By Bernard Hickey
Prime Minister John Key has warned against any strong Government policy moves to restrict or tax foreign buyers, saying he did not want to cause a catastrophic slump in the market.
Referring to moves in Australia that some say have pushed the apartment market there to the brink of collapse, Key said Government's role was to protect the value of equity in home owners' homes.
He also talked down the prospect of urgent action to roll out a second round of Anti-Money-Laundering (AML) requirements to real estate agents, solicitors and accountants, saying it could significantly increase compliance costs and therefore increase costs for first home buyers.
Key was asked about reports out of Australia that changes by banks and state Governments there to lending rules and stamp duties had deterred foreign buyers, and could therefore be copied here.
News Corp's Frank Chung reported yesterday a US Defence think-tank said Australia has six weeks to prevent a housing market collapse brought on by local banks changing their lending policies to stop lending to non-residents. In an article titled “Australia Risks Strategic Setback From a Significant Foreign Direct Investment Drop Due to Changes in Bank Policies”, the Washington-based International Strategic Studies Association warned of an economic downturn that would change Australian Government spending priorities. The downturn in foreign demand also followed increases in stamp duties and land taxes on foreign buyers in New South Wales and Victoria.
Australian apartment developer, Harry 'High Rise' Triguboff, also warned last week that large numbers of Chinese buyers were failing to settle their off-the-plan unit purchases and urgent action was needed to prevent a crisis. Triguboff was reported as saying a growing number of Chinese were desperately seeking local buyers to enter into third-party settlement arrangements so they could recover their deposits. Credit Lyonnais Securities Asia (CLSA) warned earlier in the week that a crash in Australian apartment prices would spread and cause a recession there as foreign capital withdrew from the market.
Asked about the Triguboff warning and Australia's new measures to reduce foreign capital inflows, Key said the Government had to be very careful not to take any policy steps that could trigger falls in prices and reduce leveraged home equity.
"Like any public policy in the area of housing, it's always a delicate balance between being effective in trying to slow prices going up, and making sure you don't have some catastrophic reaction you're not expecting," Key said.
"Years ago Australia bought in a vendor's tax in Australia and it had such a significant impact they actually cancelled it. There's always a happy medium," he said.
"Anyone in Government has to be a bit careful, because for most people their primary asset is their house and for most people, a significant amount of the home is borrowed from the bank, so you do have to protect their equity."
'AML reforms could be expensive'
Meanwhile, in response to a NZ Herald article on Saturday detailing police concerns about money laundering in real estate and delays in a long-mooted second round of anti-money laundering (AML) reforms to include real estate agents and solicitors, Key defended the pace of reforms, which Labour Leader Andrew Little has described as "chain dragging."
The report detailed how Justice Minister Amy Adams went against a recommendation last year from her officials for an immediate start to policy work on the reforms after a warning from police that up to NZ$1.6 billion a year of dirty money was being pumped into housing markets.
The Government has been criticised by banks in particular for not rolling out the 2013 AML reforms already applied to banks and fund managers to solicitors, accountants and real estate agents faster.
John Shewan also called in his report in June on foreign trusts for the inclusion of accountants and lawyers in the AML regime by the end of this year.
Instead, the Government rejected Shewan's recommendation and the Ministry of Justice only started formal consultation on August 16 for the second round of reforms, which it expects to take 'several years'. Legislation is expected next year. See more here from Gareth Vaughan on the issue, and in particular the risk that the Government allows industry bodies such as the Real Estate Agents Authority to oversee AML compliance.
So why not accelerate the reforms?
Key was asked if the Government should have accelerated the reforms.
Key said the costs of extending AML reforms on home owners had to be taken into account.
"It's not quite as simple as just bringing that legislation in. Depending on where you set the line, it's very broad and it's likely to have significant implications for a lot of different sectors," Key said.
"It's one thing to be looking at financial advisers, which is specialist trust advisors. Part Two will have quite significant implications on real estate agents, on banks, on a range of different interested parties, and that could add quite a lot of cost for potential home owners and purchasers," he said.
"So, yes we need to progress that legislation, but I don't think we've been terribly slow. It's a lot more challenging to put together than people think. We just need to make sure that we don't load the sector with huge costs that will be passed on fundamentally to first home buyers."
