Okay, so when were you expecting the next migration-fuelled housing boom?
I had pencilled in a three-to-five year timeline. That would give the green-light migration policies of an assumed National-led government enough time to have serious traction and get our infrastructure groaning again.
But of course then we've had Labour's recent inclination to do everything National would do before National can do it and this has seen the screeching U-turn on the migration 'reset' from Labour last year, which I discussed in a recent column.
Notwithstanding policy flipflops and the like, the speed with which migration has become an issue following the pandemic has been a most startling surprise.
Not much more than a year ago as the doors to our borders were creaking open, economists were suggesting that the initial impact could be quite a sizeable net outflow of people from this country. I've got to say, I thought that seemed a reasonable enough conclusion at the time.
But fast forward to now and we've got Stats NZ provisionally estimating that there was a net inflow of 52,000 migrants for the 12 months to February (versus a net outflow of nearly 20,000 for the same period to February 2022), while the Ministry of Business Innovation and Employment (MBIE), said a record number of people - in excess of 20,000 - arrived in NZ on work visas in March this year. Yes, that's just March, one month.
In ANZ's recent Property Focus publication, chief economist Sharon Zollner, senior economist Miles Workman and senior strategist David Croy noted the surge of net migration in recent months, which they say "if sustained at recent levels could end up leading to materially stronger activity and housing outcomes than we currently expect".
They went on to say this:
"Our working assumption is that after pent-up demand dynamics have played out, net migration will settle at an annual net inflow of around 40k in 2023. But if the February pace was maintained for a year, we’d be looking at an annual inflow of 140k by this time next year, so the risks look skewed strongly to the upside!"
They say that a forecast ‘miss’ of this size could be significant enough to keep the economy out of recession, "and it would certainly have implications for the housing market – both house prices and rental markets".
The economists estimate New Zealand's pre-pandemic housing deficit (around 75,000 houses) "had been almost fully eroded" [IE, got rid of] as at the September quarter, 2022, reflecting "gangbusters construction activity" over the prior two-and-a-half years and slower population growth following closed borders.
Come the December quarter 2022, however and high migration alongside moderating consents saw New Zealand record its first quarterly deficit in net housing supply since closing the border.
"And while this was a relatively small deficit (around 1600 dwellings), the Q1 read is not going to be pretty," the ANZ economists say.
"And if net migration proves persistent at higher levels than we assume, we could easily be looking at a housing deficit of 20-30k by this time next year."
Right, if I can pick it up again from there, so, okay the ANZ economists are not as such actually forecasting a shortfall of houses of 30,000 by this time next year (not yet, anyway!), but their analysis shows how easy it might be for that to happen if things carry on as they are.
Already we find ourselves in a situation where the levels of migration we are now seeing could start to have game-changing impacts on the New Zealand economy.
Now there has been a bit of publicity around the migration issue in recent days - as I dare say there should be, because let's face it this is an issue that has re-mushroomed very quickly.
But I don't sense there's any urgency as yet - though there should be - to say, hey what are we going to do about this and don't you think we are going to have a very big problem is this situation is allowed to continue on for many months at all?
I won't re-litigate some of the arguments I made in my recent column, but I would suggest an urgent stock-take is done now by the government to assess the levels of people who have been coming in to the country in recent months. Have these been necessary? Do these numbers represent a one-off post-pandemic surge? (I doubt it.) What is the ongoing appetite on the part of businesses and the like to see inbound migration continuing at these current levels? What ability does the Government have - having turned on the tap - to now slow the flow of inbound arrivals?
How well co-ordinated has the opening of the borders and the allowing in of people been? I mean seriously. Is somebody somewhere putting all the numbers of applicants together and coming up with a grand total of just how many people are flowing in? Or is it piecemeal? Is there some co-ordinating presence that says, right, we'll let 20,000 workers in in March? Or did that just kind of happen? (As it certainly seemed to.)
