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Auckland 'investors' Shocker

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New Zealand an agent seems astonished that overpriced flats fail to sell. Expect these headlines in the UK when the new build flippers wake up and smell the coffee.

Auckland's inner-city apartment prices look to be falling after a failed auction this week left vendors with unsold units and an industry chief astonished at the $3 billion sector's quick reversal of fortunes.

The bulk auction of inner-city units left agents hugely disappointed with a result that they called appalling.

"Some of the units are brand new but the vendors are freaked out about the market. They have decided they weren't very wise to buy and are dumping them for less than what they paid," Mr Dunn said.

"I'm not allowed to say what the reserves are but they are well below what people paid and they still failed to attract a bid, which has got me rather despondent, so we're telling vendors they will have to accept even less," Mr Dunn said

Some studio unit sales in the building had showed a 54 per cent drop in value. Units that had been selling for $200,000 were now fetching under $130,000, despite the fact they generated $300 rent a week and were in a desirable building.

Auckland flat auction

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New Zealand an agent seems astonished that overpriced flats fail to sell. Expect these headlines in the UK when the new build flippers wake up and smell the coffee.

Auckland flat auction

Imagine the reaction in the UK to newspapers headlines that screamed new units had dropped 54% in value.Press that panic button!

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It is starting to happen here too on a lesser scale - I STR 4 months ago and moved in to a new development of apartments. The developers are desperately trying to shift the properties which after 8 months have been reduced by up to -15% with stamp duty paid with motgage fees paid etc etc and then still subject to a 'deal'

Last week they held a promotion evening complete with live music and catering for prospective buyers - the band played on and nobody arrived, seriously embarrasing for them. The sales ladies were left scratching their heads and wondering what they did wrong........perhaps it was the food?

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No, no, you don't understand. House prices don't go down, they only go up.

Silly people...

Of course, silly me, i totally forgot....must get on the housing ladder......must get on the housing ladder....GOTTA GET ON THE HOUSING LADDER...DON'T LEAVE ME BEHIND....etc.....

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I'll be honest - I almost bought an investment apartment in Auckland 2 years back. I actually visited the site mentioned in this story. Luckily I passed. I just couldn't figure out where the tenants were going to come from - even then I couldn't make the numbers stack up... And many of these places are very, very small. That was my one and only attempt at becoming a landlord...BUT I do recall being in the show appartments on some of these developments on a weekend and, believe me, people were queing up to sign...

I recall speaking up during a sales presentation at the site office - about 50 people in the room and I asked a silly question like "what makes you think these apartments will always increase in value each year?" - the entire roomed looked at me like I was a bloody idiot.

I haven't got the figures to hand but in period of 2-3 yrs something like 16-20,000 units were built in Auckland centre. I think most people were hoping to rent them to Chinese students... but even then overseas student numbers were falling...

Alan.

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Wake up call for the global BTLer.......prices can go down, A LOT!!

:lol:

Quite right - stuff yer rabbit hutches! <_<

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Of course, silly me, i totally forgot....must get on the housing ladder......must get on the housing ladder....GOTTA GET ON THE HOUSING LADDER...DON'T LEAVE ME BEHIND....etc.....

I know. I'm just so hanging for some negative equity :lol:

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Let's see...

So far it's been New Zealand first, then Australia, then the UK, then the US with events in this house price bubble / crash.

So NZ looks to be in full swing with the crash. So if the pattern continues then Australia is next and after that comes the UK. So all eyes on Sydney...

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OK -calm down.

I'm from Auckland and now live in Sydney so I can speak of some authority.

It seems common people extrapolate a bit of news to justify their market feelings of a HPC - but what good is it if the news is unqualified and inaccurate?