'Foreign buyers not an issue'
Key rejected suggestions that foreign buyers may be a factor in the money laundering issue.
He pointed to LINZ data showing 3% of buyers were non-residents for tax purposes. LINZ itself has cautioned against using the data, given a flawed question leading to uncertainty about the number of buyers who may be foreign students and temporary residents, but who are tax residents.
"That number still looks quite small. We're requiring people to give us their IRD numbers if they're a foreign purchaser. That doesn't to us seem to be slowing down the number of foreign purchasers. It's about the same. It's not moving a lot. If it really was money laundering you would assume it would have some impact on that, but it hasn't done from what I can see, on pretty limited data to be fair," he said.
154 Comments
Given that Interest rates in Australia are now also heading towards ZERO , Key has to either ban or slap a tax on foreign money washing up here looking for YIELD in our inflated housing market .
He needs decisive policy
Inaction is going to cost him the next election
If foreign buyer numbers only 3% as Key keeps repeating - why is he saying a foreign buyer tax could cause a "catastrophic slump in the market". Lost in his own web of lies. Do nothing, pump the bubble, head down and pump the bubble JK. Your legacy will be a catastrophe alright
Does nothing to stop prices going up year after year. Will do anything to stop them going down.
Up yours to anybody who doesn't yet own their own home in this rigged market. Clear signal to speculators to go for gold it's a one way bet under John Key. You cannot lose.
That equity being protected at all costs is years and years and years of misery foisted on the young. Why exactly is it the government's job to mollycoddle people who overpaid. Under what kind of free market principles do prices get manipulated to only go one way?
What does he expect will happen when all risk is artificially removed from the market? Is it the government's job to protect prices at 2 million? 10 million?
Good points. Similar to Aussie Leith Van Onselen of MacroBusiness who also rips John a new one
http://www.macrobusiness.com.au/2016/09/nz-pm-goes-bat-foreign-housing-…
Pardon me , Mr Key .... but where is it written that the government must protect homeowners' equity ?
... knock me down with a feather , dude .... but I thought justice , education , security , healthcare and welfare were the job lot of the Govt ....
So , if there is a downturn in residential property , are you going to bail folks out ... just like you bailed out a select few of the finance companies who collapsed ... South Canterbury Finance ...
... are we , the prudent investors , going foot the bill once again , for the careless and the greedy ?
If they gave the tiniest crap about anybody's equity, would have taken action years ago, before it became the flippin' Hindenberg. Absolute least any government who hadn't been roofied could do is match us to Canada and Australia.
When it all goes tits-up, the squealings for a bail-out will be deafening.
.. when the " Hindenberg " crashes and burns , Mr K , many of NZ's actual citizens will finally be able to afford a home ... a home within the country in which they live ...
And perhaps a few speculators will peg out permanently , and a few foreign buyers will clear off forever ...
... that seems to be a bloody good outcome , to me ..
Yes. Cashed up investors also waiting for the same to clean up the stock. I am not sure whether FHBs will even get a chance. Most good investors did not buy anything recently in Auckland unless if it was a heavily discounted one. They already have huge revolving credit facilities available for their future use. No need to call the bank again. That's what we call "smart buying" (good bang for the buck")
It also proves that John Key only think about the welfare of rich. Has he ever considered how to make houses more affordable for FHB. Instead he is worried about speculators as only they would be losers and not people who have bought house to stay for long term.
Shame
Referring to moves in Australia that some say have pushed the apartment market there to the brink of collapse, Key said Government's role was to protect the value of equity in home owners' homes.
A government picking winners always spells trouble.
A moment's silence for Solid Energy, SCF and probably Landcorp.
John Key knows all too well that the so called "market" is ruthless taskmaster and leveller if you try to outsmart it .
He should focus solely on the job of ensuring markets run efficiently and don't get distorted as has happened .He has allowed the distortion to happen and must now deal with the fallout when the bubble bursts .
No one cannot fight the market when it turns against home owners who have spent recklessly and borrowed the equity in their homes for holidays in Hawai or flash new cars. There is nothing John Key or anyone else can do about it .
