Big change coming in real estate
Many changes are ahead for Australian and New Zealand real estate, with a ‘scary’ scenario laid out for their future, says First National Australia chief executive Ray Ellis.
Mr Ellis visited the Whangamata First National office after attending the First National NZ Annual Strategy Planning meeting at Puka Park, Pauanui.
He was accompanied by New Zealand CEO Bob Brereton and Christchurch owner Joe Mullins.
The Whangamata company’s principal Gordon Turner is a First National NZ board Member .
Mr Ellis said the boom and bust phenomena occurs slowly in Australia but in New Zealand, whatever happens in Auckland quickly spread to other areas.
Both countries were similar when it came to people wanting their own piece of dirt, whether it be an old bach or a $20m home in Auckland.
“Interest rates are so low here but the current generation aren’t using that to fund debt nor increase investment because they want lifestyle first,” Mr Ellis said.
People under 35 years want lifestyle, and overseas trips up to four times a year and enjoy being part of the cafe´ set.
“This makes it a challenging trend for real estate markets,” he said.
He said future government policy must be well thought out and careful of using assets from baby boomers because the average New Zealander makes their wealth through property because they can ‘touch and see it’.
He said he felt large corporates would not be getting into mass investing in housing to meet housing shortages purely because maintenance costs were too high.
Mr Ellis predicted a change would come, as in the US, where people would enter in long-term leasing of homes.
“You can live at the address in 5th Ave New York near family, regardless of cost.
“They feel they own the home they are renting rather than actually paying for it,” Mr Ellis said.
He also predicted that, because of rapid developments in technology, 60 per cent of people in jobs right now will be out of work in 10 years.
For example, four floors of ANZ in Auckland would be much reduced due purely to the rapid advancement of technology.
“On the other hand, I predict service industries will grow, such as laundries, house cleaning, mowing and the like because the new generation won’t want to do these things.
“And I see the future at supermarkets where you will have your cell phone in your cart and it will tally up and pay for your shopping digitally, meaning a lesser need for staff. So the big question is who will pay to keep the unemployed alive?”
He also predicted that with driverless cars being the way of the future, there would be no crashes, therefore no need for vehicle insurances, panel and paint companies and all related industries.
“And, when we finally become a cashless society, that’s when I’ll head for the hills,” Mr Ellis said.