The capitalists may have to pitch in and get behind the projects of the socialists for the next 3 years. We didn’t see that coming – that’s been happening a lot though eh?

The All Blacks lost, Labour’s now in power, and I just plucked out a grey nose hair – will it really cause a massive jolt to property prices?

A couple things will happen politically over next 3 years. Hopefully, the majority of Kiwi’s, who didn’t vote for labour, will be blown away by how a young left-leaning politician can make good things actually happen. On the other hand, the huge economic gains of late have filled the government accounts, enabling NZ to finally do something without using overseas debt. Whether there’s an improvement or not is almost irrelevant as any gain/loss in the short term will not likely get noticed by the everyday voter. Could just be a bit of noise really.

Putting it in perspective though, NZ doesn’t have a crisis with housing, infrastructure, homelessness, and corruption. I’ve just come back from a trip to Cape Town in South Africa – amazing people! 1.5m was the population of a shanty town we drove past one day – the size of Auckland with no trains, drains or services to speak of. The average home was an affordable 5 square metre sheet of corrugated iron roofing. #firstworldproblems?

Cynically, I think the biggest worry honest kiwi’s have, is where am I going to watch the rugby tonight? I think about traffic way more than I do about homelessness if I can be honest for a moment. It’s not like I don’t have a heart for homeless people though – of few of you know I do. I just don’t honestly think about them as much as, say, ham. Let’s all take a turn now being honest – it’s far easier paying taxes to a government to fund the activities that we should have the motivation to do for ourselves. Maybe that’s why labour got as much of the vote as they did? If more money is spent on things we don’t honestly care about, somehow we feel whole?

The likelihood of a Labour government being able to pull off noticeable and relevant improvements to New Zealand’s problems is actually really low. I’d love it if they could usher in world peace, raise Tom Petty from the dead and stop pineapple lumps being made in Australia – but I just don’t see it happening sorry. It’s like taking your super clean car on a road trip, just for the windshields to be assaulted by the window cleaners at the intersection. “I really didn’t want this, I don’t have any more money to give, and I don’t really think you’ll make a significant improvement here.”

Are we setting our expectations too high with this new leadership I wonder? Are we getting our hopes up over issues that we honestly don’t care about? I worry that if any good actually does come out of a change in government, that it’s just then going to get washed away when the centre-right unleashes their revenge on MMP and restores the status quo.

I think the housing party’s over, and it started earlier this year, but this surprise election result could actually be the catalyst that we’ve been expecting to take a wee dip and give it a sinister twist. The surprise election result may be the trigger the next house price correction was waiting for. Almost every year with a 7 at the end of it marks the end of a long bullish period in the housing market for New Zealand. I was expecting a nuclear war, but instead we have a prime minister with the most amazing teeth I have ever seen!

So holy crap, the end is nigh, what do I do?

Settle down, don’t get all excited.

These things are cyclical and this too shall pass. In reality, it’s actually not falling to pieces (yet) – and there’s no evidence yet to support anything crashing all around us other than articles like this, and decline number of shoes at open homes. If average house prices continue to fall between now and Christmas – January and February will either be very strong, or very bad.

Invest, don’t speculate.

Speculators worry about timing. ‘When’s the best time to get in? When’s the best time to sell?’ Investors buy and hold for the long term – their goal is always based on time in, not timing.

If you regularly invest in stocks or you’re enrolled in Kiwisaver, don’t stop. Sure, the value of what you own may actually fall in the short term, but thanks to the wonders of ‘dollar cost averaging, when the markets dip, you’re buying more during this period (assuming a constant $ sum invested, the amount of units you purchase of any investment, increases when the market drops).

Review your risks.

Have you signed up to an apartment off the plans? Are you exposed to any type of property that’s risky and may need repairs soon? Is there an event coming up in your life, which may require the sale of a property quickly or under distressing circumstances? Ultimately the property market can do whatever the hell it wants, and as long as homeowners can service mortgage debt all will be fine and dandy. There’s no cause for concern should house prices fall providing the mortgage payments are made. Income therefore, is all that matters here and anyone who’s not insuring their ability to earn an income in this environment is taking a serious gamble.

Hospitals and businesses use special UPS (uninterrupted power device) units to kick in momentarily during blackouts which prevent loss of power to essential items. A financial UPS, which can continue to provide you with a type of income in the event of a disaster, is critical to ensure that stress from the negative event, doesn’t get worse when layered with financial stress:

A – Have a savings buffer. Ideally having access to at least 6 months of net income is good to start with. Ideally, most negative events won’t last 6 months, but if they do you at least have time to consider your options.

B- Have a revolving line of credit (mortgage). Ideally with a zero balance but a high limit, this positions you to have access to emergency credit (which could create an artificial income for a brief period of time). More importantly however, these types of facilities put you in a powerful position to pounce on opportunities should they arise.

C – Consider redundancy insurance. Not right before you’re likely given the boot, but when you’re feeling all safe and secure. Counter to logic, redundancies increase when businesses find it harder to expand.

So there you go – It may not be the end you were looking for, in fact, it may actually be the start of something awesome if you take a more optimistic view of things. All good decisions are usually made amidst a shroud of fear and uncertainty. This is such a time.