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  1. #41
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    Whats the big deal ? Doesn't matter if houses are affordable or no. If they are unaffordable then people will not buy houses and the price will come down. It can not last forever that the young can't buy houses...

  2. #42
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    MM

    I think you miss the point - is that house in Sandringham 15 year later worth nearly 3.5 times more when incomes have only gone up 40% in that same period. If I was buying now on the same relative wages I would be contemplating living a tiny two bedroom unit in Papakura. If I chose to do that if would be a significant tradeoff to my lifestyle. The argument was about the affordability of house in general not whether someone could afford a shoebox in the booeys. You will always be able to find a house you can afford to buy (Mataura, Papakura) if you look hard enough but to what ends do you want to sacrifice life - that is the point of having an affordability index.

    Anyway, I doubt either of us will change the others mind. Debate is good. It is an important topic for most NZers given most of us have most of their life's saving tied up in it.
    Last edited by Ptolemy; 18-09-2009 at 04:31 PM.

  3. #43
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    well,
    after reading a weeks worth of heated debate about how houses are affordable for those that are willing to give up smoking, stop breeding, and live in low class areas for their first home, i read 2 articals today about housing afordabiltiy and its affect on society.

    from those who cash in on cap gains, to those that cant get on the ladder........ even if they give up smoking.
    what some people dont realise is, housing used to be affordable for almost all folks a generation ago.
    now its for the skilled worker or double income family only.
    so where does that place the multitude of folks who work in a factory or shop etc.
    100's of thousands of kiwis earn less than $18 an hour, and these folk (without the help of taxpayer benifits) cant afford to buy a house or even rent it without that help.
    sooner or later......... im guessing sooner now, .... going by these articals, low income earners will be able to buy houses in low class suburbs that the property investor /speculators have snapped up with tax deductable/ depreciable loans to collect government funded housing suppliments from low income workers.
    some sort of ring fencing or cgt will come into effect in the near term future, and the result is that speculators will walk away from these cash cows and therefore these properties will reduce in price to be affordable to those that live and work in the factory zones where these houses are.

    i am sick to death of my taxes going to landlords via housing suppliments, and these landlords collecting tax loses and "depreciation" and then selling for cap gains and the ird is sitting on its thumbs.

    if......... (which wont happen).... there was no housing suppliments, a house in mangere east or otara, would not be worth what they are today, and the low incomers could then afford to own.
    imho, working for families and housing suppliments have created a class of property millionaires at the expence of low incomers and tax payers.

    http://www.nzherald.co.nz/business/n...ectid=10598694
    http://www.nzherald.co.nz/property/n...ectid=10598551

  4. #44
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    Quote Originally Posted by neopoleII View Post
    what some people dont realise is, housing used to be affordable for almost all folks a generation ago.
    And a genration ago you couldn't buy a car unless you held foreign currency and knew the right people. Women knew their place was in the home. TV was for the wealthy and we had liscencing fees. We had Nordmeyers "Black Budget" and the Beatles were just becoming known (which will be intersting for the new digital generation of Beatles fans). The Ranfuly Shield is what counted and you needed a building to house a computer.

    The world moves on: if we want to hark back to the past we have to take the good with the bad. Why go back a generation - what about a few generations and to the 1930's when we saw the first State Houses being built for those on low to moderate incomes or do you want to go back to the 1900's with the introduction of workers housing.

    Back then there was no god given right to own your own home and those that did had very humble abodes. Nor is there any god given right today - times change and move on. Somethings become more affordable and some don't. But the fact remains - if a person wants to buy a house and is prepared to make the sacrifices then it can be done.

  5. #45
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    Minimoke try buying a house on the minimum wage & see how you cope unless you are using the NZ minimum wage to build a Mud Hut in Ethiopia credit is the bain of life it pushes prices up far faster than wages. And how many businesses were moaning about the increase in the minimum wage. But then again they think all their customers are earning Mega Bucks & living in the times of the Black budget was a lot better for a lot of people than now. Take the elderly person that needs care. They would be a lot better off shooting a politician & spending there last years in jail than an aged care facility. Plus they would get better medical care as well in jail.
    Last edited by POSSUM THE CAT; 22-09-2009 at 07:36 PM. Reason: correct grammar
    Possum The Cat

  6. #46
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    Quote Originally Posted by POSSUM THE CAT View Post
    Minimoke try buying a house on the minimum wage & see how you cope
    It has never been a right of anyone to own their own home. The challenge of owning a home has always been that - and the "Minimum Wagers"(as a generalisation) have always been locked out of home ownership - thats why we had state houses and Workers Housing in the past and why we have Working For Families and Accomodation Supplements now.