And once those and probably other questions I haven't thought of have been addressed around the actual inbound migrant numbers, there are questions around infrastructure and simply 'making space' for additional people. We know as the ANZ economists have said above and plenty of other economists and observers have calculated that our notorious shortfall of housing has been probably just about extinguished. For now. But we know equally that this situation could change pretty quickly.
But how about other things? Last time I looked this country wasn't in great nick when it comes to things like adequate roading and just things like community infrastructure. Where is the forward planning? How is any such forward planning (and I'm not sure there is much at all) being adjusted and moderated right now for the numbers of people that have already come into the country, plus the ones likely to appear in coming months?
As I indicate at the top of this article, I didn't expect migration to be such a big issue (again) so soon. It needs to be talked about. It would be nice to know just what sorts of numbers of inbound migrants this Government, and potentially a future National Government, plan on having. If indeed 'plan' is a word we can use.
I hope this will become an election issue. Migration is something the people who already live here don't seem to ever get a say on. Finding the 'right' number of people to have in a country is undoubtedly very subjective, but my sense of this issue in New Zealand is that a lot of people and very probably a majority already think we've got too many.
Therefore I don't think it is unreasonable of us voters to be given a clear picture of what the main parties views are on inbound migration - and by which what they see as specific numbers that would be acceptable, and how they would plan for such with things like infrastructure.
Please let's not leave this to chance (again).
*This article was first published in our email for paying subscribers early on Wednesday morning. See here for more details and how to subscribe.
128 Comments
Talking about immigration is like talking about racism, its only ever in a negative light so talking about it is best avoided altogether. There are even bigger issues like total world population control but nobody wants to even start on that one. We are a hopeless for a so called intelligent species, at some point we will just fly into a brick wall but I have given up worrying about it.
Our emotions rule our psyches and decision making. Still, its becoming more obvious there won't be any wakes or deep recessions. In fact the housing market is coming alive, havent I been saying that. Just one example is 72 ranfurly rd 5000sqm lifestyle block aka large lawn in alfriston keenly sought and selling for 3 and a half with a 2m CV. Another in motatau St papatoe chased and bought by developers.
A Guy here thinks otherwise.
Talking about immigration is like talking about racism, its only ever in a negative light so talking about it is best avoided altogether.
I disagree entirely. Key issues such as this need to be discussed in an intelligent and meaningful way, highlighting the facts and removing the emotive sides as much as possible. Immigration has flow on effects in our economy which impact us all in some ways. To say that our infrastructure we can only withstand _____ number of immigrants doesn't have anything to do with what gender they are, what country they are from or what colour their skin is. It is more factual and can be discussed and argued using statistics, projections and costs to consider future decisions which will have larger scale impacts on our economy and how it develops or contracts moving forward in a very crucial time. This is not about population control, it is about planning for the future so that we all have a workable country to live in that has improved infrastructure capable of sustaining _____ number of people with _____ quality of life. Discussions such as these broaden our minds, gain an better understanding from different viewpoints and ultimately are what has allowed us as a species to prosper how we have. For those who tend to slant towards the racist views, while I may disagree with them, everyone is entitled to have their own opinion, without this freedom we will be a monoculture society all bleating and parroting the same narrative which narrows our minds and views, essentially taking us backwards.
Well said. Personally don’t believe we have actually caught up on the housing shortage, despite what ANZ economists think, still ever increasing amounts of rough sleepers in nice parts of Wellington, rents still too high. Migration is my number one election issue and we definitely need to start talking about it. We need a plan, not this seemingly haphazard accumulation displacing our existing populations.
We're .5 babies a couple short, with a ballooning population of elderly dependents.
They're probably bringing in less people than is needed to avoid over burdening the working age population with the costs to pay for everything.
This has been an issue decades in the making that no one paid much attention to.
How on earth is increasing our population going to "fix" housing though? Sure if we were only importing tradies and agricultural workers that would be fine but we are not. The vast majority of immigrants are going to the main centres where there already isn't enough housing for the population.
