$37 Million a week

[Logen Ninefingers]

A multi-million-dollar subsidy flows each week to landlords around the country – and the amount handed over is growing quickly.

But this isn’t the stream of private market capital gains, which deliver a serious windfall to property investors in years like the one we’ve just had. This is taxpayer money delivered from the Government.

The accommodation supplement bill is increasing rapidly: The supplement cost just more than $37 million a week in the September 2020 quarter, up from $27.1m in the June 2018 quarter and is nearly twice what it was six years ago.

https://i.stuff.co.nz/business/opinion-analysis/300217564/37m-a-week-in-housing-subsidies-should-govt-ask-for-more-for-its-money

[Logen Ninefingers]

Here’s where you go to get information on getting government (taxpayer) money to help pay your mortgage or rent -

https://www.workandincome.govt.nz/housing/live-in-home/index.html

Here’s where you go to get information on how to get government (taxpayer) money to pay your house deposit or get a home loan -

https://www.govt.nz/browse/housing-and-property/buying-or-selling-a-home/buying-your-first-home/

Woohoo!! How good is the property market!! A river of government (taxpayer) money flows forth!!

[Logen Ninefingers]

Link for the free government (taxpayer) money for rent and mortgages here -

https://www.workandincome.govt.nz/housing/live-in-home/index.html

[FTG]

What a mess!

Meanwhile Joe Bloggs is scratching their head wondering why the "property market fire" keeps getting wider, deeper, and BIGGER, and wondering where & when this will all end.

It's akin to the forest arsonist actually being a firefighter from the local station. But not only that, this arsonist keeps throwing more fuel on the fire, all whilst supposedly "fighting the fire". Plus to add extra insult to injury, this arsonist is actually quietly taking that fuel from the town locals.

Finally, to really rub ash in the wound, the firefighter-arsonist is interviewed by the local media. They comment that it is a "totally tragic situation" for the locals and that the Fire Department promises to fix ALL the forest fire problems in 2021. They also state that the authorities would step in, taxing all forest & fuel owners further, & put more regulations in place; basically disincentivize folk from investing in & owning these assets where the fires are being lit.

Meanwhile The National Firefighters Union has announced that they will be investing further into the forestry market, buying & planting the most number of forests that they have since the 1970's.

[Logen Ninefingers]

The property looting scheme runs on hundreds of millions of government subsidies yearly, interest rates so low that money is being given away virtually for free, a steady stream of immigrants pouring in....and you look around and see the comments on-line, and it’s all put down to “it’s a lack of supply!!”

Totally disingenuous of the populace of this country; they know exactly the reasons why the property market is in the state it is in, but none of them want their interest rates to go up or their supply of cheap credit to be cut off. None of them want the river of government subsidies to cease. But why not be honest about it? Why be so lacking in integrity that you can’t admit that all the government and Reserve Bank are doing is pouring can after can of petrol on the conflagration with their ultra-loose monetary and fiscal policies?

[Logen Ninefingers]

“Ooooeeeerr...it’s a lack of supply!!!!!”

What a total crock / outright lie.

—————

https://www.interest.co.nz/property/108816/more-1000-new-homes-month-were-built-auckland-year-november-and-numbers-are-rising

More than a 1000 new homes a month were built in Auckland in the year to November and the numbers are rising

30th Jan 21, 9:02am
by Greg Ninness

The number of new homes being built in Auckland continues to increase at a cracking pace.
The latest figures from Auckland Council show that it issued 1581 Code Compliance Certificates for new dwellings in November last year, up 41% compared to November 2019.
That brought the total number of new homes completed in Auckland to 12,054 in the 12 months to November, up 15% compared to the previous 12 months (see chart below for the monthly trend).

[artemis]

Average taxpayer subsidy to private sector renters and mortgagors via Accommodation Supplement - $100 pw. Average taxpayer subsidy for social housing via income related rent - $300 pw. Main reason the social housing waiting list is rocketing up. Plus the changes in the rental sector that discourage landlords from taking on or even keeping less than ideal tenants.

[FTG]

So Artemis, the $37m pw Logen Ninefingers points to above is that just for the private sector, or is that total?

If just private sector then you are indicating the social housing cost would be running at about $110m pw. Crazy stuff if true....but surely not?

[artemis]

So Artemis, the $37m pw Logen Ninefingers points to above is that just for the private sector, or is that total?

If just private sector then you are indicating the social housing cost would be running at about $110m pw. Crazy stuff if true....but surely not?

The $37 mill a week is just the private sector Accommodation Supplement for 360,000 households, and does not include other housing related subsidies like TAS ($6 mill pw) and a bunch of other subsidies. Income related rent (social housing) is $21 million a week for 70,000 households. Sep 2020 numbers from HUD.

Very expensive business!

[Bjauck]

A multi-million-dollar subsidy flows each week to landlords around the country – and the amount handed over is growing quickly.

But this isn’t the stream of private market capital gains, which deliver a serious windfall to property investors in years like the one we’ve just had. This is taxpayer money delivered from the Government.

The accommodation supplement bill is increasing rapidly: The supplement cost just more than $37 million a week in the September 2020 quarter, up from $27.1m in the June 2018 quarter and is nearly twice what it was six years ago.

https://i.stuff.co.nz/business/opinion-analysis/300217564/37m-a-week-in-housing-subsidies-should-govt-ask-for-more-for-its-money

Real estate owners are the country's most entitled beneficiaries, through these indirect subsidies and the effect of taxation policies. This Labour Government will not change that, and will probably further exacerbate it.

Owner-occupiers are effectively subisidised too of course. The net returns on their leveraged equity invested is not taxed. Neither capital gains nor net imputed rent are taxed.

Other countries have had a incentivised pension scheme with tax concessions. For NZ it was leveraged real estate investment, whether owner-occupied or rental property ownership. Comparatively recently Kiwsaver was introduced - with a few grudging minimal concessions.

[FTG]

Thanks Artemis. Indeed, VERY expensive!

Politicians handing out money like it's candy. A big money-go-around. Short term economics that effectively kick the can down the road, but eventually the can will smash into a solid concrete wall.

[artemis]

Real estate owners are the country's most entitled beneficiaries, through these indirect subsidies and the effect of taxation policies. This Labour Government will not change that, and will probably further exacerbate it...

Tax year 2018, over a third of residential landlords reported a net rental loss, well over $8k average. And most new costs, compliance and tax changes were still to kick in. For 112,000 landlords expenses exceeded income despite all those subsidies and rent increases.

Maybe capital gains jam tomorrow, but inroads via the bright line test impact those. Meantime, increased costs and increased tenant hassles. Tens of thousands tenants end up in the Tenancy Tribunal every year for rent arrears and damage and that is the tip of the hassle iceberg.

[Bjauck]

Tax year 2018, over a third of residential landlords reported a net rental loss, well over $8k average. And most new costs, compliance and tax changes were still to kick in. For 112,000 landlords expenses exceeded income despite all those subsidies and rent increases.

