PM says report showing Auckland 4th least affordable in world reflects demand for Auckland as international city; Govt 'pulling all the levers it can'; first home buyers can still get on ladder; was just the same under Labour

PM says report showing Auckland 4th least affordable in world reflects demand for Auckland as international city; Govt 'pulling all the levers it can'; first home buyers can still get on ladder; was just the same under Labour

By Bernard Hickey

Prime Minister John Key has downplayed a Demographia report showing Auckland was the fourth most unaffordable housing market in the world last year, saying it reflected strong demand for Auckland as an international city and first home buyers could still get on the ladder in Auckland.

Key told Morning Report there were other reports which showed affordability was not as bad and that the Government was pulling all the levers it could to bring supply and demand back into better balance.

Demographia published its annual report this morning, which it said showed Auckland had become the fourth-equal least affordable housing market in the world with a median house price to income multiple of 9.7. This was worse than the 9th Auckland was measured at for 2014 and meant it was less affordable than Los Angeles (8.1), London (8.5) and San Francisco (9.4), but more affordable than Hong Kong (19.0), Sydney (12.2) and Vancouver (10.8). Melbourne was equal with Auckland on 9.7.

"It's a lagging indicator I'd say," Key told Morning report, pointing to figures for late in 2015 that showed house prices in Auckland were not rising as rapidly as in early 2015.

"In the end, it's a balance of supply and demand mixed in with real confidence about Auckland and lower inflation and lower interest rates," Key said.

Key denied that it was impossible for someone on the median income in Auckland to buy a house in Auckland.

"We have the lowest interest rates we've had in the last 50-60 years. You've got mortgage rates with a four in front of them. You've got the banks still able to lend well in excess of 80% for a new home now in Auckland and you've got a wide range of houses," he said.

Key said some home buyers could choose to buy a two bedroom apartment or those homes for sale between NZ$400,000 and NZ$500,000.

"A lot of people start in a home which is less than the median price and they work their way up to that," he said.

Key said the Auckland housing issue was not new and there had been a "kick up" in demand in the last few years.

Challenged on why housing affordability had got worse under his watch, Key said: "This is one survey. There are other surveys that are done. The Roost survey (interest.co.nz's home loan affordability report) for instance has a different measure of the way these things are done."

"If you take a fundamental step back and forget about the lagging data in Auckland, there's the highest level of construction in the last 11 years. We now have 106 special housing areas in Auckland. The number of consents is rising rapidly. There's no question you need more supply. There's no question we're pushing things through as fast as we can, but when you establish a special housing area, we all know that doesn't magic the houses on there overnight. You still have to put in the infrastructure and make things happen," he said.

"In part it does reflect that Auckland is a very attractive place to live. It has the same sort of characteristics as many other international cities. If you look at that survey, there we are alongside Sydney and Melbourne," he said.

"There's no question we need to pull all of the levers and do more. All I'm saying is it's not new that house prices have been rising rapidly in Auckland as they did under the previous Labour Government. It just in part reflects that Auckland is a very attractive place for people to live, both from the international environment -- people coming to Auckland -- but also people who live here."

Seymour blames baby boomers in cabinet

ACT MP for Epsom and Government support partner David Seymour said the report was a reminder that a "Cabinet of baby boomers" had done nothing effectual on housing affordability.

“In a past life I was a spokesperson for Demographia and I watched the Auckland market grow progressively out of control.  Where the median house was 6.4 times the median income in 2009, for instance, in this latest report it has hit 9.7," Seymour said.

“Those who grumble about a lack of a capital gains tax should look at the ten least affordable markets in the (global) Demographia Survey.  All of them except Auckland are there despite having a capital gains tax. Those who like to blame the immigrants should take a look at fast-growing American cities such as Atlanta and Houston, that have maintained functional housing markets despite rapid growth," Seymour said.

Seymour said the Government should ban the use of city limits such as the Rural Urban Boundary in Auckland. It should also share the growth in company tax in any physical jurisdiction with the local council to help fund infrastructure and fundamentally reform the RMA.

