Wednesday, October 28, 2020

Mike Hosking: Too much commentary on housing ignores reality


Some folks we know retired last week.

They retired young. She will do a bit of work from their beach house which has become their main house due to the fact they sold their house in town for a lot of money, and as a result, they don’t have to work again.

Their story is the story of the New Zealand real estate dream.

They are well under 60, they bought the house they sold years ago for what seems like pocket change, did a few renos, made a killing. Got a pre-auction offer- 25 bids at the day of the auction itself – and sold it, got the cash and retired to the beach.

So Covid for them has allowed, one, her to be at the beach and do a bit of remote work if she wants, and two, seen the value of their home reach a point they could not be happier with.

It is the story of many New Zealanders, it is the story too many of the economists and worriers and overseas report writers have never understood.

Too much commentary on housing is based on what could go wrong. The bubbles, the prices, the LVRs, the access.

If there was an article written for every person who did well on housing vs every so called person who’s been locked out of the market we might restore a bit of the balance.

Even with record numbers of first home buyers in the market we are still inundated with tales of woe and disaster.

A bubble was bursting this year. A bubble was bursting in the GFC.

Once again, let’s bring reality into the equation; a bubble has never burst on New Zealand property.

In the worst of days it sinks maybe 5 to 10 %, in between it rises up to 100 %.

The people at the beach by the way are not high flyers. They’re not rich; they would not stand out in a crowd. They're simply another example of the thousands of New Zealanders who understand housing, like housing, see housing as their retirement, and ultimately have made their kiwi dream come true.

Mike Hosking is a New Zealand television and radio broadcaster. He currently hosts The Mike Hosking Breakfast show on NewstalkZB on weekday mornings.

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