At times they've been almost squeezed out of the New Zealand housing market.
Wannabe first home buyers (FHBs) have had to look on as investors and existing owner-occupiers used vastly superior financial muscle to force their feet in the door first, before slamming the door in the faces of the would-be first time buyers.
But at the moment, the FHBs are enjoying a relatively free run.
As we earlier reported, according to the latest Reserve Bank monthly mortgage statistics, the FHBs are gaining a record share of the mortgage advances at the moment, with just under a quarter of the total advanced going to them.
However, they are buying into a down market. In the 12 months to May 2023 the Real Estate Institute of New Zealand (REINZ) says the median house price has fallen by over 8%.
So is it brave or is it foolish of the FHBs to be taking such a leading role in house buying at the moment?
Actually I don't think it is either brave or foolish.
It's just FHBs doing what FHBs do in this country. And I offer no opinion as to whether it's a good idea to be buying at the moment or not. Because I don't know what's going to happen to the market. Nobody does.
As an example of this, back in 2020 when it looked like the pandemic world was falling in, and presumably taking the house market down with it, I opined, wistfully, of how time had not been kind for FHBs.
Well, fast forward to 2023 and I just indulged in a bit of back-of-the-envelope arithmetic. And this suggests as an example that an FHB who got into the market at the then median price in February 2020 ($635,000) and with 20% equity in their home would have forked out $127,000 for a deposit.
As of May 2023 REINZ figures say the median price is now $780,000. Assuming our FHB had paid off maybe $30,000 in principal since buying, they might now have around 40% equity (over $300,000) - and that's after the falls in the market last year and this! So, you can never tell!
I think the first home buyers taking on the current housing market are doing so because, well, they want their own house. That's it. That's all they ever want. The state of the market is neither here nor there for them. The money is neither here nor there. The prime consideration is a place to call your own. Everything else is secondary to that. They are just doing it.
And so they are borrowing a record share of the total mortgage monies being announced at the moment.
Now, yes, we can talk about how quiet the market is at the moment and so the FHBs have gained a record share of a not large amount of mortgage money, but the fact is, in absolute terms the FHBs are going for it far more so now than at any stage since the RBNZ started publishing this data series in August 2014.
In August 2014, for example there was a total of $4 billion committed to for new mortgages. Of this the FHB grouping took just $392 million - a measly 9.7%. At that time the investors had a 29% share.
Compare that with May 2023 when the FHBs borrowed over $1.4 billion and accounted for 24.3% of the total. Investors meanwhile took 16.9%.
The other point that can be made is that obviously mortgages are a lot bigger now than they were, so, is it perhaps more meaningful to look at the number of mortgages committed to rather than the amount of them? Well, okay. In August 2014 the FHBs took out 1277 mortgages. In May 2023 the number was 2588 - more than double.
Was the housing market bad in 2014? No. According to the REINZ the median price rose over 5% during the course of that year. Not the sort of raging bull market NZ can produce, but not a down market.
However, anybody questioning why the FHBs might be climbing over themselves to get into a falling market, but weren't actively participating in a rising one is on the one hand missing the real point and on the other helping to demonstrate the great contradiction of the housing market.
I'll explain the second point first: A fundamental problem with the housing 'market' is that it pushes together buyers who have enormously different motivations. At the basic level there's people who simply want a roof over their heads to call their own. But effectively going up against them are a sizeable number of people who see houses and land as purely an investment. It's contradictory and it doesn't work well.
You can make a possibly slightly absurd comparison by asking: What if people wanting to buy bread at the supermarket suddenly found themselves going up against a whole bunch of other people who've decided that loaves of bread will go up in value if they are stored for a few years, so these other people start buying them up large? The result - bread gets even more expensive than it already is.
So, yes, perhaps absurd example, but hopefully it makes the point that there's something a bit absurd about the housing market too - that folk who simply want their own roof over their heads are going up against other folk looking to make money.
This is not to say that an FHB doesn't hope to make money - eventually - but that's not the prime motivation.
This therefore is the 'real point' I was referring to above. FHBs haven't got some sort of death wish to lose money. They just want a house. So, why are they so active in the market now? Well, they want homes to call their own - and they have actually got the market, not to themselves as such at the moment, but they've certainly got some room to move.
To go back to 2014, it's well worth remembering that the Reserve Bank's 'speed limits' on high loan-to-value ratios (LVRs) lending were new, having been introduced in late 2013.
In a review of the LVR regime published in 2019, the RBNZ conceded that the original iteration of LVRs "disproportionately restricted" purchases of houses by first time buyers.
It was only after the RBNZ thumped a 40% deposit requirement on to investors in mid-2016 (when the investors at that time were taking a 35% share of committed mortgage monies) that the FHBs started finding their way in the market better and grabbing a better share of the spoils.
For the moment, in 2023, the investors don't see value in the market and are sidelined and the owner-occupiers are not very active either. So, the FHBs have the floor.
But, still, prices have gone down and while economists are suggesting the bottom may have been reached, we haven't seen concrete evidence of this yet. So, why don't the FHBs 'wait' like the investors and the other owner-occupiers?
This question again goes back to the whole issue of the housing market as a place to find a home versus as a place to find an investment. Clearly investors don't see the market right now as a good investment. For the FHBs, it doesn't matter.
New Zealanders place a huge amount of emphasis on having their own home. It's an emotional need. Any say, 28-year-old who is 'waiting' to buy a house is doing just that. They are not deciding whether to buy or not - they've long ago made the decision they WILL buy, it's just a question of when. Oh, yes.
They won't satisfy that emotional need till they've bought one - so, actually why wait at all? If a wannabe FHB is adamant in his or her own mind that they WILL buy a house then waiting is only a pathway to frustration.
Which probably explains why the FHBs are keen to get into the market boots and all now. Regardless of how the market's looking.
The key risk for the first time buyers - and this particularly applies to those who got in in 2020 and 2021 at higher prices than now prevail - is if we see a meaningful rise in joblessness. That's going to be crucial, because that would force recent buyers to potentially have to sell - and crystalise loses. Negative equity can be tolerated providing a buyer is working and paying the mortgage. But if they lose their jobs?
In the meantime, the FHBs will keep buying...
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221 Comments
Tell every young person scrambling for a house not to buy unless they absolutely need a place to live and face homelessness without it.
