After the meth testing hysteria that so many NZ landlords hilariously fell for (and Housing NZ wasted millions of tax dollars trying to ‘fix’), poor old Landlords have had it tough.
They get subsidised by the Government through the counter productive living allowance, they don’t have to provide any long term tenancy security, they can endlessly raise the rents, they can throw anyone out under the bullshit ‘a-family-member-is-moving-in’ loophole, they’ve had decades of untaxed capital gains and they don’t have to provide a safe or healthy house.
So listen to them scream now…
Landlords bail on rental market: ‘It is just not worth it’
The experts say landlords are being tempted to take their capital gain and run, before harsh new rules undermine the value of their investments.The concerns have arisen as the government moves to implement dramatic reforms of the housing market.
The looming changes include:
* A capital gains tax on second homes, depending on the outcome of a special tax inquiry.
* The imposition of ‘ring-fencing rules’, which would reduce tax deductibility for rental houses, by ensuring losses cannot be set off against other income.
* An extension of the ‘bright line test’, under which anyone selling a rental home within five years would be deemed a trader and would therefore be taxed.
Property Investors Federation executive officer Andrew King said these planned changes were scaring off investors from the property market.
He said the personal hostility directed against landlords was another issue.
…you hear that folks?
That’s terror setting in.
That’s all those speculating landlords and newly acquired property portfolio middle classes feeling the sudden stall of their illusions of wealth.
The crash is starting and the cold reality of how in debt the property class find themselves is starting to sink in. Watch them thrash around and twist in the wind as the reality of that mountain of debt starts to implode upon them.
It’s difficult to know who the bigger snowflakes are, NZ Landlord’s or the NZ Farming industry. What the new Government must remember before the big money scams (that have made the NZ economy look far better than it really ever was) start threatening them is that democratically there are more 1st time non-speculator home owners, home renters and more people who don’t own property than do and that policy needs to help them into their new home or help keep their home.
Screw the speculating landlords, they’ve had it far too good for far too long and they are going to go septic once the crash kicks in.
They also vote National, so they will be no electoral gratitude from them in 2020.
The new Government must hold the course.
I think that’s logical pragmatism setting in rather than terror. But I guess it indicates that the desired result is in train. Speculators will look elsewhere for a twist and maybe the empty houses will fill up as no return from capital gain is forthcoming.
D J S
“The experts say landlords are being tempted to take their capital gain and run”
That’s a good reason for backdating CGT to 2008 when we bring it in. We need to take that some of that capital gain off them.
Retrospective legislation would be a giant step backwards as it is anti democratic and against what NZ governments stand for.
How could anyone risk getting involved involved in any business if governments behaved like that?
D J S
How much spending power in NZ’s economy has been disproportionately consumed by this property bubble?
Inflated house prices, leading to hugely inflated debt with accompanying rent inflation.
So much money being spent on nothing else but putting a roof over your head means fewer and fewer dollars for anything else. and the bankers, like Sir John Key, and their shareholders are laughing.
Hey Bill English and your clueless Nat mates, where the hell were you for the past 9 years?
There’s a grain of truth hidden in sea of salt.
The problem is that the banks don’t like taking risky loans. South Canterbury Finance and other companies were doing so, there’s a vicious feedback loop for them which caused similar problems for Lange during the economic crises of the 80s and later a mini crash during the 90s and again in 2008.
Namely, virtuous lenders dont earn as much profits. If you lend money to people who are safe to loan to, as defined by Westpac criteria, which is handling the bulk of mortgages, you make a small sum of money. But lending to riskier buyers? You get to earn more.
What this means is everybody is eager to buy loans, because John Key, Bill English and Steven Joyce were supposed to have diverisified the risks . Which WAS true….until you get wraps made up entirely of risky investors mortgages, which means that if a significant number of them default, say because rent gets too expensive for tenants or prices drop,or changes in behaviour (previously,people were willing to sell everything before selling their houses , now, people might walk away from rental houses), the investors will get burned. All of them, from the AAA senior tranche to the riskier tranche.
