By Bernard Hickey
Prime Minister John Key has denied there is a housing crisis in Auckland and has said the Government is "getting on top of the problem,| despite his own officials saying the measures taken by the Government are not solving a housing shortage of over 20,000 homes in New Zealand's biggest city.
Key's comments in Parliament came after Labour Leader Andrew Little pointed to advice to ministers by MBIE officials in late November saying that the Government's special housing areas and RMA reforms were unlikely to reduce the housing shortage in Auckland and the Government itself should look to kick-start major house building programmes. David Hargreaves first highlighted the official advice on March 9.
Little started his questions by pointing to MBIE's comments that cost savings on building materials from tariff reforms would be captured by developers.
Key said he had not read the MBIE advice, but that in any competitive world cost savings would be passed on to consumers and that MBIE stood by its estimate of NZ$3,500 in savings per home.
Little then asked: "Has he perhaps been advised of another passage in the report, which states that the price impact of the Government’s special housing projects is “negligible”, and why does he insist on using piffling half-measures against a full-blown housing crisis?"
Key said there was not a housing crisis.
"There is certainly a demand for houses, and that in part reflects the fact that the Government is doing such a good job that New Zealanders are no longer leaving for Australia in droves like they did when Helen Clark was the Prime Minister," he said.
Key said the problems of rising house prices were worse under the Labour Government led by Helen Clark from 1999 to 2008.
"This Government has set about solving those issues. Interest rates are lower, a hundred special housing areas have been established, and house construction is taking place at levels that are now back where they were in 2008. We are getting on top of the problem," he said.
Little then asked about MBIE's suggestions for large scale house building kick-started by the Government on Crown land (although it was not clear from the report how involved the Government would be in funding or building the houses, or how closely it was aligned to Labour's KiwiBuild programme).
"Now that his own officials are recommending he adopt KiwiBuild, will he drop his ideological blinkers and get on with actually building affordable homes, or is he putting politics before families yet again?," Little asked.
In reply, Key said: "No, we will not be adopting Labour’s failed policies. I predict over the course of the next 6 to 12 months—Mr Parker knows what is coming; he is quiet as a little church mouse these days—most of the policies that Labour did announce will be gone by lunchtime, morning tea time, and anything else."
'Nail in the coffin'
Later, Little said the MBIE advice showed Key was out of touch.
"The Government is so removed from what’s happening in the real world that John Key had a straight face when he told Parliament today there was no housing crisis," Little said in a statement.
"It proves the Government’s tinkering is doing nothing to solve New Zealand’s urgent need for housing and that the solutions proposed by Labour will work," he said.
Auckland house values have risen 43.8% since the 2007, QV has reported. The REINZ median price for Auckland has risen 59% in the first six years since National's election in November 2008, while Auckland house prices rose 56% in the six years to 2005.
Median price - REINZ
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85 Comments
Is it really a "crisis" . is it ?
A housing crisis exists in Rio de Janeiro , Mumbai , Dacca Bangladesh , Maputo , Nairobi , and Johannesburg , but we are far from anyting like a crisis .
Instead we have wealthy Chinese migrants who see our houses as being relaitively speaking "dirt cheap" and the prices have risen too far for us to compete with their cash, and their offshore borrowed money at 2% interest .
Perhaps if all the people crammed into half-converted garages and mouldy emergency shelters and overcrowded living rooms dragged their sleeping bags and small children to John Key's street and set up camp, the extra visibility might get through his amazing shield of denial and obliviousness.
That's wonderful. I could definitely use a fancy-pants way of saying that people are generally walking around with their heads up their arses.
As for John Key, I think it'd be appropriate for him to nut up, and stop shirking his job with all this vague 'I don't remember, I didn't see it, it doesn't affect me so probably it doesn't exist, I didn't notice anything so whatevs' bull.
He's supposed to be Prime Minister-ing, for chrissakes. Wandering around refusing to engage with any of the issues which are supposed to be his responsibility just doesn't cut it.
...watch the Northland by-election. Wouldnt mind bettng that the Nats are going to get a hidding - and this in an historically safe seat. This is the pendulum swinging against Key and his head in the sand/denial/nothing to see here/move along strategy when dealing with issues of importance.
Roughly speaking that guy will be responsible for wiping about $150 billion off the paper wealth of Auckland if they get Auckland house prices back to historically affordable levels.
That's roughly 500,000 dwellings, all overvalued to the tune of about $300K - $400K (on average).
So no, it's the political hot potato which is why you don't hear anything constructive from Labour or ACT or Greens or...........
