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Building consents down in May, reversing April's jump as budget and rate hikes worry home buyers

Posted in News Updated
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Statistics NZ figures show house building stuttered in May on a seasonally adjusted basis as home buyers eyed up potential changes to property taxation rules and a likely rise in interest rates.

(Updated with comments from ASB economist Jane Turner on the outlook for housing being subdued as rates are hiked)

Statistics NZ said seasonally adjusted dwelling consents, excluding apartments, fell 9.5 percent in May from April, after rising 13.4 percent in April in from March.

"The trend has been increasing since March 2009, but remains at a low level," Statistics NZ said.

Including apartments, the seasonally adjusted number of new dwelling consents fell 9.6 percent, after rising 8.4 percent in April.

"The seasonally adjusted series reflects short-term behaviour and in recent months has been influenced by increased variability, which differs from the normal seasonal pattern," business statistics manager Louise Holmes-Oliver said.

ASB economist Jane Turner said a recovery in building demand last year was now losing momentum as rates were increased and tax changes made property less attractive. However, she still expected the Reserve Bank to push ahead with further rate hikes as the drivers for economic growth shifted to the export sector.

Demand for new housing has started to peter out in recent months, with the RBNZ set to steadily increase interest rates over the next year. In addition, recent tax changes have reduced the attractiveness of investment property at the margin.

Population growth will also provide less support to housing demand over the next year. The pace of permanent arrivals has slowed over the past year while permanent departures, particularly to Australia, have started to pick up.

The outlook for the construction industry remains subdued. Domestic-led drivers of economic growth are likely to be less of a force over the next year, with growth to be led by export-exposed industries. With the export-led recovery in mind, we continue to expect the RBNZ will increase the OCR by 25 basis points in July, and continue to gradually increase the OCR over the next year.

See more detail here at Statistics NZ

Here is our interactive chart below.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment in the box on the right or click on the "'Register" link at the bottom of the comments.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current Comment policy is here.

204 Comments

The new normal would be a

The new normal would be a more accurate description of the market. There are NO reasons why the trend should change from what it currently is...flat to falling. Here we are in the great recession...who has the loot to build..very few. Throw in rising costs and greater govt theft if you build..why bother!

More to the point, those who

More to the point, those who do have the loot to build are not going to waste that loot on yet another building.

It seems to me that we're about to witness an inter-bank interest rate war over savings and TD business.

Sad but true. Sad because

Sad but true.

Sad because right when everyone is going to be finding it so costly to live, we will not have energy efficient homes to do it in or the infrastructure for efficient living. So not only will lots of people be out of work, with food and energy prices as well as taxes through the roof, but we'll be sitting at home in poorly insulated (and in NZ probably leaky) homes.

Many of the papers dealing with the subject of 'transitions' to a post oil economy (what I believe we are seeing now; economic collapse being one of the first stages) talk about vast outlays being spent building passive solar homes. This can only happen if it's done before the crisis arrives. Sadly I think we're too late. Well, actually PowerDownKiwi is in time, but it's not looking good for the rest of us.

This is of personal interest to me, being in a situation where I want to buy a home, but not having enough cash to buy outright. If prices do fall quite a lot I will be able to buy, but the typical NZ home falls far short of what I think is required (in an energy sense). The alternative is to build (I would love to), but I know people who have experienced the wrath (vampire squid like behavior) of councils to suck considerably sums of money away from anyone trying to do anything productive. Plus, when you think prices are going to drop (I do) it seems crazy to do anything right now. In a couple of years though, it might be too late (maybe crazy talk, but with the west heading for collapse/default I'm pretty sure uncertain times like we've never experienced in recent times are ahead).

Oh well, time to stock up on gummybears maybe?

Buying and/or building

Buying and/or building residential property is NOT productive.

I agree, a house doesn't

I agree, a house doesn't produce anything. We can't _all_ become better off by buying homes off of each other. Housing is an expense - a cost of living, like food. What I am saying is that there are a shortage of cheap to run houses in NZ; houses that are small, well insulated, with significant solar 'gain'. I believe we'll look back in a few years and have regrets about the houses we'll be living in, that's all.

To answer the other poster, I'm over 30. Please tell me why this is relevant; I'm curious.

I'm also concerned about this

I'm also concerned about this issue. Maintaining an existing energy inefficient home will become very expensive soon. But the cost of building will also increase as it is an energy intensive process. Particularly if you choose high thermal mass materials like concrete, instead of timber.

There are, however, some promising alternative methods of construction. Here's one that uses only sandbags, barbedwire, dirt and cement (or lime). Apparently quite easy to build.

http://calearth.org/building-designs/eco-dome.html

I'm not sure if council will consent to it though. When I finish off my current projects I'm planning on giving it a go.

I assume you are less the 30

I assume you are less the 30 years old?

right on the head of the nail

right on the head of the nail Wally and if the numbers jumping the ditch keep growing !!!!! well who knows???big downside potential still

This has got me wondering -

This has got me wondering - what are the figures on remodel/extension permits? New builds aren't the whole picture. I'd be interested in knowing what the figures are on conversion from single dwelling to separate flats, addition of rooms, granny flats and the like. If there is a trend towards more people consolidating into fewer dwellings, the figures on conversions and alterations could provide evidence on whether that's the case.

anecdotally I remember the

anecdotally I remember the dom post had an article a few weeks back that said just that. Extended family situations etc.

Yeah, I've seen a lot of

Yeah, I've seen a lot of speculation, and it's a reasonable assumption that in a period of recession and high unemployment people are going to consolidate, live with relatives, get boarders for the spare room and whatnot, but so far there isn't much in the way of hard data.

Kakapo, The Stats NZ figures

Kakapo,

The Stats NZ figures show consents for NZ$84 million in May for dwelling alterations and additions. This is up from NZ$82 million in April, but down from NZ$83 million in April a year ago and NZ$92 million a year before that.

It doesn't look like renovations are doing much better than new home building. They have been flat at around NZ$1 billion a year for the last five years.

cheers
Bernard

Thanks for the info. Looks

Thanks for the info. Looks like there isn't too much to be gleaned from that without being able to distinguish the flash new bathrooms from the granny flat conversions.

Bernard and Kakapo: you need

Bernard and Kakapo: you need to recall that one of the characteristics of a transition phase is that the old rules just stop getting applied.

In building terms, interior conversions are dead simple if a few basic precautions are taken, and one reason for the dearth of 'official' stats is - the conversions are being done in the black, not the white economy. I predicted this - oh - some time ago, and tell me it ain't happening...

Bottom line: you simply cannot trust 'official' stats during a phase change.

I would want to know more

I would want to know more about council procedures as well. Such as, if the guy who rubberstamps the forms goes on holiday leaving a pile of applications stacked up in the in-tray, what date are they registered for stats? The day they came in, or the day he finally processes and approves them? If the latter, do they allow for hiatus and catch-ups?

Good point, but you are

Good point, but you are assuming the conversion is being permitted at all....

And the answer to your stats q is that the date of issue rulez.

And recall that incompetents like ECan were behind at one point (from the statutory 20 working days issue operiod) to the tune of 70%.

"...I'd be interested in

"...I'd be interested in knowing what the figures are on conversion from single dwelling to separate flats, addition of rooms, granny flats and the like."

