If you need a good laugh this morning

71 comments on “If you need a good laugh this morning ”

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1. save NZ 1

   29 April 2016 at 10:33 am

   Hilarious, I guess if you are flogging them off to 10million investor category investors and money launderers, cheap at 1/2 the price!

   Go Nats!
2. mary_a 2

   29 April 2016 at 11:00 am

   Oh dear, oh dear. Nothing like a great bit of humour on a Friday morning 🙂

   Talk about the utterances of fools in desperation. Keep it up Nick and you will make yourself look even more stupid than ever!
3. alwyn 3

   29 April 2016 at 11:28 am

   He is actually correct with his claim.

   The Massey study he was quoting, and it is the only real study done on this subject in New Zealand, supports what he is saying.
   The latest one is here.
   http://www.massey.ac.nz/massey/fms/Colleges/College%20of%20Business/School%20of%20Economics%20&%20Finance/research-outputs/mureau/home-affordability/HomeAffordabilityReportMarch2016.pdf?0B8DCEE91247C25DB298E1AD2E9A0A19
   The value of the index for Auckland in Feb 2016 was 33.8.
   In November 2008 the value of the index was 38.44
   Here are the numbers at that time.
   http://econfin.massey.ac.nz/school/publications/property/Hme_Afrdblty_Report_Dec08.pdf

   Sorry mary_a but it isn’t Nick who is making himself look stupid. It is the people who rubbish his comments without looking at the evidence.

   I admit that I am surprised but the research backs him up. Housing really is more affordable in Auckland than it was when National came into office.
   • weka 3.1

     29 April 2016 at 11:37 am

     How do they define affordability?

     Then there is this from the first link,

     Despite minimal improvements in affordability in Auckland, the margin by which it exceeds the national figure remains at a record high of 59% less affordable than the rest of NZ. All other regions with the exception of Central Otago Lakes (48% less affordable) remain more affordable than the national average.
     • weka 3.1.1

       29 April 2016 at 11:40 am

       ah, here we go,

       Housing affordability for housing in New Zealand can be assessed by comparing the average weekly earnings with the median dwelling price and the mortgage interest rate. The earnings figure represents the money available to the family, or household unit, and the median dwelling price combined with the mortgage interest rates provide an indicator of the expense involved.

       So if they use the median house price, and the market has spiked, then they’re not looking at how people can really afford something, they’re looking at a pretty artificial measuring.

       There are also huge problems with defining affordability based on earnings. It depends on how much debt that person has and what their other expenses are. FFS, mortgages being granted aren’t based on someone’s income. They’re based on income vs expenses.
       • alwyn 3.1.1.1

         29 April 2016 at 12:00 pm

         Then propose another method and come up with your own index.

         However bear in mind that it is an index, just like the CPI. You can’t possibly put too many things into it, or do the numbers for a specific individual looking only at that one persons situation and then claim that it would be representative.
         If you did that you could say that someone who has just been wacked with a $100,000 tax bill has now found that housing has become much less affordable and that is a fair measure for everyone.
         On the other hand you could also claim that, using the couple who won $22m on Lotto that housing in Ashburton is now much more affordable.
         If you don’t like their method come up with your own and then publish you example and it’s results, as well as what your methodology is.

         In the end of course Nick chose to quote the only generally available evidence and what it had to say. It supports his claim.
         • Paul 3.1.1.1.1

           29 April 2016 at 12:15 pm

           Who sends you here every day to spout this nonsense?
           • alwyn 3.1.1.1.1.1

             29 April 2016 at 12:21 pm

             Go back to the Nursery. The adults are talking.
             If you want to be taken seriously you will have to explain what you think is wrong with what I have said. A childish nah, nah, nah, nah doesn’t cut it.
             • Paul …

               29 April 2016 at 12:27 pm

               What is wrong with what you have said has been already been made by rob at 3.3
               That you ignore such clear evidence shows me you come here to distract, not discuss.
         • weka 3.1.1.1.2

           29 April 2016 at 1:08 pm

           “Then propose another method and come up with your own index.”

           Pretty simple really. Look at a time when we had good rates of home ownership and stable rentals, and compare those two costs to wage rates at the time. Then do the same now. That’s not going to be definitive, but it is going to show 1%er numpties like you and Smith that no amount of academic jiggery pokery is going to alter the reality that huge swathes of people can no longer afford housing.
           • alwyn 3.1.1.1.2.1

             29 April 2016 at 2:56 pm

             I look forward to the results you obtain.
             It still wouldn’t answer the point of this post.
             That was that Nick Smith was away with the fairies when he said that Auckland Housing was more affordable than it was when National took office.
             At a minimum you would have to come up with a number for November 2008 and one for today. Comparing it with “a time when we had good rates of home ownership and stable rentals” certainly won’t be 2008, will it?

             “huge swathes of people can no longer afford housing”.
             Nobody is disputing that a lot of people can’t afford to buy a house in Auckland. However Nick isn’t saying that. He is saying that it isn’t as bad as it was when National came into office.

