How many foreign buyers are there?

July 29th, 2013 at 1:00 pm by David Farrar

Tony Alexander in May 2013 looked at this issue. He found the following from sales data:

From these numbers we can derive the proportion of all house sales in NZ which go to buyers from offshore
who have no intention of shifting here – including half of the “Don’t Know” responses.

  • Australia 0.4% 
  • China 0.6% 
  • Europe excl. UK 0.4% 
  • India 0.4% 
  • Other Asia 0.5% 
  • South Africa 0.3% 
  • United Kingdom 0.3% 
  • United States 0.4% 
  • Other 0.4% 
  • All 3.6%

So if you exclude Australia, ’s policy may reduce the number of buyers by 3.2%.

However also of note is 4.5% of sellers were based overseas.

Now remember this is based on actual sales data. Alexander summarises:

This is interesting because taking the many sampling uncertainties into account the proportion comes close to the proportion of sales we estimate are to people offshore who do not intend shifting to New Zealand – some 3.6%. The implication? There could be close to zero net transfer of NZ home ownership occurring to offshore investors.

I’d tempted to call the policy a snake oil solution.  The data suggests it may have no impact at all on prices.

 

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62 Responses to “How many foreign buyers are there?”

  1. lastmanstanding (1,297 comments) says:

    So the truth outs!!! Another issue Shearer et al haven’t thought about is if you take action that reduces house prices say 10% to 20% in short order a hell of a lot of first time owners are going to be upside down as the banking industry says. That is they will owe more than their house is worth and their bank will demand they pony up with the difference in cash to restore the LVR written into their mortgage docs or they will have to walk away from their house.
    Now that’s going hurt a lot of possible Labour/Green supporters Gen Xers especially.

    The only way to fix the problem is to slowly and orderly increase supply to get closer to demand. We don’t have the tradies or the building materials to build tens of thousands of new homes in Auckland over night or even over the next few years as CCh is taking both the tradies and building materials to fix houses or build replacements for those lost in the quakes.

    Alas there has been a growing shortfall in new house builds in Auckland over the past 20 years and now its all caught up on those looking to buy. So it will take at least 7 to 10 years to restore the balance.

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  2. tvb (4,430 comments) says:

    There will be a slow reduction on foreign ownership of houses with Labour’s policy. All the policies announced so far involve spending taxing and state intervention.

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  3. flipper (4,083 comments) says:

    Hoist with their own petard – again!

    Of course martinh will disagree :)

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  4. hj (7,033 comments) says:

    Tony Alexander says immigrants don’t put house prices up ; returning Kiwis do.

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  5. hj (7,033 comments) says:

    So the hot money from China thing is a myth?

    If land supply is the panacea why aren’t rents rising?

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  6. peterwn (3,275 comments) says:

    Wonder if those on work visas will be able to purchase – but then Hobbit haters would not care that overseas stars would be banned from buying houses to live in while taking part in Wellywood movies.

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  7. wally (65 comments) says:

    I think the real problem is expatriate NZers living overseas (for example New York) and owning multiple (for example 4) houses in Auckland.

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  8. flipper (4,083 comments) says:

    The lastmanstanding says:

    *** The only way to fix the problem is to slowly and orderly increase supply to get closer to demand. We don’t have the tradies or the building materials to build tens of thousands of new homes in Auckland over night or even over the next few years as CCh is taking both the tradies and building materials to fix houses or build replacements for those lost in the quakes. ***

    Pretty true, but government over-regulation has added to the problem under the law of “unintended consequences”, well one hopes.

    No thought whatever was given to Government regulation that was supposed to cure leaky homes, of their effect on prices.

    Council extortion fees increased, paper work increased (cost transfer from builder to home buyer), unnecessary and overkill flashing requirements, both on paper and in practice, all adversely impacted on prices.

    Then there have been new double glazing regulations for new houses, and the dandy of them all – minimum scaffolding requirements for roofing in single storey houses. (Roofers are like cats. If they fall they never get hurt :) ), to mention just two that probably add $5000 to a smallish/average sized new home.

    Then there is the bullshit about licensed builders. The days of good DIY, supported by good, sensible building inspectors, have gone. The problem was never with the builders. It was a design/material problem, conveniently transferred to the less PR savvy small builder. The “master” and “certified” builders are having a field day. Shortage of supply has resulted increased costs.

