Polity by Rob Salmond

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Polity: A week on from the housing controversy

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  • BenWilson, in reply to steve black,

    But no, I don’t put (much) of my own money into research to do something about it.

    Sorry, when I asked "how are you going to fight that?" I didn't mean you personally. By "you" I meant "one". But it feels like such a pompous form of address that I don't use it much.

    Auckland • Since Nov 2006 • 10657 posts Report Reply

  • David Hood, in reply to David Hood,

    The New Zealand data

    Just reply to myself to note that from the graph of the preceding page, that if nothing dramatic happens in the next four years there will be 1 in 5 fewer people (75ish to 60ish is 15ish which is 1/5th of the original) than a generation ago (measuring a generation by the current typical age of parents of around 29). That is what I would call a fairly big societal change.

    Dunedin • Since May 2007 • 1445 posts Report Reply

  • Steve Barnes,

    Kiwirail says it turned to the overseas firm because New Zealand workshops were not competitve and could not complete the contract on time.

    ...because they have been run down over the years for ideological reasons..

    But then, surely, there is something to be said for spending the money "Locally" ? more jobs, better for the balance of payments, the tax on wages/profit comes back to NZ, we can showcase our workmanship, cost of repairs (shipping, fares for overseas engineers)
    Perhaps we could have allowed overseas investors to finance local workshops...
    I could go on but I feel I am wasting my time here.

    Peria • Since Dec 2006 • 5521 posts Report Reply

  • Steve Barnes, in reply to BenWilson,

    watching and withholding. I can’t prove it, though – it’s a conspiracy theory.

    I am with you here Ben, I really can't believe that National do not have data even if "The Government" does not collect it.
    I believe it has something to do with hats and anyway, if National released that data, would it still be racist?.

    Peria • Since Dec 2006 • 5521 posts Report Reply

  • Katharine Moody, in reply to Steve Barnes,

    I could go on but I feel I am wasting my time here.

    Not with me, you’re not! Agree these should all be considerations for government in relation to policy settings, if that is, they weren’t wedded to monetarism (orthodox economics) and its political expression: neoliberalism. Which is part of the basis of a new ideology: globalization;

    http://mams.rmit.edu.au/es4cefpg6ifj1.pdf

    Wellington • Since Sep 2014 • 798 posts Report Reply

  • Kumara Republic,

    The southernmost capital … • Since Nov 2006 • 5441 posts Report Reply

  • simon g, in reply to Kumara Republic,

    "That's not the issue!", episode 347, by yet another columnist.

    So many people feel this need to tell everybody else what they should be talking about, rather than listen to what they are talking about. Which is kind of annoying if it's just the barbecue bore, but when it's a journalist ... it's even worse.

    Auckland • Since Nov 2006 • 1330 posts Report Reply

  • chris, in reply to David Hood,

    Chris, what country is that graph for (and why does it stop almost a decade ago)?

    David it’s from New Zealand, I don’t know why it stops then.

    http://www.teara.govt.nz/en/graph/30207/rates-of-home-ownership

    Mawkland • Since Jan 2010 • 1302 posts Report Reply

  • chris,

    Not my implication at all – it’s a point about the emphasis you place on price, as if it were the only (or the principle) consideration in the production process that makes a good “competitive”. In this case, Kiwirail explain in your link that the supplier was chosen because;

    My emphasis on price was merely a rewording of the text from the RNZ link. I didn't feel that the example did my point justice which is why I immediately posted again, linking to those John Holland projects, along with the wikipedia link in case anyone missed that John Holland is a 100% owned subsidiary of China Communications Construction. Company.

    Mawkland • Since Jan 2010 • 1302 posts Report Reply

  • David Hood, in reply to chris,

    I wish I knew how exactly they arrived at their number, because it is about 6% lower in 2006 ownership than the households by tenure data.

    Dunedin • Since May 2007 • 1445 posts Report Reply

  • David Hood, in reply to BenWilson,

    At the very least, I’d expect them to be attempting to predict the chances, to the limit of their abilities.

