Opinion: 'I have good news for you: Now is the time to come out of hiding and get stuck in to property investing': Olly Newland

Opinion: 'I have good news for you: Now is the time to come out of hiding and get stuck in to property investing': Olly Newland
"Shortages lead to pressure in the market"

By Olly Newland

Olly Newland2011 has come and gone - and for many it’s good riddance.

It was a particularly tough year for some. The recession, both local and overseas, seemed to have no end.

Hopefully 2012 will be better for those of us who are investors, or who intend to be investors.

We are still battling the ding-a-lings lenders who don’t seem to have a clue about what they are doing most of the time.

Even worse, we are obliged to endure the stolid hierarchy of bureaucrats at Council level, some of whom should be whipped across the soles of their bare feet until common sense penetrates.

I am proud to say that my team and I have advised and mentored many investors - guiding them along more profitable paths, ironing out problems, re-organising their financial affairs, (whether property related or in general) and sadly, sometimes acting as grief counsellors in difficult situations.

The mood of the property market has definitely turned for the better … starting from late 2011 and continuing now.

Hopefully this will last and even improve further.

Likewise the commercial property market (shops, offices factories etc.) has seen yields falling to new lows as investors seek much better and tax effective returns other than in limp-wristed bank deposits.


In previous articles I have outlined a number of reasons the market has improved - such as continuing low interest rates, the leaky homes fiasco, the Christchurch earthquake tragedy and a virtual freeze in new construction - all of which combine to form a veritable witches’ brew of shortages and pressure.

As we know, shortages create demand, and demand drives up prices and rents.

And we should mention here the loopy Government tax changes soon coming into effect where depreciation will be disallowed. On the bright side, for the property investor and landlord, this tax change will push up rents even further, but disenfranchise even more people from ever getting onto the property ladder.

I predicted all these problems many months ago. Even so, it is frustrating to read all about it today, as if the problem had just arisen, with no idea that there was a problem until now.

Renters in race for space in inner city
By James Ihaka NZ Herald
Tuesday Jan 31, 2012

Renters are scrambling for properties in a housing shortage that has deepened in central Auckland and is now rippling out to the suburbs.

Some areas have seen rents rise by up to 28 per cent and more increases are on their way as the first tax bills disallowing depreciation claims hit property owners from April.

Letting agent Lesley Wills, of Ray White, held a viewing at a Mt Eden house at the weekend and got 10 groups hungry to get a lease. …


Bidding wars over rental housing
By Michael Dickison NZ Herald
Feb 1, 2012

Auckland tenants say they are trapped in a bidding war in a city choked for rental properties, as consents for new housing hit a 46-year record low.

Desperate house hunters are sending realtors full CVs with photographs before viewings – which they turn up to with applications already filled out – and one renter says he has been up against offers to pay $100 extra a week. …

All these pressures also lead straight into the property market via increased sales and prices. The wheels start to turn once more and the flow-on benefits show up … with even more breathless urgency.

There are those who try to argue that housing is “non-productive” and anyone who has spare cash should put it into “productive assets”.
But what exactly are productive assets?
No one seems to know or, if pressed, can only give the vaguest of answers.

Say what you like, but it is clear housing, whether purchased to live in or as an investment, creates a huge number of employment openings — from carpenters, electricians, steel, glass and concrete workers, to architects, engineers, and so on down the line to everyone else either directly or indirectly.

Moving on, I’d like to bring two more subjects to the fore: 1. Why I would never buy cheap houses in South Auckland, and 2. Property Finders: a plague on the market

Avoid cheap South Auckland housing

By ‘South Auckland’ I also include all areas where there are masses of cheap basic housing, clustered together … whether in Auckland or any other town.

In my younger years, I bought and sold and renovated hundreds of cheap houses in those very areas. It took me a long time to realise that this sort of investment is, in reality, a hiding to nowhere.

Regrettably the property spruikers who currently infest the market (especially now that there is a recovery underway) work to convince the naïve that this sort of cheap housing is the way to endless wealth and freedom.

Let me tell you: It’s the way to sleepless nights, endless rent arrears and constant repairs.

Many, many people come to me with their portfolio choked with these semi-slums and wonder why they are going backwards financially. They’ve bought the myth: If owning two rental properties is good owning ten must be better and twenty better still!

The problem is that cheap housing will never be the path to wealth because of the fact that there is - effectively - a 'cap' on rents and prices when it comes to the bottom end of the market. Working class (in many cases depressed) areas may, at first blush, appear to produce more income per dollar invested - but that is not only short-lived but also short-sighted.

The cheap housing areas rely heavily on social welfare. They have a much higher rate of unemployment than average, have serious cultural problems and can often be hot-bed for corrosive racial tensions. Some areas are a hideout for gangs, and in many cases the houses are cheaply and badly built.

The fact is that it is virtually impossible to push up the value of these properties - let alone rents - because the good but naïve people that live in them simply cannot afford any increases.

Worse still, the biggest rip-off pushed by shameless spruikers is the argument that renovating these likely-to-be slums will create ‘instant wealth’ through an increase in their value.

Unfortunately this 'value', if it exists on paper, is almost always short lived. Under constant bombardment from tenants, in those areas even a ‘done-up’ property almost always reverts back to its original state faster than greased lightening in a hurry … and any notional gain that may have been created rapidly evaporates.

It’s a smoke-and-mirrors exercise in futility.

No doubt tree-hugging, muesli-chewing, sandal-wearing socialists will read this and sigh “tut-tut”, but these are the facts and being squeamish about them will not help.

If you want to make money, keep your sanity, and really get ahead with far less trouble and greater rewards … then keep well away from cheap housing. (I’m serious.)

In other words buy quality, not quantity. It is far better to have one property in a good part of a leafy inner suburb, than end up with a bunch of scruffy boxes, no matter how smooth the sales pitch from an unscrupulous get-rich-quick spruiker.

I should know. I have been through the exercise and have the scars to prove it.

Auckland Property Values Jump
Michael Field stuff.co.nz

Auckland property values have jumped about 10 per cent in the past two to four years, according to an Auckland Council formula used to set rates.

The council released the new figures, which set the total capital value of Auckland’s 516,000 properties at $354 billion, with 86 per cent of them classified as residential. what has been the largest revaluation ever undertaken in New Zealand, the council has brought all the properties in the combined super city under the one indicative value.