             “Huge swags of people, a greater percentage than today, couldn’t afford Auckland housing in 2008”
             TFIFY
         • Pat 3.1.1.1.3

           29 April 2016 at 8:50 pm

           The housing affordability index uses multiples of median income to measure affordability and on that measure housing in Auckland at over a factor of 10 is clearly more unaffordable in 2016 than in 2008 when it was 6.

           http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10881119
   • save NZ 3.2

     29 April 2016 at 11:46 am

     Oh goody, we can put everything into an ‘index’ and then tell any old lie.

     The only ‘real’ study done apparently. Wow. it’s ‘real’ not fake like what is actually happening if you live in Auckland and try to buy a property.

     Probably bought to you by the same business people who sold us ‘trickle down’.

     This is the government that borrows billions, doesn’t remember they created a tax haven (but just for offshore cronies) and has 7 or is it 8 deficits in a row.

     Maybe the same people can tell us the Christchurch rebuild is going swimmingly.

     And that NZ has nothing to do with the panama papers.

     And our water quality is still good.

     And NZ is doing it’s bit for climate change.
   • r0b 3.3

     29 April 2016 at 11:51 am

     The Massey study he was quoting, and it is the only real study done on this subject in New Zealand,

     Ah no.

     http://www.radionz.co.nz/news/national/263936/auckland-houses-'severely-unaffordable‘

     http://www.odt.co.nz/news/dunedin/370822/auckland-housing-affordability-worsens

     http://www.newshub.co.nz/nznews/auckland-housing-affordability-tumbles-2015011905

     http://www.interest.co.nz/property/79264/getting-harder-buy-first-home-auckland-rising-property-prices-offset-falling-interest

     https://www.tvnz.co.nz/one-news/new-zealand/housing-affordability-plummets-across-new-zealand-6106352

     http://www.newstalkzb.co.nz/on-air/larry-williams-drive-with-anz/opinion/the-first-word-housing-affordability-crisis-point/

     and so on and so on.
     • alwyn 3.3.1

       29 April 2016 at 12:11 pm

       Fine. Some use a different methodology.
       However, and I only gave them a quick glance, none of them conflict with Smith’s claim that it was worse in 2008.
       They say things like “Auckland’s housing has been ranked severely unaffordable in each of the eleven annual surveys so far.”.
       Some also only seem to consider the cost of the median house compared to the median income. Massey’s work also considers the cost of the mortgage.
       Would you really say that a house with a $400,000 mortgage at 5% was less affordable than one with a $350,000 mortgage at 12%, all other things being equal?
       You can complain about the index if you like, and propose alternatives but it is what Smith has chosen to quote, it is widely accepted, and it does support his claim.
       By the way, the second last one which does quote the Massey index, was not comparing 2008 and 2016, but 2013 and 2014. Yes the index got worse but it never reached the over 40 heights of 2007-2008
       • weka 3.3.1.1

         29 April 2016 at 1:12 pm

         “Fine. Some use a different methodology.”

         rofl. A quote worthy of Key.

         “He’s one academic, and like lawyers, I can provide you with another one that will give you a counterview.”

         http://www.listener.co.nz/commentary/john-keys-unhappy-week-at-the-bbc/
         • alwyn 3.3.1.1.1

           29 April 2016 at 2:58 pm

           Wow, now you are pinching other people’s jokes.
           To be fair you do attribute them to others.
           It doesn’t answer the statements I have made though.
           • weka 3.3.1.1.1.1

             29 April 2016 at 3:32 pm

             What joke?

             I’m certainly a far better referencer than you are.

             “It doesn’t answer the statements I have made though.”

             That’s because your original line about Smith being right has already been critiqued. (and I’d be more inclined to read your comments properly if you formatted them better).
             • alwyn …

               29 April 2016 at 3:40 pm

               It may have been critiqued but it certainly hasn’t been shown to be wrong.
               I do apologise about the formatting. What would you prefer?
               However please be grateful that I am not like Phil Ure. Remember his stream of consciousness technique?
     • Phil 3.3.2

       29 April 2016 at 1:40 pm

       Literally none of those studies or articles contradict what Smith said.

       Is Auckland housing currently more affordable than Auckland housing was in 2008? Yes. Nick is right.

       Is Auckland housing currently less affordable than all but a few other cities around the world? Yes. You are also right.
     • r0b 3.3.3

       29 April 2016 at 2:21 pm

       Oh come on people – pick your battles. Trying to defend the idea that Auckland affordability is not getting worse just makes you look like muppets.

       January 2016:

       Auckland housing at most unaffordable

       Housing in Auckland is the most unaffordable it has ever been, new research shows.

       Massey University’s latest Home Affordability Report shows the region is 59 percent less affordable than the rest of the country.

       Report author Susan Flint-Hartle said affordability in Auckland would only get worse, and that the deterioration would happen at a faster rate than it had for the past two quarters.

       And here are some more quotes from the articles linked above that you somehow “missed”…

       Housing affordability plummets across New Zealand

       If you’re planning on buying a home in the near future, you might want to think again.

       New research from Massey University shows the affordability of homes nationwide has dropped by 11.4% over the past 12 months and is likely to decline even further by year’s end.

