PM says Govt doing everything it can on Auckland prices as average value hits $918,153; says buyers can find houses under $400,000 on TradeMe; says Auckland lot like Vancouver and Sydney

PM says Govt doing everything it can on Auckland prices as average value hits $918,153; says buyers can find houses under $400,000 on TradeMe; says Auckland lot like Vancouver and Sydney
Prime Minister John talking to reporters in Parliament on November 3. Picture by Lynn Grieveson for Hive News.

By Bernard Hickey

Prime Minister John Key has downplayed news that Auckland's average house value rose to NZ$918,153 in October, saying the Government was doing as much as it could on boosting housing supply and that home buyers could still find houses for less than NZ$400,000 in Auckland.

Key denied the Government's measures to address house price inflation in Auckland were not working and said there had been recent indications that the market was cooling, although it had yet to show up in the data.

"There is an unprecedented level of construction and consenting now taking place in Auckland and actually a range of views about what's actually ultimately happening to Auckland house prices," Key told reporters after QV reported Auckland house values rose 24.4% in the year to October. See Greg Ninness' report on QV's figures here.

"You've seen in recent times a couple of banks come out and say they think things are cooling, but it is a complicated position and it is not unique solely to Auckland," Key said.

"You've got quite a lot of anecdotal feedback starting come from the banks and others that demand is definitely cooling," he said.

"Around the world we see this sort of pressure on places that are very desirable to live," he said.

"When we first became the government, actually house prices weren't really going up very much. Why? Because we had a recession and global financial crisis and people felt a bit vulnerable. In recent times they have felt a lot more secure about where New Zealand's going and in particular where Auckland's going. We've had migration helping that, and a number of other things. I think, as you saw in Christchurch, in the end when you get on top of supply issues they do resolve the issues. But, as I said, it's not unique. London has these issues, Vancouver -- Sydney."

Key said it was too early to rule in or rule out other options, including British-style limits on loan to income multiples.

"I think it's the time to say 'we've put in a place a lot of measures; a great many of those I think are actually making a difference, but if there are other suggestions, the government's always been open minded," Key said.

Asked if NZ$918,000 was too high, he said: "Well clearly it's a lot but, there's a big range and you can go on TradeMe and look at homes under $400,000 in Auckland and there are some."

"But the government acknowledges we need to do more and we are going everything we can, from fast tracking consenting to the release of a huge amount of land. The history shows you that supply and demand ultimately work. What's clear is that there has been a lot of pent up demand for a lot of different reasons."

English warns on prices, interest rates'

Finance Minister Bill English said house prices in Auckland had been going up too fast, "and prices that go up that fast will eventually stop, and everywhere they go down."

"We are doing pretty much everything we can. The next steps are to crank up our own supply into the market because we've got a lot of land and houses in Auckland that can be redeveloped and will be," he said.

"There seems to be some anecdotal evidence that some of the measures coming in now, growing supply, might slow it down, but we won't know for four or five months yet I wouldn't think," he said.

"You have to remember that interest rates are quite low - lowest for 50 years - and that has been encouraging home buyers, but they need to remember that interest rates can go up so they need to be careful about too much debt."

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.


Comment Filter

Highlight new comments in the last hr(s).

I've voted for JK 3 times in a row but shamefully my lesson is learned....we've been sold out. What an absolute load of Neo-con B.S. he spouts - they have sat on their hands, filling their pockets whilst Rome burnt and now that its completely out of control its too late to put the genie back in the bottle. He wouldn't put his dog in the properties that apparently he can find for under $400k...... got to love the generation that got it easy (100% free education, free healthcare and affordable decent housing) and then sold out the rest of us for their gain. God help us - especially with a shambles of political alternatives....

And who would be your choice of PM from the left? Jacinta ?

why does the new PM have to come from the left, plenty of knives being sharpened on the right, just waiting the right conditions


What's wrong with a Little prime minister? He at least seems honest...

Is Little the one who keeps making statements and backtracking? (classic example is NZ Super )
There have also been suggestions that he might be xenophobic, prone to attempting to inciting collective racism and have no idea that markets will generally not quite react as he expects to his policies.

