Differences between National and Labour on housing starting to show through as Adams readies 'rest-of-NZ' announcement and Labour works on explaining KiwiBuild & demand-side plans

Differences between National and Labour on housing starting to show through as Adams readies 'rest-of-NZ' announcement and Labour works on explaining KiwiBuild & demand-side plans

By Alex Tarrant

The differences between National’s and Labour’s housing policies are starting to show through.

A few weeks ago I wrote about the purple housing supply election Auckland was facing, as it appeared KiwiBuild would face off against KiwiBuild-lite.

National has now set out its stall, in respect to Auckland at least. It will soon be announcing 'housing plans' for the rest of the country. While this will largely focus again on social housing, my expectation is some could well follow the lines of Auckland by including ‘market’ and ‘affordable’ residences as well.

One thing we can be sure of now is the difference between National’s approach and Labour’s. National argues its plan is all government can do, given industry constraints. Labour is buoyed by suggestions KiwiBuild won’t go far enough. Both now have defences against the others’ criticisms.

Amy Adams may well be right that the government could go no further in Auckland due to construction industry constraints. If true, Labour will have great difficulty ramping up KiwiBuild during a first term.

National has attacked Labour on the part of KiwiBuild that envisages building on private land (see Phil Twyford’s response to that below). The point fits well with Amy Adams’ argument that the government only owns 5% of Auckland land and that its main priority should be social housing.

This showed through during Parliament’s Social Services Select Committee Thursday. Twyford asked Adams why the Auckland Housing Plan (AHP) did not promise more than 20% of new-builds to price below the $650,000 ‘afffordable’ cap, “given that the private market’s only producing 5% of new builds that are ‘affordable?’”

Adams reminded him 20% is a minimum. “It might be considerably more. But…to build a 100% strain of affordable homes involves a considerable subsidy to the market development potential, all of which…effectively comes back to then how many social houses we can fund,” she said.

“What we’re saying is, with the amount of land we own, me as Social Housing Minister thinking how I best meet the needs of social housing tenants, and how I best use the capital available, is to build a selection of social housing,…affordable housing to help with the transitions, and some market housing to make sure that the communities are vibrant and the project works financially.”

Their conversation continued:

PT: So you’re expecting the private market to deliver affordable housing. It’s not your job. Do you think the private market’s going to do it – the other 95% - is that what you’re saying?

AA: Well if you’re asking me if I think it is the government’s job to provide every house that an Aucklander needs, no I don’t think it’s the government’s job.

PT: Well if the private market’s not going to do it, and the government’s not going to do it, who will build affordable housing?

AA: Well, Mr Twyford the private market owns 95% of the residential land in Auckland so they’re going to have to be a part of the solution.

PT: Are they going to build affordable housing?

AA: Well, that’s why we’re focussed so much as a government on freeing up land supply, because…

PT: Well they’re not now building affordable housing, so what’s going to change?

AA: What I’m saying is, I have responsibility for 5% of the land in Auckland. I’m talking about what the government is going to responsibly do with its 5%. And as the Minister for Social Housing, and the government’s primary role in the housing market to provide for social housing tenants, that’s what we’re doing with our part of the land. And we think it is the right blend across that housing continuum.

Is KiwiBuild ambitious enough?

Meanwhile, Labour is holding fast to KiwiBuild. Yes, 100,000 homes nationwide, with 50,000 in Auckland, appears ambitious against National’s plan. But there is now talk it is not ambitious enough.

Labour has been working on its response to National’s criticism that KiwiBuild requires private land for a large part of the programme, versus the AHP, which focuses on the 5% of Auckland land the Crown owns. Phil Twyford offered up some thoughts to media in Parliament last week:

“Many of the KiwiBuild homes are going to be delivered in private developments, where a developer will come to us and say, ‘we think 30% of the homes we’re going to build could well meet the KiwiBuild price requirements.’ Then we’ll buy them off the plan, thereby de-risking and speeding up developments and guaranteeing a certain percentage of affordable homes.”

The 30% is a ‘for instance’, but it does indicate Labour’s desire for KiwiBuild to contribute a portion to residential building activity and for it to help encourage developers to think bigger by promising funding for part of a development.

“Bear in mind that what we’re talking about doing [is], if we can increase the industry’s output to, say, 40,000 [nationwide] homes a year, that’s going to take us to what New Zealand was building in the mid-70s, when the population was one-third smaller than it is now,” Twyford said.

That’s a setting Labour wants people to remember. We are building about 30,000 houses annually now. KiwiBuild will seek to add 10,000 a year, with Labour also looking to build 1,000 state houses annually alongside that. There should be an amount of private building outside that.

To those worried it’s not enough, Twyford said other supply and demand side measures need to be added to the equation. Labour is set to announce its immigration policy in Auckland on Monday.

“Alongside all of the other things that we’re going to do, genuinely reforming the planning rules through a National Policy Statement under the RMA, a massive build programme of state housing, reforming the rental laws, banning foreign buyers, taxing speculators, closing the loophole for negative gearing, that’s a big, big agenda.”

What about house prices?

It could be argued such plans might also have a big, big impact on prices. We put that to Twyford last week.

“Governments don’t control the market,” he replied. “So, I’m not going to say that house prices won’t come down, but what we’re going to do is, make housing more affordable by building large, large numbers of affordable homes, and we’re going to squeeze the speculation out of the market.”

“We don’t want to crash the market; we don’t think that that would be [helpful]. We want to stabilise the market and we want housing to be more affordable. And we think that by rolling out the measures that are in our reform agenda we will do that,” Twyford said.

“The thing to make really clear is, that we don’t control house prices. We’re not going to promise that they come down, we’re not going to promise that they won’t come down.”


You can read all political parties' Election 2017 policies in our comprehensive database here.

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25
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Well - National policy and thinking is well known being in government that housing is not a crisis and what is happening in NZ is a sign of prosperity and good for NZ.

Also, as they do not want to disturb their rich vote bank (Investor/speculators and overseas buyer) they turn a blind eye on the demand side of the crisis and talk only about supply - Though supply is one reason but not the only reason and by itself will never achieve anything but than who wants to stop this ponzi a least not the current national government.

