Property costs in NZ - the heart of evil

[BoristheBiter]

With a bit of luck that may not happen soon...

With the way they're going it might be sooner then we think.

[Indiana_Jones]

So anyone without a house/not a baby boomer is pretty much fucked? ....yay

-Indy

[Winston001]

Every other business can clain losses against income so why can't landlords?

There is a real shortage of good rental properties at the moment and I don't see this changing for at least 20 years. The LAQC status was introduced when their was no rentals available and the govt didnt have the money to make new state houses. I do expect without any adjustments for inflation that the real rental prices to go up from 20-30%.

Sucks to not own a home, but now is the time IMHO!

OK reality check. The Loss Attributing Company was introduced to enable small businessmen to combine their business income and losses with their personal income from part-time jobs. Nobody including me ever thought property buyers would grab on to it.

I just hope you have it all locked up in a trust so when you get means tested you are covered as when Labour get back in they will put on CGT.

Yes you are correct it is supply and demand, doesn't make it right and it has been led by greed.

A Capital Gains Tax will treat everyone the same: holding your property in an LAQC will not evade the tax.

As for greed, I can't agree. The people you are referring to are ordinary mums and dads who have worked hard and gone without in order to buy a second property. That is no different to them buying a unit trust or investing in Kiwisaver. Just ordinary people trying to secure their future.

On another thread you'll find younger members stridently calling for the end of national superannuation. So on the one hand, save as much as you can, on the other, expect your children to strip your efforts away.

Fk why bother. Honestly I want to give up at times.

[jonbuoy]

You can´t really blame people for investing in property, re-mortgaging their own property to buy investments works as long as house prices rise - if there is a crash or the bubble bursts it can backfire badly - take a look at Spain. The government hadn´t borrowed like Greece had until they had to absorb all the toxic (negative equity) debts that 100% mortgages and "property is rock solid can´t fail" investing had brought about.

For a long time people really couldn´t loose with property - buy a house now, sell it in 10 years for 50% more. In the old school banking system it used to be they would only lend 3.5 times your annual wage for a mortgage. With the average house price of over $500K you need a lot more than the average wage of $70K in Auckland to afford an average house or a near 50% Deposit. Something has to give long term, the bubble will pop.

[schrodingers cat]

It is a nice idea to invest money into other things than property.
Its just that so much greed and white collar theft makes it unattractive to me.
If the market tanks I'd rather have a house I could live in than some cunts Lamborgini that I'll never get to drive

[sidecar bob]

I had three rental properties, but the constant stream of helpless no hope losers that represents the average tenant these days drove me fuckin nuts. So instead of providing cheap rental housing on behalf of a government that stacks the law in favour of some broke gutless tenant, I sold them all & put the lot into one home that I could enjoy.
The retirement plan (or a small part of it) is to sell the home & buy something for between a third & quater of the value & have some cash.
It sure beats being a landlord.

[BoristheBiter]

I had three rental properties, but the constant stream of helpless no hope losers that represents the average tenant these days drove me fuckin nuts. So instead of providing cheap rental housing on behalf of a government that stacks the law in favour of some broke gutless tenant, I sold them all & put the lot into one home that I could enjoy.
The retirement plan (or a small part of it) is to sell the home & buy something for between a third & quater of the value & have some cash.
It sure beats being a landlord.

When it comes time me to retire I will sell all my assets and go on a massive 10 year party around the world.
If I return I will go and rob a bank or similar as If they don't catch me I can carry on if not then they will stuck me in jail where i will get fed, watered and clothed as well as get free TV.

It's more than i can expect from the pension.

[SPman]

http://thejackalman.blogspot.com.au/...-to-blame.html

[waspnz]

Does anybody else here think that property costs are what is bringing NZ down and making it unlivable?

Hear me out: Tax favours property ownerhsip instead of ownership in shares/bonds/business ventures etc. So speculators buy property and make money from it, to buy more property. Everybody who can invest anything does it. Nobody invests in industry, so no jobs get created. Demand for property is kept high by the speculative buying so property prices inflate. As they inflate, more people buy property for the capital gains, inflating it further. In the meantime, rents also start going up because the poor cant afford to buy and demand increases for rentals. In fact, nobody can afford to buy except those who started off rich or who owned a house before they got too expensive.

Also, nobody develops new housing when tehy can just buy existing housing without risk for immediate profits and capaital gains. Only home owners build their own houses, because they want what they want and are prepared to wait for it. So eventually there is not enough housing for an expanding population, making house prices and rent more expensive.

