The pressure goes on - why property investments will rise in value

The pressure goes on - why property investments will rise in value

By Olly Newland

Olly Newland

It's October, and the property market has not fallen 30% as was predicted by some - nor even by the 15% as those doom merchants, in a vain attempt to remain credible, hastily corrected themselves.

Instead the median price bobs up and down within the margin of error and the market remains essentially flat - as was predicted by me long ago as February last year.

The economy, along with the housing market also remains flat under the weight of increased GST and costs, and the hopelessly ill-timed move by the Reserve Bank to increase interest rates some months ago.

Interest rates will remain low and possibly go even lower in the time ahead because we are not out of the woods just yet.

Massive problems in the USA and Europe, combined with bubble economies in China and Australia could rock the world's economies in the next 12-18 months and this, to my mind, will be the forerunner of a tidal wave of hyper-inflation as countries print their way out of recession.

Indeed investors should be putting a little aside into other hard assets such as gold (as I predicted in "The Day the Bubble, Bursts"), silver, platinum, copper, antiques and art, or if you like whiskey, perfumes and jewellery.
 
When inflation hits it will already too late. Why hyperinflation is coming to America and how to prepare now

Check the Gold chart:
 
What happens in Aussie happens here.

Australia is suffering heartburn already from an overheated property market and, as I have seen many times before with the mad Aussies, there will be tears as their property market suffers an acute attack of indigestion. "Housing stress test spooks market"

In Sydney, anything within 10 kilometres of the city centre is now $1million plus for the most miserable shack -- Melbourne and other main centres aren't far behind.

I have seen all this before. I will bet dollars to doughnuts that soon we will be flooded with Aussie investors looking here for cheaper property in which to invest.

Already Asians are trying to buy up huge tracts of farm land in NZ, and some are now throwing themselves at investment property - spending up large from the money they have made from flooding the West with cheap exports. Consider their impact on these recent sales:

Commercial property
Many of the commercial properties sold recently in Auckland were hotly contested by Asian buyers and as a result yields dropped dramatically (i.e. prices rose).

Two Broadway Rialto retail units -- sold at yields of 5.2% & 5.3%. The next was stolen at 6.1%, and the cheapest of the units was sold on a 7.6% yield.

The Rialto shops sold for a total $10.15 million at an average yield of 6.2%. The Cue yield was higher than the rest, at 7.6%, because it will be vacated in February. A market rental has been assessed at $160,000. At that rent, the yield on the $2.4 million sale price would be 6.6%.

Next door on Broadway, the National Bank building sold for $13.5 million at a 7.8% yield.

At Westgate the Kiwibank & NZ Post shop sold prior to auction at a 6.35% yield and two more units sold recently at 6.7%, and another at 7.3% and a third that went unconditional at 7% yield.

In Parnell, 155A Parnell Rd, a retail shop leased to Movenpick on a 6x6-year lease for $54,700 p.a. sold for $922,500 at a 5.9% yield.

The most spectacular sale was in Ponsonby where a retail outlet housing Resene Paints sold for a jaw-dropping $1,110,500 representing a return of 2.7% on the income of $30,000 p.a. (the CV was only $800,000).

So much for a declining market and a shortage of cash.

This sales evidence indicates commercial property is coming under pressure and will likely increase in value by 20% to 30% as overseas and local buyers vie with each other to pay more and more to secure a steady income stream at better than current bank deposit rates.

Earthquake in Christchurch
This was a significant event of that there is no doubt and will, I believe, turn out to be the "recession buster" that the property market so sorely needs.

Current estimates put the cost at $4 billion and it wouldn't surprise me if that figure doubles in the end. Anyone who knows about renovation and repairs knows that these are far more costly than a straight new-build.

An estimated 50,000 homes will be need to be repaired or rebuilt. That, together with the infrastructure of roading, drainage and power to be made good, means this work alone will keep tradesmen employed for years. 50,000 properties may need quake repairs

I expect a mini recession in the region at first as business stalls, but by the middle of next year it will be all full steam ahead (providing the aftershocks trail away). On top of this, we will see house prices and rents rise throughout Canterbury under the pressure of this event plus the pressure from the new rate of 15% GST on every new blade of grass, nail, and door handle.

In a previous article I warned that rents were sure to rise and if there was any doubt, this event plus the GST effect will only accelerate those rises.

As if to hammer home the fact, Barfoots, the biggest real estate agents in Auckland, said in their latest press release: "The average weekly rental recorded by Barfoot and Thompson in September was NZ$407, up NZ$1/week on that for August and NZ$23 a week more than in September last year."

It is also interesting to note that house prices rose yet again according to Barfoots same article: "The average sales price of NZ$523,861 was up 2.5% from NZ$510,879 in August, but was up 1.7% from September a year earlier".

If these figures are the much touted 'crash' then I can't wait for the boom.

On a more amusing note I saw a TV item where some dopey real estate agent was asked if rents would rise in Christchurch because of the earthquake. The answer given was that that firm of real estate agents would not deal with landlords who took advantage of the situation by raising rents.

Well, hello! Just remind me not to deal with that agency should the need arise.

Landlords and investors have been mercilessly screwed down over the past few years with static rents and steadily rising prices and now, at long last, it's time for an adjustment in their favour.

Investors should get every dollar they can get and keep in mind that 'Profit' is the name of the game.

Think about it. If you were a Christchurch landlord and two people of equal quality wanted to rent your property, one offering $300 per week and one offering $400 per week which one would you choose?

The lesser? Yeah right.

In the same vein, I noted that a large number of Christchurch residents complained that they did not get all the help that they should have got and I must say I agree with them.

There was much gawking and sightseeing and a few students who did heroic work but after that, bugger all. Just TV crews. It has always struck me as ridiculous that 500 people will rush to some god-forsaken beach somewhere to save a bunch of moronic pilot whales who threw themselves on the sand, but those same 500 people will hardly stifle a yawn when asked to help their fellow countrymen who really could do with some help when the need arises.

Housing drought to get worse
If there wasn't enough pressure building up already there is better to come (from the investor's point of view).

New housing consents (or as the American say 'housing starts') are at an all-time-low - which is excellent news indeed for investors and existing landlords. Housing consents slump 12 percent

Anyone with enough brains to put a spoon in their mouth knows that shortage = price rises ... and that's exactly what this slowdown in building means.

With NZ's population growing by around 1% pa we need at least 20,000 houses to be built every year just to stand still - let alone replace the houses that are lost each year from fire, floods, demolition and natural events.

The day is not far-off when the next 'housing crisis' will erupt as rising rents collide with a shortage of supply. The inevitable 'shock-horror' stories will emerge of overcrowding, bad conditions and rack-renting. (If you're curious to know where some say the expression "rack-renting" came from, read the fascinating story of Peter Rachman.)

