Why house prices are up and ownership is down

[speights boy]

I agree
Given the sub headline is

Property investors group says investors aren't to blame for driving up Auckland house prices

I reckon the AIPA is simply trying to deflect blame (as far a demand side goes) elsewhere.
I cannot see how their argument holds any water personally.
Sounds like politics to me.

[flyernzl]

Well, I'm Vice-President of APIA and I don't know what it means either

If yields are so low, why would 45% of sales be to investors ?

Because they are not, of course. I would say that right now very very few Auckland residential sales are to investors.

Its the age-old confuson between 'investors' and 'speculators'.

Investors buy on the numbers, if the numbers don't stack up then they don't buy.

Speculators don't really care what the numbers are today. They will buy in the belief that the numbers will be higher when they resell tomorrow.

It's a speculators market right now.

The bean-stalk will always keep growing - until it stops growing.

[speights boy]

Care to put a % guess on the size of the buying market who are flippers, and the size who are landlords ?

Also, by definition a flipper sells, (normally after renovation)
Who are they selling to....not another flipper would be my guess.

Also, how do you explain the own home ownership statistics showing continued reduction ?
(Down from 76% to 63% over the last 25 years by the graph in article, and the lowest in over 60 years)

[elguapo]

Also, how do you explain the own home ownership statistics showing continued reduction ?
(Down from 76% to 63% over the last 25 years by the graph in article, and the lowest in over 60 years)

Miscollection of statistics that means the numbers for owner occupied and investor purchases are, in essence, bunk?

Increased use of trusts and ltd vehicles by owner occupiers?

Changes in life styles that mean owner occupation is less desirable than renting for some, one person households, housesharing etc?

Immigration meaning most immigrants rent on arrival for a significant period of time?

Combination of all the above, as well as an increase in investors/speculators?

[Maccachic]

Surely the increasing elderly population is going to have an impact esp with the huge rise in Licence to occupy retirement villages?

[drelly]

Late to this discussion but I actually blogged about this article and contacted Anne Gibson to let her know as some of his facts were wrong (since corrected) and there is a high level of convenient mis-interpretation of data. See my blog on it here: http://www.privatebuyer.co.nz/proper...s-new-zealand/

[elguapo]

See my blog on it here: http://www.privatebuyer.co.nz/proper...s-new-zealand/

Good piece mate, but I would say that this:

The financial services sector has been pushing for years for capital gains tax as they know that property out-performs shares. - See more at: http://www.privatebuyer.co.nz/proper....6cFmDZ6r.dpuf

Is highly questionable, both in terms of the financial services sector 'pushing' for a CGT and claiming property outperforms shares. Have you got an actual reference to where the 'financial services sector' has pushed for a CGT?

[Perry]

The NZX guy, (Wheldon, wasn't it?),
was keen on a CGT, wasn't he?

[drelly]

Good piece mate, but I would say that this:

The financial services sector has been pushing for years for capital gains tax as they know that property out-performs shares. - See more at: http://www.privatebuyer.co.nz/proper....6cFmDZ6r.dpuf

Is highly questionable, both in terms of the financial services sector 'pushing' for a CGT and claiming property outperforms shares. Have you got an actual reference to where the 'financial services sector' has pushed for a CGT?

Can't find any good links at the moment but I used to work as a financial adviser and every year there would be charts and figures coming out from investment firms showing how shares were better than property. Very convincing until I realised that they never included the rent as income but did include dividends on shares!

[speights boy]

In your time as an adviser, what percentage of your clients used borrowed money to buy their shares ?

[elguapo]

Can't find any good links at the moment but I used to work as a financial adviser and every year there would be charts and figures coming out from investment firms showing how shares were better than property. Very convincing until I realised that they never included the rent as income but did include dividends on shares!

Did they include all the costs of property ownership as well?

[flyernzl]

Is highly questionable, both in terms of the financial services sector 'pushing' for a CGT and claiming property outperforms shares.

Hence the enthusiasim within the financial management industry for compulsory Kiwisaver.

They drool at the prospect of all that lovely money that the public would be forced to hand over to them.

[drelly]

In your time as an adviser, what percentage of your clients used borrowed money to buy their shares ?

None that I know of.

Did they include all the costs of property ownership as well?

Yes I think they were using net returns.

[elguapo]

Hence the enthusiasim within the financial management industry for compulsory Kiwisaver.
They drool at the prospect of all that lovely money that the public would be forced to hand over to them.

On that one there is no doubt, they make money from it directly

[elguapo]

Yes I think they were using net returns.

Do you know how that would be worked out? Property stats are shakey at best, how would they collect figures for costs for new bathrooms across a whole index of properties?