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newbietrader
31-01-2012, 10:58 PM
I am thinking of buying a 2 bedroom unit property for myself. I'm based in Auckland. Should I wait ? When is the good time to start looking?

Thanks
Andrew

lou
01-02-2012, 06:29 AM
Go for it.

Blendy
02-02-2012, 03:58 AM
just go for it. We recently bought a 2 bedroom unit in auckland and there are not that many around, and when there are, good ones get snapped up at seemingly 'any' price. I was involved in some ridiculous outbidding pricing and was amazed at how much people were prepared to pay. Anyway, ended up with a nice place at a good price and was already tenanted so instant income.

I spent a lot of time comparing inner city apartments to suburban units - suburbs won - they are more reliable rentals and no body corp fees, plus you also get potential capital value gain on the land as well. Good luck with your hunt!

newbietrader
02-02-2012, 08:24 PM
Thanks for your input. :)

Blendy, as for your 2 bedroom unit..what is the price you paid if you don't mind ?

thanks again

Blendy
04-02-2012, 07:21 PM
under $350k

AMR
05-02-2012, 08:29 AM
Go for it. Best time to start was really two years ago.

Halebop
05-02-2012, 09:19 AM
All the pundits are saying that they'll be a property shortage in Auckland soon due to:

1. Auck Population growing at 20%(?) per year

Auckland would be adding 300,000 people this year at this rate, which clearly couldn't work. Projections have current growth at 1.6% per annum, falling to 0.7% per annum over the next 40 years. 1.6% is plenty, equating to roughly 24,000 net new bodies in the next year.

I'm not a fan of property but my girlfriend owns mortgage free residential investment properties here and overseas, concentrating on cash flow. Her furnished studio apartments here in Auckland are well located (She stays away from Hobson Street, ANZAC Avenue, Upper Queen Street). Occupancy has been a fraction off 100% over the last 3 years, she has slowly allowed herself to a bit under-rented but has still managed around 10% rental growth in 3 years and the ones she bought just post GFC - 2008 and 2009 - are showing an average 23% capital growth on valuation. Tenants are mostly 'first job' university graduates - both asian and european - in their early-mid 20's - reflecting the front end of the relative demographic bubbble of Gen Y. As a generalisation girls have proved more reliable than boys (Tidier, paying on time) but require a little more assistance early on (How do I get the oven working/dishwasher/washing machine/microwave clock working? etc) and are more likely to call if there is a problem (My girlfriend sees this as a benefit because she maintains the units to a higher standard than competitors which shows through in the occupancy). Net yields after all expenses at time of purchase have generally been around 8%. Most poignantly, my girlfriend treats it as a business and not a property investment. Active management and engagement with tenants appears to pay dividends (literally).

While people will continue to make money in property from 'special situations' - redevelopment, distressed vendors etc, for the most part yields are too awful to justify the sort of capital value increases seen in the past. I'm also suspicious that markets will force governments to increase interest rates at some point, and this may make cash flow for mortgaged investors unproductive.

Demographically two bedroom units in an urban market would be a good choice - for younger demographics it's what they can afford in order to get into the property market, some Baby Boomers will downsize to this sort of property in order to release capital for retirement and the older 'sausage block' units don't have the leaky building stigma.

voltage
05-02-2012, 09:46 AM
I am thinking exactly the same but look at the cost now of a 2 bed unit close to city - prob at least $400000

TEOTIAWKI
06-02-2012, 09:28 AM
You can get a good, low maintenance brick & tile unit on the city fringe (mt albert, onehunga, sandringham) where there is high rental demand for $350k and under. You might want to speak with a real estate salesperson, preferably one that deals with investment properties, and is willing to send a bit of time with a buyer.

Pumice
14-02-2012, 10:53 PM
The Most Overpriced Housing Markets In The Developed World

http://www.businessinsider.com/the-most-overpriced-housing-markets-in-the-developed-world-2012-2?op=1

Most OECD countries have experienced an inflating home price bubble from the first quarter of 2001 through the fourth quarter of 2006. But many have yet to see their bubbles burst.

