New Zealand faces a “deeper and more entrenched” housing crisis than had previously been revealed, according to a stocktake of the country’s housing sector commissioned by Housing and Urban Development Minister Phil Twyford.
The report paints a “sobering picture of the devastating impacts of the housing crisis, particularly on children,” says Twyford.
The report assesses the entire housing continuum from homeownership and market renting, to state housing and homelessness, and the social cost of substandard housing.
“The stocktake highlights the increasing number of elderly facing housing-related poverty because fewer and fewer are mortgage free and able to survive on Superannuation alone.
“Most concerning is the hidden homeless – those who feel they can’t seek government housing support for their families – for which there are no official estimates. The stocktake suggests there could be significant numbers of ‘floating homeless’ which will lead to a growing homeless rate as more people seek help,” Twyford says.
The stock take report was commissioned in November and, at the time, Twyford said it would provide an up to date picture of the housing market.
He said it was time to open the books and give New Zealanders an accurate picture of the true state of housing in New Zealand.
Twyford was critical of how the previous government handled New Zealand’s housing issues and accused the National Party of keeping crucial housing data under wraps.
Three experts were appointed to carry out the housing market stocktake.
They are economist Shamubeel Eaqub, housing academic Philippa Howden-Chapman and long-time community housing advocate Alan Johnson.
Twyford says the stocktake warned New Zealand is “quickly becoming a society divided by the ownership of housing and its related wealth” and found “recent housing and tax policy settings appear to have exacerbated this division.”
“The Government is committed to addressing this inequality. Fixing the housing crisis will take bold action. The Government has a significant work programme to respond to these failures; implementing KiwiBuild, improving conditions for renters, increasing the supply of public housing, and rebalancing tax settings to discourage speculation.”
In addition to the report, Twyford released this stocktake by the numbers document, and this stocktake key findings and solutions document.
The charts below come from the report.
Five year changes in housing stock and population – 1997 to 2017
Homeownership rates for households - 1936 to 2017
128 Comments
look at who was appointed to do the report, bit slanted to get the result you wanted.
in saying that we all know the cause, too many people for the amount of housing stock we have.
its not rocket science, you import 70k a year for 5 years and only build 10k a year guess what happens
https://www.stuff.co.nz/business/property/100967443/little-hope-for-bui…
An interesting metric might be a trend of population/total housing square meterage. Which might also quantify the anecdot of overseas investors leaving houses empty as well as what the above article points to.
National party E Con omics
National members buy up houses
Open the gates to over 70K migrants per year
Allow offshore speculators to buy & sell NZ houses & allow them to repatriate their capital gains without taxation.
Keep the foreign funds flowing in & the gates open
Saving the govt short term borrowing but long term the pressures on infrastructure mean more govt borrowing to meet the needs of the new arrivals over the past several years.
The leader then sells his mansion to foreigners and gets himself a nice highly paid position out of politics
NZers left holding the baby with jammed roads full schools & hospitals & over priced cheaply constructed houses many of which are due for demolition but not in NZ !
Government housing report an ideological witch-hunt and a political window dressing. In fact, every sentence in the report would have been easily predicted and expected the day Winston went with Labour!
http://www.nzherald.co.nz/property/news/article.cfm?c_id=8&objectid=119…
https://www.economist.com/blogs/graphicdetail/2018/02/daily-chart-5
“house prices appear to be on an unsustainable path in Australia, Canada and New Zealand. Ten years ago they reached similarly dizzying heights against rents and incomes in Spain, Ireland and some American cities, only to endure a brutal collapse.”
We are top of the pile for overvaluation vs long term averages for relationship of price to income (61% overvalued vs average) and rents (112% overvalued vs average). The last figure must surely show that this bubble is not principally about housing as an accomodation asset, it’s about housing as an investment asset.
We have now got ourselves in a massive mess and I do not see how we will climb out of this hole without a major correction, sooner or later. We and our credit bubble will run out of luck at some point.