       Auckland reported the most alarming drop of 14.4% as house prices continue to soar, amid ongoing debate over how to combat the city’s housing shortage.

       One of the authors, Christchurch researcher Hugh Pavletich, said it was worse this year than it had ever been.

       “The housing has got progressively worse and dramatically worse these past two years to the extent that it is now 8.2 times household incomes. Auckland is in a housing crisis and the politicians are certainly not acting fast enough to address the issue.”

       Auckland’s median house price [2015] is $613,000 – 8.2 times the median income of $75,100. … In 2012, Auckland’s average house price was 6.4 times the average income, and the survey says severe land use restrictions have pushed prices up.

       Housing has only become unaffordable for first home buyers in Auckland since July 2013, when the mortgage payments on a lower quartile priced home would have taken up 38.73% of a typical first home buying couple’s take home pay. Since then the lower quartile selling price in Auckland has jumped form $444,000 to $614,700 (up 38.5%), pushing weekly mortgage payments up from $576.62 a week to $757.60 (up 31.4%). Over the same period the median take home pay for a first home buying couple has increased from $1489 a week to $1531 a week, a rise of just 2.8%.

       One more as a bonus:

       Housing affordability crisis worsens in New Zealand

       A property bubble and rampant speculation following the 2008 financial crisis has contributed to soaring income inequality along with sustained attacks on the wage levels and basic social rights of ordinary people, including access to accommodation. Auckland’s housing market is now only slightly cheaper than London but less affordable than Los Angeles, Toronto, New York, Perth, Brisbane and Boston.

       In 2013, Demographia found the median Auckland house price was $506,800 and the median household income $75,200. This gave the city a “median multiple” (house prices divided by incomes) of 6.7. Anything more than 3 is regarded as unaffordable. Last year, Auckland’s median house price jumped to $561,700 but the median household income fell to $70,500, giving a multiple of 8. The figure has since blown out to 8.2.

       Just one more (2015):

       Buying a first home became more affordable in most parts of the country last month thanks to a fall in lower quartile selling prices in most regions, but significantly less affordable in Auckland, where the lower quartile price surged to a record high, according to the interest.co.nz First Home Buyer’s Affordability Report.

       The report shows that housing remains affordable for typical first home buyers in all regions of the country except Auckland, where affordability worsened considerably due to rapidly rising prices.
       • alwyn 3.3.3.1

         29 April 2016 at 3:35 pm

         You are certainly being very picky.

         You quote the Herald as saying “Housing in Auckland is the most unaffordable it has ever been, new research shows”, supposedly from data in the Massey survey.
         On the same date, and reporting on the same study the DomPost said that
         “Houses in Auckland are more affordable than they were in September, but are still 59 per cent less affordable than anywhere else in the country.”
         They can’t both be right can they? I have looked through the Massey report at that time and I can see nothing at all to justify the Herald comment. Perhaps the reporter thinks that a lower index means less affordable.

         You did see, I hope that your quote
         “New research from Massey University shows the affordability of homes nationwide has dropped by 11.4% over the past 12 months and is likely to decline even further by year’s end”
         isn’t “New Research at all? It was from October 2014. That relates to figures from 18 months ago. If you are going to quote things why don’t you quote the latest, as I did?

         Your final quote was talking about numbers from May 2015. That is 11 months ago and things have, as Smith says been improving since then. Why not use the latest numbers that are available? Doesn’t it fit in with your agenda?

         In any case the index dropped from September 2015 to December 2015 and then dropped again in March. Say what you like but according to the Massey research the index is falling and is much lower than it was in 2008.
         • r0b 3.3.3.1.1

           29 April 2016 at 4:06 pm

           Why not use the latest numbers that are available? Doesn’t it fit in with your agenda?

           Oh please. OK latest info available, how about this piece, published an hour ago, with a quote from the author of the report that you and Nick Smith are running off about:

           Nick Smith Was Very Wrong on the Radio
           …
           To inform its opinion, the Board contacted Dr Susan Flint-Hartle, an author of the Massey University Housing Affordability Index cited by Dr Smith, to query whether his statement was correct. This was her response:

           No.

           Affordability in Auckland improved slightly over the last three quarters, certainly not over the three terms National has been in government. He may be referring to the govt controls and IRD and RB LVR restrictions that have had the impact indicated in the last 3 quarters but his statement is wrong, misguided, political rhetoric, who knows?

           Susan

           When considering whether Nick Smith was correct in his statement to Morning Report, it is important to note that he was not correct, and was, most likely, just making stuff up.

           So that’s the report’s author telling you that you’re wrong alwyn. How’s that suit your agenda?
           • alwyn 3.3.3.1.1.1

             29 April 2016 at 4:50 pm

             I would very much like to know exactly what question Sue was asked.
             Her answer doesn’t actually fit the statement that Smith made.
             He claimed only that the affordability was better now than it was when National entered office. Massey’s own numbers confirm that.
             In the links I referenced at comment 3 above the index was 38.44 in November 2008 (or at least the quarter centred on November) and 33.8 in February 2018. A lower index means more affordable so his statement IS CORRECT. The index dropped and he was not making it up.

