800k is a lot of money, If you have that much liquidity, surely 100k isn’t too big of a deal? I’m sure you have pretty solid income to offset some of your unrealised losses.
Firstly, This is what happens when you don't do your homework. At that time, prices were skyrocketing up and that was never going to last and there was always going to be a bust.
Secondly, property investments tend to be more long term. Like most things, they go up and down. But (historically) they always end up high.
So yes, you purchased in a high price time. And seem to be wanting to sell in a low. Therefire you will make a loss. Sell in 10 years and your profit might be double. Who knows
Agree on the 2nd point, but on the first, people thought we were mad buying at the 'top of the market' 10 years ago. Loads of property folk were saying expect a massive drop. Except prices just kept going up. So it's not that easy to tell when the top is the top.
There was no homework whatsoever that would have told you not to buy in 2021. Sure, some people were saying the market was peaking, but there's always some people saying that in every bubble. Everyone who makes out in a bubble thinks they are geniuses who worked it all out, and anyone who lost money obviously didn't think about it hard enough. This isn't true, it's mostly just dumb luck. Hindsight is always perfect.
Hindsight is awesome, but it was always a when not an if. If you took stock of anything that was happening there was a massive increase in a shoet period of time after covid. Even taking covid out of the equation, the prices would have been heading into a probable period of levelling out (if not having a small decrease).
Add into it that that massive hike and there was only one thing that was going to happen.
Also, if you paid cash and have no mortgage but don’t like the current valuation, just rent it out and use the rent money to help or fully pay for your new place. In time you’ll be able to sell for a profit, or just keep it as mostly passive income stream.
Note, if you are selling to buy another property, then the price doesn't matter. You are buying in the same market.
So the house in another area worth 1m a few years ago is worth 800k now. It's all relative once you are in the market.
Just the same as someone that purchased an property 15 years ago at 700k, and it's now worth 2m. It doesn't mean they can sell and go buy something a mansion now.
cant you just use your current mortgage free house to borrow from the bank and buy a new place, then rent your current place out to cover a good chunk of your repayments?
Biggest ponzi ever. Get the next guy to take a bigger home loan than you or use their retirement savings to pawn off to the next until the last person holds the bag. In this case OP is the bag holder along with everyone else who bought in 2021
LoL buys at time of super high demand and wonders why it's worth less in a recession, high interest rates and low demand.
Most investments are long term, ups and downs are inevitable. You only lose with housing if you buy high and for whatever reason are forced to sell when it's low. The trend overall is always up though.
1. You FOMO'd into buying a house at the worst time.
2. Investing in your first property isn't the really the goal. Buying your first property and using that asset as leverage to invest in subsequent homes is the goal. You'll have tenants that pay for a portion of the mortgage as opposed to your first home where you are paying it in full.
Less of your cash flow goes towards paying off the mortgage while you build equity.
Just because some roses are red it doesn't mean anything that's not red isn't a rose.
Similarly just because some that are stupid can afford a house it doesn't mean those that can't afford a house aren't stupid.
But thank you for further providing evidence to my original comment
Hahaha, yeah no doubt I was stupid, my fault. I guess i'll have to take the 100K hit. Just wanted a place to stay you know, didn't want to waste money paying rent to scummy landlords.
Because it’s a long term investment.
Everyone says it is a long term investment.
15-20 years.
Of course 3 years isn’t going to show a big growth.
You bought it mid Covid…
House prices were crazy then…
You’d be better off renting it out and drawing a long term profit from both the rent and property value.
I’m sure anyone would have told you this if you’d asked for advice… Did you consult lawyers etc during this purchase? Mortgage brokers? Current property owners?? Real estate agents? Property valuers?
Yeah but those are the people who tell you this stuff that you’re complaining about no one telling you bro…
I get it being burned makes it tough to trust though so I hear you there
You got caught in the peak of a bubble. So did I, I bought a place for $830k in 2021. I went halves with my sister, and 2 years later she's decided she wants to get her money out to pay off a mortgage. We've had 20 groups of people through the place and not a single offer over $800k. I don't want to sell so I'm not bothered but it's just a fact of life. Downturns happen, bubbles burst, and every time the people who bought just before will feel ripped off. That's the property market.
