GUEST BLOG: Graham Cameron – A home is not an asset: the flawed belief of the property investor in selling our social housing

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If the admiring New Zealand Herald coverage given to Brandon Lipman’s ascension to his own property investment portfolio is anything to go by, the New Zealand mythology of the right to home ownership, the quarter acre section, has been decisively dethroned. The interregnum, a period of disquiet and uncertainty about the prospects for the middle class in a time of soaring house prices, has been replaced with a mythology of the right of the middle class to be property investors and landlords. The king is dead, long live the king.

I admire the segue: the core mythology of our society, that hard work and sacrifice are key to success, has been carefully uncoupled from home ownership and grafted onto property investment, previously regarded as only for the rich. You are now a good New Zealander if you have a property investment portfolio; conversely, you are not trying hard enough if you have one house and you’re positively subversive if you’ve been in one house longer than five years. If you’re living in someone else’s house or worse, a house owned by the State, you are a failed person, that most awful of personages: the bludger.

Enforcing acceptance of a new mythology that proclaims property investment as good and a right of passage for New Zealanders is absolutely central to the nation building project of neo-liberal economics. The selling of social housing and positive media coverage of property investment is not coincidental. A government that is run by corporates needs New Zealanders to exchange their belief in egalitarianism in which a home, owned or rented, represents dignity and the right to a fair-go for a belief that success through acquiring assets is what marks the worth and dignity of people.

In our community, roughly twenty percent of the houses are owned by Housing New Zealand Corporation, forty percent by private landlords and forty percent are people in their own homes. The twenty percent owned by the government are up for sale. The government wants to divest itself of ALL of the social housing in Tauranga Moana; 1,256 houses, currently managed by Housing NZ, gone.

One of the fallacies of the current statements about the selling of those homes is that they are to be managed by social housing providers and will not fall into the hands of property investors. I struggle to think of even one Tauranga social housing provider in conversation with the government who could buy houses without a formal working relationship with property investors. Any of those providers that has a sizeable property portfolio has had to work with private money. So of course those houses that are sold to social housing providers will be managed as an asset by property investors.

Then our social housing, like our private housing, will be subject to the great flaw in property investment: the house and property will be regarded as the asset whereas the real assets are the people who live in the houses.

Social housing was built for the needs of people; it was not built as an asset. It is instructive to consider the roots of social housing in our country as detailed in Dr Ben Schrader’s We Call it Home – A History of State Housing in New Zealand.

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Concerns about slum landlords and poor living standards led Prime Minister Richard Seddon to introduce the Workers’ Dwellings Act in 1905 to provide well-built suburban houses for workers who earned less than £156 per annum. He argued that these houses would prevent further decline of living standards and increase the money available to workers without increasing the costs to employers, as it would break private landlords’ control over rental housing. He noted that housing costs for everyone would decline as a result.

In the 1930s, following a campaign against slums by the New Zealand Truth, and the realisation that adjustments to mortgage lending was not an effective tool to encourage an increase in housing stock, the Finance Minister Walter Nash announced in the 1936 Budget that 5,000 state houses would be built. The government intended not only to provide housing, but to stimulate jobs and manufacturing with the construction of the houses, which were to be built from New Zealand materials as far as possible. The first state house at 12 Fife Lane, Miramar, Wellington, was tenanted in 1937.

Poor living standards; high rental rates; absentee landlords and property investors; ineffective mortgage lending tools; a need for greater housing stock. If our current situation wasn’t so dire, the inability of our current government to read a bit of history would be funny. The solution now as then to our housing crisis is to create homes, not sell assets.

Aside from our social need to resolve this problem, we have an international obligation to provide adequate housing. Article 25 of the Universal Declaration of Human Rights states that:

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.

