Here's my summary of the key events overnight that affect New Zealand, with news Chinese companies are in an enormous binge of 'overseas investment'.
But first, Vancouver is moving to impose an 'empty homes' tax of up to 2% per year, based on its assessed value. It is in response to a near-zero rental vacancy rate and widespread concerns that outside investors are just banking homes as appreciating assets. But the tax will only be imposed on owners who self-declare that their property is vacant.
And related perhaps, in a roundabout way, Chinese companies are on an overseas investment surge. In August alone they shipped more than NZ$20 bln offshore buying up 'investments'. That is +15% higher than the same period a year ago. In fact, in the eight months to August, the pace is more than +50% higher than the same period last year.
Australia's grocery market is famously anti-import and the fruit & vegetable section the most protectionist. However, things are changing, although not without stiff resistance from local growers who have grown fat-and-lazy in the current situation. To much criticism from suppliers, Woolworths has decided to import avocados from New Zealand for its Queensland stores. No doubt, this is a shot in the arm for Kiwi growers who are already riding a boom in export volumes. So no inhibition from the high Kiwi dollar here.
Aussie consumer sentiment is remarkably stable, despite the noise of volatility at home and around the world (with events like Brexit), and a shambles of a Federal election that sorted out nothing. The Westpac - Melbourne Institute Index of Consumer Sentiment rose +0.3% in September to 101.4, from 101 in August.
In New York the UST 10yr yield is lower again today and now at 1.70%.
The oil price has slipped again in today's trading, with the US benchmark price now just over US$43.50 a barrel, while the Brent benchmark just under US$46 a barrel.
The gold price is marginally higher, now just on US$1,322/oz.
The New Zealand dollar opens a bit higher too, now at 72.9 US¢, 97.5 AU¢ which is getting up there, and 64.8 euro cents. The TWI index is now at 76.3.
If you want to catch up with all the local changes yesterday, we have an update here.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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18 Comments
Vancouver fantastic..also PENALTIES if they don't declare their home empty. !!!
Llewellyn-Thomas explained how the self-declaration process would work. The city would require homeowners to declare their “principal residence” using a definition for that that is similar to the one in the B.C. homeowner’s grant.
Staff would then perform random and snitch-driven audits to sniff out homeowners who had not been truthful. Auditors would request things like drivers’ licences, health cards and documents from the Canada Revenue Agency for proof of principal residency — all are forms of proof that the city can now legally demand given recent changes to the Vancouver Charter, Llewellyn-Thomas said.
When asked if she really thought people would self-declare an empty home, Llewellyn-Thomas said: “It’s the same as the income tax process. That’s the basis of our tax system here in Canada and so the audit process and the complaints process will keep people honest.”
When people are found not to have been honest, they will be hit with a penalty. What that will be is, along with a host of other details, yet to be decided.
Since this would be amount to a false tax declaration one would imagine similar penalties. Just goes to show how concerned the authorities there are (snooping around sussing out empty homes) as well they ought to be given the monumental disaster they have helped create by ignoring it for this long.
Why not allow squatters rights. As far as I can see this was legally permitted so that property was meaningfully utilised and did not lay idle. In the current conditions around the world, something like this seems appropriate. (It means that we would have to rent the batch out however)
The beauty of the Vancouver Stamp Duty and Empty home taxes is that even if it doesn't reduce the average prices least the government will be collecting some tax revenue which can go towards infrastructure.
The more revenue collected the less the taxpayers will have to pay out of their own pockets.
Win Win I say... worst case just extra tax revenue ... best case extra tax revenue and a drop in prices.
were as in Auckland locals will soon be paying tolls to pay for the infrastructure
http://www.radionz.co.nz/news/national/306942/govt-backs-road-tolls-for…
Talking of penniless Students, here's another interesting article from Vancouver today: Student who flipped Point Grey property for $1.16 million profit prompts new call for stricter oversight for real estate
http://vancouversun.com/news/local-news/student-flipped-point-grey-prop…
The 2% tax would be able to be levied by insurance companies as is the fire service levy. Dead easy. As far as i know most insurance companies need to be notified when a house is empty. Although state would not insure my grandmothers house when she went into a home. We planned to sell it once she was ready for that.
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