Real estate, post level 4

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Mad Scientist
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#2753896 2-Aug-2021 17:45

heavenlywild:
mattwnz: So they are building the house for you without any other payments apart from the 50k deposit? I haven't seen any developers offering that deal in my area. They need the buyer to enter into a building contract which also means progress payments as the house is built.

Yes, that's right. 50k and nothing more until settlement. Hence I put in another for a new build. Had to be quick as people are snapping up new listings in the new subdivision within days of listing.

Your builder is either a billionaire, a charity, or not a real builder!

Handle9

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#2753903 2-Aug-2021 18:04

tdgeek:

Handle9:

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

The article here showed that housing stocks had matched population growth from 1991 to 2021

One presentation of data showed that, the majority of data does not, which is what the article said. You are seeing what you want to see.

heavenlywild

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#2753954 2-Aug-2021 18:07

@batman

All builders do this in this particular area. They don't need to purchase the land before they build. When settlement comes the payment of the land and house happens at the same time, if that makes sense.

The term I hear is "builders terms". Hence they don't need to be billionaires :)

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mattwnz

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#2753965 2-Aug-2021 18:25

heavenlywild: @batman

All builders do this in this particular area. They don't need to purchase the land before they build. When settlement comes the payment of the land and house happens at the same time, if that makes sense.

The term I hear is "builders terms". Hence they don't need to be billionaires :)

In my area developers tend to advertise land for sale, then often very quickly much of the land has 'under offer' stickers all over the land, and many of these have shown to be builders buying up the land for spec builds. I am not sure if they need to pay for the land until the title comes through. But often the builder will build the house, and then once complete, sell it. Also they will sell off some of the land for huge capital gains (in some cases close to 100% profit in just over a year) . They possibly sell of the land for cashflow for the building work they are doing. So I am guessing the way they are doing it, they stand to make far more money.

There are also developments where they advertise the land for sale, eg $350,000, but then they require you build with a particular building franchise although there is at least a years wait for them to start. Plus the wait for the titles to come through. I know of one development where people who have purchased and have been waiting for over a year for the title. Some of them have sold out of it a a result. Not sure if they or the developer has pocketed the capital gain when it got resold without a title.

Batman

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#2754016 2-Aug-2021 18:39

heavenlywild: @batman

All builders do this in this particular area. They don't need to purchase the land before they build. When settlement comes the payment of the land and house happens at the same time, if that makes sense.

The term I hear is "builders terms". Hence they don't need to be billionaires :)

that's very interesting - because you would think they need to pay for the land, the contractors and the raw material.

where is this place where the land, contractors and raw material don't need to be paid for a few months?

mattwnz

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#2754018 2-Aug-2021 18:46

Handle9:

One presentation of data showed that, the majority of data does not, which is what the article said. You are seeing what you want to see.

I also wonder if the data includes all the temporary workers that live in NZ, who also need a house to live in.

heavenlywild

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#2754025 2-Aug-2021 19:55

Batman:
heavenlywild: @batman

All builders do this in this particular area. They don't need to purchase the land before they build. When settlement comes the payment of the land and house happens at the same time, if that makes sense.

The term I hear is "builders terms". Hence they don't need to be billionaires :)

that's very interesting - because you would think they need to pay for the land, the contractors and the raw material.

where is this place where the land, contractors and raw material don't need to be paid for a few months?

It's a very tightly managed subdivision by Fulton Hogan. Builders are making so much money that a loan for the materials will only be 20k extra.

When they are making up to 400k in a 1.3m build, 20k is nothing to them.

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cshwone

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#2754043 2-Aug-2021 20:43

heavenlywild: heavenlywild: All builders do this in this particular area. It's a very tightly managed subdivision by Fulton Hogan. Builders are making so much money that a loan for the materials will only be 20k extra.

When they are making up to 400k in a 1.3m build, 20k is nothing to them.

In which case 50 k is probably nothing to them either! I hope you took legal advice before proceeding.

If it sounds too good to be true it probably is far too good to be true.

I hope you will not lose your 50k x 2 but equally I suspect you won't be able to sell it on or, when it comes to settlement that the price will be what you think it's going to be.

heavenlywild

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#2754072 2-Aug-2021 20:55

cshwone:
heavenlywild: heavenlywild: All builders do this in this particular area. It's a very tightly managed subdivision by Fulton Hogan. Builders are making so much money that a loan for the materials will only be 20k extra.

When they are making up to 400k in a 1.3m build, 20k is nothing to them.

In which case 50 k is probably nothing to them either! I hope you took legal advice before proceeding.

If it sounds too good to be true it probably is far too good to be true.

I hope you will not lose your 50k x 2 but equally I suspect you won't be able to sell it on or, when it comes to settlement that the price will be what you think it's going to be.

Trust me, I've done it once already. 260k gain in the bank.

It is more than normal, nothing odd about this arrangement in an area that will contain 8000 homes in the next few years.

Plus, Master Build Warranty. Fulton Hogan managing the builders closely so no cowboys here.

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heavenlywild

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#2754074 2-Aug-2021 20:56

This is the crazy thing right, 50k deposit, then the rest on settlement.

It sounds insanely good and everyone buying there is profiting.

Update: I never knew this until 5 years ago... those big brand building companies you hear of, Signature Homes, Universal Homes etc, are actually less cashed up as those smaller builders because they have too many hands in the pie.

The smaller builders don't spend all that money on the branding... they use the money to build and keep building with only two people in the pie - the building company and the company that is outsourced to build. That's it.

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tdgeek

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#2754193 3-Aug-2021 07:41

Handle9:

One presentation of data showed that, the majority of data does not, which is what the article said. You are seeing what you want to see.

Wrong as usual. If the data I read was factually incorrect, state that.

quickymart

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#2754605 3-Aug-2021 17:38

https://thespinoff.co.nz/politics/03-08-2021/here-are-all-the-levers-the-government-isnt-pulling-to-fix-our-housing-catastrophe/

heavenlywild

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#2754608 3-Aug-2021 17:49

Every week brings new prices.

The real estate agent often emails new off the plan sale prices.

The one I bought off the plan 2 weeks ago is now, albeit on a different lot but in the same subdivision, now asking for 1.45 to 1.5.

So without lifting a finger I've gained 60k to 110k in about 2 weeks.

Truly insane. I can't believe it. But do believe it because this is round 2 for me.

I think this is the final 6 months of fast growth before flat-lining at worst.

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Batman

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#2754618 3-Aug-2021 18:25

heavenlywild: Every week brings new prices.

The real estate agent often emails new off the plan sale prices.

The one I bought off the plan 2 weeks ago is now, albeit on a different lot but in the same subdivision, now asking for 1.45 to 1.5.

So without lifting a finger I've gained 60k to 110k in about 2 weeks.

Truly insane. I can't believe it. But do believe it because this is round 2 for me.

I think this is the final 6 months of fast growth before flat-lining at worst.

which city is this in?

heavenlywild

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#2754628 3-Aug-2021 18:46

@batman In Auckland.

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