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  • Bluecoat
    replied
    When are they clarifying the new build start date for interest deducibility ?

    Lets say you have a portfolio with income taxed at 39%

    you could have bought a sub dividable property worth $1M with 2.5% yield.

    Prior to interest deducibility, this would been ideal to develop and build rentals

    Now have to develop first and build new to qualify for interest deducibility ( need to generate income)

    Leave a comment:


  • Frezzinghot
    replied
    Originally posted by Frezzinghot View Post

    Definitely policy, landlords will be feeling uneasy about what it all means, those that have been in the game 15-20yrs, meh.
    I’m on the look for another property, have just got pre approval but haven’t been out to see agents yet to guage word on the street, which is where the real market is and not speculation on what we think is happening. I will report findings forthwith.

    Leave a comment:


  • Frezzinghot
    replied
    Originally posted by Sanya View Post



    I agree with both of you.

    Data from April could indicate some market cooling, but is that causally linked to policy, seasonality, affordability, supply? Hard to say.
    Definitely policy, landlords will be feeling uneasy about what it all means, those that have been in the game 15-20yrs, meh.

    Leave a comment:


  • McDuck
    replied
    Yup.
    I agree with your agreement.
    It's a lot of factors.

    Immigration will always be the main one.
    It's the only way you can get thousands of people to instantly appear, ready to take up houses.

    Money supply (in the form of debt) is the second one.
    It's the only way you can bring years worth of future earnings into this present moment, to pay the high price of the houses.
    And it's the tool Ma and Pa Speculators use to Phreak the system.

    The other three, physical buildings and infrastructure and birth rate take ages.
    So aren't the factors to try and fiddle with.

    MBIE need such a good kicking up the behind for their past short sighted and reckless behavior.
    I'd love to know the names and faces of those bureaucrats responsible.
    Last edited by McDuck; 03-05-2021, 12:50 PM.

    Leave a comment:


  • Sanya
    replied
    Originally posted by Frezzinghot View Post
    greed and the lack of a real alternative.
    Originally posted by McDuck View Post
    IMHO.

    Amount of credit available to be sucked into the housing sector mostly.
    In other words, how loose monetary policy is.
    I agree with both of you.

    Data from April could indicate some market cooling, but is that causally linked to policy, seasonality, affordability, supply? Hard to say.
    Last edited by Sanya; 03-05-2021, 12:34 PM.

    Leave a comment:


  • McDuck
    replied
    Originally posted by Sanya View Post

    What do you see as the drivers for on-going house price increases?
    IMHO.

    Amount of credit available to be sucked into the housing sector mostly.
    In other words, how loose monetary policy is.

    Leave a comment:


  • Frezzinghot
    replied
    Originally posted by Sanya View Post

    What do you see as the drivers for on-going house price increases?
    greed and the lack of a real alternative.

    Leave a comment:


  • Sanya
    replied
    Originally posted by Frezzinghot View Post

    Yes it does, and my opinion will continue to do so.
    What do you see as the drivers for on-going house price increases?

    Leave a comment:


  • Frezzinghot
    replied
    Originally posted by McDuck View Post

    True, but don't forget, if the prices keep escalating due to speculator activity, that 700 K becomes 800K ...900K etc etc.

    Yes it does, and my opinion will continue to do so.

    Leave a comment:


  • McDuck
    replied
    Originally posted by Sanya View Post


    If you are just starting out with not much to your name then a 40% deposit on a $700k property is more than a few dollars to make it work.
    True, but don't forget, if the prices keep escalating due to speculator activity, that 700 K becomes 800K ...900K etc etc.


    Leave a comment:


  • Sanya
    replied
    Originally posted by McDuck View Post

    The hole is still there.
    Even if you have to throw in a few dollars to make it work.
    That being, " get someone else, (a renter), to pay your mortgage for you"
    While only a few people are playing it, it's OK, but as a national pastime, it needs moderation.

    If you are just starting out with not much to your name then a 40% deposit on a $700k property is more than a few dollars to make it work.

    Further, with record low rental yields, expenses typically outweigh income, so more dollars need to be thrown in each month to make it work.

    I do agree that moderation was required . The clampdown on LVR should have happened late last year. Unfortunately Robertson was sceptical of the link between the Reserve Bank’s money printing and house price inflation.

    Leave a comment:


  • McDuck
    replied
    Originally posted by Sanya View Post
    Not really. Most of the “loopholes” are gone. --
    Long term reward of course..
    The hole is still there.
    Even if you have to throw in a few dollars to make it work.
    That being, " get someone else, (a renter), to pay your mortgage for you"
    While only a few people are playing it, it's OK, but as a national pastime, it needs moderation.
    Last edited by McDuck; 01-05-2021, 06:54 AM.

    Leave a comment:


  • Sanya
    replied
    Originally posted by crashy View Post

    Moderator note: Crashy to add in the source.

    Plus some information is also revealed on NZH here

    Here is the source: https://www.hud.govt.nz/assets/News-...s-REDACTED.pdf

    Leave a comment:


  • Sanya
    replied
    Originally posted by McDuck View Post
    Arrange your finances so that it appears you are making a loss? It's just a technical loss.
    Not really. Most of the “loopholes” are gone. Even HUD believes deductions made by investors represent real cash costs as evidenced in their comment

    “Some investors will have substantial debt and will be in a negative cashflow position. The 37% of property investors (107,530 taxpayers) reporting rental losses to IRD have an average loss of almost $9,000. Most allowable deductions reflect real cash costs to investors e.g. insurance, body corporate fees, maintenance.”

    Real cash costs are actual not technical losses. Further, loses where they do occur are ring-fenced.


    Originally posted by McDuck View Post
    Ask yourself, why would anyone really bother running at a loss.
    Long term reward of course. The reality is that in the short term there may be little or no profit from rent after expenses like mortgage interest, insurance, rates and maintenance are taken into account.

    Experiences and circumstances differ but I routinely hear of investors taking 6-7 years to get to a break even cash flow position. This eventually happens as debt is reduced and rents increase.

    What I feel is quite interesting is that whilst the Government has expressed concern about rental housing shortages and rent affordability – its policy action will make both worse.

    Realising the negative impact on tenants HUD noted “HUD would also recommend that any other changes (e.g. limiting interest-only loans, removing deductibility of mortgage interest) do not apply to investment in new builds, or to currently owned rental properties.”

    Cabinet did not listen.

    Leave a comment:


  • Frezzinghot
    replied
    Multi income property I were is at for me, to continue to purchase cashflow is so import moving forward.

    Leave a comment:

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