How many investment properties is too many?

[Oh_hunnihunni]

We used to avoid the place in loopy season despite living close to town. But when the visitors had gone it was wonderful. Though our little guiding business relied on tourists, most booked well in advance.

If you fish, have you been up the Hinemaiaia? It was my happy place, learning to fly fish, and barbecueing a few lamb chops on the stones...

Those were the days!

[TygerTung]

The reason young people can't buy houses any more is that they are just lazy. Not like us hard working older people.

[Oh_hunnihunni]

Ha!

If I work hard I have to lie down for three weeks to recover...

[Lilith7]

Yeah that'll be it, sure to be. Lazy buggers just don't want to get off their bums & work.

Nothing to do with eye wateringly higher prices....

---

Ha!

If I work hard I have to lie down for three weeks to recover...

I'm usually fine while I'm doing whatever it might be, mostly anyway as long as I stop for a sit down now & then.
Its the next day I'm knackered.

[Magoo]

The reason young people can't buy houses any more is that they are just lazy. Not like us hard working older people.

i seldom meet anyone lazier than myself.
mostly because i cant be bothered

---

We used to avoid the place in loopy season despite living close to town.  But when the visitors had gone it was wonderful. Though our little guiding business relied on tourists, most booked well in advance.

If you fish, have you been up the Hinemaiaia? It was my happy place, learning to fly fish, and barbecueing a few lamb chops on the stones...

Those were the days!

i love the big water of the Tongariro.
that said my favourite river to fish is the tiny Ngongataha Stream near Rotorua.
Caught my first trout in the Waitahanui River with my grandad when i was 10.
hooked.

[Oh_hunnihunni]

I fell for an angler, he was actually stretching line at the time. There was no hope from that point on...

[TygerTung]

People complain because young people might go out for the odd coffee and bite to eat at a cafe and say that's why they can't buy a house. But really, if a house is so outrageously out of reach ($1m for Auckland), the young people may as well go out and have a coffee, it won't make any difference.

[Lilith7]

Yep, exactly - they haven't a chance of ever owning a home the way things are now. We really need to change things so that's possible again.

[Zurdo]

Ruth Richarson sold the Goose that Laid the Golden Eggs - Housing Corp motgages. The banks (and Fay) bought them up because, um, you make shit loads of money from mortgages. We built our first house with a Housing Corp mortgage, same as our parents did. You didn't have to earn above a certain amount to be able to pay back the mortage - there was a minimum amount. We had to falsify my pay slips to show I was earning less than I really was...made sure we didn't own an expensive car, etc. It was tough to comply with the restrictions....and then we had up to 19% interest anyway at some stage.

So yeah, we had an easy step onto the ladder, and Solo Mums (Paula) were almost guaranteed a Housing Corp mortgage, a lot of Solo Mums from the '70's and '80's had their own home. Blame it on Ruth.

[Oh_hunnihunni]

Plus her Daddy bought her a unit...

But that's old news. 19%? I was lending when it hit 26%. People still wanted loans...

[Lilith7]

There was a time years ago when people were able to capitalise the Family Benefit in order to buy a house. But there's no Family Benefit these days, & not much chance of being able to buy a house for most people.
It can't be that hard to change this situation surely.

[Oh_hunnihunni]

The problem though is the price of the house versus the prospective buyers income. The gap has become too great, many times what it was when we could do that. The only way to bring that gap down is to crash house values, and no politician has the guts to suggest such a thing. It could be done, but it would cost whoever did it their careers.

A carefully applied CGT could start the process, if it was targeted at investors with more than reasonable holdings. But that too would take courage.

We have very few political leaders with that stuff in their veins. If any.

[Zurdo]

The Housing Corp Mortgages were supposed to be low interest loans, so 19% was high for them. I remember people walking around like stunned mullets with interest rates well into the 20% range. And then...banks were giving away money on low interest rates - remortgage with us, and buy a boat too, and a Harley ! What goes around comes around...but I don't think it's on earth's orbit these days, it's a comet that takes 130 years.

