NZ 1st homebuyers are ScReWeD...

[Crypto Crude]

I just read that an article by the Washington Post on May 5th 2002... outdated but same principles apply now... pretty grim readings for BB's
these are American figures....in 2000 the balances of 44% of people in the 401k plan were less thatn 10,000...
ranked second was the 10,000-20,000 category at 14% of 401k plan holders...

and retirement wealth of the wealthiest workers nearing retirement actually declined between 1983 and 1998...87 stock market crash...
also...many of older workers have had their 401k plans wipped out when the dotcom boom which lead to the second worst bear market since WW2...
I also read that the big stockmarket bust will begin in 2016, as BB's start withdrawing their assets... could start to see signs in 2012....
in 2016 their are an estimated 2,282,887 Americans turning 70 years old... 30% increase the year later... there are large tax penalities for drawing down on plans before the age of 70.5 years old... so.... 2016 is the mark...

reasons for little contribution to their plans include high taxes, eductaion costs for their children rising, increased cost of living, and workers donot realise how important time is when investing for the long term...

Im out of shares in 2010... a reason for the last 3, 4, 5 years of excellent returns here and in USA, could be put down to BB's and the fact that increased people in the sharemarket leads to increased prices... the good thing for us is that we will start to see the signs early... The BB's will turn 70 over a matter of 20years and if the market moves down in 2010,2011,2012 then get ready for decades of recessions... mark my words... I will still post here in 10 years... dont let me say I told you so...
Quote I just made up "plan for today and tomorrow, not just for today"
[8D]
.^sc

[Crypto Crude]

RJS- assets that BB's will demand are small one to two bedroom units, small kitchens, small garden.... yes the wealthy ones will demand that of what you say, but most will demand small....
BB's will also demand healthcare... JB morgan is picking Healthcare stocks for 2007, after performing fairly soft last year, and continuing demand put on these stocks by older people... After JB picked Healthcare... F and P healthcare rose 6cents.... wonder if there was any link

[Halebop]

quote:Originally posted by RJS

Buying a house works because of the time factor involved ie your working
lifetime, any long term investment you pay more upfront for long term gain.

I think its the opposite. Equities outperform property by 3 or 4% per annum. Over the long term they are a hands down superior performer. In the short term you can buy a residential dwelling using leverage and enjoy higher than "average" equity performance. Over time though, unless you keep releveraging yourself (and raising your risk profile), your returns will fall below equities as your debt componant reduces. Whats-more, over long term, capex requirements on a property increase, reducing the tax benefits the current depereciation allowance system provides (because you are now actually spending your previously claimed depreciation).

quote:Originally posted by RJS

If your worried about purchasing a losing asset then position yourself in
the asset that the retiring BBs want in the next 10 years.

Its been predicted that BBs will sell their surburban home for a retirement
setting like rural, coastal, natural and quiet,

This is what Baby Boomers are right doing now (and over the last 10 years). It's not what they will do when actaully retired and grow older and slower. As they age they will have less energy to mow lawns and keep up a large property (and less income to pay someone else to do it). They will have more acute health care needs so proximity to medical care will become more important. The A&E facilities in Tairua are unlikely to match what the average urban center can provide. Their physical mobility will also reduce so urban centers are better equiped to provide public transport and other services that a nice, quiet, rural or beach setting cannot hope to offer. I'd pick those lifestyle assets as something to sell into the current boomer demand. All but the richest and healthiest boomers will be wanting to sell these properties well before they die.

[cantab]

quote:Originally posted by clar
Cantab – perhaps if rents were higher our thinking would change. But if rents went up, wouldn’t the flow on effect be a further increase in property prices as demand for owning these rental properties likewise increased?

clar, I don't think property prices will go up nearly as much as rents will. Rents need to catch up a quite a bit with property prices.

Personally I don't see a need to ever own ones own home, better to pay rent and accumulate deposits to put down on an increasing number of rental properties when the time is right.

Interesting read on this very subject on P2 of the property section of today's Press.

Shrewd Crude, compared to rents, house prices look expensive to me.

When I'm old I will want to live walking distance from the Post Office, bank, shops, cafes, medical centre, medical specialists in a nice safe area, in Christchurch, that would be Merivale, alternatively something nice in the inner city.

[rmbbrave]

I think you've got it the wrong way around Cantab.

It is more likely property prices will fall to match the rents.

[Steve]

quote:Originally posted by cantab

When I'm old I will want to live walking distance from the Post Office, bank...

Cantab, it appears that you are not going to be embracing the electronic age that has email and a cashless monetary system!

[rmbbrave]

"I believe the baby boomer thing will turn out to be a non-event because NZ's population will continue to increase. (Most of the world would walk over broken glass to live in NZ)The people will be there to fill the homes, someone else will take over the ownership as the baby boomers die off."

Cantabs above statement could be correct.

But not only for NZ - You could say the same thing for Europe, Japan, the US, Canada and OZ.

I believe the competition for quality migrants is hotting up. A Chinese or Indian scientist who wants to migrate could probably go to any one of the above.

It is extremely difficult to predict what will happen to property prices as a result of demographic changes.

While I believe property will ot be such a good investment as the BB start dieing off, the chances I'm wrong are likely to be higher then I would like.

[Mr_Market]

A thought that occured to me today. Even at 7x the average wage people don't feel agrieved enough to take action. I wonder what critical mass would be for people to take to the streets in protest - 10x wages, 20x wages.

[Steve]

Does anyone know where to find a chart showing the comparative history of house prices vs income? There must be something somewhere on the net...

[Crypto Crude]

no-one will no what is going to happen in 10 years, no one will no what government policy will be in 10 years, no-one will no which party calls all the shots...
But at the moment the govt does have an immigration policy where only a certain amount of immigrants can come into the country per year... and I cant personally see them changing policy If house prices fall off... because the government is already concerned about house prices being high, and wants the market to cool off.... house prices donot dictate policy...
policy doesnt just change because house prices do, and certainly not if house prices fall 10%... maybe if 25 or 35% then policy might change, but not immediately... their will be time delay between house price falls, policy change, and then internationals to react...
and time for us to make action...

www.rbnz.govt.nz/keygraphs/fig4.html

check this graph out, treands off this graph indicate percentage returns of housing to decrease