The new Housing Minister sets out how he plans to "build communities", deal with homlessness, "build 100,000 affordable homes for first home buyers", help renters, and sort out the tax incentives

This is a speech Housing Minister Phil Twyford gave to the Salvation Army on December 1, 2017.


Kia ora tatou. Good morning. Thank you to the Salvation Army for giving me the opportunity to be with you here today.

I want to acknowledge the housing NGOs, the activists, campaigners and community organisers, including the Living Wage Movement, for the work you do in our communities fighting for social justice.

This is my first opportunity to set out the direction of our housing policy, since being sworn in as Minister in our new Labour-NZ First Coalition Government supported by the Greens. 

I am going to talk about the future of state housing, and the fight against homelessness.

My starting point is the importance of a home.

When people are homeless it strips them of their dignity and hope.

When families move from place to place because they cannot find somewhere to settle, it takes a terrible toll on them, especially the kids.

When people find no alternative to living in cold damp rentals the inevitable sickness shortens their lives.

When housing costs are so high, there isn’t enough to spend on healthy food or pay the power bill.

When home ownership is out of reach people are denied the opportunity build an asset and build themselves up.

The housing crisis is quite unacceptable for any New Zealander.

It offends the sense of fairness and opportunity for all our country was built on.

We have a broad housing reform agenda and we are already taking the first crucial steps towards fixing the crisis. 

Central to that agenda is a reassertion of the role of state housing.

We are going to put the state back into state housing.

Our Government rejects the view that state housing is a redundant idea from the 1930s and that modernisation means selling off the houses and getting charities and the private sector to do this work instead.

Given the state of the housing market right now, it should be clear to anyone that state housing – decent, secure, income-related rental housing for the people that need it most – is needed more than ever.

Our Government will not milk Housing NZ for profits. We will reinvest any surpluses back into the building of new homes and upgrading existing ones.

We will stop the mass sell-off of state housing, and as part of our 1st 100 Days, the Prime Minister will have more to say on this shortly.

I want Housing NZ to be a world class public housing landlord

1.     putting a warm dry and secure roof over the heads of Kiwis who need it 

2.     Playing a pastoral care role enabling tenants to have access to the support they need to sustain their tenancies and live with dignity

Housing NZ are up for this challenge, and we are working together on how to make it happen.

I have started a conversation with Housing NZ on how we can build back the tenancy management, giving better face to face engagement with tenants based on an ongoing relationship.

There is much to do. One small thing is the policy on tenants owning pets.

Given how important pets can be to people’s quality of life I favour a more accommodating approach that allows tenants to own pets – as long as they are properly looked after, not a nuisance or a danger to neighbours, and not damaging property.

We are also committed to working closely with the Community Housing Providers so they too can do more and do better.

I have never accepted there is a contradiction between a strong government provider and a vibrant and growing community sector.

I want to re-iterate my commitment to sit down with Community Housing Aotearoa and negotiate a multi-year plan for how we can work together to grow the sector in a way that is both ambitious and sustainable.

My vision is not for some quasi-market where community housing organisations are competing for subsidies, but instead a community of housing providers and advocates working in partnership with government, and where we can all benefit from the innovation and diversity the community sector brings.

We are going to build a lot of houses.

And we are going to build whole communities.

I want those communities to benefit from the range of housing types, tenures, price brackets and services that the community housing providers can deliver – and that the Government and private sector often struggle with.

The other big issue I want to address is homelessness.

While there is something deeply unsettling about our country’s current inability to house its own people, I do take courage from what I believe is a widespread view that the current situation is intolerable and has to be fixed.

I am also confident the policy responses are all there on the table. The Cross Party Inquiry on Homelessness run last year by Labour, the Greens and the Maori Party flushed them all out.

The early signs from the agencies working on Housing First are very encouraging, and build on significant evidence from overseas that this is a very good response to chronic homelessness, and is ready to be extended.

We are to looking to complete the roll out of emergency and transitional housing places around the country.

I don’t want to see people living in cars and in campgrounds.

And it not satisfactory for the taxpayer to be shelling out $90,000 a day on motels.

We need immediate solutions.

But I am mindful of advocates who told our cross party inquiry that we shouldn’t just build up the infrastructure of emergency housing.

They told us the best and most enduring solution is simply to build more houses.

Working through those trade-offs, and getting the right mix of targeted services and building more state and community homes is the task at hand.

Finally on homelessness, we remain committed to developing a NZ Strategy to End Homelessness and we will work with the sector on that.

I have talked about public housing, and our response to homelessness.

But we have a much bigger broader reform agenda that is needed to fix the housing market at a systemic level.

Through Kiwibuild we are going to build 100,000 affordable homes for first home buyers, half of them in Auckland.

We are going to set up the Housing Commission, a national urban development authority that will lead large-scale projects to build whole communities, with the jobs, and transport infrastructure and open spaces and amenities that communities need. Along with the housing types that people need at costs they can afford.

These communities will have a mix of state and community housing, affordable Kiwibuild homes for first home buyers, and open market homes.

One of the big differences between our Government and the last is that we are going to build affordable homes, and public housing, wherever we possibly can. 

Because if we don’t, who will?

We are closing the door on speculators. We are introducing legislation in our first 100 Days so that only citizens and permanent residents can buy existing homes. We are pushing the bright line test out to five years so if a speculator sells a rental property within five years they will pay income tax on the capital gain.

We will also shut down the negative gearing tax breaks that give speculators an unfair advantage over first home buyers.

And our Tax Working Group is being asked to design tax reforms that will tilt the playing field away from real estate speculation and towards the productive economy that creates jobs and exports.

Yesterday we passed the Healthy Homes Guarantee Bill that will set minimum standards to make sure rental properties and warm and dry. Backed up by a beefed up compliance capacity within the Ministry that will see risk-based auditing and investigations.

Next year we are going to review the Residential Tenancies Act to deliver more security of tenure for renters. Because well over a third of us renting these days we cannot continue with the current outdated law.

All this is supported by what I call our Urban Growth Agenda.  It is a set of reforms designed to allow our cities to make room for growth, and bring down the high cost of urban land that is at the heart of these problems.

I know this is an ambitious agenda. But the scale of the crisis demands ambition.

I draw my inspiration from the First Labour Government who came to office after Depression and war determined to use the power of the state for good.

To intervene where necessary to make the system work for working people.

