Olly Newland’s Column, June 2011

I HAVE IN SEVERAL PREVIOUS ARTICLES and columns predicted the rise in rentals, starting in Auckland and spreading like ripples in a pond throughout the country.

Having just been to Australia and with the benefit of my own investments there, I have always looked at the Aussie property market to pick trends at home. House prices in Aussie are sky high and $1million buys you little. Now rentals are moving as their market cools.

The natural disasters that have swept Australia have knocked The Lucky Country around. I predict before long the exodus of Kiwis will slow, stall and then reverse.

See The Age: Softening property market, new home sales slow

New Zealand With regard to the local market, it remains (as I predicted two years ago) more or less flat with very little new building coupled by little demand. Why is this? Why are new houses, especially modest new houses, so hard to build?

The answers are simple. Continue reading →

Olly Newland’s column March 2011

THE EVENTS OF THE PAST THREE YEARS (and especially the events of the past three weeks) have changed the economic environment to a new place for a long time to come.

The changes have meant severe financial stress for many, and it is now increasingly difficult to predict with ANY certainty the direction of the property market (or any market) so as to make rational decisions on the future.

The main ‘Game Changers’, in my view, are listed below. As more changes arise it will require a continuing nimbleness of mind and decision-making to keep ahead of the game.

In this article I will attempt to pull together a view of ‘Where To From Here?’ for the property and investment market and see if some order and sense of direction can be deduced from the realities that we now face.

Each ‘Game Changer’ as I see it is either positive or negative (sometimes neutral) for property investors when the medium and long term view is taken i.e. over the next one to three years. I have rated each one accordingly.

With some notable exceptions, most of the consequences have arisen from unfortunate events and tragic circumstances. No professional investor with an ounce of humanity should derive pleasure from that — but we are where we are. To pretend otherwise is to fudge the facts. Continue reading →

Olly Newland’s Column, February 2011

THE NEW YEAR has started with a bang (or shall we say a whimper? It depends on your viewpoint) when it comes to property and investment. A whole lot of new information has been released, some of which paints a confusing picture of what is happening in the market.
Some say that the market is about to nosedive (they have been saying that for over two years now), while others say there will be another boom sooner rather than later. I called ‘a flat market’ 2 years ago … and that has been more or less correct up until now.

But as the facts emerge and the reality on the ground is experienced, I think we have turned the corner. I am NOT predicting a boom in house prices. But I AM predicting a crisis in housing in general, and rents in particular. This being election year the “for and against” factions will dig in … so we should avoid taking extreme positions. Housing is a popular subject for politicians to fight over, especially when an election is close, we will likely see much more finger-pointing on the subject.

This is par for the course, but even so, there is a problem and it is getting worse. No amount of window dressing or political hot air will change the facts of the matter.

Nevertheless there are facts about the current market that cannot be overlooked. Continue reading →

Olly Newland’s Column, November 2010

Olly will be part of Empower Eduction's MARKET UPDATE evening, Auckland 7th December 2010. (This event has been held – ed.)

A FEW DAYS AGO Quotable Value (QV) came out with its monthly report and the headlines that followed were totally predictable:

“Property prices sliding” or “House values slip again” etc.

What a lot of rot.

Government-owned valuer Quotable Value (QV) has reported house values continued falling in October and are now down 1.6% from March.
QV said prices rose 2.8% between October 2009 and March 2010, but have since fallen. However, they remain 1.1% above October a year ago.
“The low level of sales activity we have seen all year continued through October, with sales well below both last year and the long term average,” said QV.co.nz Research Director, Jonno Ingerson.
“There is no sign of the traditional spring surge in sales, and we don’t expect any significant increase in sales before the New Year,” he said.

Full QV stats and commentary here.

If you read that carefully, the part that really matters is buried three lines down, and that is that prices are actually 1.1.% higher than they were a year ago. The error made by many is to look at monthly sales figures and grab the the most catchy headline … never mind the facts.

When analysing big ticket items such as house prices (which react very slowly one way or the other) it is the annual trend that must be watched, not the the day-to-day or monthly statistical wobbles. Look at this: Continue reading →

Olly Newland’s Column, October 2010

It’s October, and the property market has NOT fallen 30% as was predicted by some — nor even by the 15% as those doom merchants, in a vain attempt to remain credible, hastily corrected themselves.

Instead the median price bobs up and down within the margin of error and the market remains essentially flat- as was predicted by me long ago as February last year.

The economy, along with the housing market also remains flat under the weight of increased GST and costs, and the hopelessly ill-timed move by the Reserve Bank to increase interest rates some months ago.

Interest rates will remain low and possibly go even lower in the time ahead because we are not out of the woods just yet.

Massive problems in the USA and Europe, combined with bubble economies in China and Australia could rock the world’s economies in the next 12-18 months and this, to my mind, will be the forerunner of a tidal wave of hyper- inflation as countries print their way out of recession.

Indeed investors should be putting a little aside into other hard assets such as gold (as I predicted in “The Day the Bubble, Bursts”), silver, platinum, copper, antiques and art, or if you like whiskey, perfumes and jewellery.

When inflation hits it will already too late. Continue reading →

Olly Newland is a legend in property investing in New Zealand.

Olly Newland was born in Lower Hutt, grew up in Plimmerton, then Karori, Wellington and, as a teenager, in Auckland, New Zealand.

For more than a quarter of a century, Olly Newland has been sharing his hard-won insights, advice and warnings.
Through seminars, columns, and plain-talking, easy to follow, best-selling books, Olly has accurately foretold market changes. He’s alerted investors to arising opportunities, and
warned them of scams, traps and pitfalls. Never far from controversy, Olly has earned the acclaim and respect of generations of kiwi investors.
Continue reading →