NZ 1st homebuyers are ScReWeD...

[Bjauck]

I don't know what you guys are on about with this 20% thing. A mate of mine just purchased a house with a 10% deposit. So its never easier to get a mortgage now and with interest rates being very low....

Funny thing is I would never have lent to that guy the amount he has borrowed, but the bank did. Is he a first home buyer? Did have a track record of being a good punctual borrower with the bank?

[stoploss]

I don't know what you guys are on about with this 20% thing. A mate of mine just purchased a house with a 10% deposit. So its never easier to get a mortgage now and with interest rates being very low....

Funny thing is I would never have lent to that guy the amount he has borrowed, but the bank did.
Blackcap it is simply not true it is easy to get a mortgage currently . Sure the LVR's have gone but lending with a 10 % deposit is limited. Also the customer will not have access to the "special " rates or will be subject to a LEM or LEI on the loan .
I have put up an article on a reply to SBQ that has pointed out why the banks are tightening up . Here is another.
https://tmmonline.nz/article/976517109/westpac-scraps-cash-backs-for-high-lvr-loans

[SBQ]

I don't know what you guys are on about with this 20% thing. A mate of mine just purchased a house with a 10% deposit. So its never easier to get a mortgage now and with interest rates being very low....

Funny thing is I would never have lent to that guy the amount he has borrowed, but the bank did.

Which goes to show the confidence that the banks have on issuing mortgages.

I'll reiterate, there are SOME major banks that DO NOT deal with mortgage brokers. I know this 1st hand experience and had been confirmed at both ends (by the broker stating so and so bank and approaching said bank directly).

If i'm not mistaken, it was Kiwi Bank that does not deal with brokers and asks the client to deal direct with them.

Why pay a mortgage broker to go around when the customer can visit each bank to get the best rate?

[stoploss]

Which goes to show the confidence that the banks have on issuing mortgages.

I'll reiterate, there are SOME major banks that DO NOT deal with mortgage brokers. I know this 1st hand experience and had been confirmed at both ends (by the broker stating so and so bank and approaching said bank directly).

If i'm not mistaken, it was Kiwi Bank that does not deal with brokers and asks the client to deal direct with them.

Why pay a mortgage broker to go around when the customer can visit each bank to get the best rate?

It's Ok if you have the time to visit each bank but do they have a branch in your neighbourhood/ town ? Banks are closing branches down at a fast rate . Brokers/advisors apparently do circa 40 % of the loans for ANZ ( and climbing) so someone must be doing something right ...
How do you know it’s the best rate ? It might be a good rate but how do you know if it's absolutely the best rate .
If you dealt with a specialist that had access to most of the providers and was doing regular business I'm sure they would have a better idea than you.
SBQ , you said Some major banks , Kiwibank is arguably not major ( less than 5 % marketshare) so name another one .
By the way Kiwibank do deal with brokers ,in particular NZHL , apart from that group they have been limited as they couldn’t possibly process the volume . Started to roll out in a bigger way now.https://www.goodreturns.co.nz/article/976516364/kiwibank-set-to-enter-adviser-market.html

I stand by my comment lending conditions have tightened .
https://www.nzadviseronline.co.nz/news/banks-tighten-lending-criteria-for-new-borrowers-271967.aspx

[stoploss]

Further evidence lending conditions have tightened -https://croakingcassandra.com/
"For households, the only material changes were (tighter) serviceability requirements. That is interesting – if not too surprising – given (a) slightly lower interest rates, and (b) some temporary easing in the Bank’s LVR restrictions."

SBQ - still waiting to hear about the banks that don't deal with brokers ?????

[JBmurc]

Further evidence lending conditions have tightened -https://croakingcassandra.com/
"For households, the only material changes were (tighter) serviceability requirements. That is interesting – if not too surprising – given (a) slightly lower interest rates, and (b) some temporary easing in the Bank’s LVR restrictions."

SBQ - still waiting to hear about the banks that don't deal with brokers ?????




I think SBS didn't but they might do now>>

[stoploss]

I think SBS didn't but they might do now>>
JB SBS do , SBQ said “some of the Majors don’t” which is wrong .

[peetter]

I got an approval for 15% deposit, no hassle. Arguably my finances are okay and job is with emergency services. Using Mortgage broker because I couldn't spend time to go around asking each bank. Funnily enough he did tell me he doesn't deal with Kiwibank which is my main bank.

[SBQ]

I got an approval for 15% deposit, no hassle. Arguably my finances are okay and job is with emergency services. Using Mortgage broker because I couldn't spend time to go around asking each bank. Funnily enough he did tell me he doesn't deal with Kiwibank which is my main bank.

As in your case, the broker we engaged with last year told us the same thing "KIWI BANK" did not deal with our broker.

If Kiwi Bank is a large enough bank to be considered 'major' in NZ.

[peat]

ANZ today becoming the first bank to change its deposit rules on apartments of less than 45 square metres from 50% to 20% equity.

[JBmurc]

ANZ today becoming the first bank to change its deposit rules on apartments of less than 45 square metres from 50% to 20% equity.

wow thats a major change ... will certainly help FHB... as buying an actually home+land is long gone in many locations sub 600K .. generally these apartments are more suited to young FHB anyway ..close to CBD's etc

[SBQ]

wow thats a major change ... will certainly help FHB... as buying an actually home+land is long gone in many locations sub 600K .. generally these apartments are more suited to young FHB anyway ..close to CBD's etc

Gee less than 45m2 dwelling? Just right for the Kiwi family with 2 children to live in. :laugh:

Bernard Hickey has something to say in his article here about the banks adverse lending behaviour on apartments, describing it as a market failure:

https://thespinoff.co.nz/business/18-06-2021/bernard-hickey-our-empires-of-cold-and-mould


Banks love discrete parcels of land with simple structures that are already built, that already have a certificate of code compliance and a residential resource consent embedded in the value of this ever-appreciating asset. It is money for jam with a very, very low capital requirement and an even lower risk of default.
Most banks loathe medium density housing developments with a cold, hard passion that has turned into to the phrase “bank-friendly” in the real estate ads for the exceptional apartment or townhouse that has slipped through the cracks into the mortgage book.

[peetter]

Gee less than 45m2 dwelling? Just right for the Kiwi family with 2 children to live in. :laugh:

Bernard Hickey has something to say in his article here about the banks adverse lending behaviour on apartments, describing it as a market failure:

https://thespinoff.co.nz/business/18-06-2021/bernard-hickey-our-empires-of-cold-and-mould

Anything else we need Bernard Hickey's opinion on?

This is great change. There's more than ever single people due to progressive destruction of family in our current society. There was a need for singles to be able to buy property and studio apartment is ideal for just 1 person.

[JBmurc]

Anything else we need Bernard Hickey's opinion on?

This is great change. There's more than ever single people due to progressive destruction of family in our current society. There was a need for singles to be able to buy property and studio apartment is ideal for just 1 person.

exactly not a property fix for all .. but helps those singles or couples , investors that what to buy entry level shelter ...would be good if Govt would back this up with laws around Quality and lease increase limiteds etc .... as I've come across a few in Auckland with stupidly high land lease rates...

If kiwis want to live in new shoe box apartments then they should at least have protection against these predator developers poor construction methods + lease rates that skyrocket after only a few years ..land lease rates shouldn't be allowed to increase higher than the CPI

[artemis]

..land lease rates shouldn't be allowed to increase higher than the CPI

No different than house price rises, and buyers know what they are getting in to in a general way at least. Plus they buy in more cheaply than a freehold property.

Leasehold places may be even more favoured for rentals now, with smaller borrowing and ground lease payments still deductible for tax. The latter has always been the case for rentals and tends to make the sums look pretty good. Until the next ground rent review anyway!

[Bjauck]

Doubled post

[Bjauck]

…
If kiwis want to live in new shoe box apartments then they should at least have protection against these predator developers poor construction methods + lease rates that skyrocket after only a few years ..land lease rates shouldn't be allowed to increase higher than the CPI I remember some 5 years ago a baby boomer commentator saying that FHBs should not expect to buy the type of property their parents bought as a first home. They should settle for a small flat. The trouble is that these days FHBs are older and often with families. So yep they often do have to settle for a small flat while the grandparents remain in their house and garden….

I would be very cautious taking on a high proportion loan buying into a market in which interest rates are possibly at their lowest point.

Ground rent increases merely reflect the increase in residential land values. In a period of rocketing house prices, it is the land component that is inflating far faster than the improvements.

[Topagent]

FHB absolutely in general think that the first home should be what our parents would have considered 2nd or 3rd homes. Image is everything and there’s no common sense. A lot of the FHB I’m selling to don’t have kids but still want 3-4 beds not two beds. It’s great news about the apartments now needing only 20% because now the sensible ones will atleast have more choice.

The market is still massively under supplied. Multi offers are still happening 80% of the time and auctions are still getting brought forward. The only change I’ve noticed is that we are getting asked the question now about the market slowing which was never happening but this is quickly rebutted when we have 10 groups looking at the house per day in the weekend and end up presenting multiple offers by the Tuesday.

[Bjauck]

FHB absolutely in general think that the first home should be what our parents would have considered 2nd or 3rd homes. Image is everything and there’s no common sense. A lot of the FHB I’m selling to don’t have kids but still want 3-4 beds not two beds. It’s great news about the apartments now needing only 20% because now the sensible ones will atleast have more choice.

The market is still massively under supplied. Multi offers are still happening 80% of the time and auctions are still getting brought forward. The only change I’ve noticed is that we are getting asked the question now about the market slowing which was never happening but this is quickly rebutted when we have 10 groups looking at the house per day in the weekend and end up presenting multiple offers by the Tuesday.

Whether it is a good time to buy a flat with only a 20% deposit when interests are at their lowest point for years and after so much price growth, remains to be seen.

Is NZ a low wage, low productivity economy where housing is a commodity for investors?
https://www.stuff.co.nz/national/politics/300348396/a-tale-of-two-cities-the-worst-of-times-for-those-drowning-in-a-society-where-housing-is-a-commodity

[Bjauck]

FHB absolutely in general think that the first home should be what our parents would have considered 2nd or 3rd homes. Image is everything and there’s no common sense. A lot of the FHB I’m selling to don’t have kids but still want 3-4 beds not two beds. It’s great news about the apartments now needing only 20% because now the sensible ones will atleast have more choice.
…

Whether it is a good time to buy a flat with only a 20% deposit when interests are at their lowest point for years and after so much price growth, remains to be seen.

Is NZ a low wage, low productivity economy where housing is a commodity for investors?
https://www.stuff.co.nz/national/politics/300348396/a-tale-of-two-cities-the-worst-of-times-for-those-drowning-in-a-society-where-housing-is-a-commodity

[fungus pudding]

Whether it is a good time to buy a flat with only a 20% deposit when interests are at their lowest point for years and after so much price growth, remains to be seen.

Is NZ a low wage, low productivity economy where housing is a commodity for investors?
https://www.stuff.co.nz/national/politics/300348396/a-tale-of-two-cities-the-worst-of-times-for-those-drowning-in-a-society-where-housing-is-a-commodity

Of course it's not a good time to buy.

[Topagent]

Disagree whole heartedly fungus the best time to buy was yesterday.

[fungus pudding]

Disagree whole heartedly fungus the best time to buy was yesterday.

The best time to buy was when interest rates were above 20%.
The money might be dear - but the asset will be cheap.
That's the time to buy with the added bonus that every dollar of mortgage reduction gives you an excellent tax free return.

[Bjauck]

Disagree whole heartedly fungus the best time to buy was yesterday. When FOMO in a rapidly escalating market becomes your overriding consideration, that is when you start making rash decisions. It is then time to step away from the agents :p.

[fungus pudding]

When FOMO in a rapidly escalating market becomes your overriding consideration, that is when you start making rash decisions. It is then time to step away from the agents :p.

The final sprint to the top of the cliff always gets a bit crowded.

[JBmurc]

When FOMO in a rapidly escalating market becomes your overriding consideration, that is when you start making rash decisions. It is then time to step away from the agents :p.

yes when you look back and when the thread was first started 2008 and Crude was calling first home buyers screwed ...

the NZ House price to income multiple was around 5. .... US research believes 3 and below is an good healthy affordable property market

At present we are around - 9 !!!... this is a BUBBLE of epic proportions .. being held up by FOMO + record low rates + HIGH rents + Media & RE Agents pumping the narrative +ongoing higher costs reg to build

Every month we have another major business failing...paper mills , NZ refinery .. we are gutting whats left of our secondary industries .. from a toxic business environment of higher energy running costs + reg costs ..... and to think Cindy was talking up downstream business growth ,,,

We have a Comrade Govt that doesn't have a clue around Business + running a country outside pandering to slogans ticking up billions to keep the lights on
, an opposition thats weak ...throw in Covid lockdowns and Tourism $$$ our Govts have relied on for many years to keep NZ looking rosy

[peetter]

Interest rates at 7-8% and multiple at 5 or Interest rates at 2% and multiple at 9, what's the difference? Low interest rates are here to stay. I doubt we will see 4% over next decade. It's been around 2% in Europe for almost 10 years now.

[fungus pudding]

Interest rates at 7-8% and multiple at 5 or Interest rates at 2% and multiple at 9, what's the difference? Low interest rates are here to stay. I doubt we will see 4% over next decade. It's been around 2% in Europe for almost 10 years now.


From today's flipboard

https://www.stuff.co.nz/business/money/300350590/asb-predicts-ocr-increase-from-november

[JBmurc]

Interest rates at 7-8% and multiple at 5 or Interest rates at 2% and multiple at 9, what's the difference? Low interest rates are here to stay. I doubt we will see 4% over next decade. It's been around 2% in Europe for almost 10 years now.

Yes, dead right and many Nations GOVT -Central banks know this but you can only laden so much debt on the consumer before he can't consume anywhere as much>>> even at record low rates we already see Central banks must buy the same debt thats created as no one wants it the Monetary system is broken and being patched over but every increasing loans here in NZ to buy every increasing debt notes BONDs ...

If I lent my capital I would want a good return.... if it returned nothing then what value does that capital have ?? you better off spending it all and ticking up to the eyeballs and use all these cheap capital >>>> which is what we are doing at record levels

[unhuman]

Doubles in price every 10 years? ie about 7% per year

Thats a new one Duncan. It used to be 10% a year - ie doubles in price every 7 years.

Do you still reckon propert has doubled every 10 years from 1066 to 2006 and will do so from 2006 to 2056?

Year average house price
2006....400k
2016....800k
2026....1.6 m
2036....3.2 m
2046....6.4m
2056....12.8m

A house is considered expensive if it is 7 times the average wage.

What are the chances of the average wage being $229,000 (1.6m/7 = 229k) in 2026?

Pretty slim I'd say.

If house prices keep doubling every 10 years no one will be able to afford to buy them.


Quite an interesting comment to look back on - made on the first page of this thread in 2007.

[JBmurc]

Quite an interesting comment to look back on - made on the first page of this thread in 2007.

Yes but sadly many New and old investors think Property can only continue to rise ,,,

if the lowest lending rates went back to 7% and stayed there for next decade I can promise you NZ home prices would not double .. well not unless we have massive inflation in wage growth....now if rates went Negative and we got paid interest for having debt then yes we could keep the Bubble growth in play

[peetter]

From today's flipboard

https://www.stuff.co.nz/business/money/300350590/asb-predicts-ocr-increase-from-november

I've seen many articles like this. It doesn't change my view. It's my opinion obviously based on the current situation. Common sense says there will not be significant raise in rates for years, because people woudn't be able to keep their home. No bank or government wants this. That's why I said I think the rates won't go up over 4%.

I can of course be completely wrong, I have no economic education and only go by my self study and observations.

[Crypto Crude]

It's been a sick journey for sure...I lost myself over the years but had a pretty good life... I still don't have a house! but In my attempt to skip the 30 loan term of a house I've faired up not too badly and having an unreal year.... I now have slightly more than a whole house freehold....
Pity though ... a few months back I had my investments past 1 million dollars... but here I am with a portfolio been slashed quite abit but still around 500k... I'm going all out here so pray for me that I can get that house freehold early next year and still be rolled 🙏 for life plus investments....
1 time for a freak pup 🐶 !!! Lol....

[fungus pudding]

I've seen many articles like this. It doesn't change my view. It's my opinion obviously based on the current situation. Common sense says there will not be significant raise in rates for years, because people woudn't be able to keep their home. No bank or government wants this. That's why I said I think the rates won't go up over 4%.

I can of course be completely wrong, I have no economic education and only go by my self study and observations.

I don't think you're far off the mark.

[fungus pudding]

I've seen many articles like this. It doesn't change my view. It's my opinion obviously based on the current situation. Common sense says there will not be significant raise in rates for years, because people woudn't be able to keep their home. No bank or government wants this. That's why I said I think the rates won't go up over 4%.

I can of course be completely wrong, I have no economic education and only go by my self study and observations.

I don't think you're far off the mark.

[fungus pudding]

It's been a sick journey for sure...I lost myself over the years but had a pretty good life... I still don't have a house! but In my attempt to skip the 30 loan term of a house I've faired up not too badly and having an unreal year.... I now have slightly more than a whole house freehold....
Pity though ... a few months back I had my investments past 1 million dollars... but here I am with a portfolio been slashed quite abit but still around 500k... I'm going all out here so pray for me that I can get that house freehold early next year and still be rolled �� for life plus investments....
1 time for a freak pup �� !!! Lol....


