Housing market - Wellington
Discussion
Afternoon, all,
I'm currently dribbling over a rather nice place in Wellington, which is on the market for $520k. It's been on the market for 3 weeks, tender periood has closed and it's still on the market. The agent has told me that the market is starting to pick up , and there were slight house price increases last month (to the tune of around 3%) and that average selling times are 8 weeks.
However, family members suggest that prices are still over-valued, by as much as 30% and that there's still a long way to fall over the next 12 months.
I am itching to get this place and want to put an offer in. I was gonna submit $500k but have been told that this is madness, and that a more realistic offer would be $420k. I know the agents have suggested that the vendors won't let it go for under $500k, but then they're gonna say that aren't they?
Any thoughts on the current climate would be gratefully appreciated. I've read all the press cuttings etc, but they give conflicting stories I'm afraid.
Many thanks.
I'm currently dribbling over a rather nice place in Wellington, which is on the market for $520k. It's been on the market for 3 weeks, tender periood has closed and it's still on the market. The agent has told me that the market is starting to pick up , and there were slight house price increases last month (to the tune of around 3%) and that average selling times are 8 weeks.
However, family members suggest that prices are still over-valued, by as much as 30% and that there's still a long way to fall over the next 12 months.
I am itching to get this place and want to put an offer in. I was gonna submit $500k but have been told that this is madness, and that a more realistic offer would be $420k. I know the agents have suggested that the vendors won't let it go for under $500k, but then they're gonna say that aren't they?
Any thoughts on the current climate would be gratefully appreciated. I've read all the press cuttings etc, but they give conflicting stories I'm afraid.
Many thanks.
I'm renting so don't know a lot about the what's going on with prices at the moment. However, I did have a colleague who knew quite a lot about the Wellington market (had a bit of a property empire going on) - he once told me that prices in Wellington have always tended to rise a bit slower than other parts of the country, but did not tend to fall very much during the downturns. I don't see a 30% drop in prices as being at all likely.
Edited by Coq au Vin on Tuesday 20th May 21:34
I'm no expert on Wellington but here in Hamilton prices are coming down. There are more and more mortgagee sales (repo's) and a couple of the finance co's that I deal with have about 50 repo's on the go at present.
IMO housing here is 25 - 30% over valued at present.
Offer $420k and let them live in it rent free til you move over.
IMO housing here is 25 - 30% over valued at present.
Offer $420k and let them live in it rent free til you move over.
Im with James on this. Get a proper inspection and evaluation done. People will always talk the value of their house up come sell up time as they say well so and so from across the road got this and that for theirs so can I. Predictions for property increases/decreases etc are meant to be flat for next 12 months atleast in most major towns/cities. You have to be in property for the long haul for it to work for you esp now since the market has gone slow again, in another words dont expect to sell your house for another 50-100K more in two years time. With out seeing this house where its situated and ties attached etc its hard for me to say what it may be worth sorry. Houses in the cities IMO are over inflated with home incomes not being able to match increasing mortages etc. Friends of ours have had great success in going down the building route as another option. If you can put up with the usual hiccups of getting a new home built but all goes to plan eventually it can work out very cost effective and the financial gain can be rewarding.
Let us know how you get on, how exciting for you
Let us know how you get on, how exciting for you
I'm in Wellington. Many people say Wellington prices go up but never down, but then we've never had such a sustained and agressive period of growth as the last 7 or so years either. Any investment can go down and it seems to me the more people there are that think it can't, the more likely it will, so I'm a bit suspicious of the 'never goes down' viewpoint.
The agent is talking up the market - there is no price increase happening in Wellington. Volumes have dropped sharply, values aren't dropping *yet* because people are still able to meet mortgage payments but I think that wll change as people start to realise if they want to sell to move on to whatever it is they're doing next they will have to drop their price. 8 weeks may be the time to sell now - it was less than half that a year ago IIRC.
A friend in retail banking told me she's seeing a lot more people coming in for short term loans and topping up the mortgage, and more and more often she's having to tell them they can't have any more credit. High petrol prices, hgh interest rates and a falling NZ dollar are increasing the squeeze and people who overextended themselves in the boom will start to run out of options.
I sold my house in the middle of last year, put the money mostly in the bank and am currently renting. I will buy again but not for at least another 6 months and more likely 1-2 years. When things go up they're not going to go up quickly so I wouldn't worry you're going to miss out.
If you'll excuse the personal observation, the way you describe the situation you sound like you're at risk of making a poor decision driven by the fear of missing out on this property. In a seller's market that's OK, but this isn't a seller's market. If you want it as a place to live and aren't making an investment decision that's fine, but as an investment decision (and what property purchase isn't?) I'd suggest you look for independent advice. If I was you I wouldn't even think about making an offer without a valuer's report.
