The property market, what's happening? And should you buy property or should you invest in KiwiSaver or should you invest in the stock market S&P 500 or New Zealand share market? Lots of really good questions in there. Firstly, I'm not giving you financial advice in this area, I'm just giving you a few general observations, okay? So, a few things. When we look at real estate, real estate traditionally goes up in price, okay? So does the share market traditionally, okay? Nobody knows the future, but last time I checked, house prices are down.

In fact, if you look at house prices or property prices in New Zealand, we've had the biggest drop in 30 years, right? Why? Interest rates tripled, that's why. So since then, interest rates have gone up, were 7.25%, that's how much it was for a one-year fixed interest rate, and now down at four and a half. So interest rates have come down a lot, but the housing market hasn't moved, right? I wonder why? Confidence.

Nobody thinks it's a good investment because prices are down. Also, generally, I know people, New Zealand's been in recession, okay? And things have been more difficult, but if you look at the statistics, it shows that people's incomes are up a lot since COVID. I don't know the exact statistic, but I read an article the other day, it was about 25-30%.

So incomes are up a lot, interest rates are down a lot, population, despite what you read, has actually increased. Auckland population increases anyway. A lot of people from outside of New Zealand moved to Auckland.

Also, a lot of people from around New Zealand moved to Auckland as well. I know there's positives and negatives of that, but in reality is, New Zealand population has been growing, okay? Yep, the economy has been a little bit softer, and some people havefound other opportunities, but it's cyclical, and the same thing happens every 10 years. If you've been in the country for a long time, what's the statistic? The statistics are about 60% of those people come back, and when the economy turns, that will certainly reverse.

So population has been increasing anyway, but property prices haven't moved. What's going on there? I think it’s actually-potentially reasonable value at the moment. That's why so many first-time buyers are buying, because it's affordable.

I know it's not affordable, and affordable is a relatively relative term, but prices are at good levels, right? It's a good time. If you compare that to, say, the S&P 500 in the United States, I think it's about 70% increase in prices in the last five years, right? So Warren Buffett, the most famous investor of all time, says he wouldn't touch the S&P 500 the way it is, okay? And that's what a lot of top investors are saying. Why? Because prices are frothy, right? Prices are very, very high, okay? And nobody knows the future.

Nobody knows what's going to happen, and this is not investment advice, but when you compare the two prices, the other thing I'd compare it to would be Australia. Australia real estate prices have risen a lot, especially in recent years. Why? Because their economy has been relatively strong.

They've had strong population growth as well, but that can't last, right? Obviously, it naturally will come to an end. Australia's gone through a rate increase, another rate increase, and they've got at least another rate increase. Interest rates are much higher than New Zealand, okay? And that whole story is coming to an end.

Not that they're going to do badly, but just relatively, New Zealand's going to perform a lot better moving forward, okay? And that will translate into confidence in the housing market as well as confidence, but like, good prices generally don't last, especially in Auckland that operates like a capital city of Australia, okay? It's a nice place to live, so is New Zealand in general. It's a fabulous place to live, okay? And the economy will turn and perform a bit better moving forward. So that's my few tips on it.

Thanks so much for watching. If you'd like to have a review or chat to me personally, you certainly can. We've got a booking link in this presentation there.

Also, you can find us on our website where you can book a chat if you'd like to talk things through. Thanks so much for watching.

Matthew Dawe
Mortgage Broker | Financial Adviser‍
Phone: 027 321 4287‍
Email: mortgages@matthewdawe.com
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