Polity by Rob Salmond

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Polity: House-buying patterns in Auckland

521 Responses

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  • Sacha, in reply to BenWilson,

    That's the sort of kicking you open yourself to by putting your foot in your own mouth for them.

    Ak • Since May 2008 • 19705 posts Report Reply

  • BenWilson, in reply to Mark H,

    True Labour made too easy for National to attack them on this

    I dunno. I think this has a big chance of being an own goal for National. Because the unusual inversion of Labour being the "racists" and National getting to be the one who slams them for it isn't something that I think will resonate with a lot of undecided voters. If there truly is a demographic that is turned off by the "Identity politics focus", then I would bet that they would be wondering what the hell National is doing playing that tune. It's not a tune that they would feel comfortable echoing themselves.

    So them calling it "dumb politics" by Labour seems to me like a rearguard. They should be seeking to distance themselves from it completely - if it becomes a big part of national debate then we get the big danger to National that actual sound data about foreign ownership in NZ could come out and they'll be looking like they're in complete denial about something that is surely a massive issue to a lot of undecided voters. They will look like they're hiding it. Which, let's face it, they are.

    Auckland • Since Nov 2006 • 10650 posts Report Reply

  • Swan, in reply to Russell Brown,

    True, it may well blow up more before it pops. I think the message here might be caveat emptor to potential purchasers, but of course we heard that before. Any way you look at it, it is hard to make an argument that this is bad for NZ. It is only bad for would be property investors, but is that policy relevant?

    Also note that the front page of the herald site is looking pretty ugly at the moment. Certainly any hope that they might have moved on from the data being related to Chinese ethnicity to the wider question about foreign investment looks to have been dashed:

    http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11480028

    I'm not in the office today but when I next have to sit down next to my ethnic Chinese colleagues I am going to be feeling pretty sheepish.

    Birkenhead • Since Feb 2011 • 86 posts Report Reply

  • David Hood, in reply to Matt Crawford,

    It was clear during the middle of last decade that ever higher interest rates did little to slow the gain in house prices.

    I looked into that too. While interest rates got worse as a predictor of house prices, foreign currency conversions into New Zealand dollars got better as a predictor.

    But lets be clear, with regards to interest rate policy and houses, the RBNZ banking stability mandate means it is not actually a problem, provided not too many New Zealanders try and compete by taking out mortgages and buying houses (so that there are not enough mortgages that a downturn destabilises the banking sector). It would lock those with mortgages into a lifetime of "underwater" house value, but provided that number of people is fairly small the banking sector is safe.

    Of course, if you believe in quaint fairytale notions of home ownership and community building and social capital... well, that is not the Reserve Bank's mandate, and it doesn't seem to be the present government's interest.

    Dunedin • Since May 2007 • 1445 posts Report Reply

  • Steve Barnes, in reply to Swan,

    Also note that the front page of the herald site is looking pretty ugly at the moment.

    Yup, got my ire up I can tell you.
    For those of you that don't wish to see it yourselves right now they have a "Property" article penned by Ann Gibson with the words "They should build, not buy" over a picture of some elderly Chinese people.
    This harks back to what I said earlier about Racism being endemic in NZ.
    To be honest it made me feel a little sick.
    So, for all those here bagging Twyford take a quick look in the mirror, Labour are NOT the bad guys here.

    Peria • Since Dec 2006 • 5521 posts Report Reply

  • BenWilson, in reply to Swan,

    Any way you look at it, it is hard to make an argument that this is bad for NZ.

    No, it's really not. Being locked out of the property market is bad for a lot of NZers. And if the bubble bursts, it would be economically catastrophic here because so much of our economy relies on it. It won't be great for people that property suddenly deflates when their entire business folds at the same time, and no bank will lend them any money all of a sudden. It definitely won't be good for all the property owners who will have their mortgages foreclosed on them, losing everything they've got and a whole lot more.

    I don't know if it's a bubble, personally. But if it is, that's not a good thing. It's a recipe for the next Great Depression for us.

    Auckland • Since Nov 2006 • 10650 posts Report Reply

  • Katharine Moody, in reply to Idiot Savant,

    Labour and the Greens have changed government housing policy this way

    What Members Bill on housing policy are you referring to?