This is expanded in Article 11 of the International Covenant of Economic, Social and Cultural Rights. In the legal interpretation provided in 1991, it was explained that this provided for security of tenure, affordability, accessibility, location, and cultural adequacy. This is not housing as an asset; it’s a home, the “right to livesomewhere in security, peace and dignity.” We are signatories who have ratified these and many other international treaties and covenants that affirm a right to adequate housing. Ratification means we should enact the agreements to their fullest extent.

I ask you to think of your home. The table where you laughed with your friends over a meal, perhaps a beer. The bed in which you recovered from a cold under layers of blankets. The ugly keepsake on the mantlepiece given to you by your child, by a niece, by a grandchild. The lounge where you sit with a glass of red or a cup of tea to read a book and watch TV. Walls that have enclosed and embraced your joys, your loves, your disappointments, your hates. Your home. For 1,256 families in Tauranga Moana, the Minister of Finance has declared their homes to be his assets to sell.

 

Graham Bidois Cameron is of Ngāti Ranginui, Te Arawa and Ngāti Hinerangi descent. He has worked and volunteered in community development for 15 years, and lives in Tauranga Moana. He is completing his Masters of Theology with Otago University.

 

33 COMMENTS

  1. Well said Graham, i have the NZHerald link you gave in your post at the top of my notes here and was intending,(again), to comment on this in ‘Open Mic’ this morning, here http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11457713 it is again in case anyone didn’t read it,

    My reason for highlighting this particular news ‘story’ is that it is full of Lies, both outright Lies, and, Lies of omission, what this story does do tho is provide a blueprint of property speculation,

    Firstly, this particular ‘property investor’, lets call Him Mister Leech, is not buying this particular property in any normal sense of what you and me ‘know’ as ‘home ownership’, and, far from Mister Leech using any of His money, other than the initial deposit on the property, You and Me, anyone that cannot escape their payment of Income Tax and GST are paying Mister Leech’s costs while Mister Leech speculates that the price of the property will rise,

    ‘The Lie’ is encapsulated in the type of mortgage the Bank has given Mister Leech to ‘buy’ the property,

    An ‘interest only mortgage’ means just that, Mister Leech for the period of the mortgage, up to 10 years, will NOT pay for any of the actual property, Mister Leech will only pay the ‘interest’ charged by the Bank for the amount of the mortgage,

    But wait there’s more,

    Mister Leech will not even pay for that out of His pocket, You and Me who every day, with no exception pay out income tax and GST will pay the interest charges on Mister Leech’s investment, in fact, You and Me will even pay Larry the Lawnmowing guy to come round once a month to do the lawns at Mister Leech’s rental investment,

    Mister Leech plans to rent the property to someone for $300 a week for which He is due to pay income tax , lets just say for argument sake that Mister Leech is due to pay $75 a week in tax on that income,

    This from IR264, the tax rules from Inland Revenue, shows that Mister Leech far from covering the rates/insurance/mortgage interest payments via the $300 weekly rental is in fact getting a ‘free ride’ subsidized by You and Me,

    Mister Leech might be due to pay $75 weekly tax from the $300 a week rent, but, pay rates? insurance? mortgage interest costs? not bloody likely,

    From IR264, ”You can claim a deduction for any of these expenses that you incur while your rental property is either rented out or is available to be rented out”, unquote.

    Interest on mortgage,
    Rates and insurance,
    Property management fees,
    Repairs and maintenance,
    Accountants fees,
    Lawyers fees,

    So, add up all those ‘costs’ to Mister Leech, remembering all the time that He is paying none of the actual $300,000 Mortgage, against the $75 of tax Mister Leech is due to pay on the $300 weekly rent and you begin to see that He is paying nothing, nada, zilch, zero,

    It gets better tho for Mister Leech, should His ‘costs’ be above the $75 weekly tax he is due to pay on the ‘rental property’ that $75 of tax is ‘written off’ and Mister Leech is allowed to ‘write off’ the balance against the taxes He is due to pay on His wages or salary,

