Is the RMA a factor as well? (possibly dumb question)

quickymart:

 

Is the RMA a factor as well? (possibly dumb question)

 

IMO

1. It wont reduce house builds by 250k

2. It might make building a bit cheaper and more popular (= good)

3. Maybe if a revised RMA build, reduced building costs by say 40k the builder might still retain the same price as now (what the market will bear and is used to) so he will take a bigger cut and not affect house prices? 

It really needs a Govt supported building company that builds on the basis of Cost Plus. Rather than cost plus = $600k, "but hey we can get $750k for this" That may make other builders tow the line

Looks like the IRD is going after property investors by matching buy/sell records with tax records. They estimate 25% of investors have no it paid tax appropriately. I reckon that will take some heat out of the market, as far as property gains go. But the remainder of the market will boil on.

BlinkyBill:

 

Looks like the IRD is going after property investors by matching buy/sell records with tax records. They estimate 25% of investors have no it paid tax appropriately. I reckon that will take some heat out of the market, as far as property gains go. But the remainder of the market will boil on.

 

Maybe, I don't think any artificial things will make much difference to the market. Housing stocks are the issue

BlinkyBill:

 

Looks like the IRD is going after property investors by matching buy/sell records with tax records. They estimate 25% of investors have no it paid tax appropriately. I reckon that will take some heat out of the market, as far as property gains go. But the remainder of the market will boil on.

 

Nah,

It will only apply to Flippers, (5 year test, and not family home)

In reality having to pay 33% (maybe 39%) on a couple of hundred grand in profit is not really going to deter this small subset of people.

BlinkyBill:

 

Looks like the IRD is going after property investors by matching buy/sell records with tax records. They estimate 25% of investors have no it paid tax appropriately. I reckon that will take some heat out of the market, as far as property gains go. But the remainder of the market will boil on.

 

lol it's a bit silly. i know someone who sold a house 2 months ago and then got IRD notification last week saying "stop. attention - they haven't declared tax".

umm ... it's because you declare it on 31 March 2021 and before July 2021.

so if they include for all the properties sold since 1 APril 2020 ... ummm yeah i doubt anyone would have done their 2021 tax returns

wellygary:

 

BlinkyBill:

 

Looks like the IRD is going after property investors by matching buy/sell records with tax records. They estimate 25% of investors have no it paid tax appropriately. I reckon that will take some heat out of the market, as far as property gains go. But the remainder of the market will boil on.

 

 

Nah,

 

It will only apply to Flippers, (5 year test, and not family home)

 

In reality having to pay 33% (maybe 39%) on a couple of hundred grand in profit is not really going to deter this small subset of people.

 

OTOH a mate who was considering selling said nah not selling now coz of the brightline tax - so could that in a way remove stock for sale. probably not coz you are either renting or owning so if there isn't enough houses there isn't enough houses

Batman:

 

OTOH a mate who was considering selling said nah not selling now coz of the brightline tax - so could that in a way remove stock for sale. probably not coz you are either renting or owning so if there isn't enough houses there isn't enough houses

 

If he lives in one and now wont sell, makes no difference, its still 1 person to 1 home. If he rents it, sells then its still rented same thing.

If we are short of houses, and these deals are just changing names on titles it makes no difference.

Deposit levels, interest rates, printing money, these things don't address the issue, we need to build x number of houses so that demand is near supply

Seems to me the fundamental issue is supply side, which really needs fixing - probably through some regulatory reform, and a massive building scheme.

Any demand side tweaks are going to be short term, perhaps to buy time to fix the supply side, or reduce potential damage/downsides, or take some heat out for current buyers. We should still pursue these. Certainly if housing is going to be an investment then it should be appropriately taxed as any other investment or business is (or should be).

But I'm no expert.

Ah well, guess I'm screwed for the moment, barring my parents helping me out - which I don't feel they should have to, but it's not like there's going to be a flood of houses coming onto the market tomorrow, and I can't afford to wait forever for a price drop that might never happen.

kingdragonfly: Newshub.co.nz: 'Every politician is scared' of house prices falling - Don Brash

Former Reserve Bank Governor Don Brash has defended the Reserve Bank's cheap lending programme, despite its effect on house prices, saying he'd do the same thing if he was still in charge.

House prices have skyrocketed in the past year, despite the recession, with some blaming the Reserve Bank's refusal to limit its cheap lending to productive investments. It's loaning out billions to banks at record-low interest rates to stimulate the economy, but despite loan-to-value restrictions it's expected much of it will simply be poured into the housing market.
...

