A clear National/ACT win on Oct 14 may unleash a 10-20% rise in house prices in late spring auctions, given tax repeals, tighter fiscal policy, looser migration settings & building freezes
Its a sad day when our electoral choices are between which one will be the least worst - and given that none of the choices we are presented with seem to care about getting our blessing for anything they do - I wonder if it is even worth the trouble of voting.
I think this is where voting for minor parties is critical. We should make the most of MMP and move away from this pseudo-two-party system. In a country lucky enough to have relatively uncorrupt politics, I personally feel hopeful that we have the ability to vote, and for those votes to get counted properly.
Don’t agree with you Bernard. The Greens are a minority and may appear pointless because the majority don’t like the inconvenient truths they are willing to address at the risk of unpopularity. They were a loony bunch warning us about climate change. They are right about poverty too.
Bernard doesn't mean they're a minority - he means a vote for Greens is a pseudo tick for Labour, and that Labour know this, as the Green's have said they'll never work with National. Thus, when the Greens get in (with Labour), Labour just can ignore their demands to make any binding climate or poverty policy change, as they know, like a younger sibling, they're not going to go anywhere else.
I think it's fair a change in government would lead to greater growth than otherwise but there are some other constraints which haven't been touched on here.
Not least affordability - currently the proportion of average income required to service an 80% mortgage is 51%, essentially worst on record and it won't improve unless interest rates materially fall or property values materially fall - neither is expected.
There's also the DTI limits which will likely come in by March.
Both of these will cap demand regardless of goverment.
And how long would it take to unwind the interest deductibility rules? Not sure it'd happen immediately. It's not exactly the number one concern right now - cost of living and climate change surely higher?
I'm inclined to agree on the basis of affordability of servicing a mortgage. I'm on a pretty decent income, but the cost of servicing a mortgage as a FHB is staggering, compared to when I started looking into the housing market in late 2021 - even with lower house prices. Unless supply stays as weak as it is now at the end of the year, I find anything more than stagnate house prices hard to believe.
Thanks Nick. Fair challenges. I’d argue expectations of repealed tax rules, a chronic, large and growing supply deficit and lower interest do a lot of the heavy lifting pulling the benefits forward into one juicy lump (virtually) the day after a clear result.
Luxon and Bishop will enact legislation under urgency when they become the government to:
1) enable residential property investors and speculators to deduct mortgage interest from their rental income before tax is calculated
2) reduce or eliminate the number of years that a residential property investor or speculator has to own a property before capital income tax is not payable
3) probably allow residential property investors and speculators to deduct losses from their properties (if any) from their other income before income tax is payable
these diabolical provisions will cause another raging inferno of residential property price increases and again result in first home buyers being unable to afford a home for themselves.
for Luxon and Bishop and their cronies this legislation is an extremely high priority. I sense their frustration and have a vision of a mob of snorting pigs highly agitated by the current legislation which has given first home buyers a chance to purchase a home for themselves.
In a related note, I read somewhere recently the total household pre-tax income in NZ is roughly $140b. That means recent Australian bank profits likely cost us perhaps 10% of everything we earn in this country after tax. Fun!
I’m not not one of those who believe bank economists talk their books. I’ve spent too much time talking to them and their executives to believe they have a dastardly plan. Too hard to plan, coordinate, hire and fire.
The major problem is one that is just a magnified version of the threat to humanity from the singularly profit motivated business corporation.
Isn't the Alignment Problem just so similar to the issues with trying to manage the complex system of the current economic environment of the combined mining, finance, manufacturing, retailing & political influence sectors and the resulting detrimental effect on the ecological environment & human society as a whole?
Enjoyed your korero with Damien Grant on The Working Group last night enormously Bernard. Shame we don't get to see the YouTube chat when Bomber re posts the live stream, twilight zone stuff, hilarious
That was an excellent debate. If you go look at it now, the livestream is still there. Saw your comment that Richardson's time has long gone, and I concur, so I wasn't too gutted to see Bomber's internet do us a favour.
Whatever you say Bernard "Tony Alexander" Hickey. You're probably right though especially since rbnz have signalled this is the peak of interest rates.
No you are right Bernard, the majority sadly, are not like Jenny or Mr Anderson and will vote for the Devil they know. Or feel hopeless enough not to vote at all. And it doesn't matter if that is Labour or National, same same. House prices are doomed to rise and along with them, rentals. So, advice to grandparents: clear out the spare room this winter, and put a couple of bunks in the garage, because your kids and their kids and all their gear are moving in, come October 15th! As for you Ciaran, it is always worth the trouble of voting, just do your homework and use your natural intelligence and vote for the minor party that would best serve you. It will help them to stay on track and try again next time. Then you can sleep at night because the non-voting public get the government they deserve, as well as those who vote for whatever they last heard on the telly.
