No Minister

Posts Tagged ‘Housing

Your First Car

leave a comment »

Can you remember your first car? I certainly remember mine. A pristine, electric blue, 1975 Ford Escort. Seatbelts (barely). No airbags. No crush zones. No radio – though I quickly borrowed my brother-in-law’s discarded Euro model, which played tape cassettes and had FM, though that was little use in most of 80’s NZ!. Heating? Barely. A/C? That’s what the manual windows are for. The massive 4 cylinder, 1300cc engine could squeeze out the speed limit of 80km/h – if you were willing to put up with the shaking!

I threw whatever money I had into the pot and my parents did the rest. Dad grinned and informed me that it was “payment for five years unpaid farm work”! The idea was that I’d be able to see them once a month by driving the 100km or so from varsity, and for the next three years I pretty much kept to that bargain.

Here it is during my first South Island trip, a couple of klicks north of Hampden, North Otago, looking across at the foothills of the Horse Range and the Kakanui Mountains.

There were’nt many kids with cars at varsity, certainly not First Year students, so it was in this year that I first heard the term, “rich prick”: one still applied during our Old Boy reunions. As the year wore on, the number of old bombs in the car park steadily increased, together with mechanical knowledge forced upon people if they wanted to use the damned things. More motorcycles too, this being the age when any car less than five years old was not cheap. I’ve often wondered how many lives have been saved since 1984 by Rogernomics ending car tariffs, import duties and import licences, thereby making cars more affordable and steadily reducing motorcycle use?

And all of this was simply an extension of the near-mania for getting a drivers licence when we turned 15. We wanted to be independent and even borrowing the parent’s car did not dent that feeling. Several of my mates got their licence on their actual birthdays. In my case it happened a couple of months later, delayed for reasons I cannot recall.

None of us had cars at that point of course but some families were lucky enough to have two so you got the oldest. I have vivid memories of a 4th Form party where my mate Albert and I did a night race in his parent’s tiny, aging Fiat, pushing towards 100mph down a long straight beside other nutters from our class, including a couple on motorbikes. Within two years I’d hit “The Ton” while driving back from some tennis tournament. For that I could thank my parent’s 1973 Ford Falcon, as well as another long straight road out in the countryside, and the cloak of darkness. Traffic cops were rarely seen or heard of there. Whenever I think of kids doing stupid shit I have to remember what I was like at age 16, although frankly I was a much safer driver then than in my mid-20’s when I’d gained “confidence”. Living far out in the boonies with the family’s only car forced responsibility, so no drinking and driving and being pretty careful – aside from that tempting 5km straight.

There were also practical reasons for getting a licence. Many kids would leave school at 15 and their jobs pretty much demanded they be able to drive. A lot of farmers were grateful for having a kid who could shoot into town for some spare machinery part or some other item while they continued to work. And of course sporting events became a lot easier for parents when they no longer had to drive the spawn to them.

These memories have been sparked by two things. First, my eldest son just got his first car. Second was this recent article: US Love Affair With Cars Nearly Finished. It points out a problem with new car sales:

J.D. Power estimates that Gen Zers will purchase about 120,000 fewer new vehicles this year compared with millennials in 2004, when they were the new generation of drivers—or 488,198 vehicles versus 607,329 then.

Cost is having an impact, mainly because car companies in the US seem to be focusing on SUV’s, targeted at Boomers and others enjoying the wealth of the stock market and pensions. SUV prices are over $US 30,000 and insurance costs are also rising.

Of course I have to laugh a bit at all that. As I described earlier – and I’m sure NZ reader’s experiences will be the same – getting a new car in NZ used to be something that might happen to you in Middle Age. In fact I did not get my first new car until I landed in the USA, where the combination of low deposit and low interest financing made it an easy choice.

Millennials and Generation Z saw what happened in the the Great Financial crisis and the first few years of the rebound. They saw their parents arguing over debt in fear of losing their house. They do not want to fall into the same trap.

Used cars? The horror! Bah humbug and “wah” for US Millennials and Gen Z’s: they can live as we did for a decade or two.

In my son’s case he got a 2008 Toyota Camry with 120,000k on the clock. Six cylinders to easily push it to 160km/h, if desired. Smooth to drive. Cruise control. Radio. Heating – and A/C!!! Crush zones. Airbags. And unlike my Escort, it’s pretty much certain to get to 200,000 or even 300,000 klicks before needing any serious work. It also cost about 1/4 of what my old Escort did in inflation-adjusted dollars. Free enterprise at its best. I would not want my Ford Escort back.