    So get rid of ALL the supply side problems and the situation will be addressed to the benefit of all NZ’ers.

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  9. NK (1,244 comments) says:

    Tony Alexander says immigrants don’t put house prices up ; returning Kiwis do.

    What’s that got to do with anything?

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  10. Nookin (3,354 comments) says:

    Further questions:
    How many of these buyers were in the Auckland or Christchurch markets?
    How many were actually competing against first home buyers as opposed to the higher echelons of residential properties?
    How many of them are being purchased in anticipation of immigrating to New Zealand?
    How many of them are rented to New Zealanders?
    How many of them are work related (the buyer has a business in New Zealand that creates employment)?

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  11. mavxp (483 comments) says:

    The media in this country really need to learn to ask the right questions. Like:

    “What is the evidence for assertion X”

    Would cut out a lot of pointless BS by politicians.

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  12. Kea (12,841 comments) says:

    I was never convinced foreign buyers were responsible for increased house prices. The housing bubble was a global thing and came about due to the availability of debt/credit. WE borrowed and spent like idiots on our housing. You could not pick up a paper or turn on the telly without hearing about it. As prices went to absurd levels we actually celebrated this as a good thing. And it was all based on debt !

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  13. thedavincimode (6,800 comments) says:

    When I heard the interview with the fuckwit Shearer by the funny little fellow with the funny thing on his head, Shearer seemed to be saying that 1) he didn’t know how much it would reduce prices; 2) he was sure it would because of the anecdotal evidence from all the young buyers who missed out to Asians and 3) even if it didn’t reduce prices, the change wouldn’t do any harm. So it was all good. We make the change in hope that it will work but knowing that nothing could possibly go wrong. :roll:

    The funny little fellow wasn’t quick enough on his feet to ask the dead man walking how all the existing home owners would feel in the event his silly policy did work and they lost tens of thousands of dollars off their home values and /or what would happen to those who wound up with negative equity as a consequence.

    Auckland is a city of nearly 2 million people with the greatest immigrant inflow and a fucked transport system. How long will it be before MSM realise that and make house price comparisons with house price trends internationally in growing cities? How long will they let the fuckwit Shearer get away with ignoring the effect on current home owners or the building consent fee rort not only on new subdivisions, but also on new builds on existing residential land? How long will they continue to run sad arse stories about greedy young fuckwits who want to buy things that they aren’t prepared to work for and cannot afford? The snivelling wretches like martinh who want current home owners to subsidise the cost of their new homes through a loss of equity.

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  14. nickb (3,687 comments) says:

    martin seems to have gone oddly quiet.

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  15. Redbaiter (9,098 comments) says:

    80% of all statistics are made up on the spot.

    BTW, martinh was no “snivelling wretch” you uncivil ignoramus. He argued his case politely and persistently. Typical prog intolerance.

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  16. dime (9,980 comments) says:

    I think whats happening is the .8% of chinese buyers are in a concentrated area.

    Shit happens I say!

    Let them pay a mill for crappy houses in forrest hill. enjoy.

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  17. edd (157 comments) says:

    3.6% decrease in demand is a difference. And if there are 5 other ideas that also make 3.6% difference then we’re talking about 21.6% which should do the trick.

    Ideas that include rezoning for development to increase supply (without putting extra pressure on our tiny little motorways of course).

    But all these ideas will interfere with a market on the brink of exploding into a bubble and that’s just not what the speculators who control the Beehive want now is it. Our governments got the market fundamentals just right for over leveraged property speculators at the mo.

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  18. thedavincimode (6,800 comments) says:

    In case you didn’t notice Russell, the entire substance of his case was to put his hand in somebody else’s pocket. I know it must come hard to you given you seem to have found a new friend and heaven only knows what an achievement that is for you, but your response simply confirms what I’ve said before. You are a socialist and want to control the lives of others in accordance with your own agenda.

    BTW, who was that girl you were talking to at the fund-raiser for la revolucione Generalissimo Guava launches guerrilla movement fundraising? Did you drop in on your way to work or on the way home?

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  19. Damian Christie (10 comments) says:

    I think this policy is one that could’ve easily been adopted by any party, so it’s a shame in a way that Labour went there first, otherwise it could be law next week.

    Foreign investment might be a small issue driving up prices (let’s say around 5%), but that’s still a significant figure in a housing market the size of Auckland’s. And no-one, certainly not Labour, is saying it’s the silver bullet, or the only thing that needs to be done, quite the opposite.

