National’s housing announcements

August 24th, 2014 at 2:54 pm by David Farrar

Their housing policy and social housing policies are linked.

John Key gives an example in his speech of how it might work:

Let’s imagine a couple are both earning $40,000 a year – they might, for example, be living here in South Auckland.

They’ve been in KiwiSaver for five years, and are looking to buy a first home that’s under the price limit.

Under our changes, they could together withdraw up to $29,000 from their KiwiSaver accounts, and get either a $10,000 or $20,000 HomeStart Grant, depending on whether they’re buying an existing or a new home.

In total, that means a deposit after five years of almost $40,000 – or almost $50,000 if they are buying new.

That would be enough on its own to get a Welcome Home Loan for a house costing up to $400,000 or up to $500,000 if new – depending, of course, on their ability to service the mortgage.

Our changes will give a lot more people the confidence that if they join KiwiSaver, and keep saving, they can put together a deposit on their first house.

It’s important to note that most of that deposit will be their own savings.

We want to help people into their first home, but they have to help themselves first.

I much prefer that to the Government borrowing $3 billion more per year to try and become NZ’s biggest property company!

All these changes I’m announcing today will take effect from 1 April next year, if we are re-elected.

Not too long after that, the first people to benefit from these changes will be unlocking the front door of their own home for the first time.

The new policy will cost $218 million over the next five years.

That’s a fairly modest cost compared of around $35 million per year compared to borrowing $3 billion a year.

The details of the changes are:

The package comprises three changes:
Replacing the KiwiSaver First Home Deposit Subsidy with a KiwiSaver HomeStart Grant, doubling the support for buying a new home and increasing the house price limits;
Enabling larger KiwiSaver First Home Withdrawals by including the member’s tax credit (meaning first home buyers will now be able to withdraw all of their KiwiSaver savings except the $1000 kick-start);
Expanding eligibility for Welcome Home Loans by aligning the house price caps with the new KiwiSaver HomeStart Grant.

“We are roughly doubling the number of people receiving a Government grant to buy a first home from 10,000 per year to 20,000 per year, and doubling the Government grant they are eligible for if buying a newly-built home,” Dr Smith says.

“The focus of this package is to increase the supply of new and to encourage companies to build homes in a price range affordable for first home buyers.

 “The house price limits for KiwiSaver HomeStart and Welcome Home Loans will be $550,000 in Auckland, $450,000 in Wellington, Christchurch and other similarly-priced housing markets, and $350,000 for the rest of the country.”

Currently, first home buyers are eligible for a grant of $3000 after three years in KiwiSaver, $4000 after four years and $5000 after five years. Under KiwiSaver HomeStart, this grant will double to $6000 after three years, $8000 after four years and $10,000 after five years for the purchase of a newly-built home.

The changes to the KiwiSaver First Home Withdrawal in enabling access to the member’s tax credit will increase the maximum withdrawal amount by $512 per year for each year a member has contributed.

The KiwiSaver First Home Withdrawal is limited to members buying a first home, who have been contributing for a minimum of three years. The KiwiSaver HomeStart Grant and Welcome Home Loans have additional criteria of people having an income below $80,000 for an individual and $120,000 for a couple, and the house being purchased must be below the regional house price limits.

I wasn’t at the campaign launch, but I underatand there were 2,000 to 2,500 people there making it the biggest political gathering in a few decades I’d say – and it was a Party meeting in South Auckland!

UPDATE: I hear the final count was 2,700!

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105 Responses to “National’s housing announcements”

  1. mjw (396 comments) says:

    Is that it? That was the big announcement?

    If Labour had released this policy, Bill English would have scoffed at it, and said that it would simply lead to higher house prices and higher interest rates. As it will.

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  2. tvb (4,430 comments) says:

    The dirty politics saga is sucking all the oxygen out of the campaign on events that took place several years ago. A few more meetings like this say Tauranga Christchurch Wellington and Whangarei and Hamilton and John Key will be on the way to an easy win. Remember last time National had the asset sales which were unpopular and Labour made that the centre piece of their campaign. Every time in the last 50 years a Labour Government has left a financial mess. They oppose every measure to get it right and make big spending promises and tax hikes.

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  3. Unity (588 comments) says:

    If they didn’t let in so many immigrants, we wouldn’t have a housing crisis i.e. not enough houses and now too expensive for the ordinary people starting out, let alone Mums and Dads who struggle. The job market is abysmal also. Not good after 6 years of National!!

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  4. Simon (728 comments) says:

    Bribing people with own money. Wonderfully retarded. 5 yrs of income tax on two lots of $40k is $60,000 worth of income tax. Just fuck off.

    John Key son of Helen.

    ” We want to help people into their first home, but they have to help themselves first.”

    No you dont lying clown otherwise you would slash income tax rates. How can they help themselves when they pay so much income tax.

    “Help themselves first “via Government mandated kiwi saver, My god what a statist cunt.

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  5. salt (133 comments) says:

    Incentivising the building of new entry-level housing stock, excellent idea. Hopefully some persuasion is also effected upon councils to remove some of the existing roadblocks to that kind of thing.

    Kind of wish they’d bump the income limits up a few grand too, but that’s just me being self-interested :)

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  6. holysheet (401 comments) says:

    If the oxygen is being sucked up by all the dirty politics, where did all these 2-2500 south auckland people come from?
    Give the public a chance to hear the truth from the leader JK and they will respond.

    I bet silent T will be saying sorry to all the liabore followers for not drawing this number at his pathetic policy launch last week.

    Am looking forward to the news to see how the liabore channels portray this event

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  7. Johnboy (16,651 comments) says:

    Out labouring the labourites! Oh God I fear for my country! :)

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  8. Johnboy (16,651 comments) says:

    https://www.google.co.nz/search?q=free+beer+tomorrow&tbm=isch&tbo=u&source=univ&sa=X&ei=L1j5U_iREY-A8gWlrYGQAg&sqi=2&ved=0CBsQsAQ&biw=1680&bih=916

    Free house’s. Next week! :)

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  9. nickb (3,687 comments) says:

    Well this is a huge disappointment.

    Instead of doing the obvious and fixing the crippling supply issue by making it easier for property developers to, y’know, actually build homes for New Zealanders, they have resorted to type and offered cynical election bribes that will make the problem worse by being inflationary and therefore driving up prices further.

    Pretty weak politics IMO. But then we all know National don’t really have free market credentials. If they actually did have good ideas coupled with the political will to sell them to the population they wouldn’t have to rely in Whaleoil all the time to pummel the other side.

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  10. nickb (3,687 comments) says:

    mjw and Simon – completely agree

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  11. NK (1,244 comments) says:

    A terrible policy for many reasons. In May, Bill English delivered a Labour budget, and now, four weeks out from an election, National keeps out-bribing Labour. This is the best example yet of why politicians should stop fucking around with Kiwisaver. Winston now wants students to access it to pay for their education. How many times have we heard that capital shouldn’t be going into unproductive housing, and yet this is exactly what this policy does. Sure, it’s not investment housing. Yet.

