Prime Minister Christopher Luxon wasn’t willing to say he wanted average house prices to fall in real terms, when asked at a press conference on Monday.
Last week, Housing Minister Chris Bishop told reporters average house prices were too expensive and needed to fall to improve affordability.
“We want housing to be more affordable for New Zealanders. That is a major work stream for this government — average house prices in NZ are too expensive,” he said.
“The flipside of house prices falling for people who own homes, is that they become more affordable for people who don’t own homes”.
Luxon was not willing to go this far, when asked by Interest.co.nz on Monday, and only said he wanted to see “downward pressure” on purchase and rental prices.
When the Coalition has previously referred to “downward pressure” on rental prices it has meant slower-than-otherwise increases.
Luxon went on to say the Government was working to increase the supply of four components of the housing market: owner-occupied, rentals, social housing, and emergency housing.
But when asked if that would mean lower prices, he repeated that he wanted “lasting downward pressure on house prices”.
“I’d love to see a combination where New Zealanders were able to access cheaper housing, more affordable housing, and have higher incomes, so that we could actually increase the number of Kiwis having homeownership”.
The Prime Minister’s careful choice of words may be intended to avoid the backlash that hit Metiria Turei, then Green Party co-leader, in 2016 when she called for lower house prices.
Her political ally, Labour leader Andrew Little, called her “irresponsible” and then-Prime Minister John Key described similar comments by economists as being “crazy”.
Chris-cross
On Tuesday, the Housing Minister said the whole Cabinet was behind his push for affordable housing — including the possibility of further decreases in real selling prices.
“We need to make housing more affordable, that means house prices falling, and it also means average incomes rising, as well,” Bishop said.
The long term goal was to get house prices back to between three and five times the average household median income. High housing costs were keeping young New Zealanders out of ownership and imposing “enormous fiscal costs” on the Government.
This policy position has partly inverted the political spectrum, with Labour leader Chris Hipkins arguing in favour of protecting asset prices.
He told reporters a broad reduction in house prices would be “problematic” as recent first-home buyers would lose their equity and may even end up bankrupt.
“I don't think that's something that any responsible government should aim for, but I do think we should be aiming to increase housing supply and we should be aiming to take the heat out of house prices”.
It would be better to have incomes catch up with current prices, rather than attempting to bring about a housing market collapse, he said.
Affordability rout
Since that mini-drama in 2016, the median house price has climbed more than 60%, to $770,000 according to Real Estate Institute of New Zealand data, while the Corelogic house price index has increased almost 70%.
While house prices have fallen about 16% from their peak in late 2021, they remain unaffordable by historical and international standards — similar to in 2016.
The International Housing Affordability Survey defines “affordable” housing as being three times income or below. New Zealand’s ratio in May was 6.6, albeit down from 9.3 in November 2021.
House price to income multiple
Select chart tabs
Interest.co.nz’s Home Loan Affordability Report found the typical first home buyer in New Zealand would need to save for 5.5 years to get a 20% deposit for a house.
The calculation is based on a couple in their late twenties working full-time and earning the median pay rate for people their age, and buying a house at the lower quartile price. The pair would then spend a third of their after tax income paying the mortgage.
In Auckland, this hypothetical couple wanting to buy one of the city's cheapest homes would need to save for 7.4 years and spend 45% of their income on a mortgage.
Bishop was expected to report to Cabinet in March with more details on the party’s plan to push local councils to rezone large amounts of urban and rural land for mixed residential use.
Luxon said there would be more to say on this policy “shortly”.
Economists at BNZ have forecast house prices will begin to climb next year as mortgage rates fall, the economy recovers, and property-friendly Government policies add to demand.
155 Comments
https://www.oneroof.co.nz/news/works-hard-earns-good-money-still-cant-a…
Housing in n is a joke, so are the politicians
"He wants his babies to be able to buy a house and is aware that without his help they will likely struggle, saying a house doubles in value roughly every 10 years so today’s $1m house will be $2m in 10 years and $4m in 20 years."
There's that old gem again. It is total b.s.
Houses in NZ do not "double every 10 years". A very, very small number do. And a slightly larger number do at market peaks.
But for the vast majority of houses, averagely maintained, with no significant renovation, it is more like 15+ years.
And remember, these are nominal numbers that exclude rates, insurance, maintenance, etc. that are included in the price of a rental, (and the costs of borrowing which vary from buyer to buyer).
Luxon can't face the music.... its not his choice
Reminds me of Irish headlines...
Role of the media[edit]
Throughout the bubble, newspapers and media played a vital role in hyping property. No national newspaper was without a glossy property supplement and weekend papers were often equally filled with property ads, reviews of new developments, stories of successful purchases, makeovers, and a gamut of columnists relating their property experiences. TV and radio schedules were filled with further property porn - house-hunting programs and house makeover programs were regular features on every channel. Even in July 2007, Irish Independent journalist/comedian Brendan O'Connor urged people to buy property, even as the bubble was clearly bursting.[42] In April 2011, journalist Vincent Browne admitted that the Irish media had played an important role in adding to the frenzy of the Irish property bubble.[43]
Luxon cant afford to be tied to the direction of house prices. its too hard to control. however to get reelected he is gonna need to stop the exodus of mid class next gen kiwis (nats voters) and to do that he needs to make NZ attractive for them to live and prosper in (affordable homes to buy or rent) and actually fix infrastructure, crime and public services.
Nats strategy to import tons of unskilled immigrants to work on their mates farms and live in their rentals will backfire if the majority of our country ends up being poor immigrants - who will all be labour supporters and cant afford to pay their tax contribution to maintain infrastructure.