Maybe capital gains jam tomorrow, but inroads via the bright line test impact those. Meantime, increased costs and increased tenant hassles. Tens of thousands tenants end up in the Tenancy Tribunal every year for rent arrears and damage and that is the tip of the hassle iceberg. With expectations of capital gains, it is shocking that landlords are prepared to pay such high prices for houses so that the gross rent they earn becomes a net loss after deductible expenses.

If so many landlords never earn taxable income, what is the current position in relation to being able to continually deduct costs under existing tax rules? How man landlords are deemed to purchase with the intent to sell at a profit?

In the past what has been the average length of ownership of a rental property? How many landlords have actually paid tax under the brightline rules? How much tax has been raised and what percentage of total net gains is it?

Ardern confirmed that residential real estate is the priority investment class in NZ:

"Put to her that people who invest in shares, for example, don’t always expect the value of that asset to go up, so why should it be different for housing? Ardern responded: “This gets to the heart of the issue of why so many New Zealanders turn to the housing market.”
https://www.interest.co.nz/property/108301/pm-jacinda-ardern-says-sustained-moderation-remains-governments-goal-when-it-comes

[Logen Ninefingers]

Tax year 2018, over a third of residential landlords reported a net rental loss, well over $8k average. And most new costs, compliance and tax changes were still to kick in. For 112,000 landlords expenses exceeded income despite all those subsidies and rent increases.

Maybe capital gains jam tomorrow, but inroads via the bright line test impact those. Meantime, increased costs and increased tenant hassles. Tens of thousands tenants end up in the Tenancy Tribunal every year for rent arrears and damage and that is the tip of the hassle iceberg.

Poor landlords. If the hassles become too much for them they can always sell a house or two that they bought in the 70’s, 80’s, or 90’s for comparative peanuts. The mega-millions they will make out of the current hot hot hot government / central bank run Ponzi housing ‘market’ should soothe some of the pain caused by the ‘hassles’.

Why would you want to be a landlord when you can sell the house for mega-millions?

[Logen Ninefingers]

The nation used to go beserk at farmers over ‘subsidies’ in the 80’s, and ‘subsidies’ became a dirty word in the NZ lexicon. And now here is the government paying out $37 Million *every week* in subsidies. And the people they are paying them to are crying foul / poor. I think landlords should stand on their principles, and refuse government subsidies. But I guess ‘it’s only a rort if you aren’t part of it’.

[artemis]

With expectations of capital gains, it is shocking that landlords are prepared to pay such high prices for houses so that the gross rent they earn becomes a net loss after deductible expenses.....

Because time passes, principal is paid down, rents rise, values usually rise. Break even point is reached, tax is paid.

But strangely there is apparently a shortage of rentals.

[artemis]

Poor landlords. If the hassles become too much for them they can always sell a house or two that they bought in the 70’s, 80’s, or 90’s for comparative peanuts. The mega-millions they will make out of the current hot hot hot government / central bank run Ponzi housing ‘market’ should soothe some of the pain caused by the ‘hassles’.

Why would you want to be a landlord when you can sell the house for mega-millions?

Is there a rental shortage?

[peat]

The nation used to go beserk at farmers over ‘subsidies’ in the 80’s, and ‘subsidies’ became a dirty word in the NZ lexicon. And now here is the government paying out $37 Million *every week* in subsidies. And the people they are paying them to are crying foul / poor. I think landlords should stand on their principles, and refuse government subsidies. But I guess ‘it’s only a rort if you aren’t part of it’.

thing is the the landlords dont actually receive the govt subsides do they. It goes to the beneficiary who pays the rent. So yes landlords are benefitting but they cant refuse the subsidy.
What it points to is that too many people dont earn enough to pay rent (whether they actually work or not). So that means benefits AND wages are too low to sustain this level of rent/price for property (without accom benefit)

So we could stop the accom benefit and there would be massive homelessness until the landlords found new tenants who could pay. Note that if they couldnt find new tenants at the (accom benefit inflated) existing level they would be forced to lower their rents. But the govt will never ever do that. Well certainly not Labour. Just too disruptive.

So yes we have inflated our property market by paying poor people enough to live in a rental. Weird that doing good does bad though. Unintended consequences!!!

[Logen Ninefingers]

Is there a rental shortage?

Huh?

Why be a landlord when you can cash out and make mega-millions!

[Logen Ninefingers]

thing is the the landlords dont actually receive the govt subsides do they. It goes to the beneficiary who pays the rent. So yes landlords are benefitting but they cant refuse the subsidy.
What it points to is that too many people dont earn enough to pay rent (whether they actually work or not). So that means benefits AND wages are too low to sustain this level of rent/price for property (without accom benefit)

So we could stop the accom benefit and there would be massive homelessness until the landlords found new tenants who could pay. Note that if they couldnt find new tenants at the (accom benefit inflated) existing level they would be forced to lower their rents. But the govt will never ever do that. Well certainly not Labour. Just too disruptive.

So yes we have inflated our property market by paying poor people enough to live in a rental. Weird that doing good does bad though. Unintended consequences!!!

Hey, they are not all ‘poor people’.
The rents people are now being asked to pay are extraordinary. We should not just dismiss anyone struggling to pay these rents as a ‘poor person’.
Often these are young professionals who now have no hope of ever owning a property - unless Labour increases the taxpayer paid deposit grant (subsidy) to ‘get them on the ladder’. And Labour will!

When should a government subsidy ever be paid to someone struggling to pay their MORTGAGE!?! Don’t take on a mortgage if you can’t pay it!! We are now allowing people to make bad bets and then bailing them out. Slashing interest rates if it looks like property prices will fall - this is another bail-out.

I hate what successive governments and the central bank have done. They have created a too big to fail bubble that they rapidly inflate further every time it teeters. They’ve totally ****ed up our country.

[peat]

Hey, they are not all ‘poor people’.
The rents people are now being asked to pay are extraordinary.

I wasnt being pejorative but quite frankly if you cant afford to put a roof over your head without govt assistance then in my opinion you are poor. Thats how the world rolls yeh? Coz only food comes at a higher priority according to that maslow hierarchy

[Aaron]

The property looting scheme runs on hundreds of millions of government subsidies yearly, interest rates so low that money is being given away virtually for free, a steady stream of immigrants pouring in....and you look around and see the comments on-line, and it’s all put down to “it’s a lack of supply!!”

Totally disingenuous of the populace of this country; they know exactly the reasons why the property market is in the state it is in, but none of them want their interest rates to go up or their supply of cheap credit to be cut off. None of them want the river of government subsidies to cease. But why not be honest about it? Why be so lacking in integrity that you can’t admit that all the government and Reserve Bank are doing is pouring can after can of petrol on the conflagration with their ultra-loose monetary and fiscal policies?

Why be so lacking in integrity??
Because your job and your political party depend on it.
Your retirement depends on it? Your comfortable way of life depends on it? As long as you have a house (or two) your kids should be OK as well so why change.

It is easier to blame housing supply because then you can blame government regulations I suppose, rather than the independent reserve bank helping to keep financial markets stable with easy money and low interest rates and 50,000 immigrants each year (would they have any significant effect on the housing market it is only 1% of the population per annum?)

