HOT TOPICS:   House prices  |  KiwiSaver   | LVRs                                                RESOURCES:    Economic calendar   |   Cashback incentives

The comment stream

Reader poll

Migration policy linked to inflated housing prices, Government spending and low savings

Posted in KiwiSaver

By Amanda Morrall

High immigration to New Zealand has contributed to the country's national savings woes by increasing Government spending, business borrowing costs and pumping up house prices, according to a taskforce charged with finding solutions to rising foreign debt.

Among a raft of other recommendations aimed at boosting the country's flagging savings rate, both nationally and at a household level, the Savings Working Group (SWG) suggests Government give the matter of immigration some "serious consideration."

In its 160-page report to Finance Minister Bill English tabled this week in Wellington, the SWG suggests greater control of migration could be a means of reducing house prices and ramping up national savings.

"In a country with a relatively low national savings rate, rapid population growth will put sustained upward pressure on real interest rates and, in turn, the real exchange rate, making it harder to achieve the per capita income gains that people (and the government) aspire to,'' the report states.

Group member Andrew Coleman, an economics lecturer and consultant, said despite obvious sensitivities the issue warranted attention amid what is shaping up to be a national debate on how to deal with New Zealand's mounting foreign debt.

"We're not anti-immigration but we are saying it's something we need to look at," Colemand said. "If we are concerned about disruptive change caused by debt levels in response to natural outcomes of migration, then we want to make sure it is occurring at a rate that isn't getting us into trouble,'' he said.

In its report , the SWG theorises that if net immigration flows were held at 1980- levels, the country's net foreign liabilities could be 20% lower than its current rate of 85% debt to GDP. See the full report here.

"This is a critical difference in terms of vulnerability and growth and arises because new residents require new capital stock immediately, which must be paid for...increasing the need for foreign borrowing.''

The report goes on to blame higher levels of migration in the past two decades for pushing up house prices.

"Given the tight constraints applied to the supply of land for housing, less immigration might also have left New Zealand less exposed to the damaging house price booms experienced in the 1990s and the case decade.''

New Zealand's average net migration rate (including New Zealand-born citizens and non-New Zealand migrants) is reportedly higher than other OECD countries. The net number of non-New Zealand migrants has been rising strongly since 1992, following a shift in policy on migration.

The migration rate is New Zealand is also believed to be one of the most volatile in the world, second only to the Czech Republic.

Housing prices a casualty of rapid growth.

According to Coleman's research, a net immigration flow equal to 1% of the population (10 per 1,000 inhabitants) is associated with an approximately 10% jump in house prices. It was a trend that was evident for 50 years, he added.

Coleman was quick to point out that the immigration issue was but one of many ideas raised by the group (for more see Alex Tarrant's report) and said the group had not made any specific recommendations on the subject. Nevertheless, the report's authors wrote that limiting immigration swings could "lead to a substantial reduction in future house prices and housing debt."

New Zealand Manufacturers and Exporters Association CEO John Walley said he doubted whether financial pressures created by immigration outweighed the national good.

"I wonder whether in light of immigration, savings would be the major consideration. Immigration, particularly skill-based immigration means the real economy in New Zealand needs those skills. Whether you're pro or anti-savings, I would have thought the skill gaps are more pressing and important than any impact good or bad in regard to savings," Walley said.

New Zealand's change in immigration policy dates back to the early 1990s when the gap in productivity with other nations became pronounced between the years 1970 and 1990. Higher immigration was intended to fix the problem.

In its report, the SWG claims the move backfired.

"The policy choice that increased immigration, given the number of employers increasingly unable to pay First-World wages to the existing population and all the capital requirements that increasing populations involve - looks likely to have worked almost directly against the adjustment New Zealand needed to make and it might have been better off with a lower rate of net immigration.''

The Savings Working Group also underscored the need to remove tax distortions that heavily favoured property investment. Failing the adoption of capital tax, it suggested the only way to reduce the tax distortion on property prices would be "at the very least to reduce taxes on financial assets,'' which it identified as the "main investment alternative.''

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment in the box on the right or click on the "'Register" link at the bottom of the comments.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current Comment policy is here.

85 Comments

Ms Morrell would need to

Ms Morrell would need to explain why the fastest growing major urban markets in the English speaking world - Atlanta, Dallas Fort Worth and Houston did not inflate. And for that matter, most of the urban areas throughout middle North America, as the Annual Demographia Surveys clearly illustrate.

I illustrated within a recent interest co nz article "Respecting the median multiple housing measure", in comparing the Texas and Georgia USA open markets, what the influencing of financing was - and in how Atlanta seriously overbuilt market stock, but did not bubble with the lax lending.

Reputable international rersearch is very clear on these issues.

Hugh Pavletich

Co author - Annual Demographia International Housing Affordability Survey.

www.PerformanceUrbanPlanning.org

the state banking policy in

the state banking policy in Texas...

regards

...Hugh, the immigration is

...Hugh, the immigration is an increase in demand...your work about making land available is about increasing supply....both are equally relevant. If there's no increase in demand, then supply restrictions do not matter. But if there's rising demand (because of big spikes in immigration as Nz has) and supply restrictions, whammo we get into the rising prices and unaffordability. 

As usual the pointy head are

As usual the pointy head are months out of date with their information. Olly Newland was right as usual and said so last year. They could have save a lot of the Publics money by simply asking himin the first place.

extract:

"So much for the doomsayers who predicted a 30% crash in property prices, together with the collapse of civilisation as we know it.

