NZ Election 2020

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#2490550 24-May-2020 16:30

Handle9:
tdgeek: The blanket statement was that Air NZ is not now declaring a dividend so therefore assets are bad to hold. And that its now bad as the virus has crippled it.

Stop making things up. Your interpretation isn't what was written.

Stop being grumpy

The comments were

BarTender:
Just think of the lost funds that could help fund the rebuild that has been lost by selling 49% stakes in many of our productive assets and the recurring revenue that is lost forever.

I don't think many SOEs like Air NZ are going to be paying dividends out for a while.

A comment that is concerned about selling assets and thus selling future revenue. Then a post that Air NZ and other SOEs will stop paying dividends. Implying that its fine to sell assets as out of the blue there is a crisis that stops income. The fact is, if you hold good assets that provide income, thats a good thing. That a 1 in 100 year event occurred doesnt change that.

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#2490553 24-May-2020 16:38

Stupid posts annoy me.

Turning a fairly simple statement (which is of course accurate) into a blanket statement that asset sales are good is stupid.

quickymart

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#2490565 24-May-2020 17:11

Handle9:
quickymart:

And priced reasonably too! Despite what Kiwibuild (and probably a few people on here think), $650,000 is nowhere near what I would call "reasonable". Knock $150,000-$200,000 off that amount and I would be much more interested (and could afford it!).

Lots of those houses exist. They don't, and won't, exist in Auckland.

They should exist here, as that's where the highest demand is.

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#2490566 24-May-2020 17:22

quickymart:
Handle9: >
Lots of those houses exist. They don't, and won't, exist in Auckland.

They should exist here, as that's where the highest demand is.

Are you planning to wave a magic wand and cut land prices in half or should taxpayers subsidize (as opposed to build and sell at close to cost) houses?

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#2490599 24-May-2020 18:01

Handle9:

Are you planning to wave a magic wand and cut land prices in half or should taxpayers subsidize (as opposed to build and sell at close to cost) houses?

Ideally both these things? The more effective you are at the first, the less you'll need to do the latter.

Considering it's in the government's interests to keep NZers here and not have them leave for greener pastures (i.e. where they can actually get decent wages and cheaper housing and not put off families much later than other Kiwis had to), maybe coming to the housing party for Millenials and Zoomers isn't so entirely unreasonable.

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#2490603 24-May-2020 18:10

GV27:
Handle9:

Are you planning to wave a magic wand and cut land prices in half or should taxpayers subsidize (as opposed to build and sell at close to cost) houses?

Ideally both these things? The more effective you are at the first, the less you'll need to do the latter.

Considering it's in the government's interests to keep NZers here and not have them leave for greener pastures (i.e. where they can actually get decent wages and cheaper housing and not put off families much later than other Kiwis had to), maybe coming to the housing party for Millenials and Zoomers isn't so entirely unreasonable.

At the same time you'd wreck many home owners net worth, especially the younger ones with big mortgages.

Mass devaluation of housing in Auckland wouldn't be a good thing for the economy either. The GFC was pretty good evidence of that.

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#2490693 24-May-2020 20:41

So what's your magic solution for the housing shortage in Auckland then, or do you think things are absolutely perfect exactly as they are?

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#2490702 24-May-2020 21:04

quickymart:

So what's your magic solution for the housing shortage in Auckland then, or do you think things are absolutely perfect exactly as they are?

So the two options are cut house prices by 60% or things are fine the way they are? That's silly.

Guess what? There isn't a magic solution and there certainly isn't one that will make everyone happy. There are systemic issues with the New Zealand economy that can't be fixed in one or two years. New Zealand has woeful productivity and chronic business under investment. This leads to a relatively low wage (although wellabove average) economy. It's cheaper to employ more people than invest in technology which will improve productivity and then grow wages. The tax system is also biased towards certain asset classes like housing.

Auckland is also a relatively international city and that leads to the same issues as other international cities - population growth, housing shortages and a high cost of living. In major international cities a large proportion of the population will rent for their entire lives. Believing that a government will "fix" this is delusional. Short of a huge depression that causes massive economic and societal harm it won't get "fixed" in one generation.

Prices will likely temporarily drop 20% at some stage (all asset classes have ups and downs) but when that happens banks will tighten lending criteria and there will be a lot of economic hardship.

