Opinion: As John Armstrong pointed out in Saturday’s NZ Herald, National has little vision or interest in addressing income disparity, the forever increasing cost of living, and poor growth for wage earners.
This election year it is all about the economy.
The challenge for independent media, is to sift through the spin and myth, to get down to the nitty gritty and analyse whether National has succeeded or failed to channel the benefits of its so called Rock Star Economy down to salary and wage earners.
Has National’s belief in the trickle down theory worked for home owners; has it worked for those who are preparing to become adults, who are at school, or want to go to university? Is New Zealand a place where (based on the merits of each individual) our young people can with effort reach their potential, irrespective of where they come from, their socio-economic standing, or that of their community or family?
Who still agrees with the National Party – which sticks to its 1990s vision of the trickle down theory? You know the doctrine where if a government pushes wealth into the hands of the very wealthy… then the spoils of that wealth will trickle down into opportunity, more jobs, better wages.
But isn’t that so 1990s? Wasn’t the trickle down vision an elusive dream? If the trickle down theory was never a solution, then why do 45.5% of potential voters still subscribe to National’s approach to economic governance? (see Roy Morgan’s latest poll)
If former ACT leader Rodney Hide is correct, and Kiwi voters do not want a reformist government, but rather a conservative one, a government that won’t change things, won’t readdress the frailties within New Zealand’s domestic economy, won’t represent the wants and needs of all New Zealanders… does this mean National has cracked it, has fathomed the values of the average Kiwi in 2014?
If so, then New Zealand First, Labour, the Greens, the Mana Movement might as well prepare themselves for another term of opposition politics.
But if the latest Roy Morgan Poll is correct, that 53.5% of people do not prefer National, that over three percent of voters turned off National in the past few weeks due to the scandals surrounding Judith Collins’ China trip, tuned out over the apparent culture of cronyism surrounding the party – highlighted by the Prime Minister’s game of golf with Oravida’s boss in exchange for $50k+ of cash for the National Party – then maybe, just maybe it is game on for this year’s general election.
If National Party voters are about to stop, have a look about them, and really test whether John Key’s trickle down theory is working, and if they are honest about what they see, then they will realise they are about to be used by this National-led Government in an economic battle they cannot win.
Here’s a reality check… home owners, and those aspiring to buy their first home, are now more disadvantaged than before.
Yes, National ran a reasonably tight, fiscally prudent, line through the Global Financial Crisis. But now, it appears National has run out of ideas – now when the country needs solutions and vision National subscribes to a ‘hands off government’ approach.
National now is more preoccupied with changing the NZ flag than working out a plan to make sure young Kiwi families get a fair shot at buying their first home, in the city where they grew up, in a place where they have decided to settle down and make a working life of it.
AN ECONOMIC IMBALANCE:
Right now, there’s an imbalance in the domestic economy. We know house prices are soaring out of control. We know a significant proportion of buyers are investors who do not live here, have little intention of coming here, let alone settling down in NZ.
We know first home Kiwi buyers have been pushed out of the market.
We know New Zealand needs a vision that addresses that problem.
Are the solutions xenophobic as National claims? No, that is a red herring. While National has been sitting on its hands, playing golf, and being satisfied with the way things are panning out for home owners, the opposition parties have been developing solutions to the problems confronting Kiwis, solutions even for people who voted National last time around.
INTEREST RATES:
Interest rates are now climbing, and this time it is not just a short term blip. Home interest rates are now on an upward hike. National says it’s good as it will cause the housing market to cool down, ease inflation.
But once again, the home owner is being set up to shoulder the burden of cooling down a market they have not heated.
The extra cash these people have saved, or put away in their back pockets, is about to be nicked through Government increasing their mortgage interest rates. It is ironic that the one-time National subscribes to an interventionist approach it is designed to take money off home owners rather than prevent those who are really causing an over-inflated housing market.
National’s approach is so 1990s, this simplistic approach to governing the economy is the same old tatty policy that it used back when Ruth Richardson was finance minister and Jim Bolger was the boss.
Back then, National took spare cash from mortgage holders by having the Reserve Bank hike up the Official Cash Rate (OCR) that in turn forces banks and lenders to increase their interest charges.
Yes the move was designed to stop mortgage holders from spending, from buying consumer goods. And yes, that in train took value out of the retail sector and cooled inflation down.
This time around though, National wants to thrash mortgage holders further, make them pay for the imbalance where foreign investors are encouraged to buy up Kiwi homes, put them out to rent, and flog more Kiwi families of their hard earned cash. It is this that is cooking the New Zealand housing market, it is the anomaly where no regulatory safeguards exist that would otherwise prevent offshore syndicates from out-bidding good Kiwi families on good Kiwi homes.
Surely National realises, as we do, that the economy is more complex now, more multilayered, and that the Kiwi home owner cannot be used as the primary tool to cool down a housing market that draws its heat from offshore investor demand!
We can tinker with the supply, increasing the housing and land stock available to purchasers, but unless Kiwis are given the protections necessary, this country’s peoples risk forever being pushed out of the way – prevented from ever achieving their home ownership dreams.
NATIONAL HAS A CHOICE:
National could move to protect kiwi families, give them a fair go. But as we have seen in recent weeks, National’s Cabinet Ministers are more interested in hob nobbling it with the most wealthy foreign owned businesses, and giving them all the perks of privilege-through-association.
In return, the National Party is given $52,000-plus after the Prime Minister was bought for a game of golf with the chair of Oravida – the company of which Judith Collins’ husband is a director. And so… the perception of cronyism and conflicts of interests endures…
Since when did the Prime Minister and Judith Collins hob nob it with kiwi families from the poorer parts of town? Oh that’s right, in 2008 when they were campaigning with all the vision that a government in waiting can promise.
THE BENEFICIARIES:
We know the Government has let too many big offshore companies in to provide essential health care, old age and continuing care, to manage the reconstruction of our schools, run our prisons… where tax payer money is turned into big debt to their offshore owners and is siphoned off overseas.
New Zealanders are not even getting a chance to consume nor spend that tax payer money, it is snapped up through the tax you all pay. A few dollars is flittered about to pay a few kiwis some minimal wages, then it is siphoned off to line the pockets of the wealthy shareholders in London, the Isle of Wight, Caymen Islands, New York, Zurich.
This is another problem that needs a political vision to ensure the reality favours the lot of Kiwis.
National’s rhetoric once underscored a principle of liberty, opportunity and prosperity for New Zealanders. That is why a lot of voters ticked National in 2008. But if these people really looked beyond the spin and the myth, could they still say National has a vision and that vision is to benefit them?
No. There is no liberty in a nation of salary and wage earners becoming the skivvies of the privileged classes, especially when the masters live offshore.
But this edition of the National Party appears seduced by their own Rock Star myth, and the arrogance of their contempt for the average Kiwi family is a consequence – not to mention the complete indifference to those who have been left out in the cold.
Was the Herald Digipol correct? or was the Roy Morgan poll on Friday more on the money?
Really, it is now almost too impossible to tell.