Being election year national is not acting, if not an election year would have acted by now to prop up / support the housing ponzi.

Besides the policy arrogance has to be humbled.

Vote for change.

We are allowing immigrants in at a rate of 1,000 people every 120 hours ( 5 days X 24 hours )

Little wonder house prices have exploded

Kiwis are not stupid , they may be generally PC and say little , but they know the cause of house prices exploding

The real mess in the housing market has been created by the immigration policy ..............and there is no way in hell we can get on top of the housing backlog when we keep bringing in 1,000 people every 120 HOURS .

I have said it before , National risk losing this election due to immigration policy , but Labour are also joined at the hip to mass inward migration .

It leaves Winston Peters to be Kingmaker in a coalition which will be forced to curb migration if he gets his way

Labour is just as bad.

Its knee-jerk responses to Government policy lack credibility. And forget KiwiBuild: it's completely ill-conceived and pie-in-the-sky. Given labour shortages across the building trades and all the regulatory (local authority) red-tape in this country, 100,000 new houses is utter nonsense. And just wait and see...... closer to the election, Labour - in desperation - will jack up the figure to 200,000.

Moral of the story: don't expect any Government to sort out the housing affordability crisis in this country.

More generally, leader Andrew Little is completely lacking in vision. His rebuttal to Stephen Joyce's first budget was pathetically weak. (I expect he'll have started looking for a new job post-September.) In my view, National will win the election on its 2017 budget: Labour has been kicked into touch before the election campaign even commences.

Labour needs a leader like the late Norman Kirk RIP - a person of honour, credibility and clout. Big Norm was a man of the people - and a champion of the under-dog. He commanded widespread respect from folk of all political persuasions. Sadly, Labour has never re-captured the essence of his leadership and influence.

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the UK PM and MSM wrote off the labour leader as weak and ineffective and polls had forecast a comfortable win
I think immigration and housing are the main election issues, we already know nationals response,
it is all about timing as to when to release policy for opposition parties, too early and national will release a watered down version.
too late and it will not gain traction

18
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9 years of power to national. NZ now needs change.

Do need government that listen to people. National at the moment is I, Me, Myself besides following the policy of Denial and Manipulation.

The same thing happened though prior to national getting in. They were almost voted in by default, due to the need for change and arrogance you get when a government has been in for too long. The big difference this time is that there isn't a strong opposition party. We don't want to go down the track of having 'nanny state' policies being introduced again. Who can forget the lightbulb policy, where they were going to force ban all incandescent light bulbs. 10 years down the track, and they have almost disappeared on their own as the market can take care of that. However the market can't take care of the housing crisis, as it is only getting worse, and hoses are more expensive than ever. .

Labour has to attack it on all fronts. Currently their policies don't appear to be much different from Nationals. The other problem is that NZ now lacks a strong opposition party, it has to join two small parties, and even that combined is far less than Nationals size. So very difficult now to get a change in government as labour is now so weak.

The building materials sector is something that needs to be looked at, as hardly any competition in the market, and we pay huge amounts for materials compared to other countries, which is one reason house prices are so high.

While they are at it, they should remove GST from new house builds, like they do in other countries like the UK.

Look at Adelaide - how can they offer house and land so cheap http://www.astonhills.com.au/home-and-land-packages/lot-2119-metro-31/

310 SQM of land though is tiny, and they are 2 level, so they are going to be jam packed in. But they do like cheapish and more architecturally pleasing compared to some developments in NZ. In NZ we are moving to horrible terraced housing.

I agree 100%. More transparency needs to go into building material cost. Material costs are unbelievably high given we are a country that produces the amount of timber that we do. I also agree with removing GST on building materials it will spur more building growth to help on the supply side. As it's still significantly lower cost to keep trading houses between us than it is to build a new house and help supply.

Agree re govts but national is selling part of a public reserve and kids playing fields because of houses.that is so short sighted and the way they are doing it is deceitful! So have to call them up on this!

the interesting part of this labour policy in my mind is it will do the opposite of lower prices, by buying of private developers (who will sell at a profit) they will not increase supply but instead reduce supply
they need to do greenfield developments themselves, yes they will have to buy private land to do it,
they need to contract builders to build ten standard designs and set up so they can have an ongoing consent

"Govt needs to do greenfield developments themselves"

It's called a Turn-Key operation

Turnkey - Program, project, solution, or system where the contractor or provider undertakes the entire responsibility from design through completion and commissioning. The client or customer only has to turn the proverbial key to make everything function as it should. See also superturnkey.

We need a building industry that works on an industrial scale: massive standardised housing developments, as much built in factories as possible and quickly erected on site. If the government let a contract in Auckland for 1000 houses per year for ten years I bet you they could get a cheap price plus it would give the suppliers certainty to build capacity and invest in productivity.

As for land, what about some green fields development. They can compulsorily acquire some of those special housing areas that are dragging their feet.

You can't compare Labour versus national as apples versus apples. National is at year 10 of their plan, Labour is at year 1. It's a bit rich to say "we don't have capacity to build faster" when it's been their job to build that capacity.

The most important factor in the Auckland housing market is Chinese foreign capital. Both parties appear to be circumnavigating that elephant in the room.

Despite the denials, national have implement policies resulting high income professionals being locked out of the Auckland housing market. The thing is that if you even suggested policies that locked foreigners out of the housing market then you’d get washed away in a storm of hyperventilating righteous indignation about xenophobia from the neoliberal herald MSM & national party. Perhaps labour are just playing it cool and not saying what they’re thinking?

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The most important factor in the Auckland housing market is the domestic mortgage debt attached to Auckland housing.

12
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Yes quite agree, expecting a local professional Kiwi on a salary of $60k a year to buy a multimillion dollar home is just not going to work. But this is the mess that we're in thanks to National.

That is only a million dollar home today. But that value can halve, as it is all about the market, and what people can afford to pay. People who took on the debt to purchase the high priced house, did so at their own risk. Our PM even said something similar only a few weeks ago, almost as like a prediction of the future.

Yes I think you are right Pat. Labour have at least been talking about and have outlined one of their policies for the foreign buyers tax, so they do recognize the problem and are willing to do something about it.

