Real estate, post level 4

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20111 posts

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#2745884 17-Jul-2021 18:25

tdgeek:

Vacant Houses? If they stay vacant then there is no effect. If I had a vacant house, I paid for it, thats my business

If they are vacant and could be lived in, then they are already having an effect. Just because someone owns a vacant house, doesn't mean that Government can't tax you on it. I think they do it in places in Australia, and they have this tax around the world, as a way to either get people living in the house, or to get the owner to sell it so it can be lived in. Apparently it has helped a lot to increase housing supply.. Land tax also would help get landbanked sections built on.

NZ needs to make the best use of it's current resources and existing housing stock.

Already taxpayers are having to pay increasing amount for emergency housing, when there are vacant houses that could be used. Child poverty in NZ is also suffering as a direct result.

mattwnz

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#2745887 17-Jul-2021 18:30

tdgeek:

mattwnz:

The problem is that many people seem to think the same, which seems to be causing the whole FOMO problem. People are willing to offer crazy high prices, just to win a tender and blow other people out of the water. I have been outbid by 100k twice due to some crazy offers, and my offers were high and higher and inline with other peoples. The Prime Minister did say last year that house prices just couldn't continue to rise as much as they have been. But they did, and they have said that other changes will follow. Something has to change in NZ, otherwise we are going to end up with some major social problems as a result..

I dont disagree, but what changes? Not bagging you, but many seem to complain but dont offer solutions.

My solutions are:

Feebate. if mortgage interest rates happened to be say 4%. If I buy, I pay 5%, if you build you pay 3%. My extra interest subsidises your lower interest. That reduces demand on buys and incentivises builds. Easy to manage accounting-wise

Govt and all builders (The GJ Gardiners down to tiny homes businesses) can band together and select subdivisions. Govt buys them. They get infrastructred, Govt recovers that from section sales, builders build. Not a few acres here and there, BIG developments.

I can't see any other solutions. Interest rates need to be weaned into the market. That takes time. Salaries wont suddenly grow big time. House price = Salary + Interest rates, so no show of any large movement there.

I actually think Kiwibuild was a good idea, if done properly, and the government put money into it and it was run properly. Rather than let it be run by developers where it failed. It wasn't worth it for developers. If you go to the kiwibuild website, there are now hardly any houses on it now, when at one stage they had a lot.

Also remove GST on new builds like they do in the UK.

House prices need to stagnate for wages to catch up, but that may take 50 years.

They also need to get NZers investing in productive things, rather than buying up existing houses as investments. The government are starting to do this with recent changes. IMO a lot of the current house price inflation, and people buying up houses, is more about trying to hedge against inflation.

tdgeek

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#2745888 17-Jul-2021 18:36

mattwnz:

If they are vacant and could be lived in, then they are already having an effect. Just because someone owns a vacant house, doesn't mean that Government can't tax you on it. I think they do it in places in Australia, and they have this tax around the world, as a way to either get people living in the house, or to get the owner to sell it so it can be lived in. Apparently it has helped a lot to increase housing supply.. Land tax also would help get landbanked sections built on.

NZ needs to make the best use of it's current resources and existing housing stock.

Already taxpayers are having to pay increasing amount for emergency housing, when there are vacant houses that could be used. Child poverty in NZ is also suffering as a direct result.

Despite my post I actually agree, we need to make houses to live in. But its a fine line. When people have ownership, they have ownership, you can't just take that away. I had an empty house a few short years ago. Bought a new house, reno-ing the old house. Thats ok. Maybe it takes me ages to reno it? And ages. And ages!

I get the point though, but its a fine line. A Government would have to say house investing is over, but you can own a rental if you satisfy these conditions. Maybe regulated landlords will sell up and invest elsewhere? Then what? Its a fine line, but I agree with the principle

tdgeek

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#2745904 17-Jul-2021 18:44

mattwnz:

I actually think Kiwibuild was a good idea, if done properly, and the government put money into it and it was run properly. Rather than let it be run by developers where it failed. It wasn't worth it for developers. If you go to the kiwibuild website, there are now hardly any houses on it now, when at one stage they had a lot.

Also remove GST on new builds like they do in the UK.

House prices need to stagnate for wages to catch up, but that may take 50 years.

They also need to get NZers investing in productive things, rather than buying up existing houses as investments. The government are starting to do this with recent changes. IMO a lot of the current house price inflation, and people buying up houses, is more about trying to hedge against inflation.

Kiwibuild. I do too. But it was too late. You cant say we will build 100,000 affordable houses when houses are not affordable any more.

