By David Hargreaves
So, it is John Key - husband, father, global foreign exchange expert, prime minister and now moonlighting as a ditch-digger.
I'm not sure how emboldened members of the National Party caucus feel when it comes to offering their leader advice - but if there are some suitably brave souls they might be suggesting that the PM would be well advised to stick to the day job.
As far as that whole ditch-digging thing goes, the basic concept of putting the shovel away once the hole you're standing in becomes cavernous appears to have escaped Key in the past two days.
The Prime Minister's willingness to bury himself in the finer details of housing affordability demonstrates two things in my view: First, he sees housing as a real issue that could hurt National in this election. Second, he doesn't trust other ministers in his team to be able to deal with the issue.
Problem is, the PM ain't making a great show of it so far either and it will be interesting to see what the various opinion polls covering this week in politics reveal.
I can't readily recall Key making a bigger hash of an interview than the one he gave to Radio New Zealand's Guyon Espiner yesterday.
The PM made the cardinal mistake of repeating in an answer a word that had been put to him in a question. To whit Key said there was no "crisis" in housing.
It's public relations training 101 that under no circumstances are inflammatory words repeated by an interview subject in their answers. It's the old: "I don't beat my wife" thing, in which the answer becomes divorced from the original question.
So, in this instance the headline is: PM denies crisis, which, human nature being what it is, immediately has people asking: "If the Prime Minister's going out and saying this is not a crisis, does that mean this is a crisis?"
I'm not sure what possessed Key to do that interview, but would suspect that his finely tuned political antennae has well and truly divined (undoubtedly with the assistance of ceaseless party public polling) that housing is a real problem area in the court of public opinion.
This would be why National has steadfastly tried to avoid the subject and is prepared to put the party leader up himself if any fires need dampening down.
The trouble is, I suspect this is one argument the PM can't win. And all his subsequent efforts to justify his position are likely to make things worse.
It's true that for a long time this country has had relatively expensive housing. But the PM's efforts to draw fire from his party by criticising what happened under Labour aren't likely to convince anybody.
The now too-often repeated mantra that houses went up 96% under Labour but have gone up 'just' 28% under National manages to somehow be both meaningless and misleading.
Anybody who spends any time dealing with percentages knows that they are totally irrelevant unless you relate them to something. So, it's 96% of what? And 28% of what? And what about some sort of apples-for-apples time comparision - given that National's been in power for just on five-and-a-half years and Labour was in for nine years?
To give some perspective, the Real Estate Institute figures to which these percentages obliquely refer show that in November 1999 (the month Labour was elected) the median house price in New Zealand was $172,000. In November 2008 (the month National was elected) the price was $337,500.
Therefore in the nine-year term of the last Labour Government house prices increased by $165,500 - or 96.2%.
As of April, National had been in for five years and five months, give or take a day or two.
In that time the median house price had risen from the aforementioned $337,500 to $432,250. This is an increase of $94,850, or 28%.
To put it another way, house prices went up at a rate of $18,388 a year under Labour. Under National that's running at about $17,500.
If the percentages are put away, it can be seen that in dollars and cents rises, National's only just doing a bit better.
But that's a bit misleading too.
Go back just two years to April 2012 and the median price was $365,000 because the market was still recovering from the impact of the Global Financial Crisis (now that was a 'CRISIS'). So in the past 24 months the national median price has risen by $67,250, or 18.4% - and at a rate of increase of $33,625 a year. It's the latter sorts of figures the public are reacting to.
Auckland prices
It's also worth breaking out figures for Auckland. It's the largest city. About a third of New Zealanders live there. And it is identified as having had a heated market in the past year or two.
Believe it or not, Auckland actually slightly lagged (in percentage terms) many parts of the country for house price increases during the bull market of the mid-2000s.
In the time of the last Labour Government, the median house price in Auckland went from $237,250 (those were the days!) to $425,000. The percentage increase was 79.1%, though the dollars and cents increase was a more imposing $187,750.
