A new oligopoly brewing? (10 Aug, 2020)

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Re: A new oligopoly brewing? (10 Aug, 2020)

Postby Perry » Tue Aug 11, 2020 7:44 pm

greven wrote:Property capital gains are fairly meaningless for people who only own one property, but the massive gains above general inflation become very real when someone sells their 2nd/3rd/400th property

Please explicate that blandishment with commensurate details.
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Re: A new oligopoly brewing? (10 Aug, 2020)

Postby phill » Tue Aug 11, 2020 8:21 pm

greven wrote:Property capital gains are fairly meaningless for people who only own one property, but the massive gains above general inflation become very real when someone sells their 2nd/3rd/400th property

The gains are only illusionary until the time comes to cash out & leave the property investment game.


yup
for single home owners it's an illusion
the only ones that gain from it are
the banks ... much higher loans to repay ( hence more money as debt they create )
real estate agents .. much higher commission per sale
councils .. much higher rates
its a huge price to pay for rental security ( im not likely to evict myself )
( ,,,,,,,, ....... A E I O U use em sparingly theres probably not enough )

i might live and eat in a sewer .. but hey look how many of these shiny things i have got
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Re: A new oligopoly brewing? (10 Aug, 2020)

Postby Perry » Tue Aug 11, 2020 9:00 pm

greven wrote:Property capital gains are fairly meaningless . . .

Fairly?
No.
Totally.

Mainly because they are an absolute lie and not gains at all.
At best the 'numbers' keep pace with inflation.
Inflation being something largely driven by gummints.
To said gummints' advantage.
Taxing it being even better.

That's why - in all the associated 'working group' talkfests - inflation is excluded.
Just like so-called tax bracket creep for income tax.
The woodenheads need the money for things like their spouses' taxpayer-subsidised air travel;
Ex-PM perks, etc.

Things which would be subject to Fringe Benefit Tax in the real world.
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Re: A new oligopoly brewing? (10 Aug, 2020)

Postby phill » Tue Aug 11, 2020 10:52 pm

Perry wrote:
greven wrote:Property capital gains are fairly meaningless . . .


At best the 'numbers' keep pace with inflation.
Inflation being something largely driven by gummints.
.


house prices have outstripped inflation by an order of magnitude every year for quite some time

if they were indexed to inflation things would be a lot better and realistic

i had a house built ( 3bdr house 980 sqmtr section glenfield all consents and loan fees ) in auckalnd in the early 80s for less than the price of one years combined wages of my ex and i at 21 and 23 years old

that same house would now be at least 5 years combined wages for people at the same age in the same jobs
( ,,,,,,,, ....... A E I O U use em sparingly theres probably not enough )

i might live and eat in a sewer .. but hey look how many of these shiny things i have got
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Re: A new oligopoly brewing? (10 Aug, 2020)

Postby aardvark_admin » Wed Aug 12, 2020 6:27 am

The gains are dependent on the metric for measurement.

If you measure them in terms of how many houses it takes to by another house... there are zero gains.

If you measure them in terms of how many cars it takes to buy a house, there are significant gains.

The problem is that the increase in house prices only really benefits the lenders -- the banks. They make far more money by providing a $800K mortgage for a property than they do when the property is half that price and the mortgage is only $400K.

Once you are on the property lader, house-price rises are kind of irrelevant because the property you sell will have gone up (percentage wise) by about the same as the property you buy. However, what this actually does is penalise future generations because it becomes more difficult (sometimes impossible) for them to get on the ladder. They are paying in "labour-earned dollars" not in "dollars created by capital gains" so they are always going to be one step behind in a climbing market.

The real gains come when people "cash out" of the property market.

That little rental property you bought 10 years ago in Tokoroa for $160K is worth over twice that today. Back when you bought it, it was worth four brand new mid-spec cars. Today it's worth eight brand new mid-spec cars. That extra $160K you pocket for sitting on your bum for 10 years didn't come from nowhere -- it's coming out of the pockets of the young couple who are buying that house as their "first" home.

That's just not right (IMHO).
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Re: A new oligopoly brewing? (10 Aug, 2020)

Postby Perry » Wed Aug 12, 2020 7:41 am

phill wrote:house prices have outstripped inflation by an order of magnitude every year for quite some time

if they were indexed to inflation things would be a lot better and realistic.

Then you have the problem of which index to use. The CPI is a bad joke. Mainly because certain benefits are indexed to it, so the gummint has an interest in keeping it at an artificially low level.

The RBNZ Inflation Calculator is sub-divided into categories.

