- Date published:
7:39 am, August 10th, 2016 - 163 comments
Categories: Andrew Little, brand key, john key, national, same old national, you couldn't make this shit up - Tags: homeless, homeless crisis
Call it a verbal flourish or a slip of the tongue but yesterday in Parliament John Key showed that when he thinks of New Zealanders he does not include the homeless or those that rent.
He said this in answer to a question posed by Andrew Little:
[I]f house prices in New Zealand were to halve, that is a war on the poor. It is the poorest New Zealanders who, in percentage terms, borrow the most against their houses. Metiria Turei has been telling New Zealanders—and the Opposition is supporting her—that halving house prices will actually see the poorest New Zealanders have all of their equity eliminated. That is a war on the poor.
Get that. Poor people own homes. They do not live in cars or sleep rough or have their families staying in garages.
Julie Anne Genter’s tweet perfectly summed up the absurdity of what Key said.
Key just said the poorest NZers borrow the most against their houses. Mate, the poorest NZers generally don't own houses. #planetkey #nzqt
— Julie Anne Genter (@JulieAnneGenter) August 9, 2016
Key has never cared about the poor so his attack on them won’t really matter
Key’s message will resonate with the poorest New Zealand home owners though.
If you have bought your first house recently with debt finance, the last thing you want to hear is politicians wanting to crash the market.
Labour needs to be very careful with this issue because we don’t want Key controlling the narrative on it.
Both Labour and the Greens seem to want to keep prices the same while inflation drops the prices. Won’t work fast enough unless wages massively increase.
It’s one of those things where the politics is damned if they do and damned if they don’t. If the politicians crash the market or promise to crash the market then they don’t get voted in and if they don’t then the market will crash anyway causing even more harm.
The Greens are pretty clear they want prices to drop, they just want to do it at a pace which doesn’t pop the real estate bubble we’re in and hurt people in the market correction that follows, which is pretty generous I think and maybe a little too utopian. But they at least have been clear that they want prices to drop.
Once prices begin to dip or even flatten investors do what investors do. They panic and press the sell sell sell button.
Which results in a crash.
Investor’s aren’t going to sit their and watch their investments slowly devalue. Once the tide turns they will bail in a hurry. Especially the foreign investors.
The Greens are in lala land if they think prices will drop in any way other than a hurry.
And this dilemma was created by none other than … Wait !! …lets hear it….
Yes! … the irresponsible ‘do nothing ‘ supposed economic masterminds of the Key led govt . Of whom its Finance Minister is actually named ‘The Double Dipper’ for very good reasons.
Mr ‘ Low Wage Economy ‘ himself.
Perhaps we could rename Key as Mr ‘Rock bottom House Prices’… I’m sure rich overseas investors and bankers could make a killing after shaking of all the small fry investors… Mr Rockbottom will be shaking his hands with pure glee..
I agree 100%
I thought this dilemma was created by the Auckland Council (in particular).
I suggest that you read the NZPC report on Housing Affordability. Work through all the recommendations.
Then you could work through the NZPC report on Housing Land Supply
Now if all those recommendations are acted upon, we would be well on the way to solving the housing problem.
Or we could post childish insults about the PM on blogs.
And why do you cry crocodile tears in what happens to home owners that are over-leveraged, huh?
You’re letting your neo liberal ideology slip, are you not?
Whatever happened to the condescending mantra of ‘ personal responsibility ‘ , …or did the neo liberal have to make an amendment to that in including ‘ too big to fail’ about 8 years ago ?….
What concern is it of yours that people loose their equity or their homes/mortgages? … you voted for a far right wing govt – you made you’re bed -now lie in it. You voted for it – now live it.
Why come on here pretending you give a damn when the very govt and ideology you voted for has demonstrated complete and utter failure?
And don’t bother to try deflecting this onto councils or quoting so called govt stats – the proof is whats happening in reality. This govt has had EIGHT LONG YEARS to get this under control.
And they failed. Miserably.
And as a reminder of the lies and broken promises – here’s another little gem for you.
And that happened BEFORE Key was even elected.
The bloody treasonous liars.
KEY invented childish insults and plays the same game every Question time and he is supposed too be the PM.
ACT mouthpiece likes ACT solutions. To everyone else it’s a toxic brand.
+1 Wild Katipo.
Being fair to the National Government, they have a small point that this crisis really did start brewing in the time of the Labour Government. That’s damning with faint praise though, as the problem became evident and an emergency under their tenure, so it’s still their responsibility to deal with it now. All they can really say is that Labour made their lot a bit harder by focusing on other problems.
And yeah, Bill English is the wrong finance minister for this problem, and they haven’t done anything that actually helps out tenants in this situation, their entire focus (as you would expect from the National Party) is on property owners. Hence why they don’t even realise that you’re not actually poor if you own property! Poor people are renting or homeless. Middle class people are renting or own modest properties. You have to be in the wealthy segment to even own investment properties IMO, not that that’s a bad place to be, but it tells you who the government is concerned with and how out of whack their priorities are.
Uh, not necessarily. It depends on the trend.
Some investors will bail at any sign of a decline- true. The Greens are in fact counting on that to cool down the market. But some will hang on if the decline in capital value isn’t too steep and the rate of return is constant. (ie. if house value drops but rental prices stay the same, many investors will hang on to their rental properties precisely because it’s more economical to hold on to them in case their capital value goes up again and keep getting the same amount in rent in the meantime)
Reduced capital value would also mean there’s more room for pro-tenant rental policies such as a rental WOF in the future, because people aren’t going to want to flip their properties for someone else to manage if they would take a loss on their initial investment to do so.