Under National, the Auckland median has risen to $611,000, for a 43.8% increase - or in dollars and cents, $186,000, IE nearly as much as under Labour in three-and-a-half years less time.
Looking again at the two-year timeframe, the Auckland median's risen from $490,000 to that $611,000, which is a 24.7% increase - in just two years - worth a whopping $121,000.
'Nothing to see here'
Is it any wonder people are concerned and that the efforts of the Government to give this issue the whole: "Move on, nothing to see here," treatment appear to be struggling.
I wouldn't call what is happening a crisis because I don't personally view owning a house as central to my psyche. But you would have to say that for a lot of Kiwis it is. And the idea that the concept of owning one's own home is now becoming a mirage is genuinely upsetting for a lot of people.
The upshot is that this issue is not going to go away.
I predict that the Prime Minister personally is likely to beat a quiet retreat from the issue after this week.
But that doesn't mean the Government will let Labour get away with setting the election agenda through housing issues.
Wiggle room
The loosening of the purse strings in last week's Budget has given the Government some wiggle room.
I think it's almost a given that there will be some housing-friendly measures thrown at particularly the first-home buyers in the run up to the election.
The Government could have done this in the Budget, but that would have given the Opposition more time to react.
By making the changes as late as possible in the run-up to the election - and maybe the PM will be happy to re-emerge to announce them - National will give the Opposition too little time to react and will give itself the chance of hosing down this particular forest fire of public opinion.
82 Comments
Or looked at it another way. Every home owner in auckland has had their net wealth increased on average by $186k, $121k of that occuring in just the last 2 years.
That is a significant wealth increase in a short time. Only precedented by the 2000's property boom.
What happens when a third of NZ population have been given $186k free net wealth?
Who gained even more than this? Property investors owning 5, 10, up to 50+ properties. This means millions of dollar gained over past 2 years alone. Only one thing these PI's would consider doing with this equity. They invest in higher yielding secondary cities, hence the ripple effect.
Cant speak for kimy, but I have never 'flicked' a house to anyone. Have only ever bought property.
Normally involves transforming a tired old house that owner ocupiers think is gross (or wrong colour, or not 'light' enough etc etc) into a tidy, healthy, insulated, heated rental property for a family who doesnt have enough for a deposit to rent. I see security of a place to live for my tenants as very important, so leave them a lone so long as rent gets paid. I'm offering use of my expensive asset, this is of real value to them. I have the excess liquidity needed to pay lump sums for rates and any unforeseen maintenence to ensure continuity of a dry, warm, safe house to raise a family in. I have the burden of all maintance.
If you are a landlord who doesnt consider your tenant as your most valuable asset (they are your customer, and the customers always right), and dont keep them happy, then you cause all sorts of problems for yourself. The number of poor landlords out there just makes things easier for ones like me; And if more people like me got into owning a rental or 2 then the standard over all would lift (I'd be competing against a higher level land lord that also brings quality properties to market) for tenants and rents would be relatively lower too.
Glad you are least comprehend that capital gains are immoral, or do you really? And yes I have thank you Bob. Believe it or not some people are not focussed on material wealth, but then I wonder if you are capable of comprehending that also.
Funning thing is that for all the clambouring most people do for material (and virtual) gain, the best of life isn't available to those people. If that is your perspective on life you can be guaranteed to die not quite as rich as you would have liked :-)
That's good to hear. As long as you've sold all your property/appreciating assets and got no cash in a bank or any other investments that pay unearned interest (like those pesky AECT dividend cheques that Auckland residents automatically get). As long as every cent you have comes directly from your own physical effort. Then you're living the dream - well done.
Think aucks done it's dash for a little while. Look elsewhere at this point in cycle to build equity to buy more in auck in 5+ years time.
We have one more OCR rise than that's it for a long while. New normal sees 3.25 ocr as neutral in global context. Certainly wont be anymore until sure auck house prices aren't falling. Remember is 2010 they added 50bps and saw house prices drop, then used the chch earthquake as an excuse to slash 50bps off again. We simply will never get to the very high interest rates we saw last cycle. Work on a 8% peak for your own borrowing, but would be very suprised it they got much higher than 7% over next 3 years
Simple political calculation. More of his voters own houses than do not. People that own houses that increase in value are happy - although that makes no sense unless you are an investor.
