Finance Minister Grant Robertson says there's much work to do in the housing market, and he remains unenthusiastic about the RBNZ getting a debt-to-income ratio tool

By Jason Walls

Finance Minister Grant Robertson says he would need to see a “significant increase” in the supply of housing, particularly affordable housing, before the Government could contemplate declaring “mission accomplished” on housing. 

Robertson notes some recent cooling in the Auckland housing market. On Wednesday, sales figures from Harcourts revealed average Auckland house prices had dropped to their lowest levels since April 2016.

But Robertson told interest.co.nz there are still concerns in other parts of the country, Wellington for example, where house prices are still increasing strongly.

“We have always said that moderate, sustained house price growth is likely for a period of time, rather than the big spike that we have seen. We’re by no means mission accomplished on housing, we’re still way behind in terms of supply.”

He says the fundamental issues that drove the housing crisis, such as property speculation and constrained supply, are still in play.

"We will keep an eye on the market - but I think what we saw in the housing crisis was a set of underlying issues, which is what we're focused on resolving."

So, what would mission accomplished look like?

“Making sure homeownership rates are improving, it would be making sure you get rid of homelessness, it would be improving the rental stock and the quality of that.”

Still not keen on DTI

Meanwhile, Robertson’s views on adding a debt-to-income (DTI) ratio tool to the Reserve Bank’s macro-prudential toolkit have not changed, despite recommendations from Grant Spencer.

In a speech on Tuesday, the outgoing Acting Reserve Bank Governor said this type of debt servicing ratio should be given serious consideration in the upcoming review of the Reserve Bank Act.

But Robertson says his personal view has not changed since before the election on the issue.

“I have concerns about the impact of DTI ratios on first home buyers – that remains my personal view.”

Despite this, he says this issue will be assessed in the upcoming Reserve Bank Act review and he is waiting to see what comes out of that.

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 or click on the "Register" link below a 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.

150 Comments

up
14

they don't want the DTI tool as majority of buyers will not be able to afford the 'affordable' houses they are going to build...

you're right on the money there!

Actually, just building a large amount of dwellings would have a very significant impact on affordability:
https://www.bloomberg.com/view/articles/2018-03-14/california-affordable...

they would Rick.. hopefully they will..

Im emphasizing the fact that if there is a concern that FHB's cant afford a 600k house, how the fricken heck did the National party claim that there was no housing crisis...

You cannot blame National ............... just look at doing a subdivision , a water connection in Auckland alone is $20k , then a driveway to council specs is up to $100k and the DC Levy is just a rort , so I wont go there

Central government does have the power to override local government when problems are deemed to be really bad. Look at Canterbury and Kaipara over recent years. 

well said GV

Australia seem to have no problems with affordable housing

http://www.thornhillpark.com.au/house-and-land

Still waiting for democracy down here in Christchurch

If "problems are ... really bad" then fix it for everyone's sake

Lets Q this, are you really saying there has been a huge rort by councils for 9+ years?

9 years when National had office and hence the power to fix such a rort with legislation but did nothing, yet its not National's fault?

really?

Do you not think if this was really the case of such rorts being the truth National wouldnt have acted and made itself huge kudos and electable?

"Driveway up to council specs". Which is from memory 75mm with re-enforce and 100mm concrete without? I had a drive done some years back and looked at doing it myself and a builder offered to do it at a price making me not bother, but he did offer to use "lighter steel" which didnt meet the council's / national spec, I declined. 25 years later, not a crack in it.

"DC rort", this seems to be your baseless opinion, but be my guest and prove otherwise.

to a degree in the overall market -- but if the section is 250K - Consent / developer costs are another 50K - if you are lucky - and at $3300 a sq meter - a 100m 3 bed house is another 330K - these new houses are $630K to build even at break even -

so if we are talking about affordable homes - and looking at 500K or less - either the council needs to release land at 100K a section - or the government/taxpayer is subsiding the build by the same amount - and then .... the owner sells a couple of years later and effectively keeps the 150K subsidy ?

got to sort either the land costs - or the duopoly on materials then we can get somewhere

Yeah - agree we absolutely need to address that. However, it's still possible for house prices to go down below the cost of what they were built for should supply exceed demand and current pricing be unrelated to fundamentals at the same time.

yes - its technically possible - but only if someone will build at a loss / subsidy - no developer / private individual will build a home that is worth less than their costs - and no Bank will lend FHB"S the money to build under those circumstances -

In effect if prices do drop further - New builds will also drop through the floor - in real life i work in healthcare - and we have consent to build 8 three bedroom flats in a SHA - taken over a year to get there thanks to council delays - RFI's for information already provided and ridiculous extra requests - like cctv footage of existing council storm drains - on council land not the build site -

We just did the maths excercise - based on value of land / QS costs / costs to date - adn then potential income from the units - and there is no financial justification to build anymore - as the costs in consenting and building materials/labour have increased significantly in the last 18 months

We are now undecided about going ahead - as although we can live with a very small ROI - given that we will be providing a vital social housing service to those with Mental Illness - we also have to justify this to the bank - who are rightly saying why would you do this for little or no return ?

If this is repeated across a number of developers - and in truth i cant see why it would not be given the minimum land and build costs are pretty fixed - new builds will soon start to slow and consents be left unacted upon - further pressuring the sector - and increasing homelessness -

Prefabs may help - but even there costs have increased as the material and labour costs also increase - so maybe part of the solution - but only a small part - Cheaper Land is probably the biggest single factor that Government/Councils could control - but seemingly wont

Sure you have been working on the new homes for your clients for a while but surely you have to understand this Government does not want anyone apart from HNZ to build rental properties.
From what I can see they do not even want social housing providers to expand their portfolio either.

Perhaps so, but there is nothing in place to stop people from building or owning a tiny (moveable) house on their existing section as a way out of paying high rents. Where there is a will there is a way.