If you can't make the numbers work you need to leave Auckland or accept that you will not own a house in Auckland. Is that fair?. No, not at all. It is what it is.

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#2490773 24-May-2020 22:23

Hey, a 20% drop (even 10%-15%) would be a help for me.

Oddly I look back on the 90s and the 00s as the possible "golden time" to buy a house, and now regret that I didn't. Prices were a lot more realistic, and interest rates (according to a mate of mine who purchased a place in 2005) weren't too bad then either. But the population was a lot smaller back then too. A pity the number of houses built didn't keep up with the growth.
You're right, it's not fair. It is what it is, I agree. But that doesn't make it right, does it?

Anyway, I've hijacked this thread enough with my rant on inflated Auckland house pricing. As you were.

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#2490804 24-May-2020 22:55

Handle9:

If you can't make the numbers work you need to leave Auckland or accept that you will not own a house in Auckland. Is that fair?. No, not at all. It is what it is.

The brutal reality is that a lot of people conflate affordability issues for themselves for general issues of affordability. Objectively speaking, plenty of NZers can afford houses in Auckland, given that most houses are being bought by people with citizenship and PR (as the law requires). The true issue is inter-generation fairness where the boomers and older have managed to get into market with objectively far less costs and then used their equity (and political influence) to set up an environment where younger generations are forced to help them cement their gains and then some. The other one is the increasing determinate phenomenon of the "Who's your daddy?" essentially casting one's die in terms of whether you will get into a house.

There are only two ways to fix this: one is for the government to cause a massive drop in house prices -- an example might be to embark on a state house building similar in scale to that the Singaporean government has been doing since Singapore's inception. But even if this is politically acceptable (it won't be), no mainstream NZ party will dare do this for the reasons you gave and, more importantly, no one will be able to find and then marshal the resources required to do so. The second way is for the lower costing regions to be fundamentally reshaped in such a way that they become desirable places to live for people other than parochial locals, so that there's a real brake put on in Auckland's population growth and perceived desirability. Again, whether any government will ever have the ability to do so is quite unclear. Moreover, Auckland for all its problems is consistently rated as a very desirable city to live amongst western world cities for a reason.

Apart from truly edge cases or careers built more around traditional corporate work that is typically only available in Auckland (or at best Wellington in some cases), most people do not absolutely have to live in Auckland. Yes, it will suck that kids don't have ready access to grandparents and the like but if living in one's own house is important enough to someone, in most cases this isn't an unbearable trade-off. And I also reiterate that Kiwis who can't afford a house in Auckland (because this is typically used as a synonym for a home) need to seriously consider adjusting their expectations. It's not some crime against humanity to live in a 60 sq metre apartment as a family of three when you first start out - plenty of people overseas do so. People also can be incredibly snobby/picky when it comes to where they live. The number of young/young-ish Aucklanders who act like living anywhere other than the North Shore or central suburbs is some kind of crime against humanity is rather tragic.

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#2490817 25-May-2020 01:40

quickymart:
Hey, a 20% drop (even 10%-15%) would be a help for me.

Oddly I look back on the 90s and the 00s as the possible "golden time" to buy a house, and now regret that I didn't. Prices were a lot more realistic, and interest rates (according to a mate of mine who purchased a place in 2005) weren't too bad then either. But the population was a lot smaller back then too. A pity the number of houses built didn't keep up with the growth.
You're right, it's not fair. It is what it is, I agree. But that doesn't make it right, does it?

Anyway, I've hijacked this thread enough with my rant on inflated Auckland house pricing. As you were.

I bought my first house in 2006. Interest rates were around 7% I think. They did go up around 10% just before the GFC.

House prices may dip 20% at some point but it will be temporary. Inflation takes care of that. There is no moral dimension to this, it's economics. Economics are Darwinian, you adapt or suffer.

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#2490825 25-May-2020 06:57

quickymart:

Hey, a 20% drop (even 10%-15%) would be a help for me.

Well it might not be - IIRC that's the maximum drop in average house values factored in to the RBNZ "stress test" for stability of the banking system. While at this point in time it's unlikely that the banks will become insolvent or need cash bailouts, in the event of such a (projected) fall in values than it's highly unlikely that banks would be handing out low deposit loans any more, even when RBNZ eases LVR limits etc on individual loans. I believe the stress test also factors in commercial loans - many of which will be looking risky at the moment. It's close to a perfect storm - and I don't think anybody knows what it's going to be like in 6 months let alone in a couple of years. Banks are flush with cash - at the moment.

