We are urged this way once every few years.
It's based, not unreasonably, on the idea that we could take our money and make it work differently, if not more productively, than it does stuck in a house.
The latest iteration comes from a bloke at Craigs Investment Partners, who suggests if you put $100 into a house, in 30 years it's worth $600. But if you had done it with shares, it would be worth $1,100.
Not just that, but the country would be better off. Those dollars would have been out and about investing in stuff, growing stuff, creating jobs, opening markets, and making the world a better place.
That may well be true.
Trouble is, that’s a long-term view and most of us don’t have long term views.
The view most of us have is: what's happened to New Zealand shares so far this year? Answer: they have gone backwards. In the year to date they are down 1.4%.
Mind you, housing is hardly booming.
And if you want a glass half full, shares in New Zealand in the last five years are up almost 10%. Houses are most certainly not up 10% in the past 5 years.
It may change with the time. One child of ours started buying shares while at university. They are of the generation that believes they will never own a house.
That’s not true of course – they will, but they also have a portfolio.
But the perception could be the key. If housing is perceived to be unobtainable, what is obtainable? Maybe shares.
But credibility is also an issue. Shares can be blue chip or meme-type stock. You can invest, or you can punt.
Stock can be priced to perfection, or it can be solid as a rock. You can be in Fisher and Paykel Healthcare when Covid arrives, or Air New Zealand when Covid arrives.
It requires a lot, whereas a house is a roof and shelter and a thing you can show your mates and have a BBQ at.
Houses are easy and they hardly ever lose you money over time.
To get people to shift, especially when it comes to money, the pitch has to be compelling.
In an uncertain, crazy world, is a stock market compelling?
Mike Hosking is a New Zealand television and radio broadcaster. He currently hosts The Mike Hosking Breakfast show on NewstalkZB on weekday mornings - where this article was sourced.
Not just that, but the country would be better off. Those dollars would have been out and about investing in stuff, growing stuff, creating jobs, opening markets, and making the world a better place.
That may well be true.
Trouble is, that’s a long-term view and most of us don’t have long term views.
The view most of us have is: what's happened to New Zealand shares so far this year? Answer: they have gone backwards. In the year to date they are down 1.4%.
Mind you, housing is hardly booming.
And if you want a glass half full, shares in New Zealand in the last five years are up almost 10%. Houses are most certainly not up 10% in the past 5 years.
It may change with the time. One child of ours started buying shares while at university. They are of the generation that believes they will never own a house.
That’s not true of course – they will, but they also have a portfolio.
But the perception could be the key. If housing is perceived to be unobtainable, what is obtainable? Maybe shares.
But credibility is also an issue. Shares can be blue chip or meme-type stock. You can invest, or you can punt.
Stock can be priced to perfection, or it can be solid as a rock. You can be in Fisher and Paykel Healthcare when Covid arrives, or Air New Zealand when Covid arrives.
It requires a lot, whereas a house is a roof and shelter and a thing you can show your mates and have a BBQ at.
Houses are easy and they hardly ever lose you money over time.
To get people to shift, especially when it comes to money, the pitch has to be compelling.
In an uncertain, crazy world, is a stock market compelling?
Mike Hosking is a New Zealand television and radio broadcaster. He currently hosts The Mike Hosking Breakfast show on NewstalkZB on weekday mornings - where this article was sourced.
9 comments:
Yes, shares out perform real estate in the long run. But one basic housing issue: how to end all the crappy housing? Tens of thousands of old houses need to be renovated to bring them up to First World standards. Chucking up some ceiling insulation and adding a heat pump is not the answer. Nobody in NZ has an answer to the crappy housing problem, and Councils, instead of incentivizing rebuilds, make it very difficult.
"You will own nothing and you will be happy".... seems to be happening.
We like property too because the tax rules surrounding it are clear and simple for the most part. Funds, stocks and crypto are overtaxed and overregulated. NZers are simply responding to incentives. Once again, behind the mask of ‘property investor’ is a meddlesome and intrusive government. Which we vote for. Crazy circle.
Security of tenure needs to be the focus. If you can, do it.
We prefer property because we can do what we like with it, other than the demands by Maori to control it and extract fees.
All statements by interested parties are very dubious. Many of my colleagues had extensive shares in 1986... The world is awash with money chasing shares. Obviously, from the gold price, many able thinkers consider shares and money at huge risk. There is very little political resistance to inflation policies Argentina is likely for us all. Property in growing places is remarkably safe. It only falls with population as in Japan but our indigenous and several imported peoples are ensuring this does not occur here. Ownership of rented out property is a pain under present pedantic rules, and with no strong protections for landlords, but if the obvious booms are recognised, is probably safest of all except gold. Gold ownership by amateurs is fraught.
Anon 6.36. It is the great reduction of crappy housing which has led to many current problems. Lobby groups determine the path of development. Many older houses, garages, sleepouts were small and easily heated. Thousands of properties no longer qualify for letting. Owners of dwellings without the liability of insulation, heat pumps etc had less at stake so were not so selective of occupants. Many generations lived in satisfactorily. Much of the problem today with children is inattention to warm and to wet weather clothing. Fashion, not wishing to appear different from the car travellers, risk of theft at school, overweight parents who do not realise that children feel the cold etc, determine clothing and contribute significantly to child health problems.
If only I had invested in Fletcher Building ten years ago, I could have successfully halved my investment.
The management of our big companies doesn't exactly engender much excitement for giving them my money to play with.
My point to Robert Arthur is that policymakers need to incentivize homeowners to fix up crappy houses to improve the housing stock. All renovation costs should be tax deductible, for example. I fear that in 100 years there will still be houses with no wall insulation, vintage wiring, etc. Right now anyone tring to renovate houses faces Councils determined to nitpick everything, regardless of risk, and find ways to squeeze every dollar out of renovators. Councils don't want to put anything in writing, so that they can change their minds....and assume no liability. Ratepayers also would like to check their math!
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