The Government will need to consider immigration's effect on housing demand before it starts reopening the borders

The Government will need to consider immigration's effect on housing demand before it starts reopening the borders

By Greg Ninness

If we are going to solve the housing crisis we need to take a serious look at the effect immigration has on housing demand.

That’s because immigration is the biggest driver of New Zealand’s population growth, which means it’s probably also the biggest driver of demand for housing.

In its annual review of population changes throughout the country, Statistics NZ provisionally estimated the population increased by 105,000 over the 12 months to June last year.

Of that, 25,600 was due to what is referred to as the “natural increase” in the population, or the amount by which births exceed deaths.

The remaining 79,400 increase was from international migration, which means 79,400 more people arrived in NZ long-term in the year to June than departed long-term.

So international migration accounted for three quarters (75.6%) of population growth in the 12 months to June last year.

But not all of those people were citizens of other countries.

The figures include returning NZ citizens coming back after an extended stay overseas, as well as citizens of other countries settling here long-term.

However we can get a reasonable idea of how much each group contributes to population growth from Statistics NZ’s migration data series, which does separate out NZ citizens from non-citizens.

According to those provisional figures, 23% of the net population gain from migration (long-term arrivals minus long-term departures) were NZ citizens and 77% were citizens of other countries, in the 12 months to June last year.

So roughly a quarter were returning New Zealanders and three quarters were non-NZ citizens.

The percentage for non-NZ citizens was unusually low due to changes in migration patterns caused by the COVID-19 pandemic.

In the seven years from 2013 to 2019, non-NZ citizens accounted for all the net migration growth because there was a net loss of NZ citizens, with more leaving the country than arrived back.

But the balance changed last year due to the pandemic, which meant fewer New Zealanders left the country long-term, more came back from overseas and fewer non-NZ citizens arrived as migrants.

If you apply that citizen/non-citizen migration ratios for the year to June to the population change measures for the same period, it suggests that non-NZ citizens migrating to NZ accounted for around 58% of population growth in the 12 months to June 2020.

That would mean the various components of population growth would have been as follows:

Returning New Zealanders: 18,262 (17.4%)

Natural increase: 25,600 (24.4%)

Overseas migrants: 61,138 (58.2%)

Total Population Growth: 105,000

That would make overseas migrants the biggest contributors to population growth by far, and of course they all need somewhere to live.

However those pressures are likely to be felt more in some places than others.

The table below shows Statistics NZ’s estimated population growth for most major cities or urban districts throughout the country, over the 12 months to June.

As well showing the effects of international migration and the natural increase in the population of each area, it also shows the impact of internal migration on each city’s population.

Internal migration is the number of people moving from one place to another within NZ.

That figure is particularly significant in the country’s most populous city, Auckland.

According to Statistics NZ, the natural increase (births exceeding deaths) of Auckland’s population was 12,800 in the 12 months to June last year.

But that increase was almost entirely wiped out by a loss of 12,600 people to internal migration.

That means there were 12,600 more people who left Auckland to live in other parts of the country in the year to June, than there were people who arrived in Auckland from elsewhere in NZ. So that left a population gain of just 200 for the year.

However on top of that there was a net gain 36,700 people who moved to Auckland from overseas.

That gave the region a population gain of 37,000 (rounded) for the year, with 99% coming from overseas.

Unfortunately Statistics NZ does not differentiate between citizens and non-citizens in its regional migration figures, so the Auckland migration figures include both NZ citizens returning and non-NZ citizens migrating here.

However applying the national figure of 77% of international migrants being non-NZ citizens, suggests around three quarters (76.3%) of Auckland’s population growth could have been attributable to migration to the region by foreign citizens coming from overseas in the year to June 2020.

Because Auckland is such a major destination for foreign migrants, it’s likely the actual figure was even higher.

Other cities where the outflow of people to other parts of the country was greater than the natural increase in their populations, making them entirely dependent on international migration for population growth, were Wellington City, Christchurch and Invercargill.

Those figures all suggest very strongly that migration by non-NZ citizens is the biggest driver of population growth and by implication, the biggest driver of demand for housing.

That appears to be particularly the case in the main urban centres.

However population growth puts pressure on more than just housing.

According to Statistics NZ, 30.5% of the net migration gain in the year to June 2020 was made up of people aged either under 18, or 60 and over (that includes NZ citizens and non-citizens).

That means that almost one in three migrants (NZ citizens and non-NZ citizens) were in age groups that have higher demands for services such as education and health and are less likely to be working.

So the effect of high levels of immigration will be felt well beyond the housing sector.

It will also affect the demand for social services such as health and education and the need for other infrastructure such as transport and utilities.

Two of the biggest beneficiaries of high levels of immigration are employers and the tertiary education sector, so it is not surprising that they are often at the vanguard of promoting mass immigration policies. However the costs of those policies, such as pressures on housing and other infrastructure, must be borne by the wider population.

While NZ has been eager to harvest the short-term economic benefits of immigration, it has failed magnificently to match that with the investment in the infrastructure that’s required to keep up with the resulting population growth. And the longer that situation lasts, the more serious the problems become and the harder they are to rectify.

The COVID-19 pandemic has given the Government some breathing space in that regard, because it has brought international immigration to a virtual standstill.

However it needs to start thinking about where it wants immigration levels to be once we are able to start reopening the borders.

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273 Comments

49
up

Excellent article on the issue that shall not be spoken of...but now has been.
As others have said, submissions on the Climate Change Commission arguing for significantly lower levels of immigration are merited.

33
up

Exactly - Why is it so hard to have any meaningful discussion on creating a well based and managed population policy – was the issue even raised during the last election cycle?

For what seems for far too long is a policy of swinging the doors open wide and seeing what happens.

And what happens is ever increasing stress and strain on the country and its resources.

10
up

Not this election cycle. But weirdly the one before that it was a hot-button issue. Golly, I wonder what changed?

Shane Jones brought it up last election, but it wasn't a key platform.

Some would say that the problem is the amount of immigration, others (like myself) would say the problem is the lack of building considering the level of immigration. To me the need to build houses is a good problem to have: it gives many people a very good income and provides a lot of tax money to the government. Why those houses weren't being built is the big question.

BTW I don't mind you speaking of it, I think your argument is fair enough, I just happen to disagree.

I am with you Jimbo. The problem need not be population growth itself. The problem is the shockingly bad way NZ deals with it.

Also I am not impressed by the argument that if we stop immigration we can keep on polluting. If every country decided to adopt that policy do you think that would stop climate change?

Who has advocated for that? Certainly not me.

"submissions on the Climate Change Commission arguing for significantly lower levels of immigration are merited"

?
I am suggesting reducing immigration is one of many approaches to address our climate change responsibility.

Fair enough, that is not commonly the case though.
But are you sure it will? Most immigrants I know had a similar footprint before they moved here: a car, electricity, etc. And the chances are that their car put out more CO2 and their electricity was generated from gas or coal. I have heard of studies that say people pollute more after moving to first world countries, but I am guessing they are politically motivated and lazily compare averages. Refugees would be different obviously.

A research paper from Australia:

"Within a decade of arrival in Melbourne, China-born urban consumption patterns were more than three times their consumption before their migration. They even surpassed the consumption levels of other residents of the suburb. Their housing consumption was 5.4 times higher than when in China, food consumption 4.7 times higher and carbon footprint 2.7 times bigger."
https://www.swinburne.edu.au/news/2018/11/chinese-migrants-follow-austra...

There's no way migrants from countries with tiny per capita footprints like India or the Philippines don't double or triple their carbon footprint moving to a developed country.

Another silly comment.

Care to explain why? I agree that having less people on the planet would result in less carbon emissions, but I am not convinced that having less people in NZ but the same number of people in the world will particularly help.

I agree. I doubt that changing migrants decision about whether to move to a polluting third world city or to polluting NZ (but hopefully getting better) makes much difference to climate change.

But for better or worse countries around the world have targets and oligations....and ongoing rapid population growth doesn't help us meet those

16
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How about we limit immigration and limit how much we pollute? Isn't this the best scenario.

Exactly

There are lots of things we could limit. I'm not convinced immigration is one worth even considering compared to car exhausts, electricity production, air travel (which immigration would only be a very small percentage of), farming, etc.

If we have a national target we are expected to meet then we'd be crazy to continue to add people while trying to do this. You can't control what's happening elsewhere in the world but at least we'd have a cleaner conscience.

19
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Guess my comment made under Gareth Vaughan's article was right...

Recently, Canada accepted everyone in the immigration lottery poll; such a desperate move aimed at post-covid recovery. Also, it is a result of short-sighted immigration policies Canada has put there for decades. Massive immigration without a vision hurts people, both immigrants and locals, and our political parties weaponise immigration for their own gains happily.

