Jacinda Ardern - our new PM

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#1916820 11-Dec-2017 15:29

Fred99:

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.

I agree to a point, but it did reduce demand, by how much, nobody knows, as the election and winter also decrease demand. However, it wont decrease demand for those who have plenty of equity, that just increased the deposits cheque. As you say, it has removed demand from those who could squeak into their purchase, but now cannot buy what is likely to be an affordable option, but now the deposit is too big, again. From here, the reduced interest from foreignors will help. BUT, how many residents are foreign and are using wealthy parents funds?

What do you mean by untaxed free money, re rentals? You can claim expenses, and you get CGT'ed, where is the free money?

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#1916826 11-Dec-2017 15:39

The housing crisis was caused by people, not Government.

Everyone wanted on the housing ladder regardless of what it cost or if they could afford it. It was purchase at any cost. Personally I believe it was the banks who encouraged it by offering people cheap money to people who couldnt afford it.

If people stopped buying because they couldnt afford it, then prices would NOT have gone crazy.

This story is far from over yet. What we need is interest rate movement of say 2% and watch everyone scream for government assistance.

I remember Bill English warning people to hold of purchasing for 12 months, but nobody was listening.

The crash will come and it will be the banks that cause the pain.

Reciprocity

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#1916832 11-Dec-2017 15:46

6FIEND:

Generally speaking, when you're reduced to attacking the messenger and petty name-calling rather than addressing the points made, you may as well pack up and go home.

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.

Arrogant would be pointing out that you’re simply proving his point!

rjt123

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#1916838 11-Dec-2017 15:55

Rentals are not subject to CGT. You can buy a property, rent it out and flick it off at a reasonable margin, and u only pay tax on the rental income.

tdgeek

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#1916841 11-Dec-2017 15:56

Pumpedd:

The housing crisis was caused by people, not Government.

Everyone wanted on the housing ladder regardless of what it cost or if they could afford it. It was purchase at any cost. Personally I believe it was the banks who encouraged it by offering people cheap money to people who couldnt afford it.

If people stopped buying because they couldnt afford it, then prices would NOT have gone crazy.

This story is far from over yet. What we need is interest rate movement of say 2% and watch everyone scream for government assistance.

I remember Bill English warning people to hold of purchasing for 12 months, but nobody was listening.

The crash will come and it will be the banks that cause the pain.

I agree. Humans are humans, but OTOH, if they wanted a house they could afford, why not? Its not like everyone ran the the auctions in a frenzy. My main cause was foreign money, being happy to pay any price as it was still cheap to them, we saw it on TV many times over the reign of this. That was artificial, not NZ supply and demand.

There won't be a crash. The prices are now set in stone, unless interest rates jump a lot over a short time, which they wont. If they creep up, then some will trade down, but this wont be huge house price decreases. The lower end, who are now off the market due to affordability, a few may get back in, especially if the Govt aids them. The banks wont suffer as while they will be at risk, its a paper risk, until there is a mortgagee sale. They can extend mortgages, give repayment holidays, to keep people in their homes. Their credit rating will reduce, that will cost them some $

tdgeek

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#1916844 11-Dec-2017 16:03

rjt123: Rentals are not subject to CGT. You can buy a property, rent it out and flick it off at a reasonable margin, and u only pay tax on the rental income.

What will the Brightline test be this year, next year, in 3 years? If I was to buy a few rentals, I want to know that I can exclude myself from having to own them for an extended period, rather than have that change on me.

tdgeek

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#1916851 11-Dec-2017 16:22

On reflection, I took @Fred99 post too literally, it sounded like a too good to be true idea to buy rentals now, as his peers are doing. We only buy rents for capital gain, there is no other reason. With the prices, a CG will take a long while. Rents could easily ease once the so called 100,000 affordable homes kicks in. With prices today, many might give up and just buy a fixer upper. Where is a good place add more homes? Rental market. Make rentals less viable, they get sold off, and it wont generally be to the rich and famous. Brightline can change to achieve that, too many unknowns. But interesting to hear what some feel is a boom time to buy rentals. Oh, and the new rules for safer dryer homes, plus what else will be added to that.