I agree with you that the price drop will LIKELY be sudden when it happens and that the Greens are definitely deluding themselves about having a gradual decline to the bubble rather than popping it- in my view it’s better to pop it ASAP as the fallout is smaller the earlier you pop a bubble, and the correction from any over-correction in dropping prices is quicker.
But you’re wrong to say that any gradual drop in capital value of investments will immediately cause a panic, or that it’s impossible to deliberately lower the capital value of investment propetries without doing so. The issue is that for most investments where such panics are common, the capital value is directly associated with the rate of return, (ie. the capital value of shares usually bears a fair relation to dividend rates, with the variance usually due to confidence that dividends will stay the same or rise) but for houses that’s not necessarily true- often the rate of return (ie. rental prices) is fairly constant compared to capital value, and varies more on factors such as location relative to the job market, heating efficiency, and amenities than it does on the actual state of the house or what it’d sell for.
Its also important to consider the role of the lenders in that event as well…..if the equity ratio falls outside it’s requirements what the investor wishes to do can become irrelevant.
That’s true enough, although most savvy lenders would be looking to renegotiate terms for higher interest under those circumstances, rather than foreclose, as given the rate of return hasn’t decreased, the equity drop just gives them a chance at a larger slice of the pie on the investment.
The real problem is what happens to middle-class and wealthy home owners who only have the mortgage-versus equity equation, and whose capital value is far more relevant to them. And the answer is that the government will need to offer some assistance and interfere in the market so that people who do go underwater are treated fairly, and so that those who don’t can still afford to hang on to their homes.
If we can get out of this bubble without middle-to-upper income voters in our biggest cities become housing-insecure like the rest of us who live in Wellington, Auckland, or Christchurch, then things will be fine for whoever’s in Government at the time. I have no confidence that National will manage that, but if Labour can admit that prices WILL drop, and that it’s good that they drop to a reasonable degree, then I’ll have confidence that they can handle it. But Labour can’t stick their heads in the sand on the economy like National can, it’ll cause them to lose because they’re already at a perception disadvantage on economic issues, despite actually being the more economically savvy major party.
Labour needs to be very careful with this issue because we don’t want Key controlling the narrative on it.
Too late for that, Turei’s brain fart has locked that one in, it’s going to be endlessly repeated by Key in 2017.
The housing market will be in trouble by then.
John Key is a traditionalist so I hear, so much so that he yearns for former days when a hard working expendable peasant was just that – a hard working expendable peasant. Hes a real believer in hard work will set you free. Especially after he reaped the benefits of growing up in that ‘nasty socialist state’ called New Zealand.
Therefore a he had a film commissioned to demonstrate his ‘ cusp of an exciting future’ , – similar to Leni Riefenstahl’s ‘Triumph of the Will.
Just for you.
You are being childish.
I’m sorry but the selfishness and avarice demonstrated by the typical far right wing fanatical neo liberal extremist has more in common with the un-socialized child not wanting to share his toys or the sandpit – as does any ‘leadership ‘ shown thus far by successive neo liberal govts this country has had the sheer misfortune to have had to endure for the last 32 years…
And if it takes a film clip to demonstrate that selfishness , so be it. However, I would not expect you and others of you’re ilk to not take offence. As socialization needs to occur at an early age , so I’m told.
Generally, the poorest are paying the mortgages of those who do own houses. In other words, the rich are bludging off of the poor.
ding ding ding we have a winner.
“the rich are bludging off of the poor.”
some call it class warfare….
DTB, diamond truism ! ‘Feeding off’ works as well.
Exactly right Draco T Bastard.
Thats a statement you dont often hear “The rich are bludging off the poor”!
That sums up the basis of the NZ economy.
Well put Draco.
What do we expect, it’s not like the National party have ever in history been there for the poor. They are a party of and for wealthy racists.
But I think it’s good in that it shows how the elite/Nationalists are out of touch. Keep it up guys.
They’re the party of middle NZ.
Unlike labour who are out on the fringes.
Arn’t you worried that Key is that out of touch with reality he says extraordinarily stupid things like this?
His choice of words are probably not what I’d use, but I get what he’s saying.
The less well off of house buyers have probably borrowed the most and will be hardest hit by Labour/Greens house price crashing policies.
and nationals policy settings won’t crash house prices?….the only difference is when.
They might cause a bit of a correction as supply starts to catch up with demand, which is just the market in action, no real blow back for National and Key
Compare that to the other side who have openly stated they want to bring down the value of most peoples largest asset.
lmao….’a bit of a correction”….from over 10 times median household income,right….you keep your fingers crossed that bit of a correction happens after the election.
The “value” of most people’s largest asset is security of tenure. You are thinking of the price.
Germany provides excellent security of tenure, without the sweepstakes asset bubble mentality.
Yes indeed excellent, fucking excellent point there OAB…….the classic of the cost of everything the value of nothing.
BM It is going to be one hell of a correction! It’s not a case of if, but when, and and it is not going it be pretty. And it’s not me who is saying this.
The fact that the majority of NZ home owners now are retiring baby boomers doesn’t help. By and large they (and I include myself here) have had the best of everything. Free education, free, this free that, Guaranteed Retirement Income, and a 3% first mortgage from State Advances (ok all paid by taxes – but wages were comparatively much higher then an a man could earn enough to support his wife and family and buy a car as well as a house!) Those of my lot whose sole continuing education is the daily dose of TV1 “news” have no idea as to the actual state of the country they continue to reside in. They are as out of touch with the reality of life today as John Key.
