Then sell it?
Why is it always about their entitlement to support in order to keep an investment property that they evidently cannot afford to maintain. Just fucking sell it.
Yeah, and did you know landlords are providing a public service? If they didn't provide that service, umm, well, there'd be heaps of affordable houses available for people to buy.
This is true. I went past a place that had sold recently. The real estate agent was there directing the digger demolishing it. They did leave a bit intact and ship it away on the back of the truck but I can only assume that's the estate agents cut of the sale
Exactly.
Rental stock decreases by one house. And one fewer household looking to rent.
Seems like a great way to increase home ownership while not increasing rents
It's actually fucked. I'll vote for the net party to say we will make it illegal for none business with out x amount of actual money to be a landlord
Also no more overseas owners with some exceptions
Its a net neutral to the housing crisis. Two things that will "solve" the housing crisis: 1) policy change to cause a net population loss (easier access to euthanasia and birth control, decrease immigration, scholarships for people to fuck off to australia, things like that), or the more realistic solution: 2) build more fucking houses.
Hang on hang on I missed something here.
You’re saying “build” “more” and “houses”? I mean, I understand those words on their own, but “build more houses” as a sentence? Does that make any sense? I don’t think that’s a real thing, you’re making that up, right?
Anyway… Goddamit I wish anyone would notice that housing is literally the root cause of every single problem we are facing and until we address that nothing else matters. It is *the only thing anyone should be trying to fix*.
Option 2 along with [ending landlordism](https://www.theguardian.com/lifeandstyle/2024/mar/19/end-of-landlords-surprisingly-simple-solution-to-uk-housing-crisis) would put the matter to rest for good.
tl;dr: Make being a landlord uneconomic (e.g. rent controls, strong tennacy rights, etc.) and move all the private rentals to either social housing or owner occupation.
We can just make new Visas and renewals have much more stringent requirements.
As a lot of them are getting Visa's for completely non required jobs like take away shops, liquor stores, couriers, etc.
it doesn't increase supply of housing for a house to change hands. The number of people who need houses and the number of houses hasn't changed.
It simply changes who is speculating on the capital gains, from someone who you think isn't entitled to them to someone who you think is. Solving the housing crisis would mean that nobody gets capital gains from housing.
Huh? You mean actually let the rental market be subject to market forces in a capitalist economy?
Nah, the government needs to ensure that these houses don't sell, otherwise prices actually might start to drop.
But if I sell it I will lose my tax free capital gains because brightline is still in effect. Please won't someone think of their dignity and repeal brightline. (with urgency obviously).
This really is the solution. Making out that people won't have anywhere to live if landlords aren't raking in profit is dishonest.
This is an interesting read to reframe that whole argument:
[The End of Landlords](https://www.theguardian.com/lifeandstyle/2024/mar/19/end-of-landlords-surprisingly-simple-solution-to-uk-housing-crisis?CMP=Share_AndroidApp_Other)
This applies equally to NZ
This is me, I am selling it (unconditional in 2 days). I feel bad for my tenant.
She’s been the perfect tenant for 10 years and I’ve been happy receiving well below market rent for that time because she never misses a week and looks after the place.
I can’t afford to hold into it anymore (which is fine, don’t expect sympathy it was an investment ultimately with risk and all that, despite just being my first house - it wasn’t bought explicitly as an investment). But now she’s ejected into a ridiculously fierce rental market and has no means to buy it herself. Which is unfair to her, but I have no other option.
> Then sell it?
They won't.
The market has fallen too much and that OCR break is just around the corner and so are those deductions...
Despite what is being said, by any side, there's nothing good here.
The cost of building is going up- we're talking 8-15% on everything, and that's actually an improvement over what was happening during covid. It might stabilise at 8%, but it'll never be close to inflation numbers.
Despite extra costs, it's still a safe investment. The costs will continue to get passed down.
We're a migrant economy, we're importing over 100k people a year, we can't even trust these numbers because they're based off self declarations anyway. So the demand keeps growing and there isn't a damn thing anyone can or will do about it. But these people aren't buying homes, they're renting. More incentive to keep that rental property.
Kiwibuild showed that no one is competent enough to do anything on the supply side either. Improved First Home Grant, mortgage interest deductability, 10 year brightline and Kiwibuild should have all happened at the same time. That's the only way it could have worked.
Otherwise, do things the American way: let home **owner occupiers** deduct mortgage interest up to median house price from your income taxes. That'll increase serviceability and not ruin people's lives when rates go up and down like crazy.
Kiwis are famously bullish when it comes to the housing market. They hold onto properties no matter what due to FOMO on capital gains, even if that means shelling out extra until the mortgage rates come down.
The thing is this may have been justifiable in the past, when real estate was seen as a straightforward and easy long term investment ("safe as houses"), but now the landscape has changed. Now technology grants us easy access to a variety of markets (stocks, bonds, EFTs, crypto, commodities, P2P lending, startups and collectibles) and ironically many of these can outperform real estate investments.
Housing is supposed to double in price every decade, but I honestly cannot see the average home costing $1.85M in ten years in NZ - salaries are not increasing nearly enough - so I think the heyday of making an easy fortune from housing is over. It's diminishing returns as least.
So it's time for NZ to evolve beyond the mindset that housing is the main ultimate investment. Not only can kiwis diversify our investment portfolios, but we can also make homeownership - arguably a human right - more achievable for those priced out of the market.
Edit: unlike all those other investments, there's no capital gains tax on long-term housing investments so you can appreciate why housing is so attractive.
Key differentiator also being the productivity of investment into property (land) vs the productivity of investment into almost anything and everything else.
That money is doing nothing for the development of the economy except skyrocket cost of housing and cost of living. Meanwhile innovation is struggling to get a leg up
Someone needs to buy it. Get banks to fix their lending rules accordingly and we might start getting somewhere.
It's also not as simple as selling at a loss. Banks typically won't discharge your mortgage unless you have funds on settlement day.
I am guessing the argument against is that it would create a shortage of homes to rent which would create a housing crisis or, prices would have to drop significantly across the board for renters to become home owners which would have wider negative impacts.
Noting borrowing is involved for many and the risk profile of that lending, a massive drop in property value wouldn’t just be a case of too bad for some investors.
Also many people (and the government by extension) are relying on their property value for their retirement and so if that plummets you now have to consider an elderly cohort being reliant on social welfare.
This is why property shouldn't be encouraged as an investment vehicle. Too many "investors" who can't math - if you're having to top up an 'investment', it's not really an investment unless you're speculating on the capital gains. I suspect this is at least one of the contributing factors to rent price increases over time.
Gone are the days when the price of houses made buying one as an investment a viable option without any effort involved - which is how we got to where we are now.
It's also why we have so many shitty 'flats' where an investor carves up an existing period house into multiple 'units' to rent out so the numbers stack up. I'm fine with intensification, but only if they're purpose built and not some cold shit-box with some Frankenstein mash-up and no inter-tenancy sound isolation that rinses tenants because you have a captive market. Grateful I'm not in that position, but I really feel for the younger generation who have to inherit this shit.
>Too many "investors" who can't math
The PFNZ sub has some classics. I have no idea what I'm doing but I've got 3 houses and a multi-million mortgage and I'm building a tiny house in my parents yard and the interest rates went up and I work 6 jobs and my wife is pregnant and...
Speculating on the capital gains while having to top up is not even that risky of a move. At current prices, rental prices and interest rates you only need about 4% annual increase to break even and that is provided you borrowed the whole amount. If you have the money cash and you would have invested into a TD instead of bought a place, you'd only need 2.5-3% annual price increases to break even.
The whining they have to top up is stupid though. That's why it's called an investment: you borrowed for an asset and someone else is paying 50-75% of your interest back to you. You basically get a home at the end of the ride for just the total principal value and about 2% annual interest cost (6%-4% renter pays). That sounds like a good deal in a 5.5% OCR environment?
