Posts by Katharine Moody
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Polity: House-buying patterns in Auckland, in reply to Craig Ranapia,
Regulars will know I’m no great fan of Brian Rudman, but I’ve got to admit today’s column makes a lot of sense
He misrepresents the economic reality of the effects of globalization;
Unfortunately, the finger is being pointed at citizens from our largest trading partner, flush with the cash we and other developed countries have sent them in payment for the appliances and clothes and kitchenware and even the Kiwi tourist souvenirs we can no longer be bothered making for ourselves. Why not? We’re too busy investing all our spare cash in the property merry-go-round.
The answer to ‘why not’ is primarily one of wages – the race-to-the-bottom – or as per a Marxian analysis: profit-seeking enterprises looking to reduce the labour- value content of their production as a means to compete in a capitalist economy.
He really loses all credibility – and hence, his opinion lacks rational argument. Looks more like sarcasm to me.
PS. Also, isn't our largest trading partner still Australia?
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Polity: House-buying patterns in Auckland, in reply to Rich of Observationz,
How does that create a * fiscal * surplus, though?
That 'wealth effect' - all residential property rising in value, which increased more local borrowing (lots of commentators refer to using the house as an ATM) and hence, spending to renovate, travel, buy a new car, start-up new businesses, etc. So increased GST returns, increased small business/local merchant returns, more builders employed (at higher margins) hence greater company tax receipts etc. And at the same time, wages were still inflating and Cullen didn't move the tax brackets (he took advantage of 'bracket creep').
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Polity: House-buying patterns in Auckland, in reply to David Hood,
for a few key quarters a bunch of people were buying houses much cheaper than the previous quarter.
Credit was tight - cash was King, hence the cheaper prices.
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Polity: House-buying patterns in Auckland, in reply to Mikaere Curtis,
If I recall, that's pretty much what Labour did say during the last election?
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Polity: House-buying patterns in Auckland, in reply to David Hood,
Once we get into the 2000s the NZ market is not being influenced by people getting NZ bank loans, it is being governed by capital from elsewhere.
I love your work. I believe it was the pound sterling flying in in the early 2000s. If I recall it was an amazingly favourable exchange rate for Brits and we hadn't had the vast price escalation that Britain got when the Russian oligarchs moved into their market. Many cashed in and came to the colonies - hence our mini boom (in prices) started around 2002. At least then, NZ wages, I believe were also still on the rise. That boom peaked in 2007, and then we had the GFC. Interesting, your graph during that period. If I'm reading it right - says it all.
The sad thing is, I thought all through the Clark/Cullen years the surpluses were mainly due to the influx of overseas capital taking ownership of our farms, forests and houses. Looks like JK hasn't had any new ideas either. We desperately need to force this capital influx in to job creation industries. But then I think Winston Peters has been saying this since Adam was a cowboy.
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Polity: House-buying patterns in Auckland, in reply to BenWilson,
because left wing politicians are themselves mostly a wealthy class. If not at the start, then certainly by the time they get any real influence.
In this crazy world of shadow banking and off balance sheet accounting, we really, really, really haven't even a handful of New Zealanders who could count themselves as part of the wealthy class in the global scheme of things. And this issue, the topic of this thread, is all about the global scheme of things - a simple concept: sovereignty.
The 'wealthy class' of once sovereign nations become victims of dispossession in the long run as well. Ask any Greek who hasn't yet fled their country.
Globalization, as far as I can tell, works its way from the bottom up in terms of dispossession - but it will get around to all of us one day if we cede/squander our sovereignty.
That is for me what this issue is all about.
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Polity: House-buying patterns in Auckland, in reply to Alfie,
although Joyce was a bit woolly on detail and couldn’t say when that data would be released or in what form.
Maybe already posted here .. but Fran O'Sullivan has taken Joyce to task on that 'wooliness' big time;
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11480867
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Polity: House-buying patterns in Auckland, in reply to Alfie,
It seems to me that the Nats aren’t serious about taxing foreign speculators, even though it could bring in hundreds of millions of dollars for the country.
Yes, puzzling to say the least. That is the reason I think that if we are to continue down the road of welcoming foreign ownership of land and housing assets, then that direct foreign investment should be taxed (and heavily) on the way in (i.e., a stamp duty on purchase). Capital gains is an entirely separate matter - one that should apply equally to local and foreign property investors.
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More on that wall of Chinese capital;
Due to the bubble in Canadian house prices and ensuing concerns over social dislocation, Canada's government shut down its investor visa program last year. Some 40,000 Chinese visa applicants with a minimum loan to governments of $C800,000 were handed back their capital.
"That's roughly $32 billion," says Tee. "The Canadian government said: 'We don't want your money anymore' and that capital is now hitting the Sydney market."
"There is a mountain of liquidity. China is bursting with flight capital. They can't go to the US, they can't get it into Singapore anymore, or Hong Kong."
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Polity: House-buying patterns in Auckland, in reply to BenWilson,
I know full well that what would happen is that the banking sector would be bailed out by the taxpayer,
No, they would be bailed out by the depositors being 'bailed in' - see RBNZ for details on the OBR (Open Bank Resolution).