These “home owners” (and I include myself here) are not going to be affected in the slightest by any massive correction. Their home will remain their home unless they have done the unthinkable and taken out a reverse mortgage to enjoy an extended cruise in the Caribbean! In which case them is the breaks.
The people it will affect are those younger ones who have tried to get a foot in the door – so to speak and borrowed heavily to put a roof over their head. In their case the government will need to put in place packages to support them and ease the burden.
As for those who have borrowed heavily to create a “portfolio” of “investment” houses – well stiff bickies!
Yeah Macro……music to these ears. The arseholes in the whole picture, fuck you, good job……the people with the babies…….yeah go hard for them. Those babies our future. Let’s hope those babies end up big in their souls. Knowing true aroha.
$750 000 mortgages are a liability not an asset.
It will take two lifetimes to repay it meconism and then some.
Tell me, if I invest on shorting an industry, and the government decides to take policy actions to grow the industry, are they deliberately trying to destroy my investment, or are they solving an economic and social issue?
Just because some people have begun to view their properties as an investment as much as they have as security for their place and lifestyle of residence doesn’t mean that they’re necessarily entitled to the current market value of that house as an investment, especially if housing is over-valued on an economy wide scale, say, due to representing untaxed income.
People who legitimately need assistance because correction of the housing market puts them underwater probably deserve it to keep their family homes. People who lose out on “investment” properties or lose equity in a home they actually want to live in in the first place probably don’t need our sympathy.
Oh Yes you’re hoping Big Munter.
Bullshit labour don’t want to crash house prices ,stop lying .
Off course they do, why else would you flood the housing market with at cost homes, that’s the whole purpose of Kiwi Build.
Turei even came out on National radio and said she wants to see house prices cut in half.
What I do find surprising is the lack of political awareness shown by both Labour and the Greens.
They don’t seem to be aware of the political damage they will undoubtedly cop by annoyed house owners as they see their tax dollars being used to devalue their house and largest asset.
To provide housing. That’s why you’d build at-cost homes. So as to see people housed.
As for your property “values”, love that money, keep smooching up to it. It’s sure to lead to a great outcome for you. Really. Honest. Go for it.
BM you’re a piece of shit as a person. Worried only about your ‘$ value’. What a mighty way to be ? What a social suspect ?
56% think labours housing plan is good ,so that’s all their current supporters , probably all the greens supporters , and a decent % of the voters that are going to leak away from national in the next 6 months.
Building Houses won’t crash the price ,it will stabilise the market, if that means people will have to stay in the same house for longer while they knock the mortgage down then that’s good.
“56% think labours housing plan is good”
Yeah I really doubt that. There is no way 56% would understand the policy or its consequences. They hear ‘kiwi” “build” “houses” and like it. ‘Kiwi is good. Houses are good. I mean I like my house. I can borrow against the equity to buy a new boat. yeah. So everyone should have that. More please.’
If the question was:
“Do you think the Government should intervene in the housing market to build thousands of houses in Auckland for the poor, underwritten by the State?”
.. the answer from many of those people would be hell no.
“Do you think the Government should intervene in the housing market to build thousands of houses in Auckland for the poor, underwritten by the State?”
“the answer from
many of those peopleme would be hell no”
But we already know the state of your ethical development. Arrested at birth.
I’m actually pretty sure that most of the people surveyed understood the policy at least as well as you did, genius. 😉
+1 B Waghorn
Their “tax dollars”? Are those the ones they get through exemptions with negative gearing? What exemptions do the renters get?
“Turei even came out on National radio and said she wants to see house prices cut in half.”
no she didnt – she suggested a slow gradual reduction
why do you keep getting this wrong?
because they pay him minimum wage to do so?
Yes she did.
“Green Party calling for house prices to be cut in half over time”
read the damn title!
then read the bit of text attributed to turie’s view on the matter
” Turei says the drop in prices needs to be done over time to protect Kiwi families and in a way that avoids a crash. ”
FFS! – this isnt the first time youve got this wrong either
Framu + 100
. But are we going to let BM run the blog yet again ? It is so tiresome to read his false nonsesnse. Comment after sick comment.
For Pete’s sake let us completely ignore stupidity – and allow the blog to fulfill its role of discussing issues and finding ways and means of forming good policies.
BM WILL BE TALKING absolute CRAP – in his COFFIN
. ignore him or her –
How do you cut prices in half over time?
The bubble is being fuelled by investors. They are in it to make money. Once prices begin to flatten or dip, they aren’t going to stand their and watch their investments halve in value over time. They will run for the doors and sell as quick as possible.
That will result in a crash.
What is “slow and gradual”? And how will she do that? And how will slow and gradual help affordability.
Three years is not slow and gradual.
Thirty years is.
So which is it?
This is the problem for politicians and house prices. They speak out of both sides of their mouths to different audiences.
And as we have seen with the proposed rejections of important parts of the Auckland Unitary Plan, central Government is not the most important player here. It is Auckland Council.
Sometime before the next election, go read their fucking policy for answers rather than bringing up straw man arguments.
Turei said something perfectly reasonable, and once again you pop a fuse because your language circuits can’t handle the fuzzy logic and imprecise wording that hu-mons use in verbal communication.
She was talking about 10+ years in her interview as a starting point. Which you would know if you had paid any attention to what she said.
It would also be great for every New Zealander if over that 10 year period wages doubled in real terms.
Saying it does not mean you can make it happen.
Prices will only come down at one speed.
Lets give Srylands the universal slow clap for all the crap he sprays around here.
then IGNORE HIM
. Do not let him tip anymore of his rubbish on The Standard.