Torsten Slok, chief international economist at Deutsche Bank Securities, has a new report examining global home prices.

Specifically, he looks at the relative valuation of housing markets as measured by price/rent and price/income and compares those ratios to historical long-run averages.

Slok argues that home prices in many countries in the developed world are still overvalued. Across the Euro area, home prices are still overvalued by 14 percent.

We ranked the countries by the average over- / under-valuation of home prices relative to rent and income.



NZ & Aus are ranked quite highly. of course if you own a house/rental you will probably disagree with this article and if you dont own, you will likely agree.
NZ house prices dont seem to be dropping, Aus houses certainly are.

Pumice
14-02-2012, 10:53 PM
The Most Overpriced Housing Markets In The Developed World

http://www.businessinsider.com/the-most-overpriced-housing-markets-in-the-developed-world-2012-2?op=1

Most OECD countries have experienced an inflating home price bubble from the first quarter of 2001 through the fourth quarter of 2006. But many have yet to see their bubbles burst.

Torsten Slok, chief international economist at Deutsche Bank Securities, has a new report examining global home prices.

Specifically, he looks at the relative valuation of housing markets as measured by price/rent and price/income and compares those ratios to historical long-run averages.

Slok argues that home prices in many countries in the developed world are still overvalued. Across the Euro area, home prices are still overvalued by 14 percent.

We ranked the countries by the average over- / under-valuation of home prices relative to rent and income.



NZ & Aus are ranked quite highly. of course if you own a house/rental you will probably disagree with this article and if you dont own, you will likely agree.
NZ house prices dont seem to be dropping, Aus houses certainly are.

duncan macgregor
18-02-2012, 07:48 AM
Never a bad time to buy property, only sometimes a time is better than others. Never pay rent if you really want to get a head in this life. Think about it how many rich people do you know that dont own property?. All the property that I bought and sold over the years, not one ever made a loss, most in fact more than doubled in price in a short space of time. Beats the volatility of a crumbling monetry system where all you might have left is material assets. The compliance cost escalation will increase the price of potential new properties at much greater rate than inflation so get in fast dont bother timing the market at this stage. Macdunk

HIDDENGEM
18-02-2012, 10:19 PM
After waiting so long I also decided to buy my first home (three bed rooms). I thought price will come down. As long as value doesn’t fall and interest rate stays in a comfortable level I will be OK. There is a risk in any type of investment. Don’t know what will happen to property market when baby boomers retire.

lou
19-02-2012, 06:11 AM
After waiting so long I also decided to buy my first home (three bed rooms). I thought price will come down. As long as value doesn’t fall and interest rate stays in a comfortable level I will be OK.There is a risk in any type of investment.Don’t know what will happen to property market when baby boomers retire.


You have already seen it to some extent, with the fall in holiday homes. The second thing you will see is a trade down of larger homes into easy care smaller homes.

fungus pudding
19-02-2012, 08:35 AM
You have already seen it to some extent, with the fall in holiday homes. The second thing you will see is a trade down of larger homes into easy care smaller homes.

I'm not so sure the fall in holiday homes, and sections in holiday hot-spots even moreso, down to baby-boomers. Perhaps that's a reflection of the general economy? Logic would say that the increasing number of retirees would increase demand for holiday housing.

777
19-02-2012, 09:51 AM
So which one of you posters did this deal?

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10786463

newbietrader
19-02-2012, 10:33 AM
I have decided to wait ...not sure when. It depends on the greeks whether bankruptcy is the only option for them. I don't know what would happen to the financial market and more importantly, the interest rate.
If there is no domino effect after the bankruptcy, or even there is one, I will wait until financial market to settle down before I commit myself to it. Thanks for the feedback.

lissica
20-02-2012, 06:21 PM
Never pay rent if you really want to get a head in this life.

I would have thought a better way to get ahead was to pay rental for your PPOR, and to buy an investment property.