    In effect, while Mister Leech pays not a cent ‘to own’ the property, pocketing the $300 weekly rent, paying Himself handsomely while He waits for the price of the property to inflate thus giving Himself a nice pile of capital gains which again will be free of taxation, Mister Leech is being directly subsidized by the ‘tax base’, You and Me who cannot escape a cent of the income tax and GST that we daily pay,

    In 2011 the Treasury/Reserve Bank said there were 199,000 ‘Mister Leech’s, all of them declaring tax losses on ‘investment properties’, meanwhile the Property Institute says that ‘the average’ investment for the Mister Leech’s is to have 2 such ‘investment properties’,

    Why wouldn’t they???, they pay no direct tax on the ‘investment’, pay no tax on the capital gains the property will gather and the more of such ‘investments’ the Mister Leech’s have, the less income tax they will pay on their wages and salaries,

    They ARE NOT ‘buying’ the properties in any sense of those words usage, on the face of it, the hundreds of thousands of Mister Leech’s are simply paying the Banks the interest rates on the Banks loans,

    But, as i point out, they, because of the ‘tax rules’, are not even paying those interest rates, the ‘tax base’ is, You and Me in other words….

    • So a young guy at university not only studies hard but works and saves hard as well and an army of jealous levellers come out of the wood work to run him down. I say congratulations to Mr Lippman who acknowledges the advantages he had but doesn’t deserve the vicious attacks from small minded blinkered internet trolls. The only point I agree on is that there should be a comprehensive capital gains tax, not because i’m jealous of other peoples success or because I think that since some people in this country can’t succeed then no one should but because such a tax would be fair.

      • If there were a comprehensive Capital Gains Tax our Mister Leech would definitely not be in the business of tax evasion(legalized) at all…the interest free mortgage with which our Mister Leech is not ‘buying’ the property in question along with the tax write offs of all Mister Leech’s ongoing costs surrounding the rental of the property are simply tax free incentives to grease Mister Leech’s skids while He marks time accumulating the tax free prize of capital gains on the property He is not buying,

        The crude tax rules of course aid and abet our Mister Leech’s, all 199,000+ of them in His deliberate loss making business which is obviously one of crude speculation,

        Houses are and should be Homes not tokens in the speculative games of the greedy…

      • You didn’t really read the story did you.

        Before you start calling people trolls, look in the mirror. Because you are the troll.

        You have no thought whatsoever for the people whose lives will be upturned by the actions of current government, which is what this story is about.

        • Actually I read the article and agreed with most of it. The concept of state housing is a worthwhile one but practical application of the idea has been a political, economic and social disaster almost since day one leading to a situation where our “social housing” in many areas mirrors the worst of tenement projects of Britain or the US.
          I chose only to respond to the unjustified pillorying of Mr Lippmann although the subsequent vilification of landlords as a group has frankly been almost beyond belief.
          New Zealand has always had and will always need a mixture of state houses, owner/occupiers and rental accommodation. I do believe that todays proportional mix of these three is not what it should be. The road to home ownership is not as easy as it was and the Auckland housing bubble is exacerbating the problem. But rather then being a deliberate ploy by a neo-liberal government i think it is an unexpected problem that is causing the relatively incompetent populist Key administration a lot of concern.

          • It has not been mentioned but the accommodation supplement (or whatever the system is called where the govt helps low income families pay expensive rents) lets landlords pay high prices for rental property then rent the same property to those low income families who are not able to purchase property because of property investor demand while taxpayers subsidize the rent.

    • wow bad12 that is a really good clear explanation of how things work; it is quite mind bogglingly succinct!

  2. “It gets better tho for Mister Leech, should His ‘costs’ be above the $75 weekly tax he is due to pay on the ‘rental property’ that $75 of tax is ‘written off’ and Mister Leech is allowed to ‘write off’ the balance against the taxes He is due to pay on His wages or salary, ”

    Wrong. The costs of the activity are deducted from the INCOME derived, not the tax paid.

    “they pay no direct tax on the ‘investment’”

    That only applies if the investment is in a loss making position. That is the same as any other business venture, and is entirely equitable.