As we know the market is more powerful than the Government, the Fed , the Reserve Bank or any agencies of state , just ask Graeme Wheeler
Stephen you picked up the same comment I did. It just shows how much he doesn't understand. It is not the Government's role to protect the value of equity in home owners' homes. It is their role to ensure they can afford to get into one, have a choice that they can afford, and not get kicked out by the unscrupulous and greedy, and most of all not squander taxpayers funds by subsidising a small number of property investors.
"Nah, I'm quite comfortable about doing sweet FA about money laundering, because if we actually looked for the billions in criminal proceeds poured into the real estate market since about 1996, we might find some. Awkward."
What's the point of him? If there was an unfortunate gas leak and he died in his office, how long before anybody even noticed?
You are right rp. Money laundering is a serious crime.
As is the activity which produced the criminal proceeds being laundered.
Drugs dealing, arms trafficking, human trafficking, conflict diamonds, tax evasion, bribery, corruption, wild-life poaching. Tragically, the list goes on...
30,000 elephants slaughtered annually don't have a voice, nor do many of our meth addicts destroying lives and local communities, but that's the reality of where the criminal component of the 'investment' comes from; and what it supports, encourages and perpetuates.
I see Key's arguments, that there will be costs to enforcement, as specious. If you bust drug dealers there will be lost revenue to the community they live in and a big cost. But you do it because that's the law, to prevent crime. Same with money laundering. You can't hide behind the cost or lost revenue to the accountants, lawyers and real estate agents. Has to be done.
I'm stunned. They're seriously refusing to address large-scale laundering of proceeds from serious, organised, transnational crime, on the specious grounds that enforcement costs. There is no reason for this that I can think of that doesn't make them complicit in enabling the illegal drug trade, slave trade, illegal fishing, sex trafficking, wildlife smuggling, illegal logging, genocide and human rights abuses. Really something for New Zealand to be proud of.
And the lost revenue to drug dealers is far offset by the huge drain on drug users who pay it, their families, our communities, the health system, the criminal justice system... Strip drug dealers of their assets and prevent crime (by more focus on the money trail and earlier interdiction than just taking the money after nabbing the drugs), and we'll all be far better off, as a community and economy than in effect condoning drug dealers' housing investments.
When did it becomes the government's role to protect homeowners equity - isn't it a free market? If there is a crash in Australia then there will probably be a crash here too. The government failed in it's job to prevent asset bubbles and now the reckoning will happen and there is nothing the government can actually do about that. Asset prices will face a correction and given the speed which house prices went up it's bound to hurt a lot people. But it's probably the recession we need.
Well, there aren't all that many farmers. They're not really a pander-worthy voting bloc any more.
I'd suspect that the govt gives zero fecks about effect on citizens, or damage to productive economy through crushing it under a huge cancerous bubble, or loss of equity, or anything amuch effecting ordinary New Zealanders, but care very much about being able to duck the blame and keep their corrupt little snouts in the swill-trough.
Theres a whole bunch of reasons the next crash is closing and much worse .. like
- interest rates are now zero worldwide. So debt = equity = WTF?
- We have no new China to take up the slack when the next one hits and spend like crazy on unneeded capacity
- China has now become part of the problem
- The debt bubble is massively bigger, but pumping asset values only does so much
- Massive stimulus since 08 has only just kept commodity producers esp Oil afloat, but for NZ dairy is a biggy ... weaker demand and lower prices after another financial crash will be really nasty.
- there is no safe haven, all economies are in it together
- actual finite resources are stretched and degraded
The near future is smaller, localised and a whole lot tougher.
China WARNS Canada Real Estate Ready to CRASH! https://www.youtube.com/watch?v=Hf5Bakzv4ek
What utter bollocks , anti-money laundering processes should NOT add significantly to costs .
We have a reputation to protect as the least corrupt country on earth , and that epithet is of immeasurable value to us as a country .
Quite simply , if money turns up in a New Zealand account , there must be a paper trail that identifies the source and the authority under which it was transferred here .
Done .
That's a really interesting point Boatman. Lawyers, accountants and real estate agents have long had some (limited) AML controls (Financial Transactions Reporting Act 1996), so in one sense it's just extending that, thus not too much extra cost, relatively speaking.
In another sense, however, estimated compliance costs of $76m/year (estimated a while back, so it may be more) is a lot, plus at least that again in establishment costs. The real issue, it seems to me, is the extent to which it will be more rules, or rules that have some real prospect of actually working as intended.
