What is at stake this election – housing

Written By: - Date published: 8:59 am, August 16th, 2023 - 87 comments
Categories: act, housing, labour, national, phil twyford, Social issues - Tags:

There is a lot at stake at this election.  A change in Government could see a radical change in direction for the country for the worse.

For housing it pays to recall what Labour inherited in 2017 which was basically a full blown housing crisis.  National always denied there was one, but the briefing for incoming minister Twyford suggested otherwise.

From Henry Cooke at Stuff:

Official figures prepared for the new housing minister estimate a shortfall of 45,000 houses in Auckland, with supply of new homes well behind increased demand.

They also show serious shortfalls in Hamilton and Wellington leading to a nationwide shortage of 71,000, with new minister Phil Twyford saying his government have “inherited a disaster.”

The estimates, never publicly released, were included in a briefing for Twyford from his new ministry partially released to Stuff. It compares population increase with new houses actually built – not just consented.

In Auckland as of 1 June 2017 the Ministry of Business Innovation and Employment (MBIE) put the shortfall at 44,738 homes, following a huge growth in demand through 2013 to 2015 which a more gradual increase in completed new homes did not keep pace with.

Since then a lot has happened.

There has been a surge in new dwellings constructed to levels not seen before.

Over 12,000 new Kainga Ora units have been completed by the Government.  This compares to a net reduction of 1,500 under the last National Government compounded by the fact that numbers of state houses were declining at a time when the population was growing quickly.

And house prices have stabilised and reduced from Covid money printing highs.

There are a number of reasons for this.  Greater housing numbers is important, and the ten year bright line test, effectively a capital gains tax for some land transactions, has played its part.  As has removing interest deductibility for rentals, changed to zoning rules allowing greater intensification and Government grants to Councils for infrastructure.

And preventing foreign nationals from buying houses.

The cumulative effect of this made Kiwibank predict that this year the housing crisis may be over.  Time will tell.

For some there is still a housing crisis.  The remedy is to keep building both public and private housing.

What happens if there is a change of Government?

It is clear that a National Act Government would:

  • Reverse the bright line test changes to make it much less effective.
  • Restore interest deductibility.  Landlords would flood back into the market and prices will then increase.
  • Kneecap Kainga Ora so that its impressive development plans are stymied, like they did last time.
  • Open up immigration.  Last term Immigration was its most important economic growth policy and this will no doubt be repeated.

And it appears National will also reverse the ban on foreign nationals from buying houses.

This all makes sense when you recall that Luxon himself owns eight properties.  And National MPs are also multi property owners including Police spokesperson Mark Mitchell who forgot that he owned a property in Coromandel and had to issue an amendment to his Register of Pecuniary Interests.

It makes even more sense when you recall that Bayleys Corporation and Garth Barfoot of Barfoot and Thompson are regular donors.

Some on the left have criticised Labour for not solving the housing crisis quickly enough.  Given the depth of the problem and the complexity of the solutions I am not sure this criticism is warranted.

Perhaps they could have resolved this more quickly.  With the benefit of hindsight they used too much fiscal stimulation during Covid.  But if you think that changing the Government will improve things I have a bridge I want to sell you.

87 comments on “What is at stake this election – housing ”

  1. Blazer 1

    Labour have already 'opened' up ..immigration.

    Labour has to live with their 100,000 new homes debacle.

    Labour have introduced some good measures to dampen the ludicrous housing ponzi,but need to do more.

    National reversing the brightline,interest deductibility and defunding K.O will be catastrophic.

    What amazes me is that you would think aspiring home owners ,parents who want their children and grandchildren to own their own homes and voters in general who are not property investors would far outnumber vested interests when….it came to casting a ballot.

    The social ramifications are there to see,people in motels,cars ,on the streets..etc.

    This is one vote Natz are guaranteed.

    Banker who earns $2.3m from HNZ wins most lucrative contracts – NZ Herald

    • Patricia Bremner 1.1

      Those sales of State homes took place in 2015 and 2016.

      John Key was PM then. Yes that Banker will support National as he benefited.

      Why can't you let go of Twyford's error?

      Megan Woods work in housing has been game changing. All graphs show that. Yet she is seldom mentioned on the Standard.