    I'd go far as saying that owning a home is something a minimun wager should most definitly not aspire to (especially an "average" home) - they should firstly aspire to gain skills and education that lifts their wage rate. A Minimum Wager could concievably afford their own home (can't see it myself - but there are probably opportunites locally in Bromley or Aranui) but then they have to pay the rates, insurance and property upkeep - something their budget probably won't allow.

    "Renters" are not second class citizens. If people cannot afford to own a home then they should not be looked down on if they are renting. There are valid arguments for renting over home ownership so those with aspirations can still make a home in a rental and do very well out of it.

  7. #47
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    Quote Originally Posted by neopoleII View Post
    i am sick to death of my taxes going to landlords via housing suppliments, and these landlords collecting tax loses and "depreciation" and then selling for cap gains and the ird is sitting on its thumbs.

    if......... (which wont happen).... there was no housing suppliments, a house in mangere east or otara, would not be worth what they are today, and the low incomers could then afford to own.
    imho, working for families and housing suppliments have created a class of property millionaires at the expence of low incomers and tax payers.
    But not sick at all to see them go to those (barring genuine cases) who don't wish to get off their bums and earn an honest wage. It is these "benefit is birthright" people who make a mockery of the benefit system which was a noble socialistic idea of providing social security to people who deserved it. Where community cared and provided a helping hand. Now that helping hand has become "a right", and has a consequence for those who genuinely deserve help (like superannuitants to name just one demographic).

    It is not just accomodation supplement that gets paid out of tax dollars, but also the cost to feed their whole families, clothe them, provide (free) electricity, and phones, subsidised medical care and medication, free education, social amenities, even free facilities in jail if some of them end in jail. The landlord has to chase the tenants for rent, pay the bill for water and damages, spend money to find their wherabouts when they do runners, pay court costs, get orders and still end up with a payment of $5 a week for life, if he is lucky.

    Contrast this with how much Housing NZ spends each year just on repairs of its housing stock. Who pays? the taxpayer. Not all landlords have taken into account their risks professionally, and not all beneficiary tenants are bad. But you only need one to blow your retirement, beneficiary or non-beneficiary. One must beware what one wishes for, lest one get it. landlords provide a vital social service, and I for one, am grateful.

  8. #48
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    people who abuse the benifit system should be barred from recieving one.
    people who abuse or cheat landlords should also be barred or punished and registered.

    another problem is that the govt doesnt take alot of action against those who cheat the system, whether benifit fraud or abuse or investment property speculation.

    i would be happy for a fairer system both ways which would leave room for the genuine investor landlord and an opertunity for low incomers (who do try to save) to get a home.
    but as it stands low class properties are in demand from high income earners for the govt funded rents and cap gains and tax deferments.

  9. #49
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    fair point. Not sure if demand for economic end stock is solely for renters though. Also, at the moment lending seems tight for property investors...

  10. #50
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    Quote Originally Posted by neopoleII View Post
    well,
    after reading a weeks worth of heated debate about how houses are affordable for those that are willing to give up smoking, stop breeding, and live in low class areas for their first home, i read 2 articals today about housing afordabiltiy and its affect on society.
    Don't take my word for it - how about Massey University researchers. In todays news:
    "Homes became more affordable in the three months to August 31 mostly because of low interest rates, according to the Massey University Home Affordability report.

    Home affordability improved by 2.3 percent in the quarter, which was less than the 8.5 percent improvement between February and May.

    Home affordability improved 17 percent on an annual basis."

  11. #51
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    i see we're posting sound bites now......
    all it says is home affordabiltiy is improving....... thats a long way from affordable.
    the ratio of afforability is still way off from long term averages.
    we are still in masive debt, and unemployment is rising.

    having said that, my brother is a partner in a civil enginereering/ surveying co and he has mentioned that subdivisons are moving again.....
    so some folks are hoping for an early worm.
    but that is just the typical property speculation syndrome that kiwis suffer from.

    my bet is the govt will have to step in at some stage.

