Polity by Rob Salmond

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Polity: House-buying patterns in Auckland

521 Responses

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  • Sacha, in reply to Sid B,

    Given that we tend to only let in migrants with money nowadays, I expect long-time locals to have lower wealth than recent arrivals. Be interesting to see a breakdown by length of residence.

    Ak • Since May 2008 • 19661 posts Report Reply

  • Swan, in reply to Rae Sott,

    If the market was functioning properly, an increase in demand would generate a supply response. And indeed it will even in Auckland although it is far from optimal given the current planning regime.

    Certainly the idea of promoting owner occupiers being desirable in and of itself is popular, but what are the reasons? Remember that idea was one of the major causes of the GFC.

    In any case, as I previously stated, in a completely supply constrained market, tipping the scales in favour of owner occupiers is a zero sum game coming at the expense of (on average poorer) renters.

    Birkenhead • Since Feb 2011 • 86 posts Report Reply

  • Jim Cathcart, in reply to Swan,

    Certainly the idea of promoting owner occupiers being desirable in and of itself is popular, but what are the reasons? Remember that idea was one of the major causes of the GFC.

    The main cause of the GFC was not the purchase of homes for owner occupancy.It was not a supply / demand impact on price. It was the result of low interest rates to resuscitate the U.S. economy after the tech bubble and the impact of low interest rates globally. Mix that in with an over leveraged financial system bordering on criminality. Then you want to add a banking / govt cartel, particularly in the Anglospehre, keen on asset appreciation in housing as the next driver of economic wealth. NZ and Australia are particularly prone given that we run persistent current account deficits and the nations’ debt loads are largely carried by the private sector (primarily households). That is partly why govt debt is comparatively low (OK, Australia has benefited to some degree from commodities, but household debt load is north of 100% of GDP). The banking system in Australasia is able to borrow from wholesale debt markets; basically, which has been a steady flow of cheap funding that can be available to drive property prices.
    Yes, supply is an issue, but without the financial resources, it is irrelevant. Wealth in NZ has not been driven by some great economic miracle or the dairy sector. People are not really thinking this through.

    Since Nov 2006 • 228 posts Report Reply

  • Kumara Republic, in reply to Rae Sott,

    Investment in already existing housing is dreadful, and contributes nothing, and that is from anybody, the rentier class regardless of where they are from including here, need severely curtailing and NZ needs to again be a nation of home owner occupiers.

    "Rentier" is the keyword here. But typically they're too powerful to be dealt with via the political system, so non-resident house buyers are a much easier target.

    The southernmost capital … • Since Nov 2006 • 5414 posts Report Reply

  • Sacha, in reply to Jim Cathcart,

    a steady flow of cheap funding

    yep. and unrestrained by any sensible government action in either nation.

    Ak • Since May 2008 • 19661 posts Report Reply

  • Kumara Republic, in reply to Swan,

    If the market was functioning properly, an increase in demand would generate a supply response. And indeed it will even in Auckland although it is far from optimal given the current planning regime.

    I’ll say it again: much of the current planning regime is propped up by rentier hypocrites who claim to be anti-RMA free marketeers, but are prepared to play the NIMBY card to block anything that might threaten their cartel-hold on the housing bubble. Also coming to mind is the tit-for-tat use of the RMA for commercial gain by Foodstuffs and Progressive Enterprises.

    The southernmost capital … • Since Nov 2006 • 5414 posts Report Reply

  • Geoff Lealand, in reply to George Darroch,

    Yes, the parasitic real estate sector, I am always rather perplexed how they are left out of the equation, or when commentary is sought by the media, it is usually someone from the Real Estate Institute who pops up. They are such altruistic folk, only interested in getting the best deal for us. Probably donate all their inflated commissions to charity, too.

    Screen & Media Studies, U… • Since Oct 2007 • 2537 posts Report Reply

  • anjum rahman,

    rob, the one thing this post doesn't tell us is how you identified buyers as being ethnically chinese or indian. can you please specify the methodology for that, so that we can assess how robust (or not) it is? thanx.

    hamilton • Since Nov 2006 • 130 posts Report Reply

  • Russell Brown, in reply to Sacha,

    Given that we tend to only let in migrants with money nowadays, I expect long-time locals to have lower wealth than recent arrivals. Be interesting to see a breakdown by length of residence.

    That's an interesting point.

    Auckland • Since Nov 2006 • 22724 posts Report Reply

  • David Hood,

    It is pretty trival to settle the arguments about local (living here) Indians and the degree of similarity with Chinese with a census area unit based correlation.,

    Dunedin • Since May 2007 • 1443 posts Report Reply

  • SHG,

    How the fuck do you tell someone's ethnicity from their surname?

