Price and immigration, is the model a bit off?

[eri]

only if

they feel they are being overtaxed

under-rewarded

with a likely future of more taxes

+ less oportunity

[Davo36]

Once the Aussie economy gears up again, and Kiwis start to go back to Australia (as they have done for a long, long time) it will be Labours fault - no matter what they do.

Such is political life.

National got blamed for increasing the national debt - after the GFC and 3 major earthquakes.

[Wayne]

Such is political life.

National got blamed for increasing the national debt - after the GFC and 3 major earthquakes.

But they actually did.
They may feel there was good reason but they did increase the debt.

[Davo36]

But they actually did.
They may feel there was good reason but they did increase the debt.

But they had no choice

In the same way Labour will have no choice in whether people leave (or not).

[Wayne]

But they had no choice

In the same way Labour will have no choice in whether people leave (or not).

Of course they had a choice.
Would be interesting to see what was borrowed for which.
For the earthquake reinsurance contributed a lot but people keep talking as if the Govt had to borrow for the complete rebuild.

Labour has no choice about people leaving - we aren't a state with locked borders.

[WINZ]

Originally Posted by Wayne Once the Aussie economy gears up again, and Kiwis start to go back to Australia (as they have done for a long, long time) it will be Labours fault - no matter what they do.
Such is political life.


National got blamed for increasing the national debt - after the GFC and 3 major earthquakes.

Such is political life.

National got blamed for increasing the national debt - after the GFC and 3 major earthquakes.

Yes National increased the debt (it was generally warranted given these events) but arguably our current debt position would have been much worse had Labour not built up significant surpluses from their 9 years in power. The Labour Government reduced debt from 22.6 per cent of GDP in 2000 to 5.5 per cent in 2008, which in its own right is a considerable achievement.

In terms of Wayne's point, I don't think Aussie will be "gearing up" anytime soon. They are one of the most heavily indebted countries on the planet, and heavily reliant on China, another heavily indebted country...

Australia is well overdue for a recession / sharp correction.

[eri]

the only oecd country to not have had a recession in 26 years!

http://www.news.com.au/finance/economy/australian-economy/australia-now-holds-the-record-for-a-country-not-having-a-recession-26-years/news-story/2d87129f76c43056f2b1a250723203ec

qantas, the only major international airline to never have had a fatal jet accident

https://en.wikipedia.org/wiki/List_of_Qantas_fatal_accidents

if you believe it's luck

maybe their luck is running out

if you believe you "make your own luck", through wise decisions and prudent practices

then they may dodge a recession, sharp correction, as they have done many, many times before

if and when they they get back into top gear

it'll be with a lot of kiwis at the controls

heck, even their deputy pm

[Chris W]

Ban on foreign house buyers by early 2018 - but Aussie buyers exempt

31 Oct, 2017 4:32pm 3 minutes to read




The new law would amend the Overseas Investment Act. Photo / File
NZ Herald

New legislation will be introduced before Christmas to ban foreigners from buying existing residential homes in New Zealand, Prime Minister Jacinda Ardern announced at her post-Cabinet press conference today.
The new law would amend the Overseas Investment Act to classify residential housing as "sensitive", which would mean that non-residents and non-citizens cannot purchase existing residential dwellings. Australians would be exempt, as New Zealanders are in Australia.
"We expect legislation to be introduced before Christmas and take effect immediately once passed early in 2018," Ardern said.
She added that foreigners would still be able to buy land and build new homes, as that would add to overall supply.

She said the previous Government's claims that banning foreign buyers would breach free trade agreements were wrong.
The new provision would not breach the Free Trade Agreement with Korea or China, or impact the proposed Trans-Pacific Partnership.
Ardern said there would be an issue with the Singapore Closer Economic Partnership.
"The options with Singapore will be worked through.
"The proposed change means we can move our focus away from land issues at the negotiating table at APEC when negotiations on the TPP reach their final stages, and focus on Investor State Dispute Settlement clauses."
She did not want to elaborate on the Government's negotiating position relating to ISDS, but added that many TPP countries had expressed similar concerns.
"We remain determined to do our utmost to amend the ISDS provisions of TPP. In addition, Cabinet has today instructed trade negotiation officials to oppose ISDS in any future free trade agreements.
Ardern said foreigners buying homes off the plan was an issue that still had to be resolved.
"That's a detail that we're working through ... particularly when it comes to apartment dwellings, this is potentially an issue."
She did not know how many homes the change might affect, saying there has never been reliable data on the issue.
The announcement is the first major change that Cabinet has confirmed.
"This Government places a high priority on home ownership and housing affordability. We stand strongly in favour of the view that housing is a right," Ardern said.
Minister for Trade and Export Growth David Parker did not think there would now be a rush from foreigners to buy New Zealand homes.
But the Government would proceed quickly. There would be no impact on TPP - should New Zealand sign on - if the new change was passed before TPP came into effect.
Ardern declined to say whether New Zealand would refuse to join the TPP if the ISDS issues were not resolved.
"I'm not going to undermine our negotiating position. We are going in with the explicit intent to try and remove New Zealand from these clauses.
"We will do all we can at this late stage to negotiate in the best interests of New Zealand and New Zealanders when it comes to the use of ISDS clauses."
She said it will be "very difficult" to achieve at this late stage, but "that is not going to stop us from trying".
Ardern said banning foreign buyers with a stamp duty would have breached the Korea FTA, in contrast to statements by the previous National-led Government.
"The past Government was essentially wrong."