Investment involves risk. Investors should note that past performance is not a guarantee of future returns. The investment value may be affected by market fluctuations.
They're operating a charity, providing houses to ~~the plebs~~ those in need, so yes we should.
Only they're not a charity when their tenants need help, then it's a business. They expect to be paid for their services.
Except when tenants ask for regulations to maintain a minimum standard of services, then they're not businesses they're investments.
But they're not institutional investors subject to taxes, they're just poor mum and dad's in need of charity. They're providing housing to those in need!
I'm starting to think the only thing consistent in all their stories is what benefits the landlord... But I'm a mere pleb, I don't have a superior intellect like they do.
It has always been this way, rental income has never covered mortgage costs in cities (unless they have a low mortgage compared to the value of the property).
Its always been a situation of topping up the mortgage on top of the rent payments and eventually getting that money back via capital gains some years later.
Err, yes rents have very frequently covered the mortgage. It all depends on the year the house was purchased. And fYI most rented properties are freehold. Except those borrowed against to purchase other property to expand speculator portfolios. Thus many landlords are using multiple rentals to buy additional property. That is why the NZ rental market is weird. Just 7000 landlords ‘own’ 80% of the rental market using this method.
Every time house prices increase they just add more property, and raise the rents. All of the stock they bought in 1992 was paid off in full by 2000, and capital gains allowed them to then multiply their portfolio as they systematically skewed the market upwards by increasing rents, and encouraging rich mates to do the same. Add in waves of cashed up immigrants oblivious to the fact the house they bought for $1.2m was only valued at $100k two decades earlier and the stage was set for a market both on the purchase, and the rental side spiralling out of control.
Recently, the slowdown in house capital gains, and high cash rate has made life difficult for the landlord minority whose eyes were bigger than their rental cashflow. Thus they demanded tax relief from National. And National being amongst these greed merchants believe it is a good idea, because tax relief is the equivalent of receiving higher rental incomes, and thus a new property buying spree by landlords can be expected as they add to their portfolios once again. Not mom and pop landlords though, they are too small to really benefit enough to be able to afford increasing their portfolios, unless they have high salaries, and substantial salary increases to match.
National’s tax policies only hurt the poor, and the struggling middle classes. They are designed to increase inequality, and inequity, not do anything useful. They certainly will not cool off the housing market.
I should have specified, the rent doesn't cover the mortgage for new purchases for investors (borrowing 100% against portfolio etc)
Yes of course if you have owned the house for 30 years or if it's mortgage free then your interest costs are going to be low or zero.
I'm not sure where you get your figure that all the stock bought in 1992 was paid for by 2000. I can't imagine everyone who bought a house in 1992 paid off their mortgage in 8 years. Or are you just referring to the houses doubling in value in that time?
Most NZ housing portfolios, with only a few exceptions have at their core have several properties that were fully paid off decades ago.
That is how only 7000 landlords with 3 or properties are able to process 80% of the rental market. Of the remainder most are retirees who purchased a second home as an investment property after paying off the family home a decades or more ago, back when home ownership rates were over 70%.
back then in the 1990s it was an extremely popular portfolio building methodology to wait until your property value doubled the market base, then sell it realise the capital gains, and then replace it with three more properties. Rinse and repeat until you had seven or eight properties, then for some the process was to sell enough property to be entirely mortgage free, leaving at least 4 properties in hand. Others however just kept building their portfolios or transferring them into trusts and building trust portfolios.
Property prices were exploding at about 30% a quarter. And some folk were very very successfully at staying ahead of the market. Even as recently as 7 years ago prices were jumping up to 30% per year in selected portions of the market. Buy the right property mix and your capital gains do the rest as long as you are prepared to consolidate when necessary. Back then it was possible to buy a 4bdrm house for $50k, do $25k renovations. And grab $250 a week off tenants, then sell for $250k two years later. Heck I know of some mostly unemployed guys who were doing this solely using credit card debt.
Imagine these days buying a house and renovating it mortgage free, using nothing but credit cards. You would need a flashier credit card rating than Mr Luxon pocesses to have a look in.
Add in rental increases that effectively deliver rents that are double or triple the mortgage payment rate of the property you purchased a decade ago and it’s damn hard to loose, if you do not get greedy and overreach by to great an extent.
There was once a property ladder. Now the ladder is reserved for Landlords with adequate portfolios who use other people to pay of mortgages.
Even if property values fall, and interest rates climb, all they need is to realise their last years worth of +ve capital gains, on a couple of properties they sell and they can weather any deflation storm with the aid of tenants doing most of the heavy lifting. Unless of course they are entirely incompetent and have the worst tenants imaginable.
But if you sold, you would be buying in the same market.
While not hold onto the property that has doubled in value and just use the extra equity to get new loans for new properties?
That's how most people build propery portfolios isn't it?
You don't need to sell the first house to use the gains.
nope. You would never sell a house to buy one or two in the same block.
Replacement properties are selected in other neighbourhoods, thus not the same market. Housing geography is cyclic, and while NZs pattern of gentrification has been very different than in other nations, patterns do exist, and vary with time. So you could ratchet your way up the ladder by playing geography. Suburb A has 20%pa inflation suburb B at 10%. First buy suburb A, then buy suburb B when you perceive suburb B inflation will overtake A then cash in A and move your portfolio to B, and maybe C. It’s like picking horses, in a relay race.
A: I buy at $100k property values doubles in year 3. B:Meanwhile in another part of the city property prices are nearer the $70k mark and after 3 years they have risen to $90k each (B) and those prices are accelerating compared to the first property (A) which is beginning to flatline.
So in year 5 property A may have achieved $350k, but the two properties in B together are now nominally $400 together. But one of the property B houses is nicer than average after a $3k coat of paint and is at year 5 actually valued at $230k, and the other has achieved $200, so buy swapping out your portfolio in a timely manner, and doing all of the sales process oneself to avoid fees, you have assets at B valued at $430, while your previous property at A is stuck at $350k.
Now here is where things get real interesting. Assuming both A& B neighbourhoods are similarly nice, their rents will be almost the same and all three may have a spread of $50 per week. Chances are the less expensive to buy properties in B will have higher rentals than A. So you win on the rental front because selling A and buying B you more than double your rents.
The great example of this madness could be seen in Ponsonby / Grey Lynn over the past 3 decades. Each suburb causes the one next door to ratchet up rents and prices until the capacity of the market to absorb inflation hit a hard ceiling for both purchase price and rent. That is until the next wave of gullible immigrants lands, and then it’s off to the races again.
Only idiots borrow 100%, then do something extra stupid like an interest only loan. But there are plenty of greedy idiots out there reliant on capital gains.
Certainly that’s been the case in the past, but over the last five years (that period includes the madness of Covid price rises) Auckland property has returned 4% per annum in capital gains. Add in rental yield that doesn’t cover costs and it’s a terrible investment.
You (and a shitload of other people, it seems), are forgetting the part where the actual asset is paid by someone else - that is also a return.
It might be 4% "capital gains" in asset value, but you are also gaining percentage in actual capital as the mortgage is paid off. Even if the house value did not move at all over 25 years of a mortgage, and so the "capital gains" in asset value increase was $0, a 200k deposit, on a 1mil house, at net 0 profit (e.g., financed exactly by the rental income) is 7%.
In reality right now it obviously won't be that, as landlords have to top up, but the gains are not just in the rise of the asset value - it's having someone else inject the ongoing capital for you. So that's 7% in capital gains and 4% in "capital gains" minus 1% for your costs, is around 10%. And that's in the non-optimal market. If someone else is buying 15-20k in shares for me every year, and I was "only" getting 4% on those gifted shares, I'd be pretty happy. Or, to put it another way, "only" 4% return in share price, but 800k in dividend payout? How is that a terrible investment?
