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Unless they wanted to move abroad. So they did not only lock foreigners out, but also their population in, to some extent.

eecc 9y ago
That’s not only attributable to this single item. There’s more such as exchange rate, salary levels and savings rates... that you’re stuck in an economic tarpit because you can’t speculate freely on housing (a primary necessity, btw) is a bit disingenuous
elyobo 9y ago
Sure, there are a some that would be disadvantaged (new home buyers that end up in negative equity would also be in a bad situation) but they're dwarfed by those that benefit. A government with the nerve to crash the market through sane taxation would be able to reap a sufficient dividend to compensate those genuinely disadvantaged through negative equity, but it seems unlikely to happen.
- conanbatt 9y ago
  > A government with the nerve to crash the market through sane taxation would be able to reap a sufficient dividend to compensate those genuinely disadvantaged through negative equity, Ha! The government is already collecting taxes because of home sales, it doesn't need to restrict it to solve it with its magical redistribution powers.
  - elyobo 9y ago
    I don't think you understand the NZ situation very well; the government collects very little from property sales compared to most parts of the world, because there's no stamp duty and there's practically no capital gains tax. That said, government revenue isn't even the problem, the excessive cost of housing is the problem. The government is already interfering in the housing market by not taxing it at the same level as normal income; by making it tax advantageous to earn capital gains rather than by labour it pushes money into that market. I'd prefer that they stopped messing with the housing market by treating it the same.
alexasmyths 9y ago
"Unless they wanted to move abroad" Ah - exactly. They want to make the local citizens pay for their overseas retirement then? No thanks. Again - community centric economic policies for domiciles is imperative. Globalization of these things will hurt 99% of us.
- conanbatt 9y ago
  > They want to make the local citizens pay for their overseas retirement then? They want to make foreigners pay them their foreign retirement, in that case. > Again - community centric economic policies for domiciles is imperative. It is the government itself that is creating the problem, by overly restrictive zoning policies, similar but even more pronounced in NZ.
  - elyobo 9y ago
    No, it's Kiwis that will ultimately pay the price, as it's Kiwis that are getting screwed by unaffordable housing.
    - conanbatt 9y ago
      Person A has property and wants to sell it to person B, and person C wants to get the property at a lower price, so he forbids, by force, for person A to sell it to B. Why do you think person C is getting screwed if A sells to B? A thought experient: What if the landowners went the opposite way: property can only be sold to foreigners that are poorer than nzlanders. How would that go in this scheme of things.
      - elyobo 9y ago
        The average price of property grows due to the additional demand from speculators, foreign and local, pushing up the price that C has to pay for any other property as well. It's not that complicated. The primary purpose of housing is not to make people money, it's to house people. To serve that goal the lower the price is the better. In that context it's clear that it's not the relative wealth, or even foreigner vs local that's the problem, it's speculation of any kind. So no, in your thought experiment it's no better to sell to foreign speculators regardless of their relative wealth. A more interesting thought experiment is what happens in an economy when property speculation doesn't happen. House prices are lower, as demand is only from those that want to live in them and those that want to buy them to lease them out. With lower prices paid, there's more money (on average) in everyone's pockets - including those that rent, due to lower rental prices. This increase in money stimulates the economy, especially because most of the relative benefit accrues to those on lower incomes that spend most of their income to live. The economy is further benefited as much of the money that would have otherwise been dumped into non-productive real estate speculation instead flows into real investment. The end result of discouraging property speculation is enormously beneficial to the country. Investors can speculate in the stock market or whatever else they like, because people don't live in shares, but the housing market exists to serve a purpose... and that purpose is not to make people money. That's an acceptable side effect so long as the primary purpose is fulfilled, but in NZ and AU it's failing.

eecc 9y ago

That’s not only attributable to this single item. There’s more such as exchange rate, salary levels and savings rates... that you’re stuck in an economic tarpit because you can’t speculate freely on housing (a primary necessity, btw) is a bit disingenuous

elyobo 9y ago

Sure, there are a some that would be disadvantaged (new home buyers that end up in negative equity would also be in a bad situation) but they're dwarfed by those that benefit. A government with the nerve to crash the market through sane taxation would be able to reap a sufficient dividend to compensate those genuinely disadvantaged through negative equity, but it seems unlikely to happen.

conanbatt 9y ago
> A government with the nerve to crash the market through sane taxation would be able to reap a sufficient dividend to compensate those genuinely disadvantaged through negative equity, Ha! The government is already collecting taxes because of home sales, it doesn't need to restrict it to solve it with its magical redistribution powers.
- elyobo 9y ago
  I don't think you understand the NZ situation very well; the government collects very little from property sales compared to most parts of the world, because there's no stamp duty and there's practically no capital gains tax. That said, government revenue isn't even the problem, the excessive cost of housing is the problem. The government is already interfering in the housing market by not taxing it at the same level as normal income; by making it tax advantageous to earn capital gains rather than by labour it pushes money into that market. I'd prefer that they stopped messing with the housing market by treating it the same.

alexasmyths 9y ago

"Unless they wanted to move abroad" Ah - exactly. They want to make the local citizens pay for their overseas retirement then? No thanks. Again - community centric economic policies for domiciles is imperative. Globalization of these things will hurt 99% of us.

conanbatt 9y ago
> They want to make the local citizens pay for their overseas retirement then? They want to make foreigners pay them their foreign retirement, in that case. > Again - community centric economic policies for domiciles is imperative. It is the government itself that is creating the problem, by overly restrictive zoning policies, similar but even more pronounced in NZ.
- elyobo 9y ago
  No, it's Kiwis that will ultimately pay the price, as it's Kiwis that are getting screwed by unaffordable housing.
  - conanbatt 9y ago
    Person A has property and wants to sell it to person B, and person C wants to get the property at a lower price, so he forbids, by force, for person A to sell it to B. Why do you think person C is getting screwed if A sells to B? A thought experient: What if the landowners went the opposite way: property can only be sold to foreigners that are poorer than nzlanders. How would that go in this scheme of things.
    - elyobo 9y ago
      The average price of property grows due to the additional demand from speculators, foreign and local, pushing up the price that C has to pay for any other property as well. It's not that complicated. The primary purpose of housing is not to make people money, it's to house people. To serve that goal the lower the price is the better. In that context it's clear that it's not the relative wealth, or even foreigner vs local that's the problem, it's speculation of any kind. So no, in your thought experiment it's no better to sell to foreign speculators regardless of their relative wealth. A more interesting thought experiment is what happens in an economy when property speculation doesn't happen. House prices are lower, as demand is only from those that want to live in them and those that want to buy them to lease them out. With lower prices paid, there's more money (on average) in everyone's pockets - including those that rent, due to lower rental prices. This increase in money stimulates the economy, especially because most of the relative benefit accrues to those on lower incomes that spend most of their income to live. The economy is further benefited as much of the money that would have otherwise been dumped into non-productive real estate speculation instead flows into real investment. The end result of discouraging property speculation is enormously beneficial to the country. Investors can speculate in the stock market or whatever else they like, because people don't live in shares, but the housing market exists to serve a purpose... and that purpose is not to make people money. That's an acceptable side effect so long as the primary purpose is fulfilled, but in NZ and AU it's failing.