It hasn't happened. And it won't happen, for several irrefutable reasons:

(1) Interest rates are low and will likely remain so for some time.

(2) Building raw material costs keep rising ... which puts a floor on second hand house prices.

(3) Building consents are at an all-time-low which creates an immediate shortage.

(4) GST has now been increased to $15% ... which now totals around $60,000 on the cost of the average new $400,000 home.

(5) Immigration and natural population increase requires at around 20,000 new homes to be built every year and this is not happening. (20,000 houses x 3 people each = 60,000 people which is what natural increase and immigration is approx)

link: http://www.empowereducation.com/Olly-column-Nov2010.bz

 

thats bullshit Fellow

thats bullshit

Fellow spruiker Tony Alexander said a year or two back that house prices would only drop if unemployment increased above 6%

Well today its 6.8%, so why wouldn't the same logic apply?

Oh yeah, we have a housing shortage that insulates against the rising unemployment. Yeah right.

Net migration is going to go south, as more kiwis are lured to Aussie. Lack of employment here, heaps there. Surprise surprise, kiwis flock to Aus, immigration drops, housing suply presures eased....

Big Aussie job expo coming to Auckland in February, 7000 registered apparently

Even Barfoots say that prices are down 2.6% on 2010

Yeah, we won't see 30% drops, but we will see steady downward adjustments to prices 

@ BigDaddy : You do realise

@ BigDaddy : You do realise that this report is calling for a reduction in immigration, don't you? ("....the SWG suggests greater control of migration could be a means of reducing house prices...").  That's at odds with Olly Newlands call for more houses. More houses woudn't be needed under this reports recommendations, and thus the prices of the oversupplied current market will fall. They will anyway, but this would just add fuel to the fire.

"So much for the doomsayers

"So much for the doomsayers who predicted a 30% crash in property prices, together with the collapse of civilisation as we know it."

Actually BD, since that claim was made (about 3 years ago by BH) they have come down (about 15% and more in some areas) and are continuing too. BH never put a time limit on this prediction.

Even Nelson where I live is SLOWLY going backwards. Building materials & GST is going up( your right) But that does not mean your house goes up in value! It means the opposite because less people can now afford to buy or build or sell which drives down prices.

Building consents down don't mean a shortage! It means the economy is screwed and building is now unaffordable

Interest Rates may be 'low" but the cost of living is going up and up and up so less people are borrowing.

You really don't think things through do you? Try connecting the FACT  dots, not the BS spin

 

Hugh She says this: "Given

Hugh

She says this:

"Given the tight constraints applied to the supply of land for housing, less immigration might also have left New Zealand less exposed to the damaging house price booms experienced in the 1990s and the case decade.'' 

So she has alluded to the fact that less constraints on housing supply would have meant immigration had less inflationary impact on house prices.

I believe there has been a conspiracy by the govt over the past 10-15 years to boost immigration and limit housing supply, in order to keep the NZ economy artificially  afloat by boosting house prices , and enhance government (central and local) revenue. The problem with that approach - as we are now witnessing - is that it was a short term "fix". The longer term consequences will be serious 

the govts of the last 15 years have a lot of answering to do. In time, Helen Clarke will be viewed very poorly, as will Key unless he stops grinning and giving us bullshit spin, but rather starts to perform  

Matt in Auck - many thanks

Matt in Auck - many thanks for pointing that out.

The "root of the problem" was the constraints on urban land supply and inappropriate infrastructure financing firing up the 2002 - 2007 housing bubble from below $NZ300 billion to about $640 billion stock value at the peak -conning Kiwis in to something in the order of an additional $60 - $80 billion of mortgage debt. They thought they were getting rich flicking houses to each other and the Clark / Cullen Government loved it for the bubble government revenues it generated.

Oh well - now in to the hangover phase - which will be speeded up as the Ausrtralian housing market tanks as well.

It seems the Tauranga Council people and the Bay of Plenty Times are taking these issues seriously, in currently figuring out ways to get new affordable housing built there. Lets hope there are serrious discussions on these issues going on with other Councils too.

Its far less painful to build your way out of a bubble than sit idly by (the John Key approach) and bust out of it.

Hugh Pavletich

www.PerformanceUrbanPlanning.org

Come on Hugh. You can do

Come on Hugh. You can do better than that. Do you have the numbers of dwellings in Auckland and Christchurch for 1990, 2000, 2005 and 2010. Let's have some concrete facts. First you will need to define the boundaries you are working within. Where does the Auckland and ChCh Urban areas begin and end. Then give us the Housing stock at each of those rest-points.

Hugh would you please confirm

Hugh would you please confirm this years Tauranga City rates increase.

My understanding is that it was proposed as 17.9% later reduced to 10%+/-.

Lower the entry price then tax the living daylights out of them....What part of that is affordable housing ?

Andrew T - I have no doubt

Andrew T - I have no doubt you are right.

My understanding is that there are at least 20 TLA's in extremely serious financial trouble. And thats not factoring in the Supreme Court North Shore Leaky Homes decision of 17 December 2011.

Bernard might like to consider pulling in a forensic accountant such as Larry Mitchell to give an overview of financial position of the TLA's.

It seems to me that this country is is far worse shape with respect to Central and Local Government finances than most realize. Prime Minister John Key and his Coalition Government team should have been on to all this following the 2008 election. As he told The Wall Street Journal he was going to do 7 March 2009.

2011 promises to be a year from hell for John Key. Deservedly so.

Hugh Pavletich

www.PerformanceUrbanPlanning.org

what have you got against

what have you got against John Key, Pav, me ole china plate ?