Equinox IT

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MikeB4

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#1916854 11-Dec-2017 16:28

Pumpedd:

The housing crisis was caused by people, not Government.

Everyone wanted on the housing ladder regardless of what it cost or if they could afford it. It was purchase at any cost. Personally I believe it was the banks who encouraged it by offering people cheap money to people who couldnt afford it.

If people stopped buying because they couldnt afford it, then prices would NOT have gone crazy.

This story is far from over yet. What we need is interest rate movement of say 2% and watch everyone scream for government assistance.

I remember Bill English warning people to hold of purchasing for 12 months, but nobody was listening.

The crash will come and it will be the banks that cause the pain.

If they cannot buy where are they going to live? there is not enough rental properties now and investors are being asked to invest elsewhere so the shortfall will become bigger and the cost of housing will increase, a lot.

Pumpedd

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#1916858 11-Dec-2017 16:36

MikeB4:

Pumpedd:

The housing crisis was caused by people, not Government.

Everyone wanted on the housing ladder regardless of what it cost or if they could afford it. It was purchase at any cost. Personally I believe it was the banks who encouraged it by offering people cheap money to people who couldnt afford it.

If people stopped buying because they couldnt afford it, then prices would NOT have gone crazy.

This story is far from over yet. What we need is interest rate movement of say 2% and watch everyone scream for government assistance.

I remember Bill English warning people to hold of purchasing for 12 months, but nobody was listening.

The crash will come and it will be the banks that cause the pain.

If they cannot buy where are they going to live? there is not enough rental properties now and investors are being asked to invest elsewhere so the shortfall will become bigger and the cost of housing will increase, a lot.

Keep renting. People who were/are paying 1mill for an auckland house can afford to rent. That means staying where they are for a bit longer. These arent the homeless people.

Its simple...if you cannot afford something dont buy it. If you do buy it and interest rates increase dont cry when you lose it.

Its a fallacy about overseas buyers....they make up less than 5% of all purchasers. Sure they help push up prices, but not as much as kiwis borrowing more than they can afford because of some notion they MUST be on the property ladder NOW.

I have been burned in a similar way during the sharemarket boom/crash in the 80's.

MikeB4

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#1916859 11-Dec-2017 16:45

Pumpedd:

MikeB4:

Pumpedd:

The housing crisis was caused by people, not Government.

Everyone wanted on the housing ladder regardless of what it cost or if they could afford it. It was purchase at any cost. Personally I believe it was the banks who encouraged it by offering people cheap money to people who couldnt afford it.

If people stopped buying because they couldnt afford it, then prices would NOT have gone crazy.

This story is far from over yet. What we need is interest rate movement of say 2% and watch everyone scream for government assistance.

I remember Bill English warning people to hold of purchasing for 12 months, but nobody was listening.

The crash will come and it will be the banks that cause the pain.

If they cannot buy where are they going to live? there is not enough rental properties now and investors are being asked to invest elsewhere so the shortfall will become bigger and the cost of housing will increase, a lot.

Keep renting. People who were/are paying 1mill for an auckland house can afford to rent. That means staying where they are for a bit longer. These arent the homeless people.

Its simple...if you cannot afford something dont buy it. If you do buy it and interest rates increase dont cry when you lose it.

Its a fallacy about overseas buyers....they make up less than 5% of all purchasers. Sure they help push up prices, but not as much as kiwis borrowing more than they can afford because of some notion they MUST be on the property ladder NOW.

I have been burned in a similar way during the sharemarket boom/crash in the 80's.

The housing issues are affecting mainly first home owners. If we tighten the conditions for them to enter they will stay renting, that means less rental units available resulting in higher and higher rental cost. Increasing interest rates to stop house buying would be a very silly notion and create considerable hardship and again place greater demand on a rental market that already has a simply and demand deficit.

Fred99

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#1916875 11-Dec-2017 17:29

It's not going to be government policy which increases interest rates - with the proviso that the government could, if they were to run fiscal policy which increased debt / damaged NZ credit rating etc - we will inevitably be affected by what happens with interest rates overseas.

