By Bernard Hickey
Auckland's largest real estate agency chain, Barfoot and Thompson, has reported its strongest property sales in a May since 2003, right at the start of the 2002 to 2007 property boom.
Sales of 1,165 in May were up 55% from April and 31% higher than in May 2011.
The average sale price in May of NZ$582,285 was a record high and up from NZ$568,018 in April. The previous record high of NZ$581,190 was in March 2011.
"A significant number of new listings, keenly priced mortgage lending rates, fine weather and a large pool of potential buyers all played their part in the level of activity achieved, deferring the slow down that normally occurs with the approach of winter," said Barfoot and Thompson Managing Director Peter Thompson.
Barfoot's figures are closely watched because they are the first released in any month and reflect activity through the biggest agency chain in the biggest market. Market trends have tended to emanate out of Auckland in previous years.
There were 1,421 properties listed with Barfoot and Thompson in May, up 12.% from April and up 22% from May 2011.
"High new listings were not sufficient to meet buyer demand, and at month’s end the number of homes on the company’s books was 4,356, the lowest at a month’s end for five years," Thompson said.
"The low number of new homes built in past years, coupled with Auckland’s population growth, has created a situation where supply remains the issue, and this is reflected in the prices being obtained," he said.
May’s average price was 7% above the average selling price for the 2011 calendar year.
"The shortage of available homes for sale is being felt right across Auckland, and in all price ranges."
Detailed statistics on Barfoot and Thompson's sales by region show a significant lift in sales volumes and prices in the richer central and northern suburbs of Auckland.
Sales Volumes in the Central Suburbs, which include Mt Eden, Epsom, Parnell and Ponsonby, rose 20% to 1,911 in the 12 months to May from the previous year, while volumes in Central Auckland, which includes apartment sales, have fallen slightly to 253.
The average price in the Central Suburbs rose 9% in the year to May to NZ$664,297 from the previous year.
North Shore volumes rose 23% and average prices rose 3.6% in the year to May.
Average prices were flat to lower in Central Auckland, Rodney, Franklin/Manukau, South Auckland and West Auckland.
There were 91 homes sold for over NZ$1 million in May, up from 46 in April and 50 in May 2011.
ASB's Jane Turner comments
ASB Economist Jane Turner said the figures showed a gradual lift in housing turnover with sales in the three months to May up 4% from the three months to February.
"Strong sales prices are starting to attract new listings on the market, which also increased strongly in May. Nonetheless, the overall level of new listings remains low and not sufficient to meet demand. We continue to see a decline in overall housing stock available for sale. Tight supply conditions will continue to place upward pressure on house prices," Turner said.
"The housing market continues to recover, and the recent drop in fixed-term mortgage rates below floating rates is likely to provide further support to housing demand in the coming months," she said.
"However, NZ’s housing market remains undersupplied. Until we see a meaningful increase in construction in Auckland and Canterbury, these pressures will continue to place upward pressure on house prices," she said.
Turner said stronger house price pressures presented and upside risk to the RBNZ’s medium-term inflation outlook.
" Strong house price increases could encourage a change in behaviour of households, with a move away from saving/faster debt repayment. In addition, the increase in house prices and construction costs could spill over into generalised inflation pressures as well," Turner said.
"The RBNZ has recently characterised recent housing market developments as ‘in line’ with expectations. However, if these pressures are stronger, and persist for longer, the RBNZ will become increasingly concerned. For now, the RBNZ’s immediate focus will remain on the near-term downside risks to the outlook stemming from the Eurozone debt crisis."
Barfoot Auckland
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(Updates with detail on regional moves within Auckland, Comment from ASB, interactive chart, My video, An interview with Peter Thompson)
104 Comments
Your strategy for afforable housing is very good BUT one problem I see in getting your strategy implemented is the fact that all home owners land would decrease in value.
I would therefore have to ask the question of whether this would be tolerable or not? I cannot see people wanting to take a direct hit in the value of their property if they thought it could be avoided by staying with the current controlled land supply.
Can't have your cake and eat it too. Everyone in NZ agrees our housing stock is overpriced and needs to fall relative to incomes.... however, every homeowner believes all houses are overpriced except their own.... some people have to accept the medicine they wish everyone else to take.
