By David Hargreaves
The numbers of overseas-based buyers of New Zealand homes will only grow and a national discussion is needed around what to do about it, BNZ chief economist Tony Alexander says.
“It’s most definitely a discussion that we should be having,” he told interest.co.nz.
In response to widespread anecdotal suggestions of a large increase in offshore, particularly Chinese buyers, of New Zealand houses Alexander recently sought specific figures through the March BNZ-REINZ Residential Market Survey.
The key result was that 9% of buyers came from offshore nationally, with 11% of Auckland house buyers coming from offshore. Of the nationwide sales, people from the UK were most represented, with 18%, followed by China with 15% and Australia with 14%. In Auckland the Chinese were the biggest individual group, with 19%. However, many of those buying houses said they did intend to live in New Zealand.
The main point of contention with people appears to be what are perceived as growing numbers of offshore-based buyers snapping up NZ homes but then not living either in the homes or in the country.
Crunching the survey figures further, Alexander found that 4.6% of all properties sold in Auckland at the moment are going to people based overseas and not intending to live here.
“Nationwide, it works out at around 4% and if you are looking at China in particular, and it seems to be a particular area of interest for many people, about 0.8% of properties in Auckland are being sold to people in China who are going to stay across there."
Alexander admits the figures show smaller percentages than he might have expected.
"Well I guess yes, based on the anecdotes people had been throwing at me for the past six to nine months, in particular of Asian buyers at the auctions etc. And I had a few people afterwards emailing me, saying the numbers just don’t gel with with what they are seeing out there there.”
But Alexander says one of the reasons for the apparent disparity is that a lot of people are talking about the prime school zones. The North Shore is discussed as well - but there are a lot of migrants there. And in any case there are increasing numbers of Asian immigrants, with Chinese now the second largest addition by nationality to our net migration.
'On the low side'
Had had thought the numbers were maybe “a little on the low side” but then found a similar survey by the National Association of Realtors in the US, which came up with a figure of 4.5% of sales in the US to offshore people not intending to reside there.
“I got about 4% nationwide for New Zealand... I’m in the ballpark, that’s what I think.”
But regardless of the current figures, Alexander says greater levels of offshore buying in the future are a certainty.
He points to our rapidly increasing trade relationship with China, increased spending coming from Chinese tourists and large numbers of Chinese students coming to study here.
“What I’m wanting to point out to people is that with goods and services export flows always come investment flows, and one aspect of that investment is purchases of residential property.”
He said the Government's "Opening Doors to China" strategy document issued last year had a figure of 57 million Chinese earning over US$10,000 a year, but that this number would quadruple in the next 10 years.
We ain't seen nothing yet
“Well, whatever we are seeing now in terms of Asians buying generally of properties in New Zealand, the numbers, will grow strongly in the next few years. And I think the growth is probably accelerating at the moment as we’ve had new restrictions placed on foreign property purchases in Hong Kong and Singapore and an increase now in inquiry in New Zealand, so we need a debate on this.”
New Zealand has few controls on offshore buyers simply buying homes. But in Australia, offshore buyers can only purchase new houses, which is something Alexander sees as a good idea.
“I think that’s probably the point that we should be moving to if we are looking at legislation. So, this is for buyers from everywhere basically.
“I think that would be useful in New Zealand in the context of there is a shortage of property in Auckland in particular. So, if you’ve got people wanting to get a holding in New Zealand, if they are contributing to the supply of houses, I’d consider that quite a positive thing quite frankly. It’s not anti-foreigner. It’s simply a reflection of the supply situation in New Zealand and the way the world is going. In many countries you don’t have free rein to buy what ever you want if you are coming from overseas. It’s a natural thing.”
However, while Alexander says a national debate about the question of offshore ownership of NZ property is worth having - such buying is not the cause of the current squeeze on the Auckland housing market that is driving prices up. Prime Minister John Key said this week that if Auckland house prices kept going up the Reserve Bank might have to drive interest rates up - for all New Zealanders.
Phenomenally large shortage
“Well, the [Auckland housing] shortage is phenomenally large and it’s getting larger as each month goes by.”
Alexander has been warning of this for five years and says the country has “lost five years” of working on the issue because many people were convinced there would be substantial house price falls.
“What you have now is strong awareness of the shortage but, in a way, it is too late. We have the official estimates of Auckland’s shortage as 20,000-30,000 houses, we need to be building 13,000 per annum, it’s not going to happen end of story.”
