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  • muppet
    Banned
    • Sep 2003
    • 10593

    #1

    Olly's latest newsletter

    Hi Guys

    Olly's has released his latest newsletter.

    "When Fools Rush In"
    Olly Newland's Column, August 2008

    We are now about six months into the real property downturn. Until last December there was still a positive note -- despite the collapse of several finance companies and with other hints of worse to come.

    Now there are those who say 'the worst is over' and that we can look forward to a more stable market and the resuming of the property bubble.

    I do not believe that at all. Some optimists and their advisors are merely seeing a false dawn, in my view, and there is much more pain to come.

    Since the beginning of the year, many more local finance companies have collapsed or shut their doors, and overseas the financial markets are still deep in trouble.

    Sooner or later there will be a real crisis, with emergency measures to be taken -- and that will be the end of the beginning.
    It often takes a crisis to solve a crisis.

    Judging from previous experience, I'd say we are probably about one-third of the way through the problem, with much more unpleasantness to come, but (and this is an important distinction) only for a relatively FEW.

    Learning from the past
    During the 1987-1991 meltdown down both locally and internationally I was continually amazed to see that the restaurants were full, properties were still sold for good prices, people continued to go on expensive overseas trips and buy the finest wines.

    This taught me that a recession (for that is officially what we are in) really only affects a small number of people. For many, it is business as usual.

    While 10% of the population may be suffering in the recession, 90% ARE NOT.

    Now all this is good news indeed for many property owners and I, for one, am more optimistic than ever. Here's why.

    If we are one-third of the way through with two-thirds to go:
    It means that the real upturn (or least a stable market) will likely arrive towards the end of next year, 2009. Hence, most of us can while away the the rest of recession in relative comfort until then.

    It means that investors can now drive bargains that were unthinkable to many 12 months ago. Take advantage of this while you can.

    It means that fuel prices should steadily fall (not all the way back, but enough to take the hurt away), interest rates should drop (cheers!) and the banks will relax their po-faced attitude of today and be more realistic tomorrow.

    All we have to do is survive for the next 18 months or so, gather up real bargains in the meantime, and get ready for the better times ahead.
    Read the rest here:


    Regards
  • whitt
    Fanatical
    • Jun 2005
    • 3922

    #2
    I must say a very well written article Olly.
    Some commonsense writing and even offers some decent advice.

    Comment

    • Orkibi
      Fanatical
      • Sep 2004
      • 2419

      #3
      I sense an opportunity thru Olly's wards...
      New Zealand's #1 Marketplace for Property Investors & Sellers!
      FREE Access to HOT Property Deals
      CLICK HERE FOR MORE INFO.

      Comment

      • Badger
        Fanatical
        • Feb 2008
        • 1796

        #4
        Olly is missing parts of the bigger picture

        I would tread very carefully

        Most "consumers are debted up to there eyeballs" already! That money has to be paid back...

        lower interest rates created the inflated house prices and gave banks and NZ a false economy and balance sheets...

        Fuel prices will be floating all around as different geographic locations fall off the oil buying radar untill the supply dwindels to point of "can u get the stuff"

        Ya better hope your one of the "survivers" unfortunatly the landscape of doing things will be far different than 1990-91

        Comment

        • EddieREAL
          Freshie
          • Apr 2008
          • 24

          #5
          I agree with Badger's reaction to Olly's comments, i.e. to tread carefully. I'm not knocking the man, but he seems to have acquired almost guru status since his TV appearances. My recollection is that his specialist field through the 70's - 90's was investing in OFFICE BLOCKS and the like. He was never much involved in RESIDENTIAL investment. He also is reputed to have lost millions on his investments after the crash. If so, how does that qualify him as the Residential Investment Property Guru?? Also, the property market DID NOT crash as a result of the Sharemarket crash in october 1987. Government Staistics show house values remained level for ONE YEAR, then regained upward momentum in 1989. For all those doomsayers [Olly included, Keiren Trass included, Diana Clement of NZ Herald included] please read the report in the Business section of the NZ Herald today [08 September 2008] as to the real trend in house prices in the past year, here and overseas! For house price statistics 1970 to 2007 see my website; www.realinvest.co.nz . Cheers, Eddie.
          Last edited by EddieREAL; 08-09-2008, 05:10 PM. Reason: misspelling noted

