Prices at Barfoot's auctions ranged from $315k for a modern house in Hikurangi to $2.29m for a 2brm apartment in Herne Bay and houses in Matamata were popular at Bayleys' latest auctions

Where are they listing these? Trademe has 18 listing in total for Kohimarama, and a quick filter shows next to nothing for family homes.

Mark my words, it's clear Taxinda is targeting investors only. She's ruled out any taxes on family homes, the land under it and this morning ruled out inheritance tax. We are entering a period for increased investment in owner occupied homes and less investment in rentals. If rental properties are held, they will get the absolute bare minimum upkeep as any improvements are likely to be taxed when the property is sold.

Interesting observation. As you say, in the now likely case that labour wins there will very likely be a flood of properties to the market in the short term, sending prices downwards. However following the implementation of the CGT, and additionally their extension of the bright line test to five years could well see the listings dry up - ironically this could actually push prices higher.

Hi DGZ,

Top of the morning to you!

You could be correct. I certainly don't dismiss what you say.

Problem is that after implementation of a Capital Gains Tax, people are going to be reluctant to sell. And that will mean a reduced supply of property going on the market - and increased house prices.

Is that what Labour voters want?

See my post below. I worry that Labour is showing all the hallmarks of being an imprudent, populist government (if it gets in on 23 September).

Any changes to tax wouldn't happen until at least the later part of 2018 (except extending the bright line and banning foreign speculators).

But anyway, why anyone would speculate on an asset that has such low liquidity and is so politically sensitive is beyond me (greed and delusion I guess). This bubble has been madness on a grand scale. It was always going to unwind no matter who was in Government.

.

I was about to give him a spelling lesson myself.

No wonder he couldn't remember his stance on the Springbok tour in 1981. No chance to poll Kiwis first.

He was essentially NZ's version of Donald Trump (rich white older male that wanted to take people for a ride and to boast one's own ego) - but with a better mask making it more difficult to see the real person...

Bill English did what?

Michael Reddell has been regularly repeating that NZ did not have a GFC crisis to get through

Inclined to believe him more than you

anyway - For 7 years National have been claiming it was John Key

Tothepoint ? Hardly
The NZ & AU banking system were not involved in subprime mortgages or derivatives involved in that sector.
They did not have exposure to the CDs sold around the world
It was Johnny Key who helped the ASB get overseas funds to help get NZ through during the banking systems
temporary break.

The world doesn't take JKey seriously now either after his ponytale pulling went global
Never ceases to amaze how some of the smartest people let a fetish catch them out

In April, Westpac analysed the opinion of the "pundits" and said this;

"The feeling among property commentators is that, in mid-2017, we’re at the top of the clock. Infometrics calculates its own property cycle indicator, and chief forecaster Gareth Kiernan says he thinks it’s about half past 12"

This is the opposite of what TTP has suggested. The consensus (as observed by Westpac) is that we have only just edged past the peak (ie 12 oclock on the property cycle clock) and that we have almost as far to go, as we have come, before we reach the bottom of the cycle. No one is suggesting how long that will take but previous property cycles have taken between 2 and 4 years to go from peak to bottom.

https://www.westpac.co.nz/rednews/property/where-are-we-on-the-property…

Hi RichMuhlach,

If you go back to earlier this year (or from about mid-2016), there were plenty of people here anticipating tumbling house prices through 2017. And, of course, it wasn't just in this blog: many other fora attracted similar comments. Admittedly, much of it was wishful thinking.......

Never mind: people are entitled to have their say. And I don't hold it against any of them.

I'm not singling out people - as that might only cause them embarrassment now. There's no need for that sort of thing. But you're welcome to go and search the historical threads for yourself.

Certainly, to assert that nobody here talked of house prices falling through winter 2017 (or autumn 2017 for that matter) is not credible. People talked of a major correction in house prices (particularly Auckland) as if in a desperation. And some of them still persist with such prophecies, as we're all aware.

RichMuhlach - you've been coming here a while now, so you should know better.

I'm very similar to you ex-expat. I have zero debt and save every penny. However, I will be voting Labour this time.

Winter is coming regardless of who sits on the iron throne. I mean, whoever forms the government will have to face the end of the cycle. However, IMO National policy over the last 9 years has left us ill prepared for the end of the cycle and that is why I won't be voting for them this time.

If Labour extend the bright line test to 5 years, this will only effect a small number of people, mostly the speculative investor. They aren't applying CGT to the family home. I don't understand the hysteria.

Recession is not necessarily a disaster for those in debt, as tends to reduce interest rates. I note the US 10yr treasury yield is falling and Fischer the most hawkish member of the Fed has resigned. The big issue being grappled with is the failure of Phillips curve regarding inflation/ unemplyment rate trade off, talk is the Fed may move away from this model. The Phillips curve has been the model pushed by hawks to justify increasing the Federal Reserve rate.
From my own GFC experience if you do something useful re:employment, you remain employed and suddenly find the cost of everything falls, more sales in stores, tradies etc cheaper, mortgage interest rates decline and you have more disposable income. Say unemployement expands from 5 to 10%, this means 1 in 20 people lose their job. Add to this approximately 1 in 5 self-employed people whose income falls and you find that 75% are on the same incomes and relatively better off. This is not often written about, I first read about this with regards to the US depression, where this was the outcome for many but was not discussed as was not PC when many others were suffering. You will find that there is a lot of dogma regarding this causes that, that does not necessarily pan out in the real world. You just need to keep thinking, and see what others can't. This is the reason I'm in my early 40s and watching the NFL with my teenage sons rather than in an office or stuck in traffic. Note I did not make the majority of my money from property, though I have made money from property, principally through anticipating the decline in interest rates post GFC and the effect this would have on asset prices (insight derived while building a timber fence in 2010).

I'm recommending establishing a new cost base in order to create future losses

Exactly - should a prolonged downturn occur a poorly introduced CGT raises enormous tax credits or refunds or postponed tax entitlements - and ties the hands of the next administration - becomes a dead-end

Nice - like your thinking - only works for loss-making activities - full equity ones escape