The Dim-Post

July 29, 2013

Buzz buzz

Filed under: Politics — danylmc @ 8:29 am

We’ve been here before. Labour’s new housing policy has ‘closed the circuit’. Via RNZ:

Labour’s political opponents say its promise to crack down on overseas investors buying houses in New Zealand is desperate, xenophobic and racist.

Labour said on Sunday that if elected, it would try to drive down house prices by barring non-residents from buying existing houses, flats or apartments.

Vacant land could be purchased only if buyers committed to building a house on it.

Australians would be exempt due to a reciprocal deal.

But Housing Minister Nick Smith said there is no evidence to suggest that foreign ownership has any effect at all on house prices and the policy is a desperate ploy to win votes.

ACT said the policy is racist, anti-investment and anti-Chinese. It says high house prices are caused by lack of land supply – not foreigners buying property.

The strategy here is that when critics of the policy go on the news and call it racist, voters who support the policy feel that they’re being called racist – which they aren’t, some of their best friends etc – so they feel solidarity with the politician and party advocating the policy. Rumour has it the policy was incredibly popular with soft-National voters in Labour’s focus groups. It’s also Green and NZFirst policy, so Labour can’t lose any votes to their competitors over it. (Being in charge of Labour’s policy development – Go to Green Party website. Copy. Paste – seems like nice work if you can get it.)

Is it racist? I don’t know. I’d like to see some actual data on whether this is really a problem instead of anecdotes about there being loads of Asians at Auckland property auctions. I do know that any time a political party in New Zealand wants to boost its position in the polls it’s always by legislating against someone. In the National Party under Brash it was Maori, under Key its beneficiaries, and now Shearer’s ‘cracking down’ on foreign property investors – a less vulnerable group than solo mums, sure – but its still a depressing trend.

61 Comments »

  1. The policy will impact two groups of people. Overseas workers and students who have not yet got residence and overseas investors (often with a link to NZ).
    I doubt the first group is that big – it’s not that prudent to spend hundreds of thousands buying a home before your residence is confirmed. But for some it will make them feel excluded and act as a barrier to them putting down roots in this country (which could be counter to our objectives around attracting skilled migrants).
    The second group is overseas investors who typically have some kind of link to NZ. Most people don’t make half million dollar investments in an overseas property market they have no connection to just because they have read or heard somewhere that the returns are good (those crowds of ‘speculators’ we hear so much about).
    All of the cases of overseas investment I have heard of are people with a strong connection to NZ, sometimes people who holiday or work here for part of each year, but more often people with a family connection, especially children. There are numerous cases I’ve heard of with parents of international students or workers (first generation migrants) helping out with purchasing property for their children either as a place to live or as an investment to manage (this is of particular value to a lot of migrants who face employment discrimination as it allows the parents assets to create work for them in property management and improvement). This mirrors the typical behaviour of kiwi parents in trying to use their accumulated wealth to help their kids into a home or establish them with a stream of income. In this context all the policy really does is discriminate against first generation migrants by making it more difficult for their parents to use family wealth to support them, thus reinforcing the privilege of kiwis with family wealth by eliminating some of the competition.

    Comment by Richard29 — July 29, 2013 @ 9:01 am

  2. Basic populist arithmetic: win votes from group A, lose votes from group B. So to be successful, A must be greater than B.

    Likely outcome: Shearer will get temporary boost from A, and permanent loss of B. The problem with the populist drug is that it wears off fast, and the right can do it better (i.e. nastier).

    If Labour go up in the polls, Key will just announce that we have to stop the boat people or we’ll get Sharia law. (Shearer will say nothing for 3 days, then support Key).

    Comment by sammy 2.0 — July 29, 2013 @ 9:12 am

  3. Bonus: when “when critics of the policy go on the news and call it racist” then racists know who to vote for.

    Comment by pete — July 29, 2013 @ 9:23 am

  4. The study I read (and it was a recent study – reported widely in the “media”) indicated that only about 5 % of housing purchases in Auckland were by “foreigners”, and the biggest group of those were – wait for it – Aussies! So automatically, Shearer has excluded the largest group of foreign purchasers. The next biggest group were Brits, and _then_ Asians (primarily Chinese).

    A group comprising only 5 % of the total has little or no impact on housing prices. This is Shearer’s equivalent of Brash’s Orewa speech.

