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New Zealand Passes Law to Crack Down on Foreign Home Buyers

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

#101

Post by sgolestane »

Tiktaalik wrote: post #61
weberc2 wrote: post #51

Earlier quoted context omitted.

Forgive my ignorance, but if you're investing in property, don't you have "skin in the game"? Presumably it's in your interest that the community thrives, because that will help drive up property values (increasing your ROI)? This is just my naive intuition, so please correct me. EDIT: Downvoters, what gives? Just asking a question...

Skin in the game means participating in the community and the local economy. An investor doesn't buy groceries at the local store, doesn't go to local music venues etc. They help out the construction industry and the FIRE (finance, insurance, real estate) industry, but local neighbourhoods weakly benefit.

Investor pays property tax without using any of it's benefits.

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

#102

Post by shady-lady »

isostatic wrote: post #47
sametmax wrote: post #40

Earlier quoted context omitted.

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.

> It's clearly reasonable for the person paying the rent

How so? They may not have an option to not pay it(as we're seeing happen in cities all over the world)

Definition of reasonable[https://www.merriam-webster.com/dictionary/reasonable]

1 a : being in accordance with reason - a reasonable theory

b : not extreme or excessive - reasonable requests

c : moderate, fair - a reasonable chance a reasonable price

d : inexpensive

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

#103

Post by stale2002 »

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?

Well the solution would be to reject the idea that housing is an investment, and do whatever we can to crash the housing market. For example, by building a whole lot of houses.

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

#104

Post by onetimemanytime »

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.

So if John Doe buys a $10 million home just to have, the NZ economy is not benefiting? Just build more

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

#105

Post by stale2002 »

munificent wrote: post #49
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 ad…

I mean, what's wrong with SOME cities being giant skyscraper filled grids?

Personally I would love to live in that kind of city. And apparently this is also true for a lot of other people.

The low density people have 99% of the world to live in. Why can't us high density people get the 1% that WE want?

Let's just let everyone live how they want. There is more than space for both skyscrapers and suburbs.

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

#106

Post by sdinsn »

bovermyer wrote: post #2

Housing was already expensive in 2000, well before the current "foreign invasion." Perhaps they should try reducing the red tape required to build new homes.

According to the Case-Shiller U.S. Home Price Index, house prices are almost 2x as high as Jan 2000. Is that not a significant increase to you (inflation was 1.5x during this time)? And that is an average, as urban areas have experienced fast growth.

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

#107

Post by kodablah »

amanaplanacanal wrote: post #85
kodablah wrote: post #72

Earlier quoted context omitted.

> 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.

I'm seeing, also at least in the US, a combination of remote work and business moving out of the confines of a large metro's downtown into the sprawl themselves. This reduces commute. I'm also seeing more inter-burb infrastructure becoming private and not relying on funds from the municipalities they traverse. I feel like inner city space is more constrained than outer city budgets.

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

#108

Post by dahdum »

user5994461 wrote: post #91
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…

This makes no sense. Rents are not linked to the costs of property. They are fixed to as much as local people can pay for a home, roughly 50% of typical household income everywhere in the developed world. The ROI is the +appreciation + rent - expenses. If the property depreciates you have least return on investment. There is nothing you can do about it. You can't increase rent to compensate, people can't pay more ren…

Rents are definitely linked, until discretionary income for the local people goes to zero they can still pay more. Housing prices also affect mortgage payments, which rise in tandem.

Looking it up, I see USA is somewhere around 30% of income [1] as housing cost, while NZ is about 17% [2]. Seems to indicate there is room to grow under tight supply conditions.

[1] https://www.businessinsider.com/how-to-save-more-money-2017-...

[2] https://www.stats.govt.nz/information-releases/household-inc...

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

#109

Post by dang »

nasoieu wrote: post #99
antisthenes wrote: post #16

Sounds like pulling up the ladder after all the people who bought the houses already climbed it. What about all the people who have already purchased and are just holding onto an empty house for speculative reasons?

They can go fuck themselves.

Please don't.

https://news.ycombinator.com/newsguidelines.html

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

#110

Post by [deleted] »

dahdum wrote: post #108
user5994461 wrote: post #91

Earlier quoted context omitted.

This makes no sense. Rents are not linked to the costs of property. They are fixed to as much as local people can pay for a home, roughly 50% of typical household income everywhere in the developed world. The ROI is the +appreciation + rent - expenses. If the property depreciates you have least return on investment. There is nothing you can do about it. You can't increase rent to compensate, people can't pay more ren…

Rents are definitely linked, until discretionary income for the local people goes to zero they can still pay more. Housing prices also affect mortgage payments, which rise in tandem. Looking it up, I see USA is somewhere around 30% of income [1] as housing cost, while NZ is about 17% [2]. Seems to indicate there is room to grow under tight supply conditions. [1] https://www.businessinsider.com/how-to-save-more-money-…

[deleted]
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