Editors choice comments
The fact that MBIE is asking the general public via a submissions process whether or not the present regime (well, lack of it to be more functionally accurate in description) has the potential to damage NZs reputation overseas is a bit of a farce, isn't it? I mean aren't they - along with MFAT - in the best position to know?
For goodness sake, what is this lax regime costing the NZ taxpayer to investigate, follow up, coorperate with other authorities overseas, bring prosecutions, handle appeals, respond to and/or seek repatriation, incarcerate locally, and so on and so forth ...
We have an...
"... declines in interest rates over coming months....could only be consistent with the economy moving into recession. " Quite right. So those cheering on interest rate falls have to consider the implications of that. It doesn't matter what mortgage interest rate an unemployed worker is able to access.....If he can't get employment, he'll have to sell his house. I guess that's what Bill English was inferring with his plea to bankers to ease up on dairy farmers?
..don't forget about the cashed up New Zealanders..sitting waiting in the wings..there are quite a few out there..
many of us have been waiting for a while for land prices to reset..
Plenty of old age pensioners with money in the bank earning SFA after tax..scared of finance companies..we could do this if given the chance.
The Crafer farms were a prime example of what shouldn't have happened..those farms should have been split up..back to their original entities..and sold to new entrants....history shows this didn't happen..the bank(s) fought to preserve their liability and aided and abetted...by: Don m
So the chief gamblers/porkers are now beginning to see their next election win unwind as their own stupidity, dogma and denial starts to bite them and their core constituents. Meanwhile a drought will be so "unexpected" despite climate change saying otherwise that the tax payer will be asked to bail farmers out with ever more frequency, bye bye swing voter as well? can but hope, oh wait labour is no better....
"I must admit that English's comments make little sense" of course it doesnt, it only makes sense when the poor or those with no clout are the ones paying ie ppl who wont be voting...by: steven
Raising the stakes to double or nothing? Capitalise first year losses and hope that there aren't 3+ years of payouts below break even?
Can we look forward to National asking the banks not to sell Auckland houses if prices fall? Reminds me of Government intervention in the Chinese stock market at the moment.
by: Zombie ponzi
The whole notion of setting any time period that someone granted residency must stay in a certain region/town is stupid anyway. What are they going do .. arrest someone who moves? Revoke their residency status?
And who is going to enforce it? The police? NZ Immigration?
Just like none of the promises made under the OIO Act ever get followed up to see if the promises are fulfilled. It's all window dressing on the status quo.
This is pure speculative activity ............ and the profit is taxable under current legislation .......without question .
Anyone buying and almost immediately flicking property such as this should be well aware of his tax obligations
Re #1. It's funny how this has been turned into a race issue by the National spin doctors. I completely understand why a Chinese person or person from most other countries would want to buy land in New Zealand. The problem is not one of race, it is one of the current rules allowing non residents to purchase land (usually with the added issue of overseas credit).
As much as I despise bean counters, in a globalized world the term "residency" IS hard to define. There is residency for taxation purposes (easy to get) and residency for immigration purposes (hard to get). Usually residency is defined as the centre of life and that in turn is derived from where one's family is based. If you are single, then where your main workplace is etc. Ever read a double taxation agreement? Sheer hell.
At the same time, asking for a bank account and an IRD number should not trouble anyone and exchange of financial information on private persons among most OECD and other...by: PeterPen
Herein lie the problem with this government's approach to everything. They simply add to the cost of compliance because the legislation they propose is often not drafted with clarity of purpose. They are literally 'all over the place'.
Yesterday we had BE saying the purpose of the legislation was an anti money laundering initiative - yet I thought it was a revenue (tax) initiative. And then John Key proposes to use the data collected to provide an understanding of the level of foreign direct investment in our residential real estate. Whatever.. it won't don't any of them efficiently.
Perhaps, in the Interest of Squawklanders, we should run a sweep on when the median house price reaches the Magic Million Mark? After all, the less the cost of credit, the faster the bubble expands to at least some extent. So the odds shorten.....
One Million Dollars! We're Rich!
The inflation move back to near 2% by "early" 2016 is the surprise and may mean we only see a couple more cuts unless the NZD now runs away on the upside which is hard to see (or poor dairy auctions continue past year-end). NZD's up 50 points and swap rates up 5bps after the announcement. So bearing in mind no one would be floating in this environment with the gap between the short-term rates and floating favouring staying short, probably not much of an impact here for most mortgage borrowers.
by: Grant A
As an Auckland homeowner who has "made" about 70% in the last 2.5 years on his Auckland first-home, I'd much rather have made 10% and had a stable market than the situation we have now. It just means that when I come to move within Auckland I'll probably have to make a bigger leap than before finance-wise, so tying my income up more and for longer.
