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Blood sucking leeches blame young for blood supply crisis

Written By: - Date published: 8:48 am, November 3rd, 2020 - 118 comments
Categories: housing, making shit up, spin, uncategorized, you couldn't make this shit up - Tags:

Want to see the most bizarre, idiotic and self centred analysis of the housing crisis in Aotearoa ever presented?

Here it is.  From Eva Corlett at Radio New Zealand:

Property Investors Federation’s executive officer Sharon Cullwick argued while property investors may not be helping the housing supply problem, they aren’t hindering it.

But she said first home buyers are, when it comes to purchasing rentals off the market.

“If a first home buyer purchases a property that was a rental property, then you’ll need another house to house the extra people living in that rental house.”

“So every time a first home buyer buys a house – even though it’s great they are getting into the market – it actually makes the housing crisis worse,” she said.”

Pesky young people buying houses so they have somewhere to live are creating the housing crisis?  Not blood sucking landlords who are wanting to provide the same houses to otherwise first home buyers but at a rate so that in the long term makes the young persons poorer and the landlords richer?  Clearly their definition of “housing crisis” is anything that makes it more difficult for landlords to continue to amass wealth, not anything that makes it more difficult for people to live in affordable housing.

Low interest rates are a contributor to the problem and the housing market is currently booming.  I suspect that the Government will have to move on Loan Value ratios in the near future.

118 comments on “Blood sucking leeches blame young for blood supply crisis ”

  1. It's that good old entitlement mentality.

  2. Andre 2

    Seems pretty clear we've below the threshold where lowering interest rates stimulates useful activity, but we're in an area where further lowering rates actually promotes harmful crap.

    Government and the Reserve Bank now need to be looking seriously at other tools, of which LVR is just one.

    • bwaghorn 2.1

      Its fucking ridiculous, this government has fucked housing more than key did letting the R B lower rates without slapping a huge lvr on investors. Ardern should hang her head in shame .

      • Tricledrown 2.1.1

        The Economy was in dire straits when the LVR was taken off.

        Now the housing market has got out of control expect the lvr to be reintroduced.

        One good thing is it creating plenty of jobs as house building repairs and extensions is going great guns.

        So a double edged sword the profitability of the residential property market is pushing the number of builds up.

  3. Patricia Bremner 3

    Yes, investors need to be required to have a larger deposit than a first home buyer, and no deposit if building a new home to live in. Investors should be encouraged to build somehow.

    • Rae 3.1

      If you want to build a rental portfolio, then do just that, build it, I say

      • RedLogix 3.1.1

        Which is precisely what we did do when we started. We either built new or massively renovated. And I'd like to do more, but the costs are now out of control and the numbers just don't stack up anymore.

        I was reliably informed that 20 years ago around 15% of all new builds with one big group builder were investors doing just what you suggest. I'd be surprised if that was the case anymore.

        And the contrast with Australia is just appalling. This last weekend we looked at some new show homes here in Brisbane. A$630,000 gets you a brand new single level 4 bed home, built to a standard that makes your eyes water. Here in NZ the equivalent would be at least double.

    • Tricledrown 3.2

      That was the case when the lvr was on.

      New builds weren't subject to the lvr and foreign investors were not stopped from new builds of apartment blocks.

      Which is smart as any new build adds to the total plus keeps jobs rich construction going at a time when other industries are struggling.

      • Sacha 3.2.1

        Construction is not 'jobs rich' compared with many other sectors. They use expensive machinery to displace humans.

        • Tricledrown 3.2.1.1

          Sacha I work in the building industry house construction is jobs rich.otherwise housing would be cheap.

        • Tricledrown 3.2.1.2

          Sacha while machinery does more work houses are more complicated as is construction.

          From start to finish from the roading sewage and services to the section.

          Surveyors

          Architect

          Engineer

          Local govt inspectors bureaucracy

          GNS engineers

          Insurance

          Diggers/ truck drivers

          Plumbing

          Drain layer builder

          Plasterers

          Brickies

          Roofers

          Glaciers

          Joiners

          Painters

          Gibstoppers

          Carpet installers

          Tiles

          Concrete placers

          Plumbers electricians

          Quantity surveyors

          Project managers

          Draughtsmen and women.

          Labourers

          And down stream workers

          Sacha I doubt you would find another industry that's so jobs rich

          Don't forget the likes of shower manufacturers.

          Gibboard manufacturers

          Roofing Iron

          Taps

          Timber and trusses

          Aluminium windows

          Insulation

          Down stream jobs mostly NZ manufactured.

        • Draco T Bastard 3.2.1.3

          You do realise that most industries use machinery to cut down the number of people employed right?

          Its pretty much what's been driving productivity and diversification in the economy ever since the industrial revolution.

          We really don't want jobs rich industries as they seriously curtail what we, as a nation, can do and leaves us vulnerable to trade shocks.

          • Sacha 3.2.1.3.1

            Yes. Boost our screen and IT industries, which can actually earn export revenue as well.

    • Tricledrown 3.3

      Banks don't lend on New builds that's what Labours kiwibuild was supposed to solve lending money till the building is complete so the banks have something to lend against.

      That scheme failed for a couple of reasons the rapid increase in building costs and a massive shortage of Tradies to build these affordable houses.

      So the upshot is that builders preferred to work on more profitable less risky up market houses.

      • Draco T Bastard 3.3.1

        and a massive shortage of Tradies to build these affordable houses.

        Figured that would be a major problem when they announced it. They mentioned supporting factories to pre-build houses but I was of the opinion that it wouldn't be enough.

        What's needed is machinery that will print a house in a day and only needs a few people to set it up, one person to watch it as it prints and then a few people pack it down ready for the next day.

        And 3D printed houses are really starting to come into their own now:

        3D printing is changing many industries around the world. The construction industry, especially for domestic premises, is no exception.

        Here are 7 interesting examples of proposed and in development tiny 3D printed housing projects from around the world.

        Unfortunately, Labour didn't seem to realise the need to use 21st century technology for Kiwibuild and just planned on using 20th century technology with poor standards.

  4. Kay 4

    I'm sure I was one of many who wanted to scream (or do worse), at this self-entitled tone deaf twat while listening to her whining this morning.

    I'll never be a home owner, I was never going to be Personally, I want the State to be my landlord because for permanent renters it's the only form of secure housing with any hope of setting down roots because the 'market' simply will not provide that option.

