Forum Archive Index - June 2001

["Malcolm Cameron" <malharcameron@hotmail.com>]

Malcolm
they tried throwing darts at the newspaper share table. the resulting 
portfolio left stockbrokers, investment tipsters, property, and other common 
investments for dead. talk about overseas property prices a comparable 
property with auckland in value in most cases rents for half the auckland 
rent & in most cases prices are flat at best, and people are still silly 
enough to by them to rent out. if they did not property prices IMHO would 
drop at least 20%
from the other malcolm


>From: "Breadmore, Malcolm" <BreadmoM@anz.com>
>Reply-To: sharechat@sharechat.co.nz
>To: "'sharechat@sharechat.co.nz'" <sharechat@sharechat.co.nz>
>Subject: RE: [sharechat] Property Vs Shares
>Date: Fri, 22 Jun 2001 07:44:52 +1000
>
>David
>
>I am amazed at your ignorance on this subject. You seemed to have done a 
>wee
>bit of research and from that research drawn completely incorrect
>conclusions.
>
>1. Someone has to own the houses whether it is you or an investor...they
>need to be owned.
>2. If you don't own them, an investor must own them. If an investor buys an
>asset they need a return on their dollar. Up goes rent.
>3. You compare us with Kenya and Bangladesh.....I don't think so
>4. The median house price in NZ has dropped in the last couple of
>years.....last couple of years. Tell me what was the NZSE40 back in 1987
>4000+ what is it now 2000 (do the math on this one)......and what was an
>average 3 bedroom home worth back in 1987 and what is it worth now?????
>5. Would you buy shares that were performing badly??...no. Nobody in their
>right mind buys property the preforms badly either. As an investor you 
>would
>only buy an asset that has a low cash flow if it has a high capital gain
>potential...Just like shares.
>6. Your point about NZers not being able to afford homes is catch 22. They
>must then rent homes. Investors love this. Have you seen the cost of 
>housing
>in other well developed nations????? You will be surprised as to the amount
>of "up-side" to go in NZ yet.
>7. Shares are risky...so is property. The higher the risk the higher the
>return. But I would prefer to throw a dart at the property press and buy,
>then throw a dart at the share market and buy.....I know which would be 
>more
>"risky".
>8. Have you being reading this forum for long?? There is some great stuff 
>in
>here and there is also a lot of self serving people that actively pump 
>share
>prices up..just so they can sell. IT HAPPENS IN EVERY INVESTMENT CATEGORY.
>Everyone hopes for a bigger fool sometimes. You job is to weed out the hype
>and make sensible investments that suit you own criteria.
>
>Short sighted people annoy me too.
>
>Malcolm Breadmore
>
>
>-----Original Message-----
>From: David Mitchell [mailto:david_mitchellnz@yahoo.com.au]
>Sent: Friday, 22 June 2001 6:00
>To: sharechat@sharechat.co.nz
>Subject: [sharechat] Property Vs Shares
>
>
>I was pleased to see the recently released taxation
>proposal recommended taxing home ownership. I support
>this idea because I believe too much of our countries'
>capital is wasted in residential property, as opposed
>to the economic growth which could be generated by
>investing in growth industries.
>
>I believe this is one of the reasons why the standard
>of living in New Zealand has declined VS OECD
>countries over the last two decades. It is a
>well-known fact that New Zealand has a high proportion
>of home ownership, however, I think many people would
>be
>surprised to know that other countries with a similar
>high proportion of home ownership include very poor
>countries such as Bangladesh and Kenya. No doubt this
>has somthing to do with a lack of investment in
>economic development.
>
>I have never understood the attraction in residential
>property as an investment, (however I have no problem
>with purchasing it as a form of consumption). For
>example, using REINZ statistics, the median house
>price
>In New Zealand has fallen from $153,466 in January
>1998 to $133,766 in May 2001, and these figures aren't
>even adjusted for inflation!! Also, the rental return
>of residential property, in major centres, is only
>around 3% to 6% before expenses such as rates, with
>investors relying on capital gains to justify their
>returns. But as has been shown, there is no capital
>gain, only capital loss!! Another thing that puts me
>off property is that the interest to pay for your
>first house is not tax deductable, whereas if you
>borrow to invest in business or shares, it is.
>
>Some of the major demographic trends occurring in New
>Zealand do not bode well for property. It is predicted
>that New Zealand's population will be stagnant
>over the next century, along with all other developed
>countries, so where is the growth in demand for
>housing going to come from ? I also saw recently in
>the
>media that around 10% of New Zealanders owe $4 billion
>in student loans. Because of this burden, many people
>will delay, or forgo altogether the purchase of
>a house. Another frightening scenario for homeowners
>in the baby boom generation is that this group has
>planned to pay for their retirement by releasing the
>equity in their home, perhaps all at the same time.
>This will have disastrous consequences for the
>property market.
>
>Well, I am a younger person who has recently completed
>uni, and I never intend on buying a house because I
>think it is a very undiversified position to be in. I
>much prefer shares because of the higher returns and
>ability to diversify. One argument is that you can't
>borrow money to invest in shares like you can in
>property, this is in fact wrong because you can
>through margin lending at similar interest rates.
>Another argument is that shares are too risky, however
>let's say you own a house near where you work and your
>firm goes out of business, affecting the local
>economy, affecting house prices. So you've lost your
>job and money in your house in one blow. How
>undiversified and risky is that !!
>
>The media says that around 70% of New Zealanders'
>assets are in residential property. 70% of our funds,
>sitting around doing nothing, hoping for a greater
>fool to buy it. Wake up New Zealanders, this is why
>our wealth is declining as shown in the Westpactrust
>Net Wealth surveys. The majority of us are borrowing
>overseas currency to buy something which is declining
>in value, employs no one and creates nothing. This is
>one sure method of wealth destruction. This is stupid,
>and New Zealanders should be discouraged from this
>behaviour through taxation.
>
>So it annoys me when short-sighted guys, protecting
>their own interests, like Rex Hadley of the REINZ say
>things like "We are encouraged to see the leaders of
>all the major political parties rule out this radical
>proposal"
>
>David Mitchell
>
>
>
>
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