7 ms·

Good move. More cities need to adopt this. There is a flood of foreign capital into major western cities that is hurting those economies. And a lot of denial th

Good move. More cities need to adopt this. There is a flood of foreign capital into major western cities that is hurting those economies. And a lot of denial that this is happening.

isostatic 8y ago
Local owns house they bought 20 years ago for $50k Local sells to foreign buyer for $500k Local has lots of money
- preordained 8y ago
  Foreign buyer has to sell for significantly higher to profit..or just squat on it...not so great for local people looking for a house...
- munificent 8y ago
  Local still needs to live somewhere Local buys an equivalent house to the one they sold for $500k + transaction fees, which scale based on the price of the house Local has less money than when they started
  - isostatic 8y ago
    Not when the local is downsizieng from a 4 bed house and garden to a 2 bed apartment for retirement, or they simply die and it's local's kids that sell it. There's a simple solution to avoiding buying in expensive locations though - buy in cheap locations.
    - wepple 8y ago
      So the local sells to a foreign buyer and downsizes. That’s great for them. But their kids are now priced out of the market, and will never own a home but rent from someone who lives 15h flight away.
      - isostatic 8y ago
        Sure. Life sucks doesn't it Fortunately there are many places that someone in NZ can buy a house. https://www.realestate.co.nz/3379275 https://www.realestate.co.nz/3379275 For example is proavly affordable on minimum wage of $32k, certainly with two incomes.
        wepple 8y ago
        I’m not sure the point you’re trying to make here. It’s a town of 1700 people, described by Wikipedia as a “gang town”. If your point is that it’s possible to buy a house in NZ, sure. But quality of life is totally a thing, no? And even then, your example requires a $40k deposit while earning $32k, a salary which doesn’t appear to have a whole lot left over and the end of the week.
    - lostlogin 8y ago
      There aren’t any cheap locations. Fractionally less expensive, but still many multiples of a yearly wage.
      - isostatic 8y ago
        You want somewhere that's affordable for 1x yearly wage? Care to point to some time in history that was possible?
        lostlogin 8y ago
        Having New Zealand cities with average prices at 10x yearly average household income and a NZ average at over 6x is a radical departure from NZ’s historically narrow rich/poor divide. https://www.interest.co.nz/property/house-price-income-multiples https://www.interest.co.nz/property/house-price-income-multi... https://www.google.co.nz/amp/s/amp.theguardian.com/commentisfree/2014/dec/12/how-new-zealands-rich-poor-divide-killed-its-egalitarian-paradise https://www.google.co.nz/amp/s/amp.theguardian.com/commentis...
        isostatic 8y ago
        Christchurch is 4.87 times median income. New Plymouth 5.03. Hell parts of the capital are under 5x. That's quite a normal multiplier in today's low interest and 2 income world (in parts of London the multipler is 38!) What you're saying is that you can't afford to live in nice areas of Auckland. So don't.
    - munificent 8y ago
      Local's kids gotta live somewhere too. My understanding is that skyrocketing housing prices aren't much of a benefit to anyone who doesn't own more than one home. Because you always need to live in at least one place, your economic elasticity only kicks in when the number of homes you buy and sell is greater than one.
- sametmax 8y ago
