Archive for the 'Global Markets' Category

Reduced by 75%, 4 years old, never lived in. NZ$2m!

I can sell you this 600 m2 beauty, just outside Tucson, Arizona. came on market new, 2008 at US $6,500,000. Now US $ 1,790,000. Tuscon is a place I really like. The bank own it, and another I can sell, similar grandeur & size,  same story, never lived in either.

Makes you realize how much of the worlds property drama we have missed out on.

February 21 2013 | Global Markets and New Zealand Real Estate Market and Notable Property For Sale | 2 Comments »

They Are Grumpier About the Sharemaket Than Me!

Comment from what some call ” The land of The Brave & the Free”

Wall Street (in particular, the S&P; 500) has clearly been on something of a tear lately. But as they say in the fine print in all those ads, past performance is no guarantee of future performance. While the same could be said about real estate, at least with real estate, what you see is what you get.
Lately, there have been a few efforts to take the ratings agencies to task, most recently by California Attorney General Jerry Brown, who is in the midst of a seven month investigation into whether ratings agencies “acted improperly during the credit boom by assigning super-safe, triple-A ratings to mortgage-backed securities that later turned out to be extremely risky and in some cases worthless.”
Did you get that – AAA ratings for something that turned out to be “worthless.” Someone please explain that one to me.
Where does that leave the average person who has learned to become distrustful of the once-seemingly infallible Wall Street system of investing? Real estate, of course.
If you buy an investment-grade property right, you need not lie awake at night wondering if that “triple A” rated “investment” your broker sold you was actually a worthless piece of paper – because you have a performing physical asset that will be around for a long time, one you can touch, feel, and rent for a profit. And even when it’s gone, you still have the land. That’s more than you can say for much of what’s been sold to investors on Wall Street the past few years.

April 21 2010 | Global Markets | No Comments »

How Badly The NZSX Has Done.

Property is about to get a tax thump.
So investors will put money in the stock exchange?
I think not.
The Securities Commisin is widly derided. The public, often castegated for an absense of rational decisionmaking, are very astute to put money in property, which is governed by clear , enforced laws. Not The NZ Wild West.
Even after the ’87 cock ups, and susequent fiddling, the sharemarket is still an easy place to loose ALL of an investment.

Think about this aweful indictment: In ’87 ( at it peak) the Australian sharemarket value was 4.2 times the NZ value. Now it is 33 times.

Dont beat up property Bill, Beat up the Securities Commission!

April 18 2010 | Global Markets and Landlords/Investment | No Comments »

This Really Peeves Me About the NZSX vs Property

The New Zealand Stock Exchange Index compounds itself by adding dividends in. AND can only achieve 6.5% pa over the last 17 years.

Yet often its’ performace is compared to basic house price movements. Imagine if rent on a house, nett, was added to the price movement…then compounded! Say that nett rent was 4% The comperable figure after 17 years would be ….huge. It would have to be a compound 12%, ie doubling in less than 8 years.

Any comments from someone good at compounding?

April 18 2010 | Global Markets and Landlords/Investment | No Comments »

New Zealands Problem isnt the Property Market

Property isn’t the cause of New Zealands’ problems…its everything else!

I’m delaying the series I will do on proposed taxes on Property, so Kiwis invest in “more productive” things.

I’ve decided that there is something more important to discuss first.

Property isn’t the problem here in New Zealand, its the poor state of the profitability other “asset classes”.

Security for investors is still pathetic in the share market. It is a global sharemarket joke.

Put it in the bank or finance house? Another joke. If you dont lose i, by the time they tax 6% returns, you are going backwards.

Stories I heard over the the last 5 years here in Wellington were that the Labour government were advised bluntly and repeatedly that finance companies were a disaster unfolding. They did nothing.

I deal with the sad , tragic stories of those that lost their savings from that inaction by Labour on pathetic banking regulation. Many that lost their savings to finance company were lesser educated, older people…I suggest Labours own constituency.

It was probably hard for Labour ministers to hear the advice that a disaster was unfolding when thy were in the back of $250 000 BMW’s.

I think its a disgrace those “socialist” ministers chose not to veto those gross, ugly, obcemly expensive BMW pigs. They should have bought something to set a good role model to their “subjects ” like a hybrid Lexus at half the price. Its hardly better than politicians driving round in V 8 Fords while negotiating the Kyoto accord. Just like Lord of the Flies to me.

I digress. We live by exporting…but nobody is getting rich doing it. So who would?

Look at “our” billionaires or very rich: are they exporters? Fay & Richwhite, Gibbs, Giltrap, Jones , Hart, Watson, Morgan, Tindall… sorry, no. Not a one. A country reliant on primary production and not a really rich exporter. That says it all.

No, a high flying exporter in New Zealand is… is …. is someone about to fall a long way. Or be bought by their main client. I cant recommend being an exporter
Even the fairly well off economic commentator Gareth Morgan agreed recently in the Listener, more or less that “exporting is for idiots”.

