Tony Alexander’s eight housing fixes

June 16th, 2013 at 12:00 pm by David Farrar

BNZ Chief Economist Tony Alexander has eight proposals for helping with problems. They are:

  1. Initiate a large builder training programme targeting not just youth but low skilled migrants. Yes, the migrant gates would need to be opened. Just the signalling of strong intention to boost builder numbers would make investors think twice about their capital gain assumptions. 
  2. Ban councils from imposing any development fees and allow developers to install their own infrastructure. 
  3. Create an SOE whose sole purpose is to undercut existing building materials suppliers through bulk purchases from offshore, nodal warehousing and distribution from just three or four locations in the country, with a separate agency responsible for monitoring the quality of materials sourced. 
  4. Initiate a new large state house building programme relying largely on the to be created new carpenters etc. Constrain new state houses to more efficient building systems including containerised modular housing (this doesn’t involve shipping containers), central and screwed in foundations, etc. 
  5. Ban house sales to non-residents (even new houses given the ease with which special developments could arise targeting solely folk offshore and soaking up construction sector resources). 
  6. Impose a tax on all houses owned by Kiwis offshore with the aim of encouraging them to sell them. 
  7. Put in place a capital gains tax on second properties and farmland and immediately payable stamp duty for all second house purchases. 
  8. Rezone all land within 10-20 kilometres of existing city boundaries as residential

Nice to have some radical thinking in this area. Tony predicts the chances of hos policies being implemented:

Low, zero, zero, mild, mild, zero, low, zero. 

Which ones do you agree with?

I like 1, 2, 6 and 8. I support a CGT but on all properties, not just some.

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85 Responses to “Tony Alexander’s eight housing fixes”

  1. kowtow (6,690 comments) says:

    Radical?

    Yep,in the socialist sense of radical. And this guy works for a bank? Oh that’s right ,today banks are also totally reliant on the state and taxpayer back up.

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  2. dime (8,746 comments) says:

    Wtf?

    He lost me when I started reading number 3.

    Create an soe to fuck over existing businesses.. I didn’t realize the barrier to entry was so tough…

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  3. Psycho Milt (1,974 comments) says:

    Ban councils from imposing any development fees and allow developers to install their own infrastructure.

    One thing we ought to have learned from the leaky-house shitpile that the last National govt left us is that when things start crapping out a few years after they’ve been installed and the companies who ran the scam no longer exist, councils and the government get to deal with a hefty share of the shit in the pile. Why either of them would want a bar of this isn’t obvious (well, except in National’s case, since to some extent it exists for the benefit of property developers).

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  4. Reid (15,513 comments) says:

    No thought given to the tens of thousands of overseas immigrants with money (and a residence permit) coming into Auckland each and every year and what that does to the housing market in that city?

    Tony’s not much of an economist, is he.

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  5. Viking2 (10,703 comments) says:

    Actually. I read most of these guys stuff and Alexander would rate the pits. He’s a Bernard Hickey type. another less than capable economist/journo.

    Two good ones are Bagrie from ANZ and Roger Dickens.

    http://www.sra.co.nz/

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  6. All_on_Red (941 comments) says:

    All of them are bullshit.
    Heres my list.
    Free up land by removing false and restrictive Urban planning limits. You think someone will buy the houses you build out at whykickamoocow then go for it.
    Speed up RMA processes ,and improve Council processing times.
    Make the developers and hence customers pay for services. Don’t capitalise it like they do now and then try to collect the cost as rates over time and conversely reduce development fees to offset the cost of the owners having to pay for it. Encourage local facilities for treatment of sewage and collection and processing of water. Especially “gray” water, which can also be recycled for use in toilets etc
    Weed out the vexatious litigants who oppose everything just for the sake of it.
    Increase apprenticeships but amongst existing NZers. Stuff having more immigration. We should sort out our own unemployed.
    Introduce a Banking restriction that property owners cannot cross collateralise their own property to raise debt to purchase an investment property. (ala the USA) Otherwise if a Bank is stupid enough to do bad 95% lending then let them.
    Accept that the model that our community has only one city “centre” is outmoded and encourage satellite centres which will be serviced and supported by the new communities. Improve bus train and motorway links between those centres.
    Any more?

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  7. Pauleastbay (5,030 comments) says:

    Explains nicely why he works for a bank and is not one of NZ wealthiest men – FFS

    and DPf putting a CGT on all properties -

    I spend thousands developing my family home decide to move to another town want to sell but have to give the government tax on money I make forgetting all the materials and labour I paid out to develope my house , none of which I could claim one red cent of back in tax – that’ll make more people put their houses on the market won’t it ? FFS also – .

    All these wankers forget that a lot of capital gain made on homes is because of work done on the house – new kitchen, fencing painting sanding. When developement costs can be claim on my tax excellent until then fuck off.

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  8. Jack5 (4,216 comments) says:

    So the BNZ’s Tony Alexander has found a new topic since the kiwi dollar has begun to fall — housing.

    And a few weeks ago we had the BNZ’s chief executive Andrew Thorburn urging the government to overhaul the tax laws to control the property market and encourage other forms of investments. He also wanted Government intervention to make New Zealanders save more.

    I guess we should listen to these guys.

    Still, in its history, the BNZ has been bailed out three times by the Government. I hope the Aussie owners don’t ever try to sell it back to the New Zealand Government. We can’t afford it.

    Perhaps Tony should consider whether the quick fix he seeks for housing construction skills might come from a massive, wartime-scale carpenter retraining for surplus bankers, financial consultants, analysts, agents, and associated PR’s from the bloated financial sector.

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  9. Warren Murray (238 comments) says:

    Im drawn to 5 and 6, which are essentially the same. If non residents want to leave some capital here it has to be in other investments. Could be tricky to implement. What If a non resident wanted to invest in a large scale subdivision? And if non residents weren’t allowed to own land, well isn’t that NZF policy?

    I dont mind developers being given credits against their development levies for infrastructure that they provide, but option 2 in its purest form leads to rate payers subsidising developments.

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  10. All_on_Red (941 comments) says:

    Ps
    What is it with all these fuckers who want to charge and raise more Tax?
    What for? We pay enough now.

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  11. hj (5,674 comments) says:

    We all bang on about incentive analysis and welfare but what about doing incentive analysis on banks, developers, property investors and the formation of government polices?

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  12. gazzmaniac (2,266 comments) says:

    1. More builders will cause prices to drop, in a market where the barriers for entry for small builders is already pretty high (the main one being cashflow). Maybe the answer is to lower the barriers to entry for small builders. I’m assuming he means more carpenters rather than building/construction businesses.
    2. You won’t find many people who will disagree with removing development fees. It is retarded that it costs $30k plus in fees just to subdivide some land, even if the infrastructure is already there!
    3. Mega Mitre 10 and Bunnings (Coles) already do that. Wait until the arrival of Masters (Woolies) from Australia. There is no need for the government to risk taxpayer dollars to do it too. Having said that, there is no reason why the government couldn’t do their own wholesaling if 4. comes to pass.
    4. MORE state houses for deadshits? Seriously?
    5. Banning sales to foreign residents won’t solve the one of the big problems with the realestate market, which is that many baby boomers own 2-3 houses and youngsters on average wages can’t afford to buy one.
    6. Apart from the obvious “how are you going to police it” and “there will be loopholes to drive a bus through” and “let’s make another distortion in the tax system,” all you’ll do is ensure that people who own houses don’t come back.
    7. New Zealand should stay away from a capital gains tax. And stamp duty is a rort. Don’t go there. They only make accountants and lawyers rich.
    8. Instead of re-zoning to residential, why not allow the resource management act to work as designed instead of what it has become, and let people do what they want with their land?