Hope this helps - mostly just my opinion so feel free to ignore at your leisure
The agent is talking up the market - there is no price increase happening in Wellington. Volumes have dropped sharply, values aren't dropping *yet* because people are still able to meet mortgage payments but I think that wll change as people start to realise if they want to sell to move on to whatever it is they're doing next they will have to drop their price. 8 weeks may be the time to sell now - it was less than half that a year ago IIRC.
A friend in retail banking told me she's seeing a lot more people coming in for short term loans and topping up the mortgage, and more and more often she's having to tell them they can't have any more credit. High petrol prices, hgh interest rates and a falling NZ dollar are increasing the squeeze and people who overextended themselves in the boom will start to run out of options.
I sold my house in the middle of last year, put the money mostly in the bank and am currently renting. I will buy again but not for at least another 6 months and more likely 1-2 years. When things go up they're not going to go up quickly so I wouldn't worry you're going to miss out.
If you'll excuse the personal observation, the way you describe the situation you sound like you're at risk of making a poor decision driven by the fear of missing out on this property. In a seller's market that's OK, but this isn't a seller's market. If you want it as a place to live and aren't making an investment decision that's fine, but as an investment decision (and what property purchase isn't?) I'd suggest you look for independent advice. If I was you I wouldn't even think about making an offer without a valuer's report.
Hope this helps - mostly just my opinion so feel free to ignore at your leisure
Two particular points to note.
1 - The big drops in value are in apartments and distressed property. If the one you're after falls in neither of these categories then it will not have dropped in value as much as the average value.
2 - A significant factor in the growth in the Wellington region in the last 9 years has been the huge growth in the public service. The size of the public service is likely to plateau and then drop after October.
1 - The big drops in value are in apartments and distressed property. If the one you're after falls in neither of these categories then it will not have dropped in value as much as the average value.
2 - A significant factor in the growth in the Wellington region in the last 9 years has been the huge growth in the public service. The size of the public service is likely to plateau and then drop after October.
Edited by Kiwi XTR2 on Wednesday 21st May 00:50
Buying ANY property in NZ in the next couple of years has to be a dumb move. Renting is FAR cheaper than ownership here at the moment.
Granted, home ownership will be a good investment long term, but why buy when house prices are going nowhere but down and stagnating in the next 2-3 years.
Come over, rent, leave your money in Pounds until the NZ dollar drops (as it's bound to do against the pound soon) bring your money across and invest it in term deposits, then once the hosing market's bottomed out, you'll be able to buy so much more for your money and be entering into an appreciating market.
Job's a carrot
Granted, home ownership will be a good investment long term, but why buy when house prices are going nowhere but down and stagnating in the next 2-3 years.
Come over, rent, leave your money in Pounds until the NZ dollar drops (as it's bound to do against the pound soon) bring your money across and invest it in term deposits, then once the hosing market's bottomed out, you'll be able to buy so much more for your money and be entering into an appreciating market.
Job's a carrot
with a property is not a good way of picking a bargin.I would agree with the above, there is no hurry to get into the market. My neighbours have had their house on the market for a couple of months, the tender period brought no offers and open homes are very slow. This seems to be common at the moment. Sellers are still expecting top-dollar, buyers are staying away or offering very low to get a bargain from a desperate seller.
Start off by coming over and renting. It seems to me that short term renting in NZ is more common than in the UK - if you don't like it, give notice and find another. By renting you can also take your time to check out Wellington - what appears a bargain from the UK might not be in the best location or have some other undesirability. If you want opinions on the particluar house, post details of the house and I am sure we will comment!
The only possible issue with renting is that landlords are raising rents to try and cover their future higher mortgage payments so it may become more costly over time.
As has been said, the dollar is higher against the pound (currently $2.5/pound) than it was 2 to 3 years ago ($3/pound). Whether it will change up or down I don't know, it may pay to get advice.
Dan
Start off by coming over and renting. It seems to me that short term renting in NZ is more common than in the UK - if you don't like it, give notice and find another. By renting you can also take your time to check out Wellington - what appears a bargain from the UK might not be in the best location or have some other undesirability. If you want opinions on the particluar house, post details of the house and I am sure we will comment!
The only possible issue with renting is that landlords are raising rents to try and cover their future higher mortgage payments so it may become more costly over time.
As has been said, the dollar is higher against the pound (currently $2.5/pound) than it was 2 to 3 years ago ($3/pound). Whether it will change up or down I don't know, it may pay to get advice.
Dan
Esprit said:
Kiwi XTR2 said:
I 'might' agree with George but for a slightly different reason. Interest rates are tooooooo high at the moment.
One of the reasons why I said renting is FAAAAAR cheaper but it does annoy me that some other people (not necessarily on PH) just go off about house prices like they are the only problem.Most house prices are really only a little too high by comparable international standards but:
- Interest rates are too high
- The NZ$ is too much of a victim at the moment
- Salaries are too low
- Beneficiary ratios are much too high
- Home equity ratios are mental
- Taxes are too high (particularly bracket creep)
etc
So for the average person it is probably not a good time to buy . . . but there are always exceptions and bargins.