    What they do is estimate the size of a nationwide shock if it happened, and force that banks to keep reserves to allow for that risk, so without knowing what is driving the housing market or the likelyhood of it suddenly stopping, they are confident that the banks could survive a 30% drop in house prices (individuals might be financially hurt, but that would not bring down the banks so spread to everything the banks touch.

    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"

    Dunedin • Since May 2007 • 1445 posts Report Reply

  • chris, in reply to David Hood,

    Attachment

    I wish I knew how exactly they arrived at their number, because it is about 6% lower in 2006 ownership than the households by tenure data.

    You're not alone.

    I thought I had done a good job. The result showed a long term trend of declining home ownership that was supported by other evidence. But in March this year I got an email from an analyst at Statistics New Zealand, Angela, asking me how I had calculated the figures because their 2006 figure for home ownership was higher than mine. After much to-ing and fro-ing we discovered that we had used different denominators and had placed some variables in different tenure categories for different reasons. Angela recalculated the historical figures according to her methodology – our respective calculations were not too dissimilar until 1996, when our home ownership rates began to diverge – and we agreed that Te Ara would adopt these so we were consistent. The result underlined the productive relationship between Te Ara and Statistics New Zealand. It also highlighted the flexibility of web-based production in being able to make rapid content changes.

    http://blog.teara.govt.nz/2014/06/03/the-joy-and-frustration-of-number-crunching/

    Mawkland • Since Jan 2010 • 1302 posts Report Reply

  • Steve Barnes, in reply to chris,

    we had used different denominators and had placed some variables in different tenure categories for different reasons.

    I had a problem with the "home ownership" seemingly conflated with "owner/occupier".
    A picky point it may seem but if we assume all houses are owned and see the problem as a demand side problem. I thought it may be a simple thing to count the houses, subtract how many empty ones there are then go from there. Owner occupier, rented, gifted accommodation, I would consider all work related accommodation to be counted as rental, the IRD would, as FBT.
    The unoccupied list would be an interesting one to study, I bet.

    Peria • Since Dec 2006 • 5521 posts Report Reply

  • Mike Steinberg, in reply to Rob Salmond,

    @ Rob Salmond,

    Former Reserve Bank Economist Michael Reddell has pointed this out a number of times the main issues (which are amenable to policy)

    1) Demand driven by the inward migration targets.

    2) Restrictions on land use.

    If they restricted the immigration target they would quickly reduce the heat the Auckland property market for starters.

    http://croakingcassandra.com/2015/07/13/just-how-large-a-contribution-has-net-migration-made-to-population-growth/

    http://croakingcassandra.com/2015/06/23/immigration-policy-106-per-cent-of-net-new-housing-demand/

    Since Jul 2015 • 3 posts Report Reply

  • Kumara Republic, in reply to Mike Steinberg,

    2) Restrictions on land use.

    You know the world's gone topsy-turvy when it's the blue-rinsers who are the most vocal about keeping the status quo on land use. Draw your own conclusion as to whether it's old-fashioned snobbery dressed up as 'heritage' and 'community character', financial self-interest in the housing bubble, or both.

    The southernmost capital … • Since Nov 2006 • 5441 posts Report Reply

  • Katharine Moody, in reply to Kumara Republic,

    when it’s the blue-rinsers

    Just curious - do you see "blue-rinsers" to be a derogatory term?

    Wellington • Since Sep 2014 • 798 posts Report Reply

  • Ian Dalziel, in reply to Katharine Moody,

    Attachment

    cyan and handwringing?

    do you see “blue-rinsers” to be a derogatory term?

    Like National’s ’Bluegreen’ wing?
    Ageism aside – I find this bunch (above) pretty offensive.
    ; – )

    (and I am pretty much the same age as some of them!)

    Christchurch • Since Dec 2006 • 7950 posts Report Reply

  • Katharine Moody, in reply to Ian Dalziel,

    Was that a yes or a no?

    Wellington • Since Sep 2014 • 798 posts Report Reply

  • Ian Dalziel, in reply to Katharine Moody,

    Was that a yes or a no?

    While it does carry derogatory baggage,
    I see it as a borderline ageist generic grouping in this context.

    ...all considerably muddied nowadays, especially as I see so many young people (mostly women admittedly) with blue hair!