Alexander says building consents issued for Auckland have been below the long term average of 7000 to 7500 a year since 2007 and by the time Auckland even gets back to that average figure “we are going to run out of builders”.
“They are going to be down in Christchurch, they’ve already gone to Australia, they’ve left the sector, we haven’t done the apprenticeships, so the supply simply is not going to come forward. The prices go up and like I say maybe there’s three years worth of that.
“...Now investors are catching up on buying as well. There’s a lot of momentum left yet.”
Three years to run
Alexander said recently that he thought the current housing upturn would last for about three years, which he says is his "best guess” based on history.
“History shows that when a cycle in anything gets going you never know exactly when it is going to peak or at what level the prices are going to peak. A lot of it is really driven by the extent of the shortage of property that I see in Auckland in particular, my belief that we are going to struggle to actually correct that shortage, so we are going to get some quite strong uplift in prices. But also a feeling of when is the Reserve Bank really going to get interest rates cranking, how long will it take them to get to painful levels at which the market starts turning the other way and I’ve got the best guess on that at the moment of about three years for the peak in the interest rate cycle."
All this leads to an economy that is starting to grow, fuelled by rising construction activity, particularly relating to the Christchurch rebuild.
Alexander says in the year ahead there will be very strong stimulus from the domestic economy, but the export sector is a different story.
Slammed
“They are slammed by the drought and we’ve already got tourism numbers overall going backwards. And the high currency, it’s going to go higher because the rule there is the Kiwi dollar goes up, when the housing market goes up – so there’s three years for you, and the Kiwi dollar goes up when interest rates start going up. They haven’t even started going up yet. So, I’m sorry to give a message to the exporters of ‘you ain’t seen anything yet’ as far as the currency goes.”
Alexander says it all points to “a very imbalanced period of growth in the economy”.
“…Domestic driven upturn in the economy, current account deficit blows out, eventually the overseas investors say that seems a bit extreme, but while the interest rates are high and rising they are not too worried about it, and this is all to play out over, I’m guessing, the next three years. Ask me again in a year’s time I may have a different profile because, look the level of unknowns especially overseas, is still relatively high.”
86 Comments
All I can read from this article is another attempt at Foreigner bashing, especially Chinese bashing.
This guy is unashamely Xenophobic Racist....all the while trying to cover his ranting by being "this is not foreign bashing"...only a foreigner basher would say that.
The housing SUPPLY problem is caused by Council and Goverment Incompetence..NOT foreigner buying (which he admits is minimal)....So the solution to the housing supply should br Council and Goverment Action to INCREASE SUPPLY OF HOUSING STOCK and not blaming foreigner buying of houses.
If the reason for our current shortage of housing stock was due to Goverment failure as implied by himself “They are going to be down in Christchurch, they’ve already gone to Australia, they’ve left the sector, we haven’t done the apprenticeships, so the supply simply is not going to come forward. The prices go up and like I say maybe there’s three years worth of that.".....Then the solution should be to increase supply as fast as possible.
It beggars belief that this country with the lowest population density in the world cannot free up enough land for housing at affordable prices and it also beggars belief that this country with an almost 20% youth unemployment rate cannot train enough apprentices to built houses at an affordable cost.
FYI most of the workers in Christchurch construction are foreigners....TV3 just broadcast on Cambell Live the Phillipino workers in Christchurch. Foreigners form the majority of Construction workers now in Chirstchurch.....another round of Foreigner Bashing now Tony???
It is indeed weird that the cause of our housing shortage and the solution to our housing shortage both lies in Foreigner hands !!!
Kin you are being paranoid. If you are here then you are here. Why do you like it here.???....because there aint that many of us. Want to spoil the place so it's like every other over-populated city .... then fill the place with more people.
NZ is a great place. You should treat it like your favourite fishing spot. That is, keep quiet about it, enjoy what it provides......but don't invite everyone else along!
The Chinese don't want Filipino people either, even after they spent 7 years slaving for the dickless wonderkids in Hong Kong.
http://www.reuters.com/article/2013/03/25/us-hongkong-maids-idUSBRE92O0…
Do you reckon the chinese are Xenophobic Racist... etc
So you are going to be ok with all day congestion in Auckland?
Sometimes people may be against aspects of migration policy because of xenophobia/racism. Other times it may be about amenity and quality of life.
I have lived in Auckland for a fair old while and some aspects of the amenity of the city have markedly deteriorated over that time. Most notably traffic congestion.
