Yes been looking over at Utah state ... looks just like one HUGE Central Otago but with much cheaper property
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Another week; another housing unaffordability article;Another drop in NZ home ownership rate? The housing divide continues.
https://www.stuff.co.nz/business/118...ess-affordable
Good news for the tax efficient de facto retirement schemes for boomers, but bad news for first home buyers and home upsizers.
Not sure which would be worse low interest rates and high house prices or high interest rates and low house prices.
We have hindsight to know anyone buying in the 70s & 80s has had inflation to rapidly make the mortgage manageable in spite of the high interest rates.
From recent history we also know that buying a house has still generally been a very financially positive move.
https://www.rbnz.govt.nz/statistics/...e-price-values
https://www.rbnz.govt.nz/statistics/...ph-90-day-rate
I wonder if this will ever change or if there is a price that is too high or a yield too low (particularly in light of the additional costs being put on landlords).
At negative interest rates no asset price is too high and any yield above 0% would probably be acceptable.
Low interest rates make for the worst time to buy. Go mad when they are through the roof. If they drop your asset increases in value while your outgoings reduce. Buying when rates are low (and prices are high} is risky. If/when rates rise, your new asset value drops and the cost of ownership rises. Fungus's first law of economics. 'Interest rates and asset prices are the opposite ends of a see-saw'.
So much NZ household wealth comes from investment in land. With asset price inflation, as wealth inequality increases with current tax settings and wealth becomes concentrated in a small percentage of households, NZ will probably have to develop a strategy to reduce the social frictions.
The following is about to years old, so the situation is probably even more polarised now.
Oxfam report - Huge wealth gap in New Zealand where richest 1% own 28% of wealth
https://www.nzherald.co.nz/business/...ectid=11979151
Is Capital Gains Tax Really Dead?
https://www.stuff.co.nz/business/opi...ax-really-dead
Suggest take Oxfam reports with a big spoon of salt. They have an agenda. They, and many journalists that create the headlines, are regularly smacked by some who compare the base data Oxfam use (from the Credit Suisse highly regarded global wealth report) with the Oxfam conclusions. And the headlines.
Credit Suisse 2018 reports show that New Zealand’s wealth inequality declined from the previous year’s 72.3 Gini points to 70.8 Gini points. Don't see that in the headlines, probably not reported at all here.
Kool-Aid.
And even if the 28% is correct, Oxfam includes NZ billionaires from the Forbes annual list. Because it supports their agenda and keeps the donations rolling in.
Sure they have an agenda. Who doesn’t? Using the same facts and information, different people offer different conclusions. So we need to look at vested interests, what has been ignored and and who pays those that offer different conclusions.
One Oxfam agendum is to strive for a fairer allocation of resources. I wonder how NZ is faring in 2020.
The world is full of vested interests and Government policy is usually the result of the most powerful and influential vested interests. Suggest we should critique those who rubbish Oxfam too.
Oxfam answers some questions:
https://www.oxfam.org.nz/news-media/...uality-report/
Completely agree - a lot of the reports don't factor important variables and many can't be simply quantified in figures. Like how do you quantify a person's reason of living in NZ because the climate is better? How do you quantify the living comfort of a Canadian built home despite having a high carbon foot print?
An equally justifiable reason. Why is it at uni (well at the time I attended) the profs were out to fail everyone? I mean when I attended uni in Canada, having 50% of the students fail in finance classes was the norm. So what does that mean for the top 1% in the class? Why should they get better recognition? I feel this is the same argument how the media points a bad finger at the 1% owning a high % of wealth. Is it not they should be rewarded for their ability? How else do you address inequality because when I was grade school, I saw a lot of students that were not equal and simply didn't make the cut. It's a double standard we have in society ; ok for the poor to receive benefits and bash the rich, but when it comes to education, let's bash the weak and praise the top grads.
As far as CGT in NZ goes. Well our gov't will never be serious about it as long as they have a vested interest in real estate. Certainly not with NZ 1st and Winnie Peters. However, I often wonder why the TWG never considered options in implementing CGT in tranches? This is nothing and has been done in Canada for as long as I can remember. At times the CGT was 75% of the gain became taxable income. Then dropped to 50% of the gain becomes taxable. There's also exemptions to certain special assets. Even Bush made exemptions for US farmers to have their land exempt from CGT. I see NO reason why the NZ gov't couldn't do the same. Perhaps over 5 years implement the CGT SLOWLY so it doesn't have a hard impact on investments.
SBQ - I think I am on the same page as you in relation to a CGT. However I am not sure about the rest of your post. It seemed somewhat contradictory to me. I have to say I got lost when you said some students "were not equal." I agree that skill in a particular subject, academic ability and intellectual function is not the same for everyone.
Apart from on CGT, we may have to agree to disagree.
Doesn't seem like much CGT for all those audits
https://www.stuff.co.nz/business/118...3+January+2020