Is your glass half full or half empty? With commentators lining up to predict the gloomiest possible scenarios for our economy we thought we’d put some water back in the glass.
Sure we have high interest rates, petrol and food are expensive and the housing market is in a “slump.”
But offsetting all of this gloom we continue to enjoy a kick-arse natural environment, our population continues to grow, we produce food for the world (for which there will always be demand), we still have near full employment, and now we have a Free Trade Agreement with China.
The long term prospects for New Zealand are excellent! So think of the next 2-3 years as taking a breather.
Yes – house prices have stalled and they needed to. However, predictions of 30% price drops are headline grabbing and irresponsible sensationalism.
Some properties will drop by 30% as the result of forced sale – death, divorce, or debt. Highly geared property investors, some property developers, and apartment owners who bought off plan at inflated prices will be hardest hit. The other 95% of property owners will sit it out, maybe a little uncomfortably until interest rates fall.
Long-term property remains an attractive investment – our economy is fundamentally sound and we have population growth.
There are a lot of similarities between property and shares. Our human psychology is to buy near the top of a cycle (I’m missing out) and sell near the bottom (panic.) Or better known as greed and fear. The media plays to this psychology because it sells papers and makes us watch TV.
Ignore the media and view every deal on its merit. You are far more likely to find great deals today than over the past 2 years when property was going gang busters. This is the best buying market in 2 years!