Do I choose to stay silent in fear of being labelled a xenophobe / racist? Or do I point out the downside of growth for growth's sake. Today, for example, is an article in the NZ Herald noting that there will be all day congestion in Auckland sometime in the 2020's on current projections
And to quote from the comments in a spectator blog on the same general topic.
the vast majority of people who are concerned about mass immigration are not racist. Rather, they (a) wish to preserve their culture (most obviously the English language and the common values we live by) (b) are worried about the effects of mass immigration on people's employment prospects (especially young people), together with the resulant increase in welfare dependency and (c) are concerned about the effects of such rapid population growth on housing, transport, education and health.
and
The ability to control debate by the threatening use of the epithet "racist" is one of the most anti-British & anti-democratic practices I have ever seen. It is clearly a very powerful silencer of free-speech and is to be deplored
To put the post into conext. I would be keen to see a migration policy that aimed at a static population figure. If net inflow = net outflow then I would be happy. That does not appear to be the case at this point in time.
Where those people come from doesn't matter. The volume does. If the numbers coming in are above the outflow figures then I have a major concern that the quality of life associated with living in Auckland will continue to decline.
Kin
That is your point of view through the prism of your own prejudices
It would be helpful for US if you could explain why you came to new zealand, what you were looking for, what your aspirations were, and whether they have been fulfilled.
A generation ago new zealand didnt have a youth unemployment problem. But that was in the days before mass immigration from Fiji and Hong Kong, and now latterly China. So, one could draw the conclusion that immigration has brought about the unemployment conditions you refer to.
Explain the following. Why would local employers provide apprenticeships and train locals when they have Filipinos paying enormous sums of money to get into new zealand, willing to perform jobs at 3rd world rates. And also explain what happens when the jobs finish. Do they go home? Does the employer take responsibility for these migrant workers afterwards? Or do they simply become someone elses problem?
When did I say all that I was supposed to have said???
All I said was "DON'T BLAME THE CURRENT SHORTAGE AND UNAFFORDABLE HOUSE PRICES IN NEW ZEALAND AND AUCKLAND ON FOREIGNERS ESPECIALLY CHINESE"
Am I wrong on that ???
As regards to foreign workers in Christchurch or anywhere else in New Zealand for that matter, I have no opinion. You should ask the Goverment about that.
I have already said it's a disgrace that we cannot train our youth to be builders especially with 20% youth unemployment in our country....or is this the foreigner's fault too??
Kin: You are the one pulling the Racist card and the Xenophobic card
Refer Gibbers comment
The ability to control debate by the threatening use of the epithet "racist" is one of the most anti-British & anti-democratic practices. It is a powerful silencer of free-speech and is to be deplored
Repeat
It would be helpful for US if you could explain why you came to new zealand, what you were looking for, what your aspirations were, and whether they have been fulfilled.
Let me know when you have got your full-face moko
I don't know who Gibber is and I seriously don't care. But if you continously target one particular racial or ethnic group in you negative comments, then I can only assume that you are in particular partial againsts that particular racial or ethnic group.....I think that is what racism is about ???
As for me coming to live in New Zealand , it was on the invitation (yes invitation) of your Goverment....and seriously not to get a moko or any particular facial markings....my ethnicity is sufficiently differentiated....
if you continously target one particular racial or ethnic group in you negative comments, then I can only assume that you are in particular partial againsts that particular racial or ethnic group.....I think that is what racism is about
Kin,
?? where have I targeted one racial group. I don't care where they come from. I just want a restriction on VOLUME.
If all the new immigrant were white I would have the same position
If all the new immigrants were brown I would have the same position
If all the new immigrants were <insert colour/ethnicity of your choice> I would have the same position.
See iconoclast's post at 28 Mar 13, 3:12pm
I hold the same view.
For your information, when I got married, my best man was a New Zealand born Chinese. So maybe you could put that in your pipe and smoke it..
"DON'T BLAME THE CURRENT SHORTAGE AND UNAFFORDABLE HOUSE PRICES IN NEW ZEALAND AND AUCKLAND ON FOREIGNERS ESPECIALLY CHINESE"
um ....in Auckland Central and surrounding areas...yes Kin you are wrong in that.
But it's not the fault of them being Chinese, it's the fault of the Administration desperately seeking to capture foreign capital by whatever means necessary.
We have no reciprocal land aquisition laws with the PRC....... we have a very shortsighted Administration.......so there is no Yellow peril thing going on here, just a collective of people taking full advantage of very poorly thought out legislation.
