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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Peter Dunne writes – It is one of the oldest truisms that there is never a good time for MPs to get a pay rise. This week’s announcement of pay raises of around 2.8% backdated to last October could hardly have come at a worse time, with the ...
David Farrar writes – Newshub reports: Newshub can reveal a fresh allegation of intimidation against Green MP Julie-Anne Genter. Genter is subject to a disciplinary process for aggressively waving a book in the face of National Minister Matt Doocey in the House – but it’s not the first time ...
The Treasury has published a paper today on the global productivity slowdown and how it is playing out in New Zealand: The productivity slowdown: implications for the Treasury’s forecasts and projections. The Treasury Paper examines recent trends in productivity and the potential drivers of the slowdown. Productivity for the whole economy ...
Winston Peters’ comments about former Australian foreign minister look set to be an ongoing headache for both him and Luxon. Photo: Lynn Grieveson / The KākāTL;DR: The podcast above of the weekly ‘hoon’ webinar for subscribers features co-hosts and , along with regular guests on Gaza and ...
These puppet strings don't pull themselvesYou're thinking thoughts from someone elseHow much time do you think you have?Are you prepared for what comes next?The debating chamber can be a trying place for an opposition MP. What with the person in charge, the speaker, typically being an MP from the governing ...
The land around Lyme Regis, where Meryl Streep once stood, in a hood, on the Cobb, is falling into the sea.MerylThe land around Lyme Regis, around the Cobb that made it rich, has always been falling slowly but surely into the sea. Read more ...
Buzz from the Beehive Foreign Affairs Minister Winston Peters was bound to win headlines when he set out his thinking about AUKUS in his speech to the New Zealand Institute of International Affairs. The headlines became bigger when – during an interview on RNZ’s Morning Report today – he criticised ...
The Post reports on how the government is refusing to release its advice on its corrupt Muldoonist fast-track law, instead using the "soon to be publicly available" refusal ground to hide it until after select committee submissions on the bill have closed. Fast-track Minister Chris Bishop's excuse? “It's not ...
As pressure on it grows, the livestock industry’s approach to the transition to Net Zero is increasingly being compared to that of fossil fuel interests. Photo: Lynn Grieveson / Getty ImagesTL;DR: Here’s the top five news items of note in climate news for Aotearoa-NZ this week, and a discussion above ...
The New Zealand Herald reports – Stats NZ has offered a voluntary redundancy scheme to all of its workers as a way to give staff some control over their “future” amidst widespread job losses in the public sector. In an update to staff this morning, seen by the Herald, Statistics New Zealand ...
On Werewolf/Scoop, I usually do two long form political columns a week. From now on, there will be an extra column each week about music and movies. But first, some late-breaking political events:The rise in unemployment numbers for the March quarter was bigger than expected – and especially sharp ...
David Farrar writes – The Herald reports: TVNZ says it is dealing with about 50 formal complaints over its coverage of the latest 1News-Verian political poll, with some viewers – as well as the Prime Minister and a former senior Labour MP – critical of the tone of the 6pm report. ...
Muriel Newman writes – When Meridian Energy was seeking resource consents for a West Coast hydro dam proposal in 2010, local Maori “strenuously” objected, claiming their mana was inextricably linked to ‘their’ river and could be damaged. After receiving a financial payment from the company, however, the Ngai Tahu ...
Alwyn Poole writes – “An SEP,’ he said, ‘is something that we can’t see, or don’t see, or our brain doesn’t let us see, because we think that it’s somebody else’s problem. That’s what SEP means. Somebody Else’s Problem. The brain just edits it out, it’s like a ...
Our trust in our political institutions is fast eroding, according to a Maxim Institute discussion paper, Shaky Foundations: Why our democracy needs trust. The paper – released today – raises concerns about declining trust in New Zealand’s political institutions and democratic processes, and the role that the overuse of Parliamentary urgency ...