Esprit - I have several concerns with your statement above. Firstly significant deflation in house prices and the effects of that deflation on the wider economy.
The implementation of afforable housing strategies can help one group of people i.e. those who currently don't own a home.
However, what about the group of people who have purchased and have a high debt loading. This group may already be stretched financially in meeting their mortgage repayment obligations. If the value of their home was decreasing the banks may require higher principle repayments to offset the devalued house price.
For instance if a house devalued by 10% per annum and the owner only had a 10% deposit there would be no equity left and the bank could demand that owner to come up with that 10% immediately. If that home-owner can't come up with the extra funds the bank can force a sale.
Japan has been deflating house prices for years however this is controlled at about 3% per annum.
In regards to your comment: "some people have to accept the medicine they wish everyone else to take"........Home ownership levels are still over a 50% threshhold (actually a lot higher) As this is a majority group I don't see the majority voting for an issue that is going to see their net worth decline. There would have to be other issues that are significantly impacting before homeowners would accept a decline in house values.
As George Soros points out Economics is a Social Science and Economic Theory has been applying Newtonian Physics and that is why economists can't reach consensus on the causes or extent of the failure of the system.
People drove house prices up and people can drive house prices down - however it takes a majority to do it either way. It is what and who people vote for that sets future direction and people were quite happy to keep voting a Labour led coalition in during the early 2000's and set the path we are travelling down now.
Some political parties if they were to get into power would want to introduce a CGT to take the heat of the market, this is like closing the stable door after the horse has bolted.
Introducing a CGT and Hugh's strategy at the same time could offer an extremely amusing tax advantage to property investors.
So what you're saying is that our whole economic system fails when house prices don't go up? TOSH!
What's driving things now is tidal waves of cheap credit. When, not if, the Eurozone collapses and banks start going to the wall, the price of credit will increase, interest rates will go up, and nobody will be able to pay 10 times the average salary for the average house when they have to stump up 30% themselves and pay 9% interest... what happens from there?
Esprit - Not sure you have understood what I have said.
In order for any change to occur the majority will have to make a decision at a polling booth. People will vote for what is best for them personally. Just as you probably vote for what you see as best for yourself. I know very few people who actually vote for what is good for the country as a whole and this is completely understandable. They don't trust that the good will filter through.
Cheap credit is available and most PEOPLE use it. Just the same as any other product or service. The implications of cheap credit is the housing market increased in value. People competed with other people to buy. The banks took advantage of that competition opportunity between the people. Unfortunately housing doesn't give a resident owner a weekly return. It is really an unproductive asset which in the past relies on capital gain to give value. Servicing the mortgage sucks productive money into the unproductive service industry sector of banking. If the mortgage payments on a particular property were similar to what that property could achieve in rent then the equation would be slightly different.
Property Investors are very aware of rent ratios and other costs while those who buy homes to live in place a definite emotional value on the property. The emotional value when converted into dollars is completely out of kilter with the properties actual value.
If house prices deflated significantly on an annual basis there could be immediate severe economic hardship and this would spiral into all areas of economic activity. Any Equity would be wiped out. This is why cash is king. There will always be winners and losers depending on where people are in their buying cycle.
The status quo is also fraught with problems which I acknowledge in the unaffordable housing for many. Hugh is correct in identifying Council as the culprit in not making enough land available and all the other things. However on the one hand we have the HAVES( those who own property) and on the other the HAVE NOTS (who don't own property. If the HAVES out number the HAVE NOTS Do you honestly think they are going to give up some of their equity over night for the HAVE NOTS? If house values devalued by say $52K per annum that is like asking this group of people to give the HAVE NOTS a thousand a week. Most people wont donate a $1000 a week to charity so they would probably vote against the implementation of such a land change policy.
I have previously mentioned Japan who has deflation in property and has been going through this for a number of years. So deflating property can be done. However Japanese have had to invest around the world while this deflation is occurring. What happens when a number of countries are forced to deflate at the same time? Everything is getting cheaper, so what happens to Labour costs?
Governments around the world have two options inflate their way out of debt, or sink until they perhaps fall over and default. As the money printing presses scorch at the Federal Reserve it would appear the USA could be looking at inflating its way out of the debt. Only time will tell.
