Friday, August 30, 2013

House Prices in Auckland only a 'Solid' Return

Largest Auckland real estate firm says 78% house price growth in Auckland in the past 10 years only a 'solid' return.

Auckland's largest real estate firm Barfoot & Thompson says price gains in Auckland over the past 10 years "have not been spectacular" and have offered investors only a "solid" return.

The firm, which accounts for around 40% of Auckland house sales, has done an "in-depth analysis" of the average sales price of three-bedroom Auckland properties. Three bedroom homes were chosen for the analysis as representing the sized house most commonly bought and sold.

According to Interest.co.nz calculations this works out at a compounding growth rate of 5.94% a year.

For comparative purposes B&T used the NZX Asset Class Performance Report, showing annual returns for 10 years to June 2010.  It showed that listed property returned 8.3%, corporate bonds 7.4%, government bonds 6.9%, NZ cash 6% and NZ shares 5.8%.... more

Comparison: if it is all about wealth preservation and return combined, then here are some other figures:

10 year silver : up 15% for wealth preservation and return
10 year gold: up 11% for wealth preservation

Gold in New Zealand dollars: $1816.21 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)
Low since previous high: $1532.30 (28 June, 2013)

Silver in New Zealand dollars: $30.81 per oz
Previous all-time high: $59.19 per oz (30 Apr, 2011)
Low since previous high: $23.51 (28 June, 2013)
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Thursday, August 29, 2013

Auckland house market risky: NZIER

'PEOPLE TELL ME HOUSE PRICES NEVER FALL ... GO AND LOOK AT PRICES IN THE PROVINCES'

It is a myth that house prices never fall in New Zealand, with inflation-adjusted prices outside Auckland and Canterbury down 20 per cent since 2007, according to NZIER.

"People tell me house prices never fall in New Zealand . . . go and look at house prices in the provinces. House prices do fall," NZIER principal economist Shamubeel Eaqub said yesterday.

Auckland house prices had risen 13 per cent since the last peak in 2007, after adjusting for inflation, driven by low-deposit lending and coming on top of already high debt levels, which made the market "vulnerable".

In the past year, in central Auckland house prices had risen 15 per cent, but rents were up just 2 per cent.

That indicated there was not an actual shortage of homes as there was in the early 2000s when there was a migration and real shortage of homes.

"My feeling [is] what's happening in Auckland is driven by investors, not by physical supply and demand balances," Eaqub said.

Canterbury house prices were up 5 per cent, since 2007, adjusted for inflation. That reflected a clear shortage of housing since the big quake in 2011 destroyed 10,000 homes.

But for the rest of the country, inflation adjusted house prices had fallen 20 per cent since 2007.

"There is no housing crisis, outside of Auckland," Eaqub said. In fact, house prices in many places had become "pretty affordable".

For example, in regions such as Taranaki the median price is about $320,000. For skilled energy sector workers such as a field engineer that was only about three times annual income.

Inflation remained under 1 per cent and wage inflation was low.

Gold in New Zealand dollars: $1796.88 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)
Low since previous high: $1532.30 (28 June, 2013)

Silver in New Zealand dollars: $30.63 per oz
Previous all-time high: $59.19 per oz (30 Apr, 2011)
Low since previous high: $23.51 (28 June, 2013)
_____________________________________________________________

The Anglo-Far East Company
AFE is the gold bullion custodial provider of choice for the sophisticated investor,
families, and institutions that require the highest level of discretion, competence,
safety, and service. Your reference when you order: an-001
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Monday, August 26, 2013

Where to from here with Gold and Silver?

Ah yes, the crystal ball. If only life was so plainly obvious.

But what of gold and silver. In New Zealand dollars quite an upturn in price in the last two weeks. What's going on?

Over the past 7 years of following PMs, I notice there is a lot of internet based misfiring loudmouths that can easily lead you astray in your PM life.Guys that own huge PM funds that will always tell you that now is the best time to buy while secretly selling. Annoying. Annoying also having to try and filter out all that noise and discover good sound logic.

So who do I listen too and follow without hesitation? No one. Call me a cynic (many have) but no one has all the information necessary to make you wealthy with anything. You need to be the filter.

In hindsight, in the last 6 months PMs seem to have got a little overbought. Probably by hedgefunds. Was there manipulation of prices? Sure, there always is. Those big players always get their toes close to the legal line in order to make big.

What's happening now to make prices jump? Probably wars and the rumours of wars. Gold for safety and silver for the electronic parts needed for weapons?

Maybe India is frightfully close to chaos. Will this be the next Egypt? When people get hungry, they get desperate. They take to the streets.

Maybe it's the big fat Greek catastrophe rearing it's poseidon head once again. Thought Greece was fixed. No, of course not, it just wasn't a big enough story to make the headlines.

Maybe it is all about the Fed's "she tapers, she tapers not" idiocy. The markets don't seem to care about fundamentals (at least right now) and are a mixture of confusion and insanity.

I tend to think that PMs are weird and unknowable. Except that I wouldn't have my wealth anywhere else right now.

Will they go up to $100 silver and $5000 gold soon.

