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12806 posts

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  Reply # 1391365 21-Sep-2015 15:31
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gzt: The comments about immigrants here are really silly. Migrants are and should be able to buy their own house/apartment just like anyone else.

 

I think the arguments are about people overseas buying houses, not people actually living here, and are buying for a capital gain, and the earnings from rent. But there is a major issue as to whether the governments should be allowing so many people into NZ, when we don't have the housing stock for current people living here in Auckland, which is proven by the out of control pricing. Also whether they should be allowed to settle in Auckland where there is a housing shortage, when other areas have far more affordable housing. If you put 10,000 people into Wellington for example, it is going to create jobs, new schools will be needed, more super markets etc, so the argument that there won't be jobs for them out of Auckland doesn't really ring true to me.

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  Reply # 1391366 21-Sep-2015 15:33
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gzt: The comments about immigrants here are really silly. Migrants are and should be able to buy their own house/apartment just like anyone else.


You miss the point. Residents yes, non residents no. A father buying a nice house for a 17yo student to live for two years, then to flick it off, no. Allowing wealthy people who will just pay whatever the price is, is not the way to go. Prices then become wealthy peoples prices. Probably seem cheap compared to the city they come from. Imagine a hoard of Londoners or Hong Kongers comong here, they would probably be happy to pay 50% more than todays AKL prices, what a bargain. It falls apart as you have AKL costs and wages, but you have foreign housing proces as the basis to bid at auction. Sopmeone here saod AKL wages are to low based on house proces. I dont think so, ask the foreigners who can afford the prices what their income is, its high. Thats the imbalance. And note my wife is foreign. Its not the NZ population/economy deciding house prices in a free market. IMO

 
 
 
 


gzt

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  Reply # 1391367 21-Sep-2015 15:35
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I agree it is a factor but children staying at home longer is partly explained by an increase in education.

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  Reply # 1391370 21-Sep-2015 15:37
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MikeAqua: Realistically, there will be no government (Red or Blue) solution to the Auckland housing issue.  Who really wants to be the politician that slashes the value of a whole lot of people's houses?

Personally, I think Auckland's problem is a transport one.  In other major cities around the world, people in low to middle income jobs who work in high rent areas generally live in cheaper (often outlying) areas of a city and train/bus in. 

Auckland doesn't really have that option at the moment.  The train system is pretty minimal, and buses run on the same congested roads as the cars, with minimal bus only lanes.  As an example, it is significantly slower (and not that much cheaper) to take the bus Airport-CBD return than to hire a small car.


It won't happen, because the banks will then be in trouble if people owe more than the house is worth. But they should have been harder on the banks lending. Auckland has many problems, but it is also arguably NZ's most successful city. And this is despite Auckland being a Supercity. I wonder is Aucklands success is at least in part due to it being a Super City. If you look at Wellington, it has been on  a downward track for the last 5 years, and it has just voted down becoming a Supercity, when it may have benefited them. However Wellington was previously envied by Auckland, but now it now seems to be the otherway around. I am sure people in Wellington would have loved their house prices to have increased 40% in few years.

gzt

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  Reply # 1391378 21-Sep-2015 15:51
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tdgeek:
gzt: The comments about immigrants here are really silly. Migrants are and should be able to buy their own house/apartment just like anyone else.


You miss the point. Residents yes, non residents no. A father buying a nice house for a 17yo student to live for two years, then to flick it off, no. Allowing wealthy people who will just pay whatever the price is, is not the way to go. Prices then become wealthy peoples prices. Probably seem cheap compared to the city they come from. Imagine a hoard of Londoners or Hong Kongers comong here, they would probably be happy to pay 50% more than todays AKL prices, what a bargain. It falls apart as you have AKL costs and wages, but you have foreign housing proces as the basis to bid at auction. Sopmeone here saod AKL wages are to low based on house proces. I dont think so, ask the foreigners who can afford the prices what their income is, its high. Thats the imbalance. And note my wife is foreign. Its not the NZ population/economy deciding house prices in a free market. IMO

I'm not missing the point. There are plenty of people legally working here in full time permanent positions who do not yet have resident status. These people should not be denied the ability to purchase a home. In any case this number who purchase is relatively small and it will not make a huge difference in the market.

If you are talking about overseas investment that is a very different category from actual people.