      I think there would be problems with a change of Government, as they need money for tax cuts, not state houses.

      They will find ways to trim any programmes, make them unworkable so they fail. Put their own ticket clipping operators in

    • mikesh 1.2

      and voters in general who are not property investors would far outnumber vested interests when….it came to casting a ballot.

      Probably a large number of property owners now own their homes freehold, having benefited from decades of capital gains.

  2. pat 2

    Your final summation is valid except….

    • Open up immigration. Last term Immigration was its most important economic growth policy and this will no doubt be repeated.

    In this area there is no difference between National and Labour as the figures demonstrate. Sadly as well noted by Bernard Hickey's linked piece yesterday, this is ,and has been for some time, NZ's economic model, irrespective of administration

  3. Chris 3

    "A change in Government could see a radical change in direction for the country for the worse."

    But it might not?

    • tc 3.1

      Based on nats slogan it will Chris.

      You can trust them on that if elected as those backers will want a return on their investment

    • mickysavage 3.2

      It will see a change for the worse. It could be radical which is terrifying. I don't sense any John Key incrementalism.

      • Chris 3.2.1

        I was being cheeky. Yes, it definitely will see a radical change for the worse – not a matter of could!

  4. Sabine 4

    that has been at stake since 2007 at the very least.

    https://en.wikipedia.org/wiki/New_Zealand_property_bubble#:~:text=Nationwide%2C%20property%20prices%20increased%2080,than%20the%20pre%2Dcrisis%20peak.

    While house prices increased almost-continuously from the early 1990s, it was not until 2007 that the media started reporting an affordability crisis.[28]

    Nationwide, property prices increased 80% in real terms between 2002 and 2008.[29]

    The Global Financial Crisis caused a 10% drop in nominal prices in 2008, however price growth picked up again significantly following the crisis and by 2014, nominal prices in Auckland were 34% higher than the pre-crisis peak.[30]

    As of 2019, the average house price in New Zealand exceeded NZ$700,000, with average prices in the country's largest city, Auckland, exceeding $1,000,000 in numerous suburbs.[31]

    The ratio between median house price and median annual household income increased from just over 3.0 in January 2002 to 6.27 in March 2017, with Auckland's figures 4.0 to 9.81 respectively.[32][33]

    As of 2021, the average house price in New Zealand exceeded $1,000,000[34]

    • weka 4.1

      please don't use a lot of bold, we need it for moderation.

    • Chris 4.2

      "While house prices increased almost-continuously from the early 1990s, it was not until 2007 that the media started reporting an affordability crisis."

      Unless you're wealthy, in which case the affordability crisis represents a "strong market".

  5. Incognito 5

    This research paper was published only a few days ago and is topical.

    Over the last 20 years, wage rises and the relative supply and demand of homes were the 2 key drivers of rents at both the national and regional level, the paper shows.

    https://www.rbnz.govt.nz/hub/news/2023/08/what-drives-rents-in-new-zealand

  6. Molly 6

    "Over 12,000 new Kainga Ora units have been completed by the Government. This compares to a net reduction of 1,500 under the last National Government compounded by the fact that numbers of state houses were declining at a time when the population was growing quickly."'

    Can you provide a link to this data?

    I became discouraged from reading the Kaianga Ora reports when I found the new builds reporting separated from the demolition of units reporting, making the actual delivery of usable units much less impressive.

    If you have a table that shows all this information in one place, it'd be much appreciated.

    • pat 6.2

      The latest stats show an increase of a bit over 7000 in public housing (to the end of march2023)…the june quarter figures should be released any day and the annual report indicated an expected increase to 71,000 units of public and supported housing portfolio…an additional 350 units from march.

      https://kaingaora.govt.nz/assets/Publications/Managed-stock/Managed-Stock-National-Summary-March-2023.pdf

      You are right to be sceptical.

      • mickysavage 6.2.1

        Why? The Beehive press release would have gone through dozens of eyeballs to make sure it was accurate. There is a footnote:

        "Since October 2017, there has been a net increase of 12,017 public homes, with 9,917 of these being new builds (as at April 2023)."

        And there is this weird dynamic where X increase is good but Y increase which is less is bad. It is an increase. If the net increase was 1 I would still celebrate it.