Ultimately Luxon will have to either fix the country at the expense of his donors and mates, or face a disaster at the next election(s).
There are many "wasted taxpayers money" opportunities available that could be better spent to fund cancer drugs:
"Although a private not-for-profit body, the vast majority of funding for the Royal Society comes from you, and other humble taxpayers. The Marsden Fund money is all from the Government taxpayers.
Last year, the taxpayer funding amounted to $83.5 million – almost exactly what's needed to fund the 13 cancer drugs that we, apparently, "can't afford" "
JORDAN WILLIAMS: More ridiculous wastage of taxpayer money (bassettbrashandhide.com)
At the same time we are borrowing 3 billion dollars so landlords can contribute less than regular mortgage holders, to further enrich the already wealthy and help them outbid first home buyers. Who pays the interest on that?
As I understand it, universities had much of their regular funding cut over the years, and project funding via Marsden is how they manage to keep the lights on. The research then naturally becomes a means to getting funding, whether it is worth doing or not. Even then most universities are currently financially imploding. Do you think universities in NZ should have government funding? Are there benefits to having universities in a country, over and above what fees they can charge students and what privately funded research they can do for businesses?
R&D is not just for business, it is supposed to be for the benefit of all, or at least the growth in the body of knowledge in different areas will eventually provide some benefit to humans. If we do not support this R&D then we will wind up with even less new revelations in technology, research, knowledge than we already do and this would be a sad day for NZ if we can't support this. Although it isn't always the case in individual circumstances, education should always be held up high as the pathway to a better life. We are already seeing the result of the average level of education dropping over time, and the social consequences aren't pretty.
You can judge for yourself the value of the Marsden Funds "new revelations in technology, research, knowledge" from the sample grant list at the link provided. It looks like a lot more of "a sad day if we can't support it" for unemployable academics on the taxpayer funded BS gravy train than NZ.
"Many of the new cancer drugs will need to be administered in a clinical setting."
I think with the capacity issues they may start utilising private services. The cost for administering immunotherapies and checkpoint inhibitors are particularly high. Note, this isn't the cost of the drug, it's the cost of the infusion service and patient monitoring. Medical oncologists do very well in private....
"Nats strategy to import tons of unskilled immigrants to work on their mates farms and live in their rentals will backfire if the majority of our country ends up being poor immigrants - who will all be labour supporters and cant afford to pay their tax contribution to maintain infrastructure. "
You sure about that? My understanding is that most immigrants tend to lean toward the right. That's certainly true of the ones I know.
It's a good question. I only 'know' the immigrants who live or work near us. I suspect as there are so few that the majority are living in the 'cheaper' regions and doing less skilled jobs..if so the policies of labour will definitely appeal.
Be good to have actual stats on who has come here for the last few years, skill levels and wealth..
The Nats do have an ethnic rating system to clarify;
https://www.rnz.co.nz/news/political/368902/bridges-ross-comments-label…
Two Chinese would be nice but then, you know, would it be one Chinese and one Filipino? Or, you know, what do we do?" Mr Bridges said.
Mr Ross replied: "Two Chinese would be more valuable than two Indians, I have to say."
Lets acknowledge the truth that it was Labour who was 100% responsible for last years record immigration.
National have recognised this & since responded to control it better.
https://www.beehive.govt.nz/release/government-responds-unsustainable-n…
"National have recognised this & since responded to control it better."
No. It has simply returned to "normal".
National has done nothing.
And if you believe they'll do anything about immigration except talk a lot - which fools many apparently - I have a bridge to sell.
Actually, let's acknowledge the TRUTH.
Both are guilty of using population increase to pump GDP.
It is total, not per-head. That's lucky for them; per head we're solidly going backwards. Also lucky is that the media fails to hassle them about overpopulation, overshoot, and what to do about same.
Try dropping the small-scoped yin/yang thing, eh? The problems facing us transcend politics; they're all in avoidance mode.
We operate pretty heavily on headlines these days, and there's only a few levers the government has to pump GDP figures in the shorter term; housing, population, and government spending.
Actual long term, sustainable (or increasing) efforts to improve things like income and productivity would require worse short to medium term conditions. Which is at odds with Democratic popularism. We want a better future, but we really want more today.
Nats strategy to import tons of unskilled immigrants to work on their mates farms and live in their rentals will backfire if the majority of our country ends up being poor immigrants - who will all be labour supporters and cant afford to pay their tax contribution to maintain infrastructure.
The minimal data shows that migrants are more likely to vote right in new zealand than old time kiwis. In the last election, 53% of chinese migrants voted national and 14% Act. Indians were evenly split left and right. Pacifica people were bias towards the left but not as much as you might think. Many of the progressive moral policies that Labour mps vote for (think abortion, banning pro-life expression within 500m of health facilities, conversion therapy ban, critical race theory in schools) do not sit well with the conservative values of the majority world.
Thanks Baptist. The studies I have looked at confirm what you say.
Confession: I scurrilously like to post questions for which I know the answers. It is fun (actually sad) to read the 'reckons' that so many, so shamelessly, post. It confirms my belief that Kiwis aren't that bright and have no qualms about demonstrating it. It also makes me very sceptical about A.I. based on language analysis. ;-)
What they want is for house prices to chill for a few years. That a) stops people from leveraging up dangerously, while b) doesn't stop them from spending and going about normal lives, while c) other areas of the economy rebalance.