You probably mean unencumbered or mortgage free rather than freehold. Nearly all NZ houses are freehold, which refers to land tenure and simply means not leasehold. It's a common misnomer - but those who profess some financial prowess should know the difference.

[Bjauck]

You probably mean unencumbered or mortgage free rather than freehold. Nearly all NZ houses are freehold, which refers to land tenure and simply means not leasehold. It's a common misnomer - but those who profess some financial prowess should know the difference. ...and all freehold, leasehold and Maori land is owned by The Queen (in right of NZ). We are all The Queen's tenants.

[arekaywhy]

...and all freehold, leasehold and Maori land is owned by The Queen (in right of NZ). We are all The Queen's tenants.


free men? no; subjects? unfortunately yes

[Crypto Crude]

You probably mean unencumbered or mortgage free rather than freehold. Nearly all NZ houses are freehold, which refers to land tenure and simply means not leasehold. It's a common misnomer - but those who profess some financial prowess should know the difference.

I don't have a problem whatsoever for using the term... everyone understands what I mean even you...!


What is the meaning of freehold property?

: Freehold property can be defined as any estate which is "free from hold" of any entity besides the owner. Hence, the owner of such an estate enjoys free ownership for perpetuity and can use the land for any purposes however in accordance with the local regulations

[fungus pudding]

I don't have a problem whatsoever for using the term... everyone understands what I mean even you...!


What is the meaning of freehold property?

: Freehold property can be defined as any estate which is "free from hold" of any entity besides the owner. Hence, the owner of such an estate enjoys free ownership for perpetuity and can use the land for any purposes however in accordance with the local regulations

That is plainly wrong. Almost all residential property in NZ is freehold, and over 60% of those freehold properties are mortgaged to a lender, which does not change their f/h status. The titles will describe them as leasehold or fee simple, (which is freehold). I just though with all your blah and blab promoting yourself as some sort of financial whizz-kid I'd be doing you a favour with a little basic education.

[Bjauck]

I don't have a problem whatsoever for using the term... everyone understands what I mean even you...!


What is the meaning of freehold property?

: Freehold property can be defined as any estate which is "free from hold" of any entity besides the owner. Hence, the owner of such an estate enjoys free ownership for perpetuity and can use the land for any purposes however in accordance with the local regulations. As FP said, When you use the term freehold do you mean mortgage-free or an unencumbered freehold property? I know it is a term that can cause confusion. The owner of freehold title is free to encumber it (in exchange for a loan.)

[fungus pudding]

. As FP said, When you use the term freehold do you mean mortgage-free or an unencumbered freehold property? I know it is a term that can cause confusion. The owner of freehold title is free to encumber it (in exchange for a loan.)

And that is the important point. If the owner does encumber a freehold property by raising a mortgage, or mortgages (first, second, third or subsequent.....) it will still be a freehold property.

[Crypto Crude]

Obviously I am talking about freehold property and land...

[Crypto Crude]

Google definition "Buying freehold means buying both the building and the land. You own both outright, and are responsible them. There is no limit to the time on your ownership."...

.....

[fungus pudding]

[QUOTE=Crypto Crude;894618]Google definition "Buying freehold means buying both the building and the land. You own both outright, and are responsible them. There is no limit to the time on your ownership."...[Quote]

Wrong again. Certainly buying land, not neccesarily the building, which could be a rented relocatable shed, and not necessarily owning outright.
To own outright means to have ownership of an assett using your own money, i.e. fully paid for, whereas a freehold property may br mortgaged to a lender.
You cannot own a property outright if you have borrowed againt it.
You can own a freehold property which is mortgaged or encumbered with any sort of loan.

Longman definition of own outright: to own something such as a house completely because you have paid the full price with your own money.
Pop along to your local university and sneak into a few law lectures. Chances are no-one will ask who you are.

Own outright 'to own something such as a house completely because you have paid the full price with your own money'

[Crypto Crude]

Ok thank you...
I will keep the wording to your liking 👍 😊

[JBmurc]

[QUOTE=Crypto Crude;894618]Google definition "Buying freehold means buying both the building and the land. You own both outright, and are responsible them. There is no limit to the time on your ownership."...[Quote]

Wrong again. Certainly buying land, not neccesarily the building, which could be a rented relocatable shed, and not necessarily owning outright.
To own outright means to have ownership of an assett using your own money, i.e. fully paid for, whereas a freehold property may br mortgaged to a lender.
You cannot own a property outright if you have borrowed againt it.
You can own a freehold property which is mortgaged or encumbered with any sort of loan.

Longman definition of own outright: to own something such as a house completely because you have paid the full price with your own money.
Pop along to your local university and sneak into a few law lectures. Chances are no-one will ask who you are.

Own outright 'to own something such as a house completely because you have paid the full price with your own money'

Yes "FEE SIMPLE" freehold Title--- Certificate of Title is ones name with no lender is a great accomplishment 100% your home .... took me many years of different ownership with Banks to finally buy without a bank on the title >>> then you can use your properties full equity to drive further investments

[fungus pudding]

[QUOTE=fungus pudding;894621][QUOTE=Crypto Crude;894618]Google definition "Buying freehold means buying both the building and the land. You own both outright, and are responsible them. There is no limit to the time on your ownership."...

Yes "FEE SIMPLE" freehold Title--- Certificate of Title is ones name with no lender is a great accomplishment 100% your home .... took me many years of different ownership with Banks to finally buy without a bank on the title >>> then you can use your properties full equity to drive further investments

That's hard to follow. You can have a freehold property, (aka - fee simple) and still have a loan or mortgage registered on the title. Not sure of any advantage in buying without a mortgage or 'different ownership with banks' whatever you mean by that. You can always repay the mortgage and raise a new one with the same lender - and if you get your timing right your mortgage interest can be tax deductable if used to purchase income producing assetts, although Labour have changed the rules a bit on some residential investments.

[JBmurc]

[QUOTE=JBmurc;894702][QUOTE=fungus pudding;894621]

That's hard to follow. You can have a freehold property, (aka - fee simple) and still have a loan or mortgage registered on the title. Not sure of any advantage in buying without a mortgage or 'different ownership with banks' whatever you mean by that. You can always repay the mortgage and raise a new one with the same lender - and if you get your timing right your mortgage interest can be tax deductable if used to purchase income producing assetts, although Labour have changed the rules a bit on some residential investments.

LOL yah sorry about that >> what I Should have said was BUYing a Residential freehold property without having a morg reg on the title is a great achievement

Then you can use that great equity and fund other investments and be able to claim all costs of that lending ..Is how I have set it up >> we have debt but is 100% claimable just like many of our monthly costs ..

I don't get why people are happy to have debt over their home Car , private assets ..but at the same time have large amounts of their own capital in say the Sharemarket or term deposits,Bonds etc

[fungus pudding]

[QUOTE=fungus pudding;894708][QUOTE=JBmurc;894702]

LOL yah sorry about that >> what I Should have said was BUYing a Residential freehold property without having a morg reg on the title is a great achievement


How about OWNING a res. property without a mortgage......etc. You can purchase it with a mortgage or two - repay them as your circumstances allow - then refinance, creating a tax effective mortgage.

[JBmurc]

[QUOTE=JBmurc;894772][QUOTE=fungus pudding;894708]

How about OWNING a res. property without a mortgage......etc. You can purchase it with a mortgage or two - repay them as your circumstances allow - then refinance, creating a tax effective mortgage.

Yes for sure .. we had a Morg over are last family home along with a company loan >> we decided to change tack sell the family home and move to a cheaper home area in turn being able to BUY Morg free .... then use new equity to purchase more spec property through company ... take profits ... buy commercial property=yield ...(all using RES rates)

Anyway you look at it RES Property is a great first stage of building equity and to put a roof over your head ... once the family home has good equity use elsewhere

[Bjauck]

[QUOTE=fungus pudding;894783][QUOTE=JBmurc;894772]

Yes for sure .. we had a Morg over are last family home along with a company loan >> we decided to change tack sell the family home and move to a cheaper home area in turn being able to BUY Morg free .... then use new equity to purchase more spec property through company ... take profits ... buy commercial property=yield ...(all using RES rates)

Anyway you look at it RES Property is a great first stage of building equity and to put a roof over your head ... once the family home has good equity use elsewhere
Yep. For those who earn a sufficiently high salary and can raise the initial deposit these days, in NZ, under this government more than ever, owner-occupied home ownership is the foundation upon which a bigger nest egg can be built. Why?

1. Low interest rates on loans for residential real estate.
2. Untaxed annual return from the investment (imputed net rent)
3. Leveraged capital gain on equity.

It is also the tax efficient way of saving for retirement. Owner occupied homes (no matter what their value) are excluded from asset testing for some benefits/subsidies.

[SBQ]

[QUOTE=JBmurc;894793][QUOTE=fungus pudding;894783]
Yep. For those who earn a sufficiently high salary and can raise the initial deposit these days, in NZ, under this government more than ever, owner-occupied home ownership is the foundation upon which a bigger nest egg can be built. Why?

1. Low interest rates on loans for residential real estate.
2. Untaxed annual return from the investment (imputed net rent)
3. Leveraged capital gain on equity.

It is also the tax efficient way of saving for retirement. Owner occupied homes (no matter what their value) are excluded from asset testing for some benefits/subsidies.

That I did not know!!

and for those that gamble it all for their children to get 'better?' private school education, appears to be their only goal for their children to have high paying jobs at the end. So they can afford to buy the high priced homes without consideration of the rest of the population that are stuck in rental situations. Yeh!! Great job NZ! What a way to address inequality and child poverty. :t_down:

[Entrep]

I'm probably self-detonating a grenade here, but what's to stop people looking to purchase real estate from buying somewhere cheap and working up from there? I have owned the first house I bought for 10 years and never lived in it. Instead I rented much cheaper accommodation and built up equity and reduced the loan.

Auckland is a first class city and its popularity will only increase as the rest of the world turns to crap. Waiting for prices to drop to any significant degree is futile as demand will always be more than enough.

[fungus pudding]

[QUOTE=Bjauck;894806][QUOTE=JBmurc;894793]

That I did not know!!

and for those that gamble it all for their children to get 'better?' private school education, appears to be their only goal for their children to have high paying jobs at the end. So they can afford to buy the high priced homes without consideration of the rest of the population that are stuck in rental situations. Yeh!! Great job NZ! What a way to address inequality and child poverty. :t_down:
Be assured that post,
2053, should not be attributed to fungus pudding. I most certainly did not post it

[peetter]

I'm probably self-detonating a grenade here, but what's to stop people looking to purchase real estate from buying somewhere cheap and working up from there? I have owned the first house I bought for 10 years and never lived in it. Instead I rented much cheaper accommodation and built up equity and reduced the loan.

Auckland is a first class city and its popularity will only increase as the rest of the world turns to crap. Waiting for prices to drop to any significant degree is futile as demand will always be more than enough.

There's absolutely nothing stopping them. You're correct.

[stoploss]

I'm probably self-detonating a grenade here, but what's to stop people looking to purchase real estate from buying somewhere cheap and working up from there? I have owned the first house I bought for 10 years and never lived in it. Instead I rented much cheaper accommodation and built up equity and reduced the loan.

Auckland is a first class city and its popularity will only increase as the rest of the world turns to crap. Waiting for prices to drop to any significant degree is futile as demand will always be more than enough.
40 % deposit required for an investment property that would stop a lot of people ......

[JBmurc]

40 % deposit required for an investment property that would stop a lot of people ......

Rising Interest rates as well ... I see ASB making the move 1yr fixed 2.55% their lowest

[Logen Ninefingers]

Inflation running hot at 3.3%
All that money printing, profligate government spending, and what became basically a free money giveaway to borrowers at the expense of savers - it's all now coming home to roost.
Something has to be done about these idiots paying any old price for aging housing stock & then using said house as an ATM to fund their lifestyles - the behavior (mania) of these people is bringing the country to its knees and destroying the purchasing power of our dollar. The housing markets out-of-control irrational exuberance has lead the Reserve Bank to act in crazy and outrageous ways to defend it, slashing the OCR to the point where credit issuance was unleashing a tsunami of new money & people were viewing borrowings on the same footing as earnings.

Let's get some sanity restored and if some people suffer of the consequences of their own decisions, then they only have themselves to blame. If you are weak enough to join in a speculative mania and end up paying the piper, look in the mirror to see the culprit.

[Bjauck]

[QUOTE=Bjauck;894806][QUOTE=JBmurc;894793]

That I did not know!! . :t_down:
In some circumstances the home is exempt from asset testing for example..
https://www.seniorline.org.nz/rest-homes-hospitals/cost-of-care/income-and-asset-testing/

[SBQ]

Inflation running hot at 3.3%
All that money printing, profligate government spending, and what became basically a free money giveaway to borrowers at the expense of savers - it's all now coming home to roost.
Something has to be done about these idiots paying any old price for aging housing stock & then using said house as an ATM to fund their lifestyles - the behavior (mania) of these people is bringing the country to its knees and destroying the purchasing power of our dollar. The housing markets out-of-control irrational exuberance has lead the Reserve Bank to act in crazy and outrageous ways to defend it, slashing the OCR to the point where credit issuance was unleashing a tsunami of new money & people were viewing borrowings on the same footing as earnings.

Let's get some sanity restored and if some people suffer of the consequences of their own decisions, then they only have themselves to blame. If you are weak enough to join in a speculative mania and end up paying the piper, look in the mirror to see the culprit.


I sense your anger however, NZ has long gone sold off houses as commodity for profiteering a LONG time ago. I had a strong sense this was going to happen when I first arrived in 1997. How could one not see this? A country with no capital gains tax on houses, no controls on how many could buy houses? New taxes to discourage investments in more productive assets (ie share ownership). The game is clearly rigged in advantage for those investing into house a LONG time ago.

Here's a fact I read the other day. In America, the top 10% own 85% of the wealth in their stock markets. In NZ, what % of wealth do the top 10% own houses in NZ? Then you will understand why NZ will always be a low productive economy.

[fungus pudding]

I sense your anger however, NZ has long gone sold off houses as commodity for profiteering a LONG time ago. I had a strong sense this was going to happen when I first arrived in 1997. How could one not see this? A country with no capital gains tax on houses, no controls on how many could buy houses? New taxes to discourage investments in more productive assets (ie share ownership). The game is clearly rigged in advantage for those investing into house a LONG time ago.

Here's a fact I read the other day. In America, the top 10% own 85% of the wealth in their stock markets. In NZ, what % of wealth do the top 10% own houses in NZ? Then you will understand why NZ will always be a low productive economy.

"In NZ, what % of wealth do the top 10% own houses in NZ?" What in the name of Allah does that mean?

[Bjauck]

"In NZ, what % of wealth do the top 10% own houses in NZ?" What in the name of Allah does that mean?

I understood it well.

"What % of their wealth do the wealthiest 10% in NZ have in residential real estate?"

Does anyone have an answer, either in relation to the top 10% of adults or of households?

[fungus pudding]

I understood it well.

"What % of their wealth do the wealthiest 10% in NZ have in residential real estate?"

Does anyone have an answer, either in relation to the top 10% of adults or of households?

Good guess. Your interpretation is probably right.
To answer your question we neeed to know what it takes to make the top 10%. According to this site,
https://www.newshub.co.nz/home/money/2020/10/revealed-how-your-wealth-ranks-compared-to-other-new-zealanders.html
in 2020 it was $860,000.
That seems ridiculously low. Surely you'd need several million to make that list? I know a fair number of people with a net worth of several million, and the vast majority own no residential property other than their own home. Most of them certainly 'cut their teeth' on flats and/or houses but progressed to commercial and industrial investments. I'm sure that's common throughout the country.

[SBQ]

I understood it well.

"What % of their wealth do the wealthiest 10% in NZ have in residential real estate?"

Does anyone have an answer, either in relation to the top 10% of adults or of households?

Maybe I should rephrase it. What % of wealth in NZ is held in houses vs the NZX? I recall Bernard Hickey's figure of $1.5T the NZ real estate market total.

[Bjauck]

Good guess. Your interpretation is probably right.
To answer your question we neeed to know what it takes to make the top 10%. According to this site,
https://www.newshub.co.nz/home/money/2020/10/revealed-how-your-wealth-ranks-compared-to-other-new-zealanders.html
in 2020 it was $860,000.
That seems ridiculously low. Surely you'd need several million to make that list? I know a fair number of people with a net worth of several million, and the vast majority own no residential property other than their own home. Most of them certainly 'cut their teeth' on flats and/or houses but progressed to commercial and industrial investments. I'm sure that's common throughout the country.
Thanks FP.

I found the item ambiguous. Did the figures relate to all NZers including minors or do they relate to NZers over the age of 18 or 21 or whatever? Rashbrooke also switches to referring to “families” too.

If the figures relate to all people including minors then $860K+ net assets per person to be part of the top decile sounds quite high, even these days. If there is a household of two adults then that could be $1620K. So that could be an above average house (in most parts of NZ) less a mortgage plus significant KiwiSaver and other assets.


With the increased disparity of wealth in NZ, coupled with the fact that wealth increases markedly with age, you would need considerably more than $860K to be in the top 10% of 55-65 year olds.


I would imagine that asset inflation over the past decade or so would have benefited the wealthiest 1% significantly more than the following 9% in that top decile.