The left did a hell of a lot better when they were last in power. Huge surplus that funded quite a lot of the folly for this lot.

You conveniently forget to talk about the GFC Chris. Bill steered us through it and now we have a better economy than Australia. Give me the name of someone from the left who could be our PM instead of JK. Someone who NZ would vote into power. By the way I have voted for Labour in the past but Helen got rid of my support like a lot of other New Zealanders.

Hmmm - no..she's more image than substance (at the moment) - I'm neither a "left nor right" voter - I've voted both - I like to think (maybe wishfully) that I look at the issues each time rather than blindly be a religious Blue or Red follower...(could never understand how you could lock into one party forever out of blind devotion?) BUT to answer your question, one of the huge issues for me right now is a completely incoherent strategy (and stability) from any opposition party to hold the current government to account which is never healthy. Strangely we had the same thing in the Clark era when National were a shambles. 3 Terms in government really seems to be the limit before arrogance and an inability to understand what the general electorate are experiencing comes to the fore - with Clark and Labour it was social engineering (remember low energy light bulbs, smacking etc) and with National now its a complete inability to face the fact that allowing unbridled immigration and property "investors" to run wild has created an insane bubble that is going to hurt us all at some stage. It's taken 3 terms before they addressed it at all and by then the damage was done. All I know is that I will be voting differently...and that 3rd term-itis is rampant in the current Government. They are completely and totally out of touch

Who would you like to see as PM next time. Please tell us. They have to be in parliament now so obviously you have someone in mind. I love the way people attack JK and National but do not put up a replacement leader. I am not surprised as there currently is no one to replace him including in the National caucus.

Too many slow learners.

You should have built a Casino and/or Financed a movie or two.

Become a Minister, Taken out a whopping Mortgage and got a free BMW as well as that Ipad.

All for sitting on yer hands. Follow me...I know where I am going.

Key would have been your BFF, not your worst enemy.

Complicated, just who he is working


3 in a row and no bonus point.

Roman Candles in Awkland on Bonfire Night..., Priceless. TUI. mate


My goodness John Key is so far out of touch. I guess owning multi-million dollar houses around the world , partying it up with the all blacks then the queen can do that to a person.

I've never rated him as a business person myself as he never built a business that I know of. he has always been enveloped by corporates and the fx game is zero sum. For every winner there is a loser, you don't actually create anything.

But , who are the alternatives to John Key? No one comes to mind at this time.

I like the Little guy... straight shooter.

JK is a straight shooter? you jest?

I wouldnt turn my back to him frankly.


I didn't believe John Key was right when he told us there were houses under $400,000 for sale in Auckland, but lo and behold, he is! The only thing he forgot to mention is that these houses come without land, and are scheduled for removal...

John Key stood at the podium, uttered these words, the politically reliable hacks dashed away and regurgitated his words, yet here, a poster exposes the reality that not one media hack questioned


Could do some serious investigative journalism and count the number of listings under $400k on trademe that actually include land, are not apartments, not leaky buildings and not on the gulf islands. Oh and Waiuku isn't Auckland as far as I am concerned.

Do we count 10? And how many are fit for immediate habitation?

This proves Key is not only out of touch, but he is deceptive and misleading.

Why do we have a conman as a pry-minister?

Easier to regurgitate press releases.

Hacks and media-outlets selected for their political reliability

why dont you do it?

Already have, it all depends on your definition of Auckland and of a house. Actual houses in Auckland is zero. The odd cheapie hardie plank house in Pukekohe etc and units in other areas exist at under $400k but a massive change to 3 years ago when there were large numbers available in this price range in west and south Auckland.

Mr Key said that he would have more to say on the issue after he speaks to Richie when he arrives home on Wednesday.