  Local kids can't buy house and is renting forever at unreasonable price. The world is not just about giving everyone the opportunity to become rich. Just making a decent living for most is a nice objective.
  - isostatic 8y ago
    Why would they pay an unreasonable price? It's clearly reasonable for the person paying the rent.
    - sametmax 8y ago
      You gotta pay back the investment/loan for the new expensive house price, and the rent will match it.
    - shady-lady 8y ago
      > It's clearly reasonable for the person paying the rent How so? They may not have an option to not pay it(as we're seeing happen in cities all over the world) Definition of reasonable[https://www.merriam-webster.com/dictionary/reasonable https://www.merriam-webster.com/dictionary/reasonable] 1 a : being in accordance with reason - a reasonable theory b : not extreme or excessive - reasonable requests c : moderate, fair - a reasonable chance a reasonable price d : inexpensive
      - isostatic 8y ago
        Unless you live in a tiny country like singapore, you have a choice where to live. Economic theory says that if the price is unreasonable, people won't pay it.
        spronkey 8y ago
        You have to live somewhere though, and in NZ cities rents are high enough that they prevent many renters from saving any money at all. So, no, supply and demand theory kinda doesn't stack up when it comes to housing.
tdb7893 8y ago
As much as I like this solution it always seemed to me that if the problem was too many people buying houses the best thing to do would be to build more houses.
- nerfhammer 8y ago
  The reason it's an attractive investment is because such investors expect that cities will never allow this and never allow prices to fall.
- wepple 8y ago
  Sounds like a great idea, but NZ is struggling to build fast enough. NZ has a terrible attitude where everyone must have a backyard, and public transport is horrendous, so moving further out often isn’t much of a solution. The current govt promised to build ambitious numbers of new affordable homes, but I haven’t seen any strategy on how they plan to execute on it.
  - kodablah 8y ago
    > NZ has a terrible attitude where everyone must have a backyard, and public transport is horrendous, so moving further out often isn’t much of a solution. Oddly enough, other places with that attitude are the same ones where moving further out is a solution. Pejoratively dubbed "sprawl", there is less focus on centralized things like limited property sizes and intra-city public transportation. If the land is available, it offers reasonable scale despite the detracting urbanites' cries of culture loss. Maybe it's not the attitude that's terrible, but the inability to support it possibly caused by people not embracing the reality that the attitude exists.
    - amanaplanacanal 8y ago
      Moving farther out has its own set of problems: longer commutes, and much costlier infrastructure. At least in the US, outlying areas frequently don't pay enough in property taxes to maintain the amount of infrastructure necessary to reach those outlying areas, putting strain on municipal budgets. Nobody wants to pay more taxes.
onetimemanytime 8y ago
So if John Doe buys a $10 million home just to have, the NZ economy is not benefiting? Just build more
vanekjar 8y ago
I am afraid your math doesn't add up. Influx of foreign capital can never be bad because it fuels the local economy. It brings new jobs in construction and other related services, transtively bringing more money to government because every human activity is taxed. By banning foreign investors you're basically saying: "nah, we don't need more money, we have enough".
- lawnchair_larry 8y ago
  It doesn't do any of those things.