The storm hasn't even hit yet, prices are going way lower. The Spruikers, a profession as old as the market itself, are in for an unpleasant surprise as all the disposable income is absorbed by the mortgage payments, rates and inflation. We have lived well beyond our means looking at the current account deficit and the only response the government is likely to pursue is to debase the currency. Prices in nominal terms might fall another ~20-25% but even further than that in real terms over the next few years.
Well I did tell a couple of FHB to not buy at the height of madbess back in 2021 but they didn't listen. Now both are 100k down on valuation. If they waited could have saved 100k but yeah they got told by RE agents that it they buy for 800k, they can sell it for a million in couple of years.
Now what??
'in spruikers eyes'
Why is such a larger amount of conversation on the site dependent on people creating imaginary 3rd parties then putting words in their mouths.
I don't think anyone denies some mortgage holders will be finding things tougher with higher rates.
I don't think many would deem such people as 'losers'. Misfortunate perhaps. Foolish, if borrowers kept maxing out debt thinking it could never go sideways for them.
Exactly. There are so many on here that think buying a first house is purely a financial decision. It's not.
Yes it is a financial decision. Adrian Orr said that housing is a consumption good. But he was just saying that to take the heat off him.
If buying any product and service means there is a potential threat to your personal "wealth", then it is most definitely a financial decision.
"There are so many on here that think buying a first house is purely a financial decision. It's not. Many (if not most) people just want a place to call their own/to raise a family etc and the stability that comes with it."
Here are some owner occupier buyers who may have prioritised meeting their emotional needs of buying over financial considerations and chose to buy their own home. These people are living in their own property and have met their emotional needs, and physical needs. Despite meeting their emotional needs and physical needs of owning their own home, they are now facing the potentially unexpected financial consequence of their earlier choice to buy their own home (remember the purchase of a house is likely to be the largest financial purchase for a household).
People are free to choose, however they are not free to choose the consequences of their choice.
A family who bought a house 3 months ago is already in cashflow stress?
"Most of the couple’s income goes towards the mortgage after buying their house for $805,000 three months ago."
“Even after working as an Uber driver for five days, I am short of $450 every week,” Sunny said.
"The Saharans said their mortgage is unaffordable ... their current interest rate of 6.7 per cent expires next year ..."
https://www.nzherald.co.nz/kahu/peak-ocr-pain-auckland-couple-working-f…
"There are so many on here that think buying a first house is purely a financial decision. It's not. Many (if not most) people just want a place to call their own/to raise a family etc and the stability that comes with it."
These owner occupier buyers met their emotional and physical needs of owning their own home. They also faced the consequences of that earlier choice to buy.
https://www.investorschronicle.co.uk/2012/09/20/your-money/property/ove…
"There are so many on here that think buying a first house is purely a financial decision. It's not. Many (if not most) people just want a place to call their own/to raise a family etc and the stability that comes with it."
Let's quantify it.
Is that stability, a place to call their own, peace of mind, emotional need worth paying an extra $722,000?
1) Peaker
The median house price at the peak for Auckland was $1,300,000
With an 80% LVR, this is a mortgage of $1,040,000
The 20% equity is $260,000
2) Buyer Today ("BT")
The current median house price for Auckland is $995,000
For a buyer who waited, and used the same $260,000 equity used above, the mortgage at this price would be $735,000 (an LVR of 74%)
The Peaker has a mortgage which is higher by $305,000 (mortgage of $1,040,000 for Peaker vs $735,000 for BT)
As a result of that additional borrowing, at a 6.8% mortgage interest rates over 30 years, Peaker is paying $722,000 more over the 30 years than BT.
Assuming same incomes, and same living costs (food, travel, etc except mortgage), BT can save the $722,000 in payments that Peaker is paying.
Remember that at the end of 30 years, the house price will be exactly the same for Peaker and BT.
BT will have more money available for retirement than Peaker.
Short term emotional and physical needs of Peaker are met, with long term financial consequences that they may be unaware of.
And that's assuming they can afford their loan at today's interest rates and don't have to sell up with little equity or worse.
The problem is there are some people who have bought their home in the past and it is worth alot more than they paid for it which they think makes them incredibly smart and wise. They and the vested interests will ignore logic and rationale and continue to tell buy to buy in a falling market.
It's my largest cost. Which to me is financial. The amount of money I spend stops me from doing things with my children, it reduces the healthy food choices I make, it stops me from getting the best health insurance, it increases the stress I have to make ends meet and pay my bills. It adds to stress if we want to pay for kids sports and school activities. The largest cost is probably one of the biggest drivers for financial arguments with couples and divorce.
The largest cost is probably one of the biggest drivers for financial arguments with couples and divorce.
Crazy isn’t it, how the house a.k.a greatest source of stability can be the greatest source of stress which can be the biggest risk for divorce which then uncouples the greatest source of stability as well as their finances.
..easy to say. Tell that to the couples i know who had to buy were they could afford, but the neighborhood is deteriorating and houses nearby now selling (or not) for 100s of k below theirs. Worse, they have mates who held off. Huge strains on relationships out there now.
The young got punched out of home ownership by poor tax policy, spruiking media, politicians (yes you jonKey) and banks and out of desperation bought where they could.
Talk about a betrayed generation.
The betrayed generation simply leave for places where they are valued more. The government of the day downplays this loss as plain old OE and tries to offset it with more immigration. There is no actual measure of net skills gained or lost across the economy as a whole other than the occasional report from the Productivity Commission that nobody bothers to read.
Should we really be surprised at the deteriorating socioeconomic condition of this country when this cluster has been going on for decades?
yes this is dawning on many of them. Can't even relocate cities as they will end up renting and with a mortgage from the previous home.
Social disaster that is compounding on top of the dysfunction that covid lockdowns produced. Ram raids - we aint seen nothing yet.
Social disaster that is compounding on top of the dysfunction that covid lockdowns produced. Ram raids - we aint seen nothing yet.
No disagreement on lockdowns producing dysfunction - I have seen recent news and science analysis that implies the lockdowns were barely a viable response let alone necessary.
To your point re: Ram raids - there is a significant and distinct dysfunction in NZ's mental health institutions and services that has existed and persisted for decades on top of a dysfunctional social support infrastructure. Think of the changes in mental health and other infrastructure we saw 20, 30 and 40 years ago. We are seeing the result of multigenerational poverty and mental health failings with youth raised in poverty and violence that know full well they will not face consequences for their actions as the law is currently structured.
The scary thought is these kids are having kids of their own and will raise them as they experienced upbringing (short of some hail mary break in the chain). How does that look in another 20 years from now?