    I am slaving my guts out each and every day and week to now pay for someone to buy their first home. No one paid for mine, except me (and my wife). The cost of $218 million is probably about as accurate as the costings on the Green Party’s budget because the problem with using other people’s money is that you eventually run out of it, as Margaret Thatcher famously said.

    I hope all of you here give your party vote to Act in four weeks. Goodness knows this country needs a strong Act now. That party needs to speak out against this rubbish. I don’t expect Colin Craig to because he wants to steal your land too if you haven’t used it after five years. He also wants the for sale sign taken down. If that happened, there would be no $218 million to buy someone else a house.

    I’m really angry right now. Fuming in fact. This is shit and the National Party must know it.

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  12. mjw (396 comments) says:

    NK – I think ACT will just be compliant with this, won’t they? I don’t imagine they will offer any serious criticism. To me, the Conservatives look a better bet. I am a social liberal, so I disagree with the Conservatives on a a lot. But lord knows we need an injection of principled politics in this country.

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  13. Fisiani (1,039 comments) says:

    When the extreme right posting here are outraged and the Standard are outraged it seems that the proper balance has been struck once again by the masterful John Key. The simple message is join Kiwisaver for just five years and you will qualify for $15-20,000 and be able to buy a home.

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  14. MikeG (425 comments) says:

    “Let’s imagine” that’s very true – a couple of questions about the example:
    How would the couple manage to have $29,000 in Kiwisaver?
    How could they service a load of $400,000+

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  15. Johnboy (16,651 comments) says:

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  16. salt (133 comments) says:

    Cue the baby boomers whinging about how they weren’t helped out buying their first home, something something interest rates, something something we didn’t have flash phones/tvs/internet connections like young people these days.

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  17. Nukuleka (334 comments) says:

    Surely it is time to start moderating the posts here for acceptability. Whoever Simon is he is an unpleasant and foulmouthed/fingered cretin who doesn’t need to inflict his foulness upon the rest of us. Go and have cup of tea and a good lie down Si!

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  18. Johnboy (16,651 comments) says:

    As long as it don’t affect us righteous cussers Nukuleka! :)

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  19. NK (1,244 comments) says:

    @fisiani, I didn’t know there was a proper balance with Socialism. In fact, John Key said Working for Families was communism by stealth. But I guess Communism-lite is OK, as long as Labour isn’t in power, aye.

    That’s the problem with the Nats these days, they’ve become besotted with keeping Labour out. This is the result. But hey, what’s another $218 million. Just put it on the bill, Bill.

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  20. RRM (9,933 comments) says:

    Mixed feelings about this – we used our Kiwisaver funds as our first home deposit [NK et al - no, no deposit subsidy, only our own money, just so you know! ;-) ]

    Kiwisaver encouraged/enabled us to put a decent amount of cash into a decent performing managed fund, and build up the deposit for our house within a few years, without even really noticing, and without it I’m not sure we’d be in our own home today.

    So even though I am a National / Act voter now, I still want to put a little framed portrait of Dr Cullen up somewhere in our house :-P

    But is this initiative really going to help anybody, or will it just push up the value of the cheapest houses by $[whatever the subsidy amount is]?

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  21. RRM (9,933 comments) says:

    And on a different note – why would anybody who already owns property, be opposed to this?

    Anything that improves your property values by boosting the number of buyers trying to get into the market MUST be bad, huh?

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  22. Fisiani (1,039 comments) says:

    The message to the largely Pacific audience at The National Campaign launch was Party Vote National and you will soon be able to own your home. Home owners predominantly support National and renters support Labour. This is a great policy.

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  23. NK (1,244 comments) says:

    It’s a great policy for those in South Auckland wishing to buy a home there. It’s a terrible policy for everyone else because everyone else is paying for it.

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  24. Johnboy (16,651 comments) says:

    If it buy’s the election I suppose it’s acceptable! :)

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  25. wiseowl (899 comments) says:

    Cut immigration.
    We seem to have a secret deal among politicians that no-one is to discuss immigration.
    We don’t want this level of immigration and there are not the jobs anyway.
    And we don’t need thousands more in the provinces.
    This is just a version of Labour type policy.
    Such a let down.

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  26. NK (1,244 comments) says:

    Wise owl, immigration numbers have been poor for years. We have been losing more than we have been gaining. Only in the least few years has this reversed. And even then, it’s just a slight net gain.

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  27. dog_eat_dog (781 comments) says:

    Disappointed to see no major land reforms or changes to council development charges announced.

    I can see the point of the MUL system but you’d have to be a complete idiot to argue it isn’t a significant driver of the cost of land across the entire city.

    But sure, trust the same town planners that got us into this mess to get us out of it.

    This announcement needed to be more sweeping and more ambitious. It’s a start, but not much more.

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  28. mister nui (1,029 comments) says:

    Stupid, fucking stupid.

    Where did these numbskulls learn economics???

    All a first home buyers grant becomes is a first home sellers subsidy. It just further fuels the property market. Why not throw some petrol on the fire, clearly diesel hasn’t been enough.

    What happens is that 10k given to the first home buyer enables that first home buyer to now borrow more, as they have a larger deposit. They still end up buying exactly the same house, just for exponentially more.

    The only winners are home sellers and the banks.

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  29. Nostalgia-NZ (5,221 comments) says:

    Be interested to know what the number of couples who might be eligible for this. I have doubts about the income level being the ‘South Auckland’ average for such couples, then of that number who would already having the qualifying funds accrued in the next few years. This might sound better than what it in fact is, or worse than it seems depending on your point of view.

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  30. mister nui (1,029 comments) says:

    Actually, on reflection, maybe I’m the stupid one…. This policy isn’t about economics, or house supply, or home ownership etc. This policy is nothing but a fucking great bribe. End of.

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  31. Hamish_NZ (46 comments) says:

    Absolutely brilliant, we’ve been thinking of building our first home for a couple of years now, because then we get what we want and need for about the same as buying an existing house that’s at least 30 years old. This just makes it easier for us.
    We can buy the kit set for under $100k (everything bar the nails electrics and piping) including a double garage, the section for $130 – 150k and do most of the rest ourselves, with help from friends and family. Helps that the brother in laws a builder, and we’re both not afraid of hard work. Or we can get someone to build it to lockup stage and we do the internals. Sure it’s a basic house, but it’s new, suits our needs, won’t be damp or mouldy, and it will only appreciate in value. Always best to get in on the ground floor than buy something halfway through it’s life cycle.

    To be honest I’m not sure why more people don’t build their houses rather than buying old ones. Adds to supply, and really is just as easy and cheap as buying. A lot of our friends are doing it, and loved it.

    And Rotorua council has removed all development levies off new builds, so makes it even cheaper. If Rotorua can then all other councils can make the same choice. Just a matter of being pro growth vs stale.

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  32. Grendel (1,002 comments) says:

    From my experience the subsidy has not made a massive difference to the prices clients are paying, simply becuase not all buyers can get it, not all buyers use it and the vendor has no idea you are using it or not.

    To answer some of the other questions.

    would you have 29K in KiwiSaver after 5 years?

    after 5 years at 40K income (assuming you are on 40K the whole 5 years), you would have contributed $6000 yourself, your employer $4950 (after tax) and $2607 in tax credits. making a total of $13557 in contributions with no interest at all. so not unusual for 29K for a couple on 40K after 5 years. if you earned 60K during this, you would have $17907 before interest.

    would you buy a 400K home with a 40K deposit. i could probably swing that for you, but its probably at the high end.

