General New Zealand Politics

If there was an election today, who would you vote for?

  • National

    Votes: 7 11.7%
  • Labour

    Votes: 23 38.3%
  • Greens

    Votes: 6 10.0%
  • NZ First

    Votes: 2 3.3%
  • Act

    Votes: 11 18.3%
  • New Conservative Party

    Votes: 0 0.0%
  • Other

    Votes: 1 1.7%
  • None of then

    Votes: 10 16.7%

  • Total voters
    60

Miket12

Warriors 1st Grader
Apr 20, 2012
10,580
How much of the market is that?
The policy is only pretty recent and so the numbers are currently very few especially since they're still trying to sort out the teething problems. One estimate was that around a quarter of first home buyers will eventually use them.

There is around 110,000 house sales each year in NZ and, using the latest figures, 21% of those are to FHB. That would mean, the government would be approving between 5,500-6,000 share equity loans each year. Doesn't sound that many.... until you realise that's between 55,000-60,000 loans over ten years. If the average amount they loaned was 250K for $1 mill houses and the houses doubled in value before they were sold, just for the first years loans, that's $1.375 billion the government made without doing a thing. If those first year homes doubled in value and then doubled again, that's $4.125 billion in profit from the gain in the value of property if they were then sold in twenty years time.

However, if the house prices didn't double every ten years and say only rose 2.5% instead of 7.2% (average required for houses to double every ten years), the government's take drops to only $385 million after ten years and $880 million if the houses are sold after twenty years.

As you can see, it's in the governments best interests for the houses not to be sold but held on to as long as possible and for the housing inflation to be as high as possible even if only 5% of all houses sold use some money from share equity loans.
 
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wizards rage

1st Grade Fringe
Apr 18, 2016
4,851
Tauranga
Some key points in a study that tracks Maori economic and social indicators:
  • Life expectancy increased from mid 50s in 1951 to 73 for Maori males and 77 for Maori females
  • Child mortality dropped from 51% in 1886 to 1% today
  • Infant mortality dropped from 9% in 1945 to 0.5% today
  • TB rates has dropped from 13 per 100,000 in 1997 to 4 per 100,000
  • Cardiovascular disease mortality rates dropped from 700 per 100,000 in 1997 to 400 for Maori males
  • Heart failure mortality rates dropped from 22 per 100,000 in 1997 5 for Maori males
  • Daily smoking rates for 15 year olds down from 25% in 1999 for Maori males to 5% and from 35% to 10% for Maori females
  • Leaving school with no qualifications down from 40% in 2006 to 25%
Well done Maori!

The data brings up an interesting point – what is more important – the absolute improvement in outcomes, or the gap between racial groups?
 

Dixpat

All in the Brown stuff!
Contributor
Feb 3, 2014
1,762
Auckland
I heard a financier comment on house price increases in the Auckland market today and his take was that the cause was mainly due to the new Unitary Plan which allowed greater density housing on smaller sites.

A developer goes to auction with the knowledge that if he buys the property and knocks down the existing dwelling he could put say 4 or 5 apartments on that site and subsequently sell them to make a profit. His buying price depends on what margin he wants to make on the deal whereas the FHB‘s buying price is the value he sees in the property as it is presented.

In my L3 walks around our neighbourhood I have never seen as many cleared sections with multiple apartments being erected - the number is staggering relatively speaking
 

bruce

Warriors 1st Grader
Contributor
Sep 1, 2015
19,974
I heard a financier comment on house price increases in the Auckland market today and his take was that the cause was mainly due to the new Unitary Plan which allowed greater density housing on smaller sites.

A developer goes to auction with the knowledge that if he buys the property and knocks down the existing dwelling he could put say 4 or 5 apartments on that site and subsequently sell them to make a profit. His buying price depends on what margin he wants to make on the deal whereas the FHB‘s buying price is the value he sees in the property as it is presented.

