Real estate, post level 4

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#3153146 28-Oct-2023 17:29

exactly, there is no easy fix. its coming up two generations in the making. the other issue is it may just fix itself and thats going to hurt a lot.

the simple reason its not been fixed (or even half fixed) is simply profit. try telling kiwis they can't make that big profit off houses anymore.

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Handle9

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#3153161 28-Oct-2023 17:40

mudguard:
tweake:

why build new and reduce demand when you can buy 2nd hand and increase demand.

I'd assume building new is considerably more involved than buying an existing house. For example the mortgage requirements are slightly different too.

Of course it’s considerably more complicated and capital intensive. You will generally have to pay two mortgages or a mortgage and rent while the property is being built, which is likely a year or more.

It’s dumb to say that people should build new. Most people are t capable of funding a new build and/or lack the capability to do a new build.

tweake

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#3153166 28-Oct-2023 18:22

Handle9:

Of course it’s considerably more complicated and capital intensive. You will generally have to pay two mortgages or a mortgage and rent while the property is being built, which is likely a year or more.

It’s dumb to say that people should build new. Most people are t capable of funding a new build and/or lack the capability to do a new build.

who do think builds houses? aliens ??

its either people or govt, and most people like to build what they want.

what i said was the people that should have been building new didn't. all the people who had the money to do so but chose to make money selling old houses instead.

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#3153167 28-Oct-2023 18:33

tweake:

Handle9:

Of course it’s considerably more complicated and capital intensive. You will generally have to pay two mortgages or a mortgage and rent while the property is being built, which is likely a year or more.

It’s dumb to say that people should build new. Most people are t capable of funding a new build and/or lack the capability to do a new build.

who do think builds houses? aliens ??

its either people or govt, and most people like to build what they want.

what i said was the people that should have been building new didn't. all the people who had the money to do so but chose to make money selling old houses instead.

And I'm saying you are incorrect. Most people buy an existing house because it's considerably easier to do so not because of profit motives.

mattwnz

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#3153196 28-Oct-2023 22:13

Many investors or landlords will buy an existing house due to subdivision potential and/or for the future capital gains over the long term. A new home of similar value will often not be able to be subdivided and be on a smaller parcel of land, and may not have as much future potential for capital gains. A new house can still get interest deductability unlike an older existing house, but that wasn't popular with property investors and landlords and will now likely be reversed under a National led government

quickymart

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#3153222 29-Oct-2023 07:21

https://www.axios.com/2023/10/27/biden-housing-apartments-office-us-cities >> could this work here? With the number of empty offices I see around the place, maybe it could make a dent in the housing shortfall, at least?

Senecio

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#3153223 29-Oct-2023 07:29

tweake:

what i said was the people that should have been building new didn't. all the people who had the money to do so but chose to make money selling old houses instead.

Most people buy existing houses due to location. Not everyone wants to live 30km from town where houses are being built in these new sub divisions. The amenities are poor, and you just end up stuck in traffic every time you want to go anywhere.

tweake

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#3153240 29-Oct-2023 10:09

Handle9:

And I'm saying you are incorrect. Most people buy an existing house because it's considerably easier to do so not because of profit motives.

"most" is correct. but thats not what i was talking about. normally only a few build new houses, typically those at the top of the ladder.

however those who would normally have built new, didn't. the new build rate plummeted for decades as they know that creates demand (which was mentioned at the time). so we have had the lowest build rate with the highest profit off 2nd hand houses, well doh.

today many more build new because 2nd hand homes are almost the cost of a new build (why fhbers are buying new) and for many the profit off their old homes is so high they can afford to, ie they are not paying for it someone else is.

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#3153255 29-Oct-2023 10:44

tweake: <.

however those who would normally have built new, didn't. the new build rate plummeted for decades as they know that creates demand (which was mentioned at the time). so we have had the lowest build rate with the highest profit off 2nd hand houses, well doh.

Please provide evidence of your claims of a conspiracy to stop building houses.

When you look you’ll see it wasn’t private house building that was the big change.

