Unable to remove his hand from the suite of policy levers he’d like to pull, the BNZ’s alleged economist Tony Alexander has had another brainstorm since the weekend, when he issued his 8-point programme of government meddling to fix house prices that appeared on the Herald’s front page this morning. His brainstorm involves three new levers he’d like to begin polishing.
Tony’s original plan consisted of eight points ranging mostly from the fanciful to the farcical, including the creation of a Super-SOE “whose sole purpose is to undercut existing building materials suppliers,” “a new large state house building programme” using some sort of “efficient building systems” that presumably only a large state house building programme will be able to dream up, and “a tax on all houses owned by Kiwis offshore with the aim of encouraging them to sell them.”
But the Herald front page today sees Tony adding three more levers for the government to pull, which are:
- a ban on buying a second house, and
- a ban on foreigners buying any houses, and
- a ban on owning a house at all if you’re not occupying it.
Let’s just look at the “reasoning” behind just one of this bastard’s bans—the one that made the front page…
The ban on foreigners is intended to gazump that hordes of foreigners who are buying up the country like locusts, especially all those “Australians [who] are contributing to New Zealand's skyrocketing house prices” by having the temerity to lay down dirty Aussie dollars to buy our noble New Zealand houses on the open market. The bastards.
How many hordes of Australians are hoarding our houses? The best research on this (and, mind you, it’s the only research on this, and it’s Tony’s, so take it with the pinch of salt you think it deserves) is that some 135 houses a month are being sold across New Zealand to Australians. 135!
That’s a “skyrocketing” 135 out of 7714 house sales a month in total, mind you [most of them reportedly in lower-cost NZ towns like Taumaranui, Invercargill and Wairakei *]. On the basis of which proportion this numbnut alleged economist respected head of the research team of a major NZ bank has sent out calls for this ban on house sales to Aussies and to every other nasty foreigner.
This man is allegedly an economist. If it weren’t the middle of a wet winter, I’d be tempted to say he’s spent too long out in the sun.
Time to take your hand off those policy levers, Tony, and walk away from the loony bin in which you’ve obviously been doing your “thinking.”
7 comments:
I'll be laughing into the martini tonight.
I have and have had a number of Australian clients who have purchased a number of homes in New Zealand. the thing that Mr Alexander doesn't understand is that they are not paying overinflated prices for homes in Auckland.
They are buying homes in places like Taumaranui, Invercargill and Wairakei that are 'cheap' and consequently have a good return on investment. Places that most kiwis wouldn't look at twice unless they had to live there.
There is no way they'd be silly enough to buy the overinflated homes in Auckland that don't have anywhere near the return on investment.
So Mr Alexander, if you're keen on devaluing provincial property markets by all means stop those Aussies in their tracks...
Sounds a lot like the Bolsheviks in 1917, I think.
This whole demand created by foreign absentee landlords never made much sense to me... Unless they're deliberately keeping the houses empty, the actual demand for a house to live in doesn't change, until somebody actually moves here.
@James: I live in Howick. There are hundreds of houses here that have been bought by wealthy Chinese for their kids to live in while they 'study' (the parents stay in China).
This kind of scenario, not exclusive to Howick, explains why rents are high as well as house prices.
@Ben, Yep according to Tony's figures, the Yellow Peril are buying New houses in the order of 20% of 8% of all houses purchased, the total figure for which is around 7,714 houses per month.
So very month according to Tony's "research," the Yellow Peril is buying around 120 New Zealand houses out of every 7,714 sold.
Frightening!
That's nearly 30 houses every week!!
Of which the scenario you describe might be ... [insert guestimate number here].
So, no, I doubt that this scenario explains why rents are high as compared to house prices, especially since "yields on rental properties are declining as rents fail to keep up with property prices."
Anyone who believes the official statistics hasn't been to many real estate auctions lately.
At least half of the ones I've been to in the past year have been won by Asians. Often they have ended with two bidding against each other. There is something very wrong with data that suggests only small numbers of Asian buyers. You know what they say about lies and statistics.
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