Prime Minister Jacinda Ardern has confirmed the Government will unveil measures to increase the supply of houses in the May Budget.
She didn’t say how any new funding in this area would be allocated, but indicated she saw scope for central government to work with local government on addressing infrastructure problems stymying development.
Housing Minister Megan Woods is also due to release the criteria of a underwrite she pledged to provide developers struggling to secure finance. The criteria of this 'Residential Development Response Fund' was meant to be published in November.
RMA update
Ardern said “high-level” decisions around repealing and replacing the Resource Management Act (RMA) would be announced in February, with a draft of the first bill due to be published in May.
The Government has agreed to broadly implementing recommendations made by a major review of the RMA, led by retired Court of Appeal Judge Tony Randerson.
The review suggested the RMA be replaced by a Natural and Built Environments Act and a Strategic Planning Act. It also suggested a Managed Retreat and Climate Change Adaptation Act be created to effectively address issues around who pays to protect, and in some instances move, homes and other property away from areas at risk of flooding due to climate change.
Robertson undecided on DTIs
Arden also confirmed what interest.co.nz reported on Wednesday, that announcements around what the Government will do to cool housing demand will be made in February.
Finance Minister Grant Robertson late last year received advice from Treasury and the Reserve Bank (RBNZ) on the matter.
He on Thursday said he hadn’t yet decided whether to give the RBNZ the power to restrict banks from lending to homebuyers seeking a large amount of debt compared to their incomes.
The RBNZ asked Robertson to give it these debt-to-income ratio restriction powers, saying it was happy to give greater consideration to house prices through the way it regulates banks, not through the way it does monetary policy (IE controls the cost and supply of money to meet its inflation and employment targets), as Robertson proposed.
Politicians have historically been opposed to debt-to-income ratio restrictions, as these would disadvantage first-home buyers.
Other potential demand-side changes
An extension of the bright-line test is also on the cards. Treasury is looking into the matter. Robertson in November made the argument Labour wouldn’t break its “no new taxes” pre-election promise by tweaking an existing tax.
Under the bright-line test, anyone who sells a residential property within five years of buying it, has to pay income tax on any gains made. The rule excludes the family home and inherited property.
Ardern in November also hinted the Government was considering changing the Home Start Grant. Currently, the grant is available to low-to-medium income earning first-home buyers who buy cheap houses.
Ardern on Thursday cautioned the Government had to consider the supply of housing before providing more support for first-home buyers, and thus boosting demand.
'Unsustainable'
“The economy has held up better than expected. However, it has exacerbated this long-term issue of housing affordability,” she said.
“Our decisions on the economy - particularly through Covid - they have been the right ones. They mean we have lower unemployment and higher growth than nearly every country we compare ourselves to. And had we not taken the steps we did, we would be standing here with a very different set of problems on our hands.
“But nevertheless, we can’t stand by while house prices increase at the unsustainable rates they did in 2020.”
Her comments came as members of the Labour caucus met for their annual retreat in Nelson.
The headline announcement of the event was outlining the regions some of the 8000 new public and transitional houses the Government has already committed to building, will be located.
For more on this, see this document.
78 Comments
I watched the press announcement video over at Granny Herald. When inviting questions, one of the journos asks something along the lines of "wasn't this public housing plan already announced in 2020?"
The video is edited to cut off and end before Ardern's response. The media tactics team must have been on full alert.
're-announcement'
https://www.newshub.co.nz/home/politics/2021/01/backlash-over-labour-s-…
Good on the media for pulling them up on this malarkey. What a pack of amateurs. They obviously think we're all stupid.
Ardern seems relieved and in her zone when she gets to talk about what msg she sent to Biden. Virtue signaling and platitudes is easier than formulating strategy for NZ.
Grant Robertson seems to be a waste of space. Nothing but empty diversions.
From the link:
Question from Nicola Wills, ""More and more Kiwis are being priced out of the private market as rents surge and house construction fails to keep up with demand. Rents have gone up $100 per week in just the past three years. This is a far higher rate than any time in our history. What is Jacinda Ardern's solution to that problem?"
And the simple answer is rent controls will be introduced. There really is no alternative that satisfies the urgent need. Seems silly to just let the housing wait list grow and grow and grow as NZers are priced out of the private rental market.