    Said twat above was right about one thing that we sort of all know anyway- more homes needed. But start with State homes. Much as I love my private rental (it ticks a lot of boxes, including safety criteria for me to live independently), I will happily give it up for the guarantee of a secure long term home, thus freeing up a flat for the private market which would make twat very happy, I'm sure.

    • veutoviper 4.1

      Kay, off topic but thought about you in particular – and several otheres on TS – when I saw this recrutiment ad on Health Navigator a day or so ago.

      https://www.healthnavigator.org.nz/healthy-living/h/health-consumer-advisory-service-recruitment/

      In short the Health Consumer Advisory Service( HCAS) set up in 2015 after a successful bid to the Ministry of Health "works to increase the inclusion of consumer advisors into health service design and planning at local, regional and national levels. Consumer advisors are people living with long-term conditions or disabilities. We need to make sure our team is diverse to be able to speak from personal experience when advising clients."

      They are currently looking for three new part time advisers tp jpoin their team as per the ad- the prime requirement being lived experience with a long term health condition or disability.

      i know a degree of cynicism is likely (!) but thought I would bring it to attention here and even if TS readers are not interested themselves, they may know others who might be interested and pass it on to them.

      Please excuse any spelling errors etc but currently recovering from najor eye surgery (trabulecotomy) a few days ago and can only see and read through a blurry mst.

      Sorry MS being off topic but wanted to catch Kay’s attention .

    • lprent 4.2

      But start with State homes.

      That is my opinion as well. Kiwibuild relied on doing it with private builds and we all know how that turned out.

      In the meantime Kaingora Ora aka HousingNZ has reversed the precipitous decline in their managed state rental stock.

      https://kaingaora.govt.nz/publications/housing-statistics/housing-statistics-archive/
      https://kaingaora.govt.nz/assets/Publications/Managed-stock/Managed-Stock-June-2020-National-Summary.pdf

      That dropped by ~4500 under National, and have raised it ~2500 in the past three years.

      As importantly, the mix is changing with strong rises in single bedroom properties suitable for the increasing trend towards people and couples living on their own, and 4 bedroom places to stop some of the family group over crowding that has been going on. No rise in 3 bedroom houses because they have a lot of them and less families needing them.

      So go with the option that has been working. Just get the state and community groups to build where and what the private market won't.

      Besides, pushing money into public housing the way we have done it works. As a big customer, it allows the government to set price, quality and production requirements to what the economy needs rather than what the property developers prefer. It sets the bar on rentals prices as they become a larger player in the rental market.

      It also eventually provides the right kind of housing stock – up to standard with few frills when eventually a tenant can buy it and bring it into the private market . Just as my grandparents did back in the 1960s.

      Old housing corp houses are sought after around Auckland for purchasing by property entrants for a good reason. They're solid and usually reasonably maintained. Which is more than I can say about many of the private market rental properties I've been in, and you don't get moved on all of the time.

      The only reason that I eventually brought an apartment was because I got the rental accommodation sold under me 3 times in 2 years. Apart from the pain in the arse to me and my cats, each time I had to reconnect my ISDN lines at an expense (in the 1990s) of close to $1k in disconnect and reconnect costs.

      I'd point out that in my block of 60 apartments there are 3 housing corp apartments. Sure in the last 22 years there are some issues with them. But generally they're way less of problem than some of the other regular issues. They're less of an issue than the some of the more explosive breakups between young couples. Or the trust 'kids' (often in their 30s or older) where the family has brought an apartment to house them so they aren't underfoot with their interesting problems at home.

      Community living – it is quiet and peaceful most of the time because the neighbours frankly couldn't give a shit about their neighbours apart from a vague politeness because there aren't many kids. But soap operas tend to be somewhat more obvious.

      • Pat 4.2.1

        All reasonable observations but requires an ongoing commitment to a state building programme….and as we know from the past 30 years experience there is no such commitment.

        There is no advantage to allowing state housing to be bought by tenants IF there is no replacement programme, nor is here any benefit to the community if there is an unannounced population growth strategy without providing the required infrastructure…everything is easy in hindsight, the real questions are how do we get from where we were to where we need to be…and where are we going anyway?

        The housing solution is easy….if you ignore the implications of enacting it.

  5. Phil 5

    Honestly, fuck this bullshit form the PIF. First home buyers are ex-renters, so while they might in theory take one house out of the rental market, they're also reducing demand for rental properties by one house… meaning no change to the housing crisis at all.

    • AB 5.1

      Yep – which I was yelling at the radio. Unless of course they are living with their parents, in a caravan park, on the street, or have just come home from a Covid-infested country. The first and last of these may be significantly large numbers. But this just makes what the PIF are saying even more appalling – because they are saying the problem is people looking to escape these circumstances.

    • Visubversa 5.2

      Absolutely, not all first home buyers are living rent free at Mum and Dad's place while they build a deposit. Most have been renting, saving $$$$ – sometimes by doing 2 jobs etc. The flat they move out of to live in their home, goes back on the rental market.

  6. PsyclingLeft.Always 6

    “Blood sucking leaches blame young for blood supply crisis ”

    Well this guy is on Record….so not him. No sirree…

    Mr Thiel said: "I want to publicly tell you that I'm not a vampire. On the record, I am not a vampire."

    https://www.independent.co.uk/life-style/gadgets-and-tech/news/peter-thiel-vampire-donald-trump-life-extension-blood-transfusion-ambrosia-palantir-a8614061.html

    But really….all those neolibs/libertarians/landlords who promised a Bright Future. Well they werent lying. It was Their Future. Fight Back !

    • PsyclingLeft.Always 6.1

      HOW did we get here?

      'Landlords have backed Auckland property investor Ron Goodwin who says they should not to be "too kind" because tenants take advantage.

      Mr Goodwin, 74, has 37 properties in Auckland and Waikato generating $14,500 a week in rent.'

      https://www.nzherald.co.nz/business/18m-landlord-who-owns-37-properties-dont-be-too-kind-to-your-tenants/H46F7RKYH34YOER63ASZVHDKWQ/

      And wtf?

      'A former Harcourts property manager in South Auckland has blown the whistle on an emergency housing scheme where a group of landlords were paid up to $3000 a week by the taxpayer for "marginal to uninhabitable" private rentals. '

      https://www.newsroom.co.nz/landlords-paid-3k-a-week-by-government

      As Ive said befor….New Government? You better get with the Trade Training…ON THE JOB ! Flat Pack Houses whatever…Stop Landlords rorting our Future !

