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Originally Posted by artemis
IRD says there are no tax advantages for residential property investing. In fact there is a big disadvantage now that residential building depreciation has been removed.
IMO it is not easier to invest in residential property rather than in, say, the sharemarket. It may, however, be harder to borrow to buy shares though of course plenty of people do. One reason people buy rentals rather than shares is because they have some understanding of property. (So they think, anyway, until things turn to custard.) Plus most people are concrete rather than abstract thinkers, so would rather see the bricks and mortar.
Disc - I have $ in both. Shares are waaaay less time consuming than rentals.
Depreciation was never available for financial investors and owner-occupiers of residential housing still enjoy untaxed imputed rental income return from their equity.
If instead of having (say) $500,000 equity in a rental house in Auckland, you had $500,000 in only NZ shares, I would agree with you. However you would increase greatly the risk of your investment imo...the returns from NZ shares being much more variable (historically) than returns from housing. That also ignores the fact that many residential real estate investors do borrow to leverage themselves into rental property, so on average the $500,000 equity would equate to owning significantly more assets. So (on average) each $500,000 owner's equity in rental housing reduces the government's tax-take much more that the equivalent invested in financial assets.
If you diversify away from NZ shares alone that is when you could encounter complex financial arrangement and FIF rules...taxation of capital appreciation (NZ bonds, overseas shares if worth more than $50,000) and then there is also the possibility of unrelieved double taxation (Australian shares etc.).
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Housing market surely is slowing down, in decline really. The bottom end seems to be thecreason
https://www.reinz.co.nz/shadomx/apps...siteName=reinz
Even if there were heaps of 'cheap' houses in Auckland I don't think there are enough people to buy them anyway
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Originally Posted by winner69
Go and have a look at the newer suburbs like Hobsonville where 3 and 4 bedrooms brand new houses with the latest specs are selling as fast as they can build them W69.
Big reasons are that they are affordable, nicely laid out, have great kitchens and bathrooms and good recreational community parks and recreation areas.
I think the existing house market is cooling down fast (a very very good thing) as house buyers opt for these new houses in the newer suburbs.
I have seen in recent weeks some developers trying to sell their inflated priced sections in the established Auckland suburbs - no takers since April.
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Originally Posted by winner69
Whose behind key one may ask?
He sure seems to be in bed with the USA
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Originally Posted by Balance
Go and have a look at the newer suburbs like Hobsonville where 3 and 4 bedrooms brand new houses with the latest specs are selling as fast as they can build them W69.
Big reasons are that they are affordable, nicely laid out, have great kitchens and bathrooms and good recreational community parks and recreation areas.
I think the existing house market is cooling down fast (a very very good thing) as house buyers opt for these new houses in the newer suburbs.
I have seen in recent weeks some developers trying to sell their inflated priced sections in the established Auckland suburbs - no takers since April.
Agreed--Its not a bad thing the housing market is slowing--Cant go on forever-Time to slow down and take a breath (and I own rentals)
--Disc.-dont let anyone tell you it isnt a fair amount of work maintaining rentals and dealing with tenants.
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Originally Posted by Bjauck
Depreciation was never available for financial investors ....
Yes it was, but through the company accounts.
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Originally Posted by skid
..... --Disc.-dont let anyone tell you it isnt a fair amount of work maintaining rentals and dealing with tenants.
Yep, and cost as well. I don't think I have ever had an invoice from a drainlayer which was less than $5000, for example. That is a lot of weeks of rent.
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Originally Posted by belgarion
There's something very fishy going on with drain laying ... Even the rest of the building industry can't understand how they're able to justify their prices based on the time and materials going into the job. I have an example of the price gouging and my neighbour, a builder, has more. The ComCom should investigate as they appear to be operating "cartel" like pricing or at the very least think they're worth 500 per hour!
I trust my drainlayer, have worked with him for years. He provides detailed invoices. May be different in other centres, but drains in Wellington can be very complex.
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Originally Posted by turmeric
Yeah I saw that, although I am sometimes a little skeptical of NZIERs work....... (only part of the full post)
OCR rise a 'huge mistake'
http://www.stuff.co.nz/business/mone...a-huge-mistake
Shamubeel probably only looking at some of the consequences .... but at least he didn't repeat there aint a housing shortage in Auckland story
Keeps economists in the headlines - they love that
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Originally Posted by winner69
OCR rise a 'huge mistake'
http://www.stuff.co.nz/business/mone...a-huge-mistake
Shamubeel probably only looking at some of the consequences .... but at least he didn't repeat there aint a housing shortage in Auckland story
Keeps economists in the headlines - they love that
I spoke at length with the GM of one of the major Australian owned real estate franchises yesterday and he said exactly the same thing about the provincial area's of N.Z. They're doing it really tough already. Interest rate increases are complete madness in my opinion.
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