If Europe doesn't sort it self out and the PIGS start to default the biggest loser would be Germany. The problem with Europe is they have the ECB without a common treasury.
The average salary is an issue in NZ and had the Labour Govt not implemented its working for familes this issue would have come to a head a lot sooner and maybe the voting public would have changed their voting behaviour. However the Labour led coalition invented working for families and the issue of low wages was disguised. I would call it vote buying! Great salesmanship from Helen and her team.
The current economic situation is extraordinarily interesting. And so is how the people will react.
It proves that Olly Newland was right all along.
From his website:
“If anything was needed to prove that the real estate market is alive and well then these figure prove it. Of course this applies only to Auckland, but you can be certain that the effect will slowly but surely spread to other centres over time.
Furthermore interest rates are falling rapidly and it wouldn’t surprise me in the least if we eventually end up with the cash rate set by the Reserve Bank between 1-2% and mortgage rates in the 3-4% range. With the troubles in Europe, and USA investors will continue to put money into NZ because of our stability and stronger banks. This will push rates down further and barring unforeseen events, interest rates are likely stay down for a long time yet.
This in turn will make property investment more attractive. We have seen this already with several commercial properties recently selling in Auckland for around the 4% yield mark, which was unheard of up until now. Just like residential it looks like well leased commercial properties are going to double in value. This does not make head lines but it is very news worthy nevertheless.”
...... there's no doubt in my tiny Gummy head , that NZ house prices are in a new paradigm , set upon a rock solid plateau , from which they can only go up ...... Kiwi investors should abandon all other asset classes .... the average NZ'er is truely passionate about property , and that devotion will never wane , never !
Debt levels have worsened to the credit crunch period, due to Low interest rates and deposits.
Shelter is even more unaffordable based on average income.
Markets globaly going down in all aspects and no light at the end of the tunnel.
Not promising signs for taking on large debt.
Unbelievable - great for those Aucklanders getting out .. would love to see a breakdown of buyers by country of origin! Surely locals aren't this reckless but who knows. Over 4,000 in total were sold in Auckland back in March 2003 - so will be interesting to see the overall total when that's reporting. Looks to be a very central Auckland, high end driven run.
You'd be nuts not to list up there at the moment!
Kate: Correct. You ask one of the right questions.
If you don't ask the right question you won't get the right answer
a breakdown of buyers by country of origin
Either one of the following could be the answer
Without adequate data you will never know
- Cashed up migrants coming in pushing locals out
- Property churning among locals
- Locals buying the farm back off disaffected departing migrants
or a mixture of the above, take your pick
One problem is the paucity of meaningful data upon which to make "financial decisions"
In the past month the NZD has fallen against the USD by approx 10%
The Remimbi is pegged to the USD
The Remimbi can now buy 10% more NZD compared to a few months ago
Chinese buyers can now buy 10% more NZD for the same "property"
And Auckland property prices have risen? You should not be surprised.
iconoclast you are dead right. agents reported to me a couple of months ago that asian money is pouring in. they also passed an interesting comment that they suppected sum of it was 'hot"? not sure how they determined that however. concern is that prices are being kept artificially high.
You guys realize that the reason the whole world is in trouble is because of high house prices and people leveraging to the hilt then not being able to pay back the mortgage right? So when property gets more expensive, people have to leverage more, when people have to leverage more, the harder it is to pay back the mortgage, the more likely they get sick of it and go bankrupt. Look at Spain, their house prices were very high relative to income, and now they are basically bankrupt, same as Greece. Your "begger thy neighbour" attitude is not really what this country needs IMO.
...... hmmmm ? ..... a single word to describe folk who profit from the use of interest & leverage for making " unearned " income .....
Leemee see : Smart !
....ummm , " rich " ..... " resourceful " .... " successful " ........
Gosh , there's more words to describe them than I thought !
"The RBNZ has recently characterised recent housing market developments as ‘in line’ with expectations. However, if these pressures are stronger, and persist for longer, the RBNZ will become increasingly concerned. For now, the RBNZ’s immediate focus will remain on the near-term downside risks to the outlook stemming from the Eurozone debt crisis."