If the latter, and we materially step up the capacity to prevent significantly more societal and economic harm, it might be worth it. If the former, ie an exercise in international 'optics' with costs imposed mostly on the private sector, not so much.
;-) A few more like the $43 million that the police collected a few weeks back should do the trick.
But maybe let's not pay it to the lawyers, accountants and real estate agents to compensate the poor dears. How about we apply it for some more of the same?
A few of the biggest and most tightly wedged criminal rocks haven't been lifted yet. That $43m should help pay for a reasonably sized pinch bar and fulcrum.
Politicians aside, I don't understand why as a country we don't put resources into tracking down some of the really big crims. Other countries have started doing it, but it seems sometimes we're content with big drug busts, rather than working with others to try and take out the networks that support them. It's not easy, but there are known ways to uncover them, and if sucsessful could have a massive impact on crime prevention, and make the $43m forfeiuture look like chump change.
Resources. Cops have been starved of funding, SFO were kneecapped by a dirty tricks smear campaign. How many serious organised crime syndicates can we realistically expect OFCANZ to target? Not many. And until recently the proceeds of crime legislation was completely useless and unworkable, with the requirement that to be seized, the assets had to be linked to a specific conviction, and that just can't be done with well-insulated career criminals, with accountants, trusts, and minions for the dirty work.
Very simple - if they wanted to
The data is available. Staring us right in the face.
An astute government that kept its mouth shut and got on with the job ...
All it has to do is to go back over all property sales in Auckland that exceeded $1 million between the years 2006 and 2014 and track them through - audit them - vouch them - where did the money come from - if it came from overseas find out how it arrived in country - who handled it - was it done in small tranches or big hits
China's crack down and enforcement only began early 2014 and the limit was $50,000 annually
Because the AML rules applying to banks only came into effect in 2014 none of the big transfers would have been red-flagged
The paper trail is there - but it's getting cold
The candidates are self selecting - doesnt require much sleuthing
But, then, I've said this before
Gotta love the Americans straight-talk though. Rather than all agencies singing in unison as directed by whoever happens to be in power, one side of government has all the rules in place, yet the State Department's plain talking has for years labelled US a major money laundering jurisdiction, along with UK, Canada, Australia and many others that have all or most of the FATF rules in place. Just coz it is.
Home ownership rates in Auckland have tanked in the last few years - even among the high earning cohort if my observations are representative. Every month that goes by National's stance to protect foreign buyers is more and more at odds with the wishes of his constituents.
When I read the Aussie piece Bernard mentioned, the NAB chief economist Alan Oster described the ISSA's prediction of an imminent collapse as "garbage", saying that "one of the big problems of apartments is most of them, we don't know who's funding them," he said. "If the big banks don't know who's funding them, then the bottom line is, basically the main risk is somewhere else.”
What’s interesting about that comment, it seems to me, is that his framing of the issue appears constrained. Likewise, some of the political debate in NZ.
If “we don’t know who’s funding [overseas buyers that don’t get their money from local banks]”, the assumption appears to be that the funds are legitimate (ie funded by overseas banks or from legitimate savings).
No doubt most of it is. But there is of course, as Bernard rightly notes, another group that may not need funding from local banks. Those wielding the proceeds of the immense societal and economic harm wrought on our communities by serious profit-motivated crime.
Down here in Canterbury renters were told their would be no protection from the government after the earthquakes. They were told the government would not intervene. For renters their housing costs went up 40 odd percent over a few years before dropping back a bit in the last 18 months or so.
What is so special about home owners?
Why do they get protecting when politicians refuse to protect others? How can John Key walk away from the problems of unaffordable housing and homelessness? Does he have any empathy for the poor side of town?
NZ is headed to a nasty clash between a self-entitled property owning class who have received preferential treatment by the governing elite and a rapidly increasing group of property-less working and middle classes who are being turned into generation rent and mortgage slaves.
With John Key determined to protect the $1/2 million windfall that the average homeowner has made over the term of his government this ramps up the tension. Some sort of nasty clash is now almost inevitable.
