I'm inclined to agree. Shortages are simply an intractable backdrop against which interest, and monetary policy generally, serve to exacerbate the problems that shortages cause.
owning and renting are two different things. And renting to use for a while should never cost more then owning does, and currently renters pay the mortgage, the interest, and what ever else the owner wants out of the property.
btw, my mortgage that i pay currently is 200$ per week.
you can't even rent a dog kennel for that amount anywhere in NZ.
I reckon, my mortgage is $210 a week, if I rented the same house it would be double, and with no return. Free insulation, cheap rates, I could also halve that if I got a flatmate (which I may do once my kids leave). I don't take this for granted, I realise I'm one of the lucky few.
Have to strongly disagree with you there RL, we are in our first own house (nearly freehold) after renting for 30+years the last 15 of those with three children, owning your own home has for us probably been pretty similar, maybe a bit more expensive but not a lot, and especially when you take into account all the benefits…the main one is not having to deal with Ma&Pa landlords they are generally like spawns from hell, they have made renting a fucking nightmare, it is awful, and no country that has the resources NZ has should let it’s citizens endure that type of life…welcome to free market liberalism I guess, markets operating just as they should…Thanks David Lange.
Gone are the old days when you would rent a house and live in it for years and hardly be bothered as long as you paid your rent and maintained the property…our last ten years of renting were a disaster (with one exception) as far as landlords went…even if owning a home was/is more expensive, how can you put a price on the endless stress and worry and more importantly the hundred of subtle ways it damages and undermines children having little to no long term home security.
Owning a home provides security that no amount of rental law cannot.
The trouble is that house prices do not reflect the cost of owning a home. They reflect the cost of the expected medium-term capital gains (post bright-line). It wasn't a problem when they reflected the expected gains upon retirement and downsizing, but now who honestly expects to be in that house for thirty years? Or do they expect to flip it in ten years or so?
Agree with the security bit. I've seen the pro's and cons of home ownership debated at length in New Zealand literature. They're pretty even.
I'd like to see some proper policy work done on the effects of Andrew Little's current extension of the Bright Line test, and the likeley extension to 10 coming up. Doesn't seem to have made much difference to house prices at all – so if it's not working as intended it should be removed.
Perhaps that is a point of the Easton paper – no one issue will solve the housing crisis. After all the current presumption of intent is flawed, but reversing it would mean that gains up to the time legislation takes effect are likely to remain tax free, so most people would not pay much tax for many years; but owners of rental properties may hold for longer to defer the payment. Requiring a bigger amount of real (not borrowed) equity may be possible , but that would be easier if we increased wages so that the government does not need social welfare or Working for Families to enable new home buyers to afford to live with a family.
I have a good landlord. Doesn't put the rent up every week etc. . But a batten holder wore out 8 months ago – and it only got fixed last month – no bedroom light all winter. Rentiers are oppressors, even the the good ones.
And of course the inability of contemporary NZers to afford their own homes is the final disproof of neoliberalism. It was supposed to make us more prosperous if you remember – on the contrary, it has impoverished us. Voters, looking at neoliberals think: "Were you really that stupid that you swallowed the hype in spite of our warnings? Or were you just corrupt?"
Because their speculative growth is entrenching even more deeply NZ's trans-generational class system.
Even if a full-time worker can rustle up a 10-20% deposit, I strongly suspect most NZers probably wouldn't earn enough to service the mortgage on a median-priced house.
For me, it was break-even with no margin for error five years ago. Now? It's a joke. And I have a good job, no dependants, and a retirement fund, but houses are more than twice the price. Almost literally – I looked up that house recently. It's gone from $230k to $450k. Has any actual worker's salary doubled in five years?
I'm kinda waiting for evidence of the K-shaped economy to hit.
And it's indisputable that salaries haven't kept up with house prices.
But if Easton had tracked house prices, salaries, and national home ownership, he would have seen no collapse in average ownership at all. Even as prices skyrocketed.
In fact we're still better than nearly all other developed countries for home ownership.
Easton calls it speculation. 65% of us call it risk management.
Easton’s analysis is sound and he is not alone with the conclusions….it has been well canvassed and the only major dispute is around to what degree other factors impact.
stating 65% mean sweet FA unless you also state from where it came and what the trend is…as you well know.
and I too have checked…"and falling"
"Home Ownership Rate in New Zealand is expected to reach 64.29 percent by the end of 2020, according to Trading Economics global macro models and analysts expectations."
And as outlined below there is more to it than just economics – it's the relentlessly increasing age of first marriage that also means that 20-29 age group just aren't interested in buying homes.
Another factor is the rise in divorce rates – usually one partner will finish up renting for a period afterward.
This doesn't discount the obvious affordability issue in play – but it does suggest there are often more factors involved than the headlines make out.
Of course, unmarried people dont buy houses….how could i miss that.
And the 20 -29 year olds arnt interested in buying homes….because they increasingly cant afford them….the same applies to those in their 30s…and the ones that eventually can take considerably longer to raise the increasing deposits.
Those decreased ownership rates in the cohorts coming through are going to have a major impact on the total ownership rates as the proportionately higher ownership rate cohort approaching 70 move into care/die
30 per cent of homes are owned by people who only own one home.
Another 13 per cent is owned by people who have two homes. Six per cent is owned by people who have three homes. Ten per cent is owned by people who have between four and six homes.
And another 10 per cent is owned by those who have between seven and 20 homes.
I would argue one can own multiple houses but only one is ever your home but that's an aside.
To do a real comparison a similar breakdown as above is needed for the historical data.
And that's households (where homeowners are a member of the household). Only half of individuals own the home they live in, directly or indirectly (same link, p34).
Additionally, although $value of lending to first home buyers peaked last year at 20%, the proportion of actual borrowers at the time was 12%.
The longer this situation goes on, the more nailed in the inequity will be.
If by "generation" you mean the peak in the early 1990s, I'd agree.
If by "generation" you mean back to the 1960s when everything about New Zealand was supposed to be our egalitarian apogee, no not really it's the same.
Yup – the demographics don't lie. Before Rogergnomics the median age at marriage was around 23. After it was 33. Poverty. The social science folk can give the lie to every pretense of good governance.
That would be of course because the data aren't set up to capture it.
Measure GDP alone and you could imagine Rogergnomics as something other than a brutal failure. But you would be letting data trickle through your fingers – politically convenient no doubt.
The first world nations have been lying to themselves for a good while now – with falling "labour force participation" instead of unemployment and so on. The lies are getting pretty thick. If everything were apples home ownership wouldn't have had to fall, nor would child (the only politically acceptable poverty) be so high.
All those suicides blamed on mental health too – same trick the Soviets resorted to. Our governors have no standards at all.
Hardly – I'm not trying to extend my assertion around the world – it was you that had to reach beyond NZ to grasp at the straw that because other countries experience lesser forms of the same graphic failure, the brutal sham that was Rogergnomics was somehow excusable.
We all understand the appeal to the vanity of policy makers of a ‘great leap forward’, and I use Mao’s term deliberately, because Rogergnomics was every bit as hubris-laden, destructive, misguided, and undemocratic.
Liberals when their desire for ‘freedom’ becomes a repudiation of society and manifests as libertarianism and neo-liberal economic theories.
So nowhere have I attempted to excuse Rogernomics – that’s a just a figment of your imagination. But to attribute everything bad that ever happened in this country to this singular cause is another kind of fail.
It isn't the price of the house that is relevant to the person buying it. It is the cost of servicing the mortgage. Here are a few graphs on housing costs. Between 2008 and 2019 the average household income in Auckland went up by about 50%. Thar was from $61.4k to $95.2k. The average weekly payment for people who had a mortgage only went up by about 20%. That was from $384/week to $460/week
When you look at the cost of buying a home the most important factor is going to be the mortgage interest rate. First mortgage rates in 2008 were about 8%. They are now, if the ASB quote in front of me is typical 2.29% for a 1 year fixed rate.
The second most important factor is going to be the deposit. If house prices go up by 17%, as they typically did last year the deposit will do the same and that is really going to hurt the first home buyer.
A note. This is not an area on Economics in which I have much knowledge or experience so all the numbers I have reference may be irrelevant. At a first glance though it wouldn't appear that people are much affected by the price rises while interest rates are dropping to the point that in real terms the money is free to borrow.
The commentary in the Stats NZ work on this supports this cost-of-mortgage issue. But it fails the obvious corollary: as prices go up, so too does the potential equity for deposits from Bank Of Mum And Dad (especially when they downsize, or die).
Even without interest, the average borrowing for a first home loan is almost half a mil.
That ain't chump change to pay back weekly, by itself.
People buying their first homes need to be doing damned well.
Unless you can figure out some way of paying the same price while not borrowing so much, the two figures are pretty good substitutes for each other when it comes to looking at why people can't afford to own their own hovel.
I am not disputing that it isn't easy. Mind you I can remember when my mortgage rate was 13%. That was back in the 70's and I knew people who were paying more.
However I had a quick look at payments using the BNZ calculator.
