New Zealand - The Good, The Bad and The Ugly.

[davetapson]

The bad...

 

Yesterday the government announced public sector pay freezes (in various degrees) for the next 3 years.

 

That makes 4 years on the trot, as 2020 increases were also scrapped due to covid.

 

Whilst I recognise that one is fortunate to have steady employment, this is a slap in the face to many that have worked so hard (and on the front lines), are already paid less than their private sector counterparts.

 

Not a great way to convince people to go into essential services like law enforcement, healthcare, emergency services, or education.

 

It's like they saw the massive debt that covid recovery packages left and thought, let's screw over our own employees (who kept the country running) to try fix this.

 

[Gripe over]

I hope like hell that any indication the politicians are going to raise their salaries over this time will be met with righteous indignation and suitable vengeance.

 

Edited May 6, 2021 by davetapson

[Wayne Potgieter]

The bad...

 

Yesterday the government announced public sector pay freezes (in various degrees) for the next 3 years.

 

That makes 4 years on the trot, as 2020 increases were also scrapped due to covid.

 

Whilst I recognise that one is fortunate to have steady employment, this is a slap in the face to many that have worked so hard (and on the front lines), are already paid less than their private sector counterparts.

 

Not a great way to convince people to go into essential services like law enforcement, healthcare, emergency services, or education.

 

It's like they saw the massive debt that covid recovery packages left and thought, let's screw over our own employees (who kept the country running) to try fix this.

 

[Gripe over]

Whilst this is terrible, the private sector is not much better - both suck!

 

12 months ago, I requested an increase. I had been with the company for 24 months, and made a career change to get there, so I was undervalued at the time of hire as I was high risk. I completely understood that and was grateful for the chance to change my career.

 

Fast forward and I am now more experienced, have demonstrated success and a few people have been hired (and subsequently left) and I was used as the internal benchmark for success. So I started a conversation to relook at my salary structure.

 

12 months has past and I am still having that conversation. I love EVERYTHING else about my job, so leaving is not something I really want to consider, but I am interested in increasing my earnings to (at the very least) keep up with the increasing cost of living.

 

At some point, the value balance will change and I will no doubt seek greener pastures, but for now, I am happy to be patient. But the point is that increases are also rare/non existent in the private sector. It seems the easiest way to increase salary is to move jobs, I suppose that easier in the private sector than the public sector...

[davetapson]

Ha - I got $250. Per annum.

 

No, not kidding.

[davetapson]

.

Fkn Tapatwak.

Edited May 6, 2021 by davetapson

[rad006]

At least inflation is controlled better in NZ than SA. Some industries are printing money, others just surviving but as you say, us hard workers deserve to be compensated I'm tired of sacrificing...

[WrightJnr]

I played golf this past Monday here in Dubai and two blokes in the four ball were New Zealander’s. Top chaps I tell you, if the majority of the nation are like these fellas you all are very lucky.

 

I work with a couple Kiwi’s too, also awesome personalities.

[patches]

Whilst this is terrible, the private sector is not much better - both suck!

 

12 months ago, I requested an increase. I had been with the company for 24 months, and made a career change to get there, so I was undervalued at the time of hire as I was high risk. I completely understood that and was grateful for the chance to change my career.

 

Fast forward and I am now more experienced, have demonstrated success and a few people have been hired (and subsequently left) and I was used as the internal benchmark for success. So I started a conversation to relook at my salary structure.

 

12 months has past and I am still having that conversation. I love EVERYTHING else about my job, so leaving is not something I really want to consider, but I am interested in increasing my earnings to (at the very least) keep up with the increasing cost of living.

 

At some point, the value balance will change and I will no doubt seek greener pastures, but for now, I am happy to be patient. But the point is that increases are also rare/non existent in the private sector. It seems the easiest way to increase salary is to move jobs, I suppose that easier in the private sector than the public sector...

 

Oh I completely agree, the workforce has been hit hard in both public and private sectors and whilst pay increases are unlikely in either. If they said "no increases this year, we'll review next" it would be more understandable. But to come out with a blanket 3yrs (on top of the 1yr prior) was a bit of a punch in the gut.