In my L3 walks around our neighbourhood I have never seen as many cleared sections with multiple apartments being erected - the number is staggering relatively speaking
So if my math is correct...that should make it easier to buy an apartment? It doesn't seem to be happening yet...except for those rabbit holes in Nelson Street the new apartments are going off the plans.
 

Dixpat

All in the Brown stuff!
Contributor
Feb 3, 2014
1,762
Auckland
So if my math is correct...that should make it easier to buy an apartment? It doesn't seem to be happening yet...except for those rabbit holes in Nelson Street the new apartments are going off the plans.
There is a development on the North Shore where the real estate sign advertises the apartments as being “from $495000”
 
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dean

1st Grade Fringe
Mar 13, 2016
1,344
There is a development on the North Shore where the real estate sign advertises the apartments as being “from $495000”
That will be for a small apartment, probably 40sqm which I think is the smallest banks will lend on with a 20% deposit. The general sqm rate for apartments of average quality and fit out used to be $10,000 per sqm, but that would be going up weekly in this supply chain disrupted market.
 

bruce

Warriors 1st Grader
Contributor
Sep 1, 2015
19,974
That will be for a small apartment, probably 40sqm which I think is the smallest banks will lend on with a 20% deposit. The general sqm rate for apartments of average quality and fit out used to be $10,000 per sqm, but that would be going up weekly in this supply chain disrupted market.
Those might be the Chinese developments at Albany?
 

Miket12

Warriors 1st Grader
Apr 20, 2012
10,580
That will be for a small apartment, probably 40sqm which I think is the smallest banks will lend on with a 20% deposit. The general sqm rate for apartments of average quality and fit out used to be $10,000 per sqm, but that would be going up weekly in this supply chain disrupted market.
Apartments like Pacifica and SeaScape are currently selling at $20-25K per sq. metre. The developer of The International (the old Fonterra building) went bankrupt a few years ago selling his at $18-20K per sq. metre. Apartments on the higher levels of the Precinct (an older building on edge of Albert Park) are reselling between $15-20K per sq. metre.
 
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dean

1st Grade Fringe
Mar 13, 2016
1,344
Apartments like Pacifica and SeaScape are currently selling at $20-25K per sq. metre. The developer of The International (the old Fonterra building) went bankrupt a few years ago selling his at $18-20K per sq. metre. Apartments on the higher levels of the Precinct (an older building on edge of Albert Park) are reselling between $15-20K per sq. metre.
Show's how out of touch I am with pricing. Those smaller apartments in older well built buildings represent good buying when compared to replacement costs. The problem is getting finance and lack of parking.
 
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Miket12

Warriors 1st Grader
Apr 20, 2012
10,580
Show's how out of touch I am with pricing. Those smaller apartments in older well built buildings represent good buying when compared to replacement costs. The problem is getting finance and lack of parking.
Personally, if i was shifting into an apartment, I'd want it to have a bit of Body Corporate information to look at to see what maintenance had been done, what was planned and how much the BC wanted (if anything) in the way of contributions to future work and how much in the way of funds had already been gathered. I wouldn't be keen on any building or conversation less than 8-10 years old.

There are some really good prices at the moment for leasehold properties on the waterfront ATM but the cost of the ground lease can be quite high and some banks require even higher deposits for leasehold apartments than freehold because of their tendency to depreciate in value rather than go up.
 
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Miket12

Warriors 1st Grader
Apr 20, 2012
10,580

Property Council opposes 660% development contribution rise at Drury​


The Property Council is opposing Auckland Council's 660 per cent development contribution rise proposal at Drury and will today present its arguments against that.

Developers will have to pay that much more to create thousands of new homes, commercial and retail buildings and projects in the fast-expanding south Auckland corridor of greenfields development.

Natalia Tropotova, Property Council senior advocacy adviser, said the fee rise proposal was "of serious concern", particularly the precedent for the rest of the Auckland region and her entity will today present against it.

Auckland Council has indicated Drury is first but other areas will follow and the steep rise is to fund infrastructure to allow development to occur.

