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Book Extract: Generation Rent - Rethinking New Zealand's Priorities

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  • Book Extract: Generation Rent - Rethinking New Zealand's Priorities

    Book Extract: Generation Rent - Rethinking New Zealand's Priorities

    Chapter 4 well worth a read.
    http://www.nbr.co.nz/article/book-ex...orities-173753
    "There's one way to find out if a man is honest-ask him. If he says 'yes,' you know he is a crook." Groucho Marx

  • #2
    If he wants to introduce German tenancy laws, maybe he should emigrate there and live with the rental system he wants.

    He's just banging on and on and trying to sell his book.

    Pity our wonderful media love quoting him and his drivel

    Craig

    Comment


    • #3
      Provided the remaining 2 thirds of NZ outside of auckland is relatively affordable, then the first action step for any 'generation renters' in auckland would be to move or invest outside of auckland. How high do auckland prices need to go before enough of a flow is created of people/money leaving auckland to occur to dappen the housing market? Last cycle 2005 was the year money started over flowing out of auckland (about 3-4 years into the cycle). And back then I don't remember this much fuss being made about a'housing crisis' etc, and there certainly wasnt any RBNZ measures in place helping this flow to occur as there is now.

      Comment


      • #4
        Originally posted by Courham View Post
        He's just banging on and on and trying to sell his book.

        Pity our wonderful media love quoting him and his drivel
        His marketing is good, he seems to be able to get onto any NZ media a the drop of a hat.

        Comment


        • #5
          Originally posted by elguapo View Post
          His marketing is good, he seems to be able to get onto any NZ media a the drop of a hat.
          Ironic as well considering in 2011 he went out telling aucklanders to choose renting over home ownership (even bragging of his own decision to rent instead of buy as he said it was cheaper) due to rent being less than interest charges on mortgage. Now he's written a book about all these poor people who followed his advise and have been locked out of the auckland housing market and missed out on 200k plus tax fee capital gains each over those 3 years as well by following his terrible advice. In 2011 auckland was expensive but there were no 'animal spirits' in the market back then (people still scared of debt etc from gfc) and buying while not particularly good on a cash flow basis was an ok bet if immigration boomed, which it subsequently did.

          Comment


          • #6
            http://www.nzherald.co.nz/business/n...ectid=10819579

            Ok so July 2012, still would be the best part of $200k money down the drain if you followed this guys advise back then instead of buying. Wonder if his $50-100 a week he's saved by renting over this period has amounted to 200k in this time? Doubt it.

            Comment


            • #7
              And he apparently is an economist- I put him in the same category as astrologers and soothsayers and other quacks.

              Still I admire him for putting his money where his mouth is and refusing to buy property. I am also happy to see him reaping the economic rewards of his follies (i.e nothing!). I do feel sorry for those who could have got into the Auckland market in 2011-2012 but who followed his "advice" and are now worse off for having done so.

              Craig

              Comment


              • #8
                I don't understand why you assume those who followed his advice would be better off - I believe rents have risen very much in Akl? And his advice has always been to invest the difference between rent and mortgage payments - not just spend it.

                As a Landlord I would LOVE European proprety laws - so I could have good tenants for longer and they would do the expensive ktichen remodel - sounds like a good idea to me!
                Lis:

                Helping NZ authors get their books published

                Comment


                • #9
                  Originally posted by lissie View Post
                  I don't understand why you assume those who followed his advice would be better off - I believe rents have risen very much in Akl? And his advice has always been to invest the difference between rent and mortgage payments - not just spend it.

                  As a Landlord I would LOVE European property laws - so I could have good tenants for longer and they would do the expensive ktichen remodel - sounds like a good idea to me!
                  i think we are saying they aren't better off! Had he invested in property (not speculated but actually invested) in 2010/11 when he was promoting his "born to rent property ownership is for dummies" mantra, he would have (I would suggest) made a lot more in capital gains than in other investment vehicles.

                  He used his uni education and seer like abilities as an economist to not invest in housing- time has proven him seriously wrong and now he is bitching about it and there not being an even/level playing field. News flash: there never has been.

                  Craig

                  Comment


                  • #10
                    Originally posted by Courham View Post
                    i think we are saying they aren't better off! Had he invested in property (not speculated but actually invested) in 2010/11 when he was promoting his "born to rent property ownership is for dummies" mantra, he would have (I would suggest) made a lot more in capital gains than in other investment vehicles.
                    That would be very dependent on what property and what other investments. US shares have skyrocketed since 2010, had he invested in these he would have outperformed almost any property investment outside Auckland. Had he invested with leverage, he would have outperformed anything else.

                    Comment


                    • #11
                      In which case he should be more than happy paying the low rents vs current market values in Auckland.

                      Craig

                      Comment


                      • #12
                        What I find so hard to understand about this idiot is that he lives in Wellington not Auckland. House prices in Wellington are affordable and he should stop his protest and buy himself a home already.
                        www.PropertyMinder.co.nz
                        # Property Management
                        # Ad Hoc Tenancy Services / Rental Inspections / Terminations and Notices

                        Comment


                        • #13
                          Originally posted by Courham View Post
                          i think we are saying they aren't better off! Had he invested in property (not speculated but actually invested) in 2010/11 when he was promoting his "born to rent property ownership is for dummies" mantra, he would have (I would suggest) made a lot more in capital gains than in other investment vehicles.

                          Craig
                          Not if he had invested in Wellington where he lives

                          Comment


                          • #14
                            An interesting article, good to have some facts on how renting works in Germany and other places, and why there isn't runaway house price inflation there

                            Comment


                            • #15
                              The idea to change by “de-stigmatising renting” is not bad at all. If those people who nourish that stigma and the “public debate centres (focussed) on one quick fix” would understand what is written between the lines in this article.

                              Introducing German law, bring it on - I’m sure landlords would like it.

                              The tenancy law would be enforceable for tenants and landlords alike, tenants would be registered at their residence, orders can be served for rent arrears and compensation claims... and the best of all tenants take care of floor coverings (carpets, etc), window dressings.. and could even bring their own kitchen – and won’t leave after 3 months because of related costs.

                              True, housing is a problem in NZ, but actually people’s problems have little to do with housing - why on earth would somebody prefer to live in AK in a sub-standard or unaffordable house, if the same level of satisfaction would be available somewhere else?

                              to quote “most amateur investors are motivated by capital gains, rather than the income from rents” –well, the rent in those countries is high enough to be profitable and based on housing costs. In NZ housing costs and rent are out of sync.

                              “Germany’s high proportion of renters is that access to finance to buy a home is not as easy as it is in New Zealand” – not true, similar the Kiwi Saver, the Germans can sign up for a “Bauspar Vertrag’. That is a money saving scheme for first-home buyers financed by auto-payments from salary, the employer and the taxpayer. With interest rates below 2% for the duration of the mortgage –it is more affordable than in NZ. The real difference is, people in DE don’t need a house to secure their retirement, which is founded by social contributions during employment. The amount and entitlement depends on how much people paid in (health, old pension).

                              Defeat a stigma – yes, treat homeowners, renters and investor equally.

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