PM John Key says non-Aucklanders tell him they would love more Chinese buyers; says Aucklanders like it when house prices are rising, but would prefer slower rises

PM John Key says non-Aucklanders tell him they would love more Chinese buyers; says Aucklanders like it when house prices are rising, but would prefer slower rises

By Bernard Hickey

Prime Minister John Key has told a talkback audience in Auckland that non-Aucklanders have told him they would like to have more Chinese buyers in their regions to push up their house prices and wealth.

Key told Leighton Smith on NewstalkZB that Aucklanders liked their house prices going up because it made them richer, but they and the Government preferred that they did not go up quite so fast.

"Aucklanders are getting wealthier," Key said, referring to front page newspaper articles in Auckland about house prices.

"I don't want to be unkind to news outlets that run these stories, but the truth is, people are interested. They either own a home, want to buy a home, or have sold a home. It generates interest in their magazines and their newspapers," Key said.

"The point is there is over 500,000 Aucklanders that own a home. They are significantly wealthier. I go around the rest of the country and people say to me 'Can we have a few of those Chinese buyers in Wellington and other parts of New Zealand because actually we want our house prices to go up'," he said.

The comments are the strongest from Key suggesting the Government is comfortable with rising Auckland prices and with the current levels of Auckland house prices, which the OECD, the IMF and Reserve Bank have argued are over-valued and creating risks to financial stability. Finance Minister Bill English has even argued that Auckland's unsustainable house prices created child poverty and income inequality.

Members of the Government have privately said that rising Auckland house prices are good in a political sense for the Government, given home owners who are voters feel richer and happier when they rise. Key's comments are the closest he has made that support those views in public.

Key pointed to recent falls in house prices in Christchurch because of rising housing supply and that the Government was focused on increasing housing supply in Auckland. He said Aucklanders may not welcome a similar trend.

"Let's just take the counter-factual for a moment. Would you want your house price going down?," Key said.

"And what most Aucklanders say to me is 'I'd rather my house price went up, but I'd rather it went up a little more slowly than this'."

Twyford accuses Key of being out of touch

Labour Housing spokesman Phil Twyford said the Prime Minister's comments showed how out of touch he was on Auckland's housing crisis.

“John Key claims Aucklanders want the value of their homes to keep rising. But for most, that paper wealth won’t be realised unless they sell up and move cities," Twyford said.

“Even people who own their own houses are concerned their kids and their grandchildren will never be able to own a home in Auckland," he said.

“The Prime Minister speaks on behalf of those who own property. But the majority of Aucklanders rent. He has a duty to also represent the generation of young New Zealanders who are locked out of the Kiwi dream of homeownership," he said.

“The housing crisis is a disaster for the country; it’s driving up inequality and sucking vast amounts of investment into unproductive real estate speculation. No one wants to see Auckland house prices go bust. But the biggest risk to the Auckland property market is National’s hands off approach to the housing crisis which has allowed a bubble to develop in our biggest city."

“John Key is happy to talk down concerns about the Auckland housing crisis because with the collapse of dairy prices and the Canterbury rebuild coming to an end, the bubble is all that’s left.”

'Cynical calculation'

Twyford said Key's comments were the most revealing he had made.

"It's a pretty cynical political calculation that there are enough home owners who stand to gain from Auckland's housing crisis and skyrocketing house prices that he's willing to throw under the bus the half of people in Auckland who are renters and a generation of young New Zealanders who are locked out of the housing market," he said.

"The conventional wisdom for quite a long time now is that politicians and political parties have more to gain by pandering to home owners, but I think there's been a really significant political change in recent years. Even people who are watching their net worth go up by NZ$500 a day in Auckland if they happen to own a house, they know that the way things are currently, their kids and grandchildren will never own a home in Auckland."