Individual property owners will receive their council valuation at the end of the month and can challenge it as it is used to set the annual rates.

The biggest jumps are in the central city suburbs. Grey Lynn property values are up on 2008 valuations by 18 per cent, followed by Pt Chevalier and Sandringham (13 per cent), Ellerslie, Epsom and Mt Eden (10 per cent). …

Avoid Property Finders

Now that the market is improving, that other form of spruiker has re–emerged from under the rocks. They are the parasitic ‘property finders’.

It comes as no surprise then that some call themselves anything other than property finders - such as ‘property educators’ or ‘property coaches’ often wrapped up with ‘free evenings’ to ‘learn the secrets’ of the property market.

Phooey! These free evenings and the ‘secrets’ are but shameless fronts for selling their own properties, or those of their friendly real estate agent or investor mates, with to be expected kick-backs for any successful sales made.

How do they work? Their modus operandi is similar each time. Firstly, they locate (or are fed, more likely) cheap properties (no matter how crummy) and put in an offer to buy it. In reality, they have absolutely no intention of ever actually purchasing the property - but only seek an option - using a conditional clause to ‘tie up’ the property for as long as possible .

In other words, they put into their contract to purchase some sort of soft conditional clause (due diligence, finance, partner’s approval etc.) for as long a period as they can get away with – often weeks.

Such innocuous clauses together with sweet whispers of assurance - aided and abetted by an amoral real estate agent - lull the hapless vendors into thinking that their property has been ‘as good as sold’ and they can start packing right away.

What happens, of course is the ‘purchaser’/finder then emails out the details to his or her database of ‘investors’ together with a questionable (or indeed often verbal) valuation and rental assessment - plus a substantial profit margin added for themselves in an effort to on-sell the deal. The aim is to have a contemporaneous settlement so as to pick up the difference.

Other methods include ‘novation’ (watch out for that word) where the contract is passed to the hapless end-buyer by way of assignment of the whole contract with no come-back to the ‘finder’ if something goes wrong. You can see this on the Sale & Purchase contract itself when the finder ‘buys’ the property in his name “or nominee” or as “trustee”. Keep well away from these dubious deals is my advice - or risk losing your shirt.

If another buyer isn’t found before the deadline, the finder drops the deal leaving a bewildered, frustrated vendor with the moving truck at the door with its motor running.

Once upon a time there were genuine ‘property finders’ (and occasionally I was one of them). The big difference being that we were always open about what we were doing and always settled the property we had under contract - i.e. bought it - if we failed to on-sell in time.

This ‘property finder’ practice is now so bad, there are moves afoot to ban it all together or insist that such finders become licensed real estate agents themselves - which would effectively stop the whole practice under the new and tougher real estate rules.

And about time too.

There are variations on this practice sometimes called ‘sandwich’ deals or ‘flicking’ or ‘flipping’ or similar … but they all have the same idea in mind: To make a fast buck in between one genuine seller and one genuine buyer with no skin in the table whatsoever.

As I write this, there are fresh efforts to quell this questionable practice:

Property finders in regulator’s sights
Wednesday February 08, 2012 National Business Review

The Real Estate Agents Authority is extending its overview of the real estate industry to include property finders.

Martin Sawyers, legal counsel for the Real Estate Agents Authority told NBR NZPI that the renewed focus comes after an unsuccessful High Court action by Home Buyers.

Mr Sawyers said property finders and the companies and agents that work with them will come under the authority’s spotlight this year and may face legal action.

Home Buyers principal Francisca Forster and her company Home Buyers were prosecuted for carrying out real estate agency work without a license. …

The Outlook

The year has started well by all accounts and I am hopeful that it will last. The past three or four years have been a very difficult for many. Now we seem to be turning the corner and looking forward to a brighter future.

Property investors, whether they be beginners or old-timers, should be congratulated and encouraged to continue the good work.

If you have been hiding under the bed clothes for the past few years sure that the world was coming to an end, I have some good news for you: It is not coming to an end. Quite the contrary in fact. Which means one thing: NOW is the time to come out of hiding and get stuck in.

The property investment market waits for no one and the current statistics already underline the fact. The coming improvement in prices, rents and profits will likely escalate very rapidly to make up time and consequently leaving behind the fearful and the timid.

Make sure this doesn’t apply to you.


Olly Newland
February 2012 www.ollynewland.co.nz  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?

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23rd March, Olly! Of course, it's just a date; and as you infer, several time," Who really knows"!. But I shall be on guard; on 23/3 and thoughout 2012.

The most disappointing aspect of an article like this is that in typical Olly style, that there little or no risk to investing in property. No mention at all that property is an illequid investment. No mention that Olly has been bankrupt before for with his property investment activity. If any intelligent investor was to look at for instance, Exter's Pyramid, then they would find that real estate is not that secure at all. Property investment under a fractional reserve money system is really for charlatans.

His books are full of warnings as is this article. Are you blind?

scarfie, I'm not sure Olly was bankrupted (you're not defaming him are you?).  Landmark definitely went bust and Olly lost a lot for sure, but he's not listed on insolvency.govt.nz but maybe records don't go back that far, Olly could tell us, or perhaps someone who read his book recently (it's been 15 years since I read it).
Searching the web did bring up a gem though, look at this article about Kieran Trass and occupy Dunedin (remember Kieran from his TV appearences (CampbellLive and My House My Castle)):
Then there was Dean Leftus, who has left us:
And Don Ha, who seems to have found himself in a ha-ha:
I have absolutely no sympathy for those who drove up prices with fast talk of easy money.
Property is a hard long term investment.  Development is much maligned and difficult to profit from.  You need to keep a cool head and be sensible when it comes to dealing with property, that's why the irrational hot headed response to demolish everything in ChCh is a failed concept.
The Press is onto it:

You are quite correct. Olly didn't personally go bankrupt, but it would be interesting to know how many others did as a result of his actions. I know someone else is going to post some more on that topic soon.
I am not anti property Chris. I have seen many commentaries that show that facilitating individual property ownership is one of the best ways to bring a people out of poverty. What have realised as I have developed an understanding of the monetary system is that leverage and fractional reserve banking is truly bad news. If anything it is a strategy designed to eventually deny that ownership. Property investment just happens to be the main expression for leveraged money in New Zealand, and probably the western world. So while individual property ownership is desireable, borrowing money created of thin air to buy property, and paying interest on that money means the claim to individual ownership is quite dubious.  There are probably questions marks over interest (usuary) as well but that is a more complex argument. 