Here are the facts:

Auckland central apartment market. 8000 came on stream in last couple of years. They are SHOE BOXES built for - you guessed it - Asians. The Asian students which previously crammed New Zealand universities and English schools have left and gone to China - why? 1: because they now have decent schools in China and 2: because NZ English schools got a rap for a being a bit of a rip-off with poor standards. Consequently - Asian numbers studying in Auckland fell something like (and I'm not far off) 30-40% over last two years. This is why these 25-30sq m shoe boxes and crapping themselves price wise.

Auckland is STILL going up in price - this is just inner city apartments that no self respecting Euro would live - and I'm not being racist - we're just not used to that kind of living.

Sydney - price are still stupid and I'll be waiting a long time - my guess 2006 it will hit hard with a bottom 2008-2010.

In any case - I'm praying for prices to fall but lets not get carried away with articles that from afar (UK) make sense but in fact are just micro supply/demand issues. Try buying a sea view place in Sydney and they're still going up - out west in the hinterland - sure - prices have come off.

Anecdotal - business friend of mine paid 720,000 2 years ago - just sold 2 weeks ago for 560,000. This property is a 4 bedroom but has no views etc - so yes price have taken a pounding where there is no differentiation from other properties.

:)

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"Now is the time to buy if you want a bargain – not in six months' time."

BS In six months time the price would have dropped again

NZ started their RE bubble after Oz. Perhaps, being a smaller country (population) they ran out of bigger fools sooner?

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There has been a high correlation between immigration and house price inflation in New Zealand. The total population in New Zealand is around 4 million, and there have been, say, 100,000 Chinese immigrants arriving in the last couple of years (my figures are by no means accurate). This might not seem like a lot, but considering that the average net worth of a Kiwi in the 20-40 bracket is about $50,000, and the average Chinese immigrant (due to strict Ministry guideliness, has a net worth of (I am making this up), say $NZ500,000, then the impact on the market would as if a million Kiwis had arrived (in terms of purchasing power).

The result: housing prices through the roof in Auckland. Lots of Kiwi retirees taking the cash and moving to small country towns, pushing up the price of housing there (re Nelson and Alexandria).

The University of Auckland commerce courses are full of Chinese. What a cash cow for the University!

Not nearly enough Japanese, though.... (And I get paid in yen. Damn the high NZ dollar..... (Ouch!))

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There has been a high correlation between immigration and house price inflation in New Zealand. The total population in New Zealand is around 4 million, and there have been, say, 100,000 Chinese immigrants arriving in the last couple of years

It's not only the Chinese. Lots of Brits have been selling up in the UK and bringing their high house prices to NZ. (see the Expats site for instance)

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I know lots of Kiwis who made serious money in UK IT and buggered off back to NZ to buy land and build houses back around 2001/02.

This wasn't just in IT - Kiwis contractors were over here for all types of professional work whilst the job market was very hot between 1999 - 2001. The exchange rate then was about 3.3 NZD/ £, now around 2.6.

Young Kiwi accountants (mid -twenties) were able to pick up temping work at £30 per hour on working holiday visas and worked through their own limited companies. Many left the country before paying the tax bill. Whereas previously the intention had been to have fun in London and save a bit of money before going backpacking, when the London temping rates increased and the NZ dollar was very weak many Kiwis decided to save hard to pay off a mortgage at home. A number of my colleages at that time did just that.

They worked hard and lived in fleapits, but with two years effort had paid off family sized houses.

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OK -calm down.

I'm from Auckland and now live in Sydney so I can speak of some authority.

It seems common people extrapolate a bit of news to justify their market feelings of a HPC - but what good is it if the news is unqualified and inaccurate?

Here are the facts:

Auckland central apartment market. 8000 came on stream in last couple of years. They are SHOE BOXES built for - you guessed it - Asians. The Asian students which previously crammed New Zealand universities and English schools have left and gone to China - why? 1: because they now have decent schools in China and 2: because NZ English schools got a rap for a being a bit of a rip-off with poor standards. Consequently - Asian numbers studying in Auckland fell something like (and I'm not far off) 30-40% over last two years. This is why these 25-30sq m shoe boxes and crapping themselves price wise.

