TelferYoung Limited
Where Are We At This Moment
3 April 2006
TelferYoung has a redesigned, interactive website and the media tells us the property market is in a state of uncertainty or is it?
 |
I have enjoyed a break over the last week camping beside the Waihaha River on the north-western side of Lake Taupo. This was with Mike Penrose, friends and family and focused on fishing. The planning for this break was the key to the trip. It concentrated on the moon phase to optimise the fishing and with no road access required a boat trip to the venue, accommodation (tents) and provisions for the full period. This planning absorbed the weather changes and resulted in total enjoyment with stunning results. Does that ring a bell with you? To me this trip was no different than real estate investment. They both require careful planning. As shown in the photo Mike Penrose Valuer, Property Advisor, fisherman 8lb rainbow.
The start of a new financial year for many businesses will no doubt be following an extremely busy 12 months which should have been a profitable time for all. The family home will have shown good growth through most of the country and investment properties should have recorded similar growth with increased rentals, sometimes compounded with lower investment returns. If your equity portfolio has not shown growth you are in the wrong stocks or have a poor financial advisor.
We are constantly bombarded with advice from a range of "experts" who rely on generic statistics to support their cause. But is this advice relevant to your own personal property portfolio. I doubt it. The economists are good at clearly identifying rise and falls in the dollar, economic growth, consumer sentiment, the trade deficit, exchange rate movements, productivity growth etc. etc. but does that really provide you with accurate information pertinent to your location? You cannot always accept general statistics provided by economists, Quotable Value, the multi national real estate firms and the media as being specific to your region. We can delve into those statistics and obtain general data but 90% of the time that information has been developed from statistics from Auckland, Wellington and Christchurch.
Every provincial city throughout New Zealand has a different set of localised economic drivers that contribute to the dynamics of their property market. Whangarei is completely different to Hamilton who are in turn different to New Plymouth, Napier, Nelson and so it goes on. Our TelferYoung personnel are concentrating on their key task of providing well researched market advice over the full range of property related matters. Over recent times the demand on these services has grown significantly which tells me we are providing a valuable contribution to the New Zealand economy (albeit on a small scale compared with many). Individually to our clients it can be the best advice.
There have been some strong words used by the media regarding our economy - recession, slump, consumer pessimism, but is it right? I read an article in The Economist back in 2003/2004 that predicted the global property bubble was about to burst. This article used historical statistics and predicted the global property market was overheated. It painted an extremely bleak picture for the future. They were wrong.
My point is you need to balance the views of others, understand the basis for their statistics and conclusions and be prepared to obtain local advice from experienced professionals. TelferYoung has 57 practising valuers with an average age of 44 years which amounts to a significant depth of experience and stability of your service advisor. We are not a volatile profession that sees high staff turnover and accordingly advice today should continue into the future.
Where are we at this moment? The positives outweigh the negatives, overall the property market is secure. If we consider the dropping exchange rate, predicted interest cuts, job stability, pressure on inflation, a strong commercial market and increased personal equity surely words like recession and slump are inappropriate. We have enjoyed a buoyant two years and I predict we will move into a more balanced market with mild fluctuations. Certain areas will continue to show growth fuelled by demand and other markets will decline due to diminished demand.
Here in Whangarei there are a number of significant positive indicators that indicate a stable market should prevail in the short to medium term. Our city is languishing behind similar provincial cities when we consider quality hotel accommodation minimal ownership apartments and a dedicated purpose designed modern retail shopping precinct. These negatives are great opportunities for major redevelopment. TelferYoung look forward to advising in the planning and implementation of future initiatives throughout New Zealand.
Steve Baker
3 April 2006
This monthly paper reflects the views of the writer and may not represent the views of all TelferYoung staff.