      • RedLogix 6.1.1

        Yes I read that Herald article. Sadly he is right, the horrid truth is that the nicer you are to tenants the more they try to take advantage. In the end it's simply better to use professional managers.

        Right now we are dealing with a low-life who has kicked his own mother (and two grandchildren) out of the house she had been renting perfectly well for over a year. Now she and the two small kids have been forced into a crappy 'housebus' somewhere, and she is being forced to continue to pay the rent.

        He's thrown all her furniture and grand kids stuff onto the lawn to rot in the rain. He's keeps a dangerous dog, is vile and aggressive to the neighbours and the manager, who reports that from what she can see the house is being wrecked.

        HNZ won't take him as he's been evicted by them twice, and no private landlord will touch him as he cannot produce any references.

        But as long as the legitimate tenant claims that he's 'family' there may not be a lot we can do. This is going to be interesting.

        • Ad 6.1.1.1

          OMG Red. I think I've been generally luckier than that.

        • lprent 6.1.1.2

          Yeah there are definitely a few bloody awful tenants. My parents had a few in their properties. I had one when I rented out my apartment while we were producing a doco and were renting ourselves to get more working space.

          The problem is that there are some bloody awful landlords as well. I've had a couple of those too. Because of the potential power imbalance the tenancy tribunal and legislation is steadily tilting to protecting tenants.

          What is probably required is that the tenancy tribunal needs to be able to hire investigators to actually eyeball the on the ground problems and abbreviate the interminable process for both problems.

          • Tricledrown 6.1.1.2.1

            L prent creating enough supply would make it much better for tenants.

            Affordable housing ie micro homes prefabs need to be speed up to drive down demand.

            When Kiwi bank was started the big 4 Banks were charging ridiculous fees ,overnight account fees were dropped back to reasonable prices. They have stayed down and gone lower due to competition.

            The housing market needs that sort of a shake up.

            Land and infrastructure are hard to bring prices down and the govt could step in and help fund this area to make enough available.

            National had a plan to do what they did in Canterbury but Christchurch is surrounded by flat land which was easy to develop with a $66 billion insurance payout.

            No massive payout is on the cards so the Reserve Bank should print money to fund affordable new houses apartments only.

            The reserve bank gave the banks $60 billion at 1/4% interest rates to keep them afloat that money has ended up in the housing market adding to inflation in the housing market.

            The banks profitability would be far worse if not for the housing and property market.

            Just shows how fragile the free market is without corporate welfare.

        • Wensleydale 6.1.1.3

          People like that really need to suffer some sort of terrible 'accident'.

    • george.com 6.2

      I think the term 'blood sucking leaches' is off the mark bring levelled against all housing investors. Some will be, yes. Likewise not all tenants are angels, some are drop kicks. I think it's a batter approach to drop the emotive tags and hyperbolic language, reserve that level of odium for people who have shown they warrant it, like Trump. Here's my framing of things – everyone creates demand when they bid for a house, be it first home buyers or investors. One segment is not solely to blame. As for people buying up housing for investment, I support financial levers which dis-incentivise people seeing housing as a cash cow. We have the 5 year bright line test on speculation, that's good. Long term investors where they make a capital gain, tax the gain. A dollar earned is a dollar earned, tax it. That will not in itself drive investors from the market, unless they are solely focused on the capital gain perhaps, but it will mean they pay a fair share on any financial windfall.

  7. Ad 7

    I am now getting multiple friends call me looking to stay at my place to get them through some crisis or other. There's a list backing through to mid next year already.

    I'm sure the leafy streets of Titirangi will cope, but it's sure hitting home.

  8. Adrian 8

    Cullwick ,whether you agree or not is only stating a fact, a young first home buyer is on probability moving from a multi occupied residence, either Mum and Dads or a flat full of others to something which will initially at least, house less people than where they have been. Thats true, but how big the problem is, is another question.
    Blood-Sucking-Leaches is also a bit unfair, by definition anybody selling any needed service fits that description.

    Building more houses is the answer, but what sort of houses? It seems that the ones needed are the sort that only Government can justify building, buying a 1-2 million dollar house to rent to a family or a bunch of Uni students is economic suicide. Even at $1000 rent a week , given the costs of owning a renter it is a long time to wait for rents to catch up to holding costs

    Better to stick an empty house tax on those properties that are being held simply for windfall profits.

    I wouldn't mind betting that NZFirst were the handbrake on any hint of such a policy that had been posited in the last three years.

    • Muttonbird 8.1

      This government will rightly get butchered in 2023 if they don't make serious progress on housing affordability and volatility.

      I hear the line 'just build more houses' a lot with no thought as to the infrastructure required to move people to and from work.

      Like it or not, developers and residents of new suburbs must pay in part for their own wider infrastructure. There seems no model for this. Bond schemes etc have been floated but nothing standard and robust has been developed.

      Get onto it, Jacinda.

      • Craig H 8.1.1

        How do you define housing affordability? I.e. which measure/indicator?

      • lprent 8.1.2

        That really is the key. However that will require that some of the fiscal handcuffs that central government maintains get removed.

        Plus speaking as a tax/rate payer who has to carry the risk associated with bonds, I'd prefer that they spent capital on older existing infrastructure increasing its capacity.

        That is way cheaper in overall cost than extending sewerage, water, data, electrical, and transport systems. It also means that land isn't being made unproductive with nothing more than a singularly unproductive macMansion dropped on it and most of the upfront costs for getting it there being charged to existing tax and rate payers.

        As far as I am concerned, if property developers want to build on new land – then they need to pay for or make strong contributions to the complete supporting infrastructure up front, so that the real cost gets added into the price. None of this nonsense about it being developed with bonds and paid for with 'future rates'. The reality is that the rates in the new areas would need to be massively higher for that to happen.

    • Draco T Bastard 8.2

      Blood-Sucking-Leaches is also a bit unfair, by definition anybody selling any needed service fits that description.

      Not really as they're not selling a service. They've been called rentiers for centuries because they're using legally prescribed restrictions that allow some people to get an income through ownership while doing nothing of value.

      Rental housing should always be by government so as to stop the bludging.

      • RedLogix 8.2.1

        Rental housing should always be by government so as to stop the bludging.

        Last time that experiment was tried.

