Comments from an Auckland Landlord

Discussions about anything in the news

Comments from an Auckland Landlord

Postby flyernzl » Fri Jun 05, 2015 9:37 am

Property investors and landlords do indeed live in interesting times.

Over the last few months we have been hated, accused, abused, blamed, vilified, pilloried, and otherwise made to feel most unwelcome. Whenever I go out in public these days I feel the need to wear a set of devil’s horns and a forked tail.

Recently I was taken to see the film Woman In Gold. For those of you who have not had the pleasure, it relates the story of a wealthy Jewish family who lived in Austria in the 1920s and 30s. When the Nazis moved into Austria, they confiscated the family’s possessions which included a large painting of a female relative by a noted artist. While the film relates the story of the efforts of the daughter of the family to recover the painting from the Austrian Government, it also includes flashbacks of the German invasion of Austria and how they subsequently treated the Jews who lived there.

Starting with demands that all Jews be readily identifiable, they then steadily proceeded to up the ante. Restriction of movement and confiscation of possessions was then followed by forced resettlement into a ghetto area and then eventual shipment to the concentration camp and death in the gas chambers.

While I do not expect that even the most rabid local socialist would agitate for such extreme treatment of property investors, I do find it a little unsettling that the Reserve Bank mandarins have set in place a system to identify investors as a separate group from owner-occupiers. As history shows, once a group is identifiable it then becomes much easier to impose restrictions and penalties on that group.

We are already heading into group-specific restrictions. Soon there will be tougher lending restrictions on residential property investors - and only residential property investors - who invest in the Auckland Council area - and only within that area. This is held to be justified in an attempt to reduce market demand by those investors within that particular area. The pity is that most mature investors, who probably already have a low mortgage-to-value ratio, will be largely unaffected, while those who are just starting out will be affected the most.

“Invest in the regions!” is the call, no doubt emanating from a Government and its politicians badly spooked by the Northland by-election. “No way” is my answer. If a residential property is highly unlikely to attract a queue of hopeful tenants with money in their hands at the front door, I’m not a buyer. A dog of a property is still a dog, no matter what incentives are created to try and sell it to me.

Despite the media hoopla, the accompanying tax changes are not a capital gains tax at all, merely a variation on the existing trading tax. Instead of the uncertainty of proving intent, you will now be held automatically guilty of buying to resell at a profit if you resell within two years of purchase. That’s the only change, but it suits the current Government to silence those critics howling for a CGT to pretend that’s what it is. They know it’s really not going to do much, but at least they are being seen as doing something and perhaps it will help quell the annoying yelping from their constituents at the Saturday morning electorate meetings.

Economic illiterates such as Herald columnist John Roughan ask “Why has there been no howl of outrage by those who oppose a CGT?” My answer is “Because it isn’t one, it’s just a lamb dressed up as a wolf”.

The next stage? Either the new regime will be seen not to work, in which case there will be calls for even tougher measures, or it will have some effect in which case the cry will go out to impose more restrictions in order to increase the perceived benefits. For we property people, a lose-lose situation.

Interestingly, no-one with the power to regulate and control seems to have asked those actually in the market. All the research is done out of the text books. Olly Newland says that in over 30 years no-one in Treasury or Government has asked him for advice, and certainly they haven’t asked me.

Right now I can visualize the hot-shot high-rise Lawyers and Accountants beavering away through the midnight hours searching out the loopholes in the legislation that will allow their clients to avoid the new restrictions. As usual, once the use of these gambits become known, this will lead to howls of righteous indignation and strident calls for even more laws, regulations and penalties. I fear we are in for a rough ride.

Those of us with longer memories can recall the local car market from the 1950s to the 1970s. At that time there were draconian restrictions on the import of new cars. Import licencing was strictly enforced, and there were all sorts of rorts, gambits and double-dealing to try and get around the restrictions. If you were lucky enough to buy a new car - at a Government controlled price of course – you could sell it after 12 months at a higher price than you had paid new because that’s when the price control came off. Red tape multiplied as each new ploy came into the game and a hasty regulation would be drafted to ban it. Bureaucrats thrived and for many years publicly listed car dealer Schofields topped the Stock Exchange ranking for the highest profit percentage on shareholder’s funds.

The eventual answer was, of course, remarkably simple. Open up the market, dump the morass of restrictions and regulations, and let competition reign. Universal Homes, Keith Hay and Beazley Homes will rise again if there is profit in it. And that’s the only long-term sustainable answer to Auckland’s housing problem.
flyernzl
 
Posts: 31
Joined: Mon Sep 22, 2014 6:50 pm

Re: Comments from an Auckland Landlord

Postby phill » Fri Jun 05, 2015 10:24 am

i have wondered at the complete lack of protest at the government in its latest bid to flog off as much nz to falsely balance a budget now using the last vestiges of green space in auckland as its cash cow under the guise of helping the auckland housing problem
a couple of hundred houses wont do shit for auckland's problem

“Invest in the regions!” is the call, no doubt emanating from a Government and its politicians badly spooked by the Northland by-election. “No way” is my answer. If a residential property is highly unlikely to attract a queue of hopeful tenants with money in their hands at the front door, I’m not a buyer. A dog of a property is still a dog, no matter what incentives are created to try and sell it to me.

bullshit ! ... the rental income to house price percentage is far higher in most regions than in auckland ... its done for the capital gain
( ,,,,,,,, ....... 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 shiney things i have got
User avatar
phill
 
Posts: 1884
Joined: Tue Nov 25, 2014 8:31 pm


Return to General News Discussion

Who is online

Users browsing this forum: No registered users and 3 guests

cron