From a public relations point of view, property investors can NEVER win as members of the whining, whinging mob always get the headlines.
The baying for blood was encouraged and strengthened by the Minister of Finance Bill English, who in his last budget positively squeaked with pleasure as he removed legitimate tax deductions from investors through the removal of depreciation deductions.

When the **&&##@@ hits the fan, remember the part he played in the housing crisis that will come as sure as night follows day.

Buffett Rules

It is rare indeed when I take any notice of the self-proclaimed 'experts' who grow like mushrooms and then disappear just as quickly when their prognostications prove to be as useless as a pair of nail scissors to cut the lawn.

However I must say I watched an documentary on TV the other day about Warren Buffett and I have never heard more sense from anyone else in many a long year.

Those of you who have respect for your elders should read some of Warren Buffet's rules for successful investing:

1: Be frugal
Avoid waste, excessive pay or perks. Frugal people don't need fast returns to support extravagant lifestyles.

2: Wait for the 'fat pitch'
Resist constantly buying or selling. "Lethargy bordering on sloth remains the cornerstone of our investment style," (Buffett in his 1990 annual report to Berkshire Hathaway shareholders.) Wait a long time until market turbulence brings the "fat pitch", i.e. really cheap valuations.

3: Be a contrarian
Go against the crowd. "We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful," (Buffett in a 1986 letter to shareholders.) Be skeptical of the conventional wisdom, not because the crowd is always wrong but because the crowd's wisdom is probably already reflected in market prices.

4: Stick with what you know
If you don't understand a product or how it makes money, avoid it. "Stay within your circle of confidence."

5: Hold for life
Buffett's favourite holding period is "forever."

I recommend these rules to you. Write them on your bedpost to remind you daily of the truth of them.

An Investor's Story

A somewhat strange story came across my desk the other day. In this case I was on the side of the investor who was the target of a diabolical plot.

My client, a retired engineer had saved up over a lifetime well over $1.5 million and was dead keen to buy a commercial property to fund his retirement. Without taking advice (I only learnt of his story when it was too late) he was introduced to a commercial property which appeared to suit his needs by a firm of well-known real agents.

This particular property was relatively new, in a good industrial area, and was offered at a price of $1.5 million returning a yield of 9% per annum (i.e. $135,000 net) with a new 6 x 6 year lease in place. The tenant was a IT firm who had owned the building initially and then had written a lease to themselves before putting the property up for sale with them as tenants -- what's known as a 'lease-back'.

My client, relying on his hopelessly incompetent lawyer, purchased the property for cash with no borrowings only to find that within a month of settlement, the tenants closed down their business and vacated the property.

The rent stopped the same day leaving a gaping hole in my clients bank account. Horror-struck, he came to me for help.

On investigation, I soon found that the lease had no personal guarantees from the directors, and the tenant was a $100 shelf company with no assets, having been stripped out by the shareholders immediately the proceeds of sale had been lodged. Worse was to follow.

On re-valuing the property, the maximum fair market rent it could achieve on a good day with a following breeze, was $70,000 per annum -- virtually half the supposed lease amount - and no more.

It was an old story.

The vendor/tenants/ had hydraulicked the rents to a level that even a one-eyed, biased, friendly valuer could not justify and my client had simply divided the rent by 9% and paid the asking price. The property was revalued at $700,000 maximum so my client lost more than half his life savings at one fell swoop.

I recommended he sue (a) his incompetent lawyer (b) the shareholders and (c) the real estates agents - jointly or severally for misrepresentation etc. But faced with lengthy litigation and monumental costs with no guarantee of success, he chose to do nothing. With thoughts of murder, he accepted his massive loss as a gross injustice and plain dumb bad luck. Encouragement, ranting and raving on my part could not change his mind, so I left him to get on with his life - distraught, poorer ... and much wiser.

So the lesson for you, dear reader, is to always get independent advice before committing yourself to a major purchase or take the consequences.

Buy in haste - then regret at leisure.
 

Olly Newland
October 2010
www.ollynewland.co.nz
© 2010 Olly Newland. Used with permission.
 

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.

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.

112 Comments

Comment Filter

Highlight new comments in the last hr(s).

The shift of world power costs western societies dearly on the political, economical, financial, environmental and social front.  This paints an unpredictable picture of our future with many nasty surprises to come. It seems to me there isn’t enough effort to reverse the trend, especially in English speaking parts of the world.

New Zealand will be regarded as “Safeheaven” for (rich) people, which certainly overall will have a rather negative impact not only on our economy, but society. How on earth are the middle class of NZ going to pay for the current standard of living ? With Asian (other foreigners) landlords (investors) just waiting on our doorstep, unfortunately I have to agree with you with most of what you are commenting Olly ?  HA - what an economy !

Your advice about not being hasty is invaluable advice, if you miss out you will find something the same of better soon, it's just a matter of time - do your homework. I am however not convinced we will see any significant upward movements for another 2 to 3 years or so. If I was advising people about when to buy I would be picking late 2012/2013. If you don't have a deposit by all means buy now but if you have spare cash I would be putting it in the aussie banks.

Thanks Olly, I will print this off cause ive run out of toilet paper. If you really believed any of this BS as a real 'smart businessman' you wouldn't tell a soul, you would just act. Trying to make it happen with wishful thinking and blog dribble like this is very amusing and all but your quite frankly deluded. All the best.

Yes, it's typical Motivational Speaker Seminar crud: if the message was genuinely powerful, those trying to sell it would instead be keeping it a closely-guarded secret.

"It's October, and the property market has not fallen 30% as was predicted by some - nor even by the 15% as those doom merchants, in a vain attempt to remain credible, hastily corrected themselves."

Yep when one sits at a desk and looks down the stats, that would be correct

But if one digs just a tiny little deeper, comparing actual sales from 2007 to actual resales of the SAME property, or VERY similar,  there is around a 18% to 22% + drop, often more

Then if one checks out the types of properties sold 2004 to 2007, one finds a big buy up of lower priced investor properties making up the great proportion of sales....very different from the current market.

"Anyone with enough brains to put a spoon in their mouth knows that shortage = price rises ... and that's exactly what this slowdown in building means."

A shortage is when there is a short fall in the supply....yes the supply has dropped off, because people are not prepared to drop. But there is also a shortage of buyers prepared to pay the asking prices..... which anyone with enough brains knows this balances the market out.

I agree inflation is a very strong possibility ....further down the line, but the long term expolated ave (30/40 yrs) will have to gently continue to rise a couple more yrs and the current markets remain more or less stable or even drop a few %  until the 2 once again meet or get very close before any movement will once again take place.

