Obviously, it's very hard for me to be specific to each market, so those are high level principals.
It gains for the new buyer an average falling of house prices, under the assumption that we are talking about a later period market that has seen asset prices rise due to leveraged investment by primarily high net worth holding entities looking primarily for capital gains of of asset price movements in an illiquid and inelastic-supply market, rather than fundamental connections to longer term investment/income flows and local income opportunities. The logic is that this disproportionately targets the leveraged investors regressively compared to the local home buyers.
Now there's also an argument to be made that if you encounter a market that is not in such a state, it could be individually rational for a new buyer to buy into said market, then lobby for policies which increase demand while removing said policies/barriers for themselves, thus trying to turn such a market into our common current situation now they have become a property holder, but in short, we have to try for policies that allow openness for sensible new investment while still tying values to local incomes, services and infrastructure funding, and long run returns.
Consider negative gearing: This is a tax break given to investors who do not live in the house. Eliminating this tax break would be beneficial to people who want to buy a house to live in because they would suddenly be competing with fewer investors.
More generally, harmonising the tax rates between real estate and other asset classes would also lead to more efficient allocation of resources, benefitting everyone.
Well yeah, obviously. Anything that reduces the profitability reduces the appeal to investors, which decreases price pressure, which leads to price falls, which ideally falls into a virtuous cycle of falling prices and falling investor demand until you have sane prices again. You'd have to hit it pretty hard to actually get that going though; this policy won't do it alone.
For new home buyers lower prices is great. For the economy lower prices is great (the initial massive losses will be rough, but going forward it means far less overhead on all Kiwis with that interest money going elsewhere in the economy, and in general the money going into non productive real estate speculation will go to more productive areas of the economy).
Increases taxes to "lower" the price doesn't lower the total cost of ownership, it just hides it by reducing the potential gains (which are _priced into_ the sale price).
I wonder how society functions at all, with the "solutions" I see ...
> Increases taxes to "lower" the price doesn't lower the total cost of ownership, it just hides it by reducing the potential gains (which are _priced into_ the sale price).
That is true, but you're missing the point. Given that the reduction in potential gains means that speculators will (to some extent) exit the market this means that demand and therefore prices will drop further.
Additionally non-investors cannot typically realise their "gains" (they don't exit the market to cash them in, they move to other houses which have had similar gains and so have no net gain) and so they're useless to them. Losing those gains doesn't harm them, but the lower price does help them.
I wonder how society functions at all, with all of the poorly "thought" out criticisms of solutions that I see...
Your solution to high real estate prices is to make the investment less attractive by increasing taxes? What does this gain for the new buyer?