        • pat 6.2.1.1

          Yes an increase is better than not, however there is a significant discrepancy between the Gov claims and the data provided by Kainga Ora.

          Heaven forbid that politicians would gild the lily

          • Louis 6.2.1.1.1

            OIA Kāinga Ora. The Kāinga Ora dashboard linked @ 6.1 disagrees with your opinion.

            • pat 6.2.1.1.1.1

              No need to OIA…the information is freely available to anyone who cares to read it, including archived data from before Labour were the Government..

              https://kaingaora.govt.nz/publications/oia-and-proactive-releases/housing-statistics/housing-statistics-archive/

              • Louis

                Just trying to be helpful since you are having difficulty in accepting the facts.

                • pat

                  The facts

                  Managed stock Sept 2017 63,209

                  Managed stock March 2023 70,649

                  Increase 7,440

                  • Louis

                    The Kāinga Ora dashboard linked @ 6.1 disagrees with you.

                    • pat

                      There is no KO dashboard @ 6.1….there is however a HUD dashboard.

                      I think KO may know what stock they are managing as they are required by statute to report that information.

                    • Louis

                      The dashboard consists of Kāinga Ora stats. Was it you that I had a discussion with last year over the government's announcement of adding 10,000 public homes? if memory serves there was doubt about that number then too. I sent an OIA to Kāinga Ora and they confirmed it with a link to the government's announcement which was https://www.beehive.govt.nz/release/10000-more-permanent-public-homes-added-under-labour-government and suggested for more information about the housing stock would be found on the Government Housing Dashboard, managed by Te Tūāpapa Kura Kāinga, Ministry of Housing and Urban Development

                      https://www.hud.govt.nz/stats-and-insight/the-government-housingdashboard/public-homes/.

                    • Incognito []

                      Your memory serves you well: https://thestandard.org.nz/labour-poised-to-resolve-housing-supply-crisis/#comment-1907878.

                      It’s rather depressing to observe how fixed some people’s minds are 🙁

                    • pat

                      What is more depressing is the willingness of tribalist's to unquestionably accept anything 'their team' claims.

                      I will happily accept an increase of the claimed public housing since Labour took office WHEN a credible explanation is provided as to why KO's own records show otherwise.

                      Lois stated she OIA'd KO regarding the the discrepancy and was provided a link to the HUD site …or in other words no explanation…either the OIA request was poorly worded or the obligations under the Act were ignored.

                      As stated earlier KO are required by statute to provide the information in their stock level statistics so one could expect a suitable level of care and accuracy from that reporting.

                    • Louis

                      Thank you for the link Incognito and I agree with you that it is depressing and tedious how fixed some people's minds are. Sheer denialism of the facts.

                    • Louis

                      @Pat. You have been provided with the facts, yet you continue to deny it. As mentioned previously, the dashboard consists of Kāinga Ora stats.

                      'Lois'? The name is Louis. Your response is loaded with put downs and false assumptions.

                      'the OIA request was poorly worded or the obligations under the Act were ignored' Neither of your assumptions is true.

                      I have tried to post a screenshot of some of the relevant correspondence received from Kāinga Ora, but it didn't take and although I cannot provide a link to my personal correspondence with Kāinga Ora, the following is a direct quote: 'More information about our housing stock can be found on the Government Housing Dashboard, managed by Te Tūāpapa Kura Kāinga, Ministry of Housing and Urban Development here: https://www.hud.govt.nz/stats-and-insight/the-government-housingdashboard/public-homes/.'

                      Suggest you contact Kāinga Ora through https://kaingaora.govt.nz/contact-us/ or email Kāinga Ora at enquiries1@kaingaora.govt.nz for the 'explanation' you seek.

                    • pat

                      Louis…my apologies for incorrectly typing your name.

                      Re your OIA…you do not need to post copies of your OIA response(s), all that is needed is a clear explanation as to why KO's reporting states a stock level of public housing of 70,649 (as at 31 march 2023) whereas HUD claim (using you say KO data) a public housing stock of 78,064 (as at the same date)

                      If that was the purpose of your OIA then a referral to HUD dashboard is no explanation.

