NZ 1st homebuyers are ScReWeD...

[SBQ]

interesting information in your post. I am sure most households in English speaking countries have more invested in housing than in listed company shares.

Taking into account overseas ownership of NZX listed companies, do you think The ave NZer has at least 14 times as much net equity invested in housing as in NZX listed equities?

I guess we should also consider pension assets? American households would invest indirectly in stocks and shares via pension and investment plans. Nz is still a minnow with respect to pension funds and managed funds. A greater proportion of NZ pension and managed fund assets would also be invested off-shore.

How do we treat trust assets? NZ has a large number of family trusts. Would you count shares and real estate owned by a trust as part of the settlor’s assets, or divide them up equally between all of the discretionary beneficiaries?

Great response. I won't directly respond to FTG's reply because he misses my point, though I will say some of his figures don't address my previous question at all.

Since this thread is about how screwed 1st time home buyers are in NZ, i'm trying to get some meaningful data on the reasons why, maybe some basic simple observations like what % people in NZ hold their wealth in other assets instead of houses? Where do the top 10% of the richest in NZ sit and where to the rest, 90% of the population sit in terms of how they can invest?

The way I see it in NZ, it's very clear the top wealthiest (and let's include all those investment housing trusts because there are so many people that have their $ invested in these schemes) say 10% - how much of this segment can influence the house price in NZ? Because the way I see it is they've turned the NZ residential market into a stock market hype. Over in the US house prices nationally rose 11.6% - here in NZ we're getting close to 30%. What those people in 'that camp of owing the houses as investments' fail to see is the bulk of the price increase occurred for most of NZ population (a fair guess 80% of the total population is affected by the rapid house price rise?). There are hot spots in the US but no way does 80% of their total population is affected from say a 30% rise in housing prices. Even at 20% ? are there some figures we can dig?

Oh and let's not forget about the market manipulation factor. There was a time few years ago that the Jacinda assumed the house price rise in NZ was caused by foreigners buying up houses in NZ. So she imposed a foreign buyer's ban. If it's not these foreign wealthy people buying houses in NZ, then who else? Jacinda has mentioned earlier in the year that a high % of the buyers of houses in NZ were those in the 'already own 4 or 5 houses camp'. Let me ask again, do the top 5 or 10% people in America have an active role in influencing their house price market or do they have a MORE active role in investing the majority of their wealth in the US stock market? What i'm looking at is this 30% rise in NZ houses affects far more of the total NZ population than the 11.6% rise of houses in America affecting their population.

Investing for retirement? NZ has been slow in adopting such 401K schemes like in America, and therefore the size of the Kiwi Saver invested is a lot smaller per capita. Well it will be less because NZ income per capita is a lot less than in America; so when you look at the minimum 3% employer contribution, it's almost a waste of time for a person on $100K/year income. Also as I mentioned before, NZ's tax structure is unfavorable for Kiwi Saver vs buying another house that sees tax free capital gains after 10 years.

Perhaps i'm biased the wrong way. NZ is a small country, we should not be priding ourselves being wealthy as our house prices rocket out of control. We're exposing ourselves a huge amount of risk being tied in 1 asset. There needs to be a CGT on houses or some land tax in NZ and or take away the taxation of Kiwi Saver / PIE funds or do what they do in N. America by 'tax deferring' the gains until retirement for those superannuation schemes.

BTW, it was John Key's party that stopped investment in the NZ Superfund for many years. The opportunity cost lost was massive when i'm seeing the DOW near 35K.