Ron Hoy Fong - Will The Next Boom Be The Boom Of All Booms?

[elguapo]

You will find some inner Auckland areas have gone up 30 % over the past 12 months but the end result is properties double every 8-10 years and so have rents.

So house prices double every 8-10 regardless of inflation being 2% or 15%?

My first property in Onehunga in 1969, the 2 bedroom was rented for $12pw, and $10pw for a 1 Bdrm, redouble those figures for every 10 years and you will find rent are sitting where they should be.

Only a snapshot, but house prices tripled in the 10 years from 1969 to 1979, but wages quadrupled. In real terms houses became significantly cheaper. Using the NZ inflation calculator, that $12pw should today be $573, the $10, $477. Your doing very well if your getting that, I think that's close to 50% above general market rates in Onehunga. (2 bed $400-450, 1 bed, $350 maybe).

Compare 1999 to date, wages have increased just 59%, yet house prices have increased three times as fast. How can you sustain house price rises at 3 times the rate people's wages are increasing?

Your 3-4% must be skewered by taking a regional average.

The 3-4% is specifically for Auckland.

[RonHoyFong]

1969 = $ 10. $ 12
1979 = $ 20. $ 24
1989 = $ 40. $ 48
1999 = $ 80. $ 96
2009 = $160. $192
2019 = $320. $384

Something not considered that affects housing demands...
Baby Boomers got married in the early 20s and the mentality then was to get a home and have a family at the same time.
X generation came along next and wanted to do their OEs first, resulting in a desire to only rent until their 30s before thinking of a house, marriage and having a family. This created a hiccup in the supply and demands on home ownership.
Y generation have done a reversal, they want everything now in their 20s including home and family
This uneven pattern changes everything as has the Baby Boomer bubble populations as they age.

Investing where, and why is very important for investing. Using wrong stats at the wrong time in the wrong areas is going to cost.

Experience, knowledge and the understanding of it is what needed to succeed in the boom and to survive in the down-turn. Past stats will help to a point but local knowledge is what will help you analyze potentials gains.

Ie how is past stats going to predict what changes will do when the unitary plan is implemented in the different areas of Auckland Central?
How was past stat suppose to help with building 80,000 leaky homes which are literally worthless, the same homes have very little turnover and have contributed to the shortages of house that we have today. Easy to rent but who the heck wants to own them.

Use the stats to be a leader, not a follower of pattern. Your critism of everything and hiding behind it in every debate is going to handicap you from being mind rich

I once asked an expert in stats in 2003 what he thought of Mt Wellington. He looked at the stats and his reply was negative, I said "but what about the construction is Sylvia Park Shopping Centre" he said he couldnt predict that because that information is in the future. Same thing applied with the re-opening of the through road in Onehunga Mall. Now the unitary plan, and also the population shift as a result of Christchurch Earthquake. Other factor such as the improved rail systems and stations at Panmure and New Lynn, the underground subway down town, completing the South Western Motorways and ring roads of Auckland, plus ferry crossing through to BeachHaven, and retiring baby boomer needing to be replaced are all factors of changing supply and demands which are not considered in stats of the past.

Ron Hoy Fong

Super Coach

[Leftette]

Mind rich? I reckon I'm effing LOADED! Some of you lot, though? I'm not so sure.

[Wayne]

, and the poor young average Kiwi still won't be able to live in Central Ponsonby.

And should they be able to?
I actually don't see a problem with that.

[elguapo]

Baby Boomers got married in the early 20s and the mentality then was to get a home and have a family at the same time.
X generation came along next and wanted to do their OEs first, resulting in a desire to only rent until their 30s before thinking of a house, marriage and having a family. This created a hiccup in the supply and demands on home ownership.
Y generation have done a reversal, they want everything now in their 20s including home and family
This uneven pattern changes everything as has the Baby Boomer bubble populations as they age.

The Y generation want home and family in their 20's? Where is that happening exactly? People are having children later and later, and are less likely to own a home than for 60 years.

Ie how is past stats going to predict what changes will do when the unitary plan is implemented in the different areas of Auckland Central?
How was past stat suppose to help with building 80,000 leaky homes which are literally worthless, the same homes have very little turnover and have contributed to the shortages of house that we have today. Easy to rent but who the heck wants to own them.

Use the stats to be a leader, not a follower of pattern.

There is a good question, how is the unitary plan going to affect Auckland? How was your 'houses double in value every 8-10 years' rule going to be affected by it? What about earthquakes, how will a future earthquake affect Auckland property prices? Leaky homes as you say are easy to rent, but no one wants to own them, why is there not a shinning opening there for an canny investor?

Your critism of everything and hiding behind it in every debate is going to handicap you from being mind rich

Sigh. You do know this is a standard line for con-men and shysters since time began don't you? Your making predictions, you should be at least a bit able to debate the reasoning behind why you think it will happen.

[RonHoyFong]

The Y generation want home and family in their 20's? Where is that happening exactly? People are having children later and later, and are less likely to own a home than for 60 years.



