By Bernard Hickey
With 26 days to go until the September 20 election, here's my daily round-up of political news on Monday August 21, including a debate over National's plan to double first home buyer subsidies and Labour's announcement it has trimmed NZ$300 million from its spending plans and dropped six un-announced policies to account for the Treasury's slight lowering of its budget surplus forecasts in the Pre-Election Fiscal Update.
Labour Leader David Cunliffe and Finance Spokesman David Parker released Labour's updated Fiscal Plan that included the Treasury's forecast changes on Monday morning.
They said Labour had removed the indexing from a NZ$1 billion a year budget allowance, delayed the introduction of free doctors' visits for the elderly by 6 months to January 2017 and dropped six of its seven yet-to-be-announced spending policies. The one un-announced policy is costed at around NZ$95 million from 2016/17 onwards. They would not disclose the un-announced policies that were dropped.
Parker said Labour had carved NZ$300 million off its spending plans to account for the Treasury's lower revenue forecasts in the PREFU. Labour's fiscal plan still forecast surpluses and lower net debt than under National.
Labour plans to restart contributions to the New Zealand Superannuation Fund from 2015/16, starting with NZ$750 million that year and rising to NZ$2.2 billion by 2020/21.
Labour removed the indexing from a NZ$1 billion a year budget allowance, which is being used to pay for inflation-adjustments and population increases in health, education and social services spending.
"In addition, to meet our debt reduction commitments in light of the PREFU's reduced revenue from the cooling economy, Labour will focus on priorities, adjust the timing of some policies and not proceed with some unannounced policies," Cunliffe said.
He called on the Governent to say how it planned to spend the NZ$1.5 billion allowance allocated in the May Budget, "meaning New Zealanders are not in a position to make a clear comparison."
Finance Minister Bill English said it was too late for Labour to try to look fiscally responsible.
"Labour is desperately trying to make its big spending commitments look smaller, and has decided to not even put costings on its big spending tertiary and transport commitments," English said.
“Whatever Labour presents now would be up for negotiation in coalition talks where the Greens would have considerable sway – not to mention concessions demanded by Dotcom," he said.
Elsewhere on the campaign trail, John Key is reported to have said he would make some announcement about tax cuts later in the campaign, although it would not be a fully formed package. Finance Minister Bill English said last week there would not be a tax cut package announced before September 20.
First home buyers' carrot
Prime Minister John Key launched National's campaign on Sunday with a plan to double first home buyer subsidies at a extra cost of NZ$218 million over four years.
Nick Smith announced the details of the ramped up KiwiSaver HomeStart Grant, which included doubling the Government subsidy for a couple buying a brand new home to NZ$20,000, allowing KiwiSavers to withdraw the Government member tax credit and increasing the house price caps for the scheme in all areas to between NZ$350,000 to NZ$550,000. Here's a summary of the changes and the Q and A for the new policy.
The Government estimated the new Grant scheme would increase the number of recipients in the scheme by 41,501 to 91,824 in the first five years of the scheme and increase the costs of the scheme by NZ$217.8 million to NZ$435.4 million over those five years. It also planned to increase the house price caps for Welcome Home Loans to the same as those for the KiwiSaver HomeStart Grant.
The price cap for Auckland was increased to NZ$550,000 from NZ$485,000, and to NZ$450,000 in other major cities. The biggest increase was in Upper Hutt and Kapiti Coast areas from NZ$300,000 to NZ$450,000.
"The policy will help tens of thousands more first home buyers achieve their dream of home ownership," Key said in his campaign speech at the Vodafone Events centre in Manukau.
"First home buyers have always found it hard, and often that first step is quite a stretch. That is why I believe the changes will be welcomed by potential first home buyers," he said.
A couple buying a new home who received the maximum KiwiSaver tax credit for five years would receive an extra NZ$10,000 in Government subsidies and be able to withdraw an extra NZ$5,210 from their KiwiSaver accounts for a deposit on first home. Key later told reporters he thought the Reserve Bank and Treasury approved of the scheme, given the Government's moves to increase housing supply at the same time.
Smith announced a previous ramping up of the scheme in August last year in response to the Reserve Bank's high LVR speed limit, although the limit has since exempted loans for newly built homes.
'Not one new house built'
David Cunliffe said National's housing announcement would just push up prices.
“House sales to first home buyers have collapsed as a direct result of the Government’s failed housing policies, and now they are offering up a sticking plaster," Cunliffe said.
“They refuse to actually build the many thousands of extra houses that are needed. And they refuse to tax speculators," he said, adding it would not offset the higher deposit requirements under the Reserve Bank's high LVR policy.
“The fundamental problems are lack of supply of housing, planning rules that constrict development, and unrestricted speculation."
Phil Twyford issued a fact sheet on housing saying no one was living in any houses built in Special Housing Areas and the Auckland Accord was running behind its targets.
Russel Norman also criticised the policy as a 'band aid' approach to the problem of rising house prices, particularly in Auckland where the median price had risen more than NZ$220,000 since 2008.
"The only real difference to the current KiwiSaver policy is some home buyers will get up to NZ$5000 more for a mortgage to buy an expensive new home. That extra subsidy doesn't even touch the sides of offsetting the NZ$228,400 increase in the median house price in Auckland," Norman said.
In my view
In my view , the policy has tried to side-step the accusation that the subsidy will simply increase existing property prices by directing the increased subsidy to new home builds. However, there will be questions about how many new home builds will be financed by first home buyers, given most are currently bought by older buyers using equity built up in their first and subsequent homes. The Government is hoping the arrival of first home buyers may 'kick-start' developers into offering new types of developments and thus adding to supply.
However, a couple with a combined income of NZ$100,000 in Auckland who had savings and subsidies of NZ$50,000 for a deposit would have to borrow five times their gross income with a 90% LVR loan to afford a home and land package costing NZ$550,000.
It may have the biggest impact out in the regions, where the caps for the scheme have been dramatically increased. In Upper Hutt, for example, the cap has been increased to NZ$450,000 from NZ$300,000.
The danger remains real, however, that these subsidies simply pump up the price of a limited number of new homes.
A 2012 Australian Government study (pages 26/27) of the many similar first home buyer subsidy schemes there found they were not effective in improving affordability in the long term in areas where supply was constrained. Here's a September 2013 speech from Australian economist Saul Eslake arguing that first home buyer subsidies in Australia have not worked.
The concern about increased subsidies simply pumping up prices is most acute in Auckland, given a ramping up of KiwiSaver withdrawals and the growth of the subsidy scheme through 2012 and 2013 coincided with a surge in low deposit lending to first home buyers and property investors that forced the Reserve Bank to introduce its high LVR speed limit.
Visiting Hobsonville
Following up on the announcement, Key and Smith visited the Housing NZ Corp development at Hobsonville on Monday, which they said was the sort of development that first home buyers could use the expanded HomeStart grant.
"We have up to 3000 new homes coming on-stream here over the next 10 years, of which at least 20 to 25 per cent will be within the new NZ$550,000 house price cap for Auckland under KiwiSaver HomeStart and the Welcome Home Loans," Smith said.
He said the first sod on the former Defence Force land was turned in 2002 by then Labour Prime Minister Helen Clark, but the project had then stalled because of planning disputes. The Government had revived a housing plan in 2010 and then included the land as one of the 63 Special Housing areas under the Housing Accords and Special Housing Areas ACt in 2013, Smith said.