. If you reader wants brainless crap go to the cerebal scrap heap and play there.
Decrease at the same rate they have increased would be more than fair.
Can’t have your cake and eat it as well.
What effect on house prices will the 100,000 houses that National is going to build in the next 4 years have?
Lol yes, good question!
is it not a bit to early for such vitriol?
you need a coffee as much as poor people need houses
They’re the party of middle NZ.
No they;re not. They’re the party of rich psychopaths.
And Labour is very firmly in the centre-right right where they shouldn’t be as there’s almost no difference between them and National.
No Draco TB – Labour is totally different from National – we care about our people, and our country. The Nats don’t give a stuff.
That may be true but their keeping to the failed socio-economic paradigm that they introduced in the 1980s puts the lie to them doing anything different.
How has it failed? It is responsible for the prosperity you enjoy. I suggest you watch the lecture on the origins of the modern economy by Joel Montreal.
The problem for New Zealand is that the foundations of growth have been undermined.
There is a link to the video under ‘recent posts’
It has failed absolutely and in detail.
In real terms NZers have been going backwards for thirty years, except for property speculators. The productive sectors that could have lifted living standards have been abandoned or allowed to stagnate.
It is not that conservative policies cannot improve productivity – but combined with dishonesty and unregulated speculation they never do.
The problem is the far-right tax criminals – traditional old school conservatives would have no truck with thieves. In NZ the thieves are in ascendance. It will cost the honest folk tarred with the same brush dearly.
It’s failed in multiple ways from environmental degradation through to increasing poverty.
No it’s not. The socialism after WWII is.
Just more propaganda that’s not worth the time.
Yes, by the failed socio-economic system that Labour brought in in the 1980s – the same system that you support.
Please tell TPPA-supporting Captain Mumblefuck this. He seems to take every opportunity to shit on the poor and beneficiaries from the front bench where Little keeps him pampered.
Labour may think of themselves as centre-left but they’re very clearly a more ethical and worker-focused version of the same capitalist market paradigm.
I would say it’s fair to call the current NZLP a centrist party. I wouldn’t say they’re centre-right, but I also wouldn’t even say they’re centre-left, either.
I know that many Labour activists believe that National doesn’t give a stuff about the country and its people. But have you ever thought that sounds to voters, particularly those who you are trying to persuade.
Surely with your experience you have. You must have had to stand on a doorstep to persuade a voter to vote for you who probably voted for your opponent in the last election.
In your comment above, you have just told them they don’t care either about their country or the people in it. It is at least conceivable they might think you have just insulted them. Probably not the best way to get them to vote for you.
I note that senior Labour MP’s try to avoid using that approach. They generally accept that MP’s of every stripe are there to do their best, as they see it. At least in public they know that insulting the opposing party that so many have voted for is also often seen as an insult to the voters themselves.
The best thing would probably be to smile and agree to everything they say while praising them as wonderful human beings. That would be the smart thing to do.
Well at least avoid insulting, even by inference, those who you are trying to persuade. For instance at the doorstep on tax issues I used to say that National’s tax policy would mean more money in your pocket than Labour’s tax policy would. I didn’t say Labour hated success or any stupid caricature like that. If I had done that (and the voter had previously voted Labour) I would have had no chance of persuading them.
You may recall David Cunliffe was mocked for his speech on the top of bus about the big end of town (or something like that). And you all know how well Labour did under his leadership. But he seems to learnt from that judging by his recent speeches.
“You may recall David Cunliffe was mocked for his speech on the top of bus about the big end of town”
that was an utter beat up, a fabrication – what he was criticised for was a figment of certain trouble makers imaginations
You don’t need to tell me how to make scones Wayne…….from your $500,000 a year household Wayne. My goodness, you are such an upper-class twit Wayne. For your weakness.
50% of the vote = middle NZ.
It’s time for your reality check: ~30% of the electorate doesn’t even count anyone under eighteen.
It’s clear that so far as you are concerned people who don’t own houses and vote for right wing political parties, aren’t people, and you appear stupid enough to believe an electoral cycle is a demographic indicator.
Your bigotry and stupidity reflect poorly on you.
it was 47% genius – and only 33% of possible votes
and getting votes off someone doesnt mean you actually aim to represent them
do some basic math and logic next time
that shovel is still on offer – even though you’ve started digging a different hole
Empty rhetoric. On Planet BM, “middle nz” doubled in size between 2003 and 2008.
“Middle NZ” – currently increasing at 60,000 per annum.
Thats your electoral margin right there.
‘National is the party of middle NZ’? Key plans to finance $3B of tax cuts by privatising our entire State housing stock. That’s not a ‘middle’ policy – it’s the policy of an ideological fanatic.
nah, that is a policy for rich people who have no issues bleeding poor people dry for their profit.
True that too.
middle what BM
Middle NZ, where all the votes are.
Oh – you mean the Middle Kingdom.
Here’s three numbers, BM:
1 2 3 Mean=2 (Median=2, no mode)
Here’s another three numbers BM:
2 2 2 Mean=2 (Median=2, mode=2).
Now which of these two sets of numbers best represents (a) the variability in the NZ population as a whole, with respect to, oh i dunno, how about ‘income’ for example) and (b) which set best represents the fictional “Middle NZ” that you are waffling on about?
If you don’t get it, Tough!
It is middle NZ that are the new poor under National during the last 8 years – increasing dependence on welfare whilst wages not keeping up with increasing costs, and being increasingly deprived of social necessities such as security and health.