                      Demolitions/sales do not explain any difference as HUD claim a net figure

                    • Louis

                      @Pat, again you are making assumptions. Just contact Kāinga Ora through https://kaingaora.govt.nz/contact-us/ or email Kāinga Ora at enquiries1@kaingaora.govt.nz to clear up your confusion and it will be explained to you.

                    • pat

                      It is obvious that you (nor anyone else here) can explain the discrepancy….and I suspect, nor can Labour (without looking dishonest)

                    • Louis

                      @Pat once again with the baseless assumptions. What is bizarre is your refusal to contact Kāinga Ora to clear it up for you, because it doesn't matter what facts people post, you will still ignore and deny it anyway. I checked the OIA request I made last year and it included your links where you thought there had been a discrepancy. I received a fulsome response in 12 days, that backed the government's numbers.

                  • mikesh

                    The figure of 7440 may be a net figure after disposing of some units.

                    • Louis

                      Refer to link @6.1

                      • Since October 2017, there has been a net increase of 12,017 public homes, with 9,917 of these being new builds (as at April 2023).
                      • This takes the overall total of public homes to 78,251.
                      • In addition, over 4,000 transitional homes have also been added in this time, bringing the number of places available in April 2023 to 5,910 transitional homes.
                      • The Government is on track to deliver over 18,000 new public and transitional housing places by 2024.
                      • There are currently over 4,500 public housing places under construction.
              • Molly

                Thanks, pat. Another bookmark.

        • Molly 6.2.1.2

          " If the net increase was 1 I would still celebrate it."

          Really?

          Given the resources expended, that would deserve criticism not celebration.

    • mikesh 6.3

      [the new builds reporting separated from the demolition of units reporting, making the actual delivery of usable units much less impressive.]

      The 12,000 figure will still be valid if the demolished units were in fact unusable.

      • Molly 6.3.1

        That's could be true but not necessarily true for all. Better detail allows for better analysis.

        eg. Why unusable?:
        – was maintenance not kept up appropriately,
        – was there weather damage,
        – was there tenant damage,
        – is demand in that area low or non-existent etc?

  7. arkie 7

    It is interesting that the image used for this post is about the human right to housing.

    Labour have made some progress, yes, but housing as a right has not been taken seriously by this government.

    The UN provided a 27 point plan, number one being recognising housing is a human right:

    A United Nations report suggests New Zealand follow in Canada’s footsteps by adopting a human rights approach to housing policy and makes 27 recommendations for Government to address the crisis.

    The housing crisis is a human rights crisis in New Zealand according to the United Nations (UN) Special Rapporteur on adequate housing in a new report officially tabled over night at the UN Human Rights Council in Geneva.

    Housing speculation, a lack of affordable housing options, limited protection for tenants, substandard housing, the absence of an overarching Te Tiriti and human rights based housing strategy, and a lack of adequate social housing or state subsidised housing are the main causes of the crisis according to the report.

    https://www.scoop.co.nz/stories/AK2107/S00018/un-declares-new-zealands-housing-crisis-a-breach-of-human-rights.htm

    The Human Rights Commissioner earlier this year:

    “For the first time in decades we’ve seen a very significant increase by the Government to the baseline investment in the housing system, and there are welcome signs of progress,” Hunt said.

    “Some of the initiatives now under way around the country, such as the Bader Ventura apartments opened recently by Kāinga Ora which are designed to require minimal energy to heat or cool, do provide real hope. It is vital this is sustained and increased over time.

    “From a human rights perspective, the Government must use its maximum available resources to address the housing crisis and to ensure this fundamental right is being realised in Aotearoa New Zealand. That obligation remains no matter who is in government.

    “Our recommendations are aimed at further ensuring a system that supports housing as a human right,” Hunt said.

    He said it would require a shift in mindset and commitment across the spectrum.

    “It’s not enough to just build our way out of the housing crisis. We need to ensure that dignity, whakamana tangata, is at the heart of our housing system.

    “Of course there’s a failing in the housing system but theres' also a failing in the human rights system. Proper accountability arrangement have not been put in place for the binding promises. We need to place the right to a decent home and Te Tiriti at the centre of our thinking about housing.”

    https://www.stuff.co.nz/business/300921655/govt-must-recognise-housing-as-human-right-commissioner-says

    They have found, of the seven measures the HRC uses, only one has had any improvement:

    https://housing.hrc.co.nz/measuring-progress

    We need bolder action, underlined by a commitment to housing as a human right. This will only happen through increased pressure from the left, it certainly won’t happen under NACT+NZF.