          Comment

          • OllyN
            Fanatical
            • Dec 2004
            • 1041

            #6
            In reply

            For your information I have bought sold and owned over 350 residential houses in Auckland, Wellington, Queensland and Sydney during my career. I think this might just qualify me.
            OllyN [email protected]
            Independent Property Consultant
            Residential and Commercial Solutions

            Comment

            • 67910241
              Fanatical
              • Jan 2008
              • 1077

              #7
              Eddie so

              what about the unfortunate, unhistorical, downward sloping trend of THIS year (2008, both here and overseas (Ireland, UK, US, Spain), as well as the US market continuing its downward trend from late 2006?

              Are you cherry-picking the periods that look the most bullish and optimistic?

              I am not saying that I think commercial can't ever lose its tenants, even if they're major Aussie banks (which can still close some of their branches sometimes).

              All I am saying is that the house I almost bought last year here in Auckland I would struggle to sell for 70 grand (or about 15%) less now, and I am eternally grateful to the doomsday sayers that got me panicking back then.

              Comment

              • EddieREAL
                Freshie
                • Apr 2008
                • 24

                #8
                Correction

                Thanks OllyN for putting me straight on your Residentail investment experiences - I stand corrected. My humble apologies.

                TO: 67910241 - Firstly this is NOT Ireland, UK, US, Spain, etc. where lower prices have hit. Neither is it China, India, Arab States, etc where prices are SKYROCKETING! THIS IS NEW ZEALAND, a separate market, even from Australia. The dynamics which drive our market are almost purely kiwi in origin. So, it's not me being selective. I've referred to average house prices during the period 1970 to 2007. Please do check the statistics yourself, then feel free to comment.
                Also, were you in a force majuer situation which meant that you were compelled to sell your property?? If not, and you'd done your homework properly before buying it in the first place, and you were rightly seeking a long term investment, why sell Did you seek proper qualified advice before selling?

                Comment

                • Badger
                  Fanatical
                  • Feb 2008
                  • 1796

                  #9
                  Originally posted by EddieREAL View Post
                  Thanks OllyN for putting me straight on your Residentail investment experiences - I stand corrected. My humble apologies.

                  TO: 67910241 - Firstly this is NOT Ireland, UK, US, Spain, etc. where lower prices have hit. Neither is it China, India, Arab States, etc where prices are SKYROCKETING! THIS IS NEW ZEALAND, a separate market, even from Australia. The dynamics which drive our market are almost purely kiwi in origin. So, it's not me being selective. I've referred to average house prices during the period 1970 to 2007. Please do check the statistics yourself, then feel free to comment.
                  Also, were you in a force majuer situation which meant that you were compelled to sell your property?? If not, and you'd done your homework properly before buying it in the first place, and you were rightly seeking a long term investment, why sell Did you seek proper qualified advice before selling?
                  NZ a separate market? I doubt that its the global village and where part of that our system of banking tells me this...

                  Purely Kiwi? I doubt that since most of the credit the bankers have loaned to kiwi's to inflate house prices has come from overseas like japan...

                  Im reasonably sure China real estate is slumping somewhat...most of those tower blocks in china are empty....

                  I wouldnt trust to many statistics in regards house prices since the price of houses only reflects the amount of money being printed by bankers and in NZ as with many other places its nothing more than "price" inflation reflecting the increase of fiat paper or "inflation"

                  Meaning there really hasnt been any "real" gains at all...its an illusion!

                  Comment

                  • EddieREAL
                    Freshie
                    • Apr 2008
                    • 24

                    #10
                    Are you really such a sad puppy? You seem to only focus on the doom and gloom side of life. No 'real gains at all' , huh? Just ask the Likes of OllyN and Bob Jones in NZ, and say Sir Richard Branson in UK, Donald Trump in USA - they've made billions between them from PROFITABLE property investment.
                    By the way, if it were the 'global village' that you imply, and ever country is equally affected, why isn't the state of the respective economies in every country of the world trending exactly the same as each other???

