Today, One News reported:
Even a 4% reduction in the overall amount of house buyers would somewhat cool the market and have a subsequent effect on prices. Ironically Bill English has acknowledged this fact in a recent International Housing Affordability Survey (PDF), when he stated:
So, having lots of demand equals high prices. When there is less demand there are lower prices. This is a basic principle of economics that the right wing shouldn't be trying to argue against.
Despite this irrefutable reality, the Minister of Finance contradicted himself by saying:
Clearly it will make a difference; otherwise there wouldn't be such a concerted effort by the right wing to denigrate the policy.
New Zealanders of all ethnic backgrounds should be concerned with housing affordability, for reasons well articulated by a survey that has been endorsed by the Minister of Finance himself. The International Housing Affordability Survey states:
So, New Zealand and Australia have some of the least affordable housing in the world, but why exactly is this a problem you might ask?
Basically New Zealand doesn't have a well functioning metropolitan economy and this is degrading our standard of living. However, I digress...what really got my goat about the article from the National party propagandists over at One News is this paragraph:
Which is entirely incorrect. The actual BNZ survey (PDF) states:
Clearly the figure to use from this survey to show how many houses are being sold to offshore buyers is 9%, not 4 to 5.6%. There is no follow-up to see if those who apparently intended to shift to New Zealand actually did so. It's the status of the purchaser at point of sale that One News is meant to be reporting after all and therefore 9% of sales are to offshore buyers.
Remember, this is only a survey...a survey of Real Estate agents who have a vested interest in keeping the housing market as hot as possible. They will want to keep foreign speculators pushing up prices because it's good for their businesses. The same goes for the banks, the BNZ included. Therefore the actual number of house buyers who aren't Kiwis is likely to be far greater than 9%.
It should also be mentioned that many National MPs are also property speculators and therefore have a vested interest in keeping house prices high and consequently housing largely unaffordable for many Kiwi families.
In my opinion the BNZ estimate shouldn't be relied upon...although it should of course be quoted from properly. If manipulating data, trying to create a moral panic and hazing the statistics is all the right wing can come up with, they're sunk! The opposition will have effectively won the housing debate because the government has no answers.
Mr Shearer said this morning that while the policy was no "silver bullet", combined with a capital gains tax and the building of thousands more houses, it could solve New Zealand's housing issue.
"If you build more affordable houses, you clamp down on property speculation through a capital gains tax, and you bring in a policy like this restricting foreign ownership, you then have a range of policies that can make some difference in the housing market," Mr Shearer told TV ONE's Breakfast.
The Labour leader put foreign ownership figures at between 7% to 10%.
However, Barfoot & Thompson's managing director Peter Thompson put the number of foreign buyers at around 4%.
Even a 4% reduction in the overall amount of house buyers would somewhat cool the market and have a subsequent effect on prices. Ironically Bill English has acknowledged this fact in a recent International Housing Affordability Survey (PDF), when he stated:
Demand for real estate is also increasing, with the median house price in Auckland recently exceeding the highs of 2007.
So, having lots of demand equals high prices. When there is less demand there are lower prices. This is a basic principle of economics that the right wing shouldn't be trying to argue against.
Despite this irrefutable reality, the Minister of Finance contradicted himself by saying:
Finance Minister Bill English said he did not believe the policy would make a difference to the housing market.
Clearly it will make a difference; otherwise there wouldn't be such a concerted effort by the right wing to denigrate the policy.
New Zealanders of all ethnic backgrounds should be concerned with housing affordability, for reasons well articulated by a survey that has been endorsed by the Minister of Finance himself. The International Housing Affordability Survey states:
Australia and New Zealand have had the most unaffordable major markets, with every market being severely unaffordable in every year.
So, New Zealand and Australia have some of the least affordable housing in the world, but why exactly is this a problem you might ask?
As housing affordability has deteriorated, there has been a tendency on the part of housing industry and financial market analysts to "cheer on" abnormally high house price increases as if housing were a commodity, like gold. Housing is much different. It is a basic necessity and adequate, comfortable housing is necessary for a decent standard of living. The performance of the housing market is thus not genuinely measured based on price increases relative to other investments. The genuine measure of a housing market's performance is the extent to which it remains affordable in a well functioning metropolitan economy.
Basically New Zealand doesn't have a well functioning metropolitan economy and this is degrading our standard of living. However, I digress...what really got my goat about the article from the National party propagandists over at One News is this paragraph:
A survey by BNZ in March estimated around 5% of home sales were to offshore buyers, with most from Britain, Asia and Australia.
Which is entirely incorrect. The actual BNZ survey (PDF) states:
Nationwide only 9% of all sales are to people from offshore. When we allow for at least 40% of these buyers indicating to agents that they intend shifting to New Zealand, we are left with a result that only between 4% and 5.6% of all NZ dwelling sales are to people not intending to live here.
Clearly the figure to use from this survey to show how many houses are being sold to offshore buyers is 9%, not 4 to 5.6%. There is no follow-up to see if those who apparently intended to shift to New Zealand actually did so. It's the status of the purchaser at point of sale that One News is meant to be reporting after all and therefore 9% of sales are to offshore buyers.Remember, this is only a survey...a survey of Real Estate agents who have a vested interest in keeping the housing market as hot as possible. They will want to keep foreign speculators pushing up prices because it's good for their businesses. The same goes for the banks, the BNZ included. Therefore the actual number of house buyers who aren't Kiwis is likely to be far greater than 9%.
It should also be mentioned that many National MPs are also property speculators and therefore have a vested interest in keeping house prices high and consequently housing largely unaffordable for many Kiwi families.
In my opinion the BNZ estimate shouldn't be relied upon...although it should of course be quoted from properly. If manipulating data, trying to create a moral panic and hazing the statistics is all the right wing can come up with, they're sunk! The opposition will have effectively won the housing debate because the government has no answers.
