ASB, ANZ stop high LVR lending; Govt spends $1b on emergency housing; China eases Covid quarantine rules; Bank profits running at 2% of GDP; Watchdog sees Auckland rail loop cost of $5.53b
“NZ economy is a housing Market with a bit tacked on. “You have said it before many times and it is true Bernard. Can you hammer this a bit more please and release to all. Home owning voters are worried yet again by their property values falling and will even elect a fascist government if they think it is going to continue. Good luck.
I appreciate that you keep the core high priority topics visible, while still taking time to address the day to day. Especially the deep diving into underlying/historical causes, ongoing impacts etc. I've only been subscribed for a few months but I feel so much better informed. Thanks
not all home owning voters. I am a home owning voter and would like residential property prices to fall/reduce substantially ( to 2017 levels/prices (although I would have sympathy for first home buyers who have purchased in the last 5 years)). ( probably will not vote in the next election though because there is no party that has policies I believe to be important/necessary).
GREED is an extremely serious problem in New Zealand.
If we stopped collecting houses would there be a supply issue?
If we can't sell CGT or wealth tax then what about stamp duty on 2nd and 3rd properties?
I can't believe the cost of rent in Porirua. Just saw it. I grew up there and I'm telling you, that should be the cheapest! Is it high because everyone bought rentals there with big mortgages?
I also grew up there and agree, rents have got ridiculous. Although, to be fair, Porirua rates are also stupidly high.
We should simply incentivise 'productive' housing. The recent removal of interest deductions from rental housing is just squeezing rents up more, and has made it ~30% less attractive to 'risk' renting your vacant house out... I personally think stamp duty would have a similar effect - only reducing the attractiveness of selling a vacant house.
I'd love a blanket land tax, but I know that's not happening. So instead we should tax the bejezeers out of vacant houses (in high-demand locations), then restore interest deductability on rentals - that way you'd at least either have to be insanely rich or an idiot to not put an empty house up for rent or sale.
A 0.3% land tax on residential zoned land, with a 3% tax on unoccupied residential zoned and serviced land, along with value capture rates for when public infrastructure or zoning changes deliver unearned increases in land values.
It was absolutely essential for residential property investors and speculators mortgage interest to be removed from being allowed to be deducted from income (although it still is for new builds). A person purchasing a home for themselves has to pay income tax and then purchase a home with after tax income. This was giving residential property investors and speculators a huge advantage over people purchasing a home for themselves (and still is for new builds). When Luxon and the National Party become the government they will again allow residential property investors and speculators to deduct mortgage interest from their income before tax is paid, but rents will not reduce accordingly - landlords will keep/retain the extra profit for themselves (might be a rare exception or two).
I do agree with your assumption about the behavior of (many) landlords, but that's why you also need to put real pressure on vacant and undeveloped properties - to increase supply. I'm not suggesting we just reinstate interest deductions without doing other things.
As far as any "advantage" goes, I'm inclined to think one is required. Regardless of how low or stable the price of housing is, there will always be some who can't afford, or don't want, to own - they still need a place to live. If we reach our 'ideal state' of fair prices and minimal house price inflation, alongside market rents, is there enough incentive for a housing provider to take on the potential risk of a tenant who, wonderful as they might be, will still wear out your investment?
We have concluded that financing is a valid cost for every other functional business. Longer term, all removing interest deductable is going to do is consolidate housing ownership into the hands of massive companies with access to cheap or cash financing (as is happening in places like the US), and we know how that ends.
It is absolutely essential that residential property investors and speculators are not given a tax advantage over private residential property owners who live in their own home. It is far more important to have equitable tax rules for residential property investors/speculators and private owners than it is to compare residential property investment/speculation with "functional businesses".
(what you call my "assumption" is based on many decades of experience and observation on this planet earth)
I think I can see why the G7 are not capping the price of Russian oil. If it was decided to, say, set a cap of $80 per barrel to punish Putin, then what would the usual importers of Russian oil do? Pay Putin $80 or buy oil on the open market at, say, $120. They'll be buying as much Russian oil as they can.
Any cap would need to be quantity based, not price based. With that quantity limitation being a sinking lid: - if Russia was exporting x barrels per day and cut some of that amount (y) to punish someone then the new cap of Russian oil becomes x-y barrels, even after the 'punishment' is over.