'Don't topple the house of cards'

Meanwhile, Property Institute CEO Ashley Church warned against 'knee jerk' and 'quick-fix' measures in response to the concerns about housing affordability, saying Auckland's prices reflected its international status. He said 'sloganeering' about bringing prices down risked making the problem worse.

"The solution is to slow the rate of house price inflation while seeing a gradual increase in the median wage – and that will take time," Church said.

He proposed increasing land available for development, allowing intensification in the central parts of the city and encouraging first house investment outside of Auckland,

He said a large number of New Zealanders used the equity in their homes to buy businesses, invest in other assets and buy things, so falling house values would damage the economy.

"So reducing the value of their home could have a devastating effect on the economy and could bring the whole thing down like a house of cards," Church said.

(Updated with comments from Property Institute)

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

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23
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"We have the lowest interest rates we've had in the last 50-60 years. You've got mortgage rates with a four in front of them. You've got the banks still able to lend well in excess of 80% for a new home now in Auckland and you've got a wide range of houses," he said. That's the problem defined in one sentence - gambling geared up speculators dominating the market.for shelter.

Lots of money to be made in leveraged momentum trading. Lots of money easily lost in leveraged momentum trading too.

16
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Usually people get fired for being this bad at their job. Here's hoping.

It comes down to a) ppl (swing voters) vote with their wallets, b) who appears to hold the centre ground and its not the left.

He certainly sounded like he was squirming under even that soft questioning.

Who needs to work with house prices like that in Auckland? Many (ex)JAFA's have already cashed up, taking with them > $1m profits (some way way more) over the last 10-15 years, and it's tax free! They can now settle in the regions with low-paced jobs and live like kings & queens.

If they can get work....its not so easy.

With the profits they have made, they can easily set up a small business and live a low-paced life.

...assuming they have no kids who need to live in Auck for work...will they just toss them to the greed of the landlords and foreigners? Maybe some will...great legacy huh.

A lot will.

"Seymour said the Government should ban the use of city limits such as the Rural Urban Boundary in Auckland"
How about also banning the density limits like minimum section size and let the market decide if people want dense housing close to the city or full sections on the outskirts. Surely that should be ACT policy - can anyone think of a reason why it isn't?

So lets do that on the dubious premise there is actually real demand and then who pays for the roads, drains etc?

Auckland is projected to hit 2 million by 2030 according to stats NZ, and that is an old figure that has probably been revised upwards due to recent immigration.
Auckland needs to build a lot of houses just to keep up with natural increase.
They have to be built somewhere...

What about the 30,000 empty/vacant standalone ghost houses in Auckland central suburbs? Are they just decoration?

They are (hopefully) not going to house another 500,000 people in the next 15 years!

13
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As I have said before. Kiwi families should just march in and occupy them, (close to the next election)
Many of these houses are probably owned by foreign people seeking to hide dubiously sourced cash from their own governments. They are not likely to engage with our authorities (and consequently the media) and reveal their correct identities, so the squatters would be fairly safe.
There is UK precedence for this. Squatters rights.

Yes unfortunatley the UK removed squatters rights a few years ago: https://www.gov.uk/squatting-law/overview
But I do agree with your point. Though I think you'll find that the cash tap for these overseas investors has been recently turned off. And once the dust has settled, I think you will find that NZ and mostly Auckland's house prices will have to drop. I think things will be clear by March.

Seriously? - well over 10% of central suburb houses are empty? That's where I live and walk around a lot - I've not seen one. There's none in our neighbourhood. Where are they all? Can you give some addresses so I can see for myself?

Yes go drive around. Here are some examples:
1) 474 Remuera Rd (Sold for $3.2m in 2014) - still empty
2) 37 Benson Rd (Sold for $3.74m in 2015) - still empty & now in the mrkt again
3) 17 Rangitoto Ave (Sold for $2.58m in 2015) - still empty

If you have sources who can look it up for you, check the surnames of the owners ;-)

same out my way houses just sitting empty grass up to the windows

You are right. We noticed plenty of them around St Helliers on our evening walks. It is amazing what you notice if you walk around the streets compared to driving.

