By David Hargreaves
It might be my imagination, but Phil Twyford does suddenly seem to be bearing the countenance of someone discovering the true enormity of the task they've just taken on.
As opposition housing spokesman, Twyford was an effective critic of the National Government's efforts on the housing shortages. I would have to say though that in terms of critiquing the previous Government's efforts on housing, the words 'shooting', 'fish' and 'barrel' rather come to mind. Criticising comes fairly easily when the criticised are doing as badly as National did on housing.
Now for Twyford comes the tricky bit. He's got to try to do the things he said would to fix the problem. And I sense he's already not looking quite so sure of himself and the path forward.
Already the indications are that the path to achieving the goals may have more twists and turns in it than Twyford and Labour hoped.
And the introduction into the fray of one Judith Collins as National's housing spokesperson adds a certain frisson. If (and given her very recent unfulfilled leadership ambitions, I think it is a big 'if') Collins is committed to the task she could be a formidable foe. She has the advantage that, while she was part of the previous National administration, she was nowhere near the housing portfolio - so, can to some extent attack the new Government policies with impunity.
I would suggest Twyford and Labour need to try to keep things as simple as possible - and here I think they may already be going astray.
For a long time now on this website I have spoken in favour of some restriction on offshore buying of housing. But it turns out there are a fair few things - such as trade agreements - in the way.
Undeterred, Labour came up with the cute solution of classifying residential housing as “sensitive” under the Overseas Investment Act.
But this idea, simple in appearance, is starting to reveal a lot of complexities that might, in my view make the whole thing not worthwhile.
Down on it
The proposed legislation has already attracted a lot of submissions, and many of these are quite down on it.
I don't really think that's a surprise in itself. Whenever there's a proposed change there's a knee-jerk reaction. Oh, this won't work. Oh, this will end the world as we know it, etc, etc.
After you've said that though, there are complexities in that legislation that just possibly make it unworkable in current form.
I was really quite taken aback when I first read the draft legislation. Quite simply it had things in it that didn't seem to have been discussed and didn't seem to be there for any good reason. Unnecessary complications.
The two things that really jarred with me - as they seem to have with submitters on the bill - are the requirement for offshore based builders of houses to then sell them (meaning there will be no point in them building one in the first place) and the way intermediaries such as real estate agents and lawyers are being required to almost throw themselves under a bus by certifying someone as qualified to buy a house - with penalties attached if the certification proves inaccurate.
And there's more...
The other big issue with the bill as it stands - and I didn't pick up on this one - is the potential complication for companies with overseas shareholders that might regularly be buying land with a residential component as part of their normal business activities.
Look, we know what's intended here. We know what the perceived problem is. It's individuals based offshore buying up houses, blocking locals from getting them, and then maybe not even occupying the houses.
The trouble is by going down the Overseas Investment Act route and the sensitive land thing it's become much more. It is now the old sledgehammer to crack a walnut.
Already there's a massive wave of suggestions coming into the select committee considering the bill over potential exemptions for the bill - such as for the aforementioned companies buying residential land as part of their normal business.
A symbolic gesture
Once we go down that path then I think it's a very slippery slope. You can end up with a piece of legislation that's go so many flaming exemptions in it you don't know whether it will achieve what it was supposed to any more. If it comes to that you could end up forgetting even what it was supposed to achieve.
Labour was reasonably dogmatic about getting some sort of overseas buyer ban announced as part of its first 100 days. The ban was clearly a kind of ideological signal, a symbolic gesture.
I think, however, this may prove to be a case where the 'less haste more speed' creed could have been applied.
Perhaps Twyford saw some danger here and wanted to avoid the possibility of getting bogged down in his work and that's why this legislation is being sponsored by David Parker (although I guess technically once they put the buyer ban into the overseas investment realm it moved into Parker's domain).
But either way, I think this legislation has got all the signs of proving a major distraction for the Government. Is it worth it?
How many?