"Earthworks were consented a week later and now 444 houses and sections have been sold. A further 350 houses are to be sold in 2014/15 with development partners. Beyond these 3000 houses, there is also a further 2,000 proposed on adjacent private land in a Scott's Point development that has been approved as a Special Housing Area," Smith said.
"The practical effect of HomeStart at Hobsonville is that a first home buyer can now purchase a three-bedroom house. The previous house price cap of NZ$485,000 meant that first home buyers could not access previous grants or the Welcome Home Loan for the dozens of three-bedroom properties at Hobsonville on sale in the NZ$520,000 $540,000 range," Smith said.
"I am confident we are going to see hundreds of young Aucklanders accessing the new KiwiSaver HomeStart so they can purchase their first home in Hobsonville. I also expect this development to now advance even faster with the additional buyers in the market. An important objective of KiwiSaver HomeStart is to encourage more housing companies to build new houses in the price range affordable to first home buyers," he said.
"Hobsonville has shown it is possible to provide good quality, more compact housing that is affordable. The flexibility and speed of the Special Housing Areas legislation combined with KiwiSaver HomeStart opens the door to many more developments like Hobsonville across Auckland."
'Pouring petrol on the fire'
Labour Housing Spokesman and Auckland MP Phil Twyford said the Australian experience had discredited such subsidies.
“It is Economics 101. You are mad if you stimulate demand in an already overheated market where supply is not keeping up with demand. As the Australian experience shows and as Treasury knows, the Government is trying to put out a fire with petrol," Twyford said.
"Instead of building large numbers of new affordable houses as Labour will do through KiwiBuild, and taxing speculators as Labour will do through its capital gains tax that excludes the family home, National has thrown $218 million on the bonfire of the Auckland housing market," he said, pointing to this Grattan Institute report from October 2013 criticising first home buyer deposit subsidies.
NZ Initiative attacks plan too
NZ Initiative Executive Director Oliver Hartwich said the policy would drive prices sky high.
“National’s announcement does nothing to remove the constraints and roadblocks to building more houses, such as tight land supply and limited infrastructure. All it will do is subsidise demand, which is likely to push prices even higher," Hartwich said.
“It may well be a vote catcher, but it in the long term the policy will exacerbate New Zealand’s housing affordability crisis,” he said.
Hartwich pointed to a new report from the NZ Initiative showing New Zealand would be short more than 113,000 homes unless construction increased from current levels.
“Construction has fallen to just over 15,000 new dwellings per annum. Supply is now at its lowest level since the mid 1930’s," he said.
“Instead of turning the tide on the greatest crisis facing the New Zealand economy, the government seems to have chosen good politics over good policy.”
He said the best way to improve affordability was to reform the Resource Management Act and boost infrastructure finance for councils.
'Right to Work' plan
Internet Mana launched its election campaign in Auckland, promising 100,000 new jobs through a 'Right to Work' plan at a cost of NZ$1.3 billion a year. It would fund its 'Right to Work Force' and Digital workforce plans by redirecting 20% of ACC reserves and proposed levy reductions to a new social insurance fund.
However, the launch was over-shadowed by Pam Corkery's televised abuse of reporters outside the venue, where she called one a "creep" and another a "puffed up little sh*t" after refusing to allow interviews of Kim Dotcom.
Labour policies
Elsewhere, Moana Mackey announced Labour's climate change policy , including setting up an independent Climate Change Commission to establish carbon budgets, restrict the use of international carbon credits and bringing Agriculture into the Emissions Trading Scheme by 2016.
Phil Twyford announced Labour's Transport policy .
The policy included reviewing and delaying some motorway projects to shift funds to rail, coastal shipping, public transport, regional and local roads, safety, and cycling. It includes a review of the Kapiti Expressway , a review of the PPP for Transmission Gully , a replacement of the Puhoi to Wellsford motorway with NZ$320 million of upgrades to the existing road and the dropping of plans for a Basin Reserve Flyover .
Gerry Brownlee said Labour should say which motorway projects it would cancel.
David Cunliffe announced Labour's policy would abolish secondary income tax and instead use special tax codes until the IRD introduces its new computer system. It said the policy had no cost.
(Updated with Labour's updated fiscal plan, Key's comments on tax cuts, Smith on Hobsonville, Twyford on first home deposit subsidies and English on Labour's fiscal plan, NZ Initiative attack on first home buyers' subsidy expansion)
I'll update this regularly through the day.
See all my previous election diaries here.
See the index for Interest.co.nz's special election policy comparison pages here.
149 Comments
The Nats new policy is window dressing for those who qualify.
As Bernard says they are expected to run a mortgage based on a 5 borrowing multiple. That may be just achievable at current 6% interest rate. What about when the rate goes up and they are reduced to one income or child care costs etc
I'm in my 30's and looking to buy my first home and I'd have to say I was underwhelmed by the announcement. Houses in Auckland feel massively overpriced compared to incomes and a few extra grand wouldn't even touch the sides. After the slump in 2007 and the rapid price rises over the last couple of years, it feels extremely risky to buy a house in Auckland. I'd like to see a capital gains tax slow down investment and some sort of restriction on foreigners investing in residential housing. What I want is stability - for me this is buying my first home, not gambling on a quick buck (which I feel it's become in this country).
On top of all that, I've spent time overseas during the last few years and although I've been in kiwisaver since 2008, I might not qualify for the "subsidy" for that reason. So basically, a bit of fail from my perspective. Though i suspect it's about the sizzle and not the sausage...
VA are you wanting the taxpayer to actually buy the house for you and for you to live in debt free? What sacrifices have you made to actually save some money for a deposit? Sounds like you have had a great time swanning around the world and have actually saved very little to put it mildly. I started work at 27, bought my first home at 28 with savings my wife and I had put together then bought my first car. I only started travelling when I was 42. Now I do it in the front of the plane but I actually saved hard when I was young and so did my wife. Why is your generation so expentent of others having to help them.
Just for comparision, we bought our first home in 1992, spec'ed house + land, it was 315K and we had to do our own painting in/outside and no floor covering. Our combined income were 58K. It was tight but we managed.
So what is it these days in Auckland? typical combined income of 120-140K and 700K house?
Probably agree too choosy, however the price of Aucklands older stock (do ups) for FHB's planning to start a family, while balancing not spending 2 hours in the car per day could be depressing. But hey its now cheaper to rent than own so save and wait for the re set I believe is coming.
If you'd like to help pay for my house you're most welcome Gordon!
Do you not see the irony in your comment? I'm actually turning down an offered subsidy in favour of market stabilisation.... but don't let the truth get in the way of a good yarn aye chap!
I've made plenty of sacrifices for a deposit - in fact, by moving to the UK I worked for the best company in my industry in the world, to return with more experience, respect and a pay increase. Us young chaps have to break that glass ceiling my friend and I'm prepared to do that with my bare knuckles if I have to. But of course you'll harp on about how much harder you worked blah blah, which is rubbish - even my parents know they had it easier... but if it makes you feel like a martyr then fine. But as for income multiples relative to house prices...? EXACTLY.
And others helping ME? Well, do you have much investment in property? Because if you do then you've been helped by a policy that has enabled MASSIVE TAX FREE capitals gains in your lifetime and ridiculous house price inflation. All at the expense of those who don't yet own there own home. You know what, you're welcome!