You can't make any tax deductions on the place you live in, unless you have a home office for business.

skid
26-02-2012, 07:59 AM
In other words -take on heaps of debt,and depend on the share market for your financial survival.

duncan macgregor
27-02-2012, 07:29 AM
In other words -take on heaps of debt,and depend on the share market for your financial survival. That is the ultimate gamble in a money market that is in turmoil. The only thing you can be sure about is that if you dont own material assets when the money market goes under you will own nothing at all. Govt gets voted in by promising the most people more things at the cost of future generations. Its hardly the answer to continued prosperity. I foresee monetry collapse in the future, where new systems will replace this short sighted crazy system of self interest and borrowing. Property is the only safe long term investment at least you will never end up destitute. Macdunk

fungus pudding
27-02-2012, 04:04 PM
That is the ultimate gamble in a money market that is in turmoil. The only thing you can be sure about is that if you dont own material assets when the money market goes under you will own nothing at all. Govt gets voted in by promising the most people more things at the cost of future generations. Its hardly the answer to continued prosperity. I foresee monetry collapse in the future, where new systems will replace this short sighted crazy system of self interest and borrowing. Property is the only safe long term investment at least you will never end up destitute. Macdunk


Unless of course dropping values wipe out your equity, which has been the downfall of many a property investor in a downturn.

duncan macgregor
27-02-2012, 05:48 PM
Unless of course dropping values wipe out your equity, which has been the downfall of many a property investor in a downturn. Fungus my old mate when it all hits the fan you only own what you have paid for at that time, and what material assets you own outright, everything else is nothing. I predict a major upheaval in the money market in the short to medium term. If you see it otherwise well good luck, I think you might need it. Property investors that have gone under and will go under in the future are the greedy ones coming a gutser owing to much debt. The smart ones never accumulate to much debt and ride the small downtrends and sell in the highs. Macdunk

fungus pudding
28-02-2012, 06:23 AM
Fungus my old mate when it all hits the fan you only own what you have paid for at that time, and what material assets you own outright, everything else is nothing. I predict a major upheaval in the money market in the short to medium term. If you see it otherwise well good luck, I think you might need it. Property investors that have gone under and will go under in the future are the greedy ones coming a gutser owing to much debt. The smart ones never accumulate to much debt and ride the small downtrends and sell in the highs. Macdunk

You are right. That's why I am a full time property investor and have been for many years, although I've long since dropped residential, which I consider to be about the worst investment possible at present. My comments refer to those investors who build large portfolios with less than 20 - 25% equity. And I mean real equity - not jacked up 'user friendly' valuations etc. It's dead easy to get wiped out in a market drop if the real equity margins aren't sensible.

OldRider
25-09-2013, 06:51 AM
Interesting viewpoints from overseas

http://www.theage.com.au/business/world-business/facing-a-housing-bubble-new-zealand-may-have-the-answer-20130924-2uaxj.html

Valuegrowth
26-09-2013, 07:08 PM
There may be plenty of alternative investment opportunities globally in all types of markets such as follows.


Undervalued currencies
Undervalued stocks
Undervalued commodities including emerging commodities
Undervalued other assets
Out of favour sectors, stocks, commodities and currencies


Some companies may have hidden assets in addition to their core businesses. It is time to rotate markets, currencies, stocks and commodities to get above average returns in the coming years and coming decade. We may have plenty of opportunities in frontier, emerging and developed markets in the coming decade provided we do some research.


As I said before stock, commodity and currency markets are not dead.
Some may be good in property market. Still they can make mistakes. It is same in other assets. Stocks can give us some of the biggest gain in the long run provided we pick winning stocks with more than ten bagger characteristics. In the coming decade some simple businesses and boring businesses will shine globally due to middle class populations in Asia and Africa.


Remember in some period bull markets in assets will not end easily. We saw bull markets in properties, stocks in some countries up to now. We may see bull markets for those assets in some other markets and it is time to identify those markets before others. There may be bull markets in some markets in Asia, South America or Europe in 2014.


