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  1. #31
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    Mak Dunc
    The generation you are talking about are not into borrowing for the future ,dead or alive.
    Running with the Bulls!!
    Go with the flow
    slimbo

  2. #32
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    A reverse mortgage or not when the house owner dies the house still gets sold.

    It's either sold by the bank which holds the reverse mortgage or the deceased's kids who want the cash.

    If lots of people die at once, lots of houses get sold at the same time. The more houses on the market the lower the prices.
    \"The overweening conceit which the greater part of men have of their own abilities [and] their absurd presumption in their own good fortune.\" - <b>Adam Smith</b> - <i>The Wealth of Nations</i>

    The information you have is not the information you want.
    The information you want is not the information you need.
    The information you need is not the information you can obtain.
    The informaton you can obtain costs more than you want to pay.

  3. #33
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    quote:Originally posted by Shrewd Crude

    whats up rmbbrave.... you said
    "for a young graduate now this might be okay but I'm 38 and in 20 years I'll only have 15 left"...
    we will get early signals...so not 20years but earlier... for most it will be tooo late to start saving...but in say 10 years the smart BB's will sell early... so there will be many years of no growth, but fairly stable before all BB's are retired and then the big crash...
    and remember its not when the BB's die... its when they start to sell out of housing because they need the cash to survive....
    [8D]
    .^sc
    In his book, Boomer Nation, Steve Gillon breaks Baby Boomers into two groups: Boomers, born between 1945 and 1957; and Shadow Boomers born between 1958 and 1963.

    This generation will be dying at a great rate of knots between 2015 (1945+70) and 2043 (1963+80). That's when we MIGHT see falling house prices or we might not.

    I think we will but it is possible I'm wrong. If I am wrong and I wait until 2020 to buy a house and they don't get any cheaper then I've wasted 13 years.
    \"The overweening conceit which the greater part of men have of their own abilities [and] their absurd presumption in their own good fortune.\" - <b>Adam Smith</b> - <i>The Wealth of Nations</i>

    The information you have is not the information you want.
    The information you want is not the information you need.
    The information you need is not the information you can obtain.
    The informaton you can obtain costs more than you want to pay.

  4. #34
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    The dying Baby Boomers won't just be selling the houses they live in they'll also be selling their 2nd and 3rd houses they have bought as investment properties.
    \"The overweening conceit which the greater part of men have of their own abilities [and] their absurd presumption in their own good fortune.\" - <b>Adam Smith</b> - <i>The Wealth of Nations</i>

    The information you have is not the information you want.
    The information you want is not the information you need.
    The information you need is not the information you can obtain.
    The informaton you can obtain costs more than you want to pay.

  5. #35
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    New contributor here...
    Many NZers choose to buy and live in their
    houses when it costs them more than the house is
    worth to do so.

    So why do many NZers live in the houses that
    they own and pay vast interest, rates, insurance,
    maintenance costs, etc.

    How many people here live in the house they own and why?

    -Roger.

  6. #36
    Senior Member Halebop's Avatar
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    I'm not a fan of housing as an investment destination but for many it has proved a wise investment when the alterntive was likely renting and consumption. Although it's a relatively expensive way to grow wealth, the owner occupied home is a worthwhile "compulsory" savings scheme without requiring much input from government and it provides a number of emotional benefits that are difficult to value.

    Disc: Renter and investor (but not in real estate!)

  7. #37
    Senior Member Halebop's Avatar
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    Don't underestimate the boomers. I think they have added 1 to 2% to growth rates. Although this doesn't sound a lot, in years when real growth might be 0 to 2%, this equates to technical recession and stagnation without them.

    I'm not suicidal about the future. There is plenty yet we can do in the next 20 years to improve birth rates, entice (Younger?) immigrants and dare I say it in "throw another body at the problem" NZ, improve productivity growth. But non-earning-cutting-back-and-dying boomers will reduce growth rates by at least 1% (I think closer to 1.5 to 2%). 1% might not sound like a lot but when you look at real growth rates over a time series this drastically improves the chances of recession in any given year. Therefore the chance of investment / financial underperformance in any given year is also materially augmented - and this leads us back into my earlier comments about that K wave.

