Key finally admits there is a housing crisis but says it is all Labour’s fault

Written By: - Date published: 8:35 am, August 30th, 2016 - 32 comments
Categories: john key, making shit up, national, same old national, slippery, spin, the praiseworthy and the pitiful, you couldn't make this shit up - Tags: ,

john-key1

John Key is finally accepting that there is a housing crisis.  But he appears to have forgotten that he has been Prime Minister for the last eight years and is attempting to say that fault lies elsewhere.

He came out with a rather strange statement yesterday suggestion that under Labour residential price increases went up twice as fast as they have over National and implied that National was therefore doing a better job.

From the Herald:

Prime Minister John Key has defended the cost of housing in New Zealand, saying under his Government house prices had gone up only 43 per cent.
In response to Labour housing spokesperson Phil Twyford’s calls for the Government to “declare a state of emergency”, Key defended his Government’s actions.

“National house prices under the 9 years Helen was Prime Minister went up 102 per cent, under us they went up 43 per cent,” he said.

“Auckland house prices under them and under us, broadly in Census terms, went up the same. If it’s a national state of emergency now, in a crisis now, why wasn’t it when Helen was Prime Minister?”

Key told NewstalkZB’s Mike Hosking the cost of an average Auckland house is nine times that of the average earnings.

“To give you an example Sydney is 12 times and we’re about the same with Melbourne,” he said.

My jaw dropped when I heard these figures and I had a look around to see where they came from.

They appear to be based on changes to the QV residential price index. In September 1999 the index stood at 690. By September 2008 the figure had increased to 1,416 which was a 105% increase. Then by December 2015 the index was up to 2,032 which is a 43% increase.

Auckland’s prices went up from 669 in December 1999 to 1280 in September 2008, a 91% increase.  In the 8 years since it has increased to 2319 which is an 81% increase.

The changes are shown in this graph.  Auckland’s property prices steadily increased until 2008 when the Global Financial crisis hit.  They have then surged since the beginning of 2012.

QV Residential Price Index

What does the QV Residential Price Index measure? Average QV for properties in the country.  But in areas where there are dramatic increases QV valuations lag well behind actual valuations. For instance the QV of my property is not much more than half what the absolutely insane market would probably pay for it.

So there are a few problems with Key’s use of this index to back up his claim:

  1. The figures are for the whole of New Zealand whereas the crisis is concentrated in Auckland although it is spreading.
  2. The figures are dodgy as and increasingly unrepresentative of what is happening in the market.
  3. There is clearly a recent surge in values in Auckland that this Government is doing nothing about.

This is classic Key and classic National.  Find some statistics that back their contention.  Use these figures even though you know they do not represent reality.  And blame Labour.

32 comments on “Key finally admits there is a housing crisis but says it is all Labour’s fault”

  1. dukeofurl 1

    Thats the cinch , the QV or Council valuations will be updated next year, when Key will have forgotten what he said this week.

  2. ianmac 2

    Of course the general population just hear the message without bothering to question the facts. “Labour was worse so our National Government is doing a good job. Lets vote to keep them on.”
    Politics is so simple.

  3. Pat 3

    It will be worth remembering there are around 400,000 people in this country who have no direct experience of the previous government so have no way of judging the veracity of any of Keys statements……more than enough to swing a close election.

  4. billmurray 4

    Yes there is a housing crisis and there is constant critical scrutiny of what is said by all Political parties, this crisis can be traced back to the 2008 Free Trade Agreement which the Helen Clark Labour government negotiated with the Chinese.
    This agreement basically allowed (and still allows) Chinese folk to buy and sell residential property in NZ, whether or not they are residential in NZ.
    All political parties subsequently endorsed this agreement.
    I contend that until this agreement is modified, then the NZ housing situation will never be solved to the average Kiwi’s and their children’s needs.
    The Labour party is languishing in the polls despite all the noise they are making, the reason is that is all they are doing, “making noise”.

    They need to “take the bull by the horns” face the facts of the 2008 FTA and stop “making noise”.

    • Draco T Bastard 4.1

      +1

    • RedLogix 4.2

      Absolutely correct bill. And sadly the one thing the Clark govt did that I opposed all along.

      • Colonial Viper 4.2.1

        Our dairy farmers have loved the Chinese market too.

        We send them good milk powder while in return we accept increasing amounts of cowshit, phosphate and nitrogen in our waterways, with Aussie banks skimming off the financial cream for themselves while we provide below minimum wage employment to Filipino imports.

        Win win for NZ.

  5. Draco T Bastard 5

    This would be National not taking responsibility for their actions nor are they taking seriously the responsibility that comes with the job of being government. Typical of RWNJs really as they always deny that it’s their fault when it is.