Housing inflation running at 7% compounding per annum for the last 20 years, wages 3%. I guess the government answer is the accommodation supplement as some people can’t afford housing anymore.

Monetary policy and targeted inflation are playing a part but no one in power wants to address this issue at least until something breaks.

[Logen Ninefingers]

Why be so lacking in integrity??
Because your job and your political party depend on it.
Your retirement depends on it? Your comfortable way of life depends on it? As long as you have a house (or two) your kids should be OK as well so why change.

It is easier to blame housing supply because then you can blame government regulations I suppose, rather than the independent reserve bank helping to keep financial markets stable with easy money and low interest rates and 50,000 immigrants each year (would they have any significant effect on the housing market it is only 1% of the population per annum?)

Housing inflation running at 7% compounding per annum for the last 20 years, wages 3%. I guess the government answer is the accommodation supplement as some people can’t afford housing anymore.

Monetary policy and targeted inflation are playing a part but no one in power wants to address this issue at least until something breaks.

Ok, 50,000 immigrants per annum is no issue in your eyes....how many houses per annum should this country be building? Do we want all our prime horticultural land close to Auckland to be covered in housing? What is the endgame here? We now have more real estate agents in NZ than we do farmers.

Soon as COVID hit there was some guy on the radio from some construction industry body carrying on about how it could be a calamity for the building industry and how every NZer - regardless of age, stage, or wealth - should be paid $50,000 by the government to ‘invest’ into property. This is the mentality. This was on the TV3 breakfast show as well.
We have all our eggs in one basket.

[Logen Ninefingers]

I wasnt being pejorative but quite frankly if you cant afford to put a roof over your head without govt assistance then in my opinion you are poor. Thats how the world rolls yeh? Coz only food comes at a higher priority according to that maslow hierarchy

But wages and salaries are not going up anywhere near the same rate as property prices and rents. So yeah, by your definition a lot more people are becoming ‘poor’ while others are becoming ‘rich’.

[peat]

But wages and salaries are not going up anywhere near the same rate as property prices and rents. So yeah, by your definition a lot more people are becoming ‘poor’ while others are becoming ‘rich’.

yes inequity is exacerbating. and your thread is very pertinent. I dont think many people realise how welfare is making making people poorer.

[Aaron]

Ok, 50,000 immigrants per annum is no issue in your eyes....how many houses per annum should this country be building? Do we want all our prime horticultural land close to Auckland to be covered in housing? What is the endgame here? We now have more real estate agents in NZ than we do farmers.

Soon as COVID hit there was some guy on the radio from some construction industry body carrying on about how it could be a calamity for the building industry and how every NZer - regardless of age, stage, or wealth - should be paid $50,000 by the government to ‘invest’ into property. This is the mentality. This was on the TV3 breakfast show as well.
We have all our eggs in one basket.

Quite the opposite I am anti immigration, even if they are white and speak english they can stay in their own country imho. What is the end game? Currently constant seemingly pointless growth and a Ponzi monetary system that will collapse if debt does not keep expanding.

What is the perfect number of people for a country our size? I would suggest something less than 5million.

Why not invest in our young people instead of making it impossible for them to ever buy a house. Perhaps they might be more inclined to have families if it didn't require two incomes to pay the rent or the mortgage.

Lots of talk on climate change but no suggestion that we work towards a financial system that doesn't require constant growth and consumption.

[Bjauck]

yes inequity is exacerbating. and your thread is very pertinent. I dont think many people realise how welfare is making making people poorer.

The Welfare and Taxation policies are making some people poor.

Do we have a greater proportion of people poor because the upper wealth deciles have seen their share of wealth increase? Government policies make the difference.

How many more people in NZ would no longer be poor/ no longer requiring government accommodation assistance if the government reduced the reliance on GST and income taxes introduced stamp duties, a comprehensive CGT and introduced a threshold before income tax is levied - such as exists in other countries?

[artemis]

A lot of talk in this thread about 'people'. In fact that should be 'households', and specifically household income. A DINK household is a very different item to a household with one income and perhaps another adult and children. Household size is a choice, household income is a series of choices. Not always but often.

And the number of first home buyers is increasing, more than 3000 new FHBs a month.

[artemis]

The Welfare and Taxation policies are making some people poor.

Do we have a greater proportion of people poor because the upper wealth deciles have seen their share of wealth increase? Government policies make the difference.

How many more people in NZ would no longer be poor/ no longer requiring government accommodation assistance if the government reduced the reliance on GST and income taxes introduced stamp duties, a comprehensive CGT and introduced a threshold before income tax is levied - such as exists in other countries?

Sounds like TOP policies. IMO they were well thought through as an integrated approach and valuable as a starting point for discussion. Never happened, partly because too complex for many voters, and also because cats. And the cats thing was a complete distraction but that's politics.

The last big economy shakeup apart from the GFC was Roger Douglas, and while it was the best change at the time some still bring the changes up as completely terrible. TOP's best chance was to be a ginger group like ACT, but can't see that happening now. Pity, the country should consider good ideas wherever they come from.

[Bjauck]

Sounds like TOP policies. IMO they were well thought through as an integrated approach and valuable as a starting point for discussion. Never happened, partly because too complex for many voters, and also because cats. And the cats thing was a complete distraction but that's politics.

The last big economy shakeup apart from the GFC was Roger Douglas, and while it was the best change at the time some still bring the changes up as completely terrible. TOP's best chance was to be a ginger group like ACT, but can't see that happening now. Pity, the country should consider good ideas wherever they come from.

Not quite.

Aren't TOP policies based on a type of implied fair dividend rate income or minimum deemed income from productive assets, including the family home? It was electorally unpopular as it would tax previously untaxed investment returns.
https://www.top.org.nz/tax_policy_launch_speech_notes

[Bjauck]

A lot of talk in this thread about 'people'. In fact that should be 'households', and specifically household income. A DINK household is a very different item to a household with one income and perhaps another adult and children. Household size is a choice, household income is a series of choices. Not always but often... Apart from its use in statistics, is there such a thing as “household income”? The individuals in the household may have the legal rights to vastly different amounts of income and/or capital gains, from various legal entities.

[Norwest]

50,000 net migration every year for 10 years is 500,000 people (source: Statistics NZ)

61% of these 500,000 people move to Auckland, which is roughly 300,000 over 10 years (source: Statistics NZ)

At the average of 2.6 people per household, 115,000 extra houses are required for these incoming migrants need in Auckland (source: 2018 Census stats)

For the past decade, Auckland has accounted for just under 30% of consents for new dwellings yet has received 47% of the country’s population growth. (source: MBIE)

"The current shortfall of housing in Auckland is estimated to be at around 28,000 dwellings over the past decade, although other estimates put this deficit at 45,000 units." (source: 2018 Government Stocktake of New Zealand’s Housing).

You can complain all you want about the accommodation supplement and WINZ support - this is being forced upon kiwi's by mass immigration which drives housing costs higher whilst also driving wages lower - the end result is your average kiwi in regular employment gets screwed big time, especially in Auckland.

