Polity: A week on from the housing controversy
185 Responses
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Katharine Moody, in reply to
Is property speculation OK if done by New Zealand residents?
Yes, it is okay!
Because the country-of-origin of the capital and borrowings is local - same risk profile on residential lending, same tax regime, same currency value, same interest rate paid on borrowings as that of every other local New Zealander.
That the local tax regime does provide non-owner occupiers (some of which might be speculators) certain incentives/deductions not available to owner-occupiers was/is a problem, and that capital gains were not taxed was/is a problem. But we as a society can address these imbalances internally through our political system.
Foreign direct investment (the key word being direct) in our residential housing stock comes in under completely different country-of-origin conditions - hence not a level playing field - unfair competition - locally earned/sourced money cannot compete.
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Rob Salmond, in reply to
But that is not what Twyford said at all, is it? His words were very clear, hence the immediate anger they aroused.
If someone has a quote of Twyford pitting all Chinese house buyers, resident and offshore alike, against hard-working NZers, let's see it.
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Sacha, in reply to
I don't think Phil Twyford ever pitted *all* Chinese buyers against *non-Chinese* hard-working Kiwis.
Please do go back and listen to his interview again. I understand you do not want to believe that's what he said, but it is. Plenty had no trouble hearing him.
The decision about how to communicate this has to have been a deliberate one. It was either aimed at whistling ethnic prejudice to secure some redneck votes or it was so incompetent that someone should have resigned.
It sure as heck was not people misunderstanding what was being communicated. Stop digging, man.
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Rob Salmond, in reply to
You used ethnicity as a proxy for nationality. People said your analysis was a sound way of determining ethnicity, but if ethnicity is not the problem, but nationality, why do that?
First, we never used ethnicity as a proxy for nationality. Never.
Second, the reason do to ethnicity-based analysis was because of the large disconnect between the ethnic makeup of Aucklanders and the ethnic makeup of Auckland house buyers. To us, that *disconnect* is further evidence - on top of all the other circumstantial stuff we've seen - off offshore speculation driving up Auckland house prices.
I simply cannot believe people actually thought that if they defined a problem in terms of race, it wouldn’t be discussed in terms of race. You were the ones who used “Chinese” to mean “foreign”. Of course that made NZ Chinese people feel othered and threatened. Could you not find a NZ Chinese person to run it by before you released it? Did that not occur to anyone?
No, Labour never used "Chinese" of mean "foreign." Yes, we did consult some people who are ethnically Chinese on this issue. They understood our position, and were supportive.
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Rob Salmond, in reply to
Please do go back and listen to his interview again. I understand you do not want to believe that’s what he said, but it is. Plenty had no trouble hearing him.
So let's see a quote...
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Rob Salmond, in reply to
Here's a link to a transcript of Twyford's interview on The Nation last week:
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"In some of the reaction, self-appointed experts decided Labour had lost all its principles entirely, and instantly transformed itself into a pack of nihilist, racist, poll-driven Machiavellis. Those same activists decried those same Labour MPs in 2014 for being too PC, and too consumed with identity politcs"
What about the ones who didn't decry 'Labour MPs in 2014 for being too PC, and too consumed with identity politcs'? I'd say there are more of them among last weeks critics than the unnamed hypocrites you point towards. -
Russell Brown, in reply to
I don’t think Phil Twyford ever pitted *all* Chinese buyers against *non-Chinese* hard-working Kiwis.
Please do go back and listen to his interview again. I understand you do not want to believe that’s what he said, but it is. Plenty had no trouble hearing him.
Twyford has said some dumb things – including wildly over-rating the evidence and insisting on repeatedly using the word "whistleblower" – but it does appear that in this case what he said wasn't what "plenty" of people heard.
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Thanks for answering my questions, Rob. At least now I know that Labour is running an explicitly nationalist policy, even if I'm not happy with it. You say of onshore speculation that, despite the lack of a productivity gain, "gains accrue within the New Zealand economy". I'm always wary of that kind of very passive language. To whom do the gains accrue? Not to most ordinary New Zealanders, I suggest.
