By David Hargreaves
I guess a lot of people will appreciate the sentiment of more Police - and 'feel-good' things such a target for those Police to attend almost all reported burglaries.
People like to feel safer in their homes.
But I reckon a lot of people might also have expected Prime Minister Bill English, in his year-opener, to say something about providing MORE of those homes, specially since he's hinted previously that the Government has plans.
What a tease.
I conclude that having followed the John Key template for an extremely long and exhausting run-in to the election - all but eight months to the announced September 23 date - English is pacing himself and his party. This is a marathon not a sprint.
And let's face it, beefing up Police is never an unpopular thing for a Government to do. The only people who are likely to disapprove are criminals.
Unless I've got it very wrong though, I doubt this election's going to be won on law and order.
You can always be surprised by the things that do come to dominate a campaign. It seemed to me, watching the interminable 2014 NZ campaign from the blissful distance of Australia, that the politicians talked about everything that didn't matter and nothing that did. So maybe we'll get more of that.
Hot buttons
I really hope not. Coming into this year it has appeared that the public 'hot buttons' for the election include the economy generally, immigration and housing. The last two are not entirely unrelated.
Given that the run in to the election is so long, I wonder if we aren't already seeing a certain amount of foxing.
Maybe, having decided that immigration and housing are going to be big, our politicians of varying stripes are going to engage in a game of 'show me yours and I'll show you mine'.
There's two ways of looking at such behaviour. One way of seeing it is that there's logic in seeing what your opponents plan before you unveil your plan. The other way of looking at it is that maybe the politicians don't actually really know what to do.
Either way, this could lead to a stand-off, which would be a pity. If immigration and housing are the big issues, let's discuss them, get it all out in the open and hear some logical suggestions for policies that will take the country in the right direction with both issues.
The waiting game
The worry is that the major parties will sit back waiting for the other to lay out what each plan and then come out with some half-baked 'spoiler' solution that will get them over the line in the election, but it will be ill-thought-out and won't work in practice.
On housing and Auckland housing in particular, it is worth regularly keeping ourselves abreast of where we stand.
The Government huffed and puffed about building more houses in Auckland.
Certainly the rate of newbuilds has risen sharply from the post-Global Financial Crisis levels, with a trough of little more than 3000 houses being consented in 2009.
The Statistics New Zealand building consents figures for calendar year 2016 aren't out till next week, but for the 12 months to November 2016, Auckland did cross the 10,000 consents bridge for the first time since 2005.
Looks good till you put it against the population growth.
Migrant explosion
Let's forget natural population growth and just look at immigration.
The calendar year 2016 figures are out. These say the net gain of migrants nationwide was in excess of 70,000.
Of those who gave an intended place of residence in New Zealand, about 60% said Auckland.
This suggests a net migration gain in Auckland of about 42,000.
The statistics tell us about three people live in every house in Auckland.
This tells you that simply to accommodate the extra 42,000 migrants Auckland needed 14,000 new homes last year. Not 10,000.
National's stance
Bill English's rather astonishing move to scrap the specific role of housing minister late last year seems at first flush like an attempt to play down a problem that National's not been able to fix.
It does also suggest though that English is being coy and waiting to see what others come up with.
There's no doubt the Government is in something of a quandary. It's efforts to ramp up housing have fallen short, while its immigration policies are making the housing problem worse.
However, the ramping up of immigration has allowed this Government to pump up the economy, while also helping to keep the lid on wage pressures with cheap imported labour.
I don't think you can truly start to alleviate the housing pressures in Auckland without doing something about inbound migration numbers. But of course the high immigration numbers - and the extraordinarily high number, over 40,000, of work visas issued last year - also point to big structural problems here of not training the young to fit career vacancies. And often we are not talking about highly skilled jobs.
We need a plan
Any party that could come up with a coherent plan that expedited quicker responses to housing shortages and moderated inbound inflation, while setting about training people within New Zealand to fit skill shortages would get my vote.
But somehow I fear I will be waiting a long time.
What I expect is bluff and counter bluff followed by a series of election policies put up by the main parties that are simply responses to each others' policies and lack any sort of coherent vision.
Really hope I'm wrong.
The opening exchanges have not, however, been encouraging.
33 Comments
Let's forget natural population growth and just look at immigration.
Let's not forget natural population growth, it is very important.
In 2012/13 Auckland was only building 2/3rds of the homes it needed to cope with increasing population. Then there was a huge surge in immigration in 2014 onwards. So that in 2015/16 Auckland was building 2/3rds of the homes needed to cope with much larger population growth. Thus we can see the immigration increase has had nil effect on the proportion by which we fail to build houses.
The problem is Auckland Council has an addiction to hugely costly sprawl. Auckland Council planning is set so that suburbs which sprawl massively outwards from towns miles away from the city are encouraged, but suburbs adjacent to the city boundary are banned. As a result of pushing new mega sprawl far and wide away from Auckland City, there has been a significant reduction in the amount of land allocated to grow Auckland City. 91% of the land around Auckland City is banned from having new homes over the course of the Unitary Plan, the remaining 9% increase is too small.