Is this a Freudian slip or something?
Likewise the commercial property market (shops, offices factories etc.) has seen yields falling to new lows as investors seek much better and tax effective returns other than in limp-wristed bank deposits.

LOL! Quality control?

Not sure what you mean Kate and MIA.
Lower yields mean higher capital values, please don't tell me people are confused by that.

So we all oughta stop sitting on the sideline as profits to be had are on a downward trend.
Yeah, now I get it.

Oh boy Kate, this feels a bit of a Basil/Manuel moment!  This is Econ or Math 101.
Yield is the rent divided by the market (capital) value.  Hence if yields fall the capital value rises.
So if the rent is $8,000 and the market value is $100,000 the yield is 8%.
If market yields fall to 5%, the price rises to $160,000. 
ie in general if yields fall prices rise.

I think what Matt and Kate are alluding to here is, the actually a common sense fact. That might be why they don't teach it in economics. But no matter how you define Yield, if your rental income drops from around $8000 to $5000 this doesn't mean you can find a sucker to buy the property off you for $160,000.
"ie in general if yields fall prices rise.",
Speaking as a qualified mathematician you should be aware that algebra doesn't imply causality in any particular direction. So you would be on better ground saying, "In general if prices rise yields fall."

Yields also fall when the commercial property owner finds that they can't get their building fully leased at the rate they had envisaged but aren't prepared to acknowledge that the capital value of their building has been correspondingly reduced. That's certainly the case where we are.

Lower yields don't necessarily mean higher capital values especially in commercial sector. If rents fall (not unheard of at the moment) then yields might be lower. This is happening in parts of Wellington. And surely it is yield that is paramount for investors (as opposed to speculators)

That doesn't make much sense MIA.
A lower rent would only equate to a lower yield if the property was seen as being underlet.
If the rents fall it is likely that the property value will fall too, hence the yield remains the same (or may actually increase).
If a property in Wellington say is EQ prone and becomes vacant, then it will no longer be considered an investment opportunity and yields won't apply, development valuations will apply.
I don't see rents falling in the longer term as a huge chunk of commercial stock is EQ prone and will in the near future be forced to be vacated hence rents in "safe" buildings will rise.
Selling yields falling reflects pressure on the market from buyers.  Downward rental pressure is an unlikely cause as most commercial tenancies are ratcheted anyway.

Good points Chris (although rents can drop and Captial Value remain the same or increase slightly - therefore yields decrease - although granted its not that common).
But regardless, I still don't know why Olly is talking UP lower yields. Is he promoting speculation over investment? That IMHO is not a very sound thing for a financial advisor to be doing. 

I still don't know why Olly is talking UP lower yields. Is he promoting speculation over investment?
Yes.  Surely the time to "get off the sidelines" and invest in the business of commercial property is when conditions are the opposite - high yields, low entry price.   Olly seems to legitimate the reason to buy now as being interest rates are relatively low and the liklihood of future capital gains are high.  Yet as he notes the "ding-a-ling lenders" may not see it that way.

I think Olly is seeing yields falling as a sign of the market turning and therefore the time time to buy, rather than wanting to buy when prices are high.

It's not like yields are that low.  In a lot of cases yields are well above the levels seen in 2005-2008 so it's certainly a time for opportunities.
Coming shortages due to EQ prone and leaky buildings disappearing or being fixed at great cost and returning to the market as more expensive properties, is all only going to drive markets higher.

never trust a man in a suit wearing transitions glasses.....
I think the following statement has proven beyond reasonable doubt that BigDaddy is indeed Olly, as we were "Discussing" this matter the other day here:
There are those who try to argue that housing is “non-productive” and anyone who has spare cash should put it into “productive assets”.
But what exactly are productive assets?
No one seems to know or, if pressed, can only give the vaguest of answers.

And Olly criticising spruikers..... - priceless!
Let's see if rents are double what they were in 2011 by the end of 2013, Olly....

You might want to note that Big Daddy still hasn't put a response out to my allegation that property investers undertake a criminal like behaviour with their actions. There is a concept in law that avoidance of a response to an allegation amounts to guilty knowledge.
No doubt tree-hugging, muesli-chewing, sandal-wearing socialists will read this and sigh “tut-tut”, but these are the facts and being squeamish about them will not help.
Well the fact that is undisputed at this time, is the using a fraudulent and leverage money supply to invest in property has always been a criminally intended action. To defend this behaviour by using fallacious statements, like trying to denegrate those who have seen immoral behaviour for what it is, doesn't cut is sorry.

From reading that scarfie, I believe you may be a moccasin wearing Marxist (possibly of the Groucho variety?)
I find unproductive people being paid to do work criminal!  Landlords provide a valuable service to the community, calling it criminal is just delusional. 

Well Chris, you have stated yourself that you have tertiary study in a relavent field to this topic, so you a king size hypocrite because you were once unproductive while you studied. Assuming that is what your confused post means. But you are the very worst of property investors because you have intimate knowledge of how the system works. You have intentenionlly preyed upon future generations by using doubly leveraged money to invest in property. Plenty of people are guilty of their parasitic bahaviour but without guilty knowledge of process, you have no such defence. You have used the finanancial system to the extreme and have no defence for your antisocial behaviour. Completely and utterly morally bankrupt.

I don't recall being paid to study!  I was referring to lazy people who sit at their desk and do no work all day (like Dilbert's colleague Wally!)
Clearly you don't understand how property works and view those that do with contempt or perhaps envy for no real reason at all.  Property is not some get rich quick scheme.  Values are often stagnant for long periods and price movements that do occur often therefore seem unjustifiable or irrational, in reality they generally are not. 
Property values must relate to replacement cost (otherwise buildings would never get build), replacement cost must relate to labour cost, and labour cost is subject to inflation ergo property must be subject to inflation.
As inflation must be kept positive (to get an economy functioning - since deflation leads to hoarding of cash), then property prices in general over long time frames will remain positive (excepting unrealistic boom/bust cycles).  So it's no conspiracy that prices increase.
I have to ask, what is it that you want scarfie?
The state to own ALL property, so that no one has any incentive to improve their home and hence we decline into a country of dereliction.
Or perhaps no property investors.  In which case students have nowhere to live, you can't find a temporary house to rent when you move to a new town or even go on holiday.
Property investment creates wealth, generates taxes and improves the standard of housing. 
Your view is very sad.