    Do i have a massive issue with this policy? yes and no. i am not a fan of gummint bribes but on the other hand, you dont get anything unless you do something for yourself first.

    the only way to to get this grant is to contribute for 5 years into your own kiwisaver.

    also what is actually changing?

    the tax credit – all that is changing is that you can use it for your withdrawal, currently you cannot, but you still have it. to be honest, most people think you can withdraw this anyway, and are surprised to hear you cannot, so this just makes the perception reality.

    the subsidy is increasing, if you buy a new home.

    i will be interested to see what they mean by a newly built home, as i can tell you that doing a build for people on low deposits sucks. so most people will be buying and settling once its completed (a total turnkey contract at finish). they are pretty rare, so there i will be interested in what the actual rules are here.

    will it make a massive difference in people buying homes? yes and no. the banks do not treat the subsidy as savings, so you need to still get to 5% or more with your kiwisaver etc, so it wont start a flood.

    i think it will just help focused people get over the line a bit sooner than they would otherwise have. i dont expect to be drowning in that many more clients using their Kiwisaver for their home purchase, than are now.

    i agree with RRM, KiwiSaver is the best thing Labour did in decades.

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  33. Chris2 (766 comments) says:

    In 1984 I managed to buy my first home with the help of a Government Home Ownership scheme. You saved a certain amount for three years into a specific savings account (with no withdrawals allowed) and that, apart from becoming your deposit, qualified you for a (I think) a $3,000 suspensory loan from the Government. You only had to pay the loan back if you sold your home within five years.

    It was a great policy back then and without it I would have struggled to buy a house. Back then the banks would limit how much they loaned you based on your salary. I don’t think mortgage payments could exceed a third of your net income. Oh and interest rates back then were 16-22%, so we all had 2nd and 3rd mortages.

    It was a great policy then, and will be again, so long as people commit to saving a decent deposit.

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  34. lolitasbrother (702 comments) says:

    Hugh Pavletich, come in here,

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  35. Hugh Pavletich (225 comments) says:

    NATIONAL PARTY
    FIRST HOME BUYER GRANTS SLAMMED

    The first home buyers grants announced by Prime Minister John Key at the launch of the National Party Campaaign should properly be regarded as a Land Speculators Welfare Scheme … paid for unnecessarily out of young first home buyers savings and by excessively taxed taxpayers.

    This is a cynical attempt by the National Party to buy votes at others expense.

    It only fuels housing inflation.

    It is likely the Reserve Bank will need to respond by lifting deposit requirements further and increasing interest rates.

    This will in turn lift the $NZ dollar, damaging the export sector further.

    So far this year, the dairy sector has taken a 40% hit in prices … the logging sector a 50% hit.

    New Zealand economy is extremely vulnerable (refer … New Zealand’s Bubble Economy Is Vulnerable and China: Big Bubble Trouble ) .

    With this cynical approach to the housing issue, Mr Key is punishing our exporters as well, by not allowing the $NZ to adjust to these dramatic price falls.

    This will cost jobs … and risk putting vulnerable exporters to the wall … unnecessarily.

    The National led Government is well aware the housing problems are impediments to affordable new supply.

    Deputy Prime Minister Bill English made clear at the major October 2012 Government Housing Announcement, that the focus must be on …

    *land supply
    *infrastructure financing
    *process
    *construction costs

    This was followed up with the Housing Accords legislation … and weak Accords entered in to with a number of Local Authorities by Housing Minister Dr Nick Smith.

    All talk and no action.

    The National led Government promised some 6 years ago in the lead up to the 2008 election campaign that it would deal with the impediments to affordable new housing supply.

    Soon after, then Housing Minister Phil Heatley made this clear at the time of the release of the Demographia Survey early in 2009. ( refer … Bringing better balance to the housing market ) .

    Prime Minister “can kicker” John Key has always been “flaky” on housing (refer Housing: Mr Key – Get on the Programme ).

    Mr Key is more interested in looking after the interests of Land Speculators and engaging in Crony Capitalism (refer … refer YouTube Video … CRONY CHRONICLES: I WANT TO BE A CRONY … https://www.youtube.com/watch?v=2aO9tA5DWJM&feature=player_embedded ).

    The problem for Mr Key, is that the public can see through his cynical Crony Capitalism.

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  36. kowtow (8,524 comments) says:

    Sorry Mr Key, economics 101. Grants/subsidies are a simple transfer to the builders / developers. Prices go up,nothing achieved.

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  37. Johnboy (16,651 comments) says:

    How do I get to be a Crony? :)

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  38. ShawnLH (5,285 comments) says:

    “The problem for Mr Key, is that the public can see through his cynical Crony Capitalism.”

    Oh really? And the polls showing that are…..???

    Face it, he has won two elections and looks on track to win a third. So “the public” obviously means you and perhaps your friends, and nothing more.

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  39. Johnboy (16,651 comments) says:

    Hugh has a Huge circle of friends! :)

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  40. ShawnLH (5,285 comments) says:

    “When the extreme right posting here are outraged and the Standard are outraged it seems that the proper balance has been struck once again by the masterful John Key. The simple message is join Kiwisaver for just five years and you will qualify for $15-20,000 and be able to buy a home.”

    Totally agree. And it’s a policy consistent with genuine conservatism, as opposed to the libertarian economics promoted by some on KB which has nothing at all to do with conservative philosophy.

    Widespread property ownership is important for family well being and stability.

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  41. Grendel (1,002 comments) says:

    Sorry Hugh, i get that you are really clever, but please explain how 10K (max) more on a deposit for first home buyers, if they happen to buy a new home is doom and gloom?

    I can tell you from actual experience, that the subsidy helps people usually have a better deposit for the same house, or rarely get over the line for minimum deposit. it does not make that much difference.

    should national also be looking at RMA reform and making it easier to build property? yes, but this is not a bad thing. its also not a good thing. its a thing that will help some, and be irrelevant to others.

    most of my clients tend to average (as a couple) 7-8K subsidy, it is very rare to get people who both have 5 years qualifying (its a bit of a nightmare to get all 5 years), more common is both at minimum.

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  42. Hugh Pavletich (225 comments) says:

    Tut tut National Party Sheepies !

    Are we supposed to applaud blatant vote buying (at our expense) and Can Kicker Key engaging in Crony Capitalism with his Welfare Scheme For Land Speculators ? Really ?

    Go check out the Principles Of The National Party … if they are still there.

    Be brave. It is not a criminal offense for National Party members to … um … THINK !

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  43. tvb (4,430 comments) says:

    Corkery ruined the launch of the Internet Mana campaign. Good thing too. They are promising 100,000 jobs. What rot.

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  44. Paul Marsden (998 comments) says:

    How about just stop taxing us to kingdom come….via PAYE/GST/ taxes on rates/fuel/ ACC and the like, and make more land available to (Auckland) for development? I had a chat with one of my employees (a family man with x 5 children) the other day and told him he worked x 3 months of the year as a slave, paying taxes to the Govenment. He was gutted to learn that, to say the least.