Not possible by the council as the land is mostly privately owned. So even if the council relaxes its boundary by say 10km the price will be held up by the land bankers anyway.

Good article thanks. I think the reason that Government's have been slow to address this pattern is that when house prices fall there is significant political pressure to 'turn off the tap'. This will be one of the biggest challenges that faces Labour - that there will be calls that "why is the Government pushing more houses when developers are losing money on new developments' (commonly because they paid too much for the land).

For generations 'affordable housing' has not been new small housing but 'do it up' larger older homes. Therefore all increases in supply improve the options for first home buyers.

For generations, affordable housing was partly through government builds - a bunch of small three bedroom weatherboard houses came from. But yeah, all increases in supply will be useful.

And those weatherboard homes still don't leak!

Well, the one I grew up in leaked air to the extent the curtains would puff back and forth on a windy night - with the windows closed! :-)

But yeah, it was a good house that didn't have the issues of shoddiness that have plagued many a more recent effort.

I guess you could say that the fact that air was flowing was a good thing, because the air certainly doesn't flow in these leaky homes and that has been part of the cause. Air from outside is "dry" air and helps to combat mould and condensation build up. This is why I still open every window daily to air and dry out the house. The golden rule is, air out and ventilate, then heat and repeat. I recently renovated my house built in 1988 and when we gutted the house and replaced the pinex ceilings and walls with new gib and insualated the walls and ceiling with pink batts, I was dreading the moment in case I discovered black mould and external framing that needed to be replaced. I was instead gobsmacked at the near pristine condition of it after nearly 30 years! All we had to do, was check the electrical wiring which was still near perfect, insulate the walls and ceiling and bang up some new gib over a few days. I now have a home that is near brand new and it is up to todays standard which is warm and dry without any black mould whatsoever.

Rick, reading the linked article, in regards to Tokyo, I think quantity constructed was as much a consequence of changes to planning/density regulations...
simply building many expensive houses does not help affordability, ( unless someone is subsidising them )

In other words, Tokyo prevented a housing shortage by building more and building up. Interestingly, it appears that this change was instigated by Japan’s national government, which since the 1980s has assumed more authority over development rules. The national government revised regulations to allow more density. Combined with Japan’s famously simple zoning regulations, this resulted in a nation full of dense yet pleasant cities that offer decent, affordable living space. A key part of the equation, of course, is Japan’s efficient, convenient networks of public transportation.

http://urbankchoze.blogspot.co.nz/2014/04/japanese-zoning.html

If Councils and planning authorities got out of the way,... I'm thinking the younger generation would build alot more tiny houses as away of avoiding the "debt burden".

Agree, we need to significantly reduce regulation and free people to build what they want on their land. Intensification will be required. No one is trying to turn Nelson Street back into suburban houses and land, or Manhattan island back into rolling meadows with homesteads. Similarly, we need to free up Kiwis to intensify.

There is some more information on Tokyo and Japan affordable housing here.
https://medium.com/land-buildings-identity-and-values/what-is-the-secret...

Tokyo/Yokohama is amazing -the biggest metropolitan area in the world, twenty times the population of Auckland, but with house prices half the price of Auckland.

Problem is here is that we have too many people who want to have their cake and eat it too....

I want affordable housing for my children....but I'm also a NIMBY or property investor... so make it affordable elsewhere because I've got a portfolio that is doing nicely thank you very much...

Problem summarised in a nut shell.

Please don't forget about my right to a pretty view of a volcano

Please don't forget about my right to a pretty view of a volcano

Some things of interest in there however Japan has had de-inflation since 1990 with house prices overall dropping between 60-90% over the last 28 years. With a aging population low birth rates and no immigration it already has 2.5 million empty houses. It's population is on a massive decline. By any study over the next 50 years it is on track to loose 40 million people. Hope this is of interest

Tokyo's population has and continues to grow at a similar rate to Western cities such as London and San Francisco

Basic science dictates that Japan's population will significantly decrease because they are still dealing with the Fukushima fallout and there is still no solution to this.

up
15

Just stop the population growth and the housing problem will fix itself.
You cant blame councils unless you want your rates to double. Councils don't print money to build infrastructure.
We need to stop the high immigration. Cherry pick the top 10,000 applicants.
We give away our infrastructure and services every time an immigrant steps off the plane.

Hard to say. In terms of new builds there is a minimum price to construct (Land+Materials+Labour+Red Tape),

In NZ this base cost is simply to high. My guess is no matter how many houses we build, we are still going to have an affordability issue unless we can lower those four inputs,

In theory it may see a lowering of existing housing stock. But again, I think that will remain stable, as the existing stock usually has numerous advantages over new developments:
- Superior Location,
- Existing Infrastructure (Transport, Shops, School, Medical, etc...), and
- "character"

up
11

So...not affordable at all. Labours legacy on the olositio benches next time will be lies lies and more ....lies.

Probably not a suprise to most. Almost feel sorry for those that voted for them.

I pointed this out during the election ............. endlessly saying their policy was a wishlist ,.

The plebeian chattering classes on this forum went beserk at me at my remarks when I pointed put there was no way in hell that any Government could do what Labour were promising .

And Labour either knew it and lied which is bad enough , or they were just plain clueless ............. which is worse.

The naive and gullible electorate got swept up in Jacinda-mania ............... fools the lot of them .

Why was the alternative better?

Wow, the single statement “Making sure home ownership rates are improving” shows a pretty massive difference in policy between this government and the last. In contrast, I recall some glib comment by John Key that foreign investment in housing and farms was okay because nobody was going to physically take the houses and farms out of New Zealand. I don't recall John Key ever being worried about home ownership rates.

