Here's our summary of key economic events overnight that affect New Zealand, with news it is risk-off today in international markets and the New Zealand dollar has been rated sharply lower.
The latest weekly Johnson Redbook tally of American retail sales shows them stumbling along with the same month-on-month pullback. They are up year-on-year but that is only because the pandemic retreat was biting in 2020. The 2021 retail impulse is not helping their recovery, and there is no sign those stimulus payments are boosting retail activity yet.
Likewise, new home sales in the US are falling away, even if it is off a very high period.
But as we have seen in other recent factory surveys, the latest one from the Richmond Fed is very positive. It is expanding at 'normal' levels with good new orders reported and expected. But like other surveys, they are also seeing a sharp spike in the cost of inputs. Inflating input costs are now nationwide.
The Fed boss is testifying before Congress today and acknowledged inflation is rising. But he also said in response to questions it is likely to be temporary and won't get out of hand. He is more focused on getting a full economic recovery than short term price impacts. Janet Yellen is also testifying as Treasury Secretary. She is saying more needs to be done and that a big push in infrastructure spending is needed, as much a US$3 tln. On top of the already approved $1.9 tln stimulus, that has bond markets worried.
In Taiwan there has been a turnaround in their data with retail sales rising (+13%) and a softening of industrial production (+3%), both on a year-on-year basis, so the onset of the pandemic in 2020 affects these comparisons. Looking through those shows a healthy rising trend is being maintained especially for industrial production.
New Zealand and Australia have jointly expressed support for a sanctions blitz by Western countries against Chinese officials over alleged human rights abuses in western China, despite not imposing penalties of their own.
China is not backing down on confrontations. It has sent a 200+ flotilla of ships to occupy a reef in claimed Philippine waters, 300 kms off their coast.
In Australia, the economic impact of the floods in NSW are still being assessed. They won't be insignificant.
And the Australian government’s AU$90 bln JobKeeper wage subsidy ends next week. While millions of workers have stopped using it, there are still about 1 mln people on the program and the impact for them will be significant.
On Wall Street, their Tuesday session is flat to lower in early afternoon trade. Overnight, European markets were lower by an average of -0.4% but Frankfurt managed a small gain. Yesterday, Tokyo ended with another -0.6% loss, Hong Kong with a heavier -1.3% retreat, and Shanghai ended with a -0.9% loss which wiped out the prior day's rise. The ASX200 was down -0.1% but the NZX50 Capital Index was the outlier, up +0.5%.
The latest global compilation of COVID-19 data is here. The global tally is still rising and at a fast pace, now at 123,868,000 and up +519,000 in one day. Global deaths reported now exceed 2,727,000 and +10,000 in one day. Vaccinations in the world are rising fast however, now up to 451 mln and in the US a third (125.4 mln) have now had this protection (+2.0 mln) and they are achieving a very fast rollout. The number of active cases there fell yesterday to 7,179,000 (-37,000 in one day), resuming the reducing trend and taking the number currently infected down to under 2.2% of their population.
The UST 10yr yield is lower by -5 bps at just on 1.64%. The US 2-10 rate curve is flatter at 150 bps. Their 1-5 curve is also flatter at +77 bps, while their 3m-10 year curve is flatter at +163 bps. The Australian Govt 10 year yield is also down -7 bps at 1.72%. The China Govt 10 year yield is down -1 bp at 3.25%. And the New Zealand Govt 10 year yield is down -6 bps at 1.70%.
The price of gold starts today down -US$14 in New York at US$1727/oz.
Oil prices have dropped sharply and are now at just under US$59/bbl in the US which is a -US$2 retreat, while the international price is now just on US$62/bbl.
The Kiwi dollar opens today sharply lower at 70.2 USc and down by more than -1½c, and suddenly outside the long term 71c-73c range it has been in all year. Against the Australian dollar we are down sharply too at 91.6 AUc and a -1c drop. Against the euro we are also -1c lower at 59.2 euro cents. That means our TWI-5 opens today down at 72.4 and its lowest since before Christmas 2020.
