Real estate, post level 4

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#2675222 16-Mar-2021 07:45

GV27:

So me in my first home paying a massive mortgage now has to pay an additional levy so someone else can get theirs easier? No deal.

There is a more targeted but heavy-handed approach: A structured reset of housing through demand measures (DTI, CGT, stamp duties/rates that scale by number of properties etc) combined with generous owner-occupier funding - possibly even at 0% from the State - to help owner occupiers out of inevitable negative equity. That way we can get house prices back to sane levels (think 4x incomes instead of 11x) and give people a chance at recovering from what will happen when we unwind them.

Unless we do it on our terms, something will happen externally and we won't have a choice. Anything else is tinkering around the edges and as long as credit is cheap and supply is limited, prices will go one way.

Nope. You have your house. If you were buying as a FHB lets make it easier by avoiding the supply and demand market. DTI, CGT stamp duties are just tinkering, unless you want to have stamp duty put on the house you bought? Add taxes you reduce demand, goodbye buyers. Make it easier to buy you add demand. The only approach that will work is building more homes. You can sway people from buying to building, that a) reduce demand and prices for existing, and (b) it builds more homes.

GV27

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#2675226 16-Mar-2021 08:05

tdgeek:

Nope. You have your house. If you were buying as a FHB lets make it easier by avoiding the supply and demand market. DTI, CGT stamp duties are just tinkering, unless you want to have stamp duty put on the house you bought? Add taxes you reduce demand, goodbye buyers. Make it easier to buy you add demand. The only approach that will work is building more homes. You can sway people from buying to building, that a) reduce demand and prices for existing, and (b) it builds more homes.

The problem is buyers are not just owner-occupiers - they're investors leveraging off existing equity. FHBs can't do that, their deposit is in Kiwisaver and cash. It's not a level playing field.

I get that we need to build more, but building more $950K 100sqm 3 bedroom homes can't be the answer. People paying at least 40% of their income for 30 years is going to ruin us in the medium term. We have to get prices back down to where they were fifteen years ago before an external shock does it for us. Building more homes takes years and years. It will be too late by then.

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#2675238 16-Mar-2021 08:38

GV27:

The problem is buyers are not just owner-occupiers - they're investors leveraging off existing equity. FHBs can't do that, their deposit is in Kiwisaver and cash. It's not a level playing field.

I get that we need to build more, but building more $950K 100sqm 3 bedroom homes can't be the answer. People paying at least 40% of their income for 30 years is going to ruin us in the medium term. We have to get prices back down to where they were fifteen years ago before an external shock does it for us. Building more homes takes years and years. It will be too late by then.

How can you possibly reduce prices to what they were 15 years ago?? Investors I guess you can ban them, then you have no landlords, and many people can't own a house or dont want to. Pushing builds reduces demand, that will ease prices. And if FHB's were basically locked into building, then the existing home market will just be existing home owners swapping houses which is basically what we have now, they can stay in that sandpit, doesnt worry FHB's. And when that sandpits prices are too high compared to new builds, the prices would stabilise

If a new build if 950k for 100sq m, then move

You don't need to wait decades to build houses, you can remove FHB from the market tomorrow.

GV27

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#2675271 16-Mar-2021 09:07

tdgeek:

If a new build if 950k for 100sq m, then move

That is what a new build in Auckland can cost. This isn't even Hobsonville Pt or a flash suburb - this is Massey. It's an hour from the CBD in peak traffic and there's no busway or bus lanes anywhere nearby.

https://westhills.co.nz/homes-for-sale/387-lot-167-16-westgate-drive-extension

But I love the attitude - "just move". Ignoring huge structural issues because it was easier to tell people to 'lower their expectations, move further out' is how this crisis managed to drag on for so long and how we ended up where we are now.

And yes, prices would have to go back to where they were 15 years ago to be considered 'affordable'. That it's such a shocking idea shows you how used we have become to 'severely unaffordable' prices. Do we want to fix the problem, or do we want to wait years and years for supply to come online that may or may not ever happen?

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#2675272 16-Mar-2021 09:11

from reading this it's pretty clear the house price rise is linked to hosting the America's cup https://www.stuff.co.nz/business/property/94384848/what-will-the-americas-cup-in-nz-mean-for-your-house-price

/joke

big cities are like new york, etc. expensive.

but you can't build more than 1 house in a 10 hectare section in the rural. someone needs to build more satellite towns to get the housing numbers up.

someone linked on the Covid thread there are 1 million overseas NZers wanting to come "home" due to covid ... that's going to really help the housing stock

GV27

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#2675294 16-Mar-2021 09:59

Batman:

someone needs to build more satellite towns to get the housing numbers up.

Satellite to Auckland? We've been doing that for decades, then filling in the bits inbetween. It doesn't work when you won't spend money on rapid transit and we don't do that here. Everyone just drives and the road network grinds to a halt.