This article was prepared for publication yesterday. More ministerial announcements have been posted on the government’s official website since it was written. We will report on these later today …. Buzz from the BeehiveThere we were, thinking the environment is in trouble, when along came Jones. Shane Jones. ...
New Zealand now has the fourth most depressed construction sector in the world behind China, Qatar and Hong Kong. Photo: Lynn Grieveson / The KākāTL;DR: These are the six things that stood out to me in news and commentary on Aotearoa-NZ’s political economy at 8:46am on Thursday, May 2:The Lead: ...
David Seymour has failed to get the sweeping cuts he wanted to the free and healthy school lunch programme, Labour education spokesperson Jan Tinetti said. ...
Hon Willie Jackson has been invited by the Oxford Union to debate the motion “This House Believes British Museums are not Very British’ on May 23rd. ...
Green Party MP Hūhana Lyndon says her Public Works (Prohibition of Compulsory Acquisition of Māori Land) Amendment Bill is an opportunity to right some past wrongs around the alienation of Māori land. ...
A senior, highly respected King’s Counsel with decades of experience in our law courts, Gary Judd KC, has filed a complaint about compulsory tikanga Māori studies for law students - highlighting the utter depths of absurdity this woke cultural madness has taken our society. The tikanga regulations will compel law ...
The Government needs to be clear with the people of the Nelson Marlborough region about the changes it is considering for the Nelson Hospital rebuild, Labour health spokesperson Ayesha Verrall said. ...
Ministers must front up about which projects it will push through under its Fast Track Approvals legislation, Labour environment spokesperson Rachel Brooking said today. ...
The Government is again adding to New Zealand’s growing unemployment, this time cutting jobs at the agencies responsible for urban development and growing much needed housing stock. ...
With Minister Karen Chhour indicating in the House today that she either doesn’t know or care about the frontline cuts she’s making to Oranga Tamariki, we risk seeing more and more of our children falling through the cracks. ...
The Labour Party is saddened to learn of the death of Sir Robert Martin, a globally renowned disability advocate who led the way for disability rights both in New Zealand and internationally. ...
Labour is calling for the Government to urgently rethink its coalition commitment to restart live animal exports, Labour animal welfare spokesperson Rachel Boyack said. ...
Today’s Financial Stability Report has once again highlighted that poverty and deep inequality are political choices - and this Government is choosing to make them worse. ...
The Green Party is calling on the Government to do more for our households in most need as unemployment rises and the cost of living crisis endures. ...
Unemployment is on the rise and it’s only going to get worse under this Government, Labour finance spokesperson Barbara Edmonds said. Stats NZ figures show the unemployment rate grew to 4.3 percent in the March quarter from 4 percent in the December quarter. “This is the second rise in unemployment ...
The New Zealand Labour Party welcomes the entering into force of the European Union and New Zealand free trade agreement. This agreement opens the door for a huge increase in trade opportunities with a market of 450 million people who are high value discerning consumers of New Zealand goods and ...
The National-led Government continues its fiscal jiggery pokery with its Pharmac announcement today, Labour Health spokesperson Ayesha Verrall says. “The government has increased Pharmac funding but conceded it will only make minimal increases in access to medicine”, said Ayesha Verrall “This is far from the bold promises made to fund ...
This afternoon’s interim Waitangi Tribunal report must be taken seriously as it affects our most vulnerable children, Labour children’s spokesperson Willow-Jean Prime. ...
Te Pāti Māori are demanding the New Zealand Government support an international independent investigation into mass graves that have been uncovered at two hospitals on the Gaza strip, following weeks of assault by Israeli troops. Among the 392 bodies that have been recovered, are children and elderly civilians. Many of ...
Our two-tiered system for veterans’ support is out of step with our closest partners, and all parties in Parliament should work together to fix it, Labour veterans’ affairs spokesperson Greg O’Connor said. ...