As for the economics of capital gains tax, even our own treasury has recommended it:
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=111…
I'm not going to use you to sum up an entire generation Gordon, because that would be ignorant wouldn't it? But the fact that you think you've had it hard really does say something about your personality...
Now I better duck off and go be "expentent" on others...
"Our treasury" is filled with sociopaths who would recommend anything to line government coffers for their own agenda regardless of the pian, misery, and damage it inflicts on the rest of New Zealand.
In some ways they did have many things harder. Education was cheaper, but fewer people knew how to get there or why.
Materials were often simply not available in NZ from supply issues or by government policy. This put the price of some random items through the roof. Processing and materials technology was in it's infancy futher adding to price and shortages.
One thing that has changed...and gordon is naughty for keeping it under wraps..and also...IIRC..69k was a rather nice house in those years. the norm being 35-50k. Is that most families were single income.
Borrowing was also harder as there were a lot of arbitrary rules.
Which gordon being dual income family, and unusually having a degree, would have seemed like an excellent lending prospect. I'm wondering also whether the income was tied quite nicely to inflation (price setter) as it would explain a few things.
While many people in the 70's and 80's complain about the high inflation, it worked brilliantly for anyone already established. If you had a price setter job it was xmas. If you were debt free it was a money shower. that's the age when many Perpetuity funds were set up. at 17% you can put in 6years gross income and retire on full pay for life (exc inflation effects).
Our Freemason Hall was sold (large iconic building with land in popular demand) in that time for 120k. 85k of the money placed in Perpetuity Account .
Considering the current buildings 2.5Million value, the interest received on the 85k, which had the original investors rubbing their hands with glee seems somewhat poultry. even at 17% that 14.5k wouldn't get you much now - but back then it would have hired two full time brethern to do research or groundskeeping.
VA I can only presume that you had a great time while travelling because you obviously returned home without a big enough deposit to buy your first home. Typical X and Y want it now. Did not buy the house before travelling. When travelling found some money in ones pocket from work so instead of saving it for house deposit went and spent it on more travelling. Get home and want help to buy home . Underwhelmed when offered interest free non repayable grants which boomers never had. Why am I surprised ? Probably never taken a cut lunch to work and drinks a number of coffees every day and wonders why he is still renting.
I doubled my money when I was away Gordon. I sat in an office in London while friends of mine went to Bali. I couldn't buy a house before I went because I didn't have a partner and would've struggled to do it alone - especially on the wages I was on. Are you going to judge me for not getting married now too?
Instead of discussing economics you try to tell me I don't make my own lunch and buy coffee every day? I do make my lunch and I don't buy coffee. You haven't been listening (which isn't a surprise) I have money for a deposit, what I see is a volative, uncertain and over-priced market which makes me reluctant to invest - which you still haven't addressed - you just want to shoot the messenger. Straight out of the Cameron Slater school of thought isn't it? The problem is the low wages, high cost of living and OVERPRICED houses in New Zealand.
Perhaps address the economics here Gordon? I'm underwhelmed because a subsidy doesn't address the issue of the over-valued market - it just inflates it. Obviously you don't want to address that because you're not interested in an economic argument, (because you'll lose, though you are anyway) you just want to sit on your high horse with your free education, cheap housing and try to judge me and tell everyone how much harder it was for you. But it wasn't, so jog on.
VA, your posts are a pleasure to read. Stating facts not feelings and not biting tat the poorly thought out posts of Gordon, who is clearly a grumpy old BB'er that had to walk 10 miles in the snow to get a bottle of milk and had it the toughest out of all generations with far worse house affordability then now along with the worst income growth and the worst job stability... Oh wait....
SUBSIDIES NEVER WORK , they simply push up prices by the subsidised sum , and it often happens so quickly you dont even see it coming ..
Any intereference in the market mechanism casues distotrtions , and has unintended consequences, and they we have to react to those later casuing more damage.
We would be far beter off if Govt acted as growth facilitator , and got rid of the hurldes and roadblocks to orderly growth .
In 1984 when I was 29 we bought our first house which cost $69,000. In less than two years we had saved a $24,000 deposit by not having a car and by not travelling overseas. My salary as a young professional was $15,000 if I recall. My wife worked part time in a hotel then she got a fulltime administration position. Sold it in 1987 for $93,000 and bought another house for $135,000 with a deposit of $90,000. My wife and I were both working until our daughter was born in 1986 . Interest rates went up to 21% in 1987 and the monthly payments were $1000 a month which hurt as salaries were not up todays levels. Big gains were made between 1984 and 1986 when both of us were working and we saved at least one salary and fast tracked reducing the house debt. In doing that we made a conscious choice to not travel amongst other things. How many young people think like that today. Retired at 58 and have been to Australia twice and Asia and Europe in the last 12 months. Unless you were born with a silver spoon in your mouth and I was not, you then need to make a conscious decision somewhere in your life to live within your means, save hard and get some capital behind you. How many X and Y do that? They are too busy buying stuff , travelling and feeding money into their phones.
So, if we assume you wife earn't 5k on top of your 15k, gives you a combined household income of 20k. Your house was roughly 3.5 times your income. Far far easier to buy than todays 5-7 x house multiples. If you were tertiary educated, you also wont have a student loan like many gen X& Y fhb's. Which further reduces their purchasing power.
The rest of your comments about gen x & y are farce.
Interest rates in 1984 were probably around 14 to 15% and went to 21% in 1987. You figures only take in part of the picture. It is always hard to buy a house if you don't have the advantage of a silver spoon. At some stage as a couple you have to be totally committed to saving some capital. I do not see that happening today. People want everything now and have to resort to raiding their kiwisaver to get going and that money is long term retirement money. It only takes a few years and then the rest of your life is relatively easy as you have some capital behind you.
You never mention Student Loans Gordon. You obvioulsy both worked hard but started in a debt free position, which is rare these days for those leaving University (even working part time).
Did you get a degree, I am guesing you did and probably plenty of job offers. I have friends in mid 30's that are still paying off these loans after interest of 8% was added, but hey life was tougher in your generation?
Certainly was tough Frazz. I earnt enough over the holidays to put myself through university for twelve months including paying fees. One year I had three jobs and on some days did all three. What I did not have was a car, overseas trips over the summer break and the clothes and alike. How come some kids today go through university debt free or near to it without mum and dad's help. Because they work during the breaks, some during the uni year and they don't take those expensive overseas holidays that many students take while studying. Why do so many with student loans and on good salaries not smash the debt while they are young? Why do they just pay the minimum? Because they want to travel and have the lifestyle they are not willing to give up for a while like their parents did. They want to instantly live like mum and dad.
Live like Mum and Dad...no they want just the same start you had Gordon. How much were your Uni fees ...$300 tops? And you saved at the same time (or not drinking and partying which most did). Have to agree about saving early on in life to get ahead, but you are sorely out of touch with the FHBs today.
By the time I got to uni I had done the drinking thing Frazz. I studied for nine years including two degrees and started work when I was 27. Bought my first house when I was 29. How did that occur. Total committment to saving for a deposit with my wife. Very few people do that today. I know as I was a professional who dealt with them until recently. They have all the fun in the world including the OE then settle down and suddenly realise they have no deposit for a house so they raid their long term retirement funds (kiwisaver), scrounge off family and even use a credit card facility to bolster their pathetic deposit.
