Attempting to fix a shortage of housing while at the same time allowing record numbers of migrants in does not appear to be working

Attempting to fix a shortage of housing while at the same time allowing record numbers of migrants in does not appear to be working

By David Hargreaves

When you find yourself in a hole, stop digging, as the expression goes.

It's a simple enough sentiment.

In order to fix a problem, the root cause of the problem has to be eliminated first. Then we get on and fix the problem.

This blissfully simplistic concept is lost on a Government that still wants to keep having its cake and eating it by artificially pumping the economy with new migrants.

The Government's kept trying to talk down the rising and rising immigrant numbers as if they are somehow nothing to do with it and, heck, we should all be grateful lots of people want to live here.

But 'living' is the nub of it.

Everybody needs houses to live in.

Auckland creaks

And as the chief recipient of the burgeoning numbers of immigrants Auckland is creaking very badly.

There are far few houses being built in Auckland even to accommodate the people there now, and yet this Government keeps pouring more in.

The Government has kept waiting for this situation to abate by itself. All the talk has been of immigration numbers passing their peak.

Well, that's just simply not true. We don't know where the peak might be.

What can be said is that the nearly 14,500 people who arrived on a permanent or long term basis last month was the most ever.

On a net basis Statistics New Zealand's monthly figures put the seasonally-adjusted net gain at nearly 6500 in January - also a record.

Across the past four months the annualised net gain is now running at close to 75,000, which equates to nearly 1.6% of the current New Zealand population - that's about three times the rate of growth they have in Britain and the British are screaming their heads off about the rate of immigration THEY have.

Auckland grows

For Auckland the net gain over the past 12 months is running at around 42,000, which would require around 14,000 new homes. There were fewer than 10,000 new homes consented for construction last year.

This massive immigration wave is not just something that is occurring on its own.

A while back the numbers of students were blowing out. Some steps appear to have been taken to dampen that, as the numbers are now dropping.

However, the numbers of work visas being issued are still going up and up.

ASB economist Daniel Snowden made these interesting observations about the rise of the work visa numbers in tandem with the decline in student figures.

"...This shift could have a long-term effect on NZ.  It could continue to keep net migration firmer than historical averages. Those arriving on work visas are more likely to earn, pay tax and spend.  This could generate a greater contribution to overall economic growth, as well as inflation, compared to that seen when students were a strong driver of net migration. The inflation impacts could be different, clearly a greater boost to labour supply but also a tendency for greater consumption and housing demand."

Greater consumption and housing demand. Yikes.

Can this Government please explain why as many as 4,447 people - up a gobsmacking 23% on the same month a year ago - were given work visas in January?

The numbers of work visas being issued are running at record high historical levels too. Four of the highest monthly totals ever have come within the past five months.

The Christchurch rebuild is winding down. That excuse doesn't work any more.

New Zealand welcomes all jockeys and bakers

Okay if they are all brain surgeons, but as we know from past figures they won't be. There will be a good representation of things like bakers and jockeys in there. I mean can't we teach people how to make bread and ride horses any more in this country?

The official skills shortages list makes, I think very depressing reading. There is something going horribly wrong in this country so far as basic skills training is concerned. 

But filling jobs with migrants now is no answer. Because what about the young Kiwis that aren't being trained and end up doing nothing and getting into trouble? That's a social timebomb.

The latest population projections from Stats NZ out last week made for sobering reading on two levels.

First, the figures as presented showed no let-up for the growth rate of an Auckland struggling to cope with its existing population.

Second, the latest projections showed that actual population gains have been overshooting even the most supposedly 'high' projections of what might occur.

Sort it out

And this is all happening at a time when the banks in their own words are starting to 'ration' credit, so, new developments are becoming harder to get off the ground.

The Government simply can no longer talk about fixing the Auckland housing shortage with any credibility when, a) It's not getting enough houses built to accommodate the existing population and b) it's stuffing more and more people into the place.

