By Bernard Hickey
Labour Leader Andrew Little has signalled he will announce a major new package of measures to address both the demand-side and the supply-side of the Auckland housing crisis over the next week.
He said the bulk of the package would be announced on Sunday in Auckland, but other announcements would also be made on Thursday and Saturday.
Labour took a policy of building and selling 100,000 affordable houses over 10 years to the 2014 election. That policy of borrowing NZ$1.5 billion to kick-start the building and then recycling funds to build more was developed and announced in 2012 under then-leader David Shearer, and Little has been supportive of the policy since.
Little told reporters in Parliament he would not detail the nature of the policy, although he said it would address both the demand and supply sides of the equation and would involve some modest borrowing in the short term.
He also said it would address the issue of speculation by rental property investors using negative gearing. Little has previously ruled out Labour campaigning again for a Capital Gains Tax, but Labour has said it plans to convene a Tax Working Group after the election to address taxation of capital and land.
Little said he didn't think a Arthur Grimes' style supply shock of 150,000 new homes was necessary and he did not want to see prices falling.
"What we do need to see is affordable housing added to the housing stock," Little said.
"We have a comprehensive announcement to make later this week, in fact Sunday is the main course of the announcements, and you will see our comprehensive response to the housing crisis. I am not going to give away details now, but we thought very carefully about what the needs are in terms extra housing, extra affordable housing, extra social housing and the means to deliver that, and you will hear all that on Sunday," Little said.
Training and negative gearing addressed
Little said the package would also address the issue of training and finding tradespeople for a substantial house building plan.
"You will see in our package that we put up, obviously part of the issue when you are embarking on a big building programme is the workforce that goes with it and there will be workforce measures as well," he said.
"There will be measures that address the demand side of the problem. I don't want to get into a whole heap of details now because the beauty of scheduling an announcement is that we all live in anticipation, but Sunday will be the main course and you will see what we have to offer," he said.
"The main thing is this: this government for years now has denied there is a problem, done nothing, and in the last few weeks have made serial efforts to give the appearance of doing something. What they turned up is a hotchpotch of ideas, fiddled and faddled around, and actually got nothing meaningful. They did nothing in the Budget. They had an attempt on the eve of the Budget to scrabble together Paula Bennett's policy that nobody else knew anything about, and this weekend they've announced something that simply will not fix the problems that we have got. The announcement I make on Sunday (and the other announcements leading up to it) will amount to a comprehensive package to deal with the fullness of the housing issues we have in New Zealand."
Asked again about the issue of negative gearing by rental property investors, he said: "If the question is, 'do I have a great deal of sympathy with the speculators and the land bankers and the others who are just looking for capital gain?', no I don't."
63 Comments
Until a vote has no effect over the inevitable crash? Simon, real equity and then speculative equity are quite different. If you paid too much or borrowed too much then a haircut is coming regardless. Many have. Voting wont save us from the monetary disaster we have allowed to take place under the illusion of capital gain. The world tolerance of political BS is changing you may have noticed.
I will be voting for the Party that calls a spade a spade and is willing to address the reason we have a housing crisis and an infrastructure crisis. I don't want to pay road tolls for roads I have already helped pay for. I don't want to pay extra rates and taxes to build infrastructure for the increased population of people that have migrated to NZ. I will vote for whoever says they will turn the immigration tap right down and whoever will stop non citizens and residents from investing in NZ houses and land.
I don't believe NZ landlords and property investors are the problem, they have always been here. Taxing them just opens it up even more for the foreign money that has already flooded our property market. The distortions of fair value have been caused by the abundance of foreign money in our property market. its a no brainer that if a bank in Europe or China won't pay you even 1% interest on your savings that you'll buy a house in Auckland, collect rent of 3 or 4% and then even collect capital gains. If we tax those capital gains, so what? NZ still loses on every angle, STOP THE INVESTMENT.
last night JK called the ministry of works a disaster and something we don't want to return too.
I wish he would learn his history, who built all the things that he has sold or wants to sell at a much cheaper price than private enterprise.
I started my working life in that organization and yes there were rorts but also we used to be able to purchase materials and equipment for all government departments at a cheaper price because we would bulk buy and not pay any duties as we were exempt and not add a profit markup.
also the staff were paid less than private enterprise and it was also where a lot of tradesmen did their apprenticeship, we used to churn out hundreds of chippies, fitters, electricans, mechanics all taught by old fellas, now we just import them
sorry rant over
Well, clearly he's bagging the Ministry from the point of view of 'what profit for hangers-on at expense of taxpayer' rather than getting stuff done. Current model has kept the rorts at a level of corruption the old Ministry workshops could only have dreamed of and stuffs the pockets of cronies, but has almost completely eliminated the 'getting stuff done' side of the equation.