And yesterday you said countries that have labour shortages are bad places to live, this makes zero sense to me.
Is a country with massive unemployment a nicer place to live than one that has record-low unemployment? I don't understand how you are coming to these conclusions.
With or without migration? But you can see how more mass immigration without building an adequate housing supply can make an already bad situation worse right? It's not going to magically fix the problems, it will just make the issues worse for those already dealing with the negative externalities of the housing market.
Look at Melbourne and Sydney for an example. It will push rents up and hurt those who are least able to afford it. Is the solution to just ignore these issues and hope for the best as we ruin people's lives? That doesn't seem like an acceptable solution to me especially when the people who are affected the most are those who have the least ability to afford it.
What's the logical conclusion to this? Maybe we need to start thinking of an exit strategy as constant growth for growth's sake isn't actually sustainable in the long run is it? Do we just keep going until Auckland is at the density of Tokyo? Nobody is saying halt immigration entirely but to slow it down to a level that isn't going to push rents up to the moon and put even more pressure on our already crumbling infrastructure.
I wasn't being literal, I am just pointing out that indiscriminately increasing the population isn't necessarily going to improve things.
I am aware of the demographic issues we are facing, but I don't think the shotgun approach to immigration is going to fix it.
It's a short-term solution that brings its own problems as a solution to long-term problems.
What happens when the immigrants get old as well? What about them bringing their parents and grandparents over as well? Do we then import more? Do we keep doing this forever? What happens if the demographic crisis becomes worldwide and there is no longer a bottomless supply of desperate workers? It's just shifting today's problems into the future, kicking the can down the road and we can't just keep delaying our problems that's how we have got into the mess we are in today.
Baby boomers were a demographic bulge, and they're living longer too. Those two things combined with smaller family sizes means that there aren't enough workers to cover costs of services that were expected, or to move into positions being vacated by boomers. So we need more workers now, but eventually a new equilibrium will be reached.
What about them bringing their parents and grandparents over as well?
I'm with you on that part of immigration policy. I don't think it should be easy for parents and grandparents to immigrate, unless there's an extra financial contribution made and/or a high level of mandatory private insurance with bond paid for future years.
But all that’s really doing is pushing the demographic bulge down the line. Another can kicked down the road. There will never be an equilibrium with how our economic system is setup. The whole thing is dependent on continuous and unrelenting growth.
The question is, is that actually sustainable, long term? Or are we just delaying another set of massive problems for the next generation to sort out.
It's really all housing tbh, or if you want to zoom out, the debasement of currency. We're in the later stages of USD/NZD, pretty much all fiat currencies in existence, lifespans.
You go ask any young couple 25-30 if they want kids. I'm confident the want for a family is stronger than the birthrate stats but quite often there are the costs involved, mostly housing that are the preventing factor.
That, and this country doesn't seem to be on an improvement path at all.
I'm not sure why this is a surprise to anyone.
Migration was high before covid.
No one came for 2 years or so.
Demand to come to NZ after covid was only going to be higher again, because as much as people in NZ are upset at their government, people elsewhere are even more so with theirs.
people elsewhere are even more so with theirs
I don't think our "skilled migration" programme should position itself as a refuge for people upset with their governments. The US has extremely partisan politics and a rather complicated visa process, yet you see the brightest individuals from around the world queuing up to move there.
I found that employers in places such as Abu Dhabi and Doha are also spoilt for choices when it comes to global talent, despite the fact that you can't even be openly upset with their governments when living in those countries.
People aren't queuing up for the US anymore... latest stats show the number of millionaires moving to the states is down 85%. Western states are refusing to enable innovation and regulation to attract forward thinking entrepreneurs.
Perfect example is the cryptocurrency industry, if you hate it or not, it's big, growing and all western countries aren't providing transparent regulation.
