Politics 🗳️ NZ Politics

Highlights Only (8)
miket12 said:
Will, the nickname for Auckland wasn't changed from the "City of Sails" to the "City of Cones" for no reason. Every time you think they've finished, something else starts.
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I feel like a lot of cities would consider themselves the City of Cones these days 😅
 

Tony Alexander: 16 reasons why it’s all over for mum-and-dad property investors​


ANALYSIS: Speaking in front of a parliamentary select committee last week, following the Monetary Policy Statement and cash rate review, the Reserve Bank noted that there has been a structural change in the housing market. This was couched in terms of the higher supply now coming forward following numerous rule changes in recent years.

I’ve approached this over the past couple of years by discussing a structural shift in house production measured as consents versus population. Since 1973, this ratio has averaged 0.65% with a peak of 1.3% in 1973 when 40,000 consents were issued while the population was three million. The low was 0.31% in 2011 post-GFC.

Recently, despite all the economic pain over the past 3-4 years, this ratio only fell to a low of 0.63% and is now already back at 0.69%. We are producing more houses, and that is great for the suppression of price growth and housing affordability.

But I have also focused in recent months on the shift in the investor landscape. Costs of running a rental property have increased, bank credit availability has declined, tax rules have altered, tenants are in short supply, and increasingly, people’s expectations of capital gains are shrinking.

In my weekly publication last week (available at www.tonyalexander.nz) I produced a list of reasons why the rush of average mum-and-dad investors into housing, which started in the mid-1990s, has now eased. Many investors with professionalism, skills, and large portfolios will definitely remain. But the feelings of FOMO, which drove so many less sophisticated people to buy whatever they could get their hands on, have gone.

For your interest, here is that list:

1. Debt-to-income and loan-to-value ratio rules now restrict investor access to funding.

2. Property losses are now ring-fenced away from normal household income for tax purposes.

3. Depreciation allowances have been reduced.

4. There are much higher costs of running a rental property, including council rates, insurance, maintenance, and meeting Healthy Homes requirements.

5. Rule changes have favoured tenants.

6. There is an absence of the structural lift in net migration flows seen in the 1990s.

7. Rule changes restrict foreign buying to Australians and Singaporeans for all but the most expensive houses.

8. There is an absence of downwardly trending interest rates, which prevailed from 1992 to 2021.

9. There are fewer new official exhortations to invest and prepare for retirement than proliferated in the 1990s.

10. There is increased availability of residential zoned land.

11. There is increased construction of dwellings, especially townhouses, courtesy of new density rules.

12. Awareness of alternative investments to prepare for retirement has lifted, including KiwiSaver and managed funds generally.

13. A multi-year period is now underway of older investors selling investment properties to fund their retirement.

14. Extra selling is being undertaken by older investors as retirement is proving to be much more expensive than anticipated (rates, food, insurance, electricity etc).

15. There are commonly reduced expectations for long-term capital gains.

16. Expectations/fears are growing of tax on capital gains eventually coming in, and interest expense deductibility once again being removed.

New Zealand’s housing market is well into the process of shifting back to primarily focusing on the needs of owner-occupiers. However, because so many people currently rent and because house prices will remain high relative to incomes, the demand for rental accommodation is going to stay at higher levels than seen previously for a great number of years.

Providing this required accommodation will increasingly fall to professional property investors rather than average Kiwis.
 
wizard of Tauranga said:

Tony Alexander: 16 reasons why it’s all over for mum-and-dad property investors​


ANALYSIS: Speaking in front of a parliamentary select committee last week, following the Monetary Policy Statement and cash rate review, the Reserve Bank noted that there has been a structural change in the housing market. This was couched in terms of the higher supply now coming forward following numerous rule changes in recent years.

I’ve approached this over the past couple of years by discussing a structural shift in house production measured as consents versus population. Since 1973, this ratio has averaged 0.65% with a peak of 1.3% in 1973 when 40,000 consents were issued while the population was three million. The low was 0.31% in 2011 post-GFC.

Recently, despite all the economic pain over the past 3-4 years, this ratio only fell to a low of 0.63% and is now already back at 0.69%. We are producing more houses, and that is great for the suppression of price growth and housing affordability.

But I have also focused in recent months on the shift in the investor landscape. Costs of running a rental property have increased, bank credit availability has declined, tax rules have altered, tenants are in short supply, and increasingly, people’s expectations of capital gains are shrinking.

