Property Investment By Gareth Morgan

[Cliffy]

Just one point re the ratio of household income to house prices, personally I belive there is "Zero" correlation.
And if there was, then its out of kilter as the houses being built right now are about twice the size of houses build in the 1960's.

Yep, I agree. Plus households tend to have 2 incomes now, and with the last boom higher priced houses have much more equity (low or no mortgages).

I would like to see a historic correlation of income to mortgage values.

[Wayne]

and with the last boom higher priced houses have much more equity (low or no mortgages).

how so??...............

[Cliffy]

Sorry. might not have explained myself properly.

I mean people with existing houses (not 1st home buyers), when they are selling and then buying again are not getting a loan for the full value of the house they are buying as they have existing equity. They might only need 20%, 40% or no mortgage at all. So using those houses in the "average house prices" to income ratio could skew the stats.

These are generally the higher priced houses that when included in "average houses prices" raises that average and thus also the ratio of incomes to prices.

More pertinent in my opinion is the average income to average mortgage value.

Or first home buyer house price to income ratio.

[Bluekiwi]

Sorry. might not have explained myself properly.

I mean people with existing houses (not 1st home buyers), when they are selling and then buying again are not getting a loan for the full value of the house they are buying as they have existing equity. They might only need 20%, 40% or no mortgage at all. So using those houses in the "average house prices" to income ratio could skew the stats.

These are generally the higher priced houses that when included in "average houses prices" raises that average and thus also the ratio of incomes to prices.

More pertinent in my opinion is the average income to average mortgage value.

Or first home buyer house price to income ratio.

good point i missed that

and first home buyers who dont like that fact, should look a starting off in a smaller / further out house rather than trying to leap into an I want now house, or even get a basic rental, and then rent, till they can afford to leap in to a proper first home.

I had to live in Henderson and have a weekend part time job for 3 years before I bought my house in Torbay.

8 years latter the mental scars are still there

[nzfrazer]

nice one gazza, tell the punters that property is no good, shares are the way to go, then swoop in on a distressed vendor and bag a bargain, legend mate

[Glenn]

Oh goodness I must be a failure. I work heaps, do not ride a fancy motor bike, and could not bring myself to buying a fancy house like Gareth has done.

It is not a bad idea though.

Perhaps next year.

[Davo36]

nice one gazza, tell the punters that property is no good, shares are the way to go, then swoop in on a distressed vendor and bag a bargain, legend mate

This is my point really.

If someone was to say "Oh don't buy XYZ shares, they're dog tucker..." and then they wait for the price of XYZ shares to go down and then they buy them, wouldn't this constitute and ethics problem for that person? Or at the very least investors would be right in ignoring any future commentary from this person?

The reverse is also done. People owning shares talk them up, provide future earnings reports showing how the price will skyrocket and then when it does go up they sell. This is called pump and dump.

Now if this same kind of thing is applied to property, then as investors we should ignore any commentary from someone who does this shouldn't we?

[Wayne]

It would be misleading and probably illegal but that isn't what Gareth did is it? He suggested now wasn't the best time to buy investment property and has gone out and brought a lifestyle property. Noone said that it was for an investment. $6mil for me would be a big deal but maybe not for him. Any other tall poppoes to knock down?

[nzfrazer]

I think you´ll find it is an investment property as the articles mentions 5 self contained units.

He´s an asute guy have to hand him that.

He´ll probably be on closeup tonight telling the punters how property is set to crash another 25% haha

[Wayne]

I had the impression from the article that it was 1 house on 4 levels (from memory) that contained 5 distinct units but that doesn't make it an investment property.

[CJ]

I had the impression from the article that it was 1 house on 4 levels (from memory) that contained 5 distinct units but that doesn't make it an investment property.

Agree - I beleive he is going to use the 5 distinct units to house refugees as part of his charity.

Actuallly, maybe it does sound like an investment.

[theburglar]

I would be amazed if that house passed a building inspection!

[Viking]

Morgan KiwiSaver changes tack

ROB STOCK Last updated 05:00 24/04/2011



Gareth Morgan

Andrew Gawith
Relevant offers




Low returns have led Gareth Morgan Investments to re-evaluate the way it operates its KiwiSaver funds in a bid to keep pace with the rivals it has been so critical of.
The firm is arguably the most economist-driven fund management operation in the country, and seeks returns from formulating big-picture views on asset allocation and currency.
But its early decision not to hedge currency exposure hurt returns, and prompted the company to change tack in a bid to reduce future risk.
"The journey matters," said Andrew Gawith from Gareth Morgan Investments (GMI), who co-founded economic research company Infometrics with Morgan. In the short term, he said: "We had to accept that we can be well off the pace with our peers by taking a contrary view on the currency."
Gawith said the firm now recognises that people got sick of hearing their returns weren't that flash as a result of movements in the New Zealand dollar.
More here:
Morgan KiwiSaver changes tack



ROB STOCK Last updated 05:00 24/04/2011
Share
Print
Text Size


Gareth Morgan

Andrew Gawith
Relevant offers




Low returns have led Gareth Morgan Investments to re-evaluate the way it operates its KiwiSaver funds in a bid to keep pace with the rivals it has been so critical of.
The firm is arguably the most economist-driven fund management operation in the country, and seeks returns from formulating big-picture views on asset allocation and currency.
But its early decision not to hedge currency exposure hurt returns, and prompted the company to change tack in a bid to reduce future risk.
"The journey matters," said Andrew Gawith from Gareth Morgan Investments (GMI), who co-founded economic research company Infometrics with Morgan. In the short term, he said: "We had to accept that we can be well off the pace with our peers by taking a contrary view on the currency."
Gawith said the firm now recognises that people got sick of hearing their returns weren't that flash as a result of movements in the New Zealand dollar.

[Wayne]

Maybe economists don't know what is happening - gosh, surely not.