Homes as investments

The Investor 23 May 2006

May 23, 2006
The Investor

Property backers underplay risk. Property backers seem to go in for hyperbole. Two examples from readers’ letters: “Shares are not and have never been as lucrative as property…. We now know why the richest people in the world and in NZ are property investors.”; “The average person can quietly work themselves into a residential property portfolio worth several million dollars with a decade or two of judicious acquisitions…. People putting a portion of their income aside to buy into share funds are left in the dust.”

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The Investor 9 May 2006

May 9, 2006
The Investor

Index distortion not what it seems. A reader’s point about the ongoing shares v houses debate sounds fair enough. “Your comparisons do not compare like with like,” he writes, “because you are using an index for shares, which only covers some companies, whereas for housing, you are using the average over all houses.”

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The Investor 25 April 2006

April 25, 2006
The Investor

Shares easier than reader thinks. It’s like a red rag to a bull. A paragraph in a reader’s email started, “Without getting into the share v property argument…” But why not get into it? After all, it’s at the very heart of most New Zealanders’ thinking about long-term investment. The reader, a mortgage broker, goes on to say, “I believe it is good for people to have a dabble in shares with spare cash but use property as their main retirement plan, even if they go hard out paying off just one rental property.

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The Investor 17 January 2006

January 17, 2006
The Investor

Readers rally to back houses. It always happens. Whenever I write about investing in houses and shares in the same column, people say I’m unfairly negative about houses. In my final column last year, I wrote that the rise in house prices over the previous year was slower than the rise in: New Zealand shares, hedged overseas shares and unhedged overseas shares, all including dividends. That surprised me, and I thought it might surprise you.

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The Investor 13 December 2005

December 13, 2005
The Investor

Can’t see the forest for the houses?Also: Christmas shopping. Quick question: Which of the following grew fastest in the last year: New Zealand house prices, New Zealand shares, hedged overseas shares (hedging removes the effects of foreign exchange movements), or unhedged overseas shares? Surprise, surprise, it wasn’t house prices. Bigger surprise still: house prices came last.

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