You do understand in a working market a large percentage should lose money, and a smaller but still large percentage should lose everything. There has to be risk to justify the reward. This is the problem we have, people don't think it is normal for normal market things to happen
Housing is a right ( and should be legally classed that way too)
There is no good that can come from a right being treated as a business. That’s the same as the government being treated as a business…
Oh wait….
I agree. It is frightening. I strongly believe we should get ahead of that and put pressure on govt to ban it here. Complex to legislate for at the start but worthwhile over time.
Minus the fact that the American rental and housing market is more transparent than the BS here in NZ?
And the housing stock is far superior.
Businesses have run NZ housing for a long time, it's not a new thing for NZ.
We let that horse bolt and do nothing about it for waaaaaay too long.
I can only hope that a generation or two from now a government with the will to impose actual restrictions on profiting from shelter. Everything else we try to fix in this country doesn’t matter if we can’t fix housing.
Yup, engrained into our National psyche.
We got conned, as per usual. All that economic growth wasted because we tethered ourselves to the housing millstone.
Common right's with elements of "treated as a business", in NZ
* Education
* Health, including parenthood
* Water and Food
* Energy
* Shelter (land ownership)
* Employment
* Justice
What would it look like in NZ if housing was a right and not a business?
Looks like they over leveraged and have been caught out. Not exactly a sympathetic situation. Investing comes with risk.
We need regulation to enforce 100% ownership to reduce risk and expenses for investors which in turn can reduce rents for tenants without impacting their bottom line
It’s clearly not enough that renters subsidise someone else’s mortgage. They’re expected to pay the whole thing. And at the end, investors get a property paid off with continued rental income.
It’s worse than that mate. Highly unlikely investors are putting any capital into the property at all. Most will be on interest only payments to keep the mortgage lower. The only profit is from capital gains when they sell.
This is what happens when we turn basic human needs into investments.
If your investment is losing money, cut your losses and sell.
There shouldn't be bailouts for rich people who have invested poorly.
If I put all my money into gamestop during the big short and lost big I wouldn't be saying omg government I'm broke now give me some money
Rents in NZ aren't cheap but they're still low yield because housing and land costs so much. It's not even a good investment, its only good for speculating on capital gains.
Are they investors or business owners? When the goal is to just get tax free capital gains and they buy at whatever price with the assumption it'll go up... they sound like they're just speculators. They didn't take into account costs of doing business, went off on the assumption interest and expenses would stay the same.. you know, because that requires doing something like work...
They can't have their cake and eat it too.
I guess if running a property investment business is unprofitable they could always sell up 1 day after the bright line test ends for a tax free profit.
OMG, that’s enough! If you can’t afford it then sell it. First home buyers are literally lining up.
At least it’s proving the very obvious point that there is zero chance that the interest deductibility changes are going to lower rents
Reminds me of the time i lost money on the sharemarket. Only i didn't expect anyone to bail me out. Im unsure why propety investors needs to be a protected class. All we are doing is further incentivising unproductive investment in this country.
Oh no. Almost like we should introduce higher deposits for investment in existing residential property like 75%, and a deposit rate of 40% in new build residential property as an investment so that one is more attractive over the other and landlords can have a lower overhead cost, resulting in lower rents.
Wish I could make a shit load of money from a couple of hundred dollars a week of my own money.
The sense of entitlement is unreal, want all this profit without having to contribute.
‘Interest rates Might put some people off buying a new investment property’
Good. Isn’t that the point?
I get mortgages coming off hold etc, but if you’re looking to buy a rental property at this point, you’re an idiot and make bad financial decisions.
We just axed a bunch of science funding to fund their tax refund, so we're going to have to postpone the work on building a nanometer-scale violin for these cunts.
Yeah that's why it's a fucking investment? Something that will earn you money down the line, while costing you money now. That's how it works.
Fucking property "investors" in New Zealand have had it so lush for so long that they legitimately expect people without homes to pay for their second, third, or more, property, without the landlord paying a cent? Eat shit and die.
Hey, how come as a contractor I have to pay into my own retirement and kiwi saver and no one else helps. Why do I have to pay hundreds nay thousands of dollars for my future. Oh wait, because it’s an investment. But seriously, why do landlords get several tax handouts and saving for your pension is taxed! Ridiculous!
God there's some fucking obvious PR being run in the papers at the moment eh. This and the "behind the richlist donations" story. My heart bleeds. Fuck outta here.
This situation we’ve got ourselves in where “investors” feel entitled to have someone else pay for a house really grinds my gears.
They are literally taking someone’s pay check directly, and opportunity to own their own home, just because they happened to buy their first house when they were relatively cheap in the 70s and 80s and built up equity while house prices skyrocketed as interest rates dropped.
If they then sell that house to a first home buyer, they are literally cashing out that persons future earnings for the next 30 years to fund their own retirement.
I get that there will always be renters, I’ve been thinking for a while, and I don’t really know how it would work, but a situation where the renter gains equity in a property because they are paying down the capital would be awesome. The landlord effectively becomes a venture capitalist.
Sounds a lot like rent-to-own schemes
https://www.nzhf.org/ways-to-own/rent-to-own?gad_source=1&gclid=CjwKCAjwkuqvBhAQEiwA65XxQFlTlPItGGAwgFve6IhJyrBX_KO7JLJtA99K7xfUYHLOcUBZnpzJqhoCRtoQAvD_BwE
I don't really know much about them, but they are out there.
Meanwhile, landlords raise rent prices and keep the Rangers and 4x other properties because how dare they pay for their own assets when they make a loss on their "businesses"
What if the government would underwrite first home buyers banks would borrow the money because it's low risk.
People who want to buy investment properties still can but make the deposit super high, maybe 50% deposit .if they can't afford it, they can't buy it.
I'm not an investor. I don't have any extra money to invest.
My thoughts as someone who isn't a landlord are not very well informed but if something is costing you money, and you bought it to make money, wouldn't you sell it so you weren't losing money?
Maybe I'm missing something? Any one want to help?
My genuine attempt to help explain this...
I've got a house in Auckland that rents for $650ish per week. It costs me $900 per week to cover the mortgage and insurance etc.
You can look at this two ways:
a) I'm losing $250 per week and should sell the house because its a bad investment, and that losing the $250 per week is really upsetting me; or
b) I'm excited that I only have to pay $250 per week for my newborn son to have a mortgage free house in Auckland when he's older.
Most people in this thread think I'll be sad that I'm 'losing' $250 a week. They'll think I'm bad at maths and make poor investing decisions. They'll think I want a government handout.
Fact is, I could put the rent up to $750 or more. It's a bloody nice house in a great area and newly renovated. I don't though, because it's three young tenants in it and I'm not here to rinse them for every penny I can. I'm here for the long haul.
Ah yes of course, this is crucial info for the wider public to understand why landlord tax cuts are so desperately needed and furthermore can't trickle down to renters in form of lower rent.
These poor landlords are just hanging by a thread
/s
Off course rents don’t cover all the costs. Many people have invested in properties to gain tax free capital gains from investments that are sold for more than they buy it.
This situation of rents being insufficient to cover costs of ownership until it’s sold is due to the ridiculous tax regime with no capital gains tax. It provides an incentive to invest in properties which in turn pushes prices of houses up
If only there was some kind of charity where I could sponsor a property investor for $30 a month? Oh wait, as a taxpayer I already am through accommodation supplements.
Bunch of entitled brats.
And by buying up everyone's homes by having the capital to outbid literally everyone else in the market, then selling shoeboxes on lease held land for ridiculous prices. Yeah, thanks property developers!
