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

[patches]

Thoughts on buying houses in Orewa/Red Beach/Millwater/Milldale?

 

I work from home.

 

Also don't think you can go wrong. Some very nice new suburbs around Millwater. 

[Wayne Potgieter]

After a weekend of property hunting in the Silverdale/Red Beach/Millwater/Milldale area these are my observations.

 

1. Estate agents here suck. Worse than used car salesman that put banana skins in gearboxes. Totally one sided and blatantly obnoxious about putting their own needs in front of both the buyer and sellers. Apologies if anyone is related to an estate agent on this thread.

2. I looked in these areas 6 months ago and the average price has increased by about 20% and climbing. 

3. I really like the style of clean and modern houses and think I could quite comfortably live there.

4. Its far from Auckland, but not as far as Wanaka.

5. Land and build is the best option for us. Freedom to design what we like, no estate agents (see point 1) and the prices are still somewhat reasonable (as much as AKL houses can be)

6. Estate agents suck.

[intern]

After a weekend of property hunting in the Silverdale/Red Beach/Millwater/Milldale area these are my observations.

 

1. Estate agents here suck. Worse than used car salesman that put banana skins in gearboxes. Totally one sided and blatantly obnoxious about putting their own needs in front of both the buyer and sellers. Apologies if anyone is related to an estate agent on this thread.

2. I looked in these areas 6 months ago and the average price has increased by about 20% and climbing. 

3. I really like the style of clean and modern houses and think I could quite comfortably live there.

4. Its far from Auckland, but not as far as Wanaka.

5. Land and build is the best option for us. Freedom to design what we like, no estate agents (see point 1) and the prices are still somewhat reasonable (as much as AKL houses can be)

6. Estate agents suck.

7. Estate agents suck.

[davetapson]

After a weekend of property hunting in the Silverdale/Red Beach/Millwater/Milldale area these are my observations.

 

1. Estate agents here suck. Worse than used car salesman that put banana skins in gearboxes. Totally one sided and blatantly obnoxious about putting their own needs in front of both the buyer and sellers. Apologies if anyone is related to an estate agent on this thread.

2. I looked in these areas 6 months ago and the average price has increased by about 20% and climbing. 

3. I really like the style of clean and modern houses and think I could quite comfortably live there.

4. Its far from Auckland, but not as far as Wanaka.

5. Land and build is the best option for us. Freedom to design what we like, no estate agents (see point 1) and the prices are still somewhat reasonable (as much as AKL houses can be)

6. Estate agents suck.

Yeah, there are some dumb prices being paid at the moment.

 

Unfortunately they may become the baseline prices from now on (I was going to say 'going forward' but I hate it when people say that...)

 

We've decided our best option is buy land with some livable structure and live in that while building new house, or to watch auctions and then make cheeky offers on houses that get passed in.

 

There is a piece of ground in Dairy Flat we are looking at, has a clunky two bed house existing.  If we get it, we will live in that, build something nice on it, then rent existing house out to help pay for the entirety.  Currently rented at $450 which is a fair old chunk.

 

If you don't mink paying two rent/mortgage payments, or don't mind living in a caravan while building, there is an utterly stunning piece of land going in Dairy Flat - we nearly bit, but the magnitude is just beyond our energy at the moment. 

 

[DawieO]

Yeah, there are some dumb prices being paid at the moment.

Unfortunately they may become the baseline prices from now on (I was going to say 'going forward' but I hate it when people say that...)

We've decided our best option is buy land with some livable structure and live in that while building new house, or to watch auctions and then make cheeky offers on houses that get passed in.

There is a piece of ground in Dairy Flat we are looking at, has a clunky two bed house existing. If we get it, we will live in that, build something nice on it, then rent existing house out to help pay for the entirety. Currently rented at $450 which is a fair old chunk.

If you don't mink paying two rent/mortgage payments, or don't mind living in a caravan while building, there is an utterly stunning piece of land going in Dairy Flat - we nearly bit, but the magnitude is just beyond our energy at the moment.

 

That’s a nice spot. What is the indicative price? Edited November 1, 2020 by DawieO

[davetapson]

That’s a nice spot. What is the indicative price?

Agent reckons 900's, but it's so nice I think it will be 1M+

 

Depends on the day. 

 

Took my missus and fussy 21yo to show them and they just fell in love.  When I was there, the agent's comment was 'dont' come and see it if you don't have the cash, you'll just break your heart.'  Which is not far off.

 

The land is empty, you can just go look if you want.  I had a look at the title, looks like it is owned by an SA family - Visser.  Allegedly they were going to build a retirement home there, but that plan has fallen through.

 

Edit:

The aspect is generally south facing, but you can park your house on the highest point (basically on top of the olive trees  ) and design it to catch the heat from the north.  The property doesn't feel cold or damp.

 

Edit edit: those plots are planned for main dwelling, and secondary dwelling (i.e. granny flat.)  One option would be to go into partnership with a like minded individual and build the granny flat on top of a triple garage, which might just change shape once the CCC is issued, allowing two reasonable houses on one piece of land zoned for a major and minor dwelling.

Edited November 1, 2020 by davetapson

[hayleyearth]

Yip, house prices are going crazy at this moment. I think our will increase too after NZ opens up more to let immigrants in again...I think many people will want to move here now, even more than ever.

 

Everything we looked at at the start of the year is at least $200k up now.

 

We need/want to stay cycling distance from our work and schools, so we don't have many options to choose from.

[DawieO]

SOOO, who is coming to Rotorua this weekend for a bit of MTB’ing?

 

I am driving down Fri eve with another recently arrived MTB’er.

[patches]

Really getting insane now:

 

'Average' Auckland bungalow sells for $1.9 million, $500,000 above CV

 

Meanwhile, this is what slightly less will get you in Houghton

 

 

 

I know it's not comparing apples and apples, but makes one think!