Here's the other side of the

Here's the other side of the simplistic (and repetitive) supply-side argument.

http://www.cp-dr.com/node/2868

One thing Cox didn’t consider was the possibility that higher housing prices might have something to do with higher incomes. It stands to reason that metros with higher incomes might have higher housing prices. As the average homebuyer knows, the question of how big a mortgage you can carry – and therefore how much you can pay for a house – is directly connected to how much money you make.

Geografree - what you are

Geografree - what you are staing above could be described as "entertainment economics"! The purpose of the Median Multiples as employed by the Demographia Surveys is to illustrate in the clearest possible terms, the relationship between house prices and incomes.

Its hard work after six years explaining and re explaing this simple stuff.

Hugh Pavletich

www.PerformanceUrbanPlanning.org

Hugh Its amazing how

Hugh

Its amazing how difficult it seems to get seemingly straightforward concepts understood!

Geografree - quite simply its the ratios that count. Yes the incomes are much higher in some of those centres but so are the house prices - hence the high ratios. 

The author of the link you have posted appears an ideological apologist for smart growth. He mixes and muddles averages and medians. Conclusion - he provides an unconvincing rebuttle 

Hugh Interested in your

Hugh

Interested in your comments re: Tauranga - what are they doing there? I thought they were committed to "Smart growth"

Matt

Iconoclast and Matt in

Iconoclast and Matt in Auckland

Firstly Iconoclast - I would never waste my time micro analysising bubble markets such as those in Australia and New Zealand. I covered this matter of "supply" within bubble markets in a March 2010 article "Housing Bubbles: Jumbo Mortgages = Jumbo Problems", which I suggest you read. I drew on an important Federal Reserve paper which illustrated that California has 357 residential units / 1000 population and Texas 384 / 1000. California with its 37 million people (Texas 25 million) has about a million less residential units than Texas, when adjusted for population.

In short - bubble markets are hugely destructive (read closely Michael Lewis "When Irish eyes are crying" Bernard has highlighted on 10 at 10 today), volatlie and irrational. I covered it also within an article "Housing Bubbles & Market Sense" and a more recent one on interest co nz "Respecting the Median Multiple".

The Median Multiple is the best one to follow and in trying to figure out, when the bubbles will top out. They had more high octane "finance fuel" in California for example, than they do in Australia and New Zealand. This years Dem Survey illustrated Sydney and Melbourne have exceeded the 9.0 Multiple, suggests to me things have topped out big time in Australia - and that its going to be a bloodbath there. Simply because the Multiples are so elevated. We will certainly feel it here as the tide runs out quickly in Australia.

Then - as a cross check, as I pointed out in the Sydney Morning Herald and The Age article yesterday (still highlighted in the Property Sections on the web) housing should not exceed 1.5 times GDP. Anything above that is bubble value that will vaporize at some stage. Suggest you do the sums!

Matt in Auck - The Tauranga Council is right on to these issues - as reported in the BoP Times recently. Mayor Crossby is very clear on this issue. I am aware the Council staff are doing a great deal of work currently and would expect public announcements following their next Council meeting. It would be most helpful if people from Tauranga could comment on this thread, to let us all know what exactly is going on.

Lets hope other Councils are doing the same. They need to.

Hugh Pavletich

www.PerformanceUrbanPlanning.org

Auckland's property Bubble

Auckland's property Bubble Market drove my wife & I away to Hamilton. We simply couldn't afford to buy in Auckland without getting up to our eyeballs in debt. In the end, even prices in Hamilton were too high. We found that we were just treading water, working to pay our bills & our savings weren't growing as they should have been considering our conservative spending habits. 

New Zealand lost two productive tax paying workers. My wife skill's are in short supply in New Zealand & I feel I did my bit as well. We moved to Australia where our incomes are higher & we are saving strongly.

While housing is very expensive here also, I feel Australia at least has the economy to somewhat justify the prices. New Zealand simply does not. In my view it's another Ireland waiting to happen.  

Iksteve - your comments are

Iksteve - your comments are most interesting, Its a great tragedy really how this unnecessary housing affordablity / housing bubble issue really does disrupt the lives of good people such as yourselves.

Its all just so unnecessary. Indeed it could fairly be described as a human tragedy.

It should be as easy going out to buy a house as it is buying a car. Its just the debt financing of the former will be longer term. Your house shouldnt cost you any more than 3 times your gross annual household income, with a mortgage load of 2.5 times.

Even less - if the housing construction industry had been allowed to become more productive - and not been severely degraded by the planners.

The Levitt example I quote often where after WW2 he supplied to SINGLE earner young families on $US3,800 a year new houses for $US8,000 - 2.1 times SINGLE EARNER income. I read somewhere recently that in todays dollars that would represent about $US77,000.

Just imagine if you or any other readers could buy a decent house for just 2 times your SINGLE EARNER income - and how much better off you would be.

The current boondoogle with housing is really a political welfare programme for the Banks - the only real winners from housing bubbles.

The public has been conned big time.

Hugh Pavletich

www.PerformanceUrbanPlanning.org

 

Exactly and what a fantastic

Exactly and what a fantastic example of the reality out there!

Not any more Matt it would

Not any more Matt it would appear. Party time is over.

The immigration policies

The immigration policies applied by successive govts are always intended to lead to positive election results. The aim is to pork activity to fake real growth and property is a winner in that game.

