$37 Million a week

[Aaron]

The $4billion in the article refers generically to accommodation supplements and obviously includes a while lot more than the Accommodation Supplement. As a minimum it includes subsidised social housing rent and there are other housing or housing related subsidies as well. Exactly what Mr Hickey did not specify but HUD reports regularly on them and he is probably about right.

As for other government transfers not being relevant, you brought up other businesses where clients are subsidise. Check out Working for Families, childcare subsidies, TAS, employer subsides for workers and more. As an example private ECEs not only receive funding from the government but their clients can also qualify for the childcare subsidy. A lot happens under the radar.

Working For Families is not directed at one area of spending or industry. It can be for school uniforms, food or whatever, I'll have to admit I don't know what TAS is, subsidies for workers are generally designed to get people into work rather making up a shortfall between wages and the cost of living, childcare subsidies, supporting schools, hospitals etc are generally in NZ not usually fully private industries. Health and education is still a public good paid for by and large by the taxpayer. I don't have a problem with that.

The accommodation supplement is a bit like a first home buyer grant, pouring more fuel on the fire to make up for the fact that monetary policy is driving up the price of housing beyond what a lot of people can afford.

A bit pointless arguing about monetary policy, if the central bank raised interest rates in response to rampant house price inflation they would get it in the neck from exporters and owners of property whose house price has gone down instead of up. An Arts student will always take the easy option as will most people.

It is how it all ends that I should be focusing on instead of whining about the apparent stupidity of it all. I guess it will happen as it has throughout history, hopefully we can avoid a war at the end of it all.

We have nearly run out of interest rates to cut and the amount of money printing is so large it is incomprehensible to the average joe bloggs like me but rather than prices rising it is more a matter of dollars becoming worthless. Any real asset will be an inflation hedge and debt will be an asset if monetary policy gets rid of it for you.

That is why I am looking to leverage up on a house purchase, although still holding on to the faint hope of a pull back or crash first as I am unsure what sort of property to buy. Why complain about a govt subsidised industry when you can join it.

Also still waiting to hear which party???

[artemis]

It is up to the renter or mortgagor what they spend any Accommodation Supplement on. Same as Working for Families.

[Logen Ninefingers]

Logen check out the latest blog here , especially the last paragraph .... supply still the issue ....https://croakingcassandra.com/2021/0...ally/#comments

If supply is ‘the issue’ and anything else mentioned is merely a distraction, then I am sure that everyone will be happy for interest rates to go up to 6 or 7 percent, where they should be. After all, interest rates are not the issue according to this article and many others.

[stoploss]

If supply is ‘the issue’ and anything else mentioned is merely a distraction, then I am sure that everyone will be happy for interest rates to go up to 6 or 7 percent, where they should be. After all, interest rates are not the issue according to this article and many others.

6 % fine with me , but how exactly is that going to improve the supply that is needed in the housing market ?

[Bjauck]

It is up to the renter or mortgagor what they spend any Accommodation Supplement on. Same as Working for Families.

I am not sure what the mechanics are for the Accommodation supplement. Although it is based on accommodation costs/income, if it is not paid directly to the Landlord or mortgagee then I guess that is theoretically correct.

I think that it is bizarre that "right-wingers" who support "flat taxes" do not campaign for investment returns from all assets classes (whether Shares, FIF, financial arrangements and term deposits or investor real estate) to be taxed at the same pro rata rate. Both "capital" gains and "income" gains should be taxed at the same rate.

The current NZ system puts tax burden on those assets that are used to produce greater employment for individuals (which is taxed) and net income.

[Aaron]

6 % fine with me , but how exactly is that going to improve the supply that is needed in the housing market ?

Interest rates have been dropping for the last 12 years and that obviously hasn't helped fixed supply but I would suggest letting interest rates rise might curb the magnificent capital gains we have been seeing lately and may curb some of the over enthusiastic demand. If only there was a way to let markets decide the cost of capital rather than a central planner.

[macduffy]

Interest rates have been dropping for the last 12 years and that obviously hasn't helped fixed supply but I would suggest letting interest rates rise might curb the magnificent capital gains we have been seeing lately and may curb some of the over enthusiastic demand. If only there was a way to let markets decide the cost of capital rather than a central planner.

Yes, letting interest rates rise might curb capital gains in housing but it would almost certainly put a lot of NZ exporters out of business as the higher rates caused enthusiastic demand for the NZD!

No easy answers.

[Aaron]

Yes, letting interest rates rise might curb capital gains in housing but it would almost certainly put a lot of NZ exporters out of business as the higher rates caused enthusiastic demand for the NZD!

No easy answers.

Agreed see post #51, I have come to the conclusion it will be more of the same until something breaks. Leverage will be my way to invest the trend as it should have been all my life. I suppose it is a matter how much debt is too much with low yields.

[Bjauck]

Agreed see post #51, I have come to the conclusion it will be more of the same until something breaks. Leverage will be my way to invest the trend as it should have been all my life. I suppose it is a matter how much debt is too much with low yields.

Inflated bubbles never burst: This time will be different?

[Aaron]

Inflated bubbles never burst: This time will be different?

Maybe there will be a currency crisis rather than a correction in asset prices? The money might disappear but real assets will remain. The end goal is inflation to clear the debt this means low interest rates while prices shoot up.

Also there is a global currency war, so the idea of a strong and stable currency has gone by the wayside as money printing is the easy answer to all the worlds problems.