Interest rates have never been so low. Incomes have never been so good if you study and work hard. The difference is the younger generation want the nice home, the new furniture, the new appliances, the newer cars, the overseas trips, the expensive cell phones, sky tv, the cafe meals, the coffees, the sporting equipment, the clothing, the expensive hairstyling, trips to the movies, magazines and so on. I am not out of touch. My two children who are both tertiary educated keep me well in touch with todays lifestyle. They have both studied and worked hard but they certainly do not show the same committment to saving like the boomers. Luckily for them I am in a position to assist if need be and I will as there is no point in them waiting for me to die if I can help them financially in the meantime.
So you studies for 9 years, the cost of that study was paid for by whom Gordon? The difference today is that you saved in University and brought a house with that money 2 years after leaving University. Imagine the student loan required for a double degree today...?!!
Frazz I left Uni with no money and I got married in the November of my last year at Uni. Thought I had some catching up to do. Started building up a deposit and caught a bus to work and took my lunch. Who does that today. Not many. Too much money and no discipline to save it and then feel underwhelmed when JK offers you a $ 20,000 non repayable ,no interest grant. Get real.
married in your last year of uni?
not these days, not unless your parents have paid for your education or you've manage to get some very rare contacts/mentors from somewhere.
bus service that took you near work?
you understand that cities are putting free bus services for students, not for demand reasons but simply because the students don't have the money for fares. Very few places have decent bus runs that service anywhere else. When I sold a house back in 2007, I got extra 10k just for being near a bus stop.
And many people take lunch
I studied at uni (first time) for a year, ran out of money. economy was retrenching everything in sight. got a job at local power board (draughting, then shifted to marketing, and then fired for setting up what is now called a corporate Home Page)
the last time, I was making a little income as builders assistant for a builder doing his own house up. Fitting in part time courses, paid a months gross income to enroll in a single paper - the student union fees were as much as the course fee. Took a job on a dairy farm that was "no calving" "no development work" with 110 cows...been too broke and busy to finish that Comp Science degree (w/ extra in finance) ever since.
Young people are doing those social things because there is no point in them working hard. Why work hard when someone is just going to take it off you. If you spend it, and you have to spend it anyway to keep up on most employee rat-race treadmills these days*, then government will give you handouts if you have nothing. If you have saved, then like me when I was made redundant, they just take it off you. got nothing they can't take it. So live it up while you can. It's called moral hazard, and the government loves it.
Back then few months before we had to pay for our first home, we were short of about $5000. I made up the short fall by putting up ads in the local supermarkets, uni and school notice boards to do car servicing; change engine oil, spark plugs and tune up; made about $30-35 each time, spent most of my weekend under the cars. If you want something you had to prepare to do the hard yakka.
(don't worry about IRD blah blah blah - I know)
gordon, I'm 35 so have a good idea about what FHBs face today and the spending/saving habits of the average gen Y. They are the most entitled and selfish generation we have seen in a long time. They have been conditioned to expect everything now and seem to have little or no financial discipline. Most won't even consider starting on the bottom wrung of the property ladder and expect parents and/or govn to give them a leg up. There are plenty of flats and apartments on the Auckland market for under $300k but they consider themselves too special to compromise. If the whining FHBs on this site spent even a fraction of the time they spend posting/whining on here on a 2nd job they wouldn't need to complain.
"If the whining FHBs on this site spent even a fraction of the time they spend posting/whining on here on a 2nd job they wouldn't need to complain."
Keep it up champ, maybe your posts will turn into your first home, till then you'll keep paying us PIs your rent like a good boy.
Failed at Uni as the surfing bug and drinking beer/chasing girls took all of my attention. Travelled and luckly saw an opportunity which allowed me to get a high paying job for my age, fluke really. Brought an apartment down the road from were I grew up, rented it out.Saved and started a business, traded up....lookingback if I had a student loan I would still be in rentsville probably.
Gordon I think one the issues that I can see is that the young adults of today FHB look back at how hard their parents worked and they don't want to do it that way. Anyone going through the 1980's hard to work their butts off. The luxuries weren't there it was a fairly basic lifestyle that we lived.....and I know it was common for many people to have more than one job back then.
Back in the 1980's people could still get in and help build their house themselves. With all the rules and regulations that surround building today people have become almost paralysed with fear and do not undertake the work......NZ's have lost many of their wide-ranging practical skills as the education systems have focused on specialty/niche information/qualifications rather than the broad-skills of previous generations.
The jack-of-all-trades....master-of-none.....has always served us well.....
Back in those days ....
You got married .. bought a bare-bones starter group house .. on an empty section .. no paths .. no driveway .. no garage .. no letterbox .. no clothesline .. no lawns .. no gardens .. no fences .. nothing .. then
One weekend you ordered a truckload of builders-mix, coupla-yards of sand, 20 bags of cement, .. hired a cement-mixer ..
Organised a working-bee with all your mates, prepared a barbeque, laid on 3 or 4 dozen beer .. and did it all your self with the help of your mates
Laid paths and driveways and steps up to the back yard .. crib-walls .. fences .. yep that's how it was done .. over time
And then you reciprocated for all your mates .. made light work of it ..
And then someone put two and two together and realised that all that free work wasn't contributing enough to GDP........so they had to legislate and regulate until you couldn't build your own house!!!! We are the Government we are here to help you......I mean not allow you to build your own house.......LBP Limiting Building Participation........
I don't think many folk can handle that work for a crate these days. Not to mention everything has to be put through council, and the drawings standards are much higher requirement than previously. Likewise the expectation in workmanship. When everyone else is having a few maates put together a landscape, then fair-enough is ok, especially for 50-150k house. Not ok in a street with nice street appeal and 400k+ housing.
Totally agree Gordon. I am also a firm believer that people are not satisfied with getting on the property ladder at the bottom (which is affordable) but want to get on half way up the ladder. I recognise Auckland and Christchurch are seperate issues, but around the country there are a lot of properties which are affordable with mortgage payments cheaper than what people are paying rent. They just need to make a committment to property rather than the latset phone, flat screen TV or car.
Indeed there are such properties but as was discussed recently the regional economies are in the toilet. Every time there's a chance of improvement the RBNZ/banks suck up the cash with interest. The result is little velocity of money in those areas, and corresponding mcuh smaller wages. that's also why most of them have stagnant or negative property value increase...so why would you buy, in a risky area, with falling returns, and strong wage-to-rent cap on your rental income...... and be subject to the same rules, regulations and compliance costs as the big centres.
More rubbish!
We sit and read articles about huge house price inflation, warnings of the auckland property bubble being about to burst, see the house price to income ratio as opposed to earlier generations and our housing affordability compared to other nations and we say, hang on - we're getting ripped off! All so a bunch of opportunistic kiwis can make a quick buck of a human necessity: housing.
Stop fooling yourselves you old goats, it wasn't harder in your day, you didn't work harder than we are now, we aren't entitled and buying a new ipad every year - the fact is you guys are all making money off property and you're doing at the expense of the FHB. You just don't want to change because
a) You couldn't give a toss about anyone else... AND
b) You're addicted to the dollar.
I'll leave you with a quote from another self-righteous old dude - Socrates:
“Our youth now love luxury. They have bad manners, contempt for authority; they show disrespect for their elders and love chatter in place of exercise; they no longer rise when elders enter the room; they contradict their parents, chatter before company; gobble up their food and tyrannize their teachers.”Tut tut VA that is getting a bit personal. I only have my home and a townhouse in a university city for my kids and their friends to use. If you look at my earlier comments you will see I have consistantly stated that the boomers have been greedy property wise. They think they were cleaver but really it was just good timing on their part.
ok, I partially forgive you for stating boomers have been greedy. But I can't accept your comment that younger people have it easy if they work hard, and that wages in NZ are good.