Why? Because spin and myth are powerful bedfellows.
“But once again, the home owner is being set up to shoulder the burden of cooling down a market they have not heated.”
House prices only rise because of a shortage in supply or an excess in demand. The only way home owners haven’t contributed to the housing increase is if the problem is with supply. Is this the problem?
No, the problem is on the demand end. Offshore syndicates/investors are outbidding Kiwis. We can not open up supply in this country at a pace that will satisfy offshore investment demand. So the solutions must connect to the cause. Gosman, I thought you understood economic concepts. Or are you simply being a troll?
Selwyn that is complete bs. I am a property investor and frequent auctions at least weekly. The ‘foreign’ buyers you speak of are almost always NZ residents or citizens. The fact that they look asian or whatever just shows your xenophobia. Besides, around 2/3rds of the auctions I attend result in white faces securing the property, so you really need to get out more often.
As I said, and anticipated, the xenophobia line is a red herring. Glad you continue to be as predictable as your track-record here suggests.
How large are foreign residents purchases of NZ residential property as a proportion of the total?
Gosman, I don’t jump to your tune. If you want that information, go get it yourself. I’m not here to wet-nurse you toward a state of knowledge.
The point is Selwyn that I suspect you don’t know how large a role these particular players in the residential property market are. You have jumped on the “It is all the fault of foreign buyers” bandwagon without doing any detailed analysis.
Even without knowing the size of the section of the market you wish the state to quash you should at least know if doing so makes much difference. Australia is a good example of that. How is their property market in the large urban centers?
You really are off your cornflakes Gosman.
I’ve already published information on this:
On March 13, the BNZ’s chief economist Tony Alexander wrote (ref.): … if buying of real estate by Chinese is your area of interest, here are some links to articles noting rising Chinese property buying with the third one (sub-ref.) noting that NZ is the fastest growing destination for buying according to the Juwai.com portal for selling property to Chinese buyers.
And Alexander on March 13 also stated this:
National Party policy is to leave foreign property buying rules for New Zealand unchanged (having passed legislation last year giving the Reserve Bank the power to impose minimum deposit rules which have shut out our first home buyers). The mix explicitly biases NZ house sales to foreigners. Labour Party policy is to adopt Australia’s rules of restricting foreign buying to newly built property only.
http://tonyalexander.co.nz/wp-content/uploads/2014/03/WO-13-March-2014.pdf
Try and keep up Mr.
Whoa there, sunshine!!!
Back that mule up, boy!
You’ve just derided Selwyn’s blogpost by stating you “suspect [Selwyn doesn’t] know how large a role these particular players in the residential property market are” – but you’ve posted no counter information to back up your opinion whatsoever!?
Where is your data to prove your point?
Where is your research?
What information do you present to counter Selwyn’s blogpost?
If Selwyn is wrong – prove it.
Saying you “suspect” is not the same as factually correct. Otherwise you’ve indulging in fantasy wishful thinking and not much else.
Show us what you got, boy!
Also… On March 13, the BNZ’s chief economist Tony Alexander wrote (ref.): … if buying of real estate by Chinese is your area of interest, here are some links to articles noting rising Chinese property buying with the third one (sub-ref.) noting that NZ is the fastest growing destination for buying according to the Juwai.com portal for selling property to Chinese buyers.
Again, I am not being xenophobic here, that is a red herring, I am highlighting the need for New Zealand’s National-led Government to prioritise a regulatory response so as to address a handicap that makes it difficult for young Kiwi families and hopeful first home buyers to out-bid investors and syndicates that are based overseas. The Kiwi dream of home ownership is becoming elusive for many. That needs addressing.
I should also add this, again Tony Alexander on March 13:
National Party policy is to leave foreign property buying rules for New Zealand unchanged (having passed legislation last year giving the Reserve Bank the power to impose minimum deposit rules which have shut out our first home buyers). The mix explicitly biases NZ house sales to foreigners. Labour Party policy is to adopt Australia’s rules of restricting foreign buying to newly built property only. Labour would also seek to build 10,000 state houses a year (probably unachievable), impose a capital gains tax, and negotiate (presumably with the RBNZ) an interim exemption to the LVR rules for first home buyers. (ref.)
For what it is worth, my view is the parties that make up the Legislature here have still got some way to go before a satisfactory policy response is in evidence.
A satisfactory policy response is to do NOTHING. There is no mass buy up of NZ based property by foreigners, unless you include a as residents born overseas as foreigners. The last 2 auctions I attended resulted in white, young NZ’ers buying properties off Chinese/NZ’ers. There, does that make you happier?
You attended two auctions?!
Wow!
I guess that makes you an expert at the housing market in this country.
Tony Alexander of the BNZ and Bernard Hickey of Interest.co.nz – you are both redundant. IV attended two auctions and is now more knowledgeable about the housing market in New Zealand.
*snort!*
Now you’ve moved from mis-using information; taking quotes out of context; and cherry-picking data to simply ignoring problems, IV. “Cute”, as our not-so-grinning Prime Minister said recently…
“You attended two auctions?!”
No, again you show your dishonesty. I said ‘the last two auctions I attended’.
The only economists I’ve seen cited here frankly I wouldn’t give any credence to at all. Hard data, yes.
Has Australia’s policy reduced the average property price of residential property in places like Sydney?
Go ask the Australians.
Wouldn’t you like to know if the policies you are advocating make a difference to the property market?
Again, get off your lazy backside and dig out the info you ponder. You may think you subscribe to some privilege class and are accustomed to ordering others around to do your work for you, but don’t expect me to fall into your silly game.
You trolls are a total waste of data. Who pays you? The Prime Minister’s Fund? Oh wait… is this you Jason Ede?
Actually…
Gosman – posing inane question is a lazy way to make whatever point you’re attempting to make.
Say what’s on your mind or fuck off.
I disagree. It is the basis of the Socratic method. The problem is people don’t like their own views subject to intense questioning (As Socrates himself discovered to his cost).
If you put up some data and an alternative solution, I might take you more seriously. But then, that’s not why you come here is it…
How’s this for you?
http://theconversation.com/aussie-rules-for-overseas-buyers-wont-solve-londons-housing-bubble-22745
Gosman – That is why I would propose going even further, to stop residential property purchases by new migrants for a set period of a few years, allowing them to rent olny, and to levy new migrants to pay into a fund for social housing for another set period of years.
Since New Zealand is so popular with many in a fair few countries, and since it is wanted to get skilled and financially sound migrants to come here, let them pay towards the additional costs to build new housing.
The issues Australia may face is that they have not curtailed migration that much, so that naturally will increase demand. Also it must somehow be stopped that migrants or overseas buyers can pay into trusts to “invest” in residential housing here.
Yes, some further thoughts and refinement of tools is required, but at least Labour and Greens and NZ First are heading in the right direction, while National wants to leave it all off hands, and fill the landscape with more quarter acre section settlements, and fill the country with migrants – possibly up to 50 million or more, all for the sake of “growth” of which only a small section will benefit, who like John Key will move overseas anyway, once their “job” has been done, and this place is sold off and overcrowded.