             If she was asked has the index improved during the National Government her answer could fit that question. When you say something like “certainly not over the three terms National has been in government” that seems to me to fit a question implying a steady improvement over the whole time. If she was asked something like that her answer is correct but it wouldn’t be answering the comment that Smith really made.

             So no. The published facts fit what Nick Smith actually claimed.
             Looking at that “Spinoff” site I’m not sure I would trust them as a source of anything very sensible. I not that this was prepared by their Sports Editor and the tone of the other articles is rather like the US National Enquirer magazine.
             I think Sue has been tricked to give them a headline.
             • r0b …

               29 April 2016 at 5:22 pm

               It’s cute that you think you understand the report better than the author!

               The 2008 number is unreliable, see the intro to that report “Not too much should be read into this result since the median house prices statistic may be skewed upwards due to stricter lending criteria leading to reduced sales volumes for lower cost homes”.

               Given that the 2008 number is unreliable, and that the author of the report says that Nick Smith is wrong, I’m going to have to stick with – Nick Smith is wrong.
               • One Anonymous Bloke …

                 29 April 2016 at 5:25 pm

                 “Wrong” – you’re being bloody charitable. I’d say Nick Smith is lying, and Alwyn is a dupe for believing him. What a perfect expression of National Party values.
               • alwyn …

                 29 April 2016 at 6:45 pm

                 The full quote is
                 “Surprisingly, there was a slight worsening in national affordability for the quarter ending November 2008. A 2.2% increase in the national median house price outweighed the 1% increase in wage rates and static interest rates, resulting in a 1.4% overall deterioration in affordability. Not too much should be read into this result since the median house prices statistic may be skewed upwards”

                 It wasn’t ALL the numbers or the whole report that were considered unreliable. It was the small change from the previous quarter, which for Auckland in fact had been higher rather than the expected lower figure for this quarter at 38.70. You will also have noticed, I hope, that Sue was NOT the author of the 2008 report. She has not said that the 2008 report was unreliable.

                 Unless you know her or have seen the full details of what she was asked and what her full reply was you are in no position to attribute to her the conclusions you have come to about her views. If you know her and have asked her yourself for her opinion I will accept your word. Otherwise I remain sceptical of the way she was approached for an answer.

                 As for OAB in the comment immediately above this, I think he is simply making it up that Smith is lying. In the absence of anyone from Massey officially withdrawing the 2008 paper Nick Smith is entitled to rely on the numbers.
                 I am not just believing Nick Smith by the way. I am accepting the Massey Report.
               • lprent …

                 29 April 2016 at 7:50 pm

                 Nick Smith is usually wrong, especially if numbers are involved. One day I will get a shock. Given his last decade of useless numeric statements, he has to be right, if only by pure accident, some time…

                 At least I hope so. Because his ability to defy the odds and never get ANY numbers right is getting a bit worrying.
                 • alwyn …

                   29 April 2016 at 8:12 pm

                   You may be right. I haven’t really had that much interest in him.
                   I only checked this one because it didn’t seem right. I found it quite hard to believe
                   However, looking at the two Massey reports I linked to it It appears it was.
                   • r0b …

                     29 April 2016 at 10:49 pm

                     No matter how often you repeat it alwyn, it doesn’t make it true. You’re clinging to an unreliable figure from 2008 to compare to an out of date figure from 2015 (when even the 2015 report author says you’re wrong).

                     You asked for “latest numbers” and here they are:

                     Central Otago/Lakes joins Auckland as the second region in NZ where housing is now unaffordable for typical first home buyers

                     April 20, 2016

                     Housing became substantially less affordable for first home buyers in Auckland last month, as a big jump in the region’s lower quartile selling price more than offset falls in mortgage interest rates and increases in household income.
                     …
                     Based on REINZ figures, the lower quartile selling price in Auckland jumped from $629,500 in February to $673,400 in March, an increase of $43,900 (7%) in a month.

                     That more than wiped out the benefit of falling interest rates, with mortgage payments on a lower-quartile priced home in the region rising from $756.07 a week in February to $806.93 in March, an increase of $50.86 a week.

                     According to the report, the combined median after tax income for a typical first home buying couple in Auckland (defined as a couple where both are aged aged 25-29 with no children and both working full time) was $1574.81 a week in March, meaning the mortgage payments would be taking up 51.2% of their take home pay, up from 48.2% in February. …

                     The world has already moved on from your 2015 report, and as pretty much every other report and piece of media coverage shows, Auckland’s housing affordability is worse now than it has ever been.

                     G’night now.
                   • Pat …

                     29 April 2016 at 11:10 pm

                     it deals with cost of servicing existing mortgages…it says nothing about the ability to enter the market….the major concern….another factor to consider is that in 2008 mortgage rates were approaching 10% with potential to fall (as they did)….there is virtually no potential now for downward movement, only up…..exacerbating the problem.

