Quote:
quote:Originally posted by MrDevine
I'll add my two cents to this discussion.
I just brought my first house in Auckland last week – and yes the numbers are daunting (we paid 100% more than the vendors did 5 years ago). I had a very small investment the 'scary markets' for about 18 months which returned enough to put down a tiny deposit (5%). Yes I'm a 'low equity buyer'.
For first home buyers its a tough call. But I believe there isn't a good time to enter any market, you have to have skin the game. Yes property prices will fall, so you must ride out the cycle. I've got a 30 year mortgage, paying $500 pw which is steep I know, so you can see it as a sort of savings plan. Bottom line is, I'm sick or renting and dealing with landlords, paying their mortgages.
The other thing is, do you think I'm going to be in this place for the next 30 years? Average mortgage rollover is 7 years, we like to move around a bit in NZ eh?
You're damned if you do, and damned if you don't.
Look on it this way. The price of the house will increase as fast or faster than the interest on your mortgage. This is your compulsery savings scheme. Look at the past history of your house it doubled in price in five years. Lets suppose it takes 15 years to double again, add to that rent to equal your accomodation you are on to a winner for sure. If you are a normal kiwi battler you wont save money like that renting. The price of houses wont come down long term, the price of rents will sky rocket. The cost of building compliance is going through the roof [ask any builder]. The prices of homes will rise faster in the future than they did in the past nothing is more certain than that. macdunk