12
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NZCinese.. How do NZ political parties weaponise immigration for their own gains? I would agree that they use immigration to keep business costs lower (through slave labour), use it to increase TOTAL GDP (so that to the untrained eye it appears we are doing better) and even use immigration to forward their own international self-image (through a global village type immigration policy) to assist them in their own personal future endeavours. But weaponise?
In Canada Justin Trudeau will go down in history as the most self-image conscious, hypocritical (black face, excluding the marginalised through housing, immigration etc while pretending to champion them) two faced nut job the political world has ever seen. And sadly, in many ways, our PM is the female version.
Jordan Peterson for Canadian PM.

Fully agreed, NZChinese did not realise that away from CCP the best they could do there in NZ? is to prop the housing ponzi. Because that's the only way they contribution is wanted. Always been like that the past 150yrs, tax them, enslave them with lower wage to bitter end. Asians, where the next decade world economy recovery coming from. OZ seems harsh right now, but they actually have more positive engagement with Asians as compare to NZ - Aotearoa pretend to be, only allow to be a landlord, but if you like NZChinese? try to work say in Healthcare sectors, good luck. NZ is in massive changing phases towards second largest & fourth largest ethnicity support (Maori & Pasifika) , Those third largest ethnicity/Asians? - ha ha, try finding that kind of support... zilch. There's no support whatsoever to those tiny ethnicity (more than 20 countries of origins, affiliated them self as 'Asians' by recent census) in NZ. It's cool place for long.. drop.

Sadly, it happens. With the concept of POC, there is a prejudice called model minority, and we Asians are often the victim. However, I have faith in tiny NZ.

KS, "weaponisation" is my bad choice of the word, it sounds radical. Let me change the way to say it "our political party capitalises on immigration, one way or another, for their gains. e.g. NZF has been on the anti-immigration bandwagon for years; Nats got huge support from new Asian immigrants thru their 9 years; Labour is getting more and more support from the Indian immigrants' community yet still cannot fully recover their relationship with the new Chinese migrants after throwing them under the bus with Chinese Sounding Names under Little. It is nearly impossible to form a strategical view on immigration because of all the short-term political interests.

13
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"According to those provisional figures, 23% of the net population gain from migration were NZ citizens"

Many of whom were NZ passport holders flying under flag-of-convenience, they came, stayed 5 years, got an NZ passport and left

Figures need to show NZ born and/or NZ citizen for 30+ years.

I have seen this in action while working in the passports area. The most blatant I remember was someone applying the day they got citizenship with the delivery address being in Perth...
They couldn't even wait 10 days before skiving off to Oz

NZ passport is easy to get just like Singapore's. Many locals in Singa feel the same way when foreigners come and milk milk milk. The countries (SG & NZ) wanted GDP so what do you do? Some stayed on and contribute, others leave for pastures elsewhere. You gain some you lose some.

NZ passport is easy to get just like Singapore's. Many locals in Singa feel the same way when foreigners come and milk milk milk. The countries (SG & NZ) wanted GDP so what do you do? Some stayed on and contribute, others leave for pastures elsewhere. You gain some you lose some.

23
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"The Government will need to consider immigration's effect......"

If history is any guide they might consider it for a few seconds, look nervously at each other for a few more – and then cry “full steam ahead!”

If something has demonstrated the past year is that immigration is NOT the main driver of housing demand but monetary supply and interest rates.

Correlation is not causation.

24
up

Nonsense

The damage was done between 2000-2019
1,500,000 migrants are still here and still holding property
The locals, responding to Labour promises, no taxes, and much funding, are now leaping on board
Late arrivals to the never-ending party.

It is easy to play the blame game with immigrants, right? Well, those who arrived in 2000 are already kiwis by their own right and have paid their fair amount of taxes the same as you and I so the various governments could have done something about this. Those arriving later are mostly living in shared households and are not able to purchase their own home by a vast margin, so yes it makes much more sense than you think.

25
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Immigration, or population increase in general, is the biggest driver of housing demand. Monetary supply and interest rates are secondary.

Do you think investors would be buying up property with record low interest rates if there was nobody to rent the property to? Do you think speculators would be buying property if there wasn't a greater fool to sell on to later? Pile on 100k net migration at 10% mortgage rates, the demand will still be there.

The last 12 month drop off in immigration comes off the back of over a decade of rampant immigration. When you factor in the pandemic, there's a lot of fear and irrational exuberance out there.

"Do you think investors would be buying up property with record low interest rates if there was nobody to rent the property to?"

Yes, I do and the large numbers of empty homes confirms this.

Corrected, the banks allowed those cheap $ from overseas to park with them, large number sitting empty is usually the premium/newer class of assets to park in NZ for safe haven (you can see heaps of example in South East of AKL), but at the same time the OZ banks also being incentivised by RBNZ & govt with no LVR & lower OCR, all those QEs, FLPs, Subsidies, Deferral are not related to real economic/business stimulus, it's actually a 'stimulus' action to maintain things from collapsing. Sadly, initial QE being overshoot by around 20-30billions by country/economic/population size comparisons. Meanwhile, the savior aka 'the border' is still shut, so now is a waiting game, hurry up for vaccine (no sinovac please), then more QEs to keep the weight of Queenstown, Rotorua value up. As Down corrections means domino starts falling. So expect more QE to come but in form of supporting those tourism town, carbon neutral target/climate emergency (to sway public eyes from real housing issue), subsidy for the company that hardly trading... then offcourse the Cook Is. NZ can't afford to bleed it's NZD value from that end.. so need to be supported as well. Follow the trail of money they said... all those 'stimulus'? in the end ended up to the OZ banks. Renters private/commercial, Landlord's mortgage... Banks - cycle continues.

"Pile on 100k net migration at 10% mortgage rates, the demand will still be there"

Oh no it won't NZDan, most definitely not, there will be a flood of forced sales by owners who can't afford to pay 10% interest and no buyers as investors can't make numbers work on 10% interest rates

in fact house prices would go down by 40% in one month and anyone who rented could buy it and live in it happily

Yeah and everything should be to the benefit of renters on interest.co.Nz and not the 65% are property owners...

As someone said the other day, there are multiple major factors. There's not one or two.
Levels of immigration are ONE of the major ones. Monetary policy is another.

3 big factors (in no particular order)
- low interest rates
-crazy immigration settings
-QE and LSAP

Once you are in a moving market (up or down), the supply constrictions govern the rate of movement. Hence why Queenstown gets the big swings and why Wellington is doing go well right now. Queenstown is constricted by massive mountains and lakes restricting new supply. Wellington is constricted by massive personalities at council restricting new supply.

That's right, the problem is that the right wing media always tries to shift the attention into immigration. This is not fair.

25
up

No you are wrong. Almost none of the media have questioned immigration as one of the main factors. THAT is wrong.

This was the point of my message exactly.

I would argue it is the primary factor. The other factors are secondary eg town planning, interest rates, taxation policy changes, RBNZ LVR etc. Coupled with this are infrastructure problems and low wages growth. There is no vision for NZ. The politicians react slowly and badly but do not have a plan. They to are celebrities in their own mind.

12
up

b21...Where were the low interest rates and the extra money supply from 1990 to 2015? Mass immigration started in the late 80s. Since the early 90s we have pretty much had rampant house price increases and rampant immigration. Prior to the 1980s immigration numbers were at a sensible number (for the size of our population) and house prices were moving within sensible ranges.
Even as a teenager in the mid 80s, when people started referring to Howick as Chowick, I could see the writing was on the wall. I ,mortgaged up hugely, bought property and did not bother to study or further my career. I did, however, tell everyone how wrong and harmful immigration would be for our young and already marginalised people. Understandably 35 years ago, very few could see the monster we were creating. But today, with the compelling evidence of the last 35 years and the clear way in which society is being divided between the families with property and without it is exasperating and frustrating to hear so many people still refuting what, to me, has been very clear for at least the last 30 years.
Mass immigration causes rents and (with a lag) property prices to increase at unsustainable and extremely damaging rates which guarantee we never have a truly inclusive NZ.

I agree with you in that immigration is a factor, but it is not the only one, and far from even being the most important one yet the lazy media keeps focusing our attention to that so hopefully we forget this is the best place to hide your wealth due to the tax system we have.
Guess what has also changed significantly during the period you mention? Inequality. This is causing the rich to try to find places where to store their wealth and housing is the best option in NZ by far to do so.

22
up

What are you on about!? The mainstream media virtually never mentions the negative aspects of immigration. Can you provide some recent examples please. The only thing I ever see in the MSM regarding immigration is it being touted as 'essential' for industries like hospitality and agriculture, or that increasing diversity strengthens the country etc.

On your second point, housing is the best place to store wealth precisely because demand is so strong. This is driven largely by a high rate of immigration which guarantees further competition for rentals and property. If our population stayed stable, I doubt we'd be seeing runaway inflation in these accommodation costs.

Not using drugs mate but thanks for your concerns if that's what your question was about.

My point about media is that they tend to link immigration with housing inflation. Please read instead of jumping to conclusions.

I asked you to provide some evidence as your opinion seems contrary to the consensus which is that MSM generally never mentions the negative aspects of immigration.

Immigration IS linked to housing inflation though. I mean, the RBNZ published a report years ago (Housing Markets and Migration in New Zealand, 1962-2006) that stated:

This paper uses a structural vector autoregression model to analyse the relationship between migration flows, housing construction and house prices in New Zealand. It shows that a net immigration flow equal to one percent of the population is associated with an approximately 10 percent increase in house prices.