Hey that's not fair....that's an unwarranted poke at Wallys...some of us achieve great things sitting at desks all day...look at Bill English...John Key.....Alan Bollard....Ben Bernanke....Mervyn King.....Sarkozy the Runt....Merkel the back stabbing Marxist with a dodgy past....

I'm sure your a rare breed, a hard working Wally, Wolly!

I've got nothing against landlords. But I've got a lot against a system that detracts from a productive and strong economy. Landlords just happen to benefit from that system.

Landlords are very productive MIA.
Because the real estate market has been flat since 2008 so has domestic spending and so too the overall economy.  The recession and following weak economy is as much an effect of a weak property market as a cause.
Had regulations been in place limiting unhealthy booms, we wouldn't have had such severe slowdowns and such a weak economy over the past 4 years.

Chris - but that's the problem, the strength of an economy should not have to be so reliant on the strength of the property market. It just illustrates how limited and dangerously undiversified the nz economy is. Since property slumped nz's economy has been dead.
I don't argue that landlords do not contribute to the economy. But what i do argue is that a system that intentionally or unintentionally favours landlords by inflating house prices and rent on balance has more costs than benefits

Agree, but I think its important to understand this mechanism, because otherwise you can go around blaming the wrong crowd (as some people who blame the government rent subsidy do in fact do). In fact if the government dropped the rent subsidy then this is not going to return property or rental prices to where they were very significantly.
The reason that the economy depends on the strength of the property market is because when credit is created (so the leverage of the financial system increases) then this creates new spending power, which has to end up somewhere in the economy. So as the debt level of the economy increases then the real economy develops a dependency on the flow of new credit into the system. Mortgage debt is naturally the biggest source of new credit, because most peoples biggest purchase is a house.
Eventually this has to come to an end, and the de-leveraging starts. But since spending power is destroyed when credit is repaid, this leaves a hole in the demand side of the economy. A hole on which the economy had become dependent.
In fact this mechanism doesn't just inflate house prices and rents, its the main driver of price inflation/deflation, in the entire economy. 

couldn't agree more.
without rent subsidies rents and house prices would drop back to where they should be and bernard wouldn't be far off with his 30%.

I would have to pretty strongly disagree with you Scarfie. Even if the behaviour of financial institutions was criminal (which it clearly is not), then people who take out a mortgage are not morally culpable, let along legally. For one thing these leveraged investors will be left holding the can should things go pear shaped and the expected capital gains don't eventuate. Secondly they don't benefit by pledging any more of their properties income (whether through speculation or rental income) to a financier anyway. A speculator may benefit from appreciation in property, but not high property prices. Over-pledging for a property is a very bad outcome for the buyer, if you are speculating, investing or just want the security of owning your house.
For another thing, if you want to focus on speculators, you are blaming the wrong crowd. Owner occupiers still make up the majority of the market and will do for the forseeable future. Speculators can hardly be responsible for the majority of price increases given the high owner occupier rates in NZ. You can check that with statistics NZ but its still over 60% of the market. In fact intuitively I would expect that owner occupiers are more likely to over-pay than professional investors anyway.
In fact even focusing on financiers you are not on solid ground, because they don't make the rules of investment, they just play by them. So if you want to have a debate about whether its good to have an unstable economic system, which exacerbates cycles, favours different types of participants in one way then fine. But if you want to paint it into some deep moral corruption then you need to identify the wizard behind the curtain, and he simply doesn't exist.

A few things in quickly there Nic. 
Which part exactly are you disagreeing with?
Be careful not to attribute things to me I haven't said. I haven't blamed the bubble on property investors, just stated that it is criminal behaviour to participate in using fraudulent money to your advantage.
What you have to ask yourself is if it is a certain bet that the money supply will be inflated each year? As Parksy will point out, it is a mathematical certainty that new credit has to be introduced to pay the interest on existing debt. There is no way the interest can ever be repaid, so by utilising this you then participate in the fraud. If you leverage yourself then you get to inflate the percentage of the property you down own. What you then have to ask is who is the counter party to this deal? A further criminal action as you are really taking something that doesn't belong to you, how far down the track you take that line is up to you.
The average home owner is really being deceived, but I don't believe a person crossing the threshold to investing has the same defence. When you think about this angle, which applies to the institution as well, thing about the offence of receiving stolen property. A person may not have stolen an item they purchase, but if they purchase an item knowing it is stolen then they also undertake a criminal action. It can even be considered criminal if they didn't carry out due diligence when purchasing something that is under market value that turns out to be stolen.
What I have posted here before is that you have to consider what the majority of people would consider their money to be. I bet 99% would be stunned to learn what it really is.

Well, fundamentally I disagree that speculation is criminal. In fact you are wrong on several levels about this. First of all, envisaging that banking is actually criminal (which of course its not), then a close analogy with this situation would be loan sharking (which is criminal in many forms). So are the victims of loan sharks ever culpable of criminal charges for their activities as a borrower? No in fact it is exclusively the lenders who are liable.
Next the foundation of your argument that lending money is criminal hinges on something which is in fact not true, 
"Parksy will point out, it is a mathematical certainty that new credit has to be introduced to pay the interest on existing debt. There is no way the interest can ever be repaid, so by utilising this you then participate in the fraud."
In fact the biggest cause of the recession is that the aggregate debt level is shrinking, meaning more than the interest payments are being made. Of course this must have negative consequences such as a shrinking money supply and an aggregate of shrinking prices (deflation) eventually is certain as a result. But fundamentally this claim of Iain's is not true in practise or in theory either.
Mathematically if Iain's claim was true, the following theory discussed here would also be true,
There are good arguments for monetary reform, but this one is incorrect, simplistic, juvenile, and a discredit to the reform movement.

I think you miss the distinction I am making between criminal in law and criminal in behaviour, the criminal behaviour you have not addressed at all. I can assume from your comments that you have skin in the game? Most criminals don't think they have done anything wrong, I have professional experience of that.
You fail to address what people believe their money to be.  Fractional reserve banking was conceived by a criminal mind and it still criminal in intent. Ask those in history that have lost their money in a bank failure, I bet they had no idea that the banker had lent their money out more than once. I can not see any useful purpose commercially or economially that fractional reserve banking serves. 
No time to read you link as I am on holiday:-) Link it to me again one day. But I think sometimes this economic material gets too tied up in technicalities. Number one principle is that civilisation started through a surplus not a debt. Continued debt (or spending the earths surplus faster than it is replenished) will see ours decline.