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  45. Colville (2,272 comments) says:

    I like this bribe.

    It is a bribe to the end of the voting spectrum that Nat isnt strong in and it sucks people/money into Kiwisaver where a lot of people would have said wots the point?

    All in all it could have been a lot worse.

    Edit. Hugh can say whatever her likes (and will no doubt) but developers will always make money off houses, cronys or not. Land banking has always and will always work. they aint making any more land!

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  46. Hugh Pavletich (225 comments) says:

    I hope you all enjoyed the Crony Capitalism video above. It’s a ripper !

    Check out too the superb Andrew Atkin THE REAL DEAL poster …

    http://2.bp.blogspot.com/-Wvy3jZaQ3rs/UTEmx-GDJ-I/AAAAAAAAAXE/mA3sBLWlMho/s1600/the_real_deal.JPG

    In rough terms they are currently paying at least 2.5 times more on the fringes of Christchurch for new starter stock … some 3.5 times plus more in Auckland.

    They should be spending no more than 3.0 times their annual household income to house themselves, with sensible mortgage loads of about 2.5 times. What is clever about mortgage slavery and burning out their retirement savings … unnecessarily ?

    Why don’t you guys give Mr Key a hard time uinstead of me ? He is the one who deserves it, letting the side down with this cynical and blatant election bribe.

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  47. EAD (1,128 comments) says:

    Is there any further sign of just how far left this National Party is?

    Is there no end to the National Party’s meddling in free markets?

    Have they ever found a solution that involves less government interference and meddling in private affairs?

    Where are they going to conjure up all these “home-start” grants from when we’re already in massive debt?

    The policy is in effect a subsidy to house builders and existing home-owners. Kiwisavers are being given grants towards first deposits in order to help them pay prices that were otherwise unaffordable, allowing new build properties to be sold for a price greater than the undistorted market would have set. This policy is in effect a double whammy – it adds to the governments debt while leaving the housebuyer in exactly the same amount of debt as before.

    At want point do National party supporters say, “this is not the party who align with my beliefs?” I would expect such statist solutions to be implemented by the Greens or the Labour but not by a party from the so called “right”

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  48. Hugh Pavletich (225 comments) says:

    Colville … with all due respect you do need to read these closely …

    New Zealand Lifestyle Blocks: Planners Sprawl in Overdrive | Scoop News

    http://www.scoop.co.nz/stories/BU1407/S00961/new-zealand-lifestyle-blocks-planners-sprawl-in-overdrive.htm

    Residential Property Speculators Days Numbered | Scoop News

    http://www.scoop.co.nz/stories/PO1408/S00329/residential-property-speculators-days-numbered.htm

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  49. Dead Earnest (160 comments) says:

    Hugh old chap, I’ll tell you a little secret.
    You are right and John Key agrees with you. BUT what John Key knows (and you seem to have lost sight of) is that he has got to win this election or NZ (that’s you and me and 4.2 million others) will be become an economic basket case, run by an assortment of social democrats, marxists, maori radicals, environmental activists and a psuedo-femenist.
    In a democracy – which as Winston Churchill explained is the wost of all possible forms of government apart from every other form of governmnet- you have to be pragmatic or face electoral oblivion.
    The option in this case is too scary to think about!!

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  50. EAD (1,128 comments) says:

    I should of course have added that this is the Hegelian Dialectic at work – “thesis, antithesis, synthesis”, or “problem, reaction, solution”

    http://realnewsaustralia.com/2013/08/09/the-hegelian-dialectic-and-its-use-in-controlling-modern-society/

    Step 1 – Government creates the problem of high house prices by
    -increasing demand (mass immigration an overseas sales) and
    – restricting supply (residential zoning laws) and
    – increasing the availability of credit by setting interest rates far below market rates (OCR). NB: A free market for interest rates would be one where the borrowers would be willing to lend to a housebuyer at a freely determined rate. The OCR is not a free market rate – do you think an elderly person with a lifetime savings would loan $550,000 to a 20 something at 3.25% interest for a 30 year loan?!?!?

    Step 2 – The Government then has a reaction from the populace that they “must do something” to fix the problem of high prices which were caused by the government in the 1st place!

    Step 3 – the progressive Government having caused the problem, then offers a solution which in this case is direct government financing of home purchase. VOILA! The sale and purchase of a house which was previously a purely private matter, now has the grubby hands of the state involved.

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  51. WineOh (630 comments) says:

    We have suffered 5 years of significantly depressed volumes of house construction. This is for three reasons:
    1. A significant portion of development companies and developers went broke, lost their shirt in speculative construction projects based on overinflated expected prices.
    2. A large portion of the 2nd tier financiers went broke with the collapse of the credit crisis. The finance companies were the ones funding deals that the banks wouldn’t- and offering mezzanine finance to support funding the banks were providing.
    3. The NZ recession meant that more people were uncertain about their financial future, and thus not willing to commit a risk to building house prices.
    4. Building prices, council development contribution costs, and land prices have stayed stubbornly high.

    Now with positive net migration, we have an increasing demand on our housing – more people need more houses and the construction market hasn’t kept pace. Thus the price goes up for those who have the cash to buy.

    This new policy doesn’t really address the majority of the root causes of the housing shortage, but certainly dangles a big carrot in front of potential new home buyers to BUILD a house instead of buy an existing one. This should drive down prices for existing homes, not increase it. Why would I buy an existing recently constructed house for $400K if I can build one myself for $380K net of the government contribution?

    It is said that property developers are the natural enemy of property investors… that is the fact that tight supply keeps prices high. An increased supply of newly developed properties should moderate house price increases.

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  52. Inthisdress (280 comments) says:

    I like it. It incentives young working couples to get a tangible reward for their work.
    I’d like it regardless of who thought of .
    instead of ignoring those who work hard, settle down and have kids, it offers some hope and encouragement.
    If people wish you belly-ache that’d shame. Surely the prime job of a responsible government is to make their country attractive to the young and productive.
    Good one.

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  53. tom hunter (4,895 comments) says:

    I much prefer that to the Government borrowing $3 billion more per year to try and become NZ’s biggest property company!

    And what about the future borrowing that will be needed to supplement all those depleted Kiwisaver funds when they have to start paying out for retirement – the purpose for which they were originally designed?

    I’m sorry but this is like the US government promising ever more subsidies to cope with rapidly rising college education costs. It’s not fixing the root cause of the problem – in this case that the cost of housing, especially in Auckland, has been rising faster than incomes for many years now.

    This is a classic case of the marketplace prices telling you something – in this case that land restrictions and the cost of building materials are pushing up prices well ahead of the incomes that pay for it – only to generate the classic NZ government response: don’t worry, we’ll help you pay for it. And in this case by aiding you in digging into what was supposed to be your retirement savings.

    Oh don’t worry National. You’re going to win this election. You’re vastly more competent at Left-wing policies than the Left wing.

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  54. Redbaiter (9,106 comments) says:

    “You’re vastly more competent at Left-wing policies than the Left wing.”

    Perfect.

    I told you guys once, and I’ll tell you again.

    Banking on Helen Key and the Nats to save NZ is the false hope of all false hopes.

