Property costs in NZ - the heart of evil

[Jantar]

The new loan to equity rules only apply to banks. There are other lenders out there who will still provide mortgage finance with smaller deposits.
e.g. http://www.resimac.co.nz/

[Brian d marge]

Sweet as, giz a job lol

-Indy

Jizz mopper in a nudie booth $ 8.50 an hour

Stephen

[avgas]

Anyone considered that this may be Basel III at work?

Yep. But with house prices where they are - houses are almost pure liquid. Ours sold in 6 days - I can't even forex to go liquid in that time.
I do laugh a little at the people crying about the 20% min standard. Morons never did the math.

Say you buy your first house @ 5% and pay it off over 30 years.........your going to have to sell for millions to make your money back. So in turn you make the market worse purely because you didn't save as much as you could beforehand. Idiots think these days you can save for a year a buy a house - you can't afford it if that is what you think it takes.......doesn't matter who gives you the loan.
Deposit takes about 7 years (roughly) so if you haven't been saving 7 years. You can't afford it.

[Indiana_Jones]

Say you buy your first house @ 5% and pay it off over 30 years.........your going to have to sell for millions to make your money back. So in turn you make the market worse purely because you didn't save as much as you could beforehand.

This is one of the problems with houses, people seem to think they're entitled to make a profit off it.

One house we looked at was bought by the current owners before the 'GFC' and had paid top dollar for it. The house has just got back to it's market value now, but they wanted more than that as they had paid 'X amount' and thus we have to make a profit.

Of course saying that it's worth what someone is willing to pay etc.

-Indy

[avgas]

This is one of the problems with houses, people seem to think they're entitled to make a profit off it.

One house we looked at was bought by the current owners before the 'GFC' and had paid top dollar for it. The house has just got back to it's market value now, but they wanted more than that as they had paid 'X amount' and thus we have to make a profit.

Of course saying that it's worth what someone is willing to pay etc.

-Indy

Don't forget the $20,000+ increase just to cover the agents fee's. So if you buy a house today, sell it tomorrow - its now $20,000 more expensive just to cut even.

[Winston001]

Yep. But with house prices where they are - houses are almost pure liquid. Ours sold in 6 days - I can't even forex to go liquid in that time.

Good on you but this illustrates the complete disconnect between Auckland and the rest of NZ, (although Christchurch is an anomaly).

The average time to sell across the whole country is 35 days. Manawatu 55 days, Southland 60 days, and Taranaki 50 days. In reality houses sit unsold in many places for months.

I don't know how we change but it seems incredibly inefficient to have houses going begging in some places while people take on telephone number mortgages to buy an old or very basic house in one area.

Say you buy your first house @ 5% and pay it off over 30 years.........your going to have to sell for millions to make your money back. So in turn you make the market worse purely because you didn't save as much as you could beforehand....
Deposit takes about 7 years...

True but oddly nobody ever seems to point out this basic fact.

One thing: everyone needs to live somewhere so inevitably they pay rent. Once you are settled might as well pay a mortgage.

[mashman]

Yep. But with house prices where they are - houses are almost pure liquid. Ours sold in 6 days - I can't even forex to go liquid in that time.
I do laugh a little at the people crying about the 20% min standard. Morons never did the math.

Say you buy your first house @ 5% and pay it off over 30 years.........your going to have to sell for millions to make your money back. So in turn you make the market worse purely because you didn't save as much as you could beforehand. Idiots think these days you can save for a year a buy a house - you can't afford it if that is what you think it takes.......doesn't matter who gives you the loan.
Deposit takes about 7 years (roughly) so if you haven't been saving 7 years. You can't afford it.

You'll get something decent for yer cash in the US by the looks of things . A nice white picket fence in the burbs.

There's that problem still lingering though. By the time you've saved 200k, you end up needing 300k for the deposit. One thing I do wonder, is that 20% based on the principle or the amount that will have been paid over those 30 years? I ask as once they have my 200k, don't they have a debt for approx 700k? After all they expect me to pay off the interest before I pay off the principle, on some form of sliding scale. I believe I start paying 50% principle and 50% interest at about the half way point of the mortgage.