    I’d rather this Government, or the next one, whoever that is, has a bunch of small mallets to try and bring this inflationary beast under control slowly – 5% at a time – rather than a massive sledgehammer that will see oldies lose retirement investments, first home owners lose their homes etc.

    EDIT: What Edd says^^^ +1

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  20. wikiriwhis business (4,019 comments) says:

    They don’t call Howick Chowick for nothing

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  21. wikiriwhis business (4,019 comments) says:

    This is what corporatism is doing to the world as it takes out honest trade and competition in the guise of capitalism

    Capitalism is dead: American poverty to go mainstream as 80% predicted to feel economic insecurity

    http://dangerousminds.net/comments/capitalism_is_dead_american_poverty_to_go_mainstream

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  22. bhudson (4,740 comments) says:

    @edd,

    And if those 3.6% of houses were in the $800k+ bracket, that would provide 0% benefit for first home buyers (the group Labour and the Greens claim to be supporting.)

    And 5 of those ideas would bring 5 x 0% benefit…

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  23. nostrils (53 comments) says:

    “They don’t call Howick Chowick for nothing”

    and have done for thirty-odd years….

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  24. lastmanstanding (1,297 comments) says:

    flipper you are right about Council fees. I rebuilt and increased the size of a deck on my house. Labour $5K Materials $8K Council permits consents etc etc $10K.

    That’s part of the housing problem in Auckland. Loopy Len and Pathetic Penny raping and pillaging and wasting money on choo choo trains.

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  25. dc (144 comments) says:

    Now remember this is based on actual sales data.

    No, it’s based on a non-random survey of the industry with a big vested interest in maintaining high sales prices and transaction volume. Are we really trusting real estate agents to tell the truth now?

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  26. SHG (316 comments) says:

    Do those figures include property purchased and/or owned by NZ citizens living overseas?

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  27. Kea (12,841 comments) says:

    We can question the integrity of the statistics, but it is still a long way from an Asian invasion. The figures should be considered against the background of Kiwis heading over seas.

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  28. davidp (3,581 comments) says:

    We know David Shearer continues to invest his own money overseas instead of in NZ. But did he ever own a home in the US? Or Somalia, or wherever he used to live? Does he still own it now? It wouldn’t surprise me if a man who needs to maintain a US bank account so he can scarper back to the UN once his colleagues roll him might keep a home in New York for the same reason.

    Does Russel Norman own any property in Australia?

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  29. dime (9,980 comments) says:

    At least the Chinese are paying top dollar. South African are painful to deal with.

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  30. hj (7,033 comments) says:

    NK (609) Says:
    July 29th, 2013 at 1:34 pm
    Tony Alexander says immigrants don’t put house prices up ; returning Kiwis do.
    ………………..
    he said that in response to the Savings Working Group; he represents vested interests.
    http://tonyalexander.co.nz/regular-publications/newspaper-column/impact-of-migration-flows-on-nz-house-price-inflation/

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  31. Keeping Stock (10,342 comments) says:

    The other stuff-up that Labour has made is that the FTA with China prohibits New Zealand banning Chinese investment. Who signed the FTA? Why, it was LABOUR Prime Minister Helen Clark :D

    http://www.stephenfranks.co.nz/house-buying-ban/

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  32. hj (7,033 comments) says:

    Tony Mouthpeice Says:
    “The survey gives no indication of the housing market easing up and suggests strongly that prices will
    continue to rise and that the shortage will worsen. To counteract this shortage is not easy as it requires
    much stronger growth in new house supply.
    Yet the number of consents issued for the construction of new
    dwellings was not only well below the ten year average of 22,000 in March at 17,397, that result was down
    from February’s 17,481.

    …………………
    whereas Westpac say land sulpply is a red-herring.

    http://www.interest.co.nz/property/65294/westpac-economists-say-expectation-future-profits-not-supply-shortage-main-reason-soa

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  33. Redbaiter (9,098 comments) says:

    “You are a socialist and want to control the lives of others in accordance with your own agenda.”

    You are such a pathetic person Kevin. No wonder Key let you go, your comprehension skills are atrocious. Nowhere did I ever say I agreed with martinh, and in fact I don’t. I was merely applauding his polite and persistent manner of discussion, something that a bitter and twisted smug and arrogant little Nat Party prog like you could learn a lot from.