I have also started thinking recently about the merits of an MOW. I get that it was abit of a make work scheme back in the day but given the scale of infrastructure work that is required it would seem worth considering. Lets face it Fletchers is the defacto MOW now and they are creaming a decent profit.
Sharetrader, I also started out in the MOW. And you are so correct, JK loves selling what we built and now he wants to start charging tolls on the roads we built and NZ has already paid for. Meanwhile the little bit of infrastructure his government has come up with is also tolled.
NZ will get a shock if we need a new hydro dam or harbor bridge, people take our infrastructure for granted, its worth 1000's of billions.
Northland, you are bang on.
More than house rise the issue is Fast and multiple prise rise which is happening because of overseas fund.
Get the right data in the public domain but government will either try to manipulate it with words (like it happened with the last overseas buyer data) or delay it if not possible to hide.
Country want to have correct data in front of them. If you are presenting and supporting wrong data means that you have some vested interested that you are trying to hide. We need Honest and Transparent Government.
I did vote for National but than am human - made blunder and this is the view shared by many of my colleagues. Whatever survey may say but this time national will not only lose but will be their worst defeat ever, unless Labour Party goofs up.
The tax playing field needs to be levelled. I cant offset my business loss against my personal income tax. Why should a loss against residential property be deductable against income derived from a seperate source - for one.
There should be no advertised brightline test. If you are an Investor - you pay tax on any gains in value over the ownership term at the time of sale.
This would at least mean that to invest in property it had to be a sound business case - ie make a return like any other business, rather than banking on capital gains as a means to an end.
So he doesn't want prices to fall but he promises more affordable housing. I wonder what this will mean. I'm starting to envisage a whole suite of houses at affordable prices that one has to apply for in order to purchase. In a nutshell, this might be some kind of new state housing solution where the disadvantaged can buy off-the-rack for an "affordable" 600-700K.
I appreciate the unintentional pun, J.C. You are of course familiar with Calvary; and Labour has been crucified for coming to the rescue of SCF investors under its guarantee scheme in Michael Cullen's last days as Finance Minister.
Little should stick with the CGT idea, unpopular though it is. If they gave home-owners enough of a lead-in period, it would fix the housing supply-side issue. Owners would rush to cash-up their capital gains before the commencement date, thus flooding the market. Prices would drop as investors struggled to raise enough capital to buy all the property released. Problem solved, provided the political will existed. Dreams are free, at least.
Any party can promise more houses, problem is its not PHYSICALLY POSSIBLE to build the required number of houses. Even if there was no land issues you don't have the skilled people to build them, its a pipe dream. The solution is obvious and the results are INSTANTANEOUS, turn off the immigration tap. No one wants to address the real issue. Its a no brainier, extra people coming into the country need a place to live so you need extra houses. Clearly the property investors and speculators can see this and its all win win for them and their spending confidence is only boosted making the situation worse ans they KNOW the government is going to do nothing.
I reckon if we were able to magically conjure up 150,000 houses in Auckland some bright spark in Greens would suggest we fill them with refugees.
People need to understand that high property prices provide a sort of bulwark against decline. The nicest places are the most expensive.
Mr Little, as you know and we know that your data of 38% or something about Asian sounding name was correct (Infact what I know from friends in estate agency is much higher now), will you be taking some action to protect local kiwi.
Please answer to the query on Sunday and also what you will do IF elected is fine but want to know, what you have done and will be doing as a opposition to expose national party and force them to act on demand specially speculators and overseas buyer.
Remember National has become intolerable not that much for housing crisis but more for denial and lie.
Labour Party nzakl is bang on. Expose national lie with your data as am sure you must be having acess or information from agency and throw it at national as a challenge and expose them.
It is correct more than housing crisis it is lie of national party that has to be exposed and housing problem will solve.
It is like any story want good to win over evil.
There is massive opportunity in this for Little. National are in full headless chicken mode over this. That said Labour, under Little,has shown a remarkable ability to bungle just about everything.
Shortens performance in Aussie might embolden them to up the ante on a series of 'big government' initiatives.