This was clearly before the boom in immigration from 2010 onwards. I highly doubt that the record rates of immigration since that date had little to no impact on rental cost and house price.

b21... they never even bloody mention immigration. This is the first article foccussing on it that I have read yet it has been (at the very least) one of the major causes of high rents and house prices for at least 25 years. Are we even living in the same world here?

b21... unworthy of a response.

10
up

No. The supply and demand mismatch caused by lack of construction, combined with very high population growth via immigration, is the direct cause of some of highest levels of homelessness and rental stress in the OECD.

When you have that much unmet demand for housing it has a created the conditions ripe for speculative bubbles.

Even though there was a 6 month halt in immigration we STILL had historically high levels of immigration over the full 12 month period. You can't undo 6 years of historically high immigration with a short pause in immigration.

Bang on the money with your last two sentences.

39
up

We don't need more people for the sake of it. We need to better educate and deploy those that we already have here. New Zealand should be about Quality not Quantity., whether that's tourists or immigrants.

While NZ has been eager to harvest the short-term economic benefits of immigration, it has failed magnificently to match that with the investment in the infrastructure that’s required to keep up with the resulting population growth. And the longer that situation lasts, the more serious the problems become and the harder they are to rectify.

11
up

(PS: I am an immigrant. I came here with the ability and desire to add to what I saw, and still do, as the best place on the planet to live. But all of that has been distilled down into one thing "What's the point of establishing or running a business when just buying houses will make you more money"
Some years back when I had some maturing funds I decided to toddle into my bankers to see what the latest ideas were to maximise my funds. Do you know what the Private Bankers of that entity advised me to do? Yep...
"Look. Use that as a deposit on 30 houses, and we'll lend you the rest. We have a developer whose just about finished up their build and we can put you in touch if you like"
I'd expected some sort of financial engineering - distressed debt purchase or the like. But no. It was back to houses again, and how right they were)

Dead bolt correct right there! - I bet you 100% that those is one of the OZ banks, fat chance it will be Agri bank such as Rabo for example. NZ IQ governance level is easily swayed by $.
If you're an Ozzie? I perfectly can understand to exploit this. Watch how it's pan out; all 'yes' for the following in OZ: CGT, Bank CAR, TD guarantee to name the basics.. in NZ 'no' to all of them. As a matter of facts? put more things to fulfill the binge request, eg. initial deposit & LVR removal. Now, see what will happen when your kids alcohol binge being supported by industry, hospitality, no nanny states legislature, no parents intervention allowed...observe the slow motion results. OZ always have the upper hands when the lil kid low IQ bro, already dependent.

18
up

There it is in a nutshell actually. Why does NZ need to import Uber drivers and bottle shop workers?

ps. comment not aimed at bw.

We need immigrants workers where no decent Kiwi workforce is willing to work.
Minimum wage shops, Uber drivers and farm hand and so on.

18
up

Maybe more kiwis would be more willing to work in some of those jobs if the pay was a little higher.

23
up

Jay Lim...Simply offer higher and higher wages until you have enough KIWIS to staff your business. And if I have to pay a little more for my bottle of JDs because a Kiwi is behind the counter then so be it.

Think that premise extends into manufacturing. How about we pay a bit more for that Lichfield shirt or Rembrandt suit rather than the disposable equivalents born out of sweatshops and worse overseas. If we have those workers earning, paying tax, Kiwisaving, all that contributes to a balance and self supporting domestic economy.

Rembrandt is made in China Amigo

What they're really scared of is that if wages go up rents from businesses get downwards pressure. Also, less demand for housing due to decreased population pressures would pull down rents too.

12
up

Most of the bottle shops that have sprung up are, in my view, not because there is a need for more booze outlets, but that there is a need for the means of some immigrants to rort and profit from other immigrants. I cannot be blunter about that. Bottle stores are not the only businesses there seems to be a proliferation of, and regular appearances in the news where owners are being prosecuted for operating what is little short of slave labour situations.

"We need to better educate" yes we do , who would be the teachers? those who are currently on the current teachers' salaries? To be honest , I personally absolutely admire them , especially here in Auckland, they must be very dedicated people, I would personally give up and quit if I were them , as they also need to live somewhere. And would not be surprised if they start to suddenly unfold their middle finger to everyone and say , nah - teach you future "property investors" yourself

Wouldn't it be great if we could pay the good ones more?

that would be absolutely fantastic. But who are payed more in reality? landlords?

13
up

From my nursing work experience if NZ rents and house prices were cheaper then NZ nurses wouldn't be leaving at the rate they do. And when we have a nursing shortage what does the country do? It puts nursing on the skills shortage list and lets immigration solve the problem. But it doesn't really... immigrants have health needs too, often greater than the wider population. And if the deeper problems are not addressed - like the lack of housing supply response to demand pressures - then the cycle continues - in a downward spiral.
In summary the whole thing is a massive cluster f... an entire generation of politicians, civil servants and powers-that-be have collectively made a huge mess and they don't know how to clean it up.

Yes, and it adds up to a huge waste of physical and human resources, the irony of course is we are meant to be using resources more sustainably and we are a country that could really set an example today of what the future world should look like.

Government fully understands immigration policy is the only lever that it can pull to drive for economic growth.

13
up

There are so many ways economic growth can be achieved, immigration is just the lazy man's way.

Ponzi

Silly if they do and I thought this Govt was focussed on well-being or maybe that’s for property investors only.

yeah, sure , every year more than 60000 millionaires have been coming to NZ shores :) who could easily fork out 1mil and happily live in their "high-end million dollars" houses . No , it is not an immigration , it is not supply shortage it is not anything other than current super low OCR and the ability to use unrealized equity to buy investment property , bump the OCR to just 5 % (not even talking about 10%) and make investors sell property to buy new one and you will see what are those rotten $h1tholes really worth.

20
up

Nope its an immigration problem. Pretty obvious really, if our total population starts to decrease we will have more and more empty houses and the price will go down. What needs to be discussed is a population cap for New Zealand. This will be something that will come up in every single country in the world over the next decade. Population growth forever simply is not sustainable and it begins to reduce everyone quality of life so the sooner everyone can see that the better or else the overshoot is going to lead to some very ugly events.

16
up

Ahhh – a population policy – that would be a good idea.

But no, unfortunately this government just want to stay in their happy place forever – as in going on endlessly about their response to covid.

just so you are aware , you are writing this to immigrant who came here 8 y ago, still does NOT have his own house for his family , paying more than $35k per year in taxes , and those taxes are used to pay housing subsidies which consequently keep/push the rent prices up. And you are saying I am the problem? mate are you ok? So effectively immigrants are paying taxes to keep and increase the rents they are paying . And you are sying immigrants are the problem. Go back to school mate

11
up

Do you rent a house? If so, was it build especially for you? If not, have you considered the idea that you have added to accommodation demand and you've likely displaced another person from renting it?

yes I doo rent it , because my landlord bought it using unrealized equity and interest only loan which pushed the price of that house to the level where I could non cope with and pushed me out of the market. An the property next to where I live is owned by him as well and was bought the same way. so it is not me adding the demand , I would have been the owner at lower price if the SUPPLY hadn't been restricted by those who grabs multiple properties and don't have any cash in reality

If you'd purchased it though no one else would be living in it (much as the case now). I completely agree credit supply and leverage are major issues but landlords still need people drive demand. Immigration is what supplies this non-stop demand, as such it's still very much a part of the problem of housing unaffordability.

if investors build houses to rent , I would not be pushed out of the market . NZ has a lot of land to build on,. It does not have to be in major capital cities . Make it possible for investors to buy in major cities only using realized equities and no less than 5% interest + loan body. Do not restrict immigration - now immigrants who want to get more points for residency need to go somewhere else and not live in major cities . Implement this and you will have brand new cities in 30-40 years time

13
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'Do not restrict immigration' really, I for one can not disagree more and also, I don't want another city in Nz in another 30 to 40 years time. We have enough people here now thank you very much.

enough for what ? how do you know what is enough? what would be wrong for you personally or for the economy if there was new city in the West Coast with population 150k in 30 years ?

Won't happen, thank goodness, the west coast with its lack of people and abundance of wilderness is great for the soul when you can get to it.

you are not answering the question though. So what would be wrong for the economy ? For you personally?

What would be wrong for the economy, more demand for property, geez, isn't that the problem we have now, more demand on infrastructure, the list goes on and on. For me personally, as I said, I like Nz just the way it was, peaceful and quiet, the way it was for my grandparents who were born here in the late 1800s. I don't want this to be a country crawling with people everywhere. Thats whats wrong for me personally. I dont think you get it as you dont know this country the way it was.