 

Employees with private sector equivalents (especially engineers and others in the construction industry) are in high demand and the private sector pays better. Soon enough those 5 extra days of public servant leave and the "ideals of being able to shape the industry" will be cast by the wayside in favour of competitive pay packages that enable one to keep up with the cost of living. I wouldn't be surprised if there's an exodus in the near future.

 

I feel for those in the emergency services or education who have little other option with limited private sector equivalencies. 

[Wayne Potgieter]

Oh I completely agree, the workforce has been hit hard in both public and private sectors and whilst pay increases are unlikely in either. If they said "no increases this year, we'll review next" it would be more understandable. But to come out with a blanket 3yrs (on top of the 1yr prior) was a bit of a punch in the gut.

 

Employees with private sector equivalents (especially engineers and others in the construction industry) are in high demand and the private sector pays better. Soon enough those 5 extra days of public servant leave and the "ideals of being able to shape the industry" will be cast by the wayside in favour of competitive pay packages that enable one to keep up with the cost of living. I wouldn't be surprised if there's an exodus in the near future.

 

I feel for those in the emergency services or education who have little other option with limited private sector equivalencies.

you are 100% correct.

 

I also think some organisations are using it as a convenient excuse as well.

[davetapson]

Just going back to the 'property here is so expensive moan moan' thing...

 

We've got a couple of English friends and school parent acquaintances (i.e. from England, not souties) and when I discuss properties and what they did when they emigrated, they never much complain about prices.  Like for like, they seem to do ok.

I think part of the problem is that the ZAR/SA property has become so devalued in real terms that Saffas can't play in the realms of those with hard cash to spend, and that shapes our view here.

Which is not to say it's not expensive, but not as expensive as it feels to Saffas.

Another thing - I seem to remember when Rich Dad Poor Dad was taking off (late 1990's?), (i.e. buy property to make money, leverage them on each other to buy more property) NZ had gone great guns on the concept, and that had driven property prices up even then.  I suspect that what we have now is to some extent (I suspect largely) based on that.  

[patches]

Just going back to the 'property here is so expensive moan moan' thing...

 

We've got a couple of English friends and school parent acquaintances (i.e. from England, not souties) and when I discuss properties and what they did when they emigrated, they never much complain about prices.  Like for like, they seem to do ok.

 

I think part of the problem is that the ZAR/SA property has become so devalued in real terms that Saffas can't play in the realms of those with hard cash to spend, and that shapes our view here.

 

Which is not to say it's not expensive, but not as expensive as it feels to Saffas.

 

Another thing - I seem to remember when Rich Dad Poor Dad was taking off (late 1990's?), (i.e. buy property to make money, leverage them on each other to buy more property) NZ had gone great guns on the concept, and that had driven property prices up even then.  I suspect that what we have now is to some extent (I suspect largely) based on that.  

 

Definitely a factor. I remember the amazing townhouse my boss in SA had. Dunkeld West, new build with all the luxuries. He paid around R5m off plan (circa 2010/2011). It seemed insane! He sold in 2016 for about R5.5m. Again, in SA a property THAT nice and "expensive" seemed like it was only for the big wigs. (even in 2016 R5.5m wouldn't get you much in Auckland)

 

Then (as mentioned previously) friends-of-friends in Perth earning a decent wicket (talking around $300k+ between a couple) were saying that they couldn't possibly afford or conceive spending $600k+ on a house in Western Aus. The Aucklanders in the group laughed at them.

 

And then there's me... a Saffer who is horrified by Auckland house prices (even just NZ in general), but partnered to an Aussie who grew up in Sydney's Northern Suburbs, so for her they "seem cheap"

[davetapson]

PSA for those that brought LG tv's with them and can't get Netflix / Disney+ / TVNZ on demand etc.

(We had this discussion before...)

Borrowed a Logitech Harmony One IR contoller from a friend - you set up the controller for your TV, it then knows how to get into the service menu - pin is 0413, set area code to 4833. 

Done.

[patches]

Anyone going to Rotorua on Saturday? (shot in the dark)

I foolishly got caught up in the hype of a TradeMe auction and won an item that is "Pick-up Only" ????

Happy to contribute towards fuel for anyone that is able to assist.