        (Incidentally I lived in one for about 12 weeks once. Quite a few good work stories came out of that experience.)

        • Kay 8.2.1.1

          A bit over-dramatic there, RL. While the days of those types of constructions are definitely long-gone, there's nothing wrong with the idea of a state-only rental system, one that caters for renters at all levels, from those saving for their first home, to disabled, to those who will never buy for whatever reason.

          That does involve intensive housing construction, followed by a mass buy-up of rental properties that can in turn be offered as secure rental for the current tenants, or possibly the chance to own at an affordable rate. But in return, alternative forms of investment opportunities have to offered to the former property owners.

          I'm not an economist. I have no idea how the money-go-round here would work, but the long-term benefits would no doubt balance it all out.

          • RedLogix 8.2.1.1.1

            As I said below, NZ lacks a diversity of both sensible retirement investment vehicles and paths to secure home occupancy.

            In that respect I more or less do agree with you.

            Then again if everyone imagines that the very large fraction of the electorate who do own their homes will vote for a govt that promises to crash a very large fraction of their equity (which in many cases is mortgaged for other purposes, like small businesses and/or family reasons) then maybe you need a better plan.

            Because I for one don't really want another decade of NACT.

            • lprent 8.2.1.1.1.1

              It is like everything else in politics or business or science or anything else…

              Screw the revolution because it never really works. Steady progress towards objectives works.

              So in this case a steady rise in Housing NZ properties where they build new properties as well will do nothing except slow the capital gains and constrain rents amongst the desperate. Require landlords to conform to a minimum property standard – the same as we require from any other business – and that is only going to hit the landlords who shouldn't be in that business.

              If the private builders and property developers do something. Then that is fine. However waiting for them to do so isn’t something that any rational government should wait for.

            • Draco T Bastard 8.2.1.1.1.2

              NZ lacks a diversity of both sensible retirement investment vehicles

              Yeah, that was why we went all free-market. So that the investors would create their own investment vehicles.

              Seems that was just another load of bollocks of the politicians as they catered to what the bludgers wanted.

          • Draco T Bastard 8.2.1.1.2

            But in return, alternative forms of investment opportunities have to offered to the former property owners.

            In a capitalist free-market its not up to the government to ensure that people get to bludge.

            It is up to the government to ensure that people aren't living in poverty.

        • Draco T Bastard 8.2.1.2

          ZOMG, it didn't work this one time and so we really shouldn't do it again.

          .

          .

          .

          .

          Oh, and please ignore the fact that my favourite form of bludging is also not working for the majority of people.

    • Visubversa 8.3

      I had the last few years of my working life working as a Land Use Planner in the last days of the previous National Government. The houses that were being built then were not ones that most Kiwis were going to live in – they were monstrous great show off houses with 5 or 6 bedrooms and 7 bathrooms, crammed onto as much of the section as they could get away with covering. The same firms of drafties were putting out the plans, the same agents were doing the work for mostly recent arrivals, and often for people who were not even in the country. Some developers bought 3 or 4 adjacent sites so that they could "sign off" all the internal infringements and cram more onto the site. Some of the newer subdivisions seemed not to have hit the local market at all, all the developers were foreign. A bunch of the applicants that were actually in the country had addresses that were in student accommodation – overseas family $$$$ probably.

      • Pat 8.3.1

        and what will happen to the NZD when an alternative store of that foreign capital presents itself and they decide its time for a new home?…I dont envy Orr.

  9. Un-f*****g-believable.

    This is entitlement/privilege at its most vile and loathsome.

    Time to bring in a Capital Gains Tax on rental properties – and make it painful.

  10. Tricledrown 10

    Landlords saying first home buyers are forcing tenants out of houses.

    So what were 1st home buyers living in before buying .

    This organization should be censured for lying.

    This is pure propaganda .

    • tc 10.1

      Did RNZ do the usual 'here's a soapbox, off you go' or was some actual journalism applied to an industry mouthpiece ?

      • peterlepaysan 10.1.1

        RNZ does do not do anything else than provide "infotainment".. masquerading as "news". ( What is that, exactly?)

        [Removed space from user name; it seems you’re reverting to your previous user name for some reason. It would be nice if you stick to one]

  11. RedLogix 11

    Sighs.

    When someone buys their first home, they are almost invariably either leaving behind a multiple flatting situation, or from a parents home. Their old home hardly ever appears on the market for someone else to buy.

    Overall the household density goes down, which makes the overall supply situation worse.

    I'm guessing the person being attacked here didn't express this very well, but then again it's the evil landlords and that's always good for clickbait around here.

    • bwaghorn 11.1

      Well red if their was alot less mom n pop landlords their would be a fucking lot less tenants and houses would be cheaper. Go invest in something useful .

      • RedLogix 11.1.1

        Go invest in something useful

        Exactly what do you have in mind?

        • bwaghorn 11.1.1.1

          Shares ,tech company's or put ot in the bank .

          How much % wise do you actually invest any way ? Or is it just leveraging of capital gain and the tenants and the govt rental subsidies do the rest .

    • Muttonbird 11.2

      When someone buys their first home, they are almost invariably either leaving behind a multiple flatting situation, or from a parents home.

      Utter bullshit.

      • In Vino 11.2.1

        Even if RedLogix is right, his point is invalid.
        New people come in at the entry point of mixed flatting/living with parents, which is not diminished in the scheme of things, and that compensates for the new-home-buying couple buying their own house.
        The idea that 'innocent' property investors are not pushing prices up remains idiotic.

    • SPC 11.3

      Sighs with authoritative gravitas.

      • The move into a first (family) home is associated with starting a family. Extra people are being catered for.
      • A couple not intending to have a family immediately (or at all) does not move into family sized home or two bedroom unit unless they plan on having tenants/boarders to assist with paying down the mortgage.
      • Many couples and singles move from renting to owning the same sort of property they were renting do so simply because it is cheaper at the moment, and is also wealth increasing – rather tham than their landlord.
      • Owning allows someone to utilise caravan or now more easily built sleepout for extra density (many landlords do not allow this).
      • Pat 11.3.1

        "The move into a first (family) home is associated with starting a family. Extra people are being catered for"

        Not necessarily…or even predominantly

        "A couple not intending to have a family immediately (or at all) does not move into family sized home or two bedroom unit unless they plan on having tenants/boarders to assist with paying down the mortgage."