    Comment by David in Christchurch — July 29, 2013 @ 9:28 am

  5. I’d like to see some actual data on whether this is really a problem instead of anecdotes about there being loads of Asians at Auckland property auctions.

    And here EXACTLY is the problem. We simply don’t have the data in NZ to know whether or not there is anything to this other than a vocal group of aucklanders getting pissed off they lost an auction on their Ponsonby ‘dream’ home.

    Following up on Sammy, if I were in the Nat’s strategy team trying to come up with a response on this, I’d drop the racism angle and instead go for shoring up support with existing home owners. Something like “Labour are going to tell you who you can and can’t sell YOUR house to. You’ll get a less money for all the hard work you’ve put into maintaing your property and you’ll have less retirement income of your own to rely upon.”

    Comment by Phil — July 29, 2013 @ 9:30 am

  6. Shearer this morning had no facts to back up his allegations. But he was certain that foreigners were a problem and that most of them weren’t Australian.

    I think there should be a very high standard of evidence required before we start blaming foreigners for our problems.

    What is it about the Labour Party leadership that is so toxic. Goff with his “Nationhood” speech, now Shearer of all people going down the same path.

    Comment by NeilM — July 29, 2013 @ 9:54 am

  7. This is good policy. There is no reason that foreigners should be able to purchase property here, unless they are permanent residents. If they want property, they can go buy some in their own country.

    And I think the CGT will sort out the Aussies – why do you think they are so keen to buy here in the first place ?

    Again, another win for the Greens.

    I think there should be a very high standard of evidence required before we start blaming foreigners for our problems.

    I think there should be an even HIGHER standard before we put ourselves at a disadvantaged position when it comes to owning land in our own country. And, no, some kind of fetish for an “international level playing field”, in which ours is the only level one, is NOT strong evidence, and is a pathetically weak argument.

    Perhaps foreigners aren’t a problem. If so, how come almost ALL have similar restrictions ? If they want to strike deals like the one we have with Australia, then fine, let’s have a transparent, informed process.

    Comment by mikaerecurtis — July 29, 2013 @ 10:12 am

  8. This is good policy. There is no reason that foreigners should be able to purchase property here, unless they are permanent residents.

    Absolutely. Cue Danyl’s point about critics calling it a racist policy playing into Labour’s hands. I think it’s a sensible policy, so if you’re calling it racist you’re calling me racist, so fuck you when you come door-knocking for my vote. Hopefully Whaleoil and Kiwiblog will squawk racism for all they’re worth.

    Comment by Psycho Milt — July 29, 2013 @ 11:39 am

  9. So what happens to the 30-55,000 foreign migrants that come here each year? Many come with the expectation of buying a house ASAP and settling in, many more expect to buy in the near or long term and most would be disgusted to be told they have no chance unless they commit to a new house.

    I’ve no doubt we’ll still get plenty of migrants who only want to rent, but what about those we really need with the good degrees and/or skills.. these people have options and if they perceive we are xenophobic they can go elsewhere and get better wages.

    Note too this is largely an Auckland problem.. the (depopulating) regions will not be happy with a policy that denies their migrants the chance of buying a house in Sth Waikato, BoP, East Coast, Wairarapa etc.

    JC

    Comment by JC — July 29, 2013 @ 11:51 am

  10. It isn’t fear of racism that has held up this type of law change in the past – it is the mental lockstep of slavish adherence to neo-liberal economic theory no matter what damage it does to the locals that has so gripped our political elites for the last thirty years. This policy is another sign that Labour, at least, is losing the religion and returning to saner politics,

    @David in Christchurch – the supposed 5% figure is deliberate understating of the case from real estate agents – a group with a direct vested interest in housing bubbles. Russel Norman reckoned the figure to be more like 20%. Even if the number is 10% then pulling 10% of the most cashed up buyers out of the market is going to have a significant impact on prices. It is an interesting comment on the ethics of cowboy property speculators and developers like Ollie Newland that the first thing they try and do is dream up ways to circumvent the letter and spirit of a new law, a law that I will predict will turn out to be a very popular “thank goodness someone has seen common sense” one from Labour.

    @Phil the “Labour are going to tell you who you can and can’t sell YOUR house to. You’ll get a less money for all the hard work you’ve put into maintaing your property and you’ll have less retirement income of your own to rely upon.” aqpproach has one serious flaw – it presumes you own a house, or can afford one. It is a message that will starkly stake out National as the party of and for the haves. The message is actually about pulling up the ladder, stated in the frankest and starkest way imaginable.