Wages here in NZ are pathetic, house prices appear to the young FHB as a massive ripoff, and a ponzi scheme about to fall over.
If we had the choice, we would definitely choose your 'hard life' over our 'easy life'
The maths needs to be explained here, it is not just the dollar figure that counts.
I'll keep it simple and leave out the fees etc. just for illustration @ 5% deposit, (reality).
10k deposit will allow you to buy about 200k property, 190k debt. You don't get much for that nowadays.
For only 10k more saved, 20k deposit will alow you to buy 400k property, 380k debt.
25k deposit, 500k property, 475k debt. Yada, yada......
The subsidies are bait to lure naive buyers into paying the grandiose valuations by accepting a lifetime of debt servitude and are now required by the money junkies who need bigger figures to get their GDP and statistical growth fix.
The telling time will be when baby boomers increasingly offload their savings plan properties into a reducing pool of younger buyers. This is why keeping the migration and foreign investment doors open will happen despite unpopularity.
Use the facility by all means, it's free money, but start small, upsize only when you need to, minimise debt and repay at the highest rate you can.
And thats the beauty of the plan. The silly gummint puts on a immigration party, but doesnt do any extra infrastructure preparation for the newcomers.
So we end up with many more people wanting a slice of cake.... and we end up fighting for, and bidding up prices on that cake (which instead of a pavlova paradise, is some crummy 300 square metre dog biscuit).
If you look: 'Figure 16: Composition of transactions by type of purchaser' on page 19, on the below link. You can see the people doing 45% of all the house buying in NZ are the scumbag investors. Housing should be about be about providing affordable housing, not a way for booming silbahorn/herbal-ignite customers to get rich from misery of the FHB
https://s3.amazonaws.com/s3.documentcloud.org/documents/1222180/nzier-p…
a) He was 19, he's now in his 40s and he has done his time on those, hence he no longer is a criminal.
Also trying to destroy the German PM's credit rating isnt a crime but more of a political action.
Trying to hack into NASA to see if aliens exist?
Both are more funny than criminal.
regards
you wont find a url for a little longer...the Msm have all redacted their early on line stories this morning..no doubt after recieving calls from lawyers.comments also suspended .
Even B Hickey fails to mention anything here..even though it was the major story yesterday
in the end the guys ego will bring him down..and all those associated with him.including "beads & blankets" Mana
As I see it, with one new line of innuendo (there is another Prime Minister I don't like), yesterday DotCom single handed killed any news space for National's campaign launch (which admittedly has it's own problems with John Key now walking out of Press Conferences)
It is really not news what Dotcom has done in the past, National were very well aware of it when they granted him residency and gave him the full protection of the law over the onjections of the Immigration Department.
Oh you mean the stuff/Herald etc realised they had said somethings that were wrong, maybe libelious so withdrew it?
Or that they stopped the comments because again they maybe classed as publishing un-truths perpetuated by those of less than good mental health?
Considering Dotcom has said he's building a portfilio on whaleblubber's wrong rantings about him Im sure editors are very aware they publish incorrect "news" at their peril and fair enough.
regards
and so? he denies he is behind it.
I find it interesting that the right, those who are supposed to be pro-justice and pro self-responsibilty are so happy to sling mud at anyone who stands in their way with gay abandon.
Justice and responsibility it seems only apply one way.
regards
While a foolish teenager, a long time ago in effect. It isnt all you are saying, you are trying to smear a political opponent for no other reason than you think such dirty politics is OK as long as its the other guy taking it.
PS Oh and its considered so minor and so far in the past that as someone else pointed out Kim Dotcom was granted NZ residency and will probably be granted NZ citizenship. Consdiering some of the dubious ppl who National has allowed to come and stay because of "donations" to party coffers that is a bit rich.
regards
To be honest I couldn't careless, I hate petty politics and hypocrites. I can't stand people accusing JK of lying where as their idols were lying as much!
I am living in Queensland and the last state election, its Labour party adopted their petty campaign and what happened? thay lost 90% of their seats.
While back on the ABC TV, they had analogy on Megaupload and the court case with US Govt. It goes something like this: if you are running a Storage business and you know some goods being stored were stolen, would it be your responsibility to report it, or would you be responsible for allowing such illegal activities in your premises? That’s the argument for megaupload..
Putting aside that there are well established safe harour rules that Megaupload was inside of, how about this for a metaphor, if you have rich people wanting residence, and some of there wealth may have come from duious means, should you grant it. If so how much does that mean your government condones their behaviour (until such time as they turn on you).
However, a) if there is any case to answer its a civil case, b) the only reason its being pursued by the US Govn appears to be the paid for lobbyists are asking for it.
So it seems the right wingers like yourself want Govn out of a person's life except if that person's politics doest agree with theirs. In that case landing machine gun totting personal on the front lawn in the early morning with young young children around, kicking down the door and arresting a NZ law abiding citezen at aforesaid machine gun point is A OK by you?.
So yes sure a Govn can arrest a private individual because the ppl that individual has "annoyed" have coughed up large sums of money in political donations, you are utterly 2 faced.
regards
But "we" did. I use "we" in the same way that John Key uses "I". I don't really include me in there.
Now he is here, officially, he is entitled to work within the construct of the rules as they are.
Personally, I wouldn't have let him, or Donghua Liu and probably not Bill Liu in either, and probably a bunch of rich unknowns who otherwise would not have qualified, minus the dosh.
ah er no. He is a convicted felon who has served time for dishonesty offences.
And then he changed his name. Now he is trying to subvert the New Zealand election with his money.
......
As a teenager, Schmitz acquired a reputation in his native Germany after having claimed to have bypassed the security of NASA, the Pentagon and Citibank under the name of Kimble – based on the character of Dr Richard Kimble in the long-running television programme The Fugitive.[12] He also claimed to have hacked corporate PBX systems in the United States and said he was selling the access codes at $200 each, bragging that "every PBX is an open door to me."[32]
In 1994, he was arrested by German police for trafficking in stolen phone calling card numbers. He was held in custody for a month, released and arrested again on additional hacking charges shortly afterwards. He was eventually convicted of 11 counts of computer fraud, 10 counts of data espionage, and an assortment of other charges. He received a two-year suspended sentence – because he was underage at the time the crimes were committed.[32] The judge in the case said the court viewed his actions as "youthful foolishness."[33]
In 2001, Schmitz bought €375,000 worth of shares of the nearly bankrupt company Letsbuyit.com (de) and subsequently announced his intention to invest €50 million in the company.[34] The announcement caused the share value of Letsbuyit.com to jump[35] and Schmitz cashed out, making a profit of €1.5 million. One commentator suggested that Schmitz may have been ignorant of the legal ramifications of what he had done, since insider trading was not made a crime in Germany until 1995,[32] and until 2002 prosecutors also had to prove the accused had criminal intent.[36]
Schmitz moved to Thailand to avoid investigation[12] where he was subsequently arrested on behalf of German authorities.[33] In response, he allegedly pretended to kill himself online, posting a message on his website that from now on he wished to be known as "His Royal Highness King Kimble the First, Ruler of the Kimpire".[33][37] He was deported back to Germany where he pleaded guilty to embezzlement in November 2003 and, after five months in jail awaiting trial, again received a suspended sentence (of 20 months).[36] After avoiding a prison sentence for a second time, he left Germany and moved to Hong Kong in late 2003.[12]
..........
