Real-Estate

Crystal Ball: House prices to stabilize? Economic inequality to increase?

Fergus YoungLeave a comment

High level hunch is that house prices are likely to stabilize and may even go back up a little across the country. That said, my emotional desire is for them to (continue) to fall because frankly house prices I feel are still ridiculous.

Sensing there is still a lot of FOMO (Despite recent price reductions) along with excess liquidity in the system and a lot of people “waiting”. This “system” seem to have an insane fascination of rewarding property investment instead of those investing in productive enterprise / endeavors (including paid employment) and I state this as being a Landlord myself.

Without wanting to sound conspiratorial, I will admit to having some personal concern we are perhaps sliding into some sort of neo-feudalism longer term as wealth inequality continues to accelerate unabated and unchallenged by the ordinary working class.

Will further admit that I’ve lost faith that I can single-handedly stop or meaningfully influence (by rallying up the populous or otherwise) this turn of events. In the meantime all I can do is continue to air my concerns to those with a modicum of power in a vain attempt to see change.

Addendum 6th August 2023: Across the ditch in Reddit Land in the Australian Sub-reddit, There has been increasing amount of discussion regarding the effects of economic inequality where people, especially younger people are losing their respect towards the ‘system’.

“For a lot of people, even if you work hard, live modestly, and try to be a good citizen, you’re seeing your purchasing power go down steadily over time due to inflation and stagnant wages, you can’t afford to go to the dentist, and you will never qualify for a mortgage on a house within reasonable traveling distance from your job in Syd/Melb/Bris.

I’m honestly surprised there aren’t people throwing rocks in the street.”

– MortalWombat1974

Crystal Ball: House prices to stabilize? Economic inequality to increase?

Property Manager Turnover?

Fergus YoungLeave a comment

More of a shower thought question, but how often do Property Managers at any given agency usually turn over? The particular rental I have managed on my behalf down in Rolleston has had it’s assigned property manager changed out like clock work every ~6 months due to resignations.

This can present challenges to both myself and tenants if the point of contact is constantly changing. It also means that I have to “fill-in” the incoming property manager each time about any given property and it can be difficult as a landlord to build a business relationship with the agency.

—

Update 27 June 2023: I have written to the Business Owner and she has agreed to put management of the property under herself directly.

Property Manager Turnover?

Warning regarding “3M Command” type hanging hooks

Fergus YoungLeave a comment

Please be aware the use of M3 Command or similar picture hooks can still cause damage to walls when one attempts to take them off. Had a case where a tenant (who has otherwise been excellent) while vacating a property tried to remove one of the hooks and ended up taking some paint with it. The property manager got their nominated handy man in to address it but saw in the property owner’s transaction statement I received later in the month that the cost of repair came to almost $300 (from looking at a copy of the Tradie’s invoice). Whether the charge is reasonable or not, I wouldn’t know as I’m not a tradie.

I now learn that other property owners on various private forums have suggested to their tenants to avoid the use of 3M Command type hooks as they can ultimately cause more damage than regular Picture Hanging hooks if they aren’t removed “correctly” which by itself seems rather subjective.

If you do a search for reviews regarding 3M Command hooks, it appears there’s a few repeating anecdotes suggesting that they may not be all they are cracked up to be so if you do choose to still use them for hanging stuff around the house (be it for your own home or a rental), do so with due care and awareness that the risk of damage is still present.

Warning regarding “3M Command” type hanging hooks

Unusual Economics

Fergus YoungLeave a comment

The original bull trap assessment is well and truly dead I believe. If a down leg as part of a great depression type scenario were to have happened, it should have occurred by July and no later than the middle August. Coming to the view that COVID-19 was a mere interruption to the previously assessed larger trend.

The financial markets from many accounts appear to mostly now be sentiment (emotionally) driven and would not be at all surprised to see Asset prices continue to drive higher as a result of the FOMO affect (before possibly abruptly pulling back), helped along by Federal Reserve support and other interventionist (as opposed to classic free market) policies.

The ‘Efficient Market’ disciples can argue blue in the face that the markets are forward looking and the market is factoring in that things will drive back to normal before we know it, but this argument simply isn’t stacking up for me… at all.

I see a forming Technology bubble, driven by the likes of TSLA whose prices are being driven far beyond what facts, fundamentals and underlying data could ever justify.

While this certainly seems like a classic bubble with the usual tell tale signs including Taxi drivers talking about their gains in Property + stocks, and phases such as ‘Permanently high plateau’ + ‘This is a new paradigm!’ being banded about (i.e this time being “Modern Monetary Theory”), these bubble signs and anecdotes have been going on for an extraordinary long time, considerably longer than what would have normally occurred in a text book bubble. In fact, I’d go as far as to say that I feel the last secular bull run from 2009 to today is highly unusual.

Nothing can be said for certain as all I can see is that much of the information coming out to date is simply too poor to base any meaningful longer term decision making off of (have long held the view that Economics as a discipline is in disrepute), and that the markets in my view have most certainly been interfered with.

—

Current personal investment focus is towards NZ Farm Land where prices on average have not shifted a huge amount over the last decade (See Farm land price Graph at interest.co.nz and REINZ Rural + Lifestyle property data). How one might be able to partake in this may be through funds such as the Booster Private Land and Property Fund, however, the types of properties they appear to cover are rather limited. In regards to other investment related thoughts… Continue reading “Unusual Economics” →

Unusual Economics