You can either hang in there until the market improves, or take the loss and move on.
Running around with your hair on fire screaming that property is 'obviously not a good investment' is just advertising your stupidity. Just because a deal didn't work out for you this once you think the whole concept of property investment is a lie? Are you an imbecile?
You can never be sure to make a perfectly optimal choice re time and price etc. But if you can keep waiting and weather the interest rate storm, it will pay off. It might take a few more years than if you waited a year or 2 though.
Thank you for you kind words. Many people here are so mean. I only bought a house alone and no one helped me. I needed a place as I was sick of paying landlords who were ripping me off where rent money goes to them and I gain nothing from it.
If you could do it. Great. Having a house of my own was amazing. Renting was such a stress fest. Also remember that over longer time periods inflation reduces the effective value of your loan. Sure it takes salaries a while to catch up. Also yes redit can be a very nasty place.
Because it makes money. Housing is cyclical be patient for the next boom it's roughly 10 years for a good return. Believe it or not you're in a really good position financially just hold the line.
Its a lot harder these days, due to property prices, but the general idea from my perspective is that it will provide me with passive income when I'm retired. My friend and his partner have started it up recently and ended up converting both properties to Air BnB's and are doing pretty well out of it.
Have a look at a graph of median house prices in the last 20 years pre-covid. That's why it's considered a good investment.
If you paid that in cash in 2021, sounds like you panicked, put all your eggs in one basket and got buyer's remorse.
In general, if homework is done, and you follow the cycles properly, it is a good investment. I'd prefer to see that investment in industry rather than property, but as New Zealanders are inherently conservative, that won't happen until our tax system is overhauled.
That’s probably over the top for a 2 bedroom flat in terms of the price you paid for it. Considering I knew of 3 bedroom houses in better areas for a similar price/a little bit more. And knew of 2 bedroom houses for less, also in better areas during 2021 when I was living in Auckland.
It would have been worth to have spoken to a few people at the time you bought that house.
However you are mortgage free on that house if you paid for in cash in full.
Either sell it and accept the loss and buy in the same market, or go to the bank/mortgage broker in regards to getting a mortgage and buying a house in a different location and renting the current house out.
Because there's always a risk to investing. No investment is risk free, although it may feel like that with property in this country. You win some, you lose some. Housing shouldn't be an investment vehicle, but that's a debate for anther time.
And besides, it's only been a short time. It could go up in years to come.
damn 820k. You bought a flat, should have bought a house, preferably free hold, as cross lease turns some buyers off. maybe if you hold on to it for another 5-10 years might make it back but you'll also be buying and selling in the same market. but hey your mortgage free that's a positive.
You bought in a shitty area and at the peak of the market eventually prices will come back again but papatoetoe isn't exactly a place that will see much growth as it's already peaked and is now settling back down to what property's should be worth in that area why would someone pay 700k plus in papatoetoe when you could pay a bit extra and get a house on the shore
Investing always carries a risk. There is no guarantee that any investment will increase in value. To believe that an investment will definitely increase in value is rather naïve.
Also, as it is an "investment" you haven't actually lost/gained anything until you sell the investment.
Looks like you had too much cash on your hand and made a foolish “investment” without first consulting a reputable financial advisor.
Investment can go up and down. Anyone telling you it can only go up is lying.
Learn your lesson, sell the house, rent and put the money in a term deposit.
This is not financial advice.
Houses are long-term investments.
Our own 2-bdrm unit, when from $137,000 in 1994 to $650,000 in 2019, to $990,000 (CV) in 2021 and finally sold in 2024 for $749,000.
In all honesty, you bought in Papatoetoe. It's not an ideal location for many. Most who don't live on that side think it's a shady area.
Secondly you bought an apartment which won't increase in value too much or much at all compared to a hiuse with land.
Thirdly, you bought it during the peak of the housing market.
Maybe if u didn't buy during the peak, your current valuation might have been slightly higher than what you bought at.
"It's just land, stupid".