The RMA and changes in council policies changed the economics of building but the biggest fall was government development.

tweake

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#3153266 29-Oct-2023 11:05

Handle9:
tweake: <.

however those who would normally have built new, didn't. the new build rate plummeted for decades as they know that creates demand (which was mentioned at the time). so we have had the lowest build rate with the highest profit off 2nd hand houses, well doh.

Please provide evidence of your claims of a conspiracy to stop building houses.

When you look you’ll see it wasn’t private house building that was the big change.

The RMA and changes in council policies changed the economics of building but the biggest fall was government development.

it is actually published. i have seen it somewhere. btw house build rates where dropping well before RMA came along, tho that did make it much worse which again was mentioned at the time.

but there is no way anyone can deny, intentional or not, that not building houses made them more money. most of the profit today comes from that.

why would anyone spend money building new when hanging onto 2nd hand houses makes you money.

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#3153276 29-Oct-2023 11:18

If it is published the that there was a mass conspiracy by the entire population to push up house prices please provide a citation. It’s a simple request.

If you are going to make wild claims prove them.

tweake

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#3153285 29-Oct-2023 11:33

Handle9: If it is published the that there was a mass conspiracy by the entire population to push up house prices

i never said there was. the fact that your saying it is shows you read about as bad as i write and clearly missed the entire point.

but lets have it your way, none of us wealthy people ever did anything to make money. we are stupid and could never see that we would make money from housing <sarcasm>

mudguard

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#3153288 29-Oct-2023 11:37

tweake:

but there is no way anyone can deny, intentional or not, that not building houses made them more money. most of the profit today comes from that.

why would anyone spend money building new when hanging onto 2nd hand houses makes you money.

I'm not sure who exactly you are talking about. Most homeowners generally own one property. Most the "profit" is a paper figure until it's sold. As it has been mentioned building new is much more difficult than buying an existing property. I'm a recent home owner, I didn't consider a new build at all. I bought as a place to live, I couldn't really care less what the value does as I didn't wanted to move rentals continually. If the price goes up, well great if I want to move to a different town, but not really relevant if I want to stay put.

Again, I'm not trying to diminish how much of a problem this has become where a home is many multiples higher than incomes. But I'm saying that people aren't building new because of so many factors, not because of a reduced profit. The suburb where I live still has plenty of empty sections. But they are priced from $600,000. I mean until recently you could buy a whole house for that here.

So using your logic, those sections are empty because they are not as profitable. Well they surely aren't, they are extremely expensive just to buy. You might need to have a 50% deposit just to purchase the land. So there's $300k gone. Then you may need more deposit for the house build portion (I'm unsure if any bank will lend 100% on a build).

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#3153291 29-Oct-2023 11:41

mattwnz: Many investors or landlords will buy an existing house due to subdivision potential and/or for the future capital gains over the long term. A new home of similar value will often not be able to be subdivided and be on a smaller parcel of land, and may not have as much future potential for capital gains. A new house can still get interest deductability unlike an older existing house, but that wasn't popular with property investors and landlords and will now likely be reversed under a National led government

One major attraction for new builds for investors is the low maintenance plus the perception of a better quality tenant and lower tenant turnover.

Also with turnkey builds, in a hot property market, a speculator can put 10% deposit on a turnkey build and when it's complete in a year or two, resell at a higher price without even settling the balance. Easy to get burnt here though as many people have found recently.

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#3153306 29-Oct-2023 12:27

tweake:
Handle9: If it is published the that there was a mass conspiracy by the entire population to push up house prices

i never said there was. the fact that your saying it is shows you read about as bad as i write and clearly missed the entire point.

but lets have it your way, none of us wealthy people ever did anything to make money. we are stupid and could never see that we would make money from housing <sarcasm>

You’ve continuously claimed that “people” buy second hand houses to push up the price of the existing housing stock rather than buying new. That’s just not the case.

Most people buy used houses because they are cheaper than new houses, both for capital costs and overall TCO after accounting for accomodation costs and capital costs.

Everyone with a brain acknowledges there’s a shortage of housing. Most people also acknowledge that the reasons for this are significantly more complex than greed.

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