NZ bubble is about to burst?

Why buy OS when there is so much here and have the benefit of local knowledege.

Lots of +cf props NSW Country. Hard work is done. Nick 0414 274 495
[email protected]

I have also been doing loads of research into the NZ market (and bought a couple), and what I have found is that the capital cities have just about had it, but the areas a couple hours out of the capital cities look set to boom. You can get rental yields of up to 12% and if NZ is anything like Aus was (which it usually seems to follow), these should boom soon.

A useful link you might want to check out is http://www.positivelygeared.com.au. They basically do all the due dilligence, and come back to you with a report, and you decide to buy or not.

Dan.

If you want an extraordinary life you have to be prepared to do things that ordinary people aren’t prepared to do.

Tasman said –
<<<<By being slightly less picky I am now finding great deals with +CF >>>>

I am a long term property investor – I am not going to be less picky. If something is showing a good return in this market – there must be some risk associated with it. Be it location, type of property or tenants etc.

I am sitting patiently for future ve+ when a market correction starts to take place.

vindication for what I have been bleating on about for the last year:

“Provincial centres and rural areas outperformed the major centres.” Reuters News, 17. March 2004, ‘NZ property market picks up in February – REINZ’

It’s not too late, certainly not, however I am of the opinion that there *are* certain areas that are over-valued Now compared to a year ago. I would go as far as to say that it could be said to be true of all the areas mentioned above.

“Whangarei, Auckland, Hamilton, Tauranga, New Plymouth, Gisborne, Napier/Hastings, Palmerston North, Wellington, Nelson, Christchurch, Dunedin.
Smaller cities being: Taupo, Rotorua, Whakatane Wanganui, Invercargill.”

i would call all of these areas capital gain areas rather than cashflow positive areas, apart from one or two which used to be CF areas but prices have moved so the yields aren’t that good any more. maybe now only 10 percent.

and so the CG potential is not there so much, (talking short term only, because I believe NZ is 5 star plus for long term investing – you just can’t go wrong.!!) and neither is the CF. And i reckon you’ve got to have one or the other for a deal to be a good one when you buy it *now*.

I think the ripple effect as described here http://www.positivelygeared.com.au

has kind of already hit the regional towns as listed above, but the ‘rural’ or small towns within 50-100k of the above are where the hot spots of CF+ve still are, plus the CG which will occur as the ripple of the boom spreads.

So I would go as far as to say that today’s CF+ve high yield area is tomorrow’s CG area, simply for the factors outlined on the article on the weblink above – the cheapest house do a catch up, so they still stay cheap *compared to* the market as a whole, but CG occurs – because of the growth the rest of the market has had.

I would also go as far as to say that i believe that houses at the bottom third of the market will have proportionately higher growth than those at the middle and top, because every time growth happens, the ‘market’ looks at the price-range one below where they were previously looking, forcing demand ever downwards. more demand means CGs

cheers-
mini

Really depends what you’re after.. There’s still a lot of great deals out there. But a lot of wolves in sheeps clothing (pardon the pun) are out there being advertised to the ‘investor market’.

If you’re wanting ‘permanant’ pos CF for retirement – look at places and properties that you believe are unlikely to see you with excessive vacancies (the silent profit-killer of positive cashflow deals). Also, do your numbers – rates can be higher in NZ to Aus (I guess because populations tend to be lower and dispersed over so much more area)

You might consider the South Island (Dunedin, Southland, Otago etc.. Smaller ponds like Gore seem to be fished out at the moment though).. Some areas in the north are interesting too – most of these are mentioned on other forum posts.

Or you could be after short term cashflow plus capital gains… or long term Capital Gains full stop… or you know you need $100k p/a to retire, but only have $X much in savings, so you need low-cost, high yield rentals which give you an entry into the market…etc

I guess it comes down to what you want.. (Look up The Path of Least Resistance in From 0 to 130 Properties in 3.5 Years)

Brent Hodgson
PropertyInvesting.com
Admin Manager

I’m going on a property buying tour!

Want to receive the e-mail diary of my trip, hear about some of the great Positive Cashflow deals I find, and perhaps discover some great opportunities for yourself? e-mail or PM me!

Hi all

i’d like to add the following

don’t believe everything you read in the media. Virak lets address your isssues you raise
Firstly you mentioned reduced migration. Yes the population growth from immigration is less than last year but still more are arriving than leaving. Interesting i see lots of expatriates are returning to NZ, i’ve heard there are 1 million NZ’s living out of NZ (most in Bondi[biggrin]).
Secondly you mentioned interest rates. Yes interest rates are as high as Australia the highest in the developed world. But will they be going higher or dropping ? the standard variable rate is 7.5% yet you can get finance at 7.2% fixed for 5 years. It doesn’t look like the banks are expecting rates to rise.
Finally you mentioned house prices outstipping income growth. Yes that is true also. But remember we have had 5 years of this type of growth in OZ and NZ has risen only recently. i rember talking to a guy out the from of an estate agent in Timaru last year in July, he warned me the market was at the top. Luckily i didn’t listed to him. Also there is not one market. Auckland like Sydney and Melbourne is the biggest market but not the only one. many journalists forget that there is another world outside the city they live in.
so in summary i’m living in NZ and i’m still buying, the deals are not there like 12 months ago but they are about.
Finally Yack, unfortunatly your single approach to investing is having an adverse impact on your bank balance. Try giving up the preconceived ideas you have and take a look at the world outside Melbourne, there are incredible opportunities passing you by everyday.
and the outer finally, Dantheman did i read that the group you are representing are charging 4,000 plus a deal ? wow that is very expensive i mean really really expensive

regards westan

I find +ve cashflow deals in New Zealand which I sell to other investors. To be on my database send an e-mail to [email protected]

There’s also the Lord of the Rings aspect. yeah yeah you say, but think about how big this is… Suddenly New Zealand is the ‘hot’ destination for millions of Americans who are getting married here, moving here, having holidays here…

It’s suddenly on the radar and is being heavily promoted (have you seen the Air NZ planes with full LOTR themes painted on them?) across the world to generate more visitors.

And its perceived as a safe haven in this age of terrorism.

This can only be good.

John.

Yack – If I was still in Sydney I would probably be waiting for the bust as well. But in the MAP and in NZ – everything is all go. What I meant about being ‘less picky’ was that I was looking for the perfect investment, and in reality you have to settle for near perfect sometimes. [biggrin]

(I believe that later this year there will be no +CF deals left in NZ, so I’ve moved here to invest full time. I can find +CF deals for your NZ portfolio for a fee, just email me.)

Diggler

i didn’t make the comment but i’ll defend whoever did.
last year in early January my brother made a similiar comment about the market in Victoria. I, who know more about property than him thought he was over reacting when he raced out and bought 7 homes in a matter of weeks. he was right it was the best thing he every did.
I now live in NZ and the similarities to Australia are remarkable every week i see stock getting scarcer and the prices are rising also. In dunedin it is near impossible to buy properties showing 10% returns other markets are the same. I’m competing with buyers from Hong Kong and the UK who buy sight unseen and offer cash for the home. I wouldn’t be suprised if Tasman’s insight into the market is correct.

Tasman’s comment isn’t made out of niavity but a knowledge of what Tasman and i are seeing first hand in NZ.

regards westan

I find +ve cashflow deals in New Zealand which I sell to other investors. To be on my database send an e-mail to [email protected]