The housing affordability situation in New Zealand has gone from bad to worse, with new data released by the RBNZ showing that the value of New Zealand’s housing stock hit $1.28 trillion in the September 2020 quarter, up 10.7% year on year.
When compared against the size of the economy – currently $321 billion – this meant that New Zealand’s housing was valued at a record high 4.0 times GDP in September 2020 – up from 3.7 times GDP a year earlier:
This dwarfs Australia’s housing valuation, which was only 3.5 times its GDP in the September quarter.
It’s also well above Australia’s highest ever valuation of just under 3.7 times GDP in 2017.
As we know, New Zealand Prime Minister Jacinda Ardern was elected in 2017 on a platform of fixing New Zealand’s chronic housing crisis.
However, Ardern’s Labour Party failed dismally on housing in its first term, failing to deliver on key election promises.
The upshot is that more than three years after sweeping into government on a housing affordability platform, New Zealand’s housing crisis is arguably worse than ever. And Jacinda Ardern is learning the hard way that talking about “affordable housing” in opposition is easy, but delivering in government is an entirely different matter.
This is because “affordable housing” necessarily requires prices to fall, which no political leader ever wants.
Instead we get fake “affordability” measures like first home buyer grants, which only succeed in artificially inflating demand and prices.
Indeed, Ardern told The AM Show in November that the Government would continue “looking for ways to encourage and support first home buyers”, which is code for more demand-side subsidies.
Then in December, Ardern confirmed that “sustained” moderate rises in house prices is her government’s goal:
Prime Minister Jacinda Ardern says she would like to see small increases in houses prices, acknowledging most people “expect” the value of their most valuable asset to keep rising…
Asked by interest.co.nz (see video below) whether “sustained moderation” of house prices was still the government’s goal, Ardern said: “Yes…
Asked to explain why a fall in prices would be bad, Ardern said: “What we’ve simply expressed here is that the growth that we’ve seen is unsustainable. So, if anything, it is much more sustainable to have those much smaller increases. I think people expect that you see that in the market”.
“What we also accept is that for most New Zealanders, their house is their most significant asset…
“This gets to the heart of the issue of why so many New Zealanders turn to the housing market.”
So, Ardern will deliver more hot air and hopium on the housing policy front.
The more things change, the more they stay the same…
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
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This may seem like a cheap shot. But optics is
Hopium. I like that word.
This was written about last weekend – how much of this is Ardern, and how much a tacit admission that the collective willpower for this is close to zero?
https://www.theguardian.com/world/commentisfree/2021/jan/11/new-zealands-public-secret-house-prices-wont-come-down-until-we-really-want-them-to
Meh – both economies are gone – they were surviving on migration now its weimar levels of money printing – if anyone is still thinking this is a reflection of economic forces and not an entirely broken economy desperately trying to paper over reality i have a wheel barrow full of cash for a loaf of bread, or %11 house prices increases when an economy is entirely shut down – beyond ridiculous behaviour. Consequences with FX repricing will bankrupt New Zealand and Australia.
Digital Yuan will end this lunacy with the collapse of the USD in the next few months – already most of the way there.
Only a few months, not 18?
And lol. A digital yuan will be far more manipulated than the USD.
Yes block chains are known for being easily manipulated. Well done on understanding the basics.
They are when they are centralized. And is the digital yuan acttually a blockchain? Could be just a database.
Whoever writes the code, and controls it’s acceptance can do whatever they want with a blockchain.
For something like BTC that would be consensus of a whole lot of parties around the world, and that has split and changed.
A digital yuan would be purely controlled by chinese government who would require no one elses permission to change whatever they wanted.
Well done on understanding the basics but missing second order effects and the actual point entirely. If they aren’t going to manipulate it then there are already perfectly usable alternatives already accepted.
Any digital currency offered by Governments will be designed for surveillance and control. Complete records of all transactions will be listed on the (Private Government) blockchain, forever. Values will be destroyed and created at will.
