Dr Eric Crampton: A bright spot in Parliament’s quest to drive housing affordability

Most news clips from Parliament are from Question Time. It is at least as much performance theatre as a mechanism for holding government to account. Late-night committee stages attract far fewer viewers and enable more important work.

Last Tuesday and Wednesday, Housing Minister Hon Chris Bishop and former Housing Minister Hon Phil Twyford tried to work out how to make one of the planning system’s most important housing reforms survive long after either of them has left Parliament.

Dr Oliver Hartwich: Housing affordability and productivity must be tackled to keep NZ moving forward

In 1973, 843 people died on New Zealand roads. Last year, with far more people driving far more cars, the provisional toll was 272.

Nobody held a press conference, and why would they? The improvement stretched over so many decades that hardly anyone noticed it, and nobody could claim it as their own.

Dr Benno Blaschke: What Bill English and Phil Twyford agree on

Last week, Sir Bill English told RNZ that New Zealand has reached “amazing, almost bipartisan” agreement on housing. Coincidentally, we recorded Part 2 of our Competitive Urban Land Markets podcast around the same time with former Housing Minister Phil Twyford.

The underpinning consensus is specific: competitive land markets are the durable path to housing affordability because they maintain threat of entry, enabling land to be brought to market easily and abundantly. This creates downward pressure on urban land prices.

Hearing both Sir Bill English and Hon Phil Twyford in the same week brought into focus how unusual this moment is.

Dr Eric Crampton: The long road to housing affordability

It wasn’t that long ago that New Zealand’s housing market made international news because of its insanity. In 2016, The Guardian tagged Auckland as the “hottest property market in the world” – and part of a housing crisis.

Housing is still deeply unaffordable. But New Zealand’s housing markets have been making international headlines for a much better reason.

Brian Easton: 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 announced strategy is going to quickly resolve New Zealand’s housing problems.

Dr Don Brash: Another outstanding speech from Chris Bishop

Four months ago, I described a speech by Chris Bishop in his capacity as Minister of Housing as perhaps the most important speech given by any Government minister since the election last year.

He’s just given another, arguably even more important, laying out in words of one syllable what the Government plans to do to fix New Zealand’s broken housing market.

Alison Pavlovich: Yes, landlords gain from the repeal of interest deductibility rules....

......but it was a flawed law from the outset

The new coalition government has announced a suite of tax reforms, including reintroducing the ability for property investors to deduct the interest costs on their mortgages against their rental income.

Early criticism of the proposed changes has focused on its retrospective nature (it will be backdated to April 1, 2023), potential windfalls to landlords (at the expense of tenants), and the fiscal cost of the measure.

Roger Partridge: Why the inequality and tax debate is all wrong

The early decades of the 21st century may be remembered as the great age of misinformation. From false assertions about the size of the 45th President’s inauguration crowd to science-free claims about nano-technology, 5G cell phone towers and COVID-19, fake news abounds.

We have our own mythical ‘facts’ in New Zealand. And none are so entrenched as claims about income inequality and tax.

Barend Vlaardingerbroek: Housing in NZ – forward to the past

Homeownership [sic] allows households to accumulate wealth and social status, and is the basis for a number of positive social, economic, family and civic outcomes….. Homeownership boosts the educational performance of children, induces higher participation in civic and volunteering activity, improves health care outcomes, lowers crime rates and lessens welfare dependency….. [P]ublic policy makers would be wise to consider the immense social benefits of homeownership for families, local communities and the nation. - National Association of Realtors, 2016

Hello everyone. This is your favourite Middle Eastern correspondent – well, ex-Middle Eastern correspondent, having left Lebanon last June and then spending almost 6 months in Turkey waiting for MIQ slots.

We stopped smoking several days before flying out not for any health-related reasons but because there is no way I am paying over a hundred bucks for a pouch of Port Royal. In Turkey I was rolling an excellent local blend for about NZD3 a pouch. Has it been hard stopping smoking after 55 and 47 years respectively? No, it’s been surprisingly easy – every time we get the craving we think of handing all that money over to this Government and that is a lot more unsettling than a few withdrawal symptoms.

What has been truly unsettling has been engaging with the housing market. One thing that got me badly off-side straight away is the practice of inviting bids over a certain amount rather than simply telling potential purchasers how much a place costs. I’m old-fashioned; you tell me how much it costs and I’ll decide whether to buy it or not; either that or conduct an auction – none of this surreptitious ‘blind auction’ crap. That simply further inflates what are already insanely high prices. So here we are in what I call our $350,000 birdcage – a 2-br home unit in rural Canterbury.

Don Brash: For how much longer will our kids stick around?

In a great many ways, New Zealand is an enormously attractive country to live in. We have a temperate climate, largely free of extremes of either heat or cold. We have magnificent mountains, and beautiful and uncrowded beaches. We produce enough food to feed ourselves many times over. In a water-short world, we have more fresh water, per person, than all but two countries in the world. We have abundant open spaces, with just five million people spread across an area larger than the United Kingdom. We have a robust democracy, with never the slightest suggestion that either the armed forces or a mob might try to overturn an election result.

But abstracting altogether from the immediate issues relating to the pandemic and the health and economic consequences of that, there are four major issues which threaten our future – five if we include climate change, but I don’t propose to discuss that given that nothing we do in New Zealand will have any measurable effect on the global climate. All of the other four issues are within our own ability to resolve if only we have the political will to do so.

Mike Hosking: The fact don't lie - Government has got it wrong on housing

 

The evidence is mounting, if not now irrefutable, that what the government and the Reserve Bank have done in concert with each other is not having the desired effect they wanted housing.