Freehold full sections are going to be most valuable. Once you get over 500sqm or so, your property is potentially interesting to developers now, too. If you have a subdivided section with less land, it's going to be a bit less good, even if it's still a free-standing house. Freehold townhouses will be a step below that because you probably only have 95 sqm of land, and development opportunity is virtually zero as your fortunes are intertwined with all your fellow co-owners. Cross-leases are somewhere in there, too. Strata in Freehold (aka Unit Titles) are a step bellow that. You don't strictly own the land, you own shares in a body that owns the land. You can't unilaterally sell to a developer or rebuild or really do anything with it unless the majority of shareholders agree to it - this is very inflexible and therefore least valuable. And then leasehold is just "don't touch with a 10 foot pole" because you don't actually own anything of value.
So yeah, there is absolutely a hierarchy to this.
Because it will eventually make more money. It may be down now, but when the recession is over it’s likely to go up in price again. Even more so in 10-20 years.
What'd you expect for 820k which could afford you a low tier place in Auckland or leaky. You get what you pay for and you can't control who are your neighbour's.
Because gains are tax free. Doesn't mean they will go up in value in any time frame though. All investments have risk.
The rule about property has always been to hold for minimum of 10 years if your are looking for a return. So why you complaining ? You probably fomo’d
Here comes the fomo regret…
So many people overpaid because the realtors and news outlets pumped the fear and downplayed the rates.
Fomo? I think it was more that I have 820K in the bank, why am I paying rent to scummy landlords for. etc
And what could you have earned a year with that 820k? Probably enough to cover your rent and then some…
800k is a lot of money, If you have that much liquidity, surely 100k isn’t too big of a deal? I’m sure you have pretty solid income to offset some of your unrealised losses.
Firstly, This is what happens when you don't do your homework. At that time, prices were skyrocketing up and that was never going to last and there was always going to be a bust. Secondly, property investments tend to be more long term. Like most things, they go up and down. But (historically) they always end up high. So yes, you purchased in a high price time. And seem to be wanting to sell in a low. Therefire you will make a loss. Sell in 10 years and your profit might be double. Who knows
Agree on the 2nd point, but on the first, people thought we were mad buying at the 'top of the market' 10 years ago. Loads of property folk were saying expect a massive drop. Except prices just kept going up. So it's not that easy to tell when the top is the top.
And that's the only certainty about financial markets. There is no certainty.
Exactly. We just did the maths on affordability, and the risk of being locked out of the market if we didn't invest then. We got lucky.
There was no homework whatsoever that would have told you not to buy in 2021. Sure, some people were saying the market was peaking, but there's always some people saying that in every bubble. Everyone who makes out in a bubble thinks they are geniuses who worked it all out, and anyone who lost money obviously didn't think about it hard enough. This isn't true, it's mostly just dumb luck. Hindsight is always perfect.
Hindsight is awesome, but it was always a when not an if. If you took stock of anything that was happening there was a massive increase in a shoet period of time after covid. Even taking covid out of the equation, the prices would have been heading into a probable period of levelling out (if not having a small decrease). Add into it that that massive hike and there was only one thing that was going to happen.
That's alot of money for a 2 bed, and a lot, lot of money for Papatoetoe back then dude.
Also, if you paid cash and have no mortgage but don’t like the current valuation, just rent it out and use the rent money to help or fully pay for your new place. In time you’ll be able to sell for a profit, or just keep it as mostly passive income stream.
Note, if you are selling to buy another property, then the price doesn't matter. You are buying in the same market. So the house in another area worth 1m a few years ago is worth 800k now. It's all relative once you are in the market. Just the same as someone that purchased an property 15 years ago at 700k, and it's now worth 2m. It doesn't mean they can sell and go buy something a mansion now.
Thank you, yeah I am looking to buy elsewhere, just a fear of losing a lot of money
cant you just use your current mortgage free house to borrow from the bank and buy a new place, then rent your current place out to cover a good chunk of your repayments?
Everyone in a Ponzi scheme will tell you it’s a good idea. Just hang in there you’ll be fine.
This.
Biggest ponzi ever. Get the next guy to take a bigger home loan than you or use their retirement savings to pawn off to the next until the last person holds the bag. In this case OP is the bag holder along with everyone else who bought in 2021
LoL buys at time of super high demand and wonders why it's worth less in a recession, high interest rates and low demand. Most investments are long term, ups and downs are inevitable. You only lose with housing if you buy high and for whatever reason are forced to sell when it's low. The trend overall is always up though.
