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10111 posts

Uber Geek


  #2457479 8-Apr-2020 15:10
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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


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  #2457482 8-Apr-2020 15:14
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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 is currently WFH.

 

Handsome Dan is perplexed...and a little stir crazy.

 

Handsome Dan is well and truly over Home Detention...

 

Some people were just born stupid. 


 
 
 
 




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Uber Geek


  #2457609 8-Apr-2020 17:17
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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.



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Uber Geek


  #2457922 9-Apr-2020 09:09
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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.

  • 593 posts

    Ultimate Geek

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      #2458602 9-Apr-2020 18:17
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    If you have to mortgage your home, the bank has to take GST into account as well, so you will lose another 15%.

    5132 posts

    Uber Geek


      #2460693 13-Apr-2020 17:39
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    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.


     
     
     
     




    4308 posts

    Uber Geek


      #2461223 14-Apr-2020 16:42
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    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/

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    Uber Geek


      #2461239 14-Apr-2020 17:07
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    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....


    5132 posts

    Uber Geek


      #2475894 3-May-2020 16:24
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    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).


    657 posts

    Ultimate Geek


      #2475907 3-May-2020 16:58
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    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

     

     

     

     

     

     

     

     

     

     


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    Uber Geek

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      #2475935 3-May-2020 17:49
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    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 X running Sailfish OS. https://sailfishos.org The true independent open source mobile OS 
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    5132 posts

    Uber Geek


      #2475941 3-May-2020 18:07
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    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).


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      #2475946 3-May-2020 18:31
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    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. 


    3146 posts

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      #2476165 4-May-2020 10:23
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    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.


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