I wonder how history will see John Key. We seem to be in an age where historians don't criticise certain dogma in the sense that you are for or against open borders, population growth and diversity or sent to purgatory. In relation to multiculturalism some academics refer to an institutionalisation of public discourse. To be a member of the elite; to receive funding, promotion, income you have to adopt a creed? Michael King bucked the trend, unfortunately he died in a car crash due to brake failure. How unlucky is that? Michael King argued that Pakeha are an indigenous culture: "how long did it take Polynesians to stop seeing themselves as from the Pacific Islands but as the people of the land they stood upon" (not exact quote). Professor Spoonley (on the other hand) argues that Pakeha are not an indigenous culture (thereby greasing the skids for Holy Migration)..
Somebody pinch me please...am I in a parallel universe?? This is all getting too much.
So according to JK its the governments job to create absolute mayhem to preserve the equity of homeowners yet savers equity has no protection courtesy of the same government... and a tax on foreign buyers could cause economic collapse even though they only account for 3% of the market??
@Ngrrk a very valid point , zero income for savers in order to save the arses of a handful of Aucklanders who have spent the equity in their homes, a group of idiotic buyers who have over-paid for houses and a few shonky foreigners fuelling our housing market with funny money , the source of which is questionable
If the tax on foreigners is having a massive impact in Australia, there must be many of them with deep pockets. Since OZ no longer has attractive Real Estate laws for them, which country could they move on to buy property..... Which OECD country with stable government and favourable laws for foreign buyers near OZ could they be looking at ??? Anyone ?... Any guesses at all ?...
Judy Collins? https://www.youtube.com/watch?v=8L6KGuTr9TI
Are the opposition really that useless SmoKey?, or have you just been caught hook line and sinker by the ongoing smear campaign being run against them by large parts of the main stream media?
Andrew Little comes across as extremely honest to me, and um isn't that what you actually want in a politician?
He doesn't contradict himself, or tell obvious porkies almost daily like someone I don't even need to name.
John Key doesn't want to tax the 3% of foreign buyers because he thinks it could cause a catastrophic collapse of the market.
He's already got the catastrophic doubling of house prices to his credit. Whats one more catastrophe? A second catastrophe would cancel out the first one. We could all live happy ever after.
"yada yada ....at the end of the day ....yada, yada, do nothing.......yada, yada......., protect foreign investors, yada, yada, ........great risk in upsetting the money laundering rackets and housing Ponzi".....yada, yada,"
(Aside to staff member "tell eco bird to pull his finger out-what are we paying him for - do I have to do all the non work around here)
By avoiding the heavy lifting required of a true leader it all becomes TBTF and then when it does go tits up its all over but what does he care - "just one more year of the bubble oh great god of housing"
Bernard H, should ask John Krey why is he contradicting himeself. When one lie get caught in his own web.
As per John Key foreign buyer are insignificant number (3% to 4%) and have no effect on house prices so HOW COME tax on foriegn buyer will cause house price to fall drasticly unles they are major player and main cause for the current housing crisis.
So John Key finally admits that Foreign buyer are significant number. No one in media question him/ grill him for his lie.
Will Bernard or David or any media experts clarify from national if foreign buyers are or not major player in housing crisis.
Norman Kirk defined what a PM's role should be guided by
"......people don't want much, just "Someone to love, somewhere to live, somewhere to work and something to hope for."
JK pales in his actions and words - not sure what he believes in or what principles he really has - I always ask posters to list his political achievements, no one ever takes up the challenge.
At No. 1 http://nzcycletrail.com/about/prime-ministers-message/
It was his big idea in that ED Summit they had shortly after winning his first election - along with the financial back office to the world one (you can't win 'em all). He got a bit of rib about the bike trail at the time, but it stands as his biggest legacy achievement to me.
At No. 2 there's Dirty Politics and the top NZ meme of all times! If you didn't do your head shot reading a copy of the book - well you really must have been living under a rock in 2014.
And in 3rd place, well you can't deny the world would be a poorer place without Planet Key;
https://www.youtube.com/watch?v=RDscbVWRBCw
Prime Minister John Key has warned against any strong Government policy moves to restrict or tax foreign buyers, saying he did not want to cause a catastrophic slump in the market.
Seriously last week he was quoted as saying they make up 1% of buyers ...