                     Smith is a disingenuous prat.
                   • Psycho Milt …

                     30 April 2016 at 1:51 pm

                     Looking at Weka’s quote from the definitions used in the report, here’s the grift:

                     …the median dwelling price combined with the mortgage interest rates provide an indicator of the expense involved.

                     The interest rates are the key to understanding the grift. Back in 2008, Auckland house prices were a fraction of what they are now, but interest rates were a lot higher than they are now. In the latest survey, the house prices have sky-rocketed but interest rates are at rock bottom.

                     So the change in interest rates conceals the effect of the change in house prices, and you can have a situation in which houses are now more “affordable” according to this index than they were in 2008.

                     And for some people that’s probably true. If you own outright a million-dollar house in Auckland, and would like to own another one, those rock-bottom interest rates make expanding your property portfolio highly affordable. Woot! If, on the other hand, you don’t already own property in Auckland and are needing to find a 20% deposit for a million-dollar house, those low interest rates count for shit.

                     So, the appropriate response to Smith’s claim that Auckland houses are more affordable than in 2008 is “More affordable for whom?” Most of us aren’t interested in how affordable property investment is for people who already have property portfolios.
                   • weka …

                     30 April 2016 at 2:47 pm

                     The Spinoff has a good article on Auckland house buying, including what happens once you already own a home, which basically lays out why the whole thing is completely insane and based on greed.

                     That was an unusual meeting. The broker had a very different perspective on my money, which was that I’d made the wrong move by paying off my mortgage, and that what I should have been doing is using the annual gains in the value of my house to leverage and buy more houses. Auckland property values go up 10 per cent a year, “like clockwork”, he said, so each year I wasn’t buying houses I was being a stupid fool.

                     Capital gains aside, did I know that all I needed to do was cover interest payments on my extra houses, and that the government would give a third of the money I spent on these payments back to me? There is a shortage of rentals in Auckland, too, so I could charge some unlucky family astronomical rent and get extra income that way. What was I waiting for?

                     …

                     We didn’t win the auction on Wednesday – the house we wanted ended up selling for one million dollars above its CV – but we have our eye on another. The big question is if we do manage to buy a new place, what will we do with the old one? Ridiculously, it will cost around the same monthly amount to own them both, deprive somebody else of their first home, and cream it on capital gains and tax rebates until we get bored of making money and sell.

                     I’d love for a young family to buy our old home and be as happy as we were when we moved in. But until the government changes the rules there’s zero incentive for me to do sell it and, even if I did, it’d probably just be bought by an investor.

                     http://thespinoff.co.nz/29-04-2016/auckland-property-has-become-a-farce-but-who-is-the-asshole-to-blame/
   • Thinkerr 3.4

     29 April 2016 at 8:51 pm

     “…people who rubbish his comments without looking at the evidence”. Or, we might add, who don’t look at the evidence closely…

     From the hyperlinked report you provided here:

     First, have a look at the Important Disclaimer. “No person should rely on the contents of this report without first consulting a qualified professional person”.

     Then, let’s look at the explanation behind the graphs:

     “The… index has improved again, and is close to the level of the same quarter two years ago”. Which is like saying “I smoked three packs of ciggies two years ago. Then, it increased to three packs. Now, I’ve cut back to two. A positive sign, but it doesn’t mean I’m healthy.

     “Between June 2014 and June 2015, there were five quarters of worsening home affordability for Auckland… Now, the pendulum seems to be cautiously swinging the other way”. The graphs are annual, so the show one quarter of worsening and three quarters of improvement, so of course the make the picture look good.

     The data shows that the average national house price rose by 4.65% over the previous 12 months, while the average wage rose by only 3%. Using only those two variables, affordability worsened again. IMHO, it was only a reduction in mortgage rates, the third variable, that created an overall improvement in the index, and they reflect a lousy domestic economy. If our economy improves, interest rate rises won’t be far behind.

     Finally, your comparison, alwyn, that the index in November 2008 was 38.44 and now it’s 33.8. That represents a compunding average annual improvement of 1.6%. True, it’s better to be improving than not, but your choice of November 2008 was the month when the GFC had hit with a vengeance, average weekly earnings were affected by that and, in the US, bailout packages were being touted to reverse the sliding global economy. It didn’t get much worse than November 2008, if you recall. It’s nice to have improved on average 1.6% per annum since then, but it would have been nice if it were more.
     • alwyn 3.4.1

       30 April 2016 at 9:34 am

       “but your choice of November 2008 was the month when the GFC” you propose
       November 2008 wasn’t chosen by me.
       I was looking to see whether Nick Smith’s claim that, according to the Massey University Housing Affordability study houses in Auckland were more affordable than when National entered office.
       In case you might have forgotten the election in 2008 was on November 8. National would have been sworn in a bit later in the month.
       That was when National took office and was the only date I could have picked.
       I didn’t “choose it” at all.

       As for “The data shows that the average national house price rose by 4.65% over the previous 12 months, while the average wage rose by only 3%. Using only those two variables, affordability worsened again. IMHO”.
       That is fine. It is not however the method Massey use and it is their numbers that Nick was using in his statement.