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  Reply # 1391381 21-Sep-2015 15:54
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I think all our discussions are guesswork and moot because no one has any real statistic, and secondly, the horse has truly bolted, barring a "correction" as predicted by some. I on the other hand, don't forsee one. PS I don't own anything.

gzt

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  Reply # 1391400 21-Sep-2015 16:14
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tdgeek:

The parents buying a house for use of children while studying is an interesting case. Would you feel the same if they were making very little or nothing on it in that two years? Since your concern is about rising prices, probably not.

It is clear we have under investment in new housing as evidenced by consistently rising dwelling occupancy rates. There are plenty of statistics on dwelling occupancy. That is a standard census question forever. The situation has been coming for a long long long time.

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  Reply # 1391404 21-Sep-2015 16:19
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joker97:
TeaLeaf: Same I got no issue with people getting ahead. but how does need reform. as does a correction on foreign investing and taxation on non principal housing.

i did a quick line from early 90s, i think a correction of around 40% would put the market back on track to its historical trend prior to the last 13 years.



Again, you have to super impose that line on major world cities. Perth, New York, Vancouver, London, Singapore, etc etc


Don't forget Tokyo, Dublin...


To be honest, the main thing that concerns me and convinces me that we've got a problem, is the denial and "can't lose" mentality of those in up to their hocks.
I've spent most of my life in NZ.  Seems like the same people saying the same thing over and over - "can't lose" about different things...
Angora goats, pine trees, the sharemarket in '87, assorted pyramid selling schemes, "Blue Chip / SCF" etc post GFC, dairy farms last year, perhaps the All Blacks, I'm sure I've missed a lot.
The concept of free money seems deeply ingrained in our national psyche. 

gzt

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  Reply # 1391409 21-Sep-2015 16:35
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That psychology is just an artifact of any rising market. People look around see other people doing well and do the same thing and think it will never end.

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  Reply # 1391451 21-Sep-2015 16:59
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gzt:
tdgeek:
gzt: The comments about immigrants here are really silly. Migrants are and should be able to buy their own house/apartment just like anyone else.


You miss the point. Residents yes, non residents no. A father buying a nice house for a 17yo student to live for two years, then to flick it off, no. Allowing wealthy people who will just pay whatever the price is, is not the way to go. Prices then become wealthy peoples prices. Probably seem cheap compared to the city they come from. Imagine a hoard of Londoners or Hong Kongers comong here, they would probably be happy to pay 50% more than todays AKL prices, what a bargain. It falls apart as you have AKL costs and wages, but you have foreign housing proces as the basis to bid at auction. Sopmeone here saod AKL wages are to low based on house proces. I dont think so, ask the foreigners who can afford the prices what their income is, its high. Thats the imbalance. And note my wife is foreign. Its not the NZ population/economy deciding house prices in a free market. IMO

I'm not missing the point. There are plenty of people legally working here in full time permanent positions who do not yet have resident status. These people should not be denied the ability to purchase a home. In any case this number who purchase is relatively small and it will not make a huge difference in the market.

If you are talking about overseas investment that is a very different category from actual people.


They are not residents.  I dont see how someone can have a permanent job and no PR. I can ask my wife, she is in that industry

I wanna buy a house, I got 500k. You as well, you got 500k. I may got to 520, you may got to 515. At auction it goes for well over and we will never have the chance to buy at the proper price, thats my argument. Imagine if at auction are bidders from  HKG, NYC, Monte Carlo, Beijing . Our prices are awesome, 750 for thast, wow yeah. Like milk we end up paying international prices

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  Reply # 1391455 21-Sep-2015 17:22
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So what would a conservative amount to borrow based on the following?
Deposit $240k
Income $130k
Do the maths on 20 year term at 8%?
3x income plus deposit?

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  Reply # 1391459 21-Sep-2015 17:31
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joker97: I think all our discussions are guesswork and moot because no one has any real statistic, and secondly, the horse has truly bolted, barring a "correction" as predicted by some. I on the other hand, don't forsee one. PS I don't own anything.


