NZ property boom just like Ireland's

pclancy

Its becoming more and more like Ireland was before the crash here regarding the price of housing and the trigger factors for a crash. Prices went up 7% last year, 5 the year before that and apart from 2008-2010 around 5-15% every year prior.

Its growing way faster then people's wages and average joe is finding it harder to get on the ladder. The usual story about "housing shortages" keeping prices up is being fed and the banks are giving huge loans with minimal deposits to anyone that can meet the payments to help them get a 2nd or 3rd investment property.

Its showing the same signs as Ireland did except here for $500,000 you get a mouldy, damp, wooden house with a tin frame roof and no insulation, heating and a kitchen from the 1950s.

They just seem so unaware to what IReland and many other countries went through with their housing markets and only can see prices going up...:eek:

JustRoss23

well nows the time to buy? and sell in 2 to 3 years time and you will make a killing;)

pclancy

True if I could safely say it would last a few years, No capital gains tax either....

emo72

also in toronto, my brother lives there and theres houses getting built everywhere. but the scary thing his house value has nearly doubled in 8 years.

Cookie_Monster

Part of the problem is Auckland and it sucking in huge amounts of people from the regions and sprawling out like Dublin and driving local prices up which everywhere follows to an extent and the ChCh rebuild means prices there will be expensive too to cover costs, but yes I see it and hear it even here in New Plymouth, people talking about investment properties and the market only going up etc etc etc. It's scary tbh.
But at least, unlike Ireland, NZ can manage it's own interest rate to curb it and it's expected to go up 2% or so in the next 2-3 years, base rate of about 4.5% and add on by banks mean rates up around the 7.5-8% mark, not ideal for crazy big mortgages.

pclancy wrote:

Its showing the same signs as Ireland did except here for $500,000 you get a mouldy, damp, wooden house with a tin frame roof and no insulation, heating and a kitchen from the 1950s.

The quality of housing really is appalling, we didn't bother considering to buy as you would have to buy new and high spec just to get an average Irish house analogue. We're just going to build our own.

spunkymunky

I suppose there is a slight difference in that the houses that are for sale are all existing. There isnt the property boom that Ireland experienced.....house estates popping up everywhere with like a 500 units. So in some way buyers are protected that their house will not be lost in a sea of apartments (Well within 15km of the city).
A big part of why people are buying in certain areas is the school zoning. This is unlikely to change which will help keep at least a base price for those properties.

Saying that, I think you'd be mad to buy now. Those property apprentice ads drive me mad!! "Now is the time to buy. Interest rates are at their lowest..." <----Only one way they're gonna go is up, as said above!
Speaking to a girl at work, who is looking, and she says that they dont even accept offers any more. Its all auctions with the properties selling and like 10-20% above the guide price. Madness!!!

I got bitten in Ireland and now lumped with an apartment worth half the mortgage. Hate to see the same happen here!!

supermouse

Its horrendous. My flatmate just paid $600k for a house that's current value is $340,000.... where is the logic in that!
The house i rented before my current one sold for nearly $700k despite having no heating/cooling system, single glazed windows, less than 10m squared of garden and was the coldest, most miserable place to live in the winter months.
No hope of me ever owning a house over here if prices continue on that upward spiral

pclancy

Prices will reset. They have to. Interest rates going up 1 or 2 percent will hurt average joe who is already struggling with the payments on his $50,000 a year job and force him to cross the ditch for a better salary.

To be honest I think the only reason the country is "doing well" right now is all the immigration to replace the Kiwis that are leaving in droves (1000 a week apparently) and the Christchurch rebuild keeping the economy growing.

Mrs OBumble

pclancy wrote: »

Its showing the same signs as Ireland did except here for $500,000 you get a mouldy, damp, wooden house with a tin frame roof and no insulation, heating and a kitchen from the 1950s.

Just some context for you: there's nothing wrong with wooden houses and tin roofs - they perform a lot better in earthquakes than the building materials you may be used to.

Agree there are mouldy, damp dump out there - but that's true in Ireland too, not unique to NZ.

