Doom book coming true, says Newland

By ANNE GIBSON


Property investor Olly Newland sat down to write a book at Christmas with a sense of impending doom.

Inquiries for his real estate consultancy had dried up and calls for his Auckland office space were few, which led him to believe he had got the first whiff of a change.

So he wrote his fifth book on real estate, predicting an end to the good times. "We're in choppy waters, the peak has passed and there's conflicting advice," he said in Auckland yesterday of the market for residential and investment property.

"But I don't want to sound like Dr Gloom."

A survivor of the 1987 real estate crash which saw the demise of his listed Landmark Corporation, Mr Newland has produced The Day The Bubble Bursts - how to profit from the coming property slump (Addenda, $29.95).

His book, released this week, comes as Australia weathers a housing downturn.

New Zealand economists say the once-booming housing market turned in August last year. Sales volumes have declined and selling takes longer.

Mr Newland says says inner-city apartments will suffer the most from a slump.

He said yesterday that his book's predictions were all coming true. Even before many others noticed a change, he said, he penned a checklist of what to watch out for when the market was turning.

Mr Newland said he had cut his debt levels to make himself more financially secure, selling "millions of dollars" of underperforming investment property.

He advised other people to also reduce their debt.

Neil Prentice of Bayleys Real Estate challenged Mr Newland's claims about a collapse.

The housing market was levelling off a little but there were no signs of any widespread downturn, he said.

Commercial property was doing far better than it had for many years.




* WARNING SIGNS INCLUDE:


* "More and more 'for rent' signs fluttering from houses and flats and longer columns of classified for rent ads in the papers." Newland said yesterday that high-priced house rentals had dropped from about $900 a week a year ago to $700 now.

* "Sale clearances slowing." Newland cited Barfoot & Thompson figures showing auction clearance rates were dropping, which also indicated the market had turned.

* "More properties being quoted with prices rather than for tender or auction".

* "More incentives, rewards or free gifts ... offered when you sign up for a new house or ... apartment".

* "More intensive advertising by spruikers, get-rich-quick artists and overstretched developers of instant slums".

* "Unexpected interest rate hikes by the Reserve Bank".

* "Median property prices dropping three months in a row", which Mr Newland said was fulfilled by figures from the Real Estate Institute.