Auckland - Where in the property clock?

[eri]

7 is a lucky number

if you were to sell off your property stock

1 jan xxx7

party all year

and then re-buy 1 jan xxx8...

[Bluecoat]

He was bang on --- Duncan has a go at him here..

http://www.radiolive.co.nz/Duncan-Garner-Chinese-property-investor-tells-his-members-to-buy-up-Central-Auckland/tabid/674/articleID/42390/Default.aspx

Think the thread should read where from here?
Flat for how may years , when will it rise? All crystal ball stuff
Tony A reckons market peaked, flat for maybe even 5 years.
There must be some nervous folks out there who jumped in late as a result of FOMO.

[Frezzinghot]

Pretty much. '87, '97, '07, '17 was their clock. Ron said he didn't "know why, it just is" but if you look at the timing of credit bubbles that lead to property inflation it seems to be on a 10 year clock.

Personally I think the banks control the timings of the market, they get to over exposed and time to pull back on credit and create negative sentiment through media! Which we know is corrupt anyway.

FH

[Frezzinghot]

He was bang on --- Duncan has a go at him here..

http://www.radiolive.co.nz/Duncan-Garner-Chinese-property-investor-tells-his-members-to-buy-up-Central-Auckland/tabid/674/articleID/42390/Default.aspx

Think the thread should read where from here?
Flat for how may years , when will it rise? All crystal ball stuff
Tony A reckons market peaked, flat for maybe even 5 years.
There must be some nervous folks out there who jumped in late as a result of FOMO.

Agree, I think those that brought last year will be nervous.

FH

[Davo36]

Personally I think the banks control the timings of the market, they get to over exposed and time to pull back on credit and create negative sentiment through media! Which we know is corrupt anyway.

FH

This is the first time I've seen them try to ration credit. Normally they lend more and more until things burst.

After '87, they cancelled heaps of loans, sold off lots of property cheaply.

After '07, they supported everyone, gave them mortgage holidays etc. Didn't sell property off cheaply, waited for it to all come right.

So it's different every time. Who know what will happen when the next slump arrives?

[Don't believe the Hype]

Ok... seems the consensus is that Ron was calling a downturn in 2017... why then would his team be encouraging students even first timers to buy as late as Sept-Oct 16?

[WINZ]

Ok... seems the consensus is that Ron was calling a downturn in 2017... why then would his team be encouraging students even first timers to buy as late as Sept-Oct 16?

To be honest I doubt he really predicted any serious sort of downturn rather heuristically predicts some sort of economic contraction every 10 years.

[WINZ]

We're at the end of an extremely large leveraging (debt) cycle which is in the process of unwinding. This is generally messy as per 2008, however this time it's likely to be significantly worse as there's even more financial integration and due to the cycle co-inciding with the end of a larger generational debt cycle.

[SleepyTiger]

We're at the end of an extremely large leveraging (debt) cycle which is in the process of unwinding. This is generally messy as per 2008, however this time it's likely to be significantly worse as there's even more financial integration and due to the cycle co-inciding with the end of a larger generational debt cycle.

Hi WINZ,
I am interested in hearing more of your view on the economic outlooks and market.

The large generational debt is caused by central government supply credit to supplement the lack of "money" in the last cycle, inflating asset prices as a result - this is extreme in US. How do you foresee this unfolds in a NZ context as we enter the deleveraging phase of the debt cycle?

[Kbkiwi]

Auckalnds speculation fueled investor bubble is unwinding/popping. The lower quartile of housing in owner-occupier dominant areas will be fine as first home buyers will still want to buy as soon as they can. Everything above $800k is probably going to suffer for a few years.

[Bobsyouruncle]

I just can't see any unwinding in Auckland. Flattening maybe but the demand is so high and the banks are making it difficult. Once the Chinese get around getting their money out of China it will be balls to the wall again.
As investors when we talk about the market going south we are really only talking about us being able to find a bargain which is hardly the market falling over. I've been assisting 2 first home buyers get into a home and you just can't buy anything. So when sh*t boxes in Pukekohe, Papakura and Manurewa are selling in hours at 600K or more there is no sign of any impending doom in Auckland. And the upper end is even sillier currently.