Hmmm, it appears that the same problems are occurring in Britain, namely;
?!?!
The article goes on, and whilst it derides the Australian solutions – does not actually address why the Aussie solutions supposedly “do not work”;
In Australia, foreign buyers must build new homes – not buy established ones.
As the article states,
The article appears wedded to an ideological anti-tax stance rather than any non-partisan analysis.
As such, it fails to support your position (whatever that might be.)
Or this one
http://www.smh.com.au/federal-politics/political-news/foreign-investment-review-board-says-impact-of-chinese-property-investment-overblown-20140317-34y5n.html
?!
That article appears to contradict the earlier one, in your March 24, 2014 at 4:05 pm post.
To whit;
http://theconversation.com/aussie-rules-for-overseas-buyers-wont-solve-londons-housing-bubble-22745#sthash.GtHa2N2W.dpuf
Whilst in your March 24, 2014 at 4:07 pm post;
http://www.smh.com.au/federal-politics/political-news/foreign-investment-review-board-says-impact-of-chinese-property-investment-overblown-20140317-34y5n.html
So, which is it?!
You’re not getting your story straight here, bucko.
Here’s some data around what the Australian housing market is doing at the moment.
http://www.bloomberg.com/news/2014-01-22/australians-in-record-loan-spree-as-house-prices-soar-mortgages.html
Ok. Now you’re really muddying the waters.
The article “Foreign Investment Review Board says impact of Chinese property investment overblown” states;
http://www.smh.com.au/federal-politics/political-news/foreign-investment-review-board-says-impact-of-chinese-property-investment-overblown-20140317-34y5n.html
But your next linked article, ” Australians in Record Loan Spree as House Prices Soar: Mortgages”, at March 24, 2014 at 4:21 pm, states,
http://www.bloomberg.com/news/2014-01-22/australians-in-record-loan-spree-as-house-prices-soar-mortgages.html#sthash.lyqpqKRU.dpuf
So, which is it?!
You’re not very good at this, are you?
Oh well, At least you’re trying by presenting data for us to look at. So “B+” for effort, even though the results are, shall we say, “mixed”.
Can do Better.
I think you missed the point. The point is restricting home ownership in Australia has not slowed the rise in the average price for them. The articles all point to the conclusion that house price increases will not be slowed by the sorts of policies advocated by Mr Manning.
Haha. You really do rate yourself, don’t you Gooseman? As a philosopher, you don’t even make a good soccer player:
http://en.wikipedia.org/wiki/S%C3%B3crates
Socrates was a teacher. You’re definitely not. But what I have learned from your posts is that you’ve nothing to say.
IntrinsicValue you’ve just accused the journalist who campaigned for the release of suspected “terrorist” Ahmed Zaoui of xenophobia. Perhpas a different line in character assassination might be in order.
“INTRINSIC (QUESTIONABLE) VALUE”: Hah, it was Tony Alexander, the bank economist the other, day, and some other expert of the property business, who clearly stated on Radio Live the other day, that there are clear cases of some overseas buyers working through networks, using established New Zealand permanent residents to “invest” in residential real estate.
Yes, I have heard this before, and it is happening, there are people from some offshore destinations, who are relatives or other “associates” of migrants that live here permanently, at least “for time being”, who have the funds, to make them available to the resident “mates”, and thus buy more properties. This can all be done very conveniently through trusts and so, and it will be difficult to see where the money may have come from.
That is all quite legal, and given the low interest rates in places like Mainland China, there would be lots of money available to buy property that way here. You will see the “locals” at the auction, but who is behind them? I am sure you know all the ins and outs, and know all these buyers personally, with your great network abilities, and endless “insight” in every topic matter discussed here, yeah right?
More fairy tales. Provide some actual evidence and your claims might be taken more seriously.
If my comments, based on anecdotal and apparently other evidence by economists and real estate experts, are “fairy tales”, they must certainly be better “fairy tales” (based on true stories) than the “fairy tales” you keep presenting here!
Also do I know that there have been a fair few Mainland Chinese migrant bending rules and more, when getting permanent residence, using funds that were presented for “investment” and so forth, and once getting PR soon closing shops, and changing activities, and funds being re-used by others (relatives and mates), to gain residence the same way. Although I am not sure that this is still somewhat common, that at least was possible and done in a fair few cases a few years back (according to first hand info).
Plus there have been issues with documents, be they business related, qualifications related and of other types, as some “experts” have historically managed to assist in migration matters, not always using tidy ways to get PR.
Where’s the evidence?
I can provide an equal weight of anecdotes to counter yours, so present real, hard evidence.
Hah!
Sez the man who basis his economic opinions (denying foreign speculator involvement in pushing up house prices) on attending two auctions!!!
Outstanding, IV. You really are The Daily Blog’s class clown!
*shakes head*
Frank if you need to stoop to misquoting me, you’ve clearly nothing of substance to add to this debate.
As per usual, IV, your bullshit is unsupported by facts. Even bank economists are reporting that the number of overseas buyers entering our domestic house-buying market is distorting said market.
The question that springs to mind reading your usual Nat/ACT crap is; how can you tell if “the ‘foreign’ buyers you speak of are almost always NZ residents or citizens”?!
Are you attending every fucking auction in this country?!
You are becoming more ridiculous with each passing day.
I look forward to you paying your fair share of taxes, rather than bludging of the economy…
I am a property investor…
Colour me unsurprised – investor translates as speculator.
I suppose you earn a point for avoiding the usual bullshit term coined, that of property ‘developer’
So, just a plain old speculator, eh.
Everyone speculates. Property Investors are speculating that values will go up, and/or that rents will cover their mortgage interest. Business owners employ people because they speculate that people will want to buy their products. Owners of ECE centres speculate that if they spend hundred’s of thousands of dollars building a centre families will take their children there. It’s called the market. It employs people, contributes to Govt. income, enables a country to earn foreign exchange. It’s a beautiful thing. When free from the hands of meddlers.
I pay every cent Frank. I pay tax on the rent I earn from my rental properties, and tax On the profit I make on properties I develop. I have no problem paying my fair share.
No you’re not, IV. When you pay capital gains tax on your properties (when sold), then you’ll be paying your fair share.
Until then you are bludging of the economy.
If I set out to make money on the property as a opposed to being a landlord then yes I pay tax on the capital gain. Do you have even the slightest understanding of how our tax system works?
It’s logical that when people collect houses there will be less for others to buy and that contributes and equals a shortage.
I have heard this tired argument that there is a shortage, sounds good, sounds justifiable, I think Nick Smith uses this excuse which should be enough to convince most people its bullshit but if you scratch the surface investors greed soaks up surplus housing. I recall one investor stating with the LVR rules coming into force that it “takes the muppets out of the market” referring those filthy dirty first home buyers. I mean to say how dare they buy homes for themselves to live in!
In reality if individuals didn’t go buying more houses than they need to live in there would be a hell of a lot more on the market. So as it is there is a shortage for greedy investors to buy I guess.
