Latest / The Curve / How Foreign Buyers Shape the Property Market.

Transcript

How Foreign Buyers Shape the Property Market. · The Curve

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Coming up in today's episode, we are going to be talking about our personal dream, property
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portfolios.
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We're going to be talking about why so many wealthy people want to buy foreign property.
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Why everyone gets their banner on it when people from overseas buy property in different
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countries and what does that actually mean for the economy and housing markets?
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We also run through a few celebrities like Kim Kardashian, Taylor Swift and their property
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portfolios.
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But we also talk about the most lucrative expensive places to buy in the world.
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Welcome to another episode of the Property Podcast.
0:34
I am loving the series.
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It's so fun to be able to talk about a different asset class.
0:39
I mean it's been years that we've spoken about the stock market, so to be able to really
0:43
dive into property, I'm loving.
0:45
The property podcast, if you have not listened before, is for anyone regardless of where
0:50
you're at in your property journey, so if you have never bought a house before, if you're
0:53
trying to buy your second house, if maybe you're looking at an investment property, this
0:57
is designed to be super helpful regardless of where you're at in your journey.
1:01
The housing market is shaped by complex cycles and global trends, and BNZ home loan partners
1:06
have access to economic insights, local market trends, and their own expertise to help you
1:11
never get your own property journey with confidence.
1:13
So thank you so much BNZ for helping empower this property podcast.
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This property episode we wanted to speak about foreign property buyers.
1:23
Let's start by talking about if we could dream up any kind of perfect property portfolio
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that was actually not totally outrageous in terms of it could actually be achievable.
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We're allowed to dream big, but I mean not like Jeff Bezos, Taylor Swift, what places
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in the world would you want on property?
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I would love like somewhere in a big city, so like New York London or both.
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I just love the like buzz of big cities, but then I'd also contrastingly want somewhere
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a country house or like really secluded either on an island somewhere, we're like, you
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know, you see someone every kind of second week or yeah in the country where again, pretty
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secluded lots of space just like something so beautiful about being able to escape and
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be in your own space and not engage with anyone in the world.
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But also have the house that has like everything I need there, right?
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You know, like I could work from there if I wanted, I can exercise, I can relax, I can entertain.
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Would you still want to own a New Zealand?
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Yes, because obviously close to family.
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Yeah.
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But I kind of do, so I guess that's kind of, you know, I'm not part of your thing.
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I think that if you own more than one house or if you have the ability to live in different
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parts of the world, to be able to have a sense of home in all of those places is such a
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luxury.
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You know, like we go between the UK and New Zealand and I mean to be fair, I rent here
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even though it feels like home, it's still I'm renting.
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And then when I go home, I have to send my family, which I have to send my family, sorry
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if anyone's listening, loves staying with my family.
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But what I mean is, you know, you don't have any of your stuff, you're in, yeah, it's
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not my family home.
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It's like I've got things in it that are mine, very grateful to them to say that.
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But I think when you, if you travel quite a bit for worker in different parts of the world,
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to be able to have home, as you say in routine, would be so epic.
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And you can see why the celebs have their own houses and places that they probably frequent
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a lot because they probably do travel a lot.
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They do stay in a lot of hotels and on the road and stuff that to have their own home
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in those places is probably quite comforting and like, quite, like it gives me a sense
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of security.
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I think if I could own property, if I had more money than I currently do right now, I would
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love to have a home in New Zealand.
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I'd love to have it.
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I think in the South Island, in Arotown or Queensland or maybe not Queensland, but around
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that area.
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It's quite a great place down there because it's like close to an international airport
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as well.
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So it's like, it's like this weird oasis that you can easily include it, but close to
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international world.
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Yeah.
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Yes.
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I don't know if I'd want a house and where I grew up in Auckland, but I'd love to have
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one in London.
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And I would love to have some, I'd love to have a secluded.
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I think it would be maybe in the country in England.
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Somewhere warm, I think that I could escape to God.
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We can dream a lot, can't we?
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No, God, we can't dream a lot.
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I'm in a vision board this shit, though.
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This was not the point of this podcast, but I am in a vision board, some things because
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I think eventually one day, we're still young, we've got tons of time.
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Hmm.
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So today we're going to chat about why so many wealthy people have lots of property, why
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they keep their money in property.
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It's really interesting because when we first started talking about this, I realised
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I'm one of the, I am a foreign property buyer, which is so weird because when we were
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planning this episode, I was more thinking about the Taylor Swift's, the Taylor Swift's,
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the really, really wealthy, wealthy people buying property in different parts of the world.
