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Daily review 29/03/2021

Written By: - Date published: 5:30 pm, March 29th, 2021 - 46 comments
Categories: Daily review - Tags:

Daily review is also your post.

This provides Standardistas the opportunity to review events of the day.

The usual rules of good behaviour apply (see the Policy).

Don’t forget to be kind to each other …

46 comments on “Daily review 29/03/2021 ”

  1. Ad 1

    With the Prime Minister today ruling out any intervention to regulate house rents, one might immediately think there is the opportunity for the Commerce Commission to form an inquiry.

    Except …

    • It's not a price regulated activity such as airport landing charges
    • There's no obvious cartel behaviour
    • The state is still a dominant provider
    • It's not a regulated industry like dairy industry or telecommunications
    • Unlike petrol or supermarkets there's no oligopoly or anything near it

    However last time I bought a flat, the bank was able to show me on a rate card exactly what I should charge.

    Also it will take a while before we can see the cumulative effect of the changes both to minimum standards and to landlord financing to see any synchronous price movement.

    It was good that the PM and Minister finally reacted against speculative investors. But I would still want the Commerce Commission to invite closed-door briefings from Harcourts, Barfoots, the five main banks, and some of the main landlords including Kainga Ora to get people talking about robust pricing elements.

    • Foreign waka 1.1

      It would be convincing if rent subsidies would have a cap. This would very soon show how bad the situation really is. If even more of our taxpayer money is being handed over to landlords I will definitely vote for Act. Labor is just throwing money around without flinching that future generations have to pay back, National is on the opportunistic tide- no alternatives there, the Greens are nowhere to be seen. That leaves Act as the only party that has so far at least offered ideas.

      • Ad 1.1.1

        Do you really as you say want renters to be far more exposed to these market conditions, in order that the government can show the amount of subsidy?

        • Foreign Waka 1.1.1.1

          So far, every time the sub was increased so where the rents. If these are only allowed to adjust once per year it will be an astronomical amount. Funny that, it will – coincidental of cause – be taking all the sub. Why not have the snout in the trough right from he start and do away with bureaucracy in between?

          The market works both ways. Instead of giving the landlord the money, increase benefits. It also shows that obviously incomes are far too low and it maybe needed to reduce taxes for income earners up to 50K. It would than be for landlords to compete with renters not just automatically increase rents because the government is re-indexing the rental subsidy. It would be by far a better solution.

    • David 1.2

      With the Prime Minister ruling out any intervention to regulate house rents

      I wouldn’t worry too much. Jacinda and Robbers have a history of saying one thing today and doing the complete opposite tomorrow. We can take what they say today with a grain of salt.

      • mac1 1.2.1

        I like history, especially annotated and well-documented history, with reputable references. Got any of that? 'Having a history' implies a series of events, not one, now. So, put them on the table or I'll have to find my salt shaker…………

    • KSaysHi 1.3

      When you say robust pricing elements, do you mean things like social harm, affordability…that kind of thing, hence Kianga Ora's inclusion. It's not like they set rents they just pay subsidies based on the assumptive market rent which imho has always been out of whack because it assumes that despite shitty antisocial neighbours who will never leave or be kicked out + bad maintanence people will pay the same as other places nearby without those issues.

      The way rentals are subsidised is a huge freaking State problem.

      If the govt did limit market rents then landlords leasing to Kianga Ora might have a legal point to argue. Their contracts stipulate they will be paid market rent, and from memory it is assessed every year.

    • Jenny how to get there 1.4

      Ad

      29 March 2021 at 5:50 pm

      With the Prime Minister today ruling out any intervention to regulate house rents….

      Hi Ad,

      I'm sorry I missed this statement from the PM can you provide a link?

      If PM has made this statement, it makes me wonder, who is setting the country's housing policy?

      The government, or the Nact opposition?

      Robertson Must Rule Out Rent Control

      Saturday, 27 March 2021, 2:05 pm
      Press Release: ACT New Zealand

      https://www.scoop.co.nz/stories/PO2103/S00212/robertson-must-rule-out-rent-control.htm

      Government must rule out rent caps – National

      4:58 pm today

      Jane Patterson, Political Editor

      https://www.rnz.co.nz/news/political/439403/government-must-rule-out-rent-caps-national

      If PM has made this statement, and if the situation for first home buyers and renters worsens, I just hope the PM can feel free to break this promise to the rentier class and their political water carriers.

      • Ad 1.4.1

        As per the link I gave below:

        https://www.theguardian.com/world/2021/mar/29/new-zealand-housing-crisis-jacinda-ardern-says-rent-increase-warnings-are-speculative

        The government will just wait and see what effect the interventions they've just made will have.