There is little there other than exploitation of natural resources, most of which, coal, we need to cease using. Other than that it has serious barriers to getting whatever you might make there, Alps and no good Harbour, Google Greymouth Bar crossings for a bit of a heads up there. Jackson Bay, Southern most on the SI west coast is north facing but shallow. The west coasts too physically isolated and having lived there for 12 years I revelled in the rawness, the beauty and sometimes danger it presented. We need places like that. If you don't, there are other places for you to be. Don't be coming here and demanding we live how you prescribe.

Really strange argument you put up. Lot's of back and forth with you and a few others. Well, enough is enough to me as I've lived my entire life of over 50 years here. Nz used to be a quiet little country where you could go to an uncrowded beach, find an uncrowded fishing spot pretty much anywhere you wanted. There were hardly any traffic jams, only the big main cities so you stared clear of them. Now there are traffic jams in most cities, people living under bridges, in cars etc etc. Need I go on. It's got nothing to do with race as a few here have said. We just have enough people here now to keep the essence of Nz the same. I for one don't want that to change. I love quiet country roads which are sadly becoming a thing of the past because far too many people have been allowed to live here. I'm not against immigration in totality just that the numbers should be about 10% of whats been allowed over the last few decades. I don't know what else to add. You obviously like lots of people in a country, I simply dont. A referendum on immigration would be great but that wont happen.

more people - bigger revenue streams for local business , and if you spread those people out of the major cities , business will get more , salaries will have potential to rise and landlords in major cities will get less.

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More people - more poverty. Thanks but no thanks

how would more property in remote locations due to immigrants affect house prices in Remuera ?

Unfortunately there aren't many jobs in a lot of remote locations.

You aren't doing yourself or your argument any favours I am afraid

what exactly in what I am writing you disagree with ? other than in general saying I am wrong

I don't have the time, but for a start it's a nonsense to spread immigrants out around the country. Australia tried that and it failed. There aren't enough jobs in many remote locations.
Have a good evening.

in AU this is current policy, not the policy from the past. And AU has better income/house price ratio even in the main cities. So how come it is failing ?

Why did you come to this country if you want lots more people etcetc.

Nice one, again, reiterating, I don’t want lots more people!!!!!!!!! In fact not a fan , but not against it. I am just saying that I think that “lots more people “ is NOT the primary reason of high house prices, as opposed to the monetary policies .And there are a lot of people who would agree with me, In response I was personally insulted just because I am immigrant by absolutely ignorant person

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We are a food producing nation, we do not need a large population, but we do need as much productive land as possible without further destroying what little we have left of a natural world. I would rather this country remained small and those who want to live cheek by jowl with others can find other countries to do that in.

Do not be offended as I believe comments by most on this site are not directed against the immigrants but are levelled at the politicians in hope they will think more thoroughly about what they do.

andreas... if you have a roof over your head then, it is not personal, but the chances are you are a net negative to NZ , and should never have been allowed to move here, regardless of the tax you might pay. We need our houses for kiwis and it is a fair assumption that your country of birth does not allow foreigners to live in homes that you need for your own people. You are here now so you are welcome here and are equal to other Kiwis. But it remains all but a certainty that, when we assessed your application 8 years ago, the best decision for NZ as a whole, was, unfortunately, not made.

are you nuts? was it just personal insult now? pure discrimination , reported

my country of birth does allow immigrants

Where are you from and how can I move there to buy a house and work in an unskilled job. Look forward to your help.

you would not qualify as a "good charcter" , so don't bother

So much ignorance, reported.

are you nuts? was it just personal insult now? pure discrimination , reported

and for you to be aware , those immigrants here , now have their kids born here who are also net negative to NZ? Can admin please ban any nonsense karl seastrand posts ?

andreas... yes part of the problem is that migrants have kids here and therefore add to the problems of high rents, houses lack of water etc. If we had sensible immigration settings there is a good chance your residency would have been denied. Of course because populations can grow exponentially it can be a problem. Unless you are China you cannot prevent NZ born people from increasing the population. It is their birth right. But we can and should prevent mass immigration in order to protect vulnerable kiwis. Your kids of course are kiwis the same as everyone but it is our fault. We probably made a mistake 8 years ago and one of the mistakes was not factoring in the possibility that you would grow our population. We can and should prevent foreigners from being in a position to grow our NZ population by allowing so many fewer of them to live here in the first place. Our mistake. I hope we learn from it.

FFS , "yes part of the problem is that migrants have kids" - can someone ban him!!? my kid is not a part of any problem , Watch you language. my kid is not consuming any more resources than you do , he was born in the same hospital room that you probably were too. you can just deactivate your account and make more room here for constructive conversation.

andreas... yes it is not your kids fault. We are to blame by allowing you to live here. If we had not allowed you to live here permanently then NZ being able to provide your kids (as well as our own kids of course) with affordable housing and rents and enough clean water would not be a concern for our country. But now, due to our error, we need to look after you and your kids and treat you all as Kiwis. And we will.
At the risk of evoking more sentiment, it is similar to the ISIS bride who is returning to NZ to cost us untold money not to mention other more serious (possible) social issues. I think she was born here. Is that her fault? No. But it is almost certainly our fault for allowing her parents to migrate here. They too were probably "net negative immigrants" (we should sloganise that phrase) and probably should have never been able to give birth to her in our country. We were kind, caring and far too soft and now we are paying the price for a terrible system and an even more terible decision by having to take her and her family in. ( I am in favour of taking our 1500 refugees under the UN agreement but 1500 max). And how much has our irresponsibly loose immigration policy since the 90s cost us in terms of just Covid and MIQ? Undoubtedly a huge percentage of people we (the tax payer) have paid for to go through MIQ are non-NZ born dual citizens, most of whom should never have been granted residency. This is just one of many examples of the way most migrants belong in the category of "net negative immigrants". And the worst thing of all is that we cannot blame them at all. We must take the blame for our own stupidity. But hopefully (as the extent and severity of the costs become apparent) we are finally waking up and learning from our mistakes. I sure hope so. Good luck in NZ. And if you want to live with your parents later in life, safe travels.

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Karl you seem to have hit a nerve. Andreas when you are losing an argument the solution is to think of some stronger points not try to have the other guy banned.

what strong points? He seems to be thinking that some people like him (the son or the grand/grand son of an immigrant couple) are not consuming resources in the same way as the son of immigrant couple and call that kid a problem. Just because you are here for longer does not make you contribute to this county higher value. No, this is your narrow vision is the problem.

We're pretty much all immigrants in NZ. It's a stupid topic to argue about.

My forebears were 10 pound poms so that makes me first generation NZ. I don't have strong roots to NZ - my family just happened to come here so I identify more as an immigrant. I'd hazard to say non-Maori were immigrants so that's a pretty large percentage.

We are not arguing against immigration, but we are definitely arguing about the rate of it.

and he is not arguing with me , because my points were about monetary policy affecting house prices and not immigration. So I did not see any arguments . I can see pure insult on the basis that I am immigrant and not on the basis of what I think about the issue. So I am not loosing any arguments that don't exist . where is he arguing with me? those are just xenophobic claims he makes

andreas... to be clear, I think we (NZers) are the problem. We are our own worst enemy in relation to immigration. And for the record both my kids were born overseas, I lived overseas amongst foreigners for 25 years and when I was a landlord more of my tenants were Indian than white NZers. And my wife is a foreigner who may never work in NZ but will collect Govt Super and Kiwi saver courtesy of our madness.
Also for the record our immigration policies have been a huge net positive for me personally. They have allowed me to retire in my 30s without ever really studying or working much. Immigration policies have allowed me to live in a million dollar house and do (almost) whatever I want without ever worrying about money. But what is good for me, or you or your kids is not right for NZ and IMO if we want to build a fully inclusive and functioning society there is no place for such reckless and harmful (mainly to the poor and already marginalised NZers) immigration settings.

Omg According to your logic your wife and Kids who were born overseas are also , God forbid I’m just quoting cause I just can’t tolerate that saying , “net negative” for NZ , mate, thanks for mentioning You were not studying hard. It is making much more sense now to me. Sorry not waisting my time here with you anymore . Good night

What a surprisingly bigoted comment from you karl seastrand. From Andreas' comments he's earning over $130K/year which clearly qualifies him as a skilled migrant and an asset to NZ.

Given that we're a country of migrants, how many generations does it take for someone to be considered a kiwi and in your mind be allowed to live here without being considered a drain on society?

I'v just accepted the offer with more than 160k to be honest , but not for bragging purposes am I writing this, as people like karl seastrand will still think as me and my 2y.o as pure negative to NZ , just because I rent. Just amazing.

If rents and house prices are increasing rapidly and we cannot house our own people and provide water for them all, then sorry but IMO you are a net negative to NZ regardless of what you earn and pay in tax. Everything is not about money. You are taking it (very) personally when it is not. You are not pure negative to NZ but odds on you are a net negative. Sorry but I am just being honest.

you are just being ignorant

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I am not Karl but here is my view.
I am NOT anti-immigration. I AM anti indiscriminate and very high levels of immigration.
I think there is a strong place for high skill immigration, which sounds like you.
What I am very much against is the high levels of low skill immigration we have been seeing year after year. Pay people more and I am convinced more kiwis will be interested in more of those roles.