So what is the failure in New Zealands performance? Thanks Peter, a respondent to these blogs, for a blunt summary of why we are in trouble & exporters have to be fools to do it :The exchange rate disaster.

NZ has the 77th biggest currency in the world…but is the 13th most “traded.” Making money betting against the ” Kiwi” has been described as “like shooting rats in a barrel.”

Our currency is the worlds traders’ plaything. Because of our simplistic rules on monetary policy. We are often told how “admired” the Reserve Bank rules are. However no successful currency seems stupid enough to copy them as we do it.

So, whether you agree with me or not. If you took money out of the New Zealand property market… firstly: WHO DO YOU IMAGINE WILL BUY THAT PROPERTY OFF YOU?

That is, if a good number of Kiwis decide, that they take their money out of property & put it somewhere more “useful”…who do they sell to?
For the 35% of New Zealanders who have a landlord….who becomes their landlord if its “not a place we want Kiwis to have their money tied up”?


NZ shares?

NZ Banks or finance companies?

NZ debentures?

Direct investment in small to medium NZ business?

Global shares?

Global Debentures?

Foreign property?

Foreign Banks?

Well I don’t think a lot of that investment would stay in NZ. If the Government wont even leave 20% of the Kiwisaver money here, why should you?
Sorry for talking about the Emperors clothes, but this is my opinion.

Comments please!

March 06 2010 | Global Markets and Landlords/Investment | No Comments »

Interesting Comments Out of Las Vegas.

This Is a Lot More Telling Than The Stuff Sunday Papers Truck Out!

Interesting commentary. Comparisons with Wellington scene now?

This reminds me of when the houses in Cromwell were being sold by the Ministry of Works at a rate of 60 a month, after the Clyde dam was finished. As soon as they sold them all prices went through the roof. Supply & demand.

Note the description of the banks sales process. Its described as if its something radical . It may be for the American market. Here in New Zealand most good salespeople would say they are following a sensible, normal approach !

And note comment on the “out of town investors” philosophy.

“The economic law of supply and demand says that when demand increases and supply falls, prices are sure to rise. Apparently that law has an asterisk that says “except for Las Vegas.”
For months now I’ve been hearing about how brisk sales have been, especially in the REO, or foreclosure, market. Looking at the numbers you will see that the available supply has been steadily trending down and sales have been setting all-time records. A bank puts an REO on the market and within days there are multiple offers on the property. So why are prices still falling?
On The Street
One realtor that I know specializes in these REO properties. What he sees are a lot of cash buyers from other areas stepping in. That would seem to mean that investors are seeing the value while local buyers are still gun-shy. Are they missing a golden opportunity?
He told me a story last week of an out of state investor who made an all-cash offer for 10% below the listed price on an REO. He warned him that he had virtually no shot at that deal. His buyer said, “but it’s all-cash.” The agent’s response was “so is everybody else’s offer.” Sure enough that REO was in a multiple offer situation and sold for about 10% more than the listed price on a 100% cash deal. He went on to say that the standard practice for the banks is to place a property on the market at a price that is lower than they expect to get. After a number of offers come in they counter by asking the buyers for their “highest and best” offer. The banks seem to have hit on a winning formula for liquidating properties.
The REO Myth
I have been asking a lot of veteran
real estate agents and seasoned investors why prices are still falling. It would seem that a number of people think that there is going to be another wave of foreclosures that will be a tsunami that will cause prices to fall even further. Another opinion is that banks are sitting on a significant number of foreclosures and are releasing them piecemeal in order to keep prices from collapsing altogether.
Will there be another wave of foreclosures? Perhaps, more likely than not it will simply be a continuation of the wave we’ve been riding out for some time now. In the Las Vegas market demand has been outpacing supply for a while now, can that much more supply suddenly hit?
As for the theory that banks have all of these properties hidden under a tarp somewhere I say simply, where are they? These banks are public corporations and their assets are not invisible. If they were there someone would have found them by now.
The Smart Money
Are all of these cash investors wrong? I have a feeling that they’re not. Las Vegas prices have fallen so far below replacement cost that it would seem that they are significantly undervalued. For the longest time it had been virtually impossible to get a property to cash flow in the Las Vegas market, now it is a piece of cake. How much longer before everybody else notices?”

Heres the source of the article:

December 28 2009 | Global Markets | No Comments »

Recovery nigh! Oracale of Omaha piles into property!

Waren Buffett moving to take position in property!

24/7 Wall St. (247WallSt) on Twitter

September 04 2009 | Global Markets and Landlords/Investment | No Comments »

US House Starts Shock & Awe

Agent Ken (Agentopolis) on Twitter: “home sales blast past expectations …
about 5 hours ago from API”

August 27 2009 | Global Markets | No Comments »