Which it just happens that If one takes the ave late 2007 and the expolated long term ave, there was a fundamental at that point in time a 30% over valuation....And anyone with enough brains would realise the market would not be allowed to drop over night as the share market did in the 80s....suddenly Bush drop interest rates over night , the rest of the world followed....and then there where the big bail outs etc etc.

Then if one takes the revised 30% to 15%.....The expolated long term had increased for a couple yrs, and also at that point in time still indicated that IF the market was to drop on this fundamental over night (which again has not been allowed to happen)...it still required a 15% drop...or a stable market till the long term expolated comes up to meet the current ave.

"Buy in haste - then regret at leisure."

My Grandfather (who died in the '60s) put it this way

"Theres is many a good deal I have missed out on by not being in a hurry, BUT there a bloody sight more bad deals that I have fortunately missed out on" 

He also said

 " If you get into a bad deal, dont blame the other party, blame yourself because you didnt do your homework"
 

"Dr Housing Bubble" points out repeatedly that there was about 2 years between the property market in California banking up with unsold properties and shadow inventory and rising mortgage defaults, and the actual PRICE crashes beginning. Meanwhile, they had their Ollies saying that the unprecedented upturn of the preceding decade was about to resume.

Ollie, why are Ponzi schemes NOT a guaranteed successful way to "create wealth"? You clearly do not know. This is why "median multiples" MATTER. It is about REAL INCOME in the economy and what it can sustain.

Shouldn't the article be titled 'Why property investments will rise in price'? Inflation will not bring an increase in real value on its own. That would require an increase in demand or a drop in supply or a combination of the two.

Olly is typical of his generation and you cant blame him for holding onto the views he does. His system of wealth generation is based on ever increasing population and demand for property. Of course that can only go so far, but that doesnt worry him, he's almost dead anyway. For all the talk of 'sustainability' with regard to the environment through the last 10 years it doesnt seem to have penetrated the minds of this old crowd that this might mean we also need sustainable growth, businesses, government and most importantly, a sustainable economy. One which doesn't require an ever increasing population and ever increasing resource consumption just to keep the wheel turning.

"Olly is typical of his generation.."

Got to disagree on that.

um sort of....my parents are way more switched on and have their eyes open...however from what they tell me ppl around them in their 60s and 70s are pretty clueless...they cant believe they mess they get into, usually from greed...

regards

Hi Steptoe,

Where are you getting the 'same property' price comparison data from?

It sounds very useful and far more informative that what comes out of the REINZ and others.

Thanks,

Alan.

Here we go again, the Olly v Wolly extremes, this time it's Olly banging on again about how things are going to rise.  Just accept that it's not going to be as good as Olly says, nor as bad as Wolly says, that there are mixed factors at work, some good for investors, and some bad, and the reality is that it will be about halfway between.  See the paper tonight says banks in NZ are now moving back to up to 95% loans as they consider we are towards the bottom of the current cycle.

My god, finally a sensible comment on an interest.co.nz forum!!  Just one caveat, I would say 'It s PROBABLY not going to be as good as Olly says, nor as bad as Wolly says'

One thing I have leart about economics (not that I know much) is it is very easy (and headline grabbing) to predict the worst, or the best, but the most likely prediction is probably somewhere in between.

Olly says in relation to the CHCh earthquake:

"This was a significant event of that there is no doubt and will, I believe, turn out to be the "recession buster" that the property market so sorely needs. "

Bernard - publish this moron again and I'm not coming back

Damn  its just not politially correct to make such statements is it....

Well the world needed a bloody good old war war to sort everything out...and a major disaster is basically what a world war is...or could be an earth quake.....

But lets put ChCh into some sort of persective....the funeral palours where not full, there was no need to dig mass graves, hospital got a bit busy with mainly minor issues... and a lot of what one could only be described when put in persective...in convience. But that is not the simulus..its the destruction and rebuilding that stimulates... Olly may not be PC but he does make the piont

 

Comments like Matt's above need to be moderated, it adds nothing to the discussion. Go and be bitter and self absorbed somewhere else or at least offer something interesting to read.

But didn't you know? God sent the Christchurch earthquake to save desperate property developers, investors and speculators.

I hope He sent it to encourage the ChCh City Council to sort out their act and stop obstructing development and rationing land and creating artificial "scarcity" value  to the point where dodgy land in the "right place" according to the Urban Plan is developed instead of safe land that is deemed in the "wrong place" according to the Urban Plan.

Matt in Auck

I appreciate you don't agree with Olly. But please keep the criticism civil.

We like a good open debate and I'm certainly open to hearing the other side.

Hope we can keep you coming back for a robut, but clean debate.

Please don't swear or use abusive language.

cheers

Bernard

Moron is hardly a swear word.

noun

1.

a person who is notably stupid or lacking in good judgment.

I also believe Olly is lacking in good judgment - not only investment-wise, but character wise... that latter being Matt's point.

I think BH is more refering to personal attacks and insults and crap rather than bloody swearing.

personal Attacks and insults have been issues previously

Buggers wot swear have no fecking right to bloody well be here at our damn good " interest.frigging.co.nz " .

Folks - why not simply write a more valuable, better article – that would put Olly in the right or wrong light to what he’s saying. There is far too much playing the man in stead of the ball in the last few months.

...too many stupid Henryis suspend them for 2 weeks Bernhard - or sack a few - like stupid idiodic Henry should be.

..for once I agree with you Kunst.

You are a fricken idiot Kunst - I have written many brilliant articles here over the last few years.

Bernhard help - I think that idiot Kunst should also be suspended.

Nice work there Walter........... saves time waiting for response......and you get a better class of debate. 

Suspend the stupid Henry's for two weeks ? Good idea , Walter ! I need a rest ...... way too much stress ...... laying under the coconut palms . 2 weeks would be a nice break ........... must find somewhere to get away from it all ...........

Hey I want one of those ...robut's ....your giving Matt there....I came back ....now where's my robut...?

do you get a bun with it...?

Muzza - totally agree

This guy talks crap, just as some at the other extreme talk crap

Saving some exceptional event the reality is going to be somewhere in between - flattish for a couple of years and then probably slight increases 

Matt, it could be good that Bernard does publish the likes of Olly as otherwise he is open to the accusation (quite often mentioned by some) that he is only outing a particular line.  So hang in here Matt.

The hyper-inflation view (Olly's) point is the [neo-]classical one, and dont forget that its the neo-classical economists that got us into this mess...so the odds dont look good for them being right on the hyper-inflation front now does it.  What the are missing / blind to is when we look at the zero-bound work its suggesting in a serious event that we are in now that printing will have no or little effect.....This is because the printing has to over-take the debt destruction going on....ie for inflation that has to be more money chasing to few goods......

Now looking at the inflation % in the US its declining and declining at a rate that suggest at about the end of the year the inflation rate will be 0% and given its downward trajectory heading negative really quickly.....in 2011...that does not bode well for the US and then the rest of us....Yet the obama stimuls is ending, it didnt create inflation when the stimulus was at its peak....