Key just forgets that there are quite a few young people out there that are _really_ pissed off, and will vote for whichever party solves the issue - yes even will stoop to NZ first.
If "owning one's own home is now becoming a mirage" and the govt has no plans to tackle it, (certainly there are benefits to business owners of a more mobile workforce), then we need stronger tenancy laws.
In this country i consider owning your own home essential, because you have so few rights as a tenant. The landlord can come onto the property frequently and without notice. They can give you 40days notice when they require the property for long-lost Aunty Winnie who's come back from Samoa. I can't imagine coping as a family and having to find a new home that's in zone for your kids schools with 40 days notice.
The landlord can't "come onto the property frequently and without notice". They have to give 48 hours notice and can't conduct inspections more than once every 4 weeks. Also, if a family member is going to move into the house, 42 days notice is required, not 40.
Having said that, I agree with your sentiments.
The landlord can come onto the property without notice although "they do have to avoid unreasonably interfering with the tenant’s peace, comfort and privacy in use of the property."
Our current landlord and his workers are often turning up unannounced to do work on the land. Pisses us right off, but little we can do about it, not taking them to court to try and prove "unreasonaly interference with our peace". What's reasonable, the landlord wants to make a profit and so is doing some work on 'his' house, sounds perfectly reasonable to him.
The 48 hours notice thing is about entering the house, for that they do need notice.
http://www.dbh.govt.nz/faqs-tenancy-problems-disputes#problems3
entering their house (ie living area) and inspections. Although safety and gross probelms there's reasonable leeway but if you do that try to get a cop to come with to stop any disputes later. And if it's not serious enough to warrant talking to a cop, it's not serious enough to invoke this emergency clause.
If you have to confront "unnecessary interference", it doesn't count for tradies or other professionals (ie where scheduling can be a nightmare), but it certainly covers DIY landlords. But more importantly it's dealt with through the disputes process and tenancy tribunal, not through the courts proper. Get legal advice, generally there's a community law office near you that will let you know how strong your case is and which lasyer would be suited to advise you further. Again if it isn't worth the $100-$200 to get the advise and lodge a claim with hte tribunal, then it's not strong enough "interference" to win your case.
Depends on how secure you feel in court.
If the cousin doesn't move in and stay for a while, take the matter back to the tribunal. They're not tightly bound by NZ legislation, as long as the matter falls in their jurisdiction, so that would prove that it was a contrived and deliberate ploy to violate your rights under the residentual tenancy act (which allows you the right of 90 days), which puts it solidly into the jurisdiction of the Tenancy Tribunal. But you better make sure your nose is clean, and you're not telling porkies/twisting the story.
If you can prove that your 90 day right was deliberately violated, there can be serious damages and fines awarded.
As usual, always seek independent advice, and the lawyer that represents himself has an idiot for a client.
If the cousin doesn't move in who cares? I've had to move out and already signed another contract with a new landlord, the damage is already done, i've been through the hassle and expensive of moving, what will going to the tribunal get me except for more lost wages from time off work?
And how am i going to know if the cousin does move in? Knock on the door and ask to see the new tenants passport, and then keep knocking on the door for a few months to make sure it wasn't a ruse where the cousin just stayed a few days?
That rule is so hard to disprove that it basically means any landlord need give only 42 days notice.
The law should simply be that the landlord can't come onto the property without 24 or 48 hours notice unless it's an emergency where the property is at risk of imminent damage. Then we could simply tell him no, this is our home, and you can't come around without giving us notice. Safe in the knowedge that if he kicks us out, any new tenant he gets would say the same thing so it's no use for him to kick us out. Having to take him the tribunal to enforce "unreasonaly interfering with my enjoyment" is far too woolly, most people wont do it and so if we do kick up a fuss the landlord can simply give us 42 days notice and get someone else in.