The bitcoin price will start today at $55,483 and down -2.1% from this time yesterday. Volatility in the past 24 hours has been high at +/- 3.9%. The bitcoin rate is charted in the exchange rate set below.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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137 Comments
Man I look forward to hearing all these journalists telling me unequivocally that a lower NZD is 'good' while we pay extra to fill our cars up or for our groceries because supply chains are black holes you can just tip infinite cost increase into and nothing bad will ever happen.
Nice one. If it wasn't volatile it would be sod-all use.
But my beef is along those lines, and is with this:
"a big push in infrastructure spending is needed, as much a US$3 tln."
It goes with a comment someone made to me the other day, conflating money with effort. In that case it was "putting food on the table". In this it is building NEW infrastructure, in a country where existing infrastructure is decaying left, right and mid-west. Be very sure, this is only do-able if the resources and the energy are available - over and above BAU - to do this stuff. At the level we'd have traditionally associated with "3 billion dollars", this is un-do-able. Yellen is out of her field of expertise at this stage, pity nobody is pointing this out.
The rising US Dollar index is a factor.
I noticed quite a few PI's in yesterday's housing-related threads mentioned jacking up rents to offset the fact interest payments could no longer be treated as deductible expenses.
If this was borne out at scale and rents were to rise across the country, wouldn't this drive up inflation, in turn forcing interest rates up - and therefore asset prices (i.e. houses) down?
This knee jerk reaction from landlords that rents will go up always seems a bit simplistic. There's far more to consider here. Do you want to keep a good tenant? What are other landlords doing?
The changes around interest payments being tax deductible will not affect all landlords equally. Not all will have structured their rental around interest only loans and some will have small or no loans at all. Plus there is a limit to what renters can or will pay.
Name one business that doesn’t already charge as much as they think the market will bear for their product.
Look, this argument is clearly nonsense, landlords don’t base their rent on inputs. Otherwise paid-off rentals would only charge a fraction of a place with a mortgage on it. And they really, really don’t.
Mike Hosking openly said the same. I assume being good business owners they all took legal advice about price fixing before opening their mouths? I am no expert but I suspect Hosking has crossed the line there.
Compare it to another business like bread. Bread company A has no debt, they make a return they are happy with on their initial investment. Bread company B has almost 100% debt, their business makes no profit at all after interest payments. Then the government changes the rules and makes bread companies pay tax on interest payments. Now company B has to increase prices by ~30% to still break even, but company A does not. Can company B just increase their prices like that? Won't people just buy their bread from Company A?
And then someone else will see the big profit margin and start Company C.
PIs think the rent they can charge should be based on their costs, and if their costs go up the rent should go up.
But really the rent is the thing that is largely fixed and their main cost (buying the house) has been based on the rent that can be achieved.
The ardern administration is making a bollocks of housing. Previous changes were made so that it would be easier, better and cheaper for tenants. Instead the outcome has been higher rents as those same changes were harder, not better anf more expensive for landlords. What do you think might happen to rents over the next two years... thats obvious, its not rocket science
https://www.newshub.co.nz/home/money/2021/03/first-home-buyers-hoped-fo…
Article confirms role of interest only loan as below :
"Until now it has been free money, with 40 percent of residential investor loans sitting on interest only. The Reserve Bank is expected to soon limit such lending to investors."
Now RBNZ and goverent should act fast to ban interest only loan. Imagine 40% of investment is on interest only.
That would be /should be a step to help FHB by controlling real speculator.
Will they have guys to follow and do or will sccumb to pressure and back off.
The mortgage outgoings on Interest Only vs P & I are effectively half. Therefore, in theory, if an aspiring first home buyer and an aspiring Landlord were to meet at an auction house each with a $600 per week budget, then the Landlord has the means to outbid the FHB every time.
Unless the FHB also goes Interest Only too, but really, how many banks are going to lend to a FHB who needs to go Interest Only to stretch their budget?