Oh, it's an Aardman classic. A cross between 'Chicken Run' with Guess Who starring as the chicken, and 'Curse of the Were-Rabbit' starring Guess Who as Wallace.......perhaps there's a Cracking Contraption in the offing. https://www.youtube.com/watch?v=mbBO-hiF8wE
The real Q is, of course, who's Gromit? And is it Tragedy or Comedy? Just don't ask an FHB...
But do Bring popcorn......
Just get Auckland to behave like a normal city. Normal cities sprawl from the suburbs and don't sponsor huge sprawl in little towns miles away. Normal cities doing this, get apartment construction rates 3x faster and an overall construction rate 50% higher than Auckland. If Auckland behaves normally for 5 years, we won't have a crisis.
To do this, to become averagely competent, requires acknowledgement of council mistakes and government mistakes. If Labour can build a competent policy that is coherent between council and government, they can achieve something. Labour's housing policy needs to be launched by Andrew Little and Phil Goff sharing the rostrum.
Arthur Grimes is right. We need the market to actually function and that means removing density controls where people want to live. That is actually giving people their property rights and if it makes economic sense to build a apartment building on Tamki Drive then it will happen.
Not to be negative, but ...I wouldn't bet on this crowd really, I would like to see some concise policy that hits every god damn mark that is needed, but I don't believe this far out from election that Labour really have anything other than policy to prop up a bubble they too are unwilling to help correct. History tells me they too are gutless.
I hope to be proven wrong, but I see a natural popping being our only real chance of anything substantial now. It's just too big and too bad now.
affordable housing can't happen without restrictions on the demand side, the government needs to pump up the supply side as it keeps the economy going. Penalise land bankers? What about the house bankers? This boom is all about the collapse of money, forcing everyone into real estate.
Well, the word affordable is really being used very loosely as we go deeper into this crises, AKL affordable is between 600 - 800K ( because there is no such thing as 500k anymore) ..Half of that price is Land value if not more, so unless councils start pumping sections i the market ( real cheap) like 100k a piece, then talking vaguely about affordability is smoke and mirrors ... There are no decent buildable private sections left in AKL under 400k ( anything from 350 - 600 sq meters) .... I hope we are not going to follow the suggestion of putting $180K caravans on sections to solve the FHB problems. On the other hand, bringing down the housing prices in AKL will effect the economy and might create a slowdown and possibly recession if people are not careful in following their emotions.
If there was a better investment in town other than real estate, then everyone would have cued into it and left investing in housing to the old professionals, but nowadays every one who has a home and is on a combined income of 100-150k gross a year is looking for a place to park the extra cash. Speculators will disappear once we limit the overseas buyers who are paying crazy prices for buying properties ( actually buying land) but that also proved to be a difficult task by itself.... If there is a will to correct previous mistakes, and correct the old processes we might get somewhere, taking the knife to the real estate market is very dangerous and could have dire consequences beyond the current political football.
I dont buy the comment that there are no better investments.
All my mates are doing it, the media are all over it, it must be great. Its investing for dummys who think they are a whole lot smarter than they are, because they are just following the crowd... watch out leemings, the cliff is cominggg, never mind.
The current Listener has useful tips about sharemarket investment and the business cycle. Such a pity you have to possess deep pockets to keep buying in a bear market. That said, the NZ sharemarket has performed relatively well compared with overseas markets. The returns are not as great as for residential property at the moment; but they currently outweigh bonds and are probably less risky in the long term than rental housing.
The key word there is "seems". The housing market to me seems extremely risky at this end of the cycle.
Personally 5 years ago I had the option to buy a house or start a business, I did the latter. Like a house, the value (apart from stock) is all on paper, but roughly its worth 4 x what I put into it, not that I have any intention of realising this.
For sure this is riding the crest of the economic (housing) wave right now. But at least I am in a situation where the asset I own (stock) isnt tied to a volatile market, and it isn't cash in the bank. I also own a classic car that has pretty much doubled in value over the same period (it is a money pit though). Worldwide classics have appreciated hugely over the last 3 or 4 years.
The point of my comment was - there is a ton of opportunity out there, just dont follow the crowd ! I have been lucky, used my connections and networks, begged and borrowed to make it happen.
...I wouldnt bet the house on it but..." For the world to be on a pathway to less than two degrees of warming, most studies indicate the global average carbon price would need to rise to around $80-120 USD per tonne by 2030 (say roughly $150 NZD).
