‘FOMO is back!’

[blackcap]

Quite sickening that not just these salespeople but also the property industry, real estate agencies, and supposedly responsible news media organisations are all promoting FOMO with regards to such a significant financial decision as purchasing a house, a decision that carries with it large and potentially very onerous responsibilities as regards paying off principal and interest. It's not like buying a mop or a new bedside table, it is an enormous responsibility.
Making calm, considered, and rational decisions will always result in better outcomes than giving in to the rash impulses associated with 'FOMO'.

That guy from one roof is often talking about how the property market will go up. Not sure if he is still saying that but when I listened about a year ago things were looking good for property. (or that is how I perceived it anyway)

[Logen Ninefingers]

That guy from one roof is often talking about how the property market will go up. Not sure if he is still saying that but when I listened about a year ago things were looking good for property. (or that is how I perceived it anyway)

Well of course if you were to take on board his articles, and were to give weight to his stylings of being an 'indepedent economist' and therefore an expert, and you then made a significant property purchase, and you then found yourself in a situation of negative equity and in extreme financial hardship struggling to pay your mortgage and interest bill....what recourse do you have as regards holding him to account for the substance of his 'expert' articles?
None whatsoever.
But it is revealing to me that these 'experts' can get it wrong for so long, and yet apparently they still retain their credibility with our media, and they still get an ample platform from our media.

[Logen Ninefingers]

Regarding the article I've provided a link for below, if the offers are 'crazy' in the opinion of the real estate agent concerned, can someone explain why the retail bank making the mortgage loan be happy with that situation? Offers that are 'crazy' have a clear implication that they are unsound or not rationally justifiable and the person making the offer will no doubt end up paying way over the odds. If something is descibed as 'crazy' it usually connotes something irrational is taking place.

I won't post the substance of the article, just the link. But it is clear that the intent of it is to stoke this phenomenon called 'FOMO', and I consider that to be irresponsible.

https://www.oneroof.co.nz/news/43986

[bulltrap]

Quoting the article:

There have been a “crazy” five pre-auction offers on a four-bedroom, two-bathroom home at 38 Twin Parks Rise in Papakura.

The craziness was in the unusually high number of offers. Taken individually, the buyers and the offers they submitted may've been reasonable and within the parameters of their mortgage pre-approvals.

But I agree with your main point, that article - and all the rest on OneRoof - do seem aimed at stoking the market. Last I checked, it's still winter in the midst of an historic downturn, and with an election looming.

[Logen Ninefingers]

Quoting the article:



The craziness was in the unusually high number of offers. Taken individually, the buyers and the offers they submitted may've been reasonable and within the parameters of their mortgage pre-approvals.

But I agree with your main point, that article - and all the rest on OneRoof - do seem aimed at stoking the market. Last I checked, it's still winter in the midst of an historic downturn, and with an election looming.

Could it be that there really are a group of people out there conducting themselves as if the OCR was still at 0.25%?
Could it be that they all want to secure this particular house because they know there is a cache of buried treasure hidden beneath it?

How can you verify any of the 'details' when so many of them are anecdotal and coming from real estate agents, who may have a vested interest?

[bulltrap]

Could it be that there really are a group of people out there conducting themselves as if the OCR was still at 0.25%?
Could it be that they all want to secure this particular house because they know there is a cache of buried treasure hidden beneath it?

For this particular house, records show 38 Twin Parks Rise sold new for $1.31M in Feb 2021. Compared to that, and comparing to costings for building something similar now, $1.07M (the estimate quoted in the article) might look like a pretty good deal.

But looking closer, actually the house up for auction is 83 Twin Parks Rise - not 38 as reported. Oops careless typo, or deliberate bait and switch?

[Logen Ninefingers]

For this particular house, records show 38 Twin Parks Rise sold new for $1.31M in Feb 2021. Compared to that, and comparing to costings for building something similar now, $1.07M (the estimate quoted in the article) might look like a pretty good deal.

But looking closer, actually the house up for auction is 83 Twin Parks Rise - not 38 as reported. Oops careless typo, or deliberate bait and switch?

It doesn’t pass the sniff test does it.

[thegreatestben]

In your 20's the biggest and best investment you can make is in yourself, it's not raiding your KS if you can leverage that money to increase your earning potential. I have benefited hugely from withdrawing some of my KS to purchase my first home at 24.

I think the bigger problem here is the poor understanding most NZers have of money and how it works, all of my knowledge and experience has been gained from actively using my money/assets. Nobody will learn anything from passively contributing to KS, many participants are still in the default fund they ended up in.

[blackcap]

In your 20's the biggest and best investment you can make is in yourself, it's not raiding your KS if you can leverage that money to increase your earning potential. I have benefited hugely from withdrawing some of my KS to purchase my first home at 24.

I think the bigger problem here is the poor understanding most NZers have of money and how it works, all of my knowledge and experience has been gained from actively using my money/assets. Nobody will learn anything from passively contributing to KS, many participants are still in the default fund they ended up in.

NZers need to learn financial literacy and how to get on with money.

I have a friend whose salary is $130k plus and yet he could not book some hut tickets $90 for us for a weekend in the mountains so asked if I could do it and he would pay me back later. That's tragic.

[Bjauck]

In your 20's the biggest and best investment you can make is in yourself, it's not raiding your KS if you can leverage that money to increase your earning potential. I have benefited hugely from withdrawing some of my KS to purchase my first home at 24.

I think the bigger problem here is the poor understanding most NZers have of money and how it works, all of my knowledge and experience has been gained from actively using my money/assets. Nobody will learn anything from passively contributing to KS, many participants are still in the default fund they ended up in.

Owning your own principal house remains the best and most tax efficient investment/pension scheme in NZ. Governments will try to protect the value of housing (to keep a significant part of the voting electorate happy). You can leverage and trade your way up the ladder without attracting capital gains tax. You can enjoy a healthy tax free dividend from your investment by way of its accommodation value or net imputed rent. As with most asset purchases timing your entry can be important though!