On an $800k house with a 20% deposit and a 30 year term at 2.29% you pay $1,132,fortnight. On a property at half the price, and half the deposit for the same 30 years loan you would pay exactly the same amount if you were paying 8.5% which would have been quite likely back in 2008. Half the amount borrowed but the same $1,132 at the much higher interest rate.
On the monthly income for a household at the average number of $$95.2k/year you would be paying 31% of your income on your mortgage.
Where did the first home buyer get the extra $80k for the 20% deposit in 2020? Their income only went up by less than 50%. And their rent payments are through the roof, as well, so their savings might struggle to hit a wage inflation equivalent.
"The second most important factor is going to be the deposit. If house prices go up by 17%, as they typically did last year the deposit will do the same and that is really going to hurt the first home buyer."
I don't know. I haven't been in the market for a mortgage for 30 years. We did save our deposit for our first house in about 18 months though by living on about half of one of our two incomes. The total furniture we had in a one bedroom flat cost us about $100 dollars. I will admit we had one 10 year old car though. Entertainment was limited to barbecues with friends or going to the beach.
Well the Chinese especially tend to regard their elders with considerable respect – and not so much of the 'ok boomer'.
The point is that if you want to be prosperous it takes more than just a good job – you need to plan ahead and use each generation's capacities and abilities for the benefit of the entire family.
And of course rising divorce rates over the period in question also have their impact – nothing destroys family wealth over time quite like it.
The point is that if you want to be prosperous it takes more than just a good job – you need to plan ahead and use each generation's capacities and abilities for the benefit of the entire family.
Only in a society with entrenched inequity and social mobility that does not reflect individual merit.
It's not a binary choice. Yes merit and mobility are valued highly in the West – but a well ordered and stable family over multiple generations will always have an advantage.
Why not? And how would you prevent family success from benefiting the whole family? Are parents to be prohibited from helping their children if they can?
Insisting on nothing but a pure meritocracy seems an absolutist view to me.
In a meritocracy, it doesn't matter if parents help their kids or not. That's the point.
But my objection to the current situation isn't that NZ isn't a perfect meritocracy. My objection is that we're becoming less of a meritocracy. You can cloak it in "respect for elders" and "family stability" all you want, it's the simple greed of a previous generation turning into a dynastic problem.
I've said it before and I'll say it again: his solutions to the problems he described were bunk, but Marx was a spot-on critic of capitalism and feudalism. They're just two sides of the same coin. The Duke's ancestor hit peasants over the head with clubs, the magnate's ancestor paid other people to hit workers over the head with clubs.
So today to save a $160k deposit in 18 months from one income, that would be an income of $100k a year.
Basically, the govt needs to either build shitloads of affordable homes or build shitloads of state houses and have say a HNZ 5% stock turnover for modernisation in addition to a general increase in stock levels, sold through a rent to own equity deal.
Because this is a formalisation of an intergenerational class system. Not the one we've been ignoring and pretending doesn't exist, an actual regression back towards feudalism. Not all the way back, but a definite step back.
"So today to save a $160k deposit in 18 months from one income".
A minor correction but it wasn't one income. It was one and a half incomes. We lived on one quarter of our after tax income and saved the rest.
That was quite common at the time. We were, like all our friends, trying very hard to get to own our own home. We were also willing to live a great deal further out from the CDB than many people seem to be willing to do today and lots of people did not have a car.
I found it quite hilarious a couple of years ago to read about a 30 something woman who was complaining that she couldn't afford a first house. Her idea of a first house was 4 bedrooms and 2 bathrooms in Roseneath, Mt Vic or Mt Cook. There was no way she was going out to the distant suburb of Hataitai. If you aren't a Wellingtonian look it up. It would be comparable to refusing to live way out in the wilds of Epsom I suppose.
This article is in some ways quite good on looking separately at both sides of the housing market. Though I didn't really like Eastons alternative of demand backed by offshore financing, as this doesn't either fit the facts.
First the banking system doesn't lend out existing deposits but instead creates additional deposits when extending loans. Second the fact that a trade deficit was occuring simultaneously to an expansion in borrowing will mean an expansion in overseas ownership domestically, but a lot of the overseas trades are not in $NZ so in what sense is that supporting lending into a housing market almost exclusively trading in $NZ. This explanation is equally likely to misslead as the explanation it replaces.
The bank may create credit but they are still required to hold reserves and the size of those reserves determines how much credit they can create…..and a glut of international liquidity looking for a safe home and return knows which side their bread is buttered on.
Your talking about 'capital' not reserves there (especially in the context of overseas funding), and capital is still not a constraint on lending. It might place limits on the interest rates accessible in some cases.
But the simpler explanation is just that a lot of those recent house sellers at the time also took overseas trips.
Wrong …the amount of credit a bank can create is directly linked to their reserves and that capital can (and does) come from offshore…the interest rates are a consequence of the ability to service the level of debt (credit).
The country didn't instigate a housing bubble based on money it borrowed overseas. That would be a very missleading claim, and I expect you would not claim it happened either. Yes, the implication is that the country can manufacture as much capital as it needs to facilitate lending for itself.
the glut of money sloshing around the world looks for a home and preferably a safe one with good access…..where better than backing the banks of open economies, ones with a political class wedded to the idea of free capital flows. The Banks use that increased reserve capacity to grow their loan books and thereby increase their profits, everybody wins,,,except for the poor mugs being milked for every available penny when they try and enter the housing market,
And the Gov is trapped because if they seriously try to do anything about housing affordability that capital in the banks reserves will find a new home …and probably not in NZ.
Capital outflow equals negative growth not to mention all the associated problems
Under the Pope’s guidance, these “guardians” aim to “reform capitalism into a powerful force for the good of humanity” and create a “more inclusive, sustainable and trusted form of capitalism.”
Capitalism has lifted billions of people out of poverty, but many in society have been left behind and the planet has paid a price. There is a moral imperative to address this challenge, and we are taking action.
What a lot of people here have missed is that many boardrooms across the US and EU have been quietly working toward all kinds of social and economic reforms. But because it's 'fucking capitalists' it never gets onto our radar.
It's a theme I'd have picked up on more – but every time I type the word 'capitalist' a kind of red mist descends. eg McF predictably above.
Well history is tilting in ways never encountered before.
Basically we've tried three major economic variants – capitalism, communism and fascism – and of the three only the first has shown the necessary evolutionary capacity to adapt to the new world we're heading into.
It's all about the demographics. Young adults are consumers of goods and services, mid-aged adults are investors in capital and services, and retired adults are consumers of capital. At least in very broad terms.
For the first time in all of our history our populations are now quite rapidly becoming dominated by late adult to retired aged populations. Fully half of all Boomers will retire in 2022. Suddenly growth is no longer possible or even desirable. And none of the economic systems we've ever attempted have ever been exposed to this scenario – but I'd put my bet on capitalism being the one most likely to evolve to meet the challenge.
major economic variants – capitalism, communism and fascism
Could you perhaps explain the differences between these 'economic variants'? Particularly the economic differences between capitalism and fascism.
Thanks in advance.
I see China are trying to join the TPP as is the UK. Does this mean that a large state actor like China or the UK could sue our government if we don't toe their line with regard to commercial companies. Given that a lot of chinese commercial investment seems to have some sort of state back up how exposed does this leave us?
I'm pretty confused but is it time that the existing TPP members rolled back a lot of the not actual trading and tariffs parts of the agreement so that the grouping is less attractive to major players. It all seems to reduce our ability both domestically and internationally? Should a trade agreement affect domestic politics that much?
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One theme in the literature dedicated to democratic theory is the notion of a “tyranny of the minority.” This is where the desire to protect the interests of and give voice to electoral minorities leads to a tail wagging the dog syndrome whereby minorities wind up having disproportionate influence in ...
I've just lodged my fourth complaint to the Ombudsman for deemed refusal of an OIA request by police this year. That brings their total to four for four - every request I have sent them has not been answered within the legal timeframe, even when they extend it to give ...
Will the health reforms proposed for the Labour Government make the system better or worse? Health commentator Ian Powell (formerly the Executive Director of the Association of Salaried Medical Specialists) gives his analysis of what change is most necessary, and what should be avoided. The review of the Health ...
This is a re-post from Yale Climate Connections An off-course polar vortex meandered toward the Mexican border, bringing with it frigid Arctic air rarely seen as far south as Texas. Frozen equipment rendered power generation systems in the state inoperable, forcing grid operators to begin rolling blackouts to customers then left to fend ...
Just as National once produced a “rock star economy” that Grant Robertson rejected as being only for the rich, the Labour Government has produced an economic “bounce back” that leaves out the poor. Branko Marcetic argues for a rise in benefit levels to give the poor a real bounce back. ...
Virginia has voted to abolish the death penalty: State lawmakers gave final approval on Monday to a bill that will end capital punishment in Virginia, a dramatic turnaround for a state that has executed more people than any other. The legislation repealing the death penalty now heads to the ...