So the problem with you is that the buyers in Auckland just happens to be Chinese ??
Would you have a problem if they are British ???
If the problem as you said is because of your current "poorly thought out legislation" and administration, is that the fault of Chinese immigrants ??
No Kin it is not..as I thought I just made clear , you are letting you fear of persecution get the better of your ability to rationalise.
Chinese immigrants..?....the subject in question is foreign ownership, not full migrant ownership.
As I said we have no reciprocal agreement with the PRC...therefore I think it fair to feel uncomfortable about it.
As to the British thing um ...er ....no ...I probably would'nt notice the changing demographic as much viually speaking , but that coro accent annoys the shit out of me no end.
I 'd like to see more Australians here, Tasmanians, indigineous ones too, some Fillo's, Thai's,Papuans, and so forth as they seem to assimilate to the culture seamlessly.
That said N.Z. Chinese ...salt of the Earth my boy...hard working , good business heads, law abiding (mostly) contributors to the economy of the last 100 years.
The persons in question may have little interest in resettlement, nor the embracing of N.Z. culture and it's slower approach.
kin
It is not an ethnic or racial issue. I don't have a convenient label that can be applied. It is a categorisation issue. Its an issue of money and power and wreaking disproportionate change. Chinese people have been coming to new zealand for 2 hundred years and have fitted in and assimilated. It is only in the past 10 years they have arrived in such numbers with extraordinary wealth and exercising financial power that is upsetting the apple-cart for both locals and themselves.
As Christov has commented on at least two occasions that I can recall, even the local (pre-existing pre-2000) chinese community are not happy.
So in answer to your question. It is not racial or ethnic. It its the exploitation of financial power by one segment of the ethnic divide. They can be conveniently divided into two groups. Pre-2000 and Post-2000. The attachment of the "chinese" label can't be helped. If you can offer a better description please do.
If large numbers of russian oligarchs start arriving and doing the same thing, the same attitudes will prevail.
Gareth you were young in the early 90's...? that swine David C has worked you far too hard mah boy, take a holiday on me this instant.!
Long pause.......
Well how was that....? feeling refreshed now after that pause..?
oh and you are right about the generation thing.......yes and unemployment was high and so moving the stats to the sickness benificiary list became the answer to the problem .
p.s. just yanking your chain on the "old" thingy.
Gareth: I was being imprecise with the generation thing. Was referring to the 1970's and early 1980's. Youth unemployment started to grow with (a) the 1987 crash and the collapse of many businesses and thus employers, and (b) the subsequent acquisition of local industries by overseas conglomerates who ceased local manufacture and imported instead. But it wasnt as high as it is today, was it? Have you got any stats?
The point at issue is: did youth unemployment ever get to 20% before 1990's
The housing problem is multi faceted and some of Kin's points are totally valid. When it comes to non residents buying from our already short stock of houses, we need intelligent conversation. Those who pull the Xenophobe card from both sides are being irrational and missing the point. Having a reasonable restriction on property purchase that allows the playing field to be tipped in favour of the locals is a perfectly fair and rational way to ensure New Zealanders of all kinds have the opportunity to house their families in the country in which they live. Speculation by off shore interests is not in our national interest. Some simple rules like Australia has would be perfectly acceptable, its not like we are talking about draconian Chinese property rules aye.
Fair comment. If you think the solution to our current housing crisis is because of foreign buying, the ban ALL FOREIGNERS from buying in wharever areas that suit the situation, but we should not restrict this to only one particular ethnicity or race. Which by the way would be defined as racism....
Which is PRECISELY Kin what I and many like me have been banging on about since forever, it seems. And for my wishing to see that NZers including migrant and migrants' children, are able to buy homes for themselves. What do we get for our trouble, accusations of xenophobia to the point where, in the end, I decided that if my wishing to see actual Nzers able to afford to house was xenophobia then a xenophobe I proudly would be
Just read this thread.
As far as I am concerned raegun is absolutely right.
My fear is not from a small number of 20 million Australians, a small number of 60 million from Uk but from a very small proportion of 1000 million Indian and 1500 million Chinese that can swamp us should they choose. Apart from that the corruption evident in recent reports about China would suggest that some of that corruptly obtained cash is ending up here and these are just the type of buyer that our way of life can ill afford to accept.
If that is racist or xenophobic do not call it so unless you can prove me wrong on the corruption front
It's good to see some numbers based on something. But depends how you value it. Some will say 4% is not significant. But I think it's huge especially as time passes.