I thought denile was an an African river until I read this article. The comments from the PM are a complete insult to the many thousands of young kiwi families who have now abandoned any hope of ever owning a home in Auckland. Last week I surveyed the real estate web site for any 3 bedroom houses in Wellsford and Mangawhai as it is a waste of time looking closer to the CBD. There was ONE property listed in Wellsford for $489,000. Over the past three years the government has tried to ignore the problems whilst property prices have almost doubled, and the shortage of construction workers will impeed any plans for an increase in supply. Added to this is the vast amounts of funds from the major banks being given to "investors" (approx 40% of all new loans) which is also drastically reducing the properties available to owner/occupiers. This is a national scandal, but not surprising from a National party where so many MP's are property investors! De-nile indeed!

I am beginning to sound like a broken record but... Demand (another African river), its all about demand. We are building houses at a fantastic rate and don't think we need a bigger army of carpenters or gibstoppers... I can still remember when, for a tradie to survive he had to move to Oz. Sustainable growth is what we need, which means cutting the high influx of migrants and regulating the high inflows of foreign cash into property

Correct. We are building up for a disaster when Auckland house prices slump, construction hollows out and excess migrants pack up and use their free NZ pass to OZ (which will get the rest of us barred from moving there by the way...).

In the end this is all short term thinking, by an incompetent bunch of fools who also wrecked the lives of many thousands of Cantabrians ... What a legacy Key has left us!! Had anyone noticed that Key, English and Brownlee don't have one iota of experience running a business between them?? (A bureaucrat, a fx trader and a teacher...)

They mightn't have much experience but they will be snapped up by large, fast moving Chinese companies when they move on after "contributing" to NZ's development. Think of our Jenny, trained as a teacher, now a world class business leader (Jack Chen and Mainzeal events not withstanding).

We are on a finite planet, we need to stop growth as the planet will stop it for us otherwise, though arguably the GFC was just that event.

I have several friends in trades, they have either gone to OZ in the last few years, or went to chch and are now considering OZ as chch dries up.

Migrants and non-NZ owning should indeed be stopped, its plain crazy.

People you need to get out into the Auction rooms in Auckland.It is like watching the 1987 share market crash it is that bad.I would,t take any notice of old information.
Seen 80 Auction in last two weeks it is undoing very very fast.The market has totally change as of 1 October the international buyers are out.Seen 4 property passed in 15mins today good Northshore properties no bids.

Property crashes are like train wrecks - unstoppable and inevitable once past the point of no return.

The banks should be getting worried and cut lending to 60% on all Auckland property ASAP.

the banks need to lend more.... this is the problem. the moment they say ' sorry guys -no lending unless you have 70% cash deposit' - the markets would crash instantly as there is no money. there is no money to buy those properties unless bank will print them...!

Exactly, so Reserve Bank restrictions with variable LVRs and restrictions on the term of the loan (giving greater principal payments) would be better controls on runaway housing markets than pure OCR control.

Imagine if the RBNZ had introduced 60% LVRs in Auckland 3 years ago and introduced maximum 20 year long terms for Auckland (no interest only lending).

Add in controls on foreign ownership of residential property, controlled migration and a graduated CGT (phasing out to zero after 10 years ownership) and then we wouldn't have any of the current problems.

Auctions are not the best way to sell in a falling market. been saying for a while when you see the number going to auction fall and more being priced then you will know the market has turned
if it does fall, the banks wont roll mortgages over if they turn negative equity

except then on their books their assets no longer exist but become liabilities so they have to borrow which costs them, hello vicious cycle.

the big four have been preparing for a downturn in aussie, raising more capital, increasing interest rate margin. doubled their bad debt provision but then they have to as the first 100k you have on deposit is insured
meanwhile their NZ subsidiaries nada they have the OBR

6 auctions a day, what say you ...

But anyways, some kind of crash may well be at the doorstep and young people should take heart - except the crash will probably also take down a lot of jobs.

Draghi announced more money printing today, the Chinese are so scared of riots that they will print whatever it takes to keep the lid on, and the RBNZ - well it will probably do nothing if a major correction is coming as the money markets are globally already flooded with printed money and one more drop from NZ would not matter.

