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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

#81

Post by lostlogin »

isostatic wrote: post #45
munificent wrote: post #39

Earlier quoted context omitted.

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.

There aren’t any cheap locations. Fractionally less expensive, but still many multiples of a yearly wage.

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

#82

Post by nedwin »

toby wrote: post #70
Tiktaalik wrote: post #54

Earlier quoted context omitted.

The problem with absenteeism is that while taxes are still being paid to maintain city services, the city doesn't function correctly, because there's weak street life. Here's an article about the struggles of retailers in Vancouver's Coal Harbour neighbourhood, which has estimates of around 20-25% empty housing. https://www.theglobeandmail.com/real-estate/at-vancouvers-co...

Vancouver has a vacancy tax, which strikes me as a really good idea to avoid these problems. Does anyone know why these aren't more popular?

I can imagine they're difficult to enforce.

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

#83

Post by refurb »

toby wrote: post #70
Tiktaalik wrote: post #54

Earlier quoted context omitted.

The problem with absenteeism is that while taxes are still being paid to maintain city services, the city doesn't function correctly, because there's weak street life. Here's an article about the struggles of retailers in Vancouver's Coal Harbour neighbourhood, which has estimates of around 20-25% empty housing. https://www.theglobeandmail.com/real-estate/at-vancouvers-co...

Vancouver has a vacancy tax, which strikes me as a really good idea to avoid these problems. Does anyone know why these aren't more popular?

Enforcement? People gaming the system so it doesn’t look unoccupied?

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

#84

Post by refurb »

saltcured wrote: post #73
briandear wrote: post #11

Earlier quoted context omitted.

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.

Yes, what is the target problem really? Do you want to ban vacant or mostly vacant housing stock for its constriction of housing supplies? Why only foreign owned? Don't vacant holiday or investment homes of residents have the same impact? Do you also want to ban renter occupied homes where a landlord is profiting excessively? How do you define excessive? Why only foreign landlords? Don't domestic landlords have the s…

Why only foreign owned? Don't vacant holiday or investment homes of residents have the same impact?

This happened in BC, Canada. It’s a popular spot for vacation homes for Canadians, this they get slammed with a tax as well.

Govt backed down and created exemptions for large swaths of BC.

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

#85

Post by amanaplanacanal »

kodablah wrote: post #72
wepple wrote: post #62

Earlier quoted context omitted.

Sounds like a great idea, but NZ is struggling to build fast enough. NZ has a terrible attitude where everyone must have a backyard, and public transport is horrendous, so moving further out often isn’t much of a solution. The current govt promised to build ambitious numbers of new affordable homes, but I haven’t seen any strategy on how they plan to execute on it.

> NZ has a terrible attitude where everyone must have a backyard, and public transport is horrendous, so moving further out often isn’t much of a solution. Oddly enough, other places with that attitude are the same ones where moving further out is a solution. Pejoratively dubbed "sprawl", there is less focus on centralized things like limited property sizes and intra-city public transportation. If the land is availab…

Moving farther out has its own set of problems: longer commutes, and much costlier infrastructure. At least in the US, outlying areas frequently don't pay enough in property taxes to maintain the amount of infrastructure necessary to reach those outlying areas, putting strain on municipal budgets. Nobody wants to pay more taxes.

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

#86

Post by sjg007 »

jpollock wrote: post #53
user5994461 wrote: post #14

Earlier quoted context omitted.

The tenant covers all the taxes and costs through his rent.

No, they do not, they only cover a portion. As the owner of a New Zealand investment property... In NZ, ROI on property is targeted to be around 8% [3]. The owner will take that ROI either in capital increase or in rent. [2] If the property is appreciating, the rents will be allowed to slow down. If the property stops appreciating, then the rents increase to maintain the ROI. The entire market is targeted at 8%, part…

Weird.. you can build a house in the upper midwest USA for 200k. That's land + all of the regulations etc... Condos should be cheaper per unit too. But like everywhere there is a construction labor shortage. I would hope that the kids gets into construction, at least as a summer job or something while pursuing education.

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

#87

Post by ggcdn »

toby wrote: post #70
Tiktaalik wrote: post #54

Earlier quoted context omitted.

The problem with absenteeism is that while taxes are still being paid to maintain city services, the city doesn't function correctly, because there's weak street life. Here's an article about the struggles of retailers in Vancouver's Coal Harbour neighbourhood, which has estimates of around 20-25% empty housing. https://www.theglobeandmail.com/real-estate/at-vancouvers-co...

Vancouver has a vacancy tax, which strikes me as a really good idea to avoid these problems. Does anyone know why these aren't more popular?

I agree with you that it seems like a good idea. However, the vacancy tax is still in its infancy, so we've yet to fully understand its effectiveness or side-effects. A big issue around the housing discussion in Vancouver is the lack of data and amount of misinformation being injected into the discussion.

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

#88

Post by refurb »

wepple wrote: post #66

To add some context: NZ regularly rates in the top 10 least affordable cities to buy a house. The last stat I saw was that median house prices were 9.7x median salary. That’s absurd for a relatively small city of 1.4m people. It has further negative effects: everyone gets into property as their only real path to financial freedom, with 95% of new loans using family financial assistance. It’s stifling innovation and b…

It’s no different in Canada. Yes, foreigners are buying property, but Canadians are doing an awesome job over-extending themselves on real estate including getting help from “The bank of Mom” for down payments.

All in the name of “real estate always goes up” and “if I don’t buy now I’ll never be able to”.

I don’t think it’s going to end well.

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

#89

Post by sjg007 »

wepple wrote: post #66

To add some context: NZ regularly rates in the top 10 least affordable cities to buy a house. The last stat I saw was that median house prices were 9.7x median salary. That’s absurd for a relatively small city of 1.4m people. It has further negative effects: everyone gets into property as their only real path to financial freedom, with 95% of new loans using family financial assistance. It’s stifling innovation and b…

NZ is a country.. not a city.

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

#90

Post by seanmcdirmid »

sjg007 wrote: post #86
jpollock wrote: post #53

Earlier quoted context omitted.

No, they do not, they only cover a portion. As the owner of a New Zealand investment property... In NZ, ROI on property is targeted to be around 8% [3]. The owner will take that ROI either in capital increase or in rent. [2] If the property is appreciating, the rents will be allowed to slow down. If the property stops appreciating, then the rents increase to maintain the ROI. The entire market is targeted at 8%, part…

Weird.. you can build a house in the upper midwest USA for 200k. That's land + all of the regulations etc... Condos should be cheaper per unit too. But like everywhere there is a construction labor shortage. I would hope that the kids gets into construction, at least as a summer job or something while pursuing education.

Finding young unskilled apprentices for construction work is easy, finding experienced skilled journeymen is hard because most of them leave the field during each construction bust.

You just can’t make a career out of construction with the current boom and bust way the cycle is going.

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