[Wayne Potgieter]

SOOO, who is coming to Rotorua this weekend for a bit of MTB’ing?

 

I am driving down Fri eve with another recently arrived MTB’er.

I might be able to - just waiting on some information from a builder about a possible meeting with some designer dudes.

 

If that happens, then I am out. If it doesn't happen - then I am in!

[patches]

I was chatting to a colleague the other day regarding the house prices and the current surge. This was the train of thought.

 

Lets say I have save up $200,000. That's a fair amount of cash, but not impossible.

 

If I want to buy a house with that $200,000, the bank will lend me another $800,000 (providing lending criteria is met, and all that mumbo jumbo). Let's say at an interest rate of 3%.

 

If I buy a house for $1m, and over the space of a year it appreciates at 10%. Yes, that's high, but not impossible if one looks at the past year on Auckland's housing prices.

So not only has my $200,000 has made $20,000... sweet deal... BUT my borrowed $800k has gained $56,000 (10% increase minus 3% interest). So all in, I'm up about $76,000 (or $6333 pm) TAX FREE (equivalent of earning a salary of $102,000pa)

 

Yes, this is based on favourable interest and appreciation rates, and yes, rates, etc have not been taken into account.

But still... owning a home is almost a license to print money using mostly someone else's money.

 

Where else can you do that?!

 

No wonder there are cries for CGT and the like

 

*Disclaimer: I am by no means an economist, financial guru, or even a financially responsible adult    

Edited November 2, 2020 by patches

[patches]

SOOO, who is coming to Rotorua this weekend for a bit of MTB’ing?

 

I am driving down Fri eve with another recently arrived MTB’er.

 

Dammit, I wish!

 

I am conscripted to another weekend of installing gib. Plus I sold my soul to test a Pivot eBike at Woodhill on Saturday 

[intern]

SOOO, who is coming to Rotorua this weekend for a bit of MTB’ing?

 

I am driving down Fri eve with another recently arrived MTB’er.

 

 

I'll be there on Saturday; Sunday I am playing golf with one of my neighbours...

[Wayne Potgieter]

I was chatting to a colleague the other day regarding the house prices and the current surge. This was the train of thought.

 

Lets say I have save up $200,000. That's a fair amount of cash, but not impossible.

 

If I want to buy a house with that $200,000, the bank will lend me another $800,000 (providing lending criteria is met, and all that mumbo jumbo). Let's say at an interest rate of 3%.

 

If I buy a house for $1m, and over the space of a year it appreciates at 10%. Yes, that's high, but not impossible if one looks at the past year on Auckland's housing prices.

 

So not only has my $200,000 has made $20,000... sweet deal... BUT my borrowed $800k has gained $56,000 (10% increase minus 3% interest). So all in, I'm up about $76,000 (or $6333 pm) TAX FREE (equivalent of earning a salary of $102,000pa)

 

Yes, this is based on favourable interest and appreciation rates, and yes, rates, etc have not been taken into account.

 

But still... owning a home is almost a license to print money using mostly someone else's money.

 

Where else can you do that?!

 

No wonder there are cries for CGT and the like

 

*Disclaimer: I am by no means an economist, financial guru, or even a financially responsible adult    

There is an article floating around from January 2020 that says that the highest increasing neighbourhood from 2010 to 2020 was Silverdale with a 300% growth in median value over those ten years.

 

At this point, in 2020 it has softened a little and is currently on 7%, of which 2.7% growth has happened since Covid began.

 

Assuming a drop from the current trend of 14% per annum drops to 8% per annum, the median price increased from $275,000 in 2010, to $1,255 today (this reflects what I have seen myself over the weekend and are the properties I am looking to buy) then we decrease the rate of growth to a total thumbsuck of 8%, the same property increases to $2.8m in 2031.

 

Now if these forward focussed figures are even remotely accurate, thats quite scary.

 

Sure, a lot can happen between now and then, we could even see significant downturn, but the last ten years worth of growth is pretty scary for my risk averse south african brain.

[patches]

There is an article floating around from January 2020 that says that the highest increasing neighbourhood from 2010 to 2020 was Silverdale with a 300% growth in median value over those ten years.

 

At this point, in 2020 it has softened a little and is currently on 7%, of which 2.7% growth has happened since Covid began.

 

Assuming a drop from the current trend of 14% per annum drops to 8% per annum, the median price increased from $275,000 in 2010, to $1,255 today (this reflects what I have seen myself over the weekend and are the properties I am looking to buy) then we decrease the rate of growth to a total thumbsuck of 8%, the same property increases to $2.8m in 2031.

 

Now if these forward focussed figures are even remotely accurate, thats quite scary.

 

Sure, a lot can happen between now and then, we could even see significant downturn, but the last ten years worth of growth is pretty scary for my risk averse south african brain.

 

I did some basic sums (the financial types on here will cringe), but here's a basic outline for getting a sweet batch on the South Island   

 

 

Referring to the above, lets say one buys an Auckland property for $1,000,000 with a 20% deposit.

They then pay down the principle at 3.5% pa (achievable, at about a 20 yr rate).

Then taking into account an appreciation in value of 5% (not unrealistic).

 

After 5 years (not that long) they would be in a position to leverage about $416,000 of equity to purchase a second property, which if a 40% deposit (conservative) is required, that gives them approx. $1,040,000 of buying power.

 

So yeah, that's my basic plan. 1.5yrs down, 3.5 to go 

[NotSoBigBen]

Dammit, I wish!

 

I am conscripted to another weekend of installing gib. Plus I sold my soul to test a Pivot eBike at Woodhill on Saturday

*scratches Patch's name off the Xmas card list*