Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

New Zealand Passes Law to Crack Down on Foreign Home Buyers

bloomberg.com

Post reply on HN
Print view View original

111–120 of 178 posts

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

#111

Post by indemnity »

lostlogin wrote: post #74
seanmcdirmid wrote: post #23

Earlier quoted context omitted.

Ya, property taxes should act against such behavior, but many places like Vancouver lack one. Not sure about NZ, but it seems like property taxes are more of an American thing. Edit: oops, Canada does have a property tax, and New Zealand has something like it. So it’s just Australia (on first residences) and the UK that don’t. Well, China also. I’ll take my downvotes gracefully.

There are property taxes here in New Zealand, known as ‘rates’. You can look up what they are for a property and get an idea of the property value on local government websites. https://www.aucklandcouncil.govt.nz/property-rates-valuation...

They are absolutely minimal though, works out to about 0.23% of value (aware that’s not the only component) for us in Auckland.

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

#112

Post by indemnity »

sjg007 wrote: post #89
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.

We’re working on making the rest of NZ Auckland too ;)

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

#113

Post by weberc2 »

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.

That's not what "skin in the game" means, and presumably these properties are being rented, in which case the renters are still buying groceries, etc.?

Again, I'm not advocating for foreign investors; just trying to understand the problem.

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

#114

Post by sitharus »

sgolestane wrote: post #101
Tiktaalik wrote: post #61

Earlier quoted context omitted.

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.

No they don’t, their tenants pay the property tax. I own a rental property in New Zealand (not out of choice, long story) and the rates are paid from the rent. I don’t chuck in the extra $120/month from my other income.

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

#115

Post by indemnity »

stale2002 wrote: post #105
munificent wrote: post #49

Earlier quoted context omitted.

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.

Do you have kids yet? I lived in such cities from when I left home at 17 until 36, but the arrival of kids... well, I want them to have a yard to play in, in a chilled neighbourhood, close to the beach and hikes, etc.

As well as more room so they can all have their own bedroom, we can have a family area, etc.

When they leave the house, I’d probably move back to the city to an apartment.

In essence, I’m agreeing with you but I think it also depends which life stage you are in as to what you prefer.

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

#116

Post by weberc2 »

kazinator wrote: post #59
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...

Some people just want a roof over their head without paying rent to a landlord and being subject to their whims.

So the issue is that foreign investors are significantly driving up the cost of real estate, making home ownership prohibitively expensive for locals? Has anyone quantified the impact in various regions?

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

#117

Post by sitharus »

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…

As another New Zealander with an investment property I thought the government closed the loss-making rental loophole s few years back. You can’t use rental losses to offset personal tax so why would you rent at a loss?

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

#118

Post by indemnity »

dpiers wrote: post #50
goodJobWalrus wrote: post #31

Earlier quoted context omitted.

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.

I don’t understand when people believe this - as an owner of an investment property in Auckland, NZ, I almost never can just pass on increases to my tenants, unless I want long stretches of no tenants, even with the shortage as it stands.

The market dictates what I can charge.

And if I have good tenants I’d rather keep them than immediately try to recover costs.

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

#119

Post by John_KZ »

Good. Every country needs such laws. From NZ to London to Spain to Iceland.

If you live in a place and earn your income there you should be able to buy or rent residential property. Otherwise you have no business exploiting the inflexibility of the market to adjust the available housing. Rent is becoming an indirect tax to the rich in many major metropolitan areas around the world. And it's massive, often up to 50% of the median wage.

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

#120

Post by kovrik »

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.

My opinion may be controversial, but I never understood this logic... I live in New Zealand at the moment. I am not Kiwi though, my wife and I moved from Russia. And I disagree.

First, stats show that foreign buyers own ~3% of homes. Everything else is kiwi-owned.

Second, there is another thing going on here -- KiwiBuild. Basically, government funds and builds 'affordable houses'. Prices (in NZD) are $500-650k, but now they want to have even more affordable houses - $300k. For comparison, actual average house price in Auckland is above $1kk.

My wife and I work really hard, NZ is not our country, English is not our language, the culture is different, we have nothing to inherit here. Why should we pay (with our taxes) for poor kiwis who can't afford a house? Shouldn't they work harder instead? Get education, get better job.

We wish we could buy a $1kk+ house in Auckland too, but we can't. If you can't afford a house, then buy an apartment because they are much cheaper. Yes, it is not that fancy, but at least you'll have a place to live in.

I mean, yeah, Labour party is in power in NZ at the moment, hence such policies like 'Let's increase salaries to poor workers, let's give them houses, let's increase maternity leave etc.'. The problem is that somebody has to pay for that.

UPD: another problem in my opinion is that Kiwi culture is very different. NZ is isolated from the rest of the world. It is very quiet here, people are very relaxed, everything goes slow. People are not used to work hard (in my opinion). It is common here to spend a year or two doing nothing, just traveling around the world after graduation. Many people don't want to build a career, they want to 'try many different jobs, find themselves, enjoy life'. Many people live with their parents, start thinking about career at the age of 30-35. At work, if it is 4pm (sometimes 5pm) -- people just leave and go home. "We have an urgent task" here means that it must be done within a week. In schools they teach children that everyone is a winner -- even if you have poor marks. Also, if there are any competitive games/sports, then sometimes they make it that the winner is not the one who actually won, but the one whose turn today is. And so on. Hence many people here, when they grow up, are not used to fight for survival. Just enjoy their quiet life in a beautiful country. But then they are 35, have no money, no career, but want a fancy house...

Sorry if I'm being too harsh, don't mean to offend. But this is my take on Kiwi culture, the way I see it as a non-native.

Post reply on HN