Agree Nzdan, which even government is aware ( simple maths) , so is RBNZ but why did they got cold feet to act yesterday, may be because they too know that restricting Interest Only loan may be not a silver bullet but is definitely a pellet that may not stop / kill but will definitely put a brake to housing ponzi and they are reluctant may be influenced by lobbyist in the guise of experts and economist.
Though as per release yesterday, it seems that they have decided to act on interest only loan and DTI but hard to ignore that they belong to breed called Politicians, so question on their integrity till they actually walk the talk.
Opportunity for Jacinda Arden to be remembered as a Leader and leave an everlasting impression in NZ history in a positive way.
Wait and See.
Government took just one step for now and interesting to see the reaction from speculators and their lobbyist :
Ashley Church: The Government just lit the fuse on a bomb that will blow up the housing market
The above statement reflects their frustration.
Everyone who have been giving advise to FHB to be calm and patience should realise that FHB has been screwed for so many years specially in last year under Jacinda Arden AND if one of the patriach of speculator / RE lobbyist with just baby step from govetnment can start talking gibberish in extreme being frustrated than FHB have every right to speak and may be take to street, if that is the only way left.
Now, it will be interesting as this media / economist / lobbyist will go in extreme to put pressure on RBNZ and Government from avoiding them taking the next step of restricting Interest Only loan, so though it was just a matter of weeks before being implimented by Mr Orr supported by Jacinda Arden, now remains to be seen if Jacinda Arden will get cold fee and prove to be a leader or will she go down as just ......and seems may sccumb
This reactiin in extreme is not only from Ashley Church but each and every so called experts, economist and supported by media.
Had similar extreme reaction when recently had changes in tenancy law ( what landlord has to provide) that many landlord will stop renting, rent will skyrocket..........
Nothing new but yes have to see when government who has an opportunity to change by restricting Interest Only loan, will act as all this house will calm down as this should not make much impact in housing market, specially in short term and now what is required is ammunition ( Interest Only loan) to douse the fire before doing anything else.
Jenee from I terest.co.nz should raise it when given an opportunity to meet PM or FM.
This reactiin in extreme is not only from Ashley Church but each and every so called experts, economist and supported by media.
I don't understand why the 'people's prophet' is so popular. His 2020 predictions were dreadfully wrong. 1 out of 8 correct. Yet the media and the sheeple still see him as the shepherd on all things property. Surprised Granny Herald is dumb enough not to have pulled this off the server. https://www.oneroof.co.nz/news/national-back-in-charge-of-housing-my-8-…
People increasingly are in echo chambers of social media and peer groups. They only let through the information to their brains that confirms their existing world view. It's compounded by 20 years of post-modernism that told us "all truth is relative to the individual", and is now the dominant zeitgeist. Those same people are unwittingly incapable of seeing any other world view but their own. Truth is dead, long live truth.
Yes, the self-serving specuvestor lobby is rising the tone of their whining, enrolling "experts" and commentators too. This is a sign that the Government's announcement was a step in the right direction.
However much bolder steps must be taken urgently, also in the area of monetary policy. NZ needs a sustained, progressive and significant decrease in house prices, and much more significant action must be taken in order to strongly disincentivize parasitic housing speculation, and manage a controlled downward trajectory in house prices, in order to avoid a catastrophic implosion of this over-inflated housing Ponzi before it is too late and it takes the real economy with it. The Government just needs to grow some balls and simply ignore the whining of this self-serving minority, for the sake of the whole of NZ society and real economy.
Karl
Sounds like you really want to go back to the Muldoon era. It wasn’t a good time.
However, I agree with your sentiment. Announcements yesterday will have some impact on house prices in the short term. However the reality is that it will not address the housing supply in the short term and there remains a significant shortage of rental accommodation in many areas which is likely to continue to put upward pressure on rents. Reading an article that here in HB nearly half of motel units are catering or homeless - and my observation is that is not exaggerated.