An all-round dodgy character.
but then you are politically motivated and are not interested in fairness are you.
Actually I dont think he went to jail. Plus some of the hacking he did do can be argued as a political statement, so he could be classed as a political refugee.
It was also 20+ years ago while a teenager. For me labeling someone a criminal for the rest of his life and especially when there was no violence involved is wrong.
regards
FYI updated with the following:
Labour Leader David Cunliffe and Finance Spokesman David Parker released Labour's updated Fiscal Plan that included the Treasury's forecast changes on Monday morning.
They said Labour had removed the indexing from a NZ$1 billion a year budget allowance, delayed the introduction of free doctors' visits for the elderly by 6 months to January 2017 and dropped six of its seven yet-to-be-announced spending policies. The one un-announced policy is costed at around NZ$95 million from 2016/17 onwards. They would not disclose the un-announced policies that were dropped.
Parker said Labour had carved NZ$300 million off its spending plans to account for the Treasury's lower revenue forecasts in the PREFU. Labour's fiscal plan still forecast surpluses and lower net debt than under National.
Labour plans to restart contributions to the New Zealand Superannuation Fund from 2015/16, starting with NZ$750 million that year and rising to NZ$2.2 billion by 2020/21.
Elsewhere on the campaign trail, John Key is reported to have said he would make some announcement about tax cuts later in the campaign, although it would not be a fully formed package. Finance Minister Bill English said last week there would not be a tax cut package announced before September 20.
Elsewhere on the campaign trail, John Key is reported to have said he would make some announcement about tax cuts later in the campaign, although it would not be a fully formed package. Finance Minister Bill English said last week there would not be a tax cut package announced before September 20.
What's the bet the "unfully formed" tax cuts proposal are a late entry to counter the impact of KDCs Auckland Town Hall event.
This is the path that OZ followed? every time they gave out more money the market went higher.
So what really happens is those FHBs who with that extra $s can buy do so, so they are OK. The ones slightly behind them are no better off and with the extra leverage maybe even worse?
Hmmm.
regards
The previous NZ Homestart scheme that was introduced in 1986 simply saw prices immediately increase by the amount offered under the scheme. The scheme was discontinued in 1990/1991 as nearly 50% of clients of the scheme were facing financial dificultes and possible default of repayments. The scheme provided interest free loans for 5 years for 12.5% of the value of the home and $600,000,000 was advanced under that scheme. Google Homestart 1986 for more information
"...Labour has made changes to its budget plans in light of the Government's pre-election update last week..."
"....David Parker said $300 million had been carved out of spending and some expenditure had been delayed including a six month delay in the start of Labour's pledge to give free doctors visits to the over 65s..."
The promises start to unravel; usually we have to wait till after the election for the socialists to admit they can't pay for thier election bribes.
"admiting they cannot do it...."
What ! ! ! Where do I even begin... Why promise it in the first place? Are they going to as publically, and as loudly, admit their lie as they did the promise? What more promises will need to be broken to accommodate the Greens, Internet/Mana and Winstons promises?
The fractured left are simply cannot reconcile all of their promises.
Simple, Labour who have no clear view of the country's books took the rough figures that are available and wrote a policy. When the problem become apparant thay prioritized rather than be accused of being spendthrift.They cannot win in your eyes can they.
The left consisting of The Green's, NZF and Labour seem to be building an agreement as they talk. So in finding much common ground tehy leave National more and more isolated and un-partnerable, toast.
I promise I'll do my best to vote Dunne out BTW, that will leave ACT.
regards
Unless the left factions present a joint policy and budget statement they cannot guarantee which policies will be inacted; it's a fact that there isn't the money there for all the various promises. So someone voting for Labour because they like 'xyz' policy may find themselves dissapionted because out of the post election negotiations the Greens 'abc' policy is given priority.
All your spin can't change this fact.
"promise I'll do my best to vote Dunne out BTW, that will leave ACT." - good luck.
Steven ..you think? ... cant see winnie and the greens building too many agreements.labour indulged in some pork barrel bribes,got called on to "show me the money" and are now backtracking as their polices were not costed as accuratelly as they thought.(apparantly there were still 6 more policies to release but now are scrapping these..)
They are now saying its Nationals fault for the current state of the books(which are only slightly down on forecast).Labour couldnt run a chook raffle let alone the country
What? They have found out that the books are not looking as good as National suggested. Fair enough things change so now we have a revised amount of money to play with. If Labour (who i'm not voting for) reduce their spending to keep within budget you say "the promises start to unravel". If National did the same you would be saying "very prudent sesible economic management".
Now I suspect you know that you are being intellectually dishonest when you make such comments and it affects your crediblity when you have valid points to make. Of course you may not be aware that you are being blinkered by your political bias and in that case I have made you aware.
For a cleaner smarter economy give your party vote to Green!
National arn't changing thier promises, Labour is.
You know full well I support some of the Greens policies, if they were the dominant centre left party I would probably vote for them. But right now any left govn would be led by the antiquated Labour party which means my vote for the Greens would be wasted.
Cunliffe needs to be challenged on his comments.
Speculators are already taxed....if Cunliffe doesn't know the tax laws then he should really keep his mouth closed rather than spread stupid incorrect statements!!!
It was Labour who did not provide the IRD with enough resources to chase speculators who were tax evading the system!!
Cunliffe is correct that there is a supply issue....but who put the restrictive legislation in place that ensured that supply was restricted???? Did labour support the changes to the RMA and LGA that National was trying to push through????
It will remove the grey area of intention at time of purchase. I mean how hard is it to say "I intend to live in this house for ten years or I intend to rent this place for ten years. Then you do up the kitchen and bathroom and the next thing you know "my circumstances have changed, I need to sell" tax free $100K
So Steven are you talking about the young person who buys a small 2 bedroom house and lives in it until perhaps the young person gets married and wants to start a family and finds they need a bigger house as their circumstances have changed?
Or what about the people who need to relocate regions for work?
People are far more mobile around the country are you suggesting that they should be taxed on a house they sell for e.g. $500k that say they purchased for $400k originally and then buy another one in a new region for $00k?
So firstly lets examine your scenario as the first at least is limited.
a) A young person owning a house, that is almost an oxy moron, frankly fairly unlikely for many young ppl, probably most, say 5 or 10% might own their own home.
b) The bank will own 80% of that in real terms.
c) So he/she has to sell because "they" now need say a 3 bedroom house. The relative difference in the houses? well what happens there? bear in mind a houses selling price is dependant on what the buyer can pay.
d) My balance on this is that the young person's PAYE is reduced, or lets say he or she is self-employed so the business tax can now be lower.
The people who it is really going to "dis-advanatge" is the property speculators who have lots of houses and hence will go from tax free to paying 15%....
On top of that I think both parties have already said the family home is exempt anyway.
So some % lose? well yes OK, thats life, swings and roundabouts, some other will be winning. So to encourage small business say we can drop the business tax 5% making investing in businesses more interesting than houses.
For the second scenario, that 100k profit is taxed at 15% (I think was mentioned) so yes they lose 15k in tax. So yes when they move to a new area they can only but a house for $485k. Considering ppl move often for a higher income well thats going to be lost in the mix.
