Credit Suisse is proving to be a bit more empathetic to those latte sipping Millennials than BNZ chief economist, Tony Alexander, has been in the past.
In the investment bank’s 2017 Global Wealth Report, it puts forward an argument for why Millennials have had an “unlucky” start to adult life.
Here are a few exerts from the report:
The “Millennials” – people who came of age after the turn of the century – have had a run of bad luck, most clearly in developed markets. Capital losses in the global financial crisis of 2008-2009 and high subsequent unemployment have dealt serious blows to young workers and savers. Add rising student debt in several developed countries, tighter mortgage rules after 2008, higher house prices, increased income inequality, less access to pensions and lower income mobility and you have a “perfect storm” holding back wealth accumulation by the Millennials in many countries. In emerging markets, it appears that trends have been somewhat more positive and the Millennials have everywhere met both their challenges and opportunities energetically – for example by pursuing a more active, healthy lifestyle and participating in the sharing economy. Nevertheless, on the whole, they are not what one would call a lucky generation.
The Millennials’ challenges seem to have been most evident in North America, but the ripples have extended to Europe and elsewhere. They contrast with the good fortune experienced by the baby boomers, born in large numbers between 1945 and 1964, whose wealth was boosted by a range of factors including large windfalls due to property and share price increases. The millennial cohort is smaller as a percentage of the total adult population than the baby boomers were at the same age. Normally it is good to belong to a smaller cohort: there is less congestion in school and less competition with peers for jobs and homes. So why aren’t they a lucky cohort? Did the financial crisis and its fallout just swamp the advantage of being in a small cohort? Or is there more to it?
Some commentators have mentioned the shadow cast by the baby boomers in developed countries. The boomers are now aged about 50 to 70 – their peak wealth years. They occupy many of the top jobs and much of the housing, especially at the higher end. Some Millennials feel that their own progress is being held up as they wait for the boomers to vacate. Cohort analysis seems to have been turned on its head: the big cohort is now the lucky one.
The comparison between Millennials and boomers is not entirely fair. All cohorts tend to have relatively high wealth when aged 50–70, and young people always struggle to settle in the labor market, establish families and buy homes. The boomers also experienced setbacks: the stagnation of the 1970s, high mortgage rates in the 1980s, and high inflation for a couple of decades. However, the Millennials are doing less well than their parents at the same age, with respect to incomes, home ownership and other dimensions of well-being…
Assets and debts of the Millennials
According to the IMF, state pensions in advanced economies are expected to replace just 20% of per capita income by 2060, compared with 35% today. Also, fewer workers are now covered by employer-based pensions than in the last, and defined benefit pensions are declining fast…
So it is increasingly important for people to save for retirement on their own account. The share of financial assets in total assets will need to rise in most countries in the future... This is especially true for the Millennials, who will likely face the added challenge of higher contributions and taxes required to fund state pensions and other benefits for the baby boom cohort in their retirement…
Student loans have been an increasingly important component of debt in a number of countries…
The rise in student debt is partly due to higher fees. But it also reflects the fact that Millennials are more educated than preceding cohorts. For instance, the percentage of 25–34 year olds with tertiary education in OECD (Organisation for Economic Cooperation and Development) countries rose from about 15% in 1970 to 26% in 2000 and 43% in 2016. This greater educational attainment may help to ease the Millennials’ labour market difficulties.
However, although average rates of return to college and university have held up fairly well, this is largely because lower wages for less-educated workers have reduced the opportunity cost of tertiary education. Acquiring more education in order to overcome the “millennial disadvantage” is a strategy that will reap rewards for a minority of high achievers and those specializing in areas in high demand like high tech and finance. But for most university-educated Millennials the outcome may be job opportunities and wages no better than those of their parents, achieved by a dint of more costly education…
Entrepreneurship
It is sometimes claimed that Millennials are starting more businesses than earlier generations, and doing it at younger ages. But the official statistics suggest otherwise: only 2% of Millennials in the United States are self-employed, versus 8% of Generation Xers (those born between 1965 and 1980) and baby boomers. And entrepreneurship, as measured by the fraction of self-employed workers, has been declining in most OECD countries since the turn of the century. The OECD self-employment rate fell from 17.6% in 2001 to 15.8% in 2011…
The apparent decline in entrepreneurship among Millennials relative to their predecessors seen in the official statistics may reflect the fact that the cohorts being compared are observed at the same point in time, not at the same age. More Millennials will start businesses as they age. Another explanation is that those Millennials who have become entrepreneurs have each created more businesses than their counterparts in earlier cohorts. This may reflect their “tech savvy” and the greater ease of starting multiple businesses these days with the help of the internet. A third factor is that although many Millennials would like to start a business, for a time they were restrained by tough economic conditions. This suggests a surge in millennial entrepreneurship may occur soon or may already be taking place, as has been seen in some emerging markets, such as China and India.