P8..no I want to give our poor people a chance to get ahead in life; to protect them from greedy investors. And, as you know, it is simplistic to say because the Muldoon era was not a good time then it shows price freezes do not work. It is a common (but twisted) argument used by investors to push their narrative. You are probably more aware than me as to why the Muldoon era was not a good time and it had little to do with a short-term price freeze.
Karl
Apologies - I updated my post in the interim.
The reality is that for some regions at least, a most significant factor putting upward pressure on rents is shortage of rentals. A freeze on rents is not going to add one single additional house.
Here in the HB I know the MSD have been taking direct steps - such as offering free management, guaranteed rents, finding tenants and undertaking repairs and possibly buying properties - for two years now and still the problem of housing shortage, homelessness and upward pressure on rents continue to exist.
Quite simply, there is a housing shortage and both National, and after 4 years, Labour have not addressed that.
I am hearing locally from a small group of landlords I have coffee with is that as a result of recent tenancy legislation landlords are not rushing to fill empty properties but rather now taking their time to find a tenant they are confident in. That legislation has not helped the “poor”.
This is the issue I refer to:
https://i.stuff.co.nz/national/124624124/napiers-long-social-housing-wa…
Over one percent of the resident population living in motel units. Nothing in yesterday's announcement nor a rent freeze is going to address this issue.
1500 to 1700 people estimated to be in motel units and they hope to build 240 houses by 2024 - I hope more successful in carrying this out than KiwiBuild and even then hardly addressing the shortfall.
The problem has existed for some time but even now the Mayor is only "gunna start talking with Government".
P8...IMO, in regard to the motel problem, it is at least partly caused by us having to house all these extra people. Our population has grown by more than 50% in the last 15 years and almost all of that is due to immigration. To me it is common sense. Everybody who lives here needs a home and the more people we needlessly allow to live here the harder it will be to solve the problem,
P8.. no worries. I agree with what you say and I do not believe these are the major issues. A fix to reduce unoccupied homes would be to impose huge tax on them if they are in urban areas.
But it is no secret that I feel the biggest issue is that we are allowing 100K extra people to move here each year, and they all need somewhere to live. The other major issue is the RMA and I almost feel at this stage complete open season with no regulations would be better than the status quo. The RMA is not that easy to fix and will take a long time. But we could address the demand side through sensible immigration settings tomorrow.
I'm with Karl. Demand canbe managed
But that is a 'truth that can notbe talked about'.
If we get demand less than supply it's a tipping point. 'the poor' who have been pushed off the end of the bench into MSD motels will get back into proper housing (gradually)
I don't get why the politicians studiously avoid the demand side.
.
KH..they do not talk about it because it is not PC and for fear of being cancelled. A fair few of them are more interested in their self image and these days it just not sound good to be blaming immigration even when it is clearly a huge part of our housing crisis.
Maybe a loophole is in the eye of the beholder. With current tax policies, me and my next door neighbour, both owning our houses, would be financially better off if we swapped over and charged each other market rent.
I appreciate the rules are no different (or worse) for property investors compared to other businesses, but whether you call it a loophole or a distortion, it's clear that these settings encourage property investment over owner-occupying.
The ability to deduct interest on the financing costs sure as hell isn't a 'loophole'; my understanding is that's what his comments relate to.
If he'd come out and said "you can't run an investment at an operational loss and then argue the Capital Gain wasn't the whole point of buying the asset in the first place" then I'd agree, because that's dumb as hell.
You are probably semantically correct. I guess saying 'close the loophole' is a convenient way to sell it to the public - perhaps they should have talked more about 'levelling the playing field'.
Regardless, even if it is not a loophole, I think it is justifiable to make the change they are. Starting a business just by buying an existing property and continuing to rent it out looks quite different to productive businesses.
I don't disagree on the substance of the changes, but I regularly see MPs making claims about how the tax system work or that there are 'loopholes' or that certain things are 'tax-free' when they are not, and if an accountant or tax professional were to make that sort of claim when giving advice, they'd find themselves professionally sanctioned. I don't think expecting elected officials to be held to the same standard is asking much.