Stripping two Ministers of their portfolios just six months into the job shows Christopher Luxon’s management style is lacking, Labour Leader Chris Hipkins said. ...
Tonight’s court decision to overturn the summons of the Children’s Minister has enabled the Crown to continue making decisions about Māori without evidence, says Te Pāti Māori spokesperson for Children, Mariameno Kapa-Kingi. “The judicial system has this evening told the nation that this government can do whatever they want when ...
It appears Nicola Willis is about to pull the rug out from under the feet of local communities still dealing with the aftermath of last year’s severe weather, and local councils relying on funding to build back from these disasters. ...
The Government is making short-sighted changes to the Resource Management Act (RMA) that will take away environmental protection in favour of short-term profits, Labour’s environment spokesperson Rachel Brooking said today. ...
Labour welcomes the release of the report into the North Island weather events and looks forward to working with the Government to ensure that New Zealand is as prepared as it can be for the next natural disaster. ...
The Labour Party has called for the New Zealand Government to recognise Palestine, as a material step towards progressing the two-State solution needed to achieve a lasting peace in the region. ...
Some of our country’s most important work, stopping the sexual exploitation of children and violent extremism could go along with staff on the frontline at ports and airports. ...
The Government’s Fast Track Approvals Bill will give projects such as new coal mines a ‘get out of jail free’ card to wreak havoc on the environment, Labour Leader Chris Hipkins said today. ...
The government's decision to reintroduce Three Strikes is a destructive and ineffective piece of law-making that will only exacerbate an inherently biased and racist criminal justice system, said Te Pāti Māori Justice Spokesperson, Tākuta Ferris, today. During the time Three Strikes was in place in Aotearoa, Māori and Pasifika received ...
Cuts to frontline hospital staff are not only a broken election promise, it shows the reckless tax cuts have well and truly hit the frontline of the health system, says Labour Health spokesperson Ayesha Verrall. ...
The Green Party has joined the call for public submissions on the fast-track legislation to be extended after the Ombudsman forced the Government to release the list of organisations invited to apply just hours before submissions close. ...
New Zealand’s good work at reducing climate emissions for three years in a row will be undone by the National government’s lack of ambition and scrapping programmes that were making a difference, Labour Party climate spokesperson Megan Woods said today. ...
Associate Education Minister David Seymour has today announced that the Government will be delivering a more efficient Healthy School Lunches Programme, saving taxpayers approximately $107 million a year compared to how Labour funded it, by embracing innovation and commercial expertise. “We are delivering on our commitment to treat taxpayers’ money ...
New research on the impacts of extreme weather on coastal marine habitats in Tairāwhiti and Hawke’s Bay will help fishery managers plan for and respond to any future events, Oceans and Fisheries Minister Shane Jones says. A report released today on research by Niwa on behalf of Fisheries New Zealand ...
Deputy Prime Minister and Foreign Minister Winston Peters will lead a broad political delegation on a five-stop Pacific tour next week to strengthen New Zealand’s engagement with the region. The delegation will visit Solomon Islands, Papua New Guinea, Vanuatu, New Caledonia, and Tuvalu. “New Zealand has deep and ...
There has been a material decline in gas production according to figures released today by the Gas Industry Co. Figures released by the Gas Industry Company show that there was a 12.5 per cent reduction in gas production during 2023, and a 27.8 per cent reduction in gas production in the ...
Defence Minister Judith Collins tonight announced the recipients of the Minister of Defence Awards of Excellence for Industry, saying they all contribute to New Zealanders’ security and wellbeing. “Congratulations to this year’s recipients, whose innovative products and services play a critical role in the delivery of New Zealand’s defence capabilities, ...
Welcome to you all - it is a pleasure to be here this evening.I would like to start by thanking Greg Lowe, Chair of the New Zealand Defence Industry Advisory Council, for co-hosting this reception with me. This evening is about recognising businesses from across New Zealand and overseas who in ...