They also realize that without a solid business infrastructure where professionals can live and work comfortably financially to support their families that they need to allow homes to be affordable, otherwise everything just falls apart. So they're more likely to tackle immigration where National just want to keep the flood gates open in the hope that they might be able to afford some property.

National also just want to keep property in short supply so they can justify crazy house price, so they'll continue to do nothing. Which we all know that's just not going to work especially now that the top end Chinese buyers are largely gone.

Article: China’s Massive International Real Estate Buying Spree Is Officially Dead
https://betterdwelling.com/chinas-massive-international-real-estate-buyi...

There is some truth in what you say. When I was selecting an estate agent to sell a modest Auckland house I deliberately chose an agency with both Kiwi and Chinese agents. It was a dream that a foreign buyers would bid above the properties realistic price.
That is the basis of National's reluctance to stop foreign buyers - potential voters like myself. However although it might hit my profits in the future for the sake of sanity I would like a reciprocal policy where only inhabitants of countries that let me buy could buy in NZ.
I'm sure such a law would be popular but note how easy it would be to circumvent with property bought by proxies.

Anyone but national as do not believe in development and prosperity for all section of the society.

National represent elite and unfortunately they are the people who go out to vote but this election will be different. Irrespective of what media and polls says or support this election will be a vote for change.

It's not that they don't believe in prosperity for all, it's that they don't see a role for government in addressing market failure.

Role of the government is not only economy unlike most business but also social welfare and creating just society but national has cracked only one formula of prosperity that is bring immigration to boost demand and more the merrier. Now 75000 is good and with logic 150000 will be better and 25000 will be great as will boost demand and help economy and who cares about infrastructure, health, housing............

Anyone supporting and benefitting by this policy of national will be in for national but not many like me who have been national supporters in the past.

That's a bit rich

The government itself, by its own hand, has brought about the market failure

Central Government has had total control of the immigration lever and held it at full-speed-ahead for the entire time it has been in power. You can't have Central Government causing the failure and wash its hands of the responsibility to provide for corrective measures should pricing mechanisms and volume and accommodation needs get overwhelmed. Local Councils have to provide the infrastructurec of roads and waters while Central Government has the responsibility for health, hospitals, education and schools, electricity. Councils are hard up against borrowing limits, while Government has been screwing the funding side of its obligations into the ground. ie in the 2017 budget they will fund the creation of 6 new schools NZ wide. Really - after 9 years?

Now the Government should fix it.

The problems have been let go for so long they are now impossible to fix

12
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Classic how the use the 'free market' position to say 'hey, its out of our control'. And yet in what other market does the government have control over supply demand - and ramps up demand massively (through immigration and pro-investor regulation), does nothing about supply, then claims 'hey, its out of our control'.

But then when the market starts to reverse - Nick Smith says, look we're cooling the market down just before the election...WTF? They just come across as a bunch of turkeys to me.

Here's the thing Two Other Guys. When National win the election in September (and they will, regardless of what the punters here say). They will see it as a mandate for open door immigration and they will crank open those flood gates. After all, who is going to build the houses in "the biggest house building boom in NZs history?" How quickly everyone forgets that the powers that be, are already discussing cruise ships, berthed in Auckland harbour, chock to the gunalls of imported builders, tradies etc building infrastructure and houses.
We're also way off the million immigrants Sir JK invisaged!
This whole mess has only just started. By the time elections come round in 2020 and the Nats are booted out, it will too late!

This whole things is so illogical. So we don't have enough houses for everyone, so we're going to bring more people in to fix the problem? (who by the way will need a house to live in while they build houses to fix the problem....)

In summary - When you don't have enough of something for everyone (houses), you decide you're going to use more everyone to create more of something you don't have (houses), while at the same time the more everyone will put further demand pressures on the already limited supply (houses)? Yeah - great plan.

A much better plan is to limit the more everyone and produce more houses with the people we already have....that will end the cycle - not make it worse. Don't we have a bunch of young unemployable people on drugs who we could use to build the houses we need insteand of bringing more people in from overseas to do the job? If we do things like that, then we'll see improvements in our real GDP figures.

Limit incoming and build more with the people already here, with the skilled ones teaching the noobs. By george, you've untied this devilishly complicated Gordian knot, where the great political brains of our generation had failed.

Before the nats adopt this frighteningly sense-making scheme they'll want some more detail, like which companies they'll be getting their payoff directorships with, and who will be paying bribes in lieu of wealthy immigrants with shady criminal pasts.

There's a Ronald Reagan quote coming to mind here regarding our current situation - 'In the present crisis, government is not the solution to the problem, government is the problem'.

So one has to go out and vote to remove the problem.

Agree.

One in eight young kiwis are unemployed. At least my son started as a building apprentice last month. There are two solutions to a shortage of tradies: (1) bring in foreigners who will accept lower wages or (2) increase wages and start training.

Trouble is, the LBP rules get in the way. builders coming in on work visas cannot build a house in their own right - they have to be employed by an LBP. If you have a look you will notice building permit consents are down so explain to me what LBP is going to put up his own capital in the current climate and build spec houses and employ (and supervise) work visa people unless they off-load their own loyal gangs

Land developers and LBP's are pulling their horns in at the moment as the market turns down

I knew a guy who went to be a builder for an Olympic village, stadia etc. The host country had a massive increase in need for builders, so he was able to go there and get plenty of work.

Did he get residency in exchange for this? No, of course not. That's just the get deal NZ gives, not every other place.

One thing is for sure that this election the voting percentage will be high.

One can only hope the young get out and vote

12
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Oh they will vote, they know just how they've been sold down the river National. I work with a lot of young IT professionals in their mid 20's and 30's in Auckland, who should be able to afford their own home and have families.

They are extremely angry about having to put their lives on hold, most have had to leave the country which is killing off a lot of tech business in Auckland due to the extremely high cost of living.

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This is where I just don't understand the long term vision National have - or infact its becoming much more apparent that they don't have one at all.

