Vancouver's Chinese property investors

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#1761805 11-Apr-2017 19:08

Geektastic:

Your first argument fails because you make the false connection between 'overseas investors' and the outcome, whereas in fact the outcome is not dependant on the bidder being overseas based - any bidder, even one from Bluff, son of 5th generation Kiwi, doing the same would have the same outcome.

But, we dont have buyers from Bluff bidding up the auction as they can afford it. But if you have one foreigner at each auction, thats what happens. A $500,000 property sold at $650,000 is wow, but to the foreign buyers, its nothing. For many its a good buy based on where they come from. And as they are moneyed up, its no matter.

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#1761807 11-Apr-2017 19:15

joker97: The main issue is I see it, ok better prepare for fireworks here, apologies if anyone is offended.

There are cultures where crazy hard work, perpetual sacrifices, to achieve whatever goal has been set, are competing with cultures where there is a sense of entitlement, everybody should get everything handed on a plate, praise everyone for being average, and suddenly the world is buying up all their inheritance.

It's happened in Australia, despite many measures and checks and balances.

This happened in NZ during Helen Clark, she did nothing. Kept happening during John Key, he did nothing. I know in the cook islands foreigners are not allowed to own land. You could implement this, but as long as there are two different cultures with different mentality, nothing is going to change.

Ps it's not that simple, even if there is a single culture where everyone is driven, then there will also be the same problem. But that's an issue for another setting. Right now this is my interpretation.

Fair points. The Chinese, its really important to own the house. Really important. So they work hard, have rich parents, but still work hard. But as others have said, I disagree, they are not speculators. They are just buyers. Buyers who often have moneyed up parents. The same is here for kiwis, moneyed up parents, but the foreigners arent natural. they are imported. So while thats a good thing bringing in new people, its faster than the local response to housing.

I think an option is that foreigners, with PR, must build, not buy. They often buy new or near new, so i see that as a good option. Then the new citizens add to the housing rather than stretch it.

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#1761808 11-Apr-2017 19:21

mattwnz:

joker97: The main issue is I see it, ok better prepare for fireworks here, apologies if anyone is offended.

There are cultures where crazy hard work, perpetual sacrifices, to achieve whatever goal has been set, are competing with cultures where there is a sense of entitlement, everybody should get everything handed on a plate, praise everyone for being average, and suddenly the world is buying up all their inheritance.

It's happened in Australia, despite many measures and checks and balances.

This happened in NZ during Helen Clark, she did nothing. Kept happening during John Key, he did nothing. I know in the cook islands foreigners are not allowed to own land. You could implement this, but as long as there are two different cultures with different mentality, nothing is going to change.

Ps it's not that simple, even if there is a single culture where everyone is driven, then there will also be the same problem. But that's an issue for another setting. Right now this is my interpretation.

In China you also can't buy property as a foreigner. Even in Australia, foreigners can't just buy a house in many areas, you have to build. So I am amazed that even though this problem has been going on for over a decade, nothing has been done to fix it. But I guess it makes many people feel richer.

I don't think the conversation has ever occurred, as to whether NZ wants to become this hugely populated country, with clusters of different cultures? NZs population has increased significantly over the last 20 years, and we haven't built eniugh houses to cope with this growth. Nor have we built the infrastructure. Many countries, such as Japan for example when I was living there, felt very single cultured.

Good idea.

Over popuklation, no, we need it, we are too small, but the new population needs to build their one houses. Kiwis arent developing the infratstructure.

Builders where are they? Some go broke. makes no sense.

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#1761810 11-Apr-2017 19:27

tdgeek:

The Chinese, its really important to own the house. Really important. So they work hard, have rich parents, but still work hard. But as others have said, I disagree, they are not speculators. They are just buyers. Buyers who often have moneyed up parents. The same is here for kiwis, moneyed up parents, but the foreigners arent natural. they are imported. So while thats a good thing bringing in new people, its faster than the local response to housing.

I think an option is that foreigners, with PR, must build, not buy. They often buy new or near new, so i see that as a good option. Then the new citizens add to the housing rather than stretch it.