But while the car side has progressed in all ways, getting the licence to use it has become far more painful. You have to be 16 now to sit the written test. Then there’s a year of “Learner” driving, with me or Beloved Wife in the passenger seat. A second driving test finally passed has then meant a year of “Restricted” driving, which means passengers can be carried only if there is another licenced driver in the car, and they still have to be in the front passenger seat. Comments in that US article point to similar issues there.

But there are other factors too. My son did not even bother sitting the written test until he was 18, then stretched the learners stage by almost two years through sheer inertia/laziness, and this too seems to be what’s happening in the USA:

Whereas a driver’s license once was a symbol of freedom, teenagers are reaching their driving age at a time when most have access to ride-hailing services such as Uber and Lyft to shuttle them around town. At the same time, social media and video chat let them hang out with friends without actually leaving the house.

“That freedom of getting your own wheels and a license—and that being the most important thing in life—is gone,” said Brent Wall, owner of All Star Driver Education in Michigan, a chain of drivers’-ed schools. He said the average age of students in his class is rising. “It used to be the day they turned 14 years and eight months, everybody was lining up at the door. Now I’m starting to see more 15- and 16-year-olds in class.” He frequently hears from parents that they’re the ones pushing their children to enroll.

Yep! All of that certainly was our experience with No. 1 son, and it’s even worse with the younger siblings. At this rate they’ll be in their early 20’s before they’re driving as I was when I was 15. And it is a pain when it comes to family logistics.

The article finishes on a typical Boomer gloom note:

When they reach their 20s, more are moving to big cities with mass transit, where owning a car is neither necessary nor practical.

The auto industry will soon not look like what it does today. Cars will be smaller, lighter, electric, and self-driving. Boomers will be gone. Those living in big cities will not need to own a car at all, and most won’t.

Boomers are the primary force keeping the current auto trends alive. Demographically-speaking, it won’t last.

We’ll see about that. There’s always been a bit of a hatefest against cars by “city planners” because they can’t be controlled the way trains and buses can be, and I’ve been hearing this stuff about the “youf” moving to big cities with mass transit for two decades now: the usual poorly researched MSM crap. Turns out that the opposite is the case::

In fact, as a new Brookings study shows, millennials are not moving en masse to metros with dense big cities, but away from them. According to demographer Bill Frey, the 2013–2017 American Community Survey shows that New York now suffers the largest net annual outmigration of post-college millennials (ages 25–34) of any metro area—some 38,000 annually—followed by Los Angeles, Chicago, and San Diego. New York’s losses are 75 percent higher than during the previous five-year period.

By contrast, the biggest winner is Houston, a metro area that many planners and urban theorists regard with contempt. The Bayou City gained nearly 15,000 millennials net last year, while other big gainers included Dallas–Fort Worth and Austin, which gained 12,700 and 9,000, respectively.

I hear the same crap about Millennials and Gen Z with regard to detached suburban homes: that they love living in downtown apartments. More grist to city planners naturally, but again the stats don’t support that:.

Perhaps even more significant has been the geographic shift within metro areas. The media frequently has exaggerated millennial growth in the urban cores. In reality, nearly 80 percent of millennial population growth since 2010 has been in the suburbs.

As they can afford to, these generations move to detached housing. As they can afford to, they’ll take up cars more, including new cars.

Considering what a pain city driving is, I’d be more than happy to hand over to a self-driving car now. But that doesn’t help trains and buses much. We’d still be better to plan for cars than mass transit.

And on the open road, which will still be necessary for travelling, will humans dump that feeling of freedom? I suspect they’ll tell the AI to take a break and then grab the controls to have some fun.

Written by Tom Hunter

April 28, 2019 at 8:50 pm

Posted in New Zealand

Tagged with , , , , ,

Focusing on Twyford Land

leave a comment »

Now that the government has changed, I have decided to do a little more blogging over the next three years.

The Executive is huge, and with that will come more spin doctors and noise.

It’s too much for any critiquer to handle.  There will be stuff-ups, and I expect the country to hurt.  Winston Peters already alluded to that in his “acceptance” speech.  He knows how bad the government’s policies will be for the poor and helpless, and he has forewarned us.

For me, Jacinda has done me a huge favour by making tertiary education free for the first year as my daughter is heading off there in 2019.  That will save our family about $5,000.00 for that first year – better than any tax cut could have.  But of course, that’s paid for by taxi drivers in Gore and hairdressers from Wanganui – thanks!