We're going to sell out the future of the country for the older folk who are retiring/soon to retire. But how are they supporting industry that is going to create higher paying jobs to help the younger folk buy these expensive homes? There is no vision to the National leadership that I can see - they are more managers than leaders. And mostly by management I mean they are simply featherings one's own nest.

National has long term plan but for immigrant and not average Kiwi.

No reason why they should be voted back.

18
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I'm a born and bred auckland grey-hair
When I was young I enjoyed a full life with a good balance between work and play. I turned around one day and found most of my mates were disappearing off the social scene and getting married and buying a house - all around the 20-23 year old mark. Strewth I thought I better jump to it or I'll have no mates to socialise with. So I did the same as them. Got married, had children, bought a small single level house. Two kids and one divorce later I was free of all resposibilites by age 40. Free to roam. Downsized house etc etc.

I feel we have lost our way somewhere along the line and forsaken our young who dont have the same opportunity to couple up and re-produce and own a home. They cant afford to couple up. They cant afford to re-produce. They can't afford to buy a home. If you are going to re-produce you need to provide the stability of a home.

I hope against hope the young will get out and vote

ps. I'm no longer in AKL. Got out a few years ago. It's not ours any longer

I do live in Auckland.. the industrious among the young people are doing just fine - partly due to the advantages of an open global economy NZ is part of . There are of course also the lazy and the winers .. plus ca change.

Me, me, me, I'm a winner! How many rentals do you have?

none

What are your origins?
Where are you from?
How long have you been in Auckland?
What nationality?
How much loot did you bring in?

what is your blood group and passport number ?

I'm all for getting immigration under control and for seriously training our own - plenty of my blogs support the idea of getting immigration cut by say 90% ~ that would put us in line with other countries.
However most immigrants come to NZ because they want to be New Zealanders and live the New Zealand lifestyle. These immigrants may retain their odd accents and eat weird food but they are true Kiwis to the core. Where they came from and when doesn't matter much. At least that is true when the immigrants have money but under National we are now getting some immigrants that are poor and desperate to leave their place of origin and don't care too much about NZ so long as they don't have to go back.

Actually, it is probably more the monied immigrant who is not participating in the kiwi lifestyle, to be frank. It is them we do not need changing NZ.

I guess you define wage stagnation, rising costs of living and high house prices as being "just fine."

The open global economy also allowed tens of thousands of immigrants into the country, and allowed wealthy foreigners to buy large amounts of NZ's land, real estate and resources. Those sure as hell aren't advantages.

Way to tar an entire generation with the same brush. Also, the Boomers are the ones that are resistant to change. You know, the NIMBYs and the people who continually vote for right wing parties to inflate their rental portfolios.

It's the 'every man for himself' and 'as long as I look after me and the family everything else will be fine' mentality - without understanding interdependency and the bigger picture that is playing out.

hmm .. how about a picture that is bigger still ?
If it is not OK to "just" care about your family why is OK to care just about the Kiwis and not the rest of the people in this world ( including the immigrants and the potential immigrants your so love to blame for your problems ) ?

Are you feeding your own children or giving your food to the Salvation Army? Charity begins at home. NZ is a legal unit for welfare - that is tax collected and benefits (roads, schools, pensions, etc) out. Excessive Immigration breaks down the sense of identity that underlies the welfare state. I'm a pensioner and maybe will be alive in 30 years - who will be paying for my pension and maybe care then - more likely to be people who really identify with NZ than 1st or even 2nd generation immigrants.

"Charity begins at home" - I agree.. this also happens to be where my family live.
"who will be paying for my pension and maybe care then" - myself , among others - and gladly.
" .. than 1st or even 2nd generation immigrants."" - how many generations is enough in your view ?

Family paashaas; Do you think your children will ever be able to afford a home in NZ if things were to carry on are the are? Are you going to be happy to 'down size' for them or to get a second mortgage so you can give them a start in life? And no, immigrants aren't going to stick around or even come to NZ if they can't even hope to afford a home here. Don't you get it, that's the big incentive.

"immigrants aren't going to stick around or even come to NZ if they can't even hope to afford a home here" - so why campaign to reduce immigration as you do ? seems a bit unnecessary ...

Numbers will flood in as long as the gates are wide open. An impoverished life in Auckland still beats an impoverished life in the third world.

But when it gets to the point you're comparing the conditions you've created in NZ to the third world while saying "Look, we haven't made it toooo bad" then, well...yeah, that's some pretty poor policy work.

Ok, so on that logic NZ needs to open the floodgates to the billion that is in poverty in the world?

Do you live consistently with that logic? I.e. have you opened your house to the homeless who pepper Queen St, or are you keeping it exclusively for your family? If not, please try that first and report back on how it goes.

I am not advocating opening the borders to the all comers at all. The point of the post was to show the hypocrisy it the arguments of those who claim to be guided by the common good - but always draw the boundaries of the "community" in an a way that results in the greatest possible benefit to themselves at the expense of others.

That's simply not true at all. I work in a high paying industry and work with a number of young Kiwis who had to go through multiple rounds of testing and vetting processes - against a wide competition group - to get in to some junior jobs we offered. They are very industrious and top-level achievers at university, but they are not doing fine in relation to Auckland costs. So it looks like you're just righting these high-achievers off as losers and winers (sic).

The young Kiwis actually need to realise that their future wellbeing is being happily sacrificed by greedy older politicians and their core voting bloc to put as much money in their own pockets as possible.

We don't need to reproduce anymore. National have outsourced genetic reproduction.

CJ099 -Young people haven't been sold down the river at all. The whole concept of professional is incorrect. Farmers and builders should be called professionals as they provision the world with the basics of food and accommodation. Much of the rest of work-force is actually non-essential to human survival.

Why would young people stay in Auckland if they cannot afford to live there? Surely this kind of behaviour is self-sabotage?

What I often hear on here is that young people don't want to shift from their families or friends and how they should have the right to live where they choose but often those very same people are the same ones who complain about immigration numbers and so are in effect demanding a system of discrimination. The irony is it is discrimination that got NZ into this housing pickle in the first place. Councils discriminated against land owners and what they could do on their land, further they discriminated on types of buildings, types of materials etc.........there is barely one bureaucracy in NZ who doesn't have their finger in the biased housing pie........so we know the organisations involved but guess what the people working in these bigoted agencies are also heavily invested in housing. If people who can't afford to live in Auckland but refuse to shift then surely they must shoulder some of the blame for over-priced housing?