    You may like him in a Woman’s Weakly type way, but as a politician, he’d be better off leading Labour.

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  55. NK (1,244 comments) says:

    Gee, the National Party puppets on this site can’t see the wood for the trees.

    When Labour bribed students in 2005 it was decried by the Nats as shameless and a disgraceful bribe. But when National bribes the lower and middle class with my money (because I own a house so can’t take advantage of the “subsidy”), it appears to be described as “smart politics”.

    I don’t want to hear anything from my National Party mates when Labour increase the $20,000 subsidy to $40,000 in a few years. Because I’ll throw it back at ya.

    And finally, I thought the Muldoon days showed subsidies made the country bankrupt. Oh well, I guess it’ll become someone else’s problem in a few years and John Key will be playing golf in Hawaii by then. When doing so, he’ll likely be shouting “fore”, which, funnily enough, is exactly the same word I’m shouting out now.

    The problem is, no one seems to be listening or even cares.

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  56. kowtow (8,524 comments) says:

    dead earnest says

    “social democrats, marxists, maori radicals, environmental activists and a psuedo-femenist.”

    But we got all that with the Notionals anyway.Just not quite as much. Key has calld himself progressive and he has calld New Zealand “multicultural”.

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  57. freemark (581 comments) says:

    This thread is proof that not all the ideologically blinded & immune to reality idiots are on the Left…

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  58. Gulag1917 (930 comments) says:

    Psychotic bureaucrats are a bigger problem than most politicians, because it is the bureaucrats who tell the ministers of both parties what to do.

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  59. Redbaiter (9,106 comments) says:

    “because it is the bureaucrats who tell the ministers of both parties what to do.”

    That’s true, but if the politicians ie National had any core beliefs, they’d be telling the bureaucrats what to do. As it is they don’t have those core beliefs, so just drift along and submit to every proposal made by these self serving left wing desk pilots. Useless.

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  60. Hugh Pavletich (225 comments) says:

    Dead Earnest … Your wise (and indeed cunning) comments are greatly appreciated !

    But with the greatest of respect, Prime Minister John “Can Kicker” Key has been a problem on housing issues for a very long time indeed … please read from late 2012 …

    Housing: Mr Key – Get on the Programme | Scoop News

    http://www.scoop.co.nz/stories/HL1212/S00041/housing-mr-key-get-on-the-programme.htm

    … and please note where the National Party (then Housing Minister Phil Heatley) was out of the 2008 election …

    beehive.govt.nz – Bringing better balance to the housing market

    http://beehive.govt.nz/release/bringing-better-balance-housing-market

    Do we really deserve more of this nonsense from Mr Key ?

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  61. lurcher1948 (151 comments) says:

    Nukuleka (253 comments) says:
    August 24th, 2014 at 3:38 pm
    Surely it is time to start moderating the posts here for acceptability. Whoever Simon is he is an unpleasant and foulmouthed/fingered cretin who doesn’t need to inflict his foulness upon the rest of us. Go and have cup of tea and a good lie down Si!

    Wait till you meet the IDIOT IGM,be afraid Nukuleka, he shows the results of years of failed mental health treatment under national and John Key ,he has fixations so humour him,he posts freely on this blog as a service

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  62. Colville (2,272 comments) says:

    Hugh @ 6.53
    I read both articles. Neither offered a single fact other than Tardme sells rideon mowers. Complete vacuous bollocks.

    The only way land prices will drop in this country are if (and it will never happen) the govt enters the market and buy up huge parcels of land develops them. Like it used to do.

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  63. waikatogirl (459 comments) says:

    I took the National’s Housing Policy as encouraging building own new homes which increases the housing stock. Definitely targeted at Sth Auckland voters. Like Johnboy I agree you have to be pragmatic if it helps the National vote!. Labore want to build state house stock to keep constituents paying rent and locked into being poor.

    Loved Pam’s outburst protecting Fatdotcrim from the media, Go Pam!! Attacking the media is like a red rag, way to set the media on a new tangent. As for Fatdotcrim’s claim he hacked the German chancellor – what a total prat when he is already being accused of being behind whaledump, etc

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  64. Hugh Pavletich (225 comments) says:

    Key: Treasury and RBNZ support housing package … Rob Hosking … National Business Review

    http://www.nbr.co.nz/article/key-treasury-rbnz-support-nationals-housing-package-rh-p-161320

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  65. mister nui (1,029 comments) says:

    Nothing will be done in NZ to correct this out of control housing market. I totally agree with the link posted by Hugh of the house in Texas. I regularly commute to Salt Lake, my friends’ houses there which are worth circa USD1mill would be getting >4mill here.

    If the market actually were to be turned into a free market, many home owners would be taking one helluva haircut, of course in that, so would the banks – hence why no government will do anything to let this mess fix itself.

    And that is the only way this mess can be fixed, by the gummint getting the fuck outta the way and letting the market do the work.

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  66. Hugh Pavletich (225 comments) says:

    Please read the Rob Hosking NBR report closely.

    This is supposed to help 90,000 first home buyers over 5 years at a cost to taxpayers of $218 million.

    That works out at $2,422 per first home buyer.

    Really ?

    Where … as a matter of interest, is the endorsement from the Reserve Bank ?

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  67. Hugh Pavletich (225 comments) says:

    New package to help about 90,000 lower and middle income first home buyers over the next five years, says Nick Smith … with Labour Party response | interest.co.nz

    http://www.interest.co.nz/news/71607/new-package-help-about-90000-lower-and-middle-income-first-home-buyers-over-next-five-yea

    National woos first-time home buyers at election campaign launch | Māori Television

    http://www.maoritelevision.com/news/politics/national-woos-first-time-home-buyers-election-campaign-launch

    Plan to help thousands of first home buyers get a deposit | Scoop News

    http://www.scoop.co.nz/stories/PA1408/S00371/plan-to-help-thousands-of-first-home-buyers-get-a-deposit.htm

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  68. Bottlerboy (10 comments) says:

    This policy will help my hard working kids into their first home – great stuff national.
    BTW not every one lives in bloody Auckland !!! Plenty of affordable housing (and good jobs) in the rest of NZ.

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  69. deadrightkev (472 comments) says:

    National is an utter progressive rubbish party competing to spend the taxpayers dollar at an even faster clip than Labour.

    Shit that is an appalling bribery policy. The National support muppets on this blog think the sun shines out of John Keys butt. Its time to wake up and realise you have been duped suckers.

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  70. wreck1080 (3,923 comments) says:

    National might win this election but they will certainly lose the next.

    I thought the problem with high priced housing was with supply of land, council costs, and building material costs.

    None of which is effectively addressed in here.

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  71. Hugh Pavletich (225 comments) says:

    Clearly … Mrs Key is even irritated with the Prime Minister getting ideas about his fitness programmer at times and not keeping his feet on the ground …. with the (self-promotion eyewash in front of her) “My body is a temple” sales pitch … which she corrects with “No its not … it’s a warehouse !”

    Read this rot in The Herald …

    Leaders Unplugged: Epsom cuppa puts bad memories in past … New Zealand Herald

    http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11312929

    We may need to appoint Mrs Key to Housing Minister.