Katherine, you say any imbalances involved in domestic speculation can be addressed internally through our political system. I'm asking Rob what the Labour Party plans to do to address these imbalances. He appears to be telling me they will be doing nothing because they are only concerned about offshore speculation.
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Russell Brown, in reply to
No, Labour never used “Chinese” of mean “foreign.” Yes, we did consult some people who are ethnically Chinese on this issue. They understood our position, and were supportive.
I'm somewhat surprised you didn't have any of those people able to speak to the media.
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Rob Salmond, in reply to
What about the ones who didn’t decry ‘Labour MPs in 2014 for being too PC, and too consumed with identity politcs’? I’d say there are more of them among last weeks critics than the unnamed hypocrites you point towards.
Fair point they're in a different position. Quin and friends went from "Labour is too PC" to "Labour is a pack of nihilist, racist..." in half an hour. The other group you mention went from "Labour's about the right level of PC" to "Labour is a pack of nihilist, racist..." in half an hour.
That is an easier transition to make, to be sure, but I'd suggest is was still a bit hasty.
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Russell Brown, in reply to
Katherine, you say any imbalances involved in domestic speculation can be addressed internally through our political system. I’m asking Rob what the Labour Party plans to do to address these imbalances. He appears to be telling me they will be doing nothing because they are only concerned about offshore speculation.
They've rather cornered themselves by ruling out a CGT.
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Craig Ranapia, in reply to
If they plan to keep living in Auckland they don't have much choice but to take the market price for the house they're selling. I don't think "greedy white homeowners" is a very useful approach.
Thank you, Russell - it really isn't. My partner is retiring at the end of the month, and if all goes to plan we're selling up and moving back to Wellington by the end of the year. Of course, we're going to get the very best price we can (and without running background checks at the open homes) because this is our only major asset.
If anyone wants to frame that as "greedy white homeowners", I guess I can't stop you. But it's infuriating.
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Jeff Weir, in reply to
Our discussion last week focused on Chinese offshore buyers because (1) the *data* indicated this group was a major outlier
But how do you know if it was only a major outlier because you were unable to slice more accurately, and so quite possibly used an incredibly poor proxy? What in your data indicates that Chinese offshore buyers are a major outlier?
The reason do to ethnicity-based analysis was because of the large disconnect between the ethnic makeup of Aucklanders and the ethnic makeup of Auckland house buyers. To us, that *disconnect* is further evidence – on top of all the other circumstantial stuff we’ve seen – off offshore speculation driving up Auckland house prices.
That's not evidence. That's a hypothesis.
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Kumara Republic, in reply to
Onshore property speculation has the same lack of productivity gain, but the gains accrue within the NZ economy. So onshore speculation is better for the NZ economy than offshore speculation
You can also add the fact that onshore speculators have the equivalent power of an upper house.
Sadly, when economic globalisation benefits only an elite few, and the political mainstream willingly let it happen, it leaves a void that ugly nativists are only too happy to fill. Think UKIP, Le Front National and Golden Dawn among others.
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Jeff Weir, in reply to
Foreign direct investment (the key word being direct) in our residential housing stock comes in under completely different country-of-origin conditions – hence not a level playing field – unfair competition – locally earned/sourced money cannot compete.
God forbid we kiwis should admit defeat, leave the foreigners to their bubble on our soil - and invest in something else.
There’s a pretty good compliment to owning a house. It’s called renting and saving. I do it. It’s not the end of the world. My landlord who receives my hard earned cash is a non-resident. He lives in Japan. Probably owns property there, too. He certainly owns lots of properties here. Maybe that makes him bad in some folks’ opinions. If it helps you feel better about him, he’s a kiwi. Maybe that makes you feel worse about him…particularly given that he hasn’t lived here for ever. He was just lucky enough to be born here as well as marry a Japanese wife…he gets the best of both property markets.
