Now is the time to buy property

[minimoke]

I

Housing is unproductive...we need policies that reflect that.

Housing is "productive" insfar as people need somewhere to live. Putting your money into finance companies that go bust is arguably unproductive as is a sharemarket that is collapsing. Investing in offshore stocks isn't productive for the local economy and putting your money on term deposit in a triple A rated institution, while perhaps productive for the recipient of those funds is not necessarily benificial to the depositer.

[fungus pudding]

I think hes talking about 'ring fence property losses.' Its not in other countries that im aware of...

Housing is unproductive...we need policies that reflect that.

Ring fencing any taxable activity flies in the face of common sense. It will never happen for the very sensible reason that it could leave tax payers having to pay tax out of money they do not have and never have had. Muldoon tried a similar bit of nonsense with interest claims. He also tried claw back tax, which was nearly, but not quite as disastrous as
Rowling's spec tax. All have acheived the opposite of what is intended. NZ already has an extremely high rate of home ownership, so something is working and doesn't need 'fixing'.

[upside_umop]

Ring fencing any taxable activity flies in the face of common sense. It will never happen for the very sensible reason that it could leave tax payers having to pay tax out of money they do not have and never have had. Muldoon tried a similar bit of nonsense with interest claims. He also tried claw back tax, which was nearly, but not quite as disastrous as
Rowling's spec tax. All have acheived the opposite of what is intended. NZ already has an extremely high rate of home ownership, so something is working and doesn't need 'fixing'.

Its one of the many recommendations of economic think tanks. By ring fencing, it essentially makes housing a better investment/business, when we all know how unproductive it is. Therefore it would be better to scrap the ring fencing in order to improve investment into more productive areas and innovative industries. This is what will lead to a higher standard of living in the long run.

I guess its whether you define it as a problem, or an area of improvement for NZ?

[The GrandMaster]

I enjoy being a long term property investor in Auckland.

And I enjoy being a long term renter in Auckland...

[upside_umop]

Housing is "productive" insfar as people need somewhere to live. Putting your money into finance companies that go bust is arguably unproductive as is a sharemarket that is collapsing. Investing in offshore stocks isn't productive for the local economy and putting your money on term deposit in a triple A rated institution, while perhaps productive for the recipient of those funds is not necessarily benificial to the depositer.

Housing is unproductive. Fact.

Your also failing to take into account the leverage affects. Most people wont 105% leverage themselves in the sharemarket! But a lot of first homebuyers would have through westpac...yay 105%*-10%*380k = a nice bit of negative equity would you not think!

Investing in offshore stocks is productive if in fact the investment is on offering is more attractive than local, as in the long run, that money will be returned to NZ and in greater proportions than could have been achieved in NZ. Would you have told someone not to invest in Apple/Microsoft/Google even if you knew it was going to go gangbusters, because of the fact it wasnt going to create jobs in NZ? I sure hope not! That increase in real wealth will benefit greater in the long run than any socialist view of helping factory workers out would.

Depositing with a AAA depositor is efficient as the depositor has low risk and a reasonable amount of certainty of return of that money. The bank will then go and lend to housing or business. What do you think is more productive? Housing or business?

[minimoke]

Housing is unproductive. Fact.

Your also failing to take into account the leverage affects. Most people wont 105% leverage themselves in the sharemarket! But a lot of first homebuyers would have through westpac...yay 105%*-10%*380k = a nice bit of negative equity would you not think!

Investing in offshore stocks is productive if in fact the investment is on offering is more attractive than local, as in the long run, that money will be returned to NZ and in greater proportions than could have been achieved in NZ. Would you have told someone not to invest in Apple/Microsoft/Google even if you knew it was going to go gangbusters, because of the fact it wasnt going to create jobs in NZ? I sure hope not! That increase in real wealth will benefit greater in the long run than any socialist view of helping factory workers out would.

Depositing with a AAA depositor is efficient as the depositor has low risk and a reasonable amount of certainty of return of that money. The bank will then go and lend to housing or business. What do you think is more productive? Housing or business?

PAra 1 - You'll find coment on teh Westpac 105% loans. Eseentially ther view at teh tim was "Madness!". I don't know how mnay wanted or took up this loan..

Para 2 I understand that investing offshore is productive - but arguably more so for that local economy than ours. Equally we could say that investment in say Enron isn't that great an idea.

PAra 3. And just how many sub-primes had a AAA rating?

Investment in business is obviously productive. But if you don't have people investing in houseing to house those workers in these businesses they aren't going to be very productive.

[The Doctor]

I meant off setting losses....I concur with upside umop.

[winner69]

Shrewdie .... have you read this guy (pretty esteemed gentleman) saying the only real way for US to get out of the ****e is high inflation .... if we ran the numbers for NZ probably the same story .... don't think that a target policy will help

http://www.ft.com/cms/s/0/71520770-4...nclick_check=1

Quote -Inflation will do it. But how much? To bring the debt-to-GDP ratio down to the same level as at the end of 2008 would take a doubling of prices. That 100 per cent increase would make nominal GDP twice as high and thus cut the debt-to-GDP ratio in half, back to 41 from 82 per cent. A 100 per cent increase in the price level means about 10 per cent inflation for 10 years. But it would not be that smooth – probably more like the great inflation of the late 1960s and 1970s with boom followed by bust and recession every three or four years, and a successively higher inflation rate after each recession.

[Dr_Who]

Thats exactly what the central banks around the world is doing, inflating our way out of this recession by using the printing press. The recent bottoming and steep climb of the commodities is a big flashing sign right in front of our eyes.

We can talk till the cows come home about all these fundamentals that will keep asset prices down, but if you are not in it, then you will miss out. A good example is copper and copper stocks that have put on nearly 100% in a few months.

The housing sectors is very productive in the NZ economy and makes up a large percentage of our wealth. Alot of jobs are created in the building industry and the flow on effect from it to other complimentary industries. FACT!

[upside_umop]

Thats exactly what the central banks around the world is doing, inflating our way out of this recession by using the printing press. The recent bottoming and steep climb of the commodities is a big flashing sign right in front of our eyes.

We can talk till the cows come home about all these fundamentals that will keep asset prices down, but if you are not in it, then you will miss out. A good example is copper and copper stocks that have put on nearly 100% in a few months.

The housing sectors is very productive in the NZ economy and makes up a large percentage of our wealth. Alot of jobs are created in the building industry and the flow on effect from it to other complimentary industries. FACT!

Central banks inflating our way out of this? There is only one central bank that can do that without too many adverse effects...and its not NZ's.

Have a guess and why that it is Dr.

Housing is not as productive as say, dairy. The NZ economy is too focused on housing and it doesnt make sense to have apprentices charged out at $60 an hour plus. That is unproductive. Its not productive to pay real estate agents 4%+GST of a house price They're not creating an efficient market. Real estate agents are one of the biggest beneficiaries of a housing boom. They are unproductive.