I do recall him being worried about it, but the most famous example was while he was still in opposition and campaigning for power: http://www.scoop.co.nz/stories/PA0708/S00336.htm

We also want to ensure that every young New Zealander who works hard and is disciplined about saving can expect to own their own home and thereby have a real stake in the economic future of this country.

Today, I want to talk in some depth about the declining rates of home ownership in New Zealand.

It has relevance to you, not only as an industry that interacts closely with the building and construction sector more generally, and as the mums and dads of a generation coping with this issue, but also because you are key voices in the debate about resource management law and compliance costs in this country.

It’s those aspects of the home affordability crisis that I want to concentrate on today.
But first, let’s take a minute to look at the enormity of this problem.

It wasn’t so long ago, in the 1990s, in fact, that New Zealand had a high level of home ownership compared to other countries. Not so anymore. We now have what has been described as the second worst housing affordability problem in the world.

Make no mistake; this problem has got worse in recent years. Home ownership declined by 5% between the 2001 and 2006 census to just 62.7%. To put that into context, home ownership for the preceding five years had been stable at 67.4%.

If you dig down into those numbers a little deeper, some worrying facts emerge. The share of homes owned by people aged 20 to 40 dropped significantly between 2001 and 2006. Young people – the people we most want to prevent joining the great Kiwi brain-drain – are really struggling to get onto the property ladder.

Yep, all the govt has to do is keep throwing this speech back at Judith and any argument she has can be negated quite easily..

"Then, from 1999 to 2008, prices rose 113 per cent under the last Labour-led government. Through the most recent [National]government's term, there was 69 per cent growth in house prices nationwide."
https://www.stuff.co.nz/business/property/98475352/labour-governments-ha...

What's the argument? That was them solving the housing crisis as advertised?

Percentages eh...how do they work? I see in one of the housing auctions recently had a 100% success rate! The market is back on the boil! Only three houses, but that's neither here nor there.

There is no argument. Just highlighting the naivety of punters who think Labour have a better track record. Both parties own hundreds of houses between and have no inclination whatsoever to lower house prices/their retirement scheme.

Jacinda was whining about not being able to afford a house six years ago and now owns two of them. Is this someone who wants to see house prices fall?
http://www.noted.co.nz/archive/listener-nz-2012/jacinda-ardern-one-to-wa...

up
16

I don't think they had a better track record. That's why many of us voted for National - Key's promises to take action on important issues. The problem was his campaign rhetoric was followed by inaction and denial that any crisis existed. Now National's lost power, they're back to agreeing there's a housing crisis.

Labour has a chance now to take action. It's up to them to act where the two previous governments kicked the can down the road for others to deal with, and enjoyed the enrichment it brought them as individuals at the same time.

Sure, I largely agree with your comment.However, I think given the sheer number of houses owned by MP's you are going to end up disappointed.

Exactly Rick - I used to vote National but when I realised they'd rather live in denial to the previous promises they'd made (for the benefit of short term self survival), the writing was on the wall for them. Unfortunately that it took a term too long to get rid of them and the smiling assassin....

up
20

Doesn't it just make your blood boil that this turd got in, did nothing but ramp property to the moon then sold out to the Chinese for 16 million dollars of personal profit.

I mean shit, idiots rag on Labour for not doing enough after a few months, but this guy is Satan personified.

up
21

Ah yes,JK,man of the people...you have to stand back and be amazed at what he achieved...FOR HIMSELF...knighthood,20 mill for his house, Obama his best mate,untarnished image in the eyes of the Nats...then a quick hospital pass to Bill and he's off to sun himself in Hawaii..text book merchant banker / trader.

I find it amusing how many pale, stale, male boomers put JK on some high horse like he's a hero of their generation. He's such a good bloke, the kind of guy you could have a beer with.....A story which I've never quite understood. JK wouldn't want to have a beer with you unless there was some underlying benefit to him and his ego...So I realised we have many pale, stale, males who like to be taken advantage of and they honour that behaviour? What a great guy....Look at how good he is at acting in self interest....perhaps it sums up a generation of men in this country?

He gives validity to their behaviours

Do you mean Sir John Key? How many knighthoods do you have IO? Yep if someone gets knighted they probably have done some pretty amazing things

You really have drunk a lot of the kool-aid.

Let's give it 10 years then look back on the John Key era and see if any of the shine remains.

Indeed Yvil, I love a good kowtow to richly deserved honorifics - like Sir Phillip Green - ran off with BHS pensions, Sir Fred Goodwin banker responsible for the destruction of The Royal Bank of Scotland, Sir James Crosby former CEO of HBS, and let's not forget Sir Robert Mugabe. Certainly done some pretty amazing things in their time....

FYI all of those were involved in dubious financial dealings and more, and have either been stripped of their titles or threatened with that action. He who giveth taketh away, I give it 5 years before there's motions to strip JK of his title.

Who wants a queens knighthood shes not even from NZ. Knighthoods are a joke. Rock stars get knighthoods for taking drugs and sleeping around.

Knighthoods are for people in the public eye not for people who actually do any good. There are so many people out there that do good and will never get knighthoods or any type of recognition. Look at Phillip Green what a loser and a scum bag, he has a knighthood.

Most people like John Key only do whats good for John Key, they are the DGZ and TM2 of the world, hey look at me and how great I am people. But look at James Gavet and his family, these are people to be proud of, it shows knighthoods, are for privileged people and not for people who do any good at of the generosity of their heart. People like Gavet would not want a knighthood, they just want to help people out and not advertise it.

"The 27-year-old was a reluctant interviewee for this story. "It's not about me," he says. "My family collectively have -always been -givers, doing random acts of kindness in our community. It's nothing new to us but, if I can use my profile and it is going to push the cause, then that's great. I'm trying to inspire people, not just through sport."

http://www.nzherald.co.nz/sport/news/article.cfm?c_id=4&objectid=11654938

McCaw vs Key in terms of character and leadership. One is humble....thanks but no thanks....the other is ego driven....yes please how does tomorrow sound?