No, I don't miss the distinction between criminal in law and criminal behaviour. I actually formed my argument on this basis that there is no distinction,
 "First of all, envisaging that banking is actually criminal"
and nobody in their right mind would try to prosecute people for borrowing money from the Mafia (which is a very good analogy to your statements), and were persecuted by them. This would be a total injustice.
Another obvious issue with this criminal concept is that changing the law and retrospectively prosecuting anybody on this basis would be an injustice in and of itself.
There is no need to address what people believe about their money, because if Iain's statements do not hold up then any argument for underlying criminal intent and behaviour collapses. Though making the financial system conform to what people believe it to seems to be one of the better arguments for monetary reform.
Speaking for myself, a holiday sounds like an ideal time to examine a new idea, and to try to form a reasoned opinion on the validity of its argument and conclusions. But I enjoy that sort of thing, and probably more than most people.
"Number one principle is that civilisation started through a surplus not a debt.", this might possibly be true, but research by David Graeber indicates that shortly after that the 'surplus' was gifted and this is actually the basis for trade and money. His research concluded that the basis for money was in fact the debt created by this gift, e.g the need to reciprocate the gift forms an un-written social debt, which developed into money.

It's not "good news" as he suggests but he is right for the wrong reasons...property remains the foundation of this ugly economy. Waste of time trying to explain the scam to morons..they have to be crushed by rising rates and then they will scream for govt bailouts...oh the poor householders...the poor families....who will help them pay their mortgage....

The taxpayer will be made to bail them out Wolly (in other words their government will borrow even more on their behalf) if it comes to that. You know this.
In fact it's already happening as you know, the RBNZ is keeping the OCR well below actual inflation in the hope of 'inflating' away debts. They will need to do this for years of course so best you trade any savings into precious metals or rock steady IP or  food manufacturing. 
It's all in the hands of the Greeks now my friend. They must end the game for ALL our sakes 

This article smells remarkably like a dead cat bounce defence in progress.

Hilarious.  Definitely a Groucho!

Quite frankly Chris you are not equipped to even start down that track.

ahh Olly Newland, the real estate agents' hero ... when I was in the RE game back in 2010 he was (even back then) the only ray of sunshine and souce of positive spin for us to gleefully quote in our newsletters.  (except I edited out that bit and replaced it with more sane commentary as found on this website)
I have a good friend trying desperately to sell her house in Coopers Bay for two years, she has dropped the price a few times, below what she bought it for ... ie done all the right things ... and still the deals keep falling over.   It is devastating for her. 
I have another friend in Auckland complaining that all the houses in the area she wants to buy are up for Auction ... the reason Agents put things up for Auction in THIS market is because it establishes a property's true price ... which is at the moment, way below what the vendor thinks.   So it is used for psychology.
Sure these are just little examples, but from what I see, property is not exactly moving vey fast, despite what the stats seem to suggest.
Maybe the reason people are not investing in property right now, is that they are too clever?

If you want to buy property, I suggest doing it now.
Why?  Because $20b of insurance money is about to flow into NZ AND much of that has strings attached to buy replacement property.
How would $5 billion extra CASH (no debt) flowing into residential property throughout the country work out?  (That's 15,000 average houses - a quarter of the current annual volume).

You can just smell that money coming your way can't you Chris, orgasmic for you eh?

I remember whilst working a listing of Olly's being told that things will pick up from the recession as it always does during the time I was cutting my teeth in property working with Maxi the Taxi, back in 1998,Olly is just repeating the same information they talked about again, recycling the same ideas...
the thing is - so does the market, repeat itself, in cycles - so think about it.
President of Property

Five waves up and three down?  Dow theory, Elliot wave, if I look at the cycles this is the 2nd wave of three down: down - up - down, and then followed by five up.  Looking at property I wouldn't get too caught up with capital gains.  Cashflow is far more relevant in my opinion.  If a house is cashflow positive, then gains are a bonus, and it's hard to get too upset over capital losses when you  are making money.

Another peg in Olly's hole!
"We are going to see quite a showdown in the next couple of months. There's no progress happening in the central city now, with the inquiries everyone is running scared. We're desperate to move forward."
Gough estimated 90 per cent of building owners had rental insurance for only one year.
Fellow landlord Dean Marshall, a founder of the City Owners Rebuild Entity group, said lack of insurance for new builds and the actions of the Christchurch City Council were driving capital away.
"They [the council] just don't get it, they think all the property owners make so much money but they don't understand the numbers – they don't have a commercial reality." stuff.co

Float that chch exodus on the regional building sector death slide tide....Nationals great tax switcharoo that we were told would generate so much saving as people stashed the extra nett wages....not.
Yes that was the plan wasn't it Bill?....what a load of BS.....and you dropped it splat on top of a major employment sector....and then you had the gall to claim the chch rebuild would be a bonanza...only now it's turning into an insurance and endless shaking mess....no rebuild Bill...but hey you did score on the GST murdering of the building sector.....well done that man.

I'm over the blaming GST increase for building ind etc woes.  Honestly; long run inflation is well below normal rates including this.  The GST increase has been and gone if that was going to have any dramatic effect.  I spent 400k on rebuilding and extending our family home in 2008.  With increased GST that would have been cost another $8,800 but I would probably have got labour at a cheaper rate thereby actually spending less.
Raising GST to 15% was purdent, conservative and corrective.  Yes - as a small business owner I heed to find extra$ every two months for the GST return but my income tax payments are much less and make capital expenditure including debt repayment much more affordable.  Also I am not inclined to feed accountants and lawyers non-productive fees to set up income diverting structures for tax reduction. 

Good for you Dazz...trouble is you are in a tiny minority...way too small to counter the trend away from new builds...the gst rise was the final straw for many.
What will you do as your small business cash flows dries up? I take it, you do realise the worst of the recession has yet to sink in!
Where is the incentive for the average young Kiwi..and don't blather on about doctors and pilots...I'm talking the 95% of school leavers...Why would they chain a student debt to their necks...where is the future?
So we are heading to be a nation of landlords, many receiving fat benefit payments and propped up by the credit creating parasites who now own the nation....fully supported by the govt and the RBNZ.

