Rob Salmond at Polity has explained the process and the science behind yesterday’s revelation that massive numbers of Auckland houses are being sold to overseas speculators. Both blog posts are worth reading as they explain in detail how the conclusion that speculatory money from China is distorting our domestic housing market is entirely reasonable. The polity posts are covered in more detail on this TS post.
It’s not racism to point out a demonstrable fact. Conflating China with Chinese might be though. One’s a country with a new bourgeoisie who have money to burn, the other’s an ethnicity.
It doesn’t really matter where the housing parasites come from. It’s against our interests whether it’s Asia, Europe or America. We shouldn’t be a country that can be gleefully looted from a distance. We shouldn’t have adverts about us proclaiming that property investors can get New Zealanders to “go to work for you and give you hundreds of dollars a week” in rent.
The advert, played on Singaporean radio station 90.5 Gold, claims Auckland is “an investors’ dream” with no land tax, stamp duty or capital gains tax. And with the clincher that Kiwis will be paying half their week’s wages into an investor’s pocket.
Telling a foreign market that Kiwis are stupid? Maybe that’s racist, ae?
I thought it might be worth having a look at the opposition party’s positions on overseas ownership. Most of the info comes from last year’s election material and as far as I know these policies are still in place.
Labour wants to restrict foreign ownership. They say:
New Zealanders have a natural desire to control our own country for the benefit of New Zealanders.
It is the right of New Zealand citizens and permanent residents to purchase and own New Zealand land and assets. Reserving significant New Zealand land and assets for New Zealanders is in the interests of us all.
A major part of our current account deficit is already comprised of interest and dividends paid to overseas investors. New Zealand’s poor savings record means we are reliant on imported capital to fund our current account deficit. Most of this comes via increased lending to home owners, but our deficit is used by some as a misplaced justification for the sale of
our productive assets to overseas buyers.
- clamp down on the sale of rural land to foreign buyers by limiting the discretion of the Minister to approve sales,
- restrict the purchase of residential property by non-residents, so that they will only be granted permission to purchase a residential property if they intend to live here permanently or that purchase adds to our existing housing stock, e.g. building a new house,
- not allow infrastructure with monopoly characteristics to be sold to overseas interest.
The full policy is here.
The Greens say nothing on overseas speculation, but tackle the issue from a different angle:
- Reduce speculative investment in the housing market by tightening the rules around loss attributing qualifying companies and introducing a capital gains tax on all but the family home.
- Increase peoples ability to save for a deposit and service a mortgage by increasing the minimum wage to no less than 66% of the average wage.
- Introduce a Universal Child Benefit that can be capitalised towards the child’s first home.
- Increase provision of low interest financing for low-income households seeking home ownership
- Shift the standard tenancy conditions towards more secure and predictable tenure arrangements.
NZ First’s speculation policy is similar to Labour’s:
- Ensure that New Zealand’s housing stock is restricted to New Zealanders.
- Non-residents who are not New Zealand citizens would be ineligible for home ownership except if a genuine need to do so can be demonstrated.
- The terms and conditions upon which existing approvals by the Overseas Investment Commission for the ownership of land by non-residents would be fully monitored and enforced.
Full NZF housing policy here.
All three parties recognise that there is a significant problem. Most New Zealand residents cannot afford to buy homes. Increasingly, we are becoming tenants in our own land. Now that’s not an issue in Europe, where tenancy is normal in countries similar to our own. However, in, for example, the Netherlands, social housing is cheap, well maintained and close to public transport. Tenancies are long term and tenants have well defined rights.
That’s not the situation in NZ. Tenants have no certainty, our housing stock is run down, our landlords are mostly speculators, whether domestically or overseas based, and the next generation of urban New Zealanders will have no control over their futures. They will not have access to the many benefits of home ownership.
Something has to change.
Good on NZ Labour for pointing out the bleeding obvious. Good on them for being willing to challenge the neo-lib orthodoxy. The invisible hand of the market won’t sort this out, but the next Government just might.
Anyhoo, on a lighter note, the debate about surnames reminded me of an episode of Seinfeld. George Costanza’s mother is contemplating divorce and takes some advice over the phone from one of Jerry’s girlfriends. Mrs Costanza is convinced the advice is Confucian wisdom and decides against the divorce. Until ….