The future’s so bright, I gotta wear shades!!
ByWell I just don’t know how much more good news for investors can be crammed in this week.
From the Government statistician today on building consents:
1,362 new dwellings including apartments were authorised. This is the lowest monthly number since January 2001.
What this means is that the number of new dwellings coming on stream is continuing to drop. This creates unbelievable “pent up demand” and means that there will be a chronic housing shortage as a result which will fuel construction and values. You wait, it’ll be huge.
From Phil Mcalister:
We have been researching the market for the lead article in next month’s issue of the NZ Property Investor magazine to get an up-to-date feel on where things are at.
My take on this is that the big gap between buyers and sellers is likely to suddenly close and maybe close quite quickly, leading to a spike in the number of sales.
The people who will be buying are property investors. The feedback we get is they are out there, attending auctions, checking out mortgagee sales and looking for buys.
Plus there is a huge amount of pre-approved finance just waiting to be drawn down.
They are coming to the conclusion that there is finance out there, vendors aren’t likely to move much lower and financing costs are starting to come down now the Reserve Bank has shaved 25 basis points off its official cash rate.
Adding to the excitement here is that the bank indicated it may cut the rate at each of its next six-weekly reviews this year – that mean cuts in September, October and December.
Then of course there is the prospect of spring just around the corner. Already I am hearing that banks may be more active with spring and summer home loan campaigns as they traditionally do – although they were almost absent last year. (The main exception being ASB with its win a home campaign).
In other words, if there was ever a time to be buying property, it is now.
You will be paying more now in interest than you will be in 3 months, so if the numbers work now take action. Your cash flow is only going to improve.
We have ongoing demand not being catered for due to no new building happening so your values are going to improve.
Prices are generally considered by agents and commentators to have bottomed out. As I have been saying for months we cannot continue to sell property for below replacement cost unless we have a declining population, which we do not.
Our balance of trade was way better than expected in spite of ridiculous oil prices.
And all of this is happening in the middle of winter, in election year with financial chaos all around us!!
So the only reason to not buy is …… ummmm …… well …… hang on …… I’m thinking ……well …… actually …… I can’t think of a good reason either.
Stay Safe ~ Dean Letfus from www.massiveaction.co.nz
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