Which brings us back to natural increase, because the 9% allocation is too small for even the natural population increase of a city of our size. Even if immigration were to stop completely, we still couldn't build enough homes.
National has had 9 years to sort out housing, uncontrolled immigration and police numbers and now suddenly in an election year they have the answers to all our problems. New Zealanders are a very gullible people. National promises everything in an election year and reneges on most promises after the election. Labour is no different.
Whether or not you like Donald Trump, at least he is doing what he promised before their elections. It is a pity we don't have politicians with that sort of integrity.
Every party is holding back as timing in the run up to the election is criticle. One mistake that Bill English has made is that he's allowed himself too much time to risk blunders that he'll make.
I'm also not sure why some people are giving Bill English a gold star for increasing Police funding by $500m. If I decreased Police funding by $500m and then 3 years later prior to an election increased Police funding by $500m would I get a gold star as well?
The Chinese are buying houses in Auckland as fast as they can. National have embraced the money with open arms, doing away with the housing minister and setting up a wealthy migrant visa. Actions speak louder than words and National are clearly happy to turn Auckland into feudal society with Kiwis as the surfs.
Of course poor people are unhappy with ridiculously high tobacco prices and a wave of third world immigration driving down their wages.
But it’s not just poor people suffering. Double income no kids university educated doctors engineers living and renting in Auckland. Those are the people you screwed over National.
That IMHO is the main election issue.
National set up this bastardised council and therefore the housing crisis is probably John Key's greatest legacy. So screw National.
But Auckland has had a Labour Mayor for seven years and they have created this awful plan. So screw Labour (and the Greens Penny Hulse) too.
Now Winston Peters is telling us it is all the fault of nasty foreigners, because they have invested in this Council run Government set up Ponzi scheme. So screw NZ First too.
Politicians never accept blame and in a situation like this where they are all guilty of incompetence, we are screwed.
That’s a nice attempt to deflect blame. Council, Labour, Greens, who else do you want to blame - Nelson Mandela or Woodrow Wilson?
The truth is since 2009 interest rates have collapsed to practically zero, and as Jim Rickards correctly pointed out in his book “the death of money” we’re seeing the greatest episode of capital flight in human history coming from China. Those are global events which would naturally create wealth divides, but the problem is so many orders of magnitude worse in New Zealand because of the National party policies over the last 8 years.
The National party could have mitigated some of the damage. Perhaps putting a 15% foreign buyer tax in place, they could have used the proceeds to fund a 10K first home buyers grant. Something! Anything ! The foreign money would have come here anyway! What the National party did was the opposite of mitigating the damage.
Sorry but the last Labour govt were just as bad. Remember the first wave of the housing crisis grew under them between 2001-2008.
The 'Key' difference is that John Key's original platform included sorting out the housing crisis. What a big failure he was on that promise.
There are 3-4 things that could be done, that are not political suicide,that would sort the housing issue out. It's not rocket science. Don't believe anyone who says it can't be addressed.It can:
- Allow peri-urban green cluster housing
- Have a CGT on investment property
- Slow down foreign property investment
- Govt get involved in building much more housing (ie. Labour's Kiwibuild)
Personally I think the election will be decided by the amount of voter turnout.
Those most affected by high house prices / rentals, crazy traffic, hospital waiting lists, increased crime and low wage inflation as a result of National policies seem to be very reluctant voters.
Only 63% of 18 to 29 year olds for example voted at the last election. For Maori in the same group the figure is even worse at 55%.
Hard to believe.
I don't disagree as such, but given the aging population, even if an extra 20% of those voters turned up and voted, it probably still wouldn't be enough to influence the outcome in any meaningful way.
I personally think this is one of the reasons voting is so low in those groups, they feel as though they don't really count.
Interestingly, most of those I know in that group voted for NZ first last election. So if Labour/greens were hoping for the tick, they might be in for a shock as well.
"Those most affected by high house prices / rentals, crazy traffic, hospital waiting lists, increased crime and low wage inflation as a result of National policies seem to be very reluctant voters."
Just putting it out there, but the group above may also be the vocal minority. I would like to hope not, but you never know.
Regardless I think this will be one of the most interesting and telling elections in my voting lifetime.
I would never have considered it possible to write this, but as the proverbial double income university educated doctor and engineer living in Auckland , but with kids, I am seriously concerned for the future of my kids and my staff.
National has sold out the following generations of Kiwis just to boost the retirement lifestyle 50+ property owners looking to protect their retirement lifestyle through debt based speculation on property - its core voting block. The only winner of this strategy is themselves, and the record profits of the banking sector.
NZs economic miracle is at the expense of Kiwis ability to own a slice of NZ. Unless we turn the NZ economy into a slave labor paradise with no unemployment support, no healthcare, no health and safety, start dumping very heavy pollution everywhere and move to the other end of the corruption scale, NZ will never be able to compete with the earning power of the likes of China and India. This is exactly the reason places like Bali and Rarotonga have strict controls on who can own land there.