Seeing my friends trying to get into their first homes is pretty scary. Couples getting themselves into $800k mortgages for two decently-earning 30 year olds is manageable on paper, but then they want to have kids while they're still able and even...by: Esprit
You are absolutely spot on Greg. It is the mass of Chinese who are already here in Auckland and buying 3,4 or 5 homes for family, friends & businesses back home in China. NZ lawyers, bankers, mortgage brokers & realtors know all about who is buying but are making so much money from this Chinese explosion of Auckland house buying that they have a vested interest & will keep very quiet on it.
If you want to see how prevalant the Chinese are head down to the Barfoots auction room at 1pm today - you will think you are in little Ghangzhou!
"With respect to how that effects New Zealand, one of the requirements that is being passed at the moment is that people open a bank account in New Zealand and when they open a bank account they have to go through the anti- money laundering processes, so it would have the affect of filtering out any inflows of cash related to corrupt activity or activity that people wanted hidden as they won't be able to hide."
So the measure is a direct response to a directive from the PRC regarding our inadequate anti-money laundering regime, but aren't National couching it in terms of local tax collection...
Isn't this a standard Chinese trading practice. Over buy, build up surplus stock, then stop buying to collapse the market and maintain control over it. They have done it to us before eg wool, timber. The Australians have also probably been sucked in re steel and a lot of other commodities.
At best this enables then to keep a hold over the market and at worst (and a probable reality) it collapses the asset prices of farms, forests mines etc; making it easier for them to buy them after the poor western suckers have borrowed to the hilt chasing an illusory, over inflated market. It is a...by: Chris-M
Our naivety failed to factor in a demand collapse for re-hypothecated product creating exponential leverage financed by foreign bank lending post inevitable exposure and thus cessation, along with copper warehousing scams.
by: Stephen Hulme
Finally some sensible ideas concerning our rising house prices. Couldn't we simply decrease government subsidies in Auckland to reduce demand for housing here? Those who don't make enough to afford Auckland housing can probably find jobs that would increase their relative take home pay after housing cost in the regions where housing is cheaper. Subsidies outside of Auckland would serve as an incentive to move.
LGNZ: "Do you trust us, New Zealand?"
NZ Public : "Not one tiny bit!"
LGNZ: "Great! Give us more money".
It's only one year since Lawrence Yule shamefacedly revealed that the sector's public reputation is awful. How have they spent the last year, then? Not actually repairing that awful reputation, no. Dreaming up new ways to get more funding with less accountability.
by: Donald Ellis
If the government seriously wants to do something about this, in addition to the above they need to bring in the 2nd tranche of Anti-Money Laundering regulations to cover RE agents, lawyers, accountants etc and see how quickly the cheap hot money coming into the housing market dries up. They have dragged their feet on this for years, it was meant to have come in 2013. They have saddled banks, financial institutions etc with increased compliance cost and let these characters continue on their merry way. Lets see how many people then show up for auctions ready to pay millions in unaccounted...by: GS
Good article, but the predictions of a price fall, or even stabilisation, are going to be washed away by a flood of Chinese money, especially with the lack of serious stamp duty etc.
Remember with the fall of the Kiwi dollar these houses look relatively cheap to those desperate to get their money out of China, especially those who may get caught up in Chinese Govt corruption investigations
Somewhere in the 50's is coming our way.
Current NZ milk futures are showing up to 15% lower than the last GDT which was horrible just by itself.
Thursday's OCR could (should) show a 0.5% drop.
Perhaps the biggest story is the city-wide amount of CGT we might never collect in advance of the 'bright line' test being implemented.
These periods of low commodity price come round regularly
They do happen, however what is different this time is the cost structure of farming - and no it isn't just cost of land. Many farmers have owned their farms for years and have little or manageable debt. But you need cashflow to pay the bills. If you don't have cashflow you can't pay the bills - doesn't matter what your debt levels are.
by: Casual Observer
Local banker says they will capitalise interest for twelve months and then, unless the debtor can resume payments the bank will be asking for debt reduction ! Better sell that apartment in Queenstown now I'd say !
by: Colt 45