Yesterday a New Zealand Judge issued a formal finding that the Department of Corrections had treated prisoners in a cruel, degrading and inhumane manner, illegally detaining them, using excessive force, denying them basic necessities unless they performed degrading rituals of submission first. Some of the conduct appears to be criminal: ...
The Herald reports that there is a "storm brewing for the Climate Change Commission". The "problem"? Polluters are unhappy with its economic projections saying that action will not be as costly as they have previously claimed: Last week a coalition of over a dozen New Zealand business and industry ...
You're Move: What would a genuinely powerful Maori Caucus do? What policies would it insist upon? More to the point, since the single most important question in politics is always “Or you’ll what?”, does the Maori Caucus possess the wherewithal to enforce its demands?THAT LABOUR’S MAORI CAUCUS is potentially powerful ...
This post is a mix of a few recent reports on trends, recent discoveries or developments. Topics covered are the future of work, the geopolitical shift from oil to semiconductors, transition to low carbon futures, disappearing Artic sea ice, and AI in health care. Yesterday’s Gone A Canadian report ...
This is a re-post from Yale Climate Connections by Bob Henson One of the hottest years in U.S. history, 2020 was besieged by a record number of billion-dollar disasters, led by two of the most dangerous phenomena with links to climate change: wildfires and hurricanes. In its initial U.S. climate summary for 2020, ...
Just because something is bad, doesn’t mean it’s easy to criminalise. Graham Adams argues that the proposed ban on gay conversion therapy is messier than many realise, and he delves into some of the difficulties facing the Government in their promise to legislate. A highly successful petition has inadvertently ...
Story of the Week... Editorial of the Week... Toon of the Week... Coming Soon on SkS... Climate Feedback Claim Review... SkS Week in Review... Poster of the Week... Story of the Week... ‘Absolutely ridiculous’: top scientist slams UK government over coalmineExclusive:Prof Sir Robert Watson says backing of ...
The Green Party are calling on the Government to assess how the COVID-19 leave support scheme can be better improved, distributed and enforced so that workers can properly take leave when self-isolating. ...
We know that when our rural communities do well, all of New Zealand benefits. Labour is committed to supporting our regions so that, together, we can achieve even more. Here are just some of the ways we’re backing rural communities. ...
Government data today shows that the wealthiest New Zealanders aren’t paying their fair share of tax, whilst everyone else chips in, Green Party spokesperson on Finance Julie Anne Genter said today. ...
The Green Party welcomes the change in the Reserve Bank’s remit to consider the impacts on housing when making financial decisions, but housing affordability shouldn’t be left to the Reserve Bank, Green Party Co-leader and Housing spokesperson Marama Davidson said today. ...
The Green Party welcomes the passing of the Local Electorate Act Māori Wards Amendment Bill which ensures Māori have a say on local issues across Aotearoa New Zealand. ...
New UMR research reveals that 69 percent of New Zealanders agree that the government should increase the amount if income support paid to those on low incomes or not in paid work. ...
The Green Party are celebrating the Labour Government bringing forward the timeline to ban conversion therapy, and will push to ensure any draft bill properly protects all of our Rainbow communities. ...
The Green Party is joining the call for ‘brave policy action’ to address rapidly increasing inequality in New Zealand, which is likely to be exacerbated by the COVID-19 pandemic. ...
Green MPs currently in Auckland, Marama Davidson, Chlöe Swarbrick and Golriz Ghahraman, will remain in Auckland for the next 72 hours. Those in Auckland today for Big Gay Out who have flown home will self-isolate for 72 hours. These decisions will be subject to any new information that may arise ...
It’s Pride month, and as we celebrate our LGBTIA+ community, we’re taking the next steps towards a more inclusive Aotearoa. From investing in mental health services to banning harmful conversion therapy, we’re building a New Zealand where everyone can be safe, healthy and happy. ...
The Government’s Consumer Travel Reimbursement Scheme has helped return over $352 million of refunds and credits to New Zealanders who had overseas travel cancelled due to COVID-19, Consumer Affairs Minister David Clark says. “Working with the travel sector, we are helping New Zealanders retrieve the money owed to them by ...
An additional 88,000 students in 322 schools and kura across the country have started the school year with a regular lunch on the menu, thanks to the Government’s Ka Ora, Ka Ako Healthy School Lunches programme. They join 42,000 students already receiving weekday lunches under the scheme, which launched last ...
New Zealand’s economic recovery has again been reflected in the Government’s books, which are in better shape than expected. The Crown accounts for the seven months to the end of January 2021 were better than forecast in the Half Year Economic and Fiscal Update (HYEFU). The operating balance before gains ...
More than half of New Zealand’s estimated 12,000 border workforce have now received their first vaccinations, as a third batch of vaccines arrive in the country, COVID-19 Response Minister Chris Hipkins says. As of midnight Tuesday, a total of 9,431 people had received their first doses. More than 70 percent ...
The Government is significantly increasing its investment in restoring Central Otago’s waterways while at the same time delivering jobs to the region hard-hit by the economic impact of Covid-19, says Land Information Minister, Damien O’Connor. Mr O’Connor says two new community projects under the Jobs for Nature funding programme will ...
The Government has confirmed details of COVID-19 support for business and workers following the increased alert levels due to a resurgence of the virus over the weekend. Following two new community cases of COVID-19, Auckland moved to Alert Level 3 and the rest of New Zealand moved to Alert Level ...
The Government remains committed to hosting the Women’s Rugby World Cup in New Zealand in 2022 should a decision be made by World Rugby this weekend to postpone this year’s tournament. World Rugby is recommending the event be postponed until next year due to COVID-19, with a final decision to ...
Community and social service support providers have again swung into action to help people and families affected by the current COVID-19 alert levels. “The Government recognises that in many instances social service, community, iwi and Whānau Ora organisations are best placed to provide vital support to the communities impacted by ...
The Government is following through on an election promise to conduct an independent review into PHARMAC, Prime Minister Jacinda Ardern and Health Minister Andrew Little announced today. The Review will focus on two areas: How well PHARMAC performs against its current objectives and whether and how its performance against these ...
Some of the country’s most forward-thinking early-career conservationists are among recipients of a new scholarship aimed at supporting a new generation of biodiversity champions, Conservation Minister Kiri Allan says. The Department of Conservation (DOC) has awarded one-year postgraduate research scholarships of $15,000 to ten Masters students in the natural ...
I acknowledge our whānau overseas, joining us from Te Whenua Moemoeā, and I wish to pay respects to their elders past, present, and emerging. Thank you for the opportunity to speak with you all today. I am very pleased to be part of the conversation on Indigenous business, and part ...
Social Development and Employment Minister Carmel Sepuloni announced today that main benefits will increase by 3.1 percent on 1 April, in line with the rise in the average wage. The Government announced changes to the annual adjustment of main benefits in Budget 2019, indexing main benefit increases to the average ...
A Deed of Settlement has been signed between Ngāti Maru and the Crown settling the iwi’s historical Treaty of Waitangi claims, Minister for Treaty of Waitangi Negotiations Andrew Little announced today. The Ngāti Maru rohe is centred on the inland Waitara River valley, east to the Whanganui River and its ...
With a suite of Government income support packages available, Minister for Social Development and Employment Carmel Sepuloni is encouraging people, and businesses, connected to the recent Auckland COVID-19 cases to check the Work and Income website if they’ve been impacted by the need to self-isolate. “If you are required to ...
Prime Minister Jacinda Ardern has expressed her condolences at the passing of long-serving former Prime Minister of Papua New Guinea, Grand Chief Sir Michael Somare. “Our thoughts are with Lady Veronica Somare and family, Prime Minister James Marape and the people of Papua New Guinea during this time of great ...
E te tī, e te tā Tēnei te mihi maioha ki a koutou Ki te whenua e takoto nei Ki te rangi e tū iho nei Ki a tātou e tau nei Tēnā tātou. It’s great to be with you today, along with some of the ministerial housing team; Hon Peeni Henare, the ...
The Government is backing a new project to use drone technology to transform our understanding and protection of the Māui dolphin, Aotearoa’s most endangered dolphin. “The project is just one part of the Government’s plan to save the Māui dolphin. We are committed to protecting this treasure,” Oceans and Fisheries ...
Major water reform has taken a step closer with the appointment of the inaugural board of the Taumata Arowai water services regulator, Hon Nanaia Mahuta says. Former Director General of Health and respected public health specialist Dame Karen Poutasi will chair the inaugural board of Crown agency Taumata Arowai. “Dame ...
The newly completed Hibiscus Coast Bus Station will help people make better transport choices to help ease congestion and benefit the environment, Transport Minister Michael Wood and Auckland Mayor Phil Goff said today. Michael Wood and Phil Goff officially opened the Hibiscus Coast Bus Station which sits just off the ...
New funding announced by Conservation Minister Kiri Allan today will provide work and help protect the unique values of Northland’s Te Ārai Nature Reserve for future generations. Te Ārai is culturally important to Te Aupōuri as the last resting place of the spirits before they depart to Te Rerenga Wairua. ...