So the RB is worried about a downturn stemming from Europe but not about people mortgaging themselves to the eyeballs in a very low interest environment who would be hurt badly if the downside risks they are worried about happen. No punch bowl going to be taken away in NZ. Markets are full of rational actors who's aggregated self interest will result in the optimal outcome for the country. Yeah right.
It should be remembered that for the entire month of May that "CJ", interest.co.nz's resident cashed up "high-roller" from Christchurch with suitcases full of insurance money, was running around haunting Auckland's auction rooms, looking for a home for his bankroll.
The insurer would only allow NZ or Australia, and the fact Aussie has a stamp duty, capital gains tax and exchange rate risk (as it was all cash no debt) made it a no-brainer to avoid it.
I did look at property in Australia, but Melbourne is overpriced, Sydney is too expensive (as we had fixed amounts it would have required looking to buy in the further out suburbs) and Brisbane/Gold Coast is in a bit of a downturn and doesn't have critical mass that the central areas of Sydney, Melbourne or Auckland.
I feel comfortable enough with Auckland, if the buoyancy continues prices might even rise further!
Melbourne: depends on how long you looked, how hard, and where. Top end properties $1 miilion plus are not selling. There's a massive over-hang on the market. Many have fallen by 40% in the past 12 months. Asking prices have not fallen. But if they want to get rid of them they have to take the haircut.
Melbourne is pretty sick especially the Mortgage belt and the New Home Buyers areas. Just watch as the $24k Home Buyers grant rolls off and the young can't get the leverage.
Only areas doing well are the established ring around the inner city - Essendon, Brunswick, Collingwood, Richmond... Where the smart/knowledgeable money can re-finance at current rates and gain from increasing Rents. Its great for property investor margins.
Its a bad time to be a renter in Melbourne at the moment - unless you want a dog box apartment in Docklands/Southbank.
Come on, I only bought three from Barfoots (although probably bidded on a dozen Barfoot auctions). 1162 other people purchased as well!
The fact is that prices have been flat for a fair while and with insufficient supply of quality homes and a whole lot of leakers out of the market, the price push was inevitable (although the overall market doesn't show it yet, some like for like sales of standalone character homes in the central suburbs are up well over 30% (if not 40%) from 2008).
If you have a character home in a quiet street on freehold land with a flat north or west facing backyard and a garage in Central Auckland suburbs you are probably sitting on at least a million dollars.
No more than about 20 people bother reading these comments do they?? And 95% of them HATE property!
Somehow I don't think I created a rush into the Auckland market!! (But other more newsworthy commentators like Tony Alexander have been pretty strong proponents of the "get in quick" approach).
(Anyway, I thought at least one of the property haters may have offered me a property at a reasonable price but Chairman Moa wouldn't let me know his address and doublegz was talking rubbish on how much he would sell for (he didn't take $850k at auction!)).
No I didn't bid on Lingarth. So am I to assume you aren't Mr Jones and didn't own Lingarth?
Given your other price tips I will assume that your "a bit" means "a lot". Although I haven't seen the house, being on a busy road will limit the value, however double grammar and a Remuera address is likely to push it towards a $1m even if it is fairly grotty. It's hard to say without seeing it, but a 4 bed bay villa in the heart of Epsom walking distance to AGS (double grammar) on a subdivided site went for $815k in May and Orakei looks like a much better property.
Anyway I've spent my money for now (an expediency) and am now back in ChCh buried in half a foot of snow having to settle for watching the transit of Venus online.
Bernard mentioned something that I've never heard explicity - that a generation of leaky homes are effectively removed from the market. Is this a major factor in the lack of supply or have half of them been patched up and put back into circulation?
I'd also be very interested in the collective wisdom here on why the gains are so tightly focused on the more expensive central suburbs? Is this where supply is the most restricted? Or are the wealthy immigrants targeting this range/area? It seems very, very localised by any standards.
Disclosure - I think I am technically an immigrant having been (happily) dragged to NZ by my lovely kiwi lady but certainly not the super-wealthy type.
Clearly, these figures show some strength in the market - I won't deny that. But I think its totally premature to call it a boom. Note too that Barfoots use the mean price measure, rather than the superior median. So if more higher end properties are selling then these statistics can be quite misleading.