Agree on the salaries levels in low-skilled jobs, but I can't see local RE agents requalifying into fruit pickers even if they start to earn 5k p.a. more than in RE industry. I just don't think those low skilled people is the source of the problem for high prices in housing. They don't occupy houses proportionally. In fact I don't understand why did they choose to leave their countries , to live in poverty in a new for them country (20 ppl by house) and be blamed as being the problem? was it that bad in their country of birth?

But the point that several of us are making is that pressure on rentals is a big issue. And that ultimately flows through at least some part to house prices.
Why they left their countries? I don't know, but the main countries most of our immigrants are coming from are third world hellholes, so I guess safety, education, environment etc???

so the easy and non-racist solution is: implementing hard control of how many people per sq.m (I mean in a nutshell ) can live, enforced by police and landlords who allow that must pay huge fine. Market would fix everything in this case , those low-skilled people piling in the one house would have to move to the areas where they actually can leave to NZ standard OR if they can't find such a place with their salaries they would have to leave NZ. But to reiterate , I 'm convinced that without monitory policy changes that would not fix housing prices issue

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No. The easy and non racist solution is to reduce immigration. A lot. And it's not related to race- reduce it from all countries.
We take highly skilled people, doesn't matter where they are from.

hmmm, let see , it is actually reduced , work visa processing has been literally stopped for about a year now, let's see how it will pan out . Still not seeing queues to the orchards , sorry

andreas... there are not queues to the orchards simply because the Govt is signaling that it is not necessary for the business owners to pay enough money and provide acceptable working conditions to attract kiwis to the jobs. Unfortunately the Govt have made it clear that sooner rather than later unskilled "net negative" migrant slave labour will be allowed (once again) to flood into the country and the easy option will become available again. If they cared a little more about struggling kiwis (who would love to do these jobs if wages were attractive enough) rather than business owners and migrants they would have signaled that the only option for these businesses was to find ways to attract kiwis. Same as IT, kiwis can do the work, it is just cheaper and easier for the businesses to employ net negative migrants. And that hurts the average kiwi too much.

andreas... the amount of money you earn for a job should not be relevant to the topic in my view. There should have to be strong evidence that there are no NZers capable of doing a job before we allow a foreigner to do it. There needs to be specific reasons given.
Also when there is a shortage of qualified kiwis in an industry such as IT, age care etc and we employ foreigners it should be for a strictly limited time so that the industries with shortages and companies involved have time to ensure they get kiwis into these positions within a STRICT deadline. It is insane that companies can employ foreigners on an ongoing basis instead of taking responsibility for training and attracting NZers to these jobs. There is not a job in the age care industry that NZers cannot be trained to do and I have confidence that kiwis can learn almost any IT job that exists within 3 years, if we signal to employers that falling back on cheap foreign labour is not an option. IMO the IT industry is a good example of where the foreign workers are usually not employed because they are the best and/or kiwis cannot do the job but more often because they are the cheapest.

maybe it is not enough 2-3 years to train local person to do the job of the same complexity that person from overseas were trained for 20 years? If your thinking assumes locals pickup things faster than foreigners - I am stepping away , as this conversation adds more racist shades from your side. Anyway , you can have a look at more developed in IT terms countries like US and Germany they have been attracting talents for several decades now if not longer and will continue doing that. Certainly it can't compete with "we are difrunt". In a nutshell . if you are so concerned in immigration things I strongly advise you to apply for "Immigration Officer" or some higher position like this https://www.seek.co.nz/job/51519667?type=standout#searchRequestToken=c17... and make YOUR CONTRIBUTION in a legal way instead of spreading your , sometimes purely xenophobic, views . Can assure you it will be harder job to do then you have ever done (again according to what you are saying). You will be given chance of introducing your "NET negative/positive metrics". Again , not wasting my time with you. Act in legal way.

andreas... yes, for a very large number it was worse than you could even imagine in their country of birth.

rafa....Income qualifies you as an asset to a country. Guess Putin is a massive positive for Russia then and countries should be clambering to take Eric Watson in as a resident. If Andreas has personally paid for or built more NEW housing than his family has taken from kiwis in need of it and he has not reduced our already short water supply further he might be a "net positive immigrant". Maybe.

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Immigrants are not the problem, but a rapidly growing population is, and the way it is happening is via mass immigration, and yes, that IS a real problem.

Carlos67.. it already has in many parts of the world. A neighbour with 16 people in a 4 bedroom house next door. Not unusual in Leeds or Bradford. Unheard of there 25 years ago. I wonder what has changed. But it could never happen in Auckland right?

so those immigrants do not create additional demand of houses, right? they just pack themself tighter, right? for a very simple reason - they are not the problem, they can't afford their own house.

Immigrants never save to buy their own house a few years after they arrive here. They never pay any rent either. They never do jobs that Kiwis could do. I mean how could a kiwi learn to serve you a bottle of whisky or pick an apple from a tree. And immigrants do not drive or contribute to traffic congestion or pollution either. And of course they never use water. Where were you born? Under a rock?

"I mean how could a kiwi learn to serve you a bottle of whisky or pick an apple from a tree" ... other than that immigrants can also do things like "choosing right technologies and frameworks for the solution, advise on using binary serialization to improve performance, find potential security threats and learn/improve themselves to do it ", and just to reiterate - I've seen some very talented local people in my industry but overall NZ is still a bit lagging behind in IT , that is why Skilled migrant Visas were offered , and this is not you who approved those visas, luckily there are decision makers who can think beyond " bottle of whisky or pick an apple from a tree"

andreas.. yes I would like to see a list of (truly) specialised immigrant approved jobs made public and debated. Some would be IT jobs but there would be a maximum 2 or 3 year visa granted for these jobs and strict employment conditions that you train a Kiwi to do the job then you are waved goodbye, thanked for your work and sent home. You would be prevented in helping your parents, siblings, friends from moving here and for 90%+ of foreign workers there would be absolutely no pathway to residency. That would cut our immigration significantly which would be a huge net positive for NZ. Please give us details of your country of births immigration settings and rules around work and home ownership.

I don't feel any need to disclose my origins here as my country of birth is not of immigration nature in the first place , hence, policies are incomparable . Anyway , as you were just suggested by other people, NZ is immigration country and you are actually have immigrant origins - so after what time people are qualified as kiwis and allowed to stay here for longer than 2-3 years in your view?

Poor argument. NZ is a country of immigrants = keep maintaining world leading rates of immigration.

Poor counter argument. All countries, with tbe exception of Ethiopia, are countries of immigrants.

No.
To say we are a country of immigrants therefore it follows that we should continue with massive rates of immigration is a logical fallacy.
Poor argument.

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Actually, I think your country of origin is relevant. Why? Because you seem to think it's a God given right from people all around the world to immigrate here in large numbers. But it's not. Most countries in the world, and probably your country of origin, have tighter rules than NZ and for good reason.

no, you are wrong, I think the Immigration NZ (the govt organization) has given right to people to move here, not God . And since it has been happening for more than a century , it is very likely it will continue in the future irrespectively of what you think. And the only reason why I am alright with that is not because I am immigrant by because I don't think this is the reason for housing crisis . My reasoning is related to loose monetary policy and RBNZ should tighten it. (See article posted today where the former RBNZ chairman suggest the same policy action https://www.interest.co.nz/bonds/109169/former-rbnz-chairman-arthur-grim...)

A government can change its policy. It is not bound to the same policy forever as I am sure you appreciate.
The evidence suggest that high immigration is contributing to our housing crisis as well as our infrastructure problems.
I favour much lower rates of immigration, you don't.
Different opinions, fair enough.
Good evening.

Are you ignoring what I am saying? I am saying that I am not keen on having more people here, in fact it would add up to competition in the area I am working in as well to some degree, so I would not benefit from it. What I am saying is this is not primary source of housing demand, instead people buying bunch of investment properties while having no cash is the problem. And as the evidence suggests in 2020 price growth happened with immigration being tapped

Fine. But I still totally disagree with your view that immigration is not a significant factor on the housing market.
By the way, you are wrong about immigration. There was actually quite a high net gain in migrants last year. Do your homework better rather than continually making false claims. This has already been pointed out to you.
Hey, I will even help you- have a look at Statistics NZ's website and their migration stats............

How do you explain NZ's surge in house prices from 2001- 2006?
Our interest rates were high, not low. Monetary policy was not loose.
But our immigration was high.
Again we had an immigration boom after 2011, and funny enough a housing boom followed.
You seem very defensive. This isn't personal, it's a policy matter NOT a personal or racial matter.
The evidence suggests BOTH loose monetary policy AND high immigration, along with some other factors, are causing our housing crisis.

How would you explain house prices surge in 2020 ? Massive QE and no immigration

I give up. If you are the 'skilled and intelligent' immigrants we are taking in, God only help us...
Or are you taking the piss?
Btw in the year to June 2020 NZ had a net migration gain of 79k, so it's a total.myth there was no immigration last year.
Time for you to retire.

I am not sure there is any country in the world that has accepted as many migrants into their country (as a ratio of population) than we have. Maybe a couple. Nobody is that stupid and uncaring towards its own people.

