Tuesday, January 22, 2008

Dear Leader to blame for Dear houses

Here's one economic league table Liarbour has taken New Zealand to the top of- housing UNaffordability.
What a marvellous achievement for Dear Leader and her so-called workers party.
Housing is effectively unaffordable for the bulk of the 'working class'.
Property is now the preserve of the middle class and the rich.
Thanks Liarbour!
But need it be this way?
Certainly not.
Unlike the crowded countries of Europe, like the UK, there is no excuse for New Zealand's housing unaffordability.
We are two large islands with relatively few people.
We have the land and we have the raw materials.
True, rising house prices is largely a global phonemenon, though there are some interesting observations we can make from both the local and global situation.
Globally, many countries have adopted restrictive planning policies to protect the 'green belt' or open countryside. And we in New Zealand have much open space. We have room to breathe.
However, Auckland Regional Council and others strictly control the supply of land for development, so it is obvious the price of land will rise.
And if the price of land goes up, then as an ingredient in the recipe to build a house, it follows the price of the finished house will go up too.
If the planning authority expects the developer to contribute towards the cost of roading or green spaces, then that too is a further cost that will be passed on to the home purchaser.
If new build homes then go up to reflect this, it is inevitable that older homes will increase to match newer home prices.
Much 'smart growth' ideology stems from socialist thinking to force people into high density housing to make public transport more viable. So the socialists not only want to take away your front and back lawn but your car too!
Dear Leader and her government have presided over this situation. They control the Resource Management Act and related issues.
In recent years as the housing affordability issue has worsened and become more widely discussed, Liarbour has consistently ignored the land supply issue.
Instead, it has suggested that developers be forced to set aside a share of homes for low paid groups. This 'affordable homes' policy is what Liarbour in Britain has 'achieved.' But if you force developers to provide 'affordable' housing to certain groups, they can only recoup their lost profits on the shrinking share of open market houses. Thus, to subsidise the cost of 'affordable housing' house prices rise ever further for everyone else, and the spiral continues.
Now, land supply restrictions have made property a one-way bet. This has naturally fuelled property speculation. You can hardly blame people as they see property values ever rising. Liarbour's increase in the top rate of tax when it was elected made propoerty a more viable investment and tax shelter. The favourable allowances regime for landlords remain. So you can see why there has been such a growth in the buy-to-let market at the expense of the poor.
Think about it, here we have a Liarbour government allowing property investors/ speculators to make huge gains at the expense of the young and the poor. Property wealth is being transferred from these groups to the rich and the old. It is widening econiomic divisions. It is the anti -thesis of socialism yet Liarbour policies are fuelling this widening wealth gap.
Of course, the banks have made lending easier too and that has also fuelled growing prices , just as we see the global 'credit crunch' now working the other way, helping force prices down or curbing their rise.
Yet the supply side argument remains. The US has various planning rules across its states amid one banking market and , as Demographia notes, the cities with the most flexible planning regulations tend to have the lowest property prices.
You only look at how Auckland has been flooded with appartments, which as they became too numerous this led to their prices to fall, making them a poor investment. But this highlights how supply is a major factor.
Of course, there are other major factors too in Kiwi housing unaffordability and here Liarbour can take more blame.
Rapidly rising government spending has fuelled interest rates, making them the highest among the developed countries, which of course means higher mortgage rates. Another case of where Liarbour has us at the top of the table.
And as taxes ever rise to pay for this government spending, it means we have less money in our own back pockets to pay for these higher house prices and higher mortgage rates.
Thanks Liarbour your housing policies are just wonderful, hitting the poorest the most, your supposed constituency and voter base.
David Farrar at Kiwiblog has also covered the issue, as as Whale Oil, but for me, Peter Cresswell at Not PC offers the best and most thorough analysys, with his comments on the 'land of milk and honey.'.

9 comments:

Psycho Milt said...

Much 'smart growth' ideology stems from socialist thinking to force people into high density housing to make public transport more viable. So the socialists not only want to take away your front and back lawn but your car too!

I guess those dirty stinking socialists built every city in the developed world then, seeing as they all have cores of high density housing providing sufficient population density for a public transport system. Everywhere except New Zealand in fact, where we seem determined to build the world's largest-ever provincial town.

Adolf Fiinkensein said...

Fairfacts, much as it irks me to disagree with you, I doubt very much that the evil socialist gummint actually 'controls' the resource management act. Witness the debacle of a certain marina when it was shown clearly that in fact it is the courts which have final control.

Anonymous said...

Like many Im caught between 2 stools on this On the one hand having a trust that owns rental property and on the other with 2 young adults Im seriously thinking of putting the kids into the renters and paying a market rent instead of them raising a mortgages as they also also beneficaries in the the trust I suspect there will be others in the same boat.
gd

dad4justice said...

How many houses does Miss Klark and Mr Davis own between them ?

Psycho Milt said...

Dad4Justice - don't be commenting here til you sort this out. Last part of my last comment.

dad4justice said...

Get stuffed psycho mitty - I'd never apologize to such a scoundrel as yourself you pus laden creep !!!! Get your mate sonic, stan, Danyl, or roger gnome to kiss your dick you insane crackpot weirdo freak !!

The nerve of such a jellyfish swanker as yourself defies belief !!

ruth said...

ITA Adolf.

Why do politicians et al assume that house ownership is such an over-riding goal that it should be pursued at any cost anyway?

If renting is cheaper, then you're not wasting money for XX years, you're saving money for XX years.

Also check out Hargreaves work on affodablility at Massey Uni. The 'affordability' stats are very subjective to say the least.

The issue is just a political football with not a lot of grounding in reality I'm afraid.

Psycho Milt said...

Apologies for bracketing your comment with my housekeeping, Ruth.

Dad4Justice: in other words, you were talking shit - as usual. Seems like there's only one liar here, and it's not me.

FAIRFACTS MEDIA said...

Hi PM

Regular commentary on this issue, especially if found via Not PC will report an urge by planners to encourage public transport.
This is why planners talk of high density housing around transport 'nodes' and the like.
Maybe I was going a little too far saying the socialists want to take your lawns and your cars away but the support they give to planners and the ideologies behind this are heading that way.
Now, Adolf may point out to individual cases where judges rather than ministers have made final determinations over individual planning events, but the ideology behind the RMA lends itself to socialism.
Liarbour has had ample opportunity to reform the act but hasn't.
I accept the RMA was introduced by a National government. BBut it is controlling the supply of land in a socialistic way.
Anyway, as the Herald editorial noted, there are many reasons behind housing unaffordability.
The debate is how much we ascribe to each factor. I have emphasised supply side issues like land, while Adolf has emphasised the demand side issue of tax.
And it is both demand and supply side issues causing our problem, that Dear Leader has presided over or worsened.