Olly Newland gives seven reasons why he thinks the property market may get the speed wobbles this year

Olly Newland gives seven reasons why he thinks the property market may get the speed wobbles this year

By Olly Newland

Over the next few months much heat and light will be generated by the politicians from all sides and as usual the truth will be lost in the fog of battle.

It should come as no surprise then, that the property market ( and other markets ) may get a serious dose of the wobbles especially if the polls remain tight.

Investors, who can keep there cool, can do very well in these times, as those who panic may well offer up bargains to them.

Remember the GFC where the stock markets tanked to levels not seen in decades?

The canny investors who bought then have made a killing, and so it could be for our canny investors in the months to come.  

Here are some of topics that will worry the market as we head towards the elections and the aftermath:

(1) Will interest rates go up, stay steady or maybe go down?

The Reserve Bank has made it clear that there is more pain to come with higher interest rates promised very soon.  

This may well end up with the building industry stalling in its tracks.

On the one side we have those demanding more affordable houses while on the other side the goal posts as shifted by increases in interest rates.

First home buyers or those wishing to build or buy a new house may well cancel the idea when they calculate the interest they may be paying on their mortgage.

The result could shake the building industry, which in turn runs down through the suppliers, trades people and even the workers whose jobs get lost making the market even more nervous.

(2) Immigration is on the rise

Once again we have the various factions demanding either full controls on immigrants, or an open door policy or something in between.

The number of immigrants expected to arrive over the next 12 months could be well over 40,000, a complete reversal of what was happening only 2 or 3 years ago.

What makes it hard to calculate is whether the immigrants are ex-pat Kiwis returning home, overseas families uniting with family here, or just plain immigrants looking for a better life. 

What is not known is whether the extra houses will really be necessary for them, or whether they already own a home or, instead, plan to stay with Mum and Dad.

Popular belief thinks that Asians are the main source of immigrants when in fact most immigrants come from Australia, Europe, and the UK.

Whatever the truth is, the immigrant push will pressure house prices upwards as the majority of immigrants are unlikely to be poor.

Any control, or threat if control could have people considering immigration to New Zealand more quickly so as to get here before the door shuts. 

If this occurs the calls for curbs will get louder leading to confusion in the market on whether to buy now or wait.

(3) The Reserve Bank LVR regulations 

These rules require people to have 20% deposit before being able to buy a home and has been spectacularly successful to date in cutting out swathes of first home buyers.  It has put upward pressure on rents, and skewed the statistics towards an apparent lift in house prices as the affordable ( i.e. cheap) end of the market takes a hit. 

As the months pass the issue will become hotter and hotter as many see this rule as hurting the very people who need a leg up onto the property ladder.

We now have the bizarre situation where a young couple, setting up a home can go to and rack up tens of thousands of dollars of debt on no-deposit motor vehicles, or no-deposit, no-interest, no-payments for 24 months for household goods, appliances and furnishings, all of which will be nigh on worthless 12 months later - but can’t buy a house to put them in that will at least hold its value and make for happier families.

The heat and light the LVR rules have already generated will confuse the market even further over the months ahead.

Already there have been stories of young people forced out of the market by what seems unfair treatment and no doubt more of these stories will emerge in the near future.

(4) The introduction of a Capital Gains Tax

This is being heavily promoted by the Left and will be big issue as it is being touted as the means by which property speculation will be curbed and house prices lowered.

The mantra has been picked up by some respectable economists, few if any of which have ever owned investment property in their lives.

The  fact that many other countries have a Capital Gains Tax has not stopped those countries having spectacular property bubbles despite the tax.

At this moment Sydney is experiencing one of it biggest house price bubbles and the usual clap-trap of an imminent bursting of the bubble is being forecast by the same types of academics as here.

In the USA prices are firming rapidly despite the big downturn they had some years ago (caused solely by toxic mortgage securities) and that country has an array of eye watering capital gains tax regimes.

England too, is in the midst if a “Super Bubble” with prices rising 20% on an annual basis and it has harsh Capital Gains restrictions but that hasn’t stopped anything.

For any such tax to work it must apply to all property, private and investment or not at all. Over 80% of the market consists of private sales so trying to control a small part of the market while the rest of the market goes free, is futile.