In my weekly publication last week (available at www.tonyalexander.nz) I produced a list of reasons why the rush of average mum-and-dad investors into housing, which started in the mid-1990s, has now eased. Many investors with professionalism, skills, and large portfolios will definitely remain. But the feelings of FOMO, which drove so many less sophisticated people to buy whatever they could get their hands on, have gone.

For your interest, here is that list:

1. Debt-to-income and loan-to-value ratio rules now restrict investor access to funding.

2. Property losses are now ring-fenced away from normal household income for tax purposes.

3. Depreciation allowances have been reduced.

4. There are much higher costs of running a rental property, including council rates, insurance, maintenance, and meeting Healthy Homes requirements.

5. Rule changes have favoured tenants.

6. There is an absence of the structural lift in net migration flows seen in the 1990s.

7. Rule changes restrict foreign buying to Australians and Singaporeans for all but the most expensive houses.

8. There is an absence of downwardly trending interest rates, which prevailed from 1992 to 2021.

9. There are fewer new official exhortations to invest and prepare for retirement than proliferated in the 1990s.

10. There is increased availability of residential zoned land.

11. There is increased construction of dwellings, especially townhouses, courtesy of new density rules.

12. Awareness of alternative investments to prepare for retirement has lifted, including KiwiSaver and managed funds generally.

13. A multi-year period is now underway of older investors selling investment properties to fund their retirement.

14. Extra selling is being undertaken by older investors as retirement is proving to be much more expensive than anticipated (rates, food, insurance, electricity etc).

15. There are commonly reduced expectations for long-term capital gains.

16. Expectations/fears are growing of tax on capital gains eventually coming in, and interest expense deductibility once again being removed.

New Zealand’s housing market is well into the process of shifting back to primarily focusing on the needs of owner-occupiers. However, because so many people currently rent and because house prices will remain high relative to incomes, the demand for rental accommodation is going to stay at higher levels than seen previously for a great number of years.

Providing this required accommodation will increasingly fall to professional property investors rather than average Kiwis.
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While I find myself agreeing with a lot the Tony says, there's one huge reason why Mum and Dad investors will continue to invest in rental properties... gearing.

Say M&D have $200,000 to invest so they put it into a managed fund which, after taxes and fees, earns them 6.4% PA. In 25 years time, their investment has grown, without them putting any more money in and with compounding interest, to just over $985,000... take of their initial deposit and they walk away with just over $785,000 net gain.

Instead, M&D use the $200,000 as a deposit on an investment property worth $1,000,000 - they borrow $800,000 for the same 25 year period. It goes up in value at only 2.88% PA (and historically houses have risen by more than that) and doubles in value in the 25 years it's taken for their tenants to pay off the mortgage. So, after 25 years, they sell it for $2,000,000.

Take off their $200,000 deposit, and they've made a net gain of $1,800,000. Even with a 33% capital gains tax (if one was in place) and they've still walked away with $1,200,000 in their hands.... or $415,000 more than if they'd put the money into a managed fund with over twice the return each year.

Until a government says that an investment property can only be purchased with something like a 50% deposit (and certainly not using equity already in an existing property), investing in property will always be attractive.... even with a CGT and a small gain in the value each year.
 
miket12 said:
While I find myself agreeing with a lot the Tony says, there's one huge reason why Mum and Dad investors will continue to invest in rental properties... gearing.

Say M&D have $200,000 to invest so they put it into a managed fund which, after taxes and fees, earns them 6.4% PA. In 25 years time, their investment has grown, without them putting any more money in and with compounding interest, to just over $985,000... take of their initial deposit and they walk away with just over $785,000 net gain.

Instead, M&D use the $200,000 as a deposit on an investment property worth $1,000,000 - they borrow $800,000 for the same 25 year period. It goes up in value at only 2.88% PA (and historically houses have risen by more than that) and doubles in value in the 25 years it's taken for their tenants to pay off the mortgage. So, after 25 years, they sell it for $2,000,000.

Take off their $200,000 deposit, and they've made a net gain of $1,800,000. Even with a 33% capital gains tax (if one was in place) and they've still walked away with $1,200,000 in their hands.... or $415,000 more than if they'd put the money into a managed fund with over twice the return each year.

