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  1. #11
    Join Date
    Dec 2010
    Location
    Cambridge, NZ
    Posts
    1,375

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    Me too, but I think we'll see a little bit more activity.

    Blimin' hope so, anyway!

  2. #12
    Join Date
    Sep 2006
    Location
    Christchurch
    Posts
    892

    Default

    Quote Originally Posted by [email protected] View Post
    I've found a good one who tells the truth :-) Rodneys stuff is phenomenal
    http://www.sra.co.nz
    No one is perfect but I find Rodney's stuff useful as well.

    I was moderately surprised no one had linked to this yet. Some snippets:

    But a law of economics is that market players can control prices or volumes, but not both. This gets to the heart of why communist-style economies ultimately fail (i.e. because the dictators try to control both prices and volumes), but that is a completely different story. In the current context what matters is that by effectively withholding supply in an attempt to stop prices falling as much as should occur based on the deterioration in the underlying demand-supply balance, prices do not fall dramatically, which at face value suggests the vendors achieved their objective. But the consequence is that only a small to moderate number of vendors are able to experience the achieved prices because the number of sales tumbles.
    In the long-term the situation comes back to the real or inflation-adjusted prices discussed in Chapter One. If the would-be vendors wait 10 years, during which time prices in general will increase around 30% and incomes by something more than this, they will achieve something in the ballpark of their current asking prices. But the dollars they get in 10 years time will buy 30% less goods and services than they would buy today because of the increase in general prices, so they will end up just delaying the inevitable (i.e. death by a 1,000 cuts rather than by decapitation).
    To borrow Rodney's metaphor, there are people out there getting decapitated. Ultimately however, whether someone chooses decapitation or death by a thousand cuts may well be irrelevant depending on house price inflation vs general inflation over the coming years. Just how bad this current slump is (in terms of real prices, which is what you should all be considering) may well not be determinable for years.

  3. #13
    Join Date
    Dec 2010
    Location
    Cambridge, NZ
    Posts
    1,375

    Default

    Ah , but there are a small number of winners....those that held out and formed the small number of sucessful sellers.

    Human nature means everyone (oh ok, almost everyone) thinks they'll sell and keep most of their value if they.....just......hold....out.....a.....little... ..longer.....

  4. #14
    Join Date
    Sep 2006
    Location
    Christchurch
    Posts
    892

    Default

    Of course, but basing any kind of expectation on outliers would be foolish to say the least.

    Your comments regarding human nature are spot on in my experience, largely those who choose to sell at a loss are the ones who have little to no choice in the matter.

  5. #15
    Join Date
    Dec 2010
    Location
    Cambridge, NZ
    Posts
    1,375

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    Sure...it's like taking over Harvey Norman and insisting that everything stay on the shelves until it sells at asking price. Just like our property market, it screws turnover.

    You make much more as an economy if your vendors suck up the loss and keep turnover moving.

  6. #16
    Join Date
    Sep 2008
    Posts
    7,658

    Default

    From district to district, the changes in median prices over the past year have varied from increases of up to 3.8 per cent in five regions to falls of more than 4 per cent in three regions and a drop of 9 per cent in Northland.

    http://www.nzherald.co.nz/business/n...ectid=10694176
    have you defeated them?
    your demons

  7. #17
    Join Date
    May 2008
    Posts
    3,691

    Default

    Quote Originally Posted by Xav View Post
    No one is perfect but I find Rodney's stuff useful as well.
    I noted this:
    Quote Originally Posted by Rodney Dickens
    The national average house price fell 10% between the peak in the December quarter of 2007 and the trough in the March quarter of 2009 based on the QV House Price Index, which is formulated in such a way that it accurately measures the national average house price. This was the largest fall on record,...
    So the largest fall on record for NZ house prices was 10% which was quickly followed by a recovery to end up 5% below the peak.
    Sounds like a pretty reliable investment to me.

  8. #18
    Join Date
    Sep 2006
    Location
    Christchurch
    Posts
    892

    Default

    What report is that from Bob? I don't think Dickens would put much stock in those figures for the reasons explained in the article I linked to.

  9. #19
    Join Date
    May 2008
    Posts
    3,691

    Default

    Chapter three of his Real Housing Market Story.

  10. #20
    Join Date
    Sep 2006
    Location
    Christchurch
    Posts
    892

    Default

    Thanks (link for reference).

    I meant to refer to his first report in my preceding post, not the second one which I previously linked to. It is rare to see anyone on this forum talk in terms of real house prices, which is unfortunate.


 

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