Polity by Rob Salmond

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Polity: House-buying patterns in Auckland

521 Responses

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  • Steve Barnes, in reply to Mikaere Curtis,

    One day they might hire some actual talent that can compete with the consultants National use.

    At least with Labour aiming at the target and missing, causing collateral damage amongst the "Hand Wringing Set" we know that they are not just having "Brain Farts" and using expensive PR sluts to make their ideas seem, almost, sane.
    It almost feels like the Left have been convinced by highly paid scribblers to believe that Labour is 100% Pure Evil and we need to experience Labour being perfect, beyond reproach and Godlike before we would entertain the merest inkling of the idea that we could trust them in Government.
    Meanwhile, the "Filthy Few" filch the Countries finances to feather their fetid nests.

    Peria • Since Dec 2006 • 5521 posts Report Reply

  • BenWilson, in reply to David Hood,

    If I can generalise, when I was passing this to people in 2013 the general response from people on the left was “I believe you but I don’t understand you” while the general response from people on the right was “we all agree the price rises are due to constrained supply due to local government regulation, so this is irrelevant”. No one seemed to have their heads around it being a completely open economic sector exposed to the world (freakishly so by world standards) and that world pressures may be very different to that of a market internal to the country.

    If you'd tried it here I'd at least have been sympathetic, since it seems so damned obvious to me. I don't think you did, though, from a casual scroll back through your comment history. Nice pictures tho!

    Auckland • Since Nov 2006 • 10629 posts Report Reply

  • BenWilson, in reply to Steve Barnes,

    Personally I think the best thing to do is not meta-analyse everyone else's motivations. I'm not meaning you more than anyone else - it just seems to me that the interesting part of this debate is what the study says. The uninteresting part is all the framing and left-fights-left-while-right-watches-and-laughs. That stuff was all inevitable.

    Mentally I just put those who are left wing and comfortable with a racial dogwhistle into a different box, probably one I don't vote along with. Those who are left wing and uncomfortable with it are probably in my box. But who is in which box is hardly of interest to me - I already know all that anyway. I could have written on a piece of paper beforehand all the people that would contribute on each side of that inevitable debate, and the betting would only be about how long they would last before they either got bored, flounced, or got timed out. Not the interesting data here. What's interesting is what can actually be gleaned from the data. The whole business about microanalysing after the fact just how the press release could have been written? That's all just opinion, and will never be settled, nor will it probably shed any light on anything, just sound and fury. I wish it could be cauterized off to a different chamber. People who love that kind of shitfight can have at it.

    Auckland • Since Nov 2006 • 10629 posts Report Reply

  • Sacha, in reply to Mikaere Curtis,

    This laissez faire wet dream of everyone in the entire world being able to buy our land out from underneath us is a total crock, and both Labour and National are to blame

    reckon.
    #recklessbullshitters

    Ak • Since May 2008 • 19680 posts Report Reply

  • Sacha, in reply to Steve Barnes,

    the "Hand Wringing Set

    ooh, you should see mine.
    #twisted

    Ak • Since May 2008 • 19680 posts Report Reply

  • Mikaere Curtis, in reply to Steve Barnes,

    It almost feels like the Left have been convinced by highly paid scribblers to believe that Labour is 100% Pure Evil and we need to experience Labour being perfect, beyond reproach before we would entertain the merest inkling of the idea that we could trust them in Government.

    No, it's the Greens who have to be perfect and beyond reproach ;)

    I'm not saying Labour need to bullshit and dissemble like the Key Government do, but they do need to frame their policy points in a way that a) associates National with concepts that show that National are a bad government (e.g. only interested in transferring wealth to the wealthy, making life hard for our most vulnerable etc) and b) coherently and consistently supports Labour's vision of a just and fair society where more people get a chance to do the best for themselves.

    None of the above require Labour to relinquish their values or policies, nor misrepresent them, just communicate them in the right way.

    Try listening to Politics on Mondays' Nine to Noon. Hooten consistently frames his arguments, and he's good at it, so good that the hapless Williams typically agrees with him, and hardly ever challenges him on anything other than the history of the Clark government.

    Step 1 would be for Labour to replace Williams with someone who can frame arguments in a Labour-positive way.