Spain was a desirable bolt hole for many. Lots of English folk bought their retirement cottages there.
It's a problem when things get too unfavourable for young people, though. For recent years the remedy seems to have been to import different young people from places where life is worse, rather than actually measure and address underlying issues.
They learnt that trick off Sir John Key... pick the problem of the day... pick a number... slap some zeros on the end. Instant policy/headline. It will be nice when to see the day when our parties stop outright lying in public... got a while to go yet.
Think National isn't innocent here?
$11,000,000,000 financial hole?
100,000 kiwi kids will be out of poverty.
Maybe if the nats oust boring Bill for a progressive leader representing generational change we will see some realism in our politics.
Shamubeel Equab says we are not 100 000 houses short in NZ ... we need 500 000 ... wow !
... our shortage of houses began in the 1980's , and has been getting steadily worse every year since ...
So , we can't blame that on foreign investors , can we ... nor on the flood of immigrants ... the blame rests squarely back with out dopey councils , the government , and Unnecessary Handbrakes Ltd ( AKA the RMA ) ..
A quick look at the linked document didn't raise it so maybe it's specific to my environment, but in my 50s I'm seeing a run of women who have been 'Barnaby Joyce'd" i.e. as soon as the children have left the nest, the husband/father asks for a divorce. This often leaves the woman with half a house, possibly diminished by debt, but in some cases no house and no income to afford one. They will end up renting for life, probably subsidised by the tax payer while the husband uses remaining earning years to rebuild wealth.
Barnaby Joyce is a hypocrite for moralizing about other people ie same sex marriage and opposing Gardisil vaccinations against cervical cancer in case it promoted promiscuity. People such as Joyce, who do the whole "do as I say, not do as I do" in positions of power deserve every bit of derision they get once exposed.
Otherwise where they stick certain parts of their anatomy is of little concern.
If they work hard and cut down on smashed avocado, flat whites, and Sky telly they'll be fine. It's always been hard.
But no, absurdities aside, this is a major effect of the housing crisis, no doubt.
They might be ripe for the picking in parties promoting a change of tax policy.
Previous governments have been strong believers of the meritocracy.
https://www.amazon.com/Meritocracy-Myth-Stephen-J-McNamee/dp/0742561682
Or is it that the Bureaucratic Class are true believers in Government? They believe they should be in charge because they are very intelligent. Very intelligent, but prone to the stupid errors that very intelligent people are subject to. One of these is the elevation of Theory and Strategy over experimentation, practicality and tactics. They worship the Great Theory and feel superior to those lower mortals who like to Get Things Done.
PT quote:
The Government is committed to addressing this inequality. Fixing the housing crisis will take bold action. The Government has a significant work programme to respond to these failures; implementing KiwiBuild, improving conditions for renters, increasing the supply of public housing, and rebalancing tax settings to discourage speculation.
But zip, zilch, nada about tackling the trifecta of more basic causes:
- Zoneration up the wazoo with dire effects on land prices
- NIMBY, incumbent and covenant-based resistance to sensible reactions such as smaller houses, prefab builds and tiny houses
- The usual Opolies: Monopoly-delivered standards, inspections and consents (TLA's and BRANZ), Duopoly-supplied Materials, oligopoly-supplied Elfin Safety. All bulking up costs as the layers interact, and often for zero discernible benefit to the customer.
This trifecta has two effects: high land prices, and a tendency to build for the upper quartile of the market, because that's where the demand still is. The former cuts out FHB's even without a house on the plot , the latter concentrates building resource where the munny is. Quelle surprise.....
Oh, and let's not forget the Gubmint-induced price-floor effect of Welcome Home Loans....
Classic Labour policy really. They have a wonderful ability to stuff things up right royally. Lots of fine words but a failure to find ways to engage the forces that can actually solve the problem. So, maybe, less regulation, more speculation, might help. You know, let the people solve the supply problem and get the Gubbmint out of the way. Of course all ploticians and Bureaucrats love, worship and adore The Government and see it as the Answer To All Things.