The Government has shown it can't just jawbone more, or at least enough, new houses into Auckland, even to house those already there..

What it CAN do is bring the hammer down on all these work visas being issued. Till the infrastructure can start to recover.

It is beyond time Bill and his crew put their shovels down and stopped making this hole deeper.

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?

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51 Comments

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20
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It's going to take Winston Peters to help sort this mess. For years he's been banging on about immigration and he's largely got nowhere. But this year is going to be different. You can love him or hate him, but if you want something done about this growing problem you know what to do come election time. Give him a real voice.

Even a broken clock is right twice a day.

The drunken dwarf will be Kingmaker

19
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I don't care if this is the only time he's right in his lifetime. Neither of the main parties seem prepared to do what needs to be done. Peters has the best chance of effecting real change on immigration policies if he hold the balance of power.

12
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National can't afford to reduce immigration.

The Housing Ponzi must be fed.

Bill English is now blaming environmentalists for the housing crisis, definitely not immigration.
He is also claiming that most unemployed New Zealanders and people looking for work are on drugs. This is why he has an open immigration policy.
Any New Zealander who believes this is very gullible or just plain stupid. All card carrying National party members will believe anything and everything that comes out of Bill English's mouth.
Roll on the Election, the best of the bad bunch is Winston.
National has had 9 years to fix the immigration problem and housing mess, but they have instead looked after their own vested interests.

Don't judge Winston on the propaganda crap that comes from our media. The media are supposed to be our voice and ears. They have been so pro National they are an embarrassment to Journalism.

Do you hear the people sing?
Singing the songs of angry men?
It is the music of the people
Who will not be slaves again!

Until they're offered a shiny trinket come election time and then forget what they were singing about...

some blankets and muskets pls

True, seems to have worked out well the first time around.

Not for the locals, obviously, but for those coming from overseas.

History never repeats
I tell myself before I go to sleep...

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And it's not only roads, houses, schools and hospitals that are being squeezed. The load on other infrastructure such as sewerage is going to be enormous. http://www.noted.co.nz/money/economy/keeping-up-with-the-new-jafas/

Really good article. Well done Graham for finding it.

He wrote it, so probably was quite easy for him to find.

Oops -Well done Graham for writing it.

Thanks, Brendon.

On arriving in New Zealand poor and disheveled migrants are each given a winning lottery ticket, by virtue of the knowledge that they intend to purchase a home. Upon the sale of home, the lottery ticket can be cashed in for immense wealth and passed to the next migrant.

10
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National should now understand and accept that to solve the problem, demand side also has to be tackled and it is not just the supply problem.

Not that they were not aware (Demand) about the problem but were in denial as did not wanted to act on demand as by admitting will have to act, which they did not want.

Come what may it will be hard for national to get away.

“You get hit the hardest when trying to run or hide from a problem. Like the defense on a football field, putting all focus on evading only one defender is asking to be blindsided.” ― Criss Jami, Killosophy

10
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I wouldn't hold my breath for National Party to admit their mistake on migrant inflow and rectify it.
Last year, some changes were introduced in the residency rules which favour more experienced workers, which although scared away a couple thousand Indian students, brought in more immigrants on work visas.
The points system, as flawed as ever, assigns the same value to all "equally-experienced" workers. A cleaner who has spent 4-years scrubbing toilets has an equal chance of landing an indefinite visa as would a chartered accountant.

You are giving National way too much credit, they've never tackled the supply issue.

They have spent years talking about supply, but their input into actually making a dent in the supply snarl up is non-existent.

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Need to realise, National DOES NOT WANT to solve the problem.

As English noted, he sees it as a sign of success. He also said not long ago that he "does not want to see prices come down".

Immigration is not the root cause of the problem.

3 years ago we had low immigration and we did not build enough houses. Now we have high immigration and we still do not build enough houses. Doesn't matter.