The deliberate and _constructive_ violation of your rights opens up the wallets for punitive damages.
And yes it is up to you to prove it.
Empty house day 43 and day 91 is good start. Go up and introduce yourself as a nieghbour, or someone with a lost pet. Get someone to photograph them. Tell them you're thinking of buying in the area and if they know who the landlord is ("no" hmmmm... then subpeona them)
On the landlord side, the unreasonably interfering is also too woolly, as it gives the tenant to much power to complain about something, or to smash something and then stop the landlord finding out or repairing it.
One time I have heard it used was from some female university friends, their landlord was in his 60s and used to always be fixing or paint or gardening around their abode. Downpipes would be fixed (fiddled with), weeds pulled then next day some would be moved into a trailer.
When one of them had a male visitor they received a letter regarding "appropriate behaviour". If a friend stayed overnight for any reason they'd get a letter reminding them of the tenancy limit of three people.
but the real cincher, is when none of them were home the landlord wouldn't stay and work. He'd only "work" on the place while they were home... he claimed in the hearing that this was for security reasons so they were sure he didn't interfere with anything of theirs.
Basically he was trying to run his own little fantasy harem of teenage women, so the courts decided this was not "appropriate behaviour" despite it all being technically legal.
JK's steering the media? le gasp. Next you'll be telling us that the government uses its power and the media to fufil propoganda-style brand control.
The only thing that upsets me is that after the education system...that there are still gullible enough people that believe it (the articles in the media or information from government) at face value.
Seriously for once.
Today I had a talk with a Charity Shop, one that does immense good in the town and elsewhere in the world.
It will likely be closing down due to major upgrades required to the new Earthquake Standards.
The elderly Chrurch goers are worried they will be out of a job.
Not that they will not be paid, because they are not, never have been.
They are worried that the needy will lose the Charity required to keep their heads above water.
Strange, but true.
The young are not interested in helping it seems, nor are the Government.
Even the Church Leaders want them to quit. They cannot afford the upgrades.
Un-intended consequences.
A few charitable observations.
Well wasting money on the waste that this country supports, yet bleats that they are poor, would go a long way in some other countries.
Whilst the chances of poor granny being killed in an earthquake in 99% of new Zealand is actually quite minimal hereabouts, plus only open 6 hours out of 24x5 days.....to boot.
The odds are astronomical, not calculable, to be charitable.
(The odds of an MP getting no pay rise would be similar....Sarky, but less beneficial)
The odds of Granny keeling over from old age are infinitely more likely, plus they also like what they are doing and do not give a rats ...( I leave it to your imagination).
Like Christchurch, they would probably lose their homes, their life savings, their insurance premiums and be left homeless, waiting for a politician with a fat gut and a fat pension to get off their big fat (Yet again, here I leave it to your imagination).....and collectively fix the big issues, once and for all, starting with themselves.
We even subsidise poor millionaires with delusions of grandeur as they milk this country for all it is worth.
We even have subsidies for politicians who are the biggest waste of space, time and money this country has ever known. As are their cohorts in Corporate subsidy and Housing Subsidy and Mongrel Mob support.
I would prefer to get rid of all the above, to be charitable.
But I would actually prefer if some people got off their arses and helped, not hindered.
But the odds of that is even more unlikely.
I just thought we could start a dialogue, maybe get a banker to donate his ill gotten gains.
Or a fund to aid the willing Charity workers, not the takers of this World, God only knows, it ain't poor Granny.
He also kept trying to say that he doesn't believe houses in Auckland are more expensive than Sydney or New York (on the TVNZ interview I think it was), - so what? no one ever said they were, they just said they were less affordable not more expensive, and the least affordable in the world.
There is a big difference, or course the interviewer on TVNZ was either too scared or too asleep to pick him up on the glaringly obvious difference.
It was a difference that Key himself would have been fully aware of, but he, as always, likes to be deceptive, and seems to get away with in very often.