If it was one in ten (30,000) then you should be able to name four or five on the same street!
There are always going to be some houses empty in any city, and there probably are more than there used to be due to overseas investors, but I can't believe one in ten houses in the central suburbs are empty, I haven't noticed any myself.

We have a share drive for one property in Auckland, the other three properties are absentee owners.all off the street so you would not know by walking by.

See the same in Chch, within a block of my house in Burnside (upper-middle working class suburb with good school zones) there are three within a block of my house that have been emtpy for between 6 and 18 months. All owned by people with last names I can't pronounce.

Would anyone know how to check occupancy? Water & Power usage perhaps? How would one go about getting the data I wonder?

Good idea Matt73. Power companies have the consumption data for electricity and Watercare or whatever they may be called will have it for water. Power is mostly on smart meters in Auckland now so easy to identify if there is any occupancy. Some will be disconnected rather than pay daily line charges but again easy to identify as retailers required to record and report disconnections to Electricity Authority for non payment. Subtract total disconnected properties from non payment reasons and hey presto, it's going to be close enough when you add the properties with nil or minimal consumption.
Of course, Joe Public won't be able to get the data due to confidentiality, privacy, contract issues etc. Aggregated data is all that is required. I can feel an OIA coming on. Wonder how much that'll sting me?

Matt 73 - just lift the water meter cover out on the public footpath, take the reading and check again in a week or a month. If it hasn't moved then it's vacant.

I live inner West and never go to the inner east. Seeing as there's none over here must be 1 house in 5 over there to get the average up - unlikley.

The 30,000 unoccupied figure probably comes from the census data for the Auckland Region (including all those holiday houses). 6.9% unoccupied in 2001, and 2006 dropping to 6.5% unoccupied in 2013 (33,360 unoccupied dwellings).

Surprise, surprise all have Chinese names - now you can call me a racist! The off shore foreign (Chinese) owned empty homes are everywhere. The new requirement to provide an IRD # will not show up an ongoing pattern of offshore purchasers as they have now stopped buying - John Key will say in 6 months time - "See! The data shows there is no offshore buying." But the damage was already done over the last 4 years.

Was crazy policy allowing offshore based foreign buyers to buy up large, trade in properties and leave homes empty. The pollies turned a blind eye as they themselves benefit from this distorted market as many of the pollies own multiple investment properties themselves and are setting themselves up for retirement.

29
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If they are "pulling all the levers that they can", then somebody else has their hands on the immigration lever, the zoning of residential land lever, and the enforcing competitive building materials markets lever.
Who. Or is this just more B.S from somebody who has absolutely no idea what the telling the truth means.

There is no other game in town.

Rubbish.

18
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They're pulling something, but I don't think it's levers.

I had an extended family lunch at an Auckland beach yesterday, always a pleasant affair with the marrying of Scandinavian to Polynesian and European cultures. The family numbers over 100.

Having 10 New Zealand based first cousins it was interesting that three of them at the family function face housing problems that they discussed with me(others do also). Two of those with Auckland. The said thing is the absolute that you must own a house. Some of these are average folk that can only deal with what the see in front of them. When you come down to it this desire to own is primarily driven by trying to escape rentier income (I can't help but wonder what sort of social experiment it would would be if you banned it).

The solution are so far:

1. Buy in another district and rent that house out temporarily while building a client base in that town for their self employment. I suspect this will work very well as they are good hard working ethical people. (edit. This couple just made a couple of wrong moves that saw them locked out of Auckland housing after once being in it. Makes you wonder when a simple move becomes a major life gamble)

2. Want out of Auckland desperately so can be mortgage free. This one could easily secure a transfer of employment for the government salary received. But family ties mean the distance to Auckland is a factor.

3. This one is executing a long term plan to live on a Maori block. I don't blame them, I have been there and it is one of New Zealands premier beaches. Given my all round skills and technical knowledge I am in demand as a consultant (unpaid.lol). What is of interest is that one of the rules laid down by the trustees of the land is that no income can be derived from it. You can support yourself, but not sell produce. So they have indeed banned rentier income by doing this.

