Real estate, post level 4

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29631 posts

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#3153454 29-Oct-2023 18:37

tweake:

yet new home build rates plummeted (so clearly people stopped building

No. Its hard to build. Its super easy to buy. You visit a place, like it. Go back again, yes its great. Sign a S+P agreement, done, move in in 2,3 or 4 weeks. Easy as

Every year, Kiwis build houses as some like that, want that, IMO that hasn't changed. Back in the day before I was born, NZ Govts built houses left right and centre. Probably a post war employment/growth scheme. Now they don't. Its up to Kiwis to build what the country needs, but we dont. Simple as that. Now, if I sold our home and bought another, no issue, housing stock unaffected. If I migrated to Godzone, and I rented or bought, thats a problem.

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tweake

2336 posts

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#3153462 29-Oct-2023 19:26

tdgeek:

tweake:

the traditional path is to buy your first house, like you have, do it up or simply wait, sell it for a little bit of profit

I havent read the rest of your post, but dont need to

Yes Ive bought my first house, done it up and so on, but there is no free ride. When you sell, then buy, its the same market. No profit. Well, there is paper profit, but when you buy a 300k house and sell it for 600k and buy a 600k house, its the same house. If you own more than one house, well,, thats a winner. You have also added to the rental stocks, so great. Now, that is profit, when you sell up or do a Dunlop and re tyre

until you sell that 600k house and buy a 200k house and bank the 400k. i only have to look at the neighbors to see that.

tweake

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#3153463 29-Oct-2023 19:27

tdgeek:

tweake:

yet new home build rates plummeted (so clearly people stopped building

Its up to Kiwis to build what the country needs, but we dont.

exactly what i was saying, and the effect of that = higher demand = higher prices = higher profit.

tdgeek

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#3153637 30-Oct-2023 11:41

tweake:

until you sell that 600k house and buy a 200k house and bank the 400k. i only have to look at the neighbors to see that.

If you sell your Auckland house and buy one in Gore you will get that, irregardless of house price inflation. Same if you downgraded from the 5 bedroom to a 2 bedroom

tdgeek

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#3153638 30-Oct-2023 11:43

tweake:

exactly what i was saying, and the effect of that = higher demand = higher prices = higher profit.

So we need to build more, that's on the people. If the people don't build more and house prices rise due to demand inflation, too bad. It's on us

tweake

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#3153657 30-Oct-2023 12:36

tdgeek:

tweake:

exactly what i was saying, and the effect of that = higher demand = higher prices = higher profit.

So we need to build more, that's on the people. If the people don't build more and house prices rise due to demand inflation, too bad. It's on us

but most of the people who just happen to be making the $$$ are saying, no its not on us. its nothing to do with us. its the gumbermints fault, its "market forces", its alien's. its always someone else fault. we had it worse in the 80's therefore housing crisis doesn't exist. even tho we are still intentionally jacking the prices up today to make profit, its nothing to do with us.

tweake

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#3153659 30-Oct-2023 12:38

tdgeek:

tweake:

until you sell that 600k house and buy a 200k house and bank the 400k. i only have to look at the neighbors to see that.

If you sell your Auckland house and buy one in Gore you will get that, irregardless of house price inflation. Same if you downgraded from the 5 bedroom to a 2 bedroom

exactly. make profit on each house sale, reinvest, move up the ladder, then downsize and pocket the untaxed profit. who cares that its your grandkids who are paying for it all.

quickymart

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#3153677 30-Oct-2023 12:44

https://archive.ph/S6tor >> this is something I'd be happy seeing my Kiwisaver funding invested in.

tweake

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#3153680 30-Oct-2023 12:48

heres something to wind a few of you guys up.

whats starting to happen with my extended family is the oldies are getting to the stage of needing to be taken care of in their old age. nothing new there. well expect a lot of the kids have 30 year mortgages which takes 3 incomes to pay off and can't afford to, not to mention the huge resentment. also some of the ones who can spend the time have gotten so annoyed with the oldies attitude of "me me me, screw you kids", that they don't want to know them and the parents are being left to manage on their own in their declining health.

a little bit of social backlash starting to happen here.

mudguard

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#3153707 30-Oct-2023 14:17

tweake:

exactly. make profit on each house sale, reinvest, move up the ladder, then downsize and pocket the untaxed profit. who cares that its your grandkids who are paying for it all.

I'm not sure that is very common. I mean someone else can work out the cost of selling every five years, buying something more expensive. I suspect you'd get on the IRD's radar too. There's break costs if you have fixed interest rates, the cost of purchasing (LIMS, lawyer fees etc). Agent fees from sellling and so on.

I would say the historical or stereotypical trend was to buy what you could afford, and buy bigger as required (usually because of kids) To use my parents as an example, they have just retired and have owned three homes. So in about forty five years, forty of those were spent in two houses. Their first was tiny, and the second managed to fit the four kids (shared bedrooms) The next was to move towns for a job and they're still in that one. And now it is far too large.

mudguard

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#3153710 30-Oct-2023 14:22

tweake:

heres something to wind a few of you guys up.

whats starting to happen with my extended family is the oldies are getting to the stage of needing to be taken care of in their old age. nothing new there. well expect a lot of the kids have 30 year mortgages which takes 3 incomes to pay off and can't afford to, not to mention the huge resentment. also some of the ones who can spend the time have gotten so annoyed with the oldies attitude of "me me me, screw you kids", that they don't want to know them and the parents are being left to manage on their own in their declining health.

a little bit of social backlash starting to happen here.

