The housing bubble

Written By: - Date published: 8:38 am, April 20th, 2014 - 176 comments
Categories: greens, housing, labour, national, same old national, Steven Joyce - Tags:

housing is a right

A recent article by Jesse Columbo in [published on the website of] that doyen of capitalist magazines Forbes about New Zealand’s housing market is a very interesting if somewhat terrifying read.  Although he is not the first to claim that our property market is unsustainable he says there is clearly a housing bubble.

American Economist Nouriel Roubini stated last year that New Zealand’s housing market was potentially toxic and was in danger of suffering a calamity.  Another American Economist Harry Dent has forecast a 30% to 50% correction once the Chinese Housing market also corrects from a bubble.

Columbo’s reasoning is compelling.  The following is a gross simplification of what he is saying but I believe the gist is clear:

  • Interest rates have been at an all time low for the past 5 years.
  • Property prices have doubled since 2004.
  • New Zealand’s home price-to-rent ratio is 77 percent above its historic average and its home price-to-income ratio is 26 percent above its historic average.
  • Our mortgage bubble has grown from $70 billion in 2002 to $186 billion in 2013.  That means that we pay the thick end of $6 billion a year more primarily to Australian banks.
  • Mortgages account for 60% of banks’ loan portfolios which could mean carnage if and when the bubble pops.
  • Australian and Chinese buyers are inflating the bubble.  Chinese buyers in particular who have access to 1% interest rates are able to justify spending significant amounts on New Zealand homes.  If the Chinese market goes and loans are required to be repaid quickly then a fire sale is on the cards.
  • Government debt has tripled since 2008.  If global interest rates increase then it is going to hurt.
  • New Zealand’s exchange rate is overvalued.  A sharp correction will almost inevitably cause an increase in interest rates.

The consequences of a bust are also clear.  Overleveraged borrowers will go broke, credit will dry up and unemployment will increase.   As Selwyn Pellett has been saying for years the basic problem with the New Zealand housing market is that more and more people are borrowing more and more money from Australian Banks to buy the same houses off each other.

This is scary stuff.

And the failure of the housing market can clearly be seen now.  Out west a modest three bedroom home in Glen Eden sold recently for $600,000.  A friend’s son has become one of the few young people I know who has been able to buy a two bedroom major fix up home for $425,000.  Our next generation must be wondering if they are ever going to own a home of their own.  And meanwhile with increasing values there is a comparable increase in rentals and many people are being rented out of the market.  If they are unemployed they could head for the country but no doubt it will be claimed that they are avoiding work and their benefit will then be taken off them.

National’s response to Columbo’s article are typical.  Stephen Joyce this morning attacked the messenger and called him an alarmist.   Obviously according to Joyce there is nothing to worry about.  And obviously it would be politically unpopular to even acknowledge that for the common good the value of peoples homes should be reduced.  Bernard Hickey said that the issues were real but that the talk was somewhat alarmist.  Both men miss the point though.  If there are these structural problems then something should be done.

You would think that the prospects would have any responsible Government taking urgent action to correct what is clearly a badly performing market.  Regrettably National’s approach seems to be:

  1. Deny there is a problem.
  2. Allow more urban sprawl.
  3. Stop most young kiwis from being able to afford to buy a home.
  4. Blame Labour.

Labour has a variety of policies which can address the problem.  These include the following:

  1. A capital gains tax on all homes apart from the family home.
  2. Kiwibuild – 100,000 affordable homes in the next decade.
  3. Restricting foreign speculators’ ability to buy residential property in New Zealand.

The Greens’ policies are similar.  They want to:

  • Reduce speculative investment in the housing market by tightening the rules around loss attributing qualifying companies and introducing a capital gains tax on all but the family home.
  • Increase peoples ability to save for a deposit and service a mortgage by increasing the minimum wage to no less than 66% of the average wage.
  • Introduce a Universal Child Benefit that can be capitalised towards the child’s first home.
  • Increase provision of low interest financing for low-income households seeking home ownership
  • Shift the standard tenancy conditions towards more secure and predictable tenure arrangements.

I hope that Columbo and Roubini and Dent are wrong.  But just in case the Government should be doing something to address what clearly is a major threat to New Zealand’s economy.

176 comments on “The housing bubble ”

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  1. Paul 1
    20 April 2014 at 8:50 am

    The issue isn’t just a housing problem. Our overall economy is about to tank. “Rock star economy.” Haha. It would a joke if the impacts weren’t so serious for ordinary NZers.

    I hope some of the corporate media apologise for their repetition of the National Party’s political message. Maybe some honesty now from the Herald about how much this government gas dragged us into debt, rather than the disingenuous reporting of a future budget surplus. A report detailing how Bill English has laid waste to the NZ economy under his watch. And an article describing how John Key has sold it to any wealthy corporate to loot.

    When is this country going to wake up?

    • Tc 1.1
      20 April 2014 at 9:26 am

      Yes that rockstar economy which has the predictable second album coming to the final track and an imminent breakup as the core players are fighting amongst themselves, leaving or preparing for life after the parliamentary trough.

      NACT have wilfully fuelled the bubble by not implementing CGT or preventing overseas speculators snapping up akl houses, I know many who have indulged based on the absense of a CGT.

      An auction this week on a house that went for 3times it’s mid 90’s price was being fought over by Chinese, Korean and others bidders backed by limitless funds and 1% interest, hardly a level field for first home kiwis seeking a foothold.

      Blinglish mates at the reserves new rules have just pushed the top end up and squeezed the bottom end so congrats bill, job done mate.

      • Paul 1.1.1
        20 April 2014 at 9:32 am

        His actions border on treason.

      • mickysavage 1.1.2
        20 April 2014 at 9:40 am

        Spot on TC. Those 1% interest loans are a killer and make all the difference. They chance the buying dynamic and until those rates rise more and more of the country is going to be sold to overseas interests.

      • greywarbler 1.1.3
        20 April 2014 at 1:35 pm

        Steven Joyce is busy on radio making sneering comments about this guy from Fortune magazine that is offering warnings. But Joyce doesn’t want to take up the offer. The guy says we have a housing bubble and with rising interest rates we are likely to pop our bubble gum, and get that messy sticky stuff on our faces.

        But apparently we have very low government debt. How can this be when the gummint is borrowing to keep us going? Are they working on a two-trunks under the bed system. One full with gains and bubblegum, and the other with all the financial statements of a holding company called New Zild based somewhere offshore showing that it is just about bankrupt?

        Incidentally strange about housing – my neighbours have had a townhouse on the back of a two unit crosslease title on the market for over 9 months. They have reduced the price considerably, it’s QV or below but it won’t sell though it’s handy to the city. It has steps up from the flat street level so not prime for older people (slips, falls), has own garage, in good order, good neighbour.
        I think the low deposit situation has closed down opportunities for starter couples. No-one has been living there all the time it’s been for sale. I think no-one expected it to be rejected like this.

        See Radionz.
        http://www.radionz.co.nz/news/political/242126/joyce-pours-scorn-on-bubble-prediction
        “Associate Finance Minister Steven Joyce is scornful of suggestions that New Zealand is experiencing an economic bubble that might burst.
        He says New Zealand’s recovery is solid and broadly based.

        The prediction of a collapse came from an American economic commentator Jesse Colombo, writing in Forbes magazine….

        He added Mr Colombo has picked on housing in this country, but ignored other advantages like improving trade balances and low public debt..”

        • karol 1.1.3.1
          20 April 2014 at 1:41 pm

          I thought private debt has long been NZ’s biggest economic problem (in terms of conventional capitalist economics)?

          • greywarbler 1.1.3.1.1
            20 April 2014 at 3:26 pm

            That’s been stated for some time, that NZ government debt had been reasonable and that private debt is the cause of our current a/c deficit. (I think I have got that right – feel free to correct.)

            I went to wikipedia on the trail of our govt debt relative to others.
            Quite interesting how high to GDP the big countries are.
            Here are some I noted – all for 2012 unless stated.

            Public debt as percentage of GDP
            (CIA figures – USA Central Intelligence Agency.)
            UK 90%
            USA 72.50
            China 31.7

            Others
            Greece 161.3
            Portugal 123.6
            Spain 85.3
            Russia 12.2
            Ukraine 38.8

            Ireland 118
            Iceland 118.9
            Norway 30.3
            Finland 53.5

            Singapore 111.4
            Australia 29.30
            NZ 41.8

            Germany 2013 79.9
            Switzerland 2011 52.4
            Netherlands 68.7
            Vietnam 48.2
            Venezuela 49

            Nigeria 18.8
            Chile 10.1

            World 64

            So we are middling to low. Similar to Venezuela which I think has oil. And they are having economic troubles. If you are powerful or dynamic like Singapore financially, it seems that you can carry a lot of government debt and just play with the levers, but we need to be nearer Australia surely, above Chile but we both are mainly agricultural so near 30 maybe would be wise to aim for.

            And some stuff from Stuff on NZ, 9 November 2013.
            Government debt has reached $60 billion, having climbed $27 million a day since John Key became prime minister – and forecasts show it will rise for years to come. …

            It already equates to 28 per cent of New Zealand’s economic output, is more than $13,000 for every person in New Zealand and is forecast to climb by another $10b by 2017

            When National took control of the Beehive in 2008, debt was just over $10b, but Finance Minister Bill English said it inherited an expanding public sector at a time when the economy was shrinking….

            Labour finance spokesman David Parker said that in the first update after National become government, debt was forecast to be $45b in 2013, and only a third of the difference related to the impact of the earthquakes. http://www.stuff.co.nz/national/politics/9380846/Public-debt-climbs-by-27m-a-day

            http://www.interest.co.nz/news/59689/nzs-low-public-debt-means-govt-has-scope-delay-201415-surplus-imf-says-global-economy-wid
            8 June 2012
            And on a report by the IMFBased on its April mission, the IMF forecast New Zealand’s current account deficit widening to 7% of GDP over the “medium-term,” and its net external liabilities widening to 90% of GDP in 2017. At the end of December 2011, New Zealand’s net external liability position was NZ$147 billion, or the equivalent of 72% of GDP, according to Stats NZ.

            The New Zealand dollar would need to be weaker than its current level to contain this increase and limit a further buildup of foreign liabilities over the longer term, the IMF said.

            Some sources of opinion on housing affordability:
            http://www.interest.co.nz/category/tag/housing-affordability

            • poem 1.1.3.1.1.1
              22 April 2014 at 4:20 am

              Those figures are afew years old. I was under the impression that govt debt is closer to 76b+ and I certainly wouldn’t call NZ’s debt thats been racked up since national came power as “middling to low.” and the amount national have borrowed thus far, every NZer should be a millionaire a few times over !!!

  2. BM 2
    20 April 2014 at 8:57 am

    They don’t miss the point at all, this young guy makes his money being alarmist.that’s his specialty.

    He’s a doomer and besides no one has a crystal ball no one really knows whats ahead and it’s foolish to think that you do.

    Best to just use common sense and go with the flow.

    • mickysavage 2.1
      20 April 2014 at 9:04 am

      And Roubini and Dent? And don’t you think that the data should be addressed rather than the messenger attacked?

    • Paul 2.2
      20 April 2014 at 9:15 am

      Another economist who says our housing market is a bubble earlier this year.

      “Harry Dent has predicted some of the worst market crashes in recent history, including the decade-long economic slowdown in Japan in the 1990s and the 2008 global financial crisis.
      Now, he is predicting property prices in New Zealand will fall between 30 to 50 per cent in the next few years.
      Speaking from Australia – where he is promoting his latest book, The Demographic Cliff, and talking at seminars – Dent said New Zealand was in a property bubble that was ready to burst.
      He said the bubble was being propped up by baby boomers, immigration and foreign buyers, especially from China.
      Mr Dent predicts the next global financial crisis will see the unwinding of commodity prices. That would be bad news for New Zealand’s export-led economy, he said.
      The crisis – which Mr Dent predicts could start as early as this year – would be a major depression rather than a recession, he said.
      “China is holding up real estate, especially in Australia and New Zealand, and one of the reasons is the rich Chinese are getting out of the country.”

      BM’s solution. Ignore all warnings, as people did during the derivative boom….

      http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11207102

      • Paul 2.2.1
        20 April 2014 at 9:20 am

        And Roubini wrote in the Guardian in December 2013.

        “It is widely agreed that a series of collapsing housing market bubbles triggered the global financial crisis of 2008-2009, along with the severe recession that followed. While the United States is the best-known case, a combination of lax regulation and supervision of banks and low policy interest rates fueled similar bubbles in the United Kingdom, Spain, Ireland, Iceland, and Dubai.

        Now, five years later, signs of frothiness, if not outright bubbles, are reappearing in housing markets in Switzerland, Sweden, Norway, Finland, France, Germany, Canada, Australia, New Zealand, and, back for an encore, the UK (well, London). In emerging markets, bubbles are appearing in Hong Kong, Singapore, China, and Israel, and in major urban centers in Turkey, India, Indonesia, and Brazil.

        Signs that home prices are entering bubble territory in these economies include fast-rising home prices, high and rising price-to-income ratios, and high levels of mortgage debt as a share of household debt. In most advanced economies, bubbles are being inflated by very low short- and long-term interest rates. Given anaemic GDP growth, high unemployment, and low inflation, the wall of liquidity generated by conventional and unconventional monetary easing is driving up asset prices, starting with home prices.”

        http://www.theguardian.com/business/2013/dec/02/housing-bubble-bust-recession

    • Tracey 2.3
      20 April 2014 at 12:05 pm

      the emperor has no clothes bm

      • One Anonymous Bloke 2.3.1
        21 April 2014 at 8:43 am

        All the people who say that are alarmist doomers! It’s impossible to know what will happen. Winter might not follow summer.

  3. Pete George 3
    20 April 2014 at 9:02 am

    Such an extensive analysis of the article, related policies and subsequent Stuff responses published this morning is an impressive effort, but a small point from the opening sentence:

    A recent article by Jesse Columbo in that doyen of capitalist magazines Forbes…

    In the stuff article linked to:

    Hickey added that it appeared Colombo’s article had not been published in Forbes magazine proper, which was important when judging its credibility. Instead it was published on the Forbes website with a disclaimer saying Colombo’s opinions were his own.

    • karol 3.1
      20 April 2014 at 9:37 am

      Hmmm… yeah. But Forbes Magazine does tend to be a right leaning publication with links to the Republican Party.

      • BM 3.1.1
        20 April 2014 at 9:55 am

        It’s means the guys article was just opinion and website filler.
        Opinions are like arseholes, every one has one.

        • RedLogix 3.1.1.1
          20 April 2014 at 10:01 am

          Let’s compare the arguments and evidence made in Columbo’s article, along with his relevant track record of expertise – with the attempt at same you have just made BM?