And do you conduct in-depth and indisputable citizenry checks on all buyers and their agents at auctions including the ones who don’t win?
If you understood economic concepts, Mr Manning, you would realise that an investor is merely taking advantage of what he sees as a good deal. If we can’t compete with that as a home buyer, maybe we need to take a look at our individual financial ideals. Locking the rest of the world out of a market is no way to address our inability to compete. Capital gains tax might be a good idea to scratch a political envy itch, but could have a devastating effect on family farms, small business sales for retirement and middle class tax burden. Closed markets, subsidies, tariffs and state control are what got us into trouble in the first place in the 1950’s to the 1980’s.
WTF?!?! Mike, you’re not offering any solutions – just more of the Neoliberal Same BS.
For you, this is a matter of an “investor … merely taking advantage of what he sees as a good deal”.
Well ain’t that simply spiffing for you, sunshine?
While you’re indulging in a bit of free market self-abuse and getting off on “financial ideals”, other New Zealanders are struggling to buy their first home.
Home ownership is now at it’s lowest in decades. Your fucking precious “market” hasn’t delivered. In fact, quite the contrary;
You egg! We had higher home ownership in this country before markets were opened; subsidies were eliminated (except for Warner Bros and Rio Tinto); and state control has long-gone; etc.
And since all those neo-liberal “reforms” – home ownership has plummetted!!
So you’re making a statement which is in direct opposition to our current reality!! It’s Orwellian double-think at it’s finest.
Fuck me, you neo-liberals perception of reality is as warped as a North Korean Party ideologue.
I’m surprised you know what day it is. (No cheating – look away from the calendar!)
Ha Ha nice one Frank
Now now Mr Macskasy, don’t have a cow, man!
For your information, we struggled to buy our first home too. We struggled to raise a family, we struggled to pay for the education of our children, we struggled to buy into the start of our business. We struggled to buy and run our car. In short, we struggled. Everybody struggles to buy their first home. Yes, it is more of a struggle than it has ever been due to under supply, cheap money and the like, but New Zealand is still THE best country in the world to start and profit out of a business. Everything is cyclical and now is obviously the time to rent and save. When we brought in to our business, timing could not have been worse as interest rates were at 20.8%. Houses were cheap, but you could pay for the house again in 6 years on a 20 year table mortgage.
All markets are cyclical and if New Zealand could release land and build to alleviate demand, home ownership percentages would once again rise. Just make sure that if prices of existing housing stock fall as a result of vastly increased supply and existing home owners see their equity fade and turn to negative, you are not the one who complains the loudest about what would for you be a self fulfilling prophecy.
I can’t.
The Nats sold it off to foreign “investors”.
Then Home owners are part of the problem. It is just a certain kind of home owner that you have an issue with. BTW do you have an example of nations with restrictive residential property markets slowing their property market down? There must be countries that do this already.
Gosman, as mentioned above… I don’t jump to your tune. If you want that information, go get it yourself. I’m not here to wet-nurse you toward a state of knowledge.
The “certain kind of home owner” who wants a roof over their heads?!
How dare they!
Was listening to Duncan Garner’s show on Radio Live the other day and he was talking to the head sharang at Barfoot and Thompsons and when asked for a breakdown of where Auckland houses were being sold to, it went a bit like this (percentages may not be exactly right but they will be within a point or two) European 47% Asian 43% the rest to Indians etc.
I yelled at the radio for Duncan to question the 43% Asian. Isn’t Auckland about 20% Asian and doesn’t that INCLUDE people from the Indian cub-continent.
Now that demonstrates one of two things (or maybe even both).
Firstly, the number of foreign investors is way, way above what has been admitted to, or, if not, that we need to put a hell of lot more belts and braces around the housing market to skew the whole thing back in the favour of the owner occupier.
I didn’t think the left was trying to woo National voters anyway. I thought the strategy was to win by attracting the 800,000 non-voters who are all obviously left leaning and just need to see even more left wing policies to jump at the chance to vote Labour.
When Kiwis are being exploited, surely it is right to highlight that fact. What’s a left-right containment argument, pushed by a right-wing troll got to do with it.
The current meme being pushed by left wing blogs and activists (as exemplified by the site) is that the key to winning the next election is to appeal to the 800,000 non voters who are obviously (at least in the left’s mind) left wing and are not impressed by the current offerings from left wing parties in NZ and just need MORE left leaning policies to attract them to vote. Yet here you are trying to appeal to National voters as if they just need to realize they are left wingers at heart. This seems both naïve and foolish from a political point of view. You can’t appeal to both the Center and the Left by adopting more left wing policies. It is wither one or the other.
It’s interesting how you find difficulty in thinking outside the box, or how to fathom the state of play when your stereotype and/or simplistic political analysis is shown to be out of step with current events.
How’s this to challenge your indoctrination… Pragmatism is no longer the bastion of the Center-Right. And just to rub salt in your wound, the left-right economic axis is two-dimensional, try thinking in multiple axis, liberal-totalitarian-authoritarian, conservative-progressive, pragmatic-ideological… Basically Gosman, if you strip down your bias you would realise that there’s a politics that exists where when there is something fundamentally wrong, it should be fixed.
Just because the party you prefer is loathed to fix such things, preferring a hands-off approach, doesn’t mean a solution does not exist. Peel off your sycophancy and wear an independent thinker’s cloak.
Is that some sort of magical ‘Third way’ of thinking? Wasn’t that the whole Bill Clinton and Tony Blair schtick?
I agree that Politics is multidimensional. You have Social and Economic elements to it as you point out. However at an economic level it is pretty straight forward. You are either for a more activist role for the State or you are against it.
That activist role for the state may only include “empowering” workers and/or disadvantaged communities but it is still a greater role. There is no new paradigm waiting to be discovered despite the hopes of the left.
I’ll say this simple, so your blinkered mind can understand: It is all about fixing a problem that exists. Get over it.
Forget third way, your straw man argument just self-combusted.
Essentially you are paraphrasing Deng Xiaoping famous maxim “It doesn’t matter if the cat is black or white so long as it catches the mice”. That is kind of ironic as it basically meant the Chinese abandoned communism for capitalism whereas you are attempting to use it to suggest left leaning policies could be more beneficial to right leaning people.
Bingo.
But again, you think in stereotypes. Just because a family has a mortgage, or a person seeks to purchase their first home, does not make them ‘right leaning’. To the contrary, these people are being left out in the cold by your favourite party. These people need representation, and if parties in opposition put up solutions, then good for them.
They are not being left out in the cold.
The problem has been acknowledged on both sides of the political spectrum. That problem is housing affordability.
The solution to the problem from the left’s point of view is a massive investment in house building by the State and placing restrictions on foreign ownership of residential property by foreign buyers. This is all very typically left wing policy prescriptions. Attempt to force the market to do what you want it to do by intervening to increase supply and decrease demand by direct action by the central authority.
The right’s answer is to attempt to stimulate supply by removing various restrictions on the market supplying more houses and restricting demand via heavier demands on first home buyers so they don’t get in to too much debt.
