The cheapest home sold at Harcourts' auctions in Auckland last week (to July 10) was a two bedroom house at Wiri in South Auckland that went for $390,000.
The house (pictured) was basic but had a carport and a deck and sat on a 290 square metre freehold section.
"Inside and out it is tidy, but some TLC would go a long way to bringing this beauty back to life," Harcourts' promotional material for the property said.
It was rented out at $350 a week, which would provide its new owner a gross rental yield of 4.7%.
It was the only Auckland property to sell for less than $600,000 at Harcourts' auctions last week.
In other centres prices ranged from $391,000 to $815,000 in Harcourts' Hamilton auction rooms, from $255,000 to $487,000 in Palmerston North and from $236,000 to $1.3 million in Wellington.
In the South Island prices ranged from $350,000 to $1.315 million.
To view all of Harcourts' recent auction results, with photos and details of all properties including those that didn't sell, go to our interactive Auction results page. It allows you to search for auction results by location, or by agency and by whether or not properties were sold. To access it click on the Property tab located just under the banner at the top of this page and select "Auction/Sales Results" from the drop down menu, or you can just click on this link.
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34 Comments
Just another confirmation that there is no future for first home buyers in Auckland. Just remember for this to be affordable, 3-5 times a person's wage, a person/couple needs to earn $78,000 to $130,000. So a person or couple save hard to raise $78,000 deposit to get a house that looks like that. It would be far better for all FHB just opt-out of this nonsense. There are far better opportunities elsewhere.
A percentage of the income needed to service the loan is a better measure of affordability. Big difference between a $300k mortgage at 4.3% and 8.6%. It isn't that long ago that rates were that high. A couple earning 70k each without kids can afford to pay more than that at current rates. They would be taking home about $8,800 a month. 30% of that would service a mortgage of about $535k. They would also have $6k a month to live off. Once you factor in children it gets much harder.
The percentage of the average wage to service the loan of the average house (20% deposit) is now over 50% and growing by the day - house inflation is outstripping wage inflation. This is higher than the previous peak just before the GFC. The amount of income going to service a mortgage is clearly too high and will effect the rest of the economy - you can only spend a dollar one way. Again my point is why bother with such a market when there are better opportunities elsewhere - both lifestyle and/or investment.
Yes, I totally agree with you. The impact will have to come in consumer spending. If the "feel wealthy" cannot pick up the slack from the "oppressed", you'll start hearing the creaks from the engine room. Most bubbles are accompanied by buoyant consumer spending, which is why bubbles are promoted in the first place. I would think that consumer spending is running on all cylinders at the moment.
I am not saying that it isn't getting more expensive but I do question the rational of what defines affordable. Someone earning $200k could afford to spend more than 50% on housing and still live very comfortably and someone on the minimum wage would struggle to afford 30% of their income. As to why you would bother? Well if you don't you may look back and wish you had as it may get less affordable..
Yes. I think it's time for many people to accept that the the middle class existence in Auckland is no really worth the effort, unless of course, you're collecting the commission. Actually, I know a guy who is cleaning up in Auckland shifting houses. Natural salesman, scrubs up well, has a good network, and is based in the "golden" market around Ponsonby / Grey Lynn / Westmere.
Property King..... we will be quiet when the playing field is level and the taxpayer has stopped "propping up" your rents through the accommodation supplement and working for families etc, because the "businesses" that employ these people can not pay them a decent, living wage ....then your ilk turn around and claim more tax through negative gearing .....and you tell people to get out there and "work hard" ...why don't you go and suck on someone else's xxx !! .....and have a wonderful day :)
Why oh why would anybody take on a mortgage to live in that when you can pay $400 a week and live in a desirable area by the beach or close to work if you want and save a large amount of cash every week and have the freedom to change jobs, quit, change house, etc.?
Dogmas aside, does it make sense financially speaking if you're not planning to flip houses in the short term? Is it really worth it?
Because at least if you didn't have to spend a fortune in maintenance.. But they're not even new!
Do first home owners trapped in overpriced mortgages on these kind of assets sleep well at night just because they own that piece of ..house? Do they feel socially successful by renting the money to buy that instead renting a good and convenient place to live?
I'm sure in the past many had different "strong" arguments to justify spending a lot of money and even get indebted to purchase tulips.
Crazy times indeed!
PS: When I first saw these kind of constructions it reminded me of the houses I used to see on TV when there were news about a hurricane destroying bungalows in some remote country. I also remember people extremely happy when they survived the catastrophe despite having lost their homes because "their lives are worth more and those houses were simple sheds that could be easily rebuilt".
I wonder what some of these people would think knowing how much some people pay for these bungalows in NZ with BORROWED money.
it could be..
But I'm sure first home buyers would love to have easier access to credit (lower deposit requirements) to better compete against investors on this market. That's what annoys most of them. Not the fact that prices increase up to $3,000 a week but the fact that they cannot join the speculative party.
I guess everybody has a small bourgeois inside dreaming with getting wealthier by sitting on an asset and waiting for its value to increase.
It's a market to analyze, to study and to learn more about human irrational behavior. But right now it's a market I wouldn't ever get myself into in any possible way.
UP UP AND AWAY IN MY BEAUTIFUL BALLOON .....WOULDN'T YOU LIKE TO RIDE IN MY BEAUTIFUL BALLOON ..ETC ETC ....TILL IT GOES "POP"....and isn't that one "beautiful balloon" in Wiri (as pictured) ....I know from my brother, who has now lived overseas, for well over a decade, that people literally laugh their heads off at the price of property in Auckland.... it's actually an embarrassment to the country.
I agree.
When my relatives came to visit us in NZ they literally laughed when I pointed at some bungalows like in the picture and said that those houses are worth more than 200.000 EUR and people get indebted to purchase them!
But they also laughed when I pointed at some houses at Oceanbeach Road in Mount Maunganui and said that those houses were worth more than $1 million NZD. "The walls are like cardboard! one said.."
I know I know. What do they know? They don't understand how in New Zealand prices go always up, incomes don't mean absolutely anything and prices have never fallen much therefore they will never fall much.
Considering that New Zealand is the most expensive country to buy houses compared to incomes and that building standards are well below some other developed countries' standards
http://www.stuff.co.nz/business/75945463/NZ-tops-world-in-Fitch-house-p…
I guess what they find funny is that we still don't get it an keep adding fuel (debt) into it..
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