We still do not have good reliable data on how many offshore-based people actually own NZ houses and how many are buying them at the moment. I would like to see some sort of register of this information established as a matter of urgency. Rule one - actually KNOW the extent of a problem. If that information could be obtained - and I mean proper reliable information, not the figures that we've seen up till now - then maybe some sort of easier to apply fix could be worked out in terms of restricting offshore ownership.
One of the biggest sources of stress for the, particularly Auckland, housing market has been the high number of immigrants. The Government's gone very quiet on this since taking the reins. A coherent policy that tackles the apparently random way immigrants are currently allowed to turn attendance at tertiary institutes offering 'soft' qualifications into permanent or at least extended residency needs tackling as a matter of urgency.
And then there's the houses. How are they going to get built? Lots of talk. Not too much action yet. That's the biggie. Build the houses. Affordable ones.
These three things mentioned above would be far more important than some sort of pyrrhic line in the sand on overseas buyers that might not even achieve what it was supposed to and will almost certainly come with unexpected consequences.
An Australian solution would have been great
If an overseas buyer ban could have been imposed along the lines of that done by Australia then, brilliant. Go for it. That's not what we are going to get, I fear.
The brave thing would be to scrap this legislation - put it in the too-hard-for-now basket and categorically state that getting on with increasing the supply of housing, uninterrupted, is the priority. But I suspect the Government's pride will not allow it.
I hope I'm wrong but I see a full dog's breakfast emerging out the other side of the legislative process. Judith Collins may be handed some early free ammunition to discharge.
For Twyford and Labour it's looking as though they've unnecessarily placed a big obstacle in front of them - on a housing market course that was already riddled with obstacles anyway.
61 Comments
Labour won’t work with National and vice versa!
Why would,National even contemplate working with Labour coalition when they are going to,end up looking totally stupid for blurting out all the claptrap when they haven’t a clue where to start with any of it!
Anyone in National would’ve had a field day against Twyford and it didn’t need to be Collins.
Defend the coalition if you want or feel you need to, but the proof is in the pudding as they say, and the pudding is not going to be eaten.
At least when two self-interested parties are required to gather votes to stay in power, they have to do something to benefit the majority of people. When there is only one self-interested party, they only need to do enough to hold off a revolution while looking after there own interests.
We shouldn't have party politics for a start off if we want true representative democracy.
All candidates should be standing as independents. An individuals performance is better judged by the electorate every 3 years.......have they represented their electorate in a capable and efficient manner etc. Have they ensured that Constitutional Rights of the people have been protected.....house prices to expensive for your electorate then you're out on your ear........
Without parties we would have to go back to first past the post system which is less representative. If you happen to be say a green voter but live in somewhere like epsom you may as well not bother getting out of bed on election day, ditto if you are a national voter in mangere.
There would also be the problem of who would lead the country.. 100ish truely independant MPs all wanting to sit in the big chair.. we'd never get a PM and deputy selected, and once we finally did one small mistake and the knives would be out, we'd go thru more PMs than Australia has recently and acheive nothing in terms of policy and legislation.
Sorry, but party politics are here to stay until we get direct democracy (the public voting directly on legislation in binding referenda) which has a bunch of fish-hooks of its own.
for a country like china that is supposed to be embracing change and opening up, to in one swoop have a pasty vote to give all the power to one man for ever is a massive step back.
we already had putin change his countries rules so he could be dictator for life all we need now is trump to find a way and we will have a really bad situation.
the problem now for NZ is we are tied to china for so much trade and we now have one guy that can take it all away in a heartbeat, and if you think a trade deal means they have to talk to us about changes you are very very naive
Undeterred, Labour came up with the cute solution of classifying residential housing as “sensitive” under the Overseas Investment Act.
It's time to bury this tosh. The Act has little to do with foreigners investing in houses for the hoi polloi. At the very least, it doesn't benefit the country if a foreigner wants to run a landlord empire in NZ. Secondly, the only successful "affordable" housing initiatives (S'pore and Japan are two perefect examples) are not provided by private investors; they're initiated by govts.
