Well, what about that Graeme Wheeler then, eh?
Turned out to be a bit of a one, he did.
Yeah, he's the Grinch who would pinch the Christmas lights off the house and then prevent anybody from being able to buy the house. That's our Mr Wheeler.
You can just see him sitting in his ivory tower at number two The Terrace, in his black cape, black top hat, twirling his black moustache, thinking of the next dastardly thing he could do.
Of course most young kiwis aspiring to buy a house in the very near future would think that the Reserve Bank Governor has already done more than enough with his positively evil "speed limits" on high loan-to-value lending.
Yes, the mission to single-handedly rob the country’s young and aspiring of their birthright - their absolute entitlement - to own their own little patch of the universe (also known as a house) is well under way.
And boy, the nefarious scheme seems to be succeeding.
The RBNZ released figures last week showing that the rate of high-LVR lending had more than halved in just the first month since the October 1 application of the speed limits. This followed the more anecdotal evidence from the latest BNZ-REINZ Residential Market Survey, which showed that first home buyers have deserted the housing market in droves.
So, that's the evidence for the prosecution. It's time for the fair trial, followed by a damn good hanging.
Now, no doubt Wheeler will pull out the excuses he's tried before. He's even looked quite sincere when patiently rebuffing television reporters at press conferences with the same sort of lines and refusing to talk directly to his young victims, thus robbing the tv channels of the opportunity to run ratings bonanza: "The RBNZ Governor brazenly tells you to your face why he won't let you buy a house" stories.
But, one suspects those trial-by-media opportunities will come. The momentum is gathering.
Auckland mortgage broker John Bolton - someone who's on the front line and therefore should know exactly what's going on - reckons that the RBNZ will come under huge pressure on its LVR policy by March next year.
The scene is well and truly set. We've got a Government that agreed to giving the Reserve Bank power to introduce LVRs as part of new macro-prudential tools but then wanted to exempt first home buyers and when it didn't achieve that announced some initiatives aimed at partially getting first home buyers around the LVR limits.
Then we've got strong lobbying pressure already coming from the building industry itself.
The John Key Government has not appeared scared of anything - certainly nothing a lacklustre Opposition can muster. But the LVR limits scare it. Oh yes.
Emotional attack
Young people not able to buy houses has huge emotional impact. And the young people are voters. And they have parents and friends and other extended family that vote. And next year is an election year.
The National Party is already distancing itself at a speed of around a million kilometres an hour from the LVR policy. But that has worked only to a point and will probably stop working altogether come next year. After all - this Government did sign the paper that allowed the dreaded LVRs.
In the meantime this is very much a developing story.
In some respects it has been a shock to see how quickly the banks have been able to bring their portions of high-LVR lending down. But of course adhering to the letter and spirit of the rules is a condition of their continued registration as banks - so therefore they take it seriously and can be seen to be doing exactly the correct thing.
Personally, if I was a bank faced with a policy (LVRs) that I deeply disliked and wanted rid of I would go to the letter of the rules and beyond. What I would do is basically knock all high-LVR lending on the head and go all-out for the 'good stuff', the property investors et al that fall into the low-LVR category.
Bells and whistles
Yep, I would offer all the bells and whistle and sweetheart deals to get the business of the investors. In such a way I could hope to keep my overall lending increasing - and I could blame the RBNZ for having to turn away young first home buyers. A brilliant excuse. And not only would it be a brilliant excuse, the consequences of such action would just keep ramping up the pressure, probably first on the Government, but then back on the RBNZ to get rid of these hideous limits. So, by apparently diligently applying the toxic new rules I could actually hasten their demise. That would be my plan, if I were a bank.
The whole idea of having limits forced on banks must be truly an affront to them. After all, it implies that the banks don't have the necessary discipline to decide if their lending policies are dangerous. And as we know, banks are always completely in control of the situation. Until they are not.
You see, blissfully lost in all the mounting LVR hysteria is the fact that we do, relative to earning power etc, have very expensive houses in this country. There is, therefore a real risk that a shock to the housing market could cause prices to plunge, and put huge numbers of people in the poor house, doing goodness-know-what to the finances of the banks in the process.