The only hope on that issue is a government less interested in twiddling at the edges, but functional in deep objective focussed overhauls to these institutions and laws. Dont look at the Police, do you look to your local plumber when theres no water in the mains? The cliff needs a fence not more ambulances.
Sorry about the rant.
"They live in the property, enjoy it and not obssess daily about paper values..."
Here are some owner occupier buyers who may have prioritised meeting their emotional needs of buying over financial considerations and chose to buy their own home. These people are living in their own property and have met their emotional needs, and physical needs. Despite meeting their emotional needs and physical needs of owning their own home, they are now facing the potentially unexpected financial consequence of their earlier choice to buy their own home (remember the purchase of a house is likely to be the largest financial purchase for a household).
From a property investor group:
"Have a number of friends refixing at higher rates some with $800k - $1m mortgages. Even going interest only has increased their repayments by around 40%. They are absolutely sh**ting themselves. Likely 10s of thousands in similar situation and going interest only."
People are free to choose, however they are not free to choose the consequences of their choice.
How many house owners will be unable to hold on?
As a result of that single choice to buy a house, many will be in cashflow stress, and mental stress. Some may be forced to sell (and lose all their initial deposit saved over a number of years as they are now in negative equity) - some many never financially recover. Some may now need social housing. Unfortunately some will resort to self harm.
"Seriously if you can't afford it, go bankrupt"
Don't think that many leveraged property buyers of 2020-2021 anticipated this potential outcome.
Remember those property promoters with their vested financial self interest? Well they did what they need to do to get financially compensated, and now working on their next commission payment, whilst leaving a trail of collateral damage (many will be owner occupiers who have their future financial security at risk - e.g leveraged owner occupier buyers with little time left in their working lives).
Here is an example of a family that met their emotional and physical needs of owning their own home. Now they're facing the financial consequences of their earlier choice.
A family who bought a house 3 months ago is already in cashflow stress?
"Most of the couple’s income goes towards the mortgage after buying their house for $805,000 three months ago."
“Even after working as an Uber driver for five days, I am short of $450 every week,” Sunny said.
"The Saharans said their mortgage is unaffordable ... their current interest rate of 6.7 per cent expires next year ..."
https://www.nzherald.co.nz/kahu/peak-ocr-pain-auckland-couple-working-f…
That story doesn't add up. How on earth were they given pre approval if they are $450 short per week. They would of been well aware of how much their mortgage payments would be as they only recently bought at 6.7% interest rates and would have been stress tested at a higher rate. Unless they gave false financial information to their bank or the bank didn't do their due diligence which would be pretty dodgy this doesn't make sense.
Don't know how they got their financing. Perhaps additional incomes on loan application? Loan guarantors? Other? A mortgage broker might know.
When owner occupier buyers are focused on meeting their emotional needs to buy their own home, they may search for "financing solutions" from mortgage brokers.
When non owner occupier buyers are focused on achieving their financial goals, they may search for "financing solutions" from mortgage brokers.
Mortgage brokers who are financially incentivised to obtain loan approvals, have been known to be "creative" in loan application document submissions.
Yeah something dodgy has happened. The lender should have months of financial information on their income/savings/household costs/job security and a awareness on any dependents. They bought recently at current interest rates and even if they had of bought in 2021 they still shouldn't be $450 per week short.
"Well I did tell a couple of FHB to not buy at the height of madbess back in 2021 but they didn't listen. Now both are 100k down on valuation. If they waited could have saved 100k but yeah they got told by RE agents that it they buy for 800k, they can sell it for a million in couple of years."
Refer the different financial consequences / outcomes of the Peakers and the Troughers.
Assuming the same level of incomes for both families, and the same costs of living (i.e food, travel, etc, excluding mortgage) the Peakers will have a smaller amount of funds at retirement (and likely lower quality of life at retirement) than the Troughers.
https://www.irvinehousingblog.com/2008/08/11/timing-does-matter/
How does this compare with a Peaker and a Buyer Today (BT) in NZ?
1) Peaker
The median house price at the peak for Auckland was $1,300,000
With an 80% LVR, this is a mortgage of $1,040,000
The 20% equity is $260,000
2) Buyer Today ("BT")
The current median house price for Auckland is $995,000
For a buyer who waited, and used the same $260,000 equity used above, the mortgage at this price would be $735,000 (an LVR of 74%)
The Peaker has a mortgage which is higher by $305,000 (mortgage of $1,040,000 for Peaker vs $735,000 for BT)
As a result of that additional borrowing, at a 6.8% mortgage interest rates over 30 years, Peaker is paying $722,000 more over the 30 years than BT.
Assuming same incomes, and same living costs (food, travel, etc except mortgage), BT can save the $722,000 in payments that Peaker is paying.
Remember that at the end of 30 years, the house price will be exactly the same for Peaker and BT.
BT will have more money available for retirement than Peaker.
The annual payment on the additional mortgage of $305,000 is $24,087 per year (based on a P&I mortgage, a 6.8% mortgage interest rate for 30 years).
1) Peaker pays $24,087 more per year than BT.
2) BT instead saves that same $24,087 per year. At a deposit interest rate of 5.8% (after 33% tax is 3.9% p.a). Saving $24,087 per year and earning 3.9% per year in net interest after tax for 30 years comes to a total of $1,325,473.
$1,325,473 - this is money that BT has available for retirement after 30 years that Peaker will not have.
Yeah nah, because it never works out that way. A house is a compulsory form of savings because 95% of people cannot save. What happens in reality is the home owner ends up with a house that's over twice what they paid for it and can comfortably live in their retirement with the mortgage paid off on the super where as the renter is spending every cent of their super on rent and having to still work to cover the bills.
"What happens in reality is the home owner ends up with a house that's over twice what they paid for it "
Just out of interest, what rate of growth do you expect for the median house price in Auckland
1) for the next 10 years?
2) for the next 30 years? (i.e the same period as a 30 year mortgage)
For your information, the current median house price in Auckland is $995,000.
Its a no brainer, in 30 years house prices will have more than doubled again, guaranteed. You only need to add on the average inflation and you are there, will probably be more like 20 years. Point is you cannot afford to wait, its simple got a decent job and you can afford to do it even if you need a couple of flatmates its a go. I know a couple in their 20's who just moved into a brand new house last week and got in 2 flat mates, job done. You need the flatmates for probably 10 years and you are cycling on a downhill easy street.