"There is a realisation this is bad for our families, bad for our kids, bad for our communities and bad for New Zealand. The Auckland housing economy that John Key is comfortable about is bad for the whole economy. We're ploughing billions of dollars of capital into unproductive speculation in real estate and watching a generation of young New Zealanders being condemned to being renters and tenants in their own land in the Prime Minister's words."

'Two track housing economy'

Twyford said he had also received feedback from outside Auckland from those who wanted capital gains driven by buyers from China. Key's comments served to emphasise the divergence between Auckland and the rest of New Zealand.

"We've got this two track housing economy in New Zealand. Auckland is utterly out of control with rampant property speculation and an acute shortage of housing, and in other parts of New Zealand house prices are either stagnant, and in many regions declining, and people are facing negative equity because their local economies are going backwards," he said.

The Government needed to build up regional economies, crack down on speculators and unleash a massive house building programme.

"John Key is comfortable to sit there and let this thing unfold because he has made some kind of political calculation that home owners in Auckland are happy to see their prices go through the roof, but it's not real wealth because unless people are willing to move out of Auckland they can never cash that up," he said.

"That's the sort of Ponzi logic of this housing economy that John Key is comfortable with, and that's why you can't blame people under this Government's housing policy for thinking that the only way to get rich in New Zealand is by speculating in residential property."

(Updated with more comments from Phil Twyford.)

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104 Comments

21
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Twyford clearly gets it;
“John Key is happy to talk down concerns about the Auckland housing crisis because with the collapse of dairy prices and the Canterbury rebuild coming to an end, the bubble is all that’s left.”

Key has let his true colours shine once again - he is all for house price inflation, all for foreign Chinese buying - he is an absolute muppet!

This must be an early flanking maneuver because he knows what the data is going to show from October 1 onwards.

Not sure since when Chinese can represent all foreign buyer when they are only 30% all of foreign investment, I don't see you mention Americans and British, I guess you just simply love whites and dislike Asians.

Your comment is so thoughtless it barely warrants a response, but I will;
1) My reference was to John Key's comments about NZ regions wanting Chinese buyers
2) I did not say or imply that Chinese represent all foreign buyers
3) Show me where you got your 30% number from. There is no verified public data.
4) Stuff off with your racist name calling. Foreign buying is not an issue of race - and I am certainly not racist.

What a ridiculous comment. Have you not heard of the tsunami of chinese money looking for a home? It is very clear that it is chinese money pushing up our house prices. Just look at the top performing real estate agents, but busloads of chinese being taken on tours of auckland properties, the thousands of NZ property listings on chinese websites. You're an ostrich with your head firmly buried, searching for reasons to call people racist.

17
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Phil Twyford is right. In the regions I hope the Chinese don't come here. They contribute nothing to the economy, no jobs, no security. They only make homes unaffordable for the people already here, already the flow form the smoke is being felt. JK needs to understand that if he continues to insist on doing nothing this could well be the election issue that sees National out of Government.

11
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Dear John .. don't mind if my house goes down in value... I live in it ...

26
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John Key - I also own my own home and in an odd way I resent what it is now "worth." My jobs in Auckland so I can't arbitrage my way to another city. I am concerned for my kids ability to ever buy one. I worry the market has overshot and may actually in the next few years threaten the economy and ultimately my job. And most of all I am disgusted by the vast moral problems posed by it.

Auckland house prices aren't real. They are a self reinforced cycle of investor and offshore buyer activity, compounded by very sad and ill prepared first home buyers who have leveraged everything for a shot at a crappy house.

Shame on you John Key - and shame on National.

11
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I wish a Chinese investor would buy John Keys house so he would bugger off.

17
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Maybe the house came as part of the package when they bought John Key.

Thank you Keyser from someone who hopes to buy a house for my family one day. Your lack of greed is very refreshing.

13
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John Key is out of touch if he thinks insanely high prices relative to both owners' incomes and potential rental income benefit anyone who actually use houses for the purpose of living in...

Key obviously thinks we all should be Dependent Upon Massive Borrowings (DUMB) and want to get Sensational Cash Rewards Even Without Employment or a Day-job (SCREWED).

