In our offices or workplaces, everyone starts catching something. We dread the moment, but we know that we’ll inevitably get sick too. In housing, we’re seeing our peers starting to look a bit green.
They say it can’t be done, but here at Money Morning we attempt to broadly forecast what’s coming next for the economy.
Once you understand the underlying forces which drive the economy, you will have access to insight that few people ever attain.
It has less to do with the movement of central banks or the stock market. Or movements in interest rates, inflation, or some other mechanism.
It’s based on the real estate market.
What happens in the real estate market underlies the economic cycle. And the cycle simply continues to repeat.
Property Markets History
A man by the name of Homer Hoyt identified the repetition of this real estate cycle in a book written back in 1933, called ‘One Hundred Years of Land Values in Chicago.’
A study of history as Homer Hoyt did it, with a focus on land values, proved the economy moved in a very clear sequence of roughly 18 to 20 year cycles.
It’s directly related to land price and it repeats regardless of government policies and the type of government in power.
And nothing has changed since Homer Hoyt wrote the book in 1933. The real estate cycle simply keeps reaffirming itself.
The financial reforms initiated after the global financial crisis, have only guaranteed yet another real estate cycle, as that crisis was not financial in nature.
It was a land crisis
And whilst the underlying cause of the cycle is ignored, the real estate cycle must repeat.
Glancing in the window of the local Immobilier, I noticed several good-sized homes for sale on large plots from around €100,000. I started to think about our former life in Auckland and why it was…
‘You can’t time the market. Buy now.’ This is downright one of the WORST, most DANGEROUS pieces of advice one could utter.
Here in NZ, we lock people out of housing. We have the lowest rates of home ownership since just after the Second World War. And it’s starting to show.
As investors, you and I simply need to understand how and where to invest. Let’s look at some of the key trends set to impact on asset prices in 2019.
If I asked you what gold is used for, you’d probably say jewellery, right? Well, you’d be half right. Gold has lots of other uses.
This week, an alarming study was released describing just how close we are to NZ housing hitting the fan…
Despite the pleas of denial from the mainstream, we’re beginning to see that the NZ housing market isn’t as bulletproof as most folks thought…
For the first time in a decade, the Auckland property market is bleeding red. You shouldn’t be surprised…we’ve been predicting this outcome for at least six months now..
With the new ‘shared ownership’ plan, folks can come in with whatever deposit they have…and can get basically whatever house they want…
It shocked me when I first heard that some New Zealanders do this. It goes against every rule of investing — don’t put all your eggs in one basket…
Once upon a time, in a beautiful country…there was a shortage of homes. In stepped a benevolent authority figure. He reckoned he could sort this mess out. Here’s that country today…
Landlords will pass on the cost of letting to tenants via rent…or via some other fee. But a significant change has been made…one that throws a wrench in this argument.
Renters in Mount Maunganui are being kicked out of properties to make room for Airbnb guests. Here’s why the local council needs to stay out of it.