The inner suburbs, that have the trains, frequent buses etc need to stop hiding behind single-house character protection zones and become the parts we intensify before we even think about the fringes, or else they should lose their gold plated services to areas that are actually building houses en masse.

tdgeek

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#2675314 16-Mar-2021 10:06

GV27:

That is what a new build in Auckland can cost. This isn't even Hobsonville Pt or a flash suburb - this is Massey. It's an hour from the CBD in peak traffic and there's no busway or bus lanes anywhere nearby.

https://westhills.co.nz/homes-for-sale/387-lot-167-16-westgate-drive-extension

But I love the attitude - "just move". Ignoring huge structural issues because it was easier to tell people to 'lower their expectations, move further out' is how this crisis managed to drag on for so long and how we ended up where we are now.

And yes, prices would have to go back to where they were 15 years ago to be considered 'affordable'. That it's such a shocking idea shows you how used we have become to 'severely unaffordable' prices. Do we want to fix the problem, or do we want to wait years and years for supply to come online that may or may not ever happen?

How is moving away adding to the crisis? That's expected, same as those who cant build so buy or cant buy so buy a DIY. If a Massey new build is 950k for 100 sqm how much is an existing house there of 100sqm?

House prices go back to 2005, without looking Id say they drop 50%? That would be interesting

Build is the only way. No, we cannot build 40,000 houses nest week. But we could remove all FHB's from the current housing market next week, literally. If a build was a no brainer, that will also attract many others.

In support of your 2005 price fix, that wont affect many homeowners apart from the sadness of losing paper money. But those that bought in the last 5+ years are all but screwed. You cant really do that. But you can heavily limit the demand today. That in itself will level off prices and they will go down

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Batman

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#2675317 16-Mar-2021 10:08

dafman:

It’s a bubble, pure and simple.

they've been saying that since 2003. unfortunately many people believed it and are still stuck without a house.

not saying it's not, just that economists are worse than the weatherman

antonknee

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#2675318 16-Mar-2021 10:08

The answer is to intensify and build more houses. Lowrise apartments, terraced homes, duplexes - all very very common in big cities overseas but practically non-existent in NZ/Auckland. And the answer is not building these in areas like Westgate/Redhills that are miles away - the answer is building these in the villa belt and leafy suburbs, which are close to town or close to rapid transit.

At the same time we can tinker with demand measures and taxing things, which would at least give us some money to spend on something else. But ultimately supply is the real answer IMO.

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#2675319 16-Mar-2021 10:11

GV27:

And yes, prices would have to go back to where they were 15 years ago to be considered 'affordable'. That it's such a shocking idea shows you how used we have become to 'severely unaffordable' prices. Do we want to fix the problem, or do we want to wait years and years for supply to come online that may or may not ever happen?

i bet every single person out there tasked to "fix" the problem in the last 15 years has had a vested interest in not actually fixing the problem. but i don't know that, just guessing.

tdgeek

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#2675321 16-Mar-2021 10:11

GV27:

Do we want to fix the problem, or do we want to wait years and years for supply to come online that may or may not ever happen?

We dont want to fix the problem as Kiwis buy not build. Its not the Governments role to build houses, so they dont, apart fprm post WW2 and post the Great Depression. Citizens need to build houses but we won't, thats the simple fact. We need to change that mindset

tdgeek

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#2675323 16-Mar-2021 10:18

Batman:

GV27:

And yes, prices would have to go back to where they were 15 years ago to be considered 'affordable'. That it's such a shocking idea shows you how used we have become to 'severely unaffordable' prices. Do we want to fix the problem, or do we want to wait years and years for supply to come online that may or may not ever happen?

i bet every single person out there tasked to "fix" the problem in the last 15 years has had a vested interest in not actually fixing the problem. but i don't know that, just guessing.

Agree. You are taking wealth away that can be used to buy stuff, feed the economy. As there is no law to regulate house prices, and you cant build 40,000 houses next week, don't fiddle. Make builds a no brainer, the prices will ease gradually causing no upsets. But you cant make a 900k house today, 500k tomorrow, but you can manipulate demand to make that existing house maybe 770k in a couple of years. Instead of 80 turning up at an open home you get 18.

quickymart

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#2677014 19-Mar-2021 09:45

Interesting read (and podcast) from Bernard Hickey about how we got here and what could be next to fix it. I had no idea house prices dropped 10% during the GFC, either.

https://thespinoff.co.nz/business/19-03-2021/bernard-hickeys-when-the-facts-change-a-cacophony-of-magical-thinking-on-housing/

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#2677018 19-Mar-2021 09:53

quickymart:

Interesting read (and podcast) from Bernard Hickey about how we got here and what could be next to fix it. I had no idea house prices dropped 10% during the GFC, either.

https://thespinoff.co.nz/business/19-03-2021/bernard-hickeys-when-the-facts-change-a-cacophony-of-magical-thinking-on-housing/

A good read, looking at the promises and failures of all Governments

quickymart

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#2677022 19-Mar-2021 09:58

I thought so too, kind of like a why house prices in NZ are so high for dummies.

I think you said supply was the biggest thing, and I agree with you - especially the bit he talks about the big apartments in Sydney and Melbourne, which sounds like that helped a lot. Just a pity governments appear to be too scared to act on it - I can see homeowners jumping up and down if their house drops in value, but at the same time that does nothing for first home buyers.

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