What will happen in next five years(1970s back)

[emcd]

Hi All
Read the news about Fonterra's payout, I think the 1970s is back. Everyone agreed that the 1970s property boom was backed up by dairy boom. So here is my forcast for next five years:
2008(1970), prperty price increase 10%(from Sep. to Dec.), It came on the back of dairy export return.
2009(1971), Property is roaring about 15%-18% backed by economy booming through dairy export;
2010(1972), Property price increase another 20% or more based on more export to new economies;
2011(1973), Property market will be cooling after "Captical Gain Tax" or samilar thing introduced by govt.

Check out the data of dairy export(prices) and residential property prices, I am sure you will kind of agree with my forcast.

[Davo36]

I just can't see it emcd. People struggle to pay their mortgages now. Both people in the relationship working, highish interest rates.

Unless wages/salaries increase for a lot of people i.e. not just dairy related folk, then I can't see them affording to pay more for property.

David

[SuperDad]

What were the 5 years preceeding 1970 like?

Surely they weren't like 2003-2007?

[Gatekeeper]

Maybe under "massive" inflation this could happen, but you'd probably still be going backwards in that case. M3 growth has slowed down to around 7.5% from 16% at the beginning of the year, so it appear this one has run out of puff (good!).

[Commercial Dan]

What nonsense!!

Wishful thinking mate, no chance, inflation was out of control back then.

The Credit Crunch will end it all in tears next year, there are some bigger writedowns on the horizon from some major banks, little or no growth for a few years.

[Austrokiwi]

My vote goes with Commercial Dan but with one addition: Inflation is starting to head out of control. The fed and the brits have tried to respond to the credit crunch by printing money (lowering interest rates). The middle eastern countries due to their currencies being fixed to the US are starting to squark about inflation. One of those countries has already switched to the €. The US$ is becoming a liability and dropping the OCR there will only put more worthless US$ into the equation, in the worst case scenario ( I hope it doesn't come to pass!!!!) the US may start looking at double-treble digit inflation.

[emcd]

I can only see a small group of first home buyers struggle to pay their mortgage as they purchased their home last year or beging of this year. Most of people purchased their home two years ago should be no problem since income has incease 9% for two years and there should be some equity on their home now.
History will repeat itself in some kind.

[exnzpat]

Hi All
Read the news about Fonterra's payout, I think the 1970s is back. Everyone agreed that the 1970s property boom was backed up by dairy boom. So here is my forcast for next five years:
2008(1970), prperty price increase 10%(from Sep. to Dec.), It came on the back of dairy export return.
2009(1971), Property is roaring about 15%-18% backed by economy booming through dairy export;
2010(1972), Property price increase another 20% or more based on more export to new economies;
2011(1973), Property market will be cooling after "Captical Gain Tax" or samilar thing introduced by govt.

Check out the data of dairy export(prices) and residential property prices, I am sure you will kind of agree with my forcast.

Call the Doctor; this is the worst case of denial I’ve seen since the 1970’s!

[Commercial Dan]

My vote goes with Commercial Dan but with one addition: Inflation is starting to head out of control. The fed and the brits have tried to respond to the credit crunch by printing money (lowering interest rates). The middle eastern countries due to their currencies being fixed to the US are starting to squark about inflation. One of those countries has already switched to the €. The US$ is becoming a liability and dropping the OCR there will only put more worthless US$ into the equation, in the worst case scenario ( I hope it doesn't come to pass!!!!) the US may start looking at double-treble digit inflation.

Disagree, inflation fears are misplaced and were destroyed during the Douglas era. No longer do we have Monopolistic behaviour, you don't have to ask the restaurant across the street if it is ok to open a restaurant anymore.

[Tucker]

Maybe not 2008 but possibly from end of 2009/2010 onwards.

[brettc]

I hope you are out there buying property then emcd. And please get some nice stuff, so I have something interesting to purchase at the mortgagee auctions in 12 months time.

[Austrokiwi]

You Must be dreaming to say inflation is dead!!!!!

All CNBC and CNN and the German business papers could talk could talk about today in Europe was incipient inflation. Gold bounced up again today ( again in Europe) on the fear of inflation. Look I know from reading the NZ papers New Zealand takes about two to three weeks to catch up with the state of play in the rest of the world but Saying inflation is dead really shows how outta touch you are !!!!! What a joke but its really sad you don't know whats going on.

Suggest you read some basic economic texts and read the Bank of international Settlements reports

I am crying with laughter!!!!!

[Austrokiwi]

I have to add how in the world do argue that did Roger Douglas cure the worlds inflation problems?

[Commercial Dan]

If you know anything about that era, that is when free market policy came in not only in NZ but world wide, since then there has been an influx of competition and deregulation. Were you around investing then?

Back in the 70s, the government owned huge assets like airlines, banks, power companies, etc. As soon as they opened up the importing market and allowed more supply, this effectively killed off serious inflation. Everything got deregulated, competition increased and prices dropped accordingly.

3% inflation as it is is a laughing stock next to high double digit inflation back then, the world market economy, deregulation, free trade, etc etc killed serious inflation years ago. If you call inflation serious at 3-4% levels you are a laughing stock.

If we got to 5%, whipty do...the only way serious double digit inflation could occur again would be through a Government Socialist revolution (highly unlikely) or an economic shock beyond bubonic scales.

...now you go and read your economic history books and don't take advice from stockbrokers who are commissioned salesmen or from Merchant Bankers whom are neither merchant nor bankers.

[Tucker]

I hope you are out there buying property then emcd. And please get some nice stuff, so I have something interesting to purchase at the mortgagee auctions in 12 months time.

Now onwards is a great time to buy if you haven't been already. Who said you have to pay valuation for it.