10
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PM is out of touch. How many empty homes were there in Auckland 20,000 ?

Problem is the people setting the rules are largely property investors also so have little interest in hurting their portfolios.

There are almost 4000 houses for sale on Trademe today under $800K
What shortage? What Crisis?

29
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Those silly peasants getting all worked up over nothing. $800k is mere pocket change. Smashing good value for a fibro shack.

thats what his spokeman Mike H said, there is no crisis, 800 k easlier affordable a family on 80-90 k, they dont need food or electricty luxurys they can go without while they pay all that interest to the aussie banks

The shortage of common sense, the crisis of values.

20
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Key's still playing the percentages,like the forex trader in him, he knows only one way. He's only interested in 50.1%. That's a pass. It doesn't matter about the other 49.9%. They literally don't count in his world.

The fact that it's constantly being called "a ladder" is very significative

Is a ladder that is missing several rungs from the bottom still a ladder though?

Oohh! A game of snaKey and ladders?? That's nice. :)

23
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I've just realised...
John and his cronies are just trolling us imbeciles. They're really just political satirists masquerading as inept politicians.
Surely.
It is the only explanation.

27
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Truly unbelievable stuff from the grinning PM. This is a total insult to the intelligence of many younk kiwis who would love to own a home in Auckland. The only places available within commuter distance and costs under $500k are either minute flats in Hobson Street or leaky townhouses. The government is hardly touching any levers never mind pulling them. Hardly any new land has been built upon, consents are as expensive and lenghty as ever, cashing in ones Kiwisaver funds is a mockery of financial planning, immigration remains rampent, construction is progressing at a snails pace, and even with low interest rates the amount needed to borrow continues to increase. Please note that all the costly towns at the top of the list have one thing in common.... They are key destinations for funds leaving China. I appreciate that general elections are won and lost in the suburbs of Auckland, and those who own property have become paper millionaires, but the problem under our jovial PM continues to get worse not better. His opinions are simply an insult to anyone's intelligence. By the way his strategy of maintaining low interest rates also profondly hurts those savers who are now getting minimal returns on their banking accounts.. One can only assume that "debt is good" and that the more debt we have the better for everyone... whatever happened to the Cullen Fund?

Talking to someone from Vancouver the other day. 85% of the kids at her daughter's school are Asian and the predominant language spoken in that school is Mandarin. Xenophobic I am not but the money for property is in the main not coming from Canadians in Vancouver. Meanwhile in Calgary where I have family the housing market is in the doldrums and losing money because of the price of oil. Two or three years ago it was booming and the place to be, not any more.

10
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He looks very silly when he says that National are so great for keeping interest rates low. Interest rates are low because there is no inflation pressure from rising wages. So we should all be happy that National are keep wage rises as low as possible to 'help' people get on to the overpriced property ladder which is almost certainly going to collapse at some point?

The property market is already starting to crumble in Auckland just give it a few more months, I can already see it happening on the West Cost.

same out south, I have seen a couple house prices reduced from starting point for them to sell quicker.
they are flips so no money is being made sitting empty waiting for a buyer

I slapped together a chrome plugin other day that remembers trademe listing prices and descriptions and shows a history when you hover. I should tidy it up and put it on github. Agents write so much horse****

How come the affected native Kiwis and their parents repeatedly vote for National and Key ?

Because the opposition parties cannot put up a viable alternative leader or policies. Says a lot for the quality of our politicians.

The only reason an investment banker/currency trader would want to go into politics is because they understand it allows them to become a massive insider trader and get away with it without question ; His 'blind' trusts and other entities he controls (but doesnt technically 'own') have probably grown massively over the time hes been pm.

Another year, another expansion of the bubble that is Awkland, another reason to take this here old jalopy of a blog post out of its wrapping, and fire 'er into the Ether once more. http://waymad.blogspot.co.nz/2007/04/housing-woes-oh-and-theyre-in-uk.html

Because not one damn thing has changed .....

