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#1162542 26-Oct-2014 19:56

joker97: what greed. if one had the chance to make money they would take it. i don't blame the real estate agents. their commission is a percentage of the sale price.

PS i don't own anything in AKL or CHCH

Yes but some can play tricks and a crafty to get the price up. For example I know someone who is currently trying to buy a house under negotiation. However the agent has told them that they are l 'expecting another offer' , and it is likely that it may have to move into a tender situation. However the buyers don't think there is another offer. The agent has just said, they are 'expecting another offer' which could mean anything. So they have told the agent if it goes to a tender situation, they will take their offer off the table, so their offer isn't used as a tool to price up, if indeed there is another offer. Really it is one big game. I have yet to find an agent that I would trust. Banks don't help their, because they are just throwing around the cash, as they are so flush with mum and dad money.

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#1162543 26-Oct-2014 19:59

joker97:
old3eyes: One of the main reasons house pricing is so high in Auckland is that the Realtors play on the greed of the seller telling them that they can get way more by going to auction than selling the traditional way with a fixed price and of course inflating their commission. You even see the agencies advertizing on TV that they can get x% more that other agencies.. companies..

the ONLY reason for rising prices is demand > supply.

10 houses in Epsom for sale, 100,000 people want it.

the ONLY way to drop the price is: reduce demand - either you make it illegal to buy houses, or you make people NOT want to buy houses; OR increase supply: which is not possible in microlocalities. there are only so many houses in Epsom.

but if every month you have 10 people with 10 million bucks immigrating into AKL, well ...

True, but there is nothing being done at all to fix this problem. No GST on new builds may help, but isn't enough, as their are monopolies and duopolies in the building products sectors. We pay up to triple for drywall than they do in the US for the same product. Some retailers do now import some of it, and it is slightly cheaper.

It is also overseas investors buying houses, without even coming to NZ to see it. When I was at school, some of the students families puchased quite a few houses. So they don't just stop at one house either. I would like to see only NZers be allowed to buy houses, they do restrict them overseas. I would like to see overseas buyers only allowed to buy houses if they build them eg new builds. That should increase new builds.

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#1162544 26-Oct-2014 20:02

I agree with the agent and trustworthy is mutually exclusive.

But that alone cannot push up prices by 200%.

mattwnz

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#1162548 26-Oct-2014 20:08

joker97: I agree with the agent and trustworthy is mutually exclusive.

But that alone cannot push up prices by 200%.

It doesn't, but that 200% has happened over a number of years. Also they do build fear into it, eg if you don't buy now you will never be able to afford to buy in the future. So that causes panic and people wanting to spend as much as they bank will lend them, to buy a house.
There are also now all the compliance costs RMA, building code changes etc, which make new builds a lot more expensive than they used to be, and often makes buying an existing house a cheaper alternative. Basically it is very difficult to build a new decent house (not your cheapest spec house) for under 400k. Add on land which could range anywhere between $250-500k , and you are talking the best part of three quarters of the million. So existing houses can look a better proposition for investors at least

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#1162576 26-Oct-2014 20:54

mattwnz:
joker97: I agree with the agent and trustworthy is mutually exclusive.

But that alone cannot push up prices by 200%.

It doesn't, but that 200% has happened over a number of years. Also they do build fear into it, eg if you don't buy now you will never be able to afford to buy in the future. So that causes panic and people wanting to spend as much as they bank will lend them, to buy a house.

yes, but still doesn't drive up prices by scaring poor first home buyers.

some people, from somewhere, with a lot of money, are buying up large. that's what drives up prices. demand > supply.

so where do these people come from.

well first of all globally the population is exponentially (not linear) increasing. a fraction of these people have a lot of money. if 1% of China people (I'm just using them because it's easier to show, I have no facts or figures) have a lot of money and they want to move out, that's 1/100 of 1 billion, ie 10 million people with money who wants to move out. now these people have a lot of money. these people also exist everywhere, 1% of USA, Russians, Kiwis.

Some of them their goal is to make money, some of them want holiday places, some of them wants to live in clean air (have you lived in London, Beijing, Singapore, you will know what i mean, otherwise don't comment). The holiday people won't buy in AKL, but maybe near Lake Wakatipu or something.

