Post by eri on Nov 26, 2021 15:29:11 GMT 12
No gain, just pain
For those who take the religious view that a lack of capital gains tax here constitutes the Original Sin, it must be frustrating to observe similar runaway affordability issues in Australia, Britain and other countries that do have stiff capital gains and inheritance imposts, as well as stamp duties, bright-line tests and other asset curbs.
New Zealanders' long habit of self-flagellation about housing is especially pointless in the global context. A new report by economic consultants McKinsey has found that the rest of the developed world has the same overinvestment in bricks and mortar, for exactly the same reasons: low interest rates and low perceived risk, increased capital mobility among foreign investors, overregulation of residential building and the inability of tax and regulation to curb speculation.
When even such a command economy as China's is struggling with affordable housing, it seems a bit feeble to keep blaming the boomers, greedy flippers and The Block.
Only one thing is for certain: the current labour and materials shortages mean all new builds are going to become increasingly expensive for the foreseeable future – with "help" from rising interest rates. It's not impossible that new building could grind to a shuddering halt.
But here's the crowning perversity: there are now portents that New Zealand is heading for an oversupply of housing. Talk about being careful in what one wishes for. Economists warn the surge of new builds already coming to market, combined with near-static migration thanks to the pandemic, means this country may soon have a different problem: enough housing, perhaps even too much, but still too few houses that people can afford.
www.nzherald.co.nz/business/jane-clifton-housing-markets-perverse-prospect-is-enough-homes-not-enough-affordable-ones/DPZ2K2YYGVVZG3AWMQETLINJ2A/
For those who take the religious view that a lack of capital gains tax here constitutes the Original Sin, it must be frustrating to observe similar runaway affordability issues in Australia, Britain and other countries that do have stiff capital gains and inheritance imposts, as well as stamp duties, bright-line tests and other asset curbs.
New Zealanders' long habit of self-flagellation about housing is especially pointless in the global context. A new report by economic consultants McKinsey has found that the rest of the developed world has the same overinvestment in bricks and mortar, for exactly the same reasons: low interest rates and low perceived risk, increased capital mobility among foreign investors, overregulation of residential building and the inability of tax and regulation to curb speculation.
When even such a command economy as China's is struggling with affordable housing, it seems a bit feeble to keep blaming the boomers, greedy flippers and The Block.
Only one thing is for certain: the current labour and materials shortages mean all new builds are going to become increasingly expensive for the foreseeable future – with "help" from rising interest rates. It's not impossible that new building could grind to a shuddering halt.
But here's the crowning perversity: there are now portents that New Zealand is heading for an oversupply of housing. Talk about being careful in what one wishes for. Economists warn the surge of new builds already coming to market, combined with near-static migration thanks to the pandemic, means this country may soon have a different problem: enough housing, perhaps even too much, but still too few houses that people can afford.
www.nzherald.co.nz/business/jane-clifton-housing-markets-perverse-prospect-is-enough-homes-not-enough-affordable-ones/DPZ2K2YYGVVZG3AWMQETLINJ2A/
