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I've been overseas with my family and took a break from sending newsletters. I'm back in Auckland and on schedule to write you again. I appreciate you reading here!

You will learn:


● 7 Reasons Why Auckland House Prices Are NOT Going Down
● Would You Pay $320,000 for a 42 m2 LEAKY Apartment in West Auckland?
● New Online NZ Platform Matches First-Home Buyers With Property Investors


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7 Reasons Why Auckland House Prices Are NOT Going Down
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🕑 2-minute read

October house price data confirms the August decline was a blip. Seasonally-adjusted house prices in October were the highest in 20 months, and are now only about 1.7% off the peak in October 2016. 

7 Reasons Why Auckland House Prices Are NOT Going Down:

1) existing housing shortfall,
2) Auckland GDP still growing in the mid-2s,
3) stable and low unemployment in Auckland,
4) ongoing strong net immigration,
5) record low interest rates,
6) recent stronger income growth,
7) canning of the capital gains tax

Source: David Norman, Chief Economist at Auckland Council

One reader suggested the following factors that have been responsible for stopping prices GOING UP:

1) the Unitary Plan, which has enabled a lot of development that wouldn't have otherwise been possible.

2) Possibly the ban on foreign-owned housing. May not have affected the median house price but it's certainly deflated the upper quartile, at least.

Have I missed anything? What do you think will happen in 2020?

 
Would You Pay $320,000 for a 42 m2 LEAKY Apartment in West Auckland?   
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🕑 2-minute read

The Ray White agent is asking $49k + estimated $270k share of the rebuild. It is just a one-bedroom unit (1C/30 Westward Ho, Glen Eden).

Since it is a leaky building then you'd have to stump up with a lot of cash. Don't people have better investment ideas for that much cash?

The ground-floor apartment is part of a large Glen Eden complex with a gym and has plans for a refurbished swimming pool (another "no-no" for an investor!)

The current build cost estimates were made by a quantity surveyor - a professional, whose job is to figure out construction costs. I hope it is a different QS, not the one that estimated the original costs of the SkyCity Convention Center :)

While the apartments currently have tenants, they may be forced to vacate during the rebuild (very likely!), meaning potential buyers could endure a period without rental income (roughly extra $20k per year of lost rental income).

That unit wasn't the only one for sale in the complex. Barfoot & Thompson were selling apartment 19E for $65,000 and apartment 7D for $81,000. Last November, the agency also sold 5E for $75,000.

I wonder who are those people who buy these leaky apartments and what's their plan? They can't be stupid if they have $200k-$300k cash.
New Online NZ Platform Matches First-Home Buyers With Property Investors
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🕑 2-minute read

What do you think of the new online NZ platform Levridge aiming to match first-home buyers with everyday investors?

Those with money to invest, put up a 20 percent deposit and those who have an income, but don't have enough to pay a deposit, take on the mortgage and live in the house.

After five years, the house can be sold and the two parties split the capital gains 50/50. Amy Wilkes is director of online house-buying platform Levridge.

What it costs to buy or invest?

FOR BUYERS

In summary, a first home buyer is likely to have upfront fees of approx. $3,000-$4,000.

FOR INVESTORS

In summary, as an investor you will need to have sufficient capital to invest 20% of the value of the property, plus upfront fees of approx. $10,000.
"I hated every minute of training, but I said, 'Don't quit. Suffer now and live the rest of your life as a champion.” ― Muhammad Ali 

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Hi, I'm Maxim, the human behind this newsletter.

I research and interview economists, tax advisors, property investors etc. to find tools & tactics that YOU can use to save money and time.
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