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  34. hj (7,033 comments) says:

    However, Alexander said while not significant now, in the next two to five years New Zealand will see more foreign buyers enter the market.

    He said New Zealand’s engagement with China in particular is going to grow.

    Alexander said he believed “there will be an upward trend, especially out of China, because there’s simply so much growth in wealth there”.

    China is New Zealand’s second largest trading partner, and Prime Minister John Key has been encouraging the link between the two nations.

    Key visited China earlier this year, where he re-signed a visa fast track scheme for Chinese business people travelling to New Zealand, and pushed for a boost in tourism numbers to New Zealand.

    Alexander told ONE News: “The number of Chinese migrating to New Zealand is rising, their desire to get assets outside of China is rising, we’ll see more foreign purchasing and because I believe New Zealand house prices for domestic reasons are going to go higher I do think we need a foreign house purchase policy.”

    Alexander is calling on the Government to adopt Australia’s foreign ownership model, which dictates that anyone without permanent residency must apply to buy property and can only purchase ‘off the plan’ new builds or build their own houses.*

    This way they contribute to housing stock and do not put pressure on existing stock, Alexander said. They must also sell property if they move overseas again.

    The Green Party has signalled Hong Kong’s housing policy as being a successful model. Last year Hong Kong placed a 15% tax on properties bought by foreigners instantly cooling the market, which had become the most expensive in the world.

    First home buyers accounted for 24% of house sales, while investors accounted for 19%.

    He said those figures are consistent with the results in March.
    http://tvnz.co.nz/national-news/housing-market-not-flooded-overseas-buyers-economist-5440103

    * you mean like Shearer’s popular policy?

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  35. Kea (12,841 comments) says:

    I do not accept there is, or ever was, a housing shortage. No one is living on the street because there is no house to buy. There are plenty of houses for sale, even in Auckland. It does my head in that so many people parrot this bullshit. People seem unable to detatch themselves from their own self interest in the property market and think logically.

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  36. hj (7,033 comments) says:

    Good to see a hinge point forming: rent-seekers v’s marginalised.
    Open Border dreamers and realists.

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  37. Ross12 (1,432 comments) says:

    Damien C @ 2.02.
    As I understand Shearer , the Aussies will be exempt , under the China FTA it cannot apply to the Chinese ( see Steven Frank’s blog) , if the UK said “boo” then they would be exempt –who of note, is left ??

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  38. edd (157 comments) says:

    @ bhudson

    If the 3.6% were in the $800k+ bracket I don’t think any first home buyers would be complaining now would they. No it’s all the entry level properties that are getting bid out of reach. The bottom rung of the ladder is getting higher and higher every year.

    I personally wouldn’t buy a house in this market. Prices are well beyond fundamentals and the political risk is growing by the day. Some new government could unleash a flood of supply without too much trouble at all and even at 20% deposit people could still find themselves underwater….

    But I like to invest for the future, not the past, maybe you think different. Maybe you think, prices have gone up and up and up, I’m going to buy and get in on the free money fest. Good luck with that and make sure to avoid the avalanche.

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  39. OTGO (557 comments) says:

    So the Labour Party want to stop anyone other than Kiwis or Aussies owning houses and the Mana Parrty want to give free loans to Maoris to buy houses. Heaven help us if either of these parties either jointly or collectively ever become a part of the government. The type of power that these idjits would have over us if elected is frightening.

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  40. hj (7,033 comments) says:

    Alexander is calling on the Government to adopt Australia’s foreign ownership model, which dictates that anyone without permanent residency must apply to buy property and can only purchase ‘off the plan’ new builds or build their own houses.*

    ………
    Isn’t that Shearer’s policy?
    Hmmmmm?

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  41. thedavincimode (6,800 comments) says:

    Yuk. I don’t want to live in any of these. Besides, I drive to work – why should I catch the train?

    Urgh, I’m better than that

    Eww, and anyway, we’ll need the fourth bedroom in 10 years time and then a rumpus room when the kids grow up, plus parking for their cars

    Oh good heavens, what would our friends who have mortgaged themselves up to the eyeballs say ? We’d be outcastes!!