    As for racism – if you happen to believe New Zealand should mainly be governed in the interests of the New Zealanders who happen to live here, then this is not a racist law it is just common sense. If you feel we are just another place to make a buck, then you might feel discriminated against. Personally, I prefer our politicians to be primarily interested in making NZ a nicer place for the people they represent and who elect them,and not govern in the interests of foreign property speculators or the rigid theories of a dead, mad Russian-American novelist.

    Comment by Sanctuary — July 29, 2013 @ 11:57 am

  11. Sanc: Note that the data presented clearly stated that the AUSTRALIANS were by far the biggest group of foreigners buying housing. So even if the percentage, as you suggest, is much higher, the overall impact of leaving Aussies out of the policy still means that the policy will have little impact on house prices.

    Comment by David in Christchurch — July 29, 2013 @ 12:08 pm

  12. To add facts see Matt Nolan http://www.tvhe.co.nz/2013/07/29/housing-xenophobia-again/ – It’s depressing that “the fear of the other” is the easy policy answer by people who do know better or have the resources/ability to find better information/design better policy.

    It is not even as if it was Winston Peters this time dragging everyone down into the mud.

    Comment by WH — July 29, 2013 @ 12:16 pm

  13. yeah, you move your family here, have a job, but are locked out of the property market for 2 years.

    Comment by NeilM — July 29, 2013 @ 12:22 pm

  14. …if you happen to believe New Zealand should mainly be governed in the interests of the New Zealanders who happen to live here…

    Such as business owners and the public sector who need skilled workers that the can’t find in NZ? This law would make NZ a less inviting place for those who can take their skills to the country of their choice – whereas I’d like them to come *here* and help our businesses do better.

    Sure, rein in the speculators if they’re causing a notable housing supply issue, but I have yet to see evidence to back that up.

    Comment by Ataahua — July 29, 2013 @ 12:22 pm

  15. neil M “yeah, you move your family here, have a job, but are locked out of the property market for 2 years.”

    i get the point – but surely its just a question of when the policy kicks in
    – if your on a work to residency visa you could argue that your making a commitment to living here. If your on a student visa, temporary work visa or just a tourist – your not so committed are you.

    But yes some actual data would help

    Comment by framu — July 29, 2013 @ 12:29 pm

  16. Winston Peters supporting Shearer:

    “When I see Barfoot and Thompson’s top 25 agents and 19 are Asian…

    Comment by NeilM — July 29, 2013 @ 12:31 pm

  17. David, just push onto the back of the neck while pushing your bitten arm upwards if he attacks!.

    Comment by TransportationDevice A7-98.1 — July 29, 2013 @ 12:31 pm

  18. @ Sanc,
    It presumes you own a house, or can afford one.

    Home ownership rates in NZ were 65% in 2004, according to HNZ data. That’s before the mid 00’s boom in property, but we know that a lot of new borrowers came into the market with high LVR loans around that time, so i’d wager the rate has increased a little bit since then. In a purely electoral-math sense, that’s advantage-National.

    Comment by Phil — July 29, 2013 @ 1:05 pm

  19. yeah, you move your family here, have a job, but are locked out of the property market for 2 years.
    Just like every other country. How does this disadvantage us ?

    Comment by mikaerecurtis — July 29, 2013 @ 1:20 pm

  20. Shearer’s argument that I heard this morning was classic. To paraphrase: Its not xenophobic because the Asian countries have the same law. And they probably didnt have any debate over whether or not it was xenophobic.

    So Labour is holding itself to the standard of – the Chinese Communist Party.

    Comment by swan — July 29, 2013 @ 1:36 pm

  21. “…Home ownership rates in NZ were 65% in 2004, according to HNZ data…”

    According to this report – http://www.stuff.co.nz/business/industries/8703685/Auckland-has-lowest-home-ownership – home ownership has dropped below 33% in Auckland and is dropping. And let’s face it – this is mainly an Auckland problem. Middle class parents are worried their children will ever be able to afford a home, so even amongst home owners there is going to be sympathy for a drive to get house prices under control. The only people who won’t like this policy is that noisy minority of the middle class who have heavily borrowed to buy additional rentals. This group – whose self perception is that are hard working, (often self-employed) “ordinary Kiwis” with a nice SUV, a nice house in Brown’s Bay, a holiday home in Mangawhai and two rental properties all mortgaged to the hilt – like to whinge a lot and have an enormous sense of entitlement but they vote National anyway.