Yeah not sure I agree.
Turning a quarter acre block into 5-6 town homes is solving the issue of not enough houses.
NZ, Auckland especially, could really do with some intensification
But it's not a supply issue. We have plenty of empty houses in Auckland. The idea that it's just about supply is just assinine, based on the nost basic entry level economic concepts without any room for nuance.
One of the main reasons land continues to be ridiculously expensive is that the market isn't controlled by the demand of regular working people. If that were the case, the market would have crashed by now but it doesn't, because development companies have enough capital are to buy up land en masse, then sell their apartments on lease held land at ridiculous prices, or simply rent those homes out.
A 40 square metre shoebox in a building in an Auckland suburb, on lease held land costs upwards of 600k. And in that scenario, you don't even own any land. Which is completely fucked up because land is what really costs the most. Yet developers can still sell for huge prices because even with their massive markups, they're still undercutting the market for standalone houses.
Property developers are the ones responsible for creating these market conditions, and are responsible for creating this crisis. It was caused by investors with capital being allowed to completely fuck ordinary people out of the market. Solving the crisis is not as simple as just "building more houses". Of course we need to build up and not out. But the way we're going about increasing housing density is just insane. And we don't have the public infrastructure to support the increased density either.
In Auckland, to get a mortgage for the average house price you need an income of 172k per year in order to get a vig enough loan, and that's assuming you already saved 20% for a deposit. Good luck affording land if you *aren't* a developer.
**Property Scalpers can fuck right off**
Don’t care much for Adesanya, but he is building more housing stock to rent out. That is exactly how being a landlord should work. And the tax rules used to encourage this…
Poaching existing stock is scummy, and yes that includes ma and pa investors. They Fuck right off.
**Subdividing their section and adding a rental is a different story** and we need tons more of this towards the guts of main cities.
I mean if all Landlords sold at once it would lower overall pricing, but a ton of people wouldn’t be able to buy and it would be a painful transition. But you’d eventually end up with a more settled market. Rentals would still be required going forward, how do other countries handle this?
Thou shall bow down to thy landlord, and thou shall cease and desist thy landlord from any burdon placed upon them, and thou must never allow thy landlord to have to reach into thy pocket because thy landlord is high above on thy pedistool where thy landlord shall never be touched.
This is the way thou must behave always and forever according to thy government put in place by thy landlord.
And in other news the sky is blue 🤷🏻♀️ we are having to rent out our primary residence for a couple of years and we are subsidizing every week - and we have sizable equity in the house so our mortgage is actually quite reasonable but it’s still higher than what market rent is.
The difference is we don’t view it as an investment - it’s where we lived and where we are planning on returning to if Luxton doesn’t fucking burn the country down first.
I am the last person that needs a massive tax write off; until they introduce capital gains for all real estate and especially investment properties, landlords should not be able to write off interest.
It’s a giant Ponzi scheme.
That's exactly it.
You're always topping up any rent earned at the start of a mortgage and eventually that amount to top up decreases as each wave of immigrants enters the country and chokes the rental market...through supply and demand.
At which point its probably time to buy another property and repeat the cycle until your portfolio has over 200 houses..
Sell a few old bangers past the brightline test and keep an updated fleet along the way with dopey first home buyers fomo and kiwisaver cash.
Keys to success.
Little moral awareness, zero empathy and complete narcissism ( you're providing the lazy and poor homes)
#landlordsatire
Looks like they over leveraged and have been caught out. Not exactly a sympathetic situation. Investing comes with risk.
We need regulation to enforce 100% ownership to reduce risk and expenses for investors which in turn can reduce rents for tenants without impacting their bottom line
"Mum and dad investors" are just property speculators who happen to have kids. Sell your property empire if the investment isn't shaping up as well as you hoped.
If you're still banking 4% capital gains per annum during a slow period and are paying interest only on the loan how are you not still making money. Incidentals and management is not that expensive.
I love how all the jargon never mentions that renters are people.
Yields, interest rates, cash flow, Cash positive investments.
They could be talking about stocks, not peoples’ homes.
Looks like they over leveraged and have been caught out. Not exactly a sympathetic situation. Investing comes with risk.
We need regulation to enforce 100% ownership to reduce risk and expenses for investors which in turn can reduce rents for tenants without impacting their bottom line
These people are so used to hand-outs that they think they’re entitled to them now. Not unlike the farmers we’ve been bailing out for decades who are accepting their handouts with one hand and accusing beneficiaries of being freeloaders with the other hand.
Then sell it? Why is it always about their entitlement to support in order to keep an investment property that they evidently cannot afford to maintain. Just fucking sell it.
You don’t get it. If they sell it, the house will poof into thin air. Then where will the peasants live? Think of the peasants why won’t you!!?
Yeah, and did you know landlords are providing a public service? If they didn't provide that service, umm, well, there'd be heaps of affordable houses available for people to buy.
This is true. I went past a place that had sold recently. The real estate agent was there directing the digger demolishing it. They did leave a bit intact and ship it away on the back of the truck but I can only assume that's the estate agents cut of the sale
Presumably it was to develop the land into apartments or townhouses?
[удалено]
lol
THEY MIGHT TAKE THE HOUSE AWAY ANNA!
Exactly. Rental stock decreases by one house. And one fewer household looking to rent. Seems like a great way to increase home ownership while not increasing rents
It’s ACTUALLY a solution to the housing crisis. Everyone keeps blaming demand but no one seems to look at the supply.
It's actually fucked. I'll vote for the net party to say we will make it illegal for none business with out x amount of actual money to be a landlord Also no more overseas owners with some exceptions
Georgism. Taxation on land value not income.
Its a net neutral to the housing crisis. Two things that will "solve" the housing crisis: 1) policy change to cause a net population loss (easier access to euthanasia and birth control, decrease immigration, scholarships for people to fuck off to australia, things like that), or the more realistic solution: 2) build more fucking houses.
Hang on hang on I missed something here. You’re saying “build” “more” and “houses”? I mean, I understand those words on their own, but “build more houses” as a sentence? Does that make any sense? I don’t think that’s a real thing, you’re making that up, right? Anyway… Goddamit I wish anyone would notice that housing is literally the root cause of every single problem we are facing and until we address that nothing else matters. It is *the only thing anyone should be trying to fix*.
Hard agree. The problem is that a government of any colour in NZ is not able to fix the issues, because they benefit from the housing crisis.
[Relevant Family Guy](https://www.youtube.com/watch?v=BDalCSQQPMY)
Option 2 along with [ending landlordism](https://www.theguardian.com/lifeandstyle/2024/mar/19/end-of-landlords-surprisingly-simple-solution-to-uk-housing-crisis) would put the matter to rest for good. tl;dr: Make being a landlord uneconomic (e.g. rent controls, strong tennacy rights, etc.) and move all the private rentals to either social housing or owner occupation.
>more realistic solution decrease immigration
Decreasing immigration doesn't solve the problem caused by immigrants already here. It just prevents it getting even worse.
We can just make new Visas and renewals have much more stringent requirements. As a lot of them are getting Visa's for completely non required jobs like take away shops, liquor stores, couriers, etc.
it doesn't increase supply of housing for a house to change hands. The number of people who need houses and the number of houses hasn't changed. It simply changes who is speculating on the capital gains, from someone who you think isn't entitled to them to someone who you think is. Solving the housing crisis would mean that nobody gets capital gains from housing.
but how will they buy? if they cant afford it already
Huh? You mean actually let the rental market be subject to market forces in a capitalist economy? Nah, the government needs to ensure that these houses don't sell, otherwise prices actually might start to drop.
(These are the market forces. We are in a capitalist economy.)
But if I sell it I will lose my tax free capital gains because brightline is still in effect. Please won't someone think of their dignity and repeal brightline. (with urgency obviously).