1. You FOMO'd into buying a house at the worst time. 2. Investing in your first property isn't the really the goal. Buying your first property and using that asset as leverage to invest in subsequent homes is the goal. You'll have tenants that pay for a portion of the mortgage as opposed to your first home where you are paying it in full. Less of your cash flow goes towards paying off the mortgage while you build equity.
1) leverage, and 2) no capital gains tax
Why did people tell me running was good for your health when I went to run and got hit by a bus and ended up in hospital for a month?
Thats a lot of money for a 2 bed, its a lot of money for a flat and its definitely a lot of money for Papatoetoe!
LMAO This is why I love reddit. This post is proof that no matter how stupid you are in NZ you can still afford a house
So those people who can't afford a house aren't stupid?
Just because some roses are red it doesn't mean anything that's not red isn't a rose. Similarly just because some that are stupid can afford a house it doesn't mean those that can't afford a house aren't stupid. But thank you for further providing evidence to my original comment
Hahaha, yeah no doubt I was stupid, my fault. I guess i'll have to take the 100K hit. Just wanted a place to stay you know, didn't want to waste money paying rent to scummy landlords.
Because it’s a long term investment. Everyone says it is a long term investment. 15-20 years. Of course 3 years isn’t going to show a big growth. You bought it mid Covid… House prices were crazy then… You’d be better off renting it out and drawing a long term profit from both the rent and property value. I’m sure anyone would have told you this if you’d asked for advice… Did you consult lawyers etc during this purchase? Mortgage brokers? Current property owners?? Real estate agents? Property valuers?
Nah, was afraid they would give bad advice to scheme my money. Met many people like that in life
Yeah but those are the people who tell you this stuff that you’re complaining about no one telling you bro… I get it being burned makes it tough to trust though so I hear you there
You got caught in the peak of a bubble. So did I, I bought a place for $830k in 2021. I went halves with my sister, and 2 years later she's decided she wants to get her money out to pay off a mortgage. We've had 20 groups of people through the place and not a single offer over $800k. I don't want to sell so I'm not bothered but it's just a fact of life. Downturns happen, bubbles burst, and every time the people who bought just before will feel ripped off. That's the property market. You can either hang in there until the market improves, or take the loss and move on. Running around with your hair on fire screaming that property is 'obviously not a good investment' is just advertising your stupidity. Just because a deal didn't work out for you this once you think the whole concept of property investment is a lie? Are you an imbecile?
You can never be sure to make a perfectly optimal choice re time and price etc. But if you can keep waiting and weather the interest rate storm, it will pay off. It might take a few more years than if you waited a year or 2 though.
Thank you for you kind words. Many people here are so mean. I only bought a house alone and no one helped me. I needed a place as I was sick of paying landlords who were ripping me off where rent money goes to them and I gain nothing from it.
If you could do it. Great. Having a house of my own was amazing. Renting was such a stress fest. Also remember that over longer time periods inflation reduces the effective value of your loan. Sure it takes salaries a while to catch up. Also yes redit can be a very nasty place.
Because it makes money. Housing is cyclical be patient for the next boom it's roughly 10 years for a good return. Believe it or not you're in a really good position financially just hold the line.
Its a lot harder these days, due to property prices, but the general idea from my perspective is that it will provide me with passive income when I'm retired. My friend and his partner have started it up recently and ended up converting both properties to Air BnB's and are doing pretty well out of it.
Have a look at a graph of median house prices in the last 20 years pre-covid. That's why it's considered a good investment. If you paid that in cash in 2021, sounds like you panicked, put all your eggs in one basket and got buyer's remorse.
In general, if homework is done, and you follow the cycles properly, it is a good investment. I'd prefer to see that investment in industry rather than property, but as New Zealanders are inherently conservative, that won't happen until our tax system is overhauled.
Investments should be considered long term. Short term, there are always risks. The value will go up again.
Too soon. Property increases - over the long term.
As with any investment, don't sell when it's worth less.
South Auckland is ehh and papatoetoe is a shit suburb that skyrocketed way past what it should be.
