It’s another slow patch for the property market, with some who bought in the post-Covid boom now tossing up their options.
Cotality's latest data shows property sales down 2.4% in March, compared to the same time last year – the third consecutive month to fall.
Property investment coach Steve Goodey says they’re seeing a large number of people struggling with whether to swallow a paper loss or rent out the property.
He told Kerre Woodham when it comes to waiting it out, people don’t necessarily do the numbers and account for how long that may take.
Goodey says someone could be losing $200 a week in cash and be down $200,000 in equity, and recovery may take quite a few years.
LISTEN ABOVE
See omnystudio.com/listener for privacy information.
Listen
Watch
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:06):
You're listening to the carry Wood and Morning's podcast from
News Talks.
Speaker 2 (00:10):
He'd be It's been another slow patch for the property market,
with some who bought in the post COVID boom now
wondering what on earth they should do. Cotality's latest dat
shows property sales down two point four percent in March
compared to the same time last year. That's the third
consecutive months to see a drop. Property investment coach Steve
(00:32):
Goody is seeing a large number of people who are
facing tough questions. Do they sell and swallow a loss
that so far is on paper, or do they rent
it out and hold on wait for better times. Steve
Goodie joins me now in a very good morning to you.
Speaker 3 (00:49):
Good morning, thanks having me on again.
Speaker 2 (00:50):
That's okay now, always nice to talk. Who are these
people who brought in the post COVID boom, Because I
would have thought a canny property investor would think, Holy heck,
you have got to be getting me. I'm not buying now.
Speaker 3 (01:05):
It was a very obvious bubble, let's be fair, But
we were in a political situation at the time with
assern Labor government that said tax deductibility was going to
be removed and so buying a new build, which seemed
very solid in the housing boom. It was the logical
move at the time for some. For some yeah sah.
Speaker 2 (01:28):
Yeah, because a lot of people told me they were
going to sell. These were the mom and dad investors
were going to sell after the Adourned government removed the
tax deductibility for landlords. I didn't think they would. I
thought that hold on because their house would appreciate. I
thought house prices would keep going up. But they did.
That's in fact, then the numbers proved that that's exactly
(01:49):
what they did. They did sell and got out and
said no, thank you.
Speaker 3 (01:54):
True and let's be fair. You know, renting a property
in housing in New Zealand is definitely a user paid system.
And we saw a lot of stuff during the Asdern
government where they didn't tweak anything, they just flipped the
switched really very hard. And I think this is a
hangover with that we're having from that. And I totally
feel that a lot of your listeners are probably going
(02:14):
to go, you know, crime a river property investor has
hard time, but well, but it's a follow on thing.
It's tenants that pay the rent that property investors need
to get and you know, there's a lot of people
just that the market has turned on them pretty brutally.
Speaker 2 (02:35):
Yeah. But also at the same time, when you get
the mum and dad investors getting out of the property market,
quite often they had very personal relationships with their tenants.
They'd keep the rent down because that was a good tenant.
It was a really quid pro quo relationship that worked well.
Once they were gone, you know, it meant it was
a pretty harsh to rain for the renters as well.
Speaker 3 (02:59):
Yeah, And I mean the market's the property market. And
what we find obviously is that quite a lot of
tenants think that landlord multi millionaires in all cases. But
the majority of landlords have won or two properties, or
indeed accidental landlords, they've ended up, they've inherited somebody else's issue.
And that's the reality of landlording and New Zealand at
(03:20):
the moment. But if you bought in twenty or twenty
one and bought, let's be feared like a fairly compact townhouse,
and that's now gone down, as totality said in the article,
went down something around twenty percent. You might have a
property that fifty or sixty thousand dollars upside down, and
that doesn't count to the fact that you've also paid
a deposit. So the reality of trying to get out
(03:42):
of that is maybe threefold. Either tear that band aid
off and start the recovery right now, rent it out
and wait. But I don't think people really do the
numbers and accounts for how long that might take, because
you might be losing two hundred dollars a week in
cash flow, you might be down two hundred thousand dollars
in equity, and the recovery might take quite a few years,
(04:06):
and then that recovery has to be made up for
in tax paid dollars as well. So it could be
some some pretty hard choices being made.
Speaker 2 (04:16):
If anybody thinks that they're going to get the money
they paid back in twenty twenty one twenty two, they're
probably dreaming. I mean, we had to buy then because
we needed a place to live as a family, and
I knew even then. I'm like, oh no, this is
really going to hurt. It's going to we're paying more
(04:36):
than we have to, but we need a place to live.
You could even find anywhere to rent.
Speaker 1 (04:40):
Then, yep.