    I quite like some of All_on_red’s ideas, particularly about sattelite centres. The only reason a business really needs a head office to be in the centre of Wellington for is to deal with the government, and the only reason why they need to be in the middle of Auckland is to make up for board members having small penises.

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  13. s.russell (1,486 comments) says:

    Remove the artificial restraints and the market will fix the problem.

    So my priorities would be No.s 2 and 8 (though I think a more nuanced approach to 8 would be better)

    If you do that, 1, 3 and 4 will be unnecessaary: private business wtc will step in and do it in response to demand.

    5 and 6 would create a short-term hit on demand and maybe help in the short term, but demand is not the problem – it can be unlimited so long as supply can meet it. In fact the more of both the better. So I don’t support those ones. * I also think they would be unfair.

    7. A capital gains tax on second properties is also a mistargetting. If you deter people from buying houses to rent out, then you just shift the problem from the price of buying to the price of renting and punish renters. Also, it would just lead to (even more) insane escalation in prices for owner-occupied housing which would respond by getting (even more) ridiculousy big and flash.

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  14. gazzmaniac (2,266 comments) says:

    Australia’s capital gains tax has caused a bigger boom than there would have been otherwise, since people hold onto their property for longer to take advantage of concessional rates and to ensure they make enough to get a good profit and the bit for the government. People promoting a capital gains tax need to be honest about what it is, which is a blatant money grab.

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  15. MT_Tinman (2,790 comments) says:

    “would make investors think twice about their capital gain assumptions.”

    Sums it up completely really.

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  16. Redbaiter (6,464 comments) says:

    So the BNZ’s Chief Economist is a commie.

    How long before they are holding out their hand for a taxpayer bailout????

    FFS.. morons everywhere.

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  17. Viking2 (10,703 comments) says:

    DPF, when are you joining the Labour Party?

    1.Initiate a large builder training programme targeting not just youth but low skilled migrants. Yes, the migrant gates would need to be opened. Just the signalling of strong intention to boost builder numbers would make investors think twice about their capital gain assumptions.

    We already have hundreds of youth who are denied the oppourtunity to join the building and related trades by the softy cock Nats. who refuse to remove youth rates. A program instituted by your partner party. I ronically for a longtime you were vicifours about hyaving this right to work at a rate that suited the employer and worked removed. \Have you now changed your political philosohpy over this?

    2.Ban councils from imposing any development fees and allow developers to install their own infrastructure.

    Well this already happens. Nothing new about this at all.

    Its right that councils i.e. representative of the local ratepayers, should protect the interests of those same ratepayers, as when stuff turns to shit, as it has with the legacy of leaky homes vested upon us ratepayers by the last National Govt. (via the idiot from Nelson) councils and therefore ratepayers i.e. landowners only, not citizens of the area, get to foot the bill.

    6. Impose a tax on all houses owned by Kiwis offshore with the aim of encouraging them to sell them.

    Words fail me that you should encourage imposing a law that tells Kiwi’s when they leave NZ they should sell their houses. What about their businesses, shares, invovlement in various incorporations and so on. You have to be looking for something to fill your day in cause its raining.

    8. Rezone all land within 10-20 kilometres of existing city boundaries as residential.

    That would include all the land say between Matamata and Waharoa, Napier and Hastings, Featherston and Greytown and then Greytown to Masterton: and probably Featherston to Martinbourogh. you get the drift.
    Not really sensible at all.

    It would of course include much of your favourite walking spaces around Ohariu to Cook Strait.
    Now imaginge some developer rolls in to Wgtn, CC and says I’m going to develop the Valley. Celia would do cartwheels and the poor developer would gethung.
    Just not sensible.

    7. Put in place a capital gains tax on second properties and farmland and immediately payable stamp duty for all second house purchases.

    Why. for example both those taxes would be gifted to the Govt. No local body will see them and all it would do is crash the investment in housing and we would go back to those already in possession becoming landholders forever andthe rest of you serf’s never owning land. tt is afterall the same systems that were cuased wealthy landowners in Britain to keep all their lands and lease them to crofters etc.

    Mind you there is no limit to how many companies one can own nor how many trusts one can have.

    More govt. servants to collect the money, another fail by an idiot.

    4. Initiate a new large state house building programme relying largely on the to be created new carpenters etc. Constrain new state houses to more efficient building systems including containerised modular housing (this doesn’t involve shipping containers), central and screwed in foundations, etc.

    Look at the legacy of the last program.
    Why should the taxpayer pay to house other people?
    bloody communists.

    Create an SOE whose sole purpose is to undercut existing building materials suppliers through bulk purchases from offshore, nodal warehousing and distribution from just three or four locations in the country, with a separate agency responsible for monitoring the quality of materials sourced.

    FFS, why not just buy out Fletchers and then force us all to buy from them.

    And that’s the best the smartest brain at BNZ could come up with to deal with the Myth that we are short of housing.

    We are not.

    (Except in Christchurch and that is because stupid politicans and their wanker friends prevented proper development of buildings, revolted against removing deffective buildings and allowed buidlings to be build where they already knew they should not be built.
    Further they have interferred in the insurance process both before and after the earthquakes and created this dinasour.

    Please tell me why the Taxpayer or the Rate payer should take responsibility for other peoples buildings.
    The ratepayer’ assets should be covered by their council, the taxpayer’s assets should be covered by Govt. and the rest that is owned by others should meet their risk and their entitlement to cover that risk.

    We are not dhort of houses in NZ. We just have schools in all the wrong places and commercial and industrial land in the wrong places. Housing is just fine.

    Build some decent schools on the fringes as has happened in Tauranga and watch as the housing moves to meet the needs around thos schools. And that’s Aucklands problem.

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  18. Viking2 (10,703 comments) says:

    If someone asked you how much of New Zealand was built upon, what would your guess be? 5% or 10%? More? Less? And to what extent would this affect your views on urban development and expansion?

    There is a widespread view that too much of New Zealand is being built upon: along with cows, the main thing we are growing are houses, and that not only are there too many houses but they are also eating into valuable farmland and nature.

    There are many reasons for this view, but at a popular level the main reason might be that growth and development happen in areas where people tend to move or travel. People also tend to go where other people are and then complain about there being ‘too many people’. Many folk see new development and extrapolate out to development they cannot see, which often does not exist.

    A look at the numbers bears that out: less than 1% of New Zealand is built up, including landfill and highways. Clearly New Zealand is not filling up. Compared to other countries in Europe, New Zealand has very few people and very little land built upon. About 9% of the United Kingdom is built up and 15% of the Netherlands. Even the United States, with more than 300 million people, has only 5% built on land.

    Of course, not all of New Zealand can be developed, but the notion that there is cause for concern at this point in time (or in the next few hundred years) is untrue.

    As it is, New Zealand is both absolutely and relatively undeveloped. This is to be expected for a nation that is only 170-years-old and with a population of 4.4 million people and covering an area equivalent to the United Kingdom.

    This background is important to understand as some of the key objections to so-called urban sprawl in housing policy, or the notion that New Zealand should be extremely concerned with towns taking up a bit of land, are well rehearsed.

    There may be legitimate reasons why local authorities don’t like urban sprawl much, particularly around infrastructure, but abstract concerns about land being taken up should not be one.

