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  Reply # 1162233 26-Oct-2014 08:28
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Elpie:
Geektastic:
Elpie:
mattwnz:
I believe 8-9% is seen as what rates may go up to in the medium term. But in the 80's we had rates well into the double digits.


My very first house in NZ had a mortgage rate of a hair under 23%. This is higher than most credit card interest rates are now. I doubt we will see interest rates that high again in my lifetime but you never know. 

NZ needs to shake up the whole way mortgages are structured. People here go into them, on low credit costs, and take them out for 25-35 years. This is a generation. It pretty much guarantees that many people hit retirement years still with mortgages. Nobody in their 30's or 40's now can be certain that there will be any government help when they hit retirement but Kiwis go blissfully on, accumulating debt and thinking that the equity tied up in their house is a realisable asset to see them out through old age. Ha! I think some people are in for a shock. 


In order to assess your wisdom, can you please advise me how long you will be living? ;-)


If I had a mortgage that hit 20% + I would probably keel over with a heart attack ;-)


You and me both!





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  Reply # 1162237 26-Oct-2014 08:36
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The thing is that prices can (and do) keep going up.

Look at London - the average house is now $1 million equivalent and rest assured there is no sign of it slowing. Even if the market crashes (as it did there in the early 90's when much negative equity abounded) it comes back.

It's a factor of many things, including a lack of attractive alternatives to property as a way for the average punter to make a few bucks without paying excessive taxes, the slow speed of house building (especially here where it seems to take 12 months to build what amounts to a large wooden shed), a lack of forward planning for housing needs and so forth.

Taxing capital gains is in my view NOT the answer - untaxing things which are presently taxed in order to make attractive alternatives is.





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  Reply # 1162242 26-Oct-2014 08:58
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Remember the 20% mortgages (in the '80s) were when people were buying a full site 3 bdrm house for well under $200k.

20% on a $100-150k is well different to the 3-600k mortgages that are common in Auckland now.




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  Reply # 1162356 26-Oct-2014 12:48
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vendor bidding is pretty dodgy too.

banned in most overseas countries but still legal here.

undecided

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  Reply # 1162418 26-Oct-2014 14:49
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ilovemusic: vendor bidding is pretty dodgy too.

banned in most overseas countries but still legal here.

undecided


So is usury - something illegal in the UK since 1650!





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  Reply # 1162434 26-Oct-2014 15:06
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What about stamp duty

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  Reply # 1162438 26-Oct-2014 15:26
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joker97: What about stamp duty

 

Duno.  Haven't bought any stamps overseas..




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  Reply # 1162439 26-Oct-2014 15:33
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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.

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  Reply # 1162472 26-Oct-2014 16:48
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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.

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  Reply # 1162480 26-Oct-2014 17:07
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joker97: What about stamp duty


That sucks big time.

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





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  Reply # 1162485 26-Oct-2014 17:20
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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.

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  Reply # 1162517 26-Oct-2014 18:06
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Geektastic:
joker97: What about stamp duty


That sucks big time.

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


wasn't saying it's a good idea. just put it out there why hadn't been investigated by people. in fact just put it into a vote.

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  Reply # 1162533 26-Oct-2014 19:30
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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..




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  Reply # 1162537 26-Oct-2014 19:39
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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

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  Reply # 1162538 26-Oct-2014 19:42
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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 ...

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