It's one heck of a social experiment isn't it? Huge influx of people from countries with wildly different cultures to NZ - she'll be right (or we'll shame, cancel and yell racist at you if you dare disagree).

andreas... there should be almost none who can stay longer than 2 or 3 years except foreigners married (long term) to kiwis and migrants who can bring millions of dollars here and invest it (NOT in property) or set up business and employ at least 10 kiwis (not migrants from their own country who they have sold residency to in exchange for slave labour). Maybe longer than 3 years ONLY on a year by year reviewable basis, which is exactly what I had to do everywhere I lived overseas. For most PR or residency ONLY after they have lived here for over 99 years.

Our nice Indian neighbours with their wee babies have been forced out so landlord could do up and sell. They are both software engineers and have been living with their babies and 1 set of grandparents cooped up in that 2bedroom flat. Just the harsh realities of life in NZ.. Probably not the utopia they envisioned when they arrived in NZ

If you saw where they came from you would realise it is utopia in comparison.

Some years ago it was said NZ would be about right with around 5 million people, so from my point of view the conversation has been had, and now we are there. We should not need to discuss how many more, we have enough

PS the world population is already well into overshoot, we are using the resources of this planet as if we have another tucked away in the corner for spare parts, and there are many people in the world who need their living standards lifted, so even at the number we have now, in order for them to enjoy a reasonable standard of living, is far too high.
It is a very real existential problem right now.

Exactly. But for many it is easier to blame the poor rather than those self-made successful billionaires they aim to be like some day.

I think people need to realise the Government is wanting large immigration to fill the gap in tax revenues from retiring Boomers i.e. we cant afford to pay their super. They wont tell you this, but if you check the stats the huge rise in retirees and low increase in the tax base is driving this. What is important is the number of people being allowed in. I prefer it at the lower level. What is also interesting is that most rich countries are doing this however NZ typically gets the lower quality people as there are better options for immigrants such as USA and Australia.

so , it would be logical in this case if govt and RBNZ would provoke and change policies so that people start earn more taxable income , rather then untaxable property capital gains.

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I am guessing you will find that at least 60% of our immigrants are now low skilled, penniless people from either India, SA or The Philippines, probably much higher than 60%.

can you please provide the source ?

I said guessing. It is easy to look up so do it and show my guess was inaccurate! No. Didn't think so.

I am guessing it is 5% , so find sources and prove I am wrong. Who need our guesses ? Would you like govt builds policies based on guesses ?

I think you will find that it's more than 40-50% from those three countries.

Fritz.. sounds right. And increasing exponentially. Two of those countries in particular are absolutely notorious for a huge percentage of their "new NZ" kids returning to the motherland around age 18 or 20 to find a "spouse" and often some essential workers for Mum and Dads bottle store or restaurant as well. In these two countries spouse (very often) translates to paying customer. And how do these paying customers recover their "investment". Well, they help to arrange a few student and working visas of course. And round and round it goes till we wise up.

> That’s because immigration is the biggest driver of New Zealand’s population growth, which means it’s probably also the biggest driver of demand for housing.

Proof? I'd wager that there's a much stronger correlation between availability of credit and house prices, than levels of immigration and house prices.

How can our high levels of immigration *not* have at least a significant effect?
It's just math. Demand goes up by X, supply goes up by y. One of the reasons X has been rising so much is because of high levels of immigration.

Demand in a financial sense is not a measure of what people want, or even need. It's a measure of what they're buying. It's not good enough to just put hands on hips and proclaim "well, they have to live somewhere..."

Did demand - *in a financial sense* - decrease last year with the reduction in immigration, or did it increase with the availability of credit?

Both are the result of poor or lack of Govt policy, that includes the RBNZ which are just another branch of the government. The politicians are asleep at the wheel.

chebbo.. stay off the drugs! (housing = rents and house prices).

Offensive and simplistic comment.

Our housing crisis is not JUST about house prices. We now have the highest levels of rental price stress for low income earners in the OECD. We have some of the highest levels of homelessness. These issues are purely the result of the supply/demand imbalance.

That supply/demand imbalance adds fuel to the debt based housing ponzi. You need BOTH factors to get into the mess we are now in.

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Exactly.
And disproportionately, Maori and Pasifika are easily the most negatively impacted.
Our policy of extremely high immigration is racist, NOT those who are opposed to it.

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Absolutely correct. There is no reason why young unemployed maori should not be driving the taxis at the airports around the country. I am amazed that the maori leaders do not make more noise about how the mass immigration has hurt Maori most.

Yes but those are two separate issues, and the one being discussed in the article is the impact of immigration on house prices.

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What have many people been saying for years now. It is an absolute certainty that allowing immigrants into the country while we have our own citizens living in motels cars and tents is totally unacceptable. It is the equivalent of letting a whole bunch of strangers into your home and turfing your own children out of their bedrooms onto the street. Further if we are sincerely serious about reducing our carbon emissions (as opposed to the typical insincere window dressing of this government), then we shall stop our imported population growth and allow our low birth rate to gradually reduce it. I suspect that the money that we save from chasing ever increasing infrastructure demands will go a long way toward paying for the superannuation shortfall.

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Excellent article. I would also say that the negative effects of immigration on ever-increasing, extortionate rents cause even greater social problems than the negative effects immigration has on house prices.
And of course high rents make it more difficult for FHBs to save a deposit meaning the two issues are inextricably linked.
Hopefully we will see more articles like this from other media outlets and the media will finally break the shackles and start to ask these uncomfortable questions as a matter of course without the fear of being cancelled or personally vilified. Thanks Greg.

12,600 people left Auckland to live in other parts of the country in the year to June 2020. So that left a natural population gain of just 200 for the year.
For the next year to June 2021 the numbers leaving Auckland will likely exceed those. But with no immigration at all. Eventually Auckland will run out of credit worthy buyers and renters. The stupid price rises of the past 6 months will be unwound.
Or FHB grant caps for property value and income will be lifted . Mortgage rates starting with a 1 will be ubiquitous. Just to keep the party going a bit longer. Until it is politically acceptable for the borders to be opened again.

The numbers game from Greg to crunch, migrants number that able to buy RE to live on vs the local investors that buy multiple RE which recently outbid the FHB. Bottom line, to support/distort the housing ponzi, the RBNZ is overshoot the QE by around 20-30 billions. The expectation is the continuing ponzi by the govt, by opening the border, to continue buffering the market values, expect the ease of capital inflow means the source of income, regardless related to AML or soft version of it, will be lightly enforced.. as NZ euphoria feel must be kept.

We need a National Plan - for how the country looks like in 2050 - one that ties in Climate Change, Health and Wellbeing of our citizens, Future Infrastructure requirements, long term sustainability and every other aspect of policy / government spending / decision making is answerable to that one national plan but with those areas as the drivers.

So we have to balance any future immigration numbers against the infrastructure needs/deficits, their ability to contribute to the health and wellbeing of the nation, and if their being here is sustainable - so a young family with Dr and Teacher is more likely to meet those criteria than immigrants to be chefs or tour guides -

Dah!!! Immigration is the root cause of the problem.

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Everyone knows it - even the people with relatives waiting to come in and the save the world brigade who pretend otherwise.

Should we be having a serious decision on what we want NZ to be like in pop. and dempgraphia? Yes of course we should.

But the effects of immigration are only a symptom of demand being higher than supply. AND if we had less immigration, then house prices would still be higher than needed, because the system is geared up to ALWAYS limited supply relative to demand.

Immigration is an accelerant, like lower interest rates, starter home loans are, etc. They are not the fuel or the ignition source. If the fuel is not ignited by supply restrictions, then accelerants like immigration, etc have almost no effect.

Jurisdictions that have high immigration and no supply restrictions do not have house unaffordability problems.

"the system is geared up to ALWAYS limited supply relative to demand.:
Indeed.
But it's not 'demand' per se that's the determinant, but the ability to pay.
Take that away and no amount of restrictions to supply will help until the price curve falls. (ie: the top falls as those lower down can't 'climb' further up the mythical ladder without the ability to fund their desire).
That's why we see, here and pretty much everywhere else, every effort put into 'the ability to pay' and once that goes - and it will - it's game over.

If supply restrictions were removed and housing supply was allowed to equal housing demand, at the rate of demand, then the cost of that housing supply would at its best economic value, which is approx. 3x median income, ie the cost of housing would fall dramatically and thus the ability to pay is improved.

And yes, I would say the 'ability to pay' is almost used up, and that shows up by more and more Govt. assistance(subsidies) needed to own or rent a home.

And this is further compounded because these subsidies only increase demand, not supply, so it becomes a self-fulfilling prophecy of increasing unaffordability, which at some point is non-sustainable.

But how would that supply meet that demand? It would need more and more foreign workers to enable it, then we just self perpetuate things.
Unless we focused massively on training and apprenticeships.

It's easy to import housing, just like cars, although of course houses have to be in prefab form. But that is not the point.

I'm not saying have open immigration.

There are two parallel issues to consider and not conflate the two.