My ideas are not a recommendation to either buy or sell any property,security, commodity or currency. Please do your own research prior to making any investment decisions.

George
12-11-2013, 06:21 AM
Since this thread started property has risen a lot so with the new LVR restrictions in place, is this the catalyst which will slow or stop this market?
.

JBmurc
13-11-2013, 07:56 PM
Since this thread started property has risen a lot so with the new LVR restrictions in place, is this the catalyst which will slow or stop this market?
.


YES I think it will

In4a$
14-11-2013, 07:20 AM
Good to see you have brought a home HIDDENGEM . You cant go wrong. Focus on reducing the mortgage and in 10 years time or sooner you will be so much better off. Lucky you found one that wasnt snapped up by an investor.

Harvey Specter
15-11-2013, 04:46 PM
Since this thread started property has risen a lot so with the new LVR restrictions in place, is this the catalyst which will slow or stop this market?
.


YES I think it willI just sold my apartment in less than a day (from email to agent to conditional contract in 5 hours) for more than I was expecting. Still people out there with no problem getting finance.

But since I sold, I hope the market doesn't skyrocket (more than the NZX). I have a PPOR so am still overweight in property

Joshuatree
15-11-2013, 06:09 PM
Harvey you are a perfect candidate to share your thoughts on the "Aftermarket Lounge Thread". Mix a wallbanger relax and kick back with your "genuine lazy boy" and tell us about your first? PPOR and what it is , and is it painful, peculiar, poised and what was the point of difference about your apartment that drew such feverish buying e.g. what famous (in nz ) Mayor or MVT had an Affair There….; Did your cousin Banksie (english Graffitti Artist} leave a pic under the flush box. The lounge is palace to relax and use your ImagiNatiOn :0

Bobcat.
20-12-2013, 09:22 PM
The best time to buy <property, blue-chip stocks, precious metals, etc> is when they are most hated.

Is property hated? No. Is it even out of favour? Not enough for my liking.

skid
21-12-2013, 10:36 AM
Trying to think of when it was last ''hated''and what the price level was at that time.
The big issue to my eyes is overseas investment--to me,its becoming obvious that houses (especially in Auckland area)are getting well past the normal Kiwi affordability range--but that overseas buyer situation makes it a difficult one to read.
Im pretty overweight in property,but each time I think about selling the issue of what I would do with the proceeds stops me in my tracks(Share market is getting dangerously overbought IMO--banks dont pay much and are not nearly as safe as most think if things go pear shaped)

fungus pudding
21-12-2013, 01:00 PM
The best time to buy <property, blue-chip stocks, precious metals, etc> is when they are most hated.

Is property hated? No. Is it even out of favour? Not enough for my liking.


The best time to buy property is when interest rates are high. Sell when they are low - or never.

fungus pudding
21-12-2013, 01:00 PM
The best time to buy <property, blue-chip stocks, precious metals, etc> is when they are most hated.

Is property hated? No. Is it even out of favour? Not enough for my liking.


The best time to buy property is when interest rates are high. Sell when they are low - or never.

JBmurc
21-12-2013, 01:31 PM
Buyers of property esp main centre's be mad to buy currently esp the ones with low deposits ...higher rates are coming getting the 400-600k load will end up a noose round their necks @ 7-9% rates ...

In4a$
27-12-2013, 10:16 AM
After waiting so long I also decided to buy my first home (three bed rooms). I thought price will come down. As long as value doesn’t fall and interest rate stays in a comfortable level I will be OK.There is a risk in any type of investment.Don’t know what will happen to property market when baby boomers retire.

You cant go wrong Buying your own home, prices go up and down but over 10years you will always be better off than renting. Get mortage free and you are home laughing.
Worst thing I reckon for house prices is the greedy investors buying rentals, often paying more than the average first home owner can afford, they have an ongoing interest in boosting house prices and rental rates, I used to be one but my concience got the better of me and I sold, for the last 15 years been concentrating on shares.