It gets worse of course, because in order to make more profits, more and more immigrants were brought in to inflate demand, more people, more churn, more fees and so on. Until we have multiple layers circulating the system. the bad loans/money creation leaves vacuums that have to be filled with money. Money that is not being used to circulate in other parts of the econatomy. thats why its flaccid. not enough money pressure. And that diverse, dynamic, resilient economy Bill English is going on about is COOKED. FUCKED!!! We are governed by our lesser peers.
And the commercial banks like Westpac still kept buying. Which incentivises Landlords to buy into an over heated market so leverage way to much for the puniest of returns.
Eventually, the risk spreads everywhere and when it is triggered, will cause a cascading fault in the system.
While you can look at it from a monetarist point of view, as money being destroyed or not used in productive ways… i think its not going to be adequate to explain the crisis in its entirety.
Rat’s nests in Auckland going for $800-$900k it is just not logical, building materials price gouging, by the likes of Fletchers and the Oligarchs.
The Banks are starting to get nervous, and don’t want to lose their shirts, the Auckland housing market has been one big Ponzi Scheme under the Natzi Government ?
Rat’s nests in Auckland going for $800-$900k it is just not logical, building materials price gouging, by the likes of Fletchers and the Oligarchs.
The Banks are starting to get nervous, and don’t want to lose their shirts, the Auckland housing market has been one big Ponzi Scheme under the Natzi Government ?
In the words of Michael Davitt, landlords are “a brood of cormorant vampires that has sucked the life blood out of the country.”.
This has always been so, the difference now being that, whereas once upon a time being a landlord was confined to a small group of society, you now find even the ‘nicest’ supposedly socially aware people seem to think its normal, even desirable to profit from other peoples misfortunes.
Yes we need a correction alright as this the property bubble was just a ponzi scheme and john key knew it would end so he got out and left his lackie to face the music.
Key will now be enginneering another “run on the NZ Dollar” as he did in 1987 when he teamed up with Alex Krieger to force the NZ dolar down to 40 odd cents and then made a packet of money.
He will be wanting to repeat this again now since the partnership he had then with Krieger was so ‘profitable and he knows how to make another ‘killling’ onthe NZ dollar it is likely he will do it again and not remember afterwards.
http://www.stuff.co.nz/national/politics/250525/Who-is-John-Key
Wasn’t John Key high ranking money trader in Merryl Lynch in Singapore in 1997/8 making tons of money shorting the currencies of Malaysia, Indonesia n Thailand under the charge of George Soros at the instructions of Bill Clinton n Al Gore??? Such unscrupulous behavior then becoming Prime Minister of NZ then becoming a lackey of the Americans??? Laughable indeed!!!
In early 90’s, I bought a townhouse to live in but decided to buy both of the semi-detached townhouses together. Over the years, I’ve had a multitude of tenants including young groups of professionals, overseas engineers on assignment, clergy on assignment from overseas, young families with siblings sharing accommodation etc. They come in willingly and leave willingly when they want to. They are looking for places to rent for their own reasons and have reasons to not buy at that time.
A quarter of a century later, I find that I am one of “a brood of cormorant vampires that has sucked the life blood out of the country.” I wish I was told this along time ago.
I also discover that I’m profiting from people’s misfortunes. I didn’t realise that people on assignment were misfortunate. I didn’t realise that a young couple starting out were misfortunate. I didn’t realise that a group of professionals. often well-paid, were misfortunate by pooling their resources to make their rent very affordable.
Since I’m a vampire, I should probably sell up. Oh no, I can’t do that because that will be showing a tantrum.
My plan was to hold on to the properties – and I will have to accept continuing as a vampire.
Also selling up will put pressure on the tenants to move sooner rather than later – what an inconsiderate landlord I will be.
But maybe not – the new buyer could be an investor. Oh no, another vampire.
There is a solution I guess. There are new townhouses being sold in the same suburb. 3 bedrooms for around $900,000 and 2 bedrooms around $700,000.
Worth much more than my old 3-bedroom townhouses. But why would anyone spend so much when they can rent for much cheaper?
Somehow those high property prices have been caused by us vampire landlords I guess.
In early 90’s, I bought a townhouse to live in but decided to buy both of the semi-detached townhouses together. Over the years, I’ve had a multitude of tenants including young groups of professionals, overseas engineers on assignment, clergy on assignment from overseas, young families with siblings sharing accommodation etc. They come in willingly and leave willingly when they want to. They are looking for places to rent for their own reasons and have reasons to not buy at that time.