This Government is surely aware of the risk, as have previous Governments been, as are the Opposition parties. But owning houses is so fundamental to the New Zealand psyche that no Government is ever going to itself tackle policies (and I won't trot out all the options) that aim to level the investment playing field and reduce our total dependence on housing wealth.
No, Governments leave housing investment alone. Messing with the housing investment market would be like trying to ban the All Blacks - virtually treasonous. An attack on the New Zealand people.
So, it has been left to the poor old Reserve Bank to try to get responsible on behalf of the country and possibly save ourselves from ourselves. And the Reserve Bank is by the minute being left completely out on a limb.
What happens from here?
Well, what does happen next then?
The key thing will be the housing market itself.
If house prices were to flatten or even ease a little in the New Year then this would take a huge amount of pressure off. After all, any first home buyer prevented from buying a house now and then finding that prices are cheaper in six months time is going to be pretty pleased.
But I doubt it will happen that way.
It's more likely that housing investors (and everybody wants to be one) will see now as the time to strike. And with banks fighting for their low-LVR business, they'll have plenty of chances to raise money and get in there and bid up (against fellow investors) the price of houses.
If the price of houses is higher in six months time than it is now - and I think it will be, even if only slightly - then the pressure will be intolerable.
No promises
Of course the RBNZ hasn’t promised cheaper prices. The main reason for the LVRs is actually to ensure financial stability, with the secondary hope that the measure will also take some pressure off prices - maybe making house price inflation between 1 and 4 percentage points less than it would have been otherwise.
But such detail will be lost on the public.
In reality unless we get a fall in house prices, the locked-out first home buyers will be looking at houses getting further and further out of reach and they will be screaming. And the Government will be listening.
One way or another the RBNZ and the LVR limits will be kneecapped. And yes, I would include the additions of exemptions such as for new houses and for first-time buyers as “kneecapped”, since such exemptions would water down any impact of the limits to make them effectively pointless.
Already this is looking like mission unwinnable for the RBNZ and its (I think extremely brave) Governor.
Preventing the unprovable
The RBNZ is in effect trying to prevent something from happening (a housing crash) that it will never be able to prove would happen - unless it does happen.
There will never be a point at which the Governor can turn around and say that policies brought in by the central bank saved us from a housing bust. After all, if you wake up in the morning and the world hasn't ended overnight, you don't immediately think: "The world didn't end". You carry on oblivious.
No, the possibility of a housing crash is one of those out-there suggestions that nobody's really inclined to believe till it actually confronts them. A bit like the prospect of the world’s financial markets collapsing. Completely unthinkable. Oh, hang on…
The RBNZ has attempted to do the right thing. The Government and the country as a whole ultimately won't let it continue trying to do the right thing.
But as I alluded earlier, such matters should not be left to the central bank. This is Government work. And until we've got a Government prepared to step into housing market investment as an issue, then the whole country continues to run a serious risk.
59 Comments
What can the Government do ?
Limit the amount of tax rebates landlords can claim on high LVR loans.
(for example any part of loan above 65% LVR means no interest tax rebate)
As soon as high borrowings looses its tax attractiveness they will desert these loans.
That will mean First Home Buyers will be front of the queue with the banks for above 80% loans.
You appear to represent that 2% survey figure as reliable hard data.
It most certaining is not !
This is a qutoe from Tony himself re his survey
Quote
"My survey of real estate agents indicates about 20% of dwelling sales go to people located in China.
There is no information on foreign purchasing of houses in NZ beyond that survey and much more work needs to be done before one can say definitively what the actual proportion is.
More than a simple survey is needed for that.
There is no information on the proportion of the housing stock currently owned by foreigners and certainly zero information on any of the characteristics of any of the foreign groups buying houses in new Zealand.
With regard to Chinese buying of houses – I have yet to find a single person in New Zealand who agrees with the survey results.
Everyone believes that the true level of Chinese house buying in Auckland in particular is much higher than my survey suggests. The issue is rarely mentioned with regard to any other part of New Zealand."
