Personal investment expert Mary Holm argues that you don't have to jump on the house buying bandwagon!Whatever moves people make from now on they need to keep in mind that house prices might go down, Mary Holm says. Listen to the full conversation with Mary Holm."The last time the volume of house sales was this high was back in 2006 and 2007 and then look what happened, that led to the GFC," Holm told Jesse Mulligan.House prices went down 10 percent in New Zealand post GFC, she says."People just forget that. Some people say house prices never go down."On the contrary, since 1990 house prices in New Zealand have gone down five times, on five different occasions, she says, with the 1990 drop getting on for 19 percent.Bearing this in mind she suggests first home buyers should be cautious.Saying it might be wise to "wait on the side lines and keep saving."Holm says a correction or levelling off in prices is likely."I just can't believe they're not going to either level off for a long time or actually fall. And I don't know when, but it just feels like that could happen."First home buyers who do buy in the current market should not panic if there is a subsequent fall, she says.The investor market worries her, however. The current situation reminding her of the shoe shine boy in New York prior to the Wall Street crash."Joseph Kennedy got out of shares because the shoe shine boy who was shining his shoes was talking about what shares to buy and he said if everybody's in then I'm getting out."It's starting to feel a bit that way now."People sitting on large amounts of equity in their home are looking to leverage that into a rental property, but this comes with risks, she says."You can't ever get a sustained situation where there is high return and a low risk and that is what's going on with property at the moment people are thinking they can get high return without taking very much risk."More than 90 percent of rental properties lose money or make very little, she says.If you are making annual loss that means you are putting money in from elsewhere ... and that's where things start getting worrying, she says"The typical owner of a rental property has borrowed to invest and they are making gains on their money and the bank's money, and that's terrific but if they lose their job and can't maintain putting extra money in to the investment to keep it going and have to sell that's when things get ugly…Go to this episode on rnz.co.nz for more details

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