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In fact, it was like, you are literally a foreign property buyer, I was like, I was like,
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you're not a New Zealand tax payer anymore, and you've bought a property in a different country
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that you live in, so technically you're a foreign property buyer.
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Let's just chat about this because I think the overarching takeaway really is when you
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have that much money, it's more lifestyle than it is investments, right?
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Yes, I mean, property in general has been good investment because it is like, it's a way
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to diversify away from, if you're investing in companies, whether they be public companies,
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private companies, you can earn income off properties, if you're renting them out, so the
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way to diversify away from just earning one income, but yet the best thing is that people
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just love the tangibility of it.
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And I think there's very few investments, like unless you're buying like arch or something
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that give you that sense of security and tangibility, you can make that investment yours essentially.
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Yeah, I think the main thing that I didn't think about is that you can use property to
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catapult your wealth because you can leverage and borrow money from the bank, which basically
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just magnifies the amount of money that you can make, but wealthy, wealthy people don't
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need to leverage.
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They just buy these properties outright, they're able to go and purchase a property with
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a lot of money, don't need to get a mortgage and are not really that interested in the
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whole leverage situation.
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So when we first spoke about this, I was kind of assuming that all of these people with
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lots of money were buying all these houses because it was such an amazing investment, but
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actually, if you're a billionaire, you're just putting money in places where it's not
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going to go backwards, right?
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Well, you're just in your diversifying, right?
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It's probably such a small portion of your overall wealth, but to us as outsiders looks
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like, well, they're going like they're investing so much in property, which they are, but
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like as a percentage of their overall wealth, probably not.
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Let's use one of these famous people as an example.
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Let's have a taste, was all, taste, visual.
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Okay, actually we should preface this by saying, this is what Google found, right?
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Not necessarily everything, like some of this might not be public information.
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Yeah, or she could have doubled this and we don't know.
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Put it under someone else's name or in a trust or bought her family house for appearance
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or like, you know, there's so many things, but yes, Google has said she's got about eight
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properties across four different states.
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So Tennessee, New York, California and Rhode Island.
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Taylor Swift's mansion in Rhode Island is perhaps the most beautiful.
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It's like a country estate, right?
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On the edge of a cliff, like it's so beautiful.
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You just imagine the amount of people that are probably in like wetsuits down on the ocean
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protecting swimmers from trying to like climb up the wall into the house.
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I know, her security bill and your security bill must be massive, enormous.
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But if you, if you try and Google this on Google Maps, it blows it out.
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Oh, and Google Maps, like, you know, the aerial view, what do you call it?
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Yeah.
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She's, but she's got Tribeca, New York, got Rhode Island, she's got Beverly Hills,
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California and Nashville, Tennessee.
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There's such amazing properties.
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The one in New York, it's this big apartment that she's bought and like, how many was it?
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She bought the two adjacent penthouses and made them all together.
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It's like this beautiful, like, brick and wood, like, really chic apartment.
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Huge, spacious, like, quite beautiful.
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But if you look at all those properties, like to gather there about 150 million,
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that's it, such a blip in her.
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What is her overall?
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Yeah, she's about, she's worth about two billion.
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So 150 million on property.
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What is that?
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What percentage would you, would that be?
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It's like 5%, and to think most of us, our, our houses or our property are our biggest
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asset, like 90% of our overall wealth, if not more.
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And there'd be no mortgages on there, I imagine.
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So imagine if she...
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Imagine tell us if dealing with the bank for a mortgage, can you?
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Imagine tell us if we're walking into a bank in your bank teller.
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She's like, kind of like, to get a mortgage.
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Can I please see receipts of your earnings?
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She's like, here's by the bank, isn't she?
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Yeah, let me speak to the manager.
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But if you take that 150 million right, and say she did want to, like, double down and
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invest in property, she could leverage that borrow against 150 by, like, another 10
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properties, 20 properties, you know, like, wealth breeds wealth.
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For me, it feels almost like looking at a monopoly board and just buying all of May fair and
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buying all this stuff just to get rid of your cash, not really trying to make a whole
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lot of money, just not trying to go backwards, you know?
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You wouldn't even...
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You wouldn't not to do with it.
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There'd be so many places you could put your money, you should say, whack a few properties
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here and there.
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Like, the fact that all of hers are in America as well makes me think that they're more lifestyle
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purchases than investments.
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Yeah.
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Whereas the average amount is obviously not buying a life millions of lifestyle properties.
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But I mean, all of them from what Google says have made, made bank.
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Really?
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She bought the place in Rhode Island for 18 million in 2013, and it's now over 30 million.
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Oh, wow.
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Yeah, you're right.
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It's probably as a lifestyle thing, but, you know, I guess the cherry on top is that
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property does go up in value when you buy in areas that are in high demand.