Of course, he gets the worst of both property markets to. Because what seems to be missing from many people’s understanding is that:
* this is indeed a market,
* it can go up and down
* it’s not the only market in town
* it’s not even the only market for housing or property in town
* other markets also can go up and down tooWhat makes housing so special? Why do we have this nation myth that “Everything will be okay if I can buy a house (and I hope house prices keep going up after I do)?”. Heck, even I fall for it sometimes, and feel like a loser when I look at my pretty shabby rental that I’d be ashamed to live in if I owned it. Paint peeling from the outside. Wallpaper peeling on the inside. Insulated, but not as warm as I’d like. (Probably can’t be made much better because it’s an old house, with old windows and old gaps).
I often say to myself in fits of low self-esteem “Man, if I owned this place, I would sooo spend upwards of a hundred k making it look nice, so I could feel like a winner”. But I don’t own it. So unfortunately I simply can’t overcapitalize. It’s criminal, I know. Instead, in a marginally successful effort to mitigate my low self-esteem for being a lowly renter, I’m practically forced by the ghost of retirement future to put 8% of my salary money – plus the additional extra lump sum payment from time to time – into Kiwisaver. And instead of all that weekend painting and wallpapering, I'm forced to continue working on the code for the commercial computer app I'm in the process of finishing. Bah, humbug.
Sorry kids, looks like Daddy won’t be able to offer a house as partial security when it comes to your turn to attempt your own leap into the market (hoping you’ll catch a rapidly rising window-sill by your fingertips while at the same time praying the window sash doesn’t take that exact inopportune moment to slam down on said fingertips). Let’s just admit defeat, kids, and open a dowdy KiwiSaver account each instead, and pay the money into that, instead.
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I'm sorry what? It's nice that someone in the Labour Party got the memo that it's a bad look to dismiss the views of NZ Chinese critics, but this is some Olympic-grade straw-man nonsense. Framing me, Keith and Chuang-Zeng Lee as the rationale math nerds and legit representatives of 'the Community' who 'engaged' with you online, while 'others' were crazy and unreasonable?
I’ve engaged with them online through the last week, addressing their concerns and presenting additional data to support Labour’s conclusions.
Which we didn't accept.
https://storify.com/keithng/on-labour-s-housing-analysisTheir criticism was less about Labour’s intentions, and more about the impact of these revelations on ethnically Chinese New Zealanders.
Yeah, no. My criticism, and certainly Keith's underlying criticism, was MAINLY about Labour's intentions, given the obvious likely impact on ethnically Chinese New Zealanders, and the hoped-for impact/raid on the NZ First vote.
Other commentators, however, have demeaned themselves with cartoonish hyperbole.... self-appointed experts decided Labour had lost all its principles entirely, and instantly transformed itself into a pack of nihilist, racist, poll-driven Machiavellis.
Yeah, this pretty much represents my views at this point. But you know that you can't say that we are 'demeaning' ourselves by thinking this.
Those same activists decried those same Labour MPs in 2014 for being too PC, and too consumed with identity politics.
I don't know who these people are. Are they made up? The non-Chinese allies I have noticed over this particular issue are the activists who are consistently decried themselves for being 'PC'.
Sorry, please don't use me as some kind of human shield for this exercise in shoddy politics.
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Katharine Moody, in reply to
They’ve rather cornered themselves by ruling out a CGT.
That's about as useful as saying Key has cornered himself by ruling out means testing of super. This (largely) media preoccupation of "cornering" politicians by suggesting "back downs", "flip flops", "broken promises" etc. are always some sign of weakness - actually does not serve any useful or progressive objective.
"When the facts change, I change my mind. What do you do, sir?"
Presentation of the CGT policy by Phil Goff (Christchurch Town Hall) was likely a major factor in swinging the swing voters away from Labour in the election last year. Execution in that debate on that subject could not have been worse. In an attempt to recover with a more coherent understanding of the detail of Labour's policy post-Town Hall, holes and cracks kept appearing - in what was a 'keynote' policy.