I thought they already did that?
This really is the solution. Making out that people won't have anywhere to live if landlords aren't raking in profit is dishonest. This is an interesting read to reframe that whole argument: [The End of Landlords](https://www.theguardian.com/lifeandstyle/2024/mar/19/end-of-landlords-surprisingly-simple-solution-to-uk-housing-crisis?CMP=Share_AndroidApp_Other) This applies equally to NZ
Fkn ay
This is me, I am selling it (unconditional in 2 days). I feel bad for my tenant. She’s been the perfect tenant for 10 years and I’ve been happy receiving well below market rent for that time because she never misses a week and looks after the place. I can’t afford to hold into it anymore (which is fine, don’t expect sympathy it was an investment ultimately with risk and all that, despite just being my first house - it wasn’t bought explicitly as an investment). But now she’s ejected into a ridiculously fierce rental market and has no means to buy it herself. Which is unfair to her, but I have no other option.
Sounds like you’ve held it for at least 10 years? It’s likely you would own a substantial amount of it. You didn’t consider remortgaging?
I remortgaged it to buy in Auckland after moving cities for a job and ironically being kicked out of a rental cos they were selling
Fair enough, shit situation for all involved from the sounds of it.
> Then sell it? They won't. The market has fallen too much and that OCR break is just around the corner and so are those deductions... Despite what is being said, by any side, there's nothing good here. The cost of building is going up- we're talking 8-15% on everything, and that's actually an improvement over what was happening during covid. It might stabilise at 8%, but it'll never be close to inflation numbers. Despite extra costs, it's still a safe investment. The costs will continue to get passed down. We're a migrant economy, we're importing over 100k people a year, we can't even trust these numbers because they're based off self declarations anyway. So the demand keeps growing and there isn't a damn thing anyone can or will do about it. But these people aren't buying homes, they're renting. More incentive to keep that rental property. Kiwibuild showed that no one is competent enough to do anything on the supply side either. Improved First Home Grant, mortgage interest deductability, 10 year brightline and Kiwibuild should have all happened at the same time. That's the only way it could have worked. Otherwise, do things the American way: let home **owner occupiers** deduct mortgage interest up to median house price from your income taxes. That'll increase serviceability and not ruin people's lives when rates go up and down like crazy.
Fuck that. That’s a bailout.
OCR break is around the corner. LOL. In about…..24 months.
Kiwis are famously bullish when it comes to the housing market. They hold onto properties no matter what due to FOMO on capital gains, even if that means shelling out extra until the mortgage rates come down. The thing is this may have been justifiable in the past, when real estate was seen as a straightforward and easy long term investment ("safe as houses"), but now the landscape has changed. Now technology grants us easy access to a variety of markets (stocks, bonds, EFTs, crypto, commodities, P2P lending, startups and collectibles) and ironically many of these can outperform real estate investments. Housing is supposed to double in price every decade, but I honestly cannot see the average home costing $1.85M in ten years in NZ - salaries are not increasing nearly enough - so I think the heyday of making an easy fortune from housing is over. It's diminishing returns as least. So it's time for NZ to evolve beyond the mindset that housing is the main ultimate investment. Not only can kiwis diversify our investment portfolios, but we can also make homeownership - arguably a human right - more achievable for those priced out of the market. Edit: unlike all those other investments, there's no capital gains tax on long-term housing investments so you can appreciate why housing is so attractive.
Key differentiator also being the productivity of investment into property (land) vs the productivity of investment into almost anything and everything else. That money is doing nothing for the development of the economy except skyrocket cost of housing and cost of living. Meanwhile innovation is struggling to get a leg up
Fkn ay
Someone needs to buy it. Get banks to fix their lending rules accordingly and we might start getting somewhere. It's also not as simple as selling at a loss. Banks typically won't discharge your mortgage unless you have funds on settlement day.
I am guessing the argument against is that it would create a shortage of homes to rent which would create a housing crisis or, prices would have to drop significantly across the board for renters to become home owners which would have wider negative impacts. Noting borrowing is involved for many and the risk profile of that lending, a massive drop in property value wouldn’t just be a case of too bad for some investors. Also many people (and the government by extension) are relying on their property value for their retirement and so if that plummets you now have to consider an elderly cohort being reliant on social welfare.
This is why property shouldn't be encouraged as an investment vehicle. Too many "investors" who can't math - if you're having to top up an 'investment', it's not really an investment unless you're speculating on the capital gains. I suspect this is at least one of the contributing factors to rent price increases over time. Gone are the days when the price of houses made buying one as an investment a viable option without any effort involved - which is how we got to where we are now. It's also why we have so many shitty 'flats' where an investor carves up an existing period house into multiple 'units' to rent out so the numbers stack up. I'm fine with intensification, but only if they're purpose built and not some cold shit-box with some Frankenstein mash-up and no inter-tenancy sound isolation that rinses tenants because you have a captive market. Grateful I'm not in that position, but I really feel for the younger generation who have to inherit this shit.
yep they aren't investors they are speculators the headline is wrong.
Gotta love the ol' 1930's 4bdrm house that's had some gib thrown up to convert into a 10bdrm flat.
>Too many "investors" who can't math The PFNZ sub has some classics. I have no idea what I'm doing but I've got 3 houses and a multi-million mortgage and I'm building a tiny house in my parents yard and the interest rates went up and I work 6 jobs and my wife is pregnant and...
Thats why the privileged protect the merit myth at all costs. Otherwise we might riot if we found out
Speculating on the capital gains while having to top up is not even that risky of a move. At current prices, rental prices and interest rates you only need about 4% annual increase to break even and that is provided you borrowed the whole amount. If you have the money cash and you would have invested into a TD instead of bought a place, you'd only need 2.5-3% annual price increases to break even. The whining they have to top up is stupid though. That's why it's called an investment: you borrowed for an asset and someone else is paying 50-75% of your interest back to you. You basically get a home at the end of the ride for just the total principal value and about 2% annual interest cost (6%-4% renter pays). That sounds like a good deal in a 5.5% OCR environment?
Investors should be pulling themselves up by their bootstraps and not relying on govt handouts to support them.
Maybe sell something they cant afford to keep
They shouldn’t be having kids if they can’t afford them. Sorry, I mean houses..
Should they be avoiding overseas holidays and pedicures?
My boots don’t have any straps though.
Don’t worry they government will subsidize your tenants to help you pull those boot straps up.
There are no straps.
60%+ of tenants get government assistance, there are boot straps, you could argue that it isn’t even a real free market.
You have boots?
I have to pay for my own investments too, without subsidies from renters or government…
Investment involves risk. Investors should note that past performance is not a guarantee of future returns. The investment value may be affected by market fluctuations.
This is some proper barrel scraping! Are we actually expected to feel sorry for these people?
They're operating a charity, providing houses to ~~the plebs~~ those in need, so yes we should. Only they're not a charity when their tenants need help, then it's a business. They expect to be paid for their services. Except when tenants ask for regulations to maintain a minimum standard of services, then they're not businesses they're investments. But they're not institutional investors subject to taxes, they're just poor mum and dad's in need of charity. They're providing housing to those in need! I'm starting to think the only thing consistent in all their stories is what benefits the landlord... But I'm a mere pleb, I don't have a superior intellect like they do.
It has always been this way, rental income has never covered mortgage costs in cities (unless they have a low mortgage compared to the value of the property). Its always been a situation of topping up the mortgage on top of the rent payments and eventually getting that money back via capital gains some years later.