[Bjauck]

...

You can complain all you want about the accommodation supplement and WINZ support - this is being forced upon kiwi's by mass immigration which drives housing costs higher whilst also driving wages lower - the end result is your average kiwi in regular employment gets screwed big time, especially in Auckland.
Long term real estate owners have made large gains from immigration and insufficient supply. It is increasingly a tale of two Aucklands-the landed plutocracy and those struggling to secure adffordable uncrowded rental accommodation. About 45% of AKL households are not owner occupied.

As rental properties tend to have more occupants. The percentage of the population in rental accommodation may have surpassed 50%.

[iceman]

Huh?

Why be a landlord when you can cash out and make mega-millions!

Why cash out if the values keep rising ? Just like shares, "let your winners run" !

[Logen Ninefingers]

Why cash out if the values keep rising ? Just like shares, "let your winners run" !

Ok, so if they are ‘winners’ riding a tsunami of capital gains then maybe they spend less time complaining about how tough it is to be a landlord. They are in it by choice.

[artemis]

Apart from its use in statistics, is there such a thing as “household income”? The individuals in the household may have the legal rights to vastly different amounts of income and/or capital gains, from various legal entities.

Household income is used in relation to all housing subsidies and also borrowing for housing.

[artemis]

Ok, so if they are ‘winners’ riding a tsunami of capital gains then maybe they spend less time complaining about how tough it is to be a landlord. They are in it by choice.

Thing is landlords do actually have choices and will make decisions based on their own circumstances. Recent rental changes aim to make renting 'fairer', and if asset owners don't see it that way they can and will do something about it.

Owners that decide to stay in the sector will be a lot more careful who they rent to and check the rent charged in relation to the market.

Majority of rentals are managed by property managers as landlords - they have a good handle on the market and of course are engaged by owners to produce optimum results.

[Bjauck]

Household income is used in relation to all housing subsidies and also borrowing for housing. As far as I am aware, if you are in a relationship, subsidies take into account your partner's situation. Applications for mortgages can be joint. This is not the same as "household" which may or may not include these situations in addition to other relationships.

https://www.workandincome.govt.nz/products/a-z-benefits/accommodation-supplement.html

[artemis]

As far as I am aware, if you are in a relationship, subsidies take into account your partner's situation. Applications for mortgages can be joint. This is not the same as "household" which may or may not include these situations in addition to other relationships....

Fair comment, I used the term 'household' rather loosely to make a point between one person's income and the income of other relevant occupiers in a household when comparing income to dwelling affordability.

[Bjauck]

Fair comment, I used the term 'household' rather loosely to make a point between one person's income and the income of other relevant occupiers in a household when comparing income to dwelling affordability. Fair enough. Certainly the ability to service a mortgage/ pay the rent does require more incomes today than a generation or two ago. So other things are sacrificed - such as voluntary charity work and a parent at home for the kids etc.

[iceman]

Interesting article behind the paywall in the Herald today https://www.nzherald.co.nz/nz/emergency-housing-clients-throw-rental-opportunities-to-stay-in-cheaper-accommodation-rental-agent-says/ZNBNTO7ESBE47HMO3L6DXRGURY/

[artemis]

Interesting article behind the paywall in the Herald today https://www.nzherald.co.nz/nz/emergency-housing-clients-throw-rental-opportunities-to-stay-in-cheaper-accommodation-rental-agent-says/ZNBNTO7ESBE47HMO3L6DXRGURY/

One comment in the article, which is not a surprise, refers to the number of single men who turn up (to get a letter saying they tried, basically). The social housing waiting list is almost half single people these days, and I've heard from someone working in the sector they are mostly men. With the size of the waiting list that is a lot of people the private sector won't house. A motel at income related rent must feel like winning the lottery.

[Bjauck]

Bernard Hickey reckons investor housing is a subsidised government guaranteed minimally taxed sheltered investment with low rates raising all boats.https://i.stuff.co.nz/business/opinion-analysis/300223000/property-investors-working-hard-taking-risks--or-are-they

[artemis]

Bernard Hickey reckons investor housing is a subsidised government guaranteed minimally taxed sheltered investment with low rates raising all boats.https://i.stuff.co.nz/business/opinion-analysis/300223000/property-investors-working-hard-taking-risks--or-are-they

Mr Hickey is smart and experienced. So why does he compare (no) tax on rental capital gain to tax on income from other sources, or even from rents? For example, he refers to tax foregone on rental property capital gains without mentioning that there are rather a lot of other assets that don't currently attract a CGT.

His article sounds like a party political broadcast.

[stoploss]

Logen check out the latest blog here , especially the last paragraph .... supply still the issue ....https://croakingcassandra.com/2021/02/09/not-really/#comments

[Bjauck]

Mr Hickey is smart and experienced. So why does he compare (no) tax on rental capital gain to tax on income from other sources, or even from rents? For example, he refers to tax foregone on rental property capital gains without mentioning that there are rather a lot of other assets that don't currently attract a CGT. Was he referring to total returns? He referred to leverage. In NZ the ability to leverage equity in real estate in effect reduces tax as a percentage of returns (net capital and income gains) from the investment compared to an investment in shares, for which leverage is not so readily accessible.


His article sounds like a party political broadcast. ...Certainly not for Ardern's Labour. She has guaranteed no CGT on her watch and has said Kiwis invest in housing because the prices don't drop. Protecting Real estate investment gains is this government's priority. So far they have very successfully implemented that policy.

[Aaron]

Mr Hickey is smart and experienced. So why does he compare (no) tax on rental capital gain to tax on income from other sources, or even from rents? For example, he refers to tax foregone on rental property capital gains without mentioning that there are rather a lot of other assets that don't currently attract a CGT.

His article sounds like a party political broadcast.

Which party????

I think he was pointing out that the other tax free capital gains such as selling a business do not have taxpayer dollars going directly to the customers of the businesses to spend on the goods and services being provided whereas landlords get $4b worth of taxpayers money paid each year to renters as accommodation supplements to help them afford the rents, which also ensure the rental business makes money and the houses retain their value.

What other business gets a taxpayer subsidy that large.

[artemis]

Which party????

I think he was pointing out that the other tax free capital gains such as selling a business do not have taxpayer dollars going directly to the customers of the businesses to spend on the goods and services being provided whereas landlords get $4b worth of taxpayers money paid each year to renters as accommodation supplements to help them afford the rents, which also ensure the rental business makes money and the houses retain their value.

What other business gets a taxpayer subsidy that large.

$4billion a year Accommodation Supplement? Did you make that up?

What about social housing rent subsidies. Are they OK as the taxpayer is just subsiding ... Oh the taxpayer. Those renters on average are subsided triple the average Accomm Supplement amount per household.

It is households that get the Accomm Supplement not landlords. And the money does not necessarily go towards housing costs. Even a cursory glance at the Tenancy Tribunal decisions will show thousands and thousands of rent arrears applications every year, often huge amounts.

If you want to compare households that get the Accomm Subsidy with others, then be sure to include other government transfers to households that can add up to many times the Accomm Supplement.