The fact the speculators are already taxed  seems to have been over looked in the reasoning why such a tax would be needed.

For some reason - no doubt political - only the property market has been singled out to be punished by such a tax.

What hasn’t been pushed is the fact that any capital gains tax would also apply to the sale of shares, inherited property, the sale of businesses, farms and even on any part of your home should it be used for business purposes.

A Wealth Tax In Disguise:

What a GCT is really a  rebranded 'Wealth Tax' combined with a dash of  'Death Duties Tax” dressed up for public consumption as a tax on property speculators.

What this 'Wealth Tax' would do is take more off the hard working top to give away to others lower down whether deserving or not.

It is proposed at a 15% tax rate but who says it would it would stop there? Any hungry Government could increase it to 20% 30% or 50% at a stroke of  a pen.

I have written before on this topic and invite readers to refresh their memories here.

Read the policy here.

What is also interesting is the notion of 'grandfathering' assets such as property which means that assets purchased or held before the enactment of a CGT will not be taxed while those purchased after enacted will be taxed.

When this becomes well known it is likely there will be a rush of buyers into the market to 'grandfather' as many assets as possible before it is too late.

What that will do to the market can be imagined.

We shall have a split market of “before” and “after” and the distortions will be horrendous and lead to some nervousness when the down stream effects are analysed

(5) Politics

As the elections approach, and the various political parties ramp up their promises and threats, it is very likely that the residential property market may experience some serious wobbles.

Prices could rise and fall, statistics may go all over the place and commentators from the Left and Right will be pushing biased agendas so as to influence voters.

And they will have plenty of agenda to push.

Every Poll which shows this or that party making gains or losses will add to the wobbles.

The influences that now push and tug the market this way and that, give the different factions more opportunity to create uncertainty and confusion as we head towards the polls.

(6) WOF for Rentals

Recently a report came out that stated that the vast majority of rental homes were not up to standard, and straightaway the call is for regulation and warrants of fitness for private rentals was called for.

Apart from slum landlords which deserve a thrashing, any upgrading of rental homes will be a cost on the landlords and must push up rents.

How to decide why this or that property would fail its WOF is still a mystery and begs the question that of a rental home is no longer up to standard, may the Local Council should bear the cost, as it was they had signed the property off as fit for habitation at some time in the past. (Shades of leaky homes.)

This subject will no doubt be raised again in the near future as a part of the whole “Housing Crisis” debates so it will add another layer of stress onto the investment market.

(7) The Likelihood of Rents Rising

As interest rates rise and the rhetoric gets louder many investors will be looking hard at their rents and be raising them at the first opportunity.

The thinking will be “if there will be a capital gains tax, plus higher interest rates, plus a WOF regime then I might as well get a return from the property that makes it worthwhile to keep it.”

Andrew King,  the very well informed and sensible New Zealand Property Investors Federation executive officer summed it up nicely in this article which was - as is usual - buried in yet another “shock horror” headline.

The growth in value may still continue, but the vast majority of investors will not sell if they face taxes and other punishments.

Rents have lagged behind property values for year and and a catch-up is due any time soon.  

The catalyst could well be the unholy brew of higher interest plus all the other factors outlined above.

Should rents rise you can just see the clamour from the Left with calls for yet more controls and regulations to be imposed on the “rack-renters” which will put even more pressure on landlords to “get in” before the axe falls. 

Is there is a housing shortage at all what is what is driving all the arguments? 

It is this constant drum beat that there is a “crisis” that is whipping the screamers into hysterics.

In actual fact there is no shortage of houses in Auckland or the rest if the country for that matter - with parts of Christchurch maybe being the exception.

For the record there are over 1,500 2-3  bedroom affordable houses for sale on Trademe under an $400,000 in the greater Auckland area today.

These would house up to 5,000 people immediately.

This excludes apartments, units, sections or listings on other websites.

And - wait for it - there are another 25,000 more such affordable houses for sale throughout the country.

So the two questions that need to be asked are: 

What shortage and why the fuss? 

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Olly Newland
www.ollynewland.co.nz  Used with permission.