Unquote
Zany
My reply to you was not in regards to the merits or otherwise of banning foreigners or restricting migrants.
It was to your use of figures; in this case the 2% figure.
You appear to quote this 2% as if it was hard reliable data; it is misleading to do so, in my opinion.
Zany
My quote from Tony is his economic commentary dated 27th June 2013.
It matters not whether his survey figure was 2%, 4 % or whatever.
I have misrepresented nothing.
It was your use of a figure from his survey as though it was accurate data, and therefore could be used to refute another's point of view.
( In this case Factboy's point of view)
At the end of the day Zanyzane, what's the difference between a "foreigner" and a migrant apart from a legal description? A migrant is still a foreigner and if they are bringing foreign capital, as you say, to purchase property then they can be grouped with non-resident buyers. Which in turn creates a bigger group with a huge influence on the current property market activity.
Very sad then.
You think a policy "is working" when it does damage to those best in the know?
Nice to know where you think government and fiscal policy should be aimed...at doing damage (and controlling) people who are just trying to advance....
And just how do you tell the "vested interests who are coming" against the informed and the watchdogs? (oh yeah you don't ... you just hear warnings and think they must be vested interests....while those really ripping off the system just sit quietly sniggering as the reap the harvest from stupid policies)
Its odd that Wheeler has done nothing about the increases in unsecured and payday lending , where the borrowers are a real risk to both themselves and the lenders .
The interest rates are around 30% and with fees and insurance the loan capital value can be double the actual sum borrowed , there is no way of knowing if you will get the laon repaid , there is no security offered .
Its also odd that Wheeler has said nothing about other asset price inflation such as shares on the NZX which have increased by more than Auckland property prices
I really wonder about some of the things you post,
Scale, loan sharks, such borrowing doesnt threaten the stability of NZ's financial system.
Shares, these are by and large bought with cash...ie Im not aware there is substantial NZ based debt involved across many new zealanders using it to speculate to the extent it threatens the NZ banking system?
regards
Unsecured lending is about 12 to 15% of private debt in New Zealand and people default on these much sooner than the repayments for the roof over their heads.
And Second and Third tier lenders dont fund these 100% from own money, most banks have some exposure to these operations. Some people we see as loan sharks are actually brokers .
So the big banks do have an exposure to unsecured lending either direclty or through an intermediary.
I am also not convinced that the rampant price increases in some NZX Shares are not driven by credit funding arrangments
If an NZX counter yields a 3% + dividend per annum , and increases by 15% in value in the same period its a huge profit on 10 / 90 borrowed money.
The return on actual outlay of 10% is so big its bound to be driven by credit funding.
Any person of substance can open a credit line through a big brokerage, hock some assets , sign PG's , and off you go .
Its a high stakes game and of course it could all go horribly wrong and you could lose everything , but its happened before and nobody dies from it
Tell you what comes across to me, you are a PI complaining now the cookie jar has been taken away and you might lose some $s instead of the fat gains you expected.
Lets see some real numbers on your part otherwise you seem to be guessing based on what you want to believe/claim rather than what is.
eg That 12~15% is only partially pay day and those are for small amounts, ie the loan sharking bit.
Shares, well Ive seen nothing to indicate its massive borrowings like housing, cough up some data to show thats the case please.
Dont assume I am a Property Investor , I think houses are a terrible investment , the yields are too low , rent collection costs are too high , and good residential tenants are hard to find and are mostly a lot of trouble.
So we only own our own home , and we have a trust with a small commercial property that my wife ran her business from and which we bought two decades ago .
We borowed against that commerical propertyincome stream to diversify into equities and it has worked well . ABN Amro Craigs did a good job of picking good shares for us .
The only real problem is that the share price increases have been too good to last.
At some point we will wake up and realise that the high level of migrants are not adding to anything except high house prices, terrible traffic issues and reducing health and ecucation levels. What do all these migrants add? Has anyone been inside a Chinese cafe lately or a building site on the North Shore? Everyone working there is Chinese. With the building sites they actually sleep inside the unfinished buildings. Has anyone noticed all the elderly Chinese looking after the little princes after we let in the old folk via the Balance of Family rule? Immigrants are allowed to bring in the parents if the balance of the family is now in NZ and due to the single child rule in China we now get all the old people here getting all the benefits yet never having to contribute to the tax base. Our neighbours - once they got the parents in to look after the kids, then returned to China to work - how much NZ tax will they declare?