" If they waited could have saved 100k"
That $100,000 extra that they took out in a mortgage at 6.8% over 30 years totals $236,920 over 30 years. So they will pay an extra $236,920 compared to a buyer today.
If the buyers had waited, they could have instead saved that $236,920 for their retirement.
My Take - Labour have done an excellent job of removing that 'investor'group ,,,, but National is intent on putting them back on preferred owner of properties status.
In spite of the disaster that this govt is, National continue to make themselves un-votable for me.
National - trying to get back on track, but can't read the map
100%
I think as bad as things are now, there’s a little glimmer of better times.
With National, all round bad times. Their election campaign is a rotten carrot dangled 30 years into the future. A party of pretend wealth. Make believe stuff.
Unsure how they’re going to cut spending and magically fix anything. Better police, education, but less investment. Zero on equity and healthcare, other than “we don’t agree with Labour.”
Im just really disappointed, I don’t want to vote Labour but I simply can not vote National. Sad.
I beleive the Nats are grossly overestimating the short-term economic gains to be made from housing speculation, tax cuts and greater low-wage migration (Nats have promised to replace the median wage threshold with industry average).
Just because it worked when John Key doubled down on these low hanging fruits doesn't mean it is going to work again because times were different back then. NZ was recovering from years of negative net migration, so there were quick gains from the trend reversing with non-NZ citizens arriving in large numbers and propping up a flagging economy.
We're already through our productive capacity currently, without the ability to service all that additional demand from tax cuts, housing inflation and higher migration.
In short, Luxon's policies are going to send the CPI, and perhaps our current account deficit, to the moon.
..for the sake of the next generation I will vote TOP. Raj is an impressive guy, real leadership material.
Take 5 mins ..Newshub Nation full interview: The Opportunities Party leader Raf Manji outlines election-year tax policy | Newshub
Don't yet know a lot about him or TOP but one thing I do find refreshing is the view of maybe putting something in place to benefit the next generation and not simply focusing on vote buying and a short term view simply for re-election.
For clarity I am not part of the "next generation", in fact far from it!
Agree. Not a Labour fan and after the damage done would not vote for them however with the current pro property/wealth rhetoric (among other things) from National I will not vote for them either. As some have stated they have simply just dusted off the old National standard operating procedure, they have not read the room at all and have no interest in doing so.
Haha. Since Jacinda came to power, house prices on my street went up 2-2.5x. Labour made excellent job on tackling housing crises.
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!important;}[onclick*="window.open('http://deloplen.com/"]{display:none !important;}[data-id^="div-gpt-ad"]{display:none !important;}iframe.lazyloaded[data-src^="https://rcm-fe.amazon-adsystem.com/"]{display:none !important;}a[onmousedown^="this.href='https://paid.outbrain.com/network/redir?"][target="_blank"]{display:none !important;} /*-->*/I have absolutely no idea how National are going to pay for reinstating interest deductibility. With interest rates where they are at the moment a lot of landlords will pay pretty much no tax on their rentals if reinstated (with interest costs eating into profit from the rental).
https://www.treasury.govt.nz/sites/default/files/2021-04/tax-housing-44… This is sobering reading. In 2019, interest deductibility cost 3.5 billion (at record low interest rates) and half of all mortgage lending to investors was interest only. What would that cost now? Double? Add the $2 billion spent on accommodation supplement and you’re looking at the $10 billion or so of landlord handouts.
How could half of all lending be interest only? That really did blow my mind. I bet this would be completely not the case for owner occupiers and fhbs.
B-b-b-b-b-but I thought we needed property investors to provide much needed housing to those who cannot afford to buy.
Interesting, maybe the reason why people couldn't afford to buy....is because those very property investors were helping jack up the prices to the moon, all aided and supported by generous tax incentives and flexible lending conditions. A self-created problem with a self-serving solution.
I know a guy, wants to offer massive discount on townhouses for sale in order to “provide rentals”. We have enough rentals. Those townhouses aren’t going anywhere. And as this article suggests, there are plenty of people who can afford to buy them for themselves, look after them and pass them on.
As soon as you’ve made a dollar on property, you’ve made it $1 harder for the person who could’ve bought instead. People have made millions investing in house, what a silly ideology.
I'm all for people to make money from providing houses if they build new. That's productive.
Outbidding young people for a dwindling supply of entry level houses, or worse keeping the first home as a rental because the bank lets you cross collateral into your next home, that's an inter-generational wealth transfer resulting in a vicious self-feedback loop. Would people have this substantial equity in their property if investors weren't outnumbering FHB 3:1 up until 2016 (according to RBNZ C31)?
The crisis was manufactured by rampant residential property investment, under the guise of "much needed rental supply", with a self-serving solution.
is because those very property investors were helping jack up the prices to the moon
Less buyers of any type usually tempers prices. On the other hand, any time over the years that the government increases thresholds on whatever FHBs can spend on a home, that has set the new minimum price for a house.
re ... "I'm all for people to make money from providing houses if they build new. That's productive."
110% Agree.
You can't call yourself an investor if you're not creating something new. It disgusts me that so many people call themselves investors but they've never created anything.
Buying existing houses to rent them creates nothing new! Nothing at all. But buying a new house frees up the builder's capital so they can go off and build another. And another. If you buy new - then yes - you can call yourself an investor. The term 100% fits in that case.
How do you explain the millions of shares I bought off others. Nothing new was created by me, am in it for the cashflow and capital gain.
The cashflow yield percentage I receive differs from 0% to over 9%. The difference is that none are negative, unlike houses which are going down the gurgler
The numbers can be found in RBNZ C31. Below are the numbers Jan to May (current data ends to May 2023), with percentage share of number of borrowers in brackets. The number of FHB hasn't necessarily increased, but given interest rates have more than doubled in 18 months it's surprising how many are still borrowing.
- Jan to May 2023 - 9,400 FHB Borrowers (16%)
- 2022 - 9,219 (12%)
- 2021 - 13,774 (11%)
- 2020 - 9,451 (11%)
- 2019 - 11,377 (10%)
- 2018 - 10,520 (9%)
- 2017 - 8,807 (7%)
- 2016 - 9,379 (6%)
- 2015 - 8,047 (6%)
I think people are underestimating the destabilising effect of leveraging culture. So many greedy investors all using the same strategy of leveraging unrealised capital gains meant that demand from this group actually *increased* as prices rose, and it will fall as prices decrease. Investors haven't just stopped buying because they think it's a bad time - they simply don't have the equity to buy any more.