Excellent summary. At some stage please set out your assumptions about 'population growth', particularly in metropolitan areas. It seems to me the recent HBA for the Wellington Regional might be worse than useless when it comes to addressing the issues you have emphasized including those in other comments on this post.
As much as homeowners have benefitted from our ridiculous economic situation, the major banks have far, far more. There's plenty of moaning about the supermarkets making "a million dollar profit each day". And yet, big shopping bills are an actual crisis largely because of the hundreds of household dollars each week that go into exploitative profits on mortgage interest (which then flows into rent and house price expectations), and other bank debt.
The latest bank profits mean the Australian banks (who, incidentially, employee 1/3rd the number of staff of the supermarkets, and have closed around 50% of their local branches in the past 30 years) are making $19.3m profit every day!
This is no accident. Their lending interest rates have consistently crept higher relative to the OCR in the past 30 years (the gap has roughly doubled since 2000). Our local fixed rates are also consistently around 1% higher here than they are in Australia (and a sub-3% floating rate is still very available there).
Because most NZers fix their mortgage rates, they only really notice them once every 2 years or so. This means we collectively have noticed these billions of dollars less than a 50-cent increase in the cost of butter. But surely it's time we started asking how banks are allowed to get away with taking in nearly a million dollars in profit *every hour*, when it's clear they are an integral factor in our so-called "cost-of-living" crisis.
Hear hear! ...the same question was on reddit a while back, and the average response seemed to land somewhere between "I liked Trust Bank / National Bank" (so they were simply 'absorbed') and silliness like "They supported Apple Play a few weeks before other banks did"... so, apathy I guess?
Thanks Gwani. ANZ merged with National in 2008. It also bought Post Bank. The big four have almost bought up a lot of the smaller players, including all but a couple of the 'Trust' banks.
Strange. I considered all options for my home loan this year and Coop, TSB were easily the most competitive in terms of mortgage rates (inclusive of cashback).
Sorry, you're right! (About the money at least; not sure if putting all the blame on the current Labour government is fair considering this has been building for decades?) ... Anyway, my bad - I didn't count the zeros properly - it should have been $19.3m per day (based on the $1.74b profit). So a little under $1m an hour, not every 10 mins.
Bernard, I'd be interested in your view if you are for or against immigration for NZ? It seems like NZ needs decent positive immigration inflows to achieve its potential. The restricted immigration of the last few years has pushed average wages up and likely domestic inflation too. But service levels are awful, (look at shortages at hospitals, schools, almost every industry). Infrastructure needs to match as well which we don't do well. Keen for your views?
I'd love lots of migration if it also was done after the infrastructure was built and it's not just a cheap way to juice nominal GDP growth and asset prices. Sadly, that's what has happened in the last 20-30 years.
Does anyone really think there is a problem with families and parents particularly being obliged to supporting then helping their kids get educated, housed and to flourish? It is the law after all. I don’t think they do given the unreliability and scarcity of Government standards and services in NZ. The issue is the Government isn’t a reliable partner when people don’t do this and never has been. Making human rights to home and care and services will help but can’t really be a replacement for parental and familial obligations in law. Not many men want to take responsibility is the problem and tries to offload all responsibility to women and Government. To not have housing to raise children and the financing necessary is when a country hits the bottom of the barrel in terms of standards and individual obligations in society and an easy fix too. Like most little boys the establishment will try to obfuscate and avoid responsibility, blameshift rather than getting on with enforcement, provision of services and facilities people are entitled to by virtue of paying tax, working and reproducing and that Government are paid to do. It’s pathetic to watch them fail to adapt and get things both new and done before, which they know work for QOL, going round and round in indecisive circles. Waiting for permission? It’s their job to lead. We all appear to be trapped by these irresponsible irrational, monstrous institutions protecting a failed and inequitable system. All short term and silo thinking. The solutions are all there but there is no courage. Just hot air and big splashes. The narratives put forward remain absurd and self serving to those in power to continue to exploit everything and fail in duties they have to the well-being of their part of and in society. Private extractive Banks (money is a social construct) cannot be allowed to dominate our private lives using our Government to do it and putting barriers to our human and legal rights including those of our children and their future. They are all paid by us. Of course some will use their wealth to help their kids if forced to due to a failure in governance and law. This failure has been evident for decades and enabling it simply encourages more of this bad behaviour and violence both literal and figurative. Rampant misogyny and male violence both individually and institutionally is the problem. Women and children are second or third class citizens whilst performing most of the critical labour mostly low or unpaid …and covering multiple roles It’s always annoyed me! 😀 It needs to stop. But no one even wants to acknowledge it let alone pay for the inequities and that’s the bottom line. Men are terrified of losing their privilege and may lose their Mummies./slaves. Not sexy. Not grown up and that’s who is in charge or the women they choose who have so much internalised misogyny they hate other women and themselves and won’t challenge the orthodoxy or demand women’s rights including their and their children’s rights to support and privacy. Without control or a loss of human and legal rights. The law is settled and long-standing. Just get on with the job. People need homes to live in end of and they shouldn’t be taxed on a human right. That’s more massive Government overreach into people’s lives. (Fascism).