Speaker 3 (04:41):
Absolutely, And people will get back the money they paid
in twenty twenty one, but it might take a decade
and the cost of that has lost opportunity value as well. Yeah,
because if you do pull that band aid off and
face that loss today, it's equity and you don't realize
the loss until you actually make the sale. Don't get
(05:03):
me wrong, but it starts you having the ability to
do something better straight away, because you know the real
truth is, if you're selling and taking a loss right now,
you might be able to buy back into the same
market and get a better quality property or a better
return or yield, or a bigger discount right now, because
real estate in this country at the moment is on sale.
Speaker 2 (05:23):
For the use of the better word, how many people
do you see who are making decisions based on emotion
like they don't want to be they want to get
back what they're sunk funds, and even though the writing
is on the wall that they simply can't afford to
with every like insurances are going up, rates are going
(05:45):
up on paper, they simply can't afford it, but they're
not willing to let go because then they've lost.
Speaker 3 (05:51):
I think that's a rhetorical question you're asking me how
many people in New Zealand are stubborn. I'd have to
emotionally say all of them. You know, facing a loss
like that is can financially hurt a lot. It can
ruin some people, but it's embarrassing as well. And I
think the first port of call is, in reality, speak
(06:14):
to your mortgage broker. There absolute specialists at helping people
make things financially better when it comes to house purchases.
There's vehicles within the banks that can help and assist
as well. I've seen people taking two three bedroom townhouses
that were massively cash were negative and costing a lot
of money and putting them into the Airbnb pull and
(06:36):
being able to improve it that way, or just taking
them interest only using a different vehicle, right.
Speaker 2 (06:41):
I mean, it's got to be good news for renters
given that rents are falling and they can, you know,
probably have more choice now when it comes to renting.
Speaker 3 (06:52):
Yeah, to a degree, but I mean, let's be fair,
rents have fallen. I live in Wellington and a lot
of the rents here have gone down to one hundred
dollars a week, but the cost of living has gone
up by that at the very least as well, and
when we're in a very unsure period in the market place.
So if you're thinking about a property investment at the moment,
you're also thinking about oil and diesel and straight up
hamose and elections coming up, in interest rates in the
(07:14):
ocr and there's just more excuses to not do something
at the moment in the property market than there is
to do something. But having said that, it's not a
universal issue. What I think. What I mean by that
is real estate on coto Zid and tragedy had I
think fifty eight to fifty nine thousand listings a couple
of months ago, and now they're down to forty nine thousand.
(07:34):
We are clearing through quite a backlog. People are buying
things that are you know, have equity built into them,
that are cash flow positives. Because we're at the bottom
of the market, we're covering slowly, slowly.
Speaker 2 (07:45):
Well, I mean that's the first home buyers have jumped in,
especially in Wellington, what was it, thirty seven percent of
house sales were first home buyers who thought, right, it's
never going to get lower.
Speaker 3 (07:55):
Than less I'm in exactly. And there's a build up
of that as well when you think about it, because
during a boom period in real estate, those first home
buyers sit on the sidelines and go it's all too
hardened to expenses that they're living in a mother and
dad's spare room, and that gets very old, very quickly,
and so they never stop thinking, I want to buy
my house. They just wait, and when the property markets
(08:16):
like it is now, they do exactly what the right
thing is. They buy in. And then as soon as
they buy a house they want to see some inflation
and they start looking very carefully at who they vote
for during an election.
Speaker 2 (08:27):
Yet, so your advice just the key points again. If
you're struggling to keep up with the payments on a
house board at the peak, what would you recommend people
go and see their bank manager in the first instance,
or a financial advisor.
Speaker 3 (08:43):
Financial advisor, mortgage broker, and then bank probably in that order.
There are a lot of different options. You can do
the tear the band aid offs at one and actually
sell it, you know, solidify the loss and then start
financially recovering from a bottom of the market. You can
hide your head in the sand and do nothing and
see if it gets worse, and it might do and
it or it might take many many years for it
(09:05):
to improve. Well, you can just work on it and
prove on it. I've actually got a lot of people
at the moment who are buying at the bottom of
the market to find something cash flow positive to protect
themselves from the negative one they've got so they get
back to zero again as well. There's a few different
options that most people don't think of. What most people do,
They get Stubb and they bury their head in the ground.
(09:26):
They ignore the situation till it's worth and that's possibly
the wrong thing to do.
Speaker 2 (09:29):
Yeah, definitely the wrong thing to do, Steve. Thank you
so much, Steve got Ey, Property Coach.
