New Zealand - Prices down but....

Strings

I am off to NZ next week for good, but thought I would share this with you all

Property values in gradual decline: QV

Property values have continued to decline gradually over the past few months as market sentiment remains cautious, according to the August report by QV.
Property values have dropped 1.1 since March this year, after rising 4.3 per cent in the previous seven months.
As a result, values are now 3.1 per cent above the same time last year, and 5 per cent lower than the market peak of late 2007.
However, the average sales price increased slightly from $407,191 to $409,700 but this is because relatively few lower value properties are selling.
QV valuation manager Glenda Whitehead said little buyer demand and a considerable backlog of unsold property on the market are causing values to gradually drop.
"Although the number of new properties being added to this pool appears to have slowed as potential vendors choose to wait until the market begins to show signs of recover.
"Those with properties currently on the market now accept that they will take longer to sell, although they are not dramatically dropping their asking prices."

She said despite a drop in sales volume, it's still slightly above the same time in 2008, during the worst of the recession.
"There are early signs of a slight increase in activity as more people are assessing the market and considering their options. The housing market is usually more active in spring although the current economic climate suggest any upsurge this year will be modest. Short of any fundamental change in the market, values are expected to continue to slide slightly....

http://www.nzherald.co.nz/property/news/article.cfm?c_id=8&objectid=10671962


I expect we will see the highlighted element happening here soon.

NZ current floating / variable rate is currenty about 6%

1 year fix at 6.5
2 year fix at 7%

The recent rises interest rates have not caused a HPC - (yet?)

Out,_Vile_Jelly

I have a mate who's emigrated to Wellington- she told me what you're really buying in NZ is the land, not the property on top. I don't think their market is really comparable to the UK.

Generali

Out,_Vile_Jelly wrote: »

I have a mate who's emigrated to Wellington- she told me what you're really buying in NZ is the land, not the property on top. I don't think their market is really comparable to the UK.

The place I'm renting at the moment sold for $970,000 ($980,000?) . The value of the house in that would be roughly $0.

Houses in Australia are in the process of becoming disposable.
There is also a lively market for 2nd hand houses (without the land) and companies that specialise in moving the houses elsewhere. BTL LLs use them to get a cheap house up quickly in expanding mining areas.

http://www.qldcolonialhouses.com.au/houses_removal.htm

Out,_Vile_Jelly

I love NZ, and sometimes think I could move there, but know I'd really suffer cultural buzz withdrawal after living in London for so long. Wellington property prices seemed astoundingly cheap to me (one of my favourite cities), but as my mate pointed out, salaries are really low compared to the UK, and their economy is small and quite isolated and vulnerable.

Strings

Out,_Vile_Jelly wrote: »

I love NZ, and sometimes think I could move there, but know I'd really suffer cultural buzz withdrawal after living in London for so long. Wellington property prices seemed astoundingly cheap to me (one of my favourite cities), but as my mate pointed out, salaries are really low compared to the UK, and their economy is small and quite isolated and vulnerable.

Thats the problem, salaries are quite low in the scheme of things and food / power and the like is very expensive.

You do get more for your buck though

bendix

I lived in NZ for much of the 1990s(and have NZ citizenship as a result) during the 1990s, and loved it. Wages are lower, but property remains much more affordable there than here, PLUS you get so much more value for your money. A house is a house there, not a pokey little two up two down with attached coal shed and back yard, like here.

I bought my first place in a trendy upandcoming close-to-the-city suburb in 1992 for NZ$142,000 (at the time, around £45,000) and sold a year later for $225,000. We then rented for a while, and bought our next place in early 94 for $256000, and sold eighteen months later $330,000. I then left there, and returned in 1999 and bought a place for £356,000. I only lived in it for a couple of years, before renting it out for a few years. I sold it in 2005/6 for nearly $750,000. Lovely jubbly.

Strings

Out,_Vile_Jelly wrote: »

I have a mate who's emigrated to Wellington- she told me what you're really buying in NZ is the land, not the property on top. I don't think their market is really comparable to the UK.

why not? land is at a premimum here, whereas in NZ it is not

Strings

bendix wrote: »

I lived in NZ for much of the 1990s(and have NZ citizenship as a result) during the 1990s, and loved it. Wages are lower, but property remains much more affordable there than here, PLUS you get so much more value for your money. A house is a house there, not a pokey little two up two down with attached coal shed and back yard, like here.

I bought my first place in a trendy upandcoming close-to-the-city suburb in 1992 for NZ$142,000 (at the time, around £45,000) and sold a year later for $225,000. We then rented for a while, and bought our next place in early 94 for $256000, and sold eighteen months later $330,000. I then left there, and returned in 1999 and bought a place for £356,000. I only lived in it for a couple of years, before renting it out for a few years. I sold it in 2005/6 for nearly $750,000. Lovely jubbly.

It largely depends on where you live. If you are in AKL, then the average house is worth roughly 450k with the average household income in the same area about 80k

Out,_Vile_Jelly

Strings wrote: »

why not? land is at a premimum here, whereas in NZ it is not

Land is also at a premium in a small country with a large farming economy. The houses there are much easier to pull down and rebuild, and building your own is culturally much more normal.

Strings

Out,_Vile_Jelly wrote: »

Land is also at a premium in a small country with a large farming economy. The houses there are much easier to pull down and rebuild, and building your own is culturally much more normal.

Disagree, there are more subdivisions popping up than you can shake a stick at.
Yes in some areas it is about land banking, but this is minor in the scheme of things

bendix

There seem to be a lot of NZ experts on this site, most of whom have probably never been there.