That's not uncommon anyway. None of siblings live near my parents, not even the same island. As I mentioned above, they are approaching an age where they need to decide if they downsize now and be done with it. Or risk staying in a big, old house until they're 'forced' out.

Nigel Latta talked about this recently, that retirement homes will probably suck up any type of inheritance, so it's a double whammy for those offspring, impossible to get on the ladder, and given we are living longer, there's a very real chance there's no money left to pass on.

As for average times spent in homes, well I bought two years ago, had been in the same role for nearly a decade, and have found out I'll be looking for a new role. So if worst comes to worst, I'll have to sell before even five years. So people's circumstances change.

tweake

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#3153721 30-Oct-2023 14:47

mudguard:

tweake:

exactly. make profit on each house sale, reinvest, move up the ladder, then downsize and pocket the untaxed profit. who cares that its your grandkids who are paying for it all.

I'm not sure that is very common. I mean someone else can work out the cost of selling every five years, buying something more expensive. I suspect you'd get on the IRD's radar too. There's break costs if you have fixed interest rates, the cost of purchasing (LIMS, lawyer fees etc). Agent fees from sellling and so on.

I would say the historical or stereotypical trend was to buy what you could afford, and buy bigger as required (usually because of kids) To use my parents as an example, they have just retired and have owned three homes. So in about forty five years, forty of those were spent in two houses. Their first was tiny, and the second managed to fit the four kids (shared bedrooms) The next was to move towns for a job and they're still in that one. And now it is far too large.

the average is roughly 7 years. i know a fair few people who are 40 years in one home. one is even 3rd generation in that home. so there must be a lot of sub 7 year ones to pull down that average. there was an article that showed a house and it had something like 4 owners in 4 years. each one making ~100k ish. back in the day i had repeat customers because they bought a new house every 3-4 years.

nothing to do with IRD, its tax free. even the brightline doesn't apply. and yes, the RE industry absolutely loves it $$$$$.

tweake

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#3153724 30-Oct-2023 14:58

mudguard:

Nigel Latta talked about this recently, that retirement homes will probably suck up any type of inheritance, so it's a double whammy for those offspring, impossible to get on the ladder, and given we are living longer, there's a very real chance there's no money left to pass on.

the old school of leaving something for the kids has long past. the family business is now sold off instead of being handed down. ditto houses and money is spent. as retirement homes really suck the dollars hence the push for them to be looked after by the kids.

the triple wammy could well be that current generations may not be able to make money off houses like previous generations and many many more could well end up broke at retirement age. the higher the prices the longer deposits take to earn, 30 year mortgages are "standard", so your hitting 70 years old before house is paid off and then you can start saving for retirement. that may even get worse with kiwisaver on the hit list.

mattwnz

20096 posts

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#3153728 30-Oct-2023 15:15

One of the big mistakes NZ made imo was allowing Kiwisaver to be used as a first home deposit. That money should have been for when you retire. It therefore allowed many people who were bad with money, able to buy a house and at a higher price, without needing to specifically save for a house deposit, and potentially pushing up prices even more. But Kiwisaver can't be withdrawn for other things like education or setting up a business which could have far better returns for the Kiwisaver holder. The new government is now going to allow people to borrow from their Kiwisaver account for a rental bond, which they may never get back. Again this helps property investors. I understand they're could also be some other similar changes if lobbyists get their way. It really erodes the value of Kiwisaver and means a lot of people may have less savings for retirement

irpegg

140 posts

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#3153736 30-Oct-2023 15:42

tweake:

heres something to wind a few of you guys up.

whats starting to happen with my extended family is the oldies are getting to the stage of needing to be taken care of in their old age. nothing new there. well expect a lot of the kids have 30 year mortgages which takes 3 incomes to pay off and can't afford to, not to mention the huge resentment. also some of the ones who can spend the time have gotten so annoyed with the oldies attitude of "me me me, screw you kids", that they don't want to know them and the parents are being left to manage on their own in their declining health.

a little bit of social backlash starting to happen here.

Reverse mortgages is going to be massive for baby boomers. Several friends parents have confided smuggly that they have 100k saved for their retirement think they are going to live like kings. It aint 1988 anymore sorry.

Everyone saying just wait till boomers die for the transfer of wealth are a bit delusional imo. They are the fattest fish in the ocean and the retirement care industry is going to take everything they can, and the general boomer pull the ladder up attitude of 'i worked hard so im spending all this, my kids generation can figure this out' means the idea of generational wealth is a thing of the past. The resentment from Millennials will also flow onto future generations and i believe they will have the same attitudes, just not as bad.

Relevant watch: https://youtu.be/US43VB55fI0

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