    Priced Out: How New Zealand lost its housing affordability was released by The New Zealand Initiative this week.
    http://nzinitiative.us2.list-manage.com/track/click?u=368ce55919dfdca57fc0d8cb6&id=e354989bed&e=aff73844ed

    And here is a lot of the problem.

    May 2013
    Draft Auckland Unitary Plan Feedback from an Auckland Ratepayer and Resident

    To whom it may concern,

    I write concerning the Draft Auckland Unitary Plan (“D-AUP”) as it relates to policy concerning Maori and Mana Whenua [The people of the land who have mana or customary authority – their historical, cultural and genealogical heritage are attached to the land and sea].

    Specifically, I am concerned about the Maori racial supremacy bias that Auckland Council is attempting to embed permanently into its public policy through D-AUP via Treaty of Waitangi-related clauses of legislation such as the Resource Management Act and various court decisions, and through additional political decisions Auckland Council has made off its own bat.
    http://breakingviewsnz.blogspot.co.nz/2013/06/michael-coote-submission-on-auckland.html

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  19. mandk (684 comments) says:

    In truth, none of these proposals will do much to moderate house price rises and house price volatility, even in combination with one another, because the principal influence in recent years has been credit market conditions (although, naturally, a banker would not admit this).

    Between 2004 and 2008, it was easy to get a 95% mortgage, or higher, and house prices boomed. From 2008 to mid 2012, it was difficult to get more than 80% and prices fell and then stalled. From mid-2012, 95% mortgages became available again and the market took off.

    With $30k to put down you can only afford a $150k house, if you can only get a 80% mortgage. But you could afford a $600k house, if you can get a 95% mortgage. Huge difference.

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  20. NK (916 comments) says:

    Well, firstly, you only really need ‘fixes” in Auckland, and maybe ChCh and/or Wellington. These problems are not widespread throughout the country. So if it’s mainly and Auckland problem, you have to figure out what is it in Auckland that differentiates itself from other towns and cities. The answer to that is jobs, incomes and to an extent quality of life. If Auckland is where people want to go because of the three factors above, what can we do to assist? The simple answer is build more homes, which can be done through more land being released, and/or through a simplified and inexpensive consent process. These would do huge amounts. Restricting bank lending will do nothing but make the wealthy own more properties; the same will apply with a CGT.

    But all of this is moot really. Because the state of the market in Auckland is now such that neither government (left or right) nor Auckland Council can afford to let house prices fall dramatically. The fallout from that would be catastrophic. So they have to remain artificially high for economic and social reasons. Bureaucrats know that, even if politicians don’t understand it.

    Can you imagine what would happen in Auckland to rates revenue if values fell by 30%? And consider this on the back of the debt that Auckland is racking up. That debt has to paid for by increasing property values; and therefore greater rates revenue.

    We are past the abyss now and it’s pointless harping on about housing affordability in Auckland because sadly it will never be resolved.

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  21. labrator (1,691 comments) says:

    The list kind of reads like this:
    1) More migrants
    2) Reduce council interference
    3) Take people’s money away and spend it for them
    4) Take people’s money away and spend it for them
    5) Take people’s money away and spend it on lawyers
    6) Take people’s money away and spend it on lawyers
    7) Take people’s money away and spend it for them (mostly on lawyers)
    8) Reduce council interference

    Not very radical or original thinking, there’s only three ideas in it despite the labelling.

    How about:
    1) Get rid of the licensed building practitioner system and allow more people to do more work on their own houses.
    2) Reduce council interference and red-tape to a minimum
    3) Open up locked down land

    Give that 5 years and see where you’re at then. This whole “blame johhny foreigner” is pretty short-sighted. They’re after NZ houses because the prices go up so quickly. They go up so quickly because of all the interference from councils and the government. Reduce the interference, get land values under control, allow houses to be have small modifications without paying the councils ridiculous fees and watch prices stabilise.

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  22. Colville (1,769 comments) says:

    These are generalised ideas to sort out an Auckland problem that could be fixed by shutting the immigration floodgates.

    1. is stupid. We have hundreds if not thousands that would leap at the chance of a trades apprenticeship. Imagine the rush from the phillipenes if we offrered residency and training. ffs.

    2. is REALLY stupid. Councils need to recoup costs. If its not from the developers then its from the ratepayers. Developers already install infrastructue within greenfields subs.

    3. I quite like. To be able to buy a house lot of triple glazed windows in std colours off the shelf would be great. Same for pre hung doors and a heap of other things that you just need massive numbers to make the importing work.

    6 and 7 are just too easy to get around. Waste of time.

    8 is really stupid. Town planning uses the word planning for a reason. Zone everything resi then where do the shops go? the schools the parks the industry.?

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  23. Fisiani (851 comments) says:

    Supply and demand imbalances always affect price. To reduce house price we either have to reduce demand or increase supply. Reducing demand would require a plague. A Green fantasy. Supply has to be increased. The 99% of NZ that has not been built on needs to be used. People want to live close to schools, shops and services. Two options are available. Highrise buildings in the cbd which generally suit singles and couples of all ages. Families need space and this will come from infill development and expanding city size. In Wellington for instance there is loads of land between Karori and Brooklyn behind Zealandia. Between Aotea and Grenada there is loads of land. Pauahatanui has lots of land. There are lots of options.

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  24. Simon (612 comments) says:

    End fiat money and stop expanding the RBNZ balance sheet, sound money. No state bail out of banks or state underwriting deposit holders. Make that known to everyone now. Stop RBNZ buying govt stock instead slowly drain the system by getting RBNZ to sell its govt stock.

    What is the BNZ current lending ratio? What if 10% of deposit holders in the bnz wanted to withdraw their money on Monday. Would the BNZ go under. Or is that 5% of deposit holders? What happens to BNZ balance sheet if interest rates go to 8% and house prices fall 15%? Would BNZ ask for a bail out? Would this crash our banking system?

    The really funny thing is that it usually labor that gets the housing bubble underway but national have even stolen that. How I wish Key would just fuck off to Hawaii now not in a few years time.

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  25. WineOh (428 comments) says:

    Why bother training up new migrants? Don’t we have a bunch of under-utilised labour of our own sitting on dole queues? A good dose of physical exercise building something that matters could be the kick that some of the “youf” of today need.

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  26. Simon (612 comments) says:

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  27. Cactus Kate (538 comments) says:

    So you don’t support 5 but you support 6?
    Reds are under your bed David and whispering in your ear at night.
    Of course self interest drives your post completely. You want a rich Chinese person to buy your place in#5 and you want the rich expat to sell their house to you for cheap in #6

    Never a better example as to why NZers views on housing are driven solely by their own self interest and should be ignored.

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  28. Ross12 (927 comments) says:

    Fisiani is right that it is a supply and demand issue. Also others who have said it is largely an Auckland issue are right.
    So the answer med/long term is reduce demand in Auckland by encouraging business to move out of Auckland. Like Viking2 with his comment about the need for offices in the CBD ( they are not needed for most companies) similarly many businesses don’t really need to be in Auckland. Before long the costs , traffic conjestion etc will have a few waking up to this.
    There was an article in the press recently on how Tauranga is already attracting some of the smart thinking businesses out of Auckland. This will inevitably continue.
    PS. Yes I know I have rabbited on about this before, but some things need to be repeated.

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  29. Falafulu Fisi (2,176 comments) says:

    From WhaleOil/Not-PC:

    Q: Who do you need for an affordable city? A: Developers.