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Olly makes a good point regarding CGT taxing everything. David Parker was asked whether the public realise a CGT will impact more than real property, and he was adamant the public was aware.
 
If a CGT were to be enacted, I agree that grandfathering CGT assets is a bad idea. Instead there should be a valuation date (being the date the legislation is announced) and gains are measured against that date.

"CGT on everyting is fair". Insane and iniquitous unless you constrain future credit creation via a restoration of the gold-standard. Yet no contemporary government that introduces CGT is ever going to willingly allow the market to liquidate excess debt via asset deflation - because to do so would cut off their supply of tribute which they will cynically justify on the basis of nominal rises in property prices etc.
 
The second "Mr Market" attempts to restore equlibrium to our absurdly over-priced properties what will government do? - they will open the flood-gates even wider to yet more immigration. In proportionate terms this is already running at some ten times the number which caused British parliamentarian Enoch Powell to make his infamous speech in 1968. Imagine the social tensions as elderley Kiwis find themselves forced to sell their properties to meet - what will inevitably become - an unrealised CGT over time. Why were they forced to sell - because mass immigration inflated the nominal price of their modest home even as "Mr Market" tried to deflate it.
 
Savage deflationary forces are building - particularly as governments try to hunt down every Dollar, Pound, & Euro in circulation. The parallels with the fall of the Western Roman Empire are noteworthy. What happens when "Mr Market" finally overwhelms politicians attempts to keep asset prices artcifically inflated? Do they just declare your two bedroom unit to be worth a million and thus your "tribute" to be paid is X? After all, they even claim dominion over the climate so mandating perpetually rising house prices should a piece of cake. Ultimately do they stand on street corners handing out freshly printed banknotes with trillions printed on them to try and inflate assets? - so they can then take tribute (probably insisiting on some "hard" medium of exchange, just like the Romans did when the treasury refused to accept its own worthless currency in payment of taxes).

Much of what else you write seems confused. 
Personally I think all  profit should be taxed, so that includes shares and gains on the family home. To compensate for that however other areas that are heavily taxed to get the revenue should be dropped so the change is neutral.
In terms of "tribute" or rates on a home its actual value does not matter. What rates is determiend on is the income needed and relative prices. So in a deflation event rates wont change in NZ (all else being equal) unlike the US which is I believe based on its price.   A CGT isnt realised until teh home is sold, hence elderly NZers successors pay the CGT.  If of course the price is higher than when bought.
Dominion over the climate? no idea over the conext here except if its climate  change, well science says yes its caused by us.
Inflate assets by handing out notes? that has already been done, in the last 6 years via QE and this is the mess we are looking at.
Savage deflationary forces, I'll agree here but that isnt due to the Govn looking for $s. After the event that will certainly occur, the few with any value left in their wallets will indeed be hit by desperate Govn.
regards
 
 
 
 
 
 

other areas that are heavily taxed to get the revenue should be dropped so the change is neutral.  Curious steven - what are the 'other areas' that you see should be dropped if tax is paid on all profit?

In terms of taxes - and a FAIR system overall, why not (re) introduce a 5% STAMP DUTY on all house sales?  A win win situation.
 

 

In terms of taxes - and a FAIR system overall, why not (re) introduce a 5% STAMP DUTY on all house sales?  A win win situation.

 

 

Searched 2-3 BR house 250-400K , Auckland city,All suburbs got 28 results
Searched Auckland , All districts 250-400K , got 611 results.
Olly am I doing something wrong???

You need to include, Units, townhouses and apartments in the search. Not everyone can afford a "house" but can afford a unit.

Thanks Spin83 I re did my search, this still includes some sections only, not sure about leasehold.
Searched 2-3 BR 300-400K , Auckland city, All suburbs
Apartments 207
House 25
Town House 15
Units 39
Generally the Townhouses  & Units were hi density with no outside area for kids
Apartments speak for themselves.
So that leaves 25 Houses..........still.........In the Auckland city area.
 

If you read what Olly wrote, he actually said "excluding units, sections.... etc"
So if you search for houses and townhouses, I searched myself just now and came up with 667 and that was without specifying the amount of rooms.
For some reason, on the trade me website if you search between any and $400,000 it includes any price right up to $500,000, so if you want houses UNDER $400,000 you have to search between any and $300,000.  