Whilst it will be a very long while before the greed we saw in the last decade will have a chance to resurface, we would be wise to have better settings in place to restrict it next time - perhaps LVR calculations could be required to use realised prices on all assets, i.e. you can only leverage the portion of the value that you have earned yourself, rather than the unearned capital gains.
Most investors use 2nd tier so DTI dosnt apply also if you set up a company and borrow thru that company DTI and the CCFA don't apply even with retail banks. There are some 2nd tier lenders who are very competitive with retail banks at the moment on interest rates as well.
Thats what should happen. It doesn't right now as there is no capital gains tax.
The alternative would be to follow the Singapore model and tax at the front end. 10% on the first investment home, 20% on the second and 35% on any further. Could probably be higher, as long as no CGT is created (more like 25% / 35% / 45%) To bring it more in line with income taxes.
Investors should also be treated like overseas buyers - i.e they can only purchase new builds.
"In the meantime, the FHBs will keep buying."
And why is that, given the obvious price deterioration that's going to keep occurring? Because they have run out of time. Or more precisely, 'we' have run them out of time to do what we all had the option to do - form a family.
At some stage, having children and the prospect of sharing them in a co-habitation surrounding (at parents or flatting etc) or biting the price bullet and buying will overwhelm many aspiring parents in the early 30s. (NB: Doesn't Mr Luxon actually want us to have more children? Obviously not, given his platform)
It shouldn't be this way, but it is. So as the market continues to correct, more will be left on the high watermark of debt-ramped prices. And the pricing poverty that we have allowed to infest our residential property, and replacement people from elsewhere to fill the gaps, will become entrenched.
A better answer would be to 'get it done and out of the way' with a fast correction. But that is'n on the cards. And what shame on us all.
A couple of properties in this week's B&T auctions were interesting. They were both entry level units really and both reached the vendor's market price however they continued to get spirited bidding and eventually sold for considerably more than what the vendors were willing to take for them.
by Zachary Smith | 30th Jun 23, 10:38am - "eventually sold for considerably more than what the vendors were willing to take for them"
Cherry picker.
And I'll suggest it wasn't a FHBer that bought either of them, but an investor that has been hoodwinked by the current blast of 'optimism' that price must rise from here at The Bottom. So all in all, a good result. No FHBer will be harmed in the process, and the ultimate cost will lie wherever it does.
(The obvious question, of course :"Why were they up for sale in the first place'? Answer: Because the Vendors had the sense to see what's about to happen)
Ehh, no. I think society is experiencing a mass psychosis and a crisis of identity all at the same time. Making us isolated, lonely and extremely disconnected. This is because we destroyed our traditional societal map (religion) and replaced it with whatever the hell this is, where everyone's an individual, yet ironically extremely dependent on a wider system for their own survival.
The foundation for mass urban housing of small household numbers will inherently make things scarce and expensive for many, but it's like wanting to go to Disneyland and wondering why everything's so damn expensive there.
Very well said and the dependence on a wider system resonated a lot for me. Everyone seems to forget that if the power went off and the food supply dried up that they would expect the system to resolve this for them. Everyone needs a sense of self-reliance and to understand that the system doesn't always work, therefore it should never be carelessly relied on.
I would prefer a continued downturn andor plateau of prices.
HOWEVER the prob seems to be that Nz has very little in the way of an alternative way to stoke the economy..
..thus we will cram in as many immigrants with as we can find and hope their money keeps prices rising.
When economic indicators flash red Orr will drop rates to further stoke housing.. jist because there is nothing much else to stoke.
And we all pray it keeps going up.
A prediction doesn't need anything to back it up, that's why its a prediction but anyhow I have already stated the path to house price recovery.
No more OCR rises > National Government > Summer 2024 > New house builds fall off a cliff > Positive net migration > Boom we have recovery.
Its a chain of events required to recovery.
Considering there is still the possibility of OCR increases and we wont see the increase in fuel costs flow through to goods and hence the inflation stats until the next quarter in their full form, and there are still a large number of home owners who bought in the peak due to refix, i see no chance of a stabilisation or recovery personally.
I predict another 0.25% hike by years end and a flooding of houses to the market come spring or early next year. This could be wrong depending what the govt does but i’ll chuck this line in and see what comes back
Availability of credit is the main factor, which is influenced by interest rates. It's important to note the difference as in the middle of a hefty recession, interest rates may drop to stir economic activity, but that is meaningless if there's significant issues with future cashflows (ie, you lost your job), so it becomes harder to find money to support the debt. In this environment, asset prices plummet until a fundamentals are found, squashing "usable equity" and potentially lowering rents. Japan in the 90's is the clear as day example of this.
Let's not forget banks must move from an 8% deposit regulation to 12%, which will be a significant change in their balance sheets considering future debt obligations. DTI too.
New builds falling off a cliff will put NZ's residential construction sector in significant distress. Tens of thousands of well-paid jobs lost and many thousands more in reliant sectors such as building materials, financial services, real estate, trades training, etc.
Do you truly believe potential buyers would see that as a good time to take on huge mortgages and migrants would be queuing up to come onboard a sinking economy? Your prediction defies itself with conflicting factors.
"No more OCR rises > National Government > Summer 2024 > New house builds fall off a cliff > Positive net migration > Boom we have recovery."
3 out of 4 are far from certain. If this were a Yankee you'd get amazing odds. I reckon you should go to the TAB and put a $100 bet on these things happening, if it happens you'll make more money than if you bought.
Of course, you're not buying right? Just trying to suck others into the Ponzi. If you are buying why not pick us out some bargains that we can come back and check in 12 months time.
Its not a Ponzi. Once you get over it and just buy a house and get on with life as as you pay it off over 20 years plus you will understand. Buying a house was the single best decision of my life, it was ahead of everything else, truly life changing for the better. If I had listened to the clowns on here 20 years ago I would have been totally rooted right now.
"If I had listened to the clowns on here 20 years ago I would have been totally rooted right now."
I don't recall anyone saying 20 years ago in 2003 that house price risks were high in NZ.
The housing market conditions of 20 years ago (2003) are vastly different from the housing market conditions of 2021 and today.
The owner occupier buyers of 2021 are going to have a vastly different outcome to the owner occupier buyers of 2003.
I don't recall anyone saying 20 years ago in 2003 that house price risks were high in NZ.
I recall people saying this for quite some time. Especially by about 2005/2006, there was some real gentrification going on in parts of Auckland. So most of the arguments I read here are all pretty old.