I'm very puzzled about what the endgame might be. My two grown capable responsible sons and one grown capable responsible granddaughter, none of whom had available money from parents here, have all set themselves up overseas with jobs that pay well enough to buy a house and make a family. One is in Australia, one in Canada and one in the US. Why are we bringing up children who need to make their lives elsewhere. I guess there is some logic here somewhere but I can't see what it is. Help.
Great point Wendtk. I fear this myself. That all the boomers (and I'm one of them...almost) are doing is building up equity to pay for the plane flights to see their grand children for a few days at a time. Pointless. Yet they'll never vote for a wealth tax or land tax or capital gains tax.
Yay Bernard - you are the perfect person to be onside with the puzzle! I'm a tad pre-boomer and I think they are quite mad. We have to stop this waysystem of hogging properties so that people can't have homes. It seems suicidal to me.
Also not a boomer myself but have parents and in-laws who are. I've had some recent 'discussions' [sic] with them, trying to convince them that they now need to stop voting for themselves, and start voting for their grandchildren.
There is zero chance that boomers will live to see their Superannuation or Gold Cards taken from them. There is zero chance they will be 'forced' into buying an EV or riding a bike in their lifetimes. There is zero chance their house price will drop below the equity they have in it.
Boomers need to stop voting against some imagined world where their lives are worse, and open their eyes to the reality that the clock has already run out on us being (politically) able to roll back any of the spectacular opportunities they have had. They could throw away their vote on the most wacky leftist-communist-socialist party and, still, the remainder of their lives will essentially be unchanged.
When you're down to your last 10-15 years, it's time to be thinking about how you're going to hand over the world to the next generation, not yelling at them to "get off my lawn!"
...all due respect to Boomers who already know this, of course, like yourself Bernard
I am a son of NZ born and based boomers, myself now based in Dubai... and prior to that, London.
I do not see how my family and I could've got to the position we are in now, financially and emotionally, with the 'worldly minds' that we now have, without leaving NZ for an extended period. We're coming up 10 years away from NZ.
We talk here among Kiwi friends that if any of us had young nieces, nephews or cousins now, we'd be advising them to do two or three years out of uni in NZ and then leave for 10+ years. Get ahead, see the world and then consider going back. The OE doesn't cut it now - get ahead to a significant degree, establish families, and then go home.
As the other poster below alludes to, it's mind-blowing the rhetoric we hear from both my parents (maori) and my wife's (pakeha) towing the ethnocentric, NZ-is-best, downright racist line which speaks to the world they want but belittles any of the real, researched issues facing New Zealand.
I sound pessimistic, but I can't honestly imagine what there would be here for my kids to come back for. I can't put my finger on it, but for all we have some progressive legislation we feel blindly stuck in the mud. I think too many eager minds have left. It may simply be the result of being small and far away
Hi Bernard, re: $1B on emergency housing. You are on to something here. For $1B you can build brand new 5000 units on land you already own@ 200K each. There are 8000 in emergency housing according to the link. Perhaps this was a way to bailout the hotels during covid times?
regarding "home-owning median voters who make more income tax-free from their homes than their jobs" - not so much. It's a good sound bite, but unless you're flipping or a serial mover, you make nothing from owning your own home. So you're talking about "on paper" which isn't income, and you know better. homeowner here, who would be happy to pay CGT.
