Hi Steve Goodey here, Are you kidding me?
Did anyone else read this article lately? It was written by Richard Meadows and published on the Stuff website.
In my humble opinion it’s representative of the usual ‘property bashing’ that we’ve come to expect from some news sites’ contributors.
The Highlights from ‘Is your home a terrible investment?’ article on Stuff.co.nz
The first outstandingly inaccurate statement in the article is: “Property is completely illiquid”
Well I’m sorry to disappoint the author but PropertyTutors clients have completed property deals that required renovations in as little as 4 days and that included the time to sell. I know this is not usual as the national average median time to sell in New Zealand hovers around 35 days.
So property isn’t “illiquid” it’s just not a transactional asset.
Property is Highly Leveraged
Yes I agree with that one, this is why I love property.
The reason Banks won’t let you borrow $400,000 to buy half a million dollars worth of shares with your $100,000 deposit is largely obvious to most of us.
Well no of course not, it’s real estate, but having said that it won’t stop you from buying other investments like shares.
In fact once you have equity in your home you can buy some shares by borrowing against the house. Whereas you can’t do the reverse – borrow money against your shares to buy a house.
High Transaction Costs
Compared to what?
High Ongoing Costs
Well yes but once again compared to what?
If you don’t own your home you are renting, that can also be expensive and it’s dead money.
The beauty of the on-going costs of property is that if your spending money on your house its probably adding value to it as well.
Also you factor in the personal enjoyment received from owning the house and that being the owner allows you to improve it to your liking.
While this Author suggests other investments I understand he is a home owner……maybe even purchased as recently as January 2013. It this article therefore indicative of the “do as I say not as I do” modus operandi?