    • Chris 7.1

      Well, all that can be said to that is this:

    • mickysavage 7.2

      Should Labour do better. Hell yeah.

      Should people vote Labour/Green or National/Act/NZ First if they want to improve housing then the response is very simple.

    • mikesh 7.3

      [Labour have made some progress, yes, but housing as a right has not been taken seriously by this government.]

      We don't know that, because since all new houses, both public and private sector builds, would have to be seen as contributing to meeting need for the human right to housing.

      • arkie 7.3.1

        We don't need UN special rapporteur Leilani Farha's report, tabled in February in Geneva, to know that housing in our country has long been treated as a speculative asset instead of a home – the core ingredient to upholding that human right. Along with renters' rights, freezes and regulation, Farha suggested courageous tax changes to transform our economy from "a housing market with a few bits tacked on", as defined in a 2011 tweet by former backbench Labour MP, Rt Hon Jacinda Ardern.

        Everyone agrees we've got to build more (although not, necessarily, where). What we seem most unwilling to civilly discuss is whether we're comfortable to continue treating housing in Aotearoa as a game of Monopoly.

        We have to acknowledge this crisis of adequate housing – this human rights crisis – didn't come from nowhere, but from a series of decisions by successive governments. We can't have our cake and eat it too; we cannot continue to treat housing as a commodity and a human right. As our track record and the consequences of it show, you can only choose one of those things.

        https://www.nzherald.co.nz/nz/chloe-swarbrick-un-enshrined-human-right-to-housing-eclipsed-by-investor-greed/DXNIFZJJ7NBRVBG7CY74O27JCM/ my italics

        The concerns and reports of the UN and HRC let us know that builds are not all that is necessary to treat housing as a human right. Labour's continued refusal to make any tax changes to disincentivise property speculation is more evidence of their lack of seriousness.

  8. Ad 8

    Also infuriating that National is just chucking away the joint signed agreement they made with Labour on housing development and density.

    Stupid shallow political tactics that leaves Auckland, Tauranga, Wellington and Christchurch in a major future mess.

  9. MickeyBoyle 9

    Now show us the social housing waiting list figures from 2017 to now…

    Labour have failed our most vulnerable when it comes to housing. To suggest otherwise, doesn't stand up to scrutiny.

  10. Corey 10

    Housing is like a horror movie under Labour.

    If National win, it will be like an disaster or apocalypse movie, choir and all.

    Labour is awful, National is horrific.

    Consents are not built houses. Repairs are not new builds.

    It is truly ghastly out there trying to find a home to live in whether you're renting or trying to buy.

    On top of existing pressure, We only build about 27 K homes a year in NZ and are letting in over a hundred K immigrants.

    National will build less houses, allow foreign ownership, double immigration rates, rollback tenancy rights and any legislation on landlords or investment properties.

    It will be an apocalypse.

    I genuinely think, as angry as kiwis are ATM, there's only so much more that kiwis can be expected to take before shit gets ugly.

    We're either going to see a furious collective public movement on the left or a far right populist Swedish democrat/ German AFD style party emerge in the next ten years, as has happened in nearly every European country with proportional representation.

    • Louis 10.1

      'Housing is like a horror movie under' National that left a housing crisis that they denied existed.

    • Louis 10.2

      Doesn't look like National intends to build any houses at all, like wanting China to build its rons, National wants to fund councils to do it, and we all know how that will turn out.

  11. Muttonbird 11

    Straight after bagging Joe Biden, Heather Stupidity-Allen interviewed her grandfather, father, husband about National reinstating foreigners' rights to buy Kiwi homes from under our feet.

    The old timer claimed it was Andrew Little who coined the phrase, "Chinese sounding surnames"…

    • Louis 11.1

      I thought it was John Key when he attacked Labour over using leaked real estate data.

      • Muttonbird 11.1.1

        Could be right. The direct source of the quote would be interesting because perhaps now it is attributed to no-one, as is the way of the media.

