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  1. #1
    Join Date
    Aug 2003
    Posts
    7,610

    Default Matthew Gilligan tells Economist Property is GOOD business

    Who better to have in your corner than Matthew Gilligan? In the Property vs Shares 'debate' Matthew is in the property corner and NZIER Economist Shamubeel Eaqub is in the shares corner.


    Shamubeel says "Property is Bad Business"; Matthew says that's not true and in a comprehensive response presents analysis comparing the performance of Property vs Shares with equal initial investment.

    Property is the clear winner (not that we needed to be told) and finally someone has stood up to the Economists who love to bash property!

    Well done Matthew!

    Read the article here

    regards,

    Donna
    PropertyTalk Blog - property articles

    BusinessBlogs - the best business articles are found here



  2. #2
    Join Date
    May 2007
    Location
    Hamilton
    Posts
    3,586

    Default

    When I first saw this article I thought, what about at 80% LVR.

    I worked through the first example, and actually works out very similar to example provided, with $276,500 ownership over renting.

    I then wondered, what about other areas with lower capital gain. So Hamilton figures with 80% LVR. Still worked out similar with $79,360 ownership over renting.

    Ross
    More Profit from Property? TEACH ME MORE
    Ross Barnett - Coombe Smith Property Accountants
    Proud to give the best property advice for over 13 years.

  3. #3
    Join Date
    Dec 2003
    Location
    Wellington
    Posts
    606

    Default

    But seriously how much longer can Auckland keep growing at 7-9% PA? I know there is a supply-side issue - but there is little evidence that incomes are rising at anything like enough to keep houses (rental or purchased) affordable

  4. #4
    Join Date
    Sep 2007
    Location
    Auckland
    Posts
    8,299

    Default

    Quote Originally Posted by lissie View Post
    But seriously how much longer can Auckland keep growing at 7-9% PA? I know there is a supply-side issue - but there is little evidence that incomes are rising at anything like enough to keep houses (rental or purchased) affordable
    The price of houses used to be related to NZ residents income levels. But they aren't anymore.

    Because we have so many overseas buyers getting their ill gotten gains out of their dysfunctional countries over to ours, where it's handily cleaned and laundered via residential property - with the government's blessing.
    Squadly dinky do!

  5. #5
    Join Date
    May 2007
    Location
    Hamilton
    Posts
    3,586

    Default

    Over the last 20 years, REINZ median house sale price for whole NZ has gone up by 6.3% on average per year.

    Auckland is expecting 1 million more people over the next 20 years. I would guess that with these numbers Auckland would outperform the rest of NZ. If there are that many people looking for houses, then that is likely to drive house prices up over the next 20 years!

    Based on these figures do you think Auckland will grow 7-9%?

    Ross
    More Profit from Property? TEACH ME MORE
    Ross Barnett - Coombe Smith Property Accountants
    Proud to give the best property advice for over 13 years.

  6. #6

    Default

    The winning answer is – it depends on! In my case I have done both and prefer properties as investment, which gives me control over input and output.

    Situations like in AK are not sustainable for ever - as they say, what goes up must come done. The specific is NZ’s culture has been driven by properties. That has worked over decades locally but with entering the global market the impact is visible everywhere.

    Another stupid thing is to divide societies in winners and losers. Of course people like it when overnight their house hit the million Dollar mark. And the opposite - people scratch their heads to obtain that sort of finance. Well, banks like it, too -selling instead of 200k loans lending 400k – even more profit.

    And country’s statistics look even better – becoming a nation of QV millionaires – do you see any child poverty because of that? I miss an infrastructure that supports the balance in this country. The entire debate property vs stocks is rubbish.
    Last edited by klauster; 03-12-2014 at 11:05 AM.

  7. #7
    Join Date
    May 2008
    Location
    Torbay, Auckland
    Posts
    3,859

    Default

    Poeple have lost a lot of money over a squggly line.

    At least with property you have some control over your investment.

  8. #8
    Join Date
    Sep 2013
    Location
    Auckland
    Posts
    3,885

    Default

    At least with property, you get a cash return every week instead of a small dividend (fully taxed) from shares every 6-12 months.

  9. #9
    Join Date
    Jul 2012
    Location
    Tavua, Fiji
    Posts
    3,347

    Default

    It has always been laughable to compare real estate with other investments in my view. Not because other investments don;t work but with shares let's say there is so much speculation and change fuelled by non concrete things. Real estate is quite unique in that regard. Everything else, shares, gold, oil, almost everything can double or halve in value overnight in certain circumstances. Conversely housing is an essential part of everybody's life. It is therefore incomparable I reckon.

  10. #10
    Join Date
    Sep 2013
    Location
    Auckland
    Posts
    3,885

    Default

    Quote Originally Posted by Damap View Post
    Conversely housing is an essential part of everybody's life. It is therefore incomparable I reckon.
    Exactly, that's why so many prefer brick & mortar.


 

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