May 31, 2023·edited May 31, 2023Liked by Bernard Hickey
The housing predictions sound a lot like a sales pitch. Not from you Bernard, but from the oracles.
On the matter of mitigating the risk of extinction from so called AI. A part from the hubris of it all, we need to attribute responsibility to them, they're the humans building, using and profiting from the technology.
I'm curious to know how many of these 350 AI people are also part of the weird effective altruist / longtermist eugenics cult that has engulfed the tech sector. Hopefully someone is doing the investigation, I'm sure they are.
Btw eugenics has a long history within Silicon Valley, EA and longtermism are just the current flavours.
I was hoping someone would bring this up. The longtermism cult has it alarmingly wrong, and I’d much rather the world focused on the clear and present danger of climate change, rather than the (so far) entirely sci-fi danger of AGI.
Thanks Hamersley. Just to be clear, this is not something I want or benefit from, other than as a home owner. It’s my genuinely held view that might be useful for buyers, sellers voters and residents alike.
What a mammoth task to put such detail into future political forecast. Inclusion of historical facts to show how NZ has reached such unfair housing prospects for so many makes interesting reading. Need a visionary to steer NZ to better equality.
I hope you are correct but then New Zealanders are going to have to exist with Labour's diabolical horrendous nightmare water and sewage legislation. (and I can no longer afford the cost of alcohol to anaesthetize the terror that will then engulf me)
Its a sad day when our electoral choices are between which one will be the least worst - and given that none of the choices we are presented with seem to care about getting our blessing for anything they do - I wonder if it is even worth the trouble of voting.
I think this is where voting for minor parties is critical. We should make the most of MMP and move away from this pseudo-two-party system. In a country lucky enough to have relatively uncorrupt politics, I personally feel hopeful that we have the ability to vote, and for those votes to get counted properly.
I couldn't agree more, we keep doing/voting the same way and expecting to get a different result. Time to end the purple reign
Agree with you totally.
The trouble is ACT and Green are just pointless proxies for their hosts. While they can’t/won’t threaten to go either way.
Don’t agree with you Bernard. The Greens are a minority and may appear pointless because the majority don’t like the inconvenient truths they are willing to address at the risk of unpopularity. They were a loony bunch warning us about climate change. They are right about poverty too.
Bernard doesn't mean they're a minority - he means a vote for Greens is a pseudo tick for Labour, and that Labour know this, as the Green's have said they'll never work with National. Thus, when the Greens get in (with Labour), Labour just can ignore their demands to make any binding climate or poverty policy change, as they know, like a younger sibling, they're not going to go anywhere else.
Sounds a bit spruiker-ish Bernard!
I think it's fair a change in government would lead to greater growth than otherwise but there are some other constraints which haven't been touched on here.
Not least affordability - currently the proportion of average income required to service an 80% mortgage is 51%, essentially worst on record and it won't improve unless interest rates materially fall or property values materially fall - neither is expected.
There's also the DTI limits which will likely come in by March.
Both of these will cap demand regardless of goverment.
And how long would it take to unwind the interest deductibility rules? Not sure it'd happen immediately. It's not exactly the number one concern right now - cost of living and climate change surely higher?
I'm inclined to agree on the basis of affordability of servicing a mortgage. I'm on a pretty decent income, but the cost of servicing a mortgage as a FHB is staggering, compared to when I started looking into the housing market in late 2021 - even with lower house prices. Unless supply stays as weak as it is now at the end of the year, I find anything more than stagnate house prices hard to believe.
But, sadly, it will be landlords doing the buying with ample equity and cashflow. Easy peasy for them.
Thanks Nick. Fair challenges. I’d argue expectations of repealed tax rules, a chronic, large and growing supply deficit and lower interest do a lot of the heavy lifting pulling the benefits forward into one juicy lump (virtually) the day after a clear result.
Yeah I guess we'll see (maybe). I'm just not sure there'll be enough credit worthy borrowers out there for that level of growth.
good morning Nick
you seem to be unbelievably innocent and naive
the GREED of residential property investors and speculators is horrendous and there is a very large mob of them
Luxon and Bishop will enact legislation under urgency when they become the government to:
1) enable residential property investors and speculators to deduct mortgage interest from their rental income before tax is calculated
2) reduce or eliminate the number of years that a residential property investor or speculator has to own a property before capital income tax is not payable
3) probably allow residential property investors and speculators to deduct losses from their properties (if any) from their other income before income tax is payable
these diabolical provisions will cause another raging inferno of residential property price increases and again result in first home buyers being unable to afford a home for themselves.
for Luxon and Bishop and their cronies this legislation is an extremely high priority. I sense their frustration and have a vision of a mob of snorting pigs highly agitated by the current legislation which has given first home buyers a chance to purchase a home for themselves.