Classic Labour policy really. They have a wonderful ability to stuff things up right royally. Lots of fine words but a failure to find ways to engage the forces that can actually solve the problem.
So who are these "forces" that they can solve the problem? The private sector? The incumbent construction and building materials businesses?
Classic Labour policy really. They have a wonderful ability to stuff things up right royally. Lots of fine words but a failure to find ways to engage the forces that can actually solve the problem.
So who are these "forces" that they can solve the problem? The private sector? The incumbent construction and building materials businesses?
We have had the neo-liberal way for 30 years, and things have got worse its clearly failed IMHO.
eg look at house prices, massive speculation and hardly any more houses being built.
Less regulation? well people want a standard of services and quality in their purchase which they cannot determine for themselves as they are not experts. Maybe you have not learned from the leaky building fiasco? you know lets allow free market and "innovation" reuslt one huge expensive cockup.
There is no place for "might" its clearly failed now its time to do the hard yards, which clearly the free market has no stomach for.
Single biggest issue for affordable housing in the greater Auckland market is the availability of lower cost land that has been supply constrained by Auckland Labour Party mayoral plants - Len Brown for example and left wing councillors planning to make us all live in a sustainable city whatever that consists of.
This was not a National Party constraint - Caused by the Auckland Council and their left wing supporters.
Thankfully we now have a Unitary Plan and more importantly and end to urban boundaries coming up.
Let's assign fault where it lies rather than blaming Nation for a so called housing crisis which yes we do have but as always the causes are complex and inter-related - But land availability is the single biggest factor in low cost housing availability.
Why didn't National spend nine years calling the council out and pressuring them to change this? We saw in Christchurch that they could grasp power in the name of getting things done if they wanted to.
I agree zoning needs freeing up.
I recall only the occasional comment as local and central govts sought to blame each other rather than taking action.
There was interesting discussion in the comments on Greater Auckland recently regarding having smaller councils competing for customers: https://www.greaterauckland.org.nz/2018/01/16/zoning-politics-many-not/
The monopoly super city actually goes against this.
...councils can compete for property taxes by serving demand. If an existing council doesn’t, then a competing tax authority can, which is a useful disciplining device. The counties around Atlanta, Georgia, are property tax hungry, and all willing to serve unhappy customers of the muncipality. This makes the municipality competitive.
Funny, when the Unitary Plan was being pushed through and I sensed National were much too keen to run roughshod on local concerns and push intensification I sent a terse message to the local MP. Evidently they didn't run roughshod enough for some. In the end it was a non event as few seem to be subdividing in my area.
To be fair there were also a number of right wing councillors opposed to intensification.
National could have done something in 9 years to fix it. They could have removed council powers. They campaigned on fixing the housing crisis in the first place then made it much worse.
Again this is as much a failure of successive governments as it is as that of the market. Blame is pointless. This is more a failure of what is rapidly becoming the pseudoscience of economics which most of us, unwittingly, have tacitly accepted since year dot. Whatever we do now is simply going to be an extension of welfare to successive already entrapped generations. It is now come to a point where tinkering, no matter how well intended, is exactly that. The political will to change this lies in the faceless mass the system purports to represent. Take up your pitchforks! The peasants are revolting!
No one should be shocked that after a decade of importing low skill immigrants at highest rate in the world, under investing in infrastructure, denying a housing crisis even exists, let alone taking steps to address the problem, is going to result in this level of cluster f%$k.
And not to imply that Labour will necessarily even find and take the right steps to address the problem. The problem is so entrenched, so complex after the previous decades political ineptitude that solutions are hard to find and implement, regardless of who is in charge in the future to clear up the mess.
No one should be shocked that after a decade of importing low skill immigrants at highest rate in the world, under investing in infrastructure, denying a housing crisis even exists, let alone taking steps to address the problem, is going to result in this level of cluster f%$k
As some will say, it's a "nice problem to have": the wealth effect takes care of the consumer economy; a large segment of the sheeple feel good; and you have a cheap workforce to choose from.
