sign up log in
Want to go ad-free? Find out how, here.

Finance Minister Bill English warns 'anti-sprawl' council planners to help boost supply or face blame for high NZ dollar and interest rates

Finance Minister Bill English warns 'anti-sprawl' council planners to help boost supply or face blame for high NZ dollar and interest rates

By Bernard Hickey

Finance Minister Bill English has ramped up his attacks on town planners who he said restricted the growth of housing supply, arguing they would be blamed if the latest surge in demand from housing migration led to another boom in house prices that inflated the exchange rate and interest rates.

"Demand for housing is rising and a turnaround in migration flows is likely to push demand even higher," English said in Parliamentary question time in answer to a question from fellow National MP David Bennett.

"Unfortunately, our planning rules and attitudes within councils and to some extent government have restricted the supply of new houses that can be built in response to this new demand," English said.

"Rapid increases in house prices are damaging for the economy because it puts pressure through a high exchange rate on our export sector," he said.

"That's a challenge for government -- because it puts pressure on government to fund the affordability gap for households that can't afford rising mortgages -- and it's unfair on individuals who are trying to enter the housing market," he said.

"This is why the Government has passed legislation -- opposed by Labour -- to streamline planning rules and is working with the Auckland and Christchurch Councils to significantly increase the supply of housing over the next two or three years so that low and middle income families can benefit from home ownership so we can avoid high interest rates and have a healthy export sector."

English pointed to a doubling of building consents since 2011 to their highest levels since 2007.

"But if we're going to avoid significant ongoing increases in house prices and therefore even higher interest rates, we need councils to make more positive decisions for more housing supply," he said.

Green Co-Leader Russel Norman then asked English if the 20% rise in electricity prices seen over the last five years and the 20% increase in house prices in Auckland was putting pressure on the Reserve Bank to increase interest rates.

"The rules around housing have been made by councils and it's important we work with councils so they understand that when they're making rules about a denser city or a more liveable city or are anti-urban sprawl those decisions impact the whole economy, and particularly they can have a damaging impact on our export sector, who council planners historically don't think about very much," English said in reply.

"We all have a job to control government spending, to make our electricity market more competitive, to work with councils for more housing supply. If we do our jobs then New Zealanders will enjoy lower interest rates than they otherwise would," he said.

Electricity market competition?

Norman then asked if the 20% rise in electricity prices was a sign of a competitive electricity market.

English replied that power prices had risen half as much as when Labour was in Government. He said part of the reason for the increase was to pay for an increase in investment in Transpower's distribution network "and now the effect of that investment is flowing through into prices."

"But the market is more competitive. The last thing someone needs is someone coming in, destroying a competitive market, putting us back 20 years to where I think Brazil is and us having to go and learn all the lessons again.

Norman then asked if the market was competitive when demand fell, but prices rose.

"In the long run, if demand keeps falling then prices will eventually come in line with that, but I can tell you the market is much better at sorting that out than that member ever would be if he became the Minister of Energy because his policy is all about Russel Norman setting the price. A better way to do it is people knocking on doors from electricity companies all over New Zealand offering big discounts," English said.

Norman then went on to ask Economic Development Minister Steven Joyce, standing in for Energy Minister Simon Bridges, about the NZ$360 per household rise in power prices seen since National was elected. Here is the full exchange.

"Thanks to the Government's reforms of 2010, the system is more competitive than it has ever been and substantial savings are available for consumers who choose to shop around," Joyce said.

Labour Energy Spokesman David Shearer then brandished letters from power retailers advising of price increases up to 14%, and challenged Joyce on whether this was too high.

"Nobody likes it when prices go up. That's a given, but the prices of electricity have gone up less than the actual real after tax wages of New Zealanders, which have gone up 23.4% since September 2008," Joyce said.

"Nobody likes it when prices go up and the way to deal with that is more competition and that is what this government is encouraging," he said, adding those sending their letters to Shearer should instead go to WhatsMyNumber.org.nz to look at switching.