    Step 2 would be identify terms National uses and to de-fang them. For example, when National was in Opposition they always talked about government department "bureaucrats" but know they call them "officials", how about calling them out on that ?

    Or when Anne Tolley calls benefit entitlements "tax-payers dollars", how about re-framing it as "the safety net for the most vulnerable" ?

    Until Labour can engage in the ideological jiu-jitsu that National are so good at, they will forever be playing catch-up, simple as that.

    Tamaki Makaurau • Since Nov 2006 • 528 posts Report Reply

  • Mikaere Curtis, in reply to BenWilson,

    The whole business about microanalysing after the fact just how the press release could have been written? That’s all just opinion, and will never be settled, nor will it probably shed any light on anything, just sound and fury.

    Here's the thing: there will never be a Labour/Green government until Labour can get their shit together*. As a Green, I'm sick of having "WTF Is Wrong With Labour ?" conversations, I actually want them to, y'know, be competent and unified for a change.

    And analysing the latest debacle in terms of how it could have been better handled is one way of providing them with positive feedback of the kind of choices that they could easily be making that would provide the kind of political traction they so desperately need.

    Are you actually happy with Labour being a basket case ? If so, why ? I'd love to know.

    * or National spectacularly implode, but that is vanishingly unlikely to happen

    Tamaki Makaurau • Since Nov 2006 • 528 posts Report Reply

  • Swan, in reply to BenWilson,

    Yeah but the route that asset price bubbles take when they affect the economy is via financial instability and is always preceded by strong credit growth.

    Birkenhead • Since Feb 2011 • 86 posts Report Reply

  • BenWilson, in reply to Swan,

    Yeah but the route that asset price bubbles take when they affect the economy is via financial instability and is always preceded by strong credit growth.

    Swan, I told you that the scenario you propose would literally wipe off my entire net worth. That's affecting my economy right there. And I'm one of the lucky ones, with quite a high equity proportion. Most of the property owners in my age bracket that I know are far more leveraged. These people would be not just affected, they would be bankrupted. We're talking about middle class people with good jobs who would have negative equity. If the bank didn't foreclose them on the way down to zero equity, they would be literally stuck in place, unable to sell until property rose 50% again, because if they did, what they'd have left to spend would be hundreds of thousands of dollars in the negative. There are tens, if not hundreds of thousands of people in this situation. It's quite ludicrous to suggest that an outright collapse of that magnitude would not be highly destructive to our economic wellbeing. It certainly won't "come out in the wash".

    Auckland • Since Nov 2006 • 10629 posts Report Reply

  • BenWilson, in reply to Mikaere Curtis,

    Are you actually happy with Labour being a basket case ? If so, why ? I’d love to know.

    No, I dispute that they're a basket case. They're still twice the party that the Greens are, even at their absolute worst, in terms of support. The perception of them fucking up the messaging is one I think I'll wait for some polling to judge. That I personally don't like the messaging is no indication of anything at all. I'm not a sample. I don't even vote for them.

    As a Green, I’m sick of having “WTF Is Wrong With Labour ?” conversations

    Me too. Hence, I end this comment, right here.

    Auckland • Since Nov 2006 • 10629 posts Report Reply

  • Mike Steinberg, in reply to Russell Brown,

    Former Reserve Bank economist Michael Reddell points out that overseas investment is part of the cause, but inward migration levels and restricted supply are far more significant.

    www.croakingcassandra.com/2015/07/14/offshore-demand-for-houses/

    Since Jul 2015 • 3 posts Report Reply

  • Kumara Republic,

    Would you believe this is a Fran O article, given her NZ-China biz links?

    NZH – Fran O’Sullivan: Govt must act over foreign house buyers

    The southernmost capital … • Since Nov 2006 • 5415 posts Report Reply

  • Katharine Moody, in reply to Alfie,

    although Joyce was a bit woolly on detail and couldn’t say when that data would be released or in what form.

    Maybe already posted here .. but Fran O'Sullivan has taken Joyce to task on that 'wooliness' big time;

    http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11480867

    Wellington • Since Sep 2014 • 798 posts Report Reply

  • Kumara Republic, in reply to BenWilson,

    No, I dispute that they’re a basket case. They’re still twice the party that the Greens are, even at their absolute worst, in terms of support. The perception of them fucking up the messaging is one I think I’ll wait for some polling to judge. That I personally don’t like the messaging is no indication of anything at all. I’m not a sample. I don’t even vote for them.