You missed the link SK! Did you mean this pile:
http://www.barfoot.co.nz/476158
Because you'd have had $5k left over for legal fees and a makeover!
The auction results don't point to that. Most are still reluctant to commit to unless the reclad is done very well.
This reclad in Remuera has been on the market for over 6 months, when virtually everything in the area is selling in a 4 week auction marketing period:
http://www.realestate.co.nz/1640967
It's certainly worth reclading if the house actually leaks, but if you're doing it to make money, you need to buy at a bargain rate and get the house into the shape people expect. (Some of the $400k sales of freestanding townhouses in the eastern suburbs are absolute bargains but may actually work out to be more profitable as rentals "as is" than as quick flick reclads).
Although if you're in the business of reclading and are making money, by all means get on with it (as Gerry would say).
The Auckland Council think it's Remuera:
http://www.aucklandcouncil.govt.nz/EN/ratesbuildingproperty/ratesvaluat…
Obviously I am more accurate than the Auckland Council. The boundary in Remuera, to me, ends at Ngapuhi Road. Any further to the east I'd consider Meadowbank. If we follow the council, the entire Remmers is bigger than Herne Bay, St Marys Bay, Ponsonby, Freemans Bay, Grey Lynn and Westmere combined.
It looks like a boom, it feels like a boom , the real estate agents are saying its a boom, so it might just be a boom .
I get the horrible feeling that this is not going to end well .
At the lowest interest rates , possibly in the history of New Zealand, its now cheaper to own a home than rent one.
I hope the punters have done the arithmetic at interest rates of around the long term average of about say 9 to 10%
The long term average interest rate is 7.5%. This includes the late 1980's when rates went over 20%. As it appears we are entering a long period of zero or very low growth, rates are unlikely to reach those levels unless some new spur to growth happens along, the way cheap fossil fuels did in the 20th century. Don't hold your breath waiting for it..
Is there the possibility of a major global credit contraction - thus driving interest rates a whole lot higher? If one follows the accumulation by dispossession theory - surely the ptb need only create such a contraction as a means to acquire more dispossessed assets?
ps. such a contraction accompanied by the 'decoupling' theory, of course - so interest rates on deposits do not correspondingly improve.
Not according to Bill English and Big Daddy - we're a safe haven apparently. More like ignored while the market sharks have bigger fish to deal to. Eventually NZ and Aussie will make an appearance on their radar (sonar?) One of the main reasons I suspect we have a steadyasitgoesdon'trocktheboatzeroreformpandertothemarkets government. They're scared witless as were Labour before them
"Is there the possibility of a major global credit contraction"
I'd use probability....90%+ IMHO.
Interest rates or debt has a double edge....With a depression and hence dropping wages our ability to sustain payments on even a few % interest while watching asset prices collapse will be un-wanted, illogical or un-affordable. Sort of the same thing as high interest rates....but lots of nasty side effects like 20%+ unemployment.
Deposits, provided the banks dont collapse and you lose your money are good, its cash and as prices drop you can buy more...and of course its a tax free gain....those with cash and cash like safe things will be happier then most.
I suppose its, will we want to borrow in either case.....
regards
"Is there the possibility of a major global credit contraction"
I'd use probability....90%+ IMHO.
I hold the opposite view...
There is clear evidence that Govts. and Central Banks will defend any credit contraction.... so even thou there is a very serious risk of a credit contraction... I believe the powers that be, will do anything and everything to mitigate it.
The effects of all the QE's are wearing off.. We have election yr in USA, so there will be no fiscal stimulus till next yr.....
Taking NZ as an example... The Reserve Bank will sacrifice savers... OCR can go to zero... reserve bank would rather see mortgage rates go down and strong house prices, than a credit contraction, with liquidity issues.
Politically... Govt. will find it easier to run big deficits..... rather than austerity. The buzzword will be .."providing liquidity".
Richard Duncans' latest book is a goodie. Explains that what we have had for the last 50yrs is not Capitalisim... but Creditism..
Global GDP growth has come from Credit growth... For the Global economy to hang in there... let alone grow... credit needs to expand.