    “far from covering the rates/insurance/mortgage interest payments via the $300 weekly rental is in fact getting a ‘free ride’ subsidized by You and Me,”

    Wrong. As I have stated above he can only claim these expenses off the Gross Rental Income, which again is entirely consistent with the way businesses operate.

    You fail to understand that owning a rental property is a business activity. Profits are taxable, losses are deductible. As they should be.

    • So some guy can go to the bank, take out an interest only loan, and then write off against his rental income his expenses which includes the interest on the loan.

      All he has to to is make sure his interest payments and rental income match up and he lives off the wages of his tenants and has his tax paid by you and me, and if he waits for two years he can collect a tax free capital gain of say 20%.

      And you call this business?

      Oh wait, you are right. Business only exists because 100% of its profits are produced by those same workers who pay the landlords mortgage and tax, so there is no difference between employers and landlords except one pays wages and the other lives off them. One is an exploiter and the other a parasite.

      • “And you call this business?”

        Yes. It’s no different to a man going to the bank, getting a 300,000 overdraft and using the money to buy a dairy. The interest is rightly tax deductible. He sells goods and services, and then after 2 years he sells the dairy for a capital gain.

        “One is an exploiter and the other a parasite.”

        You don’t understand business. The $300,000 has to be repaid. The risk is all with the business owner, not the worker. Workers earn wages and salaries, irrespective of the fortunes of the employer.

    • Right you are DangerousDave, lets open this discussion up a little more shall we and look at the initial numbers for a moment,

      Now our Mister Leech has found a property with a price tag of 300 grand and found Himself an Interest Only Loan,

      Our Mister Leech in His own words will charge 300 bucks a week rent or 15 grand a year to ‘the tenant’, are we still on the same page here Dave???,

      Do the frigging math for us wont you Dave, Whats the Interest Rate on the 300 grand Dave,

      At 5% Dave, the interest on a 300 grand interest only mortgage would be what??? not 15 grand a year would it Dave,

      The standard interest rate from the Banks today Dave is 5.59%, which just off the top of my head Dave would leave our Mister Leech with Minus earnings on the property wouldn’t it ,

      So at point 1 Dave, instead of our Mister Leech owing 70 odd bucks to the taxman a week, the .59 above the 5% interest on the interest free loan all of which has gobbled up the earnings from the property would mean that it ain’t Mister Leech what owes the taxman 70 odd bucks a week, its the taxman what appears to owe our Mister Leech that $70 a week, say it ain’t so Dave go on,

      Now exactly what were trying to tell us Dave…

      • A good attempt at diversion, Bad, but I can quote exactly what you said:

        “should His ‘costs’ be above the $75 weekly tax he is due to pay on the ‘rental property’ that $75 of tax is ‘written off’”

        That statement is patently false. The costs are deducted from the Gross Rental Income, NOT the weekly tax. That was the point I was making.

        Back to school my friend.

        • What’s the diversion DangerousDave???, see the words ”right you are DangerousDave” in my previous comment to you do you Dave???, in fact these words indicate a concession to you Dave that i am in fact partially awry with my description of our Mister Leech’s deliberate establishment of a loss making business for financial gain through available tax rebates,

          So lets go back to point one Dave, as you can see it is not i who refuses in any way to debate the issue,

          With an interest only loan at today’s interest rates of 5.59% on the 300 grand property with rent of 15,000 a year our Mister Leech along with everyone else involved from the Banks downward already knows that the rent gained will not quite cover the interest charged so far from owing the taxman $70 weekly our Mister Leech has the taxman owing Him that $70 weekly,

          Now we wont get to all the other ‘things’ that at this point our Mister Leech with deliberation and full knowledge intends to claim from the taxman as a loss just yet Dave as you might become confused,

          Now our Mister Leech having deliberately established a ‘loss’ shows us by the type of mortgage, interest only payments, that He never intended to either make a profit from renting or actually ‘owning’ the property in any terms a ‘normal’ person would consider ownership to be,