We welcome your comments below. If you are not already registered, please register to comment.

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.

68 Comments

I do think central government should accept a teeny tiny smidgen of responsibility for the high New Zealand dollar, at least in comparison to the degree of responsibility that local government had.

Up
0

dh, Indeed, It's sort of good that Bill English is at least acknowledging the impact on exporters, import substituters, and NZ traders generally, of a high exchange rate. But the Nats are either deluding themselves, and to be fair most of the populace, by tefloning their own role in the exchange rate.

I know Hugh Pavletich thinks that if Auckland City suddently said you could build whatever you want from South Auckland to Hamilton, as long as you also pay for your own infrastructure in a MUD type model, that all would be well with the world and property prices would magically collapse, and that such a collapse would economically be fantastic.

The opening up of planning restrictions may be a good thing; but is relatively trivial in the exchange rate; and from where we are now, in my view, relatvely minor in impacting on property prices.

The government borrowing billions offshore has had a much bigger impact.

Selling the powercos offshore has had a bigger impact.

A Reserve Bank inflation only target while encouraging huge capital inflows and ignoring the exchange rate has been the single biggest cause of a worsening current account, astonishingly at the same time as our best terms of trade (nothing at all to with the government) in over 50 years.

Up
0

Stephen L what would happen if the first $100K of a new house, being the developer costs were not capitalised into the final price so was not part of the mortgage soucred from our foreign owned banks ocerseas?

 

What if it was borrowed locally from say the kiwiisaver scheme.

 

Further what if to manage the increased infrastructure needed for the building boom Councils could also borrow locally from say the kiwisaver scheme.

 

And what if this increased building could be done with elastic supply so existing housing did not increase in price. So no increase in foreign borrowing here either,

 

Would this benefit or not the current account and exchange rate?

Up
0

Brendon,

You and Hugh are better informed than I am on property development, land scarcity and the like, even if I think the Councils in practical terms have less flexibility than Hugh's in particular views would have them provide.

That is an aside. On funding I think your ideas above are getting close to the mark.

Simplistically to achieve the current account end, I do believe the Reserve Bank Act needs some changing, to have say inflation and the current account being dual objectives. In that way, if the government needed further funds, instead of borrowing from overseas, they could borrow from the Reserve Bank (as many other governments are doing) at least to a point where inflation was not beyond certain thresholds, or the exchange rate was within acceptable bands, or the current account was in balance.

They could similarly have a carrot and stick with the private banks, by insisting funding of their needs was locally funded until the same thresholds were met.

If then there was a lack of funding in terms of choking the economy, the RB could ensure sufficient funds at appropriate rates were available to the private banks to achieve the RB's targets- the carrot. Apart from the current account, such an approach would have some limiting effect on property bubbles as well.

The US, the UK, Japan, Switzerland, China, have all been following this model for the last few years. Even Australia are now aggressively talking down their currency, and, I suspect, trying to manage capital flows by jawboning at least. They, like us, have seen their best terms of trade ever squandered the last few years, such that they don't actually own a lot of their now diminished in value iron ore.

So if he really wanted to fix the current account, haranguing councils on scarce land and building consents would be very far down the list, and I am sure Bill English knows it; but it probably plays okay in an election year. He is pretending to do something about both issues, knowing full well he's not going to fix either, but blaming councils for the problems. Probably smart, if rather sad politics.

Up
0

Good one Stephen. I think the current account should be part of the Reserve Bank mandate - at the moment there is no institution responsible for it. Successive governments have ignored it as they focus on getting re-elected every three years. Someone needs to have this responsibility.

 

At the moment the discussion is pretty woolly when it comes to the current account, capital flows and the exchange rate. There is a vague idea that putting up interest rates puts up the exchange rate (sometimes it does and sometimes it doesn't) but that is about it. Good on Bill English for bringing it into the discussion.