Comparing cohorts
Figure 4 shows wealth components for US adults aged 20–29 and 30–39 in 1992, 1998, 2007 and 2013. Total assets increased markedly for the 20–29 year-old group between 1998 and 2007, due mostly to an increase in real assets caused by rising house prices. Real assets for 30–39 year olds also increased rapidly at the time, but mean financial assets fell in this age range, perhaps reflecting re-allocation of portfolios in response to the changing returns from real and financial assets. Things went into reverse between 2007 and 2013: real assets declined substantially for both groups between 1998 and 2007, but since returned to its 1992 level.
These comparisons tell us about the experience of Generation X and Millennials in their early adulthood. Generation X was still in its late 20s and 30s when house prices rocketed in the United States prior to the global financial crisis, and during the crisis itself. So it, as well as the first wave of Millennials, had a wild roller coaster ride. They experienced not only the effects of the general rise and fall of economic activity, but also the impacts of wild swings in asset prices. Both aspects are reflected in the wealth changes seen in Figure 4…
Inequality and mobility
Millennials have been affected by the general rise in income inequality in advanced economies over recent decades. In a world with constant mean income, constant inequality and no mobility, parents and children would be equally well off. If – more likely – mean income is rising, and there is some mobility, but inequality is constant, then most children will be better off than their parents. But income inequality has been rising in the United States since the mid-1970s, and while mean income has also risen considerably, median income has not increased much.
Mobility has also gone down. Similar trends have been seen in other “anglo” countries (with some notable differences, of course). The net result is that past expectations no longer apply. For example, 90% of children in the United States born in 1940 had earnings greater than their parents’, but this ratio had fallen to 50% for children born in the 1980s. About 70% of this decline was due to the rise in inequality.
Billionaire Millennials
Some Millennials have become very prominent billionaires, for example the principals in Google, Facebook, Twitter, and some other internet or high tech enterprises. This raises the question of whether some Millennials, at least, have been unusually successful entrepreneurs…
Rates of return and interest rates
The financial prospects of a cohort are affected by the rates of return they receive on investments and by the interest rates they face. Throughout the world, equity returns were high in both nominal and real terms during the 1980s and 1990s, providing favorable investment opportunities to baby boomers in the first half of their working lives, and also to young members of Generation X… IN the first decade of the new century, however, both real and nominal returns collapsed, creating quite a different investment environment for the Millennials. After 2010, returns rebounded, but not to the level seen in the 1980s and 1990s.
The interest rate story is similar to that for equity returns, but the decline in real rates began earlier, in the 1990s. Although they rebounded slightly in Europe after 2000, the decline was steady in the United States. This is significantly because workers trying to acquire assets increasingly have to switch to riskier investments to get a reasonable rate of return. Real lending rates, which are also important for young people, via mortgages for example, have declined over time as well, but more slowly than deposit rates. In the United States, lending rates reached quite a low level after 2010, but in Europe they remained at 3.8%, far above the real deposit rate of 0.4%. Hence safe saving opportunities have deteriorated for young people, while borrowing has not become correspondingly cheaper.
Conclusion
The Millennials have not been a lucky cohort so far. They faced the rigors of the financial crisis and the high unemployment that followed in many countries, and have also been widely hammered by high and rising house prices, rising student debt and increasing inequality. Their pension outlook is also worse than that of preceding cohorts. Some of the Millennials have prospered in spite of these difficulties, as reflected in the more positive picture we see in China and a range of other emerging markets, and the recent upsurge in the number of Forbes billionaires below the age of 40. Some have had substantial family help in paying for education and buying homes, and some stand to inherit from wealthy boomer parents in the future. But there are many Millennials who have not been so fortunate. As a result, the Millennials are not only likely to experience greater challenges in building their wealth over time, but also greater wealth inequality than previous generations.
