NZ 1st homebuyers are ScReWeD...

[Aaron]

Remember how many years landlords could have interest deductibility. Labour was the one who introduced the legislation to stop deductability and used that money to spend elsewhere. Just a different way to look at it. Otherwise I am for deductibility for landlords, you just punish tenants by giving landlords more costs. We need landlords

Interest had always been deductible but instead of addressing inflation targeting and monetary policy and 30 years of lower and lower rates and central banks constantly stepping in to save the over indebted speculators, Labour stopped interest deductibility. What I did like was that interest remained deductible if you were actually building new supply as I agree with you we need houses although I am not sure if I agree we need landlords instead of homeowners though.

You could argue that tenants are not likely to benefit from the interest deductibility being reintroduced. So you punish tenants by giving landlords more costs but benefit landlords by reducing them. Heads you lose tails I win.

A strong argument for encouraging home ownership in my opinion and working toward a more equal society instead of a feudal one.

[thegreatestben]

There's not much use in deductibility for new builds because there's no profit, I pitched to Chris Bishop that they could incentivise new builds by removing ring fencing for a short period like 5 years but they can't afford it.

[Aaron]

There's not much use in deductibility for new builds because there's no profit, I pitched to Chris Bishop that they could incentivise new builds by removing ring fencing for a short period like 5 years but they can't afford it.

So what is the problem? Are rents too low or house prices too high? Or a bit of both?

Why are houses so expensive?

Why would anyone invest on a gross yield less than 5% unless they knew they could make it up through inflation and leverage and that interest rates would be suppressed by the RBNZ to boost asset prices.

Why would anyone have negative gearing unless they knew they could make it back through capital gain. The govt guarantees at least 2% but has managed a lot more a year on housing traditionally. At least since the late 1980s anyway.

Is targeted inflation and the wealth effect really helping the average NZer?

Does removing the ring fencing make building houses cheaper or is it more like a subsidy to landlords to encourage investment a subsidy that is not available for home owners.

[Ggcc]

Interest had always been deductible but instead of addressing inflation targeting and monetary policy and 30 years of lower and lower rates and central banks constantly stepping in to save the over indebted speculators, Labour stopped interest deductibility. What I did like was that interest remained deductible if you were actually building new supply as I agree with you we need houses although I am not sure if I agree we need landlords instead of homeowners though.

You could argue that tenants are not likely to benefit from the interest deductibility being reintroduced. So you punish tenants by giving landlords more costs but benefit landlords by reducing them. Heads you lose tails I win.

A strong argument for encouraging home ownership in my opinion and working toward a more equal society instead of a feudal one.

Not everyone can or wants to own a house and I know many that never want one. Too much restricted, as they want to be able to live the way they choose. Plus do you really want houses to go down to $400,000, if so that is the only way people will get into houses in this current market. It will destroy more than 50% of home owners retirement plans.

Look at what it costs to build a house and look at the property value. Sections are selling in Napier for a minimum of roughly $350,000 and most of these sections have conditions. Building on there is roughly $3000-3200 per square metre for a basic spec home. Older homes should be less to buy than new homes, for similar houses but not by $400,000-500,000, maybe $200,000.

I own 2 houses freehold and I want to sell both eventually to buy one house, but it has to be at a price I want. I got what I did by sacrificing 25 years of my life to work 7 days per week. People can do the same, although I agree it is tougher today. I am 48

[Aaron]

Not everyone can or wants to own a house and I know many that never want one. Too much restricted, as they want to be able to live the way they choose. Plus do you really want houses to go down to $400,000, if so that is the only way people will get into houses in this current market. It will destroy more than 50% of home owners retirement plans.

Look at what it costs to build a house and look at the property value. Sections are selling in Napier for a minimum of roughly $350,000 and most of these sections have conditions. Building on there is roughly $3000-3200 per square metre for a basic spec home. Older homes should be less to buy than new homes, for similar houses but not by $400,000-500,000, maybe $200,000.

I own 2 houses freehold and I want to sell both eventually to buy one house, but it has to be at a price I want. I got what I did by sacrificing 25 years of my life to work 7 days per week. People can do the same, although I agree it is tougher today. I am 48

Well done, I am not really advocating for people who do not want to crimp their lifestyle or make any sacrifice and expect home ownership.

Not sure where you got $400,000 from, even for me that seems a little low. If we took the average income of $53,040 or the median is better as this is $66,196 and assume both parents work at 5 times median income that is $661,960. I think historically 5 times income is expensive and even more historically we would be basing this on one wage. Amazing how inflation works on asset prices compared to wages over time.

Still $661,960 still sounds cheap compared to a $1mill average akld house only a couple of years ago.

Timing any market is tricky, who would have thought that selling your houses during a global pandemic was the best time. Appreciate why you want low interest rates and ezi money from the RBNZ, but I do not think it is good long term for NZ even though I can see how it would help your retirement plans.

What do you propose for NZ? historically low interest rates and historically high house prices? or perhaps negative rates to really get asset prices pumping (you may have a friend in Adrian Orr on that one as he is the only person I have heard mention such stupidity).

It might help your retirement but it shuts young people out of the market and imposes an inflation tax on the poor who do not benefit from all those lovely capital gains.

Good luck though hopefully a buyer will come along at a price you are happy with.

[Ggcc]

Well done, I am not really advocating for people who do not want to crimp their lifestyle or make any sacrifice and expect home ownership.