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  30. Manolo (12,617 comments) says:

    Impose a tax on all houses owned by Kiwis offshore with the aim of encouraging them to sell them

    The last thing we need is more fucking taxes!
    Locals and overseas residents should be treated the same. Loony idea from Alexander.

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  31. slijmbal (1,133 comments) says:

    Four of these are new restrictions or taxes, 1 is a training initiative, 1 is the government getting in to a commercial business, 1 is building houses for poorer people (in a slightly smarter way) and 1 is the removal of a restriction that is probably the major contributor to high land and thus property prices.

    Very mediocre analysis

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  32. flipper (3,268 comments) says:

    Some folks have missed the point that Alexander makes \on Council development fees.

    The Government has already flagged its intention of curtailing Council theft in this area. I say theft because all developers are REQUIRED to install all roads and to connect all services. They do NOT capitalise them They build the coists into the section costs, thereby passing them on to purchasers.

    The Councils then impose a bullshit claim for rates to “provide the infrastructure and services”. All new housing is required to meet a minimum 50 tear life standard, so for 50 years the councils get fees for services already owned by the land owners.

    This nothing short of theft, writ large.

    A better solution would be to REQUIRE all Councils to BORROW to install ALL SERVICES, and have the Councils actually provide them The cost of that borrowing an all repayments would be then met thru rates over the next 50 years. :)

    The taxes and all that other crap? Just crap. Let it be.

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  33. Akld Commercial Lawyer (138 comments) says:

    Wow, I wonder what Tony was thinking with some of this. As a rule of thumb he has, IMHO, been one of the most consistent and accessible commentators over a long period. The problem he is seeking to cure is, as I see it, two issues. First, the Chch rebuild which will be very intense in the short-medium term for a 10 yr program at the end of which there should be a very liveable city but with modest growth. And secondly, the Auckland market which is likely to experience sustained (and high) growth over the medium to long term – as well as needing a handful of quick fixes.

    Pre-GFC and earthquakes, Tauranga was on track to exceed Chch by approx 2030. And apart from modest growth in Chch, the major growth area was the Akld-Hamilton-Tauranga triangle. Wgtn is trending down – the youth population especially.

    So, trade training for Chch is already happening. And more needed – as part of a package of measures to get the 2nd largest city back on its feet. And this needs to happen for Akld too for the 39k houses for the Accord to be built as well as sustained building of 10k – 15k per year. I am not sure that this will be an adequate signal for the capital gain fix – that needs a package of measures to address supply imbalance in Akld.

    The development levy conundrum is a toughie as there is not the scope for continuous rate rises to fund infrastructure development. Plainly, it is a problem today and makes infill housing marginal in many suburbs which is not the signal anyone wants to send. If developers install their own infrastructure they need to recover the cost which will affect house and land package costs – but may be more efficient than adding cost of council admin on top.

    Something needs to be done about building costs. Watch the Govt space – but destroying market forces won’t be it. Sure there can be efficiency gains from Chch scale projects and large scale subdivision like Stonefields – but the industry is made up of a handful of big players and thousands of SMEs. (Agree that there need to better quality assurance – or it will be leaky homes all over again).

    If Tony meant social housing, then I would agree that the work we are starting to see here needs accelerating – but not sure if the State should be more than the funder (and landlord) as the not-for-profit and private sector likely to be more efficient/effective at the build. And building code / consenting issues need a good going over. Again, Chch might lead the way here.

    Would like to know about the Oz controls on non-residents buying houses – as NZ still dependent on savings of people offshore and last thing we can afford is frighten that capital away.

    A flat no to to penalising Kiwis offshore – NZ needs that capital and experience and cannot see why you would ant to alienate them. Amounts likely to be small and this strikes me as the worst sort of tokenism.

    And I am not there yet, but likely to agree on capital gains tax on 2nd property is endgame. But not farmland – other measures needed to address the problem of the dairy payout being capitalised into the land price. Stamp duty costs too much to collect.

    As above, land shortage is an Akld issue. The Unitary Plan process has a few laps left to run. I remain confident that a pragmatic middle ground by will play out. Not before there is the odd showdown and one or two blood noses. Still much better to be having this dialogue in context with the current (pragmatic, mostly sensible) Govt than a Labour/Greens coalition. At the same time, RBNZ likely to clamp down a bit on the credit market. Probably another good reason why we need a better opposition. The prospects of climbing out of the recession only to have the economy wrecked by Finance Minister Norman is a terrible prospect. Mind you, Jane Clifton opines that Labour want to jilt him for a less demanding Winston. Still a terrifying prospect – but more one of benign neglect coupled with economic meddling that will likely benefit the very people Labour profess to hate. By contrast, the Greens could do damage that takes time to un-do. Norman’s recent outbursts make some of the outliers in the Labour caucus seem quite rational. Never thought I would say that.

    All up, not Tony Alexander’s best work. Others on this thread have said so more forcefully – but an Akld supply problem should not trigger market meddling that impacts the rest of the country needlessly.

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  34. Jim (385 comments) says:

    Kate: +1

    6 only makes sense if 5 is implemented first.

    Not sure what DPF is thinking there. The govt already has the knives sharpened to deal with any returning expats, so why not stick one in the back of those that don’t return? Nice.

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  35. Ross12 (927 comments) says:

    A reader on Whaleoil does a few mins research and comes up with this

    http://www.whaleoil.co.nz/2013/06/affordable-housing-close-to-auckland/

    These are the type of homes MOST first homes buyers bought 30+ years ago and often that far from work.

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  36. wiseowl (571 comments) says:

    Removing boundaries in some parts of New Zealand would see the loss of huge amounts of highly productive land.
    The very land we need to utilise to earn the export income to pay this countrys way.
    Never have thought much of this guys approach.

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  37. All_on_Red (941 comments) says:

    “would see the loss of huge amounts of highly productive land”
    Pardon the pun, but that’s an urban myth.
    We hardly occupy much land. I think its about 1-2%

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  38. rouppe (852 comments) says:

    #3. So a bit like Labours Power Corp? If that idea was dumb, so is this. If building suppliers are ripping off NZ’ers with the price of building supplies that’s something for the Commerce Commission to deal to. Mind you they took Carter Holt to court because they supplied under-spec framing timber for my house. Five years later they gave up and accepted a couple of grand per claimant… Useless bastards.

    #6. Dumb. What about those that own a house but want to dip their toe into Aussie? Try it out for a year and rent there while they do it, keeping their own house in case they want to come back. Or those around 60 that want to retire early and do 12 months travelling around Europe. Dumb, David, dumb.

    #7. Dumb. What is it with capital gains tax on residential property? So I can own a warehouse, or a few carparks, or a storage unit facility and any capital gains I make I keep, but not if it’s a second house? Or I can own shares in a property trust and I can sell those at a profit with no tax but not if it’s a second house? Or if I have a big enough place I can have a granny flat or 1bd self contained flat and sell that with my primary residence no worries but if I have the house next door that’s not? What a stupid fucking idea.

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  39. flipper (3,268 comments) says:

    All_on_Red (417) Says:
    June 16th, 2013 at 3:47 pm
    “would see the loss of huge amounts of highly productive land”

    Actually, according to Bassett and Malpass, it is LESS than ONE PER CENT.

    Anyone really interested in this whole subject should contact The New Zealand Initiative for a copy of The Bassett/Malpass report released on Tuesday last.