Here’s a solution to the problem - when someone purchases a house they must declare where the money came from and for whose benefit the house will be owned. Any dishonesty in that declaration results in the house being auctioned and all profits being forfeit to the state. We would finally get an accurate picture of who is purchasing what and with what money.
Transparency does not necessarily mean authoritarian.
https://www.theguardian.com/money/blog/2016/apr/11/when-it-comes-to-tax…
The Coalition sat on the opposition benches for 9 years and still don't know what the issues are, or how to resolve them...........I hope JC roasts Twyford.......Twyford along with all the coalition mob have been attending parliament to eat their damn lunches.....how can anyone take them seriously?
Labour, NZF and the Greens all know that the RMA is one of the biggest problems yet they are burying their heads. Who's advising the politicians? Surely these people should also be held to account?
Who's advising the politicians?
Steady there. The people who are advising the government are the people who run the government and provide the options for the government to choose from. They benefit from more government and more regulation. They are possibly the last people who should be advising the government as they have very special interests in the outcomes.
"The only problem is price and nobody really want to see prices come down...How do we solve that problem?"
I would rather let prices go sideways or even come back a bit from where they are and allow people to build.
If we don't allow people to be independent then we have turned a political corner where all property rights can be attacked......as 60% odd home ownership decreases then we become a step closer to confiscation so I'm thinking most people would rather have a property value decline than a government mandated land and building confiscation programme..........
"One of the biggest sources of stress for the, particularly Auckland, housing market has been the high number of immigrants. The Government's gone very quiet on this since taking the reins."
This really does baffle me – and I think I understand all the basic bits and bobs arguments / positions that various interested and possibly self-interested parties have espoused.
Am I correct in thinking there has actually been no core policy or substantive announcement from the new (but getting older) Government on this subject.
Still early days, but I think they are on a hiding to nothing if they maintain this course setting.
Maybe the processing time of resident visa applications? I dunno it might be a bit rough to move the goal posts for resident visa applicants who applied under National. Maybe this lack of reduction inflow is people who have had their visas approved under national and gotten their things together and relocated. They’re not exactly sitting at the border waiting.
https://www.immigration.govt.nz/about-us/policy-and-law/how-the-immigra…
Labour were going to reduce immigration from about 75,000 a year to about 30,000. Winston was going to hit immigration even harder. Now that they are in power they will not do anything about this. Excessive immigration, as we have now, damages an economy by putting a strain on the infrastructure, pushes up house prices and creates speculation on housing. Nearly all our problems in Auckland can be attributed to high immigration.
Why can we not do what is done overseas and allow migrant workers in to build houses etc on the strict understanding that they go home when the job is finished.
My understanding is that the immigation cat has been let out of the bag. No party can afford to upset them, since they are a big voting group. The only way to keep them happy is to let their whanau in. Horsa and Hengist stuff, if you know your history.
Mike Williams (I think it was) pointed out that since we let NZ residents vote, rather than just citizens (unlike other countries), the National Govt had a strong motivation to let floods of socially conservative immigrants in.
That is quite apart from the additional benefit of pushing up the house prices of National-voting property-owning baby boomers.
The % though is quite small, so I doubt its an issue.
In terms of "who" the points system does not allow for your voting preferences just your capability. From this however we should be seeing ppl around 30ish (ie work experience) with degrees or better in order to get enough points. Will such a voting block vote almost exclusively National? from the ppl I know I'd say not.
For me the likely voters will be those who own 1 or 2 rentals as a pension strategy, ie one man band plumbers, city professionals . Now, yes these will be right leaning IMHO and quite a % I suspect.
No. Labour were going to reduce NET immigration to 30k. Even if net immigration were reduced to zero there is still a whole bunch of cultural replacement going on. Just the other day an Indian man was let off by a judge for beating his wife. I look around the office and every group is sitting at their own table speaking their own language. Quantity vs quality.
The true immigration figure is around 130k.