It is a pleasure to be speaking to you as the Minister for Digitising Government. I would like to thank Akolade for the invitation to address this Summit, and to acknowledge the great effort you are making to grow New Zealand’s digital future. Today, we stand at the cusp of ...
New Zealand is urging both Israel and Hamas to agree to an immediate ceasefire to avoid the further humanitarian catastrophe that military action in Rafah would unleash, Foreign Minister Winston Peters says. “The immense suffering in Gaza cannot be allowed to worsen further. Both sides have a responsibility to ...
A new online data dashboard released today as part of the Government’s school attendance action plan makes more timely daily attendance data available to the public and parents, says Associate Education Minister David Seymour. The interactive dashboard will be updated once a week to show a national average of how ...
Foreign Minister Winston Peters has announced Rosemary Banks will be New Zealand’s next Ambassador to the United States of America. “Our relationship with the United States is crucial for New Zealand in strategic, security and economic terms,” Mr Peters says. “New Zealand and the United States have a ...
The Government is considering creating a new tier of minerals permitting that will make it easier for hobby miners to prospect for gold. “New Zealand was built on gold, it’s in our DNA. Our gold deposits, particularly in regions such as Otago and the West Coast have always attracted fortune-hunters. ...
Minister for Trade Todd McClay today announced that New Zealand and the United Arab Emirates (UAE) will commence negotiations on a free trade agreement (FTA). Minister McClay met with his counterpart UAE Trade Minister Dr Thani bin Ahmed Al Zeyoudi in Dubai, where they announced the launch of negotiations on a ...
New Zealand Sign Language Week is an excellent opportunity for all Kiwis to give the language a go, Disabilities Issues Minister Louise Upston says. This week (May 6 to 12) is New Zealand Sign Language (NZSL) Week. The theme is “an Aotearoa where anyone can sign anywhere” and aims to ...
Six tertiary students have been selected to work on NASA projects in the US through a New Zealand Space Scholarship, Space Minister Judith Collins announced today. “This is a fantastic opportunity for these talented students. They will undertake internships at NASA’s Ames Research Center or its Jet Propulsion Laboratory (JPL), where ...
New Zealanders will be safer because of a $1.9 billion investment in more frontline Corrections officers, more support for offenders to turn away from crime, and more prison capacity, Corrections Minister Mark Mitchell says. “Our Government said we would crack down on crime. We promised to restore law and order, ...
The OECD’s latest report on New Zealand reinforces the importance of bringing Government spending under control, Finance Minister Nicola Willis says. The OECD conducts country surveys every two years to review its members’ economic policies. The 2024 New Zealand survey was presented in Wellington today by OECD Chief Economist Clare Lombardelli. ...
The Government has delivered on its election promise to provide a financially sustainable model for Auckland under its Local Water Done Well plan. The plan, which has been unanimously endorsed by Auckland Council’s Governing Body, will see Aucklanders avoid the previously projected 25.8 per cent water rates increases while retaining ...
Foreign Minister Winston Peters discussed the need for an immediate ceasefire in Gaza, and enhanced cooperation in the Pacific with German Foreign Minister Annalena Baerbock during her first official visit to New Zealand today. "New Zealand and Germany enjoy shared interests and values, including the rule of law, democracy, respect for the international system ...
The Minister Responsible for RMA Reform, Chris Bishop today released his decision on four recommendations referred to him by the Western Bay of Plenty District Council, opening the door to housing growth in the area. The Council’s Plan Change 92 allows more homes to be built in existing and new ...
Thank you, John McKinnon and the New Zealand China Council for the invitation to speak to you today. Thank you too, all members of the China Council. Your effort has played an essential role in helping to build, shape, and grow a balanced and resilient relationship between our two ...
The Government is modernising insurance law to better protect Kiwis and provide security in the event of a disaster, Commerce and Consumer Affairs Minister Andrew Bayly announced today. “These reforms are long overdue. New Zealand’s insurance law is complicated and dated, some of which is more than 100 years old. ...
