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  1. #191
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    Quote Originally Posted by SBQ View Post
    As I been saying all along. The demand is fueled by tax advantages (or lack of income tax) on housing investments. You know the people that have the $ and income that can borrow cheap money.

    In addition to a supply problem but the latter above is by far the #1 incentive bar none.
    These "tax advantages" are completely normal across most of the world including depreciation on real estate and no ring fencing. The ring fencing actually makes property investing less advantageous compared to business as you can deduct losses on business against your income. I think what you're trying to get to is no CGT. Well for most of those horrible investors, CGT doesn't matter, because they won't sell for decades or they'll just leave it to their children.

    You know the #1 problem is not investors, but supply. Saying otherwise is plain lying. There's 20000 people on HNZ waitlist and thousands in emergency housing and you're saying problem is there are people who provide rentals. Most of the investors took a step back to wait for government to reveal the new rules and houses are still flying off the shelves and prices rising.

    RMA should have been changed years ago to allow easier and cheaper development. There also needs to be a shift in NZ mentality to accept you can't grow a city without building apartment buildings.
    Last edited by peetter; 24-06-2021 at 11:53 AM.

  2. #192
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    https://www.google.com.au/amp/s/thes...as-lost/%3famp

    Bernard Hickey has nailed it.
    I agree there is zero future for many young Kiwis hoping to own a home here.
    The property market in NZ is an absolute discgrace.
    Last edited by ynot; 26-06-2021 at 02:08 PM.

  3. #193
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    Quote Originally Posted by SBQ View Post
    As I been saying all along. The demand is fueled by tax advantages (or lack of income tax) on housing investments. You know the people that have the $ and income that can borrow cheap money.

    In addition to a supply problem but the latter above is by far the #1 incentive bar none.
    It is only a supply problem. Nothing more

  4. #194
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    Quote Originally Posted by ynot View Post
    https://www.google.com.au/amp/s/thes...as-lost/%3famp

    Bernard Hickey has nailed it.
    I agree there is zero future for many young Kiwis hoping to own a home here.
    The property market in NZ is an absolute discgrace.
    Coupled with a complete lack of strategy to improve productivity or to create a high paying jobs, NZ's future is decidedly bleak.

  5. #195
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    Quote Originally Posted by ynot View Post
    https://www.google.com.au/amp/s/thes...as-lost/%3famp

    Bernard Hickey has nailed it.
    I agree there is zero future for many young Kiwis hoping to own a home here.
    The property market in NZ is an absolute discgrace.
    The societal flow on effects paints a bleak picture for NZ.

    Quote Originally Posted by fungus pudding View Post
    It is only a supply problem. Nothing more
    I believe this to be incorrect. The root cause is excess liquidity through money printing / low rates. For example, you could not have prices at current levels due to lack of supply, but no excess liquidity (i.e. even if there was a shortage of houses, there would be an even greater shortage of people that could afford a $1m mortgage at 7% interest). On the contrary, you can achieve current prices due to excess liquidity alone, without an associated true undersupply. If you need evidence of this look at the 2008 housing bust.
    Last edited by JohnnyTheHorse; 26-06-2021 at 02:44 PM.

  6. #196
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    Quote Originally Posted by JohnnyTheHorse View Post
    The root cause is excess liquidity through money printing / low rates.
    I agree with this statement. I would also say that debt is a large contributing factor. I mean, if banks did not grant such large loans it would stop the insane leveraging into this asset class. The house of cards will all come crashing down in the end.

  7. #197
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    Quote Originally Posted by JohnnyTheHorse View Post
    The societal flow on effects paints a bleak picture for NZ.



    I believe this to be incorrect. The root cause is excess liquidity through money printing / low rates. For example, you could not have prices at current levels due to lack of supply, but no excess liquidity (i.e. even if there was a shortage of houses, there would be an even greater shortage of people that could afford a $1m mortgage at 7% interest). On the contrary, you can achieve current prices due to excess liquidity alone, without an associated true undersupply. If you need evidence of this look at the 2008 housing bust.
    Young Kiwis wanting to own a home have nothing to loose by going to Aus and having a crack. Even if they were to be unfortunate enough to fail over there, they would be no worse of than if they had stayed here and paid $500 pw rent for the rest of their days.
    Anyway I believe if they try hard enough in Aus they will make it in the end. The opportunities for people prepared to work hard in Aus leave NZ a distant second in making a better life for yourself.
    I would not be surprised to see more Kiwis crossing the ditch soon enough.
    Last edited by ynot; 26-06-2021 at 03:07 PM.