Both those sets of policies have as their end goal more affordable housing.
Gosman, don’t you feel like this is a pathetic way to live your life?
Spending your time trying to annoy people is normally something emotionally neglected children do – and I know you’re trying to give them impression you’ve got a good argument but over a long period of time your behavior shows that you’re not here to have a constructive debate and that you have no useful vision to speak of. You’re clearly motivated by spite and I honestly wish you would just go away.
And please don’t waste our time coming up with little examples that might prove me wrong, your behavior is speaking louder than your words do.
Gosman,
Don’t you find it rather strange that your government has signed off on a policy (the RBNZ’s 20% LVR policy) that interferes with the marketplace and has made it harder for people to buy their own home?
I wonder… what might be your reaction had Michael Cullen signed off on such a RBNZ policy?
Is this your “free” market at work?
By the way, this is a little something from a speech John Key gave on 29 January 2008, when he was in Opposition;
Source: http://johnkey.co.nz/archives/306-SPEECH-2008-A-Fresh-Start-for-New-Zealand.html
Note the point; Why can’t our hardworking kids afford to buy their own house?
Got any answers?
Do you know what was the ultimate cause of the GFC Frank? The answer to that question is also the answer to why the RB has implemented their LVR changes.
If it weren’t for an “activist state”, you would not be posting this on the internet. There would most likely be no internet.
The State paid for the telecommmunications network you take for granted.
If it weren’t for an “activist state”, you would be unable to read or write. The State paid for your education. (Which some might say was not very successful in your case.)
If it weren’t for an “activist state”, armed bandits would have taken your property at knife-point; beaten you to a pulp for a spot of exercise; and had their wicked way with your pet sheep.
If it weren’t for an “activist state”, you would be living in an idyllic Libertarian Nirvana… like Somalia.
For you, it’s a “paradigm”. For the rest of us, it is an orderly, civilised, society.
Because really, Gosman, when you think about it, no modern society has ever been built by other than people working collaboratively – ie, a State.
Noone here is arguing for a state without any for of government intervention. That is just a strawman argument you have created to make your opponents easier for you to argue against.
I have no problem with people working collaboratively. Indeed one of the drivers of the modern world, the joint stock company, is based on that whole principle of collaboration. I also think Labour Union’s have much to offer.
Where we differ is when government uses it power and potential coercive force to actively involve itself in commercial matters. You may think this has only an upside. I think it has more downsides.
The strategy is to win by attracting votes from everywhere, Gosman. Do you thing opposition Parties would say “no thank you” to National-Labour swing voters?!
Heck, we’d even encourage you to vote Labour, Green, or Mana. Gowan, it’ll be good for your soul… 😉
It is pretty easy to come across as ‘running a tight ship fiscally’, because it is only the numbers and not the consequences of those numbers that are reported. All National have done is take away a lot of money from wealth and wellbeing producing causes, while putting lesser amounts into their wealthy backers wallets, they then report the numbers, omitting the debt that has been accumulated and despite the numbers not balancing they ‘seem’ good to someone skim reading the poorly formulated articles that come straight out of National press releases with little analysis and repeated throughout the mainstream ‘news’ sources- ‘seem’ is all it is though.
Taking money away from community education where people who have been failed by the education system are learning to read. Stopping those 40+ year olds who require retraining from doing so. Giving contracts out to overseas businesses while there are NZ businesses that can do the work. Selling revenue-generating assets in a recession when the prices of those assets are as low as they ever will be and stopping investing 10 billion dollars in the superannuation fund when the cost of borrowing is 3.2% and the returns off that investment have been 27%, (Scroll down to Mallard’s speech )whilst taking out debt to make up for their poorly balanced tax cuts are some of the many examples that lead me to conclude that any perception that National manages this country in a ‘fiscally sound way’ is simply a false perception – it is all smoke and mirrors.
You contradict yourself here: “The extra cash these people have saved, or put away in their back pockets, is about to be nicked through Government increasing their mortgage interest rates.”
Higher interest rates would INCREASE returns on savings. In fact your entire piece on housing makes preciously little sense. First you lament high house prices, but then you criticise the very policy (i.e. higher interest rates) that would put a stop to that and quite possibly DECREASE house prices, and simultaneously encourage saving (through higher interest returns) making it QUICKER to save for the purchase your first home with lower total LEVERAGE (due to a higher deposit).
“Higher interest rates would INCREASE returns on savings.”
You would be right only if a Kiwi family had more deposited into equitable high interest earning investments than its mortgage liability. Otherwise you are seeing a drain. And let’s face it, what Kiwi families are able to do that? You know and I know more and more people are finding their meagre savings having to be used to sustain their household consumption due to their disposable income falling short. I underscore how a lift in consumer spending over the last quarter was elevated due to an increased reliance on credit.
As far as the rest of your ‘scenario’ driving argument… it is ridiculous and doesn’t require a response.
Am I right in thinking that you want low interest rates AND affordable house prices AND an increase in the return on savings? If so, do you seriously not understand the contradiction? What am I missing, exactly? Higher interest rates are the best thing that can happen for first home buyers who are CURRENTLY saving for their first home. For those that bought at the top, sure it’s going to suck, but seriously current house prices are NOT normal! A house SHOULD be somewhere to shelter from the elements, not an “investment” (a house, like a car, is a consumer durable good). Persistently low interest rates have massively distorted the market, and that’s a fact. Please, go and do some research on household income vs home prices, and you’ll see how far from the mean we have deviated.
You would be more correct in thinking that the playing field for first home buyers is far less level than it was a year ago:
In March last year our respondents estimated that 24% of their sales were to first home buyers and in May they estimated 23%. The result in December, following introduction of minimum deposit rules, was 15%. This improved to 16% in February and this month has recovered to 17%. (ref. BNZ-REINZ March 2014 Residential Market Survey – see here.)
It’s all very well picking at the details in the article but the fact remains it’s a lot harder to buy a house for the current generation than it was for the previous one. To argue with Selwyn you’ll have to come up with an alternative explanation for what has happened – but given that this change coincided with the rise of neoliberal policies in NZ it’s pretty logical where we should look for that explanation.
That fact that we have a PM who has spent most of his adult life as a parasite sucking the juice out of the world economic system would lead me to expect him to continue the neoliberal approach – as has clearly happened, although with him it’s a matter of practicality rather than ideology.
Selwyn has it sussed.
A young couple I know in Dunedin are currently jumping through hoops to get their deposit together and a mortgage for their first home.
And that’s Dunedin, FFS!
God knows what it must be like in Auckland and Wellington for young couples.
I haven’t seen house-buying conditions like this since 1978, when I bought my first home. Those were under Muldoon’s economic administration, where bank finance was hard to come by and Vendor’s finance (as a second mortgage) was de rigueur.
This is where the RBNZ LVR policy – signed off by Bill English – has brought us; full circle back to Muldoonism.
