MET - Metlifecare - one for the fundies?

[Balance]

https://www.nzherald.co.nz/business/...ectid=12327722

ASB Bank (one of the biggest home mortgage lenders in Auckland) forecasts 6% fall in house prices.

[winner69]

Tony Alexander has been around for a long time. I think he's on the money with his opinion. If one considers that any decline is probably only temporary the net effect on the DCF valuation of companies in the retirement sector is very small. https://tmmonline.nz/article/9765167...+27+April+2020

I agree that many agents will tell you whatever is in their own best interests in terms of getting a commission which is why I only listen to the guys at the top that I know and respect and are giving me non vested interest information.

But the venerable Tony says “Previous recessions indicate house prices fall at the same time GDP declines, and start rising again as the economy starts growing,”

But I thought you were predicting a U type recession (rather than a V)

That ‘rising again’ might be a way off?

[Beagle]

But the venerable Tony says “Previous recessions indicate house prices fall at the same time GDP declines, and start rising again as the economy starts growing,”

But I thought you were predicting a U type recession (rather than a V)

That ‘rising again’ might be a way off?

Quantitative easing, interest rates at 100 year lows, LVR restrictions gone, ex pats coming home. We may see a fall of 5-10% in the 12 months ahead in my view. Too hard to predict further out than that but I think Queenstown district could come back a LOT more in the years ahead. Might be a good time to buy a nice lake view holiday home down there but I think one would be wise to give it a good 12-18 months to let the market find a new level before going bargain hunting. Market there might end up looking like Auckland water storage dams, half empty and dropping

ARV have a village down there...hmmm

[Balance]

https://www.stuff.co.nz/life-style/h...-as-you-expect

Many factors at play which will significantly cushion declines in house prices, view of Tony Alexander.

Those factors will not prevent house prices on average from falling over the remainder of this year in the face of heightened job insecurity and income losses for so many business owners.

But they will mitigate declines and set the scene for a 2021 recovery.

[Bjauck]

https://www.nzherald.co.nz/business/...ectid=12327722

ASB Bank (one of the biggest home mortgage lenders in Auckland) forecasts 6% fall in house prices.

The government will do its darnedest to limit house price declines.

As for the share market, ex-PM Bill English encapsulated the attitude. They would be upset if share prices do NOT decline by a large percentage. This attitude sums up NZ priorities. The value of NZers investment in NZ listed companies is more-or-less expendable. This is an easy target (if misplaced) for breast-beating over fairness. It is the value invested in residential property that is of national (and electoral) importance and priority.

[Scrunch]

The government will do its darnedest to limit house price declines.

As for the share market, ex-PM Bill English encapsulated the attitude. They would be upset if share prices do NOT decline by a large percentage. This attitude sums up NZ priorities. The value of NZers investment in NZ listed companies is more-or-less expendable. This is an easy target (if misplaced) for breast-beating over fairness. It is the value invested in residential property that is of national (and electoral) importance and priority.

Tend to agree. Before Covid, a fall in house prices would have been appreciated (by government) as it helped resolve a number of issues. After Covid the thing the government needs the most is a restoration of confidence in the economy. If they get that (which probably also gets the current crew relected), a recovery can start. A Key plank towards this future recovery would be stable house prices. Quite frankly I can't see people having a lot of confidence and therefore spending, if house prices are on a downward slide with no indicators of where the bottom is.

The problem is that the government doesn't always get what it wants, but if it does that should help MET.

[Beagle]

ASB expects 6% house price decline followed by a recovery https://www.nzherald.co.nz/business/...ectid=12327722.

[traineeinvestor]

The emotive tabloid headlined "Desperate to buy a house" One Roof item was reporting what agents were saying. Real Estate agents are saying demand will take off. In my experience, agents have always said that you'll mss out if you do not act now. When agents tell the story, it is sometimes difficult to distinguish what is their puffed up faux demand from real demand.

That is not to say there will be no returning ex-pats. Some may already be cashed up. Some may be cashed up and without any need to find employment before buying a NZ house too. Those with a London property to sell before buying in NZ will not be in such a great position.

No doubt after the lockdown period there will be pent up demand to buy as well as pent up demand to sell houses.

+1

I'm an expat currently doing lockdown in NZ. Two agents cold called me last week to ask when (not if) I'm coming back here to live and whether I had found a home yet. Apparently they know something I don't. Both agents also assumed I was only interested in the expensive end of the market which would come as a shock to my creditors.

In addition to the points you mention, there's also the question of career and, for many, a non-Kiwi spouse, children settled in overseas schools and other ties that build up over the years.

I'm sure some will come back, maybe even a few more than normal, but expectations of a deluge of returning Kiwi's "desperate" to buy a house are wishful thinking on the part of the agents. Likewise, the idea of buying a house as a safe haven home for the future fails due to the combined effect of NZ's tax residency rules and the FIE regime.

What we may see is an increase in people looking to migrate to NZ from places like the PRC.

[King1212]

Nah.....we only take people with a lot of bacon in the fridge ....

[traineeinvestor]

Nah.....we only take people with a lot of bacon in the fridge ....

The $10 million needed for Investor Class 1 application may be an awful lot of money to some of us but there there are a lot of people who have that kind of wealth in the PRC.