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Aucklander here: you're right. One of the effective political tactics against the Labour Party was to suggest they'd threaten house prices: most of Auckland hom
by gnat 9y ago
Aucklander here: you're right. One of the effective political tactics against the Labour Party was to suggest they'd threaten house prices: most of Auckland home owners need high real estate prices, either to keep rents (investment cashflow) up, to continue to leverage their retirement real estate Ponzi scheme, or for the simple reason that nobody wants to have to move for work and lose money when they sell their house. These all make it hard for a government to be effective at lowering house prices without the needed-but-deeply-unpopular introduction of a Capital Gains Tax.
The "no sales to foreigners, let's curb immigration" is a sop to affronted New Zealanders of European and Māori descent, who are increasingly finding themselves outbid by recent (last 20-years) Chinese migrants who not only want a house for themselves but also want to participate in the only economically thriving part of the NZ economy that doesn't require a dairy farm: real estate.
- dba7dba 9y agoI don't see any issue with NZ putting up that block to keep out Chinese 'investors', considering the roadblocks foreigners have to face to do business in China. Seems fair to me.
- busterarm 9y agoThere's not going to be any change in money coming in to buy property from foreign buyers. What you're actually going to see is a cottage industry of lawyers setting up citizen-owned shell corporations to funnel this money through -- minus their fees of course.
- dba7dba 9y agoWelp, then, a law will be erected that forces lawyers to report info of shell companies if they are involved in real estate deal. Just a few months ago, US govt started a program where if a foreigner buys real estate of a certain value ($4 million?) in certain hot markets like Los Angeles, NYC, they have to report it to Treasure or IRS. As of now, that value is too high to be effective imo, but there are ways.
- busterarm 9y agoSo my family had a house in Forest Hills Gardens (NYC) that we were selling in early '07 listed at $4.5mil. August-September of that year happened and we had to take an immediate $2mil haircut (eventually more like a $2.4mil one). Luckily it was owned since the 50s and not some crazy leveraged investment vehicle. It still took an additional 6 years (roughly) to sell, but throughout that whole process, 99% of the potential buyers, including the eventual purchasers, were Chinese nationals. I lived in that house and met everyone that came through (including the time Anna Chapman came through to show the house...wow). There's an entire class of real estate here that just has no market without Chinese money coming in.
- el_benhameen 9y agoIsn’t another way of looking at this to say that the presence of Chinese money artificially inflates the prices of some classes of real estate past what the rest of the market will bear?
- busterarm 9y agoIt's possible. It's also just possible that the average American family in New York doesn't have much need for a house with 5 bedrooms. I don't have enough data points to draw conclusions here.
- seanmcdirmid 9y agoYa, try buying a house as a foreigner in china (first tier city). It isn't impossible, but they put up a lot of obstacles to do it (lots of residency requirements, which seem fair enough).
- logicchains 9y agoTo be fair, Chinese non-residents of first tier cities also face restrictions, and even residents may face limits on e.g. the number of houses they're allowed to own.
- seanmcdirmid 9y agoYes, though foreigners have additional hoops to go through to show residency. Also, foreigners can never obtain hukou even if they are resident for a long time and own property, nor do they get school benefits. so there is little incentive for us to buy rather than rent.