[Bjauck]

Maybe I should rephrase it. What % of wealth in NZ is held in houses vs the NZX? I recall Bernard Hickey's figure of $1.5T the NZ real estate market total.

I found some info:

NZ Median House value:
$637k in June 2020
$820k in June 2021


$401B current capitalisation of companies listed on the NZX (e.g. includes the total value of all shares of Australian companies which have a listing on the NZX.) SO perhaps about $250B when you strip out the big Aussies?


$1.4T Total NZ Housing Stock valuation (probably closer to your figure now!)
$280B mortgage debt in March 2020 (probably more now)


Thanks to our very expensive residential real estate, NZ is the fourth “wealthiest” country per capita in the World.


https://www.stuff.co.nz/business/300340466/new-zealanders-fourthrichest-in-the-world

[FTG]

Maybe I should rephrase it. What % of wealth in NZ is held in houses vs the NZX? I recall Bernard Hickey's figure of $1.5T the NZ real estate market total.

SBQ, I'll put it to you again being rather loose & flippant with reality & your view of it. You are pulling some long bows, & once again showing that your epistemological framework needs some heavy maintenance work. So yes, perhaps you should rephrase your questions.

I respectfully suggest that you should do objective & non-superficial research and know the facts & correct answers to these rhetorical questions you ask; BEFORE you ask them. Do that, with some humility thrown in, and you might actually find that the answers politely challenge your entire view on macro-economics, including the inner workings & idiosyncrasies of the NZ residential housing market.

Some quick facts & factoids for you to ruminate over. Some of them do clearly contradict your glib "statements of fact".

- The TOTAL Cap' of the US equity markets is now over US$47 Trillion.
- Over 40% of the US equity markets are owned by FOREIGN interests. Meaning on a "good day" US interests (institutional, retail, etc) own "just" US$28 Trillion worth.
- Over the last 30 years US retail investors have owned between 15 - 35% of the US market.
- Counterintuitively, despite Covid created uncertainties, but primarily because of the subsequent & unprecedented expansion of the FED Balance Sheet, household savings in the US is now the highest it has been for over 40 years!
- Over the last 12 months total new funds entering into the US equity markets has exceeded that of the last 20 years COMBINED. Phenomenal huh.
- So, lets err in your favour and say US retail investors now own 35% of the US market.
- This would mean, that cohort currently has US$16.5 Trillion invested in US equities.
- Meanwhile, total housing stock in the USA is said to currently value up to over US$36 Trillion. Over 95% of that is owned by US Citizens, so say US$34 Trillion

So in summary, the average Yank has far more of their household wealth tied-up in housing than Equities. More than double!

[Bjauck]

…
So in summary, the average Yank has far more of their household wealth tied-up in housing than Equities. More than double! interesting information in your post. I am sure most households in English speaking countries have more invested in housing than in listed company shares.

Taking into account overseas ownership of NZX listed companies, do you think The ave NZer has at least 14 times as much net equity invested in housing as in NZX listed equities?

I guess we should also consider pension assets? American households would invest indirectly in stocks and shares via pension and investment plans. Nz is still a minnow with respect to pension funds and managed funds. A greater proportion of NZ pension and managed fund assets would also be invested off-shore.

How do we treat trust assets? NZ has a large number of family trusts. Would you count shares and real estate owned by a trust as part of the settlor’s assets, or divide them up equally between all of the discretionary beneficiaries?

[kiora]

Read somewhere where NZX NZ % ownership has increased over last few years
https://www.nzherald.co.nz/business/foreign-ownership-of-nz-stocks-drops-in-june-quarter-brokers/JFCAY4UTMHGUQC6KN426NJOHJM/
https://milfordasset.com/insights/potential-problems-nzxs-high-level-foreign-investment
"Meanwhile, NZ strategic stakes have nudged up slightly in recent years, mainly because of the Government’s controlling stakes in the newly listed electricity generators, Mighty River Power, Meridian Energy and Genesis Energy.

Forsyth Barr has collected similar NZX data since 2004, mainly in terms of the involvement of overseas managed funds in this country.

These figures show that offshore managed funds now own 44 per cent of the NZX compared with Goldman Sachs’ 26 per cent figure. The difference between the two figures is because Goldman Sachs data is based on the total value of all listed companies whereas the Forsyth Barr figures are a percentage of the market’s free float.

The free float is the value of all listed companies after deducting large strategic stakes. Strategic stakes include the Crown’s holding in the electricity companies and the local regional council’s holding in Port of Tauranga.

The Goldman Sachs and Forsyth Barr overseas institutional ownership figures are essentially the same when their different methodologies are taken into account."

[SBQ]

interesting information in your post. I am sure most households in English speaking countries have more invested in housing than in listed company shares.

Taking into account overseas ownership of NZX listed companies, do you think The ave NZer has at least 14 times as much net equity invested in housing as in NZX listed equities?

I guess we should also consider pension assets? American households would invest indirectly in stocks and shares via pension and investment plans. Nz is still a minnow with respect to pension funds and managed funds. A greater proportion of NZ pension and managed fund assets would also be invested off-shore.

How do we treat trust assets? NZ has a large number of family trusts. Would you count shares and real estate owned by a trust as part of the settlor’s assets, or divide them up equally between all of the discretionary beneficiaries?

Great response. I won't directly respond to FTG's reply because he misses my point, though I will say some of his figures don't address my previous question at all.

Since this thread is about how screwed 1st time home buyers are in NZ, i'm trying to get some meaningful data on the reasons why, maybe some basic simple observations like what % people in NZ hold their wealth in other assets instead of houses? Where do the top 10% of the richest in NZ sit and where to the rest, 90% of the population sit in terms of how they can invest?

The way I see it in NZ, it's very clear the top wealthiest (and let's include all those investment housing trusts because there are so many people that have their $ invested in these schemes) say 10% - how much of this segment can influence the house price in NZ? Because the way I see it is they've turned the NZ residential market into a stock market hype. Over in the US house prices nationally rose 11.6% - here in NZ we're getting close to 30%. What those people in 'that camp of owing the houses as investments' fail to see is the bulk of the price increase occurred for most of NZ population (a fair guess 80% of the total population is affected by the rapid house price rise?). There are hot spots in the US but no way does 80% of their total population is affected from say a 30% rise in housing prices. Even at 20% ? are there some figures we can dig?

Oh and let's not forget about the market manipulation factor. There was a time few years ago that the Jacinda assumed the house price rise in NZ was caused by foreigners buying up houses in NZ. So she imposed a foreign buyer's ban. If it's not these foreign wealthy people buying houses in NZ, then who else? Jacinda has mentioned earlier in the year that a high % of the buyers of houses in NZ were those in the 'already own 4 or 5 houses camp'. Let me ask again, do the top 5 or 10% people in America have an active role in influencing their house price market or do they have a MORE active role in investing the majority of their wealth in the US stock market? What i'm looking at is this 30% rise in NZ houses affects far more of the total NZ population than the 11.6% rise of houses in America affecting their population.

Investing for retirement? NZ has been slow in adopting such 401K schemes like in America, and therefore the size of the Kiwi Saver invested is a lot smaller per capita. Well it will be less because NZ income per capita is a lot less than in America; so when you look at the minimum 3% employer contribution, it's almost a waste of time for a person on $100K/year income. Also as I mentioned before, NZ's tax structure is unfavorable for Kiwi Saver vs buying another house that sees tax free capital gains after 10 years.

Perhaps i'm biased the wrong way. NZ is a small country, we should not be priding ourselves being wealthy as our house prices rocket out of control. We're exposing ourselves a huge amount of risk being tied in 1 asset. There needs to be a CGT on houses or some land tax in NZ and or take away the taxation of Kiwi Saver / PIE funds or do what they do in N. America by 'tax deferring' the gains until retirement for those superannuation schemes.

BTW, it was John Key's party that stopped investment in the NZ Superfund for many years. The opportunity cost lost was massive when i'm seeing the DOW near 35K.

[Bjauck]

Ardern has a good newspeak way of turning failures into signs of success. Inflation at a rate exceeding guidelines becomes a sign of a booming economy; 30% house price rises a sign of having managed covid well. While there may be a little bit of truth in that, mostly they are a sign of failures (failure of housing supply, failure to provide affordable appropriate first homes, failure to improve labour productivity, etc.)

That is not to say that I think National would have done any better in our Covid era.

[FTG]

I won't directly respond to FTG's reply because he misses my point

and I'm certainly not the only one SBQ. ;-)
Therein lies the problem with asking poorly constructed rhetorical questions as a primary way of espousing one's opinion/s.

So let's ask you a direct question. What is your actual number one key point?
In other words, when you distil it all down, (let's face it, you have written a LOT of the same stuff....you must feel like a broken record) what is the core, fundamental, foundational, belief/principle/opinion that you are wishing to propagate on this thread?

This is your opportunity SBQ! Openly present your thinking for all & sundry to view, inspect & challenge (or as it may be, support).
However, as a friendly challenge, there is just ONE condition....... your answer needs to be limited to one well-constructed sentence; succinct & concise. No waffling, no glibness, no doubts. Straight to the point.

[iceman]

Interesting discussion. But a very difficult one due to the fact it is hard to know what numbers are correct. I read an article by Brian Gaynor on Business Desk on 17 July, which discusses this issue amongst others. His numbers about where USA individuals have their investments is very different to what FTG has posted
Below is a summary from that article. NZD for NZ and equivalent USD in brackets for USA. It indicates Kiwis hold a far higher proportion of their wealth in property than Americans do.

It states NZ net wealth in real estate is NZ$ 1.42 trillion (USD 40.1t), financial assets NZ$ 1.19 (USD 105.6) liabilities NZ$ 0.31t (16.3t)& total net wealth NZ$ 2.30t (USD 129.5)

[iceman]

Interesting discussion. But a very difficult one due to the fact it is hard to know what numbers are correct. I read an article by Brian Gaynor on Business Desk on 17 July, which discusses this issue amongst others. His numbers about where USA individuals have their investments is very different to what FTG has posted
Below is a summary from that article. NZD for NZ and equivalent USD in brackets for USA. It indicates Kiwis hold a far higher proportion of their wealth in property than Americans do.

It states NZ net wealth in real estate is NZ$ 1.42 trillion (USD 40.1t), financial assets NZ$ 1.19 (USD 105.6) liabilities NZ$ 0.31t (16.3t)& total net wealth NZ$ 2.30t (USD 129.5)

[SBQ]

Ardern has a good newspeak way of turning failures into signs of success. Inflation at a rate exceeding guidelines becomes a sign of a booming economy; 30% house price rises a sign of having managed covid well. While there may be a little bit of truth in that, mostly they are a sign of failures (failure of housing supply, failure to provide affordable appropriate first homes, failure to improve labour productivity, etc.)

That is not to say that I think National would have done any better in our Covid era.

I agree I don't think National would of done any better and Ardern or not - all these politicians are smooth talkers. How bad are things really here in NZ? My father left NZ at a time when uni education was free, income taxation was high, the gov't funded all sorts of developments, infrastructures, hydro, etc. Over the many decades living in Canada, he's kept an eye on what's going on in NZ and he was mindful to tell me to do the same thing as I chose to live in NZ. My relatives here constantly ask me when will my dad move back? I said yes there was a time he would consider moving back but FIF is what sealed his fate (and likewise with the many Kiwi's he knew living in Canada). I'm reminded in hearing how Canadian winters are very cold - but snowbirds typically spend a short trip to the southern US or a long vacation in Mexico; and can do so cheaply. If one has the $, they live near Vancouver where winter temperatures are comparable to Christchurch. Does one have to wonder why 20% Kiwis choose to stay living abroad?

The housing mess not only affects future generations but also affects migrants coming to NZ. As an example last week at my son's play date with his school friend, we visited their home. The father of my son's friend migrated from India in 2013 and had a struggled in finding a house as the earthquakes affected the housing stock. So in FOMO fashion they UNknowingly bought one of those leaky house syndrome (2 story, plaster cladded with no roof eaves). He was telling me how the real estate agent supplied all the details like a building report (whom the home owner supplied), EQC scope of works & damages, things that would easily satisfy the new migrant buyer (but not so easily to the local buyer). He told me after a year they noticed moisture creeping in through the walls and when they investigated, they discovered rotting of the timber framing. They had some coverage by insurance and EQC but he told me no builder would guarantee their work on the exterior re-cladding. Quote after quote, all the builders said the same thing and he had estimates around $400K which was about 80% of the value of the house. So his situation was, is it worth while to spend all that $ ? I told him even if you did, you would still end up with a house of the SAME design. The fault is not just only lack of maintenance but these types of houses offer little or no protection of water ingress into the building envelope. Would a greater supply of house in NZ fix this situation? Maybe.

Nevertheless, they are in the consent stages of building a new home but he's disgusted at how expensive building costs are. If the housing stock goes up in price, so will the building cost as those in trade won't leave free $ on the table.

[peetter]

Interesting discussion. But a very difficult one due to the fact it is hard to know what numbers are correct. I read an article by Brian Gaynor on Business Desk on 17 July, which discusses this issue amongst others. His numbers about where USA individuals have their investments is very different to what FTG has posted
Below is a summary from that article. NZD for NZ and equivalent USD in brackets for USA. It indicates Kiwis hold a far higher proportion of their wealth in property than Americans do.

It states NZ net wealth in real estate is NZ$ 1.42 trillion (USD 40.1t), financial assets NZ$ 1.19 (USD 105.6) liabilities NZ$ 0.31t (16.3t)& total net wealth NZ$ 2.30t (USD 129.5)


NZX has very limited number of companies listed and investing oversees hasn't been easy until companies like Hatch came around. Even now the FIF is somewhat of a stop for average retail investor.

[SBQ]

NZX has very limited number of companies listed and investing oversees hasn't been easy until companies like Hatch came around. Even now the FIF is somewhat of a stop for average retail investor.

Still no excuse for NZ to have a limited range of investments. The reason is clear - past NZ gov'ts have successfully turned houses into a commodity for maximum profit, while other investment choices like Kiwi Saver / PIE funds are taxed at RWT. If you look at America (like Canada), the tax approach there is entirely the opposite of NZ. Own more than 1 house and you will pay CGT. Want to invest in the stock market via an education / disability / TFSA RothIRA fund - then you get the tax free or tax deferred benefits. The wealthy realise the cards are stacked against them if they use houses a as commodity to profit (even with mortgage leveraging). If you're a non-resident wanting to buy a house in Canada, you pay a 20% 1 off tax! (that's $200K for every $1M on a luxury house, not small change here). Leave it empty like a vacation home, and you'll be dong with a Vacancy tax every year. The message is clear over there just like the message is clear in NZ that houses has made the top 10 or 20% of NZ rich.

Remember, 20+ years ago NZ treated all asset classes the same - foreign shares or not, they had no CGT or taxes applied to them. Then FIF came along to penalize foreign share investments (interestingly FIF does not apply to houses overseas) ; all while capital gains on houses were not touched. What kind of message is the NZ gov't telling? The UN is certainly not fooled about this kind of approach.

[fungus pudding]

Still no excuse for NZ to have a limited range of investments. The reason is clear - past NZ gov'ts have successfully turned houses into a commodity for maximum profit, while other investment choices like Kiwi Saver / PIE funds are taxed at RWT. If you look at America (like Canada), the tax approach there is entirely the opposite of NZ. Own more than 1 house and you will pay CGT. Want to invest in the stock market via an education / disability / TFSA RothIRA fund - then you get the tax free or tax deferred benefits. The wealthy realise the cards are stacked against them if they use houses a as commodity to profit (even with mortgage leveraging). If you're a non-resident wanting to buy a house in Canada, you pay a 20% 1 off tax! (that's $200K for every $1M on a luxury house, not small change here). Leave it empty like a vacation home, and you'll be dong with a Vacancy tax every year. The message is clear over there just like the message is clear in NZ that houses has made the top 10 or 20% of NZ rich.

Remember, 20+ years ago NZ treated all asset classes the same - foreign shares or not, they had no CGT or taxes applied to them. Then FIF came along to penalize foreign share investments (interestingly FIF does not apply to houses overseas) ; all while capital gains on houses were not touched. What kind of message is the NZ gov't telling? The UN is certainly not fooled about this kind of approach.

Translation: 'I'm an absolute idiot for not stocking up on houses while I was younger. Obviously it wasn't tenants that robbed me of my sanity. I wonder what it was'?

[Bjauck]

Translation: 'I'm an absolute idiot for not stocking up on houses while I was younger. Obviously it wasn't tenants that robbed me of my sanity. I wonder what it was'?
Wouldn't that lead us to a NZ version of Georgian Ireland - A poor country with a landowning aristocracy, with many overseas-based absentee landlords, and with company shareholdings and industry being substantially foreign owned?

[fungus pudding]

Wouldn't that lead us to a NZ version of Georgian Ireland - A poor country with a landowning aristocracy, with many overseas-based absentee landlords, and with company shareholdings and industry being substantially foreign owned?

No. We are outnumbered by SBQs.

[FTG]

Interesting discussion. But a very difficult one due to the fact it is hard to know what numbers are correct. I read an article by Brian Gaynor on Business Desk on 17 July, which discusses this issue amongst others.
It indicates Kiwis hold a far higher proportion of their wealth in property than Americans do.


As an aside you raise an interesting side point Iceman. "The appeal of a particular argument can be strengthened simply by highlighting selected facts and omitting others".