The recession started in early 2008 for us Wolly.  Severe droubt in Waikato led to several significant customers going into receivership.  Why are so many companies trading recklessly?  Is this not against the companies act, who polices it?  As an unsecured creditor the liquidation process is a farce as these companies have long since been insolvent.
If the last six months are anything to go by we are slowly trending up out of recession.  It wont be dramatic obviously - lets hope the recovery is not a debt fuelled one.
We have managed our cashflow as any trained business manager should.  Stock control, credit control, cashflow projections, relationships with suppliers and finacers, customer service, gross margin and overhead control.  Not to say we havn't learnt a lot and it hasn't been very trying. 
I agree its not easy for the school leavers.  It is possible to get an education without a student loan you realise?  Interest free student loans are just another finance shark.  I see many kids spending years studying for qualifactions which arnt likely to get them a real job at the end of it.  How many arty/sporty vaancies do you see advertised.  Most of us employees just want to see someone with a work-ethic and we will be willing to provide on the job training - you cant buy attitude.  Re-instating the youth rate may help to get those that want experiance some more oppurtunities.  Get off the couch and do six months hard work, at least you will get a good reference.

Fair enough Dazz...but I hope you don't expect a change in the cultural cancer that eats away at this country..."I can pop out sprogs regular like and you gotta give me what I want"....you will be disappointed if you do.
A word of advice..this recession is as good as it will get. Stay well away from debt. Follow Buffets advice on that. Any Kiwi business that grew "organically" where the bank officer was told to "shove it", will survive.
I see the Sally Army is marching again...pity they are not handing out free contraceptives to go with their tears and free family planning advice too. All good voting fodder for Labour...just you watch as Shearer develops the "I promise" pork slicing stance in 014 if not sooner.
National have made idiots of themselves for being too gutless to make change.."the tinkering time" I call it....

Different farce...... same outcome!
"The results should have been easy to predict in advance, but you can never explain anything to economic illiterates interfering in the free markets hoping to make things better. They never do."

An interesting article in The Economist (print edition Jan.21, P.74).  It points out that most of the world hasn't even yet started its necessary deleveraging process (NZ would be in this group).  However the US has improved better than most others. 
They attribute this partly to the property bust in the US, accompanied by defaults.  While painful, this has left them in a better debt position than (say) the UK. 
So while the property market is kept on life support by the Reserve Bank, this is not necessarily doing the NZ economy a big favour long term (tho I don't think "long term" is in NZers' vocabulary).
While Olly may be gleefully thrilled at this ongoing corrosion of our economy, I feel that the Government is the bigger culprit here.  By insisting on protecting the rort for property investors in the tax system, they are ensuring that property remains the "investment" of choice for most Kiwis, even if it has zero productive benefits for the country. 
And puh-lease don't give me that nonsense about "what is actually a productive asset"!  Clearly something that generates export income for the country can be seen as more productive than rental housing, which creates exactly a zero export return.  Minus actually, since we have to pay interest for the foreign money that we borrow so that we can get a healthy tax return from the IRD
What an insane system! & who could actually claim that is is sustainable, given that it is totally based on ever-increasing imported cash injections?

I'm amazed that some of you guys are still here saying the same tired old anti-property things you were saying 4/5 years ago. You were wrong. Auckland rents and property prices higher than ever and the rest of the country will follow over the next few years.

You forgot the tag line ... "because we're different".

And you're not "amazed"...you're 'lacking an education' and the ability to recognise what's happening in the rest of the world. But hey...go buy more property if you think it's such a winner.

I think you're one of the people who've been wrong for the last five years!

Join the dots drelly...if you can...the reason the rates have not blown out is because somebody is printing mountains of money to buy the govt filth to hold down the rates...how long can the game of hide the shite go on...think about it drelly....the Chinese have seen the Elephant...Americans with IQs above 80 have seen it too...most Poms and all the Greeks...the Irish too.....jeez drelly even the cousins across the ditch are looking for new underwear...but not you drelly...no you believe in 'Neverland'....
My bet is you will be one of the first to scream for govt benefits to pay the murderous rates at some time in the future....won't you?

I didn't realise this was one of those conspiracy theory threads! It's also possible that despite massive money printing, an even more enormous amount of money has been destroyed, which is why prices aren't increasing. When that changes, we'll see price inflation and then I will have locked in my fixed rates and ride the next wave of monetary inflation driven property price rises. If you could please extend your credit card limit and use it to the fullest in the normal Kiwi tradition, that would be of great assistance thanks!

There you go with the easy way out drelly...throw the term 'conspiracy theory' at stuff you don't want to accept....and if it were not for the fraud in operation to allow the banks to mark assets to bubble values and to open the gates to 100% LVR and unlimited leverage, then we would have seen some real wealth destruction...but we haven't drelly...the manipulators are making sure it is not happening...that's why the OIO were told to say "YES" to the Chinese money...the bank wanted all it's created credit back!...
I laugh at the way you flick to "when that changes"....so you do actually know it will change...it's doing so in the UK, China, Aus, Greece, Spain, Ireland, Iceland, usa, Canada, South America, Japan.....
The flood of QE garbage is already driving down the value of savings...or in other words the toilet paper is worth less...soon to be worthless!
The trend for gold has not stopped climbing.
And as you say..."we'll see price inflation"....but your dream of fixed term rates is limited to the term...and the term aint 30 years...it's closer to 5...and 5 years will not see the world through the storm...think fifty years and you might be close to being correct. But drelly you carry on thinking as you are...take no notice of the FACT that the rest of the economy, both ours and all the others...will have the majority of consumers buried deeply under debt shite mountain...meaning that you may not have a job drelly...oh dear...ooops.
Right...you don't believe me...have a look at just the UK..http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/9089565/House-prices-just-two-regions-have-seen-values-rise-since-2007.html
or maybe a report out months ago on China..http://www.forbes.com/sites/gordonchang/2011/11/06/property-prices-collapse-in-china-is-this-a-crash/
or across the ditch...http://australianpropertyforum.com/topic/9379421/1/
Still not enough for you drelly....still conspiracy theories...have a read about the land with the great liar running on BS for another 4 years of his madness policies...http://answers.yahoo.com/question/index?qid=20100612195235AAvFkPv

Obviously one has to join a property issue to keep up a debate.
So, what would be the practical scenario in New Zealand/ Auckland with an oil price over NZ$ 5.- p/l over a longer period of time (30 -90+ days)  in a wide spread out city like Auckland ?

