Yes been looking over at Utah state ... looks just like one HUGE Central Otago but with much cheaper property
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Another week; another housing unaffordability article;Another drop in NZ home ownership rate? The housing divide continues.
https://www.stuff.co.nz/business/118...ess-affordable
Good news for the tax efficient de facto retirement schemes for boomers, but bad news for first home buyers and home upsizers.
Not sure which would be worse low interest rates and high house prices or high interest rates and low house prices.
We have hindsight to know anyone buying in the 70s & 80s has had inflation to rapidly make the mortgage manageable in spite of the high interest rates.
From recent history we also know that buying a house has still generally been a very financially positive move.
https://www.rbnz.govt.nz/statistics/...e-price-values
https://www.rbnz.govt.nz/statistics/...ph-90-day-rate
I wonder if this will ever change or if there is a price that is too high or a yield too low (particularly in light of the additional costs being put on landlords).
At negative interest rates no asset price is too high and any yield above 0% would probably be acceptable.
Low interest rates make for the worst time to buy. Go mad when they are through the roof. If they drop your asset increases in value while your outgoings reduce. Buying when rates are low (and prices are high} is risky. If/when rates rise, your new asset value drops and the cost of ownership rises. Fungus's first law of economics. 'Interest rates and asset prices are the opposite ends of a see-saw'.
So much NZ household wealth comes from investment in land. With asset price inflation, as wealth inequality increases with current tax settings and wealth becomes concentrated in a small percentage of households, NZ will probably have to develop a strategy to reduce the social frictions.
The following is about to years old, so the situation is probably even more polarised now.
Oxfam report - Huge wealth gap in New Zealand where richest 1% own 28% of wealth
https://www.nzherald.co.nz/business/...ectid=11979151
Is Capital Gains Tax Really Dead?
https://www.stuff.co.nz/business/opi...ax-really-dead
Suggest take Oxfam reports with a big spoon of salt. They have an agenda. They, and many journalists that create the headlines, are regularly smacked by some who compare the base data Oxfam use (from the Credit Suisse highly regarded global wealth report) with the Oxfam conclusions. And the headlines.
Credit Suisse 2018 reports show that New Zealand’s wealth inequality declined from the previous year’s 72.3 Gini points to 70.8 Gini points. Don't see that in the headlines, probably not reported at all here.
Kool-Aid.
And even if the 28% is correct, Oxfam includes NZ billionaires from the Forbes annual list. Because it supports their agenda and keeps the donations rolling in.