And yes, there was a leaky-buildings issue, due to builders not doing some new construction methods properly. Buit that's new-ish buildings, not ones from the 1950s.

Insulation and double-glazing aren't that common yet - but not everywhere is actually cold enough to need them.


And the biggest difference between Ireland and NZ: the NZ (conservative!) government is talking about legislating for a maximum % mortage. the 120% mortage over 30 years deals aren't likely to be seen there.

Cookie_Monster

Mrs OBumble wrote: »

Just some context for you: there's nothing wrong with wooden houses and tin roofs - they perform a lot better in earthquakes than the building materials you may be used to.

nothing wrong with wooden houses for sure, if anything I consider them better ecologically and certainly more so with the earthquake danger. Tin roofing however borders of the ridiculous, it's a cheap nasty material prone to degrading and rusting quickly, makes and huge racket when raining, little insulation value and ugly as hell

Agree there are mouldy, damp dump out there - but that's true in Ireland too, not unique to NZ.

again true but it's far far more common in NZ, certainly from my experience so far.

Insulation and double-glazing aren't that common yet - but not everywhere is actually cold enough to need them.

It's not only about the cold though, it's about keeping heat out in the summer, noise reduction, cost reduction and just general efficiency. The fact that it's not even properly legislated for yet is astounding IMO

And the biggest difference between Ireland and NZ: the NZ (conservative!) government is talking about legislating for a maximum % mortage. the 120% mortage over 30 years deals aren't likely to be seen there.

Needed and welcome but still depends on the limits set.

pclancy

Mrs OBumble wrote: »

Just some context for you: there's nothing wrong with wooden houses and tin roofs - they perform a lot better in earthquakes than the building materials you may be used to.

Agree there are mouldy, damp dump out there - but that's true in Ireland too, not unique to NZ.

And yes, there was a leaky-buildings issue, due to builders not doing some new construction methods properly. Buit that's new-ish buildings, not ones from the 1950s.

Insulation and double-glazing aren't that common yet - but not everywhere is actually cold enough to need them.


And the biggest difference between Ireland and NZ: the NZ (conservative!) government is talking about legislating for a maximum % mortage. the 120% mortage over 30 years deals aren't likely to be seen there.

Yeah it is good to see National actually doing something about the price rush. But i disagree about the quality of housing, its pretty poor compared with similar developed countries and needs addressing. For example there are a lot of very poor people living in totally substandard state accommodation that are suffering health degradation. The housing stock of the rural or smaller cities is really behind the times yet commands incredible prices for what it actually is. Its like Kiwis value the land highly and the tin shack that's thrown up on it is like a side thought. The scenery and low density usually makes up for it somewhat though

I realize the wooden constructions were for Earthquake resilience, but in this day and age there are lots of concrete and timber frame or cladded options to consider as well as good old pioneer days of the "California bungalow" that are featured so much around Wellington's suburbs.

Basically there needs to be some value got for these $500,000 sales. I won't be buying for a few years but when I do I'll probably build my own place and hopefully by then land prices will have reset to something attainable.

Mrs OBumble

pclancy wrote: »

But i disagree about the quality of housing, its pretty poor compared with similar developed countries and needs addressing. For example there are a lot of very poor people living in totally substandard state accommodation that are suffering health degradation.

Not unique to NZ though: there are bunch of people who got allocated council housing in Donegal ... in un-insulated holiday cottages, provided as part of the developer's quote! (Probably other places too, but I know 100% certainly that it happed up there.)

spunkymunky

Mrs O Brumble
Are you really trying to compare the quality of housing in Ireland with that of New Zealand? There is no comparison, if you ask me. Even the lower quality houses in Ireland compare easily with the normal standard here. Better insulation, better build quality (generally) and this isnt a recent thing. Houses have always been brick built with decent insulation and windows. If they were not in the past they have been upgraded.
New Zealand is definitely cold enough enough to need double glazing. Ive been through Queenstown and Auckland winters and it was cold (More so Qtown).
I was renting in a former lodge that charged like a 100 a night or so(we took the lease) and i had 3 duvets at night and even wore socks to bed. Sitting in the lounge during the day breathing fog!!
I rent in a relatively new place in Auckland (Side flat of a mini mansion) and the insulation is non existent. No rads or heaters except a heat pump in the kitchen, single glazing and cold rooms in winter!!
But the views!!!!!