#rentcontrolnow.
Why?
If because landlords will sell - the houses don't disappear.
If because the private sector won't build - more labour/resources available to build state houses.
If because landlords will leave their properties empty - introduce a vacancy tax.
Happy to listen to your other arguments.
Rent control should be in the card, if you have vested interest? you'll say so it won't work. Not much differ to the 'Gun control', if you have vested interest? you'll say it won't work for sure.
Now compare the US madness of gun control, to other large countries which do have gun control.. then compare it.
World is full of random, unregulated vested interest. Then came regulation to manage it; alcohol, nicotine, gun, salt/sugar, pharmacy, airline, road traffic etc. - Rent control? Nnnoooooo...
The only way to address affordability? is to amplify that shortage, abolish the bright line, outlaw the LVR practice, outlaw CGT, outlaw DTI, negative OCR, more QEs/FLPs into housing, the 2020 increase of 20% was just a hint starting point albeit related to C19, but rest assure that 2021-25 the annual steady increase rate should be 25-95%, NZ shall lead the world economic.. recovery.
These cannot be described as a "demand side response" They are just financial fiddling.
A real demand side response would be for a population policy. Say an upper limit of five million.
House price rises (and rent prices) would slow with fewer people needing them. And the current bubble would be pricked.
A nation should aim for affordable housing for all it's citizens.
How many more times do I have to listen to the supply side narrative. Our cult princess was leader of the international socialist youth organisation in London. But instead she does the bidding of the central bank cartel who deal in only one thing.. DEBT.. An outbreak will come soon and it will finish off the middle class and who knows.. By 2030 you will own nothing but be happy..
Are the media categorically banned from asking questions on reducing demand through moving towards sensible immigration settings? Or has our cancel culture environment had the intended effect. FEAR.
IMO one of the major factors that allowed Trump to (so harmfully) divide America so completely is left leaning politicians advocating totally irresponsible immigration policies that fail to protect the citizens in most need of protection in favour of foreigners and the already wealthy (through cheap labour etc).
Even with a very proactive, organized Govt it will be virtually impossible to build around 20 000 additional homes each and every year to offset the 75 000 people the current settings will allow to move here each year. We have seen in other countries (USA, France etc) where out of control immigration has led to some very toxic (and popular) right wing extremist types of political parties. Do we really want that here? Do the benefits of our current immigration settings truly outweigh the negatives for the majority of Kiwis? Let's just be honest.
Yes the reluctance to have a grown up conversation about immigration is crazy.
But when you think about it there will be many forces on both the right (business) and the left (woke people who think it is racist to have much lower immigration) in favour of the status quo.
UK -> Brexit also.
Yes its ridiculous. Clearly we need to completely turn of the tap.
But the govt is setup to push growth at all costs. Anything we propose to fix the issues of today contradicts this, so it ends up as inaction & media manipulation.
Yes this could well lead to a populist movement & there is plenty of room for this in NZ. Say next election, after another term of saying they will but actually don't? Personally I will keep voting for change until it actually happens (but don't actually expect it).
Is this what we really want? I'm not sure, but the more I look at this, the more I cannot see our current system of govt (and governing generations) really fixing this issues of today. Noting the current govt have still got 2 more years to show us they are not spineless.
Take a chance, to critically think of our current situation, impartial and high level. As a society in general, is this really the best we can do? Further than this, is our current course sustainable?
Perhaps a big change is what's really needed? If we can't politically do something reasonable like taxing investment houses the same as shares or businesses (when clearly this is required) then how on earth can we fix the big issues coming up, like our addiction to burning fossil fuels? Or how to wean off our addiction to credit?
There are plenty of examples in history where big changes to society (French revolution, American revolution, basically every revolution) where in large parts driven by un-balanced tax policies and the subsequent wealth distribution. I mean they ALL start with broken tax systems & pissed off tenant classes.
Most of these big events where also completely avoidable, take a little pain now before it snowballs etc.
But growth and greed are ever present. And so its inevitable (in my opinion). I'm not of course suggesting that we introduce the guillotine, but consider -> Right now we are raising generations of kids/teenagers that are going to be completely locked out from this money tree, but whom will also have to bear the brunt of our current debt burdens & societal changes required re global warming.