John Key has a Faustian agreeement with China. Keep importing our powder and we will not rock the applecart and keep allowing the dirty money in. It will be interesting to see NZ official and public reaction once the missiles start flying around up in the China Sea. We can only grab our ankles like last week by Murray McCully for a short time until we will have to pick sides.
Winston seems very quite on this issue but as sure as night follows day at some point there will be a change of government and I suspect a major difference between the electoral platforms will be how they treat the migrant issue. A thing to consider is what happens when certain members of the migrant community establish a powerful voting bloc.
It will be interesting when John Key (or perhaps another PM if he sits on his hands long enough) is asked to put up where preventing NZers from becoming tenants in our own land where the non-resident foreign buyer is concerned. I expect we will receive a bit of a backlash from certain quarters. Too bad, I think we should do it anyway, and sooner rather than later. This includes farmland and rental houses for a kicker.
And yes, we also have to have the discussion about how many is enough, already are lives are considerably restricted from what they were when we were fewer. More people just means more rules and restrictions. Growth must be begun to be looked at as the new dirty word, as the world is now facing human overpopulation, and it is only us that can address that, and dragging more and more people in, is NOT the way to do it
The only resistance we have to the Chinese business, is to reduce costs as much as possible to resist Globalisation.
Failing to do that will just push NZ born peoples' operations off the map. We can't beat them on numbers or political force. The OIO uttterly failed at it's one prime job (to stop foreigners using huge cash alone to elbow aside NZ citizens, creating a flood of "beads&blankets" buy ups that our poor natives can't compete with ... with a OCR hike to slam any chance at taking advantage of improving economic times....)
The balance of family rules changed about a year ago. Now there is a quota and it's filled with high value teir one parents first. Entry by balance of family rule is teir two, and takes any remaining quota if teir-one applicatant have not take all the spaces
http://www.immigration.govt.nz/migrant/general/generalinformation/qanda/parentchanges.htm
RBNZ interferance all adds up to a Nigella Lawson Recipe for Sky-high price increases and a bitter story later when it all turns to sour lumpy custard .
I am even hearing people suggesting Graham Wheeler should be fired but I dont agree .
I do agree that the RBNZ was in a huge over-reaction to a perfectly normal functioning , open, transparent market in second-hand houses.
Its a market with perfect information , open transparent auctions , many buyers and sellers , known prices and values , and untl now, no artifical restrictions or State interferance
Wheeler has never proven to us there was or is rampant speculation in houses in Auckland .
This is not America with rampant over-building or sub-prime lending .
The real problem here is cheap money ( even cheaper if borrowing in Hong Kong or Shanghai), hordes of migrants needing somewhere to live , land supply contstraints and a clueless and unfocussed City Planning Dept. .
@Steven you are wrong mate , there is no residential price bubble .
The market price of Auckland Houses is what it is and is driven by people wanting shelter .
There is an element of price expectation in the market and some opportunistic behaviour by developers in pricing of new developments , and thats a perfectly rational market behaviuor
I have seen no evidence of the rampant speculative activity which drives bubbles .
There is however
- A land shortage in Auckland
- Cheap mortgage money available
- Plenty new Asian migrants requiring houses
- A shortage of good quality stock for sale in the affordable price catagories
You cant be looking too hard then.
I got examples of houses selling for 780k being sold for 880k 4 months later - with no reason for price increase - other than smiling real estate agent - saying "Market moved on - now worth 900k - you get bargain at 880k" . The funny thing is the price ends up as feedback in a closed loop system and everybody in the area wants 100k more. Time for wheeler to "take off and nuke it from space", i say. Bring out the big guns - ocr. Ban sales to entities without ird numbers.
