Which way will the property market go now?

[artemis]

There is massive inequality of opportunity - we don't even have an inheritance tax. How can a society be equal when people can get a free ride from their parents work, on top of all the other advantages to coming from a rich family?

There is inequality of outcomes to be sure. Inequality of opportunity not so much with free education, various taxpayer safety nets, businesses crying out for workers at many skill levels. Opportunities right there but ignored - not much use.

As they say - 'the harder I work, the luckier I get'.

[mfd]

I fail to see how somebody's parents working smart and hard and passing something to children is anything wrong?

I didn't say it's wrong, but it's clearly incompatible with having equality of opportunity. If two children are raised in the same city, receive the same education, but one is gifted a house and a wad of cash to start a business while the other gets nothing, in what way did they have equality of opportunity?

[ynot]

I fail to see how somebody's parents working smart and hard and passing something to children is anything wrong? There's plenty of opportunities to do this nowadays. My parents had nothing, gave me nothing and I am on my way to retire by 45. I do it by sacrificing and working harder than others. Anyone can do it, literally anyone. I came here, had nothing, lived in car and worked at kiwi orchards. 5 years later I own my own property and invest in stocks.

There is full equality of opportunity. If you're poor in NZ, it's by choice. That's a fact. Coming from post soviet country, I can tell you anyone living on minimum wage in NZ is rich. Living here is a breeze.

My hat off to you Peetter.
This effort is less often acknowledged as a virtue in God's own. Especially today.

[fungus pudding]

I fail to see how somebody's parents working smart and hard and passing something to children is anything wrong? There's plenty of opportunities to do this nowadays. My parents had nothing, gave me nothing and I am on my way to retire by 45. I do it by sacrificing and working harder than others. Anyone can do it, literally anyone. I came here, had nothing, lived in car and worked at kiwi orchards. 5 years later I own my own property and invest in stocks.

There is full equality of opportunity. If you're poor in NZ, it's by choice. That's a fact. Coming from post soviet country, I can tell you anyone living on minimum wage in NZ is rich. Living here is a breeze.

You're a prime example of fungus's guiding mantra 'learn to live below your means'. If you do that, you will have a surplus, which, no matter how small, will snowball through the magic of compound interest. Anyone adopting this simple pracise cannot possibly fail to eventually become financially independent. And practised long enough, will actually become wealthy.

[iamaskier]

I fail to see how somebody's parents working smart and hard and passing something to children is anything wrong? There's plenty of opportunities to do this nowadays. My parents had nothing, gave me nothing and I am on my way to retire by 45. I do it by sacrificing and working harder than others. Anyone can do it, literally anyone. I came here, had nothing, lived in car and worked at kiwi orchards. 5 years later I own my own property and invest in stocks.

There is full equality of opportunity. If you're poor in NZ, it's by choice. That's a fact. Coming from post soviet country, I can tell you anyone living on minimum wage in NZ is rich. Living here is a breeze.

Honestly - good on you. It sure sounds like you are more driven and have a better work ethic than most.

Probably a fair few more years living out of a car to afford a deposit nowadays though right? Average house price in NZ has apparently doubled since 2013 (https://www.newshub.co.nz/home/money...it-market.html).

I really don't understand how people can think this is a desirable situation overall. If we're looking to avoid creating massive societal problems for ourselves, the average kiwi needs to be able to afford a home in NZ without sacrificing everything (including kids). I mean what are we saying here? That the best way of getting ahead unfortunately means we have to burden the new market entrants with more than we did ourselves? Where does this end?

[SBQ]

"While many legislators have pushed for raising the minimum wage, with more and more cities across the US roll out higher minimum wage laws, Buffett does not favor this solution. In an op-ed for the Wall Street Journal in 2015, Buffett wrote that raising the minimum wage would actually create more problems for our market system.

Instead, he offers a different way to help and incentivize struggling Americans.

“The Earned Income Tax Credit is the single best way,” Buffett said."
https://finance.yahoo.com/news/warre...150507164.html

Unfortunately NZ has a similar program but grossly ineffective:

https://www.ird.govt.nz/working-for-.../payment-types

This is a payment if your annual family income is $30,576 or less after tax. It tops up your family's income to at least $588 a week after tax. To get this payment you must work for salary or wages and not be self-employed. A single parent must work at least 20 hours a week. In a two parent family, one or both parents between them, must work at least 30 hours a week.