  6. save nz 6

    Personally would not believe a word Key says, and I dear say most voters will think the same. In fact I don’t think Key’s approach is working anymore. The country is in trouble when Natz voters are being poisoned by their water supply. Yep, funny that, pollution does not have political boundaries! Faking stats is not cutting it, when you are at risk of being poisoned.

    As for housing crisis. I have said this many times before Labour are on 25% because there are no political winners from this. Housing has been allowed to become a clusterfuck of epic proportions and there is not easy solution apart from an absolute change of direction from global neoliberalism. Labour know it too, but still clings onto globalism as a solution. But voters have had enough world wide and saying TPPA No Way, Fuck immigration – we like diversity but not when people are becoming 2nd class citizens in their own country and their assets are being sucked out by the .1% and corrupt tax haven loving Kleptocrats and Plutocrats.

    Until Labour really embrace that rather than a luke warm type communication that can easily be manipulated by the spin doctors they are marooned on 25%.

    • save nz 6.1

      But I also think Labour have turned a corner under Little. He is a giver not a taker and pushing through important alliances with other members of the opposition (NZ First, Northland, Greens alliance). Minding each other’s back will be key in the election.

      • Garibaldi 6.1.1

        “Minding each other’s back will be key in the election”. Yes, but can Labour be trusted to do it? With so many trough feeding neolibs in their ranks they are still not showing any real signs of being trustworthy for the Left. With the likes of Nash, Shearer ,Hipkins etc one can only envisage National’s ad about rowing the boat. Also @ 25% it is obviously not cutting the mustard yet with the people. The way they treated the Mana party last election and the way they cut Cunnliffe down still pisses me off.

        • save nz 6.1.1.1

          I think in reality people have to either accept National for a 4th term or work with Labour and their limitations. Yep, Labour have done some bad things, but now they have turned a corner and historically the have done some amazing things. Voters don’t have much choice if they want to get the Natz out. So I think the left need to try to support Labour’s good moves and try and shift Labour’s bad decisions. We all have to move on from the past elections and try to bring about good changes and policy and strategy in the present.

          • dave 6.1.1.1.1

            its mmp labor has some good policy ,as does the greens and NZ first mmp allows hopefully a new government can cherry pick of best of it .
            with one big risk how badly has key and gang stuffed the finances
            ?????

  7. Lanthanide 7

    The easy answer to Key’s question, how come it’s a crisis now when it wasn’t a crisis then, is that under Helen clark, the average wage increased significantly (perhaps not as much as house price growth), whereas under Key the average was has not increased significantly.

    • indiana 7.1

      …its a crisis of perception for those that are looking to buy a house – current home owners don’t consider there is a crisis. Its not a crisis that requires a declaration of a state of emergency

      • McFlock 7.1.1

        apart from that it flows on to renters as well, and mortgage rates.

        So it effects everyone.

        • TheExtremist 7.1.1.1

          As a renter I’m fucked. I can’t afford Auckland rentals anymore and my lease is up in 4 weeks. Landlords gave notice yesterday from their batch in Waiheke that they want to sell (obviously to cash in on these stupid house prices) My options are:

          A) Move waaaaaaay down south so as to endure a 2 hour commute to get to work
          B) Quit my job and move to a region.

          I need to decide in the next few days what to do. Fucks sake.

          • Garibaldi 7.1.1.1.1

            Extremist. You will probably have to go further south than the Bombays. Jaffas have had a huge affect on prices through the Waikato/BOP . Good luck and act quickly….

          • Observer Tokoroa 7.1.1.1.2

            .
            . Hi Extremist.

            . It’s not funny Mate. Landlords don’t value Tenants. Greed is the game they play.

            The whole country is affected by Foreign and Absentee landlords.

            The Maori Party; The United Future; The Act party; have done this too you. Go and see them and ask what you can do.

            Keep up your courage Extremist. Lead others to your cause.

            People such as you are the salt of the NZ earth. You suffer for your belief in this stupid evil unfair aggressive hateful dumb Aoteoroa.

            .

          • save nz 7.1.1.1.3

            Try Rodney district in Auckland, the rentals are cheaper because you have to put up with being in John Key’s electorate. Also there is no public transport (being John Key’s electorate to keep the poor out) so it lowers rents. But of course depends where you work.

  8. Observer Tokoroa 8

    .
    PS – Extremist.

    John Key , Billy English and Bronagh will be celebrating their success in destroying you tonight.

    The Asians will be sending John Key and Billy cheques and valuables. So will the English immigrants with their flash Pound Note worth twice our measly $Dollar.