A digital Yuan will be more like a ‘credit chip’ from a Science Fiction movie. It will be enforced on the population: paying taxes, buying goods and services, paying rent will all only be allowed via this digital currency. It will be impossible to exist outside this ecosystem.
On the plus side it might eliminate corruption and money laundering, and Governments could be funded with a 1% Tobin tax (if they don’t just create money directly)
Or, you know – its just block chain. A well understood, well accepted distributed system. Ironically the idea of the digitual yuan means people can trade goods and pay for services directly without the need for a bank account and therefore eliminating much of what you are insinuating.
Ha, it’s centralized. Blockchain is a buzzword. Only decentralization offers protection. The CCP can do whatever they want with their digital yuan, including spying and all sorts of evil CCP sh1t.
The biggest irony of all is that digital yuan, dollars, yen ,rubles ,baht and everything else have existed for literally my entire life. Changing from a centrally administered DB to a centrally administered blockchain just makes the whole thing far less efficient in terms of computing resources. But go blockchain.
Seen this?
https://i.stuff.co.nz/business/opinion-analysis/300205858/the-brutal-catch22-politics-of-trying-to-move-to-affordable-housing
Anecdote:
We hosted a small dinner party (8) two weekends ago. Surprisingly, ALL of us; traditional Labour voters (3) and previous National Party voters (5) (converts to the optimism Ardern exuded) were part of the reason Labour got in with a majority mandate for the first time in our MMP history.
None of us are going to give her a third shot at sorting this mess out – she just won’t.
Where will our next votes go? 2 to the Greens and 4 to ACT (the libertarian alternative to National). 2 won’t vote. (it’s optional here)
So – David Seymour? Don’t stalk this coming opportunity up!
(PS: Fortunately, even though we broke the ‘don’t talk about politics or religion at dinner” we didn’t get onto God!)
Choosing to not vote doesn’t help anything.
No argument there. But it’s a democratic option they have. They don’t get fined if they don’t vote by compulsion (for whatever reason).
Never heard of anyone in australia getting fined either.
+ you always have the option to vote for hitler if so inclined. It’s a secret ballot after all.
I have Labour’s next election policy slogan. “A vote for Labour, is a vote for National”. I’m rather chuffed at Jacinda’s failure to deliver anything, in fact, the outcomes of her policies seem to be the complete opposite of what was intended (funny that the real world works in ways not anticipated when sitting around a table discussing academic social policy theories lol). Affordable housing? Fastest house price growth ever! Tenant friendly rentals? Quadrupled the public housing waitlist as private landlords flee the market and sell up, and the remaining ones start jacking up rents at the fastest pace ever. Less children living in poverty? More children born into poverty as Labour removed free contraception for beneficiaries and instead paid them even more welfare money to have more babies.
Labor’s policies were always ending here. The BS they talk, is exactly that, BS.
Labor are a disaster both here and NZ.
Before massive immigration, and selling everything to foreigners it worked, but now Labor’s just in the way of getting an opposition to the elites parties.
Labor have to be destroyed, along with immigration and foreign buying to save our countries.
“I’m rather chuffed at Jacinda’s failure to deliver anything”
Im not across the NZ situation but if it is anything like Australia then governments simply can’t deliver anything except puff policy on gender equality and gay marriage and other things like that, which are all well and good, but which have no direct impact on the day to day experience of the ordinary person.
Governments everywhere decided long ago that there were simply more impprtant things to worry about than actually having skin in the games that directly affect the day to day experiences of their constituents. All of that has long been outsourced and sold off. I suppose it allows plausible deniability by the government when things go wrong, but it also means we are all at the whim of the private sector, which only exists to extract profit.
But she’s good in a supposed crisis. And she gives a good hug.
Thank goodness for mass-shooters and covid.
And when house prices are $2Million and bread costs $50 in the morning but $100 that evening politicians invoke their god given right to leave for Monaco and their millions.
Politicians don’t have to leave. They’re nearly all elites themselves.
https://vergewiki.com/tanya-plibersek
I get your point but that’s a sh!t site. Algo compilation? Or perhaps compiled by innumerate dyslexics on acid.
Algos.