They redefined the role of Government. They made things happen by sheer force of will, and they built a lot of bloody houses.

The Sixth Labour Government’s housing reform agenda is also about nation building.

It recognises we have a crisis, and is bold and broad in response. It has the courage to tackle deeply entrenched problems that have been allowed to fester for too long.

It redefines the role of the state, and gets it back into the business of mass home building.

It will tame the out of control speculation that has been so destructive, and modernise rental laws.

In building 100,000 houses, re-inventing state housing, and building dozens of thriving modern communities around New Zealand, it will change the face of our towns and cities.

It will create the conditions for our people to thrive.

Once implemented it will amount to the biggest overhaul of housing policy since the time of the First Labour Government.

Our belief is that it is the role of Government to do the things that we can do together as a country, to ensure people have the basics: affordable secure warm and dry housing, decent work, good health and education systems.

With those things looked after people can then can get ahead in life through their own hard work and talents.

Without that platform, there is no fairness and no equality of opportunity.

Modern governments spend so much time dealing with social problems that are in large part caused or made worse by the poverty and lack of hope and distress associated with insecure housing and insecure work.

If we can restore universal access to secure, warm and dry and affordable housing for all New Zealanders, we will make this country even better than it is.

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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153 Comments

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It all sounds so wonderful.

Wait, is that the siren call of the Central Planning Committee of the Soviet Socialist Republik of Aotearoa that I hear? Hopefully not. He does seem to have it in for residential landlords though. He appears to believe The State is a much better Landlord than anyone else could ever be, maybe even that it is the Only Rightful Landlord.

Who will be next to receive the oppobrium of the new government, I wonder?

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Those poor residential landlords. My heart is bleeding.

Wait until it's your turn.

I'm not a residential landlord, by the way. Just trying to point out The Dangerous Precedent amid the general euphoria. The left can be good at identifying problems, but have been known to be delusional when it comes to solutions. The readiness to use force against those they don't like can also be a hallmark, and there is more than a whiff of that in this speech.

If I was a residential landlord I would probably have been busy selling up by now...

My turn for what?

I was just trying to make the point that a despotic government starts by picking on an easy target. Once they have confiscated the wealth and power of that minority they move on to the next easy target. No one realises that they will be next at some stage. It is a great way to make everyone obedient.

So far your tax cut has been confiscated. Have you turned a blind eye to that?

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Tax is the price of civilization. Im happy to pay it so long as it's spent effectively and for the benefit of all. I'm glad young people aren't going to be slugged with student debt like I was.

Landlords and property speculators on the other hand have stolen hand over fist from young people. They are slime and require no sympathy.

They certainly don't inspire sympathy. However, they have just been responding to the incentives in front of them, as created by both National and Labour over the years. Labour are enjoying their honeymoon at the moment and are ignoring the fact that many of the failed policies on immigration and housing were crafted by Labour administrations. I agree about the student debt but I am concerned that the rort the academic world has pulled on us all will not get attended to. What students learn should enable them to earn more, but this vital connection seems to be ignored.

What students learn should enable them to make the world a better place, this vital connection seems to be ignored.

"better" is pretty ambiguous, no wonder its being ignored.

Can you define property speculator? A 10 acre land owner who lives in a future urban area with his family and never wishes to subdivide or companies that own blocks next to the above mentioned family man?
Should we punish them both or should you re-word your comnent?

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Oh good grief Roger W. Seriously? It took Zimbabwe almost forty years to achieve the outcome you are describing... Labour have been in government just a few weeks. The absolute worst case scenario of dire Labour destruction will be resolved in September 2020 if they go all Mao on Aotearoa. You die hard National (or is it ACT) supporters can be ever so dramatic. Some of us are looking forward to the bludging landlords of NZ actually giving something back.

Yes, perhaps I was being overly dramatic, but something about the triumphant tone of the speech seemed to get to me. As I say, the incentives were largely put in place by Labour and National failed to correct them since it suited them in the short term. Or because their advisors don't understand how things work.

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Tell us Witherspoon how do things work ?
Seems National had a leader who was on the NY Federal Reserve board & yet he didn’t seem to know how things worked
On his watch foreigners speculated for years buying and selling kiwi homes and repatriated all their profits tax free back home. That’s how National made things work

Sorry, who was the leader that was on the NY Federal Reserve Board?

Nymad
The world knows JK was not PM during the time he was on the board of the NY FED
However the fact is he had the smarts to be both in his lifetime

Actually, Sir John was not on The Fed Board. He was a member of the Foreign Exchange Committee of the New York Federal Reserve Bank. There's a whole lot of difference!
(NB Ironically, JK's boss at Bankers Trust , Ivan Ritossa, didn't get a run until he was a Barclays; 2003 - 3 years after JK!)
https://www.newyorkfed.org/fxc/members/members_past.html

"So far your tax cut has been confiscated. Have you turned a blind eye to that?"

What you never got you won't miss, Roger.

As someone that has not made my retirement income from the property market, I do not need a tax cut. I prefer seeing better spending on important services such as health, education, and police etc.

I occasionally despair at the leap many NZers often make from talk of social democracy to "reds under the bed". Especially when they're from the older generations who benefited so richly from the efforts of previous governments in areas of social policy and central involvement in housing - i.e. from being born at the right time to access affordable housing that resulted.

The picture of someone such as (for example) Paula Bennett - who was able to purchase a house using a Housing Corp loan while on the benefit - admonishing young Kiwis that all it takes is hard work, and alternately carping about the potential onset of communism in NZ, should strike any sane-thinking New Zealander as absurd.

Conspicuously absent from any of these rails against communism is a call to reduce the evil socialism that is NZ's universal Pension, given to all and sundry regardless of their need and the single biggest proportion of our welfare budget (and actually over 50% of it). If what we actually want is freedom and opportunity and an absence of communism, shouldn't those who wail about the onset of it logically start with the Pension, an actual confiscation and redistribution of wealth to many who have no need of it?

NZ has always been a social democracy and people need to be realistic about that, rather than seeing reds under the bed at any chance.

Agree, I think the Government should means test the Pension. It would be political Hare Kari, but at least they would have their dignity in Opposition.

The pension should be kept as universal but modest. A universal pension maintains the incentive to save for retirement, as the saver has the full benefit of those savings in retirement. If pensions are reduced to the extent savings are accrued then you disincentivise those savings in the first place. I appreciate it grates that the well off recieve the same pension as the not well off, but that’s the best of a range of imperfect options. So long as the pension remains modest.