Between 2008 and 2016, wages increased 26%. Prices increased 16%.
What data are you looking at?
Can you show me your “security and health” indicators?
All health indicators are up. Immunisation rates, elective surgeries, all of them.
Crime is down. Resources for the intelligence services are up.
Stop. making. shit. up.
wheres the wage data at that link (serious question – couldnt see it)
and is it average or median, and is it inflation adjusted?
This tradingeconomics outfit is amateurish in the extreme – their numbers are not robust.
Elective surgeries have massive hidden waiting lists where people can’t get the surgeries they need. Crime is not actually down in many areas.
Stop. Making. Shit. Up.
I despise people who spend their time working for the elite.
It’s all spin Srylands.
It’s revealing, isn’t it: the Prime Minister simply doesn’t regard ~35% (and growing) of the population as New Zealanders.
They can never be tenants in their own country because it isn’t their country.
Who are the 35%?
People who don’t own a house. Correction: people who don’t live in a house they or an immediate family member owns.
Renters and the homeless.
I don’t agree that renters should be included as homeless – but perhaps including them is the best way to fudge the figures of how dire it is to live in New Zealand and how evil the government is.
its a post on home ownership
…Renters are almost always people who don’t own property, which is all OAB was saying. As a renter I’m perfectly happy to be grouped together with the homeless in terms of discussing the two-tier society we live in between what is essentially the landed elite and the renting/homeless underclass. 😛
Meanwhile, on Earth, your witless effluent bears no relation to my comment.
Another illiterate wingnut. Not my problem if you can’t parse a sentence written in plain English. Perhaps all your opinions could be repaired by some comprehension lessons.
Given our crappy tenancy laws, renters in this country are only the stroke of a pen on an eviction notice away from being homeless. It is just they can afford a somewhat better class of homelessness. They might have a roof over their heads but in very few cases can it be called a home. They need to be included in the numbers.
Keys carefully choreographed rags to riches myth was designed to allay the natural fears that rich men don’t care about anyone else but themselves and are in this game to enrich themselves and a few close mates. In other words put aside your distrust of John Key just because of his obscene financial wealth.
Well this out of touch misfire pulls the curtains down on that bullshit. He is out of touch, he doesn’t care about the less fortunate and never did!
It’s rumoured than when he first heard the phrase “family values” he thought it was investment advice and tried to buy some.
well i guess the PM is speaking for the poor people living in places like Parnell as he does, that have their houses mortgaged to the hilt to keep up some life style cause you know a boat is needed, a submarine on wheels for the lady of the manor, private schools for the kidlings, and holidays overseas and such. And obviously these poor people that the PM knows would of course suffer greatly if their property values would be halved. Oh that humanity, and lets not forget to think about the children, like his son who would maybe need to get a real job if the property values of Dads portfolio where to loose value and such.
He is such a good PM this John Key Guy, would you not want to go on the piss with him?
Here’s the thing though about our property market. It’s in a big bubble. A very big very inflated bubble.
Bubbles are driven by greed, and fuelled by debt. This one is fuelled by private debt, levels which are now higher than 2007 just before the GFC.
Once a bubble is fully inflated there is only one result. They burst.
I’ve never seen an example of a fully inflated bubble which is successfully gently deflated by government or bank intervention. They all burst. And it’s rather messy.
A most recent example, the Chinese stock market. From it’s peak in June 2015 to the last low on 27th of January this year, it lost 49% of it’s value. The crash made headlines all around the world.
What was very interesting was that when it was crashing the CCP intervened in a way that no other government can do. They halted trading, issued propaganda, instructed government bodies to purchase equities and pumped money into the market. Yet it continued to crash. IMO this recent example, so strong and so stark, should once and for all put to rest the idea that governments and banks can somehow halt falling prices.
Once greed turns to fear and panic sets in selling pressure forces prices down hard.
Whoever is in power will get the blame for the crash. But in this instance the blame really should lie with the party who was in power during the bubble formation. Because it is their policies that directly led to the formation of the bubble.
Good idea but the problem is that the policies have been put in place by various governments over the last thirty years – ever since Labour instituted the Greed is Good paradigm of neo-liberalism.
Indeed, this isn’t a simple economic factor we’re talking about, housing is emergent from a lot of different market realities.
You’re right of course.
The blame really lies at the feet of ideology in this instance. And human greed.
Because Labour started it, National accelerated it.
Which begs the question, why should we expect Labour to do anything differently?
“Which begs the question, why should we expect Labour to do anything differently?”
Damascus moment……though a private one perhaps?
If Labours policy announcements were to be implemented as outlined they could certainly be considered doing something differently.
Because Labour today is not the same Labour of 30 plus years ago.
Just a little education for you Lara… part of a comment of mine yesterday:
I’d swallow that more easily if they were more upfront about it.
I’m still to see Labour come out and publicly state that Rogernomics was a failure, and make any apology to their voters for their massive betrayal.
I lived through those years as a Labour party supporter and member. The betrayal was severe and real.
Watching David Cunliffe be sabotaged by some of the people who were part of that betrayal looked like (to me anyway, maybe others too) those neo liberals within Labour are still holding that line. Because Cunliffe is very much old school Labour values, not neo liberal at all.
Back in 2014 Forbes economic analyst Jesse Colombo predicted
“NZ bubble ‘going to burst”
Rubbished by among others, Steven Joyce.
“Minister bursts analyst’s bubble”
“Bernard Hickey gives 6 reasons why Jesse Colombo’s warning in Forbes about New Zealand’s housing bubble bursting disastrously is over-blown”
Jesse Colombo’s response to Steven Joyce.