I do think it entirely reasonable that the locals restrict some things and act in self interest, And yes I am a local, with immigrant ancestors.
What a load of rubbish. Once Maori have sold the land it no longer belongs to them. I don't own the land my first house that I sold in 1993 sits on.
And before you say it was stolen from Maori there NZ has 26.8 million hectares of land 1.2 million were confiscated from Maori due to some tribes breaching the treaty and rebelling,( much of which was actually given back). As at Setember 2009 there is 1.47 million hectares in Maori ownership. The remaining 24.13 hectares was purchased from Maori sometimes more than once (for he same piece of land)
Any land that was bought under public works acts and not used for the purpose acquired has been dealt with by treaty settlements also sometimes more than once.
So there is 1.47 million hectares of Maori land in NZ no more.
Perhaps if you are going to quote from an Act you may it may be helpful if you do not selectively quote to try and prove some hair brained theory.
Here is the rest of that section. Note E!
(2)For the purposes of this Act,—
-
(a)land that is held by Maori in accordance with tikanga Maori shall have the status of Maori customary land:
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(b)land, the beneficial ownership of which has been determined by the Maori Land Court by freehold order, shall have the status of Maori freehold land:
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(c)land (other than Maori freehold land) that has been alienated from the Crown for a subsisting estate in fee simple shall, while that estate is beneficially owned by a Maori or by a group of persons of whom a majority are Maori, have the status of General land owned by Maori:
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(d)land (other than Maori freehold land and General land owned by Maori) that has been alienated from the Crown for a subsisting estate in fee simple shall have the status of General land:
-
(e)land (other than Maori customary land and Crown land reserved for Maori) that has not been alienated from the Crown for a subsisting estate in fee simple shall have the status of Crown land:
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(f)land (other than Maori customary land) that has not been alienated from the Crown for a subsisting estate in fee simple but is set aside or reserved for the use or benefit of Maori shall have the status of Crown land reserved for Maori.
Would these owners who didn't give their authority be the same ones who received payment for the land or the perhaps ones who claimed the land by conquest who were also paid off or perhaps the ones that may have wandered over it once and seen a Taniwha?
The reality is that the Maori Land Court (or as it was then called the Native Land Court) tried extreemly hard to identify the rightful owners for land to which they were issuing title. No doubt that there were some instances where they got it wrong but there were also many instances where Maori tried it on.
I read recently in a book of short stories written by Gilbert Mair who was amongst other things a Land Court judge of a case where a Maori claimant who had no rights to the area being subdivided claimed the land because an ancestor had seen a ghost there. In this case the judge handled it by agreeing to split off 1 square yard into separate title (just big enough for the ghost). The claimant subsequently paid a title fee of one pound and went home claiming victory.
Have you read "A Simply Nullity", or Te Whanau Moana? The former outlines have the courts have not treated Maori equally as the Treaty guarantees their right under the treaty, the later in one chapter details the devious methods used to deprive Maori of land.
Btw there is evidence that NZ was actually overpopulated by Maori by the time of European colonisation, so all of NZ was in Maori possession.
http://en.wikipedia.org/wiki/Declaration_of_the_Independence_of_New_Zea…
As of October 2010, the Ngāpuhi's claim that sovereignty was not given up in their signing of the Treaty of Waitangi is being investigated by the Waitangi Tribunal.[13] The Waitangi Tribunal, in Te Paparahi o te Raki inquiry (Wai 1040)[14] is in the process of considering the Māori and Crown understandings of He Whakaputanga o te Rangatiratanga / The Declaration of Independence 1835 and Te Tiriti o Waitangi / the Treaty of Waitangi 1840.
No I haven't read "A Simple Nullity" but I have read quite a lot of the earlier historians. I will see if the Library has it but I have to say that I do not trust the work of many of the modern historians.
If you have a look at what the chiefs said at Waitangi and at the Kohimaramara conference in 1860 there is no doubt that they were fully aware of the fact that they were ceding sovereignty and in exchange getting the benefit of british citizenship and the protection of law in return.
Even Paul Moon dimisses the relevance of the declaration of independence and he is about as pro Maori as they come around treaty issues.
I terms of the Waitangi Tribunal they have zero credibility.
The author isn''t a historian but a law professor. But easy to miss the lesson if reading one eyed.