Good move. More cities need to adopt this. There is a flood of foreign capital into major western cities that is hurting those economies. And a lot of denial that this is happening.

isostatic 8y ago

Local owns house they bought 20 years ago for $50k Local sells to foreign buyer for $500k Local has lots of money

preordained 8y ago
Foreign buyer has to sell for significantly higher to profit..or just squat on it...not so great for local people looking for a house...
munificent 8y ago
Local still needs to live somewhere Local buys an equivalent house to the one they sold for $500k + transaction fees, which scale based on the price of the house Local has less money than when they started
- isostatic 8y ago
  Not when the local is downsizieng from a 4 bed house and garden to a 2 bed apartment for retirement, or they simply die and it's local's kids that sell it. There's a simple solution to avoiding buying in expensive locations though - buy in cheap locations.
  - wepple 8y ago
    So the local sells to a foreign buyer and downsizes. That’s great for them. But their kids are now priced out of the market, and will never own a home but rent from someone who lives 15h flight away.
    - isostatic 8y ago
      Sure. Life sucks doesn't it Fortunately there are many places that someone in NZ can buy a house. https://www.realestate.co.nz/3379275 https://www.realestate.co.nz/3379275 For example is proavly affordable on minimum wage of $32k, certainly with two incomes.
      - wepple 8y ago
        I’m not sure the point you’re trying to make here. It’s a town of 1700 people, described by Wikipedia as a “gang town”. If your point is that it’s possible to buy a house in NZ, sure. But quality of life is totally a thing, no? And even then, your example requires a $40k deposit while earning $32k, a salary which doesn’t appear to have a whole lot left over and the end of the week.
  - lostlogin 8y ago
    There aren’t any cheap locations. Fractionally less expensive, but still many multiples of a yearly wage.
    - isostatic 8y ago
      You want somewhere that's affordable for 1x yearly wage? Care to point to some time in history that was possible?
      - lostlogin 8y ago
        Having New Zealand cities with average prices at 10x yearly average household income and a NZ average at over 6x is a radical departure from NZ’s historically narrow rich/poor divide. https://www.interest.co.nz/property/house-price-income-multiples https://www.interest.co.nz/property/house-price-income-multi... https://www.google.co.nz/amp/s/amp.theguardian.com/commentisfree/2014/dec/12/how-new-zealands-rich-poor-divide-killed-its-egalitarian-paradise https://www.google.co.nz/amp/s/amp.theguardian.com/commentis...
        isostatic 8y ago
        Christchurch is 4.87 times median income. New Plymouth 5.03. Hell parts of the capital are under 5x. That's quite a normal multiplier in today's low interest and 2 income world (in parts of London the multipler is 38!) What you're saying is that you can't afford to live in nice areas of Auckland. So don't.
  - munificent 8y ago
    Local's kids gotta live somewhere too. My understanding is that skyrocketing housing prices aren't much of a benefit to anyone who doesn't own more than one home. Because you always need to live in at least one place, your economic elasticity only kicks in when the number of homes you buy and sell is greater than one.
sametmax 8y ago
Local kids can't buy house and is renting forever at unreasonable price. The world is not just about giving everyone the opportunity to become rich. Just making a decent living for most is a nice objective.
- isostatic 8y ago
  Why would they pay an unreasonable price? It's clearly reasonable for the person paying the rent.
  - sametmax 8y ago
    You gotta pay back the investment/loan for the new expensive house price, and the rent will match it.
  - shady-lady 8y ago
    > It's clearly reasonable for the person paying the rent How so? They may not have an option to not pay it(as we're seeing happen in cities all over the world) Definition of reasonable[https://www.merriam-webster.com/dictionary/reasonable https://www.merriam-webster.com/dictionary/reasonable] 1 a : being in accordance with reason - a reasonable theory b : not extreme or excessive - reasonable requests c : moderate, fair - a reasonable chance a reasonable price d : inexpensive
    - isostatic 8y ago
      Unless you live in a tiny country like singapore, you have a choice where to live. Economic theory says that if the price is unreasonable, people won't pay it.
      - spronkey 8y ago
        You have to live somewhere though, and in NZ cities rents are high enough that they prevent many renters from saving any money at all. So, no, supply and demand theory kinda doesn't stack up when it comes to housing.

tdb7893 8y ago

As much as I like this solution it always seemed to me that if the problem was too many people buying houses the best thing to do would be to build more houses.

nerfhammer 8y ago
The reason it's an attractive investment is because such investors expect that cities will never allow this and never allow prices to fall.
wepple 8y ago
Sounds like a great idea, but NZ is struggling to build fast enough. NZ has a terrible attitude where everyone must have a backyard, and public transport is horrendous, so moving further out often isn’t much of a solution. The current govt promised to build ambitious numbers of new affordable homes, but I haven’t seen any strategy on how they plan to execute on it.
- kodablah 8y ago
  > NZ has a terrible attitude where everyone must have a backyard, and public transport is horrendous, so moving further out often isn’t much of a solution. Oddly enough, other places with that attitude are the same ones where moving further out is a solution. Pejoratively dubbed "sprawl", there is less focus on centralized things like limited property sizes and intra-city public transportation. If the land is available, it offers reasonable scale despite the detracting urbanites' cries of culture loss. Maybe it's not the attitude that's terrible, but the inability to support it possibly caused by people not embracing the reality that the attitude exists.
  - amanaplanacanal 8y ago
    Moving farther out has its own set of problems: longer commutes, and much costlier infrastructure. At least in the US, outlying areas frequently don't pay enough in property taxes to maintain the amount of infrastructure necessary to reach those outlying areas, putting strain on municipal budgets. Nobody wants to pay more taxes.

onetimemanytime 8y ago

So if John Doe buys a $10 million home just to have, the NZ economy is not benefiting? Just build more

vanekjar 8y ago

I am afraid your math doesn't add up. Influx of foreign capital can never be bad because it fuels the local economy. It brings new jobs in construction and other related services, transtively bringing more money to government because every human activity is taxed. By banning foreign investors you're basically saying: "nah, we don't need more money, we have enough".

lawnchair_larry 8y ago
It doesn't do any of those things.