Council financial policy manager Andrew Duncan says Drury developers now paid development contributions of $11,000 to $18,300 per new residence. But under a proposal, those could rise 360 per cent to 660 per cent to $84,500 per residence.

Tropotova said council staff had admitted that the proposed draft development contribution policy could force house prices up even further.

"Should the proposed up to 660 per cent fee rise for Drury developers to fund the infrastructure needed to go ahead, this is bound to materially affect house prices over time," she told Property Council members today.

That was concerning given the current housing crisis and the Government's strategy to provide affordable housing, she said.

"It also contradicts...the Auckland Plan which refers to the shift to a housing system that ensures secure and affordable homes for all. We question why the council has not provided enough data and the model they used to justify the proposed increases," she said.

The council is today running a "have your say" event in the new fees. The Property Council will have its say there, presenting with independent economist Greg Akehurst.

He will point out highly concerning gaps in data the council is using and their choice to lack transparency with their assumptions, Tropotova said.

"Historic underinvestment in infrastructure should not be viewed as a growth cost. Council needs to make better use of alternative funding and financing tools," she said, citing user charges like water charges and congestion charging, targeted rates, public-private partnerships and special purpose vehicles.

"Budget overruns should not lead to increases in development contribution fees," she said.

The Property Council was concerned proposing to apportion costs to developers today for projects that were not going to be built in the medium term.

Auckland Council should also take into consideration significant increases of construction costs, land value, building materials costs, the impact of the latest lockdown in Auckland as well as the broader impact of key reforms, she said.

Finance and performance committee chair Desley Simpson said it was important to keep an open mind about the proposed fee rise.

"There is exponential housing growth in Auckland and we've seen the devastating impacts of failing to plan ahead for infrastructure in other regions across the country.

"Contributions are one of the ways the council recovers the cost of essentials like stormwater and transport infrastructure as well as parks and community facilities. This infrastructure needs to be funded one way or another - either by the developer, the ratepayer or the taxpayer. The question is, what is the appropriate share for developers to pay," Simpson said last month.

Developers have also opposed the big fee rise.

Charles Ma of the new Auranga said his business was happy to pay its share of growth-related infrastructure costs in Drury West but the development contribution fee hike being put forward for finance and performance committee to examine this week was unfair and too selective.

"This is worrying as it lacks substance and is being forced on those of us who have already paid our fair share. It's shocking and disappointing," he said.

The new Auranga township had tens of millions of dollars invested in it by Ma's company, MADE.

He said the 660 per cent Drury rise was wrong because it targeted only that area specifically yet costs should be spread right across the city.

Ma's MADE had volunteered early investments as essential amenities for the new Auranga "and the promise we've made to our growing community".

 
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dean

1st Grade Fringe
Mar 13, 2016
1,344
Personally, if i was shifting into an apartment, I'd want it to have a bit of Body Corporate information to look at to see what maintenance had been done, what was planned and how much the BC wanted (if anything) in the way of contributions to future work and how much in the way of funds had already been gathered. I wouldn't be keen on any building or conversation less than 8-10 years old.

There are some really good prices at the moment for leasehold properties on the waterfront ATM but the cost of the ground lease can be quite high and some banks require even higher deposits for leasehold apartments than freehold because of their tendency to depreciate in value rather than go up.
I wouldn't touch a leasehold property. The body corp maintenance plan and sinking fund are essential parts of due diligence.
I have owned an apartment in the CBD since new in 2004. Very well constructed concrete building built by top construction company and a very well managed BC by Crockers.
 
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Dixpat

All in the Brown stuff!
Contributor
Feb 3, 2014
1,762
Auckland
The following are details from a current development I have a reasonable knowledge of as I’m involved in some of the funding.