Agreed Graham... perhaps instead of "house prices" I should have said "the costs of home ownership" or "barriers to entry to the housing market".
Houses ARE overpriced here, especially relative to the average salary... but there are a combination of factors that make those prices impossible to rationalise for many.. like me.
Houses ARE overpriced here, especially relative to the average salary... but there are a combination of factors that make those prices impossible to rationalise for many.. like me.
It is always a good time to buy property, IF the deal is right. Check if anything has sold in the same street recently and if you are serious get a valuation done and talk to the valuer about the current trends in the area. Alway put in a low offer to start with, if nothing else it will get you in the picture so you're less likely to miss out completely.
Also, the purchase we are talking about here is not exactly a cold hard investment. If the property is a dream-home that you may regret passing up on, and you can afford it at the moment and you plan on keeping it for a good while, then.........
Also, the purchase we are talking about here is not exactly a cold hard investment. If the property is a dream-home that you may regret passing up on, and you can afford it at the moment and you plan on keeping it for a good while, then.........
Morning (Evening) all,
Many thanks for the replies, it's really appreciated. I understand the general opinions, and this has been echoed by the OH family who live there. ie, DO NOT buy now!
Thing is, as someone mentioned, I'm not looking for an investment or anywhere to sell in a few years, I intend for this to be our home. Someone mentioned buying it for $420k then letting them rent it out free of charge. This is a quality idea, but then I remembered the story with the sellers... The husbabnd has gone to Auckland to do a dream job and the wife is staying in Wellington until the house is sold, so this wouldn't really appeal to them.
We were a key press away from sending the email offering $500k last night, but I resisted!! I know it doesn't make sense, but I still can't help myself. This is a lovely house, the best by far I've seen, even looking at other properties over $100k more.
I'll get the valuation done asap. Apparently it's gonna cost around $600, any ideas ifthis sounds fair?
Once again, many thanks all I really appreciate the advice, and am taking it on board it. I'll get the beers in once over there!!
Cheers,
Nick.
Many thanks for the replies, it's really appreciated. I understand the general opinions, and this has been echoed by the OH family who live there. ie, DO NOT buy now!
Thing is, as someone mentioned, I'm not looking for an investment or anywhere to sell in a few years, I intend for this to be our home. Someone mentioned buying it for $420k then letting them rent it out free of charge. This is a quality idea, but then I remembered the story with the sellers... The husbabnd has gone to Auckland to do a dream job and the wife is staying in Wellington until the house is sold, so this wouldn't really appeal to them.
We were a key press away from sending the email offering $500k last night, but I resisted!! I know it doesn't make sense, but I still can't help myself. This is a lovely house, the best by far I've seen, even looking at other properties over $100k more.
I'll get the valuation done asap. Apparently it's gonna cost around $600, any ideas ifthis sounds fair?
Once again, many thanks all I really appreciate the advice, and am taking it on board it. I'll get the beers in once over there!!
Cheers,
Nick.
$600 sounds about right for a full valuation.
If you do put in an offer, in addition to all the other conditions that your conveyancing solicitor will advise you on, make sure it is subject to a comprehensive building inspection that is satisfactory to you in all respects.
Do you know the age of the building and its cladding ?
If you do put in an offer, in addition to all the other conditions that your conveyancing solicitor will advise you on, make sure it is subject to a comprehensive building inspection that is satisfactory to you in all respects.
Do you know the age of the building and its cladding ?
Evening Graham,
No, we don't know the age etc. I do know that the current owners have only been in there since Christmas, and intended to retire ther. However a dream job required a move to Auckland. So, they paid $505k for it six months ago, so I'd have thought $480-$500k would be about fair, given that they had all the valuations etc carried out 6 months ago.
Cheers.
No, we don't know the age etc. I do know that the current owners have only been in there since Christmas, and intended to retire ther. However a dream job required a move to Auckland. So, they paid $505k for it six months ago, so I'd have thought $480-$500k would be about fair, given that they had all the valuations etc carried out 6 months ago.
Cheers.
Hi Nick - I work at QV, one of the main property valuers in Wellington (and NZ), although I'm not a valuer myself. 600 is about right for a full Current Market Valuation (CMV), but as you need to ensure that any offer is subject to certain provisions, such as Council LIM Report, Building Report. Please email me via my profile with the property details and I'll see what other advice I can offer directly - I have access to property data on the house, such as age, cladding etc, and may be able to help. The key is DON'T BE RUSHED into making an offer - the majority of properties are stagment at the moment, and if someone else makes an offer, the agent should make a "call to offers" asking anyone who has expressed interest to make offers if they want. I'll get back to you in the morning....Cheers, Richard.
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