I'm not blaming presence of certain cultures (and I disagree with anyone that does) for the housing problem. When people call certain group foreigners, that is very racist. Why?

Because most people in NZ are ex foreigners. The majority of ex foreigners come from England, south Africa, then we are now seeing new cultures coming in. An American that arrived last year, an Englishman that arrived last week, a south African who arrived 5 years ago, none of these are labelled foreigners. none. An Asian who were born in Auckland and lived here for 55 years - they get spat on.

If you want to ban cultures from coming in, the pakeha should first all pack up and go home.

But if people, be them American or Englishmen, Chinese or otherwise, who are non residents, they shouldn't be allowed to buy existing houses. This does not lower house prices as you can see in Australia, but will give you more houses by building.

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#1761812 11-Apr-2017 19:39

joker97:

tdgeek:

The Chinese, its really important to own the house. Really important. So they work hard, have rich parents, but still work hard. But as others have said, I disagree, they are not speculators. They are just buyers. Buyers who often have moneyed up parents. The same is here for kiwis, moneyed up parents, but the foreigners arent natural. they are imported. So while thats a good thing bringing in new people, its faster than the local response to housing.

I think an option is that foreigners, with PR, must build, not buy. They often buy new or near new, so i see that as a good option. Then the new citizens add to the housing rather than stretch it.

I'm not blaming presence of certain cultures (and I disagree with anyone that does) for the housing problem. When people call certain group foreigners, that is very racist. Why?

Because most people in NZ are ex foreigners. The majority of ex foreigners come from England, south Africa, then we are now seeing new cultures coming in. An American that arrived last year, an Englishman that arrived last week, a south African who arrived 5 years ago, none of these are labelled foreigners. none. An Asian who were born in Auckland and lived here for 55 years - they get spat on.

If you want to ban cultures from coming in, the pakeha should first all pack up and go home.

But if people, be them American or Englishmen, Chinese or otherwise, who are non residents, they shouldn't be allowed to buy existing houses. This does not lower house prices as you can see in Australia, but will give you more houses by building.

I use the term foreigners, its not racist. Its separating existing residents with new residents. If they have to build, that takes care of the housing infrastructure. If OZ prices still rose, thats another issue. How much would it rise if the new people can front up at auctions?

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#1761819 11-Apr-2017 19:51

I'm not sure about existing residents vs new residents. A resident is a resident. You could separate citizens from residents. Maybe indefinite resident vs finite resident at a stretch just cause the visa is slightly different but really, not much.

The other thing to understand is not every property investor, speculator is Asian. In fact i bet most are pakeha. But i don't know.

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#1761820 11-Apr-2017 20:02

joker97: I'm not sure about existing residents vs new residents. A resident is a resident. You could separate citizens from residents. Maybe indefinite resident vs finite resident at a stretch just cause the visa is slightly different but really, not much.

The other thing to understand is not every property investor, speculator is Asian. In fact i bet most are pakeha. But i don't know.

The foreigners arent speculators, they are buyers. They have been buying for ages. The low interest rates help the locals to pay more, so that is also a part of it

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#1761928 11-Apr-2017 23:30

Geektastic:

Your first argument fails because you make the false connection between 'overseas investors' and the outcome, whereas in fact the outcome is not dependant on the bidder being overseas based - any bidder, even one from Bluff, son of 5th generation Kiwi, doing the same would have the same outcome.

Fair point, But I was referring from the point of view if they left the market (regardless of why) It would have a big effect on prices. If heaps of local money suddenly appeared from Bluff (or anywhere else in NZ) and started bidding up prices. It would per capita GDP would be increasing, which would be a good thing.

Geektastic:

Also, money being spent on a mortgage is surely being spent to pay off debt?

Could have been a bit clearer, Was referring money going on housing costs - both rents and mortgages. From the point of view of the whole economy, instead of from the point of view of just 1 person. Which is not available to repay non housing debt such as hire purchase or credit card debt.

