NZ's new Nit-Pickiness Culture

NZ's new Nit-Pickiness Culture

I've made some comments about Sally Lindsay's article regarding why I don't think any of the proposed changes the government are making will improve outcomes for home buyers. Beating up investors with yet more regulations is just envy tax, it won't make it easier for first home buyers.

The government will look for other ways to dissuade investors from buying property and encourage them to sell according to Tony Alexander.

Here are some of the ideas on the table:

- Remove ability to deduct any rental property expenses from taxable income

- Debt-to-income restrictions (DTIs)

- Debt servicing-to-income restrictions

- Interest rate floors

- Ghost houses

How many times does it need to be said, more taxes won’t magically create more affordable houses. The government has already done lots of things to supposedly ‘fix’ the housing market and there is a lot more being proposed, unfortunately none of these ‘fixes’ have anything to do with making it possible to develop and build new housing more cheaply and easily.

At the end of July the number of properties listed for sale on www.realestate.co.nz stood at 13,871 in seasonally adjusted terms. This was a decrease of 33% from July last year and 71% from July of 2011 when listings totalled over 48,000.

Maybe I’m not as smart as the egg-heads, but I know some things about property prices, and one is that houses aren’t going to get any more affordable until something is done to stop it being so damn difficult, expensive, long-winded and annoying to get consent for new housing.

Really, who needs annoying? Life is too busy and weird right now already. Things that we took for granted like being able to go where you want, when you want, are no longer guaranteed. Things you expected you would do naturally as a matter of course, like buying your own home, are quickly slipping out of reach as houses prices rise rapidly. It’s not just houses that are escalating in price, it’s also medical procedures, further education, especially if you want to study abroad, food, transport costs, construction and much more.

The last leap up in prices was driven by government policy. The government and reserve bank made the decision to slash interest rates and pump excess money into the NZ economy through a range of liquidity support measures like its Large-Scale Asset Purchase and Funding for Lending Programmes.

Yes, this was the right thing to do during and just after lockdown last year, but they should have raised rates and turned off the cash tap long before now. The longer they pour low rates and easy borrowing on the housing market fire, the more prices will rise further and further out of reach for everyday New Zealanders, and those ‘lucky’ ones who have bought, had to take on a lot more debt than would otherwise have been necessary.

Quotable Value says the housing market is "clearly cooling," even though the national average dwelling value hit a record high of $952,078 in June. That was up by 4.3% compared to three months earlier and up by 26.4% compared to July last year. That doesn’t sound very ‘cool’ to me.

It’s getting very expensive to be a Kiwi. For most of us, the days of being able to buy that section near the beach you went to on holidays as a kid are gone. Our lifestyle used to be simple, easy, “laid-back”. Do you remember that phrase “laid-back”? That’s how they used to describe Kiwis. Laid-back. I’m not laid back! There’s a bloody good chance you’re not laid-back either. New Zealand society hasn’t been laid-back for the longest time, who are we kidding? We live in a fast moving, stressful society on a handful of absolutely gorgeous islands in the middle of nowhere, it should be heaven, but we’re stuffing it up.

When did we get so worried about the details? You know, all the dumb stuff. The political correctness, the NIMBYS and BANANAs. Everyone has a say, consultants reports for Africa, everyone wants something, more, more rules, more things you can’t do, aren’t allowed to do.

Make no mistake, all of this nit-pickiness that has crept into NZ culture is contributing to our incredibly high house prices. You can’t turn around on a NZ building site today without asking someone with a clipboard for their approval.

So many rules, too many rules. Until Kiwis start chilling, the price of houses won’t either.

John Kenel

Assured Property

Read the full article by Sally Lindsay https://bit.ly/3lWgcnx