Thats exactly it, MCaw is humble, didnt want the fuss.

That "Sir" means absolutely nothing, Jimmy Saville had one FFS!

up
16

Jeez...after reading that speech in full,one can only conclude that the last 9 years were an abject failure.

2rickstrauss ............ precisely , I agree with John Key's remarks " disciplined about saving " and you rightly pointed out HE WAS STILL IN OPPOSITION .

Two telling points :-

He inherited the problem from Ms Clarke

and

Kiwi youngsters are terribly ill-discilpined about saving , my adult kids have almost ZERO saving unlike their Confucian - following counterparts who save 30 % of their pay packet .

My adult kids are far too loose with money , Laittes at $5 a pop , lunch at $20 a day , $50 a head on a Sunday Brunch to get rid of Saturday night $200 excesses , flights to Sydney or Melbourne to " see a show " and stay over in a fancy hotel.

I was outraged when my son bought a new double cab 4X4 Toyota Hilux with which has cost him more than we as a famaily have spent on all the cars we bought in the past 15 years COMBINED .

If they carry on like this they will never own a home ............. EVER

up
12

Did you not see the article in the Herald about the amount of time it would take the average couple of save a deposit in Auckland for a house?

It's one of the psychology tests where you see how long a person will continue to chase a carrot that is dangled in front of them, but then keeps moving futher away. To get closer, you must whip yourself 5 times a day, observe the carrot get further away, then wake up and whip youself once again the next day...repeat 365 days of the year....and don't you dear break or spend any money to ease the pain of the whipping....

Then while you get whipped, you listen to older people enjoying their carrots and boasting about how easy they are to obtain....and they don't just have one carrot, they have many and because they have a longer stick, they take more carrots than they need because they're greedy...

It's one of the psychology tests where you see how long a person will continue to chase a carrot that is dangled in front of them, but then keeps moving futher away. To get closer, you must whip yourself 5 times a day, observe the carrot get further away, then wake up and whip youself once again the next day...repeat 365 days of the year....and don't you dear break or spend any money to ease the pain of the whipping....

Nice. We understand how govts use nudging theory to influence the behavior of the sheeple. This is different, but a good example of how bubble economics can have negative implications too. This is why you see so much talk about young people and the 'avo on toast' stories about the younger generations inability to make sacrifices to be a fully functioning member of society. The problem is that if young people do self flagellate daily, this DOES affect the consumer economy. There is a high level of ignorance among Kev and Darlene (and their social circles) about how the NZ economy is reliant on the consumer economy and how asset prices have fed into that.

relax, they plan on using their inheritance

Typical kids like mine too they still don't understand to get ahead there are sacrifices to made instant gratification seems to rule. Personally I feel unless they commit to being sensible with their money they certainly don't deserve mine. Perhaps I'm like a lot of baby boomers I would rather spend it myself rather than let them fly first class later !

up
10

Gees, what'd you guys teach them about finances? That money grows on houses trees? Just kidding.

There was an article a while back that pointed out on the whole that young people are saving more than previous generations did at the same age.

up
12

What is this term everyone uses - 'to get ahead'....

What are people trying 'to get ahead' of? Their fellow citizens? Is this a game of one upsmanship? By trying to get ahead of each other all we appear to be doing is making life hell for each other.....why not do the opposite and try to not 'get ahead' of your fellow citizens and try to help each other out?

Housing market for example.....everyone's trying 'to get ahead' of one another so we try to outbid each other at auctions meaning the ultimately everyon has bigger mortgages, meaning they have more stress in their lives, meaning they have to do jobs they perhaps don't want to do in order to pay the mortgage, they can't afford to lose that job because they might lose the house because they can't pay the mortgage. How stupid is that? The only winner of 'trying to get ahead' are the banks....

Conclusion: humans that try 'to get ahead' are retards, unless they do it in a manner that contributes to society and makes life easier for others.....not harder.....speculating on housing isn't that path.

Two thumbs up for this comment.

I also have been thinking about that term lately. I think it was a National MP who used the term in an interview, standing for people being able to work hard and get ahead. Normally I would pass it off as rhetoric, but I stopped to think about what was meant by that. It is really a different form of the "greed is good" mentality.

Ultimately people who feel the need 'to get ahead' are insecure about the future and are motivated by the fear of missing out (FOMO).

So lately, we've had a bunch of fearful people (I'll call them FOMO's for now, a close relative of Darklords, often one and the same thing) rushing around trying to out do their fellow New Zealand citizens in order 'to get ahead'. Well I say, the FOMO's can go get stuffed. Instead of getting ahead, go and be a good citizen and make life better for those in your society, not more difficult and stressful. Building rental portfolios is for FOMO's and Darklords..., they really are the evils of society..

the joneses - what those statements and those groups of people are doing, is creating a dog eat dog culture within New Zealand's society....if you think about how our culture has changed the last 15 years I'd say its for the worse.. this property bubble has created a dog eat dog culture...the dogs with aggressive natures are loving it (you see it within the comments on this site)...those with better temperament can see the harm its doing.

hahahaha I LOVE THIS COMMENT! Yeah who is trying to get one over their pathetic neighbour? Not me, that is for sure. I love my life. No debt, not mortgage payments, no jealousy of others because it is a game for fools and only the fools are fleeced of their hard earned money while they all try to out-do each other! hehe Some good advice to those who have been hoodwinked, get off this debt trap and make a life for yourself that YOU want. Sure it takes hard work and some skills, but aim to be totally independant and free from the clutches of any government in control of your income. The more reliant you are on the governments handouts (landlords and beneficiaries) via subsidies, the more likely you are to be hit hard when they change their policies and the gravy train stops because it just becomes too expensive for a government to keep paying money out! If you are a beneficiary or a landlord, I would be seriously worried right now. There are two sides to the financial ledger and one will cancel the other out.

