Privatizing public land for property speculators is the solution???

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So privatising public land for property developers is Key’s solution to Auckland’s free market bubble?

The cure is as bad as the disease!

How did that land become Government land? Was it the Works Act? Did the Government take the land under the guise of public need only now to sell that land to private developers? It takes 2 years to build a house so this is as much a ‘solution’ as National’s capital gains tax that isn’t a capital gains tax in that it is window dressing to look like the Government are doing something to a property bubble that they have vested political interests to keep afloat.

The only way this would be acceptable is if all the houses on this public land were state homes, but that’s not what this idea will do, it will be the Government cutting a deal with property developers and it will be the property developers who benefit, not the poor left cold on the street.

Supply solutions to a demand problem isn’t a solution and because many who vote National are earning more from their property speculation than their actual job – there will be no solutions.

24 COMMENTS

  1. Good call Martyn,

    This is another Bastion Point really isn’t it?

    Now we see why National wanted to amalgamate all councils so the central Government can assume to have more power over them all.

    So they can grab all public reserves under an elaborate land grab.

    What’s next?

    It is now up to the Tangata whenua to respond along with all others as they did during Bastion Point to stop this naked robbing of local council’s land reserves.

    We need Maori MP’s first to step forward here also and everyone will follow.

    This Government only responds to widespread action doesn’t it?

  2. Actually I suspect Nationals land freeing project will end up looking a bit like a version of Labours KiwiBuild. My understanding is that selected developers will be able to defer paying for the land until properties go to market. In general terms the government is intervening directly in the housing market to generate house building. It looks like a government sponsored house building program, it walks like a government sponsored house building program …

    • Except it won’t be owned by the Government (i.e we, the people) but by private property speculators, because apparently what we really need in Auckland is a further increase in property speculation in order to stem property speculation.
      It looks like government sponsored crony capitalism, it walks like government sponsored crony capitalism …

    • The critical thing to watch is urban land prices from the centre of a city to its fringe.

      The government controls urban land supply. It can create Crown land whenever it likes via either its power of compulsory purchase or it can use its rezoning powers to create more urban land. The govt can connect that land to the agglomeration of humanity, work, ideas, education, etc by its control over transport infrastructure provision. Ultimately through these mechanisms the government can influence the price of urban land.

      There is enormous wealth to be made from this process and that is what National are targeting for their ‘mates’. The baubles (as important as they are for those in need) of the Budget are just a distraction.

    • Deferring payment until the land goes on the market is in effect a subsidy to the builder. This is consistent with much of the governments intervention in the housing and rental markets. For example the wholesale use of accommodation supplements in lieu of the provision of state housing is an indirect subsidy to landlords and a further stimulus to house price inflation.

  3. A milk prosessing plant or dairy company if you like, has been sold to Chinese buyers, it will be used for making just ice cream and the ice cream will be exported to china,this government is allowing the goose that lays the golden egg (milk exports) to be sold overseas .its doubtful if NZ will benefit much.

  4. This will eventually have some effect on the demand problem, but the issue is the effect will not be potent enough and will come to late.

  5. The issue very simply is about supply and demand. See that in Westport, 1 out of every 10 houses is for sale. So if the release of land means a whole lot houses get built, then that is ultimately good.

    • Dan,

      Sure its about supply and demand but have you yet woken up to the avalanche of Chinese buyers yet to come?

      Be where I have and see what happened to Vancouver as you haven’t seen nothing yet Dan.

      • Is there some difference between ‘buyers’ from whatever country and New Zealand taxpayers speculating in Auckland housing???,

        It is the speculation that is wrong not the ethnicity or country of origin of the speculators,

        Having said that i see no reason what-so-ever to allow those who are not New Zealand citizens or long term New Zealand residents to buy any property in this country that is currently housing or intended for housing,

        If such people want to invest in New Zealand property they can do so by depositing their monies in a Bank trading in New Zealand…

        • Re your suggestion that “If such people want to invest in New Zealand property they can do so by depositing their monies in a Bank trading in New Zealand”.
          Are you aware that “Banks trading in NZ” include three of the biggest Chinese Banks? Do you ever wonder where the rich Chinese entrepreneurs, who are so beloved by this government, get their money?
          Do you need reminding that there are rather a lot of Chinese (1.4 billion in fact) and that China has the largest balance of payments surplus in the world, which is presumably in ready foreign currency, and which they need to spend some how. They can buy NZ wholesale. All they need is a willing seller, which we have ….and he happens to be a currency trader as luck would have it.

          … – See more at: https://thedailyblog.co.nz/2015/05/21/privatizing-public-land-for-property-speculators-is-the-solution/#sthash.627k5Te8.dpuf

          • Dennis, you seem to have fogged your glasses, go back and read the total sum of my previous comment, slooooowly if you are deficit in comprehension skills please,

            i am sorry, if these rich Chinese entrepreneurs you seem to despise are either citizens or long term residents then, putting aside whether money should have allowed them that citizenship for the moment i would suggest that such people have every right to behave within the laws as every other citizen does,

            It is the tax laws and the interpretation of those tax laws which allow such property speculation and the race of the speculators is immaterial….

