Polity: A week on from the housing controversy
185 Responses
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Katharine Moody, in reply to
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?
Oh, sorry!!! Goes to show how much I pay attention to the person, as opposed to the policies!!!!!
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Steve Barnes, in reply to
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.
Or not...
The current set of politicians will continue to do what the Previous set mandated to achieve x until the result is reduced to a negative value ( x=<1 for the statistically minded).
The current set will then claim that the current value of x is the product of the lower value of the previous set, thus increasing the probability that the previous set will not achieve a value Cs1>Ps 2.
The effort (e) to achieve this will always be e=<0 -
Katharine Moody, in reply to
So, you don’t win the argument first time so you stop making it?
No. You made a bad argument the first time. So you change your mind, remove it as an objection, go back to the drawing board and get it better next time.
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chris, in reply to
Labour cares about this because the Kiwi dream of home ownership is rapidly slipping away from young New Zealanders of all ethnicities.
Seems to me like Labour only cares about Aucklanders and business owners. It is neglect of the regions that has caused this bubble, not offshore buyers. Drive down the main streets of Gisborne, Wairoa, Hastings, Waipukurau, see the empty storefronts, see the kids loitering outside the Pak n Save, kids who’ll most likely never be able to afford a house anyway, not when it was the mum and dad investors who were at fault, not when it was the property speculators, not when it was the renovators, not when it was the German, not now it’s the Chinese and not when it will be the Russians. 1000s of people who will never have a shit show of owning their own house regardless of who’s buying ahead of them because there aren’t the jobs and opportunities. See the opportunities you’re not offering, see the opportunities you’re not pushing with your perseverance on this Rob.
Cruise down Queen street Wairoa at 7pm and witness the boom, 5 fish and chip shops open and nothing else, shops staffed by hardworking Chinese (whose visa status or ancestry I’m not really prioritising thank you very much all the same Labour, that’s just me) whose lives you’ve just made more difficult. Check out some of the $60,000 houses there while you’re at it. See the $50,000 houses in Bluff, in Taumurunui, in Mossburn, in Raetihi, in Shannon, in Blackball, in Eltham and New Plymouth, in Owaka or Gore or Patea, in Castlecliff and Ashburton. Where are all these people selling up and moving to? Somewhere less neglected; there’s so many bullets at your disposal but you bought a knife.
Look at the real estate right around the rest of the country excluding Auckland and see how close to RV they’re asking, see how little that has inflated, see how much below RV they’re getting. And what happens when this money stops flowing into Auckland from offshore, now that - quelle surprise - dairy is tanking. Nothing much good is what happens. From what I’ve read so far, all I can see is that you don’t care about New Zealand, not the country, not the whole country, all it looks like you’re interested in is sustaining your posh little habit.
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More support for team Phil (lol);
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11483885
Will he get the sack too, I wonder?
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Jeff Weir, in reply to
Let them buy bonds!!! It’s still foreign ownership, granted, but the lesser of economic sovereignty loss evils, I suspect.
The purist in me wants to disagree, and say let overseas non-residents own our unproductive housing stock, provided we invest just as heavily in our productive business stock. The rent they get for it is dictated by the market rate in the rental market, in which they are competing between other owners for tenants. I'm assuming that renting is going to be cheaper than the all-up cost of owning, so the renter that could otherwise *nearly* afford to buy a house could elect to invest the difference in kiwisaver rather than beer and skittles.
As has been the case for as long as I’ve been buying residential houses, foreign direct investment in housing drives up prices
. Yes, but we simply don’t know by how much. And given the cost of political capital, while targeting FDI is one way to increase supply, we don’t know what quantifiable effect that’s going to have on supply. I’m not saying we shouldn’t. I’m just saying that it might or might not make much difference. Maybe we have to do it and find out. Suck it and see.
A great deal of that investment is leveraged based on QE/ZIRP policies in offshore country-of-origin.
I understand that this would make us more attractive.
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.
…but I don’t understand that ‘aside from out own’ bit. While QE/ZIRP policies (whatever they are…I’m uninformed) may be driving extra money here, it’s still a level playing field for the players on the field, isn’t it? Same risks, same returns? (Assuming we ignore exchange rate risk).