There is a good question, how is the unitary plan going to affect Auckland? How was your 'houses double in value every 8-10 years' rule going to be affected by it? What about earthquakes, how will a future earthquake affect Auckland property prices? Leaky homes as you say are easy to rent, but no one wants to own them, why is there not a shinning opening there for an canny investor?



Sigh. You do know this is a standard line for con-men and shysters since time began don't you? Your making predictions, you should be at least a bit able to debate the reasoning behind why you think it will happen.

Hmmm you are starting to get personal.

You have lost every argument to this point

Did you know the biggest losers are those that are negative.

My guess is you probably don't own any investments, be interesting to know how you have done in the last couple of years, and what your predictions are?

You have stats at your finger tips but have no idea how to analyze it for forecasting.

Only positive people become winners

Doubling of properties every 8 to 10 year since the WW2 is a historical fact... Who am I to argue, your the only one disputing it and good luck to you!

Ron Hoy Fong

[Wayne]

Doubling of properties every 8 to 10 year since the WW2 is a historical fact... Who am I to argue, your the only one disputing it and good luck to you!

I have heard it said many times but where is the fact?
One of the problems is that it also covers very high inflation times - 10% growth with 12% inflation isn't nearly as good as 4% growth with 2% inflation (even with leverage)

[Wayne]

This a graph of the real house price inflation (taking acount of inflation)

[Orpheus1]

This a graph of the real house price inflation (taking acount of inflation)

Hi Wayne,

You got one of those for Queenstown?
Or a link?

I can never seem to find anything like the above for Queenstown.

Thanks,

[Wayne]

no - this was NZ. Out of a report from NZEIR. An interesting report actually

http://nzier.org.nz/publication/the-home-affordability-challenge-nzier-working-paper-20144

[elguapo]

Hmmm you are starting to get personal.

You have lost every argument to this point

You haven't really engaged with any point I've made except to roll out the 'property doubles every 8-10 years' mantra, and imply that any questioning is holding me back from riches. 'It's nothing to do with being personal at all'. If your going to evade a debate and just expect you prediction to be taken on faith, then so be it, just don't go claiming your winning the argument.

Did you know the biggest losers are those that are negative.
My guess is you probably don't own any investments, be interesting to know how you have done in the last couple of years, and what your predictions are?

Well, if your guess about my investments is any reflection of your ability to judge the future of the New Zealand property market, things look a bit grim for house prices.

My prediction is simple, things are simply to uncertain to make a prediction. I'd avoid Auckland real estate and very small town NZ. Regional hub with reasonable yields are still look ok'ish it if your selective and patient, maybe. Most share markets are looking pricey, accumulation of Aussie shares looks the best currently given the XE, but avoid the banks. Paying down debt is really the most attractive option I see at the moment.

You have stats at your finger tips but have no idea how to analyze it for forecasting.

You have presented no analysis other than the same thing you'll hear from your average taxi diver or bar-bore.

Only positive people become winners

The richest person I have met made $20 billion being negative.

Doubling of properties every 8 to 10 year since the WW2 is a historical fact..

It's not, it's not even close to what has actually happened.

[RonHoyFong]

You haven't really engaged with any point I've made except to roll out the 'property doubles every 8-10 years' mantra, and imply that any questioning is holding me back from riches. 'It's nothing to do with being personal at all'. If your going to evade a debate and just expect you prediction to be taken on faith, then so be it, just don't go claiming your winning the argument.



Well, if your guess about my investments is any reflection of your ability to judge the future of the New Zealand property market, things look a bit grim for house prices.

My prediction is simple, things are simply to uncertain to make a prediction. I'd avoid Auckland real estate and very small town NZ. Regional hub with reasonable yields are still look ok'ish it if your selective and patient, maybe. Most share markets are looking pricey, accumulation of Aussie shares looks the best currently given the XE, but avoid the banks. Paying down debt is really the most attractive option I see at the moment.



You have presented no analysis other than the same thing you'll hear from your average taxi diver or bar-bore.



The richest person I have met made $20 billion being negative.



It's not, it's not even close to what has actually happened.

Your stats do not explain the rocketing Auckland house prices. Seem like they're applicable in Tokoroa.

So I guess your not a property investor. I must say you are good at using stats for skewing wrong info for the wrong areas.

Auckland central prices is well above the 4% pa over the past 2 years The higher the inflation and higher the prices the better for investing and holding properties.

Buying in the bottom of the market in 2009 and capitalizing now give more than a 4% average

Paying down good debts that's making you money is an incorrect move during a boom. (However your use of stats from La La Land can prove that wrong I suppose )

Ron Hoy Fong

Super Coach

[speights boy]

An entertaining 3 minute video on the power of numbers.

https://www.youtube.com/watch?v=SLIvwtIuC3Y

[Wayne]

QI is a very entertaining TV series

[Wayne]

Auckland central prices is well above the 4% pa over the past 2 years The higher the inflation and higher the prices the better for investing and holding properties.

That 4% is a 20 yr average.
Yes, inflation is the property speculators dream but is now low so things change.