Can we afford to reduce income tax revenue? Take my feebate 4% example. make buys 6% and builds 2%, easy. GST, we would probably see what we do with the vehicle feebate, Japan, the major supplier of used car imports are now jacking up prices so that they get the feebate not the buyer. NZ is poor, we cannot afford less tax income, but its easy to skew people to builds. Go a step further, if I sell my house AND build, the buyer is excused from penalty interest. They can buy at better rates, and I add one house to the stock. We need to get creative, humans are easier than sheep to manage

tdgeek

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#2746082 18-Jul-2021 08:36

https://www.stuff.co.nz/life-style/homed/real-estate/125711643/house-sellers-reluctant-to-list-if-they-cant-buy-first

One reason why people are holding off listing a sale. Scared to list and buy later in case price rises and the swap a 600k for another 600k means it might be a 670k. And to buy now to avoid that is hard as few on the market. Chicken and egg scenario.

mudguard

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#2746163 18-Jul-2021 09:46

mattwnz:

The problem is that many people seem to think the same, which seems to be causing the whole FOMO problem. People are willing to offer crazy high prices, just to win a tender and blow other people out of the water. I have been outbid by 100k twice due to some crazy offers, and my offers were high and higher and inline with other peoples.

I understand that, but if you hypothetically say, I'm going to play the long game and not be drawn into a price frenzy. In the meantime I spend another $25k on rent in a year, prices have gone up by X, I've saved Y and I'm even further away. I'm lucky with my work that I can save quite a lot of my income as I'm away a lot so don't need to spend. But I can't keep up with the rises. So I'm starting to look at it, if I'm going to rent, and work permits it, there isn't much point staying in Auckland.

quickymart

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#2746179 18-Jul-2021 10:36

tdgeek:

https://www.stuff.co.nz/life-style/homed/real-estate/125711643/house-sellers-reluctant-to-list-if-they-cant-buy-first

One reason why people are holding off listing a sale. Scared to list and buy later in case price rises and the swap a 600k for another 600k means it might be a 670k. And to buy now to avoid that is hard as few on the market. Chicken and egg scenario.

This is something that concerns me too, if I ever become a property owner and want to sell. Sure, I'll get a buyer, no worries there - but will I get another property in time before I need to hand over the keys to my existing place?

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GV27

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#2746192 18-Jul-2021 11:30

mattwnz:

New houses. Supply will increase going into spring and summer.

Supply is currently massively constrained by timber supply issues and labour shortages. The next six months to a year of building are now going to be spent on what was going to be the previous three months of building work. There's a real chance pressure to open the borders could mean that happens before we get back on top of our timber issue. If that happens then it's basically game over.

We need something like Kiwibuild, but not run by Wellington deks-jockeys who are immune to things like targets and are happy to blow out project timelines writing reports for each other.

IDK if a state enterprise model as we know it is sufficient - I think we're almost at war room levels of urgency. Mind you, I'd argue stuff like Light Rail and other vital infrastructure projects in Auckland should be run this way. I wonder if Wellington is too disconnected from the problems in Auckland to ever really find a different way to approach fixing them. The current/previous ways of doing things have failed. How long to do we try to keep repeating them before accepting it's time for something different?

alavaliant

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#2746207 18-Jul-2021 12:31

quickymart:
tdgeek:

https://www.stuff.co.nz/life-style/homed/real-estate/125711643/house-sellers-reluctant-to-list-if-they-cant-buy-first

One reason why people are holding off listing a sale. Scared to list and buy later in case price rises and the swap a 600k for another 600k means it might be a 670k. And to buy now to avoid that is hard as few on the market. Chicken and egg scenario.

This is something that concerns me too, if I ever become a property owner and want to sell. Sure, I'll get a buyer, no worries there - but will I get another property in time before I need to hand over the keys to my existing place?

Indeed, personally I wouldn't feel safe to try to buy right now. It's part of why I ended up opting to look at getting a room added to my current house rather than trying to shift to a larger one.

Handle9

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#2746210 18-Jul-2021 12:49

quickymart:
tdgeek:

https://www.stuff.co.nz/life-style/homed/real-estate/125711643/house-sellers-reluctant-to-list-if-they-cant-buy-first

One reason why people are holding off listing a sale. Scared to list and buy later in case price rises and the swap a 600k for another 600k means it might be a 670k. And to buy now to avoid that is hard as few on the market. Chicken and egg scenario.

This is something that concerns me too, if I ever become a property owner and want to sell. Sure, I'll get a buyer, no worries there - but will I get another property in time before I need to hand over the keys to my existing place?

In a rapidly inflating market you buy first and get bridging finance until you can sell. Providing you have a good payment history, secure income and can convince the bank it's not that big a deal.