    My inner Machiavellian predicts this move will reinforce the Greens’ double-digit poll ratings, as it would probably attract Labour’s liberal elements. While Labour itself has concluded the Missing Million is a lost cause, so it focuses on Winstonites and the Waitakere men & women who might have voted for Helen once.

    And from a more personal viewpoint on the whole controversy: a long-time family friend who’s a bit of a hunting/fishing/military type moved from Wellington to Auckland (Massey specifically) several years back, because it was the only place where his post-grad science degree would get him work. He once split his votes between Labour & Greens in Helen’s day (while still in Welly), but having lived and breathed the Auckland rat race, he’s become more bitter & cynical enough to swing to NZF. From what he’s told me – including a lot of stuff about the Auckland housing bubble – he sounds very much like the kind of voter Phil Twyford is pitching to.

    The southernmost capital … • Since Nov 2006 • 5415 posts Report Reply

  • Katharine Moody, in reply to BenWilson,

    because left wing politicians are themselves mostly a wealthy class. If not at the start, then certainly by the time they get any real influence.

    In this crazy world of shadow banking and off balance sheet accounting, we really, really, really haven't even a handful of New Zealanders who could count themselves as part of the wealthy class in the global scheme of things. And this issue, the topic of this thread, is all about the global scheme of things - a simple concept: sovereignty.

    The 'wealthy class' of once sovereign nations become victims of dispossession in the long run as well. Ask any Greek who hasn't yet fled their country.

    Globalization, as far as I can tell, works its way from the bottom up in terms of dispossession - but it will get around to all of us one day if we cede/squander our sovereignty.

    That is for me what this issue is all about.

    Wellington • Since Sep 2014 • 798 posts Report Reply

  • Katharine Moody, in reply to David Hood,

    Once we get into the 2000s the NZ market is not being influenced by people getting NZ bank loans, it is being governed by capital from elsewhere.

    I love your work. I believe it was the pound sterling flying in in the early 2000s. If I recall it was an amazingly favourable exchange rate for Brits and we hadn't had the vast price escalation that Britain got when the Russian oligarchs moved into their market. Many cashed in and came to the colonies - hence our mini boom (in prices) started around 2002. At least then, NZ wages, I believe were also still on the rise. That boom peaked in 2007, and then we had the GFC. Interesting, your graph during that period. If I'm reading it right - says it all.

    The sad thing is, I thought all through the Clark/Cullen years the surpluses were mainly due to the influx of overseas capital taking ownership of our farms, forests and houses. Looks like JK hasn't had any new ideas either. We desperately need to force this capital influx in to job creation industries. But then I think Winston Peters has been saying this since Adam was a cowboy.

    Wellington • Since Sep 2014 • 798 posts Report Reply

  • Katharine Moody, in reply to Mikaere Curtis,

    If I recall, that's pretty much what Labour did say during the last election?

    Wellington • Since Sep 2014 • 798 posts Report Reply

  • Katharine Moody, in reply to David Hood,

    for a few key quarters a bunch of people were buying houses much cheaper than the previous quarter.

    Credit was tight - cash was King, hence the cheaper prices.

    Wellington • Since Sep 2014 • 798 posts Report Reply

  • BenWilson, in reply to Kumara Republic,

    My inner Machiavellian predicts this move will reinforce the Greens’ double-digit poll ratings, as it would probably attract Labour’s liberal elements. While Labour itself has concluded the Missing Million is a lost cause, so it focuses on Winstonites and the Waitakere men & women who might have voted for Helen once

    I've got a similar little guy talking in my inner ear, and I'm thinking the loss of the most liberal elements will be less than the gains from people concerned about Chinese capital flooding property here. Because most of those liberals already left. And in switching to Green, they're not entirely lost - they become backing from a coalition partner.

    But where the others come from, I don't know for sure. The missing million is not necessarily homogeneous. There's a never-have-voted disenfranchised group, but there's also there could be a lot who just stopped voting Labour and couldn't quite stomach the alternatives.

    I definitely know more than a few that express sympathies to Winston, who formerly would probably have voted Labour or Alliance. I don't think they go so far as to actually vote Winston, though. It's an outlet for those who don't feel a connection to what the Clark Govt was about.