"b" is important and often ignored by people screaming for house values to plummet. A very large chunk of our economy runs off SMEs secured against someone's home, let's alone people simply feeling safe enough to buy that new pair of running shoes.
Screaming for a plummet is no longer required. This sucker is going down fast now!
The confidence of future housing price increases is not there any longer, housing market confidence is totally shot to pieces.
Recover from the rocks still far below and yet to be impacted, in maybe 2026/2028?
Screaming for a plummet is no longer required.
I think it is - I'm not prepared to rely on sentiment to deliver long term affordable houses (which we're still some way off achieving in my view). Currently we have a dip due to current factors such as interest rates. We still haven't fixed the rules of the game that enabled things to go sky high in the first place, so they could do the same again (or try to which is just as bad eg more population growth when we're already living in tents).
Our Hidden Homeless: Northland's elderly living in Third World conditions - NZ Herald
Government fixing long term structural problems - unfortunately our track record of that in any arena from the Air Force to the grid to the Cook Strait looks pretty darn poor. And housing affordability isn't going to improve very much if employment and disposable household incomes start falling over and falling over it is.
Currently we have a dip due to current factors
I agree on most you've said except it is not a dip at this moment. if looking at the house price/income ration, it's a 30% correction from peak. back to GFC, it was only 13.7% correction.
the house price correction has already happened.
“I’d love to see a combination where New Zealanders were able to access cheaper housing, more affordable housing, and have higher incomes, so that we could actually increase the number of Kiwis having homeownership”
So would I. When will you be bringing in tougher immigration rules to facilitate your stated objectives Mr Luxon? How about an LVT to encourage supply of houses and at the same time offset tax on incomes to increase take home pay?
All talk, no walk, not fit to solve anything.
"... he repeated that he wanted “lasting downward pressure on house prices”. "
He's lying.
How do I know this?
Because if he was telling the truth the very first thing any government would do is to remove the tax advantages that LLs have over owners occupiers.
If you don't know what I'm referring to - look up carried over losses which LLs get but OO do not.
Carried over losses are an accounting mechanism that IRD allows for all businesses, so I am not sure how it can be seen as a tax advantage. Same with interest deductability.
Edit = Oh I see you are comparing with homeowners. Sorry, didn't read carefully. Are you saying that everyone should be able to to write off their housing costs from their tax?
Landlords have absolutely no advantage at all over owner occupiers!
Reality is that owner occupiers are the ones who have an advantage as they get to live in the property.
Currently landlords are propping up tenants living costs as the rents being paid do not cover the expenses if buying now.
Landlords also have to provide for their own accommodation and there is no tax advantages there just like owner occupiers.
The truth of the matter is that so many people keep on spurting out the same of stuff on here when they really do not know what they are talking about.
instead of being in the jealous camp they would be far better off working out how the landlords became able to purchase the rental properties.
Oh dear. Another person that doesn't understand carried over losses.
"The truth of the matter is that so many people keep on spurting out the same of stuff on here when they really do not know what they are talking about."
Okay then. Since you're obviously an accountant - you must be because you're so certain of the facts - explain to us all why LLs being able to carry over losses isn't a benefit that a LL has over an OO.
We can wait.
And please don't post links from equally ignorant 'property gurus' as other have done in the past when faced with the same question.
You missed out the essential part of that sentence that speaks volumes as to the writer's financial nous "...as the rents being paid do not cover the expenses if buying now." Obviously this financial genius believes it is their god given right to buy with such high debt-levels that interest costs are so huge that even when carried over losses are used they are never fully paid back. Sheesh!
Chris, you could not be more wrong.
We are still buying, but none are for renting out.
Makes absolutely no sense when they brought in the 10 year Bright Line and removed the legitimate interest paid being able to be claimed.
To be fair, it is actually more fun and productive !
We also do not hold massive debt compared to assets and expenses
Whatever. I have no way to validate your claims, nor do I have any interest in doing so.
So lets get back to this one:
Okay then. Since you're obviously an accountant - you must be because you're so certain of the facts - explain to us all why LLs being able to carry over losses isn't a benefit that a LL has over an OO.
Ever considered some businesses make a loss initially then move to profit? My first rental (1999) broke even with a 20% deposit. Currently the estimated rental would be $35,000/yr on a place I paid $230,000 (Townhouse Botany). Ignore capital gain, the return would be great. I regret selling it and one other.
Look at the med-long term and ensure you can see through tough times.
Certainly not an Accountant at all.
Why are landlords able to carry over losses?
Are you serious?
they used to be able to write them off against other income in the same year but was changed by Labour I believe.
Any business that loses money can offset against other income in that tax year EXCEPT LANDLORDS.
havent got any problem whatsoever not claiming interest, rates insurance repairs etc. from rental income to align with owner occupiers not being able to claim their costs against expenditure for their own home!
Suits me fine, just wouldnt need to be paying any tax whatsoever on the rentals, just like owner occupiers dont!
Certainly would simplify things and would bring down rents on our many rentals!
You still haven't answered the question ... But took the time to say I had no idea what I was talking about. Well - right back at ya.
So again, since you're the expert, explain away ...
Okay then. Since you're obviously an accountant - you must be because you're so certain of the facts - explain to us all why LLs being able to carry over losses isn't a benefit that a LL has over an OO.
I think after asking three times for you to demonstrate your considerable financial skills - to the point of you claiming that you are "Just here to assist people to make better financial decisions" - we can conclude you really are full of hot air.
The market is not responsible for the "business" owners poor decision making.