A quarter of a century later, I find that I am one of “a brood of cormorant vampires that has sucked the life blood out of the country.” I wish I was told this along time ago.
I also discover that I’m profiting from people’s misfortunes. I didn’t realise that people on assignment were misfortunate. I didn’t realise that a young couple starting out were misfortunate. I didn’t realise that a group of professionals. often well-paid, were misfortunate by pooling their resources to make their rent very affordable.
Since I’m a vampire, I should probably sell up. Oh no, I can’t do that because that will be showing a tantrum.
My plan was to hold on to the properties – and I will have to accept continuing as a vampire.
Also selling up will put pressure on the tenants to move sooner rather than later – what an inconsiderate landlord I will be.
But maybe not – the new buyer could be an investor. Oh no, another vampire.
There is a solution I guess. There are new townhouses being sold in the same suburb. 3 bedrooms for around $900,000 and 2 bedrooms around $700,000.
Worth much more than my old 3-bedroom townhouses. But why would anyone spend so much when they can rent for much cheaper?
Somehow those high property prices have been caused by us vampire landlords I guess.
There will always be inequality. Some one will come up up with a new or different way of doing something and earn a little bit more than the average almost always. So there will always be some kind of inequality. So the government must take a special interest in a Clean Green New Zealand for which DOC and a lesser extinct councils was set up because New Zealand’s clean green image differentiates New Zealand from other countries.
Everybody who owns a home have seen there property values go up 5-20 times there value. During the state house sell off everybody had an opportunity to purchase a home at cost or below cost. And as development takes place everybody gets a lift so all boats were supposed to rise. But as with any type of central planning there is always that one central point of weakness namely John Key’s weak housing policy. Basically he tried to do things housing NZ wasn’t designed to do like make profit off the poorest in the community, and generally throw them out on to the rocks as the tide rises.
So the aspirations of kiwis must keep up with development and development must keep up with kiwi aspirations. We can build nice homes and parks, roads, hospitals, we can have development. But if we don’t maintain the neighbourly bond then all of this is for nothing and that is a central weakness in central planning.
I own a few houses and rent them out. My debt level is low. I don’t see anything that will make me change what I’m doing. Yes, maintenance takes about 25% of the total rent and that’s offset against the income. Yes, I’d probably get a bettrer return from selling up and putting the cash in a term deposit. But we are happy to provide warm, well maintained homes for the tenants.
.
I know there are greedy folk who are landlords.
Karma can be a bitch.
Why not buy some bit coin. That will serve humanity. The tenants can live in cyberspace.
D J S
MWHAHAHAHAHAHAAAHAAAAA !!!
MWHAHAHAAHAAAAAAAAHHAHAHAH !!!! MWHAHAHAHHAAAAAHAAA !!!
Screw the little ( but viscous ) snowflakes .
We dont do filth in this country anymore.
It is all just smart campaigning by that vested interest holding group of people, to put pressure on the government, nothing more or less. They just want to scare people left right and centre, and they have started the year, to tell the government, do NOT do ALL of what you propose, or all ‘hell’ will break loose.
More efforts to ensure the Labour led government will simply turn out to become a new Nat Light government.
Big FAT BS!
Yes we need a correction alright as this the property bubble was just a ponzi scheme and john key knew it would end so he got out and left his lackie to face the music.
Key will now be enginneering another “run on the NZ Dollar” as he did in 1987 when he teamed up with Alex Krieger to force the NZ dolar down to 40 odd cents and then made a packet of money.
He will be wanting to repeat this again now since the partnership he had then with Krieger was so ‘profitable and he knows how to make another ‘killling’ onthe NZ dollar it is likely he will do it again and not remember afterwards.
http://www.stuff.co.nz/national/politics/250525/Who-is-John-Key
Well, who is releasing this ‘news’? Do they have any ‘interest’ of a kind? Does it surprise anyone, who has a bit of a clue, that this comes from residential property investor lobbyists?
What is the reality?
Most ‘landlords’ are small scale landlords, who have one, perhaps two or three rental homes they let out.