Though again I'd expect that PAYE would be lower so the person maybe net better off.
Again see my comment on the one home being exempt.
regards
First problem I have with most of your comments/statements is that you don't understand the tax laws and how they are currently applied.
The second issue I have is that there should not be swings and roundabouts......some people winning and some losing is dangerous territory and only adds to inequality. of how individuals are treated by the State......which is unconstitutional.
Last first, well its simple there are always swings and roundabouts, so a good Govn / society chooses to level the playing field. That you think its adds to inequality is un-sustainable as an argument. And no it isnt un-constitutional or against natural justice. Our MPs the law makers decide the policies and write the laws therefore it is legal.
Tax laws, well given the my first reply its pretty obvious you dont understand or want to understand the principles that our society wishes to adhere to. Really I understand enough to see a wacko viewpoint when it appears. So a principle I wish my Govn to ensure is a level tax playing field and even remove "advantages" given where they are being abused, which in some cases is happening.
regards
Swings and roundabouts are supply and demand which is not meant to be interferred with via Political manipulation.
Where is your proof that the Government is legally able to perform the duties you say it is allowed to perform?
A viewpoint is one thing.....to indicate that you have a view and that your view is widely accepted and therefore must be societies view is er rather preposterous unless of course you are a dictator......where you enforce your view on Society.
My ticket offer for you to go and live in North Korea still stand!!!
notaneconomist would probably agree that Labour does not need a CGT.
All that is needed is for the IRD to examine every property transaction to determine whether a profit is made intentionally.
For a start every rental investment qualifies unless the owner occupies or has occupied for a significant part of the recent period. Any person who sells even the family home after only short occupancy would have to be very careful as to their reasons. Just those very few areas would raise lots of tax revenue and also could be used (as the IRD already does) to recover taxes from previous years.
Then of course that should apply to shares. However its of no matter, simple all profit should be taxed at an equal rate no matter the endevour except where a Govn has decided to allow a bias because it furthers a principle / policy that is desirable.
"For a start every rental investment qualifies" I dont think it does right now, the business is renting out and tax should be paid on that, capital gain is "incidental" so no tax is paid. Also when a business is sold for a profit I dont think tax is paid on that profit either?
regards
Updated with this below from Nick Smith on Hobsonville (I'd welcome the thoughts of those familiar with this project)
Ie Will subsidising first homers to bid against non-first homers and investors for these house/land packages just put the prices up?
cheers
Bernard
Following up on the announcement, Key and Smith visited the Housing NZ Corp development at Hobsonville on Monday, which they said was the sort of development that first home buyers could use the expanded HomeStart grant.
"We have up to 3000 new homes coming on-stream here over the next 10 years, of which at least 20 to 25 per cent will be within the new NZ$550,000 house price cap for Auckland under KiwiSaver HomeStart and the Welcome Home Loans," Smith said.
He said the first sod on the former Defence Force land was turned in 2002 by then Labour Prime Minister Helen Clark, but the project had then stalled because of planning disputes. The Government had revived a housing plan in 2010 and then included the land as one of the 63 Special Housing areas under the Housing Accords and Special Housing Areas ACt in 2013, Smith said.
"Earthworks were consented a week later and now 444 houses and sections have been sold. A further 350 houses are to be sold in 2014/15 with development partners. Beyond these 3000 houses, there is also a further 2,000 proposed on adjacent private land in a Scott's Point development that has been approved as a Special Housing Area," Smith said.
"The practical effect of HomeStart at Hobsonville is that a first home buyer can now purchase a three-bedroom house. The previous house price cap of NZ$485,000 meant that first home buyers could not access previous grants or the Welcome Home Loan for the dozens of three-bedroom properties at Hobsonville on sale in the NZ$520,000 $540,000 range," Smith said.
"I am confident we are going to see hundreds of young Aucklanders accessing the new KiwiSaver HomeStart so they can purchase their first home in Hobsonville. I also expect this development to now advance even faster with the additional buyers in the market. An important objective of KiwiSaver HomeStart is to encourage more housing companies to build new houses in the price range affordable to first home buyers," he said.
"Hobsonville has shown it is possible to provide good quality, more compact housing that is affordable. The flexibility and speed of the Special Housing Areas legislation combined with KiwiSaver HomeStart opens the door to many more developments like Hobsonville across Auckland."
Will subsidising first homers to bid against non-first homers and investors for these house/land packages just put the prices up?
The developer's have already put the prices up - and so National have responded by lifting the subsidy plus the eligible band accordingly.
It's only last year they were reporting that;
http://tvnz.co.nz/national-news/affordable-homes-snapped-up-5350005
Around 20% of the homes to be built at Hobsonville Point over the next 10 to 15 years will be priced at up to $485,000, with half of these priced below $400,000, indexed to inflation, under a programme announced late last year.
Those prices and percentages have gone out the window, obviously.
Someone should pull them up on this "indexed to inflation" comment, because the developer's price increases inside one year clearly seem well above the rate of inflation.
Hobsonville is a social/housing policy joke - nothing to do with helping FHBs.
They've at least tried with Hobsonville, although it's hit and miss.
The "affordable" smaller homes are a bit of a joke. 2 bedroom 106 square metre homes on 268 square metres sections for 485K!!!!!!! Affordable?
They could easily have got to 85 sq m homes on 200-220 sq m selling for 400K
It's easy to imagine the conversation in the developers office:
" ..So we need to put our price at 485k to attract the grant funding, we want 150k margin so to achieve that this is what we build...."
Reality is these are not homes built by people who wish to live in them so providing the functionality they require. These are boxes conforming to minimum allowable specs and sold for maximum return within the "affordability" band. Good luck getting your money back if you want to sell.
The 'scale' is but one of four issues: I expanded here, but the short version is:
- ditch the zonings and/or build greenfields as long as rural land value prices can be paid. Zonings add instant CG to the land-bankers....courtesy of a squiggle on a map. The Productivity Commission was hot on this very topic.
- Multi-proof consented factory builds. Takes the stoopid Councils out of the loop except for founds and overall progress inspections.
- GST exemptions for those accredited Hoose Factories. Impossible to police otherwise.....whereas houises outta said Factories will have serial numbers and full traceability. No mo' builders' baches appearing via the spare materials from their latest house....courtesy of the FHB.
- Change the house-pron-driven expectations of 200 squares plus with all bells and whistles: the old Keith Hay at 80-100 squares has brought up many a happy family in those far-off Good Old Days. Doing this probly means driving a dozer (a D7, natch) through any Covenants, Conditions or Restraints (CC&R's) put there by thoughtful developers....or their m8's on Councils....
Not altogether sure that Kiwibuild makes much or any of these:
- silent on GST
- Replaces homes in existing welfare sink-holes: brownfields not greenfields
- silent on TLA's DC's, consents and other fees and charges rorts
- silent re multi-proof but mentions 'apartments' which would expose the programme to the full horror of TLA consent machineries
- silent on zoning, MUL's, RUB's which all present (Productivity commish etc) identify as a major cost culprit.
Updated with this very strong attack from Oliver Hartwich on the first home buyers' policy:
NZ Initiative Executive Director Oliver Hartwich said the policy would drive prices sky high.
“National’s announcement does nothing to remove the constraints and roadblocks to building more houses, such as tight land supply and limited infrastructure. All it will do is subsidise demand, which is likely to push prices even higher," Hartwich said.
