Posts by Russell Brown
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Polity: House-buying patterns in Auckland, in reply to BenWilson,
The TLDR is that it’s small potatoes in the big picture of Auckland prices, right? I mean what have we got for a small house? Something in the range of 50-100K in total? That’s currently how much my place has been appreciating per annum.
If you're around the median house price, it's now more like $150k.
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OnPoint: My last name sounds Chinese, in reply to nzlemming,
Eek. Those almost make kiwibog look like a voice of reason.
Yes. But remember, it's New Zealand's leading business publication!
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Polity: House-buying patterns in Auckland, in reply to Katharine Moody,
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.
That's the weak part of his post, for sure. Attributing the problem to consents and zoning is pretty much an unsupported assertion.
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Polity: House-buying patterns in Auckland, in reply to Swan,
If this is a bubble, as some are suggesting, that is great for nzers. When the foreign investors sell up en masse we will have ended up with a large transfer of wealth from China to NZ. Also house prices dropping is what we want, right?
Trouble is that if it's happening, it's being influenced by an even bigger bubble. If a lot of capital flees the two Chinese stock markets, it's going to go somewhere.
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Polity: House-buying patterns in Auckland, in reply to BenWilson,
I also don’t really believe it because it’s almost entirely down to what you define as an unutilized house. Is a holiday home that could sleep 10 people, but is completely empty 90% of the time, a potential residence? Yes and no. Yes, it could technically house 1-2 families. No, it won’t because the rich owner doesn’t want to. We have hundreds of thousands of these in NZ.
My impression, unsupported by data, is that "lock up and leave" is increasingly being touted as a virtue in Auckland property ads. But I'm damned if I know what it actually means.
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Polity: House-buying patterns in Auckland, in reply to Rich of Observationz,
The fundamental cause of rising prices in Auckland is a shortage of supply
Don’t believe this.
David Hood's comment above would seem to argue against it.
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BNZ economist Tony Alexander weighs in:
Firstly, good on someone for trying to throw more light on an issue which I have highlighted in the past with a recommendation that we adopt Australia’s rules of banning sales of existing houses to foreigners. See for instance my last BNZ-REINZ Residential Market Survey from March 2014. I do not fault Labour’s Housing Spokesman Phil Twyford for releasing the data. But as with my own efforts to estimate offshore buying last year and in 2013 the data simply do not allow us yet to truly know what proportion of our housing stock is being sold to people who will never live here - be they Chinese, Albanian or whatever.
The real estate agency data released this week suffer a huge flaw in that one cannot identify whether the person with the Chinese name is in fact located offshore having no intention of living in New Zealand. Their family could have been in New Zealand since the Otago gold rush days of the 1860s. They might have migrated here in the wave from the late-1980s when we changed our migration rules to specifically reduce emphasis on English heritage and open the door instead to people based on measures of merit, regardless of where they were coming from.
And:
1. The fundamental cause of rising prices in Auckland is a shortage
of supply and until that gets addressed prices will stay highly elevated and perhaps keep rising out to late-2017 this cycle.2. Whatever the true magnitude of Chinese buying has been these past few years it will get much greater. Chinese families are growing wealthier, so naturally they will seek offshore assets. Chinese people wish to get assets off the mainland and this week’s massive intervention in sharemarkets by the Beijing authorities illustrates why people have high distrust of the environment on the mainland in which they would hold assets. And Chinese authorities have yet to relax hefty restrictions on people getting their funds offshore. When they do, well then you will see something entirely new hit the world’s residential property markets.
3. We should as soon as possible adopt Australia’s rules restricting foreign buying of anything other than new housing unless resident for 12 months.
But here is the fourth point which to date I have not emphasised but now will do. Adopting Australia’s rules as they stand won’t be the panacea many are hoping for. In Australia’s case people have been able to get around the restrictions quite easily. The regime is now being enforced more rigorously, but that does not necessarily alter what is being seen as a huge problem – something which people in Hong Kong have been seeing more and more of in recent years.
Many Chinese who buy properties never, or rarely, occupy them. They sit empty. This applies even to newly built apartments sold to Chinese buyers. Chinese simply want an asset away from any control by the CCP.
There was an article on this in The Australian newspaper this weekend, page 6. What this means is the following. As Auckland very slowly goes vertical in areas like New Lynn, developers will find they can very easily get offshore financing for their projects and hefty sales off the plan to Chinese investors (we Kiwis prefer to touch and feel before buying). These investors may never occupy or even rent out their investment. Thus while on the face of it the Aussie rule that a foreigner may only buy a newly built house or apartment sounds like a grand idea, it could leave the housing supply situation unchanged from a no-rule regime.
Thus, were we to adopt the Aussie regime we would need to add in an extra clause along the lines of apartments having to be made available for rent, actually rented, or something like that.
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Speaker: Identification strategy: Now…, in reply to Tze Ming Mok,
Okay, five minutes later, you’re right: if by ‘not many’, you mean there are ‘not many’ Chinese people *in* the NZES 2011. There are 103 ‘Chinese, Indian or other Asian’ respondents in the dataset. That’s about 3% of the dataset, meaning that Asians altogether are under-represented in the survey – about three times less than there should be.
Crikey! Did not know that.
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NBR has republished Keith's post (with permission), and with comments on.
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OnPoint: My last name sounds Chinese, in reply to jh,
data journalist? what’s that? Media bias?
Data journalism is a recognised and vital sector – and, yes, Keith does data journalism.
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