When you mention the house price drops around the country, is this evenly occurring across all housing or are particular types more affected such as the big family homes vs small appartments. Surely different buyer groups are affected differently by tightening credit conditions? I might be on my own here, but when I hear ‘Auckland City’ I think of this meaning Auckland but it’s actually only referring to the small central area of Auckland, largely the CBD and surrounding suburbs, which has a high proportion of appartments being built compared to other areas. Could we be seeing along side everything else going on, an artificial lowering of the price in Auckland City e.g. if a lot of 1-2 bedroom appartments are sold vs expensive 3-4 bedroom homes, with the remuerites and ponsonbytes (they probably don’t refer to themselves this way) staying put, that will drop the average house price in the area much faster?
Great Dawn Chorus, Bernard. I would just like to mention that although Labour and National are addicted to the easy votes that come from propping up house prices for home owners (and may the devil take the hindmost!), there is one party that now has a policy of introducing a land tax. Such a tax would disincentivise land banking and house hoarding and encourage the productive use of land. And the result would be more affordable houses that are within the reach for first home buyers. As you well know.
Going offshore to get ahead, as one previous poster noted.
I'm in that bucket now. Ten years away, between UK and Dubai. Mid 30s, in a secure financial position, with more than one home, no parental help, while my nearest and dearest friends in NZ, mostly in their mid to late 30s, run on a hamster wheel of mortgage payments, taking one overseas holiday every 18 months if they're lucky and getting paid half what many of us offshore are being paid.
This isn't a brag and nor is it just about money. Nor is it about a disdain for the current Govt.
I am a Labour/National/TOP voter in the past... Labour last time round, I think. Unsure about next year.
Quality of life, particularly the provision of public and essential services, has us worried about any near-term return to New Zealand. Yes, the OECD and other research places us high on scales of quality and happiness. But when you're based offshore, as many in this thread will have been, it's much harder to see that reality.
What some may label trivial things, like Christchurch Stadium, are an example of New Zealand's inability to make decisions, look beyond an election cycle and/or think outside the box. Let's hope Rob Campbell's appointment to look into the health system brings some recommendations that we might act on in the near future in that sector.
Coming back to housing, what's sad in these challenges NZ faces is that highly educated, degree and trade-qualified young New Zealanders, particularly those in their 20s now or younger, have a single critical factor dictating whether they will or will not own a home in their lifetime - whether they can get parental help for a deposit.
And if that deposit isn't available, as it won't be for many, particularly Maori and Pasifika whose parents haven't got the equity to shift over to their brood, where does that leave us? Deeper in the cycle of division or waving more Kiwis goodbye at Auckland Airport for a OE or likely a longer stint overseas to get ahead. We cross our fingers they bring those skills home.
I own homes in NZ as it's an easy road to capital gain. On the side, I invest in other things.
BUT, I wholeheartedly support the continued tapering off of house price growth and would support a sensible discussion on further capital gains taxes or other measures to steer Kiwis' into productive investments and out of property. Make it hard for me to justify sinking money into homes and doing very little with them.
Oh I think i get it! The point of NZ is to make money out of property! That is why it feels dull and stuck in the mud. Who was the eminent scientist who wanted NZ to become a place which was great for research and innovation ?- it didn't happen did it.
This was a very depressing read. If National or Labour are unwilling to tackle the problem by a capital gains tax or whatever it takes, It would appear we are be locked into this scenario for ever. Is there another political movement on the horizon that have some answers and would they ever get elected in a way to create some change. I do not want to live in a country with an underclass locked in poverty with all the poor outcomes you describe in todays dawn chorus.
“NZ economy is a housing Market with a bit tacked on. “You have said it before many times and it is true Bernard. Can you hammer this a bit more please and release to all. Home owning voters are worried yet again by their property values falling and will even elect a fascist government if they think it is going to continue. Good luck.
Patrick Medlicott
Thanks Patrick. I have to be careful not to bore people. I try to have something new to say, or at least some new flavours of the same basic meal.
