Housing Announcement and Reforms 23/03/2021

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sir1963

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#2684725 31-Mar-2021 12:50

SaltyNZ:

tdgeek:

Ive been a landlord on more than one occasion and I am well aware and have expereinced most of those points. The capital gain is risk free, end of story. landlords wont suffer and financial catastrophe, they will just cash out the capital gain sooner than later and invest elsewhere where they might add value to the economy.

Yeah exactly, I once had a tenant do a runner, so I'm not exactly inexperienced in the pain points of being a landlord either. But ... I got over it. And all the current landlords either will too, or they'll get out of being landlords and someone else can own the homes they previously held.

Yea well I have one who punched holes in walls and doors, left a 3CM skip bin of waste in the house, painted a large penis on the wall, failed to pay the rent, and came back and smashed windows when they finally got turfed.

Each hole was a seperate insurance claim.

Cost me 6k in repairs all up.

tdgeek

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#2684726 31-Mar-2021 12:55

SaltyNZ:

Yeah exactly, I once had a tenant do a runner, so I'm not exactly inexperienced in the pain points of being a landlord either. But ... I got over it. And all the current landlords either will too, or they'll get out of being landlords and someone else can own the homes they previously held.

Precisely. Its been found that making family homes a playground for investors doesn't work. Thats not to say they are evil and caused everything, they didn't. Bcak in the day there was inflation, and wage increases and houses would double every ten years, that was life then, it worked. There was also no frenzy on anyone to build houses, it still worked. Everything rose in price every year, so more or less it moved along more or less in sync, no losers. Now we manage inflation via the RBNZ. This makes us want a low wage economy. So, you can say that we have roughly equal inflation, yeah we do. But interest rates are very low and have been for some time. But thats ok? Yes, its ok, as its still takes time to save a deposit, but no it doesnt as the culture now is a couple has kids later, one pays the bills the other saves the deposit, and now yippee interest rates are 5%, so this low inflation/wages collides with higher family income/saving and the ability to pay the same mortgage but the low interest means a more costly house is fine, so its now out of sync. Interest rates have allowed higher prices to be paid for the low inflation low wage earner who has kids late, thats how the demand is kept. THEN the investors roll in as its a frenzy. Thats what needs to stop, its homes, not zero risk sharemarkets. When interest rates go back to the 5%, that will help equalise prices. I doubt they will drop. I believ these days that a 2 adult 2 kid family works more hours than those days, so that can support the overstated prices. Its a pity that we are working more hours to just pay down the same house, bizarre.

sen8or

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#2684756 31-Mar-2021 13:40

The "houses double in value every 10 years" was almost kept in balance, with taking 9 years 1 months in the most recent decade (Jan 2011 - Feb 2020), it has only really been since May that prices have sky-rocketed (sourced - https://www.interest.co.nz/charts/real-estate/median-price-reinz)

tdgeek

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#2684759 31-Mar-2021 13:48

sen8or:

The "houses double in value every 10 years" was almost kept in balance, with taking 9 years 1 months in the most recent decade (Jan 2011 - Feb 2020), it has only really been since May that prices have sky-rocketed (sourced - https://www.interest.co.nz/charts/real-estate/median-price-reinz)

Yeah probably, but its never linear. And its out of sync with actual inflation and actual wages, which the have kids later and save save save made up for. Key and Clark bleated about it way back, no action. Labour had a miracle solution = zero, then Covid and QE killed interest rates. Perfect storm. Investors rode it, before and now, exacerbating it.

GV27

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#2684802 31-Mar-2021 14:26

tdgeek:

Yeah probably, but its never linear. And its out of sync with actual inflation and actual wages, which the have kids later and save save save made up for. Key and Clark bleated about it way back, no action. Labour had a miracle solution = zero, then Covid and QE killed interest rates. Perfect storm. Investors rode it, before and now, exacerbating it.

Other parts of the world have lower interest rates than NZ does, so it's not the be all and end all.

Mortgages are now 30 years as a starting point on first homes too. There's a bunch of things that are making our houses look more affordable than they are - number of hours worked to pay the mortgage (e.g. how many wage earners do you need working to make up a household income) is another that seems to get missed.

Once you take those into account, the same houses are now hugely unaffordable, in a way that 10x median incomes or whatever doesn't really capture.

tdgeek

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#2685006 31-Mar-2021 18:53

GV27:

Other parts of the world have lower interest rates than NZ does, so it's not the be all and end all.

Mortgages are now 30 years as a starting point on first homes too. There's a bunch of things that are making our houses look more affordable than they are - number of hours worked to pay the mortgage (e.g. how many wage earners do you need working to make up a household income) is another that seems to get missed.

Once you take those into account, the same houses are now hugely unaffordable, in a way that 10x median incomes or whatever doesn't really capture.

I alluded to that earlier. one income does it, turns to two incomes to drag out a deposit. Same result, a house, yay. But you've doubled the lack of affordability, 5X works, now 10X does too if you give up and stay working forever and forego the kids. You still end up buying, and aside from the lifestyle, you have had to double your income to buy the same old house. The same roof, the same rusty taps, its the same house. But to get there you both have to work work work and save save save.

Thats not right.

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Handle9

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#2685063 31-Mar-2021 21:23

This thread reminds me of this John Clarke clip

Batman

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#2685248 1-Apr-2021 11:14

sir1963:

Yea well I have one who punched holes in walls and doors, left a 3CM skip bin of waste in the house, painted a large penis on the wall, failed to pay the rent, and came back and smashed windows when they finally got turfed.

Each hole was a seperate insurance claim.

Cost me 6k in repairs all up.

Would surfers paradise be any different?

sir1963

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#2685252 1-Apr-2021 11:17

Batman:
sir1963:

Yea well I have one who punched holes in walls and doors, left a 3CM skip bin of waste in the house, painted a large penis on the wall, failed to pay the rent, and came back and smashed windows when they finally got turfed.

Each hole was a seperate insurance claim.

Cost me 6k in repairs all up.

Would surfers paradise be any different?