The latest in an apparently endless series of you-too-could-buy-a-house-if-you-weren't-so-lazy-and-worthless stories appears on the New Zealand Herald website today. It is titled: From $30k deposit to $1m planned portfolio in a year: one couple's story:
Two 24-year-old Aucklanders, who collectively saved about $30,000 for their first place in their first year of work, could have a $1 million-plus portfolio by the end of this year.
It seems too good to be true – and, naturally, it is.
So how did a couple only in their first year of working life afford all this?
"We borrowed 60 per cent of the purchase price. The rest of it came from parents as an equity gift," he said.
So, yes, the couple didn't buy a $640,000 unit off the back of $30,000 in savings. Their deposit wasn't $30,000 as the headline and intro claim – it was $256,000. I think most twentysomethings with jobs could get a bank to lend on that basis. But of course, most twentysomethings don't have parents in a position to pitch in a quarter of a million dollars.
Herald property writer Anne Gibson's story also embodies another trend in these stories: that the way to buy a house in Auckland is to become a property investor. Yes, cities need landlords. But the idea that we should all turn home ownership into a speculative business is completely mad. Auckland has quite enough of that.
But one more thing: it's yet another Gibson story mentioning property investor Ron Hoy Fong and/or his "coaching family" Ronovationz, which runs property investment seminars. I count 14 of them since the beginning of last year. Last week, there was this interview with Ronovationz "Property Wealth Coach" Gary Lin, whose idiotic advice includes such gems as:
"If I were 16 years old today, I would join the army and toughen the f*** up ...
"Then, when I'm in my early 20s I would get an education or trade and read hundreds of books on wealth creation, personal development, habits of successful people. Then I'd do an OE and build a successful profession overseas, chase the money, see the world, build up a saving at the same time or learn about business and start up businesses.
"Success will come when one has developed the rich mindset, rich habits, and has taken action. Complaining on Facebook during work hours will do f***-all to their lives."
This is not, of course, how Lin himself got on the ladder. As another Gibson story, from January last year, explains, Lin got into the housing market courtesy of a $200,000 wedding gift from his father. But perhaps Lin does have a few tricks: here, in this forum he encourages people to get around restrictions on lending to investors by lying to their banks.
In another story in November, Hoy Fong declares that the "secret" to buying a house in Auckand is to use your parents' equity in their house, which will "probably" be mortgage-free. In a Herald Focus video on the same date Hoy Fong explained more about how "easy" it was to buy a house this way and scorned New Zealanders who "stay just over broke" by working at conventional jobs. The same video is also on the site as Why you should buy property now.
Two days before, another Gibson story reads like an advertisement for Hoy Fong's coaching business:
What is stopping New Zealanders from getting rich?
That's the question a $23 million 31-property owning Auckland landlord, Ron Hoy Fong is asking at a seminar in Auckland on Saturday.
In February last year, Gibson had Hoy Fong urging Aucklanders to buy as many properties as possible "and get in before the Chinese". (To be clear, Hoy Fong is a third-generation Kiwi and his grandparents were market gardeners. He was a civil servant who made his initial wealth by building then franchising the Tofu Store chain.) A month later he was in another story, predicting that the Auckland market was going to" go bananas". In September he was back crowing about the $500,000 capital gain he scored on a property he bought that March.
This kind of bullish sentiment is integral to both of Hoy Fong's businesses – his "coaching" and his actual property investment. But whether the Herald should be making itself available as a megaphone is another matter.
Its not only the Herald of course. Stuff has run a series of how-I-bought-a-house stories too. And presumably, these stories run so often because people read them, even if only to look for the inevitable gotcha.
But maybe, just maybe, repeatedly running stories sourced from one company urging people to get into property on the expectation of easy wealth gains isn't a very healthy thing to do.