The facts are that when any Government demands the collecting of any information that information will have a secondary purpose to all those government agency type employees who have access to it. If anyone wants to get wealthy in NZ one way is to get a government created job and invest surplus income into housing.

Is this a political issue? Well of course it is........for no politician has been capable of stopping this behaviour that comes from the public sectors!!

Why would young people stay in Auckland if they cannot afford to live there? Surely this kind of behaviour is self-sabotage?

Young people stay in Auckland because that's where the bulk of NZ's jobs are concentrated. If you're a young professional/graduate you don't get any choice as to where jobs you want are located, and also to what job you want. You just have to apply for anything remotely related to what you studied, and hope for the best. It's all well and good to say, "move out of Auckland," but where do young Kiwis move to that has a similar amount of vacancies and job opportunities?

I'm 25 and a young professional and currently job hunting. Easily 75% of the jobs in my field are found in Auckland, as so many can't afford to live there and are moving out and vacating their positions. Do I want to live in Auckland? No. However, my options are:

A) Be on the Jobseekers benefit for the rest of my life.
B) Work a job completely unrelated to my skillset, work experience and qualifications.
C) Move to Auckland.
D) Move back to my parents' place and be a stay at home son.

The above applies to a lot of young Kiwis, not just me.

OK. I acknowledge that 75% of the jobs that are for you are in Auckland. That will be true in one or two things. But explain to me then that Kiwis find it works for them and move out of Auckland in greater number than the ones who are finding a way to move there.

Retirees?

Born and bred Aucklanders who can't afford house prices there? Born and bred Aucklanders who can't afford the high cost of living? Retirees? Boomers cashing up and moving out to the provinces or other cities?

At some point you might ask yourself - its it worth taking that 100K salary and living in shared accommodation into your 40's and watching all the houses around you being sold to Chinese at auction... or am I better off taking a 50-60K salary and moving to Tauranga, buying a 600K house and living a decent life?

There's no jobs in my field in Tauranga, so buying property there is pointless. Besides, I have no desire to buy a house and settle down. In a perfect world I'd disappear overseas and never come back to New Zealand.

Or move to Christchurch, get a 90k salary, and a house for $500k, so your family can live prosperously of one income, enabling you to have children, before it gets medically dangerous to do so.

You have my sympathy - however consider that the good things you like about Auckland ( good jobs in the first place ..) only exists because of the same reasons as the "bad" things ( high housing prices among others ). Cannot have the benefits of an open economy without the downsides ..

Plenty of cities have the good things without out of control property prices. E.g. you can be a .Net developer in Dallas, Texas making over $100k US and buy a house in a decent suburb for $250k. Similarly in many other cities around the world. That doesn't align at all with what you've described.

And are you arguing there were no good jobs in Auckland back when houses were affordable? Equally doesn't seem to make a lot of sense...

Dallas has no obstructionist socialist council that stops houses from being built.
Note that they achieved housing affordability without :
- stopping immigration
- banning RE purchases by foreigners ( or taxing them additionally )
- introducing punitive land or wealth taxes
- ( any other silliness you propose for NZ )

The only thing I like about Auckland is the job pool that's massively disproportionate to the rest of the country. I don't have the luxury of picking and choosing where I work, or starting a business or working remotely outside of Auckland.

So wildcard - are you and your mates gonna vote?

Yes. We're a mixed bag between Labour, TOP and Winnie.

@ notaneconomist: Not everyone has chosen a career path that allows them the flexibility to work just anywhere or to be self employed as a builder or Farmer as you suggested.

I tend to see things from the creative IT perspective as it's my industry. This line of work with is huge within the Western World and one business area that any sensible developed country should be supporting.
One thing about the IT industry is it tends to be more centered in the larger cities to be able to compete in a global market place. Auckland and Wellington are the two main centers for NZ but are fairly fragile due to being remote (But that can be an advantage in some ways due to time zones), but a very big disadvantage is the increasing high cost of living particularly for Auckland, you simply can't expect companies to keep increasing salaries to match house prices. Not if you want to compete in a global market place.

National absolutely have sold the Kiwi young down the river by doing NOTHING to help them. I'm astounded how they just sat back and let foreign investors plunder the property market for quite a few years (Mostly in Auckland) and not even collect some tax revenue from it, what morons! I see the National party as being ludicrous idiots they have to go.

As for your comment of: "If anyone wants to get wealthy in NZ one way is to get a government created job and invest surplus income into housing". Really I think your being very naive and sounds like your trying to invest in to a fools paradise.

The crux of the matter is; If you want your country to develop you need to support your infrastructure, you can not conjure high paying jobs out of thin air.

And yes it is a political issue and yes lots of Politicians have been able to deal with this very reasonably, unfortunately our current Government has proved themselves as being completely incapable due to greed.

"Not everyone has chosen a career path that allows them the flexibility to work just anywhere or to be self employed as a builder or Farmer as you suggested." - indeed - but it was their choice - therefore no point moaning about it.

Yeah really passshaas: Are you that shore sighted. Do you expect bricklayers and farmers are going to buy homes in Auckland's CBD? Even China is making a huge move to being a fully developed country and is massively investing in new technology as they move away from old world manufacturing that's been chocking their cities with pollution.

Did you know that in April this year that real estate prices in rural Xiongxan County, roughly 80 miles south of Beijing, spiked as much as 37 percent; highways jammed as speculators rushed to the obscure district. That morning, the Chinese government had announced that at the direction of President Xi Jinping, 800 miles surrounding Xiongxan would be developed into a city meant to serve as a model for China's development over the "next millennium."

Why would they want to invest in little NZ anymore, no point really is there.

They want to invest abroad, to get their money out of china, so currency manipulation won't devalue their assets.

You have missed my point entirely CJ099.

Yawn.. Then make your point clear and provide evidence while you're at it.

I would suggest you drop the rude attitude and go back and read what I originally wrote. Do you actually want to resolve the housing issue or just prefer the sound of your own voice?