86 Comments
I obviously agree with this article and have made many similar comments here myself. Unless there is a major reset, Millennials are screwed and I find it beyond cruel that they are taunted and mocked by older generations who had much better luck and opportunity for wealth.
My school year were all born 1979/1980 which makes us Gen X by most measures but Millennial by some. But otherwise, still think I am financially much more advantaged than a Millennial 10 or 20 years younger (but no way near as advantaged as a boomer or older Gen X-er).
I'm an old fart Gen X, and agree. We heard all the same bullcrap from smug boomers when entering the job market with the first student loans in the recession they caused, and it isn't any more valid now than it was in the early 1990s. A lot of boomers have sailed through in a little sheltered bubble of privilege, with everything skewed to benefit them because of their sheer numbers, haven't a clue that things are different outside the bubble, and lack the empathy or brains to listen or learn.
There's a massive propaganda campaign against Millennials, and the whole thing's geared at trying to shame them into shutting up and not standing up to policies developed to exploit them in order to preserve the unearned privilege of the lucky and pampered cohort.
The concept of the generations like Boomers, X and Z etc is largely only applicable to Western people and more specifically North Western European, the UK and the British diaspora countries. The Boomers certainly have found themselves in a privileged position. They are like the high point of this civilization having inherited much from their ancestor's endeavours. They were lucky to be the benefactors of the Reformation and then the Enlightenment. Boomers today are still known to go on about "The Enlightenment". They are an enlightened generation, the product of too much thinking. We await Generation Z or perhaps the next wave to topple these idols. It makes sense that this would happen.
I think there has been something of a boom worldwide in terms of certain farming and technological advances that led to cheap, more reliable food, but it hit different countries/cultures at different times, later in many places.
But obviously WW2 was a crucial factor to the Baby Boom, so that effected the "West" more significantly. How we define "generations" is not just a Western phenomenon. I think cultural phenomenon prevalent over specific periods of time, is observable in all countries and cultures. The youth of India and China, who have internet access growing up are going to have cultural features unique to that, as opposed to their parents and grandparents who didn't grow up with that.
Nope. Oil. Cheap (ie easy to obtain and high quality) Oil and plenty of it. The master resource.
thats why the boomers were lucky.
Nothing exists without ongoing abundant energy surplus and Oil is king here.
When the boomers started getting short of it they added DEBT to keep the party going. Debt is a promise to pay in the future .... with energy suplus down the track!
Hold on, but isnt that what the boomers already burnt i hear you ask?
Doesnt that mean we are at the end of a ponzi?
Saudi Arabia is ordering its super-rich princes to cough up billions of dollars in exchange for their freedom as part of the country’s ongoing crackdown on corruption... Saudi torture victims include former king's son....Prince Miteb, son of late King Abdullah, is among six princes who needed hospital treatment following arrest in Saudi purge.... One of the men was in such a bad condition that he was admitted to the hospital’s intensive care unit ....Hospital staff were told that the injuries sustained in each case were the result of "suicide attempts". All had been severely beaten,the marks on their bodies were consistent with the imprints left by military boots.
Sometimes it doesn't matter what Generation you are from....Oh, and Gold was up $20 as a result.....
Stop moaning millennials... "Here we present seven simple tips for millennials on how to buy a house.
1. Be born earlier. All too many young people today didn’t get round to being born until the late 1980s, or even the 1990s. As a result of their tardiness, they were much too late to take advantage of low house prices. Those who had the foresight to be born in the 1950s and 60s, by contrast, have been justly rewarded for their “get-up-and-go”. If you were born too late, be sure not to make the same mistake again.
2. Inherit wealth. Inheriting wealth is an excellent way to pay for that first big deposit..."
http://www.telegraph.co.uk/news/2017/11/18/stop-moaning-millennials-wan…
Olly Newport,
Average house price in London:
1996: £79,000
2016: £488,908 (518% increase)
Londoner's average wage:
1999: £22,487
2016: £36,302 (47% increase)
Average deposit today: £96,000
Price of meal deal: £3
260 days X 3 = £780
Years to save for deposit by not eating: 123
https://www.standard.co.uk/news/london/estate-agent-says-londons-millen…
"The only way young people can afford to get a house in London is to wait for their parents to die so that they can get their house."
The trouble is, with 0% interest rates Mum and Dad will have had to do a Reverse Mortage to sustain themselves, so there will be no house left to get! ( And, no. It won't be any different here!)
