Black Monday

[mike2020]

No just a headline at this stage, all the investors reading it will probably decide that means its a good time to get out there and start looking. Normal home buyers are still at each others throats this week just gone, give it a while.

[alokdhir]

Meanwhile my former neighbours, have sold their house (which has had 8 owners in the 20 years since it was placed on the section) moved into yet another family home which they plan to slap a coat of paint on, fix a few minor issues, and hock as soon as possible without being captured by IRD. That's okay according to government policy. Serial housing monogamists are welcome here.

IMHO trading in your own home is still better then trying to horde many homes thus depriving others from having one .

[alokdhir]

https://www.nzherald.co.nz/nz/invest...OBU26UL3N2V4Q/

Turning point for the property market?

It needed a shock like this to get people thinking and if prices start falling then its main job done ie to make people realise that both ways of price movement possible like is sharemarket .

At present property Investors think its only one way and that is up ...so if they find bank can loan then $ 1 million on their financials they start looking for a house little more then that as want to get maximum possible out of that leverage .

Where as in sharemarket if bank provides 70% margin lending a prudent investor only will use 35-45 % of it for safety against margin call

[artemis]

IMHO trading in your own home is still better then trying to horde many homes thus depriving others from having one .

You do realise there are thousands of homes for sale right now? More than 20,000 just on Trademe, many others listed elsewhere. New ones listed every day. Thousands in the affordable category. Plenty for the 'deprived' to choose from. Wonder why they are not buying them.

[alokdhir]

You do realise there are thousands of homes for sale right now? More than 20,000 just on Trademe, many others listed elsewhere. New ones listed every day. Thousands in the affordable category. Plenty for the 'deprived' to choose from. Wonder why they are not buying them.

Answer is simple ...as too many hoarders chasing up the prices thus making them out of reach of those people thus making them deprived ...IMHO

Though neither I am a property investor nor a first home buyer but I have always found our NZ housing market very one sided ...Housing should not be pure business or about money ...it effects the lives of people . This government intervention shows how important it can be to maintain peace and harmony in the society ...after all hope should be for all

[artemis]

Answer is simple ...as too many hoarders chasing up the prices thus making them out of reach of those people thus making them deprived ...IMHO

Though neither I am a property investor nor a first home buyer but I have always found our NZ housing market very one sided ...Housing should not be pure business or about money ...it effects the lives of people . This government intervention shows how important it can be to maintain peace and harmony in the society ...after all hope should be for all

Home ownership has always been out of reach of some households. That in itself doesn't make them 'deprived'.

Meanwhile thousands of first home buyers take out bank loans every single month. Maybe they built up Kiwisaver and savings, lived carefully, worked second jobs or overtime, upskilled, and kept their housing expectations on the low side.

[artemis]

...Housing should not be pure business or about money ...it effects the lives of people . This government intervention shows how important it can be to maintain peace and harmony in the society ...after all hope should be for all

Do you feel the same way about supermarkets? Or power companies?

No reason at all people in New Zealand can't set up charities or charitable businesses to provide food, housing or anything else. Or, since this is a share oriented site, invest in businesses that meet similar criteria.

But no need to expect others to do it, or even think that government intervention in commerce is a good thing.

[alokdhir]

Do you feel the same way about supermarkets? Or power companies?

No reason at all people in New Zealand can't set up charities or charitable businesses to provide food, housing or anything else. Or, since this is a share oriented site, invest in businesses that meet similar criteria.

But no need to expect others to do it, or even think that government intervention in commerce is a good thing.

Government is not intervening in commerce here ...Govt . is trying to make other investment areas rosier by reducing the appeal of investment property . I think in the previous set up it was a no brainer to choose investment property as best form of investment or shall I say leveraged investment as all perceived it to be risk free way to make money on borrowed money and that perception was right also under those rules . So it made sense to keeping bidding the price higher till it balances mortgage interest payments with rental income and other allowances thus pocketing the cool yearly long term capital gains for free . So when RBNZ reduces rates to help industry and economy and businesses it ends up reducing mortgage payments for investment properties too thus helping change the above equation in favour of further higher bidding on house prices and so on ....

Why this property investment was so popular ? Because it had no market associated risks like equity market / businesses etc so all piled on ...It was such because of distorted tax rules favouring it so now Govt is trying to adjust it so that it is one of the investment opportunities not THE ONE .

By adding costs of extra tax they want to change the above equation to make sure its no longer profitable to bid up house prices for investment purposes

I understand that this transition will hurt in the short term but people will find other areas of investment opportunities . Aim is that only to move people away from this way of creating wealth IMHO

[Ferg]

Why this property investment was so popular ? Because it had no market associated risks like equity market / businesses etc so all piled on

That is not true. There have been plenty of property price corrections.

...It was such because of distorted tax rules favouring it

Again, that is not true. It is a basic premise that if you spend money to make money then it is deductible. There is no distortion per se. It is normal business expenditure.

[Zaphod]

IMHO trading in your own home is still better then trying to horde many homes thus depriving others from having one .

Hording homes? I don't know of anyone doing that. Certainly amongst my colleagues, those that own multiple properties are providing fully-tenanted rental accommodation which are a necessary service in this market. Thus they are not depriving anyone of a home.