      • Cleangreen – I totally agree. Somehow NZ families deserve first pickings at this. NZ housing should be for kiwis first and foremost.

  6. Yes, those involved in the biggest ongoing tax rort in New Zealand (a) need more and more houses to rip more and more off of every New Zealand tax payer that every week pays their due GST and Income Tax,

    And (b), need to involve more and more of the monied middle class who vote in this Tax Rort so as to be able to suppress complaint by making more of them complicit,

    2011 data from the Treasury and bizarrely released by Nick Smith,(not the brightest spark in Nationals battery i would suggest), says ”that of almost 200,000 people claiming losses on ‘rental properties’ 11% are non-resident,

    Smith of course was trying to use this information to downplay the part foreign investors were playing in Auckland’s house price inflation,

    Here is the link: http://www.stuff.co.nz/business/…/national-digs-in-on-foreign-ownership-ban

    Bernard Hickey writing for the NZHerald here: http://www.nzherald.co.nz/business/news/article.cfm?c_id&objectid... tells a story of dramatic property price rises in Auckland and how rents have stayed stubbornly low,

    In fact Hickey goes further pointing out the rental yields from Auckland rental property are lower than can be gained from your average Bank Term Deposit,

    i am not about to point at Hickey and insinuate He is either a Liar or Stupid in writing this particular article, while imparting some useful information Hickey ignores the obvious,

    Rents in Auckland in particular are being Fixed by the whole little ‘Tax Rort Industry’ also known as ‘Property Investment’

    Tenants and Rents for this Game of Property Speculation are simply necessary Tools and Property Investors ‘have’ to pay tax on income from rent,

    This becomes hard to follow, But, if you have an ‘Interest Only Loan’ the amount you collect in Rent is immaterial, But, the Tax Rules state that” you must be either renting or attempting to rent the property At The Market Rate to be able to claim Tax Rebates on the property”,

    i will get to these Tax Rebates, But, as far as rent goes the ‘investor’ has to pay tax, so, for reasons which become apparent when you read the list of claims you may write off against All Other Income Tax you are due to pay there is little point, in view of the ability to have ‘Interest Only Loans’ to charge a rent that would cover the full costs of a ‘Rental Investment’,

    Here’s interest only loans being touted by 2 of the Banks,

    http://www.bnz.co.nz/support/home-loans/…a-home-/interest-only-loans

    ”Perfect for property investors” says the BNZ,

    The ANZ betters the competition here:

    http://www.anz.co.nz/…/home-loans-mortgages/home-loan…/compare-home-loans...

    ”You can choose either a fixed or floating ‘interest only loan’ for a term of up to 10 years”, (and here was me thinking they were only for a 5 year term),

    So with an interest only loan there is no worry about how much rent is collected and the fact is seeing as tax must be paid on rent there is a vested interest in keeping rents as low as possible so as to be able to write off costs against income against other income tax on wages and salaries,

    From IR264,(an Inland Revenue PDF), the guide for rental investors we learn exactly what can be claimed as a tax rebate from ALL of your other income including wages and salaries,

    Interest on mortgage,
    Rates and Insurance,
    Property Management Fees,
    Accountant Fees,
    Lawyers fees,(up to $10,000 a property),
    Repairs and Maintenance,

    With an admonition, ”you can claim a deduction for any of these expenses that you incur while your rental property is either rented or is available to rent”,

    A ‘Free Ride’ in other words, while you and me pay all our due GST and income tax, while Ma and Pa with a home mortgage pay all their due income tax and GST plus the full cost of the mortgage, interest,rates, insurance etc etc, 199,000 ‘Property Investors’ pay nothing,

    199,000 thieving sacks of Pus, aided and abetted by complicit Politicians for the past 15 years, more than willingly funded by Banks offering interest only loans, PAY NOTHING,

    These 199,000 of our fellow citizens get you and me to pay the ‘interest’ due on their ‘interest only loans’ through tax rebates on their wages and salaries,

    This is why Joe and Jane Bloggs cannot compete at auction to buy their first home, because Joe and Jane wanting to own their home are being forced out of the market by these thieves who get a free ride via the tax write offs and thus the ‘price’ of the property is immaterial to them because unlike Joe and Jane after their first home the property investors will never pay anything and when they choose will simply walk away pocketing the hundreds of thousands of dollars in untaxed capital gains made along the way….

    • Absolutely Spot On!!! The NZ Government encourages property speculation and so do the bank, it’s that simple. And yes, you won’t get many thumbs up for your comment because many people reading this probably have ‘a rental or two’ and are thereby complicit in the destruction of the old NZ dream- ‘to own a home in which to raise a family’. As long as their kids get a home through inheritance, bugger the rest!