“It may well be a vote catcher, but it in the long term the policy will exacerbate New Zealand’s housing affordability crisis,” he said.
Hartwich pointed to a new report from the NZ Initiative showing New Zealand would be short more than 113,000 homes unless construction increased from current levels.
“Construction has fallen to just over 15,000 new dwellings per annum. Supply is now at its lowest level since the mid 1930’s," he said.
“Instead of turning the tide on the greatest crisis facing the New Zealand economy, the government seems to have chosen good politics over good policy.”
He said the best way to improve affordability was to reform the Resource Management Act and boost infrastructure finance for councils.
cheers
Bernard
Because that way John Key gets the biggest bang from $218million bribe. He gets to leverage the youngs retirement savings so they borrow the maximum amount to keep this bubble bubbling.
John and the rentiers need to get the next generation onto the housing ladder so they defend the status quo. If there are too many renters then they might form a powerful electoral group demanding change.
Never been on it, Whale Oil that is. Calling some one an old goat is a bit personal VA. Only 58 and pretty fit after the bike rides in the afternoon sun. You say you went overseas to obtain your house deposit. What went wrong then. To come back without it means either of two things. You are not qualified in anything which would enable you to achieve that deposit overseas or you spent it travelling. Now be honest with yourself and the readers here. You are in your 30's and no house. You are either not capable of earning a good income or you spend the good income you are capable of earning. Either way you have failed miserably and now you say the government underwhelms you.
Good ol' NZ where there is nothing better than to run down others or hack away the tall poppies. The internet simply provides another outlet for expression.
But of course, life is not about making the "right choices"; it is about opportunities, which makes qualifications often meaningless. Hence, the booms that exisited for chancers in the IT booms in London and Tokyo in the 90s. A computer science degree was not necessary among those with the gumption.
And then we have the endless stream of generational lecturing of over-spending on smartphones, travel, and flat-screen TVs. Probably not known to the blue-rinse brigade in NZ is that the adoption of smartphones is at its greatest in countries such as Vietnam, where the cost of a phone is often a few months of income. Discussing this with the blue rinse set in lil ol' NZ is all rather pointless.
What a joke TFT. Your generation cannot wait for us to die as we have not only worked hard but we have saved and lived within our means and we are going to leave it all to you lot to squander. Your kids will hate you for not leaving them much as you will not be able to help yourselves. The big house, the boat, the flash cars, the trips, the clothes etc etc.
The only point I agree on is that us baby boomers have been greedy over property. Personally I have only the minimum as I prefer equity in private and public companies. The average boomer who has not had the chance to be eduacated like X and Y today has had to resort to buying property to bolster their retirement. If people have ability today and they go to university and get a degree they can earn seriously better money than their parents ever did.
The only reason you have "remained with in your means" is due to your astronomical asset growth over the last 30 years. Sure you probably worked "hard" at the start as house deposits don't fall out ofthe sky for most people but try doing it now, your minimum wage of back in the day is equivalent of $30+ pH wages today. Plenty of people (our generation) would give their left leg to grow up in your "tough times" as apposed to now. I for one would.
One of the main reasons I am retired at 58 and after 30 years of work is that when I started working I made a concerted effort to build up a deposit for house with my wife and once we had the house we tried to pay off the house debt as quick as we could and at the same time I started buying equities. I have never seen the house as something I could live off. Rather I have seen it as an expensive necessity that constantly needs maintenance. I have only had three houses over my 32 years of marriage and will probably only have one more when the current two storey one gets difficult to live in.
People like VA overlook the many people in his and your generation who are achieving home ownership in NZ without any help from the government or their families. They have average jobs and children and still achieve it today. How do they do it? Obviously they strive to save a deposit and it works like it always has. They go without things they don't really need like Sky TV, fancy phones and cafe meals/takeaways and alike. VA says he went overseas to earn a deposit and now we hear from him in his 30's and he has no home. Yet families with possibly less income have achieved home ownership in the same time. Maybe he wanting to buy in a flash area and live like his parents. It does not stack up.
And they can eat porridge. Many do.
However, that means that nothing is wrong with societies dedicated to reducing the cost of living, not grinning and bearing and accepting your lot. That is the what you would call societal evolution, not jury rigged politico complexes that have created a monster that creates more economic and societal instability. Just like in Japan, there were plenty of "average" hard-working people whose dreams of home-ownership and a comfortable retirement have been ravage by price appreciation, then 20+ years of deflation. Of course, back before the unthinkable happened, there were no gurus sitting around in front of monitors warning of the invisble risks.
Life in 2014 is about accepting risk and not being "average". It's been like that prior to the GFC, despite what late life stagers in NZ think. Sure, there are options, but the path of average, off-to-the-salt-mines mentality is not necessarily the path of "least harm" as the crusties believe. If one believes of the complexity and fragility of current paradigm, understanding the power of smart phones is arguably buiding your own white picket fence.
Interesting editorial in the Herald today.
Seems like it's the people who own more than 1 property are causing the problem...I wonder if those on this site who are landlords have anything to say about that?
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http://www.nzherald.co.nz/opinion/news/article.cfm?c_id=466&objectid=11314096
As well as assessing whether this is a useful policy response - not IMHO, it seems worth examining whether FHBs are actually a bunch of whiners or really struggling compared to past buyers. Let's compare a dual income couple buying in 1983 compared to 2014. To do this the following values were used for 1983 & 2014 respectively: price to earnings 3.5 & 7; net household income $28k & $64k; mortgage interest 15% & 6%; house price inflation 9% & 5%; wage inflation 9% & 1%; annual principle payments as % of net income - 5% for both. Running these numbers through a simple XL model yields the following after 6 years - Deposit as a % in net income 1983 = 88%, 2014 = 175%; change in equity 1983-1988 20% to 53% a 164% increase, 2014-2019 20% to 40% a (rounded) 98% increase; drop in interest costs as % of net 1983-1988 41%, 2014-2019 8%; percentage of mortgage remaining 1988=91%, 2019=96%.
The reason for these counter intuitive figures, given the extreme interest rates in the 80's is that inflation rapidly erodes the real value of the mortgage & increases the price & equity of the asset. Am happy to forward complete calcs to interest.co, but hope this puts to rest the argument that FHBs now are just a bunch of whiners who need to buckle down, save some money & stop bleating. They're doing it MUCh harder now & with ongoing low interest rates will likely continue to have much higher mortgages, in percentae terms, for much longer than earlier generations.
Let's continue the productive discussion of how we can engage young, and not so young, FHBs & give them an incentive to participate in & ownership of our society.
You are dreaming Frazz. Young farmers and FHB can still achieve ownership like the Boomers if they put their mind to it. One concession I will make is that people today have far more temptation put in front of them compared with what we faced in the 80's. I am talking access to overseas vacations, sky tv and cellphones etc. Just look at how many young people today have i phones for example. My kids drink coffee and have breakfast out on a regular basis , things we did not have available when we were their age. One thing I noticed when working until recently was that nearly every FHB I worked with was raiding their kiwisaver and were relying on kiwisaver grants to create their meager deposit. Without kiwisaver the housing market would not be as strong as it has been of late. It was very rare to meet a couple who had put together a solid deposit over a period of time and resulting from saving one of their incomes.
frazz I am not impressed by his numbers. I recently saw a comparison put out by Massey University if I recall correctly and their conclusion was it is no harder to buy a house today than say 30 years ago or so. I think I would rely on them more than the above figures put together by akaha.
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