The talk of CGT , even though I will never be affected , is enough to ensure I never vote for these losers

By voting you automatically make yourself a loser.

This willful persistence at looking through at pinhole by those arguing this point is tiresome.
Why would it be assumed or insisted that a FHB is entitled to or requires a 3Brm standalone house in the actual suburb of "Auckland city" or any adjacent?
Intelligent folk would consider this a ridiculous notion and moderate their property search with some broader parameters.
As for this whole "...rents must rise..." mindset, it's the closest we have to a free market, ask too much and tenants vote with their feet, no distortions there.

Also fun for those miffed at why they cant find cheap stand a lone houses in auckland city...
Try doing the same thing for paris.
You pay 500k for a shoe box apartment in paris. A house? If you're a movie star according to a friend who lives 1 hour train ride from paris city center (and the uni he comutes to everyday).

But cities the size of Christchurch in France have houses that are half the price of ours. Why is that?
 
Why is it cheaper to build a proper, warm house in populated dense counties like Germany than it is in sparsely populated NZ?
 
If you could build cheaper in NZ would that stabalise house prices? What stops us from building cheaper? Squiggles on maps? Lack of decent infrastructure to access cheaper residential land? Lack of decent alternatives to Auckland? Lack of competition in the residential land and building supply markets?
 
We all know that we could make it a lot easier and cheaper to get on the housing market if we addressed the above issues but for some reason the government has chosen not to.

Change the search to three bedroom properties under 300,000 euro in the lovely province of Marseille and you will get plenty of options. Also doubt this is a bargain website that locals use.
 
 

According to Demographia Marseille population density is 3000 and Chch is 2000. Having been to these places and having access to Google earth this is obviously complete bollocks. There is no way Marseille is only 50% denser than Chch
 
Looking at Wikipedia: Christchurch Urban density 620/km2. Marseille Population2density 3,500/km2 
 
 
More evidence that low density sprawl is the only solution to high prices - not.
  

Where did I say that Marseille was denser than Christchurch. I think the cost of living is much less, especially housing. Check out numbeo.com

Where did I say you said Marseille was denser than Christchurch?
 
You point out housing is cheaper in Marseillle, then go on to argue that if we were allowed more sprawl we could have cheaper housing too. Missing the blatantly obvious - Marseille's affordablity is not a result of unrestricted sprawl (which they are not allowed). However it might be because they are alowed density.

http://www.green-acres.com/en/properties/departements/75.htm
 
Prices are in Euro so x 1.6 to get NZD.  Used to be x 2 to get NZD, prob be back there sometime soon.
So 2 bed apartment for 450k euro = 720k. 
Houses? in millions of euro's

Precisely. Yes houses are expensive compared to rents or income in NZ but compared to property prices in other cities around the world that I would consider living Auckland property prices are a bargain! If I'm not buying in Auckland my next choices would be Melbourne, Singapore, Hong Kong, London... 

Why are you comparing Auckland with Paris?  Population of Paris is 12 million people!
 
Compare Auckland with Marseille, or Christchurch with Lyon.

Marseille: $5,200 /sqm for apartment.  Similar to auck.

Buy Apartment Price

[Edit] Avg.

 

Price per Square Meter to Buy Apartment in City Centre

3,220.00 €

 

what is their definition of "city centre"?  
 
It would be useful if they indicated how many entries users have added for each city.  Relying on user input data, for all we know one person put in a price and that's it.

People forgot to mention the average wage in France.  If you are agraduate, lucky and in a good job, your average wage would be about 20-25K euros..then tax will be in the high 30% - now try to buy a 300,000 Euros on that!

.

The data they have for Auckland for instance looks very low.
entry level 5500sqm
http://www.trademe.co.nz/property/residential-property-for-sale/auction-...
 
higher end 8200sqm
http://www.trademe.co.nz/property/residential-property-for-sale/auction-...
 
Yet numeo claims 4900sqm

While people seem keen to argue about the relative affordability of particular cities. I just want to point out that the OECD report that kicked this all off is talking countries. Tokyo is expensive to buy in, but Tokyo is not Japan. Paris is expensive, but Paris is not France.
Just so long as everyong is clear this discussion has nothing to do with the issues raised by the OECD report.

