Top 4 real estate sites in NZ including Trade Me & Open2View had increases in "Unique browsers "of between 29% & 31%. in January over December.
Yet January sales subdued.
Looking but not buying? Who knows. Cheap holiday entertainment?
Any opinions?
Saturday, February 20, 2010
House prices have doubled in the last 10 years
NZ house prices have more than doubled in New Zealand in 10 years. This is historically the norm.
From $174 000 in Nov 1999 to $355 000 in Nov 2009.
So for every 100% financed , self funding house you bought then you would on average have now got $175 000, tax free equity.
Makes you think.
From $174 000 in Nov 1999 to $355 000 in Nov 2009.
So for every 100% financed , self funding house you bought then you would on average have now got $175 000, tax free equity.
Makes you think.
Wednesday, January 27, 2010
Upcoming Series on Taxation and New Zealand Residential Real Estate
Effects of any tax changes will be the big housing issue this year. So I'm going to address its possible effects here over the near future.
Yes, These Are To Be the Topics.
How Do We Differ In Residential Property From Other Countries?
What Is The Result?
What Would Depreciation Changes Do? Who Would It Hurt?
Are Income Tax Reductions Likely To Balance Other Changes?
Why Are Mom and Dad Investors The Mainstay Of Our Rental Market?
What Is The Impact and Role Of Housing New Zealand ?
Demand For Housing Vs Supply.
Demand For Rental Housing Vs Supply.
Cost Of New House Build In NZ.
Cost & Supply of New Sections in NZ
Effect Of GST Increase On New & Existing House Values.
Realized Vs Unrealized Capital Gains Tax.
Capital Gains Tax: On All Property or Only Rental/ Investment. The Implications.
NZ Poor Superannuation Situation.
Would Renters Buy If Existing Landlords Exit?
Where Would Asset Reallocation Go, If Any?...Domestic share market?
...Domestic cash? Banks etc.
...Domestic direct investment in small business?
...Overseas ?
... Consumption?
Would These Changes Make New Zealand Richer?
So Now I will Have To Do It.
Yes, These Are To Be the Topics.
How Do We Differ In Residential Property From Other Countries?
What Is The Result?
What Would Depreciation Changes Do? Who Would It Hurt?
Are Income Tax Reductions Likely To Balance Other Changes?
Why Are Mom and Dad Investors The Mainstay Of Our Rental Market?
What Is The Impact and Role Of Housing New Zealand ?
Demand For Housing Vs Supply.
Demand For Rental Housing Vs Supply.
Cost Of New House Build In NZ.
Cost & Supply of New Sections in NZ
Effect Of GST Increase On New & Existing House Values.
Realized Vs Unrealized Capital Gains Tax.
Capital Gains Tax: On All Property or Only Rental/ Investment. The Implications.
NZ Poor Superannuation Situation.
Would Renters Buy If Existing Landlords Exit?
Where Would Asset Reallocation Go, If Any?...Domestic share market?
...Domestic cash? Banks etc.
...Domestic direct investment in small business?
...Overseas ?
... Consumption?
Would These Changes Make New Zealand Richer?
So Now I will Have To Do It.
Monday, December 28, 2009
Interesting Comments Out of Las Vegas.
This Is a Lot More Telling Than The Stuff Sunday Papers Truck Out!
Interesting commentary. Comparisons with Wellington scene now?
This reminds me of when the houses in Cromwell were being sold by the Ministry of Works at a rate of 60 a month, after the Clyde dam was finished. As soon as they sold them all prices went through the roof. Supply & demand.
Note the description of the banks sales process. Its described as if its something radical . It may be for the American market. Here in New Zealand most good salespeople would say they are following a sensible, normal approach !
And note comment on the "out of town investors" philosophy.
"The economic law of supply and demand says that when demand increases and supply falls, prices are sure to rise. Apparently that law has an asterisk that says “except for Las Vegas.”
For months now I’ve been hearing about how brisk sales have been, especially in the REO, or foreclosure, market. Looking at the numbers you will see that the available supply has been steadily trending down and sales have been setting all-time records. A bank puts an REO on the market and within days there are multiple offers on the property. So why are prices still falling?
On The Street
One realtor that I know specializes in these REO properties. What he sees are a lot of cash buyers from other areas stepping in. That would seem to mean that investors are seeing the value while local buyers are still gun-shy. Are they missing a golden opportunity?
He told me a story last week of an out of state investor who made an all-cash offer for 10% below the listed price on an REO. He warned him that he had virtually no shot at that deal. His buyer said, “but it’s all-cash.” The agent’s response was “so is everybody else’s offer.” Sure enough that REO was in a multiple offer situation and sold for about 10% more than the listed price on a 100% cash deal. He went on to say that the standard practice for the banks is to place a property on the market at a price that is lower than they expect to get. After a number of offers come in they counter by asking the buyers for their “highest and best” offer. The banks seem to have hit on a winning formula for liquidating properties.
The REO Myth
I have been asking a lot of veteran real estate agents and seasoned investors why prices are still falling. It would seem that a number of people think that there is going to be another wave of foreclosures that will be a tsunami that will cause prices to fall even further. Another opinion is that banks are sitting on a significant number of foreclosures and are releasing them piecemeal in order to keep prices from collapsing altogether.
Will there be another wave of foreclosures? Perhaps, more likely than not it will simply be a continuation of the wave we’ve been riding out for some time now. In the Las Vegas market demand has been outpacing supply for a while now, can that much more supply suddenly hit?
As for the theory that banks have all of these properties hidden under a tarp somewhere I say simply, where are they? These banks are public corporations and their assets are not invisible. If they were there someone would have found them by now.