Although really only in Auckland. Christchurch a bit too, but that is due to an exceptional circumstances, and prices there are correcting now. But as they say, the prices won't increase forever, and the bigger the rise, the bigger the impact on people if there is a major correction. The other thing is people are borrowing at 4%, and thinking that interest rates will stay low. But what if they go up to 8-10%, then people will be really hurting to make payments. Personally I wouldn't touch the Auckland market as a buyer,  I would rent or look to live somewhere else. Do I wish I had purchased 10 years ago, heck yes, but noone can predict these sorts of things accurately.  The problem is many people are buying solely for a big capital gain in a short period of time, but with a house you live in, you may not get any depending on when you buy it, and when you sell it. Also there are ongoing costs with owning a home, so you don't necessarily come out of a house ahead, but you have had the use of it during that time.

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  Reply # 1391460 21-Sep-2015 17:32
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it all depends on what you are happy repaying every fortnight

on a 800k house your paying back about $2160 a fortnight at 8% over 20 years, which is about 1/2 of your take home income. if you can manage that then go for it.

you could take the mortgage out at todays interest rate (3 years for 4.79%) which is only $1670 per fortnight and then just pay the higher value of what it would be at 8% . It saves you 5 years on the mortgage (if the rates stay the same) and saves you about $110k.

gzt

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  Reply # 1391468 21-Sep-2015 18:16
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tdgeek:
gzt:
tdgeek:
gzt: The comments about immigrants here are really silly. Migrants are and should be able to buy their own house/apartment just like anyone else.


You miss the point. Residents yes, non residents no. A father buying a nice house for a 17yo student to live for two years, then to flick it off, no. Allowing wealthy people who will just pay whatever the price is, is not the way to go. Prices then become wealthy peoples prices. Probably seem cheap compared to the city they come from. Imagine a hoard of Londoners or Hong Kongers comong here, they would probably be happy to pay 50% more than todays AKL prices, what a bargain. It falls apart as you have AKL costs and wages, but you have foreign housing proces as the basis to bid at auction. Sopmeone here saod AKL wages are to low based on house proces. I dont think so, ask the foreigners who can afford the prices what their income is, its high. Thats the imbalance. And note my wife is foreign. Its not the NZ population/economy deciding house prices in a free market. IMO

I'm not missing the point. There are plenty of people legally working here in full time permanent positions who do not yet have resident status. These people should not be denied the ability to purchase a home. In any case this number who purchase is relatively small and it will not make a huge difference in the market.

If you are talking about overseas investment that is a very different category from actual people.


They are not residents.  I dont see how someone can have a permanent job and no PR. I can ask my wife, she is in that industry

I wanna buy a house, I got 500k. You as well, you got 500k. I may got to 520, you may got to 515. At auction it goes for well over and we will never have the chance to buy at the proper price, thats my argument. Imagine if at auction are bidders from  HKG, NYC, Monte Carlo, Beijing . Our prices are awesome, 750 for thast, wow yeah. Like milk we end up paying international prices

There are a range of visas where you are resident and may be working but do not have permanent resident status. You may be working towards permanent resident for example. These people can and should be able to buy a home. There should be no restriction there.

In the case of foreign investment - I think investment is better directed to new housing than existing property. Let the investor take risk that is what investment is for and reward in exchange. The prime minister has indicated a blanket law on that part will not be possible after we sign the TPP and it will have to be done by other means. The prime minister has suggested a 20% stamp duty. Ie; a 20% sticker price tax on external residential investors.

The reality is - as evidenced by rising dwelling occupancy for many years - that there is under investment in new housing.



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  Reply # 1391478 21-Sep-2015 18:35
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mattwnz:  I am sure people in Wellington would have loved their house prices to have increased 40% in few years.


you mean in a few months? haha.

i think Auck have trebled in a few years and doubled in 6 months? unless the graphs im looking at are wrong.

and back on CGT, who cares if its slippery slope. you dont pay it on your PRINCIPAL place of residence, and its a fraction of your income percentage in OZ and if you are making income buying and selling houses why on earth shouldnt you get taxed?

its like saying "oh i buy and sell things from overseas, tax, why should i be taxed, its only income", yet we are ok paying tax on expenditure. GST. totally backward.

CGT isnt designed to stop people buying investments, its an incentive for people not to FLIP houses, which is whats happening in Auckland right now, buy a house and sell it for more before its even settled.

what happened buy and hold 20y and retire on the income from the properties? auckland is buy and sell within a few months. and that should be taxed.

those figures for japan and dublin are frightning.

and just on time, the latest news from Fonterra!

now what are we going to do in Auckland to justify our pathetic $80k salaries that only pay half of our mortgage, geeze i hope interest rates dont treble if things do hit the fan.



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