David Chaston and co, could we please have some accurate figures published on the number of houses in Metropolitan Auckland priced under $350k or $400k and compare them to Key's and Newland's numbers which are completely erroneous.
 
As pointed out on my comments on other threads, if you search up to a price on trademe, it actually gives you all listings to the mid point of the next price bracket, ie search to $400k will give all listings to $450k.
 
Also all unpriced listings (where the vendor/agent left the price indication blank) come up as being priced as the minimum $100k range which actually make a large number of the listings in any such search.
 
Excluding apartments, leaseholds, relocatables, and the areas outside metropolitan Auckland, leaves under 100 listings of actual houses or townhouses.
 
To do this quickly, search house or townhouse from $150k to $300k (gives up to $350k) with 2 beds or more.  Result is 269 listings.  Then go through and exclude the rural areas, apartments, leaseholds and relocatables by reviewing the ads and under 100 are left.
 
How can falsehoods and lies be published as the truth like this, by Key and Newland?
 
 

How can falsehoods and lies be published as the truth like this, by Key .. ?
 
Hard to fathom isn't it..  

David Chaston a whole article with a heading like "The real number of three bedroom properties for sale on Trademe in Auckland" please. Can't be that difficult, Chris_J has done most of the work. Not to publish the counter argument could be interpreted as a bias in your reporting...... Sorry if this creates work for you, maybe you could ask Chris_J to write it.

You are right -the figures are wrong becuase they are far far too conservative.
At this moment there are 2833 properties for sale in Auckland area for sale under $400K.
The add to that those iisted on other websites e,g, Reatestate.co and all the licenced agents websites as well. 
There will be over-laps for sure so the exact number will never be known. but the fact is that there are plenty of cheap dwellings for sale right now whatever the number.
Notch the price range up to $500K ( stilll in the affordable range) and the numbers for sale increases dramatically to well over 4000, enough to everyone looking to buy.
Likewise for the whole of NZ, there are over 30,000 houses for sale under $500K
If you keep on excluding this, that or the other type of property you could easily end up with zero so your argument is nonsense..
What shortage?
 

BigDaddy that is a complete load of nonsense, you know it, and to proclaim such lies as fact is disingenuous at best.  If you are Olly Newland, you should hang your head is shame because unless you are unbelievably stupid, then you are displaying a complete lack of honesty and integrity, which undoubtedly mars any other statement you make, past, present or future.

BigDaddy, leaseholds and relocatables are not houses.  Sections are not houses. Apartments can not really be considered houses for the purpose of this discussion, especially not ones under 60m2 or so.
 
The facts are simple count the number of sales of 3 or more bedroom properties in metro Auckland that are under $350k as a percentage of total sales, then tell me there are thousands available...

David Chaston perhaps you could end this nonsense?  
 
Simply get from REINZ the number of sales of 3 bedroom properties in metro Auckland over the past 6 months sold for $350k or less.
 
This will exclude the shoebox apartments but allow the house size apartments or units.  Leaseholds will still need weeded out, but most of these can be identified by sale prices as a fraction of the RV (since the land is not included in the sale).  Only urban suburbs should be included not Waiuku, Mere Mere or Helensville or Warkworth etc.
 
I suspect that sales will only be a few hundred out of the 15,000 or so in the region over the past six months.
 
Please find us the truth!!

Don't hold your breath Chris_J

So Olly is BigDaddy?

different personalities, same person ?  :-)

Haha. Been there. Done that.

LOL. Me too....

I wish.

Well if you're not the same person, he's just ripped off your comment and put it in this article without attributation.  You should have your laywers send a demand for a share of the ad revenue.

"What this 'Wealth Tax' would do is take more off the hard working top to give away to others lower down whether deserving or not."
 
Oh those poor, struggling "hard working" top - they have it sooo hard in NZ!  How dare someone try and take their hard earned (tax free) speculative income and give it away to those "lower down" who don't deserve it...
 
