The ghost house epidemic and the invisible hand

54 comments on “The ghost house epidemic and the invisible hand ”

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1. Sabine 1

   13 June 2016 at 7:24 am

   as you can see the market is doing what it is supposed to do. Make money for a few at the cost of everyone else.
2. weka 2

   13 June 2016 at 7:30 am

   Two things.

   1. How many of the 33,000 empty houses are owned by NZers? Why don’t we gave systems in place that make tracking that easy?

   2. There is an incompatibility between housing as an investment by the middle classes and solving the housing crisis including homelessness. Can’t have both, and we should be talking about this by now.
3. One Anonymous Bloke 3

   13 June 2016 at 7:36 am

   Squatters’ rights. Problem solved.
   • vto 3.1

     13 June 2016 at 9:39 am

     +11111111111111111
     • Colonial Viper 3.1.1

       13 June 2016 at 10:42 am

       Yep. Which party should propose this measure.
       • vto 3.1.1.1

         13 June 2016 at 11:14 am

         Act. It lines up with their oft-times libertarian anarchic ways ..

         Act are the party of squatters.. if true to their beliefs
         • Colonial Viper 3.1.1.1.1

           13 June 2016 at 11:20 am

           Now that’s a very good point. Where did their libertarian principles go…
           • adam 3.1.1.1.1.1

             13 June 2016 at 12:39 pm

             Down the rabbit hole, the libertarians have been conned from day one. And the funny thing, most of them are in denial about it.

             LOLOLOLOLOLOLOLOLOLOLOLOLOLOLOL
         • AB 3.1.1.1.2

           13 June 2016 at 5:42 pm

           No – they fetishize property rights above all else
4. Rae 4

   13 June 2016 at 7:45 am

   Hey, I thought that figure of 33,000 “ghost” houses came from the 2013 census. I am quite happy to say that I reckon that 22,000 for 2015 is absolute rubbish, but even so, not an insignificant number. We are due another census next year and just before the one after that is due we should know how many of them were in 2017.
   Move along folks, nothing to see here.
5. red-blooded 5

   13 June 2016 at 7:47 am

   CGT is an obvious, reasonable policy. What are NZers so scared of? Other income is taxed…
   • Colonial Viper 5.1

     13 June 2016 at 10:35 am

     Yep. Labour should re-introduce its CGT policy ASAP.
     • b waghorn 5.1.1

       13 June 2016 at 11:04 am

       If they do it needs to be simple , no exemptions for anything other than the first home and all property that is in trusts and all farms .
       • b waghorn 5.1.1.1

         13 June 2016 at 11:33 am

         If they do it needs to be simple, no exemptions for anything other than the first home. Farms and houses in trusts should not be exempt.
6. Greg 6

   13 June 2016 at 7:49 am

   The council could simply put a vacant levy on them, if vacant for a period.
   The government is missing out on GST revenue of vacant houses, in using utilities,
   why isnt this a concern for our finance minister. Governments hate missing out on squeezing us for any tax that they can. They are quick enough to put a GST on a overseas firm supplying a service here.
   • hoom 6.1

     13 June 2016 at 10:04 am

     An interesting idea.

     I also wonder how many large family homes are inhabited by only 1 or 2 baby boomers.
     My father, stepmother & half-sister live in technically 3 bedrooms but with 2 studies & a 2nd lounge that could easily be a large 5th bedroom or core of a split dwelling. My mother lives alone (not in Auckland) in a 5 bedroom house that could also be easily split into 2 units.
     • D'Esterre 6.1.1

       13 June 2016 at 10:18 pm

       Hoom: “I also wonder how many large family homes are inhabited by only 1 or 2 baby boomers.”

       Probably true of many. But if our area is anything to go by, good luck with finding something smaller to trade down to: such places aren’t being built by developers because there’s no money to be made out of them.
   • Colonial Viper 6.2

     13 June 2016 at 10:37 am

     These property owners are already willing to forgo $25,000 per year rent on these properties.

