First home...

[ron48170]

My partner and I have been talking about getting a house, and she is super keen, however I’m a lot more pessimistic. We have a 20% deposit for 400k, and we recently saw a house we were both keen on (which is selling shortly) so we have kind of got all our stuff together - I’m okay to pay up to 400k for it (but I’d prefer around 385), however I noticed a lot of what I would assume were investors at the open home and I feel like it’s going to be pushed up more. It’s CV is 275k.

My main conflict is I don’t want to overpay for a house and then have the market drop out (because I can’t foresee it continuing this way) and we currently pay quite cheap rent (225 p/w).

I guess my question is, if we don’t get this house , can I assume it’s better to wait and stay with my decent rent, or I’m i just waiting for nothing? If that makes sense

 

[columba]

@ron48170 Just set a maximum price you’re willing to pay. And also have a look at a mortgage calculator too see what your repayments would be, at current interest rates it may not be much more than your current rent. And the market could go up or down but housing in NZ is an extremely safe investment over time, your investment is unlikely to make as much anywhere else other than housing. There could be a decrease in the value soon but if you’re planning to live in it does a short term loss really matter when you’re almost guaranteed to get a good gain over the long term?

 

[bob2018]

@columba I agree. If you and your partner both like the house then I say go for it. Any short term fluctuations will likely be outweighed by the long term benefits of owning a house you both enjoy that is likely to increase in value overtime anyway.

 

[ron48170]

@columba Yeah our repayments were looking about 300 p/w which certainly isn’t bad (to me) and yeah I think one of the other issues was that my partner was thinking we would live there for something like 5 years, however it seemed to be it would take longer than that to balance out again if the market does dip?

Oh the plus side, we would have no real reason where we would absolutely have to move .. we have looked at jobs in other cities, but vaguely

 

[praytogainjesus]

@ron48170 Crystal ball gazing is impossible here. The only thing I can say retrospectively is that every time I've passed on a house that looked good, I've regretted it. Reason being that the market has only gone in one direction for a long time.

How long you want to live there is a consideration, but so is smashing the mortgage, building equity, and using that equity for the deposit on a house if/when you move and maintaining this home as a rental.

 

[theoneinsidethezero]

@ron48170 Ok. The problem with market dips is that they can wipe out your deposit. And effectively prevent you from buying another house without pouring more money in.

Insure your mortgage repayments, don't sell in a downturn and you'll be fine. You can keep the house and rent in another city if you have to move there.

Probably the only real reason when you have to upgrade is the growing family. If it's a consideration, then stuff becomes a bit more complicated. If not, stay put, pay it down and enjoy the benefits of home ownership.

 

[suns]

@ron48170 Firstly, don't get discouraged but CV doesn't mean too much at the moment - it really comes down to the local market.

Personally I would buy in at all possible. I can't see enough of a housing correcting happening that will cause you any issues.

The longer you wait, the more prices will go up and your cheap rent isn't going to last forever. If you miss out on the house you could have your rent increase leaving you paying somebody elses morgage.

 

[movingon]

@suns If the CV does not mean much at the moment, then at what time does it mean anything? Most people have no idea what it means but they just see that houses mostly sell over that value, confusing people who are not in the know..

 

[suns]

@movingon The CV, or RV is just a value the local council uses to calculate your rates.

 

[ron48170]

@suns Yeah you’re definitely right there - I don’t wanna be paying essentially what I could be against my own mortgage. That’s actually a reasonably big issue for me, so that probably does suggest I should buy relatively soon - cheers!

 

[lilyheart]

@ron48170 Which city?

 

[ron48170]

@lilyheart Dunedin

 

[mklm]

@ron48170 I'd take a good look around on homes.co.nz on recently sold properties - unless you're looking quite far out or in South Dunedin etc., you may find it difficult to find anything sub-400k.

Don't mean to put you off, just I had this with my partner last year - took us ages to get okay with the idea of buying and then, well, we're still looking

 

[ron48170]

@mklm No worries - I’m looking south Dunedin haha!

 

[psalm24]

@ron48170 Be careful with the house you buy and do your homework. A lot of those houses in South Dunedin need re-piling, have old rubber tubing on their electrical, have scrimboard and no insulation etc. All the hallmarks of 100+ year old houses.

 

[jankhurram]

@psalm24 Also whether you can actually get insurance because of the flooding.

 

[psalm24]

@jankhurram I included the rubber tubing on electrical because a lot of insurance companies will decline cover if you have that in an old house.

 

[mklm]

@ron48170 Oh, sweet! I don't really know the market there too much, but I would say take a good look at homes.co.nz and have a look at what things are selling for compared to CV etc. around your area but keep in mind CV is only based on what the council knows about the house - a house with a $300k CV that's beautifully done up inside and a house with a $300k CV that's run down and dilipidated will be substantially different, but the council only knows "3 bedrooms, size of 100m2" etc.

One thing I did to get myself comfortable with the idea of offering more if needed (I'm not saying it is, but I am saying that being a year down the track with 0 out of 4 offers accepted sucks ass) was work out my weekly repayments with the little bit extra. It sucks and obviously it's still a higher cost over all, but when I saw the impact on my day to day of offering that $10k more to try to secure it - it made a good difference in how I approached things

 

[ron48170]

@mklm Yeah I’ve definitely had a look at what it’s like round there and it seems to be sitting around 400k

That all makes complete sense, cheers

 

[alannasteph]

@ron48170 Hey man!

I live in South D also and bought my house just over a year ago. As others said the piling issue is real! all mine needed replaced which I did myself but it was weeks after work of crawling around on my belly in 500mm crawl space digging holes etc. I was lucky enough to even have that space underneath in South D and also lucky that the joists and bearers were in an acceptable standard

In all fairness people are currently living in these houses with wavy floors and there is no issue but I personally had to do something about it as it gives me a shits.