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Yes, she's probably not Airbnb being them out.
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You know, she doesn't need that extra cash, which I'm kind of like Taylor, let me in there
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and I could just squeeze a bit more and come for you.
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I bet you did a few of the financial planner for Taylor's worth, but I think this could
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be your, you know, after the curve, you go on to be a celebrity wealth manager.
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But I know.
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Just be your PA.
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I know you've got a hundred percent million in property, but like we could leverage that
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and we could backbuild this incredible property for like, what I think I am.
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How fun would that be?
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I'm just going to put five million here.
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I'll just put 17 million here.
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Like sort of like fun.
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Yeah, managing.
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She would have a wealth manager.
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Oh, two for me.
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Yeah.
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But the average person, the reason that investing in property is such a great idea is
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because it's a really good wealth builder.
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Obviously, whatever that amount is like buying something for 18 million and going to 30 million
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is one thing.
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Yes.
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But people talk about the property ladder for a reason because once you're on it, it's
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really easy to borrow against and go again, borrow against, to go again.
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Can we chat about why then having your money in property?
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Maybe it's just an overarching explanation of leverage and why property for so long has
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been the best place for us to keep our money.
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We're a very good place to keep our money.
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We know the stock markets also go, but like the leverage piece makes this particular asset
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magic.
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Yes.
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I guess there's like an underlying demand, right?
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Like a lot of people, majority of people do aspire to own their own home.
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Like, or, you know, we're not talking about multiple homes here.
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We're just saying, you know, own your own home is kind of, it gives security.
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It is, it's like ingrained in, you know, DNA of a lot of Australian New Zealand,
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even the UK.
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So that kind of puts, I guess it's like underlying demand that like people always want to own
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their own property.
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That being said, that creates this level of demand in the property market, whereas if
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you think about investing in stocks, like a lot of people don't even know what a stock
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is or don't think about investing in the stock market at all.
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But those people probably have thought about investing in the property market because the
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parents have their parents, parents and their parents, parents.
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So there's like this generational thing about owning your own property, which creates
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this natural demand and attractiveness.
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And therefore, yeah, there's kind of been this like aspirational, I guess, tick of financial
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success, which is when you own your own property.
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And then yes, once you do that, you can then borrow against that and buy more properties
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and more properties and more properties.
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So if you don't have the ability to save enough for a deposit, then it is very hard to
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create wealth and property because you do need that initial step to get onto the property
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ladder.
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And this is why when people have like, help from parents and all of that, it's like,
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it's frustrating because that just adds to demand and adds to price, house prices going
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up and up and up.
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And unfortunately, leaves a lot of people unable to get larger deposits to get on their property
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ladder.
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The overarching thing here is that property people, it's also a functional asset, right?
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It's not like you buy your Apple shares and then you ride to work on them.
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Do you know what I mean?
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Or like you buy your Amazon shares and you have a really great nap in your study.
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Do you know what I mean?
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Like it's not a tangible thing that you use, whereas buying a house or even buying a piece
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of art, it's on the wall, it's something that you enjoy, there's like a functionality
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to it, a vintage car, like cash, you go and spend and use it.
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And banks will lend against that, right?
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Because they know.
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They can see it, feel it, touch it.
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Yeah.
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And the prices don't go up and down and sideways that they do with the stock markets.
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If you went to the bank and said, look, I've got $100,000 invested in the stock market.
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Can you lend, lend me money against that in terms of can I borrow money off you?
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But with that as collateral, that is like what would pay you back with.
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I'd be like, well, no, because tomorrow that could be $20,000.
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Whereas over time, the property market has done very well, particularly in countries like
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Australia and New Zealand.
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And the banks can see that and they model that and they see, okay, cool.
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If you want to buy a million dollar house, you've got 200 grand as a deposit, like, of
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course, we'll then do the rest.
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It's much easier to borrow money on an asset that doesn't jump around.
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Can we chat about, because one of the things you just mentioned before was like, it's really
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hard for a lot of people to get that first deposit together.
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Have you done, I asked you to, so I hope you have, research on how much the different
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average salaries are across the world.
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And then how much of a deposit, I can't remember how we were figuring that out, but something
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about like trying to compare what people are able to earn versus how hard it is to get
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on the property later, because around the world's quite different.
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Yes, so that's what we call the kind of the price to income ratio.
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So it's all about how expensive a house is versus the income in those countries or regions.
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And so house prices vary in cities versus regions.
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So if we just look at Auckland, it's like, you know, this is the capital of New Zealand.
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No, it's not.
15:39
Wow.
15:40
Wow.
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It's not the capital of New Zealand.