Thank you I know how difficult it is
KR
P
I appreciate that you keep the core high priority topics visible, while still taking time to address the day to day. Especially the deep diving into underlying/historical causes, ongoing impacts etc. I've only been subscribed for a few months but I feel so much better informed. Thanks
not all home owning voters. I am a home owning voter and would like residential property prices to fall/reduce substantially ( to 2017 levels/prices (although I would have sympathy for first home buyers who have purchased in the last 5 years)). ( probably will not vote in the next election though because there is no party that has policies I believe to be important/necessary).
GREED is an extremely serious problem in New Zealand.
If we stopped collecting houses would there be a supply issue?
If we can't sell CGT or wealth tax then what about stamp duty on 2nd and 3rd properties?
I can't believe the cost of rent in Porirua. Just saw it. I grew up there and I'm telling you, that should be the cheapest! Is it high because everyone bought rentals there with big mortgages?
I also grew up there and agree, rents have got ridiculous. Although, to be fair, Porirua rates are also stupidly high.
We should simply incentivise 'productive' housing. The recent removal of interest deductions from rental housing is just squeezing rents up more, and has made it ~30% less attractive to 'risk' renting your vacant house out... I personally think stamp duty would have a similar effect - only reducing the attractiveness of selling a vacant house.
I'd love a blanket land tax, but I know that's not happening. So instead we should tax the bejezeers out of vacant houses (in high-demand locations), then restore interest deductability on rentals - that way you'd at least either have to be insanely rich or an idiot to not put an empty house up for rent or sale.
A 0.3% land tax on residential zoned land, with a 3% tax on unoccupied residential zoned and serviced land, along with value capture rates for when public infrastructure or zoning changes deliver unearned increases in land values.
It was absolutely essential for residential property investors and speculators mortgage interest to be removed from being allowed to be deducted from income (although it still is for new builds). A person purchasing a home for themselves has to pay income tax and then purchase a home with after tax income. This was giving residential property investors and speculators a huge advantage over people purchasing a home for themselves (and still is for new builds). When Luxon and the National Party become the government they will again allow residential property investors and speculators to deduct mortgage interest from their income before tax is paid, but rents will not reduce accordingly - landlords will keep/retain the extra profit for themselves (might be a rare exception or two).
I do agree with your assumption about the behavior of (many) landlords, but that's why you also need to put real pressure on vacant and undeveloped properties - to increase supply. I'm not suggesting we just reinstate interest deductions without doing other things.
As far as any "advantage" goes, I'm inclined to think one is required. Regardless of how low or stable the price of housing is, there will always be some who can't afford, or don't want, to own - they still need a place to live. If we reach our 'ideal state' of fair prices and minimal house price inflation, alongside market rents, is there enough incentive for a housing provider to take on the potential risk of a tenant who, wonderful as they might be, will still wear out your investment?
We have concluded that financing is a valid cost for every other functional business. Longer term, all removing interest deductable is going to do is consolidate housing ownership into the hands of massive companies with access to cheap or cash financing (as is happening in places like the US), and we know how that ends.
It is absolutely essential that residential property investors and speculators are not given a tax advantage over private residential property owners who live in their own home. It is far more important to have equitable tax rules for residential property investors/speculators and private owners than it is to compare residential property investment/speculation with "functional businesses".
(what you call my "assumption" is based on many decades of experience and observation on this planet earth)
Yep on the big mortgages, along with a lack of new supply and plenty of population growth. Land tax the best bet I think.
I think I can see why the G7 are not capping the price of Russian oil. If it was decided to, say, set a cap of $80 per barrel to punish Putin, then what would the usual importers of Russian oil do? Pay Putin $80 or buy oil on the open market at, say, $120. They'll be buying as much Russian oil as they can.
Any cap would need to be quantity based, not price based. With that quantity limitation being a sinking lid: - if Russia was exporting x barrels per day and cut some of that amount (y) to punish someone then the new cap of Russian oil becomes x-y barrels, even after the 'punishment' is over.
This just seemed like a way for the west to say, See: oil sanctions! (while still buying oil). And even then, they couldn't get it across the line
Yep. Plenty of problems with this policy, which is why I suspect it was not agreed overnight.
Excellent summary. At some stage please set out your assumptions about 'population growth', particularly in metropolitan areas. It seems to me the recent HBA for the Wellington Regional might be worse than useless when it comes to addressing the issues you have emphasized including those in other comments on this post.
Great point. I'll have to do some digging. Thanks for the prompt.