“It’s Not A Bubble Until It’s Officially Denied, New Zealand Edition”
Anybody out there seen current numbers for the median house price in NZ and in Auckland, not the average. This can be more revealing about how house prices are going.
The same is true of wages-the median is better because it is not inflated by the 5% massive earners at the top (unlike the average which is). In fact (and apologising for being off-topic) has anyone got info on the current median wage too?
can only find this – and from the government no less so it must be true
also from the govt
and this from the 4th of Aug.
and then this from reinz
Do Nzers want to become tenants in their own country ?
A simple question ,that should be repeated by opposition MPs at every opportunity .
Keep Key and his media poodles (Hi Tracey and Claire) defending the indefensible.
About 30% of people (at least) will always be too poor to own houses. Trying to nudge them in that direction will just make them poorer.
Much better to change tenancy laws to give them security as renters. Then introduce decent contributory super plans to given them retirement incomes. All that money they would pay to banks in interest over 30 years could be saved for retirement, matched by employer and government contributions.
Quite a few of them used to own houses but continued employment insecurity ‘aka labour mobility’ obliged them to sell.
Much better to remove the statute of limitations on fraud and spend the next few decades removing entrenched corruption from NZ.
Maybe those 30% (40%, 50% ahhh, actually 60%) are too aspirational. Perhaps a house is a step too far.
Start small, work your way up the ladder.
Maybe a single garage? Or a people mover, perhaps HNZ and WINZ can get together and come up with a more comfortable park bench provider they can refer their ‘clients’ on to
Y’know, get onto the lower rungs of the ladder.
read and weep fool.
actually whats the point. DNFTT.
Stop being rude and childish.
The poor need quality accommodation. And secure tenure. They also need decent retirement savings. What they don’t need is 30 year mortgages they can’t afford.
Just throwing this out there but maybe they need enough wages that they don’t have to be considered the poor. I mean its nice an all that you acknowledge a roof over their heads is important, but what sort of society are we where our goal for progress is to commit the poor to staying in their current circumstance but at least be comfortable there. you never know mate. It may just work out to better for the economy over all if more people had more disposable income and a more secure home environment as opposed to the continuous uncertainty that exists when you are renting.
Raising the Minimum Wage Would Help, Not Hurt, Our Economy
Higher Wages for Low-Income Workers Lead to Higher Productivity
You saw the post about employers not paying their employees Kiwisaver obligations?
“The poor need quality accommodation. And secure tenure.” – Like HNZ used to do, before the Govt YOU support decided to kick people out because of trumped up P scare charges. Or do you mean secure rents for landlords? Steady stream of free money, sounds very ACT/National actually.
+1 Gangnam Style
Yep, so let’s build a hundred thousand state houses then. Thanks for correctly identifying what the government should do.
The vile Key Kleptocracy is delivering none of these things. Which is why it is toast.
And you can stop being rude and childish yourself , Sonny Jim.
And as for your carefully plucked stats from a govt that – yes! – is elected to not only pass legislation , but legislation in its peoples own best interests first and foremost – yet endorses a ‘ do nothing on purpose’ stance including irresponsible runaway immigration policy’s and its totally incompetent housing policy’s – we can see here graphically where Key gets his ideas from.
This disgusting and appalling situation has been known for a long time by this govt yet it elected to hide it under the mattress until it was caught out by the media- and even then had the temerity to smear a Marae that was actually doing something – as well as the Salvation Army and others speaking out just too loud for their comfort.
And now that they have had their fingers burnt and been caught out in their surreptitious skulduggery in trying to enable foreign investors and domestic slum landlords as a vote catcher , shills like you try and deflect it back onto councils. I guess that goes to show how you types believe in a small govt – code for no governance and no restrictions with the end result being this sort of social time bomb.
So what does one ( of the three ) incompetent ‘ Ministers’ of Housing do?… goes ahead and offers $5000.00 cash to get out of town. ( And you neo liberals dare to lecture US about WASTE ??!!??) – and that 1 week before the ‘Finance Minister’ ( The Double Dipper ) announces his budget !!!
And the Double Dipper wasn’t even aware of it !!!!
THAT’S !!!… how much stock we can put into your precious ‘ govt’ statistics.
Fuck off, S Rylands, you bludger. Stop bludging hard-earned taxpayer dollars by telling lies in the reports you sell to the National Party before objecting to “rudeness”.
Paying lip service to small government, then committing blatant policy fraud. What a piece of shit.
It is “srylands”
You are either lying or mistaken. I have never worked for the New Zealand National Party in any capacity. Neither have I contracted to provide the National Party with services of any kind.
You consistently are nasty and rude. And you simply make things up to smear. Dirty politics of the most vile kind.
One question: when Rebstock bludges taxpayers’ money do you seriously think that obscures the identity of her employer any more than it does yours?
quality accommodation can be provided in centralized managed locations poor people are poor because they want to be poor .
. I owe you an apology. You have put some good ideas into the debate.
. I spoke harshly of people who are just repeating political propaganda. We need solutions not politics – in my opinion.
Whatever “ideas” S Rylands brings to the debate, the solutions he proposes are the same failed fantasies: cut taxes for the rich, slash government spending. If it weren’t for the National Party needing elaborate lies to justify its legislative vandalism, he’d be unemployed.
I’m generally not impressed by srylands ‘solutions’ to things either.
I thought one of the main ideas of the left was to build more state rentals, presumably for people who can’t afford to own a house.