15:43
Could you say that, ma'am, and it's like, my geography teacher said that I wouldn't
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amount to anything, but here I am at the Ival Tower, and it's like the Egyptian pyramids.
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Climb right there.
15:56
Yeah, so look, Auckland's absolutely not the capital, it's actually Wellington.
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You know, there's probably been like an ongoing feud about that, really, because Auckland's
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the biggest...
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We think of ourselves as the capital.
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Yeah, people in Wellington must be listening like, I should bring like a dog or a dog.
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You know, we pay the most taxes, and we...
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Okay, wait.
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So Auckland is kind of like the London of the UK.
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It's the biggest financial hub, would we say, oh my God, I'm taking myself such a long time.
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I guess non-capital city.
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Yeah, yeah.
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It's just got the biggest most populated city in New Zealand.
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Thank you so much.
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Should be the capital.
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Anyway, the price to income ratio there is about eight times.
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So house prices are eight times the average income in New Zealand.
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Okay.
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I mean, the average income in New Zealand is so low as well, but property prices are so high.
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But if you think about that was five times in like 2000.
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So when people are like, it's not expensive, it's like, well, they actually have their
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affordability, has got harder and harder and harder.
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Yeah.
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Like versus...
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Yeah, and I'm sure if you weren't even...
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Even went back...
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Like 30 years.
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Oh, that is 30.
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Nearly.
17:11
Oh.
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2025.
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What did you say?
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I said, and I'm sure if you went back like 30 years, but that's pretty much 30 years.
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Oh my God, you were so old.
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I remembered the 2000s.
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Why 2K?
17:24
And I remember the world was ending.
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Oh, I was in a chapel service that I could not stop laughing.
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I just had to get so badly.
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I just remembered.
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No, I don't think anything to do with the world anymore.
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I think someone just made me laugh and you know, and you're like, in so much trouble
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in everyone staring at you and you just cannot stop laughing.
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It's so funny to think that that's what was consuming the world.
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The clocks had to go from 1,999 to 2000 and we thought the world was going to end and
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now look at us.
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AI buzzing around doing...
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But we still think the world's going to end.
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So perhaps there's something to learn here and that every generation or every 30 years
17:56
or probably just constantly everyone's panicking.
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I'm like, so we are those naysayers that we're like naysayers.
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The world's ending, you know, probably with the flat earth as someone.
18:05
They might still be eating baked beans in a dungeon somewhere.
18:07
Yeah, you're waiting for the world to end.
18:08
I'm just getting prunier and prunier.
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Oh God.
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25 years later, they're like, some day now.
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Anyway.
18:15
Yeah, 30 years before that.
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The 70s.
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The 70s.
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Yeah, probably the 70s I reckon it would have been even lower.
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Way lower.
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More affordable.
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London is about the same as Auckland.
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And do you think it's just like people are paid relative to how expensive it was to
18:28
there, which is relative to how expensive the housing is?
18:31
Yeah.
18:32
Yeah, it's just a good indication to know, you know, like you need to kind of compare it
18:35
to something because like a 300,000 pound house versus a one million dollar house in New
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Zealand.
18:42
Like, is that expensive or not?
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So like comparing it to incomes is a really good way to do that.
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Sydney is about 12 times.
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So I would look at that and go, Sydney is super unaffordable.
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Lastly, in Hong Kong, like Hong Kong is no one for its outrageous property market.
18:58
Like people don't even try to buy houses there because it's so outrageous.
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And that market is 20 times the income.
19:06
Yeah.
19:07
Only like the wealthy, wealthy, cremational, cremational people own houses in Hong Kong.
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I didn't realise that.
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So buying if you were earning or you had heaps of money, buying in a place at Hong Kong
19:17
would be quite clever.
19:19
Well, I don't know if it would be clever, like, oh, because it's not necessarily the
19:22
race in which it's going to go up.
19:23
No, it just means there affordability, right?
19:25
Like if we were looking at the best place to buy, you would be looking at growth rates
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over time.
19:31
What are the biggest growth markets in the world for like the most valuable places to buy
19:36
property?
19:37
New Zealand, the starters.
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We don't have a capital gains tax.
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So it's being quite attractive.
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We don't have, I mean, we've introduced some new regulation, but like, we don't have
19:47
capital gains tax on a lot of assets, whether it's shares, whether it's your first home.
19:53
And capital gains tax is, I can see, yeah, it produces like that, I can explain.
19:59
Capital gains tax as you pay a tax on the game or the like, the profit that you've made.
20:04
So like capital is money, kind of means money and gain is like what you're, yeah, increase.
20:11
So the like amount of money that you've gained, you get taxed on it.