You are allowed to convert multiple flats into single houses no problem. Going the other way is almost impossible under the RMA. Reducing density (which increases prices and is environmentally destructive) is allowed. Increasing density (which lowers prices and is environmentally responsible) is one of the hardest Resource Consents to get.

"...I'd be interested in

"...I'd be interested in knowing what the figures are on conversion from single dwelling to separate flats, addition of rooms, granny flats and the like."

You are allowed to convert multiple flats into single houses no problem. Going the other way is almost impossible under the RMA. Reducing density (which increases prices and is environmentally destructive) is allowed. Increasing density (which lowers prices and is environmentally responsible) is one of the hardest Resource Consents to get.

the number of empty rentals

the number of empty rentals where I live is some indication.Inspite of that property managers are still beating up a shortage.

Don't think there are any

Don't think there are any empty homes in my street, but then it's a good area with mostly owner occupiers. You obviously live in rentsville.

Sophistry. Most of the houses

Sophistry.

Most of the houses on your street wouldn't sell for anything like the prices the owner-occupiers would demand, if they sold at all.

The property market is DEAD and will remain so for a long while.

Those lucky enough to not have to sell will try and ride it out, but there will be many more - MANY more - whose debts are so great that they will be forced to sell and to take whatever price they are offered.

It's a buyers market, but nobody is foolish enough to buy now, not when prices still have a long way to fall. No, the fools all bought when prices were high.

Lucky no one wants to sell

Lucky no one wants to sell then. Only one property has been listed in the last 12 months - and it has listed twice. A guy down the road brought for $550 12 months ago and sold for $650 a couple of weeks ago. The new owner got tucked, but everyone else seems pretty content. We would be the next newest to the street and we bought 18 months ago and took advantage of some distressed vendors.

Can't see us wanting to move anytime soon either - we bought thinking of living here for 10 years plus and if we do move we will be upgrading so should come out better off in the change over.

They don't list because they

They don't list because they can't sell them for what they expect to get.

A few people I know have

A few people I know have owned their homes for 20 years plus.

Are you saying that the only reason they haven't sold is because they can't get the price they want? Seems a bit over simplified. Are they not allowed to enjoy their homes and the areas they live? Most in my area bought for the schools and facilities - so are probably looking to stay for a few years anyway.

Did you buy your houses

Did you buy your houses because you plan to live in them all? That's be a neat trick. I thought you were a "savvy investor" type. Are you now saying that it makes sense to buy a home and live in it for a long time, rather than drooling and gibbering and racing out to buy "investment" property at high prices from which you intend to become rich! Rich! RICH!?

Make up your mind, mate. You're beginning to sound like one of those flustered and desperate investor guys with huge debts watching the market sink away and leaving him with the peak-price mortgages.

Think you have me confused.

Think you have me confused. Can you provide a link to where I say I own more then one property? I sold my other properties a few years ago now. Have only owned 1 property since Dec 08. Capital gains helped pay the mortgage off, but no more property investment for me - other then my own mortgage free home.

I am buying.Taking advantage

I am buying.Taking advantage of the negative people out there.

There can be a long lead time

There can be a long lead time between the time of purchasing a section and the time of lodging a building consent. Our 5 future neighbours who purchased around the same time as us in Oct 08 have not yet lodged for consent and except for one, apparently won't anytime soon. I am wondering the point of having paid for land that is unused, and probably mortgaged, while also paying rates for another house. I guess there may be quite a few people out there stuck with a section purchased when many people thought things were possibly going to be OK in the end, and now can neither build due to lack of finances nor resell (except to make a loss).

that seems to be common, not

that seems to be common, not only in exclusive subdivisions.I know one new home owner that had bought an built and then had to endure many of the unsold sections of the subdivision being fire saled for half what he paid for his. He approached the agent who didnt seem to care,nearly ended up with the police attending

Price contagion is going to

Price contagion is going to get a lot of people into trouble.

But why *should* the agent

But why *should* the agent care? As far as I'm concerned, all RE agents can go drown in a septic tank, but in this case I see nothing but a clear case of Caveat Emptor.

Property investor suckers need to learn that "Ya can lose with houses, maaaaaaaaate!!!!11".

yes why should the agent care

yes why should the agent care I agree. But maybe it would have helped if he didnt say that living up to the stereotype many have of them,As bottom feeders with no conscience beyong their commission living off mans desire to have more of nothing. I feel sorry for the decent agents out there that do care

Mmmm...sorry, I still can't

Mmmm...sorry, I still can't agree. Yes, RE agents are slime, but a sucker is a sucker, and a fool and his money are soon parted, especially property investor fools.

not a pi, just a young couple

not a pi, just a young couple who made the mistake of buying on snob value. At least the kids have plenty of area around the house on which to play. Empty sections

So you live in a area with

So you live in a area with lots of empty homes and bare sections. Are you and your mate the only inhabitants of this magical land?

If Real Estate Agents are all

If Real Estate Agents are all slime then why on earth domost people use them to sell their property . Why because people trust them to get a good price rather than their selves!!!

That's weird. Nobody had

That's weird. Nobody had forced him to sign on the dotted line I presume. Maybe he should have negotiated the section price a bit harder if he wasn't satisfied. And how are the firesales relevant to him anyway, if he has already built and is living there? They would have taken place quite a while after he bought himself so prices can't really be compared anymore (the market does change, that's the game!). Approaching the agent, presumably to get some money back, seems a bit like one of my 3-year-old tantrums!

Why is it that people are

Why is it that people are perfectly comfortable with upwards price fluctuations, but can't conceive of downwards? Either he was ignorant of the risks or stupidly chose to ignore them.

Because people who belive

Because people who belive that prices can only ever go up are "positive!" and "achievers!", while those who believe that prices can go either way are "negative!" and "losers!"...oh, not to mention "jealous!"...

So here I am: just another jealous and negative loser, with my million+ in the bank earning screeds of interest, my freehold home and beach house, no debts and no worries...Maybe I should end the misery and kill myself?

OMG you don't have a

OMG you don't have a succession of crappy rental houses in Tokoroa and Stratford??? What kind of pathetic loser would want a million in the bank and diversified assets when they could have a vast empire of heavily mortgaged wooden boxes with leaky pipes and rusty guttering? No wonder you're so bitter and resentful. ;-)

Congrats on not being greedy.

Congrats on not being greedy. If more had done it your way we would not be in the situation we are now in. A lot of financially stressed people who cannot sell their homes, sections and investment properties and if they can the debt on them is not being cleared.

I have 2 million in the bank

I have 2 million in the bank made from tax free capital gains.....

I've got over 3 million!....

I've got over 3 million!....

What only a million! Crikey

What only a million! Crikey it's amazing what people will write.

Doubt whether you will be

Doubt whether you will be getting screeds of interest Anon. If you have plenty then you need to invest it in other things than the Bank. Property I would say.