Biting the bullet
This is only going to get worse - if it's $150 billion today it will be $175 billion next year, $190 billion the year after, and so on
At some point, someone has to bite the bullet
Old saying:- you can run (off at the mouth), but you cant hide it.
If Muldoon was still around he would have bitten the bullet, for sure
It's pathetic for a grown man, in a position of responsibility, to be shirking anything difficult and coming out with the kind of weaselly evasions that you get from five-year-olds caught with a hand in the biscuit tin.
At this point, I'd be unsurprised if he attempted the "I didn't do it, it was Dolly" gambit.
There are almost 3000 houses, units, and town houses ( not sections) for sale in Auckland on Trademe right now.
PM Key agrees with Olly Newland who said so earler "what shortage and why the fuss?"
http://www.interest.co.nz/property/70022/olly-newland-gives-seven-reaso…-
In some suburbs - maybe. Not where I live though. don't get me wrong - there would be the odd/rare burglary - all suburbs have them, but they're few and far between. all the neighbours leave cars parked on the street overnight - no wheels stolen etc. (personally, I still leave our cars in the garage).
A crisis ? I think not .
Cyclone Pam was a crisis (for Vanuatu) , the word crisis implies a tipping point , resulting in upheaval and disorder , etc
Its more like a SCANDAL the way its happening , we have allowed this to happen and keep on doing the same dumb things over and over again , and expect a differnt outcome , esp with regards to immigration policy .
Think Einstein
Out. Of. Touch.
Please Mr Key, tell us the criteria we have to meet to have a housing crisis?
- Median multiple says house prices need to fall 61%
- Price/rent ratio says house prices need to drop 49%
- Affordability says housing costs need to fall 36%
- Average people/household needs to fall 25%
- Health issues relating to sub-standard housing worst in the OECD
- All metrics are getting worse
Boatman, we just had to search for a new rental and it's crazy out there. 50 people lined up to view a house in Avondale. Most of them are families with young children who clearly can't afford the 20% deposit. Agents were open about the fact that the landlord didn't want kids and some agents are actually doing bidding wars, telling you that so and so will pay an extra $50 - how much extra will you pay?
Most of the people who visit this website are completely disconnected to what's happening out there - and so is John Key. But then, it's the National party, they've never cared about the lower classes so it's really no surprise.
VA - the open days for rentals while offering a degree of efficiency to the agent has the impact of increasing rents......the 50 people know they have to compete against each other.
Competition can both increase and/or decrease prices and when you have one house and 50 candidates at a time vs 50 houses and 1 candidate at a time the outcomes will always be very different.
People wanting to rent need to get savvy to how the game is played!!
Have a look at the number of rentals owned by our MP's and I am talking about members from all the parties not just National. It will suprise and amaze you. Obviously many of them are looking to property for retirement purposes just like many other New Zealanders. Why then would MP's do anything to slow down housing price inflation in NZ. They would be cutting their own throats if they did. These are the people who voted themselves a gold plated super scheme (all three stages over one night) while the rest of us were sleeping one night many years ago. When are we going to get MP's who are there for the good of the Nation rather than being there for the income and perks.
Auckland is currently going through the same pattern that all growing cities do and rising land prices is just a part. What needs to change is peoples expectations, in most cities around the world people start life in apartments and flats and only move into stand alone houses after they leave the city. Those that adjust their expectations sooner will benefit as there are plenty of quality and affordable flats and apartments in Auckland. In 20 years Auckland will be just like Sydney and in 100 years just like London.
You're not comparing apples with apples, all those cities can easily sprawl as they're not geographically constrained like Auckland is. They also don't have the trade shortages we do and infrastructure costs way less. Auckland should be compared to Sydney, Singapore, Vancouver if you want a like for like comparison.
All those cities are bigger than Auckland, with Singapore and Sydney being around 5 million.
Singapore is island so its land constraints are absolutely worse than Auckland. Singapore has a long practice of building high density public housing on government owned lease hold land, this combined with strong restrictions on foreign ownership on property has made Singapore much more affordable than Auckland (5x median incomes compared to 8), although as you point out not as affordable (3x median incomee) as those cities with no growth contraints -either physical or self imposed.
So Happy 123, you great apologist for the status quo your examples are not comparable.
Please try and keep up Brendon, go back and read my original comment, Auckland is a growing city and in time it will be comparable to Sydney, etc.
Interesting you mention the status quo, arn't you in favour of repeating the endless sprawl that has got us into the mess we're in... Not much point engaging with a person who can't understand that there cannot be endless growth on a finite planet.