TVNZ have obviously been given a directive by their leaders (the government) not to criticise the National government in any way, they have become a joke, never running any stories that criticse the government in any way unless it's something so big they can't ignore it, they're a waste of time.
Yeah I couldn’t believe the pearler he came out with the other day on TV as well, basically chastising the aussie labour government for running up 50 billion in debt during the GFC????
So why was it ok for his government to do exactly the same thing? Run up 50 Billion in debt? And that’s in a much smaller economy.
Sometimes I wonder if he’s actually for real, still some people seem to buy it.
I think he's for real, when we see the real person behind the facade and it isnt pretty.
What did he make his money on? financial trading, so we basically voted in a parasite because of what looks like superficial charm and appeal to the centre swing vote. Much of that seems to be down for the "need for a change" and a small tax bribe.
Sadly the left is no better, I followed Cunliffe on FB for a few months, he is as bad if not worse. Got to wonder, so we get what we deserve. Im kind of pulling my hair out because no matter which way you look the Pollies are pretty much not worth my vote. Even the Green's seem to be starting to throw away integrity to gain votes by making promises to get to 15% and 20MPs.
blah....whats the point.
regards
I've thought about it, but I don't think a "fk the government party" is going to win enough to make it past the 5% post.
Also thought about volunteering for Finance Minister for the Greens...they certainly need a real one and can't do much worse than what they got. But I decide in the end it might be more of an oxymoron type post (like military intelligence or government objectivity) so better to leave the present incumberant in their place, whomever it might happen to be.
Blame democracy. They only act that way because average joe blogs doesnt get the big picture, is selfish and small minded and is more impressed by a smooth quick rebutal than actual substance.
If the all blacks were selected on public popularity we would have the same problem.
Less focus on being better at rugby, and more stunts to impress average joe blogs who couldnt tell a good rubgy player from a bad one.
In NZ because of the lack of checks and balances in the political system all long term PM's become like Muldoon. It is like someone being promoted to sergent in the army, initially their personality doesn't change but the position means they need to act bossier. Over time this stops being an act and they develop a bossy personality.
The problem we have in NZ is that power is so concentrated in the PM that there is few constraints on their bossiness. In particular they do not need to give a rational account of their actions to anyone between elections. You can see that with John Key. He is becoming increasingly glib in his answers to questions.
In theory civil society is meant to ensure our leaders act rationally. Rule of law, courts, Parliament an independent media and so on. But power is so concentrated with the PM that they can alter and ignore the other players. Rule of law doesn't mean much when you can re-interpret the rules. When rules say Ministers shouldn't favour family members businesses and this becomes inconvenient then those rules can be changed to mean something else....
I think this problem causes a dangerous pattern of leadership in NZ. We go through periods of more interventionist and increasingly irrational governmet- Muldoonism. Then there is a circuit breaker and sudden switch to a completely non-interventionist government -Rogernomics. Society needs good goverance, oversight, public investment in basic infrastructure and so on. So pretty soon you have 'leaky buildings', gridlock and your biggest city CBD with no power. Then interventionist government is bought back by the voters but it gets increasingly irrational....
What to do? Give power to civil society to make it harder for the PM to ignore and change the other players. If it is possible vote for Team NZ rather than Team PM. Don't be afraid of saying the Emperor has no clothes even when they insist they do....
I’m probably too young to remember Muldoon, but I did read his biography. I was left with the impression that despite his overbearing nature, and desire to control, he genuinely believed in the principals of egalitarianism, and fair society, in some peculiar way very much like Helen Clark. I'll probably get abuse for saying that. I think Muldoon would be rolling in his grave if he knew what the National party has now become. Back in the 70’s and 80’s the national party rallied against unions and communists which were rightly perceived as draining the economy. He invested in think big hard assets which he thought wold bring the nation wealth and prosperity in the long term. I get the impression that the current leader of the National party is a complete sociopath, expert in manipulating, and controlling the narrative. It seems that the national party of today represents the interests of the top 1% or NZ’ers and wealthy foreigners. Key is selling our agricultural and infrastructure assets with no logical rationale, he screws around with government surplus when he should be more worried about the current account deficit. And before long he’ll sign us up to a TPPA which will paralyse our government and ensure the long term inequality.