The low rates we have now aren't "normal" - they're an aberration and ongoing consequence of central bank reaction to the GFC, and subsequent reluctance to increase rates while economic growth is low. NZ housing is (probably) a bubble - but it (probably) isn't the only one. If any of those (probable) bubbles burst, then anything can happen - except this time central banks can't do much to save us from ourselves.

Rikkitic

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#1916934 11-Dec-2017 18:45

I was pulled away by a medical emergency but I also don't run when challenged on something I have said. Nor do I obediently jump through whatever hoops someone else sees fit to put in my way. I am prepared to defend my ideas, or to change them if necessary. I am not prepared to jump just because someone tells me to. If anyone has a genuine question about my ideas or beliefs, I will do my best to answer it, but I don't have much patience for game-playing.

Plesse igmore amd axxept applogies in adbance fir anu typos

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#1916947 11-Dec-2017 19:50

tdgeek:
On reflection, I took @Fred99 post too literally, it sounded like a too good to be true idea to buy rentals now, as his peers are doing. We only buy rents for capital gain, there is no other reason. With the prices, a CG will take a long while. Rents could easily ease once the so called 100,000 affordable homes kicks in. With prices today, many might give up and just buy a fixer upper. Where is a good place add more homes? Rental market. Make rentals less viable, they get sold off, and it wont generally be to the rich and famous. Brightline can change to achieve that, too many unknowns. But interesting to hear what some feel is a boom time to buy rentals. Oh, and the new rules for safer dryer homes, plus what else will be added to that.

Certainly no other reason in NZ

We used to rent our flat in the UK out for 60% more than the mortgage but rents in NZ aren't high enough to make a living that way.

Fred99

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#1916995 11-Dec-2017 20:51

Geektastic:
tdgeek:

On reflection, I took @Fred99 post too literally, it sounded like a too good to be true idea to buy rentals now, as his peers are doing. We only buy rents for capital gain, there is no other reason. With the prices, a CG will take a long while. Rents could easily ease once the so called 100,000 affordable homes kicks in. With prices today, many might give up and just buy a fixer upper. Where is a good place add more homes? Rental market. Make rentals less viable, they get sold off, and it wont generally be to the rich and famous. Brightline can change to achieve that, too many unknowns. But interesting to hear what some feel is a boom time to buy rentals. Oh, and the new rules for safer dryer homes, plus what else will be added to that.

Certainly no other reason in NZ

We used to rent our flat in the UK out for 60% more than the mortgage but rents in NZ aren't high enough to make a living that way.

Yes I agree. That's despite the fact that the NZ taxpayer subsidises rent payments by way of the accommodation supplement, to the tune of several billion dollars a year. According to the "supply:demand" theory of real estate rental value, that government intervention is actually keeping rental prices (and returns to landlords) much higher than laissez-faire economics should do. But that's the kind of extreme interventionist policy in the housing market that the Key National government seemed to support. Incredible.

Then they have the absolute gall to criticise Labour's current suggestions to intervene...

tdgeek

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#1916998 11-Dec-2017 21:01

Geektastic:
tdgeek:

On reflection, I took @Fred99 post too literally, it sounded like a too good to be true idea to buy rentals now, as his peers are doing. We only buy rents for capital gain, there is no other reason. With the prices, a CG will take a long while. Rents could easily ease once the so called 100,000 affordable homes kicks in. With prices today, many might give up and just buy a fixer upper. Where is a good place add more homes? Rental market. Make rentals less viable, they get sold off, and it wont generally be to the rich and famous. Brightline can change to achieve that, too many unknowns. But interesting to hear what some feel is a boom time to buy rentals. Oh, and the new rules for safer dryer homes, plus what else will be added to that.

Certainly no other reason in NZ

We used to rent our flat in the UK out for 60% more than the mortgage but rents in NZ aren't high enough to make a living that way.

Rarely has been here. I had a rental ay 19yo. You cant make money off renting, its the CG that matters.

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