The challenge is finding a property you can close on.

tdgeek

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#2746233 18-Jul-2021 13:32

GV27:

mattwnz:

New houses. Supply will increase going into spring and summer.

Supply is currently massively constrained by timber supply issues and labour shortages. The next six months to a year of building are now going to be spent on what was going to be the previous three months of building work. There's a real chance pressure to open the borders could mean that happens before we get back on top of our timber issue. If that happens then it's basically game over.

We need something like Kiwibuild, but not run by Wellington deks-jockeys who are immune to things like targets and are happy to blow out project timelines writing reports for each other.

IDK if a state enterprise model as we know it is sufficient - I think we're almost at war room levels of urgency. Mind you, I'd argue stuff like Light Rail and other vital infrastructure projects in Auckland should be run this way. I wonder if Wellington is too disconnected from the problems in Auckland to ever really find a different way to approach fixing them. The current/previous ways of doing things have failed. How long to do we try to keep repeating them before accepting it's time for something different?

There is a building boom, but as you say, timber supply is an issue. However it won't make any difference here, even if timber supplies were stabilised. A building boom isn't really a boom, numbers wise, we are just building more than typical. So we call it a boom, but it would take many years to make a decent dent. Find a way to get builders building 50% more? Then we are talking, but thats still no overnight solution

Auckland and Light Rail? Yep, but New Zealand and its housing issues isnt just Auckland.

mattwnz

20111 posts

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#2746244 18-Jul-2021 14:23

Traditionally people would buy a property first and put a condition on the sale that it is conditional on them selling their property. But some real estate agents encourage buyers to not put conditions on properties these days, which imo is risky for buyers unless they do a lot of due dilliegence before hand, which is expensive if you miss out anyway.
It isn't always easy to sell a house or get the price you want. Especially on higher value properties in some areas.

The Central Banks seem to think this inflation and these shortages etc are a short term thing. But who believes this is the case?

mattwnz

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#2746248 18-Jul-2021 14:30

mudguard:
mattwnz:

The problem is that many people seem to think the same, which seems to be causing the whole FOMO problem. People are willing to offer crazy high prices, just to win a tender and blow other people out of the water. I have been outbid by 100k twice due to some crazy offers, and my offers were high and higher and inline with other peoples.

I understand that, but if you hypothetically say, I'm going to play the long game and not be drawn into a price frenzy. In the meantime I spend another $25k on rent in a year, prices have gone up by X, I've saved Y and I'm even further away. I'm lucky with my work that I can save quite a lot of my income as I'm away a lot so don't need to spend. But I can't keep up with the rises. So I'm starting to look at it, if I'm going to rent, and work permits it, there isn't much point staying in Auckland.

I have a similar conundrum. Probably most FHBs do which is what is causing the problem. I just hope the governemnt are going to introduce more changes soon, as what they have done so far has had no real effect. But due to it being winter at the moment there are few houses in the market and none that I would consider in my area, especially not at some of the crazy asking prices. Many are now double what they sold for just a few years ago without improvements and substantially more than any estimates. When they sell, it just inflates the market even more.

tdgeek

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#2746270 18-Jul-2021 16:35

mattwnz:
Traditionally people would buy a property first and put a condition on the sale that it is conditional on them selling their property. But some real estate agents encourage buyers to not put conditions on properties these days, which imo is risky for buyers unless they do a lot of due dilliegence before hand, which is expensive if you miss out anyway.
It isn't always easy to sell a house or get the price you want. Especially on higher value properties in some areas.

The Central Banks seem to think this inflation and these shortages etc are a short term thing. But who believes this is the case?

I can't see its a short term thing. Whether anyone believes my list of factors I posted yesterday or not, I cant see anything thats going to shift the goal posts. You get that when an issue such as car maintenance, house maintenance, or house prices is known about but its left for 20 years.

tdgeek

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#2746272 18-Jul-2021 16:41

mattwnz:

I have a similar conundrum. Probably most FHBs do which is what is causing the problem. I just hope the governemnt are going to introduce more changes soon, as what they have done so far has had no real effect. But due to it being winter at the moment there are few houses in the market and none that I would consider in my area, especially not at some of the crazy asking prices. Many are now double what they sold for just a few years ago without improvements and substantially more than any estimates. When they sell, it just inflates the market even more.

Govt measures have worked, investors have backed off. But its way too late, and even those measures aren't having all investors backing off right now as they phase in. 20 years ago you could have managed this by measures to keep investors away, but nothing happened. Its even too late to enact radical measures to spur a massive house building boom, as A) the prices are already high, B) timber shortage, C) skilled builder shortage if suddenly everyone wanted to build. New builds are up, probably due to "enough of this I"ll build to a fixed price" but its just a nice increase in building, not a short term fix

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