JBmurc
23-01-2014, 12:45 PM
You cant go wrong Buying your own home, prices go up and down but over 10years you will always be better off than renting. Get mortage free and you are home laughing.
Worst thing I reckon for house prices is the greedy investors buying rentals, often paying more than the average first home owner can afford, they have an ongoing interest in boosting house prices and rental rates, I used to be one but my concience got the better of me and I sold, for the last 15 years been concentrating on shares.

Well you can go wrong if you buy property thinking that it will guaranteed you wealth...and buying that house well above your budget but because rates are low ......median NZ income Vs average house price would be one of the worst in western nations ... how buying thinking property will return 10% p.a av over the next decade are really dreaming or are they counting on foreign investors ? (talk about pushing kiwi's out of the market for the sake of making a profit)

In4a$
07-02-2014, 07:21 PM
Well you can go wrong if you buy property thinking that it will guaranteed you wealth...and buying that house well above your budget but because rates are low ......median NZ income Vs average house price would be one of the worst in western nations ... how buying thinking property will return 10% p.a av over the next decade are really dreaming or are they counting on foreign investors ? (talk about pushing kiwi's out of the market for the sake of making a profit)
I was talking about buying as a home. Not a rental. Home ownership is the best investment you can make, buying rentals is not. I agree jbmurc, govt needs to do something to stop these investors pushinv kiwi 1st home owners out of the market.

In4a$
07-02-2014, 07:29 PM
For those that think rental property is a good investment, work out what return you would have made on AIA ( akld airport) shares if reinvested the dividends over last 10 years. Yeap, about 400%, hassle free. Buy a few extras in the occasional price dips and u would have done really welll, and that rental you brought would be owned by some young family, instead of paying some landlord an exhorbanent amount of rent each week. They would be living their own kiwi dream.

fergus
27-04-2014, 06:51 AM
Well you can go wrong if you buy property thinking that it will guaranteed you wealth...and buying that house well above your budget but because rates are low ......median NZ income Vs average house price would be one of the worst in western nations ... how buying thinking property will return 10% p.a av over the next decade are really dreaming or are they counting on foreign investors ? (talk about pushing kiwi's out of the market for the sake of making a profit) I have owned properties in NZ for nearly fifty years which have all increased in value by at least 10% per year. In most instances tenants paid them off for me. It was the dumb investors road to riches. First home buyers should get the GST content of their first new home back and added to their deposit. On resale of the property they then should be forced to pay back the gst on the resale value. That would cost nothing in the long term and solve the first home buyer problem. Fergus

fungus pudding
27-04-2014, 07:16 AM
I have owned properties in NZ for nearly fifty years which have all increased in value by at least 10% per year. In most instances tenants paid them off for me. It was the dumb investors road to riches. First home buyers should get the GST content of their first new home back and added to their deposit. On resale of the property they then should be forced to pay back the gst on the resale value. That would cost nothing in the long term and solve the first home buyer problem. Fergus

And increase the price of houses to the buyer, as will any similar scheme. (Give each first home buyer $50,000 and watch prices shoot up by $50,000) Prices settle to meet the average affordable weekly outgoings. Always. Consider the difference if interest rates were 15% compared to prices if interest was 1%. (your scheme is worse - it's an interest free loan)The best time to buy in the last 30 years was when interest was 24%. High outgoings, but small debt. The golden rule - interest rates and commodity prices are the opposite ends of a see-saw.

JBmurc
27-04-2014, 09:48 AM
I have owned properties in NZ for nearly fifty years which have all increased in value by at least 10% per year. In most instances tenants paid them off for me. It was the dumb investors road to riches. First home buyers should get the GST content of their first new home back and added to their deposit. On resale of the property they then should be forced to pay back the gst on the resale value. That would cost nothing in the long term and solve the first home buyer problem. Fergus


Why I don't think we'll see the NZ property market during the next 30yrs anything like the last 30yrs is the growing gap in personal incomes to house values 16yrs ago I could buy a couple of average priced 3brm Invercargill homes from my Gross income....today I'd need to use nearly two years of my increased gross income just to buy one of the exact same homes ..so for me I'm 4-5 times worst off..( And I work in the export sectors / backbone of the economy)