Look this can all go round in circles but one thing I can tell you from my inside knowledge, Maori will keep fighting until they receive what they want. For northern tribes that signed the declaration of independence, it is exactly that. For the rest it is Justice, which is why Maori signed the treaty. The Privy Council even ruled in favour of Maori in 1903 but somehow New Zeland courts managed to ignore it. I suspect Maori are feeling pretty miffed at the system they signed up for, big on promise but short on delivery.
The Declaration of Independence is most useful when trying to interpret the difference between the English and Maori versions of the Treaty. Sways it toward the Maori view.
"Look this can all go round in circles but one thing I can tell you from my inside knowledge, Maori will keep fighting until they receive what they want."
Your inside knowledge obviously comes from a very biased source. I can tell you that there are many New Zealanders that have had enough of the constant demands for more and more resources and power based on a misrepresented interpretation of our history. Until we have one law for all and people are helped based on need and not on race this country will continue to slide down a very slippery slope.
You are right though about us not agreeing. Just out of curiosity have you read "The Great Divide",, "When two cultures Meet "or "Twisting the Treaty" ? You might need two eyes to read these as well!
Conversation closed from my end. Have a good easter and don't eat to many of those wicked white mans easter eggs.
Sure my source is biased but your weakness is to assume I am as well, or have a lack discernment. Will hunt out those books although I have a pretty critical eye for a false argument. Remember all Maori ask for is an equitable justice system as well :-) Oh and I don't eat refined foods, or foods with added sugar :-) :-)
Enjoy your weekend.
Don't just focus on the major centres. The regions are also going up too. Wanganui's prices are exobitant and it is not due to local buyers. A local Real Estate agent regularly tells me about foreign buyers buying properties and then going back home. Some recent ones have been Kiwis based in Oz, but they are buying for investment only. This situation has created a position were the price of houses compared to 12 years ago is significantly out of step with the buying power of the local market.
Real Estate agents love it because they are making heaps, but local buyers struggle to afford homes and worse young families cannot afford them and are being locked into high rents in low quality properties that deny them the opportunity to save towards their own.
I think Auckland has become a global City...and just like cities such as London... the really good areas in Auckland are going to move to a Global beat ...rather than too the beat of our own economic situation.
Comparatively ...Auckland is still a very cheap city ...if u cmpare it to other Global cities. ( was talking to a chinese guy who told that an apartment in Shanghi can cost $3-4 million +... if that is the case..then Auck. is cheap )
So.. don't be surprised if prices keep going up... 10% foriegn purchasing ..with deep pockets ..is more than enuf to keep this moving. ( in light of our supply/demand problems, high compliance costs, snail pace decision making by leaders..etc )
the term "affordable housing" can become a mantra that looses sight of other things....
Do we want our house prices to have a comparative value in relation to other "global cities"... or should they reflect the wealth and prosperity within NZ...???
Auckland real estate must be a wonderful place to store some of ones wealth, as a foreigner, when u look at the Global uncertainty out there.
Would u rather own an apartment in Shanghi ...or a nice villa in Epsom..on a full site..??
I think Tony is asking some good questions.... Nothing racist in it at.. all.
A friend of mine is shifting a removal home to a rural site.. he showed me some of the council compliance costs... even needs engineering reports... Wow.. defies common sense.. The house is fine ..people are living in it up until it gets shifted... I had a look thru his list ...and it smells of bureaucracy and money gouging...... no "ethos" of affordability underlying that ..at all. With these layers of compliance I get the feeling there is no regard at all for cost.... no room for common sense.
Concur.
Need to consider Auckland and its success in a global/regional context.
The time of Auckland as a backwater no-one has ever heard of is long long gone.
It's highly internationally desirable - which is a good thing.
Bring on the Cypriots I welcome them and their haloumi!
SK
For dollar to dollar, even apartment is getting too expensive in Auckland - compare to what you can buy in Brisbane..
http://www.realestate.com.au/property-apartment-qld-kelvin+grove-111708035
Kim is not confused.
He knows full well you can't buy anything freehold as a Kiwi in China. Not that you can buy much freehold otherwise (but discuss that with the Party).
He just doesn't like the idea of the single major Middle Earth money laundry tap being shut off for his uncles among the PLA/Party/Honest and prosperous businesspeople of China
Also, it pays to remember Kiwis are not allowed to be xenophobic. The privilege of unashamed patriotism and rightful urge to nuke Japan as a payback for the rape of Nanjing and the dodgy businesses of Unit 731 can belong to the Chinese only. Recent nuking acts of god and less recents acts of the Yanks don't really heal the pride so they don't count.
