The game changers

[Viking]

Opinion: The game changers
The events of the past three years (and especially the events of the past three weeks) have changed the economic environment to a new place for a long time to come.
The changes have meant severe financial stress for many, and it is now increasingly difficult to predict with any certainty the direction of the property market (or any market) so as to make rational decisions on the future.
The main 'Game Changers', in my view, are listed below. As more changes arise it will require a continuing nimbleness of mind and decision-making to keep ahead of the game.
In this article I will attempt to pull together a view of 'Where To From Here?' for the property and investment market and see if some order and sense of direction can be deduced from the realities that we now face.

Source

Now unless you want to be totally depressed don't go to interest .co and read the long boring negative comments that Ollie usually inspires from the usual crowd of gold hawkers and bond sellers and those types.

[Keithw]

Good summary Olly
Hopefully it will prove to be prophecy (but dont go getting a big head now)

I was having trouble getting to sleep so took your advice & wandered over to Int.co
Was surprised they even posted your article there ! (Except as cannon fodder of course)
Sure enough, after reading about 10 comments I nodded off

One thing you didnt pick up on is the outflow of yen- the carry traders repatriating their money from NZ to rebuild their country, this could have big influences on our exchange rate & interest rates

[splato]

Why would you rebuild in Christchurch when the ground is so unstable?

[Keithw]

Because not all the ground is unstable.
There are many cities in the world built on swamps, glacial riverbeds, the side of volcanoes etc
It's a matter of risk minimisation verses convenience.

You might ask the same of Wellington, why allow building on top of a fault line ?

In fact if you were doing a cost benefit analysis, what are the lives of 200 people worth ?
The building costs to make them more " earthquake proof" spread over 10,000 houses being rebuilt & countless others being repaired, is apparently 15 billion. (that presumably includes infrastructure)
lets say theres 15000 buildings to be built - just for easy calcs
15 bil divided by 15k is that 100k or 1 mil each ? (is 1 bil nine 0's? ) I think its 1 mil each

& in terms of lives, thats 15 bil divided by 200 people - is that 75k per person or 750k ? I think its 750k

So one might ask, what is the highest cost (or least loss) and from what do you get the most benefit? 200 lives or $15 bil of reconstruction and much more in terms of the resulting local economy ?
Whats the GDP of ChCh ?

[SwissKiwi]

What is it with interest.co.nz that has the bitter moaners lining up to complain about their lives and how other people (property investors) are oppressing them?

[drelly]

What is it with interest.co.nz that has the bitter moaners lining up to complain about their lives and how other people (property investors) are oppressing them?

Agreed. I gave up posting there. Very, very few seemed capable of objective discussion. It just became pointless.

[Bob Kane]

What is it with interest.co.nz that has the bitter moaners lining up to complain about their lives and how other people (property investors) are oppressing them?

Whenever these types appeared on PT I'd do my best to encourage them to leave.

[Bluekiwi]

Ollys article detailing the game changers is very well done.
Bringing together all the issues that currently occupy my mind too.
And not pretending to know what the future holds.

[Wayne]

Because not all the ground is unstable.
There are many cities in the world built on swamps, glacial riverbeds, the side of volcanoes etc
It's a matter of risk minimisation verses convenience.

You might ask the same of Wellington, why allow building on top of a fault line ?

Or Auckland on top of a volcano field. When another pops up questions will be asked. All move to Hamilton - about the safest you can get (so long as Taupo stays stable!!).

[NovInvestor]

The only things worth reading on interest.co.nz are:
1) latest & current interest rates
2) Olly's new posts
3) OCR announcement

Mr Hickey is far too negative about property investing, next is Gareth Morgan.

In fact I don't know what Mr Hickey does for day job, probably coming up with "thought provoking" headlines and articles to make money on advertising on the site.

And the people who comment on the articles? They are bunch of negative, depressed, borderline suicidal, Not worth my time.

[Davo36]

Mr Hickey is in the business of selling articles.

And most of them seem to be about us nasty, grasping, economy ruining property investors who aren't bright enough to see that what we are doing is plainly stupid and reckless and that we should be investing in the sharemarket.

That and how retribution (via property prices falling) will be coming shortly.

[Errol]

Mr Hickey is in the business of selling articles.

And most of them seem to be about us nasty, grasping, economy ruining property investors who aren't bright enough to see that what we are doing is plainly stupid and reckless and that we should be investing in the sharemarket.

That and how retribution (via property prices falling) will be coming shortly.

Just ask them who else is going to house those who don't own there own homes, they fall short on a realistic answer.

[MarkButThis]

Olly's summary of the situation is fairly good. It takes a brave person to forecast into the future in these times and his predictions seem fair given the erratic and conflicting evidence that comes out of the market data.

I have quite a lot of respect for Olly's statements on the current and future market status. I wouldn't personally employ his original (first) path to riches involving massive leveraging, nor his choices in renovation techniques, but it doesn't get in the way of respecting his comments on the macro economics of the market.

A person once asked Olly on this site what gave him the right to comment with such authority like this. His answer was along the lines of "Having bought and sold over 300 properties in a career spanning 40 years was sufficient to give him the right". I tend to agree.

His game changers list is quite correct in my opinion and I feel he has several good points.

I checked his 11% interest rate scenario against my house and rentals. I would be in a sticky wicket if this occurred and it is a food for thought, not food on the table scenario.

This has been a paid advertisement for Olly Newland by Empower Education Limited. (Just kiddin')

MBT

[PeterEmpowerEd]

Respek!

This has been a paid advertisement for Olly Newland by Empower Education Limited. (Just kiddin')

<snort!> Nice one MBT!
Thanks for your comments. I've flicked a copy on to Olly, in case he hasn't seen them.

Cheers,