       For crying out loud. What is there about using what Smith said in order to decide whether he was lying that is so hard for you people to accept?
       If I was to say that I was older than the average New Zealander you can’t call me a liar because I am younger than the average centenarian.

       The question was did Smith lie. He didn’t. End of story.
       • r0b 3.4.1.1

         30 April 2016 at 1:16 pm

         You’re a stubborn wee bugger alwyn, I’ll give you that.

         Smith’s technical lie, was the word “now”, as in “more affordable now” (which is what he said). He’s using old 2015 data and the situation has worsened (as above). If he’d said “more affordable (on one particular measure) in late 2015 when compared to an unreliable figure in 2008” he would have been correct.

         Smith’s big lie is that the housing affordability index turns out to be a specific limited measure that doesn’t reflect the realities of getting in to the housing market (Pat above). That cost to earnings ratio is a killer, and the reason we have been getting steadily worse in the international comparisons of affordability.

         Lies, damn lies and statistics, Smith uses them all.
         • International Rescue 3.4.1.1.1

           30 April 2016 at 6:24 pm

           You seem to be talking straight over Alwyn’s main point.

           Smith has consistently used the same measurement for his claims on housing affordability, his most recent from February 2016. What you have presented as more recent data is not from that same source, and therefore cannot be used to refute Smith’ claims, let alone call him a liar.

           Housing affordability is affected by other factors within the economy, one of which is the movement in real wages. Real wages are increasing, yet I’m not aware of this being a factor in any of the studies referred to.
           • Psycho Milt 3.4.1.1.1.1

             30 April 2016 at 6:58 pm

             Real wages are increasing, yet I’m not aware of this being a factor in any of the studies referred to.

             If it’s not a factor in use, that’s most likely because the increase is trivial in real terms, and completely insignificant relative to Auckland house price increases.

             It doesn’t matter that Smith consistently uses the same measurement for his claims, if the measurement is effectively measuring affordability for people who already own property. He’s absolutely correct that Auckland property is now way more affordable for people who already own Auckland property than it was in 2008 – that’s actually part of the problem, let alone the fact that it’s way less affordable for people who don’t already own Auckland property.
             • International Rescue …

               2 May 2016 at 10:59 am

               “It doesn’t matter that Smith consistently uses the same measurement for his claims, if the measurement is effectively measuring affordability for people who already own property. ”

               That’s not correct, which is why I raised the issue of real wages.

               “If it’s not a factor in use, that’s most likely because the increase is trivial in real terms, and completely insignificant relative to Auckland house price increases.”

               So don’t live in Auckland.
         • alwyn 3.4.1.1.2

           30 April 2016 at 6:49 pm

           A last comment post.

           ” He’s using old 2015 data”. He wasn’t. The latest Massey report was for the first quarter of 2016, Jan-Mar and they refer to the date as the mid-point February. That is the LATEST one they have produced.
           Have a look at the link I posted. You will also see that things in Auckland actually improved from the fourth quarter of 2015 to the first quarter of 2016. They didn’t get worse.

           The cost to earnings ratio is NOT the killer. It is your repayments that kill you, not the value of the loan. I speak as someone who had to pay 13.5% in 1974. The loan wasn’t that big but the monthly payments were a bitch.
           What would you really rather have? A $200k loan at 15% (say $36k/year repayments) or a $300k loan at 5% (say $24k/year repayments).

           Sorry, but Smith DID NOT LIE.

           This of course has precisely nothing to do with whether Auckland housing is affordable. It is only about whether Nick was uttering terminological inexactitudes.
           • Psycho Milt 3.4.1.1.2.1

             30 April 2016 at 7:02 pm

             What would you really rather have? A $200k loan at 15% (say $36k/year repayments) or a $300k loan at 5% (say $24k/year repayments).

             In the particular instance of Smith weaselry under discussion, the question is more: what would you really rather have? A $300k loan at 10%, or $700k at 4%? In Nick-world, the second one is “more affordable.”
             • mickysavage …

               30 April 2016 at 7:28 pm

               It is although interest rates are so low only because central governments turned the tap on for cheap credit to lessen the effects of the global financial crisis. Key can only claim credit for this because he is a member of the merchant banker class that brought the world’s economy to its knees because of their greed and made this action necessary.
               • Andre …

                 30 April 2016 at 7:45 pm

                 micky, does “It is…” mean you think $700k at 4% is more affordable than $300k at 10%?

                 If you’re going interest only, then yes, $28k pa interest payments vs $30k pa interest.

                 But if you’re trying to pay off the principal over 30 years, then the annual payments (interest plus principal) on $300k @10% are about $31,600, whereas the annual payments on $700k @ 4% are about $40,100.
           • r0b 3.4.1.1.2.2

             30 April 2016 at 7:31 pm

             Ahh you are correct, the report data goes up to Feb 2016. But it is not “now”, the most recent data I can find referred to is for March (already referred to above, always ignored by you) which showed a substantial worsening of the position.

             April 20, 2016 … Housing became substantially less affordable for first home buyers in Auckland last month, as a big jump in the region’s lower quartile selling price more than offset falls in mortgage interest rates and increases in household income.