     What is a “vacancy levy” going to do to encourage them to change their minds on that.

     Seriously, are market mechanisms what we are going to go with here as the solution?
7. One Anonymous Bloke 7

   13 June 2016 at 7:51 am

   I wonder whether people who made empty houses available to homeless families would succeed in offering a “claim of right” defence to charges of breaking & entering.
8. Esoteric Pineapples 8

   13 June 2016 at 9:00 am

   It’s the same as has happened in China with empty expensive apartment blocks with people living next door in hovels they can afford. It will only get worse under this govt. I wouldn’t be surprised to see the average Auckland house price at $1.5 million in a couple of years time as overseas funds continue to pump the market.
9. srylands 9

   13 June 2016 at 9:24 am

   There are some good points in this story. However the central premise is totally wrong. There is no invisible hand operating in the market for housing. In particular the supply of urban land is highly regulated. And poorly.

   As I have commented previously, the problem and the solutions are well articulated in the NZ PC report on housing affordability. A sister report on urban planning is pending.

   http://www.productivity.govt.nz/inquiry-content/1509?stage=4
   • vto 9.1

     13 June 2016 at 9:38 am

     Jeez, there are none so blind as those who will not see…

     The entire frikkin’ market for EVERYTHING is highly regulated you goober

     wake up man
   • Pat 9.2

     13 June 2016 at 9:41 am

     two points from your link…

     “Pressure on land prices needs to be reduced and the Commission has recommended that there be an immediate release of new land for residential development in high demand areas such as Auckland and Christchurch”.

     There is no shortage of available land in Christchurch and nor was there in 2012 when this report released, indeed currently the housing market has a glut of sections, it will still cost 200K plus for a section.

     The Commission has also recommended reconsideration of current social housing reforms.

     “The community housing sector has a unique and very valuable role to fill. It can provide below market rents and more security of tenure than is available from private landlords. It is also well suited to providing the range of ‘wrap around’ services required by many social housing tenants with needs that run well beyond just affordable housing.”

     “But, the social housing sector will need considerable assistance if it is to scale up to the extent required, and do so within a reasonably short timeframe. The Social Housing Fund set up to help the community housing sector grow is not equal to the task demanded of it”, said Mr Sherwin.

     As has been noted endlessly through the housing debate the key word is AFFORDABILITY
   • vto 9.3

     13 June 2016 at 9:51 am

     Hey srylands, how is your cherished free market working for apprentices and provision of people to build these houses?

     ha ha, what a larf. free market, ha ha

     maybe for plastic buckets at the warehouse it works, but that’s about it
     • Thinkerr 9.3.1

       13 June 2016 at 9:01 pm

       “…maybe for plastic buckets at the warehouse it works, but that’s about it.”

       What about the USA in the 1920s/30s? Mobsters selling ‘green beer’ to grocery stores in a truly unregulated market.
   • dv 9.4

     13 June 2016 at 9:51 am

     In particular the supply of urban land is highly regulated. And poorly.

     BUT BUT BUT how can that be with 40 houses being built a day.
     • You_Fool 9.4.1

       13 June 2016 at 11:11 am

       40 houses a day isn’t a suitable line in this thread, I mean the whole point of it was that there was a trickle down effect of those 40 houses a day (14,560 houses a year) but given that this data shows that approx 11,000 houses are left empty (or 30 houses a day) that line doesn’t work.

       Apparently we get a net increase of 10 houses a day…. i sure hope there is less than 10 families coming to Auckland every day…or our population growth is less than 0.04%/year
       • dv 9.4.1.1

         13 June 2016 at 11:14 am

         My point was that Stryland was pushing 40 houses a day myth lately, and yet the land supply is limited. Methinks a contradiction YF
         • framu 9.4.1.1.1

           13 June 2016 at 12:17 pm

           isnt that 40 per day just an extrapolation from consent numbers?

           ie: it has nothing to do with houses built or per day in any way whatsoever
           • Dv 9.4.1.1.1.1

             13 June 2016 at 12:33 pm

             Do ya mean stryland was telling porkies.
             Was he repeating English telling porky too!