[Ocean1]

One thing I do wonder, is that 20% based on the principle or the amount that will have been paid over those 30 years?

Neither, it's 20% of purchase price.

I ask as once they have my 200k, don't they have a debt for approx 700k?

No. You have a debt of whatever the mortgage is for. If you paid it back in a year you'd be paying back around 105% of the total loan.

And yes, table mortgages are weighted to pay more interest up front, more principle later. You don't have to have a table mortgage, but the cost will be different for other forms of loan.

[unstuck]

Should be signing up for house number 2 tomorrow, already has tenants who want to stay and are paying $250 pwk. Now I get to be the landlord from hell.

[mashman]

Neither, it's 20% of purchase price.

No. You have a debt of whatever the mortgage is for. If you paid it back in a year you'd be paying back around 105% of the total loan.

And yes, table mortgages are weighted to pay more interest up front, more principle later. You don't have to have a table mortgage, but the cost will be different for other forms of loan.

The purchase price? So I borrow 200k to buy a property at 500k and the bank has to keep 20% of the 500k and not of the 200k principle that I borrowed?

Providing your mortgage hasn't been sold on?

True.

[Woodman]

The purchase price? So I borrow 200k to buy a property at 500k and the bank has to keep 20% of the 500k and not of the 200k principle that I borrowed?

Providing your mortgage hasn't been sold on?

True.

You are confusing the living shitbags outta me.

If you have 20% deposit on a $500,000 house that is $100'000, so you only pay the interest per annum on the rest which is $400'000 less any principal paid depending on the type of mortgage. The deposit goes to the old owner of the house along wth the rest of the amount borrowed as the agreed purchase price of the house.

Or have I missed your point (possibly) again?

[mashman]

You are confusing the living shitbags outta me.

If you have 20% deposit on a $500,000 house that is $100'000, so you only pay the interest per annum on the rest which is $400'000 less any principal paid depending on the type of mortgage. The deposit goes to the old owner of the house along wth the rest of the amount borrowed as the agreed purchase price of the house.

Or have I missed your point (possibly) again?

I'm confusing myself enough at the moment. Was just wondering how much the bank would need to hold, but I'm off in captain tangent land in regards to Basel III and can't even blame beer... a loss of an hours sleep perhaps . I must be having my period, yeah, that's it.

No you haven't missed my point. I have

[BMWST?]

Good on you but this illustrates the complete disconnect between Auckland and the rest of NZ, (although Christchurch is an anomaly).

The average time to sell across the whole country is 35 days. Manawatu 55 days, Southland 60 days, and Taranaki 50 days. In reality houses sit unsold in many places for months.

I don't know how we change but it seems incredibly inefficient to have houses going begging in some places while people take on telephone number mortgages to buy an old or very basic house in one area.



True but oddly nobody ever seems to point out this basic fact.

One thing: everyone needs to live somewhere so inevitably they pay rent. Once you are settled might as well pay a mortgage.

true but the asking price is relevant .When we sold our last house we did some sums and came up with a figure we needed to go to the next one.It must have been the right number.House on Market Sunday afternoon for 1st open home 2pm .Sold Monday evening,a t 6 pm.Wellington

[Ocean1]

I'm confusing myself enough at the moment. Was just wondering how much the bank would need to hold, but I'm off in captain tangent land in regards to Basel III and can't even blame beer... a loss of an hours sleep perhaps . I must be having my period, yeah, that's it.

No you haven't missed my point. I have

You're obviously upset about Basel III, but as usual you don't quite know why.

It's easy, the GFC was caused by banks lending money to dodgy bastards that, unsurprisingly failed to pay it back.

In steps govt and says: Thou shalt not lend money to dodgy bastards, and thou shalt not wrap the dodgy loans in bright colours and flog them to even dodgier bastards in order to avoid the fallout. And to make sure you don't here's a few new rules for you.

It's essentially the opposite to what the US did to cause their share of the GDC, and that alone makes it a good idea.

Now fuck off and do some work you lazy dodgy bastard.

[Morcs]

slow down the population swelling. Less need for more housing. Stop immigration. Especially to the ones who dont speak english, and the island quotas. unless they are actually bringing money into the economy rather than taking it via prison accommodation and benefits.
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