Coinbase is working on exiting the states over it. They recently got given a wells notice from the SEC, meaning they're about to be taken to court by the SEC, after over 50 meetings with the SEC and 0 regulation clarity.
Cryptocurrency is a new, growing industry with huge money and smart minds in it, but most western countries are playing dumb about it while Dubai and other non-west countries are making it as attractive as possible to build empires based in their nations.
Totally. So few people consider this perspective. In my field, I can think of very few medical specialists who've defected to Australia for better conditions. In all honesty it's usually those who can't get jobs in NZ public hospitals (because of a personality or competency problem) who end up crossing the ditch.
I thought a lot of younger specialists weren't able to get placements since there is an extremely limited number of spots to move into? Correct me if I am wrong though, I don't have any experience in that field.
New Zealanders moving to Australia “raised the IQ of both countries” is an intellectually dishonest way of framing things anyway. Losing experience individuals who are already set up here isn't the main issue, those workers have their roots planted pretty deeply.
The main one is losing the younger generation which has a lot more flexibility to move to greener pastures. The ones we have spent a fortune educating and raising only to lose them as soon as they become taxpayers to replace. We can try to replace them with immigrants but we would really be better off trying to retain talent than replace it.
And I have plenty of friends that have moved overseas and I wouldn't say any of them have personality or competency problems if we are bringing anecdotes into it.
I know a lot of families that have gone or planning. strangely a lot of people from the UK and SA who migrated here and are highly skilled. Since they arrived they have rented waiting for house priced to drop and now they find themselves priced out the market, low salary and no savings or holidays... in Au their lives will be vastly different. the deal seems to be to last and get citizenship here and then on the first flight out.
Ditto graduates - they are far better to flick there for an OE, earn a ton build a career.. historically they would come back.. but now?
They might start thinking differently when they realise their kids will getting an internationally worthless degree from TeWhatTeWhuk University in Maori Science, and still cant get into medical school because they have the wrong skin colour. And if they have any hope of obtaining timely medical treatment for themselves, they better leave quick smart before they become the next person who dies from Stage 4 cancer because they couldnt get treatment for six months.
they have 80%+ of the population hook line and sinker i am afraid. Because its actually true
the labour mp who moved to the other party yesterday highlighted the issue again. She should have been hauled over the coals by labour.. instead they had to smile at a traitor. That reaction says it all about who is pulling which strings - and its going to cost both parties very dearly next election.
There won't be a migration-fuelled housing boom, because migration isn't what drives the market. House prices didn't fall when the borders were slammed shut in March of 2020, and they're not going to take off just because we open them again. This is an old wives' tale.
Unsustainable levels of long-term migration will cause all sorts of other issues, just like it always has. However, any change in trajectory for our property market will be driven by other factors like availability of credit which, regardless of how many digger operators and halal butchers we invite to come and live here, is the determining factor in people's ability to participate in the market and bid prices up.
Why would you use pandemic era asset inflation as your argument for why more people doesnt put pressure on house prices? Fuel prices impact the market for V8s, but during covid fuel doubled and thirsty car sales went through the stratosphere.
Many of these migrants bring their own money.
I'm using it as an illustration, not a sole data point. House prices are inextricably linked to credit availability, because credit is what people use to buy houses with. The correlation with interest rates is the most obvious one, but there are others. Inviting 50 bennies to your next auction won't help you sell your house, regardless of how badly they all need a place to live.
‘Migration isn’t what drives the market’.
I don’t agree with that viewpoint. It’s much more nuanced than that. Importantly:
- the volume of migration, and more critically…
- the wealth composition of the migrants
On the second point, there was a wave of Asian immigration to Auckland in the 1990s that pushed prices higher. And even more critically, the big wave of immigration from Britain to Auckland in the early 2000s, that brought lots of highly skilled people and their pounds - at the time one pound equalled $NZ3. We also saw many kiwis returning with their pounds in the wake of 9/11 and the terrorist attacks in London.