IO Getting ahead is simply not wasting one's hard earned wages so one can enjoy a life with a roof over your head and plan a family, it is not a race against anyone else. Or to put it another way being careful with your income helps to get ahead of being poor - personal responsibilty !

"He inherited the problem from Ms Clarke "

And he did

(A) Made housing more affordable.
(B) Lit a fire, adding more wood to the flames, injected oxygen, threw on gasoline and created a housing fire that caught flames and have now gone stratospheric that it is nigh on impossible for FHB to buy a house.
(C) Did nothing.

And you say your kids dont save. Back in my day a 10% deposit was $10,000, now the deposit is a cost of the house. Wages have not increased dramatically in NZ to justify this. Also crates were $15, and a coffee was 40c, not $11 a small bottle $5 a coffee.

We were better off back then, no million dollar debts.

I blame the parents.

The statement “Making sure home ownership rates are improving” is not a policy, as you claim, it's wish. Very big difference

Increasing supply though good but will never be able to meet demand fully so while trying to raise supply it is important to control demand specially speculative side as national has made entire NZ a big casino specially for their foreign rich friends by covering with job creation excuse

Even if you create big casinos jobs will be created but are they good for the community. From National party percpective - Yes but for an average Kiwi.....

Ban on foreign buyer is one step in the right direction as is used by many to park their unaccounted money specially from countries where democracy does not exist and punishment is heavey

While the property market corrects there is likely to be strong fluctuations in property prices. Especially as speculative moods change.

Rental prices should in theory be less volatile and reflect the underlying supply and demand pressures for residential space.

Grant Robertson should have the goal that enough housing space is supplied so the property market goes through a corrective period where wage increases are greater than rent increases.

I would like to hear more from Grant Robertson on how the pressures from unaffordable housing has created barriers to the labour market, affected productivity and misallocated resources. Yale Law Professor David Schleicher explains the general case argument here.
https://medium.com/land-buildings-identity-and-values/why-is-it-hard-to-...

In the specific NZ case, a lot of the shortages and wage increase demands from teachers and nurses etc is a result of high house prices/rents, which have risen faster than wage growth. It would be good to get some indication from Grant on where he stands on the continuum of treating the underlying cause -housing pressures with implications for expensive infrastructure requests versus treating the symptoms -stressed out teachers/nurses working with labour market shortages demanding expensive wage increases?

The rich are not happy
The News Media have been busy trumpeting the views of the rich about the Ban of Foreigners buying NZ property. There has been a rush of high-powered-notables advocating against the ban on foreign buyers, including Eion Edgar, Spark, Fletchers, Eaqub, Blain and others,

NZ Initiative, Ryman Healthcare, NZEIR, US Billionaire Rick Kayne, Rodney Dickens, Mike Hosking.
Ryman, Metlifecare and Fletchers are foreign companies

New Ground (Eaqub)
http://www.newground.co.nz/

8 March 2018
Anne Gibson
Again boosts the negative case on behalf of the wealthy and the powerful
Quotes NZ Initiative
http://www.nzherald.co.nz/personal-finance/news/article.cfm?c_id=12&obje...
http://www.nzherald.co.nz/personal-finance/news/article.cfm?c_id=12&obje...

13 March 2018
Bloomberg - The rich are not happy
https://www.bloomberg.com/news/articles/2018-03-12/the-rich-aren-t-happy...

Have yet to see any reporting on the positive case from the POV of the peons

NZ in 2020: "We want devote considerable resources to preserving, protecting and enhancing this land."

NZ in 2030: "Sir, this 50,000 acre station with its mansions, golf courses, hunting safari, private touring roads and air strips are all private property. You need to leave."

The rich might not be happy, but it's popular with people currently locked out of home ownership. All around the world on social media (especially Canada, UK, Australia and some parts of US) the reaction has been "why can't we have a ban too".

Rich aren't happy.. lol. Type "Kohimarama auction" into youtube and check out the first hit. Now imagine that repeated tens of thousands of times all over Auckland. The would-be upper middle class in Auckland has been eviscerated. The poor and working class have been eviscerated. Quite an accomplishment by the previous government.

Just had coffee with a local agent. He has sold more than 25 houses in postcode 1071 in the last 10 months, 7 in the last two weeks. He took me through each property sold and rattled off who was buying/selling and their motivations.

2 were sold to offshore investors, one sight unseen
1 was sold to a local investor
1 was sold for house removal and redevelopment
The rest were moving due to changed needs e.g. divorce, empty nesters downsizing, moving into Glendowie school zone, moving away from bad influences in the West for children.
A few FHBers buying at $1,300,000

In other words, the normal reasons people sell. Interestingly, it’s divorcees crowding out FHB. They will go the last $ to get the house they want.

How many bodies of other agents trying to encroach on his turf has he had to bury in his back yard during that time? I imagine most agents would love to be in the areas that are currently ticking along okay.

I was surprised at his success as most new agents struggle. He’s a business person who has the energy, eq and personality to get the deal done. Success breeds success I guess as these are generally people moving within the Bays so his name is out there.

@fatpat ........... you are simply wrong .

You blame the "previuos government " for the housing problem .

Hansard will show you that John key spoke on the issue WHILE HE WAS IN OPPOSITION .

The seeds of this crisis were sown my Helen Clarke .

The other issue is that my kids will never own their own homes because they are so ill -disciplined with money .

I really wish I knew where we went wrong , but they never saw my wife and I buy Laittes every day at$5 a pop , take-out lunches every day at $15 a pop , flash new cars and flying to Sydney to see a show .

New cars at $70k under the age of 30 on the drip ........... WTF ?