Both TradeMe and QV figures yesterday give no suggestion that the housing market is taking any direction at all.

At best, the QV number shows a slight, and I mean slight, decrease in the increases we have seen – 0.1 of 1 percent, to be precise.

That could easily be winter, or if it was government policy, hardly worth the drama around it.

NZCPR Weekly: Labour's Housing Bombshell

Dear NZCPR Reader,   

In this week’s NZCPR newsletter, we investigate the Government’s latest housing package and reveal that both Treasury and the IRD opposed the punitive changes imposed on rental housing providers, our NZCPR Guest Commentator Ashley Church shares his concerns that rather than fixing the housing market the Government is ‘punishing’ property investors, and our poll asks whether you think Labour’s recent housing package will solve the housing affordability crisis.

*To read the newsletter click HERE.
*To register for the NZCPR Weekly mailing list, click HERE.  

Mike Hosking: Govt can't, and won't, do anything about the housing market

 

You might have noted over the holiday period one of the flags we raised before Christmas was not to get sucked in by the government who were, once again, playing us for fools when the heat in the housing market spilled over to the political world.

The politicians got embarrassed over the fact they'd banged on endlessly about affordable housing while in opposition, but in government and had done nothing about it apart from watch the prices go up, and up, and up.

So as a pre-Christmas distraction Grant Robertson wrote to the Reserve Bank Governor and made some noise about prices, in the vein hope that we'd all think that actually meant something.

NZCPR Weekly: Supreme Power for New Housing Authority

Dear NZCPR Reader,   

This week we review the KiwiBuild debacle and outline how, instead of fixing the problems in the housing sector, the Government is creating a super agency with draconian new powers to not only sidestep council plans and the RMA, but to compulsorily acquire private land and impose new taxes; our NZCPR Guest Commentator Fiona Mackenzie shares her concerns about the role the tribal elite will play in the new agency; and our poll asks whether you believe this new Government agency should be given the power to compulsorily acquire private land for its developments.

*To read the newsletter click HERE.
*To register for the NZCPR Weekly mailing list, click HERE.  

NZPR Weekly: Housing Affordability – Lottery or Reform

Dear NZCPR Reader,   

This week we examine KiwiBuild and outline why it will not solve New Zealand’s housing affordability ‘crisis’, our NZCPR Guest Commentator Frank Newman explains why Labour’s housing changes are making the situation worse, and our poll asks whether you think KiwiBuild is a good policy.

*To read the newsletter click HERE.
*To register for the NZCPR Weekly mailing list, click HERE.  

Frank Newman: Modular homes and mod' cons

One would think prefabricated home-building companies would be inundated with orders and have a bulging bottom line. That's why the collapse of Matrix Homes, one of New Zealand's largest modular home builders, has raised eyebrows.

The company's factory in Lower Hutt was opened in February 2015 by the then Finance Minister Bill English.  At the time Matrix said it would be different from other companies because, "we're turning fully finished houses with code compliance certificates".

Frank Newman: The rising cost of construction

Last week a China Airways flight touched down in Auckland with two hundred construction workers on board. They were brought over by a Chinese based construction company building a luxury hotel in Auckland.  They are the first of many overseas workers required to fill  a labour shortage gap in the construction sector. 

According to Immigration Minister Iain Lees-Galloway that gap may be 30,000 workers: plumbers, electricians, engineers, builders and project managers.

Meanwhile, tens of thousands of fit and able New Zealanders receive the unemployment benefit. It makes no sense that there is a skills shortage in the construction sector at all, but even less sense that such a large potential labour pool is paid to do nothing  - although to be fair, to say they do nothing is not correct.

Wendell Cox: Housing Affordability - Time To Do What Works

The front page of The Wall Street Journal cited the difficulty of cities (Note 1) trying to stop the escalation of house prices “Western Cities Try, and Fail, To Slow Chinese Home Buying.” The more descriptive online headline said: Western Cities Want to Slow Flood of Chinese Home Buying. Nothing Works: Governments from Vancouver to Sydney to Toronto are using taxes and other restrictions to tackle real-estate bubbles. 

The article also covered Auckland and Melbourne and their attempts to discourage Chinese buyers, who have been getting much of the blame for the severe housing affordability.

Richard Epstein: California’s Needless Housing Crisis

Everyone agrees the most attractive areas in California suffer from a housing crisis that calls for drastic action. The difficult question is deciding what should be done. Many of the challenges are embodied in the small California town of Mountain View, population 80,000, which should be basking in sunshine as the home of Google. But instead the town is mired in discord and controversy over a set of well-entrenched anti-growth policies concerning housing. 

The tight supply of housing has raised the price of the median home to about $1.4 million. Rents, too, have skyrocketed, resulting in the displacement of many long-term tenants—teachers, nurses, and tech employees—who have to endure long daily commutes to work or find jobs elsewhere. Mountain View is now the proud home to numerous mobile home parks, occupied by individuals who crave access to the city—and who reportedly drive Teslas and Mercedeses, no less—but who lack the means to purchase or rent ordinary housing.

Frank Newman: Affordable housing

The latest issue of ANZ Property Focus included a feature on the 2013 census. This comment about housing was particularly interesting.

"Rising prices for residential land have made the quarter acre dream unattainable for many NZ households. The proportion of standalone houses has fallen from just over 80% of the private dwelling stock in 1991 to just over 75% by 2013. Despite this, the average consent for a new residential dwelling averaged 198 square metres in the March 2013 quarter, as compared to just 174 square metres in early 2001 and 138 in the early 1990s.