          In fact Mister Leech with deliberation has set up a rental investment ‘false front’ and with deliberation set up a situation of costs exceeding income to create for Himself a tax credit based upon ‘paper ownership’ based upon the fact He will never actually ‘buy’ the property, the proof of this being the ‘interest only mortgage’,

          The above begins then to sound like the definition of ‘tax fraud’ don’t you think Dave,

          You know as well as i do right Dave, that our Mister Leech gained ‘paper ownership’ of the property with the full knowledge that He would sell it in the future for a profit, the fact that our Mister Leech does not intend to pay any of the principle on the mortgage proves Mister Leech planned all the time to make income from the ‘buying’ and ‘selling’ of the property and as such should pay income tax on that income right Dave….

          • Let me explain ”partially awry” to you DangerousDave, this might save you from wasting our time,

            My previous comments should have been more specific shouldn’t they, if the ‘rental investment’ is for what ever reason ’empty’ and thus accruing No Income then so long as the ‘rental investment’ is ‘available to rent’ ALL the COSTS, which includes the 300 bucks weekly interest payments on the interest only loan, Rates and Insurance, Property Management Fees, and, Other Bank Charges are allowed to be deducted from the due taxation on any other activity our Mister Leech is due to pay,

            Including our Mister Leech’s taxes on His wages or Salary, and, unless you are the absolute Moron that i suspect Dave, you know as well as i do that it is simple mathematics to manage the property in such a fashion so that during any financial year the COSTS not covered by income from the property match neatly the Income Tax our Mister Leech will be due to pay on His wages or salary…

          • “The above begins then to sound like the definition of ‘tax fraud’ don’t you think Dave, ”

            Ah, no. Because nothing our industrious friend has done is against the law. And that’s the point. I was correcting you on a point of the law, not of principle. And if you want to discuss principle, what about benefit abuse, tradesman doing ‘cash’ jobs, multiple families living illegally in state houses, property developers getting special treatment from local councils….

            It seems to me the vitriol against this young fellow is more about being stung by his ability to own a home, when the prevailing rhetoric is that it isn’t possible.

            • Wrong DangerousDave, you tried to claim that there was no means by which our Mister Leech could claim back ALL His costs against the IRD, which isn’t a question of law its a question of fact,

              Now that i have provided you with the Facts you wish to change the subject,

              The vitriol against the Mister Leech’s of the world has nothing to do with personal animosity Dave, the current highlighting of Mister Leech is simply an example of one of hundreds of thousands of Mister Leech’s tax evasions,

              The Treasury/Reserve Bank quoting 2011 figures said there was at that time 200,000 Mister Leech’s doing exactly what i have outlined in my comments to this post,

              There are hundreds of variations to the tax evasion occurring among what i would estimate to be 250,000 ‘investors’ covering an estimated 500,000 properties in 2015 and the total amount of this tax evasion is probably in the realm of at least a billion dollars annually,

              Tax evasion it is Dave, one definition of tax evasion Dave being where someone deliberately uses a financial instrument or engages in financial transactions to deliberately create a paper loss for the purpose of gaining tax credit,

              What is wrong with this on one level is that the taxes i for instance pay, both GST and income Tax, are supposed to be used to support the social infrastructure of this country,

              What the hundreds of thousands of Mister Leech’s are doing is diverting part of those taxes to pay the cost of the investments they deliberately set up as loss making entities,

              These Mister Leech’s are not ‘buying’ these properties Dave, they are speculating, Ma and Pa who scrape together the deposit for a table mortgage and then every week pay their interest, part of the principle, their rates and insurance are buying their properties,

              There are a myriad versions of the type of tax evasions the Mister Leech’s posing as ‘property buyers’ are involved in and i plan, far from changing the subject as you suggest Dave, to continue to expose the mechanics of how these tax evasions work and the roles various entities from the Banks to the Real Estate Agents to the Property Managers to the Property Valuers enable and thus are complicit in such tax evasions all the while creating for themselves an income stream off of what they know to be tax evasions….

