The Kiwi love affair with housing – a perspective
In Business Day & the Dom Post on Thursday morning, David Hargreaves puts forward a couple of interesting observations regarding the Kiwi psyche in an article headed “Everythings on the House”.
Hargreaves noted that “house prices have been knocked backward by around 10 percent from their peak.” and…
“But this has been a much more resilient response than in many countries.”
He also states his belief by saying…..”I never thought house prices would fall as much as historical studies of economic relativity (ratio of income to price of house etc, etc) suggested they needed to fall by.”
Much of this is in stark contrast to the “30-35%” figure we have been continually reminded off by certain quarters.
In attempting to explain even further why, David puts forward the following argument…..
Do you know why not?
Because Kiwis were never going to let it happen. The house as the number one (if not the only) means of investment is so ingrained in this country that you get the impression some people might have been more prepared to Bungy jump nude from the Auckland Skytower during rush hour than to take a loss on their house. Now, obviously some people were ultimately forced to take losses, but there’s been a battle to keep prices up that goes somewhere beyond normal economic ebb and flow. The price of houses has become more discussed, arguably, than it was in the gloating “how much is yours worth” days of 2005-06.
Where this leads us I believe is to a situation in which housing will be even more of a national obsession than it was before. It will be the number 1,2,3 and 4 investment option. And that’s bad.
In perspective we know that Real Estate watching is Kiwi’s second most popular spectator sport so they are interesting comments.
Now the reporter ends this comment above by saying “that’s bad.” And he goes on further in this article to mentioned the dreaded 3 word combination , Capital Gains Tax.
Too that I say bad on him, (bad as the item above) instead of adding his support to that arena, how about looking into the indebtedness of ALL Kiwis, and perhaps look to abolish tax on interest earned in a bank account (that you have, in most cases, already paid tax on to earn!) or at the least have a tax free $20-30K limit or similar threshold (100% non taxable limit) after which tax is then calculated on the rest.
Across the board.
It’s just that I really haven’t seen many things lately that give me the appearance of encouraging money in the bank. In fact far from it, and even touched on in the above mentioned article is the total disappointment from those whom are reliant on interest from their savings to provide a steady income.
Food for thought?
SOURCE INFO – STUFF.CO.NZ – “Everythings on the House” – By David Hargreaves – The Independent
May 21 2009 | Buyers and Nelson and New Zealand and Sellers | No Comments »
.jpg)