You (and Brian G for that matter) have no argument from me that kiwis have a higher % of their wealth invested in housing than Americans.

I probably need to be clearer. With the small selection of facts I offered in Post 2068 you will note they were ALL USA centric. I was presenting these stats to highlight that, like Kiwis, the Americans still have more of their household wealth invested in residential property than Equities (more than double in their case). This was in response to SBQ's glib assertion that the American's have most of their wealth invested in equities, rather than housing. That is patently incorrect. He then partly uses this falsehood as grounds for why NZ should have a CGT, Land Tax, Wealth Tax or similar. As SBQ correctly states, Aussie has CGT AND Stamp Duty. There is a large inconvenient truth that he omits to refer however. Despite these taxes, each year Sydney & Melbourne battle it out with Auckland to have the most expensive housing in the world. ScReWing the 1st home buyer there just as much as in NZ.

Pulling back a little and looking at the bigger picture, over the last decade the % of investment in equities has been slowly climbing, and has accelerated post-Covid (part of the "everything bubble" phenomenon perhaps). However, the facts clearly show that in most OECD countries (certainly ones where home ownership rates are at 60%) the majority of citizen wealth is still in their respective country's housing assets.

This has been the case since Adam was a Caveman!

[SBQ]

It appears FTG's figures are a bit different to yours.

The other countries (Aus/Can/US) in question all have some form of taxation on the demand side. FTG claims those taxes don't deter making houses affordable - what I would like to believe, those taxes do have an effect on the 'gaming ability' of turning houses into an asset class for financial gain. I mean how many places around the world are at 13 times average annual incomes? More importantly, what % of the population is affected by this high figure. Yes world class cities require high multiple figures but that does not speak for the rest of the country. In Canada, Vancouver and Toronto have hot housing markets but they do not account for the majority of the population. If you look at all over NZ the major regions, they ALL had significant rise in housing prices. Who actually pays for all this?

My close friend living in Vancouver has purchased real estate starting over 20 years ago. What he tells me is that the quick rise in house prices has brought too much attention by the gov't at all levels. As I mentioned before Trudeau sent a special task force to Vancouver to understand why and unlike past NZ gov'ts, they actually do make changes (all around taxation). He tells me hindsight, if chose to invest the same amount of $ into the stock market in a conservative ETF, he would be miles ahead on the basis that houses have become a hassle to own and the gains are not there because of taxation. Not surprisingly, my uncle that lives in the Gold Coast, Australia says the same thing. But you ask any person in NZ ; nope because there are no demand controls in buying houses.

I'll reiterate the following links as I find Bernard Hickey is far better at explaining NZ's housing crisis than I am: - there will be many that will disagree or simply don't care. If you're on 'that side of the fence owning all the houses', why would you?

https://thespinoff.co.nz/business/25...tion-was-lost/ (https://thespinoff.co.nz/business/25-06-2021/bernard-hickey-how-hope-for-a-generation-was-lost/)

https://thespinoff.co.nz/business/09...f-the-century/ (https://thespinoff.co.nz/business/09-07-2021/bernard-hickey-the-1-trillion-housing-wealth-crime-of-the-century/)

[peetter]

It appears FTG's figures are a bit different to yours.

The other countries (Aus/Can/US) in question all have some form of taxation on the demand side. FTG claims those taxes don't deter making houses affordable - what I would like to believe, those taxes do have an effect on the 'gaming ability' of turning houses into an asset class for financial gain. I mean how many places around the world are at 13 times average annual incomes? More importantly, what % of the population is affected by this high figure. Yes world class cities require high multiple figures but that does not speak for the rest of the country. In Canada, Vancouver and Toronto have hot housing markets but they do not account for the majority of the population. If you look at all over NZ the major regions, they ALL had significant rise in housing prices. Who actually pays for all this?

My close friend living in Vancouver has purchased real estate starting over 20 years ago. What he tells me is that the quick rise in house prices has brought too much attention by the gov't at all levels. As I mentioned before Trudeau sent a special task force to Vancouver to understand why and unlike past NZ gov'ts, they actually do make changes (all around taxation). He tells me hindsight, if chose to invest the same amount of $ into the stock market in a conservative ETF, he would be miles ahead on the basis that houses have become a hassle to own and the gains are not there because of taxation. Not surprisingly, my uncle that lives in the Gold Coast, Australia says the same thing. But you ask any person in NZ ; nope because there are no demand controls in buying houses.

I'll reiterate the following links as I find Bernard Hickey is far better at explaining NZ's housing crisis than I am: - there will be many that will disagree or simply don't care. If you're on 'that side of the fence owning all the houses', why would you?

https://thespinoff.co.nz/business/25-06-2021/bernard-hickey-how-hope-for-a-generation-was-lost/

https://thespinoff.co.nz/business/09-07-2021/bernard-hickey-the-1-trillion-housing-wealth-crime-of-the-century/

You again show absolute ignorance. In all countries (AUS, US, CAN) you mentioned housing market is growing in unprecedented rate. I just discovered that Canada, which you mention in about 90% of your posts, seems to be even in worse situation than NZ despite having CGT. Problem seems to be generous subsidies and grants to buy a house... go figure, subsidies ruining free market.

BTW. kudos on yet another Bernard Hickey reference

[FTG]

FTG claims those taxes don't deter making houses affordable

SBQ, why do persist to misquote other contributors? Do you do it deliberately, or is it because you just wish to proudly demonstrate your unwillingness and/or inability to look at things objectively?

best you read my post again slowwwwly.

[FTG]

FTG claims those taxes don't deter making houses affordable

SBQ, why do persist to misquote other contributors? Do you do it deliberately, or is it because you just wish to proudly demonstrate your unwillingness and/or inability to look at things objectively?

best you read my post again slowwwwly.

[SBQ]

SBQ, why do persist to misquote other contributors? Do you do it deliberately, or is it because you just wish to proudly demonstrate your unwillingness and/or inability to look at things objectively?

best you read my post again slowwwwly.

It seems FTG again, is blinded at NZ's housing situation. 13 times incomes is a problem. Record # of families waiting for social housing. At least all my posts point to what other countries have done to address housing problems. The UN even knows NZ's housing problem is a unique situation that their rapporteur had to make bold comments again and again. The likes of FTG will never believe it.

So I ask a simple question - what is the NZ gov't going to do? If the whole country has voters like FTG, then nothing is going to happen and NZ will continue on to a path of oligarchy and feudalism.

[ynot]

"So I ask a simple question - what is the NZ gov't going to do?"

Buy more $8mil motels.

[Bjauck]

"So I ask a simple question - what is the NZ gov't going to do?"

Buy more $8mil motels.
Sadly they will apply Elastoplast to fix a problem that requires major surgery.

As long as kiwis have many multiples more invested in housing than in pensions, managed funds or equities then they will not likely vote for a major overhaul. If those who benefit from the status quo, or think they may in the future, or think they may inherit from someone who benefits, then they may be less likely to vote for major change.

[777]

"So I ask a simple question - what is the NZ gov't going to do?"

Buy more $8mil motels.

No. Buy more $4mil hotels but pay $8mil for them.

[FTG]

The US median house prices figures to June 30 were reported overnight. With the continued & massive pumping of the FED's Balance Sheet I'm disappointed to report that there are NO surprises. Just like NZ, the US residential housing market has been running away.

The trailing 12 month increase was 23.4% (NZ 28%). Across the border in Canada....26%!

The sobering fact is house prices in many big cities & countries across the globe are showing trailing 12 month increases of >20%. As much as some here would try & lead you to believe, "first home buyers being ScReWed" isn't a problem exclusive to NZ. It's an issue across the globe.

As in life generally, effective long-term problem solving requires one to first understand the real & fundamental CAUSE of the problem. As you correctly point out Bjauck, applying Band-Aids to something that requires surgery is short-sighted & unintelligent. That is only going to suppress the issue for a period, until inevitably the cancer will actually come back even harder. It's tinkering at best.

Imposing CGT, Wealth Taxes, Inheritance taxes, and on the other side of the ledger, strategies like FHB grants & subsidies are all just political Band-Aids & suppressant Drugs to the cancer of an artificially & unsustainably booming housing market. Some would go even further & say it's akin to "an Ambulance at the bottom of the hill". Yes, additional taxes and/or subsidies MAY have impact for a period, but the real CAUSE is not actually being properly addressed. A demonstration of this point is when looking at top 15 countries on the chart for Median House Price to Household Income Ratio. NZ is currently 14th highest on that chart (SBQ, FYI: Canada is 7th). Every....single....country, but 1, for the 13 countries on the list above NZ has a CGT. So the claim that having a CGT or similar regime implemented is a long lasting solution to the housing pricing problem is patently not the case. It could also be easily argued that doing so creates poor investment investment behaviours & further market distortions, hence creating unintended negative outcomes, e.g. moral, social & economic problems.

So, coming back to diagnosing the condition, the question is, "what is the real & fundamental CAUSE?" Some of the more learned contributors on this thread have reminded us of a basic principle re how pricing of ANY market is ultimately determined....

"The Law of Supply & Demand".

Posters here have then gone on to present & debate over the impacts of a multitude of supply & demand inputs for NZ. Examples noted include, high net positive migration numbers, foreign buyers, ghost houses, super slow RMA process, high building costs, skilled labour shortages, FHB grants, Taxpayer partly funded KS deposits, SHA's, no CGT etc etc etc. IMO each of those inputs do contribute to varying degrees to the crazy house pricing problem NZ has. However.....

The REAL underlying cause is a far bigger, uglier & hence harder one for us all to confront & tackle head-on. Plus, it too obediently abides to the Law of Supply & Demand.

So, have you some thoughts to what that Elephant in the room is that I'm referring to?

[ynot]

No. Buy more $4mil hotels but pay $8mil for them.

Yes ! unbelievable incompetence by this government.
Don't start me on the police minister. Totally out of her depth.

[FTG]

The REAL underlying cause is a far bigger, uglier & hence harder one for us all to confront & tackle head-on. Plus, it too obediently abides to the Law of Supply & Demand.

So, have you some thoughts to what that Elephant in the room is that I'm referring to?

Not a single well-considered & reasoned thought?

My my, seems like some folk (SBQ, looking at you especially!) have run for the hills, run out of huff & puff, lost your tongue & slunk away.

Which then naturally asks the question; what was the real purpose/agenda of certain blame pointing perpetrators ranting & raving all about? ;-)

[fungus pudding]

Not a single well-considered & reasoned thought?

My my, seems like some folk (SBQ, looking at you especially!) have run for the hills, run out of huff & puff, lost your tongue & slunk away.

Which then naturally asks the question; what was the real purpose/agenda of certain blame pointing perpetrators ranting & raving all about? ;-)

Town planning, or the RMA, is the biggie, but that's often mentioned.

[SBQ]

Town planning, or the RMA, is the biggie, but that's often mentioned.

Yep changes to the RMA has often been mentioned. Even from an outside perspective, they imply changes to the planning & use of land which would add more supply to NZ's housing problem. But instead, our gov't is choosing the "lack of infrastructure" excuse of why there's no real supply. Have a look abroad, see how major cities are built and planned. Look how new residential sub-divisions are built and see how existing city corner blocks are knocked down (increase densification), to be replaced with multistory complexes everywhere. Then compare that to how NZ builds things. The conclusion is clear, NZ's RMA has stifled urban living and the NIMBY stance. Most of the new houses I see being built are nothing more than a 'dog box', VERY expensive single story boxes that offer little practicality. We are not improving NZ's standard of living by offering LESS of a house.

[artemis]

No. Buy more $4mil hotels but pay $8mil for them.

There was an an article in NBR earlier this week to the effect that Kainga Ora made an offer on a property $8 million above its eventual sale price. NBR got the information from an OIA request.

Some additional info on the wireless - KO withdrew offer, eventual sale price around $30 million.

Not a trivial overpayment offer, and have to wonder what else is KO keeping under the radar.

https://www.scoop.co.nz/stories/PO2107/S00194/flush-housing-agency-needs-to-be-reined-in.htm

[Bjauck]

From 2020: NZ is 7th (out of 39) most expensive per Square metre of housing per household income. (UK is 8th, Australia is 16th, Canada is 21st, USA is 38th) Other countries in the top are more densely populated than NZ.

https://www.oneroof.co.nz/news/kiwi-house-prices-how-do-they-compare-to-the-rest-of-the-world-38726

[FTG]

From 2020: NZ is 7th (out of 39) most expensive per Square metre of housing per household income. (UK is 8th, Australia is 16th, Canada is 21st, USA is 38th) Other countries in the top are more densely populated than NZ.

https://www.oneroof.co.nz/news/kiwi-house-prices-how-do-they-compare-to-the-rest-of-the-world-38726

They have deployed an "interesting" way of measuring housing affordability. I would suggest that it is yet another example of how statistics can be influenced somewhat dependent on what info one uses as the measuring tool and how accurate & detailed that tool actually is. Additionally, in this case the party quoted in the Oneroof article as doing the measuring is "comparethemarket.com.au. Need I say more.

A universal principle of property investment that we should keep front of mind, is that the component that is actually appreciating in value is the LAND. The building on the land certainly won't appreciate as much, and in fact in most cases (both for resi & commercial) will actually depreciate over time. As is often said re land "they aren't making any more of this stuff".

So, when digging into the numbers a little further, we need to keenly keep in mind that NZ still has relatively large section sizes compared to the rest of the developed world. Additionally, market penetration of Apartments (which hardly have any land!) is certainly lagging well behind most other developed big cities/countries. So yes, the Per SqM price of the HOUSING for NZ, which has relatively more land under it, will understandably be artifically skewed to the higher end of the continuum.

Just to be clear again though. I'm not disputing the reality that by most forms of measurement NZ is in the top quartile for housing inaffordability.

[FTG]

Town planning, or the RMA, is the biggie, but that's often mentioned.

Yes, it's certainly not a small one in its own right. Additionally, reasonably recent positive changes to the rules around what does or doesn't require consent for home renovations has also seen a further boom in home reno's (as has Covid impacts) and therefore house values.

However, RMA enforced costs are a tiny input compared to the BIG Elephant in the room that I'm referring to. When it comes to recognising the biggest single real driver of house price affordability in NZ and across the globe what do you think that is?

[Bjauck]

They have deployed an "interesting" way of measuring housing affordability. I would suggest that it is yet another example of how statistics can be influenced somewhat dependent on what info one uses as the measuring tool and how accurate & detailed that tool actually is. Additionally, in this case the party quoted in the Oneroof article as doing the measuring is "comparethemarket.com.au. Need I say more.

A universal principle of property investment that we should keep front of mind, is that the component that is actually appreciating in value is the LAND. The building on the land certainly won't appreciate as much, and in fact in most cases (both for resi & commercial) will actually depreciate over time. As is often said re land "they aren't making any more of this stuff".

So, when digging into the numbers a little further, we need to keenly keep in mind that NZ still has relatively large section sizes compared to the rest of the developed world. Additionally, market penetration of Apartments (which hardly have any land!) is certainly lagging well behind most other developed big cities/countries. So yes, the Per SqM price of the HOUSING for NZ, which has relatively more land under it, will understandably be artifically skewed to the higher end of the continuum.

Just to be clear again though. I'm not disputing the reality that by most forms of measurement NZ is in the top quartile for housing inaffordability.

The appeal of residential housing as an investment I guess lies primarily with the land, its supply or lack thereof, the ability to leverage an investment in it and tax rules surrounding the return from it. The return from renting out a good building is taxed as income. The capital gains return from appreciating land values, which is as you say is what is appreciating in a rising market, is mostly untaxed.

However if you look at housing as providing shelter and appropriate comfortable accommodation for the population, then the cost per sq metre of actual residential building and the quality thereof becomes the most important aspect. And, that is the part of investor residential property on which the tax burden is placed.

[Entrep]

Interesting what's going on in the US right now http://lite.cnn.com/en/article/h_f613fef87adc1033f43b8d4145c11fcb

[ynot]

Interesting what's going on in the US right now http://lite.cnn.com/en/article/h_f613fef87adc1033f43b8d4145c11fcb
What drives house prices is supply and demand. Unless government gets seriously involved prices will head where market dictates.

[Crypto Crude]

Entrep...
Blackrock are buying up all the houses....
The covid ban on eviction for rent arrears relief has ended and wasn't extended....10s of millions of Americans will be without homes in the coming weeks....

[Bjauck]

What drives house prices is supply and demand. Unless government gets seriously involved prices will head where market dictates.
The government and its agencies are already seriously involved. They create the fiscal and monetary environment, which affect both supply and demand! The market only operates within the bounds set by the government. What is happening now is a direct consequence of decades of government policy. Home owners are the biggest segment of government beneficiaries.

[TeslaGod]

What's with all the complaining, it's a trader forum, you know, capitalism, the free market and all that, I'm happy with all the money I made the last 18months.

Does it make you all feel better to moan at how much money you made?(or didn't lol)

[fungus pudding]

What's with all the complaining, it's a trader forum, you know, capitalism, the free market and all that, I'm happy with all the money I made the last 18months.

Does it make you all feel better to moan at how much money you made?(or didn't lol)

The green eyed monster lives within some of the posters. We need a group exorcist.

[TeslaGod]

Is this a forum to discuss how to make money or discuss our feelings and how our feelings hurt because gen y can't buy a home.