If you do say, we are too inept to put it right, it might be a good thing that we have an economic crisis of epic proportions and let the floods clean it up.
Its spot on though, 20 years of do nothing because its either "too hard" (ie its going to cost too much) or "too profitable" (ie lets not cause a recession so as to keep the Govn coffers filling from boom times).
It isnt just a National ineptitude thing, HC was just as bad.
However this is a boon time for the social engineers, from both sides of the spectrum. Looking forward to some really solid work here to once again save ourselves from ourselves. There will be no shortage of opportunities here to enlist the very brightest and prescient of our generation.
Ok, here goes the solution:
• build a fastish (say 120kmh - 150kmh) between Hamilton and Auckland via pukekohe with limited stops.
• buy developable land at potential stops on the line.
• build new greenfield towns and make money by selling some of the land to commercial and residential developments.
• contract government funded house building on large lots - thousands of houses - with preference given to suppliers who use innovative construction methods and offer additional volume to the private market at discounted terms.
• repeat between Tauranga and Hamilton.
It’s that or we immediately informe a population limit. I like us to build/innovate our way out of this problem but to do that we need to pull finger.
I am not opposed to the idea, however, we have to be aware that our current narrow gauge lines are unsuited to fast rail and every single road crossing would have to under or over bridges, you could not have any crossings, controlled or otherwise.
I'd rather we settled on a lower population though, to be frank, as this is what the rest of the world has to get its head around as well, before we eat and poison ourselves out of house and home.
Someone should go back and assissinate the person who made that gauge decision as a baby - joking.
Yeah there a costs but we have to bite the bullet. The cost is unfortunately irrelevant because the cost of inaction is unbearable.
It would have been a lot easier if we started addressing the problem 5-6 years ago when the severity was obvious.
The narrow gauge was a sensible solution to the difficult terrian at the time, not unique to New Zealand.
https://en.wikipedia.org/wiki/Narrow-gauge_railways_in_Oceania
Here is an alternative solution: get rid of the population. Firstly make living in NZ almost unbearable - things like congestion and schools without qualified teachers and big waits at hospitals. Then lets get rid of the expensive people first: cut benefits and beneficiaries will chose to go to Australia despite its failings. Oh that's a bummer I'm on super and daughter on job-seekers....
That will happen with time as those who are increasingly marginalized will probably not live to ripe old ages. In another comment I asked what these people are to do for pensions in a future without a universal one. I suppose this could be it, don't live long enough to rue not having one.
The more time I spend in NZ the more I realize how NZ is screwed by the neo-classical economic theories entrenched, believed, and worshiped through out.
Two fatal assumptions:
1. Govt should not be a part of market unless a market failure
2. Financial institution's only function is to facilitate investment
I think it was David Goodman who said once a school is over 50% immigrant then even the most left-wing families move house to a new school zone. Result sudden unofficial segregation. (ref schools in Northern Ireland Catholic/Protestant and northern UK towns with Kasmiri and non-Muslim.) He also said it is quite hard to resolve once it happens.
In Auckland PI / Maori / Pakeha are not immediately visible ethnicities but my son has Maori mates whose families made a deliberate move from South Auckland because of schooling. But what about some of our most deservedly highly regarded schools in expensive suburbs that are becoming ever more visibly Asian - will they be bussing in pupils with blue eyes some time in the future?
Sad but true as evidenced by the two primary school teacher families in my street one who sends kids out of zone and other who moved a km to higher decile zone. Not to mention my own adult children both teachers plus one son in law teacher and as pc as you can get until it comes to schools for their own kids.
There is nothing wrong with the market failure bit.
It’s the definition of market failure, or lack of understanding of what it is, which is the issue. Obvious areas of market failure:
• Banking
• Housing
• Telecommunications
• Energy
• Petrol
• Supermarkets
• Insurance
What am I missing?