So why abuse srylands when he appeared to agree with that proposition, albeit by reform of tenancy laws. At least by implication he is actually supporting the idea of building more state houses. Because there is definitely a group of people who can only afford income related rentals (25% of income which frequently results in rentals of $100 per week) but who cannot afford to buy a house.
There would barely be a house in New Zealand that would cost only $100 per week. Annual rates, insurance, maintenance in the cheapest location would be $3,000 or $60 per week. Even at 3% interest on a 30 year mortgage, a loan could only be $65,000. With a 10% deposit that implies a house price of $71,000.
Such houses don’t exist. Though perhaps papakianga houses might fit in at that price, assuming essentially free iwi land for iwi members.
Identifying problems is easy when the only tool you have is a hammer.
I’m not giving S Rylands a dose of his own medicine for the lip service he pays to good outcomes.
As a partisan crony with a massive conflict of interest, surely you appreciate that.
PS: I am not “the left”. Are you capable of authoring a comment free of false narrative?
“So why abuse srylands when he appeared to agree with that proposition, albeit by reform of tenancy laws.”
Because abuse is the way they roll.
I am all for more affordable houses. The way to achieve that is now well known. There is whole menu of actions required. It is simply not happening quickly enough.
But not everyone will own houses. I have rented houses previously before I became a house owner. The biggest drawbacks were being treated like shit by landlords and the lack of security. These two are related. I would change tenancy laws to make it much more difficult for landlords to change tenants. If you buy a rental you buy the tenant also.
There is no way the current government is going to to this. Property rights are sacred to them and social wellbeing is secondary. They’ve been proven to be unwilling to protect and promote stable communities, instead encouraging movement (of undesirables) as some sort of roll-of-the-dice policy where they hope for a better outcome rather than plan for a better outcome.
Increasing numbers of young responsible families are finding themselves in the long term renting environment, literally waiting for the 90 day letter or worse, the 42 day letter. Young families are too scared to bring up faults or requests of the agent or landlord in case it catalyses thoughts of a sale or termination. Young families are too scared to ask what the owner intends to do about the insulation required by 2019 for fear of the same. Meanwhile they are stuck with monthly winter power bills of $300- and $400- plus while landlords just ‘wait and see’.
With fast dropping home ownership, tenancy law reform is crucial to a healthy New Zealand society and the only way you are going to get it is to change to a socially responsible government. One which works with local councils on planning instead of blaming them.
Oh noes, the smallest government (as measured by intellectual capacity) in NZ history, and still the invisible hand fails those who need it most. It’s almost as though the entire house of cards is completely without any foundation!
Quick! Clutch at some lies!
I ask you again to refer to me as “srylands”. You show a lack of respect and are deliberately being obtuse. This is the fourth time I have drawn your attention to this in recent weeks.
I urge you again to stop bludging taxpayers’ money and get a real job.
A person who lies as often as you deserves sustained and unremitting contempt. You lie in a bad cause, and your fictions pathetic transparency does nothing to mitigate the essentially malicious character you have earned.
I think he might be copping a bit of abuse due to kind of contradicting the most effective policy further up the thread.
“If the question was:
“Do you think the Government should intervene in the housing market to build thousands of houses in Auckland for the poor, underwritten by the State?”
.. the answer from many of those people would be hell no.” -SRylands
Nobody is really in any doubt that reforming tenancy laws pales in comparison to state housing in terms of potential tenant security and ability to maintain reasonable rents over the longer term.
umm it is you who is suggesting that government spending be “slashed” by your calls for the Government to eliminate debt. How are they going to do that without an austerity program?
OAB you don’t know how lucky you are.
I would like to see a somewhat faster debt reduction, but it is not urgent.
There are about 50 people in NZ who qualify as “rich” and I have never suggested their taxes be reduced.
It is not about “slashing” expenditure anyway. It is about the effectiveness of programs. Steve Maharey and Trevor both showed you could increased spending on education by 50% and achieve nothing.
So which of my ideas don’t you like? The ones to address climate change? the ones to deliver high quality education to poor kids?
Labour could, and should, grasp opportunities to propose policy responses that will fill the big gaps the Government is leaving open. On education, on housing, on the environment, on urban planning. I don’t understand what the problem is.
And BTW your implication that I work for the National Party and tell lies is defamatory. I have never worked for the National party. I ask that you withdraw and apologise.
I note that you do not deny telling lies. Why on Earth would any NZ government not formed by the National Party need an ACT-infested sophist on the books?
Edit: it belatedly occurs to me that your response (“you’re a liar who works for the National Party!” – “I do not work for the National Party!”) was intended as a joke, in which case haha, I got there eventually.
As for your lie that the only way a government can balance its books is via the negative side of the ledger, doesn’t it bother you that the “advice” you bludge money for is so transparently blind in one eye?
I doubt I’d agree with much that srylands writes, but I agree that …
…is part of a decent housing policy. I don’t think the NActs are advocating that. srylands should have a word in their ears.
The trouble for the NAct types is that a lot more must also happen to make low income renting viable – one would be rent controls (at a guess, is this were to happen, the number of people choosing the rental option – see Europe, Singapore etc. – would increase). With secure, long term tenancies, safe and healthy housing requirements and affordable rents eating into profits, who would be the housing provider if ‘the market’ decides that there are better, more productive investments out there?
Housing in this case changes from an investment and/or a commodity to be traded to … what?
The government has signed up to healthy housing as a right. As with medical care more complex than a sticking plaster, and necessary social services, the ‘market’ cannot provide for the everyones who are most in need.
No but National and their rich mates do want NZers to become serfs to the rich.