        I see rent levels as a third term issue now. And even then, they've shown they will subsidise housing, hotels, rents, and accommodation generally about as fast as they can print money.

        • Foreign Waka 1.4.1.1

          Good one, meanwhile in on of the poorest areas in any city in NZ:

          Rent in Porirua, Waitangirua: lower end: $ 499, upper $ 588.

          This is a absolute rort from the landlords. Many renters are on a benefit and the only way to pay for that is when a house is over crowded. And here are the health issues that affects a system that is completely overloaded and people are actually dying waiting for surgery.

          Oh bless your cotton socks.

    • Incognito 1.5

      Market rent

      Find out what the weekly rent is for properties in your area.

      https://www.tenancy.govt.nz/rent-bond-and-bills/market-rent/

  2. Pat 2

    "But nobody can really tell at this stage by how much rents could go up and how widespread this might be.

    The fact is the days of 'cost plus' being a viable pricing mechanism are long gone in New Zealand, as they are in the rest of the world.

    Rents will only go up substantially if 'the market' can take it.

    Most renters would probably feel that accommodation in this country is already pretty 'fully priced'. So, the question is what 'market' resistance would landlords face from widespread rent hikes?

    I suppose the big question there would be the ability of peeved renters finding alternative living arrangements. But you can't get blood out of a stone. And to mix up my metaphors, landlords would risk killing the golden goose if they squeezed too hard.

    So, okay, that's one aspect.

    The other significant aspect is the prospect (very real I might have thought) that at least some landlords might see this as all too much bother and look to cut and run – IE sell their property or properties."

    https://www.interest.co.nz/opinion/109735/david-hargreaves-assesses-some-more-intemperate-suggestions-being-made-about-what

    All without the mention of AirBnB or vacant properties.

    • Ad 2.1

      Both through Statistics NZ and through the Tenancy service, the state gives a pretty good idea about what each place is worth to rent.

      https://www.tenancy.govt.nz/rent-bond-and-bills/market-rent/

      It's also not hard to find the vacancy rate in each city. It's pretty tight in Auckland.

      And of course not hard to find out the price the state is paying to keep most people in motels and off the streets. It's a fair bit, as you'll see in the upcoming budget.

      That is to say, we already have market failure and it's likely to get much worse.

      • Pat 2.1.1

        When you say 'the vacancy rate' I assume you mean the rate of untenanted properties available to rent…..that is very different to the rate of untenanted properties that COULD be available to rent but are not.

        • Ad 2.1.1.1

          Since the Prime Minister has ruled out intervening in the price of available renting properties, you can take it as a given that she is ruling out intervening in the price of hypothetical ones as well.

          It would also be an impressively flexible Commerce Commission that tried to run that kind of hypothetical as a baseline for an investigation.

    • Jenny how to get there 2.2

      Hi Pat

      From the link you supplied;

      The shrinking rental market myth

      A common thread I've seen in comments since the Government's announcement is that if landlords have to sell, this will itself force rentals up in price because there will be fewer of them and, well, supply and demand and all that.

      Actually, as a piece of logic that doesn't work out….

      If it's bought by an investor then the investor will continue to rent the property out – so, there will be NO change to the rental market. Okay the investor might try to hike the rental but I divert you back to the earlier comments in this article about the market and resistance etc……

      David Hargreaves

      Except if the investor finds the aformentioned market resistance doesn't allow him to get the rent he wants, he might just decide to park up the house, and get what he can from the capital gains.

      The thinking behind this, goes 'If I, or other investors drop the rental to what we think tenants can reasonably afford, this will cause a drop in rentals being demanded everywhere. Better to try to artificially limit the supply to keep rentals up.

      • Pat 2.2.1

        Lol…going mad…this is daily review.

        Yes flooding the market is a big no no in real estate but sometimes you cant control it…we have around 150,000 investors all with peculiar positions that will make their own decisions….good luck herding that many cats….especially if the market starts to fall.

  3. millsy 3

    Does anyone know if we had rent control in NZ before?

  4. Muttonbird 4

    Looks like the National caucus is about to make a more on Collins. They voted down an indecisive Collins and her hand picked doctor deputy over mandatory fluoridation.

    It doesn't bode well for Collins. It's not a good day in the leadership office when your MPs override your decision on an important public health issue.

    National MPs have told Newshub this is incredibly rare and almost unheard of.

