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  Reply # 1639456 23-Sep-2016 14:55
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I'll say it again....build more houses and build them faster.

 

In the longer term, transition to an economy where $100,000 pa is not regarded as being "rich". It isn't. In fact, it is about the starting salary for a law graduate in London at a big firm. 

 

 






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  Reply # 1639460 23-Sep-2016 14:57
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ScuL:

 

gzt: Gareth Morgan made a very similar proposal recently: http://www.interest.co.nz/opinion/83523/gareth-morgan-looks-tax-again-and-concludes-we-can’t-get-rich-nation-selling-houses (also in his blog and NBR)

 

 

 

I can't agree more with this man. Kiwi's seem to be obsessed with owning property (and lots of it). It's almost as if eggs can only fit in one basket and others are completely out of scope.

 

It makes much more sense to spread finances across different assets, stocks, whatever floats your boat. If the property market were to crash this will cripple many Kiwi's as a consequence.

 

 

 

Saying the house prices will never come down is a joke too. History has proven that although house prices tend to increase in line with inflation they can most certainly dip in times of distress.

 

Yes there is currently an extreme demand for housing (particularly in Auckland). Demand is likely to remain strong however the amount of properties on the market can increase dramatically by changes in the economy. You could think of external factors such as an international armed conflict (war), shortage of minerals/fossil fuels, international exchange rates, stock exchange rates, anything that may impact the interest rate or the currency rates.

 

If the interest rate were to jump back up to 8% or more than that, all of a sudden you have hordes of people who have bought overpriced homes for $1M ++ and will be unable to continue to finance a mortgage that already put maximum pressure on their financial situation prior to the hike. You will see forced foreclosures and the sudden increase of stock due to bankruptcy will bring down the price levels. Similar things are happening in Canada currently where governments took action against foreign investors. It's also not impossible that similar measures may occur in NZ depending on what happens in the next elections.

 

As with most global events NZ follows several years later. My best bet is that the current situation remains unchanged for at least 2 more years, but something is bound to happen in the next decade.

 

 

 

 

 

 

Much of the obsession is driven by the fact that property gains are the only tax free method of saving money in NZ. Unlike most places with which we might compare ourselves with, we do not treat pensions (for example) as tax free saving. This lack of alternatives (such as the US 401K and the UK ISA & Pension Funds) is what drives spare money into property.






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  Reply # 1639471 23-Sep-2016 15:10
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frankv:

 

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.

 

 

 

 

 

 

How do you figure that?

 

The IRD's latest published stats on revenue shows the Auckland region accounting for 33% of all tax entities (individuals, businesses, etc.) and 35% of income

 

NZ Ministry of Transport shows almost 11,000km of State Highways in NZ, but only 303km in Auckland.  (That's 2.8%)

 

The remainder of roading in Auckland is funded through local rates revenue..

 

 

 

Similarly, with respect to power consumption...  MBIE published a paper on TransPower's Energy data modelling.  Auckland peak winter demand (actual) in 2015 was around 1800MW compared to a National Winter peak of >6000MW.  (that's 30% - again well under their 35% contribution to Central Government Revenue)

 

I think you'll find that it is Auckland that is subsidising the rest of NZ!


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  Reply # 1639476 23-Sep-2016 15:15
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trig42:

 

 

 

Do you realise how ridiculous that statement is?

 

If we make the rail users pay for the tunnels etc, Rail will become so expensive no-one will use it.

 

Where will those 60,000 people a day go? That's right, the roads, one person per car for the most part. So, as you say, user pays, we build a sh*tload more motorways, and toll the heck out of them (because, user pays right??). It's a good way to reduce House prices though.

 

 

I think you misunderstood me.  I wasn't advocating for user pays.  I was pointing out that this model is not appropriate for transport.  Although with the advent of driverclass cars, who is to say that rail is the right answer?


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  Reply # 1639509 23-Sep-2016 16:16
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Vancouver, BC now taxes absentee property owners. Other cities are considering following suit. This has influenced a rapid turn-around...

 

http://vancouversun.com/business/real-estate/pundits-gauge-plunge-in-foreign-buyers-in-metro-vancouver-real-estate-market

 

House sales are only one part of the problem though. Vancouver, for example, cannot expand. It's bordered by water on three sides and has a narrow band on the fourth. So, infill housing is the big thing there. Most areas have lane ways behind the houses providing access to garages at the back of properties. Garages are being converted to "coach houses" and "laneway houses" and rented out. Single family homes with basements are legally able to convert the basements into apartments. For people out to make money, owning property in Vancouver is still very attractive. A friend has just rented a laneway house. Immigrant landlord that spent around two million on her home. She now has two laneway houses and eight basement studio apartments in her home. Gross rental income on this is $8,000 a week. Eleven family/couple groupings living on one residential block of land. I foresee slums in Vancouver's future BUT it is getting people housed. For now. 

 

I'm not suggesting NZ should follow that kind of idea (the tax is a good idea though). However, NZ should be looking at utilizing land better. I'd be happy not seeing any further greenfield development. 

