Our PM Jacinda Ardern (and the government)

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#2679102 23-Mar-2021 11:09

tdgeek:

Re interest, the commentator here nailed it in reverse. Residential home ownership is actually not wanted to be a business. That's half the problem. Leave that to Mum and Dad retirement investors who just want a rental or three that more or less pays itself off and is there for retirement

Mum and Dads who want a rental or three are the problem.

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#2679106 23-Mar-2021 11:16

GV27:

tdgeek:

Re interest, the commentator here nailed it in reverse. Residential home ownership is actually not wanted to be a business. That's half the problem. Leave that to Mum and Dad retirement investors who just want a rental or three that more or less pays itself off and is there for retirement

Mum and Dads who want a rental or three are the problem.

Not everyone wants to, or can afford to buy. Where do those people live?

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#2679114 23-Mar-2021 11:24

GV27:

Mum and Dads who want a rental or three are the problem.

If so there will be no rentals in the market, that wont work. You can live with those that have a couple of rentals, they pay themselves off or near it, they get sold when retirement rolls around. Or you can have those that use the homes market as a stock market, with the benefit that homes won't crash like shares or become unsuccessful and fall in price. Nov /Dec 2020, 66% of sales were to investors. We need investors for rentals but thats way over the top. If therew are too many Mum and Dads, then the measure will probably remove some of those

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#2679143 23-Mar-2021 11:44

networkn:

Not everyone wants to, or can afford to buy. Where do those people live?

If every Mum and Dad didn't rush in and pick up rentals then houses would be a lot cheaper and more people could afford them. That's the point.

Houses don't just disappear if an investor sells them.

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#2679151 23-Mar-2021 11:47

GV27:

networkn:

Not everyone wants to, or can afford to buy. Where do those people live?

If every Mum and Dad didn't rush in and pick up rentals then houses would be a lot cheaper and more people could afford them. That's the point.

Houses don't just disappear if an investor sells them.

I don't agree with your assessment of how much impact those people have on the price of houses.

GV27

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#2679152 23-Mar-2021 11:47

tdgeek:

GV27:

Mum and Dads who want a rental or three are the problem.

If so there will be no rentals in the market, that wont work.

But houses would be massively cheaper for people to own and for community providers to acquire, there'd be fewer renters because more people would own and there'd be less pressure on accommodation supplements.

There is a place for legitimate landlords, but the problem is when everyone starts buying rentals, there's nothing left for people who actually want to buy houses.

At some point, the considerations of property-accumulating investors become secondary, and in a market that can't add supply to save its life, the current situation is immoral.

GV27

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#2679157 23-Mar-2021 11:49

networkn:

I don't agree with your assessment of how much impact those people have on the price of houses.

You can disagree all you like, but these are the facts:

https://www.rbnz.govt.nz/financial-stability/financial-stability-report/fsr2015-05/investors-and-the-new-zealand-housing-market

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#2679165 23-Mar-2021 12:03

GV27:

networkn:

I don't agree with your assessment of how much impact those people have on the price of houses.

You can disagree all you like, but these are the facts:

https://www.rbnz.govt.nz/financial-stability/financial-stability-report/fsr2015-05/investors-and-the-new-zealand-housing-market

A quick scan shows that medium to full time investors control 1/3 of the houses. Let them drop off, that is a huge boost for FHB's. Id imagine the majority of small investors own one or two rentals, and are probably less rent increase hungry than an astute businessman. So you have residents living in houses and residents renting houses, that's a good mix IMO. Its not like anyone is slaying others into financial ruin, its just please invest in businesses, not homes, leave homes for the family and kids. Simplistic I know, but I feel that's the end goal

EDIT 2/3 of Nov/Dec 2020 sales were to investors

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#2679271 23-Mar-2021 13:57

tdgeek:

Thats how I see it.

Rentals will be affected from now with interest changes, so that should drive many non Mum and Dad investors away who run it as a business. If once all this shakes out, and if residential house prices somewhat stabilised, that would be a win. The media articles on real estate will be interesting from now on.

I was a little surprised how aggressive that decision was to be honest. I can understand why landlords aren't happy about that, every other business can deduct it's interest. I suspect it will cool things a little, hard to know how much, but I still think it's pissing on a wildfire honestly.

I wonder if it will mean that rental owners will just pass on that loss of profits to rental increases and make renting more expensive.