I'm not necessarily against a universal pension - I just hope for more realistic assessment of NZ as a social democracy from NZers. Rather than the "reds under the bed" schtick.

Half the rhetoric trundled out against (for example) increases to student allowances can be leveraged against the Pension too. For the wealthy, it's pretty much play money that's going to be squandered on wine, flat whites and smashed avocado, sherry etc. "If we increase the pension those folk will just waste it all on beer!"

Yeah, here what u are saying. Although there is real pensioner poverty, it’s not all lattes and smashed avocado. If a modest universal pension, social welfare and universal healthcare buys us social peace so be it, I am prepared to contribute,

Bobster, Australia has a means tested pension, I agree with it since there will always be people who never earn enough to carry them through retirement and if some one has done very well in life they just don't need it. It would save having to keep increasing the age of eligability too since most labourers are physically broken in their 60's or dead.

Any threats by the state to use force legitimizes the use of force against the state and its representatives so Politicians, Councilors, Bankers and large Corporates should be careful they do not receive something they asked for.

Dear Andrew
Wonder if right wing Zero hedge will tell the sad story of 1.5 Trillion in welfare for the top 1% the GOP just handed the donor class ??
As for UK Welfare you better do some reading elsewhere because the current work paradigm will change rapidly as artificial intelligence steals even more jobs and careers from humans
Wealth will need to be distributed or massive social unrest will eventually arrive on the top 1% doorsteps

Oh, this isn't the first chapter of Animal Farm 2? Dang...

Yes, "The death of old Major marks the moment when the animals must begin to put his theory into practice. For the remainder of the novel, Orwell depicts the ever-widening gulf between the vision expounded by old Major and the animals' attempt to realize it"

Remind me who owns some of the worst maintained rentals and tiny 2 bed houses on huge sections? Is the state really good at managing property?

You couldn't be more right there. This government keeps saying "stop the selling of state housing" as if that is the wrong thing to do. As you point out we have 2 and 3 bedroom state houses sitting 800sm sections worth over 1.5 million even if you take into current market conditions. These are with in walking distance of Auckland CBD and would be perfect for locations for some well build affordable town houses.

Meadow bank train station is a perfect example of this. That is exactly were some good affordable housing should go, not miles out from Auckland where FHB will be adding to the traffic problem.

That doesn't suggest selling, though, that suggests redeveloping.

With what money and what resources?

Selling one would allow the redevelopment of 3 even 4 on the remaining land. You add supply to the market at by releasing landing that is being miss use and add even more by using the remaining 3/4 of the land to house a further 4 time more people. All without putting the tax payer out of pocket.

My point is selling does not mean bad and holding does not mean good.

Roger Roger
Guess you’ve not experienced the shocking variability of Auckland landlords
When I was a landlord my priority was to keep my tenants happy
Effectively I was renting to people for revenue not capital gain
How many Auckland landlords think only of capital gain today ?
Speculative purchase of property in Auckland has been the game for many years and frankly there is a lack of responsibility a lack of regulated standards around rental housing
You see the attitudes here all the time as spruikers speak only of capital growth not rental yeild

Well said NL

You can argue all you like about this political philosophy or that, but the issue is that people are more and more marginalized where housing goes. The private market cannot sort it, so it is up to the govt. Get all uppity about it, too bad, it has to be done.

Saying that the private market cannot sort it is like throwing Ian Thorpe into a swimming pool in handcuffs, ankle cuffs and with heavy weights attached - and concluding that he can't swim.

We all know how efficient the state is in running things lol. Government landlord will be a huge tax sink , do they have any idea how the worse 20% of tenants live??? They are welcome to house them I'm just worried about all the tax dollars they'll need decontaminating meth houses, mould houses due to tenants inability to open windows, barking dogs, utter slums - there is no magic trick that can turn the 20% of the population who live life a certain way to suddenly become law abiding, tidy respectful citizens- giving them free houses won't change this, the culture exists and labour looked set to further fuel them

Yes it challenges my senses, a street full of state houses where people tend to live on benefits and yet they can afford to feed a dog. Its a common sight in low socio areas. The mangy dog tied to a tree that barks half the night and day.
I realize that the picture that Phil is trying to paint is some nice family with their beloved lap dog. The reality is people who can't run their own lives end up with big, poorly trained, aggressive dogs that crap everywhere and bark all night.

Stop the stupid obfuscation. We have a problem where hard working people on good wages cannot afford current house prices especially in Auckland. Bringing in the problems of certain social undercurrents to confuse the issue is a dirty tactic.

The issue is that the statistics of these "problems of certain social undercurrents" are used to justify social changes despite the low probability of success with changes in benefits to the bottom decile. I'm entirely for equal opportunity. Not so much in terms of equal outcome...

Yes, Auckland housing affordability is a serious issue. How this should be addressed (or if it should be addressed outside of market forces) is am interesting subject for discussion. One should be willing to see all of the facts instead of only the facts that resonate with your belief system.

It is not hard to see what has happened due to the blind following of market forces.

This is a good argument for state houses being spread apart and immersed in other suburbs, rather than being all in a line together and creating a "projects" sort of suburb. It's a shame John Key stooped to labeling this sort of thing "economic vandalism", especially given how he benefited from the same.

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The orchestrators of the current NZ property market which includes landlords has possibly brought this country to the brink of recession or worse. Thus we have a problem that urgently needs fixing. So you landlords need to stop crying like a bunch of spoilt babies.

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Chances are, they'll also be the first to blame the new government for causing the recession. When in reality the recession will have been caused by excessive greed from supporters of the previous government, who wanted a rockstar economy, with infinite growth, and a head in the sand view towards the consequences of these policies....

If you want your cake and to eat too....get ready for indigestion...

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Independent Observer
How cruel your castigating the almighty JK government
9 glorious years of pumping the population
9 glorious years of gouging an extra 2.5% GSTax plus Extra Fuel Tax
9 glorious years of the Super City that costs more and delivers less
9 glorious years of foreign buyers tax free profiteering in NZs home market
and people actually want these loons back for a 4th term really ?