Oh one couple Frank! My goodness, call the police! Frank knows one couple who are struggling to buy a house! Well I’ll up your one and add one of my own who aren’t struggling, who have moved to Invercargill, the father has a job as a builder and they have bought a beautiful home near the park. There are, anecdotes 1 all.
Chill, IV. You’ll burst a blood vessel.
Of course it’s now much harder for young people to buy their own home.
You can deny it till you turn Tory Blue in the face, but that doesn’t change reality; National has fucked up the economy and mismanaged the housing situation in NZ to such a degree that home ownership is lower than when they took office.
Suck on that, you right wing arse. Your ideology is failing the very market that you claim to support.
The LVR changes have been implemented to avoid a potential GFC situation. Do you think we should try and avoid that Frank?
That is a pathetic attempt at deflection, Gosman.
By signing off on the RBNZ’s 20% LVR plan, National has signalled a total failure in this matter.
National has intervened in the housing martket because demand has outstripped supply, and the Nats/ACT have no clue how to address this crisis.
So instead of increasing supply, Bill English has acted to stifle demand!
That’s how National “manages” the economy – by making it harder for New Zealanders to buy their own home whilst foreigners and parasites like IV buy up properties for tax free gains.
You might think that’s fair – but then you (and IV) are right wing ideologues who doesn’t give a jot about other people.
The sooner a Capital Gains Tax is implemented, the better.
And I would implement it at the company rate, not at the GST rate.
Why? So that then you right wing parasites can have something specific to squeal about.
That would make my day.
I don’t know why you think I would squeal. I have stated in the past I have nothing against a Capital Gains Tax in principle. It may well make sense to broaden the tax base. However it is unlikely to cool the property market. It doesn’t in places that do have a CGT.
Great article.
Very astute observation of the terrible dilemma that Key and National has got New Zealand into;(oh that’s right,it’s N.Z.inc now).-vomit.
I talk to a lot of young people and they are totally disillusioned at the prospect of them ever being able to afford to buy a home of any shape or form.Either they are resigned to stay living at home with their parents forever.(Not healthy for either parties);or paying exorbitant rents thus rendering them unable to save for a house.They are snookered.If they can’t provide a nest to bring up a family then we as a society are on a slippery downhill slope.They tell me whoever sets policy in place to turn this around will get their vote.Simple as that.
I think in years to come this government will be labelled ‘the swindlers’.
I guess the other option for the young is to all become money traders.There,that should do it!
Now National talk of New Zealand as NZ Inc as the country is now a large corporation. This is what National have achieved the rich get richer and the poor get poorer, there is no trickle down, wages have not increased, all this crap from Bill English that workers should expect pay rises now the economy is a “Rockstar” is exactly that “crap”. People are not getting wage increases. No we are not Nz Inc, we are a country with real people many whom are struggling, and National have done nothing in the last six years to improve that situation. Good article Selwyn
Great stuff Selwyn!
But “Yes, National ran a reasonably tight, fiscally prudent, line through the Global Financial Crisis.” No… National ran austerity policies in the midst of a recession. Ideological, stupid, and irresponsible.
Point respectfully acknowledged. Cheers Stuart.
That’s complete bs as well. National have borrowed billions of dollars to maintain a safety net for the most vulnerable during the GFC, including WFF. True austerity would have seen benefits cut, WFF curtailed, and spending on health and education cut, none of which has happened.
National have borrowed because the stupid tax cuts at the top meant they didn’t have the funds required to keep the social contract running at a minimal level. They then cut the social programs back, bit by bit, the important thing being that their rich supporters didn’t have to wait for their payback. “True” austerity would see everyone without the money to donate $50k to a charity for a game of golf with Key, not just those who are poor already. True austerity would see the South Canterbury dairy farmers paying for their own irrigation. True austerity would see oil companies missing out on millions in bribes to dig unproductive holes. True austerity would see the end of ticket clipping by idiots who are related to the local NAct MP.
What you’re talking about is just theft from the already poor. By any standards, it is obscene.
Not forgetting the hundreds of millions of dollars spent on consultants. Over $200 million spent on consultants for roading, over $200 million spent on consultants for the IRD.
Well said OVICULA, one big arse unaffordable election bribe (and they knew it) being topped up on a weekly basis by borrowing shit loads of money and doing their damndest to keep it under wraps.
And National have a reputation for knowing what they are doing with our economy. Whatever!
Anyone with half a brain knows this to be correct.
Except that’s complete drivel, IV. More of your Tory kiss-arse spin.
Fact is, the Nats had to borrow to make up for the billions lost in tax cuts in 2009 and 2010.
How convenient you left out that little item eh? Christ, you don’t even know (without Googling) how much those tax cuts cost the country, do you?!
No. Of course not. You might start to realise that you pro-Nat/ACT ideology is built on a house of cards.
The tax cuts were a necessary stimulus after Labour left the country in recession Frank. Remember the recession? You know, the one we were going in to before the GFC?
Nah. You’re just repeating the same old BS. There was no recession before the GFC. It’s just more of your right wing drivel.
You ACT supporters are renowned for making shit up.
“There was no recession before the GFC.”
The country was tanking from early 206 Frank. I’ve posted this many times before, and your continued denial is either dishonesty of delusion.
http://www.tradingeconomics.com/new-zealand/gdp-growth (change the start date to pre 2006)
It’s there for everyone to see, Frank.
One negative quarter doesn’t constitute a recession Intrinsicdick. You should know that. As per usual you’re spinning your crappy lies again.
Theodore is spot on.
As usual, IV, you’re being a dishonest little tosser and up to your old tricks in spreading mis-information.
However, this is no longer in the realm of “spin” – your assertion that there was a “recession” in 2006 is an outright lie.
I’ve presented the info previous. You ignore it and keep re-posting your blatant lie.
As Theodore outlined, a single negative quarter does not constitute a recession.
There was one quarter in 2006 that dipped to -0.3%.
As usual, you dishonest little Tory twat, you left out the New Zealand GDP Growth Rates in the previous Quarter (0.4%) and succeeding Quarter (1.4%).
As Treasury defines a Recession;
Source
Got that?
To really show you up as intrinsically pathetic, Treasury reported that the real Recession began in 2008:
IBID
Got that?
But just to drive the point home, as Treasury also reported;
“Recent Economic Performance and Outlook”
– http://www.treasury.govt.nz/economy/overview/2012/09.htm
So, let me repeat, IV, because I love this bit;
Got that?
You have no evidence that Labour was a poor economic manager. Unlike National, which has an appalling track record; high unemployment; crippling sovereign debt ($60 billion plus); slow growth; housing crisis; low wages; etc, etc.
Any growth we are experiencing is predicated on offshore demand; the Christchurch re-build; and the Auckland housing bubble.
Pretty pathetic, eh?
All of which makes Labour look damn good and National like a bunch of amateurs. So you make up shit.
Resorting to lies? National is a failure. You are a failure. Your ideology is also a failure.
Keep posting your lies.
I’ll keep correcting them.
How much net tax revenue was lost from the tax cuts in 2009 (A Labour planned cut as you have been advised) and 2010? Please realize net tax is the total tax revenue lost by the Government during this period due to tax changes (tax rate decrease and increase).
