Today I want to talk to you about a question I’ve been getting asked a lot lately as a property coach:
“What do I think is going to happen in the NZ market?
Well, here is what my experience tells me. For starters, it’s not really all about experience. I just look at history and that gives me a lot of insight.
There have been plenty of other large global disruptions in the past and each one of them gives us something to refer back to. Because the same patterns and responses tend to play out time and time again.
First, there will be a market correction. We’ve already seen that in stocks and maybe even your Kiwisaver, with prices fluctuating up and down. This is normal for the stock market, but we’re seeing even bigger swings and have always seen this happen in the past.
But even if there are a few bumps along the way, real estate tends to stay relatively stable. The reason why is that it’s such a fundamental requirement. Our need for housing is not going to change any time soon.
Next is a stimulus response to bolster the economy, so we’re seeing this happen as the government aims to get things moving in a variety of ways.
People who know how to make the most of those opportunities are out there right now.
They’re looking at the long term curves, and we know that over a 5, 7 or 10 year period, those curves will always trend upwards.
Remember – there has never been a period in modern economics where we have seen a downturn that we have not recovered from.
If we had we would still be there. In fact we are just coming off the back of a 10 year period of “bull run” increase in values and a strong economy. This was on the back of the last lot of economic stimulus following the GFC.
Then, once the markets are recovering, the net effect of that stimulus in the long term tends to drive everything higher yet again for a couple of reasons. The decrease in interest rates that we’ve seen already means our ability to acquire property is boosted. Then there is a knock-on effect as the increased ability to acquire means property values rise as part of supply versus demand.
The final result we’ll see is that values will inflate as more stimuli is pumped into the economy. Then in turn property the values will increase with it as everyone can afford more.
So, over time we’re likely to see values for carefully purchased properties increase in line with natural market correction and progression.
This is a great thing for those who are ready to pursue those opportunities now – before everyone else catches up.
I’ll be presenting a webinar this coming Wednesday night where I’ll be covering how to get started with property as well as expanding more on making the most of these market conditions.
This is the best chance to get started with property, the right way, with plenty of free information on offer.
See you there!
– Michael Anger
Property Coach and Investment Mentor
Reserve your FREE seat here – Property Investment Seminars