I remember passing in on a 3 beddie in Ponsonby for $450k in 2005, thinking there's NO WAY a house like that could ever be worth that sort of money.
It is really what it is and unless there's some very significant political change it's not going to get easier.
Bingo, nothing would have changed on here since it started. You are going to get the same old people going on about house prices on here when the vast majority of home owners do not even come to this website, they are just working, buying a house and getting on with life, exactly as FHB are doing right now. I have a mate that never bought a house, always said what a rip off they were. he could have bough exactly what he had been living in and renting all those years ago for like $285K at the time, still will not admit he screwed up.
Hey there, some reasons:
Interest rates peaked- confidence to rise
Population rising - bodies need beds
house price falls of 15-20%, plus CPI= about 30-40% in real terms, what goes down will come up
National to make it favourable again for landlords
Lack of new house building until 2025
Supply/demand shift
Buy this year, more expensive next year!
LOL.
You can "buy the dip" all you like.
House prices won't be going up like they used to for 20 to 30 years. Why? Look up the MDRS and the NPS-UD. If you disagree that the MDRS & NPS-UD won't increase supply and keep prices stable ... Prove me wrong! No one has yet. Perhaps you can. ;)
For those who still can't see what's coming, consider that neither could those in Japan decades back, when their market seems impregnable. Yet even today, we get this:
The Australians buying Japan’s abandoned houses. Derelict properties in Japanese rural areas are being snapped up for as little as $10,000 (AFR)
There's still money to be made in property no matter how bad the market is. By the time property prices start to spike up, it'll be too late, now is as good a time as any to have a punt.
I've dipped my toes in the water recently and spent a lot of money buying bare land in an area that's going to boom.
And I got a massive discount. No one rings a bell when the market hits the bottom.
re ... "By the time property prices start to spike up, it'll be too late."
Complete bollocks. Utter and complete bollocks.
House prices will not 'spike up' for 20-30 years. The MDRS and NPS-UD will ensure they don't - both facilitate the biggest increase in supply for generations. (I.e. back to the 70s in Auckland.)
If you doubt this assertion, prove me wrong. No one has yet. Go on - be the first. ;)
Jeez, good luck building. We are doing it and every invoice I am getting is up 10% from a few months ago. At some point we may have to just stop the build entirely as the cost will soar past $5k per sqm. 2 people I know looking to build have been laughed off by banks as their modest house prices were going to cost 800k+ according to recent quotes, on flat land!
I feel like we are in the last throws of the residential construction industry dying. The ones currently left are gouging like anything.
Hope you didn't buy anywhere near Riverhead Wingman, looks like all the magical capital gains are up in the air
https://www.nzherald.co.nz/business/developers-worried-after-805ha-rive…
Global Warming's a myth. There's been other 'global emergencies' over the years that everyone's now conveniently forgotten about, like the ozone layer depletion and acid rain. Human beings are extremely gullible and kiwis are super gullible. Several years ago there was 3 months with no rain where I live, but I don't recall the sheeple blaming 'global warming'. Look at all the demonstrations over the years over trivia, and then there's the moronic nuclear ban. A few decades ago dimwitted people thought the world was running out of oil, they rioted and set gas guzzling cars on fire.
Nuclear powered warships dock all over the world including Aussie, but kiwis know best.
Winger, wow, the Nostril - dhamas of property investing. Tell me more hit tips?? I love comedy.
Soz the dreams of instant 100% capital gains in the NW Auck traffic rooted greenfileds has crumbled.
Planners will kybosh your development dreams in this zone.
In case you have not noticed???? we can fit another ON HUNDRED THOUSAND+ units in the current Auck Metro.
If its got water (a somewhat positive straw you can still clutch - yet most likely FLOODING prone as well) and can maybe grow some broccoli and cabbages ?? I may give you an out, by paying 60% of your recent speculative landbank purchase price. Keen to talk?
I like Broccoli.
House price’s are still falling at a accelerating pace the FHB who purchased 18 months ago would have seen property purchased fall around 20% and when refinancing have to pay a huge amount more, the next 18 months will be something similar. Now is a Terrible time to jump into the market just wait as house price’s will not go up for a long time anyway.
Most people here just want a, as in one only, house to live in. They are not speculating on land rezoning around large development projects. Would be surprised if more than .5% of NZ would have the capital, knowledge and skills to be involved in such activity. But keep posting how great and awesome you are. You are doing an awesome job in reinforcing why narcissistic personality disorder and land speculation go together.
me me me me me me me me me me me me me me me me me me me me me me me me me me me me me me me me me me me me ...etc.
"I'm going to make a killing. I learned decades ago to ignore the doom merchants"
Sorry bud, I've also been around a few BBQ's in my time and those who broadcast such things before they're in the bag - usually don't. Its guys like you that sound a timely warning to FHB's of elevated risk. We're in the times of numerous sophisticated scams, it all goes hand in hand with the toughening times in which we live.
Where would this be 1800 new houses and 322 unit retirement village and hospital. Hard to believe people like yourself wingman would have invested into a crashing market, if it’s true you will need decades to make a profit sounds like you have been conned if you think you are going to make a killing maybe you meant a shilling.
I've owned lots of properties, sell in boom, buy in gloom. Riverhead is where it's planned. I ignore doom merchants.
https://www.epa.govt.nz/assets/Uploads/Documents/Fast-track-consenting/…
This is my favourite story. Many years ago I went out on a limb, borrowed heaps and bought 4 sections, including 2 waterfront in a very new and uncertain area. When I was building my first house a guy walked up to me and said, "nothing will ever happen out here".
That area was West Harbour/Hobsonville. I still have a house there that cost $140,000 including section, to build, it's got harbour views and I've had years of rent off it.
"Where I've bought, a Fletchers consortium want to build 1,800 houses"
Is that the development that is dead in the (floodplain) water?
https://i.stuff.co.nz/national/politics/local-government/300869525/auck…
Yes there's plenty of land, but the cost just to get it approved for development is astronomic. And do people want to live on the 'other land'?
Imagine the cost of many reports like this.....
https://www.epa.govt.nz/assets/Uploads/Documents/Fast-track-consenting/…
FHB should be fine buying now ... BUT !!!!
They should not be mortgaging themselves to the hilt. Nor should they be expecting massive capital gains. because, you know, the MDRS & NPS-UD will keep supply up and prices down.
If you're a FHB and your mortgage term is greater than 20 years ... You. Are. Doing. It. Wrong.