Anyone with over a million

Anyone with over a million dollars is usually smart enough to not have it in the bank where you lose a third in tax and get zero capital growth...

firstly he would concerned

firstly he would concerned about the value loss. I say who cares
2ndly he didnt approach the agent. The agent told a group of interested parties "you dont want to be like that dumb arse up there, you can buy for this price" He got to here about it.Next time he saw him in the subdivision he approached him to ask he not tell his prospective neighbours that he was a dumb arse. The agent then further abused himto his face and so on

He paid too much. He didn't

He paid too much. He didn't do his homework. And RE agents are slimy scum.

It's like buying a car: you KNOW everyone involved is trying to shaft you in some way, so you have to be extra careful.

These days of course it's much easier, because the agent is thrilled that somebody is actually willing to buy property now, although they pretend not to be, and you can offer less than half the asking price and know that their laughter is hollow, and they'll be calling you back within the day asking if you're still interested because the seller is willing to "negotiate". (Meaning he's desperate to sell and will take whatever you have, and bugger the greedy RE agent's commission expectations.)

That would have had me fuming

That would have had me fuming too!

Sadly I know some good agents

Sadly I know some good agents and they to are sick of idiots like this being in there industry. They are finding out to there dismay legislation cant change peoples behaviour

Long lags on getting the data

Long lags on getting the data because of Council delays and inertia. It'll be a long time before the real picture emerges.

Everyone seems to have gotten

Everyone seems to have gotten overly optimistic outlooks on the back of an one upward blip in employment and one upward blip in construction. The reality is that the domestic economy is so fragile, credit so constrained and confidence so fickle that slightest push on interest rates will implode the country.

Bollard hasn't learned this yet.

His colossal bulls up in 2003 has got him so skittish that he is sending us down the deflationary depression path without realising it, and will then only shove back to the inflation road after he sees the country in ruins.

With higher construction costs, lower house prices and tight credit limiting supply while demand pressures boil, the outlook for housing is another boom a few years down the track after the current hurdle (or was that a real estate canyon) is negotiated.

What an opportunity to pick up the pieces from those who fall into the abyss over the next few years or are too frightened to take the jump.

By the way is it just me or is Stats NZ seasonal adjustment look suspect. Consents were actually almost flat between April and May yet "seasonally adjustment" gave 10-13% swings? April did only have one public holiday on a week day this year after all.

"[Bollard] is sending us down

"[Bollard] is sending us down the deflationary depression path..."

Those of us who are debt free and with plenty of savings and diversified investments aren't losing too much sleep over this, but man I'd hate to be a highly-leveraged property "investor"...and how many PIs *aren't* heavily in debt? Most of them are drowning in it, and their savings are non-existent. Definitely a bad time to be stuck with mortgages.

Ralph. What diversified

Ralph. What diversified investments have you got that are safe?
Property that is purchased right with good returns would make me sleep a lot better than having investments all over the place being run by people other than yourself.

The man you are going to pay

The man you are going to pay dearly for having all your eggs in one basket. The property market has turned. It has only happened in the last two months or so. I am a RE agent who luckily does not have to rely on selling heaps as I have a diversifation of investments. I am willing to be honest which is rare in my industry. People need to accept the fact. Residential real estate values in NZ are on the edge of a precipice. There is no single factor out there in favour of property right now. We are now going to see some dramatic drops in values. I cannot put a figure on it as markets are entirely volitile when they get in the position we now find ourselves in. Now is the time when you want to be in cash and you need to be diversified. Watch out for the QV and REINZ values coming out in July for June. I hear they are going to be bad and confirm the trend of the last few months. It is going backwards and the acceleration is increasing. If anyone thinks otherwise come and join me and my colleagues out there in the RE industry. It has got very hard in recent weeks and many are leaving if not thinking of leaving.

Big rent increases will come

Big rent increases will come about now that house building is in such a slump. Profit opportunity apparent here...buy property for income.

Yes, with so many houses to

Yes, with so many houses to choose from, would-be tenants will be forced to pay increased rent.

Oh wait, no. You're an ignoramus.

Olly you are in the wrong

Olly you are in the wrong career; you should be a comedian.

bollocks, there are too many

bollocks, there are too many empty houses and to many poorly maintained houses and to many landlords willing to accept less rent from decent people rather than risk further damage to there unmaintained rental or another bunch of pfreaks

Never mind the bollocks, it's

Never mind the bollocks, it's a natural consequence of reduced supply that demand pushes up prices of the available stock. An example is strawberries at Xmas time in the supermarket.

Rent increases take time in the housing market of course so it won't happen overnight... but it will happen.

It is my opinion that in many

It is my opinion that in many areas there is an oversupply. You will have trouble getting these stats out of anywhere because to many people have an interest in us not knowing what they are showing. If the current lets get over the ditch trend continues there will be no oversupply

an oversupply sorry

an oversupply sorry

Troll. There's already an

Troll.

There's already an over supply in most areas.

Tenants are harder to find now too.

So you have a rental property or five and struggling to get tenants.

What do you do? I know!

PUT THE RENT UP!

That'll have them pouring through the doors, and any tenants you already have will name their first-borns after you!

What a plan.

Yeah right Olly. We've been

Yeah right Olly. We've been hearing the same story from landlords for the last 3 years that rents are going to rise. Since mid-2007 they have gone absolutely nowhere. See:

http://www.interest.co.nz/charts/real-estate/rents-median

All your imaginary 'increased demand' just disappears as people double up, sublet rooms, move in with friends and relatives and continue to respond in an entirely rational manner to the new reality of prolonged hard times.

Rents haven't gone up since

Rents haven't gone up since '07?? Which planet are you talking about?

I've been renting the same

I've been renting the same house since November 19th, 2003. I am still paying the same rent now as I was when I signed the tenancy agreement. Probably that's because the house has never owed the owner anything since the day it was built back in the 1970s.

And before you dive in with "Ya boo wot a looser u r 4 renting and its a old house 2 ha ha what a dump it is ha ha looser!!!!11", let me say it's a beautiful place on a huge section, with mountain and lake views "to die for", as the poncy types around here are so fond of saying.

The rent is less than I was paying for a "nice" one bedroom flat in Greenlane, Auckland, before I moved down here. (I was still single then.)

In almost seven years I have saved a huge amount of money, approximately 60% of my 110k+ salary annually, even as I - and my young family - live a wonderful lifestyle.

Money in the bank, money in diverse investments, no mortgage, no debt, no worries. It's great. Everyone should live like this. :)

Obvioulsy not paying tax

Obvioulsy not paying tax then?

Hi anonymous - clearly

Hi anonymous - clearly understanding graphs is not a strong point for you.....

AndyH.I have put rents up on

AndyH.I have put rents up on many of my properties in the last year and no complaints because they know they are looked after by good landlords. No empty property either so I don't think you know what you are talking about.

The man if you actually exist

The man if you actually exist your rents were probably under the market before you put them up. Unless you tell us where the properties are, what age they are and the size of them I find it hard read anything into what you are saying. For all we know you are probably just a jealous tenant trying to make himself feel good.

Anonymous.Properties are in

Anonymous.Properties are in Ch.Ch. varying ages but on average 20-30 years old. Have new properties as welland no trouble renting them as well.Why would I be a jealous tenant? Able to put rent up because we improve properties. Yes they may have been under rented before but we are nice people.

Landlords nice people. All I

Landlords nice people. All I read on this site is how landlords think people who rent are lazy and unappreciative. Landlords seem to be saying all tenants are a form of underclass. The name you use on this site does sound arrogant and superior. Why dont you use something a bit softer.