          I’d suggest you have just made a bigger opinion of yourself than Columbo.

        • karol 3.1.1.2
          20 April 2014 at 10:07 am

          Or, it means the editors wanted to keep it on the margins of debate, contained in an op ed box, in spite of it including a range of supporting data.

        • Paul 3.1.1.3
          20 April 2014 at 10:28 am

          Charming, as ever.

        • ffloyd 3.1.1.4
          20 April 2014 at 10:56 am

          Bm Have you noticed that jkey starts most of his sentences with “In my opinion”

        • Tracey 3.1.1.5
          20 April 2014 at 12:07 pm

          and yet hes more expert than say slater or farrar to express an opinion on this topic…

        • fender 3.1.1.6
          20 April 2014 at 12:23 pm

          “……..everyone has one”.

          Nah, I suggest you have them in abundance, similar to how some teens have acne..

        • dave 3.1.1.7
          20 April 2014 at 7:10 pm

          so having a housing market the 3rd most expensive in the world is not a problem bm you continue with i love John key fan boy comments . its an inconvenient truth and typical nact fan boy you get nasty and blame every one but yourself s.

    • Draco T Bastard 3.2
      21 April 2014 at 5:22 pm

      I note that everything that PG says has never been published in Forbes magazine and thus has no credibility.

      /sqarc 🙄

  4. vto 4
    20 April 2014 at 9:12 am

    People who think rising house values are a good thing are nuts and fools. There are no net benefits to rising house values – it is only a negative.

    • Tc 4.1
      20 April 2014 at 9:32 am

      Yes wait till the top end start screaming as rortneys rates relief measures expire and they start copping full supershity rates based on their soaring values.

      I see inorganic collections are now cancelled in akl, one less service for higher rates, nice.

  5. Ergo Robertina 5
    20 April 2014 at 9:35 am

    A line that’s worked well in the past couple of years is that housing affordability is only a serious issue in Auckland and Christchurch. It’s been constantly repeated in the media, including by Opposition MPs. It’s obscured the issue of the huge international credit bubble threatening New Zealand with an illusion that domestic factors are the main driver.

    • Paul 5.1
      20 April 2014 at 10:20 am

      Totally agree. The corporate media has misrepresented events to suit their owners.
      Little has been said also of the amount of debt this government has got us into.
      You hear about the potential of a budget surplus. You don’t hear how much the country now owes thanks to the mismanagement of the economy by Key and English. Government overseas debt has nearly tripled since 2008.
      The Labour Party sadly is still a supporter of neoliberalism.
      When will NZers wake up to the truth of what’s going on in this country?

      • dave 5.1.1
        20 April 2014 at 7:19 pm

        its just not government debt its total debt the article is talking about sum total of all debt that will take us all out people total debt is 450 percent of GDP its huge and unplayable on nz incomes !

  6. RedLogix 6
    20 April 2014 at 9:49 am

    This is the one that pisses me off:

    Chinese buyers in particular who have access to 1% interest rates are able to justify spending significant amounts on New Zealand homes.

    Exactly how the hell is that happening? Why are we allowing Chinese banks to giving essentially free money to their citizens to buy NZ assets?

    And why cannot New Zealanders access this money? Why do we have to pay 6-7% for exactly the same asset?

    • tc 6.1
      20 April 2014 at 10:17 am

      The game is all about money and control RL, houses, infrastructure (power gen’s), farms, citizenship etc all you need is cash under the nact regime either up front or via a ‘charity’ like the waitemata trust.

      ‘Why are we allowing Chinese banks to giving essentially free money to their citizens to buy NZ assets….’ a great question to the nact by all and sundry running into the GE.

      Foreign ownership (i.e. control) of property, infrastructure and industry, selling out education to failed overseas dogma, labour laws for sale, TPPA etc all it took was 2 terms.

      a 3rd term under nact will decimate middle NZ, which will be job done for the hollow man having hollowed out NZ and handed it over to their backers.

      • Paul 6.1.1
        20 April 2014 at 7:22 pm

        Tragically, you write the truth.
        A sad end the country created by Michael Savage’s generation.
        The plutocrats are taking over the world and we are returning to the times of Dickens.

  7. Stephanie Rodgers 7
    20 April 2014 at 10:10 am

    Even if Colombo (and everyone else) is being alarmist, I’m inclined to agree with them. Because the problem is, I don’t see these issues being taken seriously by our government (which has done bugger-all to address house prices) or our media (which continues to breathlessly report every record-breaking house price like it’s a good thing, unless of course the purchaser looks like a foreigner).

    I’m sure before every major crash there’s someone who was saying ‘Um, guys, we have a problem’ who was dismissed as alarmist, a crank, a conspiracy theorist.

    • Paul 7.1
      20 April 2014 at 10:23 am

      Yes the Herald normally sounds like an outlet for the NZ real estate industry.

    • Pete George 7.2
      20 April 2014 at 10:27 am

      And I’m sure the number of people who say ‘Um, guys, we have a problem’ greatly outnumber crashes.

      We certainly have problems and potential crashes, always, and must be forever vigilant. But most of the time crashes are avoided. If I understand Greg correctly he seems to think Labour and Green policies would help avoid a crash – so it’s possible National policies could also help avoid a crash.

      Unless the crash is global in which case we can’t do anything but ride it out as best we can.

      • Paul 7.2.1
        20 April 2014 at 10:34 am

        Incorrect. We have some control.
        We can position the country better in the case of a world economic crisis.
        Being more local and less global for a start.
        We can nationalise banks.
        We can own our own assets.

        But I think you knew that.

        • dave 7.2.1.1
          20 April 2014 at 7:42 pm

          you can only control your own situation the last 2 years i have spent retiring all debt you can see
          signs are everywhere loan sharks pay day loans ,mortgage mountain, credit card debt,student loans ,farm debt, local body debt company debt Colombo just pointed out what was hidden in plain sight as a country collectively we are broke! again 1984,1984.1984,1984,1984,1984

          • Paul 7.2.1.1.1
            20 April 2014 at 7:49 pm

            You are right; individually , we can try to control our levels of debt.
            Countries can do things as well.
            Not signing agreements like the TPP retains more sovereignty and control.
            The banks hates countries like Venezuela and Iran because they are not under their control.

      • anker 7.2.2
        20 April 2014 at 11:01 am

        Crash or not surely NACT should have intervened, because an equally important issue as far as I am concerned is housing affordability.

        Nact have done nothing to address this.

      • RedLogix 7.2.3
        20 April 2014 at 11:13 am

        If you have no clue as to the root cause of asset prices bubbles – then I imagine the idea that ‘nothing can be done’ has some appeal.

      • Tracey 7.2.4
        20 April 2014 at 12:20 pm

        how many crashes since the great depression and how many since 1980.

        auckland house prices double every ten years… is the saying up and has been since the middle 70s.

        its the relationship/% of rent/mortgage to income that is killing.

        nats have made everyone fixated on reaching surplus.. which is a hat tip to cullen, of sorts.

        pete you seem so fatalistic.. hands in tge air about many things.

      • Stephanie Rodgers 7.2.5
        20 April 2014 at 3:13 pm

        How do we know ‘most of the time crashes are avoided’ if they don’t happen, Pete? Or is this another time when you just have ‘common sense’ on your side instead of actual citations?

      • mickysavage 7.2.6
        20 April 2014 at 4:47 pm

        I am saying Pete that National’s lack of policies will not help avoid a crash and makes it more likely to occur. Do you think that the Government is doing the right thing by sitting on its hands?

        • dave 7.2.6.1
          20 April 2014 at 7:51 pm

          crash happen when there is a mad rush for the exit by that time Elvis has long since left the building

        • poem 7.2.6.2
          22 April 2014 at 4:23 am

          No, they are not Mickysavage, the nats are doing what they alway do, deny there is even a problem !!

  8. tsmithfield 8
    20 April 2014 at 12:18 pm

    The article is quite self-contradictory and omits a number of relevant facts.

    It ignores the impact of the Christchurch rebuild that will positively impact the NZ economy for the next 10 years.

    On one hand he expects interest rates to rise. On the other hand he expects the currency to fall. However, rising interest rates tends to be supportive of a higher currency. So long as the differential remains between NZ interest rates and the rest of the world, then the NZ dollar will remain strong.

    The article ignores the fact that, although the RB is projected to raise interest rates, it therefore has plenty of headroom to drop rates again if things start heading south.

    The author points out that we have a high percentage (50%) on floating mortgage rates, but ignores the end part of the graph he refers to which shows a major dip in those on floating mortgage rates. This is clearly because the RB has been flagging increasing interest rates for quite awhile now. People, generally not being stupid, and motivated by self-preservation, have been switching to fixed mortgages. This continuing trend means the percentage exposed to floating interest rates will continue to drop, reducing the effect of floating interest rate.

    The author ignores the impact of demographics. Trends in recent times show increasing migration into the country. This means higher demand for housing which is supportive of housing prices.

    The author predicts the Australian economy to burst and therefore impact New Zealand. However, he ignores the effect this will have on Kiwis returning back to NZ (as is already happening) resulting in a further increase in migration back to NZ, along with capital inflows, therefore supportive of both the NZ dollar and house prices.

    In short, the article is sensational, self contradictory, and light on facts.

    • Tracey 8.1
      20 April 2014 at 12:24 pm

      but if labour were in govt you would agree with it.

      • tsmithfield 8.1.1
        20 April 2014 at 12:31 pm

        You’ve got me there! I have to admit that would be a unique circumstance where all of the predict outcomes could happen at once. 🙂

      • mickysavage 8.2.1
        20 April 2014 at 4:43 pm

        BM and TS why don’t you address the data rather than attacking the messenger?

        • tsmithfield 8.2.1.1
          20 April 2014 at 5:47 pm

          Actually, I did address the data. I don’t see to much in the way of personal attacks in anything I said. On the other hand, you just seem to be repeating his comments without much in the way of analysis at all.

          Here is another contradiction in his argument. He argues that the housing bubble is due to the current low interest rate regime. On the other hand, he points to the bubble occurring over the period starting 2004. From that starting point, and for four-five years after, interest rates were around 8%. So on one hand he provides evidence that house prices were increasing while at 8%. Yet on the other hand, he argues that interest rates increasing to around that level again will cause the market to crash.

          How about you apply some of your intelligence to actually addressing the points I made rather than accuse me of adhom. attacks that I didn’t make.

      • dave 8.2.2
        20 April 2014 at 7:58 pm

        bm gfc is still with us it aways was its a slow moving train wreak it just taken a few years for the tide to come in down under

    • Stephanie Rodgers 8.3
      20 April 2014 at 5:54 pm

      Do you know what else ‘ignores the impact of the Christchurch rebuild’? Our Government, every time they claim credit for economic growth.

    • The Chairman 8.4
      21 April 2014 at 6:22 am

      @ Tsmithfield

      The Christchurch rebuild is largely being funded by inflows of insurance payouts and increasing debt.

      Over the next 10 years increases in insurance premiums and debt repayment will largely eat away those gains.

      We’re all expecting interest rates to rise due to inflationary pressures.

      He expects the currency could possibly fall due to the Fed’s tapering. That being the case, interest rates would require to further increase to continue to attract capital inflows, which reduces that scope of lowering interest rates to compensate.

      Loans are being fixed at higher rates. Moreover, loans are not fixed for the duration, hence fixing merely delays the full negative impact of higher interest rates. It doesn’t negate it.

      While higher housing demand will help support house prices, in our low supply market it would also drive prices up. Resulting in more inflationary pressure and the negative impact of even higher interests rates.

      The variables he highlighters could align and result in a falling dollar and higher interest rates. Hence, it’s not a contradiction, its a possibility, depending on how the wider economic variables play out.

      In short, the article is only the key points and not a full report.

  9. Jack 9
    20 April 2014 at 1:35 pm

    Very difficult for 1st Home Buyers to compete with 1% interest rates out of Asia.

    I don’t understand why here in NZ we have the highest interest rates in the 1st World Countries and record Bank profits, increasing interest rates only benefits the Banks what about the productive sectors of the economy?

  10. jh 10
    20 April 2014 at 2:03 pm

    The Savings Working Group blamed tax breaks for property investors and immigration:

    Savings Working Group
    January 2011
    “The big adverse gap in productivity between New Zealand and other countries opened up from the 1970s to the early 1990s. The policy choice that increased immigration – given the number of employers increasingly unable to pay First-World wages to the existing population and all the capital requirements that increasing populations involve – looks likely to have worked almost directly against the adjustment New Zealand needed to make and it might have been better off with a lower rate of net immigration. This adjustment would have involved a lower real interest rate (and cost of capital) and a lower real exchange rate, meaning a more favourable environment for raising the low level of productive capital per worker and labour productivity. The low level of capital per worker is a striking symptom of New Zealand’s economic challenge.

    – Serious consideration of the impact of the level and variability of immigration on national saving, and the impact that this might have on the living standards of New Zealanders. There are indications that our high immigration rate has pushed up government spending, house prices and business borrowing.

    http://www.treasury.govt.nz/publications/reviews-consultation/savingsworkinggroup/pdfs/swg-report-jan11.pdf
    A recent Treasury Working Paper says the same thing

    On balance, the available evidence suggests that migration, in conjunction with sluggish supply of new housing and associated land use restrictions, may
    139
    have had a significant effect on house prices in New Zealand.

    http://www.treasury.govt.nz/publications/research-policy/wp/2014/14-10

    80% of population growth of the last 20 years has been from non NZ citizens. So people leave when things are bad but it is the topping up which has come from off shore which has created that statistic.

  11. jh 11
    20 April 2014 at 2:14 pm

    A lot of what goes on in our economy could be described as capital gain mining. Land value based taxation might deal to a lot of the incentive.

  12. Rosie 12
    20 April 2014 at 4:23 pm

    Thanks for posting on the Jesse Columbo article Mickey. Mr R and I were a bit freaked when we read it on stuffed yesterday. (And surprised to see such an article on stuff as well) Joyce’s response to it was predictable and lol no, he couldn’t support the content of the article could he!

    We wonder where such a bursting bubble leaves households like ours with only one income (I’m out of work) with 28 years left to pay a mortgage that we put an 7.8% deposit down on and we’re in our 40’s! We are holding our breath till September when our fixed rate of 4.89% ends, and as it is, we already live week to week with nothing left over.

    At the moment we feel the security of our home is at the whim of the banks and that they have far too much power over the ordinary NZer. NZer’s have they not, been thrown into the winds of “market forces” with little government intervention or regulation to support the easy access of NZer’s to affordable housing, whether it be rented or owned?

    • RedLogix 12.1
      20 April 2014 at 5:43 pm

      We wonder where such a bursting bubble leaves households like ours with only one income (I’m out of work) with 28 years left to pay a mortgage that we put an 7.8% deposit down on and we’re in our 40′s

      Fuck me Rosie – that sort of loan should be illegal predatory lending. Shameful.