Some ideas to debate on housing affordability and giving young people a better chance to own and occupy their own home.
1. Tax vacant residential land
2. Review sub-division costs
3. Restrict overseas buyers to new home builds only
4. Reduce amount of mortgage interest to be claimed off income from investment property. Restrict this to income from investment, not against other forms of income.
5. Interest rates from banks higher for rental/investment properties than owner/occupied dwelling.
6. Funds earned through capital gains need to be equally treated as other forms of investment e.g. interest on bank deposits is taxable. First home buyers saving for a deposit are penalised.

Wise words, Tut Tut. It could all work so beautifully if only voters would go for it.
Why is CGT so unpalatable to the majority of people who turn out to vote? Exempting the family home would be critical, but think how much a small slice of the gains on investment property (including foreign ownership) could do to bridge the increasing gap between the haves and the have-nots? How about a tax allowance for every person in employment?

For comments you've interviewed the centre-right and the far right political parties...

Is that what counts for balanced journalism these days!?

Feeling vindicated by decision to leave AK.

Well done Auckland, slow clap for JK. But we could try better and get it to No 1! Truly international city for the high rollers. Yay!

Now, now, that is what I would call..."Sub Prime"

Updated with comments from the Property Institute on not doing anything to reduce house prices, which "could bring the whole thing down like a house of cards."

The last two paragraphs sum things up pretty well.

Jesus.

Screams MORAL HAZARD doesn't it.

Apparently property prices are some kind of endangered species that must be protected at all costs. They can never fall. Risk free, Tax free money.

P.s. thanks for your dedication to the topic, Bernard. It's important work.

15
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LOL - this is too funny. The cheerleader for the Property Institute uses the term "bring the whole thing down like a house of cards".

he play game of thrones?

Interesting that he should admit that it is a house of cards. The reality is that a house of cards will always crash down. All it takes is a puff of wind, knocking the table, the brush of a sleeve; the construct has no natural stability or resilience. Even trying to dismantle it will probably cause it's collapse. Only a fully free market that is grounded in unfettered supply and demand will produce long term stability and be resistant to the random forces that may tend to displace its equilibrium.

15
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As a would-be first home buyer the comments from the PM are a farce. Govt is "doing" enough to make it look like they care but in reality making little to no impact on escalating house prices - which suits them and the boomers just fine.

John Key's snarky comments about interest rates and whatnot are just a slap in the face to hard working young people trying to build a life here.

10
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....omg throw me a bone...

"He said a large number of New Zealanders used the equity in their homes to buy businesses, invest in other assets and buy things, so falling house values would damage the economy.."

Yep...no actual income required...just access to the housing ATM machine. Go Ashley..bit leveraged are we??

"The solution is to slow the rate of house price inflation while seeing a gradual increase in the median wage – and that will take time," Church said.

First, slower house price inflation planning is never going to happen since rising asset prices are a pillar underpinning central bank wealth redistribution schemes. Second, globalisation in the form of trade deals with EM nations arbitrage wages relentlessly lower.

To quote JK: a person in Beijing who is planning a purchase in Auckland will wake up one morning, listen to Ashley Church, and say to themselves, oops, I better not pay a price that results in a price increase above the rate of local wage increases

And do the numbers :-) Even if nominal house prices freeze today and income inflation continues at the same rate we are looking at >50 years before Auckland gets back to the historical norm of MM3.0.

What did Keynes say about the long run, again?

Auckland Council has a goal of "Five for 2030" to get the Median Multiple down to 5, again, by increasing wages to catch up with prices. For this to work in the 14 years to 2030, house prices would have to remain unchanged and median wages raise at 5% per year.

There is a clear case there to give another couple of terms to National, to bring these changes about ?

,they have had 8 years and done squat, the definition of insanity is to do the same thing over and over again and expect a different result.
its time for new ideas and for once I agree with David Seymour parliament is full of baby boomers feathering their nests and destroying the prospects for the young

..I 'm a baby boomer and by no means ACT supporter, but this yound Seymour is starting to stand up for the young...I'm all for that, Grey Power has too much say, as do the boomers. He's starting to push the right buttons.