One is the rate of demand, and in the context of this article is the amount of immigration. The other, two, remove supply restrictions so they can meet the demand, whatever that demand is.

It wouldn't matter how much or little the demand was at the moment, the system would supply the supply always less than needed to meet that demand.

That's why even as we are increasing supply at the moment, prices are still going up.

In a truly free market, supply equals demand, which not only means if demand increases, so does supply to match it, it that also means if demand falls, supply reduces to match it.

Dale... so translation. Keep continuously throwing copious amounts of gasoline onto the fire.

Yes, that is what they are doing, and they are dumbfounded and perplexed that for some reason the fire is getting bigger.

Just reading thru the "Rental Ring Fencing Taxation Rules" implemented 2019. They must be hurting by now. Surely the novices leaping in now are being fully advised by their bankers

and don’t forget that many of those immigrants are using us as a stepping stone to Australia. Chatting yesterday afternoon about the number of returning kiwi’s using the 2 weeks free managed isolation then the day after release catching the plane to Aussie.

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Remember when you were immediately "slammed" as being racialist for pointing out the bleeding obvious fact that mass immigration was wrecking your country and destroying your future.

Now it's the future and it turns out the "racialists" were actually right.

Get woke, go broke.

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Thanks Greg for being brave enough to publish that which no-one else will talk about.

I would add that the *composition* of immigration is important in terms of impact on house prices and rents. So much economic analysis looks at aggregate data rather than disaggregated data.
From 2001 to 2006 we had a boom in people (both Brits AND kiwis) coming to NZ from the UK. At the time our house prices were comparatively low, and one pound stirling equalled $3.
So, a key reason for house price inflation (at a time when interest rates were high).
Overall, our immigrants are now poorer and appear to be renting much more than buying. I suspect now that immigration has more impact on rents than house prices.

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So many other reasons to cut immigration

Auckland roads are coming to a standstill
We dont have enough water
Sewage systems are under intence pressure and beaches regularly are closed due to this
on street parking is getting jammed due to infill housing

Im sure there are more...

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Hospital waiting lists

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Actually funny enough I have been waiting over 2 hours to see a doctor in a clinic after my daughter injured her leg at school. Almost everyone waiting in front of me are young and with foreign accents

How dare they use their foreign accents. If they're not old and with raw kiwi accent they don't deserve to be served, right Fritz?

Come on, you know what my point was...
That high population growth mainly fuelled by high levels of immigration is overloading our social services....

If we had a register of beneficial ownership of property in this country we would have actual data to have a meaningful discussion not just pluck some personal view point out of our a^*ses as per usual.

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Eighty percent of kiwis know this already but so unusual for a journalist to put it in print.

A selection of interest.co.nz headlines:

"Housing market booms as prices and sales volumes set new records" (Dec 2020)
"Population growth from migration down by 92% in November year-on-year" (Jan 2021)
"Annual net migration gain falls to its lowest level in seven years" (Feb 2021)
"Westpac economists see 17% house price growth this year but falls in prices by 2024" (Feb 2021)
"Records all around in the searing mortgage market in 2020" (Feb 2021)

and then :

"Immigration is the biggest single driver of housing demand" (Feb 2021)

?

What was the population gain from immigration from 2001-2019?
Does a isolated year of low immigration negate the financial impact of a decade of extremely high immigration?

I'm curious to hear your thoughts whether you believe it does. Clearly there's other factors that play a large part (credit availability) but I wouldn't be so foolish to completely discount the impact that our high level of immigration has had over the years.

If you purchased a house in Auckland 15 months ago for $2 million would you sell it today for less?

In 2009 the Government introduced the investor visa for any migrant who could bring $3 million with them and at least $1½ million could be invested in real estate. Suddenly houses worth $800k were selling over the phone, for $1½ million, sight unseen. Do you think those buyers are sellers yet

Great point.
And you wouldn't need a *large* number of those people to contribute significantly to pushing house prices higher.
It comes back to my key point, the composition (ie. Wealth profile) of immigrants has a key effect on house price effects.

but people like karl seastrand would still blame those who lives as 20 people per house

>I wouldn't be so foolish to completely discount the impact that our high level of immigration has had over the years.

No one is seriously discounting the impact of immigration. There's a large body of research on the topic with plenty of numerical analysis over several decades of data, some of which is linked elsewhere on comments (though primarily ignored by mostly hysterical comments about dairy owners).

My point is that it seems particularly bold at this particular moment to be pinning record breaking house prices on immigration. At this point, even monthly increases outstrip the expected annual increases from net migration based on historical data, at a time of zero migration.

To be fair, the author has commented (also lost in the noise) that the article is about housing demand, not house prices.

But ultimately it's linked back to the same topic of solving a housing crisis, which leaves everyone rushing for the seductively simple takeaway of "immigration is the reason for high house prices".

Go and look at the data first.

Is anyone here really saying, simplistically, that "immigration is the reason for high house prices"?

I think most are saying it is ONE of the main factors affecting the demand for housing.

A view, which I hold, is that the 4 main drivers of housing, in no particular order, are:
- freely available and cheap credit
- very high levels of immigration
- lack of housing supply responsiveness
- taxation settings

To properly address the issue, all factors need to be addressed.

Yes - I'll quote from the article:

"If we are going to solve the housing crisis we need to take a serious look at the effect immigration has on housing demand.
That’s because immigration is the biggest driver of New Zealand’s population growth, which means it’s probably also the biggest driver of demand for housing."

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So if we built 10 000 new homes in Auckland in the year to June 2020 then we have just enough housing to accommodate the 37 000 migrants who arrived during the same period. Why should we care about our own people living in garages and in motels? /s

Yeah.
It also becomes self perpetuating. More population growth means need for more house building, more house building needs more foreign labour etc etc etc.

I know an old lady who swallowed a fly

We have kept on building. At least 10,000 more up to June 2021. But Auckland population has more than likely decreased over that time. Even a small surplus of 1000 new build houses will have a big effect on property prices in the rest of 2021. Eventually there will be Trans Tasman bubble. Probably long before it is politically acceptable for Australia to fully open borders to the rest of the world. So for their short term immigration sugar hit they will come looking for immigrants and students i n NZ with offers of better pay, better housing and lower cost of living. Good luck finding a tenant in Auckland then.

You're dreaming.

.

Speak of the devil!!! Business craves immigration:

https://www.nzherald.co.nz/business/chorus-blames-covids-effect-on-immig...

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We need bipartisan agreement to enshrine in legislation an immigration cap (as % of population) calculated over a rolling 5 year period.

That way everyone knows the numbers, full transparency, no political beatups every election cycle and attempts to wriggle off the hook.

This is not about racism, or beating up on people who are already here. It's simply putting front of mind, the living standards of NZers for current and future generations.

Including immigrants already here....

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Yeah exactly the immigrants already here shouldn't start screaming let more and more people in here, after all WHY did they leave their own countries in the first place ? Pretty obvious, New Zealand was a better place to live so why wouldn't we want to keep it a better place to live ? We sure as hell don't want to turn this place into a China or an India or several other countries for that matter.

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And actually, I know several immigrants who think it's out of control and want to see lower levels.

Title: "Immigration is the single biggest driver of housing demand"

Immigration dropped from over 70'000 pa to pretty much nothing in the last 10 months, at the same time house prices have increased by enormous amounts!

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Yvil.. so if the post man impregnates my wife today, can I invite you round to see the kid tomorrow? I will give you credit by saying you obviously have vested interests or ulterior motives in trying to pass that one off. To state the other possible reason (for such an unintelligent comment) would not be polite.

As far as unintelligent comment goes you're doing pretty well, comparing number of immigrants who need a place to live when they arrive to the post man who impregnates your wife with a child who will not be born for 9 months

It's actually a pretty good analogy as to how consequences can lag actions.

Sorry but you don't get it Fritz, you think immigrants only put pressure on house prices when they buy, this is wrong, they put pressure on housing the minute they arrive even if they rent first. Every rented house by an immigrant is owned by someone and it's also a house someone else cannot rent anymore. There is no delay, that's why the title of this article is a fallacy

Also Karl, we are not interested in your wife's relationship with the postman "Yvil.. so if the post man impregnates my wife today"

Karl probably thinks you're the postman.

Yvil... My original draft actually said "if the post man impregnates your wife" but since you seem like a sensitive type I altered it a little to avoid any bad feelings. iku.

How many SME business owners have taken advantage of the government business finance guarantee loan scheme. Laying of 80% of the default risk to the government. Releasing the banks security over their homes and baches. Then using the available equity to finance investment property purchases. Stupid policies get stupid results.

Supply & demand law, is always a subject of distortion. Like you've stated the last 10months, the QE is to 100b, LVR is gone, subsidies are everywhere. I believe in absent of overseas demand? the Banks recently published that almost 75% of their demand being substituted by local investors (aka.. 'stimulus').. meanwhile the Supply distortion, just started.. eg. RMA removal, but honestly.. do you think govt. will allow the price of pent up land to be down? C'mon. Now, imagine to that last year 20% raise? if only the RBNZ doing QE for just 60-80billions instead of that 100, off course not correlated. But just took the numbers as good ratio to do the math,.. Surely, answering your own comment by now..those enormous amounts ended up in Banks.
Despite by kindy kids calculation that the Banks can endure up to 50% downturn, the RBNZ & govt are not willing to take that equation.. aerr.. really?