People like Olly asnd ChrisJ have to first turn a blind eye to the obvious.
They deny what's happening all around them, if they would just look, and come up with 'sandal-wearing', and 'just scratched the surface' and 'Econ 101' type comments.
The question boils down to two very simple variables: Firstly you have to ascertain what 'wealth' is, and whether the flow of it can/will continue. Obviously, if tenants/mortgage-payers are going to have less in future years, prices (they're not 'values', that's a con) will trend down.
Then, in a downward-trending income scenario, you have to work out what will happen: folk will prioritise for sure, but will housing be a priority?  Or will ever-decreasing rental-payment ability mean ever-more defaulting landlords, meaning ever-cheaper houses, meanin ever-cheaper rents, ......
Nothing that can't go on forever, will. But - there will always be folk who believe differently, or there wouldn't be bull markets or housing bubbles.

PDK don't you know deflation is outlawed!  It costs more to build than replace (just ask the insurers dealing in ChCh), so how does price fall without a massive depopulation? 
Even with stable prices property still works out well.

What if are and have been living beyond our means, and now we have to learn to live within our means?

No austerity for us. We have a floating exchange rate.  We don't have non recourse lending.  Property is relatively cheap.  And most people do live within their means.

PDK, I hear the UK Govt is renewing the search for Lord Lucan. There is a rumour he is hiding in your enormous beard.
Reports are, that the last expedition that ventured there, found Amelia Earhart's plane and a decomposing badger, so hopes are high of finally nailing old luke!

you are talking about our huge current account surplus? 

Enough comments, I must go and find lots of property to buy.   So if any doomsayers wish to sell me their property 20% below fair market (it must be decent property) then please leave a message!
And if your wondering, I'm not borrowing one cent to buy property, it's all lovely insurance cash which is finally at least resolved for half a dozen properties, which strangely leaves enough money to buy about 15 average houses (the wonders of calculating what it actually costs to replace a building!).

ChrisJ - when did yuu last do any serious appraisal of the future?
Ity's nothing to do with 'doomsayers', but everything to do with those who emotionalise everything to justify what they wish.
Note that I don't denigrate by typecasting - although I happily call 'stupid', what I see as stupid.
You may well have done 'well', out of insurance, but that's not the big picture. Big picture, insurance is soaked out of all who pay for cover, and on average it's a less-than'zero-sum game, thanks to profit/dividend take by the insurance co's. That combined premium had to be 'earned', and some of us are objective enough to be questioning whence that income comes, and whether it will/can continue.

Chris, im glad we tax payers could help out, as a property owner/landlord  I take it you will be one of the many that dont pay taxes. Perhaps you could use some of you gains to help some less fortunate than yourself. I remember the stress you were in after the quake when you thought you had lost all, now the tax payer has not only made you whole, but better and bigger, perhaps some time for self-reflection is due.

I would like to add, the rest of us are very aware that if we get another significant event the barrel is empty and we will be left to fend for ourselves.

Ever considered having a go at a (largely) self-sufficient lifestyle, Chris?  Somehwere away from the hustle and bustle of a 'big smoke'?  :-)  Bring your chequebook to provincial NZ, I say!    
In addition to the slower pace of life - take here in the Manawatu - you have a ready residential rental market in Palmy - reasonable prices and a great stock of quality built wooden homes, 1920-1960s era.  No traffic problems to speak of - all the major retailers in town - 2 hours to the Whakapapa ski field - roughly the same to Wairarapa or Wellington dive spots - shorter distance to excellent fly fishing.  Direct flights daily to all the major NZ cities.  A largely low-rise CBD and a geography which is pretty much unconstrained in terms of development options.  And perhaps best of all - a city council that seems able to keep rates rises very near the level of inflation.
Depending no how you measure "fair market value" - lots of opportunities in the Manawatu to purchase at that level - not because the economy of the Manawatu is in decline but because (I suspect) the nature of professionals in the larger industries: education, healthcare and agribusiness (perhaps with the exception of agriculture) are highly mobile/transient.
Okay, that's my pitch for provincial NZ.  We would absolutely welcome your windfall here!  Especially given I agree with andrewj - this is likely the last EQC funded event of this sort that NZ will experience for a very long time... I hate to think that the capital flows either out of NZ or into already environmentally overburdened, overcrowded NZ cities.  

May I clear up what constitutes "productive investment"?  GST is charged on goods and services in New Zealand, while rent is not a good or a service according to NZ law.  Therefore it cannot be counted as a productive investment.  Those claiming to be providing a service may look at their tax payments and legally conclude that they are not.  As to the value, it is there, but not for the renter, or society as a whole, the value is to the landlord.
As for all the work they provide to electricians, painters etc.  It is obvious to conclude that this amount is meagre, because they would otherwise cut into the slim margins.  The othe more obvious question is whether or not these jobs would require doing if there were no landlords, and everyone owned their own home?  Of course they would still be required, so the net benefit to this sector is nil.
Productive investment is rare, and is the direct result of providing a good or a service.  To do this in a general sense requires creating a business, and charging and paying GST. 

The squeeze is coming - practice your day – daily.
Not much of a debate from my previous article – carry on like usual doesn’t work. How can an Auckland economy keep going - daily, when petrol prices reach NZ$ 5.- for a longer period of time ?
How can Mr. Average with a family, house and 4WD on NZ$ 30.- p/h pay higher bills of power/ food/ commuting/ petrol ?
How can companies transport/ distribution survive ? Tourism ? AirNZ, NZfarming ? Small business - 50km plus - daily ?
The squeeze is coming - massive price increases internationally, but no wages/ profit increase nationally.
…and interestingly no one talks about it. Not my neighbour, my friends, the News Paper, the TV – none ???????
All Silence ! No - we as a nation aren't prepared.

I don't relish these prospects at all, but you are right. Have you seen this?

It's news to me that spruikers even retreated back to their rocks.

Last week I said(told BH) that the crime is the most productive industry in NZ, he remove my blog in one hour.
Think again, the crime is keeping every busy, police, isurance company, alarm installer, doctors, judges, district court, galss man, car dealler and reapiring company, almost every one.
The best thing crime is they are not paid apart from ACC.

Congrats Olly, the house you previously owned at 156 Upland Road, Remuera went for $1.675M unconditional last week!

