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  1. #231
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    The values in the Auckland house market have increased by 14.6% in the past year. That is compared to to an increase of about 7.7% in the NZ50 capital index.

    An investor paying cash for the average Auckland home a year ago would have seen an unrealised tax-free capital increase of 14.6%. The taxable Rent yield after expenses would have been under 3%. However many/most investors would purchase the property with a mortgage. With a 50% mortgage, the taxable rent yield has been reduced to about 0% yet the leveraging has given the landlord/ investor an unrealised tax-free return of 29.2% in the past year.

    The dividend yield on the NZ50 was about 5%.

    The real world lighter actual tax burden on the returns from typical investments in rental housing compared with other investments including overseas investments, fixed interest and shares is not a recent phenomenon. It has contributed to the large percent of NZ household wealth that is in rental housing as opposed to financial investments.

    http://www.stuff.co.nz/life-style/ho...800000-says-qv

  2. #232
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    Default Auckland Prices Increase at Fastest Pace in 11 Years

    Year-on-year price growth is now 16.1%.
    http://www.nzherald.co.nz/business/n...462255&ref=rss

    For the Landlord who has a mortgage, this translates into even greater unrealised percentage growth in equity. That is a good investment performance. Bill English has said that a rental housing warrant of fitness would reduce rental housing supply. If the demand for residential housing by investors were reduced and consequently the pressure on prices alleviated, then surely that would be a good thing. It could mean that potential first home buyers would be less likely to be out-bid by investors. Those successful first home buyers would then mean less demand for rental properties.

    Whatever, in the absence of meaningful changes in the housing market, Auckland will continue down the path to have housing owned by fewer yet wealthier overseas and domestic investors, whose heirs will inherit and become landlords, with the rest of the population becoming perpetual tenants. A landed aristocracy and a peasant class in the making if you will. Just like how the old country used to be. Unless there is a big correction round the corner...or, unfortunately less likely, housing developments occur at the level needed to match immigration and population growth.

  3. #233
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    It's getting at the stage where I think I'll have to move out of Auckland.

  4. #234
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    Quote Originally Posted by Bjauck View Post
    ...... If the demand for residential housing by investors were reduced and consequently the pressure on prices alleviated, then surely that would be a good thing. It could mean that potential first home buyers would be less likely to be out-bid by investors. Those successful first home buyers would then mean less demand for rental properties......
    Unless migration continues to increase, or even maintain present level.

  5. #235
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    Quote Originally Posted by artemis View Post
    Unless migration continues to increase, or even maintain present level.
    Lets say migration rates half, that still means a net gain of ~25,000 people (whole of NZ). They can't even build 10,000 homes a year in Auckland - not to mention the existing networks are buckling at the seams.

    As strange as it may sound we almost "need" a crash.

  6. #236
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    Quote Originally Posted by vorno View Post
    Lets say migration rates half, that still means a net gain of ~25,000 people (whole of NZ). They can't even build 10,000 homes a year in Auckland - not to mention the existing networks are buckling at the seams.

    As strange as it may sound we almost "need" a crash.
    Not till we sell our house ...then happy to see another crash
    "With a good perspective on history, we can have a better understanding of the past and present, and thus a clear vision of the future." — Carlos Slim Helu

  7. #237
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    Default And now...lower RB interest rates adding fuel to the Auckland property fire...

    I would not like to be a potential first home buyer -period - but especially for the next few months. With lower interest rates, will there be even more of a scramble for property by investors before the (albeit token) announced investor requirements come into force? Will the annual price rise kick up a further notch?

  8. #238
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    I really do not understand the reasoning behind the interest rate dropping yet again. If anything, it should have gone up by 0.25-0.50% - in my humble opinion at least.

    *All I want for Christmas is my "2 squared feet".

  9. #239
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    2 sq ft maybe all we can afford come Xmas....I think I can understand the reasons behind an int. rate rise for the terms of trade and currency. IMO however, the RB interest rate announcement takes the feeble "cooling" plans for the Auckland residential property market and hits them out of the ball park. The Govt need to step up a notch and introduce some reforms (just for Auckland perhaps) with more teeth than hitherto announced.

  10. #240
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    One way to make cool Auckland bubble housing market is to introduce 30% capital gain. Those who buy houses to live should exempt from capital gain and there should be capital gain for other traders in the housing market. However there are cycles for every asset. Auckland housing market is above the cycle as well. Just like oil, gold and kiwi dollar, Auckland should start its bear journey from the second half of this year. The hot money also drives the housing market in Auckland. On the other hand, house prices have stagnated in the Wellington areas and it take longer period to sell houses. It is completely different scenario in Auckland.

    Fed will increase interest rates by the end of this year or in 2016. Interest rates easing will continue in Asian Pacific region. In addition to New Zealand, the Bank of Korea lowered its key interest rate to an unprecedented low. Overvalued Auckland property market should drop at least by 25% to 40% by 2016. Sooner Auckland housing market has correction it is better. Otherwise there could be Auckland housing market crash and banking crisis in New Zealand.

    My ideas are not a recommendation to either buy or sell any property, security, commodity, or currency. Please do your own research prior to making any investment decisions

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