    This is more like us. We’ll be handy to all the good schools. Close to the city or Parnell so we can just pop up the road for latees and Sunday brunch. And we’ll have such faaaaabulous parties! We’ll be sooo popular :)

    But, waahhhh . :sad: .. I can’t afford it because of those bastard chinks … . :mad:

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  42. nickb (3,687 comments) says:

    Sums it up pretty well davinci.

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  43. dime (9,980 comments) says:

    “No it’s all the entry level properties that are getting bid out of reach.”

    please allow me to reword this statement

    “its the entry level houses in aucklands most desirable suburbs that are becoming out of reach”

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  44. bhudson (4,740 comments) says:

    If the 3.6% were in the $800k+ bracket I don’t think any first home buyers would be complaining now would they.

    Actually they would still be complaining, because the non-resident buyers are not the cause of property price increases.

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  45. bhudson (4,740 comments) says:

    Alexander has said he does not agree that foreign buyers are to blame for Auckland’s soaring house prices but that a debate on foreign ownership restrictions probably should be had.

    http://www.stuff.co.nz/business/money/8816169/Call-for-foreign-ownership-debate

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  46. Nostalgia-NZ (5,220 comments) says:

    I think there is a big part of the facts on this argument missing. A popular view is that foreigners are ‘buying’ a lot of NZ houses sand thereby pushing prices up. First of all that is the free market, secondly the anecdotal view is not necessarily accurate. I was involved in two property sales in the last 12 months as a seller both were to ‘foreigners.’ That is in fact people whom I know were foreign born but not if they were NZ citizens at this point. That is probably where a lot of folks run away with the idea of ‘foreign’ owners which DPF’s figures don’t seem to bear out. So it seems like 2 different arguments are going on, one which is pretty distressing for NZ residents or foreign birth and the other which presents New Zealand as a place where foreigners can’t buy property of the basis of a sum total of around 3% of sales.

    What ever the proposed changes of Labour are, I haven’t really followed them, but it seems crazy saying naturalised NZers, or those intending to become citizens can’t own property for the sake of 3% of the sales which are not clearly categorised. Saying that you will own property and never live here can hardly be a certain thing, even if those sales could be argued to be effecting prices, the argument must be ‘distilled’ with the premise that those in the 3% category are not normal judicious buyers with their money. Something is haywire here.

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  47. muggins (3,787 comments) says:

    It would appear that the main problem with rising house prices is in Auckland.
    Where I live the house prices are still not back to their 2007 levels.
    But something has to be done about Auckland house prices and I reckon the Labour party policy will get some support from the public, regardless of how much difference it will really make. I don’t know whether it will help Labour much in the polls.

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  48. hj (7,033 comments) says:

    Concerns about air pollution in China are soaring and people are talking more and more about migrating or at least getting their children out of the country. There are three implications for NZ from this suddenly developing trend which adds to developments stemming from rising incomes and increasing ability to get overseas.

    First there is a big opportunity for NZ tourism to shift the average length of visit of Chinese holiday-makers from 6 days to twice that by focussing on our wonderful air quality. The longer people are in NZ the greater the time they can breathe without coughing or stunting the growth of their children.

    Second, the attraction of sending one’s child overseas to study will be soaring and that could boost Chinese student numbers in NZ anew. Already Chinese students bring in over $1bn to our economy and account for near 27% of the total numbers from offshore studying here.

    Third, if student numbers rise that will mean more Chinese parents looking to buy houses for their kid to occupy. In addition more will be looking to migrate here and that will again add to housing market pressure.

    These developments therefore just add to the case for NZ to develop a policy regarding foreign buying of NZ residential property. At the moment there are no rules for city purchases.

    – See more at: http://tonyalexander.co.nz/regular-publications/bnz-weekly-overview/housing-market/pollution-in-china-will-push-nz-house-prices-higher/#sthash.OAWADRpu.dpuf

    and why do they have air pollution? because God loves them so much he made a lot of them. This represents a “great opportunity” for NZ property investors and developers…. who will of course have bolt-holes in Rodney etc.

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  49. hj (7,033 comments) says:

    muggins (2,506) Says:
    I was just listening to The Panel:

    Mae Chen was cold on the idea (for some reason)…..
    at the end Jim concluded “oh, well”… (“oh well” he said) [exhaling] and he continued with: “there must be votes in it (“must be votes in it). So it looks likely NZ’rs will be gratefull that something (something) is being done so they can afford to live in their own country, presumably those votes will come from 1. National 2. Act 3. United Tobacco?