    Comment by Sanctuary — July 29, 2013 @ 1:38 pm

  22. “…So Labour is holding itself to the standard of – the Chinese Communist Party…”

    Try looking at a map, you fool. “Asian countries” is not just China.

    Comment by Sanctuary — July 29, 2013 @ 1:39 pm

  23. Sanctuary – yes this is about the middle classes isnt it! You see rents have not risen anything like house prices over the last couple of decades. Who do rents impact? – low income earners. House prices? Aspirational middle class. What has helped kept rental prices down? Property investors accepting ridiculously low yields on their rental property.

    So make no mistake this is directors law in action. You might want to reverse you “party of the haves/ have nots” conclusion up above.

    Comment by swan — July 29, 2013 @ 1:42 pm

  24. As a kiwi living in the UK, there was no law (err, that I was aware of, anyways) that prevented me from buying property. The banks, however, wouldn’t let me have a 95% loan, only 80%. Racist?

    Comment by Clunking Fist — July 29, 2013 @ 1:43 pm

  25. Noted Sanc,

    Indonesia, Philippines, Vietnam, India, Burma etc etc. Lots of wonderful political cultures we should be holding ourselves up to. Even S Korea and Japan are hardly bastions of liberal ideas.

    Comment by swan — July 29, 2013 @ 1:44 pm

  26. i can spot one logical fallacy.

    What guarantee is there that houses currently sold to the undeserving “foreign speculators” won’t just be bought by local equivalents?

    At present a large % of overseas buyers intend to live here. So they get whacked. People living here looking at residency get whacked. All based on a policy presented with no sound justification.

    Comment by NeilM — July 29, 2013 @ 1:47 pm

  27. Sanc,

    “home ownership has dropped below 33% in Auckland and is dropping.”

    Sort out your reading comprehension. For some reason the article has separated people without mortgages from people with mortgages. Under a third without mortgages in Auckland and 35% with mortgages. So somewhere around 65% own their own home according to that data.

    Comment by swan — July 29, 2013 @ 1:49 pm

  28. Without actual statistics or facts-based analysis, it does feel a little racist. But at this stage, the policy is probably good politics. Sadly.

    Comment by Auto_Immune — July 29, 2013 @ 1:53 pm

  29. If Stephen Franks is correct, and he is a pretty good lawyer, the Labour negotiated FTA with China would prevent Chinese being treated any differently to Australians.
    The FTA apparently requires New Zealand to treat prospective Chines investors in the same way as any other foreigners (ie Australians).
    It would also mean that after they have invested they must be treated in the same way as New Zealanders. Thus if a student bought a place while living here they could not be made to dispose of it if they left New Zealand.
    Oh dear, how sad, too bad, never mind.

    Comment by Alwyn — July 29, 2013 @ 1:57 pm

  30. I just saw a different set of numbers that indicated that actually, indeed, Australians only make up 0.5 % of purchasers. Chinese make up the largest fraction of foreign purchasers – 0.6 % of all purchases. 6 out of every 1,000. Now that is indeed a crisis! (Note: Sarcasm mode ON.)

    Comment by David in Christchurch — July 29, 2013 @ 2:42 pm

  31. When David shearer goes on national radio and declares that this will drive down prices, but can provide no evidence that there are significant sales to foreigners or that prices are being pushed up by foreigners, the nats have every right to ask what’s the true basis for it. Labour in recent times seems focused on the yellow peril eg crafar farms, chch rebuild, so more petty racism from them wouldn’t be a surprise.

    Comment by insider — July 29, 2013 @ 3:33 pm

  32. I saw Steven Franks comments on Stuff too; if he is correct, where does it leave Kiwis wanting to buy houses/land in China. Or is the fly in Shearer’s ointment here the required equivalence with treatment of Aussies?

    Comment by Teej — July 29, 2013 @ 5:45 pm

  33. And 3News coverage shows Labour’s problem – the difference between the policy and the leader’s ability to promote it.

    Norman and Peters concise and clear. Whereas Shearer, asked if he’s targeting Asians, insists it’s actually “all foreigners”. (Press secretary curls up in foetal position, cries).

