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Housing Crisis What Housing Crisis?

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    Originally posted by Perry View Post
    If ( ) had somehow miraculously been able to 'conjure up' 30,000 houses in their last term - affordable or not - what impact might that have had on today's alleged housing crisis? (1 Dec 2020)..
    .


    No effect whatsoever,
    *If immigrants, and offshore trusts etc were 40,000 strong.
    Last edited by McDuck; 30-11-2020, 01:10 PM.

    Comment


    • Food For Thought?

      A couple of viewpoints in two recent articles. Some interesting divergencies in the opinions expressed.

      Of particular import to me was this:

      If Robertson was serious he could add property to the basket of goods that is used to calculate the consumer price index (CPI). If he did, Orr would ramp interest rates higher than the good character requirement to be an insolvency practitioner. House prices would tumble.
      I did know that the Housing Price Index was available separately, but I did not know that the housing price index was excluded from the CPI. I wonder why?

      Here's why you shouldn't believe what you're told about the housing market
      Bernard Hickey, 28 Nov 2020

      Originally posted by Stuff
      OPINION: The housing debate raged this week almost as much as the housing market itself. Starting from the top of the Beehive and moving down, it’s worth pulling apart the various deflections, denials, diversions and dissemblings to understand who should be doing what if they were all serious about improving housing affordability for renters and buyers, although many in reality don’t actually want that.


      We don't have a housing crisis, we have a crisis of aspiration
      Damien Grant, 29 Nov 2020

      Originally posted by Stuff
      OPINION: We don’t have a housing crisis. If we did the streets would be paved with the homeless and our cities blighted with shanty towns. What we have is a crisis of aspiration, with a generation finding themselves locked out of the property market or forced to live in sub-optimal arrangements. Housing serves two purposes; one is accommodation, the other is investment. If an investor is willing to pay $2 million to enjoy an expected $50,000 income on a residential property then that is going to be the price to beat [for a PPOR buyer].

      That is the crisis explained. There isn’t really anything else to say. Forget greedy landlords, land-use regulations, the restrictive building codes, capital gains taxes, the urban-rural limit or even purchasers with Chinese-sounding names. These are all factors but only at the margins.
      Want a great looking concrete swimming pool in Hawke's Bay? Designer Pools will do the job for you!

      Comment


      • Originally posted by Perry View Post
        Food For Thought?

        A couple of viewpoints in two recent articles. Some interesting divergencies in the opinions expressed.

        Of particular import to me was this:

        We don't have a housing crisis, we have a crisis of aspiration
        Damien Grant, 29 Nov 2020
        One of the main criticisms of Communism is that it makes people "tools of the state", removes their hopes, freedoms and asperations.
        Although the same could be said of Federalism and Mercantilism (application dependent).

        So I'm a little surprised to see you supporting Mr Damien Grant's POV.
        But hey, if you bring a chap to the party, you are responsible for him, by vouching for him.

        Did you know that Mr Damien Grant has credit card convictions, a fraud conviction for his part in a share-dealing scam. He was sentenced prison.
        It's jolly decent of you to offer him a second chance.

        Personally, I'm in agreement with a recent panel’s decision to bar him from continuing to practice as a liquidator.
        IMHO, this article shows he still hasn't figured it out.
        Last edited by McDuck; 01-12-2020, 06:17 AM.

        Comment


        • Long ago, we debated the seeming disconnect between the official CPI and price realities and speculated about the reasons.

          I don't recall if those involved in our formula creation knew that the CPI excluded housing price changes or how much difference that would've made to our formula.

          To refresh your memory, the formula we evolved remains:

          Take the CPI; multiply by two and add two.

          That (we found) got us close the the real rate of inflation as shown by general price changes for products and services which we all see on a daily basis.

          No takers on why housing is excluded from the CPI?
          Want a great looking concrete swimming pool in Hawke's Bay? Designer Pools will do the job for you!

          Comment


          • I like the cut of your jib young fella-me-lad!

            Yes, if you increase the housing proportion in the CPI basket, you force Mr Orr to pull finger.

            I'll see if I can find the story behind the Basket of Goods.

            1: When was it invented.
            2: Who's bright idea was it?
            3: What's in it now?
            4: What do other countries have in theirs?
            5: Is it a long term data capture?
            6: Is the thinking and methodology still sound?

            but i think the real problem is in the averages.
            ie, One serial killer with a chainsaw in a packed nightclub still yields a statistic of 99% safe.
            Last edited by McDuck; 01-12-2020, 11:54 AM.

            Comment


            • For Q1:

              Most unusual origins for the CPI.
              Two conflicting starts.

              Option one, in 1919 , USA , only to do with a couple of industries.

              Option two, in the 40's a Russian economist called A. A. Konius.

