4 ms·

No, it's Kiwis that will ultimately pay the price, as it's Kiwis that are getting screwed by unaffordable housing.

by elyobo 9y ago

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.
  - alexasmyths 9y ago
    It does matter 'if it's a foreigner or not' because that will yield a bunch of distortions.
alexasmyths 9y ago
"No, it's Kiwis that will ultimately pay the price, as it's Kiwis that are getting screwed by unaffordable housing" ? If you take away foreign investment in homes, then housing prices will be affordable. The only way housing is not affordable otherwise is if there is 'bubble like activity' - like the Silicon Valley - and even then, this has a lot to do with foreign money flowing in, just as LP's and investors and not as home owners. Point blank. Toronto and Vancouver have massive foreign investment and have unaffordable homes. Montreal - with similar economic conditions - has a little less immigration, and no foundation for Asian buyers - and guess what? It's super affordable. Everywhere you see a lot of international speculation - you see affordability problems. Ban foreign ownership of property unless it's commercial. There's absolutely no reason to be speculating with our homes. FYI - this creates a serious problem: Toronto and Vancouver are Ponzi schemes - construction is a big part of the economy. If the zillions of homes stopped getting built, it would mean a 'reality based economy' that Canadians can't deal with - because we don't export valuable things and we are addicted to an ever-increasing number of warm bodies.
- elyobo 9y ago
  I think you've misunderstood the context of my comment, as it seems we agree. I'm saying that foreign speculation (and local speculation) are bad for Kiwis and should be acted against, so it seems we're in agreement. My comment should be read in context as "No, it's Kiwis that will ultimately pay the price, as it's Kiwis that are getting screwed by unaffordable housing [caused by unfettered speculation, foreign and local]".

No, it's Kiwis that will ultimately pay the price, as it's Kiwis that are getting screwed by unaffordable housing.

by elyobo 9y ago

No, it's Kiwis that will ultimately pay the price, as it's Kiwis that are getting screwed by unaffordable housing.

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.
- alexasmyths 9y ago
  It does matter 'if it's a foreigner or not' because that will yield a bunch of distortions.

alexasmyths 9y ago

"No, it's Kiwis that will ultimately pay the price, as it's Kiwis that are getting screwed by unaffordable housing" ? If you take away foreign investment in homes, then housing prices will be affordable. The only way housing is not affordable otherwise is if there is 'bubble like activity' - like the Silicon Valley - and even then, this has a lot to do with foreign money flowing in, just as LP's and investors and not as home owners. Point blank. Toronto and Vancouver have massive foreign investment and have unaffordable homes. Montreal - with similar economic conditions - has a little less immigration, and no foundation for Asian buyers - and guess what? It's super affordable. Everywhere you see a lot of international speculation - you see affordability problems. Ban foreign ownership of property unless it's commercial. There's absolutely no reason to be speculating with our homes. FYI - this creates a serious problem: Toronto and Vancouver are Ponzi schemes - construction is a big part of the economy. If the zillions of homes stopped getting built, it would mean a 'reality based economy' that Canadians can't deal with - because we don't export valuable things and we are addicted to an ever-increasing number of warm bodies.

elyobo 9y ago
I think you've misunderstood the context of my comment, as it seems we agree. I'm saying that foreign speculation (and local speculation) are bad for Kiwis and should be acted against, so it seems we're in agreement. My comment should be read in context as "No, it's Kiwis that will ultimately pay the price, as it's Kiwis that are getting screwed by unaffordable housing [caused by unfettered speculation, foreign and local]".