22 May 2015

Home Truths - buying and selling in an overheated market

9:13 am on 22 May 2015

The first thing real estate agents ask when you turn up for an open home is whether you're an investor or buying for yourself. I am buying for myself, and selling a house I have owned with my Civil Union partner for many years.

I have lived in it, it's been a rental, and also been lived in by whanau. One of my nieces was conceived in it. It's been good to me in many ways.

I've been selling my house and simultaneously looking for a smaller place for a few weeks now. And what the headlines don't really tell you is how terrifying being in the property market really is.

Eileen's former state house in Otahuhu.

Hoping to sell: Eileen's state house in Otahuhu. Photo: RNZ / Eileen Cameron

It's reached some kind of hysteria, and various moves by the Government, Auckland Council and Reserve Bank are doing very little to change the on-the-ground reality. If you own a home and live outside Auckland, stay there. It really is that simple.

I have been to a couple of auctions and wow, the adrenaline - they go off. One saw a property go for about $150,000 over what was expected. The buyer was in heart-attack territory, and the seller was trying not to explode quietly in the corner.

I am starting to wonder if I should get checked out by my doctor, in case I have a dodgy ticker and don't survive this whole experience.

At open homes, it's fun to see kids exploring the nooks and crannies of what could be their new house, while their parents try to wrangle the paper work and LIMs. Younger buyers looking more tense, very probably thinking about the great first home myth slipping away from them.

At auction, all that fun and empathy goes out the window. You're sizing up everyone else for the potential damage they're about to do to your bank account and your future. Parents ditch their kids. If the bidder on a cellphone turns up you're probably stuffed, as there's little doubt they have an investor, possibly overseas, on the other end of the line.

When I buy a house I'm going to hope Phone Man doesn't turn up, but I will be more fervently hoping there's at least one at my own auction.

Great indoor-outdoor flow - and masses of space for entertaining.

Hoping to buy: Something like this in South Auckland. Photo: RNZ / Eileen Cameron

I'm selling a former state house in Otahuhu - plenty of space for the kids to play. Check out the indoor-outdoor flow. And the all-day sun. (I've been hanging out with real estate agents too much.)

What do I want to buy? It's got to be two bedrooms, and in South Auckland. And yes, that last bit, the South part, does mean things are cheaper generally than in the city. Although, in Auckland, cheap no longer exists, and if you want the allegedly affordable house ($550,000 - around what I am aiming for) then you best think small… and pray.

I need somewhere the little white horror can be walked without being bait for roaming dogs. Where the trek from the motorway home is not an hour, on top of the hour you've already spent on it. So Papatoetoe is prime territory. Anywhere with "heights" "gardens" or "park" in the name; parts of Manurewa near the Botanic Gardens. Maybe East Tamaki.

The little white horror, looking at his most horrible.

The little white horror, looking at his most horrible. Photo: RNZ / Eileen Cameron

The key idea is to sell, then buy very quickly. In this super-heated market, every month means prices can go up by roughly $20,000. Those who hesitate are lost. I'm also intensely aware I'm a rank amateur, and even more aware this could all go horribly, horribly wrong. So no pressure, right? Yeah, right.

Over the last few weeks, since putting the house on the market, I have been driving around open homes. I've seen some very good things out of my range, and some very bad things in it; the best of wallpaper, and the worst. The best of real estate agents, and the most incomprehensible. It's actually quite crazy out there.

Last weekend, I accidentally ended up getting a seller an extra $20k when the extremely charming agent took bids after the auction ended from non-registered bidders. That apparently conforms to the rules, but it's a cunning trick.

There are a lot of cunning tricks, I am learning. I was conditional on finance at $500k, and the successful (thank God, don't look Deshpal - my bank manager) person was a cash buyer, which I will hopefully be in a couple of weeks.

My weekends are about looking for places, and I will live blog a bit of that. And live blog you through the auction, as my place goes under the hammer. Assuming the aneurysm is just a figment of my imagination, of course. Sudden silences may indicate key decisions, or death.

No pressure, right? You're welcome to come along for the ride.

More stories on the overheated property market

  • CGT will net 2 percent of sales - Labour
  • Investors question house tax move
  • Govt to tighten tax on capital gains
  • Buyers sceptical over Auckland lending rules
  • Bank acts to cool Auckland market
  • Bad time to buy a house, public believe
  • MP property debate shut down
  • House prices 'hold NZ to ransom'
  • Migration, speculation 'fuels housing bubble'
  • New records for housing prices
  • Auckland drives housing price rises