    This is flat-out racism from Labour, and Rob Salmond you should be ashamed of yourself.

    Sickening.

    nup • Since Oct 2010 • 77 posts Report Reply

  • Kumara Republic, in reply to SHG,

    How the fuck do you tell someone’s ethnicity from their surname?

    This is flat-out racism from Labour, and Rob Salmond you should be ashamed of yourself.

    Sickening.

    Then again, the NACT bloc isn’t covered in halos either with Don Brash’s Orewa speech and the ‘fear of a Muslim planet’ elements. So no one’s covered in halos, period. Or is it only racism when there's big money at stake, in which case it's a 'model minority' issue?

    The southernmost capital … • Since Nov 2006 • 5414 posts Report Reply

  • jh, in reply to Sacha,

    In the interests of democracy could we have a choice between open border advocates and a Labour which protects the interests of it's members?

    As we saw in the Burke review of immigration policy 1986 the public has been shut out of decision making:

    The attitudes of New Zealanders in the mid-1990s
    towards immigration may not have reflected the positive perspective on the
    value of diversity in our society that is contained in the Review of
    Immigration Policy August 1986. But this does not mean that the globalisation
    of immigration to New Zealand was an “unintended consequence of policy
    changes in 1986”. It was a deliberate strategy, based on a premise that the
    “infusion of new elements to New Zealand life has been of immense value to
    the development of this country to date and will, as a result of this
    Government’s review of immigration policy, become even more important in
    the future” (Burke 1986:330).

    clearly the immense benefits are not accruing to the bottom half.

    Ranganui Walker (also) points out that Maori interests were shafted by elites.

    Since May 2007 • 103 posts Report Reply

  • jh, in reply to Jim Cathcart,

    Similar narratives being bandied about in Vancouver.
    This issue is not defined by race. Twyford doesn’t bother to go down that road because he knows that without such capital flows, the economy is likely to be toast.

    But you cannot take ethnicity, culture and population out of it. China has 21 cities with economies larger than Greece

    Since May 2007 • 103 posts Report Reply

  • jh,

    Very much like the global warming debate. Just substitute CO2 for population of co-ethnics.

    Since May 2007 • 103 posts Report Reply

  • jh, in reply to Kumara Republic,

    I’ll say it again: much of the current planning regime is propped up by rentier hypocrites who claim to be anti-RMA free marketeers, but are prepared to play the NIMBY card to block anything that might threaten their cartel-hold on the housing bubble. Also coming to mind is the tit-for-tat use of the RMA for commercial gain by Foodstuffs and Progressive Enterprises.

    Where I live they want to rezone for greater density. At a meeting I asked the speaker if population increase is government policy. He replied "well, we have immigration and you have to have population increase to increase the wealth".
    That statement isn't borne out by the savings working group, Australian productivity Commission (ours is muzzled) nor Treasury. Much more likely the assault on our communities is coming from property interests and open border socialists in positions of influence.

    Since May 2007 • 103 posts Report Reply

  • jh, in reply to Swan,

    If the market was functioning properly, an increase in demand would generate a supply response. And indeed it will even in Auckland although it is far from optimal given the current planning regime.

    Richard Heinberg says the human economy is part of the earths ecosystem but many think otherwise. If oil prices get too high the economy slows (demand destruction) and the cost of materials filters into the cost of house construction, infrastructure provision etc.

    For the market to function properly we need dirt roads, chemical toilets, grow your own vegetables and cardboard houses from the Warehouse to reflect the true state of the economy.

    Since May 2007 • 103 posts Report Reply

  • Russell Brown, in reply to SHG,

    How the fuck do you tell someone’s ethnicity from their surname?

    Quite reliably, actually. As Tze Ming notes in the other thread, the top names are all Mainland Chinese names using PRC-standardised spellings.

    The problem is whether the analysis can say anything strong enough about residential status, which is the actual issue.

    Auckland • Since Nov 2006 • 22724 posts Report Reply

  • Joe Wylie,

    In the course of scrutinising a cheque I'd presented at his Hobson Street establishment, the late George Wah Lee once suggested that I should spell my name "properly", i.e. the same as he spelt his.

    flat earth • Since Jan 2007 • 4590 posts Report Reply

  • Kiwikim,

    I am persuaded by the figures to think that the conclusion is plausible. A pity that a bit more of the method has not been explained to the nay-sayers, but perhaps it would not make any difference to their closed minds. They would also need some training in Bayesian statistics.
    Bayesian Theory
    . Further analysis could be done, for example with the full list of sales.