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  50. hj (7,033 comments) says:

    John Key, John Banks Peter Dung ***men of the people **** (Property Investors Federation).

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  51. hj (7,033 comments) says:

    Given that I have a history of placing emails regarding the housing market in this section I see little wrong with including this particular email. For your guide my reply ran like this.

    “Hello xxxx Many thanks for your enquiry. My position on the housing market in New Zealand is that the Government should adopt the Australian foreign purchase rules whereby foreigners may only purchase a newly built house and not an existing one and foreigners may only purchase up to 50% of the units in a multi-unit development. I have no other policy position. My comments regarding banning foreign purchases were in the context of listing changes which could be implemented if New Zealand society decided that highest priority should be given to housing affordability and all legal measures should be taken to improve affordability. I consider none of the eight suggestions I listed to have much chance of ever being implemented and gave no indication as to which I support or oppose. As noted, I support only adoption of the Australian system.

    My survey of real estate agents indicates about 20% of dwelling sales go to people located in China. There is no information on foreign purchasing of houses in NZ beyond that survey and much more work needs to be done before one can say definitively what the actual proportion is. More than a simple survey is needed for that. There is no information on the proportion of the housing stock currently owned by foreigners and certainly zero information on any of the characteristics of any of the foreign groups buying houses in new Zealand.

    – See more at: http://tonyalexander.co.nz/regular-publications/bnz-weekly-overview/housing-market/chinese-interest-in-nz-housing/#sthash.939e8aqJ.dpuf

    Harcourts Shanghai must be doing O.K

    “Chinese economy we all know about…
    Chinese government says it’s time to grow offshore…..
    Let’s take a good selection of New Zealands “products” over….
    “We’re all New Zealanders, we all love the country so I think it’s healthy for us to have the debate and make the right decisions for our country…. but hey!…. young people coming through see it as “our planet” rather than “our country”
    So let’s flog as much as we can off before there’s a backlash and we are hung- drawn and quartered my the plebs!

    http://static.radionz.net.nz/assets/audio_item/0011/2385074/mnr-20100824-0842-More_than_800-million_dollars_worth_of_property_on_display-m048.asx

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  52. kowtow (8,522 comments) says:

    Mai Chen was discussing this on Jim Moras’ just now. She said that at the moment Aotearoa,formerly known as New Zealand, is 19% Asian,and projected to go to 1 in 3 in the not too distant future!

    That’s what needs discussing. Who voted to overturn this country’s demographics?

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  53. Weihana (4,557 comments) says:

    thedavincimode (4,954) Says:
    July 29th, 2013 at 3:29 pm

    This is more like us. We’ll be handy to all the good schools. Close to the city or Parnell so we can just pop up the road for latees and Sunday brunch. And we’ll have such faaaaabulous parties! We’ll be sooo popular

    I note your link to the 265k property on the very outskirts of town 20 miles from the city centre. 3 bedroom and 1 bathroom on a subdivided section (1/2 of 933m2 = 466.5m2).

    Meanwhile, for 189k USD (233k NZD) you can get 4 bedrooms, 2 bathrooms, 10 miles from the city centre of Austin, TX on a full 918m2 section.

    http://www.realtor.com/realestateandhomes-detail/11906-Hornsby-St_Austin_TX_78753_M78351-89268?source=web%2cweb#modal_PhotoGallery

    For the same distance from the city centre as the Austin, TX property you would be living in somewhere like Otahuhu. Here we have a property on Hutton Street for 459k. Again a subdivided section. 3 bedroom, 1 bathroom.

    http://www.realestate.co.nz/2075767

    Parts of Hutton St look very poor… like a long line of old units with laundry hung from every corner of the outside building. Not judging the people who live there, just wondering how the house across the street can be worth almost half a million dollars.

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  54. hj (7,033 comments) says:

    kowtow says:

    That’s what needs discussing. Who voted to overturn this country’s demographics?
    ….
    and what will everyone do for a living apart from require more and more population growth?