The coalition Government is refreshing its approach to supporting pay equity claims as time-limited funding for the Pay Equity Taskforce comes to an end, Public Service Minister Nicola Willis says. “Three years ago, the then-government introduced changes to the Equal Pay Act to support pay equity bargaining. The changes were ...
Structured literacy will change the way New Zealand children learn to read - improving achievement and setting students up for success, Education Minister Erica Stanford says. “Being able to read and write is a fundamental life skill that too many young people are missing out on. Recent data shows that ...
Trade Minister Todd McClay says Canada’s refusal to comply in full with a CPTPP trade dispute ruling in our favour over dairy trade is cynical and New Zealand has no intention of backing down. Mr McClay said he has asked for urgent legal advice in respect of our ‘next move’ ...
The rights of our children and young people will be enhanced by changes the coalition Government will make to strengthen oversight of the Oranga Tamariki system, including restoring a single Children’s Commissioner. “The Government is committed to delivering better public services that care for our most at-risk young people and ...
The Government is making it easier for minor changes to be made to a building consent so building a home is easier and more affordable, Building and Construction Minister Chris Penk says. “The coalition Government is focused on making it easier and cheaper to build homes so we can ...
New Zealand lost a true legend when internationally renowned disability advocate Sir Robert Martin (KNZM) passed away at his home in Whanganui last night, Disabilities Issues Minister Louise Upston says. “Our Government’s thoughts are with his wife Lynda, family and community, those he has worked with, the disability community in ...
Good evening – Before discussing the challenges and opportunities facing New Zealand’s foreign policy, we’d like to first acknowledge the New Zealand Institute of International Affairs. You have contributed to debates about New Zealand foreign policy over a long period of time, and we thank you for hosting us. ...
From today, passengers travelling internationally from Auckland Airport will be able to keep laptops and liquids in their carry-on bags for security screening thanks to new technology, Transport Minister Simeon Brown says. “Creating a more efficient and seamless travel experience is important for holidaymakers and businesses, enabling faster movement through ...
People with an interest in the health of Northland’s marine ecosystems are invited to a public meeting to discuss how to deal with kina barrens, Oceans and Fisheries Minister Shane Jones says. Mr Jones will lead the discussion, which will take place on Friday, 10 May, at Awanui Hotel in ...
Kiwi exporters are $100 million better off today with the NZ EU FTA entering into force says Trade Minister Todd McClay. “This is all part of our plan to grow the economy. New Zealand's prosperity depends on international trade, making up 60 per cent of the country’s total economic activity. ...
There are heartening signs that the extractive sector is once again becoming an attractive prospect for investors and a source of economic prosperity for New Zealand, Resources Minister Shane Jones says. “The beginnings of a resurgence in extractive industries are apparent in media reports of the sector in the past ...
The return of the historic Ō-Rākau battle site to the descendants of those who fought there moved one step closer today with the first reading of Te Pire mō Ō-Rākau, Te Pae o Maumahara / The Ō-Rākau Remembrance Bill. The Bill will entrust the 9.7-hectare battle site, five kilometres west ...
Energy Minister Simeon Brown has announced 25 new high-speed EV charging hubs along key routes between major urban centres and outlined the Government’s plan to supercharge New Zealand’s EV infrastructure. The hubs will each have several chargers and be capable of charging at least four – and up to 10 ...
The coalition Government will not proceed with the previous Government’s plans to regulate residential property managers, Housing Minister Chris Bishop says. “I have written to the Chairperson of the Social Services and Community Committee to inform him that the Government does not intend to support the Residential Property Managers Bill ...
The Government has announced an independent review into the disability support system funded by the Ministry of Disabled People – Whaikaha. Disability Issues Minister Louise Upston says the review will look at what can be done to strengthen the long-term sustainability of Disability Support Services to provide disabled people and ...