I expect National to turn to this bit of trickery once they realise their 6 part strategy is a 6 part failure because there is no bloody way they can create 170ooo new jobs in the export sector or any other sector for that matter. Labour will bulldoze the immigration gate wide open the day they get back to the pig trough...expect waves of unskilled migrants carrying pictures of Aunty Helen flooding through the gates.

The injection of the drug will have the full backing of the banks, the RE mob and the poodle media that advertises property. This economy will NEVER EVER be more than one big fat property speculative turd.

You can look forward and smell the BS on its way...all manner of drivel and spin aimed at getting silly Kiwi to believe more immigration will bring higher incomes and greater real GDP growth all leading to a wonderful future..just like the UK...a cess pit of misery and greater debts with almost no open spaces empty of power pylons..motorbloodyways...railways tracks...sprawling suburbs of shit that cover the land....

Look at Auckland today...is it a better place to raise a family than 50 years ago?...no it friggin well isn't.

"Look at Auckland today...is

"Look at Auckland today...is it a better place to raise a family than 50 years ago?...no it friggin well isn't."

Actually, I disagree - Auckland is a brilliant place to live now, and way better than it was 20 years ago (I wasn't living here 50 years ago). It scores very well in international livability surveys, and I can see why. It is way better than the other cities I have lived in for a decent period of time - Sydney, San Francisco, Seattle, middle England, and most of those also score very well in those surveys. Sure there are some frustrations, but the benefits far outweigh them.

The big worry here is that we have priced too many our families out of a decent chance to get started without having to make the family-or-house choice. If Auckland can fix that, it will make a great city even better. And that is simply down to making sensible public policy choices.

And, too many of those choices in the past ten years or so have been around protecting BB's housing equity. Appalling public policy, dressed up in the name of the environment, or heritage, or any passing fad.

The sooner those responsible for public policy understand affordable housing is a 'right' that the market should supply, the better. The mistake is accepting the BB myth that housing is an 'investment', one that needs to be protected with all sorts of artificial restrictions.

DAVID CHASTON SPOT ON: SORT

DAVID CHASTON SPOT ON: SORT HOUSING

The root cause of the problem is local authorities losing control of their costs and the ability to cope with normal growth. The unfortunate reality is that Prime Minister John Key and the Coalition Government STILL havent understood this..

The bigger the local authority, the worse the problem. There are two types of local government in this world - the small and the bad.

As these authorities get out of control, they understandably foster groups in the community that support their no growth approach - the Malthusian environmentalists on the left and the property protectionists on the right, who are always looking for political support to shut the competition out. In this regard, the Property Council of New Zealand leads on the protectionist front.

Note I said "Malthusian environmentalists" - not environmentalists generally. Indeed the Australian Greens, following the release of this years Demographia Survey came out slamming the high housing costs in that country. As did the Council for the Homeless and the Real Estate Institute of Australia. Where are the slow coaches on the New Zealand front in these areas? Why isnt the media here in New Zealand and Australia actually reporting what these three diverse groups said following the release of the Demographia Survey 24 January?

Local government will never be sorted in our Australasian major metros, until they start taking the "One City - Many Communities" approach - where control is at the local community centre level. The highest polling of each community should be the Chair and local City Councillor.

These issues were well covered within a paper I wrote March 2008 "Getting performance urban planning in place" - which I was led to believe soon after, that the National Party largely agreed with. They went to sleep when elected to office November 2008 though - thanks in large measure to the failed leaderrship by John Key. He is only a forex dealer after all from the now buried old "Mother Merrill" Merrill Lynch. He never quite cut the mustard to become a Banker. And Bankers are hardly the top of the pile in the commercial world !!!!

Key is well out of his depth.

I covered the shambles of Christchurch within an article "Christchurch: A bureaucratically buggered city" (highlighted article on my website) late last year. There are now in excess of 1,300 papershufflers in the new Fawlty Towers doing very little other than disrupting anyone who wants to do anything in this city. Christchurch essentially went to the dogs when amalgamation occurred. Everyone with half a brain knows that - and importantly - that it must be reversed as soon as possible.

What would be most helpful though, is if the media could examine the true state of local government finances in this country - particularly those in the metro areas. My understanding is that around 20 of them are in serious financial difficulties.

Hugh Pavletich

Co author - Annual Demographia International Housing Affordability Survey

www.PerformanceUrbanPlanning.org

Auckland a brilliant place to

Auckland a brilliant place to live, not very objective are we, not one international city included in you comparison. At least you content!!! :-)

Oops acidently gave the

Oops acidently gave the realestate agent the thumbs up.

Crikey, Wolly!  How much

Crikey, Wolly!  How much vinegar did you stick on your fish and chips?

I'm getting seriously worried I might be becoming a Wollyite. You got RSI or something?  You don't seem to be around as much these days.

Nah... just angry that the

Nah... just angry that the boy scouts in the Beehive are determined NZ become one of the piigs as soon as possible. 2011 will repeat 2010 which was a copy of 2009.....in a years time Bollard will repeat his blather that growth is not quite good enough yet but there are positive signs and if we all start thinking positively it will happen sometime...soon...in a wee while..

This thread foretells the future very well. Both National and Labour intend using immigration and a property splurge to mask the realities of an economy unbalanced and tottering along on speculation, dependent on yet more immigration with Bollard's endless injection of cheaper credit for longer.

The game has become a farce. The banks are setting the policies aimed at making dam sure property remains seriously unaffordable, to protect their fattter for longer profits while farming the households and business borrowers.