Some people are wanting AKL houses. That's why the prices are up. Not some big bully playing with your mind. Yes they do, but that doesn't drive up prices.

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#1162579 26-Oct-2014 20:58

And if you thnk these people are suddenly going to desert AKL, not so easy. Unless a global crunch that specifically affect AKL home owners, unlikely. not impossible though, just need to wait for the next global crunch, then my prediction is it will flatten a bit, but not crash, unless something extraordinary happens, like NZ bankrupt or all companies shut shop and go away or volcano eruption or something, but even that is covered by insurance, and as you see in Chch, doesn't make the rich any poorer in the long run. the flatten could be a big issue for people overstretched who didn't expect the unexpected, but my guess is the large proportion of owners are pretty rich and will probably just snap up the misery of the overstretched, and it carries on.

CHCH, well, I'm not sure what's driving prices there. I cannot see immigration as a factor - why immigrate when the infrastructure is broken - maybe middle class jobs have mushroomed causing an increase in renters and being bought by investors, well I don't know. Time will tell. If jobs continue to mushroom with no decline prices will stay, ie people don't move out.

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#1162614 26-Oct-2014 22:20

mattwnz:
joker97:
old3eyes: One of the main reasons house pricing is so high in Auckland is that the Realtors play on the greed of the seller telling them that they can get way more by going to auction than selling the traditional way with a fixed price and of course inflating their commission. You even see the agencies advertizing on TV that they can get x% more that other agencies.. companies..

the ONLY reason for rising prices is demand > supply.

10 houses in Epsom for sale, 100,000 people want it.

the ONLY way to drop the price is: reduce demand - either you make it illegal to buy houses, or you make people NOT want to buy houses; OR increase supply: which is not possible in microlocalities. there are only so many houses in Epsom.

but if every month you have 10 people with 10 million bucks immigrating into AKL, well ...

True, but there is nothing being done at all to fix this problem. No GST on new builds may help, but isn't enough, as their are monopolies and duopolies in the building products sectors. We pay up to triple for drywall than they do in the US for the same product. Some retailers do now import some of it, and it is slightly cheaper.

It is also overseas investors buying houses, without even coming to NZ to see it. When I was at school, some of the students families puchased quite a few houses. So they don't just stop at one house either. I would like to see only NZers be allowed to buy houses, they do restrict them overseas. I would like to see overseas buyers only allowed to buy houses if they build them eg new builds. That should increase new builds.

Where do you think that they restrict them?

You can buy a house in the USA or the UK, for example. And anyone in the EU can buy in any other EU state.

That is two very big markets.

I know you cannot in some places like Vietnam - but I do not really think I want NZ compared to Vietnam.

The question you need to answer is not how can I stop foreign nationals buying it is "why are they richer than me?".

If you legally restrict my property rights, I will expect compensation if it results in my asset losing value.

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#1162615 26-Oct-2014 22:22

mattwnz:
joker97: what greed. if one had the chance to make money they would take it. i don't blame the real estate agents. their commission is a percentage of the sale price.

PS i don't own anything in AKL or CHCH

Yes but some can play tricks and a crafty to get the price up. For example I know someone who is currently trying to buy a house under negotiation. However the agent has told them that they are l 'expecting another offer' , and it is likely that it may have to move into a tender situation. However the buyers don't think there is another offer. The agent has just said, they are 'expecting another offer' which could mean anything. So they have told the agent if it goes to a tender situation, they will take their offer off the table, so their offer isn't used as a tool to price up, if indeed there is another offer. Really it is one big game. I have yet to find an agent that I would trust. Banks don't help their, because they are just throwing around the cash, as they are so flush with mum and dad money.

One day when you are selling a house and benefitting from the sale tricks you'll probably not be complaining...!

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#1162616 26-Oct-2014 22:25

mattwnz:
joker97: proponents of CGT have not mentioned pros and cons of graduated stamp duty. 1.5% of the first 300k, 2.5 for next 100k, 4% for next 100k, 5% 500k-1mil, 6% 1-3 mil, 7% above 3 mil is a rough guide. applied every transaction. just do it to akl and chch.