 

As I see it he is quite right in that increased borrowing pushes up the exchange rate and thus destroys productive businesses. Increased borrowing can be for silly things like bidding up the price of each others houses (private borrowing) or for vote buying (government). In theory increased borrowing can be for useful stuff like better infrastructure (government) or new plant and equipment (businesses), but personally I think these things should really be funded by profits (businesses) and surpluses (governments). Obviously I am not a politician or a corporate man....

Up
0

I don't see the connection here, why if infrastucture is paid for via the developer (and recouped from purchaser) must the funds be borrowed from overseas, but if built in a MUD style arrangement the funds can be borrowed locally?

 

Sure a bank is just as able as a MUD to borrow locally and vice-versa.

Up
0

I don't see the connection here, why if infrastucture is paid for via the developer (and recouped from purchaser) must the funds be borrowed from overseas, but if built in a MUD style arrangement the funds can be borrowed locally?

 

Surely a bank is just as able as a MUD to borrow locally and vice-versa.

Up
0

Depends on what you mean on borrowed from kiwisaver.

So if for instance Govn "instructs" kiwisaver providers to "buy" local Govn debt then I have a huge issue with that, a) its not maximising returns and b) its a huge risk that can be defaulted on c) it removes freedom to choose.

In effect its just another tax.

You assume the loan is from overseas on the one hand and not on the other. I cant see that unless a MUD is locked to NZ investors only otherwise the ultimate source of the debt wouldnt change.

If you build more houses I dont undersatnd how there would be no more foreign borrowing?

Otherwise you have a lot of ifs....

So its moot really.

regards

 

Up
0

Hugh, Am sure building more houses would be a very good thing. Cheaper building costs would be a win. Less planning bureaucracy would no doubt help. Better transport options would help. Nor am I even trying to challenge your land scarcity thoughts, apart from being deeply sceptical whether we can easily get to where you would like us to be, from where we are now.

Hanging the current account deficit on Councils though is nonsense, and Bill English surely knows it. He's got plenty of other mirrors he should look at first.

Up
0

BE, yep....

regards

Up
0

Agreed, absolutely it is time to knock immigration on the head, at least for a considerable while

Up
0

How about a free ticket back home for any immigrants who have been here less than 10 years and are unemployed?  Voluntarily only of course.

Up
0

@Chris J , it will not work. Living in New Zealand is like living in a holiday resort when compared with the terrible environmnet , the daily grind , poverty , polution , crowded roads , dirty public transport , unhygienic food , expensive education and poor public healthcare of the average Asian city.

Nothing will get them to go back to where they came from .

NZ is just too comfortable  

Up
0

It will come I think.

But also you have to make owning a house here a resident only thing, plus you have to be paying NZ taxes.

So an ex-pat cant own a house....and a non-resident cant either.

regards

 

Up
0

@Steven , its unenforecable .

Firstly , non-resident Kiwis working as expats overseas have to submit returns of  their foreign earned income in NZ , check the IRD website for details

The expats already use trusts , and local Companies to house these investments.

And so do the non-resident investors use these structures in many cases .

Up
0

Finally Bill English has openly admitted to the  M word as a driving factor behind relentless house pirce increases in Auckland .

MIGRATION 

See the example of whats happened in the street where wil live in Greenhithe , Auckland , only 4 Kiwi families left in the whole street .

And these are very expnesive multi-acre , million dollar plus  homes

Things have changed , this is the new Status Quo

 

Up
0

ostrich

I would be interested in where you get that 95% from.

My understanding is that there is no official, hard data.

Only a "please will you answer these questions  " survey put to agents.

 

Up
0

The checking of NZ Residency status of the buyer, as part of the legal checks done by the lawyer before a house is sold.

Up
0

Yes I would demand that only NZers and tax paying ones at that can own NZ property.

regards

Up
0

Zany

 

You would be required to attach a copy of your passport or residency with your other paperwork so the lawyer can complete that requirement.