Justice Minister Paul Goldsmith has attended the Universal Periodic Review in Geneva and outlined the Government’s plan to restore law and order. “Speaking to the United Nations Human Rights Council provided us with an opportunity to present New Zealand’s human rights progress, priorities, and challenges, while responding to issues and ...
The Government and Rotorua Lakes Council are committed to working closely together to end the use of contracted emergency housing motels in Rotorua. Associate Minister of Housing (Social Housing) Tama Potaka says the Government remains committed to ending the long-term use of contracted emergency housing motels in Rotorua by the ...
Trade Minister Todd McClay heads overseas today for high-level trade talks in the Gulf region, and a key OECD meeting in Paris. Mr McClay will travel to Riyadh to meet with counterparts from Saudi Arabia and the Gulf Cooperation Council (GCC). “New Zealand’s goods and services exports to the Gulf region ...
Education Minister Erica Stanford has outlined six education priorities to deliver a world-leading education system that sets Kiwi kids up for future success. “I’m putting ambition, achievement and outcomes at the heart of our education system. I want every child to be inspired and engaged in their learning so they ...
RNZ News As Israel presses ahead with strikes in Rafah and seizing the Rafah crossing from Egypt, aid agencies are sounding the alarm of a “catastrophic humanitarian situation”. Rafah was “significant” because it was the only part in Gaza that had not been terribly damaged by the conflict, United Nations ...
Source: The Conversation (Au and NZ) – By Anna Cooke, Honorary Fellow, School of the Environment, The University of Queensland We feel ecological grief when we lose places, species or ecosystems we value and love. These losses are a growing threat to mental health and wellbeing globally. We all see ...
Source: The Conversation (Au and NZ) – By Shauna Brail, Associate Professor, Institute for Management & Innovation, University of Toronto A shift to hybrid and remote work continues to affect worker presence in Toronto’s downtown.(Shutterstock) Downtown Toronto, the core of Canada’s largest city, continues to reel from the lingering ...
Responding to an Auditor-General's report slamming failures in the administration of the 2023 General Election, Taxpayers’ Union Policy and Public Affairs Manager, James Ross, said: ...
The Taxpayers’ Union says the Beehive need to lead by example, following reports of more than $50,000 spent upgrading video conferencing equipment and furniture in the Prime Minister’s office. Taxpayers’ Union Campaign Manager, Connor Molloy, ...
An objective list of the 50 most powerful people in New Zealand, as judged by the Spinoff Editorial Board. It’s power list season, baby, and we want in on the action. Sure, there’s the rich list and the powerful “c-suite” list and the young people with power (hmmm) but here, ...
Source: The Conversation (Au and NZ) – By Thalia Anthony, Professor of Law, University of Technology Sydney ShutterstockThis article contains information on deaths in custody and the names of deceased people, and describes ongoing colonial violence towards Aboriginal and Torres Strait Islander people. First Nations people in Australia ...
Source: The Conversation (Au and NZ) – By Alex Simpson, Senior Lecturer in Criminology, Macquarie University Netflix Baby Reindeer’s phenomenal success has much to do with its writer and lead, Richard Gadd, who plays Donny in a tender semi-autobiographical account of sexual abuse, harassment and stalking. Gadd’s story has ...
Source: The Conversation (Au and NZ) – By Clare Collins, Laureate Professor in Nutrition and Dietetics, University of Newcastle KarolinaGrabowska/Pexels If you didn’t have food allergies as a child, is it possible to develop them as an adult? The short answer is yes. But the reasons why are much ...
Source: The Conversation (Au and NZ) – By Paul Moon, Professor of History, Auckland University of Technology Ans Westra, self-portrait, c. 1963. National Library ref AWM-0705-F They try but invariably fail – those writers who believe they are capable of encapsulating in prose or verse the essence of ...