Then there are those, who see themselves as lucky, no matter what.....
http://tinyurl.com/ybt4c6fq
@ AndrewJ; I'm sure a similar living cost comparison for Auckland would be even more staggering. I remember when you could buy a good sized home in St Heliers for $600k only a few years ago. It will be interesting to see how quickly the Auckland market switches back to being more affordable.
Most of the younger people I know are either emigrating or are now looking to saving up now that they within a change of owning a home.
CJ - from a while back - Greg's Big Mac index thread - 1995 inner Auckland suburbs $220,000/$2.95 = 75,000 Macs. Say today $1.1 million/$6.00 = 185,000 Macs. Thus one has forgo 110,000 Macs before they can even level peg with 1995 Auckland punter.
How many cancelled Sky subs to flatten this chart?
https://mobile.twitter.com/TheEconomist/status/840203767647744000/photo…
We have a super volcano under Lake Taupo and I have wondered in these pages if it might be possible to defuse it while at the same time generate geothermal electricity. I have just found a report from Nasa that looks at this very scenario. http://www.bbc.com/future/story/20170817-nasas-ambitious-plan-to-save-e….
Hot idea...Should be feasible, Rotorua & near Taupo already do use thermal and lots of residents did, until the pressure dropped.
Plenty of water to Boil..Then turn off the tap, when not required. Maybe even Pump the water higher, then use it twice...with hydro..
Might as well build a simple generator, instead of waiting for too much pressure to blow its top, do not want another Tarawera ....do we?. Was ash and cloud everywhere. Cheaper to use it sustain-ably, if used wisely.
Brock, yours is merely an unresearched and very negative opinion. Of course with your attitude we could no nothing and one day probably devastate most of the North Island. Yes, there are truly enormous forces at work but perhaps ameliorating such powers over hundreds or thousands of years may control or reduce them. I have read a report that should Yellowstone explode it could kill over twenty million Americans and remove the USA as a world power. We should be watching what the Americans discover with great interest. Of course our politician's three year vision will be zero help.
Well it's understandable to think that we cannot harness that much energy, looking at the mass of earth that was displaced to form Lake Taupo. I'll do the math.
It's been estimated that the Taupo eruption release the equivalent energy of a 20,000 Megaton of TNT explosion. According to Wolfram Alpha that's about 23 Billion MWh. So to defuse the equivalent of a Lake Taupo eruption, you would need a 1 MW geothermal plant running constantly for 23 billion hours. That's about 1 billion days, or about 3,000,000 years. Sure, make the plant 10MW and you chop it down to about 300,000 years. I guess the point is, the pressure can build a lot faster than 300,000 years when geological faults shift.
I think Brock is right, suck the energy out from one place, and you'll find that the pressure just builds somewhere else like whack a mole, and there's no way we can drain the energy fast enough to undermine potential volcanic explosions.
We are all very lucky to be living in NZ!
Many on Interest continue to moan about everything and anything without doing something about it!
Reality is in 10years time the next generation will be saying the same thing.
Truth is that the baby boomers generally didn’t moan about things like the 20plus ones do today and want everything their own way!
I know many will rubbish this but it is the truth!
I wouldn’t mind being 20 years younger as Apart from having extra life there are still great opportunities in NZ but definitely less than there has been due to the change of this new Government, that will be very bad for growing the country.
If you are on the lower financial rung you will be looked after better but it will on,y be for a very short time, as the government realise that they haven’t got much of an idea of running NZ successsfully, although we may have cleaner rivers!
New Zealand Superannuation (NZ Super) is the government pension paid to Kiwis over the age of 65. Any eligible New Zealander receives NZ Super regardless of how much they earn through paid work, savings and investments, what other assets they own or what taxes they have paid.
THE MAN 2, you certainly come across as wanting to convince others of your success. If you cannot afford an accountant suggest you visit: https://www.ird.govt.nz/
1) If those living in NZ are so lucky, why do we have a net loss of Kiwis out of the country year after year? If it's so good here we wouldn't lose so many.
2) How do you know people do nothing?
3) I agree. In ten years time Gen Zs will say the same things about the Boomers that Gen Xers and Gen Yers say.
4) Where's your evidence that Boomers don't moan? You're moaning right now. That seems hypocritical. I also hardly think wanting the same opportunities as you parents is unjustified to complain about.