The FUND has been instructed to start injecting money into rural property to assist the banks in their effort to save their rural bubble. The covered bond scam that puts savers at greater risk is all about bubble protection.

Bloomberg has published garbage suggesting English is actively reducing govt splurging and shrinking the fiscal hole...when we here know bloody well he is doing the exact opposite. S&P are getting their instructions from the banks via the BIS and IMF and Fed..."don't rock the boat"....piss us off at your own cost!"

This economy is not and will not be put on a balanced growth track until the govt develops the guts to stop the tweak and fiddle they are wrapping up in a parcel of greater debt. 

There's other reasons why

There's other reasons why Wolly has RSI of the wrist and i don't mean blogging on here ?!!!

You remember this

You remember this Wolly?

Labour and National used this ploy back in the late 90's remember. They even sent representatives to the UK trying to get ex pats to come home and repair the damage of the early 90's Jenny Shipley was one, Helen Clark and I think Jim Anderton.

It Failed, so they changed the immigration legislation making it easier for Americans and English to come into the country with their stronger currencies at the time as the NZD was dire and buy property etc by the boot load IF you had enough USD's and Pounds in the bank.

Here's the key point. They also changed the legislation around 'non' residents owning private residential land.

Anyone else remember all this post 1998?

Hugh, check out the costs of

Hugh, check out the costs of a building consent in Tauranga compared to the Western Bay of Plenty.  Tauranga is a lot more expensive.  It has to be oneof the best examples of 'how not to plan a city'.  But then again that is exactly what happened - nobody who mattered were forward planners.

They are playing catchup there.  Now with the bypass from Paengaroa to Papamoa being closer to a reality, Tauranga and Western Bay have an opportunity to do some decent planning allowing for the bypass. That it probably won't be open for 5 years should give them some time.

 

Casual Observer - as I said

Casual Observer - as I said in an earlier comment - I have no doubt Tauranga Councils finances are in a shambes. And around 20 others as well I understand.

Time for the big clean out in local government. Read my article "Christchurch: A bureaucratically buggered city" in the highlighted section on my website.

Hugh Pavletich

www.PerformanceUrbanPlanning.org

David Chaston - you have to

David Chaston - you have to read the words Wolly used - he is absolutely correct - I would revise his time period down to 30 years ago - you are comparing Auckland to other places .. Wolly is not - he is comparing Auckland today to Auckland 30 or 50 years ago. The people I know who grew up there and were there 30 years ago are getting out or being pushed out.

If Auckland today is better than those other places, take our word for it, it was even better 30 years ago. And you missed it?

Close the doors to NZ and

Close the doors to NZ and build some more houses? 

All new homes built should have no GST (not a rebuild or demolish and rebuild but a new home on a new plot of land)

Planning applications should be free on new homes  (not a rebuild or demolish and rebuild but a new home on a new plot of land)

Build around good public transport corridors.

Have green area's between suburbs to create a village feel.

Capital gains tax on secondary homes, investment properties, baches....

This current and future government needs to get real on house prices.

 

Close the doors to NZ -

Close the doors to NZ - check
Build some more houses - why? - enough to ease current shortage

Get a load of this - haha haha haha
Have green area's between suburbs to create a village feel.

Green recreational spaces in Auckland are merely things the planners cannabalise

Do you know where Blandford Park is?
Do you know where Carlaw Park is?
Do you know where Newmarket Park is?
Do you know how much larger Ellerslie Race course was?
Do you know how much larger Akarana Golf course was?

An exam question for David Chaston
Do you know the answers without checking?

Do you know where Blandford

Do you know where Blandford Park is? No
Do you know where Carlaw Park is? Yes
Do you know where Newmarket Park is? Yes, never been, but heard of it.
Do you know how much larger Ellerslie Race course was? No 
Do you know how much larger Akarana Golf course was? No

 

Blandford Park Soccer fields

Blandford Park Soccer fields were at the bottom of Grafton Gully - Gone
Carlaw Park - Home of Rugby League - gone - taken over for property development
Newmarket Park - Home of Auckland Soccer - Gone - taken over for property development
Ellerslie Race course - a big chunk chopped of the northern end - Property Development
Akarana golf course - Practice fairway has gone + a large chunk of the eastern end - gone

Point 1: A bit drastic. The

Point 1: A bit drastic. The country needs workers in order to grow its economy. It needs to be a beacon for skilled individuals willing to work hard in the knowledge their taxes are being well spent, not squandered by a government that frankly is getting it from behind by the oppressed, downtrodden but well politically organised minority. Remember the millions that went missing from Te Wananga o Aotearoa? Has any one ever been brought before the courts & gone to jail for this?

Point 2,3,4,5 & 6 I agree with wholeheartedly. Totally common-sense. 

 

"The country needs workers in

"The country needs workers in order to grow its economy. It needs to be a beacon for skilled individuals willing to work hard"

Maybe but what is really going on with our recent immigration? A couple of examples:

Our local power lines and generation company (consumer owned trust) is undertaking an upgrade of their (our) network. In the past this would have been built and designed by local tradesmen and engineers that had been through inhouse apprenticeships and cadetships. Now they have imported a bunch of overseas crew at huge cost while the local school leavers languish on the dole or stack supermarket shelves or fly off to Oz.

"Our" oil and gas industry is one of the worst offenders. One outfit needed a dozen Lloyds or ABS certified welders. Rather than helping get our local guys certified, they went recruiting in Scotland, These are well into six figure jobs that we missed out on for the lack of any genuine effort from the employers.