We've had 20% growth in rents

We've had 20% growth in rents since 2007.
Tenant demand seemed a bit quieter last year, but for us this year has been very good.
That's the trouble with averages and medians, if you put one foot in ice and one foot on hot coals - on average you're quite comfortable!

By "we" are you referring

By "we" are you referring specifically to yourself and your own rental property, or are you suggesting that rent in general has increased by 20%?

My assumption is it's the former, as there is no evidence to support a claim that all rent has increased by 20% in that period, if it's increased at all. In fact, most evidence suggests rents have actually decreased, if anything.

With the current glut of available property, and the looming "super glut", rents can only continue downwards.

Flak, yes I was talking

Flak, yes I was talking specifically. My point was that there is a lot of variation out there around averages and medians.

Neither frostbite nor

Neither frostbite nor roasting particulaly appeals to me! The chance is, using whatever average you like, one of those choices, the wrong one, could kill you.

"An example is strawberries

"An example is strawberries at Xmas time in the supermarket."

HAHAHAHAHAHAHA. You're seriously comparing an example of extremely short-term seasonal profiteering on an optional commodity with long-term accommodation decisions?? How extremely simple-minded.

I'm sure I'm not the only person who skips ridiculously expensive Xmas strawberries, then has a Boxing Day feast of heavily-discounted strawberries and salmon that didn't sell because they were priced too high.

I have taken to Xmas shopping

I have taken to Xmas shopping on boxing day. Some dodgy people even take gifts back, get the money back and then buy at the discounted price. Boxing day is a good way to descibe the impending next 6 months in the property market

I put the whole of Xmas on a

I put the whole of Xmas on a 2 to 3 day delay. I don't give a toss about the official date or doing things at the same time as everybody else, and deferring the whole circus by a few days saves a lot of expense and traffic and stress and craziness.

This could also describe the property market.

Xmas misers don't make good

Xmas misers don't make good property investors, so stay away from property Kakapo.

Yes, only extravagant

Yes, only extravagant f**kwits invest in residential property.

LOLOLOLOLOL!

I'm not sure I'm following

I'm not sure I'm following olly's logic, but perhaps he means that people should only buy rentals if they enjoy traffic jams, frustration, and drunken bickering.

It's a well-known fact that

It's a well-known fact that Santa charges the elves market rates.

Oh, wait.

Boxing Day is always a very

Boxing Day is always a very satisfying day after the hurly-burly excitement of Xmas.

That, RJ, will be the property market of the future. Money spent buying property and lots of satisfaction in the months following.

That happened on Boxing Day

That happened on Boxing Day 2007, Olly!

Strawberries at Christmas

Strawberries at Christmas time? They just pick them smaller, and pack more into each punnet! That's what will happen to property. The occupancy ratio is going to go back up to, and probably past, 2.6. Allied with the falling net immigration, and there's the surplus 85,000 houses that I posted for your concideration a few days ago.

It is funny how people who

It is funny how people who paid too much for their rentals believe that their expectations set the market price for rent?
If I bought a farm and paid too much for it, the price of produce does not increase just to compensate for my stupidity.
When you buy an investment property at the peak of the market and then prices fall, you will have to take whatever you can get, not what you want or expect to get.
That's the way these things work.

No, you can't lose with

No, you can't lose with property, therefore I should always get a huge return on whatever I invest!

It's a law or God's word or something.

I like the troll

I like the troll comparison...hiding under the surface quietly making money out of residential property investing. Not sure about naming first-borns after me though, although they won't be naming them after Wayne Rooney following England's exit from the World Cup so I will have a better chance now.

But seriously, I can't see an over-supply right now, let alone in a few months when summer rolls around and the economy is in better health.

But during summer it much

But during summer it much more comfortable tenting and sleeping in cars. Those people should have better health.

In New Plymouth which is a

In New Plymouth which is a pretty bouyant town the pi vendors who are selling at present say there are a lot of empty rentals on the to let market and the rents have come down. Houses that used to get $320 to $330 rental now getting $260 to $270. A property manager has just confirmed the drop in rents to me personally.

My mum rents out a house in

My mum rents out a house in Inglewood 4 Bdrm good house,good area. She has no debt and is happy to get $250 a week for it knowing she has good people in it. She used to use a property manager but they kept stuffing it up.So she does it now and has no trouble.

Not a great investment. Lets

Not a great investment. Lets say it is worth 300k. $15000 rent is a 5% return before expenses. $250 per week she is receiving is $13000 if rented for 52 weeks. That is not even a 5% return.Pay rates insurance and maintenance then tax what is in it for her. I would be embarrased to put that up as a good example of an investment. She would be better to sell and grab the higher deposit rates coming. The longer she leaves it the less she will get. The flip side is her yield will improve as it reduces in value. In Taranaki prices and sales are dropping by the day.Ask any broker or agent who would dear to tell you the truth.

the point I am making is

the point I am making is rents for good tenants could go down.

Is Bernard watching

Is Bernard watching ALL(oxford accent) day or is there a time when he is not looking

RJ All day every day. I need

RJ

All day every day. I need to get a life though...

cheers
Bernard

Nasty! The BIS has a warning

Nasty! The BIS has a warning for all of us:

"Both fiscal and monetary policy may have to be tightened at the same time, and ­before recovery is entrenched, a chilling possibility for asset markets...The picture is worse than it looks since the crisis has "permanently" reduced output, and aging costs are soaring."

That's higher interest rates for us, and more saving/less spending ahead.

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/785980...

You didnt live on Frankley Rd

You didnt live on Frankley Rd when you were a little fella did you

And let no-one forget at

And let no-one forget at least 30% of the credit that was available in the world has disappeared with the instruments that gave it birth. And all that has happened in the last 2 yrs is private debt has become GOVT DEBT around the world.GOVT DEBT = owed thye taxpayer

30%?..Unless your a Hanover

30%?..Unless your a Hanover Finance investor, still in, that @ 3.6c today has lost 83% of their purchasing power, 10% today alone, since the Allied share issue.
I know, buy houses, then! But with what? There's been a massive diution of New Zealanders wealth and purchasing power over the lat 2 years.

Sorry RJ Government debt is

Sorry RJ Government debt is owed by the taxpayer not to the taxpayer. The Treasury Bonds sold are secured against the future tax take.

John Walley

thats what I meant thanks

thats what I meant thanks John.Pushing wrong buttons.Scary isnt it that many people make no connection between govt debt the fact they have to pay it

RJ - the majority of people

RJ - the majority of people in most OECD countries don't pay any tax, so why should they be concerned. That's the problem and once the minority who do pay and then decide to stop paying, that's when it will all start to fall down.

looking at Europe, this could

looking at Europe, this could be sooner rather than later,and I have often wondered what would happen in the US if ever the middle class realized it wasnt the poor urban permanent underclass that were really ripping them but those nameless people who buy politicains at there whim

Looks like house shortage

Looks like house shortage will become even worse, thus helping prop up house prices

There will be no housing

There will be no housing shortage in the forseeable future. Neither is there one now.
We have amngst lowest ratio of people per household number on record. As the poulation ages, and the economic conditions become tighter, that ratio will rise. That's more housing that will be surplus to requirements ie: lower prices for those unused properties of all decriptions.