Ultimately though Seymour's political future is hitched to the National train. Unless he can get ACTs vote to be consistently greater than 4% then he is beholdent on National's goodwill. If National runs a genuine candidate in Epsom then it is bye bye Seymour. So Seymour will always pull his punches when it comes to criticising National policies -like this housing crisis fail.

yes that is the shame of it, unless he can somehow get ACT into a stronger position he is a dead man walking. it is interesting though the the far right and the far left agree that it is a problem, but the two centre parties just waffle and tinker and have said or done nothing meaningful to sort the issue. wonder why they might be, could have something to do with how senior politiicans rent appartments and housing to junior politicans

15
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Lobbyists should learn when to keep their mouths shut

Property Institute CEO Ashley Church says falling house values would damage the economy

Q: So why wasn't the ecomony skyrocketing when house prices were skyrocketing

C: As for the rest of his comments we've heard all that tripe before

Just whose economy might be damaged. More so than it already is.?

Theft by stealth is still theft. Fraud is still fraud. Even if the state allows and has their hands in each and every transaction.

There should be a revolt to take care of the Revolting. Should have happened before 2008.

But most people are too stupid to know they are being screwed.

Richie has been on holiday so Mr Key hasn't been able to ask anyone else for advice.
Chances are he will retract his comments after Richie has shown him the errors of his ways.

If only it were just one thing...

http://www.stuff.co.nz/national/crime/75445578/gang-warfare-coming-soon-...

Here is something else to worry about, that our Dear Leader has done nothing about, even though it is yet again, staring us in the Face.......Ganging up on us all.

Rentals better watch out...Neighbors had better watch out, in fact everyone, except Motor Bike Dealers had better watch out.
(Now there is a thought, where could the Police get a lead from???...if anyone had half a mind to stop the traffic, all dead) DUH.

They all report back to Awkland apparently (Must own a few rentals...for sure themselves)...but then doesn't all things wrong in NZ, stem from Awkland, via Wellington...and Political machinations..and blindness.

I see graft as the most abominable rate of increase...in NZ...and I do not mean hard work?. Money for nothing and yer kicks for "free".

Slipping a backhander to those in the know....but have their eyes wide shut to process.

NZ Classic ..TUI.

I have been warning of domestic decay for a few years now and this is a good example of what I mean. The Police could be given the resources to deal with the problem, but are not.

The world runs on the background ability to utilise coercive force. If we don't give it to the Police then the gangs take over.

Meanwhile in property land everyone is concerned with having the best house on the poorest street.

.......nah just remove their income stream...simple. http://www.news.com.au/lifestyle/health/health-problems/hardly-anyone-di...

Astonishing. Great link, thanks for that.

14
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Apparently the solution to extortionate prices is... SUBSIDIES!

http://m.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11579210

Straight into the pocket of Fletchers no doubt as prices adjust to include the extra money available. Shameless vultures.

Is it just me that's hearing a whole lot of excuses and not a lot of solutions? (and getting sick and tired of it to boot?)

It's more insidious than that - and the scribes don't know how to handle it

re-post of comment from Two Otherguys 29 July 2015 on a Bernard Hickey article
http://www.interest.co.nz/property/76772/andrew-little-says-labour-oppos...

22 July 2015
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 politicians of all persuasions but John Key has mastered the art and employs it very successfully.

http://www.odt.co.nz/news/politics/349952/pm-painfully-out-touch-housing

Perhaps Bernard Hickey didn't get the message

10
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does no one else find it a bit warped that my house makes more than i do in a year for doing nothing more than keeping the rain and sun off my head while i sleep.
it has not produced anything, it has not created anything, i can not take it with me and use it when i go somewhere, the only thing it has done for society has housed me therefore kept me off the street
i think until we change the mindset of what housing is for we will have this crazyness carry on for years

http://www.marketwatch.com/story/americans-buying-bigger-pricier-homes-2...