If a significant number of them would panic, as the ‘news’ suggest, they will create a free-fall of residential property prices, leading to a crash of sorts.
Most will not gain much at all out of this, as there may not be enough buyers, at least for a while.
Buyers are sitting and waiting, I hear, some larger investors (who do though have limited cash to boy extra), and a few first home buyers, keen to find something affordable.
Smart landlords will simply face up to their challenges and their potential additional responsibilities, and work their ways around this. There will be many renters keen to rent, and to stay in homes they rent already. So some properties may change hands, but overall not much will change.
The ones who will win are real estate agents, working also as property managers, who will run campaigns to owners, telling them, they are the ‘experts’ and professionals, and can see them through slightly more difficult times by looking after their properties.
There will be more property managers and there will be more business for them, and rents will be increased, to meet the then requirements.
In the meantime we will wait for some real action on Kiwi Build and Housing NZ building more stock. For that to take off, it will take years to make a real difference.
Stuff such panic news, it is just endless BS, but sadly there are those scared landlords, now listening and reading such BS, and perhaps thinking, hey, I need to sell.
Go ahead, I say, lose value and money, and try and find some other investment, perhaps shares, as that will face a crash soon anyway, so perhaps put it in the bank, or under the mattress???
bubbles dont deflate they tend to pop there is no way out of the mess national has created the debt has topped 526 billion thats a shit load of money that has to be serviced time to pay the piper .they never learned from 2008 there has been plenty of warning since around 2013/2014 that we were in a bubble.every credit boom ends in a bust.i got rid of all debt 3 years ago but it wont help if the economy is stuffed.
i hope the new government doesn’t bailout those greedy nact speculators let them sink look after the 55 percent who have been royally shafted in the last 9 years
if the worst happens government should concentrate on shelter food and health there could very well be record foreclosures. kiwis are siting on a debt bomb that could cripple the economy shit guys its over half a trillion dollars for a small country what were we thinking..
this guy was right all along https://www.forbes.com/sites/jessecolombo/2014/04/17/12-reasons-why-new-zealands-economic-bubble-will-end-in-disaster/#21c652fc3443
way back in 2014
As this government will quite likely only survive one term, the smarter and longer term residential property investors will hang in there, and simply wait for Nats to get back into government, for another round of ‘gold rush’ activity.
Best policy;
Is to change the policy to a ‘slower policy’ as National Party did.
This was deliberately used as ‘not to scare the voters away’ as national used this ‘British colonialism’ policy.
“Slowly slowly catchee monkey” Credit to R.K.(Rudyard Kipling,)
community.beliefnet.com/…wly,_slowly_catchee_monkey
Slowly, slowly catchee monkey – U.S. News & Politics …
community.beliefnet.com/…wly,_slowly_catchee_monkey
It’s actually ‘Slowly, slowly catchee monkey.’ It comes from the days of British colonialism when many far eastern countries were under British rule.
Wasn’t John Key high ranking money trader in Merryl Lynch in Singapore in 1997/8 making tons of money shorting the currencies of Malaysia, Indonesia n Thailand under the charge of George Soros at the instructions of Bill Clinton n Al Gore??? Such unscrupulous behavior then becoming Prime Minister of NZ then becoming a lackey of the Americans??? Laughable indeed!!!
There is a huge shortage of rental properties and apparently those being sold are not going for rentals therefore even more shortages and homelessness.
Personally think that discourse landlords were to blame was so that National’s immigration scam would go unnoticed and nobody would actually ask why NZ decided to import 70,000 people and give out 180,000 work permits per year, year after year in the face of growing unemployment and wages 30% behind Australia or the even worse situation of poor conditions when jobs are not jobs like zero hour contracts.
The end result from National’s reign, being a housing shortage, high house prices and low wages and the poor being social cleared out of Auckland in many cases which is very handy in elections for National.
The endless media attention focused on housing masked a whole lot of other issues in the past 6 years, like immigration, tax havens and government assisted money laundering, pollution, low productivity and wages, super city and council accountability, RMA and how its only for developers and not communities, decreased democracy, rising educational debt and fake degrees, the P issues, biosecurity, national security (foreign agents as MPs in National party), growing fraud and corruption such as transport officials, questionable government activities like Oradiva, sovereignty, water issues, Sky city conference centres, Dotcom raids, TPPA, asset sales, etc etc .