      For those of you who thinking nothing can be done about house price bubbles here are the three steps needed to stop them in their tracks:

      The RB uses it’s regulatory power to limit bank lending to no more than 12 times the annual imputed rental value of a property. Currently they are lending anything up to 24 times that value. The reason why this works is that the rental value of a property can be quite accurately determined by valuers and it’s usually closely linked to real wages and actual use value.

      In order to prevent a property crash the RB phases in this limit by dropping the number by 1 every year, ie next year the limit is 23 times, the year after 22 times and so on. This lets normal inflation do most of the work for you and within a decade house prices are affordable again without anyone being hurt (except of course the bank shareholders who will hate it).

      Limit all residential property purchases to NZ residents only using NZ bank money only.

      Limit all table mortgages to no more than 18 years. That measure alone would force interest rates down.

      Existing overseas owners pay a 1-2% stamp duty tax per annum on property they already hold.

      If we did all these things there would be no need for a Capital Gains Tax – because there would be no capital gains.

      • greywarbler 12.1.1
        20 April 2014 at 5:51 pm

        RL
        I remember that you had or still have rental properties. Were you saying that somebody trashed one recently? It’s useful to have knowledgable sensible ideas coming.

        So your ideas would work, because of all you know about the sector. The idea of the sinking lid policy to prevent sudden loss of stability in the market is wise and doable.

        • RedLogix 12.1.1.1
          20 April 2014 at 6:07 pm

          Thanks gw.

          The property remains empty. We just don’t have the time or money to do anything about it at the moment. What actually hurts most is the breach of trust we put in the tenant involved – it’s a longish story and ultimately it’s going to be his loss not ours. We’ve only lost some money – he’s no longer trusted by anyone in town.

          Another critical measure that would be really worthwhile is to greatly improve the transportability of mortgages. The average household moves about once every five years or so, and most times they finish up refinancing with a new loan – which resets them to the start of the mortgage table again.

          If they continue to do this four or five times over 20 years or so – they will still have a sodding great mortgage and not have paid down much principle at all. If the banks however were required to transport existing mortgages onto new properties and retain the current schedule – this would hugely reduce the total amount of interest households pay.

          Most people would be very well advised to spend some time playing around with a mortgage calculator and learn how table mortgages really work.

          • greywarbler 12.1.1.1.1
            20 April 2014 at 6:19 pm

            RL Yes include that in the bright ideas list that is doable. Transferable mortgages are used in other countries – which? I don’t know but I believe I have read about them so someone else can look that up as I have to get dinner pronto.

            Time is passing and I have been here for ages. Hope I have done some good today.

          • Lanthanide 12.1.1.1.2
            20 April 2014 at 7:08 pm

            Another critical measure that would be really worthwhile is to greatly improve the transportability of mortgages. The average household moves about once every five years or so, and most times they finish up refinancing with a new loan – which resets them to the start of the mortgage table again.

            There’s no problem here other than mistakes made by the borrower.

            If you sell your property and buy another one that cost exactly the same as the one you’re selling, and the mortgage on your current property had 25 years left to run, it’s entirely your choice what mortgage term the new property would have – be it 25 years or 30 years. If you foolishly chose to have a 30 year term on the new mortgage, your repayments would be slightly lower, to be made up for with heaps more interest cost in long term. But it also means you get to “party” on the extra freed up money now.

            If the new house you’re buying costs more than your current one, which is usually the case, then that’s a good chance you would be needing to extend the term out to 30 years rather than 25, so that you can actually afford the repayments.

            • RedLogix 12.1.1.1.2.1
              20 April 2014 at 7:26 pm

              There’s no problem here other than mistakes made by the borrower

              Except it is a mistake the banks are quite happy for their customers to make. I don’t know about you but I’ve never had a bank proactively explore the possibility of transferring a mortgage with me.

              If the new house you’re buying costs more than your current one, which is usually the case, then that’s a good chance you would be needing to extend the term out to 30 years rather than 25

              Lets say you currently have a $300k mortgage that is 10 years into a 20 year term. and you want to move to a $400k property. It should be possible to transfer the existing $300k to the new property and then top up the remaining $100k with a new loan consisting of a $20k deposit plus a $80k new loan. (I’ve neglected any equity you have in the first property for simplicity.)

              That’s my other big bug-bear. The optimum period for a table mortgage is actually about 15 years. If we regulated against terms longer than 18-20 year (and anything longer really pumps up the total interest paid to obscene levels) – then in order to keep repayments affordable banks would have to cap interest rates much lower than they are now.

              Put this the other way around – banks only get away with interest rates greater than 7% by stretching out the total terms. It’s a disgusting confidence trick really.

              • Lanthanide …
                23 April 2014 at 12:56 pm

                Lets say you currently have a $300k mortgage that is 10 years into a 20 year term. and you want to move to a $400k property. It should be possible to transfer the existing $300k to the new property and then top up the remaining $100k with a new loan consisting of a $20k deposit plus a $80k new loan. (I’ve neglected any equity you have in the first property for simplicity.)

                You haven’t actually said anything different than what I said.

                Assuming the borrower can make the required repayments, there is absolutely nothing stopping them from choosing to structure the lending on the new property in the manner you have described. There is no legislation required here – what you want is already possible.

            • greywarbler 12.1.1.1.2.2
              21 April 2014 at 1:43 pm

              Lanthanide
              Why use the term party. You often take the didactic, demeaning approach with judgmental topping, when talking about things. Can you try to be a bit kinder to fellow humans please, and allow for the condition in your dispasionate statements from above.

              • Lanthanide …
                23 April 2014 at 12:59 pm

                I used the term party with quotes specifically to distance from if I had said party without quotes.

                By using quotes, I am borrowing the terminology used by others when discussing these sorts of things (see interest.co.nz and propertytalk.co.nz), but not actually saying it myself. Furthermore the reason I put quotes around it was to imply that you wouldn’t necessarily be partying with the money, eg it could be used for other productive or necessary purposes.

                Obviously I can’t expect anyone else to know my thinking behind using the term in the way I did, on the internet, but those are the reasons I used it, specifically with the quotes around it.

                • greywarbler …
                  23 April 2014 at 1:15 pm

                  Thanks Lanthanide, the word use lessened the understanding of your analysis to me.

      • Foreign Waka 12.1.2
        20 April 2014 at 7:11 pm

        Over and above, abolish the taxpayer guaranty for banks and financial institutions. I do belief however, that a capital gains tax would lead to a better outcome as foreigners would not buy up as they do now, especially large sections or prime farm land and tax income would increase. There should also be a percentage of council flats available for people on low wages. The rent needs to be pegged against the income.

      • DAVE 12.1.3
        21 April 2014 at 6:39 am

        affordable housing is defined as no more than 3x annual income ,banks should be regulated anything above that is unaffordable and totally immoral .FUCKIN HOUSING SHOULD BE FOR SHELTER NOT THESE STUPID FINANCIAL GAMES THAT ARE GOING to SERIOUSLY WREAK LIVES.
        us collapsed at x5 annual income Auckland must be around a factor of 11 to 12 by now I it was 10 2 years ago. imf rates NZ as critically unaffordable.
        house pricing rising isn’t a problem if income is rising as well but we have as a country fucked that one to.
        those of us like Rosie who come after the baby bloomers we have been collectively screwed .

        • Rosie 12.1.3.1
          21 April 2014 at 8:54 am

          +1 Dave. Housing for people not the benefit of banks.

          Thanks for your acknowledgement too. The only people that can buy houses easily enough in this country are those at the top of the ladder. It’s not like we had a choice in taking on a 30 year mortgage at our age. God knows what is going to happen in the future. Illness and unemployment were part of the difficult circumstances, otherwise we wouldn’t be struggling quite as much as we are.

    • greywarbler 12.2
      20 April 2014 at 6:13 pm

      Rosie
      It seems to me that for some time hence, that NZs without houses or straining to get into one and avoid being the jam on some owners bread and butter, should be able join a special club/social grouping that brings together like- minded individuals. This would give opportunities to meet compatible people who could then end up buying a house between them.

      I would imagine there are already legal templates that cover the situation when someone wants to buy themselves out of joint ownership. And in this scenario there would usually be another in the social grouping that could be found to take their place. It would be a little like letting a room, as far as the sharing goes. But there would be a commitment, it would be a longer term thing, and the ambience would be of an extended family.

      The people who had bought the house might be regarded as the ‘head owners’ and a new person or persons, would be the secondary owners who would have to move if unhappy, but on fair terms. Or the person, or people, who put down the major deposit could be stated as the head owners. It could be done, it would just need to be thought out and planned properly. The opportunity of getting to know people in the group first would mean that most deals would be harmonious. If not there would be a mediation system, and a legal means of getting out.

      We have to change to help ourselves. The past commitment to helping people into their own house has dropped away, and a large deficit has built up. Labour could once again offer low mortgage rates at least for the first ten years, plus a reasonably low deposit, once a savings record had built up in Kiwibank. And of course monthly help with a child allowance for the first three children, one of which could be capitalised towards the house would be a good return to helpful practical policies for families.

      • karol 12.2.1
        20 April 2014 at 6:16 pm

        Or we could just move away from this idea that we all need to own property. Myself, I have no interest in doing so.

        Joint ownership of property may appeal to some, but not necessarily everyone.

        • greywarbler 12.2.1.1
          20 April 2014 at 6:24 pm

          karol
          Housing of different sorts is needed. And different methods of establishing individual rights to it rental or what. So something for everyone, if there is sensible planning that meets public approval, people’s input should be encouraged to see what is required.

          • karol 12.2.1.1.1
            20 April 2014 at 6:43 pm

            Yes, there needs to be a range of possibilities – state/council housing, private rentals, and various ownership options. At the moment, too much stress is put on everyone trying to own.

            I have heard said that younger people now are less in to home ownership (from necesssity) and also less into owning/driving cars. That may not be a bad shift. It may mean they are open to a wide range of alternatives.

            • bad12 12.2.1.1.1.1
              21 April 2014 at 9:55 am

              True Karol, but while the equation home-owner/ home renter is still in demographic terms still in favor of the owner the politicians will be reluctant to change anything,

              When the demographic swings the other way, renters outweighing owners by a larger % in the population then and probably only then will the ‘political process’ begin to address the cost to not only people but the economy itself,

              Until that swing occurs the renters in society will remain an un-noticed, unreported on demographic…

              • bad12 …
                21 April 2014 at 10:03 am

                As a hint to what might occur under the current model of housing as far as rentals goes i take a line i read in a Herald editorial,(sorry haven’t got a link, it was last week sometime),praising the current Government’s dismantling of State Housing and extolling the virtue of ‘private NGO providers’ which added a small push for private landlords to be included in the full Government subsidy for ‘social housing’,

                Now that would keep the pot boiling in places like Auckland and Christchurch as the landlords fell all over each other to get a slice of the action…

                • Foreign Waka …
                  21 April 2014 at 12:27 pm

                  The shift from public good that is mostly part of the motion that the most vulnerable in a society are looked after, has been abandoned by the public themselves. Now many stand there screaming for help but still vote a right leaning party. It is perplexing but the only way to explain this is that the individual ego is greater then the wish for equal excess to help and essentials. As for the housing market, since this is the only market left that shows good returns in all situations, it is no wonder everybody is making a run for the money – literally. A capital gains tax would put a big damper on this but the loudest voices against it will come from those who do the buying and “investing”. We are not talking just small investors but people with a large number of rental properties and companies involved in apartment building. None of those are interested to be part of a community that beliefs in public good.

                  • greywarbler …
                    21 April 2014 at 1:47 pm

                    FW “equal access” is what I think you mean, but that would make it a very great Freudian slip.

                    • Foreign Waka …
                      25 April 2014 at 12:24 pm

                      Quite right, would it not be great to have some hungry kids getting some excessive experience? Thank you for pointing this out.

        • RedLogix 12.2.1.2
          20 April 2014 at 6:28 pm

          On the list of more radical, but still doable ideas, is that all residential land should be leasehold.

          Instead of paying rates, we would pay rent to the local council. The land would be permanently ‘owned’ by the Crown and could not be alienated in any manner.

          After all there is already quite a bit of leasehold residential property in NZ and for the most part it works perfectly well.

          The big advantage would be that the banks would not be able to include the value of the land as an asset for a mortgage. And property bubbles always involve the value of the land – not the buildings. Buildings are not nearly so prone to inflation because they always have a new replacement value.

          • greywarbler 12.2.1.2.1
            20 April 2014 at 6:36 pm

            RL
            +100
            I have noticed with surprise how my old house keeps going down in value, and land goes up. It does need regular repairs but still is worth more than QV says. However I wouldn’t complain of course if it means the rates don’t rise much.

          • karol 12.2.1.2.2
            20 April 2014 at 6:45 pm

            Yes, the leasehold of “Crown” owned land is a good option – it’s like a long term and secure rental. Plus, it’d likely help to eliminate people speculating on property.

          • Rosie 12.2.1.2.3
            21 April 2014 at 9:46 am

            RedLogix, great idea that all residential land should be leasehold. No problem with that at all.

            I think it would be helpful if NZer’s could move away seeing their house as a money maker and see it as home for life. But folks are in it for themselves and couldn’t get the idea of their house not increasing in value – as a means of making housing more equally accessible to all.

            It would only be a radical idea in that the bulk of homeowners firmly entrenched in the current profit mindset would be resistant to it.

        • Rosie 12.2.1.3
          21 April 2014 at 9:35 am

          “Or we could just move away from this idea that we all need to own property. Myself, I have no interest in doing so.”

          Hi karol. I felt the same way until I got into my 30’s -and we were renting up until two years ago when we bought our first house. I had felt at odds with the NZ obsession about home ownership, (or what I perceived as obsession) and find it shallow and materialistic. The whole idea of “climbing the property ladder” I find particularly crass. I guess it could be referred to aspurashonal in the Bennett/Key sense of the word.

          It became harder to rent when the GFC kicked in. We had landlords selling off their property and had three moves in five years as a result. It was tiring, stressful and expensive. all that moving around and felt like we wanted to be in one place until our old age, hence the decision that pushed us towards taking the plunge and buying. We also wanted to have the ability to do what we wanted with the house and set up a garden etc.

          So we are no longer at the mercy of the landlords, we are at the mercy of the bank instead. Out of the frying pan and into the fire perhaps.

      • DAVE 12.2.2
        21 April 2014 at 6:51 am

        what family’s like Rosie need is a country whos economy works for its people not the wankers at the top housing in-line with income .income in line with the cost of living its not rocket science.

      • Rosie 12.2.3
        21 April 2014 at 9:06 am

        Hi Warbs. I do know people who have done exactly as you have suggested, with varying degree’s of success. The ones who started out living in a communal situation eventually moved through various living/co ownership arrangements until they ended up living miles away from people in the middle of no where!