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Hallelujah! If they pull off half of that list it'll be a start to correcting this mess. So much work to fix the Nats foreign investment approach to the market. It'll cost a lot, we will probably wind up with big deficits but it needs to be done. Housing should never again become a speculators dream. Instead, invest in productive assets, imagine the pool of capital for growth of companies if 30% of housing investment went towards it.

Exactly and I hope they have the cajones to make sure it happens.

Housing the citizens of NZ is a zero sum game, you either fuck it up and the tax payer pays for it through emergency housing, accommodation supplements, increased health care, lower productivity, reduced spending outside of housing etc.

Or you build enough houses so your citizens can have their basic needs of shelter met without crippling financial consequences.

Great Speech Phil, But does anyone know who is going to build the 100,000+ homes? And how do I sign up? e.g. will it be tendered to a big company like Fletchers etc. or is Kiwi build starting there own construction company? Interested because I am a apprentice builder who would love to work building affordable homes for NZ families rather than paper millionaires in Auckland.

Good points. Not often I agree with Ecobird, but in the past, she/he suggested a company or companies that offer investment opportunities as part of Kiwibuild, not just State owned and run. I think this is a great idea, productive investment whereby Kiwis will eventually be able to own their own homes... win win.

The new homes will be built by ex landlords and ex real estate agents..of which there will be many.

Silly me. I thought builders built them?

And you think people will want to live in them.. given how shonky real estate agents (I had a parent in the industry) are in general, and how cheap a large subset of landlords are.. no, not touching those with a 10 foot barge pole.

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If the government can pull of this master plan without lobbyists, vested interests, labour/materials constraints and regulatory bullshit all getting in the way I will be mighty impressed. It will go down as an achievement of Norman Kirk proportions.

The hallowed Norm Kirk built his own home...https://nzhistory.govt.nz/people/norman-eric-kirk

Fat chance of history repeating itself - or even Rhyming, this time around.

Dear leveraged Landlord, spare no expense to keep the bank's properties up to scratch and look after the people that live in them. Now with the absence of capital gains your tenants are your bestest friends! As the situation deteriorates further so will the labour market leading to a rental property glut and declining rents. When the time arrives, rather than spit the dummy, compete with other Landlords as your tenants will soon have the luxury of choice. Don't drop the ball cause the bank pulls all the strings.

Do you really think that the proposed changes will lead to a glut in rental accommodation? If anything the shortage will get worse and rents go up! Should the economy deteriorate it won't just be landlords in the crap but many of those poor, over leveraged first home buyers who bought due to a pathological fear of missing out and so paid way too much for their slice of paradise, or should that be the financial millstone round their neck?

People who don’t have incomes can’t pay rent. A reduction in incomes mean reductions in rents. An increase in the number of available rentals represented by unsold homes will also reduce rents.

My student tenants get a 30% pay rise in a few weeks. Does this mean I can put all my rents up 30% ?

I think you’ll find that nice student won’t be your tenant for much longer if you did

But it's a Universal Pricing Signal: every Simon in the land has heard it.......

You're spot on Craig but many can't see it

As an investor with few rentals I’ve bought nothing in the past 24 months but watched with interest as the bubble keeps inflating. The only deal I’ve done is to sell off one property to get my LVRs under 35% (probably under 30% now) so I can retire, Loans are P&I and easily covering costs, all portfolio positively geared so the negatively gearing tax changes won’t be a problem.

Instead of buying I’ve been renovating my existing properties to add value- new bathrooms, removing walls for better flow, new kitchens, insulating those that needed it, replacing old log burners with heat pumps (bloody ECAN!) and waiting to see how this lolly scramble plays out. When the time is right I will jump back in, have plenty of equity so 40% LVRs aren’t an issue but I’m happy to wait another 24 months if I have to, to snap up some bargains. I’m in no hurry and can comfortably weather whatever the new govt throws my way with proposed new compliance regimes etc. I wonder how many other “investors” are in a similar position.

Craig

Craig C, you sound more like a professional Landlord and an asset to the profession. I hope there are more like you but I suspect the housing market is soaked with many whose primary focus is capital gain and will no doubt exit the scene soon.

It would be nicer to hear that you intend to leave the future buying opportunities to the FHB. If others do the same then it helps close the wealth gap. Better for social stability.

I guess you have an inner fear of missing out on buying more houses. Can you weather a 60% fall in house values first? Its entirely possible. Partly thanks to our neighbours obsessive compulsive behaviour towards housing - across the ditch.

Craig, we’re in a similar position- having low leveraged investment properties held in long term and paying tax for rental income. Cheers

As an investor with few rentals I’ve bought nothing in the past 24 months but watched with interest as the bubble keeps inflating. The only deal I’ve done is to sell off one property to get my LVRs under 35% (probably under 30% now) so I can retire, Loans are P&I and easily covering costs, all portfolio positively geared so the negatively gearing tax changes won’t be a problem.

Instead of buying I’ve been renovating my existing properties to add value- new bathrooms, removing walls for better flow, new kitchens, insulating those that needed it, replacing old log burners with heat pumps (bloody ECAN!) and waiting to see how this lolly scramble plays out. When the time is right I will jump back in, have plenty of equity so 40% LVRs aren’t an issue but I’m happy to wait another 24 months if I have to, to snap up some bargains. I’m in no hurry and can comfortably weather whatever the new govt throws my way with proposed new compliance regimes etc. I wonder how many other “investors” are in a similar position.

Craig

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They need to deal with the financialisation of our housing stock, it's the interest thats killing our economy. High housing debt = high profits for banks with lots of leverage, because nothing is as safe as houses.

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What needs to be looked at is what government does to permit, or facilitate, the non productive sector of our economy that is unaffordable housing, & undo that first. You are right on the money.

What exactly is productive? Facebook? Uber? Xero? All just represent value to some people for what ever reason. What is value? In 10 years will an iPhone still be of such value? Walkman kodac were once of high value. I can tell you that 700 sqm of serviced land that one has a high degree of control over will still have value in 10 years.

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Reading this the National party will realise what lead to their demise

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That I do agree with. They were asleep at the wheel there. Or maybe deluded by their own publicity, which was rather along the lines of:
"Move along now, nothing to see here. There is no immigration crisis. There is no housing crisis. The current account is improving. All is well".