Not sure where you got $400,000 from, even for me that seems a little low. If we took the average income of $53,040 or the median is better as this is $66,196 and assume both parents work at 5 times median income that is $661,960. I think historically 5 times income is expensive and even more historically we would be basing this on one wage. Amazing how inflation works on asset prices compared to wages over time.

Still $661,960 still sounds cheap compared to a $1mill average akld house only a couple of years ago.

Timing any market is tricky, who would have thought that selling your houses during a global pandemic was the best time. Appreciate why you want low interest rates and ezi money from the RBNZ, but I do not think it is good long term for NZ even though I can see how it would help your retirement plans.

What do you propose for NZ? historically low interest rates and historically high house prices? or perhaps negative rates to really get asset prices pumping (you may have a friend in Adrian Orr on that one as he is the only person I have heard mention such stupidity).

It might help your retirement but it shuts young people out of the market and imposes an inflation tax on the poor who do not benefit from all those lovely capital gains.

Good luck though hopefully a buyer will come along at a price you are happy with.

Thank you. I do understand you when you talk about average income and then median income and compare it to the value of a house. I have always been told by my father, In times where people want average incomes they receive an average financial life. I would not be in the position I am in without him.

Financial literacy is important for young people and without a person guiding them, they most likely won't own a home. I looked into it further and I found most young people who never wanted to own a home came from parents that could not get through to their children about the importance of investing (Not at a Bank).

Another thing that bothers me are young people that work only want to work 30-40 hours per week..... what about a side hustle to earn more. People have not got rich from working 40 hours per week, unless lucky or extremely frugal. If you are under 30 and single is that you should be able to work 70 hours per week and that will help save you heaps. I worked 7 days per week for a long time longer than 30. People should not just feel 40 hours is enough.

I don't want low interest rates for a long time, I just want inflation under control for the poor, which includes some of the middle income earners now.

[Aaron]

Thank you. I do understand you when you talk about average income and then median income and compare it to the value of a house. I have always been told by my father, In times where people want average incomes they receive an average financial life. I would not be in the position I am in without him.

Financial literacy is important for young people and without a person guiding them, they most likely won't own a home. I looked into it further and I found most young people who never wanted to own a home came from parents that could not get through to their children about the importance of investing (Not at a Bank).

Another thing that bothers me are young people that work only want to work 30-40 hours per week..... what about a side hustle to earn more. People have not got rich from working 40 hours per week, unless lucky or extremely frugal. If you are under 30 and single is that you should be able to work 70 hours per week and that will help save you heaps. I worked 7 days per week for a long time longer than 30. People should not just feel 40 hours is enough.

I don't want low interest rates for a long time, I just want inflation under control for the poor, which includes some of the middle income earners now.

I was thinking last night if the house you wanted to buy has fallen in price the same as the two you want to sell then you would be no worse off buying and selling in the current market. Although the house you want to buy might be in a desirable location and with real estate I have heard it is all about location, location, location.

I feel a bit mean spirited arguing for the impositions on the landlords when you have been working 7days and long hours. In your case taxation might be more like penalising success/effort particularly income tax as this was charged on every hour you worked. Not so much for people born to wealth though.

Not sure I agree with 70-80hours 7 days a week. Some people have a poor attitude to work and responsibility and are lazy. I have most of those tendencies, that is why I post on the political threads as I have not done the work to contribute to the investment threads.

Yes work hard and smart if you want to get ahead, but some people's aspirations might be lower, aspirations such as enough to live on and time with the family, especially a young family. Tricky, no right or wrong just some happy middle that works the best for most people.

Doesn't sound like you necessarily enjoyed working 7days a week but hopefully reaping the rewards later in life. I would note that the theory is if interest rates go down economic activity and inflation go up so higher for longer might be the way to go to control inflation. I also wonder if the economy can sustain itself at 5.5%OCR. maybe the RBNZ should just stop meddling, although I am sure Adrian enjoys being the centre of attention when he makes his announcements.

[troyvdh]

Sorry.
Again does NZ inc have one of the highest residential house prices markets in the world ?.

Surely this/is was going to end.

It aint rocket science.

[Bjauck]

Sorry.
Again does NZ inc have one of the highest residential house prices markets in the world ?.

Surely this/is was going to end.

It aint rocket science.

NZ could always keep on having some of the most expensive houses in the world, for our income levels. If structural reform does not happen, it may always be that over-investing in housing, and under investing in income producing business remains.

Under investing in business resulting in under-capitalisation may also mean that a low productivity workforce remains, working for long hours just to be able to afford housing. So the young families will be looking to go to Oz. The old folk remain in NZ with their expensive houses being looked after by foreign immigrants from developing nations.

[Valuegrowth]

NZ could always keep on having some of the most expensive houses in the world, for our income levels. If structural reform does not happen, it may always be that over-investing in housing, and under investing in income producing business remains.

Under investing in business resulting in under-capitalisation may also mean that a low productivity workforce remains, working for long hours just to be able to afford housing. So the young families will be looking to go to Oz. The old folk remain in NZ with their expensive houses being looked after by foreign immigrants from developing nations.

Housing has become a commodity. As long as demand is there for houses there could be stability in the sector. Still I'am skeptical on the current housing prices. Historically, asset prices have dropped massively whenever there were “black swan “events. Eg:1987 market crash.