Real estate, post level 4

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#2752901 31-Jul-2021 15:39

It's too easy to grab some easy capital gains.

The off the plan house I put down a deposit on ended up selling for 260k profit.

I've put down another deposit on a new build off the plan. It's gone up by 50k in 3 weeks on paper. When it's done I'm estimating another 150-200k gain.

New builds are going to be even more popular with the introduction of new interest tax deductions.

mattwnz

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#2752999 31-Jul-2021 17:32

tdgeek:]
Bollocks back. I guess mudguards numbers are incorrect? Aside from the blip caused by Covid they stack up. When interest rates eventually rise the house prices will ease, simple math

What does ease mean? Drop in price? Flatline for years? The government don't want house prices to drop. I was listening to one NZ financial commentary say that they expect house prices to rise 50 to 60 percent over the covid period. We are probably already over 40 percent. Also rents are expected to rise a lot more. It is interesting to see how the percentage of rentals in NZ had increased significantly since the 90s. Investors buying for capital gains and passive income. It shows that many younger people are likely going to be locked out of buying a house, and are gong to be paying investors mortgages. Kiwibuild was supposed to be the answer with low priced houses, but was quickly a failure and would have created a two tier market. NZ is likely going to experience another brain drain.

mattwnz

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#2753000 31-Jul-2021 17:34

heavenlywild: It's too easy to grab some easy capital gains.

The off the plan house I put down a deposit on ended up selling for 260k profit.

I've put down another deposit on a new build off the plan. It's gone up by 50k in 3 weeks on paper. When it's done I'm estimating another 150-200k gain.

New builds are going to be even more popular with the introduction of new interest tax deductions.

But is there tax to pay? Eg a pattern of buying and selling houses in a short period of time on new builds.

I have seen a number of builders build a house. Move into it for a few months, then sell and then build another etc.

tdgeek

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#2753018 31-Jul-2021 18:15

quickymart:

https://www.stuff.co.nz/life-style/homed/real-estate/125927856/is-there-really-a-housing-supply-shortage

Yes. Yes there is.

Maybe

“So, there does seem to be less property for owner-occupiers to buy, even though total supply has kept pace with population growth.”

Right now there are less properties for sale. Maybe Covid is the issue there, more uncertainty, so lets delay the upgrade or down grade for a while. Often there is talk about we are short of X houses, but that article says thats not the case. Part of it is investors who are now easing out. Part of it is Covid uncertainty, so the many that want to sell right now may be waiting, so the sellers are not there as much, perhaps.

tdgeek

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#2753021 31-Jul-2021 18:26

mattwnz:
tdgeek:]

Bollocks back. I guess mudguards numbers are incorrect? Aside from the blip caused by Covid they stack up. When interest rates eventually rise the house prices will ease, simple math

What does ease mean? Drop in price? Flatline for years? The government don't want house prices to drop. I was listening to one NZ financial commentary say that they expect house prices to rise 50 to 60 percent over the covid period. We are probably already over 40 percent. Also rents are expected to rise a lot more. It is interesting to see how the percentage of rentals in NZ had increased significantly since the 90s. Investors buying for capital gains and passive income. It shows that many younger people are likely going to be locked out of buying a house, and are gong to be paying investors mortgages. Kiwibuild was supposed to be the answer with low priced houses, but was quickly a failure and would have created a two tier market. NZ is likely going to experience another brain drain.

Ease means slow down. Price rises slow

No one wants to sell right now, probably Covid uncertainty. So lees sellers mean are buyers, means higher prices. The issue of we need X number of houses as we are short has been debunked.So, we are not short of houses, there are more buyers than sellers.

tdgeek

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#2753022 31-Jul-2021 18:28

mattwnz:

I have seen a number of builders build a house. Move into it for a few months, then sell and then build another etc.

They will pay capital gain as they show that they are trading not living, if the Govt twigged to that

heavenlywild

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#2753027 31-Jul-2021 18:54

tdgeek:
mattwnz:

I have seen a number of builders build a house. Move into it for a few months, then sell and then build another etc.