All $ figures are accurate, though rounded to nearest $5,000, except any figure that is notated with (M) which indicates it is my assessment

Property Purchased: 3 brm 87m2 dwelling on 605m2 section in Conifer Grove

Development: 4 x 2 storey 4 brm townhouses

$$
Property purchase: $585,000 [Sep 2020]
Holding cost [12 mths]: $75,000 (M)
Fixed cost build contract: $1,715,000
Architect & Geo tech costs: $50,000 (M)
Development funding costs: $300,000
Total cost $2,725,000

Required unit selling price to cover project costs: $681,250 say $690,000

If the sell cost is at least $10,000 per m2 as suggested earlier in this thread then the price per unit would be $1.195m giving the developer a pre-tax profit of $2.05m

Anyone want to join a syndicate? ;);););)
 

Miket12

Warriors 1st Grader
Apr 20, 2012
10,580
bruce bruce, not about the government benefiting from shared equity loans like I posted yesterday, but here's some more information on how the government's accounts are increasing due to the rises in property values. Interesting that none of the changes since the election have really been designed to hurt or blame them yet look how much they've benefited:

Surplus inches closer as Government books billions of dollars on rising property values​


A rebounding economy, generating nearly $100 billion in tax revenue, helped the Government's Covid-battered books edge closer to surplus this year.

In fact, if you include the tens of billions of dollars of gains the Government made on all the property and shares it owns last year, it booked a $16.1b surplus, the biggest since it took office in 2017.

The Government opened its books on Wednesday, revealing a deficit of just $4.6b, measured by OBEGAL, the most commonly used metric, which looks mainly at the difference between the money coming into its coffers through tax, and going out again via spending.

That deficit was ten billion dollars shy of the $15.1b that Treasury wonks had forecast at the May Budget. The surplus is also well down on the massive $23.1b deficit the Government booked last year.

That brings the Government's net core debt to $102.1b or 30.1 per cent of GDP, well down on the $113.7b Treasury was forecasting in May.

Finance Minister Grant Robertson said the books reflected both the debt the economy took on during the pandemic to put the economy in hibernation - and the economic rebound that ensued once the immediate risk of Covid-19 was dealt to.

"The decisions we made during last year's Covid outbreak with economic support and health measures meant the economy bounced back better than almost anyone predicted," Robertson said.

As always, there are a few catches to the numbers. For a start, the accounts take in the Government's 2020/21 year, which ended on June 30, 2021.

That means they do not include any of the costs of the most recent Covid outbreak - Robertson acknowledged this, saying he was "tempted" to say the accounts were from "once upon a time in a land far, far away".

The most recent estimate of the cost of the Delta outbreak includes a $3.9b cost of business support like the wage subsidy and the as yet unknown cost of lower tax revenue and higher social expenses.

The story before the Delta outbreak was quite positive for the Government and the wider economy.

As the economy rebounded last year, the Government raked in $97.9b in tax revenue, $12.9b more than the year before. The Government's revenues were even up on 2019, the year before the pandemic hit, topping them by over $10b.

Expenses were up, hitting $107.7b. Expenses were lower than expected, and lower than last year, but only by about $1b.

Superannuation expenses are up by $1b, as more people reach the age of eligibility. Overall, the money spent on social security and welfare was about $7b lower this year, thanks to less money being spent on wage subsidies and other benefits.

Looking more broadly, the accounts hold a mirror up to the Government, reflecting its role in the economy: both positive and negative.

The Government booked billions of gains from a booming property and share markets. Like many home-owning households, the Government is now significantly wealthier than it was before the pandemic.

The Government's net worth - that means everything the Crown owns, minus everything it owes - is now $151.4b, a huge $41b increase on where it was a year ago.

But the Government is not just wealthier than it was in the middle of 2020, when the pandemic blew a hole through its finances, it is also wealthier than it was in 2019, when net worth stood at $136.9b.

The reason for this is largely thanks to a booming sharemarket, which helped to boost the value of the Government's two big investment funds: ACC and the Super Fund, which grew by $17.2b over the last year.

But the even bigger winner was the Government's investments in physical assets, like property.

