Investing in rental properties has ALWAYS been about the capital gain. You are incorrect - every other OECD nation deals with capital gains in a way by taxing it. NZ DOES NOT and if you read closely to what i've been saying, buying houses in NZ is still the best game in town because of the amount of capital gain.
Read my links here in another thread which is discussed in parallel to this thread:
https://www.sharetrader.co.nz/showth...l=1#post892227
The important part is what I posted in quotes. Why? I say it's fueled by the behaviour of the people knowing that NZ does not tax long term capital gains on residential houses. It has nothing, absolutely nothing.. about the way rental properties can generate an income.
But don't take my word for it, here's what Bernard Hickey said in ynot's post:
The latter about 'easier credit' I blame it on the behaviour aspect of investors. Owning 5 houses isn't enough and I know a family friend that is aiming to buy his 10th house before he retires.
@ Zaphod: lack of productivity due to tax laws that disadvantage the working class and give the benefit to all those that own houses. What NZ has is the complete opposite of what Canada has where the middle working class get TAX FREE or deferred taxes on their investment savings plans. NZ's Kiwi Saver funds pay taxes, Canada's RRSP defers the taxes or there are tax free options like TFSA, RESP, RDSP, etc. While the wealthy, they lose those tax benefits when their incomes go past a higher point. They call it 'claw backs' on their CCP pension funds (ie NZ super).
Who is going to disagree with Bernard Hickey?