David Hargreaves wonders, given the national obsession for housing, whether there could be better 'official' information available on market trends

David Hargreaves wonders, given the national obsession for housing, whether there could be better 'official' information available on market trends

By David Hargreaves

I've been wondering more and more recently whether the New Zealand public isn't being short-changed in terms of timely and accurate information about the housing market.

Just about everybody lives in a house of some description, a lot of people own them, many people invest in them. Our housing stock (given as over 1.8 million houses) is now reckoned to be worth over a trillion dollars.

Housing is a massive part of the New Zealand economy and the New Zealand psyche and it is the accepted major (and in some folks' minds the ONLY) pathway for personal investments (rightly or wrongly).

So, given this position of housing in the economy and in our lives, there would appear every reason for us to be able to access chapter and verse about houses - where they are being built, in what numbers, what they cost, who's buying them etc. In terms of people's finances and the health of the overall economy, it's important.

Now, yes, there's a lot of public and private sector information and statistics out there, don't get me wrong, but I think it's more and more relevant to question how reliable the information is - and just how accessible it is for the person on the street spending the money on houses.

Showing them the money

The other thing is, quite a lot of the information that is compiled is done so on a paid basis - IE it's necessary to front up with money and a fair bit of it, if one wants the information.

And the sources of the information are rather widespread.

Working for interest.co.nz for the past several years now I guess I've come to accept that salient housing information comes from a variety of sources - when it comes to the latest house price information we get every month, in no particular order of significance, information from realestate.co.nz, Barfoot & Thompson, QV and Real Estate Institute of New Zealand. When I really think about it though I can actually pick holes in all of it to some degree.

The obvious problem with house price information has always been trying to get apples v apples comparisons on a month by month basis. And that's very difficult when the composition of the houses sold is always different. That's just one example.

REINZ's new House Price Index, developed in conjunction with the Reserve Bank looks good and seems likely to be a valuable addition to available ongoing information. I find it interesting though that in this case you had an industry body, in REINZ's that was interested of its own volition in improving the quality of its data, while the RBNZ is obviously going to be keen to help develop any measure that helps it get a better handle on house price movements - such an important part of its ongoing monetary policy and more particularly financial stability roles.

But without this kind of aligned interest, we wouldn't have seen the HPI developed.

What prompted this?

This missive has in part been prompted by the news this week that the Ministry of Business, Innovation and Employment's new Housing Affordability Measure (yes, the acronym really is HAM, what were they thinking?) has a fairly serious problem with the mortgage rate inputs, which was taken from now retired RBNZ data and using the 'effective' interest rate on existing mortgages, rather than on NEW mortgages - the difference being something like one whole percentage point, which is considerable.

Prime Minister Bill English's response was far too glib and dismissive. "Any measure of housing affordability has limitation, whether it’s income to property value ratios, or whatever, they can’t measure everything...

"What we do know is that any measure points in the direction of getting more houses built, faster and more cheaply. And so, we focus on that."

Okay, so in other words the Government's quite happy to pick up on half-cocked information as long as this supports its basic narrative.

I think inadvertently English has neatly encapsulated the whole problem.

We've got bits and pieces of information flying here and there. These pieces of information can contradict each other.

Where's the thread?

Where's the cogent thread of truly synchronised, accurate information that can be relied on? If we have politicians basing decisions on information they, for their own agendas, decide is 'right', then we could get some pretty awful decisions made. And clearly we do. The risk is that any policy based on inaccurate or incomplete information will just be wrongly targeted and applied - and won't work.

For example we've seen the politicians jumping up and down about the numbers of foreign buyers of houses. Some political parties are putting together policies on this. We still do NOT have accurate information on the actual numbers.

Elsewhere we see Stats NZ's numbers of how many building consents for example there were - just over 10,000 in Auckland. But then we get Phil Goff the Auckland Mayor coming out and saying only about 7000 of those actually got built.

Then we've got migration, obviously a significant factor driving housing needs. Stats NZ's monthly migration figures are flawed because they are simply based on the forms you compile when you are arriving in the country. If you want the real oil on immigration though - what people really do once they leave the airport - you've got to wade through the completely confusing Immigration NZ stats. I've only ever dipped my toe in these figures, others have immersed themselves and possibly have never been the same again.

Very unsatisfactory.

In these days of great technological advances is should theoretically never have been easier to pull together vital information on which the Government, state sector, private sector and individuals can confidently base important decisions.

The quality of our data HAS arguably improved over the years, but I would say not at a rate that should have been possible with the advances in technology, particularly in recent year.

A fresh look

I would suggest the country - and this has to be Government-led - needs to have a whole fresh look at what it wants from statistical information, how that is provided and how it's paid for.

Key within this I think is the need for good information on housing and issues such as population and immigation that feed into it. At a time when housing and indeed immigration are leading so much of the political agenda, it should be a priority. Let's know the facts and stop acting on rumour.

It seems to me the logical answer would be a considerably beefed up Stats NZ, with an updated mandate in terms of its key areas of responsibility and subject priorities, and a much bigger budget. I honestly think, provided extra money and resources are applied with proper focus, that any additional resources would ultimately end up saving the country money.

At the moment we've got politicians charging round basing polices on information that suits them but which may or may not be reliable. Bad decisions set the country back and they cost money.

We deserve more.

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Agree - more information on housing would be helpful.