 

 


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  Reply # 1639516 23-Sep-2016 16:23
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Geektastic:

 

I'll say it again....build more houses and build them faster.

 

In the longer term, transition to an economy where $100,000 pa is not regarded as being "rich". It isn't. In fact, it is about the starting salary for a law graduate in London at a big firm. 

 

 

 

 

 

 

If rushed shortcuts get taken, and  you end up with horrible poorly planned areas and ghettos, and potentially leaky buildings.So it can be false economy to do things quicker. There are still buildings with weather tightness issues being built today. I know of a house near me that was only built a couple of years ago that has to be reroofed and have it's flashings replaced. 

 

 

 

$100,000 pa as a small business is very difficult to earn, when the cost of things is dropping in realterms, and we have almost no inflation. Yet houses have huge inflation, but are not used to officially calculate inflation. 

 

 

 

Comparing salaries in UK with NZ is not really relevant, as the amount of taxes paid and living costs vary too much. In NZ our taxes are are also pretty low. Also exchange rates fluctuate too much. The UK pound is very weak at the moment, so 100k uk, is only worth around $170k NZ dollars. Where it was only a decade or 2 ago when 100k uk, was over $300k NZ. Houses out of London though seem to be good value compared to NZ prices. Watching a recent location program I was surprised at how relatively good value their houses were over there compared to here, even though the design tastes over there are horrible.

 

The thing is that many NZers who were living in UK, are now moving back to NZ, which is only pushing prices of houses up even more, as they can afford to outbid local buyers. The only good thing for NZ first home buyers, is that the NZ dollar is so strong, so UK buyers have less buying power, and are bring in less money into NZ. But if the reserve bank had it's way, they would like to see the NZ dollar a lot weaker, which will not be good for first home buyers.


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  Reply # 1639522 23-Sep-2016 16:33
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Elpie:

 

 

 

Vancouver, BC now taxes absentee property owners. Other cities are considering following suit. This has influenced a rapid turn-around...

 

http://vancouversun.com/business/real-estate/pundits-gauge-plunge-in-foreign-buyers-in-metro-vancouver-real-estate-market

 

House sales are only one part of the problem though. Vancouver, for example, cannot expand. It's bordered by water on three sides and has a narrow band on the fourth. So, infill housing is the big thing there. Most areas have lane ways behind the houses providing access to garages at the back of properties. Garages are being converted to "coach houses" and "laneway houses" and rented out. Single family homes with basements are legally able to convert the basements into apartments. For people out to make money, owning property in Vancouver is still very attractive. A friend has just rented a laneway house. Immigrant landlord that spent around two million on her home. She now has two laneway houses and eight basement studio apartments in her home. Gross rental income on this is $8,000 a week. Eleven family/couple groupings living on one residential block of land. I foresee slums in Vancouver's future BUT it is getting people housed. For now. 

 

I'm not suggesting NZ should follow that kind of idea (the tax is a good idea though). However, NZ should be looking at utilizing land better. I'd be happy not seeing any further greenfield development. 

 

 

 

 

 

 

NZ should certainly be looking at that as an example if they are serious about solving the problem. WHen 50% of house buyers in a region are investors,  you know the is a serious problem. First home buyers can't really compete against a buyers frenzy that is being fueled by investors.


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  Reply # 1639526 23-Sep-2016 16:41
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Linuxluver:

 

tchart:

 

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.

 

 

Council's have an established process for handling that situation. In Wellington it allowed people on superannuation to remain in multi-million dollar homes up on Mt Victoria they had owned for decades. These cases are easy enough to handle....and they are handled well unless the Council is run by a some very un-nice people. Voters tend to have some control over that. 

 

 

 

 

Not sure if they do. An example is that a couple who did up their home over many years, and the home is now so valuable compared to other houses in the area, that the rates on it are 8k a year. If one dies, they probably won't be able to afford to live in it. Then you get an average house which is servicing 8 working adults, who only pay 2k a year in rates. The problem is rates have become a wealth tax, rather than taxing on usage. Councils are also well overstepping what they are supposed to be doing. eg. Aucklands are looking at banning plastic bags, and Wellingtons is imposing microchipping on cats, and one Wellington council even decided to vote on banning the TPPA, so that council is now a TPPA free city (not) !   All these are national issues, not local council issues.




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  Reply # 1639528 23-Sep-2016 16:45
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Geektastic:

 

I'll say it again....build more houses and build them faster.

 

In the longer term, transition to an economy where $100,000 pa is not regarded as being "rich". It isn't. In fact, it is about the starting salary for a law graduate in London at a big firm. 

 



These could be potentially very disruptive. I looked at a show home yesterday. It looks even better in real life. Some caveats around some internal cosmetic stuff.....but minor in the big picture. They come with all doors, (double-glazed) windows, LED lighting, plumbing, gas connections, power box, kitchen joinery and bathroom joinery (and toilet and shower / bath) already installed and ready to go.

They can drop a 4 bedroom home on your site ($215,000+GST) and assemble it in four days. In additions, you pay for the foundations, services, the crane used to place them, and the four days worth of work to finish the job. Well under $300K. 