[Baa_Baa]

Is this a forum to discuss how to make money or discuss our feelings and how our feelings hurt because gen y can't buy a home.

This and a couple of other threads have been exceptionally informative about how to make money, in property mostly and equities a bit. You just have to scroll the in-between stuff, it happens on all forums.

[SBQ]

Is this a forum to discuss how to make money or discuss our feelings and how our feelings hurt because gen y can't buy a home.

This thread is discussion about NZ home ownership (quite obvious). My original though upon joining this forum was more discussions around investments in shares. But like everywhere in NZ, discussion of houses seems to be highest priority in terms of investing. No different to here.

[Bjauck]

The green eyed monster lives within some of the posters. We need a group exorcist.
....and the beneficiaries of government policy do not like to contemplate change. We do indeed need a happy medium :D

[Bjauck]

What's with all the complaining, it's a trader forum, you know, capitalism, the free market and all that, I'm happy with all the money I made the last 18months.

Does it make you all feel better to moan at how much money you made?(or didn't lol) ...and increasing numbers of 1st home buyers are taking the risky capitalist approach to try to save for a 1st home! Sharesies has introduced many to equities.

The forum is great for share investors. Avoid this "homebuyers are screwed" thread if you do not like moaning! The thread title sets the tone? However home ownership crops up in other threads, such is its importance.

[TeslaGod]

...and increasing numbers of 1st home buyers are taking the risky capitalist approach to try to save for a 1st home! Sharesies has introduced many to equities.

The forum is great for share investors. Avoid this "homebuyers are screwed" thread if you do not like moaning! The thread title sets the tone? However home ownership crops up in other threads, such is its importance.

First home ownership is not falling.
They have been one of the biggest benefactors of low interest rates.

[fungus pudding]

First home ownership is not falling.

Of course it's not. Homeowners don't buy their second home first.

[Bjauck]

First home ownership is not falling.
They have been one of the biggest benefactors of low interest rates. True. My neighbours are first home owners - bought just after they got married in the 1980's sometime. Perhaps they should have played the ladder game but they liked their home. Back then, when they bought the home they could afford the deposit for a good size family house big enough to raise their kids, when they had them!

[TeslaGod]

True. My neighbours are first home owners - bought just after they got married in the 1980's sometime. Perhaps they should have played the ladder game but they liked their home, and when they bought the home they could afford the deposit for good size family house big enough to raise their kids, when they had them!

You shouldn't judge thy neighbor, they could be secret multi millionaires.

Like me .

[Bjauck]

You shouldn't judge thy neighbor, they could be secret multi millionaires.

Like me .
Not so secret - it is not a particularly expensive area but their house would be worth a couple of million these days probably. It is in "Auckland of course!" But sure, I don't know if they have a mortgage on it now, but they did have a "mortgage free" party shortly after I got to know them quite a few years back now.

However, who knows what happens behind the closed doors and the net curtains....

[Crypto Crude]

You shouldn't judge thy neighbor, they could be secret multi millionaires.

Like me .
Teslagod,
Seeing that your hell bent on letting everyone know that your rich ... you might aswell tell us how rich you are ?

[TeslaGod]

Teslagod,
Seeing that your hell bent on letting everyone know that your rich ... you might aswell tell us how rich you are ?
I'm trying not to sound arrogant to this reply

l retired relatively young and never have to worry about money every again.

Neither do my offspring.

Sorry.

[Crypto Crude]

Go on big man...
What you got

[TeslaGod]

Go on big man...
What you got

I'll let your imagination run wild.

[Crypto Crude]

What a weasel...!
Running yah mouth in the threads about how rich you are, how you own all the houses and cars and assets ... and then won't even tell us what you got...

[TeslaGod]

What a weasel...!
Running yah mouth in the threads about how rich you are, how you own all the houses and cars and assets ... and then won't even tell us what you got...

Fair enough, I'll tell you mine if you tell me yours first.

[TeslaGod]

What a weasel...!
Running yah mouth in the threads about how rich you are, how you own all the houses and cars and assets ... and then won't even tell us what you got...

A car is not an asset.

Unless you need it to get to your principal place of employment.

I'm retired.

[Crypto Crude]

I'm all in on crypto and about $550k ...
Shoot?

[TeslaGod]

I'm all in on crypto and about $550k ...
Shoot?

I'm really happy for you, you have achieved so much.

Unfortunately your not in my ball park.

Not even in the carpark

But congrats anyway.

[JBmurc]

From 2020: NZ is 7th (out of 39) most expensive per Square metre of housing per household income. (UK is 8th, Australia is 16th, Canada is 21st, USA is 38th) Other countries in the top are more densely populated than NZ.

https://www.oneroof.co.nz/news/kiwi-house-prices-how-do-they-compare-to-the-rest-of-the-world-38726

thats the crazy thing we have huge amounts of Buildable land ..but for some reason we can't seem to supply enough to drive the price to lower levels >> would be an easy fix for many locations in NZ ...

[SBQ]

thats the crazy thing we have huge amounts of Buildable land ..but for some reason we can't seem to supply enough to drive the price to lower levels >> would be an easy fix for many locations in NZ ...

Like the Treaty of Waitangi, no NZ gov't wants to remove the RMA. Densification greatly improves the supply of houses in a certain area but the RMA restricts (or basically makes it impossible) efficient building in urban areas.

Earlier in the year Megan Woods would be funding $ to infrastructures to new areas that unlock land to sub-divide. Like Kiwi Build, this is not going to be a quick fix.

[Bjauck]

A car is not an asset..... It may be depreciating, but it is an asset. It provides a very beneficial service over the years, especially in a place like Auckland with patchy public transport. A couple of new Beemers and Mercs in the garage would have a useful second hand value. OTH it may seem like change found down the back of the couch for a mega rich person.

[JBmurc]

It may be depreciating, but it is an asset. It provides a very beneficial service over the years, especially in a place like Auckland with patchy public transport. A couple of new Beemers and Mercs in the garage would have a useful second hand value. OTH it may seem like change found down the back of the couch for a mega rich person.

I've seen many cars I've owned in the past increase to silly levels --Old V8 classics etc

[Bjauck]

I've seen many cars I've owned in the past increase to silly levels --Old V8 classics etc Mr Bean's collection must be worth a bob or two as well. He sold a Ferrari for 8 million pounds!
https://www.gq-magazine.co.uk/lifestyle/article/rowan-atkinson-car-collection

[Crypto Crude]

Teslagod,
your word is no good.... " I will tell you if you tell me"...lol...
So not only are you condescending about your wealth towards people don't have it... that your also a liar...
Your word is no good !!... what a squealer...
But I don't care...
I will show you how it's done... im going for 100x from here until 2026...
And I will take out enough for a house this year !...

[TeslaGod]

Teslagod,
your word is no good.... " I will tell you if you tell me"...lol...
So not only are you condescending about your wealth towards people don't have it... that your also a liar...
Your word is no good !!... what a squealer...
But I don't care...
I will show you how it's done... im going for 100x from here until 2026...
And I will take out enough for a house this year !...

That's the spirit !

Go and get that money, now that's what I like to hear.

(I wouldn't necessarily go buying at the peak of the housing market)

but that's not the point. Good for you.

You are right though, I do have a knack for turning the tables into my favour.

I now know how much your worth and you still don't know my net worth.

[Crypto Crude]

That's the spirit !

Go and get that money, now that's what I like to hear.

(I wouldn't necessarily go buying at the peak of the housing market)

but that's not the point. Good for you.

You are right though, I do have a knack for turning the tables into my favour.

I now know how much your worth and you still don't know my net worth.

You thought you could come here and animal on about how much money you have and thought no one would stand up to you....
.....
...
.
You were wrong....

[Crypto Crude]

What I have has never been a secret I've openly said what I have and even broken down the investments, even just a week or two back...
This here is the blueprint 60k to 100 million dollars in 5 years ...
Watch and learn

[Bjauck]

...
(I wouldn't necessarily go buying at the peak of the housing market)... It has been at the peak for some years now.:ohmy: Some buyers are actually looking for a home, not another investment. Maybe they don't want their family to keep on waiting for the market to turn. Waiting in a rental house, unable to make it their home, while thy wonder when the landlord will realise his investment.

[TeslaGod]

You thought you could come here and animal on about how much money you have and thought no one would stand up to you....
.....
...
.
You were wrong....

No

I thought I could join this forum and find like minded traders who are into wealth creation like myself.

[TeslaGod]

What I have has never been a secret I've openly said what I have and even broken down the investments, even just a week or two back...
This here is the blueprint 60k to 100 million dollars in 5 years ...
Watch and learn

Awesome that's just so positive to read, you believe your in goals and I have no doubt they will materialize.

Awesome, so happy for you.

[TeslaGod]

It has been at the peak for some years now.:ohmy: Some buyers are actually looking for a home, not another investment. Maybe they don't want their family to keep on waiting for the market to turn. Waiting in a rental house, unable to make it their home, while thy wonder when the landlord will realise his investment.

The market won't turn.

There will be less buyers in about 12 months time.

I have amassed a large amount of property by not buying in these markets.

As a trader in equities, commodities, currencies I have learned that.

I'm a little confused by your comment.

I am presuming you know how the markets work and not just read forum comments and the comments section on media publications.

I apologize if I sound condescending, I really am trying not to , perhaps it's how some here are translating my posts.

[Bjauck]

No

I thought I could join this forum and find like minded traders who are into wealth creation like myself. Share traders. From the name, specifically it is about when to buy and sell shares (to get a maximised return).There are lots of other off-share-market threads though on Sharetrader. This is the "NZ 1st homebuyers are screwed..." thread.

[Bjauck]

The market won't turn.

There will be less buyers in about 12 months time.

I have amassed a large amount of property by not buying in these markets.

As a trader in equities, commodities, currencies I have learned that.

I'm a little confused by your comment.

I am presuming you know how the markets work and not just read forum comments and the comments section on media publications.

I apologize if I sound condescending, I really am trying not to , perhaps it's how some here are translating my posts.

Various analysts have been calling the peak of the market with respect to house prices for some years. Then other factors intercede. The latest being the biggie of the Coronavirus response. As with mountaineering, you think the peak has been reached and then when on top, you realise it was not actually the peak!

The life stage some people are at may mean they cannot wait until the latest peak subsides. When trying to establish a home, housing is not just another investment commodity.

I am still learning about markets so get information from a wide range of sources.

True, those who were able to build up a portfolio of investments over the past years would have seen good capital gains. A large part of those gains may have been due to interest rate falls. It helped to have the the ability to access capital and loans at the time. It all adds to some intergenerational stresses.

[TeslaGod]

Various analysts have been calling the peak of the market with respect to house prices for some years. Then other factors intercede. The latest being the biggie of the Coronavirus response. As with mountaineering, you think the peak has been reached and then when on top, you realise it was not actually the peak!

The life stage some people are at may mean they cannot wait until the latest peak subsides. When trying to establish a home, housing is not just another investment commodity.

I am still learning about markets so get information from a wide range of sources.

True, those who were able to build up a portfolio of investments over the past years would have seen good capital gains. A large part of those gains may have been due to interest rate falls. It helped to have the the ability to access capital and loans at the time. It all adds to some intergenerational stresses.

Wise words

Not much I disagree with in this post.

Not much I can do about people who can't get in the housing market either, but maybe provide shelter and charge market rent in return.

[TeslaGod]

Share traders. From the name, specifically it is about when to buy and sell shares (to get a maximised return).There are lots of other off-share-market threads though on Sharetrader. This is the "NZ 1st homebuyers are screwed..." thread.
I see I get a little lost at times on this forum.

I guess if first home buyers believe they are screwed then that's why they fail.

[Bjauck]

NZ is a signatory to the UN's Universal Declaration of Human Rights. The following is the section of the declaration from Stuff ( https://www.stuff.co.nz/business/opinion-analysis/300379412/is-the-housing-crisis-a-human-rights-issue ) relating to housing (with my comments in blue):

Article 25 of the United Nations Declaration of Human Rights identifies the right to adequate housing as a fundamental and inalienable human right. The UN describes adequate housing as meeting the following criteria:


Tenure security that guarantees legal protection against forced evictions, harassment, and other threats. Currently tenants can be evicted against their wishes if the Landlord wants to use the premises for their family or if they wish to sell the premises with vacant possession. The Landlord can evict even if the evicted tenant does not have adequate housing to move into. Public Works can also result in forced evictions, although some compensation is provided.
Availability of materials and infrastructure such as safe drinking water, adequate sanitation, energy for cooking, heating and lighting, food storage and refuse disposal. To access refuse disposal for many items (in Auckland e.g.) requires is expensive and/or requires transport and/or ability to safely store for annual collections (even then they may refuse to collect certain items.) There have been failures to provide safe drinking water and energy.
Affordability such that paying for housing does not compromise other human rights. This is not the case in NZ.
Habitability that includes protection against the cold, damp, heat, rain, wind, other threats to health and structural hazards. NZ is trying to introduce healthy homes. Protection against climate change will become even more of an issue.
Location that is not polluted or dangerous and that does not cut off access to employment opportunities, healthcare services, schools or other critical social institutions.
Accessibility that can meet the specific needs of disadvantaged and marginalised groups and does not compromise the expression of cultural identity. I doubt that all homes have ramps, mobility or other aids. Public transport in many areas is inadequate.
Cultural adequacy, for example taking into account traditional housing patterns, family configuration and cultural practices. Affordability of homes that can cater for large and extended families would be questionable.


So I would conclude that NZ has failed to abide by this Declaration, of which it is a signatory.

[TeslaGod]

Seems like the states failed the U.N declaration not the private Landlord's who are trying to do the state's job.

Unfortunately with more and more regulation.

[FTG]

Article 25 is yet another demonstration of the insidious, yet impotent, nature of the UN & other quasi State centralised organisations.

[artemis]

I would say 'housing as a human right' is available in New Zealand. Might have to pay the market rate though.

For example, on tenancy terminations if property to be sold or occupied by family, tenants can negotiate a fixed term tenancy or, as the Finance Minister says 'look elsewhere'.

[Bjauck]

I would say 'housing as a human right' is available in New Zealand. Might have to pay the market rate though. Which is where the affordability issues crop up.

For example, on tenancy terminations if property to be sold or occupied by family, tenants can negotiate a fixed term tenancy or, as the Finance Minister says 'look elsewhere' I guess overcrowding in some areas, homelessness and social housing wait lists point to the “success” of that.

So NZ fails to provide affordable adequate housing.

Healthy homes
https://www.stuff.co.nz/national/125692723/bribery-filth-and-scumlords-the-life-of-a-healthy-home-assessor (https://www.stuff.co.nz/national/125692723/bribery-filth-and-scumlords-the-life-of-a-healthy-home-assessor)

[TeslaGod]

So NZ fails to provide affordable adequate housing.

Healthy homes
https://www.stuff.co.nz/national/125692723/bribery-filth-and-scumlords-the-life-of-a-healthy-home-assessor (https://www.stuff.co.nz/national/125692723/bribery-filth-and-scumlords-the-life-of-a-healthy-home-assessor)
Most landlords provide warm livable housing.

Most tenants are good people paying rent on time and looking after there home's.

I have noticed (being new to this forum)
A number of comments seem to add a link to an article.

Although interesting, not necessarily telling the full story, however you have just increased free advertising revenue for that particular media outlet.

[Bjauck]

Most landlords provide warm livable housing.

Most tenants are good people paying rent on time and looking after there home's.

I have noticed (being new to this forum)
A number of comments seem to add a link to an article.

Although interesting, not necessarily telling the full story, however you have just increased free advertising revenue for that particular media outlet.
I don't think the Human Rights declaration was just limited to "most" people.

That is a good point relating to linked articles. I doubt many, if any, articles individually provide a complete picture. You always have to check the source and credentials and do further reading if you are motivated. However there is a time constraint and one link is better than none, especially if the linked article was a factor behind your post. If the reader is interested, they can do further research for corroboration.

[artemis]

So NZ fails to provide affordable adequate housing......

Taxpayers stand ready to step up.

[Bjauck]

Taxpayers stand ready to step up. Fair comment. Everything comes with a cost/benefit.

Taxpayers have already borne a cost with housing in the past. The accommodation supplement is provided by taxpayers. Negative gearing and interest deductibility were available. And a considerable amount of investment return in the form of capital gains has not be taxable. There is scope to widen the tax base and, who knows, for the housing and accommodation markets to become more affordable.

[TeslaGod]

Rank Country Ownership Percentage
1 Kosovo. 97.8
2 Romania. 95.8
3 Hungary. 91.7
4 Montenegro 91
5 Slovakia 90.9
6 Lithuania 90.3
6. Singapore 90.3
7 Croatia. 89.7
8 Russia. 89
9 Macedonia 85.9
10 Bulgaria 84.3

Although I'm sure very lovely countries not a sacrifice I would make for living and raising a family in the likes of peaceful , countries like NZ, OZ, Canada,UK etc.

Capitalism works.

[TeslaGod]

Since Kosovo was recently born from the ashes of war let's take a walk through a lovely village in Romania.
A first home buyers paradise.

https://youtu.be/uQxhJFPvDGg

Trust me capitalism works.