    One National MP said it's even rare to have these votes in caucus, and that it shows indecisiveness and lack of belief from Collins.

    https://www.newshub.co.nz/home/politics/2021/03/national-mps-vote-against-judith-collins-shane-reti-on-fluoride-policy-in-rare-move-for-caucus.html

    In 2018 Simon Bridges won a leadership battle after Bingles' retirement. Following that I had hoped to see four National leaders in a year. It didn't happen then but it might happen this year.

    Todd Muller rolled Simon Bridges on 22 May 2020 so for there to be four National leaders in a year Collins will have to last until 22 May 2021…

    …not looking good at the moment.

    • Ad 4.1

      Let's check in on them again in 2026.

    • Jenny how to get there 4.2

      Muttonbird

      29 March 2021 at 8:15 pm

      …. They voted down an indecisive Collins and her hand picked doctor deputy over mandatory fluoridation.

      That's nothing.

      Around the globe conservative parties are not noted for heeding sound evidential science based advice.

      Collins thinks she has a problem getting her party to accept the science behind flouridation. It could be worse. Collins is lucky she didn't ask her MPs to vote that climate change is real, as Erin O'Toole the leader of the Candadian Conservative Party made the mistake of doing.

      'Canadian Conservative party votes not to recognize climate crisis as real'

      https://www.theguardian.com/world/2021/mar/20/canada-conservative-party-climate-change-real

    • Muttonbird 4.3

      Blimey, get the popcorn out. Farrar has made a special post trying to run interference after having spoken directly to Collins.

      They are doing damage control because the incident suggests Colins and Reti are anti-fluoride. Even Hooton has been trundled out to steady the sinking ship.

      Thing is, these two clowns, Farrar and Hooton will know exactly who the anti-Collins faction is but they can't do a thing about it in case they prevail over Collins and then shut Farrar out.

      Alo can't belevive Collins is still using Farrar for information distribution. This is the guy whose blog had to be moderated post Christchurch because of Islamophobic hate speech.

      Meanwhile, Chris Bishop seems to think himself eminent PM material…but can'r even win his own seat.

      • gsays 4.3.1

        For me, the schadenfreude peaked with the last sentence in yr link:

        "Remember, National's caucus meetings are supposed to be top secret and impenetrable, but once against the caucus is leaking like a sieve. "

    • UncookedSelachimorpha 4.4

      I'm astonished that Shane Reti – a family doctor – is not supporting an obvious move to make fluoridation available to more of NZ. It is a very safe and proven way to improve dental health, especially for children. The current local body approach allows vocal opponents with lots of energy to dominate what should simply be a public health matter – the result being more kids with rotten teeth than necessary and much of NZ without fluoridation.

  5. Muttonbird 5

    Hard to believe New Zealand has a timber supply problem. We are basically a forest with some shitty towns tacked on.

    • Jenny how to get there 5.1

      The invisible hand strikes again.

      The forestry bosses worked out they could make bigger profits exporting whole logs than finished timber, so closed down all the timber mills.

      Now we find we can't get timber to build houses in a housing crisis.

      • Jenny how to get there 5.1.1

        So it looks like we won't be able to build our way out of the housing crisis afterall.

        Concern grows over impact of timber shortage on New Zealand's house building industry

        March 27, 1 NEWS

        https://www.tvnz.co.nz/one-news/new-zealand/concern-grows-over-impact-timber-shortage-new-zealands-house-building-industry

        With over 40,000 empty houses just in Auckland alone…

        Is it time yet to start using our existing supply of houses more rationally?

        Howsabout an empty homes tax, like they have in Vancouver?

        Any takers, or is this just a step too far?

        Bugger the homeless, would instantly increasing the availability of rentals and houses for sale cool the market to quickly and be too much of a shock for those middle class Moms and Pops who invested in property, to bear?

    • Pat 5.2

      "Marty Verry, CEO of Red Stag group talks to Jesse about the current shortage of construction timber for building homes and how long he expects that to last.

      Red Stag is a privately owned, independent timber company based in Rotorua.'

      https://www.rnz.co.nz/national/programmes/afternoons/audio/2018789495/framing-timber-shortage-in-nz

  6. McFlock 6

    heh

    If those people trying to get the Ever Given out of the Suez Canal want to know what real hard work is, they should try being a landlord in New Zealand

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    Today’s official launch of the Pacific Languages Unit is a milestone for our Pacific communities, the Minister for Pacific Peoples, Aupito William Sio said. The Pacific Languages Unit brings together a new set of language supports within the Ministry for Pacific Peoples to provide advice, commission research, maintain standards, promote ...
    BeehiveBy beehive.govt.nz
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