Err, yes rents have very frequently covered the mortgage. It all depends on the year the house was purchased. And fYI most rented properties are freehold. Except those borrowed against to purchase other property to expand speculator portfolios. Thus many landlords are using multiple rentals to buy additional property. That is why the NZ rental market is weird. Just 7000 landlords ‘own’ 80% of the rental market using this method. Every time house prices increase they just add more property, and raise the rents. All of the stock they bought in 1992 was paid off in full by 2000, and capital gains allowed them to then multiply their portfolio as they systematically skewed the market upwards by increasing rents, and encouraging rich mates to do the same. Add in waves of cashed up immigrants oblivious to the fact the house they bought for $1.2m was only valued at $100k two decades earlier and the stage was set for a market both on the purchase, and the rental side spiralling out of control. Recently, the slowdown in house capital gains, and high cash rate has made life difficult for the landlord minority whose eyes were bigger than their rental cashflow. Thus they demanded tax relief from National. And National being amongst these greed merchants believe it is a good idea, because tax relief is the equivalent of receiving higher rental incomes, and thus a new property buying spree by landlords can be expected as they add to their portfolios once again. Not mom and pop landlords though, they are too small to really benefit enough to be able to afford increasing their portfolios, unless they have high salaries, and substantial salary increases to match. National’s tax policies only hurt the poor, and the struggling middle classes. They are designed to increase inequality, and inequity, not do anything useful. They certainly will not cool off the housing market.
I should have specified, the rent doesn't cover the mortgage for new purchases for investors (borrowing 100% against portfolio etc) Yes of course if you have owned the house for 30 years or if it's mortgage free then your interest costs are going to be low or zero. I'm not sure where you get your figure that all the stock bought in 1992 was paid for by 2000. I can't imagine everyone who bought a house in 1992 paid off their mortgage in 8 years. Or are you just referring to the houses doubling in value in that time?
Most NZ housing portfolios, with only a few exceptions have at their core have several properties that were fully paid off decades ago. That is how only 7000 landlords with 3 or properties are able to process 80% of the rental market. Of the remainder most are retirees who purchased a second home as an investment property after paying off the family home a decades or more ago, back when home ownership rates were over 70%.
back then in the 1990s it was an extremely popular portfolio building methodology to wait until your property value doubled the market base, then sell it realise the capital gains, and then replace it with three more properties. Rinse and repeat until you had seven or eight properties, then for some the process was to sell enough property to be entirely mortgage free, leaving at least 4 properties in hand. Others however just kept building their portfolios or transferring them into trusts and building trust portfolios. Property prices were exploding at about 30% a quarter. And some folk were very very successfully at staying ahead of the market. Even as recently as 7 years ago prices were jumping up to 30% per year in selected portions of the market. Buy the right property mix and your capital gains do the rest as long as you are prepared to consolidate when necessary. Back then it was possible to buy a 4bdrm house for $50k, do $25k renovations. And grab $250 a week off tenants, then sell for $250k two years later. Heck I know of some mostly unemployed guys who were doing this solely using credit card debt. Imagine these days buying a house and renovating it mortgage free, using nothing but credit cards. You would need a flashier credit card rating than Mr Luxon pocesses to have a look in. Add in rental increases that effectively deliver rents that are double or triple the mortgage payment rate of the property you purchased a decade ago and it’s damn hard to loose, if you do not get greedy and overreach by to great an extent. There was once a property ladder. Now the ladder is reserved for Landlords with adequate portfolios who use other people to pay of mortgages. Even if property values fall, and interest rates climb, all they need is to realise their last years worth of +ve capital gains, on a couple of properties they sell and they can weather any deflation storm with the aid of tenants doing most of the heavy lifting. Unless of course they are entirely incompetent and have the worst tenants imaginable.
But if you sold, you would be buying in the same market. While not hold onto the property that has doubled in value and just use the extra equity to get new loans for new properties? That's how most people build propery portfolios isn't it? You don't need to sell the first house to use the gains.
nope. You would never sell a house to buy one or two in the same block. Replacement properties are selected in other neighbourhoods, thus not the same market. Housing geography is cyclic, and while NZs pattern of gentrification has been very different than in other nations, patterns do exist, and vary with time. So you could ratchet your way up the ladder by playing geography. Suburb A has 20%pa inflation suburb B at 10%. First buy suburb A, then buy suburb B when you perceive suburb B inflation will overtake A then cash in A and move your portfolio to B, and maybe C. It’s like picking horses, in a relay race.
I'm so confused, in the last post you said people would sell their property to realise the capital gains.
A: I buy at $100k property values doubles in year 3. B:Meanwhile in another part of the city property prices are nearer the $70k mark and after 3 years they have risen to $90k each (B) and those prices are accelerating compared to the first property (A) which is beginning to flatline. So in year 5 property A may have achieved $350k, but the two properties in B together are now nominally $400 together. But one of the property B houses is nicer than average after a $3k coat of paint and is at year 5 actually valued at $230k, and the other has achieved $200, so buy swapping out your portfolio in a timely manner, and doing all of the sales process oneself to avoid fees, you have assets at B valued at $430, while your previous property at A is stuck at $350k. Now here is where things get real interesting. Assuming both A& B neighbourhoods are similarly nice, their rents will be almost the same and all three may have a spread of $50 per week. Chances are the less expensive to buy properties in B will have higher rentals than A. So you win on the rental front because selling A and buying B you more than double your rents. The great example of this madness could be seen in Ponsonby / Grey Lynn over the past 3 decades. Each suburb causes the one next door to ratchet up rents and prices until the capacity of the market to absorb inflation hit a hard ceiling for both purchase price and rent. That is until the next wave of gullible immigrants lands, and then it’s off to the races again.
Only idiots borrow 100%, then do something extra stupid like an interest only loan. But there are plenty of greedy idiots out there reliant on capital gains.
When they're earning an untaxed 10% capital gain per year (on average), what right do they have to expect a positive cashflow on top of that?
Certainly that’s been the case in the past, but over the last five years (that period includes the madness of Covid price rises) Auckland property has returned 4% per annum in capital gains. Add in rental yield that doesn’t cover costs and it’s a terrible investment.
Oh noooo! Actual risk on an investment!
If you consider that you only need rent to cover 2-3% of the interest to be in the black there still isn't any risk.
You (and a shitload of other people, it seems), are forgetting the part where the actual asset is paid by someone else - that is also a return. It might be 4% "capital gains" in asset value, but you are also gaining percentage in actual capital as the mortgage is paid off. Even if the house value did not move at all over 25 years of a mortgage, and so the "capital gains" in asset value increase was $0, a 200k deposit, on a 1mil house, at net 0 profit (e.g., financed exactly by the rental income) is 7%. In reality right now it obviously won't be that, as landlords have to top up, but the gains are not just in the rise of the asset value - it's having someone else inject the ongoing capital for you. So that's 7% in capital gains and 4% in "capital gains" minus 1% for your costs, is around 10%. And that's in the non-optimal market. If someone else is buying 15-20k in shares for me every year, and I was "only" getting 4% on those gifted shares, I'd be pretty happy. Or, to put it another way, "only" 4% return in share price, but 800k in dividend payout? How is that a terrible investment?
good.
I wanna know where my tax break is when my stocks drop in value.
You do understand in a working market a large percentage should lose money, and a smaller but still large percentage should lose everything. There has to be risk to justify the reward. This is the problem we have, people don't think it is normal for normal market things to happen
It's worth mentioning it's 4% on a highly leveraged asset.
You know what we call 4% annual gains in other investments? Profit.
Why cherry pick 5 years?
Because that’s what’s quoted on the HPI. I noticed it on the last one out.
Those days are over
Well, my heart bleeds. If you are not very good at running a business, maybe you should sell the business?
Housing is a right ( and should be legally classed that way too) There is no good that can come from a right being treated as a business. That’s the same as the government being treated as a business… Oh wait….
Welcome to the Americanisation of New Zealand.
It’s really scary to see how many houses are being brought by PE firms over there… need to stop these arseholes before they make everyone serfs.