[SueDonim]

I seem to remember the Housing Corp loans were 3% when normal loans were up to and even over 20% (my first mortgage was 15.65%). Recently we've had mortgages at an all time low, so even the Housing corp loans that seemed like "nothing" back then were high by our recent standards. But of course they are increasing again now.

"A carefully applied CGT could start the process, if it was targeted at investors with more than reasonable holdings". How does a CGT targeted at investors have any impact on anything? Investors don't sell, apart from those currently bailing out because of the law changes that make it harder and more expensive to be investors. And maybe the occasional one wanting to clear mortgages - again, more common now because the supposedly neutral reserve bank has imposed lending rules that mean investors are now required to pay off loans they would otherwise have continued interest only.

"So now it is time to recoup the capital gains?". The ongoing disincentive in being a landlord combined with the current high capital gains at the moment do make that a very attractive option for some. Care still needs to be taken though - those who want their properties to be retirement income can still lose. Once a property is sold it never makes you any further income. Sell too soon and you could still run out of money in old age. The GRI that comes from your lifetime of paying tax isn't really that great a return and although there seems a lot to be gained by the current high prices, everything is relative. People selling now need a plan for what they are doing next or they might find themselves needing to rent.

For younger people starting out, yes, it is harder at the moment than it used to be, but it's not insurmountable. Looking at articles in the media over the last few months, the proportion of first home buyers has been increasing, and their average age of about 35 has been steady over the last few years. Those who really want to can find a way. Those who spend all their money frivolously don't. Frivolously doesn't mean the odd coffee or cafe lunch, it's those who buy 2-3 coffees, plus pies and filled rolls for smoko and lunch every day. Who drive a car that's more expensive than practical. Who drink alcohol and take drugs. Etc. Yes, they should have fun, but also need to be able to plan for the future which is what seems to be lacking. It's called delayed gratification and kids learn it at about 5 years old. Seems some of them lose it when they get to 20.

[Lilith7]

The problem though is the price of the house versus the prospective buyers income. The gap has become too great, many times what it was when we could do that. The only way to bring that gap down is to crash house values, and no politician has the guts to suggest such a thing. It could be done, but it would cost whoever did it their careers.

A carefully applied CGT could start the process, if it was targeted at investors with more than reasonable holdings. But that too would take courage.

We have very few political leaders with that stuff in their veins. If any.

Perhaps a politician keen to retire could manage it to apply a CGT. Or one could come out of retirement, do the necessary & then promptly retire again - don't really like the chances of that, though.

They're all a bit too keen on keeping their position, & their perks on retirement.

We hear constantly of the alleged faults of the younger generation, but that hasn't been my experience at all. If anything, its virtually the opposite & most I've come across are either studying, working or both.

[TygerTung]

It was easier for the older generations to get into a house. Far easier. A couple could easily buy a do-er upper in a good area of town on low wages with a small deposit. Now a young couple will need an enormous deposit and good wages to get a miniature do-er upper in a rubbish area of town.

Possible? Yes. Easy? Certainly not. Some enormous sacrafices will need to be made, much more than has had to have been made in the past.

[Oh_hunnihunni]

The ratio of house price to income has grown out of all proportion to common sense.

And some still deny it is a problem? Why? Because it is in their interests to do so?

[Foal30]

I bought my first house IIRC it was 3.5 years wages at the most
Now it would 10-12 years surely (like for like)

2 of Our 5 kids have their first houses but we kicked in on both. We will help again next year with another one. The Kids aren’t lazy or stupid or feckless, they earn more coin than Mrs Foal and I did at that time of life.

Ignoring or denying there is a Generational Imbalance in OPPORTUNITY TO BUY RESIDENTIAL PROPERTY is poor governance or analysis.

[Lilith7]

According to this, back in 1992 you'd need a much smaller amount to purchase a house than is needed now.

https://thespinoff.co.nz/money/06-07-202...a-nz-house

Auckland was $66,322 & now is $177,721.
Canterbury was $50,665 & is now $90,416

[TygerTung]

That is income, so you need to earn a lot now to buy a house, especially in Auckland.