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Recession in NZ. Real? Fantasy? Quick? Slow?

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  • #16
    I was at a gathering at the beginning of the month and we were all going around the table saying what we had been up to in the last 6 months since our last meeting and where we were heading. Someone mentioned the recession at some stage and to be honest I very innocently asked "is there still a recession?" I had been so busy and had sold alot of properties, some of which had been on the market a while, I honeslty thought it was all over, perhaps because I don't watch TV or read the papers or listen to the news I stay blissfully unaware of the problems others are having anyway I hadn't expected there to still be a problem.

    When I was in my local pet shop the other day getting some food for my birds the staff member commented they had been doing really well. Mind you haveing been in that industry it traditionally does extra well in bad times and does pretty well in good times so perhaps not a fair comparison.

    I am not really seeing too much negative around me
    I know there is still talk out there so lets hope people can find a way to pull themselves through it all. we need to get creative in this market.


    • #17
      Rental Houses Flood (Whangarei) Market - Northern Advocate 12/5/09

      In one short year, landlords in Northland have gone from hero to zero. The huge jump in the number of properties available for rent has seen a radical change in hiring habits, with landlords no longer in the driving seat. Late last week, there were 265 empty rentals in Whangarei. The total for the same time last year was 145.
      It's not a very deeply researched article but the 5 columns of to-let adverts don't lie!
      You can find me at: Energise Web Design


      • #18
        Where have all the prospective tenants gone?
        "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx


        • #19
          Originally posted by Baron Silas Greenback View Post
          What a good thread! real world stories and anecdotes instead of crystal ball gazing for a change!
          You may call it crystal ball gazing but Id call it common sense and it was all reasonably obvious 4-5 years ago. Most of the so called crystal ball calls I made 18 months ago on this site (and was chastised for) are becoming reality for many.

          This is only the begining, and no amount of talking up growth, low interest rates and money printing will account for the fact that the under pinning resources for food, energy, water and other commodities are finite.


          • #20
            Hey Muppet,

            I think it's just that there as been a huge amount of section development and new house builds that out-stripped demand for housing. There's been a shift from old to new and more difficult times have seen tenants willing to share rather than rent alone.
            You can find me at: Energise Web Design


            • #21
              In regard property investors, recession and activity in property - it's a game of two halves at present for us.

              Half the client's I am talking too are cutting costs, selling down and retrenching from their leveraged positions, and learning to live on lower household budgets. They typically are motivated by fear and necessity ( to restructure) due to a drop or threat of loss of stable income. There were heaps of them over Jan to March 09 - all property reliant in their income or employed by businesses hard hit by a downturn in turnover. But it has slowed...

              The other half of client's I am seeing say ' what recession', and see opportunity in the slump to pick up bargains. These people tend to have stable income/solid employment or self employment, and now have the benefit of low interest rates and cheaper gas. So they are completely unaffected by the downturn.

              I have a heap of mates in this position ( lawyers, accountants and stable earners), who think the recession is the best thing that has happened to them because they can buy cheap cars, travel and pick up bargains.

              No surprise here. It's a game of two halves.

              One thing we are doing is trying to organize the distressed clients going to mortgagee auction to sell to the non distressed, - one persons problem is another person's opportunity. Seems to be working well.

              We are also showing people with financial problems the various ways to improve cash flow, including looking at the tax planning they should be thinking about. Often assets that are on revenue account that have fallen in value, - can reap tax relief if shifted at market value to a new entity ( where a change of use occurs.) This information helps some clients a lot.

              EG Cost price $1m, current market value, $600k, client wants to convert use to hold long term. Sell it now at registered valuation to a new entity, that holds the property on capital account. The new entity crystallizes the $400k loss for the old entity which may be able to be offset with other tax burdens.

              Anotther comment, - I am hearing that the Barfoot Auction in Auckland every Wednesday has 350-400 people in it again, - up from the 10 people attending last October 08 ! Rental property is being pushed up to silly 2007 levels by the uninformed newbie investors, drunk on low interest rates and the emotion of the new house buying process. In that regard, while its a great time to look for bargains - watch out for over priced property, - the crazy first home buyer brigade are out in force again with a 'low cost of funds = cost of renting' mindset.

              Things are actually really quite busy accoringto teh agents I am talking too.
              Last edited by Matt Gilligan; 13-05-2009, 03:22 PM.
              Matthew Gilligan CA - E-mail Matt
              Chartered Accountant Specialising in Tax Structures, Property & Trusts
              Read my book: Tax Structures 101


              • #22
                I would agree with Matt on those crazy auction prices.

                Not only are the buyers leaping in boots and all but the vendors are not as quick to take offers as they were a couple of months back.


                • #23
                  Originally posted by tpr2 View Post
                  I would agree with Matt on those crazy auction prices.

                  Not only are the buyers leaping in boots and all but the vendors are not as quick to take offers as they were a couple of months back.
                  depends...i just bought a house 35,000 below current RV...a week ago...