Negative Grind

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I find it quite fascinating watching the media go berserk over property at the moment.
Having not been around the industry for as long as some this is the first time I have witnessed such a frenzy.

Given that NZ is such a small place I have to wonder how much impact they actually have on the market. The doom and gloom merchants all getting together in sack cloth and ashes can easily create a quite artificial situation for a while.

Sadly BlueChip falling apart at the same time doesn’t help. Bluechip is a genuine news story but it all gets lumped in as proof that Chicken Little was right.

The ultimate effect of all this feeding frenzy is likely to be more and more people losing more and more money as they take rash action to try and avoid Armageddon.

Oh for a more responsible media who would point out that whilst housing is certainly soft at the moment we need to understand the overall situation.

1. We have a chronic workforce shortage that is only getting worse. If we had better government we would be increasing immigration numbers now to alleviate this. We will have to increase immigration eventually and by not doing it now we will create an artificially big boom when we have to open the flood gates.

2. The reserve banks behaviour with interest rates has proven to be as bad as everybody told them it would be and as a result there is a strong likelihood of rates easing sooner rather than later, this will cause housing to recover.

3. Because property is a cycle the fact that we are coming into what may or may not be a slump means that a boom is coming next, so people need to plan to cope through the slump knowing their property will still double in value every ten years.

4. New Zealand remains a great place to live and as soon as we get better government we should also see us competing better with Australia for immigrants through better tax incentives and pro active business attraction.

In other words a responsible media would be saying “Don’t panic”

Gotta go, just saw a pig fly past my window

Stay Safe Dean Letfus @ www.massiveaction.co.nz (AKA Dean Leftus @ www.massiveaction.co.nz)

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