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  1. #1
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    Sep 2003
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    Default Tony's Newsletter 17/07/08

    Comment from this week's newsletter

    Speaking of the next 23 months, we do it we think things will get worse. There are many reasons for this
    and here is one. Many small businesses have financed their activities using their house as security. Now
    the value of their house has gone down in business cash flows have tightened up are finding they cannot get
    extra financing from their bank. That may mean the only way to save their business is to sell a house.
    For others who may not have used their house as security their businesses will nonetheless probably be
    struggling and these operators may look to flick off their holiday homes. In fact one can't help thinking that
    something very nasty could be just around the corner for prime holiday home locations. Over-indebted
    people will be looking to off-load these excess properties for a great number of reasons.
    With the price of petrol being so high the cost of getting there for a weekend away has skyrocketed.
    Second, if they are near water then the cost of running there fizz boat up and down the lake or along the
    coastline has also shot up. Even if they just have a jet ski the cost has also gone up.
    But in addition we have seen a lot of coastal developments in recent years and many of these will only just
    be coming on-stream. With demand pulling back and developers no longer being able to easily access
    finance they will be looking to sell these assets - probably at a deep discount.
    And on top of that there is the general state of the economy which will be dissuading people from borrowing
    money to buy a property they will probably only see a small number of times each year.
    But this opens up opportunities for the baby-boomer generation who may have been looking enviously at
    their highly indebted neighbours in recent years wondering why they also should not be gearing themselves
    up to buy extra properties. Now they have the answer. Their neighbours are in many cases well munted.
    Now they can pick their retirement home up in a nice location for a song - at some stage in the coming 12
    months.
    "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx

  2. #2
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    Sep 2003
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    Default

    and.....

    Key Forecasts
    • Dwelling consent numbers to fall from 24,500 in the year to March 2008 to below 18,000 in the year to
    March 2009 with a slight recovery to March 2010 then above average activity after that as attention turns
    to a shortage of dwellings late in 2009.
    • Real estate sales falling from 77,130 in the year to April 2008 to between 55,000 and 65,000 come the
    end of this year then recovering back over 65,000 in calendar 2009 with further growth over 2010.
    • House prices down 5%-10% by the end of 2008, flat over 2009, rising slightly over 2010, possibly earlier.
    "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx

  3. #3
    Join Date
    Dec 2006
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    1,656

    Default

    Is "well munted" the technical economist's term?

  4. #4
    Join Date
    Feb 2007
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    Christchurch
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    67

    Default

    Quote Originally Posted by k1w1 View Post
    Is "well munted" the technical economist's term?
    I particularly enjoyed that term as well

  5. #5
    Join Date
    Dec 2007
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    Default

    tony quite often uses the term `well munted` down at the local rugby club with a cold tui in one hand and a fag in the other!

  6. #6
    Join Date
    Jan 2004
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    1,544

    Default

    Well it is one step down from "Totally Munted"
    Find The Trend Whose Premise Is False - Then Bet Against It

  7. #7

    Default

    I hope my neighbours are not well munted because if they are I will be partially munted with yet another slice of equity gone. Tony is right about beach houses , they will be among the first things to go. Remember 1988-1991, every second beach house was for sale. On the positive side, economists get wrong 46% of the time.


 

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