As much as homeowners have benefitted from our ridiculous economic situation, the major banks have far, far more. There's plenty of moaning about the supermarkets making "a million dollar profit each day". And yet, big shopping bills are an actual crisis largely because of the hundreds of household dollars each week that go into exploitative profits on mortgage interest (which then flows into rent and house price expectations), and other bank debt.
The latest bank profits mean the Australian banks (who, incidentially, employee 1/3rd the number of staff of the supermarkets, and have closed around 50% of their local branches in the past 30 years) are making $19.3m profit every day!
This is no accident. Their lending interest rates have consistently crept higher relative to the OCR in the past 30 years (the gap has roughly doubled since 2000). Our local fixed rates are also consistently around 1% higher here than they are in Australia (and a sub-3% floating rate is still very available there).
Because most NZers fix their mortgage rates, they only really notice them once every 2 years or so. This means we collectively have noticed these billions of dollars less than a 50-cent increase in the cost of butter. But surely it's time we started asking how banks are allowed to get away with taking in nearly a million dollars in profit *every hour*, when it's clear they are an integral factor in our so-called "cost-of-living" crisis.
Edit: bungled the decimal place (fixed above)
All the more reason to deal with local NZ banks like Co-op, KiwiBank, TSB and the like.
Can anyone shed light on why ANZ etc. have such a large portion of the home loan market?
Hear hear! ...the same question was on reddit a while back, and the average response seemed to land somewhere between "I liked Trust Bank / National Bank" (so they were simply 'absorbed') and silliness like "They supported Apple Play a few weeks before other banks did"... so, apathy I guess?
Thanks Gwani. ANZ merged with National in 2008. It also bought Post Bank. The big four have almost bought up a lot of the smaller players, including all but a couple of the 'Trust' banks.
Strange. I considered all options for my home loan this year and Coop, TSB were easily the most competitive in terms of mortgage rates (inclusive of cashback).
BNZ wouldn't budge.
Very good points. Yikes. 10 minutes per million. That's quite some 'wage'. $6m per hour.
for the last quarter of 2021 banks in NZ made 1.61 billion dollars profit.
that is about 17.5 million dollars profit every day. a colossal/enormous/huge/massive
amount/sum in a country with the small population of NZ. and Ardern and Robertson
and the so-called Labour government let them.
(don't know how you got $193m profit every day)
Sorry, you're right! (About the money at least; not sure if putting all the blame on the current Labour government is fair considering this has been building for decades?) ... Anyway, my bad - I didn't count the zeros properly - it should have been $19.3m per day (based on the $1.74b profit). So a little under $1m an hour, not every 10 mins.
Bernard, I'd be interested in your view if you are for or against immigration for NZ? It seems like NZ needs decent positive immigration inflows to achieve its potential. The restricted immigration of the last few years has pushed average wages up and likely domestic inflation too. But service levels are awful, (look at shortages at hospitals, schools, almost every industry). Infrastructure needs to match as well which we don't do well. Keen for your views?
I'd love lots of migration if it also was done after the infrastructure was built and it's not just a cheap way to juice nominal GDP growth and asset prices. Sadly, that's what has happened in the last 20-30 years.
Re LGWM. What are the financing options being proposed? Land tax, value capture or another PPP?
None that I can see. But I'm digging today and aim to have more detail later.