  8. #198
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    Quote Originally Posted by peetter View Post
    These "tax advantages" are completely normal across most of the world including depreciation on real estate and no ring fencing. The ring fencing actually makes property investing less advantageous compared to business as you can deduct losses on business against your income. I think what you're trying to get to is no CGT. Well for most of those horrible investors, CGT doesn't matter, because they won't sell for decades or they'll just leave it to their children.

    You know the #1 problem is not investors, but supply. Saying otherwise is plain lying. There's 20000 people on HNZ waitlist and thousands in emergency housing and you're saying problem is there are people who provide rentals. Most of the investors took a step back to wait for government to reveal the new rules and houses are still flying off the shelves and prices rising.

    RMA should have been changed years ago to allow easier and cheaper development. There also needs to be a shift in NZ mentality to accept you can't grow a city without building apartment buildings.
    Investing in rental properties has ALWAYS been about the capital gain. You are incorrect - every other OECD nation deals with capital gains in a way by taxing it. NZ DOES NOT and if you read closely to what i've been saying, buying houses in NZ is still the best game in town because of the amount of capital gain.

    Read my links here in another thread which is discussed in parallel to this thread:

    https://www.sharetrader.co.nz/showth...l=1#post892227

    The important part is what I posted in quotes. Why? I say it's fueled by the behaviour of the people knowing that NZ does not tax long term capital gains on residential houses. It has nothing, absolutely nothing.. about the way rental properties can generate an income.

    But don't take my word for it, here's what Bernard Hickey said in ynot's post:

    That housing supply shortage was created by the three main pieces of legislation that now govern New Zealand: the 1989 Public Finance Act, the 1988 State Sector Act and the 1991 Resource Management Act. Collectively, they corralled councils and the government into prioritising public debt reduction and reducing public infrastructure spending. They drove the expansion of privately provided housing, especially rental housing when combined with easier credit and no capital gains tax.
    The latter about 'easier credit' I blame it on the behaviour aspect of investors. Owning 5 houses isn't enough and I know a family friend that is aiming to buy his 10th house before he retires.

    @ Zaphod: lack of productivity due to tax laws that disadvantage the working class and give the benefit to all those that own houses. What NZ has is the complete opposite of what Canada has where the middle working class get TAX FREE or deferred taxes on their investment savings plans. NZ's Kiwi Saver funds pay taxes, Canada's RRSP defers the taxes or there are tax free options like TFSA, RESP, RDSP, etc. While the wealthy, they lose those tax benefits when their incomes go past a higher point. They call it 'claw backs' on their CCP pension funds (ie NZ super).

    Who is going to disagree with Bernard Hickey?

  9. #199
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    Quote Originally Posted by SBQ View Post
    Investing in rental properties has ALWAYS been about the capital gain. You are incorrect - every other OECD nation deals with capital gains in a way by taxing it. NZ DOES NOT and if you read closely to what i've been saying, buying houses in NZ is still the best game in town because of the amount of capital gain.

    Read my links here in another thread which is discussed in parallel to this thread:

    https://www.sharetrader.co.nz/showth...l=1#post892227

    The important part is what I posted in quotes. Why? I say it's fueled by the behaviour of the people knowing that NZ does not tax long term capital gains on residential houses. It has nothing, absolutely nothing.. about the way rental properties can generate an income.

    But don't take my word for it, here's what Bernard Hickey said in ynot's post:



    The latter about 'easier credit' I blame it on the behaviour aspect of investors. Owning 5 houses isn't enough and I know a family friend that is aiming to buy his 10th house before he retires.

    @ Zaphod: lack of productivity due to tax laws that disadvantage the working class and give the benefit to all those that own houses. What NZ has is the complete opposite of what Canada has where the middle working class get TAX FREE or deferred taxes on their investment savings plans. NZ's Kiwi Saver funds pay taxes, Canada's RRSP defers the taxes or there are tax free options like TFSA, RESP, RDSP, etc. While the wealthy, they lose those tax benefits when their incomes go past a higher point. They call it 'claw backs' on their CCP pension funds (ie NZ super).

    Who is going to disagree with Bernard Hickey?

    Investing in houses is the best game in town almost anywhere. CGT hasn't changed that in any country. Even with tax free share investments and CGT on property, you'll never beat the property just because the leverage gives you better returns. Also tax free retirement fund gives you money when retired, so government doesn't have to give you back part of what you paid during working decades, but does nothing for your quality of life during your working years.

    There's no better way for low to middle class salary earner to get wealthy than property. Not everyone is capable to start business.

    I am all for CGT, it will change nothing... well something... share gains will be taxed.

  10. #200
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    Quote Originally Posted by SBQ View Post
    Investing in rental properties has ALWAYS been about the capital gain.
    Speak for yourself. It certainly wasn't for me - or others I know. When I began buying houses in the 1960s I never gave one thought to capital gain. I invested to build an income. Full stop. So did other landlords I got to know.

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