How would you be better off? please explain. I have a 1m mortgage so does my neigbour. We pay $25k in interest per annum and $4k other expenses. Now we swap, the market rent for our properties are $30k p.a. We both will make a $1000 taxable income and $330 in payable tax income. We are both $330 worse off. Maybe when losses where not ringed fenced, you could have cheated with using significanlty lower than market rate. But if you would have got away with your tax avoidance was not due to a loophole even then, but the IRD inability to discover your sham rental agreement (which is by the way illegal so not a loophole)
New Zealand and Australia have jointly expressed support for a sanctions blitz by Western countries against Chinese officials over alleged human rights abuses in western China, despite not imposing penalties of their own.
As the Guardian notes:
Bütikofer described China’s retaliatory sanctions as “a major strategic error”. He said it was unlikely that the ratification of EU-China investment treaty “will ever appear on the agenda of the European parliament, as long as the sanctions are still in force”. Link
Who will lose the most?
It is unwise to use sanctions in a bid to punish Russia and China, Russian Foreign Minister Sergey Lavrov said in an interview with the Chinese mass media.
"You hear European businesses voicing resentment that it is suffering losses whereas their niche on the Russian market is being taken by other countries, which are guided by their national interests, by the interests of the development of their economies and business support rather than by the logic of punishing anyone for anything. It is wrong to punish anyone on the present-day international arena and it is simply unwise to try to use this logic in respect of Russia and China," he said. Link
https://www.home.saxo/content/articles/forex/fx-update-the-whole-world-…
But the bigger impact here is the signal value of a move like this – here is the first government that is taking a truly heads-on approach at pushing back against the unintended consequence of too easy monetary policy that supercharges the upside for incumbent wealth and the “rentier class” while leaving behind the lower income and especially the young who have no prospect of climbing on the wealth ladder when asset prices soar out of reach. This is a real move to “invert the K” and it will spread to other countries quickly. Perhaps New Zealand was one of the first movers with a policy like this because it was so quick to get ahead of the disease itself.
Now that Jacinda has got world media coverage.......maybe will think has done but still lot to be done to make real difference to FHB.
Signal send now follow up with action along with Mr Orr who may be a hard nut to crack but remember who is the boss as all bucks stop at Jacinda - your door.
Regarding interest deductibility changes on rental properties people have suggested that a better step would have been to make it so that property investors would have to borrow at a higher rate than home buyers. This would have kept things more business like.
However the result is pretty much the same. With the changes it is as if property investors are now paying 1% more in interest than an FHB would.
That may be a more palatable way of viewing things.
One significant difference. If you remove interest deductibility, the benefits go to the Government, presumably to help fund the supply side work. If you increase interest rates for investors by 2%, the banks make out like bandits and the money flows primarily to Australia.
Swap any funds and income to Kiwi Banks....or put the money aside. Never go near an Aussie Bank...ever again. Hands in yer pocket, every step of the way. In debt, out of debt, rates up, or down depending on the flow of funds, less tax, plus interest....click,click....gottcha.
Two to three years ago, an investor who purchased a property with a $600,000 mortgage was paying 5% or $30,000 in tax-deductable interest, got a tax reduction of $10,000 leaving an annual net-cost of $20,000
Today, with reductions of interest down to 2%, that same investor now pays $12,000 net annual interest, but the Government has taken the tax-reduction away
Investors have no reason to increase rents. Those claims are scaremongering
Your comment is similar to my one above. However investors were also hit with the ring fencing change as well. If they could still offset tax against their salary it would be good but adding both together now it is quite significant.
Investors plunged into negative gearing now, especially those that have really pushed the numbers of properties they own, will be tempted to raise the rental rate or at least push it to the maximum whereas they may not have done that before.
I predict a general rent rise of around 5 - 10%.
We're living in clown world where no one wants to acknowledge the hard limits of resource. The reality is that for an increasing amount of people, they have no money left at the end of the week to pay more rent. So what we'll actually see is:
1) More homeless families living in cars
2) More middle income families on benefit
3) More landlords with rent defaulters and un-let properties
The accommodation supplement has hard limits around income and max payout. It's not an endless piggy bank for property investors to plunder at the expense of middle NZ and the taxpayer.