      • Brian, no worries about the thumbs up or down my comment may accrue,

        i had a gig at them early on and it was touch and go over whether or not suicide was going to become an option,(sarc joke.),

        Had a giggle considering whether the authors past and/or present of the Standard had payed a clandestine visit to thumbs me down, more sarc!, after reading a snarky little comment from one of them in Open Mike over there about a Post here at the Daily Blog today my mind at the time wouldn’t have put it past them,(my sarcasm knows no bounds this evening, must be the chillie sauce on the fish),

        You are of course correct about there being plenty of ‘property investors’ masquerading as being left leaning, and, to throw a snarky comment back at the aforementioned, a month or 3 back i came across a comment there from a former author to a current author, both of whom have admitted to having ‘investment property’, in the vein that they were ”providing a social service”,

        i kid you not, i just about choked on my laughter, a situation i am sure those who know me over in those august web-pages would likely welcome,

        Putting aside the sarcasm and poor attempts at humor for a brief moment you have to wonder what actual hope there is when those at the heart of the Labour Party Machine,(as opposed to the Labour MP’s), and supposedly the bastions supporting the union movement happily identify with the speculative property cabal and make such comments i point out above…

  7. If you want to make property available at the cheaper end, it isn’t houses for sale you need. It’s budget rental accommodation. There is as big if not a bigger need for this at the outset. At this point I am less worried about aspirational junior yuppies. They can wait their turn or buy in the provinces.

    Once the poorer people are better housed – and I don’t really mean in Projects or Porirua-style ghettos – we have to integrate rental housing better than that – then the low end rental houses, no longer lettable at inflated rates, will start to appear on the market.

    In the meanwhile everyone will be better housed.

    If we try to build “cheap” housing to buy. All that will happen is that it will be snapped up into the bubble at still inflated prices until the little public land has been entirely privatized.

    By the way, I am not concerned about the bubble bursting in an American kind of meltdown. The difference is, the American owners when they go underwater can simply chuck the keys to the bank and walk off. In New Zealand the owner of a property valued less than his or her mortgage still owes the full amount and is required to pay.

    Bottom line: if the bubble scenario frightens you, don’t buy a house in Auckland.

  8. Crown land sell off to property developers.

    May 1977. Bastion Point revisited?

    A five year old girl died there, as the result of a tent fire. Protest leader Joe Hawke’s niece.

    RIP Joanna Hawke.

    • Myself i cannot quite see the comparison between the proposed sell-off of crown lands and Bastion Point,

      The settlement between Ngati Whatua and the Crown says that Ngati Whatua must be given first option on any crown land sold, not being privy to the actual document i cannot comment upon the ramifications of the Crown buying land off of what is an arm of the Crown vis a vis the settlement deed,

      i should imagine tho that any of the Iwi with claim in the Rohe will be looking at what the Government are proposing and how the terms of their settlement might be effected by this,

      i remember it well, Bastion Point that is,my sister was there for the duration, myself and others listened to a live account of the evictions and arrests on the radio while parked up out at Pare Max…

      • @ BAD12 – Thanks for your response. I can see where you are coming from.

        When I heard the government was planning to sell off crown land for housing, my mind automatically went back to the dark days of the Bastion Point conflict.

        Just a case of remembering a part of NZ’s shameful history, when Muldoon sent in his stormtrooping police gang to harass, arrest and physically drag off protesters from the site.

        Sell > crown land > housing – for me triggered memories of Bastion Point.

      • A wee update: Ngarimu Blair speaking for Ngati Whatua this morning says that in terms of a collective of treaty settlements they and a number of other Iwi believe they do have first right of refusal on ALL the Crown land held in Auckland if any of such land is proposed to be sold,

        Bastion Point is Maori land!!!, so said a large sign confronting anyone leaving my Wellington flat for quite some time, so it is,

        Ngarimu confirmed this morning that Ngati Whatua have taken over full ownership and control of 150 Bastion Point State Houses,

        Ngati Whatua are now registered with the Government to be able to provide their Iwi these 150 Homes for a rent of 25% of income,

        The walls are also going up on 30 more Homes Ngati Whatua are building on THEIR land,

        While i despise the underhand ransacking of the State Housing estate by the National Government in other parts of Auckland and the country as a whole Ngati Whatua and every other Iwi across Aotearoa have of course a far more legitimate and long standing right over such things which far outweighs any sense of offense entrenched in my small mind when it comes to the State divesting itself of the Homes which house the poorest of us and are in effect the collective wealth of our fathers and mothers and their fathers and mothers befor them….

        • Long live the trickledown plan. & “Pay it forward”

          “Trickle down” economics doesn’t work now, as our modern Corporate greed knows no such social responsibility policy.

          We older people remember when we all lived in the real “trickle down” economy where we all had a slice of the wealth of NZ but that was a shared plan during the 1950’s and 60’s.; Like a “pay it forward” society it was.

          Called “egalitarianism”, it instilled in us all that we felt a security and a feeling that we were being a part of the wealth, but young today under 40’s cant be expected to know about this wonderful time.

          They wouldn’t know about the perfect distribution of wealth of those days were all about, that National has now demolished any reference or policy towards in todays dog eats dog world oft today.

          Our generation have trouble comprehending why the young are accepting of this winner takes all, when a better wealth distribution is still available to them if they embraced it, and pushed government to reintroduce it again.

          Many other countries still use the Egalitarian system and last year Denmark was voted the best country to live on the happiest scale. They are an egalitarian society as we were with a similar population as ours.

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