Stewart Sowman-Lund looks at the growing concern around the world in this extract from The Bulletin. To receive The Bulletin in full each weekday, sign up here. What’s all this? When Covid-19 arrived on our shores in early 2020, some argued we were too slow, or crucially, ill-prepared for a pandemic. So ...
Source: The Conversation (Au and NZ) – By Franco Montalto, Professor of Civil, Architectural and Environmental Engineering and Director, Sustainable Water Resource Engineering Laboratory, Drexel University Water runs into a storm drain in a Los Angeles alley on Aug. 19, 2023, during Tropical Storm Hilary.Citizen of the Planet/Universal Images ...
The inquest into the death of Gore toddler Lachlan Jones has turned up a new witness who says he saw two teenagers and a small child in a high vis vest in the area where the boy’s body was found the day he died. Lachie’s body was discovered face up ...
Stories from the tenancy trenches, featuring spider infestations, cupboard rats and same-sex discrimination. Lucy’s brother was living in a damp 1930s building in Mt Eden where “he had to tie the cupboard doors closed so the rats didn’t get in”. Although he shared custody of his six-year-old son, his property ...
Simeon Brown, Chris Luxon, and Wayne Brown climbed into a hole and announced a plan to solve Auckland’s water woes. This is how it’ll work. New Zealand’s pipes are munted. They’re cracked and leaking, and struggling to handle all the extra poos excreted by our rising population. It’s a big, ...
I knew Taika Waititi quite well when he was a kid. His mother lived in a tall narrow house in Aro St, and my youngest sister had a similar house two doors along. They were both single mums, they each had a son aged seven. Taika and my nephew Stepan ...
Opinion: “As time passes, knowledge of the circumstances of the August 2016 outbreak will fade and its immediate impact will be lost.” This statement is from the 2017 report of the Official Inquiry into the Havelock North campylobacteriosis outbreak. The then National-led government established the inquiry after the outbreak left ...
Opinion: Nicholas Khoo looks at two key points in the high-stakes foreign policy pact debate – and asks if NZ can engage with as little drama as possible. The post Where to next for the Aukus ruckus? appeared first on Newsroom. ...
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Opinion: ‘Reference-class forecasting’ is at the heart of improving pricing a project and identifying the expected timeframe but it doesn’t appear to be in use here The post ‘Think fast and act slowly’ is failing big projects appeared first on Newsroom. ...
What do a sombrero in Argentina and cognitive driving tests have in common? Don’t worry, we’re not setting up a bad joke. Hinengaro Clinic dementia clinician Gregory Winkelman has the answer on today’s episode of The Detail. “We ask a patient’s spouse or son or daughter: If you went to ...
Wellington long jumper Phoebe Edwards is back and she’s having fun again. Until this year, Edwards, a top athlete in her teens, had never competed as a senior athlete in New Zealand. In March, the 26-year-old won a national long jump title in a lifetime best of 6.28m after ...
After replacing a fifth of their caucus in just four months, the Greens’ opportunity to reset, reshuffle and refocus on the Government is quickly slipping away The post Persistent Green Party scandals delay caucus reset appeared first on Newsroom. ...
ANALYSIS:By Olli Hellmann, University of Waikato When New Zealanders commemorate Anzac Day today on April 25, it’s not only to honour the soldiers who lost their lives in World War I and subsequent conflicts, but also to mark a defining event for national identity. The battle of Gallipoli against ...
By Robin Martin, RNZ News reporter A New Zealand local authority, Whanganui District Council, has passed a motion calling for an immediate ceasefire in Gaza, condemnation of all acts of violence and terror against civilians on both sides of the conflict and the immediate return of hostages. It comes as ...
Asia Pacific Report The Aotearoa chapter of the Women’s International league for Peace and Freedom (WILPF) has appealed to the New Zealand government to call out Israel over the “cruel and barbaric use of force” in Gaza and demand a permanent ceasefire. The league’s open letter was sent to Prime ...