Rents have been going up consistently with income. See https://www.corelogic.co.nz/sites/default/files/2021-02/Q4_2020_NZ%20Ho… page 11. Landlords can't pass costs onto tenants unless they were already charging less than market rent.
Zach..this is exactly why the Govt needs to peg future rent rises to the average wage increase. If they do not it will be the poor renters that suffer the most again.
I view the way the Hosk, Ashely and Tony are spouting about rent rises as positive. It just highlights to the Govt how essential it is for them to implement some kind of rent control unless they want the new rules to do little else but increase the living costs of people who can afford it least.
I fail to understand how investors can justify not paying tax on the total of their rental income. As a wage earner, I can't get a tax deduction for my owner-occupied home. I wonder if all the opponents understand how hopelessly out of touch they look - especially Judith Collins.
Wait for one more action and that is controlling interest only loan, which not many are talking as that is bound to have definite immediate affect as required now to calm the prise rise by $100000 per month.
Hard for FHB to go on interest only which is just a phone call away for investors - another disparity, hopefully is sorted soon, in weeks and does not take ages.
The comparison between owner-occupier and investor is inappropriate, as the latter is earning taxable income (from rent) form the house while the former is not driving any income from it. Now if you are one supporting the "deemed rent" idea, then you would have overcome this. The idea, championed by TOP few years back, is that owner-occupier should pay tax on their rental income (i.e. market rent for their house if they were renting it from the market). You would have then said that for you to pay the deemed tax, you must be allowed to deduct all relevant expenses (i.e. interest, rates, insurance etc).
No one can deduct their "living expenses" from their income as they are not directly linked to earning taxable income. The PI cannot claim their private accommodation costs as expenses either. Or their private transport or food, childcare, insurance etc. You are not comparing likes with likes. Rental property is an income earning activity subject to income tax. An owner-occupier living in thier house are making no income from the house, so that cannot claim a tax, unless you create an imaginary income like "deemed tax".
Tax advantage of property is mainly in the fact that CGs are not taxed. This is by far the most significant tax incentive for buying property (and that is not an advantage in itself as owner-occupiers are also exempt from CG tax). But the government has promised not to introduce it. So they are using a far from logical approach (from conventional taxing point of view) and creating arbitrary "bright-lines" to have a qusi-CGT. That is bunkers really. Just have the CGT and get over it. But everyone knows that taxing is not the main driver of investor rush into property. They are at best secondary objectives.
The main advantage of property investor (specially over FHB) is in their lending capability and bank bias towards them when prices are increasing (as they drive up prices, they drive up their "equity" and boost their lending ability while FHBs stay behind needing more time to save to be where they were before the price hike). However lending practices of private banks is out of government hands. The RBNZ has the tools to do that (e.g. effectively allow investors to lend to invest in new builds). But they are not using those tools.
Sure. the same as everyone else (or are you the only one who sleeps at night :)). And no one claims living expenses as I explained. Now if you stay in a motel while travelling to earn taxable income, you would be able to deduct that. The line between private living costs and business expenses can be blury at times. But the general concept (from a taxing perspective) is clear. For example some countries allow for your travel to and from work as business expense. some countries allow child care as business expense. Some may allow lunch as business expense etc. But it would be very hard to argue that expenses to sustain yourself (that you would have incurred regardless of you earning income) is directly related to your taxable income. You buying a potential customer a coffee is deductible where you drinking a beer at home is not.
Absolutely ydab ......some states in the USA did/do have have a tax reduction for the mortgage interest paid on your own home....but you know what PI's are like - "don't let the facts get in the way of their agenda".....that property prices will increase forever and low interest rates are here to stay ! .....and I am "entitled" to it and am doing a "social service" :) ...absolute BS ...it's just GREED ...get off ya ass and invent or produce something !