Personally I would be quite happy if the Accomm Supplement was dropped along with income related rent for social housing. Or if the same subsidy applied regardless of the asset owner. (That was the case when the Accomm Supplement was introduced.) Rents might drop as a result, or they may not.

[Aaron]

$4billion was taken from Bernard Hickeys article. Hopefully he checks the accuracy of his statements. Although $37million a week only comes to just over $1.9billion.

$4billion would be $800 per head over 5million people so seems like a lot.

Other government transfer payments aren't described as Accommodation Supplement so aren't relevant to this thread.

Personally I think targeted inflation has largely caused the rise in house(asset) prices over the last 20-30years. If people didn't expect at least 7-8% capital gain each year would they be buying rentals at a 3% yield? Considering how hard it is to provide rental accommodation and deal with tenants. Rents are having to go up to justify house prices. Housing costs have been rising at 7% over the last twenty years while wages average 3%. The accommodation supplement is a way to address this discrepancy Perhaps if we had price stability we would not even have this thread or accommodation supplements.

Better yet a government that actually wants to change the problem and doesn't believe in trickle down economics.

Still interested to know which party political broadcast Bernard Hickey's article represented. As far as I can tell no party wants to address the core issue. Like I say there is very little difference between a Jacinda Ardern govt and a John Key govt. it amazes me that people get so upset on the political/election threads when National and Labour are by and large the same thing. Possibly sexism exacerbates some posters dislike of Jacinda.

[artemis]

$4billion was taken from Bernard Hickeys article. Hopefully he checks the accuracy of his statements. Although $37million a week only comes to just over $1.9billion.

$4billion would be $800 per head over 5million people so seems like a lot.

Other government transfer payments aren't described as Accommodation Supplement so aren't relevant to this thread....

The $4billion in the article refers generically to accommodation supplements and obviously includes a while lot more than the Accommodation Supplement. As a minimum it includes subsidised social housing rent and there are other housing or housing related subsidies as well. Exactly what Mr Hickey did not specify but HUD reports regularly on them and he is probably about right.

As for other government transfers not being relevant, you brought up other businesses where clients are subsidise. Check out Working for Families, childcare subsidies, TAS, employer subsides for workers and more. As an example private ECEs not only receive funding from the government but their clients can also qualify for the childcare subsidy. A lot happens under the radar.

[Aaron]

The $4billion in the article refers generically to accommodation supplements and obviously includes a while lot more than the Accommodation Supplement. As a minimum it includes subsidised social housing rent and there are other housing or housing related subsidies as well. Exactly what Mr Hickey did not specify but HUD reports regularly on them and he is probably about right.

As for other government transfers not being relevant, you brought up other businesses where clients are subsidise. Check out Working for Families, childcare subsidies, TAS, employer subsides for workers and more. As an example private ECEs not only receive funding from the government but their clients can also qualify for the childcare subsidy. A lot happens under the radar.

Working For Families is not directed at one area of spending or industry. It can be for school uniforms, food or whatever, I'll have to admit I don't know what TAS is, subsidies for workers are generally designed to get people into work rather making up a shortfall between wages and the cost of living, childcare subsidies, supporting schools, hospitals etc are generally in NZ not usually fully private industries. Health and education is still a public good paid for by and large by the taxpayer. I don't have a problem with that.

The accommodation supplement is a bit like a first home buyer grant, pouring more fuel on the fire to make up for the fact that monetary policy is driving up the price of housing beyond what a lot of people can afford.

A bit pointless arguing about monetary policy, if the central bank raised interest rates in response to rampant house price inflation they would get it in the neck from exporters and owners of property whose house price has gone down instead of up. An Arts student will always take the easy option as will most people.

It is how it all ends that I should be focusing on instead of whining about the apparent stupidity of it all. I guess it will happen as it has throughout history, hopefully we can avoid a war at the end of it all.

We have nearly run out of interest rates to cut and the amount of money printing is so large it is incomprehensible to the average joe bloggs like me but rather than prices rising it is more a matter of dollars becoming worthless. Any real asset will be an inflation hedge and debt will be an asset if monetary policy gets rid of it for you.

That is why I am looking to leverage up on a house purchase, although still holding on to the faint hope of a pull back or crash first as I am unsure what sort of property to buy. Why complain about a govt subsidised industry when you can join it.

Also still waiting to hear which party???

[artemis]

It is up to the renter or mortgagor what they spend any Accommodation Supplement on. Same as Working for Families.

[Logen Ninefingers]

Logen check out the latest blog here , especially the last paragraph .... supply still the issue ....https://croakingcassandra.com/2021/02/09/not-really/#comments

If supply is ‘the issue’ and anything else mentioned is merely a distraction, then I am sure that everyone will be happy for interest rates to go up to 6 or 7 percent, where they should be. After all, interest rates are not the issue according to this article and many others.

[stoploss]

If supply is ‘the issue’ and anything else mentioned is merely a distraction, then I am sure that everyone will be happy for interest rates to go up to 6 or 7 percent, where they should be. After all, interest rates are not the issue according to this article and many others.
6 % fine with me , but how exactly is that going to improve the supply that is needed in the housing market ?

[Bjauck]

It is up to the renter or mortgagor what they spend any Accommodation Supplement on. Same as Working for Families.
I am not sure what the mechanics are for the Accommodation supplement. Although it is based on accommodation costs/income, if it is not paid directly to the Landlord or mortgagee then I guess that is theoretically correct.

I think that it is bizarre that "right-wingers" who support "flat taxes" do not campaign for investment returns from all assets classes (whether Shares, FIF, financial arrangements and term deposits or investor real estate) to be taxed at the same pro rata rate. Both "capital" gains and "income" gains should be taxed at the same rate.

The current NZ system puts tax burden on those assets that are used to produce greater employment for individuals (which is taxed) and net income.

[Aaron]

6 % fine with me , but how exactly is that going to improve the supply that is needed in the housing market ?

Interest rates have been dropping for the last 12 years and that obviously hasn't helped fixed supply but I would suggest letting interest rates rise might curb the magnificent capital gains we have been seeing lately and may curb some of the over enthusiastic demand. If only there was a way to let markets decide the cost of capital rather than a central planner.

[macduffy]

Interest rates have been dropping for the last 12 years and that obviously hasn't helped fixed supply but I would suggest letting interest rates rise might curb the magnificent capital gains we have been seeing lately and may curb some of the over enthusiastic demand. If only there was a way to let markets decide the cost of capital rather than a central planner.

Yes, letting interest rates rise might curb capital gains in housing but it would almost certainly put a lot of NZ exporters out of business as the higher rates caused enthusiastic demand for the NZD!

No easy answers.

[Aaron]

Yes, letting interest rates rise might curb capital gains in housing but it would almost certainly put a lot of NZ exporters out of business as the higher rates caused enthusiastic demand for the NZD!

No easy answers.

Agreed see post #51, I have come to the conclusion it will be more of the same until something breaks. Leverage will be my way to invest the trend as it should have been all my life. I suppose it is a matter how much debt is too much with low yields.