Its $18 now.
http://morganfoundation.org.nz/heads-sand-sea-rises/?utm_campaign=cosch…
Mr Andrew, get the overseas buyer data and prove your point and expose national or now even you are afraid of touching them like national.
That will be shame. This is your one opportunity to win the heart of NZ by being upfront and catching the bull by the horn and win trust
I agree Evita. This is Little's moment to shine. He has really struggled with cut through to date but he is now presented with a guilt edged opportunity to show that he and his party have what it takes to govern in the best interest of all New Zealanders,
Reading the other thread where Key is now essentially down to pleading with Wheeler to step up and take action. We didnt vote for Wheeler we voted for Key and National, and they are now in disarray on this issue which is now out of control. $975,000 for the average Auckland house.... $975,000!.... Unbelievable! House prices rising at 30%pa in Hamilton and Tauranga... New Zealanders living on the streets.... the immigration floodgates remain open...daily announcements of fiddling and tweaking.... and its all Labours fault.
I think history shows that governments come to the end of their natural life after 3 terms and this time appears no different.
So Mr Little the platform is yours what leadership can you offer your fellow citizens....?
Actually very few people living on the streets - none around me. Those in central Auckland are mentally ill and many others elsewhere are there because of poor choices. Migration is high but the floodgates are not open.
If governments end after 3 terms naturally then National can't do anything to change things - doesn't matter what they do.
I'm just getting tired of the overwrought comments. As if hordes of decent Kiwis are living on the streets. Give me a break. We have empty HNZ houses. When I go out everything looks fine and busy. Shopping malls are full. Streets are packed with people going about their business.
Auckland is a busy International city with a British heritage. It's hot property at the moment and will be for some time. It's great and everything is going well. I want Auckland to be expensive. I don't want to turn it into Wanganui I want to turn it into Geneva.You want cheap? Go to Estonia or India. There are many choices for people now.
From now on I am going to fight hard to crush all the Chicken Littles and overwrought hand wringers. They make me sick and I despise them. They will bring us all down.
The group of people in this country that see themselves as the "Haves" is a far larger group than those who consider themselves the "Have nots". If you don't believe me then its reflected in the political opinion polls. This site mainly has the "Have Nots" , especially on housing related issues who are angry birds and keep posting. The haves are too busy drinking champagne and enjoying life and cannot be bothered posting here, they are just not interested. Unfortunately I have noticed this personally, once you cross the finish line called success your whole attitude changes.
Mr Little also see Australian PM speech. Now that he is humbled while waiting for the result in face of defeat
http://www.news.com.au/national/federal-election/counting-resumes-to-de…
Listen to the voice of the people and this is one golden opportunity for you - which will not come again if you miss it as national has lost total trust
Snap, I was just about to post the same link.
Even Fran O'Sullivan has now called Key out. Hardly a bleeding heart lefty.
I get that you have done personally well Zac but surely you are not so blind to see there is a massive issue here where others have been left behind. National have been prepared to ride the wave of contentment built on the personal wealth effect and turned a blind eye to the underlying damage it was doing to our society. Now the horse has bolted they are in full catch up mode. They have had 8 years to address this issue and it is only now that public sentiment has changed ie even Fran O'Sullivan is calling them out, that they start to get urgent. That is not governing it is cynical mismanagement and it is now blowing up in their face.
Its just not the homeless or those paying a kings ransom to bring their family up in a garage (all mentally ill in Zac's blinkered world) that are effected. Witness the GDT this morning and meat schedules that are dropping at a time of year when they always rise. The $NZD automatic stabiliser that would normally kick in to assist the actual wealth creators of this country has now been disabled as the carry trade feasts on interest rates that are artificially high due to the Auckland housing behemoth. This is a seriously unbalanced economy and it is the direct result of a lack of leadership.
agree, if he acted a lot lot earlier with strong measures, ban foreign purchases, lower immigration, built houses, do away with tax advantages for rental housing over owner occupation (or level)
the OCR would be 1% lower and our dollar would be much lower to assist our biggest money earners of export
dollars.
as JK says to the opposition but does not follow himself
learn economics 101
Sunday will be make or break for Little Andrew.
Can he stand by his statement of overseas buyer or was it Asian sounding name by 39% which has gone up by now but the question is will he have guts to call spade a spade and entire nation knows that one of the major contributing factor to the housing bubble is that 39% which have gone up.
Know few people in Real estate agency and they all vouch that in most office those buyers are 80% to as high as 92%.
What we want from our leader is Truth and transparency.
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