Jacinda Ardern - our new PM

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774 posts

Ultimate Geek
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#1916659 11-Dec-2017 13:03

Rikkitic:

My thought is they never should have been allowed to get so out of control in the first place, and that is when there should have been intervention. Measures to bring house prices down hurt those who have already bought houses. Far better to keep prices for going up at ridiculous rates.

The question is, How?

By making it illegal to sell your house to someone from another country?

By making it illegal to sell your house to the highest bidder?

By making it illegal to leave a property vacant?

By making it illegal to sell your house within a certain timeframe?

By centralising all property purchases so that only the Government is permitted to buy houses and they can then allocate them based on "need"?

By bulldozing parks & reserves in areas of high demand to build state houses?

By deliberately making NZ an undesirable location to migrate to?

And then the followup question is, to what extent?

How do we measure house prices and what limit is acceptable?

In NZ$? As a percentage of the median wage? By the cost of servicing the mortgage? Regionally? Do we exempt holiday homes? Mobile homes? Caravans?

What is the correct limit? (And why?)

Without an alternative recommendation to be considered, there's not a lot to be gained by simply bemoaning the status quo.

Rikkitic

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#1916660 11-Dec-2017 13:06

MikeB4:

What type of intervention do you believe should have been done and when?

See above. Capital gains, restrictions on foreigners, requirements to build new, many things like this could make a difference if implemented at the right time. The right time was before prices started to take off.

Edit: I am referring to tdgeek. Another post slipped in-between.

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6FIEND

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Ultimate Geek
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#1916661 11-Dec-2017 13:09

tdgeek:

rjt123: People hold out high house prices as an example of failure on the part of the National govt. I'd be interested to know just how much people out there (left and right wing) feel it is appropriate for a government to intervene in the housing market. And what tangible actions should the government have taken. I'm very much a neo-liberal, and believe in laissez-faire economics (e.g. with minimal intervention the house prices in Auckland now appear to be plateauing or dropping even if it took longer than some would like). Thoughts...?

Neo liberalism is not a bad thing, but when its a small country, it becomes very easy for factors to skew matters. Foreign buyers don't need to be here in thousands to affect house prices, a couple per auction will do that. We then see a trend of house prices being expensive for us but cheap for foreigners, so like milk, we pay international prices. That is a fair intervention. Reigning in RMA costs is a fair intervention. Adjusting LVR up or down is fair...

Interesting. These are the two interventions that the previous government made. (One successfully, the other stymied by United Future) Yet you have repeatedly criticised the previous government for not doing anything? Interesting :-)

tdgeek:

especially if you can use that to aid lower income earners, or favour building over existing homes. You have to wonder how some builders go broke in the past climate here. Something is out of balance. If some intervention made it an even playing field for buyers, fair for builders, then let it run itself. This 100,000 homes policy isn't there for you and my to buy a house, its for the many want to be home owners who are now shut out permanently. The fact that house prices are stable is meaningless, that just means that the level of lack of affordability remains stable. Little joy for those that missed out as prices already rose above their modest budget, both in terms of deposit and/or repayment affordability

This is all valid. A significant number of people have missed out.

The 100 Billion dollar question is, "How do you help them without financially ruining the thousands of first-home buyers who got onto the property ladder in the past 3 years or so?"

tdgeek

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#1916662 11-Dec-2017 13:09

6FIEND:

Rikkitic:

My thought is they never should have been allowed to get so out of control in the first place, and that is when there should have been intervention. Measures to bring house prices down hurt those who have already bought houses. Far better to keep prices for going up at ridiculous rates.

The question is, How?

By making it illegal to sell your house to someone from another country?

By making it illegal to sell your house to the highest bidder?

By making it illegal to leave a property vacant?

By making it illegal to sell your house within a certain timeframe?

By centralising all property purchases so that only the Government is permitted to buy houses and they can then allocate them based on "need"?

By bulldozing parks & reserves in areas of high demand to build state houses?

By deliberately making NZ an undesirable location to migrate to?

And then the followup question is, to what extent?

How do we measure house prices and what limit is acceptable?

