Polity: A week on from the housing controversy
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Katharine Moody, in reply to
I read through that Katharine but I couldn’t find exactly what Tony Alexander means by “foreign buyer ban”. Do you have any idea what he’s suggesting?
The sense I got was no direct foreign investment/ownership in our residential housing stock (bar perhaps Australian citizens?). But not clear - and I think before he has supported a policy like Australia's 'new build' direct investment only one. His links take you through to other of his newsletters - might be more of an idea in there.
He's not the only of the chief bank economists who do such PR - which (I agree with your comment) is an interesting new trend in social media. These newsletters are I'm certain signed off at executive level - and so one can only assume that they (to some degree) talk up/reflect the bank's book, so to speak. I've always thought much of the purchases from offshore source funds/leverage offshore - and that may have big implications for the AUS banks. And of course bubble prices are never good for banks (in the long run) - lots of highly leveraged borrowing locally as well.
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Eric Crampton is a "working statistician" and he says
Whether or not you believe the numbers that Labour highlighted last week -- and I do not put much stock in them -- there is growing international evidence of substantial foreign capital that would be more than happy to find a home in Auckland housing.
in his Herald opinion piece. I agree with the part I've quoted, and would count that as another working statistician vote for "could do better" on the statistics.
Crampton goes on to weigh in on the side of "reduce the regulations on foreign investment and on building whatever you like in Auckland at whatever density you like", as the way to solve "the problem". I don't agree with him on those matters, but you go and read it yourselves. I reckon he's cleverer than I am at mathematics and economics. The difference between us is our belief systems.
On the matter of Tony Alexander, thanks for the newsletter link Katharine. I've had a read and I don't know whether he is really saying what he recommends, or whether he's couching it in terms of "if people ask me what are the arguments might be for x I would give the following list". Maybe that's hedging your bets, not having the BNZ appear to take a clear and strong position on a complex and political topic in the heat of the moment, or my faulty reading.
Please note I'm not asking for somebody to go and pick out lots of quotes which to appear to have Tony Alexander making a clear and strong position. I'm more talking about the balance between taking a position sometimes and appearing to just give information (the aforementioned "if people ask me what are the arguments might be for x I would give the following list").
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BenWilson, in reply to
Basically, as I informally understand the reserve bank philosophy is “all lot of things could shock the NZ economy, but we are building in a margin of error to cover that”
Sorry for late response, been busy.
If that is indeed their philosophy, it's hard not to feel that they're part of the problem rather than the solution. I mean seriously? Their idea of keeping the economy on an even keel is just to make sure that the banks are sweet if the whole rest of it crashes and burns? This is who we charge with controlling our most important financial levers? A group that is literally so much in bed with the banks that their planning for utter catastrophe is only about making sure that one of the most likely authors of the catastrophe comes through mostly unscathed?
If that really is so, then this conversation is long overdue, and their opinion is so far from unbiased that a log transformation won't be sufficient to normalize the data <statisticians joke>.
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David Hood, in reply to
Their job isn't to police all economic sectors- they have no power over most sectors just banks. The thinking is that things in the economy need to be free to succeed or fail without favouritism, and the banks are only policed so that a failure in one sector of the economy cannot take out the banks (which would then take out everything else).
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I just stumbled on this from April:
Alexander conceded he had previously advocated that this country “mitigate the effect of this unrestricted foreign buying of our houses and apartments on prices and societal cohesion by adopting Australia’s legislation”.
But there were concerns that the Australian system was not working or not being enforced and that “not only will prices continue to be pushed higher in main cities but that locals will find accommodation harder and harder to find simply because builders are very busy putting up complexes for foreigners (Chinese largely) which will never, or only rarely, be occupied”.
Say for a moment Labour just forget their current kefuffle, the offshore buyers, the Chinese, and in that capacity firstly acknowledge that this issue has been on the radar for quite some time time:
The Auckland region is projected to account for three-fifths of New Zealand’s population growth between 2011 and 2031, with an increase of 500,000 from just under 1.5 million to almost 2.0 million (medium projection). Auckland’s population is likely to have surpassed 1.5 million in the year ended June 2012. By 2031, Auckland region would be home to 38 percent of New Zealand’s population, compared with 34 percent in 2011.
Natural increase is projected to account for two-thirds of Auckland’s growth, and net migration (arrivals less departures) for the remaining one-third.
There is nothing new about this issue, we heard all about it last election.