    The Students will be writing home to their far away countries telling Momma and Poppa how easy it is to kick people outta their homes in New Zealand.

    Add in the Americans who dump on us here. And The Canadians and the Muslims. And the Australian Banks. Is anyone meaner than an Australian?

    All the above people have declared war against The People of New Zealand.

    Make the wealthy politicians ashamed. Humiliate them. They are but dogs. They have lifted their leg on the people of New Zealand.
    .

    • Garibaldi 8.1

      OT .You have left out the Sth Africans. They will be piqued about that!

      • Observer Tokoroa 8.1.1

        .
        Hi Garibaldi

        You are right.! I forgot the South Africans. I think we need a few bullies don’t we.
        So I will include the South Africans next time.

        . I left the Srilankans and the Filipino out too. They do a lot of the nursing roles.

        . Having a chuckle is one thing, but good people being kicked out of their homes either through ruinous mortgages or high rents is not good. It is wicked. I am sure that immigrants understand that. Even if the real estate mongrels and the Politicians don’t.
        .
        .

        • TheExtremist 8.1.1.1

          Hey, I married a Saffa – I love em!

          Anyway, thanks for the support guys. I’m feeling confused about what to do. Will keep you posted as to how I find my new reality in this brighter future.

          • RedLogix 8.1.1.1.1

            Get out of Auckland. Anywhere.

            I’ve just spent a couple of days at a family wedding on the Gold Coast and while we all still love the city we grew up in, we all agree its gone and not ever coming back.

            Within a year or three of 14 people who were all born in the city, none will remain.

            Sorry but that’s how it is now.

  9. In Vino 9

    Umm… Am I the only one who wonders about the use of percentage figures? Is Key a crafty liar?
    Prices were low (relatively) at the start of Clark’s time as PM. But now the prices are huge.
    So Key’s quote of bigger percentage increase is deceptive. 40% of modern prices is a far, far greater amount than 102% of a much lower price when Clarks Govt. started.

    Look at the flat $ amount by which house prices are increasing, and it is clearly the current Govt that is guilty of bigger increases.
    I haven’t done the maths, but I suspect that this holds true.
    Worth a try, just to annoy some trolls.

    • Andre 9.1

      If you want absolute numbers, in January 2000 I bought my house in Titirangi for $415k, at that time my salary was around $60k (multiple around 7)

      At the peak of the market in 2007 or 2008, it would have had a market value around $850k, at a time when my salary was $85k, so a multiple around 10. By the time of the 2008 rating valuation, the valuation had dropped back to $755k (before Key taking power).

      Now, homes.co.nz reckons about $1,200k, and a salary around $100k, so a multiple around 12.

      Over that same time, the house I sold in Mt Albert in 1999 for $270k has increased to around $1,400k. (Damn, should have kept it as a rental). Neither house has had substantial work done to it over that time.

  10. In Vino 10

    To explain – it is my suspicion that even using inflation-adjusted dollars, house prices are now rising by more dollars per month than ever before. Key’s use of percentages is a deceit.

    • Blackcap 10.1

      That sort of goes without saying. If something doubles every 1o years for example:

      1900 $100
      1910 $200
      1920 $400
      1930 $800
      1940 $1,600

      Then you will see that the absolute figures get bigger every time (ie rise of 100 from 1900 to 1910, rise of 200 from 1910 to 1920, rise of 400 from 1920 to 1930 etc) but the percentages stay the same. So in a “rising” market your statement will generally hold but does not mean it is bad. It is better to work with percentages as that gives a better picture of what is actually occuring.

      • In Vino 10.1.1

        Wrong. For first-home buyers, the situation is now impossible because of the high $ required. That is what has actually happened.

        Only by using meretricious % figures can Key make it look like first-home buyers were worse off during Helen Clark’s time. The $ required were not so high then, even if the % rate was 102. First-home buyers could still buy.

        The percentage system has also widened the gap between rich and poor, because of the way compound interest works on wages/salaries. The rich get richer.

  11. Michelle 11

    If the gnats are so good how come I see beggars I haven’t seen before and how come I see homelessness I haven’t seen before. Where have you been living? sounds like a dream world the one with the brighter future we were all promised you really are a dreamer if you believe all that spin

  12. Nick Goodall 12

    Hi MICKYSAVAGE

    Your interpretation of the QV House Price is incorrect. The Reserve Bank have a good explanation of it here http://www.rbnz.govt.nz/statistics/key-graphs/qv-quarterly-house-price-index, however feel free to directly get in touch if you’d like to understand it properly.

    Cheers

    Nick

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