You opinions are almost Feudal Ollie!  You're literally saying that those with less are beneath you, it's incredible!  As for the facts - New Zealand is alone in the OECD in not having a CGT and the IMF says it's contributing to inequality.  With all due respect, should we take the IMF's opinion on this matter, or a kiwi property investor?  Also we have the lowest tax burden behind Chile - wealthy people have it sweeter here than almost anywhere else!  Stop with this nonsense that wealthy people and more precisely, property speculators, work harder than other New Zealanders - it's offensive dribble.

Nice one, glad you beat me to it.
 
From my posts here Olly, or Big Daddy, is not unadvised on the principle of unearned income (rent). To claim hard working for something they didn't work for at all is dishonest, he must know he is creaming it to others disadvantage.
 
I have pointed out before that unearned income is not different from the proceeds of a crime, hence property investors are criminal like in their behaviour.

Quick look/educated guess shows maybe 150 -200 3bed houses, freehold, mostly papakura clendon park type areas under 400k. Excluding waiuku type areas as probably closer to Hamilton than Auckland.

10.9% unemployment in france also. My friend from paris had a very dim view of getting a job or making a living in france. Big fan of NZ though

Anyone that thinks Olly actually believes this rubbish is beyond gullible.

If you think Olly's points are "rubbish " then take each one of his points and present your logical arguments against them.
Bet you can't and bet no one else can either.
He is pure logic while you, and others like you, can only scream obscenities.

I’ve got better things to do with my time, but point 2 he appears to be arguing prices will go up rather than down, and it’s almost the same for argument 3 if the LVR comes off again.
Point 4 is mainly just an excuse to go on a little rant, and to try to push his own agenda.
It’s mostly just rubbish not even worth taking seriously, all his blogs are the same, just his opinions that are based around pushing his own vested interest, always have been, always will be.

Pure logic my ****, completely devoid of it in fact.
1. interest requires growth, which in a finite system can't be sustained. Interest is simply a wealth transfer mechanism and the interest rate reflects the amount of distribution available. As resources deplete interest rates will decline. Get that!
2. Is isn't the immigration but the money that follows. Start importing poor Islanders for menial labour (as we used to) and see what happens to the house prices.
3.Did the LVR confuse the market, or was the market confused without an LVR. Fallacy.
4.Captial gains tax is a tax on a theft. See #1 An unearned income tax would be more appropriate.
5. Polical. Bob Jones states that property always does better under labour, but I suspect that in the last throws of the parasitic financial system it is beyond the partisan line.
6.The ability to pay rent is based on economic fundamentals, not the wish of landlords. What don't you get about that Olly.
7. Haven't heard about liquidity in this article, Olly and other property investors are going to find out about that pretty soon.
 

BigDaddy, your points are irrelevant if you use false statistics to underpin your claims.
 
How can you possibly argue there are properties available in Auckland in the numbers you suggest, when there simply are not.
 
You are factually incorrect and need to realise repeating nonsense does not make it true...

In regards the remainder of the article: "Olly's 7 Points", these demonstrate an incoherence and total lack of understanding of the issues facing the Auckland property market.
 
Arguing that there are factors which could push the market up or down and that these "wobbles" will sort the housing crisis is entirely nonsensical.
 
Prices in Central Auckland will continue to rise as continued unsustainable migration and an eventual majority takeover by foreign born residents drive prices ever skyward.  Interest rates, capital gains taxes, LVRs or anything other than migration are all irrelevant to the "heading skyward" certainty.  The introduction of a CGT would actually drive prices higher in Central Suburbs as investors would opt to never sell, hence further cutting supply.  LVRs are largely irrelevant as FHBs can't enter the market due to astronomical prices anyway.  Politics are irrelevant to this sector of the market, as are interest rates by and large.
 
As an investor who has many dozens of properties (we gave up counting), we have made tax free capital gains in the eight figures while taxable earnings over the same time are about break even.  It is a ridiculous situation and honestly I would have preferred lower and slower capital growth, rather than another rapid house inflation cycle which is not yet fully cooked.
 
With current policy settings the only advice can be: buy and never sell. 

How can you get tax free capital gains if you own dozens of properties as this would tier you as a property investor. This can only be illegal got gains if profit was made tax free? IRD may let you own maybe 3-4 properties before you are property investor (they dont really say) but would be about that much if they took you to court...