It's a question of ideology. From where Mr key and his like minded folk sit, there is no crisis. In fact all is well (As YL is quick to tell us). The profits are rolling in, land constraints and migrants are keeping the cash flowing. Life is grande for this sector.
If you think a society in which the rich get richer and those who aren't are getting whipped by landlords and banksters is not a crisis, then I guess it aint from you viewpoint.
But if you want a socitey in which putting a roof over you head does not cripple you from engaging in anything in life apart from survival mode, then we sure do have a crisis.
Sums up the attitude of some of the haves who don't give a rats.
Short memory Happy..I'm both..but rent as I dont have to commute and closer to Westhaven Marina. However I dont drool over house prices rising and are moving to Wellington next year...I'm done with Auckland..its been ruined by PS, landbankers, and terrible planning. Anyhow keep up the good work..I'm heading to Tonga next month..by sail.
Oh, so you're a sensitive soul who just wants to be loved by the people you exploit? Poor you.
God, I can't even mock, it's too pathetic.
P.S. If any of your tenants qualify for the accommodation benefit, please be so kind as to either get your grasping paw out of my taxpayer pocket, or quit your bleating.
I'm glad you mentioned the tax payer, a pool that I contribute far more to than the average Joe/Jane. But that's what you all forget isn't it, you need the wealth creators for jobs, taxes and for otherwise paying for all those things you couldn't afford to do without us. There's a tale about that, 5 guys in a bar, one rich, you should look it up then you'll understand why you are so pathetic.
OK, you've convinced me with your cri de coeur for love and deference, no matter how obnoxious you may be. So, lucky for you, I'm the CEO of Kakapo Incorporated, PR Professionals, and I can do you a TV ad to swing the opinion of those hostile have-nots in your favour. Because it's such a good charitable cause, I'll do it pro bono, and you can donate my fee to a food bank, or to the yacht club bar, whichever is most needy.
Scene: The mean streets of Otara. A good-looking businessman in a suit (played by model of your choice) is driving his mercedes past the closed down factories with their graffiti, overgrown yards, and weather-faded 'For Lease' signs. Young men are loitering outside the former workplaces of their fathers, faces hostile, in contrast to the sunny grins of the real estate agents on the tattered For Lease signs. To make these young have-nots look extra-menacing and our hero extra rich and vulnerable, there will be gangsta rap on the soundtrack.
He drives on, to an ordinary suburban house. One built in the 1950s for the working families of the time. Cut to some documents on the passenger seat, which show he's the landlord, there for an inspection.
There's a plastic bag from The Warehouse by the door by the rubbish bin. He picks it up, tutting at their unkemptness and laziness. Camera zooms in on the receipt. It's for $14.99, kids shoes. He goes inside. The family eye him warily, hurting his feelings. There's a Pak 'n' Save cake on the table, six candles burning. A kid, wearing new sneakers, is about to blow out the candles. Our hero tut-tuts again. $20 down the drain on crappy sneakers from China and a cake? Clearly they could afford another $20 a week in rent. He informs them of this, and makes a note on his iPhone to send the official letter around later that day. We can zoom in on the screen to show this.
Nice of them to welcome him with a cake though. Unfortunately he's got a few more inspections this morning, so can't linger at this hovel. He picks up the cake and takes it out to his car, and drives away. Camera zooms in on face of the kid, his expression is unaccountably hostile. We'll play the gangsta rap again at this point, make sure the viewer makes the connection that this unpleasant urchin is one of the threatening criminals of the future.
Back in the mercedes, an uplifting song by Sarah McLachlan plays in the background, as our hero takes the candles out of the cake and flings them out the window, his expression troubled. Why didn't they like him? Why?? When he's magnanimously providing them with somewhere to live? Ungrateful bastards. He tastes the icing on the cake, and wrinkles his nose. Awful cheap cake. Least they could have done was provide something from that nice deli in Ponsonby. Make it $25 a week.
I guarantee, it'll be the best thing ever for getting the sympathy of the have-nots over to your side. There won't be a dry eye, especially when the Sarah McLachlan's playing.
Hahaha, love it, I'm stoked you're putting in so much time and effort to entertain me and I didn't even have to pay you a cent. Some changes though... You'll have to pick another suburb, Otara (like the rest of Auckland) is booming, there are no closed down factories. No one drives Mercedes unless you're 60+, I drive a F450 so change it to that. And 6 candles! Frivilous! How big is the cake? Surely they could light it with just one. Maybe add a segment where they are delivered budget advice.
Then add some realism, where I pay to fix things they've broken. Or where I agree to replace curtains or carpet at my own expense. Or where I pretend not to notice the near new car in the drive (that they've tickied up) when they're telling me they can't pay rent.
