NZ 1st homebuyers are ScReWeD...

[SBQ]

Inflation running hot at 3.3%
All that money printing, profligate government spending, and what became basically a free money giveaway to borrowers at the expense of savers - it's all now coming home to roost.
Something has to be done about these idiots paying any old price for aging housing stock & then using said house as an ATM to fund their lifestyles - the behavior (mania) of these people is bringing the country to its knees and destroying the purchasing power of our dollar. The housing markets out-of-control irrational exuberance has lead the Reserve Bank to act in crazy and outrageous ways to defend it, slashing the OCR to the point where credit issuance was unleashing a tsunami of new money & people were viewing borrowings on the same footing as earnings.

Let's get some sanity restored and if some people suffer of the consequences of their own decisions, then they only have themselves to blame. If you are weak enough to join in a speculative mania and end up paying the piper, look in the mirror to see the culprit.

I sense your anger however, NZ has long gone sold off houses as commodity for profiteering a LONG time ago. I had a strong sense this was going to happen when I first arrived in 1997. How could one not see this? A country with no capital gains tax on houses, no controls on how many could buy houses? New taxes to discourage investments in more productive assets (ie share ownership). The game is clearly rigged in advantage for those investing into house a LONG time ago.

Here's a fact I read the other day. In America, the top 10% own 85% of the wealth in their stock markets. In NZ, what % of wealth do the top 10% own houses in NZ? Then you will understand why NZ will always be a low productive economy.

[fungus pudding]

I sense your anger however, NZ has long gone sold off houses as commodity for profiteering a LONG time ago. I had a strong sense this was going to happen when I first arrived in 1997. How could one not see this? A country with no capital gains tax on houses, no controls on how many could buy houses? New taxes to discourage investments in more productive assets (ie share ownership). The game is clearly rigged in advantage for those investing into house a LONG time ago.

Here's a fact I read the other day. In America, the top 10% own 85% of the wealth in their stock markets. In NZ, what % of wealth do the top 10% own houses in NZ? Then you will understand why NZ will always be a low productive economy.

"In NZ, what % of wealth do the top 10% own houses in NZ?" What in the name of Allah does that mean?

[Bjauck]

"In NZ, what % of wealth do the top 10% own houses in NZ?" What in the name of Allah does that mean?

I understood it well.

"What % of their wealth do the wealthiest 10% in NZ have in residential real estate?"

Does anyone have an answer, either in relation to the top 10% of adults or of households?

[fungus pudding]

I understood it well.

"What % of their wealth do the wealthiest 10% in NZ have in residential real estate?"

Does anyone have an answer, either in relation to the top 10% of adults or of households?

Good guess. Your interpretation is probably right.
To answer your question we neeed to know what it takes to make the top 10%. According to this site,
https://www.newshub.co.nz/home/money...ealanders.html
in 2020 it was $860,000.
That seems ridiculously low. Surely you'd need several million to make that list? I know a fair number of people with a net worth of several million, and the vast majority own no residential property other than their own home. Most of them certainly 'cut their teeth' on flats and/or houses but progressed to commercial and industrial investments. I'm sure that's common throughout the country.

[SBQ]

I understood it well.

"What % of their wealth do the wealthiest 10% in NZ have in residential real estate?"

Does anyone have an answer, either in relation to the top 10% of adults or of households?

Maybe I should rephrase it. What % of wealth in NZ is held in houses vs the NZX? I recall Bernard Hickey's figure of $1.5T the NZ real estate market total.

[Bjauck]

Good guess. Your interpretation is probably right.
To answer your question we neeed to know what it takes to make the top 10%. According to this site,
https://www.newshub.co.nz/home/money...ealanders.html
in 2020 it was $860,000.
That seems ridiculously low. Surely you'd need several million to make that list? I know a fair number of people with a net worth of several million, and the vast majority own no residential property other than their own home. Most of them certainly 'cut their teeth' on flats and/or houses but progressed to commercial and industrial investments. I'm sure that's common throughout the country.

Thanks FP.

I found the item ambiguous. Did the figures relate to all NZers including minors or do they relate to NZers over the age of 18 or 21 or whatever? Rashbrooke also switches to referring to “families” too.