             It was this Nat party tweet.
             “Around 40 houses are being built every working day in Auckland – four times more than when we came into office.” #PostCab
             • framu …

               13 June 2016 at 3:06 pm

               hmm – if its the same thing fisi was going on about its definately just building consents and not on a per day basis

               ie – its a steaming load
               • dv …

                 13 June 2016 at 7:04 pm

                 Yeh thought so framu .

                 Opps sorry Stryland.

                 They can’t help them selves!!!
10. Jack Ramaka 10

    13 June 2016 at 9:47 am

    I was told by NZ Resident Chinese 5-6 years ago Asians saw NZ as a safe haven to park their money, they wanted to diversify the spread of their assets as many had money denominated in US Assets, hence the investment in residential property here in NZ.

    There are 1.4 Billion people in China, with maybe 10% with funds to invest worldwide, this equals 140 million people, so it doesn’t take a big % of those people to start investing in NZ to drive the market upwards especially with our lax foreign investment regulations.
    • RedLogix 10.1

      13 June 2016 at 12:30 pm

      And no amount of ‘freed up land’ could ever satiate that demand.
11. marty mars 11

    13 June 2016 at 10:14 am

    Bloody immigrants – how could we let them do this // sarc

    yes the true cause is known, hell even twyford knows as he stated above – ‘super rich’ and I’d add their favorite ideology
    • vto 11.1

      13 June 2016 at 10:23 am

      Yep immigrants causing trouble in these lands again …. I hears ya marty mars …..

      You know where I see it going? Our islands are under-populated and like water finding its level we will one day become as densely populated as any other pleasantly supportive land on the planet i.e. circa 50-150 million….

      when will we get to that water level? All else being equal, I think within 100 years… which makes for some rather large waves washing ashore at times ….

      …. hold on for the ride
      • Colonial Viper 11.1.1

        13 June 2016 at 10:41 am

        Although I think Winston is being overzealous, I think cutting our immigration numbers by at least half is the way to go. Net population growth of no more than 1% p.a. please.

        Also we will require clear and firm measures to handle the millions of climate refugees that are going to be appearing globally in the next 15-20 years.
        • marty mars 11.1.1.1

          13 June 2016 at 10:50 am

          Each of those groups – Immigrants/refugees will be used as evidence to reduce the numbers of the other group.
          • RedLogix 11.1.1.1.1

            13 June 2016 at 12:33 pm

            So exactly what is your alternative plan marty? Your quick to play the race card against others, but rarely do I see you explain what you stand for.

            Logically for instance, if you argue it wrong to control immigrant numbers because it is inherently racist, does this mean you are advocating unconstrained migration?
            • marty mars 11.1.1.1.1.1

              13 June 2016 at 12:41 pm

              Sorry for not meeting your just and kind expectations and not giving my solutions to this in a way that suits you.
              • Colonial Viper …

                13 June 2016 at 12:45 pm

                NZ should take on several thousand more refugees a year than it has been. But annual immigration numbers need to be cut by 60,000 or more.
              • RedLogix …

                13 June 2016 at 12:46 pm

                That’s OK marty I understand if you don’t want to state openly what you stand for. It can be very unpleasant making yourself a target.
                • marty mars …

                  13 June 2016 at 1:07 pm

                  I just find listening a better way until I have something to say rather than, like many people, jumping to solutions too early, especially when the subject is charged.

                  I will show flaws in arguments as well as listen.

                  Could be cultural.
        • vto 11.1.1.2

          13 June 2016 at 11:12 am

          I don’t think mass migration of the kind implied will take any notice of dear old Winston and his populist rulings… no matter the law of the land they will come…

          this is the history
12. Poission 12

    13 June 2016 at 11:18 am

    The tenure of housing ownership in AK suggests it is a speculator driven market.