        Again an assumption that is dependent on many factors, not least of which is income and local market

        "Many couples and singles move from renting to owning the same sort of property they were renting do so simply because it is cheaper at the moment, and is also wealth increasing – rather tham than their landlord"

        Many??…some, if they have the wherewithal to do so…and their expectations/lifestyle is conducive to owning

        "Owning allows someone to utilise caravan or now more easily built sleepout for extra density (many landlords do not allow this"

        Not a driver but rather an option that may facilitate…the bank will not factor it in when deciding what to lend.

  12. aj 12

    almost invariably either leaving behind a multiple flatting situation, or from a parents home.

    Can you cite anything to endorse this? In my experience couples and young families are just as likely as either of those categories. People leaving multiple flatting situations then leave more flatting vacancies. A single person buying a home will often require to take in renters to assist with mortgage costs. In fact a number of families in high cost housing areas have to take in a boarder to help them met costs. All this helps the supply side of the market.

    • RedLogix 12.1

      There are all sorts of possible scenarios, but overall the two I mentioned are by any reasonable observation are very common.

      Overall new home owners generally decrease occupancy density … which if you think about it is the reason why they bought a new home for themselves. This is a good thing for them, but with NZ's now chronic housing crisis it doesn't help the immediate situation for everyone else.

      The underlying reasons that drive total demand have a lot of moving parts, and occupancy density is one of the more subtle ones most people overlook.

      • SPC 12.1.1

        No. People buy family sized homes to have children in them.

        The density problem is largely with those who still inhabit family sized homes after the children have left.

    • McFlock 12.2

      Exactly.

      People do often lower their dwelling density as they age, but very few go from 8 people in a home to one person with 7 spare bedrooms.

      A single person moving into a small apartment isn't a change in density. You might get some having a second bedroom as a study (or potential flattie if the mortgage math doesn't pan out), but the real density problem is the speculative property investor who finds renting more trouble than picking up capital gains.

  13. mikesh 13

    There is, or should be, a demand for rental accommodation quite apart from those who, because of a dysfunctional housing market, cannot afford to purchase. I have always wondered why there are no listed companies meeting this demand. (Even listed retirement villages actually sell their units to to their residents.) Is it that private companies are being crowded out by "mum and dad" landlords investing for their retirement, and/or by government, central and local, providing low cost housing for the needy, or is it just that commercial property investment is more profitable? Or is it that private home ownership is too entrenched in this country?

    • RedLogix 13.1

      One of the problems in NZ is that we never developed alternative housing models beyond the basic three, home ownership, renting private, or renting in the social sector.

      Overseas there are many other alternatives, such as housing associations, that provide different pathways to suit different personal circumstances.

      Or is it that private home ownership is too entrenched in this country?

      Basically yes. Successive govts going back since forever have failed to develop investment vehicles other than housing, and now as we approach peak retirement age, the consequences are becoming painful.

  14. Tiger Mountain 14

    What the Govt. needs to do Micky, is build state houses and apartments and tiny houses and emergency housing from one end of the country to the other. Maybe using a new publicly owned entity responsible for training the workers, sourcing the materials and land, and doing the prefabrication and builds. Local Govt. could get back into social housing too and genuinely not for profit trusts, and fund more Papakainga projects (housing developments on Māori owned land).

    A decade of that would incrementally help raise supply and lower prices and rents. Relocatable tiny houses for homeless, lifetime secure tenancies for some, rent to buy option, allow transferability between tenants for vacation, study or employment purposes.

    In the interim–rent control now, and crack down on landlords till they squeal. Bring in capital gains tax after 2023 Election despite Jacinda Ardern’s under duress promise. And source flatpacks from countries that have been doing it for years until local suppliers get into the spirit of things (or don’t), limit export of raw logs despite China FTA–NZ wood for NZ houses till we have no homeless.

  15. Ad 15

    Don't expect this government to confront these guys head on.

    They have already claimed the scalp of a key Minister, and will have no compunction about going for another.

    A smart government will let the Reserve Bank hit the ball up for 6 months.

    Then move.

  16. greywarshark 16

    I see stories in the news about real estate agents making good and looking so pleased with themselves, whereas they are just learning a trade and are salespeople for expensive things. Recently there was a family living off (selling) the land, so to speak, and often there will be a story about a personable young person who is a selling star. It is a very competitive job, not easy, but it sharpens up the mind on how to win, and adds nothing of value to the country. And it's not that smart to be succeeding in a market where there is a lot of demand.

    This morning on Radionz someone who is a first home buyer said that bidding on a property was proceeding along expected lines, when a phone bid came in and topped them all. Then the same property was put up for sale again in a short time for about $70,000 more. https://www.rnz.co.nz/news/business/429719/house-hunting-in-a-hot-market-just-too-hideous

    This is a run on the market which has been going on for too long; years ago I observed one in Australia on mining and oil shares. One company Poseidon went from average share price of under $5 to about $80 a share and soon after slid down to about 80 cents a share. The market was being manipulated by false geological reports. The principals of Poseidon took off for Brazil.

    Are there some all encompassing barriers to bringing in housing and financing laws that ensure that our young people can have a life in a house in which they can invest time and their money, and have security and pride and comfort from ownership?

    Housing is something tangible so the value holds well, but even so there have been scams where holiday homes have been bulk built in desert locations in the USA, and sold to the naive as an investment – that nobody else wants. But when it comes to not having a rational market of housing for those young people wanting to make a life and a home for themselves – they are being robbed. And it is being watched by a gormless government which lost its gorm in 1984 and hasn't found even a synthetic replacement.

  17. Brendan 17

    Nat voter here:

    Just build it – I don't care who, Jacinda, developers, the Salvation army. but we need houses and we need them yesterday.

    Just build it. and lots of them too.

  18. McFlock 18

    Interest rates need to be low because employers also borrow money. Which means cooling the property market can freeze an economy that's reorienting to a post-covid world.

    But with a CGT ruled out, there's tweaking to the bright line. Maybe an FTT.

    • greywarshark 18.1

      FTT meaning Failure to thrive! How appropriate for NZ's situation.

      But FTT is also Financial Transaction Tax – which would help NZ overcome the other FTT.! https://en.wikipedia.org/wiki/Financial_transaction_tax

      A financial transaction tax is a levy on a specific type of financial transaction for a particular purpose. The concept has been most commonly associated with the financial sector; it is not usually considered to include consumption taxes paid by consumers.