Getting foreign based buyers to help more homes get built is a great solution. The amount of foreign $ coming into akl is much higher than anyone thinks. I reckon the truth will come out within a year.
Take it a step further, be entrepreneurial NZ, and tax them for the privilege of being able to buy property here. There are so many countries people can't waltz into and buy up. And where they can, they are usually taxed. Be clever NZ, not thick. Improve NZers lives by running the country like a good business. Tax 'em.
Overseas buyers or not, all it is, is a greater demand than supply. Yes, I do think that ‘overseas buyers’ (including those from the South Island) are causing price problems in Auckland and that it needs to be controlled, but regardless, the underlying problem that is causing unaffordable housing in NZ is still there, namely local government restriction of land supply, both up and out.
However, restricting overseas purchasers to only purchasing new houses is not the answer. This is because new developments are the easiest for council to apply ‘planning gains’, development levies, inclusionary zoning, land value uplift etc. to( see the new Unitary plan but all are non-value extra costs) and are therefore more expense than older properties just because of these extra costs (as well as because of their new ness). New properties are the benchmark (amongst other factors like location) that the older properties are valued against. Even though older properties have not had to pay these extra new housing costs, they benefit from higher prices for new homes. For example, allowing council extra costs, or extras price increases caused by overseas buyers to increase new homes prices by say $30,000, all older homes get a free $30,000 (capital gain) uplift in price by association.
Restricting overseas purchasers to only new homes will not decrease demand or reduce prices. I think the best solution would be one based around restrictions of property purchase for non-residents (citizens excluded). If we think that overseas purchasers are pushing prices up, we ain’t seen nothing yet if those of the rest of the world’s 6,000,000,000 that can, get interested in parking some of their surplus capital in NZ.
Is this integration?
"Those who chose to settle in Auckland came initially because they were advised, or discovered, that it had the edge in work or educational opportunities," Ms Krishnan says. "For migrants from China, issues of access to a vibrant Chinese community were very important."
http://www.voxy.co.nz/lifestyle/work-deciding-factor-migrating-auckland/5/98537
the return of chinese clans
“But when Americans and Chinese talk about ‘democracy’, they are not necessarily referring to the same animal. Democracy as it is known in the West is the product of Roman Law, the Magna Carta, the Boston Tea Party, the Fall of the Bastille, the Industrial Revolution, and the intellectual contributions of many great thinkers, such as Rousseau, Locke and Jefferson. The Chinese are coming from an entirely different tradition.
“The great virtues that the Chinese traditionally have valued so highly are tolerance, patience and non-interference in others’ affairs. There is also the strong individualism of the Chinese, which may seem a contradiction when one is taught that it is the ‘group’ not the individual that is important in China. But loyalty to the ‘group’ is still on a family or clan basis, rather than the vaguer concept of nation. Chinese do not particularly like to interfere in what they see as ‘idle affairs’. Public spirit and civic pride are difficult to grow in this type of soil, and that mitigates against the planting of democratic ideals.
“Secondly, the parental concept of government that has evolved over millennia and survives to this day means government of the people, for the people but not by the people. Essentially, the average Chinese simply wants to be left alone to get on with daily life without outside interference from *anyone*. Democracy is the play-thing of intellectuals, and China essentially is still a peasant society which traditionally has shown little interest in voting, paying income tax or helping to run the country.
pg. 127:
“One legacy of the country’s long history is that behavior is based on the rule of man, not the rule of law. A complex body of nationally-enforced law was not considered necessary in traditional society because society had built in powerful forces of self-regulation. Government intervention was rarely needed because social order could normally be maintained through the family or clan, or other associations and occupational groupings. With the whole family liable to be blamed for the wrongdoing of an individual member [reminiscent of the albanians - h.chick], this was a powerful force to keep everyone in line.
http://hbdchick.wordpress.com/2012/08/08/the-return-of-chinese-clans/
Selling moldy old houses and sections in outer suburbia to offshore foreigners can be sustainable too.
You just need to nationalise them back every once in a while and then sell them back to the locals (a nice side revenue for the government), but not too often, so that there's time for the next lot of them suckers to forget how you've ripped off the previous lot.
For the purpose of these categories, residential property development(s) is defined as property(ies) in which people reside and is subject to the following conditions:
- the residential property must be in the form of new developments on either new or existing sites, and
- the residential property(ies) cannot include renovation or extension to existing developments, and
- the new developments must have been approved and gained any required consents by any relevant regulatory authorities (including local authorities), and
- the purpose of the residential property investments must be to make a commercial return on the open market, and
- neither the family, relatives, nor anyone associated with the principal investor, may reside in the development, and
- the costs associated with obtaining any regulatory approval (including any resource or building consents) are not part of the principal applicant’s acceptable investments.