             No doubt the April data will be worse again. (And you’re still comparing to an unreliable 2008 figure, and the 2016 report author says you’re wrong, etc.).

             The cost to earnings ratio is NOT the killer. It is your repayments that kill you,

             You’re still looking at it from the point of view of someone already on the ladder. The cost of a deposit is rising with prices like a rocket, pricing ordinary people out of the market much more significantly than in 2008. That is what the Massey’s technical measure of “housing affordability” doesn’t capture, that is why we are falling down all those international rankings, that is why in practical terms the housing crisis is much worse now than it was in 2008, that is why Smith’s practical lie was much more significant than his technical lie.

             G’night!
             • Andre …

               30 April 2016 at 8:07 pm

               I also note that Massey’s report compares median house price with average (which is usually the mean) income. It wouldn’t surprise me if the average (mean) income was rising faster than the median income.

               If we look at my personal experience, in 2000 my home was worth about 7x a senior product development engineer’s salary, floating interest rates around 7.5%. In 2008, around 8x salary and floating interest rates around 8%. In 2016 around 13x salary and floating rates around 5.5%. And Titirangi has had less price growth than most other parts of Auckland!

               So while there’s maybe a glimmering of an argument that Smith didn’t outright lie, it definitely qualifies as unmitigated bullshit.
   • Bryce Bartley 3.5

     30 April 2016 at 4:10 pm

     Sorry Alwyn but the researchers say Nick Smith is wrong with the claim – see the Spinoff. I think we can agree that they know what they wrote.
     • International Rescue 3.5.1

       30 April 2016 at 6:25 pm

       Actually the Massey researcher say Nick Smith is correct. I think we can agree they know what they wrote?
4. Treetop 4

   29 April 2016 at 11:53 am

   I really need a good laugh today.

   Nothing is working for those who really need housing in Auckland on every level.
5. Robert Guyton 5

   29 April 2016 at 11:57 am

   Duncan Garner will make hay from Smith’s claim – paddocks and paddocks of hay.
6. Bearded Git 6

   29 April 2016 at 12:16 pm

   What gets me is is National’s harping on about how low the interest rates are now as though they have heroically achieved something special.

   In fact NZ’s Central Bank interests rates are higher, usually much higher, than the UK, USA, Japan, Hungary, Canada, Australia, Korea, Czech Republic, Denmark, Israel, Norway, Poland, Saudi Arabia, Sweden, Switzerland and the entire Eurozone (Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain.)
   • Paul 6.1

     29 April 2016 at 12:17 pm

     Hence our overvalued currency.
     • alwyn 6.1.1

       29 April 2016 at 12:24 pm

       What do you think our exchange rate should be against some of the major currencies?
       Then kindly explain WHY it should be any different from what it actually is.
       • Paul 6.1.1.1

         29 April 2016 at 12:30 pm

         Can’t be bothered.
         You are here only to divert, not debate.
         Once I see evidence you are open to ideas, rather than acting as a fanboy for Key, I’ll engage.
         • International Rescue 6.1.1.1.1

           30 April 2016 at 6:09 pm

           It was a fair question. If you believe the currency is overvalued, explain what it should be and why.
7. Keith 7

   29 April 2016 at 3:39 pm

   What else can Smith do but lie and massively so, I mean National have absolutely failed on housing and all they are doing is copying the masters. To quote Adolf Hitler, no less, from Mein Kampf:

   “…that in the big lie there is always a certain force of credibility; because the broad masses of a nation are always more easily corrupted in the deeper strata of their emotional nature than consciously or voluntarily; and thus in the primitive simplicity of their minds they more readily fall victims to the big lie than the small lie, since they themselves often tell small lies in little matters but would be ashamed to resort to large-scale falsehoods. It would never come into their heads to fabricate colossal untruths, and they would not believe that others could have the impudence to distort the truth so infamously. Even though the facts which prove this to be so may be brought clearly to their minds, they will still doubt and waver and will continue to think that there may be some other explanation. For the grossly impudent lie always leaves traces behind it, even after it has been nailed down, a fact which is known to all expert liars in this world and to all who conspire together in the art of lying”.

   Actually this is Nationals base philosophy nowadays and they are really really scraping the bottom of the barrel with their duplicity and arrogance.
8. Murray Simmonds 8

   29 April 2016 at 3:55 pm

   Well answered, Paul at 6.1.1.1.

   There’s another big elephant in the room that some RW commenters here are refusing to see. It goes something like this:

   When interest rates were high and property prices were relatively low (i.e. the opposite of today) it made some sense to invest in a first home. Over time, there was the possibility of re-couping your high mortgage-interest costs through inflation plus long-term capital gains.

   Today, it make no sense to buy property in Auckland if one assumes (as I do) that the property bubble will burst (which I believe will happen sooner rather than later). Because there’s no way you will be left with anything other than a mortgage that is higher than the value of your property.