20:15
So it's kind of like the age of money, profit, payment, yeah, but it's also if you think
20:19
about, you know, your tax on your salary, that's money coming into your account in the
20:23
same way that you would get money from your investments, you get taxed on them.
20:26
So, but in New Zealand, we don't have that.
20:28
And we don't have stamp duty either, which a lot of other countries, a lot of other big
20:32
cities do.
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And that's when you pay, it's kind of like a transaction fee.
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So if you sell your property, the buyer pays a stamp duty to the government, which is
20:42
essentially like a transaction fee, which can be, I mean, it differs in different countries,
20:47
but it can be quite.
20:48
So do you get like capital gains in the UK and stamp duty?
20:53
Not on your primary residence, yeah.
20:56
Thank you.
20:57
So, yeah.
20:58
But you pay tax on shares and on like interest on money in the bank in the UK, whereas
21:03
you don't in New Zealand.
21:04
So, New Zealand is pretty favorable in terms of overall investments, whether it be term
21:09
deposits, shares, properties.
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We're like, it's like the cowboy, the wild west in New Zealand, we just can make so much
21:16
money on things.
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But also, it's such a hard thing for a politician to bring in, right?
21:20
Because if you're like, I'm going to bring in capital gains tax, everyone's like, surely
21:23
they just do it though, like at the start of their four year term and then people forget
21:27
about it.
21:28
But then you don't get re-reupointed.
21:29
But you might, if you do at the start, then you get re-appointed for it later.
21:32
I mean, in a country like New Zealand, where everyone is like property property property,
21:35
you get to be egged until the end of time.
21:38
Yeah, yeah, it would be like saying, women can't buy property or something, you know?
21:42
It would help the economy though, wouldn't it?
21:44
Ooh, good question.
21:46
Well, that's the first time you've ever given me that compliment.
21:49
I think it would help in the short term, because you're supposed to get a tax boost, which
21:53
would be able to be spent on like healthcare education and therefore you wouldn't have
21:57
to increase income tax rates, but it would impact the property market in terms of the
22:05
prices, because people wouldn't want to buy in New Zealand, because there'd be a tax
22:08
and now there are additional tax on that.
22:11
So everyone's house prices wouldn't grow as much, or could potentially go down.
22:16
And therefore that has a negative impact, like if you are sitting there thinking that
22:18
your house that you own is worth a million dollars and you, you know, that keeps growing
22:24
and growing and growing.
22:25
Like you feel, it's like the wealth effect, you feel more confident, you can then go
22:28
on borrow and you can invest in other things and, you know, whereas if your house price
22:32
is going like down and down, down, you're like, oh gosh, I might have to, I might have
22:36
to sell my property because I can't make the payments and I don't know, it's just kind
22:39
of short term, I probably could have a positive impact, but I think long term it would be
22:44
like detrimental.
22:45
But on that, the thing that has been most detrimental in New Zealand and in the UK is taxes
22:54
preventing foreign buyers.
22:57
So this is recently in New Zealand, they prevented foreigners buying property in New Zealand.
23:04
This was exactly why I want to show this episode because I feel like there's so much rhetoric
23:09
and conversation and complaining around either wealthy or foreign people buying in countries
23:16
where they don't live.
23:17
If everyone gets so annoyed about it and I don't understand why, it's an easy group of
23:21
people to blame, right?
23:22
It's like staying in your lane, go buy a property in your own country, don't come here and
23:26
buy it in ours when, you know, a lot of us can't even afford to buy our own houses
23:30
and you've got these wealthy foreigners buying up property, which pushes overall prices
23:36
up.
23:37
It's not just the wealthy end of town because it always filters down and so an easy way
23:42
to satisfy the people or get votes or you know, get people on your side is to say, look,
23:52
we're going to make it harder or we're going to completely remove the ability for foreigners
23:56
to buy property.
23:57
But my argument is you're a foreigner buying property, but you're buying it in your
24:03
own property.
24:04
You're a citizen of New Zealand.
24:07
How cool is that though?
24:08
Can we just pause for a moment?
24:10
I honestly just always thought foreigners buying property is, you know, the top one person
24:15
to wealth.
24:16
I'm very proud of that.
24:17
So it's kind of like what you define as a foreigner, right?
24:21
Yes, because that's the thing.
24:23
Because you're not.
24:24
Well, it's really.
24:25
It's not your home.
24:26
You live here.
24:27
You pay tax here.
24:28
It's a social.
24:29
You live here.
24:30
Okay.
24:31
But you could argue, well, I don't have a passport, I don't want to visa, I've got a
24:36
passport from New Zealand.
24:37
I'm New Zealand citizen.
24:38
I mean, I've got a passport.
24:39
Thank you.