What they should have done is regulate the rises. Which they could have done by including it in the inflation figures. For the last decade at least, NZs wealth has been largely made from buying and selling houses to one another, and the paper value of these houses. Then people use their house as a bank to borrow even more money for other things. 

But a house is only worth as much as someone will buy it for. I think we do forget about history, and back in 80's and 90's it could actually be difficult to sell a home and they were obviously a lot cheaper as a ratio with earnings too. It is largely low interest rates that have caused this problem in more recent time. But they could regulate the minimum interest rates that banks can lend out at when it comes to houses. 

Until the goverenmtn declare a housing emergency, nothing will happen. here will be some lip service and minor tinkering, such as LVRs etc, but that won't change much, when there is teh demand of houses, which is due to a a range of factors, in addition to the need for housing. Too many people playing real-life monopoly, at the expense of people who just want a house to live in. 

I do know a building company in my area who are now building reasonably low spec basic houses in a small subdivision, and now looking for long term good quality tenants, rather than selling them. They see the money is in their longer terms capital gain, and the tenants are just for maintaining it. But many people that are forced to rent, would prefer to buy if they could.

quickymart:

 

Ah well, guess I'm screwed for the moment, barring my parents helping me out - which I don't feel they should have to, but it's not like there's going to be a flood of houses coming onto the market tomorrow, and I can't afford to wait forever for a price drop that might never happen.

 

I was listening to one of NZs property experts on the radio at the weekend, and he did mention parents helping out children. But he also said that these parents maybe taking out mortgages on their own home, which is essentially using their parent  home as a bank, to generate the deposit. I would have thought this was very risky for banks to do this, if property prices drop. Also the parents could be at risk of losing their own home. Also could cause problems if they need to take out a reverse mortgage for some reason. 

I remember one reason for the deposit for first home buyers, was that it showed that the first home buyer was able to save. Infact I recall property experts saying that if people can't put together and save for a deposit, then they should wait until they are able to do this. This attitude from property experts seems to have changed in recent years, perhaps because it would take too long to save for a deposit these days, due to the high prices.  It does seem people want things now, rather than waiting and saving. But if you wait in the current environment, you could end up going backwards. It really isn't a good situation for NZ, and it is largely driven by greed.

Heard quite a few people overseas say that NZs housing market and the attitude and greed of people is obscene. 

antonknee:

 

Seems to me the fundamental issue is supply side, which really needs fixing - probably through some regulatory reform, and a massive building scheme.

 

Any demand side tweaks are going to be short term, perhaps to buy time to fix the supply side, or reduce potential damage/downsides, or take some heat out for current buyers. We should still pursue these. Certainly if housing is going to be an investment then it should be appropriately taxed as any other investment or business is (or should be).

 

But I'm no expert.

 

The problem is the low interest rates at the moment. Also all the empty ghost homes. Someone told me today that someone they know build a new house on their back section and is just leaving it empty. Not intention of renting it out.

I also designed a house for my brother about 3 years  ago. The cost to build and land was about 700k. It was quite a low cost house on a sqm rate, as it was about 260sqm.  He moved town and sold it and made about 180k from it. Someone purchased it, and it was left empty for over 2 years. They have recently sold it, and they made another 200k on it, was which was  pure capital gain. At least there is now someone living in it, although I think it may only being used as a second house during the weekend.

tdgeek:

 

mattwnz:

Urban intensification can cause major problems when the infrastructure , eg roading, was never designed for it. Wellington is a prime example. Congested and heaps of money needing to be spent catching up on failing infrastructure.

 

Agree with that. A better idea is intensification but in new subdivisions. Do Councils/NZTA manage their roading plans based on new subdivisions? I suspect that and population growth is where they do when they have to, i.e. when its a problem, rather than catering for roading at the same time new subdivisions are planned

 

I was looking at some of the kiwibuild developments, almost all are in Auckland. But many seem to be in almost rural areas quite a bit out of Auckland, and on postage stamp sections. Almost no outdoor living areas. Not sure what public transport is like either, but guessing people really need their own car. I don't think we really know how to manage more intensive developments, or where to put them. They should really be built around transport hubs. I am not sure if they have planned urban frameworks, or they let them grow organically as land is drip fed. 

But I think it is fairly obvious that the government don't want to get involved, and want the freemarket to solve the housing crisis, and they are hamstrung for the next 3 years, unless they break their promises. Looks like they will break the brightline test promise though, as they said they wouldn't be changing it. But it now looks like they maybe changing it.