In NZ$? As a percentage of the median wage? By the cost of servicing the mortgage? Regionally? Do we exempt holiday homes? Mobile homes? Caravans?

What is the correct limit? (And why?)

Without an alternative recommendation to be considered, there's not a lot to be gained by simply bemoaning the status quo.

Very fair points, but you seem to be putting words into her mouth. I gave some suggestions. I dont think anyone is remotely considering your level of intervention suggestions.

MikeB4

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#1916669 11-Dec-2017 13:16

Rikkitic:

MikeB4:

What type of intervention do you believe should have been done and when?

See above. Capital gains, restrictions on foreigners, requirements to build new, many things like this could make a difference if implemented at the right time. The right time was before prices started to take off.

Edit: I am referring to tdgeek. Another post slipped in-between.

Capital gain tax on private home or rental?

Foreigners, do you mean off shore owners or immigrants?

The requirement to build new is valid to a point as it will raise demand for land and will push up the price of land gain raising the cost of housing.

tdgeek

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#1916673 11-Dec-2017 13:18

6FIEND:

tdgeek:

rjt123: People hold out high house prices as an example of failure on the part of the National govt. I'd be interested to know just how much people out there (left and right wing) feel it is appropriate for a government to intervene in the housing market. And what tangible actions should the government have taken. I'm very much a neo-liberal, and believe in laissez-faire economics (e.g. with minimal intervention the house prices in Auckland now appear to be plateauing or dropping even if it took longer than some would like). Thoughts...?

Neo liberalism is not a bad thing, but when its a small country, it becomes very easy for factors to skew matters. Foreign buyers don't need to be here in thousands to affect house prices, a couple per auction will do that. We then see a trend of house prices being expensive for us but cheap for foreigners, so like milk, we pay international prices. That is a fair intervention. Reigning in RMA costs is a fair intervention. Adjusting LVR up or down is fair...

Interesting. These are the two interventions that the previous government made. (One successfully, the other stymied by United Future) Yet you have repeatedly criticised the previous government for not doing anything? Interesting :-)

tdgeek:

especially if you can use that to aid lower income earners, or favour building over existing homes. You have to wonder how some builders go broke in the past climate here. Something is out of balance. If some intervention made it an even playing field for buyers, fair for builders, then let it run itself. This 100,000 homes policy isn't there for you and my to buy a house, its for the many want to be home owners who are now shut out permanently. The fact that house prices are stable is meaningless, that just means that the level of lack of affordability remains stable. Little joy for those that missed out as prices already rose above their modest budget, both in terms of deposit and/or repayment affordability

This is all valid. A significant number of people have missed out.

The 100 Billion dollar question is, "How do you help them without financially ruining the thousands of first-home buyers who got onto the property ladder in the past 3 years or so?"

Bolded point. I have criticised the Govt for letting the market run everything. If I stated not done "anything" ,well thats poetic licence, off course they have done some good and sound things, which I have also said. My mantra for this topic has been has been don't spend, have a surplus, look good. Thats my beef :-)

Its too late to help the house buyers now, as you suggest, we cant force the prices down in some magical or regulated way, two wrongs don't make a right. I would be targeting lower earners that are stuck. These affordable homes that are supposed to be built can do that, and flexible mortgage arrangments to ease the early years, low or no deposit for qualifying buyers, the Govt can underwrite that, its very low risk. LONG term mortgages. get personal with the building industry and look for a way to incentivise them. Revisit RMA bigly.

Rikkitic

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#1916700 11-Dec-2017 13:24

6FIEND:

The question is, How?

By making it illegal to sell your house to someone from another country? No, by making it illegal for someone from another country to buy a house, except under certain conditions.

By making it illegal to sell your house to the highest bidder? No, just making sure the highest bidder is a genuine home buyer (opposed to speculator).

By making it illegal to leave a property vacant? Maybe under specified conditions.

By making it illegal to sell your house within a certain timeframe? Depends, there should always be room for exceptional circumstances.

By centralising all property purchases so that only the Government is permitted to buy houses and they can then allocate them based on "need"? I doubt that would work here.

By bulldozing parks & reserves in areas of high demand to build state houses? Now you are getting silly.

By deliberately making NZ an undesirable location to migrate to? Now you are silly.

