Yay, Eli! *waves*
It's lovely to see the cabinet papers referencing the Housing Improvement Regulations 1947 as a living document.
Part 1 of the regulations are all good, if delightfully antiquated (regular mention of the privy, or the understandable but now outdated assumption in Clause 6 that a fireplace and chimney will be the standard method of heating). Houses must be fitted with an approved form of heating, be free from dampness, have adequate sanitation facilities etc.
Part 2 is more problematic. While we'd both agree that crowding is Bad for Health, I'm not so keen on it being made the landlord's fault. People crowd because they can't afford to rent enough bedrooms for everyone in the household. Many landlords limit the number of occupants allowed, but those who don't, or who set the limit high, provide those families with somewhere to live, even it's not ideal. I'm not sure that fining the landlord would improve those families' circumstances.
On the plus side, inflation since 1947 means $40 plus $10/day isn't going to sting landlords so much. The Treasury Inflation Calculator tells me $40 in 1947 would be $2898 now (and the $10/day would be $725/day), so it was clearly meant to be a meaningful fine at the time.
About kids being shamed because they cannot afford the new expensive uniform and shoes and all the extras rather than the shiny hand me downs.
Er. As I recall, having a new uniform and/or new shoes was not desireable. It made you look like a third former. And if you were lucky enough to find a previous, no-longer-available-for-sale-only-available-second-hand-or-hand-me-down and, according to the rules of fashion and uniforms*, much cooler, uniform, you were considered extremely lucky indeed.
*One of the rules of uniform fashion is that a school must change its uniform design to a shape just out of fashion, just as the outgoing design shows signs of coming back into fashion.
David, I think Swan's point is that when you say "they have to get the money from somewhere", many of them will be getting the money from the sale of their house, which has gone up in value.
e.g. A village has 10 houses. All the people living in the houses own their homes. They bought them in 1965, when the going rate was 30c and a penny whistle.
One family leaves the village. Someone new comes to town and buys their house. They have lots of money, and they pay $1m for the house. So now all the houses in town are "worth" $1m. The townsfolk have a flurry of real estate activity, rearranging themselves amongst the 9 other houses, and paying each other $1m each for the properties. Noone has to borrow any money, because the value of their own home has gone up too. So the value of the houses has gone up, but the debt hasn't.
I'm 100% certain there's a reason why such a scenario wouldn't explain the graph you've provided, but I can't quite figure it out myself. I'm looking forward to hearing it.
Just what I thought when I read that too, and then I couldn't read any of the rest of it except through that lens.
The easiest bypass for that is to send RMB direct via those International money transfer companies you see around the place and convert it offshore.
Seriously? If it's possible to do that, then it doesn't sound to me like there's any kind of effective ban on taking money out of China at all. Not that I'm saying there should be, of course, only that there isn't.
But I do think that the potential ability to influence prices is several orders of magnitude greater in the pool of buyers that outnumbers the population of NZ investers by perhaps a thousand-fold.
Yes. I have now gone and looked at the date and numbers of the sales data, and see that:
a) the sales were February to April, which is the period of peak sales. According to my earlier hypothesis, if overseas investor demand is steady through the year, that would mean that the B&T figures underestimate the presence of overseas investors in the market.
b) The B&T figures include 3,922 sales. I was going to query what percentage of the overseas investor market B&T covered – if they were really good at attracting that market, their figures would overrepresent overseas investor sales. However, 3,922 sales represent 45% of Auckland sales for that period. If we accept that 30% of the B&T sales were PRC-based (possible), then even if no other B&T sales were overseas investors, and no other agency sold to a PRC-based or other overseas investor (extremely unlikely) then overseas investment would still represent 13% of the Auckland market. That's a meaningful chunk, and certainly enough to drive up local prices, even if it wasn't an absolute minimum estimate of overseas investor presence in the market.
Only if they actually sell again when the crash happens.
They choose spring and summer on advice that the best prices are usually obtained then.
That's not the major reason. My observation, and what lots of REAs will also tell anyone who'll listen (because they want their income to be less seasonal...) is that when house prices are lower in winter it's because it's the less desireable stock left over from summer sales, and that good properties listed in winter will get as good or better prices because there's less good stock available.
The main reason people list in spring and summer is because they're going to be looking to buy again themselves, and traipsing round open homes, or moving, in winter, is cold and wet and bothersome; and because if they're looking to buy again themselves they know there'll be more stock available for them to choose from; or because there's more stock available they've found something they want to buy and so they're selling as well. It's a bit chicken and egg, but it's how it is.
So there are some seasonal patterns to house sales in general. What drives those seasonal changes, and might it affect the ethnic distribution of house sales?
For example, do migrants from a particular part of the world come at a particular time of year? Such as coinciding with school years here or school year in country of origin? Or maybe with specific holiday periods?
Is there a sudden rush of house-buying before the uni term starts, by parents of international students?
Or maybe there’s a house-hunting season when the weather is nicer or the kids are at school where leisure-buyers (without time constraint) dominate and overwhelm urgent-buyers (such as immigrants).
As a long-time real-estate voyeur (what REAs call “tyre-kickers”), and someone with a bit of experience in seasonality analysis, yes to all that.
I don’t know what period the dataset covered. I thought about looking it up, but then thought the following observation would be less biased if I didn’t look it up:
New Zealand house sales have traditionally been highly seasonal, with sales peaking in late spring and late summer (there’s a dip in late December/January when the property-owning class tend to go on holiday). I don’t know whether or not overseas property investment behaviour is seasonal. If overseas property investment interest is roughly similar all year round, then estimating the participation of overseas investors in the New Zealand market from a set of winter sales would over-estimate the contribution of overseas investment to New Zealand real estate sales, while using summer data could underestimate it. If overseas investment is also seasonal, the overestimate would be increased or decreased depending on how that seasonality was distributed, with the limitation that locals and overseas investors can only buy what is for sale, and less property is for sale in winter.
Following that train of thought… if overseas investment interest is non-seasonal, and if their participation in the market is more than negligible, then I would expect their presence in the market to create more upwards pressure on house prices in winter than in summer. In a resident-only market, the seasonality of interest in buying roughly matches the seasonality of interest in selling, as most vendors is moving over in rather than out of the property market. However, if investor interest is steady over winter, but the supply of houses for sale is less, then supply<demand means that prices will increase.
So now I really, really want to know whether overseas investment – or local “property investment” (vs “home buying”) for that matter – is seasonal. Because if it’s not, then comparing property sales seasonality across different regions might give some clues about the contribution of property investors (overseas or local) to Auckland price pressures.
Ultimately, all the focus on name-analysis, or overseas-buyer registers, hides the fact that local investors also put home buying out of reach. Demand is demand. Overseas investors are a handy scapegoat to blame for disappointed would-be home-buyers, but I wonder if it wouldn’t be more fair to blame “property investors” full stop, regardless of where they’re based. Yes, there is the additional issue of rental income going out of New Zealand rather than staying here, but that’s not what the disappointed home-buyers are frustrated by.
The flipside of an overseas landlord not being around to do shit to help you is they can’t hurt you as easily either.
The Residential Tenancies Act 1986 requires landlords who are out of the country for 21 days or longer to appoint a local agent.
'Course, the tenant has to know about that to complain about it.