In abbreviated terms, Key thinks we all should be DUMB and want to get SCREWED.

exactly no point my house(s) price shooting through the roof if I can't afford to service loans against it, nor collect rent (from a developed economy). Such over priced asset is a massive liability in temrs of rates andinsurance, and just a plum waiting there government to try and convince Labour to apply a Capital Tax on the "rich profits" of the landlords.

21
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Our prime minister thinks NZers want a housing bubble - how embarrassing. Of course the Herald didn't make this a front page headline like if Labour had have said something so stupid.

21
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The Herald take in ~$30-40 million in receipts per annum from real estate advertising. It is in their direct financial interest to continue to pump the market with articles about house prices and baiting more investors and offshore buyers to buy on advance of capital gains , and to lure desperate first home buyers in before house prices go up , and up and up forever. Not to mention bank lending advertisements which are the exact same. There is an entire hierarchy of wealth, which the herald and nbr are part of, tied up in making people feel panicked and making them fear in missing out - whatever the cost.

I hope the journalists and editors at those publications, who don't share in the spoils along with their shareholders, stop to ask themselves why they are selling out an entire generation of kiwis - because that is exactly what they are doing.

Signed - a pissed off father of a family who will never own a home under this pathetic status quo.

33
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From this statement - out of John Key's own mouth - is a gold seal certification of National's actions that National's policy is to promote rising house prices and to support foreign non resident purchases of NZ residential property over and above NZ resident first home buyers. It's insane - literally an insane policy that National have adopted, and the pathetic recognition of that policy by the wider press and new zealanders more generally.

10
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Okay John - so I am going to do this thing called subtraction (nb treasury - you may need a year or two to write Aide Memos to help clarify the subject - thanks again for your robust fact checking - I feel so much better to know you are right on top of this).

Okay - so Auckland city population of 1.5 million, less the 500k people who own homes, leaves 1 million who don't...controversial I know.

I am so relieved then you are a true man of people - looking out for the majority .

Wait - what's the difference between majority and minority again?

Better give Treasury 7 mores years to investigate and get to the bottom of this - for the people and all.

I also see John Key noted the 500,000 Auckland home owners are feeling wealthier because prices are rising rapidly. He also talked to the concept of "counterfactual.". Well here is a counterfactual to his statement - the 1 million non home Aucklanders are feeling poorer because of it. Buy hey - they are second class citizens.

God - it's hot in Hawaii this time of year isn't it?

How many of those non home owners are juvenile? How many have spouses who own homes? How many don't own a home because it is in a trust / look through company ?

Cos of all the article and comments that is the only part you can focus on?

13
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Humbug - utter nonsense -

ask your self who is he talking to

84 year old Granny Jones in her 60 year old villa sure as heck isn't talking to him and hasn't got a red-phone direct hot-line to him and he isn't on her speed-dial

And welfare recipients aren't talking to him and telling him that

And State-house occupants aren't talking to him and telling him that

And FHB's who have been out-bid in a bidding war wont be saying that

So Bernard, who do you think has access to his "little shell-pink" ear?

He's making it up - and Bernard ducks and lets it go thru to the keeper

21
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He's at it again - Art of deflection - by robyn-red-breast in ODT

If we analyse how John Key uses language to deflect questioning, (such as, as it has been reported, that he doubts that a person in China wakes up in the morning and randomly thinks "I think I'll buy a house in Auckland"), we see that what he is doing is commenting on his view of how a Chinese person would or would not think; this response, which is an avoidance of responding directly to the question of housing affordability in Auckland, puts the questioner on the back foot and potentially disables the questioning. It is important, of course, that the questioner is not stymied and that he/she can get back on track. One way to do this is, obviously, is call him on what he is doing by asking him to explain what that has to do with the cost of housing in Auckland and its affordability for New Zealanders. By deflecting he avoids being called to account and also minimises the importance of the question.