Over more recent years, the wealth profile of immigrants has been much lower. So there is less of an impact on house prices.
I don't think it'll put too much pressure on house prices. What it will do is ramp up the pressure on rental prices. Look at Australia for an example of this.
The only rental relief many renters ever got was during covid when immigration was halted. We are now going to return to an even worse status quo than before covid.
We have had 10 years of mass immigration before covid. We need to take a hard look and ask if we have actually materially benefitted from that or if it's time to try something new.
The only people mass migration benefits are business owners. The ramifications for everyone else are wage suppression, more inflation in rents, food etc, longer medical wait times, poorer education outcomes due to not enough teachers, denser housing, more traffic. We are highly paid IT professionals in Auckland with child, and based on these migration numbers, if this turns into a trend we can’t get out of this country quick enough. Europe beckons…
Absolutely. In the mid '90s a Russian family who came to be friends migrated to New Zealand. Both parents struggled to find work, until eventually he was taken on as a junior developer in IT, while she found a job as a dental assistant. Over time it emerged he had a PhD in Engineering and back in Russia had run a heavy construction equipment manufacturing plant, while she was a highly regarded pediatrician whose qualifications were unrecognised in NZ. Both had to start over with their careers, and neither ever complained about it.
I struggle to hire a competent kiwi born accountant, and budget is not the hurdle. Location isnt the sexist (i.e. not auckland cbd or fringe). Meanwhile you get some very good applicants living here from China and Brazil. There are stem professions where the trend is the same.
For a senior position I had to bring someone in from the western hemisphere.
Our education system is a complete letdown in encouraging STEM. We create a massive surplus of comms and marketing majors but have put zero effort into fostering a culture of innovation and technical competency that would actually benefit the economy.
NZ also had less than 10% of university students graduating with a STEM degree in 2019, compared to 36.9% in Germany and 27-30% in Finland, Austria, and Estonia.
I'm not saying that humanities degrees are worthless, they can be super useful, but there has to be a balance.
I'd reject that. New Zealand has some amazing talent in that area, despite the lack of effort and funding from our education system. I think there is an inclination and strength toward that kind of work but it needs to be encouraged.
Neither of us has any firm facts to back this up though so there is no sense in speaking such certainties.
We are never going to be a heavy industry powerhouse that's not what I am saying. But we can excel in Niches that are too small for larger economies. We are a world leader in respirators thanks to Fisher and paykel healthcare. An incredible boat-building industry. Weta Digital created Avatar 2, which is hands down some of the most impressive renderings ever put on screen.
We have the capacity to excel in these small niches that other players view as to small to focus on, and there are still plenty out there but it requires encouragement and investment from the government, not a tax structure that encourages speculation over productivity.
I know I am never going to change your mind on this because you think the solution is to inflate our population until we have a massive internal market, but I really do think that investing in productivity and innovation is a better way forward than what we have been doing, which has been mass unchecked immigration and housing speculation.
I guess where we differ is there's an element of magical thinking and vagueries in your approach. You also ignore the rather substantial industry we already have, and that's not currently being serviced adequately.
Productivity is usually self financing, because productivity usually accompanies increased profits. If an employer can viably replace a human with a machine, they will. I'm not sure how exactly you think productivity can be actively encouraged in a way it's already not, and what sort of return you think that'll foster.
Am I saying drop everything and only do high-value-added work as I have listed above? No, absolutely not. But it needs to be part of the wider economy. I'm not sure what industry you are referring to but I am assuming it's agriculture? I have no issue with agriculture and we need to keep doing that as well as incentivizing education to direct people toward it.
But as is we are way too reliant on far too few exports and it leaves us extremely exposed. A diverse and productive economy is a healthy one. The fact is that despite mass immigration, focusing on agriculture and tourism, our productivity has been falling, and we aren't competing internationally. Our trade deficit is at a record high. Continuing to do exactly what we have done for the last 20 years clearly isn't a recipe that is working. Maybe it's time to at least try something slightly different?
