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New Zealand Passes Law to Crack Down on Foreign Home Buyers

bloomberg.com

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Re: New Zealand Passes Law to Crack Down on Foreign Home Buyers

#41

Post by zzleeper »

briandear wrote: post #11
Tiktaalik wrote: post #3

Seems reasonable to me. Housing should be for housing people, not a speculative financial investment. It's reasonable for cities to ask that people show that they have some skin in the game, that they're living, working, paying taxes and contributing to and enhancing the community.

If they own a house, they are paying taxes, so they do have significant skin in the game. They pay property taxes despite not using the local schools or most other city services. As far as not allowing housing as a speculative financial investment, there are some significant unintended consequences there.

In many countries, property taxes are local and don't go to schools (which have funding from income taxes i.e. from the state).

So it's not like the foreign investors are beneficial in any way, besides maybe paying their bit of water/electricity/police costs (and if they only pay their share, then why bother accomodating all the volatility to house prices they bring?)

Re: New Zealand Passes Law to Crack Down on Foreign Home Buyers

#42

Post by aero142 »

davidw wrote: post #28
ebikelaw wrote: post #24

Western cities have only themselves to blame for turning housing into an appreciating asset. Housing is not supposed to appreciate and if it does not then nobody would speculate in it. In cities where they just build housing, like Vienna (typical rent ~1000 Euros/mo), they don’t have a need of these kinds of laws.

Ding ding ding, we have a winnner! Housing can't both be affordable and an 'investment' that always appreciates in value. Focusing on 'the foreigners' is not addressing the root cause of the problem.

And what would address the root of the problem?

Re: New Zealand Passes Law to Crack Down on Foreign Home Buyers

#43

Post by tdb7893 »

lawnchair_larry wrote: post #15

Good move. More cities need to adopt this. There is a flood of foreign capital into major western cities that is hurting those economies. And a lot of denial that this is happening.

As much as I like this solution it always seemed to me that if the problem was too many people buying houses the best thing to do would be to build more houses.

Re: New Zealand Passes Law to Crack Down on Foreign Home Buyers

#44

Post by twothamendment »

breitling wrote: post #20

Hope the Canadian government learns from this. We desperately need it. (ya, I know I know there will be trickle down impact of so much foreign money pulling out, but average home price of $1.36MM is unbelievable for the local salaries)

If they do, maybe the USA will learn from Canada. In my area the Canadians are the ones buying stuff up. Other than property taxes, their contribution is to all show up on the same weekend and empty the grocery store shelves - and driving up prices.

Re: New Zealand Passes Law to Crack Down on Foreign Home Buyers

#45

Post by isostatic »

munificent wrote: post #39
isostatic wrote: post #33

Earlier quoted context omitted.

Local owns house they bought 20 years ago for $50k Local sells to foreign buyer for $500k Local has lots of money

Local still needs to live somewhere Local buys an equivalent house to the one they sold for $500k + transaction fees, which scale based on the price of the house Local has less money than when they started

Not when the local is downsizieng from a 4 bed house and garden to a 2 bed apartment for retirement, or they simply die and it's local's kids that sell it.

There's a simple solution to avoiding buying in expensive locations though - buy in cheap locations.

Re: New Zealand Passes Law to Crack Down on Foreign Home Buyers

#46

Post by nerfhammer »

tdb7893 wrote: post #43
lawnchair_larry wrote: post #15

Good move. More cities need to adopt this. There is a flood of foreign capital into major western cities that is hurting those economies. And a lot of denial that this is happening.

As much as I like this solution it always seemed to me that if the problem was too many people buying houses the best thing to do would be to build more houses.

The reason it's an attractive investment is because such investors expect that cities will never allow this and never allow prices to fall.

Re: New Zealand Passes Law to Crack Down on Foreign Home Buyers

#47

Post by isostatic »

sametmax wrote: post #40
isostatic wrote: post #33

Earlier quoted context omitted.

Local owns house they bought 20 years ago for $50k Local sells to foreign buyer for $500k Local has lots of money

Local kids can't buy house and is renting forever at unreasonable price. The world is not just about giving everyone the opportunity to become rich. Just making a decent living for most is a nice objective.

Why would they pay an unreasonable price? It's clearly reasonable for the person paying the rent.

Re: New Zealand Passes Law to Crack Down on Foreign Home Buyers

#48

Post by Apocryphon »

aero142 wrote: post #42
davidw wrote: post #28

Earlier quoted context omitted.

Ding ding ding, we have a winnner! Housing can't both be affordable and an 'investment' that always appreciates in value. Focusing on 'the foreigners' is not addressing the root cause of the problem.

And what would address the root of the problem?

In the long-term, building more housing. In the short-term, cracking on speculators seems sensible.

Re: New Zealand Passes Law to Crack Down on Foreign Home Buyers

#49

Post by munificent »

ebikelaw wrote: post #24

Western cities have only themselves to blame for turning housing into an appreciating asset. Housing is not supposed to appreciate and if it does not then nobody would speculate in it. In cities where they just build housing, like Vienna (typical rent ~1000 Euros/mo), they don’t have a need of these kinds of laws.

I don't think it's fair to blame cities for what is a nationwide problem. The entire economy is shifting from farming and production to a service economy. The former provided incentives for people to be widely distributed across a number of small cities and town. The latter does not, so there is a mass migration to cities. It's happening faster than the infrastructure, zoning, and physical layout of the cities can adapt to accommodate.

This is a hard problem, and isn't made easier by moralizing, which seems to happen heavily on both sides.

Personally, in the US, I think we'd be better off trying to make our mid-sized cities more desirable than turning our handful of large cities into giant skyscraper-filled concrete grids. We have plenty of space for everyone in the US. The problem is people all want to live in an increasingly small fraction of it. Increasing the density of that tiny fraction while the rest of the country empties out doesn't seem great to me.

Re: New Zealand Passes Law to Crack Down on Foreign Home Buyers

#50

Post by dpiers »

goodJobWalrus wrote: post #31
pc86 wrote: post #18

Earlier quoted context omitted.

Are you suggesting the government steal their property?

No, but it could implement hefty property tax on properties owned by non-residents.

And then those hefty taxes will be passed on in the form of rent. The non-resident never ends up on the hook.
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