Housing crisis!

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MikeB4

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#870424 2-Aug-2013 07:35

sir1963:
mattwnz:
sir1963:
And there you again have it completely wrong with "rich investors". Most landlords aren't rich.

Whats your definition of rich?

Its all relative, I am sure that to someone from the slums in India you are considered rich.

But as a rough guide, in the top 10% of income.

Landlords are not poor.

alasta

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#870439 2-Aug-2013 08:29

sir1963:
mattwnz:
sir1963:
And there you again have it completely wrong with "rich investors". Most landlords aren't rich.

Whats your definition of rich?

Its all relative, I am sure that to someone from the slums in India you are considered rich.

But as a rough guide, in the top 10% of income.

Income or wealth? I personally think that income is more equitably distributed than wealth in NZ.

Aredwood

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#870500 2-Aug-2013 09:49

Another option, Ring fencing. This would mean that losses made on a rental property can't be offset agianst PAYE income. Short term this would definetly stop house prices from rising. Maybe even cause a crash since those who are depending on recieving tax refunds wont get them anymore. Medium term there will be consoldation in the rental market. Mum and dad investors whos primary income is a PAYE job will get rid of their rentals. And Full time investors whose entire income is from rentals will buy more. Long term rental properties will be of better quality since the big landlords know that better quality rentals get more rent. Rents will rise alot due to upgrades and landlords demand higher returns. Mum and Dad landlords will be rare and the typical landlord will own 100+ properties.

6FIEND

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#870503 2-Aug-2013 09:53

alasta:
sir1963:
mattwnz:
sir1963:
And there you again have it completely wrong with "rich investors". Most landlords aren't rich.

Whats your definition of rich?

Its all relative, I am sure that to someone from the slums in India you are considered rich.

But as a rough guide, in the top 10% of income.

Income or wealth? I personally think that income is more equitably distributed than wealth in NZ.

...and that's a very, very important point!

Having a large income does NOT make you rich. Spending less than you earn is what makes you rich.

(I spent a few years squandering a high income while working overseas... Came home with nothing afterwards...)

crackrdbycracku

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#870518 2-Aug-2013 10:23

Any ideas on the rental Warrant of Fitness?

I think it is possible this will lead to land lords selling off properties which they don't want to spend money bringing up to the new standard. This could be especially true if we are talking about the part-time landlords who don't really want to be involved with property management and maintenance.

This could lead to an increase of low end property for sale which basically can't be bought by other people to rent out. As someone who has rented there are places I have lived in where I have thought "Gee, if we owned it I would love to put the time and money into making this a great home" and I have also thought "Wow, I am really glad I don't own this place. It is fine to live in now but I am very happy we can just move out at the end of the lease because I can see major problems down the track".

I think this will have very interesting consequences in places where buildings are cut up into flats. Buying a house on it's own land which doesn't meet the Warrant of Fitness standard is likely to be a good deal. Do it up and have a nice house. Buying a flat in a larger building, not so much as renovation of one unit would be a nightmare. I can't predict what will happen here. Single units in need of renovation don't make attractive deals for home buyers or banks. Buying a whole block to do up and rent out might be a good deal but that would probably mean the person selling would be making a loss as they are selling under duress as they are being forced to sell or do the place up.

I don't buy the 'this will just mean higher rents' argument as I think that it is too simplistic. I think many of the places which won't make the standard will no longer be rentals but I think the effect on the rental market will be more complicated. For example, if these places are bought by people in rental market removing them from the market it the effect could be minimal as there would be fewer renters being chased by landlords.

There are always unintended consequences from things like this. Anybody see anything?

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Aredwood

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#870626 2-Aug-2013 12:26

crackrdbycracku:do the place up.

I don't buy the 'this will just mean higher rents' argument as I think that it is too simplistic. I think many of the places which won't make the standard will no longer be rentals but I think the effect on the rental market will be more complicated. For example, if these places are bought by people in rental market removing them from the market it the effect could be minimal as there would be fewer renters being chased by landlords.

There are always unintended consequences from things like this. Anybody see anything?

What I was trying to say in my earlier post. (should have expanded it more) Is that the rental market and the property market are not directly connected. IE rising property prices don't always mean higher rents and vice versa. Short term there will be less rentals available. Yet only a small percent of tenants will be able to buy their own home. Problem is whenever the property market starts to tank the banks become a lot tougher on their lending criteria. Houses becoming 20K cheaper is no help when you now need a 20% deposit where a 5% or 10% one would have been fine earlier. The other thing to watch is the banks rules around income Vs mortgage repayments. I have heard of people being unable to buy their first home due to not enough income. Even though the mortgage repayments would have been less than their current rent.

Introducing a rental WOF or ring fencing will be like mana from heaven to the big (100+ houses) land lords and the property trusts. Since there will be both lower property prices and rising rents (due to less available rentals) at the same time. The losers will be tenants. And the mum and dad landlords that own properties that are too expensive to upgrade. It will be another case of the rich get richer, the poor get poorer.

In time it will actually increase home ownership rates but only because rents will be higher in relation to property prices.

mattwnz

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#870663 2-Aug-2013 13:12

alasta:
sir1963:
mattwnz:
sir1963:
And there you again have it completely wrong with "rich investors". Most landlords aren't rich.

Whats your definition of rich?

Its all relative, I am sure that to someone from the slums in India you are considered rich.

But as a rough guide, in the top 10% of income.

Income or wealth? I personally think that income is more equitably distributed than wealth in NZ.

That is a very good point. Many people earn very good wages, but don't save. While many people with lots of savings, (including assets), earn pretty average wages, but have learnt to save and not spend. If you look at many other cultures in NZ, they have far better saving ethics than NZers, and know how to keep costs down. Many NZers could learn a lot from these cultures.

Although the definition of rich is subjective, and depends on your standard of living and what you want to do, several million would probably be the bare minimum in savings to be considered rich in NZ.

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crackrdbycracku

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#870669 2-Aug-2013 13:18

mattwnz:

If you look at many other cultures in NZ, they have far better saving ethics than NZers, and know how to keep costs down. Many NZers could learn a lot from these cultures.

I think of this every time Christmas rolls around and the media talk about retailers hoping for a 'good holiday season'. By the way I'm not having a go at anybody's religion, I am simply talking about the commercial side of Christmas.

I know this is overly simplistic but is the way to generate wealth to indoctrinate people against retail?

We all talk about how people don't need big TVs, bigger car exhausts or (cough) better computers but if we actually dropped retail spending by, say, 20% what would the economy look like?

Didn't anybody tell you I was a hacker?

hangon

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#870675 2-Aug-2013 13:25

KiwiNZ:
sir1963:
mattwnz:
sir1963:
And there you again have it completely wrong with "rich investors". Most landlords aren't rich.

Whats your definition of rich?

Its all relative, I am sure that to someone from the slums in India you are considered rich.

But as a rough guide, in the top 10% of income.

Landlords are not poor.

That's like saying Men are not evil.

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