New house price vs 5 year old house price -what does it say about the market

Hi all,

Just trying to work this out

Example:
New house price (to construct) is 400k
Existing 5 year old house price is 360k (10% discount)

Assume the built is of similar quality and its just across the street.

The new land release of 24 lots have been snapped up.

What does it say of the area?

Thanks all for your views
 
Hmm not sure it says too much about the area...but the difference in price is largely a result of a depreciation in building value and first home owner incentives adding to demand for new stock.

Untested hypothesis with new stock...generally prices fall (marginally) before they rise.
 
Just like a brand new flash car - you tend to pay a bit of a premium....which drops quickly once you're out on the road.

FHB concessions, as mentioned above, prob inflate them a bit too.

Cheers

Jamie
 
Yes - Don't under estimate FHB concessions. Maybe even GST on the new builds is a small issue too. Keeps new build prices up and forces those who "need" to sell to drop their pants a touch to compete.

Same occurs with used cars. Its a reason why car dealers can claim a partial GST credit on cars they acquire from unregistered buyers .... Just wait till GMH, Ford, Toyota shut shop. The docks will be filled with imports that are six months old that will see prices plunge on drive away. At moment the import tarrifs avoid the issue. Free Trade agreements will be open slather on imported cars soon. Japan, Korea will dump used cars here.
 
Same occurs with used cars. Its a reason why car dealers can claim a partial GST credit on cars they acquire from unregistered buyers .... Just wait till GMH, Ford, Toyota shut shop. The docks will be filled with imports that are six months old that will see prices plunge on drive away. At moment the import tarrifs avoid the issue. Free Trade agreements will be open slather on imported cars soon. Japan, Korea will dump used cars here.

I completely disagree, with brand new subsidised local cars removed from the market there is scope for substantial price increases. and the days of the 2 year old 6 cylinder for half of new price will soon be long gone

having said all that, what's this about 6 month old imports on the docks? who do you propose will be bringing them in? private entities aren't allowed to and I can't see the manufacturers bothering when they can gouge on their new stock.
 
often the brand new houses will sell cheaper than established because developers generally have to sell, as opposed to owners that generally do not
 
I was told recently that building townhouses and holding as rentals would see them lose some value (5 percent or 10 percent from memory) compared to selling as brand new and shiny and that it would take about five years for the value to come back up. People will pay a premium it seems to buy brand new, never lived in.
 
Same occurs with used cars. Its a reason why car dealers can claim a partial GST credit on cars they acquire from unregistered buyers .... Just wait till GMH, Ford, Toyota shut shop. The docks will be filled with imports that are six months old that will see prices plunge on drive away. At moment the import tarrifs avoid the issue. Free Trade agreements will be open slather on imported cars soon. Japan, Korea will dump used cars here.

We actually have some pretty restrictive non-tarrif barriers for used cars - namely the ADRs. You'd be surprised how difficult it is!
 
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