[Steven Knoetze (sk27)]

 

Anyone going to Rotorua on Saturday? (shot in the dark)

I foolishly got caught up in the hype of a TradeMe auction and won an item that is "Pick-up Only" ????

Happy to contribute towards fuel for anyone that is able to assist.

If I was onshore I would join;(

[patches]

I was running some housing numbers again the other day (as the housing crisis is always a hot topic in NZ). More numbers around that move from 1 property to 2.

Here's what the scenario is based on

• 1st Property Purchase Price of $1,000,000 (Low for Auckland, but high for most other places)
• 20% deposit and $800,000 loan amount
• 3.5% of principle paid off each year
• 40% deposit requirement for 2nd property, and based on equity only (dangerous as that is, it's all the rage in NZ)
• Based on purchase of 2nd property at equal value to 1st.
• Serviceability of 2nd mortgage not taken into account (as it varies based on income, intent for 2nd property, ie rental, etc).

Here's what my limited financial acumen managed to deduce ????

At 2.5% Growth PA (very conservative)

One would be able to leverage to buy a similar value house (subjected to the same growth) after approx 9yrs.

At 5% Growth PA (fairly conservative)

One would be able to leverage to buy a similar value house (subjected to the same growth) around approx 6.5yrs.

At 7.5% Growth PA

One would be able to leverage to buy a similar value house (subjected to the same growth) around approx 5yrs.

At 10% Growth PA

One would be able to leverage to buy a similar value house (subjected to the same growth) around a little after 4yrs.

At 12.5% Growth PA (not far off in current climate)

One would be able to leverage to buy a similar value house (subjected to the same growth) around a little after 3.5yrs.

I know the NZ property ladder and the lucrativeness of multiple property ownership is no secret. And the old saying "it takes money to make money" always rings true.

I just thought it was interesting to visualise how feasible/possible it really is. It's crazy and just begging for a capital gains tax ????

[Bundu Ric]

27 minutes ago, BaGearA said:

I wish I was smart enough to understand what you said here 

I liked the colours though.... ????

[hayleyearth]

23 hours ago, patches said:

I was running some housing numbers again the other day (as the housing crisis is always a hot topic in NZ). More numbers around that move from 1 property to 2.

Here's what the scenario is based on

• 1st Property Purchase Price of $1,000,000 (Low for Auckland, but high for most other places)
• 20% deposit and $800,000 loan amount
• 3.5% of principle paid off each year
• 40% deposit requirement for 2nd property, and based on equity only (dangerous as that is, it's all the rage in NZ)
• Based on purchase of 2nd property at equal value to 1st.
• Serviceability of 2nd mortgage not taken into account (as it varies based on income, intent for 2nd property, ie rental, etc).

Here's what my limited financial acumen managed to deduce ????

At 2.5% Growth PA (very conservative)

One would be able to leverage to buy a similar value house (subjected to the same growth) after approx 9yrs.

At 5% Growth PA (fairly conservative)

One would be able to leverage to buy a similar value house (subjected to the same growth) around approx 6.5yrs.

At 7.5% Growth PA

One would be able to leverage to buy a similar value house (subjected to the same growth) around approx 5yrs.

At 10% Growth PA

One would be able to leverage to buy a similar value house (subjected to the same growth) around a little after 4yrs.

At 12.5% Growth PA (not far off in current climate)

One would be able to leverage to buy a similar value house (subjected to the same growth) around a little after 3.5yrs.

I know the NZ property ladder and the lucrativeness of multiple property ownership is no secret. And the old saying "it takes money to make money" always rings true.

I just thought it was interesting to visualise how feasible/possible it really is. It's crazy and just begging for a capital gains tax ????

The start amounts of your 2nd property is a bit unclear to how you get that value.

I guess this is more made up to leveraging off your 1st property to be able to buy your 2nd one and nothing to do with what % of income you are actually putting on on the bond of the 1st one, life expenses etc.

 

We are sitting with the decision currently if we should be saving for the 2nd property or put as much into the current bond as we can. Our pay back are scheduled around the 15-17years mark now, but we can either reduce that or use the money to save (invest in additional shares to us as a 2nd deposit say in 5 years).