Australian Financial Review reports today “NZ Housing Market set to Slump” (page 63).
I’m poised and ready to jump into the NZ market and am interested to hear other opinions on this article in relation to the effects on +ive cash flow investment property. Is it a good thing, bad thing or nothing?Regards
Richard
Richard
I’ll give a disclaimer first – I think chasing CF+ property is a poor strategy. That out of the way I’d say if you intend to hold the property long term for it’s cashflow then the fluctuation of value has no effect on you unless you wish to use equity to fund future purchases or banks get into a margin call situation if values really dive below loan balances and they get nervous.
Australian Financial Review article “Queenstown’s Gold Rush” [May 14th]
http://afr.com/articles/2004/05/13/1084289853898.html
“House Prices still on Rise..” [May 27th]
http://www.stuff.co.nz/stuff/0,2106,2921452a13,00.html
Articles referring to a market “slump” fit in the same category as those predicting a “crash”. The statistics are too broad, many factors are not taken into account, and regions or segments of the market which will not be adversely affected due to supply and demand, and other factors, are overlooked.
How many of the economists/analysts who predict slumps and crashes really understand real estate investment, or any form of equity investment – it would be interesting to know.
Take from the media what you need too as an investor, then do the homework to understand the affects such claims have on your investment strategy.
— Michael
Hi michael
great response again. I remember hearing Dolf De roos make a comment on how the media loves the stock market but talks the property market down. This has stuck in my mind over the years and it is so true.
I’ve noticed if a journalist talks to one so called expert who says the market will slow down and 2 others who predict strong growth the headline will be something like “market set to fall”, its only when you read the small print you start to see what they are saying. As far as economists go- in the past i’ve made it clear on this forum what i think of economist, not many of them make it to the rich lists, suprising with all their superior knowledge.
Richard i feel the days of buying properties returning over 10% returns in NZ is disappearing- its Australia all over again. even if the markets in Auckland slow the interest for cash positive is exceeding demand. This interest isn’t just from the local market it comes from the UK, HK, and Australia, it sometimes feels like the whole world wants a piece of New Zealand.
Anibus as far as a poor startegy ??? if you buy right its a top strategy.regards westan
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