Speaker 1 (09:34):
For more from carry Wood and Mornings, listen live to
news talks that'd be from nine am weekdays, or follow
the podcast on iHeartRadio.
You're listening to the carry Wood and Morning's podcast from
News Talks.
Speaker 2 (00:10):
He'd be It's been another slow patch for the property market,
with some who bought in the post COVID boom now
wondering what on earth they should do. Cotality's latest dat
shows property sales down two point four percent in March
compared to the same time last year. That's the third
consecutive months to see a drop. Property investment coach Steve
(00:32):
Goody is seeing a large number of people who are
facing tough questions. Do they sell and swallow a loss
that so far is on paper, or do they rent
it out and hold on wait for better times. Steve
Goodie joins me now in a very good morning to you.
Speaker 3 (00:49):
Good morning, thanks having me on again.
Speaker 2 (00:50):
That's okay now, always nice to talk. Who are these
people who brought in the post COVID boom, Because I
would have thought a canny property investor would think, Holy heck,
you have got to be getting me. I'm not buying now.
Speaker 3 (01:05):
It was a very obvious bubble, let's be fair, But
we were in a political situation at the time with
assern Labor government that said tax deductibility was going to
be removed and so buying a new build, which seemed
very solid in the housing boom. It was the logical
move at the time for some. For some yeah sah.
Speaker 2 (01:28):
Yeah, because a lot of people told me they were
going to sell. These were the mom and dad investors
were going to sell after the Adourned government removed the
tax deductibility for landlords. I didn't think they would. I
thought that hold on because their house would appreciate. I
thought house prices would keep going up. But they did.
That's in fact, then the numbers proved that that's exactly
(01:49):
what they did. They did sell and got out and
said no, thank you.
Speaker 3 (01:54):
True and let's be fair. You know, renting a property
in housing in New Zealand is definitely a user paid system.
And we saw a lot of stuff during the Asdern
government where they didn't tweak anything, they just flipped the
switched really very hard. And I think this is a
hangover with that we're having from that. And I totally
feel that a lot of your listeners are probably going
(02:14):
to go, you know, crime a river property investor has
hard time, but well, but it's a follow on thing.
It's tenants that pay the rent that property investors need
to get and you know, there's a lot of people
just that the market has turned on them pretty brutally.
Speaker 2 (02:35):
Yeah. But also at the same time, when you get
the mum and dad investors getting out of the property market,
quite often they had very personal relationships with their tenants.
They'd keep the rent down because that was a good tenant.
It was a really quid pro quo relationship that worked well.
Once they were gone, you know, it meant it was
a pretty harsh to rain for the renters as well.
Speaker 3 (02:59):
Yeah, And I mean the market's the property market. And
what we find obviously is that quite a lot of
tenants think that landlord multi millionaires in all cases. But
the majority of landlords have won or two properties, or
indeed accidental landlords, they've ended up, they've inherited somebody else's issue.
And that's the reality of landlording and New Zealand at
(03:20):
the moment. But if you bought in twenty or twenty
one and bought, let's be feared like a fairly compact townhouse,
and that's now gone down, as totality said in the article,
went down something around twenty percent. You might have a
property that fifty or sixty thousand dollars upside down, and
that doesn't count to the fact that you've also paid
a deposit. So the reality of trying to get out
(03:42):
of that is maybe threefold. Either tear that band aid
off and start the recovery right now, rent it out
and wait. But I don't think people really do the
numbers and accounts for how long that might take, because
you might be losing two hundred dollars a week in
cash flow, you might be down two hundred thousand dollars
in equity, and the recovery might take quite a few years,
(04:06):
and then that recovery has to be made up for
in tax paid dollars as well. So it could be
some some pretty hard choices being made.
Speaker 2 (04:16):
If anybody thinks that they're going to get the money
they paid back in twenty twenty one twenty two, they're
probably dreaming. I mean, we had to buy then because
we needed a place to live as a family, and
I knew even then. I'm like, oh no, this is
really going to hurt. It's going to we're paying more
(04:36):
than we have to, but we need a place to live.
You could even find anywhere to rent.
Speaker 1 (04:40):
Then, yep.
Speaker 3 (04:41):
Absolutely, And people will get back the money they paid
in twenty twenty one, but it might take a decade
and the cost of that has lost opportunity value as well. Yeah,
because if you do pull that band aid off and
face that loss today, it's equity and you don't realize
the loss until you actually make the sale. Don't get
(05:03):
me wrong, but it starts you having the ability to
do something better straight away, because you know the real
truth is, if you're selling and taking a loss right now,
you might be able to buy back into the same
market and get a better quality property or a better
return or yield, or a bigger discount right now, because
real estate in this country at the moment is on sale.