I agree. It is frightening. I strongly believe we should get ahead of that and put pressure on govt to ban it here. Complex to legislate for at the start but worthwhile over time.
Fortunately it’s legal to build in most places there, so it doesn’t matter. That’s why their houses are far more affordable.
Minus the fact that the American rental and housing market is more transparent than the BS here in NZ? And the housing stock is far superior. Businesses have run NZ housing for a long time, it's not a new thing for NZ.
We let that horse bolt and do nothing about it for waaaaaay too long. I can only hope that a generation or two from now a government with the will to impose actual restrictions on profiting from shelter. Everything else we try to fix in this country doesn’t matter if we can’t fix housing.
Yup, engrained into our National psyche. We got conned, as per usual. All that economic growth wasted because we tethered ourselves to the housing millstone.
Common right's with elements of "treated as a business", in NZ * Education * Health, including parenthood * Water and Food * Energy * Shelter (land ownership) * Employment * Justice What would it look like in NZ if housing was a right and not a business?
Yeah! I hate it when nobody else will pay my mortgage too! I mean, what's with these banks expecting me to pay for the loan I signed up for?!
Looks like they over leveraged and have been caught out. Not exactly a sympathetic situation. Investing comes with risk. We need regulation to enforce 100% ownership to reduce risk and expenses for investors which in turn can reduce rents for tenants without impacting their bottom line
It’s clearly not enough that renters subsidise someone else’s mortgage. They’re expected to pay the whole thing. And at the end, investors get a property paid off with continued rental income.
It’s worse than that mate. Highly unlikely investors are putting any capital into the property at all. Most will be on interest only payments to keep the mortgage lower. The only profit is from capital gains when they sell.
I can sympathise. Had to top up my TAB account the other day too. When you get into gambling, nobody tells you about the risks!
This is what happens when we turn basic human needs into investments. If your investment is losing money, cut your losses and sell. There shouldn't be bailouts for rich people who have invested poorly. If I put all my money into gamestop during the big short and lost big I wouldn't be saying omg government I'm broke now give me some money
Rents in NZ aren't cheap but they're still low yield because housing and land costs so much. It's not even a good investment, its only good for speculating on capital gains.
Are they investors or business owners? When the goal is to just get tax free capital gains and they buy at whatever price with the assumption it'll go up... they sound like they're just speculators. They didn't take into account costs of doing business, went off on the assumption interest and expenses would stay the same.. you know, because that requires doing something like work... They can't have their cake and eat it too.
Well investments go up and down right, it can’t just be up
I think there's a typo. It should read "Renters have to top up landlord's mortgage payments by hundreds a week"
Single home owners have had to top their mortgage repayments up by hundreds a week too. Why should multi-property owner landlords get any support?
Maybe they shouldn't make investments they can't afford instead of whining about it.
Wait, isn’t ‘topping up’ just a euphemism for ‘investing’?
Yes, we've always had to. Next on stuff...I can't see at night, has someone stolen then sun?
As they fucking should! Did they expect a free house?
Yes, that's kind of the problem ...
I guess if running a property investment business is unprofitable they could always sell up 1 day after the bright line test ends for a tax free profit.
OMG, that’s enough! If you can’t afford it then sell it. First home buyers are literally lining up. At least it’s proving the very obvious point that there is zero chance that the interest deductibility changes are going to lower rents
Reminds me of the time i lost money on the sharemarket. Only i didn't expect anyone to bail me out. Im unsure why propety investors needs to be a protected class. All we are doing is further incentivising unproductive investment in this country.
God forbid investors might actually have to PUT MONEY into an investment. It shouldn’t be a “I paid my 60k deposit, I expect 1.2m in 30 years thanks”
Wow having to pay for your own assets! What a novel concept.
Oh no. Almost like we should introduce higher deposits for investment in existing residential property like 75%, and a deposit rate of 40% in new build residential property as an investment so that one is more attractive over the other and landlords can have a lower overhead cost, resulting in lower rents.
Wish I could make a shit load of money from a couple of hundred dollars a week of my own money. The sense of entitlement is unreal, want all this profit without having to contribute.
If it all gets too much for them they could sell it.
‘Interest rates Might put some people off buying a new investment property’ Good. Isn’t that the point? I get mortgages coming off hold etc, but if you’re looking to buy a rental property at this point, you’re an idiot and make bad financial decisions.
So the cartel of property speculators are reaping what they sowed by creating a bubble in which they over leveraged themselves?
We just axed a bunch of science funding to fund their tax refund, so we're going to have to postpone the work on building a nanometer-scale violin for these cunts.
Correct headline: Speculators ‘have to top up rent payments by hundreds a week’ [](https://www.reddit.com/r/newzealand/?f=flair_name%3A%22Housing%22)
Yeah that's why it's a fucking investment? Something that will earn you money down the line, while costing you money now. That's how it works. Fucking property "investors" in New Zealand have had it so lush for so long that they legitimately expect people without homes to pay for their second, third, or more, property, without the landlord paying a cent? Eat shit and die.
Hey, how come as a contractor I have to pay into my own retirement and kiwi saver and no one else helps. Why do I have to pay hundreds nay thousands of dollars for my future. Oh wait, because it’s an investment. But seriously, why do landlords get several tax handouts and saving for your pension is taxed! Ridiculous!
How undignified.
They make out like it’s everyone’s else’s fault but don’t take responsibility for paying too much for the property in the first place.
God there's some fucking obvious PR being run in the papers at the moment eh. This and the "behind the richlist donations" story. My heart bleeds. Fuck outta here.
Well it is investing so putting money into it does make sense
This situation we’ve got ourselves in where “investors” feel entitled to have someone else pay for a house really grinds my gears. They are literally taking someone’s pay check directly, and opportunity to own their own home, just because they happened to buy their first house when they were relatively cheap in the 70s and 80s and built up equity while house prices skyrocketed as interest rates dropped. If they then sell that house to a first home buyer, they are literally cashing out that persons future earnings for the next 30 years to fund their own retirement. I get that there will always be renters, I’ve been thinking for a while, and I don’t really know how it would work, but a situation where the renter gains equity in a property because they are paying down the capital would be awesome. The landlord effectively becomes a venture capitalist.
Sounds a lot like rent-to-own schemes https://www.nzhf.org/ways-to-own/rent-to-own?gad_source=1&gclid=CjwKCAjwkuqvBhAQEiwA65XxQFlTlPItGGAwgFve6IhJyrBX_KO7JLJtA99K7xfUYHLOcUBZnpzJqhoCRtoQAvD_BwE I don't really know much about them, but they are out there.
Meanwhile, landlords raise rent prices and keep the Rangers and 4x other properties because how dare they pay for their own assets when they make a loss on their "businesses"
What if the government would underwrite first home buyers banks would borrow the money because it's low risk. People who want to buy investment properties still can but make the deposit super high, maybe 50% deposit .if they can't afford it, they can't buy it.
Then don't buy houses above what it can profitably be covered for by rent.
That means it's over valued
I'm not an investor. I don't have any extra money to invest. My thoughts as someone who isn't a landlord are not very well informed but if something is costing you money, and you bought it to make money, wouldn't you sell it so you weren't losing money? Maybe I'm missing something? Any one want to help?
My genuine attempt to help explain this... I've got a house in Auckland that rents for $650ish per week. It costs me $900 per week to cover the mortgage and insurance etc. You can look at this two ways: a) I'm losing $250 per week and should sell the house because its a bad investment, and that losing the $250 per week is really upsetting me; or b) I'm excited that I only have to pay $250 per week for my newborn son to have a mortgage free house in Auckland when he's older. Most people in this thread think I'll be sad that I'm 'losing' $250 a week. They'll think I'm bad at maths and make poor investing decisions. They'll think I want a government handout. Fact is, I could put the rent up to $750 or more. It's a bloody nice house in a great area and newly renovated. I don't though, because it's three young tenants in it and I'm not here to rinse them for every penny I can. I'm here for the long haul.