The Government's property, plant and equipment assets increased in value by an astonishing $26.7b

This was largely thanks to an increased value of land and buildings, which were revalued upwards by about 30 per cent.

This fiscal alchemy means that if you include the change in how much the Government is worth, it actually posted a $16.1b surplus, however that measure is not the most widely used measure of the Government's books from year to year because analysts prefer to focus on tax revenues and expenses, rather than the yoyoing value of assets.

 
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dean

1st Grade Fringe
Mar 13, 2016
1,344
The following are details from a current development I have a reasonable knowledge of as I’m involved in some of the funding.

All $ figures are accurate, though rounded to nearest $5,000, except any figure that is notated with (M) which indicates it is my assessment

Property Purchased: 3 brm 87m2 dwelling on 605m2 section in Conifer Grove

Development: 4 x 2 storey 4 brm townhouses

$$
Property purchase: $585,000 [Sep 2020]
Holding cost [12 mths]: $75,000 (M)
Fixed cost build contract: $1,715,000
Architect & Geo tech costs: $50,000 (M)
Development funding costs: $300,000
Total cost $2,725,000

Required unit selling price to cover project costs: $681,250 say $690,000

If the sell cost is at least $10,000 per m2 as suggested earlier in this thread then the price per unit would be $1.195m giving the developer a pre-tax profit of $2.05m

Anyone want to join a syndicate? ;);););)
$10k was relating to high rise apartments. Looks like a very profitable project.
 
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Rizzah

Stop Being Shit
Contributor
Apr 18, 2012
5,219
Dunedin, NZ
bruce bruce, not about the government benefiting from shared equity loans like I posted yesterday, but here's some more information on how the government's accounts are increasing due to the rises in property values. Interesting that none of the changes since the election have really been designed to hurt or blame them yet look how much they've benefited:

Surplus inches closer as Government books billions of dollars on rising property values​


A rebounding economy, generating nearly $100 billion in tax revenue, helped the Government's Covid-battered books edge closer to surplus this year.

In fact, if you include the tens of billions of dollars of gains the Government made on all the property and shares it owns last year, it booked a $16.1b surplus, the biggest since it took office in 2017.

The Government opened its books on Wednesday, revealing a deficit of just $4.6b, measured by OBEGAL, the most commonly used metric, which looks mainly at the difference between the money coming into its coffers through tax, and going out again via spending.

That deficit was ten billion dollars shy of the $15.1b that Treasury wonks had forecast at the May Budget. The surplus is also well down on the massive $23.1b deficit the Government booked last year.

That brings the Government's net core debt to $102.1b or 30.1 per cent of GDP, well down on the $113.7b Treasury was forecasting in May.

Finance Minister Grant Robertson said the books reflected both the debt the economy took on during the pandemic to put the economy in hibernation - and the economic rebound that ensued once the immediate risk of Covid-19 was dealt to.

"The decisions we made during last year's Covid outbreak with economic support and health measures meant the economy bounced back better than almost anyone predicted," Robertson said.

As always, there are a few catches to the numbers. For a start, the accounts take in the Government's 2020/21 year, which ended on June 30, 2021.

That means they do not include any of the costs of the most recent Covid outbreak - Robertson acknowledged this, saying he was "tempted" to say the accounts were from "once upon a time in a land far, far away".

The most recent estimate of the cost of the Delta outbreak includes a $3.9b cost of business support like the wage subsidy and the as yet unknown cost of lower tax revenue and higher social expenses.

The story before the Delta outbreak was quite positive for the Government and the wider economy.

As the economy rebounded last year, the Government raked in $97.9b in tax revenue, $12.9b more than the year before. The Government's revenues were even up on 2019, the year before the pandemic hit, topping them by over $10b.

Expenses were up, hitting $107.7b. Expenses were lower than expected, and lower than last year, but only by about $1b.

Superannuation expenses are up by $1b, as more people reach the age of eligibility. Overall, the money spent on social security and welfare was about $7b lower this year, thanks to less money being spent on wage subsidies and other benefits.

