# Do house prices worry you?



## Paddy234 (Aug 10, 2015)

With the current bubble building up in the housing market in Auckland and with Christchurch houses very over priced also are you not worried how the New Zealand economy will cope when it bursts. Too many Kiwis live in fantasy land i believe where they don't understand that the boom in Christchurch is not due economic growth but a temporary rebuild which could leave thousands jobless when it dies down. Then what? I love NZ but am somewhat not sure over the next few years what will happen


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## escapedtonz (Apr 6, 2012)

I hear you and haven't considered it from the point of view of a person living and working in Christchurch. Yes the rebuild is temporary, as one day it will be completed, however regular reports state the rebuild will be ongoing for at least 15 years so plenty of time for people to carve out a career during those years and consider what they will do when the work slows. It won't just come to a stop one day. There will be plenty of signs showing work trends are reducing.

I'm worried about the house prices where I live up in Tauranga and it's all due to the housing issues in Auckland. Many people there just can't afford to buy a house, so they are realizing that they can get more for their money away from Auckland and just live in Auckland during the week and travel back home for the weekend. The ball has started rolling with investment in homes South of Auckland right down to the Bay Of Plenty. This is pushing house prices up in the Bay and as of now we've realized probably can't afford the house and land we want in Bethlehem. We could have done a year ago but weren't in a position to purchase then. The prices have just rocketed recently and are going for 100k to 200k above RV. Just ridiculous but it is what it is and there's nothing we can do about it.
This is forcing us to look further out of where we'd ideally like to be which is the compromise but at least we can still afford the property we want in those places (at the moment). We're eager to get on the hosing market asap as house prices will only get higher for the foreseeable future.
Luckily we have a lot of cash in GBP's ready for transfer into NZD and are just holding off till we feel the rate is right for us. Experts are predicting another 50 points off the OCR rate by the end of this year and mortgage deals will start with a 3, so we are keen to wait a few months longer to get the best possible exchange rate for our money and the lowest possible mortgage when we do buy.


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## Paddy234 (Aug 10, 2015)

escapedtonz said:


> I hear you and haven't considered it from the point of view of a person living and working in Christchurch. Yes the rebuild is temporary, as one day it will be completed, however regular reports state the rebuild will be ongoing for at least 15 years so plenty of time for people to carve out a career during those years and consider what they will do when the work slows. It won't just come to a stop one day. There will be plenty of signs showing work trends are reducing.
> 
> I'm worried about the house prices where I live up in Tauranga and it's all due to the housing issues in Auckland. Many people there just can't afford to buy a house, so they are realizing that they can get more for their money away from Auckland and just live in Auckland during the week and travel back home for the weekend. The ball has started rolling with investment in homes South of Auckland right down to the Bay Of Plenty. This is pushing house prices up in the Bay and as of now we've realized probably can't afford the house and land we want in Bethlehem. We could have done a year ago but weren't in a position to purchase then. The prices have just rocketed recently and are going for 100k to 200k above RV. Just ridiculous but it is what it is and there's nothing we can do about it.
> This is forcing us to look further out of where we'd ideally like to be which is the compromise but at least we can still afford the property we want in those places (at the moment). We're eager to get on the hosing market asap as house prices will only get higher for the foreseeable future.
> Luckily we have a lot of cash in GBP's ready for transfer into NZD and are just holding off till we feel the rate is right for us. Experts are predicting another 50 points off the OCR rate by the end of this year and mortgage deals will start with a 3, so we are keen to wait a few months longer to get the best possible exchange rate for our money and the lowest possible mortgage when we do buy.


Are you not worried about buying in a bubble period that when the prices drop you will be in negative equity? Or are you just gonna buy in an area that isn't really affected by the bubble? Thankfully Christchurch's house prices have stopped rising and in some cases prices are falling but they are still way over priced for what you are buying. What's worse is no Kiwi believes the prices will drop. They are convinced that they will level out and only rise in the future. This is madness as house prices in Christchurch are nearly 5 times the average income based on two earners.

I have lived here for 2 years now and recently applied for residency. My girlfriend is a Kiwi and we are looking to buy next year but based on both our incomes which is quite good to be able to get a 20 year mortgage in this market and with the cost of rates, bills etc we would be struggling. I wonder how families with Kid's do it. Suppose yearly holidays are out of the question. It does make me think that the economy is bound for a drop. Only one way to avoid this in my opinion and that is for economic growth through much larger numbers of migrants


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## escapedtonz (Apr 6, 2012)

Paddy234 said:


> Are you not worried about buying in a bubble period that when the prices drop you will be in negative equity? Or are you just gonna buy in an area that isn't really affected by the bubble? Thankfully Christchurch's house prices have stopped rising and in some cases prices are falling but they are still way over priced for what you are buying. What's worse is no Kiwi believes the prices will drop. They are convinced that they will level out and only rise in the future. This is madness as house prices in Christchurch are nearly 5 times the average income based on two earners.
> 
> I have lived here for 2 years now and recently applied for residency. My girlfriend is a Kiwi and we are looking to buy next year but based on both our incomes which is quite good to be able to get a 20 year mortgage in this market and with the cost of rates, bills etc we would be struggling. I wonder how families with Kid's do it. Suppose yearly holidays are out of the question. It does make me think that the economy is bound for a drop. Only one way to avoid this in my opinion and that is for economic growth through much larger numbers of migrants


Definitely going to buy in an area that is not affected by the bubble. There shouldn't be any risk of us going into negative equity. We'll have a 20% equity buffer anyway as at worst we'll be paying a 20% deposit. We are actually considering paying at least 25%, maybe up to 30% deposit......all depends how many NZD's we get for the GBP's.

The rest is all about living within your means depending on the salary earned and being cautious about what can happen in the future. Mortgages may rise etc. It's all about making money stretch as far as possible here. We are a family with kids and we do fine. We are renting at the moment which is easily affordable but we wish to pay our own mortgage not someone else's. We have a couple of cars, a motorbike, annual holidays and don't owe a cent as yet until we do buy a house. Just got to be aware of the extra costs when the house is your own - e.g. annual rates and buildings insurance.
We are looking forward to owning our own home here and for me it can't happen soon enough as I'm sick of renting.


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## jawnbc (Apr 28, 2012)

Auckland isn't a bubble. It's a dearth of new building and a growing population--with lots of newcomers better resourced to pay more. It can't continue to go up indefinitely, but until we're adding 10k or more houses (not apartments), prices will continue to go up.


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