Coalition slumps behind Opposition in poll after just 5 months in power; RBNZ warns banks on climate risk; Landlord building plans at record lows, while 80% plan rent hikes, despite tax reversal
Yep, one Unit where I live is now up for rent and one was just a month ago and both are 20$ more rent per week, and that after re-introducing Tax deductibility and the rates increase in Auckland would mean a 5$ Rent Increase, that's what the rates increase would come to, once spread over the other units and divvied up per week.
Most landlords are in the property business to make money. It’s not a calling, it’s not a way to provide better services in a competitive market, it’s a cold investment. We should never expect benevolence from the sector.
But the political rhetoric surrounding landlords portrays them as bootstrapping entrepreneurs instead of tax-incentivised rentier-speculators. The expectation that landlords can or will provide new housing suggests these people believe their own propaganda.
Exactly, and the fear-mongering about any positive (IMO) changes by the sector like "rents will go up", "we need landlords", etc... indicates their relative empathy, ignorance and/or IQ
Actual capitalism is about businesses competing for the consumer dollar. NZ’s rental market is about consumers competing with each other for limited resources.
Landlords, pejoratively, want to be treated as entrepreneurs, and believe they’re creative business people. The government acts as though landlords will provide supply if given sufficient policy and market incentives.
The reality that nearly all of those landlords are ruthless rentier capitalists speculating on the housing shortage is not a concept they or the govt wish to contemplate.
So instead, the govt will make policy privileging landlords because that satisfies the delusions of both parties.
Not at all Liam. We do not want to be treated as entrepreneurs or creative business people. We are business people like all other business people. No more and no less. And we want to be treated fairly, like all other business people.
We should expect that, a home is a human right. You can also be a good landlord, most are just incompetent and/or inexperienced to provide that, including a lot of our politicians (go figure - conflict of interest much?).. NZ is (and will continue to) suffer as a whole due to the way our property market functions. Sadly, it relies on people doing the right thing over profits, including our politicians..
How do "landlords [to] increase the housing supply ... and would suppress rental growth"? Converting an existing property to rental is not increasing housing supply. Developers building new housing in response to housing demand.
Actually housing supply reducing vs demands means this is logical: "while more than 80% plan to increase rents in the next 12 months".
There seems to be a bit of confusion between landlords and developers. There are very few landlords who develop. I do not have the statistics (i am not sure if anyone does) but developers mostly build for sale (i know there is Simplicity who build for rent, and a few others like Du Val are trying it) but as a whole - developers build for sale, and investors buy houses (existing or new) and rent them out, if they can make a profit or at break even point or a small loss if they are happy to top up their loss now for a long term gain.
Tax deductibility plays extremely small role in investment decision making. It is the last item on the list of consideration after interest rates, LVRs, DTI, location, market considerations, immigration, insurance and rates.
So anyone who expected developers to start building more because tax deductibility for landlords is back was confused about how rental properties are added to the pool of rentals in NZ. There is no way that return of tax deductibility can result in more development of rental properties.
Building/buying rental properties in the current market simply does not stack up, so we need to not expect for a lot of rentals to be built by the private sector. Rough numbers are simple. $300k land if you are lucky plus $450k to build a house (150sqm x $3000 per sqm build cost, again this is really conservative). So $750k for a new house, average rent is $650 per week. This gives us a gross yield of 4.5%. Interest rates are 7%. Who in their right mind would invest in a rental returning 4.5% gross (this is before insurance which has increased 17% and rates that also grow double digits year on year). Plus property management costs, plus vacancies and property management fees. Net yield 4% or less? There is no amount of tax deductibility that will make this an attractive investment. The only entity that can continue building for rent in this climate is the government or private developers in partnership with government where some sort of commercial return can be underwritten by the government, in my opinion.
After reading about the eco houses I have had an idea. What if a large piece of land was sold in pieces of block chain. The land was owned by those who owned those pieces of block chain and those pieces could be sold and bought individually. That deals with the problem of the cost of the land. That separates the land from the houses. Then other people could build their houses on the land. That would reduce the price of the houses. The banks should be able to provide mortgages for those houses. An idea?
This is a comment from my nephew in London about my idea.
“I agree that a communal garden or communal land does do so much for a community, because it is those impromptu encounters that these types of spaces facilitate, and as a result, generate a greater sense of belonging and livelihood for residents. Here in London around the garden square, we have a whatsapp group with over 180 residents on there, and so much happens as a result of that, from social gatherings both in the garden and at eachothers' apartments, to coffees down the road at the local cafe, to finding new rental accommodation for tenants when theyre turfed out because of rising rents. I've developed several close friendships as a result of the communal garden!!
Given blockchain is all about peer-to-peer and removing the middle men, it certainly lends itself very well to community driven investing, crowd funding, and social causes, so there is definitely something in what you are suggesting. I think the leasehold / freehold suggestion is very novel, and something we need to unpack more...