We have astronomically high land costs, which seriously retards construction of housing in our biggest city. If we increase immigration we need more houses which we can't build because our costs are too high - we have a housing crisis. But if we cut off immigration our wage costs increase, inflation/interest rates rise and land costs stay too high - we have a housing crisis.

We should look at addressing the root cause - land supply.

So Una, more houses take care of accomadation, what's your answer to the infrastructure issues mentioned here, sewage / traffic and then theres the creaking hospitals, education overload, rising crime, low wage growth and all the other benefits of immigration on steroids.

No I think you are wrong (unless you are happy that Akl is becoming another Jakarta or Bangkok)- we have got too many coming in. Immigration is the root cause and it will be the major point going into the elections.

Well those are issues with immigration, housing isn't.

22
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I own 2 houses so have done well personally out of capital gains over recent years but I am gutted for my children that we have a government that has been so apathetic towards housing affordability for so long. "Its just a supply issue" - Yeah Right! You could argue that it is primarily a demand issue that they have largely fuelled! I don't know who I will vote for in September but I do know I wont be voting National - you got my vote last time but sitting on the sideline over housing, denying their is an issue, then blaming the councils and the Reserve Bank... I don't need to hear your policy - I have unfortunately seen it in action!

17
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It's encouraging to see your comment. One often gets the impression that many who have done well don't care what happens with regards to the next generations.

An older friend of mine bought an old villa in Mt Eden decades back. He's done it up beautifully, and it's on a big piece of land. Unfortunately, he's had too many children too - so even inheritance won't help them have a chance to live practically in their city of birth in the long term.

He's similarly sad about the lot his children face. He also works in the housing industry, and sees first hand just how many houses are being bought not only by the demand from immigration, but just pure foreign purchases even sight unseen in order to park money in NZ.

Rick I can also thank National for helping make me wealthy by voting for them. But I won't vote for them as I love NZ and I am appalled at what they have done to NZ. Labour I would point out started all this off so I won't be voting for them either.
Young NZers need to vote. unfortunately they can't trust the media to be their voice and ears. They need to get involved and understand what has happened and how it happened.
For their vote to count it needs to be a vote for change.

Ditto. Anyone but national. They have destroyed our cities, our environment and our unique way of life - the very reasons people want to come and visit or live here. They are living in a world of denial and alternate facts. Expect one big almighty Brexit/Clinton type backlash...the anger is massive and widespread - but still largely denied in msm..

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kdm17. This is what most kiwi feels. Do not know, whom we will vote but knows one thing that will not vote for national.

12
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According to Bill English -immigration is a good problem to have. I used to think that John Key was the joke and hand break on Bill English. But given his excuse after excuse approach to governing the country sadly I have come to the conclusion he is as bad as John Key. Bill continues on the same line as John -that the housing crisis resulting from the immigration boom is a good problem to have. With the qualification that Bill cannot actually say the words 'NZ has a housing crisis' -like John he plays with words -sometimes indicating it is a problem -but when asked what that means -he clarifies it as a 'good problem'. What a heartless b.....

Duncan Garner gives Bill a grilling here.
http://www.newshub.co.nz/home/politics/2017/02/hidden-homeless-behind-gr...

Just wait and see Brendon. They will be watching the polls and blog sites etc etc and if it looks as if housing is going to be a significant issue during the election then they will make the necessary changes to protect themselves from losing the election. Politicians are not only greedy and self serving ( hark back to when their super came in) they hate losing elections and becoming the opposition. Auckland is on the wane as is Christchurch. Rising interest rates will affect confidence and other centres might follow them.

I am sure that National will try to do just enough on housing to put the issue to bed politically. But will that work? Like Boatman I am watching with interest.......

Have doubts as they are going to lose anyway.

Also if they do try to do something now and it burst before election - their worst nightmare - where will they run so it i's a catch 22 Situation for them.

They are doomed.

Never underestimate the fear of the unknown.

A lot of people seem to be dumping National without any real idea as to who to vote for next.

I would expect a lot of them to return to form and still tick the National box at the end of the year.

