Don't buy yet, don't sell right now, and polish the nugget you're sitting on. That's the key advice from three property gurus who claim to have the good oil on how to prosper in New Zealand's slumping housing market.
With the number of sales down across the country and prices beginning to fall in some areas, investment experts say the time is ripe to study the market and wait for the bargains to hit.
They say first-time home hunters should use the next six months to save a better deposit.
Investors should improve the properties already on their books and look at raising rents to make up any shortfalls.
Families wanting to upgrade to a better property should also follow the six-month rule, says Mike McCombie, one of three property experts behind a new real estate guide How to Survive and Prosper in a Falling Property Market [out March 17].
"The market's not going to go anywhere apart from sideways or down," says McCombie, an investor who bought his first property in 1977 when he was just 19.
Thirty years later he is advising first-home buyers to "be cautious and patient". He estimates some homeowners will be backed into a corner by rising mortgage rates which could see some bargains on the market. "There will be some people who have to sell."
Co-author Mark Withers agrees, and advises those looking to make a buck to watch what happens in mid- to low-income suburbs.
"There's going to be more bargains to be had in these areas simply because there's more people in difficulty," says Withers.
That's good news for first-home buyers Jana Dixon and her partner, Dane Nordstrand, who have been traipsing around the open homes on Auckland's North Shore for a few years.
Dixon estimates they have looked at 100 properties and have a "daily ritual" of scouring Trade Me for their dream home. But they are still unsure whether or not to buy.
The 24-year-olds have considered stopping their search and concentrating on saving - a tip that Withers wholeheartedly endorses.
But, he says, it's not just first-time buyers who should be sitting tight right now. Those who already own property should "polish the gold nugget" they're standing on rather than buying any more.
Withers, who has been been investing in property since his university days, said rental property owners should look at improving their properties and reviewing their rents.
"You don't necessarily need to go out and buy another property."
He estimates some properties in Auckland have rents that are up to 15 years out of date.
"All the landlord is doing is subsidising someone else's living costs."
And, he says, now is not the time to sell "unless you absolutely have to".
"You should put your head down and keep walking. People who do that have always come out the other side."
But it's hard not to want to increase a portfolio in a market in which prices are dropping. Investor Geoff Hall is looking to bag a bargain in the current downturn.
"I will have my eyes open for a bargain. I've always got half an eye open."
The high-school teacher bought his first home in 1993 and now has nine investment properties.
He has a few methods to his success that he believes are the key.
"As a rule I don't buy a property that loses money. My philosophy has always been I don't think of capital gain, I think about income."
And others are out looking for bargains. Denise Fowler and Mike Fisher, of Hamilton, recently sold their house for $275,000 in a week. They bought a four-bedroom home in Fitzroy with two living areas to cater for their growing family of grandchildren.
Fowler said the couple was not deterred by dips in the industry and watched the local market carefully as they planned the sale of their Melville home. "We just did our homework. We wanted to be able to get the right price."
For investors thinking of dabbling in property now, Withers recommends commercial property, where tenant demand is also strong.
* INVEST WISELY
While property is still regarded by many as a sound investment, experts say now is the perfect time to diversify investments, with options as conservative as big banks and art looking more attractive.
Property investor Olly Newland believes splitting your money is the safest way to invest. "You should have some in property but I think you should spread it around. It's a total misconception to put all your money in property."
Newland recommends a third of investment money should go into an "income producing" property, another third into a bank deposit, and the remaining third should be an "international asset".
Newland recommends investing in gold or works of art - "something that's not going to lose its value when it leaves the airport."
Financial planner Liz Koh says "cash is king" at the moment. "I think people with cash are going to be able to take advantage of some good drops in the property market."
However, she also recommends bank bonds. But Koh, who established financial planning company Moneymax, says the typical Bonus Bonds should be given a miss as the return was "pathetic".
Jordie Garcia, director of New Zealand Financial Planning, says new internet banking groups, such as Rabobank, should also be considered. An online savings account could bring an interest rate of 8.25 per cent. Garcia also recommends investing in the stock market, even if it is nerve-racking at present.
Mark Sutton, general manager of New Zealand Mint, says gold is "the anti-inflation investment".
Sutton has already noticed a change in the type of people investing in bullion. Five years ago it was big corporate investors, now it is "mums and dads and the average Kiwi".
For around $5000, depending on world prices, you could have four ounces of gold. "The one advantage with gold is that you can control it. It's like a world currency."
Sutton says people need to look "outside the square", as gold prices were rising with the cost of oil and the rise of new economies in Eastern Europe, India and China.
Parnell financial adviser Deborah Carlyon says people should avoid rental property and look at other forms of investment. "It's a good time to invest in managed funds because the New Zealand dollar is high. You're buying at cheaper prices because share markets have fallen."
Any investment should be portfolio investment entity compatible as they have a lower tax rate. With high interest rates of around 8.5 per cent, long-term saving can be as simple as a bank account.
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