Also makes me laugh when they are quoting it would cost them $6,000 pa without the mortgage interest deduction ....well I say, it can just go towards the accommodation supplement, that the tax payers have been paying for years, to top up the "over market" priced rents !!
I was in favour of stopping interest only loans as a way of slowing the speculative element in housing. Having to make principle payments on top of interest would have removed the unfair advantage over FHBs.
Sadly the government decided it was easier to hit landlords instead. Maybe an indirect consequence will be a subdued housing market will reduce the speculative interest so achieving the desired outcome.
Agree Jacinda will be and should be judged for how fast now, she acts on i teredt only loan as both DTI and Interest only loan has been highlighted to act upon by Mr Robertson and Mr Orr.
Will it be in weeks or can play game to delay till budget in May but can they avoid....politicians can do or undo anything so hard to trust till they actually act.
RE NZ Auckland new listings yesterday: 126.
Peak in November was 256.
This is March?
The peak of the cycle is well and truly well past.
Doing a CMA in Orewa shows, regularly, that sale sin last 6 months were 3-4 times more than in last 3m.
Listings are drying up.
Now the investors have had a kick in pocket too.
Auckland reverting to the mean in normal fashion, following finance induced mania
No one is so active when it comes to protect depositors and FHB.
Not Ashley's of NZ but even opposistion is restless to support speculator :
https://www.newshub.co.nz/home/politics/2021/03/national-would-roll-bac…
Though Jacinda Arden should have gone after speculators by targeting Interest Only loan....Still has chance to redeem herself by a acting quickly. 40% investors on interest only, of which most are speculators and interested in flipping and making fast Money.
Yeah next meet in may and will be from affer 6 months or so... Typical delaying tactics. If it is other way round to support falling market, is considered an emdrgency and have overnight meeting followed by announcement.
As have heard many times on this website : INTENT / WILL TO ACT
Does this gentelmen knows, how hard it get a rental and also how expensive and inconvinence it is to move house every now :
https://www.newshub.co.nz/home/politics/2021/03/housing-crisis-tenants-…
I too agree they SHOULD have gone after supply of fund ( easy and literally free money) by targeting Interest Only loan, which they are trying to deffer though knowing that should be acted upon and act up in fast. By controlling this method of funding will lease some speculators, which may actually help FHB looking for home.
In all the hysteria about house prices has there been any work done on the impact of the Auckland Unitary Plan?
A big proportion of the media beat ups on extraordinary price lifts have been houses that have been rezoned to multiple sites. Prices doubling in a couple of years makes great headlines - however
Shouldn't we be dividing that new price by the number of houses/apartments that can now be built on what was one house site.
A large portion of the house price lift in Auckland and indirectly the rest of the country is due to the success of the increase in house construction and supply through increased builder/developer demand due to the Unitary plan.
In other words government's success in creating supply is driving prices higher - in part defeating the point of increased supply.
Yes. And just wait for the huge plan change to the Unitary plan later this year, with a lot more high density zoning. That will give prices in Auckland another shot in the arm, although it's probably already having an effect as savvy developers buy land that is almost certain to be rezoned.
"Janet Yellen is also testifying as Treasury Secretary. She is saying more needs to be done and that a big push in infrastructure spending is needed, as much a US$3 tln. On top of the already approved $1.9 tln stimulus, that has bond markets worried."
Yip - As expected we will hear of great plans for HUGE infrastructure spends and even greater deficits
When we cant even afford to maintain the stuff we have
But Yellen or anyone has no choice
Its JOBS people need to inherit, not houses
And that required cheap abundant resources
Collectively, we are way past insolvent
Reflections on yesterday's housing announcements:
- the government has given the people permission to be angry at a previously protected group. There has been an upswelling of voices against property investors. This alone may prove the biggest step in bring change.
- support for the change greatly outweighs the pushback against it. I did some informal polling in some investing groups which property investors were probably over-represented and their are twice as many for the change as against it
- property investors are scared for the first time in decades that their golden goose may be taken away
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