Archive for the 'Media Beats Up Real Estate' Category

Save us from the Capital gainers! Please

The IMF think a capital gains tax on real estate would suit us here in NZ just fine!

So: do they know we have a capital gains tax already, on shares as well as property?

Do they propose it be on Commerscial property or just residential?

Why did those countries with capital gains taxes have just the same surge in values as NZ did?

Since it costs more to build new than buy existing, in most NZ markets, that must mean build costs have doubled in the period house prices have doubled!  HMMMM could that be a culprit? & who’s fault was that? Not the “greedy real eastate owner!”

A tax would drive prices down. That would totally kill “new builds”, leading to aging housing stock, housing shortages, increased crowding, increased rents….all the building trade going to Australia…..hmmmm.

If the tax was on “realized gains”, the market would freeze up a lot. In Italy houses have lain idle for literally hundreds of years because the owners cant afford to pay taxes due on sale.

If it is on “unrealized gains”. Whew! where do retired couples get that money each year? Where does anyone get it?

So year one, “Unrealized Gains” scenario: Prices fall 20% (see my earlier blog) wiping $36b. Investors lose $24b, & claim $12b in tax losses! Hmmm.
In future after that, when the market rises, (which is always good times) Govt coffers will overflow at a time it dosnt need it, so will spend it like Labour just did for 9 years. When times are bad, investors will get refunds, putting pressure on already empty Govt coffers.

BUT THEN… there will be an equalizing private effect. Investors will have Mr or Ms Taxpersons hand in their pocket during booms, but handing some back in bad times. Countercyclical for investors.
Of course that is a bit like saying they take 3 pints of blood, but give one back.

Where are they at?

May 01 2011 | Media Beats Up Real Estate and New Zealand Real Estate Market | No Comments »

REAA figures show Agents doing awesome job!

The REAA  has dealt with 23% of 700 compaints. Of the 160 done, they threw out 45. Of the 120 they looked into, 107 needed no action.  In 11 they found “unsatisfactory” conduct.  Only 3 charges have been laid in 10 months.

So you could say under 10% of complaints have much substance. Puts  the claim the old system was “too easy” on the industry in doubt, dosn’t it.

And only 3 of the complaints so far  were regarded as serious, while there have been maybe 40 000 house sales in that time.

So that is about 80 000 vendors and buyers that could have complained but didn’t,  plus unsuccessful buyers that didn’t complain, plus your opposition hasn’t,  and dont forget the REAA  asked  your collegues to complain about you too but they haven’t either….  in fact the  neighbours’ cat is allowed to lay a complaint, but it is quite happy with you I understand.

There are  17 000 licenced agents, so this is a big industry by New Zealand standards.

So go ahead,  give your industry & yourselves a  big pat on the back. You deserve it. This is evidence  of high quality service by virtually everyone, something to be proud of  in my opinion.

September 20 2010 | Media Beats Up Real Estate | 1 Comment »

No, This is Bad News

Sunday Paper Picks 2010 Good to Buy Holiday Home.

Why bad?
On Colins non scientific, 20 year observation of real estate trends, there is only one barometer to watch more closely than the Listener. ( That publication is always soooo wrong, investors should subscribe to see whats about to not happen)
And that market indicator? The Sunday paper banner headlines.
Why watch them for guidance? Because without fail, what they say is the opposite of what is going to unfold in the future. DOING THE OPPOSITE OF WHAT THEY SAY TO DO IS A GOOD IDEA! Yes, you cant go wrong.

So sorry, bad year for buying holiday homes.

December 27 2009 | Media Beats Up Real Estate | No Comments »

Why Real Estate in NZ is Like Lady Di

An influential Journalist blew me away with the revelation of where these unqualified, dodgy and sensational stories are coming from. Especially in the Sunday papers.

He said to me “in New Zealand, real estate has the “lady Di ” factor to Newspaper editors…put it on the front page and the sales will spike up”

What more needs said?