A more recent advent is the Household Living-costs Price Indexes

I see the latter as a bit more useful than the CPI. But only a little. I recall one year the stated reason that the CPI increase was minimal was because the price of AvGas had dropped so o'seas travel was cheaper. I suspect that to many people on a gummint benefit, the notion of an o'seas trip was a fantasy. (Like the official CPI figure was. :twisted: )

Some years back, a group of us noticed the disparity between the price changes seen in shops and the 'official' figures. As part of our amateur sleuthing, we came across a weird thing called hedonic statistics that was being used to distort the 'official figures.' So we came up with a formula of our own. All very anecdotal, of course. :shock:

Take the CPI, add two and multiply the result by two.

That gave us a figure that fairly reliably matched the reality of the generally observable price changes we saw.
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Re: A new oligopoly brewing? (10 Aug, 2020)

Postby Ossified Location » Wed Aug 12, 2020 8:37 am

Perry wrote:
Perry wrote:Could it suggest that the gNats care more about housing tenants than the socio-commies?
Ossified Location wrote: Just to clarify, are you suggesting that there are 39,393 empty houses in Auckland because National cares about housing tenants?

Nothing to do with empty houses. Rather, which Party's MPs own how many.

You were not suggesting all gNat MPs 'extra' houses are empty, were you?

Of course not, if I wanted to suggest that I would have suggested it.

You seem to be having a little difficulty understanding my point, so I'll try rephrasing it to see if that helps you. For brevity I'll omit the references and data I've already provided.

1. NZ fairs very badly on international metrics on house affordability.
2. There are socially unacceptable levels of people who cannot find a house to live in.
3. At the census there were 39,393 empty houses in Auckland alone.
4. This is partly because the current system has made empty houses a profitable investment.
5. The trend of rapidly rising house prices has happened under both National and Labour governments.
6. MPs tend to own a lot of houses.
7. We all have cognitive biases.
8. Is it possible that MPs owning a lot of houses could subconsciously influence their ability to see solutions to the problem of rising house prices?

Now, which step is it that you are having trouble understanding?
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Re: A new oligopoly brewing? (10 Aug, 2020)

Postby Perry » Wed Aug 12, 2020 9:13 am

Ossified Location wrote:1. NZ fairs[sic] very badly on international metrics on house affordability.
A sort-of hung comparative. Similarly, NZ also fares very badly on pay and productivity and related things.

Ossified Location wrote:2. There are socially unacceptable levels of people who cannot find a house to live in.
Disagree. Adding the adjective "socially" distorts things. There are unacceptable (to who?) levels of people who cannot find a house to live in. There are many causes. E.g. No private LL wants to house a "P-head druggie." Would you blame them for that?

Ossified Location wrote:3. At the census there were 39,393 empty houses in Auckland alone.
No comment - it's a statistic.

Ossified Location wrote:4. This is partly because the current system has made empty houses a profitable investment.
What is "the current system?" Are the anti-LL, pro-tenant laws being passed a part of what you refer to? If so, those laws will worsen the present situation - in 2, above - in my view.

Ossified Location wrote:5. The trend of rapidly rising house prices has happened under both National and Labour governments.
Agreed.

Ossified Location wrote:6. MPs tend to own a lot of houses.
Too broad. On the figures provided in the chart you posted, some particular party MPs may do. Because the chart says it's averaged, it's not possible to say with any certainty.

Ossified Location wrote:7. We all have cognitive biases.
Agreed.

Ossified Location wrote:8. Is it possible that MPs owning a lot of houses could subconsciously influence their ability to see solutions to the problem of rising house prices?
Anything is possible. Even more so when W'gton woodenheads are involved. I find it perplexing that MPs who own houses which I presume are residential rentals, vote for Draconian tenancy laws. But then, they're not a very bright lot, are they?
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Re: A new oligopoly brewing? (10 Aug, 2020)

Postby phill » Wed Aug 12, 2020 9:56 am

maybe some sort of " abandoned house " legislation

any house being left without being lived in for more than 3/4/6 months can be used as accommodation ( squatting )
for anyone that applies through a govt agency and pays some nominal ( maybe half local norm ) rent to the govt in lieu of a formal landlord agreement

that should frighten the buyers and sitters of houses into either renting them legitimately or spending money upgrading them

either way its a gain for the taxpayer
( ,,,,,,,, ....... A E I O U use em sparingly theres probably not enough )

i might live and eat in a sewer .. but hey look how many of these shiny things i have got
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Re: A new oligopoly brewing? (10 Aug, 2020)

Postby Perry » Wed Aug 12, 2020 10:04 am

phill wrote:maybe some sort of " abandoned house " legislation

I doubt they are abandoned - just not occupied - but still paying Rates.
I think I've heard similar sentiment rumblings from councils.

But it's symptom-chasing, not cause fixing.

Such an abrogation of private property rights would cause quite a stir.
Mind you, the idea might have appeal to socialist Cindy.

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