Originally Posted by
The Stranger
Yeah, I really couldn't get that.
I noted 2 issues at the time the change was mooted.
1) 35% of our housing stock is rental. Fucking with that (and getting it wrong) has dire consequences for a lot of people.
2) The tax break was a neat and effective way of subsidising those those that can least afford housing. Removal of this was only going to result in one thing. Landlords seeking to recover cost from the tenant.
Oh well, what would I know? Perhaps user pays is actually a better system?
Ok, another prediction.
It's (rental prices) going to get a fuck site worse loooonnnng before it gets any better.
1) Banks have cracked down on lending, so buying is difficult. More people renting.
2) Demand for rental as a result of earthquakes is increasing.
3) Building product prices have increased already in response to Christchurch much of it 10-15%.
4) Japan will take what it needs to rebuild. Think milk - if Japan pays (say) $10.00 a meter for 4x2 guess what we will be paying? That's right $10.00 a meter. 10-15% materials cost increases are just the beginning.
5) As a result of this all of this FA new houses will be being built in Auckland - or anywhere other than Christchurch for a few years.
Inflation
Is going to take off.
The money supply is about to expand. EQC, re-insurance, RWC and dairy exports are going to add to the money supply.
Companies rebuilding Chch are going to be making money.
Tradesmen are going to be employed and demand will drive wages up (in time).
The cost of building in terms of both materials and labour is going to increase significantly.
House affordability will suffer significantly even from where it is now - placing more demand on rental accommodation.
What does this mean?
Well 5yrs from now a $400,000.00 house will be worth $500,000.00 (this is NOT unprecedented in our history and it could well be more) AND for most of that 5yrs we will see a comparatively unusual situation where rent will cover the cost of a mortgage (then some).
i.e. If one were to buy a $400k house now it will cost say $30k PA in interest assuming one were to borrow the lot (allowing for interest rate increases which will come as the RB try in vane to reign in inflation) and rents will be at or about $35k PA.
If you can, buy now. If you can't, prey.
Couldn't agree more. Those with cash and cashflow have numerous opportunities on their hands. Those with access to cheap construction even more so. Those with neither, well good luck to them getting a house anytime soon. Comes back to productivity ultimately, increase our productivity, businesses make more money which ups incomes allowing income/house price ratio to be much more favourable to new home buyers.
Nail your colours to the mast that all may look upon them and know who you are.
It takes a big man to cry...and an even bigger man to laugh at that man.
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He reckons it's to target people who want somewhere for RWC
Opinions are like arseholes: Everybody has got one, but that doesn't mean you got to air it in public all the time....
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