Speaker 2 (05:23):
For the use of the better word, how many people
do you see who are making decisions based on emotion
like they don't want to be they want to get
back what they're sunk funds, and even though the writing
is on the wall that they simply can't afford to
with every like insurances are going up, rates are going
(05:45):
up on paper, they simply can't afford it, but they're
not willing to let go because then they've lost.
Speaker 3 (05:51):
I think that's a rhetorical question you're asking me how
many people in New Zealand are stubborn. I'd have to
emotionally say all of them. You know, facing a loss
like that is can financially hurt a lot. It can
ruin some people, but it's embarrassing as well. And I
think the first port of call is, in reality, speak
(06:14):
to your mortgage broker. There absolute specialists at helping people
make things financially better when it comes to house purchases.
There's vehicles within the banks that can help and assist
as well. I've seen people taking two three bedroom townhouses
that were massively cash were negative and costing a lot
of money and putting them into the Airbnb pull and
(06:36):
being able to improve it that way, or just taking
them interest only using a different vehicle, right.
Speaker 2 (06:41):
I mean, it's got to be good news for renters
given that rents are falling and they can, you know,
probably have more choice now when it comes to renting.
Speaker 3 (06:52):
Yeah, to a degree, but I mean, let's be fair,
rents have fallen. I live in Wellington and a lot
of the rents here have gone down to one hundred
dollars a week, but the cost of living has gone
up by that at the very least as well, and
when we're in a very unsure period in the market place.
So if you're thinking about a property investment at the moment,
you're also thinking about oil and diesel and straight up
hamose and elections coming up, in interest rates in the
(07:14):
ocr and there's just more excuses to not do something
at the moment in the property market than there is
to do something. But having said that, it's not a
universal issue. What I think. What I mean by that
is real estate on coto Zid and tragedy had I
think fifty eight to fifty nine thousand listings a couple
of months ago, and now they're down to forty nine thousand.
(07:34):
We are clearing through quite a backlog. People are buying
things that are you know, have equity built into them,
that are cash flow positives. Because we're at the bottom
of the market, we're covering slowly, slowly.
Speaker 2 (07:45):
Well, I mean that's the first home buyers have jumped in,
especially in Wellington, what was it, thirty seven percent of
house sales were first home buyers who thought, right, it's
never going to get lower.
Speaker 3 (07:55):
Than less I'm in exactly. And there's a build up
of that as well when you think about it, because
during a boom period in real estate, those first home
buyers sit on the sidelines and go it's all too
hardened to expenses that they're living in a mother and
dad's spare room, and that gets very old, very quickly,
and so they never stop thinking, I want to buy
my house. They just wait, and when the property markets
(08:16):
like it is now, they do exactly what the right
thing is. They buy in. And then as soon as
they buy a house they want to see some inflation
and they start looking very carefully at who they vote
for during an election.
Speaker 2 (08:27):
Yet, so your advice just the key points again. If
you're struggling to keep up with the payments on a
house board at the peak, what would you recommend people
go and see their bank manager in the first instance,
or a financial advisor.
Speaker 3 (08:43):
Financial advisor, mortgage broker, and then bank probably in that order.
There are a lot of different options. You can do
the tear the band aid offs at one and actually
sell it, you know, solidify the loss and then start
financially recovering from a bottom of the market. You can
hide your head in the sand and do nothing and
see if it gets worse, and it might do and
it or it might take many many years for it
(09:05):
to improve. Well, you can just work on it and
prove on it. I've actually got a lot of people
at the moment who are buying at the bottom of
the market to find something cash flow positive to protect
themselves from the negative one they've got so they get
back to zero again as well. There's a few different
options that most people don't think of. What most people do,
They get Stubb and they bury their head in the ground.
(09:26):
They ignore the situation till it's worth and that's possibly
the wrong thing to do.
Speaker 2 (09:29):
Yeah, definitely the wrong thing to do, Steve. Thank you
so much, Steve got Ey, Property Coach.
Speaker 1 (09:34):
For more from carry Wood and Mornings, listen live to
news talks that'd be from nine am weekdays, or follow
the podcast on iHeartRadio.
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
The MeatEater Podcast
Building on the belief that a deeper understanding of the natural world enriches all of our lives, host Steven Rinella brings an in-depth and relevant look at all outdoor topics including hunting, fishing, nature, conservation, and wild foods. Filled with humor, irreverence, and things that will surprise the hell out of you, each episode welcomes a diverse group of guests who add their own expertise to the vast world of the outdoors. Part of The MeatEater Podcast Network.
Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by Audiochuck Media Company.