Out you go Weeny and buy them

Out you go Weeny and buy them up at the asking prices...think of the fat profits to be made...give us all a big laugh.

"New Zealand landlords could

"New Zealand landlords could soon find themselves facing the most severe tax regime in any developed country."

Thanks for the post Gareth.

http://www.interest.co.nz/news/new-zealand-landlords-face-most-severe-ta...

I told you we were different.

I told you we were different.

Surprise surprise. I wonder

Surprise surprise. I wonder if the reserve bank have any other option other than increase the OCR to battle inflation while the economy is brought to its knees...

Sit back and put your feet up

Sit back and put your feet up and enjoy the ride.

Its here!

I live in Ch.Ch. Yes the

I live in Ch.Ch. Yes the market is quiet but jeeze we have had a horrible Autumn and Winter so far weather wise. There really is no sign of the market prices dropping at all.Everyone is just hibernating for the Winter. I have access to all sales of properties and no real drops. Lack of first home buyers mainly which means if you own rentals you will always have people for your homes. No doubt you clowns will be able to put a negative spin on it though. Try your best cos I know the truth.

Because you are the man and

Because you are the man and you are always right.

Michelle.You are on to it.I

Michelle.You are on to it.I am "The Man"

If first home buyers are

If first home buyers are lacking, where do you propose to get the next tier of the pyramid? Other than idiot PI's stacking up more debt, that is.

When the weather improves and the market's still dead and stagnant, what will you blame? The Rugby World Cup? John Key? Witches?

Well put Rodeo Clown. If the

Well put Rodeo Clown. If the first home buyers are not buying how does the whole system kick start. Christchurch is hibernating. Have you ever heard such rubbish. The man is now really showing his intellectual talent or lack of it. I suppose if I look up trade me and realestate.co.nz there will be no houses for sale in Christchurch. Everyone is just going to wait for spring and then all hell will break loose and people will put their houses on the market. The reality is that all over NZ including Christchurch buyers in all categories including over stretched firt home buyers, baby boomers and investors are trying to sell their properties and get rid of some or all of their debt. What about the people losing their jobs when the works close down. That will not help Christchurch. The reality is that a lot more people are trying to sell properties than there are buyers. And the number of sellers is increasing. Where does the man get his views from. Ask any broker or bank manager in christchurch and you will get the same view. It is hard to sell property at present and it is not looking like that will improve soon.

Mr Clown. I don't need to get

Mr Clown. I don't need to get the next tier. What for? Tenants keep paying, I get a good safe return, so what is the problem?

Market stays quiet, so what?. Good opportunities. Not heavily geared. Creates more opportunities!!!

"Good opportunities"? So

"Good opportunities"?

So let's see, you swoop in on a couple of mortgagee sales, because your bank was silly enough to approve another couple of mortgages for you. So now you have some more houses and more debt.

Now you put those houses up for rent, along with all the others that have recently been put up for rent by distressed property investors. And there's the many retirees downsizing or dieing.

So lots of property available to would-be tenants. Lots and lots.

Trouble is there aren't too many would-be tenants, because times are tough and many are moving back in with mum and dad, or piling in together. Many are heading off to Oz for greener pastures.

Immigrants? Which immigrants? Not a lot of them these days.

So you have debt on rental properties right when there are bugger all tenants, and the few around aren't interested in paying 2005, Gordon Gekko rents.

But of course as a fearless go-getting capitalist, you know you can sit on those properties and wait for the market to pick up, then sell them off to other mugs - sorry, discerning property investors - like yourself.

So you wait. And wait. And wait. And pay interest on the mortgages. And watch the market continue its inexorable slide back to realityland. Pity the mortgage doesn't decrease along with it, but that mean old bank manager seems to think you should pay off the mortgage you agreed to at the time, and not the current property valuation. The hard-hearted bastard.

Yep, your plan is fool-proof. It's proof that you're a fool.

Anon, You can say what you

Anon, You can say what you want, that's what it is all about. We do things professionally. No trouble renting our properties. Very small gearing, large capital base and no worries apart from worrying about people like you who knock others.

I DON'T TOUCH MORTGAGEE SALES either.!!!!

P,S.CAPITALIST? Maybe I am but I am not doing it for myself I want my children to be taken care of but if you are selfish then you wouldn't know about that would you?

Ahhh, too funny! Back in the

Ahhh, too funny!

Back in the good old bubble days you could ignore the fundamentals because you knew that property prices would increase forever and you couldn't lose with property.

It was like the era of the Yuppie, c. 1986 or thereabouts.

Now you still try to ignore the fundamentals but it's getting much harder. There's that nagging doubt all the time. The repressed knowledge that the bubble has burst and the good times are over, but you cling to the memory and try to relive it constantly.

The worst thing for you is now knowing that those of us who warned that the bubble would inevitably burst were right all along, and you and you're imbecilic friends look like grotesque caricatures right of out 'Absolutely Fabulous'. Darling.

Don't blame your children the

Don't blame your children the man. You are doing it for yourself. Be honest for a change.

The market is not quiet the

The market is not quiet the man. It is desparate as sellers try to find buyers who are realising more by the day that they don't have to rush in and buy the first house they see and like. In Christchurch city tonight there are 1884 houses for sale alone on trade me. That will not be all the properties on the market. If you call that a quiet market you just dream on. Those listings are increasing by the day and the buyers are drying up by the day. Big businesses are closing down in the Christchurch area and the works are laying off big numbers. That will not help your case. Just because not much is selling says it is quiet. The pressure on sellers is building and more and more will crack and drop their prices.

Anon. You do paint a rosy

Anon. You do paint a rosy picture don't you. Have you had a good day? Achieve anything constructive? I have. Did plenty including work on a rental property getting ready for a new tenant.
Don't put everyone under the same umbrella when it comes to property.
I am not selling any of my properties, I am buying because they give positive returns. Why would i sell?
As I said it is quiet,but there are always people that need to sell for a variety of reasons. I have not seen panic or desparation. Remember if property does drop then you will feel it just like everyone else. So don't be so smug. I am not worried, don't have to.
P.S. What big business's are closing up?

Head in the sand man.

Head in the sand man.

Goodnight the man. I am

Goodnight the man. I am looking forward to hearing what QV and the Institute say next week about the June sales. I trust you will also be doing that. From where I am sitting I know they are much worse than the May figures just like todays statistics on the building consents. Don't worry as you said to anonymous the market is just hibernating.

Thanks for wishing me a good

Thanks for wishing me a good night. I am sure the sales statistics will have the sales numbers down for June. Couldn't expect much else what with the weather, budget, Bank's tightening up plus the first home buyers hiding. But, life goes on and what happens will happen. THere are opportunities out there, and if you are prepared to work like we have over the years you can get ahead and not rely on others.

Yes, get out there and buy a

Yes, get out there and buy a still-grossly overpriced property or two, then try to keep up with the interest payments even as the value of your wonderful new property drops like a stone. But don't worry, it'll be back up again in a decade or so, and you'll be rich! Rich! RICH!