Does anyone really think there is a problem with families and parents particularly being obliged to supporting then helping their kids get educated, housed and to flourish? It is the law after all. I don’t think they do given the unreliability and scarcity of Government standards and services in NZ. The issue is the Government isn’t a reliable partner when people don’t do this and never has been. Making human rights to home and care and services will help but can’t really be a replacement for parental and familial obligations in law. Not many men want to take responsibility is the problem and tries to offload all responsibility to women and Government. To not have housing to raise children and the financing necessary is when a country hits the bottom of the barrel in terms of standards and individual obligations in society and an easy fix too. Like most little boys the establishment will try to obfuscate and avoid responsibility, blameshift rather than getting on with enforcement, provision of services and facilities people are entitled to by virtue of paying tax, working and reproducing and that Government are paid to do. It’s pathetic to watch them fail to adapt and get things both new and done before, which they know work for QOL, going round and round in indecisive circles. Waiting for permission? It’s their job to lead. We all appear to be trapped by these irresponsible irrational, monstrous institutions protecting a failed and inequitable system. All short term and silo thinking. The solutions are all there but there is no courage. Just hot air and big splashes. The narratives put forward remain absurd and self serving to those in power to continue to exploit everything and fail in duties they have to the well-being of their part of and in society. Private extractive Banks (money is a social construct) cannot be allowed to dominate our private lives using our Government to do it and putting barriers to our human and legal rights including those of our children and their future. They are all paid by us. Of course some will use their wealth to help their kids if forced to due to a failure in governance and law. This failure has been evident for decades and enabling it simply encourages more of this bad behaviour and violence both literal and figurative. Rampant misogyny and male violence both individually and institutionally is the problem. Women and children are second or third class citizens whilst performing most of the critical labour mostly low or unpaid …and covering multiple roles It’s always annoyed me! 😀 It needs to stop. But no one even wants to acknowledge it let alone pay for the inequities and that’s the bottom line. Men are terrified of losing their privilege and may lose their Mummies./slaves. Not sexy. Not grown up and that’s who is in charge or the women they choose who have so much internalised misogyny they hate other women and themselves and won’t challenge the orthodoxy or demand women’s rights including their and their children’s rights to support and privacy. Without control or a loss of human and legal rights. The law is settled and long-standing. Just get on with the job. People need homes to live in end of and they shouldn’t be taxed on a human right. That’s more massive Government overreach into people’s lives. (Fascism).
Admits to having outsourced the dog pedicure duties, 40Kg of non cooperative apex predator requires a professional or someone is going to lose a limb
I'm very puzzled about what the endgame might be. My two grown capable responsible sons and one grown capable responsible granddaughter, none of whom had available money from parents here, have all set themselves up overseas with jobs that pay well enough to buy a house and make a family. One is in Australia, one in Canada and one in the US. Why are we bringing up children who need to make their lives elsewhere. I guess there is some logic here somewhere but I can't see what it is. Help.
Great point Wendtk. I fear this myself. That all the boomers (and I'm one of them...almost) are doing is building up equity to pay for the plane flights to see their grand children for a few days at a time. Pointless. Yet they'll never vote for a wealth tax or land tax or capital gains tax.
Yay Bernard - you are the perfect person to be onside with the puzzle! I'm a tad pre-boomer and I think they are quite mad. We have to stop this waysystem of hogging properties so that people can't have homes. It seems suicidal to me.
Also not a boomer myself but have parents and in-laws who are. I've had some recent 'discussions' [sic] with them, trying to convince them that they now need to stop voting for themselves, and start voting for their grandchildren.
There is zero chance that boomers will live to see their Superannuation or Gold Cards taken from them. There is zero chance they will be 'forced' into buying an EV or riding a bike in their lifetimes. There is zero chance their house price will drop below the equity they have in it.
Boomers need to stop voting against some imagined world where their lives are worse, and open their eyes to the reality that the clock has already run out on us being (politically) able to roll back any of the spectacular opportunities they have had. They could throw away their vote on the most wacky leftist-communist-socialist party and, still, the remainder of their lives will essentially be unchanged.
When you're down to your last 10-15 years, it's time to be thinking about how you're going to hand over the world to the next generation, not yelling at them to "get off my lawn!"
...all due respect to Boomers who already know this, of course, like yourself Bernard
I am a son of NZ born and based boomers, myself now based in Dubai... and prior to that, London.
I do not see how my family and I could've got to the position we are in now, financially and emotionally, with the 'worldly minds' that we now have, without leaving NZ for an extended period. We're coming up 10 years away from NZ.
We talk here among Kiwi friends that if any of us had young nieces, nephews or cousins now, we'd be advising them to do two or three years out of uni in NZ and then leave for 10+ years. Get ahead, see the world and then consider going back. The OE doesn't cut it now - get ahead to a significant degree, establish families, and then go home.
As the other poster below alludes to, it's mind-blowing the rhetoric we hear from both my parents (maori) and my wife's (pakeha) towing the ethnocentric, NZ-is-best, downright racist line which speaks to the world they want but belittles any of the real, researched issues facing New Zealand.