This issue has to be the crux of the next election.
Agree the sub 30 demographic need to actually break away from their coffee's or their iphone for 15 minutes and vote. To not do so is pretty much dooming them to rent enslavement for the remainder of their lives unless they inherit from family. They say this demographic is our smartest and most educated - so far they are just making themselves look like our dumbest. If they dont vote for their interests, no one else will. That is how Democracy works.
You are right to be worried - there is and was no economic miracle - just the tail of a debt ponzi. The world is heading full steam into an energy crisis as we appear to be hitting a debt wall ... Once we cant keep issuing new debt easily (triggered by any event which shakes confidence ... ) commodity prices will tank & supply chains will be disrupted causing huge problems. The big economies are starting to focus internally which reflects the shift is coming...
Voting wont change a thing ... think & focus local
Averageman you might be interested in the lessons from this article for fixing the housing crisis.
https://medium.com/@brendon_harre/housing-affordability-reform-or-revol…
Yes the council and building material cartel, an lack of tradesman training post 2008 are impacting the supply side but respectfully suggest our real big issues are demand side driven.
Hot Chinese money looking for free education and and escape point from horrific pollution, rampant immigration hidden under the guise of foreign education programs, and a truck load of local specuvestors jumping in with stupid levels of debt and stupider equity return ratios for the promise of tax free capital gains to retire on.
Its not stupid speculation, the council has cut 60% off* the land supply a city of our size needs to grow. That amount of restriction means the land price goes up - if a lot of immigrants come the price goes up and if no immigrants come but we keep having kids the land price goes up. Auckland land speculation is a guaranteed winner at any level of inward migration from zero upwards. Leveraged purchasing was an intelligent and worthwhile investment.
The only condition under which prices will come down in Auckland, is when people leave. Have you considered moving?
* Auckland Council did not remove this land supply entirely, there have been no savings made. They took that 60% away from Auckland, but added it to towns miles away from Auckland. Then they added another 60% or so more land on top of that to those remote towns. Today Auckland is are currently paying about 150% of the typical costs of infrastructure.
trouble is at some stage soon there will be no "tax free capital gains to retire on"... retirement depends on ongoing energy surplus... and the entire world depends on the export of Middle eastern Oil
http://energyskeptic.com/2017/book-review-of-failing-states-collapsing-…
"The period from 2020 to 2030 will see Middle East oil exporters experiencing a systemic convergence of energy and food crises. If forecasts of Saudi oil depletion are remotely accurate, then by 2030 the country will simply not exist as we know it..."
From the horses mouth
Lawyer McClymont said the qualifications earned by most Indian students here were "worthless" back in India.
"They would get much better qualifications than that in India," he said.
"They come here and do a Level 5 diploma. It's not because it has any value, it's a pathway to residency
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=117…
I am biased in favour of making things easier for landlords but that does make my opinion wrong. We all agree we need more houses. Many say these should be owner occupied and blame landlords / investors for supplying the demand for rentals. Suppressing and restricting the ability of landlords to increase their stock to meet the demand for rentals is counter productive to the overall aim of increasing the housing stock. The Nats need to remember that free enterprise is what makes the world work. Socialism even in Russia and China is a dead duck.
Free up land for building. Require investors both at home and abroad to build new houses rather than compete over the existing insufficient supply.
Supply increases, landlords and overseas investors actually provide something, house prices will stagnate a bit but profits can still be made.
All bubbles or Ponzi schemes collapse sooner or later ... all ...
... Wild Bill has to pray that the Auckland housing bubble doesn't burst before the election ...
As hedge fund manager Marc Cohodes rants ( see you-tube ) , against the stratospheric house prices in Vancouver , Canada ... it is inexplicable to have such insane prices in commodity exporting countries with low population densities , such as Canada , Australia , and .... sssssssh .... New Zealand ! ... oops , there , I said it ....
Some voters will be happy with Auckland house prices to keep rising - while Homeowners outside Auckland ( yes, there are some) may still be celebrating their recent house value growth.
While many voters would be happier with house price decline or flattening, as long as there are not many negative effects generally. Especially for their kids sake.
It will be a fine line politically.
I think BE taking over from Key may help National politically, as any negative sentiment on the globalist / corporate / trade deal image of Key may diminish, as BE portrays a more conservative middle line.
There are still unseen 'events' to happen before September!
And where is the Brexit/Trump conduit in NZ? Winston maybe, but he is still quite conventional really, especially once part of govt.
Cohodes is 'like Bernard Hickey , but on steroids ... he's predicting the popping of the Vancouver property bubble to result in a 50 - 80 % collapse in prices ...
... and even if that happens , house prices will remain expensive on a historical basis , when compared to family incomes ....
It couldn't happen here , of course .... property never goes down in Godzone , does it .... only up , forever up ( cough cough ! ) ...
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