The conversation should be about how to lift living standards in NZ so young people stay here and have kids. Then we don't have to import the rest of the world.
At least Labour is accepting that their is a crisis and trying to solve not only supply but also speculative demand.
Vested interest will try hard to influence the government but Labour and Winston Peter are strong enough not to be pressurised.
Register to maintain data of overseas /non resident buyers was never encouraged so as not be exposed. Why did no expert or journalist put pressure on previous government for the same. Real shame how vested experts and interest come together to avoid what is need of the time in NZ
Immigration :Anyone and everyone knows that people come to NZ as a student NOT to study but for them is a pathway to Residency.
Also many business survive not by doing business but by giving job letter.
So this people are bound to create noise and try ti find reason for government to stop this scams that have been promoted and grown under National.
"We still do not have good reliable data on how many offshore-based people actually own NZ houses and how many are buying them at the moment. I would like to see some sort of register of this information established as a matter of urgency".
Wait a minute didn't National set up a register using the IRD tax requirement back in Oct 2015 or was this just tokenism. Just shows how National can't be trusted to ever be in power again.
To be honest I don't think Labour can afford to pussy foot around on the Foreign Buyers Ban, they have to go through with it for many reasons, one of the main ones being is that we really need it since property still isn't affordable in most NZ cities in relation to wages.
I sold a house in Auckland to a Chinese gentleman about 25 years old. He told me the house was for his grandfather in China who was coming out here. The house was sold for about $1million.
We have since found out the house has since been rented out and the 25 year old "buyer" was merely and agent for someone in China.
The figures for Chinese buying up houses here are not worth anything, they are just propaganda!!
The true figures are much, much higher than we are lead to believe.
1. Let's NOT say that the ban legislation is stricter than required. The so called foreigners will somehow find loopholes and work around the ban; they are taught to break rules. The stricter the rules, the lesser will be no:of crimes.
2.Lets not glorify Australian ban now. It was projected as an example for ban not working to help affordability: that many foreigners buy existing house and minor renovation/a garage was used as new-build loophole
3. Let's not say First we need to have a property register to track the actual gravity of the problem. That could be a secondary task as well after the ban. It's just a nice to have, as the issue more or less obvious
4. If the economy collapse due to ban, or if people dont get mobile phone coverage as(overseas) 2degrees can't install tower, if skilled migrants go back because they can't buy houses without residence.. or even the new property register shows just 3% foreign ownership, THEN the law can be revoked. Now 60% of people wanted this and let's do this
Interesting find 5% of Vancouver houses are empty ... love to see the same done in Auckland ...
1. Find out the extend of empty homes
2. Tax them annually
https://www.theguardian.com/world/2018/mar/08/vancouver-declares-5-of-h…
Fortunately we've just had a census, so I'm sure that information will become available, empty homes would all appear within that. 30 odd thousand of them a few years back, I'd imagine that number has risen since, tax them at exorbitant rates, capital gains of 100% on all foreign owned/purchased properties irrespective of when sold - no need for a ban, just a huge disincentive to buy.
Because the 2018 census was largely conducted online it is going to require some fancy data-matching of completed forms with council rolls - once upon a time census forms were delivered manually and picked up manually - failure to deliver or pick up indicated unoccupied - how will they do it this time
So, you got some forms filled in ....
either the number of forms completed equals the number of letters sent out, or the number of forms completed is less than the number of letters sent out, or the number of forms completed exceeds the number of letters sent out.
It has been determined a number of retirement villages did not get letters or forms, there were whole areas up north of Awanui got nothing - forms or letters
Do you know if every dwelling in NZ actually received a letter
They have people out checking on these things, and address that hasn't filed in a certain time will be checked, and empty lots and construction zones etc get entered into the system.. A friend of mine is doing it.. but its been a complete shambles, they were still hiring and training people several days after the census date, and some were still waiting on the tablet they are supposed to be carrying door to door.
Legacy of National Party to Kiwi.