I really admire Wheeler. There must be some temptation with all the stones being hurled at him to just grab a beer and some popcorn, reverse the LVR policy and watch Auckland self destruct so he can indulge in a 'told you so' moment. He's clearly a bigger person than that.
IF Auckland property market self destructed...
...then who would be hurt?
FHB? No, they're not that much over-exposed.
Solid Foreign of Local landlords? No, they've established good finance practice and based prices on income not poorly informed speculation.
Speculators? Only if they've over extended, although they might be caught out with a bit of exposure and have to hold longer or exit some bad positions.
Massive overreached landgrabbers? Bankers lending on poor quality clients? yes....
So just where's the problem?
And Zp, you've just identified the largest since reason why Auckland property is a very safe risk for the return it provides....the government is manipulating the rules of the market to protect the Auckland interests! To stop those taking poor risks from being affected by consequences of bad investments. No->low risk ... then you will keep seeing those prices pushing up up up, because there is no risk to it.
Boatman - steven says Auckland housing is a "2x bubble". But he also says he is paying a mortgage on an Auckland house that he believes is going to halve in value. Until he announces he is selling his soon to be worthless house he has zero credibilty.
I suspect he is a troll planted here by foreign PI's to talk down the market so they can deprive more poor FHB's of a roof over their head.
It could be, of course as Steve Keen found out if a govn porks the market all bets are off.
The thing is there is so much we dont know, eg what real % is foreigners buying in here, they can leave just as easily (though were to is another matter).
Timing is the hardest thing....hence Im a follower or trends and fundimentals. Take shares I sold all my holdings 3.5years ago, so I'm well out too early in a way.
The point that interests me is Steve Keen's work with Minsky he seemed to say that a small change in LVR ie 1% had quite a big impact due to the domino effect. So if 95% and thirty years was the "norm" then slashing that to 80% a 15% drop seems kamikazie. I'd love to get Steve Keen's comment on the size of this cut back to see if I understood him/minsky correctly.
My prediction, well I follow in the foot steps of Nicole Foss, our own BH and some others so really all I am doing is agreeing with them. Their data and conclusions seem sound however.
The norm in prices has been 3 to 1 a reliable stable factor for a long time, today we have 6 to 1. Even if not x2 how anyone can say its not a bubble of some magnetude is strange to me.
Scale eg The US saw drops of 30~40% in some states. They have lots of un-built on plots and empty houses and homes that should be foreclosed on but have not been. So that was all fraudulent fiddling of the books to stop some of the collapse.
BAU, back to 3 to 1 assumes today's wages, if we go into a depression and the wages drop that suggests an even bigger loss.
Size, Nicole Foss says 90%...a mind boggling number, at that percentage I'd wonder on have stable our society would be....
Future and and CGT. The Labour and Greens are going to sooner or later win an election, probably this one and if not the next if only because National is becoming so disliked. So a CGT and the Green's want a WOF for rentals, I cant see PIs doing anything but running? or enough of them at any rate.
Is it happening? well it could be....yes...3 or 4 months should make it clear if its big and bad or a strom in a tea cup.
Collapse....we could take 2 years or 6 years.
NB just look at Oily etc. if nothing else it looks like fear....
regards
thks for the response Steven,
I disagree... I think there will be bumps in the road and maybe a recession in 2015 ..but I dont think we will have a crash until the mid 2020s'. ( Real estate moves in identifiable cycles...in my view)
Look at broad money...It is trucking along at 6% growth... What the Reserve Bank cant do is control money after it enters the economy... If Broad money keeps growing at 6%/ yr House prices will grow at 6%/ yr... ( because of the nature of land and economic rent.... the productivity gains of society appropriate into Real Estate values) A LVR wont stop that.
I'm not saying that there is a direct relationship beteen M3 growth and house prices.... at times house prices can decline as money supply increase... but over time the money flows into Real Estate.
I am saying that ...all things being equal.... declining purchasing power as a result of expanded money supply is reflected in House prices . ( Particularly Auckland )
Throw on top of that the supply constraints... the policy changes in China ( there will be much more foriegn investment in assets ) .... the slowness of Govt and local body response ..etc
I can only see house prices edging higher over time... ( and we could well get that 20% + in one yr that we have in the past ... at some point)
I will start agreeing with you when I start to see more houses being built, ( construction cranes on the Auck. landscape ) interest rates going up...etc.