Good luck to us all. Now we are praying for a major crisis so that our kids can buy a roof over their heads. If that isnt crazy, than I dont know what is. Oh, except publicly announcing that a country's borders are open with immediate effect and then wondering why millions of paupers are invading - maybe John Key isnt so bad after all, relatively speaking :-)

All that time we were looking at land taxes, capital gains, debt and price ratios.

And all we needed to do in the end was to ask for a tax number .

Well, Key is right about one thing. London, Vancouver and Sydney do have these issues:

International money laundering in the real estate market.

"There is an unprecedented level of construction and consenting now taking place in Auckland "

How can a journalist honestly report this statement without mentioning the consenting data which they themselves have been reporting as declining numbers of properties consented for the last two months.

Unless by "unprecedented" Mr Key actually meant an unprecedentedly low level of construction and consenting relative to population increases.

Reporting? Reporting? That's not reporting

That's simply BH regurgitating, verbatim, the words of JK without question

With the passage of time anything can be retold and retold and it becomes true
You are right, just a week ago we were "told" consents in Auckland were down, down, down

John Key is running out of time to fix the Auckland housing crisis. If he doesn't fix it before the next election then he is out (assuming NZ First go with Labour and Greens.. , I know...).

If you live anywhere other than Auckland and think it doesn't affect you, ask yourself, what would the OCR be if there wasn't an Auckland housing crisis?

Interest, are you willing to go through every statement Mr Key made today and examine it closely? For example, is the Government really doing everything it can? Can one really buy a house under $400k in Auckland? Is the Auckland market really cooling? Will they really listen to our suggestions on how to resolve this crisis?...

I think Interest started getting off the fence when they wondered whether " a sign saying 'welcome to John Key's South Pacific money laundering paradise' should be hoisted at Auckland International Airport"

Is Key asleep at the wheel or instead is he just hoping that NZ is asleep at the wheel just long enough for him to get back in one more time.
That hit home for me that here was a site willing to state the bleeding obvious.

The next financial crash has possibly already started so politicians already have an excuse should people get burnt.

Even mainstream bank economists are calling for radical measures to revive growth: Nick Kounis, ABN Amro’s macro-economics chief, called on central banks to raise their inflation targets to 4% and flood the world with money in a coordinated survival strategy.

That Guardian article is probably spot on - it's a must read in my opinion!

I am afraid The Guardian is a left-wing loon bin. Read it for stories on discrimination, climate change and feminism, but stay away from its purported economics news ...

not much different from then :-)

Still John Key is doing right thing and he is the best PM. As dairy pricesa 're falling, construction industry is running economy.

Auckland house prices go up because people want to live in Auckland because NZ is doing better than most other countries in the world because our government is doing a great job over the last 9 years.
It's that simple

So Labour did a good job too? As the Natz have only been there 7 years...

Wrong! Auckland house prices go up because investors see the size of the city as a deliverer of underlying growth meaning there will always be a demand for houses and property and therefore an easy way to make a good profit for little to no effort. As AK has become increasingly unaffordable and poeple look to move to other centres, then the investors will follow the same trend there too (already happening).

On top of this, because the Government refuses to cap rents and continues to provide accomodation supplements (over $2 billion) it is effectively subsidising investors returns (yield) and therefore contributing to the problem rather than solving it.

Currently I do not see a prospective party prepared to discuss real solutions, as they are all buying into the arguments from the money (investors, banks, economists) about "risks" to the economy. Well the economy has long gone from being a risk to ordinary kiwis, to a clear and present danger that needs our legislators to step in and take decisive action.

My opinion (despite the nay sayers) is that the Government should put rent controls in place at a max of $200 per week (average wage at about $55K, $700 in the hand per week). Deal to housing shortage as investors bail because yields get sunk, deal to poverty by putting more money into workers hands after paying for accomodation, improve families lot, significantly reduce cost to tax payer. But oh dear the investors might get a little burnt, sorry no tears left, and the banks? Well $4 billion profit (combined) means they can probably weather a hit in a mess they helped create.

You're wrong, investors do not buy empty houses, Auckland houses prices go up because people DO want to live there. (the South Island's west coast house prices go down because people do NOT want to live there), simple.

