However, as whatever they're looking to buy has dropped as well they're no worse off, and given that they've almost certainly still made a tax free killing (unless they're very recent purchasers) they're probably still ahead.

Unless they wanted to move abroad. So they did not only lock foreigners out, but also their population in, to some extent.

"Unless they wanted to move abroad"

Ah - exactly.

They want to make the local citizens pay for their overseas retirement then?

No thanks.

Again - community centric economic policies for domiciles is imperative.

Globalization of these things will hurt 99% of us.

> They want to make the local citizens pay for their overseas retirement then?

They want to make foreigners pay them their foreign retirement, in that case.

> Again - community centric economic policies for domiciles is imperative.

It is the government itself that is creating the problem, by overly restrictive zoning policies, similar but even more pronounced in NZ.

"It is the government itself that is creating the problem,"

I don't agree.

The government should have never allowed non-citizens to buy property in the first place.

Zoning is not the issue, there's plenty of space, granted, they could change that if they had to.

Massive surpluses of cash from wealthy 1%-er foreigners is the issue really.

Here's an idea: you can't have 'free trade' if one side is willing to allow de-facto slavery, corruption and externalization of things like pollution etc..

Because that means jobs are lost in 'high regulation country A' and move to 'corrupt and low regulation country B' - particularly into the pockets of their 1%-ers who can then rule their own country, and then come ton country A where surpluses are more evenly distributed and also take over and use their wealth as leverage.

No.

Just like you need certain things in order to have a common currency - you need certain things for free trade.

We understand that 'strategic dumping' and 'government subsidies' are generally not allowed in 'free trade' - but we should be aware that 'government allowing pollution' etc. - is like a form of subsidy.

There is already a trade war with China, so it would be best if the West simply added a tariff for imports that reflected these things, and certainly had capital controls. Nothing heavy, but domestic property ownership should definitely be regulated as well.

> The government should have never allowed non-citizens to buy property in the first place.

Why allow citizens to leave the country while we are at it. Lets just close all the borderds, never allow foreigners in, or locals out. That is the recipe for economic prosperity!

You are forgetting the foreigners have let their cash into nz. They gave it to homeowners, to construcion companies, etc. Those in turn spend it and reinvest it locally.

Why not let foreigners vote?

Why not give them free healthcare?

Why not subsidize their education abroad?

Why not let foreigners pay our politicians to make legislation - the money goes to lawyers, consultants etc. i.e. right into the economy!

For the same reason we have borders, that we don't allow foreigners to buy some kinds of assets (i.e. wireless spectrum) - or do some kind of banking, own certain kinds of companies.

No, it's Kiwis that will ultimately pay the price, as it's Kiwis that are getting screwed by unaffordable housing.

"No, it's Kiwis that will ultimately pay the price, as it's Kiwis that are getting screwed by unaffordable housing"

?

If you take away foreign investment in homes, then housing prices will be affordable.

The only way housing is not affordable otherwise is if there is 'bubble like activity' - like the Silicon Valley - and even then, this has a lot to do with foreign money flowing in, just as LP's and investors and not as home owners.

Point blank.

Toronto and Vancouver have massive foreign investment and have unaffordable homes.

Montreal - with similar economic conditions - has a little less immigration, and no foundation for Asian buyers - and guess what? It's super affordable.

Everywhere you see a lot of international speculation - you see affordability problems.

Ban foreign ownership of property unless it's commercial. There's absolutely no reason to be speculating with our homes.

FYI - this creates a serious problem: Toronto and Vancouver are Ponzi schemes - construction is a big part of the economy. If the zillions of homes stopped getting built, it would mean a 'reality based economy' that Canadians can't deal with - because we don't export valuable things and we are addicted to an ever-increasing number of warm bodies.

I think you've misunderstood the context of my comment, as it seems we agree. I'm saying that foreign speculation (and local speculation) are bad for Kiwis and should be acted against, so it seems we're in agreement.

My comment should be read in context as "No, it's Kiwis that will ultimately pay the price, as it's Kiwis that are getting screwed by unaffordable housing [caused by unfettered speculation, foreign and local]".

Person A has property and wants to sell it to person B, and person C wants to get the property at a lower price, so he forbids, by force, for person A to sell it to B.

Why do you think person C is getting screwed if A sells to B?

A thought experient: What if the landowners went the opposite way: property can only be sold to foreigners that are poorer than nzlanders. How would that go in this scheme of things.

The average price of property grows due to the additional demand from speculators, foreign and local, pushing up the price that C has to pay for any other property as well. It's not that complicated.

The primary purpose of housing is not to make people money, it's to house people. To serve that goal the lower the price is the better.

In that context it's clear that it's not the relative wealth, or even foreigner vs local that's the problem, it's speculation of any kind. So no, in your thought experiment it's no better to sell to foreign speculators regardless of their relative wealth.

A more interesting thought experiment is what happens in an economy when property speculation doesn't happen. House prices are lower, as demand is only from those that want to live in them and those that want to buy them to lease them out. With lower prices paid, there's more money (on average) in everyone's pockets - including those that rent, due to lower rental prices. This increase in money stimulates the economy, especially because most of the relative benefit accrues to those on lower incomes that spend most of their income to live. The economy is further benefited as much of the money that would have otherwise been dumped into non-productive real estate speculation instead flows into real investment.