Bob Jones has written a good book on Muldoon that concurs with what you say. In fact he belatedly understood the dangers of the modern monetary system and tried to unsuccessfully extricate us from it. I do just remember him, and his abrasive manner. Sometimes you have to be open minded and throw pre-conceived perceptions or opinions out. Most (around here exspecially) seem incapable of that. I would go as far to say, based on what I have read, the Muldoon is only one of two outstanding Prime Ministers New Zealand has had.
Muldoon was the first PM I can remember. I was a teenager when he was voted out so maybe some others here have a better recollection than me. From what I read he had irrational moments.
Muldoon for instance pushed through the Clyde dam before the geotech report came through. Thus the dam had massive cost over runs. You can see why when you drive along lake Dunstan. Massive buttresses, tunnels, pumps all to prevent the mountain falling into the lake.
Most of the Think Big projects were timed and located to win key electorates and elections. They were as much about politics as economics.
The Think Big projects of the 70s and 80s were so big they would be like building a 600km 4 laned motorway from Auckland to Wellington. Roads of National Significance, the Auckland rail tunnel and the Christchurch rebuild are puny in comparison. When people say we cannot afford infrastructure to open up new areas for affordable housing they have not considered what kiwis have done in the relatively recent past.
Would it be a long bow to suggest Muldoon was informed by ideas prevalent in his time as advocated by Keynes, and contempory politicians are more inclined toward Friedman thinking?
Dad recalls a local stock and freight operator in our district who was under Muldoons command in WW2, and was a staunch advocate of his leadership qualities in minimising his men from being killed or captured.
"Clyde dam before the geotech report came through. Thus the dam had massive cost over runs."
Reminds me of a certain Minister of Transport from Nationals first term. Approved Puhoi to Wellsford before anyone at NZTA had even heard of it, let alone done a geotechnical report or Cost/Benefit analysis. We are yet to find out how much it's going to cost but it's still progressing at full speed.
considering the project is already being done...
and the problems don't go away without it....
and any subsequent problems might not be foreseen and would have to be dealt with anyway...
probably more effective and way more cost effective without a papertrail which costs mostly of overpaid consultants covering their butts.
...like Clyde, which isn't perfect but it is working 100% more than no dam
But if Puhoi to Wellsford ends up costing $5Billion, what other transport projects could we have had instead? Just as without the Clyde dam taking up resources, what other dams could we have built? Would the alternative spend actually produced more power, as the dams were cheaper than clyde and thus we could have more of them?
Both valid points. I guess there’s a political imperative to act quickly before projects get lost in partisan squabbles, and red tape. Hindsight is a wonderful thing, but the Clyde dam project wasn’t just about the 1970’s energy crisis (which was a huge issue). We had a massive balance of payments problem which Muldoon was trying to deal with. It was anticipated that the surplus electricity would be used to diversify the economy into Aluminium smelting. It was a good solid idea. With respect to the present day, what is being done to address our balance of payments problems, a $5b road?
Yes the balance is an issue, but if we produce & sell more our export dollar rises.
what they trying to do is stimulate internal markets, but infrastructure is the only thing that government can get away with investing in (that or social spending).
There are other projects of more importance but it all fails when it hits the bureaucracy.
Just like when my local council repaired and resealed a local dead end road rather than the more major roads. The people involved at the council level all have their KPI's, all the paper targets were met; number of kilometers, narrow, hadn't had recent work, proportion of rual road done was low ... thus it appears perfect candidate.... that they spent almost a million dollars on a road segment that sees under a dozen vehicles a day at best, and was otherwise in perfect nick....
Other roads however are in much worse condition. But! They had recent patch ups, work had been done in their area in last few years, road was wide and appear to be a poor surface as it frequently needed repair (actually due to traffic load). Thus this piece was passed over this time around, as not enough money was allocated for redo-ing that style road.