If a landlord is buying property negatively geared, that is on them for a failure to adequately research the market or relying on speculation to make a gain in the future.
If I borrow $1m to buy an orchard, then can only make $30k selling apples at the gate, and that $30k doesn't even cover half the costs of my business, that's a poor business decision. I'm not subsidising the customer by growing and selling apples in a market. The cost of the orchard needs to come down to a point where the yield makes sense again before I would consider buying.
The idea that landlords subsidise anything is a falsehood sold to noobs who should not be investing. Past performance not indicitive of something something something...
"Currently landlords are propping up tenants living costs as the rents being paid do not cover the expenses if buying now"
So it's a shit business that doesn't make money. Great idea. And I thought race cars and boats were the best way to turn $3 mill into $1mill, apparently indebted landlords for the win (loss).
Look, I'm all for house prices falling by a lot (although I can't see it happening). Let's be clear though what happens if house prices do fall...
Yes, people will need to borrow less to buy houses (yes!) This will mean that new mortgage loans will be lower than mortgage loan repayments. This will reduce private debt levels (yes!), but it will also reduce private sector financial wealth (bank account balances). Why? Because banks will be destroying more money than they create.
Any increase in private debt also adds to private wealth and supports our consumer economy. It works like this:
- Banks create new money and lend it to a house buyer. Banks take a loan agreement (a new financial asset) in return.
- House buyer pays the house seller with the newly created money.
- House seller spends some or all of the money into the economy (creating consumer demand and jobs etc).
This all works 'fine' while private debt is increasing - you have a net flow of new bank credit money, which runs through our housing ponzi and into the economy. This enables the country to have a 'surplus' of cash each year. Over the last 20 years, net bank lending (net bank money creation) has run at around 8% of GDP per year and real GDP growth has averaged about 2.5%. During the last two years, private debt has only increased by a little over 3% of GDP per year, and, as a direct result, our GDP (surplus) and total cash savings have stalled.
When the net flow of bank credit money slows down, Govt money creation typically steps in to provide the stimulus the economy needs to keep going. You can see this post-GFC (and Chch EQ) and over the last couple of years in this graph. However, you can also see that increases in offshore savings (driven by our current account deficit) pull money out of our economy.
My basic argument here is that net bank lending + Govt deficit spending have to overpower our current account deficit and domestic savings to keep our economy going. Next year, Govt intend to reduce deficit spending from around 6% of GDP to less than 2%, and net bank lending looks set to continue at near record lows. Hold onto your hats.
That eras the gold standard.
- war financed industry build out, converted to mass consumption.
- tight labour market due to dead and injured males.
- European and Asian competition at the high value end was buggered
- rapid technological expansion, and new industries
- super low interest rates
- they'd won a war
There is no country that I know of that has gone through a bust without pain. The best that can be hoped for is that they control somewhat the fall so it causes the least amount of pain to the fewest number of people.
The question is, should those that received the largest gain on the way up, also receive the largest pain on the way down? Or is it, the gains are privatized, and the losses socialized?
Whatever happens, just like the road code, downhill traffic has to give way to uphill traffic.
Yes, because teh US Govt stomped down on the reckless mortgage lending, and ran a massive fiscal deficit of around 12% of GDP from 2010 to 2012 to prevent the economy crashing. You can see the borrowing / lending by sector for the USA here - see how it has to balance?
Jfoe, what you say is correct.
But what you don't say - because you're obviously using aggregates - is where this ongoing increase in money ends up, i.e. how it gets distributed, or perhaps better, 'where it ends up'.
There is another interesting phenomenon that usually occurs when money gets distributed more equitably - the velocity of circulation usually increases thereby making up for the fact that the money supply hasn't increased. And in this instance, if less money is going into mortgages, more money can go to other places, like the 000's of other businesses not involved in residential housing. (The huge, and increasing sums, of money sitting in relatively unproductive assets like houses is a real problem as it becomes largely stagnant capital.)
100%. Forgive me getting all Keynesian, but this used to be how we ran economies :
- keep those NZ dollars moving (high velocity) so you don't need a continuously increasing private debt
- use policies / taxes etc to prevent offshore accumulation of NZD (saving)
- use policies and taxes to prevent domestic accumulation and increasing inequality
- use the Govt balance sheet to derisk the stuff that we need, and let the private sector take risks on the things that we want
If you start by looking at the facts, house prices have fallen in real terms, so Bishop is getting his wish, although the architect of the fall is the boom the last Labour Govt. created by restricting supply to demand.
And National is not going to subsidize the bust that comes with a boom.
The key is at whatever level the bottom is, that from that point on, speculative non-value added rentier gain is not allowed.
This will stabilize the market, keeping as Luxon says, 'downward pressure on prices' and making them more affordable over time with income inflation, and lower more stable interest costs.
But the real reality check is still needed by those developers and investors, 'doing the numbers' in that if supply is truly allowed to meet demand, then all your figures that assume the same historical capital growth, are not going to happen.
They should be running a parallel 'what if' scenario (and permutations thereof) of any capital increase only equalling inflation (assuming no value-added input). That will tell you what price you need to pay for the land to make it work.
Lanbankers mainly have so far not been forced to discount their holdings, so that is why I say another 10 to 20% could come off the price of housing, without affecting the amenity value. The landbankers who are selling, are seeing the risk and are looking for the 'greater fool' to sell to (and there are plenty of those) and take their gain.
The Coalition still has a few increase supply rabbits to pull from the hat to affect downward pressure.
What makes house prices affordable or not, is their relativity to their cost and what the purchaser can afford.