December 14 2009 | Media Beats Up Real Estate | No Comments »

Where To, Prices & Volumes, 2010 Wellington?

So heres my stab at it.

Firstly this is done without any knowledge on The Listeners current position on the market.

This is an important barometer for me, as I have found that publication to be very reliably & consistantly wrong on property for 15 years. And in a timely fashion too.

When The Listener says ( and they do about twice a year) “real estate is in a terrible state, and its ruining the country, and prices are about to go through the floor, and and and the collapse will take all the greedy people who own houses to hell”… then buy buy buy!

In their defense their editorial sentiment is generally negitive towards property, so the 7% average annual increase in value over the last 100 years works against them I guess. Can anyone summarize their current opinion, to take it into account in predicting the next 12 months?

Rest of the media, also a good indication of which way not to bet… but they are confused. “You need a house, but dont buy one, maybe” , seems the overall flavour.

Tony Alexander, BNZ…far sharper than media.. says nationally up 5 to 10 % next year.

Buyers…gone for christmas, no one to ask.

Listings…more, but selling. Except over $1 million…there are a swarm there, & not enough buyers.

Investment/first home…yields poor unless you compare them to running a small business or putting it in the bank. Or pretty well anything.
first homes
Prices fairly fierce for what you get…but there is nothing else…

Rumours..bloodletting by government to reduce spending blowout next year especially in Wellington.
Loss Atributing Qualifying Companies’s to lose some benefits?

US property market still weak.

So… me, Ill say volumes next year 680 to 800 sales a month…ie steady. Prices? Wellington overall…up 6% year on year. First homes & over $ 1 million…not so strong… up 3%.

And living in a clean, clever, compact Capital, safe and secure from all the stress the rest of the “civilized” world put up with every day?………….. PRICELESS!

Have a wonderful Festive Season.

Cheers

Colin

December 14 2009 | And What About The Wellington Market? and Media Beats Up Real Estate | No Comments »

280 Mortgagee sales from 7000…Hardly a flood!


If you treble a very small number, it is still small

I cant get excited about this. Its about 4 % of all sales

I know around Wellington of numerous investors waiting for good buys. They complain about the virtual absense of stock. On the other hand I know of very few Morgagee sales.


Anyway, heres the report.

More and more New Zealanders are being forced out of their homes as mortgagee sales hit an historic high, according to new statistics released today.
Terralink International said June’s figures showed registered mortgagee sales, had tripled compared to the same period last year, up to 289 from 98.
The company’s managing director Mike Donald said the figures showed property owners in provincial towns were now beginning to be hit harder by mortgagee sales.
“In the North Island, Hawke’s Bay, Taranaki and Manawatu all experienced big increases in mortgagee sales.
“In the South Island mortgagee sales in Otago continue to grow, where Queenstown hit particularly hard.”
Mr Donald said Auckland had the highest number of mortgagee sales in June, 112, up from 109 in May.
But Auckland’s contribution to the country’s total was down from 44 percent of the national total in May, to 38 percent of the total in June.
The number of mortgagee sales in Hawke’s Bay was up 800 percent year-on-year.
Mr Donald said while business commentators were beginning to speculate that the worst of the economic recession was over, the downturn of the past 12 months was still catching up with those who had overstretched themselves with mortgages.
“Many New Zealanders aren’t out of the woods yet and it will be a long time before they will be.
“The job losses keep coming and the culmination of months of financial strain mean many Kiwis have exhausted their options for meeting mortgage payments.
“In the United States the recession had seen around 1 million foreclosures and commentators expect there will be another 2 million to follow.
“We expect that we will experience the same type of lag in New Zealand and there will be more mortgagee sales in the coming year.”

Why would we expect the same, when our banks are sound, and did not get involved in Sub Prime lending? Surely its just a sign of a tough job and business market?

August 29 2009 | Media Beats Up Real Estate and New Zealand Real Estate Market | No Comments »