24:40
That was my argument.
24:41
Yeah.
24:42
I have a passport.
24:43
That's my home.
24:44
That's my home.
24:45
Even though I just said I have no home and I have to stay with family.
24:46
Look at that.
24:47
But I think of myself, even though I think of the UK as home now, New Zealand, I will
24:53
what?
24:54
If you went to a sports game and it was England versus New Zealand, it's so funny you
24:56
bring this up.
24:57
Because I did go to the New Zealand England rugby game in the weekend.
25:01
What do you mean?
25:02
Did you?
25:03
I did.
25:04
I didn't go to the actual game.
25:05
I went to a pub to watch the game.
25:08
Different babyuggers.
25:09
I watched it from a really sticky pub, okay?
25:14
Anyway, I was there with someone who was British and I kind of wanted Britain to win and
25:18
I was sitting there with other Kiwis and screaming wearing their all blacks gear.
25:23
And for some reason, I was kind of like, the all blacks always win.
25:27
Like we've got to sometimes, I'm just, I'm just get a bit bored.
25:30
I'm like, oh, we won again, you know, like it's sometimes, it's got to keep things
25:33
bit spicy.
25:34
Anyway, so I was sort of secretly going for England.
25:36
Then when England won, I kind of started, is that the, make me the worst New Zealander
25:40
of all time?
25:41
I fully forgot what this whole episode was about.
25:43
Yeah.
25:44
Where do we, what we about to say also what?
25:45
Yeah.
25:46
No, I forgot where to.
25:47
Oh, we were talking about foreign property buyers and how it impacts the overarching economy,
25:53
why they tax or don't tax or like try, what they try and do to basically make the people
25:58
feel better.
26:00
Because it is so many people get absolutely fuming about the fact that, and it's really
26:06
weird.
26:07
Because if you look at the people who would buy property overseas, not me, people that
26:11
are buying, or maybe they are annoyed at me too, are they annoyed at me?
26:14
Well, there's a house that a really needy family could afford as the roof over their
26:21
heads.
26:22
But no one's at the auction.
26:23
Yeah, but it doesn't mean like, if no one's at the auction, they lower the price.
26:27
And then someone, you know, the family might come out of the woodwork and be able to
26:30
afford it.
26:31
But no, Sophie Horat, the foreign buyer, snapped it up.
26:33
Right.
26:34
Doesn't even live in it.
26:35
Doesn't contribute to the community.
26:36
Doesn't it?
26:37
Oh, okay.
26:38
I see where this is going.
26:39
Yeah.
26:40
I see where this is going.
26:41
I was doing it up to and then rented it out.
26:42
Oh, yeah.
26:43
So there's a lovely family in there and a lovely house that I've, you know, added a liquor
26:46
paint to.
26:47
Okay.
26:48
But I guess, this is what I mean though, it's like every situation is so different,
26:51
right?
26:52
It's easy to blame foreigners for, you know, unaffortability of houses or, you know, a
26:58
property market that's just run away and is too expensive now for the citizens and
27:03
residents.
27:04
So people just need someone to blame totally and you're right, you know, nine times
27:10
out of ten, the foreign buyers are very wealthy people that probably have houses in multiple
27:16
cities around the world.
27:17
They don't use them, they're not money makers, you know, they're very much placeholders
27:23
for cash, which means that's a property that someone in the country who is not a foreigner
27:30
cannot purchase.
27:31
Yeah, it's very easy to blame them and yes, you know, when they do purchase houses, that's
27:35
money that goes into the economy that helps them hear like jobs and, you know, productivity
27:40
and all of that.
27:41
And very overarching property market up in terms of value.
27:44
And the reason people usually want to buy property in a country or a city is because
27:48
it's doing well, because there's demand, because people want to live there, because people
27:52
want to move there.
27:54
So to remove that, like we've just seen it happen in New Zealand, New Zealand's now in
28:00
a recession.
28:01
Yes, it's not the product of explicitly that change, but that change has led to a lot of
28:07
investment in property going elsewhere in the world.
28:10
But also, if you think about someone buying a $5 million property in Arotown or whatever
28:15
and they're an international buyer, the people that that's pricing out, isn't it just
28:20
that top rung, or is it everyone gets priced out at every single level?
28:24
But that person that sold their $5 million house, right?
28:27
They thought they were getting $5 million to go buy, maybe another house, they've now
28:31
got $8 million to go buy another house, so they might buy two houses.
28:34
And then those people below them that they buy the two houses, so for $4 million, they
28:39
thought they were going to get $2 million for the house, now they've got $4 million.
28:41
Do you know what I mean?
28:42
Does that make sense?
28:43
It flows down.
28:44
It flows down.