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Nationals Bill English was caught charging the NZ taxpayer a accommodation allowance he did not require
When you have a person of that character type in government what do you expect ?
He should’ve resigned but that requires ethics
How many of you here would have knowingly made that false accommodation expense ?
Not me
Then there’s JK and his token bottle of wine to his victim !
Try pulling girls ponytails in UK and the media will run over you

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Because if we don’t, who will?
We are closing the door on speculators. We are introducing legislation in our first 100 Days so that only citizens and permanent residents can buy existing homes. We are pushing the bright line test out to five years so if a speculator sells a rental property within five years they will pay income tax on the capital gain.
We will also shut down the negative gearing tax breaks that give speculators an unfair advantage over first home buyers. And our Tax Working Group is being asked to design tax reforms that will tilt the playing field away from real estate speculation and towards the productive economy that creates jobs and exports.

Ask yourself that primary question again Phil, every day "Because if we don’t, who will?" and if at the end of your tenure you can truly say "We did!" you'll have not only saved your party's political present and future capital but in all likelihood saved your country from social upheaval.

"Ask yourself that primary question again Phil, every day "Because if we don’t, who will?" and if at the end of your tenure you can truly say "We did!" you'll have not only saved your party's political present and future capital but in all likelihood saved your country from social upheaval." I suggest this is the most quotable post for the entire year.

When the annualised median price of an Auckland home rose by 27.3 percent in June 2015, we patted each other on the back and applauded each other, trumpeting our Jagger economy. And with each slap on the back we became further emboldened as to the mastery of our economic choice.

He is an absolute dreamer!
Talk is cheap and they keep saying things that can’t and won’t be followed thru with.

Please can you experts advise us property investors what this 5 year Brightline Test is?

Does that mean that if you hold ANY property for 5 years or longer before being sold, there is no capital gains tax to be paid?

If so this is fabulous news for investors!

Celebrate with champagne

The 5 Year Bright Line Test is an automatic bail-in if you like. Any property that isn't the primary home is automatically taxed at the owner's marginal rate for any capital appreciation of the property(s). It DOES NOT remove the tax obligation of a property, regardless of time, to be taxed if the IRD deems that is was originally acquired speculative purchase. If it's held for, say, 10 years or more, and the IRD can prove that is was purchased capital gains reasons....it will still be liable to be taxed. 5 years may just be the start of a "cleaning up' the taxation mess and uncertainty surrounding all property deals. (NB: I am a property owner, and I believe that ALL income derived from the appreciation of property should be taxed - own home or otherwise. I also believe that tax should be paid on implied rent, of even one's own home, but I accept that I hold a minority view! To me, income is income is income...)

Be, very hard to prove speculative when you have held for 5 years and had rented out!

We don’t sell as returns have always been at least neural so not a problem, but may well sell some in the future when I beleive Chch market has peaked, and that is a fair way away yet, as Chch is going to boom next year as it continues to,slowly get rebuilt.

Seems a bit wish washy having a. 5 year time plus being able to tax after that doesn’t it?

Will be overturned anyway when this coalition gets voted out next time!

Even National will have learnt severe lessons from recent events so dream on.

The little MAn
Very hard to see your beloved national recovering

For a landlord your knowledge of tax law is quite unbelievable.

"We don’t sell as returns have always been at least neural so not a problem"
I assume you mean "neutral" - unless of course you are getting a bit nervous about your investment strategy, TM2.

Anyway, wouldn't that statement imply that you were in it for the capital gain?
The IRD might take the rational view that any cashflow negative or even cashflow positive under some given opportunity cost is an strategy underpinned by future capital gain. Especially if the financing has been on a interest only arrangement.

I shudder to think Paula Bennett could ever become Prime Minister.

BW
Of course capital gains on property should be taxed
Why is NZs taxation system immune ?
I’m thinking about all the tax free capital gains foreign speculators made under the JK govt for years
Now wonder how those lost taxes could’ve been collected and used for infrastructure
That would’ve required a prudent strategy of course
Something National failed miserably at

Not once,that i read,did he mention how affordable is an affordable house going to cost.
Previous comments mentioned 500k to 600k.Thats not affordable to a majority of people buying a first home.
After 100 days they will be at least 2700 homes behind.

Playing a pastoral care role.....

Pastoral care - the State is a terrible parent/pastor, because the 'care' is delivered by salaried, unionised professionals who have zero personal connection to the recipients. The former go home to comfortable lives, relationships and holidays. The latter are left to fall between the stools, experience intermittent in inconsistent case management, and new faces every few months as staff turn over. Ask any relieving teacher.....

Big Data can identify recipients fairly easily - high ACE scores https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4778324/, a quick check on parentage or lack of, and a cross-check to WINZ and the police. But 'pastoral care'...that's a sick joke.

I wonder which one he means:

1.
(of land) used for the keeping or grazing of sheep or cattle.
"scattered pastoral farms"
2.
(in the Christian Church) concerning or appropriate to the giving of spiritual guidance.
"pastoral and doctrinal issues"

Get cracking on these, Phil, make them happen quickly.

It seems to me that half this speech is missing. Where is the, ask not what your country can do for you—ask what you can do for your country.
And what is a community? Is that defined anywhere? Will these communities be all the same or somehow different to each other? Is a community just a bunch of people living in the same location or does a community share something in common, such as norms, religion, values, or an identity?
Most of this speech is just waffle really. Why not just detail the practical things that are going to be done instead of talking about building communities? No communities are going to be created, it's not even possible, unless they are going to segregate people. The reality is the last thing the government wants is for communities to develop. That's why they will mix up the housing types.

Speeches such as this are intended primarily for the gullible masses, particularly for those that voted National.

I am expecting that the "communities" he will try to build are going to be much like some streets and areas in Auckland where no one wants to even live nearby ... I am expecting this Gov to complete the first lot of either renovations or building the first batch of kiwibuild and sell it themselves ...they will fail to attract any one to buy in such "communities" ... time will tell, but this attitude and policy could only lead one way.... and when all is done and failed - use force to milk out more money from the taxpayer !

Communities is what we need to keep that Kiwi Spirit. :)

'Community' is a bottom-up, self-assembling epiphenomenon. It requires certain characteristics of the humans involved to kick off (common taters may amuse themselves by deciding upon some of these), and can easily be prevented by other human characteristics (such as, since y'all are asking, regarding your fellow humans as prey, not as compatriots).

Yet it is the common delusion of central planners everywhere that 'Community' can be 'Created' top-down, by either architectural design (Corbu), urban planning (CPTED), or Gubmints via liberal application of OPM to the oozing sore that is our underclass.