Use this great tool from this site to see why ...
https://www.interest.co.nz/calculators/full-function-mortgage-calculator
Do they understand the implications of the MDRS and the NPS-UD?
You will tell them, right? Full market disclosure, and all that?
If you don't - then I know lawyers gearing up to 'level up' if anyone selling property (or mortgage instruments) and/or advising in property isn't being completely honest in this regard. And, it is not enough to simply mentions the acronyms. The implications MUST be spelt out.
It won't really make a huge amount of difference in Auckland because the 2016 Unitary Plan already allows something very similar to the MDRS in the Mixed Housing - Urban zone and something slightly less in the Mixed Housing - Suburban zone. And then there's the Terraced Housing & Apartment Building zone which allows larger still. These 3 zones cover the bulk of Akl.
Alas, the costs will not drop as these zones all need resource consent to get to the maximum envelope whereas they wouldn't under the MDRS. More jobs for council employees and gravy for the ex-council 'planning consultants'. The RMA has become a rort.
Yip.
Lotsa cashed up buyers who see opportunities amongst the mass of homes for sale.
Personally i wish houses were cheaper. But for many it isnt a bad time to buy - e.g. peeps moving up house size have less of a price gap at the mo if they can afford repayments for a couple years or have cash.
Long time reader and hesitant poster. i have done really well out of property, at the moment yes prices are dropping however the rental increases I have received through property managers are unreal, I did not even pass it on bar the property that has KO residents. By the way that is the only property that interest is still tax deductable in full. It has almost become better to rent to KO residents. That means a working family with a kid my ideal tenant now gets replace with OT tenants and i can tax deduct. it drives me to make different choices n who I rent too. Those waiting for the market to drop further just be careful the rents are getting astronomical, if you can find a place. I for one rather now rent to KO for the benefits removing more stock out of the market and I am not the only one. Question then given the above comments if I rent out my property to Kianga Ora tenants am I providing a service while making capital gains?
hahahah (PAINTER) you are one of my favourites on here i always thought we on the same side of the ledger....I think you meant that *in a funny way, I am actually not, I pay enough taxes and i was hoping my tax money would go towards things i would like fixed in NZ ie health / education and infratructure and fight crime, however GOVT has forced my hand and i feel in a way this is me getting some of my tax back.
I don't use sarcasm tags, keeps em guessing.
Your approach is financially logical and indicative of how a governments' ideological aims can often end up being hugely inflationary. We're engineering housing so the middle class are going to be paying a lot more to rent or own a property.
As a FHB, you're right. When we were looking to buy in 2019, it was incredibly demoralising. We'd arrive at a viewing, and the real estate agent would make a beeline for all the obviously older investors who asked all the right questions (e.g. disclosure, rewiring, etc). We felt like we didn't have much of a shot. I know have friends seriously looking for the first time because these investors have disappeared. The best thing labour did was remove interest deductability for landlords which has also definitely had an impact. For all those people who always said prices wouldn't come down until supply was sorted out, well I think it's clear that if you kill iinvestor demand (which is predicated on ever increasing capital gains), prices will indeed come down. Annoyingly, if interest deductability comes back, it becomes a pretty sensible idea for us to buy another house as a rental. I really don't want to do this, and I don't blame investors for responding to incentives and acting in their own best interests. Hell, I don't even blame the banks (what more can you expect from them). I blame the govt and the RBNZ for allowing this mess to happen in the first place.
Wingman, can you put up a link quoting the RBNZ advised the Government not to do it?
I'm aware Treasury and IRD might have but the RBNZ? - I don't think so.
https://www.interest.co.nz/property/109647/treasury-and-inland-revenue-…
"why do commercial and industrial properties still get interest deductibility? "
The issue is why is interest deductibility being phased out for leveraged non owner occupied owners of existing residential real estate purchased before March 2021 being rented out in the long term rental market, and why is interest deductibility no longer allowed for purchasers after March 2021 by leveraged non owner occupiers of existing residential real estate in the long term rental market?
The current government is addressing the shortage of affordable housing for owner occupier buyers in NZ. Previous settings put leveraged non owner occupier buyers at an advantage to owner occupier buyers.
From a Cabinet paper on housing:
"Access to affordable housing is one of New Zealand’s most persistent long-term challenges."
"Limiting interest deductions will support our second objective for the housing market. It will put downward pressure on house prices and decrease the tax advantage held by debt financed property investors. Reducing the amount of money debt financed investors are prepared to pay for properties will support first home buyers."
"Annoyingly, if interest deductability comes back, it becomes a pretty sensible idea for us to buy another house as a rental."
Non owner occupier buyers still get interest deductibility on new builds and for social housing.
The country needs more new builds to meet the underlying housing shortage.
Why not buy new builds?
I agree, and actually you've just kind of illustrated the problem. We all know new builds are also an option available to existing investors if they want to continue deducting interest. But building a house is work, a lot of work, even if you're bankrolling someone to project manage. It's hard, it's work. We wouldn't have the time or inclination to do it - we work full-time, don't know much about property either. But buying an existing house is much easier - it's why investors want to bring back deductibility for all property types. I have no idea why investors aren't limited to purchasing new builds exclusively.
"But building a house is work, a lot of work, even if you're bankrolling someone to project manage. It's hard, it's work. "
Non owner occupier buyers don't have to build themselves (or project manage a new build development project).
Non owner occupier buyers can buy vacant newly constructed residential real estate from a developer / builder - these are ready for a buyer to move in (or a tenant for an non owner occupier buyer rent out in the long term rental market)
My understanding is that these are eligible for interest deductibility for non owner occupier buyers.
Here is one such example:
4 Lenborough Drive, Rolleston, Selwyn, Canterbury
4 BDRM, 2 BTHRM, house
Asking price $869,000
Price Slashed - Developer wants this Sold!
This property is vacant and ready for you to move in and enjoy.
https://www.trademe.co.nz/a/property/new-homes/new-house/canterbury/sel…
Buying a newbuild that is already completed from a builder / developer and ready to go seems like the same amount of effort as buying an existing house to me.
I'm interested in why would something like this (or something similar located in an area that you're comfortable / familiar with) would be unattractive for non owner occupier buyers?
A boon for FHBs is another big loss to renters. The govt squeezes the balloon one way and it pops out elsewhere. The illogical cancelling of interest deductibility for landlords is another nail in renters' coffin and yet another failing policy of this Labour govt. Muldoon (National) did similar dopey things in the 1970s which a subsequent Labour govt reversed because of the damage done to the economy. Politicians never learn.
