[mattnzParticipant@mattnzJoin Date: 2007Post Count: 574]

March 24, 2009 - 5:34 am

What you are suggesting is actually what I heard Steve recommending.

He said don't try to pick the bottom of the market, wait for the bottom to be confirmed, (expecting we would only know 6 months after it has happened) and that would be the best time to enter, at the start of the next growth phase.

My concern is more how much potential growth is there, peoples incomes arent keeping up with asset prices, there is no growth potential without high inflation and wage growth.

[mattnzParticipant@mattnzJoin Date: 2007Post Count: 574]

March 23, 2009 - 1:43 pm

Its the same story in the luxury rental market in the CBD.

I have been looking into 2 bed apartments to purchase in the 550-600k range.

At the weekend I went to a rental open home to see what demand was like, it had been on the market 2 weeks at $720/week and I was told that they would take $680 per week. I was the only person at the open home.

It was a beautifully furnished (leather lounge suite, 40+ inch tv screen and the all rest) with views over Hyde Park, the Cathedral and over Sydney Harbour.

The properties I was looking at were inferior to this one, but have been rented at $720-800 to the current tenants. It seems that these rents that made them cashflow positive are no longer available as the execs are no longer getting top jobs in Sydney.

[mattnzParticipant@mattnzJoin Date: 2007Post Count: 574]

March 19, 2009 - 8:35 pm

If they put the court order in place you will never get them into a retirement home, they will fight you to the death (most likely theirs given their age). You need to figure out if the price is cheap enough, combined with the tax benefits of negative gearing of the property are enough to make it worth holding for the next 30 years. Also keep in mind that if you sell before then it will be very hard to find a buyer.

[mattnzParticipant@mattnzJoin Date: 2007Post Count: 574]

March 19, 2009 - 11:24 am

I just came across this article in Perth now.

http://www.news.com.au/perthnow/story/0,21598,24207506-5013244,00.html

Try calling the guy on the number at the bottom of the page.

[mattnzParticipant@mattnzJoin Date: 2007Post Count: 574]

March 19, 2009 - 9:27 am

I suggest you check out this website. If you take their equity it would be a silent partner rather than one you could have disagreements with.

http://www.efm.info/index.php?v=Home

[mattnzParticipant@mattnzJoin Date: 2007Post Count: 574]

March 14, 2009 - 1:01 pm

In the current market conditions the most likely reason for interest rate rises is if the rest of the world decides it is too risky to lend to us at low interest rates. In that scenario expect house prices to collapse as house loans will be very hard to come by and only under  very tight conditions as credit is rationed.

[mattnzParticipant@mattnzJoin Date: 2007Post Count: 574]

December 31, 2008 - 4:31 am

A scary story of stupidity appeared in the Australian Property Investor in Nov 2008. They are a couple in their mid-twenties who have "retired" on their property portfolio using an amazing strategy.

From page 51 "While the interest payments on their loans eat up the rental income, Rob and Kylie use their equity to fund any shortfall, as well as their living expenses, refinancing their properties up to 82% loan to value ratio and using low-doc equity loans. These loans may not be around for much longer, but for now the strategy is working."

LOL!! Couldn't believe that this was their amazing strategy, especially in the current environment. Retire and live on our 18% equity in our portfolio, based on our property continuing to increase in value, faster than we can spend the money.

I hope Geoff Doidge does a follow-up article on them in a year's time, "Bankrupt and stupid". An experienced person like him should know better.

[mattnzParticipant@mattnzJoin Date: 2007Post Count: 574]

July 24, 2008 - 1:17 pm

I was thinking of a similar thought recently to redress the balance, but instead of a home owner CGT I was thinking they should remove the negative gearing benefits of investment properties.

I can see a big issue with CGT on your own home. Imagine if you buy a house for 300k, 20 years later it is worth 1 million. You want to shift to another suburb in the same city to move into another house also worth 1 million and get charged 40% of 350k = 140k CGT PLUS have to pay maybe another 50k in stamp duty on top of your real estate agents fees, maybe another 30k.

In total to switch houses of exactly the same value you lose 220k = 22% of the value!!

In the USA they have this interest deduction from your tax bill and i see it as a key contributor to the mortgage crisis. Everyone borrowed to the hilt against the value of their house to take advantage of these benefits. Would anyone ever even try to pay off their house and therefore lose their tax benefits? Of course not.

[mattnzParticipant@mattnzJoin Date: 2007Post Count: 574]

July 24, 2008 - 12:56 pm

Agree with everything you say condog.

Does anyone know of any lenders that will allow you to borrow in foreign currency against nz houses? I have found them for Australia but not in nz. I want to wait for the nzd to bottom out then borrow in a range of foreign currencies, then sell out  in a few years when the exchange rate is high again.

[mattnzParticipant@mattnzJoin Date: 2007Post Count: 574]

July 24, 2008 - 8:11 am

I should also mention that NZ interest rates dropped today for the first time in 5 years. Expected to lower the official cash rate from 8.25% to 6.75% in the next couple of years.

[mattnzParticipant@mattnzJoin Date: 2007Post Count: 574]

July 24, 2008 - 8:05 am

The same areas that I am looking at, which is why unfortunately I won't share my research or we (and the rest of the forum) would be competing over some of the same properties. I would like to build a portfolio of about 10 properties in NZ over the next 3 years.

I found your website to be interesting reading. I wasn't aware that such arbitrage opportunities existed.

[mattnzParticipant@mattnzJoin Date: 2007Post Count: 574]

July 23, 2008 - 11:50 am

No stamp duty or capital gains for a start. almost 1.3 times the buying power, great huh.

I think it will be slow the next couple of years, hopefully drop a bit even.

All other things being equal, in 2 years interest rates should have dropped, and the equivalent of the first home buyers grant will have started (3k per person for those in kiwisaver plus they can access their super savings and it accumulates for couples. Over the first 2 years of the grants they increase to 5k per person).

Basically the scenario will be similar to 2000 when Australia introduced the first home buyers grant and we know what happened for the next few years following. Its just a pity that NZ house prices are already so high which will limit the gains due to affordability issues.

Cheers,
Matt

[mattnzParticipant@mattnzJoin Date: 2007Post Count: 574]

May 15, 2008 - 12:01 pm

Are you able to subdivide the large block and sell the section to reduce debts and give him a deposit? If the figures are $250 per week rent there is no way that 450k should be tied up in it.

[mattnzParticipant@mattnzJoin Date: 2007Post Count: 574]

April 28, 2008 - 1:41 pm

Where are you finding properties in this price range as I can't see any advertised with land under 200k let alone 165k.

Thanks,
Matt