CJ099 is definitely not interested in other's opinions, for him/her it's not about learning from each other, it's just about being right, and he is ALWAYS right (in his own opinion of course)

Yvil in your case; I have to admit that I've never been one for suffering fools gladly.

@ notaneconmist: I would only be repeating what other commenters had already so eloquent put. I chose to give you a slightly different perspective on the subject, that was all. I have to work for a living so I can't be on this website all the time notaneconmist.

And btw I was yawning because I was tired, it was late.

I will vote for whomever will give me more money. Fortunately it is always Labour that look out people like me and gives us more money.

Nobody cares about house buying, just need more nicer new Housing NZ houses, cause a house is only good for 5 year and then it will be old and dirty.

I disagree, I think it will be very low due to apathy.

Did anyone of you commenters read the article??
Its says the problem is; infrastructure constraints, and also there are infrastructure constraints, and one other thing that is causing the problem is infrastructure constraints.
Why is NO party coming out swinging with a plan to build 5 more new major poo ponds? and create 4 other major dams? - they who demonstrate understanding will get my vote and right now that's national.
But actually no one in Auckland wants to build poo ponds on their land. So maybe public work acquisitions are best. oh yea, lets vote the party who might take our land off us.... the system is shot!

I'm sorry, but National is not on the top rung of the "understanding" ladder.

The polls suggest a large National lead, going by comments on this site the National supporters must be the silent majority.

You're obviously not in touch with what is happening out there... trump....brexit...... U.K. Election.... all the polls got them wrong... and you're still quoting polls... good on ya...

Actually, the polls got the US popular vote right (only, it fell differently for their non-scientific Electoral College). The polls got Brexit wrong. The polls got the Dutch election right. The polls got the French election right. The polls got the Austrian election right. Polls in recent Western Australian and South Australian elections were spot on. Ditto NSW.

Polls aren't right 100% of the time and polling results change over the course of campaigns. Saying one poll is 'wrong' based on results three months out is cheap when the same polling method got it right three days out.

The odd result was Brexit. That whole country is a bit of an outier. One or two misses doesn't invalidate rigourous statistical method. It is what you should expect. (Unless you think all science is wong ... )

Science is the study of uncertainty. Religion is the relm of 'certainty'.

Whether electoral or popular, my point is that no polls indicated that trump would be the president

I always find this interesting:

http://www.dailymail.co.uk/news/article-3868446/Donald-Trump-win-electio...

Must be something subliminal going on there...

Hahaha... I've seen quite a few of winstons masks recently, does that indicate something

What type of parties have you been going to?!

You Sound eager to come along..

Polls or no polls. Mood of the nation is vote for change.

Today with social media being so active no government and media can manipulate. Also more the manipulation and denial, more bad the result for them.

Ground reality is that come election government will change and most probably Winston Peter will be the Kingmaker.

Agree

Be careful drawing conclusions like that. Your social media is an echo chamber - you only hear what you want to hear. It's completely unscientific and unreliable. Other people are in a parallell echo chamber, getting opposite reinforcement. (That is why political parties like social media echo chambers ... they can keep you from testing ideas against alternatives. )

Still in denial mode. No worries. Election not too far away and results will be out soon.

the world has changed and MSM are still cling to conventional polling which is missing a chunk of the voting population
https://www.theguardian.com/politics/2017/jun/09/digital-strategists-giv...

“Social media analysts continually sounded the alarm that all of the polls were not reflecting the actual situation on the ground in the pre-election landscape

https://techcrunch.com/2016/11/10/social-media-did-a-better-job-at-predi...

Funny how everyone with a strong opinion knows the mood of the nation. Comments on this site are pretty much dejavu every 3 years except for a few. Even more coincidental that it matches their own preference. Guess they are all kings of their own "nations".

I'm more surprised by how many people vote for the same party constantly no matter what happens, both sides of the fence. Where is the proportional government that MMP was supposed to deliver? Where are the new ideas and coalitions representing the diverse population we are?

Some time ago the then PM Bolger made a famously trite remark about the polls and obviously only because the outcome of that election had made a bit of a donkey of him it seemed at the time. In reality his complacent and dismal campaigning was a major contribution to National failing to achieve a clear majority in an election they should have won at a canter. It was, I think, W.C. Fields who stated the only reason he voted was to vote someone out, or something like that. Do believe that explains a good part of the Brexit result and it would seem that this has continued on and copped PM May with the same hard backhander which she, following the advice of the polls at the time of calling the election, just did not see. Yes polls are largely reliable but when they do turn out wrong, they are devastatingly wrong.

12
up

While quaffing a glass of the 2017 Schadenfreude, I note the following Granny Herald headline:
"Large affordable housing project in Manukau hits snag". Snag=land prices too high to make 'affordable' happen.......
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11874136

Now There's a Constraint - and all caused by the local CCO, whose CEO's gonna have some 'splainin' to do Monday, methinks.....

And there'll be plenty more where That came from, so the various Targets announced by the hapless pollies do look a trifle - shall we say - Optimistic....

Ah, the 2017 Schadenfreude. A fine vintage, that one. May I say that you have impeccable taste, sir.

Thanks for posting the link, Waymad. Shows the depth of problems with affordable land supply and the flow-on effects from that.

Isn't that special... land price is too high because the council requires more profit on the sale of the land.

I have some seriously non-family friendly words in regards to how the council has mismanaged development in Auckland. This is a timely reminder of how the issue is driven by local government.

Local government cannot fund more infrastructure to get ahead of development because they hit debt limits and get credit downgrades.

Central government closed its infrastructure providing unit -the Ministry of Works in 1988.

No one has bought land for infrastructure corridors when land was cheap greenfields sites for 30 years -so new transport, water..... projects stuck with the same escalating land price problem.

Central government doesn't want to give local government more revenue sources -it wants local government to sell community assets.

Central government in desperation even legislated for the building on reserves -Pt England, Auckland.

Central government despite not fixing the gordian knot of NZ meeting the basic need of housing its people, has allowed population growth to ramp up to its largest amount ever in 2016 -with no sign of falling.

http://www.stuff.co.nz/business/83102282/Record-migration-sees-New-Zeala...

