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

[whitt]

If had not seen the name of article writer I would have guessed it was from a real estate agent. They use this technique to try and artificially keep market going and sell houses.

But thinking about it now. The writer is actually in the capacity of an estate agent with the company Blue Peak.

[Libertas]

Positive Market Sentiment

Yes and because the current cycle/market is clearly over-cooked we may see more of these types of articles from those with vested interests in keeping investors buying more property or property related services.

[Propoholic]

Auckland property investor Sean Wood predicts the city's next property boom will be New Zealand's biggest - and it will benefit the whole country.

Like other investors, he says several factors will cause the boom, from 2010 to 2015, with increases in some areas of up to 40 per cent in 12 months.

Being Sunday morning, I have just had a browse of the Bible (Grow Rich with the Property Cycle - Kieran Trass). Taken from the section 'The beginning of the Slump':-

"Some experts will be naively (or with vested interests) singing the praises of property, reassuring investors that the market will soon rebound, with investors seeing similar growth in values to that experienced in the preceding few years."

[RonHoyFong]

Given that everything does have its "Law of Averages", I am still of the opinion with earlier thoughts that the Next Boom will be the Boom of all Booms, however I can sense that perhaps this will come after a severe slump...

So in saying this is an Opportunity which awaits.

ie An Accumulated Vulture Funds to pick up bargains from "distressed sellers" followed by a "Buy and Hold" strategy to maximise a massive Capital Gains in the Next Boom of all Booms.

Ron

[whitt]

Yes Ron I agree it does seem a slump or flattening would be approriate prior to an eventual boom.

[Jumpin]

After the boom of all booms will there be a slump of all slumps?

[Libertas]

After the boom of all booms will there be a slump of all slumps?

The current economic fundamentals point to a slump of all slumps comming soon. We may have just had the boom of all booms.

[captaincrab]

Mr Woods doesnt seem to read the paper as he missed the announcement on July 5 (NZ Herald) by the Government that immigration will be reduced to 45-50,000 per annum only.And some want it to be less than that.Sort of destroys his whole premise that property will go up because of 200,000 migrants per annum.
I think Propoholics quote from Kierans book is apt.

[Josko]

I think Propoholics quote from Kierans book is apt.

Though I wouldnt suggest that Mr Woods or anyone associated with RM is an expert, vested interest 'yes', expert "NO".

[SuperDad]

Wood, who owns more than 35 properties in Auckland worth $14 million, says most immigrants will come from Asia and India. Used to living in high-rise apartments, they will favour similar accommodation in inner-city Auckland, at least until they get to know the city and its suburbs.

Sean Wood thinks that shoebox apartments will make a good investment.

Richmastery is hawking sleeping boxes in the Columbard complex.

Is there a possible conflict of interest here?

Paul.

[Propoholic]

Wood, who owns more than 35 properties in Auckland worth $14 million, says most immigrants will come from Asia and India. Used to living in high-rise apartments, they will favour similar accommodation in inner-city Auckland, at least until they get to know the city and its suburbs.

At least 50% of my tenants (in central Auckland) have always been immigrants from Asia and India. These people have often come from high population cities where low density accommodation is not available. Bottom line, they havent had a choice! When they land in NZ they are just as up to speed with the 'good school' zones and available residential stock as any Kiwi. These families view a 2brm unit/3 brm house next to their school of choice as their first choice. They view a 2 brm unit in a block of six as luxury compared with high rise living.

I think Sean has fond memories of Auckland's Queen St in the early 2000's where every second building was converted into an English language school. Those days are gone and the apartment market doesnt have that under pinning anymore.

[RonHoyFong]

Mr Woods doesnt seem to read the paper as he missed the announcement on July 5 (NZ Herald) by the Government that immigration will be reduced to 45-50,000 per annum only.And some want it to be less than that.Sort of destroys his whole premise that property will go up because of 200,000 migrants per annum.
I think Propoholics quote from Kierans book is apt.

Though I wouldnt suggest that Mr Woods or anyone associated with RM is an expert, vested interest 'yes', expert "NO".

Sean Wood thinks that shoebox apartments will make a good investment.
Richmastery is hawking sleeping boxes in the Columbard complex.
Is there a possible conflict of interest here?

CC, Josko, SD

Lets put it in the right perspective.

Next year 2008 is election year, so anything will go to win votes, (even the possibility of an increase in Capital Gains Tax if it helps.)

Remember Winston Peters was very anti Asian Immigration with criticism of ostentatious houses.
This obviously got him a long way with Grey Power votes and made him the King / Queen Maker.

Immigration or what ever, is still needed to replace retiring BB’s and I have to say that even with the help of BB’s, we just aren’t breeding fast enough to maintain a static working population.

Lets not forget that 2011 will again be another election year after the next.

I would be very interested know your thoughts on dealing with a shortage of worker from 2011?

Remember also that the apartments promoted by Sean Wood will probably not be finished for 2 to 3 years which is getting very close to "D" day

[captaincrab]

http://www.nzherald.co.nz/topic/story.cfm?c_id=305&objectid=10427824

Perhaps there wont be a worker shortage. You forget the variable that people might just not retire at 65 but carry on. I saw something else the other day where older workers are getting paid a lot more now as well. With technology, I work at home now, its only going to get better and that will make it easier for people to work longer.

[poormastery]

Price premium for off plan apartments?

Mr Fong says:

"Remember also that the apartments promoted by Sean Wood will probably not be finished for 2 to 3 years which is getting very close to "D" day"

Okay. But the legendary Saffron apartments seemed to be priced at a premium of around a 100% mark up, as compared to the current prices of similar Auckland apartments.

If prices for apartments have to double in the next 2-3 years in order for the "investor" to even break even, I suspect that rather than needing just 200,000 immigrants a year to make money - the investor might need a million immigrants per annum.

The Saffron apartment premium of approximately 100% is very difficult to justify in terms of demographics, or indeed in terms of any of this voodoo economics vested interests are peddling.

Be careful out there!

Regards,
*poormastery*

[Commercial Dan]

The current economic fundamentals point to a slump of all slumps comming soon. We may have just had the boom of all booms.

Well said, we are heading towards a real slump soon, anyone not prepared is finished! Anyone owning shoebox apartments will also be finished, quite plain and simple...all newcomers be aware that you will be entering a very difficult phase of the market, box with caution and rid yourself of the 'I'm missing the boat' mentality...otherwise you will well and truely sink with it.