Little wonder they are broke with no savings .

You can't have it both ways Boatman.

John Key had 9 years to make a change, instead he did nothing and sold up his house for a huge profit to an offshore Chinese buyer at the end of his term.

up
11

In The words of Jim Rickards, "The greatest episode of capital flight in human history" (from China) came during the National governments term. Auckland's house prices hyperinflated during that time while we remained the only country in the OECD not to have any foreign buyer restrictions. Yes I do blame the National government for the ensuing wealth transfer!

Foreign Investment

The Financial Elites are coming out in force

"The Government wants to pass a new law banning foreigners from buying our residential and lifestyle properties but a top Queenstown businessman has given four examples of how rich overseas people have enhanced New Zealand to the tune of hundreds of millions of dollars. Sir Eion Edgar told Parliament's Finance and Expenditure Select Committee that the foreign buyer ban would "be detrimental to New Zealand's international reputation and greatly restrict overseas parties contributing to the benefit of New Zealand"

Queenstown Rich Lister Sir Eion Edger trumpets on behalf of 4 American groups who have ploughed money into the Queenstown area. He has advocated to Parliament's Finance and Expenditure Select Committee for continued open access to the offshore wealthy. What is not disclosed is the structure of the principal owning vehicles within which the ownership is contained. Edgar provides names of who the ultimate benefial owners are, but no details of how the ownership is structured.

A New Zealand registered company or partnership or Trust can be set up as the vehicles to own properties while the beneficial owners can be American domiciled corporations or trusts. Edgar does not disclose the Tax Residency of the investors

A wealthy Foreign person with Foreign Tax Residency can purchase a sensitive property for $100 million, spend $50 million enhancing the value of the property, but the new enhanced value is owned by the foreign interest. NZ gains nothing under those circumstances. The improved value is immediately exported to the foreign beneficial owners

Anne Gibson
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=1200...

Forget draining the swamp....hopefully this Govt will drain the trough that the landed gentry have their snouts in...

Yep, good call. Deal to those pricks who own farms and businesses delivering NZ strong economic growth and unprecedentedly high levels of tax revenue. Disincentivise them, confiscate the goose. What could possibly go wrong?

up
11

Hmmm,don't remember mentioning them...a good business is always welcome in NZ,but people have had enough of selling of quality pieces of land for some foreigner to add to his portfolio of holiday homes he uses once a year.
With a name like middleman,one would expect you are happy to sell anything as long as you clip the ticket along the way..

'Landed gentry' is usually understood to be a reference to farmers. Your snipe at my contributor name is well wide of the mark.

@middleman ..... dont worry the plebeian chattering classes are getting abusive out of sheer frustration , they regard everyone who owns a home , including a factory worker with a leaky shack in Glenfield as the Landed Gentry .

They must just get a life .

Nothing will change ............... home ownership has never been easy and will never be easy , it requires hard work , discipline , planning , careful budgeting , and a 30 year commitment , its cannot be bought on Laittes , holidays, and fun .

up
19

Boatie, I don't resent people owning houses, I resent people buying multiple houses they can't afford, then renting them out, and then offsetting their tax obligations because they can't afford the houses that they bought. I resent overseas buyers who have no intention of residing in NZ, buying houses and pumping up prices, then renting that stock back or even worse just leaving it because they can.

I'm assuming your kids are doing alright, semi-decent salary, taking into account inflation as good or better than where you were at the same stage in life? You mentioned in horror that your property is now worth $2m, it's no doubt in a fairly decent part of town on a nice bit of land, forgive me if I'm putting words into your mouth here but I'm sure you mentioned something along the lines of housing being unaffordable and that needs remedying.

When you bought your house aged whatever and whatever your salary was, allowing for wage inflation, would you be in a position to buy the house that you live in at this moment in time? Would you be able to stump up $2m for your house? Would you even be able to buy it at the height of your earning powers?

Therein lies the FHB dilemma, constant saving, paying tax on those savings, paying rent, bills etc etc.. whilst that house you wanted moves away faster than you can save, at what point do you think f@ck it, I've got nothing to show for my savings, I'm going on holiday or I'm going to buy a car, something to give me a memory or an asset (albeit depreciating).

Agreed,no problem with owning a home...but when homes are turned into a globally traded commodity at the expense of locals trying to house their family,that's when it is unfair.With tax advantages etc,the specuvestor was always in the box seat over the FHB.I own my home,worth an embarrassing amount,I would be happy for it to have stayed the same value for the last 10 years,but if you have multiple properties on interest only then obviously you want rampant rises...

up
13

He mentions quality of drinking water. Well Grant, then why is there a Chinese company in Christchurch taking billions of litres from the same depth as our city water risking our water quality?

You could say this was National's making but you're in power now Labour-NZF. So what are you going to do about this. You can't blame Jiang Yang anymore.

We are some African tier country where resources are to be pillaged for a few pocket change bribes. I've seen Jellyfish with more spine than our MPs.

I would suggest calling or writing to your MPs. They won't feel pressured to act unless Kiwis are pressuring them to act.

Concerning case: http://www.newshub.co.nz/home/new-zealand/2018/03/chinese-company-drills...

Unfortunately it does reinforce that foreign owners (from anywhere) don't have as much a stake in the long-term well-being of the local land or population as local owner operators. Even though farmers are criticised for their pollution (as are city folk, rightly so), at least most (of both groups) are concerned about what they leave to next generations.

Interesting that in this patsy piece Roberston makes no mention of Kiwibuild. With the program ,on the face of it, well behind schedule, Twyford will need to have been making serious behind the scenes progress on getting the necessary infrastructure in place.