And then the followup question is, to what extent?

How do we measure house prices and what limit is acceptable?

In NZ$? As a percentage of the median wage? By the cost of servicing the mortgage? Regionally? Do we exempt holiday homes? Mobile homes? Caravans?

What is the correct limit? (And why?)

I am not an economist but I don't see why some kind of cap could not be put on the annual percentage price rise allowed under exceptional circumstances. Maybe this could be done by slapping a hefty graduated tax on purchase price. If someone pays more than 10% or 20% over previous sale price or valuation or whatever, then they pay an additional whopping surcharge into the government housebuilding fund. This would not penalise the seller (except they wouldn't get double or triple) but it would certainly disincentivise the buyer from paying ridiculous sums. And no, I don't know if it could actually be made to work in practice, but you asked for suggestions so this is one. I am a great believer in where there is a will, there is a way. The previous government had little interest in tackling this problem. They could have found a way if they had wanted to.

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rjt123

517 posts

Ultimate Geek
Inactive user

#1916704 11-Dec-2017 13:29

I strongly support a supply-pull deflation approach that reduces prices over a time, rather than hand limiting demand. Because limiting buyers tends towards discrimination.

What nobody's yet suggested this is decentralization (which contradicts my statement above). There is life outside Auckland and for some? e.g. where I live, there is very little capital gains on property. While the low income earners and their zealous advocates rant and rave about auckland's prices and the government's lack of action, anybody who stays in Auckland is only contributing or sustaining the problem. Where the govt failed to act is in decentralization, supporting people moving out of the main centres into the regions, supporting business in the regions to encourage people to move there. The fact is, NZ house prices aren't unaffordable, Auckland's are. If people really cared they would move out...

6FIEND

774 posts

Ultimate Geek
Inactive user

#1916736 11-Dec-2017 13:46

Rikkitic:

By making it illegal to sell your house to someone from another country? No, by making it illegal for someone from another country to buy a house, except under certain conditions.

Would you mind explaining the difference for me?

Rikkitic:

Now you are silly.

Yes - the suggestions were intended to range from plausible to preposterous. I was trying to gauge the level of government interference that you deemed appropriate. (Not trying to put words into your mouth, as was suggested)

Rikkitic

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#1916762 11-Dec-2017 14:23

I find the notion of being 'tested' by you or anyone else arrogant and slightly offensive. I don't have to prove anything to you. I am not applying for a job or asking for a favour. I think it is time to go do something else for awhile.

Plesse igmore amd axxept applogies in adbance fir anu typos

rjt123

517 posts

Ultimate Geek
Inactive user

#1916785 11-Dec-2017 14:47

Rikkitic:

I find the notion of being 'tested' by you or anyone else arrogant and slightly offensive. I don't have to prove anything to you. I am not applying for a job or asking for a favour. I think it is time to go do something else for awhile.

Labour was clever in making auckland's house prices an election issue, but the question is, are they an issue?

The 'test' for this government is putting their aspirations into actual policy. Like, capital gains tax was bandied around, but it would seem that they decided it wasn't really a relevant solution for NZ.

Rikkitic

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#1916800 11-Dec-2017 14:55

I'm not referring to you.

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tdgeek

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#1916808 11-Dec-2017 15:03

rjt123:

Rikkitic:

I find the notion of being 'tested' by you or anyone else arrogant and slightly offensive. I don't have to prove anything to you. I am not applying for a job or asking for a favour. I think it is time to go do something else for awhile.

lol. I shouldn't laugh, but the reason I asked the question originally was to actually find out some tangible suggestions of what a left leaning person might consider appropriate government intervention in the housing market. Yes it was a test, but if you're not prepared to back up your stance with a practical, real-life insights then how can we consider your views to be of any relevance to society. (sorry that comes across pretty blunt, but ideology is no good if you can't relate it to real life scenarios).

Labour was clever in making auckland's house prices an election issue, but the question is, are they an issue?

The 'test' for this government is putting their aspirations into actual policy. Like, capital gains tax was bandied around, but it would seem that they decided it wasn't really a relevant solution for NZ.

