New Zealand - The Good, The Bad and The Ugly.

[intern]

You may have mentioned it in the previous 268 pages, but why the sale if I may ask - moving area or ridding of an albatross ? 

 

Selling purely because of the economic chaos New Zealand is about to encounter.

 

A few things:

Tourism is gone. AirBNBs, which have put the squeeze on the long term rental market, are about to flood back into the market as there are a ton of landlords who have daisy-chained AirBNBs thanks to cheap finance and positive cashflows. They're going to find those cashflows seriously reversed and as small investors highly leveraged, they do not have the capital to carry more than 2 or 3 months before something's gotta give.

 

Not all those rentals will be in demand, because set up as AirBNBs, they will be more expensive ones. Also, demand is likely to drop as we won't have any new immigrants for a while because we are expecting up to 230k more unemployed NZers.

 

In short, I think there will be a housing glut soon, with prices coming down and difficulty selling. Bear in mind, post-2008, when tourism took a knock because of the GFC (Global Fried Chicken), you could buy a beachfront 4-bed house in Ohope for around $380k. Until recently, the same sort of property would run you north of 800k.

 

With tourism now completely deleted, the outlook is grim. So I want to become a renter again.

[intern]

What sort of mumbo-jumbo engineering & planning is this - you have let the side down seriously ! Everyone knows that the engineers houses are built and repaired with absolutely no forethought, just like the mechanics car is held together with baling wire and body-filla.

 

Next you will tell us you read the manual for that fancy big screen TV.

 

You are not beyond redemption though. That last picture shows a TV with a stand size X metres wide, balanced precariously on a table top, also of critical dimension X metres wide.  No sneezing allowed! 

Patches definitely the kind of guy to read the TV manual 

[intern]

Noooooo your house is amazing.....

Thanks - we like it too, but houses and cars etc are not things to which you should form an emotional bond.

Bicycles and motorbikes of course are in an entirely different category.

[Wayne Potgieter]

Thanks - we like it too, but houses and cars etc are not things to which you should form an emotional bond.

Bicycles and motorbikes of course are in an entirely different category.

This.

 

We had been looking at buying. Now we are going to sit back and watch for a little while.

 

Where we are looking in Port Hills CHC, we are expecting to see the prices reduce.

 

But now with the situation you outline, maybe a nice lakefront 4 bedroom place in Queenstown is on the menu....

 

Our company is going to get rid of its big $22k a month offices in Newmarket and encourage people to work from home permanently. We are looking to get a much smaller office with 5-10 desks on a rotation basis and a boardroom for client meetings. Basically a space about a quarter the size of what we had. This means that wifey and I (we work for the same company - Intern knows this) can work anywhere in the country for the same salary.

[patham]

Selling purely because of the economic chaos New Zealand is about to encounter.

 

A few things:

Tourism is gone. AirBNBs, which have put the squeeze on the long term rental market, are about to flood back into the market as there are a ton of landlords who have daisy-chained AirBNBs thanks to cheap finance and positive cashflows. They're going to find those cashflows seriously reversed and as small investors highly leveraged, they do not have the capital to carry more than 2 or 3 months before something's gotta give.

 

Not all those rentals will be in demand, because set up as AirBNBs, they will be more expensive ones. Also, demand is likely to drop as we won't have any new immigrants for a while because we are expecting up to 230k more unemployed NZers.

 

In short, I think there will be a housing glut soon, with prices coming down and difficulty selling. Bear in mind, post-2008, when tourism took a knock because of the GFC (Global Fried Chicken), you could buy a beachfront 4-bed house in Ohope for around $380k. Until recently, the same sort of property would run you north of 800k.

 

With tourism now completely deleted, the outlook is grim. So I want to become a renter again.

 

Similar scenes in Sydney I gather, loads of AirBnB's being dropped into the normal renting pool due to total lack of tourists, so rentals are being dropped drastically. Some suburbs with different property demand drivers will be impacted less though, areas which are catchments for exceptionally good state (i.e. free) schools tend to be sheltered from the highs and lows. 

[patches]

What sort of mumbo-jumbo engineering & planning is this - you have let the side down seriously ! Everyone knows that the engineers houses are built and repaired with absolutely no forethought, just like the mechanics car is held together with baling wire and body-filla.

