Real estate, post level 4

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#2703516 7-May-2021 16:56

Batman:

quickymart:

As I don't have a mortgage, what happens when someone who has a mortagage loses their job and can't make the payments? Does the bank just reclaim the house and sell it, and the person who has been making said mortgage payments gets nothing?

in a mortgagee sale:

mortagee gets the balance of : sale price - amount owed - marketing fees. if the number is negative then the bank will try to get back what's owed from other securities. if the number is positive then they get money back.

be aware that in a mortgagee sale you are not buying the mortgagee's possessions. i've heard stories of buyers taking possession to find the kitchen missing, carpet missing, some form of derelict transformation takes place!

Can they get peoples kiwisaver? Would the kiwisaver provider permit the money being withdrawn in that case?

Personally I wouldn't touch a house being sold by mortgagee sale unless it is vacant and I can view it properly to do due diligence.

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tdgeek

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#2703614 8-May-2021 08:24

mattwnz:

This video shows how the number of houses for sale in NZ has dropped significantly over the last year, as per trademe listings. I have been looking for these stats previously, but couldn't find them as they don't seem to be widely reported. https://youtu.be/-Yi1_IGZxRw?t=234

It shows 32,000 houses for sale this time last year, now only 22,000 . That is 10,000 houses that are missing from the market. This is really the problem in a nutshell, the supply being sold has dropped significantly. So limited supply on the market, creating more demand per house, mixed with the emergency low interest rates, is pushing up prices

Yes, but isn't this a supply of sellers issue not a lack of houses? People are deciding to hold off selling for whatever reasons. Can't blame them if insecurity over employment is a potential problem. Most of these are probably people trading houses with each other.

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#2703616 8-May-2021 08:37

There are many reasons why prices rise here. Past immigration, low interest rates, less building, more investors, Covid returnees. As you mentioned less people are selling, most likely due to uncertainty or perhaps because of price rises. People will react and the market is what it is. Measures are now in to remove investors, building is high right now, if sellers are holding back that's their reaction, if buyers want to push prices up, thats on their head. High prices are only a problem if you buy them. Maybe thats why less are selling. Maybe they are buying and renting out the house, thats ok as we don't want rentals to disappear. If all this is a problem, build your own. If you sign up today to build a 700k home, when you move in, in 4 or 6 months time, its still 700k You have reduced buyer demand, added one more housing stock, its a win/win.

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#2703622 8-May-2021 09:07

Speaking of building happening in Auckland...

https://www.nzherald.co.nz/nz/housing-crisis-exclusive-data-shows-the-suburbs-aucklands-new-houses-are-being-built-in/LADO7RRZEHWRNXTLYZNDTC54HQ/

Fred99

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#2703626 8-May-2021 09:31

mattwnz:

Can they get peoples kiwisaver? Would the kiwisaver provider permit the money being withdrawn in that case?

Personally I wouldn't touch a house being sold by mortgagee sale unless it is vacant and I can view it properly to do due diligence.

I believe it's protected - partly.

They can't touch money you've got saved in KS, but they can with money you either pay in or withdraw while bankrupt. I don't think you can for example protect money by paying in to kiwisaver when you're technically insolvent. I presume that if you died while still bankrupt, they could then take the lot.

When the GFC resulted in many homeowners having negative equity in the US, they could "walk away" from the property debt-free (in some states - not all?), the shortfall being the bank's problem. Here the banks can bankrupt the mortgagee in the hope of recovering some of the shortfall from sale of other assets etc.

mattwnz

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#2705564 10-May-2021 15:47

tdgeek:

There are many reasons why prices rise here. Past immigration, low interest rates, less building, more investors, Covid returnees. As you mentioned less people are selling, most likely due to uncertainty or perhaps because of price rises. People will react and the market is what it is. Measures are now in to remove investors, building is high right now, if sellers are holding back that's their reaction, if buyers want to push prices up, thats on their head. High prices are only a problem if you buy them. Maybe thats why less are selling. Maybe they are buying and renting out the house, thats ok as we don't want rentals to disappear. If all this is a problem, build your own. If you sign up today to build a 700k home, when you move in, in 4 or 6 months time, its still 700k You have reduced buyer demand, added one more housing stock, its a win/win.