    The questions that arise is what is the IRD doing,? and is this indicative of a failure of the so called gvt brightline policy.

    “And if you look at Auckland, the most common length of time for an Aucklander to hold their property for is less than one year, followed by two to three years, followed by one to two years, and then eight years, which is kind of normal in a market,” he said.

    “Eight years is a distant fourth. So you’ve got this activity happening in Auckland of people buying and selling property really quickly. Why? Well, it’s not just investors. There are all sorts of people that go, ‘Because the market is increasing, I can make some money off it. I can move around in it.’ It becomes self-perpetuating. That’s the bit that as an economist looking at this you’d say, ‘That’s the bit I’m worried about, that speculation.”

    http://www.nbr.co.nz/article/risky-time-first-home-buyers-be-getting-auckland-market-corelogic-boss-ck-190263
13. Bill 13

    13 June 2016 at 11:49 am

    Squatters Rights.
    Application of formulae designed to limit rent levels.
    Draw up robust tenancy rights.(e.g. – Eviction for sake of sale not permissible; tenancies for life; leases transferable over generations)

    And compulsory purchase any speculative properties that are not squatted.
14. Anno1701 14

    13 June 2016 at 12:21 pm

    i know of some young people already living in “ghost houses”

    would be nice to see them given some protection under the law !
15. Phil 15

    13 June 2016 at 12:49 pm

    Hey, quick question: Where does the “officially” 33,000 number come from? There’s no source in the Herald article, as far as I can tell? It seems weird to quote something as official and not back it up with a reference to the actual source.

    The 22,000 number feels more ‘defendable’ to me – after, all it comes from the census.
    Note that “Nearly one-quarter were classified as unoccupied because all the occupants were temporarily away at the time of the census”. So, the number of “ghost houses” is probably closer to 16,500.

    http://www.stats.govt.nz/Census/2013-census/profile-and-summary-reports/quickstats-about-housing/occupied-unoccupied-dwellings.aspx
    • Hanswurst 15.1

      14 June 2016 at 12:25 am

      I know you only meant it as a “quick question”, but I would still have to question how hard you looked, since a likely answer is to be found not too far from your link. Having said that, it also seems to be exactly the right question. Grabbing the spreadsheet with tables on unoccupied housing in the 2013 census from Stats NZ, it looks to me like the two figures are actually from the same set of data. Firstly, your “one-quarter” figure for technically unoccupied houses because the occupants were away is for all of NZ. Secondly, and more importantly, Table 2, for “Occupied dwellings, unoccupied dwellings, and dwellings under construction by regional council area” contains a figure of 11,208 for “residents away”, 22,152 for “empty dwelling”, yielding a total of 33,360 unoccupied dwellings all up – so the stat for Auckland is more like one-third of unoccupied houses being only technically unoccupied as a result of the occupants’ being away at the time of the census.

      Of course, there could be other stats, but those figures make me strongly suspect that the two articles are referring to the same data, with one taking into account the number of houses whose residents were away, and the other failing to do so.
      • Phil 15.1.1

        14 June 2016 at 9:31 am

        You’re right – I didn’t look very hard. But I did look a lot harder than the vast majority of people who are going to read the article and think about it uncritically.

        Anyway, thanks for the link to the tables. They raise another problematic point for thinking about solutions to the Auckland housing crisis (all numbers rounded to the nearest 1,000).