Goods production, there is huge over-capacity and not under-capacity....companies are not investing, reason they dont need more plant when what they have is under-utilised....with huge over-capacity there is nothing pulling prices up....ie classic pull inflation....

Printing.....there are trillions being lost...six? eight? so far...and here we are having printed  maybe 2....now if the Fed etc decides to print 10 or maybe 20 trillion yes OK....there are some grounds....to think after the double dip.

So this is like a big bucket with an even bigger hole in the bottom than the top...

Then we can see that the money has to get into circulation...it isnt its being hoarded banks to hide huge losses.....the numbers mentioned are mind boggling.....60 Trillion? No one is forcing an accounting......they already know the outcome....insolvency....they dare not do it.

So its a bucket with hidden pockets....huge ones.

If and not when this double dip is over and Im sorry Ollie but I think its 1 or even 3 decades away so I dont think you will be here to see the eventual inflation...........in fact I might not.....then our chidren and grandchildren will be paupers....but thats due to lack of energy....and not worthless paper money..........and hyper-inflation.

What I suspect will happen is mass defaults, Govn's such as NZ's will be voted out and new ones voted in with the mandate to stop paying back the debt ever...and because there wont be a global economy anyway it wont matter....you can see this building in Europe now......somehow ppl forget when you have nothing to lose anything is doable...

regards

Olly says  he respects Warren Buffett,  eg:

3: Be a contrarian
Go against the crowd. "We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful,"

But, Olly, it's not you that is the contrarian! ; That's us ! We here, on this site, that go against the popular  property matras. It is you who are of the majority, although you fail to see it. And so being, by your own beliefs in Mr. Buffet philosophy,  you will be shown to be wrong.

Buffett is successful and Olly is trying to ride Buffett's coattails, even though Olly is, as you say, the polar opposite of the Warren Buffetts of this world.

Olly fails to point out that Buffet didn't make his money in the property market - but in the sharemarket.

Nicholas...the oxymoron here is that they are spawned from the same source...fear.....greed is a fear based emotion no matter what dress it's put in ....nude it's just fear.

As a foot note maybe we could put Oxy in front of words like idiot...stupid...etc to ease the tensions of slander.

There you go .......is Olly an oxyidiot and if so what does that mean.

1.) 'Be Frugal'

Is in direct contradiction to Olly's previous maunderings, in which he exhorts everybody to spend up big, even if it means more debt.

But he would say that wouldn't he?  Got to collect the rent on those retail properties.

Cribbing Warren Buffet to try and co-opt his success and credibility is a new low.

Interested - you are wrong:  it's Olly's offensive comments that need to be moderated.

Or do you agree with him that we should all be jumping up and down so happily thanking the earthquake, forgetting the misfortune of plenty of Cantabrians for the sake of the property investors? I'd like your constructive view on this rather than just slamming me for getting stuck in to what I think is a morally repugnant view (and the kind of view that seems par for the course in the property investment community)

Muzza - true, and it just makes the property bulls look even more stupid, further discrediting their worldview

Just had drinks with an old mate who has just returned from years in Tokyo, he couldn't believe the price of property here even relative to Tokyo, nor could he believe (after seeing the Japanese slump for years) that kiwis are so naive to think another boom is just around the corner....and this guy knows his stuff, as someone high up the chain in finance

Nicholas A - you are on the money: we are the contrarians, Olly is just spouting the same old rubbish that the majority of kiwis naively lap up 

I think that there is so much denial in NZ because the reality is that there appears to be little choice or hope of change. I'm mid 30's and have been actively following politics and economic goings on for about 20 years now, (not deeply) and frankly even a total imbecile must see that the cycles and repeats are on a loop. The news and media are beating the same drums continually, the politics remains childish & seemingly anti NZ. It's as if there is some pantomime being played out that is so bad, you almost wonder if you have lost your mind. Do people take it seriously, god its so transparent.

The other option if not denial is to get off the couch and find a way to actively force change in NZ, otherwise I am 100% certain that in 20 years the same old views & stories will be fooling the same people, only by then it probably will be too late!

Note to all - "Would you buy a used car from this man?"  

Olly is just another "snake oil saleman" pushing his own barrow  - in the case above, commercial property.

I am just totally amazed (NOT) how he ignores all the outstanding debt and other worldwide economic factors.... of course if he factored these in, it would go against his little spiel.

What else would you except your 'run of the mill' salesman to do ?

I think most property (except inner city suburbs of Auckland) have dropped or stagnated as expected. Now will these inner city suburb houses join the stagnation / drop or will they keep the demand?

Ollie, Ollie, Ollie.

Around 1 in 10 houses in NZ is owned by "investors" already. Around 1 in 10 of these is empty. Walk around any neighbourhood to confirm this.

The latest Sunday Star Times quoted someone analysing rentals versus mortgage costs, and saying that renting would put you $50,000 to $100,000 better off IN FIVE YEARS.

This is similar to what Rodney Dickens has been saying for a couple of years already.

We can be thankful if our property market adjusts downwards having bubbled from median multiples of 3.0, up to around 6.0 - rather than carrying on up to 7, 8, 9, or higher before it adjusts. Like California, for example. I recommend, Ollie, you follow the "Dr Housing Bubble" website for a few weeks, to wise yourself up.

International hedge funds are at the stage of shorting Australian Banks already, while Ollie continues to cheerlead for property investing. It is interesting, reading "The Big Short" by Michael Lewis, just how late in the piece the Wall Street Big Banks were selling the cleverest hedge fund operators derivatives. The bubble markets had already banked up with unsold properties and "shadow inventory" for 2 years and mortgage defaults were rising.  Yet there were still plenty of suckers ready to take the "long" side of the bet - as John Paulson is now saying in his defence now that people are trying to sue him for being smarter than them.

It makes it much easier to excuse the Americans irrational exuberance, that us Antipodeans cannot even learn from their negative example. We actually had a chance to unwind our bubbles in an orderly fashion. (John Key, Bill English, Kevin Rudd, Wayne Swann, Julia Gillard). We are in the process of "blowing it".

Olly mentioned a " merchant of doom " who predicted house prices to crash 30 % ........... and then later revised the figure down to a 15 % fall ................. any clues as to who that gloomy  character is ?

As much as some here may heckle and deride Olly N. and Tony A.  for their particular views on house prices , those guys are still incredibly more on the money ( to date ) than our beloved Chicken-Little Hickey .

[ and to those who are abusing Olly for his comments about Chch ........ no one was killed ! Property was damaged , and alotta tradesmen are gonna be flat tack for years fixing and rebuilding . That will be a boost to the local economy . ]

Gummy Bear hero - you confirm my view that property spruikers are parasitic weeds.