      A transaction tax is not a levy on financial institutions per se; rather, it is charged only on the specific transactions that are designated as taxable. So if an institution never carries out the taxable transaction, then it will never be subject to the transaction tax. Furthermore, if an institution carries out only one such transaction, then it will only be taxed for that one transaction. As such, this tax is neither a financial activities tax (FAT), nor a Financial stability contribution (FSC), or "bank tax", for example. This clarification is important in discussions about using a financial transaction tax as a tool to selectively discourage excessive speculation without discouraging any other activity (as John Maynard Keynes originally envisioned it in 1936)

      This also from The Tax Working Group we have in NZ.
      https://taxworkinggroup.govt.nz/sites/default/files/2018-09/twg-bg-3959227-financial-transaction-taxes.pdf

    • Foreign waka 18.2

      Actually, right now, if interest rates would go up and housing prices would stabilize NZ would at least have some time to recover. Businesses work with cash flow and low interest rates wont help if people cannot afford to buy anything. If you finance with borrowed money the payroll you are already insolvent. I wonder how many would be in that category already. So to combat that deficit, businesses will increase prices as the argument is that, since only people who have money will buy, they will have to pay more. This wont achieve growth and it also will reduce the tax take, the downward spiral is then in full swing. It is the wage earner who pays most of the tax take that the government gets. Is is via PAYE, GST, W/tax, you name it. Rich people park their money where they don't pay any tax or very very little.

      • McFlock 18.2.1

        Sure, financing payroll isn't the role of credit.

        But if your business is stagnating or has had a sudden drop in customers, that makes the new direction you were mulling over look more attractive. Maybe that will require a new machine, rather than contracting out.

        It's not about keeping the patient on life support in the hope that they magically get better. It's more about new growth using the company infrastructure and experience that already exists, rather than rebuilding everything from scratch

        • Foreign waka 18.2.1.1

          Well, if so many companies need to be bankrolled by the government during lock down and beyond it would stand to reason that they are now wanting negative interest rates to support their cash supply. Problem is that most have benefited from not investing before and now need to show some return to not have shareholders taking their money elsewhere. If no new revenue stream can be found, many will go to the wall and with them the investors. To make things worse, negative interest rates will fuel inflation and the already depleted consumer, mam dads, ordinary folks you know, will default on rates, power bills etc. many will be in line to the food banks. Its the 20s all over. No consumer, no business unless you are Mr Google.

          • greywarshark 18.2.1.1.1

            If we started pumping some money into the economy, just a little to increase spending, and kept the interest rate at the same rate as inflation, which would shift up a band by a few points, it could get things going without the house of cards falling down?

            • Foreign waka 18.2.1.1.1.1

              Yep but careful how much money you put into the economic machine and more so to whom. UI maybe would be a solution as it would be a policy of ":no one left behind". But vested interests won't have a bar of it. Lets not forget, those billionaires and wealthy have no bond or allegiance to any country. They are transient and hence really truly don't care. So if Kiwis don't take their faith in their hands no one will.

          • McFlock 18.2.1.1.2

            positive and negative are just states of mind.

            Inflation is well with (largely arbitrarily dictated) specifications. Wouldn't hurt to step on the gas a little bit.

            As for shareholders, again I'm not suggesting keeping businesses artificially alive in the long term. The wage subsidy did that in the short term, but if business models aren't suitable for the new normal, they need to change or fold. Cheaper access to capital will help them to change, and keep shareholders happy. But that's not my motivation for suggesting it. NZ was always going to be nutted by a collapse in global immigration and its effects on trade. Limiting that damage is all about the percentages – what percent of business can be supplemented by a more artful pivot into the new reality. What percent of business can take a hit and hunker down until trade/immigration opens up again in a year or two, maybe with more or different controls. What percent of property inflation is caused by a given percent of access to business capital. What percent of property market impacts can be averted by the govt borrowing at reduced interest and funding projects directly.

            Lots of different gauges to watch, for sure. But that's the role of government, even if they abrogated much of it to the reserve bank.

            • Foreign waka 18.2.1.1.2.1

              McFlock, please no more of that now very well revealed repulsive taking of billions and registering mega profits whilst sacking people in huge amounts. Please, for the sake of the country, no more lies.

      • Pat 18.2.2

        take that wealth effect out and you will reduce velocity in the economy and accentuate unemployment….personally i would have taken the hit some time ago but my expectations are not typical…its a difficult problem that wont be solved gradually, it is going to be a sharp correction one way or another, the only question is when.

        • Foreign waka 18.2.2.1

          Pat, we will still end up in the same alley just billions poorer. The money has been pocketed my large corps who are laughing all the way…

          So disgusting I could vomit.

  19. Ffloyd 19

    Time for Capital Gains Tax. …..

    • Adrian 19.1

      No need, but a Empty House Tax would go a long way to solving the problem. I read somewhere that north of 40,000 houses in Auckland sit empty for various reasons but mainly as somewhere to park money without hassle. Make it cost and that little ( or large ) rort goes away. Last weekend in Nelson a friend pointed out the number of houses in his hillside suburb which never had any lights on in the evening, all owned by absentee owners.

      P.s, at 40,000 houses in Auckland, even if a quarter of them came back on the market the problem would be solved.

      • Pat 19.1.1

        empty houses are indeed a problem…..but is the solution to tax them?…i would but there are consequences

      • SPC 19.1.2

        Homes owned by foreigners (maybe once for students to use) or offshore Kiwis – some travelling. Otherwise held for the CG, maybe occasionally let out for Air B N B.

        Those (maybe half) not occupied for over a year should be rented out and maintained by Kainga Ora. We cannot have any squatting can we.

        Unless of course the prospect of that led to them bringing in their own property rental managers.

        • Pat 19.1.2.1

          Not all empty houses are owned offshore and there is difficulty in determining why the houses are empty….having said that there could be a regime to discourage the practice but as said it comes with risk….are we prepared to accept the potential consequences?….it appears that the Gov is not (unless there is something in the pipeline I know nothing about)

  20. Scud 20

    The main reason why there is a housing shortage in NZ atm, can be traced back to the stupidity of the No Mates Party and their Industry mates. When they trashed the what the rest of the world envy NZ’s training of Trade Apprenticeship, Farm/ Horticulture, Forestry Fisheries Cadetship Training and the various Training Industry Broads which my Father was two them and a observer the Coal Miners Training the early to mid 90’s.