  12. #52
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    Quote Originally Posted by neopoleII View Post
    i see we're posting sound bites now......
    "now"?

    TGM
    If I am not for myself, then who will be for me? And if I am only for myself, what am I? And if not now, when?

  13. #53
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    How long before interest rates have to Increase. there will be a lot of money cross the Tasman until they do
    Possum The Cat

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    i dont think floating interest rates will rise for quite a while.
    what with the rising dollar affecting export incomes, and possibly jobs in the export sector.
    and house prices are still high compared to incomes, this link states the median incomes for All nzers and then wage and salary earners......... the numbers are not pretty.


    http://www.nzherald.co.nz/business/n...ectid=10602017

    and then the tax working review group who have to find a way to reavaluate the tax system, they mention alot about investment property and the lack of tax income for the ird from it.
    lots of hurdles to get through, but something will happen,
    which when it does, should take the preasure of interest rates as well.

    http://www.nzherald.co.nz/business/n...ectid=10601862

  15. #55
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    NeopoleII I already have 65% of my wealth across the tasman and unless NZ interest rates hit at least 3% by Cristmas a lot more of it will be over there and if you are Japanese or Chinese or any other race are you going to accept 2.5% from NZ or 3.5% from Australia So who are you going to borrow money from. KIwis with money are sending it to Australia
    Possum The Cat

  16. #56
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    This is the most relevant thread I could find.

    Do negative interest rates seem insane to anyone else. i.e. I will pay someone to use my money and the more they borrow the more interest they make.

    Just reading this article has me worried.
    http://www.smh.com.au/business/marke...20-gs6mpr.html

    Is it being discussed seriously and will it happen?

    I suppose borrowers might limit their borrowings based on the threat interest rates could turn positive again one day. What about lenders? I guess you sell bonds to central banks so that individuals saving gets taken out of the equation. It would have to as no-one would bother saving anymore. All positive for gold I suppose but if they went cashless then I think central banks would need to sell their gold reserves to prove it is no longer considered money.

  17. #57
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    Rate cut and maintaining negative interest rates have become new normal in some countries now. They want to see growth by managing interest rates. They have selected easy money policy option. My question is who will begin to raise rate first?

    https://www.theguardian.com/business...lation-targets

    The US central bank should look at options including negative rates and higher inflation targets to stimulate the economy

    http://www.theweek.co.uk/brexit/6411...erest-rate-cut

    Bank of England ditches second interest rate cut

    https://www.bloomberg.com/news/artic...-again-in-2017

    Prudential Sees Kuroda Taking Negative Rates Lower Again in 2017

    http://qz.com/809970/inequality-is-r...-are-to-blame/

    Inequality is rising in Denmark, and negative interest rates are to blame

  18. #58
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    My question is who will begin to raise rate first?
    Probably the US Fed. But the real issue isn't who will be first, it's more a matter of pretty much universal acceptance that the next move will be up.

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    Quote Originally Posted by macduffy View Post
    Probably the US Fed. But the real issue isn't who will be first, it's more a matter of pretty much universal acceptance that the next move will be up.
    For anyone who has not worked out the connection.. when the Fed rates rise then so too does the Mortgage rates in NZ...[and rents]

    "Of course, when US interest rates go up our interest rates go up as well, so that's why our five year mortgage rates are rising, even though the Reserve Bank has its official cash rate on hold," Speizer said."

    http://www.nzherald.co.nz/business/n...ectid=11766939

    We are all in for a world of pain

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    Quote Originally Posted by NeverQuestion View Post
    For anyone who has not worked out the connection.. when the Fed rates rise then so too does the Mortgage rates in NZ...[and rents]

    "Of course, when US interest rates go up our interest rates go up as well, so that's why our five year mortgage rates are rising, even though the Reserve Bank has its official cash rate on hold," Speizer said."

    http://www.nzherald.co.nz/business/n...ectid=11766939

    We are all in for a world of pain
    Not quite all! Some of us have paid off our mortgages - mostly financed at much higher rates than those current or prospective! - and will welcome slightly more realistic returns as deposit rates "adjust".

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