Finance guru looks south after cashing in on housing boom

[freezinhot]

An interesting article in todays paper, I wonder if he wants to pay capital gains tax on this sale. He was always harping on about how the government needed to slow the housing market down, bet you hes happy they tried and failed now! Talk about the pot calling the kettle black.


He's the man who predicts whether house prices will rise or fall - so when he put his own home on the market, Bernard Hickey expected a good sale. Property reporter Alanah Eriksen asks the business commentator why he felt it was time to sell.
So when Auckland house prices started skyrocketing past levels seen in the 2007 boom, he pounced.
The financial commentator has just sold his family's four-bedroom home in Epsom for more than $1 million, almost $400,000 more than he bought it for seven years ago.

Source

[Keithw]

Oh No No FH Capital gains tax is only for those nasty property investors, not for genuine hard working home owners !!!

This is the guy who was spouting 30 % drops in house prices, but when i offered to take his place off his hands for $750k back in 2008 & give him the option to buy it back a few years later at "market value" (ie in his expectation he could get it 30% less) he wouldnt have a bar of it !!!!!

Popularist journalism

[drelly]

Good time to bring this back out...

I am sticking to my forecast for a 30% fall in the REINZ median from its November 2007 peak of NZ$352,000 to around NZ$250,000 within the next couple of years

http://www.interest.co.nz/news/45193/opinion-10-reasons-why-march-housing-surge-was-indian-summer

[Viking]

And now of course he is moving to another falling market. Only to sell out again in another say 7 years.

[gavinc]

This is good new for the New Zealand stock market. I am sure he will follow his own advice and invest his windfall in the stock market as he councils others to do.

[essence]

Do as I say, not as I do.

Bernard Hickey is a populist journalist, not a finance advisor. He should be treated as such.

[DazRaz]

He is clearing his mortgage, removing any leverage he has.

[Rosco]

'finance guru' ?????? If you have a good property, in a good area of Auckland, with good demand, then wouldn't you want to keep it? It would be interesting to see what the property is worth in 10 years, and whether Mr Hickey thinks he made a good decision then!

[speights boy]

'finance guru' ?????? If you have a good property, in a good area of Auckland, with good demand, then wouldn't you want to keep it?

Good question Rosco.
Let's assume you had a client in the same position with the same intentions.

What assumptions would you use WRT capital gain, interest rates, rental yield, rental costs, future tax rules etc , in order to show him it was perhaps a better option to keep it from a financial POV.

What would be the main risks you made sure he understood ?

[spaceman]

I'm with Rosco... I think......

IMHO a real finance guru would've kept the first house and rented it out while buying a second property in WGTN......I doubt that I would've ever placed that tag on BH though so I guess his current path makes perfect sense.

Cheers
Spaceman

[Perry]

Bernard Hickey: Sell out country to cash in on tax perks

New Zealand Tax system incentives point to rental property investment.

I sold my house in Auckland this week to take advantage of the "heat"
in the market. I'm looking to pay off my mortgage and buy a house,
mortgage-free, in Wellington.

This is my deleveraging plan to reduce the risk of debt and give me
more flexibility around work. But it's not what I "should" be doing,
regarding the incentives thrown at me by our tax system.

Instead, I should be taking the equity out of my house, slicing it up
into deposits and spreading it across rental properties in Auckland,
with good dollops of 80 to 95 per cent loan-to-value ratio debt.

Cash in on what perks Bernie boy?

[Davo36]

Blah Blah Blah Bernard.

So the current problem is that house prices are too high, and it's just too easy to make heaps of money as a landlord.

Other problems Bernard has seen coming (but haven't in fact eventuated):

• The Uradashi Tsunami: Those Japanese housewives and Belgian dentists looked very dangerous for a bit there. They were going to sell all their NZ dollars, sending our currency plummeting.
• The Bond Vigilantes: Not sure what these guys were going to do, maybe not buy our bonds? Or sell NZ bonds cheaply or something? Aaaaghhhh.
• House price falls: 30%. No need to say any more.
• Banks Raising Money via Covered Calls: Again don't really understand this, BUT its really really serious. Watch out! Boo!

For Mr Hickey, it's a very scary world out there!

Thinking about it, I wonder if the finance guys feed him this stuff and then roll on the floor laughing when he takes the bait, hook, line and sinker and publishes an angst ridden story about who the sky is falling - again - but in a different way this time...

[McDuck]

Blah Blah Blah Bernard.

It’s ok that he had an exit strategy. People’s interests change over time.

[Perry]

What Interests?

"Exit strategy?" Really? More
like a BS strategy, it seems.

[Bob Kane]

Millionaire Property Investor Bernard Hickey

What can I say?
Even dumb-arsed Bernard Hickey has joined the millionaire property investors club.
The biggest global depression in 80 years and Bernard's made a small fortune.
By not following his own advice, he's accidentally done quite well.
It's rich bastards like him which are preventing young families from buying their first home!