Also the house price/income ratio is meaningless in regards to determining the mkt.. It is only measure used to talk about affordability..... in my view...
I have always liked Bob Jones "gap theory" in determining whether a mkt was overpriced or not... ie.. the cost of building a new house vs an existing one.
I don't see any signs of what I would call a true Bubble... I think that has yet to happen...
NZ is getting a head of steam in regards to nominal GDP... election 2014
This is just my view at the moment... In the end I think I agree with you ...but my timing is very different to yours.
And ..as much as I like and respect Steve Keen.... he might not be a great Investor...????
I forgot to add... Not sure who said this...but I agree... " The mortal enemy of price is Inventory"...
In the last 4~5 years i have come to the conclusion that you cant predict humans in the context of an economy. The lunacy of how they behave is mystifying to me...
2020 would be interesting, the latest fall off the plateau of peak oil output is 2018~2020....what a combination. I cant see it being 6+ years, but then 4 years ago I didnt think we had 4. The world's ability to absorb shocks and mis-management has astounded me in that time frame.
I tried to look up Bob Jones's gap theory, got a fundie christian "university" and the loonie left Standard foaming at the mouth while ranting at him LOL ....got a good link? He's not my cup of tea I'll admit but he's respected in property.
BTW, Steve Keen I think said sold his house and now rents, I think so anyway. if I thought I could protect the money from the sale of my house from severe losses I'd do the same....but with the OBR etc its a Q of whats the least evil/loss.
regards
Hehe.. Gap is definitly not a christian thing... I don't have a link... ( it is a simple concept.. .. determine the cost of production and you can get an idea if supply will increase or not.. eg. if the price of gold is $1200/ounce but the cost of production is $1300 you can probably assume that there will be little new production )....the Gap is the difference between cost of production and mkt price...
Apply that to Auckland Real estate and if this was a bubble ( like gold at $1700/ounce) ,...then there should be alot of new construction ( ie. developers should be creaming it ).
Ok...supply is somewhat inelastic in Auckland because of Local bodies.... but I don't see much of a "gap" to encourage lots of new "production".
I recall Bob Jones saying in 1980 that house prices HAD TO double in value.. he was adament ...and the reason was that the mkt price was 50% of replacement cost....
( inventory is the mortal enemy of price)
Thats' how the law of supply and demand works...... I think. ( what is far more difficult to discern is the demand side of the equation... which is where "mkt behaviour" comes in)
It would be an interesting discussion about the ability to predict human action in an economic sense.... ( mkt psychology)
I have found that mkt behaviour does repeat itself... I've found that price ..in itself..can act as a force on mass human behaviour , within a mkt.... I've found that greed and fear does drive the mkt in some of its' phases.
I'm a big believer in the "business cycle"..and have become a big believer in the Real Estate Cycle.
I've become a big believer in watching Central Banks and Govts and getting a sense of what the "current fashion " is for them. ( After all ,they are the 2 most powerful forces in an economy )
So... based on all that ...I expressed my views... BUT...
I'm a fan of Ray Dalio... and even he says that if u can get it right 60% of the time u are doing exceptionally well.
I don't know what to make of Bob Jones in regards to his morals and ethics.... but he is a smart cookie... and the biggest lesson I got from reading his "works" ... is to be well read and to think for onesself... ie.. to be an "original thinker".
cheers
Ah yes.
There are other similar sorts of things, the nasty asymetric curve of after the peak oil sort of. ie the marginal new cost is $95USD and we can only afford to pay $120USD. So once that marginal cost gets to $120USD the rest of the oil will be left in the ground, no business will drill it out.
Housing, I agree in there isnt much of a gap, some ppl are blaming the council but I dont think its a big and unjustified component.
Bob Jones, yes smart...and yes think for yourself, if nothing else a cock up then yours, learn and move on.
regards
Yes in the current environment of $2/litre oil that i think is permanent now, we are going to see allot more people on cycles and it's important the government gets in there and builds the infrastructure.