STEM degrees and professions used to be held in high regard as they constituted not only the ability for one to provide well for their family on a single income, but also they are doing a public good that benefits society in a time when there were a lot of uneducated folk. Now you an argue that lawyers aren't beneficial and rob you blind but see what happens when you make large decisions in a multitude of sectors without getting sound legal advice and you'll see the value.
Why would someone want to be a doctor for $150k a year in a stressed clinic where they have 15min to fob off their client and therefore can't drill down tot he core issue to treat, when they can deal in crypto and get rich quick, or become a consultant to the government after a few years in an entry level role then contract for double the money?
The number of jobs around today created by innovation, technology, and new business sectors is staggering compared to say 30 years ago, and the financial incentive is more swayed towards them, IT and software sector for example. The question then is how do we drive a cultural shift back to kids wanting to go into STEM degrees and professions to give back to their communities, when we have had an entire generation (millenials) having such vast opportunities in other sectors open up for employment, followed by GenZ who have even more.
We can push them in schooling, but without the reinforcement by society and the prestige, they simply aren't as appealing. The only true solution I see is for us as citizens to be more involved in our communities and to continue to uphold those that do as model citizens, thus setting an example. Now if only the members of parliament would do the same...
Pacific island immigrants are a net negative taker of $$$.
They shack up with family, get benefits, and get subsidized homes... All without contributing much tax ( working for cash). There are 14000 that are " known of" overstayers.
And .. we had to apologise to these criminals for arresting them before thier breakfast. 🙄🙄🙄
Policing by culture by Race, by time.
Lets not go there but we can if you want. My position has been the most accurate of everybody here imho including shaft aka itguy
This morning the esteemed David Hargreaves admitted he is surprised by the quick turnaround. Me and a couple of others have held that position, despite being on a limb and taking a roasting
#1 rule of life...
Generally, someone who tells you how good they are ...is'nt!
Same applies to these spell checker idiots...
Unlike them i have a adblocker ( Samsung abc) and several bits of security that gives me free viewing and non tracking web browsing. As such i do not have any spell / grammer check and have to "Old school" type every word( which i like as it keeps my mind sharp)
Finally, to all you woke winkers. Speaking the truth about issues thar ruin this country is what is required to resolve the bullshit. You wokesters will have to suffer the pain of your dumb idealistic wankery way after i am dead. So be carefull about what you dont say!... as such, with this poor future in front of you lame wokesters i take solice
And before you say this is not a social issue site...
You all have contributed your take on the social issue side of most fiscal commentaries!
HOWDO YOU SEPERATE THE EFECTS THAT FISCAL DECISIONS HAVE ON SOCIETY.
And why do you guys make a social comment that is accepted but others are not because they are not in sync with one persons own bias and myopic outlook on the subject.
It appears that yo support cancel culture and with that you hate free speech and want the control that it brings to foreever screw up lifes up in perpetuity.
Can someone who likes this post reply to it so it is still visble after i am camcelled
If your white " whanau" overstayed they would be gone by lunch time.
If any other non Pacifica stayed beyond thier visa they would be raided any time. Like the asians are!
They are criminals and if they are not then neither are any other overstayers.
This "be kind" govt wants to let these overstayers become legal citizens .. what a precident!!!!!
And they are being let down by 14000 overstayers, and they are the cheap labour you rich white woke people profit off and enjoy the benefits of inequality from.
You twits read me wrong, i thnk most KIwis are let down by a few. But many two faced kiwis enjoy the benefits of cheap pacifica labour and will alllow exceptions if their is a benefit for them from them.
Forget the law and rules and gow woke and take the çheap illegal labour force Aye.
There’s a massive skills shortage on the horizon because of an aging workforce and because only 46% of kids are attending school regularly.