[Bjauck]

Agreed see post #51, I have come to the conclusion it will be more of the same until something breaks. Leverage will be my way to invest the trend as it should have been all my life. I suppose it is a matter how much debt is too much with low yields. Inflated bubbles never burst: This time will be different?

[Aaron]

Inflated bubbles never burst: This time will be different?

Maybe there will be a currency crisis rather than a correction in asset prices? The money might disappear but real assets will remain. The end goal is inflation to clear the debt this means low interest rates while prices shoot up.

Also there is a global currency war, so the idea of a strong and stable currency has gone by the wayside as money printing is the easy answer to all the worlds problems.

[macduffy]

Agreed see post #51, I have come to the conclusion it will be more of the same until something breaks. Leverage will be my way to invest the trend as it should have been all my life. I suppose it is a matter how much debt is too much with low yields.

It's a bit more serious than "getting it in the neck from exporters...." though. NZ can't do its own thing monetary policy- wise when the rest of the world is busy dropping interest rates.

Good luck though with your new investment philosophy. Let's hope it's not too late to put it into practice!

:)

[Bjauck]

Maybe there will be a currency crisis rather than a correction in asset prices? The money might disappear but real assets will remain. The end goal is inflation to clear the debt this means low interest rates while prices shoot up.

Also there is a global currency war, so the idea of a strong and stable currency has gone by the wayside as money printing is the easy answer to all the worlds problems.
In a period of hyper-inflation the money in the bank earning minimal interest will have its purchasing power eroded, so it is better to own or have a share in a plot of land and bricks and mortar (or admittedly less so in NZ, in a productive business.). However it is arguable that the current asset inflation/supply constriction has inflated real estate relatively more compared to wages/incomes and productive assets. So any correction may affect real estate more than other assets.

[Aaron]

In a period of hyper-inflation the money in the bank earning minimal interest will have its purchasing power eroded, so it is better to own or have a share in a plot of land and bricks and mortar (or admittedly less so in NZ, in a productive business.). However it is arguable that the current asset inflation/supply constriction has inflated real estate relatively more compared to wages/incomes and productive assets. So any correction may affect real estate more than other assets.

Really is it arguable, I would have said it is a stone cold fact that real estate has gone up more compared to wages for the last 20 years at least and it is becoming more noticeable recently. You are right I have doubts and my timing will probably be a signal for a top as always. That could be why I am procrastinating a bit.

[Aaron]

It's a bit more serious than "getting it in the neck from exporters...." though. NZ can't do its own thing monetary policy- wise when the rest of the world is busy dropping interest rates.

Good luck though with your new investment philosophy. Let's hope it's not too late to put it into practice!

:)

Way to late, 30 years ago was the time to start now I can wipe myself out close to retirement. Someone did say they have been talking to immigrants from Zimbabwe and they felt as long as you had a house the hyper inflation was manageable.

[westerly]

The accommodation supplement is a bit like a first home buyer grant, pouring more fuel on the fire to make up for the fact that monetary policy is driving up the price of housing beyond what a lot of people can afford.

A bit pointless arguing about monetary policy, if the central bank raised interest rates in response to rampant house price inflation they would get it in the neck from exporters and owners of property whose house price has gone down instead of up. An Arts student will always take the easy option as will most people.

It is how it all ends that I should be focusing on instead of whining about the apparent stupidity of it all. I guess it will happen as it has throughout history, hopefully we can avoid a war at the end of it all.

We have nearly run out of interest rates to cut and the amount of money printing is so large it is incomprehensible to the average joe bloggs like me but rather than prices rising it is more a matter of dollars becoming worthless. Any real asset will be an inflation hedge and debt will be an asset if monetary policy gets rid of it for you.

That is why I am looking to leverage up on a house purchase, although still holding on to the faint hope of a pull back or crash first as I am unsure what sort of property to buy. Why complain about a govt subsidized industry when you can join it.

Also still waiting to hear which party???

Debt is never an asset. Agree that the amount of money being printed is astronomical but it is printed to avoid a financial crash.
At some stage the crash will happen (in my view) and there will be financial chaos. Interest rates maybe low but I would rather lose a money on a term deposit than buy shares at prices way above their actual value .
As for housing, the withdrawal of Govt. Finance for first home buyers following the 1987 and later changes left the supply of new housing in the hands of developers who realized there was far more money to be made building for the top end of the market and the basic 3 bedroom house on a bare section disappeared. Replaced by the up market, fully landscaped and fenced expensive offerings of today.

westerly

[Bjauck]

Really is it arguable, I would have said it is a stone cold fact that real estate has gone up more compared to wages for the last 20 years at least and it is becoming more noticeable recently. You are right I have doubts and my timing will probably be a signal for a top as always. That could be why I am procrastinating a bit. I guess it could be looked at as a bubble that has been inflating for decades.

If you don’t think it is arguable, don’t you wonder:
How much lower can interest rates fall? Or will Ardern and future PMs ensure interest rates go negative to keep on inflating house prices?
How much longer can the constriction on new residential land be kept up?
For how much longer will the shortage of tradies last?
For how much longer will the stamp duty/tax onus be kept light on the gains from leveraged investor housing?

[artemis]

...
As for housing, the withdrawal of Govt. Finance for first home buyers following the 1987 and later changes left the supply of new housing in the hands of developers who realized there was far more money to be made building for the top end of the market and the basic 3 bedroom house on a bare section disappeared. Replaced by the up market, fully landscaped and fenced expensive offerings of today.

Westerly

What I see in Wellington is old house demolitions replaced by multiple unit terraced housing, and apartment blocks on larger sites. Still expensive and probably a decent buck to be made. Friends in Auckland say similar there. Other locations, don't know.

[Aaron]

Lots of building in my town as well but mostly large houses for boomers leaving Auckland and retiring.

[Logen Ninefingers]

“Ultimately, I can’t see house prices slowing while we have record low interest rates or ‘free money’ as buyers are telling me every day.

– Hamish Walker is a former National MP and real estate agent based in Queenstown.

https://i.stuff.co.nz/business/opinion-analysis/300228731/house-prices-wont-slow-while-we-have-free-money

[Aaron]

“Ultimately, I can’t see house prices slowing while we have record low interest rates or ‘free money’ as buyers are telling me every day.

– Hamish Walker is a former National MP and real estate agent based in Queenstown.

https://i.stuff.co.nz/business/opinion-analysis/300228731/house-prices-wont-slow-while-we-have-free-money

Do you see the free money solution changing anytime soon? Maybe buy a house if enough people do it the govt will probably provide some sort of handout to property owners in the event of a crash, the current free ride with tax free capital gains and central bank monetary policy (let inflation take care of the massive debt) won't be enough particularly just prior to an election.
More views but affected by my confirmation bias.
https://www.interest.co.nz/opinion/109051/economist-brian-easton-says-building-more-houses-will-not-reduce-house-prices-much
https://www.abc.net.au/news/2021-02-15/why-australian-property-prices-will-continue-to-soar/13154220

[Logen Ninefingers]

Maybe buy a house if enough people do it the govt will probably provide some sort of handout to property owners in the event of a crash

Yes, that's how responsible citizens should look to loot their own country: everyone do it so that the government is given no option but to bail us all out.