    Reading Dad’s notes and his submission to the select committee, some yrs back when I looking for something else. That the Government and their pals didn’t want to fund training anymore because they said it was to expensive and Industry knows best et etc the usual Free Market NeoCon Lib BS.

    As making it user pays would be cheaper etc, but Dad said this will make Housing, Infrastructure both Private & Government more expensive in 20-30yrs when there is a short fall of qualified Tradies & Plant Operators because who is going work with a student debt hanging over them with piss poor& conditions, while at the same time trying to live while the cost of living is like to go up? These reforms are also going to cause problems when a natural disaster hits NZ as these reforms doesn’t have any redundancy and NZ would have rely on overseas workers which will drive down pay & conditions, Trade qualifications which will effect repairs and construction in the likely rebuild.

    I got a mention in the Farm/ Horticulture, Forestry & Fisheries Cadetship, as I was into my final yr before I had to drop on cost as my final yr was under the new system which left me with about 40-50k debt in an industry that always had low pay, but it also led to getting a foot in the door to buy your run holding/ farm, orchard etc in future which was my plan or to have own, watch keeping tickets or your own boat or Forestry gang etc

    I’m 47, it takes about 3-4 yrs of training weather it’s Trade Apprenticeship or a Cadetship about 5 or so yrs later I should’ve been help train the next lot of Kiwi’s up. But I’m not because had to leave an Industry I love and enjoy doing. I could also being do my other love which was Soldiering in the TF or later transferring over the RNZAF FP’s while have you own bit paradise running my https://en.m.wikipedia.org/wiki/Dorper or Persian/ Middle East Sheep bred and growing barley, wheats & Oat’s or Hops etc.

    I pity this Government of trying to build a enough Housing and other Government infrastructure because of the lack Tradies, Plant Op’s as previous Governments chose a ignore NZ’s training deficit in the Trades, Cadetships & Plant Operators that Dad when he was a Trade Union Organiser in the NZ Engineers Union in CHCH had predicted would happen in 20-30yrs time. I have no sympathy for any industry that had a hand in destroying which at the time was the world best training system and the envy of the world which was also backed up with world best Tertiary education and research/ design facilities.

    • Chris T 20.1

      Shame Labour couldn't fix it in their 9 years of govt.

      • mac1 20.1.1

        Google Housing 1999-2008 and you find information like this.

        "Housing policy changed direction after the election of a Labour government in November 1999. The new government reintroduced social (income-related) rents, developed a new allocation system for state housing tenants, placed a moratorium on sales to tenants, and increased the state housing stock."

      • Tricledrown 20.1.2

        Chris T also record numbers of houses were built between 2000 till 2008 with unemployment at around 3%.

        National don't want to solve the housing crisis as the big 4 banks gouge during the housing crises.

        Nikki Kaye said in the recent election it was a mistake to sell off the 7,000 state houses,Judith Collins was housing minister for a while and made more promises than Labour ie Hobsonville subdivision was supposed to have 250 affordable homes that ended with only 14 affordable homes being built on former govt land.

        So National speak with forked tongue on housing.National is the home of property investors and big bankers so National will make promises to improve affordability but National will not follow through as their funding will dry up.

  21. Foreign waka 21

    The only way to combat this is to build flats of 60 – 120 m2 (2-3 bedrooms), several storey's high, close to transport, supermarkets. Suitable for young families and older folks who want to down size. To make it really sustainable, you don't need a car to go and get some groceries. This ought to be done by the government, like they did after the war and major recession only with a better utilization of land and resources. To recoup, these flats should have the option to rent to buy. It will also insure that they are looked after.

    Why is it that large stores are situated on land closest to the town centre or supermarkets? Do they think I get some pliers with a loaf of bread? Why are those large shed buildings not but onto cheaper sites with shared waste water, sewage etc. The planners here are either full of themselves, not very experienced or just not up with the game. I won't even mention construction firms that bleed the small operator and hold the market at ransom.

    Look at other countries where that concept of housing works very well and cars are not needed on such large scale. Imagine cyclists don't have to compete with cars on the motorway (god lord what stupidity that is).

  22. KSaysHi 22

    All this time I thought property investors were forcing people out of increasingly overpriced rentals.

  23. SPC 23

    We need more property investors to buy new builds, rather than existing property.

    Renters buying is not the problem

    We need more older people to downsize.

    If someone develops a vacated 1/4 section and puts in 4 newbuilds this is good – even better if the house is moved to another location.

    KiwiBuild could have done this, and then had 5 houses to sell.

    But someone decided to restrict sales of KiwiBuild to first home buyers — when the obvious buyers were downsizers (and those couples who first owned flats/apartments as stepping stones to a starter family home with small land area).

    We know the problem, and moving on Twyford is not fixing the policy mistake – one left unresolved.

    So if the government is not providing a KiwiBuild solution it needs to incentivise private investors making all the profit from it instead. Which is very much second best but better than doing nothing – their current policy.

    • Pat 23.1

      We havnt correctly identified the problem….there is no shortage of housing in NZ…we have approaching 2 million residences for a population of 5 million, or a density of 2.5 per dwelling, hardly overcrowded…we have however a dearth of affordable /available property and that dosnt necessarily require more or different construction to solve.

      • SPC 23.1.1

        There is no way to force people to take in boarders if they have unused space.

        Nor to stop people having a property set aside for Air N B, or leaving their bach empty.

  24. SPC 24

    Our problem is RB policy.

    RB policy is built around inflation

    Cheap money during a pandemic is designed to prevent deflation. Yet it causes land value rise, not covered in the inflation statistics. Which means those stats are useless.

    RB policy is otherwise built around banking system stability.

    The RB and banks do not care whether their policy causes inequity in the society. So long as banking system is fine and banks make profits. Which is why we have our housing crisis.

    • greywarshark 24.1

      You can say that again SPC. BS stability! And inflation ignores the real effect of housing price. So it is just a theatre curtain drawn across the stage where the real hoist to the economy is going on. Selling blood will be the next money raiser for the poor. They do it in the USA so it must be a smart idea. Especially if you are a Covid-19 survivor.

      https://www.theguardian.com/commentisfree/2020/oct/21/if-the-poorest-americans-are-selling-their-blood-the-us-is-in-serious-trouble

      • In Vino 24.1.1

        We are experiencing the early effects of Quantitative Easing, but only in one area. House prices are racing upwards, but nothing else is, so we do not yet have a diminished value of currency. (Inflation.)
        That is because of our stupidly distorted system that favours investment in property, and our governments being scared of upsetting vested interests profiting from that distortion.