    Rapidly growing cities benefit from scale economics. As a city grows, it spreads the fixed costs of providing services across more units, thus lowering unit costs and enabling taxes to stay low. This is doubly true as cities spread into undeveloped “greenfields,” where there are few legacy costs. This can make cities look well managed when in fact they are simply benefitting from growth.
    The real question is what happens when the growth cycle ends and unit costs either flatline or start going up. Can the city find sustainability demographically, economically and fiscally without growth as a fuel?
    //
    Cities that are benefitting from strong growth have the wind at their backs. But it would be naive to assume that they must be doing something better than everyone else just because of that. Places like Chicago and New York were the Charlottes and Houstons of their day, right down to their laissez-faire economies. But they eventually hit the limits of growth and had to wander in the wilderness while trying to reinvent themselves.
    This is the mark of a great city. A London or a New York can sustain and reinvent itself across growth cycles. Too many places, particularly our Rust Belt cities, have not met this challenge. When the economy shifted and growth ended, they went into a decline that has not yet abated.
    Rather than making today’s Sun Belt boomtowns smug, this should serve as a cautionary tale. Even the most prosperous and seemingly invincible cities can be undone when trends shift and growth fades.

    http://www.governing.com/blogs/view/col-charlotte-cities-illusion-growth-economics.html

    John Key, John Banks, Don Brash, Dung .. would all have thought of this of course.

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  55. JC (958 comments) says:

    muggens,

    “I don’t know whether it will help Labour much in the polls.”

    It certainly won’t help in the Asian and British migrants sector and it bloody well wont to the 50% of NZers living in regions that are depopulating where house prices are expected to fall and become unsaleable.

    http://www.interest.co.nz/opinion/65592/why-regional-towns-and-cities-are-hit-much-harder-ageing-and-what-it-means-councils-ra

    “Jackson detailed what ageing would do to the structure and size of their communities in the decades to come, including how many provincial towns and cities would become ‘top heavy’ with pensioners, few working age people and even fewer children. She described how an ageing population and both internal and external migration would mean almost every Territorial Local Authority (TLAs) outside of Auckland and Christchurch would not only see their populations age dramatically, but that many would be declining by the middle of the century.”

    You want to see inequality? how about a home in Waikato region worth $250,000 and the same home in AK worth $600,000.. young families will have to bail just to get or keep equity.

    JC

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  56. wat dabney (3,775 comments) says:

    Good to see a hinge point forming: rent-seekers v’s marginalised.

    Let’s be clear: it it those calling for government restrictions who are, by definition, rent-seekers.

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  57. thedavincimode (6,800 comments) says:

    Weihana

    Is 20 miles a long way for a city 50 odd miles across? Are you suggesting that Austin Texas is a better basis of comparison than Sydney? Have you noticed any slight geographical differences between Auckland and Austin? For example, that one is plonked in a chunk of continent whilst the other is a piece of string divided by and surrounded by water?

    Anecdotally (by all accounts Shearer’s new standard for assessing the need for legislative intervention) I’m aware that people commute further across Auckland than that by car, or even change forms of public transport (bus to train). But that’s too hard. Best to get current home-owners to subsidise the greedy selfish weasels who aren’t prepared to do what generations have done before them; before cars and any even half-way reasonable public transport. Not just in Auckland either; across the country.

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  58. thedavincimode (6,800 comments) says:

    All moot anyway. Franks is reported as saying it’s in breach of our FTA. hilarious. LOL, look out for the dead man walking to say he would “re-negotiate it”. Good luck with that fuckwit.

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  59. hj (7,033 comments) says:

    Watt might like to live in Houston:

    But Glaeser notes that there are problems with Houston’s sprawl: It takes a large amount of energy to make the area’s humid, hot climate comfortable, and the city is built around the use of cars.

    “Houston is among the five worst American metropolitan areas, in terms of its carbon emissions,” he says.

    And he acknowledges that for people who are concerned with environmental issues, Houston presents a picture that is beyond dismaying.

    “I think horrendous wouldn’t be too strong a word,” Glaeser says.

    http://www.npr.org/templates/story/story.php?storyId=112896915

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  60. Tinshed (170 comments) says:

    As usual, The Civilian proves itself the funniest and most pointed political commentary site with David Shearer tells Pakistani taxi driver that he can’t buy home. Brilliant.

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  61. martinh (1,257 comments) says:

    Im glad you take an agent based survey as the truth,
    Bulgaris said today, only allowing kiwis and Aussies would drop his sales by 50%

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  62. Warren Murray (311 comments) says:

    Unprincipled policy, perhaps, but might be good politics. It’s designed to woo Winston. Shearer will be hoping Chen is wrong.

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