Until NZ incomes grow I can't see the average income earner driving the property values higher anything like the last 30yrs

fergus
28-04-2014, 07:12 PM
Why I don't think we'll see the NZ property market during the next 30yrs anything like the last 30yrs is the growing gap in personal incomes to house values 16yrs ago I could buy a couple of average priced 3brm Invercargill homes from my Gross income....today I'd need to use nearly two years of my increased gross income just to buy one of the exact same homes ..so for me I'm 4-5 times worst off..( And I work in the export sectors / backbone of the economy)

Until NZ incomes grow I can't see the average income earner driving the property values higher anything like the last 30yrsdon't you think the difference is the 15% gst tax plus the ridiculous compliance costs incurred before you even stick a spade in the ground. I would venture to speculate that in comparison to thirty years ago that alone raises the cost of a new house by at least thirty pc. Deducting that thirty pc would bring back in line what a house should cost. Fergus

neopoleII
30-04-2014, 07:15 PM
just had a look at property prices in USA.
plugged in $100 k California and got......
http://www.century21.com/property/8225-tamarack-s-california-city-ca-93505-CBR17676276
then looked at trademe and $100 k got ....
http://www.trademe.co.nz/property/residential-property-for-sale/auction-633135338.htm

the sad part is..... the USA house was one of 10s of 1000s at this price range, and the NZ one, was one of a handful.

what i noticed is that NZ housing is very expensive full stop.
and we have only 4million folks!

something is very wrong.......
even our minimum wage is a lot higher too.
compared to the rest of the world....... we are an expensive empty country with a serious property affordability issue.

fergus
03-05-2014, 07:30 PM
just had a look at property prices in USA.
plugged in $100 k California and got......
http://www.century21.com/property/8225-tamarack-s-california-city-ca-93505-CBR17676276
then looked at trademe and $100 k got ....
http://www.trademe.co.nz/property/residential-property-for-sale/auction-633135338.htm

the sad part is..... the USA house was one of 10s of 1000s at this price range, and the NZ one, was one of a handful.

what i noticed is that NZ housing is very expensive full stop.
and we have only 4million folks!

something is very wrong.......
even our minimum wage is a lot higher too.
compared to the rest of the world....... we are an expensive empty country with a serious property affordability issue. The price of compliance plus the 15% gst on the whole package plus the ridiculous scaffold requirements plus the insulation that they don't insist on in other countries. I could carry on bleating about the crazy building code due to the leaky homes debacle but what is the point. I would venture to say that NZ builders are prone to going bankrupt more so than any other business venture. Blame GST and your tax system, then blame the incompetent people who devise the building code. The poor builders are caught between a rock and a hard place. Fergus

neopoleII
05-05-2014, 07:14 PM
heres another example of nice property at a good price in a rich country.
http://www.remax.de/Detached-Family-House-For-Sale-Loitz_330491001-31
while here in NZ we spend our income on servicing huge mortgages or rents on average houses in an empty country.
im guessing the owners of the house in this link earn good money and have plenty of dosh left to enjoy a real life.
guess thats why they have a strong manufacturing base..... the locals have money to spend on things...... creating employment.

the more I search 100k houses in the world, the more I realise there is a serious problem in NZ and we are in a balloon, not a bubble.
or......... NZ is the best country in the world and everyone is heading down here to escape the "rich countries"
I guess I am missing something.

skeet
22-05-2014, 04:33 PM
I just bought my first home with my fiancé. $405k in Halswell, deposit just under the 20%, including about 32k Kiwisaver. Managed to get the fee wiped for being under the 20% and they have given us $1500 for legal fees. Locked in a interest rate for 2 years, and some on floating that we plan to wipe off within the next two years.

Overall based on my experience there isn't a housing crisis in Chch. We looked at 5-6 houses in total, made an offer on one that was accepted on the same day. All within a month of deciding we wanted to buy a house. Once the offer confirmed we have had a few dramas with Lim etc but nothing too unexpected.