You can shout at us from up on your high horse but remember you've (probably) not done a damn thing for poor communites in Auckland.
Kakapo - life is not black and white.....one way or the other.....etc........there is always middle ground and room for all to experience whatever it is they desire to experience.......the biggest change that occurs to anyone's life is from the changes they make for themselves.......
Why would you want to make an advert using a kid to get your point across? Powerful and emotive but for all the wrong reasons!!!
Why would you want people to be hostile towards anyone who has been successful?
You could have finished your advert with that kid doing well at his free State school, taking on a qualification or business idea and doing well and having his whole family riding around in Mercedes listening to Sarah McLachlan
Damn, I type my claws to the bone putting together a heartstring-pulling guaranteed-PR industry-award-winning and entirely non-satirical ad campaign to rehabilitate the image of the poor misunderstood slumlords, and this is the thanks I get.
Oh well, just have to sell it to the Nats for their 2016 campaign. Note to self: Avoid using music by Eminem.
That John Key takes the people of New Zealand for fools is a given. Now that he is trying to fool himself we should be worried.
No need to rake over all the rubbish spouted here but a couple of facts (TM) that could be borne in mind while reading the ultimate denial speech:
- Every year for the last ten years (and probably longer) without exception more NZers leave the country than return. The only thing that varies is the number
- If we had had no visa immigration at at all in the last ten ten years then in four years out of ten our total population would have declined (natural increase plus NZ citizen migration)
- These years of massive outflow occurred under Labour and under National
- The level of visa-based immigration is set at a level that ensures we don't fall into an accidental and self-perpetuating recession each time the GC beckons
- The sudden upward leap in Auckland houses prices started at the time people were abandoning Auckland in droves - even net migration was negative in that year(2010).
Olly Newland is right as usual.
There is no housing shortage . The supply is plentiful.
if there was a crisis, rents would be sky high and there would be demonstrations in the streets by the homeless with ragged poor families on every corner.
But there is only silence. It's busiess as usual.
Life goes on unruffled by the " crisis" (aka "beat up".)
The vast majority of people are unaffected . Their house goes up in value but which is of academic use only as they have to pay more for the next one.
First home buyers may have it hard as they have been screwed by the LVR rules which have proved to be useless and counter productive.
There may be an affordablity crisis for FHB but they represent only a tiny minority of the market.
What a load of bull***. Life only goes on unruffled only for downsizing boomers and speculators.
Time to wake up and pay attention to what is being done to young people and young families by the cost of housing. Dangerous and crippling levels of debt. People delaying having kids. People taking extreme financial risks. People being driven away from their friends and family.
A very large and growing number of people are disenfranchised and angry.
Exactly!!! Its Christmas time for the Auckland landed gentry. Colossal fortunes are being accumulated by doing nothing. The money is basically being screwed out of non asset owning kiwis.
A German friend of mine was really perplexed as to why people in NZ are so pathologically obsessed with housing. I had to explain to her that NZ isn't like Germany. We don't have a functioning tax system that provides good social welfare. Its every man for himself. Unless you get a house by the time you retire you'll be eating cat food with you pension money. Dont bother having kids until you've secured a house either. Generation rent is getting pretty pissed off with John Key's denials.
Totally contrary to what Bill English stated only two days ago;
http://www.interest.co.nz/news/74566/finance-minister-warns-auckland-re…
Time the Nats rolled Key as he is becoming a real liability..
And here's another total stuff-up - loans to a mate gone bad;
http://www.stuff.co.nz/national/politics/67439973/scheme-cant-pay-back-…
Stuff have a follow up;
http://www.stuff.co.nz/national/politics/67455397/dhbs-likely-to-cop-hb…
Perhaps others are waiting for the Auditor-General's investigation... I certainly am as hopefully she will expand on the accusation of it being a "ponzi scheme".
It's like this government are walking around in a sandwich board that says 'We are financially naive and pathetically eager to roll over like puppies for anyone who'll flatter us on our delusions of business nous and buy us a few lunches, screw due diligence, PLEASE SCAM US, NO REALLY SHUT UP AND TAKE THE MONEY'.
I suppose the kickbacks are lucrative enough to make it worth looking like idiots.
Seems the Accounts and the Accountants and the instigators are not accountable, nor healthy for that matter.
This so much like Solid Energy becoming ill-liquid due to pressure to expand.
You cannot spend your way to suck-cess in rivers either.
The Economy is not a Ponzi scheme, it is what it is supposed to mean, living within ones means, without ruining the damn thing.
Debt before dishonouring the cheques, must be accountable.