AND... just like the Generals who are always fighting the last war... I'm betting that our current crop of old generals are going to defend the "status quo".... big time.
Having said all that.... anything can happen... but one must still place ones bet. ( I decided to buy real estate this yr )....
Cheers Roelof
I agree that Govn's and RB banks say they want to defend any credit contraction.....however to start with there is,
1) "do as I say and not as I do". This translates into austerity, this means less Govn spending, this has a negative effect on the economy...private spending is already contracting......hello double whammy. You dont defend against contraction by contracting, the UK, Greece, spain and Irelend are prime examples of this failure.
2) Sacrifice savers, well thats collateral damage, but since even the retail banks say there is a disconnect between OCR and what they can borrow for.....0.25% wont matter directly. However when you have a contraction there are no private borrowers and then deposits become worthless if you cant lend it out at a margin.....so yes the rate will collapse.
BBL
regards
3) QE.....I think QE3 will be here pre-November....in fact it needs to be here pre-July.....if it isnt well thats another nail in the failure to stop the credit contraction
4) Lets talk about credit contraction....ppl and businesses are not borrowing....that is credit contraction....
5) Govns will defend against a depression and deflation btw...not credit contraction directly...funny thing but savers benefit and tax free when deflation sets in.
6) Creditism, agree, the middle class and lower wages have gone no where in real terms, hence no real growth....what we have seen is all debt based....huge failure of rational markets, financial wizkids creed. Credit expansion is privately driven (taken on) and its its sub-linear ie take on $2 debt get $1 growth.....not sustainable.
7) Curerent crop and the "rational markets" believers like JK....so yes you are right....
8) Buy real estate, well as an adult that is your choice....at least you have looked at the situation and made a concious decision to act....in that respect while we are opposite in the outcome we see at least thats a decision made by yourself. I have gone the opposite way, 2 years ago I sold all my shares and paid down debt.....as I see huge asset losses.
We get to see inside 5 years who's right....might well be inside 2012......
BBL
regards
........ for what it's worth , the hounds of gloom will still be baying at the doom when the markets have a change of sentiment , and begin to track higher ....... they'll still be howling about " dead cat bounces " ...... missing out on the run up , themselves ....
The stockmarket seldom has " average " years ...... volatile ones are the norm . A 25 % spike upwards is not out of the question ...... particularly so if the European shamozzle is seen to be under some degree of control ......
:-)
For a dead cat to bounce, a prerequisite is something solid below, to bounce off.
Why everyone presumes that to be the case, is as interesting as why most folk see exponential as linear.
Perhaps they are used to floors, an assumption which may well turn out to be flawed.
The USA election will be an interesting thing to watch......if Obama wins then its probable that he will attempt to keep the game going.....Romney on the other hand will destroy the US economy and America....but wtahc out for us being a casulty from the death thrashes...
Personally I think its going to go anyway, so Im almost hoping for Romney....the sooner he drives the US ppl to their senses and they drive the "republican party" to the wilderness and their political extremists to extinction, the better.
regards
Agree Roelof - The Govt will do everything it can to ensure reflation occurs. Easy credit and low interest rates help to keep the prices up. The trick is to use the cheap interest rates to the best advantage, not something the average homeowner does well.
Increase in GST also helped to increase prices but the effects have probably all flowed through by now.
Even if deflation did occur property would only fall so far. Cheap interest rates can be used to ride the downward size of deflation in property if this did occur.
I always find it amusing that the average homeowner doesn't appear to mind paying for their house almost twice if they take out a 30 year mortgage when if they just tipped in some extra in principle payments they could clear their mortgage more efficiently.
Plan for the worst and hope for the best is my philosophy and even if there were to be deflation in housing it looks like the costs of holding on the downward side would be cheaper than the upward overall. So if the value is declining with deflation it will be offset by the interest you would pay as your dollar buys more.
Great, so we've gone full on into the thing that has just about distroyed many of the western economies.
I doubt this government will do anything about it, even though you just have to look at countries like Ireland, Greece and the US for evidence how distructive a property boom can be to an economy.
Some people never learn, it appears our government is full of those kind of people.
Interesting view of the future here
http://www.businessinsider.com/raoul-pal-the-end-game-2012-6
Can we please make a rule that if you are going to aus then just go and don't bang on about it.