    The suggestion would likely be enough to frighten the Prime Minister in to action on housing !

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  72. Hugh Pavletich (225 comments) says:

    Colville and Freemark … I do hope you are both not trolls from the NZ Property Investors Federation (NZPIF) … who I dealt with last weekend in the Sunday Star – Times …

    Houses just ‘as affordable’ … Rob Stock … Sunday Star – Times

    http://www.stuff.co.nz/business/money/10387818/Houses-just-as-affordable

    The speculators are exiting at a fast rate of knots. You both may like to check out the real estate inventory lifts underway.

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  73. All_on_Red (1,584 comments) says:

    The governments not the problem. It’s the Councils with their oxymoronic smart growth policies. We live in a democracy and the government just can’t dictate to a democratically elected council. It would kill them.
    If you wish change, then get competent people on the council. 900 planners, ffs

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  74. Gravelroad (155 comments) says:

    Has Cunliffe forgotten what Freddie Mac and Fannie Mae did to the Us economy?
    Wants to try it here.Just as well he won’t get the chance

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  75. Nigel Kearney (1,019 comments) says:

    I hope they implement this quickly after the election because I was planning to sell two properties this summer and could do with the market getting a decent sugar rush by then.

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  76. Wayne Mapp (67 comments) says:

    To all the ACT acolytes, seemingly the main contributors to this thread, you clearly have very little knowledge of the Nats history. This is classic National Party policy, harking back to the days of Sir Keith Holyaoke.

    And yes, John Key does believe in it, he has been wanting to do something like this for years.

    And making easier for young couples to buy houses has been a traditional strength of National. Kept them in power for 35 years from 1949 to 1984, with only 6 years of Labour (two terms of 3 years). Howard did much the same thing in Aus, and he was in power from 1996 to 2008.

    So for The ACT acolytes, go out and get your party above 1.4%, and let the Nats work out their own policy.

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  77. Hugh Pavletich (225 comments) says:

    Wayne Mapp … You can dress it up all you like … but it is nothing more than cack handed vote buying and a Welfare Programme For Land Speculators.

    it used to work in the past … but no longer, as voters are much better informed today. Even Labour has been lambasted for its antics in this regard.

    Amusingly … if the Labour Party suggested this nonsense, National would be on to them like a ton of bricks !

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  78. EAD (1,128 comments) says:

    Mr Mapp,

    what happened to good old fashioned price discovery – you know, the thing us “right wingers” are supposed to believe in.

    Rather than let prices fall to a level whereby the market clears, this is just another Statist solution to keep the peons enslaved in debt and so the misallocation of capital to non-productive assets goes on.

    Meanwhile, in the real world, small businesses, manufacturing and technology companies, which employ people, generate wealth and increase prosperity, are starved of investment as people invest their money in “assets” which do not produce real wealth, rather, it reallocates it. It is no surprise then that our companies are sold to foreign investors while New Zealanders with the hare-brained government incentives continue recycling their wealth in a ponzi scheme hoping someone else will bid even more for the same piece of property. Remember Steins Law “If something cannot go on forever, it will stop,”

    The National Party has gone mad.

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  79. NK (1,244 comments) says:

    I think Wayne has a point: Act should just announce the National policy but just quadruple everything and make anything free that costs something. Hell, just outbid them. Very easy.

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  80. Fisiani (1,039 comments) says:

    The ACT acolytes are polling at the margin of error. They post here because they are tolerated. If 20,000 Labour voters change to National because of this policy then that is a 40,000 switch. National appeals to approximately 50% whilst ACT appeals to 0.5%. 50% wins an election. 0.5% does not. The Left are seething. Hager’s crap is now history and the noise obscured Labour’s policies. Correct-what policies? The goal of 50% must be aimed for. Even when gifted a seat in Epsom ACT will really struggle to get another MP. That’s how much credence I give to the critics above.

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  81. tom hunter (4,895 comments) says:

    And making easier for young couples to buy houses has been a traditional strength of National. Kept them in power for 35 years from 1949 to 1984, with only 6 years of Labour (two terms of 3 years).

    During which time the country slipped from #1 or #2 in the OECD to #18, ending with an economic catastrophe so bad that we almost bought in the IMF to run the place, which was why I voted against Muldoon in 1984 and supported Labour until they fell apart in 1990.

    But yes, nobody denies the tremendous political success of National from 1949 to 1984. While most lefties have spent decades wistfully hoping for a reincarnation of Micky Savage and seeing their hopes dashed time and again, Nationalites need no longer cast their lonely eyes towards Keith Holyoake.

    Fabulous.

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  82. Gravelroad (155 comments) says:

    All On Red:
    Agreed and councils are choking development and growth with their abuse of planning processes.Council regulations and consent costs are restricting economic activity only to the very rich —- councils and corporates

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  83. NK (1,244 comments) says:

    Wayne Mapp says this is longstanding National Party policy from Sir Keith Holyoake days.

    I wasn’t aware Kiwisaver was around then. Silly me.

    Fisiani, I look at politics from the point of view of what is best for the country. You obviously couldn’t give a crap about that, and are just concerned with keeping Labour out. Those two aren’t the same.

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  84. mjw (396 comments) says:

    Have to agree with NK. And irrespective of MMP, I think people should vote for what they believe in, and expect their party to promote that agenda. All this game playing has a limited shelf life.

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  85. Hugh Pavletich (225 comments) says:

    Wayne Mapp and other vote buying apologists …

    We are simply suggesting the focus needs to be on the issues as per the major Government announcement 29 October 2012.

    Voters are way smarter today. Handing out cash to buy their support doesn’t impress them.

    beehive.govt.nz – Govt responds to housing affordability report

    http://www.beehive.govt.nz/release/govt-responds-housing-affordability-report

    … highlights …

    Having carefully considered the Productivity Commission’s recommendations, the Government is today responding with a comprehensive work programme with four key aims:

    •Increasing land supply – this will include more greenfields and brownfields developments and allow further densification of cities, where appropriate.

    •Reducing delays and costs of RMA processes associated with housing – this includes introducing a six-month time limit on council processing of medium-sized consents.

    •Improving the timely provision of infrastructure to support new housing – this will include considering new ways to co-ordinate and manage infrastructure for subdivisions.

    •Improving productivity in the construction sector – this includes an evaluation of the Productivity Partnership’s progress in achieving a 20 per cent increase in productivity by 2020.

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  86. Redbaiter (9,106 comments) says:

    Helen Key fan boys need to read this, from a post on The Dim Post-

    Having a popular right-wing party simply unable to campaign on its values or ideas is a pretty sweet place for the left to be, long term. It would be nice to be in government, but having National in there implementing left-wing policies for us is the next best thing.

    This is where your infatuation with Helen has taken us.

    Thanks morons.

    http://dimpost.wordpress.com/2014/08/24/first-thoughts-about-nationals-housing-policy/

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  87. lolitasbrother (702 comments) says:

    thank you Hugh Pavletich

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  88. UpandComer (537 comments) says:

    A lot of silliness taking place in this thread. A lot of the criticisms would be valid if this policy was National’s ONLY HOUSING POLICY

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  89. Hugh Pavletich (225 comments) says:

    Comment from an Australian housing researcher …

    “If the Australian scheme is any example, and if is not heavily means tested, then one can expect the price of target homes to rise by 1.8 times the amount of the grant.,”

    How did Mr Key think he was going to get away with nonsense like this ?