If the figures relate to all people including minors then $860K+ net assets per person to be part of the top decile sounds quite high, even these days. If there is a household of two adults then that could be $1620K. So that could be an above average house (in most parts of NZ) less a mortgage plus significant KiwiSaver and other assets.


With the increased disparity of wealth in NZ, coupled with the fact that wealth increases markedly with age, you would need considerably more than $860K to be in the top 10% of 55-65 year olds.


I would imagine that asset inflation over the past decade or so would have benefited the wealthiest 1% significantly more than the following 9% in that top decile.

[Bjauck]

Maybe I should rephrase it. What % of wealth in NZ is held in houses vs the NZX? I recall Bernard Hickey's figure of $1.5T the NZ real estate market total.

I found some info:

NZ Median House value:
$637k in June 2020
$820k in June 2021


$401B current capitalisation of companies listed on the NZX (e.g. includes the total value of all shares of Australian companies which have a listing on the NZX.) SO perhaps about $250B when you strip out the big Aussies?


$1.4T Total NZ Housing Stock valuation (probably closer to your figure now!)
$280B mortgage debt in March 2020 (probably more now)


Thanks to our very expensive residential real estate, NZ is the fourth “wealthiest” country per capita in the World.


https://www.stuff.co.nz/business/300...t-in-the-world

[FTG]

Maybe I should rephrase it. What % of wealth in NZ is held in houses vs the NZX? I recall Bernard Hickey's figure of $1.5T the NZ real estate market total.

SBQ, I'll put it to you again being rather loose & flippant with reality & your view of it. You are pulling some long bows, & once again showing that your epistemological framework needs some heavy maintenance work. So yes, perhaps you should rephrase your questions.

I respectfully suggest that you should do objective & non-superficial research and know the facts & correct answers to these rhetorical questions you ask; BEFORE you ask them. Do that, with some humility thrown in, and you might actually find that the answers politely challenge your entire view on macro-economics, including the inner workings & idiosyncrasies of the NZ residential housing market.

Some quick facts & factoids for you to ruminate over. Some of them do clearly contradict your glib "statements of fact".

- The TOTAL Cap' of the US equity markets is now over US$47 Trillion.
- Over 40% of the US equity markets are owned by FOREIGN interests. Meaning on a "good day" US interests (institutional, retail, etc) own "just" US$28 Trillion worth.
- Over the last 30 years US retail investors have owned between 15 - 35% of the US market.
- Counterintuitively, despite Covid created uncertainties, but primarily because of the subsequent & unprecedented expansion of the FED Balance Sheet, household savings in the US is now the highest it has been for over 40 years!
- Over the last 12 months total new funds entering into the US equity markets has exceeded that of the last 20 years COMBINED. Phenomenal huh.
- So, lets err in your favour and say US retail investors now own 35% of the US market.
- This would mean, that cohort currently has US$16.5 Trillion invested in US equities.
- Meanwhile, total housing stock in the USA is said to currently value up to over US$36 Trillion. Over 95% of that is owned by US Citizens, so say US$34 Trillion

So in summary, the average Yank has far more of their household wealth tied-up in housing than Equities. More than double!

[Bjauck]

…
So in summary, the average Yank has far more of their household wealth tied-up in housing than Equities. More than double!

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?

[kiora]

Read somewhere where NZX NZ % ownership has increased over last few years
https://www.nzherald.co.nz/business/...C6KN426NJOHJM/
https://milfordasset.com/insights/po...ign-investment
"Meanwhile, NZ strategic stakes have nudged up slightly in recent years, mainly because of the Government’s controlling stakes in the newly listed electricity generators, Mighty River Power, Meridian Energy and Genesis Energy.

Forsyth Barr has collected similar NZX data since 2004, mainly in terms of the involvement of overseas managed funds in this country.

These figures show that offshore managed funds now own 44 per cent of the NZX compared with Goldman Sachs’ 26 per cent figure. The difference between the two figures is because Goldman Sachs data is based on the total value of all listed companies whereas the Forsyth Barr figures are a percentage of the market’s free float.

The free float is the value of all listed companies after deducting large strategic stakes. Strategic stakes include the Crown’s holding in the electricity companies and the local regional council’s holding in Port of Tauranga.

The Goldman Sachs and Forsyth Barr overseas institutional ownership figures are essentially the same when their different methodologies are taken into account."