I guess our experience isn't the norm, I have a friend that has been to 66 open homes so far!

winner69
24-05-2014, 12:18 PM
Some interesting charts

http://www.nbr.co.nz/article/housing-crisis-or-property-bubble-what-does-data-tell-us-dc-15661

fergus
26-05-2014, 01:13 PM
heres another example of nice property at a good price in a rich country.
http://www.remax.de/Detached-Family-House-For-Sale-Loitz_330491001-31
while here in NZ we spend our income on servicing huge mortgages or rents on average houses in an empty country.
im guessing the owners of the house in this link earn good money and have plenty of dosh left to enjoy a real life.
guess thats why they have a strong manufacturing base..... the locals have money to spend on things...... creating employment.

the more I search 100k houses in the world, the more I realise there is a serious problem in NZ and we are in a balloon, not a bubble.
or......... NZ is the best country in the world and everyone is heading down here to escape the "rich countries"
I guess I am missing something. What you must take into account is you cant compare oranges with apples, when comparing house prices in different countries . Some countries have houses hundreds of years old still in great condition, we don't. Most countries don't place a 15% tax on everything before it gets built we do. We build houses to last a hundred years, other countries build houses that last centuries. I can buy wooden garden manufactured furniture cheaper than I can buy the timber to make it. Simple solution to fix the problem is a new first home should be GST free paid back at change of ownership with that written into the title. That would cost nothing in the end, with the GOVT slightly better off with a higher GST take at the point of sale. The building code in NZ has been over the years devised and amended by idiots, but I wont go into that at this point. FERGUS

GTM 3442
27-05-2014, 12:03 AM
Simple solution to fix the problem is a new first home should be GST free paid back at change of ownership with that written into the title. That would cost nothing in the end, with the GOVT slightly better off with a higher GST take at the point of sale. FERGUS

Out of curiosity, how would it cost nothing? The last time I paid nothing for something, it ended up costing me quite a bit of something.

Also out of curiosity, how would the GST be higher at the point of sale?

And because I'm having a fit of naivety, lots of governments have tried lots of things to "fix" their housing markets. Not a lot of them seem to have worked. In fact I think you could count the successful ones on the fingers of no hands.

Nobody seems to have tried building lots of houses - so that supply better matches demand. Can someone please explain why it's not that simple. (simple language please)

fergus
27-05-2014, 11:46 AM
Out of curiosity, how would it cost nothing? The last time I paid nothing for something, it ended up costing me quite a bit of something.

Also out of curiosity, how would the GST be higher at the point of sale?

And because I'm having a fit of naivety, lots of governments have tried lots of things to "fix" their housing markets. Not a lot of them seem to have worked. In fact I think you could count the successful ones on the fingers of no hands.

It would cost the GOVT nothing simply to add the gst content on to the deposit of a first home buyer simply because the house would not have been built in the first place and they would eventually get the gst back at the later point of sale. the administration costs would be minimal with the gst content amount owed be written into the title. New houses new owners more houses less competition cheaper houses. The higher gst sell price down the track that the govt got back would make it a good investment for home owners and the govt. To simple I suppose they don't have the brains to fix the problem. FERGUS

GTM 3442
27-05-2014, 04:04 PM
It would cost the GOVT nothing simply to add the gst content on to the deposit of a first home buyer simply because the house would not have been built in the first place and they would eventually get the gst back at the later point of sale. the administration costs would be minimal with the gst content amount owed be written into the title. New houses new owners more houses less competition cheaper houses. The higher gst sell price down the track that the govt got back would make it a good investment for home owners and the govt. To simple I suppose they don't have the brains to fix the problem. FERGUS

Well, if you say so.

Personally, my opinion is that when you start fiddling with the tax system, you automatically create unintended consequences. Lots of unintended consequences.

And that those unintended consequences usually involve lawyers and accountants designing ownership structures to exploit those unintended consequences.

Resulting in a somewhat reduced GST take. . .