                    Comment

                    • Badger
                      Fanatical
                      • Feb 2008
                      • 1796

                      #11
                      Originally posted by EddieREAL View Post
                      Are you really such a sad puppy? You seem to only focus on the doom and gloom side of life. No 'real gains at all' , huh? Just ask the Likes of OllyN and Bob Jones in NZ, and say Sir Richard Branson in UK, Donald Trump in USA - they've made billions between them from PROFITABLE property investment.
                      By the way, if it were the 'global village' that you imply, and ever country is equally affected, why isn't the state of the respective economies in every country of the world trending exactly the same as each other???
                      No not a sad puppy just a different outlook from the mainstream propaganda

                      Doom and gloom no its called reality there EddieREAL

                      Yep I have cashed up my self in the terms your eluding to...but inflation is a crafty stealth enviroment to operate in

                      Those guys have so much money it becomes metapysical for example with a million dollars at a bank agreed term lets say 10% would be $100,000 in interest per year minus tax and so far with that payment ya havnt lifted a finger or walked out the front door...coming from a trades background thats a better return then any "hard work" I have encounted.

                      According to the charts most if not all are trending about the same direction at the same time heres a link to some charts and a traders commentary on some current reality...

                      http://www.financialsense.com/asia/d...2008/0903.html

                      link has some asian charts for major markets they look pretty similiar to me...
                      Last edited by Badger; 09-09-2008, 03:41 PM.

                      Comment

                      • EddieREAL
                        Freshie
                        • Apr 2008
                        • 24

                        #12
                        The charts are ALL Asian Equity markets. [Not all the same though].

                        We are talking NZ Residential Property trends, NOT Asian or any other Equity markets.

                        The Investment environment falls into four main Asset Classes:- Equities, Property, Fixed Interest and Bonds.

                        In your other example, one needs to have accummulated $1million of net investible capital before one can generate $100,000 of income [don't forget tax by the way, so evene if you could obtain a return 10% p.a. on a secure investment, unlike property, tax of $39,000 would be paid, leaving a net of $61,000] - how is that acheived, if not by some form of effort, i.e. work [mental &/or physical].

                        FIRST, you have to WORK for your money, THEN you can have your money work FOR YOU.

                        I don't regard your so-called 'reality' view as being such, it's more like you're being defensive following an unhappy experience. A not unnatural reaction, but hardly 'reality', which implies it to be the norm!

                        People are making good returns on good property every day - my Clients do, my partner does and I do.

                        I wish you good fortune in the future.

                        Comment

                        • Badger
                          Fanatical
                          • Feb 2008
                          • 1796

                          #13
                          equity markets reflect whats happening in society in a basket full of stuff

                          the charts for equities all seem to be heading down housing is included

                          sure you can break it down and find one suburb in NZ thats holding up better than the rest but one small region dosnt make the market...

                          about a million...Thats just it a simple example that the individuals you held in esteem have billions doing that all day every day. I do it myself on a smaller scale.

                          never said people wernt able to turn a earn from property I just questioned your assumption on why you think NZ property is so different from everyone else on the planet since we practice the same anglo-saxon debt based fiat economics model with out question and that model is finding the glue coming unstuck

                          It was your earlier post that bought up other places around the planet, but im reasonably sure off the top of my head that China and other places are in a bit of a property slump and thats backed up by the SSE or Shanghi stock exchange which as with others has a real estate component to it...many other charts seem to tell the same story

                          US Treasury stepping in to prop up fannie and freddie tells me alot as well...

                          eeerrr ya lost me with the unhappy experience part

                          not really about my reality its more about whats happening in financial markets right now

                          happy investing...
                          Last edited by Badger; 09-09-2008, 06:34 PM.

                          Comment

                          • Glen
                            Banned
                            • Jan 2005
                            • 1443

                            #14
                            What's inflation at currently?,.......4%?

                            Then surely from the examples given regarding the $1 mil invested in the bank at 10%pa(yeah right), then you would also have to deduct $40k from your net result of $61k, which leaves you with only $21k,...i.e. $403 pw net,...all from $1 mil cash in the bank.

                            Pretty piss poor aye?!

                            Comment

                            • Badger
                              Fanatical
                              • Feb 2008
                              • 1796

                              #15
                              Glen its only a simple example but why would you deduct $40k?

                              Id guess real inflation in NZ is north of 9%

                              Comment

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