It would be enlightening to see an indepth study of the impact of immigration on our economy and social cohesian, I suspect that a lot of immigrants are adding little to the economy - driving taxis or running $2 shops etc or displacing Kiwis from skilled work. At the same time increasing our imports consumption and driving up housing costs. To whose benefit? 

Kiwidave  - spot on with your

Kiwidave  - spot on with your observations.

This country is being run by 3 groups.

Firstly small, minority interest groups which the current government are pandering to in a big way.

Secondly, the very wealthy and powerful elite  (of which our beloved leader is a member of)

Thirdly, the bwanks .... they are the real winners in all of this

As far as the current government are concerned, they have done nothing to address any of the issues you have mentioned .... in fact the trouble with Key, is that he has just sat on his hands, smiled and done nothing ...... and at the end of the day the government are just puppets to the above 3 groups.

If I was Key, I would do some thing(s)  that may be not liked intially but would improve this situation we are in and in the end I would go down in history as a visionary for this country, even if I was thrown out of office at the end of this term ..... not as a former foriegn currency trader.

No wonder we are STUFFED.

 

 

 

 

 

.

.

Utter nonsense.  Actually

Utter nonsense.  Actually major BS!

and YOUR evidence is?

and YOUR evidence is?

At least we still have 1960's

At least we still have 1960's planning.  2 big carparks required for every house.   No section under 750sqm to be subdivided in Res 6A (750sqm can take a 525sqm dwelling - anything smaller than that is unacceptable).  Density low enough to make public transport unviable.  Minimum $25,000 'development contribution' on any new dwelling (rising to $50,000 in CBD) etc.  This protects our quality of life  and helps us to be more like one of those excellent cities like in Texas Mr Pavilvitch goes on about

http://wapedia.mobi/thumb/3ad1500/en/max/470/720/Suburbia_by_David_Shank...

 

interesting article on

interesting article on Chinese immigration:

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10703984

almost all of these eldelry Chinese immigrants will be living with their families here, placing no extra pressure on housing

Just shows how crude analysis of immigration figures in terms of impact on housing demand is highly misleading

 

So for every one young

So for every one young Chinese immigrant we also get 2 elderly Chinese parents who cannot speak English.  That seems like a really good immigration policy.  

And you end up with two

And you end up with two families in the one house. Higher purchasing power. A young pakeha/maori couple go to an auction to fulfill their dream of obtaining a house with a backyard for their children to play in and find they are competing against buyers who have double the buying power, with a different outlook/culture/requirements, who can and will accept 2 and 3 families in the one house. Probably a McMansion. It's a lay-down-misere.

News Management .. the power

News Management .. the power of the lobbyists .. that headline article disappeared off the front page of the NZ Herald within the hour .....

Last year, 14,570 approvals -

Last year, 14,570 approvals - 32 per cent of the total - were through the department's family migration categories.

32 percent = 4662 family migrants.  Out of this,  1264 were on parents policy. This appear small compared to the 13,306 migrants on other categories.

 

NZ has reciprocal

NZ has reciprocal arrangements with AU with regard to health costs and pensions etc. Does NZ have the same arrangements with China?

 

and when they have been here

and when they have been here 8? years they get national super. They can go back to China for x? months per year while still recieving it.

I don't think (net!)

I don't think (net!) immigration is a major factor. I would argue that the housing boom was because of easier access to credit, irrational exuberance, and speculation.

Re: Chinese

Re: Chinese immigration.

Chinese Govt is looking at capital gain tax to curb rapid property growth and speculations.  For those who want the same tax here - we will get it soon as we are slowly becoming another province of China.

Until you ascertain whether

Until you ascertain whether incomes can continue to be underwritten at the same or a bigger level, talk of 'median multiples' is for simple minds.

 

"Given the tight constraints

"Given the tight constraints applied to the supply of land for housing, less immigration might also have left New Zealand less exposed to the damaging house price booms experienced in the 1990s and the case decade.''

So you blame immigration rather than the "tight constraints applied to the supply of land for housing".  Right...

So that's immigration,

So that's immigration, land-supply, taxation, government spending, yes, yes, yes and yes to the influence of those part-causes, or as we might define them, "the usual suspects." BUT, what of RBNZ, monetary and prudential policy?

Has there been an issue with domestic savings being displaced with lower cost offshore funding?

Has there been an issue with the OCR regime not adequately (remotely ....)  moderating credit growth?   

I've still not read the full SWG report but I'm enjoying the reports on aspects of it and wonder if we will see one soon addressing the influence of RBNZ,  monetary and prudential policy on the subjects under consideration.

Do you think we will see such a report?

Amanda, Alex, Bernard, Gareth, David - I guess between you, you will be quite familiar with the SWG report, is there any mention of the issues of influence that I'm commenting on here?

Also in relation to displacement of domestic savings in bank funding, an experienced and independent economist recently told me this:  

"For the banks in NZ, their interest and repayments cash-flows come in the form of NZD, and their big outflows are USD and Euro.  That gives them a strong vested interest in stability or appreciation of the NZD, it makes them very unhappy about depreciation, and keeps them relaxed about the carry trade."

I wonder if it's true?

If so what influence would that situation have, on ..... well, what?

Cheers, Les.

www.mea.org.nz

 

Isn't the graph deceptive

Isn't the graph deceptive over cause and effect. Immigration is resonably constant. What happens is when the economy turns down (and house prices drop), there is an increase in people leaving, which cause the net migration to drop.

What this suggest is the faster we transfer people to Oz, the richer we will get!

Wow!! Just Wow!! If the

Wow!! Just Wow!!