        It’s not my idea of a living situation, I’d never feel settled living with others. I have bouts of depressive behaviour which would be no fun for others living in the same space. It was fun flatting in my late teens and early twenties but you know, times change…..

        • greywarbler 12.2.3.1
          21 April 2014 at 1:57 pm

          Yes Rosie I am of the opinion that it could be successful only if people got to know each other first and you don’t usually in the common sharing situations. It would be like extending the family so people would have to take time, talk deeply, think deeply, plan their approach to the common services with behaviours that were agreed, i.e. be careful of heater use, only during certain periods of day, bnt not go round turning of lights as soon as leaving a room etc. Differing behaviours could drive one mad.

          Understanding that there were times when someone could be feeling ‘seedy’ (depressed)
          and perhaps not feeling like talking, just nodding at each other could be a way accepted of keeping communication going.

          It wouldn’t be easy, but some of the poor quality housing that poorer people end up in now would see a great improvement if sharing a better house with compatible people could be organised by them. And the legal side attended to so methods of dismantling the arrangement were spelt out and agreed to. So no nasty taste left at the end.

      • just saying 12.2.4
        21 April 2014 at 10:15 am

        I’m just reading “Ministerial Investigation: Options for Cooperative Housing”, which was signed off by Phil Goff in 1987.

        Talks about the different kinds of housing collectives and the different legal, financial and social structures that would be required from local and central government to enable people to set them up and thrive.

        As a result of this report, nothing happened (to the best of my knowledge).

        Even after all these years it is worth a read. Maybe the Labour Party could dust it off and think about a suite of policies * that would provide resources and structures to enable a variety of housing options.

        *Provisio, if they involve bureaucracies controlling the working class, forget it. The power must be given to the people…..or it’s just more of the same old shit.

        • Tracey 12.2.4.1
          21 April 2014 at 4:39 pm

          can you post a link to that report

          • just saying 12.2.4.1.1
            21 April 2014 at 5:34 pm

            I have a hard copy.

            If you know where these sorts of things are archived online the full title is; Ministerial Investigation: Options for Cooperative Housing. April 1987.

            According to the foreword, submissions were to be heard by an Investigative Committee on Coperative Housing via the Hosuing Corporation, and it was proposed that the first of a number of cooperative housing schemes were to be launched before the end of that year. It would be interesting to know what happened. I suspect the social democratic nature of the thinking, and especially the funding proposed led to its demise.

            Still, nice to know there were still some residual traces of Labour thinking in that disastrous caucus, even if they were eventually stamped out.

  13. Ad 13
    20 April 2014 at 5:14 pm

    Labour and Greens should they win (hail Mary full of grace) will face a media narrative so strong that they could successfully orchestrate banking and business interests into a broad social tipping point. This happened under Savage, Nordmeyer (after a poorly conceived budget), and Clark. Without major counter-offensives, this at best spooks minor coalition partners, and at worst kills governments. To me that, not the Matrix-like prophecies about our “inevitability”, is the message here.

    Our collective adduction to real estate and cheap imports has embedded our media, retail, banking and personal interests into coaddiction. Unless stronger $NZ currency controls and housing market controls, are handled with astonishing pilitical finesse that we have not yet seen from this Labour caucus, they will likely find a major manufactured crisis orchestrated hard against them. The rest is armchair economic refereeing.

    Forbes is merely a useful vizier for the alignment of powers that future govt will face. Insofar as politics has any operable levers left, that’s the counterfactual I’d run over the weekend in DC’s beehive “war room”.

    • RedLogix 13.1
      20 April 2014 at 5:46 pm

      will face a media narrative so strong that they could successfully orchestrate banking and business interests into a broad social tipping point

      Thank you. It’s exactly what Clark/Cullen faced. I had the privilege of asking Michael pretty much exactly that question over a beer one evening and he was quite clear about the limits of what a left-wing govt was and was not allowed to do.

    • karol 13.2
      20 April 2014 at 6:05 pm

      Yes, it’s good to be reminded of that. It’ not just about winning the election. It’s about developing changes in culture and policies that will openly work for the good of the whole community – for all Kiwis.

      • Ad 13.2.1
        20 April 2014 at 6:11 pm

        Agreed. It also requires of us that we project onto the future how much of a future blueprint of freedom is possible, is highly unlikely, and how much is not possible. Helps limit post-election melancholy, trust me.

  14. Pohutukawa Kid 14
    20 April 2014 at 6:56 pm

    Here’s some interesting ideas worth thinking about from today’s UK Guardian

    http://www.theguardian.com/business/2014/apr/20/housing-superbubble-ten-steps-release-pressure

    • RedLogix 14.1
      20 April 2014 at 7:14 pm

      That’s a good summation of the conventional thinking on house price bubbles.

      But really it is Item 8 that is the dominant factor. The NZ housing market is driven by these factors in order of importance:

      The always dominant factor is bank policy. Steven Keen has charted the extraordinarily strong correlation between mortgage growth rates and property prices here. And here.

      The second factor is immigration. This should be really easy for a government to control, although NZ is exposed to the very peculiar risk of a flood of returning Kiwi ex-pats if things go awry globally.

      The third factor is the absurd privatisation of the land development business by National in the 1990’s. Prior to that the majority of suburbs in NZ were developed by Councils who had access to low cost financing and could access all the future rate income of the property to service the finance. The actual engineering, earthmoving, services and such were contracted out – but the council could afford to sell sections at a far lower cost than a private developer has to. Essentially a private developer has to load all the costs of creating a section onto the very first buyer, whereas the public council could spread it out over future rate income.

  15. BM 15
    20 April 2014 at 7:27 pm

    Build more houses, that’s the key and all the issues seem to be at the council end.

    First thing that has to happen is that the government has to nullify all the greeny doomers who have infested Auckland council and halted new land development or made it as difficult as possible.

    You don’t need Kiwi Build, that’s just socialist we know best nonsense .
    All you need to do is make easier for people/developers to build houses and eventually supply will outstrip demand and prices will drop.

    Reply to Pohutukawa Kid

    • Paul 15.1
      20 April 2014 at 7:45 pm

      Ah well you obviously looked at the Guardian article in depth and looked at the number of economists and policy makers recommending 10 solutions to the problem…and for you it’s just build, build, build.
      From the article
      “. In fact, most economists agree that no one change is likely to do the job on its own. As Archer puts it: “I doubt there is any single measure that would prove to be a golden bullet, but a combination of measures could have some impact.” ”

      BM, yours is Neanderthal thinking. Such backward and limited vision is costing the world its environment …but as long as you and your fellow Randian ideologues can have everything you want, who cares, eh?

    • RedLogix 15.2
      20 April 2014 at 7:46 pm

      A very old and close friend of mine is a significant developer of property in Auckland. I’ve talked with him about this on numerous occasions.

      The price of raw land and consents is only about 15% of the cost of a section. The rest is spread across all the other necessary engineering and development costs. All the roading, drainage, services and run-off management for a start. If for example you need a $2m pumping station to get water to your sections, you build it, pay for it and then hand it over to the council. The same for the roads, the power, the telecoms and so-on.

      Then of course in order to get the best price for you sections you never dump them all onto the market at once. All developers very carefully stage their releases in order to prevent any possibility of an oversupply in the market dropping prices. That’s the last thing the want because it destroys their profit.

      The fact is that even if developers had access to an infinite amount of free raw land – the price of retail sections would perhaps fall by maybe 10% at most. The supply of land is one of the least important components in the price of a section.

      Yet it is at the point where raw farmland is re-zoned as residential where the big money is made. Funny how freeing up land supply is only the factor you right-wingers bang on about – the one factor in the section price that has the least to do with housing affordability and the most to do with a very few landholders making big windfall profits.

      • Paul 15.2.1
        20 April 2014 at 7:51 pm

        He won’t have a straight answer to that.
        Watch some dodging…

      • Ad 15.2.2
        21 April 2014 at 6:36 am

        +100

      • BM 15.2.3
        21 April 2014 at 7:19 am

        The Productivity Commission’s Housing Affordability Inquiry studied the issues before reporting to the Government in April.
        The commission blamed restrictive land supply but ruled out recommending tinkering with tax.

        http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10836274

        I take it you disagree with their findings?.

        Agree with what you say though about developers drip feeding properties onto the market to keep section prices artificially inflated, I have no doubt that it is quite a large factor in the building process.

      • BM 15.2.4
        21 April 2014 at 7:35 am

        I was just reading through the housing affordability report.

        According to the report, development contributions as a share of section prices was only around 5% in Auckland

        • felix 15.2.4.1
          21 April 2014 at 8:04 am

          That’s additional to the development costs, BM.

          You still have to do all the sewerage and stormwater and roading and drainage and engineering, and pay for all of it.

          And then you pay the council a “Development Contribution” as well.

          So you’ve just identified another cost that’s unrelated to the raw land price.

      • Herodotus 15.2.5
        21 April 2014 at 8:29 am

        Like to know your friend and where and when they purchased the land. As raw land comprises from my experience 33% of the cost. To get zoning changes 5-8 years so you have to find funding over that period, the cost to achieve private plan changes. The develop, earth works cover a season Oct-Apr followed the next year by civil works.
        Many developers are limited by the extent to develop by BANK funding and not limiting the release of finished product to max profit.
        Time is the largest cost in the process.

    • Tracey 15.3
      21 April 2014 at 4:46 pm

      yes thats great. Last time we made it easier for developers and builders we ended up with over 100000 leaky homes.
      for some reason your great govt only extended accountability and responsibility for their work to builders and designers not developers.

      developers who form a company… build as cheaply as possible to maximise profits… take the profit and close the company and start again.

      cant imagine why lord key and act… usually so keen on personal responsibility let these guys off the hook.

      • BM 15.3.1
        21 April 2014 at 5:26 pm

        A lot of that was due to poor design, crappy materials and faulty construction techniques.

        One learns from previous mistakes and hopefully does not repeat them,

        • RedLogix 15.3.1.1
          21 April 2014 at 5:38 pm

          They were all highly predictable mistakes BM.

          When National was planning to change the Building Act back in 1992 they were explicitly warned against what they were planning. There were qualified industry people who told them to look at what had happened in Vancouver in the 1980’s and to avoid repeating exactly the same mistakes the Canadians had made and had already learnt from.

          But of course ideology trumped evidence as it always does with National.

          • BM 15.3.1.1.1
            21 April 2014 at 5:48 pm

            Pre MMP days, politicians didn’t give a shit, our electoral system was nothing but a short term dictatorship, they did whatever the hell they wanted.

            Case in point 4th labour government.

            • Paul 15.3.1.1.1.1
              21 April 2014 at 5:54 pm

              Yes I agree MMP makes our system more democratic.
              However, the fact that Labour copied Thatcher and Reagan in the 80s means there is little choice now for voters. Tweedledee and Tweedledum parties.

          • Paul 15.3.1.1.2
            21 April 2014 at 5:52 pm

            As is presently happening to our Education sector.

        • Paul 15.3.1.2
          21 April 2014 at 5:50 pm

          I would say that unscrupulous businessmen made a lot of money out of leaky buildings.
          Yes, they learnt alright that a government that takes away the rules that protects people is good for their criminal business ventures.
          Your faith BM in the market is so touching.
          All you’re doing is handing over to the corporate psychopaths.

          • BM 15.3.1.2.1
            21 April 2014 at 6:02 pm

            A lot of the problems stemmed from Branz approved construction techniques.

            Builders followed those, building inspectors ticked everything off as correct, it wasn’t until a few years down the track that it became rather obvious that things weren’t going quite as planned.

            By that time the horse had bolted.

            • Paul 15.3.1.2.1.1
              21 April 2014 at 6:10 pm

              What do you say to Red Logix’s point?
              “When National was planning to change the Building Act back in 1992 they were explicitly warned against what they were planning. There were qualified industry people who told them to look at what had happened in Vancouver in the 1980′s and to avoid repeating exactly the same mistakes the Canadians had made and had already learnt from.”

  16. fisiani 16
    20 April 2014 at 7:57 pm

    If you really want to see a housing bubble then impose a Capital Gains Tax on all but the family home. Then watch people buying higher and higher value family homes to escape paying the CGT. Now that would really cause massive house price inflation and raise the capital value of the houses of the rich. Silly silly idea. That’s exactly what happened in Australia.

    • Paul 16.1
      20 April 2014 at 8:05 pm

      You obviously did not read the Guardian article at 14 sourced by Pohutakawa Kid.

      Here is an excerpt.

      ” CGT ON ALL HOUSE SALES
      Currently, any profit you make on the sale of your main residence is free of any kind of tax. Only sales of second homes or additional properties attract capital gains tax (CGT).

      David Blanchflower, a former member of the Bank of England’s monetary policy committee, argues that the UK should roll out CGT further, adopting a model similar to one in place in the US. “This is a better fix than a wealth tax as you don’t need the bureaucracy to value as for a ‘mansion tax’ – you just use purchase and sales prices,” he says.

      The US model has exemptions: the first $250,000 of profit does not attract a bill if there’s a single seller, while if a couple is moving, they don’t pay any tax on the first $500,000.

      Exclusions could be adapted, and rates varied, so that larger gains could face higher tax charges. While this might make people less inclined to sell their home at a large profit, it might not deter them entirely – investors face a CGT bill on stocks and shares, fine wines and vintage cars, but still trade them in the hope of good returns. It would, however, reduce the amount of money that could go into the next property being bought, which should help calm prices – and the revenue could be used to replace stamp duty entirely.”

      Kind of refutes your point don’t you think?

    • RedLogix 16.2
      20 April 2014 at 8:35 pm

      Actually that’s one point I agree on.

      A CGT exemption on the family home would have a distorting effect. And yet politically it’s probably impossible to avoid. It’s one reason why I’ve never been a big fan of a CGT in the first place.

      Far better to avoid excess capital gains (over and above normal inflation) in the first place. A CGT is an ambulance at the bottom of cliff – in this thread I’ve outlined at least four different types of fence we could build at the top of it.

      • Herodotus 16.2.1
        21 April 2014 at 8:40 am

        A CGT as labour has signalled is weak as they still allow the deductions of interest etc to still occur , then tax the gain well below PAYE rates, many pay taxes from their wages at double this rate and a on a far inferior income., for many investors their tax advantages would be similar to their CGT liability.
        100k home building and SHA’s are also not designed to solve the house problem just to be seen as to be doing something.

      • Foreign Waka 16.2.2
        21 April 2014 at 12:37 pm

        If it is restricted to one transaction only, being a family home then it would not be the case. 1 transaction per buyer.

  17. dave 17
    20 April 2014 at 8:02 pm

    remember the open bank resolution policy NZ deposit holders are not government guaranteed we get the bail in treatment.