It's a balancing act but does have an order of priority, although some of this is a subset of what a true free market is.
1) True free market so demand can equal supply in developed real-time.
2) No unnecessary costs in the system. Which at the moment there are plenty of, thus the reduction in price shouldn't be so much about some seller losing his shirt, but the removal of speculative, monopolistic rentier costs like land banking.
3) Stability. Interest rates, LVR, etc. are all based on the risk to the bank. More stable markets are less risky.
4) Disposable income. Not just based on what is the cost of other goods and what you get paid, but if points 1 to 3 are enabled, then you naturally create a surplus, that helps with health, education, etc. which feeds back into a better ability to earn income etc.
The right incentives by way of Govt. regulation create a positive feedback loop, not a negative that we have been getting up until now.
A fall can only happen from a height.
Labour exponentially increased house prices due to their restrictive land use policies, although all parties have feed the system over the last 3 decades.
Approx. 1/3 of the cost of a NZ house is made up of non-value added costs, ie monopoly type costs that could be removed without affecting the amenity value of the property.
"Labour exponentially increased house prices due to their restrictive land use policies,"
The last Labour government dramatically changed the National Policy Statement / Urban Development (NPS/UD) to enable far higher densities and a far better mix of dwellings.
The last Labour government, jointly with National, also introduced the Medium Density Residential Standards (MDRS) to enable far higher densities.
Both were major and very significant policies that freed land from "restrictive land use policies". Both have, and will continue, to see house prices stabilize.
They did tighten up land use policies on the outskirts of major urban area to stop the spread over valuable farmlands while reducing the massive roading and utility costs on ratepayers.
Overall, your statement does not stand up to scrutiny.
"Approx. 1/3 of the cost of a NZ house is made up of non-value added costs, ie monopoly type costs that could be removed without affecting the amenity value of the property."
Agreed. This is a problem. But it'd be impractical to believe the 1/3 could be eliminated. But getting it below 1/6 would be great. One notes that the MDRS mentioned above would have removed the cost (and risk) of getting a resource consent, but National et al have allowed Councils to opt out ... without actually proposing anything concrete in it's place.
It is not just a NZ thing that people think housing is too expensive, it is worldwide.
Australia is far more expensive than NZ without any doubt.
The last bunch caused it thru their mismanagement of the whole economy.
It is still extremely possible to get on the property ladder and move your way up the ladder in many parts of NZ.
You just need to buy at the lower end, improve it and sell and buy and improve and sell, it is not rocket science but does involve buying right and putting in the hard yards.
Too many just arent prepared to put in the effort and expect everything to be given to them!
Looks and smells very much like "The Man3", is encouraging the FHBs to step forwards, out of the forest cover of the bank deposit building safety and take on the current dangers (Bag Holder- high mortgage DDDebt dangers) of the automatic weapons straffing and Artillery/Himmars explosive charges, they would be terribly financially exposed to....
Best they wait, stay in the cover of deposit building safety and await the bottom sometime in 2026/2028.
Why lose another 10% to 30%, unless you really think you would enjoy Negative Equity.... ?
What I am encouraging people to do is look further out than being in the brigade that keep moaning about property prices.
The same thing is going on in Australia.
It is not productive at all to keep hoping that house prices drop as if you haven’t bought by now then I am not sure when you think you are going to be?
Yes prices have dropped in Auckland and Wellington and that is no surprise however not in the happiest city in NZ , Christchurch.
now would be the best time to be buying in Auckland if you can take advantage of the situation there, including home snd income type situations or buy and improve and sell and move up .
At the end of the day it is up to us as individuals to make the choices.
I personally dont know anyone in ChCh that is not financially better off owning a property or properties.
Not owning and renting will only leave you in a dire situation at retirement.
My suggestion is to talk to people who have become financially independent thru their actions.
Yet another person comparing NZ's housing market to Australia's housing market. Idiotic stuff.
Chalk and cheese.
Want just one example?
Australia has run a massive trade surplus for 'forever' - while NZ has run trade deficits for 'forever'.
Or put another way, Australian's incomes are supplemented by other countries buying stuff from Australia. Meanwhile, NZ has to continuously borrow money from other countries so we can continue live our lifestyles funded by debt.
Where will Australia be in 50 years? Rich!
Where will NZ be in 50 years? Poor.
FYI, balance of trade history
1) NZ: https://tradingeconomics.com/new-zealand/balance-of-trade
2) Australia: https://tradingeconomics.com/australia/balance-of-trade
Probably not, in less than 50 years I'm picking that Australia will be unliveable. Most of it already is unliveable, climate change will become a nightmare over there in the long term. New Zealand is defiantly tracking in the wrong direction however with living standards, but the same could be said for most countries around the world.
It is a out cost of living Chris, snd if you think it is cheaper than Australia, I am wondering why you havent booked your plane ticket, oneway?
Australia have got massive problems as well with aging population and Lefties, so no better there.
Yes we will be poor if the Lefties ever get in again, no country needs that!
The damage they cause is horrific
Of course you can compare housing markets.
The comparable is this. Given that Australia has space, greater than even Texas and California, you would expect that the cost of the raw land would be the cheapest in the world. That is, for all those people that say the reason land prices are high is because of land scarcity.
But Australian raw land prices are some of the highest anywhere and are at least comparable to NZ.
The reason why we have similar housing issues to Australia and other jurisdictions like California is that almost all are using Commonwealth land use policies or similar which are more restrictive in land use.
Yet Texas, which has less restrictive land use policies, has some of the most affordable land and housing in the Western world.