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  40. flipper (3,268 comments) says:

    Rouppe…

    The OECD fascination with a CGT is part of the mostly OECD economic malaise, witness Europe.
    Any CGT in NZ would need to see reductions in other taxes.

    The Labour red melon CGT is an ADDITIONAL tax on OPM (other peoples money) so they can spend MORE.
    Look where that has taken Europe.
    Of course the f/wits in the OECD advocating a CGT have not yet recognised that they are being hoist by their own petard..

    They, their idiot NZ disciples, and their CGT can get stuffed.

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  41. peterwn (2,933 comments) says:

    Some people has this funny idea that these extra taxes will be met by the property owner. For investment properties, the investor will do homework on returns vis a vis other investment forms. This would mean a higher rental expectancy and if this is not achievable, the house is ‘pulled’ from the rental market and sold to an owner occupier. Supply reduces, but not demand, so rents go up – to cover the extra taxes payable by the landlord.

    Same with non-resident withholding tax on overseas borrowings. The overseas lender refuses to take the tax hit, so the borrower has to. This forced IRD to pull its horns in to a significant extent on nen-resident withholding tax.

    So the wise economist from the BNZ describes all the wondrous things these extra taxes will do for prospective home owners but does not care less about those required to rent.

    As for his SOE buildinf supplies idea, he had better hope that Westfarmers (who owns Bunnings) does not bank with BNZ’s Australian parent.

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  42. wiseowl (571 comments) says:

    Its all very well for Basset and others to talk about less than one per cent.
    If you read what I said ‘in some parts of New Zealand’ and also ‘highly productive land’.
    That land with high land use capability is precious in this country.Only 7 per cent of New Zealands land mass is capable of being cultivated.ie flat land and this is therefore, more important in areas where the climate is also a factor in growing crops.
    I would suggest this is also a factor in dairy farming.

    My suggestion is that opening up city boundaries throughout the country is an insane idea.Many areas could probably expand reasonably but carte blanch would be stupid .

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  43. flipper (3,268 comments) says:

    Land banking is alive and well Wiseowl…..

    And among those engaged in it are Mayors of provincial towns and their planners.
    It is all a matter of balance. When they give up their lifestyle blocks (oh yes, they have them and other land just outside the residential boundaries) they will be seen to be somewhat less self interested.
    All the talk about infrastructure costs is bullshit since purchasers pay the cost and the councils fleece them on capital value driven rates.

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  44. OECD rank 22 kiwi (2,786 comments) says:

    A Housing Crisis in a country no one lives in at the ass end of the world. Don’t ever change New Zealand, don’t ever change.

    No wonder Google is flying balloons out of Christchurch to test its technology for providing internet access to “Primitives”.

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  45. Broomeinwelly (2 comments) says:

    Before I comment what do you call two or more economists grouped together?…A confusion of economists.

    What disappoints is the failure to look at REGULATION. My solution doesn’t require a jackboot capital gains tax (why Tony pray tell are first homes excluded but first farms included?). Having lived in the UK a CGT becomes part of the price and impressive bubbles formed in countries with them.

    Then comes the ridiculous notion of a SOE to go up against Bunnings, Placemakers, Carters etc. What next? KiwiSupermarket, KiwiPlumbers, KiwiBrickies? Tony obviously hasn’t been to a B&Q in Britain because in my experience, the prices here are pretty sharp (thanks China).

    Last but least, it doesn’t require us to become North Korea over land ownership. The notion of taxing expats for keeping a house here would only guarantee a one-way brain drain. Not even the greens proposed that.

    So here are some simple fixes but this is not just new build but refurbishment too (anyone who is refurbing knows what I mean):

    1. Abolish 3rd party appeals to the Environment Court (this will also greatly speed up spatial planning too)
    2. Relax sub-division rules on lifestyle blocks in peri-urban areas. Let’s gobble up lifestyle blocks first before farmland
    3. Take an axe to the Building Act to allow more works to be undertaken by a Licensed Building Practitioner without need for a building consent while expanding permitted development rights (eg recladding)
    4. Related to 2 above, create ‘free-build’ sub-divisions, where developers can build without reference to consents subject to maximum pot coverage, services etc. These will still be subject to Council building inspection but in one foul swoop eliminates planners and a host of consultants
    5. Also related to 2 above, centrally consent standard home designs; a Jennian, Keith Hay, Lockwood should not be treated as a brand new design each time one comes up for consenting (NB consenting would still be needed but it relates to the land, not the structure)
    6. To speed up consenting, place a time-limit on all consents of 21-working days and failure to consent becomes deemed approval
    7. Adopt the simple and elegant policy of Reciprocity for all land purchases (if we can buy freehold in Australia, the same applies here. If we cannot buy in China freehold, then sorry, that’s off the table here).

    Here is my final radical thought.

    If this is about making houses affordable then there is an old policy from the past that is still in operation in the UK; Stamp Duty. Based on council areas where the median price exceeds a set amount (crucially adjusted for inflation too), Stamp Duty could be instigated by the council with money raised ring-fenced for social housing provision:

    For Auckland, anything over $500,000 could, for instance, attract a 2.5% stamp duty ($12.5k) anything over $670,000 on current data would trigger 5% ($33.5k) and for homes $1 million plus, 10%, ($100k).

    Instead of a capital gains tax that would help the market to realign to four strata. Radical eh!

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  46. Jack5 (4,216 comments) says:

    Some interesting comments in this thread. But in commenting on comparative ratios of housing land in NZ compared with overseas, it would help if posters stipulated whether they are talking about total land or arable land.

    NZ is a mountainous country and only 2.03 per cent of the land is classified as arable or otherwise in permanent crops (that would be grassland). This compares with 16.5 per cent in the United States, for example, or 25 per cent in Britain, and 13.5 per cent in China. In mountainous Nepal 16.8 per cent of the land is arable.

    Most of the schemes I read for Auckland don’t seem to distinguish whether expansion will eat into arable land, or whether there is even land unsuitable agriculture that might be able to be used for housing.

    The idea that NZ is rich in land for urban expansion is a bit suspect, IMHO. Next time you are in a plane look at all the hills and mountains and the peripheral bits of arable land, plus, of course plains (small on an international level) such as in Canterbury, Waikato, and Southland.

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  47. Nostalgia-NZ (4,685 comments) says:

    ‘Create an SOE whose sole purpose is to undercut existing building materials suppliers through bulk purchases from offshore, nodal warehousing and distribution from just three or four locations in the country, with a separate agency responsible for monitoring the quality of materials sourced.’

    Unbelievable. The builder suppliers are already competitive and employ 1000s throughout the country. There are ‘second tier’ suppliers with items half the cost of the budget supplies of the major players – I’m not vouching for the quality, but it’s a free market.

    There’s no use trying to ban house sales to non-residents because it’s too easy to get around. Restricting foreign investment overlooks the fact that many nzers are benefiting from the heated house market. Getting 1 to 2 hundred more thousand for a sale than 2 years ago is not uncommon, it’s a good time to sell rental properties and extinguish debt. It isn’t a bad thing for some to have invested in property and to now cash out of it, good on them. There have always been property booms and always will. Just as first homes have always been difficult.

    The argument of letting developers do the infrastructure overlooks that it already happens to a large degree and that Councils need to maintain a direct involvement or an ‘overseer’s role’ to make sure work is sound. Sometimes I think that the ‘housing crisis’ is a hysteria, whether that is true or not there can’t be any cause to entertain ‘controlling’ building supplies. The very thought that it could be contained to 3 or 4 areas in NZ completely overlooks the fact many suburbs bordering industrial areas in Auckland have 3 or 4 suppliers. Tony Alexander’s plan is only a short step away from ‘fixing’ costs in a free market.