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#2679291 23-Mar-2021 14:40

networkn:

tdgeek:

Thats how I see it.

Rentals will be affected from now with interest changes, so that should drive many non Mum and Dad investors away who run it as a business. If once all this shakes out, and if residential house prices somewhat stabilised, that would be a win. The media articles on real estate will be interesting from now on.

I was a little surprised how aggressive that decision was to be honest. I can understand why landlords aren't happy about that, every other business can deduct it's interest. I suspect it will cool things a little, hard to know how much, but I still think it's pissing on a wildfire honestly.

I wonder if it will mean that rental owners will just pass on that loss of profits to rental increases and make renting more expensive.

Hard to know, many moving parts. The idea is that FHB buy the rentals that are sold by landlords exiting that market. As owners increase and renters decrease you'd expect a rental glut, depending how smooth or rough the transition was. That may stem the high rents issue maybe. IF the landlords were selling off quicker than FHB's were buying. The price boom has and will cause some carnage for some (paid too much, now have high mortgage payments and when interest recovers to say 5%, ouch) so Id expect some carnage also in the transition, assuming owners to renters ratio improves. All those FHB's going to open homes are heading towards To Let signs, simplistically.

I actually think it might just work. It comes down to how many landlords get out of residential. If they did in measurable numbers that could take the sting out of prices and rents. But whatever happens it will be in the real estate news section every day for a while.

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#2679295 23-Mar-2021 14:47

I wonder if peoples trust in Ardern will be eroded with her effectively introducing tax by stealth. She was adamant no CGT and now we have CGT effectively.

https://www.newshub.co.nz/home/politics/2021/03/tova-o-brien-jacinda-ardern-and-the-mother-of-all-broken-promises.html

GV27

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#2679314 23-Mar-2021 15:07

networkn:

I wonder if peoples trust in Ardern will be eroded with her effectively introducing tax by stealth. She was adamant no CGT and now we have CGT effectively.

https://www.newshub.co.nz/home/politics/2021/03/tova-o-brien-jacinda-ardern-and-the-mother-of-all-broken-promises.html

I can see her copping flack for this, but the Brightline is technically income tax, even though it functions as a capital gains tax

However, she also promised that the changes they were proposing to the top rate was the extent of her planned income tax changes, so that's the actual, underlying broken promise.

One of the interesting things about the Brightline going through your personal tax return is that those new higher tax brackets could come into play for some people.

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#2679316 23-Mar-2021 15:10

GV27:

One of the interesting things about the Brightline going through your personal tax return is that those new higher tax brackets could come into play for some people.

Yikes, I can see that not going down too well.

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#2679326 23-Mar-2021 15:22

tdgeek:

Hard to know, many moving parts. The idea is that FHB buy the rentals that are sold by landlords exiting that market. As owners increase and renters decrease you'd expect a rental glut, depending how smooth or rough the transition was. That may stem the high rents issue maybe. IF the landlords were selling off quicker than FHB's were buying. The price boom has and will cause some carnage for some (paid too much, now have high mortgage payments and when interest recovers to say 5%, ouch) so Id expect some carnage also in the transition, assuming owners to renters ratio improves. All those FHB's going to open homes are heading towards To Let signs, simplistically.

I actually think it might just work. It comes down to how many landlords get out of residential. If they did in measurable numbers that could take the sting out of prices and rents. But whatever happens it will be in the real estate news section every day for a while.

Something like 85% of landlords only have 1 rental property. Can't see many of those exiting if things like the Healthy Homes changes didn't make them exit. So I can't see many rentals becoming available for FHB.

I've seen several governments in 2 countries try and make houses more affordable and it's never had any effect over an extended period. I have no reason to think that these measures will be any different.

People who want to live in New York or Washington pay a lot of money for the privilege. I really fail to see why Auckland or Wellington should be any different.

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#2679329 23-Mar-2021 15:26

networkn:

I wonder if peoples trust in Ardern will be eroded with her effectively introducing tax by stealth. She was adamant no CGT and now we have CGT effectively.

https://www.newshub.co.nz/home/politics/2021/03/tova-o-brien-jacinda-ardern-and-the-mother-of-all-broken-promises.html

Brightline already existed. So its not really a tax by stealth. The other factor is continuing house inflation a good tradeoff to combat? Treasury wanted 20 years

yes, it can be a broken promise, all depends if the end is worth the means

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