And it can't be trade surpluses as California and Texas, while having different land use policies, have almost identical surpluses.
Like their climate, Aussie housing is going to burn. Not forgetting of course that over 50% of apartments in the likes of NSW have serious to major defects.
Aussies are going through their Labour Govt. phase, just like NZ did.
The one rabbit they have not pulled from the hat (yet), which NZ did, is to allow their Aussie super fund money to be used to buy a house.
The game of politics being played by politicians.
Politicians avoid being the bearer of bad or uncomfortable news to large voting constituencies who can decide if they win in future popularity contests - in this case, the voting constituency are owners of residential dwellings.
Renember its all about the impact and potential impact on winning the popularity contest.
After listening to Chris Luxon yesterday I’ve come to the realisation that I’ve been looking for something/someone that doesn’t exist in governments. All along I’ve been looking for a leader and what I consistently get is a politician ( silly me) Suppose I’ve been very fortunate over the years and managed to enjoy working with leaders in business who in the most part just did what was right for the business. Giving consideration to (customers, revenue, costs, profit, H&S, people etc) Mr Luxon lacks sincerity when challenged multiple times on the same topic. Housing and affordability. He is trying to have an each way bet and failing miserably. Just tell the country what you actually believe in and what actions your government is going to take. Part of this process is going to expose possible winners and losers. That’s the bit he is avoiding. Hence not a leader in my view and so disappointing.
"I’ve been very fortunate over the years and managed to enjoy working with leaders in business who in the most part just did what was right for the business. "
The employment status of business leaders is not determined in the court of public opinion (unlike politicians who need to win popularity contests).
How many businesses would employ a person in charge of finance who has no finance background but has solely mastered the art of rhetoric?
Yet it is done in running the finances of a government in a nation in a democracy - refer the background and training of the Ministers of Finance in NZ.
CN. Yip I agree. so maybe we need a total re-write of expectations and plan for a bit more success. Would love the idea of a monthy Q&A with our 3 leaders. Mixed audience alongside a really good facilitator. Kind of like nowhere to hide situation. You want to be a political leader so now is your moment to shine. Bull shit and fluffy stuff is challenged and binned as non responsive. I’m sure a few on this platform would attend with a few questions.
Not possible.
You don't think in Systems.
It has required ever-more debt, for people to buy things; mostly houses and the stuff they fill them with. Nothing else scales (incidentally, proving Bill English wrong; houses and what we cram them with is the only recipient of the 'productive economy').
Where would the ever-more debt come from, in a stagnant-price era? Nowhere. So you get a recession/depression actually more likely, a collapse. Less incomes, via any of those. And with less incomes, less debt serviceable, so reduced prices. Compounding.
You cannot halt a ponzi, without the wheels falling off.
Go: youtube - Donella Meadows - systems and do some homework...
The International Housing Affordability Survey defines “affordable” housing as being three times income or below.
3 times? says who?
What about the young people leaving school/ university today and trying to get on the ladder. Somehow they have to work, pay tax/student loan , live and save a deposit. It is not their fault they were born after 2000. Us boomers have been lucky and we certainly have made it hard for our children and grandchildren with our greed.
What about the young people Ex Agent?
it is not that difficult to get on the property ladder if you want to!
Just a matter of talking to the right people and they will be right !
Most parents that own a home will be sitting on enough equity in their owner occupied home, to enable their children to buy their first home
This is what the parents should be doing if they havent been leveraging to buy investment property.
There are just too many moaners and not enough out there doing it, that us the difference between the home owners and the non owners!
Unfortunately not every parent can do this. Some have and their children have defaulted which has caused heartache and stress. Personally I have given my children and their partners considerable funds to buy their homes. My wife and I think it’s better to help them while we are alive. While I appreciate house prices have never been high in Christchurch they are high in Otago and parts of the North Island. It’s a big ask if mum and dad cannot help.
Ex Agent, you are correct not every parent owns, but is that part of the problem that too many adults are financially not knowledgeable?
I couldve taught most people how to improve themselves financially on any market, but it does take effort.
I have advised you many times Ex Agent that ChCh market is the most stable and profitable that I know
Member for
1 week 1 day
sure its beyond the realm of possibility that CHCH property could fall......
Clíodhna O'Donoghue, Property Editor, Irish Independent
Irish Independent, 20 April 2007:
"John FitzGerald (ESRI economist) stated that if he believed there was a crash coming that he would sell his house and rent it back. Tellingly he is not doing so because he believes, as I do, that if (and that is a big 'if') the market is going to crash it will do so in a patchy, selective way which will not impact to any great degree on many of the existing homes in Ireland.
[...]
It also, regrettably, has caused distress to many recent purchasers and has also put off many young buyers who were intending to purchase their first home in the near future. Even if only a few people took it at face value, the programme still did much damage to market confidence which the presenter himself acknowledged as vital for the market's health."
(Not as much distress as the knowledge of having bought a house that's now worth half the amount paid, I wager - CMcK)
Posted by Charlie Mackayat 1:52 PMNo comments:
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Labels: Clíodhna O'Donoghue, Irish Independent, journalists
Wednesday, May 12, 2010
Rachel Doyle, Professional Insurance Brokers' Association
Evening Herald, 7 May 2010:
"Even if property prices may not have reached the bottom, delaying in buying could mean that interest rate increases could work out more expensive than the benefit derived from a further drop in property prices," said Rachel Doyle from PIBA
(Hurry hurry to buy while prices are falling! Houses don't grow on trees you know. - CMcK)
Posted by Charlie Mackayat 5:14 PMNo comments:
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Wednesday, April 7, 2010
Marian Finnegan, Chief Economist for Sherry Fitzgerald
Irish Independent, 13 January 2006:
"The Irish market is showing a phenomenal performance in terms of output and prices so I will rate it 10 out of 10."