Totally agree with stamp duty, especially in areas of pricing bubbles, mainly auckland. But the big problem is that government bring these taxes in and then they don't get updated when situations change. They have to be proactive. The good thing about stamp duty is that it can be tuned to certain areas to certain areas. Perhaps not having stamp duty on lower valued properties though is better. In the UK I believe stamp duty only applies once you go over 250k pounds ($NZ 500k), so it means that a lot of people only pay for certain properties up to the stamp duty threshold. Capital gains tax is a blanket tax and is very expensive and complex to administer, and likely to not have much effect. The other thing I would of is remove GST on new builds in certain areas.

Stamp Duty begins at GBP 125,001 (NZ$ 250,000 approx) with a rate of 1%

The average London house would be attracting a Stamp Duty charge of 4%.

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#1162618 26-Oct-2014 22:28

mattwnz:
Geektastic:
joker97: What about stamp duty

That sucks big time.

Paying a transaction tax on every house sale is just annoying, trust me!

It could be used though only in certain areas, and for hogh priced houses. It is a type of regulation, to prevent big problems with house prices getting too far out of control, without putting caps on how much a house can be sold for. It is certainly better than CGT. AT the end of the day, you have to pay tax, whether that is in rates, or GST on home maintenance and repairs etc.

Why bother?

Easier to have a mortgage rate surcharge administered by the banks under the Reserve Bank.

Any loan over say $500,000 for buying property within the city limits attracts a 1% interest rate surcharge.

That 1% is returned to the government at the end of the year as a contribution to funding the city infrastructure etc.

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#1162621 26-Oct-2014 22:31

mattwnz:
Geektastic:
joker97: What about stamp duty

That sucks big time.

Paying a transaction tax on every house sale is just annoying, trust me!

It could be used though only in certain areas, and for hogh priced houses. It is a type of regulation, to prevent big problems with house prices getting too far out of control, without putting caps on how much a house can be sold for. It is certainly better than CGT. AT the end of the day, you have to pay tax, whether that is in rates, or GST on home maintenance and repairs etc.

Also, ask anyone in the SE of England if they think it has prevented big problems with house prices getting out of control!

Neither SD nor CGT have that effect, much as their proponents wish they did: the only effect they really have is to raise cash from our pockets for governments to waste.

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#1162628 26-Oct-2014 22:43

Geektastic:
mattwnz:
Geektastic:
joker97: What about stamp duty

That sucks big time.

Paying a transaction tax on every house sale is just annoying, trust me!

It could be used though only in certain areas, and for hogh priced houses. It is a type of regulation, to prevent big problems with house prices getting too far out of control, without putting caps on how much a house can be sold for. It is certainly better than CGT. AT the end of the day, you have to pay tax, whether that is in rates, or GST on home maintenance and repairs etc.

Also, ask anyone in the SE of England if they think it has prevented big problems with house prices getting out of control!

Neither SD nor CGT have that effect, much as their proponents wish they did: the only effect they really have is to raise cash from our pockets for governments to waste.

If it provided an income stream that raised money to be invested in strengthening the provincial areas this could be a good thing. Auckland needs infrastructure too, and money has to come from somewhere.
For years, central government has been off-loading responsibilities onto local government but not sending the funding along with it. So, as the ratepayer base has decreased in some areas it's become impossible for core services to be maintained. Which leads to businesses moving and people moving to stay employed. Yeah, I've simplified things because the issue has many factors but as long as provincial NZ is ignored by central government the move to Auckland will continue. The housing market in Auckland cannot cool down as long as demand keeps increasing.

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#1162642 26-Oct-2014 23:42

Elpie:
Geektastic:
mattwnz:
Geektastic:
joker97: What about stamp duty

That sucks big time.

Paying a transaction tax on every house sale is just annoying, trust me!

It could be used though only in certain areas, and for hogh priced houses. It is a type of regulation, to prevent big problems with house prices getting too far out of control, without putting caps on how much a house can be sold for. It is certainly better than CGT. AT the end of the day, you have to pay tax, whether that is in rates, or GST on home maintenance and repairs etc.