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Steve Curtis, in reply to
f someone has a quote of Twyford pitting all Chinese house buyers, resident and offshore alike, against hard-working NZers, let’s see it
he refers to offshore chinese investors or foreign buyers or combinations of those words about 10 times
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The sad thing for me is that up until now Phil's been kind of awesome in the way he's fronted to the media on housing.
This protracted debate is kind of like taking the ball out of the net after an own-goal, and repeatedly kicking it back in, watching the opponent's score go up ding-ding-ding by the second.
Still, even form my perspective as someone who hasn't given my party vote to Labour since the previous century, I'm really not loving it.
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on Stuff today.....http://www.stuff.co.nz/business/70200841/Empty-homes-during-a-housing-crisis-are-a-riddle...
with one person commenting....( Sam Buchanan)
"One reason we can't regulate foreign investors is because we signed trade agreements promising not to. The China FTA, for example, promises that China-based investors will be treated "equally or better than" local investors.
That was an agreement initiated and negotiated by a Labour government, and signed under a National government (and, incidentally, supported by the EPMU when Andrew Little was running it), so I wouldn't expect change from the the existing political establishment."
Could someone please verify/dispute this?
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Rich of Observationz, in reply to
Is property speculation OK if done by New Zealand residents?
Yes, it is okay!
Well, if you don't consider:
- reinforcement of inequality by enriching those who got in early (or get out early) at the expense of the rest of the population
- enrichment of those with the good sense to inherit wealth at the expense of wage earners
- damage to the productive sector because real businesses are unable to compete with the returns from leveraged land speculation
- losses to those left with negative equity after the bubble bursts
- potential loss of banking services if a crash undermines the banking system
- cost to taxpayers of bailing out banking sector (remember, this is the alleged reason for austerity in Europe)
- loss of tax income as taxable earnings are replaced by tax-free capital gains
- damage to the environment from urban sprawl justified by a semi-imaginary need for more housing landNot to mention:
- damage to the economy of other countries (China, in particular) by the diversion of productive investment into offshore speculation
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Sacha, in reply to
I have a clear recollection of him saying something that he clearly did not (unless it was from a news clip or somesuch). My apologies.
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As we're still debating what was said and meant, it's useful to quote Phil Twyford's original tweet (which he and Rob stand by):
https://twitter.com/PhilTwyford/status/619616896460062720
Chinese NZers 9% Akl popn. People of Chinese descent bought 39.5% of houses sold by major Akl real estate firm. This is foreign money.
Chinese descent = foreign. No ambiguity there at all. No inferring needed.
Whatever was intended, only Phil can take responsibility for this. Don't blame other people for reading his own words.
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Deborah, in reply to
Regarding whether the FTA with China might preclude restrictions on people from mainland China buying houses here if they are not NZ residents:
From politik.co.nz (Richard Harman)
CONTROLS ON LAND SALES TO FOREIGNERS
Another big issue for Labour which has emerged into the public glare this week is the possibility of limitations on the ability of a Government to impose controls on land sales.
Mr Parker says that has happened in the Korea Free Trade Agreement where the only controls that are permitted are those that were in place when the Agreement was signed.
WHY PARKER SAYS STEPHEN FRANKS IS WRONG
But he says the China Free Trade Agreement is different and does permit New Zealand to impose controls on land sales to foreigners.
This is contrast to a reading of the Agreement yesterday by Wellington lawyer Stephen Franks which was quoted on POLITIK yesterday.
Mr Franks argued that Chinese citizens could not be treated any differently to Australians over land sales and Labour would exclude them from its policy to band urban property sales of existing houses to foreigners.
“I was in Cabinet when we checked this before we signed the Agreement,” he said.
“I remember it because I was the one who raised it.
“We delayed Cabinet Policy Committee approval for the agreement to go to Cabinet before we had confirmation on that very point.”
And Article 139 of the Agreement provides that existing trade agreements stand and are not affected by the FTA nor do they affect it.
