The Dim-Post

August 24, 2014

First thoughts about National’s Housing Policy

Filed under: Politics — danylmc @ 4:04 pm
  • It is probably clever. $20,000/couple is not an election bribe any other party will be able to match and it is targeted at a very specific group of people: first-home buyers on low and medium incomes. Presumably National has decided that these are an important demographic in this election. 
  • It is easy to ridicule. Pouring taxpayer money into the housing bubble is not a great way to solve the housing affordability crisis. If the subsidy increases prices by $20,000 then the government is simply wasting money. I guess the Nats will argue that it will increase the demand for new houses, or that they’ll gut the RMA to increase the supply. 
  • It is not a ‘gamechanger’. It’s probably what the Nats were planning to do before Dirty Politics, and they’ve decided to go ahead with it and pretend everything is business as normal. Good luck with that guys!
  • National’s ideology and values are not (yet) delivering any policy ideas during this campaign. Free money for first home buyers, free doctor’s visits for children and MOAR ROADS are not right-wing (or ‘center right’) ideas, in the way that the partial sales of the energy companies was. Having a popular right-wing party simply unable to campaign on its values or ideas is a pretty sweet place for the left to be, long term. It would be nice to be in government, but having National in there implementing left-wing policies for us is the next best thing. 

37 Comments »

  1. If the subsidy increases prices by $20,000 then the government is simply wasting money

    No, they are handing the money to their mates whilst pretending to give it to new home buyers,

    Comment by richdrich — August 24, 2014 @ 4:13 pm

  2. It also continues in National’s fine vein of saying a lot but actually doing very little. They’re like the Wallabies always “gonna do this and that” but never delivering.

    Comment by TerryB — August 24, 2014 @ 4:17 pm

  3. Yeah, think I’ll have to vote Act after today. This no different to the Clark era Labour bribes.

    Comment by Swan — August 24, 2014 @ 4:43 pm

  4. Any proper solution to the housing shortage – including but not limited to greater density, CGT, restricting house purchases to NZ citizens & PR’s – all strike at the heart of the housing cartel. And that means getting offside with powerful vested interests, not unlike farm subsidies in the G7 Nations.

    If Dirty Politics actually succeeds in derailing Key & Co, then it’d be poetic justice if Epsom and other safe blue-rinse seats have every single town planning regulation abolished.

    Comment by Kumara Republic (@kumararepublic) — August 24, 2014 @ 4:57 pm

  5. Wait, can I get gay married, buy a house with $20k free money, then flip the thing and keep ~$15k? Because I’m totally doing that. Who’s up for a marriage of convenience? 10/5 split? Or do I have to hold it a while and take some capital gain too? I mean, obviously if the marriage breaks up they’ll have to let us sell the house.

    Comment by tussock — August 24, 2014 @ 4:59 pm

  6. Swan #3: Which ACT? The ACT Party of Jamie Whyte who wants to gut the RMA, or the ACT Party of David Seymour who wants to ban high density living in the name of ‘community character’?

    Comment by Kumara Republic (@kumararepublic) — August 24, 2014 @ 5:02 pm

  7. Not a lot of consistency here, Danyl. Couple of posts ago John Key eats babies and Nats are disgusting. Now Nats are nearly as good as having Labour in power…

    Comment by macdoctor01 — August 24, 2014 @ 5:12 pm

  8. macdoctor01 – I think you’re confusing politics and policy.

    Comment by Thomas Beagle (@thomasbeagle) — August 24, 2014 @ 5:26 pm

  9. @kumara republic,

    Yes the choices facing liberals are all hold your nose type options.

    Comment by Swan — August 24, 2014 @ 5:29 pm

  10. Nah, Macdoctor. This one’s not Danyl. The tone’s not right. And he usually understands the big picture contest between left and right is mostly the macro stuff not the micro stuff. This is all too sophomoric. Its one of his outsourced ones. I suspect Clint the Green Cuckoo in the Labour nest.

    Comment by Tinakori — August 24, 2014 @ 5:44 pm

  11. *Would* it raise prices, though? I was under the impression that it is currently quite difficult to find new-build houses going for the kind of prices first home buyers can afford. So bearing in mind that there’s a cap on how expensive the houses can be, developers would know that if the value goes over $450k (in most places), the $20k subsidy and 10% deposit loan are gone, so the buyer will be gone too.