5) How has Labour+NZF+Greens restricted "great opportunities?" I'd argue that National is the party doing the restricting (asset sales, housing bubble/ponzi, low wage inflation, not reducing housing affordability, backing out of creating wage parity with Australia...).
6) "...bad for growing the country." Growing what? Debt? Asset bubbles? A reduction in home ownership rates?
7) What's your definition of "successfully" and has National been doing "successfully?"
1. Young Kiwis go overseas for their great OE experience.
Think many come back and NZ is a great country if you are prepared to invest and work.
2.Because if they do something about it they wouldn’t be complaining
3. Being jealous of anyone is not worth the effort!
4. I am not moaning at all, just stating facts
5. Take a look at the crap that has come out of their mouths that won’t be happening. Minister of housing now thinks that he will double the no. Of houses in the next ten years from the 100;000 over ten years.
Impossible at that and also the fact that they will be gone in under 3 years because of incompetence.
6. The debt will grow from the spending that they will be doing. Clark thinks we can afford to have free dental care now. Apart from cost where are all these dentists??? Absolute BS again
7. National was successful in running the country over the past 9 years. Most of NZ will want them back in very shortly!
It USED to be a great country if you were prepared to work. This is no longer the case.
Now what makes 100,000 houses or even 200,000 in a FULL DECADE so "impossible"?
It means you only need to grow the production rate of housing 5 or 10 percent a year, the laws of exponential growth will take care of the rest. This is EASILY achievable with a government in place that wants to do it.
The glory days of parasitic landlordism are drawing to a close. The houses are coming and will within a few years be rolling off local and overseas factory production lines at a rate that will make your head spin. The restrictive Rural-Urban boundary will also be consigned to history and mass immigration will no longer be used as a tool to mask National party economic incompetence.
Perhaps its time to sell up your little slum empire and do some honest work like the rest of us. Soon the product you peddle will no longer be artificially scarce and you won't be able to hold families hostage for a king's ransom.
National and their dirty politics brigade ain't coming back as so long as Winston is alive and kicking.
Brock Landers
Reading a magazine at my boomer in-laws the other month, interview was with a couple in their mid 60's talking about their climb up the property market. Adjusted to today's dollars, he was on $30 per hour and they bought their first house in Papakura for $150k - $175k both very early 20's. I bet the avocado's were cheap to boot!
I retired young (not from Lotto) and am just outside of being a Boomer. Starting out when mortgage interest rates were 18%, it was a little irritating to be presented with the "we sat on beer crates and we did it" speech by both parents. It's worth noting that state advances had on offer 3% interest rates to many Boomers including our parents. As many will know this proved to be unaffordable to the Government of the day.
Houses were in part affordable because of the efforts of the generations before, too.
I have two friends who bought their first house while both studying. Their student allowances were enough to pay the mortgage, the deposit was borrowed from their parents, and they were going to be able to maintain the mortgage on a single schoolteacher income after a year or three.
Any talk that it's all about "can do attitude" is simply fanciful and self-flattering.
Brock,
I wonder if you have told your grand parents and or parents that they are selfish, greedy and evil and as a results you wont be darkening their "older generation" doorstep again.
Surely you would not support or spend time with such persons? The very people that gave you life?
Have you kicked your parents and grand parent into touch for the their Mugabe like self interest?
Do you think they made the best of what was on the table at the time? And how should they divide up their largess to you right now?
Please come back to us how your conversation went with your "older generation" forebears and their reaction to being called selfish, greedy and evil.
Gerrit,
Sorry to burst your bubble, but as it so happens, yes.
Upon finding out that my parent insisted on voting for National yet again to "protect her house price", I told her to never again ask me for financial help and that she can watch her soon to be born grandchild grow up on Skype. Until something changes, that's the brutal reality of the situation.
I think it might have sunk in a bit. Here's hoping she figures it out by 2020.
Brock Landers
It is very sad, but why should I put my family into an extra three or four hundred grand of debt just to be closer to someone so greedy and unthinking? Being forced to buy into the 2017 Auckland rat race for "family" reasons is blackmail.
Buggered if I know why her house price even matters, she bought her low-spec two bedroom terrace shoebox for 1/3 of its current value and needs it to live in, but never misses an opportunity to crow about how much it's "worth".
We've had the talk plenty of times about National policy blowing house prices sky high and that's why we don't live in Auckland. Voting blue was still more important. Oh well.
If she is lucky this new Labour government sort the place out, but it's also time for us to start putting down our own roots and that will be overseas for now.