[artemis]

Interesting that the previous government was apparently wrong. Current advice is from MFAT according to David Parker at 5.25 in the below link. So are MFAT officials finally doing their job properly?

http://www.radionz.co.nz/audio/player?audio_id=2018619907

[Davo36]

I find it interesting that it's only residential property. This was emphasized right at the end of that interview.

So what implications will this have for commercial/industrial property here I wonder?

[Learning]

qantas, the only major international airline to never have had a fatal jet accident

if you believe it's luck...

In Qantas’s case it IS luck. They went through a every precarious stage a few years ago where maintenance was substandard and they had a couple of close calls as a result.

[Chris W]

FlyerNZL

Looking at the supply side.

Yes you are correct, when economic theory suggests that when prices increase, then it becomes more profitable to supply to the market, and there is an increase in supply to the market - there is one key assumption embedded in here. That is that the cost of production remains unchanged.

Construction costs have increased from what I can determine - from tradies, to construction materials (possibly due to project delays which means overtime rates, etc, FX moves, commodity price increases, labour cost increases, financing costs, etc). Or that original estimate for the cost of production was incorrect, and they had cost blowouts. Fletcher Building's recent announcement on loss estimates on 2 projects would seem to confirm this www.stuff.co.nz/nelson-mail/nz-business/94919953/Fletcher-Building-chief-executive-leaves-NZX-makes-enquiries).

I also recall the Rose Garden apartment project in Albany asking for higher prices to those who bought off plan due to construction cost increases and delays (http://www.nzherald.co.nz/business/n...ectid=11743472).

If construction costs have increased more than the selling price and buyers are not willing to pay higher prices, then it may no longer be economically feasible to continue with the project altogether. If property market prices drop, then you might find that land costs drop also, which would lower the construction cost in the next construction cycle. Also as building construction work slows down, tradies without work are willing to lower their prices due to price competition amongst tradies / labourers without work.

Also if property developers are no longer confident that they can sell the project at current price points (due to expectation of a property market price drop), then they may choose not to go ahead with the development.

Other potential constraints to supply:
1) shortage of skilled labour / workers - I remember last year trying to do a renovation, it was difficult to find tradesman and even then you had to pay a premium rate if you wanted the job done quickly. Also note that some tradies are going out of business further limiting the skilled labour shortage. www.noted.co.nz/money/property/if-there-s-a-shortage-of-tradies-why-are-they-going-out-of-business/)

2) council approvals can be slow, require plan changes and delay a project.

3) financing - bank financing for developers has really slowed down - I recall the St James development in Auckland Central City which was cancelled due to financing issues. (http://www.nzherald.co.nz/business/n...ectid=11748861)

FYI, starting to see some costs of construction coming down in some areas - costs of vacant sections are coming down. If you assume a NZ$775,000 selling price last year and say NZ$659,000 this year (actual section asking price in Flat Bush on trademe.co.nz) then that is an almost 15% price drop.

Developers who needed to sell sections and houses in larger-scale greenfield developments were finding they had to drop their prices. In Flat Bush, prices for vacant fully-serviced sections had been in the high-$700,000s last year but were now in the $600,000s.

https://www.stuff.co.nz/business/98450261/qv-reports-first-yearonyear-price-drop-since-2011

[Chris W]

Interesting how population growth was given as the reason for property prices continuing to rise.

To address this one needs to look at the factors driving property demand, principally population growth. Taking into consideration trends in fertility and migration, current forecasts would suggest that the population of Ireland will increase from 3.9 million in 2002 to 4.81 million in 2016.

All in all, the evidence appears to point in one direction - strong steady demand for the foreseeable future. Our young population, overall population growth, and strong economic performance will mean that demand for homes and the value of those homes will be sustained for many years to come.

Link to article

https://www.irishtimes.com/life-and-style/homes-and-property/prices-up-15-in-2005-and-growth-will-continue-1.1288629

Well you can look at how that subsequently turned out ...

[eri]

councils don't really buy into the concept that you own your own home

rather you sublet it from them over your lifetime for the cost of the outgoings

hence when easy money is to be made they legislate for the current owner

to upgrade the stock to as close to new built standard

as they thik they can get away with

unfortuanetly there is a lag of several years with legislation and the fig leaf of elections

so the first people to see the easy money in subdividsion or sale

do so and make easy money

later attempts are strangled by red tape + "requirements"

so now in auckland

the easy has been made by the bolters

but council are still closing the gate, trying to legislate "their" share

for the greater good of us all, in the big picture of wealth redistribution

[eri]

more white flight

from SA?

In 2016, he told supporters he was "not calling for the slaughter of white people' at least for now".

...

"The ANC unequivocally supports the principle of land expropriation without compensation.

"The time for reconciliation is over. Now is the time for justice," Malema was quoted by News24 as telling parliament. "We must ensure that we restore the dignity of our people without compensating the criminals who stole our land."

http://www.nzherald.co.nz/business/n...ectid=12003693

would they want to come here, given the new gov. doesn't like them?