Does he want to buy my Ponsonby home?  five bedroom looking out to Sky Tower..???


A street off College Hill Road near the top, on the LHS as you going up,  ...   like I am going to publish the address here..!!!!!

Actually, I was just remembering back..... there was a poster (above) who screamed on this very site "SOMEBODY PLEASE HELP US".
Same poster is now gloating about personal windfalls which come courtesy of all us insurance-payers / taxpayers.
Says a lot, does that.

PDK, I wonder if IRDis going to tax his profit?

Olly never went bankrupt and not even close.
Anyone who says otherwise risks being sued.
He always had kept his grand homes and Rolls Royces.
 The difference that hurt him back then was being reduced from a net worth of $80Million to $10Milion.
He has made it all back and then some  by all accounts, nor does not specate in property, but holds on and rarely sells.

Ahhh Justice- you have no idea about the use of  marketing, public relations and the media .
As far as I know Olly still has two near new Roll Royces, and still lives in a mansion,
Every one should be so poor.

He got some of my money - that's why!

Chairman: can you expand on that please?

Long story and history of the 80s has been mentioned here many times. 

I am familiar with the time period .. what is amazing is that he burnt his investors and backers 100% yet he was able to walk away with $10 million out of the rubble (so he says) .. now .. he was a property guru .. not a stock picker .. not a stock guru .. the smell that has hung over that sorry saga is .. how he managed to do that .. unless he was acting on privileged inside information .. knowing the cleaners were coming .. and he unloaded before they arrived and before it became public knowledge. He only lost 75% .. clever

The lost amount was a small but a BIG lesson learnt for me .  I've bought and sold many properties since, due to our work commitments and several shifts between cities (and now another country).  I have came out the other end reasonably well but my biggest motto has always the location and choose wisely! Always take a pinch of salt on what you read, people will tell you how well they are doing but never how badly they did!

You will notice he says he still has 2 near-new rollers and lives in a mansion .. doesnt say he owns them

Same sort of story with a famous Terry.. he used to owned a soccer club, more than two Ferraris, a dark silver Lambo, topless Jag, Aston Martin, BMW and a big mansion over looking Oriental Bay.    Well he didn't really own all that at the end.
Moral Story; don't judge a person on what he/she drives.

Doesn't mean he isn't bankrupt either - morally and ethically

Assuming house price increase is due (partly) to population increase:
While Auckland may keep growing, overall, New Zealand’s population will not.
not sure how they know  NZ population wont grow?

we got crxppy broadband!

The government is considered to have encouraged fast growth in the city, because for some businesses Auckland is the only option in New Zealand. If they do not operate from there they will go overseas.
News Flash News Flash: Government Encoruraging Fast Growth to attract "some" businesses.
Quotes Hugh Pavletich and Owen McShane
Demographia, which describes itself as ''pro-choice with respect to urban development'', is a vociferous proponent for affordable housing prices.
Demographia, which describes itself as ''pro-choice with respect to urban development'', is a vociferous opponent of urban planning while proponent of public provision  of  new infrastructure and unfettered inward migration.

Checked with Olly. He does own the Rollers and the mansion not to mention 
a lot more. Tough. 

Did you also ask  Olly/B.D about  the use of  marketing, public relations and the media, and if what he said in 2007 was just marketing, or what he says above is marketing. They cannot both be true. As Yoda would say, " Mmmm, mutually exclusive they are, yes, mmm"

You are Olly..  Don't tell porkie..

"Now that the market is improving, that other form of spruiker has re–emerged from under the rocks. They are the parasitic ‘property finders’."
Good on Olly for pointing out that there are some leeches in the property market. Pity he doesn't recognise his own kind however 
"Hopefully 2012 will be better for those of us who are investors, or who intend to be investors."
I suspect that the good 'naive' people of South Auckland saw him coming a mile away,
"The fact is that it is virtually impossible to push up the value of these properties - let alone rents - because the good but naïve people that live in them simply cannot afford any increases."
and I think that real card carrying socialists believe we shouldn't look down our noses at poor people or take (or try to take) advantage of them, more than having a belief that we should simply deny they exist or try to hide them away somehow,
"No doubt tree-hugging, muesli-chewing, sandal-wearing socialists will read this and sigh “tut-tut”, but these are the facts and being squeamish about them will not help."
But don't worry, Olly doesn't dislike anybody just because they are poor, he just doesn't like the attitudes of anybody who wants to do something about it. Especially if this infringes on his rights as a leech, ahem, sorry I mean investor in any way.

To begin with, I haven't ever heard of Ollie Newland. I gather he is a property investor/real estate agent turned advisor.
As with all property spruikers, they talk their book. They choose to overlook facts that would detrimentally affect their business. So too those who are already invested in property. Being negative, publicly, is not going to happen. Same could be said of gold investors and the same could be said of some high profile Kiwisaver commentators in other high profile publications.
In my opinion and research, now is not a good time to buy property. It will not be an investment.
So I point you to the gold ounces versus house prices again. The last time to do so. In 'real' asset value (gold) house prices are decreasing as our money is devalued. This is something you will not hear from the likes of Ollie. Ah, I hear you say, he's trying to sell gold. Yes, is the answer, but no, not to make money. People don't see it's value yet. Not many make money from gold sales, the margins are hopeless. My links are there because I believe the current financial system will not survive the next few years, and in my analysis, unless you have some physical gold or silver, your wealth will vanish.


Just checked your link, the first thing I see is the price of gold for today vs its high in May 2011 - a 12% drop.  uummm no thanks, unless I have the ability to grow some more bxlls.
Eventhough I don't agree with Ollie, my house hasn't drop a cent on its value..
Rather you than me..

Yes, Chairman, agreed, the short term price of gold has gone down since May. But I tend to look further out than that. 10 years back for example. In price terms, gold has risen and continues to rise. But think of value, not measured with paper, but with hard assets. Not necessarily gold. Inflation is the undermining of value. You work for wages measured in dollars but inflation (increase in money supply) causes that value to decrease as more dollars chase that same 'labour value stored'.
That is what the graph is telling you. Houses were overinflated in price, but value is now returning to normal. This is why a house is good to live in, but not a good investment or wealth preserver just now. The house investment story is ending as a wealth creator.

As a wealth preservation mechanism or investment, yes, the house will 'disappear'. Also, if I can be so bold, I wouldn't go using it as collateral right now for an investment house.

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