    • They pay no direct tax on property investment because there is no capital gains tax in this country.

      Tax on capital gains is paid only if someone is silly enough not to structure their affairs to appear to be an investor, rather than a speculator.

    • It is debatable whether interest should be deductible as it is not a business expense. In no way does it contribute to earning of rent. All it does is allow Mr Leech to own the property without putting up all the finance himself.

      It is about time tax law recognized the distinction between the operation of a business and the ownership of one.

      I would imagine interest is Mr Leech’s major expense.

      • “It is debatable whether interest should be deductible as it is not a business expense.”

        No, it is not debatable. It is a business expense. If you borrow $300,000 to buy a business, the interest on that money is tax deductible. It is an expense incurred in deriving assessable income.

        • [No, it is not debatable. It is a business expense.]

          Oh? How does it contribute to the running of a business. A business can be run quite satisfactorily without paying one cent in interest. All interest does is allow a would be proprietor to own or invest in a business and has nothing to do with the operation of the business itself. Borrowing in order to own something is a personal matter and the costs of such borrowing should not therefore be deductible.

          Interest is deductible only because the Income Tax Act says so. My point was that we should consider reviewing the law on this point.

  3. Fantastic deconstruct Bad12

    Graham Camerons thinking is exactly what I was thinking when I read about the young student “investing”. The change from the concept of a home as a roof over peoples heads that provides a basis for a secure home TO a concept of the house being a tradeable asset that earns “unearned” income from price inflation is rather telling about our current society.

    What this says to me loud and clear is that rentier behavior where one person “captures” a slice of another persons income has pervaded our society. It has always been there but we now encourage and glorify this form of parasitism. The concept of an honest days labour for an honest days pay actually doing something tangible is now redundant….or is until this whole rotten facade collapses under the weight of collective avarice.

    • Taa Nick J, without having been personally involved it’s hard to get it down on paper in language everyone understands,(having the defenders of tax free living pick at what i am saying helps to clarify how to get the mechanics of this semi-legal scam written down on the page),

      i first heard of this marvelous scheme through a Relly, now heavily involved, 7 or 8 years ago, and, seeing as there is no on-line version of the inner workings of what is essentially deliberate loss making for tax rebates much of what i know is reliant on His version and various tit-bits of information that leak out,

      Pity my temper, after i told the Relly to F Off,(He tried to involve me), He hasn’t talked to me since,(no sad loss, but, i can’t seek further info),

      The tax rules along with interest only loans allow this little game to be played,

      There is a cast of ‘players’ involved from the Banks to the Property Management Co’s and the Real Estate agents, many fulfilling both the former roles, the latter 2 ‘fixing’ what for any area will be the ‘Market Rent’, the importance of the ‘market rent’ is a story unto itself for another day,

      Because the IRD appears not to differentiate between paying a full mortgage and paying an interest only mortgage and as far as i know wouldn’t have a clue which ‘investment properties’ are the subject of either category naked speculation, which is what interest only loans promote, is allowed to be viewed by the IRD as ‘rental investment’ and thus escape due taxation of capital gains,

      Like you i see Houses as Homes, not some tokens to play the speculative game with and my view is that interest only loans should be allowed for a maximum 6 month term once on any individual property transaction, then the speculators can all F Off and play their game in the sharemarket where they all belong…

  4. Well said agree 100% It’s atrocious housing in NZ has gone from homes for people and families to monopoly game get rich by capital gain units. This attitude has infected NZ with that sickness called greed.

  5. Good to see this being covered on TDB, as I saw the NZ Herald article and reacted with horror, confusion and even… laughter.