[...]
If you had €75,000 what would you choose as an Irish investment?
"Property still looks like providing fantastic opportunities in the years ahead."
Press Release, 1 July 2008:
"The results of the price barometer illustrate that the reprieve in the pace of price inflation evident in the first quarter has abated."
Press Release, 1 October 2009:
“The pace of price correction has moderated notably from the beginning of the year."
Posted by Charlie Mackayat 2:03 PMNo comments:
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Labels: estate agents, Marian Finnegan, Sherry Fitzgerald
Tuesday, April 6, 2010
Simon Kelly, Former Property Developer & Columnist
Sunday Tribune, 4 April 2010:
"I will miss Anglo for this and it will be missed in the future by the whole economy.
[...]
So I say to Charlie Bird and the like: get off David's lawn and get out of Seán's front drive. They have lost everything but they still have to live. The bank failed because we all failed."
Irish Independent, 22 May 2010
"I feel liberated to walk away from it to be honest. When you own that amount of assets, it feels like the assets own you. I was in property for 15 years. Now I can do something I really want to do.
[...]
"My house is in my wife's name. There are reports that developers are transferring homes into their wives' names. Any smart developer would have done that right from the start."Posted by Charlie Mackayat 5:41 PMNo comments:
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Labels: developers, newspapers, Simon Kelly, Sunday Tribune
Sunday, April 4, 2010
Brian Lenihan, Minister for Finance
Seanad Eireann speech, 14 May 2008:
"However, what we do know is that the underlying demand for housing remains strong, driven by a relatively young population and continued inward migration. While we may experience a year or two of sub-50,000 completions, it is reasonable to expect over the medium term that annual completions will return to sustainable levels which will remain high by international standards, reflecting the strong underlying demand for housing in Ireland.
[...]
However, one aspect of the change in the housing market, which is being overlooked by commentators, is that the moderation in house price levels, when combined with measures on stamp duty and mortgage interest relief, taken by the Government at budget time, means that better value is being obtained for those wishing to buy their own home, particularly amongst the first-time buyer group."
Irish Times, 24 October 2010:
MINISTER FOR Finance Brian Lenihan has said the bank guarantee scheme was "a necessary first step" and "the cheapest bailout in the world so far".
Irish Independent, 4 April 2010:
Brian calls the bottom!
"One of the good things about the steep discount, averaging 47 per cent, is that the residential property market will now be stabilised at a realistic level."
You can now buy in confidence that the price is realistic."
Posted by Charlie Mackayat 11:17 AM2 comments:
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Labels: Brian Lenihan, calling the bottom, Fianna Fáil, politicians
Wednesday, March 24, 2010
Willie McAteer, former executive director of Anglo Irish Bank
Oireachtas Finance Committee, 2 Jul 2008:
"We are often wrong but we have a strong belief that we have significant and sufficient capital to meet even worse scenarios than we envisage. If bad debts and the economy get worse, we believe we are sufficiently capitalised."
[...]
Clearly, the whole perception of Ireland and the negative sentiment towards it are obviously of concern to us. However, this sentiment is not borne out by fundamentals. We are travelling, as are many of the people here, to try to make sure that the perception of Ireland internationally is true and not a false, sentiment driven one.
[...]
We have the best interest of the country at heart and are calling it as we see it.
[...]
I reject the suggestion that banks have been foolhardy in recklessly lending and driving up values. We are in competition right across the board and I cannot think of a bank that has been reckless.
[...]
Every loan goes through a central credit committee and is properly underwritten. "
Posted by Charlie Mackayat 8:51 AM2 comments:
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Labels: Anglo Irish Bank, bankers, da fundamentals are sound, Willie McAteer
Monday, March 22, 2010
Patrick Neary, former chief executive of the Financial Regulator
Irish Times, 14 Oct 2008:
"Ireland's banks are solvent and will be able to offset potential losses on property loans with their better-performing loans"
Sunday Tribune, 22 Feb 2009:
After a key meeting on 24 September, the then finance director of Anglo Irish, Willie McAteer, recalls a final exchange with Neary. In it McAteer told Neary the bank would be "managing the balance sheet at year end", to which Neary is reported to have replied:
"Fair play to you, Willie"
Irish Independent, 16 July 2010:
At the crucial September 25, 2008, meeting, Mr Neary insisted Anglo was not insolvent and that it had enough assets to cover its debts, new documents being investigated by the Dail spending watchdog reveal.
"There is no evidence to suggest Anglo is insolvent on a going-concern basis. It is simply unable to continue on a current basis from a liquidity point of view," he told the Taoiseach.Posted by Charlie Mackayat 4:41 PMNo comments:
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Labels: Financial Regulator, Patrick Neary
Friday, March 19, 2010
Seanie Fitzpatrick, former chairman of Anglo Irish Bank
Finfacts, 21 June 2007
"Having developed this marvellous entrepreneurial culture which is delivering so many benefits in terms of employment and wealth to the country we must ask ourselves if there is now a danger that our regulatory environment has gone too far?"
[...]
"Among the more insidious and I believe iniquitous aspects of the current regulatory environment is its apparent presumption of guilt on the part of entrepreneurs and businesspeople generally. The whole structure seems to be geared towards an annual proof of innocence statement. This is corporate McCarthyism and we shouldn’t tolerate it."
