Reserve Bank Macro-Prudential Tools

[speights boy]

.25 1.25 it will all be passed onto the tenant in most cases
anyway.

So why all the complaining from landlords if it's not affecting their profit ?

[tulips]

You want your question answered answer my question first ?

SB do you have rental property, a yes or no answer will do
no number necessary ?

[Wayne]

When insurance tripled in Ch-Ch and rates increased
rents went up to compensate,

I would suggest that rents didn't go up because your costs increased but rather there was a bit of a shortage of rental properties (something to do with a bunch falling down).

Over the years people have often said - if you do x then my costs will go up and the tenant will bear the brunt.
It doesn't happen unless you can get enough people to follow your line.
Given that, in general, most rental property is owned by people who have 1 or maybe 2
properties with a lowish amount of debt they don't chase the top $ rent.
The rent you get is driven by what others will accept not what you want because of your costs.

Supply and demand rather than cost +.

[Wayne]

You want your question answered answer mine first ?

Do you have rental property SB ? Yes or no you do not
have to give the number.

edited - did you not like the

Originally Posted by tulips
.25 1.25 it will all be passed onto the tenant in most cases
anyway.

bit? Did it not suit the argument?
And you can't just pass it on to the tenant!
If that were the case rents should be coming down since the cost to borrow is historically low.

If the RBNZ perceive a risk then they need to act.
Just the same as commercial loans have a higher capital requirement for banks - same as commercial property.
Sometimes business bleat but not, it seems, as much as residential PI's.

[tulips]

5% own 2 or more

Course short supply raised rents

If you think insurance tripling and huge rate hikes
had no effect on rent levels we forever beg to
differ.

[lewyh]

Gosh, so much off topic angst (trolling). Lets keep the conversation geared towards whether we think the legislation is fair and what the government should be doing? Hopefully someone with influence can read this and make some smart choices.

There have been a number of interesting points put forward, notably:

- That the industry is unfairly targeted
- The industry should be targetted because it's not like other industries
- That some regulation is necessary because the free market has failed in the past to prevent GFC due to over lending
- There is an issue of under supply as a root cause

Personally, I'm a big advocate of the govt not getting involved where there is no flaw in the free market (because that's what the govt is supposed to be for). I'm a little on the fence about whether there needs to be intervention. Clearly there's a risk of free market failure, but I can't see how lending for houses during a time of under supply will cause an economic problem. The only way I can see this being an issue is if people borrow, the economy crashes and tenants stop paying... At which point it won't be the landlords or banks causing economic problems, merely them experiencing the same issues as all other industries.

My preference would be for the govt to stop targeting investors (because I think landlords are a political scape goat) and focus on city planning (rezoning auckland, fixing the infrastructure) and building more houses. In terms of influx to Auckland, I think that a lot of people (including myself recently) consider the place because that's where the good jobs are. This in itself is bad for NZ because it encourages a rich / poor divide. This is particularly an issue because 50% of the population are in Auckland. In the future, we run the risk of 50% of our population having all the money and higher costs of living - causing a barrier to entry into Auckland.

I'm just a bit frustrated because I feel like the govt is getting involved and is going to stupid-it-up. Also it feels like everyone else can see how to approach this problem except for the govt and it's not going to get fixed.

[tulips]

Give over - let SB answer my question and
I'll gladly answer his.

[speights boy]

My preference would be for the govt to stop targeting investors ........

This consultation paper was raised by the RB.

[Wayne]

5% own 2 or more

Course short supply raised rents

If you think insurance tripling and huge rate hikes
had no effect on rent levels we forever beg to
differ.

So 95% own 1 - guess who will drive rent prices!
Costs going up may make you want to charge more but if your fellow LL doesn't care then you will struggle.
I bet you, if you worked it out in a market that isn't contrained like Christchurch, the increases in rent hasn't covered the increase in costs and inflation.

[Wayne]

Gosh, so much off topic angst (trolling). Lets keep the conversation geared towards whether we think the legislation is fair and what the government should be doing? Hopefully someone with influence can read this and make some smart choices.

A - it isn't legislation we are talking about so the topic is wrong at the start
B - it isn't the Govt bringing in new rules - it is the RBNZ under their mandate to protect the banking system

There have been a number of interesting points put forward, notably:

- That the industry is unfairly targeted
- The industry should be targetted because it's not like other industries
- That some regulation is necessary because the free market has failed in the past to prevent GFC due to over lending
- There is an issue of under supply as a root cause

Personally, I'm a big advocate of the govt not getting involved where there is no flaw in the free market (because that's what the govt is supposed to be for). I'm a little on the fence about whether there needs to be intervention. Clearly there's a risk of free market failure, but I can't see how lending for houses during a time of under supply will cause an economic problem. The only way I can see this being an issue is if people borrow, the economy crashes and tenants stop paying... At which point it won't be the landlords or banks causing economic problems, merely them experiencing the same issues as all other industries.

My preference would be for the govt to stop targeting investors (because I think landlords are a political scape goat) and focus on city planning (rezoning auckland, fixing the infrastructure) and building more houses. In terms of influx to Auckland, I think that a lot of people (including myself recently) consider the place because that's where the good jobs are. This in itself is bad for NZ because it encourages a rich / poor divide. This is particularly an issue because 50% of the population are in Auckland. In the future, we run the risk of 50% of our population having all the money and higher costs of living - causing a barrier to entry into Auckland.

I'm just a bit frustrated because I feel like the govt is getting involved and is going to stupid-it-up. Also it feels like everyone else can see how to approach this problem except for the govt and it's not going to get fixed.

Yes there is far too much rhetoric about the evil LL's are doing.
The Govt is tagging on a bit because they are populous!

The new rules the RB are talking about aren't there to stop the rampant price inflation in Auckland - you need to see that!

I thought Auckland was more like 33% of NZ rather than 50% that has suddenly started being bandied around.
The last census shows the Greater Auckland area as having 1.377mil to a total NZ of 4,242,048

[Wayne]

Give over - let SB answer my question and
I'll gladly answer his.

what was his question?

[tulips]

So 95% own 1 - guess who will drive rent prices!
Costs going up may make you want to charge more but if your fellow LL doesn't care then you will struggle.
I bet you, if you worked it out in a market that isn't contrained like Christchurch, the increases in rent hasn't covered the increase in costs and inflation.

As Jake The Muss said "You too much boy"

If you cannot even demonstrate common
sense with thinking mum and pop control
95% of the rental market why should I take
on anything else you say ?
There are landlords in NZ that have 400 plus
rental properties etc.

[tulips]

what was his question?

Why LL bitching and moaning

[Wayne]

As Jake The Muss said "You too much boy"

If you cannot even demonstrate common
sense with thinking mum and pop control
95% of the rental market why should I take
on anything else you say ?
There are landlords in NZ that have 400 plus
rental properties etc.

You have lost me on that one?
What common sense have I missed?
There probably are LL with 400+ properties but not many of them.

[tulips]

You just assumed it was a straight 95%.
Know plenty like you that have 6, or more
but you saying that has no effect on
the 95% figure you quoted.

SB one can only assume the answer is no, you
can run but not hide.