Not saying as I don't want to be the next spruiker on the internet.

Gold in New Zealand dollars: $1783.84 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)
Low since previous high: $1532.30 (28 June, 2013)

Silver in New Zealand dollars: $30.79 per oz
Previous all-time high: $59.19 per oz (30 Apr, 2011)
Low since previous high: $23.51 (28 June, 2013)
_____________________________________________________________

The Anglo-Far East Company
AFE is the gold bullion custodial provider of choice for the sophisticated investor,
families, and institutions that require the highest level of discretion, competence,
safety, and service. Your reference when you order: an-001
_____________________________________________________________

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Friday, August 16, 2013

Silver up on High Volume

Silver has been the star performer (along with copper) for the past 6 days. From what I'm reading, no one (once again) quite knows why. Safe-haven? So why isn't gold going gang-busters? Egypt? Maybe. Good news in China? But who believes that. Someone bougth a large amount of silver today (see article below). So what now?

So what caused the rally today? A good question today is, "what caused the rally?"  My answer - I have no idea.  There was no news event that triggered this move that I could see.  After trading all day in asia and london around the 22 level, silver was hit for a 30 cent loss after a deluge of economic releases starting at 0830 EST, but then recovered slowly back to even.  Then someone started buying silver futures, starting at 12:47 EST, and continued buying them until the massive spike at 13:11 that resulted in 306 tons of (paper) silver changing hands in one minute, silver moving from 22.80 to 23.19 on that final spike.  From what I could tell, gold appeared to be reacting to silver's move.  Various news articles suggest it was some sort of "safe haven" move (if true, gold should outperform silver) but honestly, I think someone with some pretty deep pockets decided to "buy the breakout" as silver moved above its previous high for the day (21.16), and then every time there was a pause, they bought again, and this happened until silver hit 22.80 when the last batch of shorts gave up and the biggest spike occurred....see more

Gold in New Zealand dollars: $1693.44 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)
Low since previous high: $1532.30 (28 June, 2013)

Silver in New Zealand dollars: $28.52 per oz
Previous all-time high: $59.19 per oz (30 Apr, 2011)
Low since previous high: $23.51 (28 June, 2013)
_____________________________________________________________

The Anglo-Far East Company
AFE is the gold bullion custodial provider of choice for the sophisticated investor,
families, and institutions that require the highest level of discretion, competence,
safety, and service. Your reference when you order: an-001
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Wednesday, August 14, 2013

Seven Stages of Empire

A history lesson in gold. See what you make of this presentation by Mike Maloney:


Gold in New Zealand dollars: $1658.80 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)
Low since previous high: $1532.30 (28 June, 2013)

Silver in New Zealand dollars: $26.94 per oz
Previous all-time high: $59.19 per oz (30 Apr, 2011)
Low since previous high: $23.51 (28 June, 2013)
_____________________________________________________________

The Anglo-Far East Company
AFE is the gold bullion custodial provider of choice for the sophisticated investor,
families, and institutions that require the highest level of discretion, competence,
safety, and service. Your reference when you order: an-001
_____________________________________________________________

Go More Raw Seven Day Raw Food Mix and Match Program

Raw food can be interesting, satisfying and taste fantastic. The big bonus is the
optimum nutrition in raw food. For seven days you can put raw food to the test
and you could be pleasantly surprised.
_____________________________________________________________

Monday, August 12, 2013

House Prices in New Zealand v Gold, July 2013

In July, 2013, the gold ounce to house price ratio has moved in favour of gold.

Looks like my call that that house prices were high at the end of June because of timing issues, was timing issue with the figures at the end of June. Especially as gold was at a bottom.

The median house price in Auckland is down another 0.5% according to the REINZ website. Again, people are being hoodwinked with the local media still spruiking house prices. Caution needs to be the order of the day if you want to speculate on houses. Just today, people are still thinking house prices will rise significantly from now to match the run-up from 2004 - 2007.

Right now, it appears that a majority of the excess reserves of US Fed printed money ($85 billion per month) is headed to overseas banks ($43 billion per month). This no doubt fuels the housing market here. Once this is taken away, all sorts of distortions will occur. See here.

It now takes 27 gold ounces less to buy the median priced Auckland house than it did in June, and 23 ounces less to buy a median priced house in New Zealand.



Gold in New Zealand dollars: $1638.05 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)
Low since previous high: $1532.30 (28 June, 2013)

Silver in New Zealand dollars: $25.62 per oz
Previous all-time high: $59.19 per oz (30 Apr, 2011)
Low since previous high: $23.51 (28 June, 2013)
_____________________________________________________________

The Anglo-Far East Company
AFE is the gold bullion custodial provider of choice for the sophisticated investor,
families, and institutions that require the highest level of discretion, competence,
safety, and service. Your reference when you order: an-001
_____________________________________________________________

Go More Raw Seven Day Raw Food Mix and Match Program

Raw food can be interesting, satisfying and taste fantastic. The big bonus is the
optimum nutrition in raw food. For seven days you can put raw food to the test
and you could be pleasantly surprised.
_____________________________________________________________