Allot of cities overseas have invested heavily in cycle infrastructure in the last decade, and of course the nothern europeans have been doing it for decades. They see the economic benefits it brings, the reduction in transport spend, reduction in oil consumption, reduction in healthcare costs.
For longer durations you want to look at combining cycles with public transport, so bike to the train and the like.
What a lot of rot, the housing market is not open and transparent at all. With nearly every house going up for auction, real estate agents giving one price and the vendors wanting another, it is in no way transparent. If you want to know anything about a property or area you have to pay for it ie e-valuer, recent sales values etc. Looking for property for us has been like one big guessing game. If there is one thing the government needs to do in this country is to regulate to make property information freely available including sale prices and asking prices.
The house market is far from a free market.
Perfect information? Where is the public land sale registry? In many contries overseas anyone can see what prices houses have sold for. Here the data is controlled by the realestate agents who have a conflict of interest vs the buyer. Data is available from them, but for a fee, which limits the amount of research prospective buyers can do.
Transparent auctions? When the standard industry contract allows vendors to plant someone to bid against genuine buyers.
Known prices and values? When you are told at an open home that a property was passed in at 800K, but 800K was a vendor bid and the last genuine bid was 750K.
If Property IQ can identify if a buyer is a FHB requiring a mortgage, then they can just as easily ask for IRD numbers and passport numbers, and data matching with customs can tell how long they have been in-country, are citizens or permanent residents etc etc etc
The RBNZ could have placed the LVR limit on 2nd house and over,
RBNZ could have made it a requirement that house number 3 or more needed a 30% or 40% LVR. They could have introduced a staggered LVR on number of houses owned.They had plenty of room to formulate proper and fair policy.
Targeting FHB's is a very ruthless policy and one that goes against the Basic Right of shelter. We are not well off as a country if basics are unaffordable. How can real productivity lift in NZ when the bureaucrats are completely out of control. When the RBNZ has independence and robs the populace of their independence and ability to take care of their basic needs then we have a system failure of giant proportions.
It is good to have PI's with high equity and it would ensure income levels would be high enough to contribute to income tax system.
Off-shore investors need to be contributing to the NZ tax system on the same footing as NZ tax residents.
I think it is appalling that Governments and bureaucrats have failed the residents of NZ by not keeping a register of NZ assets held by off-shore investors. It is extremely poor business practice and shows the incompetence of those managing NZ Inc.
By your logic even NINJAs get a mortgage. Reality at some point there has to be a cutoff, it was too high, now that's being corrected, though maybe they have used a sledge hammer.
They can still rent so no it doesnt go against a basic right.
The LVR has to be aimed at the FHB as a) they are bidding emotiaonlly as the real estate agents say. b) thats the start of the domino bidding up effect as per Steve Keen that shoves up prices and risk.
regards
Oh Good Morning our little troll......maybe you should read the Universal Declaration of Human Rights.....and in particular Article 17.
Article 17.- (1) Everyone has the right to own property alone as well as in association with others.
- (2) No one shall be arbitrarily deprived of his property.
If it is a basic Right to own property.....are the FHB not being arbitrarliy deprived the Right of that ownership by Policy? You might want to take into consideratin the NZ Bill of Rights of which I have previously posted clauses that apply.
Article 25.- (1) Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.
- (2) Motherhood and childhood are entitled to special care and assistance. All children, whether born in or out of wedlock, shall enjoy the same social protection.
As you will see.....housing is mentioned in the above article. Does this not mean that Governments have to ensure that no-one interferes anywhere that would impede this right?
Article 29.- (1) Everyone has duties to the community in which alone the free and full development of his personality is possible.
- (2) In the exercise of his rights and freedoms, everyone shall be subject only to such limitations as are determined by law solely for the purpose of securing due recognition and respect for the rights and freedoms of others and of meeting the just requirements of morality, public order and the general welfare in a democratic society.
- (3) These rights and freedoms may in no case be exercised contrary to the purposes and principles of the United Nations.
Article 30.
