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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

#161

Post by lancewiggs »

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.

The land in Auckland is driving the value. It's a lovely climate, great city to live in, stable economy and government and open the water. There simply isn;'t much of that sort of living around.

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

#162

Post by lancewiggs »

Taniwha wrote: post #96
zzleeper wrote: post #41

Earlier quoted context omitted.

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?)

Yes this is true in NZ - property taxes here ("rates") pay for roads, water, street lighting, that sort of thing. Not schools, police, or other stuff done by central govt. Also property taxes here are not tied directly to house valuations - there's a fixed component, plus a component that's calculated from your valuation divided by the sum of the valuations of ALL the properties in the city. That means that if everyo…

To add to that - the valuations include both the land and the property, and they are itemised.

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

#163

Post by lancewiggs »

kovrik wrote: post #129
vilmosi wrote: post #127

Earlier quoted context omitted.

> 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.

All the political parties here have similar polices - it's a country with a social welfare system. On the margin National/ACT (blue) like to cut taxes and spend less social welfare and Labour (red)/Greens the reverse. After 3 terms with blue we had overshot, and Labour iOS having their turn at the well. I encourage all voters to be swing voters - that way they have a chance to influence policy. There are good politicians across all parties here, and we are lucky for that.

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

#164

Post by Max_aaa »

kovrik wrote: post #149
TheSpiceIsLife wrote: post #148

Earlier quoted context omitted.

> Let's increase salaries to poor workers, let's give them houses, let's increase maternity leave etc. New Zealand is a very wealth country by most metrics. It can definitely afford these things. When I say "it" I mean: the people of New Zealand can afford to redistribute some of their wealth so the country can avoid the worst types of poverty, and probably a whole lot more. https://en.wikipedia.org/wiki/List_of_coun…

The thing I don't get though is: why build houses? Why not apartment complex? That'll be much cheaper and much more effective.

The problem is that builders in NZ suck at building apartment buildings. The quality is rubbish, and they are not that much cheaper than houses, in many cases they are much more expensive due to the Body Corporate Fees (~10000 NZD / Year).

At first we were looking for an apartment, but then realised that it was just hopeless to find affordable apartments which a of reasonable quality.

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

#165

Post by Max_aaa »

kovrik wrote: post #156
peterashford wrote: post #153

Earlier quoted context omitted.

Its not a matter of asking other people to pay, it's a matter of there not being enough housing stock and houses being seriously unaffordable relative to wages. BTW: NZ workers do the OECD average amount of work per year.

That is what concerns me: if they can't afford a house, then why don't they buy an apartment? There are apartments in Auckland for $300-400k, which is even cheaper than affordable KiwiBuild houses ($500-650k).

And how much are yearly Body Corporate Fees for these apartments?

Also have you look at the minutes from BC meetings? Going through just a handful will turn you off purchasing an apartment in no time.

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

#166

Post by Max_aaa »

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.

A 2.4M 2x4 costs almost 10 NZD here. And that is the cheapest lumber.

There are huge markups in the local market on building materials due to a duopoly. It is cheaper to fly to Australia buy NZ made siding there and ship it to NZ than to buy it locally.

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

#167

Post by spronkey »

kovrik wrote: post #149
TheSpiceIsLife wrote: post #148

Earlier quoted context omitted.

> Let's increase salaries to poor workers, let's give them houses, let's increase maternity leave etc. New Zealand is a very wealth country by most metrics. It can definitely afford these things. When I say "it" I mean: the people of New Zealand can afford to redistribute some of their wealth so the country can avoid the worst types of poverty, and probably a whole lot more. https://en.wikipedia.org/wiki/List_of_coun…

The thing I don't get though is: why build houses? Why not apartment complex? That'll be much cheaper and much more effective.

In addition to the issues around lack of industry familiar wtih apartments, many native NZers don't want to live in apartments as it doesn't fit their culture or way of life.

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

#168

Post by spronkey »

weberc2 wrote: post #51
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.

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...

What they're actually doing is increasing the difficulty for local buyers by increasing demand and pushing up prices, and taking money away from them while simultaneously lining the pockets of existing property owners.

Foreign owners are likely to move at least a portion of this money overseas, which takes it out of the local economy, reduces the ability of residents to innovate by taking financial risks etc etc.

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

#169

Post by spronkey »

isostatic wrote: post #121
shady-lady wrote: post #102

Earlier quoted context omitted.

> 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.

You have to live somewhere though, and in NZ cities rents are high enough that they prevent many renters from saving any money at all.

So, no, supply and demand theory kinda doesn't stack up when it comes to housing.

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

#170

Post by sametmax »

isostatic wrote: post #121
shady-lady wrote: post #102

Earlier quoted context omitted.

> 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.

And hence live and crappy houses or very far away from work, good scools and social life.
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