    But the never-do-vote group might find some appeal in at least addressing the financial property lock-out that's happening in Auckland. More is needed, actual plans to do something about it. Because while National have fiddled as the chances of affordable housing here burned, it's still something Labour never did anything about either.

    Auckland • Since Nov 2006 • 10629 posts Report Reply

  • Stephen Judd, in reply to Mikaere Curtis,

    Step 1 would be for Labour to replace Williams with someone who can frame arguments in a Labour-positive way.

    Accepting your general point about Labour and message, I don't think Labour can control who National Radio chooses. Doubt National have been too happy with Hooton bagging Key and senior ministers lately either.

    Wellington • Since Nov 2006 • 3122 posts Report Reply

  • william blake,

    For sure the people buying investment houses in the Auckland region are wealthier than me. The drop in value of milk solids and the sliding dollar are implicated in foreign investment as well as an under skilled workforce, poor timber quality and by laws tying up land, permit issues and rapacious consent fees.

    Of course the bubble may burst one day strangling off millions of dollars of liquidity.

    Since Mar 2010 • 378 posts Report Reply

  • David Hood, in reply to Mike Steinberg,

    It would be fairly to say I disagree with Michael Reddell et al, because rather than asserting that immigration is primary as a matter of underlying theory (an a priori) if you actually run a correlation New Zealand immigration to house prices, it is an OK relationship. However, you add-in capital flows to the model, they are both a much better correlation and cause the immigration influence to disappear as an important factor (as if you look at them together capital flows explain all of immigration and more beside). Which makes complete sense if among immigrants only those with enough money can buy houses, and the money of immigrants is only a subset of capital flows buying houses.

    I think traditional models of "buying houses" are predicated on what has been the case for almost all countries in the world for almost all of history- that you have to be there to buy a houses. Perhaps the demand-side model, rather than being a local one of competition, should be a model of one of the few places in the world where anyone, from anywhere in the world, can buy property even if they cannot buy property where they actually are. The traditional model is like discussing the way demand for bookstores will rise with population growth from data from the 1940s to the 1990s, and completely ignoring the effect of the rise of Amazon, the internet etc on the sector.

    Dunedin • Since May 2007 • 1443 posts Report Reply

  • Alfie, in reply to Katharine Moody,

    Maybe already posted here .. but Fran O'Sullivan has taken Joyce to task on that 'wooliness' big time;

    Thanks Katherine. It's good that Fran included the loophole of de facto buyers fronting purchases that I suggested in an earlier post.

    The reason why it won't be perfect is that many acquisitions are transacted through 'buyers of convenience', like the 20-year-old foreign students in Auckland apartment blocks who front sales for non-resident family members.

    Those students already have local bank accounts and an IRD number... so that's a ready-made get-out-of-jail-free card for wealthy investors.

    Dunedin • Since May 2014 • 1377 posts Report Reply

  • Rich of Observationz, in reply to Katharine Moody,

    all through the Clark/Cullen years the surpluses were mainly due to the influx of overseas capital taking ownership of our farms, forests and houses

    How does that create a * fiscal * surplus, though? The Clark/Cullen administration stayed in surplus simply because they had an efficient public service and ran taxes at a level that adequately covered costs.

    National have cut taxes for their mates, damaged the tax base (it started under Clark, granted) by letting the wealthy convert taxable income into untaxed capital gains and damaged public service efficiency (think consultants replacing salaried staff). Hence they struggle to run a surplus despite lower levels of services.

    Back in Wellington • Since Nov 2006 • 5550 posts Report Reply

  • Craig Ranapia,

    Regulars will know I'm no great fan of Brian Rudman, but I've got to admit today's column makes a lot of sense -- someone at Te Harold has to.

    Of course in gentrifying areas like Ponsonby, the $20,000 villa of the 1970s is now fetching closer to $2 million than $1 million. All without anyone from mainland China in sight.

    The only ethnic change in these desirable suburbs is the Polynesian renters who'd made the suburb home were driven out to the fringes by Pakeha baby-boomers like myself.

    Now, having enjoyed the ride, the baby-boomers discover their kids can't afford to buy a ticket on to the escalator themselves unless the parents front up with a massive deposit. So the hunt is on for scapegoats.

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

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