It is impossible for any of us to capture all the dire shit that will be propelled upon us, and so I will focus almost entirely on housing, and particularly Phil Twyford’s policies and promulgations.  Property, real estate, tax et al are areas I know a fair bit about, and so it makes sense for me to do that, rather than try to be a jack of all trades here.  It will probably involve Official Information Act requests and the like.  As much as I can, I will apply the blowtorch to his ill-founded proclamations.

It also makes sense because as sure as night follows day, the media won’t do that job.  Particularly not with Paddy Gower, who seems to be behaving more and more, each day, like a love-struck teenager fawning over Jacinda Ardern.

So that’s my plan.  Hopefully, it will leave a policy area that can be looked back upon over the years, much like Lindsay Mitchell does with welfare.  I have created a new tag for the posts – Twyford Land.

On the topic of Lindsay Mitchell, keep an eye on this – it’s a valuable line in the sand.

Written by Nick K

October 28, 2017 at 11:30 pm

Posted in New Zealand

Tagged with , ,

SUE MARONEY AT IT AGAIN

leave a comment »

Sue Maroney is a drone MP.   Failed six times to win an electorate seat; found wanting as Chief Whip and dumped and well remembered for an unfortunate incident when, during the flag referendum debate, she opened up on the owner of a holiday home flying the Kyle Lockwood flag as a rich prick flaunting his/her wealth and prejudices and conveniently ignoring the fact that her holiday home was just down the road.    At least her erstwhile leader called her out on that.

And now per courtesy of TV1 News last night there she was out pimping for a refugee couple wanting to purchase their HCNZ home but finding the value of the property had increased to the point is was supposedly unaffordable for them.  

So Maroney, ever eager to get her face on TV, is prepared to parade her hypocrisy for all to see.   Point #1 Sue … thought your once great Party was opposed to the sell-off of HCNZ stock per se so why are you going into bat for them and #2 given that I’ve listened to the angry one and his side-kick Twyford bang on about the government selling HCNZ properties at below the market valuation how can you possibly promote this as a shock, horror story?

Guess the side-bar to this is why TV1 News thought the story was worth giving oxygen to.    Here we have a family properly housed and paying a below market rental for that privilege … a property I guess any number of people would give their back teeth for.   So they can’t afford to buy it … I can’t afford to buy the property just down the road from me with elevated 270 degrees looking out over the BoI.

Sue Maroney hypocrite and TV1 an accessory to hypocrisy … fits.

Written by The Veteran

September 18, 2016 at 12:59 am

Posted in New Zealand

Tagged with , ,

Housing Crisis Over

leave a comment »

David Farrar has a most interesting graph up at Kiwiblog.

houseprices

Look at the last three years and what do you see?

A sharp decline in the rate ofprice increase with the distinct possibilty of a nil increase for 2016.

Just in time to give the Gnats a real boost for the election.   And all the while, Labour and its media lap dogs are banging on about their so called housing crisis. 

Just like their manufacturing crisis and their dairy rises, eh?

Ha ha ha ha ha ha …………………………………..

Written by adolffinkensen

September 1, 2016 at 1:25 am

Posted in New Zealand

Tagged with

Cringeworthy

leave a comment »

Every morning I read The Australian and The Wall Street Journal, both papers written and edited by adults with excellent commentary alongside the news. 

Then I open The Herald and cringe.  Wall to wall attacks on John Key and National – day after day after day.

The latest group-think mob-rage is the so called housing crisis in which thousands of illegal immigrants allegedly are sleeping in South Auckland subhuman conditions.  Illegal immigrants/  What illegal immigrants?  I hear you say.

Te ones who are overstayers and who are bludging off their low income,  hard working, church going rellies.  These are the people who a KB commenter who works with them admitted ‘can’t just go off to Winz and get help.’  The best help they could get would be deportation to a warmer climate.

Raybon Kan should wake up and realise that John Key is not the Mayor of Auckland city.  It is Len Brown and his cronies who are directly responsible for the shortage of housing in Auckland.  Yet Kan seems to think the PM is the Messiah who can turn bullshit into bricks. 

In Kan’s world it is the responsibility of the PM to see that illegal immigrants are properly housed.

Now there’s another vote winner for Kelvin Davis.

