Presumably there has been plenty to encourage investment residential real estate as Auckland and NZ home ownership levels have been dropping for years.
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A good post BP that I totally agree with. My wife and I were talking about this yesterday when we drove through one of the lowest socio economic area here in Nelson yesterday, where she works and we have a rental property. Houses are old and many have not been maintained well but all sitting on large properties. The whole lot should be bulldozed and nice apartments built. The population in the area could easily be quadrupled and all withing easy walking distance to the town center. This could be repeated right around the country.
I do not agree with FP that home ownership is necessary for a stable society. Germany is a good example of a society where over 50% of the population rents and societies do not get more stable than Germany.
But a good interesting discussion on CGT.
Hi iceman. Yes redevelopment could happen but why doesn't it? Nelson district apparently has a lot more demand than supply going by recent media reports. Developers could start with buying up 2 or 3 properties to demolish and build. That costs, but it is the day job for developers and potentially lucrative.
What is stopping it?
Good question and applies to all of NZ. I think it is mainly due to attitudes. Kiwis seem to think of only expensive city center or waterfront properties when apartments are mentioned. In my old home country nearly all young families live in nice apartments and do not even dream of houses for first homes. This Kiwi attitude is partly to blame for our high property prices
I find it ridiculous when schemes like Kiwibuild aim to provide first home buyers with brand new housing. Just build a range of saleable houses, quality homes to tempt established home owners - whatever the market demands. Leave first home buyers to snap up the older housing stock that will result. They can improve and renovate them over time. That would improve housing stock at both ends of the market. There is huge demand from existing owners wanting to trade up; every extra build adds to the housing stock - so let's forget the rubbish about building 'affordable' homes. There could be plenty of them, if only we could get the existing owners to shift out and into something nice and new. And they would if such housing existed. The answer is in town planning.
About 60% of res bank lending is to existing home owners, and not for investment, three times as much as first home buyers. (Reserve Bank.) Doesn't say if the are trading up, down or just changing. Still nearly $4bill a month so a whole lot of buying going on.
Probably a decent number will be moving into retirement villages. And those on this site have a handle on those numbers, with a couple of operators indicating increases in enquiries and sales.
Even leaving retirement village units aside, developers are going to be more interested in upmarket builds rather than the likes of Kiwibuild which are limited on several fronts.
Maybe this is why
https://www.zerohedge.com/markets/gl...-shocking-rate
Inflation is absolutely essential to get rid of debt.
If you thought they could not reverse what they are doing would it be reasonable to think it is unsustainable? or like a ponzi scheme if it requires more and more people taking on more and more debt to sustain the people who were in first.
If it is unsustainable what will be the eventual consequences? Where do I invest?
I still think getting rid of targeted inflation and having actual price stability as a goal is a good idea even if it brings the Ponzi scheme to an end.
The world central bankers appear to have taken a page from the John Law school of economics.
Dont be too harsh. "Attitude" is also people's lives. Not everyone asked for a population explosion, its a little unfair to begrudge society for wanting a bit of space for the dog and a few tomatoes on a leafy street if that is how they grew up. In my experience, apartments here are unlivable long term. Pokey, scant noise insulation, expensive and that view will be built out. Developer greed? Poor planning? Probably both. Old East European apartments are way more salubrious and genuinely nice places to stay. I suspect attitudes to commute-free apartments would change if the value/space/livability equation changed.
NZ is growing at a moderate rate, while Auckland is growing at a reasonably fast rate. Given population increases in other parts of the world, I'd say we're not really at a point where I'd call it a population explosion.
At the end of the day though, New Zealanders need to get used to apartment living if they want to live within or close to city centres. If they don't want to live in one, there's still plenty of land available throughout the country. People need to adapt.