Seeing the signs of the ‘prop-ocalypse’
GOLDEN RULES
Apocalypse cult members tend to be on the lookout for signs of the rapture.
They hope fervently to see oceans turning red, deadly plagues, famines and earthquakes as these are signs they’ll soon be with their God.
There’s been a vein of doomsday prophets expecting (hoping for) a New Zealand ‘‘propocalypse’’.
To date their predictions of the housing bubble bursting have proved wrong.
The latest prognostication on this front was for an 11 per cent fall in property prices by 2019.
Okay, not really a property apocalypse. For that you need British, or Irish-style negative equity, and thanks to the Reserve Bank’s undemocratic mortgage lending restrictions, most recent buyers have had to have deposits of 20 per cent or more.
I accept predictions with interest, but little faith. I won’t be planning my life around them.
Humans are rotten at predicting the future.
We seem hard-wired to give credence to information that supports our beliefs, and discount that which contradicts them.
We are over-credulous of opinion-leaders with an axe to grind.
We are apt to wake up and find the world is far more complicated than we thought.
During a working lifetime of seeing prophecies miss the mark, I have stayed out of the prophecy game.
Until now, that is. I am starting to see prophetic ‘‘signs’’ everywhere.
The first sign is the desperation of the young suits.
My great theme of the last two years has been the sad, and desperate well-paid suited types either unable to buy a place, or adopting desperation strategies like buying places in cheaper faraway places, and either accepting mega commutes, or carrying on renting.
When bright young white bankers can’t buy a half-decent place within 15 kilometres of work, you know things are out of whack. Capital, not income, is the thing you need to buy a house these days.
Senior economists and rising business leaders can’t afford to buy within five kilometres of my leafy suburb home.
Recently, we were even treated ❚ Recognise when to pay down debt ❚ Take advantage of low interest rates
❚ Attack that mortgage, wipe that credit card bill
to the head of an Australian bank calling for tougher lending restrictions.
There’s been an increase in clever, but unhelpful news articles about people living in tiny homes, rentvesting, buying with friends, commuting to Auckland from Hamilton, etc.
Even the cheerleaders for rising house prices have gone quiet lately. The National Government, the defender of privilege, has been looking uncomfortable.
These are signs we are at an extreme moment in our history, and at a heightened risk of economic upheaval.
New Zealand has gone so long without a real economic crisis, we have almost forgotten they can happen.
For householders, this is a time to save and pay down debt.
Nobody ever regretted having paid off debt before interest rates rose, or economic turbulence struck.
For savers, this is a time to keep your nerve, carry on dripfeeding money into the market.