Also, ask anyone in the SE of England if they think it has prevented big problems with house prices getting out of control!

Neither SD nor CGT have that effect, much as their proponents wish they did: the only effect they really have is to raise cash from our pockets for governments to waste.

If it provided an income stream that raised money to be invested in strengthening the provincial areas this could be a good thing. Auckland needs infrastructure too, and money has to come from somewhere.
For years, central government has been off-loading responsibilities onto local government but not sending the funding along with it. So, as the ratepayer base has decreased in some areas it's become impossible for core services to be maintained. Which leads to businesses moving and people moving to stay employed. Yeah, I've simplified things because the issue has many factors but as long as provincial NZ is ignored by central government the move to Auckland will continue. The housing market in Auckland cannot cool down as long as demand keeps increasing.

With something in the vicinity of 25% of the population in one city NZ is fairly unique.

Assuming we sell our house here we are likely to be moving up there because basically if you aren't there, you may as well not be here at all in terms of business etc.

There's no way to undo it now - the process is far too advanced.

A rethink on LG funding is needed: personally I think we need to move away from the ludicrous idea that the value of your house has any connection at all with what you should pay for local government. If 10,000 adults live in a council area, those 10,000 people should be paying one equal share each of the cost of providing the services after any central government funding.

Anything else is illogical and unfair.

mattwnz

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#1162658 27-Oct-2014 00:07

Geektastic:
mattwnz:
joker97:
old3eyes: One of the main reasons house pricing is so high in Auckland is that the Realtors play on the greed of the seller telling them that they can get way more by going to auction than selling the traditional way with a fixed price and of course inflating their commission. You even see the agencies advertizing on TV that they can get x% more that other agencies.. companies..

the ONLY reason for rising prices is demand > supply.

10 houses in Epsom for sale, 100,000 people want it.

the ONLY way to drop the price is: reduce demand - either you make it illegal to buy houses, or you make people NOT want to buy houses; OR increase supply: which is not possible in microlocalities. there are only so many houses in Epsom.

but if every month you have 10 people with 10 million bucks immigrating into AKL, well ...

True, but there is nothing being done at all to fix this problem. No GST on new builds may help, but isn't enough, as their are monopolies and duopolies in the building products sectors. We pay up to triple for drywall than they do in the US for the same product. Some retailers do now import some of it, and it is slightly cheaper.

It is also overseas investors buying houses, without even coming to NZ to see it. When I was at school, some of the students families puchased quite a few houses. So they don't just stop at one house either. I would like to see only NZers be allowed to buy houses, they do restrict them overseas. I would like to see overseas buyers only allowed to buy houses if they build them eg new builds. That should increase new builds.

Where do you think that they restrict them?

You can buy a house in the USA or the UK, for example. And anyone in the EU can buy in any other EU state.

That is two very big markets.

I know you cannot in some places like Vietnam - but I do not really think I want NZ compared to Vietnam.

The question you need to answer is not how can I stop foreign nationals buying it is "why are they richer than me?".

If you legally restrict my property rights, I will expect compensation if it results in my asset losing value.

Well I believe they restrict them in some Australian states for a start. http://www.exfin.com/australian-property-firb . I believe that is on an already established property, and not on building a new one. I wouldn't be againest this sort of law change. Also I don't believe you can buy property in China. You maybe able to buy in the USA, but they have pretty big restrictions on people living there.

I would doubt any government would pay any compo, as when the government changes rules, they are done to fix a problem and to benefit the majority of NZers. It would be almost impossible to prove what amount you may have lost anyway, by not selling to an overseas investor. I didn't get any compo when they changed my lifetime drivers license to 10 years, and now have to pay to renew it every 10 years, when I had previously paid for it up until about 2050.

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#1162760 27-Oct-2014 08:53

joker97: what greed. if one had the chance to make money they would take it. i don't blame the real estate agents. their commission is a percentage of the sale price.

PS i don't own anything in AKL or CHCH

When you're selling something there's always greed regardless of whether it's a house or TV sets and the like in retail. You'll always try to extract the maximum price you can and house actions are the worst example of it..

Regards,

Old3eyes

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