The potential immigrant must invest at least $1,000,000 for at least two years to qualify - ie if keen on a particluar property investment or development site that may only really be worth say $900,000 a potential immigrant may boost the price they will pay to at least $1,000,000 just so they qualify for the scheme.
So it is not surprising that Asians make up around 75% of the auction room crowds!
In addition "You have been in New Zealand as a resident for a total of 184 days or more in each of the two 12-month portions of the 24 months immediately preceding your permanent resident visa application. You do not have to provide any extra evidence, other than your passport"
Well, Shit-O-Dear, BigBlue, that lifts the lid doesn't it.
You do realise that what you are saying is
- Central Govt has inadvertently set the sale price of every property in Auckland at $1,000,000
- Central Government has it's hands on the property price lever and can raise the entry bar to $1,500,000 and in doing so will automatically raise property prices
- No wonder Bernard Hickey got exactly $1,005,000 for his Epsom Property. Thanks Govt.
- Huge-One has wasted his time pursuing the wrong evil-doer. It's not Local Councils after all.
Iconoclast - Central Government, Local Government, Double tax treaties, Real Estate Agents, etc all contribute to the property price problem.
I don't know of anyone who has ever stated there is intelligent life walking around the Beehive or any other Government Agency.
Allowing residential property investment and/or development over $1,000,000 to be a main investment category of potential immigrants looking for residency is really quite bizzare! It is a wonder there is not a serious protest movement against this! On the other hand if it pushes up house prices for all current owners perhaps most Kiwis are pretty happy with this scheme?
It usually comes to a grinding halt when one (player) owns all the property which then enables them to pillage the loot from the others .. which is where auckland is heading .. except it won't be just one player, but a group of players, including non-resident players .. the game is now in full swing ..
I'm with Kin on this one, the discussion is a bit pointed at Chinese. What I find funny is that there are so many Europeans here when that's miles from here. This place is teeming with them. The problem is that their pound has traditionally stretched further than locals trying to make their way. Plus they're scoring all the plumb jobs, lets talk about that
Overseas buying will increase when our dollar becomes weaker against a basket of currencies. As soon as the kiwi drops sharply then overseas buyers will increase stakes in kiwi properties. At the same time Kiwi's with money should be buying properties overseas while they have strong purchasing power on the exchange rate. People want to invest if its attractive. See what you can buy in Europe or the USA or closer to shore in the Pacific Islands.
What again was so wrong about just continually land-taxing the life out of the foreign non-residents, say at a 4% of latest land value, in addition to any council rates of course...
I mean, why even think to discriminate against the Chinese only? Anyone who's not Kiwi (or Aussie) resident should pay. This would be but one of new sources of tax revenue, and why not seriously tax someone who is otherwise contributing nothing to the local economy (except unnecessarily raising the price of the NZD)?
Any tax, or just income tax?
If we're talking about "any tax", that means we're already a banana state/tax heaven but you can still tax them coming from the other 160 countries or so.
If it's just income tax, land tax is a form of wealth tax and would be totally novel in NZ, so I'd suspect it wont be covered by the existing treaties.
Steve-o - according to the second link there are 71 tax treaties not the 37 I originally stated. It also needs to recognised that losses can be claimed from NZ.
http://www.ird.govt.nz/yoursituation-nonres/double-tax/
http://taxpolicy.ird.govt.nz/tax-treaties
http://www.lowtax.net/lowtax/html/new_zealand/new_zealand_double_tax_tr…
Steve-o it is also important to remember that NZ does not have very many TIEA's (tax information exchange agreements)with many of the countries. This is why the likes of Google and FB get away with paying no taxes in either the country they do business in or their country to which they repatriate profits to.
Clearly Alexanders survey of real estate agents was wrong:
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10879156
China migrants aged 50 and over
2006: 1327 (19.6 per cent)
2008: 1146 (16.8 per cent)
2010: 1817 (34.5 per cent)
2012: 2162 (39.9 per cent)
UK: 1080 (17.9 per cent)
India: 544 (10.4 per cent)
Who's coming (2011/12 year)
40,448 - granted permanent residence
49.5 per cent - approved under family or humanitarian streams
14.7 per cent - aged 50 and over
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