These tactics can and are used by polititians of all persuasions but John Key has mastered the art and employs it very successfully.

Fonterra and the auckland property bubble may sound vaguely familiar to those that remember the Clyde Dam and the electrification of the main trunk line by Robert Muldoon
Nothing has changed

I hope Susan Devoy sticks it to JK over his racist comment.

29
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The man is an idiot.

20
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No, a very devious assassin.

He's a ponytail pulling twot.

A pure cynic

Everyone, we understand many commenters have strong views on the issues covered in this story. That's fine. But please stick to the issues and refrain from making personal insults. They don't add anything to the debate and reflect poorly on the comment thread. Thanks.

true, but they are amusing to read :-)

Kate and bender who would you prefer to be PM then? David Cunliffe. Andrew Little? Winston? JK is the best of a very bad bunch.

35
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The stuff coming out of Key's mouth is just evil, I would prefer any of the above from him. He is the worst of a bad bunch. He is dreadful and is perfectly happy to disenfranchise NZers.

He has to do something to push power so Labour can run their change book and get Nats off the hook for their actions

24
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My cat would do a better job. At least while he just sits there looking vacant and occasionally licking his arse, he wouldn't do any damage.

12
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Well the issue is that JK is just sitting there looking vacant. As for licking his arse, he has people to take care of that for him.

When it comes to vacant stupidity and arse-licking, they certainly know how to identify and develop talent.

Gee not even to the corner of the sofa or the drapes?

haha! comment of the year!

20
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Any of your listed alternatives would show more respect to the office and to the future of our country.

48%of NZ do not agree with you Xeinaga. It is called democracy. I am going off him like many NZers but I see no alternative. What about Judith Collins?

17
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Oh god.

There are far better people in national but first you need to get rid of the cartel so they can surface

Actually it was 47% - and that is only of people who voted, not all New Zealanders.

And in a year A LOT has changed. Key and his government are looking clueless yet arrogant.

and labour? clueless and dis-connected. Why do you think NZF has had such a comeback? it isnt WP its no one else to vote for IMHO.

I fully agree Gordon.....there appears to be no alternative and most kiwi's recognise this!!

I'm damn annoyed at Key and National...they haven't sorted the bureaucracy out......one bit.....all this leaning to the left BS is not satisfactory!!

How can the whole system in NZ even be legal....how long will the lies continue???

Well in your fantasy world I guess not, in the real world its based on laws most ppl want/wanted.

Judith Collins? you have got to be kidding?

Bill English for PM then ?

In this country, respect is something that is earned, not commanded by virtue of a persons position. In fact that is not even respect, it is fear. Hopefully we have not sunk that low yet. But we seem to be heading that way. Maybe you will be more comfortable in that sort of regime.

...when you have cancer your still try and cure it.....you dont wait for a less desirable illness to come along first.

From an opinion piece by David Hargreaves dated July 15 2015

[quote]
When I began living in Auckland for the first time in several years in 2013 I was genuinely taken aback by the very dark brooding resentment, just under the surface, regarding the purchasing of Auckland houses by 'foreign' buyers.

New Zealanders who haven't spent much or any time in Auckland during the past few years really won't have a clue just how strongly this issue is being felt by Aucklanders.

The Government, of course, has known, but has chosen to publicly ignore it. Rising house prices suit a National Government fine. Rising prices also suit Aucklanders who own homes fine as well.

Read it
http://www.interest.co.nz/opinion/76532/foreign-buyer-problem-has-some-r...

23
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So now we have moved on to the Chinese ARE having an impact on the market, but its a good thing because "everybody" is "richer"? Racist!

You couldn't make this stuff up. Are people really that retarded?

18
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I think Key banks on it

People are not retarded, people are greedy.

I don't know what ya'll are complaining about. The goal is wealth and prosperity. Ya'll are pursuing it at any means possible and the government is merely supporting and encouraging the citizens. The government aint the ones to change things, don't know why ya'll expecting it.