    Comment by sammy 2.0 — July 29, 2013 @ 6:08 pm

  34. The study I read (and it was a recent study – reported widely in the “media”) indicated that only about 5 % of housing purchases in Auckland were by “foreigners”, and the biggest group of those were – wait for it – Aussies!

    According to 3 News, a BNZ survey found that nation wide foreign buyers make up about 7.7% of the market. That’s excluding Australians.

    Comment by Steve — July 29, 2013 @ 7:08 pm

  35. @mikaere: First, not ‘every’ country does it. Secondly, no other country does a universal basic income, does this mean it’s a stupid policy?

    Comment by Hugh — July 29, 2013 @ 9:09 pm

  36. Wonderful thread. Almost the entire motley fanboy club of Orewa One stentoriously chanting “racist” with straight faces and dying a little inside as they belatedly realise the result of their crocodile umbrage. Simply delicious lads, do keep on.

    Comment by ak — July 29, 2013 @ 9:18 pm

  37. “Is it racist? I don’t know. I’d like to see some actual data ”

    – Danyl on home ownership by non-citizens, July 2013

    “People are allowed to feel apprehensive about such a state building its own vertical supply chains within the New Zealand economy without being labeled xenophobic and racist.”

    – Danyl on land ownership by non-citizens, January 2012

    Comment by Hugh — July 30, 2013 @ 2:47 am

  38. @Hugh,

    You appear to believe there is some contradiction involved in those two statements. It isn’t obvious to me. Want to elaborate further?

    Comment by Flashing Light — July 30, 2013 @ 7:39 am

  39. So Steve: We now have 3 different figures, indicating that it clearly depends on how you gather the data and the sources of those data. However, all of these numbers are substantially less than 10 %, and it still suggests that this policy will have little impact on house prices.

    Comment by David in Chch — July 30, 2013 @ 9:00 am

  40. @Comment by David in Chch – stop being such a dickhead. Firstly, Shearer himself has said there is no silver bullet. Pulling the most cashed up 5% out of the market – the people who can go whatever it takes over what a Kiwi first home buyer can afford – will take a shitload of heat out of the market. If you dont think it will have an impact, then listen to this panic stricken, rermarkably ignorant rant from a certain Graeme Wall, a self-described “high end” real estate agent who clearly sees his income fluttering out the door – http://www.radionz.co.nz/national/programmes/morningreport/audio/2563837/auckland-real-estate-agent-rubbishes-labour%27s-housing-policy And they wonder why real estate agents are regarded as the scum of the earth!

    Secondly, this would be (under Labour) combined with a large government home building program and a CGT. Unlike National, whose millionaire pluotcrats are insulated from reality to the point they can indulge in lazy ideological fantasy without personal cost, Labour is slowly moving away from neo-liberalism and returning government to it’s central role of governing. The near hysteria from the extreme right (Banks, Farrar, the Libertarianenz) isnt because they support a rampant property bubble – it is because they see any attempt to inject comon sense into policy as an assault on their ideological carapace.

    Comment by Sanctuary — July 30, 2013 @ 10:26 am

  41. Interesting rant, Sanc. I am using data and figures and conclusions drawn from reports and people who supposedly understand the economy and the housing market, and not just self-interested real estate agents. As for the building programme, it needs land, and that has not and is not being released, at least not in Auckland. That is the major blockage in housing supply. And please, note – I have not at any time engaged in any personal insults or comments.

    Comment by David in Christchurch — July 30, 2013 @ 11:01 am

  42. As for the building programme, it needs land, and that has not and is not being released, at least not in Auckland.

    There is a relatively simple fix for land banking – ‘use it, or lose it’ via the institution of a compulsory acquisition policy.
    If it can be done for roads or other large government sponsored utility projects, it can be done for state housing.

    Comment by Gregor W — July 30, 2013 @ 11:48 am

  43. Yes, GW, it would be. However, no central government has yet made a move in that direction.

    Comment by David in Christchurch — July 30, 2013 @ 2:31 pm

  44. David – did you mean it hasn’t been attempted in NZ yet?

    Central government land expropriation policies to extend / manage urban environments are commonplace in Singapore, South Korea and Taiwan.
    And, to defuse the obvious cultural / population density argument, the practice is apparently alive and well at the metropolitan level in the United States according to Cypher and Forgey (2003).