So it may help you if you've got a large deposit or you're a cash buyer or using equity from an existing home, but for the "first home buyer" seeking a low deposit loan - then it could possibly be a disaster.

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#2490827 25-May-2020 07:02

dejadeadnz:

Apart from truly edge cases or careers built more around traditional corporate work that is typically only available in Auckland (or at best Wellington in some cases), most people do not absolutely have to live in Auckland. Yes, it will suck that kids don't have ready access to grandparents and the like but if living in one's own house is important enough to someone, in most cases this isn't an unbearable trade-off. And I also reiterate that Kiwis who can't afford a house in Auckland (because this is typically used as a synonym for a home) need to seriously consider adjusting their expectations. It's not some crime against humanity to live in a 60 sq metre apartment as a family of three when you first start out - plenty of people overseas do so. People also can be incredibly snobby/picky when it comes to where they live. The number of young/young-ish Aucklanders who act like living anywhere other than the North Shore or central suburbs is some kind of crime against humanity is rather tragic.

This leads to some uncomfortable questions: Why should I have been expected to leave the city of my birth simply to afford a house to own? That hasn't been expected of any other generation of Kiwis in history.

Perhaps people need to adjust their expectations of what is reasonable to people to pay for what is essentially shelter?

Perhaps we should talk about whether it's more important we continue to bank sweet capital gains to finance the retirement of one generation while making another economic refugees within their own borders?

Perhaps we should talk about how 'lower your expectations/look further out' has lead to suburbs that have no transit other than congested local roads or motorways bearing the brunt of intensification while inner city suburbs with gold plated services like Link Bus services fight tooth and nail against it?

I have no qualms with cheap starter flats and apartments, but I'm also old enough to remember your bog standard brick-and-tile unit/flat (which would have been a starter home for many in days gone by) basically doubling in price in two years. We can keep pretending this is normal and that young NZers should just keep lowering their expectations until they're all living on the Chathams in cardboard boxes, or we can accept that maybe things have gotten out of hand.

Fred99

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#2490828 25-May-2020 07:05

From August, you'll be able to build a "sleepout" up to 30M2 - without building consent.
(was formerly up to 10M2).

Handle9

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#2490830 25-May-2020 07:10

GV27:
dejadeadnz:

Apart from truly edge cases or careers built more around traditional corporate work that is typically only available in Auckland (or at best Wellington in some cases), most people do not absolutely have to live in Auckland. Yes, it will suck that kids don't have ready access to grandparents and the like but if living in one's own house is important enough to someone, in most cases this isn't an unbearable trade-off. And I also reiterate that Kiwis who can't afford a house in Auckland (because this is typically used as a synonym for a home) need to seriously consider adjusting their expectations. It's not some crime against humanity to live in a 60 sq metre apartment as a family of three when you first start out - plenty of people overseas do so. People also can be incredibly snobby/picky when it comes to where they live. The number of young/young-ish Aucklanders who act like living anywhere other than the North Shore or central suburbs is some kind of crime against humanity is rather tragic.

This leads to some uncomfortable questions: Why should I have been expected to leave the city of my birth simply to afford a house to own? That hasn't been expected of any other generation of Kiwis in history.

Perhaps people need to adjust their expectations of what is reasonable to people to pay for what is essentially shelter?

Perhaps we should talk about whether it's more important we continue to bank sweet capital gains to finance the retirement of one generation while making another economic refugees within their own borders?

Perhaps we should talk about how 'lower your expectations/look further out' has lead to suburbs that have no transit other than congested local roads or motorways bearing the brunt of intensification while inner city suburbs with gold plated services like Link Bus services fight tooth and nail against it?

I have no qualms with cheap starter flats and apartments, but I'm also old enough to remember your bog standard brick-and-tile unit/flat (which would have been a starter home for many in days gone by) basically doubling in price in two years. We can keep pretending this is normal and that young NZers should just keep lowering their expectations until they're all living on the Chathams in cardboard boxes, or we can accept that maybe things have gotten out of hand.

What is your solution?

No one sensible says the current situation is good but how do you fix it without a heap of negative consequences?

There are levers that central government can pull but if you want a house for 450k in Auckland there are serious downsides to be considered.

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