Today the Government has taken a key step to support Pacific people to becoming Community Housing providers, says the Minister for Pacific Peoples, Aupito William Sio. “This will be great news for Pacific communities with the decision to provide Pacific Financial Capability Grant funding and a tender process to ...
Conservation Minister Kiri Allan is encouraging New Zealanders to have their say on a proposed marine mammal sanctuary to address the rapid decline of bottlenose dolphins in Te Pēwhairangi, the Bay of Islands. The proposal, developed jointly with Ngā Hapū o te Pēwhairangi, would protect all marine mammals of the ...
Attorney-General David Parker today announced the appointment of three new District Court Judges. Two of the appointees will take up their roles on 1 April, replacing sitting Judges who have reached retirement age. Kirsten Lummis, lawyer of Auckland has been appointed as a District Court Judge with jury jurisdiction to ...
Government announces list of life-shortening conditions guaranteeing early KiwiSaver access The Government changed the KiwiSaver rules in 2019 so people with life-shortening congenital conditions can withdraw their savings early The four conditions guaranteed early access are – down syndrome, cerebral palsy, Huntington’s disease and fetal alcohol spectrum disorder An alternative ...
The Reserve Bank is now required to consider the impact on housing when making monetary and financial policy decisions, Grant Robertson announced today. Changes have been made to the Bank’s Monetary Policy Committee’s remit requiring it to take into account government policy relating to more sustainable house prices, while working ...
The Labour Government will invest $6 million for 70 additional adult cochlear implants this year to significantly reduce the historical waitlist, Health Minister Andrew Little says. “Cochlear implants are life changing for kiwis who suffer from severe hearing loss. As well as improving an individual’s hearing, they open doors to ...
The Local Electoral (Māori Wards and Māori Constituencies) Amendment Bill passed its third reading today and will become law, Minister of Local Government Hon Nanaia Mahuta says. “This is a significant step forward for Māori representation in local government. We know how important it is to have diversity around ...
The Government has added 1,000 more transitional housing places as promised under the Aotearoa New Zealand Homelessness Action Plan (HAP), launched one year ago. Minister of Housing Megan Woods says the milestone supports the Government’s priority to ensure every New Zealander has warm, dry, secure housing. “Transitional housing provides people ...
A second batch of Pfizer/BioNTech vaccines arrived safely yesterday at Auckland International Airport, COVID-19 Response Minister Chris Hipkins says. “This shipment contained about 76,000 doses, and follows our first shipment of 60,000 doses that arrived last week. We expect further shipments of vaccine over the coming weeks,” Chris Hipkins said. ...
The Minister for Arts, Culture and Heritage Carmel Sepuloni has today announced $18 million to support creative spaces. Creative spaces are places in the community where people with mental health needs, disabled people, and those looking for social connection, are welcomed and supported to practice and participate in the arts ...
Treaty of Waitangi Negotiations Minister Andrew Little today welcomed Moriori to Parliament to witness the first reading of the Moriori Claims Settlement Bill. “This bill is the culmination of years of dedication and hard work from all the parties involved. “I am delighted to reach this significant milestone today,” Andrew ...
22,400 fewer children experiencing material hardship 45,400 fewer children in low income households on after-housing costs measure After-housing costs target achieved a year ahead of schedule Government action has seen child poverty reduce against all nine official measures compared to the baseline year, Prime Minister and Minister for Child Poverty ...
It’s time to recognise the outstanding work early learning services, kōhanga reo, schools and kura do to support children and young people to succeed, Minister of Education Chris Hipkins says. The 2021 Prime Minister’s Education Excellence Awards are now open through until April 16. “The past year has reminded us ...
Three new Jobs for Nature projects will help nature thrive in the Bay of Plenty and keep local people in work says Conservation Minister Kiri Allan. “Up to 30 people will be employed in the projects, which are aimed at boosting local conservation efforts, enhancing some of the region’s most ...
The Government has accepted all of the Holidays Act Taskforce’s recommended changes, which will provide certainty to employers and help employees receive their leave entitlements, Workplace Relations and Safety Minister Michael Wood announced today. Michael Wood said the Government established the Holidays Act Taskforce to help address challenges with the ...
The Government’s handling of the COVID-19 pandemic and faster than expected economic recovery has been acknowledged in today’s credit rating upgrade. Credit ratings agency Standard & Poor’s (S&P) today raised New Zealand’s local currency credit rating to AAA with a stable outlook. This follows Fitch reaffirming its AA+ rating last ...
Tena koutou e nga Maata Waka Ngai Tuahuriri, Ngai Tahu whanui, Tena koutou. Nau mai whakatau mai ki tenei ra maumahara i te Ru Whenua Apiti hono tatai hono, Te hunga mate ki te hunga mate Apiti hono tatai hono, Te hunga ora ki te hunga ora Tena koutou, Tena ...
The Minister of Justice has reaffirmed the Government’s urgent commitment, as stated in its 2020 Election Manifesto, to ban conversion practices in New Zealand by this time next year. “The Government has work underway to develop policy which will bring legislation to Parliament by the middle of this year and ...
Minister for Arts, Culture and Heritage and Social Development Hon Carmel Sepuloni today launched a new Creative Careers Service, which is expected to support up to 1,000 creatives, across three regions over the next two years. The new service builds on the most successful aspects of the former Pathways to ...
Overseas consumers eager for natural products in the face of the COVID-19 pandemic have helped boost honey export revenue by 20 percent to $425 million in the year to June 30, 2020, Agriculture Minister Damien O’Connor says. “The results from the latest Ministry for Primary Industries’ 2020 Apiculture Monitoring ...
Mike Hosking is a king of breakfast radio, a lover of blazers, and deliverer of opinions via his long-running online video series, Mike’s Minute. José Barbosa absorbed three months’ worth of those opinions in one go, and lived to tell the tale. Just. To be honest, I hadn’t thought about ...
Source: The Conversation (Au and NZ) – By Dave Parry, Professor of Computer Science, Auckland University of Technology Although international travel restrictions for Australia have been extended to at least June, there may still be potential for a trans-Tasman bubble with New Zealand (and maybe some other countries), according to ...
Source: The Conversation (Au and NZ) – By Jamie Triccas, Professor of Medical Microbiology, University of Sydney The United States’ drug regulator, the Food and Drug Administration (FDA), said last week COVID vaccines updated for variants won’t need to go through full randomised controlled clinical trials. The booster shots will ...
Source: The Conversation (Au and NZ) – By Rachel Milte, Matthew Flinders Senior Research Fellow, Flinders University The final report from the aged care royal commission this week was damning. Speaking of a system in crisis, it calls for an urgent overhaul. The Morrison government has been facing difficult questions ...
Source: The Conversation (Au and NZ) – By David John Eldridge, Professor of Dryland Ecology, UNSW After 200 years of European farming practices, Australian soils are in bad shape – depleted of nutrients and organic matter, including carbon. This is bad news for both soil health and efforts to address ...
Source: The Conversation (Au and NZ) – By Zoe Vaill, PhD Candidate Faculty of Education, Queensland University of Technology Students are heading off to universities around Australia, whether for the first time or as returning students, with expectations of a year of learning, making friends and enjoyable socialising. For some ...
Source: The Conversation (Au and NZ) – By Jan Thomas, Vice-Chancellor, Massey University As first-year students flooded onto campuses around the country this week, gripped with uncertainty and curiosity about their new lives, I too returned to university to learn. For the first time since what feels like forever, but ...
Source: The Conversation (Au and NZ) – By Richard Holden, Professor of Economics, UNSW After years of repeatedly missing its inflation target through too timid monetary policy, in the past week the Reserve Bank has decided to get tough. Not only did it hold its closely watched cash rate target ...
Source: The Conversation (Au and NZ) – By Peter McNeil, Distinguished Professor of Design History, UTS, University of Technology Sydney It’s Sydney Lesbian and Gay Mardi Gras festival time. LGBTQI people are enjoying what some call “gay or lesbian Christmas”. It’s not quite the same in the era of COVID, ...
A tech expert is warning the government could face multiple stumbling blocks if it makes QR code scanning mandatory - in particular when dealing with tech giants like Apple and Google. ...
*This story first appeared on RNZ and is republished with permission. A tsunami alert has been issued after a 7.4 earthquake near the Kermadec Islands. The National Emergency Management Agency (NEMA) says it expects strong and unusual currents and unpredictable surges at the shore. It says the threat is from ...
Live coverage of the snap lockdown and the search for a source of the latest infection. Auckland is now at alert level three, NZ at level two. Get in touch at stewart@thespinoff.co.nz 7.50am: Two major earthquakes strike; tsunami warning in placeTwo major earthquakes have struck off the coast of New Zealand ...
Good morning and welcome to The Bulletin. In today’s edition: Cabinet to decide on lifting lockdown today, questions raised about the stability of the housing market, and people instinctively respond to tsunami threat after earthquake.A decision will be made today on whether or not Auckland will come out of level ...
