Housing Announcement and Reforms 23/03/2021

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#2682895 30-Mar-2021 08:48

GV27:

sen8or:

So essentially, people should stop trying to improve their own financial situation so that others can?

This might come as a shock to many, but you can invest in things that aren't residential housing.

And at some point yea, when what you're investing in pushes something as fundamental as 'shelter' out of reach for other people, then it's time to reign that in.

And not one new house was built because of this. It may even reduce building as FHB buy an existing house close to their work rather than build on available land further away.

It will then be interesting to see how many of these buyers lose that home when interest rates rise, and they will.

GV27

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#2682896 30-Mar-2021 08:51

sir1963:

Worse, this will also encourage landlords to pay off mortgages faster, so money going to the IRD and Bank is no longer money being spent.

Maybe some of that extra money going to the IRD can be used to build houses for those who have been priced out of accommodation by property investors?

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#2682905 30-Mar-2021 09:13

GV27:

sir1963:

Worse, this will also encourage landlords to pay off mortgages faster, so money going to the IRD and Bank is no longer money being spent.

Maybe some of that extra money going to the IRD can be used to build houses for those who have been priced out of accommodation by property investors?

Rental property has a capitalisation of about $600 Billion.

But money not being spent in the economy will lower the tax take there.

There are always flow on effects.

GV27

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#2682907 30-Mar-2021 09:16

sir1963:

There are always flow on effects.

What are the flow-on effects of FHBs having to take on 30 year mortgages at 30% of their income (and that's while interest rates are at historic lows) to get a basic starter home, because prices have been spiked?

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#2682908 30-Mar-2021 09:16

sir1963:

Worse, this will also encourage landlords to pay off mortgages faster, so money going to the IRD and Bank is no longer money being spent.

Money going to the bank is money going to the bank. It's already not being spent.

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#2682909 30-Mar-2021 09:19

SaltyNZ:

sir1963:

Worse, this will also encourage landlords to pay off mortgages faster, so money going to the IRD and Bank is no longer money being spent.

Money going to the bank is money going to the bank. It's already not being spent.

If I give the bank extra money to pay off debt faster, it is money that is not being spent elsewhere.

For Landlords, Debt is now Toxic , and they should do everything they can to get rid of it, including putting up rent to generate the extra cash flow to do this.

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#2682910 30-Mar-2021 09:20

GV27:

sir1963:

There are always flow on effects.

What are the flow-on effects of FHBs having to take on 30 year mortgages at 30% of their income (and that's while interest rates are at historic lows) to get a basic starter home, because prices have been spiked?

And when interest rates spike again to 10%, how many of them will loose their house , and someone else get it cheap at a mortgagee sale.

GV27

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#2682911 30-Mar-2021 09:25

sir1963:

GV27:

What are the flow-on effects of FHBs having to take on 30 year mortgages at 30% of their income (and that's while interest rates are at historic lows) to get a basic starter home, because prices have been spiked?

And when interest rates spike again to 10%, how many of them will loose their house , and someone else get it cheap at a mortgagee sale.

So we're in agreement then: investors spiking property prices has left recent FHBs vulnerable and priced aspiring FHBs out of the market.

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#2682912 30-Mar-2021 09:26

sir1963:

And when interest rates spike again to 10%, how many of them will loose their house , and someone else get it cheap at a mortgagee sale.

Are you suggesting that investors should have taken risk into account when over-leveraging themselves to push house prices up? Or are you suggesting that an interest rate rise might result in a renter being able to afford a home because an investor was forced to sell?

Because I mean ... yes. That's the point.

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#2682919 30-Mar-2021 09:39

I have to say, it's genuinely disheartening to see that after years of skyrocketing wealth for almost nothing, at the smallest tweak on the margins to reign it in so that other people might have a chance, not to get rich, but just to own a place they can call home, the response is a near universal 'F*** you why should I give a s*** about you? I'm gonna burn it all down!' FFS the changes don't even mean you can't still get rich for almost nothing. Just slightly less rich than before.

Frankly I don't know why I'm surprised. It's not like I've been asleep for the last 10 years or something.

We love to think we're some egalitarian paradise here but the truth is we're fraying at the edges. There's a while to go before we're the USA, but we're on the right track.

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sir1963

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#2682944 30-Mar-2021 10:08

GV27:

So we're in agreement then: investors spiking property prices has left recent FHBs vulnerable and priced aspiring FHBs out of the market.

Note quite.

The low interest rates have pushed investors out of cash deposits because they earn basically nothing. These investors are NOT going to buy into the sharemarket.

When interest rates rise again, they will move out of housing again. These were only temporary investors anyway.

The long term investors are not going to build, Robertson has killed that off because of the risk he will screw them over too.

This policy has done ZERO to increase housing stocks (the only solution) and may have reduced investment in new stocks. We are already no building enough.

I really do wonder if this policy was rushed out the door to smother the news about the lack of building supplies and how small building companies may go broke. ie New Builds falling.

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#2682957 30-Mar-2021 10:24

sir1963:

This policy has done ZERO to increase housing stocks (the only solution) and may have reduced investment in new stocks. We are already no building enough.

Increasing the housing stocks will achieve nothing as long as investors can always beat FHBs to the punch. That's why discouraging investors has to be the first step.

You're willfully missing the point. This is a message that housing is no longer to be treated as a get rich quick scheme. It is to be treated as a human right. There's nothing stopping you from still making money out of it. Just not at the expense of everyone else.

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#2682958 30-Mar-2021 10:25

sir1963:

I really do wonder if this policy was rushed out the door to smother the news about the lack of building supplies and how small building companies may go broke. ie New Builds falling.

The policy was 'rushed out the door' because investors make up a huge portion of the market, leveraging existing gains on properties to get around LVRs and spiking prices by 20% in six months.

It takes years for supply to come online or for changes to have an impact. How more much damage did you want investors to be able to do until they could meaningfully happen?

And as for "low interest rates", they've been the only thing keeping FHBs remotely near being able to buy recently. People don't have a god-given right to passive income at the expense of wider society.

sir1963

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#2682979 30-Mar-2021 10:51

SaltyNZ:

sir1963:

This policy has done ZERO to increase housing stocks (the only solution) and may have reduced investment in new stocks. We are already no building enough.

Increasing the housing stocks will achieve nothing as long as investors can always beat FHBs to the punch. That's why discouraging investors has to be the first step.

You're willfully missing the point. This is a message that housing is no longer to be treated as a get rich quick scheme. It is to be treated as a human right. There's nothing stopping you from still making money out of it. Just not at the expense of everyone else.

OWNING a house is NOT a human right though, never has been.

And YOU are also wilfully missing the point.

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#2684002 30-Mar-2021 11:29

sir1963:

SaltyNZ:

It is to be treated as a human right.

OWNING a house is NOT a human right though, never has been.

@SaltyNZ never said that OWNING a house is a human right.

The human right to adequate housing is recognised in the 1948 Universal Declaration of Human Rights and in multiple international human rights treaties that New Zealand has ratified.
It must be provided in a non-discriminatory way. Everyone, regardless of income or economic resources, is entitled to the enjoyment of this right, without distinction, exclusion or restriction on the basis of any specific characteristic such as race, religion, age or sex.

Business – including individuals and organisations who are landlords - has a responsibility to respect the human right to adequate housing. If operations have a negative impact on the right to adequate housing business has a responsibility to
remedy that negative impact.

So, welcome to macro-economic reform, an inevitable consequence of market failure to deliver on human rights obligations.

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