Said like a true Shylock.

16
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Temporary riches, but at what cost? Potential risk of total economic collapse. That's what you get when you elect a money trader.

That's what you get when the "market" believes in a primitive concept of "wealth and prosperity", always demands more and blindly believes in "economic theory" to control it all.

17
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non-Aucklanders tell him they would love more Chinese buyers..........mmmm who are these people?.... maybe these are the same people telling him we need to change the flag. ...... his imaginary friends.

17
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It's only wealth on paper. No economic growth, no new industries, no new jobs. That ain't wealth. That's a bubble.

His statement about Aucklanders not preferring a price decrease reveals who he cares it about. It ain't the have-nots, that's for sure. The renters of Auckland clearly don't qualify as Aucklanders.

He is not getting my vote next time around. Maybe it's time for the landlords to feel the pain for a change.

That statement is just pure wrong for those that have had their expenses rise due to their houses increasing but not their wages

it's not a bubble.

Bubbles self rapidly self-inflate then pop. There needs to be some sort of popping action.

It's pure beads'n'blankets inflationary greed (on the governments behalf) rather than slowly sustainably build economy and trade, hock off the parents and kids future to the earliest bidder.

The small landlords/renters don't really want such growth either ! Sure it makes them look good on paper, but they don't get the money unless they sell up...and where does that leave them - if they rebuy, then they're competing against the money that just bought their place at too much, so they get pushed out of Auckland if their careers allows. B ecause they're the only ones that can pay the inflated rents it's not like most landlords will see a penny of decent yields through rent.
But you can bet the councils and government will see the higher valuations as a great thing to secure _their_ loans and start charging rates on...them and the insurance companies.

My man John has hit the nail on the head! - Most people wouldn't be whinging if the Chinese were spending their cash in the lesser towns of NZ, like Wellington.

I'm sick of struggling in the Wellington market with slow growth. Bring 'em here John my boy!

16
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Actually John tried hitting a nail on the head publicly once but he was too uncoordinated and made a complete fool of himself.

.

Were you the bloke talking to John Key?

You have kids? How would you like wellington prices to triple for them while their incomes do not?

Hey OU look, over there, see Triple standing there with his arm straight out in front, see how the hand is in a fist, you should probably walk right into it

How can you trust a politician when they all have an eye on their retirement income streams?

http://www.3news.co.nz/nznews/former-mps-back-bank-of-china-2014112110

19
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This comment from the PM bugs me and shows that he is just in it for personal gain. I am in Tauranga, I don't want our prices doubling or tripling in value in a few short years. Why? because I have children and feel we are locking out future generations of kids out of the housing market to rich foreign people.

Does it mean that more farmers want to sell out to the overseas buyers and the government will support such a development ?

the farmers dont want to but the government would love them to.

23
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It should do more than just bug the average kiwi. They should be up in flipping arms about it.

The PM is:
- All for foreigners buying up our assets
- All for NZ'ers to be renters in their own country
- All for the biggest expense for NZ citizens (housing) to spiral out of control, for the average person no longer able to afford the average house.
- All for the social degradation that occurs when more an more people become renters.

I'm gob-smacked. I cannot believe this idiot.

NZ first, Labour, your have a chance on swaying many voters in the next election on this issue. Don't screw it up.

Houses are for living in, they don't do anything productive. When the price gets out of whack with incomes - there is no long term benefit for the country. In fact the opposite is true - it cripples the population and makes them debt or rent serfs.

Talk about not caring about your country or it's citizens. Unbelievable.

living in is productive. But they are a _commodity_ and commodity price pressure should be downward

It's not productive. Residential property produces nothing. The only intrinsic value in a house is that of shelter, 4 walls and a ceiling, and is much the same as it was a thousand years ago. Everything beyond that is supply vs demand - or an illusion.

eating is not productive by your reasoning.