There is a difference between a Landlord and a speculator, at least at present with the IRD.
regards
 

Keywest, investors do not pay tax on capital gains irrespective of the scale of the business unless they are involved in trading.  Technically I am a developer as well, and therefore my investments are tainted by current rules, but I keep everything for at least 10 years and in fact have not sold any investment properties yet anyway (only have sold developments or trades which have been taxed at ridiculous rates close to 45% when GST is included).  Taxable profit on the investments overall is neglible despite colossal capital gains.

the distinction between investor and speculator is your "intention" at the time of purchase.  If you purchase it with the intention of turning it around and reselling for capital gain, then that's trading and taxable income.   If you intend to hold it as a long term investment, then the capital gain is not taxable, regardless how long you actually hold it.

From a poster on Olly's website who can see that he is right (as always),and the screamers are wrong:
 
"I totally agree with you Olly. As a property manager who is prepared to house undesirable tenants with poor credit and rental histories I shudder to think what will happen to these people when all of the intended disincentives come into play. The moral high ground is pretty slow to house groups of 18 year olds starting out together. Who holds their hand up to house people being released from the sex offenders jail like I do. Who is prepared to house people that are so unsociable that they can no longer wish to be housed in supported care. Who is prepared to provide commercial space to welders, distributors and struggling small retailers.
It is about time society recognized those of us who do the difficult things in life and took note of the long hours we put in."

Could Olly's actually define his argument??
 
As I understand it, he argues that there is no lack of affordable homes in Auckland and the market in the short term is correcting itself anyway.
 
As I see it both of these points are wrong.
 
1. Property prices still have headroom is this boom.
and 2. There are very few properties in the sub $400k range in Auckland, except in the least desirable areas of South Auckland.
 
I fail to see how the quoted comment above supports Olly's argument.  Obviously Olly is terribly confused about what he is arguing!!
 
There is no doubt house prices will rise with increased migration, as will rents (look at the effect of supply issues on rents in Chch).  CGTs, WOFs, migration, rising costs, rates etc will all send rents up, there is not much dispute about that.  The only questions are: is there plenty of supply of cheap Auckland houses, and will the market sort itself out in the short term without another price spiral or further price increases?
 
Despite what Olly argues, the answer to both questions is NO.  And Olly is loopy if he thinks otherwise.

Heck Chris_J, you ain't half been vitriolic in your posts criticising Olly Newland (aka Big Daddy).
What's eating at you? 

Maybe but Chris_J is a clever 'son of a gun'.

Your Landlord, unfortunately I can't stand people being dishonest or saying things that are not true!
 
Hence even though I largely agree with Olly in general, I can't let him get away with such patently false comments.  For the same reason I am not impressed by the current bunch of National MPs, Key and his Ministers who routinely talk codswollop.
 
When quoting facts, you are either right or wrong.  Why can't people just be honest?

Olly Newland has been rather accurate in his predictions in the past, so he should be taken seriously.
What worries me more than NZ-specific factors is the global financial system. There is much more debt now than at the beginning of the last (still ongoing?) financial crisis which was supposedly triggered by too much debt. This means that either the governments and banks will somehow get into our purses, or there is a serious risk of massive bubble bursts all over the place which will also make a lot of people poorer.
The tragedy is that all the loot of the last decades has been pumped into sillier than thou "markets" but not into future industries. Abbott in AUS has just made a tiny move towards redressing this pathetic imbalance with his medical research fund, but probably too little too late.
What will happen to NZ when the next global financial disaster starts? Will it be regarded a safe haven or will investors pull their money out in droves? Remember, the EUR bought 2.55 NZD in 2009. Now more like 1.55. Those fluctuations have been wild and quick and unpredictable. Newland certainly also does not know. But maybe forgetting about the rest of the world makes for a better calculation. Who knows ...