We’ll need millions of immigrants to fill the skills gap and pay tax as these kids will be uneducated and unemployable.
It’s a disgrace but the govt is doing nothing.
Sounds about right isn't enough to go off though. Do we have actual stats showing this? How are those stats calculated? What is truancy defined as? Is someone taking a week off because they have COVID counted as Truancy?
I'm not saying the numbers are wrong but I would like to see more detail before coming to a conclusion on it.
Regular attendance is defined as attending greater than 90 per cent of class time or missing no more than one day each fortnight.
The Ministry of Education’s latest data shows in term 3 last year just 46 per cent of students attended class regularly - down from 63.1 per cent during the same term in 2021.
We have 2 vacancies that we have been advertising for months and am unable to fill, one is around $90k and the other $70k-$75k. Good house close to town, good reputation as an employer, and there are many other dairy farms around me desperate for staff.
In the latest immigration stats was there any breakdown of age or intentions. There may be a one off burst of immigrant workers getting residency under the new laws being able to bring their families to NZ. I have one worker who has gone home to return with his wife and kids. So one becomes four.
Not to say you vacancies are the same but I recently saw a contract for a farming job with a salary gross of $100k. Sounds good but read the contract and there's at least five illegal pieces of bull clauses added to a Fed Farmers contract. Including, not entitled to take annual leave, seven day a week roster. Real head shaker.
Farming really has done itself a disservice over the years and both good and bad employers suffer as a result.
We want more rental housing but we don't want more landlords, potentially making, shock horror, money!!, we want tourism but we don't want air b’n’b, we are outraged about house price rises but then wonder about why the economy is stuffed when they consistently fall in price, we want higher wages but we don't want higher costs, we don't want inflation but we want everything that causes it, we want the jobs, investment and philanthropy the wealthy supply but we can't stand to see them enjoy their riches, we want to tax a small group of people more and more because we've been led to believe by Labour, Greens and the Maori Party that it's a rigged game and there is no hope for anyone other than the already rich, and that's the greatest most insidious lie of all, after all, if there is no hope of making it, you better vote for the parties that will steal it from everyone who has it and give it to you. Sooner or later NZ will wake up to the fact that we can't tax an ever shrinking pool to have first world everything, we need to utilise our resources, yes, responsible mining, we have an abundance of untapped resources and we need to attract high paying industries paying highly paid people to our land, we need more people to expand the tax base, the 2-3% of people paid more than 180k a year pay 24% of the tax, we need a lot more of them, we need to stop this division based baiting by the left and get on with it, they are a disaster because they have no idea how to turn a dollar into 2 and they have never run anything requiring a profit to survive. We need more people to broaden the tax base, Australia gets it, why can't we?
You make some very good points then you go and insert “we want the jobs, investment and philanthropy the wealthy supply” into one of your statements. I would like to pick you up on the philanthropy part. Philanthropy is an entirely voluntary undertaking from by and large the richest cohort of NZ’ers. While very well received it in no way makes up for the morally bankrupt lack of fair financial contribution to our nation’s operation and growth from this cohort of NZ’ers. It is not based on envy but on a sense of fair play for all citizens contributing their bit based on their ability to pay. I refer you to the recently published tax contributions from sector groups where the data is non-flattering to say the least.
