why would anyone who doesn’t want to live here want to invest in an asset whose value grows slower than wages?
People do it in Germany because it provides a steady, long-term return. But the rental market is different there,
Every time I have an opportunity to use local music in some way, I do.
Good for you.
And on a lighter note, something both brilliant and stupid:
It would be good to see a local patronage-style of crowd funding where people could elect to give an artist ongoing support at the micro-payment end of things – say a dollar or two a month – rather than backing a project.
Like people do for this website.
Not all crowdfunding has to be project-based.
Well, shit, this is pretty amazing. A massive three-volume free compilation featuring everyone from The Bilders and the Axemen to Salad Boys and Las Tetas:
Personally I think it should grow slower than wages and salaries to decrease the wealth gap.
The levers we can then tinker with are pretty clear. For supply, natural technological change is always a upwards driver, but it’s not controllable. Increasing the speed of approvals is a tap that can be turned up or down. For demand, interest rates are a lever we already use. Limits on foreign capital flows are another, and they could free up the other lever considerably. Trying to do it all with interest rates is like trying to swim with one arm. Then there’s the obvious possibility of redistribution through various subsidizations. I’m sure there’s others.
So before the change point, more of the rise in housing stock value was due to the rise in the real value of the improvements on the house.
After the change point, the rise was more about revaluation of existing assets, and specifically increases in the value of the underlying land. We know land values have increased hugely in our cities over the last decade.
Incidentally this fits in perfectly with the argument that land supply is the main culprit when it comes to housing affordability.
Well, yeah. With each official valuation the value of improvements as a proportion of the the overall valuation of my central Auckland residential property decreases. But I’m guessing that location (ie: land) has been the primary driver of residential property prices since way before 2001.
Also, what form of demand would cause an increase in Auckland land prices so tremendously out of proportion to population increases in the past five years? If demand for land is driving up prices, where is that demand coming from? It doesn’t seem to be related to external or internal migration. I think this relates to David’s point about the difficulty of planning housing supply when the demand indicators available to you don’t tell you anything useful.
Kia ora. Thank you for popping by.
Indeed. And thanks also to David for participating so usefully in the discussion of his post. Y'all are good.
Authority X said it was supply constriction due to RMA restriction. I am sure they did.
It's surprising how often this is offered as a received truth.
This is why I don’t think supply-side solutions are going to do much – the supply-side solutions are couched in terms of supplying the demand from local people, but we have no idea how big the supply would need to grow to deal with the demand from sources invisible to the New Zealand economy.
Totally agree. We also have no idea how this demand could change over time. It could treble over a year due to some policy change in any one of the very large countries in the world.
Yes, this occurred to me after David posted the first of this stuff in comments on earlier posts: what nature of demand are we even planning for?