Fact: the public voted and said no.
Those who represent Andrew Little's rejection of that CGT policy as a "corner" with no ability to exit - ever - with any type of policy regarding taxation on capital gains, are the ones now stifling the party from its potential further consideration of the matter. There are many variations on CGT policies.
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TracyMac, in reply to
Offshore property speculation causes a net loss to the NZ economy, for no productivity gain.
Nice exercise in goal-post moving. Are we worried about NZers getting fair access to housing, or are we worried about "productivity gains" to NZ's economy? They are far from synonymous.
And of course this "data" tackles neither point. Nor any analysis from Labour about the overheated housing market artificially driving up NZ's GDP, which makes NZ's economy look healthier than it is on that lazy measure.
As for concerns like mine - and the embarrassment we feel - being basically constructed as overly-PC hysteria, thanks for that. You haven't had my vote for twenty years - that ain't changing in a hurry.
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Ewan Morris, in reply to
Fact: the public voted and said no.
Those who represent Andrew Little’s rejection of that CGT policy as a “corner” with no ability to exit – ever – with any type of policy regarding taxation on capital gains, are the ones now stifling the party from its potential further consideration of the matter.
Fact: the public voted on a whole range of issues (and personalities), and I'd like to see some evidence that the CGT was an important factor in the election.
I'm not trying to paint Labour into a corner - I'd love to see Rob say that they are still thinking about options for a CGT or other ways of dealing with property speculation that deal with the issue comprehensively rather than just focusing on overseas-based speculators.
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Katharine Moody, in reply to
I’d like to see some evidence that the CGT was an important factor in the election.
I'm sure the party has that evidence based on polling.
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Keir Leslie, in reply to
Presentation of the CGT policy by Phil Goff (Christchurch Town Hall) was likely a major factor in swinging the swing voters away from Labour in the election last year.
Er, I could be wrong, of course, but wasn't David Cunliffe as the then the leader of the Labour Party the one on stage at that debate?
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Kumara Republic, in reply to
I’m not trying to paint Labour into a corner – I’d love to see Rob say that they are still thinking about options for a CGT or other ways of dealing with property speculation that deal with the issue comprehensively rather than just focusing on overseas-based speculators.
Once again, it comes back to the fact that housing speculators have effectively become NZ's self-appointed House of Lords. How unique is NZ in having a NIMBY brigade being blue-rinse housing bubble profiteers rather than greenies? And again, I present the hypocrisy of such people.
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Craig Ranapia, in reply to
Fact: the public voted and said no.
Sure, Katherine. So, you don't win the argument first time so you stop making it? If that was always the case New Zealand would be a very different place. For starters, you wouldn't be able to vote for anyone because the franchise would still be restricted to male property-owners.
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Katharine Moody, in reply to
God forbid we kiwis should admit defeat, leave the foreigners to their bubble on our soil – and invest in something else.
At the moment in Auckland that is indeed what every kiwi should do - invest in something else!
But, no, we should not "admit defeat" and continue to welcome foreign direct investment in our residential housing stock. In the words of Marie Antoinette: Let them buy bonds!!! It's still foreign ownership, granted, but the lesser of economic sovereignty loss evils, I suspect. As has been the case for as long as I've been buying residential houses, foreign direct investment in housing drives up prices - given in real estate the market expectation of sellers is largely dictated by the highest price paid for an equivalent asset. When the pound sterling was strong and the kiwi weak - it was UK buyers, for example.
But the issue of direct foreign investment is even worse now, as its not just an exchange rate issue. A great deal of that investment is leveraged based on QE/ZIRP policies in offshore country-of-origin. Our small little island is like a cork bobbing up and down hopelessly in a sea awash with free money of all colours - aside from our own.
Moral of the story: it's different this time.
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