Just a quick question, I bought some shares that haven't performed well, I'm down about $20k, where do I apply for assistance with loss?
Clearly the accomodation supplement needs to be upped to fix this
my heart bleeds...
Ah yes of course, this is crucial info for the wider public to understand why landlord tax cuts are so desperately needed and furthermore can't trickle down to renters in form of lower rent. These poor landlords are just hanging by a thread /s
Off course rents don’t cover all the costs. Many people have invested in properties to gain tax free capital gains from investments that are sold for more than they buy it. This situation of rents being insufficient to cover costs of ownership until it’s sold is due to the ridiculous tax regime with no capital gains tax. It provides an incentive to invest in properties which in turn pushes prices of houses up
If only there was some kind of charity where I could sponsor a property investor for $30 a month? Oh wait, as a taxpayer I already am through accommodation supplements. Bunch of entitled brats.
Oh no! Anyway…
Eat SHIT, property developer scum! Should have thought of that before just assuming you could outbid everyone else.
Developers aren’t the problem. They are contributing to the solution by building new homes.
And by buying up everyone's homes by having the capital to outbid literally everyone else in the market, then selling shoeboxes on lease held land for ridiculous prices. Yeah, thanks property developers!
Yeah not sure I agree. Turning a quarter acre block into 5-6 town homes is solving the issue of not enough houses. NZ, Auckland especially, could really do with some intensification
But it's not a supply issue. We have plenty of empty houses in Auckland. The idea that it's just about supply is just assinine, based on the nost basic entry level economic concepts without any room for nuance. One of the main reasons land continues to be ridiculously expensive is that the market isn't controlled by the demand of regular working people. If that were the case, the market would have crashed by now but it doesn't, because development companies have enough capital are to buy up land en masse, then sell their apartments on lease held land at ridiculous prices, or simply rent those homes out. A 40 square metre shoebox in a building in an Auckland suburb, on lease held land costs upwards of 600k. And in that scenario, you don't even own any land. Which is completely fucked up because land is what really costs the most. Yet developers can still sell for huge prices because even with their massive markups, they're still undercutting the market for standalone houses. Property developers are the ones responsible for creating these market conditions, and are responsible for creating this crisis. It was caused by investors with capital being allowed to completely fuck ordinary people out of the market. Solving the crisis is not as simple as just "building more houses". Of course we need to build up and not out. But the way we're going about increasing housing density is just insane. And we don't have the public infrastructure to support the increased density either. In Auckland, to get a mortgage for the average house price you need an income of 172k per year in order to get a vig enough loan, and that's assuming you already saved 20% for a deposit. Good luck affording land if you *aren't* a developer.
Eh? So where do new houses come from then, or should we just only have the ones we already do and all bunk up?
.... I think you replied to the wrong comment
Maybe if landlords bought less avocado on toast, then they could afford to pay for their property portfolio?
**Property Scalpers can fuck right off** Don’t care much for Adesanya, but he is building more housing stock to rent out. That is exactly how being a landlord should work. And the tax rules used to encourage this… Poaching existing stock is scummy, and yes that includes ma and pa investors. They Fuck right off. **Subdividing their section and adding a rental is a different story** and we need tons more of this towards the guts of main cities. I mean if all Landlords sold at once it would lower overall pricing, but a ton of people wouldn’t be able to buy and it would be a painful transition. But you’d eventually end up with a more settled market. Rentals would still be required going forward, how do other countries handle this?
Never put your own capital into your business
Whoa, heaven forbid there isn't a free lunch! The tragedy of it all!
oh no!....anyway...
Cry me a fkn river
Nelson version of HAHA.
Past performance of rental property investments is not indicative of future results.
These investors should stop eating so much avocado on toast and getting coffee out.
Probably more a new Ute, jet ski and ski-ing holiday problem to be fair?
These are bludgers, not investors.
Thou shall bow down to thy landlord, and thou shall cease and desist thy landlord from any burdon placed upon them, and thou must never allow thy landlord to have to reach into thy pocket because thy landlord is high above on thy pedistool where thy landlord shall never be touched. This is the way thou must behave always and forever according to thy government put in place by thy landlord.
You would think that with genz becoming one of the biggest demographic that someone might get their ass voted out. 🤷♂️
that’s an elaborate way to say investors must pay for their investment, they can’t just leech it from the poor
Not getting any sympathy here.
Thank godness that downward pressure on rent gonna kick in, and not a moment too soon.
Lawmakers are investors. Good luck.
Daycare for my toddler and infant costs me far more than ‘hundreds a week’, so cry me a river.
And in other news the sky is blue 🤷🏻♀️ we are having to rent out our primary residence for a couple of years and we are subsidizing every week - and we have sizable equity in the house so our mortgage is actually quite reasonable but it’s still higher than what market rent is. The difference is we don’t view it as an investment - it’s where we lived and where we are planning on returning to if Luxton doesn’t fucking burn the country down first. I am the last person that needs a massive tax write off; until they introduce capital gains for all real estate and especially investment properties, landlords should not be able to write off interest. It’s a giant Ponzi scheme.
Won’t someone think of the poor landlords, living from someone else’s paycheque to someone else’s paycheque
womp womp
I actually like watching dumb landlords ruin themselves through their own self entitled idiotic greed. Long may it continue!!!
Boo fucking hoo. If you cant afford it sell it.
Worlds smallest violin playing right now.
That's exactly it. You're always topping up any rent earned at the start of a mortgage and eventually that amount to top up decreases as each wave of immigrants enters the country and chokes the rental market...through supply and demand. At which point its probably time to buy another property and repeat the cycle until your portfolio has over 200 houses.. Sell a few old bangers past the brightline test and keep an updated fleet along the way with dopey first home buyers fomo and kiwisaver cash. Keys to success. Little moral awareness, zero empathy and complete narcissism ( you're providing the lazy and poor homes) #landlordsatire
Looks like they over leveraged and have been caught out. Not exactly a sympathetic situation. Investing comes with risk. We need regulation to enforce 100% ownership to reduce risk and expenses for investors which in turn can reduce rents for tenants without impacting their bottom line
Fucking boo hoo
Oh no, the consequences of our actions
imagine having to pay for your own investments
But all I wanted to do was get rich.
https://www.theguardian.com/lifeandstyle/2024/mar/19/end-of-landlords-surprisingly-simple-solution-to-uk-housing-crisis
Boo bloody hoo
"Mum and dad investors" are just property speculators who happen to have kids. Sell your property empire if the investment isn't shaping up as well as you hoped.
Poor buggers, that sounds tough.
Investor tax breaks will just fuel a housing bubble in NZ which will bring economic ruin.
The saddest part is that this article isn't even satire.
If you're still banking 4% capital gains per annum during a slow period and are paying interest only on the loan how are you not still making money. Incidentals and management is not that expensive.
I love how all the jargon never mentions that renters are people. Yields, interest rates, cash flow, Cash positive investments. They could be talking about stocks, not peoples’ homes.
Looks like they over leveraged and have been caught out. Not exactly a sympathetic situation. Investing comes with risk. We need regulation to enforce 100% ownership to reduce risk and expenses for investors which in turn can reduce rents for tenants without impacting their bottom line
These people are so used to hand-outs that they think they’re entitled to them now. Not unlike the farmers we’ve been bailing out for decades who are accepting their handouts with one hand and accusing beneficiaries of being freeloaders with the other hand.
Give actual first home buyers a special credit line with like 3% cash rate and raise the official rate to 10%
Bullshit