What's going to happen when these guys become the ruling elite?
Well judging by our current trajectory, there will be many more voting tenants than landlords. And they will be pissed off.
No need for riots or societal unrest, a simple majority vote will suffice.
Death tax anyone? ''you borrowed it, you pay it back''.
Immigration
Norman Kirk and Labour’s compulsory NZ Super Scheme was underway, when Muldoon subsequently scrapped it and promised everyone super without having to pay for it in advance
Had the scheme continued everyone would would have a retirement fund
Since 2010 the mantra has been we now need mass immigration to fund our retirements
Mass immigration has come at a huge social cost
iconoclast... At age 45 my wife moved to NZ and got residency last year. She may never work or pay tax in NZ but will get full NZ super in 20 years. In the meantime she will pay $1100 PA into Kiwi saver and gain another free $525 PA from the NZ tax payer. And with two dependent kids, if we separated the tax payer would be on the hook for another several hundred a week.
And it is not unusual. My best friend brought his very young Cambodian wife and 2 young kids here 3 years ago. Now separated and he has 4 months left to pay all her costs as per the court order. She has never worked anywhere in the world and does not intend to. Unless she leaves soon the tax payer will be on the hook for significant, regular payments for (at least) the next 15 years. And she is already talking about bringing her mother over based on some kind of "emotional support for family" justification. And if you are reading this Kate (or others who contributed to the discussion last week) she lives in Lower Hutt so is taking a much-needed home from a Kiwi, in an area with a serious housing shortage.
NZ citizenship and residency should be guarded very closely with a limit of somewhere between 5K to 10K PA, absolute max.The problems this would solve are far far bigger (and effect more Kiwis) than the problems it would create.
THIS IS A BRILLIANT CRITIQUE OF ARDERN AND HER GOVERNMENT:
https://i.stuff.co.nz/opinion/124000017/why-is-jacinda-ardern-so-timid?…
Agree Fritz. In fact, from what I have seen so far, it has the ability to make it worse. The wording has very poor definitions which allow the council to interpret them any way they like.
There is no presumptive right for housing supply. Council, and other interests can still hinder, or block supply as their idealogy suits.
NZ initiative did this report back in 2013.... Its worth a read
https://www.nzinitiative.org.nz/reports-and-media/reports/priced-out/do…
Can't help falling in love with Labour! No more grants for low ball FHBs. Time to acquire some lower end rentals from desperate and fearful sellers who don't understand how this works and cash in on the rising rental yields. Those FHBs won't be able to buy, but they sure need a place to stay. They can pay up or sleep somewhere else- you will are in control of your own pricing. Don't let the fluff talk about bank lends to who, LVR and all that piss, think outside the box- there are more than just banks that would happily lend you a mortgage provided you already own a property. Keep a lookout for obituaries in the classifieds and find out who's recently gotten laid off- you might just find gold around you neighbourhood! Let's do this!
All talks, no actions. No creditability. Kiwi Build is disaster. I don't think they actually want to build more houses. One of my friends kiwi build house fail to meet deadline and the completion date has been delayed for almost half a year now. They are way behind schedule. The worse thing is that they don't even care if you make a complaint about kiwi build. This is how I see it, if they promise 2000 houses by what date, it would be generous for them to deliver half of it.
To be fair, the Prime Minister doesn't operate in a vacuum. Correct me if I'm wrong (I'm not married to my ideas) but I imagine her capability to be somewhat restricted by her colleagues, a number of whom appear to have vested interests in property.
Edit: replaced "work" with "operate".
Balance is the key to good governance - not much different to parenting multiple kids in a family.
Delaying a balance decision=lost time=lost money/opportunity, can't undo the growing up kids. The PM, govt & RBNZ decisions will eventually carved a long term status of future NZ nationhood, the ponzi pyramid scheme are to be encouraged instead, the young educated middle class need to climb super hard (preferably with no kids), or being left dragged down to the bottom, to support the heavy top. Be kind for the young generation means just that, moving away to somewhere else while at the same time turned off the blue tooth to save power & become apathy with NZ housing affordability madness.
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