Is it though? Little uptick in Auckland recently, but otherwise rents have been lagging both wages and CPI. It’s more likely we’ll get an exodus of construction workers than severe rental pain. Besides, the markets about tapped out in most places. Where’s the money coming from to push the market so high?
Landlords can always use their position of privilege to build more houses if they’re that concerned about renters. Then deduct interest there. Win win.
Wow, it was getting a bit boring once HW2 got banned for his racist comments, he was one of the last spruikers holding on for dear life. There was a general consensus that the housing market was bust.
Looks like someone put out a call for help recently on the Property Investors Facebook pages to rally the troops and get stuck into the Interest comments section.
Desperate times...
I might callin and question Antonia on when will ......ANZ will MARK their mortgage book to MARKET???
I would fully expect a fudged/BS answer - as thousands of the ANZ mortgaged homes will now be "ACTUAL MARKET VALUE, WILL BE BELOW THE LOANED FUNDS"
She has to get out there and re-prop the failing Karkova Dam.
Regardless, this Dam is long doomed and going to give.
This will be GFC- yet much, much worse.
REMEMBER this salutary lesson of the history of financial collapses: "When its this bad, they just have to Lie"
NZ should emulate the French market where homes are still viewed as shelter not a financial instrument
Govt set low rates with the average at currently 1.91%
25 year (life of loan) fixed int rate term
Additionally NZ needs to reintroduce support for low income FHB's
The financialization of housing markets leads to speculation and increased inequality and as a side product _ racism/sexism
Not owning property isn't stigmatised in Europe like it is here. It's part of your identity and a success symbol out here... wrongly in my opinion. Guys like Zwifter opitimise this when backed into a corner with comments like...do you even own a house?.. or #renterforlife. We should be proud of who we are, not what we own. That's why guys like him lack imagination and vision. A bit like Luxon to be honest.
Not really the real problem in this country is tall poppy syndrome and people that will not vote for Luxon for the sole reason he owns several homes. Just a whole pile of people on here wanting to tear down others to their level with the likes of a property crash, its pretty sick really. If you cannot afford a house then fine, just rent and move on with life, don't hope for others to fail because they had the balls to take a chance in life and then try and revel in their potential misery and hardship.
I'd say the vast majority of the commentators on this site ARE home owners. It's a website based around financial literacy and investing. The kiwi obsession with the one trick pony investment strategy says more about you as a 'big picture' guy, than the non spruiking group on here. I'd say I'm centre left on the whole political thing. I'd say you are 30 years behind... you need to look beyond the 'everyone is jealous of me because I own a house'. In reality, people just want the best for the country.
If most people are home owners then clearly a complete an utter collapse of the housing market is not what is the best for the country. The best that can happen now is that house prices remain static for several years, its happened before but the problem with this is the cycle ends with a boom. Any way you look at it, house prices are on an upward trajectory over the long term.
It would definitely hurt in the short term, but be irrelevant for many home owners until they no longer need a house and are in elderly care. By which time KiwiSaver would be more relevant than being a millionaire off living in your own home for 40 years.
If the housing market crashes, people may realise they aren’t as wealthy as they thought and begin to live within their means, spending less on imported goods so maybe we could run a trade surplus in future years and move ourselves out of the red. This would provide protection against crashes and recessions as we’d have a rein on spending and able keep the country focussed on workers and producing something.
“Too big to fail” is a paradox, as the size of the nz housing market is already a massive failure to our people.
Why's that exclusive to housing though?
We basically guarantee a minimum standard of living even to those who can never support themselves (whether via disability or circumstance).
While morally that is a great thing, it's also being funded under a similar assumption that things are "too big to fail".
This also includes much of regular society.
I agree, it’s not exclusive to housing. There is an expectation that our current standard of living is a baseline and many are completely oblivious to the fact that absolutely nothing is free.
Overhead an argument on the radio that Hipkins shouldn’t be talking trade with China for moral reasons. Which is fine, but expect everything we currently import to cost 4-5x as much if we choose to make it locally, likely double that again.
So ultimately the answer is consuming less. Choosing where we spend our money collectively and finding other ways to fulfill our standard of living other than stuff and yummy food.
I think ultimately we’re an island at the bottom of the world owing debts to our true landlords so large that they make us feel like a million bucks, so we offshore production of things we don’t need but assume we want because there’s nothing else to do with our time.
Im never gonna get away from buying a good pair of imported trail shoes, then gloat about how “free” running in the mountains is, and therefore I’m a part of that problem.
It's really hard living in the woods though, and most would starve first.
But yes we are mostly ignorant to what it takes to afford the lifestyle enjoyed by us. It's only possible via some form of exploitation, if we applied the same standards to our trading partners as we do to our indigenous industries we'd all have a lot less.
So just have less.
Please explain how a 40% increase in house prices is great for the country.
While you are at it, please explain how a 40% decrease is terrible for the next generations.
In my opinion, if prices hadn't gone up 40% then they wouldn't need to drop 30% to become affordable for families. House prices didn't increase due to median wages increasing 40%. They increased because people borrowed loads of money from the banks. Now a significant portion of the nation's GDP is going directly to the banks in the form of interest payments.
Any which way you look at it - the last 3 years has probably been the most damaging to the NZ economy, and society, in history. The house of cards that is the housing market and the housing industry (builders, plumbers, electricians, roofers, realtors, brokers, banks etc etc etc) is in total freefall, and this is needed in order to correct the Jacindanomics situation caused by Jacindamania.
Signed - home owner.
Politicians in every genuine democracy around the world are in the game of winning a popularity contest every election cycle.
Politicians need to win that game in order to get into office.
Given that objective, politicians will engage in behaviour that aims to win the popularity contest.
When there are hard and unpopular choices to make, it is easier to kick the can down the road for someone else to deal with.
Making publicly unpopular but necessary choices which are good for the country in the long term can result in political suicide.
Most of everything has always been controlled by a small group of big players. Our democratic systems are just there so us minions have a minor say in the administration at the ground level.
I think the required shift is so massive and unpalatable as to never get voted in.
1.91% interest for FHB's sounds great but in reality is it a good idea. It would be hard to police and then you would all just start outbidding each other and prices will head back up again.
Way back in the 80's when you could buy a starter house for 30k it was very difficult to borrow money and expensive plus no one wanted to immigrate to the arse end of the world.
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