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  48. Colville (1,769 comments) says:

    “would see the loss of huge amounts of highly productive land”
    Pardon the pun, but that’s an urban myth.
    We hardly occupy much land. I think its about 1-2%

    All_on_red you have no idea what the fuck you are talking about.
    In Palmerston North right now the “Planners” have decided to push the town out over prime horticultural land (all river silt and liquefaction prone) rather than out to the West because the West side of town is “owned” by another Council. Oh and the PNCC owned airport stands in the way of development to the West too.

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  49. Colville (1,769 comments) says:

    Nostalgia…

    Unbelievable. The builder suppliers are already competitive and employ 1000s throughout the country. There are ‘second tier’ suppliers with items half the cost of the budget supplies of the major players – I’m not vouching for the quality, but it’s a free market.

    Bullshit. We pay three to four times as much here as in a bulk retail store in USA.

    No such thing as trade discounts or protected trades the only things that are at a premium cost are “protected” by skill level not legislation.

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  50. Nostalgia-NZ (4,685 comments) says:

    ‘Bullshit. We pay three to four times as much here as in a bulk retail store in USA.

    No such thing as trade discounts or protected trades the only things that are at a premium cost are “protected” by skill level not legislation’

    Sure, so traders here are making 300 to 400% profits along the chain. Or is that in Disneyland?

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  51. Nostalgia-NZ (4,685 comments) says:

    ‘In Palmerston North right now the “Planners” have decided to push the town out over prime horticultural land (all river silt and liquefaction prone) rather than out to the West because the West side of town is “owned” by another Council. Oh and the PNCC owned airport stands in the way of development to the West too.’

    Now that’s shocking.

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  52. Colville (1,769 comments) says:

    Nosty, you really do play the fuckwit so well.

    I just cant really be bothered with you…

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  53. Nostalgia-NZ (4,685 comments) says:

    Sure thing Colville, thanks for the advice on how to count invisible money. Our log exports are not peaking because the prices are 2 or 3 times that of the States, hard to work out?

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  54. KevinH (1,128 comments) says:

    My plan would be to do nothing, let the market correct itself because it will. Presently money is cheap on the back of low interest loans which won’t last. A 3-5% increase in the mid term would have a devastating impact on those who have overcommitted. The impact of cashed up immigrants is also an aberration that is not sustainable into the mid term, Asians like to win, it is pathological, but inevitably the laws of physics will overcome human emotion and economics.
    A crash in the housing market is an almost certainty, do not buy now , minimise your loses by investing elsewhere.

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  55. martinh (824 comments) says:

    Id say get rid of John Key. His only plan is use the insurance money in CHCH to stimulate the economy and sell the rest to asia and America. A dumbass can come up with that plan and has. The shame is the other dumbasses go to SKycity to feed their fat faces.
    I dont like Winston but this is where im going to head so long as he dosent make it specifically antiasian
    From what i saw of those asians outbidding that kiwi couple on sunday tonight i think the govt should be charged with treason for sitting there and loving it

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  56. martinh (824 comments) says:

    Tony Alexander is talking up the housing market as he knows if it turns south the BNZ will be exactly like it was in the 80s, bankrupt to shit

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  57. Nostalgia-NZ (4,685 comments) says:

    ‘My plan would be to do nothing, let the market correct itself because it will.’

    Yes, it is already correcting itself.

    ‘From what i saw of those asians outbidding that kiwi couple on sunday tonight i think the govt should be charged with treason for sitting there and loving it’

    Actually it would be the vendors loving it, as they’re entitled. Protectionism against the ‘big bad’ world doesn’t work.

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  58. Viking2 (10,703 comments) says:

    Inner city buyers are spoilt for choice

    Not aucklanders of course and not qurter acre paradises.

    During the next 18 months a flood of newly completed apartments will reach the market after years of pent-up demand.

    The fleet of removal trucks disgorging furniture at Central Park and other newly completed apartment developments across Sydney’s inner city will become an increasingly common sight in the next 18 months.

    There are about 6000 apartments due for completion in that time, which experts say will be the highest for almost a decade. But that number could be eclipsed in subsequent years as the dramatic increase in inner-city apartment developments approved since 2011 washes through the system.

    Unlike the building boom in Melbourne’s inner city, Sydney’s central business district and fringe suburbs were largely starved of new apartments for the best part of six years.

    Emma Alcock has just moved in to her new apartment in the Dominion complex, in Darlinghurst.

    The finance industry worker, who previously shared a rented terrace with friends in neighbouring Paddington, bought the two-bedder with her father in 2011

    ”I’m very excited,” she says. ”Living so close, I did find myself going past it quite regularly and I have done the occasional detour home from work to check it out.”

    The apartment she bought – for about $1.4 million – faces north and has a balcony looking out to Burton Street. ”It’ll be nice to relax there on a Sunday afternoon,” she says.

    http://smh.domain.com.au/real-estate-news/inner-city-buyers-are-spoilt-for-choice-20130613-2o56v.html

    Here is Aucklands future. 1.4 million for an apppartment. Enjoy.

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  59. martinh (824 comments) says:

    At Nosty
    Protectionism against the ‘big bad’ world doesn’t work.
    Oh yeah you go to Aussy and see that they cant buy the established housing stock and must build a new house.

    So it does work

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  60. Anthony (736 comments) says:

    For a while now I’ve been advocating a land tax (say 0.5% of land value) for all but the principal residence with the amount paid able to be used as a credit against any tax due on that land. This would make it less attractive to buy land and houses just to sit on, pay no tax and wait for a capital gain.

    Tony Alexander is a bit of a ‘blow hard’ of course – as was pointed out previoiusly http://www.kiwiblog.co.nz/2009/02/unfortunate_predictions.html

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  61. martinh (824 comments) says:

    yeah anthony luckily those aussie banks are around to pay out the bnz for its debts when this tide turns and or foot and mouth is found here.
    Tony is probably storing all his money in a little condo next to legoland- the head in the sand childlike git

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  62. Colville (1,769 comments) says:

    Nosty…what percentage of a finished house price in refelcted in a log?

    Fuckwit.

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  63. Nostalgia-NZ (4,685 comments) says:

    ‘Protectionism against the ‘big bad’ world doesn’t work.
    Oh yeah you go to Aussy and see that they cant buy the established housing stock and must build a new house.

    So it does work’

    I don’t know the details of any difference made in Aussie. I also don’t know how anecdotal evidence is supported that merely because a person is Asian that they are therefore not NZ born. What I do know is that NZ requires a large amount of cash or investment for some types of immigrants coming here, I don’t see why the should be ‘penalised’ further.

    From another point of view if a person invested in property 5 or 6 years ago and managed not to face a mortgagee sale when prices dipped why should they be penalised? Many went to the wall. My own experiences suggest sell now, and don’t reinvest in property. As Kevinh said above let the market correct itself, not buying in a rapidly rising market is prudent, or looking for areas (and there are still plenty in Auckland) where prices haven’t gone ballistic is an answer for first home buyers – what might be apparently ‘down trodden’ now will lift overall as time passes.