Rank Country Ownership Percentage
1 Kosovo. 97.8
2 Romania. 95.8
3 Hungary. 91.7
4 Montenegro 91
5 Slovakia 90.9
6 Lithuania 90.3
6. Singapore 90.3
7 Croatia. 89.7
8 Russia. 89
9 Macedonia 85.9
10 Bulgaria 84.3

Although I'm sure very lovely countries not a sacrifice I would make for living and raising a family in the likes of peaceful , countries like NZ, OZ, Canada,UK etc.

Capitalism works.

[Bjauck]

Since Kosovo was recently born from the ashes of war let's take a walk through a lovely village in Romania.
A first home buyers paradise.

https://youtu.be/uQxhJFPvDGg

Trust me capitalism works. The video clip is entitled “poorest village”. You can find some pretty grim poverty in many countries - Take a google trip around England and Australia for a start.

Romania ceased to be a communist country some time ago and is probably more capitalist than NZ now. NZ has a socialised capitalist mixed environment.
https://en.wikipedia.org/wiki/Romania

[TeslaGod]

The video clip is entitled “poorest village”. You can find some pretty grim poverty in many countries - Take a google trip around England and Australia for a start.

Romania ceased to be a communist country some time ago and is probably more capitalist than NZ now. NZ has a socialised capitalist mixed environment.
https://en.wikipedia.org/wiki/Romania

I like how you conveniently replaced the word socialist with socialised.

Less scandalous.

[Bjauck]

I like how you conveniently replaced the word socialist with socialised.

Less scandalous.

From your posts and replies, I am confused as to your position. As far as I can tell it seems to be this:.

Romania is capitalist and it has a high percentage of owner occupation but it is not a desirable country to live in.
NZ is not capitalist. It has a lower percentage of owner occupation and housing is very expensive. However it is a desirable country in which to live.

[TeslaGod]

From your posts and replies, I am confused as to your position. As far as I can tell it seems to be this:.

Romania is capitalist and it has a high percentage of owner occupation but it is not a desirable country to live in.
NZ is not capitalist. It has a lower percentage of owner occupation and housing is very expensive. However it is a desirable country in which to live.

The New Zealand housing market is capitalism at its finest.

Capitalism works.

Unfortunately there looks likely to be more regulations introduced on the housing market soon.

Hence your top 10 home ownership countries in the world.

[TeslaGod]

Option 1:
Regulate private landlords out of the market increasing home ownership above 80% crashing the economy making NZ a less desirable place to live.

Option 2: Increase OCR, LVRs, DTI,pricing landlords and first home owners out of the market creating a genuine class society.

Option 3:Let the free market reign having no restrictions ,landlords cannibalize themselves pushing down rents giving choices and options for renters and first time home buyers.

Option 4: A steady increase in regulation, a capital gains tax on unrealized gains, building compliance to meet green house emissions. An eventual buy out by government leaving a fully state controlled housing market.

[TeslaGod]

Option 1:
Regulate private landlords out of the market increasing home ownership above 80% crashing the economy making NZ a less desirable place to live.

Option 2: Increase OCR, LVRs, DTI,pricing landlords and first home owners out of the market creating a genuine class society.

Option 3:Let the free market reign having no restrictions ,landlords cannibalize themselves pushing down rents giving choices and options for renters and first time home buyers.

Option 4: A steady increase in regulation, a capital gains tax on unrealized gains, building compliance to meet green house emissions. An eventual buy out by government leaving a fully state controlled housing market.

I personally think we are at the beginning stages of option 2 leading eventually to option 4.

[Bjauck]

The New Zealand housing market is capitalism at its finest.... That is ironic. What we have in NZ is the State providing the regulatory, fiscal and monetary conditions over the years that have commoditised housing as the prime investment for NZers. Our housing markets are the result of State manipulation of markets in both a direct and indirect manner.

[SBQ]

That is ironic. What we have in NZ is the State providing the regulatory, fiscal and monetary conditions over the years that have commoditised housing as the prime investment for NZers. Our housing markets are the result of State manipulation of markets in both a direct and indirect manner.

I completely agree! The rational person is always going to pick houses over any other asset class for investment:

1) Tax free capital gain (when held 10+ years)
2) Limited housing supply due to restrictions such as the RMA, treaty issues, lack of gov't funded developments and infrastructure.
3) A banking system that allows lenders to prioritise lending to those who have more assets (hence less risk of default).

The fools are:

1) Those in Kiwi Saver where their funds attract RWT on paper gains and dividends EVERY year which greatly reduced the compound returns of the investment (no bigger critic against this than Vanguard founder Jack Bogel).
2) Fixed term deposits such as bonds and bank interest rates attracts RWT
3) Starting a new business is very risky that banks rarely lend under favourable terms. Their core market is always mortgages for houses.

Now if you think any of the above is a market for "Laissez-faire" capitalism, you're wrong. Real capitalism does not allow distortions in investment where the rational person will be pushed into owning multiple houses. The only reason why Kiwi Saver exists is simply, the working class can't save enough or borrow to buy another house.

The real question is what will the NZ gov't do to make houses more affordable? Not many levels left for them to try...

[TeslaGod]

House's are affordable.

70 years of consistently above 60% home ownership proves that.

Will be having this same debate in 10 years.

Research the history of the fiat currency and the devaluation of the dollar then you will understand it's your purchasing power that's weaker, not increasing house prices.

[TeslaGod]

I completely agree! The rational person is always going to pick houses over any other asset class for investment:

1) Tax free capital gain (when held 10+ years)
2) Limited housing supply due to restrictions such as the RMA, treaty issues, lack of gov't funded developments and infrastructure.
3) A banking system that allows lenders to prioritise lending to those who have more assets (hence less risk of default).

The fools are:

1) Those in Kiwi Saver where their funds attract RWT on paper gains and dividends EVERY year which greatly reduced the compound returns of the investment (no bigger critic against this than Vanguard founder Jack Bogel).
2) Fixed term deposits such as bonds and bank interest rates attracts RWT
3) Starting a new business is very risky that banks rarely lend under favourable terms. Their core market is always mortgages for houses.

Now if you think any of the above is a market for "Laissez-faire" capitalism, you're wrong. Real capitalism does not allow distortions in investment where the rational person will be pushed into owning multiple houses. The only reason why Kiwi Saver exists is simply, the working class can't save enough or borrow to buy another house.

The real question is what will the NZ gov't do to make houses more affordable? Not many levels left for them to try...

I wouldn't recommend investment into housing, I'd recommend if you're young going into business for yourself.

Fail young and learn.

It's not unusual for business owners to have an income in excess of 500k pa if you find the right path.

Reinvest your income into managed funds and believe in yourself.

Ignore the nay sayers online, they are only portraying there own failure's onto you.

[SBQ]

House's are affordable.

70 years of consistently above 60% home ownership proves that.

Will be having this same debate in 10 years.

Research the history of the fiat currency and the devaluation of the dollar then you will understand it's your purchasing power that's weaker, not increasing house prices.

Why does the OECD say houses in NZ are not affordable? I can show you references on exactly why the OECD makes such claim and why NZ is at #1 top of most unaffordable housing. For the past 20 years NZ has never been a place having houses easily in reach to everyone.

The issue of fiat currency is irrelevant because since Bretton Woods, developed countries have done far better without a currency pegged against gold. All developed nations have high housing prices relative to undeveloped nations. But when you take top spot? or how about the top 5 in the past 30 years?

When houses costs so much, the winners are not the people that own them. The winners are the banks that lend $ to the working family that pays all the compound interest in their mortgage...and then those profits are siphoned away from the NZ economy by foreign banks. A very different model to in Canada where Charter 1 banks there own virtually ALL the residential lending (and thus most of the profits stay in the country). But Canada has a lot of taxes and despite hot spots like Vancouver having also un-affordable housing, the gov't at least steps in and creates living accommodation for the poor and disadvantaged. Not in the sense what NZ is doing by using motels and state housing but rather, building large multistory complexes (yes Kiwi people need to stop thinking having a yard is a right to raise a family). If you can't make the income, then Vancouver is not your place - there just as nice places inland at less than half the price. However in NZ, what we are seeing is families are making much greater sacrifices and their disposable income buys very little. Far more than the other developed countries.

I'll leave a small quote, "The greatness of a country is based on how it treats it's weakest member". You can say that's communistic, I say it's not leaving people behind.

[TeslaGod]

SBQ

If a house In Mission bay across the road from the Hauraki gulf cost let's say 150k USD.

You can have it
because it's what you would pay for in a developing nation.

I wouldn't want to live here, I would move to a country were house prices are expensive.

There's a reason why the house prices are expensive ,because wealthy want to live there.

Not in developing or war torn countries or a banana Republic.

[TeslaGod]

SBQ

If a house In Mission bay across the road from the Hauraki gulf cost let's say 150k USD.

You can have it
because it's what you would pay for in a developing nation.

I wouldn't want to live here, I would move to a country were house prices are expensive.

There's a reason why the house prices are expensive ,because wealthy want to live there.

Not in developing or war torn countries or a banana Republic.

I'll add more context.

If the above is the value of premium real estate in NZ that means south Auckland average house prices would be in the vicinity of $30k.

Still not affordable enough for you? Try the region's they will be giving the land away.

Living in your slice of paradise certainly comes at a cost, living in developing countries conditions is definitely affordable.

If you don't mind the minimum wage of a $10 USD per month.

[Aaron]

Interesting article, I hadn't considered the view that people with just a home are not benefiting as their ability to move up to a better property does not increase. Although they will be glad they are not saving for a first home.

Investors, property developers and real estate agents appear to be the main beneficiaries, according to this article.

https://www.stuff.co.nz/national/300382175/housing-affordability-who-actually-wins-from-the-housing-crisis

[TeslaGod]

Interesting article, I hadn't considered the view that people with just a home are not benefiting as their ability to move up to a better property does not increase. Although they will be glad they are not saving for a first home.

Investors, property developers and real estate agents appear to be the main beneficiaries, according to this article.

https://www.stuff.co.nz/national/300382175/housing-affordability-who-actually-wins-from-the-housing-crisis

They should metion the main winner's of rising house prices are.

Business
Business owner's
Employees
The economy
Retail

The money eventually finds it's way from housing into the real economy.

I bought my wife a new Tesla, added solar panels to my house, Spent a week in Queenstown , contributing to New Zealand's wealth and standard of living.

[Aaron]

They should metion the main winner's of rising house prices are.

Business
Business owner's
Employees
The economy
Retail

The money eventually finds it's way from housing into the real economy.

I bought my wife a new Tesla, added solar panels to my house, Spent a week in Queenstown , contributing to New Zealand's wealth and standard of living.

Don't you mean "secondary" or "indirect" winners. As the main winner is the investor/developer then this wealth is distributed to the real economy depending on their spending preferences.

[Bjauck]

...

The money eventually finds it's way from housing into the real economy..... In NZ however greater and greater amounts are spent on inflating the price of land. So, overall the rapid price increases have ended up taking more money out of the real economy.

If a residential property cost $1,000,000 5 years ago and now costs $2,000,000. In effect that is an extra $1,000,000 spent on inflating the price of the land; $1,000,000 denied to the productive economy.

Sure, sometime in the future, depending on future land price movements and the needs of the landowner's beneficiaries, some of it may end up back in the productive economy.

[TeslaGod]

Sure, sometime in the future, depending on future land price movements and the needs of the landowner's beneficiaries, some of it may end up back in the productive economy.

Spot on Bjack

And that time for me is now.

[TeslaGod]

Don't you mean "secondary" or "indirect" winners. As the main winner is the investor/developer then this wealth is distributed to the real economy depending on their spending preferences.

No.
No I don't mean that .
Please see my prior post for who benefits.

[TeslaGod]

Spot on Bjack

And that time for me is now.

Disclosure.

I reinvest a large proportion of my capital back into accumulating further assets.

[SBQ]

No.
No I don't mean that .
Please see my prior post for who benefits.

As I said before, the foreign banks in NZ benefit. The next person that buys your property investment will look to borrow more from the bank, then the bank makes more profit through compound interest. It's a lot of $ that is lost out of the NZ economy as greater portions of the working class disposable income go to service the mortgage. Is a working class person right to be living under such difficult requirements? How does that compare to other countries where the same profession gets them much higher disposable income (ie doctors and nurses, teachers, ?). Didn't the nursing union in NZ strike 3 or 4 years ago... only to be striking again next month?

[TeslaGod]

As I said before, the foreign banks in NZ benefit. The next person that buys your property investment will look to borrow more from the bank, then the bank makes more profit through compound interest. It's a lot of $ that is lost out of the NZ economy as greater portions of the working class disposable income go to service the mortgage. Is a working class person right to be living under such difficult requirements? How does that compare to other countries where the same profession gets them much higher disposable income (ie doctors and nurses, teachers, ?). Didn't the nursing union in NZ strike 3 or 4 years ago... only to be striking again next month?

Here is my response to your concerns.

-Foreign banks-invest in the financial markets.

-I don't recommend selling property go long as in next generation long.

-Im confident the OCR will go negative in the next 24 to 48 month's.

-Nurses or any workers should invest in multiple forms of income to survive the next 30 years.

I'm retired and have multiple income sources. Not one of them is from a job.

[TeslaGod]

-Nurses or any workers should invest in multiple forms of income to survive the next 30 years.

I'm retired and have multiple income sources. Not one of them is from a job.

If you don't believe in this point that's like someone saying in 1951 "Mum will never have to work ,Dad's income will always be enough"

Evolve ,It's apart of nature, those who don't

well we know what happens.

[JBmurc]

So you have many properties managed Teslagod ?? Nice ...good for you certainly a much less stressful source of income

[TeslaGod]

So you have many properties managed Teslagod ?? Nice ...good for you certainly a much less stressful source of income
Thanks JBmurc

I also lease many of my properties to social housing community groups with tenants that have mental and drug abuse issues.

(I do the government's job for them)

These are people who need help and shelter.

Not many on welfare truly deserve hand outs just a hand up and a push in the right direction.

[101nick101]

Looking to buy my first home in Auckland at the end of next year and will no doubt be bitten hard in the rear. Can't stomach paying ground/body corp fees and non-apartments in or near the CBD are extremely expensive, a 1 beddy 1 bathroom in Mt Eden will set you back 900k - 1.1m. Wonder what things will be like in 10 years time for those trying to buy.

If you're in the Auckland market already you've won, aside from apartments or a long commute to the CBD from Waiku young kiwis are going to get priced out.

[SBQ]

Looking to buy my first home in Auckland at the end of next year and will no doubt be bitten hard in the rear. Can't stomach paying ground/body corp fees and non-apartments in or near the CBD are extremely expensive, a 1 beddy 1 bathroom in Mt Eden will set you back 900k - 1.1m. Wonder what things will be like in 10 years time for those trying to buy.

If you're in the Auckland market already you've won, aside from apartments or a long commute to the CBD from Waiku young kiwis are going to get priced out.

This issue has been hit many times. To get you up to speed have a listen here:

https://thespinoff.co.nz/business/25-06-2021/bernard-hickey-how-hope-for-a-generation-was-lost/

He says, some sort of land tax or any tax to discourage the high demand done by property investors.

[ynot]

Quoting Bernard
"Those parents still renting and those just graduating into Covid without assets should move now. Giving up hope seems a capitulation. It is. But sometimes discretion is the better part of valour. Sometimes there is no hope. Move to Australia and you’ll find wages are 30-40% higher and rents have fallen $50-100 in the last year."

Unfortunately, as much as it deeply disturbes me to say this, I think Bernard is correct, I think for many young kiwis, greater opportunities for home ownership lie in Australia.

[TeslaGod]

Quoting Bernard
"Those parents still renting and those just graduating into Covid without assets should move now. Giving up hope seems a capitulation. It is. But sometimes discretion is the better part of valour. Sometimes there is no hope. Move to Australia and you’ll find wages are 30-40% higher and rents have fallen $50-100 in the last year."

Unfortunately, as much as it deeply disturbes me to say this, I think Bernard is correct, I think for many young kiwis, greater opportunities for home ownership lie in Australia.

Quoting Corelogic:

"despite escalating prices, the proportion of homes being bought by first-home buyers was holding"

In other words it's the same amount for first home buyers as has always been.

If they want to buy move to Australia and buy an affordable apartment in Sydney or home in the outskirts, I'm very experienced in the Australian housing market.

Don't expect these affordable housing to increase in value at the rate of New Zealands.
It can stay the same price for 15 years, but if that's what you want, move there because like anything in this world

you get what you pay for.

[101nick101]

I'm sorry any advice for a first home buyer looking to stay in NZ?

Not overly fond of having huntsman spiders nipping me on the butt and the female Aussie accent is worse than nails on a chalkboard to my ears.

[TeslaGod]

Looking to buy my first home in Auckland at the end of next year and will no doubt be bitten hard in the rear. Can't stomach paying ground/body corp fees and non-apartments in or near the CBD are extremely expensive, a 1 beddy 1 bathroom in Mt Eden will set you back 900k - 1.1m. Wonder what things will be like in 10 years time for those trying to buy.

If you're in the Auckland market already you've won, aside from apartments or a long commute to the CBD from Waiku young kiwis are going to get priced out.
Wow, your aiming as a first home buyer to enter the market in one of the top suburbs in New Zealand.

Enough said.

Good luck anyway.

[TeslaGod]

This issue has been hit many times. To get you up to speed have a listen here:

https://thespinoff.co.nz/business/25-06-2021/bernard-hickey-how-hope-for-a-generation-was-lost/

He says, some sort of land tax or any tax to discourage the high demand done by property investors.