The military is showing little sign of backing down, but the coup could have the unintended consequence of unifying Myanmar society in opposition, across significant ethnic divisions. A month ago, citing dubious claims of electoral fraud in the November 2020 election, Myanmar’s military deposed the country’s democratically elected National League for Democracy ...
Anna Rawhiti-Connell doesn't want an investment or an asset, but a home. Yet because of last century’s broken promises, she feels like an idiot fish, destined to swim against a current with other idiot fish who think their life savings and lifelong debt will guarantee them a house. We went to some open homes ...
All eyes are on the Prime Minister to schedule the rollout – or flyout – to the more remote corners of NZ and the Pacific There is growing anticipation about the announcement of the Covid vaccine rollout to New Zealand's general population and the Pacific realm countries. The schedule is close ...
Were we right to leave lockdown so early after the Valentine's Day cluster was first discovered? And was our return to lockdown a result of anything more than bad luck? Marc Daalder reports Ashley Bloomfield and Jacinda Ardern fronted a press conference on February 17, three days after Auckland plunged ...
With the America's Cup first-to-seven showdown about to begin, Suzanne McFadden asks a six-time winner how much could it come down to the helmsmen? Murray Jones knows the exact essence of what makes an America’s Cup helmsman great. A phenomenal Kiwi sailor in his own right, Jones has worked alongside ...
Rio Olympian Helena Gasson may be one of the oldest Kiwi swimmers still at the top of their game, but she's found a new gear - breaking 20 NZ records in the past 18 months. Even in the year of Covid, with her plans abruptly changed and her training schedule interrupted, Helena ...
A Harvard professor presenting his opinions on alien life as fact when the field at large doesn't agree is misrepresenting science, argues Dr Heloise Stevance For years now Abraham (Avi) Loeb has been a rather passionate advocate for what I call 'The Alien Hypothesis' 一 the idea that extraterrestrial lifeforms are the source of ...
After literally thousands of requests, we’ve finally caved. We’ve decided to rank beans in an arbitrary yet unequivocally correct fashion.A-mung the current chaos of the world we live in, there’s an inherent desire to create order. Some found that order in the first lockdown by cleaning their house or exercising ...
A bar planned for Auckland’s St Kevin’s Arcade is facing opposition from locals concerned about the character of the owner, former Married at First Sight contestant Chris Mansfield, who still faces outstanding domestic violence charges in the US.The two lots inside St Kevin’s Arcade where Chris Mansfield plans to open ...
We thought the Covid messages were clear - but the latest Auckland lockdown has muddied the message. One political strategist says it's been like "putting tomato sauce on ice cream". New Zealand's Covid-19 communications response has been hailed the world over. Its success has catapulted us into the pages ...
Source: The Conversation (Au and NZ) – By Michelle Grattan, Professorial Fellow, University of Canberra Scott Morrison has a near obsession with control. But suddenly – in the course of only weeks – he has found himself presiding over a government in a shambles, where he is reacting rather than ...
Source: The Conversation (Au and NZ) – By Rick Sarre, Emeritus Professor of Law and Criminal Justice, University of South Australia A great deal has been written and said in the last few days about the next steps in the historic claim of rape against Attorney-General Christian Porter. There are ...
Source: The Conversation (Au and NZ) – By Carola Garcia de Vinuesa, Professor and Co-Director, Centre for Personalised Immunology, NHMRC Centre of Research Excellence, Australian National University Some 90 prominent scientists, including Nobel laureates and other leading Australian and international researchers, today called for convicted child murderer Kathleen Folbigg to ...
The threats to use car bombs at the two mosques that were attacked on 15 March 2019 are especially cruel as we come up to the second anniversary of those attacks. It shows the need for a strong national security system, with clear leadership and direction ...
Source: The Conversation (Au and NZ) – By Michelle Grattan, Professorial Fellow, University of Canberra The Royal Commission into Aged Care has now delivered its final report, and its findings are an indictment of the inadequacies of the present system. The report calls for a refocus within the aged care ...
Police have arrested two people following an online threat against two Christchurch mosques, Marc Daalder reports Christchurch police say two people arrested over an online threat against two mosques are being cooperative. One of the people arrested, a 27-year-old man, has been charged with threatening to kill. On Sunday, a ...
Source: The Conversation (Au and NZ) – By Mary Iliadis, Senior Lecturer in Criminology, Deakin University The continuing media coverage of rape and sexual assault allegations faced by current and former political figures has put many sexual abuse survivors at risk of being traumatised all over again. Widespread media attention ...
“Thanks to Labour’s bungling bureaucracy, hardworking New Zealanders are locked down with their livelihoods threatened, and the Prime Minister still isn’t telling the truth. It is time for a reset. We need a purpose built, Taiwan-style, Epidemic ...
On the 27 th of February, youth across 7 cities in New Zealand came out in full force to join city-wide marches organized by Rise for Lives (RFL), a youth movement focused on bringing awareness and action for humanitarian causes. Youth members of ...
Source: The Conversation (Au and NZ) – By William Peterson, Associate Professor, Flinders University Review: A Midsummer Night’s Dream, by Benjamin Britten, directed by Neil Armfield, Adelaide Festival. Transfixed, Transported. Transfigured. Three hours pass in the blink of an eye. How did this happen, or was it all just a ...
Source: The Conversation (Au and NZ) – By Jacqueline Lau, Research fellow, James Cook University Gender influences how people experience and respond to climate change. This is particularly evident in developing nations where women and men adapt to climatic shocks differently. Women work harder and longer, in poorer conditions, while ...
This week on Business is Boring, Billie Jo Hohepa-Ropiha tells Simon Pound about inventing the sewer-safe wet wipe alternative BDÉT.There is a big problem lurking in our sewer pipes. Flushed wet wipes, even the supposedly “flushable” ones, are major contributors to “fatbergs” – huge clumps of wipes and other stuff ...
Over 170 scientists, researchers, local government elected members and officials gathered recently at the LGNZ Climate Change Adaptation Symposium. Discussions uncovered gaps in New Zealand’s adaptation policy and canvassed how the sector can find shared ...
The New Zealand Law Society | Te Kāhui Ture o Aotearoa appeared before Parliament’s Justice select committee today on the Arms (Firearms Prohibition Orders) Amendment Bill (No 2), a member's bill in the name of Simeon Brown. The bill proposes to allow ...
Source: The Conversation (Au and NZ) – By Kate Cantrell, Lecturer in Writing, Editing, and Publishing, University of Southern Queensland Let’s start by putting aside the bugbear that it is even possible to “cancel” children’s author Dr Seuss. As Philip Bump wrote yesterday in The Washington Post, No one ...
Our Beehive Bulletin We spotted the politically alluring word “free” among the latest Beehive announcements. The headline said “Hundreds more schools join free lunches programme”. This was one of two statements from Chris Hpikins since Point of Order last updated its record of of ministerial press statements. The other (in ...
Feel like you’ve already watched everything on the internet this week? Here are eight video series from The Spinoff archive you might have missed.Scratched: Aotearoa’s Lost Sporting LegendsMeet some of the unsung or forgotten legends of New Zealand sport, from Māori tennis legend Ruia Morrison’s Wimbledon run in the 1950s ...
TRIBUTE:By Frank Senge Kolma in Port Moresby Many will now try to recollect some experience, some exchange or brush with the Grand Chief Sir Michael Thomas Somare who fell to pancreatic cancer on February 26 after a long checkered career in politics as our founding Prime Minister. That he ...
At first it was about the books, but my relationship with my local library has since become about a whole lot more, writes Briar Grace-Smith, whose feature film Cousins premiered last night.I’ve done my time in libraries around the country, popping in and out of them on writers’ tours ...
The live export ship Ocean Ute is scheduled to arrive at Port Taranaki tomorrow to export thousands of cows. This is the second time Ocean Ute has exported animals from New Zealand this year. Radio New Zealand reported today that a paper has been ...
A View from Afar: Thursday March 4 @ midday (NZDST / Wednesday, 6pm USEST) Paul G. Buchanan and Selwyn Manning conduct a deep dive into the largely covert role of private enterprise in the intelligence, conflict, and war markets. Most recently, New Zealanders discovered that its national airline had been ...
Guest Post By Barrie Saunders The departure of Donald Trump from the White House was a victory for the US democratic system, which only just succeeded. If then Vice President Mike Pence had wavered under enormous pressure from President Trump and his cult-like supporters, Joe Biden might not be in ...
The reverential aura enveloping the Ardern government is beginning to fade and ministerial fallibilities are emerging. Just as suddenly, the media are offering some space to critics of the government. Richard Prebble is calling for a Royal Commission into the government’s handling of the pandemic response. ACT’s David Seymour sees ...
South Auckland is flooded with unhealthy food choices, but, as Justin Latif reports, a group of women are ensuring there’s something for those wanting an alternative.One gave up a career in the world of investment banking, while the other, as a single mum to five children, chose to take a ...