As to housing, the reason there is already signs of a potential turn is you don't solve housing by interfering in a market, all we have done is suppressed animal spirits, CCCFA just stops individuals and banks agreeing to fund ambitious ideas, because apparently the public need to be saved from themselves, LVR’s, DTI’s just stop people doing what they would naturally do, you haven't made housing affordable by making it impossible to borrow and buy one, we have certainly deterred investors, they aren't interested and more and more places are having chronic rental shortages, this is entirely predictable, we borrowed our rental policies from the UK, only we made them worse, they are in rental disaster land, crippling rent increases and growing shortages of property to rent, how dumb is copying something you can already see does not work, is it good policy to throw renters under the bus in favour of those who can buy a home? Just because landlords were lucky enough to benefit from a 30 yr boom, they didn't cause it just like you don'cause kiwi saver to rise or drop the govt has identified 3 main drivers of house price growth over the last 3oyrs and investors have nothing to do with it, not even mentioned in the report, firstly 30 year's of structural declines in interest rates, the main driver, secondly, not enough land or intensification of land to build more affordable property, a distant third but interesting seeing as Parker said he didn't rate this but it's important, absence of a capital gains tax, not on investors but on home owners that's where the vast majority of free gains are, if you want to raise revenue it has to be included, the way the tax dept see this goes like this, everyone's spending is someone else income, when you rent a home the govt gets the tax on the rent received by the LL. If you weren't paying off your house you would be paying rent and that would be taxed when the LL gets it, so by paying off your house as far as IRD are concerned they are missing out twice, once on the rent you would have paid if u weren't using that money to pay off your asset and again on the tax free capital gain you derive from the home, interesting thought, if you actually stop houses growing in value is there any point in spending 30yrs paying one off, maintaining it, paying rates and insurance, might as well rent, but if house prices don't increase, no point in buying one to rent out, if owners and investors can't make a buck out of housing then who can make a buck out of building them, if no one builds, massive housing shortage, NZ’s problem is we don't seem to like people making a buck, but unless someone does, nothing actually happens, careful what you wish for
If the IRD functioned like Immigration NZ, then tax would also never be an honest pre-election topic
just imagine "We've implemented a new 39% top tax rate but there is a 2 year backlog to apply this to everyone"
or "Sorry to report that your tax refund application has been delayed because your case worker has left the department, a new case worked will be assigned soon"
"We collected 4.5 billion in tax during January 2023 but aren't quite sure where it came from"
Okay I'm stretching a little with the last one but the point is that immigration is blunt and dysfunctional.
Passenger statistics for the year to date show only a net increase of 9,500 people arriving in NZ. In March there were a net 24,335 departures, while in April there were a net 34,339 departures.
If immigration really were ramping up we would have sky rocketing rents, vacancy rates below 1%, and house prices increasing. In other words, we would look like Australia. But we don't.
Instead it looks to me like for every visa we issue, two Kiwi's leave the country.
From Customs, who actually count real people entering and leaving the country in real time, as opposed to the made up numbers the other Govt departments come up with to convince us everything is all fine.
https://www.customs.govt.nz/globalassets/documents/statistics/oia-respo…
Ah yes, Stats NZ broken immigration model coming to the fore again. I thought the number of migrants was based on visa's, but this article is based on Stats NZ...
I and a few others pointed out last year that Stat's numbers just didn't make any sense when examined against customs - and interest eventually stopped publishing reports due to the constant revisionism of Stats NZs numbers post-release.
Excellent article David and I absolutelly agree. Nothing has changed to transform New Zealand's house building capacity so another population surge would run the risk of yet another cycle.
New Zealand also needs to urgently upgrade its immigration statistics, which are woeful following misguided reprioritisation by SNZ.
The fascinating dynamic is that this is happening immediately after most investors got locked out of buying, can't get finance to build, or the tax policies make it hard to even hold, so they're giving the keys to social housing, reducing rental capacity even more.
I had the housing crunch pegged for late Q3, I'm revising it for July (which means it's happening now but it won't be a political problem for another few weeks.
I'm glad this will be an election issue. Rents, fuelled by wage inflation, are going to jump and Labour is going to have to explain how we got to this point on their watch.
That's like expecting a magician to reveal their secrets. I won't be keeping my hopes high for any meaningful or even half-truthful explanation, just a bunch of what they do best in the current Labour party: Talk to the country as if we are children, divert all accountability somewhere broad and external to avoid culpability, and doing everything they can to shift focus from all their shortcomings over the last 6 years and failed promises, by promising yet more things they will not deliver on.
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