Although I would like to balance that by saying that I think we will see a record amount of split electorates this year. I.e. party vote does not match the candidate.

It's the MMP version of a dollar each way.

Well put David Hargreaves, my thoughts exactly and anyone who thinks that immigration is not the root cause of the problem, is deluded.

National is digging its grave here. Hope their polling allows them to see reality on what is going to be the deal breaker issue election time - Immigration and housing.

Daniel Snowdens considered opinion that we have a permanent structural shift in immigration patterns, is terrifying. Coupled with Australia's economy likely to be in the doldrums for a long time yet, we face a major crisis in Auckland unless our government does not further restrict lower quality immigration.

I'm puzzled as to why they are so entrenched. Migration already in the pipeline will keep priming the pump until well after the election. Maybe they have advance data and know the usual seasonal fall will occur shortly. Or is it just fear of opening an 'I told you so' chink, for Peters to exploit ?

I've always voted National and never even considered another party however after the last election they have really let NZ down so this year my party vote goes elsewhere. Record immigration has kept wages down and meanwhile house prices have skyrocketed. Its a disgrace and I can see why John Key jumped ship.

As far as leaders Bill English is the guy who got spanked in 2002 and beaten in the boxing ring and Andrew Little is just an empty vessel. So that leaves Winston Peters and James Shaw. I like James but unfortunately you get Metiria as well. So its Winston for me this year.

Delboy you are speaking the voice of the nation. Vote for anyone but National.

Many of our friends and people we know have the same sentiment. Poor Bill will lose again but will have the satisfaction of being PM for few months - consolation prize.

Which party will change the immigration settings?
Labour/Greens? No
National /NZF? After Peters protesting, will he change National policy? Probably not.
There is no party or party alliance that offers any significant change.
And with MMP you never know what unusual alliance may morph up regardless of voters intentions.
NZ has no alternative to more of the same.

NZ certainly has alternatives. I for one are getting a bit sick of the ongoing meme of "there is no credible alternative, so you have to suck it up and vote National". Is that the best argument that entrenched National voters can come up with these days? Feeling that they cant back any of the parties recent actions with logic or reason, the only thing left for them to say is - "well everyone else would be worse"....

Certainly not advocating voting National.
NZ First will increase their vote, but still not win enough to be a dominant policy setter.
NZF is unlikely to join the Labour/Greens.
Labour/Green unlikely to slow immigration etc.

Have you written to them and asked them directly? I suggest that more need to do just that.

Good article but a fact made in many recent years.
We the tax payer and communities bear the negative long term cost of unaffordable housing, crime, health, education & infrastructure.
(Real estate agents get rich and flash their whares like a whore)
This is not the promised 2008 brighter future.
Immigrants won't mind waiting until NZ real economy (average income) catches up.
Ban residential house sales to foreign investors - completely unfair playing field and cynical :(

Is one reason that National keep immigration so high is that more of these 75,000 new immigrants will vote for National than for other parties - probably significantly more.

It's a smoke a mirrors games; they like to pretend that high immigration is the real cause of property demand but we all know that the main driver has been Foreign Investors (None Resident Investors).

Thing is the Auckland listings are really starting to build up now, we're currently at 10364 property listings, that's 300 more than last week. So prices will have to give at some stage.

"Government still digging its housing hole"

My first thought was that maybe they are actually trying to dig to China.

'Government still digging housing hole' but in reality Housing has already dug hole for Government.

"Second, the latest projections showed that actual population gains have been overshooting even the most supposedly 'high' projections of what might occur."

This has been occurring for several years now. Only a few years ago Stats NZ was projecting NZ would not reach 6 million until after 2061. Now this is projected to occur 20 years earlier around 2043. How can institutions plan for such growth when even Stats NZ underestimates growth rate.

Here is a simple state house. deposit...wasted. All that glitters is not gold....but it a fair amount of Loot....is it not.

http://www.stuff.co.nz/national/politics/89876348/a-glittering-trump-ina...