This is probably where I'm headed when we build our house this coming year. I like the build and the quality. They already meet all NZ standards....and the price is 1/2 what I'd pay locally....for a light, solid, eco-designed home. 

I once suggested to a tradie that his very flash, gleeming $60,000 ute might make people wonder if he was charging too much. He didn't understand what I was getting at. He insisted they had cut costs to the bone........I'm looking at his ute. 






____________________________________________________
I'm on a high fibre diet. 

 

High fibre diet


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  Reply # 1639641 23-Sep-2016 22:08
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At $110/hour labour rate for renovating bathroom, I can totally understand how one could afford a new $60k ute.

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  Reply # 1639647 23-Sep-2016 22:24
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So a tradie can't have nice things?
IT folk better return their toys as well.




Mike
Retired IT Manager. 
The views stated in my posts are my personal views and not that of any other organisation.

 

 Mac user, Windows curser, Chrome OS desired.

 

The great divide is the lies from both sides.

 

 


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  Reply # 1639653 23-Sep-2016 23:10
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Linuxluver:

NZ is capital poor. As soon as we create anything of value, we hock it off to a foreign buyer who then charges us more to use it to help pay for what they paid to buy it. It's a loser model....and it has dominated NZ private business from the earliest days.

 

 

What he said.

 

The thing is, it is so blindingly obvious that's what is going on and yet politicians are soooooo bound up in the ideology of neoliberal economic theory they go through with it anyway.


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  Reply # 1639686 24-Sep-2016 07:17
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joker97:
Linuxluver:

 

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

 

 

 

I agree......provided nothing changes. 

 

 

 

I'm talking about what if something were to change. 

 



The only way is to purge.
Eg pass a law to determine who can and can't buy houses. Identify who owns houses. Force non eligible owners to sell within 5 years.
Start a political party to apply.

 

I agree. 

 

Supply in demand works well in many parts of life, including housing. More demand, prices ease upwards, that gives opportunities for builders to build. 

 

But now, the supply and demand is skewed. 8 people of capable financial means rock up to an auction. 4 foreigners who are wealthy also arrive. 8 People bid and mac=ximise the current market value, then the other 4 home in and just bid more. 

 

Residents can buy houses

 

Non residents cannot buy houses, no exceptions.

 

Immigrants have to build within a year, no buying existing houses. Exceptions here for desired immigrants, perhaps in the form of allowing same deposit rules for new builds, or on a case by case basis.

 

Its fine if wealthy foreigners send their kids here to be educated, and come here for visits, but we need to remove the artificial demand. Then we can get back to what Kiwis can demand and supply. Kiwis and immigrants, (new Kiwis) will also add to the housing stock by way of builds


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  Reply # 1639687 24-Sep-2016 07:26
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mattwnz:

 

Elpie:

 

 

 

Vancouver, BC now taxes absentee property owners. Other cities are considering following suit. This has influenced a rapid turn-around...

 

http://vancouversun.com/business/real-estate/pundits-gauge-plunge-in-foreign-buyers-in-metro-vancouver-real-estate-market

 

House sales are only one part of the problem though. Vancouver, for example, cannot expand. It's bordered by water on three sides and has a narrow band on the fourth. So, infill housing is the big thing there. Most areas have lane ways behind the houses providing access to garages at the back of properties. Garages are being converted to "coach houses" and "laneway houses" and rented out. Single family homes with basements are legally able to convert the basements into apartments. For people out to make money, owning property in Vancouver is still very attractive. A friend has just rented a laneway house. Immigrant landlord that spent around two million on her home. She now has two laneway houses and eight basement studio apartments in her home. Gross rental income on this is $8,000 a week. Eleven family/couple groupings living on one residential block of land. I foresee slums in Vancouver's future BUT it is getting people housed. For now. 

 

I'm not suggesting NZ should follow that kind of idea (the tax is a good idea though). However, NZ should be looking at utilizing land better. I'd be happy not seeing any further greenfield development. 

 

 

 

 

 

 

NZ should certainly be looking at that as an example if they are serious about solving the problem. WHen 50% of house buyers in a region are investors,  you know the is a serious problem. First home buyers can't really compete against a buyers frenzy that is being fueled by investors.

 

 

Thats the key.

 

We talk about building more houses and faster. Say we did. What I bolded of your comments still applies, its artificial. 

 

Housing stock. Its apparently low. Apart from the homeless that always exist, we don't see thousands of families in parks and reserves every night as the houses are all taken. We seem to have enough houses to house everyone. But when we want to buy, and pay a fair market price, the next guy who doesnt live here is happy to pay 20% more, he doesnt care, it gets added to his portfolio and he's on the next plane outta here. Or investors who are playing Monopoly 


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  Reply # 1639689 24-Sep-2016 07:42
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Homeless are not just found in parks and streets. They are found in night shelters, garages, caravans, cars, lounges, overcrowded housing.......




Mike
Retired IT Manager. 
The views stated in my posts are my personal views and not that of any other organisation.

 

 Mac user, Windows curser, Chrome OS desired.

 

The great divide is the lies from both sides.

 

 


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