Except there is no 'maybe' about it, as it is already happening. The evidence is right there. Just look at the interest rate setting, money printing, and grants & subsidies.

[Aaron]

Maybe buy a house if enough people do it the govt will probably provide some sort of handout to property owners in the event of a crash

Yes, that's how responsible citizens should look to loot their own country: everyone do it so that the government is given no option but to bail us all out.

Except there is no 'maybe' about it, as it is already happening. The evidence is right there. Just look at the interest rate setting, money printing, and grants & subsidies.

Targeted inflation and monetary policy are designed to destroy savers and help borrowers and owners of assets. I am coming to a personal view that it is unlikely to change in the near to mid term, although it is unlikely long term as it doesn't seem sustainable and each crisis requires larger amounts of debt (think March 2020). Negative interest rates would not exist in a sane world.

I think it is unfair and that the bottom rungs are being kicked out from the ladder of financial success. It is possible that people are starting to feel that the chance for upward mobility is being taken away (it is) and that may be what is partly driving the housing market frenzy (that and low interest rates). I could get upset about it as I have done for too long now or I can invest so it doesn't upset me as much.

Imagine saving money and having runaway inflation decrease your purchasing power while interest rates stay low and house prices rocket up?(it doesn’t take much imagination does it) What about a debt jubilee, you won't benefit as a saver. What about if there is a big crash in the financial system, further debt will be harder to come by just when you want to borrow and just when asset prices are falling and it is time to invest, your savings will be frozen through the Open Bank Resolution as savers help the banks get out of trouble.
https://www.rbnz.govt.nz/regulation-and-supervision/banks/open-bank-resolution

I don't think it is right or fair but it is hard to see saving cash as a sensible investment option with insane central bankers forgetting their primary mandate of managing monetary policy to maintain price stability and promote the maintenance of a sound and efficient financial system.

I could be wrong as I have been most of my life but at least getting ulcers worrying about my mortgage is preferable to the ones created by being angry at the way things are.

Monetary policy ensures my house price rises (at least in nominal terms) and my debt becomes manageable over time. As traditionally wages don’t rise as quickly as asset prices the nz taxpayer can pay my tenants rent through an accommodation allowance ensuring my mortgage is paid and my house price stays up.

Thanks for starting the thread Logen you have helped me solidify my thinking and my next investing steps, although I appreciate that may not have been the intention of the thread.

[Logen Ninefingers]

Targeted inflation and monetary policy are designed to destroy savers and help borrowers and owners of assets. I am coming to a personal view that it is unlikely to change in the near to mid term, although it is unlikely long term as it doesn't seem sustainable and each crisis requires larger amounts of debt (think March 2020). Negative interest rates would not exist in a sane world.

I think it is unfair and that the bottom rungs are being kicked out from the ladder of financial success. It is possible that people are starting to feel that the chance for upward mobility is being taken away (it is) and that may be what is partly driving the housing market frenzy (that and low interest rates). I could get upset about it as I have done for too long now or I can invest so it doesn't upset me as much.

Imagine saving money and having runaway inflation decrease your purchasing power while interest rates stay low and house prices rocket up?(it doesn’t take much imagination does it) What about a debt jubilee, you won't benefit as a saver. What about if there is a big crash in the financial system, further debt will be harder to come by just when you want to borrow and just when asset prices are falling and it is time to invest, your savings will be frozen through the Open Bank Resolution as savers help the banks get out of trouble.
https://www.rbnz.govt.nz/regulation-and-supervision/banks/open-bank-resolution

I don't think it is right or fair but it is hard to see saving cash as a sensible investment option with insane central bankers forgetting their primary mandate of managing monetary policy to maintain price stability and promote the maintenance of a sound and efficient financial system.

I could be wrong as I have been most of my life but at least getting ulcers worrying about my mortgage is preferable to the ones created by being angry at the way things are.

Monetary policy ensures my house price rises (at least in nominal terms) and my debt becomes manageable over time. As traditionally wages don’t rise as quickly as asset prices the nz taxpayer can pay my tenants rent through an accommodation allowance ensuring my mortgage is paid and my house price stays up.

Thanks for starting the thread Logen you have helped me solidify my thinking and my next investing steps, although I appreciate that may not have been the intention of the thread.

You go for it. No problem whatsoever with that.

You are going in with your eyes open, assessing the risk, and with an expectation of continued government and central bank assistance.

And if it all falls apart, if the bubble does burst in spectacular fashion, then those who get badly burnt have to accept that they have no-one to blame but themselves. The only people I will be feeling sorry for will be the young people buying at the top of the market who have been goaded into by their elders and encouraged to do it by the government.

[Aaron]

You go for it. No problem whatsoever with that.

You are going in with your eyes open, assessing the risk, and with an expectation of continued government and central bank assistance.

And if it all falls apart, if the bubble does burst in spectacular fashion, then those who get badly burnt have to accept that they have no-one to blame but themselves. The only people I will be feeling sorry for will be the young people buying at the top of the market who have been goaded into by their elders and encouraged to do it by the government.

I agree entirely people should take responsibility for their investing decisions, you take the risk you deal with the results good or bad. What burns my britches is that doesn't apply to capital markets either real estate or global share indexes. As soon as they fall they are propped up with low interest rates and easy money, it is sickening. It is a 30 year trend but I don't know if it is coming to an end or not. I do know central banks and politicians will keep it going as long as they can but am unsure how long that will be. The younger generation and those not benefiting from trickle down economics need to wake up and force political change. National or Labour makes no difference.
It sounded like one politician was starting to work out what is behind the rising inequality and house price rises in the herald this morning.

https://www.nzherald.co.nz/nz/politics/chloe-swarbrick-on-house-prices-tackling-inequality-in-new-zealand-requires-political-guts/HSM4H4VOB7BJSEOII6G7PTFBLY/

Unfortunately I have traditionally viewed her party as a bunch of communists in green camouflage telling us how to live our lives. Maybe if Chloe were leader the greens might be a more palatable option.

Stopping targeted inflation would be politically easy to do, it wouldn't even take any guts to implement. Maybe then central banks could go back to providing price stability and a sound efficient financial system instead of protecting investors from bad decisions and over leverage. If it all craps out I will feel sorry for myself first and foremost and the young people almost forced/coerced into taking a large mortgage also the older less well off people forced to go out the risk curve to generate some income from their hard earned capital.

[Logen Ninefingers]

I agree entirely people should take responsibility for their investing decisions, you take the risk you deal with the results good or bad. What burns my britches is that doesn't apply to capital markets either real estate or global share indexes. As soon as they fall they are propped up with low interest rates and easy money, it is sickening. It is a 30 year trend but I don't know if it is coming to an end or not. I do know central banks and politicians will keep it going as long as they can but am unsure how long that will be. The younger generation and those not benefiting from trickle down economics need to wake up and force political change. National or Labour makes no difference.
It sounded like one politician was starting to work out what is behind the rising inequality and house price rises in the herald this morning.

https://www.nzherald.co.nz/nz/politics/chloe-swarbrick-on-house-prices-tackling-inequality-in-new-zealand-requires-political-guts/HSM4H4VOB7BJSEOII6G7PTFBLY/

Unfortunately I have traditionally viewed her party as a bunch of communists in green camouflage telling us how to live our lives. Maybe if Chloe were leader the greens might be a more palatable option.