Basically NZ Inc has been completely incompetent and we are now at the finger pointing/schadenfreude stage.

I have found that advocates for the far left tend not to present rational positions or offer intellectual discourse, as such despite loving a good debate and the opportunity to broaden my horizons via the knowledge of my fellow commentators I tend to comment less often these days.
On a side note I'm almost tempted to vote Labor this election because their plan to build more houses than national for a lower cost while also not building at various sites that national is planning to build on sounds like a pie in the sky which is very unlikely to eventuate. Their failure would set the stage for a more right wing government and likely either push the prices of housing (which I have a significant amount of vested interest in) up or cause a recession which would enable me to pick up a few more bargains.

Labour need to follow the lead of their UK counterparts and make sure the youth and the other disenfranchised of Nz fully understand how they are being shafted by the current lot and then persuade them to vote in the numbers seen in the Uk.

Get out the vote to be rid of the Nats.

"Labour need to follow the lead of their UK counterparts" - in losing the election ? I agree completely.

The End of May will be seen by the end of June.

There will be another election by the end of the year.

The youth of Britain have mobilized. As the Uk goes so will Nz.

With respect. I would say the "Youth" is correct.
Easy for people just out of a highchair to complain.
But get them to work, to earn for themselves, and that is a different matter.

The factual evidence suggests they're actually saving at a much higher rate than previous generations were, and they must be working to even achieve that.

Probably doesn't get much airtime with Hosk or Leighton though.

Yes, young people working is good. Unfortunately, National has not done anything about it for nine years. Why work for $15.50 an hour when you can get $260 a week for doing nothing?

Because it builds strength.

A year ago I had Corbin related to the nutty fringe. Which was also a common view. And now ?

now he is the nutty opposition

Can Labour deliver ?

Here's the conundrum ,

Firslty , I am just trying to get a contractor to quote for some renovations for my home , and no one is even remotely interested in even quoting . They are all too busy.

Given the massive shortfall in the construction sector , where is Labour going to find enough people to build all these houses ?

Then with regards to Kiwibuild , we have 3 children, with one in his late teens and the others in their 20's and all 3 would LOVE to own their own home in Auckland . They are all low income earners and would all qualify for Kiwibuild , and we are able to help them with up to 25% deposit each .

So they are in and would qualify .

But , almost all our friends and relatives are in the same boat with young adult kids they are able to help buy a home , and there must be tens of thousands of young people in the same boat .

Frankly , its doubtful whether the Labour party can do what it is promising

Well it is hardly going to change by bringing in yet more immigrants making it necessary for builders etc to be even more busy,, is it?
Labour won't be able to deliver without being given the chance to do so.
The cure is not more of the disease.

Especially when the disease denies their is a problem.

Labour has a history of supporting training and apprenticeships. They're fair more likely to succeed than National.

labour has announced a new work visa for kiwibuild, if you want to bring in an immigrant you must take on a kiwi apprentice.
of course the devil will be in the detail
will the apprentice age be open
will they only need to be residents or citizens
what happens if the apprentice leaves or is fired.
if this policy has holes could be another way to gain citizenship in NZ.
ie comes in on work permit, after time become resident and apprentice so new immigrant is brought in to fill the gap and so on

Wow, a 25% deposit! Your kids are incredibly lucky :) I wish my folks were in a financial position to do that...

There would be a few young Kiwis around who have wealthy parents who can buy them a house. For the vast majority of us though we're relegated to renting.

Do you have any savings , and if not why not ?

You should be paying yourself (saving ) between 15% and 20% of your take home pay

These Kiwibuild houses will be just $300 k each and a 25% deposit is $75k

Thats not much more then the price of a new UTE

Little savings in cash, as interest rates are too low to justify putting it in the bank. There's also the added risk of an OBR. Almost all of my savings are in bonds, shares, P2P investing and REITs.

I save 20%ish of my take home pay, but I'm soon to be unemployed so that'll eat into my cash for another year until I find another job. Also I will have to pay for relocation costs, bond, a few weeks rent in advance, new work clothes, transport, freighting my stuff etc.

I'm a bit sceptical as to if Kiwibuild houses will end up selling for $300k, so I think the deposit will end up being bigger. Not to mention if I bought one it would severely limit where I can work.

Good on you , you are doing well , and appear well diversified in different asset classes .

Keep at it and you will be rewarded for your prudence and patience .

And retrain in a second anchor career , I went back to study at 40 and did pretty well after that .........

Thanks :) Sending out CVs sucks, so once I find something permanent it'll be a relief. Then I can get back to saving and investing. ETFs and index funds are fantastic.

I'm also looking at the degrees on drone operations and maintenance. It would hopefully come with solid job security as I can't see the industry dying any time soon.

C'mon boatie, you're just trying (again) to weasel out of your commitment to vote for labour if they came up with a plan. At no time did you say it had to be achievable. Labour's plan is better than Nationals

Do you know what , I am keeping an open mind and am what you call a swing voter .

I have not always voted National FYI , and I am annoyed at the immigration and housing policies National have followed

If Labour details how they intend to build houses for everyone to buy at less than what we can do it ourselves in Auckland , then they can certainly have my vote ..... we need 3 houses , and there is no chance in hell of us doing this ourselves at the current level of prices .

The problem I have is that unless we address immigration , we will never sort out the housing mess we are in and Labour is not any different to National w.r.t. immigration , and their housing policy looks unworkable to me .

I dont trust Winston Peters , ACT is a dead loss , and I dont really understand Gareth Morgan

An unachievable "plan" is just vote purchasing. I'd rather not vote for any party that makes clearly nonsensical and/or unachievable policies. We have had a bit of this in the past from both major parties. Unfortunately this consigns me once again to a fringe party... sigh...

Labor have kinda gotten themselves into a bit of a catch 22 situation. If kiwibuild succeeds then house prices will drop and the economy must enter a recession because any business that has anything secured against property will face potential issues with liquidity and maintaining sufficient equity.
In the more likely event that kiwibuild fails ( achieves less than 60% of the dwellings promised ) then house prices will continue to appreciate and you'll have set the stage for a more right wing govt to take over because Labour will be perceived as incompetent.