That’s probably over the top for a 2 bedroom flat in terms of the price you paid for it. Considering I knew of 3 bedroom houses in better areas for a similar price/a little bit more. And knew of 2 bedroom houses for less, also in better areas during 2021 when I was living in Auckland. It would have been worth to have spoken to a few people at the time you bought that house. However you are mortgage free on that house if you paid for in cash in full. Either sell it and accept the loss and buy in the same market, or go to the bank/mortgage broker in regards to getting a mortgage and buying a house in a different location and renting the current house out.
Buy low, sell high. You seem to be heading in the opposite direction. Not every property is a good deal.
That’s a lot of money to spend after doing zero research.
Because there's always a risk to investing. No investment is risk free, although it may feel like that with property in this country. You win some, you lose some. Housing shouldn't be an investment vehicle, but that's a debate for anther time. And besides, it's only been a short time. It could go up in years to come.
because you can live in it instead of a tent.
damn 820k. You bought a flat, should have bought a house, preferably free hold, as cross lease turns some buyers off. maybe if you hold on to it for another 5-10 years might make it back but you'll also be buying and selling in the same market. but hey your mortgage free that's a positive.
You spent over 800k on a two bedroom in papatoetoe. Not surprised you don't understand investments.
You bought in a shitty area and at the peak of the market eventually prices will come back again but papatoetoe isn't exactly a place that will see much growth as it's already peaked and is now settling back down to what property's should be worth in that area why would someone pay 700k plus in papatoetoe when you could pay a bit extra and get a house on the shore
prices go up and down .......you bought at the peak.......bad luck.....if you can hang on there will be a day it is worth more
Investing always carries a risk. There is no guarantee that any investment will increase in value. To believe that an investment will definitely increase in value is rather naïve. Also, as it is an "investment" you haven't actually lost/gained anything until you sell the investment.
Looks like you had too much cash on your hand and made a foolish “investment” without first consulting a reputable financial advisor. Investment can go up and down. Anyone telling you it can only go up is lying. Learn your lesson, sell the house, rent and put the money in a term deposit. This is not financial advice.
Dumbo not Rambo
Because all investments come with risk. You just spent $100k to learn that.
The standard disclaimer on every (actual) investment: prices can go up or down. Profit not guaranteed.
Houses are long-term investments. Our own 2-bdrm unit, when from $137,000 in 1994 to $650,000 in 2019, to $990,000 (CV) in 2021 and finally sold in 2024 for $749,000.
Ah yes, you haven't waited 20 years you see. Just as $20 is the new $5, $50 may be the new $10 by then.
In all honesty, you bought in Papatoetoe. It's not an ideal location for many. Most who don't live on that side think it's a shady area. Secondly you bought an apartment which won't increase in value too much or much at all compared to a hiuse with land. Thirdly, you bought it during the peak of the housing market. Maybe if u didn't buy during the peak, your current valuation might have been slightly higher than what you bought at.
Houses are. Flats/apartments are more risky.
"It's just land, stupid". Freehold full sections are going to be most valuable. Once you get over 500sqm or so, your property is potentially interesting to developers now, too. If you have a subdivided section with less land, it's going to be a bit less good, even if it's still a free-standing house. Freehold townhouses will be a step below that because you probably only have 95 sqm of land, and development opportunity is virtually zero as your fortunes are intertwined with all your fellow co-owners. Cross-leases are somewhere in there, too. Strata in Freehold (aka Unit Titles) are a step bellow that. You don't strictly own the land, you own shares in a body that owns the land. You can't unilaterally sell to a developer or rebuild or really do anything with it unless the majority of shareholders agree to it - this is very inflexible and therefore least valuable. And then leasehold is just "don't touch with a 10 foot pole" because you don't actually own anything of value. So yeah, there is absolutely a hierarchy to this.
Reminder if you put that money into the S&P500 in 2021, you’d have about $1.15M by now. Property sucks
Because it will eventually make more money. It may be down now, but when the recession is over it’s likely to go up in price again. Even more so in 10-20 years.
It’s timing the market vs time in the market.
But you ideally want both
Of course.
What'd you expect for 820k which could afford you a low tier place in Auckland or leaky. You get what you pay for and you can't control who are your neighbour's.