I'm not sure that anything the current govt do would meet your satisfaction, I'm pretty one-eyed when it comes to politics, but I will take my hat off to Crusher going after multi-national tax avoidance. If companies paid their fair share the tax burden on the common man would be less, Google, Facebook, Mobil the list goes on. I'd also introduce a "Render unto Caesar" tax on religions -
Matthew 22:21 Jesus said "Render to Caesar the things that are Caesar's; and to God the things that are God's."

Soldiname. And here's a wee quote for thou:

"To compel a man to furnish contributions of money for the propagation of
opinions which he disbelieves and abhors is sinful and tyrannical."
Thomas Jefferson

That's a lovely quote, that relates to corporation/religion tax exactly how?

I raise your Jefferson with a Franklin and a Maddison

Benjamin Franklin "'In this world nothing can be said to be certain, except death and taxes."

James Maddison "The power of taxing people and their property is essential to the very existence of government."

And a cheeky Roosevelt for good measure - "Taxes, after all, are dues that we pay for the privileges of membership in an organized society."

I'm not entirely sure why we're doing this as the US is a basket case, but there we go.

Jefferson was a wealthy land owner - as were most of the founding fathers. While many of their sentiments were excellent, you can't underestimate how much of their original setting up of things and their original thinking on taxation etc. was in their own interest.

Heck, at the time democracy was only extended to those who had land, not the plebs who might misuse such power in a way that might disadvantage the few at the top.

On a side note, Curnow's biography of Alexander Hamilton is really worth the read - on both Hamilton and Jefferson.

They've got Grant Robertson well and truly bluffed

I remember Roger Douglas delivering his uppercuts with calm aplomb, no mis-steps, no back-downs. A lot of screaming elites had met their match - Robertson is cowed

Do recall, common taters, that GR is in the midst of wrangling what promises to be an Interesting May budget. The walk-backs have already started to happen: KiwiBuild down to a few tens of thousands, land costs and materials duopoly untouched, immigration running hot and strong, new taxes via the TWG, and so on. GR has a lot on his plate, and the hot mess that is Awkland Hoosing won't be helping his state of mind.

Compassion is called for....

Cancelling Wairewa prison and Little sparing thousands of dangerous criminals the trauma of imprisonment will give GR some fiscal flexibility though.

Grant Robertson, a very very successful businessman who is running the country’s finances!
Yep, we are stuffed for the next 3years if they stay in that long!
Where is the stuff about growing the country?
Can’t comment about that as we need a working group for that as the coalition haven’t got any ideas about that yet, we will just have to see what the working group has to say about that!
Then we will do nothing except talk shite!

Can you advise the successful businesses Amy Adams has run...she is a lawyer who married a wealthy farmer...

The only time Grant Robertson has had any financial responsibility was as treasurer of the University Students Union .......... Urban Legend is that the Students Union cheques regularly bounced, so if its true , he could not even get that right .

And now we have given this fool the countrry's chequebook ........... GOD HELP US

up
10

TM2 shop bleating shite!!!..

The current coalition is trying to unwind the damage caused by 9 years of neglect... don't have a myopic view

There was no damage caused at all.
The country was in A very sound state prior to election and now look what we have got.
Houses in Auckland are dear because people want to live there as it is popular for some reason
The coalition are doing zilch to improve NZ

really, no damage at all!!! obviously you're admitting that you're dumb enough to not notice

Could you let me know how what a sound state for a country looks like in your eyes? - economically we're exactly the same (at the moment), which unless I'm mistaken is what you're getting at.

I'm hoping I'll see some change, but am prepared to wait, as I know things don't happen overnight, if I don't see change or progress towards change by the end of this Govt's term, I'll certainly re-evaluate my thinking. The changes I expect to see are improvements in health, education, housing, and an economy that is less reliant upon selling houses to each other. I'm hearing the right noises, and fortunately National set an incredibly low bar for my expectations, so no doubt I'll end up semi-content.

I'm with you Solidname,well put...
by Solidname | Thu, 15/03/2018 - 12:59
up2
Could you let me know how what a sound state for a country looks like in your eyes? - economically we're exactly the same (at the moment), which unless I'm mistaken is what you're getting at.

I'm hoping I'll see some change, but am prepared to wait, as I know things don't happen overnight, if I don't see change or progress towards change by the end of this Govt's term, I'll certainly re-evaluate my thinking. The changes I expect to see are improvements in health, education, housing, and an economy that is less reliant upon selling houses to each other. I'm hearing the right noises, and fortunately National set an incredibly low bar for my expectations, so no doubt I'll end up semi-content.

up
10

Ironically, when they look to take action - e.g. the Foreign Buyer Ban - all the bleating changes to "They need to not take action quickly, they need a working group!"

Exactly...too fast,too slow...lets face it,nothing they do will be right in some eyes..

Successful businessman ........... my backside !

Was Bill English a successful businessman.....must have missed something?

But he was okay as finance minister?

No but Bill English received international recognition when after the GFC , we were the only OECD country with positive GDP Growth .

Any link to the international recognition you are talking about Boatman?

Seems like we went back to positive GDP growth in 2010, the same year as USA - the home of the GFC.

Australia never went negative, I would expect their finance minister would have been more famous with "international recognition", but cant remember who that was at the time.

Yay for Boatman's Hosking-esque rants.

we were the only OECD country with positive GDP Growth
Did Australia not exist waaaay back then?

Hey, I'm Mike Hoskins, don't forget about it, you said so

Bill English is one of the best finance ministers that the western world has ever known. He is highly regarded abroad - and rightly so.

I hope he gets a knighthood as he certainly deserves it.

TTP

My point was that some people are saying that you need to be a successful business person before you could ever be a successful Finance Minister....obviously this isn't the case using Bill as an example - so why the bad press with Grant Robertson.....'he's not qualified, he's not a successful business person'. Well neither was BE...

Yes but Bill did have some intelligence.