Yes.

 

I don't believe it is a few, I believe it is a lot bigger of a factor.

The powers don't want to try to find out the scale, as they don't want to be told the answer,

Mainly for fear of upsetting China, who already has these types of policies.

 

How weak is that ?

 

Up
0

Why is it such a big deal providing your passport for paperwork? My son's kindy required a birth certificate or passport for enrolment. Requires a photocopier, simple!

Up
0

Precisely Maybar.

Not difficult at all.

Some like to head off into extremes to pretend otherwise.

 

Of course employing Godwin's Law, then Zany's argument is already lost.

Up
0

A financial transaction involving the transfer of hundreds of thousands of dollars should be regulated.

 

I fully support the AML / CFT legislation inacted last year, and support it's powers being extended.

Up
0

Zanyzane

 

Thank you for posting your thoughts on the consequences of  the barcode and 666 .

The fact that you do so doesn't change my impression of your postings; however it does reinforce my previous thoughts on them.

 

You also owe me a new keyboard.

I spat coffee all over this one as I was reading your post.

 

Please.....keep them coming.

Up
0

ZZ it might be useful to you to actually go look at some real bar codes with your real eyes. The barcode ends are marked by thin bar, thin space, thin bar. The middle marker is thin space, thin bar, thin space, thin bar, thin space. The number six is thin space, thin bar, thin space, really fat bar. You can confirm this yourself just by going and looking at a few UPC bar codes. There is no possible way you can get the number 6 into the divider bars without chopping off the fat bar and adding extra thin bars. That is like saying all morse code contains the number 666 (if I only look at the dots, ignoring the dashes). Hopefully, as you read stuff in the future or talk to people who tell you that bar codes contain 666, you will actually remember this and use it to judge how accurate their other comments are likely to be.

Up
0

Factboy

 

I am afraid Zany's credibility with me was shot to shreads when he tried to argue that bank shareholders were at less risk of loss than depositors if a bank had to operate under OBR regulatations as per the RBNZ.

 

His post directed at you was, I agree, both insulting and irrational.

 

 

Up
0

Zanyzane

Why are you bringing race into this?

Are you not a migrant?

 

The requirement would be everyone has to provide proof when completing the legal documentation at purchase.

Race has nothing to do with it; residency has.

 

 

Up
0

No, I am not.

NZ citizens have the right to residency.

A NZ passport no matter where you live meets the requirement.

A foreign passport holder would require proof of residency status.

Up
0

Where did this statistic come from?

"1 million non resident New Zealanders that have access to cheap off shore capital that buy NZ property??"

 

Are you saying there at least 1 million NZ properties currently owned by NZ expats ?

 

Anyway, back to your question.

NZers have the right to buy NZ property. This will not change.

Non resident foreigners shouldn't. This IS the change.

 

I believe it is a problem now, and will only get worse in the next decade, and we need to start to clamp down on it now.

Up
0

... or we could just kick-ass all the brain impaired bureaucrats in local and central government who have policies in place which restrict property development , and who add totally unnecessary costs onto the construction process ...

 

And thereby remedy the supply side of the house supply/demand equation ....

Up
0

.....and barcode them for future reference........otherwise they'll turn up on a forgotten shelf somewhere and start all over again.

Up
0

... yes , they do have a knack of returning from the abyss and then poking their greedy little snouts into any available bureaucratic trough ...

 

Ain't that correct , Herr Helen !

Up
0

Zz...this is the statement by YOU. (my bolding)

"So what is the difference between a few thousand foreigners with access to cheap foreign capital that buy NZ property and the 1 million non resident New Zealanders that have access to cheap off shore capital that buy NZ property??"

 

It is YOU who mislead.

In the first example you use a suppossed foreign property owners (few thousand); and in the second you use as simply the total number of expats overseas ( 1 million)

 

Why did you distort this so blantently.