  18. Tanz 18
    20 April 2014 at 8:51 pm

    I have seen three bedroom homes advertiesed in Glen Eden around the 480,000 mark That is not too bad. Key i ignoring the problem because it does not affect him or his family.

  19. Colonial Viper 19
    21 April 2014 at 12:58 am

    A political party which announced policies actually effective in stalling or reversing house prices would never be voted into government.

    The only house value reduction policies a party could announce and which are not electoral death wishes are cosmetic ones which won’t materially reduce or stall house price increases. MP’s are not going to vote through policies which cut down their own property portfolios.

    It’s all about window dressing.

    • Paul 19.1
      21 April 2014 at 4:31 am

      A lot of people under 35 would vote for a party that made rental prices and house cheaper.

    • greywarbler 19.2
      21 April 2014 at 2:05 pm

      Yes CV I can see house price drop likely being a vote loser. As super age rise also. Labour needs to have something electorally that helps, and make plans to stop foreigners buying up with all their bloated gains they have to spread around the world. They could lease perhaps, if they wanted a pad here.

      But it is amazing that as NZs have learned about our history they haven’t appreciated how the policies making the country good to live in had to be fought for. We have been the later generations of the ground-breakers, who just spend all the goodies that the parents amassed of whatever kind.

      There was deliberate legislation to stop large landowners getting hold of the land needed by the keen aspirational immigrants in colonial days. We are getting large land amassing projects, someone here said the farmer down the road owned ten farms, and where is our wisdom and desire for NZs to make their own country prosperous with their own work and receive the benefit for themselves now??

  20. travellerev 20
    21 April 2014 at 6:52 am

    Mikysavage left the most crucial list point out.

    7) Finance, not agriculture, is New Zealand’s largest industry

    Though New Zealand is commonly thought to be an agriculture-based economy, this couldn’t be further from the truth. Agriculture accounts for only 5.1 percent of New Zealand’s GDP, while the finance, insurance and business services sector is the country’s largest sector, contributing 28.8 percent to the GDP. Furthermore, banks account for 80 percent of the total assets of New Zealand’s financial system. Not only is New Zealand’s banking system dangerously exposed to the country’s property and credit bubble, but so is the entire economy.

    If anybody out there wants to pull the plug they only have to pull out their money because most of it isn’t ours.

    Also the National government has loaded up the books with $112 Billion (This was in 2012 so that could very well be a lot more now) in Derivatives which ar part of at least a $ 1.5 quadrillion in faux financial products global bubble which will collapse if even the smallest country (Like Greece which is after all only .4%of global GDP and tanking) defaults and triggers a domino effect of banks and institutions wanting pay out on them showing there clearly is no money to do so.

    By the way funny eh, that it was at the same time kiwi numbnuts elected a Wall street banker Prime Minister in 2008 that the National debt started to triple!

    • Paul 20.1
      21 April 2014 at 7:32 am

      That’s how the banks threaten democratically elected governments.
      Happened to the UK in the 70s when the IMF blackmailed the UK Labour government.

    • greywarbler 20.2
      21 April 2014 at 2:12 pm

      travellerev
      Very interesting thanks for that. It needs to be dragged forward constantly so we don’t forget to look at the contents. Sort of like a swag over our shoulders as we tramp down the dusty road to look for our future.

      • travellerev 20.2.1
        21 April 2014 at 4:13 pm

        Cheers Greywarbler, my pleasure. You might also want to check how Ireland and Iceland solved the bubble bursting (In Ireland John Key was one of the bubble builders by the way) when it happened to them. Iceland chucked three bankers in jail and said F^&k you and Ireland bailed the banks out and is now paying a debt which wasn’t theirs to begin with. Iceland is on the up and up while Ireland is sinking.

  21. jh 21
    21 April 2014 at 8:38 am

    In Christchurch a group from Canterbury University has an idea to bowl down an older part on TC1 ground and build a dense eco village.
    It can’t happen under private ownership. In fact the council want to rezone for density so you will have older residents hanging on and land lords (including rich-listers) going for broke on rectangular sites.
    Singapore has 80% of the housing in public ownership . The state owns the land and can do timely, sympathetic, intelligent redevelopment.

    • greywarbler 21.1
      21 April 2014 at 2:15 pm

      That’s what they need to do in Queenstown. Pleasant, adequate housing is needed for workers servicing the holidaymakers and rich tourists, and that housing cannot be left to the private industry to provide, leaching out all the discretionary money that the workers manage to accumulate like living off the workers like varroa mites.

  22. jh 22
    21 April 2014 at 8:57 am

    There is also some evidence that
    immigration, together with other forms of population growth, has exacerbated pressures
    on New Zealand’s insufficiently-responsive housing market. Meeting the infrastructure
    needs of immigrants in an economy with a quite modest rate of national saving may also
    have diverted resources from productive tradable activities, with negative macroeconomic
    impacts.     Therefore from a macroeconomic perspective, a least regrets approach suggests
    that immigration policy should be more closely tailored to the economy’s ability to adjust to
    population increase.

    2.3 Changing policy expectations
    While useful, models do not capture all the effects policymakers expect from immigration.
    When New Zealand moved to increase the numbers and skills of immigrants in the 1980s
    and 1990s, policymakers appear to have considered that these changes had the potential
    to have major beneficial impacts on the New Zealand economy, reinforcing the gains from
    22
    the other liberalising and deregulating economic reforms undertaken during that period.
    At that time, it was considered that skills-focused inward migration could: improve growth
    by bringing in better quality human capital and addressing skills shortages; improve
    international connections and boost trade; help mitigate the effects of population ageing;
    and have beneficial effects on fiscal balance. As well as “replacing” departing
    New Zealanders and providing particular help with staffing public services (for example,
    medical professionals), it was believed that migration flows could be managed so as to
    avoid possible detrimental effects (such as congestion or poorer economic prospects) for
    existing New Zealanders.

    Since then, New Zealand has had substantial gross and net immigration, which has been
    relatively skill-focused by international standards. However, New Zealand’s economic
    performance has not been transformed. Growth in GDP per capita has been relatively
    lacklustre, with no progress in closing income gaps with the rest of the advanced world,
    and productivity performance has been poor. It may be that initial expectations about the
    potential positive net benefits of immigration were too high.

    Based on a large body of new research evidence and practical experience, the consensus
    among policymakers now is that other factors are more important for per capita growth
    and productivity than migration and population growth.     CGE modelling exercises for
    Australia and New Zealand have been influential in reshaping expectations.

    http://www.treasury.govt.nz/publications/research-policy/wp/2014/14-10
    Policy has been steered by a pincer movement by utopian socialists and the development industry. Any objections.. “Ha! …Racist”

    • jh 22.1
      21 April 2014 at 9:15 am

      Humans have an innate preference for people they perceive as their in group (like them) due to the adaptive evolutionary environment during the pleistocene. So cries of Racist from warmly wrapped up “progressives of the internationalist tradition” (and Harcourts Shanghai) have a potent sting.

    • bad12 22.2
      21 April 2014 at 9:24 am

      i would suggest that ‘population growth’, and i am not going to differentiate between immigration and New Zealand centric population growth, has grown from 3.3 million people 30 years ago to the current 4.4 million people,is the root cause of the ‘problem,

      As little ‘planning’ surrounded this population growth especially in the area of housing it is easy to see how we have ended up with the current situation,

      If some logical thought had of been applied to the more laissez fairre immigration policies applied during the past 30 years proper rules would have ensured that all immigrants had a house built for them, either privately or by the State, befor they arrived here,

      Of course the above presupposes that the current ‘consequences’ of the population growth that has occurred was in fact ‘unintended’

      Personally to hold to a belief in such ‘unintended consequences’ would also see me believing in the ‘tooth fairy’,(having stayed awake all night on one occasion my belief in that particular fairy is pretty much non-existent)…

  23. Populuxe1 23
    21 April 2014 at 3:57 pm

    I’m more worried about the explosion of homelessness we will see in Christchurch with all the rent gouging going on for the few rentals left standing, and now the building contractors wnt to bring even more foreign labour in, driving more low income, beneficiaries and other vulnerable people out on to the streets. One elderly couple were living in the garage of a state house until WINZ threatened the house’s occupant. This is a disaster and the government refuses to do anything because “the market will sort it out” BUT THE MARKETPLACE IS BROKEN.

  24. Redbaiter 24
    21 April 2014 at 4:08 pm

    Why I don’t think the bubble will burst. (not to any great degree anyway)

    In the first place, its not actually a bubble. Its been like this for decades.

    In the second place, its a question of supply and demand. If we see empty houses, we know the demand isn’t there. There are few empty houses.

    In the third place, its simply a question of investment. Housing is better than most other options for many reasons, but the primary one is everything else has become too hard.

    Who would be silly enough to put their money into risky capital and labour intensive businesses like-

    Mining coal
    Drilling for oil
    Manufacturing
    Mining other resources
    Fishing
    Farming
    Forestry
    Infrastructure projects
    Media

    I wouldn’t. Why not? Its all been made too hard by a myriad of regulations, laws and cronyist prequalification procedures. Nobody is going to change it. Not Labour or its coalition partner National, so most money in NZ will continue to be invested in capital gains free relatively unrisky housing.

    Even if it does collapse, unless you’re in debt, you haven’t lost anything really, as it all stays relative. You’re not exposed to regulations that will see you bankrupted or prosecuted or land in jail as you are with many of the enterprises listed above.

    So I reckon it will just go on with maybe a minor correction or two, but really, in the socialist sewer the west has become, and especially down here in NZ, what the hell else is there that any sane person would regard as a better investment?

    • Paul 24.1
      21 April 2014 at 4:15 pm

      With a nom de plume of redbaiter, it’s clear you just want to be provocative and get a reaction to this drivel.
      You are either woefully ignorant of economic philosophies or angling for a long debate based on this nonsensical outburst.

      • RedLogix 24.1.1
        21 April 2014 at 4:38 pm

        Redbaiter is a rather sweet old libertarian duffer who graces us with his pearls of wisdom from time to time. He’s quite smart and certainly not ignorant.

        Actually this is one of his more coherent posts – there’s a fair bit to agree with in it.

        For a start I think he’s right that the property bubble will not burst of it’s own accord in NZ for some time. For the medium-term (a couple of years or so) there is a genuine shortage of housing in NZ mainly caused by the GFC collapsing the building of new homes for about 4 years or so. The industry has a fair bit of catch-up to do.

        Plus the shortfall created by the ChCh earthquake.

        Plus the net positive immigration back into NZ due to the job market going south in Australia.

        Plus the intense pressure from rich Chinese investors with cheap money looking for a rat-hole.

        Plus a govt that really does not care about housing affordability for ordinary New Zealanders.

        All of these factors will for the time being keep the NZ property bubble merrily inflating for some time yet. Yet all bubbles eventually pop. It’s an iron law.

        In a small market like NZ where labour mobility is modest, property market bears are characterised by a large drop in turnover rather than price. This is because our banks have generally been willing to tolerate very low or negative equity as long as the mortgage was being serviced. Plus our bankrupcy laws mean that if you default on a mortgage – you are likely to be left with a hefty residual debt to the bank anyway. Far better to just hang on and wait for the market to recover if you can.

        What may well be different this time is portion of overseas investors in our market who won’t behave this way – and possibly trigger a fire sale. Unknown territory.

  25. Redbaiter 25
    21 April 2014 at 4:26 pm

    Furthermore, the govt, whoever it is, knows well that this is why housing is so popular as an investment. Its virtually all that’s keeping a pretty dysfunctional economy afloat.

    That’s why we have immigration. Waves of it. It keeps NZ’s most successful economic sector hot.

    Ask Helen Clark about it. She’s got what? Somewhere between five & ten houses last I heard. So have many other politicians in the Labour/ national coalition.

    They know the score comrades.

    • Paul 25.1
      21 April 2014 at 4:30 pm

      Good we agree on the need to stop foreign ownership of NZ assets then?
      Like houses.

    • RedLogix 25.2
      21 April 2014 at 4:47 pm

      Its virtually all that’s keeping a pretty dysfunctional economy afloat.

      You actually won’t get much quibble from most people around here on that either.

      No-one trusts the NZX – it’s a wild-west of shark-suited insiders with an appalling track record of suckering ordinary investors.

      No-one trusts our finance industry anymore. The events of the last five years speak eloquently to that.

      And successive govts have shown no inclination to protect local manufacturing against competitors who face far lower labour, regulatory and environmental costs.

      So where else to put your savings? Banks printing money into inflating property has indeed been the basis of our economy for the last 20 years. This is something I’ve more or less been saying for a while now.

      So to that extent RB and I are on the same page.

      • Paul 25.2.1
        21 April 2014 at 4:49 pm

        Pretty gloomy outlook.

      • JAK 25.2.2
        21 April 2014 at 5:48 pm

        The NZX is better regulated these days and offers an opportunity for small investors to put money into NZ companies, instead of into residential properties that produce nothing and bring heart break to the people saddled with high rents or unable to afford a home of their own.
        http://www.chinagoabroad.com/…/strong-run-new-zealand’s-equity-capital-ma…‎

        • RedLogix 25.2.2.1
          21 April 2014 at 6:18 pm

          You do have something of a point JAK. Regulation has improved. It bloody had to.

          However for most people the stock market is simply not a viable place to put their retirement savings. Most ordinary people are not investment managers, nor should they be.

          If you then argue the case for managed funds, you’ve stepped into another realm altogether and one that I like less and less the more I find out about it. What between the hordes of day traders playing games with short-term blips and bumps, and the high-frequency traders who manipulate the market faster than even the big fund managers can – the global stock market scene has the hall-marks of a massive casino.

          By sheer accident I got to spend a day last week watching part of the share trading business in action. You have to be impressed at all the technology and cleverness – but I couldn’t shake the overwhelming sense of how utterly divorced from any sense of real business value share markets have become.

          • JAK 25.2.2.1.1
            21 April 2014 at 6:52 pm

            Twenty thousand dollars split four ways gets you a share of say Contact Energy, Fletcher Building, Auckland International Airport and Vector. All likely to produce regular dividends. No capital gains tax if the shareprice appreciates and you can sell part of the portfolio if you need cash in a hurry.
            Residential property investing puts all your eggs in one basket, you are lumbered with ongoing management tasks and you end up supporting a market that prices out the young who need an affordable home.
            I would feel uneasy knowing that my residential property tenants were struggling to find the cash to pay me. Commercial property is a different story and I would invest in this via the listed property trusts.
            I am not an investment expert and would not spend money on an advisor because there are plenty of books, websites and newspaper columns with the information I need.

            • BM 25.2.2.1.1.1
              21 April 2014 at 7:11 pm

              I haven’t had a lot to with NZ stocks what sort of leverage ratio can you get?

