Johnny Moore: I blame baby boomers for housing mess

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#1597535 24-Jul-2016 01:52

Linuxluver:

tdgeek:

WTF?

Sorry.

I bought a house when I was 18 with me mate. Sold it as we were immature, but the rent money was great.

Bought another at 23, and another this year, that cost a bunch, and not in AKL

And I as a baby boomer are to blame? I placed a large deposit on first house, 40% cash, an old place in two flats, and on first home that we lived in.

Current place is freehold. So why are baby boomers to blame?

Perhaps I should have not bought, thereby not to blame. probably a click bait at Stuff

Baby boomers voted the neo-liberal policies that have - generally - transferred wealth upward to the few. At the same time they cut the programs they (baby boomers) had benefited from and gave themselves tax cuts. But they voted for industrial and employment polices that weakened unions, flattened wages for the past 10-15 years and reduced job security for most workers.

At the same time they also voted for polices that sees tertiary students mired in debt for most of their 20s and into their 30s....at the same time they are trying to start a family and save for a house. It was always obviously complete madness. We only live so long...and mired in debt for 10-15 years of it while young and starting out was never going to be good. Meanwhile, the baby boomers got degrees for $129 / year, plus books. I know this first hand.

OK...not all baby boomers vote(d) for these crap policies.....and not all people who voted for this rubbish were baby boomers, either.

But it fits, near enough. Who is voting for National now? Whoever they are, they ARE voting for more of them same. They are the ones to blame...and will continue to be the ones to blame if National wins in 2017.

Could not have said it better myself. Agree 1000%.

On top of what others have pointed to, I'll add that baby Boomers as a group own several times more wealth than do the younger groups and seek to maintain that lead while at the same time bemoaning the 'lazyness' of the rest.

My grandmother - of the generation BEFORE the baby boomers - new the hardship of the younger generations we have now. The Great Depression. She always said she 'feared for the young people today', when referring to the actions of her children's generation (the baby boomers). They have, as a group, made a religion of "greed is good".

Well, no one said they were smart. It'll be their indebted, starved and homeless grand children working for subsistence wages that will be looking after them in the rest homes. I bet they'll be full of the milk of human kindness, having been fed a diet of neo-liberal dogma, user pays, cars-as-homes and disenfranchisement all their lives..............

BarTender

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#1597544 24-Jul-2016 07:32

My personal favorite argument is always "Home ownership has always been hard"
When house prices were sub 5 times the median wages then I agree to a degree.
Then I hear the "20% interest rate" argument. But 20% of twice your wage is a bit different to 5% of 10x + your wage.
Since 2002 things started going crazy in Auckland. In the last 4 years it's just got more insane from speculation.
When a house earns more than twice what you do net per year... Then you have some major institutional problems.

Fred99

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#1597549 24-Jul-2016 08:21

Plenty of truth in it.

I don't believe however that there's been any plot - neo-liberal or otherwise, just evolution, and that's of the concept that debt is OK, and that because it stimulates business.

The "neo-liberal" tag should probably be slapped on the "new" left more than conservatives. Access to easy credit was supposed to be a good thing, as it was a way to break-down barriers to achieving equality of opportunity. It hasn't worked very well - IMO.

tdgeek

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#1597551 24-Jul-2016 08:26

Go back when times were supposedly good. More affordable homes, baby boomers bought them. Thats normal. Who was running the country then? Not baby boomers. Perhaps the previous generation is to blame. Or put the blame to baby boomers who bought, saved, invested, thanks to the older generation then, who ran the place

Linuxluver

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#1597682 24-Jul-2016 12:44

DaveB:

Nothing's changed. Bitched and moaned about the "old gits" 30 years ago ..... woke up and decided to take responsibility for myself. It really is quite simple really. If I win, I win. If I fail, I only have myself to blame. End of.

Spoken like a true rat in a maze.

"What maze?"

That. Right there. Lift your eyes. Whether you succeed or fail isn't down to you alone...the world around you plays a huge role in setting the odds...and making the rules...and they can change any time.

It's not always your fault. That's the point.

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I've been on Geekzone over 16 years..... Time flies....

afe66

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#1597711 24-Jul-2016 13:37

tdgeek:

Go back when times were supposedly good. More affordable homes, baby boomers bought them. Thats normal. Who was running the country then? Not baby boomers. Perhaps the previous generation is to blame. Or put the blame to baby boomers who bought, saved, invested, thanks to the older generation then, who ran the place

The parents of the baby boomers were in charge

The ones who fought in WW2 and saw fellow NZers of many walks of life die in horrible ways.

Who then when the war ended cared for the wider community and brought in programmes such as social housing.

Unlike the baby boomers who had an easier run of employment, didnt really have to mix with those of different classes, who didnt go the same fancy schools and so made it easier to demonise section of the communities they didnt mix with.

When push comes to shove they dont really care about other in the way that the war generation did.

mattwnz

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#1597712 24-Jul-2016 13:43

When baby boomers die that wealth will be transferred down to the younger generations. Many baby boomers had their money in finance companies prior to the crash and many lost most of their savings. Now many have that money in investment properties. But when / if there is a major housing correction they potentially could lose out big time again.

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mattwnz

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#1597713 24-Jul-2016 13:45

tdgeek:
Go back when times were supposedly good. More affordable homes, baby boomers bought them. Thats normal. Who was running the country then? Not baby boomers. Perhaps the previous generation is to blame. Or put the blame to baby boomers who bought, saved, invested, thanks to the older generation then, who ran the place

There are several reason why house prices are high. But that will change as these things go on cycles. The thing is house prices don't always go up, and when there is a glut of house supply prices will come back. If you are a good investor you never buy at the top of the market, you wait for a correction.

richms

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#1597716 24-Jul-2016 13:51

mattwnz: When baby boomers die that wealth will be transferred down to the younger generations. Many baby boomers had their money in finance companies prior to the crash and many lost most of their savings. Now many have that money in investment properties. But when / if there is a major housing correction they potentially could lose out big time again.