Anon. I have no trouble

Anon. I have no trouble keeping up with the interest payments. Rents received exceed interest payments by tens of thousands.

This video is a perfect

This video is a perfect representation of the real estate bubble. Hint: The ladders represent debt, and Wile E Coyote the property speculator.

http://www.youtube.com/watch?v=hz65AOjabtM

The previous dozen or so

The previous dozen or so posts prove the view that property is the place to put your money right now, with all the uncertainty about. It's always been the safest place to be. The future is so bright for property that I have to wear shades.

Tell us, are you Olly

Tell us, are you Olly Newland, OllyN, or olly? You change your username so often it's getting difficult to keep up.

What a desperate PI hack.

Are you a desperate, poor

Are you a desperate, poor man?

Olly. You are correct. The

Olly. You are correct. The property doom merchants never give us the good oil for other investments. When asked they always say private IT companies, but won't divulge which ones. Cos they have n't got any have they? If they were so good why won't they tell us and that would force the price up for them, aw that's right they don't want to be capitalists!!

Too true, The Man. And

Too true, The Man.

And also...one of the nice things about property is you don't have anyone sitting between you and your money.

Correct again Olly. Thing is,

Correct again Olly. Thing is, Wally, Gordon.,Nicholas and their band of happy chaps always talk about equities etc and never mention the sharemarket dropping every day by %. They probably do need advisors or other people looking after their affairs cos they not bright enough to do it themselves. Are they aware the money they think is there possibly isn't?

Except the bank.

Except the bank.

The man you prove again just

The man you prove again just how bright you are not. Private companies mean that. Private. You cannot buy into them just because you want to. Like Trade Me. You have to have the guts to get in at the start of them and go for the wonderful ride called "divdends tax paid in your hand and no hassles". Beats tenants and costs and market fluctuations.

I share a first name with a

I share a first name with a famous speculator and haven't changed my username.

I'm also not desperate...at all. I own lots of property and buy at every opportunity. At the moment, the market favours buyers so I am a buyer.

I am also not a hack. I'm quite professional actually.

I think you could be wasting

I think you could be wasting your breath on the negatives Olly. They know we are right but the Bank's won't lend to them . Bad Risks!!!

Who gives a toss about

Who gives a toss about captial gain when you have rent money coming in week by week.

If you put your hard earned money into property atleast you've got half a chance. If you are a saver or renter then you'll have no chance at all. All you are doing is providing a market for rental houses. Its both ways you see.

At the end of the day, who wants to own a rental house if theres no renters out there?

So thanks renters.

Its year 2000 all over again. Same debate.

Small Kev.maybe in stature

Small Kev.maybe in stature but not mind. We need to keep the renters happy though. And we may be upsetting them on this site. They may move overseas. That would be a shame!! Forgot, they couldn't afford the fare.

The Man said: "They know we

The Man said:

"They know we are right but the Bank's won't lend to them . Bad Risks!!!"

You are so right and this is exactly what i was talking about last night.Those negatives do this because they are Jealous, too lazy to take action. And because they care this topic so much and deep down they wish they can afford to buy a house or invest in property, if they dont care they wont even bother coming here.

I agree! but there are still

I agree! but there are still many risks in housing we should all be aware of and this site helps. Just too many extreme bulls and bears.

It's really funny watching

It's really funny watching one incredibly stupid PI troll posting to himself via multiple user names!

You can be sure, amalgam,

You can be sure, amalgam, that there is more than one person posting the property investment comments.

PIs don't fool others...we are honest people.

Amalgam. Have you tooth

Amalgam. Have you tooth decay. We are not the same person. Just like minded.

Amalgam. Get your facts

Amalgam. Get your facts right. There are many successful property investors just like many moaners like yourself on this site. Cheers.

The Man is very correct on

The Man is very correct on this.Successful property investors can operate in any market. This site has many moaners and I note they are not the property investors. The moaners are speculators or investors in...well, they don't tell us do they!

Ah, look at that: 'The Man'

Ah, look at that: 'The Man' and 'Olly' showed up at the same time yet again!

And I'm certain we'll see a couple more sockpuppets "arrive" shortly.

When BH finally gets a registration process implemented half the user names on this site will instantly vanish! LOL!

PIs are desperate, I am who I

PIs are desperate, I am who I have always been and not The Man at all. The Man and I are like-mined and, I must add, happy posters on this site, unlike the dreary "never say what they invest in" posters.

As someone else was saying, registration on this site will dramatically reduce both comments and proper truthfullnes of comment.

Half the user names may well dissapear, PIs are desperate, but it will be because the site will be boring.

PS: PIs are certainly NOT desperate, by the way.

It was me saying that a

It was me saying that a little while ago. Pleased you agree.

I think Bernard would be silly to start limiting access to this site. Sure, there's a few dick-heads around, but not enough to introduce heavy-handed regulations.

The free market works best!

what are all the Anon's

what are all the Anon's arguing for/against? what is the anti PI position?

Simply that PIs have got

Simply that PIs have got carried away and pushed the market values up beyond economic fundamentals and now it has popped as a lot of the increases in value were artificial. Not sustainable therefore we now see a move towards drop in values. Some use the word greed. I will be polite and call it entheusiasm.

Anon. If you were earning

Anon. If you were earning more the Bank's would lend to you so you could buy and help us out eh.

My bank will loan me almost

My bank will loan me almost any amount because I have a lot of savings and investments with them and I've a perfect track record of repayments on past loans.

Never have I ever had to plead for extensions and favours, and never have I begged them to alter the repayment arrangements because things are "getting tough", as many PIs regularly have to.

The bank can see I'm a sensible customer, not some gullible idiot willing to pay far too much for an overpriced house right when the property bubble is collapsing in on itself just so he can tell himself he's rich.

Have fun losing fistfuls of cash on the property you bought at the peak and which is now worth much less and will be worth even less soon enough.

The fist fulls of cash from

The fist fulls of cash from my property investments are firmly in my hands where i count them. Property values are safe as so few, relatively, are being built now.

Playing is safe is fine, but

Playing is safe is fine, but you will need to take some risks one day. Can't sit on the fence and expect to get rich of bank deposits. Not saying that housing is the right risk for you, but risk is linked to reward.

"Simply that PIs have got

"Simply that PIs have got carried away and pushed the market values up beyond economic fundamentals"

Which explains why the biggest capital gains there have been in areas with 0% property investors and the least capital gains where there are the most PI's.

Bernard, Can you explain to

Bernard, Can you explain to me what will happen when Auckland City revalues the CV's in 2011. eg. a house with a 2008 CV of $700,000 sells this month/year for $590,000 and if there has been no real increase in values since the 2008 CV's were issued,does this mean QV has to value the house at $590,000 (market value) and therefore the whole street will be revalued down? Also - what are the implications for rates and banks?

Cath. How can Bernard answer

Cath. How can Bernard answer this?, All the Quotable Value does is sees what house prices have down since the last valuation as a percentage and then applies that to the old valuation. In Ch.Ch. they won't drop because property prices have not dropped. Can't comment about Auckland because by the look of the moaners the prices may be too high.