New Zealand fell in love with Precious McKenzie at the 1974 Commonwealth Games, and the feeling was so mutual he decided to stay. But the charismatic weightlifter hadn’t always been made to feel so welcome.In an apartheid-era gym advertised as “whites only”, Precious McKenzie was about to break a national ...
Chief Ombudsman Peter Boshier today released his latest Official Information Act (OIA) and Local Government Official Information and Meetings Act (LGOIMA) data[1]. In the six months from 1 July to 30 December 2020, the Ombudsman received 667 OIA ...
National's proposal to pay full wages for people self-isolating is a welcome one, says the New Zealand Taxpayers’ Union . Union spokesman Louis Houlbrooke says, “It's a version of what we proposed last year in our first COVID-19 briefing paper ...
The move to level three in Auckland, and level two across the rest of the country, has once more thrown the live arts into disarray. Sam Brooks asked some practitioners to tell us how the pandemic continues to disrupt their work.There’s no doubt that New Zealand has been able to ...
A small Waikato town is pulling together to help improve how Māori are counted in the next census, Stats NZ said today. In Raahui Pookeka, members of a local marae are driving an initiative to improve engagement in the New Zealand census. The initiative, ...
Hamilton residents are being asked to help make sure updated census methodology works by participating in the census test, Stats NZ said today. The test is being run to see how changes made to the collection model used in the New Zealand Census ...
A View from Afar: Thursday March 4 @ midday (NZDST / Wednesday, 6pm USEST) Paul G. Buchanan and Selwyn Manning will conduct a deep dive into the largely covert role of private enterprise in the intelligence, conflict, and war markets. Most recently, New Zealanders discovered that its national airline had ...
Asia Pacific Report Human rights lawyer Veronica Koman has challenged the contrasting positions taken by the Indonesian government in response to calls to resolve the Papua problem and in its response to the military coup in Myanmar. Koman said Indonesia’s position on the Myanmar coup had been very good, but ...
Asia Pacific Report Reporters Without Borders (RSF) is dismayed by the sudden intensification of the ruling junta’s crackdown on journalists during the past three days, one month after the military coup in Myanmar on February 1, and warns the junta of its responsibility in the eyes of history. In all, ...
By Miriam Zarriga in Port Moresby Rioters described by Papua New Guinea police as “opportunists” taking advantage of the death of Grand Chief Sir Michael Somare have looted shops and destroyed cars in three provinces – Morobe’s Lae, National Capital District (NCD) suburb Gordon and New Ireland’s Kavieng. Shots were ...
By RNZ News New Zealand’s Covid-19 Response Minister Chris Hipkins says the actions of the Destiny Church leaders in leaving Auckland on the eve of the alert level 3 lockdown were “completely irresponsible”. Earlier today it was revealed that church leaders Brian and Hannah Tamaki left Auckland on Saturday night, ...
In its first draft advice delivered to the government in February, the Climate Change Commission recommended the widespread adoption of electric vehicles, with ‘no further internal combustion engine light vehicles imported after 2032’. Gareth Shute asks if this is actually feasible.Transport is responsible for over a fifth of New Zealand’s ...
Unite congratulates Crowne Plaza Auckland, currently an MIQ facility, for making the move to paying their workers the living wage. The welcome increase will provide some relief to workers who are normally paid just above the minimum wage despite ...
In prioritising economic cost and setting far-off targets, the Climate Change Commission has shown a spectacular lack of ambition, argues Adam Currie. “What matters in the end is not targets, which have been set in the past and never met, but the policies to achieve them.”The late Jeanette Fitzsimons wrote this ...
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Why building more houses will not fix prices – economist Brian Easton. https://www.pundit.co.nz/content/the-sources-of-house-price-inflation
I'm inclined to agree. Shortages are simply an intractable backdrop against which interest, and monetary policy generally, serve to exacerbate the problems that shortages cause.
Why must house prices be fixed?
because people need to be able to afford to live in them.
If you had answered:
Because people need to be able to afford to own them, I would have agreed.
House price fixing concerns ownership. It certainly has secondary effects, but mostly, the price of the house is the cost of owning it.
Easton is making some massive correlations, but no useful causes.
but mostly, the price of the house is the cost of owning it.
As I've said a few times before; if you think the rent is high – try owning it.
owning and renting are two different things. And renting to use for a while should never cost more then owning does, and currently renters pay the mortgage, the interest, and what ever else the owner wants out of the property.
btw, my mortgage that i pay currently is 200$ per week.
you can't even rent a dog kennel for that amount anywhere in NZ.
I reckon, my mortgage is $210 a week, if I rented the same house it would be double, and with no return. Free insulation, cheap rates, I could also halve that if I got a flatmate (which I may do once my kids leave). I don't take this for granted, I realise I'm one of the lucky few.
+1
ditto here. And the bank don't come to inspect every three month.
Have to strongly disagree with you there RL, we are in our first own house (nearly freehold) after renting for 30+years the last 15 of those with three children, owning your own home has for us probably been pretty similar, maybe a bit more expensive but not a lot, and especially when you take into account all the benefits…the main one is not having to deal with Ma&Pa landlords they are generally like spawns from hell, they have made renting a fucking nightmare, it is awful, and no country that has the resources NZ has should let it’s citizens endure that type of life…welcome to free market liberalism I guess, markets operating just as they should…Thanks David Lange.
Gone are the old days when you would rent a house and live in it for years and hardly be bothered as long as you paid your rent and maintained the property…our last ten years of renting were a disaster (with one exception) as far as landlords went…even if owning a home was/is more expensive, how can you put a price on the endless stress and worry and more importantly the hundred of subtle ways it damages and undermines children having little to no long term home security.
Nope.
Owning a home provides security that no amount of rental law cannot.
The trouble is that house prices do not reflect the cost of owning a home. They reflect the cost of the expected medium-term capital gains (post bright-line). It wasn't a problem when they reflected the expected gains upon retirement and downsizing, but now who honestly expects to be in that house for thirty years? Or do they expect to flip it in ten years or so?
Agree with the security bit. I've seen the pro's and cons of home ownership debated at length in New Zealand literature. They're pretty even.
I'd like to see some proper policy work done on the effects of Andrew Little's current extension of the Bright Line test, and the likeley extension to 10 coming up. Doesn't seem to have made much difference to house prices at all – so if it's not working as intended it should be removed.
Perhaps that is a point of the Easton paper – no one issue will solve the housing crisis. After all the current presumption of intent is flawed, but reversing it would mean that gains up to the time legislation takes effect are likely to remain tax free, so most people would not pay much tax for many years; but owners of rental properties may hold for longer to defer the payment. Requiring a bigger amount of real (not borrowed) equity may be possible , but that would be easier if we increased wages so that the government does not need social welfare or Working for Families to enable new home buyers to afford to live with a family.
If he had started with the 1% homeless crisis – which is about as bad as it gets in the OECD, I would have agreed with him. He didn't.
Pretty even for people who can afford to choose their housing tenure type.
For people at the mercy of a speculative landlord, not so much.
I have a good landlord. Doesn't put the rent up every week etc. . But a batten holder wore out 8 months ago – and it only got fixed last month – no bedroom light all winter. Rentiers are oppressors, even the the good ones.
And of course the inability of contemporary NZers to afford their own homes is the final disproof of neoliberalism. It was supposed to make us more prosperous if you remember – on the contrary, it has impoverished us. Voters, looking at neoliberals think: "Were you really that stupid that you swallowed the hype in spite of our warnings? Or were you just corrupt?"
Because their speculative growth is entrenching even more deeply NZ's trans-generational class system.
Even if a full-time worker can rustle up a 10-20% deposit, I strongly suspect most NZers probably wouldn't earn enough to service the mortgage on a median-priced house.
For me, it was break-even with no margin for error five years ago. Now? It's a joke. And I have a good job, no dependants, and a retirement fund, but houses are more than twice the price. Almost literally – I looked up that house recently. It's gone from $230k to $450k. Has any actual worker's salary doubled in five years?
Absolutely the personal stories are valid.
I'm kinda waiting for evidence of the K-shaped economy to hit.
And it's indisputable that salaries haven't kept up with house prices.
But if Easton had tracked house prices, salaries, and national home ownership, he would have seen no collapse in average ownership at all. Even as prices skyrocketed.
In fact we're still better than nearly all other developed countries for home ownership.
Easton calls it speculation. 65% of us call it risk management.
Might pay to check the stats before making wild claims
https://www.stats.govt.nz/reports/housing-in-aotearoa-2020#:~:text=At%20the%20time%20of%20the%202018%20Census%2C%20New%20Zealand's%20homeownership,to%2064.5%20percent%20of%20households.
and falling.
Easton’s analysis is sound and he is not alone with the conclusions….it has been well canvassed and the only major dispute is around to what degree other factors impact.
Oh don't worry I checked. Which is why I stated 65% home ownership.
And I also checked on the international benchmarks for developed countries.
It's barely moved downward since the last time they measured. You can check.