        Property investment must be made less excessively profitable.

  25. SPC 25

    Some governments use the tax system to assist

    Such as when we had mortgage rebates to assist with home ownership. Other nations used revenue from CGT and either wealth or estate taxes to raise money for government to provide affordable housing.

    We currently do a notch above nothing, apart from using GST money to afford state housing at income related rents and the accommodation supplements – which is placing tenants under stress atm because the support is not keeping pace with rent cost rise (why we need to increase incomes just to prevent child poverty getting worse)

    • Foreign waka 25.1

      You will notice that every time the government decides that rental assistance will be increased so will rent itself. Coincidence? I think not.

      We also need to understand that many of NZ parliamentarians are owners of more than 2 properties. Why would housing be a problem to them, right?
      People should be able to owe property but some leavers need to be in place to have the interest of the county and its social peace at the core of policy.

      https://www.newshub.co.nz/home/politics/2020/08/the-number-of-properties-owned-by-new-zealand-mps-revealed.html

      • SPC 25.1.1

        Where there is market supply shortage, landlords will increase rents (the constraint is either relative desirability of the property, its location and wage income amongst those unable to own or a rent freeze).

        And then those unable to pay the new higher market level will be forced out.

        As to whether a MW increase, or AS increase, causes rent to go up is another matter. It's common (they'll know from proof of income evidence provided if MW increases apply). They know tenants would hand over some of the increase rather than look for a new rental, even if there were alternatives. So sure they could extract even more if there was no where else to go.

        Government restricting landlords to one rent increase per year should help a little.

        • Foreign waka 25.1.1.1

          Sorry, but I don't think so as there is a synergy that no one talks about : property value (land) increase and rates. So the local body is more than keen to have values increasing. To avoid that you would have to rethink local council structure, their brief, the asset base, the infrastructure including its maintenance (water/waste/transport etc), civic and emergency issues, culture and recreation. How many people need to maintain this value and how fair does this bode across the country. I live in an area with houses build in the 50's and the rates are one of the highest in the country. The people living there are mostly low income. You see what I am saying? Very complex but surely with all these highly paid experts that those on very low income running 3 jobs support should be able to find a solution that can be formulated and all the "chunk" of extras and self appreciation projects thrown out. This will, for a starter change the landscape of investing.
          Just wait until all the old folks are added to the lines of homeless as they cannot longer afford to have a roof over their head.

          • Sacha 25.1.1.1.1

            Central government needs to allow local government to use funding sources beyond rates.

            • Foreign waka 25.1.1.1.1.1

              If they stop using the money for pet projects and stick to the mandate it would go a long way.

          • SPC 25.1.1.1.2

            Rising property values do not increase the amount of rates charged by councils on the property owner.

            The government provides a rates rebate to those on low incomes and most councils also allow those retired to defer unpaid rates – this is a charge against the property when it is sold.

            • Foreign waka 25.1.1.1.2.1

              Are you joking? Of cause increased values impact rates as the amount is measured on "perceived value". So if a house in your neighbourhood sells for the 4th time in as many years and every time at a higher price all properties around will be pegged on that. I live in a house that has not changed its footprint and the section has not "grown" but the rates have increased in total by 41% over 13 years. The reason is the increase in value of land and the reflected property values in the area.

              I have talked about this with QV and also with other people in the market. Believe you me, the council wants their share of that bonanza.
              So instead of having a sustainable home (!) – not investment – we are now forced to get reversed mortgages in old age and beg for rebates or defer these to what end? How dignified! Maybe we can throw some cooking, cleaning in for the master.

              • SPC

                No. The rise in rate charges has nothing to do with rising property market values.

                • Foreign waka

                  A rating valuation is based on the market value of a property at a particular point in time. The last citywide revaluation took place on 1 July 2018 and was based on the property sales market at the time.

                  A property value is made up of three components:

                  Capital value (CV) – this is what your property might have sold for at the date of valuation, excluding chattels. The CV is also known as Government Valuation (GV) or Rateable Value (RV).

                  Land value (LV) – the most likely selling price of the bare land at the date of valuation.

                  Improvement value (IV) – this is the difference between the land value and the capital value.

                  https://www.tauranga.govt.nz/living/property-and-rates/property-valuations/how-is-rating-valuation-calculated

                  I just rest my case.

                  • SPC

                    Just go and ask the Taxpayer Union about council rate increases. The increases in rates set are based on their budget plans, and have nothing to do with any rise in property value. Property values could go down and the amount you paid in rates, will still go up year by year.

                  • Herodotus.

                    You are misguided in your idea as to how rates are calculated.

                    In simple terms. The council looks at what income it is to derived from rates and divides that by the "Total Capital Value " of the city. If CV increased by 10% over the entire city your variable rate would decrease accordingly. The council does not magically increase its revenue by 10%. + any increase that it votes on e.g. a 3% rates increase. Rates do not then go up by 13% "An adjustment in a property's capital value does not mean that property rates will automatically change." refer link below

                    https://www.aucklandcouncil.govt.nz/property-rates-valuations/our-valuation-of-your-property/Pages/l-property-rev.aspx

                    https://www.aucklandcouncil.govt.nz/property-rates-valuations/your-rates-bill/Pages/how-rates-bill-made-up.aspx
                    Saying that, The spokes person from the property council re Suzie Fergusson interview was very evasive and doing her best to change the angle of the discussion. All media need to approach her for any comments on property – So as all can see the feeble arguments being used to protect those multi tenants and ask why the govt spends so much protecting their interests

  26. Sacha 26

    RNZ's inevitable follow-up story: https://www.rnz.co.nz/news/national/429794/property-investors-federation-slammed-for-housing-crisis-claims

    The Federation's comments to RNZ prompted a huge backlash and it has been excoriated online.

    Wellington first home buyer Mia Grant took a dim view.

  27. Cricklewood 27

    Surely the problem is there just ain't enough availble houses, demand exceeds supply, meets cheap credit and bingo housing crisis. Mortgages are now so large I cant see how interest rates can rise without crippling the economy.

    We need a massive govt lead build to fix this.

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