That is why I made fun of your 1 million, because if you use that figure you should ALSO use the entire foreigner population.

 

Or; if you use foreign owners you should also use expat owners.

This example of yours is as tinfoil hat nutter stuff as your 666 barcode nonsense.

Up
0

Your mention of NZers buying or not is a weak distraction.

It matters not, they are NZers, they are entitled...no matter where they live.

 

They will simply be asked to provide passport or other ID details when buying to prove they are NZers.

Not exactly arduous.

 

 

Up
0

Zz....here is part of your post.

"Are you advocating that we check your passport each time you decide you want to buy a property?

Will you be happy for a immigration thug to come knocking on your door in the middle of the night to check your passport?"

 

Your first question is easy to answer....Yes.

You then speared off into hyperbole even including Nazi references !

Then we had the 666 barcode entertainment.

Is there any wonder some question your credibility.

 

Are there restrictions placed on  foreigners buying residential property in China, or Thailand, or Hong Kong?

Why is that?

 

 

Up
0

@factboy , see my post in example of the street where we live below , you could be right , many high priced properties seem to be being sold to cash migrant buyers

Up
0

I think there is too much difference between the rise in household debt and the rise in house prices (compared to countries with bubbles in closed markets) to be anywhere near 95%. That said the census mesh block data is out in a few weeks, and some who had access to small area  (ideally matching the census mesh blocks) property data, who knew what they were doing could pretty definitively answer this one. Not beyond the level of people arguing on the internet to still disagree, but at least to the level of a solid case. For example REINZ, QV, or the banks would all have access to enough relevant data, but as I see it, it is not a question they are really interested in putting the effort into answering, or it is an answer they would rather keep quiet for commercial advantage of being the only ones that know it.

Up
0

I think most people using the shorthand of "immigration" are actually more concerned about foreign capital than foreign people (unless they imagine it is people on the refugee quota being successful bidders at million dollar auctions).

I just did go and look at Houston's demographics and I note that as a proportion of the total population Auckland has half again as many foreign born residents (about 30%) as Houston (about 20%). I think the citizenship information would be more interesting in this respect, but I don't think that 2013 census info is out for a couple more weeks.

Up
0

Banning non-resident foreigners from buying property here, and stopping NZ property being used for money laundering would be a good place to start.

Up
0

SPOT ON "SPOTTIE" !

Up
0

It wont help one bit to ban non -residents  ,because  the wealthy migrants LIVE HERE or the kids live here , and they run the factories back in Korea , etc.

See what has happened in the street where we live in my post below  

Up
0

If immigration is increasing our population faster than we can provide services and housing for then immigration is indeed THE problem. There must be a limit, growth is no longer a healthy choice. We need to get back to the drawing board and work out how we progress without "growth". Old fuddy thinking, no longer required, I am afraid Hugh, and before you start jumping up and down I am not far off pensionable age myself

Up
0

See my example below of the street where we live , migrants have changed the game

Up
0

"Demand for housing is rising and a turnaround in migration flows is likely to push demand even higher," English said in Parliamentary question time in answer to a question from fellow National MP David Bennett

Herein lies the problem and the solution.  The noise is denial and distraction.

Migration is causing a riple problem, housing just happends to be the most visble downside.

Up
0

Migrants have changed the game . Here's  proof that for ordinary  Kiwi's things have changed forever , and Its too late to reverse the trend.

Our street , Chester Avenue in Greenhithe has only 4 Kiwi families left ... IN THE WHOLE STREET .

Three out of the Four Kiwi  owners are wealthy retired baby boomers so those will be sold off soon enough when they get too old to maintain these huge properties

The rest are all migrnats , an Aussie ( A Doctor)  , a mix of Korean and Chinese Asians ( who all dont seem to work) and South Africans (an Accountant and another wealthy bloke and their respective wives and kids )  .