    Where is the evidence the Reserve Bank endorsed this ?

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  90. UpandComer (537 comments) says:

    A lot of silliness taking place in this thread. A lot of the criticisms would be valid if this policy was National’s ONLY HOUSING POLICY. It isn’t. They are dealing with the other fundamentals. The only way they could possibly do it any quicker would be if they were to unilaterally push out the council’s from decision making entirely, which would mean that in order to not be big government statists, they’d have to act like the biggest most statist of governments. So all the Act scions getting into a tiz need to take a deep breath. This isn’t going to push up prices and interests rates ‘exponentially’ because the supply side fundamentals are being dealt to with increasing speed and the council’s are getting the message, and as P J O Rourke says, there’s no one more right wing then someone whose just bought their first house and been given their first bills.

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  91. Hugh Pavletich (225 comments) says:

    Upandunder … There is the small matter of the restoration of Mr Keys “Mr Clean” image … following the self-inflicted damage he has done to his own “brand” with the material in the unfortunate Hager book.

    With all due respects, being stupid is not being clever.

    Some of us expect much better judgement from Mr Key.

    You need to read closely what Mr Key said to Mary Kissel of the Wall Street Journal March 2009 …. Amplifying what he had said in the lead up to the 2008 election … where people like me believed him …

    New Zealand’s Prime Minister John Key – You cant spend your way out of a crisis – WSJ

    http://online.wsj.com/news/articles/SB123638162497057661

    Is Mr Key practicing what he’s preaching ?

    Why are you failing to hold Mr Key to account ?

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  92. UpandComer (537 comments) says:

    Mr Pavletich.

    JK hasn’t done any ‘self-inflicted’ damage from Hager’s book.

    I defer to your sage comment that antonyms don’t have the same meaning.

    Yes, some people expected King Canute to be wrong. JK has shown pretty remarkable judgment to never poll below 45% and to be one of NZ’s most positive and effective Prime Ministers.

    I just read the article. He’s done nothing that contradicts his views in the article. Per the article he’s resided over increased wages, increased productivity, lower tax rates attracting mobile corporate capital, balanced environmental policy, lower spending, better govt spending, and he would have got the RMA reform through if Peter Dunne hadn’t been hedging his bets. So I don’t know what your criticism is. JK took a middle path suited to our macroeconomic profile between the US and the UK, and as a result we’re much better off then both.

    So yes, JK is practicing almost to the letter exactly what he’s preaching/preached.

    I’m holding JK to account by giving him a fair assessment. Why don’t you do the same?

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  93. hj (7,033 comments) says:

    They say a picture can paint a thousand words – so let’s save words and cut straight to the chase on the issue of immigration and house prices…
    http://garethsworld.com/blog/economics/migration-matters-house-prices/

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  94. hj (7,033 comments) says:

    Having carefully considered the Productivity Commission’s recommendations, the Government is today responding with a comprehensive work programme with four key aims:

    Productivity Commision:
    We recommend that you:
    a agree to the inquiry selection process set out in Appendix 1
    Agree/disagree
    b agree that Commission’s second tranche of inquiries be selected on the degree that
    they:
    are relatively uncontroversial given the desire to establish broad political support for the Commission avoid embarrassing National, Labour or the Greens.

    • utilise the Commission’s unique position as an independent agency with high
    quality analytical ability and community engagement approaches
    • support the establishment of the Commission by developing its capability,
    capacity and reputation, and
    • have the potential to improve productivity and support the overall well-being of
    New Zealanders.

    http://www.treasury.govt.nz/publications/informationreleases/productivitycommission/pdfs/t2011-2000.pdf

    “Among policy and analytical circles in New Zealand there is a pretty high degree of enthusiasm for high levels of immigration. Some of that stems from the insights of literature on increasing returns to scale. Whatever the general global story, the actual productivity track record here in the wake of very strong inward migration is poor. In an Australian context, the Productivity Commission – hardly a hot-bed of xenophobia or populism – concluded that any benefits from migration to Australia were captured by migrants and there were few or no discernible economic benefits to Australians. And that was in a country already rich and successful and with materially higher national saving and domestic investment rates than those in NZ.”

    http://www.treasury.govt.nz/downloads/pdfs/mi-jarrett-comm.pdf

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  95. hj (7,033 comments) says:

    You Can’t Spend Your Way Out of the Crisis
    New Zealand’s prime minister wants to give his country a competitive advantage instead.

    http://online.wsj.com/news/articles/SB123638162497057661
    …………
    So what does he do: a massive immigration sugar rush: we trade our lifestyle for theirs and the wealthy laugh all the way to their lifestyle properties.

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  96. mcardnas (84 comments) says:

    nationals Housing policy is the largest joke released thus far !

    wont HELP any one !

    least of all those most in need

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  97. hj (7,033 comments) says:

    NK says we haven’t had much immigration

    Across the OECD housing prices are strongly correlated with population growth. There
    is also a strong correlation between population growth and residential construction
    activity. As noted, New Zealand has had strong population growth, with a material
    contribution from immigration. Migration tends to be pro-cyclical: people choose to come
    128
    to New Zealand, or to remain here, when economic conditions are favourable. House
    prices also rise with economic confidence since confidence increases expected income
    129
    growth and thus housing demand. Rising house prices thus reflect the combined effects
    of confidence and immigration, leading to difficulty in establishing causality. The evolution
    of house prices and migration in New Zealand is shown in Figure 3.

    Although agreement between observable national and regional results would give greater confidence, it is possible to have large effects at the national level that are hard to identify at the regional level. On balance, the available evidence suggests that migration, in conjunction with sluggish supply of new housing and associated land use restrictions, may
    139
    have had a significant effect on house prices in New Zealand.

    http://www.treasury.govt.nz/publications/research-policy/wp/2014/14-10

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  98. hj (7,033 comments) says:

    New Zealand First leader Winston Peters claims he has discovered a migration based money laundering scheme in Auckland housing.

    A housing sub-division on Auckland’s outskirts has, he says, sold 22 properties all for the same price and all too foreign investors.

    Speaking in Epsom to around 60 supporters at an election rally, Peters was damning the National Party’s announcement today of a $20,000 kick-start for low and middle income couples who build a new home.

    He said this comes as Housing Minister Nick Smith keeps denying there is a housing crisis in Auckland.

    Peters said there was, and it was mostly to do with the ease with which foreigners could buy housing in New Zealand.

    He claimed that one man, living in Beijing, owned 55 houses in Auckland, as part of what he said was huge banking taking place in the city.

    “I know something about money laundering and tax evasion,” he said and pointed to a land development on Auckland’s outskirts were all 22 lots were sold to overseas buyers.

    “All 22 lots sold to overseas buyers; Kiwi buyers did not even get to see the land promoted because it was not promoted in this country,” he said.

    An “interesting aspect” was that every lot sold for the same price, $500,000.

    “Ever heard that before?”

    Peters said something suspicious was happening and the Inland Revenue Department should look at it.