Well you have to have one model or the other. Housing is by no means a free market due to all of the controls on land, building materials, builders, etc.
I personally prefer the free market model, but for it to work the government and council would have to remove almost all regulation which is stopping development. Safety regulation is probably necessary, the rest isn't.
And then if the free market doesn't work, I would have no problem with the government competing in the free market as they did with Kiwibank.
Could have asked me instead... Here's our story:
came here with girlfriend in 2009 with a backpack and 1000Euro. Visited the country, got minimum wage jobs, progressed the career until a very high level. Had a child, kept progressing career. Still after 9 years of hard high skilled work it was either buy a house or start a business. We decided to go the business way as houses kept going out of touch with reality. Business is good and my partner has a high level job in a multinational.
We are leaving the country next month. Became too silly and I don't see it getting any better. I have eyed this property in Bordeaux http://www.seloger.com/annonces/achat/maison/bordeaux-33/124957413.htm?… 240000 euro with 20 YEARS FIXED interest 1.8% mortgage. Couldn't even buy a freehold shack in Ranui for that.
Very similar Ian, we're looking around Languedoc-Roussillon, Midi-Pyrenees, Gironde, money goes a hell of a lot further there, with an eye to move in a 3-4 years time. Any views on how Brexit will potentially affect prices?
Major issues for me are the crazy house prices, the houses simply aren't worth it, saving our deposit and lump summing a house back in Europe is the go.
Brexit might be incresing prices now as British ppl get a bit scared they might not be able to buy later. If it's an Hard Brexit then prices might go down later but honestly there is a lot of available housing there and the govt and council actually keep building them so not such an issue.
And the employment opportunities in Bordeaux for you and your children are ....
One of the multiple reasons for our housing crisis is actually the fact that due to previous governments - yes both Labour and National about equally with a huge negative for Muldoon winding up the first Kirk Kiwisaver - we have a goldilocks economy from a world perspective and are seen as a highly desirable place to live.
Not perfect - everywhere has problems - ours are just seen as way less than all the others and we are very strong on the things that really matter. Rule of law, weather, eduction, ACC, free hospital care, National Super for all, opportunities for our children, very high levels of tolerance for all members of society.
It's very easy to forget the wonderful attributes of our economy that others would die for. Look at the fast deteriorating debt / deficit mess in the US. Let alone the fact that more than 20 million have zero health care.
Thus we are going to face continued pressures on housing and an intelligent response(s) will require multiple approaches on numerous fronts. We are so small on a world scale that we are always at the margin so very susceptible to these macro economic drivers.
Just as jobs in Bordeaux are an issue - we have what is being termed the Bermuda Triangle - Auckland, Hamilton, Tauranga is where it's happening and in my view going to continue to be the focus of growth opportunities so that's where the houses have to be built.
As John Clark sang " We just don't know how lucky we are " .. he was so right.
LOL we already have jobs there thanks for worrying dude. Do you think there are jobs only in NZ?
But to answer your post:
- rule of law (if you are rich and white I agree - see name suppression cases, companies going on liquidation not to pay for employee's death) etc
- weather - HAVE YOU LOOKED OUT OF THE WINDOW???
- Education - Nah nothing special at all.
-France health system is free and the best of the world i'll take that thanks
- Nat super will be abolished by the time I'm 65
Fair enough and good luck. But I suggest you look damned hard at economic, demographic and political projections for France before you decide to build a long term life there. Euro will fail given debt build up, EU may or may not survive. French economy is a basket case (nearing 100% debt/GDP), their labour market is appalling, and they have rapidly escalating religious/cultural tensions that demography will only worsen.
ian64. Your story actually makes me sad. Similar to mine in many respects and time will tell if I stay but you have genuinely cut me up. Wish you the very best in your future endeavours and hopefully you and yours will continue to prosper no matter where you take up root.
Thanks mate, the only sad thing for me is that my son won't be able to grow up in his own country that he loves so much. He might come back one day.
