Lack of overseas investment regulation promoted in Shanghai and Hong Kong

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The Herald better be careful not start a twitter fight with the Wellington twitterati by even mentioning Shanghai and Hong Kong in this story

New Zealand’s lack of overseas investment regulation is being promoted in Shanghai and Hong Kong to help sell apartments rising on the site of the country’s best-known record store.

“NO stamp duties and property purchase tax, NO capital gains tax on residential property if sold after two years of holding,” Colliers International says advertising Queens Square, a 226-unit block promoted as on “the Nanjing Road of Auckland” and to rise on Real Groovy’s Queen St site near Karangahape Rd.

This country’s liberal regime, unusual internationally, is being promoted in that ad for the block by New Zealand developer Robert Holden’s Conrad Properties.

…while The Standard rip themselves to pieces over Phil Twyford  the reality is NZs free market lax regulation continues to lock many NZers out from buying a home because domestic and foreign speculators continue to take advantage of our inane rules.

I’m waiting for Twitter to flay Brian Easton to death

recent data showing that 40 percent of the purchasers of one real estate agency had Chinese surnames may be helpful. There are numerous caveats; for instance, the anonymous agency may have cornered the market of Asians purchasing houses.

(I do not think this fact is ‘racist’. That arises from how one responds to it. When I first studied poverty in New Zealand – some forty years ago – I was able to show that Maori were more likely to be poor than non-Maori, and I brought together other features of their lives, such as poor outcomes in education, health, housing and unemployment which seemed associated. I was trying to use the Maori data base to help understand poverty more generally; As far as I know, nobody said I was racist..I am doing the same here.)

Insofar as this data sheds any light on what is happening in the Auckland market, it seems to support the anecdotal evidence that there is a strong demand from Asian purchasers. Moreover it suggests that much of the demand is coming from offshore although some may be from immigrants (since Asians arrivals into Auckland are greater than their proportions of residents).

The Government don’t want to solve the demand side of the Auckland property market because it’s the only thing other than rebuilding Christchurch that is generating the pretence of economic growth. The solutions are too threatening to those domestic speculators currently creaming it and supporting National.

  • 30 000 new state houses using a vast Government backed training and building plan that connects NZs provincial forests to lumber yards that create the wood and jobs needed to build these new State Houses. Create incentives for Farmers to move away from Dairy to replanting forests.
  • Renter rights that set rent increase limits and longer tenancy.
  • New affordable homes set at affordable prices available only for first time buyers.
  • Capital Gains Tax on all houses except the family home.
  • State Houses for life plus a new way for beneficiaries to access interest free loans to purchase those homes.
  • No foreign ownership of residential property.
  • Death duties on all residential property other than the family home.

The Opposition needs solutions not dog whistles or internecine fights.

Meanwhile, Donghua Liu manages to give us a glimpse of our property speculation future…

Fourteen tenants, one toilet: Donghua Liu’s ‘slum’ rental

Fourteen people share a single toilet in a “disgusting” rental property in Auckland owned by one of Donghua Liu’s companies, according to a former occupant.

The Newmarket address is one of several run-down houses the controversial businessman says he plans to demolish in order to build 500 apartments.

6 COMMENTS

  1. Yes, Labour are onto something, they just need to get it raised and hammered more smartly, and consistently and boldly.

    Stuff the MSM for their pretended PC and preaching.

    We are facing a perfect storm for the ecomomy, and a selling out not only of much residential real estate, also our values, so who else in the useless MSM is reporting on that over-crowded “slum house” of Donghua Liu in Newmarket, or is that too politically incorrect to report on?

    I know there are many more such “homes”, where people live in cramped conditions.

    This will be the future of much of NZ city living, unless people take some overdue damned necessary action.

  2. Interesting post. Can’t say I agree with every single one of the solutions you list but I couldn’t agree more that this is a debate we need and that most of the features you list will have to be part of the solution.

    There are a couple of fishhooks. Mass construction of State houses in single areas created large ghetto wastelands of unempowered residents, while the concept of a rental house for life without enough personal stake in it’s upkeep and improvement such as you tend to find with owned houses, has its own problems. It also doesn’t adequately deal with changed circumstances. (Did you know Jimmy Saville had a council flat for decades after his career took off).

    Your idea of managed purchase looks like the best way to solve these problems but the idea probably need more work to make viable enough to be universally applicable.

    The point is, you don’t find solutions if you don’t look for them.

    What you need is a government committed to effective intervention, rather than one whose first instinct is to excuse inaction.

  3. Agreed, we are seeing a carefully constructed plan by Government and Chinese speculators ganging up against the Auckland property market just like I saw in Nairobi, Vancouver, Toronto, and other centres.

    They all came a thud eventually when the heat left the market, so what are they repeating it for here when they know it ends badly for all.

    Since the Toronto Real-estate market collapsed in 1991 it has taken 23 years to recover so will this happen here.

    I also saw while in Texas in 1987 the Huston property market implode and die a horrible death, they were tearing high rise apartments and business buildings down when the market crashed.

    It was so bad that the glut of properties and high rise apartments and commercial business properties hastily built during the boom times had caused a glut of property that had actually accelerated to crash even further.

    Labour is on to a winner here, go Phil/Andrew go, save our future from this madness.

    “while The Standard rip themselves to pieces over Phil Twyford the reality is NZs free market lax regulation continues to lock many NZers out from buying a home because domestic and foreign speculators continue to take advantage of our inane rules.”

    Unlike Auckland so far, Huston’s Property taxes were becoming very high, Property tax rates in Houston more that doubled from 1984 to 2007 becoming one of the highest rates in the US. Depending on your area you can pay between 2-3% of your properties improved market value in annual State taxes, while the US National average is 1.04%.

    One would expect areas with higher property taxes to have structurally lower prices, reduced price volatility, and much lower price to income ratios.
    Perhaps a regional Property tax Phil could have the desired effect here.

  4. I like that picture of Pluto.

    It reminds me that Pluto is right amongst us, in the form of plutocrats and plutocracy.

    And we are about to invite in more of them.

    The country and its assets are on the block for sale, no doubt about it. Yet some are too busy arguing about whether the problem are certain types of people, or what they are doing.

    Grrrr.

  5. Shanghai Cooperation Organisation – Global Research. Really suggest you click on and read how Brasil, Russia, India, China and South Africa are challenging the “western-dominated World Bank and IMF”. When finalised, this new global economy will end the stranglehold of the Banking Cabal. This is intended to benefit people and eradicate poverty. Sound too good to be true? It’s been on the drawing board for years but covered up by the banking cabal.
    Countries are joining the BRICS by the day.

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