    The whole point of the Bayesian analysis is that we do not know where the buyers are from because they were not asked and it is not recorded in the sale documents. The government defence is that it is not a problem because we don’t know.
    But we (and the govt!) can do some Bayesian analysis with other things that we do know (eg surnames) to make an estimate. This can be combined with other information to refine it, such as name frequency, spatial patterns etc, from the census that do have details of ethnic ratios. It is all a pretty standard methodology that has been used for over 100 years.

    It is just ignorant by correspondents to say that since they have an asian sounding name yet they are not Chinese the whole analysis is invalid. The individual is statistically insignificant. The fact that there are a certain number of citizens and residents with non-european names (5%) was properly accounted for in the analysis.
    Likewise the claim that the numbers for Indians are all students is plain silly. But I suppose that people do not read following comments. The Herald article hinted at the data sources used and the methods, but probably was not appropriate to put more in a newspaper article. But since I can do this sort of maths I get it.

    There are other legal, open, sources of every sale in NZ. This could have been used with the ‘leaked’ data. Perhaps it was. The electoral roll is great for a list of surnames . The sales data and ownership is public information on the web that you can get but it costs a lot of money. Anyone can get it for each property on the internet by paying for it. But even if we actually had all the details of the domicile of every sale would the government take any action. It seems to me that for various reasons that they are not willing to articulate that they encourage the investment especially to balance the terms of trade figures.

    Auckland • Since Jul 2015 • 1 posts Report Reply

  • talkie_toaster,

    Hi all. Created an account just to comment here, because, Jesus Christ on a pogo stick, (with notable exceptions) the responses to this analysis encapsulate everything that's wrong with the Labour party.

    I see a lot of discussion about how this is a bad strategy, framing, it's too complicated, blah, blah blah.

    I see almost no discussion about whether the analysis is actually true.

    Can anyone on this blog, Keith Ng included, claim that the conclusions of this analysis are fundamentally incorrect? You should at least attempt to keep a straight face while making this claim. Here: you can cut and paste my text.

    "The conclusions of this analysis are fundamentally incorrect. Chinese investors are not a major driver of the Auckland property market."

    I dare you. Make the claim. Because to do so is to ignore:
    1) This analysis, which uses very standard statistical techniques and comes to very reasonable conclusions based on hard data
    2) The lived experience of thousands of Aucklanders of all races in the property market
    3) The obvious marketing of Auckland property in the Chinese language to Chinese investors in China using Chinese media
    4) The obvious crowing of real-estate investors about non-resident, non-citizen Chinese investors bringing in Chinese money from China in leaked emails
    5) Statements made by Chinese investors that confirm this analysis

    Many people disputing this analysis are the people creaming money off the situation so their opinion is worthless. Most of the other disputes rely on the old trick of faux-outrage at statements that were not made and conclusions that were not drawn, by making your own statements and conclusions. Another strange idea is the idea that any analysis that looks at race and ethnicity must therefore be racist. Then there's the statement "if you're explaining, you're losing". Please.

    If I was Phil Twyford, I'd call a press conference on Monday morning, state that he absolutely stands by this analysis, state that he is not a racist and that he will sue anyone who claims he is, dare the Nats to actually start collecting hard data on the citizenship of property investors in Auckland, and state that he will resign if the CONCLUSIONS of this analysis are shown to be incorrect according to the hard data that we are currently not collecting.

    Aucks • Since Jul 2015 • 30 posts Report Reply

  • talkie_toaster, in reply to SHG,

    And, here's a perfect example of the faux-outrage about statements that were not made and conclusions that were not drawn.

    Aucks • Since Jul 2015 • 30 posts Report Reply

  • steven crawford,

    Then again, the NACT bloc isn’t covered in halos either with Don Brash’s Orewa speech and the ‘fear of a Muslim planet’ elements. So no one’s covered in halos, period. Or is it only racism when there’s big money at stake, in which case it’s a ‘model minority’ issue?

    Its racism when people who feel entitled to own a house but can’t afford to, gang up and direct there frustration and aggression towards random people with Chinese names.

    Insighting racism, is what I don’t like to see influential people do. It gives me the shits.

    Atlantis • Since Nov 2006 • 4163 posts Report Reply

  • Sacha, in reply to talkie_toaster,

    Can anyone on this blog, Keith Ng included, claim that the conclusions of this analysis are fundamentally incorrect?

    People have been pointing out that there is an unresolved logical leap between 'has Chinese surname' and 'is foreign investor'. Pretty major weakness wih the argument.

    Ak • Since May 2008 • 19661 posts Report Reply

  • steven crawford,

    The Labour Party might be better advised to hire sociologists to study how much plain old fashioned greed contributes to resident kiwis competing to out mortgage one and other.

    Atlantis • Since Nov 2006 • 4163 posts Report Reply

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