Electoral Party most likely to do something about Auckland housing bubble?

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#1542886 27-Apr-2016 16:12

mattwnz:
joker97: Have we discussed only allowing foreign buyers to build new ( in this thread)?

I think I suggested that earlier on. It make so much sense, and they do it in Oz as well. But not sure if it breaches the TPPA. It sounds like the only way to get around the TPPA is additional taxes, rather than restrictions.

I'm curious about this also. My recollection is Labour proposed a 20% tax or similar and then the prime minister stating that it was not possible under TPPA to have different rules for local and foreign investment. Did something change or is this just political carryon?

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TeaLeaf

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#1542890 27-Apr-2016 16:19

mattwnz:

I can see a lot of poorly designed 'houses', I can see a repeat of the leaky building thing occurring with some of these big developments which are cost driven.

or 1 bedrooom units designed for 1 person being divided into 2 bedroom units. we want quality housing in nz not lowering the standard of living?

this is NZ which can easily keep its quality of life, not a city of 20 million people who need to be jammed into every nook and cranny?

1. Trains/Infrstructure

2. Satellite cities

3. Change in making it hard to immigrate to Auck

vs apartments

every day of the week for me. Let everyone every have a slice of quiet easy life nz.

ockel

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#1542912 27-Apr-2016 16:35

TeaLeaf:

mattwnz:

I can see a lot of poorly designed 'houses', I can see a repeat of the leaky building thing occurring with some of these big developments which are cost driven.

or 1 bedrooom units designed for 1 person being divided into 2 bedroom units. we want quality housing in nz not lowering the standard of living?

this is NZ which can easily keep its quality of life, not a city of 20 million people who need to be jammed into every nook and cranny?

1. Trains/Infrstructure

2. Satellite cities

3. Change in making it hard to immigrate to Auck

vs apartments

every day of the week for me. Let everyone every have a slice of quiet easy life nz.

Both 1 and 2 are trying to be addressed. The councils 10 year plans over the last 3 or 4 years have been about establishing satellites in Papakura (and Pukekohe) and Silverdale. Train frequency from the south and bus frequency from the North have both been increased significantly over that time. Add to that the attempts to redesign the bus routes and frequency to get a proper feeder system to the transport backbone.

But these are things that take the full 10 years of a 10 year plan given resource consenting, public consultation and budgetary restrictions. All they do is catchup to where things should have been.

The sweeping changes to increase housing density would have been a great chance to increase the ability to supply but quashed by the NIMBY's who want more affordable housing but not replacement stock of duplexes and triplexes out their window.

Has the question of divorcing land and house ownership been discussed? At breaking points in the past both her and in other cities the issue of using leasehold mechanisms to overcome housing affordability has been used. And owning leasehold works well in other parts of the world - its less desirable than freehold but more desirable than not owning anything. NZers just dont know how to value leases and pay over-the-top for the improvements during a leaseperiod.

Or is the big sticking point not about owning your own home - but owning the land?

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Geektastic

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#1542913 27-Apr-2016 16:41

surfisup1000:

Geektastic:

surfisup1000:

Geektastic:

In what way would this be different from just about any other country on earth?

Which countries have 2 class societies?

If it's rich and poor you're talking about, almost all of them I would think.

Most countries have a middle class, making them 3 class societies.

Problems happen when most of the country are rich or poor and not much in the middle.

Probably you did not read or understand what I wrote.

Oh, I read it. I'll comment in detail if you like. Apologies for the caps.

Given there is no easy fix, i'm fascinated in the end-game scenarios.

Is NZ heading towards a fractured society? Where the population self segregates based on wealth and school choices for children. ALREADY HAPPENS IN UK, USA, GERMANY, FRANCE etc WHO WANTS TO LIVE AMONGST PEOPLE WITH WHOM THEY HAVE NOTHING IN COMMON? The intelligent and rich will generally prosper AS THEY ARE WONT TO DO SINCE STUPID PEOPLE TEND NOT TO PROSPER, and we'll end up a 2 class society -- rich and poor JUST LIKE THE USA

There may be great unrest between the havesand have nots ALWAYS HAS BEEN. The govt will naturally try to protect the status quo but it could get quite ugly HAPPENED BEFORE - SEE WAT TYLER AND THE PEASANTS REVOLT, 1381 FOR EXAMPLE . Maybe in two or three generations time when the consequences of what is happening today will have structurally altered society. POSSIBLY.

gzt

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#1543090 27-Apr-2016 22:38

Liam Dann, an NZ Herald Business editor has some idea what the future looks like.

