Heh...  they're coming thick and fast today!

Rikkitic:

 

The thing is, I think we all agree that health care is important, that it has been underfunded, and that it needs more money. The arguments always seem to come back to a tit for tat they did this or they didn't do that. I am very disappointed that Jacinda Ardern seems to be resorting to the old ploy of claiming to have inherited a bigger mess than expected from the previous government, so it is all somebody else's fault. This is just more of the same old same old, another politician behaving like a politician. I applauded the formation of this government because I was hoping for something new and fresh and different. I continue to do so. There is still time. 

 

 

 

  

 

I'll agree it is important. What I won't agree with is the inference in many comments (everywhere, not just here) that it must always be funded at a gold standard irrespective of available funds or other funding needs.

Healthcare is expensive. It will only get more expensive. If you are going to do things like effectively subsidise 40% of your tax base so that they contribute next to nothing to the pile, give children free healthcare and so on and so forth (the merits of which I do not seek to debate in this reply) then how can you still supply top level health care? You cannot expect fewer and fewer taxpayers to pay more and more tax.

The government needs to consider alternative ways to reduce demand - for example, if people take out private health plans to reduce their reliance on the State, they ought to be able to claim the premiums as a tax refund. This is not likely to be huge, but anything that reduces pressure on health service budgets must be a good thing.

I'll predict we will see a GST increase within 5 years to 17.5%.

One thing that does seem to be working for the govt.  They have given landlords a fright. 

We just negotiated to buy an apartment in the building we currently rent in.   It's a building in which units are predominantly owned by landlords.  Prices have significantly reduced (about 10%) since this time last year.   In the agent's view, investor demand for rental properties (in Wellington) has significantly softened.  As owner-occupiers we don't have the same concerns and I think landlords are being somewhat hysterical.  So we were in like a robber's dog (after doing due diligence). 

Thanks Jacinda, you saved us lots of money

This morning Guyon Espiner on RNZ did a very soft interview of Jacinda & got pinged by a listener via text (not me!).    Later on there was what RNZ called a conversation between the PM and the former president of Ireland conducted by Kathryn Ryan.

https://www.radionz.co.nz/national/programmes/ninetonoon/audio/2018639887/the-leadership-of-change-mary-robinson-and-jacinda-ardern

Seems to me that RNZ could be expecting some big lollies for them in the budget and word has come down from senior management that it's time to be very nice to the PM and its ministers, at least for the next few weeks.

MikeAqua:

 

One thing that does seem to be working for the govt.  They have given landlords a fright. 

 

We just negotiated to buy an apartment in the building we currently rent in.   It's a building in which units are predominantly owned by landlords.  Prices have significantly reduced (about 10%) since this time last year.   In the agent's view, investor demand for rental properties (in Wellington) has significantly softened.  As owner-occupiers we don't have the same concerns and I think landlords are being somewhat hysterical.  So we were in like a robber's dog (after doing due diligence). 

 

Thanks Jacinda, you saved us lots of money

 

What in particular do you think the government has done that would have this effect? Landlords are often professional buyers, so they may already have decided that (for example) the inevitable consequence of the government's policies is an increase in interest rates, which may suggest that some have chosen to be less acquisitorial in their behaviour.

If that, for example, were the reason, I would not necessarily regard it as something positive in the wider sense, ignoring personal benefit to you.

I noted this in the Herald, which I thought was a good point. The government cannot seek to make political capital out of health funding which affects almost all of us when it has chosen to give away so much money to a relatively small group, rather ineffectively.

"Bridges turned the argument on to the Labour-led Government, saying that it could easily cover the costs of repairs at Middlemore but was prioritising other areas.

"Frankly what I see from a Government here is a sense that they've got a huge raft of promises they cannot keep, taxes they want to impose, so they are looking for ways in the leadup to the Budget – which they are clearly worried about – to get into these issues.

"They've got surpluses. They make their choices. They've decided $2.8 billion for free [tertiary] fees is the right way to go.

"Well that's two fully furnished Dunedin hospitals. They can deal with these issues."

I am finding Bridges quite reasonable so far. He has been fair to both sides of the picture here. In my view a little too soft on Labour, but maybe more is coming. 

I feel there is plenty to be outraged about so far.

Geektastic:

 

What in particular do you think the government has done that would have this effect? Landlords are often professional buyers, so they may already have decided that (for example) the inevitable consequence of the government's policies is an increase in interest rates, which may suggest that some have chosen to be less acquisitorial in their behaviour.