Almost all these migrants kids are at private schools such as Kristin or Pinehurst 

And its all happened very quickly , since 2009 /10

These are all million Dollar Plus homes on very large sections of around 2 acres each  (see Google maps satelite picture),

The wealthy South African bloke has subdivided his property into six big sections being sold for $600k each (No 41 Chester )

Its shows that John Keys immigration policy of attracting wealthy migrants has changed the game for everyone .

Theres a new breed of business savvy , aggressively money driven  wealthy migrants who are driving this change

 

Up
0

That's not suprising for a street right next to a motorway (where there's no 2 acres sites) . Kiwi's wanting a mini country lifestyle are unlikley to buy there. It's not the kiwi country dream when 1000's of commuters from sprawl development are thundering past every day. However for many migrants it would be idylic. 

 

Up
0

"... 1000's of commuters from sprawl development are thundering past every day. However for many migrants it would be idylic." 

 

And for Hugh?!

Up
0

Idyllic - and of course he would be an immigrant.

Up
0

Bob, suggest you visit the street , Its one of the best kept secrets in Auckland in secluded living due to the topography , the Motorway is far enough away , behind a plantation of trees  ( and above the plantation ) not to be a factor .

We are near the furthest end and of the cul de sac we dont hear it at all , although the no 10 to 25 houses probably do hear it

Up
0

I'm sure it's lovely, but if I was looking for a quiet acre the map view would be a put off. Must admit it's an area I try very hard not to be familiar with.

Up
0

*/

According to Longitudinal Immigration Survey: New Zealand (LisNZ) – Wave 1 the top reasons given for migrating to NZ are:
Relaxed pace of life or lifestyle
Climate or the clean, green environment
A better future for my children
Employment opportunity
Friendly people
Safety from crime
Join family members
Easy access to outdoor or sporting activities
Educational opportunities
Marry or live with a NZ spouse or partner
Political stability
Economic conditions
To study
Accompany family members
Other

......

Aspects Migrants liked most about NZ

Climate or natural beauty or clean and green
Friendly people or relaxed pace of life
Can achieve desired lifestyle
Safety from crime and violence
Recreation and leisure activities
Small population
Education system or educational opportunities
Having family here
Political stability and freedom or lack of corruption
Cultural diversity
Job opportunities
Good provision of services
Good housing
Lack of inter-racial, ethnic or religious tensions
Economic conditions
Other
None

http://www.stats.govt.nz/~/media/Statistics/Browse%20for%20stats/LISNZ/HOTPWave1/L-I-S-NZ-Tables-update.xls

 

Up
0

Yeah well small population aint going to stay small population if we keep thinking the way we are about immigration - for sure

Up
0
How to Fund City Growth? Value Capture

(National ruled this out)

http://www.ubmfuturecities.com/author.asp?section_id=423&doc_id=526623

Up
0

There is no 'funding of city growth'.

 

That's because nobody is valuing things properly. We seem to have been confused by our mentally transferring the 'value' of things to the proxy (money) then assuming that having more of the proxy, would always produce more of the desired items (land, house, whatever). We made it even worse than that, by failing to value real things, which we conveniently called 'externalities'.

 

Externalities were things like air quality, energy source limitations, unmitigated pollution - things which just happened to be able to kill us off, and which were in any case, subject to real limitations.

 

That delusion meant we were able to be stupid enough, to both vote for someone touting 'a return to natural growth', and 'sustainable economic growth' - both statements are falsehoods. Unattainable from a calculable point, and unsustainable even in the short term.

 

So now we have too many people globally, all chasing finite-and-dwindling resources. One being land - for both food and for housing. Hence dairy prices (milk per acre represents food demand impacting land demand) and hence land prices (centres all taken up, drive must be out or up, both cost more). Throw in a major portion of the planet's population wanting to get their 'wealth' into something tangible and out of the clutches of autocracy, And there we are.