The national average is one new home for every 2.4 extra people.
In Auckland it is much less than that, with one new home for every 4.3 additional residents […] According to Statistics NZ, this country has an estimated population of 4.433 million people, living in 1.675 million households. That’s an average of 2.65 people per household.
Labour have previously shown a capacity to approach the issue in a more socially responsible manner.
"And if they are just living off-shore and want a property they have a register. They are now looking at putting restrictions to prevent those people from buying existing houses and saying, ‘If you want a house in Australia you build a new one’.
“I think that’s something we should look at here.”
Andrew Little 9/12/2014
Despite the headlines the current Government have made little effort to disguise their feet dragging.
Statistics New Zealand figures show more than 21,000 new dwellings were approved last year, 26 percent more than in the previous year.
no captionThe Government says its housing reforms, including streamlined resource consent applications, have helped promote this.
Housing Minister Nick Smith said the increase in new home approvals should help overcome a shortage of 25,000 houses in Auckland alone, and he credits an accord reached between the Government and the Auckland Council.
Nick Smith 31/1/2014
The media and real estate industries are gleefully soaking in it.
Auckland’s housing market is flying.
Bernard Hickey 1/2/2015
By cherry picking a subsection of buyers Labour seem to have taken a step backwards in addressing the core issue – the sellers market. As an opposition party singling out buyers from a country with no opposition party this stance will have further legitimised any of the suspected trends Labour were attempting to target – weighted by the backlash from locals.
Labour can say “we’re just stirring debate”, Rob said:
Here’s my challenge my fellow travellers on the New Zealand left: just once, let’s have a discussion
But we’ve had this discussion, year in year out, We were having it in 2013, we were having it in 2010, we were having it 20 years ago. The Maori were no doubt having it 200 years ago and still are (comments):
I am Maori and have no problem with Chinese paying top dollar to buy NZ property. They are more welcome then the majority of the current European owners who stole the land from the Maori. I would much rather a purchaser than a thief.
ET
We’ve heard these debates and we’ve had them. Last election the KiwiBuild policy promised to build 100,000 new, affordable homes over 10 years.
Not to be outdone the Prime Minister said the Government would build 2000 houses over the next two financial years and would work with local councils on issues of land supply.
Houses and homes, homes and houses, like it’s 1951.
When the most pragmatic suggestion IMFAO to pressing issues is coming not from The Government, not from the leading opposition party, not from the usual media suspects but from a real estate agent then you can be fairly damn certain that your country is in suspect hands, on both sides of the chamber.
"What we should be doing is opening our doors to significant developers internationally who can come in and assist in fixing the problem by constructing high-rise apartments."
Hayden Duncan, chief executive of Harcourts
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The narrative from a year ago:
So who’s buying?
In many cases, investors. About 8 per cent of purchases are possibly being made by overseas cash buyers, according to data from property information and analysis company CoreLogic. But of the rest, almost half the property that changes hands – 45 per cent – goes to investors.
Another 28 per cent of purchases are by people moving from one property to another.
The impact of Chinese investment on New Zealand house prices, especially in Auckland, has been a hotly debated topic. There is no official register of residential property sales to foreigners, but a BNZ-REINZ survey of real estate agents last year found they accounted for 8 to 9 per cent of total sales. Australians accounted for 22 per cent of all sales to foreigners, followed by Chinese (20 per cent) and British (13 per cent).
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Joe Wylie, in reply to
Not having a crack at the Race Relations Conciliator might have been a good idea too.
Twyford seems determined to play this out as a hole-digging contest.
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John Key is putting a positive spin on wealthy foreign investors buying NZ homes.
I go around the rest of the country and people say to me 'Can we have a few of those Chinese buyers in Wellington and other parts of New Zealand because actually we want our house prices to go up'.
Key maintains that Aucklanders just love foreign buyers because it's making them all rich. Ah yes... being rich. Apparently the main aspiration of most National voters.
As a homeowner outside Auckland I see more value in a fair and equitable society where young people are not condemned to rent for their whole lives.
I guess the sky must a different colour down this way.
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BenWilson, in reply to
Well, and of course he won't be hearing that from most people who are not homeowners.
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So now John Key agrees with the Labour finding that ethnic Chinese are driving up house prices in Auckland;
And those of us outside Auckland want to share in the wealth, apparently.
To my mind, never has a PM been so unrepresentative of New Zealanders.
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