Stopping targeted inflation would be politically easy to do, it wouldn't even take any guts to implement. Maybe then central banks could go back to providing price stability and a sound efficient financial system instead of protecting investors from bad decisions and over leverage. If it all craps out I will feel sorry for myself first and foremost and the young people almost forced/coerced into taking a large mortgage also the older less well off people forced to go out the risk curve to generate some income from their hard earned capital.

If you have a painful toothache, do you do something about it, or are so afraid of a visit to the dentist that you just keep yourself dosed up on panadol and ibuprofen - and you keep increasing the number of pills you are popping as the pain intensifies? If you opt not to face up to the problem, where will that ‘strategy’ lead you to?

Welcome to our Idiocracy, where the hapless voters, mad scientist central bankers, and spineless politicians keep kicking the can down the road rather than facing up to the issue. Much more money printing, taxpayer subsidies, and negative interest rates on the horizon.

[Aaron]

Another person who can see the problem with monetary policy, inflation targeting and trickle down economics.
https://www.nzherald.co.nz/business/nick-mowbray-lets-ease-up-on-the-easing-before-pain-exceeds-gain/IJEBP7IMSV43L67A2RQ75MV7DU/

I think Nick Mowbray helped NZ secure some PPE at the height of the covid panic. Might just be confirmation bias but he seems like a smart guy. Maybe he should talk to Chloe Swarbrick and approach the issue from either side of the political spectrum as although a nice guy I assume he would lean right as he is an entrepreneur.

The younger generation need to get together to give themselves a chance. Boomers definitely won't help and GenXers won't want to be the last ones in on the ponzi scheme so will be inclined to keep things going. This is sort of becoming obvious with Labours weak response to the housing crisis and a stated desire to keep house prices rising.

[Aaron]

Another area Labour could address if it were serious about housing. I can't really call it a crisis if my own representatives in parliament don't feel that way. Immigration is not a driver for housing demand??? I call bulls**t on that statement.

An article discussing immigration running the risk of being called racist or a xenophobe.
https://www.interest.co.nz/property/109159/government-will-need-consider-immigrations-effect-housing-demand-it-starts-reopening

Labour may have touched on immigration but basically just the same open slather that National had.

[macduffy]

Labour may have touched on immigration but basically just the same open slather that National had.

In my innocence I had assumed that all immigration these days was to work in skilled positions that couldn't be filled from the NZ workforce. I should have known better, of course.

:mellow:

[artemis]

Back in 2017 Labour pledged to reduce net immigration by 20,000 to 30,000, mainly by cutting back student and work visas. Didn't happen. Student visas allow up to 20 hours work a week, and of course there are well publicised scams and rorts with some edu establishments and some employers.

Trouble with cutting back on student visas is teachers losing their jobs, tertiary mainly and restructuring to survive is under way. That's a key Labour demographic. And immigration already changed by events anyway.

[Aaron]

In my innocence I had assumed that all immigration these days was to work in skilled positions that couldn't be filled from the NZ workforce. I should have known better, of course.

:mellow:

Skilled occupations such as farm labourer or deckhand or wait staff.

Not sure but Adrian Orr says the monetary largess and low interest rates are to ensure he meets his employment target, unusual that we need 50,000 extra workers imported each year if the reserve bank is concerned about unemployment. Do none of our training organisations provide training for the unemployed? Very confusing.

[artemis]

.....Do none of our training organisations provide training for the unemployed? Very confusing.

One of ours is a recent registered tradie (plumber and gasfitter). He started out by doing a polytech foundation course, and said of the 20 or so that started only 4 finished. All (or most that left, not sure) were there collecting Jobseeker benefit, and the course was requirement by WINZ. Some left in the first week.

Our small tradie firm has taken a few off Jobseeker (no subsidy or anything), most low average and didn't last long. We don't do it any more - too high maintenance. What we can't do ourselves we sub out mostly to other small outfits.

[artemis]

Duplicated for some reason

[Aaron]

One of ours is a recent registered tradie (plumber and gasfitter). He started out by doing a polytech foundation course, and said of the 20 or so that started only 4 finished. All (or most that left, not sure) were there collecting Jobseeker benefit, and the course was requirement by WINZ. Some left in the first week.

Our small tradie firm has taken a few off Jobseeker (no subsidy or anything), most low average and didn't last long. We don't do it any more - too high maintenance. What we can't do ourselves we sub out mostly to other small outfits.

So at least some of the people who are unemployed aren't interested in working? That would be a shame not only because they are genuine bludgers but more so if it meant Adrian Orr keeps pumping house prices up to get them to work.

Is it possible removing the chance for social mobility might discourage some people. I guess I have a narrow focus and the people in power need to consider a lot more things.

[artemis]

So at least some of the people who are unemployed aren't interested in working? That would be a shame not only because they are genuine bludgers but more so if it meant Adrian Orr keeps pumping house prices up to get them to work.

Is it possible removing the chance for social mobility might discourage some people. I guess I have a narrow focus and the people in power need to consider a lot more things.

Suspect some of the leavers from the foundation course had little background in processing information and book work stuff. We do hear that there are significant levels of functional illiteracy and innumeracy among school leavers, and they would struggle in a classroom situation. That would be a reason to leave quickly. A polytech course and then an apprenticeship only needs average smarts but does need a basic education, motivation and hopefully family support.

Don't know what the answer is but the ambulance at the bottom of the cliff is way too late. And if young people don't get to work, or study, they start to sink pretty fast and then cheaper to just pay them the dole. And it's not like there are not plenty of black / grey economy jobs to supplement the benefit with cash in hand.

[Bjauck]

Covid response propels Estate Agents into the top 10 most popular jobs. It helps that government policy provides an implicit guarantee for inflation beating and ever-increasing property valuations surpassing increases in income.
https://www.nzherald.co.nz/nz/property-boom-propels-real-estate-agents-into-nzs-top-10-jobs-list/URMIIO6K2OQW2IBUKUUT7VW53Q/

Let's hope the property drunken party does not get an almighty hangover.

[Bjauck]

The IMF did not get news of Ardern's real estate guarantee for investors? There will be no general CGT from her Labour Government! Yet still the IMF bangs on about reform.

Additionally, the report noted the surging housing market could trigger a "pronounced correction", which needed to be tackled with specific measures to dampen speculative demand and unlock supply.

Mitigating near-term housing demand, particularly from investors, would help moderate price pressures," it said."Introduction of stamp duties or an expansion of capital gains taxation could reduce the attractiveness of residential property investment."
https://www.nzherald.co.nz/business/imf-warns-of-pronounced-correction-in-nzs-housing-market/UYHULKXQXUJPFSJ3UK657HAB7Q/