I have been at times in my life, without a residence. Try it for a couple of months - then get back to me, how you kept your health, where you cooked, how you protected your valuables, where you kept your work clothes, where you purchased your hygiene routine from, your health with a good nights safe sleep. How you attracted a mate, or protected your children.
I keep my computer in my house, with which I use to study and work. It is here that the phone lines go that I do my FX and share trades, in my garage under lock and key are all the plumbing, electrical , and building tools stored for working on houses and rental business. My printer and electronics equipment is all spread on tables in one room, as is my alchemical and magical books and decryptions without a working space of a house I would have to find some other location to do this work. My roof top hold solar tubes for harvesting and analysis of hotwater services, without a house where would I put those, I would have to slave to pay another who gets them from where? My solar PV sitting on the garage (potentially) harvests productive electricity. My garden contains 6 different types of fruit tree, and I have plots for several types of vegetable and a selection of herbs in pots.
It isn't worth doing such things in a rental, and nigh impossible in an apartment.
Like the "not-having-a-house" I currently don't operate a refrigerator, but I do have a place to connect my kettle - with which I produce a range of teas - all at far less than commercial prices.

shelter -is- a productive thing, as it is a consumable need - even moreso than a want. If you don;'t have shelter, you _must_ find it elsewhere. Beyond that a house also provides a _location_, access to power, places to locate work, tools, and family.

As a landlord, I _sell_ shelter and location.
People _need_ it, and good quality is better than bad quality (of all my property, mine home is the only one with a leaking roof). Servicing the tenants need is the productivity of those properties. If they buy their own then they service their own need, and the productivity-by-dollar is what they save by not renting. Renting is a cheap deal for what you get. But sadly because economy in NZ is so poor, it also makes up much of our wage.

If residences are not productive, then food is not productive because you just excrete it eventually. neither is art nor entertainment which wastes time and produces nothing. cars, books, media, health all non-productive if residences can be be considered non-productive.

the real intrinsic value of "A house"? A big mortgage and equity store and repairs and rates and insurance bills for life. and lawns/garden to spend time on.

Perhaps you need to take a good long look at what you're using to define "productivity". Judging by market behaviour most of the human race seems to disagree with your low opinion of home value.

I've been giving Key the benefit of the doubt for a long time, but this is the final straw. Key, out!
(....Labour in?....)

11
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So there you have it, people who don’t have a vested interest in property inflation, this man is happy to let you be ruined to benefit his client electorate. He is your enemy.

I figured that one out a long time ago.

"Key pointed to recent falls in house prices in Christchurch because of rising housing supply"

Again foolishness from Key.
Supplyhas not reduce house prices in Christchurch. The drop in projected work and rebuild economy is relieving New Zealanders incomes, this has weakened demand into Christchurch and eased incomes for servicing property loans. A drop in economic demand creates a drop in economic demand, and that's how you know it's plateauing off back to sustainable bread'n'butter business levels.
Otherwise the demand and extra economic income would scoop up the cheap housing coming into the market as cheap spec. property (since it would imply business incomes are good, and loan rates at the moment are very good).

So when is Susan Devoy going to slap Key on the wrist for making racists comments about the Maori language? of course that's right she is a political appointment by the National party, and will stick her beak in to have a go at Labour whenever they raise a very serious issue that has nothing to do with racism, but wouldn't contemplate ticking off National, they are free to be genuinely racist at will.

"Prime Minister John Key has told a talkback audience in Auckland that non-Aucklanders have told him they would like to have more Chinese buyers in their regions to push up their house prices and wealth."

Does he only talk to greedy sell-outs?

From The Landlord Says:

Meanwhile the National Party released its immigration policy. You may wonder what this means for the property market. It is clear from research that immigration is one of the key drivers of house price growth.
The logic is simple. If you import more people into the country, then you need more houses. Supply and demand means that prices are then pushed up, this is particularly so in Auckland.
While the latest immigration numbers show the number of people coming into New Zealand is starting to rise, the Nat’s policy looks like it wants to increase immigration levels even further. (Although it is unclear what sort of number they are targeting.)
This policy is, arguably, a plus for people who want house prices to rise. (But may be not so good for first home owners wanting to buy.)
My guess has always been that property investors lean heavily towards the right rather than the left. (This was made clear in an email newsletter I saw from one developer this week.)