              • Herodotus …
                21 April 2014 at 8:46 pm

                Agreed, what other business scenario are banks willing to fund up to 80% of the investment on cash neutral business cases ? Try with a similar request for funds to buy shares, precious metals or even a real business case ?
                Banks willingness to loan large amounts of $ to fuel the property market is a major contributor to the ills that have resulted from high value housing. Perhaps instead of a CGT just eliminate interest costs as a tax deductible cost- it would have An immediate savings for the government instead of waiting for inflation to take effect, and as a result property values increase and then collect the 15% tax on realisation.

                • dave …
                  22 April 2014 at 6:15 am

                  they were funding up to a 100 percent less than a year ago there is a lot of those mortgages out there low to no deposit loans

    • poem 25.3
      22 April 2014 at 4:03 am

      I had the impression on the relatively recent documentary on Helen Clark, that her and her husband only owned 1 house. Can you provide a link or reference as evidence of your claim that she owns “Somewhere between five & ten houses” please.

      • Redbaiter 25.3.1
        22 April 2014 at 11:46 am

        In the 2008 Parliamentary Pecuniary Interests Register Clark was listed as having a house in the UK, a house in Auckland, a townhouse, an apartment and an investment property, which is probably a block of flats.

        I have been told she has since bought a couple more but I don’t know the detail or even if its true. She obviously likes real estate. What do you reckon she would be doing with the millions she is raking in from the UN?

        • poem 25.3.1.1
          22 April 2014 at 12:58 pm

          And dont all politicians love real estate? Thanks for that, you have listed 5 known properties, thats a far cry from 10, the rest is supposition.
          And thats none of my business what Helen Clark does with the money she earns.

    • Draco T Bastard 25.4
      22 April 2014 at 7:34 am

      Its virtually all that’s keeping a pretty dysfunctional economy afloat.

      I agree with that line. It’s only the ever increasing lending from the banks that keeps the amount of money in the system inflating and thus keeps the economy moving. The only real fix to this is to increase taxes on the rich to about 95% or more. Get all that accumulated money out of their grubby little hands and reintroduce it to the economy.

  26. amirite 26
    21 April 2014 at 7:27 pm

    Jesse Colombo’s response to Steven Joyce today, Steven Joyce may have to apply water to the burned area soon

    http://www.forbes.com/sites/jessecolombo/2014/04/21/its-not-a-bubble-until-its-officially-denied-new-zealand-edition/

    • Paul 26.1
      21 April 2014 at 7:35 pm

      The most eye-opening section.

      “The reality is that I did look at New Zealand’s official GDP figures and found that the finance, insurance and business services sector accounts for 28.8 percent of the country’s GDP, while agriculture accounts for only 5.1 percent. After Mr. Joyce’s comment, I did further research and found that food and beverage manufacturing’s share of New Zealand’s GDP is only about 4.35 percent. Agriculture combined with food and beverage manufacturing accounts for only 9.45 percent of New Zealand’s GDP, which is just one-third of the finance, insurance and business sector’s contribution to the economy.

      Maybe Mr. Joyce should take a second look at his own country’s GDP figures.”

      So we’re in hook to the banking and insurance sector.
      Not a good position to be in and quite a different story to the one portrayed about our agricultural base.
      That’s what happens when you hand over the country to a shark from Merrill Lynch.

      • dave 26.1.1
        21 April 2014 at 9:10 pm

        that low ??shit Paul those figures are terrible your right its an eye opener NZ dirty little secret most of the economy is just worthless paper pushing speculative holed out economy

    • karol 26.2
      21 April 2014 at 7:36 pm

      LOL:

      If former Princeton University economics department chairman Ben Bernanke and the IMF can be blindsided by bubbles, my hopes are not very high for New Zealand’s Economic Development Minister Steven Joyce, who studied zoology in university and has no background in economics before 2011.

      And he challenges some of Joyce’s denial statements by referring to some official stats.

    • BM 26.3
      21 April 2014 at 7:39 pm

      I don’t think Joyce will be losing sleep over bubble boys rebuttal.

      • Paul 26.3.1
        21 April 2014 at 7:42 pm

        Of course …that degree in Zoology makes him such an expert to be ignoring warnings from experts about the economy.
        What’s your expertise to be so sure of Mr Joyce’s position?

        • BM 26.3.1.1
          21 April 2014 at 8:20 pm

          In the real world a degree really isn’t worth a lot.

          Practical skills and experience count for so much more.

          • Paul 26.3.1.1.1
            21 April 2014 at 9:06 pm

            So Joyce has more experience and knowledge of the world financial markets than Colombo.
            That’s what you’re saying?

            • BM 26.3.1.1.1.1
              21 April 2014 at 9:47 pm

              He has more experience in creating wealth.

              • amirite …
                22 April 2014 at 7:32 am

                I’m sure most sellers of snake oil have created amazing wealth for themselves. That doesn’t make them experts in medicine.

          • Draco T Bastard 26.3.1.1.2
            22 April 2014 at 7:25 am

            LOL

            RWNJs don’t have any of those but they do have degrees. It’s one of the reasons why our economy is tanking.

  27. dave 27
    21 April 2014 at 9:59 pm

    BM this reporter has really upset you! you need to spend some quality time with your fellow slaters at whale oil. how dare this impartial columnist publish such dangerous information could spoil the party.

  28. dave 28
    22 April 2014 at 6:25 am

    BANK RUN!

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    In 2003, the Court of Appeal delivered its decision in Ngati Apa v Attorney-General, ruling that Māori customary title over the foreshore and seabed had not been universally extinguished, and that the Māori Land Court could determine claims and confirm title if the facts supported it. This kicked off the ...
    No Right TurnBy Idiot/Savant
    1 day ago
  • Gordon Campbell on the Royal Commission report into abuse in care

    Earlier this week at Parliament, Labour leader Chris Hipkins was applauded for saying that the response to the final report of the Royal Commission of Inquiry into Abuse in Care had to be “bigger than politics.” True, but the fine words, apologies and “we hear you” messages will soon ring ...
    WerewolfBy lyndon
    1 day ago
  • The Kākā’s Pick 'n' Mix for Friday, July 26

    TL;DR: In news breaking this morning:The Ministry of Education is cutting $2 billion from its school building programme so the National-ACT-NZ First Coalition Government has enough money to deliver tax cuts; The Government has quietly lowered its child poverty reduction targets to make them easier to achieve;Te Whatu Ora-Health NZ’s ...
    The KakaBy Bernard Hickey
    1 day ago
  • Weekly Roundup 26-July-2024

    Kia ora. These are some stories that caught our eye this week – as always, feel free to share yours in the comments. Our header image this week (via Eke Panuku) shows the planned upgrade for the Karanga Plaza Tidal Swimming Steps. The week in Greater Auckland On ...
    Greater AucklandBy Greater Auckland
    1 day ago
  • God what a relief

    1. What's not to love about the way the Harris campaign is turning things around?a. Nothingb. Love all of itc. God what a reliefd. Not that it will be by any means easye. All of the above 2. Documents released by the Ministry of Health show Associate Health Minister Casey ...
    More Than A FeildingBy David Slack
    1 day ago
  • Trust In Me

    Trust in me in all you doHave the faith I have in youLove will see us through, if only you trust in meWhy don't you, you trust me?In a week that saw the release of the 3,000 page Abuse in Care report Christopher Luxon was being asked about Boot Camps. ...
    Nick’s KōreroBy Nick Rockel
    1 day ago
  • The Hoon around the week to July 26

    TL;DR: The podcast above of the weekly ‘hoon’ webinar for paying subscribers last night features co-hosts and talking about the Royal Commission Inquiry into Abuse in Care report released this week, and with:The Kākā’s climate correspondent on a UN push to not recognise carbon offset markets and ...
    The KakaBy Bernard Hickey
    1 day ago
  • The Kākā’s Journal of Record for Friday, July 26

    TL;DR: As of 6:00 am on Friday, July 26, the top six announcements, speeches, reports and research around housing, climate and poverty in Aotearoa’s political economy in the last day are:Transport: Simeon Brown announced $802.9 million in funding for 18 new trains on the Wairarapa and Manawatū rail lines, which ...
    The KakaBy Bernard Hickey
    1 day ago
  • Radical law changes needed to build road

    The northern expressway extension from Warkworth to Whangarei is likely to require radical changes to legislation if it is going to be built within the foreseeable future. The Government’s powers to purchase land, the planning process and current restrictions on road tolling are all going to need to be changed ...
    PolitikBy Richard Harman
    2 days ago
  • Skeptical Science New Research for Week #30 2024

    Open access notables Could an extremely cold central European winter such as 1963 happen again despite climate change?, Sippel et al., Weather and Climate Dynamics: Here, we first show based on multiple attribution methods that a winter of similar circulation conditions to 1963 would still lead to an extreme seasonal ...
    Skeptical Science
    2 days ago
  • First they came for the Māori

    Text within this block will maintain its original spacing when publishedFirst they came for the doctors But I was confused by the numbers and costs So I didn't speak up Then they came for our police and nurses And I didn't think we could afford those costs anyway So I ...
    Mountain TuiBy Mountain Tui
    2 days ago
  • Join us for the weekly Hoon on YouTube Live

    Photo by Joshua J. Cotten on UnsplashWe’re back again after our mid-winter break. We’re still with the ‘new’ day of the week (Thursday rather than Friday) when we have our ‘hoon’ webinar with paying subscribers to The Kākā for an hour at 5 pm.Jump on this link on YouTube Livestream ...
    The KakaBy Bernard Hickey
    2 days ago
  • Will the real PM Luxon please stand up?

    Notes: This is a free article. Abuse in Care themes are mentioned. Video is at the bottom.BackgroundYesterday’s report into Abuse in Care revealed that at least 1 in 3 of all who went through state and faith based care were abused - often horrifically. At least, because not all survivors ...
    Mountain TuiBy Mountain Tui
    2 days ago
  • Will debt reduction trump abuse in care redress?

    Luxon speaks in Parliament yesterday about the Abuse in Care report. Photo: Hagen Hopkins/Getty ImagesTL;DR: The top six things I’ve noted around housing, climate and poverty in Aotearoa’s political economy today are:PM Christopher Luxon said yesterday in tabling the Abuse in Care report in Parliament he wanted to ‘do the ...
    The KakaBy Bernard Hickey
    2 days ago
  • Olywhites and Time Bandits

    About a decade ago I worked with a bloke called Steve. He was the grizzled veteran coder, a few years older than me, who knew where the bodies were buried - code wise. Despite his best efforts to be approachable and friendly he could be kind of gruff, through to ...
    Nick’s KōreroBy Nick Rockel
    2 days ago
  • Why were the 1930s so hot in North America?

    This is a re-post from Yale Climate Connections by Jeff Masters and Bob Henson Those who’ve trawled social media during heat waves have likely encountered a tidbit frequently used to brush aside human-caused climate change: Many U.S. states and cities had their single hottest temperature on record during the 1930s, setting incredible heat marks ...
    Skeptical Science
    2 days ago
  • Throwback Thursday – Thinking about Expressways

    Some of the recent announcements from the government have reminded us of posts we’ve written in the past. Here’s one from early 2020. There were plenty of reactions to the government’s infrastructure announcement a few weeks ago which saw them fund a bunch of big roading projects. One of ...
    Greater AucklandBy Greater Auckland
    2 days ago
  • The Kākā’s Pick 'n' Mix for Thursday, July 25

    TL;DR: My pick of the top six links elsewhere around housing, climate and poverty in Aotearoa’s political economy in the last day or so to 7:00 am on Thursday, July 25 are:News: Why Electric Kiwi is closing to new customers - and why it matters RNZ’s Susan EdmundsScoop: Government drops ...
    The KakaBy Bernard Hickey
    2 days ago
  • The Possum: Demon or Friend?

    Hi,I felt a small wet tongue snaking through one of the holes in my Crocs. It explored my big toe, darting down one side, then the other. “He’s looking for some toe cheese,” said the woman next to me, words that still haunt me to this day.Growing up in New ...
    David FarrierBy David Farrier
    2 days ago
  • Not a story

    Yesterday I happily quoted the Prime Minister without fact-checking him and sure enough, it turns out his numbers were all to hell. It’s not four kg of Royal Commission report, it’s fourteen.My friend and one-time colleague-in-comms Hazel Phillips gently alerted me to my error almost as soon as I’d hit ...
    More Than A FeildingBy David Slack
    2 days ago
  • The Kākā’s Journal of Record for Thursday, July 25

    TL;DR: As of 6:00 am on Thursday, July 25, the top six announcements, speeches, reports and research around housing, climate and poverty in Aotearoa’s political economy in the last day were:The Abuse in Care Royal Commission of Inquiry published its final report yesterday.PM Christopher Luxon and The Minister responsible for ...
    The KakaBy Bernard Hickey
    2 days ago
  • A tougher line on “proactive release”?

    The Official Information Act has always been a battle between requesters seeking information, and governments seeking to control it. Information is power, so Ministers and government agencies want to manage what is released and when, for their own convenience, and legality and democracy be damned. Their most recent tactic for ...
    No Right TurnBy Idiot/Savant
    3 days ago
  • 'Let's build a motorway costing $100 million per km, before emissions costs'

    TL;DR: The top six things I’ve noted around housing, climate and poverty in Aotearoa’s political economy today are:Transport and Energy Minister Simeon Brown is accelerating plans to spend at least $10 billion through Public Private Partnerships (PPPs) to extend State Highway One as a four-lane ‘Expressway’ from Warkworth to Whangarei ...
    The KakaBy Bernard Hickey
    3 days ago
  • Lester's Prescription – Positive Bleeding.

    I live my life (woo-ooh-ooh)With no control in my destinyYea-yeah, yea-yeah (woo-ooh-ooh)I can bleed when I want to bleedSo come on, come on (woo-ooh-ooh)You can bleed when you want to bleedYea-yeah, come on (woo-ooh-ooh)Everybody bleed when they want to bleedCome on and bleedGovernments face tough challenges. Selling unpopular decisions to ...
    Nick’s KōreroBy Nick Rockel
    3 days ago
  • Casey Costello gaslights Labour in the House

    Please note:To skip directly to the- parliamentary footage in the video, scroll to 1:21 To skip to audio please click on the headphone icon on the left hand side of the screenThis video / audio section is under development. ...
    Mountain TuiBy Mountain Tui
    3 days ago
  • Why is the Texas grid in such bad shape?