    Comment by Melissa Julius (@melissaj_nz) — August 24, 2014 @ 6:19 pm

  12. It’s also a retread as it is largely the same measure they announced at their 2013 Conference – and that worked out so well for first home buyers they’ve had to double the subsidy and raise the threshold again…
    https://www.national.org.nz/news/news/media-releases/detail/2013/08/10/package-to-aid-first-home-buyers-announced

    Comment by Mike — August 24, 2014 @ 6:49 pm

  13. I just saw any house I might maybe be able to afford just rise 20k…

    Comment by Michael — August 24, 2014 @ 7:07 pm

  14. It’s also a retread as it is largely the same measure they announced at their 2013 Conference – and that worked out so well for first home buyers they’ve had to double the subsidy and raise the threshold again…

    I don’t want to hear a thing from the Nats when Labour raise it to 60K next time they have a chance.

    Comment by Nick K — August 24, 2014 @ 7:26 pm

  15. You’ll be lucky – when that happens they’ll be blathering about Labour knowing nothing about economics…

    Comment by Psycho Milt — August 24, 2014 @ 7:50 pm

  16. ” It would be nice to be in government, but having National in there implementing left-wing policies for us is the next best thing. ”

    This is hardly the kind of policy we’d be expecting (and possibly, hoping for) under a Labour/Green coalition.

    Comment by kalvarnsen — August 24, 2014 @ 7:52 pm

  17. Danyl has this completely wrong.

    Both Labour and the Greens are proposing to build tens of thousands of quality affordable homes, and then help people into them (as state tenants, or as owners). That is quantitatively different to giving people tens of thousands of dollars to give to what will be mostly existing property owners. This is a headline policy for both Labour and the Greens, but one that has barely scratched the media’s interest. Perhaps the public are interested in it, but we’ll never know.

    Comment by George — August 24, 2014 @ 8:30 pm

  18. “This is a headline policy for both Labour”

    The thing is there isn’t much in the way of policy. They simply propose to build a whole bunch of house on land they will buy and sell them cheap at no cost to the state. Oh and they will reform the reserve bank act to “make sure” interest rates are lower.

    I’m sorry but, what?

    Comment by Swan — August 24, 2014 @ 8:48 pm

  19. Twenty grand, meh, even if this govt lolly didn’t push up house prices, house prices in Auckland go up by this much every few months. The policy does nothing meaningful for people trying to buy an existing house; there is extra money for building a house but new houses cost more than existing ones… I’m sure a few people will take advantage of it (silly not to!) but the big picture problems around housing will not be solved.

    Labour’s policies address the problem.

    Comment by MeToo — August 24, 2014 @ 8:52 pm

  20. “Having a popular right-wing party simply unable to campaign on its values or ideas is a pretty sweet place for the left to be, long term. It would be nice to be in government, but having National in there implementing left-wing policies for us is the next best thing.”
    One reason might be NZ’s economy is already ‘structurally’ right-wing and has been since the Rogernomics reforms. Not much left for National to do is there? Unions lost their power long ago, tax rates are pretty low (and increasing taxes above 40% for the rich has long been off the table), and the education system is slowly being corporatised (e.g. performance incentives). IMO it will take a tectonic shift in world politics greater than what happened in 2008 to really move things in another direction.

    Comment by Sebastian UK — August 24, 2014 @ 10:29 pm

  21. I’m confused. You acknowledge that the Labour caucus is shambolic and divided. You believe that National is implementing left wing policies. Can you remind me again why anyone should vote Labour? Surely, until the Labour caucus can restore some trust, we are better off voting National this time around.

    All of that, without even considering how damaging a Labour/Green/Mana/Dotcom/NZ First Coalition might be to Labour in the longer term. Does anyone really believe that coalition is likely last a full-term?

    Are we so tribal that we will keep pushing for ‘our team’ even if a Labour victory this election it is not in the long term interests of centre left government. Isn’t this election one where the price of victory if we are voting left is simply too high?

    Comment by Still Undecided — August 25, 2014 @ 5:09 am

  22. “including but not limited to greater density, CGT, restricting house purchases to NZ citizens & PR’s – all strike at the heart of the housing cartel.”

    Utter crap. The “housing crisis” is caused by too much building regulation, restrictions on building on Auckland’s vast areas of bare land and government pricing of interest rates.

    “Both Labour and the Greens are proposing to build tens of thousands of quality affordable homes”

    Cant be done. Unless you are talking about box apartments near railway lines which no one would want to live in. Which takes out the quality bit.

    What happens next comrades is that after the banks stop lending (as they surely will) rents will soar. At the moment vast amount of credit is being created and it is pouring into the production areas of the economy. (property construction) This is keeping consumer prices lower (rents). However once the lending stop construction stops then rents will rise.

    “pretty sweet place for the left to be, long term”

    Next in coming Green Labour government will find the kitchen utterly empty. Private credit creation will have been maxed out by National. Extensive State borrowing will only force interest rates up crashing the economy.