    “What it points to is money laundering, GST avoidance and cash top-ups,” he said.”They will not be selling it in total for $500,000; there will be behind the scenes and under the table payments.

    “Foreign owners have tax advantages not available to New Zealand investors.

    http://www.stuff.co.nz/national/politics/10418387/Winston-Peters-points-at-laundering-scheme

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  99. hj (7,033 comments) says:

    RBNZ slams the population ponzi

    The Reserve Bank of New Zealand’s (RBNZ) Michael Reddell has written an interesting paper questioning the merits of New Zealand’s high immigration program, which appears to have crowded-out (through higher interest rates and a high average real exchange rate) other productive investment, lowering living standards in the process:

    Taking the period as a whole, it is likely that the markedly increased net inflow of non-New Zealanders – a new wave entering each and every year – has extended and exaggerated the degree to which our average interest rates have exceeded those of other advanced economies. That, in turn, will have extended and exacerbated the persistent severe average overvaluation of the real exchange rate. In that sense, government policy has tended to directly, if inadvertently, stymie the rebalancing and adjustment that private citizens’ choices would otherwise have brought about.
    Had that net outflow experienced in the 1970s and 1980s continued over the last two decades, the resources that had to be devoted to the housing (and the other population-driven components of the capital stock) demands of a fairly rapidly rising population would have been free for other uses. Other things equal, we might have expected to have seen rather lower real interest rates and a lower real exchange rate. The prospects for “capital deepening”, and for associated improvements in labour productivity and MFP, made possible by the other reforms and liberalisation of the late 80s and early 1990s, would have been materially enhanced.

    http://www.macrobusiness.com.au/2014/04/rbnz-slams-the-population-ponzi/

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  100. Steve Wrathall (284 comments) says:

    Property ownership based on your own hard work is classic conservatism. Ownership based on handouts from other taxpayers is not. It is bludging

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  101. hj (7,033 comments) says:

    Dead Earnest (131 comments) says:

    what John Key knows (and you seem to have lost sight of) is that he has got to win this election or NZ (that’s you and me and 4.2 million others) will be become an economic basket case, run by an assortment of social democrats, marxists, maori radicals, environmental activists and a psuedo-femenist.
    ………..
    Another plausible slant is this one:

    While immigration played a key role in house inflation in the three years after 2001 (Reserve
    Bank 2007), it is unknown to what extent on-going immigration continued to drive price rises.
    The housing boom has meant good profits for many New Zealand companies supplying
    materials and building services,
    but it implies investors would rather invest in their country’s
    homes rather than its businesses (Bollard 2005). The high returns for property has attracted
    finance and reduced the capital available for productive investment (Moody, 2006). The
    consequence is investment is going in to industries with limited capacity to increase per capita
    incomes. For example, real estate and building are domestically bound and do not have the
    market potential of export industries. They also have less opportunity to increase productivity
    through new processes and products. The irony is, as these sectors grow, they have incurred
    skills shortages which in turn has increased demand for skilled immigrants.
    The Department
    of Statistics ‘Long Term Skill Shortage List’ of 28/3/2006 includes carpenter/joiner, plumber,
    electricians, fitter and turners, fitter welders; all indicative of a nation building its
    construction/property sector.
    There is a danger that a sector of the economy is being augmented that is totally reliant on a
    small domestic economy. Not only do these industries have limited potential for per-capita
    growth but ‘deriving growth via factor inputs such as labour places pressure on infrastructure
    such as transport and land supply, and ultimately have a further negative impact on growth
    (ARC 2005). Finally, as the sector gets larger, it gains in lobbying/political strength and can
    lobby for immigration regardless if it is the best interests of the economy as a whole.
    This
    could be seen in Canada where the development industry has lobbied hard for high sustained
    immigration levels (Ley and Tutchener 2001).

    Dr Greg Clydesdale

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  102. Fentex (986 comments) says:

    I much prefer that to the Government borrowing $3 billion more per year to try and become NZ’s biggest property company!

    Such positive words for direct public financial support of housing bubbles. I would have thought a member of an honest taxpayers union, especially one who repeatedly insists the issue is solely with supply, would castigate a government for daring to tax to feed housing prices without doing anything to mitigate demand outstripping supply due to unnecessary regulation on land.

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  103. PhilBest (5,125 comments) says:

    What disappoints me about this thread, is how some perfectly accurate comments about how pointless this policy is, have received so many down-votes. I would have expected more “centre right” blog followers to be able to see beyond partisan alliegances and hold their team to a higher standard.

    I definitely don’t want a Labour/Greens/Maori/NZFirst coalition as NZ government, but I regret that National has given its opponents massive grounds for fair accusations, with this pointless and cynical policy. Even Josie Pagani in today’s Herald hits the nail right on the head about housing supply. Not that I believe for a moment that the “solutions” to housing supply coming from her side, are of any use. National needs to actually get a spine and actually let rip with the greenfields development (Hugh Pavletich has been the voice of sanity on this all along) – National’s opponents are screaming enviro-rape even with National’s timid, pussyfooting proposals so far; National needs to take a leaf out of Roger Douglas’s book and actually DO it – because your opponents are going to make just as much noise if you pussy-foot.

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  104. hj (7,033 comments) says:

    A website which steers Chinese buyers towards overseas real estate agents says it has seen a huge increase in cashed-up Chinese wanting to buy in New Zealand.

    Andrew Taylor, chief executive of Juwai, a website which claims 1.5m users, said New Zealand had jumped from tenth to fifth – climbing countries such as Malaysia and Germany – in a year-on-year chart of where Chinese were pursuing offshore property.

    The average buyer on the Juwai website, which steers property hunters towards overseas home advertisements translated into Chinese, had $AU1.6m to spend, and 71 per cent of them were prepared to pay in full in cash.

    Taylor said the site fielded 900 firm New Zealand inquiries from Chinese buyers in the last two months alone and on a per capita basis, New Zealand was a clear “number one” for Chinese buyers. Surprisingly, Queenstown was one of the top-three locations they were interested in.

    http://www.stuff.co.nz/business/industries/10416877/Chinese-buyers-in-rush-to-NZ

    RMA, RMA,RMA……… ZZZZZZZZZZZ

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  105. Hugh Pavletich (225 comments) says:

    Do read the article below with the hyperlinked articles as well …

    New Zealand National Party First Home Buyer Grants Slammed | Scoop News

    http://www.scoop.co.nz/stories/HL1408/S00162/new-zealand-national-party-first-home-buyer-grants-slammed.htm

    Isn’t it remarkable the Labour Party has figured this out … but sadly the crony capitalists / economic illiterate elements within National have not …

    Home buyer subsidy discredited in Oz | Labour Party | Scoop News

    http://www.scoop.co.nz/stories/PA1408/S00379/home-buyer-subsidy-discredited-in-oz.htm

    Is National attempting to become the Crony Capitalist Party ? …

    Crony Chronicles: I Want To Be A Crony – YouTube

    https://www.youtube.com/watch?v=2aO9tA5DWJM&feature=player_embedded

    … further reading at Top Scoop …

    http://www.scoop.co.nz/

    … and thank you for your kind comments Phil Best .

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