Cath, Fair question. I'll do

Cath,

Fair question. I'll do some digging.

cheers
Bernard

The banks would look at your

The banks would look at your lending ratio and make you pay up for the difference if you had borrowed too much relative to the new price (apparently happened in the 80's), however sales prices in Auckland are higher than they were in 2008 (http://apps.reinz.co.nz/reportingapp/default.aspx?RFOPTION=Report&RFCODE...)

Properties are taking longer

Properties are taking longer to sell because buyers are disappearing and more properties being added to inventory.

Here is what can be expected in NZ and OZ soon- what makes us special to avoid a market correction the likes of which US is seeing? I predict 0% interest rates here just like in the US soon. We watched the US raise interest rates in 2005 and 2006, only to pop the bubble and force rates down to 0%. Prices still going down, regardless.

I think Japan offers the best example of what could happen to any country. 20 years on, and you can buy a 3 bedroom house in Tokyo today for less than half of what you would have paid in 1990. You have to look at everything about a country and its market, including it's currency, balance of trade, demographics, etc.

http://www.zerohedge.com/article/look-case-schiller-no-good-news

thegreatbustahead.com is a good starter place to read up on Japan and market demographics.

Prediction- rents go down, prices go down. Best time to buy will be after 2013, after major markets are done extending and pretending by printing more and more money, oh, and also to know for certain if we don't get all of our electronics fried by solar EMF in 2012.

Investment suggestion till then- Gold and Silver. Long term? I think this side of planet will be doing a bit better than the other side in coming years, relatively speaking.

LTTS. You are incorrect. The

LTTS. You are incorrect. The U.S.houses droppedpure and simple because the people the Bank's lent to couldn't afford toservice the debt when the interest rates went up from practically 0%. They were giving money away lent right and centre to anyone. The Bank's here don't do that. If you can service a loan and have a deposit then you can borrow. In U.S. the people had nothing so that could just walk away from the property. You should be sure of your facts before writing garbage

I personally know or know of

I personally know or know of a number of people foreclosed on in the US. In these cases, the folks had over 1/3rd equity in their homes. Problem is - they lost the main bread winner's job and couldn't find alternate work. In all cases, eventual foreclosure took just over 2 years before the final event - houses on the market, didn't sell, perhaps partly because in the initial phase of unemployment back in 2007 people were hopeful that they'd soon find other work. Some had a partner on part time wages and thought they might be able to refinance, but were told no. When the situtation worsened and the credit cards were maxed to the limit, they reluctantly put up a 4sale sign, but started with an asking price that didn't reflect the sentiment of a severely depressed market. Slowly they moved the price down, but still no buyers (not in any price bracket).

IMO the killer in the US housing market has been unemployment and that's not getting any better.

"You should be sure of your

"You should be sure of your facts before writing garbage" There you are LTTS...the bragging man has spoken and what rubbish he speaks but he is so sure of himself.
Banks in Noddy did lend over 100% of price bloated valuations on the strength of little more than there being a bubble. The evidence exists in the mortgagee listings which continue to grow and will not ebb for some time.
What we have seen is a rapid change in bank lending standards so that today getting credit is far harder. In many of the States people are able to walk away from mortgages.

Correct, Wally - "In many of

Correct, Wally - "In many of the States people are able to walk away from mortgages" - they call it 'jingle mail' where people can simply walk away and post the keys back to the bank. That's quite a major difference to the way things are done here.
I read somewhere that mortgagee sales reached 45% in the US compared to 4% here, not sure if that's true, but if it is that's another major difference...

As always, NZ lags far behind

As always, NZ lags far behind the rest of the world in all things. But don't worry, we too will eventually be able to declare proudly that big percentage of the nation's homeowners lost their houses. It's coming.

When? Folks here have been

When? Folks here have been saying these things for years now.
30% price drops!
45% mortgagee sales!
20% interest rates!
20% unemployment!

I'm not saying things are rosy out there, but that's to be expected - we're barely out of a recession. Things won't pick up overnight and we could fall back in to recession yet, but the sky isn't falling either...

And all the while those with

And all the while those with cash in the bank have been getting 9%,7%,5% less RWT. Looks like the last 3 years have been nice and profitable, whilst sitting out the waiting time.
It's not that things just aren't rosy; it's that they are going to get substantially worse.

Nicholas great returns 5%

Nicholas great returns 5% less RWT. you are definitely on to a winner there

Many of those things didn't

Many of those things didn't happen sooner because the banks were still propping up the residential property bubble. But those things are beginning to happen now because the banks are no longer propping it up and the bubble has burst and slowly deflating.

The fundamentals are firmly back in control of things. The dodgy lending has gone and taken the psychotic property hysteria with it. All that's left is bills and debt, which aren't going to go away until they are paid. Fundamentals.

Have a look at the stock

Have a look at the stock markets,not a good time to be indebted, no matter how many properties you own.

Ostrich. Keep your head in

Ostrich. Keep your head in the sand then.

Wellington City Council group

Wellington City Council group manager of building consents and licensing, John Scott, said building consents were "ticking along....anecdotally we know that a large proportion of our residential consents involve additions and alterations to existing homes." stuff.com

Recession stagflation and a decade of falling property values to come!

A good site for US housing

A good site for US housing bubbular info is Dr Housing Bubble. A few of the noobs here could do with a click over there, methinks.

And yes, LTV's of 110% were creeping in here - I do recall a Westpac marketing pamphlet for 'professionals' which offered just that.

But y'all are missing an important aspect of the whole puzzle.

You Cannot expect useful, current or relevant info from the MSM or indeed any organ which depends on ad revenues or continued access to the Corridors of Power, wherever they may be, in a time of transition.

Put simply, they are all too invested in the status quo to be trusted. Hence the predominance of what in t'old days were called 'puff pieces', RE types talking their book, and 'analysis' by reporters which Whaleoil correctly labels 'repeaters'. Nobody there is about to pull the house down on their own heads, so the happy-clappy talk continues.

What we Do have is a transition to the New Normal - consumption around 10-15% less permanently (about the extent to which it was debt-funded), the air going out of bubbles, and reversion to the age-old means of house prices 2.8-3.2 times household incomes, PE ratios in low-mid teens, and savings rates north of 10%.

All this was predicted by numerous authors around the 1990-1993 mark, sensed by artists - try reading the cover notes for Dylan's 'World Gone Wrong' (1993) and say it ain't so, and it is a tribute indeed to the capacity for human self-delusion that so many bubbles have been inflated to keep the Good Times Rollin' since then. Which is precisely the theme of Matt Taibbi's GS piece.

Events in funky li'l NZ are skewed by three factors which y'all can assess fer yerselves:

1 - NZ is a 'haven' destination, and this gives a Lot of insulation, as haven seekers arrive and bring their loot with them. This is an obvious factor in house prices, if little recognised.

2 - NZ can feed itself many times over, and has a wealth of mineral and fuel riches. There won't be the Peak Oil stuff here - the transition can be considerably smoothed thereby, and we won't starve either. Ye cannae say that aboot, e.g. Britain.

3 - There is a strong conversative/conservation streak in NZ (same root, differing implications) which, despite the usual underclass provocations, will see us through in relatively harmonious shape. Ye cannae say that abbot most of Europe.

The glass is, in fact, half full.....
/rant.