Dr Greg Clydesdale

While immigration played a key role in house inflation in the three years after 2001 (Reserve
Bank 2007), it is unknown to what extent on-going immigration continued to drive price rises.
The housing boom has meant good profits for many New Zealand companies supplying materials and building services, but it implies investors would rather invest in their country’s homes rather than its businesses (Bollard 2005). The high returns for property has attracted finance and reduced the capital available for productive investment (Moody, 2006). The consequence is investment is going in to industries with limited capacity to increase per capita incomes. For example, real estate and building are domestically bound and do not have the market potential of export industries. They also have less opportunity to increase productivity through new processes and products. The irony is, as these sectors grow, they have incurred skills shortages which in turn has increased demand for skilled immigrants. The Department of Statistics ‘Long Term Skill Shortage List’ of 28/3/2006 includes carpenter/joiner, plumber, electricians, fitter and turners, fitter welders; all indicative of a nation building it's construction/property sector.
There is a danger that a sector of the economy is being augmented that is totally reliant on a small domestic economy. Not only do these industries have limited potential for per-capita growth but ‘deriving growth via factor inputs such as labour places pressure on infrastructure such as transport and land supply, and ultimately have a further negative impact on growth (ARC 2005). Finally, as the sector gets larger, it gains in lobbying/political strength and can lobby for immigration regardless if it is the best interests of the economy as a whole. This could be seen in Canada where the development industry has lobbied hard for high sustained immigration levels (Ley and Tutchener 2001).

http://kauri.aut.ac.nz:8080/dspace/bitstream/123456789/205/1/clydesdale....

Writing that paper got Dr Clydesdale kicked out of Massey University (Diversity Dividend and all that)

Good that he did get kicked out. If he was any good he would have recognised that lanlording is locked by the value tenants can pay, thus for most landlords immgration that isn't yield-sensitive is a massive problem, not a bonus, for landlords.

It is not a huge jump in knowledge to realise if immigrants are pushing up prices of housing then landlords (who can't increase rents) are going to have insurmountable difficulties increasing _their_ businesses against the incoming competition,

What is dangerous is the dead equity.

So the houses have high value. Rents are low, wages in most of the country are low because of limited sustainable economic activity. Only a few large companies can afford to pay significant salaries.

How then can anyone start businesses? Create employment? derive a surplus for investment? it is all tied up in "rich" houses (and student debt:) ) that no one can afford to move past.

And because of skill tests more immigrants full those shrinking high salary jobs, are these immigants "solution providers" for such problems? Almost never as their background is entirely alien and usually career and company focused - the very things that the hiring company sort them for. So how does there migration trickle down? It doesn't it goes into the expensive houses or some passive investment, no use whatsoever to our economy - and no use to any clear thinking landlord or property owner.

Slightly off topic. But I am sick of National/Key/Smith proclaiming what they have done to rebuild Christchurch is some sort of success story.

The real story is of stupidity, desperation and greed and is fully explained at this site https://medium.com/making-christchurch

Read the articles about the convention centre, the Crown/Fletcher housing development and the plan to destroy a $50 million former IRD building that could be repaired for $20 million because National is too arrogant to admit that they have messed up the whole Christchurch CBD rebuild.

10
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Does Key think the renters (58% of Auckland occupiers) love the idea of their rents rising so quickly and much quicker than they can earn a dollar?

As a home owner (with a mortgage), not a landlord, in Auckland - the rising prices annoy me. My wife and I live in the house, and yes, the value has increased probably to the vicinity of $200k in the last two years (possibly more - it's hard to get a gauge on what the house values around us are as it's a new sub-division and no-one has sold). What does that mean for us? Higher insurance premiums on replacement costs, higher rates. Functionally - it makes no difference.