The EITC in the US applies to INDIVIDUALS and not based on NZ's subsidy which is based on having children. Anotherwords, only families are eligible in NZ.

Hope this is not getting too off topic but at least great discussion and relevent to the problems we have in NZ.

[SBQ]

Honestly - good on you. It sure sounds like you are more driven and have a better work ethic than most.

Probably a fair few more years living out of a car to afford a deposit nowadays though right? Average house price in NZ has apparently doubled since 2013 (https://www.newshub.co.nz/home/money...it-market.html).

I really don't understand how people can think this is a desirable situation overall. If we're looking to avoid creating massive societal problems for ourselves, the average kiwi needs to be able to afford a home in NZ without sacrificing everything (including kids). I mean what are we saying here? That the best way of getting ahead unfortunately means we have to burden the new market entrants with more than we did ourselves? Where does this end?

Those in peetter's camp may not know it or see the problem of higher house prices having an affect on society. Why would they when they have the house(s) and their children will get the benefit? I myself have already noticed how bad things are around NZ with a high % of private schools, the wide use of private health care by the rich, hell there's no reason for those people in that camp to ever care about the future of the 'have nots'.

I'm not buying this excuse that NZ's situation of high housing prices is no different to abroad. My Cdn roots can't help express how bad this situation is in NZ (exemplified in the following link):

https://www.cbc.ca/news/canada/milen...emic-1.5726557

The NZ Green Party proposed a wealth tax but it would hit nearly 50% of the NZ's population. Maybe over time it may be scaled back. The real problem is NZ's wealth is mostly held in real estate vs in Canada, most of the wealth is held in businesses and stock ownership. The top 10% of the rich in NZ pretty much comprise their wealth in real estate - a tough issue if the Green Party wants to impose a wealth tax. (far easier to tax bank accounts and investments in stocks and bonds than large physical assets like houses).

[ynot]

Although I commend peetters efforts I also agree with you 100% SBQ. Timing is often everything when it comes to investment and no doubt peetter would have a bigger challenge on his hands if he was starting out today. Its fairly obvious today that many young kiwis as stareing down the barrel of an insurmountable challenge to enter the propery market.
I always believed in the past that with some effort, attaining your own home in NZ was almost a birthright, and whats more should be any elected governments priority to ensure this is possible.
Kiwi governments have failed Kiwis miserably.

[iamaskier]

Those in peetter's camp may not know it or see the problem of higher house prices having an affect on society. Why would they when they have the house(s) and their children will get the benefit? I myself have already noticed how bad things are around NZ with a high % of private schools, the wide use of private health care by the rich, hell there's no reason for those people in that camp to ever care about the future of the 'have nots'.

I am kind of perplexed by this though, in the sense that I don't feel like ones social circle has to be particularly large in order to see the effects of this first hand. And even if not, it's not really hard to think through.

Personally, I've seen the value of property go up hugely but it honestly brings me zero joy while I watch friends who would meet any definition of "good with money" struggle to get on the ladder because they didn't buy 3 years ago or had a kid so were down to 1 income for a bit or had the audacity to work and travel for a year or two or any number of other things that have suddenly become barriers. How are we prepared to accept this?

PS I spent a year work/travel in Canada, absolutely loved it - incredible experience - ultimately got lucky with the timing is all.

PSS. peetter, my comment is more about the state of affairs in general.

[peetter]

I should probably clarify couple things.

I lived in a car because I wanted to, not because I had to. It was only for couple months and one of the best experiences. Living like this allows you to travel and save at incredible rate. And I just bought this year, so you'd be wrong if you think I'd change my opinion if I was just starting. I am actually starting on my way to get deposit on investment property.

I don't think the house prices should rise in a rate they do now. I think healthy growth between 3-7% should be the goal. However I don't blame landlords one bit for the prices. The blame is 100% on governments. The issue is not of people investing in housing, rentals are necessary. People need rentals for various reasons. The issue is with building regulations, NZ approach to living in houses and goverments ignoring the issue. What current government is doing is shameful shifting of blame to people who provide rental accomodation in a time when there's 20000 people on HNZ waitlist. I don't think Labour made the crisis. They just ignored it and instead of trying to solve it they are now panicking and trying to use envy to redirect public anger to somebody else. This is disgusting.