Hang in there, Landlords
Monday 6 September 2004
The message is loud and clear for people who have bought rental properties in the last few years. Batten down the hatches! Ride out the storm!
By The Landlord
I'm not saying most rental investments will turn out to be bad. The long-term trends in property prices have always been upwards, and I haven't heard anyone predicting that will change.In the next few years, though, many rental properties are going to look disappointing. And whenever that happens to any type of investment, the foolish bail out.
They bought high, and they end up selling low - a strategy that will never make them rich.
It happened to many investors in New Zealand shares after the 1987 Crash. And it happened a couple of years ago to investors in international shares or funds holding those shares. They couldn't cope with big falls. They lost heart.
But wait, you might be saying, house prices don't fall nearly as far as shares.
True. But there's a fundamental difference between shares and rental property. These days, very few people borrow to invest in shares; almost everyone borrows to invest in rentals.
Read More - Opens in a new window
Commenting is closed
Property News
ComCom warning for property trader
A property trader, who has attracted unfavourable media attention in recent years, has received a formal warning from the Commerce Commission.
House Prices
No stopping Capital price rises
There’s no sign of a slow-down in Wellington’s property prices with Trade Me Property’s latest data showing that asking prices continue to rise solidly.
Commercial
Demand challenges for commercial sector
Vacancy rates in the commercial property sector are set to increase as changing economic conditions dampen demand.
Mortgages
LVR loosening likely - ANZ
LVR restrictions were never meant to be a permanent feature of New Zealand’s housing market and ANZ economists argue that some further relaxing of them could soon be on the cards.