The housing crisis is an NZ issue, it flowed to most places. CGT is silly, its a tax after the problem happened, and its there anyway. But its done and dusted now, the crisis still exists in every shape and form it did in its hiatus.

So, is this crisis an issue? That is all you said. Was it ever? "but if you're not prepared to back up your stance with a practical, real-life insights then how can we consider your views to be of any relevance to society." :-)

Fred99

13684 posts

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#1916812 11-Dec-2017 15:10

rjt123:

Rikkitic:

I find the notion of being 'tested' by you or anyone else arrogant and slightly offensive. I don't have to prove anything to you. I am not applying for a job or asking for a favour. I think it is time to go do something else for awhile.

lol. I shouldn't laugh, but the reason I asked the question originally was to actually find out some tangible suggestions of what a left leaning person might consider appropriate government intervention in the housing market. Yes it was a test, but if you're not prepared to back up your stance with a practical, real-life insights then how can we consider your views to be of any relevance to society. (sorry that comes across pretty blunt, but ideology is no good if you can't relate it to real life scenarios).

Labour was clever in making auckland's house prices an election issue, but the question is, are they an issue?

The 'test' for this government is putting their aspirations into actual policy. Like, capital gains tax was bandied around, but it would seem that they decided it wasn't really a relevant solution for NZ.

Seems like simple basic trolling to me.

Anyway, I'm not playing the game of blame, as the previous Labour Government was just as hopeless and expediently dependent on the concept of letting the housing market enter a bubble, as people owning property make the mistake of treating increased equity in their homes as free money in the bank - and as everybody seems to like free money - make the further mistake that it's a sign of the economy being healthy. National / Key did nothing of any use - and added fuel to the fire.

LVRs were a hopeless idea in terms of housing affordability - and anybody suggesting that those LVRs are responsible for recent reported decrease in demand are dreaming. They (LVR) put first home ownership way out of reach for many young people in major cities, and reduced competition for cashed-up mortgage-free baby boomers (like me BTW) to buy rentals - and it seems that many of my peers have done exactly this - bought more rentals seeking the untaxed free money in what they see as an investment on which they can't lose.

LVRs were implemented to protect the integrity of the banking system - that they would or could significantly affect house price inflation was political spin.

rjt123

517 posts

Ultimate Geek
Inactive user

#1916816 11-Dec-2017 15:24

lol. I shouldn't laugh, but the reason I asked the question originally was to actually find out some tangible suggestions of what a left leaning person might consider appropriate government intervention in the housing market. Yes it was a test, but if you're not prepared to back up your stance with a practical, real-life insights then how can we consider your views to be of any relevance to society. (sorry that comes across pretty blunt, but ideology is no good if you can't relate it to real life scenarios).

Labour was clever in making auckland's house prices an election issue, but the question is, are they an issue?

The 'test' for this government is putting their aspirations into actual policy. Like, capital gains tax was bandied around, but it would seem that they decided it wasn't really a relevant solution for NZ.

The housing crisis is an NZ issue, it flowed to most places. CGT is silly, its a tax after the problem happened, and its there anyway. But its done and dusted now, the crisis still exists in every shape and form it did in its hiatus.

So, is this crisis an issue? That is all you said. Was it ever? "but if you're not prepared to back up your stance with a practical, real-life insights then how can we consider your views to be of any relevance to society." :-)

I don't run away from controversial statements I make... so the reason I raised that question was because we think housing in greater auckland needs to be affordable, but nobody complains about housing in parnell or herne bay being unaffordable, people accept those suburbs as being 'exclusive'. The whole world is the housing market, if owning a house means anything to you go somewhere where they are affordable. The rhetoric in the election was owning a house was almost a 'constitutional right' and if somebody couldn't afford to buy one then the government was a failure. However, people seem to confuse the basic right of shelter and comfort with the more complex issue of home ownership. Owning a house has always been a luxury, something one has always had to work hard for, affordability is simply relevant to how hard you are prepared to work, and I believe if anybody is prepared to put in the hard yards (and yes it will take years to save up, and yes, you might have to give up some other luxuries, and yes it's definitely better to start saving from the first day you start working, so no, it's not going to be 'easy').

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