Time to bail out of housing: economist
While the housing market remains strong and house prices should rise a bit further, the latest immigration numbers suggest now is the time to bail out, according to Bank of New Zealand chief economist Tony Alexander.
Monday, February 9th 2004, 8:22AM
by Jenny Ruth
The figures showed a net gain of 1,500 people in December which Alexander says is below the average December gain for the last 10 years of 1,718.
"Extrapolate that result for the year and you get a net gain of 11,000 people versus the 34,909 gained over 2003 and 38,200 gained over 2002," he says.
What’s worse, the rate of turn in the figures is accelerating "so one cannot rule out no net gain this year and a loss of people over 2005, especially with the world economy looking strong."
"If you are a strong believer in migration affecting house prices, then bail out now because things are turning bad."
In particular, Alexander recommends that cash-strapped first home buyers sit things out until 2005.
"You don’t have experience of the extra costs which owning a property will bring and the debt trap you’ll risk getting yourself in if you take advantage of retailer credit deals to furnish your house."
He warns investors that the big dollars have already been made in this housing cycle. "The wise have been unloading rubbish properties for the past six months and will be looking to add properties to their well-managed portfolios come the next bottoming in the market in late-2005 through 2006."
| « Weekly rate update | Deposit Power to power up » |
Special Offers
Commenting is closed
|
|
Printable version |
|
Email to a friend |