Yes, no lives were lost, but many were destroyed.

Tony A was only a bit "less wrong" than Bernard - he even admtted that he never thought prices would fall, yet they fell 11%. So he was at least 11% wrong. In fact he was probably 15-20% wrong (like Bernard) as he said prices wouldn't fall and probably predicted prices would rise 5-10% over the period they dropped 11% 

And I can't personally tell what Olly's prediction actually was. He is very clever at talking a lot but not saying much

Time will tell if his prediction of 20-30% increases (over what time frame?) in commercial prices eventuates - I can't see it happening, I thought there was a surplus of commercial property out there and yields are pretty average. Note the typical slimy Olly tactic of not giving a timeframe for his prediction - it could be 1 year or it could be 10 years. Its sly because if it drops 5% over the next 2 years and someone points the finger at him, he'll simply say "Just wait and see, I never gave a timeframe for it"

anyway, enough time wasted trying to argue with morons 

Anytime you want to come back to argue with morons , I'll be here , waiting ...

..... Personally , I'm far from a property spruiker ....... The stockmarket is my favourite way to lose munny ( I nearly said my favourite way to invest ! .....Sober up Gummy , too much Tanduay Rum , not enuff ice ) .

As overvalued as property currently is , that doesn't imply that it can't go higher . Swathes of hot Asian munny are circling the globe looking for a home : African gold deposits / Aussie coal mines /  NZ dairy farms / Chilean chilli factories ........... all are vulnerable to being bidded up and bought out .

[ Disclosure : Sold my house . Live in a bamboo hut , under coconut palms , on Panay Bay ]

Selling your house is probably the wisest or luckiest thing you have done.

regards

Like many of us, BH knew that property prices would fall (because they couldn't do anything else), and would either would fall sharply at a rapid rate, or slowly over a prolonged period. BH called the former, but so far it's been the latter.

Tony Alexander, like all spruikers, cluelessly proclaimed that property prices would defy reality and continue to rise, and was 100% wrong.

The only thing BH got wrong was the rate of the fall. Considering the fact that property prices still have a long way to go before bottoming-out, it's too early to say that the extent of the fall predicted by BH wasn't correct. But Tony Alexander was wrong in every way.

"The only thing BH got wrong was the rate of the fall."

Was /is/will he be?  we rem the headlines but there was a whole lot of stuff in the article(s) with time lines going thru (from memory) around 2018 (?)

I cant find the old articles

I seem to recall Tony Alexander forecasting a 5% to 10% drop in the median price, which turned out to be just over 7.5%.  I'd say that was fairly accurate.

Regarding "property spruikers" and "parasitic weeds", there's also quite a number of bloggers here who sold their house 2006 - 2007 as if they were 'profit taking' on the stock market, and they now desperately want prices to drop below those levels minus real estate fees etc.

That is NOT property investing, that is speculating with your own home and in my opinion is a stupid thing to do....

How do the wealthy become really wealthy, Murray? Most often, because they have no emotional attachment to any asset, and can buy and sell it for what it is. Calling your house a home is not about ownership. It is about you and whatever family that abide in it. Besides; anyone who sold 2-3 years ago, and rented, has well and truely covered their relocation fees and cost with the cashflow saving from rent versus buy.

NA, I agree there should be no emotional attachment to any investment asset, but your own home is a little different. Personally I don't get attached much to any house, but my kids do and I think it would be wrong for me to 'cash it in'.

I always exclude our home from our investment portfolio (which is not just houses, by the way!) especially as it doesn't derive income which in my view means it's not a true investment.

After a successful career in property investment and advisory, Olly Newman has cast his role as a fortune teller. It's not money or rentals he loves anymore, it's power and respect that he yearns. NZ loves its old sages, and NZ despises the young shit stirrers who question the status quo and the wisdom of history. Olly may well be right or he may be hopelessly wrong. But rest assured, he will be heard. 

So Olly, as a writer of fiction, I would like to hear from you how the new trends of spending 60%-80-% of someones salary towards a mortgage will be sustained. Oh no, that's right we won't have owner occupiers anymore, the Aussies and Asians will be buying up all our properties because the 4% yields and no chance of capital growth will be so attractive!!!!!

1. I wish BH would stop publishing fictional stories from Olly.

2. I think Olly would make a great science fiction writer, there's another career for you Olly.

You can rest assured that one day, we will be back to paying reasonable sums for houses. People say that housing doesn't go down here but that's BS.

In the 70's, houses were going up much less then inflation, the fact that inflation was double digits is why the actual dollar value of houses didn't go down. With next to no inflation now, houses will go down in dollar value. The question is "How long will this take?" 1 year, 5 years 15 years. Who knows? One day you will buy a house again and pay 35% of your salary towards the mortgage and the average house will be worth 3-4 times the average salary and if this doesn't happen then the economy will crumle as people won't spend on anything else but food and mortgages.

"so attractive"

Maybe we should let them buy....if its going to fall and fall I think it will let it be foreigners taking the hit....

Having some contacts/ outer circle of family in china for the last few years they seem to have all been crazily investing in chinese share markets and / or property....from what little I can see none of them had any real idea....very 1929.....

regards

Olly is more often right than wrong and at least he doesn't whinge and predict doom and gloom as many of you lot do.

More importantly he doesn't sell property to any one and it makes no difference to him whether values go up or down or sideways. In fact he is on record as stating that down markets are more profitable to him than any other type.

All he does "sell" is independent advice and that's a relief from all the other voices out their pushing left wing biased agendas or trying to sell  property, managed funds, tax liens or ponzi schemes.

According to Olly, what will balance up prices with incomes is inflation which will wipe out savings, ramp up rents and lead an almighty scramble back into hard assets- including property, as a store house of value.

(1) Why is expecting the price of 'anything', property included ,to fall... gloom?

(2) How are incomes going to rise if input components go up with monetary inflation? As an employer, would you pay your employees more if your cost of materials rises? Or cut them, to make the books balance? Sure, you may inturn be able to sell your produce for more, to offset some input costs, but wages always lag production cost rises ie: workers, all of us, end up worse off in real terms. Olly's scenario is the roard to serfdom, for us all, and our country.

"How are incomes going to rise if input components go up with monetary inflation?"

Because when the price of goods & services rise, people expect pay rises to compensate. Employers don't pass on just the increased material cost, they also pass on the increased staff cost.

It's a silly pointless circle, but so long as money is 'printed' faster than population growth it will continue....

You make my point! It's futile; worse, destructive. Because those who are the sharp end of the PAYE stick, get left behind. And those that see 'wealth' from trading or speculating in non productive 'inflation' or tax based schemes are not only deluding themesleves, but dmagaing their, the childrens and their communities lifestyle .