You know where the airport is and it's a free country.
If you've given up on nz why do you feel a need to tell everyone?
There are loads of successful people in nz, so what makes you think that moving to oz will change things for you?
No, don't answer that, just go already.
I like hearing from those that make the choice to move across the Tasman. I believe we have to open our eyes especially given that many, if not most, leaving are of a generation of NZers that we will really need in spades going forward.
When my mother retired she headed to a retirement community in Florida - and most certainly regretted it thereafter. She longed to see families with young children in the grocery stores, kids playing in yards along the streets and doctors waiting rooms with someone other than old, frail people nearing their end-of-life. Why she didn't move again - not really sure. I think once you get to a certain age, you just haven't got the strength and motivation to improve your life in a substantial way.
We should never be critical of those (and in particular young people with families) who make a firm decision to seek improvement in their lives .. and that is why I think most folks who head to Australia do so .. they seek better prospects. As far as I'm concerned good on them and I wish them all the best. However I wish even more that our politicians would address the reasons why they see little opportunity to make those improvements to their lives here in NZ.
We really should have two houses of Parliament - one as present - and one which you can only seek election to if between 18-35 years of age.
Agreed but lets capture some tax on their NZ property assets if there are any. All the overseas owners and Kiwis not living in NZ, are paying their tax elsewhere - not helpfull to NZ. Also they miss GST, as their primary consumption is offshore.
How about we introduce a land tax on their property to off set the tax they dont pay into NZ?. Non citizen overseas owners dont vote, so there is no voting block to upset and the James Camerons and Northland Russian Billionare of the world can most defiently afford it. Ill bet neither of them would relocate their global taxable earnings to NZ to avoid such a targeted tax, but they still want to buy up parts of NZ at prices that locals can only dream about.
As for the kiwis that have enjoyed the free medical, edication, welfare etc and now pay tax in Aussie or the UK etc, Id propose the same. If they still own property here, charge them the land tax as well, and interest on their student loans while were there.
Chris_J "Anyway, I thought at least one of the property haters may have offered me a property at a reasonable price but Chairman Moa wouldn't let me know his address and doublegz was ...."
if you are a guy from CHCH looking to replace yr investment properties - you've been to our house... (plse don't mention the address here..)
You have to understand that the real money in property is NOT in cashflow, it is in capital growth. You can create cashflow by increasing your net worth rapidly and then releasing that equity when you need it.
I was talking ot one of my financiers today, who will be speaking at my trading workshop and he made a very interesting statement about investors. He said that when applications from investors come across his desk for trading finance he only looks at one thing, their equity or net worth. He said that any investor who is not building equity doesn’t know what they are doing. If they can’t build good equity quickly they will not succeed. Cashflow won’t save you in a downturn, net worth will!!
Excerpt from Dean Letfus Newsletter - January 2007
Trolol
FYI here's a useful commentary on this figures from Matt Nolan at Infometrics
http://www.tvhe.co.nz/2012/06/07/some-thoughts-on-housing/?utm_source=f…
"It feels like we have a situation which is “supply” driven, with a shortage or property driving up values. This compares to any perceived “bubble” which would be “demand” driven, with expectations of capital gains leading to excessive investment and excessively high prices."
As a homeowner who bought the 3 bedroom property in Glenfield for 360K last year and spent 70K on renovation, I am happy I got it then cause for $430K you are simply getting rubbish these days
I should be delighted that my property would be sold for $500k plus if put it on the market, but I am not. I see my friends around who choose wisely and saved some more for a nice deposit will now miss out on the oppurtunity that I had. Now they would have to take out bigger homeloans which means they would be under extreme financial pressure. I am in my 30s
All this idiotic low interest hype should be fueling our private sector which produce real productive assets, not some speculatative property market.
As someone who famously said "Insanity is repeating the same mistakes over and over again and expecting a different result".
I am personally very happy that I made 70k-100K by buying the my home at the right time. But as a kiwi who looks at the state of the nation, it is sad to see the banks,the property "investors" and politicians are converting more people(mostly the youth) into a nation of renters.
Instead of rewarding the savers, we are again rewarding the speculators and reckless spenders.
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