Housing affordability for millennials in Auckland particular

I think Auckland will be a great example of supply and demand. If people can’t afford to live there, they wont, and employers will have to move to where the employees are. As school teachers move out schools will contract and parents will find their children get better education in other centres. Who in their right mind still wants to live in Auckland? Eventually the demand will reduce to match the supply.

I think this means finding ways to make property more attractive as a place to live than as an investment. This means:
1. Removing any advantage that property has over other investment types (particularly tax advantage), and
2. Retaining the benefits when used as a place of residence by the landowner.

Examples.
1. Losses from property should only be deductible from tax earnings if other investments allowed this (They don’t to my knowledge)
2. Property should be subject to capital gains where it is not used as an abode by the person with the mortgage over it. This means non residents will pay capital gains because by definition they cannot reside in the property.
3. Ownership needs to be established over all property within five years. Any property that doesn’t have an identified and NZ tax registered owner should become subject to penalty tax. For non NZ owners, this requires passport details. (this prevents property from being used as a money laundering device).
4. Any other advantages that property has over other investment needs review. e.g. GST applies to second properties???
5. Preventing exploitation. Where a tenant experiences a serious and health affecting problem that the landlord refuses to fix, it can be taken to arbitration and if found in favour of the tenant (i.e. it’s not intentional damage and it’s a reasonable request), then if not remediated, the repairs can be performed and the cost secured against the property. This way, buying an investment and running it into the ground and allowing the costs to be externalized against the health of the tenant is a thing of the past.

It needs a wholistic view on the issue of property. Investing in the ground is not a way to a nation building its wealth.

A housing collapse and pricing normalisation is absolutely essential to ensure a stable and fair society to exist and for the young and future generations to have a positive outlook

Firstly it is important to understand where money comes from.
In NZ only 5-7% of all money represents Notes and Coins issued into circulation by the NZ Reserve Bank, so where does the rest of the money come from?

Well the banks create the rest!!!

“Fractional Reserve Lending rules” give Banks the power to create Money. This means that every
Mortgage/Loan a Bank issues is Money created out of nothing “Thin AIR” Money the
bank didn’t have and only just created as the loan was approved. Unlike a Credit Union that lends out other customer deposits, a Bank doesn’t.

We need to get the public to understand this.

Home occupiers do not need to loose out when the crash comes.

It can be legislated that Banks are not allowed to foreclose on “Home Occupiers “not investors” and
farmers”. The bank will simply take a paper “hair cut” and write off and adjust the mortgage to the new “after crash” CV, this is also known as an “Under Water” mortgage. The bank will absorb a PAPER loss on money they lend out but money they never had in the first place. Remember they created the money out of thin air.
It is absurd for a Bank to Foreclose and reposes a REAL asset just because
you didn’t repay money they created. I call it fantasy money.

Secondly, how ridicules is it that the cost of living “Homes, rent,
mortgage payments” etc. are not included in the CPI.

I believe the best way to do this is reduce demand. One way to do this is to limit the purchase of land to NZ citizens and/or resident

There are many things that can be done to fix the housing crisis. No one thing is going to work on it’s own. Some suggestions could be things like: Reducing the cost of building (through materials and red tape), opening up more land for building (and not necessarily for developers), promote business growth in the regions, restrictions on immigrants ability to buy or even where to live (for a period of time), introduce a comprehensive capital gains tax, etc. The list goes on. Basically, my point is, if you fix the main issues with the housing crisis then housing should become more affordable as a result.

sure, Nathan. And how do you suggest we fix the housing crisis?

Fix the housing crisis and this shouldn’t be an issue.