Forum Archive Index - May 2001

["Breadmore, Malcolm" <BreadmoM@anz.com>]

Max
Interesting theory, however.....you say
"the percentage of the population over the age of 60 will double ".......
from what 2% to 4%, 5% to 10%. This may not be as significant as you
suggest.
"the cash needs of an elderly population often make them 'motivated
vendors'"..... I disagree. They haven't been saving all their lives to
suddenly decide to sell in such a hurry as they sell under market value.
"These cheap houses are also going to negatively impact the rental market as
this is the market that will suddenly be able to purchase." So you say there
will be a whole new group of purchasers out there...you can't have it both
ways. Supply and demand will keep the prices up.
 
A couple of other points to consider.
People have to live somewhere. Whether we rent or own we all need roofs over
our heads. The market will never change that fact. Housing will not
disappear because some chartist or fundamentalist says "it's not a good
buy".
Immigration has been given the green light to increase by 60%. I read in the
IT news that 10,000 new immigrates will be granted residency because the IT
sector is under-supplied with skilled resource.
Back in 1987 the NZSE 40 was over 4000, it is now only half that. I wonder
what the return is on the average 3 bedroom home, if purchased back in 87.
 
Food for thought
Regards
Malcolm
 
 
 
 

-----Original Message-----
From: Murdoch Dryden [mailto:m.dryden@auckland.ac.nz]
Sent: Wednesday, 16 May 2001 8:32
To: 'sharechat@sharechat.co.nz'
Subject: Re: [sharechat] Residential property again



Hi Michael 
I have been talking with companies in the retirement home market and have
aso worked the stats for StatsNZ.  I couldn't agree with you more regards
changing trends in teh residential market as a result of the aging
population.  the only panacea I see to this is immigration.  Between now and
approx 2012, the percentage of the population over the age of 60 will double
(I'm trying to remember my stats here so wouldn't hang myself on these
figures, they're close though).  New Zealanders have been encouraged by a
relaxed capital gains tax to vest their major investment in their house (and
often a second and third one).  For many this is their retirement savings.
Trouble is that when they all start cashing out of their 3-4 bedroom family
homes at the same time, there will be an oversupply on the market, and the
cash needs of an elderly population often make them 'motivated vendors'.
These cheap houses are also going to negatively impact the rental market as
this is teh market that will suddenly be able to purchase.

Never-the-less the rate of leverage continues to make it an easy investment
to enter, and it is tempting.  Short term the tax benefits alone can be
compelling, (its OK to pay some tax, its galling however to pay  more tax
than the likes of fay and myers who can afford to sustain non-resident
status and pay no tax whatsoever)

Max 



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