Gosman, don’t you feel like this is a pathetic way to live your life?
Spending your time trying to annoy people is normally something emotionally neglected children do – and I know you’re trying to give them impression you’ve got a good argument but over a long period of time your behavior shows that you’re not here to have a constructive debate and that you have no useful vision to speak of. You’re clearly motivated by spite and I honestly wish you would just go away.
And please don’t waste our time coming up with little examples that might prove me wrong, your behavior is speaking louder than your words do.
IV – National gave tax cuts benefiting the higher earners, while the substantial 25 per cent increase in the GST rate saw to it, that the bulk of the population, being poor and much of the middle class actually ended up gaining little, or nothing out of the tax cuts. Austerity can have many faces, and while there were no direct benefit cuts to rates of benefits, we have under National seen the introduction of Future Focus and more draconian welfare reforms last year, which makes it harder for many to have any entitlement to welfare payments.
Also do I believe there was some “re-adjustment” in the WFF tax credits, leaving some a bit worse off.
So the top earners and the asset rich did rather well during the GFC and “tidying up” period, while the common folks had to forgo entitlements, pay more tax and also some higher levies, certainly also more for housing (incl. rents) and some utility costs.
Of course, that is not “austerity” the Greek way, but it is a shifting of burdens and benefits, which have made many at the bottom end up worse off, thus suffering from some kind of “sophisticated austerity” the smart NatACT gang in government designed.
And to balance the ledger to cover also some Christchurch rebuild and other costs (unemployment), the rest was borrowed, to be repaid by ALL, which will of course again affect the low and middle income groups again.
P.S.: Health spending has actually not kept up with population growth on a per capita basis, as Annette King has previously pointed out in a fair few questions to Tony Ryall in the House. Hence it has in some ways “decreased” per person.
“National gave tax cuts benefiting the higher earners, ”
Of course tax cuts benefitted higher earners, but they also benefitted low and middle income earners! The same range of changes also hit owners of investment properties and other supposed ‘wealthy’ with a number of other changes.
The tax cuts are a significant part of why this country is coming out of recession earlier and stronger than many of our trading partners.
“Gains” for low earners from lower income tax have largely been wiped out by higher GST paid on goods and services used. Add to that increased housing and utility costs for mosts, and where was the bloody gain?
By the way, there is to my information no GST on house sale prices and rents. Those buying and selling real estate, for speculation or else, same as collecting rent, do not pay GST, and they are mostly the better off.
“Of course tax cuts benefitted higher earners, but they also benefitted low and middle income earners!”
Nah that’s bulldust.
Only you’re thick enough to believe that Intrinsicmoron.
The tax cuts for low and middle income earners was gobbled up by GST and ACC rises, increases in government user pays, and now increased mortgage rates.
You are on some serious Legal Highs, IV.
The tax cuts for low and middle income earners were a sham. Increases in indirect taxation have swallowed up any such tax cuts.
So that’s bullshit #1.
As for claiming that “The tax cuts are a significant part of why this country is coming out of recession earlier and stronger than many of our trading partners” – that is about as laughable as anything you’ve written.
Bullshit #2.
We’re coming out of our recession based on;
1. the Christchurch re-build
2. the Auckland housing boom/bubble
3. a demand for our dairy products
Are you really so fucking stupid as to believe the rubbish you’re spouting?!
You really are quite ignorant, aren’t you?
No wonder ACT has core supporters. Their willful self-delusion is quasi-religious in nature.
A prudent response to a recession generally entails stimulus spending. Borrowing for tax cuts is probably the least effective possible measure – and to put it into perspective, these cuts were designed before the crisis, they were not a response to it.
Failing to respond to a major international crisis is not the mark of a prudent or competent government, however much they may pay their blog trollers.
“Borrowing for tax cuts is probably the least effective possible measure ”
That’s nonsense. Putting disposable income in the hands of individuals increases both savings and spending.
Except, IV, it didn’t work.
“Putting disposable income” went into the wrong hands.
God, you really labour under some serious self-delusions, don’t you?
“There is no liberty in a nation of salary and wage earners becoming the skivvies of the privileged classes, especially when the masters live offshore.”
Correct. Which is why I’m proud this is not happening in NZ. We are a nation of small businesses, where anyone with an entrepreneurial spirit and a good work ethic can make a living. There is virtually no ‘priviledged class’ in NZ, just people who have worked damn hard to get ahead, and employed a hell of a lot of people along the way.
Wonderful IV… all is perfect in NZ. Thanks for reassuring us all.
Oh all is not ‘perfect’, but we’re doing pretty damn well. I’d like to see less Govt spending (there’s a whole bunch of Govt Departments that could go tomorrow with no great loss), but you can’t have everything.
Statement issued by the Neoliberal Politburo?
IV – Yeah, a nation of small business operators, yes indeed, and many are up to their eyeballs in debt to the mostly Australian owned banks, going to pay some of the highest interest rates in the whole OECD, thus working their butts off and slaving to pay back the banksters and their shareholders, who sit on their yachts off the Bahamas, Bermuda, and where else the sun shines endlessly in gentle breezes over sandy beaches.
Even many farmers are up to their collars in debt, and that is, because so many want to convert to dairy, which means that land suitable for that has become so high in demand, hence prices are reaching sky high. That is why there is increasing buying from offshore, as local farmers cannot get the money to go farming, unless they may inherit land.
It never ceases to amaze me, as with how much Kiwis put up with, under the lashes of the whipping masters that control finance and most of the economy.
Some reality shock may be needed, to wake more up out of their slumber. But that will only drive more offshore, to move across the ditch again.
*snort!*
Are you on your synthetic highs again, IV?!
You sound like an old-style Soviet propagandist;
“All is fine in People’s Glorious Republic, and our standard of living is now five times higher than suppressed comrades in imperialist United States!”
Christ, man, listen to yourself! You’re spouting propaganda and you actually believe it!! Damn, that was a good belly-laugh!! 😀
Can’t help but cringe at reading such rhetoric rather than laugh and as you rightly point out the similarities to the old Soviet propaganda. I suppose it is indicative of those who seek salvation in the extremes of the economic dogma they believe.
The way the Right downplays the concerns of inequality is reminiscent of North Korea’s dismissal of human rights abuses as Western propaganda. Here it’s probably dismissed as “far-left” propaganda.
I don’t doubt some people do believe in their viewpoint of a country where all is well, it’s based on their experiences. The New Zealand I experience like many is very different. The stark contrast in experiences evidence of the problem of inequality.
I’m glad you had a good laugh, Frank. I suppose it beats actually putting up a coherent argument in your books.
You wouldn’t know a coherent argument if it sat on your face and farted.
Damn.
Wish I’d written that. 😀
Why bother? You just reply with your usualAct spin. Lies, more lies,and lies……
David Cunliffe hit the nail on the head in his leadership victory speech,when he said he “saw hope dying in the eyes of the young”.