That is the risk with any investment.

However people seem to think that property should be different. We have people wanting the council to fix broken houses they bought/built that then leaked. They want the council to prevent other people using their land in ways that may affect the values of their investment. Objecting to building of more housing - again, because of the value of the ones that they own.

They do not spend on their investment complaining that it is costing them to fix leaks and insulate, all the time the capital gains are accruing at a rate greater than many people earn at a 40 hour week.

I don't feel sorry for those that are loaded up with investment properties for their retirement.

The ones I do feel sorry for in the upcoming correction are those that have their cash together for a deposit and as a young couple/group are mortgaged to hell for a pretty average property that will become worth a lot less than they owe on it. And because of how things work in NZ, they are liable for the whole value of the loans, no walking away like in the USA.

Richard rich.ms

tdgeek

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#1597724 24-Jul-2016 14:16

afe66:

tdgeek:

Go back when times were supposedly good. More affordable homes, baby boomers bought them. Thats normal. Who was running the country then? Not baby boomers. Perhaps the previous generation is to blame. Or put the blame to baby boomers who bought, saved, invested, thanks to the older generation then, who ran the place

The parents of the baby boomers were in charge

The ones who fought in WW2 and saw fellow NZers of many walks of life die in horrible ways.

Who then when the war ended cared for the wider community and brought in programmes such as social housing.

Unlike the baby boomers who had an easier run of employment, didnt really have to mix with those of different classes, who didnt go the same fancy schools and so made it easier to demonise section of the communities they didnt mix with.

When push comes to shove they dont really care about other in the way that the war generation did.

A.

So the baby boomers are a rare one off breed of blood suckers I guess. Place any group of people into that period, and they will grow up, buy a house earlier as they could, and so on. BB weren't born with a dastardly side. The period in question was there, they lived in it. But if its a means to label a group of people as the ones who destroyed it, thats strange. Global factors, innovation, technology, yeah, that would have nothing to do with it. So in 20 years when its the next breed running the show, the show better be pretty good, as it will their fault if it not

gzt

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#1597732 24-Jul-2016 14:34

Statements like "I blame ______ for housing mess" are rarely accurate.

It does not usually end well.

This will be no exception.

alasta

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#1597739 24-Jul-2016 14:46

richms:

The ones I do feel sorry for in the upcoming correction are those that have their cash together for a deposit and as a young couple/group are mortgaged to hell for a pretty average property that will become worth a lot less than they owe on it. And because of how things work in NZ, they are liable for the whole value of the loans, no walking away like in the USA.

Up until now politicians have been encouraging young people to get up to their eyeballs in debt to buy a house because it's never politically expedient to tell them that they can't or shouldn't buy houses. It was a relief a few days ago to finally near Nick Smith admitting on Morning Report that now is a bad time for young financially stretched people to buy houses.

The real risk here is that housing investors are relying on capital gains for their income. When those capital gains eventually dry up then rents will have to increase substantially, hence creating a huge amount of inflationary pressure, which will then prompt the Reserve Bank to raise interest rates. When interest rates go up then highly leveraged homeowners could be in real trouble.

mudguard

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#1597741 24-Jul-2016 14:51

I'm impressed anyone at 18 could buy a house. I was still in high school!

I'm not really too bothered with who is to blame, rather than what will be done about. Which of course means having someone admit that it is a problem.

I'm not sure why loan to income ratios are opposed. I was gobsmacked when I worked at Westpac at how much we would lend people. I would also be more than happy to see the age of voting limited also. Deduct 18 years off the average life span. I consider it my civic duty to vote if anything to counter my slightly racist grandmother, who has worked a grand total of 5 years in her 88 years!

jmh

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#1597744 24-Jul-2016 15:03

Divide and rule people - the young are convinced to blame their parents and grandparents for taking away all the perks, while continuing to vote for the very user-pays system that did it. They don't even bother to look for who is really running things - just blame the old people. Next step on the agenda? Convince the young that cutting super is a good idea to punish all these greedy boomers, which of course will hit Millenials even more. You're being manipulated people - wake up!

jmh

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#1597745 24-Jul-2016 15:06

alasta:

richms:

The ones I do feel sorry for in the upcoming correction are those that have their cash together for a deposit and as a young couple/group are mortgaged to hell for a pretty average property that will become worth a lot less than they owe on it. And because of how things work in NZ, they are liable for the whole value of the loans, no walking away like in the USA.

Up until now politicians have been encouraging young people to get up to their eyeballs in debt to buy a house because it's never politically expedient to tell them that they can't or shouldn't buy houses. It was a relief a few days ago to finally near Nick Smith admitting on Morning Report that now is a bad time for young financially stretched people to buy houses.

The real risk here is that housing investors are relying on capital gains for their income. When those capital gains eventually dry up then rents will have to increase substantially, hence creating a huge amount of inflationary pressure, which will then prompt the Reserve Bank to raise interest rates. When interest rates go up then highly leveraged homeowners could be in real trouble.

With both Nick Smith and Bill English telling people to 'be patient' it makes me wonder whether they know a price crash or take-down is on the way.

The other risk for investors/landlords is if unemployment rises suddenly and people can't afford to pay their rent.

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