    After 6 or 9 years of National running left wing polices will leave Greens & Labour will have nowhere to go. Its over. The credit aint there. It will have been pissed away by National long before Greens Labour get in.

    Comment by Simon — August 25, 2014 @ 7:24 am

  23. “Having a popular right-wing party simply unable to campaign on its values or ideas is a pretty sweet place for the left to be, long term. It would be nice to be in government, but having National in there implementing left-wing policies for us is the next best thing.”

    Quit a succinct summary apart from the fact that Helen Key’s Nats don’t have any values or ideas that are really that much different to the Labour Party. Those who believe that John Key is the reincarnation of Ghengis Khan are seriously deluding themselves. He’s in fact an utterly hopeless wet liberal/ progressive whose spineless political leadership has destroyed the National Party as any kind of real force in NZ politics..

    Comment by Redbaiter — August 25, 2014 @ 8:58 am

  24. Key’s Nats don’t have any values or ideas that are really that much different to the Labour Party.

    I think it was Denis Welch who, when the Nats claimed the Lange Government was stealing their policies, pointed out that yes, they were National policies, even if they only took them out for the occasional Sunday drive. ‘Twas ever thus.

    Comment by Joe W — August 25, 2014 @ 9:26 am

  25. “Oh and they will reform the reserve bank act to “make sure” interest rates are lower. ” – the mechanisms for which Labour has described in detail.

    Comment by Sacha — August 25, 2014 @ 12:49 pm

  26. You get a good namecheck and quote in the Guardian, Danyl:

    http://www.theguardian.com/commentisfree/2014/aug/25/dirty-politics-new-zealands-own-house-of-cards-is-collapsing

    Comment by Dr Foster — August 25, 2014 @ 1:56 pm

  27. The Prime Minister and Paula Bennett were in West Auckland today looking at houses that cost $770,000 and $850,000. What does the best part of a million dollars have to do with first home buyers and affordable housing?

    Comment by George — August 25, 2014 @ 3:31 pm

  28. I just saw any house I might maybe be able to afford just rise 20k…

    no, it won’t do that, because it’s only for newly-built houses, not bidding up the price of existing houses. The idea of it is to make it more economically-viable to build new houses that are small enough to be near-affordable for first-home buyers. That’s a genuinely good idea. Having said that, I don’t know if a $20,000 handout will make much difference.

    Comment by Can of Worms, Opened — August 25, 2014 @ 4:09 pm

  29. It is incredibly bad economics and a desperate bid to buy votes from a demographic that “team key” has consistently ignored and held in contempt.

    “team key” is also talking about further tax cuts (for who). Last time tax cuts were for the people who least needed them.

    Government agencies have already been slashed and burned.

    Assets have already been sold.

    Even more of the same so that what is left of government funded social infrastructure is destroyed to satisfy the ego of an Hawaian wall street trader (and his puppeteers).

    Nice way to blind side the reserve bank as well.

    key and the nats are genius.

    Comment by peterlepaysan — August 25, 2014 @ 7:49 pm

  30. Sacha yes fair enough – the RB policy has something to it. (Noting still it is a bit rubbish, all the governor gets to do is write a letter to the minister). The house building policy has nothing there at all.

    Comment by Swan — August 25, 2014 @ 8:51 pm

  31. Simon #19: Sounds awfully like the building regulations that Bill Ralston and David Seymour want to preserve.

    NZH – Bernard Hickey: Rich and comfortable must make way for young and poor

    TransportBlog – ACT Party spokespeople tragically born missing sense of irony

    Comment by Kumara Republic (@kumararepublic) — August 26, 2014 @ 10:19 am

  32. “…I see you are quoted in the Guardian Danyl…”

    That is pretty cool.

    Comment by Sanctuary — August 26, 2014 @ 1:30 pm

  33. Indeed. How does it feel to know that the first time you’re quoted in a venerable publication like the Guardian, your quote contains the word “fucking”?

    Comment by Phil — August 26, 2014 @ 3:08 pm

  34. “How does it feel to know that the first time you’re quoted in a venerable publication like the Guardian, your quote contains the word “fucking”?”

    Practically compulsory for The Guardian, I’d have thought.

    Comment by Dr Foster — August 27, 2014 @ 12:06 am

  35. CGT = where has this nasty piece-of-work tax ever had the desired effect? Britain? um…no. Australia? certainly not! It would have a one-off chilling effect on the value of existing properties,and that would affect Joe Average much MUCH more than the Investor Class. Those who are in the business of buying, developing (renovating) & then renting or selling houses already pay tax on any capital gain anyway. So, this CGT argument is a total red herring.

    Comment by Channeling Michael Cullen — August 27, 2014 @ 2:39 pm


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