Now nobody can afford to buy or rent, and they bugger off to Australia because they cant afford to get by on the low wages (because there is not much productive industry going on from lack of new buisiness development) and cannot afford to live here. In the meantime the few in established busnesses with monopolies (like Countdown) are making lots of money because there is not much competition, and they can pay low wages because there is not much competition, and not enough disposable income in anybody's pockets to drive new startup busineses.

This causes the separation of the classes out into extremes of the rich and the poor. Except that the rich are screwing themselves because the costs of living (especially rent or mortgages) are so high that even theoretically middle class salaries are struggling to get by. Even the middle classes start looking to leave, leaving even fewer entrepreneurs to start new businesses. Soon the whole country will be living in OZ, or looking to live in Oz and whoever is left wont be able to afford to live, or wont provide a market big enough for new busineses, or to compete with old businesses.

Instead, if the government took away all the incentives to invest in property, and made shitloads of land available for development (and maybe incentivinsing development - not ownership- of land), this would happen:
Property prices would fall a lot
Speculative property owners would sell their properties fast - and maybe invest in housing development (i.e. business) ventures instead, to make housing even more affordable for all
the cost of housing would fall
the costs of rent would fall
People would have more disposable income, thereby allowing newly formed busness ventures to have a better chance of succeeding
Reduced commercial rent would also give new businesses more chance of turning a profit.
Liquidity from sale of houses would be invested in new businesses that provide competition to the current single or double players, and make the costs of living and renting (commercial stores too) even cheaper.
Lifestyles in NZ would be btter because we would be able to own our own houses, and have decent sized houses and land for reasonable prices - sop less people would leave because they would not get the same lifestyles in Oz.


FFS the one thing that we do have shitloads of in NZ is space, and yet we pay the most for land (at least as a ration of our salaries)- even worse than in NEW FUCKING YORK?

High property prices and speculative property ownership are obviously the root of all the problems here right now,but nobody in government has the balls to piss off the property owners, probably because they own a good few properties themselves...

I will vote for the next party who promises to drive property prices down. If I am still here...
*Rant over*

Excellent, well written.

[Indiana_Jones]

Prices are still shit, never gonna own a house at this rate.

Even more so when the government considers a 400k house affordable.....we're fucked aye lol.

-Indy

[Jantar]

As long as people only want to live in high price areas like Auckland then they can't complain about the cost of housing. There are still plenty of properties available in other parts of the coutry at less than half that Auckland price.

[Indiana_Jones]

As soon as I can get a transfer I'm fucking leaving Auckland. It's made it quite clear that people aren't welcome to buy homes there!

-Indy

[Swoop]

I'm stoked! The lawyer said that my house price has gone up by at least $150K recently!

[merv]

SpearFish basically said this a few pages back but remember the usual motto with housing is that there is no cheaper price than now (a few fluctuations aside), so those that sit and keep watching the prices go up while paying rent will find it harder in future. Best bet is get in early, buy yourself a cheap box, pay it off quick and then start using that as leverage to buy a better place.

As for the $400k house, what is the issue? - I'm old so remember buying our first house in 1978 for $40k when me and Mrs were both in our early 20s - salary then was about $4,500. So a $400k house is ten times the price, but sure as hell most people are on $45k or better now at a similar stage of life to what me and Mrs were then i.e. ten times the salary - so what's the problem.

Even on my measly salary at the time I think the upper tax rate was 48 cents in the $. That is way less now. The other thing is the cost of goods. Relative to our salaries then things like whiteware were expensive and so were TVs etc. The youth of today don't know how well off they are - the problem then being they want it all now - whereas then we waited four years until we could afford a dishwasher for example and didn't buy our first TV and VCR for six years.

I suspect what is happening now is that most aren't spending wisely through their 20s and when they reach 30s or later with no house the sinking feeling sets in - they've left it too late to have what other people their age have who may have invested more wisely earlier.

There is no evil about property - just get in early and move up as you can.

[James Deuce]

I suspect what is happening now is that most aren't spending wisely through their 20s and when they reach 30s or later with no house the sinking feeling sets in - they've left it too late to have what other people their age have who may have invested more wisely earlier.

That and the student loan thing and the insistence that women have to have a career at the expense of family only to find that their bits don't work in their early thirties they way they expected them too, so the house goes on hold while the fertility issues are addressed (massively expensive) - there are a large range of drivers for late house ownership adoption, coupled with a conservative attitude to house ownership that is suggesting it is better to rent (from your well-off conservative landlord) and invest your money in your landlord's businesses rather than buy.

One listens to the young-uns in horror sometimes.