Posts by Swan
Last ←Newer Page 1 2 3 4 5 Older→ First
-
Questioner is both right and not right. Yes both local and national government have studied it, but they came up with different answers in terms of whether net benefits were positive or not. When the central government announced support of the CRL, they said they would undertake a joint business case with the council in 2017. That indeed has not happened yet, and accordingly council is jumping the gun spending so much money in advance of it.
-
Hard News: After Len, in reply to Morepork,
Everyone built their own pools by and large. The fact the west has so few pools is because they built so few pools. Amalgamation only happened five years ago. As for the west subsidising the north shore, give me a break. Leaving aside the large rates increases on the shore, let's talk big ticket spending -wastewater. The North shore has prudently maintained and upgraded Rosedale to allow for another generations growth. As Waitakere did nothing to plan for their future wastewater needs, the Supercity was a very lucky break. Watercare is building big pipes from Waitakere to Rosedale.
-
"Canada did OK by continuing to protect dairy / poultry,"
The small fraction of Canada that work in the dairy or poultry industry did ok. The other 99.9%, lost out by continuing to overpay for food. In particular the poor are most affected.
-
"One bouquet here is that tobacco companies have been specifically shut out of the new ISDS rights, meaning we can now safely move to impose plain packaging on cigarettes. (They’d better get on with that now.) "
The government position is that we won't until we see the outcome of the Australia WTO case. Nothing to do with TPP or ISDS.
-
". If I’m right on that, it will lock in the low level of home ownership in New Zealand, which is an awful result."
I think you also have to be right about a long list of dubious assumptions about the drivers of the housing market, to draw that long bow of a conclusion.
-
Speaker: House prices and the "Magic Money", in reply to BenWilson,
If it isn’t what’s happening, it would be interesting to hear your theory about why there has been a national reevaluation that added 300 billion to our estimation of our net asset worth?
Well my hypothesis is in my comment above - constrained land supply has resulted in prices being bid up.
But also lower interest rates.
-
Sorry that should say "the real value of improvements on the land"
-
"I don’t think David is disputing that. He’s arguing that a corresponding increase in debt hasn’t happened, after all. The idea that it should seems to be received wisdom in economics."
Why? What is the reason for debt to go up because peoples houses have been revalued. Sure they could all go out and load up on debt to spend on holidays (the wealth effect) but there is no reason why that should be so, and certainly no reason why they would draw down some large proportion of their equity.
Having had a bit more time to think about this, one potential hypothesis is that since the "magic money" change point in the graph, the increase in the value of the housing stock has been associated more with revaluation of existing assets and less to do with real investment.
For example, if I build a new house, then that is a real investment that requires money from somewhere - very likely in the form of debt. This investment will cause a rise in the value of the housing stock. Similarly if I renovate a house.
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.
-
I will need to look at this in more detail, but it is not clear to me why increases in debt would need to match increases in house value. A huge amount of the increased value in the housing stock is simply people who own their own houses which have been revalued upwards. The additional value of my house since I bought has no debt associated with it, it is simply a revaluation of an asset.
So while I am sure your "missing money" is indicative of something changing, it doesn't necessarily have anything to do with "extra money" coming into the housing market.
-
Polity: House-buying patterns in Auckland, in reply to BenWilson,
When you own a house, or aim to own one, those are the same thing. The cost of owning a more expensive house is a larger mortgage. You’d have to be an economist not to realize this.
If you own a house, changes in the prices of houses obviously dont make a difference to your cost of living. If you dont own a house you have the option of purchasing housing directly (renting) or "growing your own" housing (buying a house to live in). If the pricing of growing your own housing increases, this doesnt mean the cost of housing increases, even if you want to grow your own housing. The cost of transportation is in a city is not affected by the sale price of helipads in the CBD, no matter how much you want to fly a helicopter to work.
Furthermore, if you buy a larger asset, it’s usually on the expectation of larger future gains, so asset prices do fundamentally have an effect on rents too.
You have got causation wrong. Expectations of future rent increases affect house prices (at least in certain models of market behaviour), but that doesnt mean house prices cause rent rises. That makes as much sense as saying expectations of rent rises cause rent rises. And even if that were true, house prices would be a sympton of the underlying cause that is driving expectations.