If the government follows the recommendations of this report it will end NZ as any type of economic power. Xenophobia has NEVER grown an economy. NEVER! The next 50 years the countries that do well are the ones that attract the brain trust of the world. Countries around the world are actively lowering their immigration standards to attract high end talent. NZ is already suffering a brain drain this will only make it much worse. Sure housing prices will plummet but then again who is going to want to live in a third world country?

How about you step back from

How about you step back from the Xeno claim and face the 'reality' of NOW. Endless economic growth is a myth. You claim allowing more people here will solve all/most of our problems like it did the last 10 years when they did exactly what you want? increase skilled immigration?

Well tha policy has failed. All it's done is increase the cost of living for the local inhabitants, make owning a home and bringing up a family a financial nighmare, pushed up the number claiming benefits and allowed prime real estate  to now  ALL  be foriegn owned. We have become a nation of bankrupt tenants with a ridiculous cost of living to actual productive income ratio. We allowed ourselves to be robbed on a nationwide scale

Europe, esp Russia,

Europe, esp Russia, Japan and  China, are facing an aging population demographic which by 2020, will really start to hit home.  Interesting that USA is much more youthful thanks to immigration, and anyone who predicts the decline of USA has little appreciation of the looming demographic impacts.There is a leson for NZ to learn about the need for continued sustained immigration.

 

I'm not 100% sure that's

I'm not 100% sure that's right, 'me'.

re : USA

".. after a slow growth period, an eldery population expolsion between 2010 and 2030 is inevitable as the Baby Boomer generation reaches 65....the eldery population will reach 50 million by 2019...
 

It must be all those previous immigrants, getting old! That's the dilemna for all 'people importing' nations... 

http://www.census.gov/ipc/prod/97agewc.pdf     Page 6

Include the illegals and

Include the illegals and derive the real statistics addresses to some degree this skew.

Yup , add in the illegals ,

Yup , add in the illegals , and the USA  population doesn't risk the " aging " effect that is tipped to hurt many economies .......

...... So I am informed , Australia's  immigration policies  will assist it in avoiding the aging population syndrome , when compared to NZ . We're a soft touch for all the elderly next-of-kin of refugees and other immigrants .

There's also natural

There's also natural population growth "pumping up house prices", so along with a stopping migration policy there would also need to be a 1 child per family policy like China had. 

Our occupany rate is 2.35

Our occupany rate is 2.35 person per houshold, already! That's Mum, Dad ..and (part of !) one child?

And our birth rate is already below 2 children per woman. So I guess we're pretty much there!

Tony Alexander in his report

Tony Alexander in his report today referred to this dBH housing report out this week:

http://www.dbh.govt.nz/UserFiles/File/Publications/Sector/pdf/2009-2010-nz-housing-report.pdf

It does highlight the looming suppply problems.

But what he didn't mention in his brief analysis was that the report very clearly states at the outset that they considered "underlying" demand rather than "Effective" demand (what I call "realisable demand") , relative to supply. Its an important distinction

But it only partly detracts from what will be some growing supply / demand misbalances, which will become more apparent in the medium to long term

 

 

 

Think you will find that John

Think you will find that John Maudlin's Outside the Box E- letter of 13 January refers to UN Population Division projections that would substantiate Me's comments.

Western Europe's median age by 2030 projected to be 47, Japan's to be 53. It is presently 37 in USA and will only be 39 by 2030. 'Its working- age population will continue to grow through the 2020's and beyond, both because of its higher fertility rate and because of substantial net immigration, which America better assimilates than most other developed countries.. Unlike Europe, Japan and China, the USA will still have the youth and economic resources to play a major geopolitical role.  The real challenge facing America by the 2020's may not be so much its inability to lead the developed world as the inability of the other developed nations to lend much assistance.' 'China may be the first country to grow old before it grows rich.. China could careen towards social collapse.. imagine  workforce growth slowing to zero while tens of millions of elders sink into indigence without pensions, without health care, and without extended families to support them"

I think this says something!

 

Labour and National used this

Labour and National used this ploy back in the late 90's remember. They even sent representatives to the UK trying to get ex pats to come home and repair the damage of the early 90's Jenny Shipley was one, Helen Clark and I think Jim Anderton.

It Failed, so they changed the immigration legislation making it easier for Americans and English to come into the country with their stronger currencies at the time as the NZD was dire and buy property etc by the boot load IF you had enough USD's and Pounds in the bank.

Here's the key point. They also changed the legislation around 'non' residents owning private residential land.

Anyone else remember all this post 1998?

Mr Park showed up at the

Mr Park showed up at the auction for that lovely house you hoped to be able to afford.

They also changed the legislation around 'non' residents owning private residential land.

and should be held to account.

Basically you either have a

Basically you either have a higher than 2.1 births per woman rate or you have net gain of migration otherwise a country  will find itself in a downward spiral by 2020's- that John Maudlin analysis should be mandatory reading

 ""In a statement to the

 ""In a statement to the Sunday Star-Times, Coleman said: "Department of Labour research shows there is no strong link between immigration and house prices and migrants provide a net gain to the New Zealand economy of around $1.9 billion a year. If migration stopped today, the economy would contract by 10% over 10 years."

This is Coleman using a flawed conclusion by bureaucrats to allow the govt to carry on with the Labour policy of using immigration to fake growth.

http://www.stuff.co.nz/sunday-star-times/business/4619576/Government-policies-blamed-for-house-prices

If you include this govt position with the decision to continue the tax incentives for PIs and landlords....it is easy to see why the spin from the govt about rebalancing the economy is complete bullshit.

