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  1. #151
    FEAR n GREED JBmurc's Avatar
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    Quote Originally Posted by SBQ View Post
    Even if you factor the statistical measure with the bell curve, no matter which part of the bell, the results is so compelling that NZ is so far out of touch in affordability or what you get in a house.

    Another figure to look at is land prices for empty sections. Here in Christchurch we're looking near $300,000 for 600m2 size sections in new sub-divisions.

    Many years ago I remember on talk radio talking about some overseas celebrity visiting NZ that made a statement saying "NZ is a rip-off place" and I think the public kinda took offense to the person's statement. But there was some merit to the person's claim. I suppose when NZ residents hear that kind of negativity, they can't give any other excuse or a way to change it so they come back with remarks like "Well if you don't like NZ you don't have to visit again etc.."
    Yes been looking over at Utah state ... looks just like one HUGE Central Otago but with much cheaper property
    People don't have ideas, ideas have people

  2. #152
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    Quote Originally Posted by JBmurc View Post
    Yes been looking over at Utah state ... looks just like one HUGE Central Otago but with much cheaper property
    Yeah, but look what the poor buyers get for a president.

  3. #153
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    Quote Originally Posted by fungus pudding View Post
    Yeah, but look what the poor buyers get for a president.
    LOL yes and we have Comrade Cindy .. polar opposites..
    People don't have ideas, ideas have people

  4. #154
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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.

  5. #155
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    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.
    Last edited by Aaron; 20-01-2020 at 03:45 PM.

  6. #156
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    Quote Originally Posted by Aaron View Post
    Not sure which would be worse low interest rates and high house prices or high interest rates and low house prices.
    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'.
    Last edited by fungus pudding; 20-01-2020 at 04:29 PM.

  7. #157
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    Quote Originally Posted by fungus pudding View Post
    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'.
    Agreed but will we ever have a chance to invest in a less risky time as central banks will only lower interest rates and this could go on for many years.

  8. #158
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    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
    Last edited by Bjauck; 21-01-2020 at 09:01 AM.

  9. #159
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    Quote Originally Posted by Aaron View Post
    Agreed but will we ever have a chance to invest in a less risky time as central banks will only lower interest rates and this could go on for many years.
    Rates will almost certainly stay around current low levels for foreseeable future, but the foreseeable future for me currently is shorter than the typical home mortgage.

  10. #160
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    Quote Originally Posted by Bjauck View Post
    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
    ....
    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.

  11. #161
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    Quote Originally Posted by artemis View Post
    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/
    Last edited by Bjauck; 21-01-2020 at 02:38 PM.

  12. #162
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    Quote Originally Posted by Bjauck View Post
    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.

  13. #163
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    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.
    Last edited by Bjauck; Yesterday at 09:15 AM.

  14. #164
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    Doesn't seem like much CGT for all those audits
    https://www.stuff.co.nz/business/118...3+January+2020

  15. #165
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    Quote Originally Posted by kiora View Post
    Doesn't seem like much CGT for all those audits
    https://www.stuff.co.nz/business/118...3+January+2020
    $12.5mill taxes or $37.8mill in profits (assuming the top tax rate) possibly closer to $50mill. assuming an average of 25% tax rate for one year.

    Better than a kick in the pants.

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