First home feeling a little claustrophobic and overpriced... Think on.?

13
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What we all neglect to accept is the social issues around Generation Rent. Children who are born to renters move schools more, and therefore achieve less. (I hear Paula Benefit blaming the teachers...) Communities that have high renters become less desirable and couples fail to make friends in the area due to constant movement. I think we are seeing the start of something far great: Aucklanders move to Hamilton and Tauranga to seek cheaper housing, when they go up, the seek further ie Australia. Society won't function correctly in 10-20 years due to our failings of today. I wish there was another Political Party that could rise up and be the defining change we need in order to create a country of home owners, not apartment renters and owners. NZ is desirable but at what cost??

12
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Thank-you MP1. Basics seem to have been abandoned in pursuit of a gold bar, which I don't think will be very palatable in what is left of our pristine water. How do we change it? FIIK. I really enjoyed my country when it was from the people ,by the people .for the people.

I think we are all neglecting to accept is the social issues around what is unfolding here. Children who are born to renters move schools more, and therefore achieve less. (I hear Paula Benefit blaming the teachers...) Communities that have high renters become less desirable and couples fail to make friends in the area due to constant movement. I think we are seeing the start of something far great: Aucklanders move to Hamilton and Tauranga to seek cheaper housing, when they go up, the seek further ie Australia. Society won't function correctly in 10-20 years due to our failings of today. I wish there was another Political Party that could rise up and be the defining change we need in order to create a country of home owners, not apartment renters and owners. NZ is desirable but at what cost??

NZ First.

It isn't a matter of political parties, but a political system gone awry. Democracy is an illusion, if you want answers then work local and make the effort to bypass the political and bureaucratic systems as much as possible. Disempower them by not using them.

^^
This

A new buyer who was formerly a renter does not change the accommodation balance at all.
So much of the problem is that TOO MANY LANDLORDS and NOT ENOUGH HOME OWNERS.
One suggestion in the Herald today was to give tax relief to owner-occupiers.
Great! So the Gummint loses revenue.
However if an equal revenue was gained by reducing tax deduction on rentals, much could be achieved with nil loss of tax.
Bonus! Lotsa investors quitting at lower prices to new buyers.

10
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Biggest expense for any family = housing.
Price has more than doubled.
Has anyone's income?
Total rubbish from an inept Government.

The boomers are doing it tough today. Staring down at living on national super. Life will be even harder for them. X and y with their great incomes are doing very well. They can travel at will then come home and settle down in Auckland and pick up good salaries. I wish I was younger.

I dunno. I find it very hard to justify moving back to Auckland. The salaries don't look that great.

Maybe you should go and get a tertiary qualification that will enable you to get a job in Auckland that gives you a nice big salary and perks.

Already have an engineering degree, does that count?

In my experience it's of questionable value after a year or two of work, aside from providing points on overseas visa applications where salaries are vastly higher.

I know a young engineer in Auckland. Working on the underground train project. Very well paid and getting good work experience.

17
up

JK is totally right. What's the problem? My boss can count on ever increasing immigration to keep wages down while his rental properties are appreciating and his rental income is going up, subsidized by the government when the wages he pays are not enough to cover for the rent in one of his own properties. What's not to like????? Ah me and my family? we're ... (Comment edited for use of unacceptable language, Here's our commenting policy - http://www.interest.co.nz/news/65027/here-are-results-our-commenting-pol... Ed).

...doomed. lol sorry bout that

HOUSE PRICES ....On the Govt's list of too big to fail.

Perhaps Auckland needs many more squatters?

Free advice from the PM is worth every dollar paid for it. He should have retired at the last election as he's going ride this economic disaster all the way down.

Soviet Radio (RNZ) are putting about a rumour that JoKey is about to announce a govt. subsidized equity sharing scheme for Auckland house buyers - Yet another example of Nationals "Back to the Future" adoption of socialism. Labour ran this in the 1980's (one of Phil Goff's ideas when he wore the Che Guevara tash), which, along with a "Sweat Equity Scheme" were a complicated, expensive disaster (Ergophobia worked on winding it ((and the Mortgage Guarantee Scheme, in all it's variations)) all up in 1990). After the post '87 crash, mortgagors (IQ's matching shoe size) struggled with the notion of "Negative" Equity Share.