              I'm getting a bad feeling about this.
              The more I read, the less faith I have in their understanding of organic interactions.
              Shaking my head right now.
              Mr Orr,(and his buddies, and their advisers at the RESERVE BANK) are not looking good.

              Comment


              • Yes, if you increase the housing proportion in the CPI basket, you force Mr Orr to pull finger.... and isn't that the game we have seen ... no inflation here guys look banana's haven't gone up more than 1% this year !! whiles housing (shelter!) breaks new records year on year ...What are the 3 needs of human life?"Survive is our need for food, water, and shelter,....

                But no guys can't have shelter in the CPI ...nothing to see here

                Comment


                • Yes, totally agree.

                  The current basket is a very short term survival type basket.

                  Things like reducing housing costs through ownership are a long term payoff.

                  The idea of a long term and short term basket might answer the problem.

                  Remember, the negative effects of the short term basket will be felt only when Mr Orr and is buddies have long since passed away.

                  Aka...he don't care.




                  Comment


                  • Remember the C in CPI is 'Consumer' it is the index of the items a household might expect to consume over any given period. This is a different measure to broad-based inflation measures.

                    Buying a house is a one time event for a household so I understand why house prices are not in the CPI - but I have often wondered about rent... it is as you say something consumed on a regular basis like bananas.

                    On a separate note I find myself chuckling when I hear Cindy and co wondering what on earth happened to the rental market to see rents rising the way they are. Maybe the perfect Xmas gift for the socialist republic of NZ leaders might be a mirror

                    Cindy,Twitford and now Woody were all at the top of my Xmas card list this year - again!

                    Comment


                    • It's just that the basket has a short term focus.

                      The benefits of slowly paying off a house only show up long term.

                      A long term basket would solve the issue.


                      Comment


                      • Originally posted by Don't believe the Hype View Post

                        [...] On a separate note I find myself chuckling when I hear Cindy and co wondering what on earth happened to the rental market to see rents rising the way they are. Maybe the perfect Xmas gift for the socialist republic of NZ leaders might be a mirror

                        Cindy,Twitford and now Woody were all at the top of my Xmas card list this year - again!

                        Don't worry about Cindy. Her bungalow in Sandringham with its Pohutakawa tree and a future tree house for Neve, has increase in value by over $100k in the last year.

                        Life will still be good if your Xmas card doesn't arrive.

                        Comment


                        • Originally posted by Sanya View Post


                          Don't worry about Cindy. Her bungalow in Sandringham with its Pohutakawa tree and a future tree house for Neve, has increase in value by over $100k in the last year.

                          Life will still be good if your Xmas card doesn't arrive.
                          The PM gets about 500K per year.
                          Fifth highest paid PM in the world.

                          Just goes to show you how ridiculously NZ house prices have inflated.

                          Even the PM couldn't buy an appropriate house without hard saving for at least six years.

                          While The Reserve Bank Governor, Mr Orr, is paid nearly double that, ( probably more, counting the other boards he's on ).

                          Is it any wonder that he doesn't get it, or even care...

                          I say, if you're paid that much, you need to do an exceptional job.
                          None of this " its not my job", or " it's too hard" nonsense.




                          Last edited by McDuck; 18-12-2020, 06:54 AM.

                          Comment


                          • Originally posted by McDuck View Post

                            The PM gets about 500K per year.
                            Fifth highest paid PM in the world.

                            Just goes to show you how ridiculously NZ house prices have inflated.

                            Even the PM couldn't buy an appropriate house without hard saving for at least six years.

                            While The Reserve Bank Governor, Mr Orr, is paid nearly double that, ( probably more, counting the other boards he's on ).

                            Is it any wonder that he doesn't get it, or even care...

                            I say, if you're paid that much, you need to do an exceptional job.
                            None of this " its not my job", or " it's too hard" nonsense.

                            This quote right here shows the 'expectation crisis' we're in - as i've said many times ... there is no housing crisis.

                            The PM couldn't buy an APPROPRIATE house - what is an appropriate house... the true answer is one she can afford. Anything beyond that is expecting more than you can afford. The PM based on 70% tax rate clears $29k/month ignoring any income from her spouse she could stump up a deposit for house in many parts of NZ in most of NZ under 6 months.

                            If as you suggest she needed 6 yrs to find a deposit her NETT income in 6 yrs is roughly $2.1M assuming she saves 30% for a deposit of 20% she could purchase a house for $3.15million - or over 3x the average house in auckland and nearly 4x the average house in NZ.

                            Comment


                            • Originally posted by Don't believe the Hype View Post
                              This quote right here shows the 'expectation crisis'
                              .
                              Total BS.
                              Real words and concepts please.

                              Comment


                              • Originally posted by McDuck View Post

                                Total BS.
                                Real words and concepts please.
                                Not to your liking... sorry... maybe we're suffering from a forum feedback crisis or a differing POV crisis

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