    Wellington • Since Sep 2014 • 798 posts Report Reply

  • Danielle,

    You do all know that you can talk about two or more things at the same time, right? I'm sure moaning about "identity politics" makes perfect sense to you if you're not, y'know, one of the people with an "identity". You want to talk about economics? Go right ahead! Just don't tell the people feeling othered that racism isn't the "real issue". BOTH OF THE ISSUES ARE REAL ISSUES.

    Charo World. Cuchi-cuchi!… • Since Nov 2006 • 3828 posts Report Reply

  • Joe Wylie, in reply to Swan,

    It is only bad for would be property investors, but is that policy relevant?

    As long as you think of aspiring first-time homeowners as schmucks who failed to get with the brave new agenda, no problem.

    flat earth • Since Jan 2007 • 4592 posts Report Reply

  • Stephen Judd, in reply to Steve Barnes,

    for all those here bagging Twyford take a quick look in the mirror, Labour are NOT the bad guys here.

    But that was a pretty predictable way this story would develop, and they went ahead anyway. So they have to cop some blame.

    Wellington • Since Nov 2006 • 3122 posts Report Reply

  • Katharine Moody,

    Auckland median house price rose by $3,000 a week last year;

    http://www.interest.co.nz/property/76464/auckland-house-prices-surge-new-record-rest-country-flat-reinz

    Rest of New Zealand flat/unaffected.

    Wellington • Since Sep 2014 • 798 posts Report Reply

  • Clunking Fist, in reply to Jim Cathcart,

    "wouldn't it make more sense to more accurately weight the sample by characteristics such as age, income, etc"
    Eh? It's not really a "sample" in the classical, technical sense. And the buyers weren't asked their age, nor their income: if the data aren't collected, then they can't be analysed.

    Wellington • Since Jul 2015 • 1 posts Report Reply

  • Stephen Judd,

    Not sure whether this was posted here yet, so just in case: Professor Thomas Lumley's take at StatsChat.

    One of the repeated points I make on StatsChat is that you need to distinguish between what you measured and what you wanted to measure. Using ‘Chinese’ as a surrogate for ‘foreign’ will capture many New Zealanders and miss out on many foreigners.

    The misclassifications aren’t just unavoidable bad luck, either. If you have a measure of ‘foreign real estate ownership’ that includes my next-door neighbours and excludes James Cameron, you’re doing it wrong, and in a way that has a long and reprehensible political history.

    Wellington • Since Nov 2006 • 3122 posts Report Reply

  • Katharine Moody, in reply to Stephen Judd,

    But the outlier (statistically, price-wise) is Auckland - so James Cameron, had he purchased residential RE in Auckland during the sample period, would indeed have been counted. The analogy used doesn't make sense to me - James Cameron's Wairarapa farm purchases seem completely irrelevant.

    Wellington • Since Sep 2014 • 798 posts Report Reply

  • Craig Ranapia, in reply to Steve Barnes,

    So, for all those here bagging Twyford take a quick look in the mirror, Labour are NOT the bad guys here.

    So, once more they're not the bad guys here because what... they outsourced the race-trolling and would like us all to believe they couldn't have possibly predicted how it would play? Well, thank heavens for that!

    North Shore, Auckland • Since Nov 2006 • 12370 posts Report Reply

  • simon g, in reply to Steve Barnes,

    So, for all those here bagging Twyford take a quick look in the mirror, Labour are NOT the bad guys here.

    Ethics 101: A useful guide to “good” and “bad” is to ask how much time somebody had to think in advance about their actions/reactions.

    Reacting to a news story – maybe seconds. Sub-editing a developing news story – maybe minutes or hours.

    Preparing the entire basis of the news story, and deciding to release it, to use it – did that take days or weeks?

    So Labour knew what they were doing. They must have discussed it, and gone ahead having done so. We still don’t know if the overall response was what they wanted, but we can definitely say it was what they should have expected. No excuses there, at all.

    (ETA: and I appear to be agreeing with Craig. Labour, look wot you dun!)

    Auckland • Since Nov 2006 • 1328 posts Report Reply

  • nzlemming, in reply to Craig Ranapia,

    Well, I kinda share your frustration there Mark, but not in a way you’re going to like. If a certain segment of “the left” don’t like being called racist anymore than certain segments of “the right,” that’s all on them. Stop making it so damn easy. It really is that simple.