Or we will all pay for their profligacy.
District Health Boards may need extra funding.
Where does that come from, the sick economy, or the ACC, or must we sell off other State Assets to overseas interests to pay for that as well as our houses.
Expanding and inflating, might mean something else to this Mob, but some body has to pay for this fiasco and all the others.
Let me guess. just why cannot we cannot live within our means and balance the budget, even buy a house ahead of these rentier parasites....etc.etc.
Because someone is creaming a lot off the top...That appears to be why.
Time to run some "duty of care" and "contracted responsibilities" against the CFO and parties involved in the deal (including those giving the money and their diligence and oversight in caring for the tax payers financial interest). Time to claw back the funds from the _individuals_ and some lengthy jail time for their sustained fraud w/ documents.
Time to make a start on cleaning house, because this kind of BS is what gives us overruns and failed services, the rot at the top.
In the last six months Planet Key has gone from a friendly happy place to a dark and disturbing one. In simple terms National has lost its mojo.
John Key tried to mimic his opposition 'cut the crap moment ' in Parliament and go angry about how much 'guts' he had and they didn't, only to come across as mentally unbalanced (3.45min), rather than a sober Statesman carefully weighing up the risks and rewards of sending kiwis soldiers into harms way.
Judith Collins leader of an important National party faction and once touted as a future PM prospect has turned into a screaming harpy.
Bill English past leader of the National party, current Finance Minister and probable leader of the faction in the National party that leaked Dirty Politics is in a verbal war with his own PM about the significance of the housing crisis and how to deal with it. Announcements Bill makes one day about the housing crisis are denied days later in Parliament by John Key as Kate details above.
Steven Joyce National's campaign manager and another touted PM prospect is evolving into some sort of pig like Muldoon creature, who when under stress starts giving away pork.
In recent times National's media cheer leading club have turned against them with Gower, Armstrong and Hooten all being publicly critical of Planet Key.
The best test is what is trending on twitter - and Johnson aint doing too well
https://twitter.com/hashtag/johnkey
I like the tweet where he is ok until he opens his mouth
Topical, Typical Friday Joke...... Ironically..Apt...for those Up North.
If a Key player.
Cos the joke is on you next.
While walking down the street one day a M ember of Parliament is tragically hit by a truck and dies.
His soul arrives in heaven and is met by St. Peter at the entrance.
'Welcome to heaven,' says St. Peter.
'Before you settle in, it seems there is a problem. We seldom see a high official around these parts, you see, so we're not sure what to do with you.'
'No problem, just let me in,' says the man.
'Well, I'd like to, but I have orders from higher up. What we'll do is have you spend one day in hell and one in heaven. Then you can choose where to spend eternity.'
'Really, I've made up my mind. I want to be in heaven,' says the MP.
'I'm sorry, but we have our rules.'
And with that, St. Peter escorts him to the elevator and he went down, down, down to hell. The doors open and he found himself in the middle of a green golf course. In the distance is a clubhouse and standing in front of it are all his friends and other politicians who had worked with him.
Everyone is very happy and dressed in evening dress. They run to greet him, shake his hand, and reminisce about the good times they had while getting rich at the expense of the people.
They played a friendly game of golf and then dined on lobster, caviar and champagne.
Also present is the devil, who really is a very friendly & nice guy who has a good time dancing and telling jokes. They are having such a good time that before he realizes it, it's time to go.
Everyone gives him a hearty farewell and wave whilst the elevator rises....
The elevator rises and the door opens in heaven where St. Peter is waiting for him.
'Now it's time to visit heaven.'
So, 24 hours pass with the MP joining a group of contented souls moving from cloud to cloud, playing the harp and singing. They have a good time and, before he realizes it, the 24 hours have gone by and St. Peter returns.
'Well, then, you've spent a day in hell and another in heaven. Now choose your eternity.'
The MP reflects for a minute, then he answers: 'Well, I would never have said it before, I mean heaven has been delightful, but I think I would be better off in hell.'
So St. Peter escorts him to the elevator and he goes down, down down to hell.
When the doors open he's in the middle of a barren land covered with waste and garbage.
He sees all his friends, dressed in rags, picking up the trash and putting it in black bags as more trash falls from above.
The devil comes over to him and puts his arm around his shoulder. ' I don't understand,' stammers the MP.
'Yesterday I was here and there was a golf course and clubhouse, and we ate lobster and caviar, drank champagne, danced and had a great time. Now there's just a wasteland full of garbage and my friends look miserable. What happened? '
The devil looks at him, smiles and says, ' Yesterday we were campaigning..
Today you voted.
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