 

Next you will tell us you read the manual for that fancy big screen TV.

 

You are not beyond redemption though. That last picture shows a TV with a stand size X metres wide, balanced precariously on a table top, also of critical dimension X metres wide.  No sneezing allowed! 

 

There-in lies the secret. I'm no real engineer, I am but a lowly CAD-monkey (or was once upon a time) with 2 half finished engineering degrees   

 

Patches definitely the kind of guy to read the TV manual 

 

I actually did

 

When it previously wall mounted the TV, I needed a rough idea of where to feel my way around the back to plug in the TV aerial and network cables.

Edited May 4, 2020 by patches

[patham]

This.

 

We had been looking at buying. Now we are going to sit back and watch for a little while.

 

Where we are looking in Port Hills CHC, we are expecting to see the prices reduce.

 

But now with the situation you outline, maybe a nice lakefront 4 bedroom place in Queenstown is on the menu....

 

Our company is going to get rid of its big $22k a month offices in Newmarket and encourage people to work from home permanently. We are looking to get a much smaller office with 5-10 desks on a rotation basis and a boardroom for client meetings. Basically a space about a quarter the size of what we had. This means that wifey and I (we work for the same company - Intern knows this) can work anywhere in the country for the same salary.

 

It's one of those strange things in economics. If one person does it, it's a good thing. If everyone does it, does the same hold true ?

 

If one slashes the entire CBD office demand by 75%, so that 75% of the office space is no longer needed, stands empty and the developers of 3 out 4 buildings go bust - passing the pain onto the banks holding the mortgage. Probably not a nice scenario to be in, and certainly won't be a pleasant neighbourhood to walk through at night.

[Slowbee]

In a seriously crazy idea, would you still plan and put into action immigration to NZ?

[Wayne Potgieter]

In a seriously crazy idea, would you still plan and put into action immigration to NZ?

My thoughts...if you were offered a job and could move and start working almost immediately YES. I would rather be here than most countries. Intern is right - things are going to be bleak for a while. But they are going to be bleak everywhere. Some places slightly less than others. I think NZ is one of those places. 

 

If you were coming here to look for work in a non highly skilled profession, I don't know if finding work would be that easy. It certainly would be hard to justify to Immigration NZ that there are currently no NZers that could do the work.

[patches]

This.

 

We had been looking at buying. Now we are going to sit back and watch for a little while.

 

Where we are looking in Port Hills CHC, we are expecting to see the prices reduce.

 

But now with the situation you outline, maybe a nice lakefront 4 bedroom place in Queenstown is on the menu....

 

Our company is going to get rid of its big $22k a month offices in Newmarket and encourage people to work from home permanently. We are looking to get a much smaller office with 5-10 desks on a rotation basis and a boardroom for client meetings. Basically a space about a quarter the size of what we had. This means that wifey and I (we work for the same company - Intern knows this) can work anywhere in the country for the same salary.

 

I just saw "Port Hills" and instantly liked the post without the need to read any more of it, hahaha!

 

But yeah, when I lived there, the average house on my street in Huntsbury was around a shade over $1m.

 

But a $1m house there is 4 bed, 3 bath, architecturally designed, under 10yrs old, double glazed, seismically engineered and all that good stuff. Plus there's an awesome view of the city from up there, you're 400m from MTB trails (Rupaki, Crater Rim, and Bowenvale DH track), Victory Park MTB trails under 2km and less than 5km from the bike park. All within about 7km of the CBD.

 

It's pretty darn awesome!

 

Man, I'm getting jealous just thinking about it!

 

As for the dip in Central Otago house prices, I'm watching this eagerly too!

 

Unfortunately I can't work from anywhere, but if a nice property comes along for the right price, I'll be seriously tempted. Keep the Milford house, and do the Kiwi Boomer thing in 8-10yrs time (ie. sell the overpriced Auckland property and move to the countryside house, pay it off, and have a decent chunk towards retirement).

[Wayne Potgieter]

It's one of those strange things in economics. If one person does it, it's a good thing. If everyone does it, does the same hold true ?