    First of all, the Herald runs property-related stories so often that I have come to wonder what role this wall to wall coverage of property prices means in terms of reinforcing a message – and I think you’ve summed it up nicely with: “Enforcing acceptance of a new mythology that proclaims property investment as good and a right of passage for New Zealanders is absolutely central to the nation building project of neo-liberal economics.” The story isn’t so much about Brandon Lipman as it is simply about property – the latest must-have accessory to a successful life.

    But here’s a few other things I took away from the story. Note the path he took to reach this great place of becoming a better person through property ownership:

    “The keen basketball player saved the money while studying towards a commerce and science degree, working from 9pm to 5am each night at Countdown supermarket during his first year. He slotted in studies by listening to recorded lectures in his own time – some at double speed for slow-speaking professors – and catching sleep whenever he could while living a modest life rent-free at his parents’ home.”

    So let me get this straight…. instead of a young person going to university to learn, apparently we now live in a society where the best thing they can do is skip class and work all night like some Tyler Durden alter ego in order to own property at the end of university? That alone says it all.

    But also note the underhanded tone of the article – apparently you can learn everything you need to know in university by replaying lectures at double speed…. not only does it reek of some elistist ‘I can do everything twice as fast as you’ attitude, but it completely ignores that part of the learning process is being there in person. You can’t capture everything going on in a recording.

    But also hidden in this statement is that he’s been living at his parent’s place and they’ve really been the ones helping him onto the property ladder by having him live at home… not to mention that, whether you love or hate flatting (and everyone is probably a combination of both), you can’t deny that you learn things from it – for better or worse. So our young sir has passed not only on social interaction at university but also life skills? Wow, sounds great.. sign me up and my firstborn too…

    But in the end, the part that made me laugh was the blinkered view of it all – it’s obvious that property prices are going to crash. They can’t keep going up. What happens when this guy has sacrificed his youth and education (frankly, if you’re working all night your education isn’t going to be the same) – just to be a property investor… and then it all comes down. As noted above he’s not paying off the principal on this property anyway.

    Apparently the Herald would have us believe this is something young people should be aspiring to. What a waste, our young people could be learning and contributing to society, not just becoming another rent-seeker trying to get rich off property. The article is a sign of very deranged times – in more ways that one.

    • “First of all, the Herald runs property-related stories so often that I have come to wonder what role this wall to wall coverage of property prices means in terms of reinforcing a message”

      You could also say that this would in turn help to raise interest with investors… And help to raise prices… While aiding the problem.

  6. Graham thank you from the heart for this piece. This bought tears to my eyes for the power and truth behind your words. An absolutely brilliant article!

  7. Is he going to be a landlord? Or is he going to be a flipper?

    Where did he learn to indulge in such risky behaviour? Or is he protected from folly? What has he learned so far? Or is Nemesis still stalking him? (Hubris is followed by Nemesis.)

    Who backed him? Is that backing fairly open to others?

    Or is this playing field rigged and slanted?

    Because lots of other people work ridiculous hours and skimp on food, sleep, and basics – and will never get close to the brass ring.

    It’s ‘clever’. He’s got the prize he was after. Whether he’ll grow up to be a decent enough person is still unclear.

  8. What makes me laugh about these property investors/landlords is that they think they are creating jobs like a factory owner. I remember on TV1 news a landlord saying he created work for plumbers and electricians. His thinking being that other people were to lazy to own houses and that Tradespeople needed jobs created for them !

  9. I agree with you, except that it should be “RITE of passage” (unless you intended a pun).

    This is all part of the decline of the west. Basically we’ve outsourced slavery to the third world so all we have left to do – for most people – is to sell things to each other, including houses. We’re all (in the first world) involved in marketing and branding rather than production, which looks very fin de siecle to me – at some point the people with the real power (i.e. the ones who actually keep all this moving) will bring down the whole edifice, unless our messing with the atmosphere does it for them.

    (Speaking as a bludger, er I mean renter unable to otherwise live anywhere near Auckland…)

  10. I have just realized something important: I have ascended to my own personal property investment portfolio! Sounds a big grander than owning my own home, doesn’t it?

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