And yes high land prices are a big cause of high house prices. Although they are mostly just a symptom of stupid council rules. Either way it comes back to the laws of supply and demand. If you don't allow supply to expand to match demand. Or instead constrain demand (which in this discussion would mean passing a law stopping certain classes of buyers from buying - probably foreigners). Then of course prices will rapidly increase. Instead we have communist style rules that control how much the banks can lend to different classes of buyers. And the current government via housing NZ has become a property developer, spending heaps to give the lucky few really cheap houses. Wile everyone else has to pay heaps more. Meanwhile opposition political parties are promising heaps of government money to massively expand what housing NZ is currently doing. Sure they have framed it differently, but the end result will be the same. The lucky few will get cheap houses. While everyone else will have to pay extra due to the government caused demand adding to private sector demand.

mattwnz

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#1761934 12-Apr-2017 00:57

I think is is somewhat ironic that we are all for free trade and lack of tariffs etc, which should result in NZers being able to afford to buy cheaper goods from around the world. But as a result, we don't have any real restrictions for people offshore (eg non resident NZers) buying NZ houses, and pushing up the price. So even though we maybe able to now afford that big screen TV for our house, many can no longer afford the house to put it in! People love to refer to affordability, as to what people can afford to service as a mortgage, and as a result, houses are still affordable to many due to the low interest rates. However we have historically low interest rates, due to a demand for cheap credit, which have only fueled this housing crisis, as people can afford to borrow more. I don't really know what is going to happen with this. One expert is predicting a building crash with developer next year as interest rates rise. Even though there is still a big demand for housing.

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#1762244 12-Apr-2017 14:25

All government can do with regulation is transfer.

I know of several housing scenarios, I guess we'll either head down one of these, or have an all out melt down, negative equity and a long ass recession.

Switzerland - 40% or so of home owners, government protects renters. Those with equity are being coerced to spend up and fix up housing stock (big payments) and reap rewards in terms of steady cash flow. Strong contract law and renter rights association don't hurt.

Japan - 60% or so home owners, structurally declining population, houses depreciate and tax heavily. Basically worthless after 20yrs. You can't sell it for the buyer won't be able to get a loan from the bank. It is worthless in the bank's view. People take a mortgage out to demolish and build a building just for themselves. Highly customised and depreciated in 20yrs.

If we are to go down Switzerland's route, let's discuss renter rights. If home owners are truly wealthy individuals, let them invest in housing stock. NZ houses are shacks compared with OECD.

Or we can pull a Japan, given quality of housing stock this won't be hard. Then invest in latest technologies, build warm strong houses that will withstand climate changes that are coming.

Or we can just wait, Chinese money won't be around forever. I am hearing tourism sector already felt the chill.

Forgot to add the complimentary link

Crack shack or mansion!

You can tell how old that site is, flash and all.

mattwnz

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#1762308 12-Apr-2017 16:39

NZ is in a very difficult situation with housing, which has effectively created two separate classes of people. The government has allowed this to get worse, as National called this a housing crisis when Labour were still in power. Nearly a decade later, they don't call it a housing crisis, even though everyone else does, and even though it has only gotten worse.

I don't think any of labours new policies will fix the problems with the housing crisis, they are simply a band aid and potentially could create ghettos. National looks to have trumped them on those polices anyway. The real solutions will hurt people. So what the government appear to be hoping for is that the problem will inflate away over time, and they will just put a few policies in place to mop up the people at the bottom. They aren't going to want to alienate their voter bases, as so many people have self interests in housing in NZ. But I think that the cheap overseas money is going to dry up(if it hasn't already), and we may see a building bust next year as a result.

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#1762372 12-Apr-2017 18:12

alliao:

All government can do with regulation is transfer.

I know of several housing scenarios, I guess we'll either head down one of these, or have an all out melt down, negative equity and a long ass recession.

Switzerland - 40% or so of home owners, government protects renters. Those with equity are being coerced to spend up and fix up housing stock (big payments) and reap rewards in terms of steady cash flow. Strong contract law and renter rights association don't hurt.

Japan - 60% or so home owners, structurally declining population, houses depreciate and tax heavily. Basically worthless after 20yrs. You can't sell it for the buyer won't be able to get a loan from the bank. It is worthless in the bank's view. People take a mortgage out to demolish and build a building just for themselves. Highly customised and depreciated in 20yrs.