This week taxing or restricting would cause a big slump (aka correction)... not sure how that ties in with 1% buyers BS he is spreading
The man can't even get his stories straight
#jkexit
The 3% LINZ data is offshore only
29% were foreign students and foreign temp workers
Ie 30%+ are foreign buyers
Australia definition of foreign buyer = offshore + stud + temp
Wake up nz press. Put the pm straight. No one cares resident v non resident
Foreign = non citizen
@ Joe; Did you see this latest article from the VancouverSun that highlights the what was is really going on with those 29% foreign students and foreign temp workers and how they can afford those million dollar homes with NO income.
VancouverSun article: More Chinese cases target property in B.C., say lawyers
http://vancouversun.com/news/local-news/more-and-more-chinese-cases-tar…
From article: Duhaime says as the Citic case continues, her law firm is already working on new cases.
“One of our next projects is a Toronto house we are looking at, worth $100 million,” Duhaime said. “A guy went to a bank in China, defrauded them, got a loan and all the money in one day, and moved to Canada and got a mansion. And no one asked any questions, even though he never worked a day in Canada. It’s all the same type of story, where a foreign national doesn’t have a job, but is living in homes in Canada and owes money to a bank in China.”
“The amount of inflow litigation from China is substantial. I think the Chinese are starting to appreciate there is an opportunity to make recovery on their losses in China … against people who have immigrated to Canada.”
“There is lots of cases coming down the pipe, and there is lots of appetite in China from the government, down to the banks, to come to B.C. to enforce judgments.” To seize Canadian property.
Here is the definition from Australia . http://www.sro.vic.gov.au/foreignpurchaser
Perhaps David ( Eiditor ) could do an article on this and try and get an explanation as to why nz has a different definition of foreign buyer than Australia?
Surely we should be harmonising with Australia? Our CA firms are now combined.
Foreign purchasers
You will be a foreign purchaser if you are a foreign natural person, a foreign corporation or a trustee of a foreign trust.
Foreign natural persons
You are a foreign purchaser if you are not:
A citizen or permanent resident of Australia,
Or a New Zealand citizen with a Special Category Visa (Subclass 444)
Foreign corporations
A foreign corporation includes:
Corporations incorporated outside Australia, and
Corporations incorporated in Australia if a foreign natural person, another foreign corporation or trustee of a foreign trust has a controlling interest in those corporations
Foreign trusts
A foreign trust is a trust where a foreign natural person, foreign corporation or in the trustee of another foreign trust, has a substantial interest in the trust estate of that trust.
Foreign don't include the following:
A citizen or permanent resident
Students and temp visa are not permanent residents and are therefore foreign.
13.500 houses were bought by students and temp visa. This was 29% yes that's right 29% of the LINZ resident buyers. Talk about sweeping the problem under the rug.
Nz media have a huge conflict of interest and can't report the facts. This is what is sad about this. Can't even ask the pm why we define foreign buyers differently to Australia and Canada
Actually nz media have the same definition. If they changed the government would also. It is nz media that dictate the definition. They reach the masses.
David Chaston why do you hold this off shore only definition of foreign buyers ?
All these articles are meaningless if we can't get the simple facts rights.
Bernard it would be good to understand why nz definition is different to to Australia and Canada?
Answer - in the short term housing is already TBTF.
What is short term - anywhere between now and Sat 18th Nov 2017. Stuff Kiwi FHBs, stuff Kiwi couples wanting children, stuff Kiwi school leavers looking for entry work, frankly stuff every Kiwi who will stop me getting reelected, they are just lazy no good Kiwis. Its just about me, big business and my Asian mates.
Even Nat Bird is keeping his distance from Key on this one, normally he comes out swinging with War and Peace but this is just too smelly even for him.
When the Govt. provided guarantees to SCF prior to it going under, it allowed in the words of the CEO, 'to lend on more risky investments,' in the hope by doubling down they could recoup past losses. After all the risk now wasn't theirs, it was all the other prudent ratepayers.
JK is now saying 'Govt. must protect Home Owners Equity', he is also saying he is willing to underwrite property ownership. Just like SCF did, property purchasers will take on more risk. thinking that JK will not allow prices to fall. and just like SCF, the fall out will be greater because of it.
Media are more to blame than the government I hate to say it. They fail to hold him accountable.
They can't even get the correct foreign buyer definition.