Yes, inflation is futile. Yes, it is extremely destructive if you don't prepare yourself for it.

Given that it's been going on for centuries, I don't see it ending any time soon.

Which is more helpful for my children - preparing for inflation or ignoring it and hoping for the best?!  I won't be much help to them if I'm penniless by retirement...
 

Well, this is the problem of today - there really is nowhere to "hide" from commodity inflation and asset deflation.  I think the safest bet presently is that in the medium term (2-3 years) interest rates will rise - so money in the bank, spread between a number of term deposit terms/rates is the way to go. 

One could of course bet on the classic hedges against inflation (e.g. metals) - but the market is manipulated - the bigger betters have total control.  It's likely an alternative fiat replacement for the USD reserve currency will burst that bubble.  Wouldn't want to be selling these "safe havens" at that time.

Inflation is actually a 20th century thing......

regards

I think you'll find it's been going on a little longer than that, steven.

Currencies have been debased causing inflation since coins were first invented. The Spaniards were great at it in the 1600s, and apparently even the Romans did it...

Coins were made of pure silver . Corrupt emperors/kings had little pieces clipped off the coins in circulation ........ and used the clipped pieces to mint more coins ............ usually to pay for a war here or there , a crusade across Europe , or an afternoon in Warren & Tarquain's Salon .

Dust off your history books , steven !

Murray "people expect pay rises to compensate"

That was what happened in the 70's/80's inflation, will it happen this time with?

 The neo cons and elites have set this up very nicely - for themselves. The pricing power of todays labour is very weak due to persistant 7 to 20% unemployment, cheap overseas labour, "free" trade and the huge reduction in union membership.

Watch as the middle and lower classes  bear the full weight of rising food, fuel and tax rises. Our own government are right in there - big tax cuts for the upper 20%, the other 80% that are already struggling take the brunt of measures like gst up 20%.

Oil is now in the mid $80's/barrel, basic food stuffs at or near record highs, copper etc up as well. With very flat economies, high UE and monetary deflation theoretically this should not be happening. I suspect the "expected" pay rises may fail to materialise. 

I think the "An Investor's Story" is telling.   Olly refers to him as "my client" - albeit one who failed on this individual occasion to seek his counsel. But if a past "client", then why had he failed to learn from his investment advisor?  The advisor clearly failed as a mentor/teacher. 

It is a good indication of the type of "investor" which seeks out the advice of these consumer- capitalist, book writing, seminar running property "gurus".   The consumer audience (i.e. "clients") absorb nothing but the headliner hype: "property can make you rich".

What anyone with $1.5m in cash needs to realise is - they are already "rich" and the best return on their savings will be doing just what they did to get "rich" - SAVE, not SPEND.

Nicholas A . If naivity was money you would be very rich indeed. Falling prices may give a temporary feel good emotion but tell that to a home owner who watches his house devalue while the mortgage stays the same.

Maybe if your idea was workable, mortgages-indeed all debt- should reduce in line with falling values. 

Why should a debt remain the same while the value of the asset it is secured over decline??

Both should decline together. Now that would be an interesting concept.

Kate: Saving is all well and good, but no one ever got rich by saving. They got rich by speculating, investing, paying wages and salaries, spending and dealing.

If everyone saved and no one spent then we would all be living in caves except Olly who would own the lot.

BD, the average wage earner/family does get rich by saving - and sometimes they get lucky by speculating.... as Olly's client's story proves.  

Actually, falling prices give great comfort to those who weren't naive enough to buy an overvalued asset in the first place!  ( the seller were the smart ones in that situation).It's a perspective thing. How do I know they paid too much? Because the cost of renting the same asset is less than the equivalent price to own it. ie: people only pay the price for the use of an asset that they see the worth is, to them. Their incomes determine what that price point is. That's why many look at the income/price of property ratio to make their case. Kate has the answer in her post, re the alternative application of funds for the next few years.

Oh, and conversley BD; Perhaps nominal debt should also, then, increase with any rise in the price of the underlying asset?! But that's wouldn't suit you, would it.

Yep, "money in the bank" - there's good reason that it's a well developed modernism;

"The phrase has to do with reliability. You can wager money on what will happen, and if you have inside information and you're 100% certain your bet is right, then your pay-off is assured; you might as well call it "money in the bank."

You can also use the phrase to describe someone who is very consistent in their behavior, because if you bet on him or her, you know you'll win. It's usually used in a positive sense to describe someone who always delivers and brings joy or victory. A synonymous phrase would be "reliably good."

The slang use of the term "money," as in "you are so money right now" is presumably derived from "money in the bank." It means not just excellence, but excellence demonstrated on repeated occasions, establishing a pattern of reliability. It can be used to compliment someone for just one instance of excellence, but it still implies that this one instance reflects on the excellence of the person's larger character, that they would be expected to be excellent again.
 

Nicholas A

Oh, and conversley BD; Perhaps nominal debt should also, then, increase with any rise in the price of the underlying asset?! But that's wouldn't suit you, would it.

Too bad you still show how clueless you are and how little you know about history. 

When the last round of inflation was with us in the 1980's mortgages and other debts were often indexed to the rate of inflation. So a mortgage may have been at  7% interest but the debt was increased by the CPI index on top so you paid back more principal than you borrowed . Even the Government issued inflation proof bonds on the same basis.

Olly is 100% right. You should learn from your elders before opening your mouth and spouting nonsense.

 

 

 

Golly ,BD. Indexed principal ( I guess that's what your saying?). I'll concede that I wasn't in New Zealand in the '80's, and if you had indexed principal loans here, well that's a first for me! Indexed interest rate, sure, that's nothing new. But, hey, I'm willing to learn, so I'll go and look it up. The '80's you say.......

Can't spot it, BD! Just so I'm clear on what I'm looking for; Your saying that as the CPI rose in the '80's banks increased that amount of the outstanding amount of the loan? ie: loan $100k, CPI 10% ,so new loan principal became $110k.?Seems harsh to me, But hey, if you say you had it, I'll keep looking....

Olly is one of two things, very brave or very foolish to put forward his tilted logic(?)

However he did give me one worthy snippet. The concept  of sale and lease back at a high rental to hike the value artificially.

Is this not the method adopted by these latest property syndicators.

You know the ones-

 "give us $50k as your share and our tenant has agreed to give a lease for x years with 9% yield"   

In these cases the yield may stand up short term BUT who will be the next sucker to buy your 50k share? 

It is one thing to understand the "Supply' side of the equation....  BUT it is another thing to be able to perceive the "demand' side...

Right now the Property mkt might be in balance... but over the next yr or 2 ... demand could do anything...  who knows... I don't.   It seems to be very "jittery" out there.

I have heard it is a very tough environment out there for real Estate agents.

