580 26-Sep-2016 12:23

Regardless of all of that the fact stands that what the OP proposed would devalue all propertied and create a depression. That is why there is no plan to devalue property on a wholesale level, well except for the have-nots.

Apparently all people who scrimped and saved before the prices went crazy are money hungry slum lords who deserve a market crash to bring them down to earth.

BTW no one has said that directly but the media is certainly portraying it that way.

ScuL

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#1640604 26-Sep-2016 12:46

When I worked in London my transport options were 90 minutes in train+tube or 3 hours in the car.. single trip. We had a semi-detached 2 bedroom a 45 minute train ride from Central London which was pushing the limits of our affordability. However the 45 minutes quickly become 90 when you count driving to the station, parking, walking up to the platforms, then change from train to tube and a walk from the tube station to the office.

I know comparing a 10 million inhabitant metropolis with a growing city of 1.5 million isn't quite right, but competitively many Aucklanders have very reasonable commutes.. and there is also an ample supply of rather large properties very close to the CBD.

Auckland's solutions for the next 30 years should be housing intensification (more apartments and condensed housing) + a properly functioning train network. Buses won't cut it.

Haere taka mua, taka muri; kaua e wha.

mattwnz

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#1640620 26-Sep-2016 13:12

dickytim:
mattwnz:

Just read some of Bernard Hickeys articles, or some of them over at interest.co.nz which cover this. If you want to live in Auckland (not on the outskirts), you don't have the option to buy a large section and house, that dream is pretty much over for your average kiwi. Unless you are making huge amounts money.

Where in the world is it a reality for a first home buyer to buy in a major city?

Yes house prices are too high for the average punter but NZer's need to check their heads and not expect to have a house 5 min from work as their first home, they need to get real and start in Pokeno, or further out and commute.

Define inside a major city. I was talking about suburbs as well, which should be affordable for nzers to buy a home. A first time home buyer is a nzer who wants to buy a home, and hasn't previously owned one. . I suspect many people who don't want houses to fall are property owners.

mattwnz

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#1640623 26-Sep-2016 13:15

dickytim:
Regardless of all of that the fact stands that what the OP proposed would devalue all propertied and create a depression. That is why there is no plan to devalue property on a wholesale level, well except for the have-nots.

Apparently all people who scrimped and saved before the prices went crazy are money hungry slum lords who deserve a market crash to bring them down to earth.

BTW no one has said that directly but the media is certainly portraying it that way.

What information are you Basing that on? Banks have been stress tested for a 40 percent national fall in house values and a big drop in employment levels. So please stick to the facts.

ajobbins

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#1640838 26-Sep-2016 17:37

dickytim:

Take a look at Melbourne, Sydney etc. and see what a first home buyer can afford close to the city.

Been looking at this very scenario recently actually.

Could buy a brand new 4 bedroom house within 40 mins drive (or less) of Melbourne CBD with change from AU$500k.

Example from just one suburb, near a beach even

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tdgeek

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#1640842 26-Sep-2016 17:45

ajobbins:

dickytim:

Take a look at Melbourne, Sydney etc. and see what a first home buyer can afford close to the city.

Been looking at this very scenario recently actually.

Could buy a brand new 4 bedroom house within 40 mins drive (or less) of Melbourne CBD with change from AU$500k.

Example from just one suburb, near a beach even

Land is small. Does the package includes driveway, paving, fences?

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