Nope, underlying size (linked to economic fundamentals) of the city delivers growth. No economic growth in the South Island West Coast therefore no one going there, also too far from anywhere, limited ready access and so on. In AK the Goverment is also subsidising returns through accomodation supplements. People went to AK to find work, or better quality jobs. the current sityuation has made AK virtually unaffordable unless you already own property there, or have boat loads to play with. Plenty of media reports on how ordinary AKers in basic jobs are struggling to survive.

a) no, "investors" buy houses as they think the price will continue to go up, there well may be no real demand.
b) Not because they dont want to, I for one would, its because there are no (well paying) jobs.

a) Rubbish, investors buy houses where there is demand (i.e. Auckland) and most do need tenants to pay rent or get a mortgage
b) You're really agreeing with me, there may be a thousand different reasons but bottom line is what I said first, Auckland house go up because people want to live there, it's that simple...

Um no, rents have hardly climbed while properties in the good areas have gone up in capital value, that isnt true demand but speculation from investors looking to sell to the greater fool and not renters.

Are we at cross purposes here? That is what I said. The big attraction for Auckland is the sheer size of the city, which is seen as providing an underlying demand for property, and therefore capital gain. An added bonus is the rental income for those who have borrowed to invest which increases the yield from the property by providing an income to offset some or all of the costs. Not sure about (b) but I do know there are plenty of good jobs advertised, but being based in the regions means that even if paid in the realm of $100K my lifestyle would suffer significantly if I moved to AK, as disposable income would be less than what I have now on significantly less. (My quals include IT degree and post grad Quality dip, and risk management, 15 years)

Income and profit should really be from the rent, capital is the icing on the cake when you sell at the end IMHO ie we see it backwards to each other I believe.

If you look at the USA they did a lot of speculation, lost 30%+ in some cases and I dont think this is over.

Agreed, but it appears that too many are banking on capital gain. I used to have a rental portfolio before the market went stupid, and as there had been no capital gain for years here, I didn't figure it into my calcs and made good money renting. These days though, the rent required to get the same returns is simply unaffordable, and I am offended and pissed off that the Government has allowed accommodation supplements to grow out of sight. This is taxpayers funds, admittedly superficially providing housing, but what impact would there be if WINZ had stated that they would not support a rent over $200 per week? A lot of investors would have been left struggling and perhaps failed causing the market to stabilise of even shrink back. There'd still be demand and growth in prices, but not at the rate we have seen. Now the whole economy seems to be under threat by one part that should have been and could have been controlled a lot earlier.

Totally agree especially WINZ. Yet from the left voter there is still a considerable demand for the frozen supplement to be increased preferably automatically annually (this certainly comes up in Green party members / followers discussions). Kind of strange really that the landlords and speculators are not voting for Labour/Green en-mass for the inflation indexed income they would get. Sad, on many levels.

"lot earlier" yes in HC's time and certianly the tax cut when JK got in was a huge mistake.

Ha, I never know whether to laugh or cry when I visit here.

Governments, central banks, economists doing the same thing over and over again expecting a different result. The population doing the same thing over and over again expecting the govt, central banks and economists to actually solve the problems. Insanity.

Ponder this, is it really a supply and demand for housing issue or is it a supply and demand for "wealth" issue?

We seem to be aware of the problems but to solve this and other current problems requires the removal of our blinkers to understand the underlying causes. Economic theory will not solve the issues.

Um? we have not done sound economics, so anyway what theory then? blind guessing? considering that is what has actually gone on since 2008,

"What has worked, instead, is Macroeconomics 101, which is why people like me — or, if you really dislike yours truly, Ben Bernanke — have done pretty well. (I was at a book party a couple of months back, and was accosted by one very famous investor who said, bitterly, “Well, so far the markets agree with you.”)"

I mean FFS, we have sound economic theories on the problem its that they are cancelled by lack of cheap abundant energy, ie they assume you can grow for ever on a finite planet. So once you factor in that then then sound economics point to a decline, no if's no buts.

of course no one wants to hear that.