Written by adolffinkensen

May 18, 2016 at 11:02 pm

Posted in New Zealand

Tagged with ,

The Government’s antithetic tax bill

leave a comment »

Unless you live in a cave or under a rock, you will have noticed that Auckland has a housing crisis.  I don’t think the word “crisis” is hyperbole.  Net migration flows are the strongest they have been in 20 years; and land restrictions are worse than they usually are.  The only bright side (pun intended – see below) to the market is interest rates are likely to stay very, very low for a while, and unemployment numbers are strong.  This means people in jobs being able to afford ridiculous Auckland house prices, or its even more obscene rents.

When these factors clash, you would expect a government that favours the market approach to solving economic and social issue to put that approach into practice.  The last thing we need in Auckland right now is more cost and regulation added to the mix.  The Auckland housing market isn’t working, as Bill English noted.  I doubt the government has any real concern about resolving it, because if it did, it wouldn’t have made Nick Smith the responsible Minister.

Instead of using market techniques and less regulation to try and solve the crisis, the Government has taken the opposite approach: It introduced silly rules as a political response. 

The bright-line test (a Capital Gains Tax that National said it wouldn’t introduce), which was the second of those silly rules, is now being implemented through the Taxation (Residential Land Withholding Tax) Bill. This creates another withholding tax payable at point of land sales within two years.  Again, this Bill is merely a political response to the shrills of Winston Peters and Phil Twyford.  It won’t have any affect on rising house prices, and it will actually have the opposite effect to its intent.

To explain how, I need to summarise the Bill.

The Bill creates a new withholding tax (Resident Land Withholding Tax or RLWT) which requires lawyers to calculate the correct amount of capital gains withholding tax payable by an offshore land developer at point of sale.  As a capital gains tax, it is ring-fenced against losses and other expenses.  In other words, unlike tax paid on profit which has allowable deductions, the capital gains RLWT doesn’t allow these. 

Developers I have dealings with pay their tax in New Zealand.  But they do it in their annual income tax return, which have allowable deductions.  And this return is done many months after the income has accrued – by 1 April the following year as we all know.  The capital gains RLWT will overturn this and require at least 28% to be deducted by lawyers at point of sale.  There are many other complicated parts of it which will require lawyers involved in land developments to become accountants; and there are civil penalties proposed for wrongdoing.  Developers will be able to recover overpaid RLWT at year end in their annual return, but of course this just adds another layer of tax complication which is puzzling for a government of this persuasion, and very puzzling considering the McLeod Report recommended fewer taxes, and less complexity. 

The RLWT will have two initial effects: First, it will severely affect a developer’s cashflow (because they are liable for the tax at point of sale); and second, it will add cost to all transactions from developments. 

The other main effect it will have is also counter-intuitive to what the Government says it wants, and certainly contrary to what the Productivity Commission (scarily) recommended: It will encourage land-banking.  It will do this because developers will not want their cashflow to be affected, and their costs to rise, by entering into sales within two years of the land being purchased.  So they will hold off on their developments.   

Of course the normal process for developers is to show their bank at least 80% of the development sold before bank lending is confirmed.  So developers enter into sales quickly based on draft plans; and usually certainly within two years of buying the land.  The Bill applies to subdivisions and, as mentioned, includes offshore developers.  Indeed, one major company affected by this will be Fletcher Residential, a wholly-owned company of Fletcher Building.  

If you don’t believe me about the increased costs, then perhaps you should consider what Inland Revenue had to say:

This option creates an economic distortion as it creates a “lock-in” effect. In other words, it creates an incentive for people to hold property for longer than two years to avoid the bright-line test.  

For example, a person may avoid selling a property at the highest price, within two years to avoid the bright-line test. The person who is offering the highest price can presumably put the property to its most valuable use. This means that people may not undergo otherwise efficient transactions and put property to its most valuable use due to the bright-line test.

The other daft and disappointing aspect of this shambles was the way the government handled it.  Submissions went out for public input just before Christmas and closed on 26 January.  This Christmas timeframe gave no ability for anyone to oppose it, or write a decent submission pointing out the deficiencies.  The Minister simply described the Bill as “fair”, bit he didn’t say to whom it was fair.

The RLWT proposal in the bill, together with the new bright-line test and changes to collect better tax information about buyers and sellers of residential property will help to ensure that everyone pays their fair share of tax on gains from property sales,” says Mr McClay.

Bill English isn’t stupid.  He sated the obvious – that the market isn’t functioning properly.  The way to correct it is to address the supply issues resulting from the demand.  You cannot do it by adding taxes, cost, complexity and rewarding landbanking.  All of these will make the situation worse and to me are the antithesis of what this government should be doing.

Written by Nick K

February 7, 2016 at 8:00 am

Posted in New Zealand

Tagged with ,