[big fella]

Ok... seems the consensus is that Ron was calling a downturn in 2017... why then would his team be encouraging students even first timers to buy as late as Sept-Oct 16?

because Ron wouldnt have a business if he told everyone to stop buying I assume

[Kbkiwi]

I just can't see any unwinding in Auckland. Flattening maybe but the demand is so high and the banks are making it difficult. Once the Chinese get around getting their money out of China it will be balls to the wall again.
As investors when we talk about the market going south we are really only talking about us being able to find a bargain which is hardly the market falling over. I've been assisting 2 first home buyers get into a home and you just can't buy anything. So when sh*t boxes in Pukekohe, Papakura and Manurewa are selling in hours at 600K or more there is no sign of any impending doom in Auckland. And the upper end is even sillier currently.

"Selling in hours at 600k"
"upper end is even sillier currently"

this is all complete bollocks.

[Aston]

"Selling in hours at 600k"
"upper end is even sillier currently"

this is all complete bollocks.

Yes agreed, total bollocks.

I've been 'watching' a 4bdr house since early Dec, initially on the market for $975k+ reduced to offers on $975k. No sign of any offers to date. This house is really well presented and I am confident it would have been sold for $1m+ a year or more ago. Owner was waiting for the best time to sell, but sadly missed the top of the market. The owner must to move out because she is moving into a retirement village so somebody will get a good deal for probably $850k+ ish.

[WINZ]

I just can't see any unwinding in Auckland. Flattening maybe but the demand is so high and the banks are making it difficult. Once the Chinese get around getting their money out of China it will be balls to the wall again.
As investors when we talk about the market going south we are really only talking about us being able to find a bargain which is hardly the market falling over. I've been assisting 2 first home buyers get into a home and you just can't buy anything.

Exactly, because generally people can't see the crash until it's too late, just like 1929, 87, 99 and 08. I don't mean this as a personal dig but I read somewhere that you were bankrupted which I presume was due to a sudden change in the market (as opposed to the result of your skills).

We've been in our current recovery cycle for 8 and a half years and it's been the worst economic recovery globally since the great depression. None of the fundamental problems in the economy were solved and central banks simply threw more debt into the equation a vein attempt to grow our way out of the hole and growth has been lacklustre, whilst fragility has increased spectacularly and spread across the globe.

In terms of you (and other commentators) mentioning demand, on reflection there's always going "demand" for housing in terms of both abodes or investment. Who doesn't want to own their own house and/or multiple rental properties? Technically there is unlimited demand for property as any logical person would want to own more real estate given the chance but that demand is ultimately a function of a few things (i) savings (ii) credit and (iii) affordability.

When houses prices (or any asset, particularly those that are debt funded) continue to shoot up in value then at some point demand dries up due to lack of credit/affordability.

The problem with credit is you are spending tomorrows income today, and when a large proportion of the population levers up beyond their means then then things will eventually correct. Simple rule: More debt = more damage.

So when sh*t boxes in Pukekohe, Papakura and Manurewa are selling in hours at 600K or more there is no sign of any impending doom in Auckland. And the upper end is even sillier currently.

That is precisely problem my friend. This is not a sign of a strong healthy market, this is irrational exhuberance and when the music stops (which it always does) then suddenly there's no chairs to stand on.

From what I understand of markets (especially stock markets but this appliew to all markets) it doesn't take a large catalyst for a large correction. An imbalance exists for a prolonged period and then suddenly peoples aversions to risk slowing switch on. Risk aversion (fear of loss) spreads and reverberates through the market/its participants and then people suddenly wake up and see the roses.

I am literally watching this in real time now in terms of the U.S stock market. The bears have been waving red flags for sometime now (2 years) however now the middle of the road commentators are raising flags. Perception is spreading. China has even bigger red flags but their economy/markets are much more opaque.

I'm not so familiar with NZ property but from what I hear anecdoctally, the music (mania) is starting to die down.

If and this is a big IF, we're heading into another crisis, then the only thing i'm certain about is that this time will definitely be more severe than last time.