Housing prices....

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Linuxluver

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#204249 23-Sep-2016 10:42

Here is a thought experiment.

House prices are very high because rates and interest rates are far too low.

Here (link below) is a beautiful house in the inner suburb of St. Johns in Auckland and it only costs $160,000.

Incredible.....until you see it's on leased land and the annual rent is currently (until 2029) just under $21,000.

If that wasn't the case, this house would be worth well over a million.

There's a possible answer to high house prices right there: increase the rates. (Ignoring leased land now, just looking at annual outlays).

The money raised in rates would go toward awesome infrastructure and better services, creating many more jobs.....and houses would be cheaper to buy (but cost more to support each year).

Which is better? Higher property rates or higher interest rates?

I'd much rather pay property rates to the Council for real benefits like better public transport and well-maintained public spaces....than pay interest to a bank and get......absolutely nothing for it. It all goes to shareholders....and they usually don't live in NZ.

Example here

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#1639276 23-Sep-2016 10:50

There are two massive flaws in your argument:

1 - you haven't established causality between high running cost and low price. The low price is due to the fact that you're buying an asset that has a limited life; when the lease expires, it's worth nothing

2 - Let's ignore above and assume that higher rates would cause a property price crash. So, you're asking people to vote for a poilicy that would destroy their life savings, while at the same time vastly increase their outgoings. Or are you suggesting that the banks or taxpayers should take the hit?

Once again, a suggestion that is a really good way of spending other people's money for dubious outcomes. Margaret Thatcher had a good quote about that

MikeB4

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#1639285 23-Sep-2016 10:57

Local bodies are profoundly useless in New Zealand, giving them more money waste is wrong on many levels.

MikeB4

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#1639286 23-Sep-2016 10:58

The answers to house price worries is simple, the bored press needs to find a new toy to play with.

Batman

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#1639296 23-Sep-2016 11:22

For the sixth thread in a row over 10 years I'm going to say this: it ain't coming down....

MikeB4

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#1639300 23-Sep-2016 11:27

joker97: For the sixth thread in a row over 10 years I'm going to say this: it ain't coming down....

yep, unless there is a general financial disaster in NZ.

tchart

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#1639307 23-Sep-2016 11:33

Linuxluver:

increase the rates.

I'll be sure to bring that up when you are retired and on limited income.

Fiddling with rates wont solve anything. In fact central government needs to reign in local government spending as rates need to come down - ie they cant just keep putting them up year after year especially when they are "pegged" against land and capital improvement values.

frankv

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#1639316 23-Sep-2016 11:48

Rates should pay the actual cost for infrastructure and services. If, as now, the rest of NZ subsidises Auckland for roading, power, etc, etc it only encourages greater problems in Auckland.

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cynnicallemon

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#1639317 23-Sep-2016 11:48

tchart:

Fiddling with rates wont solve anything. In fact central government needs to reign in local government spending as rates need to come down - ie they cant just keep putting them up year after year especially when they are "pegged" against land and capital improvement values.

Who reigns in the central government spending?

I seem to remember our dear leader spending $25M+ on some sort of flag debate.

shk292

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#1639341 23-Sep-2016 12:09

cynnicallemon:

Who reigns in the central government spending?

I seem to remember our dear leader spending $25M+ on some sort of flag debate.

The electorate does, every three years

In the case you cite above, this formed part of the pre-election manifesto of the National Party, so when they won the democratic election, they were committed to hold the referenda that they had promised. Personally I think that keeping to this commitment was the right thing to do. You may prefer it if parties rip up their manifesto immediately on forming a government...

cynnicallemon

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#1639346 23-Sep-2016 12:20

shk292:

You may prefer it if parties rip up their manifesto immediately on forming a government...

I prefer openness and clarity but it seems a trait of all elected parties to not fully deliver on what they promise.

cynnicallemon

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#1639355 23-Sep-2016 12:27

MikeB4:

joker97: For the sixth thread in a row over 10 years I'm going to say this: it ain't coming down....

yep, unless there is a general financial disaster in NZ.

Rachel Hunter, that well known economist, gave the best forecast on that matter at the end of this video,

https://www.youtube.com/watch?v=7EweM_ILVt4

dafman

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#1639357 23-Sep-2016 12:36

MikeB4:

Local bodies are profoundly useless in New Zealand, giving them more money waste is wrong on many levels.

IYHO

dickytim

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#1639358 23-Sep-2016 12:37

Linuxluver:

Here is a thought experiment.

House prices are very high because rates and interest rates are far too low.

Here (link below) is a beautiful house in the inner suburb of St. Johns in Auckland and it only costs $160,000.

Incredible.....until you see it's on leased land and the annual rent is currently (until 2029) just under $21,000.

If that wasn't the case, this house would be worth well over a million.

There's a possible answer to high house prices right there: increase the rates. (Ignoring leased land now, just looking at annual outlays).

The money raised in rates would go toward awesome infrastructure and better services, creating many more jobs.....and houses would be cheaper to buy (but cost more to support each year).

Which is better? Higher property rates or higher interest rates?

I'd much rather pay property rates to the Council for real benefits like better public transport and well-maintained public spaces....than pay interest to a bank and get......absolutely nothing for it. It all goes to shareholders....and they usually don't live in NZ.

Example: http://rwmissionbay.co.nz/auckland-city/st-johns/1536705/?utm_source=ActivePipe&utm_medium=Email&utm_term=38A%2520Simkin%2520Avenue%2520St%2520Johns&utm_campaign=OFI-Reminder

And in one fowl swoop send a millions of people broke.

darylblake

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#1639363 23-Sep-2016 12:49

Actually gutting the layers of nonsense thats going on in the council would start to make great in-roads. We have so many people moving to Auckland, and we cant build homes because there is so much red tape. Developers are walking away from projects because they council make it too hard. The council are MAKING developers add infrastructure at their expense and this is causing a lot of them to go an invest/develop somewhere else.

That statement about rates is arguable. Increasing rates to fund this infrastructure would help the situation, however we have too many muppet mayors who want to blow it on train sets.

dickytim

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#1639371 23-Sep-2016 12:55

darylblake:

Actually gutting the layers of nonsense thats going on in the council would start to make great in-roads. We have so many people moving to Auckland, and we cant build homes because there is so much red tape. Developers are walking away from projects because they council make it too hard. The council are MAKING developers add infrastructure at their expense and this is causing a lot of them to go an invest/develop somewhere else.

That statement about rates is arguable. Increasing rates to fund this infrastructure would help the situation, however we have too many muppet mayors who want to blow it on train sets.

Infrastructure needs to be user pays either via increased fuel costs or toll roads.

The train set as you put it needs to be improved and some serious money spent on it, in fact a fast rail from Hamilton/ Out laying to the Auckland CBD? Yes please.

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