The Smart Money
Are all of these cash investors wrong? I have a feeling that they’re not. Las Vegas prices have fallen so far below replacement cost that it would seem that they are significantly undervalued. For the longest time it had been virtually impossible to get a property to cash flow in the Las Vegas market, now it is a piece of cake. How much longer before everybody else notices?"
Heres the source of the article:
http://www.biggerpockets.com/renewsblog/2009/09/14/las-vegas-record-sales-dwindling-supply-why-are-prices-still-falling/
Interesting commentary. Comparisons with Wellington scene now?
This reminds me of when the houses in Cromwell were being sold by the Ministry of Works at a rate of 60 a month, after the Clyde dam was finished. As soon as they sold them all prices went through the roof. Supply & demand.
Note the description of the banks sales process. Its described as if its something radical . It may be for the American market. Here in New Zealand most good salespeople would say they are following a sensible, normal approach !
And note comment on the "out of town investors" philosophy.
"The economic law of supply and demand says that when demand increases and supply falls, prices are sure to rise. Apparently that law has an asterisk that says “except for Las Vegas.”
For months now I’ve been hearing about how brisk sales have been, especially in the REO, or foreclosure, market. Looking at the numbers you will see that the available supply has been steadily trending down and sales have been setting all-time records. A bank puts an REO on the market and within days there are multiple offers on the property. So why are prices still falling?
On The Street
One realtor that I know specializes in these REO properties. What he sees are a lot of cash buyers from other areas stepping in. That would seem to mean that investors are seeing the value while local buyers are still gun-shy. Are they missing a golden opportunity?
He told me a story last week of an out of state investor who made an all-cash offer for 10% below the listed price on an REO. He warned him that he had virtually no shot at that deal. His buyer said, “but it’s all-cash.” The agent’s response was “so is everybody else’s offer.” Sure enough that REO was in a multiple offer situation and sold for about 10% more than the listed price on a 100% cash deal. He went on to say that the standard practice for the banks is to place a property on the market at a price that is lower than they expect to get. After a number of offers come in they counter by asking the buyers for their “highest and best” offer. The banks seem to have hit on a winning formula for liquidating properties.
The REO Myth
I have been asking a lot of veteran real estate agents and seasoned investors why prices are still falling. It would seem that a number of people think that there is going to be another wave of foreclosures that will be a tsunami that will cause prices to fall even further. Another opinion is that banks are sitting on a significant number of foreclosures and are releasing them piecemeal in order to keep prices from collapsing altogether.
Will there be another wave of foreclosures? Perhaps, more likely than not it will simply be a continuation of the wave we’ve been riding out for some time now. In the Las Vegas market demand has been outpacing supply for a while now, can that much more supply suddenly hit?
As for the theory that banks have all of these properties hidden under a tarp somewhere I say simply, where are they? These banks are public corporations and their assets are not invisible. If they were there someone would have found them by now.
The Smart Money
Are all of these cash investors wrong? I have a feeling that they’re not. Las Vegas prices have fallen so far below replacement cost that it would seem that they are significantly undervalued. For the longest time it had been virtually impossible to get a property to cash flow in the Las Vegas market, now it is a piece of cake. How much longer before everybody else notices?"
Heres the source of the article:
http://www.biggerpockets.com/renewsblog/2009/09/14/las-vegas-record-sales-dwindling-supply-why-are-prices-still-falling/
Sunday, December 27, 2009
No, This is Bad News
Sunday Paper Picks 2010 Good to Buy Holiday Home.
Why bad?
On Colins non scientific, 20 year observation of real estate trends, there is only one barometer to watch more closely than the Listener. ( That publication is always soooo wrong, investors should subscribe to see whats about to not happen)
And that market indicator? The Sunday paper banner headlines.
Why watch them for guidance? Because without fail, what they say is the opposite of what is going to unfold in the future. DOING THE OPPOSITE OF WHAT THEY SAY TO DO IS A GOOD IDEA! Yes, you cant go wrong.
So sorry, bad year for buying holiday homes.
Why bad?
On Colins non scientific, 20 year observation of real estate trends, there is only one barometer to watch more closely than the Listener. ( That publication is always soooo wrong, investors should subscribe to see whats about to not happen)
And that market indicator? The Sunday paper banner headlines.
Why watch them for guidance? Because without fail, what they say is the opposite of what is going to unfold in the future. DOING THE OPPOSITE OF WHAT THEY SAY TO DO IS A GOOD IDEA! Yes, you cant go wrong.
So sorry, bad year for buying holiday homes.
Monday, December 14, 2009
Why Real Estate in NZ is Like Lady Di
An influential Journalist blew me away with the revelation of where these unqualified, dodgy and sensational stories are coming from. Especially in the Sunday papers.
He said to me "in New Zealand, real estate has the "lady Di " factor to Newspaper editors...put it on the front page and the sales will spike up"
What more needs said?
He said to me "in New Zealand, real estate has the "lady Di " factor to Newspaper editors...put it on the front page and the sales will spike up"
What more needs said?
The Value Of Homestaging
I feel more and more strongly this is worth doing when you sell.
Its been a struggle to quantify what value it adds, in numbers. Because you cant sell the same house twice!
However I just saw some US figures, from StagedHomes.com. Their survey. Selling in 30 days vs average 60. Median 6.8% more. 6.8% .... wow! That would be like $35 000 more, on an average house in Wellington!
Certainly I feel apartments in Wellington that are not presented to "homestaged" standards will not only sell at discount, but they are virtually unable to be sold at any price, certainly those under $500 000.
This photo is of something I sold recently, homestaged. Dosnt it just look desirable?
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