Olly N, from the article: "Indeed investors should be putting a little aside...or if you like whiskey, perfumes and jewellery."

I tell you what, after reading this article, I could use some whiskey and strong cologne to try and rid myself of the nasty taste in my mouth and bad smell left from reading this rubbish....

Was just thinking it was about time for another illogical, poorly considered, contradictory, self-serving, steaming pile of crap from this idiot.

 

same 500 people will hardly stifle a yawn when asked to help their fellow countrymen who really could do with some help when the need arises.

From the bloke who applauds fraud and theft, and thinks tenants and customers are there to be abused and screwed over.

Hypocrite.

Have you read any of Uncle Olly's books ? .......  They're  very good  ,   too .

Maybe if I can find one abandoned in a bus.  Not going to buy them, that's for sure.

If they're as incoherent and rambling as his essays, forget it.  I value my brain cells.

 

"It's October, and the property market has not fallen 30% as was predicted by some - nor even by the 15% as those doom merchants, in a vain attempt to remain credible, hastily corrected themselves.Instead the median price bobs up and down within the margin of error and the market remains essentially flat - as was predicted by me long ago as February last year."

So says Olly. Well I'm still confused. Hot in my hand is an updated edition of his book "The Day the Bubble Bursts: How to profit from the coming property slump". Dated 2006.

I need go no further than his Intro to find these kinds of statements:

"Every major upswing in the property cycle in Australia (and NZ for that matter) has always been followed by a steep downward slide. Soft landings, the hope of many, have rarely if ever happened."

"To add weight to the argument that property prices are in for a heavy fall...."

And so it goes on.

Now here's my point: you can't have it both ways, Olly. You're talking up the market at the moment, insisting that the doom merchants have it wrong. But in 2006 you WERE one of those doom merchants. Either you got it wrong then and are right in your assessment now that there's not been (and won't be) a significant correction in property prices OR you got it right then and there has been (or is still likely to be) a significant correction in property prices. Which way will it be?

All I plead for is a little honesty. You're entitled to your opinions. You're also entitled to get it wrong. You are, after all, like the rest of us, human.

What I can't live with, is having to read yet another article like this, where you have a crack at everyone else and give the impression that we should trust your predictions because (according to you) you got it right 3-4 years ago.

A bit more honesty Olly and a little less blowhard evangelism for your cause. Please.

BTW - I found your book's main thesis helpful in 2006 and in my area, if you take into account inflation (as you surely must) there has been a correction of -15% or thereabouts between 2007 and now. I personally suspect we've a way to go - but it's likely to mainly occur by flat prices for another 2-5 years - which may in itself bring a total correction (incl inflation) of 25-30%. Until this happens the yields simply don't tempt me. There are easier ways of investing. Finally, in my city, there is significant numbers of retail and commercial space for rent, and the rents on residential property are fairly static. Time will tell whether this improves tomorrow, next year or in 2-5 years time. I don't know enough to speculate on the future.

Nicely said. Perhaps too nicely said. My guess is that interest.co.nz publishes these opinions  to draw attention to the site and to cause a reaction. The issue here is not one of  Olly's opinion; reasoned or rambling, right or wrong. This is more a reflection of how we as NZers react to opinions that we don't like to hear. Emotion rules over empirical skepticism; scrutiny of silly predictions prevail over a discussion of the futility of asset market forecasts; myth takes center stage from  self-education.

The pattern is predictable. Olly speaks; middle NZ listens; People rant and rave. What if people paid less attention and developed their own ideas instead of rallying against opinions that are perhaps penned to provoke a reaction? Or perhaps like poster Wayne, engage the opinion well staying grounded and honestly concluding that nobody (including Olly) knows enough to speculate on the future.

My complaint is that Olly is a merchant of doom. I have done the maths and an average two bedroom property in West Auckland will have to be worth at least $2,890,547,897,411.00 in seventeen years. Exponential growth is a mathmatical fact- just look at the big bang and the expansion of the Universe for crying out loud!

"The median weekly income edged lower in the year to June, as more people started receiving money from the Government rose while the self-employed earned less and investment income fell."

How does this litlte fact fit into the thesis?

http://nz.finance.yahoo.com/news/Median-weekly-income-edges-nzpa-2423171868.html?x=0

Don't you go dragging facts into perfectly good propaganda.

It's a sad day in New Zealand when we measure our economic success by demand for property from overseas investors, an apparent housing shortage and fallout from an earthquake. God I knew things had gotten pretty bad here, but this is terrible, and is, unfortunately, the way many NZers now consider our future and success. It bodes very badly for any enlightened economic growth, and the ability to retain our educated youth.

Wayne- it's obvious  you are only used to colouring in pictures because if you really read Olly's book you would have seen that he got most of his predictions 100% right.

He predicted

More rentals available- 100% correct -until recently.

Sale clearances slowing- 100% correct

Deveopment & Finance Co's in trouble- 100% correct

Bank lending tightening-100% correct

More mortgagee sales- 100% correct

More days on the market -100% correct

Gold prices rising- 100% correct

Apartment market crashing-100% correct

and so on and so forth.

No one else came anywhere near getting so many predictions correct.

He may have got somethings wrong-but Wayne tell us what you were publically predicting 5 years ago.

Answer: Nothing

I would rather believe 100 of Olly's predictions knowing that he gets most of them right, then listen to you and your whinging mob who  can only whine and grizzle into the rear view mirror.

 

 

Hey BigDaddy.......wushappenin..!.........You need to have more than one book in the toilet for relaxation purposes because nearly all of ...your so called Nostre Ollie predictions....were being made by every man and his dog for years now.......so be a bit more cautious in who your praying to there.

I've read two of his little books and could not find anything (that wasn't anecdotal) I had not read before .......just regurgitated to look new.

 A bit like The Bishop really ....he didn't invent God....but listening to him he'd have you believe so.

Big Daddy is an OLLIE-PHILE !

i saw it written on the wall of the motorway..so there you have it!

Over at the Business Spectator , John Wilson ( head of Pimco , Australia ) claims that the housing bubble is non-existent . He believes that Oz house prices are in line with longer term trends . ..................... . That Steve Keen guy , ( who's theories Bernard loves so much ) had better pop his walking shoes back on , and resume the trek .

You my friend are a bored naughty boy.......eh....get outside for a quick dip....afore you say something to offend our host. 

Not alotta fish in Panay Bay , so I spend my time baiting Bernard ( don't call him  "Bernie ", he hates that ........ Our little secret ! )

Had my run and my swim .

The workers are flat tack on constructing the ocean break-wall . Another crew digging the well . And the third lot are building our roadway and carport ............. Getting tired watching this hive of activity . ........... Coffee break , methinks ! Latte at Bernies ?