    There is another take though - as 'Bluey' is also slang for the rubiginous-tressed among us - so perhaps it's just another 'Ginger Group bringing pressure to bear...

    Christchurch • Since Dec 2006 • 7950 posts Report Reply

  • Katharine Moody, in reply to Katharine Moody,

    PS Ian, I should have put a smiley on that - as I was smiling when I asked it, due to the fact that it is very much like so many QT responses in Parliament these days :-).

    Wellington • Since Sep 2014 • 798 posts Report Reply

  • Kumara Republic, in reply to Katharine Moody,

    Just curious – do you see “blue-rinsers” to be a derogatory term?

    Yes, and its targets fully deserve it in the circumstances. ;)

    The southernmost capital … • Since Nov 2006 • 5441 posts Report Reply

  • Steve Barnes, in reply to Ian Dalziel,

    There is another take though - as 'Bluey' is also slang for...

    The trespass notice you get when being banned from a pub.
    I know this because I was once banned from a "Prominent Auckland Pub" for, in his words... "Interfering in his business".
    In my words... "offering advice to an abused employee"
    Needless to say... He is a staunch National supporter.
    But, as usual, I digress.

    PS. Superbly parried Ian, even though unnecessary.

    ;-)

    Peria • Since Dec 2006 • 5521 posts Report Reply

  • Katharine Moody,

    Not sure whether posted elsewhere, but here is BNZ's Tony Alexander's 23 July newsletter on Why A Foreign Buyer Ban?

    http://www.interest.co.nz/sites/default/files/embedded_images/Sporadic-15-July-23-2015.pdf

    Wellington • Since Sep 2014 • 798 posts Report Reply

  • chris, in reply to Katharine Moody,

    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?

    He implies some kind of equivalence:

    My reply included the point that we deny Kiwi employers access to the world’s potential pool of cheap migrants through migration policy

    But buying property needn't involve anyone physically entering the country, so how could such a thing be enforced? His emphasis is clearly on the Chinese yet his vague proposition seems to wrest entirely on successfully policing Chinese culture itself, there is no precedent, successive Chinese administrations and dynasties have fought a losing battle with corruption and grey transactions for millennia.

    The risks faced in illegally getting the kind of money we're seeing out of a country like China are considerably greater than anything our Government would impose.

    Modern Chinese are accustomed to seeing a single city block developed to house 10,000+ people in the space of a year, there's no question all manner of things can be accomplished with the will. Successive New Zealand Governments have invested what must now be hundreds of millions of dollars on yacht races, and sports tournaments and convention centres, all to turn Auckland into an "international city".

    And now the Chief Economist at New Zealand's second largest bank, a bank which offers a specialised Chinese language service for customers both here and abroad to facilitate money transfers, property insurance etc is proposing “foreign buyer ban”?

    I assumed he might have had a better grasp of his clientele.

    Mawkland • Since Jan 2010 • 1302 posts Report Reply

  • chris, in reply to Katharine Moody,

    More from Vancouver:

    In 2002, Canada introduced the Proceeds of Crime and Terrorist Financing Act, which requires real estate agents and others to report suspicious activity to the Financial Transactions and Reports Analysis Centre of Canada (Fintrac). Under the regulations, any large cash transactions involving amounts of $10,000 or more, whether suspicious or not, must be reported.

    Duhaime, who heads Duhaime Law, said that reporting is simply not being done.

    “During 2010 to 2013, there were 5.6 million real estate transactions in British Columbia,” Duhaime said. “We know from realtors in the luxury real estate market that there are numerous sales that are completed in all cash. Yet during that same period of time, real estate agents and developers in British Columbia reported very few large cash transactions to Fintrac.”

    Duhaime warned that evasion can be dangerous.

    “Those transactions are reported by banks to Fintrac, who have similar reporting obligations. So Fintrac is aware of situations when real estate agents take large cash payments but do not report it.”

    Not reporting a suspicious transaction can result in a fine of $2 million. Not filing a large-cash transaction report can lead to fines of up to $1 million per occurrence.

    If there is any dirty money being washed through Vancouver real estate, it’s being done not only secretively but also successfully.

    Mawkland • Since Jan 2010 • 1302 posts Report Reply

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