I sound pessimistic, but I can't honestly imagine what there would be here for my kids to come back for. I can't put my finger on it, but for all we have some progressive legislation we feel blindly stuck in the mud. I think too many eager minds have left. It may simply be the result of being small and far away
Hi Bernard, re: $1B on emergency housing. You are on to something here. For $1B you can build brand new 5000 units on land you already own@ 200K each. There are 8000 in emergency housing according to the link. Perhaps this was a way to bailout the hotels during covid times?
regarding "home-owning median voters who make more income tax-free from their homes than their jobs" - not so much. It's a good sound bite, but unless you're flipping or a serial mover, you make nothing from owning your own home. So you're talking about "on paper" which isn't income, and you know better. homeowner here, who would be happy to pay CGT.
When you mention the house price drops around the country, is this evenly occurring across all housing or are particular types more affected such as the big family homes vs small appartments. Surely different buyer groups are affected differently by tightening credit conditions? I might be on my own here, but when I hear ‘Auckland City’ I think of this meaning Auckland but it’s actually only referring to the small central area of Auckland, largely the CBD and surrounding suburbs, which has a high proportion of appartments being built compared to other areas. Could we be seeing along side everything else going on, an artificial lowering of the price in Auckland City e.g. if a lot of 1-2 bedroom appartments are sold vs expensive 3-4 bedroom homes, with the remuerites and ponsonbytes (they probably don’t refer to themselves this way) staying put, that will drop the average house price in the area much faster?
Great Dawn Chorus, Bernard. I would just like to mention that although Labour and National are addicted to the easy votes that come from propping up house prices for home owners (and may the devil take the hindmost!), there is one party that now has a policy of introducing a land tax. Such a tax would disincentivise land banking and house hoarding and encourage the productive use of land. And the result would be more affordable houses that are within the reach for first home buyers. As you well know.
The party is TOP, the Opportunities Party.
Going offshore to get ahead, as one previous poster noted.
I'm in that bucket now. Ten years away, between UK and Dubai. Mid 30s, in a secure financial position, with more than one home, no parental help, while my nearest and dearest friends in NZ, mostly in their mid to late 30s, run on a hamster wheel of mortgage payments, taking one overseas holiday every 18 months if they're lucky and getting paid half what many of us offshore are being paid.
This isn't a brag and nor is it just about money. Nor is it about a disdain for the current Govt.
I am a Labour/National/TOP voter in the past... Labour last time round, I think. Unsure about next year.
Quality of life, particularly the provision of public and essential services, has us worried about any near-term return to New Zealand. Yes, the OECD and other research places us high on scales of quality and happiness. But when you're based offshore, as many in this thread will have been, it's much harder to see that reality.
What some may label trivial things, like Christchurch Stadium, are an example of New Zealand's inability to make decisions, look beyond an election cycle and/or think outside the box. Let's hope Rob Campbell's appointment to look into the health system brings some recommendations that we might act on in the near future in that sector.
Coming back to housing, what's sad in these challenges NZ faces is that highly educated, degree and trade-qualified young New Zealanders, particularly those in their 20s now or younger, have a single critical factor dictating whether they will or will not own a home in their lifetime - whether they can get parental help for a deposit.
And if that deposit isn't available, as it won't be for many, particularly Maori and Pasifika whose parents haven't got the equity to shift over to their brood, where does that leave us? Deeper in the cycle of division or waving more Kiwis goodbye at Auckland Airport for a OE or likely a longer stint overseas to get ahead. We cross our fingers they bring those skills home.
I own homes in NZ as it's an easy road to capital gain. On the side, I invest in other things.
BUT, I wholeheartedly support the continued tapering off of house price growth and would support a sensible discussion on further capital gains taxes or other measures to steer Kiwis' into productive investments and out of property. Make it hard for me to justify sinking money into homes and doing very little with them.
Oh I think i get it! The point of NZ is to make money out of property! That is why it feels dull and stuck in the mud. Who was the eminent scientist who wanted NZ to become a place which was great for research and innovation ?- it didn't happen did it.
This was a very depressing read. If National or Labour are unwilling to tackle the problem by a capital gains tax or whatever it takes, It would appear we are be locked into this scenario for ever. Is there another political movement on the horizon that have some answers and would they ever get elected in a way to create some change. I do not want to live in a country with an underclass locked in poverty with all the poor outcomes you describe in todays dawn chorus.