To me Brock's post, possibly indeed probably, indicates the level of anger among many of our younger generations. I am older than the boomers, so I associate with numbers of older persons and I have been disgusted with the complacent apathy rife among them. A son voted National, so I lectured him on why I thought it was such a poor choice. As an Aucklander, he was so busy working long six day working weeks he was not aware of the true state this country was in. One of the Doctors in our family recently stated he would not be able to afford a house in Auckland. Not that he would move there. All food for thought.
I have no desire to converse with you further as you appear to be displaying emotional, irrational behaviour and are unable to put forward any reasoned argument on the subject of your mother. I would gladly enter into conversations with you on other topics, however I think this subject for you is inherently fraught with difficulties.
Brock,
Did you vote for National 9 years ago? At that time, the gov in power at the time, Labour, was doing nothing and planning on doing nothing, about the rapidly escalating house prices.
I'll further note that Labour campaigned on providing "affordable housing", and explicitly excluded the idea of reducing existing house prices. In other words, the existing house prices are not scheduled to be reduced in Auckland under the new government. They are instead planning on providing much smaller housing, and will likely be primarily multi-dwelling in format in order to meet their affordable housing goals.
I was quite disgusted with Helen Clark's Labour's lack of action nine years ago.
I didn't vote for National, but was willing to give them the benefit of the doubt (even though it was already clear what a slippery dealer Key was).
I'm aware of what Labour campaigned on, but that's what they had to say to shut down any line of attack from National, and even so it's much better than the previous status quo.
To be honest, I don't really care about living in Auckland that much anymore. I do feel bad for my family and friends still trapped renting or flat-sharing well into their 30s. It seems like a hopeless situation for them.
Thanks for the response. I'd suggest that the primary issues reside outside of the central government and instead with the inept local council. There were many strong contributing factors, including the strong NZ economy (well, strong compared to most other economies around the world of late) that resulted in far fewer departing NZ citizens as well as increased immigrants, the NZ culture of housing being the only real store of wealth which resulted in everyone and their mum buying investment properties, the abnormally low interest rates post GFC, as well as the hands off National government.
In my view, placing the primary blame on any party is convenient but doesn't capture the multi-faceted causes. Blaming someone for casting a vote to any party misses the mark IMO. I'd place a far higher level of blame towards the people that voted for the Auckland council members and mayor during the last decade. They own the biggest causal factor, that being locking up the land that houses could have been built upon.
Until rent prices start rising in a manner commensurate with the house price gains, I remain unconvinced that there is a true housing shortage in Auckland. The multitude of property investors got onto the momo investment bandwagon about a decade ago, and the result hasn't been pretty. If there was sufficient development land supply allowed by the council a decade ago, this momentum investment paradigm would have been rather short lived.
Nothing smug about my bubble. Just asking the question and yes you have answered it.
In my opinion it reflects on you that because of her political beliefs you would deny her access to your children. Blackmail?
Unless she "comers to her senses" and sees herself as your tormentor, repents, begs your forgiveness and distributes her generational and ill gotten gains to you.
Question is will you tell your grandchild/children they cannot see their grandmother as she is an evil, greedy and selfish boomer?
Nice way to bring up kids. Make grandmother the evil witch. Must make your Christmas an exiting time for you and pure embarrassing for your children when bring a grandparent to school day occurs.
Oh well, I hope you and your spouse don't need help from parents in looking after babies. Something many families rely on especially when kids or their parents are ill.
Sounds like you've got the wrong end of the stick mate.
She can watch them grow up on Skype because I don't and won't live in Auckland. She is welcome to save her pennies and get on a plane.
Your nasty comments are not helpful, of course, we would prefer to be closer to family. It is just not a financially sensible thing to do at this time.
Brock, you are in Dreamsville if you really believe that all these houses are going to be built and made affordable by this Government.
We are going to have all these State box’s built in Auckland and is going to be an extremely desirable place to live in, yeah right!
The 600k affordable box’s are to be built for who?
The lower income people will need a deposit and then service a loan from a Bank. The Bank will only lend to people with clear credit etc. and many won’t have this!
It is going to be interesting times and you will see this inexperienced lot fall,on their sword as they are blurting out stuff that is unachievable!