And you will justify this opinion how or it's simply your opinion because you're a National supporter through and through and if John or Bill said jump you would say 'how high'? Be careful when you drink the kool-aid.

THE MAN 2, will Bill get his intelligence back?

A break from the Nat culture might do the trick

.

lol, "mission accomplished" ..... reminds me with G W Bush 15 years ago !

What a shallow term to use for such a serious problem where the "mission" can never be "accomplished" as long as we grow ....

GR impresses no one with his smirks and mysterious replies ... he will waste our money on stupid things and will never accomplish any mission ... expect more BS to come out as we go forward - lots of talk and tears , little action, .... and after 6 months in power, a hopeless case!

Eco Bird - smirks and mysterious replies aren't impressive, but smiling assasins are with replies that almost always consist of 'at the end of the day' which was code for 'i'm making BS up right now because I don't have a factual answer for this question'.

'i'm making BS up right now because I don't have a factual answer for this question'.
Geez, that sounds more like PT nowadays -- what a coincidence !
thank you.

WATCHING THIS CLIP MADE ME LAUGH .

So we can expect a budget with a difference .............. the first one will be bleak , but the 2019 budget will be full of fluffy , feel good bullshit, telling us how lucky we are , how good we have it , how warm and snug we are , and how full our tummies are .

We have seen this before in the 1970's ............. it was called PRAVDA .

Basically Roberston will embark on an ill-disguised electioneering campaign for the 2020 election presented to you as a fact in the 2019 budget that under Labour your life has gone from terrible to amazing .

We know what you are up to Billy Bunter , dont try and get too clever

I quite enjoyed it, they're trying something completely new in terms of measuring success, so need to look at the impact of various policies on that. I get that, as a businessman you very rarely jump at something going yeah that'll work, it needs research so the risks are mitigated, or to even make a go/no go decision - there will probably be things that come up that you hadn't considered, but in your strategic planning you've factored in multiple scenarios and the difficulties that may arise become less significant. I thought you wanted more business like focus?

Yes, absolutely Boatman, ...

change the measures and all the balances will be tipped over ..... the feel good budgets which will be more about the environment, trees, and rivers -- big budgets for housing ( which mostly will never get spent in the right place) ... etc will make us all feel better after the depressing figures on house prices, affordability, and homelessness are published in 2019.....

The irony is that they are in a mess and they know it - the disaster is that they don't seem to have a plan for fixing it . Yet! .... and they are just buying time , knocking on all the doors and seeking any help to take them out of the hole they dug themselves into with their bigmouth policies and promises.

Hence, expect all sorts of BS and accomplished missions on TV and interviews going forward.... Same old, same old....

In 2.5 years, Labour's scorecard - re achievements in housing - will look dismal.

Only a very foolish bunch of politicians would make promises in an area as difficult as housing.

The 10,000 new dwellings that Labour is promising each year will be much closer to 10 per year.

TTP

And Nationals achievements on housing in 9 years was what exactly ?????

@ vman ...... dont be silly now , its not the Governments job to "provide housing " it was not done by Helen Clarke's Government , nor any previous administration that I was old enough to vote for .

Quite simply , the market provides housing , whether it be private persons building for themselves using a contractor or as investment, property developers , builders , banks and all the other players .

Its actually not the Governments job to 'provide housing " ............... and NATIONAL never promised in its election campaign to provide housing .............. LABOUR has promised to provide housing and won votes for this .

They now have to come up with the goods

Governments have had plenty of input into housing supply, including via direct build. Fletchers actually grew off the back of some of this activity. Many Kiwis were helped into home ownership through state initiatives, and NZ achieved a very high rate of home ownership - declining in recent times as people have forgotten how they were helped and came to believe they'd done it exclusively all on their own two feet.

http://bwb.co.nz/books/home-truths

That was in the 1930's after the depression when we had massive unemployment and then after WWII when we had massive demobbed soldiers with no work

I was not born until a decade or so later ................and since the 1970's the State built very few if any houses

Somewhat more than 10 dwellings per year.

TTP

Gosh TTP...you will have to stop all these intelligent counter arguments...

leave him alone, that's his IQ level

TTP, Nationals abysmal score card on housing (nine years); https://www.stuff.co.nz/business/97736731/Fewer-than-100-affordable-hous...

But fret not, due to a growing glut of expensive houses, the housing affordability issue cultured under Nationals watch will be allowed to correct itself under Labours watch. Finally, responsable policy has taketh away the speculators punch bowl.

Our great country was ruled nine years by a load of "don't rock the boat" can kicking covetous mammals. Here's hoping we don't return to those days anytime soon.

To be fair to DoubleGZ/TTP, and depending on your definition of "somewhat more" then 98 is more than 10 a year, it's almost 11 per year, hats off to the Nats on a job well done!

LOL sold!

If you want to make labels rp them start with your labour party bedfellows
Jacinda is already moving up the property owner and investor ladder. At least try to be a little bit balanced in your comments

My biggest fear is for the health system,the way a lot of the contributors are getting stressed in here,there is going to be an influx of admissions with chest pains...

As I keep saying,has the sky fallen in,have financial markets collapsed,the housing market was slowing before Labour took over and if Bill had got in with a coalition with Winny,he was pushing a change in direction to a social investment policy.
You all have your knickers in a twist and we haven't had a budget yet.
The GDP data released today is for all of last year,it shows things slightly slower,but mainly due to climatic effects on agriculture.
Go have a coffee,smell the roses,give them a chance.

Yup pretty much, they remind me of Veruca Salt from Charlie and the Chocolate Factory

https://www.youtube.com/watch?v=Pqsy7V0wphI

Here's a way to build very affordable homes: BBC article '3D-printed homes turn sludge into shelter'
http://www.bbc.com/news/technology-43411581

We need to be piling into this https://www.youtube.com/watch?v=xaxrixBFAic