House Prices

Selling to beat slump is a mug's game

Q. You mentioned in last weekend's Herald a friend who is thinking of selling her house and renting, in anticipation of a decline in the house market. I have seen this idea come around the track several times but have never heard of anyone who succeeded at it.

Monday, July 04th 2005

If it were such a good idea, you would think there would be plenty of people who could say, "It worked. I sold my house, invested the proceeds and rented a comparable house. After two years, I cashed up and bought a comparable house for 20 per cent less than I sold the old one.

"After deducting rent from investment earnings and factoring in agents' commission, legal costs, house moving and an allowance for my time, I'm $80,000 better off than I would otherwise have been."

I've never heard anyone tell that story. Have you? If there are no success stories, should the idea be enshrined in the Hall of Financial Myths?

A. Probably. First, let's set the record straight. My friend is planning to sell her house and rent, and may never buy again. She's not trying to time the market.

If she were, though, I would be rather worried. I can think of four reasons most people don't, or shouldn't, try it:

* The hassle of selling, moving, buying and moving again.

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Heartland Bank - Online 6.69
SBS FirstHome Combo 6.74
Wairarapa Building Society 6.95
Unity 6.99
Co-operative Bank - First Home Special 7.04
ICBC 7.05
China Construction Bank 7.09
BNZ - Classic 7.24
ASB Bank 7.24
ANZ Special 7.24
TSB Special 7.24
Unity First Home Buyer special 6.45
Heartland Bank - Online 6.45
TSB Special 6.75
Westpac Special 6.75
China Construction Bank 6.75
ASB Bank 6.75
ICBC 6.75
AIA - Go Home Loans 6.75
Kiwibank Special 6.79
Co-operative Bank - Owner Occ 6.79
ANZ Special 6.79
ASB Bank 6.39
Westpac Special 6.39
AIA - Go Home Loans 6.39
China Construction Bank 6.40
ICBC 6.49
SBS Bank Special 6.55
Kiwibank Special 6.55
BNZ - Classic 6.55
Co-operative Bank - Owner Occ 6.55
TSB Special 6.59
Kainga Ora 6.99
SBS FirstHome Combo 6.19
AIA - Back My Build 6.19
ANZ Blueprint to Build 7.39
Credit Union Auckland 7.70
ICBC 7.85
Heartland Bank - Online 7.99
Pepper Money Essential 8.29
Co-operative Bank - Owner Occ 8.40
Co-operative Bank - Standard 8.40
First Credit Union Standard 8.50
Kiwibank 8.50

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