“Earlier agreements – like CER with Australia – are not affected and do not flow into the China FTA,” he said.
“If NZ wants to further restrict the sale of farmland or residential land to Chinese investors, we can.”
China has imposed further restriction on land sales which apply to New Zealanders since the FTA was signed.
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There's some worries about the Korean FTA and non-residents purchasing housing in NZ.
NZ hands tied on foreign home buyers under Korea FTA "bungle"
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I’m pretty much down with Liam Dann’s column today.
TLDR: there is an issue of historic proportions looming with respect to Chinese capital outflows, but don’t make it about people or their ethnicity.
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While I was searching for links to answer Rosemary's information request above, I came across this from 2013.
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BenWilson, in reply to
Makes interesting reading. I was unconvinced back then that foreign investors were driving prices up. What a difference more data makes. Even getting the info that lots of houses are not being rented out was an eye opener, let alone the probable scale at which money is coming in, from David Hood's insights into mortgages. On Rob's thread from last week, I'm arguing the exact opposite to what I was saying on the Cracker thread, because I genuinely thought that racism was likely to be altering people's perceptions of how much investment was going into property in Auckland from China. Now I'm not sure that it's only racism. It could be both racism and the fact that there's a heck of a lot of Chinese mainland investment going on.
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Thanks, Deborah.
Deja vu, anyone?
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Wow, take a breath everyone! This is a fascinating issue to view from the sidelines and staggering to see the effect of inflammatory reportage. I read the initial release and thought "at last, someone has made an effort to analyse the underlying issues behind Auckland's property trends". Then the Harold issued their interpretation and all hell broke loose. Sadly, what they reported was quite a twist on what was actually said, while making to attempt to report why the study was done in the first place.
I felt that the study made it quite clear that there were clear flaws in the data gathered. These were obvious and unavoidable. I also felt that it should have made more of the need for some sort of analysis. We have a government who seem reluctant at best to question the origin of the Golden Egg.
Sadly I think that the usual PA contributors have not been up to their usual extremely high standard of discussion on this one. Rarely can one simply flick through this forum without learning a great deal.
I did laugh though - I did notice one line of reportage denounce the racist nature of the study, then condemned Kiwis for being lazy toerags who would spend their last $100 on beer. At least that bought some balance!
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chris, in reply to
Deja vu, anyone?
It’s just one long slow frustrating continuum for me.
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Ian Dalziel, in reply to
Ultra Share Hosiery?
...and the value of hosing in NZ
and the “magic money”...Hosing NZ ?
Why, that'll be that Sock Market
one hears so much about...
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Rob Salmond, in reply to
As we’re still debating what was said and meant, it’s useful to quote Phil Twyford’s original tweet (which he and Rob stand by):
https://twitter.com/PhilTwyford/status/619616896460062720
"Chinese NZers 9% Akl popn. People of Chinese descent bought 39.5% of houses sold by major Akl real estate firm. This is foreign money."
Chinese descent = foreign. No ambiguity there at all. No inferring needed.
Simon, you forgot the last three characters of that Phil Twyford tweet. They were "2/2". Here's what the "1/2" to that "2/2" said:
Thought long and hard about this story. It's not about having a go at Chinese NZers. Just look at the numbers. 1/2
Makes very explicit the distinction between "Chinese NZers" on the one hand, and "foreign money" on the other.
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llew40, in reply to
I'm not sure I agree Dean. While the media treatment has certainly helped fan the flames, I simply find it scarcely credible to believe that, in giving the data to the Herald in the way that they did, Labour can claim to have been surprised by the outcome, and by how this debate has played out. I suspect that in itself has been what has upset so many party supporters - was it a conscious dog-whistle or not. Either way its not particularly edifying.
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Be cool if this much effort went into pressuring the government into actually doing something on the runaway Auckland housing market.
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Tom Semmens, in reply to
Be cool if this much effort went into pressuring the government into actually doing something on the runaway Auckland housing market.
Dude, this site is downtown Peoples Republic of Grey Lynn. They've all got their houses, thank you very much. Plenty of time to get outraged at the drop of hat.
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