That's not to say that if prices stay as they are or keep going up there won't be adverse consequences. Bit of a quandary.

If Labour's housing policy succeeds then at least 40,000 houses a year are being built -30,000 currently plus 10,000 KiwiBuilds. This is a high level of construction we have not seen for 30 to 40 years (but we have seen it -so it is possible). I cannot see the logic of why this amount of economic activity automatically causes a recession. I can't see the catch 22.

In a market economy -prices, quantities and quality adjust all the time -why not in housing? It might mean that prices for modestly sized but good quality KiwiBuild type houses fall in price but other houses with different qualities are unaffected. Who knows the exact effect of this policy -government is only one influencer on the market -NZ is not the Soviet Union......

But surely governments should be regulating all goods and services so that they are competitive and value for money?

Perception moves markets as the perception is that when sudden booms in supply occur then prices drop. In my opinion you'll likely get thin volumes of trading of poorer quality stocks at reduced prices for a while as those who can afford to wait out the bear cycle do so. It only takes a few houses traded at lower prices for the value of the entire stock to drop reducing all mortgage equity and discouraging new building activity.

I'm personally a fan of less regulation because I believe regulation increases costs, reduce innovation and reduce competition. Case in point is Auckland housing which is so heavily regulated that the market can't adjust for increased demand.

Pike River

Agreed, beyond a certain point regulation has unintended consequences. I much prefer government competition as a means of keeping costs in check.

- Kiwibank was trans-formative in getting bank fees under control.
- City Care jumped in when commercial rebuilds were dragging to a halt in Christchurch.

The government doesn't need to do everything, but I'm all for it having commercial operations across various industries to ensure a choice. The building materials market would be my next target.

So we are now in a "no win" situation, according to you, it seems. Allowing the country to get in such a state must surely be the ultimate demonstration of incompetence.

Moderate change to house prices is the winning scenario for the majority of the country but isn't nearly as conducive an enviroment for the making of money for me. I have been giving serious thought to jumping the fence and voting labour because regardless if a recession occurs or house prices rocket upwards again, I can make money. It is only national's steady as she goes that stunts my current wealth building strategy.

PS. At the minute I'm still leaning towards National because my wife tells me that I need to vote in the best interest of the country rather than the party I could make the most money under.

The biggest thing that Labor did for me was give me an interest free student loan which enabled me to have a deposit to buy my first residential property at 21 ( parents paid for uni, but I drew the student loan anyway because it was interest free). National removed depreciation on buildings :( .

I get the impression that Labour policies secretly favour the wealthy (anyone wealthy enough to have a family trust which they can use to adjust their income to whatever level the government handouts / below market houses are targeted at) while National ones secretly favour the lazy ( tax cuts in the lowest 2 brackets, removal of building depreciation, etc )

Nice try, no cigar

There is no catch 22. Less than 1% of business will have secured lending against new home values over the past 3 years.

Boatman, your post is one of the most realistic of the lot, yet not a single thumbs up... it shows the (low) understanding of the masses

But never your own individual bias?

There is one simply solution to the housing crisis................... stop bringing 1,000 new migrants into the country every 120 hours .

We simply cannot house these people fast enough without distorting the housing market and causing massive supply / demand pricing issues

Funny you highlight one of the key causes of our problems - National party and it's floodgates open immigration policy - yet question above whether a change in government will make any difference?

Yeah/Nah - probably not...

Will Labour really stop immigration ?

They are as wedded to immigration as Mc Donalds is to the minimum wage

The new Auckland Council release which expects to be able to penalise landbankers for holding on for greater gain fits very well with arguments like Kiwibuild and totally contrary to the limp wristed and anaemic National approach of their stewarship.

So, so many common taters are expecting More of the Same when it comes to building techniques. Armies of self-employed tradies required, hopefully with apprentices tethered to their belts, same old clonking frames together out in the always-tropical Awkland weather. Four sub-classes of LBP needed for a simple build (unless you're a Carpenter - see http://www.lbp.govt.nz/lbp/the-board/getting-licensed/licence-categories-1 ) and then there's Design and Site. Plus Elfin Safety. Plus Fencing, Scaff, Electrical tags on everything except battery tools (ever wonder why battery stuff is now up in the 54 volt range - no tagging needed if you charge the batteries off of an inverter in the double-cab ute...).

Plus you lose time to Weather, Working Habits of employees (or lack of them), Sick and Annual Leave, and you lose money to Kiwisaver employer contribs, ACC, GST and provisional tax. See the attraction of the sole trader?

Whereas a Factory build has to be the way forward for all of this. Site requirements come down to a foundation and landscaping, erection consists of a crane hire and a few bolt-togetherers, each for 2-3 days if it's a halfway decent design. Check 'Grand Designs' for some clues if unsure. Or (gasp) the Irish http://www.irishexaminer.com/lifestyle/homeandinteriors/designanddecor/m...

There is just no way the current paradigms can continue, and deliver the volumes and build quality needed.

Yes, expectations need to come down to achieve 'affordability':

  • Smaller spaces - nothing over say 140 squares
  • Hip or gable roofs with actual eaves to ensure weathertightness
  • Modular designs with maximal involvement from yacht and caravan designers to ensure space is used intelligently
  • Zero involvement with architects to ensure weathertightness and intelligent use of space
  • Multi-proof consented ex factory to ensure the stupid TLA's cannot introduce mucho time and therefore $ into the construction sequence

About the only two things Gubmint can do to speed this along is to grease the skids for the aforesaid factories and perhaps backstop the multi-proofing; and snooker the land-banker by doing a FIF-like tax on land value (deemed value is the key) plus maybe a coupla massive compulsory acquisitions at rural land cost, sold on at purchase price.

Kill the chicken, but make the monkey watch....

I do enjoy your posts Waymad, this little gem made me chuckle:
Zero involvement with architects to ensure weathertightness and intelligent use of space

Stolen, like most of my ideas, from old books, In this case Stewart Brand's 'How Buildings Learn'. www.amazon.com/How-Buildings-Learn-Happens-Theyre/dp/0140139966