Oily was predicting x 2 gain not long ago while quite a few of us were saying bubble and pop.  Now it seem oily has come around to our way of thinking, yet he's a guru? really?
Debt, (and its rate of change) yes exactly as pointed out by Steve keen and others for 6+ years.
The debt though is mostly private, yet there will be an expectation or need that the Govn be a lender of last resort to stop a societal collapse. Which without a banking system is a real possibility. 
"Bubbles burst all over the place", yes Fed cheap money has been pumped into every asset and commodity in sight and as a result they are all over-valued. Yes into shares causing a huge dead cat bounce.  I mean look at the P/E ratios, I cant see that investing in there as rational except on the premise of selling to a bigger fool. Tulip mania.
"research" well if you look at our pending energy problem the research money should be poured into reseacrh and deployment in this area to give our economy resiliance. Fossil fuel shortages and price spikes are coming, simple.
Next see  saw of the GFC is an interesting Q.  NZ is seen as a risky currency and the US isnt, yet NZ has resources and all the US has is debt...interesting how ppl think...or maybe dont. If we didnt have so much money in property, or the debt from that I'd think yes we were a safe bet and we'd see parity with the USD.  The problem is when our hosuing bubble pops I think we'll be lucky to see 0.5.
Will the Govn be putting it hands in our wallets? yes. I think taxes will get a lot more progressive to say the least...
regards

Even easier, build a 10m2 room (sleepout) in the backyard which since the end of last year no longer requires a permit.  Cost as little as $10,000 with second hand windows etc.  Rent of $100pw will give a 50% return.  Possibly connect to the house with an up to 20m2 pergola that also doesn't need a permit, and throw in a 20m2 carport for the tenant that doesn't need a permit either to get even more rent.

You can do something similiar with a caravan too and it can be bigger than 10m2.

Olly's MO is to throw out screeds and screeds of vague and contradictory ramblings which cover all the bases, so that later on, whatever happens, he can cherrypick the hits, claim he predicted correctly, and sit back while people who've forgotten all the wrong calls are fooled into thinking he's a guru.
It's a method that's been used by various charlatans for centuries.

OK did not know the disctintion between 'investment' vs. 'speculation' property, or the 10 year rule...

"For the record there are over 1,500 2-3  bedroom affordable houses for sale on Trademe under an $400,000 in the greater Auckland area today.
These would house up to 5,000 people immediately.
This excludes apartments, units, sections or listings on other websites.
And - wait for it - there are another 25,000 more such affordable houses for sale throughout the country.
So the two questions that need to be asked are: 
What shortage and why the fuss? "
As in America, there are usually a few fishhooks with the very cheapest areas. Either a horribly long commute is involved or public transit is subpar (many rural/regional areas), or unemployment and crime are very high (Detroit). Also, if you want to buy an apartment, the banks want much higher deposits than for a house.
Because of economies of scale and infrastructure factors, Auckland handles most of NZ's long-haul flights. Hence the bulk of the migrant influx stays in Auckland, and with it the imported know-how. There are justified economic reasons for agglomeration in city centres, but there comes a logical extreme where the regions empty out and the big smoke bursts at the seams.
And political leaders such as David Seymour and Cameron Brewer seem bent on keeping Auckland some kind of overgrown country town of 1.5mil (as opposed to a proper city of 1.5mil), the result being that snobbery comprises a big chunk of Auckland house prices. They and their ilk are the real NIMBYs, rather than the 'eco-Luddites'.

Big Daddy / Olly
I wish you would stop re hashing articles from last year or earlier without updating them. This is the second one of yours I have seen. The last one still had a 2014 date on it when it was re run on interest .co.nz a month or so ago. I am currently trying to buy a 'good deal' in Tauranga and the market here is hot. There is a shortage of property on the market and buyers are racking up prices as they compete against each other. ie There IS a housing shortage here and I suspect in some other parts of NZ. I have been in the property game a while and have weathered several bubbles and bought / sold and been through umpteen property deals. I am waiting for the current mini buying panic to settle.
Your references to CGT is from when labour were touting bringing it before the elections last year - the new leader has already said he won't be bringing it in - this could always change. You mention interest rates going up - they are going to keep going down. I am more interested in reading on what is 'projected' for the rest of this year and next year not rehashing old news. I certainly don't consider myself a guru re property. As for yourself being so well versed with property I am sure you have a stack load of knowledge to add in this area also. Please keep it current. Thanks