NZ 1st homebuyers are ScReWeD...

[Panda-NZ-]

Foreign buyer ban in canada:

https://www.bbc.com/news/business-61027374.amp

Looks like they're serious about fixing the housing issue.

[unhuman]

Yup, it worked for us aye.

[Bjauck]

Yup, it worked for us aye.

Yep there needs to be major reforms in several spheres for NZ to cool down over-investment in land and housing.

[Walter]

ANZ is forecasting a 10% drop in house prices, add inflation and you are looking at an 18% real drop. 30% of fixed mortgages renew this year, many will pay thousands of dollars more than they have been. Even the Government is projecting a 50,000 flight of youth to greener pastures. Many that have sucking on the Government teat of the accommodation supplement will have some tough choices to make. It comes at a time when many tax deductions for property "investors" are under attack. The blood on the floor could be deep, but ultimately it may lower the rungs of the property ownership ladder for younger generation. If that happens the country will be better off.

[Aaron]

I guess in real terms you might have a significant drop, but Ashley Church knows how the system works.

https://www.oneroof.co.nz/news/41212

4 Reasons The Housing market won't crash.

1. The Reserve Bank won’t kill inflation at any price

and three other reasons which aren't as relevant.

[SBQ]

Yep there needs to be major reforms in several spheres for NZ to cool down over-investment in land and housing.

Foreign buyers ban is only 2 years so only temporary. The key difference between owning houses in Canada vs NZ is Canada has CGT on the sale of houses (principle resident is exempt). Canada for years welcomed foreign ownership of real estate but they would be subjected to paying the highest income tax rate, in addition to 20% tax on the purchase price. I see no problem taxing those that do have the $ to launder their assets through owning houses.

@ Walter: economists get it wrong all the time. They should be fired if they don't forecast correctly.

[Bjauck]

Foreign buyers ban is only 2 years so only temporary. The key difference between owning houses in Canada vs NZ is Canada has CGT on the sale of houses (principle resident is exempt). Canada for years welcomed foreign ownership of real estate but they would be subjected to paying the highest income tax rate, in addition to 20% tax on the purchase price. I see no problem taxing those that do have the $ to launder their assets through owning houses.

@ Walter: economists get it wrong all the time. They should be fired if they don't forecast correctly.

I think Canada also has a progressive land transfer tax levied on the sale price (with exemptions for first home buyers.) Australia and the UK also have duties levied on residential real estate transfers.

[SBQ]

I think Canada also has a progressive land transfer tax levied on the sale price (with exemptions for first home buyers.) Australia and the UK also have duties levied on residential real estate transfers.

Such a 'titled land transfer tax' are not real deterrents to those investing into houses. You need to hit them hard so it makes investing in houses into a no profit game. Like paying 20% surcharge tax on the house price. Like where I grew up in Canada, local city council rates have 3 categories. The basic category (middle rate) which applies to most home owners, a rebate category (for seniors that receive like a 10% discount), and lastly a surcharge category. Yes if the house is owned by a person that already owns a house in their name, or if it's owned under a company name or trust, then they pay like a 20% surcharge on the rates. And it doesn't stop there, insurance companies have caught on to this by full disclosure. If you rent the house out, insurance premiums could be 40% more than the typical insured home. IMO Justin Trudeau has done a lot in terms extracting most taxes out of those investing into multiple houses. He takes those taxes, and offsets the 1st home buyer by giving them tax free status on their share investments. In NZ, no such scheme exists and it's not likely it will ever as our IRD tax setup is not gear to provide 'tax credit' in a meaningful way (for starters, most people in NZ don't file yearly tax returns). In Canada, you must file every year even if it's a $0 income return.

[Aaron]

Just thought it was an interesting article on NZ house prices.

https://www.stuff.co.nz/business/128...y-in-coal-mine

On the way up it is a supply issue and the natural reaction of the markets in a "free" market economy with the RBNZ only playing a "bit part".

On the way down per quotes from this article.

The main risk to prices in Macquarie’s view were higher interest rates.

Fabo suggested a reason for the rise in New Zealand house prices during the pandemic was the Reserve Bank’s temporary relaxation of high loan to value ration restrictions for investor borrowing.

and to provide a fair view after attacking poor old Adrian Orr for being a spineless jellyfish lacking leadership in his role as head of the RBNZ.

Macquarie senior economist Justin Fabo​said investors were also keeping an eye on New Zealand because the Reserve Bank had been the “most aggressive advanced economy central bank to date” in jacking up interest rates to fight inflation.

Not sure what that says about central bankers in general, but looking at the housing index chart NZ housing more nuts than other western countries.

USA may be further down the path to a feudal system than NZ.

https://www.zerohedge.com/economics/...-ever-own-home

[Aaron]

The home owning half of NZ happy to keep things rolling, National and Labour on board not wanting to rock the boat.

https://www.theguardian.com/world/20...of-mum-and-dad