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Annualised immigration over the last 12 months of 40k is hardly "pretty much nothing".
https://www.interest.co.nz/charts/population/net-long-term-migration

You can't instantly undo 6+ years of rampant population growth with a pause in immigration, particularly when construction was interrupted at the same time.

Has a short term pause in immigration dropped our homelessness rates yet? No. Has the short term pause reduced the severe rental stress for lower income earners yet? No. So the structural issues persist that is a huge factor in our housing crisis.

You are on fire. Well put.

Not really, when immigrants arrive into NZ they need a place to live right away, not years later, therefore the number of immigrants arriving into NZ 2, 5, 12 years ago has no impact on the last 10 months rise in prices. Let's see what has changed since the housing market started going crazy about 8 months ago ? Answer, two things 1) the stop of immigrants 2) massive quantitative easing.

So which of the two 1) stop of immigrants or 2) quantitative easing do you think is more likely to have caused the hike in house prices ?

some people are way too ignorant to acknowledge simple things

Yvil, the article is about migration's effect on housing demand not house prices. They are two different things with different drivers, although obviously linked. 

That's not right. As I said elsewhere, many immigrants don't buy immediately, they often rent first. So it is quite likely that high immigration over the last 5-10 years will have been filtering through into demand for home purchases over the last 5-10 years and right now.

and the houses they rent are not owned by anyone ??? Think about it Fritz

That's not what I said.
I said the impact in terms of house buying can be delayed, or lag.
It's obvious that there is an immediate impact on rental demand.

OK let me spell it out then, if there are more people who rent, it equally puts the same pressure on owed houses because each single rented house is also an owned house, owned by someone else, granted but nevertheless owned

But I am talking about the impact of immigrants on purchasing property, not renting.
If 10 immigrants come in, and they all rent, that's a different effect than if the 10 come in and buy a house.
In both scenarios they need to live in the same number of houses, but the second scenario has more impact on pushing house prices higher.
That is why the immigration of 2001-2006 (that was wealthier and more cashed up) had more impact than more recent immigration on house prices.

Watch as the backlog of demand for owner occupied property is slowly satisfied, meanwhile demand for rental properties also tapers off.

From above "........But that increase was almost entirely wiped out by a loss of 12,600 people to internal migration. That means there were 12,600 more people who left Auckland to live in other parts of the country in the year to June, than there were people who arrived in Auckland from elsewhere in NZ....."
This internal migration has occurred for many years. I think it shows the equation of huge housing cost, inability of Auckland to pay for it's own growth, and poor incomes just does not work for New Zealanders.

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In 2020 and on into this year we have had minimal immigration, and we have also had a central bank and goverment who dramatically increased their interventionism when it was thought that house prices could decline by a paltry 10%. In doing so they have thrown their full weight in behind property investors and owners, and have cost FHB's billions of dollars. They have also cost renters billions of dollars. This should offend the sense of fairness and decency of every reasonable person. We have no right to call this a housing 'market' when it is not allowed to function as a market. We have no right to speak of 'risk' when owners and investors are assuming no risk at all: the total risk is being shouldered by taxpayers. This is a very sick situation where the government and central bank are ensuring the wealthy become wealthy at no risk, and devil take the hindmost (renters, FHB's, the young, and future generations of taxpayers). I really despair over the situation and am sickened by the prospect of future bail-outs which will be inherently grossly unfair in a world where you are supposed to enter into financial decisions as an adult and with both eyes open.

We need to work for the day when a house advertised for rental receives few enquiries and it takes some time to secure a new tenant. Static / reducing rent and thus reducing house prices work for all New Zealanders. Imagine if the nurses/teachers/police did not have to fork out vast portions of their incomes for a lifetime. they could spend money and that would be great for business. And health benefits for those currently struggling.
Only way that's going to happen is when there are fewer people and or more houses. The direct way to make that happen is with a population target, of which migration control is the major component.

People moving out of NZ because they’ve had enough of here. At the same time people are trying to move in from other countries because they’ve had enough of there. People are bring in all their money, the big shift is what is happening right now and the future.

There can be immigrants of highest quality (and money to create jobs) and low-end fruit pickers to help with the shortage. Unfortunately there's just not enough room for mediocre migrants.

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When you have entire new suburbs with the bulk of residents being immigrants and those little commercial areas with the obligatory bakery, liquor store, small grocery store, various takeaways and every. single. one. run by an immigrant, it becomes pretty damned clear that immigration here is for immigration's sake alone.

The smell of xenophobia is strong huh PA

If you say so - yawn

More like a loss of identity or a feeling of being a stranger in one's own country. We've seen a massive change in our demographics over a very short time frame, that I don't recall being pitched in any party manifesto. That's going to cause unease and anxiety.

Just to play devil's advocate - you say 'xenophobia' like it's a bad thing, so what does that say about countries that virtually ban immigration - Japan, Austria, Switzerland..and ironically, China and India?
https://pressat.co.uk/releases/the-top-ten-toughest-immigration-laws-in-...

These countries are smart. We are not.

Yes, now we born NZers have an inkling of how Maori felt/feel.

Agree entirely that immigration is key driver of housing demand. An often understated aspect of this is the buying power of foreign currencies. For instance a pom could come to NZ in the mid 2000s, deploy their pounds (3x the buying power of the NZD at the time) and buy up large in our housing market.

Pure, naked, unbridled greed of investors is right up there as well

I love Hobsonville Pt. It's a very pretty place. But when I'm out there, the population is mostly Gen-Xers and the young people who are there seem to be mostly British families. I think this is an invisible type of immigration because people are by-and-large prepared to look the other way when migrants look like them, but in reality they are still extra cars on the road, extra people to be housed and extra places in schools that the government is not prepared to provide for. Our own racism is our undoing in this regard.

Based on the above article there is certainty that house prices will be falling pretty soon as immigration reduces.

Good, Ill start looking for investment properties in DGZ and WLZ.....

Chinaman... if you look at the graphs of immigration and house prices (and use some common sense) you will see that there is about a five year gap or lag between immigration and house prices. With the bigger problem of quickly increasing rents the effect is faster and far more destructive than even house price increases. But yes, if immigration is low for another couple of years you will see a difference.

We now have consecutive governments using population as a cheap stimulant to make the economy look healthier, while we fail to have a serious discussion about the associated costs and who is paying. Rright now the benefits are being reaped by businesses who depend on low-wage workers, and property owners, and the costs are being paid by younger New Zealanders - even those that own their own home.

We can have a rational discussion about the POLICY decisions being made without demonising and blaming immigrants themselves (they AREN'T to blame). The longer people try and sweep the issue under the rug the more people will get frustrated by the clear impacts its having.

Whenever someone try's to shutdown the conversation - by calling it xenophobic, or Trumpian - fails to understand by ignoring the issue does more harm than good. Instead of having a rational discussions about the pro's/con's and of immigration and how its paid for, we instead risk creating fertile ground for those with genuinely racist ideologies.

Yes!
The problem is, I don't think any of our major political parties have any appetite at all for the conversation.
Labour think it's ' anti-woke' to talk about immigration, plus they are centrists and are just as much sucking up to big business as National. And National are all about big business.

"Immigration is the biggest single driver of housing demand."

This is a great example of circular reasoning or circulus in probando.

Population growth does not automatically translate to demand for normal housing. What was conveniently not discussed are farm workers who have on the farm accomodation. Students who prefer apartment units in the city or town central which do not compete with the usual houses that Kiwis want. Backpackers who live in their camper vans were not considered and there're many more. What is not metioned are also the high number of tourists that do not have permanent impact on housing demand on the aggregate.

If we have a problem measuring the impact of population growth on the demand for housing, how in the world do we conclude that immigration is the biggest driver of housing demand?

I have a nicer version of a circular reasoning in action:

No money -> Neighbour bought a nice house -> Envy -> Housing demand

∴ Housing demand is caused by people who have no money.

Perhaps it's time for FHBs to look for better paying jobs.

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What a load of cobblers

"Perhaps it's time for FHBs to look for better paying jobs."

That'd explain why people in previously-comfortably middle-class professionals suddenly can't afford housing and have seen industry wages grow by a few percent a decade, instead of keeping pace with real inflation or housing costs? Or why houses have gone from 4x incomes to 11x incomes? No, it doesn't.

Perhaps it's time for investors to get actual jobs and do actual work, instead of parasitic rent-seeking behaviour?

Amen

I think you missed the point in a rush to get your back up. It's an obviously ridiculous conclusion as an analogy for flawed argument.

CWBW.. your Latin is nearly as good as Del Boys.

What's that worth in dollars? Without immigration, wouldn't the housing market tank?

Well yea. This is why so many landlords have sold a property. The country is designed to run on immigration.