    This is a re-post from the Climate Brink by Andrew Dessler Headline from 2021 The Texas grid, run by ERCOT, has had a rough few years. In 2021, winter storm Uri blacked out much of the state for several days. About a week ago, Hurricane Beryl knocked out ...
    Skeptical Science
    3 days ago
  • Gordon Campbell on a textbook case of spending waste by the Luxon government

    Given the crackdown on wasteful government spending, it behooves me to point to a high profile example of spending by the Luxon government that looks like a big, fat waste of time and money. I’m talking about the deployment of NZDF personnel to support the US-led coalition in the Red ...
    WerewolfBy lyndon
    3 days ago
  • The Kākā’s Pick 'n' Mix for Wednesday, July 24

    TL;DR: My pick of the top six links elsewhere around housing, climate and poverty in Aotearoa’s political economy in the last day or so to 7:40 am on Wednesday, July 24 are:Deep Dive: Chipping away at the housing crisis, including my comments RNZ/Newsroom’s The DetailNews: Government softens on asset sales, ...
    The KakaBy Bernard Hickey
    3 days ago
  • LXR Takaanini

    As I reported about the city centre, Auckland’s rail network is also going through a difficult and disruptive period which is rapidly approaching a culmination, this will result in a significant upgrade to the whole network. Hallelujah. Also like the city centre this is an upgrade predicated on the City ...
    Greater AucklandBy Patrick Reynolds
    3 days ago
  • Four kilograms of pain

    Today, a 4 kilogram report will be delivered to Parliament. We know this is what the report of the Royal Commission of Inquiry into Abuse in State and Faith-based Care weighs, because our Prime Minister told us so.Some reporter had blindsided him by asking a question about something done by ...
    More Than A FeildingBy David Slack
    3 days ago
  • The Kākā’s Journal of Record for Wednesday, July 24

    TL;DR: As of 7:00 am on Wednesday, July 24, the top six announcements, speeches, reports and research around housing, climate and poverty in Aotearoa’s political economy in the last day are:Beehive: Transport Minister Simeon Brown announced plans to use PPPs to fund, build and run a four-lane expressway between Auckland ...
    The KakaBy Bernard Hickey
    3 days ago
  • Luxon gets caught out

    NewstalkZB host Mike Hosking, who can usually be relied on to give Prime Minister Christopher Luxon an easy run, did not do so yesterday when he interviewed him about the HealthNZ deficit. Luxon is trying to use a deficit reported last year by HealthNZ as yet another example of the ...
    PolitikBy Richard Harman
    4 days ago
  • A worrying sign

    Back in January a StatsNZ employee gave a speech at Rātana on behalf of tangata whenua in which he insulted and criticised the government. The speech clearly violated the principle of a neutral public service, and StatsNZ started an investigation. Part of that was getting an external consultant to examine ...
    No Right TurnBy Idiot/Savant
    4 days ago
  • Are we fine with 47.9% home-ownership by 2048?

    Renting for life: Shared ownership initiatives are unlikely to slow the slide in home ownership by much. Photo: Lynn Grieveson / The KākāTL;DR: The top six things I’ve noted around housing, climate and poverty in Aotearoa’s political economy today are:A Deloitte report for Westpac has projected Aotearoa’s home-ownership rate will ...
    The KakaBy Bernard Hickey
    4 days ago
  • Let's Win This

    You're broken down and tiredOf living life on a merry go roundAnd you can't find the fighterBut I see it in you so we gonna walk it outAnd move mountainsWe gonna walk it outAnd move mountainsAnd I'll rise upI'll rise like the dayI'll rise upI'll rise unafraidI'll rise upAnd I'll ...
    Nick’s KōreroBy Nick Rockel
    4 days ago
  • Waimahara: The Singing Spirit of Water

    There’s been a change in Myers Park. Down the steps from St. Kevin’s Arcade, past the grassy slopes, the children’s playground, the benches and that goat statue, there has been a transformation. The underpass for Mayoral Drive has gone from a barren, grey, concrete tunnel, to a place that thrums ...
    Greater AucklandBy Connor Sharp
    4 days ago
  • A major milestone: Global climate pollution may have just peaked

    This is a re-post from Yale Climate Connections Global society may have finally slammed on the brakes for climate-warming pollution released by human fossil fuel combustion. According to the Carbon Monitor Project, the total global climate pollution released between February and May 2024 declined slightly from the amount released during the same ...
    Skeptical Science
    4 days ago
  • The Kākā’s Pick 'n' Mix for Tuesday, July 23

    TL;DR: My pick of the top six links elsewhere around housing, climate and poverty in Aotearoa’s political economy in the last day or so to 7:00 am on Tuesday, July 23 are:Deep Dive: Penlink: where tolling rhetoric meets reality BusinessDesk-$$$’s Oliver LewisScoop: Te Pūkenga plans for regional polytechs leak out ...
    The KakaBy Bernard Hickey
    4 days ago
  • The Kākā’s Journal of Record for Tuesday, July 23

    TL;DR: As of 6:00 am on Tuesday, July 23, the top six announcements, speeches, reports and research around housing, climate and poverty in Aotearoa’s political economy in the last day are:Health: Shane Reti announced the Board of Te Whatu Ora- Health New Zealand was being replaced with Commissioner Lester Levy ...
    The KakaBy Bernard Hickey
    4 days ago
  • HealthNZ and Luxon at cross purposes over budget blowout

    Health NZ warned the Government at the end of March that it was running over Budget. But the reasons it gave were very different to those offered by the Prime Minister yesterday. Prime Minister Christopher Luxon blamed the “botched merger” of the 20 District Health Boards (DHBs) to create Health ...
    PolitikBy Richard Harman
    5 days ago
  • 2500-3000 more healthcare staff expected to be fired, as Shane Reti blames Labour for a budget defic...

    Long ReadKey Summary: Although National increased the health budget by $1.4 billion in May, they used an old funding model to project health system costs, and never bothered to update their pre-election numbers. They were told during the Health Select Committees earlier in the year their budget amount was deficient, ...
    Mountain TuiBy Mountain Tui
    5 days ago
  • Might Kamala Harris be about to get a 'stardust' moment like Jacinda Ardern?

    As a momentous, historic weekend in US politics unfolded, analysts and commentators grasped for precedents and comparisons to help explain the significance and power of the choice Joe Biden had made. The 46th president had swept the Democratic party’s primaries but just over 100 days from the election had chosen ...
    PunditBy Tim Watkin
    5 days ago
  • Solutions Interview: Steven Hail on MMT & ecological economics

    TL;DR: I’m casting around for new ideas and ways of thinking about Aotearoa’s political economy to find a few solutions to our cascading and self-reinforcing housing, poverty and climate crises.Associate Professor runs an online masters degree in the economics of sustainability at Torrens University in Australia and is organising ...
    The KakaBy Steven Hail
    5 days ago
  • Reported back

    The Finance and Expenditure Committee has reported back on National's Local Government (Water Services Preliminary Arrangements) Bill. The bill sets up water for privatisation, and was introduced under urgency, then rammed through select committee with no time even for local councils to make a proper submission. Naturally, national's select committee ...
    No Right TurnBy Idiot/Savant
    5 days ago
  • Vandrad the Viking, Christopher Coombes, and Literary Archaeology

    Some years ago, I bought a book at Dunedin’s Regent Booksale for $1.50. As one does. Vandrad the Viking (1898), by J. Storer Clouston, is an obscure book these days – I cannot find a proper online review – but soon it was sitting on my shelf, gathering dust alongside ...
    A Phuulish FellowBy strda221
    5 days ago
  • Gordon Campbell On The Biden Withdrawal

    History is not on the side of the centre-left, when Democratic presidents fall behind in the polls and choose not to run for re-election. On both previous occasions in the past 75 years (Harry Truman in 1952, Lyndon Johnson in 1968) the Democrats proceeded to then lose the White House ...
    WerewolfBy lyndon
    5 days ago
  • Joe Biden's withdrawal puts the spotlight back on Kamala and the USA's complicated relatio...

    This is a free articleCoverageThis morning, US President Joe Biden announced his withdrawal from the Presidential race. And that is genuinely newsworthy. Thanks for your service, President Biden, and all the best to you and yours.However, the media in New Zealand, particularly the 1News nightly bulletin, has been breathlessly covering ...
    Mountain TuiBy Mountain Tui
    5 days ago
  • Why we have to challenge our national fiscal assumptions

    A homeless person’s camp beside a blocked-off slipped damage walkway in Freeman’s Bay: we are chasing our tail on our worsening and inter-related housing, poverty and climate crises. Photo: Photo: Lynn Grieveson / The KākāTL;DR: The top six things I’ve noted around housing, climate and poverty in Aotearoa’s political economy ...
    The KakaBy Bernard Hickey
    5 days ago
  • Existential Crisis and Damaged Brains

    What has happened to it all?Crazy, some'd sayWhere is the life that I recognise?(Gone away)But I won't cry for yesterdayThere's an ordinary worldSomehow I have to findAnd as I try to make my wayTo the ordinary worldYesterday morning began as many others - what to write about today? I began ...
    Nick’s KōreroBy Nick Rockel
    5 days ago
  • A speed limit is not a target, and yet…

    This is a guest post from longtime supporter Mr Plod, whose previous contributions include a proposal that Hamilton become New Zealand’s capital city, and that we should switch which side of the road we drive on. A recent Newsroom article, “Back to school for the Govt’s new speed limit policy“, ...
    Greater AucklandBy Guest Post
    5 days ago
  • The Kākā’s Pick 'n' Mix for Monday, July 22

    TL;DR: My pick of the top six links elsewhere around housing, climate and poverty in Aotearoa’s political economy in the last day or so to 7:00 am on Monday, July 22 are:Today’s Must Read: Father and son live in a tent, and have done for four years, in a million ...
    The KakaBy Bernard Hickey
    5 days ago
  • The Kākā’s Journal of Record for Monday, July 22

    TL;DR: As of 7:00 am on Monday, July 22, the top six announcements, speeches, reports and research around housing, climate and poverty in Aotearoa’s political economy in the last day are:US President Joe Biden announced via X this morning he would not stand for a second term.Multinational professional services firm ...
    The KakaBy Bernard Hickey
    5 days ago
  • 2024 SkS Weekly Climate Change & Global Warming News Roundup #29

    A listing of 32 news and opinion articles we found interesting and shared on social media during the past week: Sun, July 14, 2024 thru Sat, July 20, 2024. Story of the week As reflected by preponderance of coverage, our Story of the Week is Project 2025. Until now traveling ...
    Skeptical Science
    6 days ago
  • I'd like to share what I did this weekend

    This weekend, a friend pointed out someone who said they’d like to read my posts, but didn’t want to pay. And my first reaction was sympathy.I’ve already told folks that if they can’t comfortably subscribe, and would like to read, I’d be happy to offer free subscriptions. I don’t want ...
    Mountain TuiBy Mountain Tui
    6 days ago
  • For the children – Why mere sentiment can be a misleading force in our lives, and lead to unex...

    National: The Party of ‘Law and Order’ IntroductionThis weekend, the Government formally kicked off one of their flagship policy programs: a military style boot camp that New Zealand has experimented with over the past 50 years. Cartoon credit: Guy BodyIt’s very popular with the National Party’s Law and Order image, ...
    Mountain TuiBy Mountain Tui
    6 days ago
  • A friend in uncertain times

    Day one of the solo leg of my long journey home begins with my favourite sound: footfalls in an empty street. 5.00 am and it’s already light and already too warm, almost.If I can make the train that leaves Budapest later this hour I could be in Belgrade by nightfall; ...
    More Than A FeildingBy David Slack
    6 days ago
  • The Chaotic World of Male Diet Influencers

    Hi,We’ll get to the horrific world of male diet influencers (AKA Beefy Boys) shortly, but first you will be glad to know that since I sent out the Webworm explaining why the assassination attempt on Donald Trump was not a false flag operation, I’ve heard from a load of people ...
    David FarrierBy David Farrier
    6 days ago
  • It's Starting To Look A Lot Like… Y2K

    Do you remember Y2K, the threat that hung over humanity in the closing days of the twentieth century? Horror scenarios of planes falling from the sky, electronic payments failing and ATMs refusing to dispense cash. As for your VCR following instructions and recording your favourite show - forget about it.All ...
    Nick’s KōreroBy Nick Rockel
    1 week ago
  • Bernard’s Saturday Soliloquy for the week to July 20

    Climate Change Minister Simon Watts being questioned by The Kākā’s Bernard Hickey.TL;DR: My top six things to note around housing, climate and poverty in Aotearoa’s political economy in the week to July 20 were:1. A strategy that fails Zero Carbon Act & Paris targetsThe National-ACT-NZ First Coalition Government finally unveiled ...
    The KakaBy Bernard Hickey
    1 week ago
  • Pharmac Director, Climate Change Commissioner, Health NZ Directors – The latest to quit this m...

    Summary:As New Zealand loses at least 12 leaders in the public service space of health, climate, and pharmaceuticals, this month alone, directly in response to the Government’s policies and budget choices, what lies ahead may be darker than it appears. Tui examines some of those departures and draws a long ...
    Mountain TuiBy Mountain Tui
    1 week ago
  • Flooding Housing Policy

    The Minister of Housing’s ambition is to reduce markedly the ratio of house prices to household incomes. If his strategy works it would transform the housing market, dramatically changing the prospects of housing as an investment.Leaving aside the Minister’s metaphor of ‘flooding the market’ I do not see how the ...
    PunditBy Brian Easton
    1 week ago
  • A Voyage Among the Vandals: Accepted (Again!)

    As previously noted, my historical fantasy piece, set in the fifth-century Mediterranean, was accepted for a Pirate Horror anthology, only for the anthology to later fall through. But in a good bit of news, it turned out that the story could indeed be re-marketed as sword and sorcery. As of ...
    A Phuulish FellowBy strda221
    1 week ago
  • The Kākā's Chorus for Friday, July 19

    An employee of tobacco company Philip Morris International demonstrates a heated tobacco device. Photo: Getty ImagesTL;DR: The top six things I’ve noted around housing, climate and poverty in Aotearoa’s political economy on Friday, July 19 are:At a time when the Coalition Government is cutting spending on health, infrastructure, education, housing ...
    The KakaBy Bernard Hickey
    1 week ago
  • The Kākā’s Pick 'n' Mix for Friday, July 19

    TL;DR: My pick of the top six links elsewhere around housing, climate and poverty in Aotearoa’s political economy in the last day or so to 8:30 am on Friday, July 19 are:Scoop: NZ First Minister Casey Costello orders 50% cut to excise tax on heated tobacco products. The minister has ...
    The KakaBy Bernard Hickey
    1 week ago
  • Weekly Roundup 19-July-2024

    Kia ora, it’s time for another Friday roundup, in which we pull together some of the links and stories that caught our eye this week. Feel free to add more in the comments! Our header image this week shows a foggy day in Auckland town, captured by Patrick Reynolds. ...
    Greater AucklandBy Greater Auckland
    1 week ago
  • Weekly Climate Wrap: A market-led plan for failure

    TL;DR : Here’s the top six items climate news for Aotearoa this week, as selected by Bernard Hickey and The Kākā’s climate correspondent Cathrine Dyer. A discussion recorded yesterday is in the video above and the audio of that sent onto the podcast feed.The Government released its draft Emissions Reduction ...
    The KakaBy Bernard Hickey
    1 week ago
  • Tobacco First

    Save some money, get rich and old, bring it back to Tobacco Road.Bring that dynamite and a crane, blow it up, start all over again.Roll up. Roll up. Or tailor made, if you prefer...Whether you’re selling ciggies, digging for gold, catching dolphins in your nets, or encouraging folks to flutter ...
    Nick’s KōreroBy Nick Rockel
    1 week ago
  • Trump’s Adopted Son.