28:45
If there's increased demand, anywhere in that letter, it just flows down.
28:51
Whereas if you're selling your property, there's none of those team foreign buyers are there.
28:55
You're like, God, okay, I thought I could get $5, I'm going to have to reduce this to
28:58
$3 million.
28:59
And then all of a sudden, there's a buyer.
29:00
$3 million.
29:01
And you need that regardless of what level you're selling your house because the overarching
29:04
property market is more buoyant when there's international buyers because there's more
29:09
money within it to mean that everyone's house prices are valued higher.
29:13
It's better to think about supply and demand.
29:16
If you own a house and you're trying to sell, so if you're on the property later and you're
29:20
trying to sell, you want as much demand as possible, whether that's citizens, whether it's
29:24
foreigners, whoever it is, whereas if you're not on the property market, you want as little
29:30
demand as possible.
29:31
So you're like, yeah, go away foreign buyers because it massively impacts people that don't
29:36
own any property.
29:37
So actually, the argument here, I guess, is that while foreign buyers or foreign investment
29:42
can really boost the property market, which can positively flow into the economy and
29:47
how healthy the overarching country it feels like economically, it gets increasingly harder
29:54
and harder and harder for people that don't have money, it's that wealth disparity, right?
29:59
It's the richer get richer and people who have lots of property benefit from that, but
30:04
the ones that are really left behind are those that can't even get something at all.
30:08
And my ways to fix it are for the government to focus on, okay, how do we make it more
30:13
attractive for first-time buyers or help them?
30:19
Help them get on the property later or get those, how do we help those people that genuinely
30:24
want to have a roof over their heads and buy property, actually buy property, while also
30:30
not discouraging international buyers and like we talked about price income ratios and
30:38
in London and Auckland, it's about eight times, the way that you make a more attractive
30:43
property market and easier for people to buy property is it's not just property prices,
30:49
it's higher incomes.
30:50
You can't give higher incomes if there's not enough money flowing into the economy.
30:53
But it's not just property that flows in, that makes more money coming into the economy.
30:57
You can't just turn people's, no, but you can increase minimum wages.
31:03
You can create a more conducive economy for companies to do business, for startups, like
31:12
all of that.
31:13
There's so much in it that you can.
31:14
Because I guess people don't think of New Zealand as a startup hub or a place to go
31:18
to a startup business, whereas there's so many, America is amazing for that and that's
31:25
why you look at the S&P 500 or you look at the world index and so many of the top companies
31:31
have been founded and grown in America.
31:33
It's just like everything's so interrelated, right?
31:35
Even in the UK, they created the increased taxes for wealthy, not property, but just on
31:41
the income.
31:44
Then that means, okay, well, why would I do business in the UK when I get tax more
31:49
now?
31:50
I'm going to take my business, take my family, sell my property and go live in a country
31:56
where tax is a more attractive.
31:58
So it wasn't a property initiative in terms of a property tax.
32:03
It was an income or like a wealth tax that inadvertently impacted the property market
32:08
and now we're seeing the property market not do well.
32:10
So it's like, there's so much.
32:13
Can you imagine being in the negotiation room with people that have different ideas
32:17
of what labor is to pull?
32:18
I always think of this.
32:19
I think of a whole lot of people sitting in a room and I don't know, one little minion
32:24
is like, look, we need to increase income tax and then someone goes, no, no, that'll
32:30
affect me.
32:31
No, no, that'll affect me.
32:32
No, no, no, no, I'll go down.
32:33
I'll go up and you're just like, okay, what about if we increase minimum wage?
32:37
And then you just go, okay, I give up.
32:43
It's like a puzzle.
32:45
It takes such a puzzle.
32:46
It's like we're going to move the, it's like interest rates and inflation, right?
32:49
It's like, okay, we're going to increase interest rates.
32:50
Oh, no, no, no, no, that's going to impact the fact that people get excited.
32:54
I don't think so.
32:56
Oh shit, shit.
32:57
Unwind, unwind, too late.
32:58
Oh gosh, you know, like in some of them take so long to play out, right?
33:01
It's not just like instantaneously.
33:03
I think other ways not just income is like removing stamp duty.
33:06
Like that can make a property market more attractive or no stamp duty on.
33:10
God, I burst house into buyer house if they had no stamp duty.
33:13
I feel really put off the UK property market because of that.
33:16
Well, it's just like an extra lump sum on your deposit, right?
33:18
Yeah.
33:19
But it also means that people don't flip houses because they're sending cars.
33:23
Yeah, that's true.
33:24
But then if you send the state of the houses, like wouldn't mind if people were flipping
33:26
a few more.
33:27
I know.