Buck stop at them
https://www.stuff.co.nz/business/property/102197772/secret-government-s…
Read that article carefully - suggests there is a Black Hat Ops Black Market for unconsented houses in Auckland - can a home which is built without plans, without consents, without council approvals, be sold on completion. Can electricity, drainage, sewerage, water be hooked up when it doesn't appear on the Auckland City council radar?
Looks like they are built to order, never to be sold or transferred. To be rented out probably
Original Article
https://www.newsroom.co.nz/2018/03/11/95866/operation-landing-kept-secr…
Given these complexities Twyford should revisit his Chinese sounding surname strategy. The latest census provides the ideal opportunity. Match this data with the electoral roll and property titles and bingo, you have a list of undesirables. Compel all such identified to register at city hall and investigate the extent of tainted 'foreign' bloodlines in every person on a property title who has one of the officially offensive names.
This Government could just get what it wishes for ............... no new property investors at all .
And then see what happens to the cost of renting as demand outstrips supply on a massive scale with no one willing to risk all to provide rental stock to the market.
Take steps to exclude or discourage the providers of rental housing stock and see what that does to your budget deficit as the homeless problem explodes and they turn to the State to house them .
So Mr Twyford , if you dont want landlords , just ban them , but remember that over 40% of people are renters and we dont have enough houses right now , so banning them would create a proper housing crisis .
This seems to be a common misconception on this site, that if investor types dont own all housing the stock then the housing doesn't exist.
The government needs to temper demand. Investors, immigration, foreign ownership are all part of the problem, not the solution.
The only landlord that is good for society is the ones that build large flats that then houses many residents. But the ones that just buys existing housing particularly start up family homes are real parasites that is contributing to the destruction of family formation. We will have a communist style cultural revolution on our hands if we do not cut down their numbers soon.
Get real Boatman I expect much smarter inputs from you. The chances of any party banning landlords is currently zero. However, we have far too many of them and they surely have not helped to supply an adequate number of residential properties, not to mention at affordable prices. So where is the loss to society as a whole if their numbers are hugely diminished?
@didge , of course I was being flippant about banning investors , but the fact is it is NOT investors or landlords pushing up prices .
The price increases are driven by a whole range of factors , from demand from rampant immigration , huge construction cost inflation , cheap capital , land too expensive to service at anything like a reasonable price , and a fundamental land shortage in Auckland that is imposed by council
Investors are not the cause of this and speculators are also not the cause , but the symptom of a system that is broken
Some folks here think that they can fiddle around with laws on trial and error basis like playing a match of snookers - give it a go, if all fails then change gears and back the truck ... then say " at least we gave it a go - we tried " after the damage is done !... the ultimate proof of laziness and foolishness.
I am sure that even the current Gov is much wiser than such stupid primitive thinking which is holding us back as a Nation.... what happened to the Japanese principle " we start where others finished " ? - what happened to learning from other people failures and experiences ?
What is wrong with adequate planning and proper case studies with calculated consequences and risks ?
The nation's economy is not a matter of opinion or a particular subject or sector - it is a very big machine with complicated gears and all sectors are interrelated and work in harmony ... Hence, the big gears like Tourism, Housing, Investments, the Dollar etc have to be handled with extreme care as to avoid throwing the whole machine out of kilter.
Alas, this is not happening right now and all sorts of little spanners are out to try balancing a huge wheel.
Some folks here think that they can fiddle around with laws on trial and error basis like playing a match of snookers - give it a go, if all fails then change gears and back the truck ... then say " at least we gave it a go - we tried " after the damage is done !... the ultimate proof of laziness and foolishness.
Agree; policies as trial and error could be dangerous
But just consider that as response to commentators who complain about everything govt does. When govt does case studies, they say only committees and studies.. no àctions.
More like team labour is still stuck with the inherit globalist left view of open borders as well as multicultralism is a good thing. No left leaning govt will ever address mass migration issues. This is in reply to someone mentioning why labour is silence on the immigration issue up top.
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