Now don't get me wrong, we can afford the rates increases, we can afford the insurance premiums. But I'd rather house prices were stable. If house prices keep increasing, we'll sell up and move back to the provinces (we're both from there originally).

Of more concern to me, is the state of the world economy and what could be coming in the next 6-9 months. The impact that might have on New Zealand as a whole - not just Auckland, scares me more than the Auckland real estate economy correcting.

More rubbish from our lying Prime Minister. I know home-owning families who want to upgrade as their family increases in size but they can't afford it because the four bedroom house has gone up by 30% as well and it's now out of reach.

No doubt some people are happy, but they're generally boomers, people in leafy suburbs or those who own investment properties.

Its really quite sad to see how out if touch and arrogant the NZ prime minister has become.

“Even people who own their own houses are concerned their kids and their grandchildren will never be able to own a home in Auckland" -

This is why you should hold on to property and pass it on to your kids and grandkids as they do in Asia - not blow it all on cars and holidays in your retirement like the Western world!

John Key is right - people would be a lot more concerned if Auckland house prices went down every year. Would anyone buy a house if property prices always went down in value? We want a slow, inflation indexed rise in value, not 20%+ every year. We don't want house price deflation ever guys! Get real!

The average family is 2.2 kids , so doesn't work. Maybe you blow all your money on holidays and cars but I do not.

Then we need massive wage increases

I hope john key gets his wish and chinese buy up the dead regional econo
ies. then our private debt to the banks will grow even fàster and the whole thing will finally implode.
i dont trust this prime minister who is an ex trader whose company contributed to the last global financial crisis.
i dont trust this prime minister who has closed door meeting with the chairperson of the federal reserve which is in itself actively destroying the money base of the united states. and rember that is a private bank owned by the ellite.
are these guys his true masters? are we being duped?
i dont trust this prime minister who stands up in parliament and says poor kids dont need any more assistance re free breakfasts and then is party votes down the opposition bill.
i dont trust thisprime minister who kicks people off the dole just to get the unemployment rate diw

Rising Auckland house prices only help investors who have multiple homes, or people who are planning to sell up and leave Auckland. They don't help Aucklander's who only own their own home, particularly Aucklanders that want to sell their existing home & buy a better/bigger one. The home I own is a small 2-bedroom unit which is much too small for my family long term (I want to have 3-4 kids). They say Auckland house prices are rising about $500/wk on average. My house is worth about half as much as the average Auckland house, so if prices keep rising the way they have been I'm aware that my property is increasing in value at about $250/week, while the 'average' Auckland home (ie. the type of home I hope to own in the future) is increasing in value at $500/week. So the price gap between my home & the 'average' Auckland home is increasing by $250/week ($13,000 each year). The ever-rising house prices in Auckland make me very anxious.

Key has no vision for NZ! That is clear! He's now into desperate property spruiking mode!
But do we have a credible alternative? Is Labour the lesser of two evils? Or not?

Key has no vision for NZ! That is clear! He's now into desperate property spruiking mode!
But do we have a credible alternative? Is Labour the lesser of two evils? Or not?

JK just 'Jumped The Shark'

Hugh Pavletich posted this link on Kiwiblog
https://www.youtube.com/watch?v=1dJ20Uqv7eA

For the record Mr Key. I was an Aucklander but not for some decades now. I do not want the tragedy inflicted on Aucklanders by the house price debacle inflicted on the rest of us. I own various property and if the house prices doubled it would be OK - sort of - but only if I left the country forever taking my kids, never to return.

" I own various property and if the house prices doubled it would be OK - sort of - but only if I left the country forever taking my kids, never to return."
It's been obvious from early on in his term that that is exactly JK's plan for himself and his family.

So JK is listening to the deluded....oh great, just great.

price rises not driven by wage increases are liquidity bubbles. Look at slumping world commodities, that's the real economy.