Re-cast PT's dreams as 'Company towns with an omnipotent, snoopy Pastor as yer LandLord' - the Bish on steroids, perhaps? - and the gloss starts to fade from this entire concept.....

Agreed. Community is build on people sharing some common values/norms/morals. Multiculturalism never builds any meaningful communities, just look at Auckland cbd the melting pot of many races and I don't see no community forming. Having mixed housing in one lot of land will likely cause tension as some will always be wary if the poorer folk in state housing 2 streets down will loot my house while I am gone. I rather they build housing according to the economic standing of that suburb there.

Northern Lights, National won’t need to recover anything.
He Coalition will self destruct you watch !

That may be so but National must do far better than its last 9 years
It ignored the will of the people
It kept the migrant doors wide open
Foreigners speculating in kiwi homes hurt many NZers especially young ones trying to afford a home
They did nothing
Oh Bill English did apply for accommodation allowance but was caught
You wish for the ignorant to return to governance ?

Why haven’t they banned foreign buyers and cut immigration yet? They promised to ban all foreign buyers before Christmas. Christmas is around the corner...The thunder roars loudly, but little rain falls.

Cherry keep watching
If Labour do not restrict migrants & foreigners speculating then there is no hope left for NZ
Might as well hand over to China

lol. Hopefully they can do them ASAP rather than just do before next election...

Again nz has big political parties that only serves themselves and/or minor interest groups. Think about this "national" implie they are a party for all people of nz national ether by birth or granted citizenship, yet they seem to serve foreign masters ad their people more than the people of nz. Labour implies people that works or labourers or your typical working class people and yet they would help people that don't intent to work and continue to be a burden on tax payers expenses (most of whom are your workers since they cannot get out of paye tax) for generations to come just so they can have their forever iron votes during election time. New Zealand will never be great when we have these 2 parties around.

" I want Housing NZ to be a world class public housing landlord" says Phil,
I bet that he has no clue what so ever what that means !! and Costs !!
Community housing is a Black Hole that sucks money as if it grows on trees ... the taxpayer will pay for all this mess and will cost as much as holding criminals in our prisons ...
Phil keeps saying the same thing time and again - Blabla bla ...he has not changed his slogans and moaning, since he was campaigning a year ago - I see that he is struggling to fill a Minister's shoe ... whoever reads this speech thinks he is still the opposition housing spokesman!

However, this Gov is revealing day after day its tendency to pull NZ back to the 70s or maybe 30s and stick the State's fingers in all aspects of life in the name of fairness and equality - this will blow up in their face bigtime. Phil's thinking to imitate the first labour Gov proves that he lives in another planet in a different age - Good luck.

Administering this morphine to the public can only last so long before everyone gets addicted and resist slogans and ask for the action and results

He doesnt want to sell the rotten HNZ homes, fine then wear them phil and see how much it would cost to get them up and running to your new insulation and H&S standards.

...or back to the 1890's, when Public Housing was non-existent; landlords created the slums in which the populace lived and worked?
There is a place for Public Housing in a modern society that doesn't mean "going back to the 70's or 30's". Arguably, Thatcherism/Reaganism went too far by privatising the whole economy - selling off the Council Houses of the UK ( as we did here later on). As Orwell wrote, "All men are equal, but some are more equal than others" and that isn't just applicable to Socialism. It recognises that not everyone can or will be able to own their own home - for many reasons, and a civilised society provides for that.
Has Twyford got it right? We'll see, but what he is attempting to replace was and is not fit-for-purpose in modern day New Zealand. The noble intention of allowing the stock of private landlords to fill the housing market gaps has morphed into speculation with unintended consequences (primarily, it has sucked the debt capital of New Zealand into one commodity; the debt capital that should be used to create jobs and a future for us all). It is time for a 'return' to a more moderate, middle path.

Western governments everywhere are incompetent run by lobbyists not the people
It’s very sad
This 1.5 Trillion gift to the top 1% in US is disgusting
If you could see the poverty in US today it’s a tragedy

The private landlords are doing a job. All I would want to see is that they do it without bank mortgages.
Owning property outright also avoids most of the risk of the market.
I have mentioned this before but to put both landlord and occupying owner on the same page the tax system could be used to lower deductabilty of interest while giving a bit back to occupier borrowers. If the bit lost by landlords adds up to the tax cost on the other side all would appear to be balanced out.

Seriously, you supporters of this government coalition, what have they actually physically done since they have been in except blurt out these policies????
Apart from upsetting other countries they have done nothing of any benefit to anyone
I repeat, they are all out of their depth!!!!!

What did National do in their first 2 months last term? Or alternatively national were in power for roughly 100 months, tell us 50 things they achieved so they have a better strike rate than the current government.

You are just complaining because your team lost, it sounds petty and childish.

Risky, exactly what MMP has done has been risky for the country.
National had done a great job and voted out due to a stupid MMP rule .

The same stupid MMP rule that they leveraged in each of their terms?

My friends from overseas couldn’t understand why the loser took the power in NZ. I explained to them the MMP, they were confused. :(

The confusion on their part simply highlights their own intellectual shortfalls.
It says nothing about the MMP system as a whole.

No it’s not due to their intellectual shortfalls, maybe my explanations were not professional.

Germany has an MMP system that allows the biggest party to form a government. Their election was at the same time as ours, so far they haven't been able to decide a government while we are already firing.

Yes, we’re doing fine. Whoever is the government the process of change after election goes smoothly each time although there’re complaints. That’s why New Zealand is such a peaceful country we should all be proud of.

My little cash factories are going well, 33% LVR low interest rates and rents going up. Yes just another greedy landlord who takes care of his housing stock, and his tenants. It will be a while before new supply come on the market. Not worried really about the inane comments from a some of the people blogging here who are jealous that they dont own any rentals and are not risk takers or entrepreneurial enough to figure out how to join the property market. The market will decide rents and the price of houses in the end, just as it decides the price of money.

Yep, you gotta love that 3% gross yield. who wouldn’t be happy with that? Fill yer boots.

Absent capital gains, your return on equity after deducting the risk free rate of return is zero or negative. Your equity is effectively subsidising your tenants accomodation costs. Absent capital gains, this investment only appeals to the economically illiterate.