 

Hugh's bubble  WILL burst, but not for the reasons he clings to. Sinkings beat deck-chair rearrangement every time, and those who blame the attendants (Councils) miss the obvious slope of the deck - which should be a clue.

Up
0

He is right about planners. Any engagment with Council planners and urban designers through the RC process makes the dwellings more expensive.

 

Up
0

So what is your alternative? Shall we just get rid of planners and engineers and let people build what they like, where they like? Like over a flood plain or overland flow path, and then let them wonder why they are stuck 1m deep in water and they're belongings swept away in a 1 in 100 year flood? And then people would be complaining again because the council hadn't done their job.

Up
0

We obviously need them. If one wants cheaper housing their ability to control projects needs to be limited to issues that matter. They should not write rules relating to issues that are also covered by the Building Code. Do I really need to pay Council planners to asess light levels under the RMA and then pay Council Building Inspectors to asess light levels again under the Building Act?

They should also butt out of the private realm. This is one area the market can control. Yes I need Council planners to make ensure the building interfaces with the public realm appropriately. No I don't need to pay council planners to asses the size of my wardrobe - developers will repsond to the market on that.

 

Up
0

Bob - you need to do some homework about money. What it is, what it can be exchanged for, how much there is of it, and why all things must get 'more expensive'.

 

Planners are by and large on the right track, but for an indirect reason ('cost' to Councils). The direct reason seems to escape them.

Up
0

I know your thing is that relationship between money and reality has gone awry. But I fail to see what that has to do with Council officers requiring more stuff than people neccessarily want.   

 

In the PAUP the proposed minium size for a dwelling is 30% bigger, so build cost will be higher. It has nothing to do with what money is - it's an arbitray rule that requires more resources/cost. You are happy with your house no? In Auckland you would likley not be allowed to build it like you did. In many zones you would have to make it more expensive to suit the aethetic sensibilities of Council Officers ("I won't be able to recommend approving consent until you make x, y, z changes because that's what I would like if it was my house"). That's expense added due to a Council officers choice, not because money is a proxy etc etc...

 

 In the Proposed Auckland Unitary Plan a new 'affordable housing" rule is proposed. This means that 90% of dwellings in a new development must be more expensive to subsidise an "affordable" 10%. So the overall average dwelling cost is the same - except now the project budget will have to also include legal and research fees to meet the rules requirements that the "affordable' units stay 'affordable' in perpetuity. So average price goes up because of a rule. Again nothing to do with money/proxy stuff - just a rule that adds to cost of housing (a particualry ironic one seeing as it has opposite effect to it's intention)

 

 

 

Up
0

Q - What does it mean when scientists say that Texas is headed for perpetual drought?

Climatologists who have studied both the history and the computer models on Texas rainfall have concluded that the state is headed for a very long period--possibly marked in hundreds of years--wherein rainfall continues to decrease, and more of the state becomes desert-like, a process known as desertification.

Q - What processes are contributing to Texas drought?

A - Texas is caught in the perfect storm of drought. Years of unregulated  expansion and sprawl, limitless groundwater pumping, and poor conservation management practices have set up the state for disaster. Now come the effects of climate change, with increased temperatures and evaporation rates, and the result is a disaster.

http://texasdroughtproject.org/droughtfacts.html

Up
0

Hugh I see beef prices are high because water is scarce. Julian Simon was right.

http://www.thedailybeast.com/articles/2014/03/04/america-s-axis-of-drought.html

Up
0

The government's bullying of councils to sell land is an example of their desire to sell off everything they possibly can. The government has made it possible for China(thru it's people) to buy NZ even though we cannot buy land there. The persistent effort by the government to free up more land for sale just shows it's desire to sell the country, lock stock and SOE's.

There selloffs make the figures look good for a few years, but long term we will have nothing but debt. Yes, the government's books are almost in the black(for current year only of course - total debt still there), but what of the huge current account deficit? They are working hard to massage the figures down, but it is still a huge problem. In the future will have the debt, but no assets to generate the income needed to service it, let alone repay it.