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  64. martinh (824 comments) says:

    Actually i do like some of Tonys policys he listed i just think his forecasts a BS, its John Key who is the girls blouse who wont do it.-

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  65. Monique Angel (229 comments) says:

    1: Initiate a large builder training programme targeting not just youth but low skilled migrants. Yes, the migrant gates would need to be opened. Just the signalling of strong intention to boost builder numbers would make investors think twice about their capital gain assumptions.
    My comment: TA hates incumbent res prop investors.
    Ban councils from imposing any development fees and allow developers to install their own infrastructure.
    Developers pay to hook up water and sewers. fair enough. But TA is saying he want’s to see developers hit with a hook up fee of 100k plus in California. This blocks out first time purchasers and investors.
    Create an SOE whose sole purpose is to undercut existing building materials suppliers through bulk purchases from offshore, nodal warehousing and distribution from just three or four locations in the country, with a separate agency responsible for monitoring the quality of materials sourced.
    The state competing with private enterprise, that’s just what we need.
    Initiate a new large state house building programme relying largely on the to be created new carpenters etc. Constrain new state houses to more efficient building systems including containerized modular housing (this doesn’t involve shipping containers), central and screwed in foundations, etc.
    Yeah, nah, fuck off. No cunt likes to live in a shipping container or carpool to work with cousin Cletus.
    Ban house sales to non-residents (even new houses given the ease with which special developments could arise targeting solely folk offshore and soaking up construction sector resources).
    Ban those naughty aspirational fucktardss from having a house they might return to at a stage in their lives they can make use of it.
    Impose a tax on all houses owned by Kiwis offshore with the aim of encouraging them to sell them. Yeah, go on. Do that. Anything that leads to price inflation is on our side. We tend to see the bigger picture and know that tax imposed on us is recovered from the end user. Higher prices for youse poor cunts. Bonanza profits for us.
    Put in place a capital gains tax on second properties and farmland and immediately payable stamp duty for all second house purchases. Fuckin bring it on. The subsequent price inflation means I’ll be a winner over the long term.
    Rezone all land within 10-20 kilometres of existing city boundaries as residential.
    Think Coronation St. No dairies, parks etc.

    Nice to have some radical thinking in this area. It’s communist thinking. Not radical thinking.
    Tony predicts the chances of his policies being implemented:

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  66. martinh (824 comments) says:

    “What I do know is that NZ requires a large amount of cash or investment for some types of immigrants coming here, I don’t see why the should be ‘penalised’ further.”

    They dont even become residents here, they buy and then go to avoid getting their money taken from The new Chinese presidents clean up of corruption money.
    So bascially the chinese took the money from America by keeping their currency low and taking their manufacturing base, that all went to the corrupt communists, they are being cleaned out and are coming here buying houses and then leaving and not becoming residents as they are too dodgy.
    So Kiwis cant buy as these peole have come in and done it.
    And that little man john Key of Paul holmes height does nothing, what a blousy little girl he is not supporting kiwis

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  67. Nostalgia-NZ (4,685 comments) says:

    ‘And that little man john Key of Paul holmes height does nothing, what a blousy little girl he is not supporting kiwis’

    Supporting free markets, free trade etc, while reducing restraints, rather than introducing them – is actually supporting Kiwis and what they do best.

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  68. martinh (824 comments) says:

    Nosty
    Yeah tenants in our own land, and my kids will be too.
    Great support from that shrimp. He should go into the next dwarf boxing match

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  69. Nostalgia-NZ (4,685 comments) says:

    Cut it out martinh, kiwis stick up for themselves.
    I like that one about the boxing match though, could have got a bloke skipping and shadow boxing.

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  70. martinh (824 comments) says:

    Yeah thats me sticking up for that couple. And hopefully Winston soon too
    Not American/Oriental John key

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  71. jackkerouacsnephew (27 comments) says:

    Alexander’s outlines show what a fruitloop he is. A control freak with ideas for central control of land and industry matches that of mad barking dog Morgan.

    ““ Create an SOE whose sole purpose is to undercut existing building materials”” .. that’s great Alexander thanks for the introduction to big brother

    ““Initiate a new large state house building programme relying largely on the to be created new carpenters etc. Constrain new state houses to more efficient building systems including containerised modular housing (this doesn’t involve shipping containers), central and screwed in foundations, etc. Ban house sales to non-residents””“ ……
    Yes that right Alexander, import carpenters and builders from overseas and refuse them the right to but own houses. An economist worthy of the National socialista front. Lets isolate New Zealand

    “”Impose a tax on all houses owned by Kiwis offshore with the aim of encouraging them to sell them.”” …………Of course, Alexander why should New Zealanders own property overseas, lets get central control though tax policy , why not make them wear grey suits with armbands, so we know who to throw rocks at

    ““Put in place a capital gains tax on second properties and farmland and immediately payable stamp duty for all second house purchases.”” ………..
    Why not go the full hog Alexander and make a complete idiot of your self. Go for
    Gareth Morgan’s Capital tax, more money for your mad ideas Alexander

    “”Rezone all land within 10-20 kilometres of existing city boundaries as
    residential””……… Nah,just nationalise the farmers land Tony,this will help the economy big time .

    I wouldn’t have Tony Alexander as economist of the New Plymouth boy racer’s v8 team, much less print him in newspapers

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  72. Nostalgia-NZ (4,685 comments) says:

    Winston isn’t that tall himself except when he’s spurred up in cowboy boots. He’s got them white frilly bits out the side of his trousers which is also a bit of a worry.

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  73. martinh (824 comments) says:

    Yeah satin sheets too i hear

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  74. jackkerouacsnephew (27 comments) says:

    Viking2 (9,602) Says:
    June 16th, 2013 at 12:20 pm
    Actually. I read most of these guys stuff and Alexander would rate the pits. He’s a Bernard Hickey type. another less than capable economist/journo.

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  75. jackkerouacsnephew (27 comments) says:

    Viking2 (9,602) Says:
    June 16th, 2013 at 12:20 pm
    Actually. I read most of these guys stuff and Alexander would rate the pits. He’s a Bernard Hickey type. another less than capable economist/journo.

    Two good ones are Bagrie from ANZ and Roger Dickens.

    http://www.sra.co.nz/

    Viking,
    Most of Roger Dickens links to site to not work. he also taks about “Roger ravings”.
    This is not a good site where we can get information.

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  76. jackkerouacsnephew (27 comments) says:

    Farrar being NZ Nat of course believes in a free market
    except for, whats this

    “”
    Which ones [ policies ] do you agree with?
    I like 1, 2, 6 and 8. I support a CGT but on all properties, not just some. “”

    So you see that Nat believes in a free market except not all free markets,

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  77. Manolo (12,617 comments) says:

    jack, you’re very incisive and perceptive.

    DPF, when are you joining the Labour Party?

    He’s already a proud member of Labour Lite.

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  78. gazzmaniac (2,266 comments) says:

    It’s Rodney Dickens not Roger Dickens. It even says so on his website, the page you linked to.
    I have no issues finding the documents he’s linking to, including previous issues of his newsletter, Rodney’s Ravings.

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  79. PhilBest (5,112 comments) says:

    Rodney Dickens is a good guy. Worth reading his stuff.

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  80. PhilBest (5,112 comments) says:

    We actually aren’t getting told anything like how BAD our problem with housing affordability is. Kiwis need to start looking at RE sites in cities like these, to see what is possible:

    http://www.realtor.com/realestateandhomes-search/Indianapolis_IN/price-80000-300000/sby-1

    http://www.trulia.com/for_sale/Philadelphia,PA/100000-350000_price/

    http://www.realtor.com/realestateandhomes-search/Salt-Lake-City_UT/price-80000-300000/sby-1

    There are dozens of cities in the US like these three. These prices are not low because of a crash – they always were low, and didn’t bubble, unlike in anti-growth California and other strictly “planned growth” regions.

