Fri, 04 Sep 2009 12:00a.m.
Opinion - By Brian Dalley
For those that haven’t yet heard the racket, housing affordability alarm bells are ringing.
Take haste as the fire-fighters do - this isn’t a drill, it is the real thing.
I am not going to generalise, but rather leave it up to you to confirm for yourself if I am right or wrong as prices in your area may still be falling, but from what I have seen, whoever activated the alarm bell rightly did so.
If you are thinking of purchasing / investing in residential real estate, now is the time to take action as many may not get another chance to do so.
Am I predicting another property boom, NO! What I am predicting is this; “It is unlikely housing will ever be this affordable again.”
Governments the world over and ours is no exception, require huge cash injections to weather the storms so I would think one could reliably assume that the hand will [ take ] rather than [ give ] so I find it very hard to understand why anyone is still pondering the [ should we ] or [ shouldn’t we ].
Recently there has been a growing trend to shift the risk and responsibility to parents to act as guarantors of which I am not in favour of.
Don’t get me wrong, I think parents within reason should support their kids but just not as guarantors.I prefer parents purchase the property as an [investment property] then rent the property to the family member to cover the costs.
At a later stage when the kids meet bank lending criteria the property can then be sold back to them for the balance owed on the property.
There are several advances to financing in this manner.Another popular method of getting on the property ladder is joint ownership.
Three people for example purchase a rental property and together with the forth [ the tenant ] and the fifth contributor [ the IRD ] they quickly reduce the debt and use the property as leverage to purchase more.
Then at a later stage, cash up and go their own way...Can you hear the ringing in your ears yet? Tenants stay where you are, all will be OK. Those in the middle of the road, please either move to the owner’s side or the landlord’s side.
For those still struggling to make a decision I would suggest they take heed of this little gem [standing in the middle of the road is very dangerous as you will get knocked down by traffic from both sides] and I am picking that over the next few months there is going to be a frantic rush to invest in affordable property before it is all snapped up.
Remember, there is only limited stock available and the bells are already ringing.
Brian Dalley is a leading Property Consultant | former NZMBA Mortgage Broker, and Real Estate Agent.
You can read more of his views and opinions on his website www.propertyprofit.co.nz