He ( Wilson ~ John...not the dog on the new Lotto ad) also said that sub-par growth was th biggest threat to the (any?) housing market, and could predicate a fall that threatens wealth. Remind me....what are the growth figures for New Zealand again? Sub par to say the least!

The world economy declined 0.6% in 2009; the IMF predicts it will expand 4.8% for this year (greatest in Asia and South America), and 4.2% next year.  That can't be all bad?

Olly can sprook all he wants. He will evaporate and be gone when the crunch arrives. Noddyland always takes a couple of years before sinking. Keep your eye on the retail sales drives by the big outfits. They alone will tell you the truth about the economy.

Retail activities are dangerously dead in many small locations. I’m under the impression in the major cities the higher number of population conveys a false picture of the situation – people/ cars everywhere but none is buying much.

The ongoing situation is slowly grinding down people's money.

Auckland is a magnet in times like this Kunst...the fact that prices are static there and sales down even when so many are heading there for work, is a very bad sign of trouble ahead. English has been spinning the export boom and rural leg up...but it aint gonna happen that way.

Watch out for major civil trouble across Aymereeka....

 http://www.marketoracle.co.uk/Article23276.html

 "The cases where people have been removed from their homes, even when no bank loan exists (as in owned free & clear), by means of fraudulent, forged, and counterfeited documents, has finally provoked RICO law provisions. Witness organized crime extended from Wall Street, whose roots lie most likely in Fannie Mae itself. The legal industry has finally joined the fray in class action lawsuits. Defense citing errors made have been met with accusations of fraud, quite a different game."

Boy, that's a helluva read.

I have an idea what might happen ... or let's say I have a hope in terms of what should happen.  But, given I grew up there in the 60s, I also have alot of fear as well about what could happen.

What about the situation here at home ?

The cases where Kiwis have been removed from their jobs

The cases where young Kiwi’s don’t have a job.

 …and I see a high number of young people walking the street doing nothing. ...and I see MP Steven Joyce saying: All imported, because it is cheaper....and I see more idiots saying the same....and I see more young people walking the streets doing nothing....and I see young people getting together forming gangs - not working gangs constructing our most needed infrastructures in factories - but destructing.… and I see Steven Joyce saying in parliament we do need more police. …and I see the public saying - Yes we do need more police. ….and we do have more police. …and we do build more prisons….and I  see the public saying yes we do need more prisons….and I see Steven Joyce saying in parliament we do need more money today and more money tomorrow…. and we are stuffed as a nation

Watch out for major civil trouble across ............

I cannot say it - otherwise people think I'm negative - always !

Wow - here's a great post on zerohedge which sums up the mood of many middle class Americans quite nicely;

Yes, I agree. I have behaved in a perfectly ethical manner in regards to money for my whole life. I save and get [bleeped] by [bleep] interest rates. I invest and the firms were cooking their books and the auditors busy [bleeping] around and not reading financial statements. The SEC doesnt do [bleep]. I rent and my landlord didn't pay her mortgage so I get kicked out and she keeps my deposit. Now, this. [Bleep] it. I am going to start looking for condos in my city. I will take a zero-down (money back even) loan and maybe make a single [bleeping] payment. Then I will stop. The backlog will take 18 months to get to me. Free rent. I'll finally fit in. 

http://www.zerohedge.com/article/hr3808-equivalent-tarp-2-and-obamas-get-out-jail-gift-card-high-frequency-signing-scandal 

 

Which is how it will go.....ugly..........I cant blame them......here I am with my grand-parents and parents telling me debt is bad the GD was awful and now I watch ppl who frankly are in-competent on huge salaries and who gamble with other ppls money at no risk as I will pat for it as thats how they get their bonuses and you know what I feel like Im a loser instead of the other way around.........

There has to be a consquence to this.........

Yes, I agree - those of us who never pursued a career as a fund manager, a futures trader or an FX dealer - feel like mugs. 

No need to Kate. There's good and bad in all businesses. It's only the bad situations that are newsworthy. As a trader, manager or director, if you acheive your annual budget, ( they're quite challenging!) you get your salary; over that a % bonus; less than that, depending on the size of the shop - you're looking for a job.

I meant mugs... given we didn't spot the career path to the really BIG bonuses.

Like everything in life, you get what you pay for ( or what you sacrifice for!). Just like actors and musician; for every star that makes it, there are inumerable numbers that don't, who work for peanuts to start with; that's where they stay, then fade away.

Careful, Olliver might be right

An article in the Sydney Morning Herald re AUD money flowing into NZD property now
http://www.smh.com.au/money/on-the-money/nows-the-time-to-inspect-kiwi-properties-20101001-1600h.html

ATTENTION ALL READERS..DO NOT CLICK ON THIS LINK AS IT HAS VIRAL SCRIPT FILES EMBEDDED IN IT...3 ACTUALLY!

ICONOCLAST..GET YOUR MACHINE CLEANED AS IT'S HOPELESSLY COMPROMISED,MATE !

i mean the above link from iconoclast !

If you save some more, or put the proceeds of the sale of your house into your kiwi saver account, your fund manager will (send) invest 60% of it over here in australia and we will use it to create some more australian jobs, dig some more iron out of the ground, and, with the proceeds come and buy some more NZ investment properties off you.

I totally believe you are a rich and savvy Australian who has made intelligent investments that are performing well.

Everyone else thinks you are just another terminally desperate Kiwi property "investor" trying to con one last sucker into hoping the NZ residential property bubble isn't completely dead so you can finally flog off all your own dud houses.

Bugger property...look what's coming down the track!

 http://www.marketoracle.co.uk/Article23321.html

 "There are no more chips on the table to continue with the game.

If the FED and other central banks embark on a second massive quantitative easing gambit, and the bet turns bad, which will be the most likely scenario, the end result would be the bankruptcy of the FED and the other major central banks.

Think deep about it. It is the logical consequence of the quantitative easing policy. The confidence in the Federal Reserve Notes would vaporise into thin air. How fitting, as they were also created out of thin air!"

Wolly "confidence in the Federal Reserve Notes would vaporise into thin air"

It is amazing when you think about it. This is the world's reserve currency, the benchmark for international trade and the measure in which other currencies and commodities are priced. The US PTB now have a policy of money printing and deliberate debasement, gold and the commodities are telling you all you need to know.

Ben Bernanke destroyer the worlds reserve currency.

"U.K. Home Prices Plunged Record 3.6% in September.."

I know, I know; We're different. The Aussies are going to storm over the ditch and buy our property to help us. Not till headline like in the UK have passed, I don't think. But wasn't it only last quarter that "The Poms are coming" to save our market, or was it the Chinese? Well someone was on their way!

http://www.bloomberg.com/news/2010-10-07/u-k-september-house-prices-plunge-3-6-on-month-halifax-says.html