   Factors like that need to factored into the equation. My guess (though i haven’t bothered to look) is that they were not included in the model upon which Smith based his comments upon this morning, on RNZ (I listened, astounded, as it happens.)
9. ropata 9

   29 April 2016 at 5:24 pm

   http://www.buildmagazine.org.nz/assets/PDF/Build-150-51-Feature-Affordability-Stats-Tell-The-Story.pdf

   The chart shows housing affordability was declining severely from 1999 to 2008. Then from 2008 to 2013 (in the wake of the GFC) affordability improved markedly. But now the bubble is inflating, and affordability has again worsened sharply since 2013.

   So Nick Smith has been extremely selective with his data, technically he was correct but his comment is very misleading. The trend is bad bad bad.
   • alwyn 9.1

     29 April 2016 at 8:38 pm

     I missed this comment. I was struck by the next one.
     That is an interesting graph. It is rather like an inverse of the one Massey seem to use where lower is better.
     I never claimed that Nick wasn’t a typical politician you will note. I just said that in this case what he claimed was true.
     In general I accept the premise that you have to read very carefully what a politician says. Only a few of them actually lie but they all don’t mind if you misinterpret them.
     And I really do mean ALL of them. Some of them are worse than others of course.
10. ropata 10

    29 April 2016 at 5:30 pm

    Another important statistic is the house price median multiple. Alwyn is focused on household cashflow, clearly he doesn’t care if people have to get 100 year mortgages (yes this is possible overseas), so they never truly own the property at all.

    In 2008 a house cost approx. 3 times median income.
    In 2016 a house costs approx. 9.26 x median income!!

    Conclusion: Nick Smith is a bald faced liar.
    • Paul 10.1

      29 April 2016 at 5:32 pm

      And alwyn defends such lies.
    • alwyn 10.2

      29 April 2016 at 7:00 pm

      No Nick is not, at least about what he claimed.
      All he said was that, according to the Massey University Affordability study houses in Auckland were more affordable now than they were in 2008 when National came into office.
      He didn’t claim that the multiple had dropped.
      He didn’t claim that prices had dropped.
      He only said that the affordability index had dropped.
      It had.

      As for your ridiculous claim that
      “In 2008 a house cost approx. 3 times median income.”
      Rubbish. Even in 2007 it was 6.9 and rising.
      http://www.demographia.com/dhi2008.pdf
      I would also be interested where you get a 2016 figure of 9.26 from.
      • ropata 10.2.1

        29 April 2016 at 7:35 pm

        From interest.co.nz. The link is in my comment #10 above.
        I stand corrected on the 2008 figure, I had trouble finding reliable info.

        But my point is that “honourable” Nick Smith has used a couple of data points to convey an entirely misleading impression. The actual trend, and the more relevant statistics show that housing is less affordable than ever before, 2008 included.
        • alwyn 10.2.1.1

          29 April 2016 at 8:08 pm

          Thank you. I couldn’t believe that a ratio of 3 existed at any time after the early 1950s
          I’m not too sure about a number which went to 9.26 after being 8.49 in February as being representative of the year but it did happen, and was for the whole of Auckland.

          On the other hand it is hard to see that a price/income ratio that ignores the cost of borrowing is intrinsically better than one that takes mortgage rates into account. I think, like Massey, that their approach is probably better.

          As far as Smith goes you are right. All politicians cherry pick their statistics. He can be accused of that but not of lying.
          I had a look one time at Blips celebrated list of John Key’s “lies”. I just looked at a small sample but none of the claimed lies were in fact a lie. In every case Key, who is a truly masterful politician, had a completely valid reason for what he had said. People might think he had said something else that was false but he hadn’t. All of Blip’s “lies” I checked weren’t lies at all.
          • Pat 10.2.1.1.1

            29 April 2016 at 8:53 pm

            http://www.interest.co.nz/property/house-price-income-multiples
          • Nick 10.2.1.1.2

            30 April 2016 at 7:46 am

            They are lies alwyn…….and they are used to confuse, distract, cheat, distance, abdicate responsibility. This is the one thing key, Smith, etc are actually good at.
          • ropata 10.2.1.1.3

            30 April 2016 at 5:26 pm

            Misuse of statistics to mislead the public == lying
    • Nic the NZer 10.3

      29 April 2016 at 7:48 pm

      “In 2008 a house cost approx. 3 times median income.”

      Citation needed.
      • ropata 10.3.1

        29 April 2016 at 11:40 pm

        retracted… I misread a graph from interest.co.nz to get that number
11. AsleepWhileWalking 11

    30 April 2016 at 8:32 am

    This market is setting up for a crash regardless of how affordability is defined.
    • linda 11.1

      30 April 2016 at 10:31 am

      i cant wait to see all those indebted bankrupts crying my family my home my kids there inheritance not fair we just trying to get ahead.it wasn’t greed its all there fault all there fault labor labor labor,i can hear them now not i borrowed to much and cant pay it back they will want a bail out i say no fucken way let them crash and burn!
12. linda 12

    30 April 2016 at 9:11 am

    that was so funny oh god that could have come from
    Dr smith lost in space,where smith goes disaster follows.
    https://youtu.be/Wz2_d6zWDhg

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