Ironically, this dismal poll for the Coalition will strengthen the resolve of all ministers to play safe. This especially applies to the leaders. As David Seymour quoted yesterday on TVNZ: ‘ the coalition has never been stronger’
Please open this to the public. They should all understand that this Govt is a train wreck. And it doesn't have to be like this. It feels as if we are losing hope, both in democracy and in the rule of international law. Watching the brutality of the police in the US arresting protestors is just appalling. Land of the Free? Nope, I don't think so.
Kathy, I felt sick watching US police, 2 or 3 at a time jump on top of, and grind into the ground, a woman of my age, who was extrmemely upset at their man-handling of a student. She was roughed up for attempting to intervene. Tg for our coppers trained to de-escalate (in similar circs, or so I assume?), rather than escalate a tense situation.
"Land of the free" never. I can remember 4 May 1970 Kent State University Allison Krause and 3 other students shot dead on campus by the National Guard for protesting.
The phrase “invented fiscal crisis” (in podcast) should get a lot more airtime. Part of the “shock doctrine” Naomi Klein coined is the use of crisis to justify drastic neo-liberal reforms.
But the crisis doesn’t need to be real, just instilled. The government has created the sense of crisis needed to justify the ideologically driven reforms they want to pass. And by talking and acting as though there is a crisis, they are creating one. Albeit, one their own ideological policy preferences are ill-equipped to address.
She was yelling it since August 2023, it wasn’t true then and isn’t true now. I have not seen anyone attempt to hold her to account for various past statements on this topic, be interested if there is any such journalism out there.
They've purposely (or inadvertently) tanked the economy through their negative rhetoric (mainly trying to pin the issues on the former govt.).
They haven't even really had to agree on anything of substance yet either, the fireworks will begin shortly regarding that.. Will be good viewing (trying to find a positive), but bad for New Zealand INC. I take zero responsibility for that :)
Nobody will take any responsibility for it. That’s why we’re in this mess. The only punishment for interest-conflicted “leaders” is to not be voted for next time. Instead, they’ll get a job in some government-affiliated agency or university.
Where to start... Luxon and the other smug ministers appear the very embodiment of HUBRIS Giganticus. Combined with their dogmatic idealogy, TINA and blind adherence to failed past policies (austerity,, trickle down) most of us will be worse off in short order - ready for some shock doctrine
And lets have less of this right-track-wrong-track talk. NAFs dont believe in tracks!, just (user pay) roads
Yep, one Unit where I live is now up for rent and one was just a month ago and both are 20$ more rent per week, and that after re-introducing Tax deductibility and the rates increase in Auckland would mean a 5$ Rent Increase, that's what the rates increase would come to, once spread over the other units and divvied up per week.
Most landlords are in the property business to make money. It’s not a calling, it’s not a way to provide better services in a competitive market, it’s a cold investment. We should never expect benevolence from the sector.
But the political rhetoric surrounding landlords portrays them as bootstrapping entrepreneurs instead of tax-incentivised rentier-speculators. The expectation that landlords can or will provide new housing suggests these people believe their own propaganda.
And that can tell you quite a bit about them
Exactly, and the fear-mongering about any positive (IMO) changes by the sector like "rents will go up", "we need landlords", etc... indicates their relative empathy, ignorance and/or IQ
Actual capitalism is about businesses competing for the consumer dollar. NZ’s rental market is about consumers competing with each other for limited resources.
Landlords, pejoratively, want to be treated as entrepreneurs, and believe they’re creative business people. The government acts as though landlords will provide supply if given sufficient policy and market incentives.
The reality that nearly all of those landlords are ruthless rentier capitalists speculating on the housing shortage is not a concept they or the govt wish to contemplate.
So instead, the govt will make policy privileging landlords because that satisfies the delusions of both parties.
Not at all Liam. We do not want to be treated as entrepreneurs or creative business people. We are business people like all other business people. No more and no less. And we want to be treated fairly, like all other business people.
We should expect that, a home is a human right. You can also be a good landlord, most are just incompetent and/or inexperienced to provide that, including a lot of our politicians (go figure - conflict of interest much?).. NZ is (and will continue to) suffer as a whole due to the way our property market functions. Sadly, it relies on people doing the right thing over profits, including our politicians..
How do "landlords [to] increase the housing supply ... and would suppress rental growth"? Converting an existing property to rental is not increasing housing supply. Developers building new housing in response to housing demand.
Actually housing supply reducing vs demands means this is logical: "while more than 80% plan to increase rents in the next 12 months".
Agree,.only if investing in a newly built property are landlords small or large improving the housing/home supply.
Simple to understand.
There seems to be a bit of confusion between landlords and developers. There are very few landlords who develop. I do not have the statistics (i am not sure if anyone does) but developers mostly build for sale (i know there is Simplicity who build for rent, and a few others like Du Val are trying it) but as a whole - developers build for sale, and investors buy houses (existing or new) and rent them out, if they can make a profit or at break even point or a small loss if they are happy to top up their loss now for a long term gain.
Tax deductibility plays extremely small role in investment decision making. It is the last item on the list of consideration after interest rates, LVRs, DTI, location, market considerations, immigration, insurance and rates.
So anyone who expected developers to start building more because tax deductibility for landlords is back was confused about how rental properties are added to the pool of rentals in NZ. There is no way that return of tax deductibility can result in more development of rental properties.