Isn't there an inherent profit advantage to banks predicting an ever upward rise in land & property prices?
People are far more more likely to take out ever larger mortgages if that is so.
Not that the predictions are inherently self-service, but is it skewing the results?
In a related note, I read somewhere recently the total household pre-tax income in NZ is roughly $140b. That means recent Australian bank profits likely cost us perhaps 10% of everything we earn in this country after tax. Fun!
I’m not not one of those who believe bank economists talk their books. I’ve spent too much time talking to them and their executives to believe they have a dastardly plan. Too hard to plan, coordinate, hire and fire.
but look at who is behind those economists Bernard
correct. that is the intention/motive for their public statements
Via
https://substack.com/profile/58285908-david-mohring/note/c-16729981
The major problem is one that is just a magnified version of the threat to humanity from the singularly profit motivated business corporation.
Isn't the Alignment Problem just so similar to the issues with trying to manage the complex system of the current economic environment of the combined mining, finance, manufacturing, retailing & political influence sectors and the resulting detrimental effect on the ecological environment & human society as a whole?
We need more Wisdom along with more intelligence.
and more humaneness and less greed
Enjoyed your korero with Damien Grant on The Working Group last night enormously Bernard. Shame we don't get to see the YouTube chat when Bomber re posts the live stream, twilight zone stuff, hilarious
That was an excellent debate. If you go look at it now, the livestream is still there. Saw your comment that Richardson's time has long gone, and I concur, so I wasn't too gutted to see Bomber's internet do us a favour.
Whatever you say Bernard "Tony Alexander" Hickey. You're probably right though especially since rbnz have signalled this is the peak of interest rates.
No you are right Bernard, the majority sadly, are not like Jenny or Mr Anderson and will vote for the Devil they know. Or feel hopeless enough not to vote at all. And it doesn't matter if that is Labour or National, same same. House prices are doomed to rise and along with them, rentals. So, advice to grandparents: clear out the spare room this winter, and put a couple of bunks in the garage, because your kids and their kids and all their gear are moving in, come October 15th! As for you Ciaran, it is always worth the trouble of voting, just do your homework and use your natural intelligence and vote for the minor party that would best serve you. It will help them to stay on track and try again next time. Then you can sleep at night because the non-voting public get the government they deserve, as well as those who vote for whatever they last heard on the telly.
The housing predictions sound a lot like a sales pitch. Not from you Bernard, but from the oracles.
On the matter of mitigating the risk of extinction from so called AI. A part from the hubris of it all, we need to attribute responsibility to them, they're the humans building, using and profiting from the technology.
I'm curious to know how many of these 350 AI people are also part of the weird effective altruist / longtermist eugenics cult that has engulfed the tech sector. Hopefully someone is doing the investigation, I'm sure they are.
Btw eugenics has a long history within Silicon Valley, EA and longtermism are just the current flavours.
https://www.wired.com/story/effective-altruism-artificial-intelligence-sam-bankman-fried/
https://www.salon.com/2022/08/20/understanding-longtermism-why-this-suddenly-influential-philosophy-is-so/
Edit: Another article on the current threats that these people don't worry about because it doesn't impact them and they're more worried about their fantasy of the future. https://www.disconnect.blog/p/dont-listen-to-the-godfather-of-ai
I was hoping someone would bring this up. The longtermism cult has it alarmingly wrong, and I’d much rather the world focused on the clear and present danger of climate change, rather than the (so far) entirely sci-fi danger of AGI.
Exactly! We should also be more concerned with the climate emissions and environmental cost of their technology than their narrative.
Sci fi has a great deal to teach us...
...So long as we understand them as Morality Tales, rather than the Self-Help Fiction that the Silicon Valley Set like to imagine them as ;-)
Indeed. If only we’d listen, and stop building the Torment Nexuses that sci-fi has been warning of for decades
Your name checks out, Mr Anderson 😜
Thanks Hamersley. Just to be clear, this is not something I want or benefit from, other than as a home owner. It’s my genuinely held view that might be useful for buyers, sellers voters and residents alike.
What a mammoth task to put such detail into future political forecast. Inclusion of historical facts to show how NZ has reached such unfair housing prospects for so many makes interesting reading. Need a visionary to steer NZ to better equality.
This 10-20% a bold call, Bernard, but I'll start by wagering a chocolate fish that ACT/National is not the winning ticket.
I like chocolate fish
I hope you are correct but then New Zealanders are going to have to exist with Labour's diabolical horrendous nightmare water and sewage legislation. (and I can no longer afford the cost of alcohol to anaesthetize the terror that will then engulf me)