Nz media should be ashamed of themselves. The conflicts of interest have seriously impacted what can be reported. You would not expect this in nz.
From what I've been hearing anecdotally, the big smart money has come and gone, and a lot of the money coming in isn't from organised crime kingpins, business tycoons and large-scale embezzlers, but syndicates of ordinary people entrusting their savings to students to buy into something they've been told is a one-way bet. I don't give a crap about organised crime bosses coming a cropper in a collapsed bubble, but hate to think of all the Chinese grannies who'll lose hard-won savings,in this.
If you haven't figured out what really going on with John Key and what prompted this news statement from him in regards the AML, This has largely been prompted by the new Vancouver 15% Tax on foreign buyers causing their market to go in to free fall which has obviously terrified him. He doesn't want the NZ public to realise that we're living off a false economy.
Here's a nice article from the VancouverSun: NDP calls for tougher enforcement around B.C. real estate sales
http://vancouversun.com/news/local-news/ndp-calls-for-tougher-enforceme…
Article quote: The B.C. NDP housing critic condemned on Sunday what he called “the apparent indifference of our provincial government” to reports of tax evasion, fraud and money laundering in the local real estate market.
Thanks Joe. I think John Key's house of cards is finally starting to fall apart, he can no longer hide what's been going on. There's another news article from the VancouverSun which highlights the next phase that's taking place in the B.C courts. I was quite shocked when I read what's been happening recently and just how a lot of those foreign buyers were able to afford those million dollar homes with no income.
VancouverSun article: More Chinese cases target property in B.C., say lawyers
http://vancouversun.com/news/local-news/more-and-more-chinese-cases-tar…
"Anyone in Government has to be a bit careful, because for most people their primary asset is their house and for most people, a significant amount of the home is borrowed from the bank, so you do have to protect their equity."
Then why inflate it 10% year on year, risking a bust.
More like it's a bribe to existing home-owners, National's client electorate.
So.... Now that we all know 100% where this government and PM stand on this issue, ya think those savings and investments at the bank many of you have are safe?
Again, I reiterate to anyone with deposits that want to keep the balance intact. Get hold of YOUR money well before this election. Put it anywhere but a bank. Don't become a victim of "too big too fail" nz style
Under John Key Auckland house prices up 0.5 million dollars
Under all other PM's house prices combined increase is only 0.5 million
Well done John Key on putting NZ housing on a Casino roulette wheel and doubling it. Hat's off to him he did more than all the other PM's combined.
This is what happens when you get a Trader running the show. Corporate Greed now Government Greed.
Eco Bird et al, where are you?
Are you going to bash the above bunch of 'lefty whiners' into the ground? Or is your rhetoric much like the policy of this (so called) government; lacking credibility, direction and substance (apart from this it's fine of course).
Come out and play, your commentary is so entertaining!
Nat Birds - (there are at least two of them based on how they mixed up their stories on Vancouver housing last week) have probably decided there are easier things to do than try and support Key on this flip flop over the influence of foreign investors and have gone off to produce the cure for cancer.
Really, at the bare minimum a sales tax and a long term CGT has to be introduced for all foreign investors, not just his Peking mates.
Duncan Garner cares however ask him about the definition of foreign buyers and I am sure he will say offshore only.... like key... like nz herald.. like interest.co.nz ... like NatBird
conflicts of interest... two biggest advertisers are Real Estate Agents and Banks... neither want a correction in Auckland... or anything that stops the demand of housing by foreign buyers
Canada/Australia/World Wide definition of foreign buyer = offshore buyers + Temp Workers + Foreign Students
NZ Media definition = offshore buyers
WTF?
Per LINZ temp + students bought 13,500 homes..
--> that is approx 13billion NZD in the last 12 month based on average homes in Auckland.
--> that is 1billion a month
No wonder we are seeing record prices.... 29% of resident buyers were foreigners (temp visa & students)
Worth another round
Last week:
foreign buyers 1% of buyers acxording to john key
This week:
Prime Minister John Key has warned against any strong Government policy moves to restrict or tax foreign buyers, saying he did not want to cause a catastrophic slump in the market.
2007:
House prices at crisis level acxording to john key
This week:
After 500k increases since he came in power he wants to protect household equity
Seriously this is our PM people.
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