If we are to go down Switzerland's route, let's discuss renter rights. If home owners are truly wealthy individuals, let them invest in housing stock. NZ houses are shacks compared with OECD.

Or we can pull a Japan, given quality of housing stock this won't be hard. Then invest in latest technologies, build warm strong houses that will withstand climate changes that are coming.

Or we can just wait, Chinese money won't be around forever. I am hearing tourism sector already felt the chill.

Forgot to add the complimentary link

Crack shack or mansion!

You can tell how old that site is, flash and all.

I would think that increasing tenant's rights (and obligations) so that it becomes normal for an agreement to last at least a year and compulsory for new landlords to honour existing tenancies, as well as sale no longer being grounds for termination, would be an improvement.

If you want good landlords though, you'll also need to do something to reward them - with higher rents or better tax benefits or something, as of course they will have to have greater obligations too.

tdgeek

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#1763374 12-Apr-2017 19:41

Geektastic:

alliao:

All government can do with regulation is transfer.

I know of several housing scenarios, I guess we'll either head down one of these, or have an all out melt down, negative equity and a long ass recession.

Switzerland - 40% or so of home owners, government protects renters. Those with equity are being coerced to spend up and fix up housing stock (big payments) and reap rewards in terms of steady cash flow. Strong contract law and renter rights association don't hurt.

Japan - 60% or so home owners, structurally declining population, houses depreciate and tax heavily. Basically worthless after 20yrs. You can't sell it for the buyer won't be able to get a loan from the bank. It is worthless in the bank's view. People take a mortgage out to demolish and build a building just for themselves. Highly customised and depreciated in 20yrs.

If we are to go down Switzerland's route, let's discuss renter rights. If home owners are truly wealthy individuals, let them invest in housing stock. NZ houses are shacks compared with OECD.

Or we can pull a Japan, given quality of housing stock this won't be hard. Then invest in latest technologies, build warm strong houses that will withstand climate changes that are coming.

Or we can just wait, Chinese money won't be around forever. I am hearing tourism sector already felt the chill.

Forgot to add the complimentary link

Crack shack or mansion!

You can tell how old that site is, flash and all.

I would think that increasing tenant's rights (and obligations) so that it becomes normal for an agreement to last at least a year and compulsory for new landlords to honour existing tenancies, as well as sale no longer being grounds for termination, would be an improvement.

If you want good landlords though, you'll also need to do something to reward them - with higher rents or better tax benefits or something, as of course they will have to have greater obligations too.

If there was better protection for landlords to combat against bad payers and leaving a tip, that would encourage landlords to invest. Otherwise, never again.

mattwnz

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#1763379 12-Apr-2017 19:46

Also P contamination is a huge risk for anyone renting out a house. Even someone just using it in a house can create a positive test result.

tdgeek

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#1763381 12-Apr-2017 19:47

mattwnz:

NZ is in a very difficult situation with housing, which has effectively created two separate classes of people. The government has allowed this to get worse, as National called this a housing crisis when Labour were still in power. Nearly a decade later, they don't call it a housing crisis, even though everyone else does, and even though it has only gotten worse.

I don't think any of labours new policies will fix the problems with the housing crisis, they are simply a band aid and potentially could create ghettos. National looks to have trumped them on those polices anyway. The real solutions will hurt people. So what the government appear to be hoping for is that the problem will inflate away over time, and they will just put a few policies in place to mop up the people at the bottom. They aren't going to want to alienate their voter bases, as so many people have self interests in housing in NZ. But I think that the cheap overseas money is going to dry up(if it hasn't already), and we may see a building bust next year as a result.

Its a hard one. While on the one hand, free country, supply and demand, or regulate everything.

What I cant get is builders go broke. Yet there is a housing crisis, so they should be on a high.

And no one is on the streets, so I need a clarification on a housing crisis as when I read we bring in x number of people every year and dont build enough houses, where are all these new people sleeping? Is it a housing crisis or an owner crisis?

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