It is here already:

NZ Herald: Next door to me, in my once working-class West Auckland suburb, a large four-bedroom house on a full section has been sitting empty for more than 12 months. A year ago it was one of the first $1 million sales in our neighbourhood. The owner is listed as having six properties around Auckland. Meanwhile over the back fence in our local park, a small band of homeless people has quietly set up camp among the trees. Well, relatively quietly, if you don't count the odd fire or stand-off with the local kids.

Geektastic

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#1543105 27-Apr-2016 23:11

gzt: Liam Dann, an NZ Herald Business editor has some idea what the future looks like.

It is here already:

NZ Herald: Next door to me, in my once working-class West Auckland suburb, a large four-bedroom house on a full section has been sitting empty for more than 12 months. A year ago it was one of the first $1 million sales in our neighbourhood. The owner is listed as having six properties around Auckland. Meanwhile over the back fence in our local park, a small band of homeless people has quietly set up camp among the trees. Well, relatively quietly, if you don't count the odd fire or stand-off with the local kids.

I'd say that, to a lot of us who have lived elsewhere, it has been here most of our lives. I cannot remember a time in the UK when this was not the case, depending on where you lived. There are whole cities there which are regarded as the equivalent of the park over the fence in your example by the residents of more genteel parts!

surfisup1000

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#1543174 28-Apr-2016 08:44

Geektastic:

Oh, I read it. I'll comment in detail if you like. Apologies for the caps.

Given there is no easy fix, i'm fascinated in the end-game scenarios.

Is NZ heading towards a fractured society? Where the population self segregates based on wealth and school choices for children. ALREADY HAPPENS IN UK, USA, GERMANY, FRANCE etc WHO WANTS TO LIVE AMONGST PEOPLE WITH WHOM THEY HAVE NOTHING IN COMMON? The intelligent and rich will generally prosper AS THEY ARE WONT TO DO SINCE STUPID PEOPLE TEND NOT TO PROSPER, and we'll end up a 2 class society -- rich and poor JUST LIKE THE USA

There may be great unrest between the havesand have nots ALWAYS HAS BEEN. The govt will naturally try to protect the status quo but it could get quite ugly HAPPENED BEFORE - SEE WAT TYLER AND THE PEASANTS REVOLT, 1381 FOR EXAMPLE . Maybe in two or three generations time when the consequences of what is happening today will have structurally altered society. POSSIBLY.

I'm just theorizing of course-- I believe there may have been a permanent structural change in the economy that will cause the disappearance of the middle classes in cities.

The economic system has shifted to favour those with capital as opposed to those who labour. ie, many people earn more from just owning a house than actually working for a living.

Another alternative, there could be a market crash in house price and asset price collapse around the world. This could be triggered by a China economic meltdown and will be far worse than the 2008 GFC. NZ banks will collapse, elderly will lose their savings, unemployment will rocket to unprecedented levels as the economy seizes. However, in the long term this may be a better outcome. Short term, perhaps not.

UHD

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#1543193 28-Apr-2016 09:24

surfisup1000:

Geektastic:

Oh, I read it. I'll comment in detail if you like. Apologies for the caps.

Given there is no easy fix, i'm fascinated in the end-game scenarios.

Is NZ heading towards a fractured society? Where the population self segregates based on wealth and school choices for children. ALREADY HAPPENS IN UK, USA, GERMANY, FRANCE etc WHO WANTS TO LIVE AMONGST PEOPLE WITH WHOM THEY HAVE NOTHING IN COMMON? The intelligent and rich will generally prosper AS THEY ARE WONT TO DO SINCE STUPID PEOPLE TEND NOT TO PROSPER, and we'll end up a 2 class society -- rich and poor JUST LIKE THE USA

There may be great unrest between the havesand have nots ALWAYS HAS BEEN. The govt will naturally try to protect the status quo but it could get quite ugly HAPPENED BEFORE - SEE WAT TYLER AND THE PEASANTS REVOLT, 1381 FOR EXAMPLE . Maybe in two or three generations time when the consequences of what is happening today will have structurally altered society. POSSIBLY.