  8. #38
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    Srothern- yeah mate, just trying to keep my arguments clear and uncomplicated

    RJS- hello, you are welcome here

    rmbbrave- you said "if im wrong and I wait until 2020 to buy a house and they dont get any cheaper then I've wasted 13 years"...
    I guess mate that those are the risks...im looking at other alternatives like a business, and in 13 years (as you say), if housing falls off then im in... but if it doesnt then thats ok too...
    it wont be 13yrs wasted, because surely you will have a backup.... and your cash wont be sitting idle for 13 years...

    Halebop- yes it is a compulsory savings scheme... for most people if they didnt buy a house then they would never have a dime to there name, so a house is a good thing for them...but, we here are dealing with sophisticated investors here (hopefully) and im expecting alot more...

    broke- said "the baby boomer thing is being hyped" .... well if you have 78.2million Americans as baby boomers...(factual data estimated by US census) and 25% of the population retiring... there are two options here... one, you pay them superannuation, and at the moment the 401k plan is well rewarding for the retiree...the other 75% of population would probably have to double tax payments to pay for BB's, ontop of healthcare, schooling, dole, sickness benefit, and the rest...
    or two, not pay them nothing, or bare minimum (scraps off the table)... and watch them sell everything they own, or sell down to much smaller dwellings, or retirement villages which are now everywhere...

    to pay them say $400 per week
    400*52*78,200,000= $1,626,560,000,000
    or 1.6trillion dollars per year in the US... wow mumma...

    for NZ .25* 4,000,000 people =1,000,000
    1million*400*52= 20,800,000,000
    SO with NZ's total GDP for one year being 40 billion or there abouts...
    the baby boomers take up half the value of GDP... (half the total value of all goods and services produced in NZ in one year)
    sure $400 seems high but for those that dont own houses its fair, substitute 200 in, and its still very very large...

    another arugment is that for $400 for the one person retiree equates to $133 for 3 other people to make up the weekly payments based on a 25% retiree and 75% other...

    therefore, we all know that they wont get jack rabbit.... and the sell down delemma stands.. yes you can ignore it Broke... because everyone else is...
    the Cullen fund is much less than 20Billion... maybe 10 bill, so can we even afford to pay for a year or two?
    does anyone actually know how big the Cullen fund is?
    does anyone know what 401k pays?... I know its generous, 400 minimum per week is my guess
    I guess the population will be informed of the BB crisis shortly before it happens,,, will you be foolish enough to wait until then before you listen up to what big brother says?
    I won't..... nor will the informed.....
    [8D]
    .^sc
    Cryptocurrency holdings in utrust cardano and power ledger... ripple... neo.... .....LOCI ...
    Market capitalisation 130billion...
    Coinmarketcap.com

  9. #39
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    broke said "shrewd is right on crude but probably for the wrong reasons"...
    what does this mean?

    its just a name, a damn good one...
    so when I see "steve fleming" name, does that mean hes the NZ cricket team captain.[]
    when I see "Joekings" name, does that mean he never tells the truth []
    or does "bear" only invest in stocks that decrease in value
    does packersoldkidney have any kidneys left?
    is bobby fisher a chess champ
    I wonder just how much ASXIOU really owes the exchange...
    has paper tiger ever made a trade
    you get the idea, dont read too much into my user name, its just a name![]
    I mean no offence to those user names blatenly taken out of context...
    [8D]
    .^sc
    Cryptocurrency holdings in utrust cardano and power ledger... ripple... neo.... .....LOCI ...
    Market capitalisation 130billion...
    Coinmarketcap.com

  10. #40
    Senior Member Halebop's Avatar
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    401k is not a defined benefit. It's a voluntary savings scheme contributed to by the employee but managed by the employer (although this might mean the Fund Manager nominated by the employer). The main benefit is that contributed savings enjoy a tax free status. Only withdrawls are taxed. The value of withdrawls depend upon investment returns and size of contributions. I personally think this is a smart system because the government will enjoy those tax receipts after boomers retire and would have otherwise have stopped paying high levels of income tax. The challenge still remains that so many financial assets are concentrated in an 18 year demographic.