    They are not blighted local economies like Detroit, either. In fact they tend to be the best performing local economies in the world right now outside of the special “global cities” like London and NYC and HK.

    Hugh Pavletich has been right all along about how it is done. He actually doesn’t argue his case strongly enough.

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  81. PhilBest (5,112 comments) says:

    The alleged downsides to “unrestrained urban growth” are bullshit and propaganda from the anti-car fanatics too. Indianapolis is comparable to Auckland in population, but is about one third the density. And its housing is about one third the price (see the RE site I linked to above).

    But what is the “delay per hour of driving” at peak time?

    Auckland: 39 minutes.

    Indianapolis: 15 minutes.

    Even LA, population 15 million, is 41 minutes.

    Wellington, population 350,000, is 37 minutes.

    You can bet our bureaucrats have been shite-scared of actually getting any analysis done of performance according to indicators like these. Well, now that TomTom have released GPS-data=based studies, the cat is out of the bag.

    http://www.tomtom.com/en_gb/congestionindex/

    NZ and Australia have worse traffic congestion delays than the UK, which is worse than Europe, which is worse than the USA. So much for “avoiding the consequences of crazy car-dependent transport planning”.

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  82. PhilBest (5,112 comments) says:

    Here is what I think has happened with urban and transport policy all over the place. The USA was by far the earliest nation into mass automobility and automobile based development. This actually served their economic growth very well; as I say, it eliminated economic land rent in urban economies, which has massive flow-on economic advantages in productivity and discretionary spending.

    But somewhere along the way, the rest of the world drew the wrong conclusions from what was happening in the USA. “Urban planning” as a newly established course of academic qualification, is especially responsible – it seems the people who were largely responsible, were appallingly non-objective and the whole thing has always been based on a series of shallow assumptions and a total blindness to economics, land rent, and real estate markets.

    For some reason, the tendency of highways to congest again as fast as they were built and expanded, was interpreted almost solely as “induced demand”. Vital facts were completely ignored, regarding economic growth, income growth, women joining the workforce, the increased mobility of the elderly and the young, the falling real cost of automobility, and the massive increases in discretionary income as economic land rent was undermined.

    Of course cars were a lot more dirty back then, leading to notorious air pollution in Californian cities, which were unique in a number of aspects. Firstly, their rate of population growth following WW2 was astonishing. California grew at about double the rate Texas has recently. The truth about those highways in LA and SF is that the construction of them never ever kept up with all the increases that were nothing to do with “induced traffic” – these increases were happening anyway.

    It was not anticipated that vehicle technology improvements would solve the pollution problem anyway, and Californian cities actually attempted to spend up large on commuter rail services to ameliorate the problem. However, this is never an effective use of funds. Anthony Downs formulated his “triple convergence” theory way back before 1970 – if a new driver is “induced” by road expansion, why wouldn’t a new driver also be “induced” by someone else catching a train instead? Freeing up the space on the road for a new driver by spending the kind of money necessary to entice someone onto a train, is a far more costly way to “induce” each new driver than expanding the road capacity.

    And is an “induced driver” not merely a new participant in a growing economic agglomeration cluster, which is a desirable thing? At some point, the urban economy has to find its own level. No economic agglomeration cluster keeps growing indefinitely and indeed most types of cluster are not suited to high density anyway. The decentralisation of employment has everywhere been hugely beneficial to economic growth and productivity. You can’t expect manufacturing and warehousing to cluster at the same place as finance and bureaucracy. Multiple clusters of different types are efficient – forcing them into the same general location is a disaster.

    LA and SF are actually not “low density” (I won’t go into an explanation of why they developed at medium density rather than low, here). Almost every other city all over the USA has far lower density suburbs – even New York. Now, what “planners”, politicians, and the public all over the rest of the world, have missed, is just how dam efficient all those low density urban economies in the USA are. The focus is all on LA, and all the wrong conclusions are drawn. We are told that LA is the illustration of the consequences of “unconstrained low density sprawl” and endless “wasting of money on highways”, when in fact LA is the USA’s worse congested city because it is the USA’s densest city, lacks road lane miles relative to population level, and has spent up to 1/3 of “transport infrastructure” spending for 3 decades now, on public transport that almost nobody uses.

    You are surely aware of how, in NZ, spending on urban highway networks for which there were plans, was abandoned wholesale in the 1970′s, initially due to economic constraints, but into the 1980′s, due increasingly to Greenie and NIMBY opposition? The same thing has happened in Australia, Canada, the UK and Europe – if you were not conscious of any antagonism against highways in Europe, it is probably because the anti-highway forces have long since conquered the arena and almost no-one now has the courage to be politically incorrect and speak out in favour or roads and cars.
    But the irony is this. In attempting to “not make the same mistakes America did” as we too achieve greater “automobility” for our population, we have in fact made the mistakes we did not see as mistakes, and have reaped exactly the consequences we thought we were avoiding. We do have LA style congestion, for the same reasons, and in far smaller cities…..!!!!! The best thing we could have done, was follow the examples of cities like Indianapolis and Jacksonville and Salt Lake City. Allow low density “splatter” sprawl, especially where there is the ideal land space for it; allow (and indeed encourage) employment to decentralise; build roads; keep land costs low.

    But even in hindsight, almost no-one anywhere in the world is willing to look at the evidence and admit it.
    “Public transport” provided by the private sector, totally deregulated, with subsidies following the rider, would be far more efficient than the public monopoly model that we have, which ends up only marginally more energy-efficient than cars with only 1 person on board, if even that. “Atlantic City”, New Jersey, has an interesting model.

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  83. PhilBest (5,112 comments) says:

    Extended arguments and discussions between “Kate” and “Brendon” and myself on this general subject, HERE:

    http://www.interest.co.nz/property/64929/new-zealand-planning-institute-says-it-blinded-view-think-allowing-tracts-land-be-dev

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  84. jackkerouacsnephew (27 comments) says:

    yes thanks PhilBest for your comments and referrals. Your ‘extended arguments’ I can go through in time.
    I often notice that the best contributions on Kiwi blog come up late after the usual band of rednecks have shifted their short attention zone.
    I think Hugh Pavletich may be rather sick of the morons he has to talk to on Radio new Zealand, and so is rather cursory.
    As an ordinary Christchurch person I have found him inspiring and succinct.
    I wondered why Tony Alexander did not stretch his idiotic arguments further and propose a worthwhile idea of sentencing all planners to jail for 6 months and starting all over. But that would require a depth that Alexander does not have.
    As said elsewhere in a censored comment, Alexander is not fit to economise over the New Plymouth v8 boy racers club.
    Will send this to you privately also, please let me know if you see this

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  85. gazzmaniac (2,266 comments) says:

    Canberra is a good example of a city that has undergone much growth without having a major traffic problem.
    It was designed in the 1920s with cars in mind, and has gone from a population of around 30,000 after the war to over 300,000 today, with traffic problems akin to somewhere like New Plymouth.
    Not that I particularly want to live there.

    Gold Coast is similar, however it’s got high density areas (which funnily enough is where the traffic is worst) and the highway steps down from 4 lanes to 2 in the space of 10 km, creating an awful bottleneck.

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