I was listening to one of NZs property experts this weekend on Newstalk podcast, and he said that from his research there were already enough houses in NZ, and we have been building enough. The problem is supply on the market, we are about 1/3 down which is significant, and there are at least the same, if not more buyers. This will likely be for the reasons you said. There are also now a lot of retired people I noticed out looking for rentals , due to the returns on their savings being so low, and the sharemarket potentially very over valued. They may have previously accept 3% interest previously in TDs, but they can't accept less than 1% on savings, as that is losing money.. So the problem doesn't appear to be a lack of actual houses in the country, but they are being stockpiled or not used for their intended purpose, as a store of wealth.Then we have new buyers, and potentially converting owner/occupied houses into rentals. An Australia property expert said the same thing about NZ a few months ago, that NZ doesn't have a housing shortage, just a lack of houses available or on the market. So there must be a heck of a lot of empty houses in NZ, or being used for temp accommodation. Tax is really the only way to solve it. Vacant house tax, bed taxs for Air bnbs, vacant land tax. etc. Stopping people treating their house as an investment, when it isn't. People need to instead invest in other things rather than housing. Anything to get these houses lived in. Then we can actually increase migration, when we have enough houses for the current population, and work out what we want NZs population to be. Also we need to actually plan for growth, not what we have been doing which has contributed to this mess.

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#2705721 10-May-2021 18:40

mattwnz:

I was listening to one of NZs property experts this weekend on Newstalk podcast, and he said that from his research there were already enough houses in NZ, and we have been building enough. The problem is supply on the market, we are about 1/3 down which is significant, and there are at least the same, if not more buyers. This will likely be for the reasons you said. There are also now a lot of retired people I noticed out looking for rentals , due to the returns on their savings being so low, and the sharemarket potentially very over valued. They may have previously accept 3% interest previously in TDs, but they can't accept less than 1% on savings, as that is losing money.. So the problem doesn't appear to be a lack of actual houses in the country, but they are being stockpiled or not used for their intended purpose, as a store of wealth.Then we have new buyers, and potentially converting owner/occupied houses into rentals. An Australia property expert said the same thing about NZ a few months ago, that NZ doesn't have a housing shortage, just a lack of houses available or on the market. So there must be a heck of a lot of empty houses in NZ, or being used for temp accommodation. Tax is really the only way to solve it. Vacant house tax, bed taxs for Air bnbs, vacant land tax. etc. Stopping people treating their house as an investment, when it isn't. People need to instead invest in other things rather than housing. Anything to get these houses lived in. Then we can actually increase migration, when we have enough houses for the current population, and work out what we want NZs population to be. Also we need to actually plan for growth, not what we have been doing which has contributed to this mess.

I do agree. While there is no doubt that building has been low, is the shortage real? Or am I holding off? Houses as an investment, agree, Govt has tackled that. But if I decided to cash in my high equity and add a rental, thats also good as rentals are needed. I don't believe that houses are stockpiled. The argument for that is these damn tenants, (been there done that), but once you've been burned, you go for better tenants.

I fully agree on taxing empty houses. As long as the many legit (Ive bought, reno-ing the old place (me), I'm waiting for tenants, its on sale) are exempt. You buy another house , cool on you , but it requires a family in it or else. Id like to see the same for bare land. Make bare land a liability. If you farm barley or sheep, fine, but if you are in a stones throw or three of a town, look out. But then you morph into the political spectrum. Dont tell me what to do, etc.

There does need to be a mind shift. Land. You farm it as a real business (i.e. make a profit) or its used for housing.

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#2705723 10-May-2021 18:41

Lol. There is a shortage of houses.

tdgeek

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#2705729 10-May-2021 18:49

Handle9:

Lol. There is a shortage of houses.

Lol?

Is it possible to have an opinion, followed up by a real reply? I guess we are 100,000 houses short? So there are 400,000 people with regular jobs living in tents? Thats roughly 2 adults, 2.2 kids and 1.1 cats.

Has this crisis developed over the last 2 years?

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#2705731 10-May-2021 18:50

tdgeek:

Handle9:

Lol. There is a shortage of houses.

Lol?

Is it possible to have an opinion, followed up by a real reply? I guess we are 100,000 houses short? So there are 400,000 people with regular jobs living in tents? Thats roughly 2 adults, 2.2 kids and 1.1 cats.

