INTERVIEW: Property investor, author and consultant Olly Newland explains in this interview with Bernard Hickey of interest.co.nz why he prefers retail commercial property. He details how leases with shop owners can be renegotiated and how ‘ugly duckling’ buildings can be turned around. He also talks about how higher unemployment creates demand for retail spaces …
Olly Newland’s July 2010 column
In this column, I would like to cover a variety of topics, as the last few weeks have been crammed with ‘news’ and opinions about the property market — and much of it arrant, dangerous nonsense.
Some folk in the news media and posters on various websites have had a field day predicting the imminent collapse of the property market. They continue to be spectacularly wrong, it should be noted.
These deluded commentators seem to believe that if property prices fell by 20% to 30% (as some have predicted) then they, and their children would be able to buy a house more cheaply in the future and that would be a wonderful thing. They think a massive drop in the market would make housing ‘more affordable’.
What they cannot understand is if that really happened hundreds of thousands of Kiwis would be out of work, much of our economy and industry would come to a virtual halt, the banks would collapse and New Zealand would be reduced to a nation of ragged beggars left to shuffle through the two dollar shops and rifle garbage bins.
Jobless and with an economy in ruins it wouldn’t matter if houses were a third of their present price. They would still be unaffordable.
It will cause some consternation to these nay-sayers to learn this week, that house prices are still well up on this time last year despite the usual upside down view some in the media always make of these things.
link: http://nz.biz.yahoo.com/100711/3/k6u6.html
I always derive much amusement in the way the media portray good news through the wrong end of the telescope. The headline in this example says: “House prices fall further in June”.
It’s not until you read down further that in fact house prices are still 5.2% higher than at this time last year and the slippage (if you can call it that) is a statistically insignificant 0.4%. Put another way, it is effectively a yearly increase on the current average price of $404,715 by a respectable $21,045 (or approximately twice the rate of inflation!)
