Real estate, post level 4

Forums › Home Workshop DIY › Real estate, post level 4

1 | ... | 147 | 148 | 149 | 150 | 151 | 152 | 153 | 154 | 155 | 156 | 157 | ... | 159

1043 posts

Uber Geek

#3153737 30-Oct-2023 15:42

mattwnz: 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 But Kiwisaver can't be withdrawn for other things like education or setting up a business which could have far better returns for the Kiwisaver holder.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

agreed.

unfortunately there is plenty of comments around, which is suspect is lobbyists, that suggest they are setting up to get rid of kiwisaver outright. which means all that money will be open for the taking, typically via housing market.

Backblaze

Backblaze Unlimited Backup. World’s easiest cloud backup. Get peace of mind knowing your files are backed up securely in the cloud (affiliate link).

mudguard

1726 posts

Uber Geek

#3153740 30-Oct-2023 15:49

I guess the other side of the Kiwisaver coin, is if it was only for retirement, I'd never have put as much in. I contributed 8% for a long time.
If it was left until 65, I'd probably have just put the $1020 in per year to get the government (taxpayer) contribution and saved a house deposit myself.

I also read that the famring lobby are pushing for Kiwisaver to be used for stock (as in cows) purchases. I mean if that goes through then it's open slather.

tweake

1043 posts

Uber Geek

#3153742 30-Oct-2023 15:50

irpegg:

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'. The resentment from Millennials will also flow onto future generations and i believe they will have the same attitudes, just not as bad.

agreed.

however reverse mortgages are not that great. they burn through the $$ really fast. thats already been a problem. add to that many want their cake and eat it to.

compounding factor, as someone mention previously, is aging population. they didn't have many kids to work and pay the taxes to pay for super, health care, etc. they may find the govt pulling up the ladder and be reliant of family for care.

tweake

1043 posts

Uber Geek

#3153743 30-Oct-2023 15:54

mudguard: I guess the other side of the Kiwisaver coin, is if it was only for retirement, I'd never have put as much in. I contributed 8% for a long time.
If it was left until 65, I'd probably have just put the $1020 in per year to get the government (taxpayer) contribution and saved a house deposit myself.

i agree. i think thats the smarter way of doing it. because kiwisaver gets forgotten about it can sit and accumulate over a long period of time, which is ideal for retirement. then people can save however they want and invest how they please. if thats for an OE or for a house, its up to them.

mattwnz

19385 posts

Uber Geek

#3153835 31-Oct-2023 00:11

mudguard: I guess the other side of the Kiwisaver coin, is if it was only for retirement, I'd never have put as much in. I contributed 8% for a long time.
If it was left until 65, I'd probably have just put the $1020 in per year to get the government (taxpayer) contribution and saved a house deposit myself.

I also read that the famring lobby are pushing for Kiwisaver to be used for stock (as in cows) purchases. I mean if that goes through then it's open slather.

I read they were also looking at allowing it to be used for younger farmers to buy an investment home in town to allow them to get on the housing ladder , because they are often given use of accommodation on a farm. If you withdraw kiwisaver for a home normally, it must be for a home you live in, and not an investment home to rent out etc. So if they apply it to farmers, then they may extend it to everyone, which potentially pumps a huge amount into the housing market and will make real estate companies very happy.

I suspect they will eventually make it compulsory to put on a certain % of your income into Kiwisaver like I understand is the case in Australia. I suspect National will also fully get rid of the tax credits this time. They halved it last time. You just can't trust them not to tinker with it, especially if they can make their books look better.

Handle9

9641 posts

Uber Geek

Trusted

Lifetime subscriber

#3153837 31-Oct-2023 00:21

tweake:

tdgeek:

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.

You ignored the point - that houses in different places are worth more. For most people Auckland is a more attractive place to live and have access to a higher income. That makes a house in Auckland worth more than Gore. Regardless of housing affordibility that would be the case.

Handle9

9641 posts

Uber Geek

Trusted

Lifetime subscriber

#3153838 31-Oct-2023 00:34

mattwnz: 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

The purpose of kiwsaver is for people to accumulate wealth. Internationally home ownership has a very strong correlation with overall wealth. This has always been the case.

For many years the government supported this with a variety of schemes. Back when housing was far more affordable familes could capitalise the family benefit to buy their first home. My parents would have been unable to buy their first home without this and even so borrowing money was very difficult.

Home ownership has so many social benefits that most societies recognise that it's worth supporting young people into affordable housing.

tweake

1043 posts

Uber Geek

#3153899 31-Oct-2023 09:28

Handle9:

The purpose of kiwsaver is for people to accumulate wealth. Internationally home ownership has a very strong correlation with overall wealth. This has always been the case.

For many years the government supported this with a variety of schemes. Back when housing was far more affordable familes could capitalise the family benefit to buy their first home. My parents would have been unable to buy their first home without this and even so borrowing money was very difficult.