Your humble scribe asked Ashy Lurch, dean of Landlord Studies at the University of Britomart, for comment on the furore caused by the Dastardly Duo of Demon Graphic, Huge Pavlova and Wendy Coq, who have certainly lit a fire under assorted Gubmint and Council minions.

I asked: The Auckland housing slow-motion train wreck seems to have jumped the shark, to mix metaphors somewhat, Ashy. To what do you attribute this fustercluck?

Ashy paused, and pressed a hitherto invisible earpiece more firmly into his left auricle.

- Just... Receiving....Instructions. Delivery... of ... Sage Advice .... will follow .... Momentarily.,

There then followed what I can only describe as an Audible Grinding of Gears in poor Mr Lurch's cranium. After what seemed like hours but was most likely only minutes, he managed to reply.

- Price Rise Good......All Else Baaaad .... Transmission Ends

Then, to my utter surprise, Mr Lurch collapsed inwards, his body seeming to evaporate, leaving only a tired-looking suit on the floor. I can only surmise that he was the first victim of the House of Cards collapse of 2016.

The Tale of Baldy Bustard

The Prime Minister and her sidekick went to ask the sage advice of Baldy Bustard the Banker.
"What ails our nation Baldy Bustard?" they asked, "and what should we do?".

"Let me lend the people more money so they can pay more for their houses", came the reply. So they went to see the Governor and said:
"Baldy Bustard says we just need to let him lend the people more money and all will be well, is that right?
"Assuredly ma'am", came the quick reply. "If I put interest rates down then people can afford to borrow more against their income. They can then bid more for their next house. The price of houses will rise and everyone will feel richer and spend more. The shops will sell more, the builders will build more, the real estate agents and lawyers and bankers will earn more. All will be well in this country."

So Auntie Helen and little Michael said:
"Oh, that sounds excellent Mr Governor. You shall keep your job and get a raise."

The years went by and all was well. House prices went up and everyone felt richer and spent more. The shops sold more, the builders built more, the real estate agents and lawyers and bankers earned more. All was well in the country and everyone thought how clever they were.

Then a strange and unexpected thing happened. The currency went up and exports went down. Jobs started disappearing. At first it was unimportant old fashioned yucky jobs that didn't seem to matter, like meat processing and fish filleting; but after a while it started to affect the important jobs like real estate agents and lawyers and bankers and policy advisors, the jobs the country really depended on. People lost their jobs, they tried to sell their houses but no one could afford to buy them.

Then people got upset:
"The government should do something", they said. Looking for someone to blame, in the kiwi way:
"It's all Helen and Michael's fault", they said.

So Helen and Michael got the boot and Johnny and William took the reins.
"The place is a mess", said William to Johnny, "What shall we do?"
"Hmm, time to visit Baldy Bustard the Banker", says Johnny to William "He'll know what to do".
...

PREDICTION: THE END OF JOHN KEY NATIONAL PATI - DESPERADO GOVERNMENT 2016
Where is Order, where is balance, where is understanding? To bring Justice! The order of first home buyers NZ citizens first! HALT HOUSING SALES IN AUCKLAND sold to Foreigners...the above prices are whats expected when there are no laws limits on greed for profit Real Estate businesses. BAN REAL ESTATE INDUSTRY BUSINESSES FROM common sense Human Rights Housing of NZers First! Close immigration open deportation too much pressure on sewage systems unprepared! Its the media driving markets public advertising alongside corrupt John key national desperados to overpopulate cities such as Auckland Wellington Christchurch. Selfish arrogant adult behaviour again, not to be tolerated! Put a population limit on cities to say NO MORE! Politicians do more damage then good - 100 years of it! You cant keep up false demands when reality is you were never prepared the balance of power will shift in a return to MAORI INDIGENOUS OWNERSHIP RETURNS.