33:28
Yeah.
33:29
You should see the state of the painting inside my house all these shit.
33:32
But when I first moved down, I was like, I am painting every wall.
33:35
I am doing this.
33:36
And the usage is so used to it.
33:38
There is like a light falling out of my bathroom over my head, or I'm like, that could honestly
33:42
fall on me at any point in time.
33:43
And you're just like it.
33:44
Yeah.
33:45
Landlords probably.
33:46
Landlords probably.
33:47
I'm like, could someone please flip this?
33:48
Yeah.
33:49
Can you please do it or not?
33:50
Should we look at Camille Kay or Rianna's property portfolio?
33:53
Yeah.
33:54
I mean, Cam Kardashian, her biggest property asset is in the hills in California.
33:59
So this is the house she bought with her now ex-husband Kanye West.
34:04
So it's very, very minimalist, which I would not have expected.
34:08
So basically, where is this house and how much is it worth?
34:11
So this is in the head and hills in California.
34:13
She bought it in 2014 for $20 million, US.
34:16
And it's now expected to be about $60 million.
34:19
So.
34:20
That's wild.
34:21
Yeah.
34:22
And she's also got a house in Malibu in California, which is she bought a few years ago
34:28
for $70 million.
34:29
Are these the sinks that you wanted to get in your house?
34:32
Yes.
34:33
I'll be telling a story about that.
34:35
I was renovating my house shortly after Cam Kardashian had renovated it.
34:40
They kept a slightly different budget, but was trying to go for the same thing.
34:44
And I saw her bathroom sinks and I was like, genius, there's like, it's weird.
34:49
It's like, it just slopes.
34:50
There's like, no, it slopes into a little slit like there's, there's no basin.
34:55
Like it's, it's incredible.
34:56
And I remember saying to the builder, I was like, so you know, is this possible?
35:02
And he kind of just laughed.
35:03
Like I'm showing him Kim Kardashian's bathroom, but anyway, you've gone with classic, classic
35:09
kind of silver tin, big bath sink still, not similar at all, but your hot water
35:16
check is lovely though.
35:17
Yes.
35:18
So sorry, what are the houses property as she had and what percentage of her wealth is
35:21
her property?
35:22
So she has about 100 million in property, her net worth is about 1.9 billion.
35:26
So similar to Taylor, yeah.
35:28
So we look at this and go, whoa, but actually it's tiny bit.
35:32
Like they should look at us and go, whoa, yeah, yeah, we're a person in property.
35:37
But we are though, we're quite, it's quite a bit, it's been, it's been, it's been
35:40
to jub our wealth.
35:41
Can we quickly also look at reanners?
35:43
Really.
35:44
They've all got really similar amounts in this property, don't they?
35:47
Yeah, either Google's doing us a dirty or, yeah, you're so right, maybe I can't
35:53
be bothered.
35:54
Chatchy PT is taking over my search engine like I'm just going to make them all, they've
35:57
all got five properties.
35:58
Yeah.
35:59
Yeah.
36:01
Yeah.
36:02
Because it is.
36:03
It's kind of the same, right?
36:04
So reanners property portfolio is about 80 to 100 million as well.
36:08
So she's got two in L.A. 2000 L.A. and one in Barbados.
36:14
Can we, before we wrap this up, talk about the most expensive slash lucrative places in
36:19
the world to own property?
36:20
Where's the creme de la creme, the most expensive houses in the world?
36:23
Well, if we look at like the definition of like most lucrative, if we see like we're
36:27
in house prices have been the strongest, where there's like, I guess strong rental markets
36:33
prestige.
36:34
So this is a combination of all things is New Zealand and Australia actually pretty out
36:39
there just because of like the strength in our property prices, but also New York because
36:45
of how well the property market has done there historically.
36:49
But are you saying that a New Zealand property is worth more than in the heart of Manhattan
36:55
a big, amazing house like the most attractive property market in my opinion is one that's
37:03
growing.
37:04
It's not the most expensive, whereas I think you're like the most expensive means that it's
37:10
the best and it's like, no, no, no, it depends what you write.
37:12
I think I was more meaning not the potential, not the growth rate, but the most expensive
37:18
properties.
37:19
The most expensive properties.
37:21
Dubai, Monaco, Hong Kong, New York.
37:24
Oh, well, okay, hey, if you're listening to this episode and you think, I would love
37:29
to learn more about property and I want to hear about this or if you've got any ideas
37:33
for stuff that you would like to learn about with regards to the property market.
37:36
Let us know.
37:37
That's a particular asset.
37:38
Please let us know.
37:39
Comment what you're listening to the podcast and that's it.
37:43
See you next week.
37:45
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39:19
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