If nothing else, it would increase the chat and further fuel NZ's obsession with housing - which, I note, has reached fever pitch among the people who contribute here. (-;

But seriously, the better the quality of the information, the better the quality of any resultant decision.

Further, good quality information helps keep transaction costs down and makes the market more efficient - which is a bonus for those people who are actively buying and selling.

Agree - more data should be made available to support why house prices need to be tracking upwards gradually from now on especially in Auckland.

"why house prices need to be tracking upwards"

Should be 'must track upwards'.


I mean, you say some stupid things, but you do understand economic/market fundamentals...right?

Hi nymad, I've wondered the same thing and unfortunately by now I have realised the answer to your question is clearly No.

probably mentally unbalanced .. wants house prices to go up, last month says they need to go down (*see link below) then now says it NEEDS to go up .. obviously just gets satisfaction riling people up to elicit a response .. how sad

*first comment on the article:

by Double-GZ | Wed, 03/05/2017 - 10:54

It is time for the house prices to flatten or come down to help the local Kiwis and those who have been struggling to get into the property ladder. It is not fair for house prices to keep rocketing out of control and it is definitely not something that we wish to happen to any economy. Things will get better for those we have waited so far while those who’re thinking of fleeing Auckland can now reconsider staying put. The news today has brought us hope.


Low global interest rates.

It's not impossible at all that there will be short-term house price increases in Auckland.

Here's what the Reserve Bank had to say on the matter this morning (22nd June 2017):

"House price inflation has moderated further, especially in Auckland. The slowdown in house price inflation partly reflects loan-to-value ratio restrictions, and tighter lending conditions. This moderation is projected to continue, although there is a risk of resurgence given the on-going imbalance between supply and demand."

Notably, the Reserve Bank uses the expression, "slowdown in house price inflation". It does not use the word "deflation".

In any case, only the ignorant would argue that the "on-going imbalance between supply and demand" does not exert upward pressure on prices. It's certainly a risk factor.

No need or must DGZ.

Prices do go down and sideways too. Auckland is overvalued, this migration disaster will end at some point, when some common sense finally prevails.

Holding $1.5m investment homes returning 2% while prices ebb and track sideways for 3,4 or 5 years is silliness. Hence when reality returns, gains evaporate and prices will slide even more. Markets are unstoppable, Auckland is out of sync and correction will happen.

Get yourself ready for the reboot.

I will be interested to know how you interpret the rent increases in Auckland against the "supply-demand imbalance?"

More accurate Statistices would be helpful to enable us to get the truth vs alternative facts .

The Salvation Army says one thing , Housing New Zealand says something else , B&T has a different story , and anecdotally we hear of queues of viewers for a single hovel to let in West Auckland .

Shamubeel Equab has one stat as to the backlog , and Nick Smith has another number

Whats the truth and what are the alternative facts ?

Surely the whole purpose is to keep the real estate data as clouded as possible to encourage speculation. Sites like Rightmove or Zillow that list individual price changes and true days on market and previous sales history , quickly provide sufficient information on a singular platform that any informed buyer or indeed seller , from any locale,would no longer need to know whether they they simply are another cog in New Zealand's real estate machine.Alongside Auckland house prices there is this bizarre economic metric where real estate commissions in Auckland account for almost 60 percent of the national total , I cannot think of any other regional business disparity anywhere in New Zealand so distorted.

But how will the government be able to keep its head in the sand if there is good data to act on?

Let their be any data - hand it to national leaders to manipulate and lie to the people to suit their vested interest.

Nothing will help except change of government. Atleast in the first term, the new change government will be slightly more concerned and will have something to prove and achieve.

"new change government will be slightly more concerned and will have something to prove and achieve"

Do you mean like the 2008 national government lead by John Key who had grandstanded on the housing crises in 2007? Yeah they were really concerned with solving that.

Ireland has a
Residential Property Price Register
he Residential Property Price Register is produced by the Property Services Regulatory Authority (PSRA) pursuant to section 86 of the Property Services (Regulation) Act 2011. It includes Date of Sale, Price and Address of all residential properties purchased in Ireland since the 1st January 2010, as declared to the Revenue Commissioners for stamp duty purposes

It is important to note that the Register is not intended as a "Property Price Index".

In a small number of transactions included in the Register the price shown does not represent the full market price of the property concerned for a variety of reasons. All such properties are marked **.

If the property is a new property, the price shown is exclusive of VAT at 13.5%.

Housing Affordability Measure (yes, the acronym really is HAM, what were they thinking?)

Well they could have called it the Property Investor's Guide...

In the Canadian housing bubble milieu, HAM stands for Hot Asian Money.

... around our kid's school " HAM " stands for hot Asian mommies ...

For a number of years now I have tracked and saved the monthly number of rentals to let and houses for sale on Trademe for every area of the country. I then express that as a percentage of the number of dwellings or rentals in each area as supplied by Stats NZ. This gives a good idea of which area is stagnating or humming. It showed up Canterbury as tanking over a year before the media cottoned on. Auckland's numbers are mostly in the mind of journalists. Some other areas of the country have more stress on them but their price movements are not as dramatic as Auckland. This might be because the media spot light is not on them. I would love to read some decent research papers on market stress around the country. Most media stories come as a result of what vested interests are pumping out. Little wonder the political activists are having a field day.