Mrs OBumble

spunkymunky wrote: »

Even the lower quality houses in Ireland compare easily with the normal standard here. Better insulation, better build quality (generally) and this isnt a recent thing. Houses have always been brick built with decent insulation and windows. ...

Houses that were build for permanent housing .. yeah, sort of.

But I'm 100% sure that buildings which were built to the specification of summer-time holiday cottages were allocated as year-round social houses. NO insulation. Definitely happened in Donegal and Sligo (I can name the estates.) Probably in other places too.

spunkymunky wrote: »

I rent in a relatively new place in Auckland (Side flat of a mini mansion) and the insulation is non existent. No rads or heaters except a heat pump in the kitchen, single glazing and cold rooms in winter!!
But the views!!!!!

Houses are rented unfurnished. If you cannot afford to buy your own heaters, then you should not be renting the place. Simples.

spunkymunky

Mrs OBumble wrote: »

Houses that were build for permanent housing .. yeah, sort of.

But I'm 100% sure that buildings which were built to the specification of summer-time holiday cottages were allocated as year-round social houses. NO insulation. Definitely happened in Donegal and Sligo (I can name the estates.) Probably in other places too.




Houses are rented unfurnished. If you cannot afford to buy your own heaters, then you should not be renting the place. Simples.

You're specifically singling out a particular incident. Thess were purpose built holiday home (baches) that were incorrectly assigned as state housing. Thats not bad building, thats bad government assignment of property. This is different to poor build quality.

And you're second comment is silly. Of course i can afford a heater. My point is there is no heating system or double glazing in a house that will be cold in the winter. This is a modern house and you would think that maybe the owner would consider that winters get a little chilly.

pclancy

Rather then comparing New Zealand's general housing stock to some badly built summer holiday homes in Donegal and Sligo lets get back onto the topic of the impending burst of the property bubble

Met a builder the other night who has about 10 properties across Wellington. All rented out and making decent returns with good tenants. But every now and then he's adding another property to his portfolio without much extra equity. So his mortgages are getting larger and if the interest rates go up (which surely they must considering how low they are) he's rent payments are probably not going to keep up and he'll be in trouble. Does that remind anyone of the situation many Irish landlords were in up to 2009 with lots of investment properties mortgage up to the hilt? He cant see any other way for prices to go up and interest rates to go down. Dangerous.

Also look at the situation in Christchurch, there's pretty insane stuff going on there with the EQC delaying payments and not helping people get back into decent homes. The stock is so limited people are paying crazy money for pieces of land and throwing up any kind of house on it. If prices go down due to the rebuild kicking off then a lot of people will end up in negative equity for that tiny place they just bought.

pclancy

Mrs OBumble wrote: »

Houses are rented unfurnished. If you cannot afford to buy your own heaters, then you should not be renting the place. Simples.

In your opinion perhaps but Irish and many Europeans are used to renting houses that come with some form of central heating as standard. So its a bit of a shock when you come down here and have to go buy some oil heaters and thick socks/jumpers just to get through June-September because the landlord doesn't believe in investing in heating or insulation.

My first landlord thought it would be fun for us all to go pick pine cones to burn in his wood heater instead of turning on the nearby gas heater. Tight bastard.

Cookie_Monster

Lack of insulation is not only an issue in the winter remember, houses get stupidly hot in the summer because as well because there is no insulation to keep the heat out and this is just as unpleasant.
I really do find it odd that a garage is standard but insulation is not on most houses, messed up priorities.

Our rented house is going to auction in 2 weeks at a guide price of 325k, GV (Dec 10) is 240k. Says it all...
In fairness it's a nice property and actually has a proper oven and gas hob which is next to impossible to find but 85k over value?!?