Instead for 6 years the main political issue seemed to be housing which also seemed to only bore down to a capital gains tax and push through zoning changes on housing as a way to solve the crisis. Which struck down the left again and again in the elections as they failed to expand or highlight any other issues, helping National stay popular as their other activities never saw the light of day for more than 2 seconds in the media and opposition.
In spite of capital gains taxes and stamp duty, countries like the UK also has a major housing shortage. A tax 15% tax on foreign owners in Vancouver was more effective in bring down prices.
If you wanted to make the super rich crap their pants, then a non income related profit model on taxation to get all the money launderers and corporations who never return a profit would be more effective. Or a tax on any assets held by corporations and trusts because that is how the super rich hide everything. Remember when Cunliffe said that trusts would be exempt from the capital gains taxes. Not exactly looking like cracking down on illegal activity then or Metiria saying she hoped prices would drop again not exactly being a popular vision for those living through the 1980’s. Labour and Greens should have won that election but didn’t, getting bogged down in polarising property issues again and again, while other issues never surfaced.
A micro Robin Hood tax that tracks all the money flowing in and out of this country would be more effective on taxing those involved in NZ. (These days our 2nd biggest export is profits) – not exactly what most taxpayers had in mind when our government constantly reminds us, ‘We are an export nation’. In the old days when profits from goods were flowing out it was called a “banana republic”.
You shouldn’t have to be a genius to work out that if we have 200,000+ new people with citizenship, residency or work permits each year, then you will get a housing shortage. It was designed to happen by National.
The sad thing still people like to use National’s discourse because they hate landlords. Hey if 60% of your meagre earnings went on rent, there is a huge amount of resentment – BUT it was politically motivated NOT by the landlords but by the government and even if rents dropped and housing became plentiful with the magic fairy, then many Kiwis would still be left with low productivity and wages and poor conditions and job security and needed to be sustained by top up benefits to survive. That’s poverty when you need government assistance when you have a job as well as if you are unemployed.
And with climate change and national disasters, housing is getting more and more destroyed, property is not exactly looking rosy anymore unless immigration is maintained.
A catch 22 made to be a catch 22 by National that’s only economic achievement was to sell off NZ and give away citizenship as quickly and quietly as possible to keep their failings masked and to change the demographics in their favour.
A couple of thoughts on this:
Firstly I am a property owner and investor who would never get involved in the rental business. The returns are too low for the grief involved. Too often tenants are out of control young adults or just drop-kicks who ruin your property. The comment above about “rats nests” sums it up – there are only rats in properties where garbage bags and filth are left strewn around the place. The tenant needs to own that problem.
Secondly, when I lived in the UK as a student in the early 70’s, there were stringent laws in place which favoured ‘tenants rights’. The result was that there are a massive shortage of rental accommodation. Landlords boarded up properties rather than take the risk of letting them, such was the legal bias in favour of tenants. So before you beat up landlords, be careful what you wish for!
Thats great news! More houses been put onto the market for buyers! Barfoot & Thompson bitch’n too that the ‘market’ has turned & houses are becoming available at the more affordable end of the market. Capitalism 101, Fuck’n ‘Market Forces!’
Now, a CGT on the “Asset” classes & higher incomes …. Graeme Hart is worth $2b more than he was last year, so a 40% CGT will make him $1.2b richer instead of $2b!
they wont be able to cash up
there all going to run to the exit all at once in a panic the greater fool is not there.
they will not be able to get a high enough price to clear there debts the banks are going to chase them for the difference and there beloved national change the law to allow the banks to confiscate there kiwi saver money on default.
its much better being able to sleep at night having cleared the mortgage.time to get out the pop corn . ird should review real estate records i bet a lot of property flippers owe income tax there trading in property thats income.
can we send in tony soprano after the defaulting speculators there not going to pay up without the right amount of stick being administered there is going to be a record amount of bankrupts oh the squealing is going to be hilarious.one problem for the rest of us is the open bank resolution policy for bank bail ins i don’t seen why we should end up paying for speculators debt neither should tax payers speculators need to be forced to pay up.
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