"1 - NZ is a 'haven'

"1 - NZ is a 'haven' destination, and this gives a Lot of insulation, as haven seekers arrive and bring their loot with them. This is an obvious factor in house prices, if little recognised."

You are dreaming.

Foreigners with a lot of resources will live like kings in their own country if things go from bad to worse there. (They already live damn well.)

If things get so bad that they are forced to flee, they won't be able to afford to do so, and they certainly won't have anything much to speak of if they ever make it down here.

Of all the places to escape to, why choose NZ? Any economic apocalypse that drives people from developed nations is likely to have a far worse impact upon arse-backward NZ. For instance, who will be buying our produce?

And yet again you need to be reminded that NZ is only the be-all-and-end-all of the world IN YOUR MIND. There are many places on planet Earth AT LEAST AS NICE as NZ, and they will have far more to offer wealthy refugees (oxymoron?) than good ol' poverty-stricken Mudville in the South Pacific.

Property investor/speculator types are so far gone that you're reduced to praying for End-of-the-World scenarios to save the NZ residential property bubble. Can't you see that it's time for you to face facts and admit it's over?

Link to them cover notes. A

Link to them cover notes. A sample:

LONE PILGRIM is from an old Doc Watson record. what attracts me to the song is how the lunacy of trying to fool the self is set aside at some given point. salvation & the needs of mankind are prominent & hegemony takes a breathing spell. "my soul flew to mansions on high" what's essentially true is virtual reality. technology to wipe out truth is now available. not everybody can afford it but it's available. when the cost comes down look out! there wont be songs like these anymore. factually there aren't any now.

Wally. You are THE JEALOUS

Wally. You are THE JEALOUS MAN!!!

The good news just keeps

The good news just keeps pouring in for property investors doesn't it the man. I can see a perfect storm brewing. Different to the perfect storm in 2003 when we had cheap assets, big immigration figures, low interest rates and plenty of money in the banks. Now we have the opposite which must cause a storm. Now we have expensive inflated assets, reducing immigration figures, rising interest rates and the banks making it hard to get finance off them. Tomorrow we start a round of inflation causing increases in petrol, power, rates, booze and alike. Who is going to buy all the houses on the market. Prices are dropping for all forms of property in NZ and they can only continue to drop for some time. Who will be able to get the finance. Don't abuse me the man. Put up some logical respones. After all you are the man.

Also don't give us your

Also don't give us your circumstances the man .If they are true they look good in the face of it. The average PI in Nz is not in your position. They have debt on the home they live in, their cars,credit card debt, hire purchase debt and normally all their rentals are fully indebted to the bank or near to it. Prices are going to drop because of their circumstances. That is going to have a major affect on yours and my wealth. No matter how good you and I are fiscally our capital and the amount of it we have is only as good as the financial positions of the majority of the people around us. That is why we must diversify in our investment strategy.

I'm sorry. Tell us what to

I'm sorry. Tell us what to diversify into then?

"cash" the man like all

"cash" the man like all astute investors and traders do and then you buy back the assets cheaper than you sold them.

I am not a trader. I am an

I am not a trader. I am an investor for cashflow

Easy to say the man. I live

Easy to say the man. I live in a bustling middle sized city in the North Island and properties and rents are going down. Since April deals that fell over and new deals are coming in now about $15k less than April. Rents that were 4320 or so now $260 to $270. Not good for cash flow. I doubt there are many PI's out there whose main drive is capital gain first cash flow second as the returns are not great.

Rotorua??

Rotorua??

New Plymouth.

New Plymouth.

Anon.I wouldn't abuse you.I

Anon.I wouldn't abuse you.I am "The Man".
1. Interest rates have gone up .25% hardly anything to worry about.
2. Not sure about reduced immigration numbers.Maybe it isa very good thing if it is the case. We need the right type of immigrants not the unemployable.
3.Banks are still lending.They need to to stay operational. You just have to have credibility etc.

I am not an expert on prices around N.Z.they could well be too expensive. All I know from my perspective is that I buy very well and they give me a positive return currently varying between 7 to 11% p.a. and even if property drops I feel safe as my equity is twice what my debt level is. I know the Ch.Ch.market very well.We are possibly able to handle things betterthan Auckland or Wellington.
How's that!!

I said don't put up your

I said don't put up your circumstances. If they are true your cash flow will be okay. I am talking about capital which is why you are in the PI game. In Christchurch you are surrounded by hundreds of PI's who are not in your strong position. Many of them are financially stressed as they bought properties at the wrong end of the cycle,ie the expensive end, and they borrowed too much. Many of them are going to give and if too many do it at once you get pressure on prices. Too many forced sellers, not enought buyers. As I said you and I are fine cash flow wise but our wealth is in a precarious position. We are only as strong as those around us. Many people have to sell and if they don't do it voluntarily then the bank steps in. YOu might have to end up buying a few more rentals to keep the values up.

POint taken. However as you

POint taken. However as you say there are opportunities always.

Point taken. I cannot believe

Point taken. I cannot believe it. You actually agree with someone elses point of view. How can that be. You are The Man. You are always right. Property is always going up in value even when we are going into a double dip.

Commercial Property? Isn't

Commercial Property? Isn't that what renting is all about; a commercial enterprise? Okay, so this is just offices and factories, but I hope we aren't like Ireland. Prices at 75% of what they were in...2000!

http://www.businessspectator.com.au/bs.nsf/Article/THE-DAILY-CHART-Europ...

FYI to all I have removed a

FYI to all I have removed a comment purporting to come from me.

We are introducing registration for commenters soon to get over this issue.

I'm very happy to be criticised. But please don't use my name to do it.

Feel free to do it under your name.

cheers
Bernard

Bernard, if you introduce

Bernard, if you introduce registration you will reduce the breadth of comment and the "no punches pulled" comments you corrently have on this site.

Dullness will result, visitor numbers will drop.

Not necessarily. I for one

Not necessarily. I for one will not self-moderate just because I'm not posting as 'Anonymous'.

Sorry amalgam, but looking at

Sorry amalgam, but looking at your comment history I am sure you will definitely change your comments, style and advice.

Are you amalgam or Anonymous?

Why would I change anything?

Why would I change anything?

So why did you remove the

So why did you remove the post questioning your qualification to comment on economics? this was not posted under your name,
You also removed the post questioning your taking of SCF advertising money while at the same time running them down?
I guess it is your blog and you have the right to censor anything you don’t want people to see but a response to peoples questions would help your credibility,
P.S I don’t like the chances of this staying much either, delete away my friend.

You are confused Anonymous.

You are confused Anonymous. I'm Mr Brightside, I don't remove any posts. If Bernard wishes to remove posts that is his perogative and fair enough.

I'm saying that if registration is required the number of posters and the honesty of the posts, their forthrightness so to speak, will be inferior to now.

This will be a shame I think.

Just because different

Just because different posters can be identified doesn't make us any less anonymous. My sockpuppet agrees.

I just want to thankyou

I just want to thankyou Bernard,for bringing meaning and vitality to all those that blog here

registration, you just want

registration, you just want to find out who "the man" is so that you can sell him an equity share in your business

R.J.I could well be

R.J.I could well be interested thank you.

Bernard, glad the

Bernard, glad the exterminators are a'comin' for the Annoy Mice.