 

If that, for example, were the reason, I would not necessarily regard it as something positive in the wider sense, ignoring personal benefit to you.

 

I don't think they have done much at all but they have talked up various policies that impact negatively on landlords.  The change in the Wellington investment apartment market from this time last year (when we gave up looking because prices were too high) is very obvious from a buyer perspective.

I wasn't trying to say the impact is positive, just that there seem to be an impact already.  It is positive for us, but I'm pretty sure us buying a 3rd property and giving the tenants a 42 day notice wasn't the govt's intended outcome, lol.

MikeAqua:

 

Geektastic:

 

What in particular do you think the government has done that would have this effect? Landlords are often professional buyers, so they may already have decided that (for example) the inevitable consequence of the government's policies is an increase in interest rates, which may suggest that some have chosen to be less acquisitorial in their behaviour.

 

If that, for example, were the reason, I would not necessarily regard it as something positive in the wider sense, ignoring personal benefit to you.

 

 

I don't think they have done much at all but they have talked up various policies that impact negatively on landlords.  The change in the Wellington investment apartment market from this time last year (when we gave up looking because prices were too high) is very obvious from a buyer perspective.

 

I wasn't trying to say the impact is positive, just that there seem to be an impact already.  It is positive for us, but I'm pretty sure us buying a 3rd property and giving the tenants a 42 day notice wasn't the govt's intended outcome, lol.

 

Based on reports of falling business confidence, I would say that there is a fair chance astute property investors are looking hard at how their portfolios would weather the coming interest rate rises.

Geektastic:

 

Based on reports of falling business confidence, I would say that there is a fair chance astute property investors are looking hard at how their portfolios would weather the coming interest rate rises.

 

Yup.  Especially when coupled with:

The planned move to ring-fence losses so that they can't be used to offset other taxable income.

...and the planned removal of the 90 day "no fault" termination option.

...and the increased costs already imposed by way of insulation & heating requirements.

What was previously a sound business plan may suddenly start to look like a liability for a number of Property Investors.

It's shaping up as a bit of a "Perfect Storm" IMHO...  For me, it might represent an opportunity to enter the market. We shall see!

6FIEND:

 

For me, it might represent an opportunity to enter the market.

 

Typically business concerns about changes in govt policy (whichever party is in govt) don't translate into impaired sector performance.

6FIEND:

 

Geektastic:

 

Based on reports of falling business confidence, I would say that there is a fair chance astute property investors are looking hard at how their portfolios would weather the coming interest rate rises.

 

 

 

 

Yup.  Especially when coupled with:

 

The planned move to ring-fence losses so that they can't be used to offset other taxable income.

 

...and the planned removal of the 90 day "no fault" termination option.

 

...and the increased costs already imposed by way of insulation & heating requirements.

 

 

 

What was previously a sound business plan may suddenly start to look like a liability for a number of Property Investors.

 

 

 

It's shaping up as a bit of a "Perfect Storm" IMHO...  For me, it might represent an opportunity to enter the market. We shall see!

 

 

 

We have made some substantial payments off our mortgage (50% by the time we are finished in a few weeks) and for now, intend to batten down the hatches and wait out the temporary Labour disaster.

6FIEND: The planned move to ring-fence losses so that they can't be used to offset other taxable income.

Aredwood:

6FIEND: The planned move to ring-fence losses so that they can't be used to offset other taxable income.

This would be a big change. As there is a subset of landlords who have bought solely for the tax deductions. They will be badly hurt by the removal of ring fencing.

And apartments are normally the first type of property to drop in value, when house prices start to drop. And they tend to drop by larger amounts as well.

The banks are almost certainly becoming much more strict on apartment lending as well.

And there is the can of worms that is earthquake insurance for apartments in Wellington also.

You still get the benefit of the losses, you just have to hold the property for long enough for it to become profitable (usually as interest decreases).  

If Labour wanted to kickstart the apartment industry again it would declare leaky building remediation deductible as an expense. Unbelievably it is still considered a grey area. This would substantially de-risk/destigmatise the sector. 

Aredwood:

 

The banks are almost certainly becoming much more strict on apartment lending as well.

And there is the can of worms that is earthquake insurance for apartments in Wellington also.

 

We just bought ours with no deposit (we have borrowing on other assets with the same bank).

The building is still insured and the insurance has been renewed since the Kaikoura quake. 

I imagine insurance depends on the building.