    As I've said before, when Craig and I agree on something, it's pretty likely to be the truth. This is one of those times.

    Waikanae • Since Nov 2006 • 2931 posts Report Reply

  • Katharine Moody,

    Holy Cow!!!!! This just stepped up another notch – try 90% of purchases from mainland China;

    http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11480138

    Very sad too that these agents for fear of losing their jobs, I assume, want to speak anonymously. The Government who refuses to collect this data is putting their employment at risk.

    Wellington • Since Sep 2014 • 798 posts Report Reply

  • Rosemary McDonald, in reply to Katharine Moody,

    Yep...and just heard from an agent that Aucklanders are pushing up prices in Tauranga and Hamilton to the point where prices are listed at $100,000 more for the same property last year.

    Madness.

    And specially scary that agents (who are benefiting from these ridiculous prices) are too scared to comment publicly.

    Waikato, or on the road • Since Apr 2014 • 1344 posts Report Reply

  • Stephen Judd, in reply to Katharine Moody,

    The analogy used doesn’t make sense to me – James Cameron’s Wairarapa farm purchases seem completely irrelevant.

    He is simply commenting on the utility of using a Chinese surname as a proxy for non-residency. I quoted the summary of a much longer article which is worth reading.

    Wellington • Since Nov 2006 • 3122 posts Report Reply

  • Jim Cathcart, in reply to Clunking Fist,

    "wouldn't it make more sense to more accurately weight the sample by characteristics such as age, income, etc"
    Eh? It's not really a "sample" in the classical, technical sense. And the buyers weren't asked their age, nor their income: if the data aren't collected, then they can't be analysed.

    But it is. It's a non-random sample of property purchasers from a real estate agency. And I agree with you. The demographics are nothing more than speculation and "back of envelope" inferences from census data.

    Since Nov 2006 • 228 posts Report Reply

  • Swan, in reply to BenWilson,

    So much of our economy relies on what, selling houses to the Chinese?

    The RBNZ stress tests last year showed the banks could withstand a 50% fall in house prices and unemployment reaching double digits. We actually havent had high credit growth in NZ recently as others have pointed out, so the conditions for a financial crisis associated with falling asset prices just aren't there. More of our resources are moving back into house construction, but it is hardly an enormous part of the economy and it is still much less than the size of the industry in the 2000's.

    There just arent the conditions for a significant recession associated with falling house prices, particularly if the RBNZ is onto it.

    Birkenhead • Since Feb 2011 • 86 posts Report Reply

  • Kumara Republic, in reply to BenWilson,

    I don’t know if it’s a bubble, personally. But if it is, that’s not a good thing. It’s a recipe for the next Great Depression for us.

    And if/when it does happen, the Icelandic approach would probably be the least worst approach for NZ.

    The southernmost capital … • Since Nov 2006 • 5429 posts Report Reply

  • Katharine Moody, in reply to Stephen Judd,

    Oh, read it in full. Gee, not good in my opinion, as the author takes his own stab at ‘guesswork’ conclusions .. for example;

    Personally, I’d guess that all these explanations are true: that Chinese New Zealanders (on average) buy both homes and investment properties more than other New Zealanders, and that there are foreign property investors of Chinese ethnicity. But that’s a guess: these data don’t tell us — as the Herald explicitly points out.

    Completely inappropriate given that is all based on his own assumptions (what looks like him doing some kind of ethnicity-based 'profiling?).

    But more importantly, as an academic, he then strays into academic territory which he has perhaps no expertise in (i.e., planning/economics), in saying;

    But on top of that, if there is substantial foreign investment and if it is driving up prices, that’s only because of the artificial restrictions on the supply of Auckland houses. If Auckland could get its consent and zoning right, so that more money meant more homes, foreign investment wouldn’t be a problem for people trying to find somewhere to live. That’s a real problem, and it’s one that lies within the power of governments to solve.

    That was a badly thought out academic contribution, I suspect.

    Wellington • Since Sep 2014 • 798 posts Report Reply

  • Stephen Judd, in reply to Katharine Moody,

    as the author takes his own stab at ‘guesswork’ conclusions .. for example;

    He's just pointing out other plausible explanations. Hence the stress that these are guesses, and the data doesn't itself say these things.

    Wellington • Since Nov 2006 • 3122 posts Report Reply

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