The Spin off + Bernard Hickey + Land tax = communist China.

[SBQ]

The Spin off + Bernard Hickey + Land tax = communist China.

Sez the guy that already has the houses. Bernard is not preaching communism here. He's is simply stating that to live in NZ and own a home, the massive rise in price only adds on to the mortgage to those needing to buy their first home, and the winners are the banks through higher compound interest (40 year mortgages?). Clearly the losers are those paying for it, and the winners are those that own the houses mortgage free... with tax free capital gains. You identify yourself as the latter so it's easy for you to say you won't be happy for any form of taxation.

[TeslaGod]

The Bank's are not the winner's, it's a well known industry dirty little secret the bank's can't stand the fact the can't get there greedy hands on any of the capital gains they helped create for the mortgage holder.

Anyone trying to tax grab is a RED COMMIE MARXIST, that tax doesn't go to help a first home buyer it goes straight to government bureaucrats

Apart from Billions spent on housing the unhousable .

[ynot]

Quoting Corelogic:

"despite escalating prices, the proportion of homes being bought by first-home buyers was holding"

In other words it's the same amount for first home buyers as has always been.

If they want to buy move to Australia and buy an affordable apartment in Sydney or home in the outskirts, I'm very experienced in the Australian housing market.

Don't expect these affordable housing to increase in value at the rate of New Zealands.
It can stay the same price for 15 years, but if that's what you want, move there because like anything in this world

you get what you pay for.

Capital value increase is probably not in the forefront of mind for the NZ first home buyer.
He is struggling to save his ass from a lifetime of $500pw plus rent while he watches as house prices continue to move even higher !

[TeslaGod]

Capital value increase is probably not in rhe forefront of mind for the NZ first home buyer.
He is struggling to save his ass from a lifetime of $500pw rent !

The he should buy a house.

Were he can afford

Not in one of the most expensive suburbs in the developed world.

[ynot]

The he should buy a house.

Were he can afford

Not in one of the most expensive suburbs in the developed world.

Exactly, which begrugingly (as i personally would rather live in nz) i have to agree with Bernard and recommend he bites the bullet and gets across the ditch where at least he has the possibility of attaining some resemblance of a normal life.

[TeslaGod]

Exactly, which begrugingly (as i personally would rather live in nz) i have to agree with Bernard and recommend he bites the bullet and gets across the ditch where at least he has the possibility of attaining some resemblance of a normal life.

I recommend he lower his expectations and look outside MT Eden, were the average price is 2m.

[101nick101]

The he should buy a house.

Were he can afford

Not in one of the most expensive suburbs in the developed world.

Leave my hometown and move to Greymouth... Got it, cheers for that.

Out of interest how many houses do you own?

[TeslaGod]

Leave my hometown and move to Greymouth... Got it, cheers for that.

Out of interest how many houses do you own?

More than any single man should.

Out of interest how much have you been approved for?

[101nick101]

More than any single man should.

Out of interest how much have you been approved for?

800k enough for Glen Eden I reckon

[TeslaGod]

800k enough for Glen Eden I reckon

Apartment ,unit, townhouse or house?

[101nick101]

Apartment ,unit, townhouse or house?

Would be happy with either a townhouse or house, couldn't stomach paying ground/bodycorp fees.

[TeslaGod]

Would be happy with either a townhouse or house, couldn't stomach paying ground/bodycorp fees.
Chances are slim of buying a house.

Look for a unit with a small patch of land.

Look at greater Auckland.

Look for a townhouse that's different.

Look for something close to cafés or town.

Look for these as close to public transport as possible.

You asked what a 1 bedroom in MT Eden would cost in 10 years...3 to 4 million.

Buy something rundown, try avoid new unless it's in a premium position however these may already be priced into the sale price.

Your first home should not be your last, a good small property with capital growth will have you on your next property in 24/48months so long as you knuckle down and hammer as much of that mortgage as possible.

[TeslaGod]

Chances are slim of buying a house.

Look for a unit with a small patch of land.

Look at greater Auckland.

Look for a townhouse that's different.

Look for something close to cafés or town.

Look for these as close to public transport as possible.

You asked what a 1 bedroom in MT Eden would cost in 10 years...3 to 4 million.

Buy something rundown, try avoid new unless it's in a premium position however these may already be priced into the sale price.

Your first home should not be your last, a good small property with capital growth will have you on your next property in 24/48months so long as you knuckle down and hammer as much of that mortgage as possible.

Don't listen to the "I can't crowd"
On this forum or social/mainstream media.

[ynot]

I recommend he lower his expectations and look outside MT Eden, were the average price is 2m.
Sorry I wasn't directly aiming at the OP, more the average kiwi starting out that can not stretch it to $800k.

[TeslaGod]

Sorry I wasn't directly aiming at the OP, more the average kiwi starting out that can not stretch it to $800k.

That is a fair point.

and what and would you consider

a fair price in Auckland, preferred suburbs.

[ynot]

That is a fair point.

and what and would you consider

a fair price in Auckland, preferred suburbs.
I'm not familiar with Auckland so can't comment. I do know prices are crazy almost everywhere around the country.
I know you dont get much of a property anywhere in Tauanga for under $700.

[Bjauck]

Quoting Bernard
"Those parents still renting and those just graduating into Covid without assets should move now. Giving up hope seems a capitulation. It is. But sometimes discretion is the better part of valour. Sometimes there is no hope. Move to Australia and you’ll find wages are 30-40% higher and rents have fallen $50-100 in the last year."

Unfortunately, as much as it deeply disturbes me to say this, I think Bernard is correct, I think for many young kiwis, greater opportunities for home ownership lie in Australia.
Yep. NZ used to be place for its young adults to establish a home and garden and raise a family. Now it is the land of milk and honey for wealthier older established people?

[fungus pudding]

Yep. NZ used to be place for its young adults to establish a home and garden and raise a family. Now it is the land of milk and honey for wealthier older established people?

Funny you should say that - I was just thinking this morning, that Noah probably had the world's finest ark in its day.

[ynot]

Yep. NZ used to be place for its young adults to establish a home and garden and raise a family. Now it is the land of milk and honey for wealthier older established people?

I have said this before but will repeat as it really p..... me off.
I have aways considered it a kiwi's birthright to be able to own their own home.
This rite has been stripped from a lot of young New Zealanders.
I place the blame for this squarely on our governments. If they achieved nothing else for the people they are elected to serve, surely this should have been a priority but sadly, no.

[Entrep]

NZ will only become more popular and in demand as the rest of the world turns to custard. This was happening way before COVID. Terrorism, gun ownership, violence, political and religious extremism etc all very widespread elsewhere. Add viruses to worry about (what's next?) too.

Sure I am biased, but our highly developed, island, isolated and for the most part sensible nation seems very attractive.

[Bjauck]

NZ will only become more popular and in demand as the rest of the world turns to custard. This was happening way before COVID. Terrorism, gun ownership, violence, political and religious extremism etc all very widespread elsewhere. Add viruses to worry about (what's next?) too.

Sure I am biased, but our highly developed, island, isolated and for the most part sensible nation seems very attractive. I am not sure if that is currently the case, when NZ's high penetration of gang membership, low vaccination rate and Covid community cases growing by the day, and The Christchurch Attack are taken into account?

[Aaron]

Always uncomfortable when something is described as a human right. Is anything really a "right". But interesting this article discusses housing and politics. 1937 Michael Savage govt. started building houses.
The building of state housing continues to go on to 1990. By then there are 70,000 state houses, which is more than Kāinga Ora owns now. Ordinary working people were able to take out a cheap State Advances loan to buy their own home, and you could capitalise your Family Benefit (now long gone) to build an extension.

https://www.msn.com/en-nz/money/other/human-right-to-financial-speculation-how-a-switch-in-ideology-led-to-the-current-housing-crisis/ar-AANth7C?ocid=msedgntp

So the government built the houses provided cheap finance to buy the houses and in some cases if you had kids the deposit. But in 1990 about the same time as targeted inflation became a thing when the baby boomers were between 26yrs-44yrs old the country was technically insolvent. These same people are now suggesting national superannuation is a "right" after giving themselves a good start in life they have loaded the next generation with student debt, large housing debt and eventually higher taxation to fund their national super. They are also the generation suggesting the younger generations "want everything and don't want to work for it". It is pretty rich.
Maybe do away with targeted inflation which is a tax and is stealing our time. (It took 3 years wages to buy a house in the good old days but takes now it take 8.5 years)

Sorry if this has already been discussed endlessly earlier in the thread.

[Aaron]

I place the blame for this squarely on our governments. If they achieved nothing else for the people they are elected to serve, surely this should have been a priority but sadly, no.

People vote govts into power, govts provide for those with the most votes, making being born in a boom period good.

They have served and continue to serve a large selfish generation of voters.

John Key and Jacinda Ardern both addressed the "big issues". No capital gains tax, universal national superannuation and the continuation of targeted inflation. It doesn't matter which way you vote the result is the same.

[artemis]

...The building of state housing continues to go on to 1990. By then there are 70,000 state houses, which is more than Kāinga Ora owns now......

While this is technically true, it is deliberately misleading. It leaves out the thousands of social housing properties now owned by community housing providers with tenants who qualify for income related rent subsidy from the taxpayer. Same subsidy as KO tenants can get.

[Aaron]

While this is technically true, it is deliberately misleading. It leaves out the thousands of social housing properties now owned by community housing providers with tenants who qualify for income related rent subsidy from the taxpayer. Same subsidy as KO tenants can get.

Who ultimately receives the accommodation supplement payments? Is this the govt answer to pushing up house prices and rents faster than wages?

Don't let house prices fall but back stop the landlords with current monetary policy and the accommodation supplement. Sounds reasonable.

[artemis]

Who ultimately receives the accommodation supplement payments? Is this the govt answer to pushing up house prices and rents faster than wages?

Don't let house prices fall but back stop the landlords with current monetary policy and the accommodation supplement. Sounds reasonable.

The accommodation supplement is paid to tenants and mortgagors. What they do with it is up to them. Most landlord applications to the Tenancy Tribunal are for rent arrears and/or damage.

[Aaron]

The accommodation supplement is paid to tenants and mortgagors. What they do with it is up to them. Most landlord applications to the Tenancy Tribunal are for rent arrears and/or damage.

"What they do with it is up to them". Pretty weak argument "Accommodation Supplement" doesn't the name give some indication what it is meant for. Surely your accommodation costs are part of the qualifying criteria. So who is expected to receive this.... really.

To be honest I hated being a landlord to a crappy tenant, very stressful. If they received an accommodation supplement it didn't prevent them from not paying their rent every Christmas. Nothing against landlords but they are the beneficiary of a system that continues and seems wrong to me.

[ynot]

Always uncomfortable when something is described as a human right. Is anything really a "right". But interesting this article discusses housing and politics. 1937 Michael Savage govt. started building houses.
The building of state housing continues to go on to 1990. By then there are 70,000 state houses, which is more than Kāinga Ora owns now. Ordinary working people were able to take out a cheap State Advances loan to buy their own home, and you could capitalise your Family Benefit (now long gone) to build an extension.

https://www.msn.com/en-nz/money/other/human-right-to-financial-speculation-how-a-switch-in-ideology-led-to-the-current-housing-crisis/ar-AANth7C?ocid=msedgntp

So the government built the houses provided cheap finance to buy the houses and in some cases if you had kids the deposit. But in 1990 about the same time as targeted inflation became a thing when the baby boomers were between 26yrs-44yrs old the country was technically insolvent. These same people are now suggesting national superannuation is a "right" after giving themselves a good start in life they have loaded the next generation with student debt, large housing debt and eventually higher taxation to fund their national super. They are also the generation suggesting the younger generations "want everything and don't want to work for it". It is pretty rich.
Maybe do away with targeted inflation which is a tax and is stealing our time. (It took 3 years wages to buy a house in the good old days but takes now it take 8.5 years)

Sorry if this has already been discussed endlessly earlier in the thread.

So do you think the govt (any govt) has a role to play in providing it's citizens the environment that helps them find a way into their own home ?
I do.

[Aaron]

So do you think the govt (any govt) has a role to play in providing it's citizens the environment that helps them find a way into their own home ?
I do.

I do, I also think people need to get off their arses and do something for themselves rather than whining for a handout while spending up large.

As I have suggested many times targeted inflation has been tilting the playing field for the owners of assets for several decades and this should change, but I don't find much support for this on this site and most other people in the physical world tend to just stare at me then change the subject if I bring it up. Arthur Grimes, the man who came up with the targeted inflation bulls*it has said he does not think it is a good idea anymore.

https://www.newstalkzb.co.nz/on-air/heather-du-plessis-allan-drive/audio/arthur-grimes-government-engineering-a-well-being-disaster/

https://www.wgtn.ac.nz/cpf/news/former-rbnz-chairman-arthur-grimes-warns-of-real-danger-of-the-rbnz-destablising-asset-prices,-as-its-employment-target-sees-it-go-too-far-lowering-interest-rates

Unfortunately 65% of NZ owns a home so you are pushing s*it uphill until the majority don't own a house. That is how democracy works.

Earlier generations obviously invested for future generations and paid a large chunk of tax to govts to support this (think 66% top tax rates). Unfortunately as a nation we have become more self centered and selfish.

https://thespinoff.co.nz/business/09-07-2021/bernard-hickey-the-1-trillion-housing-wealth-crime-of-the-century/

Ask not what you can do for your country but what your country can do for you. And make sure you vote in the "leaders" who will do it for you.

[artemis]

"What they do with it is up to them". Pretty weak argument "Accommodation Supplement" doesn't the name give some indication what it is meant for. Surely your accommodation costs are part of the qualifying criteria. So who is expected to receive this.... Really.....

Not an argument. It's a fact. 100% up to the recipient to spend or save.

[Aaron]

Not an argument. It's a fact. 100% up to the recipient to spend or save.

Whatever....

[Aaron]

Thinking about it further the TOP party do promote real change maybe I should revisit their policies before the next election.

[TeslaGod]

Whatever....

I smirk when this new generation of investors don't get there way, they spit the dummy.

Get a few more miles on the clock so you can figure out how the world really works .

[SBQ]

I do, I also think people need to get off their arses and do something for themselves rather than whining for a handout while spending up large.

As I have suggested many times targeted inflation has been tilting the playing field for the owners of assets for several decades and this should change, but I don't find much support for this on this site and most other people in the physical world tend to just stare at me then change the subject if I bring it up. Arthur Grimes, the man who came up with the targeted inflation bulls*it has said he does not think it is a good idea anymore.

https://www.newstalkzb.co.nz/on-air/heather-du-plessis-allan-drive/audio/arthur-grimes-government-engineering-a-well-being-disaster/

https://www.wgtn.ac.nz/cpf/news/former-rbnz-chairman-arthur-grimes-warns-of-real-danger-of-the-rbnz-destablising-asset-prices,-as-its-employment-target-sees-it-go-too-far-lowering-interest-rates

Unfortunately 65% of NZ owns a home so you are pushing s*it uphill until the majority don't own a house. That is how democracy works.

Earlier generations obviously invested for future generations and paid a large chunk of tax to govts to support this (think 66% top tax rates). Unfortunately as a nation we have become more self centered and selfish.

https://thespinoff.co.nz/business/09-07-2021/bernard-hickey-the-1-trillion-housing-wealth-crime-of-the-century/

Ask not what you can do for your country but what your country can do for you. And make sure you vote in the "leaders" who will do it for you.

You definitely got that right in the last quote. The TeslaGods will always vote for the governing party that will keep their established wealth... untouched. The low income people who don't pay taxes are not educated enough about Finance and Politics so they don't vote (or vote with myopic eyes).

As for the 65% figure of houses owned.... one must always remember about compound interest. As principle amounts on mortgage rise, so does the amount of profits that the banks get. In the early years of my parents, getting a 20 year mortgage was the norm when houses were around $75K. Now we're looking at 40 year mortgages where houses are over $1.2M. The banks are posting record profits. Who exactly is paying the price? I mean there comes to a point where how much harder can people bear seeing most of their disposable income going to service the mortgage? Like I say, it's not a matter of working harder, getting better grades at school, or going to the right school, finishing uni, etc. We are seeing the trend that wealth inequality has squashed everything out, pushing the middle class lower until there's no middle class.

Yes I agree the past and current NZ governments have failed. I can see it with my own eyes comparing what my highschool friends back in Canada have achieved (through social mobility) vs my cousins that grew up in NZ and what they have achieved. Houses are a lot more plentiful in Canada and they have no restrictive RMA. Building costs are 1/3rd of NZ building costs. Energy prices again, 1/3rd of what we pay in NZ. I suppose what i'm hitting at is why does NZ have to be #1 of having the most unaffordable housing in the developed world?

[fungus pudding]

You definitely got that right in the last quote. The TeslaGods will always vote for the governing party that will keep their established wealth... untouched. The low income people who don't pay taxes are not educated enough about Finance and Politics so they don't vote (or vote with myopic eyes).

As for the 65% figure of houses owned.... one must always remember about compound interest. As principle amounts on mortgage rise, so does the amount of profits that the banks get. In the early years of my parents, getting a 20 year mortgage was the norm when houses were around $75K. Now we're looking at 40 year mortgages where houses are over $1.2M. The banks are posting record profits. Who exactly is paying the price? I mean there comes to a point where how much harder can people bear seeing most of their disposable income going to service the mortgage? Like I say, it's not a matter of working harder, getting better grades at school, or going to the right school, finishing uni, etc. We are seeing the trend that wealth inequality has squashed everything out, pushing the middle class lower until there's no middle class.

