War in the Middle east.

What can it mean

Gerald Mullaney

28 March 2025

The Ukaraine war is all but over, with the fine detail being worked out between America and Russia as at 28 March 2025.

A peace agreement maybe in force by mid 2025 between America and Russia with Russia taking Ukaraine.

America looks like its going to withdraw form NATO creating a huge vacumn between Europe and Russia causing panic in Europe as Europe is exposed and not prepared for any intending war.

This has cause billions to be appropriated to the military complex therefore creating a boom for the military complex, factories and job creation in this area.

With the war in Ukaraine coming to a peaceful solution should mean plenty of oil, gas and rare earth minerals being shipped to America there is the possibility that fuel price will trend down this will be great news for the economy.

The only problem that usually happens. if there is a forth coming shock, like a full war in the middle east this usually causes consumers to stop spending, this in turn makes it hard for business, jobs can disappear thus causing people to lose their jobs and income.

If the war was prolonged the main risk is loose of job, loose of income and the inability to service the huge debt.

The instability in Europe, Ukaraine and the middle east does come with risks.

It is of the view that, expanding and taking on debt, in these unstable times may not be a very good strategy.

Already going into 2025 it being reported that good tenants are hard to find this can result in vacancies and then reduced cash flow.

Stay cashed up, making sure a good stash of cash in the bank to cover and reduced cash flow period for six to 12 months will protect investments from a bank forced sale.

This is a time to play it safe therefore being enabling one to hold any investments until the storm is over.

Property Listing & Mortgage Sale rise

Gerald Mullaney

28 March 2025

Property listing rise to near 40K and mortgage sales rising, could this be profit taking? The view is no, as why would one sell into a falling market? for example Auckland real estate prices adjusted for inflation are down 35% to 40%. The rise in listing may mean the debt holders can no longer afford the huge debt on the property or properties.

The drop in interest rates over the last six month has not eased the situation, its not that interest rates are high or low it a matter that the debt incurred on the property was never affordable in the first instance.

A lot of debt holders took on huge mortgages in some cases over 1.0 million dollars plus, hoping in a lot of cases that, they could hold the property for a short time and make a huge capital gain in a short time with doing very little.

The market down turned from late 2021/22 with the OCR being rased to 5.50% with retail interest rates reaching 7.50% that means on some of these million dollar plus mortgages the interest alone would be 75K or 1,442.00 per week what family could afford that amount wach week?

Therefore the view is the market was full of gamblers and speculators fueled by cheap credit. Throwing the market in a boom that boom is causing the destruction we are seeing in the market place going into 2025.

Therefore the view to all this bad news, most of it not reported. may cause the RSBNZ to stave off a property market crash going into 2025 by once again lowering the OCR to emergency levels to right the titanic property market, save the banks and save the economy.

Be on the look out for a great interest rate going forward from mid 2025 and there also maybe some good property buys for the smart cashed up buyers with great cash flow.

Make this crises your once in a life time opportunity.

Low debt, high equity and solid cash flow is a strategy to consider.