    Waiting In The Wings: For truly, if Trump is America’s un-assassinated Caesar, then J.D. Vance is America’s Octavian, the Republic’s youthful undertaker – and its first Emperor.DONALD TRUMP’S SELECTION of James D. Vance as his running-mate bodes ill for the American republic. A fervent supporter of Viktor Orban, the “illiberal” prime ...
    Bowalley Road
    1 week ago

  • Joint statement from the Prime Ministers of Canada, Australia and New Zealand

    Australia, Canada and New Zealand today issued the following statement on the need for an urgent ceasefire in Gaza and the risk of expanded conflict between Hizballah and Israel. The situation in Gaza is catastrophic. The human suffering is unacceptable. It cannot continue.  We remain unequivocal in our condemnation of ...
    BeehiveBy beehive.govt.nz
    22 hours ago
  • AG reminds institutions of legal obligations

    Attorney-General Judith Collins today reminded all State and faith-based institutions of their legal obligation to preserve records relevant to the safety and wellbeing of those in its care. “The Abuse in Care Inquiry’s report has found cases where records of the most vulnerable people in State and faith‑based institutions were ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • More young people learning about digital safety

    Minister of Internal Affairs Brooke van Velden says the Government’s online safety website for children and young people has reached one million page views.  “It is great to see so many young people and their families accessing the site Keep It Real Online to learn how to stay safe online, and manage ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Speech to the Conference for General Practice 2024

    Tēnā tātou katoa,  Ngā mihi te rangi, ngā mihi te whenua, ngā mihi ki a koutou, kia ora mai koutou. Thank you for the opportunity to be here and the invitation to speak at this 50th anniversary conference. I acknowledge all those who have gone before us and paved the ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Employers and payroll providers ready for tax changes

    New Zealand’s payroll providers have successfully prepared to ensure 3.5 million individuals will, from Wednesday next week, be able to keep more of what they earn each pay, says Finance Minister Nicola Willis and Revenue Minister Simon Watts.  “The Government's tax policy changes are legally effective from Wednesday. Delivering this tax ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Experimental vineyard futureproofs wine industry

    An experimental vineyard which will help futureproof the wine sector has been opened in Blenheim by Associate Regional Development Minister Mark Patterson. The covered vineyard, based at the New Zealand Wine Centre – Te Pokapū Wāina o Aotearoa, enables controlled environmental conditions. “The research that will be produced at the Experimental ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Funding confirmed for regions affected by North Island Weather Events

    The Coalition Government has confirmed the indicative regional breakdown of North Island Weather Event (NIWE) funding for state highway recovery projects funded through Budget 2024, Transport Minister Simeon Brown says. “Regions in the North Island suffered extensive and devastating damage from Cyclone Gabrielle and the 2023 Auckland Anniversary Floods, and ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Indonesian Foreign Minister to visit

    Indonesia’s Foreign Minister, Retno Marsudi, will visit New Zealand next week, Foreign Minister Winston Peters has announced.   “Indonesia is important to New Zealand’s security and economic interests and is our closest South East Asian neighbour,” says Mr Peters, who is currently in Laos to engage with South East Asian partners. ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Strengthening partnership with Ngāti Maniapoto

    He aha te kai a te rangatira? He kōrero, he kōrero, he kōrero. The government has reaffirmed its commitment to supporting the aspirations of Ngāti Maniapoto, Minister for Māori Development Tama Potaka says. “My thanks to Te Nehenehenui Trust – Ngāti Maniapoto for bringing their important kōrero to a ministerial ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Transport Minister thanks outgoing CAA Chair

    Transport Minister Simeon Brown has thanked outgoing Chair of the Civil Aviation Authority, Janice Fredric, for her service to the board.“I have received Ms Fredric’s resignation from the role of Chair of the Civil Aviation Authority,” Mr Brown says.“On behalf of the Government, I want to thank Ms Fredric for ...
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    2 days ago
  • Test for Customary Marine Title being restored

    The Government is proposing legislation to overturn a Court of Appeal decision and amend the Marine and Coastal Area Act in order to restore Parliament’s test for Customary Marine Title, Treaty Negotiations Minister Paul Goldsmith says.  “Section 58 required an applicant group to prove they have exclusively used and occupied ...
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    2 days ago
  • Opposition united in bad faith over ECE sector review

    Regulation Minister David Seymour says that opposition parties have united in bad faith, opposing what they claim are ‘dangerous changes’ to the Early Childhood Education sector, despite no changes even being proposed yet.  “Issues with affordability and availability of early childhood education, and the complexity of its regulation, has led ...
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    2 days ago
  • Kiwis having their say on first regulatory review

    After receiving more than 740 submissions in the first 20 days, Regulation Minister David Seymour is asking the Ministry for Regulation to extend engagement on the early childhood education regulation review by an extra two weeks.  “The level of interest has been very high, and from the conversations I’ve been ...
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    2 days ago
  • Government upgrading Lower North Island commuter rail

    The Coalition Government is investing $802.9 million into the Wairarapa and Manawatū rail lines as part of a funding agreement with the NZ Transport Agency (NZTA), KiwiRail, and the Greater Wellington and Horizons Regional Councils to deliver more reliable services for commuters in the lower North Island, Transport Minister Simeon ...
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    2 days ago
  • Government moves to ensure flood protection for Wairoa

    Local Government Minister Simeon Brown has announced his intention to appoint a Crown Manager to both Hawke’s Bay Regional and Wairoa District Councils to speed up the delivery of flood protection work in Wairoa."Recent severe weather events in Wairoa this year, combined with damage from Cyclone Gabrielle in 2023 have ...
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    3 days ago
  • PM speech to Parliament – Royal Commission of Inquiry’s Report into Abuse in Care

    Mr Speaker, this is a day that many New Zealanders who were abused in State care never thought would come. It’s the day that this Parliament accepts, with deep sorrow and regret, the Report of the Royal Commission of Inquiry into Abuse in Care.  At the heart of this report are the ...
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    3 days ago
  • Government acknowledges torture at Lake Alice

    For the first time, the Government is formally acknowledging some children and young people at Lake Alice Psychiatric Hospital experienced torture. The final report of the Royal Commission of Inquiry into Abuse in State and Faith-based Care “Whanaketia – through pain and trauma, from darkness to light,” was tabled in Parliament ...
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    3 days ago
  • Government acknowledges courageous abuse survivors

    The Government has acknowledged the nearly 2,400 courageous survivors who shared their experiences during the Royal Commission of Inquiry into Historical Abuse in State and Faith-Based Care. The final report from the largest and most complex public inquiry ever held in New Zealand, the Royal Commission Inquiry “Whanaketia – through ...
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    3 days ago
  • Half a million people use tax calculator

    With a week to go before hard-working New Zealanders see personal income tax relief for the first time in fourteen years, 513,000 people have used the Budget tax calculator to see how much they will benefit, says Finance Minister Nicola Willis.  “Tax relief is long overdue. From next Wednesday, personal income ...
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    3 days ago
  • Paid Parental Leave improvements pass first reading

    Workplace Relations and Safety Minister Brooke van Velden says a bill that has passed its first reading will improve parental leave settings and give non-biological parents more flexibility as primary carer for their child. The Regulatory Systems Amendment Bill (No3), passed its first reading this morning. “It includes a change ...
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    3 days ago
  • Rebuilding the economy through better regulation

    Two Bills designed to improve regulation and make it easier to do business have passed their first reading in Parliament, says Economic Development Minister Melissa Lee. The Regulatory Systems (Economic Development) Amendment Bill and Regulatory Systems (Immigration and Workforce) Amendment Bill make key changes to legislation administered by the Ministry ...
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    3 days ago
  • ‘Open banking’ and ‘open electricity’ on the way

    New legislation paves the way for greater competition in sectors such as banking and electricity, Commerce and Consumer Affairs Minister Andrew Bayly says. “Competitive markets boost productivity, create employment opportunities and lift living standards. To support competition, we need good quality regulation but, unfortunately, a recent OECD report ranked New ...
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    3 days ago
  • Charity lotteries to be permitted to operate online

    Minister of Internal Affairs Brooke van Velden says lotteries for charitable purposes, such as those run by the Heart Foundation, Coastguard NZ, and local hospices, will soon be allowed to operate online permanently. “Under current laws, these fundraising lotteries are only allowed to operate online until October 2024, after which ...
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    4 days ago
  • Accelerating Northland Expressway

    The Coalition Government is accelerating work on the new four-lane expressway between Auckland and Whangārei as part of its Roads of National Significance programme, with an accelerated delivery model to deliver this project faster and more efficiently, Transport Minister Simeon Brown says. “For too long, the lack of resilient transport connections ...
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    4 days ago
  • Sir Don to travel to Viet Nam as special envoy

    Sir Don McKinnon will travel to Viet Nam this week as a Special Envoy of the Government, Foreign Minister Winston Peters has announced.    “It is important that the Government give due recognition to the significant contributions that General Secretary Nguyen Phu Trong made to New Zealand-Viet Nam relations,” Mr ...
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    4 days ago
  • Grant Illingworth KC appointed as transitional Commissioner to Royal Commission

    Minister of Internal Affairs Brooke van Velden says newly appointed Commissioner, Grant Illingworth KC, will help deliver the report for the first phase of the Royal Commission of Inquiry into COVID-19 Lessons, due on 28 November 2024.  “I am pleased to announce that Mr Illingworth will commence his appointment as ...
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    4 days ago
  • NZ to advance relationships with ASEAN partners

    Foreign Minister Winston Peters travels to Laos this week to participate in a series of Association of Southeast Asian Nations (ASEAN)-led Ministerial meetings in Vientiane.    “ASEAN plays an important role in supporting a peaceful, stable and prosperous Indo-Pacific,” Mr Peters says.   “This will be our third visit to ...
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    4 days ago
  • Backing mental health services on the West Coast

    Construction of a new mental health facility at Te Nikau Grey Hospital in Greymouth is today one step closer, Mental Health Minister Matt Doocey says. “This $27 million facility shows this Government is delivering on its promise to boost mental health care and improve front line services,” Mr Doocey says. ...
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    4 days ago
  • NZ support for sustainable Pacific fisheries

    New Zealand is committing nearly $50 million to a package supporting sustainable Pacific fisheries development over the next four years, Foreign Minister Winston Peters and Oceans and Fisheries Minister Shane Jones announced today. “This support consisting of a range of initiatives demonstrates New Zealand’s commitment to assisting our Pacific partners ...
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    4 days ago
  • Students’ needs at centre of new charter school adjustments

    Associate Education Minister David Seymour says proposed changes to the Education and Training Amendment Bill will ensure charter schools have more flexibility to negotiate employment agreements and are equipped with the right teaching resources. “Cabinet has agreed to progress an amendment which means unions will not be able to initiate ...
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    4 days ago
  • Commissioner replaces Health NZ Board

    In response to serious concerns around oversight, overspend and a significant deterioration in financial outlook, the Board of Health New Zealand will be replaced with a Commissioner, Health Minister Dr Shane Reti announced today.  “The previous government’s botched health reforms have created significant financial challenges at Health NZ that, without ...
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    5 days ago
  • Minister to speak at Australian Space Forum

    Minister for Space and Science, Innovation and Technology Judith Collins will travel to Adelaide tomorrow for space and science engagements, including speaking at the Australian Space Forum.  While there she will also have meetings and visits with a focus on space, biotechnology and innovation.  “New Zealand has a thriving space ...
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    5 days ago
  • Climate Change Minister to attend climate action meeting in China

    Climate Change Minister Simon Watts will travel to China on Saturday to attend the Ministerial on Climate Action meeting held in Wuhan.  “Attending the Ministerial on Climate Action is an opportunity to advocate for New Zealand climate priorities and engage with our key partners on climate action,” Mr Watts says. ...
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    5 days ago
  • Oceans and Fisheries Minister to Solomons

    Oceans and Fisheries Minister Shane Jones is travelling to the Solomon Islands tomorrow for meetings with his counterparts from around the Pacific supporting collective management of the region’s fisheries. The 23rd Pacific Islands Forum Fisheries Committee and the 5th Regional Fisheries Ministers’ Meeting in Honiara from 23 to 26 July ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Government launches Military Style Academy Pilot

    The Government today launched the Military Style Academy Pilot at Te Au rere a te Tonga Youth Justice residence in Palmerston North, an important part of the Government’s plan to crackdown on youth crime and getting youth offenders back on track, Minister for Children, Karen Chhour said today. “On the ...
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    1 week ago
  • Nine priority bridge replacements to get underway

    The Government has welcomed news the NZ Transport Agency (NZTA) has begun work to replace nine priority bridges across the country to ensure our state highway network remains resilient, reliable, and efficient for road users, Transport Minister Simeon Brown says.“Increasing productivity and economic growth is a key priority for the ...
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    1 week ago
  • Update on global IT outage

    Acting Prime Minister David Seymour has been in contact throughout the evening with senior officials who have coordinated a whole of government response to the global IT outage and can provide an update. The Department of the Prime Minister and Cabinet has designated the National Emergency Management Agency as the ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • New Zealand, Japan renew Pacific partnership

    New Zealand and Japan will continue to step up their shared engagement with the Pacific, Foreign Minister Winston Peters says.    “New Zealand and Japan have a strong, shared interest in a free, open and stable Pacific Islands region,” Mr Peters says.    “We are pleased to be finding more ways ...
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    1 week ago
  • New infrastructure energises BOP forestry towns

    New developments in the heart of North Island forestry country will reinvigorate their communities and boost economic development, Regional Development Minister Shane Jones says. Mr Jones visited Kaingaroa and Kawerau in Bay of Plenty today to open a landmark community centre in the former and a new connecting road in ...
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    1 week ago
  • 'Pacific Futures'

    President Adeang, fellow Ministers, honourable Diet Member Horii, Ambassadors, distinguished guests.    Minasama, konnichiwa, and good afternoon, everyone.    Distinguished guests, it’s a pleasure to be here with you today to talk about New Zealand’s foreign policy reset, the reasons for it, the values that underpin it, and how it ...
    BeehiveBy beehive.govt.nz
    1 week ago

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