    Comment by Gregor W — July 30, 2013 @ 2:53 pm

  45. Ah Gregor good ole command and control eh. Tell one group of people “you arent allowed to develop your land” and another “you can develop your land”. And when the latter group decides its not in their interests to at a given point in time you get all upset and threaten confiscation!!!

    How about stopping telling everyone what they can and cant do with their land for an idea??

    Comment by swan — July 30, 2013 @ 3:13 pm

  46. How about stopping telling everyone what they can and cant do with their land for an idea??

    Sure … because immediate individual decisions based on predictions about what other people will decide to over the next 25 or so years undoubtedly is the best way to create a collective social arrangement (i.e. a city) that is optimally efficient.

    Comment by Flashing Light — July 30, 2013 @ 3:39 pm

  47. Ah Gregor good ole command and control eh.

    swan – are you suggesting expropriation for the purposes of controlled urban development isn’t working out that well for Singapore, South Korea and Taiwan?

    Comment by Gregor W — July 30, 2013 @ 3:47 pm

  48. Not enough land has been released in Auckland? Not where I live; there are vacant sections for sale as far as the eye can see. Problem is, no one will sell for less than about $350,000. Put a house on that and the price tag doubles. Not exactly first home buyer stuff and no surprise the land is moving pretty slooooooooooowly. One land owner has just subdivided their formerly productive market gardening land; land+house packages with GJ Gardener start at over $740k.

    Comment by Me Too — July 30, 2013 @ 4:12 pm

  49. @ Gregor W – aaaah, that use it [land] or lose it policy, wouldn’t that result in Maori owned land (which is often under-used due to lack of capital) being confiscated? Unfortunate.

    In general, the obvious solution to a lot of the squaking above is to ban residential property ownership for anyone who is ‘not resident’ in NZ (as opposed to ‘not having residency’, ie Permanent Residency). If you live in NZ, even if just on a 3 month visitor visa, you can buy a house; if you don’t physically live in NZ, why do you need a house here? You could even give a buffer period of a couple of months – you can buy a house up to 3 months prior to arriving in NZ, and must sell by 3/12 months after leaving.

    Comment by bob — July 30, 2013 @ 4:36 pm

  50. “Pulling the most cashed up 5% out of the market – the people who can go whatever it takes over what a Kiwi first home buyer can afford – will take a shitload of heat out of the market.”

    Do you really think the wealthiest 5% of buyers are all non-residents, and there are no non-residents in the bottom 95%?

    If the 5% being selected really were the richest, I’d say you might have something. But they’re not the richest 5%, they’re the 5% that’s most politically easy to target.

    Comment by Hugh — July 30, 2013 @ 4:49 pm

  51. wouldn’t that result in Maori owned land (which is often under-used due to lack of capital) being confiscated? Unfortunate.

    No doubt, but the race element is immaterial.
    Any expropriation would come with compensation, as it does today for utility related activity.

    Comment by Gregor W — July 30, 2013 @ 5:03 pm

  52. “Sure … because immediate individual decisions based on predictions about what other people will decide to over the next 25 or so years undoubtedly is the best way to create a collective social arrangement (i.e. a city) that is optimally efficient.”

    Of course it would be better if we let our angels decide for us wouldn’t it.

    Comment by Swan — July 30, 2013 @ 7:13 pm

  53. This is very funny. I can imagine many of those defending the policy being the same ones crying the R word, had the policy been proffered under a blue banner.

    Comment by Adze — July 30, 2013 @ 7:28 pm

  54. This is very funny. I can imagine many of those attacking the policy being the same ones hailing its obvious merits, had the policy been proffered under a blue banner.

    Comment by Flashing Light — July 30, 2013 @ 8:10 pm

  55. This is very funny. I can actually see with stark clarity many of those attacking the policy and crying the R word being the exact same ones who hailed the now universally-acknowledged deliberate R of Orewa One, proffered and promulgated by the very bearer and leader of the blue banner.

    Comment by ak — July 30, 2013 @ 10:02 pm

  56. Phil at 5,

    … if I were in the Nat’s strategy team trying to come up with a response on this, I’d drop the racism angle and instead go for shoring up support with existing home owners. Something like “Labour are going to tell you who you can and can’t sell YOUR house to. You’ll get a less money for all the hard work you’ve put into maintaing your property and you’ll have less retirement income of your own to rely upon.”