Looking more broadly, the accounts hold a mirror up to the Government, reflecting its role in the economy: both positive and negative.

The Government booked billions of gains from a booming property and share markets. Like many home-owning households, the Government is now significantly wealthier than it was before the pandemic.

The Government's net worth - that means everything the Crown owns, minus everything it owes - is now $151.4b, a huge $41b increase on where it was a year ago.

But the Government is not just wealthier than it was in the middle of 2020, when the pandemic blew a hole through its finances, it is also wealthier than it was in 2019, when net worth stood at $136.9b.

The reason for this is largely thanks to a booming sharemarket, which helped to boost the value of the Government's two big investment funds: ACC and the Super Fund, which grew by $17.2b over the last year.

But the even bigger winner was the Government's investments in physical assets, like property.

The Government's property, plant and equipment assets increased in value by an astonishing $26.7b

This was largely thanks to an increased value of land and buildings, which were revalued upwards by about 30 per cent.

This fiscal alchemy means that if you include the change in how much the Government is worth, it actually posted a $16.1b surplus, however that measure is not the most widely used measure of the Government's books from year to year because analysts prefer to focus on tax revenues and expenses, rather than the yoyoing value of assets.

That's a pretty phenomenal result for treasury.
Shithouse for the housing market and anyone renting.
 
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Rizzah

Stop Being Shit
Contributor
Apr 18, 2012
5,219
Dunedin, NZ
Reading Hickey's take it looks like the govt is cuffed to not really fuck with the status quo.

Our economy and society truly is a housing market with bits tacked on. No matter where you turn, the fortunes of the Government, businesses, families and institutions depend on house prices rising constantly, or at least not falling.
For example, the ratcheting up of land prices and the rules in the Public Finance Act (1989) forcing the Government to run surpluses and reduce debt in all but the most extreme situations, have created an institutional bias towards never freeing up public land for mass house building. Any attempts to sell land to developers or to account for its use in house building means that land prices keep ratcheting higher. Eg. Treasury won’t sell land to developers to build affordable houses at below market rates because it’s not allowed to under the PFA, which perpetuates land shortages that drive prices ever higher. This was a major factor hobbling KiwiBuild.
Those rising prices benefit the personal (and often small business finances) of home owners who vote, the Government’s finances, and the Reserve Bank’s monetary policy aims. None of them are actually serious about improving housing affordability because it would stop the politicians from meeting their political aims (to win more median voters than the other main party) and stop the officials from meeting their legislative obligations (to keep debt low, interest rates low and Crown net worth rising)

Hence, rinse and repeat.
 

Miket12

Warriors 1st Grader
Apr 20, 2012
10,580
Reading Hickey's take it looks like the govt is cuffed to not really fuck with the status quo.
That's part of the reason for the changes to target private landlords... the government is seen to be doing something while deflecting attention away from themselves.

That said, I'm actually very much in favour for rent increases to be legislated to the rate of inflation with one rental increase each year i.e. 1st of April each year, the government announces the percentage increase that is the maximum that can occur within the next twelve months. Make it so that increase can only occur within that year and not added on to the following year's increase... the landlord has to use it or lose it.

When a new tenant comes in, yes the rent can be set at what is agreed upon but can't be increased within the first year. The only time a rental increase should be able to be above the rate of inflation is to cover government mandated capital expenses such as meeting the latest Healthy homes standard and then the increase added so that the capital cost is spread over say four years rent. The landlord will have to justify that increase to the tenant who can appeal it to the Tenancy tribunal if they think it's been unfairly calculated.

Say the landlord has to, in the future, install a solar system as required by the government and the cost for the system is $5,000. That's $1,250 PA when divided over four years so the landlord can increase the rent by a maximum of $24 PW to cover the installation of the system. That's in addition to the annual inflation adjusted increase. Remembering that, in the example of a solar system, the tenant would be paying less for their power each month anyway.
 
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