Still in doubt?....then factor in the RBNZ support for the banks to flog covered bonds to keep the flow of cheap credit flowing into property. Bollard gets his directions from the Beehive. They both do what they are told by the banks via the Fed and the BIS and the IMF and the ratings liars.

Deflation in property is happening everywhere now but for a few bubble suburbs in Auckland. The reasons go to peasant poverty and a recessionary spiral beyond Bollard's ability to stop. He will likely cut the ocr to have another go at porking activity. This move will only serve to compound the increases in imported prices and force a consumer shutdown.

Expect a very deliberate and orchestrated effort to convince people of the following lies:

  • Growth is now underway
  • Unemployment is falling
  • The fiscal deficit is shrinking
  • Now is the time to borrow and buy property
  • The economy is being rebalanced
  • The 6 part strategy is working very well.

Every western world country

Every western world country is facing a decline by 2020's unless the population demographic improves. End of story. Read the Maudlin analysis, it is most insightful

Hugh may want to wade in to

Hugh may want to wade in to the Arrowtown debate. These letters were in Mountain Scene:

p { margin-bottom: 0.21cm; }

It seems property developers again want to expand Arrowtown’s urban areas, with an appeal lodged with the Environment Court challenging the planning commisioners’ decisions. QLDC conducted rigourous consultationourt on these plan changes, with meetings with and submissions from hundreds of residents and ratepayers, before coming down with a well-balanced decision in the best interests of the district as a whole.

Now there’s another attack on the Arrowtown boundaryand a desire for urban growth elsewhere. Do we want housing over the whole Wakatipu basin?Once again action is needed. ….....

Dame Elizabeth Hanan

Arrowtown

 

I love Arrowtown the way it is... just maybe a bit bigger.

When QLDC denied the Arrowtown South Subdivision, did it have any insight into the effect the decision might have on first home buyers?..... blah, blah

jh - ha ha. I couldnt imagine

jh - ha ha. I couldnt imagine anything worse than getting involved with the nonsense that goes on in QLDC where all the beautiful people live - hell bent on keeping the great unwashed out of the place.

I just cant handle anything quite that boring!

Your kind offer is respectfully declined.

Hugh Pavletich

 

Arrowtown is still nice it

Arrowtown is still nice it has a villagey feel.

 

As for Queenstown

 

Up the road in Queenstown, nature is in full flight.

Queenstown advertises itself as "The Adventure Capital of the World," where you can bungy jump, heli-ski, jet-boat, or sky-dive. The confines of the modest town can no longer accommodate the throng of thrill-seekers. Soaring mountains still fringe the lake, but condos are creeping along the shore, a snake of traffic clogs the road into town, and Louis Vuitton has set up shop along with Global Culture, a clothes store.

If your idea of a holiday is a seething mass of cars and people, topped off by a cacophony of helicopters, Queenstown may be for you. Otherwise, it serves only as a warning of the perils of overdevelopment.

From The Boston Globe

http://www.boston.com/travel/articles/2004/11/07/new_zealand_at_a_crossr...

 

Mate the BG did well to find

Mate the BG did well to find Arrowtown's "village" in there amongst all the apartments and townhouses.

I think there must be a secret entrance to it hidden in one of the new malls.

They certainly went easy on Queenstown though.

If I'd written that piece I'd have been more truthful about the 'Slum By The Lake'!

But Hughe this is a test

But Hughe this is a test case. Hughe need to go in and bat for the developers. Stand on the verdants fields beneath Coronet peak and tell'm about Texas. Explain how flax and bark can break up a car park.

Hugh could explain that the

Hugh could explain that the mountains, the escarpment and the river, are figments of the imagination.

"There are no geometric limits to infinite expansion" kind of thing.

 

Jonathan Coleman 3

Jonathan Coleman

3 November, 2009

Research confirms immigration's contribution to New Zealand

"What the Department of Labour's International Migration Settlement and Employment Dynamics (IMSED) research shows us is that, without immigration the outlook is bleak," says Dr Coleman.

"Without current levels of inward migration, both our population base and economy would shrink dramatically. By 2021, our population would drop by 9.6 per cent and our GDP would drop by 11.3 percent. There would be a 10.9 percent drop in the available labour force and the export sector would be savaged with volumes dropping by 12.9 percent.

"What this research tells us is that immigration contributes significantly to every New Zealander's per capita income," says Dr Coleman.

"It's clear that government policy has to continue the focus on economic gains from immigration.

"Significant achievements in the Government's first year have included new Business Migration policies to reduce red tape and make it easier for a wider range of business migrants to invest in New Zealand, as well as improvements to the Recognised Seasonal Employer Policy.

http://www.beehive.govt.nz/release/research-confirms-immigration039s-con...

The prevoius minister poo-hooed reseach from one an economist which claimed that the benefits off immigration were "overstated".

How we subsidise

How we subsidise developers:

"

Carter An Ally. National’s Local Govt spokesman, John Carter, appears to be on side with Banks saying Auckland’s infrastructure needs to be improved urgently. Carter says, “If we are serious about Auckland being a world-class city that competes with Sydney, Melbourne and Brisbane, then it needs to have high-class regional infrastructure which makes the most effective use of regional assets.” He is optimistic National’s promised watering down of the RMA will loosen the brakes on development and speed the development and construction of major transport projects such as motorway extensions.

http://www.nztransport-logistics.co.nz/home/free-articles/heat-on-nats-o...