You just have to read beyond the hysteria.
stating 65% mean sweet FA unless you also state from where it came and what the trend is…as you well know.
and I too have checked…"and falling"
"Home Ownership Rate in New Zealand is expected to reach 64.29 percent by the end of 2020, according to Trading Economics global macro models and analysts expectations."
If youre not already you should be a politician
The home owner percentage has barely moved since 2013.
In the site you cite, go into the full statistical report, fig 15 p 28.
https://www.stats.govt.nz/reports/housing-in-aotearoa-2020
Maybe 2021 changes all of that, looking forward to the evidence.
You will get your evidence (sadly)…
"In 1991, 61% of people aged 25-29 owned their own home, but by 2018 this had dropped to 44%.
Ownership rates have also fallen for people in their 30s, dropping from 79% in 1991 to 59% in 2018."
https://www.interest.co.nz/property/108312/home-ownership-levels-are-continuing-decline-especially-younger-people
figures 17 -20 from the report if I recall correctly
And the explanation is glaringly obvious, the inflated prices relative to income
And as outlined below there is more to it than just economics – it's the relentlessly increasing age of first marriage that also means that 20-29 age group just aren't interested in buying homes.
Another factor is the rise in divorce rates – usually one partner will finish up renting for a period afterward.
This doesn't discount the obvious affordability issue in play – but it does suggest there are often more factors involved than the headlines make out.
Of course, unmarried people dont buy houses….how could i miss that.
And the 20 -29 year olds arnt interested in buying homes….because they increasingly cant afford them….the same applies to those in their 30s…and the ones that eventually can take considerably longer to raise the increasing deposits.
Those decreased ownership rates in the cohorts coming through are going to have a major impact on the total ownership rates as the proportionately higher ownership rate cohort approaching 70 move into care/die
I would argue one can own multiple houses but only one is ever your home but that's an aside.
To do a real comparison a similar breakdown as above is needed for the historical data.
https://www.newstalkzb.co.nz/news/business/mum-and-dad-landlords-own-more-than-a-third-of-property/
And that's households (where homeowners are a member of the household). Only half of individuals own the home they live in, directly or indirectly (same link, p34).
Additionally, although $value of lending to first home buyers peaked last year at 20%, the proportion of actual borrowers at the time was 12%.
The longer this situation goes on, the more nailed in the inequity will be.
"no collapse in average ownership at all"
Are you serious?
65% is barely moved from the last time they measured.
You sound like a CC denialist – "oooh look, this part of the graph is flat!"
A 13% drop in fact.
Go into the full statistical report, fig 15 p 28.
https://www.stats.govt.nz/reports/housing-in-aotearoa-2020
Maybe 2021 changes all of that, looking forward to the evidence.
Maybe 2021 will be the start of an ice age.
Heck of a change within a generation, though
If by "generation" you mean the peak in the early 1990s, I'd agree.
If by "generation" you mean back to the 1960s when everything about New Zealand was supposed to be our egalitarian apogee, no not really it's the same.
You not only can't read a graph it seems you can't even read:
"Homeownership at lowest rate since the 1950s" – the heading of the graph you link to.
I thought "generation" generally referred to thirty years or so?
But then if 68.9% is "the same" as 64.5%, I suspect we need to find a specific dictionary to agree upon for a common vernacular.
so not just 1950s but early 1950s.
Yup – the demographics don't lie. Before Rogergnomics the median age at marriage was around 23. After it was 33. Poverty. The social science folk can give the lie to every pretense of good governance.
Not everything is primarily caused by rogernomics. Reducing the social expectation for marriage wasn't just economic.
Keep telling yourself that – the old prof that ranted it at me would not be persuaded. He had plenty more too.
Data doesn't seem to match his claim.
It definitely moved a couple of years in the 1980s, but nowhere near ten years and the median age is still only around 31.
The data here suggests that the more developed a nation is, the faster the rate at which the age of 'first marriage' has been increasing.
The best explanation does not appear to be 'poverty'.
That would be of course because the data aren't set up to capture it.
Measure GDP alone and you could imagine Rogergnomics as something other than a brutal failure. But you would be letting data trickle through your fingers – politically convenient no doubt.
The first world nations have been lying to themselves for a good while now – with falling "labour force participation" instead of unemployment and so on. The lies are getting pretty thick. If everything were apples home ownership wouldn't have had to fall, nor would child (the only politically acceptable poverty) be so high.
All those suicides blamed on mental health too – same trick the Soviets resorted to. Our governors have no standards at all.
All those different countries – and none of them 'properly' capturing age of first marriage to your satisfaction.
Amazing.
Hardly – I'm not trying to extend my assertion around the world – it was you that had to reach beyond NZ to grasp at the straw that because other countries experience lesser forms of the same graphic failure, the brutal sham that was Rogergnomics was somehow excusable.
We all understand the appeal to the vanity of policy makers of a ‘great leap forward’, and I use Mao’s term deliberately, because Rogergnomics was every bit as hubris-laden, destructive, misguided, and undemocratic.
Typical debating fail – jumping to unjustified conclusions. Nowhere have I attempted to excuse neo-liberalism. Indeed if you'd been paying attention I have explicitly written a post on exactly why I regard it as 'out of bounds'.
So nowhere have I attempted to excuse Rogernomics – that’s a just a figment of your imagination. But to attribute everything bad that ever happened in this country to this singular cause is another kind of fail.
The inability to confront and address mistakes is typical of dysfunctional institutions like corporations or corrupted governments.
It isn't the price of the house that is relevant to the person buying it. It is the cost of servicing the mortgage. Here are a few graphs on housing costs. Between 2008 and 2019 the average household income in Auckland went up by about 50%. Thar was from $61.4k to $95.2k. The average weekly payment for people who had a mortgage only went up by about 20%. That was from $384/week to $460/week
https://figure.nz/chart/0Z1fITz5qe80b2tD-szOL5Pza2PB8N51f
When you look at the cost of buying a home the most important factor is going to be the mortgage interest rate. First mortgage rates in 2008 were about 8%. They are now, if the ASB quote in front of me is typical 2.29% for a 1 year fixed rate.
https://teara.govt.nz/files/g-23100-data_0.txt
https://www.goodreturns.co.nz/mortgage-rates.html
The second most important factor is going to be the deposit. If house prices go up by 17%, as they typically did last year the deposit will do the same and that is really going to hurt the first home buyer.
A note. This is not an area on Economics in which I have much knowledge or experience so all the numbers I have reference may be irrelevant. At a first glance though it wouldn't appear that people are much affected by the price rises while interest rates are dropping to the point that in real terms the money is free to borrow.
The commentary in the Stats NZ work on this supports this cost-of-mortgage issue. But it fails the obvious corollary: as prices go up, so too does the potential equity for deposits from Bank Of Mum And Dad (especially when they downsize, or die).
As a sort of comparison.
Bought house in 1980 with 30% deposit Interest was abt 30% of salary then
Now a 60% loan would cost about 25% of the same level of salary.
Having said that the amount of deposit today would be about 300k
Even without interest, the average borrowing for a first home loan is almost half a mil.
That ain't chump change to pay back weekly, by itself.
People buying their first homes need to be doing damned well.
Unless you can figure out some way of paying the same price while not borrowing so much, the two figures are pretty good substitutes for each other when it comes to looking at why people can't afford to own their own hovel.
I am not disputing that it isn't easy. Mind you I can remember when my mortgage rate was 13%. That was back in the 70's and I knew people who were paying more.
However I had a quick look at payments using the BNZ calculator.
On an $800k house with a 20% deposit and a 30 year term at 2.29% you pay $1,132,fortnight. On a property at half the price, and half the deposit for the same 30 years loan you would pay exactly the same amount if you were paying 8.5% which would have been quite likely back in 2008. Half the amount borrowed but the same $1,132 at the much higher interest rate.
On the monthly income for a household at the average number of $$95.2k/year you would be paying 31% of your income on your mortgage.
coolcool.
Where did the first home buyer get the extra $80k for the 20% deposit in 2020? Their income only went up by less than 50%. And their rent payments are through the roof, as well, so their savings might struggle to hit a wage inflation equivalent.
You did notice I said, in my first comment.
"The second most important factor is going to be the deposit. If house prices go up by 17%, as they typically did last year the deposit will do the same and that is really going to hurt the first home buyer."
I don't know. I haven't been in the market for a mortgage for 30 years. We did save our deposit for our first house in about 18 months though by living on about half of one of our two incomes. The total furniture we had in a one bedroom flat cost us about $100 dollars. I will admit we had one 10 year old car though. Entertainment was limited to barbecues with friends or going to the beach.
These days families are going to have to start thinking intergenerationally – as the Indians and Chinese are accustomed to doing.
Folks know which generation fucked it up.
Well the Chinese especially tend to regard their elders with considerable respect – and not so much of the 'ok boomer'.
The point is that if you want to be prosperous it takes more than just a good job – you need to plan ahead and use each generation's capacities and abilities for the benefit of the entire family.
And of course rising divorce rates over the period in question also have their impact – nothing destroys family wealth over time quite like it.