Yes I agree the past and current NZ governments have failed. I can see it with my own eyes comparing what my highschool friends back in Canada have achieved (through social mobility) vs my cousins that grew up in NZ and what they have achieved. Houses are a lot more plentiful in Canada and they have no restrictive RMA. Building costs are 1/3rd of NZ building costs. Energy prices again, 1/3rd of what we pay in NZ. I suppose what i'm hitting at is why does NZ have to be #1 of having the most unaffordable housing in the developed world?
Beats me why you hang around here.

[TeslaGod]

I suppose what i'm hitting at is why does NZ have to be #1 of having the most unaffordable housing in the developed world?

Because New Zealand is the best country on Earth , possibly universe*

*(To be verified)

https://youtu.be/h_9jhYwpcmY

[ynot]

I suppose what i'm hitting at is why does NZ have to be #1 of having the most unaffordable housing in the developed world?[/QUOTE]

That's an interesting question.
Obviously the problem stems from a few unique facts. The planet's are all all alligned so to speak and our unique set of circumstances culminate in the result being very high house prices.
These circumstances didn't happen overnight, they mature over time and the result is what we see today.
Whats more, it would probably take a left field event to bring it down but I have no idea what that would likely be.

[Aaron]

I smirk when this new generation of investors don't get there way, they spit the dummy.

Get a few more miles on the clock so you can figure out how the world really works .

I'll take the bait.

The Accommodation Supplement in the words of MSD. Accommodation Supplement is a weekly payment which helps people with their rent, board or the cost of owning a home.

I made the assertion that it was a $1.7billion taxpayer subsidy to landlords.

artemis countered that assertion with. "Some tenants don't pay their rent so it isn't" His exact words were "Not an argument. It's a fact. 100% up to the recipient to spend or save."

Despite the name of the supplement the fact that most people pay their rent artemis doesn't see it as a subsidy for landlords. I would have thought checking the percentage of home owners collecting the supplement would have been a stronger argument than that, but I suspect a large percentage would be renters.

And I don't deny that artemis is correct but hardly enough to refute my initial assertion, so my only response was.

Whatever....

"Don't be a f**king idiot" might have been as equally appropriate.

and if I knew his/her age I could have used the classic

"OK Boomer"

Unfortunately my modest financial position precludes me from using the follow excellent arguments

-I'm rich
-Your a socialist or a greenie
-Your rich?...... well I am even richer

All great unbeatable arguments to any discussion and does away the need for "facts", common sense or logic.

[Aaron]

Saw this and thought of SBQ, haven't read the article as I still don't care about the Canadian residential market but reading the headline not the perfect nirvana for housing that it is sometimes portrayed as on this site. Legislation in Canada not quite perfected yet but must be getting close soon.
Or maybe they could tighten up the money supply and raise interest rates. Who knows.
https://www.zerohedge.com/markets/canadas-trudeau-proposing-fixing-his-countrys-housing-bubble-even-more-government

[fungus pudding]

Saw this and thought of SBQ, haven't read the article as I still don't care about the Canadian residential market but reading the headline not the perfect nirvana for housing that it is sometimes portrayed as on this site. Legislation in Canada not quite perfected yet but must be getting close soon.
Or maybe they could tighten up the money supply and raise interest rates. Who knows.
https://www.zerohedge.com/markets/canadas-trudeau-proposing-fixing-his-countrys-housing-bubble-even-more-government

There is an unbelievable amount of rubbish talked about housing. An undersupply is hard on purchasers. An over-supply is hard on vendors. There is nothing else to know.

[TeslaGod]

Great article Aaron

I couldn't stop laughing

It was as if Trudeau was learning from the book of New Zealand Realestate.

They can't have there housing market fall, just like us.

All politicians lie for the power grab.

I used to believe there would be only two reasons why the housing market would collapse.

War or a pandemic which could wipe out a large amount of the population.

Now I'm even doubting that will lower house prices , permanently anyway.

[Aaron]

There is an unbelievable amount of rubbish talked about housing. An undersupply is hard on purchasers. An over-supply is hard on vendors. There is nothing else to know.

I still think interest rates and monetary policy play a part in the price rises (inflation). As a kid I used to dream of being a millionaire, turns out my dreams weren't very big.

Mass immigration and a lack of supply (Note RMA mention in article) have played a large role, making this article more relevant regarding supply.

https://thespinoff.co.nz/business/09-07-2021/bernard-hickey-the-1-trillion-housing-wealth-crime-of-the-century/

[TeslaGod]

I still think interest rates and monetary policy play a part in the price rises (inflation). As a kid I used to dream of being a millionaire, turns out my dreams weren't very big.

Mass immigration and a lack of supply (Note RMA mention in article) have played a large role, making this article more relevant regarding supply.

https://thespinoff.co.nz/business/09-07-2021/bernard-hickey-the-1-trillion-housing-wealth-crime-of-the-century/

You might want to reassess "dreaming of wanting to be a millionaire"

Billionaire should be the next goal for you.

Millionaires are growing off trees in Auckland

[dobby41]

You might want to reassess "dreaming of wanting to be a millionaire"

Billionaire should be the next goal for you.

Millionaires are growing off trees in Auckland

When I look at wealth I don't include my family home - I can't eat it.
Investable wealth is what counts for me.
So not as many millionaires in Auckland by my count.

[SBQ]

There is an unbelievable amount of rubbish talked about housing. An undersupply is hard on purchasers. An over-supply is hard on vendors. There is nothing else to know.

I agree. In Canada, the cumulative figures are significantly a lot less than NZ house prices. This kinda reminds me of the bond market in Japan where they trade separate from the rest of the world. You have housing bubbles in N. America where they say a 15% rise in 1 year is a bubble, then you have the NZ figure that is well, significantly higher. Where does this all lead?

Maybe Zerohedge needs to have a look at the NZ housing market? Or maybe NZ is so far away from the rest of the world, it really doesn't matter (just like the responses I hear abroad from how we are dealing with Covid "An elimination strategy in NZ? Who cares!??"

The media in Canada talks about housing being unaffordable - but from the NZ perspective, it's clear the Cdn gov't has done a hell of a lot more to address that issue than what NZ has done. The article references to the extreme for Trudeau to provide a lot more for first home buyers, despite already having multiple programs in existence:

https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans/what-home-buyers-plan/participate-home-buyers-plan.html

https://www.cmhc-schl.gc.ca/en/nhs/canada-first-time-home-buyer-incentive

In addition to the CMHC forcing banks to provide low interest rate mortgages through their insurance scheme.

But don't take my word for it and no one is expected to care. I'm just seeing with my own eyes the friends I have in Canada, seeing their children grow up being able to get into their first home without paying most of their entire life, working like a dog just to service the mortgage for most of their life. Their ability to enjoy higher disposable income (noted by the toys and vehicles they're more able to afford) that is kinda incomparable to the NZ counterpart.

Again like all other things, you can't take housing prices in Canada (or Australia) as an absolute. As Bernard Hickey is saying, all hope is lost in NZ. Those that aren't on the housing ladder in NZ and paying rent living in a poverty lifestyle should simply move to Australia where wages are higher, rents are lower, and houses are a lot more affordable. You don't need to be a rocket scientist to see that in NZ, a lack of housing supply, lack of demand controls such as taxation = a disaster for NZ home affordability.

[RTM]

Good article in September North & South on housing and how NZ got to where it’s at.
“The Great Divide”
FP….terribly simplistic view of the problem. The consequences of poor housing outcomes are pretty dire for our society.
No easy fix….unfortunately for Jacinda.

[fungus pudding]

Good article in September North & South on housing and how NZ got to where it’s at.
“The Great Divide”
FP….terribly simplistic view of the problem. The consequences of poor housing outcomes are pretty dire for our society.
No easy fix….unfortunately for Jacinda.

I don't doubt the consequences of poor housing are as you say. That doesn't alter the undeniable fact that it is a supply problem. Of course that is a simplistic statement. I could write pages on why that is - but that changes nothing. Supply and demand - that is what it is.

[fungus pudding]

When I look at wealth I don't include my family home - I can't eat it.
Investable wealth is what counts for me.
So not as many millionaires in Auckland by my count.

Then the solution for you is to sell your home and invest the money. You'll be so much wealthier with this new-found investable cash.

[dobby41]

Then the solution for you is to sell your home and invest the money. You'll be so much wealthier with this new-found investable cash.

No, it won't because then I won't have a place to live.
I could try to sell down but my experience is that many people don't achieve that because the difference between what they have and what they want doesn't provide enough to be wealthy.
We do know that many sell down and buy a villa in a retirement village and have a few bob left for life's extras they desire.

So I'll stick with the house I have and use the return on the wealth I have accumulated as (my definition of) investments to live a rich and, hopefully, long life.

[Bjauck]

When I look at wealth I don't include my family home - I can't eat it.
Investable wealth is what counts for me.
So not as many millionaires in Auckland by my count.
For those who don't already own substantial equity in a house, then owning a house with today's valuations is being wealthy?

With the current highly inflated values, unmortgaged home owners may have the option of downsizing and investing or selling, renting and investing. Moreover for those who already own a house and then inherit other ones, that will be where the wealth may also amass.

[fungus pudding]

No, it won't because then I won't have a place to live.
I could try to sell down but my experience is that many people don't achieve that because the difference between what they have and what they want doesn't provide enough to be wealthy.
We do know that many sell down and buy a villa in a retirement village and have a few bob left for life's extras they desire.

So I'll stick with the house I have and use the return on the wealth I have accumulated as (my definition of) investments to live a rich and, hopefully, long life.

But you could rent leaving this pile of money, which previously wasn't part of your wealth, in the column that makes you rich. Magic. I'm surprised I've never thought of it myself.

[Aaron]

Good article in September North & South on housing and how NZ got to where it’s at.
“The Great Divide”
FP….terribly simplistic view of the problem. The consequences of poor housing outcomes are pretty dire for our society.
No easy fix….unfortunately for Jacinda.

Not a subscriber but any main points in the article. No finger pointed at a specific generation?

[artemis]

Good article in September North & South on housing and how NZ got to where it’s at.
“The Great Divide”
FP….terribly simplistic view of the problem. The consequences of poor housing outcomes are pretty dire for our society.
No easy fix….unfortunately for Jacinda.

Have quickly skim read only so far, but mentioning 3 things. First, there is a subtext - more money from the taxpayer. Secondly, there is no mention of DINKs. Thirdly at least some of the tsunami of data is cherry picked to support a narrative.

It's a long article, lots of numbers, many comments from activist organisations. Maybe they have not heard of DINKs.

[SBQ]

Have quickly skim read only so far, but mentioning 3 things. First, there is a subtext - more money from the taxpayer. Secondly, there is no mention of DINKs. Thirdly at least some of the tsunami of data is cherry picked to support a narrative.

It's a long article, lots of numbers, many comments from activist organisations. Maybe they have not heard of DINKs.

So the problem for home ownership is based on DINK situation? I mean society deems acceptable to own a house because they're DINKs and families with children simply can not afford to own?

I've known couples who would love to have children but have told me over the past 2 decades that they can not afford to have children. Before I knew it, she was past her age for having children and therefore they've defaulted into DINK world. Yes they paid a horrible cost getting into a home in that by the time they tried to have children, it was too late. If housing was more affordable, i'm certain they would have been in a house a decade earlier and had a good chance at family.

I dunno. The housing situation in NZ makes it very clear that wealthier families who own the house, basically set the tone for their next generation to own a house through inheritance. Some families have 1 child, some have 4. The latter would be an issue as the parent's home does not provide enough equity when the children have moved out. No surprise here as the more children = the more it costs.

I don't think there are any surprises in the N&S report. I'm a strong believer in pro choice. Don't blame the people. Blame the gov't for enabling people that created this housing problem.

[TeslaGod]

What's a DINK?

[fungus pudding]

What's a DINK?

You been under a rock since the sixties?

[TeslaGod]

You been under a rock since the sixties?

No I'm an 80s child, please enlighten me.

[fungus pudding]

No I'm an 80s child, please enlighten me.

Well as an 80s model you surely know google will answer your question. However to save you from such a strenuous task as typing, it's an acronym - double income - no kids.

[TeslaGod]

Well as an 80s model you surely know google will answer your question. However to save you from such a strenuous task as typing, it's an acronym - double income - no kids.

Yes I was a good looking child, thanks , always good to learn something new every day.

[artemis]

So the problem for home ownership is based on DINK situation? I mean society deems acceptable to own a house because they're DINKs and families with children simply can not afford to own? ......

It's a practical thing. Two incomes and shared expenses make it much more possible to save a house deposit. Happens all the time. It's called planning. And deciding to make sure the household has secure housing before adding to it.

Then there those who make different decisions.

[SBQ]

It's a practical thing. Two incomes and shared expenses make it much more possible to save a house deposit. Happens all the time. It's called planning. And deciding to make sure the household has secure housing before adding to it.

Then there those who make different decisions.

Of course 'dual incomes' help, after all that's how the banks assess couples when they go for a mortgage. However, the issue of DINKs is not the case of planning but rather, it's the case of having no other option. The price of the house has gone up so much that it strips of any ability for a couple to have children, thus creating a trend of the DINKs. As with my previous example, the couple I knew always wanted to have children in their plan. They were renting, and hoping they could save up enough for a deposit. At the end living in Auckland for over 10 years before getting into a house, it left them well scraping for coins. If houses did not rise so much, then they would have some extra 'safety' buffer of funds and the stability to have a family. But what I see now is those that are buying and are able to have children, they're doing so with the help of family inheritance. If not, well then I guess the banks make more money.

[artemis]

Thousands of first home buyers manage to borrow from the bank every month. Good for them. I guess at least some of them planned, saved, worked extra jobs, kept their expectations on the low side.

[iamaskier]

Have quickly skim read only so far, but mentioning 3 things. First, there is a subtext - more money from the taxpayer. Secondly, there is no mention of DINKs. Thirdly at least some of the tsunami of data is cherry picked to support a narrative.

It's a long article, lots of numbers, many comments from activist organisations. Maybe they have not heard of DINKs.

Help me understand what you're saying here. Do you feel that a necessary DINK situation is an acceptable pre-condition for aspiring home ownership amongst NZ's general population?

While people are certainly entitled to those views, I really don't think they accurately "price in" the long term implications.

What happens when our best and brightest; teachers, nurses, police, hospo, retail, customer service reps etc... either leave for overseas or don't have kids because God forbid, they want the security of owning the roof over their head? As a society we'll be worse for it.

In my view, there's a twisted irony in all of this. As property owner I feel like i'm becoming more and more well off, but ultimately I'm just a part of a collective that is deteriorating...

[artemis]

Help me understand what you're saying here. Do you feel that a necessary DINK situation is an acceptable pre-condition for aspiring home ownership amongst NZ's general population? ....

That is not what I'm saying at all. I am saying that planning for home ownership while there are two incomes and shared expenses is rather more likely to result in home ownership than in life long renting in private or social housing. This is not new.

Feel free to disagree but suggest that first check out the examples and anecdotes in the N&S article, including which organisations have provided them and see if you think there is an agenda running. Ask yourself how many of the thousands of first home owners who buy each and every month were interviewed about how they did it. Apparently "according to one estimate, 70 per cent of first-home buyers need the Bank of Mum and Dad to help with a deposit" - we are not told who estimated this, or based on what.

[iamaskier]

That is not what I'm saying at all. I am saying that planning for home ownership while there are two incomes and shared expenses is rather more likely to result in home ownership than in life long renting in private or social housing. This is not new.

Feel free to disagree but suggest that first check out the examples and anecdotes in the N&S article, including which organisations have provided them and see if you think there is an agenda running. Ask yourself how many of the thousands of first home owners who buy each and every month were interviewed about how they did it. Apparently "according to one estimate, 70 per cent of first-home buyers need the Bank of Mum and Dad to help with a deposit" - we are not told who estimated this, or based on what.

Unfortunately not a subscriber so it appears I only get access to the first part of the article? (+ the summary provided by the Scoop). I can't comment on the potential agenda but regardless of whether or not there is one, it's clear that it's become more difficult to get on the property ladder. As to whether one thinks it's become "too difficult" on the whole, I guess is a matter of personal judgement. I think it has, and I'm worried about what that means for all of us, maybe you think it hasn't.

I see my mates (those who aren't on pretty good salaries) struggle; I see NZ rank amongst the worst for hosing affordability amongst the OECD (and well beyond multiples what the World Bank [or whoever it is] deems affordable); I read headlines about prices up another 30% in a year; I read articles about a young couple who finally "managed to buy a house in Morrinsville" and think - how tf have we enabled a situation where this is this newsworthy?

So to be honest, apart from journalistic integrity, I don't really think it makes much of a difference whether some stats in the article are from parties who may or may not have an agenda. We've got a problem and the writing is on the wall! Broadly speaking, I also don't think that this is that contentious even if you did happen to disagree. More contentious is how we go about fixing it.

Of course I agree that home ownership is more likely in a DINK situation. My interpretation of your posts on this (possibly incorrect) was that you were using this subset of the population as an example of "good planning" in terms of how home ownership is still achievable.