[...]
"It is time to shout stop. The tide of regulation has gone far enough. We should be proud of our success, not suspicious of it. Our wealth creators should be rewarded and admired not subjected to levels of scrutiny which convicted criminals would rightly find intrusive."
Marion Finucane radio show, 4 October 2008
Would he apologise to the Irish taxpayer for having to bail out the banks?
"It would be very easy for me to say sorry. The cause of our problems was global so I can't say sorry with any degree of sincerity and decency but I do say thank you."
Sunday Tribune, 12 October 2008
In a speech delivered at the Irish Times Property Advertising Awards in September 2005, [Fitzpatrick] took a pot-shot at RTE for giving Hobbs a platform.
"This is not good. I’d genuinely worry that much of the nonsense he peddled would gain common currency, and that the wholly unbalanced Hobbsian perspective on Ireland of 2005 would fuel the anger of many of those who have failed to benefit from our economic success thus far"
[...]
The message from FitzPatrick was clear. The public should not be told anything that would cause them to vote for a government that was not to his liking. And RTE would be held accountable if they did.
Times profile, 20 Dec 2008:
On moving up to the chairman's seat of Anglo Irish Bank after 18 years as chief executive last year, Sean FitzPatrick said that what drove him "nuts" was "bureaucracy, people who aren't real, and falseness".
Asked if he was a “details person”, he replied: "I wouldn't be well organised and would be fearful of those who are." And what would he do if he had a spare million? "I'd do something for the homeless - provide day-time facilities."
"If we try to shackle entrepreneurs instead of encouraging them, the country is going to suffer. Part of the shackling is the huge emphasis on regulation and that can't be good for business."
David McWilliams's Follow the Money:
"Then he came closer, squeezed my arm and practically hissed between clenched teeth: "No f***ing Protestant is coming near us. Those establishment f***ers and Bank of Ireland have been running our country before we came along, and those f***ers are not going to bring me down. None of them are ever going to look down on us again. We are the outsiders, and this is our moment. Those f***ers don’t own us any more."
Irish Independent, 21 March 2010:
"Will you say sorry to the taxpayer and to the shareholders in Anglo Irish Bank?"
"That's a simple question, but the answer isn't. What if I were to invite you, Ronald, to sit down here with me for a cup of tea and a chat. And what if, in the course of our conversation, you were to have a cigarette. And when you were finished with your cigarette, you were to throw the butt on the floor and this shed burned to the ground. Could I ask you to say 'sorry'?"
"You could ask me, and I would apologise," I respond immediately, while marvelling at Seanie's notions of blame and how it should be apportioned.
"Well, why would I ask you to apologise? It wasn't you who burned my shed down. It was the cigarette."
Sunday Independent, 18 April 2010:
"No, why?"
- when asked at Dublin airport last week whether he feels he owes the Irish people an apology for what has happened.
Posted by Charlie Mackayat 11:18 AMNo comments:
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Labels: Anglo Irish Bank, bankers, Seanie Fitzpatrick
Thursday, January 14, 2010
Michael Grehan, Sherry Fitzgerald
Press Release, 21 Oct 2009:
"Whenever I give a positive view of the market the perception is that I have a vested interest, talking up the business to increase revenue."
(The phrase "No shit, Sherlock" comes to mind - CMcK)
Posted by Charlie Mackayat 5:28 PMNo comments:
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Labels: estate agents, Michael Grehan, Sherry Fitzgerald
Wednesday, January 13, 2010
Irish Auctioneers & Valuers Institute
Finfacts, 16 January 2008:
Robert calls the bottom!
IAVI president Robert Ganly commented: "Overall, I would say to people that the market is beginning to stabilise. The worst is over."
He said that the absence of further rises in interest rates and the reformed stamp duty regime to provide some support, alongside "strong latent demand from young couples who put off purchasing in 2007".
While prices would continue to fall in 2008, "this levelling off should begin to reverse itself in early 2009, and we would hope to see the property market growing again some time during that year".
Irish Times, 13 January 2010:
2 years later, Aine calls the bottom!
These annual results are in line with our expectations for 2009 and consistent with our belief that the average residential property values would decline 40-50 per cent from peak to trough,” commented IAVI president Aine Myler. “The survey results indicate that the market floor is close, if we have not reached it already.
Insolvency Journal, 10 August 2010:
Latter that year, more bottom spotting....
"With house prices down 42% from their peak in 2006, it looks like the property market may finally have bottomed out, according to the Irish Auctioneers and Valuers Institute (IAVI).
[...]
Property prices are continuing to fall but the increase in activity in the sector is crucial to a recovery in the property market, says IAVI's president Kersten Mehl.
"The consensus amongst our members is that the market has bottomed out," says Mehl."
Posted by Charlie Mackayat 2:08 PM1 comment:
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Labels: calling the bottom, Irish Auctioneers and Valuers Institute
Because I do not agree with all the posters that keep moaning about house prices, The Man needs to be banned?
Pretty mundane the same stuff about dropping house prices and overpriced etc. it has been going on for over a decade.
What bit is what you do not like Amokk?
The fact that everything is not so desperate for investors?
I try to paint a far more balanced position than what the standard is.
"Downward pressure on house prices."
What a laugh that is..........immigrants pouring in (esp. to AKL), the cost of compliance going through the roof, the cost of subdivision up, the cost of building materials up, the cost of planning and architects up.
What's going to happen is new builds will almost cease and existing house prices will blast off.
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