He ‘gets it’, and there are plenty of young people out there see that he ‘gets it’ and is going into bat for them.Only the greedy would argue against a capital gains tax on 2nd properties and the knocking on the head of non resident oversees buyers.I know numerous professional couples in their early 30s who have been to over 30 house auctions ,only to be gazumped by young Chinese agents buying on the phone for a client from who knows where.
They are chasing their tale just trying to save for a deposit as it is never enough.
And im thinking ,if these young professionals can’t do it,what chance anyone else!?
Quoted from Selwyn: ”
Has National’s belief in the trickle down theory worked for home owners; has it worked for those who are preparing to become adults, who are at school, or want to go to university? Is New Zealand a place where (based on the merits of each individual) our young people can with effort reach their potential, irrespective of where they come from, their socio-economic standing, or that of their community or family?”
Yes, talk about spin, and look at home ownership:
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11222006
The New Zealand Herald editorial on 19 March claimed the change in home ownership rates in New Zealand is not necessarily just due to housing having become less affordable, it suggested, it is also due to “social trends”:
“Taken from last year’s Census, these showed that 49.8 per cent of people aged 15 and over own or partly own the home they live in, compared with 53.2 per cent in 2006. This, said the Greens, showed families were being locked out of the housing market and that the Government had failed to make owning a home affordable.”
And then they dare to compare the home ownership rate with Germany, which has traditionally had a very high percentage of renters, but that is also, because after the war and during the economic boom there they built a high number of publicly and collectively owned housing projects to house many. Indeed over recent decades the trend in Germany has been towards more own home ownership, which has increased there. That is due to privatisation of much formerly publicly owned social housing to investment holding businesses and other private buyers. They have otherwise also a different society, different culture and higher density urbanisation, and never had quite the same “quarter acre section” lifestyle that New Zealand stands for.
Of course, paying off student loan debt will tie up earnings by many graduates for years to come, delaying the ability to invest in homes, but the excessive increase in house prices here is taking its toll. What is needed is more state funded housing, proper state housing and also low interest, government backed lending to first home buyers, on a rent to buy or more traditional way of financing homes.
But we cannot have that, due to Key and National, as that would drive down the credit and demand fueled, house prices, thus “diminishing” the equity of so many “middle class” and also other “investors”. Market adjustments to the south are not wanted by Key and Nats. Under Key and Nats high house and apartment prices are here to stay, and afford-ability will sink further, even if more houses will be built while immigration will continue, and while overseas buyers can continue buying up the extra new homes.
This has little to do with “social trends” and “lifestyle choices”, same as welfare dependency is not a “lifestyle choice”, but rather the result of a lack of sufficient full time, living wage offering jobs in too many regions.
But observing the MSM, I fear we will continue to get more “spin” data than anything more reliable and objective in this election year. The economy will be the leading topic, and Key will ride that wave as much as he can.
History of NZ has been like that of many once successful businesses here.
Established by hard working individuals and families in the late 19th century early 20th century.
Decades of successful growth before being publicly floated in the 1970s.
Moderate success, heck even moderate export record.
By the 1980s the MBAs start appearing and stocks become volatile, corporate vultures and takeovers skyrocket.
Enter the endgame, the market sell-off is mostly complete, it is now the time of asset stripping.
This is the stage the NZ Inc is currently experiencing, overseen by an experienced lieutenant of the market. TTPA sets the final blueprint. Soon NZ will be an empty husk, a vast green sweatshop of indentured minimum wage labour.
Even the speculators like IV will wither
We need to change much much more than the housing market.
“Speculators”? You obviously haven’t read a lot of what I write. Property is only one of my interests. In my day job I run a kiwi owned international business that employs a number of NZ’ers both here and overseas. If there’s any ‘asset stripping’ going on it is by our business overseas, and that’s the way it is with many business people I network with. Your paranoia is actually quite worrying and I suggest getting assistance.
.
I thought you told us that your ran a day care business?!
Your occupation/business seems to “morph” much like Gosman’s.
Noone’s occupation/business is morphing here Frank. You just can’t seem to grasp that a business can both be about child care and be international in nature or that someone can both work in banking and in IT. That looks to be your issue not IV or mine.
Defensive much, Gosman?
Not at all. Just pointing out when you deliberately set out to make out IV or myself are deceiving people when we are doing nothing of the sort. I am sure you would do the same if you were likely subject to a similar distortion.
When did I ever say I ran a day care business? You’re just making stuff up Frank.
Spin and myth appear to be nurtured by 2 full time commenters here that are either a preset machines, or a hired and paid trolls, spitting out pre-formated and formulated comments here, upon orders by a right wing operator in the back-ground.
^^ spammer ^^^
Message for Gosman, read this and think through the reasons why:
Gosman in my view you are too keen to apply comparisons to broad dissimilar economies. The solutions that I suggest here may not or may apply to resolve vulnerabilities in other economies. That is specifically why I was applying the solutions to a New Zealand housing context.
For example, in Australia the sustained increase in housing market values is being affected by migration yes, but also in large part due to a cooling off in the natural resource/raw commodity export industries… in particular mining. You may be aware that data releases in China continue to indicate a dipping down in economic PMI performance. When applying that knowledge to the Australian context, a simple cause and effect rationale will suggest there is interstate migration occurring, particularly among Aussie families returning to their state of origin now that they have made their big bucks in the mining fields. They now know the golden days are now more silver, so consequently they are tracking back to their states of origin, particularly to the cities in Victoria, NSW, and Queensland. They have money saved, and money to invest in their new homes. This is compounding the upward pressure on house prices in those states.
In New Zealand, we are simply not seeing this phenomenon. There is a cooling off on the volume of people migrating from here to Australia, however we are not seeing a flood of expat Kiwis returning to the cities here with a bulging purse bidding on homes in Auckland and Christchurch – certainly not to the degree that it would cook the market.
Again, the source information provided above suggests in NZ upward pressure is in evidence from a hot and active investment market, including offshore housing speculators and investors… particularly from South East Asia and mainland China. Is that a good thing? Well yes, but the rationale I’ve applied in this article is one where the New Zealand Government should prioritise its commitment to Kiwis and Kiwi families, rather than leave the country vulnerable to exploitative investors who have no longterm commitment to NZ. The word is out that NZ is open for business, good stuff, but the word is also out that NZ is wide open for huge land-banking profits, huge short and medium term gains through housing investment speculation, while returns can be structured in a way to avoid taxation liability – certainly while NZ Government is phobic at establishing a CGT.
In short, NZ Government looks foolish. It is unsustainable.
NZ has a large flow of migrants especially in to Auckland.
We also have a commodity boom in Milk if not in minerals.
We are also a destination for Real estate investment from Asia and other places as is Ausralia.
I don’t see how you can claim we are that different that a policy that doesn’t seem to have slowed growth in residential urban property prices in Australia would work in the New Zealand context. I think that is just wishful thinking.
Ok, well at least I tried drawing out an intelligent response from you. I’ll leave you to tighten your thought-straight jacket.
All the best.
Comments are closed.