Just plug something like ‘tanya plibersek net worth’ into Google like he did and you get probably a dozen different (probably: “different”) sites like that to pick from.
Who knows?
I’ve read many times $9m smith. You just wouldn’t expect a life long public servant, born to poor migrants, a social warrior to be worth that.
It’s just bizarre.
I hope they put her as leader. She’ll destroy the remnants of the horrid Labor party within 6 months.
NZ property looks expensive vs Australia if you live in NZ on an NZD income. But if you’re a Chinese buyer paying with a suitcase of cash, NZ property looks cheap compared to Australia.
Property in Zimbabwe was several trillion dollars per square meter at one point.
Virtue signaling is more important than living standards.
Absolute truth. Question is whether the people will wake up and realise the Emperor has no clothes, or if they will be brow beaten into believing that they just havent tried hard enough or long enough, and therefore they need to double down on the policies that are not working in order to make them work.
Affordability crunch: Will house prices hit a limit? … Miriam Bell … Stuff NZ
https://www.stuff.co.nz/life-style/homed/real-estate/123882486/affordability-crunch-will-house-prices-hit-a-limit
The next six months are make or break for Labour … Pattrick Smellie … Businessdesk / The Spinoff
https://www.thespinoff.co.nz/politics/12-01-2021/the-next-six-months-are-make-or-break-for-labour/
The 2021 17th Edition Demographia International Housing Affordability Survey http://www.demographia.com/ released Monday 25th January 2021. Note these surveys do NOT include apartments in Australia … just houses.
The trick is to make house prices fall while convincing everyone that your policies will be effective in keeping them flat or rising slowly. Then you can say “nobody could have foreseen…”
You seem to have it backwards, the trick is to convince everyone that you want house prices to fall/be affordable while implementing policies that goose prices to the moon.
“Nobody could have foreseen…” will not save the party presiding over a serious housing crash from electoral oblivion next election.
Trick is to ram through policies that will crash housing market and economy just before handing the baton to your political adversaries (and after you’ve sold your IPs)
Moar hugs! Moar diversity! That will fix it.
She needs more terrorist attacks and earthquakes. Her bread and butter.
New Zealand …
… Building supply shortages nationally … with Selwyn Council area (adjoining Christchurch) busier now than post the earthquakes ! …
COVID-19: Building industry facing supply shortage due to shipping delays … VIDEO … Holly Henry … Newshub NZ
https://www.newshub.co.nz/home/new-zealand/2021/01/covid-19-building-industry-facing-supply-shortage-due-to-shipping-delays.html
… extract …
… Selwyn, the fastest-growing region in the country, has seen record numbers of building consents.
In 2020 The Selwyn District Council saw record numbers of building consents – a 26 percent increase on the previous year – higher than their peak in the post-earthquake rebuild.
Currently, there is such a backlog of work, the Council is urgently seeking staff to meet demand.
Meanwhile, tradies are doing their best to source the finishing touches. … VIEW & READ MORE via hyperlink above …
.
.
… Check Selwyn Councils monthly consents numbers and (standard industry measure) ‘consents / approval rate per 1000 population per annum’ … WOW ! …
Building Consents Issues – November 2020 – Statistics NZ
https://www.stats.govt.nz/information-releases/building-consents-issued-november-2020
Australia detached housing construction … massive lift …
… Why is the dilatory New Zealand Ardern Labour government failing to allow Kiwis and the construction sector to compete with Aussies ? …
… Why allow the flight of housing deprived and aspirational Kiwis to Australia to resume ? …
November 2020 – Building Approvals … Australian Bureau of Statistics
https://www.abs.gov.au/statistics/industry/building-and-construction/building-approvals-australia/latest-release
Selwyn is booming because every man and his dog are buying investment properties in Christchurch in the belief that property prices are going to soar like in Wellington and Auckland. Which they won’t because there is basically an endless supply of new housing.
Why do you expect anything different from someone whos only private sector experience was working at a Fish n Chip shop in high school?
Hell at leaat Pauline Hanson actually ran her Fish n Chip shop.