The end result of discouraging property speculation is enormously beneficial to the country. Investors can speculate in the stock market or whatever else they like, because people don't live in shares, but the housing market exists to serve a purpose... and that purpose is not to make people money. That's an acceptable side effect so long as the primary purpose is fulfilled, but in NZ and AU it's failing.

It does matter 'if it's a foreigner or not' because that will yield a bunch of distortions.

Sure, there are a some that would be disadvantaged (new home buyers that end up in negative equity would also be in a bad situation) but they're dwarfed by those that benefit. A government with the nerve to crash the market through sane taxation would be able to reap a sufficient dividend to compensate those genuinely disadvantaged through negative equity, but it seems unlikely to happen.

> A government with the nerve to crash the market through sane taxation would be able to reap a sufficient dividend to compensate those genuinely disadvantaged through negative equity,

Ha!

The government is already collecting taxes because of home sales, it doesn't need to restrict it to solve it with its magical redistribution powers.

I don't think you understand the NZ situation very well; the government collects very little from property sales compared to most parts of the world, because there's no stamp duty and there's practically no capital gains tax.

That said, government revenue isn't even the problem, the excessive cost of housing is the problem.

The government is already interfering in the housing market by not taxing it at the same level as normal income; by making it tax advantageous to earn capital gains rather than by labour it pushes money into that market.

I'd prefer that they stopped messing with the housing market by treating it the same.

That’s not only attributable to this single item. There’s more such as exchange rate, salary levels and savings rates... that you’re stuck in an economic tarpit because you can’t speculate freely on housing (a primary necessity, btw) is a bit disingenuous

Who are you to make that call on a third party. Are you going to reverse the policy if 10% vote against it?

I'm not sure what sort of call you think I'm making here, it's just an observation of the economic effects. If you've bought a house to live in and the market doubles then halves again, you didn't benefit from the rise nor suffer from the fall. The main losers for a drop in prices are speculators, the main winners are practically everybody.

However home owners that are not actually benefiting from higher prices are incredibly attached to their paper gains and so any policy that threatens that will be wildly unpopular.

> I'm not sure what sort of call you think I'm making here, it's just an observation of the economic effects. If you've bought a house to live in and the market doubles then halves again, you didn't benefit from the rise nor suffer from the fall. The main losers for a drop in prices are speculators, the main winners are practically everybody.

A person that moves from one city to another, a person that sells their home to go back to renting, a software engineer thinking of moving to nz for a job has now found that he might never be able to purchase a home. The effects on pricing are not in par with wages: someone downsizing their home will get a smaller difference, and someone upsizing has found it is cheaper. Real estate agents income drops, tax revenue drops, tourism drops, etc.

There are more circumstances that we can imagine and my point is that is very presumptuous to think all those people have been benefited. Lots of landowners would vote against it, and they get no compensation from the ones that voted in favor of restrictions. The principle is not to benefit a majority. If we wanted to do that, we would just seize things from the top 49% and give it to the bottom 51%. There is no fundamental value satisfied here but the capacity of landowners to get use the government to tell what other people can or cant do with their property.

I reiterate: this is not about what nz wants, its about what some people want.

> The principle is not to benefit a majority

Yes, it is.

> If we wanted to do that, we would just seize things from the top 49% and give it to the bottom 51%.

No, we wouldn't, because that wouldn't achieve it.

> I reiterate: this is not about what nz wants, its about what some people want.

Reiterate all you like, you're attacking a strawman of your own creation because nobody is claiming otherwise.

> a software engineer thinking of moving to nz for a job has now found that he might never be able to purchase a home

It'll be a lot easier for him after a crash in the NZ property market, doubly so if foreign money is pushed out leading to drops in the NZD on top of the crash.

"If you've bought a house to live in and the market doubles then halves again, you didn't benefit from the rise nor suffer from the fall. The main losers for a drop in prices are speculators, the main winners are practically everybody."

This was what I said and you haven't actually disagreed with that anywhere. Yes, there are some that will be worse off, but increasing prices harm more than they help. Decreasing prices help more than they harm. It's not possible to do nothing, because doing nothing is doing something by continuing the current policy mix which inflates prices.

Crashing the market is the only way to improve the situation, but is politically untenable because people are very attached to paper gains even though they don't actually benefit from them. The end result will be an uncontrolled crash in the market that will leave the government with no revenue with which to help those that are harmed by a falling market; deliberately crashing prices through appropriate taxation would leave most unharmed, but would extract money from those that had benefited from a bad situation to help those that were really harmed.

It's the right thing to do, but no government will do it.

> a software engineer thinking of moving to nz for a job has now found that he might never be able to purchase a home.

No, they can't purchase an existing home. You can always build a new one.

if only there was a process for collective decision making. perhaps we could delegate the more complex decisions to representatives chosen by the people using this process.

somebody should invent that.

(sorry for the snarky tone, but why is this even worthy of discussion here?)