    The New Zealand Superannuation Fund aka Cullen Fund was worth about $11.2b in October.

  11. #41
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    Halebop
    I C...cheers for info on 401k...
    do you think NZ needs some system where the onus is put on the individual rather than the Government?
    last week I was given a free copy of 'The New Zealand Investor'
    dec/jan issue - how the kiwi can fly...
    rather than dispose of it, im offering it to the first person who replys with the postal address, and I will post it over the w/e ....
    Postal address must be in New Zealand...
    articles include... amended offshore tax proposals
    Air NZ, taxing the nation with John key, Abano, commodities and hedge funds, rakon, MHjeweller, midcap index, met NZ, MFS... reply if interested in these topics...
    Cryptocurrency holdings in utrust cardano and power ledger... ripple... neo.... .....LOCI ...
    Market capitalisation 130billion...
    Coinmarketcap.com

  12. #42
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    We own a home (in conjunction with a very nice bank who were generous enough to give me their money) but we were able to buy before the current boom. We've just "upgraded", against my protests, to a bigger home so that the significant other has a creative outlet for her renovating urges. Current mortgage is less than half the current valuation.

    quote:Originally posted by rmbbrave
    I think we will but it is possible I'm wrong. If I am wrong and I wait until 2020 to buy a house and they don't get any cheaper then I've wasted 13 years.
    Why wasted? That comment is assuming that house ownership is such an over-riding goal that it should be pursued at any cost. If renting is cheaper, then you're not wasting 13 years, you're saving money for 13 years. The fear of not owning a home shouldn't be the absolute end for those considering buying... that is arguably what has created the current market state. Housing is just one portion of the basket of goods you are able to purchase.
    Undisputed 2006 World Cup Premierleague Champion

  13. #43
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    RJS - good question and quite hard to answer.

    We own our own home.
    On pure economic grounds renting may prove 'cheaper', but then by the same token why own cars when going by taxi may prove cheaper.

    Ownership gives us a sense of security, achievement and being able to practise the concept of 'continuous improvement' in life. There is not many asset that you can get the use out of it for years and get (usually) more for it when you are finished with it.

    OK it is getting boring...........

    So I may be wrong but happy. Did I say it is cheap or easy?[}]

    cheers and a prosperous NY

  14. #44
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    im a christchurch New Zealand represental... I rep it hard...
    if some gives me their postal address i will send it out, no strings attached...
    If not then its no skin off my back...

    Best quote, halebop said " and dare I say thrown another body at the problem"

    RJS-you question also has something to do with the fact that people choose property because it has always always always been a strong performer in the past.... so no matter the price, and costs associated, and interest charges... that these things are only seen as minor to them in the overall picture... people still think that its guaranteed returns... which its not, and more so now than ever before...
    NZ is in the top two countries with highest interest rates in the OECD, this also represents the highest level of risk...
    With election campaigning next year... and every party promising large tax cuts, hand outs to gain votes, it will be extremely interesting that any redistribution of wealth back to the people is inflationary, if this occurs, interest rates will have to increase again, and again depending on how large re-distribution is...
    tax cuts are not an issue, no tax cuts, no nothing!!
    [8D]
    .^sc
    Cryptocurrency holdings in utrust cardano and power ledger... ripple... neo.... .....LOCI ...
    Market capitalisation 130billion...
    Coinmarketcap.com

  15. #45
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    here here... screwd

    im in the same boat, in my early 20s.

    im just waiting for all u old folks to die, and increase the supply of houses.


    i need a diaster to make me mega rich

    i will have cash awaiting, and will pounce like a jaguar on all the old baby boomers...

    looking forward to it every day.


    ps i hope theres a crash this year

    and i hope i cashed up be4 that

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