Labour did say John key and his National government will flog off anything that is not nailed down and make Kiwis tenants in their own country.
Mickey, how is the Unitary Plan debate going at Auckland Council?
The Housing bubble may burst by itself or house prices and therefore equity may drop because of bank, Reserve Bank, or Government initiative. (Or people power or a buyers strike etc.)
If it is caused by intent then some protection could be written into law disallowing banks from foreclosing on house owners with negative equity.
But that is the Gamble, the bubble may burst or the values may be lowered in a controlled manner.
So those that have obtained a huge mortgage to obtain a house that has has the value drop by 40% (Brash suggests a drop of 66% is required).
If the owner stays living in that house then he is housed in the same house he she was prepared to pay. Some collateral damage will be felt in this necessary devaluation so that NZERS can live in their own country. Win some lose some.
It may happen by itself WITH NO PROTECTIONS.
With some house owners having a small mortgage and large equity a drop in house values will not damage their ability to own their house if it is down to the remaining mortgage they hold on the property. Everyone’s value will drop simultaneously so a comparative equity relativity will still exist (a seller will not require as much equity to re buy in the same marketplace).
So do not fear the crash. Like Rachel Hunter said: “It may not happen overnight, but it will happen” Key or no Key.
It is a battle in the war against crazy neo-liberalism. But some protections need to be instigated NOW!
Julie Anne Genter @JulieAnneGenter Aug 8
“Key just said the poorest NZers borrow the most against their houses. Mate, the poorest NZers generally don’t own houses.”
Just build some bloody houses’: Little
Parliament is back after a four-week recess and Labour is attacking the government over the housing shortage.
Party leader Andrew Little opened question time on Tuesday with trenchant criticism of the government’s policies, saying they were failing to deliver affordable homes.
He said Prime Minister John Key should “get off his backside … get in behind Kiwis who want to own their own homes and just build some bloody houses”.
Mr Key said New Zealand was in the middle of the biggest housing boom in its history.
“We’re on track to build 85,000 new houses in this term of parliament alone,” he said.
“The construction industry is bigger than it’s ever been, there are 40,000 more people in it than two years ago.”
Earlier on Tuesday Mr Little told reporters Mr Key should sack Housing Minister Nick Smith because he had totally failed to deliver homes that were needed.
Mr Key rejected that, said he still had confidence in Dr Smith and expected he would continue in the housing portfolio through to next year’s election.
“We acknowledge there is pressure in the housing market,” Mr Key said.
“The government is working very hard to address that but it’s not something you can change overnight.”
The National government commissioned a study to lie that uncontrolled immigration is not a problem.
“Migrants not to blame for Auckland’s house prices, study finds”
Migrants are having a relatively small impact on Auckland’s rising house prices, a new study says.
The research paper, commissioned by the Government, appears to contradict recent claims by Opposition parties and others that immigration is to blame for house price inflation.
The study instead concludes that the main drivers of rising prices in the city are low interest rates, investor demand, capital gains expectations and New Zealanders returning from overseas.
Any changes to immigration policy by the Government were therefore “unlikely to have much impact on the housing market”, the authors of the Waikato University paper concluded.
Limiting new arrivals could even make the situation worse, they said, because it would reduce the number of skilled migrants required to ramp up housing supply.
The Ministry of Business, Innovation and Employment (MBIE) commissioned the research earlier this year to get a clearer picture of the effect of record migration levels on housing in Auckland.
Net migration levels reached 68,000 people in the year to June. A large proportion of arrivals are settling in Auckland, where housing demand is outstripping supply. That has prompted calls to curb immigration.
The Reserve Bank recently told the Government to consider reviewing its immigration settings to stem rising house prices.
The Labour Party and New Zealand First believe migrant numbers should be immediately reduced to ease the pressure on jobs and housing.
The public also appears to be in favour of new immigration controls. A Newshub poll released last night showed that 60 per cent of New Zealanders want the Government to let fewer immigrants into the country.
But the Waikato University study, which draws on existing New Zealand and international research, reinforces the Government’s position that migrants are not primarily responsible for high house prices.
“Overall we find that … visa-controlled immigration into New Zealand, and specifically into Auckland, in the recent past has had a relatively small impact on house prices compared to other demand factors,” the study said.
“Consequently, changes in immigration policy, which can impact only on visa-controlled immigration, are unlikely to have much impact on the housing market.”
The authors said growth in net migration was largely driven by student and temporary working visas, who were less likely to buy houses.
The fall in New Zealanders leaving the country in recent years has had much bigger impact on rising house prices in Auckland than the rising number of new arrivals, they said.
The study also found that migrant investors were not having a disproportionate impact on Auckland’s housing market because they were mostly buying commercial property or a single house.
While the study did not look specifically at potential changes to immigration policy, it said any reduction in migrants could do more harm than good.
“It is plausible that any policy-driven reduction to the inflow of migrants to offset housing demand is likely to exacerbate skills shortages…”
Finance Minister Bill English yesterday ruled out any changes to immigration settings, saying that businesses were still facing skills shortages.
The regions and the construction and IT sectors were “crying out” for skilled workers, he said.
“We’ve got to keep in mind here that the biggest single driver is Kiwis staying home, and we regard that as a measure of success.”
But Labour’s housing spokesman Phil Twyford said this was “total spin” because returning New Zealanders made up just a quarter of net migrants.
The Government needed to “throw off its ideological blinkers” and cut immigration numbers, he said.
“The Reserve Bank couldn’t be more explicit. There are economists almost every day coming out and saying the Government’s got to look at the effects of immigration on the Auckland housing market.”
– NZ Herald