For me I'm just pissed off, not sad. For all the talk of high taxes in France, this is true only for rich people. We will pay half the tax in France than we do here (top tax rate here). In France the top tax rate is much higher but you have to be seriously rich to pay it. Also, wealth is taxed. Here you are punished for being an hard working person and a saver. That's how I was brought up: work hard, save and things will be right. In NZ that is bullshit. If I could do it again I would buy the cheapest shack I could find at interest only, cram a few Indian "students" inside and pay 0 taxes for ever. Then repeat.
All the working poor, and working professionals who're renting and cant afford to buy a house in Auckland have one thing in common. They can all at least rejoice in the knowledge that John Key made a 10 million dollar tax free capital gain by selling his house to some rich Chinese dude.
All or nothing, eh, black or white? Of course the state cannot solve ALL problems, nor can the state solve many problems entirely, but there is plenty of room for the state to provide much of the solution, when it is needed to, and it is needed. The state will be needed to get the ship back on its keel, the free market has no interest in doing so, as the benefactors of that have a vested interest in seeing to it that it is never fixed.
Perhaps Labour could sell it as a stabilisation to house prices, after a post 2011 extraordinary inflation due to all the foreign money and low interest rates.
What I'm saying is that not all house classes go up and down together necessarily. That's what Labour is doing, bringing a new class of houses. St Stephens Ave doesn't have to take a big hit because South Auckland etc, get a chance at home ownership and adequate rentals.
ian64. I have a brother in-law in France working as a professor.We go across every 2nd year to visit. The French are in straight jackets as to what they can do with their houses and the economy is full up on debt. It is an OK life but it cant go on there as it has in the past. Things will get worse there before it gets better.
One thing I worry about France is Islam. Sharia law in some small suburb will be inevitable, unless the french start getting all nationalist mindset again... but sjwism as well as 3rd wave feminism is quite strong there so I don't see how France can turn itself around without dealing with th first.
This stock take is more of the nature of a general warning to NZers. This is what Labour governments do when it gets bad enough. It's bad enough for them to massively intervene and change the fabric of the housing stock. Its a 20-30 year project. But it's starting now, bigger than most of us have experienced or expecting.
We're too used to lazy governments depreciating public assets to provide the rationale for privatisation.
.
As a renter and a payer of a commercial lease, the last 15 years of housing price growth have been unproductive for me. All this (price growth) has been like watching a train wreck in slow motion.. all totally avoidable with proper governance, which was... to deal with demand first then sort out supply.
Phil Twyford gives an honest outline of the meaning of John Key's consciously created social disaster.
Let us please not forget what John Key has done. May he solidify the reputation that he (and his merry men) deserve.
My piece on John Key:
From the summary report
Housing supply and the Auckland market
o Infrastructure development often creates a bottleneck, made more problematic by increasing debt faced by local councils. Auckland Council accounts for more than half local government debt at around $8.3 billion.
The Government’s solutions:
No mention of refocusing local government spending on the essentials (water, wastes, roads) and limiting political discretionary spending on nice to haves.
Good to see government trying to do something but the thinking of the average New Zealander needs to change to significantly change the landscape and achieve ‘affordable housing’. Sadly the old idea that ‘everyone should own their own home’ doesn’t work in the modern environment. Kiwis have become obsessed with home ownership and tweaks in tax legislation, a small increase in supply etc. won’t stop them finding a way to try and buy. Demand will continue to drive prices. We need a long term, attractive rental stock that people can make their ‘home’. Look to the German model for example.
The other thing that could significantly change prices is a sudden global shock or rapid inflation driving interest rates up but that’s another story that no one wants to entertain.....
We also need not to have a few "landed gentry" creaming it off people now forced to rent for the lives. We will need to look at other models for providing housing such as co-operatives and social housing, so that even though people might not own the house they live in, they do have a stake in it.
I still think home ownership is a cornerstone of a decent society, look what is happening with them getting broken down.
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