    I suppose, but that would mean tacitly accepting that the policy will have significant impact on house prices after all. Which brings me to…

    David at 39,

    So Steve: We now have 3 different figures, indicating that it clearly depends on how you gather the data and the sources of those data. However, all of these numbers are substantially less than 10 %, and it still suggests that this policy will have little impact on house prices.

    The first figures you referred to had purchases in Auckland at about 5% by foreigners, with the biggest of that group being Australians. That’s much different from the BNZ figures referred to by Patrick Gower on 3 News. So I suspect it’s not so much how the data was gathered, as a case of one of those figures being rubbish.

    With regard to your second set of numbers, I assume you mean this from Tony Alexander: http://tonyalexander.co.nz/wp-content/uploads/2013/05/BNZ-REINZ-Survey-May-2013.pdf

    I assume that’s where Paddy got his 7.7% figure from, given that Alexander is the BNZ’s chief economist. So the figure for “offshore” buyers is 9% overall (close to the 10% figure some cite), and perhaps 7.7% if we remove the Australians. Then if we remove those who intend to live here, it appears the figures change to 3.6% overall and 3.2% not counting Australians.

    Regardless, this evidence suggests the claim that Australians are “by far” the biggest group of foreigners buying housing is bogus.

    Comment by Steve — July 30, 2013 @ 11:28 pm

  57. This is very funny. I can imagine many of those attacking the policy being the same ones hailing its obvious merits, had the policy been proffered under a blue banner.

    Comment by Sanctuary — July 31, 2013 @ 7:15 am

  58. Gregor W @ 47 “swan – are you suggesting expropriation for the purposes of controlled urban development isn’t working out that well for Singapore, South Korea and Taiwan?”
    What’s the refrain that gets trotted out “If you think so places are so great, why don’t you move there”. I think that’s the one.

    “There is a relatively simple fix for land banking – ‘use it, or lose it’ via the institution of a compulsory acquisition policy.”
    Goody, I feel another quango coming on! They’ll need nice offices in Wellington, new logo & letterhead, a diversity officer and a climate change manager. We’ll solve that unemployment problem yet! The fiscal position, not so much…

    Comment by Clunking Fist — July 31, 2013 @ 12:59 pm

  59. CF – you’re right. Lets do nothing. That’ll fix it.

    I think I see pile of hay over yonder than needs a straw-man made out of it. Run along now.

    Comment by Gregor W — July 31, 2013 @ 2:01 pm

  60. Yep, those are the options:
    (1) Compulsory acquisition of land for the construction of housing towers for the proletariat, à la USSR or 60s UK (heh, I made that last bit outta straw); or
    (2) Nothing

    Here’s a couple of ideas that folk have suggested that could reduce the price pressures on houses or on cost of construction:
    – Take building inspections away from councils and give them to insurers (who have to stand behind the house, even if the builder goes bust)
    – change the building codes so that the minimum standards aren’t so high, say have gold, silver & bronze standard. We know we are likely to be safer/faster/sexier in a new Volvo/BMW, but we still choose to buy Toyota & Hyundai.
    – put pressure on councils to be less restrictive on zoning, thus freeing up more land for housing.
    – more secure park’n’ride facilities, so that the poorest (who are forced to live further away) can travel to work.
    – ban lifestyle blocks, just to piss Sanc off, oops I mean to stop land-banking. A lifestyle block is sooo bourgeois.
    – Capital Gains Tax
    – a more proactive monitoring of property investors by IRD, to ensure that they correctly account for their gains & losses and pay GST on the work they undertake for each other (you know, that electrician that works on my houses while I do plumbing on her houses and we don’t exchange cash, etc)
    – set the economy free so that more and better jobs are created so that folk can afford the better houses

    Comment by Clunking Fist — July 31, 2013 @ 3:55 pm

  61. I don’t think it is a ploy but Labour needs to think about how to keep the overseas equity in the country, otherwise New Zealand will be subjected to another recession and there’s only one step from a recession to a depression. Both major parties need to be more fiscally astute. How about restarting contributions to the New Zealand Superannuation Fund and implementing a Capital Gains Tax if you want to retain the age of superannuation at 65 years for the foreseeable future.

    Comment by Daniel Lang — August 16, 2013 @ 5:19 pm


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