Building/buying rental properties in the current market simply does not stack up, so we need to not expect for a lot of rentals to be built by the private sector. Rough numbers are simple. $300k land if you are lucky plus $450k to build a house (150sqm x $3000 per sqm build cost, again this is really conservative). So $750k for a new house, average rent is $650 per week. This gives us a gross yield of 4.5%. Interest rates are 7%. Who in their right mind would invest in a rental returning 4.5% gross (this is before insurance which has increased 17% and rates that also grow double digits year on year). Plus property management costs, plus vacancies and property management fees. Net yield 4% or less? There is no amount of tax deductibility that will make this an attractive investment. The only entity that can continue building for rent in this climate is the government or private developers in partnership with government where some sort of commercial return can be underwritten by the government, in my opinion.
It makes sense if you can sell it in 20 years for a cool tax-free 3 mil (or whatever it'll be worth by then).
"If" being the operative word 😃. What if it's worth $500k in 20 years?
After reading about the eco houses I have had an idea. What if a large piece of land was sold in pieces of block chain. The land was owned by those who owned those pieces of block chain and those pieces could be sold and bought individually. That deals with the problem of the cost of the land. That separates the land from the houses. Then other people could build their houses on the land. That would reduce the price of the houses. The banks should be able to provide mortgages for those houses. An idea?
This is a comment from my nephew in London about my idea.
“I agree that a communal garden or communal land does do so much for a community, because it is those impromptu encounters that these types of spaces facilitate, and as a result, generate a greater sense of belonging and livelihood for residents. Here in London around the garden square, we have a whatsapp group with over 180 residents on there, and so much happens as a result of that, from social gatherings both in the garden and at eachothers' apartments, to coffees down the road at the local cafe, to finding new rental accommodation for tenants when theyre turfed out because of rising rents. I've developed several close friendships as a result of the communal garden!!
Given blockchain is all about peer-to-peer and removing the middle men, it certainly lends itself very well to community driven investing, crowd funding, and social causes, so there is definitely something in what you are suggesting. I think the leasehold / freehold suggestion is very novel, and something we need to unpack more...
Ironically, this dismal poll for the Coalition will strengthen the resolve of all ministers to play safe. This especially applies to the leaders. As David Seymour quoted yesterday on TVNZ: ‘ the coalition has never been stronger’
Please open this to the public. They should all understand that this Govt is a train wreck. And it doesn't have to be like this. It feels as if we are losing hope, both in democracy and in the rule of international law. Watching the brutality of the police in the US arresting protestors is just appalling. Land of the Free? Nope, I don't think so.
Kathy, I felt sick watching US police, 2 or 3 at a time jump on top of, and grind into the ground, a woman of my age, who was extrmemely upset at their man-handling of a student. She was roughed up for attempting to intervene. Tg for our coppers trained to de-escalate (in similar circs, or so I assume?), rather than escalate a tense situation.
"Land of the free" never. I can remember 4 May 1970 Kent State University Allison Krause and 3 other students shot dead on campus by the National Guard for protesting.
It's absolutely hideous in every way! We will never forget and we must keep protesting and even better, boycott and divest.
I worry that the poll result will stop Winston pulling the plug and going for an early election, the circus might be here for the whole three years
Record rents! https://www.rnz.co.nz/news/national/515532/rents-at-an-all-time-high-trade-me-index-shows
I'm so excited! You said the words 'Westport' and 'South Dunedin' - so you know we're here! We've been discovered. Gosh I'm happy :-)
The phrase “invented fiscal crisis” (in podcast) should get a lot more airtime. Part of the “shock doctrine” Naomi Klein coined is the use of crisis to justify drastic neo-liberal reforms.
But the crisis doesn’t need to be real, just instilled. The government has created the sense of crisis needed to justify the ideologically driven reforms they want to pass. And by talking and acting as though there is a crisis, they are creating one. Albeit, one their own ideological policy preferences are ill-equipped to address.
Nicola Willis is a total shock doctrine acolyte. She was yelling doom and disaster as soon as they gave her the office key.
Giving her the office keys was a disaster
She was yelling it since August 2023, it wasn’t true then and isn’t true now. I have not seen anyone attempt to hold her to account for various past statements on this topic, be interested if there is any such journalism out there.
They've purposely (or inadvertently) tanked the economy through their negative rhetoric (mainly trying to pin the issues on the former govt.).
They haven't even really had to agree on anything of substance yet either, the fireworks will begin shortly regarding that.. Will be good viewing (trying to find a positive), but bad for New Zealand INC. I take zero responsibility for that :)
Nobody will take any responsibility for it. That’s why we’re in this mess. The only punishment for interest-conflicted “leaders” is to not be voted for next time. Instead, they’ll get a job in some government-affiliated agency or university.
Where to start... Luxon and the other smug ministers appear the very embodiment of HUBRIS Giganticus. Combined with their dogmatic idealogy, TINA and blind adherence to failed past policies (austerity,, trickle down) most of us will be worse off in short order - ready for some shock doctrine
And lets have less of this right-track-wrong-track talk. NAFs dont believe in tracks!, just (user pay) roads
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