- Nothing in this Declaration may be interpreted as implying for any State, group or person any right to engage in any activity or to perform any act aimed at the destruction of any of the rights and freedoms set forth herein.
Politicians and bureaucrats need to keep out of the way of the common people and ensure that the Constituational Documents are adhered too at all times.
This guarantees that the common citizens can exhibit control over their destiny and if there are events that occur like, health, unemployment etc then you are entitled to assistance from the State. So a Politicians role is to ensure at all times that they keep the hell of the way and ensure that people have the necessary freedom to make their own way in the world. Failure to do this places thousands of people unecessarily on some type of benefit or top-up etc......who the heck wins in that situation?
I find it amusing that you detest regulation and Govn interference, then quote me a "leftie" (UN) piece of it.
Practically though not everyone can own and the piece doesnt say where you can own. So yes sure buy in say the sarah Im sure adequate sand is affordable even by the poorest of us.
So no FHB's are not being deprived IMHO.
And frankly I think the UN is a bunch of ga ga's.
So then by your follwoing of this even the un-employed have the right to buy.
Who then pray lends to them? Private business wont, so you and I the tax payer?
Im sure the thought of you the tax payer paying $s on say a 60 year mortgage for an unemployed person who will never work to buy will make you spit nails.
then you blame the Govn for topping up!
funny, you should go on stage.
regards
So how is the unemployed person going to buy a house the UN says they are entitled to? or who provides the house at teh price they can afford to pay?
Maybe we'll build them nice houses on you land for free?
Interesting how you can argue to the most pedantic point of sillyness when it suits your mindset.
Sahara desert.
regards
PS I regard most of the UN's wish list of stuff like this pretty much un-realistic, nature doesnt grant it, a society does but also there is responsibilty and sustainability.
PPS Now if they'd said right to shelter, yes OK no issue, right to ownership, no I dont agree.
Maybe if you weren't so lazy you would read article links as suggested by posters. It seems you want everything done for you.
Article 23.
- (1) Everyone has the right to work, to free choice of employment, to just and favourable conditions of work and to protection against unemployment.
- (2) Everyone, without any discrimination, has the right to equal pay for equal work.
- (3) Everyone who works has the right to just and favourable remuneration ensuring for himself and his family an existence worthy of human dignity, and supplemented, if necessary, by other means of social protection.
- (4) Everyone has the right to form and to join trade unions for the protection of his interests.
If you have the right to work and take care of yourself as the other articles describe there should be no need for State assistance.
The State is meant to ensure that legislation and policy doesn't encroach on any of the Articles outlined in the Declaration. The Declaration also provides for those who are not so fortunate due to e'g' health, disability who cannot provide for themselves who will need assistance. State housing is able to take care of these people.
The easiest way to protect against unemployment is to deregulate........give people freedoms so they can be creative and innovative.
Factboy - The trouble with "Kiwi's should be looked after in their own country NOT foreign interests at all costs" is everyone has a different interpretation of what that should mean and how we should apply it.
I believe that it is imperative to give people the opportunity to be in a postition to be able to take care of their own needs as everytime there is State interference we end up with stupid policy or incompetent administrators.
At the end of the day a country is only as wealthy as it's poorest citizen.........we can try and fool ourselves otherwise but fact is we are only as strong as the weakest link.
There has been no Political will in NZ to see a wealthy population......most Politicians have a "feed them a fish" mentality.......rather than a "let them fish" mentality........voters seem to keep taking the bait hook, line and sinker.
National allowed the LVR limits to be applied, they did request that FHB should be exempt which makes me think that the RBNZ had the ability to apply the LVR limits in many directions. Why did the LVR restriction only apply to FHB's? Is the RBNZ exempt in some capacity from complying with the documents that make up our constitutional framework?
If the RBNZ are not exempt from the Constitutional documents,......are they leaving themselves exposed to litigation by FHB?
There is no noise coming from the opposition benches but that is not unexpected given the amount of stupidity that these Politicians exhibit. I would rather NZ have all independent MP's and none of this list MP rubbish. It is simply easier to see if an Independent MP is working for the citizens as outlined in NZ constitutional documents or against them.
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