 

If one slashes the entire CBD office demand by 75%, so that 75% of the office space is no longer needed, stands empty and the developers of 3 out 4 buildings go bust - passing the pain onto the banks holding the mortgage. Probably not a nice scenario to be in, and certainly won't be a pleasant neighbourhood to walk through at night.

Yeah, thats true to some degree.

 

Although one could make an argument for this being the disruption that is needed.

 

Shared or remote workforces mean a smaller degree of traffic and thats a good thing for most people, those building can hopefully create an opportunity for other projects and a lot of them will simply be repurposed into shared spaces.

 

I certainly would not want to be sitting on a heap of commercial property right now. Historically considered a fairly safe investment, now not so much. 

 

Interesting times...

[intern]

There-in lies the secret. I'm no real engineer, I am but a lowly CAD-monkey (or was once upon a time) with 2 half finished engineering degrees   

 

 

I actually did

 

When it previously wall mounted the TV, I needed a rough idea of where to feel my way around the back to plug in the TV aerial and network cables.

Brah when it comes to half finished degrees, I've been led to believe it's the second half you want to have in the bag.

Not that I have a degree. CAD monkey meet typist.

[intern]

This.

 

We had been looking at buying. Now we are going to sit back and watch for a little while.

 

Where we are looking in Port Hills CHC, we are expecting to see the prices reduce.

 

But now with the situation you outline, maybe a nice lakefront 4 bedroom place in Queenstown is on the menu....

 

Our company is going to get rid of its big $22k a month offices in Newmarket and encourage people to work from home permanently. We are looking to get a much smaller office with 5-10 desks on a rotation basis and a boardroom for client meetings. Basically a space about a quarter the size of what we had. This means that wifey and I (we work for the same company - Intern knows this) can work anywhere in the country for the same salary.

 

The renters with lumpy sums as yet uninvested in property are in the pound seats now. Though you do face currency risk and a devalued dollar with the largesse being dished out and just recently Grant Robertson saying 'banks have not met our expectations or those of small business' and making available low/no interest government loans to one of the riskiest customer bases.

[intern]

In a seriously crazy idea, would you still plan and put into action immigration to NZ?

 

Here's a ray of light. Emigration takes a really long time (unless you are hired by a firm that really needs you) so the planning and action can take a year or more. Getting your ducks in a row is a big and expensive job, so take your time with it, spread the cost, cover your bases (and something something more jargon) and then be ready to shift when the time is right.

 

You also make the time right yourself.

 

Of course, there is no denying that emigration is risky as a matter of course. It is now doubly so as we can expect a massive wave of unemployment which as WP says, will make it harder for emigres to find work.

 

Best of luck to you. 

[Wayne Potgieter]

I just saw "Port Hills" and instantly liked the post without the need to read any more of it, hahaha!

 

But yeah, when I lived there, the average house on my street in Huntsbury was around a shade over $1m.

 

But a $1m house there is 4 bed, 3 bath, architecturally designed, under 10yrs old, double glazed, seismically engineered and all that good stuff. Plus there's an awesome view of the city from up there, you're 400m from MTB trails (Rupaki, Crater Rim, and Bowenvale DH track), Victory Park MTB trails under 2km and less than 5km from the bike park. All within about 7km of the CBD.

 

It's pretty darn awesome!

 

Man, I'm getting jealous just thinking about it!

 

As for the dip in Central Otago house prices, I'm watching this eagerly too!

 

Unfortunately I can't work from anywhere, but if a nice property comes along for the right price, I'll be seriously tempted. Keep the Milford house, and do the Kiwi Boomer thing in 8-10yrs time (ie. sell the overpriced Auckland property and move to the countryside house, pay it off, and have a decent chunk towards retirement).

https://www.realestate.co.nz/3719134/residential/sale/4-pennine-way-huntsbury

 

This is nice...

[patches]

https://www.realestate.co.nz/3719134/residential/sale/4-pennine-way-huntsbury

 

This is nice...

 

     

 

This is seriously bad for me! I shouldn't look at your links! You have no idea how envious I am

 

 

AMAZING neighbourhood!

 

I used to live 1 street over at the little red X. The highlighted yellow part is an MTB trail that takes one to Summit road and even more trails!

 

And that price! Same thing in AKL would be double!