Is a rental property still a good investment option?

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1101

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#2198491 15-Mar-2019 11:57

OP was talking about a 25year investment.
So look at FUTURE returns on investment for housing after the NEXT 25years , and compare that with shares / whatever.

I bought my house for 77K . Its now GV'ed 1Mil .
Is that relevant: NO .
It doesnt mean anything for what will happen in the next 25 years
There is no way my property will increase in value by such huge amounts again. No one would/could ever pay ridiculous prices .

I would think, given low NZ wages and high housing costs, we may have hit peak pricing long term .
Housing Prices cant go up beyond what people can actually pay, so the big increases may now be over .
Getting a big return/profit just from increase in value may not happen .

tdgeek

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#2198512 15-Mar-2019 12:05

1101:

OP was talking about a 25year investment.
So look at FUTURE returns on investment for housing after the NEXT 25years , and compare that with shares / whatever.

I bought my house for 77K . Its now GV'ed 1Mil .
Is that relevant: NO .
It doesnt mean anything for what will happen in the next 25 years
There is no way my property will increase in value by such huge amounts again. No one would/could ever pay ridiculous prices .

I would think, given low NZ wages and high housing costs, we may have hit peak pricing long term .
Housing Prices cant go up beyond what people can actually pay, so the big increases may now be over .
Getting a big return/profit just from increase in value may not happen .

Good points. I remember when 180k was BIG money, 350k was HUGE money. I feel it will be flat for a while, but its still supply and demand. While demand should be less than supply, for my house, or my area or my type of property that will differ. Renting will be more popular, that reduces the supply whicb can raise prices. While prices are a high number these days, many still can afford them. Big savers, good earners, existing home owners. It may end up being quite bouyant, a smaller number of houses and people who can buy them, maybe still relatively balanced

solutionz

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#2198543 15-Mar-2019 12:55

1101: ...Housing Prices cant go up beyond what people can actually pay, so the big increases may now be over...

Globalisation.

Even with "foreign buyer restrictions" you're not just competing with local capital; resident immigrants, companies, syndicates etc can all access cheaper off-shore capital and continue to price locals out of the market - not to mention simply laundering money through inflated property transactions.

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