Philip Macalister: Ponzi threat explains love affair with property

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I've been thinking about New Zealanders and our love affair with property. It is a bond that will never end - well, not in my lifetime anyway.

You can understand why New Zealanders love an asset they can touch, feel and see.

Especially when we read stories about Ponzi schemes such as the one run by Ross Asset Management.

It is incredible that 900 people can be ripped off to the tune of more than $400 million.

What is even more amazing about the sorry Ross saga is that no one in a village-like city such as Wellington knew about it.

There is also a little irony that the Financial Markets Authority offices were opposite the Ross Asset Management offices, and a few hundred metres down the road.

It would be pretty damn hard to manage this magnitude of fraud with so few people in property. (Some readers may say that finance companies managed this.)

Our attitude to property is a bit like the stories and life cycle of the humble pukeko.

Apparently pukeko have one partner and mate with them for life in an enduring relationship which can't be broken. This story is a little hard to prove but maybe the Maori myth about how the kiwi lost its wings is more appropriate.

The pukeko was one of several forest birds that were asked to come down from the trees to eat the bugs on the ground and save the forest.

All the birds, except the kiwi, gave excuses as to why they couldn't do it.

The pukeko's excuse was that it looked too damp down there and he did not want to get his feet wet.

So the pukeko was punished for refusal and sent off to live in the swamps forever.

New Zealanders are being urged to stop investing in real estate. Instead they are being asked to invest in "productive" assets or the country will be punished economically.

It's a myth and is unlikely to happen.

Investing in property is one of those things that will take generations to change. It's a behavioral change, like the anti-smoking and drink-driving messages.

People will change but others will continue to do it.

Philip Macalister is the publisher of NZ Property Investor magazine and www.landlords.co.nz