I'm just theorizing of course-- I believe there may have been a permanent structural change in the economy that will cause the disappearance of the middle classes in cities.

The economic system has shifted to favour those with capital as opposed to those who labour. ie, many people earn more from just owning a house than actually working for a living.

Another alternative, there could be a market crash in house price and asset price collapse around the world. This could be triggered by a China economic meltdown and will be far worse than the 2008 GFC. NZ banks will collapse, elderly will lose their savings, unemployment will rocket to unprecedented levels as the economy seizes. However, in the long term this may be a better outcome. Short term, perhaps not.

I believe that all economic systems favour those with capital above those who labour. The wealthy have always made more money sitting in their houses than those who work all day. The phrase having money makes money is true even for someone who unambitiously dollar cost averages their entire lives.

MikeAqua

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#1543269 28-Apr-2016 10:54

Residential property is a very secure investment. The main risk that banks consider is the ability of the mortgagee to make repayments.

You used to be able to get 99% mortgages. But the reserve bank has changed the rules, which has effectively increased deposit requirements.

ajobbins:

MikeAqua:

What would be nice is to have some investment opportunities available in NZ that compete with housing for security and growth.

Indeed. Imagine if all the capital pumped into a booming property market was instead put into PRODUCTIVE investments that actually stimulated the economy.

But I think the "security" of the housing market isn't what people think it is today. If it was truly secure, 100% finance, or close to it, would be commonplace.

Mike

MikeAqua

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#1543281 28-Apr-2016 11:23

UHD:

I believe that all economic systems favour those with capital above those who labour. The wealthy have always made more money sitting in their houses than those who work all day. The phrase having money makes money is true even for someone who unambitiously dollar cost averages their entire lives.

That will always be the case. A person earning only wages or salary is constrained by the hours they can work.

But capital investments can grow exponentially, they earn (or lose) money whatever you are doing.

The thing is people who work can get into the capital side of things by investing in Kiwisaver. If nothing else you roughly double your money to the contribution level your employer matches. The thing is to start early.

I started small funds for both my kids in time to get the $1,000 kick-start and I chip in a little money every now and then.

Mike

MikeAqua

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#1543290 28-Apr-2016 11:35

There is leased residential housing in NZ. For example a number of properties around Cornwall Park are on leased land. Leases are typically 10s of years rather than 100s of years (as I understand is often the case in Europe).

It can go pear shaped when 'rent review' comes around and market value has jumped significantly (as it did for Cornwall Park lessees), or when the lessor doesn't want to renew the lease (as happened with a number of lakeside batches on iwi land in Rotorua Lakes).

If you have invested in a house built on land you no longer have a right or can afford rentals to occupy then what?

ockel:

Has the question of divorcing land and house ownership been discussed? At breaking points in the past both her and in other cities the issue of using leasehold mechanisms to overcome housing affordability has been used. And owning leasehold works well in other parts of the world - its less desirable than freehold but more desirable than not owning anything. NZers just dont know how to value leases and pay over-the-top for the improvements during a leaseperiod.

Or is the big sticking point not about owning your own home - but owning the land?

Mike

sir1963

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#1543317 28-Apr-2016 11:53

gzt: Liam Dann, an NZ Herald Business editor has some idea what the future looks like.

It is here already:

NZ Herald: Next door to me, in my once working-class West Auckland suburb, a large four-bedroom house on a full section has been sitting empty for more than 12 months. A year ago it was one of the first $1 million sales in our neighbourhood. The owner is listed as having six properties around Auckland. Meanwhile over the back fence in our local park, a small band of homeless people has quietly set up camp among the trees. Well, relatively quietly, if you don't count the odd fire or stand-off with the local kids.

It is probably better financially to have it empty than risk a "tenant" set up a P-lab.

Landlords need better protection from bad tenants , if you have one who damages the property, fails to pay rent etc, it is up to the landlord to try and track them down and you are NOT entitled to information from Police or WINZ.