So the bureaucrats did their jobs perfectly, ticked all the correct boxes, wrote out all the prettiest of reports with all the correct fonts and best picture stock. It even had good weight paper, and plenty of white space. So job well done there, bureaucrats......
The question to me, is the $5b road actually going to solve any problem?
Of course it solves a problem. On the 27th of December a small chunk of Aucklanders will get to their holiday batches 15 minutes earlier.
The real question is does that represent value for money? Unfortunately the bureactrats at the NZTA used to be able to answer such questions with cost-benefit models, and fund the projects that had the best return. But for the current lot running the show that wasn't good enough, they wanted to introduce politics back into road-building and brought in the RoNS program where the Minister gets push through their pet projects without any evidence of problem solving efficiency whatsoever. NZTA now have to build roads 'because i said so'.
Value for money's the thing. It would have to be done one day, so that's ok-ish.
But like you say... A few holiday people (and the locals) are the only ones positively impacted. Makes it hard to justify it as a priority.
Thats why I find our current "power by popularity" system rather unethical. It's a model that eventually supports "pet projects" (and lobbyist support projects) over holistic and public good. It puts the instant gratification of the few ahead of the delayed gratification of everyone - a delayed gratification that is far superior for everyone including those few. That behaviour ripples throughout the whole system, as the chase for support and power and opportunism push aside any longer term effectiveness. Things like IRD tax grabs that undermine the very production systems that need the same money to grow to produce greater revenues...all in a chase of a greater take tax, and to appease those pet projects.
Admittedly, it IS the Ministry system which was supposed to be the checks and balances against the bureaucracy. They were supposed to be able to identify when conspicuous need occured and direct government resources to alleviate the problem.... but I think the perfect example of how this works is when the Minsiter that Was Finance Trader speaks about Property Trading.....is not good....
We cannot blame John Key or National for Auckland house prices .
The free market mechanism is at work , influenced by cheap money , high migration , lack of supply , and rorting and incompetence at Auckland Council level .
Not to mention we had the GFC when all new builds stopped and developers went bankrupt , and now we have a revived economy that has started to grow
Capital gains taxes wont stop or solve any of the above contributing factors .
Boatman - how many times does this need to be explained to you? I realise that the concept of a median is lost on you, but clearly the understanding of simple concept of "free market" is too.
"A free market is a market economy in which the forces of supply and demand are free of intervention by a government, price-setting monopolies, or other authority."
Can I buy a padock on Auckland's outskirts and build a home on it, increasing supply?
NO. PLANNING IS CONTROLLED BY THE GOVERNMENT AT A DICTATED PRICE THEREFORE IT IS NOT A FREE MARKET.
Oh yes we can blame John Key for the tulip mania Auckland housing bubble. When Alan Greenspan lowered interest rates in 2002 it set off a global asset price rally which lasted until 2007, and kicked into high gear thereafter. You could forgive the Helen Clark labour government of the day for not seeing what was happening and changing government policy. But now we’ve had over a decade of monetary easing! A GFC which is by no means over. The dangers are so obvious, there are now websites and books devoted to predicting the fall of the US global reserve dollar, and collapse of the Chinese economy. By not doing anything to moderate the flow of rent seeking capital into the NZ housing market, National has basically ensured that the next crisis will decimate the New Zealand economy., bail in’s and all.
I'm with Key. There's no 'crisis', that's emotive BS. There are some overly expensive houses in desirable Auckland suburbs that are out of reach of average Jo. Demand is high as everyone freaked out and stopped building for 5 years and a big earthquake changed the dynamics. Time will sort it out. Prices in Auckland will settle. Theyre unlikely to devalue, more likely to stagnate until inflation catches up. I have absolutely no sympathy for someone who can't save a 20% deposit. If you can't save a deposit its unlikely you could afford the mortgage anyway without changing the spending habits that prevented you saving the deposit in the first place. Or go buy a shit box in a shit suburb like every other FHB used to do before we all decided we needed to look good and live beyond our means. People on here seem to be so worked up over nothing. Breathe deep, chill out and carry on. Nothing bad is going to happen any time soon. Our economy is strong and our government seems to have done an exceptional job in extraneous circumstances. I'm over comparisons of Labours last term to Nationals term. The climate has been so completely different that comparisons are meaningless.