They will pay capital gain as they show that they are trading not living, if the Govt twigged to that

Yes I'll pay tax but the reality is I'm more than happy to keep paying when I can make 260k a year, let's say, by literally filling in some paperwork and paying some solicitor fees

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#2753032 31-Jul-2021 19:05

heavenlywild:

Yes I'll pay tax but the reality is I'm more than happy to keep paying when I can make 260k a year, let's say, by literally filling in some paperwork and paying some solicitor fees

i have a friend who's been doing this for the last 15 years!

not sure how much they make. but basically buy land build a house, sell.

tdgeek

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#2753033 31-Jul-2021 19:05

heavenlywild:

Yes I'll pay tax but the reality is I'm more than happy to keep paying when I can make 260k a year, let's say, by literally filling in some paperwork and paying some solicitor fees

If the location you are in means that you can sign up and build then sell a a large profit, go for it.

tdgeek

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#2753035 31-Jul-2021 19:12

Batman:

i have a friend who's been doing this for the last 15 years!

not sure how much they make. but basically buy land build a house, sell.

People can be fickle. Build a house with land for 500k, on the market for 585k, most people think the 585k is fair, as its the price. Just like the price of baked beans, its the price.

heavenlywild

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#2753040 31-Jul-2021 19:25

tdgeek:

Batman:

i have a friend who's been doing this for the last 15 years!

not sure how much they make. but basically buy land build a house, sell.

People can be fickle. Build a house with land for 500k, on the market for 585k, most people think the 585k is fair, as its the price. Just like the price of baked beans, its the price.

Actually it's even easier than that. A 50k deposit secures the land and the build. Pay nothing more until settlement. No headaches at all, just sit back and watch it grow in value.

It sounds awfully too easy but the truth is the government, the market, NZ's love of houses, and COVID, has caused this profit taking to be the norm, and is sped up 5x.

mattwnz

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#2753068 31-Jul-2021 22:21

tdgeek:
Batman:

i have a friend who's been doing this for the last 15 years!

not sure how much they make. but basically buy land build a house, sell.

People can be fickle. Build a house with land for 500k, on the market for 585k, most people think the 585k is fair, as its the price. Just like the price of baked beans, its the price.

You did read the Common report on the supermarket duopoly? People buy baked beans when they are on special. 60%of supermarket products go on special in NZ which is significantly more than markets like the UK which have competition, as their normal prices are a lot less with competition. NZers don't seen to mind Overpaying for houses because they think that even if they overpay, it will eventually be worth that amount.

tdgeek

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#2753137 1-Aug-2021 07:55

mattwnz:

You did read the Common report on the supermarket duopoly? People buy baked beans when they are on special. 60%of supermarket products go on special in NZ which is significantly more than markets like the UK which have competition, as their normal prices are a lot less with competition. NZers don't seen to mind Overpaying for houses because they think that even if they overpay, it will eventually be worth that amount.

Yep, probably. But why people buy a house is to live in. They like it, if they overpay they like it. But until the that want to sell, get on the market instead of holding off, little will change. We dont have a housing stock shortage we have a seller shortage, which is probably due to the uncertainty with Covid. If buyers want to overpay, then so be it. Thats the free market at work. Unfortunately the issues with Delta will probably extend the lack of stability for a good while longer. Alpha Covid is being handled fine, vaccines are rolling out, countries look towards opening. Delta may push that back, so the instability for employers and employees will probably still see sellers holding off.

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#2753178 1-Aug-2021 12:55

tdgeek: The issue of we need X number of houses as we are short has been debunked.So, we are not short of houses, there are more buyers than sellers.

No it hasn't been debunked. The preponderance of evidence does not show that.

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#2753182 1-Aug-2021 13:01

"Kate Lunn and her dog Anakin in front of their four-bedroom house in Adelaide which costs her less in mortgage repayments than renting a bedroom in Mt Eden did."

https://www.stuff.co.nz/business/125797043/choosing-australia-over-new-zealand-as-the-pandemic-hit

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