Auckland is STILL going up in price - this is just inner city apartments that no self respecting Euro would live - and I'm not being racist - we're just not used to that kind of living.

Sydney - price are still stupid and I'll be waiting a long time - my guess 2006 it will hit hard with a bottom 2008-2010.

In any case - I'm praying for prices to fall but lets not get carried away with articles that from afar (UK) make sense but in fact are just micro supply/demand issues. Try buying a sea view place in Sydney and they're still going up - out west in the hinterland - sure - prices have come off.

Anecdotal - business friend of mine paid 720,000 2 years ago - just sold 2 weeks ago for 560,000. This property is a 4 bedroom but has no views etc - so yes price have taken a pounding where there is no differentiation from other properties.

:)

We lived in a waterfront apartment in Auckland 2001/2 when the property was worth $500,000, it is now on the market for $600,000 we would be interested in buying it for $350,000 as an investment will just wait and see.

We are off to Sydney in July 2006 and I would like to buy asap, not sure whether a desire to have our own roof over our heads will mean that we can wait. The Sydney falling market signs don't seem to be as obvious as they are here.

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It's already happened in the Docklands, although not quite 54%, more like 15-20% in the last year. An article in BBC mentioned there was a huge oversupply of two bed flats in the Docklands at the moment. I can imagine this is much the same in cities across the country. They might be on the market for £160-k200 now, but when they realise the joint income of most of the potential buyers is more like k40, they'll be lucky if they see k120. In fact I reckon these 2 bed flats will become a by-word for investment muppetry and will actually become a real bargain in a year or two's time, and the press will be saying 'those in the know' shouldn't touch them with a barge pole...which is the perfect time to buy as many as you can get your hands on!

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Young Kiwi accountants (mid -twenties) were able to pick up temping work at £30 per hour on working holiday visas and worked through their own limited companies. Many left the country before paying the tax bill.

Nice to see it's not just rich Russians who are ripping-off the UK taxpayer.

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OK -calm down.

I'm from Auckland and now live in Sydney so I can speak of some authority.

It seems common people extrapolate a bit of news to justify their market feelings of a HPC - but what good is it if the news is unqualified and inaccurate?

Here are the facts:

Auckland central apartment market. 8000 came on stream in last couple of years. They are SHOE BOXES built for - you guessed it - Asians. The Asian students which previously crammed New Zealand universities and English schools have left and gone to China - why? 1: because they now have decent schools in China and 2: because NZ English schools got a rap for a being a bit of a rip-off with poor standards. Consequently - Asian numbers studying in Auckland fell something like (and I'm not far off) 30-40% over last two years. This is why these 25-30sq m shoe boxes and crapping themselves price wise.

Are these by any chance the stuff in the full page (Sydney) Sunday Telegraph advertisements I've been noticing for the last couple of months?

If so, I know a wannabe property tycoon at work (IT contractor, as it happens) who just got seriously burned.

:o:o:o

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Tenants shun CBD’s shoebox apartments

01.11.05

By Anne Gibson

Vacancy rates in Auckland’s inner-city apartments are rising and rents are dropping, leaving some investors’ family homes at risk.

About 1500 of the city’s 11,500 units are empty, unable to draw tenants even at rock-bottom rents, says a report by property-market analyst Kieran Trass of Hybrid Group and Leonie Freeman of Interactive Property Management.

"The short-term view for Auckland’s CBD apartment market over the next few years looks grim," he said, predicting that many would stay empty for the next five years.

One Timaru investor who paid $212,000 for an Altitude unit on the corner of Hobson and Kingston Sts had been searching for a tenant since June, having been told he could expect $500 rent a week, Mr Trass said. He dropped that to $265 a week and still the unit was empty.

"He’d be lucky to sell it for $150,000 now," Mr Trass said

Crash

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  • 302 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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