Has this crisis developed over the last 2 years?

ROFL. You've been given the stats but sure, stay with your reckons.

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#2705735 10-May-2021 18:57

Handle9:

ROFL. You've been given the stats but sure, stay with your reckons.

Here we go, full of nastiness but lacking a reasonable response.

When did NZ build build build? 1930's as an economic recovery. Was there a shortage then? Must have been. When after that? Post WW2, again, a recovery mission. Whats happened since? Housing supply was supreme, until the last few years?

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#2705812 11-May-2021 07:07

mattwnz:

I recall they saying 15% drop. But that was when we didn't know how this virus was going to go, and how badly affected NZ would be. We could have ended up like India. We have been very lucky in a number of ways. I also remember them saying that builders may end up with no work, when the opposite has happened

Demand has been artificially inflated due to our record immigration numbers, and bringing in people when we don't have enough houses for those already here. Little planning or even analysis of what NZs population should even be. Although I understand the government are now getting someone to do this. We are all therefore paying the price of this in some way. These house rices rises benefit very few in the long run. Maybe people feel better because their house has gone up in value, but they need to live somewhere, if if they move, thy need to pay a similar price, unless they downgrade or move town. But even small houses now are going for nearly as much as large ones, as many people want smaller houses, especially with an aging population. Many baby boomers are selling up their family home to downsize, but can be paying just as much for a small low maintenance house in a subdivision or village

Found some interesting reads

https://i.stuff.co.nz/national/politics/300223358/reserve-bank-repeatedly-warned-government-money-printing-would-lead-to-house-price-inflation

https://www.theguardian.com/world/commentisfree/2021/may/09/everyone-deserves-a-decent-secure-life-its-time-new-zealand-talked-about-rent-controls

mattwnz

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#2706324 11-May-2021 23:40

dafman:

Factors which will support house prices holding up:

- low interest rates

Factors which will support house prices falling:

- We are entering a global recession, the likes not seen since the 1930's. Less money all around and less people prepared to take a punt with major purchases financed by debt.

- Equity prices, the world's other main asset class, are tanking.

- Significant unemployment, many of which, sadly, will be mortgage holders with high levels of debt.

- AirBnB 'investment' properties financed by high debt will now be unsustainable (I heard Rotorua had over 2,000 AirBnB in the region).

- Lower demand from migrants (read Nil) for the foreseeable future.

2000 air bnbs are essentially 2000 houses that are not being used for NZers to live in. Essentially they are just adding to our hotel/motel numbers, and putting those out of business. How many houses is Rotorua short? NZ is apaprently short of 80,000 houses, yet there could be over 100,000 not being lived in normally as a family home. Time for bed taxes and charging them commercial rates IMO. Apparently some council are going to do this. Also vacant house taxes which are common overseas, are needed.

Here is the link to the Oneroof podcast from this weekend, where one of NZs top proeprty experts said that he doesn't think NZ has a shortage of houses, and NZ has been building enough over recent years. It is just supply on the market that is the problem, and people holding off. Why sell when your house could be earning more money each month they you are working full time? Warning this is an MP3 download of about 35MB https://api.spreaker.com/download/episode/44698495/wc 08_05_21_ashley_church.mp3

Handle9

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#2706325 11-May-2021 23:55

Ashley Church. The definition of "greed is good" and "turkeys don't vote for Christmas."

He's not an "expert" as much as peddler of propaganda.

tdgeek

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#2706345 12-May-2021 07:01

mattwnz:

Here is the link to the Oneroof podcast from this weekend, where one of NZs top proeprty experts said that he doesn't think NZ has a shortage of houses, and NZ has been building enough over recent years. It is just supply on the market that is the problem, and people holding off. Why sell when your house could be earning more money each month they you are working full time? Warning this is an MP3 download of about 35MB https://api.spreaker.com/download/episode/44698495/wc 08_05_21_ashley_church.mp3

Is the house earning? If I sold to get these earnings I either rent at high rates or buy another house at the same price levels. Stuck in the same market. Why would people hold off? Job insecurity has risen with Covid. Employers have a good reason to say no pay increase this year. Safer to leave that upgrade for another time

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