Our "rock star" economy is like the rock star who borrowed lots of money and then was unable to earn enough to pay it back - in the analogy we are obviously still in the borrowing stage.

 

Up
0

If the councils are bullied into making more land available, then land developers will make a lot of money. Surely we should be careful who we get information from. Those with strong links to those industries may have an interest in pushing a certain viewpoint?

Up
0

... if we wish for low energy use ( per capita ) in Auckland , we need to allow far denser population growth than at present ... $ billions are being wasted on tunnels and new motorways ... when the obvious answer is to house the residents closer to their work and play areas ...

Up
0

I guess my attitude could be summarised as:

NZ is a small country - it dosn't have much land.  The land it does have is highly productive agriculturally. That agriculture provides the vast bulk of our exports and is thus critical to our survival as a viable independant nation. Due to our chronic current account deficit we need to take exporting very seriously.

Thus we should be careful about taking that critical resource out of production and turning it into housing.

The difficulty for kiwis to afford housing has many causes - most are to do with how we run the country.

We have laws that inflate the price of houses:

-tax breaks for investors encourage investment in housing as a commodity instead of just as a place for people to live

- no effective capital gains tax or stamp duty also encourages investment rather than residence. This investment money pushes house prices up.

-allowing the sale of houses to non residents is just stupid from the countries perspective, though it will favour certain groups. What is the point of selling land to other countries which just raises house prices. aussie won' sell their land to non residents, why should we?

-allowing the sale of land to China again is stupid from the countrie's perspective. If they won't allow us to buy land in China it is not smart for us to sell land to them. It violates the principle of  reciprocity.

-these all contribute to housing price bubbles, which was the major cause of the recent GFC.

-however, rising house prices suits incumbent governements who benefit from the "money" created in house owners increasing equity. Many people utilise this which puts money into the economy in the short term. If prices fall, this money disappears and people can go bankrupt. If as in our case, the market is opened up freely to the world, then prices rise as overseas investors scoop up land at what to them is bargain basement prices. This prices kiwis out of the market. But politicians like it. As it puts money into peoples pockets they will vote for people that do it. The collateral damage from that is  that it becomes increasingly difficult for 1st time buyers to enter the market - it just becomes too expensive. 

- the solution suggested is to then take our productive farm land and turn it into housing. Developers like this as they make big profits from it. However it is bad for the country because it takes some of our best export resource out of production. And it won't help 1st time home buyers much as there are more international buyers out there than can be satisfied. I guess some land could be set side as cheap, but the profit motive means that it won't be much!

 

 

Up
0

Many here will agree with most of your points except for the one about the value of agricultural land.

 

Wealth in New Zealand depend less on commodities than it does on value add. And let us be very clear that value add happens in cities not the farmyard. It is about food technology and marketing. One effective tweak in packaging will earn this country more money than a fleet of Crafer farms being brought back up to full production.

 

After all if Fonterra cannot source enough raw milk in New Zealand it just goes and buys bits of Australia and Latin America. They lose no sleep over a new subdivision south of Papakura

Up
0

Indeed. It pays to remember that Denmark which is also known for agricultural exporting has eight times the population density of NZ. And who remembers that not that long ago Nokia was a forestry company like Rayonnier?

Up
0

Yes, there are a lot of sites. They are feeding of one another's misinformation without anyone looking at an actual barcode. You may be prepared to believe them rather than actually looking at a barcode, but since you are calling my credibility into question on this I invite anyone with the slightest interest to look at any barcode they like and think for themselves (though clearly for comparison purposes it would be helpful if it contained a six as I outlined earlier). Barcodes are  as human readable as Morse code.

I am concerned about privacy, and in terms of real threats to it the GCSB legislation was one of the worst acts the government has passed. Establishing ownership of property is an action in the public sphere, so has only a limited expectation of privacy anyway.

Up
0