NZ 1st homebuyers are ScReWeD...

[cantab]

Actually, theory's wrong about the need to raise rents
Jacob Saulwick
April 6, 2007
SMH

http://www.smh.com.au/news/business/...366410005.html

[Jess9]

So true. If Cap. gain is not occuring - or small cap loss on total cost (however possible high investment loss), then logically, yield will become paramount again - therefore new investors will not enter, reducing demand etc. Remember all those investment books that didn't push hype and which state cap gain is only a bonus, and positive c/f was the (realistic) target. I think (with regard to that article)what will occur is a little of both, i.e. over a period of a few years (3-5) prices will pull back slightly and be eroded by 3% inflation p.a. as well as rents rising somewhat.

[Dazza]

halebop do u have the reference for that chart?

whered u get it from etc etc?

many thanks in advance

[Halebop]

Hi Dazza,

The chart and charting methodology is mine. The data is one of Statistics New Zealand's datasets. They provide an indexed housing set commencing from 1981. There are separate sets prior to 1981 using different criteria.

The data is quarterly annualised which is not my favourite method - I'd prefer to know what each quarter actually did but over such a long series the distinction is probably minor.

[cantab]

Article in Saturday's Press about how domestic timber prices are about to start lifting significantly due to rapidly rising export prices so feeding into house construction cost inflation. Supposedly one customer was informed by Carters that there would be two price increases for timber of about 25% in just a matter of months. Export log prices are up 23% in the last year on the back of strong Asian demand but less supply from Russia. Interestingly Russia has recently announced its intention to apply a 90% tax on log exports by 2009/2010. To date all the other construction cost inputs into a house have risen strongly over the last 5 or 6 years - up 75% according to the statistics.

A fall in the Kiwi dollar against the US would result in further domestic timber price rises.

The problem for Kiwis is not that house prices are out of whack - they are not - rather the real issue is that Kiwis' incomes are too low - the rest of the world still sees Kiwi houses as cheap as chips.

[Crypto Crude]

cantab,
Im thinking about getting into tree investment at the moment, for the very same reason as you are talking about...I see a bright future here, and a complete turnaround to how this sector has been performing over the last many many years

quote:The problem for Kiwis is not that house prices are out of whack - they are not - rather the real issue is that Kiwis' incomes are too low - the rest of the world still sees Kiwi houses as cheap as chips.

its not until those foreigners move their familys to nz... earn our wages, until they realise just how expensive our property prices are...
and this has all been going on when exchange rates arenot in their favour, and have been this way for years...
when exchange rates fall, then a new wave of foreign investors will pursue kiwi land...
[8D]
.^sc

[Crypto Crude]

quote:cheap as chips.

all this brother wants is one scoop...
and possibly a hotdog to boot...
[8D]
.^sc

[cantab]

quote:Originally posted by Shrewd Crude

cantab,
Im thinking about getting into tree investment at the moment, for the very same reason as you are talking about...I see a bright future here, and a complete turnaround to how this sector has been performing over the last many many years

its not until those foreigners move their familys to nz... earn our wages, until they realise just how expensive our property prices are...
and this has all been going on when exchange rates arenot in their favour, and have been this way for years...
when exchange rates fall, then a new wave of foreign investors will pursue kiwi land...
[8D]
.^sc

Could be a shrewd move. Forestry has been a bleak sector ever since the mid 1990's. Logs would have to be the only commodity that hasn't gone up in price even though I see that the retail price of toilet paper in Australia has doubled over the last two years. I look at the forestry investments we made in 1994/5 and they are reselling around cost, yet the land has probably doubled in value and the costs to replant and tend the forest would also have risen substantially.

Agree about the exchange rate. I wonder how many houses are owned by absentee owners such as expats? Heard about one the other day - Kiwi living in London purchased a house in Governors Bay to use as a summer house.

[coge]

Bob Jones has categorically said; do not invest in airlines hotels or forests. I tend to agree. The best way to use trees is to add value. Cut them down & turn them into buildings. But good luck regardless Shrewdie

[Crypto Crude]

hey coge....
bob jones... job bones... who ever this creature is....
I totally agree with him on Airlines...
I mostly agree with him on Hotels...
I donot agree with him on Trees...

The best time to be getting in is the time when everyone is getting out...
(this applys the same in a housing market sell off, and generally any other investment where you want to time the bottom end)...
I see a bright future with trees... theres no doubt that the worlds supply stock of trees cannot contiune to keep dumping them on the world markets and not effect their prices...
For the first time im thinking about a nice stable investment where it aint going to be 100% positive or 100% negative returns within a short period of time...

other possible bad investments Id add to that list...
-resource sector investments in the eastern european block, such as russia....
-any picks that Yogi in Auzzie makes... for real...

good possible investments include...
nwe, stx, nzo, also one could ask mackdadunk for his list....
-Bonds are a great choice as interest rate cycle is at the top or one more possible rise...
when interest rates start falling then your bonds are worth more, as you have locked in a higher interest rate...
[8D]
.^sc