Until a government says that an investment property can only be purchased with something like a 50% deposit (and certainly not using equity already in an existing property), investing in property will always be attractive.... even with a CGT and a small gain in the value each year.
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Agree but cashflow ultimately is king and we saw the market crash and investors pull out last time Labour was in charge and actively make it unviable.

Bank won’t even lend if the viability is way out of alignment.

The left will love the corporates taking over - guaranteed rent increases every year and minimal maintenance.


And before everyone says but we need more investment in business instead of property, yes but property underpins 90% of small business investment in NZ.
 
If you needed anymore proof that NZTA is such an inept organisation it couldn't organise the preverbal piss up at a brewery, consider this.

Over the next few nights, the Lantern Festival is being held at the Manukau Sports Bowl... which will have no onsite parking meaning everyone will be parking on the surrounding streets. For those who don't know it, the MSB is located between two bridges over the Southern Motorway.... one, of which, at Te Irirangi Drive is also an on ramp/off ramp to the motorway. The festival always causes gridlock around those two bridges.

A few kilometers further south is the Redoubt Road motorway bridge which is also the junction where the south eastern traffic and south western traffic all join the southern motorway. All the traffic which can't use the other two bridges because they are avoiding the festival, will be heading for Redoubt Road bridge.

But, NZTA, in their wisdom, are shutting down the Redoubt Road at the same time as the festival to reseal the bridge so all the traffic which then would have used the other two bridges can't.

They'll all head one bridge further south to Orams Road... a small two lane bridge which will then be expected to have the two lanes from the Reagan Road bridge, four from Te Irirangi Drive and the four from Redoubt Road all attempt to get across a two laned bridge.

Brilliant!!! Bloody brilliant!!!!
 
miket12 said:
If you needed anymore proof that NZTA is such an inept organisation it couldn't organise the preverbal piss up at a brewery, consider this.

Over the next few nights, the Lantern Festival is being held at the Manukau Sports Bowl... which will have no onsite parking meaning everyone will be parking on the surrounding streets. For those who don't know it, the MSB is located between two bridges over the Southern Motorway.... one, of which, at Te Irirangi Drive is also an on ramp/off ramp to the motorway. The festival always causes gridlock around those two bridges.

A few kilometers further south is the Redoubt Road motorway bridge which is also the junction where the south eastern traffic and south western traffic all join the southern motorway. All the traffic which can't use the other two bridges because they are avoiding the festival, will be heading for Redoubt Road bridge.

But, NZTA, in their wisdom, are shutting down the Redoubt Road at the same time as the festival to reseal the bridge so all the traffic which then would have used the other two bridges can't.

They'll all head one bridge further south to Orams Road... a small two lane bridge which will then be expected to have the two lanes from the Reagan Road bridge, four from Te Irirangi Drive and the four from Redoubt Road all attempt to get across a two laned bridge.

Brilliant!!! Bloody brilliant!!!!
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It is unbelievable how these morons can still be active and supported by council or Govt. Not sure which it is.

Surely there must be some authority that can can skin them and put people in there with a modicum of practicality?
 
Zombie neolib economics.

Parasite indeed

"It's a long hangover for the airline industry. What Seymour won't mention is that Air NZ paid back it's COVID loans. Qantas, which has just declared a profit did not."

1772076772653.webp
 
MaybeTop8 said:
Zombie neolib economics.

Parasite indeed

"It's a long hangover for the airline industry. What Seymour won't mention is that Air NZ paid back it's COVID loans. Qantas, which has just declared a profit did not."

View attachment 15927
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Nah, Capitalist common sense. When Air NZ shit the bed with Ansett, I bought a mega bunch of shares for $0.08c each. I mean, which politician in their right mind would let the national carrier go to the wall. Auntie Helen obliged.

Won't tell you what I sold for, don't want to be responsible for any cardiac issues.

Capitalism works, even for the poor.
 
MrFrankWhite said:
Winnie or Waititi?

Seriously though he's old asf, needs to call it day and go out with his last bit of dignity.
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He should have called it a day years ago, he would have been remembered fondly for the gold card and an advocate for grey power. Sadly will be remembered as a shit stirrer and a handbrake for many governments he’s been apart of, and the never ending grievances he takes to court on the taxpayer of course. Being a lawyer by trade, it’s probably some nostalgia for him. He departed from national many years ago now but still the same egomaniac
 
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