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schadenfreude

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It's fairly obvious that renting is cheaper than buying (at least on a monthly cashflow basis) in the UK market at present. A mate in NZ says that this is not yet the case down there. Does anyone know if this is true or not?

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It's fairly obvious that renting is cheaper than buying (at least on a monthly cashflow basis) in the UK market at present. A mate in NZ says that this is not yet the case down there. Does anyone know if this is true or not?

Depends where. Around Auckland probably a lot cheaper to rent as oversupply of new appartments there has caused rents to drop significantly. Yields higher as you head south.. and hence I would imagine renting is less attractive as a result.

NZ IR currently around 7% so funding a mortgage takes a little more concentration than in the UK... and fortunately it would appear the boom has ground to a halt in NZ too... so no rush to buy IMO.

Many, many Kiwis invest in property 'for their retirement'. Prices have generally trended upwards as the economy has mirrored the UK... plus the added influx of new migrants has tended to keep prices up... but seems to be changing recently (economy slowing, business confidence waning, net migration slowing). Sound familiar?

Having said the above - note that all sorts of tax advantages available to property investors in NZ... no capital gains tax, plus depreciation allowances that come in to play if you have some NZ taxable income to offset against... but the system does favour long term investors who can avoid CGT. BTW - you will love to hear that the NZ taxman has recently gone after property flippers and 'developers' in a big way ... who falsely claimed tax relief - buying a property purely for profit will ensure that all that profit is treated as taxable income.

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Depends where. Around Auckland probably a lot cheaper to rent as oversupply of new appartments there has caused rents to drop significantly. Yields higher as you head south.. and hence I would imagine renting is less attractive as a result.

NZ IR currently around 7% so funding a mortgage takes a little more concentration than in the UK... and fortunately it would appear the boom has ground to a halt in NZ too... so no rush to buy IMO.

Many, many Kiwis invest in property 'for their retirement'. Prices have generally trended upwards as the economy has mirrored the UK... plus the added influx of new migrants has tended to keep prices up... but seems to be changing recently (economy slowing, business confidence waning, net migration slowing). Sound familiar?

Having said the above - note that all sorts of tax advantages available to property investors in NZ... no capital gains tax, plus depreciation allowances that come in to play if you have some NZ taxable income to offset against... but the system does favour long term investors who can avoid CGT. BTW - you will love to hear that the NZ taxman has recently gone after property flippers and 'developers' in a big way ... who falsely claimed tax relief - buying a property purely for profit will ensure that all that profit is treated as taxable income.

Thanks for this. My mate is a bit over his head in debt and needs to consider an STR as an option - but it doesn't look as if the maths are as clear cut as they are in the UK. He won't consider a MEW as he has enough debt already and has at least recognised the point to stop digging

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Thanks for this. My mate is a bit over his head in debt and needs to consider an STR as an option - but it doesn't look as if the maths are as clear cut as they are in the UK. He won't consider a MEW as he has enough debt already and has at least recognised the point to stop digging

Depends where he is... if in Auckland city then I would definitely get out and rent. Same caveats apply in NZ as in UK or anywhere else... if he is in a property/area that might get particularly badly hit in the downturn then he might want to STR.

Your mate might want to take a look at the following:

http://www.nzherald.co.nz/index.cfm?c_id=8&ObjectID=10338844

http://www.westpac.co.nz/olcontent/olconte...LE/QEOJul05.pdf

I quote from the above:

"We have long been of the view that a record level of the exchange rate, rapidly dropping net migration, higher interest rates and an eventual tipping over of the housing market would knock the economy for six. What has surprised us is that growth is turning out so anaemic with

the housing market yet to materially correct. And thank goodness the housing market hasn't yet hit the wall, or else the dreaded R word ("recession") would be the topic of the day.

...

The housing market, which has been difficult to read since the mortgage war at the end of 2004, is now showing concerted signs that momentum is weakening. Dwelling consents collapsed in April, and data for May show only a small rebound from there. While some of the weakness

may be put down to changes in council building regulations and increased building levies since March, at current levels they point to a sharp slowdown in residential building. Turnover is also on a downward trend, with sales in May falling for the third consecutive month. As a result, roughly half of the summer sales spike has reversed, albeit in a gentle rather than precipitous manner"

And that little number came from Westpac - one of the largest banks in the region...

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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