A better solution is you apply to the tenancy tribunal, and if they have done a runner and they can not be found/don't turn up then its no different than today, but what happens is the government pays out and they then recover the money from benefits/wages.

There are only 2 groups of people who will invest in rental housing, landlords or the government. Landlords are opting out because there are better investments, or ones with significantly less hassle, e.g. empty houses.

ajobbins

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#1543351 28-Apr-2016 12:41

andrew027: Unfortunately, no matter how high the income to house price ratio gets, it's still not that hard to buy a house - minimal deposits and interest only loans see to that.

If you have capital, perhaps - but not if you're a first home buyer. Trying to save $80-100k whilst paying rent, bills and a student loan will take people of average wages probably a decade or more living reasonably frugally. And the problem at the moment is house prices are growing so fast (an in Auckland and some other areas the average house is earning more per week that the average person) that you have to grow your saving to keep up with 20% of the price growth as well.

Twitter: ajobbins

MikeAqua

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#1543359 28-Apr-2016 12:50

I'm very, very picky about tenants and that's for a middling property in a small town - photo ID, landlord references, credit check, proof of income, maximum bond.

A third of prospective tenants bolt the minute they hear the words 'credit check' ... says a lot.

I never rent to any household with less than $60,000 annual income before tax (~minimum wage full time x 2).

For my part I maintain the property to a high standard, have the lawns mowed and provide good white-ware if the tenants don't have their own.

It has worked so far. No deliberate/reckless damage, no unpaid rent. Good tenants.

sir1963:

gzt: Liam Dann, an NZ Herald Business editor has some idea what the future looks like.

It is here already:

NZ Herald: Next door to me, in my once working-class West Auckland suburb, a large four-bedroom house on a full section has been sitting empty for more than 12 months. A year ago it was one of the first $1 million sales in our neighbourhood. The owner is listed as having six properties around Auckland. Meanwhile over the back fence in our local park, a small band of homeless people has quietly set up camp among the trees. Well, relatively quietly, if you don't count the odd fire or stand-off with the local kids.

It is probably better financially to have it empty than risk a "tenant" set up a P-lab.

Landlords need better protection from bad tenants , if you have one who damages the property, fails to pay rent etc, it is up to the landlord to try and track them down and you are NOT entitled to information from Police or WINZ.

A better solution is you apply to the tenancy tribunal, and if they have done a runner and they can not be found/don't turn up then its no different than today, but what happens is the government pays out and they then recover the money from benefits/wages.

There are only 2 groups of people who will invest in rental housing, landlords or the government. Landlords are opting out because there are better investments, or ones with significantly less hassle, e.g. empty houses.

Mike

TeaLeaf

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#1543489 28-Apr-2016 16:12

ockel:

Or is the big sticking point not about owning your own home - but owning the land?

interesting question. you do see leaseholds pop up occasionally.

at the moment its so much cheaper to rent than buy its ridiculous. i think you could be onto it with the ideal of "owning your own home".

there are intrinsic things to it i guess people wont let go of, or its part of our culture.

the only thing im not a fan of is massive apartments or apartments with low levels of living space. we built a cyber high way for a reason. it just not a good quality of life, noise, inaccessibility, disputes, etc. long term i mean, raising a family in an apartment when we can all have a slice of beautiful NZ to grow a vege patch. we just dont need to grow upward any further in NZ.

i think slowly the older gen managers are moving out of corps and the newer gen get cyber commuting and i think eventually (like everything in NZ) it will help. along with the Train and Satellite city model.

MikeAqua:

Residential property is a very secure investment. The main risk that banks consider is the ability of the mortgagee to make repayments.

Usually Id agree, until you see a near vertical spike with no end in sight in a country that has no justification (outside RE propaganda). But even if you lose 30% if you bought the house 30 years ago you are still ahead of the game. Its the ones as you probably well know that buy properties on 10% that are at risk at the moment, but likely those investors have some kind of trust structure so they dont personally have to pay for the gamble. Thats why Id never enter a RE market where I cant protect myself by buying at least 20% under market value and having the property at 50% ownership. To me its like running any other business and what you learn at Uni bcom first thing is the 51/49 rule of ownership.

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