At pkChew. "Not worried really about the inane comments from a some of the people blogging here who are jealous that they dont own any rentals and are not risk takers or entrepreneurial enough to figure out how to join the property market." Yours is the INANE comment. There are sufficient hints from comments herein that many if not most subscribers here have been fully capable of providing themselves with a very good lifestyle without having to exploit those that do not own their own home. Furthermore, to say we are jealous is merely an obscene opinion unsupported by fact and probably engendered to mitigate your guilt. Indeed the very statement that you are not really worried belies the opposite.

Building 10,000 homes a year isn't going to end the housing crisis when the current govt is still talking immigration of 40,000 to 50,000 people.
1500 refugees will use 500 of the houses.
Unless immigration is reduced to 10,000 people the housing crisis will just carry on.
Not only is the taxpayer expected to pay for the infrastructure that this insane population growth needs but now the taxpayer is even going to pay for the houses.

Taxpayers are already paying for the houses indirectly, WFF, accommodation supplement and student allowances are all backhanded payouts to landlords (at least in part).

I am hoping landlords will sell off some of their stock so people at the lower end can own one. Most older people won't be able to afford new homes.

Housing is really becoming a global top policy debate. It feels like the inflation debate of the 1970/80s. Even Tony Blair's research foundation is joining in. Doing a pretty good effort too.
https://institute.global/insight/renewing-centre/brainstorm-home-truths
https://institute.global/insight/renewing-centre/home-truths-progressive...

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Hello, I haven’t posted for a while, but still enjoy the testosterone fuelled comments.

Time to sell now. I’m at the gym this morning and I hear two around 25 year old “boys” discussing the property market. One was “advising” the other how to leverage on an existing property’s equity to buy an “investment” property. In particular he was telling the other that if you didn’t agree with the valuation on your existing property, get the valuer to value it up to what you think it is worth. I am a 70 year old woman who has heard all this before so I gave them a little “ lesson” on my lifetime experiences of one very large worldwide Stockmarket crash 1987, two housing downturns,negative equity etc etc. and even my grandparents experience of being thrown out into the street in 1929. by this time they were sitting eyes very wide and mouths agape! Before I walked out the door I said being mortgage free is the aim boys!

So when you hear the shoeshine boy advising on investments or in this case the gym boys ... it’s time to sell people. Have a wonderful Christmas everyone.

Haha yeah, 1987 was 30 years ago, so anyone younger than that wouldn't have even been born yet and anyone under say 45 wouldn't remember it to any real degree.

All they know is house prices going up. Share values going up.

We are have a great bubble of everything.

But, Davos36, I wearily repeat myself once more.

The bubbular part is northern NI. It certainly is not Christchurch. And that's down to throwing the stupid Plans under the bus, opening up subdivisions for development in a free-market free-for-all, and letting Ms Market work her wicked ways.

  • Plot prices begin with a 1
  • House plus plot prices are high 3's, low 4's for an FHB starter kit
  • Same mortgage rates as Awkland, slightly lower household incomes, but the combination adds up to superior (if not optimal) Affordability

And, of course, the market overshoots. Tradies, building companies, developers go bust in the process and spec houses remain on the books for months.

But they are not using My dime. The pain is private investment misjudgement, not compulsory Gubmint hands in My pocket.

So, sorry to let Facts get in the way of a lazy sound bite, but 'Everything' ain't 'in a Bubble'.

Please do share more of your life experience with all here, as a lot of readers including myself are ether not in the known or forgetful of the past :)

1987 sharemarket crash. Was overseas in October and notified by fax (no internet in those days) that our shares in one the most major NZ companies at the time had made us millionaires on paper while we had been away. Celebrated with the best champagne, didn’t sell any shares (tears). Caught a plane back to NZ soon after and while in the air Wall Street came tumbling down and so did our shares. We just laughed as it was all a house of cards anyway! I had worked previously as a PA for one of NZ’s most prominent movers and shakers who ended up in Jail - Ariadne is all I will say. I could write a book but will let bygones be bygones on that one. Plus a few others as well. You have no idea what Personal Assistants learn!

Property market - Bought a house in Remuera in 1987 for $600,000 a lot of money in those days. Divorced in 1990, property got passed in at auction for $300,00, beginning of a housing crash in 1990. bought a house in Wellington in 1990 for $209,000 with proceeds of divorce money, remember I’m the woman with not as much earning power as the ex! However I was mortgage free. Sold that house in 2001 for $250,000 my oh my that was a big profit wasn’t it. You see for 11 years the property market hadn’t moved very far had it! Built a beautiful home in the countryside in 2002 and sold that one in 2013, downsized to another part of the countryside with money invested (definitely not in a rental) to let me have a comfortable retirement. Now just crossing my fingers, feet and everything else that is still moving in my old body that the world will not go mad yet again. At least I have a roof over my head, no mortgage and know how to grow vegetables and cook my own meals. Investing all my energies now in my health. That’s just some of my experiences, but I’m not naming names, you better believe I have lots of stories to tell my grandchildren.

Gin, Thanks very much for sharing your life experiences. But nothing is more important than a good health and happiness. Wish you very well and good health.

Gin, thank you for sharing your experience. A lot of valuable lessons are learnt from history but many fail to heed them. Feel free to share more if you wish, without mentioning any names. Your stories would be much appreciated from this audience. If anyone else has stories from the 1987 crash and the aftermath on the property market, feel free to share.

Gin's life story - a tragic history of paying way too much for houses.
What I have taken away from this is don't pay twice as much as you need to for a mansion in Remuera when you could buy ten rental properties for the same price in West Auckland instead.
I bought a house in West Auckland in 1986 and sold it in 1991 for 50% more.
Bought a run down ten acre block in 1991 for 192K and sold it in 1998 for 380K, still run down.

What an idiotic response

Ooh, White Knight.

Why is it idiotic though? I'm just telling my story which occurred at the same time but with very different results. 600K of West Auckland property in 1986 would have been worth 900K in 1992.

600K in 1986 is like 6M today.