Does the report take into account median house size? Median section size? A newly married couple I know recently borrowed a deposit so they could buy their first home as they hadn't saved enough to buy the house they wanted. It was 3 double beds, 150sqm, double garage, newly renovated to a nice spec, 600sqm section, fully fenced, decked, driveway. They also borrowed money to furnish it and update their cars. He's employed as a painter, she sells phones. This is the true madness... My first house was 60sqm stripped down to the bone, attached unit on cross lease title with 8 other units... When was the last time anyone saw that sort of development being done. No point, no demand and/or no return. Certainly none in my city in the last 20 years. Everything is high spec, pimped out and lowered. Absolutely no sympathy. Suck it up and go rent if you can't afford your palace. Put your money into Kiwisaver and get your minimum 50% return on investment. According to that report, rental price compared to purchase price is in your favor anyway.
Not many units going in today, that would be luxury for todays low-end market, not enough space left so most of it is high density terraced housing these days. There's loads of it going in in Auckland. Single garage on ground, living on top, with balcony view over the carpark, and bedrooms on top of that.
Stuff like this
https://maps.google.co.nz/maps?q=26+Rossmay+Terrace,+Auckland&hl=en&ll=…
and this
https://maps.google.co.nz/maps?q=26+Rossmay+Terrace,+Auckland&hl=en&ll=…
If only todays FHB could afford a 60sqm unit, ground level living with a bit of a garden. You were lucky.
The market is what it is so suck it up. You cannot buy a Porsche if you only have enough money to buy a Toyota so you have to get realistic with your first house expectations and yes its not going to have six bedrooms, 3 bathrooms, 2 lounges and a pool but thats the way it is. It's simply a worldwide problem, more and more people and less and less land and New Zealand has turned into a desirable destination with our current immigration policy. I bought a house 10 years ago and grafted to pay it off with 80% of my salary each week, the final payment is next month. It's time to party.
It's not 'simply a worldwide problem'.
In Germany they are worried about a bubble because prices in Berlin have gone up 23% in 5 years!
http://www.ft.com/cms/s/0/b7c85160-144e-11e2-8ef2-00144feabdc0.html#axz…
It would be car ownership crisis if for the same cost of a brand new Porsche in Germany, here you could only buy a beat-up Corolla.
Wow one of the posters Till S said you can buy residential buildable land less than an hour from German cities for less then 10euros a sqm. So a 1000sqm s section would cost $16,000NZ! Did he mean 100euros a sqm? That would still be cheaper than NZ.
Do any Germans read interest.co.nz and like to clarify?
"Take the example of a typical detached, one family house of average size; one with about 125 square meters (ca. 1,345 sq. ft) of living space, including garage. Such a place in the former West Germany cost about €255,000. But prices varied considerably by region. Such a house in the north cost only about €185,000. In the west the price was about €235,000, and in the south it was significantly more, coming in at just under €310,000. In cities of more than 500,000 population the price was about €300,000.
The city-state of Bremen was the least expensive of the larger cities. The house described would cost a mere €185,000. At the other end of the scale the Bavarian capital of Munich was far and away the most expensive. The house described could cost €635,000! The price per square meter for privately owned property was only €975 in Bremen and around €2,050 in Munich."
http://www.howtogermany.com/pages/housebuying.html
300k NZD at lower end for 125 sq m house.
a little over 1 mill NZD in Munich.
Nothing to far away from whats currently seen in nz
You're only telling half the story Simon. House prices might be similar, but incomes are a long way apart. Compared to our incomes, our house prices are ludicrous. Nice try though.
Taken from the OECD website:
In Germany, the average household net-adjusted disposable income per capita is 30 721 USD
In New Zealand, the average household net-adjusted disposable income per capita is 21 773 USD
http://www.oecdbetterlifeindex.org/topics/income/
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