        BTW, I am a sometimes contributor to media and the number of times they have no idea who did what and simply do not care is depressing. Steven Joyce levels of don’t give a fuck.

        • Anne 11.1.1.1

          It was Phil Twyford. A barely disguised hint as to which foreign nationals were buying up the homes. The Nats accused him of racism. The Chinese were buying up the homes in droves. There was some sort of deal going down where Chinese citizens were getting State money to make the purchases.

          That was roughly what happened anyway.

      • mikesh 11.1.2

        I'm pretty sure it was Phil Twyford.

  12. Michael Nolan 12

    I'll still deliver flyers for them, and try help reelect our local MP, but this will be the first time in my adult life I won't be voting Labour.

    It was painful seeing JA squander the opportunity to take something substantial into the 2020 election, when polling leading up to it had Labour around 60% at one stage. But nothing has ever made me more ashamed than the GST policy.

    Robertson, Parker, and Russell knew it was a dog and had called it such openly. Chippy knows the best case scenario is maybe a dollar being passed through in savings. Fruit and veges have such price elasticity of supply there is no way anyone, including a grocery commissioner, could ever accurately judge if the savings were passed on. Seasonality, weather impacts, bad harvests. The only people who will gain from this is the supply chain.

    The galling part is they know this, and yet Chippy was clearly allowed to make his captains call. A call that knowingly misleads our most desperate into thinking they will benefit from this policy when they won't see any material difference. He's selling false hope to desperate people and costing us billions in doing it.

    Meanwhile, the people I know tat are struggling barely buy fruit and vege. They can't afford it. I can't support Chippy now. I don't want him as Labour leader or Prime Minister. This election sucks.

    • pat 12.1

      Indeed

    • newsense 12.2

      It’s interesting Mr Nolan, the pattern of your answer follows one given before.

      Apparently a Labour stalwart of 60s years, this lady said as you did, the GST policy was it for her. Which is strange given all the upheavals of the past 60 years.

      It’s an odd thing to be so committed to a cause as to campaign for it, but not to vote for it. And there are many many things to be ashamed of in Labour. It’s climate response. It’s shielding of army et al, even after the atrocities by our Australian counterparts. The insistence a wealth tax won’t work at this time. The continuation of oil drilling permits. The slow speed of action on modern slavery legislation.

      Your story could be a true one. But it does also follow a pattern on concern trolls trying to suppress the Labour vote.

      Particularly on this thread which is talking about how National are blatantly just inflating their own property values again. Which makes your point a derail.

    • mikesh 12.3

      [The only people who will gain from this is the supply chain.]

      You know this do you? Let's just wait and see, shall we. Of course we may need to take steps in the early stages after its introduction to ensure this doesn't happen, but once the market has adjusted to the change there shouldn't be any more profiteering, from this source, than goes on at present anyway.

      Of course the purists will put up any old argument, valid or not, that they can muster to ensure that this measure will never see the light of day. Another argument we see, for example, is that the wealthy will gain more than the poor from such a policy; but, so what? The wealthy will scarcely notice the difference, but not so the poor. And this is in addition to the argument that overseas countries are envious of or GST system, but when has that ever been a valid argument? Why should we bother with what other countries think?

      And, let's face it, The regressiveness of GST is well recognised anyway. I would tend to advocate scrapping GST altogether.

    • weka 12.4

      Meanwhile, the people I know tat are struggling barely buy fruit and vege. They can't afford it. I can't support Chippy now. I don't want him as Labour leader or Prime Minister. This election sucks.

      It does indeed. Maybe a strong Green and TPM vote and some luck that NZF doesn't make it into parliament, and then Labour replaces Hipkins after the election (given the Greens' position of keeping the cross benches as an option and Hipkins having ruled out a wealth tax despite the GP policy including an income tax cut for most people).

  13. newsense 13

    Today’s economist bullshitting us:

    Apparently the foreign buyers had no impact on the housing market, so time to throw it open and can-can! 22% of the central Auckland market is insignificant. Don’t worry about that voters.

    More experts on top of experts being rolled out in support of National party policy. More reasons to absolutely distrust them.

    https://www.stuff.co.nz/national/politics/132752842/national-party-under-pressure-to-reveal-foreign-buyer-policy

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