Only in a society with entrenched inequity and social mobility that does not reflect individual merit.
It's not a binary choice. Yes merit and mobility are valued highly in the West – but a well ordered and stable family over multiple generations will always have an advantage.
Not in a meritocracy.
Why not? And how would you prevent family success from benefiting the whole family? Are parents to be prohibited from helping their children if they can?
Insisting on nothing but a pure meritocracy seems an absolutist view to me.
In a meritocracy, it doesn't matter if parents help their kids or not. That's the point.
But my objection to the current situation isn't that NZ isn't a perfect meritocracy. My objection is that we're becoming less of a meritocracy. You can cloak it in "respect for elders" and "family stability" all you want, it's the simple greed of a previous generation turning into a dynastic problem.
I've said it before and I'll say it again: his solutions to the problems he described were bunk, but Marx was a spot-on critic of capitalism and feudalism. They're just two sides of the same coin. The Duke's ancestor hit peasants over the head with clubs, the magnate's ancestor paid other people to hit workers over the head with clubs.
In a meritocracy, it doesn't matter if parents help their kids or not.
Tell that to the Chinese or Indians busy building lots of intergenerational wealth in this country – property, businesses, you name it.
The simple reality is that a stable family is one of the best predictors of good social outcomes across the board.
Correction: the one of the biggest predictors of future wealth is parental wealth, and it's getting worse.
BTW, not sure where you're getting your data on household wealth by ethnicity?
So today to save a $160k deposit in 18 months from one income, that would be an income of $100k a year.
Basically, the govt needs to either build shitloads of affordable homes or build shitloads of state houses and have say a HNZ 5% stock turnover for modernisation in addition to a general increase in stock levels, sold through a rent to own equity deal.
Because this is a formalisation of an intergenerational class system. Not the one we've been ignoring and pretending doesn't exist, an actual regression back towards feudalism. Not all the way back, but a definite step back.
"So today to save a $160k deposit in 18 months from one income".
A minor correction but it wasn't one income. It was one and a half incomes. We lived on one quarter of our after tax income and saved the rest.
That was quite common at the time. We were, like all our friends, trying very hard to get to own our own home. We were also willing to live a great deal further out from the CDB than many people seem to be willing to do today and lots of people did not have a car.
I found it quite hilarious a couple of years ago to read about a 30 something woman who was complaining that she couldn't afford a first house. Her idea of a first house was 4 bedrooms and 2 bathrooms in Roseneath, Mt Vic or Mt Cook. There was no way she was going out to the distant suburb of Hataitai. If you aren't a Wellingtonian look it up. It would be comparable to refusing to live way out in the wilds of Epsom I suppose.
So to do it today, that's still two people in the same household earning well above the median income.
You forgot to bring up coffee and avocado smash.
This article is in some ways quite good on looking separately at both sides of the housing market. Though I didn't really like Eastons alternative of demand backed by offshore financing, as this doesn't either fit the facts.
First the banking system doesn't lend out existing deposits but instead creates additional deposits when extending loans. Second the fact that a trade deficit was occuring simultaneously to an expansion in borrowing will mean an expansion in overseas ownership domestically, but a lot of the overseas trades are not in $NZ so in what sense is that supporting lending into a housing market almost exclusively trading in $NZ. This explanation is equally likely to misslead as the explanation it replaces.
The bank may create credit but they are still required to hold reserves and the size of those reserves determines how much credit they can create…..and a glut of international liquidity looking for a safe home and return knows which side their bread is buttered on.
Your talking about 'capital' not reserves there (especially in the context of overseas funding), and capital is still not a constraint on lending. It might place limits on the interest rates accessible in some cases.
But the simpler explanation is just that a lot of those recent house sellers at the time also took overseas trips.
Wrong …the amount of credit a bank can create is directly linked to their reserves and that capital can (and does) come from offshore…the interest rates are a consequence of the ability to service the level of debt (credit).
Still its, not a constraint on lending.
Of course it is…unless the bank wishes to breach its conditions of licence
The country didn't instigate a housing bubble based on money it borrowed overseas. That would be a very missleading claim, and I expect you would not claim it happened either. Yes, the implication is that the country can manufacture as much capital as it needs to facilitate lending for itself.
the glut of money sloshing around the world looks for a home and preferably a safe one with good access…..where better than backing the banks of open economies, ones with a political class wedded to the idea of free capital flows. The Banks use that increased reserve capacity to grow their loan books and thereby increase their profits, everybody wins,,,except for the poor mugs being milked for every available penny when they try and enter the housing market,
And the Gov is trapped because if they seriously try to do anything about housing affordability that capital in the banks reserves will find a new home …and probably not in NZ.
Capital outflow equals negative growth not to mention all the associated problems
I have no idea what this is going to achieve, but it's hard to fault the ambition. Pope Francis has just
https://www.prnewswire.com/news-releases/the-council-for-inclusive-capitalism-with-the-vatican-a-new-alliance-of-global-business-leaders-launches-today-301187931.html
launched a partnership between the Vatican and some of the world’s largest companies, nonprofits and government agencies to reform capitalism.
The Council for Inclusive Capitalism with the Vatican is led by Guardians for Inclusive Capitalism, a group of officials representing such entities as the Bank of America, BP, Dupont, the Ford Foundation, Mastercard, Merck, the Rockefeller Foundation, Salesforce, Visa and the State of California.
Under the Pope’s guidance, these “guardians” aim to “reform capitalism into a powerful force for the good of humanity” and create a “more inclusive, sustainable and trusted form of capitalism.”
https://www.inclusivecapitalism.com/
Their mission is "to harness the private sector to create a more inclusive, sustainable and trusted economic system."
Just occasionally I wish Bruce Jesson and Christopher Hitchings were still alive to comment.
It's too weird for me to even try to comment yet.
Should have just called it FaustianPact.com
That's quite remarkable. From your second link:
What a lot of people here have missed is that many boardrooms across the US and EU have been quietly working toward all kinds of social and economic reforms. But because it's 'fucking capitalists' it never gets onto our radar.
It's a theme I'd have picked up on more – but every time I type the word 'capitalist' a kind of red mist descends. eg McF predictably above.
It's also not unreasonable to look at the Catholic Church's own historical approach to wealth management and go what the actual fuck.
Well history is tilting in ways never encountered before.
Basically we've tried three major economic variants – capitalism, communism and fascism – and of the three only the first has shown the necessary evolutionary capacity to adapt to the new world we're heading into.
It's all about the demographics. Young adults are consumers of goods and services, mid-aged adults are investors in capital and services, and retired adults are consumers of capital. At least in very broad terms.
For the first time in all of our history our populations are now quite rapidly becoming dominated by late adult to retired aged populations. Fully half of all Boomers will retire in 2022. Suddenly growth is no longer possible or even desirable. And none of the economic systems we've ever attempted have ever been exposed to this scenario – but I'd put my bet on capitalism being the one most likely to evolve to meet the challenge.
Could you perhaps explain the differences between these 'economic variants'? Particularly the economic differences between capitalism and fascism.
Thanks in advance.
The other day I found this amazing website …
Was Henry Ford fascist or capitalist? Or is it not an "or"?
He had a pretty good idea of the solution.https://www.financialexpress.com/auto/car-news/forget-electric-cars-henry-fords-cannabis-car-was-made-from-hemp-10xstronger-than-steel-100-green/1384733/ . I think he offered another way, one that may not have had us in our present situation.
I was asking you RL as you are perhaps the only person I've ever heard claim fascism is an economic system.
So please back up your statement with some facts or you're the one who needs that site you just found.
I see China are trying to join the TPP as is the UK. Does this mean that a large state actor like China or the UK could sue our government if we don't toe their line with regard to commercial companies. Given that a lot of chinese commercial investment seems to have some sort of state back up how exposed does this leave us?
I'm pretty confused but is it time that the existing TPP members rolled back a lot of the not actual trading and tariffs parts of the agreement so that the grouping is less attractive to major players. It all seems to reduce our ability both domestically and internationally? Should a trade agreement affect domestic politics that much?
https://www.interest.co.nz/news/109042/big-japanese-quake-china-targets-nz-over-tpp-application-us-sentiment-waivers-canada
https://asia.nikkei.com/Editor-s-Picks/China-up-close/Analysis-A-new-Anglo-Japanese-alliance-threatens-China-s-TPP-plans
Dorklander here. Oh the evils of a lockdown. No warning and the bottle store closes. Have to sundown on a 15 year Chivas Regal rather than my ho hum teachers
NZ hellhole.
For the radio listeners among us.
This link is a big bad rabbit hole to follow, so don't say you weren't warned.
Essentially every little green dot is a radio station. Have fun.
http://radio.garden/
lol, fair warning!
Thanks Sabine – amazing.
Watercare does Watercare, again.
https://www.nzherald.co.nz/nz/contractors-accidentally-pour-2000-tonnes-of-cement-like-grout-into-auckland-water-main/SURUDLSTLBJU7BDNL4XWMEY52U/