New Zealand Passes Law to Crack Down on Foreign Home Buyers • Hacker News Board

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

#121

Post by isostatic » Wed, Aug 15, 2018, 8:09 PM UTC

shady-lady wrote: post #102

isostatic wrote: post #47

Earlier quoted context omitted.

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 : ine…

Unless you live in a tiny country like singapore, you have a choice where to live.

Economic theory says that if the price is unreasonable, people won't pay it.

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

#122

Post by sjg007 » Wed, Aug 15, 2018, 8:10 PM UTC

seanmcdirmid wrote: post #90

sjg007 wrote: post #86

Earlier quoted context omitted.

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.

Eh I don't really buy it... HVAC techs, plumbers, electricians, earthwork, even carpenters/framers can all find work outside of construction booms. And you can move towards prefab as much as possible as well if you are deeply concerned..

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

#123

Post by TheBeardKing » Wed, Aug 15, 2018, 8:10 PM UTC

Tiktaalik wrote: post #54

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.

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...

If the vacancies drive away business, which weakens street life, then would not the low street life drive down real estate prices?

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

#124

Post by sjg007 » Wed, Aug 15, 2018, 8:11 PM UTC

user5994461 wrote: post #93

seanmcdirmid wrote: post #90

Earlier quoted context omitted.

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.

You can absolutely have a career in construction, as I know many people who have. The challenge is health. It's a very demanding line of work where you have to carry weight, wake up in the early morning and work in the cold. People don't want to work like that. It's very hard on the body and you're broken when you reach your 50's.

I think a lot of things can be improved here with technology both in materials and for doing the actual work where the risk is lower so your body isn't completely shot.

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

#125

Post by jly » Wed, Aug 15, 2018, 8:13 PM UTC

indemnity wrote: post #111

lostlogin wrote: post #74

Earlier quoted context omitted.

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.

Yeah, this is a relatively important metric for both investing but also affordability. It shows that there is an apples to oranges comparison in housing prices across markets (discounting currency differences).

When calculating the affordability of a home, the total monthly cash flow requirements (housing costs as a percentage of income) are critical. I live in an area where the rates are 10x that of Auckland. A $600k home valuation requires a ~$250 weekly rate commitment vs only about $27 in Auckland - a significant difference. It's still an expensive home by any metric, but considerably more affordable.

From a speculation perspective, an investor in Auckland can sit on a very expensive property with almost no cash flow burden, reducing the need to even rent.

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

#126

Post by isostatic » Wed, Aug 15, 2018, 8:15 PM UTC

wepple wrote: post #63

isostatic wrote: post #45

Earlier quoted context omitted.

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.

So the local sells to a foreign buyer and downsizes. That’s great for them. But their kids are now priced out of the market, and will never own a home but rent from someone who lives 15h flight away.

Sure. Life sucks doesn't it

Fortunately there are many places that someone in NZ can buy a house.

https://www.realestate.co.nz/3379275

For example is proavly affordable on minimum wage of $32k, certainly with two incomes.

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

#127

Post by vilmosi » Wed, Aug 15, 2018, 8:20 PM UTC

kovrik wrote: post #120

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 n…

> Why should we pay (with our taxes) for poor kiwis who can't afford a house?

Why pay taxes at all for a country you're not citizen of? /s

Seriously now, it's because you live there. Their government makes the rules, you decided to live there and, by extension, decided to follow their rules.

> 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

And, given which democratically elected government is in power, it's their right to choose how to spend their money.

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

#128

Post by isostatic » Wed, Aug 15, 2018, 8:24 PM UTC

lostlogin wrote: post #81

isostatic wrote: post #45

Earlier quoted context omitted.

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.

You want somewhere that's affordable for 1x yearly wage? Care to point to some time in history that was possible?

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

#129

Post by kovrik » Wed, Aug 15, 2018, 8:25 PM UTC

vilmosi wrote: post #127

kovrik wrote: post #120

Earlier quoted context omitted.

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 n…

> Why should we pay (with our taxes) for poor kiwis who can't afford a house? Why pay taxes at all for a country you're not citizen of? /s Seriously now, it's because you live there. Their government makes the rules, you decided to live there and, by extension, decided to follow their rules. > I mean, yeah, Labour party is in power in NZ at the moment, hence such policies like 'Let's increase salaries to poor workers…

Yes, you are right and I don't disagree with you. I understand this. And I really love New Zealand, no regrets moving here at all!

That is just my view on such policies. As you might have guessed, I'm not a labourist.

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

#130

Post by pixelbash » Wed, Aug 15, 2018, 8:31 PM UTC

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…

About the insulation thing, to be clear, it's just a heat pump and a certain R number in the floor and ceiling (correct me if I'm wrong). Pumps cost What I'm trying to say is walking into a house here in winter still doesn't feel like a place in say, Northern Europe. I don't think it's that onerous.

Sources: Partners brother in law is a builder, parents just had heat pumps installed, our landlord just installed underfloor insulation and it's currently 12 degrees C in the house.