Home ownership has so many social benefits that most societies recognise that it's worth supporting young people into affordable housing.

housing is not real wealth. most wealthy people in nz started off in housing, but its actually working for an industry that made them real wealth.

also housing doesn't create wealth. if you make 500k off a house someone else goes into debt 500k. the overall effect is zero. housing is the fools gold of wealth.

as you say, there is huge social benefits to owning a house. the problem is that its been taken away from people in the name of profit. young people (fhbers) are used to fund other peoples lifestyles. this is why RE market has been promoting every way possible for fhbers to overpay for a house under the bs guise of "helping young people into affordable housing" and why govt is pressured into changing the rules so more money can be poured into the RE market. you can't make profit unless house prices go up.

mudguard

1726 posts

Uber Geek

#3154083 31-Oct-2023 15:51

tweake:

also housing doesn't create wealth. if you make 500k off a house someone else goes into debt 500k. the overall effect is zero. housing is the fools gold of wealth.

Keep in mind actual profit. If you buy something for $500K with a $100K deposit. Sell it twenty years later for $1M, in those twenty years, at a historical average interest of 8%, means you will have made mortgage repayments of $704,640.

Obviously you have to take into account paying rent etc instead. But that doubling in price isn't actually all profit.

Whereas $100k in the bank at 5% for twenty years and you'll have $265k sitting in there.

Handle9

9641 posts

Uber Geek

Trusted

Lifetime subscriber

#3154092 31-Oct-2023 15:57

tweake:
Handle9:

The purpose of kiwsaver is for people to accumulate wealth. Internationally home ownership has a very strong correlation with overall wealth. This has always been the case.

For many years the government supported this with a variety of schemes. Back when housing was far more affordable familes could capitalise the family benefit to buy their first home. My parents would have been unable to buy their first home without this and even so borrowing money was very difficult.

Home ownership has so many social benefits that most societies recognise that it's worth supporting young people into affordable housing.

housing is not real wealth. most wealthy people in nz started off in housing, but its actually working for an industry that made them real wealth.

also housing doesn't create wealth. if you make 500k off a house someone else goes into debt 500k. the overall effect is zero. housing is the fools gold of wealth.

Owning a house is real wealth. It’s the largest asset most people will ever own in any country in the world. As for the rest an economy isn’t a zero sum game and housing is one of the biggest parts of the global economy.

tweake

1043 posts

Uber Geek

#3154113 31-Oct-2023 16:52

mudguard:

tweake:

also housing doesn't create wealth. if you make 500k off a house someone else goes into debt 500k. the overall effect is zero. housing is the fools gold of wealth.

Keep in mind actual profit. If you buy something for $500K with a $100K deposit. Sell it twenty years later for $1M, in those twenty years, at a historical average interest of 8%, means you will have made mortgage repayments of $704,640.

Obviously you have to take into account paying rent etc instead. But that doubling in price isn't actually all profit.

Whereas $100k in the bank at 5% for twenty years and you'll have $265k sitting in there.

correct. i'm only taking gross here as thats what actually matters in terms of cost to the next person/generation/your kids and grandkids.

tweake

1043 posts

Uber Geek

#3154114 31-Oct-2023 17:01

Handle9:

Owning a house is real wealth. It’s the largest asset most people will ever own in any country in the world. As for the rest an economy isn’t a zero sum game and housing is one of the biggest parts of the global economy.

only if you can make someone pay more for it than you did.

in fact i could argue that housing is less than zero sum because that debt has cost, and most of that money goes overseas. higher the prices, the bigger the mortgages the more nz looses.

we go selling houses to each other, back and forth, over and over and nothing is created, nothing is gained. its still the same amount of houses, and we pay people overseas (mostly) to be able to do that.

Handle9

9641 posts

Uber Geek

Trusted

Lifetime subscriber

#3154119 31-Oct-2023 17:21

tweake:
Handle9:

Owning a house is real wealth. It’s the largest asset most people will ever own in any country in the world. As for the rest an economy isn’t a zero sum game and housing is one of the biggest parts of the global economy.

only if you can make someone pay more for it than you did.

No. Even if it drops in value it is still an asset. If I have a house and no money in the bank I still have wealth.

tweake

1043 posts

Uber Geek

#3154133 31-Oct-2023 17:35

Handle9:
No. Even if it drops in value it is still an asset. If I have a house and no money in the bank I still have wealth.

no its becomes a liability. its costing you money. no money, no food, can't do anything, yeah i don't call that wealth. its only wealth if your making money.

your idea is to bury your money in the backyard and starve to death while telling your mates your wealthy. 🤣

Handle9

9641 posts

Uber Geek

Trusted

Lifetime subscriber

#3154136 31-Oct-2023 17:38

tweake:
Handle9:
No. Even if it drops in value it is still an asset. If I have a house and no money in the bank I still have wealth.

no its becomes a liability. its costing you money. no money, no food, can't do anything, yeah i don't call that wealth. its only wealth if your making money.

your idea is to bury your money in the backyard and starve to death while telling your mates your wealthy. 🤣

Right. Once again economics is failing you.

1 | ... | 147 | 148 | 149 | 150 | 151 | 152 | 153 | 154 | 155 | 156 | 157 | ... | 159