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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

#131

Post by munificent »

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.

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

Nothing at all, and I get that some people dig that.

> Why can't us high density people get the 1% that WE want?

You can. What I disagree with is the moralizing tone that people take when others don't want their existing city turned into that.

> There is more than space for both skyscrapers and suburbs.

I agree, but this discussion usually takes place when people argue that the existing single-family homes should be torn down and replaced with greater density.

I'm probably overly sensitive because I live in Seattle in a single-family home. But it gets really tiring always being made to feel like a bad person for liking the way I currently live.

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

#132

Post by nvarsj »

refurb wrote: post #88
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.

Same thing in London, people overextend themselves to get on the property ladder. Prices keep going up and up.

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

#133

Post by vorg »

Max_aaa wrote: post #9
kartan wrote: post #6

1. It is banning non-residents. You can be a national from any other country and still buy a house if you live there. 2. Watered down by interest groups: https://www.reuters.com/article/us-newzealand-economy-housin...

Have they removed the "Trust" loophole? This is where you setup a local trust, and purchase the property through that trust (and not a non-resident). People can also still purchase properties through local proxies.

Proxy purchases would be common via the informal financing system in places like Wenzhou. It's hard to imagine how the NZ government could possibly enforce such proxy purchases, especially since Australians and Singaporeans are exempt from the foreign buyer restrictions. Australia, New Zealand, and Singapore all have high immigration from China, and such immigrants can easily act as the proxies of anyone with an informal business relationship with a lender in Zhejiang.

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

#134

Post by munificent »

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.

Local's kids gotta live somewhere too.

My understanding is that skyrocketing housing prices aren't much of a benefit to anyone who doesn't own more than one home. Because you always need to live in at least one place, your economic elasticity only kicks in when the number of homes you buy and sell is greater than one.

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

#135

Post by InitialLastName »

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.

It's almost like that problem would be partially solved if the US had a system where you could get healthcare without needing it to be tied to full-time employment.

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

#136

Post by vorg »

dragonwriter wrote: post #75
ebikelaw wrote: post #68

Earlier quoted context omitted.

American big cities are not that dense. 80% of San Francisco is detached single-family housing.

San Francisco is not an American big city. It's American, and it's a city (and county!). But it's not particularly big.

Look beyond arbitrary administrative divisions at what actually exists on the ground. Of course, many cities are spirals rather than circles so it can be difficult decide where to draw the line. Oakland and Silicon Valley, and even San Jose are also part of "Greater San Francisco", which is a very spread out city because of the geographical imposition of the bay.

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

#137

Post by saltcured »

indemnity wrote: post #118
dpiers wrote: post #50

Earlier quoted context omitted.

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.

You might buffer changes in costs and provide some stability to the tenants just as they can provide some to you by extending a lease rather than vacating. But, you do need to adjust and pass on the costs, or fail as an investor. In a significant way, the service in a healthy landlord-tenant transaction is for the landlord to accept the liquidity hit and risk of property ownership and redistribute it along with other costs in the form of rent.

Where people may get confused is in ignoring the land appreciation assumptions built into a speculative investment. They don't always recognize that a capital-rich investor might be perfectly happy to buy a property and sit on it for decades without thinking of it as a revenue source. They can only imagine a more leveraged landlord where the property is purchased with a minimal down payment, the rents have to cover all mortgage, tax, and other operating bills, and the landlord may only have a limited amount of emergency capital.

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

#138

Post by vanekjar »

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.

I am afraid your math doesn't add up. Influx of foreign capital can never be bad because it fuels the local economy. It brings new jobs in construction and other related services, transtively bringing more money to government because every human activity is taxed.

By banning foreign investors you're basically saying: "nah, we don't need more money, we have enough".

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

#139

Post by Tade0 »

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…

Coming from Poland I had a very similar fist impression when I started living in-and-out in Italy.

Nevertheless at some point I started thinking: Maybe these guys are right and I'm wrong? Maybe there's more to life than this "fight for survival" and I shouldn't value my ability to do so so highly?

There's a level of, for lack of a better word, satisfaction I see on people's faces daily in Italy that I know I won't achieve, because I was born in a poor country in a rather poor family and had to claw myself out of poverty.

I think it's precious. I wish my (future) children lived in a world where they can have, like my SO likes to put it, "two youths" - one spent on doing personally meaningful, fulfilling things, and the other doing what's necessary to live an independent life.

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

#140

Post by kovrik »

Tade0 wrote: post #139
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…

Coming from Poland I had a very similar fist impression when I started living in-and-out in Italy. Nevertheless at some point I started thinking: Maybe these guys are right and I'm wrong? Maybe there's more to life than this "fight for survival" and I shouldn't value my ability to do so so highly? There's a level of, for lack of a better word, satisfaction I see on people's faces daily in Italy that I know I won't ac…

Yes, when I first started living in NZ I was baffled by completely alien culture and the way of living. But then I began to understand it, like it, enjoy it (to some extent)!

And I respect people if they choose to live this way, not fight for survival, enjoy their lives. But I don't think it is fair if later they start complaining about lack of money, lack of career and expensive houses they can't afford and start asking the government (read 'other people') to pay for it.

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