Source: The Conversation (Au and NZ) – By Michelle Grattan, Professorial Fellow, University of Canberra The Albanese government will invest $566 million over a decade on data, maps and other tools to promote exploration and development in Australia’s resources industry. The project will fund “the first comprehensive map of what’s ...
Asia Pacific Report Following an open letter by Auckland University academics speaking out in support of their students’ right to protest against the genocidal Israeli war on Gaza, a group of academics at Otago University have today also called on New Zealand academic institutions to “repair colonial violence” and end ...
Source: The Conversation (Au and NZ) – By Linda J. Graham, Professor and Director of the Centre for Inclusive Education, Queensland University of Technology Ryan Tauss/ Unsplash, CC BY Two male students have been expelled from a Melbourne private school for their involvement in a list ranking female students. ...
Source: The Conversation (Au and NZ) – By Peter Martin, Visiting Fellow, Crawford School of Public Policy, Australian National University The Reserve Bank is now assuming Australians will see no interest rate cuts this year – and quite possibly none before the next federal election, due next May. That’s ...
Source: The Conversation (Au and NZ) – By David Hayward, Emeritus Professor of Public Policy, RMIT University The Victorian budget offered more of the same on Tuesday, with the only change being how the budget papers were packaged. The usual shrink wrap was gone, hinting at savings in the pages ...
Source: The Conversation (Au and NZ) – By Michelle Grattan, Professorial Fellow, University of Canberra The Coalition is demanding extensive amendments to the government’s legislation targeting non-citizens who refuse to co-operate with their removal. In a dissenting report to the senate inquiry into the legislation, the Coalition says it ...
Source: The Conversation (Au and NZ) – By Vanita Yadav, Senior Research Fellow, Urban Transformations Research Centre, Western Sydney University Brett Boardman/Belvoir The complex and grappling issue of violence against women takes centre stage in the soul-stirring solo dance drama Nayika: A Dancing Girl. During a dinner conversation ...
Disruption to patient care from a nationwide junior doctors strike is bordering on unsafe, a senior doctor claims, despite what health officials say. ...
Source: The Conversation (Au and NZ) – By Sarah Diepstraten, Senior Research Officer, Blood Cells and Blood Cancer Division, Walter and Eliza Hall Institute Ground Picture/Shutterstock The anti-cancer drug abemaciclib (also known as Vernezio) has this month been added to the Australian Pharmaceutical Benefits Scheme (PBS) to treat certain ...
Source: The Conversation (Au and NZ) – By Dominic McAfee, Postdoctoral researcher, marine ecology, University of Adelaide Robbie Porter, OzFish Unlimited Around Australia, hundreds of people are coming together to help a once-prized, but decimated and largely forgotten marine ecosystem. They’re busy restoring Australia’s native oyster and mussel reefs. ...
Source: The Conversation (Au and NZ) – By Sara Webb, Lecturer, Centre for Astrophysics and Supercomputing, Swinburne University of Technology Austin Human/Unsplash How does Earth stop meteors from hitting Earth and hurting people? –Asher, 6 years 11 months, New South Wales Alright, let’s embark on a meteor ...
Source: The Conversation (Au and NZ) – By Rory Mulcahy, Associate Professor of Marketing, University of the Sunshine Coast Professional sports organisations regularly promote and develop initiatives to support diversity, equity and inclusion. While sport has the power to change attitudes by sparking conversations about political issues and social ...
Comment: The weekly Monday post-Cabinet press conference is a useful forum for observing Christopher Luxon and how he is developing into the job of Prime Minister. He attempts to convey the impression of a man of action, speaking fast, delivering memorised National Party strategies in a connect-the-slogans kind of way, ...
Double votes, missing ballot boxes, tired tech and stressed staff: how tick-tallying went astray at last year’s election. Cast your mind back to November 2023, that bleary-eyed post-election period duringwhichwewaited, andwaited, for a coalition deal to be hammered out. A distraction from the hotel-hopping of our ...
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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/