The thing is that Auckland ISNT a terribly desirable place to live in. It's an extraordinarily overpriced, traffic congested rat hole that's becoming more and more like a generic part of Asia than a New Zealand city. That's why so many local born are leaving, life is too short.
House prices are driven by artificial land scarcity, mass immigration, bad tax policy, the bankers blowing credit bubbles and the terribly inefficient building industry in this country.
These things will be addressed in time. But by all means, go hard on buying more negatively geared property, I'll buy the popcorn.
One thing that gets forgotten in these analyses is that boomers created their increase in wealth, it didn't just fall into their lap. Maybe economic conditions were better for boomers. If they were, then it was most likely due to the size of their cohort and perhaps their greater entrepeneurship.
Getting bent out of shape about it is such a waste of time. Late boomers probably got it harder than millenials. The early 90s recession was deeper than the GFC in NZ, and unemployment was much more persistent in the 90s than it is now. Stop moaning and get on with it.
This is true, in a way.
One way that the wealth was created was by electing politicians who reversed NZ's long-held direction of fostering the supply of affordable housing via public-private partnerships, direct build, Housing Corp measures etc. Along with changing laws so that housing became the preferred investment vehicle while ensuring free money created by these investments would not be taxed.
This certainly took affordable housing created by previous generations and turned it into an investment vehicle that has delivered hundreds of thousands of dollars tax-free to many Boomers, albeit at the expense of following generations...but you can't make an omelette without cracking a few eggs.
This is why I advocate young Kiwis reversing course on this direction taken with housing. Make housing about affordable homes for Kiwis once more, and of course there's no reason to begrudge folks' other wealth.
(Of course, reducing benefits to younger generations so that taxes could be lowered also helped in accumulating wealth, along with measures to drive wages down.)
What annoys me about Labour is that they seem to have forgotten us Millennials. They seem to only care about:
* Giving away free education (in some cases for joke degrees) to the next generation at our expense
* Refugees from Manus Island - queue hoppers, exclusively male, many of them criminals
* KiwiBuild in collaboration with Fletchers? - For f- sake, just get in a foreign house builder and remove any red tape blocking them.
* Increasing the number of staff at the OIO instead of doing a proper foreign buyer ban.
I tentatively support Australia's attempts to control illegal migration. Nations must be able to control population inflows. I do wonder if the actions of current well meaning do gooders will be seriously regretted in future years. Indeed, it is surely time that highly populated Nations learn to control their birthrates. Will Germany regret its recent migrant influx? Will Europe? Will Jacinda Ardern become our Angela Merkel? Will bringing in ever more people from overpopulated nations/cultures create just another poor, overpopulated country?
Yes, yes and yes. Of course these people will not integrate. It's just another way of pushing dysgenics in our "nation". Labour are already doing so with tax credits and benefits for solo parents. I sincerely hope Jacinda doesn't become the next Merkel, Trudeau or Tony Blair. Day to day we have enough problems to deal with.
How is the well educated, conscientious millennial supposed to breed in this environment?
Save until you're both 30-35 for a house, by which time fertility is lower, Work work work both incomes, dump kids off at "early childhood education" or whatever nonsense they call it now, commute 1 hour to work in clogged infrastructure. And then there are all the risks, the economy is built as a house of cards. Demographics are becoming less and less friendly to people of European descent. It's not much of a life for you or your kids.
The boomers are the most selfish generation ever. They as a group have ruined everything the settlers and world war generations spent their sweat and blood working for.
Thanks to them there is no path to success through hard work. Nope, inheritance is where it's at, if you're lucky enough to get any after the parents remortgage the house to Heartland Bank and go travelling.
And every tax working group will suggest something along the lines of CGT / land tax coupled with lower income taxes to rebalance things, and every time those who benefited from affordable housing when they were young and unaffordable housing now they're old will shriek with outrage. And don't you dare suggest touching their pension! Any changes to the pension should be done a la National - wait till just after all the boomers are safely through. Taking money off workers to hand over to oldies is good an just, while land tax is an envy-driven theft!
Exactly. See if Labour really cared about the housing problem they'd scrap our rubbish building code and go to an insurance based model. Then they'd call up a few European housing manufacturers and offer them 10 years tax free to come here and supply the kiwibuild project. Then they'd slap a 1% land tax on all land. The boomers can get their superannuation, but most of it will be clawed back.
Instead we got silly CGT rules with weird cut-off dates and family home loopholes. The council idiots still have a job and the super age is still the same. Useless.
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