Forum Archive Index - June 2001

["Michael Gore" <michgore@paradise.net.nz>]

Yeah Malcolm, I think I might have got out of bed on the wrong side too.
Sorry for that.  I notice I seemed to get more hot under the collar about it
than David did!!  There are definitely two sides to this one, just like in
any market.
Have a good day,  Michael


----- Original Message -----
From: "Breadmore, Malcolm" <BreadmoM@anz.com>
To: <sharechat@sharechat.co.nz>
Sent: Monday, June 25, 2001 1:14 PM
Subject: RE: [sharechat] Property Vs Shares


> Michael
> As a matter of fact I did get out of bed on the wrong side, and agree that
I
> was quick of the mark. I certainly don't want to put anyone off as all
> discussion on this forum, on these topics should be actively encouraged.
>
> I am pleased however that this has raised so much feedback on this
subject,
> and getting the multitudes of opinions from the chatters was enlightening
as
> always.
>
>
> Some points to note:
> House prices are still going up. Check all accurate reality statistics.
> All my investment properties are highly geared and are positive cashflow.
> This means that even if there is no capital gain, my assets are still
> growing because someone elses money is paying them off.
> I am a chartist at heart (go Phaedrus) and regard historical trends
highly.
> Housing is still in an up-trend. I can't pick the tops or the bottoms, but
> with housing, I won't wake up one morning and find house prices have
dropped
> 10% over night as we often do with shares. Housing charts are not
volatile.
> So anyone that does a little bit of analysis can spot any danger signs
> quickly.
> How much effort goes into property management??How much effort goes into
> analysis of shares?? Big question with lots of variables, but the more
time
> you spend, the better your return is.... the general rule of both
investment
> vehicles.
> Remember even if the value of an investment property goes up 0% over
> inflation, and you have a positive cash flow paying off the principle part
> of the mortgage...you are still gaining capital.
>
>
>
> regards Malcolm (disc own property and shares....prefer property :)
>
>
>
>
> -----Original Message-----
> From: Michael Gore [mailto:michgore@paradise.net.nz]
> Sent: Friday, 22 June 2001 5:26
> To: sharechat@sharechat.co.nz
> Subject: Re: [sharechat] Property Vs Shares
>
>
> Malcolm,
> Did you get out of bed the wrong side this morning???  Your treatment of
> David is harsh and a little unfair I think.  New contributors to this
forum
> need to be encouraged not flamed.  There is no need to start off with "I
am
> amazed at your ignorance on this subject".  Some points of your own could
be
> scrutinised.  Firstly you say that someone has to own the houses whether
it
> is you or an investor.  Surely though an investor will be much more cold
> blooded about the price to pay for a prospective property and will not pay
a
> premium for the feeling of owning your own place like many homeowners.
You
> say "I don't think so" in response to David pointing out that rate of home
> ownership here is comparable to Kenya and Bangladesh.  So where are YOUR
> figures??  True you make a valid point regarding the growth in value of
> houses since 1987 compared to the NZSE but with an eye to the future not
the
> past, David has pointed out that many potential first home buyers are now
> leaving tertiary education with significant debt and baby boomers may just
> be selling out of their 4-5 bedroom homes in the next couple of decades.
> These are NEW developments to consider which haven't been a factor in the
> residential property market until recently and which you ignored. You say
> there are a lot of self serving people in this forum actively pumping
their
> own interests.  Sure this has happened but I haven't noticed much
certainly
> not lately.  Mostly seems to me there are some very generous people in
here
> sharing information and ideas.  I hope David continues to contribute.
> regards  Michael
> P.S.  We need "newbies" in this forum.  Many an ignorant newbie including
> myself has asked a silly question which has sparked of intelligent debate
by
> experienced contributors to the edification of everyone.
>
> ----- Original Message -----
> From: "Breadmore, Malcolm" <BreadmoM@anz.com>
> To: <sharechat@sharechat.co.nz>
> Sent: Friday, June 22, 2001 9:44 AM
> Subject: RE: [sharechat] Property Vs Shares
>
>
> > 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
> >
> >
> >
> >
> >
>
____________________________________________________________________________
> > _
> > http://messenger.yahoo.com.au - Yahoo! Messenger
> > - Voice chat, mail alerts, stock quotes and favourite news and lots
more!
> >
> >
>
> --------------------------------------------------------------------------
> --
> > http://www.sharechat.co.nz/          New Zealand's home for market
> investors
>
> --------------------------------------------------------------------------
> --
> > To remove yourself from this list, please use the form at
> > http://www.sharechat.co.nz/forum.shtml.
> >
> >
>
> --------------------------------------------------------------------------
> --
> > http://www.sharechat.co.nz/          New Zealand's home for market
> investors
>
> --------------------------------------------------------------------------
> --
> > To remove yourself from this list, please use the form at
> > http://www.sharechat.co.nz/forum.shtml.
> >
>
>
> --------------------------------------------------------------------------
--
> http://www.sharechat.co.nz/          New Zealand's home for market
investors
> --------------------------------------------------------------------------
--
> To remove yourself from this list, please use the form at
> http://www.sharechat.co.nz/forum.shtml.
>
>
> --------------------------------------------------------------------------
--
> http://www.sharechat.co.nz/          New Zealand's home for market
investors
> --------------------------------------------------------------------------
--
> To remove yourself from this list, please use the form at
> http://www.sharechat.co.nz/forum.shtml.
>


----------------------------------------------------------------------------
http://www.sharechat.co.nz/          New Zealand's home for market investors
----------------------------------------------------------------------------
To remove yourself from this list, please use the form at
http://www.sharechat.co.nz/forum.shtml.