        Total-NZ
        Total occupied dwellings: 1,562,000
        Empty (excluding residents away) dwelling: 141,000
        Empty as % of occupied: 9.0%

        Auckland
        Total occupied dwellings: 472,000
        Empty (excluding residents away) dwelling: 22,000
        Empty as % of occupied: 4.7%

        Rest of NZ (by simple subtraction)
        Total occupied dwellings: 1,090,000
        Empty (excluding residents away) dwelling: 119,000
        Empty as % of occupied: 10.9%

        So, Auckland’s “excess capacity” of housing is roughly half what the rest of the country is. This result is hard to square with suggestions of foreign (and/or local) investors in Auckland keeping houses unoccupied.
        • Dennis Frank 15.1.1.1

          15 June 2016 at 2:35 pm

          Well done, Phil, you seem to have got to the crux of the situation. Repeating an urban myth online is the current form of gossip. We expect blog respondents to be too lazy to check the facts, but when blog columnists do it we ought to be concerned – delusional tendencies become contagious.

          The Herald report three days ago relates the figure of 33,000 to the 2013 census, whereas Anthony Robins (above) cites the figure of 33,000 for 2016 with no source given to validate it. A year ago the Metro article attributed it to the 2013 census: “In Auckland, more than 33,000 houses were registered as unoccupied in the most recent data from 2013. A breakdown shows about a third had residents away. The remaining 22,152 properties are listed as empty.” (http://www.metromag.co.nz/city-life/property/running-on-empty/). That confirms Hanswurst is correct; both figures are three years old.

          I agree with Rae’s scepticism early in the comments a couple of days ago: much ado about nothing. No doubt the right would see all this as hard evidence of a typical leftist ploy: fake news, designed to con the public & scaremonger folks into believing things are worse than they actually are. I’m jumping to no such conclusion: Anthony may have a genuine source that validates his assertion, so let’s wait for him to produce it here. If it never shows up it’ll take us all a fraction of a second to figure out who lacks credibility, eh?
16. whateva next? 16

    13 June 2016 at 2:02 pm

    Looks like this was all very predictable, so given that the elite have managed to create this, explaining it to them seems to be preaching to the converted.
    I have started hearing the usually ” they’re all the same” ” I am not interested in politics” people saying they are uncomfortable knowing that people are unable to afford a roof over their heads…….so perhaps a dawning among those that have the power to vote out the smug pr***** is starting. Hallelujah.

    2014 “Here’s How NASA thinks Society will Collapse”:
    https://www.google.co.nz/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0ahUKEwi8poKf8qPNAhUJkZQKHeGRAFsQFggdMAA&url=http%3A%2F%2Fwww.theatlantic.com%2Fpolitics%2Farchive%2F2014%2F03%2Fheres-how-nasa-thinks-society-will-collapse%2F441375%2F&usg=AFQjCNFoy1lXf7HR5yKEz5uJRwIXyHZS-A
    • ropata 16.1

      14 June 2016 at 5:32 pm

      Interesting link but it’s not actually a study by NASA nor is it published in any academic journal. It’s more of a “thought experiment” with no empirical basis to its claims.
      http://climateandcapitalism.com/2014/03/31/nasa-collapse-study/

      (but it could well turn out to be correct anyway… )
17. Jenny 17

    14 June 2016 at 7:46 am

    He who frames the argument, wins the argument.

    Yesterday on the radio while driving to work I heard the Prime MInister saying that the government was doing a lot to solve the “housing shortage” and was freeing up a lot of extra land for developers.

    What “house shortage”?

    That is not the problem. The problem is that houses are too expensive to rent or buy due to a huge speculative bubble, that the government refuses to see, or admit to.

    Building more expensive houses that people can’t afford will not solve the problem.

    What this twisting of the reality shows, is that the only people whose interests the government are really interested in trying to protect are the developers and speculators, and the banks, who no doubt will be bailed out when it all bursts.

    In Ireland and California faced with similar housing bubbles they had to bulldoze newly built housing estates to keep the prices up because they couldn’t be sold at the speculative prices they were asking.

    http://www.dailymail.co.uk/news/article-2531852/Exorcising-Irelands-ghost-estates-Demolition-begins-housing-projects-built-economic-boom-left-country-300-000-homes.html

    
    
    

    The government here, with their wilful blindness to the nature of the crisis and their concentration on the so called “housing shortage” are heading down the same disastrous track.

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