For your own sake, please do stop embarrassing yourself, we are trying to have a quality conversation here

I’m not sure Mr Smith ever requires a response in this forum. I don’t need a white knight, never have and never will. My life has been anything but a tragedy. The only tragedies I have experienced are the death of loved ones. I have led, in my opinion anyway, a very charmed life. Probably boring in comparison to risk takers, but nonetheless an interesting one full of love and laughter. I have never been in a position where debt has ruled my life, and the “loss” of the house in Remuera was because of a marriage ending. My choice! We didn’t end up with a huge loss once it was sold but that is another story which is private. The reason for telling it was that the housing market actually took around ten years to recover from the downturn in 1990, well that was my experience anyway. I’m really happy in my old age, mortgage free, good food on the table, wondeful husband, good friends, reasonably good health, and no other debt. Living within one’s means throughout life is what is has been about. I’m off now, still keeping memories and many corporate life secrets!

Good for you. Keep the comments coming.

There’s lots of smart, worldly and interesting people on this forum. And there’s also people like Zachary Smith.

Clearly it is because you are effing perfect and not everybody else is.

I think you misspelled 'delusional'. It doesn't start with a P.

We would all be better off if you went and got a proper job.

Egging you on to write that tell-all expose of behind the scenes at Ariadne.

Um ... no! I actually worked for him before he formed Ariadne. The takeover King!! And even then there were many many stories I could tell, but memory is fuzzy now and once a loyal PA always a loyal PA. Suffice to say I learned a lot about greed and it’s consequences. I have to say though that it took all my will not to engage in insider trading with the things I heard. I never ever did, but could have made a lot of money, and then probably lost it too!

There seems to be a real desire to fix all our problems which is great but Labour has already fallen into a big expectation hole that will suffocate them come next election. If only they had taken small steps at a time to build a big outcome rather than this type of speech painting an outcome which we all know is not really possible in their time frame - warm fuzzies ! Vision is to be commended delivery is something else........

You've told us nothing Phil. The elections over - come on, facts and figures now required!

All of Phil's speech is good for NZ people, truely. The next step is to to show a way to achieve these beautiful intentions, no more ideology, please show us a plan how you will achieve this. I don't mean this sarcastically, if they succeed, it will be a wonderful achievement, it's not going to be easy but one has to at least try to get it done.

"Beautiful intentions', indeed.

  1. Putting a warm dry and secure roof over the heads of Kiwis who need it
  2. Playing a pastoral care role enabling tenants to have access to the support they need to sustain their tenancies and live with dignity

I would like to see specifics:

  • how to build 100K houses with the 'State' back in the game in capital letters, and by implication, the Awful Private sector out of it. Who will produce, and How, for the raw materials - concrete, timber, steel, plastics, whiteware, plumbing, roofing, Gib? The usual duopolista?
  • This here Pastoral Care is shurely an Oxymoron of the first water. As I've averred above, the State is a shockingly bad parent/pastor/carer. This is so because of a simple conjunction: State minions have no 'relationship' of any description, past a simple professional case-managerial ethic, with the tenants and other recipients of this Tender Care. So we get disconnects, failures to brief the incoming shift, failures to recognise symptoms across agencies, and the fabled 6 State vehicles up the drive. Plus the Police and Health workers to hose down the environment when it all goes tits-up. And as for 'building Communities', that starts with Good Intentions and ends with Kool-Aid, in the form of meth, burgs, murders and other innocent pastimes of the underclass.

I'd recommend a couple of primers for the earnest reader:

'Life at the Bottom' - a record of the pathologies found in poor white districts in the UK Midlands. https://www.amazon.com/Life-Bottom-Worldview-Makes-Underclass/dp/1566635055

"Dalrymple's key insight in Life at the Bottom is that long-term poverty is caused not by economics but by a dysfunctional set of values, one that is continually reinforced by an elite culture..."

'Behave' - a synthesis of recent research about how and why we act as we do, from a neuro and brain centred POV,right back to evolutionary biology. https://www.amazon.com/Behave-Biology-Humans-Best-Worst/dp/1594205078

"Sapolsky's storytelling concept is delightful but it also has a powerful intrinsic logic: he starts by looking at the factors that bear on a person's reaction in the precise moment a behavior occurs, and then hops back in time from there, in stages, ultimately ending up at the deep history of our species and its evolutionary legacy."

I've read some of Theodore Dalrymple, and he's interesting. I do find some logical leaps that don't seem to make sense, and he does descend into some curmudgeonly ranting on occasion. I've found the declarations of "this is this way because of X or Y" a bit tricky. He seems to declare it rather than prove it. Much as in the same way I can't really take reading Chris Hedges too much, on the other side of the spectrum.

But having worked in poverty alleviation work, yes, there are ingrained cyclical behaviours that it can be difficult to enable people to break out of. Social disconnection seems to hamper efforts. Kids born into the environment learn these cyclical behaviours.

Also worth a read is Hillbilly Elegy for an account from someone who managed to get out of the Kentucky-Ohio poverty.

And Home Truths for a decent history of NZ's home building efforts across the 20th century, and the various governments involved in assisting the previously high rate of home ownership achieved in NZ by the 1980s. This is worth a read in relation to your first question of "Yeah, houses, but how???"

For an interesting older read (back to one of the original documenters of social issues, George Orwell's Down and Out in Paris and London is great, as is The Road to Wigan Pier.

It is extremely difficult to break away from a negative upbringing, and we are learning more and more about it is so vital in the early years that the basics are got right. Of course, there will always be exceptions, but don't they just prove the rule?
I believe mental health, or lack of, is a very strong driver of stubborn poverty, and of course, that ends up being passed on, either by nature or nurture.
Trouble is you add this to the competing for resources and you have a recipe for disaster for far too many people.

Interesting about the pet ownership. The SPCA has estimated the long term average cost of cat and dog ownership at $500 and $1000 pa respectively. Financially speaking, it many not be a good idea to encourage HNZ beneficiaries into pet ownership, not to mention the property damage. Of course if pet ownership was restricted to participants in rent to buy schemes, then there’d be no moral hazard with that.

...that's way cheaper than tax payer raised kid via dpb. Joking aside, a pet can fulfill that role for some.

When widowed nanas in council retirement units are being forced to get rid of a beloved pet cat, as is happening now, that's definitely going too far.

Here's an opportunity for the Spruikers. It comes with a Spruikers rental appraisal.

https://www.realestate.co.nz/3206050

Yes, you read it right folks, it's an "appraised" 9.5% return. So step right up and secure your investment or miss out on a unique opportunity to bail someone out of their WOF obligations.

Once capital gains are removed from the picture rental returns will head up as prices head south. As the labour markets head south so the rents will follow. Its an all round dodgy prospect to be honest.

But hey, I'm no Spruiker!